[Congressional Record Volume 152, Number 136 (Wednesday, December 27, 2006)]
[Extensions of Remarks]
[Pages E2244-E2253]
From the Congressional Record Online through the Government Publishing Office [www.gpo.gov]




                 TAX RELIEF AND HEALTH CARE ACT OF 2006

                                 ______
                                 

                               speech of

                         HON. WILLIAM M. THOMAS

                             of california

                    in the house of representatives

                        Friday, December 8, 2006

  Mr. THOMAS. Mr. Speaker, allow me to recite from explanatory material 
prepared for H.R. 6111, the Tax Relief and Health Care Act of 2006.

            DIVISION B--MEDICARE AND OTHER HEALTH PROVISIONS

     Section 1. Short title of division

     Current law
       No provision.
     Explanation of provision
       This division may be cited as the ``Medicare Improvements 
     and Expansion Act of 2006''.

        Title I--Medicare Improved Quality and Provider Payments

     Section 101. Physician payment and quality improvement

     Current law
       Medicare payments for services of physicians and certain 
     nonphysician practitioners are made on the basis of a fee 
     schedule. The fee schedule assigns relative values to 
     services that reflect physician work (i.e., the time, skill, 
     and intensity it takes to provide the service), practice 
     expenses, and malpractice costs. The relative values are 
     adjusted for geographic variations in costs. The adjusted 
     relative values are then converted into a dollar payment 
     amount by a conversion factor. The conversion factor for 2006 
     is $37.8975.
       The conversion factor is the same for all services. It is 
     updated each year according to a formula specified in law. 
     The intent of the formula is to place a restraint on overall 
     spending for physicians' services. Several factors enter into 
     the calculation of the formula. These include: (1) the 
     sustainable growth rate (SGR) which is essentially a 
     cumulative target for Medicare spending growth over time 
     (with 1996 serving as the base period); (2) the Medicare 
     economic index (MEI) which measures inflation in the inputs 
     needed to produce physicians services; and (3) the update 
     adjustment factor which modifies the update, which would 
     otherwise be allowed by the MEI, to bring spending in line

[[Page E2245]]

     with the SGR target. In no case can the adjustment factor be 
     less than minus seven percent or more than plus three 
     percent.
       The law specifies a formula for calculating the SGR. It is 
     based on changes in four factors: (1) estimated changes in 
     fees; (2) estimated change in the average number of Part B 
     enrollees (excluding Medicare Advantage beneficiaries); (3) 
     estimated projected growth in real gross domestic product 
     (GDP) growth per capita; and (4) estimated change in 
     expenditures due to changes in law or regulations. In order 
     to even out large fluctuations, MMA changed the GDP 
     calculation from an annual change to an annual average change 
     over the preceding 10 years (a ``10-year rolling average'').
       The SGR target is not a limit on expenditures. Rather, the 
     fee schedule update reflects the success or failure in 
     meeting the target. If expenditures exceed the target, the 
     update for a future year is reduced. This is what occurred 
     for 2002. It was also slated to in subsequent years; however, 
     legislation kept this from occurring. Most recently, the 
     Deficit Reduction Act froze the 2006 conversion factor at the 
     2005 level. A negative 5 percent update is slated to occur in 
     2007.
     Explanation of provision
       The conversion factor for 2007 would be the conversion 
     factor otherwise applicable for 2007 divided by the product 
     of: (i) 1 plus the Secretary's estimate of the percentage 
     increase in the MEI for 2007 (divided by 100), and (ii) 1 
     plus the Secretary's estimate of the update adjustment factor 
     for 2007. These changes would not be considered in the 
     computation of the conversion factor for 2008.
       The provision would also implement a voluntary quality 
     reporting system for Medicare payments for covered 
     professional services tied to the reporting of claims data. 
     Physicians and other eligible professionals (including 
     physician assistants, nurse practitioners, clinical nurse 
     specialists, certified registered nurse anesthetists, 
     certified nurse-midwives, clinical social workers, clinical 
     psychologists, registered dietitians or nutritional 
     professionals as defined under current law, physical 
     therapists, occupational therapists, and qualified speech-
     language pathologists) who report the quality information 
     would be eligible for a bonus incentive payment (BIP) for 
     services between July 1, 2007 to December 31, 2007. The 
     Secretary would also address a mechanism whereby an eligible 
     professional could provide data on quality measures through 
     an appropriate medical registry (such as the Society of 
     Thoracic Surgeons National Database) as identified by the 
     Secretary.
       For covered professional services furnished beginning July 
     1, 2007 and ending December 31, 2007, the quality reporting 
     measures are those identified as physician quality measures 
     under the CMS Physician Voluntary Reporting Program (PVRP) as 
     published on the CMS public website as of the date of 
     enactment of this provision. The Secretary may modify these 
     quality measures if changes are based on the results of a 
     consensus-based process meeting in January of 2007 and if 
     such changes are published on the CMS website by April 1, 
     2007. The Secretary may subsequently refine the quality 
     measures (without notice or opportunity for public comment) 
     up until July 1, 2007 by publishing modifications or 
     refinements to previously published quality measures but may 
     not change the quality measures.
       Eligible professionals who (1) furnish services for which 
     there are established quality measures as determined by this 
     provision and (2) satisfactorily submit quality measures 
     would be paid a single additional bonus payment amount equal 
     to 1.5% of the allowed charges for covered professional 
     services furnished during the reporting period. The bonus 
     incentive payments would be paid from the Supplemental 
     Medical Insurance Trust Fund (Part B). These bonus incentive 
     payments would not be taken into account in the calculations 
     and determination of payments for providers in health 
     professional shortage areas or Physician Scarcity Areas, nor 
     would these bonus payments be taken into account in computing 
     allowable charges under this subsection.
       The Secretary would presume that if an eligible 
     professional submits data for a measure, then the measure is 
     applicable to the professional. However, the Secretary may 
     validate (by sampling or other means as the Secretary 
     determines to be appropriate) to determine if an eligible 
     professional reports measures applicable to such professional 
     services. If the Secretary determines that an eligible 
     professional has not reported applicable measures, the 
     Secretary would not pay the bonus.
       Satisfactory reporting of data determines whether the 
     provider is eligible for the bonus payment. If there are no 
     more than 3 quality measures that are applicable to the 
     professional services furnished, the provider must report 
     each measure for at least 80 percent of the cases to meet the 
     criteria. If there are 4 or more quality measures that are 
     applicable, the provider must report at least 3 of the 
     quality measures for at least 80 percent of the cases.
       In specifying the form and manner for the submission of 
     data on quality measures under the physician quality 
     reporting system to be implemented under section 1848(k) of 
     the Social Security Act (as added by section 101(b) of the 
     legislation), the House intends that the Secretary of Health 
     and Human Services should recognize reporting of quality 
     measures under demonstrations including the Physician Group 
     Practice demonstration project (under section 1866A of the 
     Social Security Act) and the Medicare Care Management 
     Performance demonstration project (under section 649 of the 
     Medicare Prescription Drug, Improvement, and Modernization 
     Act) as permissible forms and manners of reporting under the 
     system.
       The provision also places a limit on bonus payments. No 
     provider would receive payments in excess of the product of 
     the total number of quality measures for which data are 
     submitted and three times the average per measure payment 
     amount. The average per measure payment amount would be 
     estimated by the Secretary and would equal (the total amount 
     of allowed charges under Medicare part B for all covered 
     professional services furnished during the reporting period 
     on claims for which quality measures are reported) divided by 
     (the total number of quality measure for which data are 
     reported during the reporting period under the physician 
     reporting system).
       The Secretary would provide for education and outreach to 
     eligible professionals regarding these changes. The Secretary 
     would implement these provisions acting through the 
     Administrator of the Centers for Medicare and Medicaid 
     Services (CMS).
       This provision would allow no administrative or judicial 
     review, under the existing Medicare appeals process or 
     through a Provider Reimbursement Review Board as currently 
     codified in statute, of the determination of measures, 
     satisfactory reporting, payment limitation, or bonus 
     incentive payment. A determination under the provisions of 
     this section would not be treated as a determination under 
     current appeals processes for Medicare.
       For 2008, the quality measures would change to a set of 
     measures adopted or endorsed by a consensus organization 
     (such as the National Quality Forum or the AQA, originally 
     known as the Ambulatory Care Quality Alliance) that may 
     include measures that have been submitted by a physician 
     specialty developed through a consensus-based process (such 
     as through the American Medical Association (AMA) convened 
     Physician Consortium for Performance Improvement) as 
     identified by the Secretary. Such measures shall include 
     structural measures, such as the use of electronic health 
     records and electronic prescribing.
       The CMS administrator would publish a proposed set of 
     quality measures for 2008 in the Federal Register no later 
     than August 15, 2007 with a public comment period. The final 
     set of measures appropriate for eligible professionals to use 
     to submit quality data in 2008 would be published no later 
     than November 15, 2007.
       The Secretary would be required to establish a Physician 
     Assistance and Quality Initiative (PAQI) Fund which would be 
     available to the Secretary for physician payment and quality 
     improvement initiatives. Such initiatives may include 
     application of an adjustment to the update to the conversion 
     factor. The amount available to the Fund would be $1.35 
     billion for 2008. The Secretary would be required to provide 
     for expenditures from the Fund for the obligation of the 
     entire amount (to the maximum extent feasible) for payment 
     for physicians services furnished in 2008. The specified 
     amount available to the Fund would be made to the Fund from 
     the Part B trust fund as expenditures are made from the Fund. 
     The amounts in the Fund are to be available in advance of 
     appropriations, but only if the total amount obligated to the 
     Fund does not exceed the amount available to it. The 
     Secretary may obligate funds from the Fund only if the 
     Secretary determines (and the CMS Chief actuary and the 
     appropriate budget officer certifies) that there are 
     sufficient amounts available in the Fund. If the expenditures 
     from the fund affect the conversion factor for a year, this 
     would not affect the computation of the conversion factor for 
     a subsequent year. Congress intends that CMS would continue 
     to develop quality measures for reporting for 2008. The 
     amounts in the fund are available at the Secretary's 
     discretion to make payments for physician services provided 
     in calendar year 2008 in a manner the Secretary sees fit, 
     including for quality purposes.
       The Secretary would be required to transfer $60 million 
     from the Part B trust fund to the CMS Program Management 
     Account for the period of FY 2007, FY 2008, and FY 2009 for 
     the purposes of implementing this section.
     Reason for change
       Physicians are scheduled to receive a negative 5 percent 
     update in 2007. The physician update should be addressed to 
     prevent access issues to physician services. In addition, the 
     update should include additional payment for quality 
     reporting in 2007. The House encourages all physicians to 
     participate in quality reporting and encourages CMS to 
     continue to develop measures in consultation with the 
     physician community and the existing structures available 
     through the National Quality Foundation and the AQA.
     Section 102. Extension of floor on Medicare work geographic 
         adjustment

     Current law
       Medicare's physician fee schedule assigns relative values 
     to services that reflect physician work (i.e., the time, 
     skill, and intensity it takes to provide the service), 
     practice expenses, and malpractice costs. The relative values 
     are adjusted for geographic variations in costs. The adjusted 
     relative values are then converted into a dollar payment 
     amount by a conversion factor.

[[Page E2246]]

       The geographic adjustment factors are indices that reflect 
     the relative cost difference in a given area in comparison to 
     a national average. An area with costs above the national 
     average would have an index greater than 1.00 while an area 
     with costs below the average would have an index below 1.00. 
     The physician work geographic adjustment factor is based on a 
     sample of median hourly earnings in six professional 
     specialty occupational categories. Unlike the other 
     geographic adjustments, the work adjustment factor reflects 
     only one-quarter of the cost differences in an area. The 
     practice expense adjustment factor is based on employee 
     wages, office rents, medical equipment and supplies. The 
     malpractice adjustment factor reflects differences in 
     malpractice insurance costs. The Secretary is required to 
     periodically review and adjust the geographic indices.
       MMA required the Secretary to increase the value of any 
     work geographic index that was below 1.00 to 1.00 for 
     services furnished on or after January 1, 2004 and before 
     January 1, 2007.
     Explanation of provision
       The requirement is extended for an additional year, for 
     services provided before January 1, 2008.
     Reason for change
       To provide a one-year extension to increase the value of 
     any work geographic index that was below 1.00 to 1.00 to 
     allow for higher adjustments under the work component in 
     certain areas.
     Section 103. Update of the composite rate component of the 
         basic case-mix adjusted prospective payment system for 
         dialysis services
     Current law
       The Medicare Prescription Drug, Improvement, and 
     Modernization Act of 2003 (MMA) required the Secretary to 
     establish a basic case-mix adjusted prospective payment 
     system for dialysis services furnished either at a facility 
     or in a patient's home, for services furnished beginning on 
     January 1, 2005. The basic case-mix adjusted system has two 
     components: (1) the composite rate, which covers services, 
     including dialysis; and (2) a drug add-on adjustment for the 
     difference between the payment amounts for separately 
     billable drugs and biologicals and their acquisition costs, 
     as determined by the Office of the Inspector General of the 
     Department of Health and Human Services.
       The Secretary is required to update the basic case-mix 
     adjusted payment amounts annually beginning with 2006, but 
     only for that portion of the case-mix adjusted system that is 
     represented by the add-on adjustment and not for the portion 
     represented by the composite rate. The DRA increased the 
     composite rate component of the basic case-mix adjusted 
     system for services beginning January 1, 2006 by 1.6 percent, 
     over the amount paid in 2005. For 2006, the base composite 
     rate is $130.40 for independent ESRD facilities and $134.53 
     for hospital-based ESRD facilities. The total drug add-on 
     adjustment, with inflation, is 14.5%.
     Explanation of provision
       The composite rate component of the basic case-mix adjusted 
     system shall be increased by 1.6 percent above the 2005 rate, 
     for services furnished on or after January 1, 2006 and before 
     April 1, 2007. For services furnished on or after April 1, 
     2007, the composite rate component of the basic case-mix 
     adjusted system shall be increased by 1.6 percent, above the 
     amount of such rate for services furnished on March 31, 2007.
       Not later than January 1, 2009, GAO shall submit a report 
     to The House on the costs for home hemodialysis treatment and 
     patient training for both home hemodialysis and peritoneal 
     dialysis. The report shall include recommendations for a 
     payment methodology that measures, and is based on, the cost 
     of providing such services and takes into account the case 
     mix of patients.
     Reason for change
       Unlike other facilities, dialysis facilities do not have an 
     inflation update for labor and capital costs. This provision 
     addresses that inequity. The National Institutes of Health 
     (NIH) is conducting a clinical trial on dialysis, partially 
     in the home settings. This report would develop 
     recommendations on how payments could incentivize the use of 
     home dialysis.
     Section 104. Extension of Treatment of certain physician 
         pathology services under Medicare
     Current law
       In general, independent laboratories cannot directly bill 
     for the technical component of pathology services provided to 
     Medicare beneficiaries that are inpatients or outpatients of 
     acute care hospitals. The Medicare, Medicaid, and SCHIP 
     Benefits Improvement and Protection Act of 2000 (BIPA) 
     permitted independent laboratories with existing arrangements 
     with acute care hospitals to bill Medicare separately for the 
     technical component of pathology services provided to 
     inpatients and outpatients. The arrangement between the 
     hospital and the independent laboratory had to be in effect 
     as of July 22, 1999. The direct payments for these services 
     applied to services furnished during 2001 and 2002. Despite 
     expiration of the BIPA moratorium after 2002, CMS directed 
     the carriers to continue the moratorium until they received 
     further instructions from CMS. MMA continued this policy for 
     2005 and 2006.
     Explanation of provision
       The provision is extended through 2007.
     Reason for change
       The provision expires on December 31, 2006 and independent 
     laboratories will no longer be able to directly bill Medicare 
     for the technical component for physician pathology services.
     Section 105. Extension of Medicare reasonable costs payments 
         for certain clinical diagnostic laboratory tests 
         furnished to hospital patients in certain rural areas
     Current law
       Generally, hospitals that provide clinical diagnostic 
     laboratory tests under Part B are reimbursed under a fee 
     schedule. MMA specified that hospitals with under 50 beds in 
     qualified rural areas (low density population rural areas) 
     would receive 100 percent reasonable cost reimbursement for 
     clinical diagnostic tests covered under Part B that are 
     provided as outpatient services. The provision applied to 
     services furnished during a cost-reporting period beginning 
     during the 2-year period starting July 1, 2004.
     Explanation of provision
       The provision is modified to apply to services furnished 
     during a cost-reporting period beginning during the 3-year 
     period starting July 1, 2004. The provision is effective as 
     if included in the enactment of MMA.
     Reason for change
       The MMA provision expired and this extends it for one more 
     cost reporting year.
     Section 106. Hospital Medicare reports and clarifications
       (a) Correction of Mid-Year Reclassification Expiration
     Current law
       Generally speaking, the Medicare Geographic Classification 
     Review Board's (MGCRB) classification decisions are required 
     to extend geographic reclassification for 3 years in the 
     inpatient prospective payment system (IPPS) and end on 
     September 30th each year.
     Explanation of provision
       This provision corrects the mid year expiration of certain 
     hospital geographic reclassifications.
     Reason for change
       The provision creates consistency in the end dates for 
     reclassification decisions for hospitals to be consistent 
     with the Federal Fiscal Year. It is the intent of the House 
     authors that group reclassifications made by the MGCRB that 
     begin April 1, 2007 would be unaffected by this provision, 
     with the exception of the continuing reclassifications of 
     hospitals whole individual reclassifications would have 
     lapsed prior to April 1 2007.
       (b) Revision of the Medicare Wage Index Classification 
           System
     Current law
       As directed by Medicare statute, the amount of a hospital's 
     operating and capital payments will vary according to the 
     relative level of hospital wages in its geographic area 
     compared to the national average. The geographic areas or 
     hospital labor markets that have been used by Medicare are 
     urban areas as established by the Office of Management and 
     Budget (OMB). Essentially, a hospital's payment will depend 
     upon whether it is in an urban area (and if so, which one) 
     and the wage data reported by the hospitals in that area. 
     Counties that are not in an urban area are grouped into one 
     statewide rural labor market. Also, with modifications, the 
     hospital wage data are used to adjust for geographic cost 
     differences in Medicare's payment systems for other services, 
     such as inpatient rehabilitation facility (IRF), long-term 
     care hospital (LTCH), home health agency (HHA), skilled 
     nursing facility (SNF), and hospice care. Unlike these 
     other providers, IPPS hospitals have an administrative 
     process, through appeals to the MGCRB (The Medicare 
     Geographic Classification Review Board), to reclassify to 
     different geographic areas. Other statutory provisions 
     affecting a hospital's geographic designation also have 
     been established.
     Explanation of provision
       The Medicare Payment Advisory Commission (MedPAC) would be 
     required to submit a report to The House no later than June 
     30, 2007 on the wage index classification system used in 
     Medicare's prospective payment systems, including IPPS. This 
     report would include recommendations for alternatives to the 
     current methods used to compute the wage index. $2 million in 
     funds from the Treasury would be appropriated to MedPAC for 
     FY2007 for these activities. The Secretary would be required 
     to include in the proposed rule making process for FY2009 one 
     or more proposals to revise the IPPS wage adjustment, after 
     taking into account MedPAC's recommendations. The proposals 
     would consider problems associated with labor market 
     definitions; modification or elimination of geographic 
     reclassifications and other adjustments; the use of Bureau of 
     Labor Statistics data to calculate relative wages; minimizing 
     variations in wage index adjustments between and within 
     metropolitan statistical areas and rural areas; the 
     feasibility of applying all components of the proposal to 
     other settings, including HHAs and SNFs; methods to minimize 
     the volatility of wage index adjustments while maintaining 
     the budget neutrality; the effect on health care providers 
     and on each region of the country; implementation of 
     proposal, including the transition methods; and occupational 
     mix issues such as staffing practices, effect on

[[Page E2247]]

     quality of care and alternative recommendations.
       (c) Elimination of unnecessary report
       Historically, under IPPS, hospitals in different geographic 
     areas have had their Medicare payments calculated using 
     different per discharge amounts. For example, at one point, 
     hospitals in large urban areas had been paid on the basis of 
     a larger per discharge amount than hospitals in smaller urban 
     areas or those in rural areas. This classification system had 
     changed over time. By FY1995, discharge amounts were 
     calculated for large urban hospitals and all other hospitals. 
     The implementation of the MMA permanently equalized the per 
     discharge payment rates for all hospitals except for those in 
     Puerto Rico.
       Starting in 1987, the Secretary has been required to submit 
     a report to The House that includes an initial estimate of 
     the percentage update (change factor) in the per discharge 
     payment amounts. The Secretary's estimate is required to take 
     into consideration the recommendations of Medicare's payment 
     commission and may vary for hospitals in different geographic 
     areas
     Explanation of provision
       This provision would eliminate the requirement that the 
     Secretary include recommendations with respect to the update 
     factors no later than March 1 before the beginning of the 
     fiscal year.
     Section 107. Extension of payment rule for brachytherapy

     Current law
       The Medicare Prescription Drug, Improvement and 
     Modernization Act of 2003 (MMA) established that 
     brachytherapy devices consisting of radioactive sources (or 
     seeds) would be paid on the basis of a hospital's cost for 
     such device (computed by reducing a hospital's charges to 
     costs) for services furnished starting January 1, 2004 until 
     January 1, 2007. The Secretary was directed to create 
     additional groups of covered Outpatient Department Services 
     (OPD) that classify such devices separately from other 
     services (or group of services) in a manner that reflects the 
     number, isotope, and radioactive intensity, including 
     separate groups for palladium-103 and iodine-125 devices. 
     Starting January 1, 2007, CMS will continue to pay separately 
     for brachytherapy sources, but will base payment on the 
     source-specific median costs. CMS has not created new 
     brachytherapy source codes to differentiate stranded from 
     nonstranded brachytherapy sources. The historical data used 
     to establish the source-specific median costs should reflect 
     utilization of stranded brachytherapy sources.
     Explanation of provision
       This provision would extend payment for brachytherapy 
     sources on the basis of a hospital's costs (adjusted from its 
     charges) established under MMA until January 1, 2008. The 
     provision would direct the Secretary to create additional 
     groups of covered OPD services in a manner that reflects the 
     number, isotope, and radioactive intensity, including 
     separate groups for palladium-103 and iodine-125 devices and 
     for stranded and nonstranded devices furnished on or after 
     July 1, 2007. These provisions may be implemented by program 
     instruction or otherwise.
     Reason for change
       This provision allows brachytherapy devices to continue to 
     be paid based on a hospital's cost, to allow CMS further time 
     to collect data in order to base payments on the source-
     specific median costs after one year, and requires CMS to 
     establish additional groups of services for stranded and non-
     stranded devices.
     Section 108. Payment process under the competitive 
         acquisition program (CAP)

     Current law
       MMA revised the way Medicare pays for Part B drugs. 
     Beginning in 2005, payments for these drugs are based on an 
     average sales price (ASP) payment methodology, which sets 
     payments at the weighted average ASP plus 6%; the Secretary 
     has the authority to reduce the ASP payment amount if the 
     widely available market price is significantly below the ASP. 
     Alternatively, beginning in 2006, drugs can be provided 
     through a newly established competitive acquisition program 
     (CAP). The intent of the program is to enable physicians to 
     acquire certain drugs from an approved CAP vendor thereby 
     enabling them to reduce the time they spend buying and 
     billing for drugs and finance risk.
     Explanation of provision
       The provision deletes the requirement that payments to CAP 
     contractors are conditioned upon the administration of the 
     drugs and biologicals. It specifies that payment may only be 
     made to the contractor upon receipt of a claim for a drug or 
     biological supplied by the contractor for administration to a 
     beneficiary. Further, the Secretary is required to establish 
     a post-payment review process to assure that payment is made 
     for a drug or biological only if it has been administered. 
     The process may be established by program instruction or 
     otherwise and may include the use of statistical sampling. 
     The Secretary is required to recoup, offset or collect any 
     overpayments determined by the Secretary.
       The section further clarifies that nothing in this 
     provision is to be construed as requiring any additional 
     competition by entities under the CAP program. Further the 
     provision is not to be construed as requiring any additional 
     process for elections by physicians under the program or 
     additional selection by a selecting physician of a CAP 
     contractor. The House, however, intends that the normal 
     competitive bidding process and physician election as 
     authorized by the MMA should continue as authorized by that 
     law. The provision applies to payments for drugs and 
     biologicals supplied on or after April 1, 2007. Additionally, 
     it applies, for claims that are unpaid as of April 1, 2007, 
     to drugs and biologicals supplied on or after July 1, 2006 
     and before April 1, 2007.
       In addition, the House would like to clarify an additional 
     issue regarding Medicare Part B drugs. The Social Security 
     Act (SSA) currently provides the Secretary of Health and 
     Human Services with the authority to revise the list of 
     compendia that are used to determine Medicare Part B coverage 
     of oncology drugs for off-label uses. Of the three compendia 
     currently listed in statute, one no longer is published and 
     another will soon be published under a different name. To 
     address this situation, requests for official recognition of 
     additional compendia have been made by the public. The 
     Medicare Coverage and Advisory Committee (MCAC) has reviewed 
     and voted on the desirable characteristics of new compendia; 
     however, the Centers for Medicare and Medicaid Services (CMS) 
     has not yet acted on the MCAC's review.
       A current list of compendia which contain the most current 
     clinical information about which drugs show the greatest 
     promise of treating various diseases is critical to ensure 
     that beneficiaries have access to the most appropriate 
     therapies. Correcting and expanding the list of compendia 
     organizations recognized by CMS for Medicare Part B 
     coverage purposes is a major step forward in accomplishing 
     that objective. While preserving the list of functioning 
     compendia currently covered by the SSA, the House directs 
     the Secretary to act as soon as possible to update the 
     list of three compendia, and report back to the House no 
     later than January 30, 2007.
       The House is also concerned by reports that some Medicare 
     beneficiaries have trouble accessing IVIG therapies from 
     providers. It is our hope that the Office of the Inspector 
     General (OIG) and the Office of the Assistant Secretary for 
     Planning and Evaluation (ASPE) studies focused on IVIG are 
     promptly completed. The House hopes the Secretary would 
     promptly review such studies, and report to the House 
     regarding the adequacy of supply and Medicare reimbursement 
     related to the cost of acquiring IVIG and the complexity of 
     IVIG infusions. The House strongly urges the Secretary to 
     continue the IVIG pre-administration fee until the Secretary 
     either assures the House that Medicare reimbursement is 
     adequate or a new payment methodology is implemented to 
     address concerns regarding access to IVIG.
     Reason for change
       To provide clarification in order to allow for a post-
     payment review process to ensure that payment is made for a 
     drug or biological only if the drug or biological is 
     delivered for administration to a beneficiary. The House 
     intends for CMS to implement this provision by not matching a 
     claim for drugs to a claim with drug administration prior to 
     being paid. The post payment review is intended to 
     sufficiently protect against inappropriate claims.
     Section 109. Quality reporting for hospital outpatient 
         services and ambulatory surgical center services
       (a) Outpatient Hospital Services
     Current law
       Each year the hospital outpatient department (OPD) fee 
     schedule is increased by a factor that is generally based on 
     the hospital market basket (MB) percentage increase. In 
     certain years, the MB has been reduced by percentage points 
     as specified by statute.
     Explanation of provision
       Starting in 2009 and for each subsequent year, a hospital 
     paid under the inpatient prospective payment system (IPPS) 
     that does not submit required measures will receive an OPD 
     fee schedule increase of the MB minus 2.0 percentage points. 
     A reduction under this provision would only apply to payments 
     for the year involved and would not be taken into account 
     when computing the OPD fee schedule increase in a subsequent 
     year.
       Each IPPS hospital is required to submit data on measures 
     under this section in the form, manner, and timing specified 
     by the Secretary. The Secretary would be required to develop 
     appropriate measures for the measurement of the quality of 
     care (including medication errors) furnished by hospitals in 
     outpatient settings and that reflect consensus among affected 
     parties. To the extent feasible and practicable, the measures 
     shall include those set forth by one or more national 
     consensus building entitles. Nothing would prevent the 
     Secretary from selecting all hospital quality measures or a 
     subset of such measures. The Secretary would be able to 
     replace any measures as appropriate, such as where all 
     hospitals are effectively in compliance or the measures have 
     subsequently been shown not to represent the best clinical 
     practice.
       The Secretary would be required to establish procedures for 
     making the submitted data available to the public. These 
     procedures would ensure that a hospital has the opportunity 
     to review data prior to being made available to the public. 
     The Secretary would be required to report quality measures of 
     process, structure, outcome, patients' perspective on care, 
     efficiency, and costs of care on the Internet website of the 
     Centers for

[[Page E2248]]

     Medicare and Medicaid Services. Other conforming amendments 
     would also be established.
     Reason for change
       The Provision promotes the development of quality measures 
     for outpatient medical services and services provided in 
     ASC's. The House intends the measures to be developed in 
     consultation with affected entities and quality 
     organizations.
       (b) Application to Ambulatory Surgical Centers
     Current law
       Presently, Medicare pays for surgery-related facility 
     services in an ambulatory surgical center (ASC) based on a 
     fee schedule. The Medicare Prescription Drug, Improvement, 
     and Modernization Act of 2006 (MMA) required the Secretary to 
     implement a revised payment system for ASCs no later than 
     January 1, 2008, taking into account recommendations issued 
     by a required report from the Government Accountability 
     Office (GAO). The GAO report, which has just been issued, was 
     required to examine the relative costs of ASC services to 
     those in hospital outpatient departments. GAO was also 
     required to recommend whether CMS should use the outpatient 
     prospective payment system as the basis for the revised ASC 
     system. Total payments under the new system should be equal 
     to total projected payments under the old system.
     Explanation of provision
       In the revised payment system, the Secretary would be able 
     to provide for a reduction in any annual update of 2.0 
     percentage points for failure to report required quality 
     measures. A reduction under this provision would only apply 
     to payments for the year involved and would not be taken into 
     account when computing any annual increase factor in 
     subsequent years. Except as otherwise provided by the 
     Secretary, the provisions of subparagraphs (B), (C), (D), 
     and (E) of the newly established Section l833(t)(17) 
     concerning the form and submission of data, the 
     development of outpatient measures, the replacement of 
     measures, and the availability of quality measures in a 
     hospital outpatient setting would apply to ASC services.
     Reason for change
       The Provision promotes the development of quality measures 
     for outpatient medical services and services provided in 
     ASC's. The House intends the measures to be developed in 
     consultation with affected entities and quality 
     organizations.
       (c) Effective date
     Current law
       No provision.
     Explanation of provision
       The amendments made by the section would apply to payment 
     for services furnished starting January 1, 2009.
     Section 110. Reporting of anemia quality indicators for 
         Medicare part B cancer anti-anemia drugs

     Current law
       Medicare Part B covers certain drugs used as anticancer 
     chemotherapeutic agents and certain oral anti-emetic drugs 
     used as part of an anticancer chemotherapeutic regimen. It 
     also covers epoetin alpha for patients with kidney disease; 
     the drug may also be used to counter anemia for cancer 
     patients.
     Explanation of provision
       The provision requires that all claims submitted for drugs 
     for treatment of anemia in connection with cancer must 
     include information on the hemoglobin or hematocrit levels 
     for the individual. The information is to be submitted in the 
     form and manner specified by the Secretary. The provision 
     applies to drugs furnished on or after January 1, 2008. The 
     Secretary is required to address the implementation of the 
     provision in the physician fee schedule regulations for 2008.
     Reason for change
       Since 1989, ESRD facilities have provided lab values on red 
     blood cell counts to CMS to ensure that anemia is addressed. 
     This requires physician offices and hospital outpatient 
     departments to provide the same information.
     Section 111. Clarification of hospice satellite designation

     Current law
       Section 1814(i)(2)(A) of the Social Security Act limits 
     total Medicare payment amounts to individual hospice 
     providers by an absolute dollar amount, or ``cap amount.'' 
     This amount is based on the number of Medicare patients the 
     agency serves and is calculated by dividing total payments to 
     a hospice per year by the total number of beneficiaries 
     served to get the per beneficiary payment amount. If the per 
     beneficiary payment amount does not exceed the cap amount, 
     the hospice may retain all payments. If the result exceeds 
     the cap amount, the hospice must repay excess funds to the 
     Medicare program. For purposes of calculating whether or not 
     a hospice exceeds the cap amount, increasing the number of 
     beneficiaries a hospice serves reduces the per beneficiary 
     payment amount. A lower per beneficiary payment amount 
     reduces the likelihood that a hospice will exceed the annual 
     hospice cap and be required to repay excess funds to the 
     Medicare program.
     Explanation of provision
       For purposes of calculating the hospice cap for 2004, 2005 
     and 2006 and for hospice care provided after November 1, 2003 
     and before December 27, 2005, this provision would designate 
     hospice with provider number 290-1511 as a multiple location 
     of hospice with provider number 29-1500.
     Reason for change
       To prevent application of the Hospice cap in this 
     circumstance.

               Title II--Medicare Beneficiary Protections

     Section 201. Extension of exceptions process for Medicare 
         therapy caps

     Current law
       The Balanced Budget Act of 1997 established annual per 
     beneficiary payment limits for all outpatient therapy 
     services provided by non-hospital providers. The limits 
     applied to services provided by independent therapists as 
     well as to those provided by comprehensive outpatient 
     rehabilitation facilities (CORFs) and other rehabilitation 
     agencies. The limits did not apply to outpatient services 
     provided by hospitals.
       Beginning in 1999, there were two beneficiary limits. The 
     first was a $1,500 per beneficiary annual cap for all 
     outpatient physical therapy services and speech language 
     pathology services. The second was a $1,500 per beneficiary 
     annual cap for all outpatient occupational therapy services. 
     Beginning in 2002, the amount would increase by the Medicare 
     economic index (MEI) rounded to the nearest multiple of $10.
       The Balanced Budget Refinement Act of 1999 (BBRA) suspended 
     application of the limits for 2000 and 2001. The Medicare, 
     Medicaid, and SCHIP Benefits Improvement and Protection Act 
     of 2000 (BIPA) extended the suspension through 2002. 
     Implementation of the provision was delayed until September 
     2003. The caps were implemented from September 1, 2003 
     through December 7, 2003. MMA reinstated the moratorium from 
     December 8, 2003 through December 31, 2005.
       The caps went into effect again beginning January 1, 2006. 
     The 2006 caps are each $1,740. However, DRA required the 
     Secretary to implement an exceptions process for expenses 
     incurred in 2006. Under the process, a Part B enrollee, or a 
     person acting on behalf of the enrollee, can request an 
     exception from the physical therapy and occupational therapy 
     caps. The individual may obtain such exception if the 
     provision of services is determined medically necessary. The 
     exceptions process only applies for 2006.
     Explanation of provision
       The provision extends the exceptions process through 2007.
       In addition, during consideration of the bill, the issue of 
     whether speech language pathologists should have a separate 
     provider number was raised in order to better report more 
     accurately on the bill's quality reporting program. The House 
     urges CMS to investigate this issue.
     Reason for change
       Provides a one-year extension of the exceptions process 
     established under the Deficit Reduction Act (DRA) to allow 
     patients to apply for additional therapy services if their 
     treatment is expected to exceed the annual cap. During 
     consideration of the bill, the issue of whether speech 
     language pathologists should have a separate provider number 
     was raised in order to better report more accurately on the 
     bill's quality reporting program. The House urges CMS to 
     investigate this issue in order to promote quality 
     initiatives.
     Section 202. Payment for administration of part D vaccines

     Current law
       Medicare Part B covers pneumoccoccal vaccine and its 
     administration, influenza vaccine and its administration, and 
     hepatitis B vaccine and its administration when furnished to 
     a high or intermediate risk individual. Medicare Part D 
     covers other vaccines licensed under the Public Health 
     Service Act.
     Explanation of provision
       The provision specifies that during 2007, the costs of 
     administering Part D vaccines will be paid under Part B, as 
     if it were the administration of a hepatitis B vaccine. 
     Beginning in 2008, Part D coverage will include the 
     administration costs.
     Reason for change
       CMS has chosen not to reimburse providers for administering 
     vaccines that are covered under the new Medicare prescription 
     drug benefit (Part D). If doctors and their staff are not 
     being paid to provide these vaccines, it will undoubtedly 
     create access problems to these important preventive 
     medicines. This provision ensures that providers will be paid 
     for their services through Part B funds in 2007 and through 
     Part D thereafter.
     Section 203. OIG study of never events

     Current law
       No provision.
     Explanation of provision
       The Office of the Inspector General (OIG) in the Department 
     of Health and Human Services would be required to conduct a 
     study on the incidence of never events for Medicare 
     beneficiaries, including types of such events and payments by 
     any party, including beneficiaries, of such events. This 
     study would also include the extent to which Medicare paid, 
     denied or recouped payment for such services as well as the 
     administrative process of the Centers for Medicare and 
     Medicaid Services (CMS) to identify such events and to deny 
     or recoup associated payments. The OIG would be required to 
     audit a representative sample of claims and medical

[[Page E2249]]

     records of the events; would be able to request access to 
     claims and records from any Medicare contractor; and would 
     not be able to release individually identifiable or facility 
     specific information. The OIG would be required to submit a 
     report to The House no later than two years from enactment. 
     This report would include recommendations for legislative or 
     administrative action on the processes to identify, deny or 
     recoup payments for never events, the potential process for 
     public disclosure of never events which ensure patient 
     privacy and permit the use of disclosed information for root 
     cause analysis. $3 million of funds in the Treasury will be 
     appropriated which will be available until January 1, 2010. 
     Never event are those that are listed and endorsed as 
     ``serious reportable events'' by the National Quality Forum 
     as of November 16, 2006.
     Reason for change
       This would provide useful information on serious adverse 
     medical events where a patient was harmed but the Medicare 
     program nevertheless reimbursed the facility where the 
     serious injury occurred.
     Section 204. Medicare medical home demonstration project

     Current law
       No provision.
     Explanation of provision
       The Secretary is required to establish a medical home 
     demonstration project in Medicare law for the purpose of 
     redesigning the healthcare delivery system to provide 
     targeted, accessible, continuous and coordinated, family-
     centered care to high-need populations (i.e., those with 
     multiple chronic illnesses that require regular monitoring, 
     advising, or treatment).
       Under the project, case management fees would be paid to 
     personal physicians, and incentive payments would be paid to 
     physicians participating in practices that provide ``medical 
     home'' services. Medical homes are physician practices in 
     charge of targeting beneficiaries for project participation. 
     They are responsible for: (1) providing safe and secure 
     technology to promote patient access to personal health 
     information; (2) developing a health assessment tool for the 
     targeted individuals; and (3) providing training for 
     personnel involved in the coordination of care.
       The project is to operate for three years in urban, rural, 
     and underserved areas in up to 8 states and would include 
     physician practices with fewer than three full-time 
     equivalent physicians, as well as larger practices, 
     particularly in rural and underserved areas.
       In addition to meeting Medicare requirements for 
     physicians, personal physicians who provide first contact and 
     continuous care for their patients must be board certified. 
     Personal physicians must also have staff and resources to 
     manage the comprehensive and coordinated health care of each 
     of their patients. Participating physicians may be 
     specialists or subspecialists for patients requiring ongoing 
     care for specific conditions, multiple chronic conditions, 
     (e.g., severe asthma, complex diabetes, cardiovascular 
     disease, and rheumatologic disorder) or for those with a 
     prolonged illness.
       Personal physicians must perform (or provide for the 
     performance of): (1) advocates for and provides ongoing 
     support, oversight, and guidance to implement a plan of care; 
     that provides an integrated, coherent, cross discipline plan 
     for ongoing medical care developed in partnership with 
     patients and including all other physicians furnishing care 
     to the patient involved and other appropriate medical 
     personnel or agencies (such as home health agencies); (2) 
     uses evidence-based medicine and clinical decision support 
     tools to guide decision-making at the point-of-care (based on 
     patient-specific factors); (3) uses health information 
     technology that may include remote monitoring and patient 
     registries; and (4) encourages patients to engage in 
     management of their own health through education and 
     support systems.
       Payments for care management to personal physicians are to 
     be provided under a care management fee under Section 1848 of 
     the Social Security Act. The Secretary would be required to 
     develop a care management fee code and a value for these 
     payments using the relative value scale update committee 
     (RUC) process.
       Payments for a medical home shall be based on the payment 
     methodology applied to physician group practices under 
     section 1866A of the Social Security Act. Under this 
     methodology, 80 percent of Medicare reductions (determined by 
     using assumptions with respect to the reductions in the 
     occurrence of health complications, hospitalization rates, 
     medical errors, and adverse drug reactions) resulting from 
     the medical home participation (as reduced by the total 
     project-related care management fees), would be paid to the 
     medical home. Project payments are to be paid from Part B.
       The Secretary would be required to provide a yearly project 
     evaluation and submit it to The House on a date specified by 
     the Secretary. In addition, the Secretary would be required 
     to submit to The House a project evaluation no later than one 
     year after project completion.
     Reason for change
       The proposal tests the effectiveness of the medical home 
     model to provide targeted and coordinated care to patients 
     suffering from one or more chronic conditions. A personal 
     physician and physician practice work together to manage 
     these patients.
     Section 205. Medicare DRA technical corrections
       (a) PACE clarification
     Current law
       The House appropriated $10 million for FY2006 for the 
     outlier funds for rural Program of All-Inclusive Care for the 
     Elderly (PACE) providers. Outlier costs are those inpatient 
     and other costs in excess of $50,000 incurred within a given 
     12-month period by a PACE provider for an eligible 
     participant who resides in a rural area. These appropriated 
     funds would remain available for expenditure through FY2010.
     Explanation of provision
       The provision clarifies that the appropriated $10 million 
     would be applied to fiscal years 2006 through 2010, rather 
     than only for FY2006. It also specifies that the funds would 
     remain available for obligation, rather than for 
     expenditure, through FY2010.
     Reason for change
       CMS has issued the start-up grants but cannot obligate the 
     outlier payments yet because CMS does not know to whom the 
     outlier payments will be distributed.
       (b) Miscellaneous technical corrections
       (1) Correction of Margin (Section 5001)
     Current law
       No provision.
     Explanation of provision
       Section 1886(b)(3)(B) of the Social Security Act (42 U.S.C. 
     1395ww(b)(3)(B)), as amended by section 5001(a) of the 
     Deficit Reduction Act of 2005 (Public Law 109-171), is 
     amended by moving clause (viii) (including subclauses (I) 
     through (VII) of such clause) 6 ems to the left.
       (2) Reference Correction (Section 5114)
     Current law
       P.L. 109-171 provision modified the first sentence of 
     Section 1842(b)( 6)(F) of the Social Security Act to add a 
     new paragraph H to 1842(b)(6) so that a federally qualified 
     health center (FQHC) would be paid directly for FQHC services 
     provided by a health care professional under contract with 
     that FQHC.
     Explanation of provision
       Instead of modifying Section 1842(b)(6)(F) to add paragraph 
     H, the amendment would modify Section 1842(b)(6) of the 
     Social Security Act.
       (c) Effective date
       These amendments would become effective as if they had been 
     included in DRA 2005, enacted on February 8, 2006.
     Section 206. Limited continuous open enrollment of original 
         Medicare fee-for-service enrollees into Medicare 
         Advantage non-prescription drug plans

     Current law
       Since the inception of Medicare Part C, beneficiaries had 
     been allowed to enroll into and/or disenroll from Medicare 
     Advantage (MA) plans on a monthly basis throughout the year. 
     Beneficiaries were able to change plans as often as they 
     wanted because The House had delayed (on three occasions) a 
     provision, that locked Medicare beneficiaries into their plan 
     choice after their enrollment period ended. However, since 
     The House has not further delayed its implementation, the 
     lock-in began to take affect on July 1, 2006.
     Explanation of provision
       This provision allows Medicare beneficiaries who are 
     enrolled in traditional fee-for-service but not enrolled in a 
     prescription drug plan to enroll in a Medicare Advantage plan 
     that does not offer drug coverage after their enrollment 
     period ended. These beneficiaries would be allowed to make 
     this change once during the year, after their enrollment 
     period had ended. This provision would sunset in two years.
     Reason for change
       This provision, allows qualified beneficiaries to enroll in 
     certain MA plans throughout the year.

             Title III--Medicare Program Integrity Efforts

     Section 301. Offsetting adjustment in Medicare Advantage 
         Stabilization Fund

     Current law
       The Medicare Prescription Drug, Improvement, and 
     Modernization Act (MMA) of 2003 established a stabilization 
     fund to provide incentives for plans to enter into and to 
     remain in the Medicare Advantage (MA) regional program. Money 
     in the fund is available to the Secretary for expenditures 
     from January 1, 2007 to December 31, 2013.
       Initially $10 billion is to be provided to the 
     stabilization fund and additional amounts are to be added to 
     the fund from a portion of any average per capita monthly 
     savings amounts. The Secretary is responsible for determining 
     the amounts that may be given to MA plans from this fund, 
     based on statutory requirements. For example, the national 
     bonus payment will be available to an MA organization that 
     offers an MA regional plan in every MA region in the year, 
     but only if there was no national plan in the previous year.
     Explanation of provision
       This provision would delay the initial availability of the 
     stabilization fund until January 1, 2012, and reduce the 
     amount of the fund to $3.5 billion.
     Reason for change
       The payment changes made by the MMA have strengthened the 
     MA program, thereby increasing enrollment in, and 
     availability of, MA plans. In 2003, just 54 percent of 
     seniors had access to an MA plan. Today, nearly 100

[[Page E2250]]

     percent of beneficiaries have access to at least two MA plans 
     and the average county provides seniors with a choice of 12 
     MA plans. Attracting plans to the MA program today is not an 
     issue. The stabilization fund has been rendered unnecessary 
     under the current payment system.
     Section 302. Extension and expansion of recovery audit 
         contractor program under the Medicare Integrity Program
       (a) Use of recovery audit contractors
     Current law
       The Medicare Prescription Drug, Improvement, and 
     Modernization Act of 2003 (P.L. 108-73) authorized a 3-year 
     demonstration project using recovery audit contractors to 
     identify both under and overpayments made to Part A & B 
     Medicare providers and recoup overpayments in the Medicare 
     program. The demonstration is being conducted as part of the 
     Medicare Integrity Program, created by Section 1893 of the 
     Social Security Act, which enables the Secretary to enter 
     into contracts with entities to carry out a range of 
     activities designed to prevent health care fraud and abuse in 
     Parts A & B of the Medicare program. The Medicare Integrity 
     Program was established by the Health Insurance Portability 
     and Accountability Act of 1996 along with the Health Care 
     Fraud and Abuse Control Program. The program is financed via 
     the Federal Hospital Insurance Trust Fund.
     Explanation of provision
       Section 302 would allow the Centers for Medicare and 
     Medicaid Services (CMS) to continue using recovery audit 
     contractors to identify both under and overpayments made 
     under Medicare Parts A & B and recoup any overpayments made 
     to providers. To pay the contractors, the Secretary would be 
     required to use only those funds recovered by the 
     contractors. From these recoveries, the bill would require 
     the Secretary to pay the contractors in two ways: (1) on a 
     contingent basis for collecting overpayments; and (2) in 
     amounts that the Secretary may specify for identifying 
     underpayments. A portion of the recovered funds to the CMS 
     program management account would be available for activities 
     conducted under the recovery audit contractor program. Any 
     remaining recovered amounts--those recoveries that are not 
     paid to the contractors or applied to the CMS program 
     management account--would be used to reduce expenditures 
     under Medicare Parts A & B. Each contract would be required 
     to provide that audit and recovery activities be conducted 
     during the fiscal year and retrospectively for not more than 
     4 fiscal years. The Secretary would be allowed to waive 
     Medicare statutory provisions to pay for the services of the 
     recovery audit contractors.
       By January 1, 2010, the Secretary would be required to 
     contract with enough recovery audit contractors to cover 
     Medicare activities in all states. When awarding contracts, 
     the Secretary would be required to contract only with 
     recovery audit contractors that have the staff with the 
     appropriate clinical knowledge of and experience with 
     Medicare payment rules and regulations, or recovery audit 
     contractors that will contract with another entity that has 
     the staff with the appropriate knowledge of and experience 
     with Medicare payment rules and regulations. The Secretary 
     shall give preference to entities with more than three years 
     direct management experience and a demonstrated proficiency 
     in audits with private insurers, health care providers, 
     health plans, or state Medicaid programs. Recovery audit 
     contractors cannot be fiscal intermediaries, carriers, or 
     Medicare Administrative Contractors, and the recovery of 
     overpayments by these contractors would not prohibit the 
     Secretary or the Attorney General from prosecuting 
     allegations of fraud and abuse arising from these 
     overpayments.
       Finally, the Secretary would be required to submit a report 
     to The House annually on the use of these recovery audit 
     contractors. Specifically the report would include 
     information on the performance of these contractors as it 
     relates to identifying over and underpayments and in 
     collecting overpayments. The report would also be required to 
     include an evaluation of the comparative performance of these 
     contractors and any Medicare savings that have accrued as a 
     result of their activities.
       (b) Access to Coordination of Benefits Contractor Database
     Current law
       The Coordination of Benefits (COB) Contractor consolidates 
     the activities that support the collection, management, and 
     reporting of other insurance coverage for Medicare 
     beneficiaries. The purposes of the COB program are to 
     identify the health benefits available to a Medicare 
     beneficiary and to coordinate the payment process to prevent 
     mistaken payment of Medicare benefits.
     Explanation of provision
       For the purpose of carrying out their audit and recovery 
     activities, the Secretary of HHS would provide recovery audit 
     contractors with access to the database of the Coordination 
     of Benefits Contractors of the Centers for Medicare and 
     Medicaid Services during the current fiscal year and for a 
     period of up to 4 fiscal years prior to the current fiscal 
     year.
       (c) Conforming Amendments to Current Demonstration Project
     Current law
       Section 306 of the Medicare Prescription Drug, Improvement, 
     and Modernization Act of 2003 requires that the Secretary's 
     demonstration project using recovery audit contractors last 
     for no longer than three years. After the completion of the 
     program, the Secretary shall submit to The House a report on 
     the project and its impact on savings to the Medicare 
     program.
     Explanation of provision
       The provision would continue the use of recovery audit 
     contractors until all contracts could be entered into. The 
     provision would also eliminate the requirement that the 
     Secretary submit to The House a report not later than 6 
     months after the project's completion on the impact of 
     recovery audit contractors' activities on Medicare savings.
     Reason for change
       Recovery audit contractors provide a valuable service in 
     identifying and recovering improper payments in the Medicare 
     program. The services provided by these auditors are highly 
     skilled and specialized, and were never utilized by the 
     Medicare program prior to the current demonstration. The 
     results of the demonstration document that significant 
     amounts of funds have been returned to Medicare, and are 
     expected to be returned to the program in the future. In 
     fact, the Congressional Budget Office expects that this 
     program would reduce net Medicare spending--that is, 
     recoveries of overpayments would exceed the payments to 
     contractors, program management costs, and outlays to correct 
     underpayments. Based on the results of the demonstration, 
     extension and national expansion of the recovery audit 
     program will result in the return of substantial funds to 
     Medicare in an efficient and cost effective manner.
     Section 303. Funding for the Health Care Fraud and Abuse 
         Control Account
       (a) Departments of Health and Human Services and Justice
     Current law
       The Health Insurance Portability and Accountability Act of 
     1996 (HIPAA, P.L. 104-91) established section 1128C of the 
     Social Security Act, which authorized the creation of a 
     national health care fraud and abuse control program headed 
     by the Secretary of HHS and the Attorney General. In Section 
     1817(k) of the Social Security Act, HIPAA created an 
     expenditure account within the Medicare Federal Hospital 
     Insurance Trust Fund called the Health Care Fraud and Abuse 
     Control (HCFAC) Account. Within the HFCFAC account, the 
     legislation appropriated funds to HHS and DOJ at an amount of 
     $104 million in FY97 and for FY98 through FY03 at annual 
     increases of 15 percent above the preceding year. For each 
     fiscal year after 2003, the annual appropriation available to 
     HHS and DOJ was to be capped at the FY 2003 level of $240.6 
     million. The legislation also established a separate funding 
     stream within the HCFAC account to support activities 
     undertaken by the FBI. Funding for the FBI was increased from 
     $47 million in FY97 to $114 million in FY03. The 
     legislation capped FBI funding at the FY03 level for FY03 
     and beyond.
     Explanation of provision
       Section 303 would extend appropriations for the Health Care 
     Fraud and Abuse Control Program through FY06 and beyond. For 
     FY98 through FY03, the annual appropriation to HHS and DOJ is 
     the limit for the preceding fiscal year increased by 15 
     percent. This bill would extend the annual appropriation for 
     FY04 through FY06 to the FY03 level. For fiscal years 2007 
     through 2010, the annual appropriation would be the limit for 
     the preceding year plus the percentage increase in the 
     consumer price index for all urban consumers. For each fiscal 
     year beyond 2010, the legislation would cap the appropriation 
     at the FY10 level.
       For the Office of the Inspector General of HHS, Section 303 
     would extend the annual appropriation of $160 million through 
     FY06. For FY07, the bill would increase the FY06 
     appropriation to OIG by the percentage increase in the 
     consumer price index. For fiscal years 2008, 2009, and 2010, 
     the annual appropriation would increase by the limit for the 
     preceding year plus the percentage increase in the consumer 
     price index for all urban consumers. For each fiscal year 
     after FY10, the legislation would cap the appropriation at 
     the FY10 level.
     Reason for change
       Funding levels are capped under law, and increased funding 
     will be provided to continue activities covered by the HCFAC 
     Account to help combat waste, fraud and abuse.
       (b) Federal Bureau of Investigations
     Current law
       The Health Insurance Portability and Accountability Act of 
     1996 (HIPAA, P.L. 104-91) established section 1128C of the 
     Social Security Act, which authorized the creation of a 
     national health care fraud and abuse control program headed 
     by the Secretary of HHS and the Attorney General. In Section 
     1817(k) of the Social Security Act, HIPAA created an 
     expenditure account within the Medicare Federal Hospital 
     Insurance Trust Fund called the Health Care Fraud and Abuse 
     Control (HCFAC) Account. Within the HFCFAC account, the 
     legislation appropriated funds to HHS and DOJ at an amount of 
     $104 million in FY97 and for FY98 through FY03 at annual 
     increases of 15 percent above the preceding year. For each 
     fiscal year after 2003, the annual appropriation available to 
     HHS and

[[Page E2251]]

     DOJ was to be capped at the FY 2003 level of $240.6 million. 
     The legislation also established a separate funding stream 
     within the HCFAC account to support activities undertaken by 
     the FBI. Funding for the FBI was increased from $47 million 
     in FY97 to $114 million in FY03. The legislation capped 
     FBI funding at the FY03 level for FY03 and beyond.
     Explanation of provision
       Section 303 would extend the annual appropriation to the 
     Federal Bureau of Investigations (FBI). For fiscal years 2003 
     through 2006, the annual appropriation to the FBI for fraud 
     and abuse activities would be capped at the FY02 level of 
     $114 million. For fiscal years 2007 through 2010, the annual 
     appropriation would be the limit for the preceding year plus 
     the percentage increase in the consumer price index for all 
     urban consumers. For each fiscal year after 2010, the 
     legislation would cap the appropriation at the FY2010 level.
     Reason for change
       Funding levels are capped under law, and increased funding 
     will be provided to continue activities covered by the HCFAC 
     Account.
     Section 304. Implementation funding
     Current law
       No current law.
     Explanation of provision
       For implementation of provisions and amendments made by 
     this title and titles I and II of this division, other than 
     the section requiring the Inspector General in the Department 
     of Health and Human Services to conduct a study of never 
     events, the provision would require the Secretary of Health 
     and Human Services to transfer $45,000,000 to the CMS Program 
     Management Account for FY2007 and FY2008, from the Federal 
     Hospital Insurance Trust Fund, and the Federal Supplementary 
     Medical Insurance Trust, in appropriate proportions.

             Title IV--Medicaid and Other Health Provisions

     Section 401. Extension of Transitional Medical Assistance 
         (TMA) and Abstinence Education Program

     Current law
       States are required to continue Medicaid benefits for 
     certain low-income families who would otherwise lose coverage 
     because of changes in their income. This continuation is 
     known as transitional medical assistance (TMA). Federal law 
     permanently requires four months of TMA for families who lose 
     Medicaid eligibility due to increased child or spousal 
     support collections, as well as those who lose eligibility 
     due to an increase in earned income or hours of 
     employment. The House expanded work-related TMA under 
     Section 1925 of the Social Security Act in 1988, requiring 
     states to provide TMA to families who lose Medicaid for 
     work-related reasons for at least six, and up to 12, 
     months. The sunset date for Section 1925 has been extended 
     a number of times, most recently through December 31, 2006 
     by the Deficit Reduction Act of 2005.
       Under Section 510 of the Social Security Act, federal law 
     appropriated $50 million annually for each of the fiscal 
     years 1998-2003 for matching grants to states to provide 
     abstinence education and, at state option, mentoring, 
     counseling, and adult supervision to promote abstinence from 
     sexual activity, with a focus on groups that are most likely 
     to bear children out-of-wedlock. Funds must be requested by 
     states when they apply for Maternal and Child Health Services 
     (MCH) Block Grant funds and must be used exclusively for the 
     teaching of abstinence. States must match every $4 in federal 
     funds with $3 in state funds.
       A state's allotment of abstinence education block grant 
     program funding is based on the proportion of low-income 
     children in the state as compared to the national total. 
     Funding for the abstinence education block grant has been 
     extended a number of times, most recently through December 
     31, 2006 by the Deficit Reduction Act of 2005.
     Explanation of provision
       The provision would extend TMA under Section 1925 of the 
     Social Security Act through June 30, 2007. It would also fund 
     the abstinence education block grant program through June 30, 
     2007 at the level provided through the third quarter of 
     FY2006.
     Section 402. Grants for research on vaccine against Valley 
         Fever

     Current law
       Under existing National Institutes of Health (NIH) 
     authority, the National Institute on Allergy and Infectious 
     Diseases has supported projects to study coccidioidomycosis, 
     known as Valley Fever. Grants have included projects to study 
     the organism that causes Valley Fever; to improve the ability 
     to evaluate vaccine candidates; to support the clinical 
     development of potential drug therapies; and to support 
     acquisition of equipment and facilities for research on the 
     disease, among others.
     Explanation of provision
       The Secretary is required to conduct research on the 
     development of a vaccine against coccidioidomycosis, known as 
     Valley Fever. Grants may not be made on or after October 1, 
     2012. This does not have any legal effect on payments for 
     grants for which amounts appropriated under this section were 
     obligated prior to October 1, 2012.
       To carry out this section, $40 million is authorized for 
     fiscal years 2007-2012.
     Section 403. Change in Threshold for Medicaid Indirect Hold 
         Harmless Provision of Broad-Based Health Care Taxes

     Current law
       Under federal law and regulations, a state's ability to use 
     provider-specific taxes to fund their state share of Medicaid 
     expenditures is limited. If states establish provider-
     specific taxes, those taxes cannot generally exceed 25 
     percent of the state (or non-federal) share of Medicaid 
     expenditures and the state cannot provide a guarantee to the 
     providers that the taxes will be returned to them. However, 
     there is what is referred to as a ``safe harbor.'' If the 
     taxes returned to a provider are less than 6 percent of the 
     provider's revenues, the prohibition on guaranteeing the 
     return of tax funds is not violated. Those taxes do not have 
     to undergo the process, defined in section 433.68 of Title 42 
     of the Code of Federal Regulations, of determining if a 
     guarantee exists. As a result, a state could impose a 
     provider tax of 6 percent of revenues, return those revenues 
     right back to those providers in the form of a Medicaid 
     ``payment'' and receive a federal match for those amounts. In 
     effect, the state has temporarily borrowed funds from the 
     provider to receive additional federal funds. The President's 
     FY2006 budget proposes to phase the 6 percent ``safe harbor'' 
     for provider taxes down to 3 percent although no new 
     regulation has been issued on this subject to date.
     Explanation of provision
       For the fiscal periods beginning on or after January 1, 
     2008 and ending before October 1, 2011, the ``safe harbor'' 
     percentage would be reduced from 6 percent to 5.5 percent.
     Section 404. DSH allotments for fiscal year 2007 for 
         Tennessee and Hawaii
       (A) Tennessee
     Current law
       Tennessee operates its Medicaid program under a 
     comprehensive statewide waiver, the terms and conditions of 
     which have been negotiated by the state and CMS. Medicaid 
     demonstration waivers, authorized under Section 1115 of the 
     Social Security Act, allow states a great deal of flexibility 
     on how eligibility for Medicaid is determined, how Medicaid 
     services are provided, and what those services are comprised 
     of. States operating under a waiver are subject to a budget 
     neutrality requirement intended to hold program spending 
     under the waiver to estimates of amounts that would have been 
     spent in the absence of the waiver. Because Tennessee 
     receives its Medicaid funds under the provisions of the 
     waiver, it does not receive federal matching for Medicaid 
     payments to disproportionate share (DSH) hospitals nor do 
     they receive an allotment for DSH payments (state by state 
     allotments are calculated based on a formula in Medicaid law 
     and represent a federal cap on the amount that the federal 
     government will provide in DSH matching payments to any 
     state.) DSH payments, however, continue to be counted as a 
     component in Tennessee's budget neutrality calculation 
     since, in the period prior to the waiver approval, the 
     state was required to make DSH payments, and if the waiver 
     had not been granted, the requirement to make those 
     payments would continue to have applied.
     Explanation of provision
       The provision would establish a DSH allotment for the state 
     of Tennessee for fiscal year 2007 equal to the greater of the 
     amount that is reflected in the budget neutrality provision 
     for the TennCare demonstration year ending in 2006 and $280 
     million. Federal matching payments to the state for DSH 
     hospitals for fiscal year 2007 would, however, be limited to 
     one-third of the DSH allotment. Those amounts would be 
     considered TennCare project expenditures and would be 
     subtracted from TennCare demonstration payments for Essential 
     Access Hospital supplemental pool payments. The sum of the 
     DSH payments and the Essential Access Hospital supplemental 
     pool payments would be prohibited from exceeding the 
     allotment amount. The state would be permitted to submit a 
     state plan amendment describing the methodology to be used to 
     identify DSH hospitals and to make payments to such 
     hospitals.
       (B) Hawaii
     Current law
       Like Tennessee, Hawaii operates its Medicaid program under 
     a statewide waiver, the terms and conditions of which have 
     been negotiated by the state and CMS. The state does not make 
     DSH payment under their waiver program and does not have a 
     DSH allotment in Medicaid law.
     Explanation of provision
       The provision would set a DSH allotment for Hawaii for 
     fiscal year 2007 at $10 million. The Secretary shall permit 
     Hawaii to submit an amendment to its State plan under this 
     title that describes the methodology to be used by the State 
     to identify and make payments to disproportionate share 
     hospitals, including children's hospitals and institutions 
     for mental diseases or other mental health facilities. The 
     Secretary may not approve such plan amendment unless the 
     methodology described in the amendment is consistent with the 
     requirements under this section for making payment 
     adjustments to disproportionate share hospitals.

[[Page E2252]]

     Section 405. Certain Medicaid DRA technical corrections
       (a) Technical corrections relating to State option for 
           alternative premiums and cost sharing (Sections 6041 
           through 6043)
     Current law
       P.L. 109-171 allows states to impose premiums and cost-
     sharing for any group of individuals for any type of service 
     (except prescribed drugs which are treated separately), 
     through Medicaid state plan amendments (rather than waivers), 
     subject to specific restrictions. Preferred drugs are defined 
     as those that are the least (or less) costly effective 
     prescription drugs within a class of drugs (as defined by the 
     state). Premium and cost-sharing rules for workers with 
     disabilities were not changed in P.L. 109-171.
       Individuals in families with income below 100% of the 
     federal poverty line (FPL). Premiums and service-related 
     cost-sharing imposed under this option are allowed to vary 
     among classes or groups of individuals, or types of service. 
     Explicit rules are provided by income level for those with 
     income between 100-150% FPL and for those with income over 
     150% FPL.
       States are allowed to condition the provision of medical 
     assistance on the payment of premiums, and to terminate 
     Medicaid eligibility on the basis of failure to pay a premium 
     if that failure continues for at least 60 days. States may 
     apply this provision to some or all groups of beneficiaries, 
     and may waive premium payments in cases where such payments 
     would be an undue hardship. In addition, the provision allows 
     states to permit providers participating in Medicaid to 
     require a Medicaid beneficiary to pay authorized cost-sharing 
     as a condition of receiving care or services. Providers may 
     be allowed to reduce or waive cost-sharing amounts on a case-
     by-case basis.
       For the purposes of cost-sharing, two income-related groups 
     are identified: (1) individuals in families with income 
     between 100 and 150% FPL, and (2) individuals in families 
     with income over 150% FPL. For both groups, the total 
     aggregate amount of all cost-sharing (including special cost-
     sharing rules for prescribed drugs and emergency room 
     copayments for non-emergency care) cannot exceed 5% of family 
     income as applied on a quarterly or monthly basis as 
     specified by the state.
       Treatment of non-preferred drug cost-sharing. Special cost-
     sharing for prescribed drugs is subject to the general 5% 
     aggregate cap on cost-sharing for individuals with income 
     between 100-150% FPL and for individuals with income over 
     150% FPL who are not otherwise exempt from service-related 
     cost-sharing.
       Treatment of non-emergency cost-sharing. Individuals exempt 
     from premiums or service-related cost-sharing under other 
     provisions of P.L. 109-171 may be subject to nominal 
     copayments for non-emergency services in an ER, only when no 
     cost-sharing is imposed for care in hospital outpatient 
     departments or by other alternative providers in the area 
     served by the hospital ER. For non-exempt populations with 
     income between 100-150% FPL, cost-sharing for non-emergency 
     services in an ER cannot exceed twice the nominal amounts. 
     For non-exempt populations with income exceeding 150% FPL, no 
     cost-sharing limit is specified for non-emergency care in an 
     ER. Aggregate caps on cost-sharing (described above) still 
     apply.
       Definition of non-emergency services. The term ``non-
     emergency services'' means any care or services furnished in 
     an emergency department of a hospital that the physician 
     determines do not constitute an appropriate medical screening 
     examination or stabilizing examination and treatment required 
     to be provided by the hospital under Medicare law (Section 
     1867 of the Social Security Act).
       Exemption from cost-sharing for newly eligible children 
     with disabilities. Section 6062 of P.L. 109-171 created a new 
     optional Medicaid eligibility group for children with 
     disabilities under age 19 who meet the severity of disability 
     required under the Supplemental Security Income program (SSI) 
     without regard to any income or asset eligibility 
     requirements applicable under SSI for children, and whose 
     family income does not exceed 300% FPL. (States can exceed 
     300% FPL, without federal matching funds for such coverage.) 
     Special premium and cost-sharing rules apply to this new 
     group of eligibles.
     Explanation of provision
       The definition of preferred drugs would be amended to 
     include those that are the most (or more) cost effective 
     prescription drugs within a class of drugs (as defined by the 
     state). In addition to separate cost-sharing provisions for 
     prescribed drugs, the amendment would clarify that separate 
     cost-sharing provisions also apply to nonemergency services 
     provided in an emergency room.
       Individuals in families with income below 100% of the 
     federal poverty line (FPL). The amendment would exempt from 
     the general cost-sharing rules in new Section 1916A (a) all 
     individuals in families with income below 100% of the federal 
     poverty line (FPL). However, Section 1916 of Title XIX 
     (nominal cost-sharing provisions) would still apply to this 
     income group, as would the comparability rule regarding 
     amount, duration and scope of available benefits (Section 
     1902(a)(10)(B)). States would still have the option to impose 
     the special cost-sharing rules for prescribed drugs and non-
     emergency care provided in an emergency room to individuals 
     in families with income below 100% FPL.
       The amendment would exempt individuals in families with 
     income below 100% FPL from the provisions defining 
     enforceability of premiums and other cost-sharing. 
     Protections regarding payment of premiums and cost-sharing in 
     Section 1916(c)(3) and Section 1916(e) would continue to 
     apply to this income group.
       The amendment would apply the total aggregate cap of 5% of 
     family income to individuals in families with income below 
     100% FPL for applicable cost-sharing with respect to nominal 
     amounts (as defined in Section 1916), and prescribed drugs 
     and emergency room copayments for non-emergency care (as 
     defined in new Sections 1916A(c) and 1916A(e)).
       Treatment of non-preferred drug cost-sharing. The amendment 
     would clarify that no cost-sharing for preferred drugs can be 
     imposed on individuals exempt from service-related cost-
     sharing under the general cost-sharing provisions 
     (identified in new Section 1916A(a)). It would also 
     clarify that no more than nominal cost-sharing amounts may 
     be imposed for non-preferred drugs on individuals exempt 
     from services-related cost-sharing under the general cost-
     sharing provisions.
       Treatment of non-emergency cost-sharing. The amendment 
     would clarify that for non-exempt persons with income between 
     100-150 percent FPL, cost-sharing for nonemergency care in an 
     ER may not exceed twice the applicable nominal amount (up to 
     the 5 percent aggregate cap). For persons with income below 
     100 percent FPL or who are exempt from service-related cost-
     sharing, cost-sharing for non-emergency care in an ER may not 
     exceed the applicable nominal amount when no cost-sharing is 
     imposed by the outpatient department or alternative 
     providers. The 5 percent aggregate cap on all service-related 
     costsharing for all income groups remains in effect.
       Definition of non-emergency services. The amendment would 
     strike the phrase ``the physician determines'' from the 
     definition of non-emergency services as provided in P.L. 109-
     171.
       Exemption from cost-sharing for newly eligible children 
     with disabilities. The amendment would exempt this new 
     optional eligibility group for children with disabilities 
     established under P.L. 109-171 from the premium and service-
     related costsharing rules under new Section 1916A.
       Correction of IV-B References. Among the groups explicitly 
     exempted from the general cost-sharing provisions for 
     premiums and cost-sharing, the amendment would change 
     references to Title IV-B to mean child welfare services made 
     available under Title IV-B on the basis of being a child in 
     foster care.
       Effective Date. The amendment specifies that all changes 
     made by this amendment are effective as if included in the 
     affected sections and subsections of P.L. 109-171.
       (b) Clarifying Treatment of Certain Annuities (Section 
           6012)
     Current law
       Under Section 6012(b) of P.L. 109-171, the purchase of an 
     annuity is treated as a disposal of an asset for less than 
     fair market value unless certain criteria are met. One of 
     these criteria is that the state be named as the remainder 
     beneficiary in the first position for at least the total 
     amount of Medicaid expenditures paid on behalf of the 
     annuitant or be named in the second position after the 
     community spouse or minor or disabled child and such spouse 
     or a representative of such child does not dispose of any 
     such remainder for less than fair market value.
     Explanation of provision
       The provision would strike the term ``annuitant'' and 
     replace it with ``institutionalized individual.'' This change 
     would become effective as if it had been included in DRA 
     2005, enacted on February 8, 2006.
       (c) Additional Miscellaneous Technical Corrections
       (1) Documentation (Section 6036)
     Current law
       Under Section 6036 of P.L. 109-171, states are prohibited 
     from receiving federal Medicaid reimbursement for an 
     individual who has not provided satisfactory documentary 
     evidence of citizenship or nationality. Documents that 
     provide satisfactory evidence are described in the law, as 
     are exceptions to the documentation requirement.
       Section 6036(a)(2) of the law specifies that the 
     documentation requirements do not apply to an alien who is 
     eligible for Medicaid:
       And is entitled to or enrolled for Medicare benefits;
       On the basis of receiving Supplemental Security Income 
     (SSI) benefits; or
       On such other basis as the Secretary may specify that 
     satisfactory documentary evidence had been previously 
     presented.
       The provision applies to initial determinations and to 
     redeterminations of eligibility for Medicaid made on or after 
     July 1, 2006.
     Explanation of provision
       The provision would specify that the documentation 
     requirements do not apply to an individual declaring to be a 
     citizen or national of the United States who is eligible for 
     Medicaid:
       And is entitled to or enrolled for Medicare benefits;
       And is receiving (1) Social Security benefits on the basis 
     of a disability or (2) SSI benefits;
       And with respect to whom (1) child welfare services are 
     made available under Title IV-B of the Social Security Act or 
     (2) adoption or foster care assistance is made available 
     under Title IV-E; or

[[Page E2253]]

       On such basis as the Secretary may specify that 
     satisfactory documentary evidence has been previously 
     presented.
       The provision would also make reference corrections. These 
     changes would be effective as if included in the Deficit 
     Reduction Act of 2005.
       In addition, effective 6 months after enactment, the 
     provision would (1) require states to have procedures in 
     effect for verifying the citizenship or immigration status 
     of children in foster care under the responsibility of the 
     state under Title IV-E or IV-B of the Social Security Act 
     and (2) specify that in reviews of state programs under 
     IV-E and IV-B, the requirements subject to review shall 
     include determining whether the state program is in 
     conformity with the requirement to verify citizenship or 
     immigration status.
       (2) Miscellaneous Technical Corrections
     Current law
       Section 5114(a)(2). This P.L. 109-171 provision modified 
     the first sentence of Section 1842(b)(6)(F) of the Social 
     Security Act to add a new paragraph H to 1842(b)(6) so that a 
     federally qualified health center (FQHC) would be paid 
     directly for FQHC services provided by a health care 
     professional under contract with that FQHC.
       Section 6003(b)(2). This P.L. 109-171 provision modified 
     Section 1927 of the Social Security Act by referencing 
     subsection (k) relating to Section 505(c) drugs.
       Section 6031(b), 6032(b), and 6035(c). These sections 
     referenced Section 6035(e) of P.L. 109-171, which does not 
     exist, to provide exceptions to effective dates.
       Section 6034(b). Section 6034 of P.L. 109-171 establishes 
     the Medicaid Integrity Program. It references modifications 
     made to the Social Security Act by Section 6033(a).
       Section 6036(b). Section 6036 of P.L. 109-171 deals with 
     improved enforcement of documentation requirements. Section 
     6036(b) references Section 1903(z) of the Social Security 
     Act. This section does not exist.
       Section 6015(a)(I). Section 6015 of P.L. 109-171 pertains 
     to continuing care retirement community admissions contracts. 
     It makes reference to clause (v) of Section 
     1919(c)(5)(A)(i)(II) of the Social Security Act.
     Explanation of provision
       Section 5114(a)(2). Instead of modifying Section 
     1842(b)(6)(F) to add paragraph H, the amendment would modify 
     Section 1842(b)(6) of the Social Security Act.
       Section 6003(b)(2). Instead of referencing subsection (k) 
     of Section 1927 of the Social Security Act, the amendment 
     would reference subsection (k)(1).
       Section 6031(b), 6032(b), and 6035(c). Instead of 
     referencing Section 6035(e), the amendment would reference 
     the effective date exception in Section 6034(e) of P.L. 109-
     171.
       Section 6034(b). Instead of referencing modifications made 
     by Section 6033(a) of P.L. 109-171, the amendment would 
     reference Section 6032(a).
       Section 6036(b). Instead of referencing Section 1903(z) of 
     the Social Security Act, the amendment would reference 
     Section 1903(x).
       Section 6015(a)(1). Instead of referencing clause (v) of 
     Section 1919(c)(5)(A)(i)(II) of the Social Security Act, the 
     amendment would reference subparagraph (B)(v).

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