[Congressional Record Volume 150, Number 88 (Wednesday, June 23, 2004)]
[Senate]
[Pages S7313-S7325]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]


[[Page S7313]]
          STATEMENTS ON INTRODUCED BILLS AND JOINT RESOLUTIONS

      By Mr. JOHNSON:
  S. 2561. A bill to amend title 38, United States Code, to provide for 
certain servicemembers to become eligible for educational assistance 
under the Montgomery GI Bill; to the Committee on Veterans' Affairs.
  Mr. JOHNSON. Mr. President, I rise today to introduce a very 
important piece of legislation, the Montgomery GI Bill Enhancement Act. 
This bill will allow a one year open enrollment period for thousands of 
career military personal who are not allowed to sign up for education 
benefits under the Montgomery GI Bill (MGIB).
  In 1976 Congress created the Veterans' Educational Assistance Program 
(VEAP) as a recruitment and retention tool for the post-Vietnam era. 
However, Congress greatly expanded education benefits in 1984 and 
allowed individuals with VEAP accounts to transfer their benefits to 
the new MGIB in 1996. The opportunity to convert to MGIB was important 
because the benefits available were much greater than those under VEAP.
  However, those individuals who were on active duty before 1985 and 
did not participate in VEAP were not eligible to sign-up for MGIB, 
leaving a gap in available coverage for certain career military 
personnel. Congress has voted several times in the last decade to allow 
VEAP participants opportunities to transfer to MGIB, but there has 
never been an opportunity for those who did not have VEAP accounts to 
sign up for the new program, excluding them from taking advantage of 
MGIB educational benefits.
  My bill would correct this inequity and allow individuals falling 
into this gap to attain MGIB benefits. Organizations such as the Non-
Commissioned Officers Association, the Association of the United States 
Army, and the Military Coalition have come out in strong support for 
this legislation.
  I believe that we must do more to honor our Nation's commitments to 
our military personnel. As the father of a soldier in the Army, I fully 
appreciate what a poor ``quality of life'' can do to the morale of 
military families. We have a long way to go, but I will continue to 
work with my colleagues to make sure our country's military personnel 
receive the benefits they deserve.
  Today, there are fewer than 74,000 VEAP ``decliners'' on active duty. 
These men and women have dedicated their lives to a career of service 
to the Nation, and many are deployed in harms way leading our troops in 
Iraq and Afghanistan.
  For these servicemen and women--many of whom are reaching retirement 
eligibility--time is running out. Therefore, before it is too late, I 
encourage my Senate colleagues to support the Montgomery GI Bill 
Enhancement Act and provide our servicemen and women with the benefits 
they deserve.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2561

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Montgomery GI Bill 
     Enhancement Act of 2004''.

     SEC. 2. OPPORTUNITY FOR CERTAIN ACTIVE-DUTY PERSONNEL TO 
                   ENROLL UNDER THE MONTGOMERY GI BILL.

       (a) In General.--Chapter 30 of title 38, United States 
     Code, is amended by inserting after section 3018C the 
     following new section:

     ``Sec. 3018D. Opportunity for certain active-duty personnel 
       to enroll

       ``(a)(1) Notwithstanding any other provision of this 
     chapter, during the one-year period beginning on the date of 
     the enactment of this section, a qualified individual 
     (described in subsection (b)) may make an irrevocable 
     election under this section to become entitled to basic 
     educational assistance under this chapter.
       ``(2) The Secretary of each military department shall 
     provide for procedures for a qualified individual to make an 
     irrevocable election under this section in accordance with 
     regulations prescribed by the Secretary of Defense for the 
     purpose of carrying out this section or which the Secretary 
     of Homeland Security shall provide for such purpose with 
     respect to the Coast Guard when it is not operating as a 
     service in the Navy.
       ``(b) A qualified individual referred to in subsection (a) 
     is an individual who meets each of the following 
     requirements:
       ``(1) The individual first became a member of the Armed 
     Forces or first entered on active duty as a member of the 
     Armed Forces before July 1, 1985.
       ``(2) The individual has served on active duty without a 
     break in service since the date the individual first became 
     such a member or first entered on active duty as such a 
     member and continues to serve on active duty for some or all 
     of the one-year period referred to in subsection (a).
       ``(3) The individual, before applying for benefits under 
     this section, has completed the requirements of a secondary 
     school diploma (or equivalency certificate) or has 
     successfully completed (or otherwise received academic credit 
     for) the equivalent of 12 semester hours in a program of 
     education leading to a standard college degree.
       ``(4) The individual, when discharged or released from 
     active duty, is discharged or released therefrom with an 
     honorable discharge.
       ``(c)(1) Subject to the succeeding provisions of this 
     subsection, with respect to a qualified individual who makes 
     an election under this section to become entitled to basic 
     educational assistance under this chapter--
       ``(A) the basic pay of the qualified individual shall be 
     reduced (in a manner determined by the Secretary concerned) 
     until the total amount by which such basic pay is reduced is 
     $2,700; and
       ``(B) to the extent that basic pay is not so reduced before 
     the qualified individual's discharge or release from active 
     duty as specified in subsection (b)(4), at the election of 
     the qualified individual--
       ``(i) the Secretary concerned shall collect from the 
     qualified individual; or
       ``(ii) the Secretary concerned shall reduce the retired or 
     retainer pay of the qualified individual by,

     an amount equal to the difference between $2,700 and the 
     total amount of reductions under subparagraph (A), which 
     shall be paid into the Treasury of the United States as 
     miscellaneous receipts.
       ``(2)(A) The Secretary concerned shall provide for an 18-
     month period, beginning on the date the qualified individual 
     makes an election under this section, for the qualified 
     individual to pay that Secretary the amount due under 
     paragraph (1).
       ``(B) Nothing in subparagraph (A) shall be construed as 
     modifying the period of eligibility for and entitlement to 
     basic educational assistance under this chapter applicable 
     under section 3031 of this title.
       ``(d) With respect to qualified individuals referred to in 
     subsection (c)(1)(B), no amount of educational assistance 
     allowance under this chapter shall be paid to the qualified 
     individual until the earlier of the date on which--
       ``(1) the Secretary concerned collects the applicable 
     amount under clause (i) of such subsection; or
       ``(2) the retired or retainer pay of the qualified 
     individual is first reduced under clause (ii) of such 
     subsection.
       ``(e) The Secretary, in conjunction with the Secretary of 
     Defense, shall provide for notice of the opportunity under 
     this section to elect to become entitled to basic educational 
     assistance under this chapter.''.
       (b) Conforming Amendments.--Section 3017(b)(1) of such 
     title is amended--
       (1) in subparagraphs (A) and (C), by striking ``or 
     3018C(e)'' and inserting ``3018C(e), or 3018D(c)''; and
       (2) in subparagraph (B), by inserting ``or 3018D(c)'' after 
     ``under section 3018C(e)''.
       (c) Clerical Amendment.--The table of sections at the 
     beginning of chapter 30 of such title is amended by inserting 
     after the item relating to section 3018C the following new 
     item:

``3018D. Opportunity for certain active-duty personnel to enroll.''.
                                 ______
                                 
      By Mr. BAUCUS:
  S. 2562. A bill to amend title XVIII of the Social Security Act 
provide incentives for the furnishing of quality care under Medicare 
Advantage plans and by end stage renal disease providers and 
facilities, and for other purposes; to the Committee on Finance.
  Mr. BAUCUS. Mr. President, I rise today to introduce the ``Medicare 
Quality Improvement Act of 2004.''
  This bill will establish a new payment incentive structure for 
quality health care, starting with the Medicare Advantage and End Stage 
Renal Disease programs. Under this policy, Medicare would give a 
financial boost to plans and renal care providers demonstrating the 
highest quality care and a bonus to those that are working hard to 
improve.
  Why focus on quality? I hear from all corners that the U.S. health 
care system is unsustainable in its current form. Costs are rising, and 
the care provided is not always appropriate or necessary. Not to 
mention that 43 million Americans lack health insurance.
  As I travel around Montana, I hear so much from so many constituents 
about the rising cost of health care. Countless parents tell me they 
are struggling to pay for health care for their families, afraid that 
one more illness will force them into bankruptcy. Working people tell 
me they fear their employers will raise their premiums or drop

[[Page S7314]]

coverage altogether due to rising health care costs. And employers, 
both large industries and small enterprises, tell me they face 
competition from companies in countries where healthcare is 
significantly less expensive. While these employers are trying to keep 
jobs at home, health care costs are pushing them abroad.
  And most recently, my personal experience with the health care system 
has brought the issue of health costs and quality even closer to home.
  A few weeks ago, I chose to have an elective procedure to keep my 
heart healthy. I have excellent health care coverage, and I was able to 
seek out excellent doctors and nurses at the Mayo Clinic. In short, I 
am fortunate that the care I received was high-quality care. The 
doctors and nurses who took care of me were on the ball--making sure I 
got the right medications with no dangerous interactions, using proper 
surgical safety so I wouldn't get an infection, and providing good 
follow-up care so I could get back to my family and back to work.
  My experience with the health system was a positive one. 
Unfortunately, not everyone is as lucky. Ninety-eight thousand people 
die every year in this country as a result of medical errors. That's 
270 people each day. An appalling statistic. Many of these deaths can 
be prevented, and we must work to make sure that they are.
  In addition to the cases of medical error we know about, there are 
many that go unreported and even undetected. Studies have shown that 
patients in the U.S. receive recommended care and treatment when they 
visit the doctor or hospital only about half of the time. Failure to 
follow proper patterns of care or recommended guidelines can lead to 
poor outcomes, and it is also more expensive in the short and long run.
  Errors can mean more trips to the hospital or to the doctor, more 
drugs, and sometimes even additional surgeries. Each preventable 
medication error costs about $4,700 in added hospital costs alone, not 
to mention the personal costs of childcare and lost wages, and the 
societal costs of lost productivity.
  While not as fatal as actual errors, missed health care opportunities 
also carry a cost. Each year, missed health care opportunities--
inappropriate care and generally poor quality care costs the U.S. 
health system more than $1 billion dollars in avoidable hospital bills 
and 41 million lost work days, which costs American businesses about 
$11.5 billion. Improving the quality of health care can reduce health 
care costs and stimulate our economy. In a time of slow economic growth 
and large deficits, health care is a compelling place to start.
  Last year's Medicare Modernization Act got the ball rolling. The 
Medicare bill ties hospital reimbursement to reporting data on specific 
quality indicators. And hospitals are responding. Today, almost 2,000 
hospitals are sharing data with the Centers for Medicare and Medicaid 
on at least one of the quality measures. Knowing more about the care 
that is delivered across the country should help us target incentives 
and resources to improve quality. It also provides employers and 
patients with new information about where to find the best deal for 
their health care dollar. And it also provides hospitals a way to 
compare their performance to other hospitals.
  The bill I am introducing today builds on this strong start. It would 
establish a mechanism to pay for quality in the Medicare Advantage and 
End Stage Renal Disease Programs, through bonus payments for the best 
quality nationwide and bonuses for improving from one year to the next. 
Rewards for improvement are an important piece of my proposal--last 
year, the top ten percent of health plans in the country reported 
perfect scores on a set of quality indicators. There is no doubt that 
they deserve recognition. But we don't want to leave behind smaller or 
historically poorer-performing organizations that are making major 
strides to improve.
  Medicare Advantage plans, which tend to utilize a coordinated model 
of care, have a unique opportunity to impact a patient's health 
outcomes--plans have access to information about a patient's medical 
history, and can follow patients more closely to ensure that they are 
receiving appropriate preventive, acute, and follow-up care. Medicare 
Advantage plans can translate their own payments into quality 
incentives downstream. They can reward providers for performing certain 
procedures known to be effective, or for prescribing drugs known to 
have equal or greater effectiveness at a reduced cost. And they can 
improve a beneficiary's preventive and wellness benefits.
  Dialysis clinics that participate in Medicare through the program for 
patients with End Stage Renal Disease have a momentous mission, helping 
these patients enjoy life for years longer than we might have thought 
possible just a few decades ago. Because dialysis is such a complex 
operation, quality of care is extremely important.
  Plans and providers in the Medicare Advantage and ESRD programs have 
already started measuring and reporting on quality, which makes them an 
excellent place to start. But I want to be clear these programs should 
not be singled out simply because they are ahead of the game. Working 
with ESRD providers and Medicare Advantage plans heralds the beginning 
of a longer journey, and we need to stay the course.
  First, we need to monitor this quality incentive program and ensure 
that the methods used to measure health care quality and evaluate 
performance are evidence-based and valid.
  Second, we should evaluate the impact of a pay-for-performance 
program on health plans and providers--particularly small organizations 
and those that are just entering the market. Additionally, because last 
year's Medicare legislation made payment and policy changes to these 
providers--for example, a short-term payment increase for ESRD and a 
new payment policy and the addition of regional plans for Medicare 
Advantage--we would need to keep a close eye on the consequences of 
these changes and the interaction with the pay-for-performance quality 
initiative and take action where necessary.

  Third, we should look with a wide lens and move forward with quality 
initiatives in all government health care programs. It is our 
responsibility to set an example for the industry through quality 
improvement programs in Medicare and Medicaid, including traditional 
fee-for-service Medicare.
  As I mentioned, the National Voluntary Hospital Reporting Initiative 
is a groundbreaking program, but we need to do more in traditional 
Medicare to encourage high quality care. My bill sketches out a roadmap 
that will lead us toward expanding the quality measures currently 
collected for fee-for-service providers, and ultimately toward 
additional Medicare payment systems that promote quality improvement.
  We can also do more to focus on quality care in Medicaid. Today, 
there are a number of people at the Centers for Medicare and Medicaid 
Services whose responsibility it is to improve the quality of care in 
Medicare. On the Medicaid side, there is one person--one person who, 
while given the responsibility for quality, has no resources or 
authority to develop program innovations.
  You might say that quality is already addressed in Medicaid. I 
applaud my colleague and Chairman of the Finance Committee, Senator 
Grassley, for encouraging CMS to increase its quality improvement 
activities for home and community-based services in Medicaid. We should 
build on this foundation and broaden the effort. We need to identify 
barriers to quality improvement throughout the Medicaid program, and 
take steps toward removing those barriers.
  The bill I introduce today would target a few of those barriers, and 
it would require further studies to identify others. It authorizes 
money to hire new staff--experienced health professionals--to improve 
the quality and coordination of care delivered to Medicaid 
beneficiaries. It explores ways to integrate data on Medicaid 
beneficiaries who are also enrolled in Medicare--the dual-eligibles and 
coordinate the care they receive from both programs. Many dual-
eligibles are among the sickest and costliest beneficiaries. By better 
coordinating their care we can improve health outcomes and save money 
in both programs at once.
  As you can tell, I have a lot of ideas. But I have only scratched the 
surface of this issue and am deeply committed to working with my 
colleagues in the

[[Page S7315]]

Senate to move forward. This bill is a good start, but it is just 
that--a start. We must do more.
  Many of my colleagues in the Senate also care deeply about improving 
the health care system, and I commend their efforts to develop 
courageous proposals that will spark change. Senator Clinton introduced 
a bill last year, the Health Information for Quality Improvement Act. 
More recently, Senator Kennedy Introduced the Health Care 
Modernization, Cost Reduction, and Quality Improvement Act.
  These bills lay out a comprehensive array of policies to improve 
health care quality and reduce costs, and my bill focuses on one piece 
of that picture--paying for quality. They represent the gold standard 
toward which we should all be working. But we share a common goal to 
make the most of the American health care dollar, so that we can 
provide better care to more people.
  As I mentioned, health care in this country is more expensive than it 
is elsewhere. But we don't necessarily get more for our money. The 
United States spends twice as much on health care than any other 
country, but studies have shown that quality is about the same. Better 
in some areas, worse in others, but all in all about the same. No 
matter how you cut it, that means that the value of our health care--
what we are getting for each dollar is less in the United States than 
in other developed countries.
  I've always believed that Americans were all about value. We are the 
country of start-up companies and the home of Wal-Mart. We know about 
good business, and we know about hard work. We should know more--and do 
more--about health care.
  We are an amazing country, but today our health care system is sick. 
Why? It is not the fault of hard-working doctors and nurses who put in 
long hours to make their patients healthy. It is our fault. We need to 
support the work of health care professionals by providing the right 
resources and designing payment systems to promote quality. Today, it 
takes an average 17 years for a new discovery in medical care to move 
from the lab bench into regular clinical practice. And for providers 
working in settings without regular Internet access or without the 
luxury of time to peruse medical journals, it may take even longer. As 
Members of Congress, we have the opportunity to change the system, to 
provide incentives for good care, funding for research into best 
medical practices, and to require the development and reporting of 
quality measures.
  The road to this goal is long and difficult. I call on my colleagues 
for their energy and support, and I call on health care professionals 
and the health insurance industry to work with us. This is challenging 
work, and involves many difficult decisions. But I've never been one to 
shirk a challenge, and I hope you will join me. This bill is the 
beginning of what must be a strong bipartisan push to improve our 
health care system--to increase quality of care, to reduce costs, and 
to strengthen the American spirit.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2562

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) In General.--This Act may be cited as the ``Medicare 
     Quality Improvement Act of 2004''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Findings.
Sec. 3. Medicare Advantage and reasonable cost reimbursement contract 
              quality performance incentive payment program.
Sec. 4. Quality performance incentive payment program for providers and 
              facilities that provide services to medicare 
              beneficiaries with ESRD.
Sec. 5. Medicare innovative quality practice award program.
Sec. 6. Quality improvement demonstration program for pediatric renal 
              dialysis facilities providing care to medicare 
              beneficiaries with end stage renal disease.
Sec. 7. Medicare Quality Advisory Board.
Sec. 8. Studies and reports on financial incentives for quality items 
              and services under the medicare program.
Sec. 9. MedPAC study and report on use of adjuster mechanisms under 
              medicare quality performance incentive payment programs.
Sec. 10. Demonstration program on measuring the quality of health care 
              furnished to pediatric patients under the medicaid and 
              SCHIP programs.
Sec. 11. Provisions relating to medicaid quality improvements.
Sec. 12. Demonstration program for Medical Smart Cards. 

     SEC. 2. FINDINGS.

       The Senate makes the following findings:
       (1) The Institute of Medicine has highlighted problems with 
     our health care system in the areas of quality and patient 
     safety.
       (2) The New England Journal of Medicine has published 
     research in an article entitled ``The Quality of Health Care 
     Delivered to Adults in the United States'' showing that 
     adults in the United States receive recommended health care 
     only about \1/2\ of the time.
       (3) Payment policies under the medicare program do not 
     include mechanisms designed to improve the quality of care.
       (4) The medicare program should reward health care 
     providers who show, through measurement and reporting of 
     quality indicators and through the practice of innovations, 
     that they are working to deliver high quality health care to 
     their patients.
       (5) Reimbursement for services provided under the original 
     medicare fee-for-service program under parts A and B of title 
     XVIII of the Social Security Act should be based on a pay-
     for-performance system.
       (6) A more aggressive research agenda on the development of 
     appropriate quality measurement and payment methodologies 
     under the medicare program is necessary.

     SEC. 3. MEDICARE ADVANTAGE AND REASONABLE COST REIMBURSEMENT 
                   CONTRACT QUALITY PERFORMANCE INCENTIVE PAYMENT 
                   PROGRAM.

       (a) Program.--Part C of title XVIII of the Social Security 
     Act, as amended by section 241 of the Medicare Prescription 
     Drug, Improvement, and Modernization Act of 2003 (Public Law 
     108-173; 117 Stat. 2214), is amended by adding at the end the 
     following new section:


            ``quality performance incentive payment program

       ``Sec. 1860C-2. (a) Program.--
       ``(1) In general.--The Secretary shall establish a program 
     under which financial incentive payments are provided each 
     year to Medicare Advantage organizations offering Medicare 
     Advantage plans and organizations that are providing benefits 
     under a reasonable cost reimbursement contract under section 
     1876(h) that demonstrate the provision of superior quality 
     health care to enrollees under the plan or contract.
       ``(2) Program to begin in 2007.--The Secretary shall 
     establish the program so that National Performance Quality 
     Payments (described in subsection (c)) and National Quality 
     Improvement Payments (described in subsection (d)) are made 
     with respect to 2007 and each subsequent year.
       ``(3) Requirement.--In order for an organization to be 
     eligible for a financial incentive payment under this section 
     with respect to a Medicare Advantage plan or a reasonable 
     cost reimbursement contract under section 1876(h), the 
     organization shall--
       ``(A) provide for the collection, analysis, and reporting 
     of data pursuant to sections 1852(e)(3) and 1876(h)(8), 
     respectively, with respect to the plan or contract; and
       ``(B) not later than a date specified by the Secretary 
     during each baseline year (as defined in subsection (d)(4)), 
     submit such data on the quality measures described in 
     subsection (e)(2) as the Secretary determines appropriate for 
     the purpose of establishing a baseline with respect to the 
     plan or contract.
       ``(4) Use of most recent data.--Financial incentive 
     payments under this section shall be based upon the most 
     recent available quality data.
       ``(5) Timing of quality incentive payments.--The Secretary 
     shall ensure that financial incentive payments under this 
     section with respect to a year are made by March 1 of the 
     subsequent year.
       ``(6) Applicability of program to ma plans.--For purposes 
     of this section, the term `Medicare Advantage plan' shall--
       ``(A) include both MA regional plans and MA local plans; 
     and
       ``(B) not include an MA plan described in subparagraph 
     (A)(ii) or (B) of section 1851(a)(2).
       ``(b) Quality Incentive Payments.--
       ``(1) In general.--Beginning with 2007, the Secretary shall 
     allocate the total amount available for financial incentive 
     payments in the year under subsection (f) as follows:
       ``(A) The per beneficiary payment amount for National 
     Performance Quality Payments established under paragraph (2) 
     shall be greater than the per beneficiary payment amount for 
     National Quality Improvement Payments established under such 
     paragraph.
       ``(B) With respect to National Performance Quality 
     Payments, the per beneficiary payment amount established 
     under paragraph (2) shall be greatest for the organizations 
     offering the highest performing plans or contracts.
       ``(C) With respect to National Quality Improvement 
     Payments, the per beneficiary

[[Page S7316]]

     payment amount established under paragraph (2) shall be 
     greatest for the organizations offering plans or contracts 
     with the highest degree of improvement.
       ``(2) Amount of quality incentive payment.--
       ``(A) In general.--The amount of a financial incentive 
     payment under subsection (c) or (d) to a Medicare Advantage 
     organization with respect to a Medicare Advantage plan or to 
     an organization with respect to a reasonable cost 
     reimbursement contract under section 1876(h) shall be 
     determined by multiplying the number of beneficiaries 
     enrolled under the plan or contract on the first day of the 
     year for which the payment is provided by a dollar amount 
     established by the Secretary (in this section referred to as 
     the `per beneficiary payment amount') that is the same for 
     all beneficiaries enrolled under the plan or contract.
       ``(B) Limitation on total amount of quality incentive 
     payments.--The total amount of all the financial incentive 
     payments given with respect to a year shall be equal to the 
     amount available for such payments in the year under 
     subsection (f).
       ``(3) Use of quality incentive payments.--Financial 
     incentive payments received under this section may only be 
     used for the following purposes:
       ``(A) To reduce any beneficiary cost-sharing applicable 
     under the plan or contract.
       ``(B) To reduce any beneficiary premiums applicable under 
     the plan or contract.
       ``(C) To initiate, continue, or enhance health care quality 
     programs for enrollees under the plan or contract.
       ``(D) To improve the benefit package under the plan or 
     contract.
       ``(4) Reporting on use of quality incentive payments.--
     Beginning in 2008, each MA organization that receives a 
     financial incentive payment under this section shall report 
     to the Secretary pursuant to section 1854(a)(7) on how the 
     organization will use such payment.
       ``(5) Limitations on quality incentive payments.--
       ``(A) Plan only eligible for 1 payment in a year.--A 
     Medicare Advantage organization offering a Medicare Advantage 
     plan or an organization that is providing benefits under a 
     reasonable cost reimbursement contract under section 1876(h) 
     may not receive more than 1 financial incentive payment under 
     this section in a year with respect to such plan or contract. 
     If an organization with respect to the plan or contract is 
     eligible for a National Performance Quality Payment and a 
     National Quality Improvement Payment, the organization shall 
     be given the National Performance Quality Payment.
       ``(B) Plan must be available for entire year.--A Medicare 
     Advantage organization offering a Medicare Advantage plan or 
     an organization that is providing benefits under a reasonable 
     cost reimbursement contract under section 1876(h) is not 
     eligible for a financial incentive payment under this section 
     with respect to such plan or contract unless the plan or 
     contract offers benefits throughout the year in which the 
     payment is provided.
       ``(c) National Performance Quality Payments.--The Secretary 
     shall make National Performance Quality Payments to the 
     Medicare Advantage organizations and organizations offering 
     reasonable cost reimbursement contracts under section 1876(h) 
     with respect to each Medicare Advantage plan or reasonable 
     cost contract offered by the organization that receives 
     ratings for the year in the top applicable percent of all 
     plans and contracts rated by the Secretary pursuant to 
     subsection (e) for the year. For purposes of the preceding 
     sentence, the term `applicable percent' means a percent 
     determined appropriate by the Secretary in consultation with 
     the Quality Advisory Board, but in no case less than 20 
     percent.
       ``(d) National Quality Improvement Payments.--
       ``(1) In general.--Subject to paragraph (2), the Secretary 
     shall make National Quality Improvement Payments to Medicare 
     Advantage organizations and organizations offering reasonable 
     cost reimbursement contracts under section 1876(h) with 
     respect to each Medicare Advantage plan or reasonable cost 
     reimbursement contract offered by the organization that 
     receives a rating under subsection (e) for the payment year 
     that exceeds the rating received under such subsection for 
     the plan or contract for the baseline year.
       ``(2) National improvement standard.--Beginning with 2009, 
     the Secretary may implement a national improvement standard 
     that Medicare Advantage plans and reasonable cost 
     reimbursement contracts must meet in order to receive a 
     National Quality Improvement Payment.
       ``(3) Application of thresholds.--In determining whether a 
     rating received under subsection (e) for the payment year 
     exceeds the rating received under such subsection for the 
     baseline year, the Secretary shall hold any applicable 
     thresholds constant. For purposes of the preceding sentence, 
     the term `threshold' means norms used to assess performance.
       ``(4) Baseline year defined.--In this subsection, the term 
     `baseline year' means the year prior to the payment year.
       ``(e) Rating Methodology.--
       ``(1) Scoring and ranking systems.--
       ``(A) In general.--The Secretary shall develop separate 
     scoring and ranking systems for purposes of determining which 
     organizations offering Medicare Advantage plans and 
     reasonable cost reimbursement contracts under section 1876(h) 
     qualify for--
       ``(i) National Performance Quality Payments; and
       ``(ii) National Quality Improvement Payments.
       ``(B) Requirements.--In developing, implementing, and 
     updating the scoring and ranking systems, the Secretary 
     shall--
       ``(i) consult with the Quality Advisory Board established 
     under section 1898;
       ``(ii) take into account the report on health care 
     performance measures submitted by the Institute of Medicine 
     of the National Academy of Sciences under section 238 of the 
     Medicare Prescription Drug, Improvement, and Modernization 
     Act of 2003; and
       ``(iii) take into account the Managed Care Organization 
     (MCO) standards and guideline methodology of the National 
     Committee for Quality Assurance for awarding total Health 
     Plan Employer Data and Information Set (HEDIS) points (based 
     on HEDIS and Consumer Assessment of Health Plans Survey 
     (CAHPS) measures).
       ``(2) Measures.--
       ``(A) In general.--Subject to subparagraph (B), in 
     developing the scoring and ranking systems under paragraph 
     (1), the Secretary shall use all measures determined 
     appropriate by the Secretary. Such measures may include--
       ``(i) outcome measures for highly prevalent chronic 
     conditions;
       ``(ii) audited HEDIS outcomes and process measures, CAHPS 
     data, and other data reported to the Department of Health and 
     Human Services; and
       ``(iii) the Joint Commission on Accreditation of Healthcare 
     Organizations core measures.
       ``(B) Scoring and ranking system for national performance 
     quality payments only based on measures of clinical 
     effectiveness.--The scoring and ranking system for National 
     Performance Quality Payments shall only include measures of 
     clinical effectiveness.
       ``(3) Weights of measures.--In developing the scoring and 
     ranking systems under paragraph (1), the Secretary shall 
     assign weights to the measures used by the Secretary under 
     such system pursuant to paragraph (2). In assigning such 
     weights, the Secretary shall provide greater weight to the 
     measures that measure clinical effectiveness.
       ``(4) Risk adjustment.--In developing the scoring and 
     ranking systems under paragraph (1), the Secretary shall 
     establish procedures for adjusting the data used under the 
     system to take into account differences in the health status 
     of individuals enrolled under Medicare Advantage plans and 
     reasonable cost contracts.
       ``(5) Update.--
       ``(A) In general.--The Secretary shall as determined 
     appropriate, but in no case more often than once each 12-
     month period, update the scoring and ranking systems 
     developed under paragraph (1), including the measures used by 
     the Secretary under such system pursuant to paragraph (2), 
     the weights established pursuant to paragraph (3), and the 
     risk adjustment procedures established pursuant to paragraph 
     (4).
       ``(B) Comparison for national quality improvement 
     payments.--Each update under subparagraph (A) of the scoring 
     and ranking system for National Quality Improvement Payments 
     shall allow for the comparison of data from one year to the 
     next for purposes of identifying which plans or contracts 
     will receive such Payments.
       ``(C) Consultation.--In determining when and how to update 
     the scoring and ranking systems under subparagraph (A), the 
     Secretary shall consult with the Quality Advisory Board.
       ``(f) Funding of Payments.--The amount available for 
     financial incentive payments under this section with respect 
     to a year shall be equal to the amount of the reduction in 
     expenditures under the Federal Hospital Insurance Trust Fund 
     and the Federal Supplementary Medical Insurance Trust Fund in 
     the year as a result of the amendments made by section 3(b) 
     of the Medicare Quality Improvement Act of 2004.''.
       (b) Reduction in Payments to Organizations in Order To Fund 
     Program.--
       (1) MA payments.--
       (A) In general.--Section 1853(j) of the Social Security Act 
     (42 U.S.C. 1395w-23(j)), as added by section 222(d) of the 
     Medicare Prescription Drug, Improvement, and Modernization 
     Act of 2003 (Public Law 108-173; 117 Stat. 2200), is 
     amended--
       (i) in subparagraphs (A) and (B) of paragraph (1), by 
     inserting ``and, beginning in 2007, reduced by 2 percent in 
     the case of an MA plan described in subparagraph (A)(i) or 
     (C) of section 1851(a)(2)'' before the semicolon at the end; 
     and
       (ii) in paragraph (2), by inserting ``and, beginning in 
     2007, reduced by 2 percent in the case of an MA plan 
     described in subparagraph (A)(i) or (C) of section 
     1851(a)(2)'' before the period at the end.
       (B) Reductions in payments do not effect the government 
     savings for bids below the benchmark.--Section 
     1854(b)(1)(C)(i) of the Social Security Act (42 U.S.C. 1395w-
     24(b)(1)(C)(i)), as added by section 222(b) of the Medicare 
     Prescription Drug, Improvement, and Modernization Act of 2003 
     (Public Law 108-173; 117 Stat. 2196), is amended--
       (i) by striking ``75 percent'' and inserting ``100 
     percent''; and
       (ii) by inserting the following before the period at the 
     end: ``, reduced by 25 percent of such average per capita 
     savings (if any), as applicable to the plan and year 
     involved, that would be computed if sections 1853(j) and 
     1860C-1(e)(1) was applied by substituting

[[Page S7317]]

     `zero percent' for `2 percent' each place it appears''.
       (2) Reasonable cost contract payments.--Section 1876(h) of 
     the Social Security Act (42 U.S.C. 1395mm(h)) is amended by 
     adding at the end the following new paragraph:
       ``(6) Notwithstanding the preceding provisions of this 
     subsection, the Secretary shall reduce each payment to an 
     eligible organization under this subsection with respect to 
     benefits provided on or after January 1, 2007, by an amount 
     equal to 2 percent of the payment amount. The preceding 
     sentence shall have no effect on payments to eligible 
     organizations for the provision of qualified prescription 
     drug coverage under part D.''.
       (3) CCA payments.--The first sentence of section 1860C-
     1(e)(1) of the Social Security Act, as added by section 241 
     of the Medicare Prescription Drug, Improvement, and 
     Modernization Act of 2003 (Public Law 108-173; 117 Stat. 
     2214) is amended by inserting ``, reduced by 2 percent in the 
     case of an MA plan described in subparagraph (A)(i) or (C) of 
     section 1851(a)(2)'' before the period at the end.
       (c) Requirement for Reporting on Use of Financial Incentive 
     Payments.--
       (1) MA plans.--Section 1854(a) of the Social Security Act 
     (42 U.S.C. 1395w-24(a)), as amended by section 222(a) of the 
     Medicare Prescription Drug, Improvement, and Modernization 
     Act of 2003 (Public Law 108-173; 117 Stat. 2193), is 
     amended--
       (A) in paragraph (1)(A)(i), by striking ``or (6)(A)'' and 
     inserting ``(6)(A), or (7)''; and
       (B) by adding at the end the following:
       ``(7) Submission of information of how financial incentive 
     payments will be used beginning in 2008.--For an MA plan 
     described in subparagraph (A)(i) or (C) of section 1851(a)(2) 
     for a plan year beginning on or after January 1, 2008, the 
     information described in this paragraph is a description of 
     how the organization offering the plan will use any financial 
     incentive payment that the organization received under 
     section 1860C-2 with respect to the plan.''.
       (2) Eligible entities with reasonable cost contracts.--
     Section 1876(h) of the Social Security Act (42 U.S.C. 
     1395mm(h)), as amended by subsection (b)(2), is amended by 
     adding at the end the following new paragraph:
       ``(7)(A) Not later than July 1 of each year (beginning in 
     2008), any eligible entity with a reasonable cost 
     reimbursement contract under this subsection that receives a 
     financial incentive payment under section 1860C-2 with 
     respect to each plan year shall submit to the Secretary a 
     report containing the information described in subparagraph 
     (B).
       ``(B) The information described in this subparagraph is a 
     description of how the organization offering the plan will 
     use any financial incentive payment that the organization 
     received under section 1860C-2 with respect to the plan.''.
       (d) Submission of Quality Data.--
       (1) MA organizations.--Section 1852(e) of the Social 
     Security Act (42 U.S.C. 1395w-22(e)), as amended by section 
     722 of the Medicare Prescription Drug, Improvement, and 
     Modernization Act of 2003 (Public Law 108-173; 117 Stat. 
     2347), is amended--
       (A) in paragraph (1), by striking ``an MA private fee-for-
     service plan or''; and
       (B) by striking paragraph (3) and inserting the following 
     new paragraph:
       ``(3) Collection, analysis, and reporting.--
       ``(i) In general.--As part of the quality improvement 
     program under paragraph (1), each MA organization shall 
     provide for the collection, analysis, and reporting of data 
     that permits the measurement of health outcomes and other 
     indices of quality.
       ``(ii) Coordination with commercial enrollee reporting 
     requirements.--The Secretary shall establish procedures to 
     ensure the coordination of the reporting requirement under 
     clause (i) with reporting requirements for the organization 
     under this part relating to individuals enrolled with the 
     organization but not under this part. Although such reporting 
     requirements shall be coordinated pursuant to the preceding 
     sentence, the use of the data reported may vary.''.
       (2) Eligible entities with reasonable cost contracts.--
     Section 1876(h) of the Social Security Act (42 U.S.C. 
     1395mm(h)), as amended by subsection (c)(2), is amended by 
     adding at the end the following new paragraph:
       ``(8)(A) With respect to plan years beginning on or after 
     January 1, 2006, an eligible entity with a reasonable cost 
     reimbursement contract under this subsection shall provide 
     for the collection, analysis, and reporting of data that 
     permits the measurement of health outcomes and other indices 
     of quality.
       ``(B) The Secretary shall establish procedures to ensure 
     the coordination of the reporting requirement under 
     subparagraph (A) with reporting requirements for the entity 
     under this title relating to individuals enrolled with the 
     entity but not receiving benefits under this title.''.

     SEC. 4. QUALITY PERFORMANCE INCENTIVE PAYMENT PROGRAM FOR 
                   PROVIDERS AND FACILITIES THAT PROVIDE SERVICES 
                   TO MEDICARE BENEFICIARIES WITH ESRD.

       Section 1881(b) of the Social Security Act (42 U.S.C. 
     1395rr(b)), as amended by section 623(d)(1) of the Medicare 
     Prescription Drug, Improvement, and Modernization Act of 2003 
     (Public Law 108-173; 117 Stat. 2313), is amended--
       (1) in paragraph (11)(B), by striking ``paragraphs (12) and 
     (13)'' and inserting ``paragraphs (12), (13), and (14)'';
       (2) in paragraph (12), by striking ``In lieu of'' and 
     inserting ``Subject to paragraph (14), in lieu of'';
       (3) in paragraph (13)(A), in the matter preceding clause 
     (i), by striking ``The payment amounts'' and inserting 
     ``Subject to paragraph (14), the payment amounts''; and
       (4) by adding at the end the following new paragraph:
       ``(14) Renal dialysis performance incentive payment 
     program.--
       ``(A) Establishment of program.--
       ``(i) In general.--The Secretary shall establish a program 
     under which financial incentive payments are provided each 
     year to providers of services and renal dialysis facilities 
     that receive payments under paragraph (12) or (13) and 
     demonstrate the provision of superior quality health care to 
     individuals with end stage renal disease.
       ``(ii) Program to begin in 2007.--The Secretary shall 
     establish the program so that National Performance Quality 
     Payments (described in subparagraph (C)) and National Quality 
     Improvement Payments (described in subparagraph (D)) are made 
     with respect to 2007 and each subsequent year.
       ``(iii) Requirement.--In order for a provider of services 
     or a renal dialysis facility to be eligible for a financial 
     incentive payment under this section, the provider or 
     facility shall, not later than a date specified by the 
     Secretary during the baseline year (as defined in 
     subparagraph (D)(iv)), submit such data on the quality 
     measures as the Secretary determines appropriate for the 
     purpose of establishing a baseline with respect to the 
     provider or facility.
       ``(iv) Use of most recent data.--Financial incentive 
     payments under this paragraph shall be based upon the most 
     recent available quality data as provided by the Consolidated 
     Renal Operations in a Web-enabled Network (CROWN) system.
       ``(v) Pediatric facilities not included in program.--For 
     purposes of this paragraph, including subparagraph (F)(i), 
     the terms `renal dialysis facility' and `facility' do not 
     include a renal dialysis facility at least 50 percent of 
     whose patients are individuals under 18 years of age.
       ``(B) Payments.--
       ``(i) In general.--Beginning with 2007, the Secretary shall 
     allocate the total amount available for financial incentive 
     payments in the year under subparagraph (F)(ii) as follows:

       ``(I) The amount allocated for National Performance Quality 
     Payments shall be greater than the amount allocated for 
     National Quality Improvement Payments.
       ``(II) With respect to National Performance Quality 
     Payments, the per capita amount of the payments shall be 
     greatest for the organizations offering the highest 
     performing plans or contracts.
       ``(III) With respect to National Quality Improvement 
     Payments, the per capita amount of the payments shall be 
     greatest for the organizations offering plans or contracts 
     with the highest degree of improvement.

       ``(ii) Amount of quality incentive payment.--

       ``(I) In general.--The amount of a financial incentive 
     payment under subparagraph (C) or (D) to a provider of 
     services or renal dialysis facility shall be determined by 
     multiplying the number of beneficiaries who received dialysis 
     services from the provider or facility during the year for 
     which the payment is provided by a dollar amount established 
     by the Secretary that is the same with respect to each 
     beneficiary receiving dialysis services from the provider or 
     facility.
       ``(II) Limitation on total amount of quality incentive 
     payments.--The total amount of all the financial incentive 
     payments given with respect to a year shall be equal to the 
     amount available for such payments in the year under 
     subparagraph (F)(ii).

       ``(iii) Use of quality incentive payments.--Financial 
     incentive payments received under this paragraph may be used 
     for the following purposes:

       ``(I) To invest in information technology systems that will 
     improve the quality of care provided to individuals with end 
     stage renal disease.
       ``(II) To initiate, continue, or enhance health care 
     quality programs for individuals with end stage renal 
     disease.
       ``(III) Any other purpose determined appropriate by the 
     Secretary.

       ``(iv) Limitations on quality incentive payments.--

       ``(I) Only eligible for 1 payment in a year.--A provider of 
     services or a renal dialysis facility may not receive more 
     than 1 financial incentive payment under this paragraph in a 
     year. If a provider of services or a renal dialysis facility 
     is eligible for a National Performance Quality Payment and a 
     National Quality Improvement Payment, the organization shall 
     be given the National Performance Quality Payment.
       ``(II) Services must be available for entire year.--A 
     provider of services or renal dialysis facility is not 
     eligible for a financial incentive payment under this 
     paragraph unless the provider or facility is in operation and 
     providing dialysis services for the entire year for which the 
     payment is provided.

       ``(C) National performance quality payments.--The Secretary 
     shall make National Performance Quality Payments to the 
     providers of services and renal dialysis facilities that 
     receive ratings for the year in the top applicable percent of 
     all providers and facilities rated by the Secretary pursuant 
     to subparagraph (E) for the year. For purposes of the 
     preceding sentence, the term `applicable percent' means a 
     percent determined appropriate by the Secretary in 
     consultation with

[[Page S7318]]

     the Quality Advisory Board, but in no case less than 20 
     percent.
       ``(D) National quality improvement payments.--
       ``(i) In general.--National Quality Improvement Payments 
     shall be paid to each provider of services and renal dialysis 
     facility that receives ratings under subparagraph (E) for the 
     payment year that exceed the ratings received under such 
     subparagraph for the provider or facility for the baseline 
     year.
       ``(ii) National improvement standard.--Beginning with 2009, 
     the Secretary shall have the authority to implement a 
     national improvement standard that providers of services and 
     renal dialysis facilities must meet in order to receive a 
     National Quality Improvement Payment.
       ``(iii) Application of thresholds.--In determining whether 
     a rating received under subparagraph (E) for the payment year 
     exceeds the rating received under such subsection for the 
     baseline year, the Secretary shall hold any applicable 
     thresholds constant.
       ``(iv) Baseline year defined.--In this subparagraph, the 
     term `baseline year' means the year prior to the payment 
     year.
       ``(E) Rating methodology.--
       ``(i) Scoring and ranking systems.--

       ``(I) In general.--The Secretary shall develop separate 
     scoring and ranking systems for purposes of determining which 
     providers of services and renal dialysis facilities qualify 
     for--

       ``(aa) National Performance Quality Payments; and
       ``(bb) National Quality Improvement Payments.

       ``(II) Requirements.--In developing, implementing, and 
     updating the scoring and ranking systems, the Secretary 
     shall--

       ``(aa) consult with the Quality Advisory Board established 
     under section 1898 and the network administrative 
     organizations designated under subsection (c)(1)(A)(i)(II); 
     and
       ``(bb) take into account the report on health care 
     performance measures submitted by the Institute of Medicine 
     of the National Academy of Sciences under section 238 of the 
     Medicare Prescription Drug, Improvement, and Modernization 
     Act of 2003.
       ``(ii) Measures.--

       ``(I) In general.--Subject to subclause (II), in developing 
     the scoring and ranking system under clause (i), the 
     Secretary shall use all measures determined appropriate by 
     the Secretary. Such measures may include the following:

       ``(aa) The measures profiled in the ESRD Clinical 
     Performance Measures (CPM) project of the Centers for 
     Medicare & Medicaid Services.
       ``(bb) The measures for bone disease to be determined by 
     the K-DOQI project of the National Kidney Foundation.

       ``(II) Scoring and ranking system for national performance 
     quality payments only based on measures of clinical 
     effectiveness.--The scoring and ranking system for National 
     Performance Quality Payments shall only include measures of 
     clinical effectiveness.

       ``(iii) Weights of measures.--In developing the scoring and 
     ranking systems under clause (i), the Secretary shall assign 
     weights to the measures used by the Secretary under such 
     system pursuant to clause (ii). In assigning such weights, 
     the Secretary shall provide greater weight to the measures 
     that measure clinical effectiveness.
       ``(iv) Risk adjustment.--In developing the scoring and 
     ranking systems under clause (i), the Secretary shall 
     establish procedures for adjusting the data used under the 
     system to take into account differences in the health status 
     of individuals receiving dialysis services from providers of 
     services and renal dialysis facilities.
       ``(v) Update.--

       ``(I) In general.--The Secretary shall as determined 
     appropriate, but in no case more often than once each 12-
     month period, update the scoring and ranking systems 
     developed under clause (i), including the measures used by 
     the Secretary under such system pursuant to clause (ii), the 
     weights established pursuant to clause (iii), and the risk 
     adjustment procedures established pursuant to clause (iv).
       ``(II) Comparison for national quality improvement 
     payments.--Each update under subclause (I) of the National 
     Quality Improvement Payments shall allow for the comparison 
     of data from one year to the next for purposes of identifying 
     which providers of services and renal dialysis facilities 
     will receive such Payments.
       ``(III) Consultation.--In determining when and how to 
     update the scoring and ranking systems under subclause (I), 
     the Secretary shall consult with the Quality Advisory Board.

       ``(F) Funding of payments.--
       ``(i) Reduction in payments.--In order to provide the 
     funding for the financial incentive payments under this 
     paragraph, for each year (beginning with 2007), the Secretary 
     shall reduce each payment under paragraphs (12) and (13) to a 
     provider of service and a renal dialysis facility by an 
     amount equal to 2 percent of the payment.
       ``(ii) Amount available.--The amount available for 
     financial incentive payments under this section with respect 
     to a year shall be equal to the amount of the reduction in 
     expenditures under the Federal Supplementary Medical 
     Insurance Trust Fund in the year as a result of the 
     application of clause (i).''.

     SEC. 5. MEDICARE INNOVATIVE QUALITY PRACTICE AWARD PROGRAM.

       (a) Establishment.--The Secretary of Health and Human 
     Services (in this section referred to as the ``Secretary'') 
     shall establish a program under which the Secretary shall 
     award bonus payments to entities and individuals providing 
     items and services under the medicare program under title 
     XVIII of the Social Security Act that demonstrate innovative 
     practices, structural improvements, or capacity enhancements 
     that improve the quality of health care provided to medicare 
     beneficiaries by such entities and individuals.
       (b) Period of Program.--Awards under the program shall be 
     made during 2006, 2007, and 2008.
       (c) Selection of Recipients.--
       (1) In general.--The Secretary shall ensure that the 
     entities and individuals that receive an award under this 
     section have demonstrated improvements in the quality of 
     health care provided to medicare beneficiaries by such 
     entities and individuals through comparison with a control 
     group or baseline evaluation. For purposes of the program, 
     improvements in the quality of health care provided to 
     medicare beneficiaries shall be defined as providing 
     additional services, such as translator services and health 
     literacy education services, or providing care to an expanded 
     service area or an expanded population through telemedicine, 
     increased cultural competence, or other means, in combination 
     with improved health outcomes or reduced beneficiary costs.
       (2) All entities and individuals eligible.--Any entity, 
     including a plan, or individual that is providing services 
     under the medicare program is eligible for receiving an award 
     under this section.
       (3) Consultation.--In selecting the recipients of the 
     awards under this section, the Secretary shall consult with 
     the Quality Advisory Board established under section 1898 of 
     the Social Security Act, as added by section 7.
       (d) Minimum Number of Awards.--The Secretary shall make at 
     least 10 awards under this section in each year of the 
     program.
       (e) Application.--An entity or individual desiring an award 
     under this section shall submit an application to the 
     Secretary at such time, in such manner, and accompanied by 
     such information as the Secretary may reasonably require.
       (f) Amount of Award.--
       (1) In general.--Subject to paragraph (2) and subsection 
     (h), the Secretary shall determine the amount of awards under 
     this section.
       (2) Requirement.--In determining the amount of awards under 
     this section, the Secretary shall ensure that--
       (A) no single award is excessive; and
       (B) consideration is given to the number of beneficiaries 
     served by the entity or individual receiving the award.
       (g) Report.--Not later than 6 months after the date on 
     which the program established under subsection (a) ends, the 
     Secretary shall submit to Congress a report on the program 
     together with such recommendations for legislation or 
     administrative action as the Secretary determines 
     appropriate.
       (h) Funding.--Out of any funds in the Treasury not 
     otherwise appropriated, there are appropriated $10,000,000 
     for each of 2006, 2007, and 2008 to carry out this section.

     SEC. 6. QUALITY IMPROVEMENT DEMONSTRATION PROGRAM FOR 
                   PEDIATRIC RENAL DIALYSIS FACILITIES PROVIDING 
                   CARE TO MEDICARE BENEFICIARIES WITH END STAGE 
                   RENAL DISEASE.

       (a) Demonstration Projects.--
       (1) Establishment.--The Secretary of Health and Human 
     Services (in this section referred to as the ``Secretary'') 
     shall conduct a 3-year demonstration program under which the 
     Secretary establishes demonstration projects that encourage 
     pediatric dialysis facilities to provide superior quality 
     health care to individuals with end stage renal disease.
       (2) Consultation in selecting sites.--In selecting the 
     demonstration project sites under this section, the Secretary 
     shall consult with the Quality Advisory Board established 
     under section 1898 of the Social Security Act, as added by 
     section 7.
       (3) Submission of quality data.--Under the demonstration 
     projects, demonstration sites shall select appropriate 
     measures of quality of care provided to individuals eligible 
     for benefits under title XVIII of the Social Security Act who 
     are under 18 years of age and shall report data on such 
     measures to the Secretary.
       (4) Assessment of measures.--The Secretary, in consultation 
     with the Quality Advisory Board, shall assess the validity 
     and reliability of the measures selected under paragraph (2).
       (b) Waiver Authority.--The Secretary may waive such 
     requirements of titles XI and XVIII as may be necessary to 
     carry out the purposes of the demonstration program 
     established under this section.
       (c) Funding.--
       (1) In general.--Subject to paragraph (2), the Secretary 
     shall provide for the transfer from the Federal Supplementary 
     Medical Insurance Trust Fund under section 1841 of the Social 
     Security Act (42 U.S.C. 1395t) of such funds as are necessary 
     for the costs of carrying out the demonstration program under 
     this section.
       (2) Budget neutrality.--In conducting the demonstration 
     program under this section, the Secretary shall ensure that 
     the aggregate expenditures made by the Secretary do

[[Page S7319]]

     not exceed the amount which the Secretary would have expended 
     if the demonstration program under this section was not 
     implemented.
       (d) Report.--Not later than 6 months after the date on 
     which the demonstration program established under this 
     section ends, the Secretary shall prepare and submit to 
     Congress a report on the demonstration program together 
     with--
       (1) recommendations on whether pediatric renal dialysis 
     facilities should be included in the renal dialysis 
     performance payment program under section 1881(b)(14) of the 
     Social Security Act (42 U.S.C. 1395rr(b)(14)), as added by 
     section 4(4); and
       (2) such recommendations for legislation or administrative 
     action as the Secretary determines appropriate.
       (e) Pediatric Renal Dialysis Facility Defined.--The term 
     ``pediatric renal dialysis facility'' means a renal dialysis 
     facility that receives payments under paragraph (12) or (13) 
     of section 1881(b) of the Social Security Act (42 U.S.C. 
     1395rr(b)) and is not eligible to participate in the renal 
     dialysis performance payment program under paragraph (14) of 
     such section (as added by section 4(4)) because of the 
     application of subparagraph (A)(iv) of such paragraph.

     SEC. 7. MEDICARE QUALITY ADVISORY BOARD.

       Title XVIII of the Social Security Act, as amended by 
     section 1016 of the Medicare Prescription Drug, Improvement, 
     and Modernization Act of 2003 (Public Law 108-173; 117 Stat. 
     2447), is amended by adding at the end the following new 
     section:


                        ``quality advisory board

       ``Sec. 1898. (a) Establishment.--The Secretary shall 
     establish a Medicare Quality Advisory Board (in this section 
     referred to as the `Board').
       ``(b) Membership and Terms.--
       ``(1) In general.--Subject to paragraphs (3), (4), and (5), 
     the Board shall be composed of representatives described in 
     paragraph (2) who shall serve for such term as the Secretary 
     may specify.
       ``(2) Representatives.--Representatives described in this 
     subparagraph include representatives of the following:
       ``(A) Patients or patient advocate organizations.
       ``(B) Individuals with expertise in the provision of 
     quality care, such as medical directors, heads of hospital 
     quality improvement committees, health insurance plan 
     representatives, and academic researchers.
       ``(C) Health care professionals and providers.
       ``(D) Organizations that focus on the measurement and 
     reporting of quality indicators.
       ``(E) State government health care programs.
       ``(3) Majority nonproviders.--Individuals who are directly 
     involved in the provision, or management of the delivery, of 
     items and services covered under this title shall not 
     constitute a majority of the membership of the Board.
       ``(4) Experience with urban and rural health care issues.--
     The membership of the Board should be representative of 
     individuals with experience with urban health care issues and 
     individuals with experience with rural health care issues.
       ``(5) Experience across a spectrum of activities.--The 
     membership of the Board should be representative of 
     individuals with experience across the spectrum of activities 
     that the Secretary is responsible for with respect to this 
     title, including the coverage of new services and 
     technologies, payment rates and methodologies, beneficiary 
     services, and claims processing.
       ``(c) Duties.--
       ``(1) Incentive programs.--
       ``(A) Advice.--The Board shall advise the Secretary 
     regarding--
       ``(i) the development, implementation, and updating of the 
     scoring and ranking systems under sections 1860C-2(e) and 
     1881(b)(14)(E);
       ``(ii) the determination of the applicable percent for 
     national performance quality payments under sections 1860C-
     2(c) and 1881(b)(14)(C);
       ``(iii) the selection of recipients of innovative quality 
     practice awards under the program under section 5 of the 
     Medicare Quality Improvement Act of 2004;
       ``(iv) the selection of demonstration project sites and the 
     assessment of measures of quality of care under the 
     demonstration program under section 6 of the Medicare Quality 
     Improvement Act of 2004; and
       ``(v) the study and report under section 8(b) of the 
     Medicare Quality Improvement Act of 2004.
       ``(B) Annual report on incentive programs.--The Board shall 
     submit an annual report to the Secretary and Congress on the 
     programs under sections 1860C-2 and 1881(b)(14).
       ``(C) Additional duties.--The Board shall perform such 
     additional functions to assist the Secretary in carrying out 
     the programs described in clauses (ii) and (iii) of 
     subparagraph (A) and in subparagraph (B) as the Secretary may 
     specify.
       ``(2) Development and assessment of national priorities and 
     agenda.--The Board shall develop and assess national 
     priorities and an agenda for improving the quality of items 
     and services furnished to individuals entitled to benefits 
     under this title.
       ``(d) Waiver of Administrative Limitation.--The Secretary 
     shall establish the Board notwithstanding any limitation that 
     may apply to the number of advisory committees that may be 
     established (within the Department of Health and Human 
     Services or otherwise).''.

     SEC. 8. STUDIES AND REPORTS ON FINANCIAL INCENTIVES FOR 
                   QUALITY ITEMS AND SERVICES UNDER THE MEDICARE 
                   PROGRAM.

       (a) IOM Study and Report on How Medicare Payments for Items 
     and Services Affect the Quality of Such Items and Services.--
       (1) Study.--The Secretary of Health and Human Services (in 
     this section referred to as the ``Secretary'') shall request 
     the Institute of Medicine of the National Academy of Sciences 
     to conduct a study on how the payment mechanisms for items 
     and services under the original medicare fee-for-service 
     program under parts A and B of title XVIII of the Social 
     Security Act effect the quality of such items and services.
       (2) Report to congress.--Not later than January 1, 2006, 
     the Secretary shall submit to Congress a report on the 
     results of the study described in paragraph (1) together with 
     such recommendations for legislation or administrative action 
     as the Secretary determines appropriate.
       (b) HHS Study and Report on Providing Financial Incentives 
     for Quality Services Under the Original Medicare Fee-for-
     Service Program.--
       (1) Study.--The Secretary of Health and Human Services 
     shall conduct a study on the actions necessary to establish a 
     payment system under the original medicare fee-for-service 
     program under parts A and B of title XVIII of the Social 
     Security Act that aligns the quality of services provided 
     under such program with the reimbursement provided under such 
     program for such services.
       (2) Report.--
       (A) In general.--Not later than January 1, 2008, the 
     Secretary shall submit a report to Congress on the study 
     conducted under paragraph (1).
       (B) Contents.--The report submitted under subparagraph (A) 
     shall contain recommendations with respect to--
       (i) the incremental steps necessary to develop the payment 
     system described in paragraph (1);
       (ii) the performance measures to be used under such payment 
     system;
       (iii) the incentive approaches to be used under such 
     payment system;
       (iv) the geographic and risk adjusters to be used under 
     such payment system; and
       (v) a strategy for aligning payment with performance across 
     all parts of the medicare program.
       (3) Requirement.--In conducting the study under paragraph 
     (1) and preparing the report under paragraph (2), the 
     Secretary shall--
       (A) consult with the Quality Advisory Board established 
     under section 1898 of the Social Security Act, as added by 
     section 7; and
       (B) take into account the report on health care performance 
     measures submitted by the Institute of Medicine of the 
     National Academy of Sciences under section 238 of the 
     Medicare Prescription Drug, Improvement, and Modernization 
     Act of 2003 (Public Law 108-173; 117 Stat. 2213).

     SEC. 9. MEDPAC STUDY AND REPORT ON USE OF ADJUSTER MECHANISMS 
                   UNDER MEDICARE QUALITY PERFORMANCE INCENTIVE 
                   PAYMENT PROGRAMS.

       (a) Study.--The Medicare Payment Advisory Commission shall 
     conduct a study--
       (1) to determine whether it is appropriate to incorporate a 
     geographic adjuster into the quality performance incentive 
     payment programs under sections 1860C-2 and 1881(b)(14) of 
     the Social Security Act, as added by sections 3 and 4, 
     respectively, to account for different environments of care, 
     regional payment variation, regional variation of patient 
     satisfaction, and regional case mix variation; and
       (2) on the most appropriate methods to risk adjust data 
     used under the scoring and ranking system under such programs 
     pursuant to sections 1860C-2(e)(4) and 1881(b)(14)(E)(iv) of 
     the Social Security Act.
       (b) Report.--Not later than January 1, 2006, the Commission 
     shall submit a report to Congress and the Secretary of Health 
     and Human Services on the study conducted under subsection 
     (a) together with recommendations for such legislation and 
     administrative actions as the Commission considers 
     appropriate. If such study concludes that a geographic 
     adjuster described in subsection (a)(1) is appropriate, the 
     Commission shall include in the report recommendations on how 
     such adjuster could be incorporated into the quality 
     performance incentive payment programs described in such 
     subsection.

     SEC. 10. DEMONSTRATION PROGRAM ON MEASURING THE QUALITY OF 
                   HEALTH CARE FURNISHED TO PEDIATRIC PATIENTS 
                   UNDER THE MEDICAID AND SCHIP PROGRAMS.

       (a) Establishment.--
       (1) In general.--The Secretary of Health and Human Services 
     (in this section referred to as the ``Secretary'') shall 
     conduct a 3-year demonstration program to examine the 
     development and use of quality measures, pay-for-performance 
     programs, and other strategies in order to encourage 
     providers to furnish superior quality health care to 
     individuals under 18 years of age under the medicaid program 
     under title XIX of the Social Security Act (42 U.S.C. 1396 et 
     seq.) and under the SCHIP program under title XXI of such Act 
     (42 U.S.C. 1397aa et seq.).
       (2) Authority.--The Secretary shall conduct the 
     demonstration program under this section pursuant to the 
     authority provided under this section and not under the 
     authority provided under section 1115 of the Social Security 
     Act (42 U.S.C. 1315).

[[Page S7320]]

       (b) Sites To Include Multiple Settings and Providers.--In 
     selecting the demonstration program sites under this section, 
     the Secretary shall ensure that the sites include health care 
     delivery in multiple settings and through multiple providers, 
     such as school-based settings and mental health providers.
       (c) Waiver Authority.--The Secretary may waive such 
     requirements of titles XI, XIX, and XXI of the Social 
     Security Act (42 U.S.C. 1301 et seq.; 1396 et seq.; 1397aa et 
     seq.) as may be necessary to carry out the purposes of the 
     demonstration program under this section.
       (d) Funding.--
       (1) In general.--Subject to paragraph (2), for purposes of 
     conducting the demonstration program under this section, 
     expenditures under the demonstration program shall be treated 
     as medical assistance under section 1903 of the Social 
     Security Act (42 U.S.C. 1396) or child health assistance 
     under section 2105 of such Act (42 U.S.C. 1397).
       (2) Budget neutrality.--In conducting the demonstration 
     program under this section, the Secretary shall ensure that 
     the aggregate expenditures made by the Secretary do not 
     exceed the amount which the Secretary would have expended if 
     the demonstration program under this section had not been 
     implemented.
       (e) Report.--Not later than 6 months after the date on 
     which the demonstration program under this section ends, the 
     Secretary shall submit to Congress a report on the 
     demonstration program together with such recommendations for 
     legislation or administrative action as the Secretary 
     determines appropriate.

     SEC. 11. PROVISIONS RELATING TO MEDICAID QUALITY 
                   IMPROVEMENTS.

       (a) Authorization for Additional Staff at the Center for 
     Medicaid and State Operations.--
       (1) Additional staff.--The Secretary of Health and Human 
     Services shall have the authority to hire 5 full-time 
     employees to be employed within the Center for Medicaid and 
     State Operations within the Centers for Medicare & Medicaid 
     Services from among individuals who have experience with, or 
     have been trained as, health professionals and who have 
     experience in any of the following areas:
       (A) Quality improvement.
       (B) Chronic care management.
       (C) Care coordination.
       (2) Requirement foe experience with pediatric 
     populations.--At least 1 of the individuals employed within 
     the Center for Medicaid and State Operations pursuant to 
     paragraph (1) shall have experience with pediatric 
     populations.
       (3) Duties of additional staff.--The employees hired under 
     paragraph (1) shall be responsible for developing strategies 
     to access and promote quality improvement, chronic care 
     management, and care coordination with the medicaid program 
     and for providing technical assistance to the States.
       (4) Authorization of appropriations.--There are authorized 
     to be appropriated such sums as may be necessary to carry out 
     this subsection.
       (b) CMS Study and Report on Medicare and Medicaid Data 
     Coordination.--
       (1) Study.--The Secretary of Health and Human Services 
     shall conduct a study to identify--
       (A) efforts to coordinate and integrate data from the 
     medicare program under title XVIII of the Social Security Act 
     and the medicaid program under title XIX of such Act;
       (B) barriers to data coordination;
       (C) the potential benefits of data integration as perceived 
     by medicare and medicaid program officials, policymakers, 
     health care providers, and beneficiaries; and
       (D) steps necessary to coordinate and integrate the 
     beneficiary data from the medicare and medicaid programs.
       (2) Report to congress.--Not later than December 31, 2004, 
     the Secretary of Health and Human Services shall submit to 
     Congress a report on the results of the study conducted under 
     paragraph (1) together with such recommendations for 
     legislation or administrative action as the Secretary 
     determines appropriate.
       (c) Medpac Study and Report on Beneficiaries Who Are Dually 
     Eligible for Medicare and Medicaid.--
       (1) Study.--The Medicare Payment Advisory Commission shall 
     conduct a study to determine the characteristics of 
     individuals who are eligible to receive benefits under both 
     the medicare and medicaid programs under titles XVIII and XIX 
     of the Social Security Act, respectively, identify the 
     costliest groups of individuals who are eligible for benefits 
     under both programs, identify the services used by such 
     individuals, and develop recommendations on how the provision 
     of those services could be better coordinated for improved 
     health outcomes and reduced costs.
       (2) Report.--Not later than June 30, 2005, the Commission 
     shall submit a report to Congress on the study conducted 
     under paragraph (1) together with recommendations for such 
     legislation and administrative actions as the Commission 
     considers appropriate.
       (d) Medpac Study and Report on Care Coordination Programs 
     for Dual-Eligibles.--
       (1) Study.--The Medicare Payment Advisory Commission shall 
     conduct a study on care coordination programs available to 
     individuals who are eligible to receive benefits under both 
     the medicare and medicaid programs under titles XVIII and XIX 
     of the Social Security Act, respectively, the impact of such 
     care coordination programs on those individuals, the impact 
     of such care coordination programs on the costs of the 
     medicare and medicaid programs to the Federal Government, and 
     whether any savings from care coordination programs are 
     counted as a benefit to either program.
       (2) Report.--Not later than June 30, 2005, the Commission 
     shall submit a report to Congress on the study conducted 
     under paragraph (1) together with recommendations for such 
     legislation and administrative actions as the Commission 
     considers appropriate.

     SEC. 12. DEMONSTRATION PROGRAM FOR MEDICAL SMART CARDS.

       (a) In General.--The Secretary of Health and Human Services 
     (in this section referred to as the ``Secretary'') shall 
     establish a 5-year demonstration program under which the 
     Secretary shall award grants for the establishment of 
     demonstration projects to provide for the development and use 
     of Medical Smart Cards and to examine the impact of Medical 
     Smart Cards on health care costs, quality of care, and 
     patient safety.
       (b) Eligibility.--To be eligible to receive a grant under 
     subsection (a), an entity shall be a public or private 
     nonprofit entity.
       (c) Application.--An eligible entity desiring a grant under 
     this section shall submit an application to the Secretary at 
     such time, in such manner, and accompanied by such 
     information as the Secretary may reasonably require.
       (d) Approval of Applications.--
       (1) In general.--The Secretary shall approve applications 
     for grants under this section in accordance with criteria 
     established by the Secretary.
       (2) Limitation.--The Secretary shall approve at least 1 
     application for a demonstration project that is conducted at 
     a hospital or hospital system with a large rural service 
     area.
       (e) Use of Funds.--An eligible entity shall use amounts 
     received under a grant under this section to carry out the 
     purposes described in subsection (a).
       (f) Report.--Not later than 6 months after the date on 
     which the demonstration program established under subsection 
     (a) ends, the Secretary shall submit to Congress a report on 
     the demonstration program together with such recommendations 
     for legislation or administrative action as the Secretary 
     determines appropriate.
       (g) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as may be necessary to carry out 
     this section.
                                 ______
                                 
      By Mr. KOHL (for himself and Mr. Hatch):
  S. 2563. A bill to require imported explosives to be marked in the 
same manner as domestically manufactured explosives; to the Committee 
on the Judiciary.
  Mr. KOHL. Mr. President, I rise today with Senator Hatch to introduce 
the Imported Explosives Security Act. Domestic manufacturers are 
required to place identification markings on all explosive materials 
they produce for important security reasons. These markings enable law 
enforcement officers to determine the source of explosives and help 
them solve crimes. Yet, these same identifying markings are not 
required of those explosives manufactured overseas and imported into 
our country. This impedes law enforcement efforts and poses a security 
risk.
  The legislation we have introduced today is simple and 
straightforward. The legislation would simply treat imported explosives 
just like those manufactured inside the United States, requiring all 
imported explosives to carry the same markings currently placed on 
domestic explosives. It would require the name of the manufacturer, 
along with the time, date and shift of manufacture, to be placed on all 
explosives materials, whether they are manufactured here or abroad. 
These markings can be a tremendously useful tool for law enforcement 
officials, enabling investigators to determine the source of explosive 
materials. According to the Bureau of Alcohol, Tobacco, Firearms and 
Explosives, the explosives can then be tracked through records kept by 
those who manufacture and sell them, often leading them to the criminal 
who has stolen or misused them. At a recent Senate hearing, FBI 
Director Mueller acknowledged that ``determining the source of the 
components to any explosive device will assist you in determining who 
was responsible for any act using such a device.''
  The Bureau of Alcohol, Tobacco, Firearms and Explosives first sought 
to fill this gap in the law when it published a notice of a proposed 
rulemaking in November 2000. Now, nearly 4 years later, this rulemaking 
still has not been finalized. Each year, more than 25,000 pounds of 
stolen, lost, or abandoned explosives are recovered by law enforcement. 
When explosives do not carry appropriate markings, they

[[Page S7321]]

cannot be quickly and effectively traced for criminal enforcement 
purposes.
  Millions of pounds of unmarked explosives have already been 
distributed in this country. Each day we delay closing this loophole, 
we let more untraceable explosive materials cross our borders and 
undermine our national security. Failure to address this very 
straightforward issue in a timely manner unnecessarily hinders law 
enforcement's ability to solve crimes. Because the Department of 
Justice has not issued regulations to close this loophole in a timely 
manner, it is now incumbent upon us to act for them.
                                 ______
                                 
      By Mr. CRAPO (for himself, Mr. Fitzgerald, Mr. Lugar, Mr. Smith, 
        Mr. Wyden, Mr. Craig, and Mr. Roberts):
  S. 2565. A bill to amend the Agriculture Adjustment Act to convert 
the dairy forward pricing program into a permanent program of the 
Department of Agriculture; to the Committee on Agriculture, Nutrition, 
and Forestry.
  Mr. CRAPO. Mr. President, I rise to introduce the Milk Forward 
Contracting Act, a bill to make permanent the dairy forward pricing 
pilot program.
  Without question, dairy producers are subject to a very fickle dairy 
market. Dairy prices can go from all time highs to all time lows over a 
course of a year, making long-term planning extremely difficult. This 
legislation will ensure the continued availability of an important risk 
management tool for dairy producers and enable their long-term business 
planning.
  Over the pat 4 years, dairy producers and processors have been able 
to voluntarily enter into agreements for the sale of a specific volume 
of milk for a set price over an established period of time trough the 
dairy forward pricing pilot program. Many producers in my home State of 
Idaho and nationwide have used this voluntary program to reduce 
marketing risk by securing stable prices. Unfortunately, this program 
expires in December of 2004, and dairy producers want to be able to 
continue to utilize this program.
  Forward contracting is a very useful tool for dairy farmers. In fact, 
a 2002 U.S. Department of Agriculture USDA report to Congress 
demonstrated that the program has been effective in reducing price 
volatility. According to USDA data for the September 2000 through 
December 2002 period, contracted milk averages $14.06 per hundredweight 
with a range of $1.63 between high and low prices, while non-contracted 
milk averaged $13.68 per hundredweight with a range of $6.69. 
Additionally, the U.S. General Accounting Office GAO reported that 
forward contracting is a risk management tool most frequently used by 
producers of other farm commodities.
  Likewise, dairy producers should also have access to this important 
tool. There is no reason that dairy farmers should be forced to ride a 
dairy price roller coaster, when the extension of this sensible program 
would provide farm families with an option to help plan for their 
futures.
                                 ______
                                 
      By Mr. BINGAMAN (for himself, Mr. Corzine, Mr. Lautenberg, Ms. 
        Stabenow, Mrs. Clinton, Mr. Johnson, Ms. Mikulski, Mr. Durbin, 
        and Mr. Dayton):
  S. 2566. A bill to amend title II of the Social Security Act to phase 
out the 24-month waiting period for disabled individuals to become 
eligible for medicare benefits, to eliminate the waiting period for 
individuals with life-threatening conditions, and for other purposes; 
to the Committee on Finance.
  Mr. BINGAMAN. Mr. President, I rise today to introduce legislation 
entitled ``Ending the Medicare Disability Waiting Period Act of 2004'' 
with Senators Corzine, Lautenberg, Stabenow, Clinton, Johnson, 
Mikulski, Durbin, and Dayton. This legislation would phase-out the 
current 2-year waiting period that people with disabilities must endure 
after qualifying for Social Security Disability Insurance (SSDI). In 
the interim, the bill would also create a process by which the 
Secretary can immediately waive the waiting period for people with 
life-threatening illnesses.
  When Medicare was expanded in 1972 to include people with significant 
disabilities, lawmakers created the 24-month waiting period. According 
to a July 2003 report from the Commonwealth Fund, it is estimated that 
over 1.2 million SSDI beneficiaries are in the Medicare waiting period 
at any given time, ``all of whom are unable to work because of their 
disability and most of whom have serious health problems, low incomes, 
and limited access to health insurance.''
  As Karen Davis, president of the Commonwealth Fund, said of the 
report, ``Individuals in the waiting period for Medicare suffer from a 
broad range of debilitating diseases and are in urgent need of 
appropriate medical care to manage their conditions. Eliminating the 2-
year wait would ensure access to care for those already on the way to 
Medicare.''
  These are people who are the most seriously disabled in our society 
and most in need of immediate health services. And yet, it is estimated 
that one-third of the 1.2 million currently federal policy puts the 
disabled on hold for 2 long years. The consequences are unacceptable 
and are, in fact, dire.
  In fact, various studies show that death rates among SSDI recipients 
are highest during the first two years of enrollment. For example, the 
Commonwealth Fund report, entitled Elimination of Medicare's Waiting 
Period for Seriously Disabled Adults: Impact on Coverage and Costs, 4 
percent of these people die during the waiting period. Of the estimated 
400,000 uninsured disabled Americans in the waiting period at any given 
time, 16,000 of them will die awaiting Medicare coverage. This is 
unacceptable.
  Moreover, this does not factor in the serious health problems that 
others experience while waiting for Medicare coverage during the 2-year 
period. Although there is no direct data on the profile of SSDI 
beneficiaries in the 2-year waiting period, the Commonwealth Fund has 
undertaken a separate analysis of the Medicare Current Beneficiary 
Survey for 1998 to get a good sense of the demographic characteristics, 
income, and health conditions of this group.
  According to the analysis, ``. . . 45 percent of nonelderly Medicare 
beneficiaries with disabilities had incomes below the federal poverty 
line, and 77 percent had incomes below 200 percent of poverty. Fifth-
nine percent reported that they were in fair or poor health; of this 
group, more than 90 percent reported that they suffered from one or 
more chronic illnesses, including arthritis (52%), hypertension (46%), 
mental disorder (36%), heart condition (35%), chronic lung disease 
(26%), cancer (20%), diabetes (19%), and stroke (12%).''
  As the Medicare Rights Center has said, ``By forcing Americans with 
disabilities to wait 24 months for Medicare coverage, the current law 
effectively sentences these people to inadequate health care, poverty, 
or death . . . Since disability can strike anyone, at any point in 
life, the 24-month waiting period should be of concern to everyone, not 
just the millions of Americans with disabilities today.''
  Although elimination of the Medicare waiting period will certainly 
increase Medicare costs, it is important to note that there will be 
some corresponding decrease in Medicaid costs. Medicaid, which is 
financed by both federal and state governments, often provides coverage 
for a subset of disabled Americans in the waiting period, as long as 
they meet certain income and asset limits. Income limits are typically 
at or below the poverty level, including at just 74 percent of the 
poverty line in New Mexico, with assets generally limited to just 
$2,000 for individuals and $3,000 for couples.
  The Commonwealth Fund estimates that, of the 1.26 million people in 
the waiting period, 40 percent are enrolled in Medicaid. As a result, 
the Commonwealth Fund estimates that federal Medicaid savings would 
offset nearly 30 percent of the increased costs in its study. 
Furthermore, states, which have been struggling financially with their 
Medicaid programs, would reap a windfall that would help them better 
manage their Medicaid programs.
  Furthermore, from a continuity of care point of view, it makes little 
sense that somebody with disabilities must leave their job and their 
health providers associated with that plan, move on the Medicaid to 
often have a different set of providers, to then switch to Medicare and 
yet another set of providers.
  And finally, private-sector employers and employees in those risk-
pools

[[Page S7322]]

would also benefit from the passage of the bill. As the report notes, 
``. . . to the extent that disabled adults rely on coverage through 
their prior employer or their spouse's employer, eliminating the 
waiting period would also produce savings to employers who provide this 
coverage.''
  I urge passage of this legislation and ask unanimous consent that the 
text of the bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2566

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Ending the 
     Medicare Disability Waiting Period Act of 2004''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.
Sec. 2. Phase out of waiting period for medicare disability benefits.
Sec. 3. Elimination of waiting period for individuals with life-
              threatening conditions.
Sec. 4. Institute of medicine study and report on delay and prevention 
              of disability conditions.

     SEC. 2. PHASE OUT OF WAITING PERIOD FOR MEDICARE DISABILITY 
                   BENEFITS.

       (a) In General.--Section 226(b) of the Social Security Act 
     (42 U.S.C. 426(b)) is amended--
       (1) in paragraph (2)(A), by striking ``, and has for 24 
     calendar months been entitled to,'' and inserting ``, and for 
     the waiting period (as defined in subsection (k)) has been 
     entitled to,'';
       (2) in paragraph (2)(B), by striking ``, and has been for 
     not less than 24 months,'' and inserting ``, and has been for 
     the waiting period (as defined in subsection (k)),'';
       (3) in paragraph (2)(C)(ii), by striking ``, including the 
     requirement that he has been entitled to the specified 
     benefits for 24 months,'' and inserting ``, including the 
     requirement that the individual has been entitled to the 
     specified benefits for the waiting period (as defined in 
     subsection (k)),''; and
       (4) in the flush matter following paragraph 
     (2)(C)(ii)(II)--
       (A) in the first sentence, by striking ``for each month 
     beginning with the later of (I) July 1973 or (II) the twenty-
     fifth month of his entitlement or status as a qualified 
     railroad retirement beneficiary described in paragraph (2), 
     and'' and inserting ``for each month beginning after the 
     waiting period (as so defined) for which the individual 
     satisfies paragraph (2) and'';
       (B) in the second sentence, by striking ``the `twenty-fifth 
     month of his entitlement' refers to the first month after the 
     twenty-fourth month of entitlement to specified benefits 
     referred to in paragraph (2)(C) and''; and
       (C) in the third sentence, by striking ``, but not in 
     excess of 78 such months''.
       (b) Schedule for Phase Out of Waiting Period.--Section 226 
     of the Social Security Act (42 U.S.C. 426) is amended by 
     adding at the end the following new subsection:
       ``(k) For purposes of subsection (b) (and for purposes of 
     section 1837(g)(1) of this Act and section 7(d)(2)(ii) of the 
     Railroad Retirement Act of 1974), the term `waiting period' 
     means--
       ``(1) for 2005, 18 months;
       ``(2) for 2006, 16 months;
       ``(3) for 2007, 14 months;
       ``(4) for 2008, 12 months;
       ``(5) for 2009, 10 months;
       ``(6) for 2010, 8 months;
       ``(7) for 2011, 6 months;
       ``(8) for 2012, 4 months;
       ``(9) for 2013, 2 months; and
       ``(10) for 2014 and each subsequent year, 0 months.''.
       (c) Conforming Amendments.--
       (1) Sunset.--Effective January 1, 2014, subsection (f) of 
     section 226 of the Social Security Act (42 U.S.C. 426) is 
     repealed.
       (2) Medicare description.--Section 1811(2) of such Act (42 
     U.S.C. 1395c(2)) is amended by striking ``entitled for not 
     less than 24 months'' and inserting ``entitled for the 
     waiting period (as defined in section 226(k))''.
       (3) Medicare coverage.--Section 1837(g)(1) of such Act (42 
     U.S.C. 1395p(g)(1)) is amended by striking ``of the later of 
     (A) April 1973 or (B) the third month before the 25th month 
     of such entitlement'' and inserting ``of the third month 
     before the first month following the waiting period (as 
     defined in section 226(k)) applicable under section 226(b)''.
       (4) Railroad retirement system.--Section 7(d)(2)(ii) of the 
     Railroad Retirement Act of 1974 (45 U.S.C. 231f(d)(2)(ii)) is 
     amended--
       (A) by striking ``, for not less than 24 months'' and 
     inserting ``, for the waiting period (as defined in section 
     226(k) of the Social Security Act); and
       (B) by striking ``could have been entitled for 24 calendar 
     months, and'' and inserting ``could have been entitled for 
     the waiting period (as defined is section 226(k) of the 
     Social Security Act), and''.
       (d) Effective Date.--Except as provided in subsection 
     (c)(1), the amendments made by this section shall apply to 
     insurance benefits under title XVIII of the Social Security 
     Act with respect to items and services furnished in months 
     beginning at least 90 days after the date of the enactment of 
     this Act.

     SEC. 3. ELIMINATION OF WAITING PERIOD FOR INDIVIDUALS WITH 
                   LIFE-THREATENING CONDITIONS.

       (a) In General.--Section 226(h) of the Social Security Act 
     (42 U.S.C. 426(h)) is amended--
       (1) by redesignating paragraphs (1), (2), and (3) as 
     subparagraphs (A), (B), and (C), respectively;
       (2) in the matter preceding subparagraph (A) (as 
     redesignated by paragraph (1)), by inserting ``(1)'' after 
     ``(h)'';
       (3) in paragraph (1) (as designated by paragraph (2))--
       (A) in the matter preceding subparagraph (A) (as 
     redesignated by paragraph (1)), by inserting ``or any other 
     life-threatening condition identified by the Secretary'' 
     after ``amyotrophic lateral sclerosis (ALS)''; and
       (4) in subparagraph (B) (as redesignated by paragraph (1)), 
     by striking ``(rather than twenty-fifth month)''; and
       (5) by adding at the end the following new paragraph:
       ``(2) For purposes of identifying life-threatening 
     conditions under paragraph (1), the Secretary shall compile a 
     list of conditions that are fatal without medical treatment. 
     In compiling such list, the Secretary shall consult with the 
     Director of the National Institutes of Health (including the 
     Office of Rare Diseases), the Director of the Centers for 
     Disease Control and Prevention, the Director of the National 
     Science Foundation, and the Institute of Medicine of the 
     National Academy of Sciences.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to insurance benefits under title XVIII of the 
     Social Security Act with respect to items and services 
     furnished in months beginning at least 90 days after the date 
     of the enactment of this Act.

     SEC. 4. INSTITUTE OF MEDICINE STUDY AND REPORT ON DELAY AND 
                   PREVENTION OF DISABILITY CONDITIONS.

       (a) Study.--The Secretary of Health and Human Services (in 
     this section referred to as the ``Secretary'') shall request 
     that the Institute of Medicine of the National Academy of 
     Sciences conduct a study on the range of disability 
     conditions that can be delayed or prevented if individuals 
     receive access to health care services and coverage before 
     the condition reaches disability levels.
       (b) Report.--Not later than the date that is 2 years after 
     the date of enactment of this Act, the Secretary shall submit 
     to Congress a report containing the results of the Institute 
     of Medicine study authorized under this section.
       (c) Authorization of Appropriations.--There is authorized 
     to be appropriated to carry out this section $750,000 for the 
     period of fiscal years 2005 and 2006.
                                 ______
                                 
      By Mrs. FEINSTEIN:
  S. 2567. A bill to adjust the boundary of Redwood National Park in 
the State of California; to the Committee on Energy and Natural 
Resources.
  Mrs. FEINSTEIN. Mr. President, I am pleased to introduce companion 
legislation to H.R. 3638, a bill introduced by Congressman Mike 
Thompson in November 2003. This bill will adjust the boundary of 
Redwood National Park in the State of California to include the 
addition of the Mill Creek property.
  In 2002, the California Department of Parks and Recreation acquired 
from the Save-the-Redwoods League 25,500 acres of forest land known as 
the Mill Creek property in Del Norte County, which is contiguous with 
the Redwood National and State parks boundary. This bill would include 
within the park boundary the Mill Creek acquisition and about 900 acres 
of land acquired and added to the State redwood parks since the 1978 
expansion of the Redwood National Park boundary. There would be no 
Federal costs for land acquisition or development resulting from this 
legislation.
  These lands will be managed by the same cooperative management 
agreement between the National Park Service and the California 
Department of Parks and Recreation. This partnership is viewed as a 
model of interagency cooperative management efforts and will provide 
for more efficient and cost-effective management of an ecologically 
significant resource.
  This bill enjoys strong support from local and Federal officials, 
including Del Norte County and the Department of the Interior. Given 
this support and lack of controversy, I believe introducing companion 
legislation to be of great importance to ensure that our Redwood 
National Park is further protected.
  I have long held a deep interest in protecting California's 
magnificent Redwoods. The Headwaters Agreement that was negotiated in 
part in my offices in 1996 protected approximately 7,500 acres of old 
growth redwoods, which was the largest grove of redwoods held in 
private ownership at the time.

[[Page S7323]]

  I applaud Congressman Mike Thompson's commitment to this issue and 
hope that this bill receives strong bipartisan support.
  I urge my colleagues to support this legislation.
                                 ______
                                 
      By Mr. BIDEN:
  S. 2568. A bill to require the Secretary of the Treasury to mint 
coins in commemoration of the tercentenary of the birth of Benjamin 
Franklin, and for other purposes; to the Committee on Banking, Housing, 
and Urban Affairs.
  Mr. BIDEN. Mr. President, I rise today to introduce the Benjamin 
Franklin Commemorative Coin Act. This bill will authorize the U.S. Mint 
to produce a limited edition silver coin, in two designs, to honor the 
achievements of Benjamin Franklin, America's distinguished scientist, 
statesman, inventor and diplomat.
  In 2006, the United States will host a worldwide celebration marking 
the 300th anniversary of Franklin's birth on January 17, 1706. 
Activities, lectures and exhibits are being developed through the 
efforts of the Benjamin Franklin Tercentenary Commission, as ordered by 
the Benjamin Franklin Tercentenary Commission Act, Public Law 107-202. 
The Commission, on which I serve with other elected officials and 
private sector partners, is responsible for providing a proper tribute 
to one of our most remarkable founding fathers. Surcharges on the sale 
of the coin would help the commission pay for activities it plans for 
celebrating Benjamin Franklin's birthday.
  During the American Revolution, Franklin designed the first American 
coin--the ``Continental'' penny--and, until 1979, he was the only non-
President of the United States whose image graced circulating coin and 
paper currency. it is only fitting that we honor Franklin's legacy 
through issuance of a commemorative coin.
  This bill is the Senate companion to H.R. 3024, which was introduced 
by my colleague from Delaware, Congressman Mike Castle, and it 
presently enjoys 326 cosponsors. As celebrations for our great leader 
are planned, I hope that my colleagues will join me in supporting a 
commemorative coin for this important American. I ask unanimous consent 
that the text of this bill be printed in the Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2568

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Benjamin Franklin 
     Commemorative Coin Act''.

     SEC. 2. FINDINGS.

       Congress finds that_
       (1) Benjamin Franklin made historic contributions to the 
     development of our Nation in a number of fields, including 
     government, business, science, communications, and the arts;
       (2) Benjamin Franklin was the only Founding Father to sign 
     all of our Nation's organizational documents;
       (3) Benjamin Franklin spent his career as a successful 
     printer, which included printing the official currency for 
     the colonies of Pennsylvania, Delaware, New Jersey and 
     Maryland;
       (4) Franklin's ``Essay on Paper Currency'' of 1741 proposed 
     methods to fix the rate of exchange between the colonies and 
     Great Britain;
       (5) Benjamin Franklin, during the American Revolution, 
     designed the first American coin, the ``Continental'' penny;
       (6) Franklin made ``A Penny Saved is A Penny Earned'' a 
     household phrase to describe the American virtues of hard 
     work and economical living;
       (7) Franklin played a major role in the design of the Great 
     Seal of the United States, which appears on the $1 bill, and 
     other major American symbols;
       (8) Before 1979, Benjamin Franklin was the only non-
     president of the United States whose image graced circulating 
     coin and paper currency;
       (9) the official United States half dollar from 1948-1963 
     showed Franklin's portrait, as designed by John Sinnock;
       (10) Franklin's ``Way to Wealth'' has come to symbolize 
     America's commitment to free enterprise;
       (11) the Franklin Institute Science Museum in Philadelphia 
     (in this Act referred to as the ``Franklin Institute'') is a 
     museum with an interactive approach to science and technology 
     dedicated to the work of Benjamin Franklin;
       (12) the Franklin Institute houses the first steam printing 
     machine for coinage used by the United States Mint, which was 
     placed in service in 1836, the 130th anniversary year of 
     Franklin's birth;
       (13) in 1976, Franklin Hall in the Franklin Institute was 
     named the Official National Monument to the great patriot, 
     scientist, and inventor;
       (14) the Franklin Institute and 4 other major Benjamin 
     Franklin-related Philadelphia cultural institutions joined 
     hands in 2000 to organize international programs to 
     commemorate the forthcoming 300th anniversary of Franklin's 
     birth in 2006; and
       (15) in 2002, Congress passed the Benjamin Franklin 
     Tercentenary Commission Act (Public Law 107-202), creating a 
     panel of distinguished Americans to work with the private 
     sector in recommending appropriate Tercentenary programs, 
     with the Franklin Institute serving as its administrative 
     secretariat.

     SEC. 3. COIN SPECIFICATIONS.

       (a) Denominations.--The Secretary of the Treasury (in this 
     Act referred to as the ``Secretary'') shall mint and issue 
     the following coins:
       (1) $1 silver coins with younger franklin image on 
     obverse.--Not more than 250,000 $1 coins bearing the designs 
     specified in section 4(a)(2), each of which shall--
       (A) weigh 26.73 grams;
       (B) have a diameter of 1.500 inches; and
       (C) contain 90 percent silver and 10 percent copper.
       (2) $1 silver coins with older franklin image on obverse.--
     Not more than 250,000 $1 coins bearing the designs specified 
     in section 4(a)(3), each of which shall--
       (A) weigh 26.73 grams;
       (B) have a diameter of 1.500 inches; and
       (C) contain 90 percent silver and 10 percent copper.
       (b) Legal Tender.--The coins minted under this Act shall be 
     legal tender, as provided in section 5103 of title 31, United 
     States Code.
       (c) Numismatic Items.--For purposes of section 5136 of 
     title 31, United States Code, all coins minted under this Act 
     shall be considered to be numismatic items.
       (d) Use of the United States Mint at Philadelphia, 
     Pennsylvania.--It is the sense of the Congress that the coins 
     minted under this Act should be struck at the United States 
     Mint at Philadelphia, Pennsylvania, to the greatest extent 
     possible.

     SEC. 4. DESIGN OF COINS.

       (a) Design Requirements.--
       (1) In general.--The design of the coins minted under this 
     Act shall be emblematic of the life and legacy of Benjamin 
     Franklin.
       (2) $1 coins with younger franklin image.--
       (A) Obverse.--The obverse of the coins minted under section 
     3(a)(1) shall bear the image of Benjamin Franklin as a young 
     man.
       (B) Reverse.--The reverse of the coins minted under section 
     3(a)(1) shall bear an image related to Benjamin Franklin's 
     role as a patriot and a statesman.
       (3) $1 coins with older franklin image.--
       (A) Obverse.--The obverse of the coins minted under section 
     3(a)(2) shall bear the image of Benjamin Franklin as an older 
     man.
       (B) Reverse.--The reverse of the coins minted under section 
     3(a)(2) shall bear an image related to Benjamin Franklin's 
     role in developing the early coins and currency of the new 
     country.
       (4) Designation and inscriptions.--On each coin minted 
     under this Act, there shall be--
       (A) a designation of the value of the coin;
       (B) an inscription of the year ``2006''; and
       (C) inscriptions of the words ``Liberty'', ``In God We 
     Trust'', ``United States of America'', and ``E Pluribus 
     Unum''.
       (b) Selection.--The design for the coins minted under this 
     Act shall be--
       (1) selected by the Secretary after consultation with the 
     Commission of Fine Arts; and
       (2) reviewed by the Citizens Coin Advisory Committee 
     established under section 5135 of title 31, United States 
     Code.

     SEC. 5. ISSUANCE OF COINS.

       (a) Quality of Coins.--Coins minted under this Act shall be 
     issued in uncirculated and proof qualities.
       (b) Commencement of Issuance.--The Secretary may issue 
     coins minted under this Act beginning January 1, 2006, except 
     that the Secretary may initiate sales of such coins, without 
     issuance, before such date.
       (c) Termination of Minting Authority.--No coins shall be 
     minted under this Act after December 31, 2006.

     SEC. 6. SALE OF COINS.

       (a) Sale Price.--Notwithstanding any other provision of 
     law, the coins issued under this Act shall be sold by the 
     Secretary at a price equal to the face value, plus the cost 
     of designing and issuing such coins (including labor, 
     materials, dies, use of machinery, overhead expenses, and 
     marketing).
       (b) Bulk Sales.--The Secretary shall make bulk sales of the 
     coins issued under this Act at a reasonable discount.
       (c) Prepaid Orders at a Discount.--
       (1) In general.--The Secretary shall accept prepaid orders 
     for the coins minted under this Act before the issuance of 
     such coins.
       (2) Discount.--Sale prices with respect to prepaid orders 
     under paragraph (1) shall be at a reasonable discount.
       (d) Sales of Single Coins and Sets of Coins.--Coins of each 
     design specified under section 4 may be sold separately or as 
     a set containing a coin of each such design.

     SEC. 7. SURCHARGES.

       (a) Surcharge Required.--All sales of coins minted under 
     this Act shall include a surcharge of $10 per coin.
       (b) Distribution.--Subject to section 5134(f) of title 31, 
     United States Code, all surcharges which are received by the 
     Secretary

[[Page S7324]]

     from the sale of coins issued under this Act shall be 
     promptly paid by the Secretary to the Franklin Institute, for 
     purposes of the celebration of the Benjamin Franklin 
     Tercentenary.
       (c) Audits.--The Franklin Institute shall be subject to the 
     audit requirements of section 5134(f)(2) of title 31, United 
     States Code, for purposes of this Act.
                                 ______
                                 
      By Ms. SNOWE:
  S. 2569. A bill to amend section 227 of the Communications Act of 
1934 to clarify the prohibition on junk fax transmissions; to the 
Committee on Commerce, Science, and Transportation.
  Mr. SNOWE. Mr. President, I rise today to introduce the Junk Fax 
Prevention Act of 2004, a bill to strengthen our laws on protecting 
consumers and businesses from receiving unwanted commercial 
advertisements by facsimile, while at the same time preserving a key 
method of doing business for thousands of companies, large and small, 
across the United States. The sending of unsolicited commercial 
communications by facsimile--``junk faxes''--has been illegal since 
1991, and the Federal Communications Commission is charged with 
enforcing that prohibition. Those who engage in ``blast faxes'' can and 
should be prosecuted to the full extent of the law, as their behavior 
imposes unreasonable expenses upon residential and business facsimile 
subscribers.
  However, the FCC has long recognized an exception to this general ban 
on unsolicited faxes when the parties sending and receiving the fax 
have an established business relationship. Businesses of all shapes and 
sizes regularly conduct their transactions via facsimile, such as real 
estate agents, wholesalers and distributors, travel agents, and those 
in the convention industry. In our modern economy, companies that are 
often hundreds or thousands of miles away from each other do business 
together, often with the same or greater frequency as with those just 
up the street. And the reality of business is that sometimes you need 
to communicate in writing, and it needs to get there right away.
  The established business relationship exemption recognized this 
reality, and ensured that government was not placing an undue hardship 
on business owners. Yet inexplicably, on June 26, 2003 the FCC issued a 
new rule that eliminated the established business relationship. Under 
this new rule--which is set to take effect on January 1, 2005--the 
sender of a fax would have to acquire, in writing, the permission of 
the recipient to receive an unsolicited fax before the fax could be 
sent, even if the recipient made a verbal request that the information 
be faxed.
  As Chair of the Senate Small Business Committee, I can state that the 
business community has in unison called upon Congress to take action to 
rectify this situation. Industry groups estimate that it will cost 
businesses an average of $5,000 in the first year alone to comply with 
the new law, and as much as $3,000 each year thereafter in record-
keeping costs. These numbers do not take into account the potential 
lost business that could easily result if a primary method of business-
to-business communication is cut off. Quite simply, small businesses in 
particular will suffer significantly if these rules are allowed to take 
effect.
  My bill will restore the established business relationship exemption, 
allowing standard business transactions to continue without inhibition. 
The term ``Established business relationship'' means the same thing in 
the Junk Fax Prevention Act as in the regulations governing the Federal 
Do-Not-Call Registry: it means that the fax subscriber either made an 
inquiry of the sender within the prior three months or a purchase from 
the sender within the prior 18 months.
  The Junk Fax Prevention Act also strengthens the protections 
available to fax recipients by adding an opt-out provision that the 
current law does not have. Even if an established business relationship 
exists, a fax subscriber can still request to not receive unsolicited 
faxes. The senders of these faxes must, by law, honor these requests, 
and they must include a notification of this right on every fax they 
send.
  As a strong supporter of consumer rights, I also want to assure my 
colleagues that this bill does not in any way place consumers at risk. 
Very few consumers own fax machines, and those who do are protected by 
the general ban on solicitation and the opt-out provision if they do 
have an existing business relationship. To ensure that the privacy of 
consumers and businesses is protected, my bill also provides for 
studies by both the General Accounting Office and the FCC to evaluate 
the effectiveness of enforcement.
  Small businesses have weathered the storm of the economic downturn 
over the past several years. As our economy now climbs out of recession 
and people return back to work, American businesses--our nation's 
employers do not need these unnecessary economic restraints to further 
hinder their recovery. I call upon all of my colleagues to join me in 
bringing relief to American businesses and pass the Junk Fax Prevention 
Act.
  I ask unanimous consent that the text of the bill be printed in the 
Record.
  There being no objection, the bill was ordered to be printed in the 
Record, as follows:

                                S. 2569

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

     SECTION 1. SHORT TITLE.

       This Act may be cited as the ``Junk Fax Prevention Act of 
     2004''.

     SEC. 2. PROHIBITION ON FAX TRANSMISSIONS CONTAINING 
                   UNSOLICITED ADVERTISEMENTS.

       (a) Prohibition.--Subparagraph (C) of section 227(b)(1) of 
     the Communications Act of 1934 (47 U.S.C. 227(b)(1)(C)) is 
     amended to read as follows:
       ``(C) to use any telephone facsimile machine, computer, or 
     other device to send, to a telephone facsimile machine, an 
     unsolicited advertisement--
       ``(i) to a person who has made a request to such sender 
     that complies with the requirements under paragraph (2)(D), 
     not to send future unsolicited advertisements to a telephone 
     facsimile machine; or
       ``(ii) to a person not described in clause (i), unless--

       ``(I) the sender has an established business relationship 
     (which term, for purposes of this subclause, shall have the 
     meaning given the term in section 64.1200 of the Commission's 
     regulations, as in effect on January 1, 2003, except that 
     such term shall apply to a business subscriber in the same 
     manner in which it applies to a residential subscriber) with 
     such person; and
       ``(II) the unsolicited advertisement contains a conspicuous 
     notice on the first page of the unsolicited advertisement 
     that--

       ``(aa) states that the recipient may make a request to the 
     sender of the unsolicited advertisement not to send any 
     future unsolicited advertisements to such telephone facsimile 
     machine and that failure to comply, within the shortest 
     reasonable time, as determined by the Commission, with such a 
     request meeting the requirements under paragraph (2)(D) is 
     unlawful;
       ``(bb) sets forth the requirements for a request under 
     paragraph (2)(D); and
       ``(cc) includes a domestic contact telephone and facsimile 
     number for the recipient to transmit such a request to the 
     sender, neither of which may be a number for a pay-per-call 
     service (as such term is defined in section 228(i)); any 
     number supplied shall permit an individual or business to 
     make a do-not-fax request during regular business hours; 
     or''.
       (b) Request to Opt-Out of Future Unsolicited 
     Advertisements.--Paragraph (2) of section 227(b) of the 
     Communications Act of 1934 (47 U.S.C. 227(b)(2)) is amended--
       (1) in subparagraph (B), by striking ``and'' at the end;
       (2) in subparagraph (C), by striking the period at the end 
     and inserting a semicolon; and
       (3) by adding at the end the following new subparagraphs:
       ``(D) shall provide, by rule, that a request not to send 
     future unsolicited advertisements to a telephone facsimile 
     machine complies with the requirements under this 
     subparagraph only if--
       ``(i) the request identifies the telephone number of the 
     telephone facsimile machine to which the request relates;
       ``(ii) the request is made to the telephone or facsimile 
     number of the sender of such an unsolicited advertisement 
     provided pursuant to paragraph (1)(C)(ii)(II)(cc) or by any 
     other method of communication as determined by the 
     Commission; and
       ``(iii) the person making the request has not, subsequent 
     to such request, provided express invitation or permission to 
     the sender, in writing or otherwise, to send such 
     advertisements to such person at such telephone facsimile 
     machine; and
       ``(E) may, in the discretion of the Commission and subject 
     to such conditions as the Commission may prescribe, allow 
     professional trade associations that are tax-exempt nonprofit 
     organizations to send unsolicited advertisements to their 
     members in furtherance of the association's tax-exempt 
     purpose that do not contain the notice required by paragraph 
     (1)(C)(ii)(II), except that the Commission may take action 
     under this subparagraph only by regulation issued after 
     notice and opportunity for public comment

[[Page S7325]]

     in accordance with section 553 of title 5, United States 
     Code, and only if the Commission determines that such notice 
     is not necessary to protect the right of the members of such 
     trade associations to make a request to their trade 
     associations not to send any future unsolicited 
     advertisements.''.
       (c) Unsolicited Advertisement.--Paragraph (4) of section 
     227(a) of the Communications Act of 1934 (47 U.S.C. 
     227(a)(4)) is amended by inserting ``, in writing or 
     otherwise'' before the period at the end.
       (d) Regulations.--Not later than 270 days after the date of 
     the enactment of this Act, the Federal Communications 
     Commission shall issue regulations to implement the 
     amendments made by this section.

     SEC. 3. FCC ANNUAL REPORT REGARDING JUNK FAX ENFORCEMENT.

       Section 227 of the Communications Act of 1934 (47 U. S.C. 
     227) is amended by adding at the end the following new 
     subsection:
       ``(g) Junk Fax Enforcement Report.--The Commission shall 
     submit a report to the Congress for each year regarding the 
     enforcement of the provisions of this section relating to 
     sending of unsolicited advertisements to telephone facsimile 
     machines, which shall include the following information:
       ``(1) The number of complaints received by the Commission 
     during such year alleging that a consumer received an 
     unsolicited advertisement via telephone facsimile machine in 
     violation of the Commission's rules.
       ``(2) The number of such complaints received during the 
     year on which the Commission has taken action.
       ``(3) The number of such complaints that remain pending at 
     the end of the year.
       ``(4) The number of citations issued by the Commission 
     pursuant to section 503 during the year to enforce any law, 
     regulation, or policy relating to sending of unsolicited 
     advertisements to telephone facsimile machines.
       ``(5) The number of notices of apparent liability issued by 
     the Commission pursuant to section 503 during the year to 
     enforce any law, regulation, or policy relating to sending of 
     unsolicited advertisements to telephone facsimile machines.
       ``(6) For each such notice--
       ``(A) the amount of the proposed forfeiture penalty 
     involved;
       ``(B) the person to whom the notice was issued;
       ``(C) the length of time between the date on which the 
     complaint was filed and the date on which the notice was 
     issued; and
       ``(D) the status of the proceeding.
       ``(7) The number of final orders imposing forfeiture 
     penalties issued pursuant to section 503 during the year to 
     enforce any law, regulation, or policy relating to sending of 
     unsolicited advertisements to telephone facsimile machines.
       ``(8) For each such forfeiture order--
       ``(A) the amount of the penalty imposed by the order;
       ``(B) the person to whom the order was issued;
       ``(C) whether the forfeiture penalty has been paid; and
       ``(D) the amount paid.
       ``(9) For each case in which a person has failed to pay a 
     forfeiture penalty imposed by such a final order, whether the 
     Commission referred such matter to the Attorney General for 
     recovery of the penalty.
       ``(10) For each case in which the Commission referred such 
     an order to the Attorney General--
       ``(A) the number of days from the date the Commission 
     issued such order to the date of such referral;
       ``(B) whether the Attorney General has commenced an action 
     to recover the penalty, and if so, the number of days from 
     the date the Commission referred such order to the Attorney 
     General to the date of such commencement; and
       ``(C) whether the recovery action resulted in collection of 
     any amount, and if so, the amount collected.''.

     SEC. 4. GAO STUDY OF JUNK FAX ENFORCEMENT.

       (a) In General.--The Comptroller General of the United 
     States shall conduct a study regarding complaints received by 
     the Federal Communications Commission concerning unsolicited 
     advertisements sent to telephone facsimile machines, which 
     shall determine--
       (1) the number and nature of such complaints;
       (2) the number of such complaints that result in final 
     agency actions by the Commission;
       (3) the length of time taken by the Commission in 
     responding to such complaints;
       (4) the mechanisms established by the Commission to 
     receive, investigate, and respond to such complaints;
       (5) the level of enforcement success achieved by the 
     Commission and the Attorney General regarding such 
     complaints;
       (6) whether complainants to the Commission are adequately 
     informed by the Commission of the responses to their 
     complaints; and
       (7) whether additional enforcement measures are necessary 
     to protect consumers, including recommendations regarding 
     such additional enforcement measures.
       (b) Additional Enforcement Remedies.--In conducting the 
     analysis and making the recommendations required under 
     paragraph (7) of subsection (a), the Comptroller General 
     shall specifically examine--
       (1) the adequacy of existing statutory enforcement actions 
     available to the Commission;
       (2) the adequacy of existing statutory enforcement actions 
     and remedies available to consumers;
       (3) the impact of existing statutory enforcement remedies 
     on senders of facsimiles;
       (4) whether increasing the amount of financial penalties is 
     warranted to achieve greater deterrent effect; and
       (5) whether establishing penalties and enforcement actions 
     for repeat violators or abusive violations similar to those 
     established by section 4 of the CAN-SPAM Act of 2003 (15 
     U.S.C. 7703) would have a greater deterrent effect.
       (c) Report.--Not later than 270 days after the date of the 
     enactment of this Act, the Comptroller General shall submit a 
     report on the results of the study under this section to 
     Committee on Energy and Commerce of the House of 
     Representatives and the Committee on Commerce, Science, and 
     Transportation of the Senate.

                          ____________________