Congressional Record, Volume 146 Issue 84 (Wednesday, June 28, 2000)

[Congressional Record Volume 146, Number 84 (Wednesday, June 28, 2000)]
[House]
[Pages H5319-H5415]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

MEDICARE RX 2000 ACT

Mr. ARCHER. Mr. Speaker, pursuant to H. Res. 539, I call up the bill
(H.R. 4680), to amend title XVIII of the Social Security Act to provide
for a voluntary program for prescription drug coverage under the
Medicare Program, to modernize the Medicare Program, and for other
purposes, and ask for its immediate consideration in the House.
The Clerk read the title of the bill.
The SPEAKER pro tempore (Mr. LaHood). Pursuant to House Resolution
539, the bill is considered read for amendment.
The text of the bill, H.R. 4680, is as follows:

H.R. 4680

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Medicare
Rx 2000 Act''.
(b) Table of Contents.--The table of contents of this Act
is as follows:

Sec. 1. Short title; table of contents.

TITLE I--MEDICARE PRESCRIPTION DRUG BENEFIT

Sec. 101. Establishment of a medicare prescription drug benefit.

``Part D--Voluntary Prescription Drug Benefit Program

``Sec. 1860A. Benefits; eligibility; enrollment; and coverage period.
``Sec. 1860B. Requirements for qualified prescription drug coverage.
``Sec. 1860C. Beneficiary protections for qualified prescription drug
coverage.
``Sec. 1860D. Requirements for prescription drug plan (PDP) sponsors.
``Sec. 1860E. Process for beneficiaries to select qualified
prescription drug coverage.
``Sec. 1860F. Premiums.
``Sec. 1860G. Premium and cost-sharing subsidies for low-income
individuals.
``Sec. 1860H. Subsidies for all medicare beneficiaries through
reinsurance for qualified prescription drug coverage.
``Sec. 1860I. Medicare Prescription Drug Account in Federal
Supplementary Medical Insurance Trust Fund.
``Sec. 1860J. Definitions; treatment of references to provisions in
part C.
Sec. 102. Offering of qualified prescription drug coverage under the
Medicare+Choice program.
Sec. 103. Medicaid amendments.
Sec. 104. Medigap transition provisions.

TITLE II--MODERNIZATION OF ADMINISTRATION OF MEDICARE

Subtitle A--Medicare Benefits Administration

Sec. 201. Establishment of administration.
``Sec. 1807. Medicare Benefits Administration.
Sec. 202. Miscellaneous administrative provisions.

Subtitle B--Oversight of Financial Sustainability of the Medicare
Program

Sec. 211. Additional requirements for annual financial report and
oversight on medicare program.

Subtitle C--Changes in Medicare Coverage and Appeals Process

Sec. 221. Revisions to medicare appeals process.
Sec. 222. Provisions with respect to limitations on liability of
beneficiaries.
Sec. 223. Waivers of liability for cost sharing amounts.
Sec. 224. Elimination of motions by the Secretary on decisions of the
Provider Reimbursement Review Board.

TITLE III--MEDICARE+CHOICE REFORMS; PRESERVATION OF MEDICARE PART B
DRUG BENEFIT

Subtitle A--Medicare+Choice Reforms

Sec. 301. Increase in national per capita Medicare+Choice growth
percentage in 2001 and 2002.
Sec. 302. Permanently removing application of budget neutrality
beginning in 2002.
Sec. 303. Increasing minimum payment amount.
Sec. 304. Allowing movement to 50:50 percent blend in 2002.
Sec. 305. Increased update for payment areas with only one or no
Medicare+Choice contracts.
Sec. 306. Permitting higher negotiated rates in certain Medicare+Choice
payment areas below national average.
Sec. 307. 10-year phase in of risk adjustment based on data from all
settings.

Subtitle B--Preservation of Medicare Coverage of Drugs and Biologicals

Sec. 311. Preservation of coverage of drugs and biologicals under part
B of the medicare program.

TITLE I--MEDICARE PRESCRIPTION DRUG BENEFIT

SEC. 101. ESTABLISHMENT OF A MEDICARE PRESCRIPTION DRUG
BENEFIT.

(a) In General.--Title XVIII of the Social Security Act is
amended--
(1) by redesignating part D as part E; and
(2) by inserting after part C the following new part:

``Part D--Voluntary Prescription Drug Benefit Program

``SEC. 1860A. BENEFITS; ELIGIBILITY; ENROLLMENT; AND COVERAGE
PERIOD.

``(a) Provision of Qualified Prescription Drug Coverage
Through Enrollment in Plans.--Subject to the succeeding
provisions of this part, each individual who is enrolled
under part B is entitled to obtain qualified prescription
drug coverage (described in section 1860B(a)) as follows:
``(1) Medicare+choice plan.--If the individual is eligible
to enroll in a Medicare+Choice plan that provides qualified
prescription drug coverage under section 1851(j), the
individual may enroll in the plan and obtain coverage through
such plan.
``(2) Prescription drug plan.--If the individual is not
enrolled in a Medicare+Choice plan that provides qualified
prescription drug coverage, the individual may enroll under
this part in a prescription drug plan (as defined in section
1860C(a)).

Such individuals shall have a choice of such plans under
section 1860E(d).
``(b) General Election Procedures.--
``(1) In general.--An individual may elect to enroll in a
prescription drug plan under this part, or elect the option
of qualified prescription drug coverage under a
Medicare+Choice plan under part C, and change such election
only in such manner and form as may be prescribed by
regulations of the Administrator of the Medicare Benefits
Administration (appointed under section 1807(b)) (in this
part referred to as the `Medicare Benefits Administrator')
and only during an election period prescribed in or under
this subsection.
``(2) Election periods.--
``(A) In general.--Except as provided in this paragraph,
the election periods under this subsection shall be the same
as the coverage election periods under the Medicare+Choice
program under section 1851(e), including--
``(i) annual coordinated election periods; and
``(ii) special election periods.

[[Page H5320]]

shall be an initial election period which is the same as the
initial election period under section 1851(e)(1).
``(C) Additional special election periods.--The Medicare
Benefits Administrator shall establish special election
periods--
``(i) in cases of individuals who have and involuntarily
lose prescription drug coverage described in subsection
(c)(2)(C); and
``(ii) in cases described in section 1837(h) (relating to
errors in enrollment), in the same manner as such section
applies to part B.
``(D) One-time enrollment permitted for current part a only
beneficiaries.--In the case of an individual who as of
November 1, 2002--
``(i) is entitled to benefits under part A; and
``(ii) is not (and has not previously been) enrolled under
part B;

the individual shall be eligible to enroll in a prescription
drug plan under this part but only during the period
described in subparagraph (B)(i). If the individual enrolls
in such a plan, the individual may change such enrollment
under this part, but the individual may not enroll in a
Medicare+Choice plan under part C unless the individual
enrolls under part B. Nothing in this subparagraph shall be
construed as providing for coverage under a prescription drug
plan of benefits that are excluded because of the application
of section 1860B(f)(2)(B).
``(c) Guaranteed Issue; Community Rating; and
Nondiscrimination.--
``(1) Guaranteed issue.--
``(A) In general.--An eligible individual who is eligible
to elect qualified prescription drug coverage under a
prescription drug plan or Medicare+Choice plan at a time
during which elections are accepted under this part with
respect to the plan shall not be denied enrollment based on
any health status-related factor (described in section
2702(a)(1) of the Public Health Service Act) or any other
factor.
``(B) Medicare+choice limitations permitted.--The
provisions of paragraphs (2) and (3) (other than subparagraph
(C)(i), relating to default enrollment) of section 1851(g)
(relating to priority and limitation on termination of
election) shall apply to PDP sponsors under this subsection.
``(2) Community-rated premium.--
``(A) In general.--In the case of an individual who
maintains (as determined under subparagraph (C)) continuous
prescription drug coverage since first qualifying to elect
prescription drug coverage under this part, a PDP sponsor or
Medicare+Choice organization offering a prescription drug
plan or Medicare+Choice plan that provides qualified
prescription drug coverage and in which the individual is
enrolled may not deny, limit, or condition the coverage or
provision of covered prescription drug benefits or increase
the premium under the plan based on any health status-related
factor described in section 2702(a)(1) of the Public Health
Service Act or any other factor.
``(B) Late enrollment penalty.--In the case of an
individual who does not maintain such continuous prescription
drug coverage, a PDP sponsor or Medicare+Choice organization
may (notwithstanding any provision in this title) increase
the premium otherwise applicable or impose a pre-existing
condition exclusion with respect to qualified prescription
drug coverage in a manner that reflects additional actuarial
risk involved. Such a risk shall be established through an
appropriate actuarial opinion of the type described in
subparagraphs (A) through (C) of section 2103(c)(4).
``(C) Continuous prescription drug coverage.--An individual
is considered for purposes of this part to be maintaining
continuous prescription drug coverage on and after a date if
the individual establishes that there is no period of 63 days
or longer on and after such date (beginning not earlier than
January 1, 2003) during all of which the individual did not
have any of the following prescription drug coverage:
``(i) Coverage under prescription drug plan or
medicare+choice plan.--Qualified prescription drug coverage
under a prescription drug plan or under a Medicare+Choice
plan.
``(ii) Medicaid prescription drug coverage.--Prescription
drug coverage under a medicaid plan under title XIX,
including through the Program of All-inclusive Care for the
Elderly (PACE) under section 1934, through a social health
maintenance organization (referred to in section 4104(c) of
the Balanced Budget Act of 1997), or through a
Medicare+Choice project that demonstrates the application of
capitation payment rates for frail elderly medicare
beneficiaries through the use of a interdisciplinary team and
through the provision of primary care services to such
beneficiaries by means of such a team at the nursing facility
involved.
``(iii) Prescription drug coverage under group health
plan.--Any outpatient prescription drug coverage under a
group health plan, including a health benefits plan under the
Federal Employees Health Benefit Plan under chapter 89 of
title 5, United States Code, and a qualified retiree
prescription drug plan as defined in section 1860H(f)(1).
``(iv) Prescription drug coverage under certain medigap
policies.--Coverage under a medicare supplemental policy
under section 1882 that provides benefits for prescription
drugs (whether or not such coverage conforms to the standards
for packages of benefits under section 1882(p)(1)), but only
if the policy was in effect on January 1, 2003, and only
until the date such coverage is terminated.
``(v) State pharmaceutical assistance program.--Coverage of
prescription drugs under a State pharmaceutical assistance
program.
``(vi) Veterans' coverage of prescription drugs.--Coverage
of prescription drugs for veterans under chapter 17 of title
38, United States Code.
``(D) Certification.--For purposes of carrying out this
paragraph, the certifications of the type described in
sections 2701(e) of the Public Health Service Act and in
section 9801(e) of the Internal Revenue Code shall also
include a statement for the period of coverage of whether the
individual involved had prescription drug coverage described
in subparagraph (C).
``(E) Construction.--Nothing in this section shall be
construed as preventing the disenrollment of an individual
from a prescription drug plan or a Medicare+Choice plan based
on the termination of an election described in section
1851(g)(3), including for non-payment of premiums or for
other reasons specified in subsection (d)(3), which takes
into account a grace period described in section
1851(g)(3)(B)(i).
``(3) Nondiscrimination.--A PDP sponsor offering a
prescription drug plan shall not establish a service area in
a manner that would discriminate based on health or economic
status of potential enrollees.
``(d) Effective Date of Elections.--
``(1) In general.--Except as provided in this section, the
Medicare Benefits Administrator shall provide that elections
under subsection (b) take effect at the same time as the
Secretary provides that similar elections under section
1851(e) take effect under section 1851(f).
``(2) No election effective before 2003.--In no case shall
any election take effect before January 1, 2003.
``(3) Termination.--The Medicare Benefits Administrator
shall provide for the termination of elections in the case
of--
``(A) termination of coverage under part B (other than the
case of an individual described in subsection (b)(2)(D)
(relating to part A only individuals); and
``(B) termination of elections described in section
1851(g)(3) (including failure to pay required premiums).

``SEC. 1860B. REQUIREMENTS FOR QUALIFIED PRESCRIPTION DRUG
COVERAGE.

``(a) Requirements.--
``(1) In general.--For purposes of this part and part C,
the term `qualified prescription drug coverage' means either
of the following:
``(A) Standard coverage with access to negotiated prices.--
Standard coverage (as defined in subsection (b)) and access
to negotiated prices under subsection (d).
``(B) Actuarially equivalent coverage with access to
negotiated prices.--Coverage of covered outpatient drugs
which meets the alternative coverage requirements of
subsection (c) and access to negotiated prices under
subsection (d).
``(2) Permitting additional outpatient prescription drug
coverage.--
``(A) In general.--Subject to subparagraph (B), nothing in
this part shall be construed as preventing qualified
prescription drug coverage from including coverage of covered
outpatient drugs that exceeds the coverage required under
paragraph (1), but any such additional coverage shall be
limited to coverage of covered outpatient drugs.
``(B) Disapproval authority.--The Medicare Benefits
Administrator shall review the offering of qualified
prescription drug coverage under this part or part C. If the
Administrator finds that, in the case of a qualified
prescription drug coverage under a prescription drug plan or
a Medicare+Choice plan, that the organization or sponsor
offering the coverage is purposefully engaged in activities
intended to result in favorable selection of those eligible
medicare beneficiaries obtaining coverage through the plan,
the Administrator may terminate the contract with the sponsor
or organization under this part or part C.
``(3) Application of secondary payor provisions.--The
provisions of section 1852(a)(4) shall apply under this part
in the same manner as they apply under part C.
``(b) Standard Coverage.--For purposes of this part, the
`standard coverage' is coverage of covered outpatient drugs
(as defined in subsection (f)) that meets the following
requirements:
``(1) Deductible.--The coverage has an annual deductible--
``(A) for 2003, that is equal to $250; or
``(B) for a subsequent year, that is equal to the amount
specified under this paragraph for the previous year
increased by the percentage specified in paragraph (5) for
the year involved.

Any amount determined under subparagraph (B) that is not a
multiple of $5 shall be rounded to the nearest multiple of
$5.
``(2) Limits on cost-sharing.--The coverage has cost-
sharing (for costs above the annual deductible specified in
paragraph (1) and up to the initial coverage limit under
paragraph (3)) that is equal to 50 percent or that is
actuarially consistent (using processes established under
subsection (e)) with an average expected payment of 50
percent of such costs.
``(3) Initial coverage limit.--Subject to paragraph (4),
the coverage has an initial coverage limit on the maximum
costs that may be recognized for payment purposes (above the
annual deductible)--

[[Page H5321]]

``(A) for 2003, that is equal to $2,100; or
``(B) for a subsequent year, that is equal to the amount
specified in this paragraph for the previous year, increased
by the annual percentage increase described in paragraph (5)
for the year involved.

Any amount determined under subparagraph (B) that is not a
multiple of $25 shall be rounded to the nearest multiple of
$25.
``(4) Limitation on out-of-pocket expenditures by
beneficiary.--
``(A) In general.--Notwithstanding paragraph (3), the
coverage provides benefits without any cost-sharing after the
individual has incurred costs (as described in subparagraph
(C)) for covered outpatient drugs in a year equal to the
annual out-of-pocket limit specified in subparagraph (B).
``(B) Annual out-of-pocket limit.--For purposes of this
part, the `annual out-of-pocket limit' specified in this
subparagraph--
``(i) for 2003, is equal to $6,000; or
``(ii) for a subsequent year, is equal to the amount
specified in the subparagraph for the previous year,
increased by the annual percentage increase described in
paragraph (5) for the year involved.

Any amount determined under clause (ii) that is not a
multiple of $100 shall be rounded to the nearest multiple of
$100.
``(C) Application.--In applying subparagraph (A)--
``(i) incurred costs shall only include costs incurred for
the annual deductible (described in paragraph (1)), cost-
sharing (described in paragraph (2)), and amounts for which
benefits are not provided because of the application of the
initial coverage limit described in paragraph (3); but
``(ii) costs shall be treated as incurred without regard to
whether the individual or another person, including a State
program, has paid for such costs, but shall not be counted
insofar as such costs are covered as benefits under a
prescription drug plan, a Medicare+Choice plan, or other
third-party coverage.
``(5) Annual percentage increase.--For purposes of this
part, the annual percentage increase specified in this
paragraph for a year is equal to the annual percentage
increase in average per capita aggregate expenditures for
covered outpatient drugs in the United States for medicare
beneficiaries, as determined by the Medicare Benefits
Administrator for the 12-month period ending in July of the
previous year.
``(c) Alternative Coverage Requirements.--A prescription
drug plan or Medicare+Choice plan may provide a different
prescription drug benefit design from the standard coverage
described in subsection (b)(1) so long as the following
requirements are met:
``(1) Assuring at least actuarially equivalent coverage.--
``(A) Assuring equivalent value of total coverage.--The
actuarial value of the total coverage (as determined under
subsection (e)) is at least equal to the actuarial value (as
so determined) of standard coverage.
``(B) Assuring equivalent unsubsidized value of coverage.--
The unsubsidized value of the coverage is at least equal to
the unsubsidized value of standard coverage. For purposes of
this subparagraph, the unsubsidized value of coverage is the
amount by which the actuarial value of the coverage (as
determined under subsection (e)) exceeds the actuarial value
of the reinsurance subsidy payments under section 1860H with
respect to such coverage.
``(C) Assuring standard payment for costs at initial
coverage limit.--The coverage is designed, based upon an
actuarially representative pattern of utilization (as
determined under subsection (e)), to provide for the payment,
with respect to costs incurred that are equal to the sum of
the deductible under subsection (b)(1) and the initial
coverage limit under subsection (b)(3), of an amount equal to
at least such initial coverage limit multiplied by the
percentage specified in subsection (b)(2).
``(2) Limitation on out-of-pocket expenditures by
beneficiaries.--The coverage provides the limitation on out-
of-pocket expenditures by beneficiaries described in
subsection (b)(4).
``(d) Access to Negotiated Prices.--Under qualified
prescription drug coverage offered by a PDP sponsor or a
Medicare+Choice organization, the sponsor or organization
shall provide beneficiaries with access to negotiated prices
(including applicable discounts) used for payment for covered
outpatient drugs, regardless of the fact that no benefits may
be payable under the coverage with respect to such drugs
because of the application of cost-sharing or an initial
coverage limit (described in subsection (b)(3)).
``(e) Actuarial Valuation; Determination of Annual
Percentage Increases.--
``(1) Processes.--For purposes of this section, the
Medicare Benefits Administrator shall establish processes and
methods--
``(A) for determining the actuarial valuation of
prescription drug coverage, including--
``(i) an actuarial valuation of standard coverage and of
the reinsurance subsidy payments under section 1860H;
``(ii) the use of generally accepted actuarial principles
and methodologies; and
``(iii) applying the same methodology for determinations of
alternative coverage under subsection (c) as is used with
respect to determinations of standard coverage under
subsection (b); and
``(B) for determining annual percentage increases described
in subsection (b)(5).
``(2) Use of outside actuaries.--Under the processes under
paragraph (1)(A), PDP sponsors and Medicare+Choice
organizations may use actuarial opinions certified by
independent, qualified actuaries to establish actuarial
values.
``(f) Covered Outpatient Drugs Defined.--
``(1) In general.--Except as provided in this subsection,
for purposes of this part, the term `covered outpatient drug'
means--
``(A) a drug that may be dispensed only upon a prescription
and that is described in subparagraph (A)(i) or (A)(ii) of
section 1927(k)(2); or
``(B) a biological product or insulin described in
subparagraph (B) or (C) of such section.
``(2) Exclusions.--
``(A) In general.--Such term does not include drugs or
classes of drugs, or their medical uses, which may be
excluded from coverage or otherwise restricted under section
1927(d)(2), other than subparagraph (E) thereof (relating to
smoking cessation agents).
``(B) Avoidance of duplicate coverage.--A drug prescribed
for an individual that would otherwise be a covered
outpatient drug under this part shall not be so considered if
payment for such drug is available under part A or B (but
shall be so considered if such payment is not available
because benefits under part A or B have been exhausted),
without regard to whether the individual is entitled to
benefits under part A or enrolled under part B.
``(3) Application of formulary restrictions.--A drug
prescribed for an individual that would otherwise be a
covered outpatient drug under this part shall not be so
considered under a plan if the plan excludes the drug under a
formulary that meets the requirements of section 1860C(f)(2)
(including providing an appeal process).
``(4) Application of general exclusion provisions.--A
prescription drug plan or Medicare+Choice plan may exclude
from qualified prescription drug coverage any covered
outpatient drug--
``(A) for which payment would not be made if section
1862(a) applied to part D; or
``(B) which are not prescribed in accordance with the plan
or this part.

Such exclusions are determinations subject to reconsideration
and appeal pursuant to section 1860C(f).

``SEC. 1860C. BENEFICIARY PROTECTIONS FOR QUALIFIED
PRESCRIPTION DRUG COVERAGE.

``(a) Guaranteed Issue and Nondiscrimination.--For
provisions requiring guaranteed issue, community-rated
premiums, and nondiscrimination, see sections 1860A(c) and
1860F(b).
``(b) Dissemination of Information.--
``(1) General information.--A PDP sponsor shall disclose,
in a clear, accurate, and standardized form to each enrollee
with a prescription drug plan offered by the sponsor under
this part at the time of enrollment and at least annually
thereafter, the information described in section 1852(c)(1)
relating to such plan. Such information includes the
following:
``(A) Access to covered outpatient drugs, including access
through pharmacy networks.
``(B) How any formulary used by the sponsor functions.
``(C) Co-payments and deductible requirements.
``(D) Grievance and appeals procedures.
``(2) Disclosure upon request of general coverage,
utilization, and grievance information.--Upon request of an
individual eligible to enroll under a prescription drug plan,
the PDP sponsor shall provide the information described in
section 1852(c)(2) (other than subparagraph (D)) to such
individual.
``(3) Response to beneficiary questions.--Each PDP sponsor
offering a prescription drug plan shall have a mechanism for
providing specific information to enrollees upon request. The
sponsor shall make available, through an Internet website and
in writing upon request, information on specific changes in
its formulary.
``(4) Claims information.--Each PDP sponsor offering a
prescription drug plan must furnish to enrolled individuals
in a form easily understandable to such individuals an
explanation of benefits (in accordance with section 1806(a)
or in a comparable manner) and a notice of the benefits in
relation to initial coverage limit and annual out-of-pocket
limit for the current year, whenever prescription drug
benefits are provided under this part (except that such
notice need not be provided more often than monthly).
``(c) Access to Covered Benefits.--
``(1) Assuring pharmacy access.--The PDP sponsor of the
prescription drug plan shall secure the participation of
sufficient numbers of pharmacies (which may include mail
order pharmacies) to ensure convenient access (including
adequate emergency access) for enrolled beneficiaries.
Nothing in this paragraph shall be construed as requiring the
participation of all pharmacies in any area under a plan.
``(2) Access to negotiated prices for prescription drugs.--
The PDP sponsor of a prescription drug plan shall issue such
a card that may be used by an enrolled beneficiary to assure
access to negotiated prices under section 1860B(d) for the
purchase of prescription drugs for which coverage is not
otherwise provided under the prescription drug plan.

[[Page H5322]]

``(3) Requirements on development and application of
formularies.--Insofar as a PDP sponsor of a prescription drug
plan uses a formulary, the following requirements must be
met:
``(A) Formulary committee.--The sponsor must establish a
pharmaceutical and therapeutic committee that develops the
formulary. Such committee shall include at least one
physician and at least one pharmacist.
``(B) Inclusion of drugs in all therapeutic categories.--
The formulary must include drugs within all therapeutic
categories and classes of covered outpatient drugs (although
not necessarily for all drugs within such categories and
classes).
``(C) Appeals and exceptions to application.--The PDP
sponsor must have, as part of the appeals process under
subsection (i)(2), a process for appeals for denials of
coverage based on such application of the formulary.
``(d) Cost and Utilization Management; Quality Assurance;
Medication Therapy Management Program.--
``(1) In general.--The PDP sponsor shall have in place--
``(A) an effective cost and drug utilization management
program, including appropriate incentives to use generic
drugs, when appropriate;
``(B) quality assurance measures and systems to reduce
medical errors and adverse drug interactions, including a
medication therapy management program described in paragraph
(2); and
``(C) a program to control fraud, abuse, and waste.
``(2) Medication therapy management program.--
``(A) In general.--A medication therapy management program
described in this paragraph is a program of drug therapy
management and medication administration that is designed to
assure that covered outpatient drugs under the prescription
drug plan are appropriately used to achieve therapeutic goals
and reduce the risk of adverse events, including adverse drug
interactions.
``(B) Elements.--Such program may include--
``(i) enhanced beneficiary understanding of such
appropriate use through beneficiary education, counseling,
and other appropriate means; and
``(ii) increased beneficiary adherence with prescription
medication regimens through medication refill reminders,
special packaging, and other appropriate means.
``(C) Development of program in cooperation with licensed
pharmacists.--The program shall be developed in cooperation
with licensed pharmacists and physicians.
``(D) Considerations in pharmacy fees.--The PDP sponsor of
a prescription drug program shall take into account, in
establishing fees for pharmacists and others providing
services under the medication therapy management program, the
resources and time used in implementing the program.
``(3) Treatment of accreditation.--Section 1852(e)(4)
(relating to treatment of accreditation) shall apply to
prescription drug plans under this part with respect to the
following requirements, in the same manner as they apply to
Medicare+Choice plans under part C with respect to the
requirements described in a clause of section 1852(e)(4)(B):
``(A) Paragraph (1) (including quality assurance),
including medication therapy management program under
paragraph (2).
``(B) Subsection (c)(1) (relating to access to covered
benefits).
``(C) Subsection (g) (relating to confidentiality and
accuracy of enrollee records).
``(e) Grievance Mechanism.--Each PDP sponsor shall provide
meaningful procedures for hearing and resolving grievances
between the organization (including any entity or individual
through which the sponsor provides covered benefits) and
enrollees with prescription drug plans of the sponsor under
this part in accordance with section 1852(f).
``(f) Coverage Determinations, Reconsiderations, and
Appeals.--
``(1) In general.--A PDP sponsor shall meet the
requirements of section 1852(g) with respect to covered
benefits under the prescription drug plan it offers under
this part in the same manner as such requirements apply to a
Medicare+Choice organization with respect to benefits it
offers under a Medicare+Choice plan under part C.
``(2) Appeals of formulary determinations.--Under the
appeals process under paragraph (1) an individual who is
enrolled in a prescription drug plan offered by a PDP sponsor
may appeal to obtain coverage for a medically necessary
covered outpatient drug that is not on the formulary of the
sponsor (established under subsection (c)) if the prescribing
physician determines that the therapeutically similar drug
that is on the formulary is not effective for the enrollee or
has significant adverse effects for the enrollee.
``(g) Confidentiality and Accuracy of Enrollee Records.--A
PDP sponsor shall meet the requirements of section 1852(h)
with respect to enrollees under this part in the same manner
as such requirements apply to a Medicare+Choice organization
with respect to enrollees under part C.

``SEC. 1860D. REQUIREMENTS FOR PRESCRIPTION DRUG PLAN (PDP)
SPONSORS.

``(a) General Requirements.--Each PDP sponsor of a
prescription drug plan shall meet the following requirements:
``(1) Licensure.--Subject to subsection (c), the sponsor is
organized and licensed under State law as a risk-bearing
entity eligible to offer health insurance or health benefits
coverage in each State in which it offers a prescription drug
plan.
``(2) Assumption of full financial risk.--
``(A) In general.--Subject to subparagraph (B) and section
1860E(d)(2), the entity assumes full financial risk on a
prospective basis for qualified prescription drug coverage
that it offers under a prescription drug plan and that is not
covered under reinsurance under section 1860H.
``(B) Reinsurance permitted.--The entity may obtain
insurance or make other arrangements for the cost of coverage
provided to any enrolled member under this part.
``(3) Solvency for unlicensed sponsors.--In the case of a
sponsor that is not described in paragraph (1), the sponsor
shall meet solvency standards established by the Medicare
Benefits Administrator under subsection (d).
``(b) Contract Requirements.--
``(1) In general.--The Medicare Benefits Administrator
shall not permit the election under section 1860A of a
prescription drug plan offered by a PDP sponsor under this
part, and the sponsor shall not be eligible for payments
under section 1860G or 1860H, unless the Administrator has
entered into a contract under this subsection with the
sponsor with respect to the offering of such plan. Such a
contract with a sponsor may cover more than 1 prescription
drug plan. Such contract shall provide that the sponsor
agrees to comply with the applicable requirements and
standards of this part and the terms and conditions of
payment as provided for in this part.
``(2) Incorporation of certain medicare+choice contract
requirements.--The following provisions of section 1857 shall
apply, subject to subsection (c)(5), to contracts under this
section in the same manner as they apply to contracts under
section 1857(a):
``(A) Minimum enrollment.--Paragraphs (1) and (3) of
section 1857(b).
``(B) Contract period and effectiveness.--Paragraphs (1)
through (3) and (5) of section 1857(c).
``(C) Protections against fraud and beneficiary
protections.--Section 1857(d).
``(D) Additional contract terms.--Section 1857(e); except
that in applying section 1857(e)(2) under this part--
``(i) such section shall be applied separately to costs
relating to this part (from costs under part C);
``(ii) in no case shall the amount of the fee established
under this subparagraph for a plan exceed 20 percent of the
maximum amount of the fee that may be established under
subparagraph (B) of such section; and
``(iii) no fees shall be applied under this subparagraph
with respect to Medicare+Choice plans.
``(E) Intermediate sanctions.--Section 1857(g).
``(F) Procedures for termination.--Section 1857(h).
``(3) Rules of application for intermediate sanctions.--In
applying paragraph (2)(E)--
``(A) the reference in section 1857(g)(1)(B) to section
1854 is deemed a reference to this part; and
``(B) the reference in section 1857(g)(1)(F) to section
1852(k)(2)(A)(ii) shall not be applied.
``(c) Waiver of Certain Requirements to Expand Choice.--
``(1) In general.--In the case of an entity that seeks to
offer a prescription drug plan in a State, the Medicare
Benefits Administrator shall waive the requirement of
subsection (a)(1) that the entity be licensed in that State
if the Administrator determines, based on the application and
other evidence presented to the Administrator, that any of
the grounds for approval of the application described in
paragraph (2) has been met.
``(2) Grounds for approval.--The grounds for approval under
this paragraph are the grounds for approval described in
subparagraph (B), (C), and (D) of section 1855(a)(2), and
also include the application by a State of any grounds other
than those required under Federal law.
``(3) Application of medicare+choice pso waiver
procedures.--With respect to an application for a waiver (or
a waiver granted) under this subsection, the provisions of
subparagraphs (E), (F), and (G) of section 1855(a)(2) shall
apply.
``(4) Licensure does not substitute for or constitute
certification.--The fact that an entity is licensed in
accordance with subsection (a)(1) does not deem the entity to
meet other requirements imposed under this part for a PDP
sponsor.
``(5) References to certain provisions.--For purposes of
this subsection, in applying provisions of section 1855(a)(2)
under this subsection to prescription drug plans and PDP
sponsors--
``(A) any reference to a waiver application under section
1855 shall be treated as a reference to a waiver application
under paragraph (1); and
``(B) any reference to solvency standards were treated as a
reference to solvency standards established under subsection
(c).
``(d) Solvency Standards for Non-Licensed Sponsors.--
``(1) Establishment.--The Medicare Benefits Administrator
shall establish, by not later than October 1, 2001, financial
solvency and capital adequacy standards that an entity that
does not meet the requirements of subsection (a)(1) must meet
to qualify as a PDP sponsor under this part.
``(2) Compliance with standards.--Each PDP sponsor that is
not licensed by a State

[[Page H5323]]

under subsection (a)(1) and for which a waiver application
has been approved under subsection (c) shall meet solvency
and capital adequacy standards established under paragraph
(1). The Medicare Benefits Administrator shall establish
certification procedures for such PDP sponsors with respect
to such solvency standards in the manner described in section
1855(c)(2).
``(e) Other Standards.--The Medicare Benefits Administrator
shall establish by regulation other standards (not described
in subsection (d)) for PDP sponsors and plans consistent
with, and to carry out, this part. The Administrator shall
publish such regulations by October 1, 2001. In order to
carry out this requirement in a timely manner, the
Administrator may promulgate regulations that take effect on
an interim basis, after notice and pending opportunity for
public comment.
``(f) Relation to State Laws.--
``(1) In general.--The standards established under this
subsection shall supersede any State law or regulation
(including standards described in paragraph (2)) with respect
to prescription drug plans which are offered by PDP sponsors
under this part to the extent such law or regulation is
inconsistent with such standards, in the same manner as such
laws and regulations are superseded under section 1856(b)(3).
``(2) Standards specifically superseded.--State standards
relating to the following are superseded under this
subsection:
``(A) Benefit requirements.
``(B) Requirements relating to inclusion or treatment of
providers.
``(C) Coverage determinations (including related appeals
and grievance processes).
``(3) Prohibition of state imposition of premium taxes.--No
State may impose a premium tax or similar tax with respect to
premiums paid to PDP sponsors for prescription drug plans
under this part, or with respect to any payments made to such
a sponsor by the Medicare Benefits Administrator under this
part.

``SEC. 1860E. PROCESS FOR BENEFICIARIES TO SELECT QUALIFIED
PRESCRIPTION DRUG COVERAGE.

``(a) In General.--The Medicare Benefits Administrator,
through the Office of Beneficiary Assistance, shall
establish, based upon and consistent with the procedures used
under part C (including section 1851), a process for the
selection of the prescription drug plan or Medicare+Choice
plan which offer qualified prescription drug coverage through
which eligible individuals elect qualified prescription drug
coverage under this part.
``(b) Elements.--Such process shall include the following:
``(1) Annual, coordinated election periods, in which such
individuals can change the qualifying plans through which
they obtain coverage, in accordance with section 1860A(b)(2).
``(2) Active dissemination of information to promote an
informed selection among qualifying plans based upon price,
quality, and other features, in the manner described in (and
in coordination with) section 1851(d), including the
provision of annual comparative information, maintenance of a
toll-free hotline, and the use of non-federal entities.
``(3) Coordination of elections through filing with a
Medicare+Choice organization or a PDP sponsor, in the manner
described in (and in coordination with) section 1851(c)(2).
``(c) Medicare+Choice Enrollee In Plan Offering
Prescription Drug Coverage May Only Obtain Benefits Through
the Plan.--An individual who is enrolled under a
Medicare+Choice plan that offers qualified prescription drug
coverage may only elect to receive qualified prescription
drug coverage under this part through such plan.
``(d) Assuring Access to a Choice of Qualified Prescription
Drug Coverage.--
``(1) In general.--The Medicare Benefits Administrator
shall assure that each individual who is enrolled under part
B and who is residing in an area has available a choice of
enrollment in at least 2 qualifying plans (as defined in
paragraph (5)) in the area in which the individual resides,
at least 1 of which is a prescription drug plan.
``(2) Guaranteeing access to coverage.--In order to assure
access under paragraph (1) and consistent with paragraph (3),
the Medicare Benefits Administrator may provide financial
incentives (including partial underwriting of risk) for a PDP
sponsor to expand the service area under an existing
prescription drug plan to adjoining or additional areas or to
establish such a plan (including offering such a plan on a
regional or nationwide basis), but only so long as (and to
the extent) necessary to assure the access guaranteed under
paragraph (1).
``(3) Limitation on authority.--In exercising authority
under this subsection, the Medicare Benefits Administrator--
``(A) shall not provide for the full underwriting of
financial risk for any PDP sponsor;
``(B) shall not provide for any underwriting of financial
risk for a public PDP sponsor with respect to the offering of
a nationwide prescription drug plan; and
``(C) shall seek to maximize the assumption of financial
risk by PDP sponsors or Medicare+Choice organizations.
``(4) Reports.--The Medicare Benefits Administrator shall,
in each annual report to Congress under section 1807(f),
include information on the exercise of authority under this
subsection. The Administrator also shall include such
recommendations as may be appropriate to minimize the
exercise of such authority, including minimizing the
assumption of financial risk.
``(5) Qualifying plan defined.--For purposes of this
subsection, the term `qualifying plan' means a prescription
drug plan or a a Medicare+Choice plan that includes qualified
prescription drug coverage.

``SEC. 1860F. PREMIUMS.

``(a) Submission of Premiums and Related Information.--
``(1) In general.--Each PDP sponsor shall submit to the
Medicare Benefits Administrator information of the type
described in paragraph (2) in the same manner as information
is submitted by a Medicare+Choice organization under section
1854(a)(1).
``(2) Type of information.--The information described in
this paragraph is the following:
``(A) Information on the qualified prescription drug
coverage to be provided.
``(B) Information on the actuarial value of the coverage.
``(C) Information on the monthly premium to be charged for
the coverage, including an actuarial certification of--
``(i) the actuarial basis for such premium;
``(ii) the portion of such premium attributable to benefits
in excess of standard coverage; and
``(iii) the reduction in such premium resulting from the
reinsurance subsidy payments provided under section 1860H.
``(D) Such other information as the Medicare Benefits
Administrator may require to carry out this part.
``(3) Review.--The Medicare Benefits Administrator shall
review the information filed under paragraph (2) and shall
approve or disapprove such rates, amounts, and values so
submitted. In exercising such authority, the Administrator
shall take into account the reinsurance subsidy payments
under section 1860H and the adjusted community rate (as
defined in section 1854(f)(3)) for the benefits covered and
shall have the same authority to negotiate the terms and
conditions of such premiums and other terms and conditions of
plans as the Director of the Office of Personnel Management
has with respect to health benefits plans under chapter 89 of
title 5, United States Code.
``(b) Uniform Premium.--The premium for a prescription drug
plan charged under this section may not vary among
individuals enrolled in the plan in the same service area,
except as is permitted under section 1860A(c)(2)(B) (relating
to late enrollment penalties).
``(c) Terms and Conditions for Imposing Premiums.--The
provisions of section 1854(d) shall apply under this part in
the same manner as they apply under part C, and, for this
purpose, the reference in such section to section
1851(g)(3)(B)(i) is deemed a reference to section
1860A(d)(3)(B) (relating to failure to pay premiums required
under this part).
``(d) Acceptance of Reference Premium as Full Premium if No
Standard (or Equivalent) Coverage in an Area.--
``(1) In general.--If there is no standard prescription
drug coverage (as defined in paragraph (2)) offered in an
area, in the case of an individual who is eligible for a
premium subsidy under section 1860G and resides in the area,
the PDP sponsor of any prescription drug plan offered in the
area (and any Medicare+Choice organization that offers
qualified prescription drug coverage in the area) shall
accept the reference premium under section 1860G(b)(2) as
payment in full for the premium charge for qualified
prescription drug coverage.
``(2) Standard prescription drug coverage defined.--For
purposes of this subsection, the term `standard prescription
drug coverage' means qualified prescription drug coverage
that is standard coverage or that has an actuarial value
equivalent to the actuarial value for standard coverage.

``SEC. 1860G. PREMIUM AND COST-SHARING SUBSIDIES FOR LOW-
INCOME INDIVIDUALS.

[[Page H5324]]

``(i) is eligible to elect, and has elected, to obtain
qualified prescription drug coverage under this part;
``(ii) has income below 150 percent of the Federal poverty
line; and
``(iii) meets the resources requirement described in
section 1905(p)(1)(C).
``(B) Determinations.--The determination of whether an
individual residing in a State is a subsidy eligible
individual and the amount of such individual's income shall
be determined under the State medicaid plan for the State
under section 1935(a). In the case of a State that does not
operate such a medicaid plan (either under title XIX or under
a statewide waiver granted under section 1115), such
determination shall be made under arrangements made by the
Medicare Benefits Administrator.
``(C) Income determinations.--For purposes of applying this
section--
``(i) income shall be determined in the manner described in
section 1905(p)(1)(B); and
``(ii) the term `Federal poverty line' means the official
poverty line (as defined by the Office of Management and
Budget, and revised annually in accordance with section
673(2) of the Omnibus Budget Reconciliation Act of 1981)
applicable to a family of the size involved.
``(D) Treatment of territorial residents.--In the case of
an individual who is not a resident of the 50 States or the
District of Columbia, the individual is not eligible to be a
subsidy eligible individual but may be eligible for financial
assistance with prescription drug expenses under section
1935(e).
``(b) Premium Subsidy Amount.--
``(1) In general.--The premium subsidy amount described in
this subsection for an individual residing in an area is the
reference premium (as defined in paragraph (2)) for qualified
prescription drug coverage offered by the prescription drug
plan or the Medicare+Choice plan in which the individual is
enrolled.
``(2) Reference premium defined.--For purposes of this
subsection, the term `reference premium' means, with respect
to qualified prescription drug coverage offered under--
``(A) a prescription drug plan that--
``(i) provides standard coverage (or alternative
prescription drug coverage the actuarial value is equivalent
to that of standard coverage), the premium imposed for
enrollment under the plan under this part (determined without
regard to any subsidy under this section or any late
enrollment penalty under section 1860A(c)(2)(B)); or
``(ii) provides alternative prescription drug coverage the
actuarial value of which is greater than that of standard
coverage, the premium described in clause (i) multiplied by
the ratio of (I) the actuarial value of standard coverage, to
(II) the actuarial value of the alternative coverage; or
``(B) a Medicare+Choice plan, the standard premium computed
under section 1851(j)(4)(A)(iii), determined without regard
to any reduction effected under section 1851(j)(4)(B).
``(c) Rules in Applying Cost-Sharing Subsidies.--
``(1) In general.--In applying subsection (a)(1)(B)--
``(A) the maximum amount of subsidy that may be provided
with respect to an enrollee for a year may not exceed 95
percent of the maximum cost-sharing described in such
subsection that may be incurred for standard coverage;
``(B) the Medicare Benefits Administrator shall determine
what is `nominal' taking into account the rules applied under
section 1916(a)(3); and
``(C) nothing in this part shall be construed as preventing
a plan or provider from waiving or reducing the amount of
cost-sharing otherwise applicable.
``(2) Limitation on charges.--In the case of an individual
receiving cost-sharing subsidies under subsection (a)(1)(B),
the PDP sponsor may not charge more than a nominal amount in
cases in which the cost-sharing subsidy is provided under
such subsection.
``(d) Administration of Subsidy Program.--The Medicare
Benefits Administrator shall provide a process whereby, in
the case of an individual who is determined to be a subsidy
eligible individual and who is enrolled in prescription drug
plan or is enrolled in a Medicare+Choice plan under which
qualified prescription drug coverage is provided--
``(1) the Administrator provides for a notification of the
PDP sponsor or Medicare+Choice organization involved that the
individual is eligible for a subsidy and the amount of the
subsidy under subsection (a);
``(2) the sponsor or organization involved reduces the
premiums or cost-sharing otherwise imposed by the amount of
the applicable subsidy and submits to the Administrator
information on the amount of such reduction; and
``(3) the Administrator periodically and on a timely basis
reimburses the sponsor or organization for the amount of such
reductions.

The reimbursement under paragraph (3) with respect to cost-
sharing subsidies may be computed on a capitated basis,
taking into account the actuarial value of the subsidies and
with appropriate adjustments to reflect differences in the
risks actually involved.
``(e) Relation to Medicaid Program.--
``(1) In general.--For provisions providing for eligibility
determinations, and additional financing, under the medicaid
program, see section 1935.
``(2) Medicaid providing wrap around benefits.--The
coverage provided under this part is primary payor to
benefits for prescribed drugs provided under the medicaid
program under title XIX.

``SEC. 1860H. SUBSIDIES FOR ALL MEDICARE BENEFICIARIES
THROUGH REINSURANCE FOR QUALIFIED PRESCRIPTION
DRUG COVERAGE.

``(a) Reinsurance Subsidy Payment.--In order to reduce
premium levels applicable to qualified prescription drug
coverage for all medicare beneficiaries, to reduce adverse
selection among prescription drug plans and Medicare+Choice
plans that provide qualified prescription drug coverage, and
to promote the participation of PDP sponsors under this part,
the Medicare Benefits Administrator shall provide in
accordance with this section for payment to a qualifying
entity (as defined in subsection (b)) of the reinsurance
payment amount (as defined in subsection (c)) for excess
costs incurred in providing qualified prescription drug
coverage--
``(1) for individuals enrolled with a prescription drug
plan under this part;
``(2) for individuals enrolled with a Medicare+Choice plan
that provides qualified prescription drug coverage under part
C; and
``(3) for medicare primary individuals (described in
subsection (f)(3)(D)) who are enrolled in a qualified retiree
prescription drug plan.

[[Page H5325]]

year after 2004 shall be the amounts (under this paragraph)
applied under paragraph (1) for the preceding year increased
by the annual percentage increase described in section
1860B(b)(5) for the year involved.
``(D) Rounding.--Any amount, determined under the preceding
provisions of this paragraph for a year, which is not a
multiple of $5 shall be rounded to the nearest multiple of
$5.
``(d) Adjustment of Payments.--
``(1) In general.--The Medicare Benefits Administrator
shall estimate--
``(A) the total payments to be made (without regard to this
subsection) during a year under this section; and
``(B) the total payments to be made by qualifying entities
for standard coverage under plans described in subsection (b)
during the year.
``(2) Adjustment of payments.--The Administrator shall
proportionally adjust the payments made under this section
for a coverage year in such manner so that the total of the
payments made for the year under this section is equal to 35
percent of the total payments described in paragraph (1)(B)
during the year.
``(e) Payment Methods.--
``(1) In general.--Payments under this section shall be
based on such a method as the Medicare Benefits Administrator
determines. The Administrator may establish a payment method
by which interim payments of amounts under this section are
made during a year based on the Administrator's best estimate
of amounts that will be payable after obtaining all of the
information.
``(2) Source of payments.--Payments under this section
shall be made from the Medicare Prescription Drug Account.
``(f) Qualified Retiree Prescription Drug Plan Defined.--
``(1) In general.--For purposes of this section, the term
`qualified retiree prescription drug plan' means employment-
based retiree health coverage (as defined in paragraph
(3)(A)) if, with respect to an individual enrolled (or
eligible to be enrolled) under this part who is covered under
the plan, the following requirements are met:
``(A) Assurance.--The sponsor of the plan shall annually
attest, and provide such assurances as the Medicare Benefits
Administrator may require, that the coverage meets the
requirements for qualified prescription drug coverage.
``(B) Audits.--The sponsor (and the plan) shall maintain,
and afford the Medicare Benefits Administrator access to,
such records as the Administrator may require for purposes of
audits and other oversight activities necessary to ensure the
adequacy of prescription drug coverage, the accuracy of
payments made, and such other matters as may be appropriate.
``(C) Provision of certification of prescription drug
coverage.--The sponsor of the plan shall provide for issuance
of certifications of the type described in section
1860A(c)(2)(D).
``(D) Other requirements.--The sponsor of the plan shall
comply with such other requirements as the Medicare Benefits
Administrator finds necessary to administer the program under
this section.
``(2) Limitation on benefit eligibility.--No payment shall
be provided under this section with respect to an individual
who is enrolled under a qualified retiree prescription drug
plan unless the individual is a medicare primary individual
who--
``(A) is covered under the plan; and
``(B) is eligible to obtain qualified prescription drug
coverage under section 1860A but did not elect such coverage
under this part (either through a prescription drug plan or
through a Medicare+Choice plan).
``(3) Definitions.--As used in this section:
``(A) Employment-based retiree health coverage.--The term
`employment-based retiree health coverage' means health
insurance or other coverage of health care costs for medicare
primary individuals (or for such individuals and their
spouses and dependents) based on their status as former
employees or labor union members.
``(B) Employer.--The term `employer' has the meaning given
such term by section 3(5) of the Employee Retirement Income
Security Act of 1974 (except that such term shall include
only employers of two or more employees).
``(C) Sponsor.--The term `sponsor' means a plan sponsor, as
defined in section 3(16)(B) of the Employee Retirement Income
Security Act of 1974.
``(D) Medicare primary individual.--The term `medicare
primary individual' means, with respect to a plan, an
individual who is covered under the plan and with respect to
whom the plan is not a primary plan (as defined in section
1862(b)(2)(A)).
``(g) General Definitions.--For purposes of this section:
``(1) Qualifying covered individual.--The term `qualifying
covered individual' means an individual who--
``(A) is enrolled with a prescription drug plan under this
part;
``(B) is enrolled with a Medicare+Choice plan that provides
qualified prescription drug coverage under part C; or
``(C) is covered as a medicare primary individual under a
qualified retiree prescription drug plan.
``(2) Coverage year.--The term `coverage year' means a
calendar year in which covered outpatient drugs are dispensed
if a claim for payment is made under the plan for such drugs,
regardless of when the claim is paid.

``SEC. 1860I. MEDICARE PRESCRIPTION DRUG ACCOUNT IN FEDERAL
SUPPLEMENTARY MEDICAL INSURANCE TRUST FUND.

``(a) In General.--There is created within the Federal
Supplementary Medical Insurance Trust Fund established by
section 1841 an account to be known as the `Medicare
Prescription Drug Account' (in this section referred to as
the `Account'). The Account shall consist of such gifts and
bequests as may be made as provided in section 201(i)(1), and
such amounts as may be deposited in, or appropriated to, such
fund as provided in this part. Funds provided under this part
to the Account shall be kept separate from all other funds
within the Federal Supplementary Medical Insurance Trust
Fund.
``(b) Payments From Account.--
``(1) In general.--The Managing Trustee shall pay from time
to time from the Account such amounts as the Medicare
Benefits Administrator certifies are necessary to make--
``(A) payments under section 1860G (relating to low-income
subsidy payments);
``(B) payments under section 1860H (relating to reinsurance
subsidy payments); and
``(C) payments with respect to administrative expenses
under this part in accordance with section 201(g).
``(2) Transfers to medicaid account for increased
administrative costs.--The Managing Trustee shall transfer
from time to time from the Account to the Grants to States
for Medicaid account amounts the Secretary certifies are
attributable to increases in payment resulting from the
application of a higher Federal matching percentage under
section 1935(b).
``(c) Deposits Into Account.--
``(1) Medicaid transfer.--There is hereby transferred to
the Account, from amounts appropriated for Grants to States
for Medicaid, amounts equivalent to the aggregate amount of
the reductions in payments under section 1903(a)(1)
attributable to the application of section 1935(c).
``(2) Appropriations to cover government contributions.--
There are authorized to be appropriated from time to time,
out of any moneys in the Treasury not otherwise appropriated,
to the Account, an amount equivalent to the amount of
payments made from the Account under subsection (b), reduced
by the amount transferred to the Account under paragraph (1).

``SEC. 1860J. DEFINITIONS; TREATMENT OF REFERENCES TO
PROVISIONS IN PART C.

``(a) Definitions.--For purposes of this part:
``(1) Covered outpatient drugs.--The term `covered
outpatient drugs' is defined in section 1860B(f).
``(2) Initial coverage limit.--The term `initial coverage
limit' means the such limit as established under section
1860B(b)(3), or, in the case of coverage that is not standard
coverage, the comparable limit (if any) established under the
coverage.
``(3) Medicare prescription drug account.--The term
`Medicare Prescription Drug Account' means the Account in the
Federal Supplementary Medical Insurance Trust Fund created
under section 1860I(a).
``(4) PDP sponsor.--The term `PDP sponsor' means an entity
that is certified under this part as meeting the requirements
and standards of this part for such a sponsor.
``(5) Prescription drug plan.--The term `prescription drug
plan' means health benefits coverage that--
``(A) is offered under a policy, contract, or plan by a PDP
sponsor pursuant to, and in accordance with, a contract
between the Medicare Benefits Administrator and the sponsor
under section 1860D(b);
``(B) provides qualified prescription drug coverage; and
``(C) meets the applicable requirements of the section
1860C for a prescription drug plan.
``(6) Qualified prescription drug coverage.--The term
`qualified prescription drug coverage' is defined in section
1860B(a).
``(7) Standard coverage.--The term `standard coverage' is
defined in section 1860B(b).
``(b) Application of Medicare+Choice Provisions Under This
Part.--For purposes of applying provisions of part C under
this part with respect to a prescription drug plan and a PDP
sponsor, unless otherwise provided in this part such
provisions shall be applied as if--
``(1) any reference to a Medicare+Choice plan included a
reference to a prescription drug plan;
``(2) any reference to a provider-sponsored organization
included a reference to a PDP sponsor;
``(3) any reference to a contract under section 1857
included a reference to a contract under section 1860D(b);
and
``(4) any reference to part C included a reference to this
part.''.
(c) Conforming Amendments to Federal Supplementary Medical
Insurance Trust Fund.--Section 1841 of the Social Security
Act (42 U.S.C. 1395t) is amended--
(1) in the last sentence of subsection (a)--
(A) by striking ``and'' before ``such amounts'', and
(B) by inserting before the period the following: ``and
such amounts as may be deposited in, or appropriated to, the
Medicare Prescription Drug Account established by section
1860I''; and
(2) in subsection (g), by inserting after ``by this part,''
the following: ``the payments provided for under part D (in
which case the

[[Page H5326]]

payments shall come from the Medicare Prescription Drug
Account in the Trust Fund),''.
(d) Additional Conforming Changes.--
(1) Conforming references to previous part d.--Any
reference in law (in effect before the date of the enactment
of this Act) to part D of title XVIII of the Social Security
Act is deemed a reference to part E of such title (as in
effect after such date).
(2) Secretarial submission of legislative proposal.--Not
later than 6 months after the date of the enactment of this
Act, the Secretary of Health and Human Services shall submit
to the appropriate committees of Congress a legislative
proposal providing for such technical and conforming
amendments in the law as are required by the provisions of
this subtitle.

SEC. 102. OFFERING OF QUALIFIED PRESCRIPTION DRUG COVERAGE
UNDER THE MEDICARE+CHOICE PROGRAM.

(a) In General.--Section 1851 of the Social Security Act
(42 U.S.C. 1395w-21) is amended by adding at the end the
following new subsection:
``(j) Availability of Prescription Drug Benefits.--
``(1) In general.--A Medicare+Choice organization may not
offer prescription drug coverage (other than that required
under parts A and B) to an enrollee under a Medicare+Choice
plan unless such drug coverage is at least qualified
prescription drug coverage and unless the requirements of
this subsection with respect to such coverage are met.
``(2) Compliance with additional beneficiary protections.--
With respect to the offering of qualified prescription drug
coverage by a Medicare+Choice organization under a
Medicare+Choice plan, the organization and plan shall meet
the requirements of section 1860C, including requirements
relating to information dissemination and grievance and
appeals, in the same manner as they apply to a PDP sponsor
and a prescription drug plan under part D. The Medicare
Benefits Administrator shall waive such requirements to the
extent the Administrator determines that such requirements
duplicate requirements otherwise applicable to the
organization or plan under this part.
``(3) Treatment of coverage.--Except as provided in this
subsection, qualified prescription drug coverage offered
under this subsection shall be treated under this part in the
same manner as supplemental health care benefits described in
section 1852(a)(3)(A).
``(4) Availability of premium and cost-sharing subsidies
for low-income enrollees and reinsurance subsidy payments for
organizations.--For provisions--
``(A) providing premium and cost-sharing subsidies to low-
income individuals receiving qualified prescription drug
coverage through a Medicare+Choice plan, see section 1860G;
and
``(B) providing a Medicare+Choice organization with
reinsurance subsidy payments for providing qualified
prescription drug coverage under this part, see section
1860H.
``(5) Specification of separate and standard premium.--
``(A) In general.--For purposes of applying section 1854
and section 1860G(b)(2)(B) with respect to qualified
prescription drug coverage offered under this subsection
under a plan, the Medicare+Choice organization shall compute
and publish the following:
``(i) Separate prescription drug premium.--A premium for
prescription drug benefits that constitute qualified
prescription drug coverage that is separate from other
coverage under the plan.
``(ii) Portion of coverage attributable to standard
benefits.--The ratio of the actuarial value of standard
coverage to the actuarial value of the qualified prescription
drug coverage offered under the plan.
``(iii) Portion of premium attributable to standard
benefits.--A standard premium equal to the product of the
premium described in clause (i) and the ratio under clause
(ii).

The premium under clause (i) shall be compute without regard
to any reduction in the premium permitted under subparagraph
(B).
``(B) Reduction of premiums allowed.--Nothing in this
subsection shall be construed as preventing a Medicare+Choice
organization from reducing the amount of a premium charged
for prescription drug coverage because of the application of
section 1854(f)(1)(A) to other coverage.
``(C) Acceptance of reference premium as full premium if no
standard (or equivalent) coverage in an area.--For
requirement to accept reference premium as full premium if
there is no standard (or equivalent) coverage in the area of
a Medicare+Choice plan, see section 1860F(d).
``(6) Transition in initial enrollment period.--
Notwithstanding any other provision of this part, the annual,
coordinated election period under subsection (e)(3)(B) for
2003 shall be the 6-month period beginning with November
2002.
``(7) Qualified prescription drug coverage; standard
coverage.--For purposes of this part, the terms `qualified
prescription drug coverage' and `standard coverage' have the
meanings given such terms in section 1860B.''.
(b) Conforming Amendments.--Section 1851 of such Act (42
U.S.C. 1395w-21) is amended--
(1) in subsection (a)(1)--
(A) by inserting ``(other than qualified prescription drug
benefits)'' after ``benefits'';
(B) by striking the period at the end of subparagraph (B)
and inserting a comma; and
(C) by adding after and below subparagraph (B) the
following:

``and may elect qualified prescription drug coverage in
accordance with section 1860A.''; and
(2) in subsection (g)(1), by inserting ``and section
1860A(c)(2)(B)'' after ``in this subsection''.
(c) Effective Date.--The amendments made by this section
apply to coverage provided on or after January 1, 2003.

SEC. 103. MEDICAID AMENDMENTS.

(a) Determinations of Eligibility for Low-Income
Subsidies.--
(1) Requirement.--Section 1902 of the Social Security Act
(42 U.S.C. 1396a) is amended--
(A) in subsection (a)--
(i) by striking ``and'' at the end of paragraph (64);
(ii) by striking the period at the end of paragraph (65)
and inserting ``; and''; and
(iii) by inserting after paragraph (65) the following new
paragraph:
``(66) provide for making eligibility determinations under
section 1935(a).''.
(2) New section.--Title XIX of such Act is further
amended--
(A) by redesignating section 1935 as section 1936; and
(B) by inserting after section 1934 the following new
section:

``special provisions relating to medicare prescription drug benefit

[[Page H5327]]

such a plan operating under a waiver under section 1115).
``(B) State matching rate.--A proportion computed by
subtracting from 100 percent the Federal medical assistance
percentage (as defined in section 1905(b)) applicable to the
State and the quarter.
``(C) Phase-out proportion.--The phase-out proportion (as
defined in paragraph (2)) for the quarter.
``(2) Phase-out proportion.--For purposes of paragraph
(1)(C), the `phase-out proportion' for a calendar quarter
in--
``(A) 2003 is 80 percent;
``(B) 2004 is 60 percent;
``(C) 2005 is 40 percent;
``(D) 2006 is 20 percent; or
``(E) a year after 2006 is 0 percent.''.
(c) Medicaid Providing Wrap-Around Benefits.--Section 1935
of such Act, as so inserted and amended, is further amended
by adding at the end the following new subsection:
``(d) Additional Provisions.--
``(1) Medicaid as secondary payor.--In the case of an
individual dually entitled to qualified prescription drug
coverage under a prescription drug plan under part D of title
XVIII (or under a Medicare+Choice plan under part C of such
title) and medical assistance for prescribed drugs under this
title, medical assistance shall continue to be provided under
this title for prescribed drugs to the extent payment is not
made under the prescription drug plan or the Medicare+Choice
plan selected by the individual.
``(2) Condition.--A State may require, as a condition for
the receipt of medical assistance under this title with
respect to prescription drug benefits for an individual
eligible to obtain qualified prescription drug coverage
described in paragraph (1), that the individual elect
qualified prescription drug coverage under section 1860A.''.
(d) Treatment of Territories.--
(1) In general.--Section 1935 of such Act, as so inserted
and amended, is further amended--
(A) in subsection (a)(1), by inserting ``subject to
subsection (e),'' after ``section 1903 '';
(B) in subsection (c)(1), by inserting ``subject to
subsection (e),'' after ``1903(a)''; and
(C) by adding at the end the following new subsection:
``(e) Treatment of Territories.--
``(1) In general.--In the case of a State, other than the
50 States and the District of Columbia--
``(A) the previous provisions of this section shall not
apply to residents of such State; and
``(B) if the State establishes a plan described in
paragraph (2) (for providing medical assistance with respect
to the provision of prescription drugs to medicare
beneficiaries), the amount otherwise determined under section
1108(f) (as increased under section 1108(g)) for the State
shall be increased by the amount specified in paragraph (3).
``(2) Plan.--The plan described in this paragraph is a plan
that--
``(A) provides medical assistance with respect to the
provision of covered outpatient drugs (as defined in section
1860B(f)) to low-income medicare beneficiaries; and
``(B) assures that additional amounts received by the State
that are attributable to the operation of this subsection are
used only for such assistance.
``(3) Increased amount.--
``(A) In general.--The amount specified in this paragraph
for a State for a year is equal to the product of--
``(i) the aggregate amount specified in subparagraph (B);
and
``(ii) the amount specified in section 1108(g)(1) for that
State, divided by the sum of the amounts specified in such
section for all such States.
``(B) Aggregate amount.--The aggregate amount specified in
this subparagraph for--
``(i) 2003, is equal to $20,000,000; or
``(ii) a subsequent year, is equal to the aggregate amount
specified in this subparagraph for the previous year
increased by annual percentage increase specified in section
1860(b)(5) for the year involved.
``(4) Report.--The Secretary shall submit to Congress a
report on the application of this subsection and may include
in the report such recommendations as the Secretary deems
appropriate.''.
(2) Conforming amendment.--Section 1108(f) of such Act is
amended by inserting ``and section 1935(e)(1)(B)'' after
``Subject to subsection (g)''.

SEC. 104. MEDIGAP TRANSITION PROVISIONS.

(a) In General.--Notwithstanding any other provision of
law, no new medicare supplemental policy that provides
coverage of expenses for prescription drugs may be issued
under section 1882 of the Social Security Act on or after
January 1, 2003, to an individual unless it replaces a
medicare supplemental policy that was issued to that
individual and that provided some coverage of expenses for
prescription drugs.
(b) Issuance of Substitute Policies if Obtain Prescription
Drug Coverage Through Medicare.--
(1) In general.--The issuer of a medicare supplemental
policy--
(A) may not deny or condition the issuance or effectiveness
of a medicare supplemental policy that has a benefit package
classified as ``A'', ``B'', ``C'', ``D'', ``E'', ``F'', or
``G'' (under the standards established under subsection
(p)(2) of section 1882 of the Social Security Act, 42 U.S.C.
1395ss) and that is offered and is available for issuance to
new enrollees by such issuer;
(B) may not discriminate in the pricing of such policy,
because of health status, claims experience, receipt of
health care, or medical condition; and
(C) may not impose an exclusion of benefits based on a pre-
existing condition under such policy,

in the case of an individual described in paragraph (2) who
seeks to enroll under the policy not later than 63 days after
the date of the termination of enrollment described in such
paragraph and who submits evidence of the date of termination
or disenrollment along with the application for such medicare
supplemental policy.
(2) Individual covered.--An individual described in this
paragraph is an individual who--
(A) enrolls in a prescription drug plan under part D of
title XVIII of the Social Security Act; and
(B) at the time of such enrollment was enrolled and
terminates enrollment in a medicare supplemental policy which
has a benefit package classified as ``H'', ``I'', or ``J''
under the standards referred to in paragraph (1)(A) or
terminates enrollment in a policy to which such standards do
not apply but which provides benefits for prescription drugs.
(3) Enforcement.--The provisions of paragraph (1) shall be
enforced as though they were included in section 1882(s) of
the Social Security Act (42 U.S.C. 1395ss(s)).
(4) Definitions.--For purposes of this subsection, the term
``medicare supplemental policy'' has the meaning given such
term in section 1882(g) of the Social Security Act (42 U.S.C.
1395ss(g)).

TITLE II--MODERNIZATION OF ADMINISTRATION OF MEDICARE

Subtitle A--Medicare Benefits Administration

SEC. 201. ESTABLISHMENT OF ADMINISTRATION.

(a) In General.--Title XVIII of the Social Security Act (42
U.S.C. 1395 et seq.) is amended by inserting after section
1806 the following new section:

``medicare benefits administration

``Sec. 1807. (a) Establishment.--There is established
within the Department of Health and Human Services an agency
to be known as the Medicare Benefits Administration.
``(b) Administrator and Deputy Administrator.--
``(1) Administrator.--
``(A) In general.--The Medicare Benefits Administration
shall be headed by an Administrator (in this section referred
to as the `Administrator') who shall be appointed by the
President, by and with the advice and consent of the Senate.
The Administrator shall be in direct line of authority to the
Secretary.
``(B) Compensation.--The Administrator shall be paid at the
rate of basic pay payable for level III of the Executive
Schedule under section 5314 of title 5, United States Code.
``(C) Term of office.--The Administrator shall be appointed
for a term of 5 years. In any case in which a successor does
not take office at the end of an Administrator's term of
office, that Administrator may continue in office until the
entry upon office of such a successor. An Administrator
appointed to a term of office after the commencement of such
term may serve under such appointment only for the remainder
of such term.
``(D) General Authority.--The Administrator shall be
responsible for the exercise of all powers and the discharge
of all duties of the Administration, and shall have authority
and control over all personnel and activities thereof.
``(E) Rulemaking authority.--The Administrator may
prescribe such rules and regulations as the Administrator
determines necessary or appropriate to carry out the
functions of the Administration. The regulations prescribed
by the Administrator shall be subject to the rulemaking
procedures established under section 553 of title 5, United
States Code.
``(F) Authority to establish organizational units.--The
Administrator may establish, alter, consolidate, or
discontinue such organizational units or components within
the Administration as the Administrator considers necessary
or appropriate, except that this subparagraph shall not apply
with respect to any unit, component, or provision provided
for by this section.
``(G) Authority to delegate.--The Administrator may assign
duties, and delegate, or authorize successive redelegations
of, authority to act and to render decisions, to such
officers and employees of the Administration as the
Administrator may find necessary. Within the limitations of
such delegations, redelegations, or assignments, all official
acts and decisions of such officers and employees shall have
the same force and effect as though performed or rendered by
the Administrator.
``(2) Deputy administrator.--
``(A) In general.--There shall be a Deputy Administrator of
the Medicare Benefits Administration who shall be appointed
by the President, by and with the advice and consent of the
Senate.
``(B) Compensation.--The Deputy Administrator shall be paid
at the rate of basic pay payable for level IV of the
Executive Schedule under section 5315 of title 5, United
States Code.
``(C) Term of office.--The Deputy Administrator shall be
appointed for a term of 5

[[Page H5328]]

years. In any case in which a successor does not take office
at the end of a Deputy Administrator's term of office, such
Deputy Administrator may continue in office until the entry
upon office of such a successor. A Deputy Administrator
appointed to a term of office after the commencement of such
term may serve under such appointment only for the remainder
of such term.
``(D) Duties.--The Deputy Administrator shall perform such
duties and exercise such powers as the Administrator shall
from time to time assign or delegate. The Deputy
Administrator shall be Acting Administrator of the
Administration during the absence or disability of the
Administrator and, unless the President designates another
officer of the Government as Acting Administrator, in the
event of a vacancy in the office of the Administrator.
``(3) Secretarial coordination of program administration.--
The Secretary shall ensure appropriate coordination between
the Administrator and the Administrator of the Health Care
Financing Administration in carrying out the programs under
this title.
``(c) Duties; Administrative Provisions.--
``(1) Duties.--
``(A) General duties.--The Administrator shall carry out
parts C and D, including--
``(i) negotiating, entering into, and enforcing, contracts
with plans for the offering of Medicare+Choice plans under
part C, including the offering of qualified prescription drug
coverage under such plans; and
``(ii) negotiating, entering into, and enforcing, contracts
with PDP sponsors for the offering of prescription drug plans
under part D.
``(B) Other duties.--The Administrator shall carry out any
duty provided for under part C or part D, including
demonstration projects carried out in part or in whole under
such parts, the programs of all-inclusive care for the
elderly (PACE program) under section 1894, the social health
maintenance organization (SHMO) demonstration projects
(referred to in section 4104(c) of the Balanced Budget Act of
1997), and through a Medicare+Choice project that
demonstrates the application of capitation payment rates for
frail elderly medicare beneficiaries through the use of a
interdisciplinary team and through the provision of primary
care services to such beneficiaries by means of such a team
at the nursing facility involved).
``(C) Annual reports.--Not later March 31 of each year, the
Administrator shall submit to Congress and the President a
report on the administration of parts C and D during the
previous fiscal year.
``(2) Staff.--
``(A) In general.--The Administrator, with the approval of
the Secretary, may employ, without regard to chapter 31 of
title 5, United States Code, such officers and employees as
are necessary to administer the activities to be carried out
through the Medicare Benefits Administration.
``(B) Flexibility with respect to civil service laws.--
``(i) In general.--The staff of the Medicare Benefits
Administration shall be appointed without regard to the
provisions of title 5, United States Code, governing
appointments in the competitive service, and, subject to
clause (ii), shall be paid without regard to the provisions
of chapter 51 and chapter 53 of such title (relating to
classification and schedule pay rates).
``(ii) Maximum rate.--In no case may the rate of
compensation determined under clause (i) exceed the rate of
basic pay payable for level IV of the Executive Schedule
under section 5315 of title 5, United States Code.
``(3) Redelegation of certain functions of the health care
financing administration.--
``(A) In general.--The Secretary, the Administrator, and
the Administrator of the Health Care Financing Administration
shall establish an appropriate transition of responsibility
in order to redelegate the administration of part C from the
Secretary and the Administrator of the Health Care Financing
Administration to the Administrator as is appropriate to
carry out the purposes of this section.
``(B) Transfer of data and information.--The Secretary
shall ensure that the Administrator of the Health Care
Financing Administration transfers to the Administrator of
the Medicare Benefits Administration such information and
data in the possession of the Administrator of the Health
Care Financing Administration as the Administrator of the
Medicare Benefits Administration requires to carry out the
duties described in paragraph (1).
``(C) Construction.--Insofar as a responsibility of the
Secretary or the Administrator of the Health Care Financing
Administration is redelegated to the Administrator under this
section, any reference to the Secretary or the Administrator
of the Health Care Financing Administration in this title or
title XI with respect to such responsibility is deemed to be
a reference to the Administrator.
``(d) Office of Beneficiary Assistance.--
``(1) Establishment.--The Secretary shall establish within
the Medicare Benefits Administration an Office of Beneficiary
Assistance to carry out functions relating to medicare
beneficiaries under this title, including making
determinations of eligibility of individuals for benefits
under this title, providing for enrollment of medicare
beneficiaries under this title, and the functions described
in paragraph (2). The Office shall be separate operating
division within the Administration.
``(2) Dissemination of information on benefits and appeals
rights.--
``(A) Dissemination of benefits information.--The Office of
Beneficiary Assistance shall disseminate to medicare
beneficiaries, by mail, by posting on the Internet site of
the Medicare Benefits Administration and through the toll-
free telephone number provided for under section 1804(b),
information with respect to the following:
``(i) Benefits, and limitations on payment (including cost-
sharing, stop-loss provisions, and formulary restrictions)
under parts C and D.
``(ii) Benefits, and limitations on payment under parts A
and B, including information on medicare supplemental
policies under section 1882.

Such information shall be presented in a manner so that
medicare beneficiaries may compare benefits under parts A, B,
D, and medicare supplemental policies with benefits under
Medicare+Choice plans under part C.
``(B) Dissemination of appeals rights information.--The
Office of Beneficiary Assistance shall disseminate to
medicare beneficiaries in the manner provided under
subparagraph (A) a description of procedural rights
(including grievance and appeals procedures) of beneficiaries
under the original medicare fee-for-service program under
parts A and B, the Medicare+Choice program under part C, and
the Voluntary Prescription Drug Benefit Program under part D.
``(3) Medicare ombudsman.--
``(A) In general.--Within the Office of Beneficiary
Assistance, there shall be a Medicare Ombudsman, appointed by
the Secretary from among individuals with expertise and
experience in the fields of health care and advocacy, to
carry out the duties described in subparagraph (B).
``(B) Duties.--The Medicare Ombudsman shall--
``(i) receive complaints, grievances, and requests for
information submitted by a medicare beneficiary, with respect
to any aspect of the medicare program;
``(ii) provide assistance with respect to complaints,
grievances, and requests referred to in clause (i),
including--

``(I) assistance in collecting relevant information for
such beneficiaries, to seek an appeal of a decision or
determination made by a fiscal intermediary, carrier,
Medicare+Choice organization, a PDP sponsor under part D, or
the Secretary; and
``(II) assistance to such beneficiaries with any problems
arising from disenrollment from a Medicare+Choice plan under
part C or a prescription drug plan under part D; and

``(iii) submit annual reports to Congress, the Secretary,
and the Medicare Policy Advisory Board describing the
activities of the Office, and including such recommendations
for improvement in the administration of this title as the
Ombudsman determines appropriate.
``(C) Coordination with state ombudsman programs and
consumer organizations.--The Medicare Ombudsman shall, to the
extent appropriate, coordinate with State medical Ombudsman
programs, and with State- and community-based consumer
organizations, to--
``(i) provide information about the medicare program; and
``(ii) conduct outreach to educate medicare beneficiaries
with respect to manners in which problems under the medicare
program may be resolved or avoided.
``(e) Medicare Policy Advisory Board.--
``(1) Establishment.--There is established within the
Medicare Benefits Administration the Medicare Policy Advisory
Board (in this section referred to the `Board'). The Board
shall advise, consult with, and make recommendations to the
Administrator of the Medicare Benefits Administration with
respect to the administration of parts C and D, including the
review of payment policies under such parts.
``(2) Reports.--
``(A) In general.--With respect to matters of the
administration of parts C and D, the Board shall submit to
Congress and to the Administrator of the Medicare Benefits
Administration such reports as the Board determines
appropriate. Each such report may contain such
recommendations as the Board determines appropriate for
legislative or administrative changes to improve the
administration of such parts, including the topics described
in subparagraph (B). Each such report shall be published in
the Federal Register.
``(B) Topics described.--Reports required under
subparagraph (A) may include the following topics:
``(i) Fostering competition.--Recommendations or proposals
to increase competition under parts C and D for services
furnished to medicare beneficiaries.
``(ii) Education and enrollment.--Recommendations for the
improvement to efforts to provide medicare beneficiaries
information and education on the program under this title,
and specifically parts C and D, and the program for
enrollment under the title.
``(iii) Implementation of risk-adjustment.--Evaluation of
the implementation under section 1853(a)(3)(C) of the risk
adjustment methodology to payment rates under that section to
Medicare+Choice organizations offering Medicare+Choice plans
that accounts for variations in per capita costs based on
health status and other demographic factors.

[[Page H5329]]

``(iv) Disease management programs.--Recommendations on the
incorporation of disease management programs under parts C
and D.
``(C) Maintaining independence of board.--The Board shall
directly submit to Congress reports required under
subparagraph (A). No officer or agency of the United States
may require the Board to submit to any officer or agency of
the United States for approval, comments, or review, prior to
the submission to Congress of such reports.
``(3) Duty of administrator of medicare benefits
administration.--With respect to any report submitted by the
Board under paragraph (2)(A), not later than 90 days after
the report is submitted, the Administrator of the Medicare
Benefits Administration shall submit to Congress and the
President an analysis of recommendations made by the Board in
such report. Each such analysis shall be published in the
Federal Register.
``(4) Membership.--
``(A) Appointment.--Subject to the succeeding provisions of
this paragraph, the Board shall consist of 7 members to be
appointed as follows:
``(i) 3 members shall be appointed by the President.
``(ii) 2 members shall be appointed by the Speaker of the
House of Representatives, with the advice of the chairman and
the ranking minority member of the Committees on Ways and
Means and on Commerce of the House of Representatives.
``(iii) 2 members shall be appointed by the President pro
tempore of the Senate with the advice of the chairman and the
ranking minority member of the Senate Committee on Finance.
``(B) Qualifications.--The members shall be chosen on the
basis of their integrity, impartiality, and good judgment,
and shall be individuals who are, by reason of their
education and experience in health care benefits management,
exceptionally qualified to perform the duties of members of
the Board.
``(C) Prohibition on inclusion of federal employees.--No
officer or employee of the United States may serve as a
member of the Board.
``(5) Compensation.--Members of the Board shall receive,
for each day (including travel time) they are engaged in the
performance of the functions of the board, compensation at
rates not to exceed the daily equivalent to the annual rate
in effect for level IV of the Executive Schedule under
section 5315 of title 5, United States Code.
``(6) Terms of office.--
``(A) In general.--The term of office of members of the
Board shall be 3 years.
``(B) Terms of initial appointees.--As designated by the
President at the time of appointment, of the members first
appointed--
``(i) 1 shall be appointed for a term of 1 year;
``(ii) 3 shall be appointed for terms of 2 years; and
``(iii) 3 shall be appointed for terms of 3 years.
``(C) Reappointments.--Any person appointed as a member of
the Board may not serve for more than 8 years.
``(D) Vacancy.--Any member appointed to fill a vacancy
occurring before the expiration of the term for which the
member's predecessor was appointed shall be appointed only
for the remainder of that term. A member may serve after the
expiration of that member's term until a successor has taken
office. A vacancy in the Board shall be filled in the manner
in which the original appointment was made.
``(7) Chair.--The Chair of the Board shall be elected by
the members. The term of office of the Chair shall be 3
years.
``(8) Meetings.--The Board shall meet at the call of the
Chair, but in no event less than 3 times during each fiscal
year.
``(9) Director and staff.--
``(A) Appointment of director.--The Board shall have a
Director who shall be appointed by the Chair.
``(B) Staff.--With the approval of the Board, the Director
may appoint and fix the pay of such additional personnel as
the Director considers appropriate.
``(C) Flexibility in application of civil service laws.--
``(i) In general.--The Director and staff of the Board
shall be appointed without regard to the provisions of
chapter 31 of title 5, United States Code, governing
appointments in the competitive service, and, subject to
clause (ii), shall be paid without regard to the provisions
of chapters 51 and 53 of such title (relating to
classification and General Schedule pay rates).
``(ii) Maximum rate.--In no case may the rate of
compensation determined under clause (i) exceed the rate of
basic pay payable for level IV of the Executive Schedule
under section 5315 of title 5, United States Code.
``(D) Assistance from the administrator of the medicare
benefits administration.--The Administrator of the Medicare
Benefits Administration shall make available to the Board
such information and other assistance as it may require to
carry out its functions.
``(10) Contract authority.--The Board may contract with and
compensate government and private agencies or persons to
carry out its duties under this subsection, without regard to
section 3709 of the Revised Statutes (41 U.S.C. 5).
``(f) Funding.--There is authorized to be appropriated, in
appropriate part from the Federal Hospital Insurance Trust
Fund and from the Federal Supplementary Medical Insurance
Trust Fund (including the Medicare Prescription Drug
Account), such sums as are necessary to carry out this
section.''.
(b) Effective Date.--
(1) In general.--The amendment made by subsection (a) shall
take effect on the date of the enactment of this Act.
(2) Timing of initial appointments.--The Administrator and
Deputy Administrator of the Medicare Benefits Administration
may not be appointed before March 1, 2001.
(3) Duties with respect to eligibility determinations and
enrollment.--The Administrator of the Medicare Benefits
Administration shall carry out enrollment under title XVIII
of the Social Security Act, make eligibility determinations
under such title, and carry out part C of such title for
years beginning or after January 1, 2003.

SEC. 202. MISCELLANEOUS ADMINISTRATIVE PROVISIONS.

(a) Administrator as Member of the Board of Trustees of the
Medicare Trust Funds.--Section 1817(b) and section 1841(b) of
the Social Security Act (42 U.S.C. 1395i(b), 1395t(b)) are
each amended by striking ``and the Secretary of Health and
Human Services, all ex officio,'' and inserting ``, the
Secretary of Health and Human Services, and the Administrator
of the Medicare Benefits Administration, all ex officio,''.
(b) Increase in Grade to Executive Level III for the
Administrator of the Health Care Financing Administration.--
(1) In general.--Section 5314 of title 5, United States
Code, by adding at the end the following:
``Administrator of the Health Care Financing
Administration.''.
(2) Conforming amendment.--Section 5315 of such title is
amended by striking ``Administrator of the Health Care
Financing Administration.''.
(3) Effective date.--The amendments made by this subsection
take effect on March 1, 2001.

Subtitle B--Oversight of Financial Sustainability of the Medicare
Program

SEC. 211. ADDITIONAL REQUIREMENTS FOR ANNUAL FINANCIAL REPORT
AND OVERSIGHT ON MEDICARE PROGRAM.

(a) In General.--Section 1817 of the Social Security Act
(42 U.S.C. 1395i) is amended by adding at the end the
following new subsection:
``(l) Combined Report on Operation and Status of the Trust
Fund and the Federal Supplementary Medical Insurance Trust
Fund.--
``(1) In general.--In addition to the duty of the Board of
Trustees to report to Congress under subsection (b), on the
date the Board submits the report required under subsection
(b)(2), the Board shall submit to Congress a report on the
operation and status of the Trust Fund and the Federal
Supplementary Medical Insurance Trust Fund established under
section 1841 (in this subsection referred to as the `Trust
Funds'). Such report shall included the following
information:
``(A) Overall spending from the general fund of the
treasury.--A statement of total amounts obligated during the
preceding fiscal year from the General Revenues of the
Treasury to the Trust Funds for payment for benefits covered
under this title, stated in terms of the total amount and in
terms of the percentage such amount bears to all other
amounts obligated from such General Revenues during such
fiscal year.
``(B) Historical overview of spending.--From the date of
the inception of the program of insurance under this title
through the fiscal year involved, a statement of the total
amounts referred to in subparagraph (A).
``(C) 10-year and 50-year projections.--An estimate of
total amounts referred to in subparagraph (A) required to be
obligated for payment for benefits covered under this title
for each of the 10 fiscal years succeeding the fiscal year
involved and for the 50-year period beginning with the
succeeding fiscal year.
``(D) Relation to gdp growth.--A comparison of the rate of
growth of the total amounts referred to in subparagraph (A)
to the rate of growth in the gross domestic product for the
same period.
``(2) Publication.--Each report submitted under paragraph
(1) shall be published by the Committee on Ways and Means as
a public document and shall be made available by such
Committee on the Internet.''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply with respect to fiscal years beginning on or
after the date of the enactment of this Act.
(c) Congressional Hearings.--It is the sense of Congress
that the committees of jurisdiction shall hold hearings on
the reports submitted under section 1817(l) of the Social
Security Act.

Subtitle C--Changes in Medicare Coverage and Appeals Process

SEC. 221. REVISIONS TO MEDICARE APPEALS PROCESS.

(a) Conduct of Reconsiderations of Determinations by
Independent Contractors.--Section 1869 of the Social Security
Act (42 U.S.C. 1395ff) is amended to read as follows:

``determinations; appeals

``Sec. 1869. (a) Initial Determinations.--The Secretary
shall promulgate regulations and make initial determinations
with respect to benefits under part A or part B in

[[Page H5330]]

accordance with those regulations for the following:
``(1) The initial determination of whether an individual is
entitled to benefits under such parts.
``(2) The initial determination of the amount of benefits
available to the individual under such parts.
``(3) Any other initial determination with respect to a
claim for benefits under such parts, including an initial
determination by the Secretary that payment may not be made,
or may no longer be made, for an item or service under such
parts, an initial determination made by a utilization and
quality control peer review organization under section
1154(a)(2), and an initial determination made by an entity
pursuant to a contract with the Secretary to administer
provisions of this title or title XI.
``(b) Appeal Rights.--
``(1) In general.--
``(A) Reconsideration of initial determination.--Subject to
subparagraph (D), any individual dissatisfied with any
initial determination under subsection (a) shall be entitled
to reconsideration of the determination, and, subject to
subparagraphs (D) and (E), a hearing thereon by the Secretary
to the same extent as is provided in section 205(b) and to
judicial review of the Secretary's final decision after such
hearing as is provided in section 205(g).
``(B) Representation by provider or supplier.--
``(i) In general.--Sections 206(a), 1102, and 1871 shall
not be construed as authorizing the Secretary to prohibit an
individual from being represented under this section by a
person that furnishes or supplies the individual, directly or
indirectly, with services or items, solely on the basis that
the person furnishes or supplies the individual with such a
service or item.
``(ii) Mandatory waiver of right to payment from
beneficiary.--Any person that furnishes services or items to
an individual may not represent an individual under this
section with respect to the issue described in section
1879(a)(2) unless the person has waived any rights for
payment from the beneficiary with respect to the services or
items involved in the appeal.
``(iii) Prohibition on payment for representation.--If a
person furnishes services or items to an individual and
represents the individual under this section, the person may
not impose any financial liability on such individual in
connection with such representation.
``(iv) Requirements for representatives of a beneficiary.--
The provisions of section 205(j) and section 206 (regarding
representation of claimants) shall apply to representation of
an individual with respect to appeals under this section in
the same manner as they apply to representation of an
individual under those sections.
``(C) Succession of rights in cases of assignment.--The
right of an individual to an appeal under this section with
respect to an item or service may be assigned to the provider
of services or supplier of the item or service upon the
written consent of such individual using a standard form
established by the Secretary for such an assignment.
``(D) Time limits for appeals.--
``(i) Reconsiderations.--Reconsideration under subparagraph
(A) shall be available only if the individual described
subparagraph (A) files notice with the Secretary to request
reconsideration by not later than 180 days after the
individual receives notice of the initial determination under
subsection (a) or within such additional time as the
Secretary may allow.
``(ii) Hearings conducted by the secretary.--The Secretary
shall establish in regulations time limits for the filing of
a request for a hearing by the Secretary in accordance with
provisions in sections 205 and 206.
``(E) Amounts in controversy.--
``(i) In general.--A hearing (by the Secretary) shall not
be available to an individual under this section if the
amount in controversy is less than $100, and judicial review
shall not be available to the individual if the amount in
controversy is less than $1,000.
``(ii) Aggregation of claims.--In determining the amount in
controversy, the Secretary, under regulations, shall allow 2
or more appeals to be aggregated if the appeals involve--

``(I) the delivery of similar or related services to the
same individual by one or more providers of services or
suppliers, or
``(II) common issues of law and fact arising from services
furnished to 2 or more individuals by one or more providers
of services or suppliers.

``(F) Expedited proceedings.--
``(i) Expedited determination.--In the case of an
individual who--

``(I) has received notice by a provider of services that
the provider of services plans to terminate services provided
to an individual and a physician certifies that failure to
continue the provision of such services is likely to place
the individual's health at significant risk, or
``(II) has received notice by a provider of services that
the provider of services plans to discharge the individual
from the provider of services,

the individual may request, in writing or orally, an
expedited determination or an expedited reconsideration of an
initial determination made under subsection (a), as the case
may be, and the Secretary shall provide such expedited
determination or expedited reconsideration.
``(ii) Expedited hearing.--In a hearing by the Secretary
under this section, in which the moving party alleges that no
material issues of fact are in dispute, the Secretary shall
make an expedited determination as to whether any such facts
are in dispute and, if not, shall render a decision
expeditiously.
``(G) Reopening and revision of determinations.--The
Secretary may reopen or revise any initial determination or
reconsidered determination described in this subsection under
guidelines established by the Secretary in regulations.
``(2) Review of coverage determinations.--
``(A) National coverage determinations.--
``(i) In general.--Review of any national coverage
determination shall be subject to the following limitations:

``(I) Such a determination shall not be reviewed by any
administrative law judge.
``(II) Such a determination shall not be held unlawful or
set aside on the ground that a requirement of section 553 of
title 5, United States Code, or section 1871(b) of this
title, relating to publication in the Federal Register or
opportunity for public comment, was not satisfied.
``(III) Upon the filing of a complaint by an aggrieved
party, such a determination shall be reviewed by the
Departmental Appeals Board of the Department of Health and
Human Services. In conducting such a review, the Departmental
Appeals Board shall review the record and shall permit
discovery and the taking of evidence to evaluate the
reasonableness of the determination. In reviewing such a
determination, the Departmental Appeals Board shall defer
only to the reasonable findings of fact, reasonable
interpretations of law, and reasonable applications of fact
to law by the Secretary.
``(IV) A decision of the Departmental Appeals Board
constitutes a final agency action and is subject to judicial
review.

[[Page H5331]]

An action taken under clause (i) (other than subclause (IV))
is deemed to be a national coverage determination for
purposes of review under subparagraph (A).
``(3) Publication on the internet of decisions of hearings
of the secretary.--Each decision of a hearing by the
Secretary shall be made public, and the Secretary shall
publish each decision on the Medicare Internet site of the
Department of Health and Human Services. The Secretary shall
remove from such decision any information that would identify
any individual, provider of services, or supplier.
``(4) Limitation on review of certain regulations.--A
regulation or instruction which relates to a method for
determining the amount of payment under part B and which was
initially issued before January 1, 1981, shall not be subject
to judicial review.
``(5) Standing.--An action under this section seeking
review of a coverage determination (with respect to items and
services under this title) may be initiated only by one (or
more) of the following aggrieved persons, or classes of
persons:
``(A) Individuals entitled to benefits under part A, or
enrolled under part B, or both, who are in need of the items
or services involved in the coverage determination.
``(B) Persons, or classes of persons, who make,
manufacture, offer, supply, make available, or provide such
items and services.
``(c) Conduct of Reconsiderations by Independent
Contractors.--
``(1) In general.--The Secretary shall enter into contracts
with qualified independent contractors to conduct
reconsiderations of initial determinations made under
paragraphs (2) and (3) of subsection (a). Contracts shall be
for an initial term of three years and shall be renewable on
a triennial basis thereafter.
``(2) Qualified independent contractor.--For purposes of
this subsection, the term `qualified independent contractor'
means an entity or organization that is independent of any
organization under contract with the Secretary that makes
initial determinations under subsection (a), and that meets
the requirements established by the Secretary consistent with
paragraph (3).
``(3) Requirements.--Any qualified independent contractor
entering into a contract with the Secretary under this
subsection shall meet the following requirements:
``(A) In general.--The qualified independent contractor
shall perform such duties and functions and assume such
responsibilities as may be required under regulations of the
Secretary promulgated to carry out the provisions of this
subsection, and such additional duties, functions, and
responsibilities as provided under the contract.
``(B) Determinations.--The qualified independent contractor
shall determine, on the basis of such criteria, guidelines,
and policies established by the Secretary and published under
subsection (d)(2)(D), whether payment shall be made for items
or services under part A or part B and the amount of such
payment. Such determination shall constitute the conclusive
determination on those issues for purposes of payment under
such parts for fiscal intermediaries, carriers, and other
entities whose determinations are subject to review by the
contractor; except that payment may be made if--
``(i) such payment is allowed by reason of section 1879;
``(ii) in the case of inpatient hospital services or
extended care services, the qualified independent contractor
determines that additional time is required in order to
arrange for postdischarge care, but payment may be continued
under this clause for not more than 2 days, and only in the
case in which the provider of such services did not know and
could not reasonably have been expected to know (as
determined under section 1879) that payment would not
otherwise be made for such services under part A or part B
prior to notification by the qualified independent contractor
under this subsection;
``(iii) such determination is changed as the result of any
hearing by the Secretary or judicial review of the decision
under this section; or
``(iv) such payment is authorized under section
1861(v)(1)(G).
``(C) Deadlines for decisions.--
``(i) Determinations.--The qualified independent contractor
shall conduct and conclude a determination under subparagraph
(B) or an appeal of an initial determination, and mail the
notice of the decision by not later than the end of the 45-
day period beginning on the date a request for
reconsideration has been timely filed.
``(ii) Consequences of failure to meet deadline.--In the
case of a failure by the qualified independent contractor to
mail the notice of the decision by the end of the period
described in clause (i), the party requesting the
reconsideration or appeal may request a hearing before an
administrative law judge, notwithstanding any requirements
for a reconsidered determination for purposes of the party's
right to such hearing.
``(iii) Expedited reconsiderations.--The qualified
independent contractor shall perform an expedited
reconsideration under subsection (b)(1)(F) of a notice from a
provider of services or supplier that payment may not be made
for an item or service furnished by the provider of services
or supplier, of a decision by a provider of services to
terminate services furnished to an individual, or of a
decision of the provider of services to discharge the
individual from the provider of services, in accordance with
the following:

``(I) Deadline for decision.--Notwithstanding section
216(j), not later than 1 day after the date the qualified
independent contractor has received a request for such
reconsideration and has received such medical or other
records needed for such reconsideration, the qualified
independent contractor shall provide notice (by telephone and
in writing) to the individual and the provider of services
and attending physician of the individual of the results of
the reconsideration. Such reconsideration shall be conducted
regardless of whether the provider of services or supplier
will charge the individual for continued services or whether
the individual will be liable for payment for such continued
services.
``(II) Consultation with beneficiary.--In such
reconsideration, the qualified independent contractor shall
solicit the views of the individual involved.

``(D) Limitation on individual reviewing determinations.--
``(i) Physicians.--No physician under the employ of a
qualified independent contractor may review--

``(I) determinations regarding health care services
furnished to a patient if the physician was directly
responsible for furnishing such services; or
``(II) determinations regarding health care services
provided in or by an institution, organization, or agency, if
the physician or any member of the physician's family has,
directly or indirectly, a significant financial interest in
such institution, organization, or agency.

``(ii) Physician's family described.--For purposes of this
paragraph, a physician's family includes the physician's
spouse (other than a spouse who is legally separated from the
physician under a decree of divorce or separate maintenance),
children (including stepchildren and legally adopted
children), grandchildren, parents, and grandparents.
``(E) Explanation of determinations.--Any determination of
a qualified independent contractor shall be in writing, and
shall include a detailed explanation of the determination as
well as a discussion of the pertinent facts and applicable
regulations applied in making such determination.
``(F) Notice requirements.--Whenever a qualified
independent contractor makes a determination under this
subsection, the qualified independent contractor shall
promptly notify such individual and the entity responsible
for the payment of claims under part A or part B of such
determination.
``(G) Dissemination of information.--Each qualified
independent contractor shall, using the methodology
established by the Secretary under subsection (d)(4), make
available all determinations of such qualified independent
contractors to fiscal intermediaries (under section 1816),
carriers (under section 1842), peer review organizations
(under part B of title XI), Medicare+Choice organizations
offering Medicare+Choice plans under part C, and other
entities under contract with the Secretary to make initial
determinations under part A or part B or title XI.
``(H) Ensuring consistency in determinations.--Each
qualified independent contractor shall monitor its
determinations to ensure consistency of determinations with
respect to requests for reconsideration of similar or related
matters.
``(I) Data collection.--
``(i) In general.--Consistent with the requirements of
clause (ii), a qualified independent contractor shall collect
such information relevant to its functions, and keep and
maintain such records in such form and manner as the
Secretary may require to carry out the purposes of this
section and shall permit access to and use of any such
information and records as the Secretary may require for such
purposes.
``(ii) Type of data collected.--Each qualified independent
contractor shall keep accurate records of each decision made,
consistent with standards established by the Secretary for
such purpose. Such records shall be maintained in an
electronic database in a manner that provides for
identification of the following:

``(I) Specific claims that give rise to appeals.
``(II) Situations suggesting the need for increased
education for providers of services, physicians, or
suppliers.
``(III) Situations suggesting the need for changes in
national or local coverage policy.
``(IV) Situations suggesting the need for changes in local
medical review policies.

[[Page H5332]]

independent contractor or who furnishes professional services
to such qualified independent contractor, shall be held by
reason of the performance of any duty, function, or activity
required or authorized pursuant to this subsection or to a
valid contract entered into under this subsection, to have
violated any criminal law, or to be civilly liable under any
law of the United States or of any State (or political
subdivision thereof) provided due care was exercised in the
performance of such duty, function, or activity.
``(d) Administrative Provisions.--
``(1) Outreach.--The Secretary shall perform such outreach
activities as are necessary to inform individuals entitled to
benefits under this title and providers of services and
suppliers with respect to their rights of, and the process
for, appeals made under this section. The Secretary shall use
the toll-free telephone number maintained by the Secretary
(1-800-MEDICAR(E)) (1-800-633-4227) to provide information
regarding appeal rights and respond to inquiries regarding
the status of appeals.
``(2) Guidance for reconsiderations and hearings.--
``(A) Regulations.--Not later than 1 year after the date of
the enactment of this section, the Secretary shall promulgate
regulations governing the processes of reconsiderations of
determinations by the Secretary and qualified independent
contractors and of hearings by the Secretary. Such
regulations shall include such specific criteria and provide
such guidance as required to ensure the adequate functioning
of the reconsiderations and hearings processes and to ensure
consistency in such processes.
``(B) Deadlines for administrative action.--
``(i) Hearing by administrative law judge.--

``(II) In general.--Except as provided in subclause (II),
an administrative law judge shall conduct and conclude a
hearing on a decision of a qualified independent contractor
under subsection (c) and render a decision on such hearing by
not later than the end of the 90-day period beginning on the
date a request for hearing has been timely filed.
``(II) Waiver of deadline by party seeking hearing.--The
90-day period under subclause (i) shall not apply in the case
of a motion or stipulation by the party requesting the
hearing to waive such period.

``(ii) Departmental appeals board review.--The Departmental
Appeals Board of the Department of Health and Human Services
shall conduct and conclude a review of the decision on a
hearing described in subparagraph (B) and make a decision or
remand the case to the administrative law judge for
reconsideration by not later than the end of the 90-day
period beginning on the date a request for review has been
timely filed.
``(iii) Consequences of failure to meet deadlines.--In the
case of a failure by an administrative law judge to render a
decision by the end of the period described in clause (ii),
the party requesting the hearing may request a review by the
Departmental Appeals Board of the Department of Health and
Human Services, notwithstanding any requirements for a
hearing for purposes of the party's right to such a review.
``(iv) DAB hearing procedure.--In the case of a request
described in clause (iii), the Departmental Appeals Board
shall review the case de novo.
``(C) Policies.--The Secretary shall provide such specific
criteria and guidance, including all applicable national and
local coverage policies and rationale for such policies, as
is necessary to assist the qualified independent contractors
to make informed decisions in considering appeals under this
section. The Secretary shall furnish to the qualified
independent contractors the criteria and guidance described
in this paragraph in a published format, which may be an
electronic format.
``(D) Publication of medicare coverage policies on the
internet.--The Secretary shall publish national and local
coverage policies under this title on an Internet site
maintained by the Secretary.
``(E) Effect of failure to publish policies.--
``(i) National and local coverage policies.--Qualified
independent contractors shall not be bound by any national or
local medicare coverage policy established by the Secretary
that is not published on the Internet site under subparagraph
(D).
``(ii) Other policies.--With respect to policies
established by the Secretary other than the policies
described in clause (i), qualified independent contractors
shall not be bound by such policies if the Secretary does not
furnish to the qualified independent contractor the policies
in a published format consistent with subparagraph (C).
``(3) Continuing education requirement for qualified
independent contractors and administrative law judges.--
``(A) In general.--The Secretary shall provide to each
qualified independent contractor, and to administrative law
judges that decide appeals of reconsiderations of initial
determinations or other decisions or determinations under
this section, such continuing education with respect to
policies of the Secretary under this title or part B of title
XI as is necessary for such qualified independent contractors
and administrative law judges to make informed decisions with
respect to appeals.
``(B) Monitoring of decisions by qualified independent
contractors and administrative law judges.--The Secretary
shall monitor determinations made by all qualified
independent contractors and administrative law judges under
this section and shall provide continuing education and
training to such qualified independent contractors and
administrative law judges to ensure consistency of
determinations with respect to appeals on similar or related
matters. To ensure such consistency, the Secretary shall
provide for administration and oversight of qualified
independent contractors and administrative law judges through
a central office of the Department of Health and Human
Services. Such administration and oversight may not be
delegated to regional offices of the Department.
``(4) Dissemination of determinations.--The Secretary shall
establish a methodology under which qualified independent
contractors shall carry out subsection (c)(3)(G).
``(5) Survey.--Not less frequently than every 5 years, the
Secretary shall conduct a survey of a valid sample of
individuals entitled to benefits under this title, providers
of services, and suppliers to determine the satisfaction of
such individuals or entities with the process for appeals of
determinations provided for under this section and education
and training provided by the Secretary with respect to that
process. The Secretary shall submit to Congress a report
describing the results of the survey, and shall include any
recommendations for administrative or legislative actions
that the Secretary determines appropriate.
``(6) Report to congress.--The Secretary shall submit to
Congress an annual report describing the number of appeals
for the previous year, identifying issues that require
administrative or legislative actions, and including any
recommendations of the Secretary with respect to such
actions. The Secretary shall include in such report an
analysis of determinations by qualified independent
contractors with respect to inconsistent decisions and an
analysis of the causes of any such inconsistencies.''.
(b) Applicability of Requirements and Limitations on
Liability of Qualified Independent Contractors to
Medicare+Choice Independent Appeals Contractors.--Section
1852(g)(4) of the Social Security Act (42 U.S.C. 1395w-
22(e)(3)) is amended by adding at the end the following:
``The provisions of section 1869(c)(5) shall apply to
independent outside entities under contract with the
Secretary under this paragraph.''.
(c) Conforming Amendment to Review by the Provider
Reimbursement Review Board.--Section 1878(g) of the Social
Security Act (42 U.S.C. 1395oo(g)) is amended by adding at
the end the following new paragraph:
``(3) Findings described in paragraph (1) and
determinations and other decisions described in paragraph (2)
may be reviewed or appealed under section 1869.''.

SEC. 222. PROVISIONS WITH RESPECT TO LIMITATIONS ON LIABILITY
OF BENEFICIARIES.

[[Page H5333]]

``(1) The provider of services shall furnish a notice of
discharge and appeal rights established by the Secretary
under subsection (l) to each individual entitled to benefits
under this title to whom such provider of services furnishes
services, upon admission of the individual to the provider of
services and upon notice of determination to discharge the
individual from the provider of services, of the individual's
limitations of liability under this section and rights of
appeal under section 1869.
``(2) If the individual, prior to discharge from the
provider of services, appeals the determination to discharge
under section 1869 not later than noon of the first working
day after the date the individual receives the notice of
determination to discharge and notice of appeal rights under
paragraph (1), the provider of services shall, by the close
of business of such first working day, provide to the
Secretary (or qualified independent contractor under section
1869, as determined by the Secretary) the records required to
review the determination.
``(l) The Secretary shall develop appropriate standard
forms for individuals entitled to benefits under this title
to waive limitation of liability protections under subsection
(j) and to receive notice of discharge and appeal rights
under subsection (k). The forms developed by the Secretary
under this subsection shall clearly and in plain language
inform such individuals of their limitations on liability,
their rights under section 1869(a) to obtain an initial
determination by the Secretary of whether payment may be made
under part A or part B for such benefit, and their rights of
appeal under section 1869(b), and shall inform such
individuals that they may obtain further information or file
an appeal of the determination by use of the toll-free
telephone number (1-800-MEDICAR(E)) (1-800-633-4227)
maintained by the Secretary. The forms developed by the
Secretary under this subsection shall be the only manner in
which such individuals may waive such protections under this
title or title XI.
``(m) An individual who is entitled to benefits under this
title and is furnished an item or service is not liable for
payment of cost sharing amounts of more than $50 with respect
to such benefits unless the individual has been informed in
advance of being furnished the item or service of the
estimated amount of the cost sharing for the item or service
using a standard form established by the Secretary.''.
(2) Conforming amendment.--Section 1870(a) of the Social
Security Act (42 U.S.C. 1395gg(a)) is amended by striking
``Any payment under this title'' and inserting ``Except as
provided in section 1879(i), any payment under this title''.
(b) Inclusion of Beneficiary Liability Information in
Explanation of Medicare Benefits.--Section 1806(a) of the
Social Security Act (42 U.S.C. 1395b-7(a)) is amended--
(1) in paragraph (1), by striking ``and'' at the end;
(2) by redesignating paragraph (2) as paragraph (3); and
(3) by inserting after paragraph (1) the following new
paragraph:
``(2) lists with respect to each item or service furnished
the amount of the individual's liability for payment;'';
(4) in paragraph (3), as so redesignated, by striking the
period at the end and inserting ``; and''; and
(5) by adding at the end the following new paragraph:
``(4) includes the toll-free telephone number (1-800-
MEDICAR(E)) (1-800-633-4227) for information and questions
concerning the statement, liability of the individual for
payment, and appeal rights.''.

SEC. 223. WAIVERS OF LIABILITY FOR COST SHARING AMOUNTS.

(a) In General.--Section 1128A(i)(6)(A) of the Social
Security Act (42 U.S.C. 1320a-7a(i)(6)(A)) is amended by
striking clauses (i) through (iii) and inserting the
following:
``(i) the waiver is offered as a part of a supplemental
insurance policy or retiree health plan;
``(ii) the waiver is not offered as part of any
advertisement or solicitation, other than in conjunction with
a policy or plan described in clause (i);
``(iii) the person waives the coinsurance and deductible
amount after the beneficiary informs the person that payment
of the coinsurance or deductible amount would pose a
financial hardship for the individual; or
``(iv) the person determines that the coinsurance and
deductible amount would not justify the costs of
collection.''.
(b) Conforming Amendment.--Section 1128B(b) of the Social
Security Act (42 U.S.C. 1320a-7b(b)) is amended by adding at
the end the following new paragraph:
``(4) In this section, the term `remuneration' includes the
meaning given such term in section 1128A(i)(6).''.

SEC. 224. ELIMINATION OF MOTIONS BY THE SECRETARY ON
DECISIONS OF THE PROVIDER REIMBURSEMENT REVIEW
BOARD.

Section 1878(f)(1) of such Act (42 U.S.C. 1395oo(f)(1)) is
amended--
(1) in the first sentence, by striking ``unless the
Secretary, on his own motion, and within 60 days after the
provider of services is notified of the Board's decision,
reverses, affirms, or modifies the Board's decision'';
(2) in the second sentence, by striking ``, or of any
reversal, affirmance, or modification by the Secretary,'' and
``or of any reversal, affirmance, or modification by the
Secretary''; and
(3) in the fifth sentence, by striking `` and not subject
to review by the Secretary''.

TITLE III--MEDICARE+CHOICE REFORMS; PRESERVATION OF MEDICARE PART B
DRUG BENEFIT

Subtitle A--Medicare+Choice Reforms

SEC. 301. INCREASE IN NATIONAL PER CAPITA MEDICARE+CHOICE
GROWTH PERCENTAGE IN 2001 AND 2002.

Section 1853(c)(6)(B) of the Social Security Act (42 U.S.C.
1395w-23(c)(6)(B)) is amended--
(1) in clause (iv), by striking ``for 2001, 0.5 percentage
points'' and inserting ``for 2001, 0.4 percentage points'';
and
(2) in clause (v), by striking ``for 2002, 0.3 percentage
points'' and inserting ``for 2002, 0.2 percentage points''.

SEC. 302. PERMANENTLY REMOVING APPLICATION OF BUDGET
NEUTRALITY BEGINNING IN 2002.

Section 1853(c) of the Social Security Act (42 U.S.C.
1395w-23(c)) is amended--
(1) in paragraph (1)(A), in the matter following clause
(ii), by inserting ``(for years before 2002)'' after
``multiplied''; and
(2) in paragraph (5), by inserting ``(before 2002)'' after
``for each year''.

SEC. 303. INCREASING MINIMUM PAYMENT AMOUNT.

(a) In General.--Section 1853(c)(1)(B)(ii) of the Social
Security Act (42 U.S.C. 1395w-23(c)(1)(B)(ii)) is amended--
(1) by striking ``(ii) For a succeeding year'' and
inserting ``(ii)(I) Subject to subclause (II), for a
succeeding year''; and
(2) by adding at the end the following new subclause:
``(II) For 2002 for any of the 50 States and the District
of Columbia, $450.''.
(b) Effective Date.--The amendments made by subsection (a)
apply to years beginning with 2002.

SEC. 304. ALLOWING MOVEMENT TO 50:50 PERCENT BLEND IN 2002.

``except that a Medicare+Choice organization may elect to
apply subparagraph (F) (rather than subparagraph (E)) for
2002.''.

SEC. 305. INCREASED UPDATE FOR PAYMENT AREAS WITH ONLY ONE OR
NO MEDICARE+CHOICE CONTRACTS.

(a) In General.--Section 1853(c)(1)(C)(ii) of the Social
Security Act (42 U.S.C. 1395w-23(c)(1)(C)(ii)) is amended--
(1) in clause (i), by striking ``(ii) For a subsequent
year'' and inserting ``(ii)(I) Subject to subclause (II), for
a subsequent year''; and
(2) by adding at the end the following new subclause:
``(II) During 2002, 2003, 2004, and 2005, in the case of a
Medicare+Choice payment area in which there is no more than 1
contract entered into under this part as of July 1 before the
beginning of the year, 102.5 percent of the annual
Medicare+Choice capitation rate under this paragraph for the
area for the previous year.''.
(b) Construction.--The amendments made by subsection (a) do
not affect the payment of a first time bonus under section
1853(i) of the Social Security Act (42 U.S.C. 1395w-23(i)).

SEC. 306. PERMITTING HIGHER NEGOTIATED RATES IN CERTAIN
MEDICARE+CHOICE PAYMENT AREAS BELOW NATIONAL
AVERAGE.

Section 1853(c)(1) of the Social Security Act (42 U.S.C.
1395w-23(c)(1)) is amended--
(1) in the matter before subparagraph (A), by striking ``or
(C)'' and inserting ``(C), or (D)''; and
(2) by adding at the end the following new subparagraph:
``(D) Permitting higher rates through negotiation.--
``(i) In general.--For each year beginning with 2004, in
the case of a Medicare+Choice payment area for which the
Medicare+Choice capitation rate under this paragraph would
otherwise be less than the United States per capita cost
(USPCC), as calculated by the Secretary, a Medicare+Choice
organization may negotiate with the Medicare Benefits
Administrator an annual per capita rate that--

``(I) reflects an annual rate of increase up to the rate of
increase specified in clause (ii);
``(II) takes into account audited current data supplied by
the organization on its adjusted community rate (as defined
in section 1854(f)(3)); and
``(III) does not exceed the United States per capita cost,
as projected by the Secretary for the year involved.

``(ii) Maximum rate described.--The rate of increase
specified in this clause for a year is the rate of inflation
in private health insurance for the year involved, as
projected by the Medicare Benefits Administrator, and
includes such adjustments as may be necessary--

``(I) to reflect the demographic characteristics in the
population under this title; and
``(II) to eliminate the costs of prescription drugs.

``(iii) Adjustments for over or under projections.--If
subparagraph is applied to an organization and payment area
for a year, in applying this subparagraph for a subsequent
year the provisions of paragraph (6)(C) shall apply in the
same manner as such provisions apply under this paragraph.''.

[[Page H5334]]

SEC. 307. 10-YEAR PHASE IN OF RISK ADJUSTMENT BASED ON DATA
FROM ALL SETTINGS.

``and, beginning in 2004, insofar as such risk adjustment is
based on data from all settings, the methodology shall be
phased in equal increments over a 10 year period, beginning
with 2004 or (if later) the first year in which such data is
used.''.

Subtitle B--Preservation of Medicare Coverage of Drugs and Biologicals

SEC. 311. PRESERVATION OF COVERAGE OF DRUGS AND BIOLOGICALS
UNDER PART B OF THE MEDICARE PROGRAM.

(a) In General.--Section 1861(s)(2) of the Social Security
Act (42 U.S.C. 1395x(s)(2)) is amended, in each of
subparagraphs (A) and (B), by striking ``(including drugs and
biologicals which cannot, as determined in accordance with
regulations, be self-administered)'' and inserting
``(including drugs and biologicals which are not usually
self-administered by the patient)''.
(b) Effective Date.--The amendment made by subsection (a)
applies to drugs and biologicals administered on or after
October 1, 2000.

The SPEAKER pro tempore. The amendment recommended by the Committee
on Ways and Means now printed in the bill, modified by the amendment
printed in House Report 106-703, is adopted.
The text of H.R. 4680, as amended, as modified, is as follows:

H.R. 4680

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

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Medicare
Rx 2000 Act''.
(b) Table of Contents.--The table of contents of this Act
is as follows:

Sec. 1. Short title; table of contents.

TITLE I--MEDICARE PRESCRIPTION DRUG BENEFIT

Sec. 101. Establishment of a medicare prescription drug benefit.

``Part D--Voluntary Prescription Drug Benefit Program

``Sec. 1860A. Benefits; eligibility; enrollment; and coverage period.
``Sec. 1860B. Requirements for qualified prescription drug coverage.
``Sec. 1860C. Beneficiary protections for qualified prescription drug
coverage.
``Sec. 1860D. Requirements for prescription drug plan (PDP) sponsors;
contracts; establishment of standards.
``Sec. 1860E. Process for beneficiaries to select qualified
prescription drug coverage.
``Sec. 1860F. Premiums.
``Sec. 1860G. Premium and cost-sharing subsidies for low-income
individuals.
``Sec. 1860H. Subsidies for all medicare beneficiaries through
reinsurance for qualified prescription drug coverage.
``Sec. 1860I. Medicare Prescription Drug Account in Federal
Supplementary Medical Insurance Trust Fund.
``Sec. 1860J. Definitions; treatment of references to provisions in
part C.''
Sec. 102. Offering of qualified prescription drug coverage under the
Medicare+Choice program.
Sec. 103. Medicaid amendments.
Sec. 104. Medigap transition provisions.
Sec. 105. State Pharmaceutical Assistance Transition Commission.
Sec. 106. Demonstration project for disease management for severely
chronically ill medicare beneficiaries.

TITLE II--MODERNIZATION OF ADMINISTRATION OF MEDICARE

Subtitle A--Medicare Benefits Administration

Sec. 201. Establishment of administration.
``Sec. 1807. Medicare Benefits Administration.''
Sec. 202. Miscellaneous administrative provisions.

Subtitle B--Oversight of Financial Sustainability of the Medicare
Program

Sec. 211. Additional requirements for annual financial report and
oversight on medicare program.

Subtitle C--Changes in Medicare Coverage and Appeals Process

TITLE III--MEDICARE+CHOICE REFORMS; PRESERVATION OF MEDICARE PART B
DRUG BENEFIT

Subtitle A--Medicare+Choice Reforms

Subtitle B--Preservation of Medicare Coverage of Drugs and Biologicals

Sec. 311. Preservation of coverage of drugs and biologicals under part
B of the medicare program.
Sec. 312. GAO report on part B payment for drugs and biologicals and
related services.

TITLE I--MEDICARE PRESCRIPTION DRUG BENEFIT

SEC. 101. ESTABLISHMENT OF A MEDICARE PRESCRIPTION DRUG
BENEFIT.

(a) In General.--Title XVIII of the Social Security Act is
amended--
(1) by redesignating part D as part E; and
(2) by inserting after part C the following new part:

``Part D--Voluntary Prescription Drug Benefit Program

``SEC. 1860A. BENEFITS; ELIGIBILITY; ENROLLMENT; AND COVERAGE
PERIOD.

In applying the last sentence of section 1851(e)(4) (relating
to discontinuance of a Medicare+Choice election during the
first year of eligibility) under this subparagraph, in the
case of an election described in such section in which the
individual had elected or is provided qualified prescription
drug coverage at the time of such first enrollment, the
individual shall be permitted to enroll in a prescription
drug plan under this part at the time of the election of
coverage under the original fee-for-service plan.
``(B) Initial election periods.--
``(i) Individuals currently covered.--In the case of an
individual who is enrolled under part B as of November 1,
2002, there shall be an initial election period of 6 months
beginning on that date.
``(ii) Individual covered in future.--In the case of an
individual who is first enrolled under part B after November
1, 2002, there shall be an initial election period which is
the same as the initial enrollment period under section
1837(d).
``(C) Additional special election periods.--The Medicare
Benefits Administrator shall establish special election
periods--
``(i) in cases of individuals who have and involuntarily
lose prescription drug coverage described in subsection
(c)(2)(C);
``(ii) in cases described in section 1837(h) (relating to
errors in enrollment), in the same manner as such section
applies to part B; and
``(iii) in the case of an individual who meets such
exceptional conditions (including conditions recognized under
section 1851(d)(4)(D)) as the Administrator may provide.
``(D) One-time enrollment permitted for current part a only
beneficiaries.--In the case of an individual who as of
November 1, 2002--
``(i) is entitled to benefits under part A; and
``(ii) is not (and has not previously been) enrolled under
part B;
the individual shall be eligible to enroll in a prescription
drug plan under this part but only during the period
described in subparagraph (B)(i). If the individual enrolls
in such a plan, the individual may change such enrollment

[[Page H5335]]

under this part, but the individual may not enroll in a
Medicare+Choice plan under part C unless the individual
enrolls under part B. Nothing in this subparagraph shall be
construed as providing for coverage under a prescription drug
plan of benefits that are excluded because of the application
of section 1860B(f)(2)(B).
``(c) Guaranteed Issue; Community Rating; and
Nondiscrimination.--
``(1) Guaranteed issue.--
``(A) In general.--An eligible individual who is eligible
to elect qualified prescription drug coverage under a
prescription drug plan or Medicare+Choice plan at a time
during which elections are accepted under this part with
respect to the plan shall not be denied enrollment based on
any health status-related factor (described in section
2702(a)(1) of the Public Health Service Act) or any other
factor.
``(B) Medicare+choice limitations permitted.--The
provisions of paragraphs (2) and (3) (other than subparagraph
(C)(i), relating to default enrollment) of section 1851(g)
(relating to priority and limitation on termination of
election) shall apply to PDP sponsors under this subsection.
``(2) Community-rated premium.--
``(A) In general.--In the case of an individual who
maintains (as determined under subparagraph (C)) continuous
prescription drug coverage since first qualifying to elect
prescription drug coverage under this part, a PDP sponsor or
Medicare+Choice organization offering a prescription drug
plan or Medicare+Choice plan that provides qualified
prescription drug coverage and in which the individual is
enrolled may not deny, limit, or condition the coverage or
provision of covered prescription drug benefits or increase
the premium under the plan based on any health status-related
factor described in section 2702(a)(1) of the Public Health
Service Act or any other factor.
``(B) Late enrollment penalty.--In the case of an
individual who does not maintain such continuous prescription
drug coverage, a PDP sponsor or Medicare+Choice organization
may (notwithstanding any provision in this title) increase
the premium otherwise applicable or impose a pre-existing
condition exclusion with respect to qualified prescription
drug coverage in a manner that reflects additional actuarial
risk involved. Such a risk shall be established through an
appropriate actuarial opinion of the type described in
subparagraphs (A) through (C) of section 2103(c)(4).
``(C) Continuous prescription drug coverage.--An individual
is considered for purposes of this part to be maintaining
continuous prescription drug coverage on and after a date if
the individual establishes that there is no period of 63 days
or longer on and after such date (beginning not earlier than
January 1, 2003) during all of which the individual did not
have any of the following prescription drug coverage:
``(i) Coverage under prescription drug plan or
medicare+choice plan.--Qualified prescription drug coverage
under a prescription drug plan or under a Medicare+Choice
plan.
``(ii) Medicaid prescription drug coverage.--Prescription
drug coverage under a medicaid plan under title XIX,
including through the Program of All-inclusive Care for the
Elderly (PACE) under section 1934, through a social health
maintenance organization (referred to in section 4104(c) of
the Balanced Budget Act of 1997), or through a
Medicare+Choice project that demonstrates the application of
capitation payment rates for frail elderly medicare
beneficiaries through the use of a interdisciplinary team and
through the provision of primary care services to such
beneficiaries by means of such a team at the nursing facility
involved.
``(iii) Prescription drug coverage under group health
plan.--Any outpatient prescription drug coverage under a
group health plan, including a health benefits plan under the
Federal Employees Health Benefit Plan under chapter 89 of
title 5, United States Code, and a qualified retiree
prescription drug plan as defined in section 1860H(f)(1).
``(iv) Prescription drug coverage under certain medigap
policies.--Coverage under a medicare supplemental policy
under section 1882 that provides benefits for prescription
drugs (whether or not such coverage conforms to the standards
for packages of benefits under section 1882(p)(1)), but only
if the policy was in effect on January 1, 2003, and only
until the date such coverage is terminated.
``(v) State pharmaceutical assistance program.--Coverage of
prescription drugs under a State pharmaceutical assistance
program.
``(vi) Veterans' coverage of prescription drugs.--Coverage
of prescription drugs for veterans under chapter 17 of title
38, United States Code.
``(D) Certification.--For purposes of carrying out this
paragraph, the certifications of the type described in
sections 2701(e) of the Public Health Service Act and in
section 9801(e) of the Internal Revenue Code shall also
include a statement for the period of coverage of whether the
individual involved had prescription drug coverage described
in subparagraph (C).
``(E) Construction.--Nothing in this section shall be
construed as preventing the disenrollment of an individual
from a prescription drug plan or a Medicare+Choice plan based
on the termination of an election described in section
1851(g)(3), including for non-payment of premiums or for
other reasons specified in subsection (d)(3), which takes
into account a grace period described in section
1851(g)(3)(B)(i).
``(3) Nondiscrimination.--A PDP sponsor offering a
prescription drug plan shall not establish a service area in
a manner that would discriminate based on health or economic
status of potential enrollees.
``(d) Effective Date of Elections.--
``(1) In general.--Except as provided in this section, the
Medicare Benefits Administrator shall provide that elections
under subsection (b) take effect at the same time as the
Secretary provides that similar elections under section
1851(e) take effect under section 1851(f).
``(2) No election effective before 2003.--In no case shall
any election take effect before January 1, 2003.
``(3) Termination.--The Medicare Benefits Administrator
shall provide for the termination of an election in the case
of--
``(A) termination of coverage under part B (other than the
case of an individual described in subsection (b)(2)(D)
(relating to part A only individuals)); and
``(B) termination of elections described in section
1851(g)(3) (including failure to pay required premiums).

``SEC. 1860B. REQUIREMENTS FOR QUALIFIED PRESCRIPTION DRUG
COVERAGE.

Any amount determined under subparagraph (B) that is not a
multiple of $25 shall be rounded to the nearest multiple of
$25.
``(4) Limitation on out-of-pocket expenditures by
beneficiary.--
``(A) In general.--Notwithstanding paragraph (3), the
coverage provides benefits without any cost-sharing after the
individual has incurred costs (as described in subparagraph
(C)) for covered outpatient drugs in a year equal to the
annual out-of-pocket limit specified in subparagraph (B).
``(B) Annual out-of-pocket limit.--For purposes of this
part, the `annual out-of-pocket limit' specified in this
subparagraph--
``(i) for 2003, is equal to $6,000; or
``(ii) for a subsequent year, is equal to the amount
specified in this subparagraph for the previous year,
increased by the annual percentage increase described in
paragraph (5) for the year involved.

[[Page H5336]]

``(5) Annual percentage increase.--For purposes of this
part, the annual percentage increase specified in this
paragraph for a year is equal to the annual percentage
increase in average per capita aggregate expenditures for
covered outpatient drugs in the United States for medicare
beneficiaries, as determined by the Medicare Benefits
Administrator for the 12-month period ending in July of the
previous year.
``(c) Alternative Coverage Requirements.--A prescription
drug plan or Medicare+Choice plan may provide a different
prescription drug benefit design from the standard coverage
described in subsection (b) so long as the following
requirements are met:
``(1) Assuring at least actuarially equivalent coverage.--
``(A) Assuring equivalent value of total coverage.--The
actuarial value of the total coverage (as determined under
subsection (e)) is at least equal to the actuarial value (as
so determined) of standard coverage.
``(B) Assuring equivalent unsubsidized value of coverage.--
The unsubsidized value of the coverage is at least equal to
the unsubsidized value of standard coverage. For purposes of
this subparagraph, the unsubsidized value of coverage is the
amount by which the actuarial value of the coverage (as
determined under subsection (e)) exceeds the actuarial value
of the reinsurance subsidy payments under section 1860H with
respect to such coverage.
``(C) Assuring standard payment for costs at initial
coverage limit.--The coverage is designed, based upon an
actuarially representative pattern of utilization (as
determined under subsection (e)), to provide for the payment,
with respect to costs incurred that are equal to the sum of
the deductible under subsection (b)(1) and the initial
coverage limit under subsection (b)(3), of an amount equal to
at least such initial coverage limit multiplied by the
percentage specified in subsection (b)(2).
``(2) Limitation on out-of-pocket expenditures by
beneficiaries.--The coverage provides the limitation on out-
of-pocket expenditures by beneficiaries described in
subsection (b)(4).
``(d) Access to Negotiated Prices.--Under qualified
prescription drug coverage offered by a PDP sponsor or a
Medicare+Choice organization, the sponsor or organization
shall provide beneficiaries with access to negotiated prices
(including applicable discounts) used for payment for covered
outpatient drugs, regardless of the fact that no benefits may
be payable under the coverage with respect to such drugs
because of the application of cost-sharing or an initial
coverage limit (described in subsection (b)(3)). Insofar as a
State elects to provide medical assistance under title XIX
for a drug based on the prices negotiated by a prescription
drug plan under this part, the requirements of section 1927
shall not apply to such drugs.
``(e) Actuarial Valuation; Determination of Annual
Percentage Increases.--
``(1) Processes.--For purposes of this section, the
Medicare Benefits Administrator shall establish processes and
methods--
``(A) for determining the actuarial valuation of
prescription drug coverage, including--
``(i) an actuarial valuation of standard coverage and of
the reinsurance subsidy payments under section 1860H;
``(ii) the use of generally accepted actuarial principles
and methodologies; and
``(iii) applying the same methodology for determinations of
alternative coverage under subsection (c) as is used with
respect to determinations of standard coverage under
subsection (b); and
``(B) for determining annual percentage increases described
in subsection (b)(5).
``(2) Use of outside actuaries.--Under the processes under
paragraph (1)(A), PDP sponsors and Medicare+Choice
organizations may use actuarial opinions certified by
independent, qualified actuaries to establish actuarial
values.
``(f) Covered Outpatient Drugs Defined.--
``(1) In general.--Except as provided in this subsection,
for purposes of this part, the term `covered outpatient drug'
means--
``(A) a drug that may be dispensed only upon a prescription
and that is described in subparagraph (A)(i) or (A)(ii) of
section 1927(k)(2); or
``(B) a biological product described in clauses (i) through
(iii) of subparagraph (B) of such section or insulin
described in subparagraph (C) of such section;

and such term includes any use of a covered outpatient drug
for a medically accepted indication (as defined in section
1927(k)(6)).
``(2) Exclusions.--
``(A) In general.--Such term does not include drugs or
classes of drugs, or their medical uses, which may be
excluded from coverage or otherwise restricted under section
1927(d)(2), other than subparagraph (E) thereof (relating to
smoking cessation agents) and except to the extent otherwise
specifically provided by the Medicare Benefits Administrator
with respect to a drug in any of such classes''.
``(B) Avoidance of duplicate coverage.--A drug prescribed
for an individual that would otherwise be a covered
outpatient drug under this part shall not be so considered if
payment for such drug is available under part A or B (but
shall be so considered if such payment is not available
because benefits under part A or B have been exhausted),
without regard to whether the individual is entitled to
benefits under part A or enrolled under part B.
``(3) Application of formulary restrictions.--A drug
prescribed for an individual that would otherwise be a
covered outpatient drug under this part shall not be so
considered under a plan if the plan excludes the drug under a
formulary that meets the requirements of section 1860C(f)(2)
(including providing an appeal process).
``(4) Application of general exclusion provisions.--A
prescription drug plan or Medicare+Choice plan may exclude
from qualified prescription drug coverage any covered
outpatient drug--
``(A) for which payment would not be made if section
1862(a) applied to part D; or
``(B) which are not prescribed in accordance with the plan
or this part.

Such exclusions are determinations subject to reconsideration
and appeal pursuant to section 1860C(f).
``(5) Study on inclusion of drugs treating morbid
obesity.--The Medicare Policy Advisory Board shall provide
for a study on removing the exclusion under paragraph (2)(A)
for coverage of agents used for weight loss in the case of
morbidly obese individuals. The Board shall report to
Congress on the results of the study not later than March 1,
2002.

``SEC. 1860C. BENEFICIARY PROTECTIONS FOR QUALIFIED
PRESCRIPTION DRUG COVERAGE.

``(a) Guaranteed Issue Community-Related Premiums and
Nondiscrimination.--For provisions requiring guaranteed
issue, community-rated premiums, and nondiscrimination, see
sections 1860A(c)(1), 1860A(c)(2), and 1860F(b).
``(b) Dissemination of Information.--
``(1) General information.--A PDP sponsor shall disclose,
in a clear, accurate, and standardized form to each enrollee
with a prescription drug plan offered by the sponsor under
this part at the time of enrollment and at least annually
thereafter, the information described in section 1852(c)(1)
relating to such plan. Such information includes the
following:
``(A) Access to covered outpatient drugs, including access
through pharmacy networks.
``(B) How any formulary used by the sponsor functions.
``(C) Co-payments and deductible requirements.
``(D) Grievance and appeals procedures.
``(2) Disclosure upon request of general coverage,
utilization, and grievance information.--Upon request of an
individual eligible to enroll under a prescription drug plan,
the PDP sponsor shall provide the information described in
section 1852(c)(2) (other than subparagraph (D)) to such
individual.
``(3) Response to beneficiary questions.--Each PDP sponsor
offering a prescription drug plan shall have a mechanism for
providing specific information to enrollees upon request. The
sponsor shall make available, through an Internet website and
in writing upon request, information on specific changes in
its formulary.
``(4) Claims information.--Each PDP sponsor offering a
prescription drug plan must furnish to enrolled individuals
in a form easily understandable to such individuals an
explanation of benefits (in accordance with section 1806(a)
or in a comparable manner) and a notice of the benefits in
relation to initial coverage limit and annual out-of-pocket
limit for the current year, whenever prescription drug
benefits are provided under this part (except that such
notice need not be provided more often than monthly).
``(c) Access to Covered Benefits.--
``(1) Assuring pharmacy access.--The PDP sponsor of the
prescription drug plan shall secure the participation of
sufficient numbers of pharmacies (which may include mail
order pharmacies) to ensure convenient access (including
adequate emergency access) for enrolled beneficiaries, in
accordance with standards established under section 1860D(e)
that ensure such convenient access. Nothing in this paragraph
shall be construed as requiring the participation of (or
permitting the exclusion of) all pharmacies in any area under
a plan.
``(2) Access to negotiated prices for prescription drugs.--
The PDP sponsor of a prescription drug plan shall issue such
a card that may be used by an enrolled beneficiary to assure
access to negotiated prices under section 1860B(d) for the
purchase of prescription drugs for which coverage is not
otherwise provided under the prescription drug plan.
``(3) Requirements on development and application of
formularies.--Insofar as a PDP sponsor of a prescription drug
plan uses a formulary, the following requirements must be
met:
``(A) Formulary committee.--The sponsor must establish a
pharmaceutical and therapeutic committee that develops the
formulary. Such committee shall include at least one
physician and at least one pharmacist.
``(B) Inclusion of drugs in all therapeutic categories.--
The formulary must include drugs within all therapeutic
categories and classes of covered outpatient drugs (although
not necessarily for all drugs within such categories and
classes).
``(C) Appeals and exceptions to application.--The PDP
sponsor must have, as part of the appeals process under
subsection (f)(2), a process for appeals for denials of
coverage based on such application of the formulary.
``(d) Cost and Utilization Management; Quality Assurance;
Medication Therapy Management Program.--
``(1) In general.--The PDP sponsor shall have in place--
``(A) an effective cost and drug utilization management
program, including appropriate incentives to use generic
drugs, when appropriate;
``(B) quality assurance measures and systems to reduce
medical errors and adverse drug interactions, including a
medication therapy management program described in paragraph
(2); and
``(C) a program to control fraud, abuse, and waste.
``(2) Medication therapy management program.--
``(A) In general.--A medication therapy management program
described in this paragraph is a program of drug therapy
management and medication administration that is designed to
assure that covered outpatient drugs under the prescription
drug plan are appropriately used to achieve therapeutic goals
and reduce

[[Page H5337]]

the risk of adverse events, including adverse drug
interactions.
``(B) Elements.--Such program may include--
``(i) enhanced beneficiary understanding of such
appropriate use through beneficiary education, counseling,
and other appropriate means; and
``(ii) increased beneficiary adherence with prescription
medication regimens through medication refill reminders,
special packaging, and other appropriate means.
``(C) Development of program in cooperation with licensed
pharmacists.--The program shall be developed in cooperation
with licensed pharmacists and physicians.
``(D) Considerations in pharmacy fees.--The PDP sponsor of
a prescription drug program shall take into account, in
establishing fees for pharmacists and others providing
services under the medication therapy management program, the
resources and time used in implementing the program.
``(3) Treatment of accreditation.--Section 1852(e)(4)
(relating to treatment of accreditation) shall apply to
prescription drug plans under this part with respect to the
following requirements, in the same manner as they apply to
Medicare+Choice plans under part C with respect to the
requirements described in a clause of section 1852(e)(4)(B):
``(A) Paragraph (1) (including quality assurance),
including medication therapy management program under
paragraph (2).
``(B) Subsection (c)(1) (relating to access to covered
benefits).
``(C) Subsection (g) (relating to confidentiality and
accuracy of enrollee records).
``(4) Public disclosure of pharmaceutical prices for
generic equivalent drugs.--Each PDP sponsor shall provide
that each pharmacy or other dispenser that arranges for the
dispensing of a covered outpatient drug shall inform the
beneficiary at the time of purchase of the drug of any
differential between the price of the prescribed drug to the
enrollee and the price of the lowest cost generic drug that
is therapeutically and pharmaceutically equivalent and
bioequivalent.
``(e) Grievance Mechanism.--Each PDP sponsor shall provide
meaningful procedures for hearing and resolving grievances
between the organization (including any entity or individual
through which the sponsor provides covered benefits) and
enrollees with prescription drug plans of the sponsor under
this part in accordance with section 1852(f).
``(f) Coverage Determinations, Reconsiderations, and
Appeals.--
``(1) In general.--A PDP sponsor shall meet the
requirements of section 1852(g) with respect to covered
benefits under the prescription drug plan it offers under
this part in the same manner as such requirements apply to a
Medicare+Choice organization with respect to benefits it
offers under a Medicare+Choice plan under part C.
``(2) Appeals of formulary determinations.--Under the
appeals process under paragraph (1) an individual who is
enrolled in a prescription drug plan offered by a PDP sponsor
may appeal to obtain coverage for a covered outpatient drug
that is not on the formulary of the sponsor (established
under subsection (c)) if the prescribing physician determines
that the therapeutically similar drug that is on the
formulary is not as effective for the enrollee or has
significant adverse effects for the enrollee.
``(g) Confidentiality and Accuracy of Enrollee Records.--A
PDP sponsor shall meet the requirements of section 1852(h)
with respect to enrollees under this part in the same manner
as such requirements apply to a Medicare+Choice organization
with respect to enrollees under part C.

``SEC. 1860D. REQUIREMENTS FOR PRESCRIPTION DRUG PLAN (PDP)
SPONSORS; CONTRACTS; ESTABLISHMENT OF
STANDARDS.

``(a) General Requirements.--Each PDP sponsor of a
prescription drug plan shall meet the following requirements:
``(1) Licensure.--Subject to subsection (c), the sponsor is
organized and licensed under State law as a risk-bearing
entity eligible to offer health insurance or health benefits
coverage in each State in which it offers a prescription drug
plan.
``(2) Assumption of full financial risk.--
``(A) In general.--Subject to subparagraph (B) and section
1860E(d)(2), the entity assumes full financial risk on a
prospective basis for qualified prescription drug coverage
that it offers under a prescription drug plan and that is not
covered under reinsurance under section 1860H.
``(B) Reinsurance permitted.--The entity may obtain
insurance or make other arrangements for the cost of coverage
provided to any enrolled member under this part.
``(3) Solvency for unlicensed sponsors.--In the case of a
sponsor that is not described in paragraph (1), the sponsor
shall meet solvency standards established by the Medicare
Benefits Administrator under subsection (d).
``(b) Contract Requirements.--
``(1) In general.--The Medicare Benefits Administrator
shall not permit the election under section 1860A of a
prescription drug plan offered by a PDP sponsor under this
part, and the sponsor shall not be eligible for payments
under section 1860G or 1860H, unless the Administrator has
entered into a contract under this subsection with the
sponsor with respect to the offering of such plan. Such a
contract with a sponsor may cover more than 1 prescription
drug plan. Such contract shall provide that the sponsor
agrees to comply with the applicable requirements and
standards of this part and the terms and conditions of
payment as provided for in this part.
``(2) Negotiation regarding terms and conditions.--The
Medicare Benefits Administrator shall have the same authority
to negotiate the terms and conditions of prescription drug
plans under this part as the Director of the Office of
Personnel Management has with respect to health benefits
plans under chapter 89 of title 5, United States Code. In
negotiating the terms and conditions regarding premiums for
which information is submitted under section 1860F(a)(2), the
Administrator shall take into account the reinsurance subsidy
payments under section 1860H and the adjusted community rate
(as defined in section 1854(f)(3)) for the benefits covered.
``(3) Incorporation of certain medicare+choice contract
requirements.--The following provisions of section 1857 shall
apply, subject to subsection (c)(5), to contracts under this
section in the same manner as they apply to contracts under
section 1857(a):
``(A) Minimum enrollment.--Paragraphs (1) and (3) of
section 1857(b).
``(B) Contract period and effectiveness.--Paragraphs (1)
through (3) and (5) of section 1857(c).
``(C) Protections against fraud and beneficiary
protections.--Section 1857(d).
``(D) Additional contract terms.--Section 1857(e); except
that in applying section 1857(e)(2) under this part--
``(i) such section shall be applied separately to costs
relating to this part (from costs under part C);
``(ii) in no case shall the amount of the fee established
under this subparagraph for a plan exceed 20 percent of the
maximum amount of the fee that may be established under
subparagraph (B) of such section; and
``(iii) no fees shall be applied under this subparagraph
with respect to Medicare+Choice plans.
``(E) Intermediate sanctions.--Section 1857(g).
``(F) Procedures for termination.--Section 1857(h).
``(4) Rules of application for intermediate sanctions.--In
applying paragraph (3)(E)--
``(A) the reference in section 1857(g)(1)(B) to section
1854 is deemed a reference to this part; and
``(B) the reference in section 1857(g)(1)(F) to section
1852(k)(2)(A)(ii) shall not be applied.
``(c) Waiver of Certain Requirements to Expand Choice.--
``(1) In general.--In the case of an entity that seeks to
offer a prescription drug plan in a State, the Medicare
Benefits Administrator shall waive the requirement of
subsection (a)(1) that the entity be licensed in that State
if the Administrator determines, based on the application and
other evidence presented to the Administrator, that any of
the grounds for approval of the application described in
paragraph (2) has been met.
``(2) Grounds for approval.--The grounds for approval under
this paragraph are the grounds for approval described in
subparagraph (B), (C), and (D) of section 1855(a)(2), and
also include the application by a State of any grounds other
than those required under Federal law.
``(3) Application of waiver procedures.--With respect to an
application for a waiver (or a waiver granted) under this
subsection, the provisions of subparagraphs (E), (F), and (G)
of section 1855(a)(2) shall apply.
``(4) Licensure does not substitute for or constitute
certification.--The fact that an entity is licensed in
accordance with subsection (a)(1) does not deem the entity to
meet other requirements imposed under this part for a PDP
sponsor.
``(5) References to certain provisions.--For purposes of
this subsection, in applying provisions of section 1855(a)(2)
under this subsection to prescription drug plans and PDP
sponsors--
``(A) any reference to a waiver application under section
1855 shall be treated as a reference to a waiver application
under paragraph (1); and
``(B) any reference to solvency standards shall be treated
as a reference to solvency standards established under
subsection (d).
``(d) Solvency Standards for Non-Licensed Sponsors.--
``(1) Establishment.--The Medicare Benefits Administrator
shall establish, by not later than October 1, 2001, financial
solvency and capital adequacy standards that an entity that
does not meet the requirements of subsection (a)(1) must meet
to qualify as a PDP sponsor under this part.
``(2) Compliance with standards.--Each PDP sponsor that is
not licensed by a State under subsection (a)(1) and for which
a waiver application has been approved under subsection (c)
shall meet solvency and capital adequacy standards
established under paragraph (1). The Medicare Benefits
Administrator shall establish certification procedures for
such PDP sponsors with respect to such solvency standards in
the manner described in section 1855(c)(2).
``(e) Other Standards.--The Medicare Benefits Administrator
shall establish by regulation other standards (not described
in subsection (d)) for PDP sponsors and plans consistent
with, and to carry out, this part. The Administrator shall
publish such regulations by October 1, 2001. In order to
carry out this requirement in a timely manner, the
Administrator may promulgate regulations that take effect on
an interim basis, after notice and pending opportunity for
public comment.
``(f) Relation to State Laws.--
``(1) In general.--The standards established under this
section shall supersede any State law or regulation
(including standards described in paragraph (2)) with respect
to prescription drug

[[Page H5338]]

plans which are offered by PDP sponsors under this part to
the extent such law or regulation is inconsistent with such
standards.
``(2) Standards specifically superseded.--State standards
relating to the following are superseded under this
subsection:
``(A) Benefit requirements.
``(B) Requirements relating to inclusion or treatment of
providers.
``(C) Coverage determinations (including related appeals
and grievance processes).
``(D) Establishment and regulation of premiums.
``(3) Prohibition of state imposition of premium taxes.--No
State may impose a premium tax or similar tax with respect to
premiums paid to PDP sponsors for prescription drug plans
under this part, or with respect to any payments made to such
a sponsor by the Medicare Benefits Administrator under this
part.

``SEC. 1860E. PROCESS FOR BENEFICIARIES TO SELECT QUALIFIED
PRESCRIPTION DRUG COVERAGE.

``(a) In General.--The Medicare Benefits Administrator,
through the Office of Beneficiary Assistance, shall
establish, based upon and consistent with the procedures used
under part C (including section 1851), a process for the
selection of the prescription drug plan or Medicare+Choice
plan which offer qualified prescription drug coverage through
which eligible individuals elect qualified prescription drug
coverage under this part.
``(b) Elements.--Such process shall include the following:
``(1) Annual, coordinated election periods, in which such
individuals can change the qualifying plans through which
they obtain coverage, in accordance with section 1860A(b)(2).
``(2) Active dissemination of information to promote an
informed selection among qualifying plans based upon price,
quality, and other features, in the manner described in (and
in coordination with) section 1851(d), including the
provision of annual comparative information, maintenance of a
toll-free hotline, and the use of non-federal entities.
``(3) Coordination of elections through filing with a
Medicare+Choice organization or a PDP sponsor, in the manner
described in (and in coordination with) section 1851(c)(2).
``(c) Medicare+Choice Enrollee In Plan Offering
Prescription Drug Coverage May Only Obtain Benefits Through
the Plan.--An individual who is enrolled under a
Medicare+Choice plan that offers qualified prescription drug
coverage may only elect to receive qualified prescription
drug coverage under this part through such plan.
``(d) Assuring Access to a Choice of Qualified Prescription
Drug Coverage.--
``(1) Choice of at least 2 plans in each area.--
``(A) In general.--The Medicare Benefits Administrator
shall assure that each individual who is enrolled under part
B and who is residing in an area has available, consistent
with subparagraph (B), a choice of enrollment in at least 2
qualifying plans (as defined in paragraph (5)) in the area in
which the individual resides, at least one of which is a
prescription drug plan.
``(B) Requirement for different plan sponsors.--The
requirement in subparagraph (A) is not satisfied with respect
to an area if only one PDP sponsor or Medicare+Choice
organization offers all the qualifying plans in the area.
``(2) Guaranteeing access to coverage.--In order to assure
access under paragraph (1) and consistent with paragraph (3),
the Medicare Benefits Administrator may provide financial
incentives (including partial underwriting of risk) for a PDP
sponsor to expand the service area under an existing
prescription drug plan to adjoining or additional areas or to
establish such a plan (including offering such a plan on a
regional or nationwide basis), but only so long as (and to
the extent) necessary to assure the access guaranteed under
paragraph (1).
``(3) Limitation on authority.--In exercising authority
under this subsection, the Medicare Benefits Administrator--
``(A) shall not provide for the full underwriting of
financial risk for any PDP sponsor;
``(B) shall not provide for any underwriting of financial
risk for a public PDP sponsor with respect to the offering of
a nationwide prescription drug plan; and
``(C) shall seek to maximize the assumption of financial
risk by PDP sponsors or Medicare+Choice organizations.
``(4) Reports.--The Medicare Benefits Administrator shall,
in each annual report to Congress under section 1807(f),
include information on the exercise of authority under this
subsection. The Administrator also shall include such
recommendations as may be appropriate to minimize the
exercise of such authority, including minimizing the
assumption of financial risk.
``(5) Qualifying plan defined.--For purposes of this
subsection, the term `qualifying plan' means a prescription
drug plan or a Medicare+Choice plan that includes qualified
prescription drug coverage.

``SEC. 1860F. PREMIUMS.

``(a) Submission of Premiums and Related Information.--
``(1) In general.--Each PDP sponsor shall submit to the
Medicare Benefits Administrator information of the type
described in paragraph (2) in the same manner as information
is submitted by a Medicare+Choice organization under section
1854(a)(1).
``(2) Type of information.--The information described in
this paragraph is the following:
``(A) Information on the qualified prescription drug
coverage to be provided.
``(B) Information on the actuarial value of the coverage.
``(C) Information on the monthly premium to be charged for
the coverage, including an actuarial certification of--
``(i) the actuarial basis for such premium;
``(ii) the portion of such premium attributable to benefits
in excess of standard coverage; and
``(iii) the reduction in such premium resulting from the
reinsurance subsidy payments provided under section 1860H.
``(D) Such other information as the Medicare Benefits
Administrator may require to carry out this part.
``(3) Review.--The Medicare Benefits Administrator shall
review the information filed under paragraph (2) for the
purpose of conducting negotiations under section 1860D(b)(2).
``(b) Uniform Premium.--The premium for a prescription drug
plan charged under this section may not vary among
individuals enrolled in the plan in the same service area,
except as is permitted under section 1860A(c)(2)(B) (relating
to late enrollment penalties).
``(c) Terms and Conditions for Imposing Premiums.--The
provisions of section 1854(d) shall apply under this part in
the same manner as they apply under part C, and, for this
purpose, the reference in such section to section
1851(g)(3)(B)(i) is deemed a reference to section
1860A(d)(3)(B) (relating to failure to pay premiums required
under this part).
``(d) Acceptance of Reference Premium as Full Premium if No
Standard (or Equivalent) Coverage in an Area.--
``(1) In general.--If there is no standard prescription
drug coverage (as defined in paragraph (2)) offered in an
area, in the case of an individual who is eligible for a
premium subsidy under section 1860G and resides in the area,
the PDP sponsor of any prescription drug plan offered in the
area (and any Medicare+Choice organization that offers
qualified prescription drug coverage in the area) shall
accept the reference premium under section 1860G(b)(2) as
payment in full for the premium charge for qualified
prescription drug coverage.
``(2) Standard prescription drug coverage defined.--For
purposes of this subsection, the term `standard prescription
drug coverage' means qualified prescription drug coverage
that is standard coverage or that has an actuarial value
equivalent to the actuarial value for standard coverage.

``SEC. 1860G. PREMIUM AND COST-SHARING SUBSIDIES FOR LOW-
INCOME INDIVIDUALS.

``(a) In General.--
``(1) Full premium subsidy and reduction of cost-sharing
for individuals with income below 135 percent of federal
poverty level.--In the case of a subsidy eligible individual
(as defined in paragraph (3)) who is determined to have
income that does not exceed 135 percent of the Federal
poverty level, the individual is entitled under this
section--
``(A) to a premium subsidy equal to 100 percent of the
amount described in subsection (b)(1); and
``(B) subject to subsection (c), to the substitution for
the beneficiary cost-sharing described in paragraphs (1) and
(2) of section 1860B(b) (up to the initial coverage limit
specified in paragraph (3) of such section) of amounts that
are nominal.
``(2) Sliding scale premium subsidy for individuals with
income above 135, but below 150 percent, of federal poverty
level.--In the case of a subsidy eligible individual who is
determined to have income that exceeds 135 percent, but does
not exceed 150 percent, of the Federal poverty level, the
individual is entitled under this section to a premium
subsidy determined on a linear sliding scale ranging from 100
percent of the amount described in subsection (b)(1) for
individuals with incomes at 135 percent of such level to 0
percent of such amount for individuals with incomes at 150
percent of such level.
``(3) Determination of eligibility.--
``(A) Subsidy eligible individual defined.--For purposes of
this section, subject to subparagraph (D), the term `subsidy
eligible individual' means an individual who--
``(i) is eligible to elect, and has elected, to obtain
qualified prescription drug coverage under this part;
``(ii) has income below 150 percent of the Federal poverty
line; and
``(iii) meets the resources requirement described in
section 1905(p)(1)(C).
``(B) Determinations.--The determination of whether an
individual residing in a State is a subsidy eligible
individual and the amount of such individual's income shall
be determined under the State medicaid plan for the State
under section 1935(a). In the case of a State that does not
operate such a medicaid plan (either under title XIX or under
a statewide waiver granted under section 1115), such
determination shall be made under arrangements made by the
Medicare Benefits Administrator.
``(C) Income determinations.--For purposes of applying this
section--
``(i) income shall be determined in the manner described in
section 1905(p)(1)(B); and
``(ii) the term `Federal poverty line' means the official
poverty line (as defined by the Office of Management and
Budget, and revised annually in accordance with section
673(2) of the Omnibus Budget Reconciliation Act of 1981)
applicable to a family of the size involved.
``(D) Treatment of territorial residents.--In the case of
an individual who is not a resident of the 50 States or the
District of Columbia, the individual is not eligible to be a
subsidy eligible individual but may be eligible for financial
assistance with prescription drug expenses under section
1935(e).
``(b) Premium Subsidy Amount.--
``(1) In general.--The premium subsidy amount described in
this subsection for an individual residing in an area is the
reference premium (as defined in paragraph (2)) for qualified

[[Page H5339]]

prescription drug coverage offered by the prescription drug
plan or the Medicare+Choice plan in which the individual is
enrolled.
``(2) Reference premium defined.--For purposes of this
subsection, the term `reference premium' means, with respect
to qualified prescription drug coverage offered under--
``(A) a prescription drug plan that--
``(i) provides standard coverage (or alternative
prescription drug coverage the actuarial value is equivalent
to that of standard coverage), the premium imposed for
enrollment under the plan under this part (determined without
regard to any subsidy under this section or any late
enrollment penalty under section 1860A(c)(2)(B)); or
``(ii) provides alternative prescription drug coverage the
actuarial value of which is greater than that of standard
coverage, the premium described in clause (i) multiplied by
the ratio of (I) the actuarial value of standard coverage, to
(II) the actuarial value of the alternative coverage; or
``(B) a Medicare+Choice plan, the standard premium computed
under section 1851(j)(5)(A)(iii), determined without regard
to any reduction effected under section 1851(j)(5)(B).
``(c) Rules in Applying Cost-Sharing Subsidies.--
``(1) In general.--In applying subsection (a)(1)(B)--
``(A) the maximum amount of subsidy that may be provided
with respect to an enrollee for a year may not exceed 95
percent of the maximum cost-sharing described in such
subsection that may be incurred for standard coverage;
``(B) the Medicare Benefits Administrator shall determine
what is `nominal' taking into account the rules applied under
section 1916(a)(3); and
``(C) nothing in this part shall be construed as preventing
a plan or provider from waiving or reducing the amount of
cost-sharing otherwise applicable.
``(2) Limitation on charges.--In the case of an individual
receiving cost-sharing subsidies under subsection (a)(1)(B),
the PDP sponsor may not charge more than a nominal amount in
cases in which the cost-sharing subsidy is provided under
such subsection.
``(d) Administration of Subsidy Program.--The Medicare
Benefits Administrator shall provide a process whereby, in
the case of an individual who is determined to be a subsidy
eligible individual and who is enrolled in prescription drug
plan or is enrolled in a Medicare+Choice plan under which
qualified prescription drug coverage is provided--
``(1) the Administrator provides for a notification of the
PDP sponsor or Medicare+Choice organization involved that the
individual is eligible for a subsidy and the amount of the
subsidy under subsection (a);
``(2) the sponsor or organization involved reduces the
premiums or cost-sharing otherwise imposed by the amount of
the applicable subsidy and submits to the Administrator
information on the amount of such reduction; and
``(3) the Administrator periodically and on a timely basis
reimburses the sponsor or organization for the amount of such
reductions.

``SEC. 1860H. SUBSIDIES FOR ALL MEDICARE BENEFICIARIES
THROUGH REINSURANCE FOR QUALIFIED PRESCRIPTION
DRUG COVERAGE.

This section constitutes budget authority in advance of
appropriations Acts and represents the obligation of the
Administrator to provide for the payment of amounts provided
under this section.
``(b) Qualifying Entity Defined.--For purposes of this
section, the term `qualifying entity' means any of the
following that has entered into an agreement with the
Administrator to provide the Administrator with such
information as may be required to carry out this section:
``(1) A PDP sponsor offering a prescription drug plan under
this part.
``(2) A Medicare+Choice organization that provides
qualified prescription drug coverage under a Medicare+Choice
plan under part C.
``(3) The sponsor of a qualified retiree prescription drug
plan (as defined in subsection (f)).
``(c) Reinsurance Payment Amount.--
``(1) In general.--Subject to subsection (d)(2) and
paragraph (4), the reinsurance payment amount under this
subsection for a qualifying covered individual (as defined in
subsection (g)(1)) for a coverage year (as defined in
subsection (g)(2)) is equal to the sum of the following:
``(A) For the portion of the individual's gross covered
prescription drug costs (as defined in paragraph (3)) for the
year that exceeds $1,250, but does not exceed $1,350, an
amount equal to 30 percent of the allowable costs (as defined
in paragraph (2)) attributable to such gross covered
prescription drug costs.
``(B) For the portion of the individual's gross covered
prescription drug costs for the year that exceeds $1,350, but
does not exceed $1,450, an amount equal to 50 percent of the
allowable costs attributable to such gross covered
prescription drug costs.
``(C) For the portion of the individual's gross covered
prescription drug costs for the year that exceeds $1,450, but
does not exceed $1,550, an amount equal to 70 percent of the
allowable costs attributable to such gross covered
prescription drug costs.
``(D) For the portion of the individual's gross covered
prescription drug costs for the year that exceeds $1,550, but
does not exceed $2,350, an amount equal to 90 percent of the
allowable costs attributable to such gross covered
prescription drug costs.
``(E) For the portion of the individual's gross covered
prescription drug costs for the year that exceeds $7,050, an
amount equal to 90 percent of the allowable costs
attributable to such gross covered prescription drug costs.
``(2) Allowable costs.--For purposes of this section, the
term `allowable costs' means, with respect to gross covered
prescription drug costs under a plan described in subsection
(b) offered by a qualifying entity, the part of such costs
that are actually paid under the plan, but in no case more
than the part of such costs that would have been paid under
the plan if the prescription drug coverage under the plan
were standard coverage.
``(3) Gross covered prescription drug costs.--For purposes
of this section, the term `gross covered prescription drug
costs' means, with respect to an enrollee with a qualifying
entity under a plan described in subsection (b) during a
coverage year, the costs incurred under the plan for covered
prescription drugs dispensed during the year, including costs
relating to the deductible, whether paid by the enrollee or
under the plan, regardless of whether the coverage under the
plan exceeds standard coverage and regardless of when the
payment for such drugs is made.
``(4) Indexing dollar amounts.--
``(A) Amounts for 2003.--The dollar amounts applied under
paragraph (1) for 2003 shall be the dollar amounts specified
in such paragraph.
``(B) For 2004.--The dollar amounts applied under paragraph
(1) for 2004 shall be the dollar amounts specified in such
paragraph increased by the annual percentage increase
described in section 1860B(b)(5) for 2004.
``(C) For subsequent years.--The dollar amounts applied
under paragraph (1) for a year after 2004 shall be the
amounts (under this paragraph) applied under paragraph (1)
for the preceding year increased by the annual percentage
increase described in section 1860B(b)(5) for the year
involved.
``(D) Rounding.--Any amount, determined under the preceding
provisions of this paragraph for a year, which is not a
multiple of $5 shall be rounded to the nearest multiple of
$5.
``(d) Adjustment of Payments.--
``(1) In general.--The Medicare Benefits Administrator
shall estimate--
``(A) the total payments to be made (without regard to this
subsection) during a year under this section; and
``(B) the total payments to be made by qualifying entities
for standard coverage under plans described in subsection (b)
during the year.
``(2) Adjustment of payments.--The Administrator shall
proportionally adjust the payments made under this section
for a coverage year in such manner so that the total of the
payments made for the year under this section is equal to 35
percent of the total payments described in paragraph (1)(B)
during the year.
``(e) Payment Methods.--
``(1) In general.--Payments under this section shall be
based on such a method as the Medicare Benefits Administrator
determines. The Administrator may establish a payment method
by which interim payments of amounts under this section are
made during a year based on the Administrator's best estimate
of amounts that will be payable after obtaining all of the
information.
``(2) Source of payments.--Payments under this section
shall be made from the Medicare Prescription Drug Account.
``(f) Qualified Retiree Prescription Drug Plan Defined.--
``(1) In general.--For purposes of this section, the term
`qualified retiree prescription drug plan' means employment-
based retiree health coverage (as defined in paragraph
(3)(A)) if, with respect to an individual enrolled (or
eligible to be enrolled) under this part who is covered under
the plan, the following requirements are met:
``(A) Assurance.--The sponsor of the plan shall annually
attest, and provide such assurances as the Medicare Benefits
Administrator may require, that the coverage meets the
requirements for qualified prescription drug coverage.
``(B) Audits.--The sponsor (and the plan) shall maintain,
and afford the Medicare Benefits Administrator access to,
such records as the Administrator may require for purposes of
audits and other oversight activities necessary to

[[Page H5340]]

ensure the adequacy of prescription drug coverage, the
accuracy of payments made, and such other matters as may be
appropriate.
``(C) Provision of certification of prescription drug
coverage.--The sponsor of the plan shall provide for issuance
of certifications of the type described in section
1860A(c)(2)(D).
``(D) Other requirements.--The sponsor of the plan shall
comply with such other requirements as the Medicare Benefits
Administrator finds necessary to administer the program under
this section.
``(2) Limitation on benefit eligibility.--No payment shall
be provided under this section with respect to an individual
who is enrolled under a qualified retiree prescription drug
plan unless the individual is a medicare primary individual
who--
``(A) is covered under the plan; and
``(B) is eligible to obtain qualified prescription drug
coverage under section 1860A but did not elect such coverage
under this part (either through a prescription drug plan or
through a Medicare+Choice plan).
``(3) Definitions.--As used in this section:
``(A) Employment-based retiree health coverage.--The term
`employment-based retiree health coverage' means health
insurance or other coverage of health care costs for medicare
primary individuals (or for such individuals and their
spouses and dependents) based on their status as former
employees or labor union members.
``(B) Employer.--The term `employer' has the meaning given
such term by section 3(5) of the Employee Retirement Income
Security Act of 1974 (except that such term shall include
only employers of two or more employees).
``(C) Sponsor.--The term `sponsor' means a plan sponsor, as
defined in section 3(16)(B) of the Employee Retirement Income
Security Act of 1974.
``(D) Medicare primary individual.--The term `medicare
primary individual' means, with respect to a plan, an
individual who is covered under the plan and with respect to
whom the plan is not a primary plan (as defined in section
1862(b)(2)(A)).
``(g) General Definitions.--For purposes of this section:
``(1) Qualifying covered individual.--The term `qualifying
covered individual' means an individual who--
``(A) is enrolled with a prescription drug plan under this
part;
``(B) is enrolled with a Medicare+Choice plan that provides
qualified prescription drug coverage under part C; or
``(C) is covered as a medicare primary individual under a
qualified retiree prescription drug plan.
``(2) Coverage year.--The term `coverage year' means a
calendar year in which covered outpatient drugs are dispensed
if a claim for payment is made under the plan for such drugs,
regardless of when the claim is paid.

``SEC. 1860I. MEDICARE PRESCRIPTION DRUG ACCOUNT IN FEDERAL
SUPPLEMENTARY MEDICAL INSURANCE TRUST FUND.

``(a) In General.--There is created within the Federal
Supplementary Medical Insurance Trust Fund established by
section 1841 an account to be known as the `Medicare
Prescription Drug Account' (in this section referred to as
the `Account'). The Account shall consist of such gifts and
bequests as may be made as provided in section 201(i)(1), and
such amounts as may be deposited in, or appropriated to, such
fund as provided in this part. Funds provided under this part
to the Account shall be kept separate from all other funds
within the Federal Supplementary Medical Insurance Trust
Fund.
``(b) Payments From Account.--
``(1) In general.--The Managing Trustee shall pay from time
to time from the Account such amounts as the Medicare
Benefits Administrator certifies are necessary to make--
``(A) payments under section 1860G (relating to low-income
subsidy payments);
``(B) payments under section 1860H (relating to reinsurance
subsidy payments); and
``(C) payments with respect to administrative expenses
under this part in accordance with section 201(g).
``(2) Transfers to medicaid account for increased
administrative costs.--The Managing Trustee shall transfer
from time to time from the Account to the Grants to States
for Medicaid account amounts the Secretary certifies are
attributable to increases in payment resulting from the
application of a higher Federal matching percentage under
section 1935(b).
``(3) Treatment in relation to part b premium.--Amounts
payable from the Account shall not be taken into account in
computing actuarial rates or premium amounts under section
1839.
``(c) Deposits Into Account.--
``(1) Medicaid transfer.--There is hereby transferred to
the Account, from amounts appropriated for Grants to States
for Medicaid, amounts equivalent to the aggregate amount of
the reductions in payments under section 1903(a)(1)
attributable to the application of section 1935(c).
``(2) Appropriations to cover government contributions.--
There are authorized to be appropriated from time to time,
out of any moneys in the Treasury not otherwise appropriated,
to the Account, an amount equivalent to the amount of
payments made from the Account under subsection (b), reduced
by the amount transferred to the Account under paragraph (1).

``SEC. 1860J. DEFINITIONS; TREATMENT OF REFERENCES TO
PROVISIONS IN PART C.

``(a) Definitions.--For purposes of this part:
``(1) Covered outpatient drugs.--The term `covered
outpatient drugs' is defined in section 1860B(f).
``(2) Initial coverage limit.--The term `initial coverage
limit' means the such limit as established under section
1860B(b)(3), or, in the case of coverage that is not standard
coverage, the comparable limit (if any) established under the
coverage.
``(3) Medicare prescription drug account.--The term
`Medicare Prescription Drug Account' means the Account in the
Federal Supplementary Medical Insurance Trust Fund created
under section 1860I(a).
``(4) PDP sponsor.--The term `PDP sponsor' means an entity
that is certified under this part as meeting the requirements
and standards of this part for such a sponsor.
``(5) Prescription drug plan.--The term `prescription drug
plan' means health benefits coverage that--
``(A) is offered under a policy, contract, or plan by a PDP
sponsor pursuant to, and in accordance with, a contract
between the Medicare Benefits Administrator and the sponsor
under section 1860D(b);
``(B) provides qualified prescription drug coverage; and
``(C) meets the applicable requirements of the section
1860C for a prescription drug plan.
``(6) Qualified prescription drug coverage.--The term
`qualified prescription drug coverage' is defined in section
1860B(a).
``(7) Standard coverage.--The term `standard coverage' is
defined in section 1860B(b).
``(b) Application of Medicare+Choice Provisions Under This
Part.--For purposes of applying provisions of part C under
this part with respect to a prescription drug plan and a PDP
sponsor, unless otherwise provided in this part such
provisions shall be applied as if--
``(1) any reference to a Medicare+Choice plan included a
reference to a prescription drug plan;
``(2) any reference to a provider-sponsored organization
included a reference to a PDP sponsor;
``(3) any reference to a contract under section 1857
included a reference to a contract under section 1860D(b);
and
``(4) any reference to part C included a reference to this
part.''.
(b) Conforming Amendments to Federal Supplementary Medical
Insurance Trust Fund.--Section 1841 of the Social Security
Act (42 U.S.C. 1395t) is amended--
(1) in the last sentence of subsection (a)--
(A) by striking ``and'' before ``such amounts'', and
(B) by inserting before the period the following: ``and
such amounts as may be deposited in, or appropriated to, the
Medicare Prescription Drug Account established by section
1860I''; and
(2) in subsection (g), by inserting after ``by this part,''
the following: ``the payments provided for under part D (in
which case the payments shall come from the Medicare
Prescription Drug Account in the Trust Fund),''.
(c) Additional Conforming Changes.--
(1) Conforming references to previous part d.--Any
reference in law (in effect before the date of the enactment
of this Act) to part D of title XVIII of the Social Security
Act is deemed a reference to part E of such title (as in
effect after such date).
(2) Secretarial submission of legislative proposal.--Not
later than 6 months after the date of the enactment of this
Act, the Secretary of Health and Human Services shall submit
to the appropriate committees of Congress a legislative
proposal providing for such technical and conforming
amendments in the law as are required by the provisions of
this subtitle.

SEC. 102. OFFERING OF QUALIFIED PRESCRIPTION DRUG COVERAGE
UNDER THE MEDICARE+CHOICE PROGRAM.

[[Page H5341]]

Medicare+Choice organization shall compute and publish the
following:
``(i) Separate prescription drug premium.--A premium for
prescription drug benefits that constitute qualified
prescription drug coverage that is separate from other
coverage under the plan.
``(ii) Portion of coverage attributable to standard
benefits.--The ratio of the actuarial value of standard
coverage to the actuarial value of the qualified prescription
drug coverage offered under the plan.
``(iii) Portion of premium attributable to standard
benefits.--A standard premium equal to the product of the
premium described in clause (i) and the ratio under clause
(ii).

SEC. 103. MEDICAID AMENDMENTS.

``special provisions relating to medicare prescription drug benefit

``Sec. 1935. (a) Requirement for Making Eligibility
Determinations for Low-Income Subsidies.--As a condition of
its State plan under this title under section 1902(a)(66) and
receipt of any Federal financial assistance under section
1903(a), a State shall--
``(1) make determinations of eligibility for premium and
cost-sharing subsidies under (and in accordance with) section
1860G;
``(2) inform the Administrator of the Medicare Benefits
Administration of such determinations in cases in which such
eligibility is established; and
``(3) otherwise provide such Administrator with such
information as may be required to carry out part D of title
XVIII (including section 1860G).
``(b) Payments for Additional Administrative Costs.--
``(1) In general.--The amounts expended by a State in
carrying out subsection (a) are, subject to paragraph (2),
expenditures reimbursable under the appropriate paragraph of
section 1903(a); except that, notwithstanding any other
provision of such section, the applicable Federal matching
rates with respect to such expenditures under such section
shall be increased as follows:
``(A) For expenditures attributable to costs incurred
during 2003, the otherwise applicable Federal matching rate
shall be increased by 20 percent of the percentage otherwise
payable (but for this subsection) by the State.
``(B) For expenditures attributable to costs incurred
during 2004, the otherwise applicable Federal matching rate
shall be increased by 40 percent of the percentage otherwise
payable (but for this subsection) by the State.
``(C) For expenditures attributable to costs incurred
during 2005, the otherwise applicable Federal matching rate
shall be increased by 60 percent of the percentage otherwise
payable (but for this subsection) by the State.
``(D) For expenditures attributable to costs incurred
during 2006, the otherwise applicable Federal matching rate
shall be increased by 80 percent of the percentage otherwise
payable (but for this subsection) by the State.
``(E) For expenditures attributable to costs incurred after
2006, the otherwise applicable Federal matching rate shall be
increased to 100 percent.
``(2) Coordination.--The State shall provide the Secretary
with such information as may be necessary to properly
allocate administrative expenditures described in paragraph
(1) that may otherwise be made for similar eligibility
determinations.''.
(b) Phased-In Federal Assumption of Medicaid Responsibility
for Premium and Cost-Sharing Subsidies for Dually Eligible
Individuals.--
(1) In general.--Section 1903(a)(1) of the Social Security
Act (42 U.S.C. 1396b(a)(1)) is amended by inserting before
the semicolon the following: ``, reduced by the amount
computed under section 1935(c)(1) for the State and the
quarter''.
(2) Amount described.--Section 1935 of such Act, as
inserted by subsection (a)(2), is amended by adding at the
end the following new subsection:
``(c) Federal Assumption of Medicaid Prescription Drug
Costs for Dually-Eligible Beneficiaries.--
``(1) In general.--For purposes of section 1903(a)(1), for
a State that is one of the 50 States or the District of
Columbia for a calendar quarter in a year (beginning with
2003) the amount computed under this subsection is equal to
the product of the following:
``(A) Medicare subsidies.--The total amount of payments
made in the quarter under section 1860G (relating to premium
and cost-sharing prescription drug subsidies for low-income
medicare beneficiaries) that are attributable to individuals
who are residents of the State and are entitled to benefits
with respect to prescribed drugs under the State plan under
this title (including such a plan operating under a waiver
under section 1115).
``(B) State matching rate.--A proportion computed by
subtracting from 100 percent the Federal medical assistance
percentage (as defined in section 1905(b)) applicable to the
State and the quarter.
``(C) Phase-out proportion.--The phase-out proportion (as
defined in paragraph (2)) for the quarter.
``(2) Phase-out proportion.--For purposes of paragraph
(1)(C), the `phase-out proportion' for a calendar quarter
in--
``(A) 2003 is 80 percent;
``(B) 2004 is 60 percent;
``(C) 2005 is 40 percent;
``(D) 2006 is 20 percent; or
``(E) a year after 2006 is 0 percent.''.
(c) Medicaid Providing Wrap-Around Benefits.--Section 1935
of such Act, as so inserted and amended, is further amended
by adding at the end the following new subsection:
``(d) Additional Provisions.--
``(1) Medicaid as secondary payor.--In the case of an
individual dually entitled to qualified prescription drug
coverage under a prescription drug plan under part D of title
XVIII (or under a Medicare+Choice plan under part C of such
title) and medical assistance for prescribed drugs under this
title, medical assistance shall continue to be provided under
this title for prescribed drugs to the extent payment is not
made under the prescription drug plan or the Medicare+Choice
plan selected by the individual.
``(2) Condition.--A State may require, as a condition for
the receipt of medical assistance under this title with
respect to prescription drug benefits for an individual
eligible to obtain qualified prescription drug coverage
described in paragraph (1), that the individual elect
qualified prescription drug coverage under section 1860A.''.
(d) Treatment of Territories.--
(1) In general.--Section 1935 of such Act, as so inserted
and amended, is further amended--
(A) in subsection (a) in the matter preceding paragraph
(1), by inserting ``subject to subsection (e)'' after
``section 1903(a)'';
(B) in subsection (c)(1), by inserting ``subject to
subsection (e)'' after ``1903(a)(1)''; and
(C) by adding at the end the following new subsection:
``(e) Treatment of Territories.--
``(1) In general.--In the case of a State, other than the
50 States and the District of Columbia--
``(A) the previous provisions of this section shall not
apply to residents of such State; and
``(B) if the State establishes a plan described in
paragraph (2) (for providing medical assistance with respect
to the provision of prescription drugs to medicare
beneficiaries), the amount otherwise determined under section
1108(f) (as increased under section 1108(g)) for the State
shall be increased by the amount specified in paragraph (3).
``(2) Plan.--The plan described in this paragraph is a plan
that--
``(A) provides medical assistance with respect to the
provision of covered outpatient drugs (as defined in section
1860B(f)) to low-income medicare beneficiaries; and
``(B) assures that additional amounts received by the State
that are attributable to the operation of this subsection are
used only for such assistance.
``(3) Increased amount.--
``(A) In general.--The amount specified in this paragraph
for a State for a year is equal to the product of--
``(i) the aggregate amount specified in subparagraph (B);
and
``(ii) the amount specified in section 1108(g)(1) for that
State, divided by the sum of the amounts specified in such
section for all such States.
``(B) Aggregate amount.--The aggregate amount specified in
this subparagraph for--
``(i) 2003, is equal to $20,000,000; or
``(ii) a subsequent year, is equal to the aggregate amount
specified in this subparagraph for the previous year
increased by annual percentage increase specified in section
1860B(b)(5) for the year involved.

[[Page H5342]]

``(4) Report.--The Secretary shall submit to Congress a
report on the application of this subsection and may include
in the report such recommendations as the Secretary deems
appropriate.''.
(2) Conforming amendment.--Section 1108(f) of such Act is
amended by inserting ``and section 1935(e)(1)(B)'' after
``Subject to subsection (g)''.

SEC. 104. MEDIGAP TRANSITION PROVISIONS.

.in the case of an individual described in paragraph (2) who
seeks to enroll under the policy not later than 63 days after
the date of the termination of enrollment described in such
paragraph and who submits evidence of the date of termination
or disenrollment along with the application for such medicare
supplemental policy.
(2) Individual covered.--An individual described in this
paragraph is an individual who--
(A) enrolls in a prescription drug plan under part D of
title XVIII of the Social Security Act; and
(B) at the time of such enrollment was enrolled and
terminates enrollment in a medicare supplemental policy which
has a benefit package classified as ``H'', ``I'', or ``J''
under the standards referred to in paragraph (1)(A) or
terminates enrollment in a policy to which such standards do
not apply but which provides benefits for prescription drugs.
(3) Enforcement.--The provisions of paragraph (1) shall be
enforced as though they were included in section 1882(s) of
the Social Security Act (42 U.S.C. 1395ss(s)).
(4) Definitions.--For purposes of this subsection, the term
``medicare supplemental policy'' has the meaning given such
term in section 1882(g) of the Social Security Act (42 U.S.C.
1395ss(g)).

SEC. 105. STATE PHARMACEUTICAL ASSISTANCE TRANSITION
COMMISSION.

(a) Establishment.--
(1) In general.--There is established as of October 1,
2000, a State Pharmaceutical Assistance Transition Commission
(in this section referred to as the ``Commission'') to
develop a proposal for addressing the unique transitional
issues facing State pharmaceutical assistance programs, and
program participants, due to the implementation of the
medicare prescription drug program under part D of title
XVIII of the Social Security Act.
(2) Definitions.--For purposes of this section:
(A) State pharmaceutical assistance program defined.--The
term ``State pharmaceutical assistance program'' means a
program (other than the medicaid program) operated by a State
(or under contract with a State) that provides as of the date
of the enactment of this Act assistance to low-income
medicare beneficiaries for the purchase of prescription
drugs.
(B) Program participant.--The term ``program participant''
means a low-income medicare beneficiary who is a participant
in a State pharmaceutical assistance program.
(b) Composition.--The Commission shall consist of the
following:
(1) A representative of each governor of each State that
the Secretary identifies as operating on a statewide basis a
State pharmaceutical assistance program that provides for
eligibility and benefits that are comparable or more generous
than the low-income assistance eligibility and benefits
offered under part D of title XVIII of the Social Security
Act.
(2) Representatives from other States that the Secretary
identifies have in operation other State pharmaceutical
assistance programs, as appointed by the Secretary.
(3) Representatives of organizations that represent the
interests of program participants, as appointed by the
Secretary but not to exceed the number of representatives
under paragraphs (1) and (2).
(4) The Secretary (or the Secretary's designee). The
Secretary shall designate a member to serve as chair of the
Commission and the Commission shall meet at the call of the
chair.
(c) Development of Proposal.--The Commission shall develop
the proposal described in subsection (a) in a manner
consistent with the following principles:
(1) Protection of the interests of program participants in
a manner that is the least disruptive to such participants.
(2) Protection of the financial interests of States so that
States are not financially worse off as a result of the
enactment of this title.
(d) Report.--By not later than July 1, 2001, the Commission
shall submit to the President and the Congress a report that
contains a detailed proposal (including specific legislative
or administrative recommendations, if any) and such other
recommendations as the Commission deems appropriate.
(e) Support.--The Secretary shall provide the Commission
with the administrative support services necessary for the
Commission to carry out its responsibilities under this
section.
(f) Termination.--The Commission shall terminate 30 days
after the date of submission of the report under subsection
(d).

SEC. 106. DEMONSTRATION PROJECT FOR DISEASE MANAGEMENT FOR
SEVERELY CHRONICALLY ILL MEDICARE
BENEFICIARIES.

(a) In General.--The Administrator of the Medicare Benefits
Administration (in this section referred to as the
``Administrator'') shall conduct a demonstration project
under this section (in this section referred to as the
``project'') to demonstrate the impact on costs and health
outcomes of applying disease management to medicare
beneficiaries with diagnosed, advanced-stage congestive heart
failure, diabetes, or coronary heart disease. In no case may
the number of participants in the project exceed 30,000 at
any time.''.
(b) Voluntary Participation.--
(1) Eligibility.--Medicare beneficiaries are eligible to
participate in the project only if--
(A) they meet specific medical criteria demonstrating the
appropriate diagnosis and the advanced nature of their
disease;
(B) their physicians approve of participation in the
project; and
(C) they are not enrolled in a Medicare+Choice plan.
(2) Benefits.--A beneficiary who is enrolled in the project
shall be eligible--
(A) for disease management services related to their
chronic health condition; and
(B) if the beneficiary--
(i) is enrolled in a prescription drug plan under part D of
title XVIII of the Social Security Act, for payment of any
premiums for such plan, any deductible or cost-sharing, and
any amounts not covered under the plan because of the
application of an initial coverage limit; or
(ii) is not enrolled in such a plan, for payment for all
costs for prescription drugs without regard to whether or not
they relate to the chronic health condition;

except that the project may provide for modest cost-sharing
with respect to prescription drug coverage.
(3) Treatment as qualifying coverage for purposes of
continuous coverage.--For purposes of applying section
1860A(c)(2)(C) of the Social Security Act, coverage under the
project shall be treated as coverage under a prescription
drug plan under part D of title XVIII of such Act.
(c) Contracts with Disease Management Organizations.--
(1) In general.--The Administrator shall carry out the
project through contracts with up to 3 disease management
organizations. The Administrator shall not enter into such a
contract with an organization unless the organization
demonstrates that it can produce improved health outcomes and
reduce aggregate medicare expenditures consistent with
paragraph (2).
(2) Contract provisions.--Under such contracts--
(A) such an organization shall be required to provide for
prescription drug coverage described in subsection (b)(2)(B);
(B) such an organization shall be paid a fee negotiated and
established by the Administrator in a manner so that (taking
into account savings in expenditures under parts A and B of
the medicare program) there will be a net reduction in
expenditures under the medicare program as a result of the
project; and
(C) such an organization shall guarantee, through an
appropriate arrangement with a reinsurance company or
otherwise, the net reduction in expenditures described in
subparagraph (B).
(3) Payments.--Payments to such organizations shall be made
in appropriate proportion from the Trust Funds established
under title XVIII of the Social Security Act.
(d) Duration.--The project shall last for not longer than 3
years.
(e) Report.--The Administrator shall submit to Congress an
interim report on the project not later than 2 years after
the date it is first implemented and a final report on the
project not later than 6 months after the date of its
completion. Such reports shall include information on the
impact of the project on costs and health outcomes and
recommendations on the cost-effectiveness of extending or
expanding the project.

TITLE II--MODERNIZATION OF ADMINISTRATION OF MEDICARE

Subtitle A--Medicare Benefits Administration

SEC. 201. ESTABLISHMENT OF ADMINISTRATION.

(a) In General.--Title XVIII of the Social Security Act (42
U.S.C. 1395 et seq.) is amended by inserting after section
1806 the following new section:

``medicare benefits administration

[[Page H5343]]

``(C) Term of office.--The Administrator shall be appointed
for a term of 5 years. In any case in which a successor does
not take office at the end of an Administrator's term of
office, that Administrator may continue in office until the
entry upon office of such a successor. An Administrator
appointed to a term of office after the commencement of such
term may serve under such appointment only for the remainder
of such term.
``(D) General Authority.--The Administrator shall be
responsible for the exercise of all powers and the discharge
of all duties of the Administration, and shall have authority
and control over all personnel and activities thereof.
``(E) Rulemaking authority.--The Administrator may
prescribe such rules and regulations as the Administrator
determines necessary or appropriate to carry out the
functions of the Administration. The regulations prescribed
by the Administrator shall be subject to the rulemaking
procedures established under section 553 of title 5, United
States Code.
``(F) Authority to establish organizational units.--The
Administrator may establish, alter, consolidate, or
discontinue such organizational units or components within
the Administration as the Administrator considers necessary
or appropriate, except that this subparagraph shall not apply
with respect to any unit, component, or provision provided
for by this section.
``(G) Authority to delegate.--The Administrator may assign
duties, and delegate, or authorize successive redelegations
of, authority to act and to render decisions, to such
officers and employees of the Administration as the
Administrator may find necessary. Within the limitations of
such delegations, redelegations, or assignments, all official
acts and decisions of such officers and employees shall have
the same force and effect as though performed or rendered by
the Administrator.
``(2) Deputy administrator.--
``(A) In general.--There shall be a Deputy Administrator of
the Medicare Benefits Administration who shall be appointed
by the President, by and with the advice and consent of the
Senate.
``(B) Compensation.--The Deputy Administrator shall be paid
at the rate of basic pay payable for level IV of the
Executive Schedule under section 5315 of title 5, United
States Code.
``(C) Term of office.--The Deputy Administrator shall be
appointed for a term of 5 years. In any case in which a
successor does not take office at the end of a Deputy
Administrator's term of office, such Deputy Administrator may
continue in office until the entry upon office of such a
successor. A Deputy Administrator appointed to a term of
office after the commencement of such term may serve under
such appointment only for the remainder of such term.
``(D) Duties.--The Deputy Administrator shall perform such
duties and exercise such powers as the Administrator shall
from time to time assign or delegate. The Deputy
Administrator shall be Acting Administrator of the
Administration during the absence or disability of the
Administrator and, unless the President designates another
officer of the Government as Acting Administrator, in the
event of a vacancy in the office of the Administrator.
``(3) Secretarial coordination of program administration.--
The Secretary shall ensure appropriate coordination between
the Administrator and the Administrator of the Health Care
Financing Administration in carrying out the programs under
this title.
``(c) Duties; Administrative Provisions.--
``(1) Duties.--
``(A) General duties.--The Administrator shall carry out
parts C and D, including--
``(i) negotiating, entering into, and enforcing, contracts
with plans for the offering of Medicare+Choice plans under
part C, including the offering of qualified prescription drug
coverage under such plans; and
``(ii) negotiating, entering into, and enforcing, contracts
with PDP sponsors for the offering of prescription drug plans
under part D.
``(B) Other duties.--The Administrator shall carry out any
duty provided for under part C or part D, including
demonstration projects carried out in part or in whole under
such parts, the programs of all-inclusive care for the
elderly (PACE program) under section 1894, the social health
maintenance organization (SHMO) demonstration projects
(referred to in section 4104(c) of the Balanced Budget Act of
1997), and through a Medicare+Choice project that
demonstrates the application of capitation payment rates for
frail elderly medicare beneficiaries through the use of a
interdisciplinary team and through the provision of primary
care services to such beneficiaries by means of such a team
at the nursing facility involved).
``(C) Noninterference.--In carrying out its duties with
respect to the provision of qualified prescription drug
coverage to beneficiaries under this title, the Administrator
may not--
``(i) require a particular formulary or institute a price
structure for the reimbursement of covered outpatient drugs;
``(ii) interfere in any way with negotiations between PDP
sponsors and Medicare+Choice organizations and drug
manufacturers, wholesalers, or other suppliers of covered
outpatient drugs; and
``(iii) otherwise interfere with the competitive nature of
providing such coverage through such sponsors and
organizations.
``(D) Annual reports.--Not later March 31 of each year, the
Administrator shall submit to Congress and the President a
report on the administration of parts C and D during the
previous fiscal year.
``(2) Staff.--
``(A) In general.--The Administrator, with the approval of
the Secretary, may employ, without regard to chapter 31 of
title 5, United States Code, such officers and employees as
are necessary to administer the activities to be carried out
through the Medicare Benefits Administration.
``(B) Flexibility with respect to compensation.--
``(i) In general.--The staff of the Medicare Benefits
Administration shall, subject to clause (ii), be paid without
regard to the provisions of chapter 51 and chapter 53 of such
title (relating to classification and schedule pay rates).
``(ii) Maximum rate.--In no case may the rate of
compensation determined under clause (i) exceed the rate of
basic pay payable for level IV of the Executive Schedule
under section 5315 of title 5, United States Code.
``(C) Limitation on full-time equivalent staffing for
current hcfa functions being transferred.--The Administrator
may not employ under this paragraph a number of full-time
equivalent employees, to carry out functions that were
previously conducted by the Health Care Financing
Administration and that are conducted by the Administrator by
reason of this section, that exceeds the number of such full-
time equivalent employees authorized to be employed by the
Health Care Financing Administration to conduct such
functions as of the date of the enactment of this Act.
``(3) Redelegation of certain functions of the health care
financing administration.--
``(A) In general.--The Secretary, the Administrator, and
the Administrator of the Health Care Financing Administration
shall establish an appropriate transition of responsibility
in order to redelegate the administration of part C from the
Secretary and the Administrator of the Health Care Financing
Administration to the Administrator as is appropriate to
carry out the purposes of this section.
``(B) Transfer of data and information.--The Secretary
shall ensure that the Administrator of the Health Care
Financing Administration transfers to the Administrator of
the Medicare Benefits Administration such information and
data in the possession of the Administrator of the Health
Care Financing Administration as the Administrator of the
Medicare Benefits Administration requires to carry out the
duties described in paragraph (1).
``(C) Construction.--Insofar as a responsibility of the
Secretary or the Administrator of the Health Care Financing
Administration is redelegated to the Administrator under this
section, any reference to the Secretary or the Administrator
of the Health Care Financing Administration in this title or
title XI with respect to such responsibility is deemed to be
a reference to the Administrator.
``(d) Office of Beneficiary Assistance.--
``(1) Establishment.--The Secretary shall establish within
the Medicare Benefits Administration an Office of Beneficiary
Assistance to carry out functions relating to medicare
beneficiaries under this title, including making
determinations of eligibility of individuals for benefits
under this title, providing for enrollment of medicare
beneficiaries under this title, and the functions described
in paragraph (2). The Office shall be separate operating
division within the Administration.
``(2) Dissemination of information on benefits and appeals
rights.--
``(A) Dissemination of benefits information.--The Office of
Beneficiary Assistance shall disseminate to medicare
beneficiaries, by mail, by posting on the Internet site of
the Medicare Benefits Administration and through the toll-
free telephone number provided for under section 1804(b),
information with respect to the following:
``(i) Benefits, and limitations on payment (including cost-
sharing, stop-loss provisions, and formulary restrictions)
under parts C and D.
``(ii) Benefits, and limitations on payment under parts A
and B, including information on medicare supplemental
policies under section 1882.

``(iii) submit annual reports to Congress, the Secretary,
and the Medicare Policy Advisory

[[Page H5344]]

Board describing the activities of the Office, and including
such recommendations for improvement in the administration of
this title as the Ombudsman determines appropriate.
``(C) Coordination with state ombudsman programs and
consumer organizations.--The Medicare Ombudsman shall, to the
extent appropriate, coordinate with State medical Ombudsman
programs, and with State- and community-based consumer
organizations, to--
``(i) provide information about the medicare program; and
``(ii) conduct outreach to educate medicare beneficiaries
with respect to manners in which problems under the medicare
program may be resolved or avoided.
``(e) Medicare Policy Advisory Board.--
``(1) Establishment.--There is established within the
Medicare Benefits Administration the Medicare Policy Advisory
Board (in this section referred to the `Board'). The Board
shall advise, consult with, and make recommendations to the
Administrator of the Medicare Benefits Administration with
respect to the administration of parts C and D, including the
review of payment policies under such parts.
``(2) Reports.--
``(A) In general.--With respect to matters of the
administration of parts C and D, the Board shall submit to
Congress and to the Administrator of the Medicare Benefits
Administration such reports as the Board determines
appropriate. Each such report may contain such
recommendations as the Board determines appropriate for
legislative or administrative changes to improve the
administration of such parts, including the topics described
in subparagraph (B). Each such report shall be published in
the Federal Register.
``(B) Topics described.--Reports required under
subparagraph (A) may include the following topics:
``(i) Fostering competition.--Recommendations or proposals
to increase competition under parts C and D for services
furnished to medicare beneficiaries.
``(ii) Education and enrollment.--Recommendations for the
improvement to efforts to provide medicare beneficiaries
information and education on the program under this title,
and specifically parts C and D, and the program for
enrollment under the title.
``(iii) Implementation of risk-adjustment.--Evaluation of
the implementation under section 1853(a)(3)(C) of the risk
adjustment methodology to payment rates under that section to
Medicare+Choice organizations offering Medicare+Choice plans
that accounts for variations in per capita costs based on
health status and other demographic factors.
``(iv) Disease management programs.--Recommendations on the
incorporation of disease management programs under parts C
and D.
``(v) Rural access.--Recommendations to improve competition
and access to plans under parts C and D in rural areas.
``(C) Maintaining independence of board.--The Board shall
directly submit to Congress reports required under
subparagraph (A). No officer or agency of the United States
may require the Board to submit to any officer or agency of
the United States for approval, comments, or review, prior to
the submission to Congress of such reports.
``(3) Duty of administrator of medicare benefits
administration.--With respect to any report submitted by the
Board under paragraph (2)(A), not later than 90 days after
the report is submitted, the Administrator of the Medicare
Benefits Administration shall submit to Congress and the
President an analysis of recommendations made by the Board in
such report. Each such analysis shall be published in the
Federal Register.
``(4) Membership.--
``(A) Appointment.--Subject to the succeeding provisions of
this paragraph, the Board shall consist of 7 members to be
appointed as follows:
``(i) 3 members shall be appointed by the President.
``(ii) 2 members shall be appointed by the Speaker of the
House of Representatives, with the advice of the chairman and
the ranking minority member of the Committees on Ways and
Means and on Commerce of the House of Representatives.
``(iii) 2 members shall be appointed by the President pro
tempore of the Senate with the advice of the chairman and the
ranking minority member of the Senate Committee on Finance.
``(B) Qualifications.--The members shall be chosen on the
basis of their integrity, impartiality, and good judgment,
and shall be individuals who are, by reason of their
education and experience in health care benefits management,
exceptionally qualified to perform the duties of members of
the Board.
``(C) Prohibition on inclusion of federal employees.--No
officer or employee of the United States may serve as a
member of the Board.
``(5) Compensation.--Members of the Board shall receive,
for each day (including travel time) they are engaged in the
performance of the functions of the board, compensation at
rates not to exceed the daily equivalent to the annual rate
in effect for level IV of the Executive Schedule under
section 5315 of title 5, United States Code.
``(6) Terms of office.--
``(A) In general.--The term of office of members of the
Board shall be 3 years.
``(B) Terms of initial appointees.--As designated by the
President at the time of appointment, of the members first
appointed--
``(i) 1 shall be appointed for a term of 1 year;
``(ii) 3 shall be appointed for terms of 2 years; and
``(iii) 3 shall be appointed for terms of 3 years.
``(C) Reappointments.--Any person appointed as a member of
the Board may not serve for more than 8 years.
``(D) Vacancy.--Any member appointed to fill a vacancy
occurring before the expiration of the term for which the
member's predecessor was appointed shall be appointed only
for the remainder of that term. A member may serve after the
expiration of that member's term until a successor has taken
office. A vacancy in the Board shall be filled in the manner
in which the original appointment was made.
``(7) Chair.--The Chair of the Board shall be elected by
the members. The term of office of the Chair shall be 3
years.
``(8) Meetings.--The Board shall meet at the call of the
Chair, but in no event less than 3 times during each fiscal
year.
``(9) Director and staff.--
``(A) Appointment of director.--The Board shall have a
Director who shall be appointed by the Chair.
``(B) In general.--With the approval of the Board, the
Director may appoint, without regard to chapter 31 of title
5, United States Code, such additional personnel as the
Director considers appropriate.
``(C) Flexibility with respect to compensation.--
``(i) In general.--The Director and staff of the Board
shall, subject to clause (ii), be paid without regard to the
provisions of chapter 51 and chapter 53 of such title
(relating to classification and schedule pay rates).
``(ii) Maximum rate.--In no case may the rate of
compensation determined under clause (i) exceed the rate of
basic pay payable for level IV of the Executive Schedule
under section 5315 of title 5, United States Code.
``(D) Assistance from the administrator of the medicare
benefits administration.--The Administrator of the Medicare
Benefits Administration shall make available to the Board
such information and other assistance as it may require to
carry out its functions.
``(10) Contract authority.--The Board may contract with and
compensate government and private agencies or persons to
carry out its duties under this subsection, without regard to
section 3709 of the Revised Statutes (41 U.S.C. 5).
``(f) Funding.--There is authorized to be appropriated, in
appropriate part from the Federal Hospital Insurance Trust
Fund and from the Federal Supplementary Medical Insurance
Trust Fund (including the Medicare Prescription Drug
Account), such sums as are necessary to carry out this
section.''.
(b) Effective Date.--
(1) In general.--The amendment made by subsection (a) shall
take effect on the date of the enactment of this Act.
(2) Timing of initial appointments.--The Administrator and
Deputy Administrator of the Medicare Benefits Administration
may not be appointed before March 1, 2001.
(3) Duties with respect to eligibility determinations and
enrollment.--The Administrator of the Medicare Benefits
Administration shall carry out enrollment under title XVIII
of the Social Security Act, make eligibility determinations
under such title, and carry out part C of such title for
years beginning or after January 1, 2003.

SEC. 202. MISCELLANEOUS ADMINISTRATIVE PROVISIONS.

(a) Administrator as Member of the Board of Trustees of the
Medicare Trust Funds.--Section 1817(b) and section 1841(b) of
the Social Security Act (42 U.S.C. 1395i(b), 1395t(b)) are
each amended by striking ``and the Secretary of Health and
Human Services, all ex officio,'' and inserting ``the
Secretary of Health and Human Services, and the Administrator
of the Medicare Benefits Administration, all ex officio,''.
(b) Increase in Grade to Executive Level III for the
Administrator of the Health Care Financing Administration.--
(1) In general.--Section 5314 of title 5, United States
Code, by adding at the end the following:
``Administrator of the Health Care Financing
Administration.''.
(2) Conforming amendment.--Section 5315 of such title is
amended by striking ``Administrator of the Health Care
Financing Administration.''.
(3) Effective date.--The amendments made by this subsection
take effect on March 1, 2001.

Subtitle B--Oversight of Financial Sustainability of the Medicare
Program

SEC. 211. ADDITIONAL REQUIREMENTS FOR ANNUAL FINANCIAL REPORT
AND OVERSIGHT ON MEDICARE PROGRAM.

[[Page H5345]]

``(C) 10-year and 50-year projections.--An estimate of
total amounts referred to in subparagraph (A) required to be
obligated for payment for benefits covered under this title
for each of the 10 fiscal years succeeding the fiscal year
involved and for the 50-year period beginning with the
succeeding fiscal year.
``(D) Relation to gdp growth.--A comparison of the rate of
growth of the total amounts referred to in subparagraph (A)
to the rate of growth in the gross domestic product for the
same period.
``(2) Publication.--Each report submitted under paragraph
(1) shall be published by the Committee on Ways and Means as
a public document and shall be made available by such
Committee on the Internet.''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply with respect to fiscal years beginning on or
after the date of the enactment of this Act.
(c) Congressional Hearings.--It is the sense of Congress
that the committees of jurisdiction shall hold hearings on
the reports submitted under section 1817(l) of the Social
Security Act.

Subtitle C--Changes in Medicare Coverage and Appeals Process

SEC. 221. REVISIONS TO MEDICARE APPEALS PROCESS.

(a) Conduct of Reconsiderations of Determinations by
Independent Contractors.--Section 1869 of the Social Security
Act (42 U.S.C. 1395ff) is amended to read as follows:

``determinations; appeals

``Sec. 1869. (a) Initial Determinations.--The Secretary
shall promulgate regulations and make initial determinations
with respect to benefits under part A or part B in accordance
with those regulations for the following:
``(1) The initial determination of whether an individual is
entitled to benefits under such parts.
``(2) The initial determination of the amount of benefits
available to the individual under such parts.
``(3) Any other initial determination with respect to a
claim for benefits under such parts, including an initial
determination by the Secretary that payment may not be made,
or may no longer be made, for an item or service under such
parts, an initial determination made by a utilization and
quality control peer review organization under section
1154(a)(2), and an initial determination made by an entity
pursuant to a contract with the Secretary to administer
provisions of this title or title XI.
``(b) Appeal Rights.--
``(1) In general.--
``(A) Reconsideration of initial determination.--Subject to
subparagraph (D), any individual dissatisfied with any
initial determination under subsection (a) shall be entitled
to reconsideration of the determination, and, subject to
subparagraphs (D) and (E), a hearing thereon by the Secretary
to the same extent as is provided in section 205(b) and to
judicial review of the Secretary's final decision after such
hearing as is provided in section 205(g).
``(B) Representation by provider or supplier.--
``(i) In general.--Sections 206(a), 1102, and 1871 shall
not be construed as authorizing the Secretary to prohibit an
individual from being represented under this section by a
person that furnishes or supplies the individual, directly or
indirectly, with services or items, solely on the basis that
the person furnishes or supplies the individual with such a
service or item.
``(ii) Mandatory waiver of right to payment from
beneficiary.--Any person that furnishes services or items to
an individual may not represent an individual under this
section with respect to the issue described in section
1879(a)(2) unless the person has waived any rights for
payment from the beneficiary with respect to the services or
items involved in the appeal.
``(iii) Prohibition on payment for representation.--If a
person furnishes services or items to an individual and
represents the individual under this section, the person may
not impose any financial liability on such individual in
connection with such representation.
``(iv) Requirements for representatives of a beneficiary.--
The provisions of section 205(j) and section 206 (regarding
representation of claimants) shall apply to representation of
an individual with respect to appeals under this section in
the same manner as they apply to representation of an
individual under those sections.
``(C) Succession of rights in cases of assignment.--The
right of an individual to an appeal under this section with
respect to an item or service may be assigned to the provider
of services or supplier of the item or service upon the
written consent of such individual using a standard form
established by the Secretary for such an assignment.
``(D) Time limits for appeals.--
``(i) Reconsiderations.--Reconsideration under subparagraph
(A) shall be available only if the individual described
subparagraph (A) files notice with the Secretary to request
reconsideration by not later than 180 days after the
individual receives notice of the initial determination under
subsection (a) or within such additional time as the
Secretary may allow.
``(ii) Hearings conducted by the secretary.--The Secretary
shall establish in regulations time limits for the filing of
a request for a hearing by the Secretary in accordance with
provisions in sections 205 and 206.
``(E) Amounts in controversy.--
``(i) In general.--A hearing (by the Secretary) shall not
be available to an individual under this section if the
amount in controversy is less than $100, and judicial review
shall not be available to the individual if the amount in
controversy is less than $1,000.
``(ii) Aggregation of claims.--In determining the amount in
controversy, the Secretary, under regulations, shall allow 2
or more appeals to be aggregated if the appeals involve--

``(F) Expedited proceedings.--
``(i) Expedited determination.--In the case of an
individual who--

[[Page H5346]]

for a national coverage determination and that includes an
identification of the remaining steps in the Secretary's
review process and a deadline by which the Secretary will
complete the review and take an action described in subclause
(I), (II), or (III).
``(ii) In the case of an action described in clause
(i)(IV), if the Secretary fails to take an action referred to
in such clause by the deadline specified by the Secretary
under such clause, then the Secretary is deemed to have taken
an action described in clause (i)(III) as of the deadline.
``(iii) When issuing a determination under clause (i), the
Secretary shall include an explanation of the basis for the
determination. An action taken under clause (i) (other than
subclause (IV)) is deemed to be a national coverage
determination for purposes of review under subparagraph (A).
``(E) Annual report on national coverage determinations.--
``(i) In general.--Not later than December 1 of each year,
beginning in 2001, the Secretary shall submit to Congress a
report that sets forth a detailed compilation of the actual
time periods that were necessary to complete and fully
implement national coverage determinations that were made in
the previous fiscal year for items, services, or medical
devices not previously covered as a benefit under this title,
including, with respect to each new item, service, or medical
device, a statement of the time taken by the Secretary to
make the necessary coverage, coding, and payment
determinations, including the time taken to complete each
significant step in the process of making such
determinations.
``(ii) Publication of reports on the internet.--The
Secretary shall publish each report submitted under clause
(i) on the medicare Internet site of the Department of Health
and Human Services.
``(3) Publication on the internet of decisions of hearings
of the secretary.--Each decision of a hearing by the
Secretary shall be made public, and the Secretary shall
publish each decision on the Medicare Internet site of the
Department of Health and Human Services. The Secretary shall
remove from such decision any information that would identify
any individual, provider of services, or supplier.
``(4) Limitation on review of certain regulations.--A
regulation or instruction which relates to a method for
determining the amount of payment under part B and which was
initially issued before January 1, 1981, shall not be subject
to judicial review.
``(5) Standing.--An action under this section seeking
review of a coverage determination (with respect to items and
services under this title) may be initiated only by one (or
more) of the following aggrieved persons, or classes of
persons:
``(A) Individuals entitled to benefits under part A, or
enrolled under part B, or both, who are in need of the items
or services that are the subject of the coverage
determination.
``(B) Persons, or classes of persons, who make,
manufacture, offer, supply, make available, or provide such
items and services.
``(c) Conduct of Reconsiderations by Independent
Contractors.--
``(1) In general.--The Secretary shall enter into contracts
with qualified independent contractors to conduct
reconsiderations of initial determinations made under
paragraphs (2) and (3) of subsection (a). Contracts shall be
for an initial term of three years and shall be renewable on
a triennial basis thereafter.
``(2) Qualified independent contractor.--For purposes of
this subsection, the term `qualified independent contractor'
means an entity or organization that is independent of any
organization under contract with the Secretary that makes
initial determinations under subsection (a), and that meets
the requirements established by the Secretary consistent with
paragraph (3).
``(3) Requirements.--Any qualified independent contractor
entering into a contract with the Secretary under this
subsection shall meet the following requirements:
``(A) In general.--The qualified independent contractor
shall perform such duties and functions and assume such
responsibilities as may be required under regulations of the
Secretary promulgated to carry out the provisions of this
subsection, and such additional duties, functions, and
responsibilities as provided under the contract.
``(B) Determinations.--The qualified independent contractor
shall determine, on the basis of such criteria, guidelines,
and policies established by the Secretary and published under
subsection (d)(2)(D), whether payment shall be made for items
or services under part A or part B and the amount of such
payment. Such determination shall constitute the conclusive
determination on those issues for purposes of payment under
such parts for fiscal intermediaries, carriers, and other
entities whose determinations are subject to review by the
contractor; except that payment may be made if--
``(i) such payment is allowed by reason of section 1879;
``(ii) in the case of inpatient hospital services or
extended care services, the qualified independent contractor
determines that additional time is required in order to
arrange for postdischarge care, but payment may be continued
under this clause for not more than 2 days, and only in the
case in which the provider of such services did not know and
could not reasonably have been expected to know (as
determined under section 1879) that payment would not
otherwise be made for such services under part A or part B
prior to notification by the qualified independent contractor
under this subsection;
``(iii) such determination is changed as the result of any
hearing by the Secretary or judicial review of the decision
under this section; or
``(iv) such payment is authorized under section
1861(v)(1)(G).
``(C) Deadlines for decisions.--
``(i) Determinations.--The qualified independent contractor
shall conduct and conclude a determination under subparagraph
(B) or an appeal of an initial determination, and mail the
notice of the decision by not later than the end of the 45-
day period beginning on the date a request for
reconsideration has been timely filed.
``(ii) Consequences of failure to meet deadline.--In the
case of a failure by the qualified independent contractor to
mail the notice of the decision by the end of the period
described in clause (i), the party requesting the
reconsideration or appeal may request a hearing before an
administrative law judge, notwithstanding any requirements
for a reconsidered determination for purposes of the party's
right to such hearing.
``(iii) Expedited reconsiderations.--The qualified
independent contractor shall perform an expedited
reconsideration under subsection (b)(1)(F) of a notice from a
provider of services or supplier that payment may not be made
for an item or service furnished by the provider of services
or supplier, of a decision by a provider of services to
terminate services furnished to an individual, or in
accordance with the following:

``(D) Limitation on individual reviewing determinations.--
``(i) Physicians.--No physician under the employ of a
qualified independent contractor may review--

``(ii) Physician's family described.--For purposes of this
paragraph, a physician's family includes the physician's
spouse (other than a spouse who is legally separated from the
physician under a decree of divorce or separate maintenance),
children (including stepchildren and legally adopted
children), grandchildren, parents, and grandparents.
``(E) Explanation of determinations.--Any determination of
a qualified independent contractor shall be in writing, and
shall include a detailed explanation of the determination as
well as a discussion of the pertinent facts and applicable
regulations applied in making such determination.
``(F) Notice requirements.--Whenever a qualified
independent contractor makes a determination under this
subsection, the qualified independent contractor shall
promptly notify such individual and the entity responsible
for the payment of claims under part A or part B of such
determination.
``(G) Dissemination of information.--Each qualified
independent contractor shall, using the methodology
established by the Secretary under subsection (d)(4), make
available all determinations of such qualified independent
contractors to fiscal intermediaries (under section 1816),
carriers (under section 1842), peer review organizations
(under part B of title XI), Medicare+Choice organizations
offering Medicare+Choice plans under part C, and other
entities under contract with the Secretary to make initial
determinations under part A or part B or title XI.
``(H) Ensuring consistency in determinations.--Each
qualified independent contractor shall monitor its
determinations to ensure the consistency of its
determinations with respect to requests for reconsideration
of similar or related matters.
``(I) Data collection.--
``(i) In general.--Consistent with the requirements of
clause (ii), a qualified independent contractor shall collect
such information relevant to its functions, and keep and
maintain such records in such form and manner as the
Secretary may require to carry out the purposes of this
section and shall permit access to and use of any such
information and records as the Secretary may require for such
purposes.
``(ii) Type of data collected.--Each qualified independent
contractor shall keep accurate records of each decision made,
consistent with standards established by the Secretary for
such purpose. Such records shall be maintained in an
electronic database in a manner that provides for
identification of the following:

[[Page H5347]]

``(J) Hearings by the secretary.--The qualified independent
contractor shall (i) prepare such information as is required
for an appeal of its reconsidered determination to the
Secretary for a hearing, including as necessary, explanations
of issues involved in the determination and relevant
policies, and (ii) participate in such hearings as required
by the Secretary.
``(4) Number of qualified independent contractors.--The
Secretary shall enter into contracts with not fewer than 12
qualified independent contractors under this subsection.
``(5) Limitation on qualified independent contractor
liability.--No qualified independent contractor having a
contract with the Secretary under this subsection and no
person who is employed by, or who has a fiduciary
relationship with, any such qualified independent contractor
or who furnishes professional services to such qualified
independent contractor, shall be held by reason of the
performance of any duty, function, or activity required or
authorized pursuant to this subsection or to a valid contract
entered into under this subsection, to have violated any
criminal law, or to be civilly liable under any law of the
United States or of any State (or political subdivision
thereof) provided due care was exercised in the performance
of such duty, function, or activity.
``(d) Administrative Provisions.--
``(1) Outreach.--The Secretary shall perform such outreach
activities as are necessary to inform individuals entitled to
benefits under this title and providers of services and
suppliers with respect to their rights of, and the process
for, appeals made under this section. The Secretary shall use
the toll-free telephone number maintained by the Secretary
(1-800-MEDICAR(E)) (1-800-633-4227) to provide information
regarding appeal rights and respond to inquiries regarding
the status of appeals.
``(2) Guidance for reconsiderations and hearings.--
``(A) Regulations.--Not later than 1 year after the date of
the enactment of this section, the Secretary shall promulgate
regulations governing the processes of reconsiderations of
determinations by the Secretary and qualified independent
contractors and of hearings by the Secretary. Such
regulations shall include such specific criteria and provide
such guidance as required to ensure the adequate functioning
of the reconsiderations and hearings processes and to ensure
consistency in such processes.
``(B) Deadlines for administrative action.--
``(i) Hearing by administrative law judge.--

``(ii) Departmental appeals board review.--The Departmental
Appeals Board of the Department of Health and Human Services
shall conduct and conclude a review of the decision on a
hearing described in subparagraph (B) and make a decision or
remand the case to the administrative law judge for
reconsideration by not later than the end of the 90-day
period beginning on the date a request for review has been
timely filed.
``(iii) Consequences of failure to meet deadlines.--In the
case of a failure by an administrative law judge to render a
decision by the end of the period described in clause (ii),
the party requesting the hearing may request a review by the
Departmental Appeals Board of the Department of Health and
Human Services, notwithstanding any requirements for a
hearing for purposes of the party's right to such a review.
``(iv) DAB hearing procedure.--In the case of a request
described in clause (iii), the Departmental Appeals Board
shall review the case de novo.
``(C) Policies.--The Secretary shall provide such specific
criteria and guidance, including all applicable national and
local coverage policies and rationale for such policies, as
is necessary to assist the qualified independent contractors
to make informed decisions in considering appeals under this
section. The Secretary shall furnish to the qualified
independent contractors the criteria and guidance described
in this paragraph in a published format, which may be an
electronic format.
``(D) Publication of medicare coverage policies on the
internet.--The Secretary shall publish national and local
coverage policies under this title on an Internet site
maintained by the Secretary.
``(E) Effect of failure to publish policies.--
``(i) National and local coverage policies.--Qualified
independent contractors shall not be bound by any national or
local medicare coverage policy established by the Secretary
that is not published on the Internet site under subparagraph
(D).
``(ii) Other policies.--With respect to policies
established by the Secretary other than the policies
described in clause (i), qualified independent contractors
shall not be bound by such policies if the Secretary does not
furnish to the qualified independent contractor the policies
in a published format consistent with subparagraph (C).
``(3) Continuing education requirement for qualified
independent contractors and administrative law judges.--
``(A) In general.--The Secretary shall provide to each
qualified independent contractor, and, in consultation with
the Commissioner of Social Security, to administrative law
judges that decide appeals of reconsiderations of initial
determinations or other decisions or determinations under
this section, such continuing education with respect to
policies of the Secretary under this title or part B of title
XI as is necessary for such qualified independent contractors
and administrative law judges to make informed decisions with
respect to appeals.
``(B) Monitoring of decisions by qualified independent
contractors and administrative law judges.--The Secretary
shall monitor determinations made by all qualified
independent contractors and administrative law judges under
this section and shall provide continuing education and
training to such qualified independent contractors and
administrative law judges to ensure consistency of
determinations with respect to appeals on similar or related
matters. To ensure such consistency, the Secretary shall
provide for administration and oversight of qualified
independent contractors and, in consultation with the
Commissioner of Social Security, administrative law judges
through a central office of the Department of Health and
Human Services. Such administration and oversight may not be
delegated to regional offices of the Department.
``(4) Dissemination of determinations.--The Secretary shall
establish a methodology under which qualified independent
contractors shall carry out subsection (c)(3)(G).
``(5) Survey.--Not less frequently than every 5 years, the
Secretary shall conduct a survey of a valid sample of
individuals entitled to benefits under this title, providers
of services, and suppliers to determine the satisfaction of
such individuals or entities with the process for appeals of
determinations provided for under this section and education
and training provided by the Secretary with respect to that
process. The Secretary shall submit to Congress a report
describing the results of the survey, and shall include any
recommendations for administrative or legislative actions
that the Secretary determines appropriate.
``(6) Report to congress.--The Secretary shall submit to
Congress an annual report describing the number of appeals
for the previous year, identifying issues that require
administrative or legislative actions, and including any
recommendations of the Secretary with respect to such
actions. The Secretary shall include in such report an
analysis of determinations by qualified independent
contractors with respect to inconsistent decisions and an
analysis of the causes of any such inconsistencies.''.
(b) Applicability of Requirements and Limitations on
Liability of Qualified Independent Contractors to
Medicare+Choice Independent Appeals Contractors.--Section
1852(g)(4) of the Social Security Act (42 U.S.C. 1395w-
22(e)(3)) is amended by adding at the end the following:
``The provisions of section 1869(c)(5) shall apply to
independent outside entities under contract with the
Secretary under this paragraph.''.
(c) Conforming Amendment to Review by the Provider
Reimbursement Review Board.--Section 1878(g) of the Social
Security Act (42 U.S.C. 1395oo(g)) is amended by adding at
the end the following new paragraph:
``(3) Findings described in paragraph (1) and
determinations and other decisions described in paragraph (2)
may be reviewed or appealed under section 1869.''.

SEC. 222. PROVISIONS WITH RESPECT TO LIMITATIONS ON LIABILITY
OF BENEFICIARIES.

[[Page H5348]]

paragraph (1), unless the following conditions are met:
``(1) The provider of services shall furnish a notice of
discharge and appeal rights established by the Secretary
under subsection (l) to each individual entitled to benefits
under this title to whom such provider of services furnishes
services, upon admission of the individual to the provider of
services and upon notice of determination to discharge the
individual from the provider of services, of the individual's
limitations of liability under this section and rights of
appeal under section 1869.
``(2) If the individual, prior to discharge from the
provider of services, appeals the determination to discharge
under section 1869 not later than noon of the first working
day after the date the individual receives the notice of
determination to discharge and notice of appeal rights under
paragraph (1), the provider of services shall, by the close
of business of such first working day, provide to the
Secretary (or qualified independent contractor under section
1869, as determined by the Secretary) the records required to
review the determination.
``(l) The Secretary shall develop appropriate standard
forms for individuals entitled to benefits under this title
to waive limitation of liability protections under subsection
(j) and to receive notice of discharge and appeal rights
under subsection (k). The forms developed by the Secretary
under this subsection shall clearly and in plain language
inform such individuals of their limitations on liability,
their rights under section 1869(a) to obtain an initial
determination by the Secretary of whether payment may be made
under part A or part B for such benefit, and their rights of
appeal under section 1869(b), and shall inform such
individuals that they may obtain further information or file
an appeal of the determination by use of the toll-free
telephone number (1-800-MEDICAR(E)) (1-800-633-4227)
maintained by the Secretary. The forms developed by the
Secretary under this subsection shall be the only manner in
which such individuals may waive such protections under this
title or title XI.
``(m) An individual who is entitled to benefits under this
title and is furnished an item or service is not liable for
payment of cost sharing amounts of more than $50 with respect
to such benefits unless the individual has been informed in
advance of being furnished the item or service of the
estimated amount of the cost sharing for the item or service
using a standard form established by the Secretary.''.
(2) Conforming amendment.--Section 1870(a) of the Social
Security Act (42 U.S.C. 1395gg(a)) is amended by striking
``Any payment under this title'' and inserting ``Except as
provided in section 1879(i), any payment under this title''.
(b) Inclusion of Beneficiary Liability Information in
Explanation of Medicare Benefits.--Section 1806(a) of the
Social Security Act (42 U.S.C. 1395b-7(a)) is amended--
(1) in paragraph (1), by striking ``and'' at the end;
(2) by redesignating paragraph (2) as paragraph (3); and
(3) by inserting after paragraph (1) the following new
paragraph:
``(2) lists with respect to each item or service furnished
the amount of the individual's liability for payment;'';
(4) in paragraph (3), as so redesignated, by striking the
period at the end and inserting ``; and''; and
(5) by adding at the end the following new paragraph:
``(4) includes the toll-free telephone number (1-800-
MEDICAR(E)) (1-800-633-4227) for information and questions
concerning the statement, liability of the individual for
payment, and appeal rights.''.

SEC. 223. WAIVERS OF LIABILITY FOR COST SHARING AMOUNTS.

SEC. 224. ELIMINATION OF MOTIONS BY THE SECRETARY ON
DECISIONS OF THE PROVIDER REIMBURSEMENT REVIEW
BOARD.

SEC. 225. EFFECTIVE DATE OF SUBTITLE.

In no case shall the amendments made by this subtitle apply
before October 1, 2000.

TITLE III--MEDICARE+CHOICE REFORMS; PRESERVATION OF MEDICARE PART B
DRUG BENEFIT

Subtitle A--Medicare+Choice Reforms

SEC. 301. INCREASE IN NATIONAL PER CAPITA MEDICARE+CHOICE
GROWTH PERCENTAGE IN 2001 AND 2002.

Section 1853(c)(6)(B) of the Social Security Act (42 U.S.C.
1395w-23(c)(6)(B)) is amended--
(1) in clause (iv), by striking ``for 2001, 0.5 percentage
points'' and inserting ``for 2001, 0 percentage points''; and
(2) in clause (v), by striking ``for 2002, 0.3 percentage
points'' and inserting ``for 2002, 0 percentage points''.

SEC. 302. PERMANENTLY REMOVING APPLICATION OF BUDGET
NEUTRALITY BEGINNING IN 2002.

SEC. 303. INCREASING MINIMUM PAYMENT AMOUNT.

SEC. 304. ALLOWING MOVEMENT TO 50:50 PERCENT BLEND IN 2002.

``except that a Medicare+Choice organization may elect to
apply subparagraph (F) (rather than subparagraph (E)) for
2002.''.

SEC. 305. INCREASED UPDATE FOR PAYMENT AREAS WITH ONLY ONE OR
NO MEDICARE+CHOICE CONTRACTS.

(a) In General.--Section 1853(c)(1)(C)(ii) of the Social
Security Act (42 U.S.C. 1395w-23(c)(1)(C)(ii)) is amended--
(1) by striking ``(ii) For a subsequent year'' and
inserting ``(ii)(I) Subject to subclause (II), for a
subsequent year''; and
(2) by adding at the end the following new subclause:
``(II) During 2002, 2003, 2004, and 2005, in the case of a
Medicare+Choice payment area in which there is no more than 1
contract entered into under this part as of July 1 before the
beginning of the year, 102.5 percent of the annual
Medicare+Choice capitation rate under this paragraph for the
area for the previous year.''.
(b) Construction.--The amendments made by subsection (a) do
not affect the payment of a first time bonus under section
1853(i) of the Social Security Act (42 U.S.C. 1395w-23(i)).

SEC. 306. PERMITTING HIGHER NEGOTIATED RATES IN CERTAIN
MEDICARE+CHOICE PAYMENT AREAS BELOW NATIONAL
AVERAGE.

``(I) to reflect the demographic characteristics in the
population under this title; and
``(II) to eliminate the costs of prescription drugs.

SEC. 307. 10-YEAR PHASE IN OF RISK ADJUSTMENT BASED ON DATA
FROM ALL SETTINGS.

``and, beginning in 2004, insofar as such risk adjustment is
based on data from all settings, the

[[Page H5349]]

methodology shall be phased in equal increments over a 10
year period, beginning with 2004 or (if later) the first year
in which such data is used.''.

SEC. 308. DELAY FROM JULY TO OCTOBER, 2000 IN DEADLINE FOR
OFFERING AND WITHDRAWING MEDICARE+CHOICE PLANS
FOR 2001.

Notwithstanding any other provision of law, the deadline
for a Medicare+Choice organization to withdraw the offering
of a Medicare+Choice plan under part C of title XVIII of the
Social Security Act (or otherwise to submit information
required for the offering of such a plan) for 2001 is delayed
from July 1, 2000, to October 1, 2000, and any such
organization that provided notice of withdrawal of such a
plan during 2000 before the date of the enactment of this Act
may rescind such withdrawal at any time before October 1,
2000.

Subtitle B--Preservation of Medicare Coverage of Drugs and Biologicals

SEC. 311. PRESERVATION OF COVERAGE OF DRUGS AND BIOLOGICALS
UNDER PART B OF THE MEDICARE PROGRAM.

(a) In General.--Section 1861(s)(2) of the Social Security
Act (42 U.S.C. 1395x(s)(2)) is amended, in each of
subparagraphs (A) and (B), by striking ``(including drugs and
biologicals which cannot, as determined in accordance with
regulations, be self-administered)'' and inserting
``(including injectable and infusable drugs and biologicals
which are not usually self-administered by the patient)''.
(b) Effective Date.--The amendment made by subsection (a)
applies to drugs and biologicals administered on or after
October 1, 2000.

SEC. 312. GAO REPORT ON PART B PAYMENT FOR DRUGS AND
BIOLOGICALS AND RELATED SERVICES.

(a) In General.--The Comptroller General of the United
States shall conduct a study to quantify the extent to which
reimbursement for drugs and biologicals under the current
medicare payment methodology (provided under section 1842 (o)
of the Social Security Act (42 U.S.C. 1395u(o)) overpays for
the cost of such drugs and biologicals compared to the
average acquisition cost paid by physicians or other
suppliers of such drugs
(b) Elements.--The study shall also assess the consequences
of changing the current medicare payment methodology to a
payment methodology that is based on the average acquisition
cost of the drugs. The study shall, at a minimum, assess the
effects of such a reduction on--
(1) the delivery of health care services to Medicare
beneficiaries with cancer;
(2) total Medicare expenditures, including an estimate of
the number of patients who would, as a result of the payment
reduction, receive chemotherapy in a hospital rather than in
a physician's office;
(3) the delivery of dialysis services;
(4) the delivery of vaccines;
(5) the administration in physician offices of drugs other
than cancer therapy drugs; and
(6) the effect on the delivery of drug therapies by
hospital outpatient departments of changing the average
wholesale price as the basis for Medicare pass-through
payments to such departments, as included in the Medicare,
Medicaid, and SCHIP Balanced Budget Refinement Act of 1999.
(c) Payment for Related Professional Services.--The study
shall also include a review of the extent to which other
payment methodologies under part B of the medicare program,
if any, intended to reimburse physician and other suppliers
of drugs and biologicals described in subsection (a) for
costs incurred in handling, storing and administering such
drugs and biologicals are inadequate to cover such costs and
whether an additional payment would be required to cover
these costs under the average acquisition cost methodology.
(d) Consideration of Issues in Implementing an Average
Acquisition Cost Methodology.--The study shall assess
possible means by which a payment method based on average
acquisition cost could be implemented, including at least the
following:
(1) Identification of possible bases for determining the
average acquisition cost of drugs, such as surveys of
wholesaler catalog prices, and determination of the
advantages, disadvantages, and costs (to the government and
public) of each possible approach.
(2) The impact on individual providers and practitioners if
average or median prices are used as the payment basis.
(3) Methods for updating and keeping current the prices
used as the payment basis.
(e) Coordination with BBRA Study.--The Comptroller General
shall conduct the study under this section in coordination
with the study provided for under section 213(a) of the
Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act
of 1999 (113 Stat. 1501A-350), as enacted into law by section
1000(a)(6) of Public Law 106-113.
(f) Report.--Not later than 6 months after the date of the
enactment of this Act, the Comptroller General shall submit a
report on the study conducted under this section, as well as
the study referred to in subsection (e). Such report shall
include recommendations regarding such changes in the
medicare reimbursement policies described in subsections (a)
and (c) as the Comptroller General deems appropriate, as well
as the recommendations described in section 213(b) of the
Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act
of 1999.

The SPEAKER pro tempore. The gentleman from Texas (Mr. Archer), the
gentleman from New York (Mr. Rangel), the gentleman from Virginia (Mr.
Bliley), and the gentleman from Michigan (Mr. Dingell) each will
control 30 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
and include extraneous material on H.R. 4680.
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, today 12 million seniors and disabled Americans on
Medicare, including 7 million women, have no prescription drug
coverage. For the vast majority of seniors living on fixed incomes,
this is a very difficult situation. This bill brings them help.
Clearly, Mr. Speaker, now is the time for us to add to Medicare
prescription drug coverage. Our Republican bipartisan plan does just
that. 5.5 million low-income seniors, almost half of those on Medicare
today, are without coverage. They now will have a prescription drug
plan. For about the cost of a movie ticket, those seniors will be able
to get the medicines that they need, no matter the cost, no matter the
illness.
We do not just cover low-income Americans. We cover every senior who
wishes to enroll. Seniors will be given the right to choose, the right
to voluntarily choose the drug plan that works best for them. They will
receive a 25 percent reduction in the price of the drugs they buy and
the security also of catastrophic coverage in the case of chronic
illness or excessively high drug costs.
So all 6\1/2\ million middle-income seniors without coverage will
also get to choose a prescription drug benefit plan as well. This is
truly a complete package, but there are some things that our plan will
not do. First, it will not affect the millions of seniors who have
existing drug coverage and like it. They will be able to continue with
that.
Second, it will not force seniors into a bureaucratic government-run
plan that dictates what drugs seniors can and cannot have.
Third, it will not evaporate over time if drug costs continue to
outpace inflation.
Finally, it will not break the bank or threaten Medicare's future.
All of these items that I mentioned are concerns that we have with
the Democrat plan. Democrats will offer seniors no choice. They offer
seniors only a single government-run plan, and seniors will have to
take it or leave it.
Finally, the Democrat plan makes seniors wait until the year 2006, 6
years from now, before they can get catastrophic coverage and then only
if Washington has a surplus.
Why the delay? Why the contingency? The Democrat plan is a big step
toward Washington-run health care but a step backward in helping
seniors with the high cost of prescription drugs.
Our Republican bipartisan bill, by contrast, gives seniors the right
to choose the coverage that works best for them. It gives seniors a 25
to 39 percent discount off the price of their drugs.
This vote is a simple choice, Mr. Speaker. I urge my colleagues to
vote for the Republican bipartisan bill that makes prescription drugs
available, affordable and voluntary.
Mr. Speaker, I reserve the balance of my time.
Mr. RANGEL. Mr. Speaker, I yield myself 3 minutes.
Mr. Speaker, every time there is a good idea that we have in this
House of Representatives, the Republican majority has to figure some
way to find some wording that either it is going to be deep-sixed and
never be brought to the floor or that it becomes a political statement
because they can be assured that it is going to be vetoed. It is not
only affordable health care. Whether it is school construction, minimum
wage, gun safety, patient bill of rights, all good ideas, but they have
to find some way to make certain that it never becomes the law; that
they have to challenge Democrats and challenge the President.
They keep calling this a bipartisan bill because they found a
Democrat or two that lost their way. The truth of the matter is,
bipartisanship starts

[[Page H5350]]

with the committee. The gentleman from Texas (Mr. Archer) is supposed
to talk with the gentleman from New York (Mr. Rangel) and say, hey, can
we get a bipartisan bill? The gentleman from California (Mr. Thomas) is
supposed to talk to the gentleman from California (Mr. Stark) and say,
hey, can we work out something? That is how we get bipartisanship. That
is historically how we do it here.
But, no, what the other side has chosen to do is to wait until 2:00
or 3:00 in the morning and decide that we are not going to have any
option. It is going to be the Republican way or no way.
One of my favorite Republicans once said, if one gets a telephone
call at 2:30 in the morning, it must be suspicious, that something is
going wrong. Well, if one gets it at 3:00 in the morning, then they can
rest assured that something is going on that they do not want the
American people to know.
What is it? That they have a bill, they have a statement. We do not
challenge the fact that they just do not like government helping
people. That is their way. That is how they think. If it is Social
Security, if it is Medicare, if it is education, privatize it and
forget it. Get some vouchers, let the private sector do it. Give the
money to the HMOs, give it to the insurers because they cannot trust
old folks with their own prescription drugs.
All we are asking for is a chance to have another way. So I can say
this, it is possible that the voters were sleeping when the Republicans
had concocted this scheme to deny us an option to really provide health
care for those who need it, but I assure them that when they vote today
that the voters will not be sleeping when they check out the voting
records as to who really was concerned about affordable health care.
Even those that they want to help reject this cockamamie scheme that
they can feed money into the HMO and that they are going to now go into
the rural areas and provide health care.
Mr. Speaker, I ask unanimous consent to yield the remainder of my
time to the gentleman from California (Mr. Stark), the ranking member
of the Subcommittee on Health, so that he may designate and yield to
other Members of the House.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from New York?
There was no objection.
Mr. ARCHER. Mr. Speaker, I yield 1\1/4\ minutes to the gentleman from
Missouri (Mr. Hulshof), the respected member of the Committee on Ways
and Means.
(Mr. HULSHOF asked and was given permission to revise and extend his
remarks.)
Mr. HULSHOF. Mr. Speaker, talk is cheap. Prescription drugs are not.
They are expensive and getting more expensive every day. Seniors need
help now. The competing plans are alike in certain respects, monthly
premiums, deductibles, out-of-pocket costs, taking care of low-income
seniors; but I agree with the gentleman who just spoke that there are
some philosophical differences between the two plans. In other words,
shall seniors have a right to choose or shall America's seniors be
forced to lose? That is what is at stake. Do we trust older Americans
to be able to choose for themselves the prescription drug plans and let
them keep the plans that they like? Or shall we force them into a take-
it-or-leave-it approach? I think we should trust those in their golden
years to make those decisions for themselves.
We have seen health-run plans in other nations, and we have seen they
have not worked. In Canada and England they are not on the cutting edge
of having miracle drug therapies; or the fact that seniors cannot get
prescription drugs, have their doctors prescribe them and then get
those drugs as they need it.
When Medicare began in 1965, the corner drugstore was the gathering
place. People would sit around and catch up. Pharmacists would know a
person's name, know their medical history. That has not changed even
though the country has. Under our plan, that will not change, except
that prescription medicines will be cheaper.
I urge a yes vote on the bipartisan plan.
Mr. STARK. Mr. Speaker, I yield myself 3 minutes.
Mr. Speaker, to the previous speaker in the well I would say things
have not changed, or maybe they have. Now the lobbyists for the
pharmacists get together with Members of Congress in the dead of night
and draw a bill that will benefit only the pharmaceutical corporations
and the managed care companies. So where we used to be able to consult
with our local pharmacist about what is good for us, now we have to let
the Republicans cozy up to the lobbyists in whose pocket they reside
and get their campaign contributions and whatever other gifts they want
to give them as they draft a bill which will only help the
pharmaceutical industry and the HMOs in this country.
I would like to say that the Democrats' bill, if it were allowed to
be voted on by the Republicans, is a better bill. We will hear in the
debate that there are some similarities, and there are. The principal
difference is that the Democrats bill is dependable. It uses real
resources, and it is an integral part of Medicare.
The Republican bill will never come into law. We see before us the
statement that was given to us this morning by the administration which
opposes H.R. 4680 because its private insurance benefit does not meet
the President's test of being a meaningful Medicare prescription drug
benefit that is affordable and accessible for all beneficiaries; and if
H.R. 4680 were presented to the President, he would veto it.
So we are today debating something that will never come to pass, and
we have been foreclosed from offering an option. Admittedly, the option
would be much more expensive, and we are proud of that. We, in our
limited bill, have half the number of uninsured seniors than the
Republicans do. If the Republican bill were to pass, which is not
likely, there would still be 10 million Medicare beneficiaries without
any health care.
Our bill would leave 4\1/2\ million Medicare beneficiaries, half as
few, that would not have insurance. Yet we are begging to spend this
surplus and not waste it on a relief from the inheritance tax, which
will benefit 3,000 or 4,000 of the very richest Americans. With that
money alone, we could provide an added benefit at a low enough premium
and eliminate the copay so that we could include all the Medicare
beneficiaries in a generous, dependable benefit with a reliable premium
that would be the same across the country and allow the seniors to get
their drugs from any provider in the country. This is not true under
the Republican bill.

{time} 1445

We think that the government can do a better job than subsidizing
managed care drug plans whose record has been to increase the premiums,
leave the program, abandon their beneficiaries, kick up the premiums,
cut benefits, where Medicare has done none of that, it has been
dependable. I wish we could bring our bill to the public.
Mr. Speaker, I reserve the balance of my time.
Mr. ARCHER. Mr. Speaker, I yield 1 minute to the gentleman from
Pennsylvania, (Mr. English), another respected member of the Ways and
Means Committee.
Mr. ENGLISH. Mr. Speaker, if we can set aside for a moment the hot
bipartisan rhetoric, today the House has an opportunity to take a
historic step to ensure that no senior will ever have to face the
choice again between destitution and neglecting their prescriptions.
The House bipartisan prescription drug plan is a balanced, market-
oriented approach targeted to updating Medicare and providing
prescription coverage, more generous coverage as it happens than what
the President has originally proposed.
For my district, the plan does some very important things. It takes
vital steps toward improving Medicare as a whole. It expedites the
appeals process by mandating Medicare appeals. They used to take an
average of 400 days now it takes less than a quarter of that time.
Our plan is the only one that addresses the problems in
Medicare+Choice, particularly a problem in portions of my district,
where plans are raising rates or cutting benefits.
Under our bipartisan bill, we move the prescription drug benefit of
Medicare+Choice out from under the cold shadow of the Health Care
Financing Administration that has haunted the program, instead we
create the

[[Page H5351]]

Medicare Benefit Administration to safeguard prescription drug plans
and negotiate lower prescription prices for seniors.
Mr. Speaker, today the House takes a historic step to ensure that no
senior will ever have to face the choice between destitution and
prescription drugs. The House Bipartisan Prescription Drug Plan is
available, affordable and voluntary for ALL seniors.
Under this proposal, seniors will no longer have to pay exorbitant
prices for drugs. Using group bargaining power, seniors will enjoy a 25
percent discount on necessary prescriptions.
Many seniors in my district will qualify for direct subsidies. About
100,000 seniors in Pennsylvania will be covered 100 percent under this
plan.
But the best part is that those seniors who are struggling to pay
runaway drug costs would have access to a Medicare entitlement which
covers all of their costs about $6,000.
Seniors at all income levels will have access to affordable
prescription drug coverage that best meets their individual needs.
The House Bipartisan Prescription Drug Plan is a balanced, market-
oriented approach targeted at updating Medicare and providing
prescription drug coverage.
Under our prescription drug plan, the government would share in
insuring the sickest seniors, making the risk more manageable for
private insurers.
By sharing the risk and the cost associated with caring for the
sickest beneficiaries, premiums will be lower for every beneficiary.
Keeping rural seniors in mind, our plan guarantees at least two drug
plans will be available in every area of the country with the
government serving as the insurer of last resort.
The President's plan shoehorns seniors--many of whom have private
drug coverage which they are happy with--into what I call a ``one-size-
fits-few'' plan with Washington bureaucrats in control of their
benefits.

medicare reforms

The plan takes vital steps toward improving Medicare as a whole. It
expedites the appeals process by mandating that appeals that used to
take an average of 400 days now take less than a quarter of that time.
Our plan is the only one that addresses the problems of
Medicare+Choice. In portions of my district, plans are raising rates
and cutting benefits to seniors because the dismal reimbursement rates.
We move the prescription drug benefit and Medicare+Choice out from
under the cold shadow of the Health Care Financing Administration that
has haunted and nearly bankrupted the system.
The Medicare Benefit Administration will be created to safeguard
prescription drug plans and negotiate lower prescription prices for
seniors. The administration will allow the plan to realize its
potential, free from interference from the bureaucracy.
We further strengthen Medicare+Choice plans by: raising the base rate
that counties currently receive; providing higher updates for those
areas who currently have 1 or no plans--thereby encouraging plans to
continue to provide coverage in these areas.
Mr. STARK. Mr. Speaker, I yield 2 minutes to the gentleman from
Washington State (Mr. McDermott), who knows why the National Committee
to Preserve Social Security and Medicare and National Council on Aging
supports the Democrats' plan and opposes the Republicans' plan.
Mr. McDERMOTT. Mr. Speaker, this bill is like a bad April Fool's Day
joke. You know there is a purse that is laying out on the street with a
string on it. And the person comes along and pulls the string and the
people keep reaching for it and they cannot quite get it.
The Republican bill has no guaranteed premium in it. It has no
guaranteed costs reduction in it. I do not care what figures they throw
around out here, 25 percent to 39 percent reduction, it is not in the
bill. There is no assurance of two choices.
One Republican Member let the cat out of the bag, it may be enough
just to introduce a bill, but if we don't even have a bill, we are open
to charges that we didn't do anything. That tells us where they really
are, and it also tells us what their consultant told them.
He said, it is more important to communicate that you have a plan as
it is to communicate what is in the plan. The reason this was done at
night, the reason they will not allow us to make an alternative, the
reason they do not want any open debate is because they do not want to
communicate to anybody until they put out those commercials in the
election.
They will say we passed a bipartisan bill for seniors with a couple
of Democrats and a joke in terms of how it works. In this bill, we ask
ourselves, where are they going to get the two plans that they talk
about?
The bill says on one page, we will subsidize up to 35 percent. What
if nobody will take it at 35 percent, they hold out. The bill later
says they can add incentives and the chairman of the subcommittee said
in the committee room that you could subsidize up to 99 percent.
If there is an insurance company out there that can get 99 percent
subsidy on the plan maybe they will offer it, but I am telling my
colleagues it is going to cost the American people. It is a bad bill.
Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 2 minutes to the
gentleman from Minnesota (Mr. Peterson), someone who believes in policy
over politics.
Mr. PETERSON of Minnesota. Mr. Speaker, I thank the gentleman for
yielding to me. He and I have been working together on one aspect of
this Medicare problem that I have depicted in this chart here, and that
is the fact that we have 3,025 counties in this country that are being
paid below the average of the normal reimbursement, and 168 counties
that are being paid above.
I am going to say something that I have heard a lot of my colleagues
say, but I do not think very many people are going to dare say on the
floor of this House, and, that is, that it is irresponsible for us to
be providing a drug benefit without reforming this system. And where I
am coming from with this issue is that I think if we add a drug
benefit, such as my friends on the Democratic side, on top of the
existing system, the chances of us ever getting this fixed are going to
be almost zero.
What has happened since we started work on this in 1995 in Dade
County, which started off at $620 a month reimbursement, they are now
up to $809 a month. In my area, we had $239 reimbursements, we raised
that floor to $375, and it has stuck there ever since.
Since 1997, what has happened, Dade County has gone up 8 percent, we
are still at $375; and the problem I have with this whole thing is that
we cannot set another benefit where we are going to have the Government
pick up 100 percent of these benefits, that nobody else is at risk
except the government and think we are going to have the money
available to fix this plan.
Mr. Speaker, at least on this side, the gentleman from California
(Mr. Thomas) and others have come forward and tried to address this
issue, have funded the blend, have raised the cap and then after we got
done with that, then the administration and my friends on this side of
the aisle came along and said, well, we will do the same thing on our
bill.
I have not seen a lot of interest, unfortunately, on my side of the
aisle dealing with this problem, but this map shows where in this
country they have zero premium plans or drug coverage, the dark areas
are those areas, the whole rest of this is the area where they are not
getting this kind of coverage. I would argue with the Democratic plan,
they will never get it.
Mr. STARK. Mr. Speaker, I yield 2 minutes to the gentleman from
Wisconsin (Mr. Kleczka), a distinguished member of the Subcommittee on
Health of the Committee on Ways and Means, who understands that
Families USA and the Leadership Council of Aging organizations
vehemently oppose the Republican bill and support the Democratic
substitute.
Mr. KLECZKA. Mr. Speaker, I am trying to figure out what the previous
speaker said. He is the one supporting the Republican drug bill, and as
I recall, he said it is irresponsible for us to provide a drug benefit
at this time. Nevertheless, he signs on to the Republican drug benefit
bill. That tells me, and he is a pretty honest guy, that their bill
does not provide a drug benefit at all. I agree with that.
Mr. Speaker, the Republican drug bill is a cruel hoax and an empty
promise to our senior citizens. We are going to end up passing their
bill today, and we are going to go home for the 4th of July break. I
challenge the senior citizens in their districts to ask a few
questions. My friends here is a copy of the bill, I challenge
constituents to say, Mr. Republican Congressman, where in the bill is
the premium that I am going to be charged? They are

[[Page H5352]]

going to say well, it is not in there. I will be darned.
Mr. Republican Congressman, what are the drugs covered? Where is the
listing of the drugs? It is not in here. Well, Mr. Republican
Congressman, how about the deductibles and copays; is that in there?
No, that is not in there either.
The constituent will say, what kind of bill is this? They will say we
are going to hire a new bureaucrat for $140,000 a year who will work
with the insurance companies to make those decisions.
Our bill is voluntary, defines a premium of $25 a month. In the
Republican bill insurance companies will decide that with this new
bureaucrat. That is a drug benefit? That is a farce. This bill does not
provide a universal program, where doctors coverage for Medicare is the
same in this part of the country as in that part. This bill hopes and
prays that the insurance companies will offer it.
Mr. Speaker, if this type of policy was profitable for insurance
companies, they would offer it today. They are not going to do this.
This bill is going to fail.
Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 1 minute to the
gentleman from Illinois (Mr. Weller), a member of the Ways and Means
Committee.
(Mr. WELLER asked and was given permission to revise and extend his
remarks.)
Mr. WELLER. Mr. Speaker, over the last several years, as I have
represented the South Side of Chicago and the south suburbs, I have
often been asked the question should our senior citizens today have to
make a choice between buying lunch or dinner or paying for their
prescription drugs?
Today we are answering that question with bipartisan legislation to
ensure that seniors no longer have to make that choice between paying
for their prescription drugs or paying for lunch or breakfast or
dinner. We have a bipartisan plan that is now before us that is
available for every senior. If you qualify for Medicare under this
bipartisan plan, you qualify for prescription drug coverage. It is
affordable.
If you have prescription drug coverage today, another benefit is we
let you keep it; if your retirement has good coverage, you do not have
to worry about losing, because it is covered by Medicare as well. It is
also voluntary, which means if you like what you have, you do not have
to take it.
We have the security of insuring that if you have a catastrophic
situation, of course, that is covered as well. The bottom line is it is
a bipartisan plan. It is affordable. There are choices, and it is
secure for every senior.
Mr. STARK. Mr. Speaker, I yield 1 minute to the gentleman from
Wisconsin (Mr. Obey), the former chairman of the Committee on
Appropriations, who understands that the National Council of Senior
Citizens and the National Senior Citizens Law Center both oppose the
Republican plan and wholeheartedly endorses the Democratic plan.
Mr. OBEY. Mr. Speaker, I thank the gentleman for yielding me the
time.
Mr. Speaker, the drug companies vigorously support the Republican
plan, because they understand that the Republican plan is like the wolf
giving Little Red Riding Hood a roadmap through the woods. It is a
phony deal.
The Republican leadership says we can afford to provide $200 billion
in tax cuts to the wealthiest 400 people in this country. They say we
can afford to provide $90 billion in tax cuts to the wealthiest 1
percent who make more than $300,000 a year, but somehow we cannot
afford to provide a real affordable prescription drug benefit for every
senior citizen under Medicare.
Under the Republican approach, they simply privatize Medicare,
because they do not have the guts to let us vote on a real plan,
because they know if they did, they would lose.
Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 1 minute to the
gentleman from Illinois (Mr. Crane), a valued member of the Ways and
Means Committee, the chairman of the Subcommittee of Trade, a member of
the Subcommittee on Health.
Mr. CRANE. Mr. Speaker, I thank the gentleman for yielding me the
time.
Mr. Speaker, I want to take this opportunity to share with my
colleagues my strong support for this legislation, H.R. 4680, the
Medicare Rx 2000 Act.
Medicare was facing insolvency in the year 2002 when Republicans took
control of the House in January 1995. As a result of our hard work, and
despite false charges from those on the other side of the aisle about
our intent, the Medicare Trust Fund is now solvent until 2025.
Nearly every Member on our side of the aisle voted for the fiscal
year 2001 budget resolution that set aside $40 billion over the next 5
years for a Medicare prescription drug benefit because we recognized
the need to modernize and strengthen Medicare for the 21st century.
Speaker Hastert then formed a working group to write a Medicare
prescription drug plan within the budget guidelines. To the credit of
Subcommittee on Health chairman, the gentleman from California (Mr.
Thomas); Committee on Commerce chairman, the gentleman from Virginia
(Mr. Bliley); and other Members of the working group, a market-based
approach was drafted to provide a Medicare prescription drug benefit
that is voluntary, affordable and available to all senior citizens.
Mr. Speaker, I urge my colleagues to support this bill.
Mr. Speaker, the plan is so well drafted it has gained bipartisan
support. Unfortunately, many of my friends in the minority are
supporting a government-run, take it or leave it, one-size fits all
program that will cost hundreds of billions of dollars. That plan would
also force millions of seniors to give up the private coverage they now
have.
This bipartisan legislation provides seniors with a voluntary
program, under which they would have several options and could choose
which plan fits their individual needs best. This legislation also
provides for coverage for seniors with unusually high drug costs. For
seniors with unusually high drug costs, the plan provides security by
covering 100 percent of out-of-pocket costs beyond $6,000.
I strongly urge you to support the Medicare Rx 2000 Act. I am well
aware that some may think another approach might work better and others
are concerned about the budget impact of adding a prescription drug
benefit to Medicare. As a member of the Ways and Means Health
Subcommittee, I can assure you these are questions I have answered to
my own satisfaction during consideration of this legislation.
The Congressional Budget Office is expected to score the legislation
under the $40 billion level we have already set aside in this year's
budget.
The fact remains that our nation's health care system has changed
since Medicare was first created and, to be effective, Medicare must
change too. We must modernize Medicare before the Baby Boom generation
retires, and we must recognize that every individual has unique health
care needs. This legislation makes Medicare more flexible to address
the differing needs of seniors and recognizes the importance of both
prevention and treatment. In the long term, this approach will save
money because preventive medicine can delay or eliminate the need for
hospitalization.
As a fiscal conservative, I strongly believe the Medicare Rx 2000 Act
does an excellent job of providing senior citizens the prescription
drug benefits they need without squandering our nation's budget
surplus. It does so by relying on the free enterprise system that has
served our country so well and by giving senior citizens the choices
they demand at prices for prescription drugs they can afford.
Once again, I urge your support for the Medicare Rx 2000 Act. Let's
give our nation's seniors the choices they deserve at prices they can
afford.
Mr. STARK. Mr. Speaker, I yield 2 minutes to the gentleman from
Georgia (Mr. Lewis), who understands that the Alzheimers' Association
and Consumers Union both oppose the Republican plan and endorse the
Democrats' plan. He understands the working group, who put this bill
together for the Republicans, is mostly comprised of lobbyists for the
pharmaceutical industry and the managed care industry.

{time} 1500

Mr. LEWIS of Georgia. Mr. Speaker, under the Republican plan, there
is no defined benefit. There is no set premium. This is a scheme
written by the insurance companies. The Republicans did not like
Medicare back in 1965, and they do not like it now. Here they are, once
again, trying to privatize prescription drugs for seniors, just like
they tried to privatize Medicare. This is nothing but a scheme.
The Republican scheme requires low-income seniors to go to the State
welfare office. Are my Republican sisters

[[Page H5353]]

and brothers suggesting that my 86-year-old mother go down to the
welfare office to find out whether she can get her prescription
medicine?
This is a sham. This is a shame, and this is a disgrace.
My Republican colleagues, on the other hand, would prefer to give the
money away in tax breaks to the wealthy, rather than to offer a
sensible and affordable prescription medicine benefit. The availability
of prescription medicine should not depend on the size of one's wallet
or one's ZIP code.
There is no room, but no room in here to play partisan politics. No
person in the twilight of his or her life should not have to choose
between putting food on the table and getting his or her blood pressure
and heart medicine.
This is not just, this is not right, and this is not fair. We have a
moral obligation, a mission, and a mandate to stand up for our seniors.
Our seniors do not want a prescription drug benefit next year, our
seniors want it now, and they deserve it now. We can do no less for the
seniors of America.

Announcement By The Speaker Pro Tempore

The SPEAKER pro tempore (Mr. LaHood). The Chair will remind all
persons in the gallery that they are here as guests of the House and
that any manifestation of approval or disapproval of proceedings or
other audible conversation is in violation of the House.
Mr. THOMAS. Mr. Speaker, I yield 1 minute to the gentlewoman from
Washington (Ms. Dunn), a member of the Committee on Ways and Means.
Ms. DUNN. Mr. Speaker, seniors are living longer because of
innovative new treatments that extend and improve their quality of
life. Unfortunately, many of these new treatments carry a cost that
puts a huge burden on the shoulders of seniors who are living on fixed
incomes. Today will ensure that low-income seniors no longer need to
have to decide between purchasing drugs and buying food or paying for
rent. This bill of ours will provide all seniors access to affordable
prescription drug coverage that will limit their out-of-pocket
payments.
In addition, for low-income seniors, the bill will provide drug
coverage that is free of premiums, deductibles and copayments.
Regardless of income, seniors will be able to have peace of mind that
they will have access to a voluntary drug benefit plan.
More importantly, Mr. Speaker, we offer seniors a choice of selecting
a drug plan that meets their individual needs. We leave the decisions
in the hands of seniors, not in the hands of government bureaucrats. In
this way, we can make sure that those who offer drug plans are
accountable to seniors who can choose to vote with their feet.
Mr. Speaker, I urge passage of our bill.
Mr. STARK. Mr. Speaker, I yield 2 minutes to the gentlewoman from
Florida (Mrs. Thurman), a member of the Subcommittee on Health of the
Committee on Ways and Means, who twice offered an amendment to give
seniors a discount on their pharmaceutical drugs at no cost to the
Federal Government, only to see every Republican on the Committee on
Ways and Means vote against her amendment.
Mrs. THURMAN. Mr. Speaker, I find it quite interesting that we are
talking about an insurance plan. In this country, we already have these
plans. We have Medigap plans, we have Medicare Choice. But the problem
is, they failed; and yet this is what we have to vote on again today.
That is why this is the hottest issue in the country.
Senior groups who have nothing to gain have written and talked to us
about why they cannot support the bill in front of us. They do not have
any politics in this game. They want a drug benefit. They want to have
life-sustaining drugs available to them.
So listen to them. The Senior Citizens League says, ``After
considerable study, the Medicare RX 2000 Act will do more harm than
good to the people that it is intended to help.''
How about Families of USA? They said, ``This proposal has all the
attributes of a mirage. It looks inviting from a distance, but once you
get up close, you realize there is nothing there. What is more,
consumers do not know what they will actually get out of this. The
Republican proposal leaves the actual benefit undefined.''
How about the Older Women's League who actually says, ``the
Republican prescription drug plan does not represent a defined benefit
added to the Medicare program but, rather, a private insurance
program.''
Or how about the National Committee to Preserve Social Security and
Medicare. ``The congressional Republican plan for prescription drug
coverage for senior citizens is not what the American people need or
want,'' according to one of the country's leading citizens advocate
groups.
Mr. Speaker, these are folks that have come to talk to us. These are
the folks that are in my town hall meetings. These are the folks that
have told me: we want a defined benefit; we want a Medicare benefit. We
are tired of being switched from plan to plan. We are tired of seeing
our prices go up, and we have no control over it. The only way we get
this is to make sure it goes through Medicare.
Please vote against this bill. Give our seniors what they deserve,
and that is prescription drugs that they can afford.
Mr. THOMAS. Mr. Speaker, I yield myself 10 seconds.
Just so that people understand, letters of support for H.R. 4680 have
come in from a number of institutions. The American Cancer Research
Institute, the Kidney Cancer Association, National Alliance for the
Mentally Ill. There are a number of organizations that simply disagree
with the gentlewoman.
Mr. Speaker, I yield 1 minute to the gentlewoman from Connecticut
(Mrs. Johnson), a member of the Subcommittee on Health of the Committee
on Ways and Means.
(Mrs. JOHNSON of Connecticut asked and was given permission to revise
and extend her remarks.)
Mrs. JOHNSON of Connecticut. Mr. Speaker, this is a red letter day
for seniors. It is just a red letter day. For the first time in
history, out of this House is going to go legislation to provide
prescription drug coverage for seniors across America, every village,
every city. I am proud of that. This is not about insurance companies,
and here is the proof.
In the Democrats' bill, they are going to use, and it says, ``or
insurers.'' They are going to use insurers; we are going to use
insurers. They are going to use pharmaceutical benefits managers; we
are going to use pharmaceutical benefits managers. They are going to
use pharmacy chains; we are going to use pharmacies. The difference is,
they are going to use one. They are going to use one plan. Seniors will
have no choice, one formulary. Seniors will have no choice. In that one
formulary, they may have only one drug in each category. In our bill,
they must have multiple drugs. In our bill, we guarantee that we will
cover off-label uses. Sixty percent of cancer victims depend on off-
label uses of drugs for their cure.
Mr. Speaker, our plan offers them not only prescription coverage, but
choice and hope.
Mr. Speaker, today is a great day for our nation's seniors because
today we are considering historic legislation that will expand Medicare
to cover the rising cost of prescription drugs.
When Medicare was created in 1965, prescription drug coverage was not
included because there were relatively few drugs available and the
focus was on physician and hospital care.
Today, however, it's clear that you can't have modern health care
without having access to lifesaving pharmaceuticals.
Thankfully, two-thirds of seniors have prescription drug coverage
under other health plans, but 12 million have no coverage at all.
This is simply morally wrong in the world's most prosperous nation
because no senior should have to choose between filling the
prescription they need and putting food on the table.
So, today is truly a red letter day. We will pass a House Republican
bill with bipartisan support to make prescription drug coverage a part
of Medicare for all seniors in America, in every town and every city.
While some of my Democrat colleagues are dramatizing their opposition
to this bill, I would remind those watching that if it weren't an
election year, they'd be claiming victory. The similarities between the
two proposals, ours and theirs, is striking and broad.
The AARP acknowledged this point in a letter that they sent to
Congress yesterday. ``We are pleased that both the House Republican and
Democratic bills include a voluntary prescription drug benefit in
Medicare--a benefit to which every Medicare beneficiary is entitled.
Further, both bills provide for a benefit that would be available in
either fee-for-service or

[[Page H5354]]

managed care settings. And while there are differences, both bills
describe the core prescription drug benefit in statute. These are
important steps and represent real progress over the past year.''
Horace B. Deets, AARP, June 27.
In other words, our plan is universal, just like the President's.
Our plan is voluntary, just like the President's.
Our plan provides an entitlement under Medicare, just like the
President's.
Our plan contracts with private health organizations, just like the
President's.
And like Part B coverage for doctor services and diagnostic tests, it
is funded with both premiums and government subsidies, just like the
President's.
But our plan is unique in two important ways. It is the only plan--
and was the first--to provide immediate protection for seniors from
out-of-control drug costs. All seniors will get full coverage for their
drugs when their spending reaches the catastrophic threshold. We
included this provision in our legislation from the very beginning
because we realized how important it is for seniors peace of mind and
retirement security. The President's original proposal did not include
catastrophic coverage. When he realized the importance of our
provision, he added it. I am hopeful that his movement toward the
Republicans on this issue is a signal that we can work together in a
bipartisan way to provide seniors with prescription drug coverage this
year.
The second unique aspect of the House Republican bill is that it
guarantees every senior in America access to at least two prescription
drug plans.
We know every senior has different health care needs, and therefore
needs different plans to choose from.
But a choice of plans also assures an immediate 25% price discount;
lowering prescription drug costs for our seniors, just as large
employers lower drug costs for their employees through group purchasing
power. In contrast, the President's proposal--because it offers only a
``one-size-fits-all'' plan, would only save seniors, on average, 12
percent off retail prices. Our seniors will be able to get the best
possible price on their medicines.
In addition, our plan requires companies to offer multiple drugs in
each category--not just one as the Democrat's bill does. And our bill
requires coverage of off-label uses of drugs, while the Democrat's bill
does not. That's particularly important to the 60% of seniors who rely
on off-label uses to threat their cancer.
And finally, with drug costs expected to rise 10 percent a year for
the next decade, we think it's critical to adjust funding each year for
drug cost inflation. In sum, the bipartisan bill creates a structure
that will give seniors the best bang for their buck!
And for those who have great employer-provided retiree coverage, the
House plan helps ensure that employers will continue to offer it. The
bill provides employers with subsidies to address the cost of offering
seniors insurance against catastrophic drug costs. The Democrat plan
does not provide this same public-private partnership to preserve
private retiree health coverage. Our legislation will not jeopardize
the coverage that seniors already have, and they'll have the choice to
keep it!
In addition to providing seniors with many choices, our legislation
also contains an important initiative that I authored. For the first
time, we will help seniors with serious chronic diseases--diabetes and
heart disease. They will be able to enroll in a disease management
program and will receive their prescription drugs at a low cost. By
helping seniors manage their disease, we will be able to help them
avoid hospitalizations and emergency room visits, thereby lowering
Medicare spending. The private sector has moved ahead of Medicare and
had success offering these programs. Now we'll be able to ensure that
seniors on Medicare will have this choice to improve their health and
lower Medicare's costs.
And finally, this legislation also includes an important provision
for states like Connecticut that have already had the foresight to
provide prescription drugs for low-income seniors. It assumes that
these states will not be penalized, but rather helped to integrate
their successful programs with this new federal benefit.
Indeed, this is a red letter day for seniors. The House is
demonstrating its support on both sides of the aisle to commit
significant funding to make prescription drugs available for the
millions of seniors who are having difficulty meeting their health
needs today. The AARP confirms this in a letter to Congress saying that
we are taking ``important steps'' and that our work represents ``real
progress.''
Mr. STARK. Mr. Speaker, I yield 1 minute to the gentleman from
Michigan (Mr. Levin), a member of the Committee on Ways and Means, who
understands that the Older Women's League and the Alliance for Children
and Families have endorsed the Democrat bill and violently oppose the
Republican bill.
Mr. LEVIN. Mr. Speaker, the Republicans took the advice of their
consultants. Look at the label, they said, and forget about the
contents. It is true. They have used bottles and vials here on the
floor; but for many seniors, they would be empty. If seniors have
$1,000 in prescription costs, they would pay more for the insurance
under the Republican plan than they would get back, and if it is $7,000
in medicine costs, seniors would pay 85 percent.
I ask this question: Why should coverage for medicines be different
than for visits to physicians and to hospitals? We Democrats say there
should be no difference. My Republican colleagues say, set it up under
the private insurance plan. They say, ours is one-size-fits-all. Yes,
ours is under Medicare that has choice. My Republican colleagues
essentially do not build theirs within Medicare. They say have it
through private insurance with no assured premium, and I emphasize
this, and no assured set of benefits. We can do better.
Mr. THOMAS. Mr. Speaker, I yield as much time as he may consume to
the distinguished gentleman from Illinois (Mr. Hastert), the Speaker of
the House.
Mr. HASTERT. Mr. Speaker, I thank the gentleman from California for
yielding me this time.
Mr. Speaker, I rise today in support of this legislation, and I urge
my colleagues on both sides of the aisle to support it.
There is one issue that should transcend politics, and this is it.
Some analysts out there are saying that this is the big political vote
of the year, and they may be right. But we should not vote for this out
of a concern for political futures. We should vote for this out of the
concern for our constituents who need our help in dealing with the high
cost of prescription drugs.
We should do this to help our mothers and our grandmothers and our
neighbors down the street. We should do this to help those seniors that
gather for coffee every morning down at the local McDonald's. We should
do this to help those who rely on prescription drugs to stay alive and
those who need them to enhance their already vibrant lives. We should
work together to provide our senior citizens a better quality of life.
No senior should be forced to choose between paying the rent and
putting food on the table or paying for lifesaving and life-enhancing
prescription drugs.
Prescription drugs are too expensive in this country, and too many of
our seniors do not have an adequate prescription drug benefit. This
legislation addresses both problems in a responsible way that allows
seniors to have a choice and not a one-size-fits-all Federal program.
Those seniors who choose the plans offered by this legislation will
reduce their prescription costs by 25 percent from the first day they
enter the plan. By lowering the cost of prescription drugs, this
proposal gives seniors the peace of mind that they are getting the best
deal for their health care dollar.
The seniors I talk do not want a handout. They are willing to pay
their fair share. But they do not want to be afraid of having all of
their savings wiped out if they find that they have an illness that has
a very expensive drug treatment.
Mr. Speaker, our plan insures seniors against such catastrophic loss
from the day this plan becomes law, not 6 years from now, as the
Democratic plan does. Seniors need coverage now. We all have a special
concern for low-income seniors. They will be fully subsidized by the
Federal Government. All seniors will have insurance against high out-
of-pocket costs.
Mr. Speaker, there is much talk from some members of the minority
about our motivations for bringing this bill forward. They say we are
doing the bidding of the insurance company. Well, I will say to my
colleagues, last week they criticized the plan because the insurance
company did not like it. They say that we are in the pocket of the
pharmaceutical industry when, in fact, our bipartisan bill would cut
drug costs by 25 percent and theirs only by 12 percent. They turn to
the usual excuses that this bill does not do this or it does not quite
do that; Republicans do not like Medicare; or Republicans do not like
seniors.
It seems to me that some Members may be looking too hard for an
excuse

[[Page H5355]]

to vote against this bill. Democracy sometimes looks a bit chaotic.
Those who are watching this debate can attest to that. But I am
disheartened by a story that I saw on the wire last night.
According to the Associated Press: ``Democrats have already begun
testing campaign commercials, preparing to hit Republicans for failing
to offer prescription drug coverage to seniors.''
My friends, put those commercials away. America is sick and tired of
bickering. Americans want us to create a product that will benefit
them.

{time} 1515

Join us in a bipartisan effort to give senior citizens a Medicare-
based prescription drug benefit. The time for demagoguery is over. It
is time to modernize Medicare by adding a prescription drug benefit so
that all seniors can get the chance to enjoy their golden years.
Mr. STARK. Mr. Speaker, I yield myself 10 seconds.
Mr. Speaker, I would inform the House that the minority office of the
Committee on Ways and Means just received a telephone call from the
executive director of the National Alliance for the Mentally Ill, which
one of the previous speakers on the Republican side said endorsed the
Republican bill. They said they do not, that that was a misstatement.
Mr. Speaker, I yield 1 minute to the gentleman from Massachusetts
(Mr. Neal), who understands that the Network of National Catholic
Social Justice Lobby does endorse the Democrat bill and oppose the
Republican bill.
Mr. NEAL of Massachusetts. Mr. Speaker, let me just call attention to
something, with great deference, that the Speaker said. He says this
should be above politics. Is he not right?
Try to square that with the argument in front of us that we were not
even allowed as members of the Democratic Party to bring an alternative
to the floor. Do Members know why we could not bring an alternative to
the floor? Because we would have won. We would have peeled off enough
Members from the Republican side who would have voted for our plan,
because this battle is about certainty versus uncertainty.
Is there anybody who believes that the Republican party would do a
better job with Medicare than we would? We argue that a certain benefit
kicks in on a certain date and people can rely upon it. They argue that
we should subsidize the insurance industry to provide a benefit to the
general citizenry.
Let me quote Chip Kahn, a former Republican staff director of the
Subcommittee on Health: ``We continue to believe that the concept of
the so-called drug-only private insurance simply will not work in
practice. Designing a theoretical drug coverage model through
legislative language does not guarantee that the private insurers will
develop that product in the market,'' end of the argument.
Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 1 minute to the
gentleman from Texas (Mr. Sam Johnson), a member of the Committee on
Ways and Means, a member of the Subcommittee on Health, and a Medicare
beneficiary.
(Mr. SAM JOHNSON of Texas asked and was given permission to revise
and extend his remarks.)
Mr. SAM JOHNSON of Texas. Mr. Speaker, this prescription drug plan
gives American seniors choices. They can choose a new plan or they can
keep the plan they already have. This is in stark contrast, no pun
intended, to the Democrat plan that forces seniors into a government-
run bureaucracy-led program that will leave seniors without the choices
they deserve.
Do Members remember when we were kids and we used to talk to each
other with this antiquated communication system, talking through the
cup and listening on the other end? Today's Medicare program is like
two Dixie cups connected by a string. We can talk to one another, it
works, but it does not meet the communications demands of the 21st
century.
Medicare today sometimes works, but our seniors deserve a program
that meets their health needs in the 21st century. That includes
prescription drugs. This bill will bring Medicare into the 21st
century.
Mr. STARK. Mr. Speaker, I am pleased to yield 1 minute to the
distinguished gentleman from Tennessee (Mr. Tanner), a member of the
Committee on Ways and Means, who knows that the Consortium for Citizens
With Disabilities and the National Academy for Elder Law Attorneys both
support the Democratic bill and oppose the Republican bill.
(Mr. TANNER asked and was given permission to revise and extend his
remarks.)
Mr. TANNER. Mr. Speaker, I am in favor of Medicare revision and all
of the things that the previous speaker said. The problem with the
Republican bill is they are trying make an insurance product out of a
benefit, and one cannot do that. Insurance is a pooling of risk. When
all of the claimants are beneficiaries, there is no pooling or
spreading of risk. Therefore, it has to be a benefit.
Put another way, if everyone's house burned down, we would not be
able to purchase fire insurance in the private marketplace, simply
because they would not be able to offer it.
This is particularly true in the rural areas. Short of importing
people into the rural areas, we do not have HMOs. We do not have
satellite dishes because we think it is cool, we have satellite dishes
because there is no cable TV in rural areas. There are no HMOs in the
rural areas.
Therefore, we have to have a defined benefit under Medicare if we
truly believe in delivering a prescription drug benefit to the senior
citizens, all of them, in this country.
Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 1 minute to the
gentleman from Kentucky (Mr. Fletcher), a medical doctor and someone
who has provided considerable assistance in writing a plan that not
only works but also meets the needs of seniors.
Mr. FLETCHER. Mr. Speaker, I thank the gentleman for yielding time to
me.
Mr. Speaker, I am very disappointed in the minority. They seem to
want to obstruct this very important legislation and benefit for our
seniors for political purposes. That is very disturbing.
Let me tell the Members, this bipartisan bill we have will benefit
606,000 Kentuckians, people like Lois Hamilton from Stamping Ground,
Kentucky, who makes $700 a month and has several hundred dollars of
prescription drug costs. This will pay for her medication so she does
not have to make a choice between food on the table and providing the
medicine she needs to make sure she continues her health.
Let me tell the Members about the partisan plan, I will call it. It
sets up a plan where there is a single government-mandated plan.
Let me talk about the Canadian plan for a minute. There, they cannot
get the latest, even though it is approved by the FDA, they cannot get
the latest medications for breast cancer, for metastatic ovarian
cancer, metastatic colon cancer. That is because they have run a system
under a mandated single plan. That is what the minority wants. Our plan
offers a choice of plans, a voluntary plan that is affordable for
everyone. I encourage my colleagues to support it.
Mr. STARK. Mr. Speaker, I am pleased to yield 1 minute to the
gentleman from Maryland (Mr. Cardin), who knows that the National
Association of Area Agencies and the Center for Medicare Advocacy,
Incorporated, of the Health Care Rights Project both endorse the
Democratic bill and oppose the Republican bill.
(Mr. CARDIN asked and was given permission to revise and extend his
remarks.)
Mr. CARDIN. Mr. Speaker, the Sun Papers, my local paper, in looking
at a plan that solely relies upon private insurance, said in this
morning's editorial, ``Some Congressional Republicans concede it is an
unworkable approach. Even health insurance companies oppose this plan.
They know there is little or no profit in it for them, but plenty of
administrative headaches. The best way to handle a prescription drug
program is through the existing Medicare system.''
Mr. Speaker, that is a system that works on a 3 percent overhead
versus private insurance at 25 percent overhead, one that guarantees
benefits to our seniors, unlike the Republican bill, that does not
guarantee any specific benefit or any specific premium to our seniors.

[[Page H5356]]

Mr. Speaker, the Sun Papers goes on to say, ``The Republican plan
should be rejected. A more sensible approach championed by the
Democrats would be tying prescription drug subsidies to the existing
Medicare program.''
The Sun Papers called the Republican plan ``a placebo, which the
dictionary defines as a substance containing no medication and given
merely to humor a patient.'' This is an apt description of the
Republican plan. It should be rejected.
Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 1 minute to the
gentleman from Arizona (Mr. Hayworth), a member of the committee who
has more than three-quarters of a million Medicare beneficiaries in the
State of Arizona.
Mr. HAYWORTH. Mr. Speaker, I thank the chairman of the Subcommittee
on Health for yielding time to me.
I would echo the words of our speaker, that no senior should be
forced to choose between putting food on the table or paying for the
prescription medications they need. That is just plain wrong.
But by the same token, the question we need to ask today, and why I
rise in support of our bipartisan plan, is that we need to fairly ask,
who is in charge? Mr. Speaker, I come to the floor today to reassert
the authority of seniors to choose the type of benefit they want. That
is the major difference.
Our friends on the left, advocates of big government, say, let the
Washington bureaucrats do it. Let us put the bureaucrats in charge of
the pharmacies. Let us put the bureaucrats in charge of the plans. We
say no, let us ensure freedom of choice. Give seniors choices and let
them decide what is best.
Mr. Speaker, simply stated, the plan on the left would fill the
medicine bottles of America with red tape. We do not need that. Our
seniors need choice. Support the bipartisan plan.
Mr. STARK. Mr. Speaker, I am privileged to yield 1 minute to the
gentleman from California (Mr. Becerra), the next mayor of Los Angeles
and a distinguished member of the Committee on Ways and Means, who
knows that the American Federation of Teachers and the National
Hispanic Council on Aging have both endorsed the Democratic bill and
opposed the Republican bill.
Mr. BECERRA. Mr. Speaker, I truly thank the gentleman for yielding
the 1 minute to me.
Mr. Speaker, what American seniors want is a real plan, a plan that
is defined, a plan that is dependable and guaranteed with regard to the
benefit for prescription drugs, and a plan that fits within Medicare.
Does H.R. 4680 provide any of those things? No, it does not. H.R.
4680 puts $40 billion in the hands of the insurance industry and HMOs
and says, you now go out and offer in the private sector an insurance
policy that right now they are not willing to do, because they do not
like to offer insurance plans for prescription drugs to seniors because
it costs too much.
So by giving them $40 billion, we are giving them a bone saying,
okay, you get $40 billion to offset some of those costs. Come on, this
is your incentive. Go offer plans in the private sector for folks to
buy.
This puts nothing in the hands of seniors except a charade. It is
giving them a coupon and saying, go out and see if you can find
something now for that coupon. Medicare guarantees a right to a doctor,
it guarantees a right to a hospital. It should guarantee a right to
prescription drugs. Vote against this bill.
Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 1 minute to the
gentleman from Minnesota (Mr. Ramstad), a member of the Subcommittee on
Health of the Committee on Ways and Means.
Mr. RAMSTAD. Mr. Speaker, I thank the chairman for yielding me the
time.
Mr. Speaker, I rise in strong support of the bipartisan prescription
drug plan. It is bipartisan. I want to pay special tribute to my friend
and colleague, the gentleman from Minnesota (Mr. Peterson), a member of
the other side of the aisle, a Democrat who worked hand-in-hand with
all of us on the Prescription Drug Task Force to craft this truly
bipartisan, pragmatic plan. I thank the gentleman for putting the
interests of Minnesota seniors ahead of politics.
We should all put the interests of America's seniors ahead of
politics and pass this bipartisan plan today. It truly is, Mr. Speaker,
all about choices. The question we must ask ourselves, if health care
choices are okay for Members of Congress, why are some so opposed to
expanding choices for our seniors?
Let us not try to have it both ways. Let us expand choices for
seniors. Seniors deserve choices in their health care just like younger
Americans, just like Members of Congress. This bill, this bipartisan
bill, guarantees all seniors access to at least two different health
plans.
Do not take choices away from seniors. Let us give them the choices,
the access, to prescription drugs that they deserve.
Mr. STARK. Mr. Speaker, I am pleased to yield 1 minute to the
gentleman from Maine (Mr. Allen), a gentleman who understands that the
American Federation of State, County, and Municipal Employees and
AFSCME retirees both endorse the Democrat plan and oppose the
Republican plan.
Mr. ALLEN. Mr. Speaker, this is a day of shame for the House of
Representatives. The Republican leadership will not allow a vote in a
debate on the Democratic prescription drug benefit under Medicare.
Instead, Republicans have produced a bill that says to our seniors,
HMOs and insurance companies can help you. We will give those companies
your tax dollars, and we will hope they will offer you insurance
coverage.
But the insurance companies are saying loudly and clearly, we will
not provide stand-alone prescription drug coverage. Every day in this
country seniors do not fill their prescriptions. They cut their tablets
in half. They do not take their medicines or do not eat well because
the most profitable industry in this country is charging the highest
prices in the world to people who can least afford it, including our
seniors.
Canadians, Mexicans, HMOs, insurance companies, they all pay far less
than our seniors. The Republican bill is not relief for seniors, it is
a prescription to protect drug company profits and Republican Members
of this House from defeat in November.
Mr. Speaker, when we look at a person who pays $2,300, they will wind
up paying $1,700 out of their own pocket under the Republican plan.
That plan is a fraud.

{time} 1530

Mr. THOMAS. Mr. Speaker, I reserve the balance of my time.
Mr. STARK. Mr. Speaker, I yield 1 minute to the distinguished
gentleman from North Dakota (Mr. Pomeroy), the former insurance
commissioner of North Dakota.
Mr. POMEROY. Mr. Speaker, I hope today's debate represents bipartisan
consensus that we need to help our seniors with the high cost of
prescription drugs. The choice, however, presented on the House floor
falls far short of meeting that need, because we will only be allowed
to vote on the proposition that we should take Federal dollars, send it
to insurance companies and hope that they provide benefits to seniors.
Mr. Speaker, I used to be an insurance commissioner. I regulated
insurance companies. The dollars that the majority would propose for
insurance companies will go to sales commission, it will go to
insurance company executive salaries, it will go to fancy office
buildings. It will not go to the hard coverage that our seniors need
for the high cost of prescription drugs.
It is not the way to go. The way to go is the alternative that we
will not be allowed to vote on, Medicare coverage for prescription
drugs. It is time to update the coverage of the Medicare program and
offer the protection our seniors need. North Dakota's seniors want
Medicare coverage for prescription drugs, not an insurance company
sham.
Mr. THOMAS. Mr. Speaker, I continue to reserve the balance of my
time.
Mr. STARK. Mr. Speaker, I would like to inquire of the gentleman from
California (Mr. Thomas) how many speakers he has remaining.
Mr. THOMAS. Mr. Speaker, it is indeterminate at this time.
Mr. STARK. Mr. Speaker, I yield 1 minute to the gentleman from Texas

[[Page H5357]]

(Mr. Doggett), a member of the Committee on Ways and Means who
understands that the American Association of Mental Retardation and
Elder Care America both endorse the Democratic bill and oppose the
Republican bill.
Mr. DOGGETT. Mr. Speaker, I thank the gentleman from California for
yielding me this time.
Mr. Speaker, we consider this bill today for one reason and one
reason only: the Republicans took a poll. Here are the results in this
report. Their pollster told them that Americans believe, ``Republicans
aren't doing anything for seniors.''
I cannot believe these folks paid good money to learn the obvious.
For the last 6 years, a principal Republican concern for seniors has
been how to dismantle Medicare, or in the words of their great leader,
how to let Medicare ``wither on the vine.''
Then this pollster gave them four pages of what were called ``phrases
that work'' to explain away the well-justified feeling of the American
people that Republicans are totally indifferent to the plight of
seniors who have to choose between purchasing groceries and
prescription medications.
And here are particularly important words from Public Opinion
Strategies delivered to the Republican Caucus: ``It is more important
to communicate that you have a plan than it is to communicate what is
in the plan.''
This is not a plan. It is a ploy. The Republican Congress is a
prescription for failure.

Announcement by the Speaker Pro Tempore

The SPEAKER pro tempore (Mr. LaHood). The Chair would ask all Members
to abide by the time that they are allotted.
Mr. THOMAS. Mr. Speaker, it is now my pleasure to yield 1 minute to
the gentleman from Florida (Mr. Foley), a member of the Committee on
Ways and Means.
Mr. FOLEY. Mr. Speaker, maybe people should switch to decaf around
here. A little excited. A little tense. I know they want to leave the
Capitol, but they should remain and discuss the issue.
It is so complicated, our Medicare prescription drug coverage. It is
so hard to understand. And yet every Member of Congress is entitled to
it. I do not hear any of them turning in their cards because it is
difficult to get prescription drug coverage.
They can go to the pharmacy. They can order from Merck-Medco. They
can go to any place in America and get covered under their policy here,
provided by the taxpayers, at the House of Representatives.
But today, Mr. Speaker, a similar plan is being offered for our
seniors and is this abomination? Now, we can have disagreements on
policy; we can certainly have disagreement on how we arrive. But I
would suggest this is a good plan. And if we wait 48 hours, Al Gore
will endorse it; and the President will support it. He did not like
marriage penalty elimination. It was too expensive. Give him a month;
he will support it and trade us drugs.
Mr. Speaker, I urge my colleagues to vote for a very good,
responsible policy and give the seniors drugs they need.
Mr. STARK. Mr. Speaker, I yield 1 minute to the gentleman from
Louisiana (Mr. Jefferson), a distinguished member of the Committee on
Ways and Means who understands that the Friends Committee on National
Legislation and the International Union of United Automobile,
Aerospace, Agriculture and Implement Workers both support the Democrat
bill and oppose the Republican bill.
Mr. JEFFERSON. Mr. Speaker, I thank the gentleman from California
(Mr. Stark) for yielding me this time.
Mr. Speaker, I am glad my colleagues on the other side of the aisle
have finally turned to a discussion of our Nation's most pressing
priority, the need to ensure affordable access for seniors to
prescription drugs. Unfortunately, Mr. Speaker, the debate is all that
we really have.
The sharp rise in prescription drug prices has placed an intolerable
burden on our Nation's seniors. This burden is aggravated by the fact
that there is no Medicare prescription drug benefit. Three-fourths of
Medicare beneficiaries lack decent, dependable coverage of prescription
drugs.
Our Nation's seniors are not fooled by this legislation that is on
the floor today, Mr. Speaker, and neither are we. A clear majority of
senior and consumer groups have labeled this legislation a ``sham,''
providing no real hope of a solution.
We need a bill that will afford a solid guarantee of a drug benefit
for all Medicare beneficiaries, not a bill that relies on the profit-
driven whims of the private insurance industry. If Medicare is indeed
an entitlement program for seniors, should we not pass a drug benefit
bill that clearly lets seniors know what drug benefit they are going to
get and they are entitled to?
Mr. Speaker, the program we have in front of us makes no sense. I
hoped for a real choice today. It is a shame we do not have it. Our
Nation's seniors deserve better.
Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 1 minute to the
gentlewoman from Connecticut (Mrs. Johnson), and I hope this is not
disruptive of the debate, who wishes to talk about something that is
actually in the bipartisan plan.
Mrs. JOHNSON of Connecticut. Mr. Speaker, I thank the gentleman from
California for yielding me this time.
Mr. Speaker, in my earlier remarks, I did mention the breadth of
formulary that seniors would have access to under the Republican bill,
because they would have access to competing plans. So they would have
access to a number of prescription drugs in every category, and
assurance that off-label use of drugs, so important to cancer
treatment, will be at their beck and call.
But there is another wonderful provision of the bill that I want to
point out to my colleagues. It allows our seniors to participate in a
demonstration project if they are diagnosed with advanced stage
congestive heart failure, diabetes, or coronary heart disease.
These are the very seniors with the highest drug costs, and
participating in these disease management programs will enable them to
get their pharmaceuticals essentially covered and through a disease
management approach they will get support in recovering and adopting
preventative health life style changes, following all of their doctor's
orders, that will improve their health and reduce their health care
costs all the while covering their drug costs. It has been proven that
disease management lowers hospital costs, lowers doctor costs, lowers
emergency costs. Good for Medicare and good health for seniors.
Mr. STARK. Mr. Speaker, I yield such time as he may consume to the
gentleman from Pennsylvania (Mr. Mascara).
(Mr. MASCARA asked and was given permission to revise and extend his
remarks.)
Mr. MASCARA. Mr. Speaker, I rise in opposition to H.R. 4680.
Mr. Speaker, I come to the floor today to air my deep concerns
regarding the lack of prescription drug coverage for many of our
nation's seniors.
Last year I introduced H. Con. Res. 152, which called upon Congress
to fix this problem. The bill we are debating today does nothing to fix
the problem.
I am sure my colleagues here in the House are aware of enormity of
this issue. They know that upwards of 14 million seniors in this nation
are without any kind of prescription drug benefit. They know that
millions of seniors are suffering in ways that are morally wrong,
especially for such a wealthy and caring nation.
How can we on one hand give away billions of dollars in foreign aid,
yet turn our backs on seniors who often times must choose between
buying food or buying prescription drugs.
This bill can't see the forest for the trees. It does nothing to
solve the problem on how to provide 13 million seniors with adequate
prescription drugs at an affordable price.
This bill H.R. 4680 does not accomplish that. I oppose it and ask my
colleagues to vote ``No.''
Mr. STARK. Mr. Speaker, I yield such time as he may consume to the
gentleman from Indiana (Mr. Visclosky).
(Mr. VISCLOSKY asked and was given permission to revise and extend
his remarks.)
Mr. VISCLOSKY. Mr. Speaker, I rise in opposition to H.R. 4680.
Mr. Speaker, I rise today to express my strong opposition to H.R.
4680, the Medicare Rx 2000 Act. This overly complicated bill fails to
guarantee affordable prescription drug coverage for all seniors and
disabled persons. Prescription drug coverage for seniors is one of the
most serious issues facing this Congress, and it is time to stop making
empty promises.

[[Page H5358]]

I am a strong supporter of responsible Medicare prescription drug
coverage for our senior citizens. Coverage that ensures that seniors do
not have to make life and death monetary choices, coverage that at the
same time does not bust the budget and represents a promise we can
keep. I therefore believe that any program we pass must have a co-pay,
premium, and benefit cap. It is important that we pass meaningful and
real prescription drug coverage. To do less is a cruel hoax to the
elderly of this country.
When Medicare was created in 1965, prescription drugs did not play a
significant role in the nation's healthcare. Today, prescription drugs
have become an increasingly important part of seniors' health care. The
drugs that are now routinely prescribed for seniors to regulate blood
pressure, lower cholesterol, and ward off osteoporosis had not even
been invented when Medicare was created in 1965. Instead of frequent
doctor visits and expensive hospital stays, today's innovative drugs
keep more seniors out of the doctor's office and away from hospitals.
Unfortunately, drug prices have been rising rapidly. National
spending on prescription drugs increased 51 percent between 1990 and
1995. More than one-third of seniors on Medicare spend over $1,000 a
year on their drug prescriptions. There are approximately 13 million
seniors with no prescription drug coverage, and another 13 million have
coverage which is inadequate, costly, or both. As this trend continues,
drug expenses threaten to erode many seniors' modest incomes even
further, placing more and more Americans in a difficult position
reminiscent of an earlier era.
A constituent of mine, Eunice Bailey, a 69-year-old resident of
Hammond, Indiana, receives a monthly Social Security check of $840.
Unfortunately, Ms. Bailey is not only a diabetic, but suffers
additionally from high blood pressure, high cholesterol, arthritis, and
osteoporosis. In an average month, Ms. Bailey can spend close to $300
for her prescription drugs, not to mention $225 in rent, $280 in
groceries, and $120 for her utilities and telephone. This leaves Ms.
Bailey with a deficit of $85. Since she cannot possibly afford to buy
medicine and pay for her basic living expenses, Ms. Bailey saves money
by either splitting her pills in half, or simply does not purchase her
medicine at all. In addition, Ms. Bailey sometimes finds herself
reducing the amount of food she purchases, a dangerous thing to do
considering she is a diabetic. I find this absolutely appalling. In a
country as wealthy and as good as the U.S., no citizen should have to
decide between buying food or buying medicine.
Unfortunately, the Republican bill provides subsidies to private
insurance companies while denying a real prescription drug benefit for
all. The plan would only provide financial incentives to encourage
private health insurance companies to offer ``Medigap'' policies to
provide prescription drug coverage. This approach simply will not work.
It will force seniors to deal with private insurance companies rather
than having the choice of getting their prescriptions through Medicare.
The Health Insurance Association of America has even stated that many
private insurance companies still will not offer Medigap drug policies
because they will not want to assume the financial risks. The end
result is that millions of individuals will not be guaranteed access to
prescription drug coverage at an affordable price.
Additonally, it will do nothing to control the cost of drugs since it
would not provide for direct negotiations with prescription drug
companies. Instead, it creates small purchasing groups that will have
little leverage in getting better prices for seniors. We need to be
providing seniors the same benefits that other large purchasing groups,
like HMOs, currently get.
The only way to guarantee an affordable prescription drug coverage
for all elderly and disabled persons is to expand the Medicare program
to include prescription drug coverage. Like the existing hospital and
medical coverage under Medicare, a new prescription drug program should
benefit everyone, not just the insurance companies. There is no reason
why we cannot be fiscally responsible while balancing people's health
care needs. Providing a prescription drug benefit for our seniors will
result in savings to both consumers and American taxpayers by reducing
expensive hospital stays and medical bills.
As you cast your vote this week, remember that the Republican plan is
a huge misstep toward providing real Medicare prescription drug
coverage for our seniors. A stand-alone, drug-only policy will not
work. It provides false hope to people who need help, and will do more
harm than good. It is time to move past the empty rhetoric and join
together in the fight to provide substantive assistance to America's
senior citizens like Eunice Bailey.
Mr. STARK. Mr. Speaker, I yield 1 minute to the gentlewoman from New
York (Mrs. McCarthy).
Mrs. McCARTHY of New York. Mr. Speaker, I would like to speak as a
nurse. I can tell my colleagues, in the last few months these are the
bills that my senior citizens have sent to me. And I am telling my
colleagues that the plan that is being put on the floor today will not
help my senior citizens and that is a shame.
I am here to fight for my seniors so they can take their medications.
I think what everyone is forgetting, the majority of people that cannot
buy their medications cannot also afford the premiums. When we see the
insurance companies saying this plan cannot work, then I as a nurse
have to stand up and say let us do something right. Let us take care of
our seniors, and let us stop playing politics with this.
This will help so many of my seniors if we could do something for
them. Let us think about how much money we are going to end up saving
if our seniors take their medications, so they do not end up calling
for an ambulance, ending up in the emergency room causing our health
care costs to go up even more than they are.
Mr. THOMAS. Mr. Speaker, it is now my pleasure to yield 1 minute to
the gentleman from Florida (Mr. Shaw), who has more than 2.7 million
Medicare beneficiaries in his State.
Mr. SHAW. Mr. Speaker, I thank the gentleman from California for
yielding me this time.
Mr. Speaker, I want to compliment the gentleman and the colleagues
that originally cosponsored this bipartisan plan on both sides of the
aisle.
Mr. Speaker, there can be criticism for this plan. There is no
question about that. No plan is perfect. But let us look closely at
what this plan offers. It offers choice. Our seniors want choice. That
is an important thing.
It offers catastrophic care on drugs, and that is tremendously
important. The expense of drugs is becoming more and more expensive as
they become more and more sophisticated and more and more part of our
health care plan.
This is a tremendously important step. Can we do more? Yes. But
should we get into a bidding war? Should we turn this into an auction?
No. We need to put this plan into place. It is a good plan. We can say
it is a good first step; we can do more. This is the plan that we are
working with, and this is the plan that I am very hopeful that we will
retain our bipartisan support for.
Mr. Speaker, I rise in support of H.R. 4680, the Medicare
Prescription 2000, which is a historic first step towards modernizing
the Medicare health benefits that nearly 40 million senior citizens and
disabled citizens of all ages rely on for all their health care needs.
Mr. Speaker, I have the honor of representing a congressional
district that is home to the largest number of senior citizens and
Medicare beneficiaries in America. So perhaps more than other member of
this House, I am concerned about doing what is best for preserving and
improving the Medicare program which has served seniors and the
disabled so well for the past thirty-five years.
Is the current Medicare program perfect? Does the current Medicare
program cover every service and meet every medical problem that seniors
and the disabled have? We all know that it doesn't. No one knows better
than I do, as Chairman of the House Social Security Subcommittee, that
both the Social Security and Medicare programs need to be updated in
order to be prepared for the large wave of baby boomers who will begin
retiring soon. This Congress, and the last Congress and the next
Congress have been grappling with the many competing ideas for
modernizing Social Security and Medicare. There clearly is no consensus
on what the silver bullet is for Social Security or for Medicare. What
is clear is that I am committed to work with Chairman Archer and
Chairman Thomas and all my colleagues on the Ways and Means Committee
and, indeed, all the members of this House to improve these two
programs that provide security for the seniors I represent. What I
would say to my colleagues who claim that H.R. 4680 isn't adequate, is
that it is a very good first step. Let me be clear, however, this is
just not just a symbolic first step--this bill will provide real
prescription drug coverage for any senior who chooses it.
As a matter of fact, choice is one of the most important features of
Medicare Prescription 2000. H.R. 4680 preserve's senior's choice on
many different levels. First, I respect my seniors wishes to choose the
coverage that is best for their individuals health care needs. I also
respect individuals wishes to choose to not participate in one of these
new Medicare prescription drug programs. Second, many of my seniors--
over 150 of them--have taken the time to write and call me over the
last month in order to let me know how happy they are with the
prescription drug coverage

[[Page H5359]]

and other benefits they are receiving through their Medicare+Choice
HMOs. Mr. Speaker, this bill will respect their wishes to choose to
remain in their Medicare+Choice plans. Third, this bill also protects
the many retirees who have excellent retiree prescription drug coverage
through their former employer. Finally, and most importantly, this bill
gives seniors who want to participate the choice between at least two
different prescription drug plans no matter where they live. Whether a
senior lives in a large metropolitan area like the greater Miami-Ft
Lauderdale-Palm Beach area or in the rural areas of Central Florida or
in the Mid-West, every senior will be able to choose a plan that is
best for them--not a plan that a government bureaucrat imposes on them
and every other senior citizen in America. I, for one, do not believe,
like the President's does, that the Health Care Financing
Administration should make this choice for seniors. Under his plan, the
President wouldn't give seniors any such choice. It would force seniors
to choose between a government-run plan or nothing.
Another important provision of this bill is peace of mind for every
senior citizen who fears that they and their loved ones could be faced
with large drug bills reaching into the hundreds of thousand of
dollars. The Medicare Prescription 2000 bill protects all seniors from
catastrophic drug expenses--once a senior's drug costs exceed $6000 in
a year, this plan will completely cover the rest of their drugs for the
year. Unfortunately, the President's plan did not protect beneficiaries
from these huge expenses until our Republican plan came out--now the
President has agreed that this was a major oversight in his plan and
has agreed to support it.
Mr. Speaker, this plan also has special provisions to make sure that
low-income seniors will have all their drug expenses covered by
Medicare. And this plan helps make prescription drugs more affordable
for all seniors by ensuring that they get the same drug-price discounts
that each of us enjoys when we buy drugs through our private health
insurance plans. The Congressional Budget Office has calculated that my
seniors will save at least 25 percent on every prescription they buy
under our plan. Other experts estimate that seniors could save between
30-35 percent on every drug purchase.
I would like to close by saying that the Medicare Prescription Drug
2000 bill will help the many seniors I represent who currently have no
coverage. Am I satisfied that this is all Congress needs to do to
improve the Medicare? No, I am not. But I am satisfied that this is a
good place to start--just as Chairman Archer and I have done in
announcing the outlines of our Social Security Reform proposal. By
announcing the Archer-Shaw plan, we have started a rush of excellent
Social Security reform ideas and suggestions from both parties. I
believe that passage of H.R. 4680 will engender the continuation of a
similarly energetic debate on how to build upon this newly created
Medicare prescription drug benefit. I urge all my colleagues to vote
yes on Medicare Prescription 2000.
Mr. STARK. Mr. Speaker, I yield 1 minute to the gentleman from Texas
(Mr. Turner), who recognizes that the American Medical Student
Association and the American Network of Community Options and Resources
both support the Democratic bill and oppose the Republican bill.
Mr. TURNER. Mr. Speaker, the House leadership has twisted the rules
today so that we have only one choice: their bill or no bill. So let us
talk about what their bill does.
First of all, it gives millions of dollars to insurance companies
instead of giving it back to seniors in the form of lower prescription
drug prices.
Secondly, the bill leaves out middle-income Americans. Middle-income
Americans cannot get any help. All they are told is to go buy
insurance. There are millions of middle-income Americans who are
struggling to pay the costs of high prescription medications.
Thirdly, this bill simply rewards the pharmaceutical industry who has
spent almost $100 million trying to be sure that this bill that is on
the floor today is the only bill we have a chance to debate.
A group called Citizens for Better Medicare, formed by the
pharmaceutical industry, has worked hard to be sure that this day
arrives in the form that we have it.
Finally, the Republican bill lets the greedy HMOs decide what
medicines seniors get. We believe seniors and their doctors should
decide what kind of medications they get.
Mr. THOMAS. Mr. Speaker, I yield myself 30 seconds. Mr. Speaker, I
submit for the Record a letter from the National Alliance for the
Mentally Ill. I initially said they supported H.R. 4680, which had been
contradicted by the other side. And I believe the Record should show
that the letter from the National Alliance for the Mentally Ill shows
support for H.R. 4680. No number of denials will change the fact that
they are in support.
Mr. Speaker, the letter reads as follows:
National Alliance

for the Mentally Ill,

Arlington, VA, June 27, 2000.
Hon. J. Dennis Hastert,
Speaker, House of Representatives,
Washington, DC.
Dear Mr. Speaker: On behalf of the 210,000 members and
1,200 affiliates of the National Alliance for the Mentally
Ill (NAMI), I am writing to thank you for bringing forward
the Medicare Rx 2000 Act (HR 4680). This legislation offers
tremendous potential for assisting Medicare beneficiaries
with severe mental illnesses who do not currently have access
to outpatient prescription coverage.
As the nation's largest organization representing people
with severe mental illnesses and their families, NAMI has
long argued for the need to modernize the Medicare program
and include coverage for outpatient prescription drugs. The
past decade has seen tremendous advances in treatment for
severe mental illnesses such as schizophrenia, bipolar
disorder and major depression. This is especially the case
with respect to new medications such as atypical anti-
psychotic drugs for schizophrenia and selective serotonin
reuptake inhibitors (SSRIs) for bipolar disorder and major
depression. Unfortunately, the lack of outpatient
prescription coverage within the Medicare program has left
beneficiaries without access to the coverage for the
treatment they need.
NAMI is pleased that both Congress and the President have
made legislation extending an outpatient drug benefit to
Medicare a top priority in 2000. As part of NAMI's advocacy
on this critically important issue, we have set forward a set
of key objectives that we believe must be a part of any
legislation Congress acts on this year. NAMI was pleased to
offer these policy objectives in testimony to the Ways and
Means Committee earlier this year. On each of these criteria,
HR 4680 appears to meet the pressing needs of Medicare
beneficiaries living with severe mental illnesses.
Eligibility for non-elderly disabled beneficiaries on the
same terms and conditions as senior citizens--NAMI is pleased
that HR 4680 does not restrict coverage to elderly Medicare
beneficiaries and requires plans offering prescription
coverage to do so on a non-discriminatory basis during
specified open enrollment periods,
Affordable premiums, deductibles and cost sharing
requirements--NAMI is pleased that HR 4680 specifies uniform,
community-rated premiums for all beneficiaries and allows
those below 135% of poverty to participate at no cost (with
subsidized premiums for those between 135% and 150% of
poverty), 135% and 150% of poverty),
Adequate coverage for catastrophic drug expenses--NAMI is
extremely pleased that HR 4680 includes a ``stop loss''
provision that will protect beneficiaries whose out of pocket
cost exceed $6,000 per year,
Bar on the use of overly restrictive formularies--NAMI is
strongly supportive of provisions in HR 4680 designed to
prevent use of overly restrictive formularies that limit
access to the newest and most effective psychiatric
medications. NAMI is also pleased that HR 4680 requires a
process for beneficiaries to access coverage for medically
necessary non-formulary medications in cases where a
physician determines that a formulary medication is not as
effective.
Mr. Speaker, as you know, 5 million Medicare beneficiaries
are people with disabilities under age 65 (13% of the 39
million Americans on Medicare). It is important to note that
30% of these 5 million Medicare beneficiaries are non-elderly
people with disabilities have incomes below 100% of the
federal poverty level and that 63% are below 200% of poverty.
Further, it is estimated that a quarter of these non-elderly
disabled Medicare beneficiaries have a severe mental illness.
NAMI feels strongly that this legislation is critically
important to their ability to access adequate coverage for
their treatment needs. While no single Medicare prescription
drug proposal meets the unique needs of each and every
beneficiary with a severe mental illness, it is clear that HR
4680 addresses many of the key concerns that NAMI believes
must be a part of any legislation Congress acts on this year.
On behalf of NAMI's consumer and family membership, we
would like to thank you for moving this legislation forward.
NAMI looks forward to working with all House members--on both
sides of the aisle--and the Clinton Administration to ensure
that Medicare prescription drug legislation is enacted in
2000.
Sincerely,
Laurie M. Flynn,
Executive Director.

{time} 1545

Mr. STARK. Mr. Speaker, may I inquire of the time.
The SPEAKER pro tempore (Mr. LaHood). The gentleman from California
(Mr. Stark) has 1\1/2\ minutes remaining. The gentleman from California
(Mr. Thomas) has 4\1/2\ minutes remaining.
Mr. STARK. Mr. Speaker, I reserve the balance of my time.

[[Page H5360]]

Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 1 minute to the
gentleman from Iowa (Mr. Nussle), someone who has been extremely
important in helping us shape the rural assistant portions of this
particular legislation.
Mr. NUSSLE. Mr. Speaker, I thank the gentleman from California for
yielding me this time.
Mr. Speaker, as the chairman of the Rural Health Care Coalition, one
of the first things that I looked at in the draft of this particular
prescription drug bill was whether or not it provided seniors choice,
whether it provided them access, security and affordability.
First of all, on choice, the seniors that I represent in Iowa, they
want to know that they are going to have choices in this particular
bill. They are tired of a one-size-fits-all government program called
Medicare that tells them exactly what to do, when to do it, how to do
it, and takes the decision making away from doctors. This bill gives
them a prescription drug plan to choose from.
Second it provides access. In rural Iowa, one has a real concern
about whether or not the local pharmacy is going to be involved. This
particular bill gives them access to their local pharmacies.
Finally, security and affordability, all rural seniors will be
guaranteed a prescription drug benefit just like they are guaranteed
drug benefits under all other Medicare benefits, and that once they
reach $6,000, they will be held harmless.
This is the bill for rural Iowa, for rural America. Please support
this bill.
Support H.R. 4680 for two important reasons.

i. prescription drug benefit

H.R. 4680 provides rural seniors with choice:
All seniors will have at least two different prescription drug plans
to choose from.
Rural seniors have to rely too much on Washington bureaucratic ``one-
size fits all'' solutions to their health care.
This bill provides rural seniors with the ability to adapt drug
coverage to meet their individuals needs, not to adopt coverage
dictated by bureaucrats that don't fully understand the uniqueness of
rural health care.
H.R. 4680 provides rural seniors with access:
All rural seniors will have access to their local pharmacies.
Pharmacists play a vital role in the delivery of health care to rural
seniors. This relationship will not be compromised under this bill.
Medicare must require plans to provide access to ``bricks and
mortar'' pharmacies.
Seniors who choose to receive their drugs through the mail will still
be able to under this bill.
Medicare will work to ensure prescription drug plans provide seniors
with the balanced benefits of being able to both consult with their
local pharmacist face-to-face and receive their medications directly in
their mailbox.
H.R. 4680 provides rural seniors with security and affordability:
All rural seniors are guaranteed a prescription drug benefit, just
like they are guaranteed all other Medicare benefits.
All rural seniors will have the security of full catastrophic
coverage once their drug bills reach $6,000.
Because of the market-based approach, all rural seniors will be
provided with negotiated drug coverage savings.

ii. medicare+choice

The BBA took steps to provide rural America with health care choices.
However, these choices have been slow in reaching rural communities.
Because the delivery of health care in rural areas tends to be more
efficient and wage rates in rural areas are typically lower, the
Adjusted Average Per Capita Cost (AAPCC), the measure at which managed
care plans are reimbursed under Medicare, for rural counties is less
than other counties. As such, rural areas have difficulties in
attracting health care competition.
In order to alleviate the discrepancy in AAPCC payments, the BBA: (1)
established a national floor payment, and (2) changed the formula used
to calculate the AAPCC to a blended rate of 50% local cost and 50%
national average.
Unfortunately, annual Medicare updates have not provided enough
funding to fully fund the blend.
H.R. 4680 addresses these problems by: (1) raising the national floor
payment to $450; (2) eliminating the budget neutrality factor to fund
the blend; and (3) allows plans below the national average to negotiate
for a higher AAPCC.
H.R. 4680 takes a good step in the right direction towards
stimulating health care competition in rural America.
Mr. STARK. Mr. Speaker, I yield 30 seconds to the distinguished
gentleman from Tennessee (Mr. Clement). The gentleman from Tennessee
understands that the National Senior Service Corps Directors
Association and the American College of Nurse Midwives both support the
Democratic bill and oppose the Republican bill.
(Mr. CLEMENT asked and was given permission to revise and extend his
remarks.)
Mr. CLEMENT. Mr. Speaker, I rise in opposition to the Republican
prescription drug plan. First, there is no guarantee that these private
insurance coverage companies will provide an affordable drug plan to
seniors. Second, the Democratic plan that will not be considered today
offers seniors a low, affordable premium. Third, the Republican plan
would require seniors to shop around and find an HMO or insurance
company to offer them coverage.
Mr. Speaker, under the Republican plan, the catastrophic coverage for
seniors does not become effective until after $6,000 is spent while the
Democratic plan is $4,000.
Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 1 minute to the
gentleman from Michigan (Mr. Camp), a member of the Subcommittee on
Health of the Committee on Ways and Means.
(Mr. CAMP asked and was given permission to revise and extend his
remarks.)
Mr. CAMP. Mr. Speaker, yesterday, I received a call from one of my
constituents; and he told me that he currently receives prescription
drug coverage from his employer. He wanted to ensure that prescription
drug coverage was available for seniors that do not have any coverage
at all, but he did not want to give up on the coverage that he already
has.
The bipartisan legislation that we are discussing today protects him
and everyone. It allows seniors with coverage to keep their plan. It
allows seniors without coverage to choose from two plans. Not only can
they elect to receive prescription drug coverage, they can elect not to
receive it if they do not need it.
Our seniors spend more than any other age group on prescription
drugs. This legislation brings the benefits of marketplace and
negotiating power to our seniors. By negotiating with pharmacies and
manufacturers, plans will seek the best possible discount. In fact,
according to the nonpartisan Congressional Budget Office, our plan, the
bipartisan plan, is expected to result in twice the reduction in drug
costs as the alternative.
I ask Members to support the bipartisan drug plan.
Mr. STARK. Mr. Speaker, I yield such time as he may consume to the
gentleman from Illinois (Mr. Davis).
(Mr. DAVIS of Illinois asked and was given permission to revise and
extend his remarks.)
Mr. DAVIS of Illinois. Mr. Speaker, I rise in opposition to the
Republican proposal for a prescription drug benefit for seniors.
Mr. Speaker, I rise today in opposition to the Republicans' proposal
for a prescription drug benefit for seniors. The House leaderships'
decision to block a Democratic proposal shows their unwillingness to
discuss a real drug benefit for seniors. This stonewalling is a sham of
the legislative process.
As we know, the Medicare program provides significant health
insurance coverage for more than 39 million seniors and disabled
beneficiaries. However, the program fails to offer protection against
the costs of most outpatient prescription drugs.
Prescription drug prices continue to rise and the percentage of
Americans over age 65 is sharply on the rise. Medicare is therefore in
need of modernization and the addition of a drug benefit for all
beneficiaries, regardless of income level or location. The Republican
plan falls far short of addressing the reality of the problem that many
of our seniors face. I oppose the Republican proposal for three chief
reasons:
First of all, their proposal is based on the faulty premise that
insurance companies will write prescription drug plans for seniors. The
insurance industry admits that this private insurance model will not
work and leaders in the industry deny that such plans will even be
offered. Charles N. Kahn, President of the Health Insurance Association
of American--a group comprised of 294 insurance companies--told The New
York Times on Feb. 21, 2000: ``I don't know of an insurance company
that would offer a drug-only policy like that or even consider it.''
Mr. Kahn also comments that ``Private drug-insurance policies are

[[Page H5361]]

doomed from the start. The idea sounds good, but it cannot succeed in
the real world.''

Even if insurance companies write drug plans for seniors, there will
be instability in coverage. It is well known that health insurers would
use the system to move in and out of markets depending on their
advantage, not seniors' health. We see many examples of such pullouts
today. This is not right. The Republican plan stresses competition in
an already-flawed private Medigap insurance market rather than adding a
prescription drug benefit to Medicare.
Secondly, the Republican proposal is not affordable: This plan offers
no defined benefit. It appears to specify only the ``stop loss
amount''--$2,100/yr, maximum limit on beneficiary out-of-pocket costs--
while private insurers could define deductibles, co-pays, and benefit
limits. Also, seniors would pay a $250 deductible. Furthermore, their
plan would break up seniors into various private plans--if even
written--and thus their bargaining power would be significantly
reduced.
Finally, the Republican plan is not accessible to all Medicare
beneficiaries: their plan fails to provide direct premium assistance
for low- and middle-income Medicare beneficiaries. Any senior with an
income above $12,600 will not have the assurance of lower premiums.
This plan, therefore, does not protect against the risk of industry
``cherry picking'' and the negative selection of the sickest and
disabled seniors. This is a Darwinian scheme where only the strongest
survive.
Thus, I believe the Republican plan falls far short of providing a
real drug benefit for our nation's seniors. The leaderships' denial to
hear our alternative is a travesty.
I therefore rise in opposition to the Republican proposal.
Mr. STARK. Mr. Speaker, I yield myself such time as I may consume to
bring this portion of the debate on our side to an end.
Mr. Speaker, we are denied, not only the last word, which I am sure
the gentleman from California (Mr. Thomas) will have, but we have been
denied the opportunity to offer a bill.
Had we had the opportunity, we would of course have suggested that we
spend more money, hundreds of billions of dollars more money to provide
a seamless guaranteed dependable benefit to seniors who could have the
unknowing security that the government would be there in the last
resort if no insurance company showed up, to see that they got the
pharmaceutical drugs at a reasonable price.
At a time in this country when we are so wealthy and when the
surpluses are predicted to be many trillions of dollars, to me it is
obscene to be sitting, offering to give away inheritance taxes and
telephone taxes and taxes that nobody really cares about when we could
be insuring our seniors, indeed we could be insuring our children and
other folks in this country. But, no, this money is denied and is
reserved for the wealthy few who would benefit from Republican tax
cuts.
Oppose the Republican bill, please, and support whatever minor motion
to recommit we are finally allowed.
Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 1 minute to the
gentleman from Georgia (Mr. Collins), a member of the Committee on Ways
and Means.
(Mr. COLLINS asked and was given permission to revise and extend his
remarks.)
Mr. COLLINS. Mr. Speaker, I rise in support of this prescription drug
bill for our seniors. It will be voluntary for our seniors. It will
give them the freedom to choose as to whether or not to stay in a plan
they may already be in or to choose this plan which they may need
assistance for.
It will assist low income. It will also assist those who have high
drug costs and catastrophic coverage. Others it will assist in a
different way. It will help reduce the cost of drugs by having the
administration deal with drug companies. It is very similar to the way
we do with the Federal Employee Health Benefit Program, lowering the
cost of those who have to pay the co-pay and those who would be between
the low income and the catastrophic.
It is not a one-size-fits-all; that is for sure. I respect those who
have the program or the plan that one size does fit all. But we must be
aware of their plan, because of the back-end costs of their plans. We
must be aware of the costs of any plan because, under the pay-as-you-go
system, those who work today will pay the benefits.
It is not a perfect plan, but it is moving in progress, a work in
progress.
Mr. THOMAS. Mr. Speaker, I yield myself the balance of the time.
Mr. Speaker, this really is an opportunity for the House of
Representatives to address a problem that, frankly, needed to be
addressed for some time. The two plans have a lot in common, but I do
think people need to understand that the Democrats' plan does not
afford seniors choice.
The bipartisan plan, not only affords them choice, but requires at
least two options in every area of the country.
The way in which we have structured our plan, the Congressional
Budget Office says we save seniors twice as much as the Democrats' plan
out-of-pocket. We provide pocketbook protection now. It is not true of
the Democrats' plan because they wrote a plan to fit a budget window.
Not until 2006 does their catastrophic or out-of-pocket protection plan
really begin.
AARP, the American Association of Retired Persons, has said the
bipartisan plan is in Medicare, notwithstanding whatever may be said on
the floor today. The American Association of Retired Persons has said
this is an entitlement regardless of whatever may be said on the floor
today.
Most importantly, it provides seniors comfort and assurance that the
bipartisan plan is a prescription drug benefit in statute. No amount of
an attempt to confuse seniors should alter that position. This is in
Medicare. It is an entitlement, and the benefit is in statute. Do not
take my word for it. Take the word of the American Association of
Retired Persons. Vote yes on H.R. 4680.
The SPEAKER pro tempore. The gentleman from Virginia (Mr. Bliley) and
the gentleman from Michigan (Mr. Dingell) each will control 30 minutes.
The Chair recognizes the gentleman from Virginia (Mr. Bliley).
Mr. BLILEY. Mr. Speaker, I yield myself 5 minutes.
Mr. Speaker, I am pleased to give my full support to the bill before
the House today, H.R. 4680, the Medicare Prescription Drug Act of 2000.
This bill would provide for a universal, voluntary, and affordable drug
benefit to Medicare beneficiaries.
I have been studying this issue for some time. In addition to the
five hearings our Subcommittee on Health and Environment held on this
issue, I worked closely with a group of my colleagues on the Committee
on Commerce for months studying different models for delivering drug
coverage to seniors that offer them choice and affordability.
Through this effort, a number of things have become clear to me.
First, seniors want security, and they want choice. H.R. 4680 ensures
that every Medicare beneficiary will have access to at least two
choices of drug coverage everywhere in America. This proposal also
provides, for the first time in the Medicare program, protections for
those beneficiaries who have the highest out-of-pocket spending on
drugs. True security is knowing one will not have to mortgage one's
home or become Medicaid dependent because of one's prescription drug
needs.
Second, HCFA's house is not in order and cannot be asked to take on
the task of administering a new drug benefit. One example of problems
we have experienced with HCFA in the area of drug coverage is its
policy on coverage for self-injectable drugs. Prior to August 1997,
HCFA covered self-injectable drugs when administered by a physician. In
August of that year, however, HCFA issued a program memorandum to its
carriers instructing them not to pay for drugs that can usually be
self-administered, regardless of the patient's health condition.
As a result of this instruction, many Medicare beneficiaries lost
coverage for drugs that had been previously covered. These were MS
victims and people in the late stages of cancer who could not possibly
be expected to inject themselves with a needle. I find this totally
unacceptable and am pleased that this bill includes language to
permanently correct this problem.
H.R. 4680 creates the Medicare Benefits Administration which will
administer the new drug program as well as the Medicare+Choice program.
I am not convinced that HCFA can be reformed to better meet beneficiary
needs. More fundamental change is needed, a shift in the culture of the
agency from one that micromanages benefits and administers prices to
one that is more flexible, that adapts to changes in the marketplace,
and has

[[Page H5362]]

the expertise to negotiate with providers on behalf of Medicare
beneficiaries. I believe the Medicare Benefits Administration is
designed to meet beneficiaries' needs.
Third, many seniors have drug coverage today that they like and want
to keep. A key feature of our plan is that it is voluntary, and it
preserves the good coverage that many seniors have today. Our proposal
encourages employers to continue providing coverage by giving them
access to the new reinsurance pool for beneficiaries with extraordinary
drug costs.
Mr. Speaker, Medicare needs to be modernized to reflect how health
care is delivered today. By denying the seniors the types of choices we
all have as Members of Congress, we are relegating them to a system of
care that does not meet the high standards we want for ourselves, our
staffs, and our families.
I have been in this institution for 20 years, and I have seen
thousands of bills come up for votes, some small in scope, some large.
Many of the laws we pass do not stand the test of time. Medicare is an
exception to that rule. It has fundamentally shaped the way health care
is delivered in this country and provides needed coverage for millions
of seniors and disabled Americans. But the program is not keeping pace
with the change we have seen in medicine. A pill or an injection has,
in many instances, replaced the need for a surgeon to use his scalpel.
This is amazing progress that should continue without our interference.
This bill is about more than drug coverage. It is about ensuring that
the Medicare program continues to meet the needs of a growing number of
elderly and disabled. It has my full support, and I urge all my
colleagues to support it as well.
Mr. Speaker, I reserve the balance of my time.

{time} 1600

Mr. DINGELL. Mr. Speaker, I yield myself 2\1/2\ minutes.
Mr. Speaker, this ``bipartisan bill'' our Republican colleagues have
put on the floor reminds me of a great story. A fellow went into a
restaurant and asked for stew. He was delivered stew, and he said,
``Oh, that's the worst I ever had. Where did you get it? What's the
recipe?'' They said, ``It's easy. It's horse and rabbit stew.'' He
said, ``What is the recipe for it? It's the worst I've ever had.'' They
said, ``It's equal: one parts horse, and one rabbit.''
Well, that is kind of what we have here: it is bipartisan. Three
Democrats support this outrage, the rest of the Democrats oppose it.
This is a Republican bill that our Republican colleagues have finally
decided they would put on the floor after the pollsters told them that
they are in serious trouble on their opposition to something that the
people want and the people need and that is good for the country. That
is what is at stake.
There is a very simple difference between the two bills. One is that
the Democratic bill helps seniors to get insurance coverage. The
Republican bill only offers to subsidize insurance companies, if they
can find an insurance company that happens to want some more money.
Now, having said that, the Democratic bill also sees to it that
senior citizens and Medicare recipients get their pharmaceuticals at
affordable prices. The Republican bill gives money to insurance
companies to maybe pay to pharmaceutical houses so that both can make
more money, if they decide they want it. That is what is at stake here.
Now, man and boy, I have been in this place for a long time. I have
never seen a worse process than we are confronted with today. The
Speaker says how he would like this to be bipartisan. Well, so would
we. But it is not. Apparently, however, our Republican colleagues want
this to be a partisan process. But I am not surprised, because this has
been going on this whole session, and it is not something that we have
not seen before.
I would just make another little observation for the benefit of my
Republican colleagues. I have watched my Republican colleagues, going
back to 1935, when the Social Security bill was enacted. The
Republicans opposed enactment of the Social Security Act, and they
fought it for everything they were worth. My Republican colleagues also
opposed Medicare. And by and large, with the exception of 68 courageous
decent men, they opposed the Patient's Bill of Rights. They have also
opposed universal coverage of people under health insurance, again
something that is desperately needed.
So this is not new. What we are observing is the Republicans are
again looking after their rich buddies and seeing to it that the people
who need help are going to get nothing. And I will simply point out
there are few who will draw any significant benefits under this piece
of legislation. It is a sham, a fraud and an outrage; and it is almost
as bad as the process under which we function today.
It is a sham, a fraud and an outrage; and it is almost as bad as the
grossly unfair process under which we function today, a process which
denies the people of the United States a vote on a meaningful bill
which really meets the needs of our retirees, and which does not simply
benefit insurance companies and pharmaceutical manufacturers.
Medicare is one of our most successful social programs in history. It
insures more than 39 million disabled and senior Americans, and has
drastically reduced poverty and improved the health of our elderly.
Over the years, Congress has enacted a number of additions to the
program, including coverage for physicians' services and coverage of
certain preventive benefits. Now the House is being denied an
opportunity to debate seriously the most significant program change in
recent time--the addition of a prescription drug benefit to the
program.
The private insurance market was not willing to provide meaningful,
dependable coverage for seniors and the disabled in 1965. That is why
we created Medicare. Today, the private market is failing to provide
seniors with adequate coverage for prescription drugs.
We all know the important role prescription drugs play in our lives,
and they are particularly important for seniors or the disabled. Yet,
three out of five Medicare beneficiaries lack dependable coverage.
Those without coverage are forced to pay for medically necessary drugs
quit of their own fixed incomes, and too many forgo medications that
will keep them healthy, out of the hospital, and living longer, more
productive lives.
What this Congress does with regard to a Medicare prescription drug
benefit will have a profound impact on America's seniors and disabled.
Unfortunately, the Republican leadership's prescription drug proposal
would break the promise that Congress made to America's seniors and the
disabled over three decades ago. Instead of providing an entitlement to
a guaranteed, affordable, defined benefit, the Republican drug bill is
a sham and a scam.
The Republican leadership's prescription drug proposal relies on
private sector insurance companies to deliver a benefit. These are the
same companies that failed to provide adequate health insurance to
seniors thirty-five years ago, and the same companies that are saying
now the Republican proposal just won't work.
For the first time in Medicare's history, seniors and the disabled
would not be guaranteed access to a standard benefit. Instead, they
would be limited to whatever private insurance plans decided to sell
precription drug policies in their area. Private plans could vary their
benefits, vary their cost-sharing, and vary their networks of
pharmacies. There would be no guarantee that the particular drug plan a
senior needed would be available to them, and there would be no
guarantee that a drug plan that a senior picked one year would be
available the next year.
Unfortunately, we will not be allowed to vote for a real benefit. The
Democratic substitute would have provided a guaranteed, affordable
prescription drug coverage for every single senior and disabled person
in Medicare. Whether they live in Miami, Ohio or Miami, Florida,
seniors would be guaranteed the same benefit at the same premium. The
Democratic substitute would guarantee seniors and the disabled access
to the medically necessary drugs their doctor prescribes, and it would
guarantee that they could continue to get their medication from their
local pharmacist. Finally, the Democratic substitute should provide
sufficient subsidies so that the benefit would remain affordable to
all. That is why the Republican leadership will not even allow the
House to vote on our substitute.
Members of Congress don't have a choice before them today. We must
reject a bill that would undermine all the principles that has made
Medicare the most successful social program in history. And we will
need to wait for another day, or another Congress, to vote for a
package that provides a real Drug benefit in the Medicare program.
Mr. BLILEY. Mr. Speaker, I yield 1 minute to the gentlewoman from New
Jersey (Mrs. Roukema) for purposes of a colloquy.
(Mrs. ROUKEMA asked and was given permission to revise and extend her
remarks.)

[[Page H5363]]

Mrs. ROUKEMA. Mr. Speaker, I thank the gentleman from Virginia for
yielding me this time to have a colloquy with our colleague, the
gentleman from California (Mr. Thomas).
Mr. Speaker, as the gentleman from California knows, we have heard
concerns from our States, several of them, like New Jersey,
Pennsylvania, and Connecticut, regarding the potential negative
interactions between State drug assistance programs and H.R. 4680, this
bipartisan bill. Has the gentleman been made aware of this, and have
the issues been resolved as we have presented them to the gentleman?
Mr. THOMAS. Mr. Speaker, will the gentlewoman yield?
Mrs. ROUKEMA. I yield to the gentleman from California.
Mr. THOMAS. I would respond that, yes, the issues have been resolved.
Mrs. ROUKEMA. Can the gentleman briefly describe them?
Mr. THOMAS. Yes, I can describe them.
First, we federalize the dual eligibles. We give the governors more
than $22.8 billion in additional funds to spend in their States.
Second, the bill allows maximum flexibility to take current State
programs and so-called wraparound or integrate them with the Federal
program.
But most importantly the legislation creates a commission which is
charged with developing a program to address these transitional issues.
And it says in the legislation that the proposal must protect current
program participants and the financial interests of the States
involved. Those States, who on their own offer seniors Medicare
prescription drugs should have a special handling to handle the
transition with the Federal and the State program.
Mrs. ROUKEMA. I thank the gentleman for his instructions.
Mr. Speaker, another point that I would like made explicitly clear is
ensuring that insurance providers will not pull out of an area, leaving
seniors without any coverage. As you know, in New Jersey and other
areas, HMOs participating Medicare Plus Choice have been leaving the
program leaving many seniors without coverage. It is my understanding
that under the bill, that at least two insurance providers must be
available in each area. To ensure that at least two providers are
always available, the government will step in and reimburse providers
at a higher rate if necessary to make sure they are available to
seniors. I would like reassurance from the Chairman that under this
bill, seniors will not have to worry that HMOs will leave the program
leaving them without any coverage.
Mr. THOMAS. Mr. Speaker, my answer to the Gentlelady from New Jersey
is that this bill guarantees that at least two plans will be available
in each area.
In fact, the Medicare Benefits Administrator would administer the
program in a manner such that all eligible individuals would be assured
of the availability of at least two qualifying plan options in their
area of residence, at least one of which is a drug plan. If necessary
to ensure such access, the Administrator would be authorized to provide
financial incentives, including the partial underwriting of risk, for a
PDP sponsor to expand its service area under an existing prescription
drug plan to adjoining or additional areas, or to establish such a plan
(including offering such plan on a regional or nationwide basis).
It would be written in the statute that all participating seniors
will be guaranteed at least two plans from which to choose. I thank the
Gentlelady for seeking this important clarification.
Mr. DINGELL. Mr. Speaker, I yield 2 minutes to the gentleman from
California (Mr. Waxman), who was denied, along with the rest of the
Committee on Commerce, the opportunity to discuss this matter in
committee through this irregular process.
Mr. WAXMAN. Mr. Speaker, I thank the gentleman from Michigan for
yielding me this time.
The bill the Republican leadership in this House has insisted on
bringing to the floor today is a sham. It purports to provide drugs for
the Medicare population. It does not. It purports to give seniors peace
of mind that their drug costs will be covered. It does not. It claims
to cover the drugs they need, and it does not do that.
Instead, it would allow insurance companies to establish restrictive
formularies and use that as a barrier in the way of patients getting
medically necessary drugs if those drugs are not on the formularies. It
would not assure that Medicare beneficiaries could get their drugs from
their neighborhood drugstore. It would not assure that coverage was
available in every area of the country. Seniors in rural areas would be
particularly likely to find no coverage is available to them.
What does the Republican bill do if it does not spend money to give
seniors a drug benefit? It gives money to America's insurance
companies. It tries to bribe them into offering an insurance policy
that covers just drugs. The companies say they cannot cover just drugs.
It will not be affordable, and it will not be available.
Evidently, our Republican colleagues still regret that we passed
Medicare. If they had their way, they would design Medicare the way
they have this drug plan: use taxpayer dollars to pay insurance
companies, and then cross their fingers and hope the insurance
companies will provide health care to America's seniors and disabled
people.
No guaranteed benefit, differing premiums all over the country, no
guarantee of affordability or availability and no accountability.
America's seniors would not have wanted that from Medicare, and they
will not be fooled by a sham plan for drug coverage now.
What we are seeing here is really about a difference between
Democrats and Republicans on Medicare. Democrats know Medicare works.
We do not want to throw it out. We want to make it better. We want to
add to Medicare a real, defined, guaranteed prescription drug benefit.
We want a benefit that's available wherever you live in this country,
whatever your income, whether you're sick or not, whether you're in
traditional Medicare or in managed care.
Republicans want to go back to the days before Medicare and tell
seniors to depend on private insurance companies.
It they are so sure that's the right way to go, why are they so
afraid to let us vote on the plan the Democrats and the President want?
Why are they so afraid of adding a real benefit to Medicare for all our
senior and disabled citizens?
Mr. BLILEY. Mr. Speaker, I yield 5 minutes to the gentleman from
Florida (Mr. Bilirakis), the chairman of the Subcommittee on Health and
Environment of the Committee on Commerce.
Mr. BILIRAKIS. Mr. Speaker, I thank the gentleman for yielding me
this time, and I rise in support of H.R. 4680, the Medicare RX 2000
Act.
The addition of prescription drug coverage to the Medicare program is
one of the most important things we can do this year. I am saddened,
Mr. Speaker, by the strictly partisan and political debate that has
arisen on this vital issue and by the efforts to continuously interrupt
these proceedings with nonsensical procedural motions. This conduct
reinforces my sincere belief that the Democratic leadership does not
want to take real action this year on this issue, just like they failed
to address the problem for over 40 years when they controlled the
House.
This is a critical concern for seniors throughout the country, and it
should not be reduced to merely a political issue or to one of spite. I
am reminded of a debate in the 104th Congress when we worked
successfully to save Medicare from bankruptcy. At that time the
Democratic leadership exploited the crisis facing Medicare by engaging
in demagoguery for political gain. The Washington Post editorial board
rightly labeled them ``Medagogues.'' Now they are playing politics with
seniors in desperate need of prescription drugs. In the words of the
Great Communicator, Ronald Reagan, ``There they go again.''
Many of the latest drug and biological therapies are targeted at
preventing or curing diseases that affect senior citizens and persons
with disabilities. However, the Federal health insurance program
serving these individuals, Medicare, currently, as we know, lacks
coverage for most prescription drugs and biologicals. As a result, one-
third of Medicare beneficiaries have no drug coverage at all. The two-
thirds of beneficiaries who have coverage have to obtain it through a
variety of sources, often at considerable expense.
Last year, I introduced legislation to help the neediest and sickest
seniors now. The bill before us, although not perfect, helps those
seniors in greatest need and those who are the sickest and, thus, has
my support. There is always room for improvement, but in the meantime,
we can help the most vulnerable seniors now.

[[Page H5364]]

This bill includes provisions that I introduced with my colleague,
the gentleman from Florida (Mr. Shaw), to ensure access to self-
injectable drugs. Currently, Medicare part B only covers drugs that are
furnished ``incident to a physician's service.'' In August 1997,
however, HCFA issued a memorandum to Medicare carriers stating that
Medicare part B would not reimburse for any drugs that were
administered incident to a physician's service, if the drugs were
capable of being self- injected.
This memorandum, which reversed a previous policy of 30 years, does
not take into account the health status of each patient. Many
beneficiaries, including cancer and MS patients, are not able to self-
inject their necessary medications, even if the drug is normally able
to be self-administered. The provision included in H.R. 4680 guarantees
the Medicare beneficiaries who are receiving lifesaving injectable
drugs and biologicals will continue to have access to those therapies
under Medicare part B.
It is also important that this reimbursement continue under Medicare
part B because the physician's service must also be reimbursed. The
bill before us will ensure that patients who cannot self-administer
injectable drugs will be able to have those drugs administered by their
physician and receive coverage under the Medicare program.
In closing, Mr. Speaker, I want to again emphasize that for 40 years
the Democratic leadership, which controlled the House, did nothing to
help seniors gain access to prescription drugs. The problem existed
then as it does today, and yet they made little or no mention of it.
This Congress is working to solve the problem on a bipartisan basis,
and I urge Members to demonstrate their concern by voting for a bill
which will help beneficiaries in need today.
Mr. DINGELL. Mr. Speaker, I yield 1 minute to the gentleman from
Maryland (Mr. Wynn), to join the American Federation of Teachers in
opposition to the Republican bill and in support of our bill.
Mr. WYNN. Mr. Speaker, I thank the gentleman for yielding me this
time.
I rise in strong opposition to this bill. It is a bad product of a
bad process. They shut out the Democrats today from introducing the
Democratic alternative, and now they have on the floor essentially a
bad bill.
There are two ways to approach this. On the Democratic side, we have
an expansion of Medicare, a guaranteed affordable benefit for all
seniors who need coverage to help with prescription drugs. On the
Republican side, we have a premium-driven system that basically is
designed to benefit insurance companies.
Now, I will tell my colleagues why this is problematic. The benefit
is not guaranteed. They have a higher deductible. They have a higher
premium. As a matter of fact, we do not have a deductible. They have a
$250 deductible. It is a bad idea.
We should not put this issue of prescription drug coverage in the
hands of the private HMOs, and I will tell my colleagues why. We are
already down here concerned about HMOs and are trying to pass a
Patient's Bill of Rights, trying to get the right to see a specialist,
trying to get the right for emergency care. The same people that are
denying those fundamental rights are now going to be handling
prescription drug coverage. I do not think that makes a great deal of
sense.
I believe we ought to opt for the Democratic alternative and reject
the Republican proposal and reject the Republican process.
Mr. BLILEY. Mr. Speaker, I yield 2 minutes to the gentleman from
Pennsylvania (Mr. Greenwood), a member of the committee.
Mr. GREENWOOD. Mr. Speaker, I thank the gentleman for yielding me
this time.
I would like to read from a letter I received recently from a 70-
year-old widow who has been widowed for 14 years. She writes, ``I am in
pain daily, and I cannot correct this problem because of financial
difficulty. I have stopped taking Prilosec, Zoloft, Lossomax, Zanax,
and Zocor. I need these drugs filled monthly and simply cannot afford
them. I also am in need of a pain pill, and I have not been able to
purchase it. I have cried myself to sleep over this dilemma.''
I think if this lady from my district were here today, she would cry
to witness this process. Because over and over again Members from the
Republican side of the aisle have stood up and talked about how to
solve the problem, and over and over again Members from the Democratic
side of the aisle have walked to the microphone with nothing more to
offer than blasting away at the plan we have tried to put together in a
bipartisan fashion.
We have been criticized for partisanship. Early last year the
gentleman from California (Mr. Thomas) and others put together,
extended a wide invitation to Democrats to join Republicans to work out
a plan. A few Democrats came over. Some of them have stayed with the
bipartisan plan. Most of the others have been driven off by leadership,
told not to participate with Republicans in writing a bipartisan bill.
Why? It has been obvious from day one. The plan is that the Democrats
want power back, and they think the way to get power back is to stop
everything that gets done in this House. And so my colleagues on the
other side will say anything and do anything to do it, including
denying senior citizens prescription drugs, including my constituent's
prescription drugs. And she ought to cry herself to sleep over this
process.

{time} 1615

There is a heck of a lot more in common between these plans than
there is different, and we ought to work on the difference.
What did the AARP say? ``We are pleased that both the House
Republican and Democratic bills provide a voluntary prescription drug
benefit in Medicare, a benefit to which every Medicare beneficiary is
entitled. And while there are differences, both bills describe the core
prescription drug benefit in statute.''
The AARP, the most respected seniors' organization in the country,
says we ought to work together and stop fighting in a partisan way.
Mr. DINGELL. Mr. Speaker, I yield 1 minute to the distinguished
gentleman from Louisiana (Mr. John) for purposes of debate in support
of this legislation, along with the American Association of People with
Disabilities, who join in support of the legislation.
Mr. JOHN. Mr. Speaker, I rise today in order to express my
frustrations with the consequences of the Republican plan.
Today the last Medicare Choice HMO servicing the seventh district of
Louisiana announced they are pulling out. This is not the case unique
to Louisiana's seventh district. This is the case all over America,
especially in rural America.
In a few short years since inception of this Medicare+Choice, my
seniors have been forced to change health services numerous times. The
Republican prescription drug proposal would privatize prescription drug
coverage in the same manner that Medicare+Choice privatized Medicare
health care services. And this plan, too, is doomed to fail.
Why would the Republicans choose to model a failed plan that has
failed seniors? A prescription drug benefit is important to all
seniors, not just geographically where they are from.
The Democratic plan guarantees all seniors will have equal access to
prescription drugs. The Democratic plan guarantees all seniors will pay
the same for prescription drugs.
I urge all of my colleagues to join with me in opposing the
Republican unrealistic plan and support the Democratic plan.
Mr. BILIRAKIS. Mr. Speaker, I am pleased to yield 2 minutes to the
gentleman from Georgia (Mr. Deal).
Mr. DEAL of Georgia. Mr. Speaker, I thank the gentleman for yielding
me the time, and I rise in support of this legislation.
Mr. Speaker, most of our lives are regulated by the calendar and the
clock. But if my colleagues come to my home and sit at my dinner table,
they will soon find that it is the pill box that is both the calendar
and the clock.
The reason is that my 93-year-old mother, who had to have one of her
legs amputated, lives with us, along with my wife's 86- and 84-year-old
father and mother. They have had major surgery, and one suffers from
Alzheimer's.
So as my colleagues sit around our table, they will soon see that it
is the

[[Page H5365]]

pill box that tells us what day of the week it is and what hour of the
day, because it is the medication that they must take that keeps them
going. So I understand the importance of prescription drugs.
But these three senior citizens who are now members of our family,
and we are so pleased to have them, have served over three-quarters of
a century as public school teachers in our State of Georgia; and, as
such, they earned the right as a part of their retirement to a medical
prescription drug program.
One thing that is very important to them is that this Congress not
force them to go into a program they do not want. Age and failing
health have deprived them of many of their choices, and they want to
retain this one to keep what they have.
But, also, one of the things that they are concerned about is that
they have lived frugal lives on school teachers' salaries and they do
not want catastrophic illness to wipe that out. I am pleased that our
plan provides that kind of financial security for them.
So tonight, to Mary, to George, and to Ida Lu, this plan is for them.
And do not forget to take your medication, by the way.
Mr. DINGELL. Mr. Speaker, I yield 30 seconds to the distinguished
gentlewoman from California (Mrs. Capps) in support of the legislation.
She is joined in support of this legislation by the American
Association of University Women.
Mrs. CAPPS. Mr. Speaker, I rise to express my deep disappointment
about the bill before us and this process, which does not even allow a
vote on an alternative plan.
As a nurse, I would never shortchange seniors out of their
prescription drugs. That is what this legislation does. It is an empty
bill which will lead to empty pill bottles for seniors across this
country. Simply put, this bill sells our seniors short.
Let us pass secure, affordable prescription drug coverage today for
all older Americans, not a risky program that subsidizes private
insurance companies.
I urge a no vote.
Mr. BLILEY. Mr. Speaker, I yield 3 minutes to the gentleman from New
York (Mr. Lazio) a member of the committee.
Mr. LAZIO. Mr. Speaker, first I would like to congratulate the
chairman of the full committee for his leadership in driving us toward
a solution. I would like to also thank the gentleman from Texas
(Chairman Archer) from the Committee on Ways and Mean. I would like to
thank all my colleagues on the task force that helped put this together
and, in particular, the gentleman from North Carolina (Mr. Burr) who
worked so hard on this issue.
Without their leadership and vision, we just simply would not be here
today with a bill that will improve the lives of millions of Americans.
Make no mistake about it. We have an opportunity for those who can
just lift their eyes up a little bit higher to see to do the fair and
right thing for millions of American seniors and disabled.
Mr. Speaker, senior citizens and disabled Americans are being
squeezed between fixed incomes and rising drug prices. Every day many
of them are forced to maybe a Hobson's choice between a flat line and
the bread line, between paying for life-saving medications or next
week's trip to the grocery, seniors like 62-year-old Diane, who worry
about whether she will be able to keep a roof over her head when she
retires in a couple years.
Well, why does she worry? Because Diane has an IRA, a small pension,
a number of chronic conditions that include diabetes, high blood
pressure, and a degenerative disk disease. Diane's $1,100 per month
medication bill will effectively cut her take-home family income in
half.
Mr. Speaker, these are the people who are in the fight of their lives
to beat chronic and debilitating diseases. It is immoral to add
monetary worries to their burden.
Seniors and disabled Americans deserve to live secure lives, to live
secure in the knowledge that the drugs that will save them medically do
not ruin them financially.
Mr. Speaker, we are now taking action to give them that security. The
House bipartisan plan relies on the public-private partnership model
that has proven so successful in the past. It is completely voluntary.
It provides universal coverage to all Medicare beneficiaries who want
it, senior citizens and the disabled alike.
It contains a provision that will prevent financial ruin and will
save older and disabled Americans from being thrown into poverty
because of unexpected medication costs. It provides incentives to
private insurers to offer subsidized drug coverage to the seniors and
disabled Medicare beneficiaries. And the block purchasing power created
by these new private sector plans will allow discounts of up to 25
percent to be negotiated with drug manufacturers.
Mr. Speaker, for the last 12 years, the State of New York has had its
own prescription drug plan. Yet, even a large State like New York
cannot implement a program with the same economies of scale and savings
that a national plan would provide.
Recent estimates show that between the years 2002 and 2008 this plan
could save New York over $1 billion. Mr. Speaker, this is a good plan.
It is a plan that helps our seniors and our disabled Americans but in a
way that will not spawn bloated bureaucracies, budget-bursting
spending, and Government waste.
Let us do the right thing. Let us pass this bill.
Mr. DINGELL. Mr. Speaker, I yield 1 minute to the distinguished
gentleman from Arkansas (Mr. Berry). He is joined in his opposition to
the Republican bill by the National Council of Churches of Christ in
America.
Mr. BERRY. Mr. Speaker, I thank the gentleman from Michigan for
yielding me the time.
Mr. Speaker, this is a sad day in this House. The reason it is so sad
is because the Republicans have presented us with not a bill, not a
plan, but a sham that is so bad and so ugly that they do not even want
it compared to anything else. We have not been allowed a substitute. We
have not been allowed an amendment. And this is a sad thing for the
Republicans to do to the good people of this country.
We have real people with real problems and real pain suffering every
day because they cannot afford their prescription medicine. The
Republican plan is nothing more than an attempt to deceive our senior
citizens and protect the outrageous profits of the prescription
medicine makers of this country.
It is a shame that we would allow this important debate to take place
with no alternatives at all offered. I urge the defeat of the
Republican plan.
Mr. BLILEY. Mr. Speaker, I yield 1 minute to the gentlewoman from New
York (Mrs. Kelly).
Mrs. KELLY. Mr. Speaker, I thank the gentleman for yielding me the
time.
I rise to enter into a colloquy with the gentleman from Florida (Mr.
Bilirakis) if he is willing.
Mr. Speaker, access to affordable prescription drugs and health care
coverage is a pressing issue for seniors in my district, which is why I
support the Medicare Prescription Drug Act.
I recently introduced legislation, H.R. 4753, which will create
Medicare Consumer Coalition Demonstrate projects under the
Medicare+Choice program. These nonprofit, regional coalitions would
boost seniors' purchasing clout by allowing large groups of independent
beneficiaries to join together and, through market-driven negotiations,
drive down costs.
I would ask the gentleman to review this legislation and to work with
me to see that the concepts embodied in the Seniors Health Care
Empowerment Act are incorporated into this and other Medicare reform
initiatives that we consider in the coming months.
Mr. Speaker, I yield to the gentleman from Florida (Mr. Bilirakis).
Mr. BILIRAKIS. Mr. Speaker, I appreciate the gentlewoman bringing to
my attention and to our attention the innovative legislation which she
has recently introduced.
Consumer coalitions could serve a dual purpose by educating the
beneficiaries who are negotiating for lower health care costs. I
appreciate her comments on the legislation before us and on her
legislation, which is an innovative concept. The proposal is certainly
worthy of a close review, and I look forward to working with her on
this subject in the coming months.

[[Page H5366]]

Mr. DINGELL. Mr. Speaker, I yield 1 minute to the distinguished
gentlewoman from California (Ms. Eshoo) to discuss matters which she
was denied an opportunity to discuss in any appropriate proceeding in
our committee.
Ms. ESHOO. Mr. Speaker, I thank the distinguished ranking member of
the House Committee on Commerce for yielding me the time.
I want to underscore something today that I think at the base of all
of this is enormously sad; and that is, for the people that are tuned
in and listening, this indeed is the House of Representatives, the
Congress of the United States of America, the freest nation in the
world. At the heart of our democracy is debate. And yet, the majority
of this House will not and did not allow one side to bring their idea
to the floor of the house.
What are they afraid of? I can debate their idea. I do not support
many parts of their plan. That is my prerogative on behalf of the
people that I represent. I do not think insurance companies should be
subsidized in order to bring about a Medicare drug prescription
coverage for our seniors.
But I think the saddest part of this today is that they are afraid of
our idea. Why be afraid of what this side could bring to the floor of
the House?
In addition, I want to correct the Record. Democrats did do
something. They established Medicare for the people of our great
Nation.
Mr. BLILEY. Mr. Speaker, I reserve the balance of my time and suggest
that the minority use some more of their time.
Mr. DINGELL. Mr. Speaker, I yield 1 minute to the gentleman from
Michigan (Mr. Stupak) to discuss matters that he was denied the
opportunity to discuss in this strangled proceeding in our committee.
Mr. STUPAK. Mr. Speaker, I urge my colleagues to reject this
Republican non-plan for prescription drug coverage.
The Republican non-plan does not guarantee that seniors will be
offered drug coverage. It does not guarantee that seniors in rural
areas like I represent will have access to their medications from their
local pharmacy or that they will have access to the medications they
need.
Instead, the Republican non-plan provides a subsidy to insurance
companies so seniors can continue to pay high prices to drug companies
for prescription drugs.
Seniors do not want us to give a handout to the insurance and drug
companies. They want affordable drugs now.

{time} 1630

Let us stand with America's seniors. Let us support a real benefit
for our seniors, not a cash benefit to the drug and insurance
companies. This has not been a bipartisan day. The GOP majority will
not even allow us a Democratic substitute or even a Democratic
amendment to their bill. They will not even debate the merits of a
prescription drug coverage policy for our seniors. That is why we have
a nonplan before us. It does not guarantee us anything. It does not
provide a benefit. It provides nothing for our seniors.
The SPEAKER pro tempore. Mr. Dingell.
Mr. DINGELL. Mr. Speaker, I believe it is customary to refer to a
Member as the gentleman from Michigan.
The SPEAKER pro tempore. The gentleman from Michigan.
Mr. DINGELL. Am I incorrect in that, Mr. Speaker?
The SPEAKER pro tempore. The gentleman from Michigan is recognized.
Mr. DINGELL. I thank the Chair for observing the regular order.
Mr. Speaker, I yield 1 minute to the distinguished gentleman from
Texas (Mr. Green), since he was denied an opportunity to discuss this
matter in our committee.
Mr. GREEN of Texas. Mr. Speaker, I thank my ranking member, the
gentleman from Michigan (Mr. Dingell), for yielding me this time.
Mr. Speaker, I am surprised my Republican colleagues can get up the
last couple of hours with a straight face and talk about their
bipartisan bill. I rise in opposition to this prescription drug
gimmick. It is not bipartisan. They even refused us an option to have a
vote on an alternative plan. We should be putting the benefits in the
hands of senior citizens and not in the hands of insurance companies.
We should be providing a secure and reliable benefit instead of
creating a new bureaucratic nightmare, a new Medigap policy for seniors
to have to fight with. We should be building Medicare up and not
tearing it down.
The Republican bill is flawed. It gives seniors the right to buy an
insurance policy. They want prescriptions. They do not want an
insurance policy. It allows the insurance companies to limit the number
of medications it covers. It restricts them from using their local
pharmacy. The Republican bill does nothing but get them past the
November elections, but our seniors who built this country, who fought
in World War II and the Korean War, they know this is a trick, and they
are not going to be fooled by it.
The Republican bill costs seniors more each year and it gives them
less. The deductibles can increase leaps and bounds. Our seniors
deserve more than a voucher. We know this bill is bad for seniors. That
is because it is supported by the pharmaceutical companies who are
already charging them millions more than they should.
Mr. DINGELL. Mr. Speaker, I yield 1 minute to the distinguished
gentleman from Florida (Mr. Deutsch), to discuss matters he was denied
an opportunity to discuss in our committee.
Mr. DEUTSCH. Mr. Speaker, the Republicans have been calling this the
Medicare prescription drug legislation. I think it would be more
accurately described as the anti-Medicare prescription drug
legislation. Essentially, what this legislation would do is destroy
Medicare. That is what it does. It changes the entire concept that
Medicare has had for over 30 years in this country of a universal
health care system. If one makes more than $12,600, they get nothing.
So it is welfare for health. The incredible broad-based political
support that we have for Medicare in America would be lost if this plan
passes. What it also does is effectively creates a voucher system for
anyone above that amount of income.
The author of this bill, the chairman of the Subcommittee on Health,
has said that our accusations of saying that this is not part of
Medicare are not true. Well, this plan is being created that has
nothing to do with Medicare, and calling it Medicare does not make it
Medicare. If we put the Transportation Department into Medicare, it
still would be the Transportation Department. It would not be Medicare.
I urge its defeat.
Mr. DINGELL. Mr. Speaker, I yield 30 seconds to the distinguished
gentleman from Minnesota (Mr. Minge).
Mr. MINGE. Mr. Speaker, I would like to thank the gentleman from
Michigan (Mr. Dingell), the ranking member of the Committee on
Commerce, for yielding me this time.
Mr. Speaker, I would like to share with my colleagues the position of
the Fairness Caucus. The Fairness Caucus is committed to ending the
regional disparities that exist with respect to Medicare today. The
fact that seniors in some parts of the country are already receiving
prescription drugs as a part of Medicare, at no premium cost, while
seniors in other parts of the country have to buy prescription drugs
with their own dollars, this is fundamentally unfair. People are paying
the same amounts in regardless of where they live, but the benefits are
different. We must end these regional inequities. The motion to
recommit will have language making that commitment in an unambiguous
way, and I urge that we support the motion to recommit.
Mr. DINGELL. Mr. Speaker, I yield 30 seconds to the distinguished
gentleman from Washington (Mr. Baird).
Mr. BAIRD. Mr. Speaker, it is right that this body address the
problem of prescription medications. It is far past time. I have worked
on this issue since I came to this Congress. But as we do so, we must
not make the mistake of perpetuating and exacerbating a fundamental
inequity in the Medicare system right now. That inequity is this:
although every single American pays into the rate at the same payroll
rate, we actually receive differential benefits depending upon where we
live, such that small urban, suburban and rural hospitals in my
district are closing; people are doing without benefits while
beneficiaries elsewhere in the country are receiving prescription drug
benefits already.

[[Page H5367]]

This is wrong. The Republican bill is a placebo bill. It makes one
feel good if they believe in it, but it does nothing of substance. We
must redress the inequities in the AAPCC rates.
Mr. DINGELL. Mr. Speaker, I yield 30 seconds to the distinguished
gentlewoman from North Carolina (Mrs. Clayton).
(Mrs. CLAYTON asked and was given permission to revise and extend her
remarks.)
Mrs. CLAYTON. Mr. Speaker, I urge Members to vote against this bill
because this bill indeed does nothing for seniors in general but
particularly for those who live in rural areas. There is a differential
for those of us who live in rural areas. Already we have lack of
access. This does not indeed provide any additional care for them. This
puts into the system the differential that is there now. So I object to
this bill because it is bad for rural America.
Mr. Speaker, I urge the rejection of this unfair, insensitive and
closed Rule.
Under this Rule, the Democratic Substitute is not allowed. The
Democratic Substitute would have provided a guaranteed prescription
drug benefit, and that guarantee is vital to any prescription drug
plan. Indeed, this Rule does not allow any Substitute. It is unfair,
undemocratic and should be rejected.
We must make sure that our Seniors, especially those in Rural
communities, are able to obtain medicines essential to a comfortable
and pain free quality of life. Many Seniors do not have drug coverage,
and they also do not have access to the discounts and rebates that
insured people receive. Older Americans and people with disabilities,
without drug coverage, typically pay 15 percent more for the same
prescription drug as those with insurance. And, that gap is growing.
Uncovered Medicare beneficiaries purchase one-third fewer drugs but
pay nearly twice as much out-of-pocket. Chronically ill, uninsured
Medicare beneficiaries spend over $500 more out-of-pocket than those
with coverage. This is true, despite the fact that these ill
beneficiaries purchase fewer prescriptions than those with coverage.
Rural beneficiaries are particularly vulnerable. There is a Rural
Differential that must be considered and that challenges us to
construct a plan that benefits all Seniors. More than half of all Rural
elderly live below 200 percent of the Federal poverty level. Rural
Medicare beneficiaries are over 50 percent more likely than urban
beneficiaries to lack prescription drug coverage for the entire year.
Moreover, Rural seniors are less likely to have private Medicare
supplemental insurance coverage than their urban counterparts--seventy-
five percent to sixty-five percent. Rural seniors are far less likely
to have access to Medicare-Choice Plans with drug coverage--seventy-
nine percent to sixteen percent. And Rural Seniors will spend more out
of pocket for prescription drugs than Urban Seniors--twenty-four
percent of Urban seniors will spend more than $500, compared to thirty-
two percent of Rural seniors. Therefore, any prescription drug
legislation, before it can be said that it helps our Seniors, must
contain certain basic benefits.
First and foremost, it must be affordable. The proposed legislation
fails that test.
Next, it must be available. The proposed legislation fails this test.
Then, the benefits it provides must be set. There must be continuity
in coverage. Again, the legislation fails this test.
And, finally, the plan must provide choice. The proposed legislation
also fails this test.
While the proposed legislation fails each of these tests for most of
our seniors in this Nation, as I indicated, it is especially brutal in
its failure to address the needs of our seniors in Rural America.
Proportionately, there are more low income senior citizens in Rural
America than in any place else in the Country. The high deductibles,
combined with the premium payments and the co-payments will discourage
many seniors in Rural America from enrolling in the plan.
Subsidies, under the proposal, are provided to insurers rather than
seniors, apparently with the hope that premium costs will be lower.
That is false hope. And, that false hope is further found in the
premise of the proposal that insurers will participate and that seniors
will have access to prescription drug plans. There are insurers who
choose not to participate in Medigap, and that is especially true in
Rural America.
Mr. Speaker, we have a unique opportunity to help millions of our
senior citizens with their critically needed prescription medicine. Far
too many of our seniors are having to make a choice between the
medication that they critically need and other basics, such as food and
shelter.
With the essential elements I have described, we can construct a
prescription drug plan that helps rather than hurts our seniors. Reject
this rule.
Mr. DINGELL. Mr. Speaker, I yield 30 seconds to the distinguished
gentlewoman from Nevada (Ms. Berkley).
Ms. BERKLEY. Mr. Speaker, I thank the distinguished gentleman from
Michigan (Mr. Dingell) for yielding me this time.
Mr. Speaker, I oppose this bill because it fails to provide seniors
in my district who are crying out for prescription drug relief with
comprehensive coverage under Medicare. I favor a drug plan that is
voluntary, affordable and reliable, one in which seniors feel secure
and know that the Congress has not abandoned them.
I urge my colleagues to vote against this half-hearted effort and
stand up for seniors by demanding a comprehensive drug benefit under
Medicare now.
Mr. DINGELL. Mr. Speaker, I yield 1 minute to the distinguished
gentleman from Indiana (Mr. Roemer).
Mr. ROEMER. Mr. Speaker, I thank the gentleman from Michigan (Mr.
Dingell) for yielding me this time.
Mr. Speaker, President Harry Truman received the very first honorary
card from President Johnson when Medicare was created. We need some
Truman honesty about what this bill is about.
Charles Kahn, the president of the Health Insurance Association of
America, a group comprised of 294 insurance companies, said this,
quote, ``we will withhold judgment on the House Republican bill until
we see its details. Nevertheless, we continue to believe that the
concept of a so-called drug-only private insurance simply would not
work in practice,'' unquote.
I am the first to work in a bipartisan way around here on balancing
the budget, reforming welfare, improving education; but a plan has to
be given to me that will work.
This will not work. The insurance companies who are getting the
subsidy even say it will not work. Mr. Kahn says wait until we see the
details.
What is the copay? We do not know. What are the deductibles? We do
not know. What are the premiums? We do not know. Let us sit down in a
bipartisan way after we reject this plan and work for the senior
citizens of this country to get a plan based on Medicare that will
work.
Mr. BLILEY. Mr. Speaker, I yield 3 minutes to the gentleman from
Tennessee (Mr. Bryant).
Mr. BRYANT. Mr. Speaker, I thank the gentleman from Virginia (Mr.
Bliley) for yielding time to me.
Mr. Speaker, I too want to add my appreciation for all the hard work
that the chairman has done in coming up with this very fine bill.
As I sat here and listened to some of the debate, I realized that
talk is cheap but prescription drugs are not cheap. They are expensive
and they are getting more expensive every day. Seniors need our help
today, not 4 years from now, 6 years from now.
Some of us in Congress have been working together to develop a truly
bipartisan plan because there is no role for politics or partisanship
in this debate. There should not be.
The health and financial security of millions of our seniors are at
stake. And, yes, we do need to tackle and reduce the cost of medicine,
but not with a Washington-based one-size-fits-all program.
Every senior is a different person. Every situation is unique, and we
must maintain a health care system that recognizes the sanctity of the
personal doctor-patient relationship.
Our plan guarantees that every senior, in a big city or in a small
town across America, has access to prescription drug coverage under
Medicare.
Now, there are several benefits that are unique to our plan. First,
our plan gives citizens the right to choose, the right of choice.
Seniors will have a choice of at least two plans. Every senior has
different health care needs, and that is why they may need different
health care plans to choose from. What is more, our plan is completely
voluntary, so if a senior likes the coverage they already have, they
can stick with it.
Rather than enforcing government price controls, which some would
argue in this body, our plan uses group buying power to reduce the
costs of prescription drugs by as much as 25 to 39 percent. Millions of
these seniors have benefited from these expanded choices and cheaper
prices by banding together in private organizations like AARP.

[[Page H5368]]

They get all the benefits of Washington-mandated price controls but
without rules and regulations and choice limitations and inefficiency.
Seniors who already have that private coverage should also be able to
keep it and not be forced into a big government plan. And our plan has
always provided real protection from being wiped or having to file
bankruptcy because of high prescription drug costs. Once a beneficiary
under our plan spends $6,000 out of pocket, she pays not another dime
for prescription medicines that year.
Our plan provides beneficiaries with this security and peace of mind
while other proposals fall short. The Democrats tried to respond to
this part of our proposal, but they have resorted simply to budget
gimmickry. We offer this protection now and not in 6 years.
I invite my congressional Democrats to work with us. This should not
be a Republican, should not be a Democrat partisan issue. It is an
American issue. It is a senior issue.
I urge my colleagues to support this bill so we can give our seniors
and the disabled the prescription drug coverage they need now.
Mr. DINGELL. Mr. Speaker, I yield 1 minute to the distinguished
gentlewoman from Connecticut (Ms. DeLauro). She is joined in her
opposition to this outrageous bill by the AFL-CIO and the UAW.
Ms. DeLAURO. Mr. Speaker, a month ago the Republican leadership was
told by their pollsters that if they did not at least start to sound
like they cared about helping seniors with the cost of prescription
drugs they would pay a heavy political price. That is why we are here
today, saddled with a sham Republican prescription drug bill and a
rigged process. The Republican proposal does not provide all seniors
with an affordable Medicare prescription drug benefit. It benefits
insurance companies. It is complex, takes the very worst from an
already failing HMO system. If one needs a medicine that their HMO does
not approve, their only recourse is to appeal to the insurance company.
My God, we know that that does not work.
Today I was notified by an insurance company that offers
Medicare+Choice HMO coverage to seniors in Connecticut that they are no
longer going to be able to offer them coverage. Seniors know that they
cannot rely on the HMOs, but the Republican leadership is building
their plan on this crumbling foundation. The Democratic Medicare
prescription drug plan is rooted in the Medicare program that seniors
know and trust. It provides affordable, voluntary, dependable coverage,
and a guaranteed benefit. It gives seniors security and dignity. Reject
the Republican sham bill.
Mr. DINGELL. Mr. Speaker, I yield 1 minute to the distinguished
gentlewoman from California (Ms. Lee). She is joined in her opposition
to this bill by Americans for Democratic Action.
Ms. LEE. Mr. Speaker, let me thank the gentleman from Michigan (Mr.
Dingell) for yielding me this time and just emphasize my very strong
opposition to the Republican prescription coverage plan.
Mr. Speaker, this proposal really claims to help seniors, but in
actuality all it really does is help insurance companies. This plan
will not guarantee access to coverage, and it will limit seniors'
choice of drugs and pharmacies. It could even raise costs for some
seniors with medical problems. It is really a sham, and it is a
disgrace that the Republicans would not allow a debate on a Democratic
proposal which includes a full prescription benefits package including
$21 billion in assistance to Medicare health providers and a $3.6
billion rural health package.
Why do we want to have our seniors to be subjected to have to deal
with the HMOs and the insurance companies for their medications when
these for-profit businesses have really been an impediment to quality
patient care for our senior citizens? Our seniors do deserve better.
Let us go back to the drawing board. Let us allow for a full debate,
one that really does make sense, which will help all of our seniors
ensure that they live a safe and sound, long, healthy life.

{time} 1645

Mr. DINGELL. Mr. Speaker, I yield 30 seconds to the distinguished
gentlewoman from Wisconsin (Ms. Baldwin).
Ms. BALDWIN. Mr. Speaker, I thank the gentleman for yielding me the
time.
Mr. Speaker, I come to the floor on behalf of the seniors in my
district who demand affordable, comprehensive, prescription drug
coverage to ask what are you afraid of. Instead of debating this very
serious issue, we are playing election-year politics with the health of
our parents and grandparents, like my 94-year-old grandmother.
What are my colleagues afraid of? The only plan we will consider
today throws money at special interests. It is a plan that subsidizes
the very same private insurance companies that have fought our efforts
to hold them accountable, and allows for pharmaceutical companies to
continue their current price gauging.
What are my colleagues afraid of? My constituents demand an answer.
Mr. BLILEY. Mr. Speaker, I yield 3 minutes to the gentleman from
Florida (Mr. Stearns), a member of the committee.
Mr. STEARNS. Mr. Speaker, in response to the last speaker, I hope she
has a chance just to listen. I have here a letter from Governor Tommy
Thompson who talks about this particular bill, and lauds the bill and
says it is very important that Congress pass this bill.
I hope the gentlewoman from Wisconsin (Ms. Baldwin) will take some
time this afternoon and perhaps read what Governor Thompson says about
this from her State. I would be glad, if the gentlewoman wants to, the
gentlewoman can come up now, if she has an urgent need to read this
letter.
Mr. Speaker, I say to the gentleman from Michigan (Mr. Dingell) who
is talking about bipartisanship, we have three times as many people who
are going to vote for our bill than voted and supported the gentleman's
bill that the gentleman called bipartisan last year dealing with
managed care.
I think when we talk about bipartisanship, at least we have three
times the weight of power to say it is bipartisan than the gentleman
did.
Mr. Speaker, I rise obviously in support of H.R. 4680, the Medicare
Prescription Act of 2000. Our plan is market based, this is the key,
rather than relying upon a government-run program, like many of the
Democrats have proposed time and time again.
My colleagues might ask themselves, why is this so important, because
we know that one of the overwhelming components of any plan that we
offer that it must provide individuals with choice. Joshua Hammond
wrote a great book on the seven cultural forces that define who we are
as Americans, and the number one item is choice.
Choice must be the centerpiece of anything we propose, and that is
why as Republicans and some of the Democrats on that side who agree
have joined us.
Our bill fosters competition by empowering individuals with buying
power, and it encourages consumers to spend health care dollars much
more efficiently than the Democrat plan.
Here is the key. It guarantees Medicare beneficiaries Nationwide that
they would have access to at least two competing prescription drug
plans. Let me repeat that, not just one, it is choice, but two
competing prescription drug plans. To ensure that rural areas are not
underserved, the plan must also offer local pharmacy access, insuring
that drugs would be available for seniors in rural areas and not just
through the mail.
Recently in the press, the human genome project has been all over the
front pages. It has now completed its work. The medications that will
come on the market in the future as a result of the scientific
breakthroughs that will occur because of the genome project will be
prodigious, those will be available to Medicare with the passage of
this bill.
The real question my colleagues and our seniors should think about,
here is what they are faced with. Who do they trust? That is the key
question. Who do they trust with their prescription drug plan? Do they
want to make their own choices and control the money that they spend,
or do they want the government, the United States Government-run plan
that leaves them without any say so on what works best for them?
Mr. DINGELL. Mr. Speaker, I yield 30 seconds to the distinguished
gentlewoman from Florida (Ms. Brown).

[[Page H5369]]

Ms. BROWN of Florida. Mr. Speaker, I speak from Florida, and let me
just say to my colleague from Florida (Mr. Stearns), we are being hurt
most by this, not one program left in your county in Marion County.
This Republican bill is a slap in the face to every senior citizen
struggling to pay for a needed medicine.
The leadership of this House does not support this bill, they never
have. They do not support Medicaid. In fact, in 1995, they said they
hoped it would wither on the vine. A zebra cannot change its stripes,
Mr. Speaker, and the American people are not buying this sham.
American seniors deserve a program that works. This is a life-
threatening situation. This is a hollow bill, vote no.
Mr. BLILEY. Mr. Speaker, how much time is remaining?
The SPEAKER pro tempore (Mr. LaHood). The gentleman from Virginia
(Mr. Bliley) has 6\1/2\ minutes remaining. The gentleman from Michigan
(Mr. Dingell) has 12 minutes remaining. The gentleman from Virginia has
the right to close.
Mr. DINGELL. Mr. Speaker, I yield 30 seconds to the distinguished
gentlewoman from the Virgin Islands (Mrs. Christensen), who is joined
in her opposition to this outrageous bill by the National Medical
Association.
Mrs. CHRISTENSEN. Mr. Speaker, I rise as a family physician who has
taken care of seniors on Medicare and worked with them as they tried
unsuccessfully to stretch their limited funds to purchase the
medications they needed.
H.R. 4680 does not represent prescription coverage for all seniors,
at best it is an initial misstep to jeopardizing Medicare completely
through privatization.
The leadership of this body is doing a disservice by not even
allowing the Democratic alternative to the floor for debate.
I ask my colleagues to reject H.R. 4680, and I ask our colleagues to
work with us to give our older citizens the kind of help they deserve
and the medication they need and support the Democratic proposal.
Mr. DINGELL. Mr. Speaker, I yield 1 minute to the distinguished
gentleman from North Carolina (Mr. Price).
Mr. PRICE of North Carolina. Mr. Speaker, any prescription drug
benefit worthy of the name will provide a defined benefit as part of
Medicare. It must be available to all seniors who wish to take
advantage of it. The Republican plan does not measure up. It simply
throws some taxpayers' money at some insurance companies in the hopes
they will offer affordable coverage.
It just will not work. The national president of Blue Cross/Blue
Shield recently said, ``This idea provides false hope to America's
seniors because it is neither workable nor affordable.''
The Republican plan also defies logic. To get $1,000 worth of
prescription drug coverage a senior would have to pay $1,070. Who is
going to do that? Who wants to pay more to get less? Certainly not my
constituents.
The 1.1 million Medicare beneficiaries in North Carolina deserve a
real prescription drug benefit, and it is outrageous that through
partisan maneuvering we were not even allowed to offer a substitute
plan today.
Why are the Republicans scared of a vote? They must know we have a
better plan, a real plan, and one that will help seniors get the
coverage they need.
Mr. DINGELL. Mr. Speaker, I yield 30 seconds to the distinguished
gentlewoman from Texas (Ms. Jackson-Lee).
(Ms. JACKSON-LEE of Texas asked and was given permission to revise
and extend her remarks.)
Ms. JACKSON-LEE of Texas. Mr. Speaker, in the dark of night, the
Republican Majority's Committee on Rules voted for nothing for American
seniors. However, I refuse today to add to their farce by voting again
for nothing. I will not vote for this Republican bill that provides no
prescription drug benefit for the seniors in my district.
I will not support the continuance of the travesty of seniors having
money only to pay for rent and food and dying because they cannot pay
for their needed prescription drugs. The Democrats have a plan that has
no deductible, a plan that will allow a minimum premium of $25, and
cover $2,000 of costs. In my own community, HMOs and health coverage
insurance companies have jumped up and run out of town, or simply shut
down. I will not condemn my seniors to dialing a phone number to some
insurance company and there is a busy signal because that insurance
company refuses to cover the costs of the prescription drugs. This
Republican bill is a sham, vote it down and get on with the work we
should do, provide a guaranteed drug prescription plan for America's
Seniors as the Democrats' plan provides.
Mr. Speaker, I rise to respond to this newest attempt by the majority
to mislead this nation's seniors into the belief that they are truly
concerned about prescription drug coverage.
What the majority is proposing today fails as a legitimate response
to the Democrats longstanding position that America's seniors need a
comprehensive drug benefit.
Today, the elderly constitute 13 percent of the population, yet
account for more than one-third of the nation's annual drug
expenditures.
Since 1968, the percentage of seniors' expenditures on prescription
drugs has risen from $64 annually to $848 annually which amounts to 4.1
percent of their incomes.
Additionally, despite the fact that 65 percent of the 39 million
beneficiaries have some private or public coverage many still do not
have adequate supplemental coverage for drug costs.
To address this gap in medical coverage for our nation's elderly,
President Clinton proposed a Medicare reform plan, but at that time,
the Republicans felt that addressing this issue was not politically
expedient.
Yet, in light of the hotly debated Presidential and Congressional
races, it appears that the Republicans have suddenly gotten religion!
This latest ``revelation'' by the majority is not even that, in fact,
this bill is merely a revelation that the polls indicate it is
politically necessary for Republicans to at least address the issue of
prescription drug benefits, even if their bill is void of any real
relief for this nation's seniors.
Senior and consumer advocates groups alike oppose the majority's
Prescription Drug bill because it is fundamentally at odds with any
meaningful prescription drug bill.
Groups like the National Council of Senior Citizens, the National
Committee to Preserve Social Security and Medicare and Families USA,
the National Senior Citizens Law Center, and the American Association
of People with Disabilities oppose the majority's plan.
We must pay attention to this nation's seniors when they tell us that
the majority's Rx 2000 Act risks the health and well being of not only
seniors, but also people with disabilities.
It is particularly enlightening when the head of the Health Insurance
Association of America even admits that the Republican's concept of a
``so-called drug-only private insurance simply would not work in
practice.''
The seniors living in the 18th Congressional District of Texas
located in the City of Houston want real relief from the high price of
prescription drugs. They have always told me that you have to watch
what someone does, not what they say, in order to know what kind of
person you are dealing with.
Let me tell you what you are dealing with under the Republican plan
because to hear it from their mouths one would believe that all this
nation's seniors and the disabled would be provided with the
prescription drug coverage they need . . . however, that is not the
case.
The Democratic prescription drug plan is secure because it is part of
the Medicare system. However, the Republican scheme relies on private
insurance.
The Democratic plan provides comprehensive coverage through the
Medicare program while the Republican scheme hopes the private insurers
will provide these benefits. Can we really trust such a scheme that is
based on the profit of big insurance companies that are in the business
to make money without regard to affordability or reliability.
The biggest issue in the debate on a Medicare drug plan is how much
will seniors be required to pay out of pocket in order to receive this
benefit. Under the Democratic plan there is no deductible, while the
Republicans want our nation's elderly to pay $250 a year. If the
household were two elderly people than they would be expected to pay
$500 a year in medical prescriptions before they earn their benefit to
prescription medicines.
Under the Democratic plan, Medicare will pay half the costs of
medicines up to $2000 and by the year 2009 Medicare will pay half of
all prescription expenses for seniors up to $5000.
The Republican's will only pay half the cost of medicines up to
$2100, increasing at the rate of inflation in drug prices. Under the
Democratic plan you can see that the real meaning of catastrophic is
understood to be a great often, sudden calamity, which ordinary people
could not possibly plan to overcome without assistance.
For this reason, the democratic plan has a catastrophic benefit limit
of $4,000, after which Medicare pays all costs. Unfortunately, the

[[Page H5370]]

Republicans have a total life time limit of $6,000.
I am disappointed that the needs of seniors is not at the top of the
House's legislative agenda for consideration of a bill that should have
addressed the life and death issue of affordable prescription
medication, especially for our nation's elderly poor.
Therefore, I ask that, my Colleagues on both sides of the isle use
reason and right mindedness to find the best road to a real
prescription for what is ailing our nation's Medicare System, which
every American knows is affordable prescription medication for our
nation's seniors.
Our nations' elderly have given to this nation the opportunity to
successfully compete in today's ever-changing world, which has lead to
great economic prosperity for all of us.
Now that our economy and our nation's people are in a position to
reap benefits, that are far in a excess of our current needs, we should
not hesitate to provide those benefits, which are needed by our nations
disabled and senior citizens.
This is a small investment for our nation so that our society can
benefit from a healthier senior population, which happens to be a vital
and growing sector of our nation's economy.
It is a fact that the baby boomer generation who will be retiring
over the next decade will be the wealthiest group of seniors in our
nation's history. For this reason their long health and active
participation as consumers in our nation's economy makes great economic
sense.
I urge my colleagues to oppose this critically flawed semblance of a
prescription drug plan offered by the majority and support meaningful
prescription drug plans to improve the health of our nation's elderly.
Mr. DINGELL. Mr. Speaker, I yield 30 seconds to the distinguished
gentleman from Rhode Island (Mr. Weygand).
Mr. WEYGAND. Mr. Speaker, I rise in opposition to this proposal, as I
did earlier today, as we have been doing all day long today. What has
been happening to the American public is outrageous that, indeed, in
fact, that the Republicans will propose today a bill that will actually
cost us more in the long run, provide us less with prescription drug
coverage and do a disservice to all of our seniors.
I ask all of our Members to vote no on the bill. I ask all of our
Members not to even entertain any inkling of an idea that this will be
good for our senior citizens, and I hope that all of us will be able to
come back with a real bill for prescription drug coverage that will be
part of Medicare, not part of a bailout for insurance companies.
Mr. DINGELL. Mr. Speaker, I yield 1 minute to the distinguished
gentleman from New Jersey (Mr. Menendez).
(Mr. MENENDEZ asked and was given permission to revise and extend his
remarks.)
Mr. MENENDEZ. Mr. Speaker, as Republicans deny us a chance to offer
real prescription benefit under Medicare, I think of my mother and the
millions of seniors like her across this country who may not understand
Washington politics, but know all too well the every day struggle to
buy their medications. Like so many seniors, my mother relies solely on
her Social Security benefit, and yet her drug costs totals more than
half of her monthly income.
Mr. Speaker, very simply stated, the Republican plan is the first
step towards privatizing Medicare and denying Democrats the opportunity
to provide the only real Medicare benefit.
Mr. WEYGAND. Mr. Speaker, I raise a point of order. I object to the
use of this exhibit that is here. Pursuant to clause 6 of rule XVII, I
object to the use of this exhibit by the gentleman from New Jersey (Mr.
Menendez).
The SPEAKER pro tempore. Under the rule, the Chair will put the
question to the House. The question is: Shall the gentleman from New
Jersey (Mr. Menendez) be permitted to use the exhibit?
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.
Mr. WEYGAND. 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 371,
nays 48, not voting 15, as follows:

[Roll No. 352]

YEAS--371

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

NAYS--48

Allen
Baldacci
Barr
Bentsen
Bonior
Brown (OH)
Capuano
Clayton
Coburn
Cox
Danner
Davis (IL)
Deutsch
Dingell
Emerson
English
Evans
Ewing
Green (TX)
Hefley
Hooley
Hutchinson
Jackson-Lee (TX)
Kanjorski
Kelly
Matsui
McCarthy (NY)
McDermott
Meek (FL)
Mica
Miller, Gary
Mink
Murtha
Neal
Radanovich
Sherwood
Slaughter
Sweeney
Tancredo
Tanner
Taylor (MS)
Terry
Thomas
Tierney
Towns
Weldon (PA)
Weygand
Wu

NOT VOTING--15

Archer
Cook
Crane
Edwards
Filner
Goodling

[[Page H5371]]

Kasich
Maloney (CT)
Markey
McIntosh
Moran (VA)
Pelosi
Stearns
Vento
Waxman

{time} 1718

Mrs. EMERSON and Messrs. COBURN, MICA, ENGLISH, BARR of Georgia, and
TOWNS changed their vote from ``yea'' to ``nay.''
Ms. LEE, Ms. BROWN of Florida, Ms. ESHOO, and Messrs. GEJDENSON,
HOLDEN, McNULTY, McGOVERN, PALLONE, DeFAZIO, MENENDEZ, GEORGE MILLER of
California, JEFFERSON, RUSH, OWENS, LaHOOD, and PAYNE changed their
vote from ``nay'' to ``yea.''
So the gentleman was permitted to use the exhibit in question.
The result of the vote was announced as above recorded.

Personal Point of Privilege

Mrs. EMERSON. Personal point of privilege, Mr. Speaker.
The SPEAKER pro tempore (Mr. LaHood). The gentlewoman from Missouri
will state it.
Mrs. EMERSON. Mr. Speaker, is that poster eligible to be displayed on
the House floor? Can the Speaker answer my question as to whether or
not the quote that is in poster form on the other side of the Chamber
is going to be allowed in the Chamber here to be shown to everybody?
Because if the Speaker is going to allow that, then I would like to
make a clarification on one point in that quote.
Mr. KLECZKA. Regular order, Mr. Speaker.
Mr. FRANK of Massachusetts. Regular order.
Mrs. EMERSON. Point of personal privilege, Mr. Speaker.
The SPEAKER pro tempore. The gentlewoman will suspend.
By the previous vote of the House, the exhibit will be allowed for
the gentleman from New Jersey (Mr. Menendez) to finish. He has 15
seconds remaining.
Mrs. EMERSON. Point of personal privilege, Mr. Speaker.
The SPEAKER pro tempore. The Chair will recognize the gentlewoman if
she is yielded time, but there is no personal privilege involved here.
This is a matter of debate.
Mrs. EMERSON. Mr. Speaker, was my name on the poster?
The SPEAKER pro tempore. By the vote of the House, just the previous
vote, the House has agreed to allow the poster to be used.
The gentleman from New Jersey (Mr. Menendez) is recognized to finish
his statement before he was interrupted by the previous vote. He has 15
seconds remaining.
Mr. MENENDEZ. Mr. Speaker, the Republican plan is a cruel hoax that
fails my mother and seniors across the country. We have one of the
largest budget surpluses in our Nation's history, and Republicans would
prefer to give it away in tax cuts to the wealthy. But that is not
going to help my mother, and it is not going to help the millions of
other seniors struggling to buy medications with only their Social
Security check for income.
Vote against this unwise, unnecessary, and deceptive plan.
Mr. DINGELL. Mr. Speaker, I yield 30 seconds to the distinguished
gentleman from New York (Mr. Crowley), in opposition to the bill, in
which he is joined by the Service Employees International Union.
Mr. CROWLEY. Mr. Speaker, I rise in strong opposition to the so-
called Medicare prescription drug bill of 2000. This legislation will
not provide the necessary drug coverage for my constituents, like Don
and Gertrude Schwartz of Long Island City. He is 89 and she is 84 years
of age. Today they pay almost $400 for 100 tablets of Prilosec.
Mr. Schwartz writes, ``Isn't that an outrageous price for a
medication my wife will have to take on a regular basis?'' Yes, Mr.
Schwartz, it is. Unfortunately, his concerns will not be addressed by
this legislation today. This measure will do nothing to assist middle
class seniors like the Schwartzes, but then again, our Republican
colleagues have never been fans of the Medicare program.
This legislation subsidizes insurance companies and threatens the
stability provided to seniors by Medicare. I urge all Members to oppose
this sham of a bill.
Mr. DINGELL. Mr. Speaker, I yield 1 minute to the distinguished
gentleman from Massachusetts (Mr. Olver), who is joined in his
opposition to this outrageous bill by the United Steelworkers of
America.

Point of Order

Mr. WEYGAND. Mr. Speaker, I raise a point of order.
The SPEAKER pro tempore. The gentleman from Rhode Island will state
his point of order.
Mr. WEYGAND. I object to the use of this exhibit, Mr. Speaker,
pursuant to clause 6 of rule XVII.
Mr. THOMAS. Mr. Speaker, I ask unanimous consent that during
consideration of H.R. 4680, all Members be permitted to use exhibits in
debate.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from California?
Mr. WEYGAND. I object, Mr. Speaker.
The SPEAKER pro tempore. The Chair did hear an objection.
The question is: Shall the gentleman from Massachusetts (Mr. Olver)
be permitted to use the exhibit.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.

Recorded Vote

Mr. WEYGAND. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.
The vote was taken by electronic device, and there were--ayes 326,
noes 92, not voting 16, as follows:

[Roll No. 353]

AYES--326

Abercrombie
Ackerman
Aderholt
Allen
Andrews
Baca
Bachus
Baird
Baldacci
Baldwin
Barcia
Barrett (NE)
Barrett (WI)
Bartlett
Barton
Becerra
Bereuter
Berkley
Berman
Berry
Bishop
Blagojevich
Bliley
Blumenauer
Blunt
Boehlert
Boehner
Bonilla
Bonior
Bono
Borski
Boswell
Boucher
Boyd
Brady (PA)
Brown (FL)
Brown (OH)
Bryant
Burton
Buyer
Callahan
Calvert
Camp
Campbell
Cannon
Capps
Cardin
Carson
Chabot
Chambliss
Clay
Clayton
Clement
Clyburn
Coble
Coburn
Combest
Condit
Conyers
Costello
Coyne
Cramer
Crowley
Cubin
Cummings
Cunningham
Danner
Davis (FL)
Davis (IL)
Davis (VA)
DeFazio
DeGette
Delahunt
DeLauro
Deutsch
Dickey
Dicks
Dingell
Dixon
Doggett
Doolittle
Doyle
Dreier
Duncan
Dunn
Edwards
Ehlers
Ehrlich
Emerson
Engel
English
Eshoo
Etheridge
Evans
Farr
Fattah
Fletcher
Foley
Forbes
Ford
Fossella
Frank (MA)
Franks (NJ)
Frelinghuysen
Frost
Gallegly
Ganske
Gejdenson
Gephardt
Gibbons
Gilchrest
Gillmor
Gilman
Gonzalez
Goode
Goodlatte
Gordon
Graham
Green (TX)
Green (WI)
Gutierrez
Hall (OH)
Hall (TX)
Hansen
Hastings (FL)
Hastings (WA)
Hayes
Herger
Hill (IN)
Hill (MT)
Hilliard
Hinchey
Hinojosa
Hobson
Hoeffel
Hoekstra
Holden
Holt
Hooley
Horn
Hostettler
Houghton
Hoyer
Hunter
Hutchinson
Inslee
Istook
Jackson (IL)
Jackson-Lee (TX)
Jefferson
Jenkins
John
Johnson (CT)
Johnson, E. B.
Johnson, Sam
Jones (NC)
Jones (OH)
Kaptur
Kasich
Kildee
Kilpatrick
Kind (WI)
King (NY)
Kingston
Kleczka
Klink
Knollenberg
Kolbe
Kucinich
Kuykendall
LaFalce
LaHood
Lampson
Lantos
Larson
Latham
LaTourette
Lazio
Leach
Lee
Levin
Lewis (CA)
Lewis (GA)
Linder
Lipinski
LoBiondo
Lofgren
Lowey
Lucas (KY)
Luther
Maloney (NY)
Manzullo
Martinez
Mascara
Matsui
McCarthy (MO)
McCollum
McCrery
McDermott
McGovern
McHugh
McInnis
McIntyre
McKeon
McKinney
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Metcalf
Millender-McDonald
Miller (FL)
Miller, Gary
Miller, George
Minge
Moakley
Mollohan
Moore
Morella
Nadler
Napolitano
Neal
Nethercutt
Northup
Norwood
Nussle
Oberstar
Obey
Ortiz
Ose
Owens
Oxley
Pallone
Pascrell
Pastor
Payne
Pelosi
Peterson (MN)
Petri
Phelps
Pickett
Pomeroy
Portman
Price (NC)
Pryce (OH)
Quinn
Rahall
Ramstad
Rangel
Reyes
Reynolds
Riley
Rivers
Rodriguez
Roemer
Rothman
Roybal-Allard
Royce
Rush
Ryan (WI)
Sabo
Salmon
Sanchez
Sanders
Sandlin
Sanford
Sawyer
Saxton
Scarborough
Schakowsky
Scott
Serrano
Shays
Sherman
Shows
Shuster
Sisisky
Skeen
Skelton
Slaughter
Smith (MI)
Smith (NJ)
Smith (TX)
Smith (WA)
Snyder

[[Page H5372]]

Spratt
Stabenow
Stearns
Stenholm
Strickland
Stump
Stupak
Sweeney
Talent
Tauscher
Tauzin
Taylor (MS)
Thompson (CA)
Thompson (MS)
Thune
Thurman
Towns
Traficant
Turner
Udall (CO)
Udall (NM)
Upton
Velazquez
Visclosky
Vitter
Walden
Walsh
Wamp
Waters
Watt (NC)
Waxman
Weiner
Weller
Wexler
Wilson
Wise
Wolf
Woolsey
Wynn
Young (FL)

NOES--92

Armey
Baker
Ballenger
Barr
Bass
Bentsen
Biggert
Bilbray
Bilirakis
Brady (TX)
Burr
Canady
Capuano
Castle
Chenoweth-Hage
Collins
Cooksey
Cox
Deal
DeLay
DeMint
Diaz-Balart
Everett
Fowler
Goss
Granger
Greenwood
Gutknecht
Hayworth
Hefley
Hilleary
Hulshof
Hyde
Isakson
Kanjorski
Kelly
Largent
Lewis (KY)
Lucas (OK)
McCarthy (NY)
Mica
Mink
Moran (KS)
Murtha
Myrick
Ney
Olver
Packard
Paul
Pease
Peterson (PA)
Pickering
Pitts
Pombo
Porter
Radanovich
Regula
Rogan
Rogers
Rohrabacher
Ros-Lehtinen
Roukema
Ryun (KS)
Schaffer
Sensenbrenner
Sessions
Shadegg
Shaw
Sherwood
Shimkus
Simpson
Souder
Spence
Stark
Sununu
Tancredo
Tanner
Taylor (NC)
Terry
Thomas
Thornberry
Tiahrt
Tierney
Toomey
Watkins
Watts (OK)
Weldon (FL)
Weldon (PA)
Weygand
Whitfield
Wicker
Wu

NOT VOTING--16

Archer
Bateman
Cook
Crane
Dooley
Ewing
Filner
Gekas
Goodling
Kennedy
Maloney (CT)
Markey
McIntosh
Moran (VA)
Vento
Young (AK)

{time} 1747

Mrs. MYRICK and Mrs. KELLY changed their vote from ``aye'' to ``no.''
Mr. TAYLOR of Mississippi and Mr. GEORGE MILLER of California changed
their vote from ``no'' to ``aye.''
So the gentleman was permitted to use the exhibit in question.
The result of the vote was announced as above recorded.
The SPEAKER pro tempore (Mr. LaHood). The Chair recognizes the
gentleman from Massachusetts (Mr. Olver) for 1 minute.
Mr. OLVER. Mr. Speaker, the Republican plan is designed to fail
because it is a little more than a request for insurance companies and
HMOs to provide insurance for prescription drugs for senior citizens.
But, in fact, those HMOs and insurance companies that would provide
their plan have already made market decisions to abandon their Medicare
HMO program and pull out of virtually every rural and semi-rural area
all over America.
Why would they provide this plan? They have said that they will not.
Republicans claim that their drug plan will provide choices for senior
citizens, but their plan guarantees nothing. What would provide choice
for seniors is a simple, straight forward, universal, guaranteed
prescription medicine benefit that every American eligible for Medicare
can choose. That would provide at least one more choice for every
single American than they have today. Vote no on this sham plan.
Mr. BILIRAKIS. Mr. Speaker, I reserve the balance of my time for the
same reasons I indicated earlier.
Mr. DINGELL. Mr. Speaker, I yield 30 seconds to the distinguished
gentleman from Rhode Island (Mr. Weygand).
Mr. WEYGAND. Mr. Speaker, the gentleman from Massachusetts (Mr.
Olver) is correct. What happened with this plan that is before us
tonight is it will fail. It will fail because insurance companies are
not capable of making sure that our seniors will have prescription
drugs at the lowest affordable price.
Just 45 minutes ago, Mr. Speaker, I received this letter from United
Health Care of Rhode Island that proved that very same point. They are
pulling out of Bristol County, Rhode Island, and telling all of their
subscribers they will no longer have coverage at the end of the year.
This is what this plan will do for our seniors with regard to
prescription drugs. It will fail as soon as it is passed. That is why
we should vote no on this bill.
The SPEAKER pro tempore. The gentleman from Michigan (Mr. Dingell)
has 6\1/2\ minutes remaining. The gentleman from Florida (Mr.
Bilirakis) has 6\1/2\ minutes.
Mr. DINGELL. Mr. Speaker, I yield to the distinguished gentlewoman
from Oregon (Ms. Hooley) 1 minute.
The SPEAKER pro tempore. The Chair recognizes the gentlewoman from
Oregon (Ms. Hooley).

parliamentary inquiry

Mr. THOMAS. Mr. Speaker, parliamentary inquiry.
The SPEAKER pro tempore. The Chair recognizes the gentleman from
California for his parliamentary inquiry.
Mr. THOMAS. Mr. Speaker, parliamentary inquiry. Is it permissible
under the rules for a member of the minority party to present a chart
and then a member of the minority party to object to the member of the
minority party presenting a chart?
The SPEAKER pro tempore. The gentleman may object to the use of the
chart if he likes.
Mr. THOMAS. Mr. Speaker, my understanding is that the Chair has ruled
that, under the rules, a member of the minority party may object to
another member of the minority party offering a chart.
The SPEAKER pro tempore. Any Member may object under the rule.
Mr. THOMAS. Mr. Speaker, I ask unanimous consent that, during
consideration of H.R. 4680, all Members be permitted to use exhibits in
debate.
Mr. WEYGAND. Mr. Speaker, I object.
Mr. FRANK of Massachusetts. Mr. Speaker, reserving the right to
object.
Mr. Speaker, I reserve the right to object.
The SPEAKER pro tempore. The gentleman from Massachusetts (Mr. Frank)
is not recognized. There was an objection.
The Chair recognizes the gentleman from Rhode Island (Mr. Weygand).
Mr. WEYGAND. Mr. Speaker, I object. I object.
I yield whatever time I may have to the gentleman from Massachusetts
(Mr. Frank).
Mr. Speaker, I reserve the right to object.
Mr. THOMAS. Mr. Speaker, parliamentary inquiry.
The SPEAKER pro tempore. Objections was heard. The question is: Shall
the gentlewoman from Oregon (Ms. Hooley) be permitted to use the
exhibit.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.

Recorded Vote

Mr. WEYGAND. Mr. Speaker, I demand a recorded vote.
A recorded vote was ordered.

Parliamentary Inquiry

Mr. THOMAS. Mr. Speaker, parliamentary inquiry.
The SPEAKER pro tempore. The gentleman from California will state his
parliamentary inquiry.
Mr. THOMAS. Mr. Speaker, am I permitted under the rules, under
parliamentary inquiry, to inform all members of the majority party that
the leadership urges a no vote?
The vote was taken by electronic device, and there were--ayes 224,
noes 191, answered ``present'' 2, not voting 17, as follows:

[Roll No. 354]

AYES--224

Aderholt
Allen
Andrews
Baca
Baird
Baldacci
Baldwin
Barcia
Barrett (WI)
Barton
Becerra
Berkley
Berman
Berry
Bishop
Blagojevich
Blumenauer
Bonior
Borski
Boswell
Boucher
Boyd
Brady (PA)
Brown (FL)
Brown (OH)
Camp
Capps
Cardin
Carson
Chabot
Chambliss
Clay
Clayton
Clement
Clyburn
Condit
Conyers
Costello
Cox
Coyne
Cramer
Crowley
Cummings
Danner
Davis (IL)
Davis (VA)
DeFazio
DeGette
Delahunt
DeLauro
Deutsch
Dicks
Dingell
Dixon
Doggett
Doyle
Dunn
Edwards
Engel
Eshoo
Etheridge
Evans
Farr
Fattah
Foley
Ford
Frank (MA)
Frost
Gallegly
Ganske
Gejdenson
Gephardt
Gilman
Gonzalez
Goodlatte
Gordon
Green (TX)
Hall (OH)
Hall (TX)
Hastings (FL)
Hill (IN)
Hilliard
Hinchey
Hinojosa
Hobson
Hoeffel
Holden
Holt
Hooley
Horn
Hoyer
Inslee
Jackson (IL)
Jackson-Lee (TX)
Jefferson
John
Johnson (CT)
Johnson, E. B.
Jones (OH)
Kanjorski
Kaptur
Kennedy
Kildee
Kilpatrick
Kind (WI)
Kingston
Kleczka
Klink
Kucinich
LaFalce
LaHood
Lantos
Larson
Lazio
Leach
Lee

[[Page H5373]]

Levin
Lewis (GA)
Lipinski
Lofgren
Lowey
Lucas (KY)
Luther
Maloney (NY)
Mascara
Matsui
McCarthy (MO)
McCrery
McDermott
McGovern
McIntyre
McKinney
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Metcalf
Millender-McDonald
Miller, George
Minge
Moakley
Mollohan
Moore
Morella
Nadler
Napolitano
Neal
Ney
Nussle
Oberstar
Obey
Owens
Pallone
Pascrell
Pastor
Paul
Payne
Pelosi
Petri
Phelps
Pickett
Pomeroy
Portman
Price (NC)
Rahall
Rangel
Reyes
Rivers
Rodriguez
Roemer
Rothman
Roybal-Allard
Rush
Sabo
Salmon
Sanchez
Sanders
Sandlin
Sawyer
Scarborough
Schakowsky
Scott
Serrano
Shays
Sherman
Shows
Sisisky
Skelton
Slaughter
Smith (MI)
Smith (NJ)
Smith (WA)
Snyder
Spratt
Stabenow
Stark
Stenholm
Strickland
Stupak
Talent
Tanner
Tauscher
Thompson (CA)
Thompson (MS)
Thurman
Tierney
Towns
Traficant
Turner
Udall (CO)
Udall (NM)
Velazquez
Visclosky
Walden
Waters
Watt (NC)
Waxman
Weiner
Wexler
Wise
Wolf
Woolsey
Wynn

NOES--191

Ackerman
Archer
Armey
Bachus
Baker
Ballenger
Barr
Barrett (NE)
Bartlett
Bass
Bateman
Bentsen
Bereuter
Biggert
Bilbray
Bilirakis
Bliley
Blunt
Boehlert
Boehner
Bonilla
Bono
Bryant
Burr
Burton
Buyer
Calvert
Campbell
Canady
Cannon
Capuano
Castle
Chenoweth-Hage
Coble
Collins
Combest
Cooksey
Crane
Cubin
Cunningham
Deal
DeLay
DeMint
Diaz-Balart
Dickey
Doolittle
Dreier
Duncan
Ehlers
Ehrlich
Emerson
English
Everett
Fletcher
Fossella
Fowler
Franks (NJ)
Frelinghuysen
Gekas
Gibbons
Gilchrest
Gillmor
Goode
Goodling
Goss
Graham
Granger
Green (WI)
Greenwood
Gutknecht
Hansen
Hastings (WA)
Hayes
Hayworth
Hefley
Herger
Hill (MT)
Hilleary
Hoekstra
Hostettler
Houghton
Hulshof
Hunter
Hutchinson
Hyde
Isakson
Istook
Jenkins
Johnson, Sam
Jones (NC)
Kasich
Kelly
King (NY)
Knollenberg
Kolbe
Kuykendall
Lampson
Largent
Latham
LaTourette
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas (OK)
Manzullo
McCarthy (NY)
McCollum
McHugh
McInnis
McIntosh
McKeon
Mica
Miller (FL)
Miller, Gary
Mink
Moran (KS)
Murtha
Myrick
Nethercutt
Northup
Norwood
Olver
Ortiz
Ose
Oxley
Packard
Pease
Peterson (MN)
Peterson (PA)
Pickering
Pitts
Pombo
Porter
Pryce (OH)
Quinn
Radanovich
Ramstad
Regula
Reynolds
Riley
Rogan
Rogers
Rohrabacher
Ros-Lehtinen
Roukema
Royce
Ryan (WI)
Ryun (KS)
Sanford
Saxton
Schaffer
Sensenbrenner
Sessions
Shadegg
Shaw
Sherwood
Shimkus
Shuster
Simpson
Skeen
Smith (TX)
Spence
Stearns
Stump
Sununu
Sweeney
Tancredo
Tauzin
Taylor (MS)
Taylor (NC)
Terry
Thomas
Thornberry
Thune
Tiahrt
Toomey
Upton
Vitter
Walsh
Wamp
Watkins
Watts (OK)
Weldon (PA)
Weller
Weygand
Whitfield
Wicker
Wu
Young (AK)
Young (FL)

ANSWERED ``PRESENT''--2

Callahan
Wilson

NOT VOTING--17

Abercrombie
Brady (TX)
Coburn
Cook
Davis (FL)
Dooley
Ewing
Filner
Forbes
Gutierrez
Maloney (CT)
Markey
Martinez
Moran (VA)
Souder
Vento
Weldon (FL)

{time} 1813

Mr. SAXTON changed his vote from ``aye'' to ``no.''
Messrs. SNYDER, ADERHOLT, GEORGE MILLER of California, McDERMOTT,
GALLEGLY, and CHABOT changed their vote from ``no'' to ``aye.''

{time} 1815

So the gentlewoman was permitted to use the exhibit in question.
The result of the vote was announced as above recorded.
Ms. HOOLEY of Oregon. Mr. Speaker, every senior in the United States
that needs a prescription should be able to get it filled, no extra
paperwork, no hunting around to find a private insurance company that
might be so kind as to decide they are a good enough risk and sell them
a policy.
Unfortunately, the bill being rammed through Congress today is all
smoke and mirrors.
In this bill, who knows what the premium will be? We do not know. Who
knows what the benefit will be? We do not know. Who knows what the co-
pay will be? We do not know.
We have seen private insurance companies in the Medicare+Choice plan
pull out of areas in Oregon. The insurance companies have said they
will not be in this plan. Our seniors are demanding coverage through
the tried-and-true insurer that has not failed them, and that is
Medicare.
I want to make sure we take care of our seniors. I want to do it in a
bipartisan way, but it is very hard to be bipartisan when we cannot get
an amendment in, and we cannot get an alternative here.
I urge my colleagues to vote no on this sham of a bill and support
real drug benefits for our seniors.
Mr. DINGELL. Mr. Speaker, I yield 2 minutes to the distinguished
gentleman from New Jersey (Mr. Pallone).
Mr. PALLONE. Mr. Speaker, I only ask that my Republican colleagues be
honest about the substance and the procedure here tonight. They are not
giving us a Medicare prescription drug benefit, and they are not
willing to work on a bipartisan basis. They have stopped us from
bringing the Democratic plan to the floor, no substitute, no
amendments.
All the Republicans are doing is throwing some money at the insurance
companies hoping they will sell a drug-only insurance policy that the
insurance companies have already told us that they will not sell.
Let us look at this from the point of view of the average American
senior. That senior will benefit directly from the Democratic plan and
they will get absolutely nothing from the Republican plan.
Seniors know what Medicare is. They get their hospitalization under
Part A. They pay a monthly premium through Part B and they get their
doctors bills paid.
What the Democrats are saying, very simply, is we will give them a
prescription drug benefit in the same way. They pay a modest premium
and the Government pays for a certain percentage of their drug bills.
The Democrats give them the benefit through Medicare if that is what
they want, it is voluntary, and it covers all their medicines that are
medically necessary as determined by their doctor, not by the insurance
company.
What the Republicans tell them is to go out and see if they can find
an insurance policy to cover their medicine. If they cannot find it,
tough luck. And even if they do find it, there is no guarantee as to
what the monthly premiums are going to be or what kind of medicine they
are going to get.
Lastly, Mr. Speaker, and just as important, the Republicans leave
America's seniors open to continued price discrimination. We know that
our seniors have complained to us about the high cost and about the
discrimination, about the prices in Canada versus the prices in Mexico,
or the prices that they pay for their pet.
The Republicans do nothing to prevent the drug companies from
charging them whatever they want.
Mr. BLILEY. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from
Michigan (Mr. Upton) a member of the committee.
(Mr. UPTON asked and was given permission to revise and extend his
remarks.)
Mr. UPTON. Mr. Speaker, I rise in strong support of the bipartisan
Medicare prescription drug plan that we are now considering this
evening.
No senior citizen should be forced to forego needed medication, take
less than the prescribed dose, or go without other necessities of life
in order to afford life-saving medication.
I have watched and I have heard stories and seen seniors literally
cutting their pills in half so that they can make it last just a little
bit longer and at a little bit less cost.
Helping provide this benefit is important. As I have had a whole wave
of town meetings across my district earlier this spring, I can remember
one man who brought a bag of prescriptions with him and he said, ``Mr.
Upton, I know you are an optimist. Can you get this bill done in 2
weeks, because that is when this prescription is due and when I have to
get it renewed?'' And I pledged to him I would work very hard to try to
get a bill through this House

[[Page H5374]]

this year but, sadly, not within the 2-week time frame that he wanted.
As a member of the House Prescription Drug Task Force, I had several
core goals, tests that this bill does indeed meet. First, I wanted to
make sure that seniors are not forced into a one-size-fits-all plan run
by a distant, faceless, Federal bureaucracy and all that means in
rules, regulations, restrictions, and red tape.
Second, I wanted my constituents to have the same type of plan of
choice that the President, all of us as Members of Congress, and the
rest of the Federal workforce does. I want my constituents to have the
ability that I have to select from plans that are competing for
premiums on the basis of how well the restraining health care costs,
providing access to high quality care.
I urge all Members to support this bipartisan plan.
Mr. DINGELL. Mr. Speaker, I yield the balance of the time to the
gentleman from Ohio (Mr. Brown).
Mr. BROWN of Ohio. Mr. Speaker, I thank the gentleman from Michigan
for yielding me the time.
Mr. Speaker, I have an idea. What if Congress broke Medicare apart?
Congress would tell seniors to look to the private insurance market if
they want to piece it back together, the seniors could buy one plan to
cover doctors' visits, another plan to cover hospital stays, a third to
cover home health services. Perhaps they could purchase an Aetna plan
for outpatient care, a Kaiser plan for physical therapy, a Blue Cross
plan for medical equipment.
No one in this body, Mr. Speaker, would dare offer a proposal like
that because it is simply absurd. But why is it any less absurd to
isolate prescription drugs and require Medicare beneficiaries to carry
a separate private insurance policy for that benefit?
If the GOP prescription drug plan is a back-door attempt to privatize
Medicare, my colleagues should tell us so. If the goal of this Congress
truly is to help America's senior citizens, this bill simply is not a
real option.
Medicare came into being because half of all seniors could not get
coverage. Medicare, a nationwide plan with a risk pool of 39 million
strong, is a stable, reliable means of ensuring coverage for our
seniors. Medicare works because it guarantees the same basic benefits
to all beneficiaries regardless of where they live, regardless of their
income, regardless of their social status, regardless of their gender.
It is fair.
H.R. 4680 costs $40 billion. Yet, it offers Medicare beneficiaries
nothing tangible. Think about the kind of questions seniors might have
about this proposal: Will I be able to buy this new coverage? How much
will it cost me? How much will the Government contribute on my behalf?
Which drugs will my doctor be able to prescribe? Is this new benefit a
good deal for me?
Under the Republican proposal, the answer to every one of these
questions is ``who knows.'' When we are allegedly addressing the single
most important problem for millions of people in this country, that
answer, Mr. Speaker, should get them fired.
Vote no on H.R. 4680.
Mr. BLILEY. Mr. Speaker, I yield the balance of the time to the
gentleman from North Carolina (Mr. Burr) the distinguished member of
the committee who has worked long and hard on this bill.
(Mr. BURR of North Carolina asked and was given permission to revise
and extend his remarks.)
Mr. BURR of North Carolina. Mr. Speaker, while we have been here
today to debate this bill, many Medicare beneficiaries across this
country have taken their medication now for the third time. How long
must they wait? The time is right today for us to solve this problem.
Look around us. Look at this Chamber, the power that exists here, the
Members before us who have handled the legislation that is so important
to the future of this country. I wonder if in the old Statuary Hall
just down the hall from here if the words ``sham,'' ``hoax,''
``dangerous'' were used when they debated legislation that we still
look at today that affects our lives.
I do not believe they did. Because there was a spirit then that there
were some things that rose above politics. There were some things that
were so important for future generations that it bypassed everything.
Thomas Jefferson said, ``I am not an advocate of frequent changes in
laws and institutions, but laws and institutions must advance to keep
pace with the progress of the human mind.''
It was a message to us. It was a message to America that we have an
obligation to revise and update our laws and, importantly, this
institution.
This is such an opportunity to take a 35-year-old program and to make
an addition that technology has now made possible to be part of that.
Mr. Speaker, it is time for us to see the human face, the seniors,
the disabled that qualify for Medicare all across this country that are
waiting for us. They are waiting for us to devise a plan. They are
waiting for us to create a benefit. I truly believe today that
Republicans and Democrats are both trying to supply that benefit. But
we have some very stark differences.
The President would like to administer this program through the
Health Care Financing Administration. We want to do it through a new
entity, not an entity that is bogged down with a system today that they
cannot run but with one whose only responsibility it is is to
administer and negotiate a drug benefit.
The President wants a one-size-fits-all. We believe that choice is
important. Choice is important at HCFA today because they use private-
sector insurance companies in Part A and Part B and they have the
flexibility in each region to design that benefit to meet the needs of
that region.

{time} 1830

Mr. Speaker, my mother deserves the passage of this bill. She is one
of those seniors that takes quite a bit of medication. Thank goodness
she is able to afford it. But she deserves it because she has reached
that golden age; and just as much as she deserves it, my children
deserve that whatever we do today they can afford tomorrow, and that is
why it is so delicate an issue.
Mr. Speaker, this plan makes drug benefits available. It makes them
affordable. They are voluntary. It has the security and predictability
that seniors need. It has choice and it does not come from that face we
know as government.
It will stand the test of time. It will stand the test of the cost;
and more importantly, Mr. Speaker, it will stand the weight of a
doubling of the senior population in America.
George Bush stood on the steps of this Capitol in 1988, and he said
in his inaugural address, we are not the sum of our possessions. They
are not the measure of our lives. In our hearts, we know what matters.
We cannot hope only to leave our children a bigger car or a bigger bank
account. We must hope to give them a sense of what it means to be a
loyal friend, a loving parent, a citizen who leaves his home, his
neighborhood and his town better than he found it.
Mr. Speaker, as we close in on July 1, the year 2000, the 35th
anniversary of the creation of Medicare, I hope it is this body that
passes that date, having passed a prescription drug benefit so for the
first time seniors in America will have access to affordable drugs for
their well-being.
I thank the gentleman from Virginia (Chairman Bliley) for his help,
the gentleman from Texas (Mr. Archer), and all the Members that were
involved.
Mr. SANFORD. Mr. Speaker, I rise today, with great regret, to oppose
H.R. 4680. It's been said that the road to hell is paved with good
intentions. If you follow this debate on prescription drug coverage for
Medicare beneficiaries you would understand that adage all too well.
Throughout the debate, both Republicans and Democrats have tried to
gain a political advantage in this election year by offering competing
plans that would provide drug coverage. These plans, in the end,
represent a bidding war for votes. So while I am the first to recognize
the fact that many people need help with prescription drugs, I am not
convinced that adding another element to the Medicare program that the
Trustees say is going bankrupt is the way to get there. In particular,
Washington's current proposals have two problems: 1. It does little
good to add prescription drugs to Medicare if it still goes bankrupt,
and 2. Both plans, particularly the President's leaves room for this
``cure'' to get much more expensive.
First, let's identify the problem. Today, one out of every three
seniors does not have any prescription drug coverage. Compounding that
problem is that prescription drug costs have increased an average of
12.4 percent annually, while overall health care spending has increased
by 5 percent. The average senior

[[Page H5375]]

spends $500 or less each year on prescription drugs. In looking at the
proposals, you can see that they we are using shotgun rather than a
rifle in our aim to fix this problem. The plans are designed to offer
prescription care to all Medicare beneficiaries--including the
millionaire widow living in Palm Beach--rather than just those who
truly need it, low-income seniors without prescription drug coverage.
It's important to focus because, despite current opinion, dollars are
limited in Washington.
The House Republican plan is designed to implement a voluntary,
market-oriented approach to prescription drug coverage, added as
Medicare part D. The Republicans guarantee that each region of the
country will have two competing insurance plans from which to choose.
The insurance coverage includes a $250 deductible and require seniors
to co-pay 50 percent of costs up to $2,100 each year. If a senior's
drug costs go beyond $6,000 then the government and insurance pay all
of the costs. The new program is projected to cost $37.5 billion over 5
years and $155 billion over 10. However, that projection includes a
couple of unlikely assumptions--that there will be no growth in
Medicare and that 80 percent of seniors will participate in this
program.
Remember, only 33 percent of seniors have no drug coverage and only
28 percent pay more than $500 a year out of pocket. Under this
voluntary plan, only seniors with little or no coverage and high
prescription drug costs will sign onto this plan. Such enrollment is
known as adverse selection and leads to high premiums. This legislation
will, in the long run, force the taxpayers to pick up the cost of the
increasing premiums. Taxpayers will also have to guarantee the
profitability of the insurance plans. If you include adverse selection
into the formula, the costs of this prescription drug legislation could
go as high as $600 billion over the next 10 years. The financial risks
of this bill are just too great. The prescription drug coverage
proposal starts looking like the Medicare private insurance plans set
up in the Balanced Budget Act of 1997. Many seniors signed up for those
plans in the first year, only to see the plans close out the next year.

The President's plan presented different but equally bad options. His
plan is optimistically estimated to cost $35 billion over 5 years and
nearly $300 billion over 10 years. The prescription drug program would
be a part of the current Medicare system, similar to Medicare part B.
Monthly premiums begins at $24 and seniors would co-pay 50 percent of
prescription drug costs up to $2,000. Premiums would go up to $51 a
month for premiums and the ceiling is lifted to $5,000 a year. Again,
the proposal is voluntary, so there would also be adverse selection--
making premiums again, much more expensive than now advertised.
The problem with this plan is that, like all other portions of
Medicare, the government gets to decide how big the benefit and whether
or not you even get it. Seniors today can probably already relate to
this. Since I came to Congress in 1995, more and more seniors tell me
that they can not longer see their doctor simply because they have
retired and joined Medicare. Today, Medicare pays 70 percent of what
the private sector pays for the same procedure. Since the creation of
Medicare in 1965, payments to providers have been cut 14 times, the net
result is less access for patients. One can reasonably believe that the
same will happen under a prescription drug program. Imagine Congress,
trying to save billions of dollars sometime in the future, cutting
prescription payments (cost controls) or taking expensive medications
off the list of approved medications. The government should simply not
be in the business of making those life or death decisions.
At the end of the day, I maintain that Congress and the President
should implement a more comprehensive reform bill that gives seniors
the power to design their health care coverage. They could choose the
type of insurance plan they want, whether or not to have prescription
drug coverage, and how much they are willing to share in the cost
burden. Such a proposal was offered by the Bipartisan Medicare
Commission Co-Chairs Representative Bill Thomas and Senator John
Breaux. The proposal would use the market place to make a more
financially secure and less expensive plan for seniors. Perhaps when
the dusts clears and November has passed, calmer heads will prevail.
Mrs. FOWLER. Mr. Speaker, the Medicare Prescription Act of 2000 is of
particular importance to me as I represent hundreds of thousands of
senior Floridians who are seeing prescription drug costs skyrocket out
of control forcing many to choose between food and medicine.
We now have a tremendous opportunity to help millions of senior
Americans afford the prescription drugs they need, without jeopardizing
the Medicare benefits many already enjoy.
Our bipartisan effort offers the best prescription for America. We
strengthen Medicare while providing prescription drug coverage.
More importantly--it is affordable, available, and voluntary for all.
Under this bipartisan plan--seniors will no longer have sticker-shock
when paying for their medicine. For the first time, they will have
meaningful bargaining power.
Unlike the Clinton/Gore plan--we give all seniors and the disabled
the right to choose an affordable prescription drug benefit that best
fits their need. They can choose a ``Cadillac'' plan or opt for a more
affordable ``Honda'' plan--which ever they need.
We lower costs of prescription drug coverage through group buying
power--not by having politicians or federal bureaucrats set their
prices. This will reduce prices by an average 25 percent and up to 39
percent. The CBO even estimates we will save seniors twice as much than
the Clinton/Gore plan.
Our plan also includes a cap on catastrophic drug costs. This cap on
out of pocket expenses at $6,000 a year gives seniors peace of mind--no
longer will they be forced to choose between bankruptcy and the drugs
they need.
I urge my colleagues to support this important legislation.
Mr. BENTSEN. Mr. Speaker, I rise in strong opposition to H.R. 4680,
the Medicare Rx 2000 Act, legislation purporting to provide a new
prescription drug benefit for America's senior citizens. I believe that
this bill is fatally flawed and should be defeated.
While Medicare has been a tremendously successful program in
providing health care for senior citizens and a better quality of life,
the rising use and cost of prescription drugs demands congressional
action. Prescription drugs now account for about one-sixth of all out-
of-pocket health spending by senior citizens. The percent of
beneficiaries without coverage who cannot afford to buy their medicine
is about five times higher than those with coverage (10 percent
compared to 2 percent). Almost 40 percent of those over age 85 do not
have prescription drug coverage. H.R. 4680 not only does nothing to
address this crisis in health care but also cruelly raises the hopes of
America's senior that this problem will be meaningfully addressed.
Specifically, Mr. Speaker, this plan subsidizes insurance companies
and sets us on a path of privatizing Medicare. H.R. 4680 provides
premium subsidies to insurers but does nothing to ensure that these
premium subsidies are passed on to seniors. Moreover, private insurance
plans have said that they will not offer this coverage. Scott Serota,
acting president of Blue Cross & Blue Shield put it best when he said
``The idea [a private sector drug benefit] provides false hope to
America's seniors because it is neither workable nor affordable.''
Thus, the benefits offered are illusory and unstable, and the
Republican majority know it. Moreover, even after these large
subsidies, there are no guarantees under the Republican plan that
seniors can afford to buy this coverage.
As a senior member of the House Budget Committee, I offered a
meaningful prescription drug benefit during the markup of the fiscal
year 2001 budget. At the time, Chairman Kasich and others committed
this effort to devising a budget that sacrifices everything in the name
of giving the largest possible tax cuts without doing anything to
address the long-term needs of Social Security or Medicare. H.R. 4680
is the unfortunate offspring of budget language that the House Budget
Committee adopted and that, at the time, I characterized as mere lip-
service to the public's desire for a prescription drug benefit. The
budget provision provided for a ``$40 billion reserve'' that, during
the Budget Committee markup, was spent several times on prescriptions,
Medicare reform, and debt reduction. Today, The Republicans are married
to ``$40 billion,'' an seemingly arbitrary number. However, actually
the Republicans are putting tax cuts ahead of the needs of seniors.

Both during the budget process and throughout the 106th Congress, I
have witnessed the Republican majority purposefully and effectively
provide for tax cuts, particularly for the highest income bracket. When
it comes to providing for meaningful relief for our seniors, we see
this limp halfhearted political measure that in no way guarantees any
prescription drug relief for our seniors.
I also believe that this procedure has not provided adequate debate
about a critically important issue to 39 million Americans, our
nation's senior citizens. Rather than allow an open and honest debate
on how the Congress would provide for a prescription drug benefit for
America's seniors citizens, the Republicans has scripted a closed rule
limited debate,

[[Page H5376]]

predicated on an arbitrary budget resolution, which they have shown a
willingness, time and again, to violate when it suits their purposes.
Unfortunately, both their flawed insurance subsidy plan and their
desire to stifle debate in ``The People's House'' on a question of
vital importance to nearly 40 million beneficiaries, indicates, once
and for all, that responding to the needs of America's senior citizens
does not suit the political purpose of congressional Republicans.
The Republicans have designed a flawed plan that delays
implementation and limits catastrophic coverage to only those costs
that exceed $6,000. Under their plan, if the government pays an insurer
enough to create a plan where the premiums are not set too high by the
insurer that someone can afford it, you still only get a benefit of
about $1,000 less premiums and after that you are on your own until you
reach $6,000. The Republicans know full well that a real, affordable,
workable prescription drug plan costs more, but they are opposed to
investing in this coverage for America's senior citizens.
During the drafting of the FY 2001 Budget Resolution, the Republican
majority found room for $175 billion of tax cuts, primarily for upper-
income Americans, but said that ``if and when'' a Medicare prescription
drug plan could be developed it would have to be limited to $40
billion. There was no study, no scientific basis, no analysis that
resulted in this $40 billion figure, rather it was a back of the
envelope calculation to make room for the huge tax cut they wanted to
fund.
Furthermore, during the markup of the budget resolution, I offered an
amendment to restore funding for teaching hospitals, academic medical
centers and other Medicare impatient costs. My amendment was rejected
and I was told by the Republican majority that any changes to the
Balanced Budget Act (BBA) of 1997 could be addressed out of the $40
billion set aside. I was also told that money could be used for
Medicare reform. But, of course that's the same money that was
supposedly set aside for prescription drug coverage.
Now we hear that the Republican leadership has promised to push
legislation later this year to revise the 1997 BBA as it relates to
Medicare providers to the tune of $21 billion. But, if we are to abide
by the FY 2001 Budget Resolution and adopt the Republican's
prescription drug plan, there will be no money left for a BBA fix.
Clearly, the Republicans have no intention of abiding by the FY 2001
Budget Resolution so long as it does not serve their political
purposes.

This is not a new phenomenon. History shows that when the Republican
majority wants to violate the budget resolution, they do it with
finesse.
Under the Balanced Budget Act of 1997, Agriculture programs were to
be funded at $11.3 billion in 1999 and $10.7 billion in 2000. But, when
the time came for Congress to live by these caps, the Republican
majority, recognizing the harsh effects these constraints would have on
America's farmers, abandoned them. Agriculture was funded at $23
billion in 1999 and $35 billion, more than double the BBA figure for
1999 and nearly three and half times the BBA level for 2000.
When the Republican leadership decided they wanted to spend more, not
less, on highway construction, than provided for under the 1997 BBA,
they busted the caps. So far, they have funded the Transportation at
$40.6 billion in 1999 and $44.3 billion in 2000, $1.7 billion and $5
billion for each year respectively.
Again, when the Republican leadership wanted to increase funding for
the Department of Defense, they did not let arbitrary restrictions, in
place since the BBA of 1997, hinder them. They increased outlays over
the prescribed BBA level for 1999 by $17.1 billion and, for 2000, by
$14.5 billion.
Mr. Speaker, don't get me wrong. I do not dispute the need, at times,
to adjust BBA caps when the need is justified. What I do challenge is
whether the Republican leadership is really sincere about helping
America's senior citizens. They found a way to finesse budget limits
for national Defense, for highways and for our struggling farmers.
These are all worthy causes, but why won't they work around the budget
resolution for America's senior citizens? Why won't they do this for
the generation that fought ``The Great War'' and built the nation? Why
won't they do this for those we honored this past week, who fought the
``Forgotten War'' in Korea?
If the Republicans were really sincere about helping our seniors,
they would not hide behind artificial budgets and stifle debate. They
would allow the Democrats, who started this debate in the first place,
to bring up our bill which provides for meaningful, voluntary,
universal prescription drug coverage under Medicare.
Let us have the debate on what is best for senior citizens, even if
it means debating a real drug benefit versus large tax cuts. But, let
us have the debate.
I am strongly supporting the Democratic alternative legislation that
would provide meaningful, comprehensive prescription drug benefits for
our nation's senior citizens. The Democratic plan provides better
benefits at a lower cost for the elderly. It includes zero deductible
and a premium of $25 per month in 2003. It also includes subsidized
premiums for low-income seniors who may have difficulty paying these
premiums. The Democratic plan provides immediate coverage for
prescription drugs starting in 2003, rather than the delayed
implementation included in the Republican plan. The Democratic plan
also provides better catastrophic benefits by limiting out-of-pocket
expenses to $4,000, a full $2,000 lower than the $6,000 limit included
in the Republican plan.
The Democratic plan would also provide $21 billion in relief to rural
and urban hospitals, nursing homes, home health agencies, and other
health care providers who have faced difficulties due to the reductions
included in the Balanced Budget Act of 1997. In my district, many of
the teaching hospitals at the Texas Medical Center are facing increased
pressures to maintain their teaching mission in a time of lower
Medicare reimbursements. This comprehensive plan would provide needed
revenues to ensure that our health care system remains the envy of the
world.
I am disappointed that the Democratic plan will not be considered
today and for all of these reasons, I urge my colleagues to oppose this
bill.
Mr. GILMAN. Mr. Speaker, I rise today in qualified support of H.R.
4680, the Medicare Rx 2000 Act. I urge my colleagues to carefully
consider this issue in making a final decision.
Mr. Speaker, we are all fully aware of the explosion in costs for
prescription drugs in recent years. This phenomenon has in part been
linked to the rapid proliferation of the number of new drugs that have
become available in the past decade. We are currently enjoying a period
of revolutionary advances in the fields of medicine and medical
technology. Yet, at the same time, a significant portion of our elderly
population is unable to benefit from these new advances, due to the
high costs that are associated with them. This is ironic, when one
realizes that senior citizens are the primary group that these new
advances are targeting.
One fact that has become increasingly apparent is that Medicare is
woefully inadequate in meeting the medical needs of today's senior
citizens. When Medicare was created in 1965, outpatient prescription
drugs were simply not a major component of health care. For this
reason, Medicare did not provide coverage for self-administered
medicine.
Today's health care environment is vastly different from that of
1965. The majority of care is now provided in an outpatient setting,
and dozens of new prescription drugs enter the market every year to
treat the common ailments of the elderly, including cancer, heart
disease, arthritis, and osteoporosis.
But while the health care environment has made remarkable progress
since 1965, Medicare has stood in place. Consequently, most of my
colleagues and I have heard from constituents who are now facing the
dilemma of paying for these expensive new drugs while living on a fixed
income. The individual who is forced to choose between food and
medicine is no exaggeration. It is an all too common occurrence across
the country. The high cost of prescription drugs have become a threat
to the retirement security of our nation's senior citizens.
It is for this reason that I am pleased to see that the Ways and
Means Committee has completed its work on a proposal to provide
prescription drug coverage for Medicare beneficiaries. What concerns
me, however, is the process by which this measure was brought to the
full House for consideration.
Mr. Speaker, the decision to add prescription drug coverage will
result in the greatest change in the Medicare Program since its
creation. This is not something that should be done lightly or in
haste. Given that, I have serious reservations about bringing such
major policy-changing legislation to the floor for final passage less
than 3 weeks after it was introduced.
With that said, I would like to comment on the positive points of the
bill as well as to highlight some of my specific concerns with the
legislation.
In my view, any proposal to offer prescription drug coverage under
Medicare needs to contain the following characteristics to be
voluntary, to have universal eligibility under Medicare, contain stop-
loss protections to guard against catastrophic expenses, offer choices
in the type of coverage provided, and remain a good value over time.
The proposal outlined in H.R. 4680 clearly meets these requirements.
It differs from the administration's proposal in that it defines the
scope of its stop-loss protections, and ties its benefits to medical
inflation and the actual costs of the drugs, rather than the Consumer
Price Index, H.R. 4680 also avoids a one-size-fits-all government-
imposed solution by offering senior citizens a choice in the types of

[[Page H5377]]

plans in which to enroll. In doing this, the government will guarantee
that at least two plans will be available in every area of the country.
Moreover, the proposal fully funds all costs for those enrollees below
135% of the poverty rate, and partially funds the costs of those up to
150% of the poverty rate.
In addition, this legislation also establishes a new agency, the
Medicare Benefit Administration, to oversee the implementation of the
plans. It further creates an office of beneficiary assistance and
Medicare ombudsman to serve as a patient advocate, and mandates the
establishment of a policy advisory board much like those for the IRS
and Social Security Administration.
As I mentioned, I do have some reservations about certain aspects of
this bill. The first of these is the matter of adverse selection.
Simply put, this is the condition whereby most seniors in good health
avoid signing up for a plan, leaving the majority of enrollees coming
from the sickest segment of the population. If this were to occur, the
premium and deductibles would have to be far higher than presently
outlined.
The bill's sponsors reply that by covering part or all of the costs
of those with incomes up to 150 percent of the poverty level, the
proposal would ensure that there would be an adequate base of healthy
seniors to offset the portion in greatest need of the benefit. This
remains to be seen, and I believe that this particular aspect of the
plan needs to be monitored closely.
I am also concerned about the viability of private insurers
underwriting plans in areas where it is not profitable for them to do
so. Recent experience with Medicare+Choice plans in my district have
borne out this concern. In such cases, the government would step in as
the ``insurer of last resort,'' assuming a share of the risk as well as
subsidizing the cost of offering service in a rural area. My chief
concern with this is that it has the potential to become a costly
venture for the government, where the private insurers deliberately
hold out in order to secure a greater level of government funding.
In spite of these concerns, I firmly believe that this legislation is
an important first step in providing a benefit to our senior citizens
which is long overdue. The prescription drugs situation will not change
on its own in the future. Rather, we will continue to see a flood of
new revolutionary products hitting the market. However, there is a
price to pay for innovation, as our recent experience has shown. In
accepting this, it is important that we do not continue to fall into
the trap in which we presently find ourselves--having new products that
are too expensive for their target audience.
This bill is the first step towards correcting this problem. For that
reason, despite my stated reservations, I intend to give it my
qualified support. It is my hope that my concerns will be addressed in
a future House-Senate conference on this issue. Should this not be the
case, I will reconsider my future support when the final compromise
language comes before the House.
Regardless of the final outcome, I will not support any legislation
which, under the claim of reducing drug prices, denies doctors the
ability to prescribe those medicines which they deem best for their
patients simply to save money. This is exactly what has happened to the
government-run systems in the United Kingdom and Canada.
The relationship between the doctor and patient is sacred and should
not be tread upon--especially by any government bureaucrat. This issue
is too serious for party politics, and, as I stated at the outset, I
urge my colleagues to give it their careful and thoughtful
consideration.
Mr. COYNE. Mr. Speaker, I rise today in opposition to the Republican
Prescription Modernization Act and in support of the Democratic
Substitutes. The Republican bill before us today does not assure all
Medicare recipients access to affordable prescription drugs. Seniors
have learned that they cannot rely on private insurance plans.
The Democratic Substitute is a true entitlement for Medicare
beneficiaries and it would be administrated by Medicare. Under our
bill, all seniors are entitled to defined premiums and defined
benefits.
Under the Democratic Substitute, seniors are entitled to a
prescription drug benefit with a $25 premium and no deductible. The
Republican plan offers no defined premium and no fixed deductible. Both
of these factors will vary from region to region and from year to year.
I urge my colleagues to vote against the Republican plan with its
entitlements for the drugs and insurance industries. The Democratic
substitutes is the only plan that entitles seniors to the benefits they
deserve. The Republican plan is not an entitlement for senior citizens
but an entitlement for insurance companies and pharmaceutical
companies.
Mr. Speaker, for these reasons, I urge my colleagues to vote against
this bill.
Mr. KNOLLENBERG. Mr. Speaker, I rise in strong support of H.R. 4680,
the Medicare Rx 2000 Act, and urge its adoption.
We all know that American society is growing older and there is a lot
of discussion about the best way to prepare for this reality. Despite
the fact that older Americans make up only 13 percent of our
population, this age group consumes more than one-third of the
prescription medicines in our country.
The non-partisan Congressional Budget Office recently found that, in
three years, the average senior will spend $2,075 annually on
medication. Compare that to 1970, a year when surveys revealed that
people over the age of 65 spent an average of $56 on prescription
drugs. That equates to $247 in today's dollars, which is a mere
fraction of the cost citizens are currently paying. This is a steep
increase by any measure.
The bipartisan plan we have before us is eminently fair. It provides
reasonable choices for consumers. Every consumer is guaranteed a choice
of a least two prescription plans. We should reject the `one size fits
some' solution that some Members advocate. I think a recent New York
Times (June 18, 2000) subtitle says it all: ``Democrats' Prescription
Plan Calls for `One Size Fits All'--G.O.P. Offers Choice''. The
American people saw through this scheme in 1994 when they rejected the
Clinton health plan and they do not want to see a repeat of this
mentality.
The bipartisan plan ensures that our nation's neediest seniors
receive prescription drug coverage. This vital safety net ensures that
no one will be left without coverage.
The bipartisan plan fits within the framework of the budget
resolution this Congress adopted. I sit on the Budget Committee and we
responsibly set aside $40 billion specifically for a prescription drug
benefit. In fact, I would remind my colleagues that substitutes offered
by the Ranking Democrat on the committee, Mr. Spratt, and the Blue Dog
Coalition both offered $40 billion--exactly the same figure we are
using today.
Some Members advocate busting the budget through a $100 bill scheme.
Like every household, we have to live within our means, especially
since we are at the dawn of the balanced budget era.
With all of the pomp and bluster of the prescription drug issue it is
easy to lose sight of the bigger, more important issue: overall
Medicare modernization. The bill we have before us is a nice step but
we need to do more to address this critical issue. I look forward to
the day when we turn our full attention towards saving and
strengthening our Medicare system.
I urge a ``yes'' vote on the bipartisan prescription drug plan.
Mr. KILPATRICK. Mr. Speaker, I rise in opposition to the bill, H.R.
4680, the Medicare Drug 2000 Act. I am outraged and frustrated that my
colleagues across the aisle gave us no opportunity to vote or debate
our Democratic alternative. That is ironic when you consider the
opposition likes to champion itself as the party choice; yet, we are
denied the opportunity to vote for a different choice today. It is
either the Republican plan or no plan. Can it be that they are afraid
to have their bill measured against a more affordable and comprehensive
prescription drug proposal that Democratic Members sought to offer but
were denied by the majority? The Republican plan cannot stand up to the
rigors of a full, fair and honest debate.
I oppose the legislation not only on procedural grounds, but for
reasons of substance as well. I believe that a prescription drug
benefit under Medicare must adhere to three principles: the benefit
must be universal, it must be comprehensive, and it must be affordable.
The Republican proposal fails on all three times tests.
This bill lacks universality. I believe a Medicare prescription drug
program should be available to eligible senior citizens or disabled
persons from Michigan to Maine, from Oregon to Ohio, from Alaska to
Alabama. This bill does not guarantee prescription drug coverage for
all Medicare beneficiaries at an affordable price. It is restricted to
only those who can afford to purchase private market drug plans.
The Republican plan lacks a comprehensive package of benefits. My
Republican colleagues point out that their plan is not a ``one size
fits all'' plan. That is a cliche without meaning. I would suggest it
is important to define by what ``one size fits all'' means. If one size
fits all means a comprehensive set of pharmaceutical products, then I
am for it. If one size fits all means that new drugs become available
to everyone then I am for it. If one size fit all means that the
prescription drug program is responsive to the needs of our severely
disabled, then I am for that, too. The Republican plan is far from
comprehensive.
The Republican bill creates a multi-tiered system of coverage with
the lowest beneficiaries limited to bargain basement plans. The
Republican plan subsided private health insurance companies to offer
``Medigap-like'' policies providing prescription drug coverage to
Medicare beneficiaries. Even the president of the Health Insurance
Association of America (HIAA) has said that private insurance

[[Page H5378]]

companies will not offer these drug policies because they do not want
to assume the financial risks.
Although the bill contains no set deductible or premium, it is
guesstimated by members of the Ways and Means Committee that seniors
will pay a $250 deductible and a monthly premium of $37 to $40--a total
of $700 off the top of modest budget as the price of admission for the
benefit. The only way to make an affordable prescription drug coverage
for all beneficiaries is to establish a prescription drug benefit
administered by the Medicare program--just like benefits under part A
and part B of Medicare. We need only look at Medigap insurance premiums
costs seniors are charged for prescription drug coverage. Depending on
the state, drug coverage can be more than $100 per month for a person
65 years of age and more than $200 per month for a 75-year old. This
plan for fails to meet the test of affordability.
Another glaring defect of the Republican plan is that the benefits
are not guaranteed. Medicines may be limited by private plans, and
pharmacies may also be limited. Private insurers could discourage
seniors with high drug costs from enrolling by offering plans that have
few up-front costs such as no deductible and low co-payments but leave
seniors paying a large amount before the $6,000 catastrophic threshold
kicks in. Under the GOP bill, Medicare would not provide a single
dollar of direct premium assistance for middle-class beneficiaries
whose income is above $12,000 a year. The bill subsidizes the insurers
under theory that the private sector offer drug benefit coverage at
significant cost savings. Given the meager subsidies, it is very likely
that the premiums would still be too expensive for many seniors.
The Republican plan is all bread and no meat, a false promise to our
senior citizens. The plan undermines the Medicare program by
contracting out the program to private insurers who will repeat
corporate subsidies and produce very little for the health security
needs of the nation's seniors. What the Republicans are asking us to do
today is ``buy a pig in a poke.'' Frankly, that's not good enough for
us and it's not good enough for our senior citizens.
We live in a special time in our nation's history. We are
experiencing recorded economic growth and generating budget surpluses
that are without precedent. The President's Mid-Session Review reported
that budget surpluses over the next 10 years will total $4.2 trillion,
a $1.3 trillion increase from the 10-year surpluses estimated in the
President's budget issued last February.
We have no modern day record to guide us through this period of
economic prosperity. Even in era of record budget surpluses and
economic growth, I recognize the importance of keeping a watchful eye
on the bottom line. At the same time, we have the resources to fund a
reasonable prescription drug benefit that is universal, comphrensive
and affordable. The Republican plan fails.
I urge my colleagues to joint me in voting against this bill.
Mr. WATTS of Oklahoma. Mr. Speaker, today I rise in support of H.R.
4680, the Medicare Prescription Drug Act of 2000. The Medicare program
provides significant health insurance coverage for 39 million aged and
disabled beneficiaries. However, the program does not offer protection
against the costs of most outpatient prescription drugs. This has
created a critical need for a significant drug benefit.
However, the potential cost of adding prescription drug coverage has
been the primary impediment to its implementation. In response to this,
Republicans have unveiled a plan to strengthen Medicare and provide
prescription drug coverage for all senior citizens and disabled
Americans, including those in rural areas. It focuses on three key
principles: coverage will be affordable for all, available for all and
voluntary for all--regardless of income or location.
In Oklahoma and other parts of rural America, health care is a matter
of access. The Republican plan offers protections for seniors in rural
areas by guaranteeing availability of at least two drug plans in every
area of the country and requires convenient access to pharmacies.
The Republican plan utilizes a public-private partnership to let
seniors choose the right coverage from several competing prescription
drug plans, or to keep their existing coverage. The plan also protects
seniors from high out-of-pocket drug costs, without resorting to price-
fixing or government price controls.
We want to give individuals the power to decide what is best for them
and choose the prescription drug coverage that best meets their needs.
Therefore, I urge my colleagues to vote in favor of the Medicare
Prescription Drug Act.
Mrs. MALONEY of New York. Mr. Speaker, today I rise in opposition to
the Republican prescription drug plan. I want to make very clear that
the 2 plans are strikingly different.
As co-chair of the Women's Caucus I want to stress the importance
prescription drug coverage to older women throughout the country.
The average income for a woman over the age of 65 is just $14,820.
Thus the Republican Leadership's prescription drug plan, which has
proposed only a 50 percent decrease in drug costs, is still
unaffordable to most older women.
Additionally, the suggested prescription plan's catastrophic coverage
is not initiated until the beneficiary's drug costs have reached
$6,000. This obviously does not provide seniors with the safety net
they deserve given their limited incomes.
Furthermore, prescription drugs are now the largest out-of-pocket
health care expense for America's seniors. On average, America's
seniors fill 18 prescriptions each year, and nationally, spending on
prescription medications increases 15 percent annually.
But even more disturbing is the growing evidence that many of
America's major drug companies are engaging in a deliberate pattern of
price discrimination.
Many seniors, without drug coverage, are being forced to pay prices
that are significantly higher than those charged to other customers,
such as large HMOs.
I was so concerned about this problem that I had the staff of one of
the committees I serve on work with my staff to study the problem of
drug pricing in my own district. And what they found shocked me.
First, they discovered that seniors in Manhattan without prescription
drug coverage--and that is about three-quarters of today's seniors--pay
two and a half times as much for certain prescription drugs as other
consumers, such as members of large HMOs.
The study looked at the five best-selling prescription drugs and
found that, in each case, seniors in my district pay more than twice
what other consumers pay.
In one instance--the cholesterol medication Zocor--seniors in my
district pay four times what consumers in HMOs pay.
In addition, they took a look at the prices American seniors pay and
compared them to the prices that seniors in Mexico and Canada pay. In
some cases, they pay seven times what consumers in other countries pay.
The conclusions of both studies were clear: drug companies are
gouging America's seniors only to increase their own profits.
No senior should ever have to choose between buying needed
prescription drugs and putting food on the table, or heating their
homes, or having a decent retirement.
But with what drug companies are charging these days, those are the
choices many seniors face without prescription drug coverage.
Prescription drugs prolong the lives of thousands of women and men
each year. Enough is enough. Congress needs to produce a prescription
drug plan that actually help seniors. America's seniors deserve better
than this.
Mr. DIXON. Mr. Speaker, today I had hoped to have the opportunity to
vote to create an affordable, workable prescription drug benefit for
Medicare beneficiaries. Unfortunately, I was not given that opportunity
by the House leadership. The only bill before us--the Medicare Rx 2000
Act, H.R. 4680--will not offer seniors the kind of protection against
rising drug costs that they deserve.
While both Republicans and Democrats may agree on the need for a
Medicare drug benefit, we disagree about important details such as
affordability and reliability. I am disappointed that the Republican
leadership has chosen to prevent the Democrats from offering our
prescription drug plan as an alternative to their own during today's
debate. An issue as serious as the availability of prescription drugs
for seniors requires an open debate that explores all competing
proposals.
I support the Democratic plan, H.R. 4770, which would create a
voluntary, affordable prescription drug benefit in Medicare. The plan
features inexpensive premiums and catastrophic coverage for drug costs
over $4,000 annually. This is the type of plan my constituents have
been asking for.
The Republican plan, in contrast, invites private insurance companies
to offer drug-only plans to Medicare beneficiaries. There is no
guarantee that private insurers would even want to offer these types of
plans or that they would be affordable. In fact, the Health Insurance
Association of America has said that drug-only plans are unworkable.
Under the Republican plan, premiums will vary and catastrophic coverage
would not begin until an enrollee reached $6,000 in yearly costs.
I will vote against H.R. 4680 because it does not provide the
guaranteed, affordable Medicare drug benefit that my constituents need.
I urge my colleagues to vote against this ill-advised bill so we can
work together to craft a bipartisan prescription drug proposal that
truly works for America's seniors.
Mr. BUYER. Mr. Speaker, I rise in support of the measure to provide
prescription drug coverage to our seniors and disabled with Medicare
coverage.
When Republicans took control of Congress in 1995, Medicare was going
broke. Because

[[Page H5379]]

of the bipartisan actions taken in 1997, the Medicare program was
preserved. Now, we are in a financial position to enhance Medicare, by
adding a prescription drug benefit.
Mr. Speaker, seniors should not have to choose between buying food
and buying prescription medicines. This bill, H.R. 4680, will give
Medicare beneficiaries access to prescription drug insurance plans that
negotiate lower prices and comprehensive coverage, something many
seniors now lack.
Fortunately, near two-thirds of seniors have access to prescription
drug coverage, most of which is provided as a retiree benefit from a
lifetime of working. Seniors who prefer the coverage they have now
should not be forced into a government run plan. But this is exactly
what the President and the Democrat plan would do. If the President's
plan were enacted, between 50 percent to 75 percent of employers would
drop their coverage . . . coverage that many seniors like.
This plan, H.R. 4680, guarantees seniors choice on the type of
prescription drug coverage that best suits their needs. All seniors
will have at least 2 plans to choose from. The measure provides
incentives for plans to be offered in rural areas and requires access
to a ``bricks and mortar'' pharmacy. As a member who represents a rural
constituency, I am pleased that this bill takes special care to see to
the needs of seniors in rural America.
It is the senior who will decide what elements in a plan make sense
for their situation. The President gives seniors one option, one
benefit . . . take it or leave it.
H.R. 4680 provides subsidies for low-income seniors, just like the
President's plan, and its also provides assurance that no senior would
have to go bankrupt in order to pay high drug costs, unlike the
President's original proposal. It guarantees that above $6,000, no
senior would pay a penny more out-of-pocket. This catastrophic drug
coverage is an extremely important provision.
The Republican plan also begins structural reforms in Medicare. It
creates an ombudsman to advocate on behalf of the beneficiary, and not
the bureaucracy. The ombudsman would help beneficiaries navigate
Medicare's requirements. It reforms Medicare rules regarding appeals to
eliminate the endless waits for decisions.
Under the President's plan, the government would become the largest
HMO . . . deciding what drugs you can receive, and when you can get it.
Like Canada, the President's plan would result in rationing of drug
treatments, more hospital stays, and a lower standard of health care of
our seniors.
This is a bill that provides access to affordable prescription drugs
with a choice of affordable plans to meet the beneficiary's needs. This
coverage is delivered in a way to protect the doctor-patient
relationship. It does not compromise seniors' access to modern miracle
medicines and ensures that research and development into new and
improved drugs can continue.
I urge all Members to support this much needed bill.
Mr. BLUMENAUER. Mr. Speaker, I am encouraged that Congress is finally
working to provide relief to our nation's seniors; however, the bill
under consideration today does not do enough to help them. The only
bill the Republicans offer, H.R. 4680, relies too much on private
insurers who have already expressed opposition to providing drug
coverage and who have already failed to provide adequate health
insurance for many areas of the country, particularly rural areas.
Prescription drugs are an increasingly vital part of health care and
are the fastest growing component of health care expenditures. Spending
on prescription drugs is expected to reach $112 billion this year
alone. Seniors, only 13 percent of the total population, account for
more than a third of the annual expenditure. The average senior uses 18
prescriptions a year, prescriptions essential to their quality of life.
The rising costs of pharmaceuticals combined with the increasing
reliance on drugs for medical treatments have created a serious threat
to the financial security of a vulnerable population, seniors on fixed
incomes.
The alternative legislation supported by the Administration and
Congressional Democrats would do more to alleviate some of the
financial burden imposed by prescription medications. The substitute
bill, which was, unfortunately, prohibited from consideration today,
offers coverage through the Medicare program that uses the purchasing
power of the federal government to guarantee affordable prescription
drug prices. Our seniors are paying the highest prescription drug
prices in the world, not just in comparison with Canada, Mexico and
other countries, but also with comparable medications offered to
animals in veterinary clinics. The Republican proposal offers no
guarantees that seniors who are purchasing drug coverage are being
offered the best possible price for their pharmaceuticals.
The debate today on perhaps the most important domestic issue of this
Congress has been haphazard and rushed. Consequently, it is likely that
even if passed, the Administration will veto H.R. 4680. However, I hope
the debate today is the beginning of a truly bi-partisan conversation
about how we can focus our efforts beyond election year politics to a
proposal that makes a real difference for those who depend on
prescription drugs for their quality of life.
Mr. ETHERIDGE. Mr. Speaker, I rise today to announce my opposition to
H.R. 4680, the Medicare Rx 2000 Act. This plan will not guarantee
affordable prescription medicine coverage for all seniors and it takes
the first step towards privatizing Medicare, forcing seniors to deal
with private insurance companies instead of having the choice of
getting their prescriptions through Medicare. The Republican plan
provides huge subsidies to insurance companies and does not provide any
direct assistance to our nation's seniors. Even after large subsidies,
there is no guarantee that affordable prescription medicine coverage
will be offered in every region of the country. In fact, we have heard
from several insurance companies that ``the concept of `dug-only'
private insurance simply would not work in practice.''
I strongly support providing our nation's seniors with a real
prescription medicine benefit. However, any such plan must be a defined
benefit that is administered under Medicare. It must be voluntary,
affordable, and available to all seniors regardless of their income
level. The benefit must ensure that copayments and premiums are uniform
for all seniors in all areas of the country. Finally, any plan enacted
by this Congress must include a cap on the cost to seniors in order to
protect them from any unexpected catastrophic events.
Mr. Speaker, for too long our nation's seniors have been forced to
choose between purchasing prescription medicines and putting food on
their tables. Because of this, I rise in support of the Democratic
substitute. This plan will provide seniors with a meaningful,
affordable, and universal medicine benefit. Under this plan, there is
no deductible, there is a low, affordable monthly premium of $25 for
all seniors and half of seniors' costs will be covered by Medicare up
to $2000. In addition, this legislation includes a catastrophic benefit
that will cap seniors' costs at a maximum of $4000. Finally, Mr.
Speaker, I rise in support of the Democratic substitute because it will
provide much needed relief to rural and urban Medicare hospitals,
nursing homes, home health agencies, rural HMOs, and others providers.
Our North Carolina values call on us to provide health care security
and retirement security for our senior citizens. The Republican bill
utterly fails to meet that test.
Mrs. MEEK of Florida. Mr. Speaker, the American people want and need
affordable, voluntary and reliable Medicare prescription drug coverage
for all seniors, not this poll-driven attempt to con them. I rise in
strong opposition to both the Republican Leadership's bill and to the
disgraceful Rule adopted for this bill, a Rule that deprives the
Democrats of an opportunity to present their substitute, a substitute
that would give America's seniors the option to obtain affordable,
reliable prescription drug coverage through Medicare. The procedures
adopted by the Republican leadership for consideration of this bill are
a travesty. The American people deserve better.
H.R. 4680, the Medicare 2000 Rx Prescription Act, is a prescription
for disaster. This bill won't work. It seeks to provide prescription
drug coverage to Medicare beneficiaries, not through Medicare, but by
creating ``drugs only'' insurance policies through private insurers. It
does so even in the face of the continuing massive withdrawals from
Medicare by the health insurance industry. If you live on more than
$12,525 a year, the Republican plan would not pay one dime toward your
premium, while the Democratic plan would provide a 50 percent subsidy
for monthly premiums for all seniors.
The bill would pour money into the pocket of wealthy insurance
companies even though the insurance companies themselves have called
this ``private insurer'' approach unworkable. There is no reason to
believe that any legitimate private insurers will step forward and
offer this coverage to seniors. A prescription drug benefit surely can
and should be offered through the existing regulatory structure, but
the Republican leadership simply cannot overcome their longstanding
history of hostility to Medicare.
Instead of creating a defined benefit plan that would cover all with
the same comprehensive benefits, the Republican bill would create a
multi-tiered system of coverage that would relegate low-income
beneficiaries to bargain basement plans. Private insurers would be free
to define different deductibles, co-payments and benefit limits in
different parts of the country.
The Republican plan would provide whatever subsidy might be required
to persuade two insurers to offer a prescription drug benefit, but
provide no assurance whatsoever that the benefits offered would be
comprehensive and affordable. Plans would come in and out

[[Page H5380]]

of communities frequently, perhaps even on a yearly basis, and seniors
would be left to fend with the fear, confusion, and uncertainty that
all too many of them already have experienced when their insurers
carrier abandons coverage in their market.
To induce insurance companies to offer this coverage, participating
companies would receive a 35 percent subsidy for their operating costs
with no requirement that such payments be passed on to the
beneficiaries. Reflecting their never-ending devotion to ``trickle-
down'' economics, the Republican bill would end up subsidizing
insurers, not seniors. Plans also would be able to create restrictive
formularies that would maximize the insurer's profits at the expense of
seniors by refusing payment for many drugs, even though a beneficiary's
doctor had determined that a particular drug is medically necessary.
This is not the approach that we need. What seniors want and deserve
is a simple, reliable, affordable prescription drug plan financed
through Medicare with no deductibles, universal benefits, guaranteed
access to needed drugs and local pharmacies, and guaranteed access to
negotiated discounts in drug prices using the purchasing power of the
Federal government. Under the Democratic plan, all drug costs would be
covered once a senior incurred $4,000 in out-of-pocket drug costs.
Simply put, the Democratic plan offers far better coverage than the
Republican plan and at a lower cost.
Mr. Speaker, it's no coincidence that the Republican leadership bill
came to the Ways and Means Committee for a markup within days of being
introduced and that seniors, the disabled, low income and minority
populations, most members of the Congress and other citizens did not
receive a chance to testify on H.R. 4680 before that markup. Nor is it
an accident that this bill is now being rushed to the floor for a vote.
There's a simple explanation.

After years of resisting Democratic proposals for a prescription drug
benefit, the Leadership's pollsters told them that they could not
ignore the issue any longer. They would pay too heavy a price
politically. So the challenge then became one of figuring out how to
appear to be addressing the issue without involving Medicare; to
portray concern for the desperate needs of seniors for prescription
drug coverage.
H.R. 4680 is the product of that exercise. 148 pages intended to
suggest concern, but fundamentally inadequate to create affordable and
reliable voluntary prescription drug coverage. Mr. Speaker, the
leadership may have labored mightily to produce this bill, but they
brought forth a mouse! As Families USE put it: ``This plan relies on
the insurance industry to provide policies they don't want to sell and
consumers can't afford to buy. It's impossible to tell what consumers
will get or whether it will even be available. This is a false promise
to Medicare beneficiaries.''
Mr. Speaker, the nature and extent of a senior's prescription drug
benefit should not depend upon the accident of where that senior is
located. Beneficiaries should pay the same premium and get the same
benefits no matter where they live, just like they do for other
Medicare services like doctors' visits and surgery. Seniors should be
covered for all drugs that their doctors say are medically necessary.
They should not be at the mercy of the insurance company's drug
formulary.
Our constituents deserve a benefit that they can count on and
understand, a guaranteed and affordable benefit--not the confusion and
uncertainty that the Republican leadership's plan will promote.
Medicare has been the cornerstone of health security for the elderly
and the disabled for over 30 years. We should build on the existing
Medicare program to create a reliable and affordable prescription drug
benefit for all beneficiaries who wish to participate. Our constituents
need real affordable, reliable voluntary prescription drug coverage,
not just election year rhetoric. Reject this sham proposal, adopt a
fair process for considering the prescription drug issue, and let's
work to adopt the Democratic substitute.
Mr. COSTELLO. Mr. Speaker, I rise today in strong opposition to H.R.
4680. It is outrageous that the Republican leadership blocked all
attempts for free and open debate. A vote on the Democratic substitute
was ruled out of order. The leadership has stifled consideration of any
plan other than their own. It is obvious they are catering to the
insurance companies. The ones who stand to gain the most from this
legislation are not the seniors that the Republicans would lead you to
believe but the multi-million dollar drug companies that only stand to
get wealthier as a result of this legislation.
The Republican leadership's prescription drug plan fails miserably to
help our nation's seniors. The leadership should be ashamed to submit a
plan that forces seniors to shop around for benefits when there is no
guarantee that the insurance companies will continue to provide the
benefit a year or two down the road, especially when the fees for such
a plan can be raised to exorbitant rates.
A better solution is President Clinton's plan which provides
guaranteed benefits through Medicare, allows seniors to keep their
current prescription drug plan if they choose and provides 100 percent
of prescription expenses for low-income seniors. I support the
President's plan because the plan provides affordable, voluntary and
reliable prescription coverage for all seniors.
Give our nation's seniors what they deserve, prescription drug
coverage without all the strings. I urge my colleagues to oppose the
Republican prescription drug plan.
Mr. BALLENGER. Mr. Speaker, I rise today in support of H.R. 4680, the
Medicare Prescription Drug and Modernization Act, as introduced by
Subcommittee Chairman Bill Thomas and my good friend and colleague from
North Carolina Representative Richard Burr. I encourage my colleagues
on both sides of the aisle to support this legislation which provides
senior citizens with a voluntary drug benefit, giving seniors the right
of choice.
Seniors comprise 12 percent of the population in the U.S., but
consume more than one-third of all prescription drugs. Leaving seniors
without a drug benefit is not an option. The time has come to correct
this shortfall in Medicare and implement a program that provides a
Medicare drug benefit for seniors. H.R. 4680 is a cost effective way to
provide this benefit through the efficiency of the private sector.
I believe H.R. 4680 provides the best approach by giving seniors the
flexibility of choice. Unlike the Democrats proposed bill, H.R. 4680
greatly diminishes the power of the Health Care Financing
Administration (HCFA). Our bill creates a new agency to oversee the
prescription drug and Medicare+Choice programs. This is a huge
improvement, as the new agency's mission would be to foster innovation
and competition in Medicare and ensure coverage in rural areas.
Our new drug benefit would reduce prescription drug costs to seniors
by giving them market-based bargaining power. A recent study by the
Lewin group found that individuals enrolled in private insurance plans
are getting 30 percent to 39 percent discounts on their prescription
drugs through their plans' negotiations with pharmaceutical
manufacturers. Yet today more than \1/3\ of seniors have no
prescription coverage and pay the highest price for their medication.
H.R. 4680 enables seniors to enroll in prescription drug plans (or
Medicare+Choice plans) that will negotiate lower prescription drug
prices on their behalf.
And, last by certainly not least, the funding for this bill comes
entirely from greater than anticipated savings from the 1997 Balanced
Budget Act. Congressional Republicans have committed $40 billion (or
about \1/3\ of those unanticipated savings) to fund a better and
stronger Medicare system. This is an investment which will pay large
dividends in the immediate future.
Mr. Speaker, I urge my colleagues to support this common sense
legislation that provides maximum coverage and optimum choice for
seniors. Simply put, H.R. 4680 is affordable, available, and voluntary
for all.
Mr. HOLT. Mr. Speaker, I rise in opposition to the weak and untested
legislation we are considering and in support of real voluntary,
reliable, affordable, Medicare prescription drug coverage for our
seniors.
I strongly support the inclusion of prescription drug coverage under
the Medicare plan. Unfortunately, the only bill being considered on the
floor of Congress today is not a Medicare prescription drug plan--it's
an untested, unreliable, proposal that gives money to private insurance
companies instead of seniors. What's worse, it offers no real relief to
those in central New Jersey who need it.
Today, more than at any time in our nation's history, prescription
medications are helping Americans live longer, healthier lives. It is
difficult, however, for many that lack good health care coverage to
afford these products. Older Americans--the men and women that won
World War II, built our nation, and raised our families--shouldn't be
forced to choose between medicine and food. They shouldn't have to
worry that an insurance company clerk is going to deny them lifesaving
medicine to save a buck.
It is only common sense that Medicare include drugs as an integral
part of health care in its benefits package. Medicare is a program that
works. Seniors rely on it. All of us should be able to agree on that.
We must work together in a bipartisan fashion to include drug coverage
under Medicare.
There are too many questions about this hastily-written plan we are
voting on today. Insurance companies say they have no interest in
writing the prescription drug coverage policies that the bill calls
for. In central New Jersey, just a handful of insurance companies
dominate the market. In addition, seniors' experience with HMO
insurance plans is not good. Service is often unreliable. Premiums have
risen by more than 100 percent in some instances. Well . . . health
care that you can't

[[Page H5381]]

count on is no health care at all. We need to do better than that.
There are several proposals being considered in Congress which are
intended to help seniors pay for prescription drugs. While I have
opposed policies that put government price controls on medicines, some
of the other proposals being discussed are promising. We need to put
the politics aside and have a serious discussion about how to help
seniors. They deserve it. We must help seniors by passing a voluntary,
affordable, reliable Medicare prescription drug benefit that helps
seniors and allows us to continue to develop these lifesaving drugs.
The choice we are faced with today is an easy one. We can vote with
insurance companies or with senior citizens. Mr. Speaker, I choose to
side with the seniors.
Mr. HOBSON. Mr. Speaker: I rise in support, of the important
legislation before us today that will help seniors in Ohio's 7th
Congressional District with the high cost of prescription drugs.
I first want to acknowledge the efforts of Chairman Bliley and
Chairman Thomas, as well as the efforts of Representative Burr,
Representative Greenwood, and Representative McCrery. They've worked
long hours, and they have written a very good bill that adds a
sustainable, fair, and compassionate drug benefit that modernizes the
Medicare program so seniors can afford the drugs they depend on to stay
healthy.
Our bill puts in place a new benefit in Medicare that allows seniors
to receive their prescription drugs through at least two choices--as
opposed to the one-size-fits-some approach advocated by the President.
It does so in a fair way that lets seniors in my district keep their
existing coverage, and in a way that provides assistance to every
senior in financial distress or with unusually high drug costs. And
every senior will benefit from the power of group discounts that will
reduce the out-of-pocket cost of prescription drugs.
One of the truly innovative things this bill does, and which is long
overdue in the Medicare program, is to create a new Medicare Benefits
Administration outside of the current bureaucracy that will be focused
on seniors and their benefits first and foremost.
Let's compare that to the existing agency that runs Medicare and that
would run the program proposed by the President.
Seniors and health care providers in my district are very familiar
with HCFA, the Health Care Financing Administration which runs
Medicare. They also--unfortunately--also are very familiar with the
technical answers they can't understand, busy phone lines, a general
level of unresponsiveness, and the endless delays at that agency.
You might think that Congress would have a little better luck. Sadly,
that is not the case. I want to tell my colleagues today about a letter
I sent this week to HCFA that demonstrates the importance of our plan
entrusting the administration of a new prescription drug benefit to a
new senior-focused agency rather than HCFA.
For example, in 1997, Congress included a simple and straight-forward
provision in the Balanced Budget Act of 1997 that would allow seniors
that depend on a wheelchair or a similar piece of medical equipment
some flexibility in ``upgrading'' an old or deteriorating piece of
equipment.
Today, three years after Congress enacted this improvement for
seniors, seniors are still waiting for the current bureaucracy to act.
The point is, three, four or five years is too long to make seniors
wait. And the President's new claim that HCFA could implement a new
prescription drug benefit in a year and a half flies in the face of
their actual track record.
My colleagues can point to scores of missed deadlines on similar
changes approved by Congress. We can't afford to take the same road
with a prescription drug plan, and I believe our creation of a new
Medicare Benefits Administration is a key improvement over the
President's plan.
I also want to address the idea that a prescription drug benefit
should follow the Canadian model. Some have advocated the solution is
simple--seniors just need to import the drugs from Canada.
However, for those who support importing the Canadian system, let's
take a look at prescription drugs in Canada. Since we last had this
debate in 1994, Americans have not forgotten that the way Canada keeps
costs down is simple--they don't provide the type of quality care we do
in the United States, they allow the government instead of doctors make
medical decisions, and health care is rationed--and the result is long
waiting periods, where months or even years, for medical treatments are
the norm.
With respect to drugs, in Canada, it takes an average of one and a
half times as long as in the U.S. to approve a new drug. Since
Canadians then can only take the drugs their government has approved
payment for, they then have to wait even longer to learn if the
government will allow that drug in their medicine cabinet.
In comparison, our bill provides the same type of discounts available
under the socialist, state-run Canadian health care monopoly but
instead relies on the power of the marketplace, group discounts, and
competitive pricing to achieve these price reductions for seniors.
Let's duplicate the cost savings, but let's not think again about
importing a failed Canadian health care plan--which Americans
overwhelmingly rejected the last time it was proposed.
Let me conclude by saying that it is time for Congress to act. I am
deeply disappointed by reports in the media that opponents of our
legislation don't want to support this bill so they can point their
fingers and say that this is a ``do-nothing Congress.'' Enough already.
It's time to stop playing politics with this issue and pass this
legislation to help the seniors in my Ohio district afford prescription
drugs. I urge my colleagues to support the bill.
Mr. McGOVERN. Mr. Speaker, I rise today in strong opposition to the
sham of a prescription drug plan the Republican Majority has forced
upon this Chamber. For the past few years, I have joined many members
in attempting to create a guaranteed Medicare Prescription Drug
Benefit. Today, we are voting on a poll-driven handout to the insurance
companies, and not a defined benefit available to all seniors that want
such a plan.
Mr. Speaker, the Democratic prescription drug plan, which the
Majority is refusing to let us offer today, is a true Medicare benefit.
Our plan is simple, common sense. We use the existing and successful
Medicare program to administer a guaranteed benefit for every Medicare
patient that wants to take part. Our plan has deductible, very low
monthly premiums and a catastrophic benefit. The catastrophic benefit
is the key part of our plan because thousands of seniors across this
country are facing extremely high prescription drug bills that they
have trouble paying. There is no reason that in this time of economic
prosperity that America's seniors should have to choose between food
and medicine. The Democratic bill will provide real relief for seniors
so they do not have to make these life-threatening decisions.
The Republican plan is nothing more than a handout to the insurance
companies. Their plan is a means-tested, private plan that would
provide modest incentives for insurance companies to provide a
deficient benefit to a limited number of seniors. But the irony is that
the insurance companies have already rejected this handout. Insurance
companies are in the business of making profits, and they are not going
to enter a market where they cannot make a profit.
Instead of working to provide a comprehensive prescription benefit
that every senior can have the option of joining, the Majority devised
a poll-driven plant hat furthers their political goal of privatizing
Medicare. They have never supported Medicare and have been waiting
anxiously for, as former Speaker Gingrich said, Medicare to ``wither on
the vine.''
Across my district, seniors consistently approach me, clutching their
drug bills, and ask me how they can pay for their expensive bills on
their fixed incomes. Unfortunately, there's no help for the seniors
across America unless they have access to a Medicare HMO (which
thousands of rural patients do not), have a private health insurance
plan, or have a costly Medigap plan. The reality is that if Medicare
were developed from scratch today, a prescription drug benefit would be
one of the first provisions added to the program. We have a
responsibility to provide seniors with a guaranteed prescription drug
benefit.
Mr. Speaker, this debate today is an exercise in futility. The
Majority is attempting to insulate itself from public opinion with a
prescription drug plan that is hollow and provides no real relief for
America's seniors. They are trying to pull a fast one on the American
public. I urge my colleagues to reject this political grandstanding and
to work for a real, guaranteed Medicare prescription drug benefit.
Mr. FRELINGHUYSEN. Mr. Speaker, I spent the last two Saturdays in the
11th Congressional District of New Jersey meeting with my constituents
in town meetings as I have done on so many other weekends in the past.
Through winter, spring and now summer, one of the issues I get asked
about is: when will Congress provide a prescription drug benefit for
our older Americans?
Our constituents should not have to choose between putting food on
the table or paying for their next month's supply of medicine. Our
older men and women want, and deserve, the peace of mind that comes
with knowing they are covered by a safe, affordable, and easily
accessible prescription drug benefit.
The tremendous advances in medical science have produced amazing
medical breakthroughs that help older Americans live longer, healthier,
more active and independent lives. And so much of this is due to the
continued development of new and better medicines that keep people
healthy and out of hospitals.
And while 65 percent of older men and women in America already have
some form of

[[Page H5382]]

prescription medication coverage, there are still too many who do not.
Congress, and the President, need to provide a prescription benefit
that allows choice, is affordable, available to all, and one that our
older Americans can depend on to provide safe, effective therapies now
and for the future.
Today's action in the House is a good first step--and it's not the
last step, either. But as we take this first step, and each one that
will follow, we need to work together, Democrats and Republicans alike.
Prescription medication coverage isn't a political issue; it's a health
issue. Older Americans need us to work together to keep the Medicare
program strong and solvent and to modernize the Medicare program to
reflect today's health care needs. Unlike 30 years ago when Medicare
was first designed, today medicines are an integral, important part of
health care, and without such prescription drug coverage, medical
coverage for our seniors is incomplete. So, let's work together and
help give our older Americans the health care coverage they need and
deserve.
Mr. PORTMAN. Mr. Speaker, when Medicare was created in 1965,
prescription drugs were not used as they are today to treat health
problems. That's all changed. Advances in pharmaceutical research and
development have made it possible to address many complex health
problems with a simple trip to the pharmacist.
Unfortunately, as more and more Americans have come to rely on
prescription drugs, their costs have escalated, making it difficult for
many seniors to make ends meet. Clearly, it is time to offer a
prescription drug benefit to all seniors.
Today, about two-thirds of seniors have some kind of prescription
drug coverage--either through a private plan they purchased or through
a company retirement plan--that helps them to offset the cost of
prescription drugs. But the remaining one-third of seniors have no
coverage, and everyone feels the pinch of rising drug costs.
Under the plan before us today, Medicare would offer a voluntary
prescription drug benefit that would be similar to private drug
insurance that many seniors carry today. If you're eligible for
Medicare, you'd be given a choice between at least two plans that offer
prescription drug coverage. All you would have to do is to go to a
local pharmacy to get your prescription filled, show them your Medicare
prescription drug card, and pay a pre-determined co-payment. There
would be no claims to file or forms to fill out.
To ensure that prescription drugs remain affordable, seniors who
choose to enroll in such a Medicare prescription drug program would
also be covered for so-called ``catastrophic'' prescription drug
expenses. In other words, seniors would have the peace-of-mind to know
that they will not be responsible for paying additional costs that
might accrue if drug prices rise unexpectedly.
Because of the unprecedented purchasing power that a Medicare-wide
prescription drug program will have, it will also help to lower drug
prices for all Americans. A recent study concluded that, on average,
there would be a 25% discount on the prescription drugs people need so
badly. This will really help protect seniors from higher drug prices
and rising out-of-pocket expenses. And, because this will be a
voluntary program, it will help seniors who need it most while allowing
seniors who currently have prescription drug coverage they like to
continue to enjoy their existing plan.
Mr. Speaker, despite the heated rhetoric we're hearing on the floor
today, Members on both sides of the aisle are very interested in adding
a prescription drug benefit to Medicare. Yes, there are legitimate
differences of opinion and approach. But we have a real opportunity to
pass this bipartisan bill today--and to enact a Medicare prescription
drug benefit this year.
I urge my colleagues on both sides of the aisle--let's do the right
thing for America's seniors. Let's set aside the attack ads and the
``MediScare'' tactics--and provide Medicare prescription drug coverage
for our constituents.
Mr. PASTOR. Mr. Speaker, with prescription drug expenses climbing
ever higher, 75% of Medicare beneficiaries do not have dependable,
comprehensive prescription drug coverage, and many American seniors are
forced to decide between the purchase of medication and other
necessities such as food or electricity. This situation is simply not
acceptable in a nation as prosperous as ours.
Congress must take action to restore the dignity of American seniors
and ease the growing burden on American families. The time has come for
an affordable, voluntary, and reliable Medicare prescription coverage
plan. The need has never been greater and public support has never been
stronger.
I am deeply disappointed that the Republican leadership in Congress
seems intent on squandering this opportunity for meaningful action by
limiting floor consideration to a single Republican proposal which
would do little to provide affordable drug coverage to seniors.
While American seniors need the opportunity to purchase affordable
drug coverage no matter where they live, the Republican proposal
guarantees opportunities only to the insurance and drug industries it
would subsidize, with no guarantee of affordable plans for all seniors.
While American families want the peace of mind that comes from
defined and dependable coverage, the Republicans have introduced a sham
proposal that even the insurance companies it would rely on say will
simply not work.
While Americans seek universal relief from bearing the full burden of
devastating prescription drug expenses, regardless of their health or
income, the Republicans offer only a divisive political ploy.
There is an alternative. The Democrats today have introduced a plan
that offers the security, equity and universality of coverage that our
seniors deserve. Rather than private, stand-alone drug coverage that is
neither affordable or workable, the Democratic plan builds upon the
strengths of the Medicare program, providing voluntary access to basic
drug benefits to all Medicare beneficiaries, regardless of their
income, health status, or where they live. It is a plan that will truly
help the Arizonans I represent, and a plan that I am proud to co-
sponsor.
I call on the Republican leadership to move beyond political
maneuvering and allow for meaningful and comprehensive debate on this
issue which affects all of our constituents. Seniors in my district,
and across America, deserve the security of an affordable and defined
Medicare drug benefit. It is time that Congress rise to the occasion,
listen to what the American people are so clearly calling for, and make
it happen.
Mr. CALVERT. Mr. Speaker, I rise in support of H.R. 4680, the
Medicare Prescription 2000 Act. The bill is a fiscally sound way to
help our seniors with a vital need. As co-chair of the bi-partisan
Generic Drug Equity Caucus, I am encouraged by the bill's support for
generic drug use.
Currently, generics fill over 40 percent of all prescriptions in the
United States, and are extremely affordable at only 10 to 15 cents for
every dollar spent on brand name drugs. The Congressional Budget Office
reported in 1994 that generic drug competition results in a cost
savings to consumers of 8 to 10 billion dollars annually.
Mr. Speaker, I urge my colleagues to vote for this sensible bill. I
hope that we can include an even more explicit preference for the use
of generic drugs when the bill is conferenced with the Senate. This is
a good bill, it's right solution at a critical time. We all should vote
aye.
Mr. DAVIS of Virginia. Mr. Speaker, I rise today in support of H.R.
4680, the Medicare Rx 2000 Act. I believe that this important piece of
legislation is the best way to address the dire impact the run-away
costs of prescription drugs are having on our nation's senior citizens
and disabled Americans.
The Medicare program provides significant health insurance coverage
for its 39 million aged and disabled beneficiaries. However, the
program fails to offer protection against the costs of most outpatient
prescription drugs. Even though 65% of beneficiaries have some private
or public coverage for these costs, many do not have adequate
supplemental coverage for their drug costs.
The absence of a significant drug benefit has concerned me and many
of my colleagues for quite a long time. However, the potential cost of
adding prescription drug coverage has been the primary impediment to
its implementation. This year, Congress has made a serious commitment
to providing prescription drugs for seniors by specifically setting
aside $40 billion dollars of the budget surplus to create a
prescription drug plan and to strengthen the Medicare program.
I commend the Speaker's Task Force on Prescription Drugs, which has
worked diligently to create a voluntary prescription drug plan that is
accessible, affordable, and will not encroach on seniors who are
currently satisfied by their supplemental plan. This private-public
sector approach to providing prescription drugs to every interested
senior is modeled after the Federal Employees Health Benefit Program
(FEHBP), which combines the advantages of a ``defined benefits'' plan
and a ``defined contribution'' plan. To those who choose to participate
in this plan, the premiums are affordable, averaging just $37 a month.
And by allowing seniors to participate in an insurance-based plan at a
reduced cost, it will give seniors the benefit of group bargaining
power, which will reduce the price tag for prescription drugs. Studies
show that Americans with insurance coverage pay 15 to 39 percent less
for prescription drugs than those without insurance.

Most importantly, the Medicare Rx plan creates choices for seniors.
H.R. 4680 will mandate that at least two prescription drug plans will
be available in every area of the United States. A choice of plans will
give Medicare beneficiaries the power to determine which high-quality
private insurance plan would best

[[Page H5383]]

serve their individual healthcare needs. Having more than one plan in
every district also spurs competition between plans, creating
incentives for plans to create better products.
H.R. 4680 also reaches out to those individuals who are not
financially able to afford their prescription medicine needs due to
their income level or their escalating drug needs. This bill provides a
full subsidy to low-income beneficiaries up to 135% of the poverty
level and phases out that subsidy on a sliding scale to 150% of the
poverty level. Furthermore, H.R. 4680 caps exorbitant drug costs with
catastrophic drug coverage, meaning that Medicare will pay 100% of
every seniors' drug costs beyond a certain level.
Mr. Speaker, seniors deserve access to the best medicines available
to lead healthy and independent lives and, in many cases, to avoid more
expensive treatments such as surgery or hospitalization. We need to
expand seniors' access to the same kind of private-sector plans that
millions of working Americans benefit from. I urge all my colleagues to
vote in support of the Medicare Rx Act of 2000, a fair and responsible
prescription drug plan for all of America's seniors.
The SPEAKER pro tempore (Mr. LaHood). All time for debate has
expired.
Pursuant to House Resolution 539, the previous question is ordered on
the bill, as amended.
The question is on the engrossment and third reading of the bill.
The bill was ordered to be engrossed and read a third time, and was
read the third time.

Motion to Recommit Offered by Mr. Stark

Mr. STARK. Mr. Speaker, I offer a motion to recommit.
The SPEAKER pro tempore. Is the gentleman opposed to the bill?
Mr. STARK. I am, Mr. Speaker.
Mr. THOMAS. Mr. Speaker, I reserve all points of order against the
motion.
The SPEAKER pro tempore. The Clerk will report the motion to
recommit.
The Clerk read as follows:

Mr. Stark moves to recommit the bill H.R. 4680 to the Committee on
Ways and Means with instructions to report the same back to the House
forthwith with the following amendment:

Strike all after the enacting clause and insert the
following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

(a) Short Title.--This Act may be cited as the ``Medicare
Guaranteed and Defined Rx Benefit and Health Provider Relief
Act of 2000''.
(b) Table of Contents.--The table of contents for this Act
is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.

TITLE I--MEDICARE PRESCRIPTION MEDICINE BENEFIT PROGRAM

Sec. 101. Prescription medicine benefit program.

``Part D--Prescription Medicine Benefit for the Aged and Disabled

``Sec. 1860. Establishment of defined prescription medicine benefit
program for the aged and disabled under the medicare
program.
``Sec. 1860A. Scope of defined benefits; coverage of all medically
necessary prescription medicines.
``Sec. 1860B. Payment of defined basic and catastrophic benefits.
``Sec. 1860C. Eligibility and enrollment.
``Sec. 1860D. Monthly premium; initial $25 premium.
``Sec. 1860F. Prescription medicine insurance account.
``Sec. 1860G. Administration of benefits .
``Sec. 1860H. Incentive program to encourage employers to continue
coverage .
``Sec. 1860I. Appropriations to cover government contributions.
``Sec. 1860J. Definitions.''.
Sec. 102. Medicaid buy-in of medicare prescription drug coverage for
certain low-income individuals.
``Sec. 1860E. Special eligibility, enrollment, and copayment rules for
low-income individuals.''.
Sec. 103. Offset for catastrophic prescription medicine benefit.
Sec. 104. GAO ongoing studies and reports on program; miscellaneous
studies and reports.

TITLE II--IMPROVEMENT IN BENEFICIARY SERVICES

Subtitle A--Improvement of Medicare Coverage and Appeals Process

Sec. 201. Revisions to medicare appeals process.
Sec. 202. Provisions with respect to limitations on liability of
beneficiaries.
Sec. 203. Waivers of liability for cost sharing amounts.

Subtitle B--Establishment of Medicare Ombudsman

Sec. 211. Establishment of Medicare Ombudsman for Beneficiary
Assistance and Advocacy.

TITLE III--MEDICARE+CHOICE REFORMS; PRESERVATION OF MEDICARE PART B
DRUG BENEFIT

Subtitle A--Medicare+Choice Reforms

Subtitle B--Preservation of Medicare Coverage of Drugs and Biologicals

Sec. 311. Preservation of coverage of drugs and biologicals under part
B of the medicare program.
Sec. 312. Comprehensive immunosuppressive medicine coverage for
transplant patients.

Subtitle C--Improvement of Certain Preventive Benefits

Sec. 321. Coverage of annual screening pap smear and pelvic exams.

TITLE IV--ADJUSTMENTS TO PAYMENT PROVISIONS OF THE BALANCED BUDGET ACT

Subtitle A--Payments for Inpatient Hospital Services

Sec. 401. Eliminating reduction in hospital market basket update for
fiscal year 2001.
Sec. 402. Eliminating further reductions in indirect medical education
(IME) for fiscal year 2001.
Sec. 403. Eliminating further reductions in disproportionate share
hospital (DSH) payments.
Sec. 404. Increase base payment to Puerto Rico hospitals.

Subtitle B--Payments for Skilled Nursing Services

Sec. 411. Eliminating reduction in SNF market basket update for fiscal
year 2001.
Sec. 412. Extension of moratorium on therapy caps.

Subtitle C--Payments for Home Health Services

Sec. 421. 1-year additional delay in application of 15 percent
reduction on payment limits for home health services.
Sec. 422. Provision of full market basket update for home health
services for fiscal year 2001.

Subtitle D--Rural Provider Provisions

Sec. 431. Elimination of reduction in hospital outpatient market basket
increase.

Subtitle E--Other Providers

Sec. 441. Update in renal dialysis composite rate.

Subtitle F--Provision for Additional Adjustments

Sec. 451. Guarantee of additional adjustments to payments for providers
from budget surplus.

SEC. 2. FINDINGS.

Congress makes the following findings:
(1) Prescription medicine coverage was not a standard part
of health insurance when the medicare program under title
XVIII of the Social Security Act was enacted in 1965. Since
1965, however, medicine coverage has become a key component
of most private and public health insurance coverage, except
for the medicare program.
(2) At least \2/3\ of medicare beneficiaries have
unreliable, inadequate, or no medicine coverage at all.
(3) Seniors who do not have medicine coverage typically
pay, at a minimum, 15 percent more than people with coverage.
(4) Medicare beneficiaries at all income levels lack
prescription medicine coverage, with more than \1/2\ of such
beneficiaries having incomes greater than 150 percent of the
poverty line.
(5) The number of private firms offering retiree health
coverage is declining.
(6) Medigap premiums for medicines are too expensive for
most beneficiaries and are highest for older senior citizens,
who need prescription medicine coverage the most and
typically have the lowest incomes.
(7) While the management of a medicare prescription
medicine benefit program should mirror the practices employed
by benefit administrators in delivering prescription
medicines, the Secretary of Health and Human Services should
oversee that program to assure that a guaranteed and defined
prescription drug benefit is provided to all medicare
beneficiaries.
(8) All medicare beneficiaries should have access to a
voluntary, reliable, affordable, dependable, and defined
outpatient medicine benefit as part of the medicare program
that assists with the high cost of prescription medicines and
protects them against excessive out-of-pocket costs.

[[Page H5384]]

TITLE I--MEDICARE PRESCRIPTION MEDICINE BENEFIT PROGRAM

SEC. 101. ESTABLISHMENT OF THE MEDICARE PRESCRIPTION MEDICINE
BENEFIT PROGRAM.

(a) In General.--Title XVIII of the Social Security Act (42
U.S.C. 1395 et seq.) is amended--
(1) by redesignating part D as part E; and
(2) by inserting after part C the following new part:

``Part D--Prescription Medicine Benefit for the Aged and Disabled

``establishment of defined prescription medicine benefit program for
the aged and disabled under the medicare program

``Sec. 1860. (a) In General.--There is established as a
part of the medicare program under this title a voluntary
insurance program to provide defined prescription medicine
benefits, including pharmacy services, in accordance with the
provisions of this part for individuals who are aged or
disabled or have end-stage renal disease and who voluntarily
elect to enroll under such program, to be financed from
premium payments by enrollees together with contributions
from funds appropriated by the Federal Government.
``(b) Noninterference by the Secretary.--In administering
the prescription medicine benefit program established under
this part, the Secretary may not--
``(1) require a particular formulary, institute a price
structure for benefits, or in any way ration benefits;
``(2) interfere in any way with negotiations between
benefit administrators and medicine manufacturers, or
wholesalers; or
``(3) otherwise interfere with the competitive nature of
providing a prescription medicine benefit using private
benefit administrators, except as is required to guarantee
coverage of the defined benefit.

``scope of defined benefits; coverage of all medically necessary
prescription medicines

``Sec. 1860A. (a) In General.--The benefits provided to an
individual enrolled in the insurance program under this part
shall consist of--
``(1) payments made, in accordance with the provisions of
this part, for covered prescription medicines (as specified
in subsection (b)) dispensed by any pharmacy participating in
the program under this part (and, in circumstances designated
by the benefit administrator, by a nonparticipating
pharmacy), including any specifically named medicine
prescribed for the individual by a qualified health care
professional regardless of whether the medicine is included
in a formulary established by the benefit administrator if
such medicine is certified as medically necessary by such
health care professional (except that to the maximum extent
possible the substitution and use of lower-cost generics
shall be encouraged); and
``(2) charging by pharmacies of the negotiated discount
price--
``(A) for all covered prescription medicines, without
regard to such basic benefit limitation; and
``(B) established with respect to any drugs or classes of
drugs described in subparagraphs (A), (B), (D), (E), or (F)
of section 1927(d)(2) that are available to individuals
receiving benefits under this title.
``(b) Covered Prescription Medicines.--
``(1) In general.--Covered prescription medicines, for
purposes of this part, include all prescription medicines (as
defined in section 1860J(1)), including smoking cessation
agents, except as otherwise provided in this subsection.
``(2) Exclusions from coverage.--Covered prescription
medicines shall not include drugs or classes of drugs
described in subparagraphs (A) through (D) and (F) through
(H) of section 1927(d)(2) unless--
``(A) specifically provided otherwise by the Secretary with
respect to a drug in any of such classes; or
``(B) a drug in any of such classes is certified to be
medically necessary by a health care professional.
``(3) Nonduplication of prescription medicines covered
under part a or b.--A medicine prescribed for an individual
that would otherwise be a covered prescription medicine under
this part shall not be so considered to the extent that
payment for such medicine is available under part A or B
(including all injectable drugs and biologicals for which
payment was made or should have been made by a carrier under
section 1861(s)(2) (A) or (B) as of the date of enactment of
the Medicare Guaranteed and Defined Rx Benefit and Health
Provider Relief Act of 2000). Medicines otherwise covered
under part A or B shall be covered under this part to the
extent that benefits under part A or B are exhausted.
``(4) Study on inclusion of home infusion therapy
services.--Not later than one year after the date of the
enactment of the Medicare Guaranteed and Defined Rx Benefit
and Health Provider Relief Act of 2000, the Secretary shall
submit to Congress a legislative proposal for the delivery of
home infusion therapy services under this title and for a
system of payment for such a benefit that coordinates items
and services furnished under part B and under this part.

``payment of defined basic and catastrophic benefits

``Sec. 1860B. (a) Payment of Benefits.--There shall be paid
from the Prescription Medicine Insurance Account within the
Supplementary Medical Insurance Trust Fund, in the case of
each individual who is enrolled in the insurance program
under this part and who purchases covered prescription
medicines in a calendar year, the sum of the benefit amounts
under subsections (b) and (c).
``(b) Basic Benefit.--
``(1) In general.--An amount (not exceeding 50 percent of
the annual limitation under paragraph (3)) equal to the
applicable government percentage (specified in paragraph (2))
of the negotiated price for each such covered prescription
medicine or such higher percentage as is proposed under
section 1860G(d)(9).
``(2) Applicable government percentage.--The applicable
government percentage specified in this paragraph is 50
percent or such higher percentage as may be proposed under
section 1860G(d)(9), if the Secretary finds that such higher
percentage will not increase aggregate costs to the
Prescription Medicine Insurance Account.
``(3) Annual limitation in basic benefit.--
``(A) For 2003 through 2009.--For purposes of the basic
benefit described in paragraph (1), the annual limitation
under this paragraph is--
``(i) $2,000 for each of 2003 and 2004;
``(ii) $3,000 for each of 2005 and 2006;
``(iii) $4,000 for each of 2007 and 2008; and
``(iv) $5,000 for 2009.
``(B) For 2010 and subsequent years.--For purposes of
paragraph (1), the annual limitation under this paragraph for
2010 and each subsequent year is equal to the limitation for
the preceding year adjusted by the annual percentage increase
in average per capita aggregate expenditures for covered
outpatient medicines in the United States for medicare
beneficiaries, as estimated by the Secretary. Any amount
determined under this subparagraph that is not a multiple of
$10 shall be rounded to the nearest multiple of $10.
``(c) Catastrophic Benefit.--
``(1) For 2003.--In the case of and with respect to out-of-
pocket expenditures, the amount of such expenditures that
exceeds the catastrophic benefit level established by the
Secretary under paragraph (2) and increased in subsequent
years by the annual percentage increase under paragraph (3).
``(2) Establishment of catastrophic benefit level.--The
Chief Actuary shall estimate, over each five-year period,
beginning with 2003, the amount of savings to the program
under this title attributable to the operation of section 103
of the Medicare Guaranteed and Defined Rx Benefit and Health
Provider Relief Act of 2000. Based on such estimates, the
Secretary shall establish the catastrophic benefit level in a
manner so that the aggregate amount of expenditures under
this paragraph does not exceed the aggregate amount of such
savings, except that in 2003 and each year thereafter, the
catastrophic benefit level may not be greater than $4,000, as
adjusted under paragraph (3).
``(3) Indexing for outyears.--For a year beginning after
2003, the catastrophic benefit level shall be increased by
annual percentage increase determined for the year involved
under subsection (b)(3)(B).

``eligibility and enrollment

``Sec. 1860C. (a) Eligibility.--Every individual who, in or
after 2003, is entitled to hospital insurance benefits under
part A or enrolled in the medical insurance program under
part B is eligible to enroll in the insurance program under
this part, during an enrollment period prescribed in or under
this section, in such manner and form as may be prescribed by
regulations.
``(b) Enrollment.--
``(1) In general.--Each individual who satisfies subsection
(a) shall be enrolled (or eligible to enroll) in the program
under this part in accordance with the provisions of section
1837, as if that section applied to this part, except as
otherwise explicitly provided in this part.
``(2) Single enrollment period.--Except as provided in
section 1837(i) (as such section applies to this part), 1860E
(relating to loss of coverage under the medicaid program), or
1860H(e) (relating to loss of employer or union coverage), or
as otherwise explicitly provided, no individual shall be
entitled to enroll in the program under this part at any time
after the initial enrollment period without penalty, and in
the case of all other late enrollments, the Secretary shall
develop a late enrollment penalty for the individual that
fully recovers the additional actuarial risk involved in
providing coverage for the individual.
``(3) Special enrollment period in 2003.--
``(A) In general.--An individual who first satisfies
subsection (a) in 2003 may, at any time on or before December
31, 2003--
``(i) enroll in the program under this part; and
``(ii) enroll or reenroll in such program after having
previously declined or terminated enrollment in such program.
``(B) Effective date of coverage.--An individual who
enrolls under the program under this part pursuant to
subparagraph (A) shall be entitled to benefits under this
part beginning on the first day of the month following the
month in which such enrollment occurs.
``(c) Period of Coverage.--
``(1) In general.--Except as otherwise provided in this
part, an individual's coverage under the program under this
part shall be effective for the period provided in section
1838, as if that section applied to the program under this
part.

[[Page H5385]]

``(2) Part d coverage terminated by termination of coverage
under parts a and b.--In addition to the causes of
termination specified in section 1838, an individual's
coverage under this part shall be terminated when the
individual retains coverage under neither the program under
part A nor the program under part B, effective on the
effective date of termination of coverage under part A or (if
later) under part B.

``monthly premium; initial $25 premium

``Sec. 1860D. (a) Annual Establishment of Guaranteed Single
Rate for all Participating Beneficiaries.--
``(1) $25 monthly premium rate in 2003.--The monthly
premium rate in 2003 for prescription medicine benefits under
this part is $25.
``(2) Premium rates in subsequent years.--
``(A) In general.--The Secretary shall, during September of
2003 and of each succeeding year, determine and promulgate a
monthly premium rate for the succeeding year in accordance
with the provisions of this paragraph.
``(B) Determination of annual benefit costs.--The Secretary
shall estimate annually for the succeeding year the amount
equal to the total of the benefits (but not including
catastrophic benefits under section 1860B(c)) that will be
payable from the Prescription Medicine Insurance Account for
prescription medicines dispensed in such calendar year with
respect to enrollees in the program under this part. In
calculating such amount, the Secretary shall include an
appropriate amount for a contingency margin.
``(C) Determination of monthly premium rates.--
``(i) In general.--The Secretary shall determine the
monthly premium rate with respect to such enrollees for such
succeeding year, which shall be \1/12\ of the share specified
in clause (ii) of the amount determined under subparagraph
(B), divided by the total number of such enrollees, and
rounded (if such rate is not a multiple of 10 cents) to the
nearest multiple of 10 cents.
``(ii) Enrollee and employer percentage shares.--The share
specified in this clause, for purposes of clause (i), shall
be--

``(I) one-half, in the case of premiums paid by an
individual enrolled in the program under this part; and
``(II) two-thirds, in the case of premiums paid for such an
individual by a former employer (as defined in section
1860H(f)(2)).

``(D) Publication of assumptions.--The Secretary shall
publish, together with the promulgation of the monthly
premium rates for the succeeding year, a statement setting
forth the actuarial assumptions and bases employed in
arriving at the amounts and rates determined under this
paragraph.
``(b) Payment of Premiums.--
``(1) Generally through deduction from social security,
railroad retirement benefits, or benefits administered by
opm.--
``(A) In general.--In the case of an individual who is
entitled to or receiving benefits as described in subsection
(a), (b), or (d) of section 1840, premiums payable under this
part shall be collected by deduction from such benefits at
the same time and in the same manner as premiums payable
under part B are collected pursuant to section 1840.
``(B) Transfers of deduction to account.--The Secretary of
the Treasury shall, from time to time, but not less often
than quarterly, transfer premiums collected pursuant to
subparagraph (A) to the Prescription Medicine Insurance
Account from the appropriate funds and accounts described in
subsections (a)(2), (b)(2), and (d)(2) of section 1840, on
the basis of the certifications described in such
subsections. The amounts of such transfers shall be
appropriately adjusted to the extent that prior transfers
were too great or too small.
``(2) Otherwise through direct payments by enrollee to
secretary.--
``(A) In the case of inadequate deduction.--An individual
to whom paragraph (1) applies (other than an individual
receiving benefits as described in section 1840(d)) and who
estimates that the amount that will be available for
deduction under such paragraph for any premium payment period
will be less than the amount of the monthly premiums for such
period may (under regulations) pay to the Secretary the
estimated balance, or such greater portion of the monthly
premium as the individual chooses.
``(B) Other cases.--An individual enrolled in the insurance
program under this part with respect to whom none of the
preceding provisions of this subsection applies (or to whom
section 1840(c) applies) shall pay premiums to the Secretary
at such times and in such manner as the Secretary shall by
regulations prescribe.
``(C) Deposit of premiums in account.--Amounts paid to the
Secretary under this paragraph shall be deposited in the
Treasury to the credit of the Prescription Medicine Insurance
Account in the Supplementary Medical Insurance Trust Fund.
``(c) Certain Low-Income Individuals.--For rules concerning
premiums for certain low-income individuals, see section
1860E.

``prescription medicine insurance account

``Sec. 1860F. (a) Establishment.--There is created within
the Federal Supplemental Medical Insurance Trust Fund
established by section 1841 an account to be known as the
`Prescription Medicine Insurance Account' (in this section
referred to as the `Account').
``(b) Amounts in Account.--
``(1) In general.--The Account shall consist of--
``(A) such amounts as may be deposited in, or appropriated
to, such fund as provided in this part; and
``(B) such gifts and bequests as may be made as provided in
section 201(i)(1).
``(2) Separation of funds.--Funds provided under this part
to the Account shall be kept separate from all other funds
within the Federal Supplemental Medical Insurance Trust Fund.
``(c) Payments From Account.--
``(1) In general.--The Managing Trustee shall pay from time
to time from the Account such amounts, subject to
appropriations, as the Secretary certifies are necessary to
make the payments provided for by this part, and the payments
with respect to administrative expenses in accordance with
section 201(g).
``(2) Treatment in relation to part b premium.--Amounts
payable from the Account shall not be taken into account in
computing actuarial rates or premium amounts under section
1839.

``administration of benefits

``Sec. 1860G. (a) Administration.--
``(1) Use of private benefit administrators as provided for
under parts a and b.--The Secretary shall provide for
administration of the benefits under this part through a
contract with a private benefit administrator designated in
accordance with subsection (c), for enrolled individuals
residing in each service area designated pursuant to
subsection (b) (other than such individuals enrolled in a
Medicare+Choice program under part C), in accordance with the
provisions of this section.
``(2) Guarantee of program administration.--In the case of
a service area in which no private benefit administrator has
entered into a contract with the Secretary under paragraph
(1) for the administration of this part, the Secretary shall
seek to enter into a contract with a fiscal intermediary
under part A (with a contract under section 1816) or a
carrier under part B (with a contract under section 1842) to
administer this part in that service area in accordance with
the provisions of subsection (d). If the Secretary is unable
to enter into such a contract for that service area, the
Secretary shall provide for the administration of this part
in that service area in accordance with the provisions of
subsection (d) through another benefit administrator.
``(b) Designation of Geographic Service Areas.--
``(1) In general.--The Secretary shall divide the total
geographic area served by the programs under this title into
an appropriate number of service areas for purposes of
administration of benefits under this part.
``(2) Considerations in determining service areas.--In
determining or adjusting the number and boundaries of service
areas under this subsection, the Secretary shall seek to
ensure that--
``(A) there is a reasonable level of competition among
entities eligible to contract to administer the benefit
program under this section for each area; and
``(B) the designation of areas is consistent with the goal
of securing contracts under this section that use the volume
purchasing power of enrollees to obtain the same or similar
type of prescription medicine discounts as are afforded
favored, large purchasers.
``(c) Designation of Benefit Administrator.--
``(1) Award and duration of contract.--
``(A) Competitive award.--Each contract for a service area
shall be awarded competitively in accordance with section 5
of title 41, United States Code, for a period (subject to
subparagraph (B)) of not less than 2 nor more than 5 years.
``(B) Review.--A contract for a service area shall be
subject to an evaluation after a year and termination for
cause.
``(2) Eligible benefit administrators.--An entity shall not
be eligible for consideration as a benefit administrator
responsible for administering the prescription medicine
benefit program under this part in a service area unless it
meets at least the following criteria:
``(A) Type of entity.--The entity shall be capable of
administering a prescription medicine benefit program, and
may be a prescription medicine vendor, wholesale and retail
pharmacy delivery system, health care provider or insurer,
any other type of entity as the Secretary may specify, or a
consortium of such entities.
``(B) Performance capability.--The entity shall have
sufficient expertise, personnel, and resources to perform
effectively the benefit administration functions for such
area.
``(C) Financial integrity.--The entity and its officers,
directors, agents, and managing employees shall have a
satisfactory record of professional competence and
professional and financial integrity, and the entity shall
have adequate financial resources to perform services under
the contract without risk of insolvency.
``(3) Proposal requirements.--
``(A) In general.--An entity's proposal for award or
renewal of a contract under this section shall include such
material and information as the Secretary may require.
``(B) Specific information.--A proposal described in
subparagraph (A) shall--
``(i) include a detailed description of--

``(I) the schedule of negotiated prices that will be
charged to enrollees;
``(II) how the entity will deter medical errors that are
related to prescription medicines; and

[[Page H5386]]

``(III) proposed contracts with local pharmacy providers
designed to ensure access, including compensation for local
pharmacists' services;

``(ii) be accompanied by such information as the Secretary
may require on the entity's past performance; and
``(iii) disclose ownership and shared financial interests
with other entities involved in the delivery of the benefit
as proposed.
``(4) Criteria for competitive selection.--In awarding a
contract competitively, the Secretary shall consider the
comparative merits of each of the applications by eligible
entities, as determined on the basis of the entities' past
performance and other relevant factors, with respect to the
following:
``(A) the estimated total cost of the contract, taking into
consideration the entity's proposed fees and price and cost
estimates, as evaluated and adjusted by the Secretary in
accordance with the provisions of the Federal Acquisition
Regulation concerning contracting by negotiation;
``(B) prior experience in administering a type of health
insurance program;
``(C) effectiveness in containing costs through obtaining
discounts from manufacturers, pricing incentives, utilization
management, and drug utilization review;
``(D) the quality and efficiency of benefit management
services with respect to such matters as claims processing
and benefits coordination; record-keeping and reporting;
maintenance of medical records confidentiality; and drug
utilization review, patient information, customer
satisfaction, and other activities supporting quality of
care; and
``(E) such other factors as the Secretary deems necessary
to evaluate the merits of each application.
``(5) Flexibility in securing best benefit administrator.--
In awarding contracts under this subsection, the Secretary
may waive conflict of interest rules generally applicable to
Federal acquisitions (subject to such safeguards as the
Secretary may find necessary to impose) in circumstances
where the Secretary finds that such waiver--
``(A) is not inconsistent with the purposes of the programs
under this title and the best interests of enrolled
individuals; and
``(B) will permit a sufficient level of competition for
such contracts, promote efficiency of benefits
administration, or otherwise serve the objectives of the
program under this part.
If the Secretary waives such rules, the Secretary shall
establish a special monitoring program to ensure that
beneficiaries served by the benefit administrator have access
to all necessary pharmaceuticals as prescribed.
``(6) Maximizing competition and savings.--In awarding
contracts under this section, the Secretary shall give
consideration to the need to maintain sufficient numbers of
entities eligible and willing to administer benefits under
this part to ensure vigorous competition for such contracts,
while also giving consideration to the need for a benefit
administrator to have sufficient purchasing power to obtain
appropriate cost savings.
``(d) Functions of Benefit Administrator.--A benefit
administrator for a service area shall (or in the case of the
function described in paragraph (9), may) perform the
following functions:
``(1) Participation agreements, prices, and fees.--
``(A) Privately negotiated prices.--Each benefit
administrator shall establish, through negotiations with
medicine manufacturers and wholesalers and pharmacies, a
schedule of prices for covered prescription medicines.
``(B) Agreements with any willing pharmacy.--Each benefit
administrator shall enter into participation agreements under
subsection (e) with any willing pharmacy, that include terms
that--
``(i) secure the participation of sufficient numbers of
pharmacies to ensure convenient access (including adequate
emergency access);
``(ii) permit the participation of any willing pharmacy in
the service area that meets the participation requirements
described in subsection (e); and
``(iii) allow for reasonable dispensing and consultation
fees for pharmacies.
``(C) Lists of prices and participating pharmacies.--Each
benefit administrator shall ensure that the negotiated prices
established under subparagraph (A) and the list of pharmacies
with agreements under subsection (e) are regularly updated
and readily available in the service area to health care
professionals authorized to prescribe medicines,
participating pharmacies, and enrolled individuals.
``(2) Tracking of covered enrolled individuals.--In
coordination with the Secretary, each benefit administrator
shall maintain accurate, updated records of all enrolled
individuals residing in the service area (other than
individuals enrolled in a plan under part C).
``(3) Payment and coordination of benefits.--
``(A) Payment.--Each benefit administrator shall--
``(i) administer claims for payment of benefits under this
part and encourage, to the maximum extent possible, use of
electronic means for the submissions of claims;
``(ii) determine amounts of benefit payments to be made;
and
``(iii) receive, disburse, and account for funds used in
making such payments, including through the activities
specified in the provisions of this paragraph.
``(B) Coordination.--Each benefit administrator shall
coordinate with the Secretary, other benefit administrators,
pharmacies, and other relevant entities as necessary to
ensure appropriate coordination of benefits with respect to
enrolled individuals, including coordination of access to and
payment for covered prescription medicines according to an
individual's in-service area plan provisions, when such
individual is traveling outside the home service area, and
under such other circumstances as the Secretary may specify.
``(C) Explanation of benefits.--Each benefit administrator
shall furnish to enrolled individuals an explanation of
benefits in accordance with section 1806(a), and a notice of
the balance of benefits remaining for the current year,
whenever prescription medicine benefits are provided under
this part (except that such notice need not be provided more
often than monthly).
``(4) Requirements with respect to formularies.--If a
benefit administrator uses a formulary to contain costs under
this part, the benefit administrator shall--
``(A) use a pharmacy and therapeutics committee comprised
of licensed practicing physicians, pharmacists, and other
health care practitioners to develop and manage the
formulary;
``(B) include in the formulary at least 1 medicine from
each therapeutic class and, if available, a generic
equivalent thereof; and
``(C) disclose to current and prospective enrollees and to
participating providers and pharmacies in the service area,
the nature of the formulary restrictions, including
information regarding the medicines included in the formulary
and any difference in cost-sharing amounts.
``(5) Cost and utilization management; quality assurance.--
Each benefit administrator shall have in place effective cost
and utilization management, drug utilization review, quality
assurance measures, and systems to reduce medical errors,
including at least the following, together with such
additional measures as the Secretary may specify:
``(A) Drug utilization review.--A drug utilization review
program conforming to the standards provided in section
1927(g)(2) (with such modifications as the Secretary finds
appropriate).
``(B) Fraud and abuse control.--Activities to control
fraud, abuse, and waste, including prevention of diversion of
pharmaceuticals to the illegal market.
``(C) Medication therapy management.--
``(i) In general.--A program of medicine therapy management
and medication administration that is designed to assure that
covered outpatient medicines are appropriately used to
achieve therapeutic goals and reduce the risk of adverse
events, including adverse drug interactions.
``(ii) Elements of medication therapy management.--Such
program may include--

``(I) enhanced beneficiary understanding of such
appropriate use through beneficiary education, counseling,
and other appropriate means; and
``(II) increased beneficiary adherence with prescription
medication regimens through medication refill reminders,
special packaging, and other appropriate means.

[[Page H5387]]

``(A) Submission.--Each benefit administrator may submit a
proposal for decreased beneficiary cost-sharing for generic
prescription medicines, prescription medicines on the benefit
administrator's formulary, or prescription medicines obtained
through mail order pharmacies.
``(B) Contents.--The proposal submitted under subparagraph
(A) shall contain evidence that such decreased cost-sharing
would not result in an increase in aggregate costs to the
Account, including an analysis of differences in projected
drug utilization patterns by beneficiaries whose cost-sharing
would be reduced under the proposal and those making the
cost-sharing payments that would otherwise apply.
``(10) Other requirements.--Each benefit administrator
shall meet such other requirements as the Secretary may
specify.
``(e) Pharmacy Participation Agreements.--
``(1) In general.--A pharmacy that meets the requirements
of this subsection shall be eligible to enter an agreement
with a benefit administrator to furnish covered prescription
medicines and pharmacists' services to enrolled individuals
residing in the service area.
``(2) Terms of agreement.--An agreement under this
subsection shall include the following terms and
requirements:
``(A) Licensing.--The pharmacy and pharmacists shall meet
(and throughout the contract period will continue to meet)
all applicable State and local licensing requirements.
``(B) Limitation on charges.--Pharmacies participating
under this part shall not charge an enrolled individual more
than the negotiated price for an individual medicine as
established under subsection (d)(1), regardless of whether
such individual has attained the basic benefit limitation
under section 1860B(b)(3), and shall not charge an enrolled
individual more than the individual's share of the negotiated
price as determined under the provisions of this part.
``(C) Performance standards.--The pharmacy and the
pharmacist shall comply with performance standards relating
to--
``(i) measures for quality assurance, reduction of medical
errors, and participation in the drug utilization review
program described in subsection (d)(3)(A);
``(ii) systems to ensure compliance with the
confidentiality standards applicable under subsection
(d)(5)(A); and
``(iii) other requirements as the Secretary may impose to
ensure integrity, efficiency, and the quality of the program.
``(D) Disclosure of price of generic medicine.--A pharmacy
participating under this part that dispenses a prescription
medicine to a medicare beneficiary enrolled under this part
shall inform the beneficiary at the time of purchase of the
drug of any differential between the price of the prescribed
drug to the enrollee and the price of the lowest cost generic
drug that is therapeutically and pharmaceutically equivalent
and bioequivalent.
``(f) Flexibility in Assigning Workload Among Benefit
Administrators.--During the period after the Secretary has
given notice of intent to terminate a contract with a benefit
administrator, the Secretary may transfer responsibilities of
the benefit administrator under such contract to another
benefit administrator.
``(g) Guaranteed Access to Medicines in Rural and Hard-To-
Serve Areas.--
``(1) In general.--The Secretary shall ensure that all
beneficiaries have guaranteed access to the full range of
pharmaceuticals under this part, and shall give special
attention to access, pharmacist counseling, and delivery in
rural and hard-to-serve areas, including through the use of
incentives such as bonus payments to retail pharmacists in
rural areas and extra payments to the benefit administrator
for the cost of rapid delivery of pharmaceuticals, and any
other actions necessary.
``(2) GAO report.--Not later than 2 years after the
implementation of this part the Comptroller General of the
United States shall submit to Congress a report on the access
of medicare beneficiaries to pharmaceuticals and pharmacists'
services in rural and hard-to-serve areas under this part
together with any recommendations of the Comptroller General
regarding any additional steps the Secretary may need to take
to ensure the access of medicare beneficiaries to
pharmaceuticals and pharmacists' services in such areas under
this part.
``(h) Incentives for Cost and Utilization Management and
Quality Improvement.--The Secretary is authorized to include
in a contract awarded under subsection (c) such incentives
for cost and utilization management and quality improvement
as the Secretary may deem appropriate, including--
``(1) bonus and penalty incentives to encourage
administrative efficiency;
``(2) incentives under which benefit administrators share
in any benefit savings achieved;
``(3) financial incentives under which savings derived from
the substitution of generic medicines in lieu of non-generic
medicines are made available to beneficiaries enrolled under
this part, benefit administrators, pharmacies, and the
Prescription Medicine Insurance Account; and
``(4) any other incentive that the Secretary deems
appropriate and likely to be effective in managing costs or
utilization.

``incentive program to encourage employers to continue coverage

``Sec. 1860H. (a) Program Authority.--The Secretary shall
develop and implement a program under this section called the
`Employer Incentive Program' that encourages employers and
other sponsors of employment-based health care coverage to
provide adequate prescription medicine benefits to retired
individuals and to maintain such existing benefit programs,
by subsidizing, in part, the cost of providing coverage under
qualifying plans.
``(b) Sponsor Requirements.--In order to be eligible to
receive an incentive payment under this section with respect
to coverage of an individual under a qualified retiree
prescription medicine plan (as defined in subsection (f)(3)),
a sponsor shall meet the following requirements:
``(1) Assurances.--The sponsor shall--
``(A) annually attest, and provide such assurances as the
Secretary may require, that the coverage offered by the
sponsor is a qualified retiree prescription medicine plan,
and will remain such a plan for the duration of the sponsor's
participation in the program under this section; and
``(B) guarantee that it will give notice to the Secretary
and covered retirees--
``(i) at least 120 days before terminating its plan; and
``(ii) immediately upon determining that the actuarial
value of the prescription medicine benefit under the plan
falls below the actuarial value of the insurance benefit
under this part.
``(2) Other requirements.--The sponsor shall provide such
information, and comply with such requirements, including
information requirements to ensure the integrity of the
program, as the Secretary may find necessary to administer
the program under this section.
``(c) Incentive Payment.--
``(1) In general.--A sponsor that meets the requirements of
subsection (b) with respect to a quarter in a calendar year
shall have payment made by the Secretary on a quarterly basis
to the appropriate employment-based health plan of an
incentive payment, in the amount determined as described in
paragraph (2), for each retired individual (or spouse) who--
``(A) was covered under the sponsor's qualified retiree
prescription medicine plan during such quarter; and
``(B) was eligible for but was not enrolled in the
insurance program under this part.
``(2) Amount of incentive.--The payment under this section
with respect to each individual described in paragraph (1)
for a month shall be equal to \2/3\ of the monthly premium
amount payable from the Prescription Medicine Insurance
Account for an enrolled individual, as set for the calendar
year pursuant to section 1860D(a)(2).
``(3) Payment date.--The incentive under this section with
respect to a calendar quarter shall be payable as of the end
of the next succeeding calendar quarter.
``(d) Civil Money Penalties.--A sponsor, health plan, or
other entity that the Secretary determines has, directly or
through its agent, provided information in connection with a
request for an incentive payment under this section that the
entity knew or should have known to be false shall be subject
to a civil monetary penalty in an amount up to 3 times the
total incentive amounts under subsection (c) that were paid
(or would have been payable) on the basis of such
information.
``(e) Part D Enrollment for Individuals Whose Employment-
Based Retiree Health Coverage Ends.--
``(1) Eligible individuals.--An individual shall be given
the opportunity to enroll in the program under this part
during the period specified in paragraph (2) if--
``(A) the individual declined enrollment in the program
under this part at the time the individual first satisfied
section 1860C(a);
``(B) at that time, the individual was covered under a
qualified retiree prescription medicine plan for which an
incentive payment was paid under this section; and
``(C)(i) the sponsor subsequently ceased to offer such
plan; or
``(ii) the value of prescription medicine coverage under
such plan became less than the value of the coverage under
the program under this part.
``(2) Special enrollment period.--An individual described
in paragraph (1) shall be eligible to enroll in the program
under this part during the 6-month period beginning on the
first day of the month in which--
``(A) the individual receives a notice that coverage under
such plan has terminated (in the circumstance described in
paragraph (1)(C)(i)) or notice that a claim has been denied
because of such a termination; or
``(B) the individual received notice of the change in
benefits (in the circumstance described in paragraph
(1)(C)(ii)).
``(f) Definitions.--In this section:
``(1) Employment-based retiree health coverage.--The term
`employment-based retiree health coverage' means health
insurance or other coverage of health care costs for retired
individuals (or for such individuals and their spouses and
dependents) based on their status as former employees or
labor union members.
``(2) Employer.--The term `employer' has the meaning given
to such term by section 3(5) of the Employee Retirement
Income Security Act of 1974 (except that such term shall
include only employers of 2 or more employees).

[[Page H5388]]

``(3) Qualified retiree prescription medicine plan.--The
term `qualified retiree prescription medicine plan' means
health insurance coverage included in employment-based
retiree health coverage that--
``(A) provides coverage of the cost of prescription
medicines whose actuarial value to each retired beneficiary
equals or exceeds the actuarial value of the benefits
provided to an individual enrolled in the program under this
part; and
``(B) does not deny, limit, or condition the coverage or
provision of prescription medicine benefits for retired
individuals based on age or any health status-related factor
described in section 2702(a)(1) of the Public Health Service
Act.
``(4) Sponsor.--The term `sponsor' has the meaning given
the term `plan sponsor' by section 3(16)(B) of the Employee
Retirement Income Security Act of 1974.

``appropriations to cover government contributions

``Sec. 1860I. (a) In General.--There are authorized to be
appropriated from time to time, out of any moneys in the
Treasury not otherwise appropriated, to the Prescription
Medicine Insurance Account, a Government contribution equal
to--
``(1) the aggregate premiums payable for a month pursuant
to section 1860D(a)(2) by individuals enrolled in the program
under this part; plus
``(2) one-half the aggregate premiums payable for a month
pursuant to such section for such individuals by former
employers; plus
``(3) the benefits payable by reason of the application of
section 1860B(c) (relating to catastrophic benefits).
``(b) Appropriations To Cover Incentives for Employment-
Based Retiree Medicine Coverage.--There are authorized to be
appropriated to the Prescription Medicine Insurance Account
from time to time, out of any moneys in the Treasury not
otherwise appropriated such sums as may be necessary for
payment of incentive payments under section 1860H(c).

``definitions

``Sec. 1860J. As used in this part--
``(1) the term `prescription medicine' means--
``(A) a drug that may be dispensed only upon a
prescription, and that is described in subparagraph (A)(i),
(A)(ii), or (B) of section 1927(k)(2); and
``(B) insulin certified under section 506 of the Federal
Food, Drug, and Cosmetic Act, and needles, syringes, and
disposable pumps for the administration of such insulin; and
``(2) the term `benefit administrator' means an entity
which is providing for the administration of benefits under
this part pursuant to 1860G.''.
(b) Conforming Amendments.--
(1) Amendments to federal supplementary health insurance
trust fund.--Section 1841 of the Social Security Act (42
U.S.C. 1395t) is amended--
(A) in the last sentence of subsection (a)--
(i) by striking ``and'' after ``section 201(i)(1)''; and
(ii) by inserting before the period the following: ``, and
such amounts as may be deposited in, or appropriated to, the
Prescription Medicine Insurance Account established by
section 1860F'';
(B) in subsection (g), by inserting after ``by this part,''
the following: ``the payments provided for under part D (in
which case the payments shall come from the Prescription
Medicine Insurance Account in the Supplementary Medical
Insurance Trust Fund),'';
(C) in the first sentence of subsection (h), by inserting
before the period the following: ``and section 1860D(b)(4)
(in which case the payments shall come from the Prescription
Medicine Insurance Account in the Supplementary Medical
Insurance Trust Fund)''; and
(D) in the first sentence of subsection (i)--
(i) by striking ``and'' after ``section 1840(b)(1)''; and
(ii) by inserting before the period the following: ``,
section 1860D(b)(2) (in which case the payments shall come
from the Prescription Medicine Insurance Account in the
Supplementary Medical Insurance Trust Fund)''.
(2) Prescription medicine option under medicare+choice
plans.--
(A) Eligibility, election, and enrollment.--Section 1851 of
the Social Security Act (42 U.S.C. 1395w-21) is amended--
(i) in subsection (a)(1)(A), by striking ``parts A and B''
inserting ``parts A, B, and D''; and
(ii) in subsection (i)(1), by striking ``parts A and B''
and inserting ``parts A, B, and D''.
(B) Voluntary beneficiary enrollment for medicine
coverage.--Section 1852(a)(1)(A) of such Act (42 U.S.C.
1395w-22(a)(1)(A)) is amended by inserting ``(and under part
D to individuals also enrolled under that part)'' after
``parts A and B''.
(C) Access to services.--Section 1852(d)(1) of such Act (42
U.S.C. 1395w-22(d)(1)) is amended--
(i) in subparagraph (D), by striking ``and'' at the end;
(ii) in subparagraph (E), by striking the period at the end
and inserting ``; and''; and
(iii) by adding at the end the following new subparagraph:
``(F) the plan for prescription medicine benefits under
part D guarantees coverage of any specifically named covered
prescription medicine for an enrollee, when prescribed by a
physician in accordance with the provisions of such part,
regardless of whether such medicine would otherwise be
covered under an applicable formulary or discount
arrangement.''.
(D) Payments to organizations.--Section 1853(a)(1)(A) of
such Act (42 U.S.C. 1395w-23(a)(1)(A)) is amended--
(i) by inserting ``determined separately for benefits under
parts A and B and under part D (for individuals enrolled
under that part)'' after ``as calculated under subsection
(c)'';
(ii) by striking ``that area, adjusted for such risk
factors'' and inserting ``that area. In the case of payment
for benefits under parts A and B, such payment shall be
adjusted for such risk factors as''; and
(iii) by inserting before the last sentence the following:
``In the case of the payments for benefits under part D, such
payment shall initially be adjusted for the risk factors of
each enrollee as the Secretary determines to be feasible and
appropriate. By 2006, the adjustments would be for the same
risk factors applicable for benefits under parts A and B.''.
(E) Calculation of annual medicare +choice capitation
rates.--Section 1853(c) of such Act (42 U.S.C. 1395w-23(c))
is amended--
(i) in paragraph (1), in the matter preceding subparagraph
(A), by inserting ``for benefits under parts A and B'' after
``capitation rate'';
(ii) in paragraph (6)(A), by striking ``rate of growth in
expenditures under this title'' and inserting ``rate of
growth in expenditures for benefits available under parts A
and B''; and
(iii) by adding at the end the following new paragraph:
``(8) Payment for prescription medicines.--The Secretary
shall determine a capitation rate for prescription
medicines--
``(A) dispensed in 2003, which is based on the projected
national per capita costs for prescription medicine benefits
under part D and associated claims processing costs for
beneficiaries under the original medicare fee-for-service
program; and
``(B) dispensed in each subsequent year, which shall be
equal to the rate for the previous year updated by the
Secretary's estimate of the projected per capita rate of
growth in expenditures under this title for prescription
medicines for an individual enrolled under part D.''.
(F) Limitation on enrollee liability.--Section 1854(e) of
such Act (42 U.S.C. 1395w-24(e)) is amended by adding at the
end the following new paragraph:
``(5) Special rule for provision of part d benefits.--In no
event may a Medicare+Choice organization include as part of a
plan for prescription medicine benefits under part D the
following requirements:
``(A) No deductible; no coinsurance greater than 50
percent.--A requirement that an enrollee pay a deductible, or
a coinsurance percentage that exceeds 50 percent.
``(B) Mandatory inclusion of catastrophic benefit.--A
requirement that the catastrophic benefit level under the
plan be greater than such level established under section
1860B(c).''.
(G) Requirement for additional benefits.--Section
1854(f)(1) of such Act (42 U.S.C. 1395w-24(f)(1)) is amended
by adding at the end the following new sentence: ``Such
determination shall be made separately for benefits under
parts A and B and for prescription medicine benefits under
part D.''.
(H) Protections against fraud and beneficiary
protections.--Section 1857(d) of such Act (42 U.S.C. 1395w-
27(d)) is amended by adding at the end the following new
paragraph:
``(6) Availability of negotiated prices.--Each contract
under this section shall provide that enrollees who exhaust
prescription medicine benefits under the plan will continue
to have access to prescription medicines at negotiated prices
equivalent to the total combined cost of such medicines to
the plan and the enrollee prior to such exhaustion of
benefits.''.
(3) Exclusions from coverage.--
(A) Application to part d.--Section 1862(a) of the Social
Security Act (42 U.S.C. 1395y(a)) is amended in the matter
preceding paragraph (1) by striking ``part A or part B'' and
inserting ``part A, B, or D''.
(B) Prescription medicines not excluded from coverage if
appropriately prescribed.--Section 1862(a)(1) of such Act (42
U.S.C. 1395y(a)(1)) is amended--
(i) in subparagraph (H), by striking ``and'' at the end;
(ii) in subparagraph (I), by striking the semicolon at the
end and inserting ``, and''; and
(iii) by adding at the end the following new subparagraph:
``(J) in the case of prescription medicines covered under
part D, which are not prescribed in accordance with such
part;''.

SEC. 102. MEDICAID BUY-IN OF MEDICARE PRESCRIPTION MEDICINE
COVERAGE FOR CERTAIN LOW-INCOME INDIVIDUALS.

[[Page H5389]]

(B) by striking the period at the end of paragraph (65)(B)
and inserting ``; and''; and
(C) by adding at the end the following new paragraph:
``(66) provide that in the case of any individual whose
eligibility for medical assistance is not limited to medicare
or medicare medicine cost-sharing and for whom the State
elects to pay premiums under part D of title XVIII pursuant
to section 1860E, the State will purchase all prescription
medicines for such individual in accordance with the
provisions of such part D, without regard to whether the
basic benefit limitation for such individual under section
1860B(b)(3) has been reached.''.
(b) Government Payment of Medicare Medicine Cost-Sharing
Required for Qualified Medicare Beneficiaries.--Section
1905(p)(3) of the Social Security Act (42 U.S.C. 1396d(p)(3))
is amended--
(1) in subparagraph (A)--
(A) in clause (i), by striking ``and'' at the end;
(B) in clause (ii), by inserting ``and'' at the end; and
(C) by adding at the end the following new clause:
``(iii) premiums under section 1860D.''; and
(2) in subparagraph (D)--
(A) by inserting ``(i)'' after ``(D)''; and
(B) by adding at the end the following:
``(ii) Part d cost-sharing.--The difference between the
amount that is paid under section 1860B and the amount that
would be paid under such section if any reference to `50
percent' therein were deemed a reference to `100 percent'
(or, if the Secretary approves a higher percentage under such
section, if such percentage were deemed to be 100
percent).''.
(c) Government Payment of Medicare Medicine Cost-Sharing
Required for Medicare Beneficiaries With Incomes Between 100
and 150 Percent of Poverty Line.--
(1) State plan requirement.--Section 1902(a)(10)(E) of the
Social Security Act (42 U.S.C. 1396a(a)(10)(E)) is amended--
(A) in clause (iii), by striking ``and'' at the end; and
(B) by adding at the end the following new clause:
``(v) for making medical assistance available for medicare
medicine cost-sharing (as defined in section 1905(x)(2)) for
qualified medicare medicine beneficiaries described in
section 1905(x)(1); and''.
(2) 100 percent federal matching of state medical
assistance costs for medicare medicine cost-sharing.--Section
1903(a) of the Social Security Act (42 U.S.C. 1396b(a)) is
amended--
(A) by redesignating paragraph (7) as paragraph (8); and
(B) by inserting after paragraph (6) the following new
paragraph:
``(7) except in the case of amounts expended for an
individual whose eligibility for medical assistance is not
limited to medicare or medicare medicine cost-sharing, an
amount equal to 100 percent of amounts as expended as
medicare medicine cost-sharing for qualified medicare
medicine beneficiaries (as defined in section 1905(x));
plus''.
(3) Additional funds for medicare medicine cost-sharing in
territories.--Section 1108 of the Social Security Act (42
U.S.C. 1308) is amended--
(A) in subsection (f), by striking ``subsection (g),'' and
inserting ``subsections (g) and (h)''; and
(B) by adding at the end the following new subsection:
``(h) Additional Medicaid Payments to Territories for
Medicare Medicine Cost-Sharing.--.
``(1) In general.--In the case of a territory that develops
and implements a plan described in paragraph (2) (for
providing medical assistance with respect to the provision of
prescription drugs to medicare beneficiaries), the amount
otherwise determined under subsection (f) (as increased under
subsection (g)) for the State shall be increased by the
amount specified in paragraph (3).
``(2) Plan.--The plan described in this paragraph is a plan
that--
``(A) provides medical assistance with respect to the
provision of some or all medicare medicine cost sharing (as
defined in section 1905(x)(2)) to low-income medicare
beneficiaries; and
``(B) assures that additional amounts received by the State
that are attributable to the operation of this subsection are
used only for such assistance.
``(3) Increased amount.--
``(A) In general.--The amount specified in this paragraph
for a State for a year is equal to the product of--
``(i) the aggregate amount specified in subparagraph (B);
and
``(ii) the amount specified in subsection (g)(1) for that
State, divided by the sum of the amounts specified in such
section for all such States.
``(B) Aggregate amount.--The aggregate amount specified in
this subparagraph for--
``(i) 2003, is equal to $25,000,000; or
``(ii) a subsequent year, is equal to the aggregate amount
specified in this subparagraph for the previous year
increased by annual percentage increase specified in section
1860B(b)(3)(B) for the year involved.''.
(4) Definitions of eligible beneficiaries and coverage.--
Section 1905 of the Social Security Act (42 U.S.C. 1396d) is
amended by adding at the end the following new subsection:
``(x)(1) The term `qualified medicare medicine beneficiary'
means an individual--
``(A) who is enrolled or enrolling under part D of title
XVIII;
``(B) whose income (as determined under section 1612 for
purposes of the supplemental security income program, except
as provided in subsection (p)(2)(D)) is above 100 percent but
below 150 percent of the official poverty line (as referred
to in subsection (p)(2)) applicable to a family of the size
involved; and
``(C) whose resources (as determined under section 1613 for
purposes of the supplemental security income program) do not
exceed twice the maximum amount of resources that an
individual may have and obtain benefits under that program.
``(2) The term `medicare medicine cost-sharing' means the
following costs incurred with respect to a qualified medicare
medicine beneficiary, without regard to whether the costs
incurred were for items and services for which medical
assistance is otherwise available under the plan:
``(A) In the case of a qualified medicare medicine
beneficiary whose income (as determined under paragraph (1))
is less than 135 percent of the official poverty line--
``(i) premiums under section 1860D; and
``(ii) the difference between the amount that is paid under
section 1860B and the amount that would be paid under such
section if any reference to `50 percent' therein were deemed
a reference to `100 percent' (or, if the Secretary approves a
higher percentage under such section, if such percentage were
deemed to be 100 percent).
``(B) In the case of a qualified medicare medicine
beneficiary whose income (as determined under paragraph (1))
is at least 135 percent but less than 150 percent of the
official poverty line, a percentage of premiums under section
1860D, determined on a linear sliding scale ranging from 100
percent for individuals with incomes at 135 percent of such
line to 0 percent for individuals with incomes at 150 percent
of such line.
``(3) In the case of any State which is providing medical
assistance to its residents under a waiver granted under
section 1115, the Secretary shall require the State to meet
the requirement of section 1902(a)(10)(E) in the same manner
as the State would be required to meet such requirement if
the State had in effect a plan approved under this title.''.
(d) Medicaid Medicine Price Rebates Unavailable With
Respect to Medicines Purchased Through Medicare Buy-In.--
Section 1927 of the Social Security Act (42 U.S.C. 1396r-8)
is amended by adding at the end the following new subsection:
``(l) Medicines Purchased Through Medicare Buy-In.--The
provisions of this section shall not apply to prescription
medicines purchased under part D of title XVIII pursuant to
an agreement with the Secretary under section 1860E
(including any medicines so purchased after the limit under
section 1860B(b)(3) has been exceeded).''.
(e) Amendments to Medicare Part D.--Part D of title XVIII
of the Social Security Act (as added by section 2) is amended
by inserting after section 1860D the following new section:

``special eligibility, enrollment, and copayment rules for low-income
individuals

``Sec. 1860E. (a) State Options for Coverage: Continuation
of Medicaid Coverage or Enrollment under this Part.--
``(1) In general.--The Secretary shall, at the request of a
State, enter into an agreement with the State under which all
individuals described in paragraph (2) are enrolled in the
program under this part, without regard to whether any such
individual has previously declined the opportunity to enroll
in such program.
``(2) Eligibility groups.--The individuals described in
this paragraph, for purposes of paragraph (1), are
individuals who satisfy section 1860C(a) and who are--
``(A) in a coverage group or groups permitted under section
1843 (as selected by the State and specified in the
agreement); or
``(B) qualified medicare medicine beneficiaries (as defined
in section 1905(x)(1)).
``(3) Coverage period.--The period of coverage under this
part of an individual enrolled under an agreement under this
subsection shall be as follows:
``(A) Individuals eligible (at state option) for part b
buy-in.--In the case of an individual described in subsection
(a)(2)(A), the coverage period shall be the same period that
applies (or would apply) pursuant to section 1843(d).
``(B) Qualified medicare medicine beneficiaries.--In the
case of an individual described in subsection (a)(2)(B)--
``(i) the coverage period shall begin on the latest of--

``(I) January 1, 2003;
``(II) the first day of the third month following the month
in which the State agreement is entered into; or
``(III) the first day of the first month following the
month in which the individual satisfies section 1860C(a); and

[[Page H5390]]

made under arrangements with appropriate entities other than
State medicaid agencies.
``(B) Use of certain information.--Arrangements with
entities under subparagraph (A) shall provide for --
``(i) the use of existing Federal government databases to
identify eligibility; and
``(ii) the use of information obtained under section 154 of
the Social Security Act Amendments of 1994 for newly eligible
medicare beneficiaries, and the application of such
information with respect to other medicare beneficiaries.
``(b) Special Part D Enrollment Opportunity for Individuals
Losing Medicaid Eligibility.--In the case of an individual
who--
``(1) satisfies section 1860C(a); and
``(2) loses eligibility for benefits under the State plan
under title XIX after having been enrolled under such plan or
having been determined eligible for such benefits;
the Secretary shall provide an opportunity for enrollment
under the program under this part during the period that
begins on the date that such individual loses such
eligibility and ends on the date specified by the Secretary.
``(c) Definition.--For purposes of this section, the term
`State' has the meaning given such term under section 1101(a)
for purposes of title XIX.''.
(f) Removal of Sunset Date for Cost-Sharing in Medicare
Part B Premiums for Certain Qualifying Individuals.--
(1) In general.--Section 1902(a)(10)(E)(iv) of the Social
Security Act (42 U.S.C. 1396a(a)(10)(E)(iv))is amended to
read as follows--
``(iv) subject to section 1905(p)(4), for making medical
assistance available for medicare cost-sharing described in
section 1905(p)(3)(A)(ii) for individuals who would be
qualified medicare beneficiaries described in section
1905(p)(1) but for the fact that their income exceeds the
income level established by the State under section
1905(p)(2) and is at least 120 percent, but less than 135
percent, of the official poverty line (referred to in such
section) for a family of the size involved and who are not
otherwise eligible for medical assistance under the State
plan;''.
(2) Relocation of provision requiring 100 percent federal
matching of state medical assistance costs for certain
qualifying individuals.--Section 1903(a) of the Social
Security Act (42 U.S.C. 1396b(a)), as amended by subsection
(c)(3), is amended--
(A) by redesignating paragraph (8) as paragraph (9); and
(B) by inserting after paragraph (7) the following new
paragraph:
``(8) an amount equal to 100 percent of amounts expended as
medicare cost-sharing described in section 1903(a)(10)(E)(iv)
for individuals described in such section; plus''.
(3) Repeal of section 1933.--Section 1933 is repealed.
(4) Effective date.--The amendments made by this subsection
shall take effect on January 1, 2003.

SEC. 103. OFFSET FOR CATASTROPHIC PRESCRIPTION MEDICINE
BENEFIT.

If the mid-summer 2000 budget estimate prepared by the
Director of the Congressional Budget Office results in a
higher level of projected on-budget surplus over the ten
fiscal year period beginning with fiscal year 2001 than the
projected on-budget surplus in the estimate prepared by the
Director in March, 2000, there shall be transferred out of
any moneys in the Treasury not otherwise appropriated in a
fiscal year (beginning with fiscal year 2003) to the
Prescription Medicine Insurance Account (created in the
Federal Supplemental Medical Insurance Trust Fund established
by section 1841 of the Social Security Act (42 U.S.C. 1395t))
such sums as are necessary to offset the costs attributable
to the operation of section 1860B(a)(2) of the Social
Security Act (as added by section 3) (relating to
catastrophic benefit payment amounts) in that fiscal year.

SEC. 104. GAO ONGOING STUDIES AND REPORTS ON PROGRAM;
MISCELLANEOUS REPORTS.

(a) Ongoing Study.--The Comptroller General of the United
States shall conduct an ongoing study and analysis of the
prescription medicine benefit program under part D of the
Medicare program under title XVIII of the Social Security Act
(as added by section 3 of this Act), including an analysis of
each of the following:
(1) The extent to which the administering entities have -
achieved volume-based discounts similar to the favored -price
paid by other large purchasers.
(2) Whether access to the benefits under such program are
in fact available to all beneficiaries, with special
attention given to access for beneficiaries living in rural
and hard-to-serve areas.
(3) The success of such program in reducing medication
error and adverse medicine reactions and improving quality of
care, and whether it is probable that the program has
resulted in savings through reduced hospitalizations and
morbidity due to medication errors and adverse medicine
reactions.
(4) Whether patient medical record confidentiality is being
maintained and safe-guarded.
(5) Such other issues as the Comptroller General may
consider.
(b) Reports.--The Comptroller General shall issue such
reports on the results of the ongoing study described in (a)
as the Comptroller General shall deem appropriate and shall
notify Congress on a timely basis of significant problems in
the operation of the part D prescription medicine program and
the need for legislative adjustments and improvements.
(c) Miscellaneous Studies and Reports.--
(1) Study on methods to encourage additional research on
breakthrough pharmaceuticals.--
(A) In general.--The Secretary of Health and Human Services
shall seek the advice of the Secretary of the Treasury on
possible tax and trade law changes to encourage increased
original research on new pharmaceutical breakthrough products
designed to address disease and illness.
(B) Report.--Not later than January 1, 2003, the Secretary
shall submit to Congress a report on such study. The report
shall include recommended methods to encourage the
pharmaceutical industry to devote more resources to research
and development of new covered products than it devotes to
overhead expenses.
(2) Study on pharmaceutical sales practices and impact on
costs and quality of care.--
(A) In general.--The Secretary of Health and Human Services
shall conduct a study on the methods used by the
pharmaceutical industry to advertise and sell to consumers
and educate and sell to providers.
(B) Report.--Not later than January 1, 2003, the Secretary
shall submit to Congress a report on such study. The report
shall include the estimated direct and indirect costs of the
sales methods used, the quality of the information conveyed,
and whether such sales efforts leads (or could lead) to
inappropriate prescribing. Such report may include
legislative and regulatory recommendations to encourage more
appropriate education and prescribing practices.
(3) Study on cost of pharmaceutical research.--
(A) In general.--The Secretary of Health and Human Services
shall conduct a study on the costs of, and needs for, the
pharmaceutical research and the role that the taxpayer
provides in encouraging such research.
(B) Report.--Not later than January 1, 2003, the Secretary
shall submit to Congress a report on such study. The report
shall include a description of the full-range of taxpayer-
assisted programs impacting pharmaceutical research,
including tax, trade, government research, and regulatory
assistance. The report may also include legislative and
regulatory recommendations that are designed to ensure that
the taxpayer's investment in pharmaceutical research results
in the availability of pharmaceuticals at reasonable prices.
(4) Report on pharmaceutical prices in major foreign
nations.--Not later than January 1, 2003, the Secretary of
Health and Human Services shall submit to Congress a report
on the retail price of major pharmaceutical products in
various developed nations, compared to prices for the same or
similar products in the United States. The report shall
include a description of the principal reasons for any price
differences that may exist.

TITLE II--IMPROVEMENT IN BENEFICIARY SERVICES

Subtitle A--Improvement of Medicare Coverage and Appeals Process

SEC. 201. REVISIONS TO MEDICARE APPEALS PROCESS.

(a) Conduct of Reconsiderations of Determinations by
Independent Contractors.--Section 1869 of the Social Security
Act (42 U.S.C. 1395ff) is amended to read as follows:

``determinations; appeals

[[Page H5391]]

or items, solely on the basis that the person furnishes or
supplies the individual with such a service or item.
``(ii) Mandatory waiver of right to payment from
beneficiary.--Any person that furnishes services or items to
an individual may not represent an individual under this
section with respect to the issue described in section
1879(a)(2) unless the person has waived any rights for
payment from the beneficiary with respect to the services or
items involved in the appeal.
``(iii) Prohibition on payment for representation.--If a
person furnishes services or items to an individual and
represents the individual under this section, the person may
not impose any financial liability on such individual in
connection with such representation.
``(iv) Requirements for representatives of a beneficiary.--
The provisions of section 205(j) and section 206 (regarding
representation of claimants) shall apply to representation of
an individual with respect to appeals under this section in
the same manner as they apply to representation of an
individual under those sections.
``(C) Succession of rights in cases of assignment.--The
right of an individual to an appeal under this section with
respect to an item or service may be assigned to the provider
of services or supplier of the item or service upon the
written consent of such individual using a standard form
established by the Secretary for such an assignment.
``(D) Time limits for appeals.--
``(i) Reconsiderations.--Reconsideration under subparagraph
(A) shall be available only if the individual described
subparagraph (A) files notice with the Secretary to request
reconsideration by not later than 180 days after the
individual receives notice of the initial determination under
subsection (a) or within such additional time as the
Secretary may allow.
``(ii) Hearings conducted by the secretary.--The Secretary
shall establish in regulations time limits for the filing of
a request for a hearing by the Secretary in accordance with
provisions in sections 205 and 206.
``(E) Amounts in controversy.--
``(i) In general.--A hearing (by the Secretary) shall not
be available to an individual under this section if the
amount in controversy is less than $100, and judicial review
shall not be available to the individual if the amount in
controversy is less than $1,000.
``(ii) Aggregation of claims.--In determining the amount in
controversy, the Secretary, under regulations, shall allow 2
or more appeals to be aggregated if the appeals involve--

``(F) Expedited proceedings.--
``(i) Expedited determination.--In the case of an
individual who--

``(ii) Definition of national coverage determination.--For
purposes of this section, the term `national coverage
determination' means a determination by the Secretary
respecting whether or not a particular item or service is
covered nationally under this title, including such a
determination under 1862(a)(1).
``(B) Local coverage determination.--In the case of a local
coverage determination made by a fiscal intermediary or a
carrier under part A or part B respecting whether a
particular type or class of items or services is covered
under such parts, the following limitations apply:
``(i) Upon the filing of a complaint by an aggrieved party,
such a determination shall be reviewed by an administrative
law judge of the Social Security Administration. The
administrative law judge shall review the record and shall
permit discovery and the taking of evidence to evaluate the
reasonableness of the determination. In reviewing such a
determination, the administrative law judge shall defer only
to the reasonable findings of fact, reasonable
interpretations of law, and reasonable applications of fact
to law by the Secretary.
``(ii) Such a determination may be reviewed by the
Departmental Appeals Board of the Department of Health and
Human Services.
``(iii) A decision of the Departmental Appeals Board
constitutes a final agency action and is subject to judicial
review.
``(C) No material issues of fact in dispute.--In the case
of review of a determination under subparagraph (A)(i)(III)
or (B)(i) where the moving party alleges that there are no
material issues of fact in dispute, and alleges that the only
issue is the constitutionality of a provision of this title,
or that a regulation, determination, or ruling by the
Secretary is invalid, the moving party may seek review by a
court of competent jurisdiction.
``(D) Pending national coverage determinations.--
``(i) In general.--In the event the Secretary has not
issued a national coverage or noncoverage determination with
respect to a particular type or class of items or services,
an affected party may submit to the Secretary a request to
make such a determination with respect to such items or
services. By not later than the end of the 90-day period
beginning on the date the Secretary receives such a request,
the Secretary shall take one of the following actions:
``(I) Issue a national coverage determination, with or
without limitations.
``(II) Issue a national noncoverage determination.
``(III) Issue a determination that no national coverage or
noncoverage determination is appropriate as of the end of
such 90-day period with respect to national coverage of such
items or services.
``(IV) Issue a notice that states that the Secretary has
not completed a review of the request for a national coverage
determination and that includes an identification of the
remaining steps in the Secretary's review process and a
deadline by which the Secretary will complete the review and
take an action described in subclause (I), (II), or (III).
``(ii) In the case of an action described in clause
(i)(IV), if the Secretary fails to take an action referred to
in such clause by the deadline specified by the Secretary
under such clause, then the Secretary is deemed to have taken
an action described in clause (i)(III) as of the deadline.
``(iii) When issuing a determination under clause (i), the
Secretary shall include an explanation of the basis for the
determination. An action taken under clause (i) (other than
subclause (IV)) is deemed to be a national coverage
determination for purposes of review under subparagraph (A).
``(E) Annual report on national coverage determinations.--
``(i) In general.--Not later than December 1 of each year,
beginning in 2001, the Secretary shall submit to Congress a
report that sets forth a detailed compilation of the actual
time periods that were necessary to complete and fully
implement national coverage determinations that were made in
the previous fiscal year for items, services, or medical
devices not previously covered as a benefit under this title,
including, with respect to each new item, service, or medical
device, a statement of the time taken by the Secretary to
make the necessary coverage, coding, and payment
determinations, including the time taken to complete each
significant step in the process of making such
determinations.
``(ii) Publication of reports on the internet.--The
Secretary shall publish each report submitted under clause
(i) on the medicare Internet site of the Department of Health
and Human Services.
``(3) Publication on the internet of decisions of hearings
of the secretary.--Each decision of a hearing by the
Secretary shall be made public, and the Secretary shall
publish each decision on the Medicare Internet site of the
Department of Health and Human Services. The Secretary shall
remove from such decision any information that would identify
any individual, provider of services, or supplier.

[[Page H5392]]

``(4) Limitation on review of certain regulations.--A
regulation or instruction which relates to a method for
determining the amount of payment under part B and which was
initially issued before January 1, 1981, shall not be subject
to judicial review.
``(5) Standing.--An action under this section seeking
review of a coverage determination (with respect to items and
services under this title) may be initiated only by one (or
more) of the following aggrieved persons, or classes of
persons:
``(A) Individuals entitled to benefits under part A, or
enrolled under part B, or both, who are in need of the items
or services that are the subject of the coverage
determination.
``(B) Persons, or classes of persons, who make,
manufacture, offer, supply, make available, or provide such
items and services.
``(c) Conduct of Reconsiderations by Independent
Contractors.--
``(1) In general.--The Secretary shall enter into contracts
with qualified independent contractors to conduct
reconsiderations of initial determinations made under
paragraphs (2) and (3) of subsection (a). Contracts shall be
for an initial term of three years and shall be renewable on
a triennial basis thereafter.
``(2) Qualified independent contractor.--For purposes of
this subsection, the term `qualified independent contractor'
means an entity or organization that is independent of any
organization under contract with the Secretary that makes
initial determinations under subsection (a), and that meets
the requirements established by the Secretary consistent with
paragraph (3).
``(3) Requirements.--Any qualified independent contractor
entering into a contract with the Secretary under this
subsection shall meet the following requirements:
``(A) In general.--The qualified independent contractor
shall perform such duties and functions and assume such
responsibilities as may be required under regulations of the
Secretary promulgated to carry out the provisions of this
subsection, and such additional duties, functions, and
responsibilities as provided under the contract.
``(B) Determinations.--The qualified independent contractor
shall determine, on the basis of such criteria, guidelines,
and policies established by the Secretary and published under
subsection (d)(2)(D), whether payment shall be made for items
or services under part A or part B and the amount of such
payment. Such determination shall constitute the conclusive
determination on those issues for purposes of payment under
such parts for fiscal intermediaries, carriers, and other
entities whose determinations are subject to review by the
contractor; except that payment may be made if--
``(i) such payment is allowed by reason of section 1879;
``(ii) in the case of inpatient hospital services or
extended care services, the qualified independent contractor
determines that additional time is required in order to
arrange for postdischarge care, but payment may be continued
under this clause for not more than 2 days, and only in the
case in which the provider of such services did not know and
could not reasonably have been expected to know (as
determined under section 1879) that payment would not
otherwise be made for such services under part A or part B
prior to notification by the qualified independent contractor
under this subsection;
``(iii) such determination is changed as the result of any
hearing by the Secretary or judicial review of the decision
under this section; or
``(iv) such payment is authorized under section
1861(v)(1)(G).
``(C) Deadlines for decisions.--
``(i) Determinations.--The qualified independent contractor
shall conduct and conclude a determination under subparagraph
(B) or an appeal of an initial determination, and mail the
notice of the decision by not later than the end of the 45-
day period beginning on the date a request for
reconsideration has been timely filed.
``(ii) Consequences of failure to meet deadline.--In the
case of a failure by the qualified independent contractor to
mail the notice of the decision by the end of the period
described in clause (i), the party requesting the
reconsideration or appeal may request a hearing before an
administrative law judge, notwithstanding any requirements
for a reconsidered determination for purposes of the party's
right to such hearing.
``(iii) Expedited reconsiderations.--The qualified
independent contractor shall perform an expedited
reconsideration under subsection (b)(1)(F) of a notice from a
provider of services or supplier that payment may not be made
for an item or service furnished by the provider of services
or supplier, of a decision by a provider of services to
terminate services furnished to an individual, or in
accordance with the following:

``(D) Limitation on individual reviewing determinations.--
``(i) Physicians.--No physician under the employ of a
qualified independent contractor may review--

``(ii) Physician's family described.--For purposes of this
paragraph, a physician's family includes the physician's
spouse (other than a spouse who is legally separated from the
physician under a decree of divorce or separate maintenance),
children (including stepchildren and legally adopted
children), grandchildren, parents, and grandparents.
``(E) Explanation of determinations.--Any determination of
a qualified independent contractor shall be in writing, and
shall include a detailed explanation of the determination as
well as a discussion of the pertinent facts and applicable
regulations applied in making such determination.
``(F) Notice requirements.--Whenever a qualified
independent contractor makes a determination under this
subsection, the qualified independent contractor shall
promptly notify such individual and the entity responsible
for the payment of claims under part A or part B of such
determination.
``(G) Dissemination of information.--Each qualified
independent contractor shall, using the methodology
established by the Secretary under subsection (d)(4), make
available all determinations of such qualified independent
contractors to fiscal intermediaries (under section 1816),
carriers (under section 1842), peer review organizations
(under part B of title XI), Medicare+Choice organizations
offering Medicare+Choice plans under part C, and other
entities under contract with the Secretary to make initial
determinations under part A or part B or title XI.
``(H) Ensuring consistency in determinations.--Each
qualified independent contractor shall monitor its
determinations to ensure the consistency of its
determinations with respect to requests for reconsideration
of similar or related matters.
``(I) Data collection.--
``(i) In general.--Consistent with the requirements of
clause (ii), a qualified independent contractor shall collect
such information relevant to its functions, and keep and
maintain such records in such form and manner as the
Secretary may require to carry out the purposes of this
section and shall permit access to and use of any such
information and records as the Secretary may require for such
purposes.
``(ii) Type of data collected.--Each qualified independent
contractor shall keep accurate records of each decision made,
consistent with standards established by the Secretary for
such purpose. Such records shall be maintained in an
electronic database in a manner that provides for
identification of the following:

[[Page H5393]]

``(1) Outreach.--The Secretary shall perform such outreach
activities as are necessary to inform individuals entitled to
benefits under this title and providers of services and
suppliers with respect to their rights of, and the process
for, appeals made under this section. The Secretary shall use
the toll-free telephone number maintained by the Secretary
(1-800-MEDICAR(E)) (1-800-633-4227) to provide information
regarding appeal rights and respond to inquiries regarding
the status of appeals.
``(2) Guidance for reconsiderations and hearings.--
``(A) Regulations.--Not later than 1 year after the date of
the enactment of this section, the Secretary shall promulgate
regulations governing the processes of reconsiderations of
determinations by the Secretary and qualified independent
contractors and of hearings by the Secretary. Such
regulations shall include such specific criteria and provide
such guidance as required to ensure the adequate functioning
of the reconsiderations and hearings processes and to ensure
consistency in such processes.
``(B) Deadlines for administrative action.--
``(i) Hearing by administrative law judge.--

``(ii) Departmental appeals board review.--The Departmental
Appeals Board of the Department of Health and Human Services
shall conduct and conclude a review of the decision on a
hearing described in subparagraph (B) and make a decision or
remand the case to the administrative law judge for
reconsideration by not later than the end of the 90-day
period beginning on the date a request for review has been
timely filed.
``(iii) Consequences of failure to meet deadlines.--In the
case of a failure by an administrative law judge to render a
decision by the end of the period described in clause (ii),
the party requesting the hearing may request a review by the
Departmental Appeals Board of the Department of Health and
Human Services, notwithstanding any requirements for a
hearing for purposes of the party's right to such a review.
``(iv) DAB hearing procedure.--In the case of a request
described in clause (iii), the Departmental Appeals Board
shall review the case de novo.
``(C) Policies.--The Secretary shall provide such specific
criteria and guidance, including all applicable national and
local coverage policies and rationale for such policies, as
is necessary to assist the qualified independent contractors
to make informed decisions in considering appeals under this
section. The Secretary shall furnish to the qualified
independent contractors the criteria and guidance described
in this paragraph in a published format, which may be an
electronic format.
``(D) Publication of medicare coverage policies on the
internet.--The Secretary shall publish national and local
coverage policies under this title on an Internet site
maintained by the Secretary.
``(E) Effect of failure to publish policies.--
``(i) National and local coverage policies.--Qualified
independent contractors shall not be bound by any national or
local medicare coverage policy established by the Secretary
that is not published on the Internet site under subparagraph
(D).
``(ii) Other policies.--With respect to policies
established by the Secretary other than the policies
described in clause (i), qualified independent contractors
shall not be bound by such policies if the Secretary does not
furnish to the qualified independent contractor the policies
in a published format consistent with subparagraph (C).
``(3) Continuing education requirement for qualified
independent contractors and administrative law judges.--
``(A) In general.--The Secretary shall provide to each
qualified independent contractor, and, in consultation with
the Commissioner of Social Security, to administrative law
judges that decide appeals of reconsiderations of initial
determinations or other decisions or determinations under
this section, such continuing education with respect to
policies of the Secretary under this title or part B of title
XI as is necessary for such qualified independent contractors
and administrative law judges to make informed decisions with
respect to appeals.
``(B) Monitoring of decisions by qualified independent
contractors and administrative law judges.--The Secretary
shall monitor determinations made by all qualified
independent contractors and administrative law judges under
this section and shall provide continuing education and
training to such qualified independent contractors and
administrative law judges to ensure consistency of
determinations with respect to appeals on similar or related
matters. To ensure such consistency, the Secretary shall
provide for administration and oversight of qualified
independent contractors and, in consultation with the
Commissioner of Social Security, administrative law judges
through a central office of the Department of Health and
Human Services. Such administration and oversight may not be
delegated to regional offices of the Department.
``(4) Dissemination of determinations.--The Secretary shall
establish a methodology under which qualified independent
contractors shall carry out subsection (c)(3)(G).
``(5) Survey.--Not less frequently than every 5 years, the
Secretary shall conduct a survey of a valid sample of
individuals entitled to benefits under this title, providers
of services, and suppliers to determine the satisfaction of
such individuals or entities with the process for appeals of
determinations provided for under this section and education
and training provided by the Secretary with respect to that
process. The Secretary shall submit to Congress a report
describing the results of the survey, and shall include any
recommendations for administrative or legislative actions
that the Secretary determines appropriate.
``(6) Report to congress.--The Secretary shall submit to
Congress an annual report describing the number of appeals
for the previous year, identifying issues that require
administrative or legislative actions, and including any
recommendations of the Secretary with respect to such
actions. The Secretary shall include in such report an
analysis of determinations by qualified independent
contractors with respect to inconsistent decisions and an
analysis of the causes of any such inconsistencies.''.
(b) Applicability of Requirements and Limitations on
Liability of Qualified Independent Contractors to
Medicare+Choice Independent Appeals Contractors.--Section
1852(g)(4) of the Social Security Act (42 U.S.C. 1395w-
22(e)(3)) is amended by adding at the end the following:
``The provisions of section 1869(c)(5) shall apply to
independent outside entities under contract with the
Secretary under this paragraph.''.
(c) Conforming Amendment to Review by the Provider
Reimbursement Review Board.--Section 1878(g) of the Social
Security Act (42 U.S.C. 1395oo(g)) is amended by adding at
the end the following new paragraph:
``(3) Findings described in paragraph (1) and
determinations and other decisions described in paragraph (2)
may be reviewed or appealed under section 1869.''.

SEC. 202. PROVISIONS WITH RESPECT TO LIMITATIONS ON LIABILITY
OF BENEFICIARIES.

[[Page H5394]]

``(2) If the individual, prior to discharge from the
provider of services, appeals the determination to discharge
under section 1869 not later than noon of the first working
day after the date the individual receives the notice of
determination to discharge and notice of appeal rights under
paragraph (1), the provider of services shall, by the close
of business of such first working day, provide to the
Secretary (or qualified independent contractor under section
1869, as determined by the Secretary) the records required to
review the determination.
``(l) The Secretary shall develop appropriate standard
forms for individuals entitled to benefits under this title
to waive limitation of liability protections under subsection
(j) and to receive notice of discharge and appeal rights
under subsection (k). The forms developed by the Secretary
under this subsection shall clearly and in plain language
inform such individuals of their limitations on liability,
their rights under section 1869(a) to obtain an initial
determination by the Secretary of whether payment may be made
under part A or part B for such benefit, and their rights of
appeal under section 1869(b), and shall inform such
individuals that they may obtain further information or file
an appeal of the determination by use of the toll-free
telephone number (1-800-MEDICAR(E)) (1-800-633-4227)
maintained by the Secretary. The forms developed by the
Secretary under this subsection shall be the only manner in
which such individuals may waive such protections under this
title or title XI.
``(m) An individual who is entitled to benefits under this
title and is furnished an item or service is not liable for
payment of cost sharing amounts of more than $50 with respect
to such benefits unless the individual has been informed in
advance of being furnished the item or service of the
estimated amount of the cost sharing for the item or service
using a standard form established by the Secretary.''.
(2) Conforming amendment.--Section 1870(a) of the Social
Security Act (42 U.S.C. 1395gg(a)) is amended by striking
``Any payment under this title'' and inserting ``Except as
provided in section 1879(i), any payment under this title''.
(b) Inclusion of Beneficiary Liability Information in
Explanation of Medicare Benefits.--Section 1806(a) of the
Social Security Act (42 U.S.C. 1395b-7(a)) is amended--
(1) in paragraph (1), by striking ``and'' at the end;
(2) by redesignating paragraph (2) as paragraph (3); and
(3) by inserting after paragraph (1) the following new
paragraph:
``(2) lists with respect to each item or service furnished
the amount of the individual's liability for payment;'';
(4) in paragraph (3), as so redesignated, by striking the
period at the end and inserting ``; and''; and
(5) by adding at the end the following new paragraph:
``(4) includes the toll-free telephone number (1-800-
MEDICAR(E)) (1-800-633-4227) for information and questions
concerning the statement, liability of the individual for
payment, and appeal rights.''.

SEC. 203. WAIVERS OF LIABILITY FOR COST SHARING AMOUNTS.

Subtitle B--Establishment of Medicare Ombudsman

SEC. 211. ESTABLISHMENT OF MEDICARE OMBUDSMAN FOR BENEFICIARY
ASSISTANCE AND ADVOCACY.

(a) In General.--Within the Health Care Financing
Administration of the Department of Health and Human
Services, there shall be a Medicare Ombudsman, appointed by
the Secretary of Health and Human Services from among
individuals with expertise and experience in the fields of
health care and advocacy, to carry out the duties described
in subsection (b).
(b) Duties.--The Medicare Ombudsman shall--
(1) receive complaints, grievances, and requests for
information submitted by a medicare beneficiary, with respect
to any aspect of the medicare program;
(2) provide assistance with respect to complaints,
grievances, and requests referred to in clause (i),
including--
(A) assistance in collecting relevant information for such
beneficiaries, to seek an appeal of a decision or
determination made by a fiscal intermediary, carrier,
Medicare+Choice organization, a benefit administrator
responsible for administering the prescription medicine
benefit program under part D of title XVIII of the Social
Security Act, or the Secretary;
(B) assistance to such beneficiaries with any problems
arising from disenrollment from a Medicare+Choice plan under
part C of title XVIII of such Act or a benefit administrator
responsible for administering such prescription medicine
benefit program; and
(C) submit annual reports to Congress and the Secretary,
and include in such reports recommendations for improvement
in the administration of this title as the Medicare Ombudsman
determines appropriate.
(c) Coordination with State Ombudsman Programs and Consumer
Organizations.--The Medicare Ombudsman shall, to the extent
appropriate, coordinate with State medical Ombudsman
programs, and with State- and community-based consumer
organizations, to--
(1) provide information about the medicare program; and
(2) conduct outreach to educate medicare beneficiaries with
respect to manners in which problems under the medicare
program may be resolved or avoided.
(d) Definitions.--In this section:
(1) The term ``medicare beneficiary'' means an individual
entitled to benefits under part A of title XVIII of the
Social Security Act, or enrolled under part B of such title,
or both.
(2) The term ``medicare program'' means the insurance
program established under title XVIII of the Social Security
Act.
(3) The term ``fiscal intermediary'' has the meaning given
such term under section 1816(a) of the Social Security Act
(42 U.S.C. 1395h(a)).
(4) The term ``carrier'' has the meaning given such term
under section 1842(f) of the Social Security Act (42 U.S.C.
1395u(f)).
(5) The term ``Medicare+Choice organization'' has the
meaning given such term under section 1859(a)(1) of the
Social Security Act (42 U.S.C. 1395w-29(a)(1)).
(6) The term ``Secretary'' means the Secretary of Health
and Human Services.

TITLE III--MEDICARE+CHOICE REFORMS; PRESERVATION OF MEDICARE PART B
DRUG BENEFIT

Subtitle A--Medicare+Choice Reforms

SEC. 301. INCREASE IN NATIONAL PER CAPITA MEDICARE+CHOICE
GROWTH PERCENTAGE IN 2001 AND 2002.

Section 1853(c)(6)(B) of the Social Security Act (42 U.S.C.
1395w-23(c)(6)(B)) is amended--
(1) in clause (iv), by striking ``for 2001, 0.5 percentage
points'' and inserting ``for 2001, 0 percentage points''; and
(2) in clause (v), by striking ``for 2002, 0.3 percentage
points'' and inserting ``for 2002, 0 percentage points''.

SEC. 302. PERMANENTLY REMOVING APPLICATION OF BUDGET
NEUTRALITY BEGINNING IN 2002.

SEC. 303. INCREASING MINIMUM PAYMENT AMOUNT.

SEC. 304. ALLOWING MOVEMENT TO 50:50 PERCENT BLEND IN 2002.

Section 1853(c)(2) of the Social Security Act (42 U.S.C.
1395w-23(c)(2)) is amended--
(1) by striking the period at the end of subparagraph (F)
and inserting a semicolon; and
(2) by adding after and below subparagraph (F) the
following:
``except that a Medicare+Choice organization may elect to
apply subparagraph (F) (rather than subparagraph (E)) for
2002.''.

SEC. 305. INCREASED UPDATE FOR PAYMENT AREAS WITH ONLY ONE OR
NO MEDICARE+CHOICE CONTRACTS.

SEC. 306. PERMITTING HIGHER NEGOTIATED RATES IN CERTAIN
MEDICARE+CHOICE PAYMENT AREAS BELOW NATIONAL
AVERAGE.

Section 1853(c)(1) of the Social Security Act (42 U.S.C.
1395w-23(c)(1)) is amended--
(1) in the matter before subparagraph (A), by striking ``or
(C)'' and inserting ``(C), or (D)''; and

[[Page H5395]]

(2) by adding at the end the following new subparagraph:
``(D) Permitting higher rates through negotiation.--
``(i) In general.--For each year beginning with 2004, in
the case of a Medicare+Choice payment area for which the
Medicare+Choice capitation rate under this paragraph would
otherwise be less than the United States per capita cost
(USPCC), as calculated by the Secretary, a Medicare+Choice
organization may negotiate with the Medicare Benefits
Administrator an annual per capita rate that--

``(I) to reflect the demographic characteristics in the
population under this title; and
``(II) to eliminate the costs of prescription drugs.

SEC. 307. 10-YEAR PHASE IN OF RISK ADJUSTMENT BASED ON DATA
FROM ALL SETTINGS.

Section 1853(a)(3)(C)(ii) of the Social Security Act (42
U.S.C. 1395w-23(c)(1)(C)(ii)) is amended--
(1) by striking the period at the end of subclause (II) and
inserting a semicolon; and
(2) by adding after and below subclause (II) the following:
``and, beginning in 2004, insofar as such risk adjustment is
based on data from all settings, the methodology shall be
phased in equal increments over a 10 year period, beginning
with 2004 or (if later) the first year in which such data is
used.''.

Subtitle B--Preservation of Medicare Coverage of Drugs and Biologicals

SEC. 311. PRESERVATION OF COVERAGE OF DRUGS AND BIOLOGICALS
UNDER PART B OF THE MEDICARE PROGRAM.

(a) In General.--Section 1861(s)(2) of the Social Security
Act (42 U.S.C. 1395x(s)(2)) is amended, in each of
subparagraphs (A) and (B), by striking ``(including drugs and
biologicals which cannot, as determined in accordance with
regulations, be self-administered)'' and inserting
``(including injectable and infusable drugs and biologicals
which are not usually self-administered by the patient)''.
(b) Effective Date.--The amendment made by subsection (a)
applies to drugs and biologicals administered on or after
October 1, 2000.

SEC. 312. COMPREHENSIVE IMMUNOSUPPRESSIVE DRUG COVERAGE FOR
TRANSPLANT PATIENTS.

(a) Revision of Medicare Coverage for Immunosuppressive
Drugs.--
(1) In general.--Section 1861(s)(2)(J) of the Social
Security Act (42 U.S.C. 1395x(s)(2)(J)) (as amended by
section 227(a) of the Medicare, Medicaid, and SCHIP Balanced
Budget Refinement Act of 1999 (113 Stat. 1501A-354), as
enacted into law by section 1000(a)(6) of Public Law 106-113)
is amended by striking ``, to an individual who receives''
and all that follows before the semicolon at the end and
inserting ``to an individual who has received an organ
transplant''.
(2) Conforming amendments.--
(A) Section 1832 of the Social Security Act (42 U.S.C.
1395k) (as amended by section 227(b) of the Medicare,
Medicaid, and SCHIP Balanced Budget Refinement Act of 1999
(113 Stat. 1501A-354), as enacted into law by section
1000(a)(6) of Public Law 106-113) is amended--
(i) by striking subsection (b); and
(ii) by redesignating subsection (c) as subsection (b).
(B) Subsections (c) and (d) of section 227 of the Medicare,
Medicaid, and SCHIP Balanced Budget Refinement Act of 1999
(113 Stat. 1501A-355), as enacted into law by section
1000(a)(6) of Public Law 106-113, are repealed.
(3) Effective date.--The amendments made by this subsection
shall apply to drugs furnished on or after the date of
enactment of this Act.
(b) Extension of Certain Secondary Payer Requirements.--
Section 1862(b)(1)(C) of the Social Security Act (42 U.S.C.
1395y(b)(1)(C)) is amended by adding at the end the
following: ``With regard to immunosuppressive drugs furnished
on or after the date of enactment of the Medicare Guaranteed
and Defined Rx Benefit and Health Provider Relief Act of
2000, this subparagraph shall be applied without regard to
any time limitation.''.
(c) Establishment of Part D Catastrophic Limit on Part B
Copayments for Immunosuppressive Drugs.--Section 1833 of the
Social Security Act (42 U.S.C. 1395l) is amended by inserting
after subsection (o) the following new subsection:
``(p) Limitation on Amount of Deductibles and Coinsurance
for Immunosuppressive Drugs for Certain Beneficiaries.--With
respect to 2003 and each subsequent year, no deductibles and
coinsurance applicable to immunosuppresive drugs (as
described in section 1861(s)(2)(J)) in a year under this part
shall be imposed to the extent that the individual has
incurred expenditures in that year for out-of-pocket
expenditures for immunosuppressive drugs in excess of the
catastrophic benefit level provided for under section
1860B(c).''.

Subtitle C--Improvement of Certain Preventive Benefits

SEC. 321. COVERAGE OF ANNUAL SCREENING PAP SMEAR AND PELVIC
EXAMS.

(a) In General.--
(1) Annual screening pap smear.--Section 1861(nn)(1) of the
Social Security Act (42 U.S.C. 1395x(nn)(1)) is amended by
striking ``if the individual involved has not had such a test
during the preceding 3 years, or during the preceding year in
the case of a woman described in paragraph (3).'' and
inserting ``if the woman involved has not had such a test
during the preceding year.''.
(2) Annual screening pelvic exam.--Section 1861(nn)(2) of
such Act (42 U.S.C. 1395x(nn)(2)) is amended by striking
``during the preceding 3 years, or during the preceding year
in the case of a woman described in paragraph (3),'' and
inserting ``during the preceding year,''.
(3) Conforming amendment.--Section 1861(nn) of such Act (42
U.S.C. 1395x(nn)) is amended by striking paragraph (3).
(b) Effective Date.--The amendments made by subsection (a)
apply to items and services furnished on or after January 1,
2001.

TITLE IV--ADJUSTMENTS TO PAYMENT PROVISIONS OF THE BALANCED BUDGET ACT

Subtitle A--Payments for Inpatient Hospital Services

SEC. 401. ELIMINATING REDUCTION IN HOSPITAL MARKET BASKET
UPDATE FOR FISCAL YEAR 2001.

Section 1886(b)(3)(B)(i)(XVI) of the Social Security Act
(42 U.S.C. 1395ww(b)(3)(B)(i)(XVI)) is amended by striking
``minus 1.1 percentage points for hospitals (other than sole
community hospitals) in all areas, and the market basket
percentage increase for sole community hospitals,'' and
inserting ``for hospitals in all areas,''.

SEC. 402. ELIMINATING FURTHER REDUCTIONS IN INDIRECT MEDICAL
EDUCATION (IME) FOR FISCAL YEAR 2001.

Section 1886(d)(5)(B)(ii) of the Social Security Act (42
U.S.C. 1395ww(d)(5)(B)(ii)(V)) is amended--
(1) in subclause (IV)--
(A) by striking ``fiscal year 2000'' and inserting ``each
of fiscal years 2000 and 2001''; and
(B) by adding ``and'' at the end;
(2) by striking subclause (V); and
(3) by redesignating subclause (VI) as subclause (V).

SEC. 403. ELIMINATING FURTHER REDUCTIONS IN DISPROPORTIONATE
SHARE HOSPITAL (DSH) PAYMENTS.

(a) Medicare Payments.--Section 1886(d)(5)(F)(ix) of the
Social Security Act (42 U.S.C. 1395ww(d)(5)(F)(ix)) is
amended--
(1) in subclause (III), by striking ``and 2001'';
(2) by redesignating subclauses (IV) and (V) as subclauses
(V) and (VI), respectively; and
(3) by inserting after subclause (III) the following new
subclause:
``(IV) during fiscal year 2001, such additional payment
amount shall be reduced by 0 percent;''.
(b) Freeze in Medicaid DSH Allotments for Fiscal Year
2001.--Notwithstanding section 1923(f)(2) of the Social
Security Act (42 U.S.C. 1396r-4(f)(2)), the DSH allotment
under such section for a State for fiscal year 2001 shall be
the same as the DSH allotment under such section for fiscal
year 2000.

SEC. 404. INCREASE BASE PAYMENT TO PUERTO RICO HOSPITALS.

Section 1886(d)(9)(A) of the Social Security Act (42 U.S.C.
1395ww(d)(9)(A)) is amended--
(1) in clause (i), by striking ``October 1, 1997, 50
percent ('' and inserting ``October 1, 2000, 25 percent (for
discharges between October 1, 1997 and September 30, 2000, 50
percent,''; and
(2) in clause (ii), in the matter preceding subclause (I),
by striking ``after October 1, 1997, 50 percent ('' and
inserting ``after October 1, 2000, 75 percent (for discharges
between October 1, 1997, and September 30, 2000, 50
percent,''.

Subtitle B--Payments for Skilled Nursing Services

SEC. 411. ELIMINATING REDUCTION IN SNF MARKET BASKET UPDATE
FOR FISCAL YEAR 2001.

Section 1888(e)(4)(E) of the Social Security Act (42 U.S.C.
1395yy(e)(4)(E)) is amended--
(1) by redesignating subclauses (II) and (III) as
subclauses (III) and (IV) respectively;
(2) in subclause (III) as redesignated, by striking ``for
each of fiscal years 2001 and 2002,'' and inserting ``for
fiscal year 2002,''; and
(3) by inserting after subclause (I) the following new
subclause:

``(II) for fiscal year 2001, the rate computed for fiscal
year 2000 increased by the skilled nursing facility market
basket percentage increase for fiscal year 2000.''.

[[Page H5396]]

SEC. 412. EXTENSION OF MORATORIUM ON THERAPY CAPS.

Section 1833(g) of the Social Security Act (42 U.S.C.
1395l(g)) is amended in paragraph (4) by striking ``2000 and
2001.'' and inserting ``2000 through 2002.''.

Subtitle C--Payments for Home Health Services

SEC. 421. 1-YEAR ADDITIONAL DELAY IN APPLICATION OF 15
PERCENT REDUCTION ON PAYMENT LIMITS FOR HOME
HEALTH SERVICES.

Section 1895(b)(3)(A)(i) of the Social Security Act (42
U.S.C. 1395fff(b)(3)(A)(i)) is amended--
(1) by redesignating subparagraph (II) as subparagraph
(III);
(2) by inserting in subparagraph (III), as redesignated,
``24 months'' following ``periods beginning''; and
(3) by inserting after subclause (I) the following new
subclause:

``(II) For the 12-month period beginning after the period
described in subclause (I), such amount (or amounts) shall be
equal to the amount (or amounts) determined under subclause
(I), updated under subparagraph (B).''.

SEC. 422. PROVISION OF FULL MARKET BASKET UPDATE FOR HOME
HEALTH SERVICES FOR FISCAL YEAR 2001.

Section 1861(v)(1)(L)(x) of the Social Security Act (42
U.S.C. 1395x(v)(1)(L)(x)) is amended--
(1) by striking ``2001,''; and
(2) by adding at the end the following: ``With respect to
cost reporting periods beginning during fiscal year 2001, the
update to any limit under this subparagraph shall be the home
health market basket.''.

Subtitle D--Rural Provider Provisions

SEC. 431. ELIMINATION OF REDUCTION IN HOSPITAL OUTPATIENT
MARKET BASKET INCREASE.

Section 1833(t)(3)(C)(iii) of the Social Security Act (42
U.S.C. 1395l(t)(3)(C)(iii)) is amended by striking ``reduced
by 1 percentage point for such factor for services furnished
in each of 2000, 2001, and 2002'' and inserting ``reduced by
1 percentage point for such factor for services furnished in
2000 and reduced (except in the case of hospitals located in
a rural area, as defined for purposes of section 1886(d)) by
1 percentage point for such factor for services furnished in
each of 2001 and 2002.''

Subtitle E--Other Providers

SEC. 441. UPDATE IN RENAL DIALYSIS COMPOSITE RATE.

The last sentence of section 1881(b)(7) of the Social
Security Act (42 U.S.C. 1395rr(b)(7)) is amended by striking
``for such services furnished on or after January 1, 2001, by
1.2 percent'' and inserting ``for such services furnished on
or after January 1, 2001, by 2.4 percent''.

Subtitle F--Provision for Additional Adjustments

SEC. 451. GUARANTEE OF ADDITIONAL ADJUSTMENTS TO PAYMENTS FOR
PROVIDERS FROM BUDGET SURPLUS.

Notwithstanding any other provision of law, from amounts
estimated to be in excess social security surpluses estimated
under the Balanced Budget and Emergency Deficit Control Act
of 1985 for the 5 fiscal year and 10 fiscal year periods
beginning in fiscal year 2001, there shall be made available
for further adjustments to payment policies established by
the Balanced Budget Act of 1997, amounts that would provide
for additional improvements to the medicare and medicaid
programs carried out under titles XVIII and XIX of the Social
Security Act and payments to providers of services and
suppliers furnishing items and services for which payments is
made under those programs in the aggregate amounts over such
5 fiscal year and 10 fiscal year periods of $11,000,000, and
$21,000,000, respectively.

Parliamentary Inquiry

Mr. THOMAS (during the reading). Parliamentary inquiry, Mr. Speaker.
The SPEAKER pro tempore. The gentleman from California (Mr. Thomas)
will state his parliamentary inquiry.
Mr. THOMAS. Mr. Speaker, under the rules, is the majority allowed a
copy of the motion that the Clerk is reading? We do not have a motion,
a copy of the motion.
The SPEAKER pro tempore. The Clerk will try and make copies
available, but it is not a prerequisite.
The Clerk may proceed.
The Clerk continued reading the motion to recommit.
Mr. THOMAS (during the reading). Mr. Speaker, we have received a copy
of the bill. We are familiar with it, and I ask unanimous consent that
the motion be considered as read and printed in the Record.
The SPEAKER pro tempore. Is there objection to the request of the
gentleman from California?
Mr. DOGGETT. Mr. Speaker, reserving the right to object, on my
reservation I believe that this is the same bill that was submitted to
the Committee on Rules last night and the night before and that they
rejected last night, or perhaps it was 2:30 or 3:00 this morning. It is
the only genuine Medicare plan that is before us. We have been denied
an opportunity to see it other than at this point. She is really in the
reading just getting to the good part, which is the plan itself that
will provide real benefit.
Mr. Speaker, I would object to suspending the reading.
Mr. THOMAS. Mr. Speaker, I withdraw my request.
The SPEAKER pro tempore. The Clerk will continue to read.
The Clerk continued reading the motion to recommit.

{time} 1845

Mr. KLECZKA (during the reading) Mr. Speaker, I ask unanimous consent
that the motion be considered as read and printed in the Record.
The SPEAKER pro tempore (Mr. LaHood). Is there objection to the
request of the gentleman from Wisconsin?
Mr. DOGGETT. Mr. Speaker, reserving the right to object, subject to
my reservation, I believe the part that was being read regards the
ability of any citizen under the Medicare program to be able to go out
to their own pharmacy. There will be, under this plan, the right for a
guaranteed benefit instead of the ploy that we have heard about all day
that is really the product of the public relations firm.
Mr. THOMAS. Mr. Speaker, I object.
The SPEAKER pro tempore. Objection is heard.
The Clerk will read.
The Clerk continued reading the motion to recommit.

Parliamentary Inquiry

Mr. JACKSON of Illinois (during the reading). Mr. Speaker, may I make
a parliamentary inquiry?
The SPEAKER pro tempore. The gentleman may state his parliamentary
inquiry.
Mr. JACKSON of Illinois. Mr. Speaker, do the rules of the House
provide an opportunity for the reader to have relief over the next
hour?
The SPEAKER pro tempore. The Clerk's office takes care of people very
well.
Mr. JACKSON of Illinois. Mr. Speaker, then I would like to make a
motion that the reading be dispensed with.
The SPEAKER pro tempore. That is not in order.
The Clerk will proceed.
The Clerk continued reading the motion to recommit.

{time} 1945

Mr. STARK (during the reading). Mr. Speaker, I ask unanimous consent
that the motion be considered as read and printed in the Record.
The SPEAKER pro tempore (Mr. LaHood). Is there objection to the
request of the gentleman from California?
There was no objection.
The SPEAKER pro tempore. The Chair recognizes the gentleman from
California (Mr. Stark) for 5 minutes.
Mr. STARK. Mr. Speaker, this plan does what should be done for our
seniors. It provides that there will be benefits far in excess of the
Republican plan. There is no deductible that pays half the cost.

Point of Order

The SPEAKER pro tempore. The gentleman from California (Mr. Stark)
will suspend.
The Chair recognizes the gentleman from California (Mr. Thomas).
Mr. THOMAS. Mr. Speaker, I had reserved points of order against the
measure.
The SPEAKER pro tempore. The gentleman from California (Mr. Thomas)
has reserved the point of order and is recognized on his point of
order.
Mr. THOMAS. Mr. Speaker, I raise a point of order against the motion
on the grounds that it violates section 302(f) of the Budget Act which
prohibits consideration of legislation that would exceed the Committee
on Ways and Means allocation of New Budget Authority for the period of
2001 to 2005.
The SPEAKER pro tempore. It is proper for the gentleman from
California to insist on his point of order.
Mr. STARK. Mr. Speaker, may I be heard on the point of order?
The SPEAKER pro tempore. The gentleman may be heard.
Mr. STARK. Mr. Speaker, I ask the Speaker's brief indulgence as this
is a complex issue, but it is important to the seniors in our country.
Mr. Speaker, this Republican resolution has all points of order
waived, and we have none. The budget resolution which the Republicans
have created

[[Page H5397]]

that makes our hundred billion dollar bill out of order does not
comport with what the Republicans have done to provide tax cuts for the
wealthiest.
For example, there is $661,000 each for the wealthiest Americans
under a tax cut, and yet only $460 a year for senior citizens in
prescription drugs. That basically gets to the heart of why I would
object to the gentleman's point of order against our bill.
There is a doctrine. It is clearly not fair. We have no points of
order waived, and they do.
I think it was Asher Hinds' for Speaker Jubilation Cornpone in 1867
on a cold Thanksgiving evening who ruled on an issue of fairness, and I
think it was Speaker Cornpone's statement, that goose again. What is
sauce for the goose is sauce for the gander. Parliamentarian Cannon-
Deschler Precedents have carried this fairness doctrine down to today.
So, Mr. Speaker, I would like to object to the point of order on the
grounds of fairness that has been established in this House for over
100 years and urge that the Speaker rule to allow the Democrats to
present a plan which is arguably better than the Republican plan. Based
on fairness, I do urge that the point of order is overridden.
The SPEAKER pro tempore. The Chair recognizes the gentleman from
California (Mr. Thomas).
Mr. THOMAS. Mr. Speaker, am I allowed to speak on the point of order,
or would it be appropriate for others to speak?
The SPEAKER pro tempore. The gentleman from California may proceed.
Mr. THOMAS. Mr. Speaker, I am tempted to use the statement of the
gentleman from California (Mr. Stark) who conceded that it was, in
fact, in violation of the Budget Act, but I believe the Chair is in
possession of a statement from the chairman on the Committee of the
Budget which, in fact, supports the point of order that has been
presented. Therefore, I would insist on my point of order.
The SPEAKER pro tempore. The Chair recognizes the gentleman from
Rhode Island (Mr. Weygand).
Mr. WEYGAND. Mr. Speaker, may I be heard on the point of order?
The SPEAKER pro tempore. The gentleman from Rhode Island may proceed.
Mr. WEYGAND. Mr. Speaker, as a member of the Committee on the Budget,
I know that the Committee on the Budget went through much frustration
with regard to the concept that the Republicans are floating before us
till now with regard to a prescription drug plan.
They had allocated, in a very unusual way, about $40 billion based
upon CBO estimates for anticipated surpluses and monies that would be
available for such expenditures. The fact of the matter is that, over
the last week and half, if we are talking about fairness, is the amount
of surplus has been more than doubled even by CBO.
So the basic premise for which the budget resolution and the
Committee on the Budget deliberated is no longer valid because the
amount of money that has been realized for the surplus is far more than
what we realized when we first had those budget deliberations.
In true fairness, if we are to look at this particular legislation
that we are proposing, one should look at the fairness of the amount of
surplus that is presently available to the Committee on the Budget. If
indeed we are going to be fair, the chairman of the Committee on the
Budget should reconvene the whole committee to take a look at exactly
what truly is a surplus and, therefore, what could be spent on various
other items, including a prescription drug benefit.
We seek only to provide our seniors with a cost-effective way of
providing for prescription drugs. I believe many of the people on the
other side also want to do that. But what we propose is a system that
will clearly work, will not be putting it into an insurance company
program, but into a Medicare universal program that will be available
to all seniors.
I ask them to consider not raising this point of order, and I hope
that we will dismiss with this point of order.
Mr. RANGEL. Mr. Speaker, may I be heard on the point of order?
The SPEAKER pro tempore. The Chair recognizes the gentleman from New
York.
Mr. RANGEL. Mr. Speaker, it just seems to me that, whether one is
Republican or Democrat, that we all have at least the same concern for
our older Americans who, as they get older, more susceptible to illness
and pain, we have done a pretty good job with Medicare and giving older
people access to doctors and to hospitals. Even initially those people
who did not like the program would have to admit that it has really
removed a lot of pain for some deserving Americans.
Now, we reach the point in saying, what good is access to health care
if after the doctors prescribed the medicine to keep one well, that one
cannot afford to do it.
Well, it was easy for us to say that we had to establish priorities.
We always had the Communist threat. We always had to invest in defense.
But now when everybody agrees that, no matter who takes the credit for
it, we have an opportunity really, not to pick and choose which are the
winners and losers among the older people, but to be able to say we
thank them for the investments that they have made in this great
Republic. They are aged, but they are not forgotten; and that we trust
them enough that we will take some of this surplus and make them whole
so that they will never have to worry about not paying their rent or
their mortgage or getting the foods that they need because they had to
pay for their medicine.
It seems to me that it may be that the majority, from a technical
point of view, may be correct. But I think the American people would
know or should know that the majority holds in its hands this evening
the ability to waive that point of order and to say that they are
prepared to do what is right, what is moral, and what is in their power
to do.
I just hope that the gentleman from California (Mr. Thomas) would be
sensitive enough to at least consider at this point in time waiving the
point of order so that we can give a better deal to those older people
who deserve it.

{time} 2000

The SPEAKER pro tempore (Mr. LaHood). The Chair is prepared to rule.
The gentleman from California (Mr. Thomas) makes a point of order
that the amendment proposed by the instructions in the motion to
recommit offered by the gentleman from California (Mr. Stark) violates
section 302(f) of the Congressional Budget Act of 1974.
Section 302(f) of the Budget Act prescribes a point of order against
consideration of an amendment providing new budget authority if the
adoption of the amendment and enactment of the bill, as amended, would
cause the pertinent allocation of new budget authority for the relevant
fiscal years under section 302(a) of the Act to be exceeded.
The Chair is authoritatively guided by estimates provided by the
Committee on the Budget indicating that (1) any amendment that proposes
to provide new budget authority in excess of $2.964 billion over the
amount provided by the underlying bill for the period of fiscal years
2001 through 2005 would exceed the section 302(a) allocation of the
Committee on Ways and Means, as adjusted under section 214 of House
Concurrent Resolution 290, in violation of section 302(f) of the
Congressional Budget Act of 1974; and
(2) the bill, as it is proposed to be changed by the amendment, would
so cause the new budget authority provided by the bill to exceed that
level.
The Chair therefore holds that the amendment violates section 302(f)
of the Budget Act. Accordingly, the point of order is sustained and the
motion to recommit is not in order.
Mr. WEYGAND. Mr. Speaker, I respectfully disagree with the Chair's
ruling and appeal the ruling of the Chair.
The SPEAKER pro tempore. The question is, Shall the decision of the
Chair stand as the judgment of the House?

Motion to Table Offered by Mr. Thomas

Mr. THOMAS. Mr. Speaker, I move to table the motion to appeal the
ruling of the Chair.
The SPEAKER pro tempore. The question is on the motion offered by the
gentleman from California (Mr. Thomas) to lay on the table the appeal
of the ruling of the Chair.
The question was taken; and the Speaker pro tempore announced that
the ayes appeared to have it.

[[Page H5398]]

Mr. STARK. 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 224,
nays 202, not voting 8, as follows:

[Roll No. 355]

YEAS--224

Aderholt
Archer
Armey
Bachus
Baker
Ballenger
Barr
Barrett (NE)
Bartlett
Barton
Bass
Bateman
Bereuter
Biggert
Bilbray
Bilirakis
Bliley
Blunt
Boehlert
Boehner
Bonilla
Bono
Brady (TX)
Bryant
Burr
Burton
Buyer
Callahan
Calvert
Camp
Campbell
Canady
Cannon
Castle
Chabot
Chambliss
Chenoweth-Hage
Coble
Coburn
Collins
Combest
Cooksey
Cox
Crane
Cubin
Cunningham
Davis (VA)
Deal
DeLay
DeMint
Diaz-Balart
Dickey
Doolittle
Dreier
Duncan
Dunn
Ehlers
Ehrlich
Emerson
English
Everett
Ewing
Fletcher
Foley
Fossella
Franks (NJ)
Frelinghuysen
Gallegly
Ganske
Gekas
Gibbons
Gilchrest
Gillmor
Gilman
Goode
Goodlatte
Goodling
Goss
Graham
Granger
Green (WI)
Greenwood
Gutknecht
Hansen
Hastings (WA)
Hayes
Hayworth
Hefley
Herger
Hill (MT)
Hilleary
Hobson
Hoekstra
Horn
Hostettler
Houghton
Hulshof
Hunter
Hutchinson
Hyde
Isakson
Istook
Jenkins
Johnson (CT)
Johnson, Sam
Jones (NC)
Kasich
Kelly
King (NY)
Kingston
Knollenberg
Kolbe
Kuykendall
LaHood
Largent
Latham
LaTourette
Lazio
Leach
Lewis (CA)
Lewis (KY)
Linder
LoBiondo
Lucas (OK)
Manzullo
Martinez
McCollum
McCrery
McHugh
McInnis
McIntosh
McKeon
Metcalf
Mica
Miller (FL)
Miller, Gary
Moran (KS)
Morella
Myrick
Nethercutt
Ney
Northup
Norwood
Nussle
Ose
Oxley
Packard
Paul
Pease
Peterson (MN)
Peterson (PA)
Petri
Pickering
Pitts
Pombo
Porter
Portman
Pryce (OH)
Quinn
Radanovich
Ramstad
Regula
Reynolds
Riley
Rogan
Rogers
Rohrabacher
Ros-Lehtinen
Roukema
Royce
Ryan (WI)
Ryun (KS)
Salmon
Sanford
Saxton
Scarborough
Schaffer
Sensenbrenner
Sessions
Shadegg
Shaw
Shays
Sherwood
Shimkus
Shuster
Simpson
Skeen
Smith (MI)
Smith (NJ)
Smith (TX)
Souder
Spence
Stearns
Stump
Sununu
Sweeney
Talent
Tancredo
Tauzin
Taylor (NC)
Terry
Thomas
Thornberry
Thune
Tiahrt
Toomey
Traficant
Upton
Vitter
Walden
Walsh
Wamp
Watkins
Watts (OK)
Weldon (FL)
Weldon (PA)
Weller
Whitfield
Wicker
Wilson
Wolf
Wu
Young (AK)
Young (FL)

NAYS--202

Abercrombie
Ackerman
Allen
Andrews
Baca
Baird
Baldacci
Baldwin
Barcia
Barrett (WI)
Becerra
Bentsen
Berkley
Berman
Berry
Bishop
Blagojevich
Blumenauer
Bonior
Borski
Boswell
Boucher
Boyd
Brady (PA)
Brown (FL)
Brown (OH)
Capps
Capuano
Cardin
Carson
Clay
Clayton
Clement
Clyburn
Condit
Conyers
Costello
Coyne
Cramer
Crowley
Cummings
Danner
Davis (FL)
Davis (IL)
DeFazio
DeGette
Delahunt
DeLauro
Deutsch
Dicks
Dingell
Dixon
Doggett
Dooley
Doyle
Edwards
Engel
Eshoo
Etheridge
Evans
Farr
Fattah
Forbes
Ford
Frank (MA)
Frost
Gejdenson
Gephardt
Gonzalez
Gordon
Green (TX)
Gutierrez
Hall (OH)
Hall (TX)
Hastings (FL)
Hill (IN)
Hilliard
Hinchey
Hoeffel
Holden
Holt
Hooley
Hoyer
Inslee
Jackson (IL)
Jackson-Lee (TX)
John
Johnson, E. B.
Jones (OH)
Kanjorski
Kaptur
Kennedy
Kildee
Kilpatrick
Kind (WI)
Kleczka
Klink
Kucinich
LaFalce
Lampson
Lantos
Larson
Lee
Levin
Lewis (GA)
Lipinski
Lofgren
Lowey
Lucas (KY)
Luther
Maloney (CT)
Maloney (NY)
Mascara
Matsui
McCarthy (MO)
McCarthy (NY)
McDermott
McGovern
McIntyre
McKinney
McNulty
Meehan
Meek (FL)
Meeks (NY)
Menendez
Millender-McDonald
Miller, George
Minge
Mink
Moakley
Mollohan
Moore
Moran (VA)
Murtha
Nadler
Napolitano
Neal
Oberstar
Obey
Olver
Ortiz
Owens
Pallone
Pascrell
Pastor
Payne
Pelosi
Phelps
Pickett
Pomeroy
Price (NC)
Rahall
Rangel
Reyes
Rivers
Rodriguez
Roemer
Rothman
Roybal-Allard
Rush
Sabo
Sanchez
Sanders
Sandlin
Sawyer
Schakowsky
Scott
Sherman
Shows
Sisisky
Skelton
Slaughter
Smith (WA)
Snyder
Spratt
Stabenow
Stark
Stenholm
Strickland
Stupak
Tanner
Tauscher
Taylor (MS)
Thompson (CA)
Thompson (MS)
Thurman
Tierney
Towns
Turner
Udall (CO)
Udall (NM)
Velazquez
Visclosky
Waters
Watt (NC)
Waxman
Weiner
Wexler
Weygand
Wise
Woolsey
Wynn

NOT VOTING--8

Cook
Filner
Fowler
Hinojosa
Jefferson
Markey
Serrano
Vento

{time} 2021

Messrs. UDALL of Colorado, WYNN, SNYDER, and SPRATT changed their
vote from ``yea'' to ``nay.''
Mr. BALLENGER and Mrs. BIGGERT changed their vote from ``nay'' to
``yea.''
So the motion to table was agreed to.
The result of the vote was announced as above recorded.
A motion to reconsider was laid on the table.

Motion to Recommit Offered by Mr. Stark

Mr. STARK. Mr. Speaker, I offer a motion to recommit.
The SPEAKER pro tempore (Mr. LaHood). Is the gentleman opposed to the
bill?
Mr. STARK. I am, Mr. Speaker, in its present form.
The SPEAKER pro tempore. The Clerk will report the motion to
recommit.
The Clerk read as follows:

Mr. Stark of California moves to recommit the bill H.R.
4680 to the Committee on Ways and Means with instructions to
report the same back to the House promptly with a Medicare
prescription medicine plan that accomplishes the following
by, among other things, the amendment-in-the-nature-of-a-
substitute specified below:
(1) Provide a benefit which is available to all medicare
beneficiaries, including those in rural areas.
(2) Provide equal treatment for all medicare beneficiaries,
without disparities in coverage between rural, urban, and
suburban regions, and without compounding current disparities
in coverage.
(3) Ensure that medicare beneficiaries receive a price
substantially similar to the best prices paid by preferred
customers for their prescription medications.
(4) Help low and middle-income medicare beneficiaries
afford prescription medicine costs.
(5) Allow participation by local pharmacists, not just mail
order pharmacies.
(6) Be consistent with medicare modernization.
The amendment-in-the-nature-of-a-substitute is as follows:
Strike all after the enacting clause and insert the
following:

SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

Sec. 1. Short title; table of contents.
Sec. 2. Findings.

TITLE I--MEDICARE PRESCRIPTION MEDICINE BENEFIT PROGRAM

Sec. 101. Prescription medicine benefit program.

``Part D--Prescription Medicine Benefit for the Aged and Disabled

``Sec. 1860. Establishment of defined prescription medicine benefit
program for the aged and disabled under the medicare
program.
``Sec. 1860A. Scope of defined benefits; coverage of all medically
necessary prescription medicines.
``Sec. 1860B. Payment of defined basic and catastrophic benefits.
``Sec. 1860C. Eligibility and enrollment.
``Sec. 1860D. Monthly premium; initial $25 premium.
``Sec. 1860F. Prescription medicine insurance account.
``Sec. 1860G. Administration of benefits .
``Sec. 1860H. Incentive program to encourage employers to continue
coverage .
``Sec. 1860I. Appropriations to cover government contributions.
``Sec. 1860J. Definitions.''.
Sec. 102. Medicaid buy-in of medicare prescription medicine coverage
for certain low-income individuals.
``Sec. 1860E. Special eligibility, enrollment, and copayment rules for
low-income individuals.
Sec. 103. GAO ongoing studies and reports on program; miscellaneous
reports.

TITLE II--IMPROVEMENT IN BENEFICIARY SERVICES

Subtitle A--Improvement of Medicare Coverage and Appeals Process

Sec. 201. Revisions to medicare appeals process.
Sec. 202. Provisions with respect to limitations on liability of
beneficiaries.

[[Page H5399]]

Sec. 203. Waivers of liability for cost sharing amounts.

Subtitle B--Establishment of Medicare Ombudsman

Sec. 211. Establishment of Medicare Ombudsman for Beneficiary
Assistance and Advocacy.

TITLE III--MEDICARE+CHOICE REFORMS; PRESERVATION OF MEDICARE PART B
DRUG BENEFIT

Subtitle A--Medicare+Choice Reforms

Subtitle B--Preservation of Medicare Coverage of Drugs and Biologicals

Sec. 311. Preservation of coverage of drugs and biologicals under part
B of the medicare program.
Sec. 312. Comprehensive immunosuppressive medicine coverage for
transplant patients.

Subtitle C--Improvement of Certain Preventive Benefits

Sec. 321. Coverage of annual screening pap smear and pelvic exams.

TITLE IV--ADJUSTMENTS TO PAYMENT PROVISIONS OF THE BALANCED BUDGET ACT

Subtitle A--Payments for Inpatient Hospital Services

Subtitle B--Payments for Skilled Nursing Services

Sec. 411. Eliminating reduction in SNF market basket update for fiscal
year 2001.
Sec. 412. Extension of moratorium on therapy caps.

Subtitle C--Payments for Home Health Services

Subtitle D--Rural Provider Provisions

Sec. 431. Elimination of reduction in hospital outpatient market basket
increase.

Subtitle E--Other Providers

Sec. 441. Update in renal dialysis composite rate.

Subtitle F--Provision for Additional Adjustments

Sec. 451. Guarantee of additional adjustments to payments for providers
from budget surplus.

TITLE V--IMPLEMENTATION OF CERTAIN PROVISIONS CONTINGENT ON GUARANTEE
OF CERTIFICATION OF TRUST FUND SURPLUSES

Sec. 501. Implementation of certain provisions before 2006 contingent
on ensuring debt retirement and integrity of the Social
Security and Medicare Trust Fund surpluses.

SEC. 2. FINDINGS.

TITLE I--MEDICARE PRESCRIPTION MEDICINE BENEFIT PROGRAM

SEC. 101. PRESCRIPTION MEDICINE BENEFIT PROGRAM.

(a) In General.--Title XVIII of the Social Security Act (42
U.S.C. 1395 et seq.) is amended--
(1) by redesignating part D as part E; and
(2) by inserting after part C the following new part:

``Part D--Prescription Medicine Benefit for the Aged and Disabled

``establishment of defined prescription medicine benefit program for
the aged and disabled under the medicare program

``scope of defined benefits; coverage of all medically necessary
prescription medicines

``Sec. 1860A. (a) In General.--The benefits provided to an
individual enrolled in the insurance program under this part
shall consist of--
``(1) payments made, in accordance with the provisions of
this part, for covered prescription medicines (as specified
in subsection (b)) dispensed by any pharmacy participating in
the program under this part (and, in circumstances designated
by the benefit administrator, by a nonparticipating
pharmacy); and
``(2) charging by pharmacies of the negotiated discount
price--
``(A) for all covered prescription medicines, without
regard to basic benefit limitation specified in section
1860B(b)(3); and
``(B) established with respect to any drugs or classes of
drugs described in subparagraphs (A), (B), (D), (E), or (F)
of section 1927(d)(2) that are available to individuals
receiving benefits under this title.
``(b) Covered Prescription Medicines.--
``(1) In general.--Covered prescription medicines, for
purposes of this part, include all prescription medicines (as
defined in section 1860J(1)), including smoking cessation
agents, except as otherwise provided in this subsection.
``(2) Exclusions from coverage.--Covered prescription
medicines shall not include drugs or classes of drugs
described in subparagraphs (A) through (D) and (F) through
(H) of section 1927(d)(2) unless specifically provided
otherwise by the Secretary with respect to a drug in any of
such classes.
``(3) Nonduplication of prescription medicines covered
under part a or b.--A medicine prescribed for an individual
that would otherwise be a covered prescription medicine under
this part shall not be so considered to the extent that
payment for such medicine is available under part A or B
(including all injectable drugs and biologicals for which
payment was made or should have been made by a carrier under
section 1861(s)(2) (A) or (B) as of the date of enactment of
the Medicare Guaranteed and Defined Rx Benefit and Health
Provider Relief Act of 2000). Medicines otherwise covered
under part A or B shall be covered under this part to the
extent that benefits under part A or B are exhausted.
``(4) Study on inclusion of home infusion therapy
services.--Not later than one year after the date of the
enactment of the Medicare Guaranteed and Defined Rx Benefit
and Health Provider Relief Act of 2000, the Secretary shall
submit to Congress a legislative proposal for the delivery of
home infusion therapy services under this title and for a
system of payment for such a benefit that coordinates items
and services furnished under part B and under this part.

[[Page H5400]]

``payment of defined basic and catastrophic benefits

``Sec. 1860B. (a) Payment of Benefits.--There shall be paid
from the Prescription Medicine Insurance Account within the
Supplementary Medical Insurance Trust Fund, in the case of
each individual who is enrolled in the insurance program
under this part and who purchases covered prescription
medicines in a calendar year, the sum of the benefit amounts
under subsections (b) and (c).
``(b) Basic Benefit.--
``(1) In general.--An amount (not exceeding 50 percent of
the annual limitation under paragraph (3)) equal to the
applicable government percentage (specified in paragraph (2))
of the negotiated price for each such covered prescription
medicine or such higher percentage as is proposed under
section 1860G(d)(9).
``(2) Applicable government percentage.--The applicable
government percentage specified in this paragraph is 50
percent or such higher percentage as may be proposed under
section 1860G(d)(9), if the Secretary finds that such higher
percentage will not increase aggregate costs to the
Prescription Medicine Insurance Account.
``(3) Annual limitation in basic benefit.--
``(A) For 2003 through 2009.--For purposes of the basic
benefit described in paragraph (1), the annual limitation
under this paragraph is--
``(i) $2,000 for each of 2003, 2004, and 2005;
``(ii) $3,000 for 2006;
``(iii) $4,000 for each of 2007 and 2008; and
``(iv) $5,000 for 2009.
``(B) For 2010 and subsequent years.--For purposes of
paragraph (1), the annual limitation under this paragraph for
2010 and each subsequent year is equal to the limitation for
the preceding year adjusted by the annual percentage increase
in average per capita aggregate expenditures for covered
outpatient medicines in the United States for medicare
beneficiaries, as estimated by the Secretary. Any amount
determined under this subparagraph that is not a multiple of
$10 shall be rounded to the nearest multiple of $10.
``(c) Catastrophic Benefit.--
``(1) In general.--With respect to out-of-pocket
expenditures incurred by a beneficiary enrolled under this
part in a year specified in paragraph (2), the amount of such
expenditures that exceeds the catastrophic benefit level
specified in paragraph (3).
``(2) Application in a year.--A year specified in this
paragraph is--
``(A) any year (during the period beginning with 2003 and
ending with 2005) for which the certification described in
section 501 of the Medicare Guaranteed and Defined Rx Benefit
and Health Provider Relief Act of 2000 has been made; and
``(B) 2006 and any subsequent year.
``(3) Catastrophic benefit limit.--
``(A) For 2003.--The catastrophic benefit level specified
in this paragraph for 2003 is $4,000.
``(B) Indexing for subsequent years.--For a year after
2003, the catastrophic benefit level specified in this
paragraph is the catastrophic benefit level specified in this
paragraph for the previous year increased by annual
percentage increase determined for the year involved under
subsection (b)(3)(B). Any such amount which is not a multiple
of $10 shall be rounded to the nearest multiple of $10.

``eligibility and enrollment

``monthly premium; initial $25 premium

``Sec. 1860D. (a) Annual Establishment of Guaranteed Single
Rate for All Participating Beneficiaries.--
``(1) $25 monthly premium rate in 2003.--The monthly
premium rate in 2003 for prescription medicine benefits under
this part is $25.
``(2) Premium rates in subsequent years.--
``(A) In general.--The Secretary shall, during September of
2003 and of each succeeding year, determine and promulgate a
monthly premium rate for the succeeding year in accordance
with the provisions of this paragraph.
``(B) Determination of annual benefit costs.--The Secretary
shall estimate annually for the succeeding year the amount
equal to the total of the benefits (but not including
catastrophic benefits under section 1860B(c)) that will be
payable from the Prescription Medicine Insurance Account for
prescription medicines dispensed in such calendar year with
respect to enrollees in the program under this part. In
calculating such amount, the Secretary shall include an
appropriate amount for a contingency margin.
``(C) Determination of monthly premium rates.--
``(i) In general.--The Secretary shall determine the
monthly premium rate with respect to such enrollees for such
succeeding year, which shall be \1/12\ of the share specified
in clause (ii) of the amount determined under subparagraph
(B), divided by the total number of such enrollees, and
rounded (if such rate is not a multiple of 10 cents) to the
nearest multiple of 10 cents.
``(ii) Enrollee and employer percentage shares.--The share
specified in this clause, for purposes of clause (i), shall
be--

``prescription medicine insurance account

``Sec. 1860F. (a) Establishment.--There is created within
the Federal Supplemental Medical Insurance Trust Fund
established by

[[Page H5401]]

section 1841 an account to be known as the `Prescription
Medicine Insurance Account' (in this section referred to as
the `Account').
``(b) Amounts in Account.--
``(1) In general.--The Account shall consist of--
``(A) such amounts as may be deposited in, or appropriated
to, such fund as provided in this part; and
``(B) such gifts and bequests as may be made as provided in
section 201(i)(1).
``(2) Separation of funds.--Funds provided under this part
to the Account shall be kept separate from all other funds
within the Federal Supplemental Medical Insurance Trust Fund.
``(c) Payments From Account.--
``(1) In general.--The Managing Trustee shall pay from time
to time from the Account such amounts, subject to
appropriations, as the Secretary certifies are necessary to
make the payments provided for by this part, and the payments
with respect to administrative expenses in accordance with
section 201(g).
``(2) Treatment in relation to part b premium.--Amounts
payable from the Account shall not be taken into account in
computing actuarial rates or premium amounts under section
1839.

``administration of benefits

``(I) the schedule of negotiated prices that will be
charged to enrollees;
``(II) how the entity will deter medical errors that are
related to prescription medicines; and
``(III) proposed contracts with local pharmacy providers
designed to ensure access, including compensation for local
pharmacists' services;

If the Secretary waives such rules, the Secretary shall
establish a special monitoring program to ensure that
beneficiaries served by the benefit administrator have access
to all necessary pharmaceuticals as prescribed.
``(6) Maximizing competition and savings.--In awarding
contracts under this section, the Secretary shall give
consideration to the need to maintain sufficient numbers of
entities eligible and willing to administer benefits under
this part to ensure vigorous competition for such contracts,
while also giving consideration to the need for a benefit
administrator to have sufficient purchasing power to obtain
appropriate cost savings.
``(d) Functions of Benefit Administrator.--A benefit
administrator for a service area shall (or in the case of the
function described in paragraph (9), may) perform the
following functions:
``(1) Participation agreements, prices, and fees.--
``(A) Privately negotiated prices.--Each benefit
administrator shall establish, through negotiations with
medicine manufacturers and wholesalers and pharmacies, a
schedule of prices for covered prescription medicines.
``(B) Agreements with any willing pharmacy.--Each benefit
administrator shall enter into participation agreements under
subsection (e) with any willing pharmacy, that include terms
that--
``(i) secure the participation of sufficient numbers of
pharmacies to ensure convenient access (including adequate
emergency access);
``(ii) permit the participation of any willing pharmacy in
the service area that meets the participation requirements
described in subsection (e); and
``(iii) allow for reasonable dispensing and consultation
fees for pharmacies.
``(C) Lists of prices and participating pharmacies.--Each
benefit administrator shall ensure that the negotiated prices
established under subparagraph (A) and the list of pharmacies
with agreements under subsection (e) are regularly updated
and readily available in the service area to health care
professionals authorized to prescribe medicines,
participating pharmacies, and enrolled individuals.
``(2) Tracking of covered enrolled individuals.--In
coordination with the Secretary, each benefit administrator
shall maintain accurate, updated records of all enrolled
individuals residing in the service area (other than
individuals enrolled in a plan under part C).
``(3) Payment and coordination of benefits.--
``(A) Payment.--Each benefit administrator shall--
``(i) administer claims for payment of benefits under this
part and encourage, to the

[[Page H5402]]

maximum extent possible, use of electronic means for the
submissions of claims;
``(ii) determine amounts of benefit payments to be made;
and
``(iii) receive, disburse, and account for funds used in
making such payments, including through the activities
specified in the provisions of this paragraph.
``(B) Coordination.--Each benefit administrator shall
coordinate with the Secretary, other benefit administrators,
pharmacies, and other relevant entities as necessary to
ensure appropriate coordination of benefits with respect to
enrolled individuals, including coordination of access to and
payment for covered prescription medicines according to an
individual's in-service area plan provisions, when such
individual is traveling outside the home service area, and
under such other circumstances as the Secretary may specify.
``(C) Explanation of benefits.--Each benefit administrator
shall furnish to enrolled individuals an explanation of
benefits in accordance with section 1806(a), and a notice of
the balance of benefits remaining for the current year,
whenever prescription medicine benefits are provided under
this part (except that such notice need not be provided more
often than monthly).
``(4) Requirements with respect to formularies.--If a
benefit administrator uses a formulary to contain costs under
this part, the benefit administrator shall--
``(A) use a pharmacy and therapeutics committee comprised
of licensed practicing physicians, pharmacists, and other
health care practitioners to develop and manage the
formulary;
``(B) include in the formulary at least 1 medicine from
each therapeutic class and, if available, a generic
equivalent thereof; and
``(C) disclose to current and prospective enrollees and to
participating providers and pharmacies in the service area,
the nature of the formulary restrictions, including
information regarding the medicines included in the formulary
and any difference in cost-sharing amounts.
``(5) Cost and utilization management; quality assurance.--
Each benefit administrator shall have in place effective cost
and utilization management, drug utilization review, quality
assurance measures, and systems to reduce medical errors,
including at least the following, together with such
additional measures as the Secretary may specify:
``(A) Drug utilization review.--A drug utilization review
program conforming to the standards provided in section
1927(g)(2) (with such modifications as the Secretary finds
appropriate).
``(B) Fraud and abuse control.--Activities to control
fraud, abuse, and waste, including prevention of diversion of
pharmaceuticals to the illegal market.
``(C) Medication therapy management.--
``(i) In general.--A program of medicine therapy management
and medication administration that is designed to assure that
covered outpatient medicines are appropriately used to
achieve therapeutic goals and reduce the risk of adverse
events, including adverse drug interactions.
``(ii) Elements of medication therapy management.--Such
program may include--

``(iii) Development of program in cooperation with licensed
pharmacists.--The program shall be developed in cooperation
with licensed pharmacists and physicians.
``(iv) Considerations in pharmacy fees.--The benefit
administrators shall take into account, in establishing fees
for pharmacists and others providing services under the
medication therapy management program, the resources and time
used in implementing the program.
``(6) Education and information activities.--Each benefit
administrator shall have in place mechanisms for
disseminating educational and informational materials to
enrolled individuals and health care providers designed to
encourage effective and cost-effective use of prescription
medicine benefits and to ensure that enrolled individuals
understand their rights and obligations under the program.
``(7) Beneficiary protections.--
``(A) Confidentiality of health information.--Each benefit
administrator shall have in effect systems to safeguard the
confidentiality of health care information on enrolled
individuals, which comply with section 1106 and with section
552a of title 5, United States Code, and meet such additional
standards as the Secretary may prescribe.
``(B) Grievance and appeal procedures.--Each benefit
administrator shall have in place such procedures as the
Secretary may specify for hearing and resolving grievances
and appeals, including expedited appeals, brought by enrolled
individuals against the benefit administrator or a pharmacy
concerning benefits under this part, which shall include
procedures equivalent to those specified in subsections (f)
and (g) of section 1852.
``(8) Records, reports, and audits of benefit
administrators.--
``(A) Records and audits.--Each benefit administrator shall
maintain adequate records, and afford the Secretary access to
such records (including for audit purposes).
``(B) Reports.--Each benefit administrator shall make such
reports and submissions of financial and utilization data as
the Secretary may require taking into account standard
commercial practices.
``(9) Proposal for alternative coinsurance amount.--
``(A) Submission.--Each benefit administrator may submit a
proposal for decreased beneficiary cost-sharing for generic
prescription medicines, prescription medicines on the benefit
administrator's formulary, or prescription medicines obtained
through mail order pharmacies.
``(B) Contents.--The proposal submitted under subparagraph
(A) shall contain evidence that such decreased cost-sharing
would not result in an increase in aggregate costs to the
Account, including an analysis of differences in projected
drug utilization patterns by beneficiaries whose cost-sharing
would be reduced under the proposal and those making the
cost-sharing payments that would otherwise apply.
``(10) Other requirements.--Each benefit administrator
shall meet such other requirements as the Secretary may
specify.
``(e) Pharmacy Participation Agreements.--
``(1) In general.--A pharmacy that meets the requirements
of this subsection shall be eligible to enter an agreement
with a benefit administrator to furnish covered prescription
medicines and pharmacists' services to enrolled individuals
residing in the service area.
``(2) Terms of agreement.--An agreement under this
subsection shall include the following terms and
requirements:
``(A) Licensing.--The pharmacy and pharmacists shall meet
(and throughout the contract period will continue to meet)
all applicable State and local licensing requirements.
``(B) Limitation on charges.--Pharmacies participating
under this part shall not charge an enrolled individual more
than the negotiated price for an individual medicine as
established under subsection (d)(1), regardless of whether
such individual has attained the basic benefit limitation
under section 1860B(b)(3), and shall not charge an enrolled
individual more than the individual's share of the negotiated
price as determined under the provisions of this part.
``(C) Performance standards.--The pharmacy and the
pharmacist shall comply with performance standards relating
to--
``(i) measures for quality assurance, reduction of medical
errors, and participation in the drug utilization review
program described in subsection (d)(3)(A);
``(ii) systems to ensure compliance with the
confidentiality standards applicable under subsection
(d)(5)(A); and
``(iii) other requirements as the Secretary may impose to
ensure integrity, efficiency, and the quality of the program.
``(D) Disclosure of price of generic medicine.--A pharmacy
participating under this part that dispenses a prescription
medicine to a medicare beneficiary enrolled under this part
shall inform the beneficiary at the time of purchase of the
drug of any differential between the price of the prescribed
drug to the enrollee and the price of the lowest cost generic
drug that is therapeutically and pharmaceutically equivalent
and bioequivalent.
``(f) Flexibility in Assigning Workload Among Benefit
Administrators.--During the period after the Secretary has
given notice of intent to terminate a contract with a benefit
administrator, the Secretary may transfer responsibilities of
the benefit administrator under such contract to another
benefit administrator.
``(g) Guaranteed Access to Medicines in Rural and Hard-To-
Serve Areas.--
``(1) In general.--The Secretary shall ensure that all
beneficiaries have guaranteed access to the full range of
pharmaceuticals under this part, and shall give special
attention to access, pharmacist counseling, and delivery in
rural and hard-to-serve areas, including through the use of
incentives such as bonus payments to retail pharmacists in
rural areas and extra payments to the benefit administrator
for the cost of rapid delivery of pharmaceuticals, and any
other actions necessary.
``(2) GAO report.--Not later than 2 years after the
implementation of this part the Comptroller General of the
United States shall submit to Congress a report on the access
of medicare beneficiaries to pharmaceuticals and pharmacists'
services in rural and hard-to-serve areas under this part
together with any recommendations of the Comptroller General
regarding any additional steps the Secretary may need to take
to ensure the access of medicare beneficiaries to
pharmaceuticals and pharmacists' services in such areas under
this part.
``(h) Incentives for Cost and Utilization Management and
Quality Improvement.--The Secretary is authorized to include
in a contract awarded under subsection (c) such incentives
for cost and utilization management and quality improvement
as the Secretary may deem appropriate, including--
``(1) bonus and penalty incentives to encourage
administrative efficiency;
``(2) incentives under which benefit administrators share
in any benefit savings achieved;
``(3) financial incentives under which savings derived from
the substitution of generic medicines in lieu of non-generic
medicines are made available to beneficiaries enrolled under
this part, benefit administrators,

[[Page H5403]]

pharmacies, and the Prescription Medicine Insurance Account;
and
``(4) any other incentive that the Secretary deems
appropriate and likely to be effective in managing costs or
utilization.

``incentive program to encourage employers to continue coverage

``appropriations to cover government contributions

``definitions

[[Page H5404]]

medicine for an enrollee, when prescribed by a physician in
accordance with the provisions of such part, regardless of
whether such medicine would otherwise be covered under an
applicable formulary or discount arrangement.''.
(D) Payments to organizations.--Section 1853(a)(1)(A) of
such Act (42 U.S.C. 1395w-23(a)(1)(A)) is amended--
(i) by inserting ``determined separately for benefits under
parts A and B and under part D (for individuals enrolled
under that part)'' after ``as calculated under subsection
(c)'';
(ii) by striking ``that area, adjusted for such risk
factors'' and inserting ``that area. In the case of payment
for benefits under parts A and B, such payment shall be
adjusted for such risk factors as''; and
(iii) by inserting before the last sentence the following:
``In the case of the payments for benefits under part D, such
payment shall initially be adjusted for the risk factors of
each enrollee as the Secretary determines to be feasible and
appropriate. By 2006, the adjustments would be for the same
risk factors applicable for benefits under parts A and B.''.
(E) Calculation of annual medicare +choice capitation
rates.--Section 1853(c) of such Act (42 U.S.C. 1395w-23(c))
is amended--
(i) in paragraph (1), in the matter preceding subparagraph
(A), by inserting ``for benefits under parts A and B'' after
``capitation rate'';
(ii) in paragraph (6)(A), by striking ``rate of growth in
expenditures under this title'' and inserting ``rate of
growth in expenditures for benefits available under parts A
and B''; and
(iii) by adding at the end the following new paragraph:
``(8) Payment for prescription medicines.--The Secretary
shall determine a capitation rate for prescription
medicines--
``(A) dispensed in 2003, which is based on the projected
national per capita costs for prescription medicine benefits
under part D and associated claims processing costs for
beneficiaries under the original medicare fee-for-service
program; and
``(B) dispensed in each subsequent year, which shall be
equal to the rate for the previous year updated by the
Secretary's estimate of the projected per capita rate of
growth in expenditures under this title for prescription
medicines for an individual enrolled under part D.''.
(F) Limitation on enrollee liability.--Section 1854(e) of
such Act (42 U.S.C. 1395w-24(e)) is amended by adding at the
end the following new paragraph:
``(5) Special rule for provision of part d benefits.--In no
event may a Medicare+Choice organization include as part of a
plan for prescription medicine benefits under part D the
following requirements:
``(A) No deductible; no coinsurance greater than 50
percent.--A requirement that an enrollee pay a deductible, or
a coinsurance percentage that exceeds 50 percent.
``(B) Mandatory inclusion of catastrophic benefit.--A
requirement that the catastrophic benefit level under the
plan be greater than such level established under section
1860B(c).''.
(G) Requirement for additional benefits.--Section
1854(f)(1) of such Act (42 U.S.C. 1395w-24(f)(1)) is amended
by adding at the end the following new sentence: ``Such
determination shall be made separately for benefits under
parts A and B and for prescription medicine benefits under
part D.''.
(H) Protections against fraud and beneficiary
protections.--Section 1857(d) of such Act (42 U.S.C. 1395w-
27(d)) is amended by adding at the end the following new
paragraph:
``(6) Availability of negotiated prices.--Each contract
under this section shall provide that enrollees who exhaust
prescription medicine benefits under the plan will continue
to have access to prescription medicines at negotiated prices
equivalent to the total combined cost of such medicines to
the plan and the enrollee prior to such exhaustion of
benefits.''.
(3) Exclusions from coverage.--
(A) Application to part d.--Section 1862(a) of the Social
Security Act (42 U.S.C. 1395y(a)) is amended in the matter
preceding paragraph (1) by striking ``part A or part B'' and
inserting ``part A, B, or D''.
(B) Prescription medicines not excluded from coverage if
appropriately prescribed.--Section 1862(a)(1) of such Act (42
U.S.C. 1395y(a)(1)) is amended--
(i) in subparagraph (H), by striking ``and'' at the end;
(ii) in subparagraph (I), by striking the semicolon at the
end and inserting ``, and''; and
(iii) by adding at the end the following new subparagraph:
``(J) in the case of prescription medicines covered under
part D, which are not prescribed in accordance with such
part;''.

SEC. 102. MEDICAID BUY-IN OF MEDICARE PRESCRIPTION MEDICINE
COVERAGE FOR CERTAIN LOW-INCOME INDIVIDUALS.

(a) State Option To Buy-In Dually Eligible Individuals.--
(1) Coverage of premiums as medical assistance.--Section
1905(a) of the Social Security Act (42 U.S.C. 1396d) is
amended in the second sentence of the flush matter at the end
by striking ``premiums under part B'' the first place it
appears and inserting ``premiums under parts B and D''.
(2) State commitment to continue participation in part d
after benefit limit exceeded.--Section 1902(a) of such Act
(42 U.S.C. 1396a) is amended--
(A) by striking ``and'' at the end of paragraph (64);
(B) by striking the period at the end of paragraph (65)(B)
and inserting ``; and''; and
(C) by adding at the end the following new paragraph:
``(66) provide that in the case of any individual whose
eligibility for medical assistance is not limited to medicare
or medicare medicine cost-sharing and for whom the State
elects to pay premiums under part D of title XVIII pursuant
to section 1860E, the State will purchase all prescription
medicines for such individual in accordance with the
provisions of such part D, without regard to whether the
basic benefit limitation for such individual under section
1860B(b)(3) has been reached.''.
(b) Government Payment of Medicare Medicine Cost-Sharing
Required for Qualified Medicare Beneficiaries.--Section
1905(p)(3) of the Social Security Act (42 U.S.C. 1396d(p)(3))
is amended--
(1) in subparagraph (A)--
(A) in clause (i), by striking ``and'' at the end;
(B) in clause (ii), by inserting ``and'' at the end; and
(C) by adding at the end the following new clause:
``(iii) premiums under section 1860D.''; and
(2) in subparagraph (D)--
(A) by inserting ``(i)'' after ``(D)''; and
(B) by adding at the end the following:
``(ii) Part d cost-sharing.--The difference between the
amount that is paid under section 1860B and the amount that
would be paid under such section if any reference to `50
percent' therein were deemed a reference to `100 percent'
(or, if the Secretary approves a higher percentage under such
section, if such percentage were deemed to be 100
percent).''.
(c) Government Payment of Medicare Medicine Cost-Sharing
Required for Medicare Beneficiaries With Incomes Between 100
and 150 Percent of Poverty Line.--
(1) State plan requirement.--Section 1902(a)(10)(E) of the
Social Security Act (42 U.S.C. 1396a(a)(10)(E)) is amended--
(A) in clause (iii), by striking ``and'' at the end; and
(B) by adding at the end the following new clause:
``(v) for making medical assistance available for medicare
medicine cost-sharing (as defined in section 1905(x)(2)) for
qualified medicare medicine beneficiaries described in
section 1905(x)(1); and''.
(2) 100 percent federal matching of state medical
assistance costs for medicare medicine cost-sharing.--Section
1903(a) of the Social Security Act (42 U.S.C. 1396b(a)) is
amended--
(A) by redesignating paragraph (7) as paragraph (8); and
(B) by inserting after paragraph (6) the following new
paragraph:
``(7) except in the case of amounts expended for an
individual whose eligibility for medical assistance is not
limited to medicare or medicare medicine cost-sharing, an
amount equal to 100 percent of amounts as expended as
medicare medicine cost-sharing for qualified medicare
medicine beneficiaries (as defined in section 1905(x));
plus''.
(3) Additional funds for medicare medicine cost-sharing in
territories.--Section 1108 of the Social Security Act (42
U.S.C. 1308) is amended--
(A) in subsection (f), by striking ``subsection (g),'' and
inserting ``subsections (g) and (h)''; and
(B) by adding at the end the following new subsection:
``(h) Additional Medicaid Payments to Territories for
Medicare Medicine Cost-Sharing.--
``(1) In general.--In the case of a territory that develops
and implements a plan described in paragraph (2) (for
providing medical assistance with respect to the provision of
prescription drugs to medicare beneficiaries), the amount
otherwise determined under subsection (f) (as increased under
subsection (g)) for the State shall be increased by the
amount specified in paragraph (3).
``(2) Plan.--The plan described in this paragraph is a plan
that--
``(A) provides medical assistance with respect to the
provision of some or all medicare medicine cost sharing (as
defined in section 1905(x)(2)) to low-income medicare
beneficiaries; and
``(B) assures that additional amounts received by the State
that are attributable to the operation of this subsection are
used only for such assistance.
``(3) Increased amount.--
``(A) In general.--The amount specified in this paragraph
for a State for a year is equal to the product of--
``(i) the aggregate amount specified in subparagraph (B);
and
``(ii) the amount specified in subsection (g)(1) for that
State, divided by the sum of the amounts specified in such
section for all such States.
``(B) Aggregate amount.--The aggregate amount specified in
this subparagraph for--
``(i) 2003, is equal to $25,000,000; or
``(ii) a subsequent year, is equal to the aggregate amount
specified in this subparagraph for the previous year
increased by annual percentage increase specified in section
1860B(b)(3)(B) for the year involved.''.
(4) Definitions of eligible beneficiaries and coverage.--
Section 1905 of the Social Security Act (42 U.S.C. 1396d) is
amended by

[[Page H5405]]

adding at the end the following new subsection:
``(x)(1) The term `qualified medicare medicine beneficiary'
means an individual--
``(A) who is enrolled or enrolling under part D of title
XVIII;
``(B) whose income (as determined under section 1612 for
purposes of the supplemental security income program, except
as provided in subsection (p)(2)(D)) is above 100 percent but
below 150 percent of the official poverty line (as referred
to in subsection (p)(2)) applicable to a family of the size
involved; and
``(C) whose resources (as determined under section 1613 for
purposes of the supplemental security income program) do not
exceed twice the maximum amount of resources that an
individual may have and obtain benefits under that program.
``(2) The term `medicare medicine cost-sharing' means the
following costs incurred with respect to a qualified medicare
medicine beneficiary, without regard to whether the costs
incurred were for items and services for which medical
assistance is otherwise available under the plan:
``(A) In the case of a qualified medicare medicine
beneficiary whose income (as determined under paragraph (1))
is less than 135 percent of the official poverty line--
``(i) premiums under section 1860D; and
``(ii) the difference between the amount that is paid under
section 1860B and the amount that would be paid under such
section if any reference to `50 percent' therein were deemed
a reference to `100 percent' (or, if the Secretary approves a
higher percentage under such section, if such percentage were
deemed to be 100 percent).
``(B) In the case of a qualified medicare medicine
beneficiary whose income (as determined under paragraph (1))
is at least 135 percent but less than 150 percent of the
official poverty line, a percentage of premiums under section
1860D, determined on a linear sliding scale ranging from 100
percent for individuals with incomes at 135 percent of such
line to 0 percent for individuals with incomes at 150 percent
of such line.
``(3) In the case of any State which is providing medical
assistance to its residents under a waiver granted under
section 1115, the Secretary shall require the State to meet
the requirement of section 1902(a)(10)(E) in the same manner
as the State would be required to meet such requirement if
the State had in effect a plan approved under this title.''.
(d) Medicaid Medicine Price Rebates Unavailable With
Respect to Medicines Purchased Through Medicare Buy-In.--
Section 1927 of the Social Security Act (42 U.S.C. 1396r-8)
is amended by adding at the end the following new subsection:
``(l) Medicines Purchased Through Medicare Buy-In.--The
provisions of this section shall not apply to prescription
medicines purchased under part D of title XVIII pursuant to
an agreement with the Secretary under section 1860E
(including any medicines so purchased after the limit under
section 1860B(b)(3) has been exceeded).''.
(e) Amendments to Medicare Part D.--Part D of title XVIII
of the Social Security Act (as added by section 2) is amended
by inserting after section 1860D the following new section:

``special eligibility, enrollment, and copayment rules for low-income
individuals

``(ii) the coverage period shall end on the last day of the
month in which the individual is determined by the State to
have become ineligible for medicare medicine cost-sharing.
``(4) Enrollment for low-income subsidy through other
means.--
``(A) Flexibility in enrollment process.--With respect to
low-income individuals residing in a State enrolling under
this part on or after January 1, 2006, the Secretary shall
provide for determinations of whether the individual is
eligible for a subsidy and the amount of such individual's
income to be made under arrangements with appropriate
entities other than State medicaid agencies.
``(B) Use of certain information.--Arrangements with
entities under subparagraph (A) shall provide for --
``(i) the use of existing Federal government databases to
identify eligibility; and
``(ii) the use of information obtained under section 154 of
the Social Security Act Amendments of 1994 for newly eligible
medicare beneficiaries, and the application of such
information with respect to other medicare beneficiaries.
``(b) Special Part D Enrollment Opportunity for Individuals
Losing Medicaid Eligibility.--In the case of an individual
who--
``(1) satisfies section 1860C(a); and
``(2) loses eligibility for benefits under the State plan
under title XIX after having been enrolled under such plan or
having been determined eligible for such benefits;

the Secretary shall provide an opportunity for enrollment
under the program under this part during the period that
begins on the date that such individual loses such
eligibility and ends on the date specified by the Secretary.
``(c) Definition.--For purposes of this section, the term
`State' has the meaning given such term under section 1101(a)
for purposes of title XIX.''.
(f) Removal of Sunset Date for Cost-Sharing in Medicare
Part B Premiums for Certain Qualifying Individuals.--
(1) In general.--Section 1902(a)(10)(E)(iv) of the Social
Security Act (42 U.S.C. 1396a(a)(10)(E)(iv))is amended to
read as follows--
``(iv) subject to section 1905(p)(4), for making medical
assistance available for medicare cost-sharing described in
section 1905(p)(3)(A)(ii) for individuals who would be
qualified medicare beneficiaries described in section
1905(p)(1) but for the fact that their income exceeds the
income level established by the State under section
1905(p)(2) and is at least 120 percent, but less than 135
percent, of the official poverty line (referred to in such
section) for a family of the size involved and who are not
otherwise eligible for medical assistance under the State
plan;''.
(2) Relocation of provision requiring 100 percent federal
matching of state medical assistance costs for certain
qualifying individuals.--Section 1903(a) of the Social
Security Act (42 U.S.C. 1396b(a)), as amended by subsection
(c)(3), is amended--
(A) by redesignating paragraph (8) as paragraph (9); and
(B) by inserting after paragraph (7) the following new
paragraph:
``(8) an amount equal to 100 percent of amounts expended as
medicare cost-sharing described in section 1903(a)(10)(E)(iv)
for individuals described in such section; plus''.
(3) Repeal of section 1933.--Section 1933 is repealed.
(4) Effective date.--The amendments made by this subsection
shall take effect on January 1, 2003.

SEC. 103. GAO ONGOING STUDIES AND REPORTS ON PROGRAM;
MISCELLANEOUS REPORTS.

[[Page H5406]]

a report on such study. The report shall include recommended
methods to encourage the pharmaceutical industry to devote
more resources to research and development of new covered
products than it devotes to overhead expenses.
(2) Study on pharmaceutical sales practices and impact on
costs and quality of care.--
(A) In general.--The Secretary of Health and Human Services
shall conduct a study on the methods used by the
pharmaceutical industry to advertise and sell to consumers
and educate and sell to providers.
(B) Report.--Not later than January 1, 2003, the Secretary
shall submit to Congress a report on such study. The report
shall include the estimated direct and indirect costs of the
sales methods used, the quality of the information conveyed,
and whether such sales efforts leads (or could lead) to
inappropriate prescribing. Such report may include
legislative and regulatory recommendations to encourage more
appropriate education and prescribing practices.
(3) Study on cost of pharmaceutical research.--
(A) In general.--The Secretary of Health and Human Services
shall conduct a study on the costs of, and needs for, the
pharmaceutical research and the role that the taxpayer
provides in encouraging such research.
(B) Report.--Not later than January 1, 2003, the Secretary
shall submit to Congress a report on such study. The report
shall include a description of the full-range of taxpayer-
assisted programs impacting pharmaceutical research,
including tax, trade, government research, and regulatory
assistance. The report may also include legislative and
regulatory recommendations that are designed to ensure that
the taxpayer's investment in pharmaceutical research results
in the availability of pharmaceuticals at reasonable prices.
(4) Report on pharmaceutical prices in major foreign
nations.--Not later than January 1, 2003, the Secretary of
Health and Human Services shall submit to Congress a report
on the retail price of major pharmaceutical products in
various developed nations, compared to prices for the same or
similar products in the United States. The report shall
include a description of the principal reasons for any price
differences that may exist.

TITLE II--IMPROVEMENT IN BENEFICIARY SERVICES

Subtitle A--Improvement of Medicare Coverage and Appeals Process

SEC. 201. REVISIONS TO MEDICARE APPEALS PROCESS.

(a) Conduct of Reconsiderations of Determinations by
Independent Contractors.--Section 1869 of the Social Security
Act (42 U.S.C. 1395ff) is amended to read as follows:

``determinations; appeals

``(F) Expedited proceedings.--
``(i) Expedited determination.--In the case of an
individual who--

[[Page H5407]]

under part A or part B respecting whether a particular type
or class of items or services is covered under such parts,
the following limitations apply:
``(i) Upon the filing of a complaint by an aggrieved party,
such a determination shall be reviewed by an administrative
law judge of the Social Security Administration. The
administrative law judge shall review the record and shall
permit discovery and the taking of evidence to evaluate the
reasonableness of the determination. In reviewing such a
determination, the administrative law judge shall defer only
to the reasonable findings of fact, reasonable
interpretations of law, and reasonable applications of fact
to law by the Secretary.
``(ii) Such a determination may be reviewed by the
Departmental Appeals Board of the Department of Health and
Human Services.
``(iii) A decision of the Departmental Appeals Board
constitutes a final agency action and is subject to judicial
review.
``(C) No material issues of fact in dispute.--In the case
of review of a determination under subparagraph (A)(i)(III)
or (B)(i) where the moving party alleges that there are no
material issues of fact in dispute, and alleges that the only
issue is the constitutionality of a provision of this title,
or that a regulation, determination, or ruling by the
Secretary is invalid, the moving party may seek review by a
court of competent jurisdiction.
``(D) Pending national coverage determinations.--
``(i) In general.--In the event the Secretary has not
issued a national coverage or noncoverage determination with
respect to a particular type or class of items or services,
an affected party may submit to the Secretary a request to
make such a determination with respect to such items or
services. By not later than the end of the 90-day period
beginning on the date the Secretary receives such a request,
the Secretary shall take one of the following actions:
``(I) Issue a national coverage determination, with or
without limitations.
``(II) Issue a national noncoverage determination.
``(III) Issue a determination that no national coverage or
noncoverage determination is appropriate as of the end of
such 90-day period with respect to national coverage of such
items or services.
``(IV) Issue a notice that states that the Secretary has
not completed a review of the request for a national coverage
determination and that includes an identification of the
remaining steps in the Secretary's review process and a
deadline by which the Secretary will complete the review and
take an action described in subclause (I), (II), or (III).
``(ii) In the case of an action described in clause
(i)(IV), if the Secretary fails to take an action referred to
in such clause by the deadline specified by the Secretary
under such clause, then the Secretary is deemed to have taken
an action described in clause (i)(III) as of the deadline.
``(iii) When issuing a determination under clause (i), the
Secretary shall include an explanation of the basis for the
determination. An action taken under clause (i) (other than
subclause (IV)) is deemed to be a national coverage
determination for purposes of review under subparagraph (A).
``(E) Annual report on national coverage determinations.--
``(i) In general.--Not later than December 1 of each year,
beginning in 2001, the Secretary shall submit to Congress a
report that sets forth a detailed compilation of the actual
time periods that were necessary to complete and fully
implement national coverage determinations that were made in
the previous fiscal year for items, services, or medical
devices not previously covered as a benefit under this title,
including, with respect to each new item, service, or medical
device, a statement of the time taken by the Secretary to
make the necessary coverage, coding, and payment
determinations, including the time taken to complete each
significant step in the process of making such
determinations.
``(ii) Publication of reports on the internet.--The
Secretary shall publish each report submitted under clause
(i) on the medicare Internet site of the Department of Health
and Human Services.
``(3) Publication on the internet of decisions of hearings
of the secretary.--Each decision of a hearing by the
Secretary shall be made public, and the Secretary shall
publish each decision on the Medicare Internet site of the
Department of Health and Human Services. The Secretary shall
remove from such decision any information that would identify
any individual, provider of services, or supplier.
``(4) Limitation on review of certain regulations.--A
regulation or instruction which relates to a method for
determining the amount of payment under part B and which was
initially issued before January 1, 1981, shall not be subject
to judicial review.
``(5) Standing.--An action under this section seeking
review of a coverage determination (with respect to items and
services under this title) may be initiated only by one (or
more) of the following aggrieved persons, or classes of
persons:
``(A) Individuals entitled to benefits under part A, or
enrolled under part B, or both, who are in need of the items
or services that are the subject of the coverage
determination.
``(B) Persons, or classes of persons, who make,
manufacture, offer, supply, make available, or provide such
items and services.
``(c) Conduct of Reconsiderations by Independent
Contractors.--
``(1) In general.--The Secretary shall enter into contracts
with qualified independent contractors to conduct
reconsiderations of initial determinations made under
paragraphs (2) and (3) of subsection (a). Contracts shall be
for an initial term of three years and shall be renewable on
a triennial basis thereafter.
``(2) Qualified independent contractor.--For purposes of
this subsection, the term `qualified independent contractor'
means an entity or organization that is independent of any
organization under contract with the Secretary that makes
initial determinations under subsection (a), and that meets
the requirements established by the Secretary consistent with
paragraph (3).
``(3) Requirements.--Any qualified independent contractor
entering into a contract with the Secretary under this
subsection shall meet the following requirements:
``(A) In general.--The qualified independent contractor
shall perform such duties and functions and assume such
responsibilities as may be required under regulations of the
Secretary promulgated to carry out the provisions of this
subsection, and such additional duties, functions, and
responsibilities as provided under the contract.
``(B) Determinations.--The qualified independent contractor
shall determine, on the basis of such criteria, guidelines,
and policies established by the Secretary and published under
subsection (d)(2)(D), whether payment shall be made for items
or services under part A or part B and the amount of such
payment. Such determination shall constitute the conclusive
determination on those issues for purposes of payment under
such parts for fiscal intermediaries, carriers, and other
entities whose determinations are subject to review by the
contractor; except that payment may be made if--
``(i) such payment is allowed by reason of section 1879;
``(ii) in the case of inpatient hospital services or
extended care services, the qualified independent contractor
determines that additional time is required in order to
arrange for postdischarge care, but payment may be continued
under this clause for not more than 2 days, and only in the
case in which the provider of such services did not know and
could not reasonably have been expected to know (as
determined under section 1879) that payment would not
otherwise be made for such services under part A or part B
prior to notification by the qualified independent contractor
under this subsection;
``(iii) such determination is changed as the result of any
hearing by the Secretary or judicial review of the decision
under this section; or
``(iv) such payment is authorized under section
1861(v)(1)(G).
``(C) Deadlines for decisions.--
``(i) Determinations.--The qualified independent contractor
shall conduct and conclude a determination under subparagraph
(B) or an appeal of an initial determination, and mail the
notice of the decision by not later than the end of the 45-
day period beginning on the date a request for
reconsideration has been timely filed.
``(ii) Consequences of failure to meet deadline.--In the
case of a failure by the qualified independent contractor to
mail the notice of the decision by the end of the period
described in clause (i), the party requesting the
reconsideration or appeal may request a hearing before an
administrative law judge, notwithstanding any requirements
for a reconsidered determination for purposes of the party's
right to such hearing.
``(iii) Expedited reconsiderations.--The qualified
independent contractor shall perform an expedited
reconsideration under subsection (b)(1)(F) of a notice from a
provider of services or supplier that payment may not be made
for an item or service furnished by the provider of services
or supplier, of a decision by a provider of services to
terminate services furnished to an individual, or in
accordance with the following:

``(D) Limitation on individual reviewing determinations.--
``(i) Physicians.--No physician under the employ of a
qualified independent contractor may review--

[[Page H5408]]

directly or indirectly, a significant financial interest in
such institution, organization, or agency.

``(ii) Physician's family described.--For purposes of this
paragraph, a physician's family includes the physician's
spouse (other than a spouse who is legally separated from the
physician under a decree of divorce or separate maintenance),
children (including stepchildren and legally adopted
children), grandchildren, parents, and grandparents.
``(E) Explanation of determinations.--Any determination of
a qualified independent contractor shall be in writing, and
shall include a detailed explanation of the determination as
well as a discussion of the pertinent facts and applicable
regulations applied in making such determination.
``(F) Notice requirements.--Whenever a qualified
independent contractor makes a determination under this
subsection, the qualified independent contractor shall
promptly notify such individual and the entity responsible
for the payment of claims under part A or part B of such
determination.
``(G) Dissemination of information.--Each qualified
independent contractor shall, using the methodology
established by the Secretary under subsection (d)(4), make
available all determinations of such qualified independent
contractors to fiscal intermediaries (under section 1816),
carriers (under section 1842), peer review organizations
(under part B of title XI), Medicare+Choice organizations
offering Medicare+Choice plans under part C, and other
entities under contract with the Secretary to make initial
determinations under part A or part B or title XI.
``(H) Ensuring consistency in determinations.--Each
qualified independent contractor shall monitor its
determinations to ensure the consistency of its
determinations with respect to requests for reconsideration
of similar or related matters.
``(I) Data collection.--
``(i) In general.--Consistent with the requirements of
clause (ii), a qualified independent contractor shall collect
such information relevant to its functions, and keep and
maintain such records in such form and manner as the
Secretary may require to carry out the purposes of this
section and shall permit access to and use of any such
information and records as the Secretary may require for such
purposes.
``(ii) Type of data collected.--Each qualified independent
contractor shall keep accurate records of each decision made,
consistent with standards established by the Secretary for
such purpose. Such records shall be maintained in an
electronic database in a manner that provides for
identification of the following:

``(iii) Annual reporting.--Each qualified independent
contractor shall submit annually to the Secretary (or
otherwise as the Secretary may request) records maintained
under this paragraph for the previous year.
``(J) Hearings by the secretary.--The qualified independent
contractor shall (i) prepare such information as is required
for an appeal of its reconsidered determination to the
Secretary for a hearing, including as necessary, explanations
of issues involved in the determination and relevant
policies, and (ii) participate in such hearings as required
by the Secretary.
``(4) Number of qualified independent contractors.--The
Secretary shall enter into contracts with not fewer than 12
qualified independent contractors under this subsection.
``(5) Limitation on qualified independent contractor
liability.--No qualified independent contractor having a
contract with the Secretary under this subsection and no
person who is employed by, or who has a fiduciary
relationship with, any such qualified independent contractor
or who furnishes professional services to such qualified
independent contractor, shall be held by reason of the
performance of any duty, function, or activity required or
authorized pursuant to this subsection or to a valid contract
entered into under this subsection, to have violated any
criminal law, or to be civilly liable under any law of the
United States or of any State (or political subdivision
thereof) provided due care was exercised in the performance
of such duty, function, or activity.
``(d) Administrative Provisions.--
``(1) Outreach.--The Secretary shall perform such outreach
activities as are necessary to inform individuals entitled to
benefits under this title and providers of services and
suppliers with respect to their rights of, and the process
for, appeals made under this section. The Secretary shall use
the toll-free telephone number maintained by the Secretary
(1-800-MEDICAR(E)) (1-800-633-4227) to provide information
regarding appeal rights and respond to inquiries regarding
the status of appeals.
``(2) Guidance for reconsiderations and hearings.--
``(A) Regulations.--Not later than 1 year after the date of
the enactment of this section, the Secretary shall promulgate
regulations governing the processes of reconsiderations of
determinations by the Secretary and qualified independent
contractors and of hearings by the Secretary. Such
regulations shall include such specific criteria and provide
such guidance as required to ensure the adequate functioning
of the reconsiderations and hearings processes and to ensure
consistency in such processes.
``(B) Deadlines for administrative action.--
``(i) Hearing by administrative law judge.--

``(I) In general.--Except as provided in subclause (II), an
administrative law judge shall conduct and conclude a hearing
on a decision of a qualified independent contractor under
subsection (c) and render a decision on such hearing by not
later than the end of the 90-day period beginning on the date
a request for hearing has been timely filed.
``(II) Waiver of deadline by party seeking hearing.--The
90-day period under subclause (i) shall not apply in the case
of a motion or stipulation by the party requesting the
hearing to waive such period.

``(ii) Departmental appeals board review.--The Departmental
Appeals Board of the Department of Health and Human Services
shall conduct and conclude a review of the decision on a
hearing described in subparagraph (B) and make a decision or
remand the case to the administrative law judge for
reconsideration by not later than the end of the 90-day
period beginning on the date a request for review has been
timely filed.
``(iii) Consequences of failure to meet deadlines.--In the
case of a failure by an administrative law judge to render a
decision by the end of the period described in clause (ii),
the party requesting the hearing may request a review by the
Departmental Appeals Board of the Department of Health and
Human Services, notwithstanding any requirements for a
hearing for purposes of the party's right to such a review.
``(iv) DAB hearing procedure.--In the case of a request
described in clause (iii), the Departmental Appeals Board
shall review the case de novo.
``(C) Policies.--The Secretary shall provide such specific
criteria and guidance, including all applicable national and
local coverage policies and rationale for such policies, as
is necessary to assist the qualified independent contractors
to make informed decisions in considering appeals under this
section. The Secretary shall furnish to the qualified
independent contractors the criteria and guidance described
in this paragraph in a published format, which may be an
electronic format.
``(D) Publication of medicare coverage policies on the
internet.--The Secretary shall publish national and local
coverage policies under this title on an Internet site
maintained by the Secretary.
``(E) Effect of failure to publish policies.--
``(i) National and local coverage policies.--Qualified
independent contractors shall not be bound by any national or
local medicare coverage policy established by the Secretary
that is not published on the Internet site under subparagraph
(D).
``(ii) Other policies.--With respect to policies
established by the Secretary other than the policies
described in clause (i), qualified independent contractors
shall not be bound by such policies if the Secretary does not
furnish to the qualified independent contractor the policies
in a published format consistent with subparagraph (C).
``(3) Continuing education requirement for qualified
independent contractors and administrative law judges.--
``(A) In general.--The Secretary shall provide to each
qualified independent contractor, and, in consultation with
the Commissioner of Social Security, to administrative law
judges that decide appeals of reconsiderations of initial
determinations or other decisions or determinations under
this section, such continuing education with respect to
policies of the Secretary under this title or part B of title
XI as is necessary for such qualified independent contractors
and administrative law judges to make informed decisions with
respect to appeals.
``(B) Monitoring of decisions by qualified independent
contractors and administrative law judges.--The Secretary
shall monitor determinations made by all qualified
independent contractors and administrative law judges under
this section and shall provide continuing education and
training to such qualified independent contractors and
administrative law judges to ensure consistency of
determinations with respect to appeals on similar or related
matters. To ensure such consistency, the Secretary shall
provide for administration and oversight of qualified
independent contractors and, in consultation with the
Commissioner of Social Security, administrative law judges
through a central office of the Department of Health and
Human Services. Such administration and oversight may not be
delegated to regional offices of the Department.
``(4) Dissemination of determinations.--The Secretary shall
establish a methodology under which qualified independent
contractors shall carry out subsection (c)(3)(G).
``(5) Survey.--Not less frequently than every 5 years, the
Secretary shall conduct a survey of a valid sample of
individuals entitled to benefits under this title, providers
of services, and suppliers to determine the satisfaction of
such individuals or entities with the process for appeals of
determinations provided for under this section and education
and training provided by the Secretary with

[[Page H5409]]

respect to that process. The Secretary shall submit to
Congress a report describing the results of the survey, and
shall include any recommendations for administrative or
legislative actions that the Secretary determines
appropriate.
``(6) Report to congress.--The Secretary shall submit to
Congress an annual report describing the number of appeals
for the previous year, identifying issues that require
administrative or legislative actions, and including any
recommendations of the Secretary with respect to such
actions. The Secretary shall include in such report an
analysis of determinations by qualified independent
contractors with respect to inconsistent decisions and an
analysis of the causes of any such inconsistencies.''.
(b) Applicability of Requirements and Limitations on
Liability of Qualified Independent Contractors to
Medicare+Choice Independent Appeals Contractors.--Section
1852(g)(4) of the Social Security Act (42 U.S.C. 1395w-
22(e)(3)) is amended by adding at the end the following:
``The provisions of section 1869(c)(5) shall apply to
independent outside entities under contract with the
Secretary under this paragraph.''.
(c) Conforming Amendment to Review by the Provider
Reimbursement Review Board.--Section 1878(g) of the Social
Security Act (42 U.S.C. 1395oo(g)) is amended by adding at
the end the following new paragraph:
``(3) Findings described in paragraph (1) and
determinations and other decisions described in paragraph (2)
may be reviewed or appealed under section 1869.''.

SEC. 202. PROVISIONS WITH RESPECT TO LIMITATIONS ON LIABILITY
OF BENEFICIARIES.

(a) Expansion of Limitation of Liability Protection for
Beneficiaries With Respect to Medicare Claims Not Paid or
Paid Incorrectly.--
(1) In general.--Section 1879 of the Social Security Act
(42 U.S.C. 1395pp) is amended by adding at the end the
following new subsections:
``(i) Notwithstanding any other provision of this Act, an
individual who is entitled to benefits under this title and
is furnished a service or item is not liable for repayment to
the Secretary of amounts with respect to such benefits--
``(1) subject to paragraph (2), in the case of a claim for
such item or service that is incorrectly paid by the
Secretary; and
``(2) in the case of payments made to the individual by the
Secretary with respect to any claim under paragraph (1), the
individual shall be liable for repayment of such amount only
up to the amount of payment received by the individual from
the Secretary.
``(j)(1) An individual who is entitled to benefits under
this title and is furnished a service or item is not liable
for payment of amounts with respect to such benefits in the
following cases:
``(A) In the case of a benefit for which an initial
determination has not been made by the Secretary under
subsection (a) whether payment may be made under this title
for such benefit.
``(B) In the case of a claim for such item or service that
is--
``(i) improperly submitted by the provider of services or
supplier; or
``(ii) rejected by an entity under contract with the
Secretary to review or pay claims for services and items
furnished under this title, including an entity under
contract with the Secretary under section 1857.
``(2) The limitation on liability under paragraph (1) shall
not apply if the individual signs a waiver provided by the
Secretary under subsection (l) of protections under this
paragraph, except that any such waiver shall not apply in the
case of a denial of a claim for noncompliance with applicable
regulations or procedures under this title or title XI.
``(k) An individual who is entitled to benefits under this
title and is furnished services by a provider of services is
not liable for payment of amounts with respect to such
services prior to noon of the first working day after the
date the individual receives the notice of determination to
discharge and notice of appeal rights under paragraph (1),
unless the following conditions are met:
``(1) The provider of services shall furnish a notice of
discharge and appeal rights established by the Secretary
under subsection (l) to each individual entitled to benefits
under this title to whom such provider of services furnishes
services, upon admission of the individual to the provider of
services and upon notice of determination to discharge the
individual from the provider of services, of the individual's
limitations of liability under this section and rights of
appeal under section 1869.
``(2) If the individual, prior to discharge from the
provider of services, appeals the determination to discharge
under section 1869 not later than noon of the first working
day after the date the individual receives the notice of
determination to discharge and notice of appeal rights under
paragraph (1), the provider of services shall, by the close
of business of such first working day, provide to the
Secretary (or qualified independent contractor under section
1869, as determined by the Secretary) the records required to
review the determination.
``(l) The Secretary shall develop appropriate standard
forms for individuals entitled to benefits under this title
to waive limitation of liability protections under subsection
(j) and to receive notice of discharge and appeal rights
under subsection (k). The forms developed by the Secretary
under this subsection shall clearly and in plain language
inform such individuals of their limitations on liability,
their rights under section 1869(a) to obtain an initial
determination by the Secretary of whether payment may be made
under part A or part B for such benefit, and their rights of
appeal under section 1869(b), and shall inform such
individuals that they may obtain further information or file
an appeal of the determination by use of the toll-free
telephone number (1-800-MEDICAR(E)) (1-800-633-4227)
maintained by the Secretary. The forms developed by the
Secretary under this subsection shall be the only manner in
which such individuals may waive such protections under this
title or title XI.
``(m) An individual who is entitled to benefits under this
title and is furnished an item or service is not liable for
payment of cost sharing amounts of more than $50 with respect
to such benefits unless the individual has been informed in
advance of being furnished the item or service of the
estimated amount of the cost sharing for the item or service
using a standard form established by the Secretary.''.
(2) Conforming amendment.--Section 1870(a) of the Social
Security Act (42 U.S.C. 1395gg(a)) is amended by striking
``Any payment under this title'' and inserting ``Except as
provided in section 1879(i), any payment under this title''.
(b) Inclusion of Beneficiary Liability Information in
Explanation of Medicare Benefits.--Section 1806(a) of the
Social Security Act (42 U.S.C. 1395b-7(a)) is amended--
(1) in paragraph (1), by striking ``and'' at the end;
(2) by redesignating paragraph (2) as paragraph (3); and
(3) by inserting after paragraph (1) the following new
paragraph:
``(2) lists with respect to each item or service furnished
the amount of the individual's liability for payment;'';
(4) in paragraph (3), as so redesignated, by striking the
period at the end and inserting ``; and''; and
(5) by adding at the end the following new paragraph:
``(4) includes the toll-free telephone number (1-800-
MEDICAR(E)) (1-800-633-4227) for information and questions
concerning the statement, liability of the individual for
payment, and appeal rights.''.

SEC. 203. WAIVERS OF LIABILITY FOR COST SHARING AMOUNTS.

Subtitle B--Establishment of Medicare Ombudsman

SEC. 211. ESTABLISHMENT OF MEDICARE OMBUDSMAN FOR BENEFICIARY
ASSISTANCE AND ADVOCACY.

[[Page H5410]]

and community-based consumer organizations, to--
(1) provide information about the medicare program; and
(2) conduct outreach to educate medicare beneficiaries with
respect to manners in which problems under the medicare
program may be resolved or avoided.
(d) Definitions.--In this section:
(1) The term ``medicare beneficiary'' means an individual
entitled to benefits under part A of title XVIII of the
Social Security Act, or enrolled under part B of such title,
or both.
(2) The term ``medicare program'' means the insurance
program established under title XVIII of the Social Security
Act.
(3) The term ``fiscal intermediary'' has the meaning given
such term under section 1816(a) of the Social Security Act
(42 U.S.C. 1395h(a)).
(4) The term ``carrier'' has the meaning given such term
under section 1842(f) of the Social Security Act (42 U.S.C.
1395u(f)).
(5) The term ``Medicare+Choice organization'' has the
meaning given such term under section 1859(a)(1) of the
Social Security Act (42 U.S.C. 1395w-29(a)(1)).
(6) The term ``Secretary'' means the Secretary of Health
and Human Services.