[Congressional Record Volume 146, Number 96 (Friday, July 21, 2000)]
[Senate]
[Pages S7449-S7450]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. BINGAMAN:
  S. 2905. A bill to amend title XVIII of the Social Security Act to 
make improvements to the Medicare+Choice program under part C of the 
Medicare Program; to the Committee on Finance.


          the medicare+choice program improvement act of 2000

  Mr. BINGAMAN. Mr. President, I am pleased to introduce a bill today--
the Medicare+Choice Improvement Act of 2000--that would correct several 
of the inequities in the complex formula that is used to determine 
payment rates for Medicare+Choice plans. As many of my colleagues know, 
the passage of the Balanced Budget Act of 1997 created a new optional 
Medicare+Choice managed care program for the aged and disabled 
beneficiaries of the Medicare program. This new program replaced the 
previous risk program and established a payment structure that was 
designed to reduce the variation across the country by increasing 
payments in areas with traditionally low payments. However, although 
payment variation has been somewhat reduced, substantial payment 
differentials remain nationwide. In New Mexico, for example, the 
Medicare+Choice plan payment for 2000 in Albuquerque is $430.44 monthly 
per beneficiary vs. $814.32 for NYC. Because these payments are so low 
in some places it has caused a devastating result--seniors are being 
dropped in large numbers.
  The bill I am introducing today will correct inequities in the 
current formula that is used to develop payment rates for 
Medicare+Choice managed care plans and keep them as a viable 
alternative to traditional fee-for-service Medicare. Medicare+Choice 
plans are a popular alternative to traditional Medicare fee-for-service 
health care coverage for aged and disabled Americans because they help 
contain the beneficiary's out-of-pocket expenses, coordinate health 
care, and increase important benefits.
  Mr. President, the sad reality is that Medicare+Choice plans are 
suffering financially under the new payment system and are no longer 
able to maintain enrollment of Medicare+Choice beneficiaries.
  As you can see from this chart, New Mexico Medicare+Choice plans have 
announced plans to drop 15,700 beneficiaries from their rolls on 
January 1, 2001.
  And, as you can see from this chart, nationally, the number of Medi-
care+Choice plan beneficiaries that will be dropped on January 1, 2001 
are expected to be 711,000. Since 1999, 735,000 beneficiaries have been 
dropped. This would mean that as of January 1, 2001, 1,445,000 
beneficiaries will have been dropped.
  This is a terrible situation. Even though beneficiaries that are 
dropped from Medicare+Choice plans will revert to traditional Medicare 
and will be able to purchase Medicare supplemental health insurance 
plans, the high cost associated with the purchase of these plans will 
put an additional financial burden on these aged and disabled Americans 
living on fixed incomes. Additionally, they will not have the 
additional health care benefits available to them under Medicare+Choice 
plans, including routine physicals, vision care, and prescription 
drugs.
  Because Medicare+Choice plans are offered by private managed care 
companies and because of their unique structure, these plans were able 
to limit out of pocket expenses, provide additional benefits to 
beneficiaries, and control health care costs to the Federal government.
  As you can see from this chart, Medicare+Choice plans offer a host of 
important benefits and options over and above traditional Medicare. 
These include: prescription drugs, lower cost sharing with a 
catastrophic cap on expenditures, care coordination, routine physicals, 
health education, vision services and, hearing exams/aids.
  Mr. President, the loss of this important health care coverage option 
for the aged and disabled will be devastating for some. This situation 
will probably cause many of those on marginal incomes to lose the 
ability to afford normal living expenses that may effectively require 
them to enroll in Medicaid and state financial assistance programs. If 
a beneficiary, who was dropped from a Medicare+Choice plan, has a fall 
and is admitted into the hospital they will be responsible for all 
deductible expenses and when they are discharged and sent home with a 
doctor's order for physical therapy, occupational therapy and visiting 
nurse service they would be responsible for all Medicare deductibles. 
This event could cost the beneficiary several thousand dollars. This 
acute episode could force a beneficiary living on a marginal income to 
be unable to pay for their deductibles, cease treatment prematurely, or 
even worse, avoid return visits to the doctor until they are in another 
emergency situation. Additionally, they would be forced to enroll on a 
state Medicaid program for the indigent.
  Sadly, Mr. President, the formula that was developed for 
Medicare+Choice plans was intended to address geographic variation in 
the payment rates has gone too far in controlling costs and missed the 
boat with respect to geographic variability. Sure, the goal of managed 
care is to save money for the taxpayer and coordinate quality care for 
the beneficiary, but there is a point at which a health plan cannot 
afford financially to operate. This forces the beneficiary onto 
traditional Medicare with its higher costs for both the taxpayer and 
beneficiary.

  Mr. President, this point has been reached in New Mexico and other 
areas of the country. We may not be able to have Medicare+Choice plans 
take back their dropped beneficiaries but, we can prevent more from 
being dropped by acting favorably on this bill. The bottom line is 
this: As a nation, we need to do all we can to provide a viable option 
to traditional fee-for-service Medicare that provides coordinated 
managed care at a savings to both the beneficiary and the Federal 
Government.
  The bill that I am introducing has provisions to raise the minimum 
payment floor, move to a 50:50 blend rate between local and national 
rates in 2002, set a ten-year phase-in of risk adjustment and allow 
plans to negotiate

[[Page S7450]]

a rate of payment with HCFA regardless of the county-specific rate, as 
long as the negotiated rate does not exceed the national average per-
capita cost, and delay from July to November 2000 the deadline for 
offering and withdrawing Medicare+Choice plans for 2001.
  I urge my colleagues to support this effort and to join me in taking 
an important step toward maintaining Medicare+Choice managed care plans 
as a positive alternative to traditional fee-for-service Medicare, and 
prevent more enrollees from being dropped while we try to reform 
Medicare. We owe it to our nation to take care of our elderly and aged 
citizens and not expose them to more hardship.
  Mr. President, I ask unanimous consent that the text of the bill be 
printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2905

       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+Choice Program Improvement Act of 2000''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Increase in national per capita Medicare+Choice growth 
              percentage in 2001 and 2002.
Sec. 3. Increasing minimum payment amount.
Sec. 4. Allowing movement to 50:50 percent blend in 2002.
Sec. 5. Increased update for payment areas with only one or no 
              Medicare+Choice contracts.
Sec. 6. Permitting higher negotiated rates in certain Medicare+Choice 
              payment areas below national average.
Sec. 7. 10-year phase-in of risk adjustment based on data from all 
              settings.
Sec. 8. Delay from July to October 2000 in deadline for offering and 
              withdrawing Medicare+Choice plans for 2001.

     SEC. 2. 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 (iii), by adding ``and'' at the end;
       (2) by striking clauses (iv) and (v);
       (3) by redesignating clause (vi) as clause (iv); and
       (4) in clause (iv), as so redesignated, by striking ``after 
     2002'' and inserting ``after 2000''.

     SEC. 3. 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, $500.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     apply to years beginning with 2002.

     SEC. 4. 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 at the end the following flush matter:
     ``except that a Medicare+Choice organization may elect to 
     apply subparagraph (F) (rather than subparagraph (E)) for 
     2002.''.

     SEC. 5. 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 
     one 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. 6. 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 preceding 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 2001, 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 Secretary 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 Secretary, 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 this 
     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.''.

     SEC. 7. 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 at the end the following flush matter:
     ``and, beginning in 2004, insofar as such risk adjustment is 
     based on data from all settings, the methodology shall be 
     phased-in in equal increments over a 10-year period, 
     beginning with 2004 or (if later) the first year in which 
     such data is used.''.

     SEC. 8. DELAY FROM JULY TO NOVEMBER 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 November 1, 2000, and any such 
     organization that provided notice of withdrawal of such a 
     plan during 2000 before the date of enactment of this Act may 
     rescind such withdrawal at any time before November 1, 2000.
                                 ______