[Congressional Record Volume 146, Number 112 (Wednesday, September 20, 2000)]
[Senate]
[Pages S8823-S8857]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]

      By Mr. MOYNIHAN (for himself, Mr. Daschle, Mr. Rockefeller, Mr. 
        Breaux, Mr. Graham, Mr. Kerrey, Mr. Robb, Mr. Kennedy, Mr. 
        Akaka, Mr. Bingaman, Mrs. Boxer, Mr. Cleland, Mr. Dodd, Mr. 
        Dorgan, Mr. Edwards, Mr. Hollings, Mr. Inouye, Mr. Johnson, Mr. 
        Kerry, Ms. Landrieu, Mr. Leahy, Mr. Levin, Mrs. Lincoln, Ms. 
        Mikulski, Mr. Miller, Mrs. Murray, Mr. Reed, Mr. Sarbanes, Mr. 
        Schumer, Mr. Torricelli, and Mr. Wellstone):
  S. 3077. A bill to amend the Social Security Act to make corrections 
and refinements in the Medicare, Medicaid, and SCHIP health insurance 
programs, as revised by the Balanced Budget Act of 1997 and the 
Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999, 
and for other purposes; to the Committee on Finance.


                 Balanced Budget Refinement Act of 2000

  Mr. MOYNIHAN. Mr. President, I am pleased to join with Senator 
Daschle and many of my Democratic colleagues in sponsoring the Balanced 
Budget Refinement Act of 2000 (BBRA-2000). First, a few words on the 
genesis of this bill.
  As part of the effort to balance the Federal Budget, the Balanced 
Budget Act of 1997 (BBA) provided for reduction in Medicare payments 
for medical services. At the time of enactment, the Congressional 
Budget Office (CBO) estimated that these provisions would reduce 
Medicare outlays by $112 billion over 5 years. We now know that these 
BBA cuts have been much larger than originally anticipated.
  Hospital industry representatives and other providers of health care 
services have asserted that the magnitude of the reductions are having 
unintended consequences which are seriously impacting the quantity and 
quality of health care services available to our citizens.
  Last year, the Congress address some of those unintended 
consequences, by enacting the Balanced Budget Refinement Act (BBRA), 
which added back $16 billion over 5 years in payments to various 
Medicare providers, including: Teaching Hospitals; Hospital Outpatient 
Departments; Medicare HMOs (Health Maintenance Organizations); Skilled 
Nursing Facilities; Rural Health Providers; and Home Health Agencies.
  However, Members of Congress are continuing to hear from providers 
who argue that the 1997 reductions are still having serious 
unanticipated consequences.
  To respond to these continuing problems, the President last June 
proposed additional BBA relief in the amount of $21 billion over the 
next 5 years. On July 27, Senator Daschle and I announced the outlines 
of a similar, but more substantial, Senate Democratic BBA relief 
package that would provide about $40 billion over 5 years in relief to 
health care providers and beneficiaries. Today, along with many of our 
colleagues, Senator Daschle and I are introducing this package as the 
Balanced Budget Refinement Act of 2000 (BBRA-2000).
  Before I submit for the record a summary of this legislation, I want, 
in particular, to highlight that our legislation would prevent further 
reductions in payments to our Nation's teaching hospitals. The BBA, 
unwisely in my view, enacted a multi-year schedule of cuts in payments 
by Medicare to academic medical centers. These cuts would seriously 
impair the cutting edge research conducted by teaching hospitals, as 
well as impair their ability to train doctors and to serve so many of 
our nation's indigent.
  Last year, in the BBRA, we mitigated the scheduled reductions in 
fiscal years 2000 and 2001. The package we are introducing today, would 
cancel any further reductions in what we call ``Indirect Medical 
Education payments,'' thereby restoring nearly $2.7 billion over 5 
years ($6.9 billion over 10 years) to our Nation's teaching hospitals.
  I have stood before my colleagues on countless occasions to bring 
attention to the financial plight of medical schools and teaching 
hospitals. Yet, I regret that the fate of the 144 accredited medical 
schools and 1416 graduate medical education teaching institutions still 
remains uncertain. The proposals in our Democratic BBRA-2000 package 
will provide critically needed financing in the short-run.
  In the long-run, however, we need to restructure the financing of 
graduate medical education along the lines I have proposed in the 
Graduate Medical Education Trust Fund Act (S. 210). What is needed is 
explicit and dedicated funding for these institutions, which will 
ensure that the United States continues to lead the world in this era 
of medical discovery. The Graduate Medical Education Trust Fund Act 
would require that the public sector, through the Medicare and Medicaid 
programs, and the private sector through an assessment on health 
insurance premiums, provide broad-based financial support for graduate 
medical education. S. 210 would roughly double current funding levels 
for Graduate Medical Education and would establish a Medical Education 
Advisory Commission to make recommendations on the operation of the 
Medical Education Trust Fund, on alternative payment sources for 
funding graduate medical education and teaching hospitals, and on 
policies designed to maintain superior research and educational 
capacities.
  In addition to restoring much needed funding to our Nation's teaching 
hospitals, BBRA-2000 would add back funding in many vital areas of 
health care. Key provisions of the bill we are introducing today would: 
provide full market basket (inflation) adjustments to hospitals for 
2001 and 2002; prevent further reductions in Indirect Medical Education 
(IME) payments to teaching hospitals; target additional relief to rural 
hospitals; eliminate cuts in payments to hospitals for handling large 
numbers of low-income patients (referred to as ``disproportionate share

[[Page S8826]]

(DSH) hospital payments''); repeal the scheduled 15 percent cut in 
payments to home health agencies; provide a full market basket 
(inflation) adjustment to skilled nursing facilities; assist 
beneficiaries through preventive benefits and smaller coinsurance 
payments; provide increased payments to Medicare manager care plans 
(HMOs); and improve eligibility and enrollment processes in Medicaid 
and the State Children's Health Insurance Program (SCHIP).
  Mr. President, I ask unanimous consent that the bill language, a 
summary of the bill, and several letters of support which I send to the 
desk, be placed in the Record at the conclusion of my statement. I 
would like to thank Kyle Kinner and Kirsten Beronio of the minority 
health staff of the Finance Committee for their efforts in assembling 
this legislation.

                                S. 3077

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

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

       (a) Short Title.--This Act may be cited as the ``Medicare, 
     Medicaid, and SCHIP Balanced Budget Refinement Act of 2000''.
       (b) Amendments to Social Security Act.--Except as otherwise 
     specifically provided, whenever in this Act an amendment is 
     expressed in terms of an amendment to or repeal of a section 
     or other provision, the reference shall be considered to be 
     made to that section or other provision of the Social 
     Security Act.
       (c) References to Other Acts.--In this Act:
       (1) The balanced budget act of 1997.--The term ``BBA'' 
     means the Balanced Budget Act of 1997 (Public Law 105-33; 111 
     Stat. 251).
       (2) The medicare, medicaid, and schip balanced budget 
     refinement act of 1999.--The term ``BBRA'' means the 
     Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act 
     of 1999 (113 Stat. 1501A-321), as enacted into law by section 
     1000(a)(6) of Public Law 106-113.
       (d) Table of Contents.--The table of contents of this Act 
     is as follows:

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

                 TITLE I--PROVISIONS RELATING TO PART A

                 Subtitle A--Skilled Nursing Facilities

Sec. 101. Eliminating reduction in skilled nursing facility (SNF) 
              market basket update. 
Sec. 102. Revision of BBRA increase for skilled nursing facilities in 
              fiscal years 2001 and 2002.
Sec. 103. MedPAC study on payment updates for skilled nursing 
              facilities; authority of Secretary to make adjustments.

                       Subtitle B--PPS Hospitals

Sec. 111. Revision of reduction of indirect graduate medical education 
              payments.
Sec. 112. Eliminating reduction in PPS hospital payment update.
Sec. 113. Eliminating reduction in disproportionate share hospital 
              (DSH) payments.
Sec. 114. Equalizing the threshold and updating payment formulas for 
              disproportionate share hospitals.
Sec. 115. Care for low-income patients.
Sec. 116. Modification of payment rate for Puerto Rico hospitals.
Sec. 117. MedPAC study on hospital area wage indexes.

                    Subtitle C--PPS Exempt Hospitals

Sec. 121. Treatment of certain cancer hospitals.
Sec. 122. Payment adjustment for inpatient services in rehabilitation 
              hospitals.

                        Subtitle D--Hospice Care

Sec. 131. Revision in payments for hospice care.

                      Subtitle E--Other Provisions

Sec. 141. Hospitals required to comply with bloodborne pathogens 
              standard.
Sec. 142. Informatics and data systems grant program.
Sec. 143. Relief from medicare part A late enrollment penalty for group 
              buy-in for State and local retirees.

                  Subtitle F--Transitional Provisions

Sec. 151. Reclassification of certain counties and areas for purposes 
              of reimbursement under the medicare program.
Sec. 152. Calculation and application of wage index floor for a certain 
              area.

                TITLE II--PROVISIONS RELATING TO PART B

                Subtitle A--Hospital Outpatient Services

Sec. 201. Reduction of effective HOPD coinsurance rate to 20 percent by 
              2014.
Sec. 202. Application of transitional corridor to certain hospitals 
              that did not submit a 1996 cost report.
Sec. 203. Permanent guarantee of pre-BBA payment levels for outpatient 
              services furnished by children's hospitals.

             Subtitle B--Provisions Relating to Physicians

Sec. 211. Loan deferment for residents.
Sec. 212. GAO studies and reports on medicare payments.
Sec. 213. MedPAC study on the resource-based practice expense system.

                     Subtitle C--Ambulance Services

Sec. 221. Election to forego phase-in of fee schedule for ambulance 
              services.
Sec. 222. Prudent layperson standard for emergency ambulance services.
Sec. 223. Elimination of reduction in inflation adjustments for 
              ambulance services.
Sec. 224. Study and report on the costs of rural ambulance services.
Sec. 225. Interim payments for rural ground ambulance services until 
              regulation implemented.
Sec. 226. GAO study and report on the costs of emergency and medical 
              transportation services.

                    Subtitle D--Preventive Services

Sec. 231. Elimination of deductibles and coinsurance for preventive 
              benefits.
Sec. 232. Counseling for cessation of tobacco use.
Sec. 233. Coverage of glaucoma detection tests.
Sec. 234. Medical nutrition therapy services for beneficiaries with 
              diabetes, a cardiovascular disease, or a renal disease.
Sec. 235. Studies on preventive interventions in primary care for older 
              Americans.
Sec. 236. Institute of Medicine 5-year medicare prevention benefit 
              study and report.
Sec. 237. Fast-track consideration of prevention benefit legislation.

                       Subtitle E--Other Services

Sec. 241. Revision of moratorium in caps for therapy services.
Sec. 242. Revision of coverage of immunosuppressive drugs.
Sec. 243. State accreditation of diabetes self-management training 
              programs.
Sec. 244. Elimination of reduction in payment amounts for durable 
              medical equipment and oxygen and oxygen equipment.
Sec. 245. Standards regarding payment for certain orthotics and 
              prosthetics.
Sec. 246. National limitation amount equal to 100 percent of national 
              median for new pap smear technologies and other new 
              clinical laboratory test technologies.
Sec. 247. Increased medicare payments for certified nurse-midwife 
              services.
Sec. 248. Payment for administration of drugs.
Sec. 249. MedPAC study on in-home infusion therapy nursing services.

            TITLE III--PROVISIONS RELATING TO PARTS A AND B

                    Subtitle A--Home Health Services

Sec. 301. Elimination of 15 percent reduction in payment rates under 
              the prospective payment system for home health services.
Sec. 302. Exclusion of certain nonroutine medical supplies under the 
              PPS for home health services.
Sec. 303. Permitting home health patients with Alzheimer's disease or a 
              related dementia to attend adult day-care.
Sec. 304. Standards for home health branch offices.
Sec. 305. Treatment of home health services provided in certain 
              counties.

             Subtitle B--Direct Graduate Medical Education

Sec. 311. Not counting certain geriatric residents against graduate 
              medical education limitations.
Sec. 312. Program of payments to children's hospitals that operate 
              graduate medical education programs.
Sec. 313. Authority to include costs of training of clinical 
              psychologists in payments to hospitals.
Sec. 314. Treatment of certain newly established residency programs in 
              computing medicare payments for the costs of medical 
              education.

                  Subtitle C--Miscellaneous Provisions

Sec. 321. Waiver of 24-month waiting period for medicare coverage of 
              individuals disabled with amyotrophic lateral sclerosis 
              (ALS).

                  TITLE IV--RURAL PROVIDER PROVISIONS

                 Subtitle A--Critical Access Hospitals

Sec. 401. Payments to critical access hospitals for clinical diagnostic 
              laboratory tests.
Sec. 402. Revision of payment for professional services provided by a 
              critical access hospital.
Sec. 403. Permitting critical access hospitals to operate PPS exempt 
              distinct part psychiatric and rehabilitation units.

[[Page S8827]]

      Subtitle B--Medicare Dependent, Small Rural Hospital Program

Sec. 411. Making the medicare dependent, small rural hospital program 
              permanent.
Sec. 412. Option to base eligibility for medicare dependent, small 
              rural hospital program on discharges during any of the 3 
              most recent audited cost reporting periods.

                  Subtitle C--Sole Community Hospitals

Sec. 421. Extension of option to use rebased target amounts to all sole 
              community hospitals.
Sec. 422. Deeming a certain hospital as a sole community hospital.

              Subtitle D--Other Rural Hospital Provisions

Sec. 431. Exemption of hospital swing-bed program from the PPS for 
              skilled nursing facilities.
Sec. 432. Permanent guarantee of pre-BBA payment levels for outpatient 
              services furnished by rural hospitals.
Sec. 433. Treatment of certain physician pathology services.

                   Subtitle E--Other Rural Provisions

Sec. 441. Revision of bonus payments for services furnished in health 
              professional shortage areas.
Sec. 442. Provider-based rural health clinic cap exemption.
Sec. 443. Payment for certain physician assistant services.
Sec. 444. Bonus payments for rural home health agencies in 2001 and 
              2002.
Sec. 445. Exclusion of clinical social worker services and services 
              performed under a contract with a rural health clinic or 
              federally qualified health center from the PPS for SNFs.
Sec. 446. Coverage of marriage and family therapist services provided 
              in rural health clinics.
Sec. 447. Capital infrastructure revolving loan program.
Sec. 448. Grants for upgrading data systems.
Sec. 449. Relief for financially distressed rural hospitals.
Sec. 450. Refinement of medicare reimbursement for telehealth services.
Sec. 451. MedPAC study on low-volume, isolated rural health care 
              providers.

 TITLE V--PROVISIONS RELATING TO PART C (MEDICARE+CHOICE PROGRAM) AND 
                 OTHER MEDICARE MANAGED CARE PROVISIONS

Sec. 501. Restoring effective date of elections and changes of 
              elections of Medicare+Choice plans.
Sec. 502. Special Medigap enrollment antidiscrimination provision for 
              certain beneficiaries.
Sec. 503. Increase in national per capita Medicare+Choice growth 
              percentage in 2001 and 2002.
Sec. 504. Allowing movement to 50:50 percent blend in 2002.
Sec. 505. Delay from July to November 2000, in deadline for offering 
              and withdrawing Medicare+Choice plans for 2001.
Sec. 506. Amounts in medicare trust funds available for Secretary's 
              share of Medicare+Choice education and enrollment-related 
              costs.
Sec. 507. Revised terms and conditions for extension of medicare 
              community nursing organization (CNO) demonstration 
              project.
Sec. 508. Modification of payment rules for certain frail elderly 
              medicare beneficiaries.

   TITLE VI--PROVISIONS RELATING TO INDIVIDUALS WITH END-STAGE RENAL 
                                DISEASE

Sec. 601. Update in renal dialysis composite rate.
Sec. 602. Revision of payment rates for ESRD patients enrolled in 
              Medicare+Choice plans.
Sec. 603. Permitting ESRD beneficiaries to enroll in another 
              Medicare+Choice plan if the plan in which they are 
              enrolled is terminated.
Sec. 604. Coverage of certain vascular access services for ESRD 
              beneficiaries provided by ambulatory surgical centers.
Sec. 605. Collection and analysis of information on the satisfaction of 
              ESRD beneficiaries with the quality of and access to 
              health care under the medicare program.

   TITLE VII--ACCESS TO CARE IMPROVEMENTS THROUGH MEDICAID AND SCHIP

Sec. 701. New prospective payment system for Federally-qualified health 
              centers and rural health clinics.
Sec. 702. Transitional medical assistance.
Sec. 703. Application of simplified SCHIP procedures under the medicaid 
              program.
Sec. 704. Presumptive eligibility.
Sec. 705. Improvements to the maternal and child health services block 
              grant.
Sec. 706. Improving access to medicare cost-sharing assistance for low-
              income beneficiaries.
Sec. 707. Breast and cervical cancer prevention and treatment.

                      TITLE VIII--OTHER PROVISIONS

Sec. 801. Appropriations for Ricky Ray Hemophilia Relief Fund.
Sec. 802. Increase in appropriations for special diabetes programs for 
              children with type I diabetes and Indians.
Sec. 803. Demonstration grants to improve outreach, enrollment, and 
              coordination of programs and services to homeless 
              individuals and families.
Sec. 804. Protection of an HMO enrollee to receive continuing care at a 
              facility selected by the enrollee.
Sec. 805. Grants to develop and establish real choice systems change 
              initiatives.

                 TITLE I--PROVISIONS RELATING TO PART A

                 Subtitle A--Skilled Nursing Facilities

     SEC. 101. ELIMINATING REDUCTION IN SKILLED NURSING FACILITY 
                   (SNF) MARKET BASKET UPDATE.

       (a) Elimination of Reduction.--Section 1888(e)(4)(E)(ii) 
     (42 U.S.C. 1395yy(e)(4)(E)(ii)) is amended--
       (1) in subclause (I), by adding ``and'' at the end;
       (2) by striking subclause (II); and
       (3) by redesignating subclause (III) as subclause (II).
       (b) Special Rule for Payment for Skilled Nursing Facility 
     Services for Fiscal Year 2001.--Notwithstanding the 
     amendments made by subsection (a), for purposes of making 
     payments for covered skilled nursing facility services under 
     section 1888(e) of the Social Security Act (42 U.S.C. 
     1395yy(e)) for fiscal year 2001, the Federal per diem rate 
     referred to in paragraph (4)(E)(ii) of such section--
       (1) for the period beginning on October 1, 2000, and ending 
     on March 31, 2001, shall be the rate determined in accordance 
     with subclause (II) of such paragraph as in effect on the day 
     before the date of enactment of this Act; and
       (2) for the period beginning on April 1, 2001, and ending 
     on September 30, 2001, shall be the rate computed for fiscal 
     year 2000 pursuant to subclause (I) of such paragraph 
     increased by the skilled nursing facility market basket 
     percentage change for fiscal year 2001 plus 1 percentage 
     point.

     SEC. 102. REVISION OF BBRA INCREASE FOR SKILLED NURSING 
                   FACILITIES IN FISCAL YEARS 2001 AND 2002.

       (a) Revision.--Section 101(d) of BBRA (113 Stat. 1501A-325) 
     is amended--
       (1) in paragraph (1)--
       (A) by striking ``4.0 percent for each such fiscal year'' 
     and inserting ``the applicable percent (as defined in 
     paragraph (3)) for each such fiscal year (or portion of such 
     year)''; and
       (2) by adding at the end the following new paragraph:
       ``(3) Applicable percent defined.--For purposes of this 
     subsection, the term `applicable percent' means, with respect 
     to services provided during--
       ``(A) the period beginning on October 1, 2000, and ending 
     on March 31, 2001, 4.0 percent;
       ``(B) the period beginning on April 1, 2001, and ending on 
     September 30, 2001, 8.0 percent; and
       ``(C) fiscal year 2002, 6.0 percent.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect as if included in the enactment of section 
     101 of BBRA (113 Stat. 1501A-324).

     SEC. 103. MEDPAC STUDY ON PAYMENT UPDATES FOR SKILLED NURSING 
                   FACILITIES; AUTHORITY OF SECRETARY TO MAKE 
                   ADJUSTMENTS.

       (a) Study.--The Medicare Payment Advisory Commission 
     established under section 1805 of the Social Security Act (42 
     U.S.C. 1395b-6) (in this section referred to as ``MedPAC'') 
     shall conduct a study of nursing home costs to determine the 
     adequacy of payment rates (including updates to such rates) 
     under the medicare program under title XVIII of such Act (42 
     U.S.C. 1395 et seq.) (in this section referred to as the 
     ``medicare program'') for items and services furnished by 
     skilled nursing facilities. In conducting such study, MedPAC 
     shall use data on actual costs and cost increases.
       (b) Report.--Not later than 12 months after the date of 
     enactment of this Act, MedPAC shall submit a report to the 
     Secretary of Health and Human Services and Congress on the 
     study conducted under subsection (a), including a description 
     of the methodology and calculations used by the Health Care 
     Financing Administration to establish the original payment 
     level under the prospective payment system for skilled 
     nursing facility services under section 1888(e) of the Social 
     Security Act (42 U.S.C. 1395yy(e)) and to annually update 
     payments under the medicare program for items and services 
     furnished by skilled nursing facilities, together with 
     recommendations regarding methods to ensure that all input 
     variables, including the labor costs, the intensity of 
     services, and the changes in science and technology that are 
     specific to such facilities, are adequately accounted for.
       (c) Authority of Secretary to Make Adjustments.--
     Notwithstanding any other provision of law, the Secretary of 
     Health and Human Services may make adjustments to payments 
     under the prospective payment system under section 1888(e) of 
     the Social Security Act (42 U.S.C. 1395yy(e)) for covered 
     skilled nursing facility services to reflect any necessary 
     adjustments to such payments as is appropriate as a result of 
     the study conducted under subsection (a).

[[Page S8828]]

       (d) Publication.--
       (1) In general.--Not later than April 1, 2002, the 
     Secretary of Health and Human Services shall publish for 
     public comment a description of--
       (A) whether the Secretary will make any adjustments 
     pursuant to subsection (c); and
       (B) if so, the form of such adjustments.
       (2) Final form.--Not later than August 1, 2002, the 
     Secretary of Health and Human Services shall publish the 
     description described in paragraph (1) in final form.

                       Subtitle B--PPS Hospitals

     SEC. 111. REVISION OF REDUCTION OF INDIRECT GRADUATE MEDICAL 
                   EDUCATION PAYMENTS.

       (a) Revision.--
       (1) In general.--Section 1886(d)(5)(B)(ii) (42 U.S.C. 
     1395ww(d)(5)(B)(ii)) is amended--
       (A) in subclause (IV), by adding ``and'' at the end; and
       (B) by striking subclauses (V) and (VI) and inserting the 
     following new subclause:
       ``(V) on or after October 1, 2000, `c' is equal to 1.6.''.
       (2) Technical amendments.--Section 1886(d)(5)(B) (42 U.S.C. 
     1395ww(d)(5)(B)), as amended by paragraph (1), is amended--
       (A) by realigning the left margins of clauses (ii) and (v) 
     so as to align with the left margin of clause (i); and
       (B) by realigning the left margins of subclauses (I) 
     through (V) of clause (ii) appropriately.
       (b) Special Adjustment for Purposes of Maintaining 6.5 
     Percent IME Payment for Fiscal Year 2001.--Notwithstanding 
     paragraph (5)(B)(ii)(V) of section 1886(d) of the Social 
     Security Act (42 U.S.C. 1395ww(d)(5)(B)(ii)(V)), as amended 
     by subsection (a), for purposes of making payments for 
     subsection (d) hospitals (as defined in paragraph (1)(B) of 
     such section) with indirect costs of medical education, the 
     indirect teaching adjustment factor referred to in paragraph 
     (5)(B)(ii) of such section shall be determined--
       (1) for discharges occurring on or after October 1, 2000, 
     and before April 1, 2001, pursuant to such paragraph as in 
     effect on the day before the date of enactment of this Act; 
     and
       (2) for discharges occurring on or after April 1, 2001, and 
     before October 1, 2001, by substituting ``1.66'' for ``1.6'' 
     in subclause (V) of such paragraph (as so amended).
       (c) Conforming Amendment Relating to Determination of 
     Standardized Amount.--Section 1886(d)(2)(C)(i) (42 U.S.C. 
     1395ww(d)(2)(C)(i)) is amended--
       (1) by inserting a comma after ``Balanced Budget Act of 
     1997''; and
       (2) by inserting ``, or any payment under such paragraph 
     resulting from the application of section 111(b) of the 
     Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act 
     of 2000'' after ``Balanced Budget Refinement Act of 1999''.

     SEC. 112. ELIMINATING REDUCTION IN PPS HOSPITAL PAYMENT 
                   UPDATE.

       (a) In General.--Section 1886(b)(3)(B)(i) (42 U.S.C. 
     1395ww(b)(3)(B)(i)) is amended--
       (1) in subclause (XV), by adding ``and'' at the end;
       (2) by striking subclauses (XVI) and (XVII);
       (3) by redesignating subclause (XVIII) as subclause (XVI); 
     and
       (4) in subclause (XVI), as so redesignated, by striking 
     ``fiscal year 2003'' and inserting ``fiscal year 2001''.
       (b) Special Rule for Payment for Inpatient Hospital 
     Services for Fiscal Year 2001.--Notwithstanding the 
     amendments made by subsection (a), for purposes of making 
     payments for fiscal year 2001 for inpatient hospital services 
     furnished by subsection (d) hospitals (as defined in section 
     1886(d)(1)(B) of the Social Security Act (42 U.S.C. 
     1395ww(d)(1)(B))), the ``applicable percentage increase'' 
     referred to in section 1886(b)(3)(B)(i) of such Act (42 
     U.S.C. 1395ww(b)(3)(B)(i))--
       (1) for discharges occurring on or after October 1, 2000, 
     and before April 1, 2001, shall be determined in accordance 
     with subclause (XVI) of such section as in effect on the day 
     before the date of enactment of this Act; and
       (2) for discharges occurring on or after April 1, 2001, and 
     before October 1, 2001, shall be equal to--
       (A) the market basket percentage increase plus 1.1 
     percentage points for hospitals (other than sole community 
     hospitals) in all areas; and
       (B) the market basket percentage increase for sole 
     community hospitals.

     SEC. 113. ELIMINATING REDUCTION IN DISPROPORTIONATE SHARE 
                   HOSPITAL (DSH) PAYMENTS.

       (a) Elimination of Reduction.--
       (1) In general.--Section 1886(d)(5)(F)(ix) (42 U.S.C. 
     1395ww(d)(5)(F)(ix)) is amended--
       (A) in subclause (III), by striking ``during each of fiscal 
     years 2000 and 2001'' and inserting ``during fiscal year 
     2000'';
       (B) by striking subclause (IV);
       (C) by redesignating subclause (V) as subclause (IV); and
       (D) in subclause (IV), as so redesignated, by striking 
     ``during fiscal year 2003'' and inserting ``during fiscal 
     year 2001''.
       (2) Effective date.--The amendments made by this subsection 
     shall apply to discharges occurring on or after October 1, 
     2000.
       (b) Special Rule for DSH Payment for Fiscal Year 2001.--
     Notwithstanding the amendments made by subsection (a)(1), for 
     purposes of making disproportionate share payments for 
     subsection (d) hospitals (as defined in section 1886(d)(1)(B) 
     of the Social Security Act (42 U.S.C. 1395ww(d)(1)(B))) for 
     fiscal year 2001, the additional payment amount otherwise 
     determined under clause (ii) of section 1886(d)(5)(F) of the 
     Social Security Act (42 U.S.C. 1395ww(d)(5)(F))--
       (1) for discharges occurring on or after October 1, 2000, 
     and before April 1, 2001, shall be adjusted as provided by 
     clause (ix)(III) of such section as in effect on the day 
     before the date of enactment of this Act; and
       (2) for discharges occurring on or after April 1, 2001, and 
     before October 1, 2001, shall be increased by 3 percent.
       (c) Conforming Amendments Relating to Determination of 
     Standardized Amount.--Section 1886(d)(2)(C)(iv) (42 U.S.C. 
     1395ww(d)(2)(C)(iv)), is amended--
       (1) by striking ``Act of 1989 or'' and inserting ``Act of 
     1989,''; and
       (2) by inserting ``, or the enactment of section 113(b) of 
     the Medicare, Medicaid, and SCHIP Balanced Budget Refinement 
     Act of 2000'' after ``Omnibus Budget Reconciliation Act of 
     1990''.

     SEC. 114. EQUALIZING THE THRESHOLD AND UPDATING PAYMENT 
                   FORMULAS FOR DISPROPORTIONATE SHARE HOSPITALS.

       (a) Application of Uniform 15 Percent Threshold.--Section 
     1886(d)(5)(F)(v) (42 U.S.C. 1395ww(d)(5)(F)(v)) is amended by 
     striking ``exceeds--'' and all that follows and inserting 
     ``exceeds 15 percent.''.
       (b) Change in Payment Percentage Formulas.--Section 
     1886(d)(5)(F)(viii) (42 U.S.C. 1395ww(d)(5)(F)(viii)) is 
     amended to read as follows:
       ``(viii) The formula used to determine the disproportionate 
     share adjustment percentage for a cost reporting period for a 
     hospital described in subclause (II), (III), or (IV) of 
     clause (iv) is--
       ``(I) in the case of such a hospital with a 
     disproportionate patient percentage (as defined in clause 
     (vi)) that does not exceed 20.2, (P-15)(.65) + 2.5;
       ``(II) in the case of such a hospital with a 
     disproportionate patient percentage (as so defined) that 
     exceeds 20.2 but does not exceed 25.2, (P-20.2)(.825) + 5.88;
       ``(III) except as provided in subclause (IV), in the case 
     of such a hospital with a disproportionate patient percentage 
     (as so defined) that exceeds 25.2, the disproportionate share 
     adjustment percentage = 10; and
       ``(IV) in the case of such a hospital with a 
     disproportionate patient percentage (as so defined) that 
     exceeds 30.0 and that is described in clause (iv)(III), (P-
     30)(.6) + 10;

     where `P' is the hospital's disproportionate patient 
     percentage (as so defined).''.
       (c) Conforming Amendments.--Section 1886(d)(5)(F)(iv) (42 
     U.S.C. 1395ww(d)(5)(F)(iv)) is amended--
       (1) in subclause (I), by striking ``is described in the 
     second sentence of clause (v)'' and inserting ``is located in 
     a rural area and has 500 or more beds'';
       (2) by amending subclause (II) to read as follows:
       ``(II) is located in an urban area and has less than 100 
     beds, or is located in a rural area and has less than 500 
     beds and is not described in subclause (III) or (IV), is 
     equal to the percent determined in accordance with the 
     applicable formula described in clause (viii);'';
       (3) by striking subclauses (III) and (IV);
       (4) by redesignating subclauses (V) and (VI) as subclauses 
     (III) and (IV), respectively;
       (5) in subclause (III) (as so redesignated), by striking 
     ``and is not classified as a sole community hospital under 
     subparagraph (D),''; and
       (6) in subclause (IV) (as so redesignated), by striking 
     ``10 percent'' and inserting ``equal to the percent 
     determined in accordance with the applicable formula 
     described in clause (viii)''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to discharges occurring on or after April 1, 
     2001.

     SEC. 115. CARE FOR LOW-INCOME PATIENTS.

       (a) Freeze in Medicaid DSH Allotments.--
       (1) In general.--Section 1923(f) (42 U.S.C. 1396r-4(f)) is 
     amended--
       (A) by redesignating paragraph (4) as paragraph (5); and
       (B) by inserting after paragraph (3), the following new 
     paragraph:
       ``(4) Special rule for fiscal years 2001 through 2008.--
     With respect to each of fiscal years 2001 through 2008--
       ``(A) paragraph (2) shall be applied--
       ``(i) by substituting--

       ``(I) in the heading, `2001' for `2002';
       ``(II) in the matter preceding the table, `2001 (and the 
     DSH allotment for a State for fiscal year 2001 is the same as 
     the DSH allotment for the State for fiscal year 2000, as 
     determined under the following table)' for `2002'; and

       ``(ii) without regard to the columns in the table relating 
     to FY 01 and FY 02 (fiscal years 2001 and 2002); and
       ``(B) paragraph (3) shall be applied by substituting--
       ``(i) in the heading, `2002' for `2003';
       ``(ii) in subparagraph (A), `2002' for `2003'.''.
       (2) Repeal; applicability.--Effective October 1, 2008, the 
     amendments made by paragraph (1) are repealed and section 
     1923(f) of the Social Security Act (42 U.S.C. 1396r-4(f)) 
     shall be applied and administered as if such amendments had 
     not been enacted.
       (b) Increase in DSH Allotments for the District of 
     Columbia.--
       (1) In general.--Each of the entries in the table in 
     section 1923(f)(2) (42 U.S.C. 1396r-4(f)(2)) relating to the 
     District of Columbia for FY 98 (fiscal year 1998), for FY 99 
     (fiscal year 1999), for FY 00 (fiscal year 2000), for FY

[[Page S8829]]

     01 (fiscal year 2001), and for FY 02 (fiscal year 2002) are 
     amended by striking the amount otherwise specified and 
     inserting ``43.4''.
       (2) Effective date.--The amendments made by paragraph (1) 
     shall take effect as if included in the enactment of section 
     4721(a) of BBA (111 Stat. 511).
       (c) Optional Eligibility of Certain Alien Pregnant Women 
     and Children for Medicaid and SCHIP.--
       (1) Medicaid.--Section 1903(v) (42 U.S.C. 1396b(v)) is 
     amended--
       (A) in paragraph (1), by striking ``paragraph (2)'' and 
     inserting ``paragraphs (2) and (4)''; and
       (B) by adding at the end the following new paragraph:
       ``(4)(A) A State may elect (in a plan amendment under this 
     title) to provide medical assistance under this title, 
     notwithstanding sections 401(a), 402(b), 403, and 421 of the 
     Personal Responsibility and Work Opportunity Reconciliation 
     Act of 1996, for aliens who are lawfully residing in the 
     United States (including battered aliens described in section 
     431(c) of such Act) and who are otherwise eligible for such 
     assistance, within any of the following eligibility 
     categories:
       ``(i) Pregnant women.--Women during pregnancy (and during 
     the 60-day period beginning on the last day of the 
     pregnancy).
       ``(ii) Children.--Children (as defined under such plan), 
     including optional targeted low-income children described in 
     section 1905(u)(2)(B).
       ``(B) In the case of a State that has elected to provide 
     medical assistance to a category of aliens under subparagraph 
     (A), no action may be brought under an affidavit of support 
     against any sponsor of such an alien on the basis of 
     provision of assistance to such category.''.
       (2) SCHIP.--Section 2107(e)(1) (42 U.S.C. 1397gg(e)(1)) is 
     amended by adding at the end the following new subparagraph:
       ``(D) Section 1903(v)(4)(A)(ii) (relating to optional 
     coverage of permanent resident alien children), but only if 
     the State has in effect an election under that same 
     eligibility category for purposes of title XIX.''.
       (3) Effective date.--The amendments made by this section 
     take effect on October 1, 2000, and apply to medical 
     assistance and child health assistance furnished on or after 
     such date.

     SEC. 116. MODIFICATION OF PAYMENT RATE FOR PUERTO RICO 
                   HOSPITALS.

       (a) Modification of Payment Rate.--Section 1886(d)(9)(A) 
     (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,''.
       (b) Special Rule for Payment for Fiscal Year 2001.--
       (1) In general.--Notwithstanding the amendment made by 
     subsection (a), for purposes of making payments for the 
     operating costs of inpatient hospital services of a section 
     1886(d) Puerto Rico hospital for fiscal year 2001, the amount 
     referred to in the matter preceding clause (i) of section 
     1886(d)(9)(A) of the Social Security Act (42 U.S.C. 
     1395ww(d)(9)(A))--
       (A) for discharges occurring on or after October 1, 2000, 
     and before April 1, 2001, shall be determined in accordance 
     with such section as in effect on the day before the date of 
     enactment of this Act; and
       (B) for discharges occurring on or after April 1, 2001, and 
     before October 1, 2001, shall be determined--
       (i) using 0 percent of the Puerto Rico adjusted DRG 
     prospective payment rate referred to in clause (i) of such 
     section; and
       (ii) using 100 percent of the discharge-weighted average 
     referred to in clause (ii) of such section.
       (2) Section 1886(d) puerto rico hospital.--For purposes of 
     this subsection, the term ``section 1886(d) Puerto Rico 
     hospital'' has the meaning given the term ``subsection (d) 
     Puerto Rico hospital'' in the last sentence of section 
     1886(d)(9)(A) of the Social Security Act (42 U.S.C. 
     1395ww(d)(9)(A)).

     SEC. 117. MEDPAC STUDY ON HOSPITAL AREA WAGE INDEXES.

       (a) Study.--
       (1) In general.--The Medicare Payment Advisory Commission 
     established under section 1805 of the Social Security Act (42 
     U.S.C. 1395b-6) (in this section referred to as ``MedPAC'') 
     shall conduct a study on the hospital area wage indexes used 
     in making payments to hospitals under section 1886(d) of the 
     Social Security Act (42 U.S.C. 1395ww(d)), including an 
     assessment of the accuracy of those indexes in reflecting 
     geographic differences in wage and wage-related costs of 
     hospitals.
       (2) Considerations.--In conducting the study under 
     paragraph (1), MedPAC shall consider--
       (A) the appropriate method for determining hospital area 
     wage indexes;
       (B) the appropriate portion of hospital payments that 
     should be adjusted by the applicable area wage index;
       (C) the appropriate method for adjusting the wage index by 
     occupational mix; and
       (D) the feasibility and impact of making changes (as 
     determined appropriate by MedPAC) to the methods used to 
     determine such indexes, including the need for a data system 
     required to implement such changes.
       (b) Report.--Not later than 18 months after the date of 
     enactment of this Act, MedPAC shall submit a report to the 
     Secretary of Health and Human Services and Congress on the 
     study conducted under subsection (a) together with such 
     recommendations for legislation and administrative action as 
     MedPAC determines appropriate.

                    Subtitle C--PPS Exempt Hospitals

     SEC. 121. TREATMENT OF CERTAIN CANCER HOSPITALS.

       (a) In General.--Section 1886(d)(1)(B)(v) of the Social 
     Security Act (42 U.S.C. 1395ww(d)(1)(B)(v)) is amended--
       (1) in subclause (I), by striking ``or'' at the end;
       (2) in subclause (II), by striking the semicolon at the end 
     and inserting ``, or''; and
       (3) by adding at the end the following:
       ``(III) a hospital that was recognized as a clinical cancer 
     research center by the National Cancer Institute of the 
     National Institutes of Health as of February 18, 1998, that 
     has never been reimbursed for inpatient hospital services 
     pursuant to a reimbursement system under a demonstration 
     project under section 1814(b), that is a freestanding 
     facility organized primarily for treatment of and research on 
     cancer and is not a unit of another hospital, that as of the 
     date of enactment of this subclause, is licensed for 162 
     acute care beds, and that demonstrates for the 4-year period 
     ending on June 30, 1999, that at least 50 percent of its 
     total discharges have a principal finding of neoplastic 
     disease, as defined in subparagraph (E);''.
       (b) Conforming Amendment.--Section 1886(d)(1)(E) of the 
     Social Security Act (42 U.S.C. 1395ww(d)(1)(E)) is amended by 
     striking ``For purposes of subparagraph (B)(v)(II)'' and 
     inserting ``For purposes of subclauses (II) and (III) of 
     subparagraph (B)(v)''.
       (c) Payment.--
       (1) Application to cost reporting periods.--Any 
     classification by reason of section 1886(d)(1)(B)(v)(III) of 
     the Social Security Act (as added by subsection (a)) shall 
     apply to 12-month cost reporting periods beginning on or 
     after July 1, 1999.
       (2) Base year.--Notwithstanding the provisions of section 
     1886(b)(3)(E) of such Act (42 U.S.C. 1395ww(b)(3)(E)) or 
     other provisions to the contrary, the base cost reporting 
     period for purposes of determining the target amount for any 
     hospital classified by reason of section 
     1886(d)(1)(B)(v)(III) of such Act (as added by subsection 
     (a)) shall be the 12-month cost reporting period beginning on 
     July 1, 1995.
       (3) Deadline for payments.--Any payments owed to a hospital 
     by reason of this subsection shall be made expeditiously, but 
     in no event later than 1 year after the date of enactment of 
     this Act.

     SEC. 122. PAYMENT ADJUSTMENT FOR INPATIENT SERVICES IN 
                   REHABILITATION HOSPITALS.

       (a) Option To Apply Prospective Payment System During 
     Transition Period.--Section 1886(j)(1)(A) (42 U.S.C. 
     1395ww(j)(1)(A)) is amended in the matter preceding subclause 
     (i) by inserting ``the greater of the prospective payment 
     rate determined in paragraph (3)(A) or'' after ``is equal 
     to''.
       (b) Increase in Prospective Payment Percentage During 
     Transition Period.--Section 1886(j)(1)(A)(ii)(I) (42 U.S.C. 
     1395ww(j)(1)(A)(ii)(I)) is amended by inserting ``102 percent 
     of'' before ``the per unit''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect as if included in the enactment of section 
     4421 of BBA (111 Stat. 410).

                        Subtitle D--Hospice Care

     SEC. 131. REVISION IN PAYMENTS FOR HOSPICE CARE.

       (a) Increase.--Section 1814(i)(1)(C) of the Social Security 
     Act (42 U.S.C. 1395f(i)(1)(C)) is amended--
       (1) in clause (i), by adding at the end the following new 
     sentence: ``With respect to routine home care and other 
     services included in hospice care furnished during fiscal 
     year 2001, the payment rates for such care and services for 
     such fiscal year shall be 110 percent of such rates as would 
     otherwise be in effect for such fiscal year (taking into 
     account the increase under clause (ii) but not taking into 
     account the increase under section 131 of the Medicare, 
     Medicaid, and SCHIP Balanced Budget Refinement Act of 1999), 
     and such payment rates shall be used in determining payments 
     for such care and services furnished in a subsequent fiscal 
     year under clause (ii).''; and
       (2) in clause (ii), by striking ``during a subsequent 
     fiscal year'' and inserting ``during a fiscal year beginning 
     after September 30, 1990''.
       (b) Eliminating Reduction in Update.--Section 
     1814(i)(1)(C)(ii) of the Social Security Act (42 U.S.C. 
     1395f(i)(1)(C)(ii)) is amended--
       (1) in subclause (VI), by striking ``through 2002'' and 
     inserting ``through 2000''; and
       (2) in subclause (VII), by striking ``for a subsequent 
     fiscal year'' and inserting ``for fiscal year 2001 and each 
     subsequent fiscal year''.
       (c) Special Rule for Payment for Hospice Care for Fiscal 
     Year 2001.--Notwithstanding the amendments made by 
     subsections (a) and (b), for purposes of making payments 
     under section 1814(i)(1)(C) of the Social Security Act (42 
     U.S.C. 1395f(i)(1)(C)) for routine home care and other 
     services included in hospice care furnished during fiscal 
     year 2001, such payment rates shall be determined--

[[Page S8830]]

       (1) for the period beginning on October 1, 2000, and ending 
     on March 31, 2001, in accordance with such section as in 
     effect on the day before the date of enactment of this Act; 
     and
       (2) for the period beginning on April 1, 2001, and ending 
     on September 30, 2001--
       (A) by substituting ``120 percent'' for ``110 percent'' in 
     the second sentence of clause (i) of such section (as added 
     by subsection (a)(1)); and
       (B) as if the increase under subclause (ii)(VII) (as 
     amended by subsection (b)) for fiscal year 2001 was equal to 
     the market basket increase for the fiscal year plus 1.0 
     percentage point.

                      Subtitle E--Other Provisions

     SEC. 141. HOSPITALS REQUIRED TO COMPLY WITH BLOODBORNE 
                   PATHOGENS STANDARD.

       (a) Agreements With Hospitals.--Section 1866(a)(1) (42 
     U.S.C. 1395cc(a)(1)) is amended--
       (1) in subparagraph (R), by striking ``and'' at the end;
       (2) in subparagraph (S), by striking the period at the end 
     and inserting ``, and''; and
       (3) by inserting after subparagraph (S) the following new 
     subparagraph:
       ``(T) in the case of hospitals that are not otherwise 
     subject to regulation by the Occupational Safety and Health 
     Administration, to comply with the Bloodborne Pathogens 
     standard under section 1910.1030 of title 29 of the Code of 
     Federal Regulations.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to agreements in effect on or after the date that 
     is 1 year after the date of enactment of this Act.

     SEC. 142. INFORMATICS AND DATA SYSTEMS GRANT PROGRAM.

       (a) Grants to Hospitals.--
       (1) In general.--The Secretary of Health and Human Services 
     (in this section referred to as the ``Secretary'') shall 
     establish a program to make grants to hospitals that have 
     submitted applications in accordance with subsection (c) to 
     assist such hospitals in offsetting the costs related to--
       (A) developing and implementing standardized clinical 
     health care informatics systems designed to improve medical 
     care and reduce adverse events and health care complications 
     resulting from medication errors; and
       (B) establishing data systems to comply with the 
     administrative simplification requirements under part C of 
     title XI of the Social Security Act (42 U.S.C. 1320d et 
     seq.).
       (2) Costs.--For purposes of paragraph (1), the term 
     ``costs'' shall include costs associated with--
       (A) purchasing computer software and hardware; and
       (B) providing education and training to hospital staff on 
     computer information systems.
       (3) Duration.--The authority of the Secretary to make 
     grants under this section shall terminate on September 30, 
     2011.
       (4) Limitation.--A hospital that has received a grant under 
     section 1611 of the Public Health Service Act (as added by 
     section 447 of this Act) is not eligible to receive a grant 
     under this section.
       (b) Special Consideration for Large Urban Hospitals.--In 
     awarding grants under this section, the Secretary shall give 
     special consideration to hospitals located in large urban 
     areas (as defined for purposes of section 1886(d) of the 
     Social Security Act (42 U.S.C. 1395ww(d)).
       (c) Application.--A hospital seeking a grant under this 
     section shall submit an application to the Secretary at such 
     time and in such form and manner as the Secretary specifies.
       (d) Reports.--
       (1) Information.--A hospital receiving a grant under this 
     section shall furnish the Secretary with such information as 
     the Secretary may require to--
       (A) evaluate the project for which the grant is made; and
       (B) ensure that the grant is expended for the purposes for 
     which it is made.
       (2) Timing of submission.--
       (A) Interim reports.--The Secretary shall report to the 
     Committee on Ways and Means of the House of Representatives 
     and the Committee on Finance of the Senate at least annually 
     on the grant program established under this section, 
     including in such report information on the number of grants 
     made, the nature of the projects involved, the geographic 
     distribution of grant recipients, and such other matters as 
     the Secretary deems appropriate.
       (B) Final report.--The Secretary shall submit a final 
     report to such committees not later than 180 days after the 
     completion of all of the projects for which a grant is made 
     under this section.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated from the Federal Hospital Insurance Trust 
     Fund under section 1817 of the Social Security Act (42 U.S.C. 
     1395i) $25,000,000 for each of the fiscal years 2001 through 
     2011 for the purposes of making grants under this section.

     SEC. 143. RELIEF FROM MEDICARE PART A LATE ENROLLMENT PENALTY 
                   FOR GROUP BUY-IN FOR STATE AND LOCAL RETIREES.

       Section 1818(d) (42 U.S.C. 1395i-2(d)) is amended by adding 
     at the end the following new paragraph:
       ``(6)(A) In the case where a State, a political subdivision 
     of a State, or an agency or instrumentality of a State or 
     political subdivision thereof determines to pay, for the life 
     of each individual, the monthly premiums due under paragraph 
     (1) on behalf of each of the individuals in a qualified State 
     or local government retiree group who meets the conditions of 
     subsection (a), the amount of any increase otherwise 
     applicable under section 1839(b) (as modified by subsection 
     (c)(6) of this section) with respect to the monthly premium 
     for benefits under this part for an individual who is a 
     member of such group shall be reduced by the total amount of 
     taxes paid under section 3101(b) of the Internal Revenue Code 
     of 1986 by such individual and under section 3111(b) by the 
     employers of such individual on behalf of such individual 
     with respect to employment (as defined in section 3121(b) of 
     such Code).
       ``(B) For purposes of this paragraph, the term `qualified 
     State or local government retiree group' means all of the 
     individuals who retire prior to a specified date that is 
     before January 1, 2002, from employment in 1 or more 
     occupations or other broad classes of employees of--
       ``(i) the State;
       ``(ii) a political subdivision of the State; or
       ``(iii) an agency or instrumentality of the State or 
     political subdivision of the State.''.

                  Subtitle F--Transitional Provisions

     SEC. 151. RECLASSIFICATION OF CERTAIN COUNTIES AND AREAS FOR 
                   PURPOSES OF REIMBURSEMENT UNDER THE MEDICARE 
                   PROGRAM.

       (a) Fiscal Years 2002 Through 2004.--Notwithstanding any 
     other provision of law, effective for discharges occurring 
     during fiscal years 2002, 2003, and 2004, for purposes of 
     making payments under section 1886(d) of the Social Security 
     Act (42 U.S.C. 1395ww(d))--
       (1) Iredell County, North Carolina is deemed to be located 
     in the Charlotte-Gastonia-Rock Hill, North Carolina-South 
     Carolina Metropolitan Statistical Area; and
       (2) the large urban area of New York, New York is deemed to 
     include Orange County, New York (including hospitals that 
     have been reclassified into such county).

     For purposes of that section, any reclassification under this 
     subsection shall be treated as a decision of the Medicare 
     Geographic Classification Review Board under paragraph (10) 
     of that section.
       (b) Fiscal Years 2001 Through 2003.--Notwithstanding any 
     other provision of law, effective for discharges occurring 
     during fiscal years 2001, 2002, and 2003, for purposes of 
     making payments under section 1886(d) of the Social Security 
     Act (42 U.S.C. 1395ww(d))--
       (1) the Jackson, Michigan Metropolitan Statistical Area is 
     deemed to be located in the Ann Arbor, Michigan Metropolitan 
     Statistical Area;
       (2) Tangipahoa Parish, Louisiana is deemed to be located in 
     the New Orleans, Louisiana Metropolitan Statistical Area; and
       (3) the large urban area of New York, New York is deemed to 
     include Duchess County, New York.

     For purposes of that section, any reclassification under this 
     subsection shall be treated as a decision of the Medicare 
     Geographic Classification Review Board under paragraph (10) 
     of that section.
       (c) Technical Correction to BBRA.--
       (1) In general.--Section 152 of BBRA (113 Stat. 1501A-334) 
     is amended--
       (A) in subsection (a)(2), by inserting ``(including 
     hospitals that have been reclassified into such county)'' 
     after ``such county''; and
       (B) in subsection (b)(2), by inserting ``(including 
     hospitals that have been reclassified into such county)'' 
     after ``Orange County, New York''; and
       (2) Effective date.--The amendments made by paragraph (1) 
     shall take effect as if included in the enactment of section 
     152 of BBRA (113 Stat. 1501A-334).

     SEC. 152. CALCULATION AND APPLICATION OF WAGE INDEX FLOOR FOR 
                   A CERTAIN AREA.

       Notwithstanding any other provision of section 1886(d) of 
     the Social Security Act (42 U.S.C. 1395ww(d)), for discharges 
     occurring during fiscal year 2000, the Secretary of Health 
     and Human Services shall calculate and apply the wage index 
     for the Barnstable-Yarmouth Metropolitan Statistical Area 
     under that section as if the Jordan Hospital were classified 
     in such area for purposes of payment under that section for 
     such fiscal year. Such recalculation shall not affect the 
     wage index for any other area.

                TITLE II--PROVISIONS RELATING TO PART B

                Subtitle A--Hospital Outpatient Services

     SEC. 201. REDUCTION OF EFFECTIVE HOPD COINSURANCE RATE TO 20 
                   PERCENT BY 2019.

       Section 1833(t)(3)(B)(ii) (42 U.S.C. 1395l(t)(3)(B)(ii)) is 
     amended--
       (1) by striking ``If the'' and inserting:

       ``(I) In general.--If the''; and

       (2) by adding at the end the following new subclause:

       ``(II) Accelerated phase-in.--The Secretary shall estimate, 
     prior to January 1, 2002, the unadjusted copayment amount for 
     each such service (or groups of such services). If the 
     Secretary estimates such unadjusted copayment amount to be 
     greater than 20 percent for any such service (or group of 
     such services) on or after January 1, 2019, the Secretary 
     shall, for services furnished beginning on or after January 
     1, 2002, reduce the unadjusted copayment amount for such 
     service (or group of such services) in equal increments each 
     year, from the amount applicable in 2001, by an amount 
     estimated by the Secretary such that the unadjusted copayment 
     amount shall equal 20 percent beginning on or after January 
     1, 2019.''.

[[Page S8831]]

     SEC. 202. APPLICATION OF TRANSITIONAL CORRIDOR TO CERTAIN 
                   HOSPITALS THAT DID NOT SUBMIT A 1996 COST 
                   REPORT.

       (a) In General.--Section 1833(t)(7)(F)(ii)(I) (42 U.S.C. 
     1395l(t)(7)(F)(ii)(I)) is amended by inserting ``(or, in the 
     case of a hospital that did not submit a cost report for such 
     period, during the first cost reporting period ending in a 
     year after 1996 and before 2001 for which the hospital 
     submitted a cost report)'' after ``1996''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect as if included in the enactment of section 
     202 of BBRA.

     SEC. 203. PERMANENT GUARANTEE OF PRE-BBA PAYMENT LEVELS FOR 
                   OUTPATIENT SERVICES FURNISHED BY CHILDREN'S 
                   HOSPITALS.

       (a) In General.--Section 1833(t)(7)(D) (42 U.S.C. 
     1395l(t)(7)(D)), as amended by section 432, is amended--
       (1) in the heading, by inserting ``, children's,'' after 
     ``small rural''; and
       (2) by striking ``section 1886(d)(1)(B)(v)'' and inserting 
     ``clause (iii) or (v) of section 1886(d)(1)(B)''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to services provided on or after the date that is 
     1 year after the date of enactment of this Act.

             Subtitle B--Provisions Relating to Physicians

     SEC. 211. LOAN DEFERMENT FOR RESIDENTS.

       (a) Fairness in Medical Student Loan Financing.--
       (1) Eligibility requirements.--Section 427(a)(2)(C)(iii) of 
     the Higher Education Act of 1965 (20 U.S.C. 
     1077(a)(2)(C)(iii)) is amended by inserting before the 
     semicolon the following: ``, except that for a medical 
     student such period shall not exceed the full initial 
     residency period''.
       (2) Insurance program agreements.--Section 
     428(b)(1)(M)(iii) of the Higher Education Act of 1965 (20 
     U.S.C. 1078(b)(1)(M)(iii)) is amended by inserting before the 
     semicolon the following: ``, except that for a medical 
     student such period shall not exceed the full initial 
     residency period''.
       (3) Deferment eligibility.--Section 455(f)(2)(C) of the 
     Higher Education Act of 1965 (20 U.S.C. 1087e(f)(2)(C)) is 
     amended by inserting before the period the following: ``, 
     except that for a medical student such period shall not 
     exceed the full initial residency period''.
       (4) Contents of loan agreement.--Section 464(c)(2)(A)(iii) 
     of the Higher Education Act of 1965 (20 U.S.C. 
     1087dd(c)(2)(A)(iii)) is amended by inserting before the 
     semicolon the following: ``, except that for a medical 
     student such period shall not exceed the full initial 
     residency period''.
       (b) Fairness in Economic Hardship Determination.--Section 
     435(o)(1)(B) of the Higher Education Act of 1965 (20 U.S.C. 
     1085(o)(1)(B)) is amended to read as follows:
       ``(B) such borrower is working full time and has a Federal 
     educational debt burden that equals or exceeds 20 percent of 
     such borrower's adjusted gross income, and the difference 
     between such borrower's adjusted gross income minus such 
     burden is less than 250 percent of the greater of--
       ``(i) the annual earnings of an individual earning the 
     minimum wage under section 6 of the Fair Labor Standards Act 
     of 1938; or
       ``(ii) the income official poverty line (as defined by the 
     Office of Management and Budget, and revised annually in 
     accordance with section 673(2) of the Community Service Block 
     Grant Act) applicable to a family of 2; or''.

     SEC. 212. GAO STUDIES AND REPORTS ON MEDICARE PAYMENTS.

       (a) GAO Study on HCFA Post-Payment Audit Process.--
       (1) Study.--The Comptroller General of the United States 
     shall conduct a study of the post-payment audit process under 
     the medicare program under title XVIII of the Social Security 
     Act (42 U.S.C. 1395 et seq.) (in this section referred to as 
     the ``medicare program'') as such process applies to 
     physicians, including the proper level of resources that the 
     Health Care Financing Administration should devote to 
     educating physicians regarding--
       (A) coding and billing;
       (B) documentation requirements; and
       (C) the calculation of overpayments.
       (2) Report.--Not later than 18 months after the date of 
     enactment of this Act, the Comptroller General shall submit a 
     report to the Secretary of Health and Human Services and 
     Congress on the study conducted under paragraph (1) together 
     with specific recommendations for changes or improvements in 
     the post-payment audit process described in such paragraph.
       (b) GAO Study on Administration and Oversight.--
       (1) Study.--The Comptroller General of the United States 
     shall conduct a study on the aggregate effects of regulatory, 
     audit, oversight, and paperwork burdens on physicians and 
     other health care providers participating in the medicare 
     program.
       (2) Report.--Not later than 18 months after the date of 
     enactment of this Act, the Comptroller General shall submit a 
     report to the Secretary of Health and Human Services and 
     Congress on the study conducted under paragraph (1) together 
     with recommendations regarding any area in which--
       (A) a reduction in paperwork, an ease of administration, or 
     an appropriate change in oversight and review may be 
     accomplished; or
       (B) additional payments or education are needed to assist 
     physicians and other health care providers in understanding 
     and complying with any legal or regulatory requirements.

     SEC. 213. MEDPAC STUDY ON THE RESOURCE-BASED PRACTICE EXPENSE 
                   SYSTEM.

       (a) Study.--The Medicare Payment Advisory Commission 
     established under section 1805 of the Social Security Act (42 
     U.S.C. 1395b-6) (in this section referred to as ``MedPAC'') 
     shall conduct a study of the refinements to the practice 
     expense relative value units during the transition to a 
     resource-based practice expense system for physician payments 
     under the medicare program under title XVIII of the Social 
     Security Act (42 U.S.C. 1395 et seq.) (in this section 
     referred to as the ``medicare program'').
       (b) Report.--Not later than July 1, 2001, MedPAC shall 
     submit a report to the Secretary of Health and Human Services 
     and Congress on the study conducted under subsection (a) 
     together with recommendations regarding--
       (1) any change or adjustment that is appropriate to ensure 
     full access to a spectrum of care for beneficiaries under the 
     medicare program; and
       (2) the appropriateness of payments to physicians.

                     Subtitle C--Ambulance Services

     SEC. 221. ELECTION TO FOREGO PHASE-IN OF FEE SCHEDULE FOR 
                   AMBULANCE SERVICES.

       Section 1834(l) (42 U.S.C. 1395m(l)) is amended by adding 
     at the end the following new paragraph:
       ``(8) Election to forego phase-in of fee schedule.--
       ``(A) In general.--If the Secretary provides for a phase-in 
     of the fee schedule established under this subsection, a 
     supplier of ambulance services may make an election to 
     receive payments based only on such fee schedule at any time 
     during such phase-in, and the Secretary shall begin to make 
     payments to the supplier based only on such fee schedule not 
     later than the date that is 60 days after the date on which 
     the supplier notifies the Secretary of such election.
       ``(B) Waiver of budget neutrality.--The Secretary shall 
     apply paragraph (3)(A) as if this paragraph had not been 
     enacted.''.

     SEC. 222. PRUDENT LAYPERSON STANDARD FOR EMERGENCY AMBULANCE 
                   SERVICES.

       (a) In General.--Section 1861(s)(7) (42 U.S.C. 1395x(s)(7)) 
     is amended by inserting before the semicolon at the end the 
     following: ``, except that such regulations shall not fail to 
     treat ambulance services as medical and other health services 
     solely because the ultimate diagnosis of the individual 
     receiving the ambulance services results in a conclusion that 
     ambulance services were not necessary, as long as the request 
     for ambulance services is made after the sudden onset of a 
     medical condition that would be classified as an emergency 
     medical condition (as defined in section 1852(d)(3)(B)).''.
       (b) Effective Date.--The amendment made by this section 
     shall apply with respect to ambulance services provided on or 
     after October 1, 2000.

     SEC. 223. ELIMINATION OF REDUCTION IN INFLATION ADJUSTMENTS 
                   FOR AMBULANCE SERVICES.

       Subparagraphs (A) and (B) of section 1834(l)(3) (42 U.S.C. 
     1395m(l)(3)(A)) are each amended by striking ``reduced in the 
     case of 2001 and 2002 by 1.0 percentage points'' and 
     inserting ``increased in the case of 2001 by 1.0 percentage 
     point''.

     SEC. 224. STUDY AND REPORT ON THE COSTS OF RURAL AMBULANCE 
                   SERVICES.

       (a) Study.--The Secretary of Health and Human Services (in 
     this section referred to as the ``Secretary''), in 
     consultation with the Office of Rural Health Policy, shall 
     conduct a study of the means by which rural areas with low 
     population densities can be identified for the purpose of 
     designating areas in which the cost of providing ambulance 
     services would be expected to be higher than similar services 
     provided in more heavily populated areas because of low 
     usage. Such study shall also include an analysis of the 
     additional costs of providing ambulance services in areas 
     designated under the previous sentence.
       (b) Report.--Not later than June 30, 2001, the Secretary 
     shall submit a report to Congress on the study conducted 
     under subsection (a), together with a regulation based on 
     that study which adjusts the fee schedule payment rates for 
     ambulance services provided in low density rural areas based 
     on the increased cost of providing such services in such 
     areas.

     SEC. 225. INTERIM PAYMENTS FOR RURAL GROUND AMBULANCE 
                   SERVICES UNTIL REGULATION IMPLEMENTED.

       (a) Interim Payments.--Section 1834(l) (42 U.S.C. 
     1395m(l)), as amended by section 221, is amended by adding at 
     the end the following new paragraph:
       ``(9) Interim payments for rural ground ambulance 
     services.--Until such time as the fee schedule established 
     under this subsection is modified by the regulation described 
     in section 224(b) of the Medicare, Medicaid, and SCHIP 
     Balanced Budget Refinement Act of 2000, the amount of payment 
     under this subsection for ground ambulance services provided 
     in a rural area (as defined in section 1886(d)(2)(D)) shall 
     be the greater of--
       ``(A) the amount determined under the fee schedule 
     established under this subsection (without regard to any 
     phase-in established pursuant to paragraph (2)(E)); or
       ``(B) the amount that would have been paid for such 
     services if the amendments made by

[[Page S8832]]

     section 4531(b) of the Balanced Budget Act of 1997 had not 
     been enacted;

     as adjusted for inflation in the manner described in 
     paragraph (3)(B). For purposes of this paragraph, an 
     ambulance trip shall be considered to have been provided in a 
     rural area only if the transportation of the patient 
     originated in a rural area.''.
       (b) Conforming Amendments.--Section 1833(a)(1) (42 U.S.C. 
     1395l(a)(1)) is amended--
       (1) in subparagraph (R)--
       (A) by inserting ``except as provided in subparagraph 
     (T),'' before ``with respect''; and
       (B) by striking ``and'' at the end; and
       (2) in subparagraph (S), by striking the semicolon at the 
     end and inserting ``, and (T) with respect to ambulance 
     services described in section 1834(l)(9), the amount paid 
     shall be 80 percent of the lesser of the actual charge for 
     the services or the amount determined under such section;''.
       (c) Effective Date.--The amendments made by this section 
     shall apply with respect to services provided on and after 
     January 1, 2001.

     SEC. 226. GAO STUDY AND REPORT ON THE COSTS OF EMERGENCY AND 
                   MEDICAL TRANSPORTATION SERVICES.

       (a) Study.--The Comptroller General of the United States 
     shall conduct a study of the costs of providing emergency and 
     medical transportation services across the range of acuity 
     levels of conditions for which such transportation services 
     are provided.
       (b) Report.--Not later than 18 months after the date of 
     enactment of this Act, the Comptroller General shall submit a 
     report to the Secretary of Health and Human Services and 
     Congress on the study conducted under subsection (a), 
     together with recommendations for any changes in methodology 
     or payment level necessary to fairly compensate suppliers of 
     emergency and medical transportation services and to ensure 
     the access of beneficiaries under the medicare program under 
     title XVIII of the Social Security Act (42 U.S.C. 1395 et 
     seq.) to such services.

                    Subtitle D--Preventive Services

     SEC. 231. ELIMINATION OF DEDUCTIBLES AND COINSURANCE FOR 
                   PREVENTIVE BENEFITS.

       (a) In General.--Section 1833 (42 U.S.C. 1395l) is amended 
     by inserting after subsection (o) the following new 
     subsection:
       ``(p) Deductibles and Coinsurance Waived for Preventive 
     Benefits.--The Secretary may not require the payment of any 
     deductible or coinsurance under subsection (a) or (b) of any 
     individual enrolled for coverage under this part for any of 
     the following preventive health care items and services:
       ``(1) Blood-testing strips, lancets, and blood glucose 
     monitors for individuals with diabetes described in section 
     1861(n).
       ``(2) Diabetes outpatient self-management training services 
     (as defined in section 1861(qq)(1)).
       ``(3) Pneumococcal, influenza, and hepatitis B vaccines and 
     administration described in section 1861(s)(10).
       ``(4) Screening mammography (as defined in section 
     1861(jj)).
       ``(5) Screening pap smear and screening pelvic exam (as 
     defined in paragraphs (1) and (2) of section 1861(nn), 
     respectively).
       ``(6) Bone mass measurement (as defined in section 
     1861(rr)(1)).
       ``(7) Prostate cancer screening test (as defined in section 
     1861(oo)(1)).
       ``(8) Colorectal cancer screening test (as defined in 
     section 1861(pp)(1)).''.
       (b) Waiver of Coinsurance.--Section 1833(a)(1)(B) (42 
     U.S.C. 1395l(a)(1)(B)) is amended to read as follows: ``(B) 
     with respect to preventive health care items and services 
     described in subsection (p), the amounts paid shall be 100 
     percent of the fee schedule or other basis of payment under 
     this title,''.
       (c) Waiver of Deductible.--Section 1833(b)(1) (42 U.S.C. 
     1395l(b)(1)) is amended to read as follows: ``(1) such 
     deductible shall not apply with respect to preventive health 
     care items and services described in subsection (p),''.
       (d) Adding ``Lancet'' to Definition of DME.--Section 
     1861(n) (42 U.S.C. 1395x(n)) is amended by striking ``blood-
     testing strips and blood glucose monitors'' and inserting 
     ``blood-testing strips, lancets, and blood glucose 
     monitors''.
       (e) Conforming Amendments.--
       (1) Elimination of coinsurance for clinical diagnostic 
     laboratory tests.--Paragraphs (1)(D)(i) and (2)(D)(i) of 
     section 1833(a) (42 U.S.C. 1395l(a)) are each amended--
       (A) by striking ``basis or which'' and inserting ``basis, 
     which''; and
       (B) by inserting ``, or which are described in subsection 
     (p)'' after ``critical access hospital''.
       (2) Elimination of coinsurance for certain dme.--Section 
     1834(a)(1)(A) (42 U.S.C. 1395m(a)(1)(A)) is amended by 
     inserting ``(or 100 percent, in the case of such an item 
     described in section 1833(p))'' after ``80 percent''.
       (3) Elimination of coinsurance for screening mammography.--
     Section 1834(c)(1)(C) (42 U.S.C. 1395m(c)(1)(C)) is amended 
     by striking ``80 percent'' and inserting ``100 percent''.
       (4) Elimination of deductibles and coinsurance for 
     colorectal cancer screening tests.--Section 1834(d) (42 
     U.S.C. 1395m(d)) is amended--
       (A) in paragraph (2)(C)--
       (i) by striking clause (ii);
       (ii) by striking ``Facility payment limit.--'' and all that 
     follows through ``Notwithstanding'' and inserting ``Facility 
     payment limit.--Notwithstanding''; and
       (iii) by redesignating subclauses (I) and (II) as clauses 
     (i) and (ii), respectively; and
       (B) in paragraph (3)(C)--
       (i) by striking clause (ii); and
       (ii) by striking ``Facility payment Limit.--'' and all that 
     follows through ``Notwithstanding'' and inserting ``Facility 
     payment limit.--Notwithstanding''.
       (f) Effective Date.--The amendments made by this section 
     shall apply to items and services furnished on or after July 
     1, 2001.

     SEC. 232. COUNSELING FOR CESSATION OF TOBACCO USE.

       (a) Coverage.--Section 1861(s)(2) (42 U.S.C. 1395x(s)(2)) 
     is amended--
       (1) in subparagraph (S), by striking ``and'' at the end;
       (2) in subparagraph (T), by inserting ``and'' at the end; 
     and
       (3) by adding at the end the following new subparagraph:
       ``(U) counseling for cessation of tobacco use (as defined 
     in subsection (uu)) for individuals who have a history of 
     tobacco use;''.
       (b) Services Described.--Section 1861 (42 U.S.C. 1395x) is 
     amended by adding at the end the following new subsection:

               ``Counseling for Cessation of Tobacco Use

       ``(uu)(1) Except as provided in paragraph (2), the term 
     `counseling for cessation of tobacco use' means diagnostic, 
     therapy, and counseling services for cessation of tobacco use 
     which are furnished--
       ``(A) by or under the supervision of a physician; or
       ``(B) by any other health care professional who is legally 
     authorized to furnish such services under State law (or the 
     State regulatory mechanism provided by State law) of the 
     State in which the services are furnished, as would otherwise 
     be covered if furnished by a physician or as an incident to a 
     physician's professional service.
       ``(2) The term `counseling for cessation of tobacco use' 
     does not include coverage for drugs or biologicals that are 
     not otherwise covered under this title.''.
       (c) Elimination of Cost-Sharing.--
       (1) Elimination of coinsurance.--Section 1833(a)(1) (42 
     U.S.C. 1395l(a)(1)), as amended by section 225(b), is 
     amended--
       (A) by striking ``and'' before ``(T)''; and
       (B) by inserting before the semicolon at the end the 
     following: ``, and (U) with respect to counseling for 
     cessation of tobacco use (as defined in section 1861(uu)), 
     the amount paid shall be 100 percent of the lesser of the 
     actual charge for the services or the amount determined by a 
     fee schedule established by the Secretary for the purposes of 
     this subparagraph''.
       (2) Elimination of deductible.--The first sentence of 
     section 1833(b) (42 U.S.C. 1395l(b)) is amended--
       (A) by striking ``and'' before ``(6)''; and
       (B) by inserting before the period the following: ``, and 
     (7) such deductible shall not apply with respect to 
     counseling for cessation of tobacco use (as defined in 
     section 1861(uu))''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to services furnished on or after July 1, 2001.

     SEC. 233. COVERAGE OF GLAUCOMA DETECTION TESTS.

       (a) In General.--Section 1861 (42 U.S.C. 1395x), as amended 
     by section 232, is amended--
       (1) in subsection (s)(2)--
       (A) in subparagraph (T), by striking ``and'' at the end;
       (B) in subparagraph (U), by inserting ``and'' at the end; 
     and
       (C) by adding at the end the following new subparagraph:
       ``(V) glaucoma detection tests (as defined in subsection 
     (vv));''; and
       (2) by adding at the end the following new subsection:

                       ``Glaucoma Detection Tests

       ``(vv) The term `glaucoma detection test' means all of the 
     following conducted for the purpose of early detection of 
     glaucoma:
       ``(1) A dilated eye examination with an intraocular 
     pressure measurement.
       ``(2) Direct ophthalmoscopy or slit-lamp biomicroscopic 
     examination.''.
       (b) Limitation on Eligibility and Frequency.--Section 1834 
     (42 U.S.C. 1395m) is amended by adding at the end the 
     following new subsection:
       ``(m) Limitation on Coverage of Glaucoma Detection Tests.--
       ``(1) In general.--Notwithstanding any other provision of 
     this part, with respect to expenses incurred for glaucoma 
     detection tests (as defined in section 1861(vv)), payment may 
     be made only for glaucoma detection tests conducted--
       ``(A) for individuals described in paragraph (2); and
       ``(B) consistent with the frequency permitted under 
     paragraph (3).
       ``(2) Individuals eligible for benefit.--Individuals 
     described in this paragraph are as follows:
       ``(A) Individuals who are 60 years of age or older and who 
     have a family history of glaucoma.
       ``(B) Other individuals who are at high risk (as determined 
     by the Secretary) of developing glaucoma.
       ``(3) Frequency limit.--
       ``(A) In general.--Subject to subparagraph (B), payment may 
     not be made under this part for a glaucoma detection test 
     performed for an individual within 23 months following the 
     month in which a glaucoma detection test was performed under 
     this part for the individual.

[[Page S8833]]

       ``(B) Exception.--The Secretary may permit a glaucoma 
     detection test to be covered on a more frequent basis than 
     that provided under subparagraph (A) under such circumstances 
     as the Secretary determines to be appropriate.''.
       (c) No Application of Deductible.--Section 1833(b)(5) (42 
     U.S.C. 1395l(b)(5)) is amended by inserting ``or with respect 
     to glaucoma detection tests (as defined in section 
     1861(vv))'' after ``1861(jj))''.
       (d) Conforming Amendments.--Section 1862(a) (42 U.S.C. 
     1395y(a)) is amended--
       (1) in paragraph (1)--
       (A) in subparagraph (H), by striking ``and'' at the end;
       (B) in subparagraph (I), by striking the semicolon at the 
     end and inserting ``, and''; and
       (C) by adding at the end the following new subparagraph:
       ``(J) in the case of glaucoma detection tests (as defined 
     in section 1861(vv)), which are furnished to an individual 
     not described in paragraph (2) of section 1834(m) or which 
     are performed more frequently than is covered under paragraph 
     (3) of such section;''; and
       (2) in paragraph (7), by striking ``or (H)'' and inserting 
     ``(H), or (I)''.
       (e) Effective Date.--The amendments made by this section 
     apply to tests provided on or after July 1, 2001.

     SEC. 234. MEDICAL NUTRITION THERAPY SERVICES FOR 
                   BENEFICIARIES WITH DIABETES, A CARDIOVASCULAR 
                   DISEASE, OR A RENAL DISEASE.

       (a) Coverage.--Section 1861(s)(2) (42 U.S.C. 1395x(s)(2)), 
     as amended by section 233(a), is amended--
       (1) in subparagraph (U) by striking ``and'' at the end;
       (2) in subparagraph (V) by inserting ``and'' at the end; 
     and
       (3) by adding at the end the following new subparagraph:
       ``(W) medical nutrition therapy services (as defined in 
     subsection (ww)(1)) in the case of a beneficiary with 
     diabetes, a cardiovascular disease (including congestive 
     heart failure, arteriosclerosis, hyperlipidemia, 
     hypertension, and hypercholesterolemia), or a renal 
     disease;''.
       (b) Services Described.--Section 1861 (42 U.S.C. 1395x), as 
     amended by section 233(a), is amended by adding at the end 
     the following new subsection:

``Medical Nutrition Therapy Services; Registered Dietitian or Nutrition 
                              Professional

       ``(ww)(1) The term `medical nutrition therapy services' 
     means nutritional diagnostic, therapy, and counseling 
     services for the purpose of disease management which are 
     furnished by a registered dietitian or nutrition professional 
     (as defined in paragraph (2)) pursuant to a referral by a 
     physician (as defined in subsection (r)(1)).
       ``(2) Subject to paragraph (3), the term `registered 
     dietitian or nutrition professional' means an individual 
     who--
       ``(A) holds a baccalaureate or higher degree granted by a 
     regionally accredited college or university in the United 
     States (or an equivalent foreign degree) with completion of 
     the academic requirements of a program in nutrition or 
     dietetics, as accredited by an appropriate national 
     accreditation organization recognized by the Secretary for 
     this purpose;
       ``(B) has completed at least 900 hours of supervised 
     dietetics practice under the supervision of a registered 
     dietitian or nutrition professional; and
       ``(C)(i) is licensed or certified as a dietitian or 
     nutrition professional by the State in which the services are 
     performed; or
       ``(ii) in the case of an individual in a State that does 
     not provide for such licensure or certification, meets such 
     other criteria as the Secretary establishes.
       ``(3) Subparagraphs (A) and (B) of paragraph (2) shall not 
     apply in the case of an individual who, as of the date of 
     enactment of this subsection, is licensed or certified as a 
     dietitian or nutrition professional by the State in which 
     medical nutrition therapy services are performed.''.
       (c) Payment.--Section 1833(a)(1) (42 U.S.C. 1395l(a)(1)), 
     as amended by section 232(c)(1), is amended--
       (1) by striking ``and'' before ``(U)''; and
       (2) by inserting before the semicolon at the end the 
     following: ``, and (V) with respect to medical nutrition 
     therapy services (as defined in section 1861(ww)), the amount 
     paid shall be 85 percent of the lesser of the actual charge 
     for the services or the amount determined under the fee 
     schedule established under section 1848(b) for the same 
     services if furnished by a physician''.
       (d) Effective Date.--The amendments made by this section 
     apply to services furnished on or after July 1, 2001.

     SEC. 235. STUDIES ON PREVENTIVE INTERVENTIONS IN PRIMARY CARE 
                   FOR OLDER AMERICANS.

       (a) Studies.--The Secretary of Health and Human Services, 
     acting through the United States Preventive Services Task 
     Force, shall conduct a series of studies designed to identify 
     preventive interventions that can be delivered in the primary 
     care setting that are most valuable to older Americans.
       (b) Mission Statement.--The mission statement of the United 
     States Preventive Services Task Force is amended to include 
     the evaluation of services that are of particular relevance 
     to older Americans.
       (c) Report.--Not later than 1 year after the date of 
     enactment of this Act, and annually thereafter, the Secretary 
     of Health and Human Services shall submit a report to 
     Congress on the conclusions of the studies conducted under 
     subsection (a), together with recommendations for such 
     legislation and administrative actions as the Secretary 
     considers appropriate.

     SEC. 236. INSTITUTE OF MEDICINE 5-YEAR MEDICARE PREVENTION 
                   BENEFIT STUDY AND REPORT.

       (a) Study.--
       (1) In general.--The Secretary of Health and Human Services 
     shall contract with the Institute of Medicine of the National 
     Academy of Sciences to conduct a comprehensive study of 
     current literature and best practices in the field of health 
     promotion and disease prevention among medicare beneficiaries 
     including the issues described in paragraph (2) and to submit 
     the report described in subsection (b).
       (2) Issues studied.--The study required under paragraph (1) 
     shall include an assessment of--
       (A) whether each covered benefit is--
       (i) medically effective; and
       (ii) a cost-effective benefit or a cost-saving benefit;
       (B) utilization of covered benefits (including any barriers 
     to or incentives to increase utilization); and
       (C) quality of life issues associated with both health 
     promotion and disease prevention benefits covered under the 
     medicare program and those that are not covered under such 
     program that would affect all medicare beneficiaries.
       (b) Report.--
       (1) In general.--Not later than 5 years after the date of 
     enactment of this section, and every fifth year thereafter, 
     the Institute of Medicine of the National Academy of Sciences 
     shall submit to the President a report that contains a 
     detailed statement of the findings and conclusions of the 
     study conducted under subsection (a) and the recommendations 
     for legislation described in paragraph (2).
       (2) Recommendations for legislation.--The Institute of 
     Medicine of the National Academy of Sciences, in consultation 
     with the Partnership for Prevention, shall develop 
     recommendations in legislative form that--
       (A) prioritize the preventive benefits under the medicare 
     program; and
       (B) modify preventive benefits offered under the medicare 
     program based on the study conducted under subsection (a).
       (c) Transmission to Congress.--
       (1) In general.--On the day on which the report described 
     in subsection (b) is submitted to the President, the 
     President shall transmit the report and recommendations in 
     legislative form described in subsection (b)(2) to Congress.
       (2) Delivery.--Copies of the report and recommendations in 
     legislative form required to be transmitted to Congress under 
     paragraph (1) shall be delivered--
       (A) to both Houses of Congress on the same day;
       (B) to the Clerk of the House of Representatives if the 
     House is not in session; and
       (C) to the Secretary of the Senate if the Senate is not in 
     session.
       (d) Definitions.--In this section:
       (1) Cost-effective benefit.--The term ``cost-effective 
     benefit'' means a benefit or technique that has--
       (A) been subject to peer review;
       (B) been described in scientific journals; and
       (C) demonstrated value as measured by unit costs relative 
     to health outcomes achieved.
       (2) Cost-saving benefit.--The term ``cost-saving benefit'' 
     means a benefit or technique that has--
       (A) been subject to peer review;
       (B) been described in scientific journals; and
       (C) caused a net reduction in health care costs for 
     medicare beneficiaries.
       (3) Medically effective.--The term ``medically effective'' 
     means, with respect to a benefit or technique, that the 
     benefit or technique has been--
       (A) subject to peer review;
       (B) described in scientific journals; and
       (C) determined to achieve an intended goal under normal 
     programmatic conditions.
       (4) Medicare beneficiary.--The term ``medicare 
     beneficiary'' means any individual who is entitled to 
     benefits under part A or enrolled under part B of the 
     medicare program, including any individual enrolled in a 
     Medicare+Choice plan offered by a Medicare+Choice 
     organization under part C of such program.
       (5) Medicare program.--The term ``medicare program'' means 
     the health benefits program under title XVIII of the Social 
     Security Act (42 U.S.C. 1395 et seq.).

     SEC. 237. FAST-TRACK CONSIDERATION OF PREVENTION BENEFIT 
                   LEGISLATION.

       (a) Rules of House of Representatives and Senate.--This 
     section is enacted by Congress--
       (1) as an exercise of the rulemaking power of the House of 
     Representatives and the Senate, respectively, and is deemed a 
     part of the rules of each House of Congress, but--
       (A) is applicable only with respect to the procedure to be 
     followed in that House of Congress in the case of an 
     implementing bill (as defined in subsection (d)); and
       (B) supersedes other rules only to the extent that such 
     rules are inconsistent with this section; and
       (2) with full recognition of the constitutional right of 
     either House of Congress to change the rules (so far as 
     relating to the procedure of that House of Congress) at any 
     time, in the same manner and to the same

[[Page S8834]]

     extent as in the case of any other rule of that House of 
     Congress.
       (b) Introduction and Referral.--
       (1) Introduction.--
       (A) In general.--Subject to paragraph (2), on the day on 
     which the President transmits the report pursuant to section 
     236(c) to the House of Representatives and the Senate, the 
     recommendations in legislative form transmitted by the 
     President with respect to such report shall be introduced as 
     a bill (by request) in the following manner:
       (i) House of representatives.--In the House of 
     Representatives, by the Majority Leader, for himself and the 
     Minority Leader, or by Members of the House of 
     Representatives designated by the Majority Leader and 
     Minority Leader.
       (ii) Senate.--In the Senate, by the Majority Leader, for 
     himself and the Minority Leader, or by Members of the Senate 
     designated by the Majority Leader and Minority Leader.
       (B) Special rule.--If either House of Congress is not in 
     session on the day on which such recommendations in 
     legislative form are transmitted, the recommendations in 
     legislative form shall be introduced as a bill in that House 
     of Congress, as provided in subparagraph (A), on the first 
     day thereafter on which that House of Congress is in session.
       (2) Referral.--Such bills shall be referred by the 
     presiding officers of the respective Houses to the 
     appropriate committee, or, in the case of a bill containing 
     provisions within the jurisdiction of 2 or more committees, 
     jointly to such committees for consideration of those 
     provisions within their respective jurisdictions.
       (c) Consideration.--After the recommendations in 
     legislative form have been introduced as a bill and referred 
     under subsection (b), such implementing bill shall be 
     considered in the same manner as an implementing bill is 
     considered under subsections (d), (e), (f), and (g) of 
     section 151 of the Trade Act of 1974 (19 U.S.C. 2191).
       (d) Implementing Bill Defined.--In this section, the term 
     ``implementing bill'' means only the recommendations in 
     legislative form of the Institute of Medicine of the National 
     Academy of Sciences described in section 236(b)(2), 
     transmitted by the President to the House of Representatives 
     and the Senate under section 236(c), and introduced and 
     referred as provided in subsection (b) as a bill of either 
     House of Congress.
       (e) Counting of Days.--For purposes of this section, any 
     period of days referred to in section 151 of the Trade Act of 
     1974 shall be computed by excluding--
       (1) the days on which either House of Congress is not in 
     session because of an adjournment of more than 3 days to a 
     day certain or an adjournment of Congress sine die; and
       (2) any Saturday and Sunday, not excluded under paragraph 
     (1), when either House is not in session.

                       Subtitle E--Other Services

     SEC. 241. REVISION OF MORATORIUM IN CAPS FOR THERAPY 
                   SERVICES.

       (a) Extension of Moratorium.--Section 1833(g)(4) (42 U.S.C. 
     1395l(g)(4)) is amended by striking ``during 2000 and 2001'' 
     and inserting ``during the period beginning on January 1, 
     2000, and ending on the date that is 18 months after the date 
     the Secretary submits the report required under section 
     4541(d)(2) of the Balanced Budget Act of 1997 to Congress''.
       (b) Extension of Reporting Date.--Section 4541(d)(2) of BBA 
     (42 U.S.C. 1395l note), as amended by section 221(c) of BBRA 
     (113 Stat. 1501A-351), is amended by striking ``January 1, 
     2001'' and inserting ``January 1, 2002''.

     SEC. 242. REVISION OF COVERAGE OF IMMUNOSUPPRESSIVE DRUGS.

       (a) Revision.--
       (1) In general.--Section 1861(s)(2)(J) (42 U.S.C. 
     1395x(s)(2)(J)) is amended to read as follows:
       ``(J) prescription drugs used in immunosuppressive therapy 
     furnished--
       ``(i) on or after the date of enactment of the Medicare, 
     Medicaid, and SCHIP Balanced Budget Refinement Act of 2000 
     and before January 1, 2004, to an individual who has received 
     an organ transplant; and
       ``(ii) on or after January 1, 2004, to an individual who 
     receives an organ transplant for which payment is made under 
     this title, but only in the case of drugs furnished within 36 
     months after the date of the transplant procedure.''.
       (2) Conforming amendments.--
       (A) Extended coverage.--Section 1832 (42 U.S.C. 1395k) is 
     amended--
       (i) by striking subsection (b); and
       (ii) by redesignating subsection (c) as subsection (b).
       (B) Pass-through; report.--Subsections (c) and (d) of 
     section 227 of BBRA (113 Stat. 1501A-355) 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) (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, Medicaid, and SCHIP Balanced 
     Budget Refinement Act of 2000 and before January 1, 2004, 
     this subparagraph shall be applied without regard to any time 
     limitation.''.

     SEC. 243. STATE ACCREDITATION OF DIABETES SELF-MANAGEMENT 
                   TRAINING PROGRAMS.

       Section 1861(qq)(2) of the Social Security Act (42 U.S.C. 
     1395xx(qq)(2)) is amended--
       (1) in the matter preceding subparagraph (A), by striking 
     ``paragraph (1)--'' and inserting ``paragraph (1):'';
       (2) in subparagraph (A)--
       (A) by striking ``a `certified provider' '' and inserting 
     ``A `certified provider' ''; and
       (B) by striking ``; and'' and inserting a period; and
       (3) in subparagraph (B)--
       (A) by striking ``a physician, or such other individual'' 
     and inserting ``(i) A physician, or such other individual'';
       (B) by inserting ``(I)'' before ``meets applicable 
     standards'';
       (C) by inserting ``(II)'' before ``is recognized'';
       (D) by inserting ``, or by a program described in clause 
     (ii),'' after ``recognized by an organization that represents 
     individuals (including individuals under this title) with 
     diabetes''; and
       (E) by adding at the end the following new clause:
       ``(ii) Notwithstanding any reference to `a national 
     accreditation body' in section 1865(b), for purposes of 
     clause (i), a program described in this clause is a program 
     operated by a State for the purposes of accrediting diabetes 
     self-management training programs, if the Secretary 
     determines that such State program has established quality 
     standards that meet or exceed the standards established by 
     the Secretary under clause (i) or the standards originally 
     established by the National Diabetes Advisory Board and 
     subsequently revised as described in clause (i).''.

     SEC. 244. ELIMINATION OF REDUCTION IN PAYMENT AMOUNTS FOR 
                   DURABLE MEDICAL EQUIPMENT AND OXYGEN AND OXYGEN 
                   EQUIPMENT.

       (a) Update for Covered Items.--Section 1834(a)(14)(C) (42 
     U.S.C. 1395m(a)(14)(C)) is amended by striking ``through 
     2002'' and inserting ``through 2000''.
       (b) Orthotics and Prosthetics.--Section 1834(h)(4)(A)(v) 
     (42 U.S.C. 1395m(h)(4)(A)(v)) is amended by striking 
     ``through 2002'' and inserting ``through 2000''.
       (c) Parenteral and Enteral Nutrients, Supplies, and 
     Equipment.--Section 4551(b) of BBA (42 U.S.C. 1395m note) is 
     amended by striking ``through 2002'' and inserting ``through 
     2000''.
       (d) Oxygen and Oxygen Equipment.--Section 1834(a)(9)(B) (42 
     U.S.C. 1395m(a)(9)(B)) is amended--
       (1) in clause (v), by striking ``and'' at the end;
       (2) in clause (vi)--
       (A) by striking ``each subsequent year'' and inserting 
     ``2000''; and
       (B) by striking the period at the end and inserting ``; 
     and''; and
       (3) by adding at the end the following new clause:
       ``(vii) for 2001 and each subsequent year, the amount 
     determined under this subparagraph for the preceding year 
     increased by the covered item update for such subsequent 
     year.''.
       (e) Conforming Amendment.--Section 228 of BBRA (113 Stat. 
     1501A-356) is repealed.

     SEC. 245. STANDARDS REGARDING PAYMENT FOR CERTAIN ORTHOTICS 
                   AND PROSTHETICS.

       (a) Standards.--
       (1) In general.--Section 1834(h)(1) (42 U.S.C. 1395m(h)(1)) 
     is amended by adding at the end the following:
       ``(F) Establishment of standards for certain items.--
       ``(i) In general.--No payment shall be made for an 
     applicable item unless such item is provided by a qualified 
     practitioner or a qualified supplier under the system 
     established by the Secretary under clause (iii). For purposes 
     of the preceding sentence, if a qualified practitioner or a 
     qualified supplier contracts with an entity to provide an 
     applicable item, then no payment shall be made for such item 
     unless the entity is also a qualified supplier.
       ``(ii) Definitions.--In this subparagraph--

       ``(I) Applicable item.--The term `applicable item' means 
     orthotics and prosthetics that require education, training, 
     and experience to custom fabricate such item. Such term does 
     not include shoes and shoe inserts.
       ``(II) Qualified practitioner.--The term `qualified 
     practitioner' means a physician or health professional who 
     meets any of the following requirements:

       ``(aa) The physician or health professional is specifically 
     trained and educated to provide or manage the provision of 
     custom-designed, fabricated, modified, and fitted orthotics 
     and prosthetics, and is either certified by the American 
     Board for Certification in Orthotics and Prosthetics, Inc., 
     certified by the Board for Orthotist/Prosthetist 
     Certification, or credentialed and approved by a program that 
     the Secretary determines, in consultation with appropriate 
     experts in orthotics and prosthetics, has training and 
     education standards that are necessary to provide applicable 
     items.
       ``(bb) The physician or health professional is licensed in 
     orthotics or prosthetics by the State in which the applicable 
     item is supplied, but only if the Secretary determines that 
     the mechanisms used by the State to provide such licensure 
     meet standards determined appropriate by the Secretary.
       ``(cc) The physician or health professional has completed 
     at least 10 years practice in the provision of applicable 
     items. A physician or health professional may not qualify as 
     a qualified practitioner under the preceding sentence with 
     respect to an applicable item if the item was provided on or 
     after January 1, 2005.

[[Page S8835]]

       ``(III) Qualified supplier.--The term `qualified supplier' 
     means any entity that is--

       ``(aa) accredited by the American Board for Certification 
     in Orthotics and Prosthetics, Inc. or the Board for 
     Orthotist/Prosthetist Certification; or
       ``(bb) accredited and approved by a program that the 
     Secretary determines has accreditation and approval standards 
     that are essentially equivalent to those of such Board.
       ``(iii) System.--The Secretary, in consultation with 
     appropriate experts in orthotics and prosthetics, shall 
     establish a system under which the Secretary shall--

       ``(I) determine which items are applicable items and 
     formulate a list of such items;
       ``(II) review the applicable items billed under the coding 
     system established under this title; and
       ``(III) limit payment for applicable items pursuant to 
     clause (i).''.

       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to items provided on or after January 1, 2003.
       (b) Revision of Definition of Orthotics.--
       (1) In general.--Section 1861(s)(9) (42 U.S.C. 1395x(s)(9)) 
     is amended by inserting ``(including such braces that are 
     used in conjunction with, or as components of, other medical 
     or non-medical equipment when provided by a qualified 
     practitioner (as defined in subclause (II) of section 
     1834(h)(1)(F))) or a qualified supplier (as defined in 
     subclause (III) of such section)'' after ``braces''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to items provided on or after January 1, 2003.

     SEC. 246. NATIONAL LIMITATION AMOUNT EQUAL TO 100 PERCENT OF 
                   NATIONAL MEDIAN FOR NEW PAP SMEAR TECHNOLOGIES 
                   AND OTHER NEW CLINICAL LABORATORY TEST 
                   TECHNOLOGIES.

       Section 1833(h)(4)(B)(viii) (42 U.S.C. 
     1395l(h)(4)(B)(viii)) is amended by inserting before the 
     period at the end the following: ``(or 100 percent of such 
     median in the case of a clinical diagnostic laboratory test 
     performed on or after January 1, 2001, that the Secretary 
     determines is a new test for which no limitation amount has 
     previously been established under this subparagraph)''.

     SEC. 247. INCREASED MEDICARE PAYMENTS FOR CERTIFIED NURSE-
                   MIDWIFE SERVICES.

       (a) Amount of Payment.--Section 1833(a)(1)(K) (42 U.S.C. 
     1395l(a)(1)(K)) is amended by striking ``65 percent of the 
     prevailing charge that would be allowed for the same service 
     performed by a physician, or, for services furnished on or 
     after January 1, 1992, 65 percent'' and inserting ``85 
     percent''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to services furnished on or after January 1, 
     2001.

     SEC. 248. PAYMENT FOR ADMINISTRATION OF DRUGS.

       (a) Review of Chemotherapy Administration Practice Expenses 
     RVUs.--The Secretary of Health and Human Services shall 
     review the resource-based practice expense component of 
     relative value units under the physician fee schedule under 
     section 1848 of the Social Security Act (42 U.S.C. 1395w-4) 
     for chemotherapy administration services to determine if such 
     units should be increased.
       (b) More Accurate Chemotherapy Drug Payments Tied to 
     Increases in Chemotherapy Administration Payments.--If the 
     Secretary of Health and Human Services determines, as a 
     result of the review under subsection (a), that the resource-
     based practice expense relative value units for chemotherapy 
     administration services should be increased, the Secretary--
       (1) may implement such increases for such services, but 
     only if the Secretary simultaneously implements more accurate 
     average wholesale prices for chemotherapy drugs (but in no 
     case shall such simultaneous implementation occur prior to 
     January 1, 2002); and
       (2) if the Secretary implements such increases for such 
     services, shall do so without taking into account the 
     requirement under the physician fee schedule under section 
     1848(c)(2)(B)(ii)(II) of the Social Security Act (42 U.S.C. 
     1395w-4(c)(2)(B)(ii)(II)).
       (c) Blood Clotting Drug-Related Activities.--
       (1) Coverage.--Section 1861(s)(2)(I) (42 U.S.C. 
     1395x(s)(2)(I)) is amended--
       (A) by striking ``and'' after ``supervision,''; and
       (B) by inserting the following before the semicolon: ``, 
     and the costs (pursuant to section 1834(n)) incurred by 
     suppliers of such factors''.
       (2) Payments.--Section 1834 (42 U.S.C. 1395m), as amended 
     by section 233(b), is amended by adding at the end the 
     following new subsection:
       ``(n) Payment for Blood Clotting Drug-Related Activities.--
       ``(1) In general.--The Secretary shall make payments in 
     accordance with paragraph (2) to suppliers of blood clotting 
     factors (as described in section 1861(s)(2)(I)) to cover the 
     costs (such as shipping, storage, inventory control, or other 
     costs specified by the Secretary) incurred by such suppliers 
     in furnishing such factors to individuals enrolled under this 
     part.
       ``(2) Payment amount.--The amount of payment for furnishing 
     such blood clotting factors (as so described) shall be an 
     amount equal to 80 percent of the lesser of--
       ``(A) the actual charge for the furnishing of such factors; 
     or
       ``(B) an amount equal to 10 cents (or such other amount 
     determined appropriate by the Secretary) per unit of such 
     factor furnished.''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to blood clotting factors (as described in 
     section 1861(s)(2)(I) of the Social Security Act (42 U.S.C. 
     1395x(s)(2)(I))) furnished on or after the date that the 
     Secretary of Health and Human Services implements more 
     accurate average wholesale prices for such factors.

     SEC. 249. MEDPAC STUDY ON IN-HOME INFUSION THERAPY NURSING 
                   SERVICES.

       (a) Study.--The Medicare Payment Advisory Commission 
     established under section 1805 of the Social Security Act (42 
     U.S.C. 1395b-6) (in this section referred to as ``MedPAC'') 
     shall conduct a study on the provision of in-home infusion 
     therapy nursing services, including a review of any 
     documentation of clinical efficacy for those services and any 
     costs associated with providing those services.
       (b) Report.--Not later than 18 months after the date of 
     enactment of this Act, MedPAC shall submit a report to the 
     Secretary of Health and Human Services and Congress on the 
     study and review conducted under subsection (a) together with 
     recommendations regarding the establishment of a payment 
     methodology for in-home infusion therapy nursing services 
     that ensures the continuing access of beneficiaries under the 
     medicare program under title XVIII of the Social Security Act 
     (42 U.S.C. 1395 et seq.) to those services.

            TITLE III--PROVISIONS RELATING TO PARTS A AND B

                    Subtitle A--Home Health Services

     SEC. 301. ELIMINATION OF 15 PERCENT REDUCTION IN PAYMENT 
                   RATES UNDER THE PROSPECTIVE PAYMENT SYSTEM FOR 
                   HOME HEALTH SERVICES.

       (a) In General.--Section 1895(b)(3)(A) (42 U.S.C. 
     1395fff(b)(3)(A)) is amended to read as follows:
       ``(A) Initial basis.--Under such system the Secretary shall 
     provide for computation of a standard prospective payment 
     amount (or amounts). Such amount (or amounts) shall initially 
     be based on the most current audited cost report data 
     available to the Secretary and shall be computed in a manner 
     so that the total amounts payable under the system for the 
     12-month period beginning on the date the Secretary 
     implements the system shall be equal to the total amount that 
     would have been made if the system had not been in effect and 
     if section 1861(v)(1)(L)(ix) had not been enacted. Each such 
     amount shall be standardized in a manner that eliminates the 
     effect of variations in relative case mix and area wage 
     adjustments among different home health agencies in a budget 
     neutral manner consistent with the case mix and wage level 
     adjustments provided under paragraph (4)(A). Under the 
     system, the Secretary may recognize regional differences or 
     differences based upon whether or not the services or agency 
     are in an urbanized area.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect as if included in the enactment of BBRA.

     SEC. 302. EXCLUSION OF CERTAIN NONROUTINE MEDICAL SUPPLIES 
                   UNDER THE PPS FOR HOME HEALTH SERVICES.

       (a) Exclusion.--
       (1) In general.--Section 1895 (42 U.S.C. 1395fff) is 
     amended by adding at the end the following new subsection:
       ``(e) Exclusion of Nonroutine Medical Supplies.--
       ``(1) In general.--Notwithstanding the preceding provisions 
     of this section, in the case of all nonroutine medical 
     supplies (as defined by the Secretary) furnished by a home 
     health agency during a year (beginning with 2001) for which 
     payment is otherwise made on the basis of the prospective 
     payment amount under this section, payment under this section 
     shall be based instead on the lesser of--
       ``(A) the actual charge for the nonroutine medical supply; 
     or
       ``(B) the amount determined under the fee schedule 
     established by the Secretary for purposes of making payment 
     for such items under part B for nonroutine medical supplies 
     furnished during that year.
       ``(2) Budget neutrality adjustment.--The Secretary shall 
     provide for an appropriate proportional reduction in payments 
     under this section so that beginning with fiscal year 2001, 
     the aggregate amount of such reductions is equal to the 
     aggregate increase in payments attributable to the exclusion 
     effected under paragraph (1).''.
       (2) Conforming amendment.--Section 1895(b)(1) of the Social 
     Security Act (42 U.S.C. 1395fff(b)(1)) is amended by striking 
     ``The Secretary'' and inserting ``Subject to subsection (e), 
     the Secretary''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to supplies furnished on or after January 1, 
     2001.
       (b) Exclusion from Consolidated Billing.--
       (1) In general.--For items provided during the applicable 
     period, the Secretary of Health and Human Services shall 
     administer the medicare program under title XVIII of the 
     Social Security Act (42 U.S.C. 1395 et seq.) as if--

[[Page S8836]]

       (A) section 1842(b)(6)(F) of such Act (42 U.S.C. 
     1395u(b)(6)(F)) was amended by striking ``(including medical 
     supplies described in section 1861(m)(5), but excluding 
     durable medical equipment to the extent provided for in such 
     section)'' and inserting ``(excluding medical supplies and 
     durable medical equipment described in section 1861(m)(5))''; 
     and
       (B) section 1862(a)(21) of such Act (42 U.S.C. 
     1395y(a)(21)) was amended by striking ``(including medical 
     supplies described in section 1861(m)(5), but excluding 
     durable medical equipment to the extent provided for in such 
     section)'' and inserting ``(excluding medical supplies and 
     durable medical equipment described in section 1861(m)(5))''.
       (2) Applicable period defined.--For purposes of paragraph 
     (1), the term ``applicable period'' means the period 
     beginning on January 1, 2001, and ending on the later of--
       (A) the date that is 18 months after the date of enactment 
     of this Act; or
       (B) the date determined appropriate by the Secretary of 
     Health and Human Services.
       (c) Study on Exclusion of Certain Nonroutine Medical 
     Supplies Under the PPS for Home Health Services.--
       (1) Study.--The Secretary of Health and Human Services (in 
     this subsection referred to as the ``Secretary'') shall 
     conduct a study to identify any nonroutine medical supply 
     that may be appropriately and cost-effectively excluded from 
     the prospective payment system for home health services under 
     section 1895 of the Social Security Act (42 U.S.C. 1395fff). 
     Specifically, the Secretary shall consider whether wound care 
     and ostomy supplies should be excluded from such prospective 
     payment system.
       (2) Report.--Not later than 18 months after the date of 
     enactment of this Act, the Secretary shall submit to the 
     committees of jurisdiction of the House of Representatives 
     and the Senate a report on the study conducted under 
     paragraph (1), including a list of any nonroutine medical 
     supplies that should be excluded from the prospective payment 
     system for home health services under section 1895 of the 
     Social Security Act (42 U.S.C. 1395fff).
       (d) Exclusion of Other Nonroutine Medical Supplies.--Upon 
     submission of the report under subsection (c)(2), the 
     Secretary shall (if necessary) revise the definition of 
     nonroutine medical supply, as defined for purposes of section 
     1895(e) (as added by subsection (a)), based on the list of 
     nonroutine medical supplies included in such report.

     SEC. 303. PERMITTING HOME HEALTH PATIENTS WITH ALZHEIMER'S 
                   DISEASE OR A RELATED DEMENTIA TO ATTEND ADULT 
                   DAY-CARE.

       (a) In General.--Sections 1814(a) and 1835(a) of the Social 
     Security Act (42 U.S.C. 1395f(a); 1395n(a)) are each amended 
     in the last sentence by inserting ``(including regularly 
     participating, for the purpose of therapeutic treatment for 
     Alzheimer's disease or a related dementia, in an adult day-
     care program that is licensed, certified, or accredited by a 
     State to furnish adult day-care services in the State)'' 
     before the period.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to items and services provided on or after 
     October 1, 2001.

     SEC. 304. STANDARDS FOR HOME HEALTH BRANCH OFFICES.

       (a) In General.--Section 1861(o) (42 U.S.C. 1395x(o)) is 
     amended by adding at the end the following new sentences: 
     ``For purposes of this subsection, a home health agency may 
     provide services through a single site or through a branch 
     office. For purposes of the preceding sentence, the term 
     `branch office' means a service site for home health services 
     that is controlled and supervised by a home health agency.''.
       (b) Establishment of Standards.--
       (1) In general.--The Secretary of Health and Human Services 
     (in this subsection referred to as the ``Secretary'') shall 
     establish, using a negotiated rulemaking process under 
     subchapter III of chapter 5 of title 5, United States Code, 
     standards for the operation of a branch office (as defined in 
     the last sentence of section 1861(o) of the Social Security 
     Act (42 U.S.C. 1395x(o)), as added by subsection (a)).
       (2) Requirements.--In establishing standards under 
     paragraph (1), the Secretary shall--
       (A) provide for the special treatment of any home health 
     agency or branch office--
       (i) that is located in a frontier area; or
       (ii) with any other special circumstance that the Secretary 
     determines is appropriate; and
       (B) allow the use of technology used by the home health 
     agency to supervise the branch office.
       (3) Consultation.--The Secretary shall establish the 
     regulations under this subsection in consultation with 
     representatives of the home health industry.

     SEC. 305. TREATMENT OF HOME HEALTH SERVICES PROVIDED IN 
                   CERTAIN COUNTIES.

       (a) In General.--Notwithstanding any other provision of 
     law, effective for home health services provided under the 
     prospective payment system under section 1895 of the Social 
     Security Act (42 U.S.C. 1395fff) during fiscal year 2001 in 
     an applicable county, the geographic adjustment factors 
     applicable in such year to hospitals physically located in 
     such county under section 1886(d) of such Act (42 U.S.C. 
     1395ww(d)) (including the factors applicable to such 
     hospitals by reason of any reclassification or deemed 
     reclassification) shall be deemed to apply to such services 
     instead of the area wage adjustment factors that would 
     otherwise be applicable to such services under section 
     1895(b)(4)(C) of such Act (42 U.S.C. 1395fff(b)(4)(C)).
       (b) Applicable County Defined.--For purposes of subsection 
     (a), the term ``applicable county'' means any of the 
     following counties:
       (1) Duchess County, New York.
       (2) Orange County, New York.
       (3) Clinton County, New York.
       (4) Ulster County, New York.
       (5) Otsego County, New York.
       (6) Cayuga County, New York.
       (7) St. Jefferson County, New York.

             Subtitle B--Direct Graduate Medical Education

     SEC. 311. NOT COUNTING CERTAIN GERIATRIC RESIDENTS AGAINST 
                   GRADUATE MEDICAL EDUCATION LIMITATIONS.

       For cost reporting periods beginning on or after October 1, 
     2000, and before October 1, 2005, in applying the limitations 
     regarding the total number of full-time equivalent interns 
     and residents in the field of allopathic or osteopathic 
     medicine under subsections (d)(5)(B)(v) and (h)(4)(F) of 
     section 1886 of the Social Security Act (42 U.S.C. 1395ww) 
     for a hospital, the Secretary of Health and Human Services 
     shall not take into account a maximum of 3 interns or 
     residents in the field of geriatric medicine to the extent 
     the hospital increases the number of geriatric interns or 
     residents above the number of such interns or residents for 
     the hospital's most recent cost reporting period ending 
     before October 1, 2000.

     SEC. 312. PROGRAM OF PAYMENTS TO CHILDREN'S HOSPITALS THAT 
                   OPERATE GRADUATE MEDICAL EDUCATION PROGRAMS.

       Part A of title XI (42 U.S.C. 1301 et seq.) is amended by 
     adding after section 1150 the following new section:


  ``program of payments to children's hospitals that operate graduate 
                       medical education programs

       ``Sec. 1150A. (a) Payments.--The Secretary shall make 2 
     payments under this section to each children's hospital for 
     each of fiscal years 2002 through 2005, 1 for the direct 
     expenses and the other for the indirect expenses associated 
     with operating approved graduate medical residency training 
     programs.
       ``(b) Amount of Payments.--
       ``(1) In general.--Subject to paragraph (2), the amounts 
     payable under this section to a children's hospital for an 
     approved graduate medical residency training program for a 
     fiscal year are each of the following amounts:
       ``(A) Direct expense amount.--The amount determined under 
     subsection (c) for direct expenses associated with operating 
     approved graduate medical residency training programs.
       ``(B) Indirect expense amount.--The amount determined under 
     subsection (d) for indirect expenses associated with the 
     treatment of more severely ill patients and the additional 
     costs relating to teaching residents in such programs.
       ``(2) Capped amount.--
       ``(A) In general.--The total of the payments made to 
     children's hospitals under subparagraph (A) or (B) of 
     paragraph (1) in a fiscal year shall not exceed the funds 
     appropriated under paragraph (1) or (2), respectively, of 
     subsection (f) for such payments for that fiscal year.
       ``(B) Pro rata reductions of payments for direct 
     expenses.--If the Secretary determines that the amount of 
     funds appropriated under subsection (f)(1) for a fiscal year 
     is insufficient to provide the total amount of payments 
     otherwise due for such periods under paragraph (1)(A), the 
     Secretary shall reduce the amounts so payable on a pro rata 
     basis to reflect such shortfall.
       ``(c) Amount of Payment for Direct Graduate Medical 
     Education.--
       ``(1) In general.--The amount determined under this 
     subsection for payments to a children's hospital for direct 
     graduate expenses relating to approved graduate medical 
     residency training programs for a fiscal year is equal to the 
     product of--
       ``(A) the updated per resident amount for direct graduate 
     medical education, as determined under paragraph (2); and
       ``(B) the average number of full-time equivalent residents 
     in the hospital's graduate approved medical residency 
     training programs (as determined under section 1886(h)(4)) 
     during the fiscal year.
       ``(2) Updated per resident amount for direct graduate 
     medical education.--The updated per resident amount for 
     direct graduate medical education for a hospital for a fiscal 
     year is an amount determined as follows:
       ``(A) Determination of hospital single per resident 
     amount.--The Secretary shall compute for each hospital 
     operating an approved graduate medical education program 
     (regardless of whether or not it is a children's hospital) a 
     single per resident amount equal to the average (weighted by 
     number of full-time equivalent residents) of the primary care 
     per resident amount and the non-primary care per resident 
     amount computed under section 1886(h)(2) for cost reporting 
     periods ending during fiscal year 1997.
       ``(B) Determination of wage and non-wage-related proportion 
     of the single per resident amount.--The Secretary shall 
     estimate the average proportion of the single per resident 
     amounts computed under subparagraph (A) that is attributable 
     to wages and wage-related costs.
       ``(C) Standardizing per resident amounts.--The Secretary 
     shall establish a

[[Page S8837]]

     standardized per resident amount for each such hospital--
       ``(i) by dividing the single per resident amount computed 
     under subparagraph (A) into a wage-related portion and a non-
     wage-related portion by applying the proportion determined 
     under subparagraph (B);
       ``(ii) by dividing the wage-related portion by the factor 
     applied under section 1886(d)(3)(E) for discharges occurring 
     during fiscal year 1999 for the hospital's area; and
       ``(iii) by adding the non-wage-related portion to the 
     amount computed under clause (ii).
       ``(D) Determination of national average.--The Secretary 
     shall compute a national average per resident amount equal to 
     the average of the standardized per resident amounts computed 
     under subparagraph (C) for such hospitals, with the amount 
     for each hospital weighted by the average number of full-time 
     equivalent residents at such hospital.
       ``(E) Application to individual hospitals.--The Secretary 
     shall compute for each such hospital that is a children's 
     hospital a per resident amount--
       ``(i) by dividing the national average per resident amount 
     computed under subparagraph (D) into a wage-related portion 
     and a non-wage-related portion by applying the proportion 
     determined under subparagraph (B);
       ``(ii) by multiplying the wage-related portion by the 
     factor described in subparagraph (C)(ii) for the hospital's 
     area; and
       ``(iii) by adding the non-wage-related portion to the 
     amount computed under clause (ii).
       ``(F) Updating rate.--The Secretary shall update such per 
     resident amount for each such children's hospital by the 
     estimated percentage increase in the Consumer Price Index for 
     all urban consumers (U.S. city average) during the period 
     beginning October 1997, and ending with the midpoint of the 
     Federal fiscal year for which payments are made.
       ``(d) Amount of Payment for Indirect Medical Education.--
       ``(1) In general.--The amount determined under this 
     subsection for payments to a children's hospital for indirect 
     expenses associated with the treatment of more severely ill 
     patients and the additional costs related to the teaching of 
     residents for a fiscal year is equal to an amount determined 
     appropriate by the Secretary.
       ``(2) Factors.--In determining the amount under paragraph 
     (1), the Secretary shall--
       ``(A) take into account variations in case mix and regional 
     wage levels among children's hospitals and the number of 
     full-time equivalent residents in the hospitals' approved 
     graduate medical residency training programs; and
       ``(B) assure that the aggregate of the payments for 
     indirect expenses associated with the treatment of more 
     severely ill patients and the additional costs related to the 
     teaching of residents under this section in a fiscal year are 
     equal to the amount appropriated for such expenses for the 
     fiscal year involved under subsection (f)(2).
       ``(e) Making of Payments.--
       ``(1) Interim payments.--The Secretary shall determine, 
     before the beginning of each fiscal year involved for which 
     payments may be made for a hospital under this section, the 
     amounts of the payments for direct graduate medical education 
     and indirect medical education for such fiscal year and shall 
     (subject to paragraph (2)) make the payments of such amounts 
     in 26 equal interim installments during such period. Such 
     interim payments to each individual hospital shall be based 
     on the number of residents reported in the hospital's most 
     recently filed medicare cost report prior to the application 
     date for the Federal fiscal year for which the interim 
     payment amounts are established.
       ``(2) Withholding.--
       ``(A) In general.--Subject to subparagraph (B), the 
     Secretary shall withhold 25 percent from each interim 
     installment for direct and indirect graduate medical 
     education paid under paragraph (1).
       ``(B) Reduction of withholding.--The Secretary shall reduce 
     the percent withheld from each installment pursuant to 
     subparagraph (A) if the Secretary determines that such 
     reduced percent will provide the Secretary with a reasonable 
     level of assurance that most hospitals will not be overpaid 
     on an interim basis.
       ``(3) Reconciliation.--Prior to the end of each fiscal 
     year, the Secretary shall determine any changes to the number 
     of residents reported by a hospital and shall use that number 
     of residents to determine the final amount payable to the 
     hospital for the current fiscal year for both direct expense 
     and indirect expense amounts. Based on such determination, 
     the Secretary shall recoup any overpayments made or pay any 
     balance due to the extent possible. In the event that a 
     hospital's interim payments were greater than the final 
     amount to which it is entitled, the Secretary shall have the 
     option of recouping that excess amount in determining the 
     amount to be paid in the subsequent year to that hospital. 
     The final amount so determined shall be considered a final 
     intermediary determination for purposes of applying section 
     1878 and shall be subject to review under that section in the 
     same manner as the amount of payment under section 1886(d) is 
     subject to review under such section.
       ``(f) Authorization of Appropriations.--
       ``(1) Direct graduate medical education.--
       ``(A) In general.--There are appropriated, out of any money 
     in the Treasury not otherwise appropriated, for payments 
     under subsection (b)(1)(A) for each of fiscal years 2002 
     through 2005, $95,000,000.
       ``(B) Carryover of excess.--The amounts appropriated under 
     subparagraph (A) for each fiscal year shall remain available 
     for obligation through the end of the subsequent fiscal year.
       ``(2) Indirect medical education.--There are appropriated, 
     out of any money in the Treasury not otherwise appropriated, 
     for payments under subsection (b)(1)(A) for each of fiscal 
     years 2002 through 2005, $190,000,000.
       ``(g) Definitions.--In this section:
       ``(1) Approved graduate medical residency training 
     program.--The term `approved graduate medical residency 
     training program' has the meaning given the term `approved 
     medical residency training program' in section 1886(h)(5)(A).
       ``(2) Children's hospital.--The term `children's hospital' 
     means a hospital with a medicare payment agreement and which 
     is excluded from the medicare inpatient prospective payment 
     system pursuant to section 1886(d)(1)(B)(iii) and its 
     accompanying regulations.
       ``(3) Direct graduate medical education costs.--The term 
     `direct graduate medical education costs' has the meaning 
     given such term in section 1886(h)(5)(C).''.

     SEC. 313. AUTHORITY TO INCLUDE COSTS OF TRAINING OF CLINICAL 
                   PSYCHOLOGISTS IN PAYMENTS TO HOSPITALS.

       Effective for cost reporting periods beginning on or after 
     October 1, 1999, for purposes of payments to hospitals under 
     the medicare program under title XVIII of the Social Security 
     Act (42 U.S.C. 1395 et seq.) for costs of approved 
     educational activities (as defined in section 413.85 of title 
     42 of the Code of Federal Regulations), such approved 
     educational activities shall include the clinical portion of 
     professional educational training programs, recognized by the 
     Secretary, for clinical psychologists.

     SEC. 314. TREATMENT OF CERTAIN NEWLY ESTABLISHED RESIDENCY 
                   PROGRAMS IN COMPUTING MEDICARE PAYMENTS FOR THE 
                   COSTS OF MEDICAL EDUCATION.

       (a) In General.--Section 1886(h)(4)(H) (42 U.S.C. 
     1395ww(h)(4)(H)) is amended by adding at the end the 
     following new clause:
       ``(v) Treatment of certain newly established programs.--Any 
     hospital that has received payments under this subsection for 
     a cost reporting period ending before January 1, 1995, and 
     that operates an approved medical residency training program 
     established on or after August 5, 1997, shall be treated as 
     meeting the requirements for an adjustment under the rules 
     prescribed pursuant to clause (i) with respect to such 
     program if--

       ``(I) such program received accreditation from the American 
     Council of Graduate Medical Education not later than August 
     5, 1998;
       ``(II) such program was in operation (with 1 or more 
     residents in training) as of January 1, 2000;
       ``(III) such hospital is located in an area that is 
     contiguous to a rural area and serves individuals from such 
     rural area; and
       ``(IV) such hospital serves a medical service area with a 
     population that is less than 500,000.''.

       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect as if included in the enactment of section 
     4623 of BBA (111 Stat. 477).

                  Subtitle C--Miscellaneous Provisions

     SEC. 321. WAIVER OF 24-MONTH WAITING PERIOD FOR MEDICARE 
                   COVERAGE OF INDIVIDUALS DISABLED WITH 
                   AMYOTROPHIC LATERAL SCLEROSIS (ALS).

       (a) In General.--Section 226 (42 U.S.C. 426) is amended--
       (1) by redesignating subsection (h) as subsection (j) and 
     by moving such subsection to the end of the section; and
       (2) by inserting after subsection (g) the following new 
     subsection:
       ``(h) For purposes of applying this section in the case of 
     an individual medically determined to have amyotrophic 
     lateral sclerosis (ALS), the following special rules apply:
       ``(1) Subsection (b) shall be applied as if there were no 
     requirement for any entitlement to benefits, or status, for a 
     period longer than 1 month.
       ``(2) The entitlement under such subsection shall begin 
     with the first month (rather than twenty-fifth month) of 
     entitlement or status.
       ``(3) Subsection (f) shall not be applied.''.
       (b) Conforming Amendment.--Section 1837 (42 U.S.C. 1395p) 
     is amended by adding at the end the following new subsection:
       ``(j) In applying this section in the case of an individual 
     who is entitled to benefits under part A pursuant to the 
     operation of section 226(h), the following special rules 
     apply:
       ``(1) The initial enrollment period under subsection (d) 
     shall begin on the first day of the first month in which the 
     individual satisfies the requirement of section 1836(1).
       ``(2) In applying subsection (g)(1), the initial enrollment 
     period shall begin on the first day of the first month of 
     entitlement to disability insurance benefits referred to in 
     such subsection.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to benefits for months beginning after the date 
     of enactment of this Act.

[[Page S8838]]

                  TITLE IV--RURAL PROVIDER PROVISIONS

                 Subtitle A--Critical Access Hospitals

     SEC. 401. PAYMENTS TO CRITICAL ACCESS HOSPITALS FOR CLINICAL 
                   DIAGNOSTIC LABORATORY TESTS.

       (a) Payment on Cost Basis Without Beneficiary Cost-
     Sharing.--
       (1) In general.--Section 1833(a)(6) (42 U.S.C. 1395l(a)(6)) 
     is amended by inserting ``(including clinical diagnostic 
     laboratory services furnished by a critical access 
     hospital)'' after ``outpatient critical access hospital 
     services''.
       (2) No beneficiary cost-sharing.--
       (A) In general.--Section 1834(g) (42 U.S.C. 1395m(g)) is 
     amended by inserting ``(except that in the case of clinical 
     diagnostic laboratory services furnished by a critical access 
     hospital the amount of payment shall be equal to 100 percent 
     of the reasonable costs of the critical access hospital in 
     providing such services)'' before the period at the end.
       (B) BBRA amendment.--Section 1834(g) (42 U.S.C. 1395m(g)), 
     as amended by section 403(d) of BBRA (113 Stat. 1501A-371), 
     is amended--
       (i) in paragraph (1), by inserting ``(except that in the 
     case of clinical diagnostic laboratory services furnished by 
     a critical access hospital the amount of payment shall be 
     equal to 100 percent of the reasonable costs of the critical 
     access hospital in providing such services)'' after ``such 
     services''; and
       (ii) in paragraph (2)(A), by inserting ``(except that in 
     the case of clinical diagnostic laboratory services furnished 
     by a critical access hospital the amount of payment shall be 
     equal to 100 percent of the reasonable costs of the critical 
     access hospital in providing such services)'' before the 
     period at the end.
       (b) Conforming Amendments.--Paragraphs (1)(D)(i) and 
     (2)(D)(i) of section 1833(a) (42 U.S.C. 1395l(a)(1)(D)(i); 
     1395l(a)(2)(D)(i)) are each amended by striking ``or which 
     are furnished on an outpatient basis by a critical access 
     hospital''.
       (c) Technical Amendment.--Section 403(d)(2) of BBRA (113 
     Stat. 1501A-371) is amended by striking ``subsection (a)'' 
     and inserting ``paragraph (1)''.
       (d) Effective Dates.--
       (1) In general.--Except as provided in paragraph (2), the 
     amendments made by this section shall apply to services 
     furnished on or after November 29, 1999.
       (2) BBRA and technical amendments.--The amendments made by 
     subsections (a)(2)(B) and (c) shall take effect as if 
     included in the enactment of section 403(d) of BBRA (113 
     Stat. 1501A-371).

     SEC. 402. REVISION OF PAYMENT FOR PROFESSIONAL SERVICES 
                   PROVIDED BY A CRITICAL ACCESS HOSPITAL.

       (a) In General.--Section 1834(g)(2)(B) (42 U.S.C. 
     1395m(g)(2)(B)), as amended by section 403(d) of BBRA (113 
     Stat. 1501A-371), is amended by inserting ``120 percent of'' 
     after ``hospital services,''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect as if included in the enactment of section 
     403(d) of BBRA (113 Stat. 1501A-371).

     SEC. 403. PERMITTING CRITICAL ACCESS HOSPITALS TO OPERATE PPS 
                   EXEMPT DISTINCT PART PSYCHIATRIC AND 
                   REHABILITATION UNITS.

       (a) Criteria for Designation as a Critical Access 
     Hospital.--Section 1820(c)(2)(B)(iii) (42 U.S.C. 1395i-
     4(c)(2)(B)(iii)) is amended by inserting ``excluding any 
     psychiatric or rehabilitation unit of the facility which is a 
     distinct part of the facility,'' before ``provides not''.
       (b) Definition of PPS Exempt Distinct Part Psychiatric and 
     Rehabilitation Units.--Section 1886(d)(1)(B) (42 U.S.C. 
     1395ww(d)(1)(B)) is amended by inserting before the last 
     sentence the following new sentence: ``In establishing such 
     definition, the Secretary may not exclude from such 
     definition a psychiatric or rehabilitation unit of a critical 
     access hospital which is a distinct part of such hospital 
     solely because such hospital is exempt from the prospective 
     payment system under this section.''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of enactment of this Act.

      Subtitle B--Medicare Dependent, Small Rural Hospital Program

     SEC. 411. MAKING THE MEDICARE DEPENDENT, SMALL RURAL HOSPITAL 
                   PROGRAM PERMANENT.

       (a) Payment Methodology.--Section 1886(d)(5)(G) (42 U.S.C. 
     1395ww(d)(5)(G)) is amended--
       (1) in clause (i), by striking ``and before October 1, 
     2006,''; and
       (2) in clause (ii)(II), by striking ``and before October 1, 
     2006,''.
       (b) Conforming Amendments.--
       (1) Target amount.--Section 1886(b)(3)(D) (42 U.S.C. 
     1395ww(b)(3)(D)) is amended--
       (A) in the matter preceding clause (i), by striking ``and 
     before October 1, 2006,''; and
       (B) in clause (iv), by striking ``through fiscal year 
     2005,'' and inserting ``or any subsequent fiscal year,''.
       (2) Permitting hospitals to decline reclassification.--
     Section 13501(e)(2) of the Omnibus Budget Reconciliation Act 
     of 1993 (42 U.S.C. 1395ww note), as amended by section 
     404(b)(2) of BBRA (113 Stat. 1501A-372), is amended by 
     striking ``or fiscal year 2000 through fiscal year 2005'' and 
     inserting ``fiscal year 2000, or any subsequent fiscal 
     year,''.

     SEC. 412. OPTION TO BASE ELIGIBILITY FOR MEDICARE DEPENDENT, 
                   SMALL RURAL HOSPITAL PROGRAM ON DISCHARGES 
                   DURING ANY OF THE 3 MOST RECENT AUDITED COST 
                   REPORTING PERIODS.

       (a) In General.--Section 1886(d)(5)(G)(iv)(IV) (42 U.S.C. 
     1395ww(d)(5)(G)(iv)(IV)) is amended by inserting ``, or any 
     of the 3 most recent audited cost reporting periods,'' after 
     ``1987''.
       (b) Effective Date.--The amendment made by this section 
     shall apply with respect to cost reporting periods beginning 
     on or after the date of enactment of this Act.

                  Subtitle C--Sole Community Hospitals

     SEC. 421. EXTENSION OF OPTION TO USE REBASED TARGET AMOUNTS 
                   TO ALL SOLE COMMUNITY HOSPITALS.

       (a) In General.--Section 1886(b)(3)(I)(i) (42 U.S.C. 
     1395ww(b)(3)(I)(i)) is amended--
       (1) in the matter preceding subclause (I)--
       (A) by striking ``that for its cost reporting period 
     beginning during 1999 is paid on the basis of the target 
     amount applicable to the hospital under subparagraph (C) and 
     that elects (in a form and manner determined by the 
     Secretary) this subparagraph to apply to the hospital''; and
       (B) by striking ``substituted for such target amount'' and 
     inserting ``substituted, if such substitution results in a 
     greater payment under this section for such hospital, for the 
     amount otherwise determined under subsection (d)(5)(D)(i)'';
       (2) in subclause (I), by striking ``target amount otherwise 
     applicable'' and all that follows through ``target amount')'' 
     and inserting ``the amount otherwise applicable to the 
     hospital under subsection (d)(5)(D)(i) (referred to in this 
     clause as the `subsection (d)(5)(D)(i) amount')''; and
       (3) in each of subclauses (II) and (III), by striking 
     ``subparagraph (C) target amount'' and inserting ``subsection 
     (d)(5)(D)(i) amount''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect as if included in the enactment of section 
     405 of BBRA (113 Stat. 1501A-372).

     SEC. 422. DEEMING A CERTAIN HOSPITAL AS A SOLE COMMUNITY 
                   HOSPITAL.

       Notwithstanding any other provision of law, for purposes of 
     discharges occurring on or after October 1, 2000, the 
     Greensville Memorial Hospital located in Emporia, Virginia 
     shall be deemed to have satisfied the travel and time 
     criteria under section 1886(d)(5)(D)(iii)(II) of the Social 
     Security Act (42 U.S.C. 1395ww(d)(5)(D)(iii)(II)) for 
     classification as a sole community hospital.

              Subtitle D--Other Rural Hospital Provisions

     SEC. 431. EXEMPTION OF HOSPITAL SWING-BED PROGRAM FROM THE 
                   PPS FOR SKILLED NURSING FACILITIES.

       (a) Exemption for Medicare Swing-Bed Hospitals.--
       (1) In general.--Section 1888(e)(7) (42 U.S.C. 
     1395yy(e)(7)(A)) is amended--
       (A) in the heading, by striking ``Transition'' and 
     inserting ``Exemption'';
       (B) by striking subparagraph (A) and inserting the 
     following new subparagraph:
       ``(A) In general.--The prospective payment system under 
     this subsection shall not apply to items and services 
     provided by a facility described in subparagraph (B).''; and
       (C) in subparagraph (B), by striking ``, for which 
     payment'' and all that follows before the period.
       (2) Effective date.--The amendments made by paragraph (1) 
     shall take effect as if included in the enactment of section 
     4432 of BBA (111 Stat. 414).
       (b) Change in Effective Date of BBRA Amendments.--
       (1) In general.--Section 408(c) of BBRA (113 Stat. 1501A-
     375) is amended by striking ``the date that is'' and all that 
     follows and inserting ``January 1, 2001.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect as if included in the enactment of section 
     408 of BBRA (113 Stat. 1501A-375).

     SEC. 432. PERMANENT GUARANTEE OF PRE-BBA PAYMENT LEVELS FOR 
                   OUTPATIENT SERVICES FURNISHED BY RURAL 
                   HOSPITALS.

       (a) In General.--Section 1833(t)(7)(D), as amended by 
     section 203, is amended to read as follows:
       ``(D) Hold harmless provisions for small rural and cancer 
     hospitals.--In the case of a hospital located in a rural area 
     and that has not more than 100 beds or a hospital described 
     in section 1886(d)(1)(B)(v), for covered OPD services for 
     which the PPS amount is less than the pre-BBA amount, the 
     amount of payment under this subsection shall be increased by 
     the amount of such difference.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect as if included in the enactment of section 
     202 of BBRA (111 Stat. 1501A-342).

     SEC. 433. TREATMENT OF CERTAIN PHYSICIAN PATHOLOGY SERVICES.

       (a) In General.--Section 1848(i) (42 U.S.C. 1395w-4(i)) is 
     amended by adding at the end the following new paragraph:
       ``(4) Treatment of certain physician pathology services.--
       ``(A) In general.--Notwithstanding any other provision of 
     law, when an independent laboratory furnishes the technical 
     component of a physician pathology service with respect to a 
     fee-for-service medicare beneficiary who is a patient of a 
     grandfathered hospital, such component shall be treated as a 
     service for which payment shall be made to the laboratory 
     under this section and not as--
       ``(i) an inpatient hospital service for which payment is 
     made to the hospital under section 1886(d); or

[[Page S8839]]

       ``(ii) a hospital outpatient service for which payment is 
     made to the hospital under the prospective payment system 
     under section 1834(t).
       ``(B) Definitions.--In this paragraph:
       ``(i) Grandfathered hospital.--The term `grandfathered 
     hospital' means a hospital that had an arrangement with an 
     independent laboratory--

       ``(I) that was in effect as of July 22, 1999; and
       ``(II) under which the laboratory furnished the technical 
     component of physician pathology services with respect to 
     patients of the hospital and submitted a claim for payment 
     for such component to a carrier with a contract under section 
     1842 (and not to the hospital).

       ``(ii) Fee-for-service medicare beneficiary.--The term 
     `fee-for-service medicare beneficiary' means an individual 
     who is not enrolled--

       ``(I) in a Medicare+Choice plan under part C;
       ``(II) in a plan offered by an eligible organization under 
     section 1876;
       ``(III) with a PACE provider under section 1894;
       ``(IV) in a medicare managed care demonstration project; or
       ``(V) in the case of a service furnished to an individual 
     on an outpatient basis, in a health care prepayment plan 
     under section 1833(a)(1)(A).''.

       (b) Effective Date.--The amendment made by this section 
     shall apply to services furnished on or after January 1, 
     2001.

                   Subtitle E--Other Rural Provisions

     SEC. 441. REVISION OF BONUS PAYMENTS FOR SERVICES FURNISHED 
                   IN HEALTH PROFESSIONAL SHORTAGE AREAS.

       (a) Expansion of Bonus Payments To Include Physician 
     Assistant and Nurse Practitioner Services.--Section 1833(m) 
     (42 U.S.C. 1395l(m)) is amended--
       (1) by inserting ``(or services furnished by a physician 
     assistant or nurse practitioner that would be physicians' 
     services if furnished by a physician)'' after ``physicians' 
     services'';
       (2) by inserting ``, physician assistant (in the case of a 
     physician assistant described in subparagraph (C)(ii) of 
     section 1842(b)(6)), or nurse practitioner'' after 
     ``physician''; and
       (3) by striking ``clause (A) of section 1842(b)(6)'' and 
     inserting ``subparagraphs (A) and (C)(i) of such section''.
       (b) Elimination of Requirement To Make Bonus Payments on 
     Monthly or Quarterly Basis.--Section 1833(m) (42 U.S.C. 
     1395l(m)) is amended by striking ``(on a monthly or quarterly 
     basis)''.
       (c) Effective Dates.--
       (1) In general.--The amendments made by subsection (a) 
     shall apply to services furnished on or after July 1, 2001.
       (2) Monthly or quarterly payments.--The amendment made by 
     subsection (b) shall apply to services furnished on or after 
     the first day of the first calendar quarter beginning at 
     least 240 days after the date of enactment of this Act.

     SEC. 442. PROVIDER-BASED RURAL HEALTH CLINIC CAP EXEMPTION.

       (a) In General.--The matter in section 1833(f) (42 U.S.C. 
     1395l(f)) preceding paragraph (1) is amended by striking 
     ``with less than 50 beds'' and inserting ``with an average 
     daily patient census that does not exceed 50''.
       (b) Effective Date.--The amendment made by subparagraph (A) 
     shall apply to services furnished on or after January 1, 
     2001.

     SEC. 443. PAYMENT FOR CERTAIN PHYSICIAN ASSISTANT SERVICES.

       (a) Payment for Certain Physician Assistant Services.--
     Section 1842(b)(6)(C) (42 U.S.C. 1395u(b)(6)(C)) is amended 
     by striking ``for such services provided before January 1, 
     2003,''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on the date of enactment of this Act.

     SEC. 444. BONUS PAYMENTS FOR RURAL HOME HEALTH AGENCIES IN 
                   2001 AND 2002.

       (a) Increase in Payment Rates for Rural Agencies in 2001 
     and 2002.--Section 1895(b) (42 U.S.C. 1395fff(b)) is amended 
     by adding at the end the following new paragraph:
       ``(7) Additional payment amount for services furnished in 
     rural areas in 2001 and 2002.--In the case of home health 
     services furnished in a rural area (as defined in section 
     1886(d)(2)(D)) during 2001 or 2002, the Secretary shall 
     provide for an addition or adjustment to the payment amount 
     otherwise made under this section for services furnished in a 
     rural area in an amount equal to 10 percent of the amount 
     otherwise determined under this subsection.''.
       (b) Waiving Budget Neutrality.--Section 1895(b)(3) (42 
     U.S.C. 1395fff(b)(3)) is amended by adding at the end the 
     following new subparagraph:
       ``(D) No adjustment for additional payments for rural 
     services.--The Secretary shall not reduce the standard 
     prospective payment amount (or amounts) under this paragraph 
     applicable to home health services furnished during a period 
     to offset the increase in payments resulting from the 
     application of paragraph (7) (relating to services furnished 
     in rural areas).''.

     SEC. 445. EXCLUSION OF CLINICAL SOCIAL WORKER SERVICES AND 
                   SERVICES PERFORMED UNDER A CONTRACT WITH A 
                   RURAL HEALTH CLINIC OR FEDERALLY QUALIFIED 
                   HEALTH CENTER FROM THE PPS FOR SNFS.

       (a) In General.--Section 1888(e)(2)(A)(ii) (42 U.S.C. 
     1395yy(e)(2)(A)(ii)) is amended--
       (1) in the first sentence, by inserting ``clinical social 
     worker services,'' after ``qualified psychologist 
     services,''; and
       (2) by inserting after the first sentence the following: 
     ``Services described in this clause also include services 
     that are provided by a physician, a physician assistant, a 
     nurse practitioner, a certified nurse midwife, a qualified 
     psychologist, or a clinical social worker who is employed, or 
     otherwise under contract, with a rural health clinic or a 
     Federally qualified health center.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to services provided on or after the date which 
     is 60 days after the date of enactment of this Act.

     SEC. 446. COVERAGE OF MARRIAGE AND FAMILY THERAPIST SERVICES 
                   PROVIDED IN RURAL HEALTH CLINICS.

       (a) Coverage of Marriage and Family Therapist Services.--
       (1) Provision of services in rural health clinics.--Section 
     1861(aa)(1)(B) (42 U.S.C. 1395x(aa)(1)(B)) is amended by 
     striking ``Secretary)'' and inserting ``Secretary), by a 
     marriage and family therapist (as defined in subsection 
     (xx)(2)),''.
       (2) Marriage and family therapist services defined.--
     Section 1861 (42 U.S.C. 1395x), as amended by section 234(b), 
     is amended by adding at the end the following new subsection:

                ``Marriage and Family Therapist Services

       ``(xx)(1) The term `marriage and family therapist services' 
     means services performed by a marriage and family therapist 
     (as defined in paragraph (2)) for the diagnosis and treatment 
     of mental illnesses, which the marriage and family therapist 
     is legally authorized to perform under State law (or the 
     State regulatory mechanism provided by State law) of the 
     State in which such services are performed, as would 
     otherwise be covered if furnished by a physician or as an 
     incident to a physician's professional service, but only if 
     no facility or other provider charges or is paid any amounts 
     with respect to the furnishing of such services.
       ``(2) The term `marriage and family therapist' means an 
     individual who--
       ``(A) possesses a master's or doctoral degree which 
     qualifies for licensure or certification as a marriage and 
     family therapist pursuant to State law;
       ``(B) after obtaining such degree has performed at least 2 
     years of clinical supervised experience in marriage and 
     family therapy; and
       ``(C)(i) is licensed or certified as a marriage and family 
     therapist in the State in which marriage and family therapist 
     services are performed; or
       ``(ii) in the case of a State that does not provide for 
     such licensure or certification, meets such other criteria as 
     the Secretary establishes.''.
       (b) Effective Date.--The amendments made by this section 
     shall apply with respect to services furnished on or after 
     January 1, 2002.

     SEC. 447. CAPITAL INFRASTRUCTURE REVOLVING LOAN PROGRAM.

       (a) In General.--Part A of title XVI of the Public Health 
     Service Act (42 U.S.C. 300q et seq.) is amended by adding at 
     the end the following new section:

            ``capital infrastructure revolving loan program

       ``Sec. 1603. (a) Authority To Make and Guarantee Loans.--
       ``(1) Authority to make loans.--The Secretary may make 
     loans from the fund established under section 1602(d) to any 
     rural entity for projects for capital improvements, 
     including--
       ``(A) the acquisition of land necessary for the capital 
     improvements;
       ``(B) the renovation or modernization of any building;
       ``(C) the acquisition or repair of fixed or major movable 
     equipment; and
       ``(D) such other project expenses as the Secretary 
     determines appropriate.
       ``(2) Authority to guarantee loans.--
       ``(A) In general.--The Secretary may guarantee the payment 
     of principal and interest for loans to rural entities for 
     projects for capital improvements described in paragraph (1) 
     to non-Federal lenders.
       ``(B) Interest subsidies.--In the case of a guarantee of 
     any loan to a rural entity under subparagraph (A)(i), the 
     Secretary may pay to the holder of such loan and for and on 
     behalf of the project for which the loan was made, amounts 
     sufficient to reduce by not more than 3 percentage points of 
     the net effective interest rate otherwise payable on such 
     loan.
       ``(b) Amount of Loan.--The principal amount of a loan 
     directly made or guaranteed under subsection (a) for a 
     project for capital improvement may not exceed $5,000,000.
       ``(c) Funding Limitations.--
       ``(1) Government credit subsidy exposure.--The total of the 
     Government credit subsidy exposure under the Credit Reform 
     Act of 1990 scoring protocol with respect to the loans 
     outstanding at any time with respect to which guarantees have 
     been issued, or which have been directly made, under 
     subsection (a) may not exceed $50,000,000 per year.
       ``(2) Total amounts.--Subject to paragraph (1), the total 
     of the principal amount of all loans directly made or 
     guaranteed under subsection (a) may not exceed $250,000,000 
     per year.
       ``(d) Additional Assistance.--
       ``(1) Nonrepayable grants.--Subject to paragraph (2), the 
     Secretary may make a

[[Page S8840]]

     grant to a rural entity, in an amount not to exceed $50,000, 
     for purposes of capital assessment and business planning.
       ``(2) Limitation.--The cumulative total of grants awarded 
     under this subsection may not exceed $2,500,000 per year.
       ``(e) Termination of Authority.--The Secretary may not 
     directly make or guarantee any loan under subsection (a) or 
     make a grant under subsection (d) after September 30, 
     2005.''.
       (b) Rural Entity Defined.--Section 1624 of the Public 
     Health Service Act (42 U.S.C. 300s-3) is amended by adding at 
     the end the following new paragraph:
       ``(15)(A) The term `rural entity' includes--
       ``(i) a rural health clinic, as defined in section 
     1861(aa)(2) of the Social Security Act;
       ``(ii) any medical facility with at least 1, but less than 
     50, beds that is located in--
       ``(I) a county that is not part of a metropolitan 
     statistical area; or
       ``(II) a rural census tract of a metropolitan statistical 
     area (as determined under the most recent modification of the 
     Goldsmith Modification, originally published in the Federal 
     Register on February 27, 1992 (57 Fed. Reg. 6725));
       ``(iii) a hospital that is classified as a rural, regional, 
     or national referral center under section 1886(d)(5)(C) of 
     the Social Security Act; and
       ``(iv) a hospital that is a sole community hospital (as 
     defined in section 1886(d)(5)(D)(iii) of the Social Security 
     Act).
       ``(B) For purposes of subparagraph (A), the fact that a 
     clinic, facility, or hospital has been geographically 
     reclassified under the medicare program under title XVIII of 
     the Social Security Act shall not preclude a hospital from 
     being considered a rural entity under clause (i) or (ii) of 
     subparagraph (A).''.
       (c) Conforming Amendments.--Section 1602 of the Public 
     Health Service Act (42 U.S.C. 300q-2) is amended--
       (1) in subsection (b)(2)(D), by inserting ``or 
     1603(a)(2)(B)'' after ``1601(a)(2)(B)''; and
       (2) in subsection (d)--
       (A) in paragraph (1)(C), by striking ``section 
     1601(a)(2)(B)'' and inserting ``sections 1601(a)(2)(B) and 
     1603(a)(2)(B)''; and
       (B) in paragraph (2)(A), by inserting ``or 1603(a)(2)(B)'' 
     after ``1601(a)(2)(B)''.

     SEC. 448. GRANTS FOR UPGRADING DATA SYSTEMS.

       (a) In General.--Part B of title XVI of the Public Health 
     Service Act (42 U.S.C. 300r et seq.) is amended by adding at 
     the end the following new section:

                  ``grants for upgrading data systems

       ``Sec. 1611. (a) Grants to Hospitals.--
       ``(1) In general.--The Secretary shall establish a program 
     to make grants to hospitals that have submitted applications 
     in accordance with subsection (c) to assist eligible small 
     rural hospitals in offsetting the costs of establishing data 
     systems--
       ``(A) required to--
       ``(i) implement prospective payment systems under title 
     XVIII of the Social Security Act; and
       ``(ii) comply with the administrative simplification 
     requirements under part C of title XI of such Act; or
       ``(B) to reduce medication errors.
       ``(2) Costs.--For purposes of paragraph (1), the term 
     `costs' shall include costs associated with--
       ``(A) purchasing computer software and hardware; and
       ``(B) providing education and training to hospital staff on 
     computer information systems.
       ``(3) Limitation.--A hospital that has received a grant 
     under section 142 of the Medicare, Medicaid, and SCHIP 
     Balanced Budget Refinement Act of 2000 is not eligible to 
     receive a grant under this section.
       ``(b) Eligible Small Rural Hospital Defined.--For purposes 
     of this section, the term `eligible small rural hospital' 
     means a non-Federal, short-term general acute care hospital 
     that--
       ``(1) is located in a rural area, as defined for purposes 
     of section 1886(d) of the Social Security Act; and
       ``(2) has less than 50 beds.
       ``(c) Application.--A hospital seeking a grant under this 
     section shall submit an application to the Secretary at such 
     time and in such form and manner as the Secretary specifies.
       ``(d) Amount of Grant.--A grant to a hospital under this 
     section may not exceed $100,000.
       ``(e) Reports.--
       ``(1) Information.--A hospital receiving a grant under this 
     section shall furnish the Secretary with such information as 
     the Secretary may require to--
       ``(A) evaluate the project for which the grant is made; and
       ``(B) ensure that the grant is expended for the purposes 
     for which it is made.
       ``(2) Timing of submission.--
       ``(A) Interim reports.--The Secretary shall report to the 
     Committee on Commerce of the House of Representatives and the 
     Committee on Health, Education, Labor, and Pensions of the 
     Senate at least annually on the grant program established 
     under this section, including in such report information on 
     the number of grants made, the nature of the projects 
     involved, the geographic distribution of grant recipients, 
     and such other matters as the Secretary deems appropriate.
       ``(B) Final report.--The Secretary shall submit a final 
     report to such committees not later than 180 days after the 
     completion of all of the projects for which a grant is made 
     under this section.
       ``(f) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as may be necessary 
     for grants under this section.''.
       (b) Conforming Amendment.--Section 1820(g)(3) (42 U.S.C. 
     1395i-4(g)(3)) is repealed.

     SEC. 449. RELIEF FOR FINANCIALLY DISTRESSED RURAL HOSPITALS.

       Title III of the Public Health Service Act (42 U.S.C. 241 
     et seq.) is amended by inserting after section 330D the 
     following new section:

     ``SEC. 330E. RELIEF FOR FINANCIALLY DISTRESSED RURAL 
                   HOSPITALS.

       ``(a) Grants to Small Rural Hospitals.--The Secretary, 
     acting through the Health Resources and Services 
     Administration, may award grants to eligible small rural 
     hospitals that have submitted applications in accordance with 
     subsection (c) to provide relief for financial distress that 
     has a negative impact on access to care for beneficiaries 
     under the medicare program under title XVIII of the Social 
     Security Act (42 U.S.C. 1395 et seq.) that reside in a rural 
     area.
       ``(b) Eligible Small Rural Hospital Defined.--For purposes 
     of this paragraph, the term `eligible small rural hospital' 
     means a non-Federal, short-term general acute care hospital 
     that--
       ``(1) is located in a rural area (as defined for purposes 
     of section 1886(d) of the Social Security Act (42 U.S.C. 
     1395ww(d))); and
       ``(2) has less than 50 beds.
       ``(c) Application and Approval.--
       ``(1) Application.--Each eligible small rural hospital that 
     desires to receive a grant under this paragraph shall submit 
     an application to the Secretary, at such time, in such form 
     and manner, and accompanied by such additional information as 
     the Secretary may reasonably require.
       ``(2) Approval.--The Secretary shall approve applications 
     submitted under paragraph (1) based on a methodology 
     developed by the Secretary in consultation with the Office of 
     Rural Health Policy.
       ``(d) Amount of Grant.--A grant to an eligible small rural 
     hospital under this paragraph may not exceed $250,000.
       ``(e) Use of Funds.--
       ``(1) In general.--Except as provided in paragraph (2), an 
     eligible small rural hospital may use amounts received under 
     a grant under this section to temporarily offset financial 
     operating losses, with emphasis on those losses attributable 
     to reimbursement formula changes that resulted from the 
     Balanced Budget Act of 1997, in order to ensure continued 
     operation and short-term sustainability or to address 
     emergency physical capital needs that might otherwise result 
     in closure.
       ``(2) Prohibited uses.--A hospital may not use funds 
     received under a grant under this section for new 
     construction, the purchase of medical equipment, or for 
     computer software or hardware.
       ``(f) Report.--
       ``(1) Information.--A hospital receiving a grant under this 
     section shall furnish the Secretary with such information as 
     the Secretary may require to evaluate the project for which 
     the grant is made and to ensure that the grant is expended 
     for the purposes for which it is made.
       ``(2) Reporting.--
       ``(A) Annual reports.--
       ``(i) In general.--Not later than December 31 of each year 
     (beginning with 2001), the Secretary shall submit a report to 
     the committees of jurisdiction of the House of 
     Representatives and the Senate on the grant program 
     established under this section.
       ``(ii) Information included.--The report submitted under 
     clause (i) shall include information on the number of grants 
     made, the nature of the projects involved, the geographic 
     distribution of grant recipients, and such other information 
     as the Secretary determines is appropriate.
       ``(B) Final report.--Not later than 180 days after the 
     completion of all of the projects for which a grant is made 
     under this section, the Secretary shall submit a final report 
     on the grant program established under this section to the 
     committees described in subparagraph (A).
       ``(g) Appropriations.--There are appropriated, out of any 
     money in the Treasury not otherwise appropriated, for making 
     grants under this section $25,000,000 for each of the fiscal 
     years 2001 through 2005.''.

     SEC. 450. REFINEMENT OF MEDICARE REIMBURSEMENT FOR TELEHEALTH 
                   SERVICES.

       (a) Revision of Telehealth Payment Methodology and 
     Elimination of Fee-Sharing Requirement.--Section 4206(b) of 
     the Balanced Budget Act of 1997 (42 U.S.C. 1395l note) is 
     amended to read as follows:
       ``(b) Methodology for Determining Amount of Payments.--
       ``(1) In general.--The Secretary shall pay to--
       ``(A) the physician or practitioner at a distant site that 
     provides an item or service under subsection (a) an amount 
     equal to the amount that such physician or provider would 
     have been paid had the item or service been provided without 
     the use of a telecommunications system; and
       ``(B) the originating site a facility fee for facility 
     services furnished in connection with such item or service.
       ``(2) Application of part b coinsurance and deductible.--
     Any payment made under this section shall be subject to the 
     coinsurance and deductible requirements under subsections 
     (a)(1) and (b) of section 1833 of the Social Security Act (42 
     U.S.C. 1395l).
       ``(3) Definitions.--In this subsection:
       ``(A) Distant site.--The term `distant site' means the site 
     at which the physician or

[[Page S8841]]

     practitioner is located at the time the item or service is 
     provided via a telecommunications system.
       ``(B) Facility fee.--The term `facility fee' means an 
     amount equal to--
       ``(i) for 2000 and 2001, $20; and
       ``(ii) for a subsequent year, the facility fee under this 
     subsection for the previous year increased by the percentage 
     increase in the MEI (as defined in section 1842(i)(3)) for 
     such subsequent year.
       ``(C) Originating site.--
       ``(i) In general.--The term `originating site' means the 
     site described in clause (ii) at which the eligible 
     telehealth beneficiary under the medicare program is located 
     at the time the item or service is provided via a 
     telecommunications system.
       ``(ii) Sites described.--The sites described in this 
     paragraph are as follows:

       ``(I) On or before January 1, 2002, the office of a 
     physician or a practitioner, a critical access hospital, a 
     rural health clinic, and a Federally qualified health center.
       ``(II) On or before January 1, 2003, a hospital, a skilled 
     nursing facility, a comprehensive outpatient rehabilitation 
     facility, a renal dialysis facility, an ambulatory surgical 
     center, an Indian Health Service facility, and a community 
     mental health center.''.

       (b) Elimination of Requirement for Telepresenter.--Section 
     4206 of the Balanced Budget Act of 1997 (42 U.S.C. 1395l 
     note) is amended--
       (1) in subsection (a), by striking ``, notwithstanding that 
     the individual physician'' and all that follows before the 
     period at the end; and
       (2) by adding at the end the following new subsection:
       ``(e) Telepresenter Not Required.--Nothing in this section 
     shall be construed as requiring an eligible telehealth 
     beneficiary to be presented by a physician or practitioner 
     for the provision of an item or service via a 
     telecommunications system.''.
       (c) Reimbursement for Medicare Beneficiaries Who Do Not 
     Reside in a HPSA.--Section 4206(a) of the Balanced Budget Act 
     of 1997 (42 U.S.C. 1395l note), as amended by subsection (b), 
     is amended--
       (1) by striking ``In General.--Not later than'' and 
     inserting the following: ``Telehealth Services Reimbursed.--
       ``(1) In general.--Not later than'';
       (2) by striking ``furnishing a service for which payment'' 
     and all that follows before the period and inserting ``to an 
     eligible telehealth beneficiary''; and
       (3) by adding at the end the following new paragraph:
       ``(2) Eligible telehealth beneficiary defined.--In this 
     section, the term `eligible telehealth beneficiary' means a 
     beneficiary under the medicare program under title XVIII of 
     the Social Security Act (42 U.S.C. 1395 et seq.) that resides 
     in--
       ``(A) an area that is designated as a health professional 
     shortage area under section 332(a)(1)(A) of the Public Health 
     Service Act (42 U.S.C. 254e(a)(1)(A));
       ``(B) a county that is not included in a Metropolitan 
     Statistical Area; or
       ``(C) an inner-city area that is medically underserved (as 
     defined in section 330(b)(3) of the Public Health Service Act 
     (42 U.S.C. 254b(b)(3))).''.
       (d) Telehealth Coverage for Direct Patient Care.--
       (1) In general.--Section 4206 of the Balanced Budget Act of 
     1997 (42 U.S.C. 1395l note), as amended by subsection (c), is 
     amended--
       (A) in subsection (a)(1), by striking ``professional 
     consultation via telecommunications systems with a 
     physician'' and inserting ``items and services for which 
     payment may be made under such part that are furnished via a 
     telecommunications system by a physician''; and
       (B) by adding at the end the following new subsection:
       ``(f) Coverage of Items and Services.--Payment for items 
     and services provided pursuant to subsection (a) shall 
     include payment for professional consultations, office 
     visits, office psychiatry services, including any service 
     identified as of July 1, 2000, by HCPCS codes 99241-99275, 
     99201-99215, 90804-90815, and 90862.''.
       (2) Study and report regarding additional items and 
     services.--
       (A) Study.--The Secretary of Health and Human Services 
     shall conduct a study to identify items and services in 
     addition to those described in section 4206(f) of the 
     Balanced Budget Act of 1997 (as added by paragraph (1)) that 
     would be appropriate to provide payment under title XVIII of 
     the Social Security Act (42 U.S.C. 1395 et seq.).
       (B) Report.--Not later than 2 years after the date of 
     enactment of this Act, the Secretary shall submit a report to 
     Congress on the study conducted under subparagraph (A) 
     together with such recommendations for legislation that the 
     Secretary determines are appropriate.
       (e) All Physicians and Practitioners Eligible for 
     Telehealth Reimbursement.--Section 4206(a) of the Balanced 
     Budget Act of 1997 (42 U.S.C. 1395l note), as amended by 
     subsection (d), is amended--
       (1) in paragraph (1), by striking ``(described in section 
     1842(b)(18)(C) of such Act (42 U.S.C. 1395u(b)(18)(C))''; and
       (2) by adding at the end the following new paragraph:
       ``(3) Practitioner defined.--For purposes of paragraph (1), 
     the term `practitioner' includes--
       ``(A) a practitioner described in section 1842(b)(18)(C) of 
     the Social Security Act (42 U.S.C. 1395u(b)(18)(C)); and
       ``(B) a physical, occupational, or speech therapist.''.
       (f) Telehealth Services Provided Using Store-and-Forward 
     Technologies.--Section 4206(a)(1) of the Balanced Budget Act 
     of 1997 (42 U.S.C. 1395l note), as amended by subsection (e), 
     is amended by adding at the end the following new paragraph:
       ``(4) Use of store-and-forward technologies.--For purposes 
     of paragraph (1), in the case of any Federal telemedicine 
     demonstration program in Alaska or Hawaii, the term 
     `telecommunications system' includes store-and-forward 
     technologies that provide for the asynchronous transmission 
     of health care information in single or multimedia 
     formats.''.
       (g) Construction Relating to Home Health Services.--Section 
     4206(a) of the Balanced Budget Act of 1997 (42 U.S.C. 1395l 
     note), as amended by subsection (f), is amended by adding at 
     the end the following new paragraph:
       ``(5) Construction relating to home health services.--
       ``(A) In general.--Nothing in this section or in section 
     1895 of the Social Security Act (42 U.S.C. 1395fff) shall be 
     construed as preventing a home health agency that is 
     receiving payment under the prospective payment system 
     described in such section from furnishing a home health 
     service via a telecommunications system.
       ``(B) Limitation.--The Secretary shall not consider a home 
     health service provided in the manner described in 
     subparagraph (A) to be a home health visit for purposes of--
       ``(i) determining the amount of payment to be made under 
     the prospective payment system established under section 1895 
     of the Social Security Act (42 U.S.C. 1395fff); or
       ``(ii) any requirement relating to the certification of a 
     physician required under section 1814(a)(2)(C) of such Act 
     (42 U.S.C. 1395f(a)(2)(C)).''.
       (h) Five-Year Application.--The amendments made by this 
     section shall apply to items and services provided on or 
     after April 1, 2001, and before April 1, 2006.

     SEC. 451. MEDPAC STUDY ON LOW-VOLUME, ISOLATED RURAL HEALTH 
                   CARE PROVIDERS.

       (a) Study.--The Medicare Payment Advisory Commission 
     established under section 1805 of the Social Security Act (42 
     U.S.C. 1395b-6) (in this section referred to as ``MedPAC'') 
     shall conduct a study on the effect of low patient and 
     procedure volume on the financial status of low-volume, 
     isolated rural health care providers participating in the 
     medicare program under title XVIII of the Social Security Act 
     (42 U.S.C. 1395 et seq.).
       (b) Report.--Not later than 18 months after the date of 
     enactment of this Act, MedPAC shall submit a report to the 
     Secretary of Health and Human Services and Congress on the 
     study conducted under subsection (a) indicating--
       (1) whether low-volume, isolated rural health care 
     providers are having, or may have, significantly decreased 
     medicare margins or other financial difficulties resulting 
     from any of the payment methodologies described in subsection 
     (c);
       (2) whether the status as a low-volume, isolated rural 
     health care provider should be designated under the medicare 
     program and any criteria that should be used to qualify for 
     such a status; and
       (3) any changes in the payment methodologies described in 
     subsection (c) that are necessary to provide appropriate 
     reimbursement under the medicare program to low-volume, 
     isolated rural health care providers (as designated pursuant 
     to paragraph (2)).
       (c) Payment Methodologies Described.--The payment 
     methodologies described in this subsection are the following:
       (1) The prospective payment system for hospital outpatient 
     department services under section 1833(t) of the Social 
     Security Act (42 U.S.C. 1395l).
       (2) The fee schedule for ambulance services under section 
     1834(l) of such Act (42 U.S.C. 1395m(l)).
       (3) The prospective payment system for inpatient hospital 
     services under section 1886 of such Act (42 U.S.C. 1395ww).
       (4) The prospective payment system for routine service 
     costs of skilled nursing facilities under section 1888(e) of 
     such Act (42 U.S.C. 1395yy(e)).
       (5) The prospective payment system for home health services 
     under section 1895 of such Act (42 U.S.C. 1395fff).

 TITLE V--PROVISIONS RELATING TO PART C (MEDICARE+CHOICE PROGRAM) AND 
                 OTHER MEDICARE MANAGED CARE PROVISIONS

     SEC. 501. RESTORING EFFECTIVE DATE OF ELECTIONS AND CHANGES 
                   OF ELECTIONS OF MEDICARE+CHOICE PLANS.

       (a) Open Enrollment.--Section 1851(f)(2) (42 U.S.C. 1395w-
     21(f)(2)) is amended by striking ``, except that if such 
     election or change is made after the 10th day of any calendar 
     month, then the election or change shall not take effect 
     until the first day of the second calendar month following 
     the date on which the election or change is made''.
       (b) Effective Date.--The amendment made by this section 
     shall apply to elections and changes of coverage made on or 
     after January 1, 2001.

[[Page S8842]]

     SEC. 502. SPECIAL MEDIGAP ENROLLMENT ANTIDISCRIMINATION 
                   PROVISION FOR CERTAIN BENEFICIARIES.

       (a) Disenrollment Window in Accordance With Beneficiary's 
     Circumstance.--Section 1882(s)(3) (42 U.S.C. 1395ss(s)(3)) is 
     amended--
       (1) in subparagraph (A), in the matter following clause 
     (iii), by striking ``, subject to subparagraph (E), seeks to 
     enroll under the policy not later than 63 days after the date 
     of termination of enrollment described in such subparagraph'' 
     and inserting ``seeks to enroll under the policy during the 
     period specified in subparagraph (E)''; and
       (2) by striking subparagraph (E) and inserting the 
     following new subparagraph:
       ``(E) For purposes of subparagraph (A), the time period 
     specified in this subparagraph is--
       ``(i) in the case of an individual described in 
     subparagraph (B)(i), the period beginning on the date the 
     individual receives a notice of termination or cessation of 
     all supplemental health benefits (or, if no such notice is 
     received, notice that a claim has been denied because of such 
     a termination or cessation) and ending on the date that is 63 
     days after the applicable notice;
       ``(ii) in the case of an individual described in clause 
     (ii), (iii), (v), or (vi) of subparagraph (B) whose 
     enrollment is terminated involuntarily, the period beginning 
     on the date that the individual receives a notice of 
     termination and ending on the date that is 63 days after the 
     date the applicable coverage is terminated;
       ``(iii) in the case of an individual described in 
     subparagraph (B)(iv)(I), the period beginning on the earlier 
     of (I) the date that the individual receives a notice of 
     termination, a notice of the issuer's bankruptcy or 
     insolvency, or other such similar notice, if any, and (II) 
     the date that the applicable coverage is terminated, and 
     ending on the date that is 63 days after the date the 
     coverage is terminated;
       ``(iv) in the case of an individual described in clause 
     (ii), (iii), (iv)(II), (iv)(III), (v), or (vi) of 
     subparagraph (B) who disenrolls voluntarily, the period 
     beginning on the date that is 60 days before the effective 
     date of the disenrollment and ending on the date that is 63 
     days after such effective date; and
       ``(v) in the case of an individual described in 
     subparagraph (B) but not described in the preceding 
     provisions of this subparagraph, the period beginning on the 
     effective date of the disenrollment and ending on the date 
     that is 63 days after such effective date.''.
       (b) Extended Medigap Access for Interrupted Trial 
     Periods.--Section 1882(s)(3) (42 U.S.C. 1395ss(s)(3)), as 
     amended by subsection (a), is amended by adding at the end 
     the following new subparagraph:
       ``(F) For purposes of this paragraph--
       ``(i) in the case of an individual described in 
     subparagraph (B)(v) (or deemed to be so described, pursuant 
     to this subparagraph) whose enrollment with an organization 
     or provider described in subclause (II) of such subparagraph 
     is involuntarily terminated within the first 12 months of 
     such enrollment, and who, without an intervening enrollment, 
     enrolls with another such organization or provider, such 
     subsequent enrollment shall be deemed to be an initial 
     enrollment described in such subparagraph; and
       ``(ii) in the case of an individual described in clause 
     (vi) of subparagraph (B) (or deemed to be so described, 
     pursuant to this subparagraph) whose enrollment with a plan 
     or in a program described in clause (v)(II) of such 
     subparagraph is involuntarily terminated within the first 12 
     months of such enrollment, and who, without an intervening 
     enrollment, enrolls in another such plan or program, such 
     subsequent enrollment shall be deemed to be an initial 
     enrollment described in clause (vi) of such subparagraph.''.

     SEC. 503. 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. 504. 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. 505. 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.

     SEC. 506. AMOUNTS IN MEDICARE TRUST FUNDS AVAILABLE FOR 
                   SECRETARY'S SHARE OF MEDICARE+CHOICE EDUCATION 
                   AND ENROLLMENT-RELATED COSTS.

       (a) Relocation of Provisions.--Section 1857(e)(2) (42 
     U.S.C. 1395w-27(e)(2)) is amended to read as follows:
       ``(2) Cost-sharing in enrollment-related costs.--A 
     Medicare+Choice organization shall pay the fee established by 
     the Secretary under section 1851(j)(3)(A).''.
       (b) Funding for Education and Enrollment Activities.--
     Section 1851 (42 U.S.C. 1395w-21) is amended by adding at the 
     end the following new subsection:
       ``(j) Funding for Beneficiary Education and Enrollment 
     Activities.--
       ``(1) Secretary's estimate of total costs.--The Secretary 
     shall annually estimate the total cost for a fiscal year of 
     carrying out this section, section 4360 of the Omnibus Budget 
     Reconciliation Act of 1990 (relating to the health insurance 
     counseling and assistance program), and related activities.
       ``(2) Total amount available.--The total amount available 
     to the Secretary for a fiscal year for the costs of the 
     activities described in paragraph (1) shall be equal to the 
     lesser of--
       ``(A) the amount estimated for such fiscal year under 
     paragraph (1); or
       ``(B) for--
       ``(i) fiscal year 2001, $130,000,000; and
       ``(ii) fiscal year 2002 and each subsequent fiscal year, 
     the amount for the previous fiscal year, adjusted to account 
     for inflation, any change in the number of beneficiaries 
     under this title, and any other relevant factors.
       ``(3) Cost-sharing in enrollment-related costs.--
       ``(A) Amounts from medicare+choice organizations.--
       ``(i) In general.--The Secretary is authorized to charge a 
     fee to each Medicare+Choice organization with a contract 
     under this part that is equal to the organization's pro rata 
     share (as determined by the Secretary) of the Medicare+Choice 
     portion (as defined in clause (ii)) of the total amount 
     available under paragraph (2) for a fiscal year. Any amounts 
     collected shall be available without further appropriation to 
     the Secretary for the costs of the activities described in 
     paragraph (1).
       ``(ii) Medicare+choice portion defined.--For purposes of 
     clause (i), the term `Medicare+Choice portion' means, for a 
     fiscal year, the ratio, as estimated by the Secretary, of--

       ``(I) the average number of individuals enrolled in 
     Medicare+Choice plans during the fiscal year; to
       ``(II) the average number of individuals entitled to 
     benefits under parts A, and enrolled under part B, during the 
     fiscal year.

       ``(B) Secretary's share.--
       ``(i) Amounts available from trust funds.--The Secretary's 
     share of expenses shall be payable from funds in the Federal 
     Hospital Insurance Trust Fund and the Federal Supplementary 
     Medical Insurance Trust Fund, in such proportion as the 
     Secretary shall deem to be fair and equitable after taking 
     into consideration the expenses attributable to the 
     administration of this part with respect to part A and B. The 
     Secretary shall make such transfers of moneys between such 
     Trust Funds as may be appropriate to settle accounts between 
     the Trust Funds in cases where expenses properly payable from 
     one such Trust Fund have been paid from the other such Trust 
     Fund.
       ``(ii) Secretary's share of expenses defined.--For purposes 
     of clause (i), the term `Secretary's share of expenses' 
     means, for a fiscal year, an amount equal to--

       ``(I) the total amount available to the Secretary under 
     paragraph (2) for the fiscal year; less
       ``(II) the amount collected under subparagraph (A) for the 
     fiscal year.''.

     SEC. 507. REVISED TERMS AND CONDITIONS FOR EXTENSION OF 
                   MEDICARE COMMUNITY NURSING ORGANIZATION (CNO) 
                   DEMONSTRATION PROJECT.

       (a) In General.--Section 532 of BBRA (42 U.S.C. 1395mm 
     note) is amended--
       (1) in subsection (a), by striking the second sentence; and
       (2) by striking subsection (b) and inserting the following 
     new subsections:
       ``(b) Terms and Conditions.--
       ``(1) January through september 2000.--For the 9-month 
     period beginning with January 2000, any such demonstration 
     project shall be conducted under the same terms and 
     conditions as applied to such demonstration during 1999.
       ``(2) October 2000 through december 2001.--For the 15-month 
     period beginning with October 2000, any such demonstration 
     project shall be conducted under the same terms and 
     conditions as applied to such demonstration during 1999, 
     except that the following modifications shall apply:
       ``(A) Basic capitation rate.--The basic capitation rate 
     paid for services covered under the project (other than case 
     management services) per enrollee per month shall be basic 
     capitation rate paid for such services for 1999, reduced by 
     10 percent in the case of the demonstration sites located in 
     Arizona, Minnesota, and Illinois, and 15 percent for the 
     demonstration site located in New York.
       ``(B) Targeted case management fee.--A case management fee 
     shall be paid only for enrollees who are classified as 
     `moderate' or `at risk' through a baseline health assessment 
     (as required for Medicare+Choice plans under section 1852(e) 
     of the Social Security Act (42 U.S.C. 1395ww-22(e)).

[[Page S8843]]

       ``(C) Greater uniformity in clinical features among 
     sites.--Each project shall implement for each site--
       ``(i) protocols for periodic telephonic contact with 
     enrollees based on--

       ``(I) the results of such standardized written health 
     assessment; and
       ``(II) the application of appropriate care planning 
     approaches;

       ``(ii) disease management programs for targeted diseases 
     (such as congestive heart failure, arthritis, diabetes, and 
     hypertension) that are highly prevalent in the enrolled 
     populations;
       ``(iii) systems and protocols to track enrollees through 
     hospitalizations, including pre-admission planning, 
     concurrent management during inpatient hospital stays, and 
     post-discharge assessment, planning, and follow-up; and
       ``(iv) standardized patient educational materials for 
     specified diseases and health conditions.
       ``(D) Quality improvement.--Each project shall implement at 
     each site once during the 15-month period--
       ``(i) enrollee satisfaction surveys; and
       ``(ii) reporting on specified quality indicators for the 
     enrolled population.
       ``(c) Evaluation.--
       ``(1) Preliminary report.--Not later than July 1, 2001, the 
     Secretary of Health and Human Services shall submit to the 
     Committees on Ways and Means and Commerce of the House of 
     Representatives and the Committee on Finance of the Senate a 
     preliminary report that--
       ``(A) evaluates such demonstration projects for the period 
     beginning July 1, 1997, and ending December 31, 1999, on a 
     site-specific basis with respect to the impact on per 
     beneficiary spending, specific health utilization measures, 
     and enrollee satisfaction; and
       ``(B) includes a similar evaluation of such projects for 
     the portion of the extension period that occurs after 
     September 30, 2000.
       ``(2) Final report.--Not later than July 1, 2002, the 
     Secretary shall submit a final report to such Committees on 
     such demonstration projects. Such report shall include the 
     same elements as the preliminary report required by paragraph 
     (1), but for the period after December 31, 1999.
       ``(3) Methodology for spending comparisons.--Any evaluation 
     of the impact of the demonstration projects on per 
     beneficiary spending included in such reports shall be based 
     on a comparison of--
       ``(A) data for all individuals who--
       ``(i) were enrolled in such demonstration projects as of 
     the first day of the period under evaluation; and
       ``(ii) were enrolled for a minimum of 6 months thereafter; 
     with
       ``(B) data for a matched sample of individuals who are 
     enrolled under part B of title XVIII of the Social Security 
     Act (42 U.S.C. 1395j et seq.) and who are not enrolled in 
     such a project, in a Medicare+Choice plan under part C of 
     such title (42 U.S.C. 1395w-21 et seq.), a plan offered by an 
     eligible organization under section 1876 of such Act (42 
     U.S.C. 1395mm), or a health care prepayment plan under 
     section 1833(a)(1)(A) of such Act (42 U.S.C. 
     1395l(a)(1)(A)).''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall be effective as if included in the enactment of section 
     532 of BBRA (42 U.S.C. 1395mm note).

     SEC. 508. MODIFICATION OF PAYMENT RULES FOR CERTAIN FRAIL 
                   ELDERLY MEDICARE BENEFICIARIES.

       (a) Modification of Payment Rules.--Section 1853 (42 U.S.C. 
     1395w-23) is amended--
       (1) in subsection (a)--
       (A) in paragraph (1)(A), by striking ``subsections (e), 
     (g), and (i)'' and inserting ``subsections (e), (g), (i), and 
     (j)'';
       (B) in paragraph (3)(D), by inserting ``paragraph (4) and'' 
     after ``Subject to''; and
       (C) by adding at the end the following new paragraph:
       ``(4) Exemption from risk-adjustment system for frail 
     elderly beneficiaries enrolled in specialized programs.--
       ``(A) In general.--In applying the risk-adjustment factors 
     established under paragraph (3) during the period described 
     in subparagraph (B), the limitation under paragraph 
     (3)(C)(ii)(I) shall apply to a frail elderly Medicare+Choice 
     beneficiary (as defined in subsection (j)(3)) who is enrolled 
     in a Medicare+Choice plan under a specialized program for the 
     frail elderly (as defined in subsection (j)(2)) during the 
     entire period.
       ``(B) Period of application.--The period described in this 
     subparagraph begins with January 2001, and ends with the 
     first month for which the Secretary certifies to Congress 
     that a comprehensive risk adjustment methodology under 
     paragraph (3)(C) that takes into account the factors 
     described in subsection (j)(1)(B) is being fully 
     implemented.''; and
       (2) by adding at the end the following new subsection:
       ``(j) Special Rules for Frail Elderly Enrolled in 
     Specialized Programs for the Frail Elderly.--
       ``(1) Development and implementation of new payment 
     system.--
       ``(A) In general.--The Secretary shall develop and 
     implement (as soon as possible after the date of enactment of 
     the Medicare, Medicaid, and SCHIP Balanced Budget Refinement 
     Act of 2000), during the period described in subsection 
     (a)(4)(B), a payment methodology for frail elderly 
     Medicare+Choice beneficiaries enrolled in a Medicare+Choice 
     plan under a specialized program for the frail elderly (as 
     defined in paragraph (2)(A)).
       ``(B) Factors described.--The methodology developed and 
     implemented under subparagraph (A) shall take into account 
     the prevalence, mix, and severity of chronic conditions among 
     frail elderly Medicare+Choice beneficiaries and shall 
     include--
       ``(i) medical diagnostic factors from all provider settings 
     (including hospital and nursing facility settings);
       ``(ii) functional indicators of health status; and
       ``(iii) such other factors as may be necessary to achieve 
     appropriate payments for plans serving such beneficiaries.
       ``(2) Specialized program for the frail elderly defined.--
       ``(A) In general.--In this part, the term `specialized 
     program for the frail elderly' means a program that the 
     Secretary determines--
       ``(i) is offered under this part as a distinct part of a 
     Medicare+Choice plan;
       ``(ii) primarily enrolls frail elderly Medicare+Choice 
     beneficiaries; and
       ``(iii) has a clinical delivery system that is specifically 
     designed to serve the special needs of such beneficiaries and 
     to coordinate short-term and long-term care for such 
     beneficiaries through the use of a team described in 
     subparagraph (B) and through the provision of primary care 
     services to such beneficiaries by means of such a team at the 
     nursing facility involved.
       ``(B) Specialized team described.--A team described in this 
     subparagraph--
       ``(i) includes--

       ``(I) a physician; and
       ``(II) a nurse practitioner or geriatric care manager; and

       ``(ii) has as members individuals who--

       ``(I) have special training in the care and management of 
     the frail elderly beneficiaries; and
       ``(II) specialize in the care and management of such 
     beneficiaries.

       ``(3) Frail elderly medicare+choice beneficiary defined.--
     In this part, the term `frail elderly Medicare+Choice 
     beneficiary' means a Medicare+Choice eligible individual 
     who--
       ``(A) is residing in a skilled nursing facility (as defined 
     in section 1819(a)) or a nursing facility (as defined in 
     section 1919(a)) for an indefinite period and without any 
     intention of residing outside the facility; and
       ``(B) has a severity of condition that makes the individual 
     frail (as determined under guidelines approved by the 
     Secretary).''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect on the date of enactment of this Act.

   TITLE VI--PROVISIONS RELATING TO INDIVIDUALS WITH END-STAGE RENAL 
                                DISEASE

     SEC. 601. UPDATE IN RENAL DIALYSIS COMPOSITE RATE.

       (a) In General.--The last sentence of section 1881(b)(7) 
     (42 U.S.C. 1395rr(b)(7)) is amended by striking ``, and for 
     such services'' and all that follows before the period at the 
     end and inserting the following: ``, for such services 
     furnished during 2001, by 2.4 percent above such composite 
     rate payment amounts for such services furnished on December 
     31, 2000, for such services furnished during 2002 and 2003, 
     by the percentage increase in the Consumer Price Index for 
     all urban consumers (U.S. city average) for the 12-month 
     period ending with June of the previous year above such 
     composite rate payment amounts for such services furnished on 
     December 31 of the previous year, and for such services 
     furnished during a subsequent year, by the ESRD market basket 
     percentage increase above such composite rate payment amounts 
     for such services furnished on December 31 of the previous 
     year''.
       (b) ESRD Market Basket Percentage Increase Defined.--
     Section 1881(b) (42 U.S.C. 1395rr(b)) is amended by adding at 
     the end the following new paragraph:
       ``(12)(A) For purposes of this title, the term `ESRD market 
     basket percentage increase' means, with respect to a calendar 
     year, the percentage (estimated by the Secretary before the 
     beginning of such year) by which--
       ``(i) the cost of the mix of goods and services included in 
     the provision of dialysis services (which may include the 
     costs described in subparagraph (D) as determined appropriate 
     by the Secretary) that is determined based on an index of 
     appropriately weighted indicators of changes in wages and 
     prices which are representative of the mix of goods and 
     services included in such dialysis services for the calendar 
     year; exceeds
       ``(ii) the cost of such mix of goods and services for the 
     preceding calendar year.
       ``(B) In determining the percentage under subparagraph (A), 
     the Secretary may take into account any increase in the costs 
     of furnishing the mix of goods and services described in such 
     subparagraph resulting from--
       ``(i) the adoption of scientific and technological 
     innovations used to provide dialysis services; and
       ``(ii) changes in the manner or method of delivering 
     dialysis services.
       ``(C) The Secretary shall periodically review and update 
     (as necessary) the items and services included in the mix of 
     goods and services used to determine the percentage under 
     subparagraph (A).
       ``(D) The costs described in this subparagraph include--
       ``(i) labor, including direct patient care costs and 
     administrative labor costs, vacation and holiday pay, payroll 
     taxes, and employee benefits;

[[Page S8844]]

       ``(ii) other direct costs, including drugs, supplies, and 
     laboratory fees;
       ``(iii) overhead, including medical director fees, 
     temporary services, general and administrative costs, 
     interest expenses, and bad debt;
       ``(iv) capital, including rent, real estate taxes, 
     depreciation, utilities, repairs, and maintenance; and
       ``(v) such other allowable costs as the Secretary may 
     specify.''.

     SEC. 602. REVISION OF PAYMENT RATES FOR ESRD PATIENTS 
                   ENROLLED IN MEDICARE+CHOICE PLANS.

       (a) In General.--Section 1853(a)(1)(B) (42 U.S.C. 1395w-
     23(a)(1)(B)) is amended by adding at the end the following: 
     ``In establishing such rates the Secretary shall provide for 
     appropriate adjustments to increase each rate to reflect the 
     demonstration rate (including any risk-adjustment associated 
     with such rate) of the social health maintenance organization 
     end-stage renal disease demonstrations established by section 
     2355 of the Deficit Reduction Act of 1984 (Public Law 98-369; 
     98 Stat. 1103), as amended by section 13567(b) of the Omnibus 
     Budget Reconciliation Act of 1993 (Public Law 103-66; 107 
     Stat. 608), and shall compute such rates by not taking into 
     account individuals with kidney transplants and individuals 
     in which the program under this title is a secondary payer to 
     another payer (or payers) pursuant to section 1862(b).''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to payments for months beginning with January 
     2002.
       (c) Publication.--The Secretary of Health and Human 
     Services, not later than 6 months after the date of enactment 
     of this Act, shall publish for public comment a description 
     of the appropriate adjustments described in the last sentence 
     of section 1853(a)(1)(B) of the Social Security Act (42 
     U.S.C. 1395w-23(a)(1)(B)), as added by subsection (a). The 
     Secretary shall publish in final form such adjustments by not 
     later than July 1, 2001, so that the amendment made by 
     subsection (a) is implemented on a timely basis consistent 
     with subsection (b).

     SEC. 603. PERMITTING ESRD BENEFICIARIES TO ENROLL IN ANOTHER 
                   MEDICARE+CHOICE PLAN IF THE PLAN IN WHICH THEY 
                   ARE ENROLLED IS TERMINATED.

       (a) In General.--Section 1851(a)(3)(B) (42 U.S.C. 1395w-
     21(a)(3)(B)) is amended by striking ``except that'' and all 
     that follows and inserting the following: ``except that--
       ``(i) an individual who develops end-stage renal disease 
     while enrolled in a Medicare+Choice plan may continue to be 
     enrolled in that plan; and
       ``(ii) in the case of such an individual who is enrolled in 
     a Medicare+Choice plan under clause (i) (or subsequently 
     under this clause), if the enrollment is discontinued under 
     circumstances described in section 1851(e)(4)(A) then the 
     individual will be treated as a `Medicare+Choice eligible 
     individual' for purposes of electing to continue enrollment 
     in another Medicare+Choice plan.''.
       (b) Effective Date.--
       (1) In general.--The amendment made by subsection (a) shall 
     apply to terminations and discontinuations occurring on or 
     after the date of enactment of this Act.
       (2) Application to prior plan terminations.--Clause (ii) of 
     section 1851(a)(3)(B) of the Social Security Act (as inserted 
     by subsection (a)) also shall apply to individuals whose 
     enrollment in a Medicare+Choice plan was terminated or 
     discontinued after December 31, 1997, and before the date of 
     enactment of this Act. In applying this paragraph, such an 
     individual shall be treated, for purposes of part C of title 
     XVIII of the Social Security Act, as having discontinued 
     enrollment in such a plan as of the date of enactment of this 
     Act.

     SEC. 604. COVERAGE OF CERTAIN VASCULAR ACCESS SERVICES FOR 
                   ESRD BENEFICIARIES PROVIDED BY AMBULATORY 
                   SURGICAL CENTERS.

       (a) In General.--The matter following subparagraph (B) of 
     section 1833(i)(1) (42 U.S.C. 1395l(i)(1)) is amended by 
     adding at the end the following new sentence: ``Such lists 
     shall include the procedures identified as of July 30, 1999, 
     by vascular access codes 34101, 34111, 34490, 35190, 35458, 
     35460, 35475, 35476, 35903, 36005, 36010, 36011, 36120, 
     36140, 36145, 36215-36218, 36831-36834, 37201, 37204-37208, 
     37250, 37251, and 49423.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to vascular access services furnished on or after 
     January 1, 2000.

     SEC. 605. COLLECTION AND ANALYSIS OF INFORMATION ON THE 
                   SATISFACTION OF ESRD BENEFICIARIES WITH THE 
                   QUALITY OF AND ACCESS TO HEALTH CARE UNDER THE 
                   MEDICARE PROGRAM.

       (a) Collection of Information.--The Secretary shall collect 
     information on the satisfaction of each ESRD medicare 
     beneficiary with the quality of health care under the 
     original fee-for-service medicare program and the 
     Medicare+Choice program, and the access of each beneficiary 
     to that care.
       (b) Analysis of Collected Information.--
       (1) In general.--The Secretary shall conduct an analysis of 
     the information collected under subsection (a) to determine--
       (A) the kinds of health care that each non-dialysis health 
     care provider provides to each ESRD medicare beneficiary for 
     the treatment of end-stage renal disease and each 
     comorbidity;
       (B) the effect of the availability of supplemental 
     insurance on the use by beneficiary of health care;
       (C) the perceptions of each beneficiary regarding the 
     access of that beneficiary to health care; and
       (D) the quality of health care provided to each ESRD 
     medicare beneficiary enrolled under the Medicare+Choice 
     program compared to each beneficiary enrolled under the 
     original fee-for-service medicare program.
       (2) Considerations.--In conducting the analysis under 
     paragraph (1), the Secretary shall consider--
       (A) the feasibility of routinely collecting information on 
     the satisfaction of each ESRD medicare beneficiary with 
     dialysis and non-dialysis health care;
       (B) whether to collect information using disease specific 
     questions or generic questions (similar to those used in 
     conducting the Medicare Current Beneficiary Survey);
       (C) how well collected information detects access problems 
     within each specific group of ESRD medicare beneficiaries, 
     including beneficiaries without supplemental insurance and 
     beneficiaries that reside in a rural area; and
       (D) each obstacle that a health care provider may face in 
     offering each type of dialysis service.
       (c) Availability of Information and Analysis.--Not later 
     than January 1 of each year (beginning in 2002) the Secretary 
     shall make the information collected under subsection (a) and 
     the analysis conducted under subsection (b) available to the 
     public.
       (d) Definitions.--In this section:
       (1) ESRD medicare beneficiary.--The term ``ESRD medicare 
     beneficiary'' means an individual eligible for benefits under 
     the medicare program that has end-stage renal disease 
     (including an individual enrolled in a Medicare+Choice plan 
     offered by a Medicare+Choice organization under the 
     Medicare+Choice program).
       (2) Medicare+choice program.--The term ``Medicare+Choice 
     program'' means the program established under part C of title 
     XVIII of the Social Security Act (42 U.S.C. 1395w-21 et 
     seq.).
       (3) Original fee-for-service medicare program.--The term 
     ``original fee-for-service medicare program'' means the 
     health benefits program under parts A and B title XVIII of 
     the Social Security Act (42 U.S.C. 1395 et seq.).
       (4) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services, acting through the 
     Administrator of the Health Care Financing Administration.

   TITLE VII--ACCESS TO CARE IMPROVEMENTS THROUGH MEDICAID AND SCHIP

     SEC. 701. NEW PROSPECTIVE PAYMENT SYSTEM FOR FEDERALLY-
                   QUALIFIED HEALTH CENTERS AND RURAL HEALTH 
                   CLINICS.

       (a) In General.--Section 1902(a) (42 U.S.C. 1396a(a)) is 
     amended--
       (1) in paragraph (13)--
       (A) in subparagraph (A), by adding ``and'' at the end;
       (B) in subparagraph (B), by striking ``and'' at the end; 
     and
       (C) by striking subparagraph (C); and
       (2) by inserting after paragraph (14) the following new 
     paragraph:
       ``(15) for payment for services described in subparagraph 
     (B) or (C) of section 1905(a)(2) under the plan in accordance 
     with subsection (aa);''.
       (b) New Prospective Payment System.--Section 1902 (42 
     U.S.C. 1396a) is amended by adding at the end the following:
       ``(aa) Payment for Services Provided by Federally-Qualified 
     Health Centers and Rural Health Clinics.--
       ``(1) In general.--Beginning with fiscal year 2001 and each 
     succeeding fiscal year, the State plan shall provide for 
     payment for services described in section 1905(a)(2)(C) 
     furnished by a Federally-qualified health center and services 
     described in section 1905(a)(2)(B) furnished by a rural 
     health clinic in accordance with the provisions of this 
     subsection.
       ``(2) Fiscal year 2001.--Subject to paragraph (4), for 
     services furnished during fiscal year 2001, the State plan 
     shall provide for payment for such services in an amount 
     (calculated on a per visit basis) that is equal to 100 
     percent of the costs of the center or clinic of furnishing 
     such services during fiscal year 2000 which are reasonable 
     and related to the cost of furnishing such services, or based 
     on such other tests of reasonableness as the Secretary 
     prescribes in regulations under section 1833(a)(3), or, in 
     the case of services to which such regulations do not apply, 
     the same methodology used under section 1833(a)(3), adjusted 
     to take into account any increase in the scope of such 
     services furnished by the center or clinic during fiscal year 
     2001.
       ``(3) Fiscal year 2002 and succeeding fiscal years.--
     Subject to paragraph (4), for services furnished during 
     fiscal year 2002 or a succeeding fiscal year, the State plan 
     shall provide for payment for such services in an amount 
     (calculated on a per visit basis) that is equal to the amount 
     calculated for such services under this subsection for the 
     preceding fiscal year--
       ``(A) increased by the percentage increase in the MEI (as 
     defined in section 1842(i)(3)) applicable to primary care 
     services (as defined in section 1842(i)(4)) for that fiscal 
     year; and
       ``(B) adjusted to take into account any increase in the 
     scope of such services furnished by the center or clinic 
     during that fiscal year.
       ``(4) Establishment of initial year payment amount for new 
     centers or clinics.--

[[Page S8845]]

     In any case in which an entity first qualifies as a 
     Federally-qualified health center or rural health clinic 
     after fiscal year 2000, the State plan shall provide for 
     payment for services described in section 1905(a)(2)(C) 
     furnished by the center or services described in section 
     1905(a)(2)(B) furnished by the clinic in the first fiscal 
     year in which the center or clinic so qualifies in an amount 
     (calculated on a per visit basis) that is equal to 100 
     percent of the costs of furnishing such services during such 
     fiscal year in accordance with the regulations and 
     methodology referred to in paragraph (2). For each fiscal 
     year following the fiscal year in which the entity first 
     qualifies as a Federally-qualified health center or rural 
     health clinic, the State plan shall provide for the payment 
     amount to be calculated in accordance with paragraph (3).
       ``(5) Administration in the case of managed care.--In the 
     case of services furnished by a Federally-qualified health 
     center or rural health clinic pursuant to a contract between 
     the center or clinic and a managed care entity (as defined in 
     section 1932(a)(1)(B)), the State plan shall provide for 
     payment to the center or clinic (at least quarterly) by the 
     State of a supplemental payment equal to the amount (if any) 
     by which the amount determined under paragraphs (2), (3), and 
     (4) of this subsection exceeds the amount of the payments 
     provided under the contract.
       ``(6) Alternative payment methodologies.--Notwithstanding 
     any other provision of this section, the State plan may 
     provide for payment in any fiscal year to a Federally-
     qualified health center for services described in section 
     1905(a)(2)(C) or to a rural health clinic for services 
     described in section 1905(a)(2)(B) in an amount which is 
     determined under an alternative payment methodology that--
       ``(A) is agreed to by the State and the center or clinic; 
     and
       ``(B) results in payment to the center or clinic of an 
     amount which is at least equal to the amount otherwise 
     required to be paid to the center or clinic under this 
     section.''.
       (c) Conforming Amendments.--
       (1) Section 4712 of BBA (111 Stat. 508) is amended by 
     striking subsection (c).
       (2) Section 1915(b) (42 U.S.C. 1396n(b)) is amended by 
     striking ``1902(a)(13)(E)'' and inserting ``1902(a)(15), 
     1902(aa),''.
       (d) Effective Date.--The amendments made by this section 
     take effect on October 1, 2000, and apply to services 
     furnished on or after such date.

     SEC. 702. TRANSITIONAL MEDICAL ASSISTANCE.

       (a) Making Provision Permanent.--
       (1) In general.--Subsection (f) of section 1925 (42 U.S.C. 
     1396r-6) is repealed.
       (2) Conforming amendment.--Section 1902(e)(1) (42 U.S.C. 
     1396a(e)(1)) is repealed.
       (b) State Option of Initial 12-Month Eligibility.--Section 
     1925 (42 U.S.C. 1396r-6) is amended--
       (1) in subsection (a), by adding at the end the following 
     new paragraph:
       ``(5) Option of 12-month initial eligibility period.--A 
     State may elect to treat any reference in this subsection to 
     a 6-month period (or 6 months) as a reference to a 12-month 
     period (or 12 months). In the case of such an election, 
     subsection (b) shall not apply.''; and
       (2) in subsection (b)(1), by inserting ``and subsection 
     (a)(5)'' after ``paragraph (3)''.
       (c) Simplification Options.--
       (1) Removal of administrative reporting requirements for 
     additional 6-month extension.--Section 1925(b) (42 U.S.C. 
     1396r-6(b)) is amended--
       (A) in paragraph (2)--
       (i) in the heading, by striking ``and reporting'';
       (ii) by striking subparagraph (B);
       (iii) in subparagraph (A)(i)--

       (I) by striking ``(I)'' and all that follows through 
     ``(II)'' and inserting ``(i)'';
       (II) by striking ``, and (III)'' and inserting ``and 
     (ii)''; and
       (III) by redesignating such subparagraph as subparagraph 
     (A) (with appropriate indentation); and

       (iv) in subparagraph (A)(ii)--

       (I) by striking ``notify the family of the reporting 
     requirement under subparagraph (B)(ii) and a statement of'' 
     and inserting ``provide the family with notification of''; 
     and
       (II) by redesignating such subparagraph as subparagraph (B) 
     (with appropriate indentation);

       (B) in paragraph (3)(A)--
       (i) in clause (iii)--

       (I) in the heading, by striking ``reporting and test'';
       (II) by striking subclause (I); and
       (III) by redesignating subclauses (II) and (III) as 
     subclauses (I) and (II), respectively; and

       (ii) by striking the last 3 sentences; and
       (C) in paragraph (3)(B), by striking ``subparagraph 
     (A)(iii)(II)'' and inserting ``subparagraph (A)(iii)(I)''.
       (2) Exemption for states covering needy families up to 185 
     percent of poverty.--Section 1925 (42 U.S.C. 1396r-6), as 
     amended by subsection (a), is amended--
       (A) in each of subsections (a)(1) and (b)(1), by inserting 
     ``but subject to subsection (f),'' after ``Notwithstanding 
     any other provision of this title,''; and
       (B) by adding at the end the following new subsection:
       ``(f) Exemption for State Covering Needy Families Up to 185 
     Percent of Poverty.--At State option, the provisions of this 
     section shall not apply to a State that uses the authority 
     under section 1931(b)(2)(C) to make medical assistance 
     available under the State plan under this title, at a 
     minimum, to all individuals described in section 1931(b)(1) 
     in families with gross incomes (determined without regard to 
     work-related child care expenses of such individuals) at or 
     below 185 percent of the income 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.''.
       (3) State option to elect shorter period for requirement 
     for receipt of medical assistance as a condition of 
     eligibility for transitional medical assistance.--Section 
     1925(a)(1) (42 U.S.C. 1396r-6(a)(1)) is amended by inserting 
     ``(or such shorter period as the State may elect)'' after 
     ``3''.
       (d) Application of Notice of Eligibility to All Families 
     Leaving Welfare.--Section 1925(a) (42 U.S.C. 1396r-6(a)), as 
     amended by subsection (b)(1), is amended by adding at the end 
     the following new paragraph:
       ``(6) Notice of eligibility for medical assistance to all 
     families leaving tanf.--Each State shall notify each family 
     which was receiving assistance under the State program funded 
     under part A of title IV and which is no longer eligible for 
     such assistance, of the potential eligibility of the family 
     and any individual members of such family for medical 
     assistance under this title or child health assistance under 
     title XXI. Such notice shall include a statement that the 
     family does not have to be receiving assistance under the 
     State program funded under part A of title IV in order to be 
     eligible for such medical assistance or child health 
     assistance.''.
       (e) Enrollment Data.--Section 1925 (42 U.S.C. 1396r-6), as 
     amended by subsection (c)(2)(B), is amended by adding at the 
     end the following new subsection:
       ``(g) Enrollment Data.--The Secretary annually shall obtain 
     from each State with a State plan approved under this title 
     enrollment data regarding--
       ``(1) the number of adults and children who--
       ``(A) receive medical assistance under this title based on 
     eligibility under section 1931;
       ``(B) at the time they were first determined to be eligible 
     for such medical assistance, also received cash assistance 
     under the State program funded under part A of title IV; and
       ``(C) subsequently ceased to receive assistance under such 
     State program due to increased earnings or increased child 
     support income;
       ``(2) the percentage of the adults and children described 
     in paragraph (1) who receive transitional medical assistance 
     under this section or otherwise remain enrolled in the 
     program under this title; and
       ``(3) the percentage of such adults and children that 
     receive such transitional medical assistance for more than 6 
     months or that remain enrolled in the program under this 
     title for more than 6 months after such adults or children 
     ceased to receive assistance under the State program funded 
     under part A of title IV.''.
       (f) Effective Date.--The amendments made by this section 
     take effect on October 1, 2000.

     SEC. 703. APPLICATION OF SIMPLIFIED SCHIP PROCEDURES UNDER 
                   THE MEDICAID PROGRAM.

       (a) Coordination With Medicaid.--
       (1) In general.--Section 1902(l) (42 U.S.C. 1396a(l)) is 
     amended--
       (A) in paragraph (3), by inserting ``subject to paragraph 
     (5)'', after ``Notwithstanding subsection (a)(17),''; and
       (B) by adding at the end the following new paragraph:
       ``(5) With respect to determining the eligibility of 
     individuals under 19 years of age for medical assistance 
     under subsection (a)(10)(A)(i)(IV), (a)(10)(A)(i)(VI), 
     (a)(10)(A)(i)(VII), (a)(10)(A)(ii)(IX), or 
     (a)(10)(A)(ii)(XIV), notwithstanding any other provision of 
     this title, if the State has established a State child health 
     plan under title XXI, or expanded coverage beyond the income 
     eligibility standards required for such individuals under 
     this title under a waiver granted under section 1115--
       ``(A) the State may not apply a resource standard if the 
     State does not apply such a standard under such child health 
     plan or section 1115 waiver with respect to such individuals;
       ``(B) the State shall use the same simplified eligibility 
     form (including, if applicable, permitting application other 
     than in person) as the State uses under such State child 
     health plan or section 1115 waiver with respect to such 
     individuals;
       ``(C) the State shall provide for initial eligibility 
     determinations and redeterminations of eligibility using the 
     same verification policies, forms, and frequency as the State 
     uses for such purposes under such State child health plan or 
     section 1115 waiver with respect to such individuals; and
       ``(D) the State shall not require a face-to-face interview 
     for purposes of initial eligibility determinations and 
     redeterminations unless the State required such an interview 
     for such purposes under such child health plan or section 
     1115 waiver with respect to such individuals.''.
       (2) Effective date.--The amendments made by paragraph (1) 
     take effect on October 1, 2000, and apply to eligibility 
     determinations and redeterminations made on or after such 
     date.

[[Page S8846]]

       (b) Automatic Reassessment of Eligibility for Title XXI and 
     Medicaid Benefits for Children Losing Medicaid or Title XXI 
     Eligibility.--
       (1) Loss of medicaid eligibility.--Section 1902(a) of the 
     Social Security Act (42 U.S.C. 1396a(a)) is amended--
       (A) by striking the period at the end of paragraph (65) and 
     inserting ``; and'', and
       (B) by inserting after paragraph (65) the following new 
     paragraph:
       ``(66) provide, by not later than the first day of the 
     first month that begins more than 1 year after the date of 
     the enactment of this paragraph and in the case of a State 
     with a State child health plan under title XXI, that before 
     medical assistance to a child (or a parent of a child) is 
     discontinued under this title, a determination of whether the 
     child (or parent) is eligible for benefits under title XXI 
     shall be made and, if determined to be so eligible, the child 
     (or parent) shall be automatically enrolled in the program 
     under such title without the need for a new application and 
     without being asked to provide any information that is 
     already available to the State.''.
       (2) Loss of title xxi eligibility.--Section 2102(b)(3) (42 
     U.S.C. 1397bb(b)(3)) is amended by redesignating 
     subparagraphs (D) and (E) as subparagraphs (E) and (F), 
     respectively, and by inserting after subparagraph (C) the 
     following new subparagraph:
       ``(D) that before health assistance to a child (or a parent 
     of a child) is discontinued under this title, a determination 
     of whether the child (or parent) is eligible for benefits 
     under title XIX is made and, if determined to be so eligible, 
     the child (or parent) is automatically enrolled in the 
     program under such title without the need for a new 
     application and without being asked to provide any 
     information that is already available to the State;''.
       (3) Effective date.--The amendments made by paragraphs (1) 
     and (2) apply to individuals who lose eligibility under the 
     medicaid program under title XIX, or under a State child 
     health insurance plan under title XXI, respectively, of the 
     Social Security Act (42 U.S.C. 1396 et seq.; 1397aa et seq.) 
     on or after the date that is 60 days after the date of the 
     enactment of this Act.

     SEC. 704. PRESUMPTIVE ELIGIBILITY.

       (a) Additional Entities Qualified To Determine Presumptive 
     Eligibility for Low-Income Children.--
       (1) Medicaid.--Section 1920A(b)(3)(A)(i) (42 U.S.C. 1396r-
     1a(b)(3)(A)(i)) is amended--
       (A) by striking ``or (II)'' and inserting ``, (II)''; and
       (B) by inserting ``eligibility of a child for medical 
     assistance under the State plan under this title, or 
     eligibility of a child for child health assistance under the 
     program funded under title XXI, (III) is an elementary school 
     or secondary school, as such terms are defined in section 
     14101 of the Elementary and Secondary Education Act of 1965 
     (20 U.S.C. 8801), an elementary or secondary school operated 
     or supported by the Bureau of Indian Affairs, a State child 
     support enforcement agency, a child care resource and 
     referral agency, an organization that is providing emergency 
     food and shelter under a grant under the Stewart B. McKinney 
     Homeless Assistance Act, or a State office or entity involved 
     in enrollment in the program under this title, under part A 
     of title IV, under title XXI, or that determines eligibility 
     for any assistance or benefits provided under any program of 
     public or assisted housing that receives Federal funds, 
     including the program under section 8 or any other section of 
     the United States Housing Act of 1937 (42 U.S.C. 1437 et 
     seq.), or (IV) any other entity the State so deems, as 
     approved by the Secretary'' before the semicolon.
       (2) Application under schip.--
       (A) In general.--Section 2107(e)(1) (42 U.S.C. 
     1397gg(e)(1)) is amended by adding at the end the following 
     new subparagraph:
       ``(D) Section 1920A (relating to presumptive 
     eligibility).''.
       (B) Exception from limitation on administrative expenses.--
     Section 2105(c)(2) (42 U.S.C. 1397ee(c)(2)) is amended by 
     adding at the end the following new subparagraph:
       ``(C) Exception for presumptive eligibility expenditures.--
     The limitation under subparagraph (A) on expenditures shall 
     not apply to expenditures attributable to the application of 
     section 1920A (pursuant to section 2107(e)(1)(D)), regardless 
     of whether the child is determined to be ineligible for the 
     program under this title or title XIX.''.
       (3) Technical amendments.--Section 1920A (42 U.S.C. 1396r-
     1a) is amended--
       (A) in subsection (b)(3)(A)(ii), by striking ``paragraph 
     (1)(A)'' and inserting ``paragraph (2)(A)''; and
       (B) in subsection (c)(2), in the matter preceding 
     subparagraph (A), by striking ``subsection (b)(1)(A)'' and 
     inserting ``subsection (b)(2)(A)''.
       (b) Elimination of SCHIP Funding Offset for Exercise of 
     Presumptive Eligibility Option.--
       (1) In general.--Section 2104(d) (42 U.S.C. 1397dd(d)) is 
     amended by striking ``the sum of--'' and all that follows 
     through ``(2)'' and conforming the margins of all that 
     remains accordingly.
       (2) Effective date.--The amendment made by paragraph (1) 
     takes effect October 1, 2000, and applies to allotments under 
     title XXI of the Social Security Act (42 U.S.C. 1397aa et 
     seq.) for fiscal year 2001 and each succeeding fiscal year 
     thereafter.

     SEC. 705. IMPROVEMENTS TO THE MATERNAL AND CHILD HEALTH 
                   SERVICES BLOCK GRANT.

       (a) Increase in Authorization of Appropriations.--Section 
     501(a) (42 U.S.C. 701(a)) is amended in the matter preceding 
     paragraph (1) by striking ``$705,000,000 for fiscal year 
     1994'' and inserting ``$1,000,000,000 for fiscal year 2001''.
       (b) Coordination With Medicaid and SCHIP.--
       (1) Schip.--Section 505(a)(5)(F) (42 U.S.C. 705(a)(5)(F)) 
     is amended--
       (A) in clause (ii), by inserting ``and in the coordination 
     of the administration of the State program under title XXI 
     with the care and services available under this title, as 
     required under subsections (b)(3)(G) and (c)(2) of section 
     2102'' before the comma; and
       (B) in clause (iv), by striking ``and infants who are 
     eligible for medical assistance under subparagraph (A) or (B) 
     of section 1902(l)(1)'' and inserting ``, infants, and 
     children who are eligible for medical assistance under 
     section 1902(l)(1), and children who are eligible for child 
     health assistance under the State program under title XXI''.
       (2) Conforming amendments to schip.--Section 2102(b)(3) (42 
     U.S.C. 1397bb(b)(3)), as amended by section 703(b)(2), is 
     amended--
       (A) by striking ``and'' at the end of subparagraph (E);
       (B) by striking the period at the end of subparagraph (F) 
     and inserting ``; and''; and
       (C) by adding at the end the following new subparagraph:
       ``(G) that operations and activities under this title are 
     developed and implemented in consultation and coordination 
     with the program operated by the State under title V with 
     respect to outreach and enrollment, benefits and services, 
     service delivery standards, public health and social service 
     agency relationships, and quality assurance and data 
     reporting.''.
       (c) Effective Date.--The amendments made by this section 
     take effect on October 1, 2000.

     SEC. 706. IMPROVING ACCESS TO MEDICARE COST-SHARING 
                   ASSISTANCE FOR LOW-INCOME BENEFICIARIES.

       (a) Increase in SLMB Eligibility.--
       (1) In general.--Section 1902(a)(10)(E) (42 U.S.C. 
     1396a(a)(10)(E)) is amended--
       (A) in clause (iii), by striking ``and 120 percent in 
     1995'' and inserting ``, 120 percent in 1995 through 2000, 
     and 135 percent in 2001''; and
       (B) in clause (iv), by striking ``2002)--'' and all that 
     follows through ``(II) for'' and inserting ``2002) for''.
       (2) Conforming amendment.--Section 1933(c)(2)(A) (42 U.S.C. 
     1396u-3(c)(2)(A)) is amended by striking ``sum of--'' and all 
     that follows through ``(ii) the''''.
       (3) Effective date.--The amendments made by this subsection 
     take effect on January 1, 2001, and with respect to the 
     amendment made by paragraph (2), applies to allocations 
     determined under section 1933(c) of the Social Security Act 
     (42 U.S.C. 1396u-3(c)) for the last 3 quarters of fiscal year 
     2001 and all of fiscal year 2002.
       (b) Index of Assets Test to Inflation.--Section 
     1905(p)(1)(C) (42 U.S.C. 1396d(p)(1)(C)) is amended by 
     inserting ``, increased (beginning with 2001 and each year 
     thereafter) by the percentage increase (if any) in the 
     Consumer Price Index for All Urban Consumers (United States 
     city average)'' before the period.
       (c) Increased Effort To Provide Medicare Beneficiaries With 
     Medicare Cost-Sharing Under the Medicaid Program.--
       (1) In general.--Section 1902(a) (42 U.S.C. 1396a(a)), as 
     amended by section 703(b)(1)(A), is amended--
       (A) in paragraph (65), by striking ``and'' at the end;
       (B) in paragraph (66), by striking the period and inserting 
     ``; and''; and
       (C) by inserting after paragraph (66) the following new 
     paragraph:
       ``(67) provide for the determination of eligibility for 
     medicare cost-sharing (as defined in section 1905(p)(3)) for 
     individuals described in paragraph (10)(E) and, if eligible 
     for such medicare cost-sharing, for the enrollment of such 
     individuals at any hospital, clinic, or similar entity at 
     which State or local agency personnel are stationed for the 
     purpose of determining the eligibility of individuals for 
     medical assistance under the State plan or providing outreach 
     services to eligible or potentially eligible individuals.''.
       (2) Effective date.--The amendments made by this paragraph 
     shall take effect on the date of enactment of this Act.
       (d) Presumptive Eligibility of Certain Low-Income 
     Individuals for Medicare Cost-Sharing Under the QMB or SLMB 
     Program.--Title XIX (42 U.S.C. 1396 et seq.) is amended by 
     inserting after section 1920A the following new section:


      ``presumptive eligibility of certain low-income individuals

       ``Sec. 1920B. (a) A State plan approved under section 1902 
     shall provide for making medical assistance with respect to 
     medicare cost-sharing covered under the State plan available 
     to a low-income individual on the date the low-income 
     individual becomes entitled to benefits under part A of title 
     XVIII during a presumptive eligibility period.
       ``(b) For purposes of this section:
       ``(1) The term `low-income individual' means an individual 
     who at the age of 65 years is described--
       ``(A) in section 1902(a)(10)(E)(i), or
       ``(B) in section 1902(a)(10)(E)(iii).
       ``(2) The term `medicare cost-sharing'--

[[Page S8847]]

       ``(A) with respect to an individual described in paragraph 
     (1)(A), has the meaning given such term in section 
     1905(p)(3); and
       ``(B) with respect to an individual described in paragraph 
     (1)(B), has the meaning given such term in section 
     1905(p)(3)(A).
       ``(3) The term `presumptive eligibility period' means, with 
     respect to a low-income individual, the period that--
       ``(A) begins with the date on which a qualified entity 
     determines, on the basis of preliminary information, that the 
     income and resources of the individual do not exceed the 
     applicable income and resource level of eligibility under the 
     State plan, and
       ``(B) ends with (and includes) the earlier of--
       ``(i) the day on which a determination is made with respect 
     to the eligibility of the low-income individual for medical 
     assistance for medical cost-sharing under the State plan, or
       ``(ii) in the case of a low-income individual on whose 
     behalf an application is not filed by the last day of the 
     month following the month during which the entity makes the 
     determination referred to in subparagraph (A), such last day.
       ``(4)(A) Subject to subparagraph (B), the term `qualified 
     entity' means any of the following:
       ``(i) Qualified individuals within the Social Security 
     Administration.
       ``(ii) An entity determined by the State agency to be 
     capable of making determinations of the type described in 
     paragraph (3).
       ``(B) The Secretary may issue regulations further limiting 
     those entities that may become qualified entities in order to 
     prevent fraud and abuse and for other reasons.
       ``(c)(1) The State agency, after consultation with the 
     Secretary, shall provide qualified entities with--
       ``(A) such forms as are necessary for an application to be 
     made on behalf of a low-income individual for medical 
     assistance for medical cost-sharing under the State plan, and
       ``(B) information on how to assist low-income individuals 
     and other persons in completing and filing such forms.
       ``(2) A qualified entity that determines under subsection 
     (b)(2)(A) that a low-income individual is presumptively 
     eligible for medical assistance for medical cost-sharing 
     under a State plan shall--
       ``(A) notify the State agency of the determination within 5 
     working days after the date on which the determination is 
     made, and
       ``(B) inform the low-income individual at the time the 
     determination is made that an application for medical 
     assistance for medical cost-sharing under the State plan is 
     required to be made by not later than the last day of the 
     month following the month during which the determination is 
     made.
       ``(3) In the case of a low-income individual who is 
     determined by a qualified entity to be presumptively eligible 
     for medical assistance for medical cost-sharing under a State 
     plan, the low-income individual shall make application for 
     medical assistance for medical cost-sharing under such plan 
     by not later than the last day of the month following the 
     month during which the determination is made.
       ``(d) Notwithstanding any other provision of this title, 
     medical assistance for medicare cost-sharing that--
       ``(1) is furnished to a low-income individual during a 
     presumptive eligibility period under the State plan; and
       ``(2) is included in the services covered by a State plan;
     shall be treated as medical assistance provided by such plan 
     for purposes of section 1903.''.

     SEC. 707. BREAST AND CERVICAL CANCER PREVENTION AND 
                   TREATMENT.

       (a) Coverage as Optional Categorically Needy Group.--
       (1) In general.--Section 1902(a)(10)(A)(ii) (42 U.S.C. 
     1396a(a)(10)(A)(ii)) is amended--
       (A) in subclause (XVI), by striking ``or'' at the end;
       (B) in subclause (XVII), by adding ``or'' at the end; and
       (C) by adding at the end the following:

       ``(XVIII) who are described in subsection (aa) (relating to 
     certain breast or cervical cancer patients);''.

       (2) Group described.--Section 1902 (42 U.S.C. 1396a) is 
     amended by adding at the end the following:
       ``(aa) Individuals described in this subsection are 
     individuals who--
       ``(1) are not described in subsection (a)(10)(A)(i);
       ``(2) have not attained age 65;
       ``(3) have been screened for breast and cervical cancer 
     under the Centers for Disease Control and Prevention breast 
     and cervical cancer early detection program established under 
     title XV of the Public Health Service Act (42 U.S.C. 300k et 
     seq.) in accordance with the requirements of section 1504 of 
     that Act (42 U.S.C. 300n) and need treatment for breast or 
     cervical cancer; and
       ``(4) are not otherwise covered under creditable coverage, 
     as defined in section 2701(c) of the Public Health Service 
     Act (42 U.S.C. 300gg(c)).''.
       (3) Limitation on benefits.--Section 1902(a)(10) (42 U.S.C. 
     1396a(a)(10)) is amended in the matter following subparagraph 
     (G)--
       (A) by striking ``and (XIII)'' and inserting ``(XIII)''; 
     and
       (B) by inserting ``, and (XIV) the medical assistance made 
     available to an individual described in subsection (aa) who 
     is eligible for medical assistance only because of 
     subparagraph (A)(10)(ii)(XVIII) shall be limited to medical 
     assistance provided during the period in which such an 
     individual requires treatment for breast or cervical cancer'' 
     before the semicolon.
       (4) Conforming amendments.--Section 1905(a) (42 U.S.C. 
     1396d(a)) is amended in the matter preceding paragraph (1)--
       (A) in clause (xi), by striking ``or'' at the end;
       (B) in clause (xii), by adding ``or'' at the end; and
       (C) by inserting after clause (xii) the following:
       ``(xiii) individuals described in section 1902(aa),''.
       (b) Presumptive Eligibility.--
       (1) In general.--Title XIX (42 U.S.C. 1396 et seq.) is 
     amended by inserting after section 1920A the following:


    ``presumptive eligibility for certain breast or cervical cancer 
                                patients

       ``Sec. 1920B. (a) State Option.--A State plan approved 
     under section 1902 may provide for making medical assistance 
     available to an individual described in section 1902(aa) 
     (relating to certain breast or cervical cancer patients) 
     during a presumptive eligibility period.
       ``(b) Definitions.--For purposes of this section:
       ``(1) Presumptive eligibility period.--The term 
     `presumptive eligibility period' means, with respect to an 
     individual described in subsection (a), the period that--
       ``(A) begins with the date on which a qualified entity 
     determines, on the basis of preliminary information, that the 
     individual is described in section 1902(aa); and
       ``(B) ends with (and includes) the earlier of--
       ``(i) the day on which a determination is made with respect 
     to the eligibility of such individual for services under the 
     State plan; or
       ``(ii) in the case of such an individual who does not file 
     an application by the last day of the month following the 
     month during which the entity makes the determination 
     referred to in subparagraph (A), such last day.
       ``(2) Qualified entity.--
       ``(A) In general.--Subject to subparagraph (B), the term 
     `qualified entity' means any entity that--
       ``(i) is eligible for payments under a State plan approved 
     under this title; and
       ``(ii) is determined by the State agency to be capable of 
     making determinations of the type described in paragraph 
     (1)(A).
       ``(B) Regulations.--The Secretary may issue regulations 
     further limiting those entities that may become qualified 
     entities in order to prevent fraud and abuse and for other 
     reasons.
       ``(C) Rule of construction.--Nothing in this paragraph 
     shall be construed as preventing a State from limiting the 
     classes of entities that may become qualified entities, 
     consistent with any limitations imposed under subparagraph 
     (B).
       ``(c) Administration.--
       ``(1) In general.--The State agency shall provide qualified 
     entities with--
       ``(A) such forms as are necessary for an application to be 
     made by an individual described in subsection (a) for medical 
     assistance under the State plan; and
       ``(B) information on how to assist such individuals in 
     completing and filing such forms.
       ``(2) Notification requirements.--A qualified entity that 
     determines under subsection (b)(1)(A) that an individual 
     described in subsection (a) is presumptively eligible for 
     medical assistance under a State plan shall--
       ``(A) notify the State agency of the determination within 5 
     working days after the date on which the determination is 
     made; and
       ``(B) inform such individual at the time the determination 
     is made that an application for medical assistance under the 
     State plan is required to be made by not later than the last 
     day of the month following the month during which the 
     determination is made.
       ``(3) Application for medical assistance.--In the case of 
     an individual described in subsection (a) who is determined 
     by a qualified entity to be presumptively eligible for 
     medical assistance under a State plan, the individual shall 
     apply for medical assistance under such plan by not later 
     than the last day of the month following the month during 
     which the determination is made.
       ``(d) Payment.--Notwithstanding any other provision of this 
     title, medical assistance that--
       ``(1) is furnished to an individual described in subsection 
     (a)--
       ``(A) during a presumptive eligibility period; and
       ``(B) by a entity that is eligible for payments under the 
     State plan; and
       ``(2) is included in the care and services covered by the 
     State plan,
     shall be treated as medical assistance provided by such plan 
     for purposes of clause (4) of the first sentence of section 
     1905(b).''.
       (2) Conforming amendments.--
       (A) Section 1902(a)(47) (42 U.S.C. 1396a(a)(47)) is amended 
     by inserting before the semicolon at the end the following: 
     ``and provide for making medical assistance available to 
     individuals described in subsection (a) of section 1920B 
     during a presumptive eligibility period in accordance with 
     such section''.
       (B) Section 1903(u)(1)(D)(v) (42 U.S.C. 1396b(u)(1)(D)(v)) 
     is amended--
       (i) by striking ``or for'' and inserting ``, for''; and

[[Page S8848]]

       (ii) by inserting before the period the following: ``, or 
     for medical assistance provided to an individual described in 
     subsection (a) of section 1920B during a presumptive 
     eligibility period under such section''.
       (c) Enhanced Match.--The first sentence of section 1905(b) 
     (42 U.S.C. 1396d(b)) is amended--
       (1) by striking ``and'' before ``(3)''; and
       (2) by inserting before the period at the end the 
     following: ``, and (4) the Federal medical assistance 
     percentage shall be equal to the enhanced FMAP described in 
     section 2105(b) with respect to medical assistance provided 
     to individuals who are eligible for such assistance only on 
     the basis of section 1902(a)(10)(A)(ii)(XVIII)''.
       (d) Effective Date.--The amendments made by this section 
     apply to medical assistance for items and services furnished 
     on or after October 1, 2000, without regard to whether final 
     regulations to carry out such amendments have been 
     promulgated by such date.

                      TITLE VIII--OTHER PROVISIONS

     SEC. 801. APPROPRIATIONS FOR RICKY RAY HEMOPHILIA RELIEF 
                   FUND.

       Section 101(e) of the Ricky Ray Hemophilia Relief Fund Act 
     of 1998 (42 U.S.C. 300c-22 note) is amended by adding at the 
     end the following: ``There is appropriated to the Fund 
     $475,000,000 for fiscal year 2001, to remain available until 
     expended.''.

     SEC. 802. INCREASE IN APPROPRIATIONS FOR SPECIAL DIABETES 
                   PROGRAMS FOR CHILDREN WITH TYPE I DIABETES AND 
                   INDIANS.

       (a) Special Diabetes Programs for Children With Type I 
     Diabetes.--Section 330B(b) of the Public Health Service Act 
     (42 U.S.C. 254c-2(b)) is amended--
       (1) by striking ``Notwithstanding'' and inserting the 
     following:
       ``(1) Transferred funds.--Notwithstanding''; and
       (2) by adding at the end the following:
       ``(2) Appropriations.--For the purpose of making grants 
     under this section, there are appropriated, out of any money 
     in the Treasury not otherwise appropriated--
       ``(A) $70,000,000 for each of fiscal years 2001 and 2002 
     (which shall be combined with amounts transferred under 
     paragraph (1) for each such fiscal years); and
       ``(B) $100,000,000 for each of fiscal years 2003 through 
     2005.''.
       (b) Special Diabetes Programs for Indians.--Section 330C(c) 
     of the Public Health Service Act (42 U.S.C. 254c-3(c)) is 
     amended--
       (1) by striking ``Notwithstanding'' and inserting the 
     following:
       ``(1) Transferred funds.--Notwithstanding'';
       (2) by adding at the end the following:
       ``(2) Appropriations.--For the purpose of making grants 
     under this section, there are appropriated, out of any money 
     in the Treasury not otherwise appropriated--
       ``(A) $70,000,000 for each of fiscal years 2001 and 2002 
     (which shall be combined with amounts transferred under 
     paragraph (1) for each such fiscal years); and
       ``(B) $100,000,000 for each of fiscal years 2003 through 
     2005.''.

     SEC. 803. DEMONSTRATION GRANTS TO IMPROVE OUTREACH, 
                   ENROLLMENT, AND COORDINATION OF PROGRAMS AND 
                   SERVICES TO HOMELESS INDIVIDUALS AND FAMILIES.

       (a) Authority.--The Secretary of Health and Human Services 
     may award demonstration grants to not more than 7 States (or 
     other qualified entities) to conduct innovative programs that 
     are designed to improve outreach to homeless individuals and 
     families under the programs described in subsection (b) with 
     respect to enrollment of such individuals and families under 
     such programs and the provision of services (and coordinating 
     the provision of such services) under such programs.
       (b) Programs for Homeless Described.--The programs 
     described in this subsection are as follows:
       (1) Medicaid.--The program under title XIX of the Social 
     Security Act (42 U.S.C. 1396 et seq.).
       (2) SCHIP.--The program under title XXI of such Act (42 
     U.S.C. 1397aa et seq.).
       (3) TANF.--The program under part of A of title IV of such 
     Act (42 U.S.C. 601 et seq.).
       (4) Maternal and child health block grants.--The program 
     under title V of the Social Security Act (42 U.S.C. 701 et 
     seq.).
       (5) Mental health and substance abuse block grants.--The 
     program under part B of title XIX of the Public Health 
     Service Act (42 U.S.C. 300x-1 et seq.).
       (6) HIV/AIDS care grants.--The program under part B of 
     title XXVI of the Public Health Service Act (42 U.S.C. 300ff-
     21 et seq.).
       (7) Food stamp program.--The program under the Food Stamp 
     Act of 1977 (7 U.S.C. 2011 et seq.).
       (8) Workforce investment act.--The program under the 
     Workforce Investment Act of 1999 (29 U.S.C. 2801 et seq.).
       (9) Welfare-to-work.--The welfare-to-work program under 
     section 403(a)(5) of the Social Security Act (42 U.S.C. 
     603(a)(5)).
       (10) Other programs.--Other public and private benefit 
     programs that serve low-income individuals.
       (c) Appropriations.--For the purposes of carrying out this 
     section, there are appropriated, out of any funds in the 
     Treasury not otherwise appropriated, $10,000,000, to remain 
     available until expended.

     SEC. 804. PROTECTION OF AN HMO ENROLLEE TO RECEIVE CONTINUING 
                   CARE AT A FACILITY SELECTED BY THE ENROLLEE.

       (a) Amendments to the Employee Retirement Income Security 
     Act of 1974.--
       (1) In general.--Subpart B of part 7 of subtitle B of title 
     I of the Employee Retirement Income Security Act of 1974 (29 
     U.S.C. 1185 et seq.) is amended by adding at the end the 
     following new section:

     ``SEC. 714. ENSURING CHOICE FOR CONTINUING CARE.

       ``(a) In General.--With respect to health insurance 
     coverage provided to participants or beneficiaries through a 
     managed care organization under a group health plan, or 
     through a health insurance issuer providing health insurance 
     coverage in connection with a group health plan, such plan or 
     issuer may not deny coverage for services provided to such 
     participant or beneficiary by a continuing care retirement 
     community, skilled nursing facility, or other qualified 
     facility in which the participant or beneficiary resided 
     prior to a hospitalization, regardless of whether such 
     organization is under contract with such community or 
     facility if the requirements described in subsection (b) are 
     met.
       ``(b) Requirements.--The requirements of this subsection 
     are that--
       ``(1) the service involved is a service for which the 
     managed care organization involved would be required to 
     provide or pay for under its contract with the participant or 
     beneficiary if the continuing care retirement community, 
     skilled nursing facility, or other qualified facility were 
     under contract with the organization;
       ``(2) the participant or beneficiary involved--
       ``(A) resided in the continuing care retirement community, 
     skilled nursing facility, or other qualified facility prior 
     to being hospitalized;
       ``(B) had a contractual or other right to return to the 
     facility after hospitalization; and
       ``(C) elects to return to the facility after 
     hospitalization, whether or not the residence of the 
     participant or beneficiary after returning from the hospital 
     is the same part of the facility in which the beneficiary 
     resided prior to hospitalization;
       ``(3) the continuing care retirement community, skilled 
     nursing facility, or other qualified facility has the 
     capacity to provide the services the participant or 
     beneficiary needs; and
       ``(4) the continuing care retirement community, skilled 
     nursing facility, or other qualified facility is willing to 
     accept substantially similar payment under the same terms and 
     conditions that apply to similarly situated health care 
     facility providers under contract with the organization 
     involved.
       ``(c) Services To Prevent Hospitalization.--A group health 
     plan or health insurance issuer to which this section applies 
     may not deny payment for a skilled nursing service provided 
     to a participant or beneficiary by a continuing care 
     retirement community, skilled nursing facility, or other 
     qualified facility in which the participant or beneficiary 
     resides, without a preceding hospital stay, regardless of 
     whether the organization is under contract with such 
     community or facility, if--
       ``(1) the plan or issuer has determined that the service is 
     necessary to prevent the hospitalization of the participant 
     or beneficiary; and
       ``(2) the service to prevent hospitalization is provided as 
     an additional benefit as described in section 417.594 of 
     title 42, Code of Federal Regulations, and would otherwise be 
     covered as provided for in subsection (b)(1).
       ``(d) Rights of Spouses.--A group health plan or health 
     insurance issuer to which this section applies shall not deny 
     payment for services provided by a skilled nursing facility 
     for the care of a participant or beneficiary, regardless of 
     whether the plan or issuer is under contract with such 
     facility, if the spouse of the participant or beneficiary is 
     already a resident of such facility and the requirements 
     described in subsection (b) are met.
       ``(e) Exceptions.--Subsection (a) shall not apply--
       ``(1) where the attending acute care provider and the 
     participant or beneficiary (or a designated representative of 
     the participant or beneficiary where the participant or 
     beneficiary is physically or mentally incapable of making an 
     election under this paragraph) do not elect to pursue a 
     course of treatment necessitating continuing care; or
       ``(2) unless the community or facility involved--
       ``(A) meets all applicable licensing and certification 
     requirements of the State in which it is located; and
       ``(B) agrees to reimbursement for the care of the 
     participant or beneficiary at a rate similar to the rate 
     negotiated by the managed care organization with similar 
     providers of care for similar services.
       ``(f) Prohibitions.--A group health plan and a health 
     insurance issuer providing health insurance coverage in 
     connection with a group health plan may not--
       ``(1) deny to an individual eligibility, or continued 
     eligibility, to enroll or to renew coverage with a managed 
     care organization under the plan, solely for the purpose of 
     avoiding the requirements of this section;
       ``(2) provide monetary payments or rebates to enrollees to 
     encourage such enrollees to accept less than the minimum 
     protections available under this section;
       ``(3) penalize or otherwise reduce or limit the 
     reimbursement of an attending physician because such 
     physician provided care to a participant or beneficiary in 
     accordance with this section; or

[[Page S8849]]

       ``(4) provide incentives (monetary or otherwise) to an 
     attending physician to induce such physician to provide care 
     to a participant or beneficiary in a manner inconsistent with 
     this section.
       ``(g) Rules of Construction.--
       ``(1) HMO not offering benefits.--This section shall not 
     apply with respect to any managed care organization under a 
     group health plan, or through a health insurance issuer 
     providing health insurance coverage in connection with a 
     group health plan, that does not provide benefits for stays 
     in a continuing care retirement community, skilled nursing 
     facility, or other qualified facility.
       ``(2) Cost-sharing.--Nothing in this section shall be 
     construed as preventing a managed care organization under a 
     group health plan, or through a health insurance issuer 
     providing health insurance coverage in connection with a 
     group health plan, from imposing deductibles, coinsurance, or 
     other cost-sharing in relation to benefits for care in a 
     continuing care facility.
       ``(h) Preemption; Exception for Health Insurance Coverage 
     in Certain States.--
       ``(1) In general.--The requirements of this section shall 
     not apply with respect to health insurance coverage to the 
     extent that a State law (as defined in section 2723(d)(1) of 
     the Public Health Service Act) applies to such coverage and 
     is described in any of the following subparagraphs:
       ``(A) Such State law requires such coverage to provide for 
     referral to a continuing care retirement community, skilled 
     nursing facility, or other qualified facility in a manner 
     that is more protective of participants or beneficiaries than 
     the provisions of this section.
       ``(B) Such State law expands the range of services or 
     facilities covered under this section and is otherwise more 
     protective of the rights of participants or beneficiaries 
     than the provisions of this section.
       ``(2) Construction.--Section 731(a)(1) shall not be 
     construed to provide that any requirement of this section 
     applies with respect to health insurance coverage, to the 
     extent that a State law described in paragraph (1) applies to 
     such coverage.
       ``(i) Penalties.--A participant or beneficiary may enforce 
     the provisions of this section in an appropriate Federal 
     district court. An action for injunctive relief or damages 
     may be commenced on behalf of the participant or beneficiary 
     by the participant's or beneficiary's legal representative. 
     The court may award reasonable attorneys' fees to the 
     prevailing party. If a beneficiary dies before conclusion of 
     an action under this section, the action may be maintained by 
     a representative of the participant's or beneficiary's 
     estate.
       ``(j) Definitions.--In this section:
       ``(1) Attending acute care provider.--The term `attending 
     acute care provider' means anyone licensed or certified under 
     State law to provide health care services who is operating 
     within the scope of such license and who is primarily 
     responsible for the care of the enrollee.
       ``(2) Continuing care retirement community.--The term 
     `continuing care retirement community' means an organization 
     that provides or arranges for the provision of housing and 
     health-related services to an older person under an agreement 
     effective for the life of the person or for a specified 
     period greater than 1 year.
       ``(3) Managed care organization.--The term `managed care 
     organization' means an organization that provides 
     comprehensive health services to participants or 
     beneficiaries, directly or under contract or other agreement, 
     on a prepayment basis to such individuals. For purposes of 
     this section, the following shall be considered as managed 
     care organizations:
       ``(A) A Medicare+Choice plan authorized under section 
     1851(a) of the Social Security Act (42 U.S.C. 1395w-21(a)).
       ``(B) Any other entity that manages the cost, utilization, 
     and delivery of health care through the use of predetermined 
     periodic payments to health care providers employed by or 
     under contract or other agreement, directly or indirectly, 
     with the entity.
       ``(4) Other qualified facility.--The term `other qualified 
     facility' means any facility that can provide the services 
     required by the participant or beneficiary consistent with 
     State and Federal law.
       ``(5) Skilled nursing facility.--The term `skilled nursing 
     facility' means a facility that meets the requirements of 
     section 1819 of the Social Security Act (42 U.S.C. 1395i-
     3).''.
       (2) Clerical amendment.--The table of contents in section 1 
     of the Employee Retirement Income Security Act of 1974 is 
     amended by inserting after the items relating to subpart B of 
     part 7 of subtitle B of title I the following new item:

``Sec. 714. Ensuring choice for continuing care.''.
       (3) Effective date.--The amendments made by this section 
     shall apply with respect to plan years beginning on or after 
     January 1, 2001.
       (b) Amendment to the Public Health Service Act Relating to 
     the Group Market.--
       (1) In general.--Subpart 2 of part A of title XXVII of the 
     Public Health Service Act (42 U.S.C. 300gg-4 et seq.) is 
     amended by adding at the end the following new section:

     ``SEC. 2707. ENSURING CHOICE FOR CONTINUING CARE.

       ``(a) In General.--With respect to health insurance 
     coverage provided to enrollees through a managed care 
     organization under a group health plan, or through a health 
     insurance issuer providing health insurance coverage in 
     connection with a group health plan, such plan or issuer may 
     not deny coverage for services provided to such enrollee by a 
     continuing care retirement community, skilled nursing 
     facility, or other qualified facility in which the enrollee 
     resided prior to a hospitalization, regardless of whether 
     such organization is under contract with such community or 
     facility if the requirements described in subsection (b) are 
     met.
       ``(b) Requirements.--The requirements of this subsection 
     are that--
       ``(1) the service involved is a service for which the 
     managed care organization involved would be required to 
     provide or pay for under its contract with the enrollee if 
     the continuing care retirement community, skilled nursing 
     facility, or other qualified facility were under contract 
     with the organization;
       ``(2) the enrollee involved--
       ``(A) resided in the continuing care retirement community, 
     skilled nursing facility, or other qualified facility prior 
     to being hospitalized;
       ``(B) had a contractual or other right to return to the 
     facility after hospitalization; and
       ``(C) elects to return to the facility after 
     hospitalization, whether or not the residence of the enrollee 
     after returning from the hospital is the same part of the 
     facility in which the beneficiary resided prior to 
     hospitalization;
       ``(3) the continuing care retirement community, skilled 
     nursing facility, or other qualified facility has the 
     capacity to provide the services the enrollee needs; and
       ``(4) the continuing care retirement community, skilled 
     nursing facility, or other qualified facility is willing to 
     accept substantially similar payment under the same terms and 
     conditions that apply to similarly situated health care 
     facility providers under contract with the organization 
     involved.
       ``(c) Services To Prevent Hospitalization.--A group health 
     plan or health insurance issuer to which this section applies 
     may not deny payment for a skilled nursing service provided 
     to an enrollee by a continuing care retirement community, 
     skilled nursing facility, or other qualified facility in 
     which the enrollee resides, without a preceding hospital 
     stay, regardless of whether the plan or issuer is under 
     contract with such community or facility, if--
       ``(1) the plan or issuer has determined that the service is 
     necessary to prevent the hospitalization of the enrollee; and
       ``(2) the service to prevent hospitalization is provided as 
     an additional benefit as described in section 417.594 of 
     title 42, Code of Federal Regulations, and would be covered 
     as provided for in subsection (b)(1).
       ``(d) Rights of Spouses.--A group health plan or health 
     insurance issuer to which this section applies shall not deny 
     payment for services provided by a skilled nursing facility 
     for the care of an enrollee, regardless of whether the plan 
     or issuer is under contract with such facility, if the spouse 
     of the enrollee is already a resident of such facility and 
     the requirements described in subsection (b) are met.
       ``(e) Exceptions.--Subsection (a) shall not apply--
       ``(1) where the attending acute care provider and the 
     enrollee (or a designated representative of the enrollee 
     where the enrollee is physically or mentally incapable of 
     making an election under this paragraph) do not elect to 
     pursue a course of treatment necessitating continuing care; 
     or
       ``(2) unless the community or facility involved--
       ``(A) meets all applicable licensing and certification 
     requirements of the State in which it is located; and
       ``(B) agrees to reimbursement for the care of the enrollee 
     at a rate similar to the rate negotiated by the managed care 
     organization with similar providers of care for similar 
     services.
       ``(f) Prohibitions.--A group health plan and a health 
     insurance issuer providing health insurance coverage in 
     connection with a group health plan may not--
       ``(1) deny to an individual eligibility, or continued 
     eligibility, to enroll or to renew coverage with a managed 
     care organization under the plan, solely for the purpose of 
     avoiding the requirements of this section;
       ``(2) provide monetary payments or rebates to enrollees to 
     encourage such enrollees to accept less than the minimum 
     protections available under this section;
       ``(3) penalize or otherwise reduce or limit the 
     reimbursement of an attending physician because such 
     physician provided care to an enrollee in accordance with 
     this section; or
       ``(4) provide incentives (monetary or otherwise) to an 
     attending physician to induce such physician to provide care 
     to an enrollee in a manner inconsistent with this section.
       ``(g) Rules of Construction.--
       ``(1) HMO not offering benefits.--This section shall not 
     apply with respect to any managed care organization under a 
     group health plan, or through a health insurance issuer 
     providing health insurance coverage in connection with a 
     group health plan, that does not provide benefits for stays 
     in a continuing care retirement community, skilled nursing 
     facility, or other qualified facility.
       ``(2) Cost-sharing.--Nothing in this section shall be 
     construed as preventing a managed care organization under a 
     group health plan, or through a health insurance issuer

[[Page S8850]]

     providing health insurance coverage in connection with a 
     group health plan, from imposing deductibles, coinsurance, or 
     other cost-sharing in relation to benefits for care in a 
     continuing care facility.
       ``(h) Preemption; Exception for Health Insurance Coverage 
     in Certain States.--
       ``(1) In general.--The requirements of this section shall 
     not apply with respect to health insurance coverage to the 
     extent that a State law (as defined in section 2723(d)(1)) 
     applies to such coverage and is described in any of the 
     following subparagraphs:
       ``(A) Such State law requires such coverage to provide for 
     referral to a continuing care retirement community, skilled 
     nursing facility, or other qualified facility in a manner 
     that is more protective of the enrollee than the provisions 
     of this section.
       ``(B) Such State law expands the range of services or 
     facilities covered under this section and is otherwise more 
     protective of enrollee rights than the provisions of this 
     section.
       ``(2) Construction.--Section 2723(a)(1) shall not be 
     construed to provide that any requirement of this section 
     applies with respect to health insurance coverage, to the 
     extent that a State law described in paragraph (1) applies to 
     such coverage.
       ``(i) Penalties.--An enrollee may enforce the provisions of 
     this section in an appropriate Federal district court. An 
     action for injunctive relief or damages may be commenced on 
     behalf of the enrollee by the enrollee's legal 
     representative. The court may award reasonable attorneys' 
     fees to the prevailing party. If a beneficiary dies before 
     conclusion of an action under this section, the action may be 
     maintained by a representative of the enrollee's estate.
       ``(j) Definitions.--In this section:
       ``(1) Attending acute care provider.--The term `attending 
     acute care provider' means anyone licensed or certified under 
     State law to provide health care services who is operating 
     within the scope of such license and who is primarily 
     responsible for the care of the enrollee.
       ``(2) Continuing care retirement community.--The term 
     `continuing care retirement community' means an organization 
     that provides or arranges for the provision of housing and 
     health-related services to an older person under an agreement 
     effective for the life of the person or for a specified 
     period greater than 1 year.
       ``(3) Managed care organization.--The term `managed care 
     organization' means an organization that provides 
     comprehensive health services to enrollees, directly or under 
     contract or other agreement, on a prepayment basis to such 
     individuals. For purposes of this section, the following 
     shall be considered as managed care organizations:
       ``(A) A Medicare+Choice plan authorized under section 
     1851(a) of the Social Security Act (42 U.S.C. 1395w-21(a)).
       ``(B) Any other entity that manages the cost, utilization, 
     and delivery of health care through the use of predetermined 
     periodic payments to health care providers employed by or 
     under contract or other agreement, directly or indirectly, 
     with the entity.
       ``(4) Other qualified facility.--The term `other qualified 
     facility' means any facility that can provide the services 
     required by the enrollee consistent with State and Federal 
     law.
       ``(5) Skilled nursing facility.--The term `skilled nursing 
     facility' means a facility that meets the requirements of 
     section 1819 of the Social Security Act (42 U.S.C. 1395i-
     3).''.
       (2) Effective date.--The amendment made by this section 
     shall apply with respect to group health plans for plan years 
     beginning on or after January 1, 2001.
       (c) Amendments to the Public Health Service Act Relating to 
     the Individual Market.--
       (1) In general.--The first subpart 3 of part B of title 
     XXVII of the Public Health Service Act (42 U.S.C. 300gg-51 et 
     seq.) (relating to other requirements) is amended--
       (A) by redesignating such subpart as subpart 2; and
       (B) by adding at the end the following new section:

     ``SEC. 2753. ENSURING CHOICE FOR CONTINUING CARE.

       ``The provisions of section 2707 shall apply to health 
     maintenance organization coverage offered by a health 
     insurance issuer in the individual market in the same manner 
     as they apply to such coverage offered by a health insurance 
     issuer in connection with a group health plan in the small or 
     large group market.''.
       (2) Effective date.--The amendment made by this section 
     shall apply with respect to health insurance coverage 
     offered, sold, issued, renewed, in effect, or operated in the 
     individual market on or after January 1, 2001.

     SEC. 805. GRANTS TO DEVELOP AND ESTABLISH REAL CHOICE SYSTEMS 
                   CHANGE INITIATIVES.

       (a) Establishment.--
       (1) In general.--The Secretary of Health and Human Services 
     (in this section referred to as the ``Secretary'') shall 
     award grants described in subsection (b) to States to support 
     real choice systems change initiatives that establish 
     specific action steps and specific timetables to achieve 
     enduring system improvements and to provide consumer-
     responsive long-term services and supports to eligible 
     individuals in the most integrated setting appropriate based 
     on the unique strengths and needs of the individual, the 
     priorities and concerns of the individual (or, as 
     appropriate, the individual's representative), and the 
     individual's desires with regard to participation in 
     community life.
       (2) Eligibility.--To be eligible for a grant under this 
     section, a State shall--
       (A) establish a Consumer Task Force in accordance with 
     subsection (d); and
       (B) submit an application at such time, in such manner, and 
     containing such information as the Secretary may determine. 
     The application shall be jointly developed and signed by the 
     designated State official and the chairperson of such Task 
     Force, acting on behalf of and at the direction of the Task 
     Force.
       (3) Definition of state.--In this section, the term 
     ``State'' means each of the 50 States, the District of 
     Columbia, Puerto Rico, Guam, the United States Virgin 
     Islands, American Samoa, and the Commonwealth of the Northern 
     Mariana Islands.
       (b) Grants for Real Choice Systems Change Initiatives.--
       (1) In general.--From funds appropriated under subsection 
     (f), the Secretary shall award grants to States to--
       (A) support the establishment, implementation, and 
     operation of the State real choice systems change initiatives 
     described in subsection (a); and
       (B) conduct outreach campaigns regarding the existence of 
     such initiatives.
       (2) Determination of awards; state allotments.--The 
     Secretary shall develop a formula for the distribution of 
     funds to States for each fiscal year under subsection (a). 
     Such formula shall give preference to States that have a 
     higher need for assistance, as determined by the Secretary, 
     based on indicators such as a relatively higher proportion of 
     long-term services and supports furnished to individuals in 
     an institutional setting but who have a plan described in an 
     application submitted under subsection (a)(2).
       (c) Authorized Activities.--A State that receives a grant 
     under this section shall use the funds made available through 
     the grant to accomplish the purposes described in subsection 
     (a) and, in accomplishing such purposes, may carry out any of 
     the following systems change activities:
       (1) Needs assessment and data gathering.--The State may use 
     funds to conduct a statewide needs assessment that may be 
     based on data in existence on the date on which the 
     assessment is initiated and may include information about the 
     number of individuals within the State who are receiving 
     long-term services and supports in unnecessarily segregated 
     settings, the nature and extent to which current programs 
     respond to the preferences of individuals with disabilities 
     to receive services in home and community-based settings as 
     well as in institutional settings, and the expected change in 
     demand for services provided in home and community settings 
     as well as institutional settings.
       (2) Institutional bias: remedies and promotion of community 
     participation.--The State may use funds to identify, develop, 
     and implement strategies for modifying policies, practices, 
     and procedures that unnecessarily bias the provision of long-
     term services and supports toward institutional settings and 
     away from home and community-based settings, including 
     policies, practices, and procedures governing statewideness, 
     comparability in amount, duration, and scope of services, 
     financial eligibility, individualized functional assessments 
     and screenings (including individual and family involvement), 
     knowledge about service options, and promotion of self-
     direction of services and community-integrated living and 
     service arrangements that facilitate participation in 
     community life to the fullest extent possible and desired by 
     the individual.
       (3) Over medicalization of services.--The State may use 
     funds to identify, develop, and implement strategies for 
     modifying policies, practices, and procedures that 
     unnecessarily bias the provision of long-term services and 
     supports by health care professionals to the extent that 
     quality services and supports can be provided by other 
     qualified individuals, including policies, practices, and 
     procedures governing service authorization, case management, 
     and service coordination, service delivery options, quality 
     controls, and supervision and training.
       (4) Interagency coordination; single point of entry.--The 
     State may support activities to identify and coordinate 
     Federal and State policies, resources, and services, relating 
     to the provision of long-term services and supports, 
     including the convening of interagency work groups and the 
     entering into of interagency agreements that provide for a 
     single point of entry with one-stop access for long-term 
     support services and the design and implementation of a 
     coordinated screening and assessment system for all persons 
     eligible for long-term services and supports.
       (5) Training and technical assistance.--The State may carry 
     out directly, or may provide support to a public or private 
     entity to carry out training and technical assistance 
     activities that are provided for individuals with 
     disabilities, and, as appropriate, their representatives, 
     attendants, and other personnel (including professionals, 
     paraprofessionals, volunteers, and other members of the 
     community).
       (6) Public awareness.--The State may support a public 
     awareness program that is designed to provide information 
     relating to the availability of choices available to 
     individuals with disabilities for receiving long-

[[Page S8851]]

     term services and support in the most integrated setting 
     appropriate.
       (7) Transitional costs.--The State may use funds to provide 
     transitional costs such as rent and utility deposits, first 
     months's rent and utilities, bedding, basic kitchen supplies, 
     and other necessities required for an individual to make the 
     transition from an institutional facility to a community-
     based home setting where the individual resides.
       (8) Task force.--The State may use funds to support the 
     operation of the Consumer Task Force established under 
     subsection (d).
       (9) Demonstrations of new approaches.--The State may use 
     funds to conduct, on a time-limited basis, the demonstration 
     of new approaches to accomplishing the purposes described in 
     subsection (a)(1).
       (10) Improvement in the quality of services and supports.--
     The State may use funds to improve the quality of services 
     and supports provided to individuals with disabilities and 
     their families.
       (11) Other activities.--The State may use funds for any 
     systems change activities that are not described in any of 
     the preceding paragraphs of this subsection and that are 
     necessary for developing, implementing, or evaluating the 
     comprehensive statewide system of community-integrated long-
     term services and supports.
       (d) Consumer Task Force.--
       (1) Establishment and duties.--To be eligible to receive a 
     grant under this section, each State shall establish a 
     Consumer Task Force (referred to in this section as the 
     ``Task Force'') to assist the State in the development, 
     implementation, and evaluation of real choice systems change 
     initiatives.
       (2) Appointment.--Members of the Task Force shall be 
     appointed by the Chief Executive Officer of the State in 
     accordance with the requirements of paragraph (3), after the 
     solicitation of recommendations from representatives of 
     organizations representing a broad range of individuals with 
     disabilities and organizations interested in individuals with 
     disabilities.
       (3) Composition.--
       (A) In general.--The Task Force shall represent a broad 
     range of individuals with disabilities from diverse 
     backgrounds and shall include representatives from 
     Developmental Disabilities Councils, Mental Health Councils, 
     State Independent Living Centers and Councils, Commissions on 
     Aging, organizations that provide services to individuals 
     with disabilities and consumers of long-term services and 
     supports.
       (B) Individuals with disabilities.--A majority of the 
     members of the Task Force shall be individuals with 
     disabilities or the representatives of such individuals.
       (C) Limitation.--The Task Force shall not include employees 
     of any State agency providing services to individuals with 
     disabilities other than employees of agencies described in 
     the Developmental Disabilities Assistance and Bill of Rights 
     Act (42 U.S.C. 6000 et seq.) or the Protection and Advocacy 
     for Mentally Ill Individuals Act of 1986 (42 U.S.C. 10801 et 
     seq.).
       (e) Availability of Funds.--
       (1) Funds allotted to states.--Funds allotted to a State 
     under a grant made under this section for a fiscal year shall 
     remain available until expended.
       (2) Funds not allotted to states.--Funds not allotted to 
     States in the fiscal year for which they are appropriated 
     shall remain available in succeeding fiscal years for 
     allotment by the Secretary using the allotment formula 
     established by the Secretary under subsection (b)(2).
       (f) Annual Report.--A State that receives a grant under 
     this section shall submit an annual report to the Secretary 
     on the use of funds provided under the grant. Each report 
     shall include the number and percentage increase in the 
     number of eligible individuals in the State who receive long-
     term services and supports in the most integrated setting 
     appropriate, including through community attendant services 
     and supports and other community-based settings.
       (g) Funding.--
       (1) Fiscal year 2001.--For the purpose of making grants 
     under this section, there are appropriated, out of any funds 
     in the Treasury not otherwise appropriated, $50,000,000 for 
     fiscal year 2001.
       (2) Fiscal year 2002 and thereafter.--There is authorized 
     to be appropriated such sums as may be necessary to carry out 
     this section for fiscal year 2002 and each fiscal year 
     thereafter.
                                  ____

  There being no objection, the material was ordered to be printed in 
the Record, as follows:

            Balanced Budget Refinement Act of 2000--Summary

       The Balanced Budget Act (BBA) of 1997 made some important 
     changes in Medicare payment policy and contributed to our 
     current period of budget surpluses through significant cost 
     savings in Medicare. CBO originally estimated the Medicare 
     spending cuts at $112 billion over 5 years. Some of the 
     policies enacted in the BBA, however, cut payments to 
     providers more significantly than expected--in some cases 
     more than double the expected amount--and threaten the 
     survival of institutions and services vital to seniors and 
     their communities throughout the country.
       The Congress addressed some of those unintended 
     consequences last year, by enacting the Balanced Budget 
     Refinement Act (BBRA), which added back $16 billion over 5 
     years in payments to various Medicare providers.
       However, Congress is continuing to hear serious concerns 
     from health care providers and beneficiaries in our States--
     particularly teaching hospitals and hospitals serving people 
     who are uninsured or underinsured, as well as concerns from 
     skilled nursing facilities, rural health providers, home 
     health agencies, and Medicare managed care providers.
       In light of the projected $700 billion on-budget surplus 
     over the next 5 years and the problems facing vital health 
     care services, the Congress should enact an additional, 
     significant package of BBA adjustments and beneficiary 
     protections. Senate Democrats are therefore today introducing 
     the Balanced Budget Refinement Act of 2000 (BBRA-2000), which 
     is a package of payment adjustments and access to care 
     provisions amounting to about $40 billion over 5 years.
       Hospitals. A significant portion of the BBA spending 
     reductions have impacted hospitals. According to the Medicare 
     Payment Advisory Commission (MedPAC), ``Hospitals' financial 
     status deteriorated significantly in 1998 and 1999,'' the 
     years following enactment of BBA. BBRA-2000 would address the 
     most pressing problems facing hospitals by:
       Fully restoring, for fiscal years `01 and `02, inpatient 
     market basket payments to keep up with increases in hospital 
     costs, an improvement that will help all hospitals.
       Preventing implementation of further reductions in (IME) 
     payment rates for vital teaching hospitals--which are on the 
     cutting edge of medical research and provide essential care 
     to a large proportion of indigent patients. Support for 
     medical training and research at independent children's 
     hospitals is also included in the Democratic proposal.
       Targeting additional relief to rural hospitals (Critical 
     Access Hospitals, Medicare Dependent Hospitals, and Sole 
     Community Hospitals) and making it easier for them to qualify 
     for disproportionate share payments under Medicare.
       Providing additional support for hospitals with a 
     disproportionate share of indigent patients, including 
     elimination of scheduled reductions in Medicare and Medicaid 
     disproportionate share (DSH) payments, and extending Medicaid 
     to legal immigrant children and pregnant women, as well as 
     providing State Children's Health Insurance Program (SCHIP) 
     coverage to these children.
       Establishing a grant program to assist hospitals in their 
     transition to a more data intensive care-delivery model.
       Providing Puerto Rico hospitals with a more favorable 
     payment rate (specifically, the inpatient operating blend 
     rate) as MedPAC data suggests is warranted.
       Home Health. The BBA hit home agencies particularly hard. 
     Home health spending dropped 45 percent between 1997 and 
     1999, while the number of home health declined by more than 
     2000 over that period. MedPAC has cautioned against 
     implementing next year the scheduled 15 percent reduction in 
     payments. BBRA-2000 would:
       Repeal the scheduled 15 percent cut in home health 
     payments, delay for at least two years the inclusion of 
     medical supplies in the home health prospective payment 
     system (PPS), and provide a 10-percent upward adjustment in 
     rural home health payments for two years to address the 
     special needs of rural home health agencies in the transition 
     to PPS. BBRA-2000 would also provide an exception for ``very 
     rural'' home health agencies under the branch office 
     definition.
       Provide full update payments (inflation) for medical 
     equipment, oxygen, and other suppliers.
       Skilled Nursing Facilities (SNFs). The BBA was expected to 
     reduce payments to skilled nursing facilities by about $9.5 
     billion. The actual reduction in payments to SNFs over the 
     period is estimated to be significantly larger. BBRA-2000 
     would:
       Allow nursing home payments to keep up with increases in 
     costs through a full market basket update for SNFs for FY 
     2001 and FY 2002, and market basket plus two percent for 
     additional payments.
       Further delay caps on the amount of physical/speech therapy 
     and occupational therapy a patient can receive while the 
     Secretary completes a scheduled study on this issue.
       Rural. Rural providers typically serve a larger proportion 
     of Medicare beneficiaries and are more adversely affected by 
     reductions in Medicare payments. In addition to the rural 
     relief measures noted above (under ``hospitals''), BBRA-2000 
     addresses the unique situation faced in rural areas through a 
     number of measures, including: a permanent ``hold-harmless'' 
     exemption for small rural hospitals from the Medicare 
     Outpatient PPS; assistance for rural home health agencies; a 
     capital loan fund to improve infrastructure of small rural 
     facilities; assistance to develop technology related to new 
     prospective payment systems; bonus payments for providers who 
     serve independent hospitals; ensuring rural facilities can 
     continue to offer quality lab services to beneficiaries; and 
     specific provisions to assist Rural Health Clinics.
       Hospice. Payments to hospics have not kept up with the cost 
     of providing care because of the cost of prescription drugs, 
     the therapies now used in end-of-life care, as well as 
     decreasing lengths of stay. Hospice base rates have not been 
     increased since 1989. BBRA-220 would provide significant 
     additional funding for hospice services to account for their 
     increasing costs, including full market basket updates for 
     fiscal years `01 and `02 and a 10-percent upward adjustment 
     in the underlying hospice rates.

[[Page S8852]]

       Medicare+Choice. This legislation would ensure that 
     appropriate payments are made to Medicare+Choice (M+C) plans. 
     Expenditures by Medicare for its fee-for-service providers 
     included in BBRA-2000 indirectly benefit M+C plans to a 
     significant extent. Moreover, the legislation includes an 
     increase in the M+C growth percentage for fiscal years `01 
     and `02, permitting plans to move to the 50:50 blended 
     payment one year earlier, and allowing plans which have 
     decided to withdraw to reconsider by November 2000.
       Physicians. Congress understands the pressures that 
     physicians face to deliver high-quality care while still 
     complying with payment and other regulatory obligations. 
     BBRA-2000 provides for comprehensive studies of issues 
     important to physicians, including: the practice expense 
     component of the Resource-Based Relative Value Scale (RBRVS) 
     physician payment system, post-payment audits, and regulatory 
     burdens. BBRA-2000 would provide relief to physicians in 
     training, whose debt can often be crushing, by lowering the 
     threshold for loan deferment from $72,000 to $48,000.
       Beneficiary Improvements. Senate Democrats continue to 
     believe that passage of a universal, affordable, voluntary, 
     and meaningful Medicare prescription drug benefit is the 
     highest priority for beneficiaries. In addition, BBRA-2000 
     would directly assist beneficiaries in the following ways:
       Coinsurance: BBRA-2000 would lower beneficiary coinsurance 
     to achieve a true 20 percent beneficiary copayment for all 
     hospital outpatient services within 20 years.
       Preventive Benefits: The bill would provide for significant 
     advances in preventive medicine for Medicare beneficiaries, 
     including waiver of deductibles and cost-sharing, glaucoma 
     screening, counseling for smoking cessation, and nutrition 
     therapy.
       Immunosuppressive Drugs: The bill would remove current 
     restrictions on payment for immunosuppressive drugs for organ 
     transplant patients.
       ALS: The bill would waive the 24-month waiting period for 
     Medicare disability coverage for individuals diagnosed with 
     amyotrophic lateral sclerosis (ALS).
       M+C Transition: For beneficiaries who have lost 
     Medicare+Choice plans in their area, BBRA-2000 includes 
     provisions that would strengthen fee-for-service Medicare and 
     assist beneficiaries in the period immediately following loss 
     of service.
       Return-to-home: The bill would allow beneficiaries to 
     return to the same nursing home or other appropriate site-of-
     care after a hospital stay.
       Other Provisions. BBRA-2000 would address other high 
     priority issues, including: improved payment for dialysis in 
     fee-for-service and M+C to assure access to quality care for 
     end stage renal disease (ESRD) patients; increased market 
     basket updates for ambulance providers in fiscal years `01 
     and `02; an immediate opt-in to the new ambulance fee 
     schedule for affected providers; and enhanced training 
     opportunities for geriatricians and clinical psychologists. 
     BBRA-2000 also includes important modifications to the 
     Community Nursing Organization (CNO) demonstration project, 
     and additional funding for the Ricky Ray Hemophilia program
       Medicaid and SCHIP. The growing number of uninsured 
     individuals and declining enrollment in the Medicaid program 
     are issues which also must be addressed. To improve access to 
     health care for the uninsured and ensure that services 
     available through the Medicaid and SCHIP programs are 
     reaching those eligible for assistance, BBRA-2000 includes 
     the following provisions:
       Improve eligibility and enrollment processes in SCHIP and 
     Medicaid.
       Extend and improve the Transitional Medical Assistance 
     program for people who leave welfare for work.
       Improve access to Medicare cost-sharing assistance for low-
     income beneficiaries.
       Give states grants to develop home and community based 
     services for beneficiaries who would otherwise be in nursing 
     homes.
       Create a new prospective payment system (PPS) for Community 
     Health Centers to ensure they remain a strong, viable 
     component of our health care safety net.
       Extend Medicaid coverage of breast and cervical cancer 
     treatment to women diagnosed through the federally-funded 
     early detection program.
                                  ____

                                              National Immigration


                                                   Law Center,

                               Washington, DC, September 20, 2000.
     Hon. Daniel Patrick Moynihan,
     464 Senate Russell Office Building,
     Washington, DC.
       Dear Senator Moynihan: We strongly applaud your decision to 
     include important health care restorations for low-income 
     immigrant children and pregnant women in the Senate 
     Democrat's Balanced Budget Act Refinement and Access to Care 
     proposal. The provisions would permit federal reimbursement 
     to states that choose to cover lawfully present children and 
     pregnant women under their Medicaid and State Children's 
     Health Insurance Programs.
       As you know, legislation passed in 1996, at a time of very 
     tight budgets, left the safety net for legal immigrants in 
     tatters. As a result, health dare coverage for low-income 
     lawfully present immigrant children and pregnant women has 
     become a state-by-state patchwork, with tragic results. In 
     many states, there is no coverage at all for large numbers of 
     these children and pregnant women.
       The policy of denying federal health care to lawfully 
     present immigrants is unfair and unwise. It is unfair because 
     immigrants pay the same taxes as all others, and deserve the 
     same access to health care that those taxes buy. In fact, 
     immigrant taxes are more than sufficient to pay for the 
     health care needs and all other expenses associated with 
     immigration. The average immigrant contributes $1,800 more 
     each year in taxes than the government pays out for her, 
     including the costs of roads, infrastructure, and education, 
     as well as all government services.
       The policy is unwise because we are counting on these 
     immigrant children to join with all other children in 
     contributing to the American dream. They cannot do so if they 
     are hindered in their early years because they could not 
     obtain health care. And it is unwise because it shifts the 
     responsibility for immigrant health care from the federal to 
     the state governments, rather than maintain a shared federal-
     state responsibility.
       The Balanced Budget Act Refinement and Access to Care 
     proposal recognizes that some of the cuts to health care 
     providers made in the name of balancing the budget went too 
     far. In this time of surpluses, as Congress considers 
     proposals to eliminate the excesses of those budget cuts on 
     behalf of health care providers, Congress should also restore 
     services to lawfully present immigrant children and pregnant 
     women who sacrificed as much as anyone under the budget 
     balancing legislation of the 1990's.
           Sincerely,
         Asian Pacific American Labor Alliance, Alliance for 
           Children and Families, American College Obstetricians 
           and Gynecologists, Center for Public Policy Priorities, 
           Children's Defense Fund, Coalition for Humane Immigrant 
           Rights of Los Angeles, Council of Great City Schools, 
           Families USA, Florida Immigrant Advocacy Center, Inc., 
           Florida Legal Services, Inc., Hebrew Immigrant Aid 
           Society, Immigrant Legal Resource Center, Immigration 
           and Refugee Services of America, Jewish Federation of 
           Metro Chicago, Jewish Council for Public Affairs, March 
           of Dimes, Migrant Legal Action Program, National Asian 
           Pacific American Legal Consortium, National Association 
           of Public Hospitals and Health Systems, National 
           Council of La Raza, National Head Start Association, 
           National Health Law Program, National Korean American 
           Service & Education Consortium (NAKASEC), National 
           Immigration Law Center, New Jersey Immigration Policy 
           Network, Inc., New York Immigration Coalition, 
           Massachusetts Immigrant and Refugee Advocacy Coalition, 
           Southeast Asia Resource Action Center, Texas Appleseed, 
           Texas Immigrant and Refugee Coalition, and United 
           Jewish Communities.
                                  ____

                                    National Association of Public


                                 Hospitals and Health Systems,

                                Washington DC, September 20, 2000.
       Dear Senator Moynihan: I am writing on behalf of the 
     National Association of Public Hospitals & Health Systems 
     (NAPH) to express our strong support for the ``Medicare, 
     Medicaid, and SCHIP Balanced Budget Further Refinement Act of 
     2000.'' NAPH represents more than 100 metropolitan area 
     safety net hospitals and health systems. As safety net 
     institutions, our members are essential providers of care to 
     uninsured and vulnerable populations whose access would 
     otherwise be severely limited. More than 65 percent of the 
     patients served by these systems are either Medicaid 
     recipients or Medicare beneficiaries; another 25 percent are 
     uninsured.
       NAPH is pleased that this legislation includes a number of 
     provisions that will assist low-income Medicaid beneficiaries 
     and the providers that serve them. In particular, we are 
     pleased that the legislation would avert Medicaid DSH 
     allotment reductions after fiscal year 2000 otherwise 
     required by the BBA. Medicaid DSH is our nation's primary 
     source of support for safety net hospitals that serve the 
     most vulnerable Medicaid, uninsured and underinsured 
     patients.
       NAPH has long been supportive of efforts to expand access 
     to health insurance coverage and is pleased that the 
     legislation includes a number of these provisions. In 
     particular, the proposed legislation would allow states the 
     option to provide coverage under Medicaid and/or SCHIP for 
     legal immigrants, which will reduce confusion regarding 
     eligibility in the immigrant community, allow legal 
     immigrants to receive more appropriate care, and improve 
     public health in general. The legislation also includes a 
     state option to provide Medicaid coverage for certain women 
     diagnosed with breast or cervical cancer and provides 
     requirements designed to simplify Medicaid eligibility. We 
     are grateful for your efforts to expand Medicaid and SCHIP to 
     ensure that all low-income Americans have access to 
     appropriate health coverage.
       NAPH is also pleased that the legislation addresses many of 
     the severe payment reductions in many areas (in addition to 
     Medicaid DSH) imposed by the BBA on providers. In particular, 
     NAPH is pleased that the legislation eliminates further 
     Medicare DSH reductions, freezes IME adjustments, and 
     restores the full market basket index update to hospital PPS 
     rates beginning April, 2001.
       We thank you for your ongoing leadership in developing 
     legislation to assure the maintenance of the health care 
     safety net and we look forward to working with you further to 
     develop solutions to the problems of our nation's poor and 
     uninsured. If you have any

[[Page S8853]]

     questions about this letter, please contact Charles Luband at 
     (202) 624-7215.
           Sincerely,
                                                    Larry S. Gage,
     President.
                                  ____

                                       Families USA, The Voice for


                                        Health Care Consumers,

                                               September 20, 2000.
     Senator Patrick Moynihan,
     464 Russell Senate Office Building,
     Washington, DC.
       Dear Senator Moynihan: As you introduce the Medicare, 
     Medicaid and SCHIP Balanced Budget Further Refinement Act of 
     2000, we want to support a number of provisions that will 
     improve low-income people's access to health care coverage. 
     In particular, we support the expansion of Medicaid to 
     certain immigrant children and pregnant women, the 
     improvements for Medicaid adults and children, the changes 
     which will ease enrollment for children who may be eligible 
     for Medicaid and the State Child Health Insurance Program and 
     the changes which will help low-income seniors who may be 
     eligible for the Qualified Medicare Beneficiary (QMB) Program 
     and the Specified Low-Income Medicare Beneficiary (SLMB) 
     Program receive assistance in getting help with Medicare 
     premiums and cost-sharing.
       As you well know, despite the concerted efforts of many 
     people, the number of uninsured Americans has continued to 
     grow. Recent studies have shown that uninsured Americans are 
     less likely to have a usual source of care, are more likely 
     to delay seeking care, and are less likely to use preventive 
     services. In addition, uninsured Americans are four times 
     more likely than insured patients to require both avoidable 
     hospitalizations and emergency hospital care.
       These provisions will help more people get access to public 
     health insurance programs. Please let us know if we can be of 
     assistance in getting these provisions enacted into law.
           Sincerely,
                                                Ronald F. Pollack,
     Executive Director.
                                  ____

                                           Association of Maternal


                                    and Child Health Programs,

                                               September 20, 2000.
     Hon. Daniel Patrick Moynihan,
     U.S. Senate,
     Washington, DC.
       Dear Senator Moynihan: The Association of Maternal and 
     Child Health Programs (AMCHP) strongly supports your efforts 
     to further refine the Balanced Budget Act of 1997 (BBA) and 
     increase access to health care. In particular, we commend 
     your leadership over the years in improving our nation's 
     fiscal health. Through this visionary leadership, the nation 
     now has a projected $2.2 trillion on-budget surplus over the 
     next 10 years. It is both appropriate and fair that a portion 
     of this surplus should help offset severe problems facing our 
     health care services.
       AMCHP strongly supports efforts included in your 
     legislation to improve access to health care for many 
     uninsured people including legal immigrant children and 
     pregnant women. In addition, we applaud efforts to improve 
     eligibility and enrollment processes in SCHIP and Medicaid. 
     AMCHP and its members want to particularly thank you for your 
     support of enhanced coordination and cooperation among the 
     various health care programs aimed at improving maternal and 
     child health and for your efforts to increase the 
     authorization level for Title V.
       The Association of Maternal and Child Health Programs is an 
     organization dedicated to providing leadership in assuring 
     the health and well being of all women of reproductive age, 
     children and youth, including those with special health care 
     needs and their families. The state directors of Title V and 
     related programs formed the association in 1944 to share 
     information and collaborate with each other and others 
     concerned with the health of mothers and children.
       In closing, thank you for your most recent efforts on 
     behalf of maternal and child health through the introduction 
     of legislation intended to further refine the BBA and improve 
     access to health care.
           Very truly yours,
                                              Deborah F. Dietrich,
     Director of Legislative Affairs.
                                  ____

                                           National Association of


                               Community Health Centers, Inc.,

                                               September 20, 2000.
     Hon. Tom Daschle,
     Democratic Leader, U.S. Senate,
     Washington, DC.
     Hon. Daniel Patrick Moynihan,
     Ranking Member, Senate Finance Committee, Washington, DC.
       Dear Senators Daschle and Moynihan: On behalf of the 
     National Association of Community Health Centers (NACHC), the 
     nationwide network of 3,000 health centers, and the more than 
     11 million patients they serve, I am writing to express our 
     extreme gratitude for your inclusion of the text of S. 1277, 
     the Safety Net Preservation act, in your legislation to 
     provide relief from the Balanced Budget Act of 1997 (BBA).
       As you know, the BBA eliminated a fundamental underpinning 
     of America's health center safety net by phasing-out and 
     eventually terminating the Medicaid cost-based reimbursement 
     system for Federally qualified health centers. Because health 
     centers are required by Federal law to provide access to care 
     to anyone, regardless of ability to pay, centers cannot 
     afford to be underpaid for services provided to Medicaid 
     patients. In other words, without this payment system, health 
     centers will be forced to subsidize low Medicaid payments 
     with grant dollars intended to care for the uninsured--
     thereby forcing them to reduce the health care services they 
     provide in their communities.
       In an effort to protect health centers from the loss of 
     this system, the Safety Net Preservation Act has been 
     introduced in the House and Senate to ensure that health 
     centers receive adequate Medicaid payments. This legislation, 
     which has the bipartisan support of 54 members of the Senate 
     and 243 members of the House of Representatives, has been 
     endorsed by NACHC, the National Association of Rural Health 
     Clinics, the National Rural Health Association, the United 
     States Conference of Mayors, and the National Association of 
     Counties.
       Health centers believe that this legislation is essential 
     to their continued survival and will ensure that they remain 
     a viable part of America's health care safety net. Thank you 
     again for your commitment to protecting health centers 
     through your BBA relief legislation. It is our sincerest hope 
     that the Safety Net Preservation Act will be included in any 
     BBA relief package and signed into law by the time the 106th 
     Congress adjourns.
       Please feel free to contact me if there is anything that I 
     can do for you.
           Sincerely,
                                           Thomas J. Van Coverden,
     President and CEO.
                                  ____

                                              Center on Budget and


                                            Policy Priorities,

                                               September 20, 2000.
     Hon. Daniel Patrick Moynihan,
     Senate Russell Building,
     Washington, DC.
       Dear Senator Moynihan: We write to applaud your efforts to 
     help low-income families and children access much-needed 
     health care coverage. In particular, the Center on Budget and 
     Policy Priorities strongly supports provisions in your 
     ``Medicare, Medicaid, and S-CHIP Balanced Budget Refinement 
     Act of 2000'' aimed at reversing a trend of declining access 
     to health coverage by low-income families and immigrant 
     children. These provisions are important because families 
     with children have been losing out on health care coverage as 
     a result of unanticipated consequences of recent federal and 
     state actions.
       A growing body of evidence indicates that a significant 
     number of low-income families with children have been 
     inadvertently harmed by federal and state laws enacted in 
     recent years to promote welfare reform. Despite the best 
     intentions of many policymakers, disturbing numbers of 
     families leaving welfare for work have lost out on health 
     care coverage. Indeed, a recent Center analysis found that 
     roughly half of parents and nearly one out of three children 
     leaving welfare lost Medicaid and were at high risk of being 
     uninsured even though the vast majority of them remained 
     eligible for Medicaid or SCHIP. Similarly, studies indicate 
     that the Medicaid participation of children in legal 
     immigrant families has dropped in recent years. The largest 
     group of such children consists of those who remain eligible 
     for Medicaid because they are citizens of the United States. 
     These children were not the intended targets of immigration-
     based restrictions on Medicaid coverage included in the 1996 
     welfare law, but they nevertheless have been adversely 
     affected by the confusion and fear generated by the 
     immigration-based restrictions on health care coverage 
     included in the 1996 welfare law and modified in the Balanced 
     Budget Act of 1997.
       For these reasons, we strongly applaud the provisions in 
     your legislation that would undue many of the unintended 
     consequences on health care coverage for low-income families 
     of recent state and federal actions, as well as restore 
     health care coverage to all legal immigrant children. In 
     particular, we strongly support the provisions designed to 
     promote the simplification, coordination, and streamlining of 
     states' application and re-enrollment procedures; to expand 
     state flexibility to allow schools and other organizations 
     that work with families to enroll children in health care 
     coverage under the ``presumptive eligibility'' option; to 
     give states more flexibility to provide transitional Medicaid 
     coverage to families leaving welfare for work; and to restore 
     state flexibility to cover legal immigrant children and 
     pregnant women who arrived in the United States after August 
     22, 1996. In combination, these provisions would represent a 
     very significant step forward.
           Sincerely,
                                                Robert Greenstein,
     Executive Director.
                                  ____

                                              THE NATIONAL COUNCIL


                                                 ON THE AGING,

                               Washington, DC, September 20, 2000.
     Hon. Daniel Patrick Moynihan,
     464 Russell Senate Office Building,
     Washington, DC.
       Dear Senator Moynihan: On behalf of the National Council on 
     the Aging (NCOA)--the nation's first organization formed to 
     represent older Americans and those who serve them--I write 
     to express our sincere gratitude and support for the numerous 
     provisions in your Medicare Balanced Budget Act (BBA) 
     refinement bill that would directly help Medicare 
     beneficiaries.
       In particular, we strongly support provisions to: (1) 
     clarify the Medicare home health ``homebound'' problem; (2) 
     improve Medicare low-income protections; (3) improve Medicare 
     coverage and utilization of preventive services; (4) remove 
     the arbitrary

[[Page S8854]]

     cap on immunosuppressive drug coverage; (5) provide grants to 
     states for home and community-based care; and (6) accelerate 
     the phase-in period for reducing hospital outpatient 
     coinsurance.
       First, under current law, in order for Medicare 
     beneficiaries to receive coverage for home health services 
     they must be ``confined to home.'' Current irrational and 
     inconsistent interpretations of this homebound requirement 
     are causing substantial harm to Medicare beneficiaries by 
     effectively forcing home health users to be imprisoned within 
     their own homes. We deeply appreciate the provision to permit 
     beneficiaries with Alzheimer's disease or related dementia to 
     receive therapeutic treatment in adult day centers without 
     losing home health coverage. We urge that you consider going 
     further by including Senator Jeffords' S. 2298, which is 
     endorsed by 46 national organizations and would provide 
     relief for all beneficiaries suffering under the homebound 
     problem.
       Second, our current methods for protecting low-income 
     Medicare beneficiaries against increasing out-of-pocket costs 
     are simply abysmal. A shocking number of those eligible for 
     protection simply do not receive it. Current Medicare low-
     income protections are a national embarrassment. NCOA 
     strongly supports provisions in your bill to: provide for 
     presumptive eligibility for low-income protections; 
     significantly improve the QI-1 program for beneficiaries with 
     incomes between 120% and 135% of poverty; index the asset 
     test to inflation, which is long overdue; and improve 
     outreach for Qualified Medicare Beneficiaries.
       Third, NCOA strongly supports the provisions to improve 
     preventive care for Medicare beneficiaries. It is often 
     easier and less expensive to prevent disease than to cure it. 
     Disease prevention must be an essential component of Medicare 
     beneficiaries' continuum of care. Medicare, however, still 
     fails to cover a number of important preventive services, and 
     those that are covered are underutilized. We support 
     provisions to extend Medicare coverage to tobacco cessation 
     counseling, glaucoma screening and medical nutrition therapy. 
     The addition of these new benefits will accelerate the 
     critical shift in Medicare from a sickness program to a 
     wellness program. We also support the provision to eliminate 
     all coinsurance and deductibles for preventive services. 
     Utilization of these critical services has been surprisingly 
     low. By encouraging greater utilization of these services, 
     beneficiaries' quality of life will be greatly enhanced and 
     Medicare expenditures will decline over the long run.
       Fourth, NCOA supports the provision to eliminate the 
     arbitrary and costly cap on benefits for immunosuppressive 
     drug coverage under Medicare. The Institute of Medicine 
     recently recommended eliminating the time limitation, noting 
     the positive economic, clinical and social implications. It 
     makes no sense for Medicare to pay for the more expensive 
     consequences of organ rejection, such as dialysis or a second 
     transplant, but refuse to pay for the drugs to prevent the 
     rejection of the initial transplanted organ beyond 44 months. 
     This coverage can mean the difference between life and death 
     for some and, for others, the difference between a transplant 
     recipient having to experience the pain of an organ 
     rejection, a return to dialysis--for kidney recipients--and 
     the return to a long waiting list for another organ.
       Fifth, we strongly support providing grants to states for 
     home and community-based care and to assist in implementing 
     the Supreme Court's Olmstead decision. These services are 
     grossly underfunded, resulting in unreasonable and costly 
     burdens on caregivers and premature placement in 
     institutions. Funding for home and community-based care 
     promotes dignity and independence and helps keep families 
     together. America's long-term care crisis will only grow 
     worse as our population ages. The proposed grants are a good 
     start in addressing the serious institutional bias that 
     exists for persons with disabilities needing long-term 
     services and supports.
       Sixth, we support accelerating the phase-in period for 
     reducing hospital outpatient coinsurance. Coinsurance for 
     these services now averages almost 50 percent of costs. 
     Although current law provides that coinsurance amounts will 
     remain fixed at their current dollar level until they are 
     reduced to 20 percent of Medicare-approved payment amounts, 
     the process will take up to 40 years for some services. By 
     comparison, the most gradual phase-in Medicare has used to 
     date for any payment system change is 10 years. The current 
     phase-in schedule is simply far too long.
       NCOA commends and thanks you for your strong leadership on 
     these important issues for America's seniors. Please let us 
     know if there is anything we can do to assist you in enacting 
     these provisions into law this year.
           Sincerely,
                                                    Howard Bedlin,
     Vice President, Public Policy and Advocacy.
                                  ____

                                                  Greater New York


                                         Hospital Association,

                                 New York, NY, September 20, 2000.
     Hon. Daniel Patrick Moynihan,
     464 Russell Senate Office Building,
     Washington, DC.
       Dear Senator Moynihan, The Greater New York Hospital 
     Association (GNYHA) is extremely pleased to express its 
     strong and unqualified support for your bill, ``The Medicare, 
     Medicaid, and SCHIP Balanced Budget Refinement Act of 2000,'' 
     co-sponsored by your colleagues, Senator Charles E. Schumer 
     and Senator Tom Daschle. This bill, if enacted, would greatly 
     improve the Medicare program for all of its beneficiaries as 
     well as provide critical, permanent relief for America's 
     hospitals, skilled nursing facilities, and home health 
     agencies from Medicare reductions contained in the Balanced 
     Budget Act of 1997 (BBA).
       For beneficiaries, your legislation makes a number of 
     important improvements in the Medicare program including new 
     coverage for many critical preventive health care benefits. 
     In addition, you provide an option for states to provide 
     Medicaid and SCHIP coverage for pregnant women and children 
     who, because they are immigrants, have been denied health 
     care coverage due to the restrictions contained in the 
     Personal Responsibility and Work Opportunity Reconciliation 
     Act of 1996. The bill also simplifies the SCHIP enrollment 
     process and improves SCHIP and Medicaid in a variety of other 
     ways. GNYHA strongly supports these provisions.
       Your bill also recognizes that Medicare and Medicaid 
     beneficiaries cannot receive quality health care services 
     unless the health care providers they rely upon have the 
     resources to provide the best care possible. To that end, 
     GNYHA strongly supports the following provisions.
       The bill halts further Medicare reductions to teaching 
     hospitals by maintaining the indirect medical education (IME) 
     payment adjustment at 6.5 percent permanently, incorporating 
     the provisions of your Teaching Hospital Preservation Act (S. 
     2394). As you know, the BBA called for a 29 percent reduction 
     in Medicare payments to teaching hospitals for the indirect 
     costs of medical education. The BBRA postponed the cuts by 
     one year; however, under current law, the IME adjustment 
     would be reduced to 6.25 percent in FY 2001 and 5.5 percent 
     in FY 2002 and years thereafter. The Further Refinement Act 
     freezes IME adjustments at 6.5 percent, saving America's 
     teaching hospitals from over $2 billion in additional 
     Medicare cuts. The bill also provides greater flexibility to 
     allow hospitals to increase the number of residents training 
     in geriatrics and allows hospitals to be reimbursed by 
     Medicare for the costs of training clinical psychologists.
       The bill provides a full market basket update for 
     prospective payment system hospitals, nursing homes, and home 
     health agencies for the next two years. Under the BBA, 
     hospitals would have received market basket minus 1.1 percent 
     in FY 2001 and FY 2002, and nursing homes and home health 
     agencies would have received market basket minus 1 percent. 
     The BBA reduced inflation updates so substantially that the 
     market basket update reductions constituted the largest 
     single cuts suffered by hospitals and continuing care 
     providers under the BBA. This bill ensures Medicare payments 
     will keep pace with the increased costs of caring for 
     Medicare beneficiaries by providing full market basket 
     updates.
       This bill restores Medicare funding for disproportionate 
     share hospitals (DSH) by eliminating cuts in DSH payments, 
     thus strengthening the safety net DSH hospitals provide for 
     low-income patients.
       The bill eliminates further reductions in Medicare DSH 
     payments to states, thus enabling states to provide critical 
     support for hospitals that serve a disproportionate share of 
     low-income and uninsured patients.
       The bill creates a grant program to help hospitals obtain 
     advanced information systems to improve quality and 
     efficiency.
       The bill eliminates the 15 percent reduction for home 
     health reimbursement rates, which under current law would 
     take affect in 2002.
       The bill extends the ``prudent layperson'' standard to 
     ambulance services, so that ambulance providers are not 
     unfairly denied payment by HMOs for services legitimately 
     provided to Medicare beneficiaries.
       The Medicare, Medicaid, and SCHIP Balanced Budget Further 
     Refinement Act of 2000 recognizes the need to improve the 
     Medicare program by providing much-needed coverage for 
     Medicare beneficiaries, the need to improve the Medicaid and 
     SCHIP programs for low-income Americans, and the need to 
     repair the damage to hospitals and continuing care providers 
     as a result of the BBA. Without your efforts, hospitals and 
     continuing care providers will continue to struggle to 
     provide quality care and will be forced to close down 
     services essential to the health care needs of their 
     communities.
       GNYHA will work diligently with members of Congress to 
     ensure passage of this very important legislation. GNYHA 
     would like to thank you for once again providing the strong 
     leadership necessary to improve the health care of all New 
     Yorkers.
       My best.
           Sincerely,
                                                 Kenneth E. Raske,
                                                        President.

  Mr. DASCHLE. Mr. President, I join today with Senator Moynihan and 
many of our colleagues in introducing the Balanced Budget Refinement 
Act of 2000 (BBRA-2000).
  The Balanced Budget Act of 1997 (BBA) made some justified changes in 
Medicare payment policy and contributed to our current budget 
surpluses. It also included important provisions to improve seniors' 
access to preventive benefits, and it created the Children's

[[Page S8855]]

Health Insurance Program. These are important accomplishments.
  But some of the policies enacted in the BBA cut providers 
significantly more than expected. This has created severe problems for 
health care providers all over the country. Last year, we took steps to 
correct these problems. But we did not go far enough.
  When I met with hospital administrators in South Dakota earlier this 
summer, one told me that since the cuts from the BBA were implemented, 
his hospital has been just barely breaking even. Usually, that alone 
would be cause for concern. But then other hospital administrators told 
me they were jealous, because they are far from breaking even. In my 
state, the operating margins for hospitals with 50 or fewer beds were a 
relatively healthy 2 percent before the BBA. Last year, these small 
hospitals--which are so vital to their communities--had negative 
margins of 6 percent.
  Hospitals are not the only health care providers facing this problem. 
Home health agencies, nursing homes, hospices, and many other providers 
are all struggling to make ends meet in the face of deeper-than-
expected cuts.
  The package of payment adjustments that Senate Democrats are 
introducing today will provide a much-needed boost to these providers--
totaling $80 billion over 10 years. This will ensure that Medicare 
beneficiaries continue to have access to the care that we have promised 
them.
  The bill has many provisions, but I would like to highlight a few.
  For hospitals, BBRA-2000 would restore the full inflation update. It 
would also improve payments for Disproportionate Share Hospitals (DSH) 
and teaching hospitals, who provide essential care for some of the 
neediest patients.
  Our bill repeals the 15 percent cut in home health, and delays adding 
medical supplies to the home health prospective payment system (PPS). 
These fixes are essential to an industry that has seen an unprecedented 
drop in spending.
  For skilled nursing facilities we would restore the full inflation 
update, with an additional two percent increase in fiscal years 2001 
and 2002. We would also delay therapy caps for two additional years so 
that beneficiaries do not face an arbitrary limit on the amount of care 
they can receive.
  Although the cost of providing care at the end of life has risen 
dramatically, the base for hospice payments has not been changed since 
1989. The bill restores the full inflation update for hospice 
providers, and provides a ten percent upward adjustment in hospice base 
rates.
  We are committed to ensuring that appropriate payments are made to 
Medicare+Choice plans. BBRA-2000 increases the growth rate in payments 
to these plans and allows plans to move to a 50-50 national blend one 
year earlier.
  The bill also improves payment for ambulance providers, medical 
equipment suppliers, and dialysis facilities, who all provide important 
services to Medicare beneficiaries.
  We recognize the special circumstances of rural health care providers 
in our bill. The rural health provisions include increasing payments 
for small rural hospitals, rural home health agencies, and rural 
ambulance providers.
  There are other steps we need to take to improve beneficiaries' 
access to care. The bill we are introducing today includes a package of 
refinements to Medicare that directly help beneficiaries. For example, 
the bill will build on provisions in the BBA to lower beneficiary 
copayments and expand preventive benefits in Medicare.
  We also provide for increased access to health care through 
improvements to Medicaid and the Children's Health Insurance Program. 
These include changes to the BBA, such as improving state processes for 
enrolling people who are eligible for Medicaid and CHIP. We also make 
changes to the health-related provisions of immigration and welfare 
reform legislation that passed in 1996. For example, the bill would 
extend assistance to people who leave welfare for work.
  Senate Democrats continue to believe that passage of an affordable, 
voluntary, meaningful Medicare prescription drug benefit is of highest 
priority. This bill, the Balanced Budget Refinement Act of 2000, is the 
next step in ensuring that beneficiaries have access to the care they 
need.
  I want to thank Senator Moynihan and his staff for their hard work 
putting this bill together. They have spent the last two months 
listening to health care providers, beneficiaries, community leaders, 
and members of our caucus. Through that listening process they have 
drafted a bill that addresses the needs of the many communities that 
are struggling to deal with the impact of the Balanced Budget Act.
  We know the problems providers are facing in health care. And we know 
how to fix many of them. The bill we are introducing today is a 
comprehensive plan to ensure the stability that health care providers 
need and that beneficiaries depend on. We must take this opportunity to 
act, before it is too late to save some of the providers who are so 
close to closing their doors.
  Mr. KENNEDY. Mr. President, it is a privilege to join Senator 
Daschle, Senator Moynihan, and other colleagues in introducing the 
Balanced Budget Refinement Act of 2000. This bill takes the next step 
in our continued effort to restore the excessive Medicare cuts in the 
Balanced Budget Act of 1997. This legislation also includes several 
proposals to ease the financial burden and improve care for all 
beneficiaries. It also includes important proposals to increase the 
effectiveness of Medicaid and the children's Health Insurance Program, 
and to improve access to care for vulnerable populations, including 
legal immigrant children and pregnant women. Our goal is to pass this 
legislation before the end of the year.
  The cost-saving measures enacted by Congress as part of the Balanced 
Budget Act of 1997 have turned out to be far deeper than the estimates 
at that time, and these excessive cuts have put countless outstanding 
health care institutions across the country at risk.
  In Massachusetts, 25 percent of home health agencies no longer serve 
Medicare patients. Forty-three nursing homes have closed in the state 
since 1998, and another 20 percent are in bankruptcy. Two out of every 
three hospitals in Massachusetts are losing money on patient care.
  The record surpluses we currently enjoy and anticipate in the years 
ahead are partly due to the savings achieved by cutting Medicare in the 
BBA. Most of these savings came from policy and payment reforms, 
including actual cuts in payments for various services. While some 
changes were clearly justified, the overall cuts were much deeper than 
intended and are too severe to sustain.
  Last year, in passing the Balanced Budget Refinement Act of 1999, we 
made a good start. It gave needed relief to Medicare providers. But 
when we enacted that bill last year, we also knew that it was only a 
down-payment, and that additional relief would be needed.
  The bill we are introducing today follows through on that commitment. 
It would invest $80 billion over 10 years to restore payments to 
Medicare and Medicaid providers, improve benefits, and increase access 
to health care under Medicaid and CHIP. It provides the funding needed 
to allow these essential health professionals and institutions to do 
what they do best--provide the best health care possible for elderly 
and disabled Americans on Medicare. It will ensure that the nation's 
health care system is able to care responsibly for today's senior 
citizens, and is adequately prepared to take care of those who will be 
retiring in the future.
  No senior citizen should be forced to enter a hospital or a nursing 
home because Medicare can't afford to pay for the services that will 
keep her in her own home and in her own community.
  No person with a disability should be told that occupational therapy 
services are no longer available. Because legislation to balance the 
budget reduced the rehabilitation services they need.
  No community should be told that their number one employer and 
provider of health care will be closing its doors or engaging in 
massive layoffs, because Medicare can no longer pay its fair share of 
health costs.
  No freestanding children's hospital should wonder whether it can 
continue to train providers to care for children, because of uncertain 
federal support for its teaching activities.
  Yet these scenes and many others are playing out in towns and cities 
across the country today, in large part due to the excessive cuts 
required by the Balanced Budget Act three years ago.
  With the retirement of the baby boom generation, the last thing we

[[Page S8856]]

should do is jeopardize the viability and commitment of the essential 
institutions that care for Medicare beneficiaries. Yet that is now 
happening in cities and towns across the nation. In the vast majority 
of cases, the providers who care for Medicare patients are the same 
providers who care for working families and everyone else in their 
community. When hospitals who serve Medicare beneficiaries are 
threatened, health care for the entire community is threatened too.
  This legislation is an important step to maintain excellence 
throughout our health care system. I commend Senator Daschle and 
Senator Moynihan for their leadership on this vital issue. It deserves 
prompt consideration by the Finance Committee and the entire Senate, 
and it should be enacted into law before we adjourn.
  Mr. DORGAN. Mr. President, I am joining with my colleagues Senator 
Moynihan, Senator Daschle, and others today to introduce the Balanced 
Budget Refinement Act of 2000. This legislation seeks to address some 
of the unintended consequences the Balanced Budget Act, BBA, of 1997 is 
having on access to Medicare services vital to older Americans. The BBA 
has had a particularly serious impact on rural health care providers, 
and I am pleased that the legislation we are introducing today 
acknowledges the special needs of rural America.
  Like many of my colleagues, I supported the Balanced Budget Act when 
it was enacted by Congress in 1997 with strong bipartisan support. 
Prior to the passage of this law, Medicare was projected to be 
insolvent within two years (by 2001), so it was imperative that we took 
action to extend Medicare's financial health and to constrain its rate 
of growth to a more sustainable level. Thanks in part to this law, we 
have a flourishing economy in most parts of the country and the 
Medicare trust fund is projected to be solvent until 2025.
  But in some respects, the Balanced Budget Act was successful beyond 
our wildest expectations in reducing Medicare program costs. The 
Congressional Budget Office originally estimated that Medicare spending 
would be reduced by $112 billion over five years, but instead, the 
reduction in spending growth has been nearly double that amount. This 
unexpected result is having real consequences for Medicare 
beneficiaries and health care providers, and Congress simply must take 
action to address these problems before adjourning this year.
  Congress took a step in the right direction towards addressing the 
problems facing Medicare providers by enacting the Balanced Budget 
Refinement Act, BBRA, of 1999. Unfortunately, however, there is growing 
evidence that the negative changes resulting from the BBA have not been 
adequately addressed by the BBRA. Moreover, the impacts continue to 
disproportionately affect rural health care providers and the quality 
of care rural Medicare beneficiaries receive.
  Part of the problem facing rural providers is simply demographics: My 
home state of North Dakota is the second oldest in the nation, and our 
overall population is shrinking. In fact, in six of North Dakota's 
``frontier'' counties, there were 20 or fewer births for the entire 
county for the entire year of 1997. Admissions to rural hospitals have 
dropped by a drastic 60 percent in the last two decades, and those 
patients who do remain tend to be older and sicker. This means that 
rural hospitals tend to be disproportionately dependent upon Medicare 
reimbursement, to the extent that Medicare accounts for 85 percent of 
their revenue. Obviously, given this reality, changes in Medicare 
reimbursement have a tremendous impact on the financial health of rural 
hospitals.
  Another part of the problem is that Medicare has historically 
reimbursed urban health care providers at a higher rate than their 
rural counterparts. Of course, some of this difference can be explained 
by regional differences in the cost of health care and variations in 
the health status of older Americans. But this isn't the whole 
explanation. Even after adjusting for these factors, a report by health 
care economists found that, for example, Medicare's per beneficiary 
spending was about $8,000 in Miami, but only $3,500 in Minneapolis. 
When average Medicare payments for the same procedure are compared, the 
disparities in payment in different areas of the country are dramatic. 
For example, Medicare pays $6,588 for the treatment of simple pneumonia 
in the District of Columbia, but only $3,383 in North Dakota. In my 
opinion, this difference is largely explained by a Medicare 
reimbursement system that is skewed in favor of urban areas. For the 
most part, the BBA further perpetuates this inequity, despite efforts 
by some of us to address this concern.
  There are a few areas of the Balanced Budget Act and BBRA that I 
think warrant further scrutiny and action, and these areas are 
addressed in the legislation being introduced today. The first is 
hospital payments, particularly for outpatient services. A recent 
analysis by a health policy research firm estimates that the BBA would 
reduce Medicare payments to North Dakota hospitals by $163.8 million 
between FY 1998 and FY2002. The BBRA passed last year restores only $16 
million of those reductions. So even with BBRA refinements, North 
Dakota hospitals face a loss of $147.8 million in revenues. Outpatient 
services are a particularly critical component of care in many North 
Dakota hospitals: 40 percent of the hospitals in my state get more than 
half of their revenues from outpatient services. Senator Daschle and 
Moynihan's legislation will address the problems faced by rural 
hospitals by, among other things, providing a full inflation increase 
in Medicare payments to all hospitals in 2001 and 2002 and holding 
rural hospitals permanently harmless from the outpatient prospective 
payment system.
  This legislation also addresses the issue of home health 
reimbursement. Nearly 70 percent of the home health agencies in my home 
state are hospital-based, so the changes in home-health reimbursement 
are having a domino effect on North Dakota's hospitals. I am concerned 
that the Health Care Financing Administration's, HCFA, proposed rule 
for the new home health Prospective Payment System, PPS, does not take 
account of the smaller size of rural home health agencies and the 
higher fixed costs per visit. And, HCFA did not take sufficient account 
of the greater travel cost per visit in rural areas, and the higher 
incidence of chronic illness in rural communities. Today's legislation 
would address this concern by providing a 10 percent increase in rural 
home health payments for the next two years and repealing the 15 
percent cut in home health reimbursement scheduled to take place on 
October 1, 2001.
  This legislation also proposes other changes I think are worth 
further mention, including a further delay in the arbitrary caps on the 
amount of physical, speech, and occupational therapy Medicare 
beneficiaries can receive, and a 10 percent increase in the base 
payment rate for hospice care, which hasn't been increased in over a 
decade.
  Finally, while all of the provisions of this bill will together help 
to ensure that Medicare beneficiaries can continue to rely on the 
quality care they need and expect, this legislation includes a number 
of changes that will also make Medicare an even better deal. In 
particular, this bill will expand Medicare's emphasis on preventive 
medicine by adding such benefits as coverage for glaucoma screening, 
counseling for smoking cessation, and nutrition therapy. The bill will 
also eliminate the current three-year time limit on Medicare's coverage 
of immunosuppressive drugs, the expensive medicines that transplant 
recipients need to keep their bodies from rejecting their new organs or 
tissue.
  In short, the Balanced Budget Refinement Act of 2000 addresses many 
of the needs and concerns of Medicare beneficiaries and health care 
providers. I hope this legislation will help lay the framework for the 
enactment of bipartisan legislation to address these issues before the 
106th Congress goes home.
  Mr. JOHNSON. Mr. President, I am pleased to cosponsor the Balanced 
Budget Refinement Act introduced today that works to correct the 
inequities of Medicare reforms included in the Balanced Budget Act 
(BBA) of 1997.
  I would like to commend Senator Daschle for his tremendous efforts on 
this issue and for his leadership with the introduction of this bill. 
As well, I

[[Page S8857]]

congratulate a number of my other colleagues who have contributed 
immensely to the crafting of this critically important piece of 
legislation, including Senators Moynihan, Rockefeller, Conrad, Graham, 
Kerrey, Robb, Baucus, Breaux and others.
  By way of background, as part of the effort to balance the federal 
budget, the BBA of 1997 provided for major reforms in the way Medicare 
pays for medical services. The BBA made some important changes in 
Medicare payment policy and contributed to our current period of budget 
surpluses through significant cost savings in Medicare. These changes 
were originally expected to cut Medicare spending by about $112 billion 
over five years, according to the Congressional Budget Office (CBO).
  However, projections showed spending falling nearly twice that much, 
and as a result, unintended payment cuts to providers had deepened more 
significantly than expected. In the face of these profound cuts, health 
care providers began to struggle, and beneficiary access to care became 
threatened, due to forced reductions in services especially in rural 
parts of the country such as South Dakota. As a result, Congress 
addressed some of these unintended consequences of the BBA by enacting 
the Balanced Budget Refinement Act (BBRA) last year which provided $16 
billion over 5 years in payments to various Medicare providers, 
including; Hospital Outpatient Departments; Skilled Nursing Facilities; 
Rural Health Providers; Home Health Agencies; Medicare HMOs; and 
Teaching Hospitals. The impact in South Dakota indicated that 
approximately 9% of Medicare funding reductions imposed by the BBA of 
1997 were returned as a result of the BBRA passed last year, resulting 
in approximately $15.3 million being restored to South Dakota Medicare 
providers.
  While this was certainly a step in the right direction, the BBRA of 
1999 did not do enough as concerns from hospital and nursing home 
administrators, home health facilities, rural health providers, 
ambulance services and Medicare beneficiaries continued to be heard 
across the country.
  Not surprising, I continue to hear from many South Dakota safety net 
providers about the devastating effects such reductions in Medicare 
reimbursements are having throughout the health care industry in my 
home state. Consumers are also feeling the pain, as many individuals 
are being turned away from hospitals and nursing homes who cannot 
afford to accept new patients because of the lower reimbursement rates 
included in BBA of 1997. The undesirable and unintended cuts are 
devastating and feared to have severe implications on the quality and 
access of health care throughout our nation, including South Dakota, 
unless Congress acts immediately to further correct these problems. In 
South Dakota, and other rural parts of the country, hospitals and other 
health care providers have an extremely high percentage of Medicare 
beneficiaries making these cuts in reimbursement even more devastating. 
If Congress does not act in a timely fashion many of these providers 
may be forced to close their doors.
  Nowhere can we see the impact of closures more evident than within 
the nursing home industry. Nursing homes are experiencing closures at 
record rates across the country. In South Dakota, just last month we 
endured our first nursing home closure in Parker, South Dakota. Not 
only was this devastating for residents and workers, but the domino 
economic impact that goes hand in hand with such a facility closure is 
enormous for small communities to absorb.
  As well, one does not have to look far in my home state of South 
Dakota to see the impact many other health care providers and 
facilities are experiencing. Furthermore, the consequences are being 
felt across the board, from larger health systems in South Dakota 
communities such as Sioux Falls, Rapid City and Aberdeen, to medium 
centers in Brookings, Watertown, Pierre and Yankton, to the smaller 
rural facilities in places like Martin, Edgemont, Gregory, Miller, Hot 
Springs and Redfield, just to name a few. The situation is arduous for 
many of these facilities, who often carry the immense task of being the 
sole health care provider in the entire county. By way of example, 
Gregory Healthcare Center is a 26 bed rural hospital serving 
approximately 9,000 people. Not surprising, Gregory is the only local 
provider to offer a range of services including surgery, obstetrics, 
and various therapies, and also operates the only home health agency in 
the area. The facility in Gregory was forced to cut back its' home 
health services as a result of the BBA Medicare reductions. Many 
individuals once benefiting from specialized medication oversight and 
condition management services through Gregory's home health agency were 
now at home performing these services on their own, resulting in some 
cases to unnecessary hospitalizations. The situation in Gregory is by 
far not an isolated situation and facilities nationwide are being 
forced to cut services just to survive. Whether it be Gregory, South 
Dakota, or one of far too many other facilities in this country with 
similar issues, these are direct examples of the intense real life 
situations that facilities, providers and beneficiaries are 
experiencing every day as a result of inadequate BBA adjustments, 
payment updates and beneficiary protections.
  Therefore, I stand in strong support of the BBRA legislation being 
introduced today which will address problems facing vital health care 
services. I look forward to working with my colleagues on passage of 
the BBRA of 2000 which develops a creative, cost-effective approach to 
address the unintended, long-term consequences of the BBA. The proposed 
budget surplus provides Congress the unique opportunity to address many 
of the deficiencies in our nation's health care system. We need to 
address the valid concerns of teaching hospitals, skilled nursing 
facilities, home health providers, rural and community hospitals, and 
other health care providers who require relief from the consequences of 
the BBA.
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