[Congressional Record (Bound Edition), Volume 146 (2000), Part 9]
[House]
[Pages 12669-12769]
[From the U.S. Government Publishing Office, www.gpo.gov]



                          MEDICARE RX 2000 ACT

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

                               H.R. 4680

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

Sec. 1. Short title; table of contents.

              TITLE I--MEDICARE PRESCRIPTION DRUG BENEFIT

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

         ``Part D--Voluntary Prescription Drug Benefit Program

``Sec. 1860A. Benefits; eligibility; enrollment; and coverage period.
``Sec. 1860B. Requirements for qualified prescription drug coverage.
``Sec. 1860C. Beneficiary protections for qualified prescription drug 
              coverage.
``Sec. 1860D. Requirements for prescription drug plan (PDP) sponsors.
``Sec. 1860E. Process for beneficiaries to select qualified 
              prescription drug coverage.
``Sec. 1860F. Premiums.
``Sec. 1860G. Premium and cost-sharing subsidies for low-income 
              individuals.
``Sec. 1860H. Subsidies for all medicare beneficiaries through 
              reinsurance for qualified prescription drug coverage.
``Sec. 1860I. Medicare Prescription Drug Account in Federal 
              Supplementary Medical Insurance Trust Fund.

[[Page 12670]]

``Sec. 1860J. Definitions; treatment of references to provisions in 
              part C.
Sec. 102. Offering of qualified prescription drug coverage under the 
              Medicare+Choice program.
Sec. 103. Medicaid amendments.
Sec. 104. Medigap transition provisions.

         TITLE II--MODERNIZATION OF ADMINISTRATION OF MEDICARE

              Subtitle A--Medicare Benefits Administration

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

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

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

      Subtitle C--Changes in Medicare Coverage and Appeals Process

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

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

                  Subtitle A--Medicare+Choice Reforms

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

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

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

              TITLE I--MEDICARE PRESCRIPTION DRUG BENEFIT

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

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

         ``Part D--Voluntary Prescription Drug Benefit Program

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

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

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

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

     the individual shall be eligible to enroll in a prescription 
     drug plan under this part but only during the period 
     described in subparagraph (B)(i). If the individual enrolls 
     in such a plan, the individual may change such enrollment 
     under this part, but the individual may not enroll in a 
     Medicare+Choice plan under part C unless the individual 
     enrolls under part B. Nothing in this subparagraph shall be 
     construed as providing for coverage under a prescription drug 
     plan of benefits that are excluded because of the application 
     of section 1860B(f)(2)(B).
       ``(c) Guaranteed Issue; Community Rating; and 
     Nondiscrimination.--
       ``(1) Guaranteed issue.--
       ``(A) In general.--An eligible individual who is eligible 
     to elect qualified prescription drug coverage under a 
     prescription drug plan or Medicare+Choice plan at a time 
     during which elections are accepted under this part with 
     respect to the plan shall not be denied enrollment based on 
     any health status-related factor (described in section 
     2702(a)(1) of the Public Health Service Act) or any other 
     factor.
       ``(B) Medicare+choice limitations permitted.--The 
     provisions of paragraphs (2) and (3) (other than subparagraph 
     (C)(i), relating to default enrollment) of section 1851(g) 
     (relating to priority and limitation on termination of 
     election) shall apply to PDP sponsors under this subsection.
       ``(2) Community-rated premium.--
       ``(A) In general.--In the case of an individual who 
     maintains (as determined under subparagraph (C)) continuous 
     prescription drug coverage since first qualifying to elect 
     prescription drug coverage under this part, a PDP sponsor or 
     Medicare+Choice organization offering a prescription drug 
     plan or Medicare+Choice plan that provides qualified 
     prescription drug coverage and in which the individual is 
     enrolled may not deny, limit, or condition the coverage or 
     provision of covered prescription drug benefits or increase 
     the premium under the plan based on any health status-related 
     factor described in section 2702(a)(1) of the Public Health 
     Service Act or any other factor.
       ``(B) Late enrollment penalty.--In the case of an 
     individual who does not maintain such continuous prescription 
     drug coverage, a PDP sponsor or Medicare+Choice organization 
     may (notwithstanding any provision in this title) increase 
     the premium otherwise applicable or impose a pre-existing 
     condition exclusion with respect to qualified prescription 
     drug coverage in a manner that reflects additional actuarial 
     risk involved. Such a risk shall be established through an 
     appropriate actuarial opinion of the type described in 
     subparagraphs (A) through (C) of section 2103(c)(4).
       ``(C) Continuous prescription drug coverage.--An individual 
     is considered for purposes of this part to be maintaining 
     continuous prescription drug coverage on and after a date if 
     the individual establishes that there is no period of 63 days 
     or longer on and after such date (beginning not earlier than 
     January 1, 2003) during all of which the individual did not 
     have any of the following prescription drug coverage:
       ``(i) Coverage under prescription drug plan or 
     medicare+choice plan.--Qualified prescription drug coverage 
     under a prescription drug plan or under a Medicare+Choice 
     plan.
       ``(ii) Medicaid prescription drug coverage.--Prescription 
     drug coverage under a medicaid plan under title XIX, 
     including through the Program of All-inclusive Care for the 
     Elderly (PACE) under section 1934,

[[Page 12671]]

     through a social health maintenance organization (referred to 
     in section 4104(c) of the Balanced Budget Act of 1997), or 
     through a Medicare+Choice project that demonstrates the 
     application of capitation payment rates for frail elderly 
     medicare beneficiaries through the use of a interdisciplinary 
     team and through the provision of primary care services to 
     such beneficiaries by means of such a team at the nursing 
     facility involved.
       ``(iii) Prescription drug coverage under group health 
     plan.--Any outpatient prescription drug coverage under a 
     group health plan, including a health benefits plan under the 
     Federal Employees Health Benefit Plan under chapter 89 of 
     title 5, United States Code, and a qualified retiree 
     prescription drug plan as defined in section 1860H(f)(1).
       ``(iv) Prescription drug coverage under certain medigap 
     policies.--Coverage under a medicare supplemental policy 
     under section 1882 that provides benefits for prescription 
     drugs (whether or not such coverage conforms to the standards 
     for packages of benefits under section 1882(p)(1)), but only 
     if the policy was in effect on January 1, 2003, and only 
     until the date such coverage is terminated.
       ``(v) State pharmaceutical assistance program.--Coverage of 
     prescription drugs under a State pharmaceutical assistance 
     program.
       ``(vi) Veterans' coverage of prescription drugs.--Coverage 
     of prescription drugs for veterans under chapter 17 of title 
     38, United States Code.
       ``(D) Certification.--For purposes of carrying out this 
     paragraph, the certifications of the type described in 
     sections 2701(e) of the Public Health Service Act and in 
     section 9801(e) of the Internal Revenue Code shall also 
     include a statement for the period of coverage of whether the 
     individual involved had prescription drug coverage described 
     in subparagraph (C).
       ``(E) Construction.--Nothing in this section shall be 
     construed as preventing the disenrollment of an individual 
     from a prescription drug plan or a Medicare+Choice plan based 
     on the termination of an election described in section 
     1851(g)(3), including for non-payment of premiums or for 
     other reasons specified in subsection (d)(3), which takes 
     into account a grace period described in section 
     1851(g)(3)(B)(i).
       ``(3) Nondiscrimination.--A PDP sponsor offering a 
     prescription drug plan shall not establish a service area in 
     a manner that would discriminate based on health or economic 
     status of potential enrollees.
       ``(d) Effective Date of Elections.--
       ``(1) In general.--Except as provided in this section, the 
     Medicare Benefits Administrator shall provide that elections 
     under subsection (b) take effect at the same time as the 
     Secretary provides that similar elections under section 
     1851(e) take effect under section 1851(f).
       ``(2) No election effective before 2003.--In no case shall 
     any election take effect before January 1, 2003.
       ``(3) Termination.--The Medicare Benefits Administrator 
     shall provide for the termination of elections in the case 
     of--
       ``(A) termination of coverage under part B (other than the 
     case of an individual described in subsection (b)(2)(D) 
     (relating to part A only individuals); and
       ``(B) termination of elections described in section 
     1851(g)(3) (including failure to pay required premiums).

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

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

     Any amount determined under subparagraph (B) that is not a 
     multiple of $5 shall be rounded to the nearest multiple of 
     $5.
       ``(2) Limits on cost-sharing.--The coverage has cost-
     sharing (for costs above the annual deductible specified in 
     paragraph (1) and up to the initial coverage limit under 
     paragraph (3)) that is equal to 50 percent or that is 
     actuarially consistent (using processes established under 
     subsection (e)) with an average expected payment of 50 
     percent of such costs.
       ``(3) Initial coverage limit.--Subject to paragraph (4), 
     the coverage has an initial coverage limit on the maximum 
     costs that may be recognized for payment purposes (above the 
     annual deductible)--
       ``(A) for 2003, that is equal to $2,100; or
       ``(B) for a subsequent year, that is equal to the amount 
     specified in this paragraph for the previous year, increased 
     by the annual percentage increase described in paragraph (5) 
     for the year involved.

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

     Any amount determined under clause (ii) that is not a 
     multiple of $100 shall be rounded to the nearest multiple of 
     $100.
       ``(C) Application.--In applying subparagraph (A)--
       ``(i) incurred costs shall only include costs incurred for 
     the annual deductible (described in paragraph (1)), cost-
     sharing (described in paragraph (2)), and amounts for which 
     benefits are not provided because of the application of the 
     initial coverage limit described in paragraph (3); but
       ``(ii) costs shall be treated as incurred without regard to 
     whether the individual or another person, including a State 
     program, has paid for such costs, but shall not be counted 
     insofar as such costs are covered as benefits under a 
     prescription drug plan, a Medicare+Choice plan, or other 
     third-party coverage.
       ``(5) Annual percentage increase.--For purposes of this 
     part, the annual percentage increase specified in this 
     paragraph for a year is equal to the annual percentage 
     increase in average per capita aggregate expenditures for 
     covered outpatient drugs in the United States for medicare 
     beneficiaries, as determined by the Medicare Benefits 
     Administrator for the 12-month period ending in July of the 
     previous year.
       ``(c) Alternative Coverage Requirements.--A prescription 
     drug plan or Medicare+Choice plan may provide a different 
     prescription drug benefit design from the standard coverage 
     described in subsection (b)(1) so long as the following 
     requirements are met:
       ``(1) Assuring at least actuarially equivalent coverage.--
       ``(A) Assuring equivalent value of total coverage.--The 
     actuarial value of the total coverage (as determined under 
     subsection (e)) is at least equal to the actuarial value (as 
     so determined) of standard coverage.
       ``(B) Assuring equivalent unsubsidized value of coverage.--
     The unsubsidized value of the coverage is at least equal to 
     the unsubsidized value of standard coverage. For purposes of 
     this subparagraph, the unsubsidized value of coverage is the 
     amount by which the actuarial value of the coverage (as 
     determined under subsection (e)) exceeds the actuarial value 
     of the reinsurance subsidy payments under section 1860H with 
     respect to such coverage.
       ``(C) Assuring standard payment for costs at initial 
     coverage limit.--The coverage is designed, based upon an 
     actuarially representative pattern of utilization (as 
     determined under subsection (e)), to provide for the payment, 
     with respect to costs incurred that are equal to the sum of 
     the deductible under subsection (b)(1) and the initial 
     coverage limit under subsection (b)(3), of an amount equal to 
     at least such initial coverage limit multiplied by the 
     percentage specified in subsection (b)(2).

[[Page 12672]]

       ``(2) Limitation on out-of-pocket expenditures by 
     beneficiaries.--The coverage provides the limitation on out-
     of-pocket expenditures by beneficiaries described in 
     subsection (b)(4).
       ``(d) Access to Negotiated Prices.--Under qualified 
     prescription drug coverage offered by a PDP sponsor or a 
     Medicare+Choice organization, the sponsor or organization 
     shall provide beneficiaries with access to negotiated prices 
     (including applicable discounts) used for payment for covered 
     outpatient drugs, regardless of the fact that no benefits may 
     be payable under the coverage with respect to such drugs 
     because of the application of cost-sharing or an initial 
     coverage limit (described in subsection (b)(3)).
       ``(e) Actuarial Valuation; Determination of Annual 
     Percentage Increases.--
       ``(1) Processes.--For purposes of this section, the 
     Medicare Benefits Administrator shall establish processes and 
     methods--
       ``(A) for determining the actuarial valuation of 
     prescription drug coverage, including--
       ``(i) an actuarial valuation of standard coverage and of 
     the reinsurance subsidy payments under section 1860H;
       ``(ii) the use of generally accepted actuarial principles 
     and methodologies; and
       ``(iii) applying the same methodology for determinations of 
     alternative coverage under subsection (c) as is used with 
     respect to determinations of standard coverage under 
     subsection (b); and
       ``(B) for determining annual percentage increases described 
     in subsection (b)(5).
       ``(2) Use of outside actuaries.--Under the processes under 
     paragraph (1)(A), PDP sponsors and Medicare+Choice 
     organizations may use actuarial opinions certified by 
     independent, qualified actuaries to establish actuarial 
     values.
       ``(f) Covered Outpatient Drugs Defined.--
       ``(1) In general.--Except as provided in this subsection, 
     for purposes of this part, the term `covered outpatient drug' 
     means--
       ``(A) a drug that may be dispensed only upon a prescription 
     and that is described in subparagraph (A)(i) or (A)(ii) of 
     section 1927(k)(2); or
       ``(B) a biological product or insulin described in 
     subparagraph (B) or (C) of such section.
       ``(2) Exclusions.--
       ``(A) In general.--Such term does not include drugs or 
     classes of drugs, or their medical uses, which may be 
     excluded from coverage or otherwise restricted under section 
     1927(d)(2), other than subparagraph (E) thereof (relating to 
     smoking cessation agents).
       ``(B) Avoidance of duplicate coverage.--A drug prescribed 
     for an individual that would otherwise be a covered 
     outpatient drug under this part shall not be so considered if 
     payment for such drug is available under part A or B (but 
     shall be so considered if such payment is not available 
     because benefits under part A or B have been exhausted), 
     without regard to whether the individual is entitled to 
     benefits under part A or enrolled under part B.
       ``(3) Application of formulary restrictions.--A drug 
     prescribed for an individual that would otherwise be a 
     covered outpatient drug under this part shall not be so 
     considered under a plan if the plan excludes the drug under a 
     formulary that meets the requirements of section 1860C(f)(2) 
     (including providing an appeal process).
       ``(4) Application of general exclusion provisions.--A 
     prescription drug plan or Medicare+Choice plan may exclude 
     from qualified prescription drug coverage any covered 
     outpatient drug--
       ``(A) for which payment would not be made if section 
     1862(a) applied to part D; or
       ``(B) which are not prescribed in accordance with the plan 
     or this part.

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

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

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

[[Page 12673]]

     for hearing and resolving grievances between the organization 
     (including any entity or individual through which the sponsor 
     provides covered benefits) and enrollees with prescription 
     drug plans of the sponsor under this part in accordance with 
     section 1852(f).
       ``(f) Coverage Determinations, Reconsiderations, and 
     Appeals.--
       ``(1) In general.--A PDP sponsor shall meet the 
     requirements of section 1852(g) with respect to covered 
     benefits under the prescription drug plan it offers under 
     this part in the same manner as such requirements apply to a 
     Medicare+Choice organization with respect to benefits it 
     offers under a Medicare+Choice plan under part C.
       ``(2) Appeals of formulary determinations.--Under the 
     appeals process under paragraph (1) an individual who is 
     enrolled in a prescription drug plan offered by a PDP sponsor 
     may appeal to obtain coverage for a medically necessary 
     covered outpatient drug that is not on the formulary of the 
     sponsor (established under subsection (c)) if the prescribing 
     physician determines that the therapeutically similar drug 
     that is on the formulary is not effective for the enrollee or 
     has significant adverse effects for the enrollee.
       ``(g) Confidentiality and Accuracy of Enrollee Records.--A 
     PDP sponsor shall meet the requirements of section 1852(h) 
     with respect to enrollees under this part in the same manner 
     as such requirements apply to a Medicare+Choice organization 
     with respect to enrollees under part C.

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

       ``(a) General Requirements.--Each PDP sponsor of a 
     prescription drug plan shall meet the following requirements:
       ``(1) Licensure.--Subject to subsection (c), the sponsor is 
     organized and licensed under State law as a risk-bearing 
     entity eligible to offer health insurance or health benefits 
     coverage in each State in which it offers a prescription drug 
     plan.
       ``(2) Assumption of full financial risk.--
       ``(A) In general.--Subject to subparagraph (B) and section 
     1860E(d)(2), the entity assumes full financial risk on a 
     prospective basis for qualified prescription drug coverage 
     that it offers under a prescription drug plan and that is not 
     covered under reinsurance under section 1860H.
       ``(B) Reinsurance permitted.--The entity may obtain 
     insurance or make other arrangements for the cost of coverage 
     provided to any enrolled member under this part.
       ``(3) Solvency for unlicensed sponsors.--In the case of a 
     sponsor that is not described in paragraph (1), the sponsor 
     shall meet solvency standards established by the Medicare 
     Benefits Administrator under subsection (d).
       ``(b) Contract Requirements.--
       ``(1) In general.--The Medicare Benefits Administrator 
     shall not permit the election under section 1860A of a 
     prescription drug plan offered by a PDP sponsor under this 
     part, and the sponsor shall not be eligible for payments 
     under section 1860G or 1860H, unless the Administrator has 
     entered into a contract under this subsection with the 
     sponsor with respect to the offering of such plan. Such a 
     contract with a sponsor may cover more than 1 prescription 
     drug plan. Such contract shall provide that the sponsor 
     agrees to comply with the applicable requirements and 
     standards of this part and the terms and conditions of 
     payment as provided for in this part.
       ``(2) Incorporation of certain medicare+choice contract 
     requirements.--The following provisions of section 1857 shall 
     apply, subject to subsection (c)(5), to contracts under this 
     section in the same manner as they apply to contracts under 
     section 1857(a):
       ``(A) Minimum enrollment.--Paragraphs (1) and (3) of 
     section 1857(b).
       ``(B) Contract period and effectiveness.--Paragraphs (1) 
     through (3) and (5) of section 1857(c).
       ``(C) Protections against fraud and beneficiary 
     protections.--Section 1857(d).
       ``(D) Additional contract terms.--Section 1857(e); except 
     that in applying section 1857(e)(2) under this part--
       ``(i) such section shall be applied separately to costs 
     relating to this part (from costs under part C);
       ``(ii) in no case shall the amount of the fee established 
     under this subparagraph for a plan exceed 20 percent of the 
     maximum amount of the fee that may be established under 
     subparagraph (B) of such section; and
       ``(iii) no fees shall be applied under this subparagraph 
     with respect to Medicare+Choice plans.
       ``(E) Intermediate sanctions.--Section 1857(g).
       ``(F) Procedures for termination.--Section 1857(h).
       ``(3) Rules of application for intermediate sanctions.--In 
     applying paragraph (2)(E)--
       ``(A) the reference in section 1857(g)(1)(B) to section 
     1854 is deemed a reference to this part; and
       ``(B) the reference in section 1857(g)(1)(F) to section 
     1852(k)(2)(A)(ii) shall not be applied.
       ``(c) Waiver of Certain Requirements to Expand Choice.--
       ``(1) In general.--In the case of an entity that seeks to 
     offer a prescription drug plan in a State, the Medicare 
     Benefits Administrator shall waive the requirement of 
     subsection (a)(1) that the entity be licensed in that State 
     if the Administrator determines, based on the application and 
     other evidence presented to the Administrator, that any of 
     the grounds for approval of the application described in 
     paragraph (2) has been met.
       ``(2) Grounds for approval.--The grounds for approval under 
     this paragraph are the grounds for approval described in 
     subparagraph (B), (C), and (D) of section 1855(a)(2), and 
     also include the application by a State of any grounds other 
     than those required under Federal law.
       ``(3) Application of medicare+choice pso waiver 
     procedures.--With respect to an application for a waiver (or 
     a waiver granted) under this subsection, the provisions of 
     subparagraphs (E), (F), and (G) of section 1855(a)(2) shall 
     apply.
       ``(4) Licensure does not substitute for or constitute 
     certification.--The fact that an entity is licensed in 
     accordance with subsection (a)(1) does not deem the entity to 
     meet other requirements imposed under this part for a PDP 
     sponsor.
       ``(5) References to certain provisions.--For purposes of 
     this subsection, in applying provisions of section 1855(a)(2) 
     under this subsection to prescription drug plans and PDP 
     sponsors--
       ``(A) any reference to a waiver application under section 
     1855 shall be treated as a reference to a waiver application 
     under paragraph (1); and
       ``(B) any reference to solvency standards were treated as a 
     reference to solvency standards established under subsection 
     (c).
       ``(d) Solvency Standards for Non-Licensed Sponsors.--
       ``(1) Establishment.--The Medicare Benefits Administrator 
     shall establish, by not later than October 1, 2001, financial 
     solvency and capital adequacy standards that an entity that 
     does not meet the requirements of subsection (a)(1) must meet 
     to qualify as a PDP sponsor under this part.
       ``(2) Compliance with standards.--Each PDP sponsor that is 
     not licensed by a State under subsection (a)(1) and for which 
     a waiver application has been approved under subsection (c) 
     shall meet solvency and capital adequacy standards 
     established under paragraph (1). The Medicare Benefits 
     Administrator shall establish certification procedures for 
     such PDP sponsors with respect to such solvency standards in 
     the manner described in section 1855(c)(2).
       ``(e) Other Standards.--The Medicare Benefits Administrator 
     shall establish by regulation other standards (not described 
     in subsection (d)) for PDP sponsors and plans consistent 
     with, and to carry out, this part. The Administrator shall 
     publish such regulations by October 1, 2001. In order to 
     carry out this requirement in a timely manner, the 
     Administrator may promulgate regulations that take effect on 
     an interim basis, after notice and pending opportunity for 
     public comment.
       ``(f) Relation to State Laws.--
       ``(1) In general.--The standards established under this 
     subsection shall supersede any State law or regulation 
     (including standards described in paragraph (2)) with respect 
     to prescription drug plans which are offered by PDP sponsors 
     under this part to the extent such law or regulation is 
     inconsistent with such standards, in the same manner as such 
     laws and regulations are superseded under section 1856(b)(3).
       ``(2) Standards specifically superseded.--State standards 
     relating to the following are superseded under this 
     subsection:
       ``(A) Benefit requirements.
       ``(B) Requirements relating to inclusion or treatment of 
     providers.
       ``(C) Coverage determinations (including related appeals 
     and grievance processes).
       ``(3) Prohibition of state imposition of premium taxes.--No 
     State may impose a premium tax or similar tax with respect to 
     premiums paid to PDP sponsors for prescription drug plans 
     under this part, or with respect to any payments made to such 
     a sponsor by the Medicare Benefits Administrator under this 
     part.

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

       ``(a) In General.--The Medicare Benefits Administrator, 
     through the Office of Beneficiary Assistance, shall 
     establish, based upon and consistent with the procedures used 
     under part C (including section 1851), a process for the 
     selection of the prescription drug plan or Medicare+Choice 
     plan which offer qualified prescription drug coverage through 
     which eligible individuals elect qualified prescription drug 
     coverage under this part.
       ``(b) Elements.--Such process shall include the following:
       ``(1) Annual, coordinated election periods, in which such 
     individuals can change the qualifying plans through which 
     they obtain coverage, in accordance with section 1860A(b)(2).
       ``(2) Active dissemination of information to promote an 
     informed selection among qualifying plans based upon price, 
     quality, and other features, in the manner described in (and 
     in coordination with) section 1851(d), including the 
     provision of annual comparative information, maintenance of a 
     toll-free hotline, and the use of non-federal entities.

[[Page 12674]]

       ``(3) Coordination of elections through filing with a 
     Medicare+Choice organization or a PDP sponsor, in the manner 
     described in (and in coordination with) section 1851(c)(2).
       ``(c) Medicare+Choice Enrollee In Plan Offering 
     Prescription Drug Coverage May Only Obtain Benefits Through 
     the Plan.--An individual who is enrolled under a 
     Medicare+Choice plan that offers qualified prescription drug 
     coverage may only elect to receive qualified prescription 
     drug coverage under this part through such plan.
       ``(d) Assuring Access to a Choice of Qualified Prescription 
     Drug Coverage.--
       ``(1) In general.--The Medicare Benefits Administrator 
     shall assure that each individual who is enrolled under part 
     B and who is residing in an area has available a choice of 
     enrollment in at least 2 qualifying plans (as defined in 
     paragraph (5)) in the area in which the individual resides, 
     at least 1 of which is a prescription drug plan.
       ``(2) Guaranteeing access to coverage.--In order to assure 
     access under paragraph (1) and consistent with paragraph (3), 
     the Medicare Benefits Administrator may provide financial 
     incentives (including partial underwriting of risk) for a PDP 
     sponsor to expand the service area under an existing 
     prescription drug plan to adjoining or additional areas or to 
     establish such a plan (including offering such a plan on a 
     regional or nationwide basis), but only so long as (and to 
     the extent) necessary to assure the access guaranteed under 
     paragraph (1).
       ``(3) Limitation on authority.--In exercising authority 
     under this subsection, the Medicare Benefits Administrator--
       ``(A) shall not provide for the full underwriting of 
     financial risk for any PDP sponsor;
       ``(B) shall not provide for any underwriting of financial 
     risk for a public PDP sponsor with respect to the offering of 
     a nationwide prescription drug plan; and
       ``(C) shall seek to maximize the assumption of financial 
     risk by PDP sponsors or Medicare+Choice organizations.
       ``(4) Reports.--The Medicare Benefits Administrator shall, 
     in each annual report to Congress under section 1807(f), 
     include information on the exercise of authority under this 
     subsection. The Administrator also shall include such 
     recommendations as may be appropriate to minimize the 
     exercise of such authority, including minimizing the 
     assumption of financial risk.
       ``(5) Qualifying plan defined.--For purposes of this 
     subsection, the term `qualifying plan' means a prescription 
     drug plan or a a Medicare+Choice plan that includes qualified 
     prescription drug coverage.

     ``SEC. 1860F. PREMIUMS.

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

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

       ``(a) In General.--
       ``(1) Full premium subsidy and reduction of cost-sharing 
     for individuals with income below 135 percent of federal 
     poverty level.--In the case of a subsidy eligible individual 
     (as defined in paragraph (3)) who is determined to have 
     income that does not exceed 135 percent of the Federal 
     poverty level, the individual is entitled under this 
     section--
       ``(A) to a premium subsidy equal to 100 percent of the 
     amount described in subsection (b)(1); and
       ``(B) subject to subsection (c), to the substitution for 
     the beneficiary cost-sharing described in paragraphs (1) and 
     (2) of section 1860B(b) (up to the initial coverage limit 
     specified in paragraph (3) of such section) of amounts that 
     are nominal.
       ``(2) Sliding scale premium subsidy for individuals with 
     income above 135, but below 150 percent, of federal poverty 
     level.--In the case of a subsidy eligible individual who is 
     determined to have income that exceeds 135 percent, but does 
     not exceed 150 percent, of the Federal poverty level, the 
     individual is entitled under this section to a premium 
     subsidy determined on a linear sliding scale ranging from 100 
     percent of the amount described in subsection (b)(1) for 
     individuals with incomes at 135 percent of such level to 0 
     percent of such amount for individuals with incomes at 150 
     percent of such level.
       ``(3) Determination of eligibility.--
       ``(A) Subsidy eligible individual defined.--For purposes of 
     this section, subject to subparagraph (D), the term `subsidy 
     eligible individual' means an individual who--
       ``(i) is eligible to elect, and has elected, to obtain 
     qualified prescription drug coverage under this part;
       ``(ii) has income below 150 percent of the Federal poverty 
     line; and
       ``(iii) meets the resources requirement described in 
     section 1905(p)(1)(C).
       ``(B) Determinations.--The determination of whether an 
     individual residing in a State is a subsidy eligible 
     individual and the amount of such individual's income shall 
     be determined under the State medicaid plan for the State 
     under section 1935(a). In the case of a State that does not 
     operate such a medicaid plan (either under title XIX or under 
     a statewide waiver granted under section 1115), such 
     determination shall be made under arrangements made by the 
     Medicare Benefits Administrator.
       ``(C) Income determinations.--For purposes of applying this 
     section--
       ``(i) income shall be determined in the manner described in 
     section 1905(p)(1)(B); and
       ``(ii) the term `Federal poverty line' means the official 
     poverty line (as defined by the Office of Management and 
     Budget, and revised annually in accordance with section 
     673(2) of the Omnibus Budget Reconciliation Act of 1981) 
     applicable to a family of the size involved.
       ``(D) Treatment of territorial residents.--In the case of 
     an individual who is not a resident of the 50 States or the 
     District of Columbia, the individual is not eligible to be a 
     subsidy eligible individual but may be eligible for financial 
     assistance with prescription drug expenses under section 
     1935(e).
       ``(b) Premium Subsidy Amount.--
       ``(1) In general.--The premium subsidy amount described in 
     this subsection for an individual residing in an area is the 
     reference premium (as defined in paragraph (2)) for qualified 
     prescription drug coverage offered by the prescription drug 
     plan or the Medicare+Choice plan in which the individual is 
     enrolled.
       ``(2) Reference premium defined.--For purposes of this 
     subsection, the term `reference premium' means, with respect 
     to qualified prescription drug coverage offered under--
       ``(A) a prescription drug plan that--
       ``(i) provides standard coverage (or alternative 
     prescription drug coverage the actuarial value is equivalent 
     to that of standard coverage), the premium imposed for 
     enrollment under the plan under this part (determined without 
     regard to any subsidy under this section or any late 
     enrollment penalty under section 1860A(c)(2)(B)); or
       ``(ii) provides alternative prescription drug coverage the 
     actuarial value of which is greater than that of standard 
     coverage, the premium described in clause (i) multiplied by 
     the ratio of (I) the actuarial value of standard coverage, to 
     (II) the actuarial value of the alternative coverage; or

[[Page 12675]]

       ``(B) a Medicare+Choice plan, the standard premium computed 
     under section 1851(j)(4)(A)(iii), determined without regard 
     to any reduction effected under section 1851(j)(4)(B).
       ``(c) Rules in Applying Cost-Sharing Subsidies.--
       ``(1) In general.--In applying subsection (a)(1)(B)--
       ``(A) the maximum amount of subsidy that may be provided 
     with respect to an enrollee for a year may not exceed 95 
     percent of the maximum cost-sharing described in such 
     subsection that may be incurred for standard coverage;
       ``(B) the Medicare Benefits Administrator shall determine 
     what is `nominal' taking into account the rules applied under 
     section 1916(a)(3); and
       ``(C) nothing in this part shall be construed as preventing 
     a plan or provider from waiving or reducing the amount of 
     cost-sharing otherwise applicable.
       ``(2) Limitation on charges.--In the case of an individual 
     receiving cost-sharing subsidies under subsection (a)(1)(B), 
     the PDP sponsor may not charge more than a nominal amount in 
     cases in which the cost-sharing subsidy is provided under 
     such subsection.
       ``(d) Administration of Subsidy Program.--The Medicare 
     Benefits Administrator shall provide a process whereby, in 
     the case of an individual who is determined to be a subsidy 
     eligible individual and who is enrolled in prescription drug 
     plan or is enrolled in a Medicare+Choice plan under which 
     qualified prescription drug coverage is provided--
       ``(1) the Administrator provides for a notification of the 
     PDP sponsor or Medicare+Choice organization involved that the 
     individual is eligible for a subsidy and the amount of the 
     subsidy under subsection (a);
       ``(2) the sponsor or organization involved reduces the 
     premiums or cost-sharing otherwise imposed by the amount of 
     the applicable subsidy and submits to the Administrator 
     information on the amount of such reduction; and
       ``(3) the Administrator periodically and on a timely basis 
     reimburses the sponsor or organization for the amount of such 
     reductions.

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

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

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

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

[[Page 12676]]

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

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

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

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

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

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

       (a) In General.--Section 1851 of the Social Security Act 
     (42 U.S.C. 1395w-21) is amended by adding at the end the 
     following new subsection:
       ``(j) Availability of Prescription Drug Benefits.--
       ``(1) In general.--A Medicare+Choice organization may not 
     offer prescription drug coverage (other than that required 
     under parts A and B) to an enrollee under a Medicare+Choice 
     plan unless such drug coverage is at least qualified 
     prescription drug coverage and unless the requirements of 
     this subsection with respect to such coverage are met.
       ``(2) Compliance with additional beneficiary protections.--
     With respect to the offering of qualified prescription drug 
     coverage by a Medicare+Choice organization under a 
     Medicare+Choice plan, the organization and plan shall meet 
     the requirements of section 1860C, including requirements 
     relating to information dissemination and grievance and 
     appeals, in the same manner as

[[Page 12677]]

     they apply to a PDP sponsor and a prescription drug plan 
     under part D. The Medicare Benefits Administrator shall waive 
     such requirements to the extent the Administrator determines 
     that such requirements duplicate requirements otherwise 
     applicable to the organization or plan under this part.
       ``(3) Treatment of coverage.--Except as provided in this 
     subsection, qualified prescription drug coverage offered 
     under this subsection shall be treated under this part in the 
     same manner as supplemental health care benefits described in 
     section 1852(a)(3)(A).
       ``(4) Availability of premium and cost-sharing subsidies 
     for low-income enrollees and reinsurance subsidy payments for 
     organizations.--For provisions--
       ``(A) providing premium and cost-sharing subsidies to low-
     income individuals receiving qualified prescription drug 
     coverage through a Medicare+Choice plan, see section 1860G; 
     and
       ``(B) providing a Medicare+Choice organization with 
     reinsurance subsidy payments for providing qualified 
     prescription drug coverage under this part, see section 
     1860H.
       ``(5) Specification of separate and standard premium.--
       ``(A) In general.--For purposes of applying section 1854 
     and section 1860G(b)(2)(B) with respect to qualified 
     prescription drug coverage offered under this subsection 
     under a plan, the Medicare+Choice organization shall compute 
     and publish the following:
       ``(i) Separate prescription drug premium.--A premium for 
     prescription drug benefits that constitute qualified 
     prescription drug coverage that is separate from other 
     coverage under the plan.
       ``(ii) Portion of coverage attributable to standard 
     benefits.--The ratio of the actuarial value of standard 
     coverage to the actuarial value of the qualified prescription 
     drug coverage offered under the plan.
       ``(iii) Portion of premium attributable to standard 
     benefits.--A standard premium equal to the product of the 
     premium described in clause (i) and the ratio under clause 
     (ii).

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

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

     SEC. 103. MEDICAID AMENDMENTS.

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


  ``special provisions relating to medicare prescription drug benefit

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

[[Page 12678]]

     prescription drug plan or the Medicare+Choice plan selected 
     by the individual.
       ``(2) Condition.--A State may require, as a condition for 
     the receipt of medical assistance under this title with 
     respect to prescription drug benefits for an individual 
     eligible to obtain qualified prescription drug coverage 
     described in paragraph (1), that the individual elect 
     qualified prescription drug coverage under section 1860A.''.
       (d) Treatment of Territories.--
       (1) In general.--Section 1935 of such Act, as so inserted 
     and amended, is further amended--
       (A) in subsection (a)(1), by inserting ``subject to 
     subsection (e),'' after ``section 1903 '';
       (B) in subsection (c)(1), by inserting ``subject to 
     subsection (e),'' after ``1903(a)''; and
       (C) by adding at the end the following new subsection:
       ``(e) Treatment of Territories.--
       ``(1) In general.--In the case of a State, other than the 
     50 States and the District of Columbia--
       ``(A) the previous provisions of this section shall not 
     apply to residents of such State; and
       ``(B) if the State establishes a plan described in 
     paragraph (2) (for providing medical assistance with respect 
     to the provision of prescription drugs to medicare 
     beneficiaries), the amount otherwise determined under section 
     1108(f) (as increased under section 1108(g)) for the State 
     shall be increased by the amount specified in paragraph (3).
       ``(2) Plan.--The plan described in this paragraph is a plan 
     that--
       ``(A) provides medical assistance with respect to the 
     provision of covered outpatient drugs (as defined in section 
     1860B(f)) to low-income medicare beneficiaries; and
       ``(B) assures that additional amounts received by the State 
     that are attributable to the operation of this subsection are 
     used only for such assistance.
       ``(3) Increased amount.--
       ``(A) In general.--The amount specified in this paragraph 
     for a State for a year is equal to the product of--
       ``(i) the aggregate amount specified in subparagraph (B); 
     and
       ``(ii) the amount specified in section 1108(g)(1) for that 
     State, divided by the sum of the amounts specified in such 
     section for all such States.
       ``(B) Aggregate amount.--The aggregate amount specified in 
     this subparagraph for--
       ``(i) 2003, is equal to $20,000,000; or
       ``(ii) a subsequent year, is equal to the aggregate amount 
     specified in this subparagraph for the previous year 
     increased by annual percentage increase specified in section 
     1860(b)(5) for the year involved.
       ``(4) Report.--The Secretary shall submit to Congress a 
     report on the application of this subsection and may include 
     in the report such recommendations as the Secretary deems 
     appropriate.''.
       (2) Conforming amendment.--Section 1108(f) of such Act is 
     amended by inserting ``and section 1935(e)(1)(B)'' after 
     ``Subject to subsection (g)''.

     SEC. 104. MEDIGAP TRANSITION PROVISIONS.

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

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

         TITLE II--MODERNIZATION OF ADMINISTRATION OF MEDICARE

              Subtitle A--Medicare Benefits Administration

     SEC. 201. ESTABLISHMENT OF ADMINISTRATION.

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


                   ``medicare benefits administration

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

[[Page 12679]]

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

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

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

       ``(iii) submit annual reports to Congress, the Secretary, 
     and the Medicare Policy Advisory Board describing the 
     activities of the Office, and including such recommendations 
     for improvement in the administration of this title as the 
     Ombudsman determines appropriate.
       ``(C) Coordination with state ombudsman programs and 
     consumer organizations.--The Medicare Ombudsman shall, to the 
     extent appropriate, coordinate with State medical Ombudsman 
     programs, and with State- and community-based consumer 
     organizations, to--
       ``(i) provide information about the medicare program; and
       ``(ii) conduct outreach to educate medicare beneficiaries 
     with respect to manners in which problems under the medicare 
     program may be resolved or avoided.
       ``(e) Medicare Policy Advisory Board.--
       ``(1) Establishment.--There is established within the 
     Medicare Benefits Administration the Medicare Policy Advisory 
     Board (in this section referred to the `Board'). The Board 
     shall advise, consult with, and make recommendations to the 
     Administrator of the Medicare Benefits Administration with 
     respect to the administration of parts C and D, including the 
     review of payment policies under such parts.
       ``(2) Reports.--
       ``(A) In general.--With respect to matters of the 
     administration of parts C and D, the Board shall submit to 
     Congress and to the Administrator of the Medicare Benefits 
     Administration such reports as the Board determines 
     appropriate. Each such report may contain such 
     recommendations as the Board determines appropriate for 
     legislative or administrative changes to improve the 
     administration of such parts, including the topics described 
     in subparagraph (B). Each such report shall be published in 
     the Federal Register.
       ``(B) Topics described.--Reports required under 
     subparagraph (A) may include the following topics:
       ``(i) Fostering competition.--Recommendations or proposals 
     to increase competition under parts C and D for services 
     furnished to medicare beneficiaries.
       ``(ii) Education and enrollment.--Recommendations for the 
     improvement to efforts to provide medicare beneficiaries 
     information and education on the program under this title, 
     and specifically parts C and D, and the program for 
     enrollment under the title.
       ``(iii) Implementation of risk-adjustment.--Evaluation of 
     the implementation under section 1853(a)(3)(C) of the risk 
     adjustment methodology to payment rates under that section to 
     Medicare+Choice organizations offering Medicare+Choice plans 
     that accounts for variations in per capita costs based on 
     health status and other demographic factors.
       ``(iv) Disease management programs.--Recommendations on the 
     incorporation of disease management programs under parts C 
     and D.
       ``(C) Maintaining independence of board.--The Board shall 
     directly submit to Congress reports required under 
     subparagraph (A). No officer or agency of the United States 
     may require the Board to submit to any officer or agency of 
     the United States for approval, comments, or review, prior to 
     the submission to Congress of such reports.
       ``(3) Duty of administrator of medicare benefits 
     administration.--With respect to any report submitted by the 
     Board under paragraph (2)(A), not later than 90 days after 
     the report is submitted, the Administrator of the Medicare 
     Benefits Administration shall submit to Congress and the 
     President an

[[Page 12680]]

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

     SEC. 202. MISCELLANEOUS ADMINISTRATIVE PROVISIONS.

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

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

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

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

      Subtitle C--Changes in Medicare Coverage and Appeals Process

     SEC. 221. REVISIONS TO MEDICARE APPEALS PROCESS.

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


                       ``determinations; appeals

       ``Sec. 1869. (a) Initial Determinations.--The Secretary 
     shall promulgate regulations and make initial determinations 
     with respect to benefits under part A or part B in accordance 
     with those regulations for the following:
       ``(1) The initial determination of whether an individual is 
     entitled to benefits under such parts.
       ``(2) The initial determination of the amount of benefits 
     available to the individual under such parts.
       ``(3) Any other initial determination with respect to a 
     claim for benefits under such

[[Page 12681]]

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

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

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

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

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

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

       ``(ii) Definition of national coverage determination.--For 
     purposes of this section, the term `national coverage 
     determination' means a determination by the Secretary 
     respecting whether or not a particular item or service is 
     covered under this title, including such a determination 
     under 1862(a)(1).
       ``(B) Local coverage determination.--In the case of a local 
     coverage determination made by a fiscal intermediary or a 
     carrier under part A or part B respecting whether a 
     particular type or class of items or services is covered 
     under such parts, the following limitations apply:
       ``(i) Upon the filing of a complaint by an aggrieved party, 
     such a determination shall be reviewed by an administrative 
     law judge of the Social Security Administration. The 
     administrative law judge shall review the record and shall 
     permit discovery and the taking of evidence to evaluate the 
     reasonableness of the determination. In reviewing such a 
     determination, the administrative law judge shall defer only 
     to the reasonable findings of fact, reasonable 
     interpretations of law, and reasonable applications of fact 
     to law by the Secretary.
       ``(ii) Such a determination may be reviewed by the 
     Departmental Appeals Board of the Department of Health and 
     Human Services.
       ``(iii) A decision of the Departmental Appeals Board 
     constitutes a final agency action and is subject to judicial 
     review.
       ``(C) No material issues of fact in dispute.--In the case 
     of review of a determination under subparagraph (A)(i)(III) 
     or (B)(i) where the moving party alleges that there are no 
     material issues of fact in dispute, and alleges that the only 
     issue is the constitutionality of a provision of this title, 
     or that a regulation, determination, or ruling by the 
     Secretary is invalid, the moving party may seek review by a 
     court of competent jurisdiction.
       ``(D) Pending national coverage determinations.--
       ``(i) In general.--In the event the Secretary has not 
     issued a national coverage or noncoverage determination with 
     respect to a particular type or class of items or services, 
     an affected party may submit to the Secretary a request to 
     make such a determination with respect to such items or 
     services. By not later than the end of the 90-day period 
     beginning on the date the Secretary receives such a request, 
     the Secretary shall take one of the following actions:
       ``(I) Issue a national coverage determination, with or 
     without limitations.
       ``(II) Issue a national noncoverage determination.
       ``(III) Issue a determination that no national coverage or 
     noncoverage determination is appropriate as of the end of 
     such 90-day period with respect to national coverage of such 
     items or services.
       ``(IV) Issue a notice that states that the Secretary has 
     not completed a review of the national coverage determination 
     and that includes an identification of the remaining steps in 
     the Secretary's review process and a deadline by which the 
     Secretary will complete the review and take an action 
     described in subclause (I), (II), or (III).
       ``(ii) In the case of an action described in clause 
     (i)(IV), if the Secretary fails to take an action referred to 
     in such clause by the deadline specified by the Secretary 
     under such clause, then the Secretary is deemed to have taken 
     an action described in clause (i)(III) as of the deadline.
       ``(iii) When issuing a determination under clause (i), the 
     Secretary shall include an explanation of the basis for the 
     determination.

[[Page 12682]]

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

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

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

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

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

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

       ``(iii) Annual reporting.--Each qualified independent 
     contractor shall submit annually to the Secretary (or 
     otherwise as the Secretary may request) records maintained 
     under this paragraph for the previous year.
       ``(J) Hearings by the secretary.--The qualified independent 
     contractor shall (i) prepare such information as is required 
     for an appeal of its reconsidered determination to the 
     Secretary for a hearing, including as necessary, explanations 
     of issues involved in the determination and relevant 
     policies, and (ii) participate in such hearings as required 
     by the Secretary.

[[Page 12683]]

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

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

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

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

       (a) Expansion of Limitation of Liability Protection for 
     Beneficiaries With Respect to Medicare Claims Not Paid or 
     Paid Incorrectly.--
       (1) In general.--Section 1879 of the Social Security Act 
     (42 U.S.C. 1395pp) is amended by adding at the end the 
     following new subsections:
       ``(i) Notwithstanding any other provision of this Act, an 
     individual who is entitled to benefits under this title and 
     is furnished a service or item is not liable for repayment to 
     the Secretary of amounts with respect to such benefits--
       ``(1) subject to paragraph (2), in the case of a claim for 
     such item or service that is incorrectly paid by the 
     Secretary; and
       ``(2) in the case of payments made to the individual by the 
     Secretary with respect to any claim under paragraph (1), the 
     individual shall be liable for repayment of such amount only 
     up to the amount of payment received by the individual from 
     the Secretary.
       ``(j)(1) An individual who is entitled to benefits under 
     this title and is furnished a service or item is not liable 
     for payment of amounts with respect to such benefits in the 
     following cases:
       ``(A) In the case of a benefit for which an initial 
     determination has not been made by the Secretary under 
     subsection (a) whether payment may be made under this title 
     for such benefit.
       ``(B) In the case of a claim for such item or service that 
     is--
       ``(i) improperly submitted by the provider of services or 
     supplier; or
       ``(ii) rejected by an entity under contract with the 
     Secretary to review or pay claims

[[Page 12684]]

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

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

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

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

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

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

                  Subtitle A--Medicare+Choice Reforms

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

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

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

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

     SEC. 303. INCREASING MINIMUM PAYMENT AMOUNT.

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

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

       Section 1853(c)(2) of the Social Security Act (42 U.S.C. 
     1395w-23(c)(2)) is amended--
       (1) by striking the period at the end of subparagraph (F) 
     and inserting a semicolon; and
       (2) by adding after and below subparagraph (F) the 
     following:

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

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

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

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

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

[[Page 12685]]

     Administrator an annual per capita rate that--

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

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

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

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

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

       Section 1853(a)(3)(C)(ii) of the Social Security Act (42 
     U.S.C. 1395w-23(c)(1)(C)(ii)) is amended--
       (1) by striking the period at the end of subclause (II) and 
     inserting a semicolon; and
       (2) by adding after and below subclause (II) the following:

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

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

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

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

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

                               H.R. 4680

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

Sec. 1. Short title; table of contents.

              TITLE I--MEDICARE PRESCRIPTION DRUG BENEFIT

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

         ``Part D--Voluntary Prescription Drug Benefit Program

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

         TITLE II--MODERNIZATION OF ADMINISTRATION OF MEDICARE

              Subtitle A--Medicare Benefits Administration

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

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

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

      Subtitle C--Changes in Medicare Coverage and Appeals Process

Sec. 221. Revisions to medicare appeals process.
Sec. 222. Provisions with respect to limitations on liability of 
              beneficiaries.
Sec. 223. Waivers of liability for cost sharing amounts.
Sec. 224. Elimination of motions by the Secretary on decisions of the 
              Provider Reimbursement Review Board.
Sec. 225. Effective date of subtitle.

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

                  Subtitle A--Medicare+Choice Reforms

Sec. 301. Increase in national per capita Medicare+Choice growth 
              percentage in 2001 and 2002.
Sec. 302. Permanently removing application of budget neutrality 
              beginning in 2002.
Sec. 303. Increasing minimum payment amount.
Sec. 304. Allowing movement to 50:50 percent blend in 2002.
Sec. 305. Increased update for payment areas with only one or no 
              Medicare+Choice contracts.
Sec. 306. Permitting higher negotiated rates in certain Medicare+Choice 
              payment areas below national average.
Sec. 307. 10-year phase in of risk adjustment based on data from all 
              settings.
Sec. 308. Delay from July to October, 2000 in deadline for offering and 
              withdrawing Medicare+Choice plans for 2001.

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

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

              TITLE I--MEDICARE PRESCRIPTION DRUG BENEFIT

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

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

         ``Part D--Voluntary Prescription Drug Benefit Program

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

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

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

     In applying the last sentence of section 1851(e)(4) (relating 
     to discontinuance of a Medicare+Choice election during the 
     first year of eligibility) under this subparagraph, in the 
     case of an election described in such section in which the 
     individual had elected or is provided qualified prescription 
     drug coverage at the time

[[Page 12686]]

     of such first enrollment, the individual shall be permitted 
     to enroll in a prescription drug plan under this part at the 
     time of the election of coverage under the original fee-for-
     service plan.
       ``(B) Initial election periods.--
       ``(i) Individuals currently covered.--In the case of an 
     individual who is enrolled under part B as of November 1, 
     2002, there shall be an initial election period of 6 months 
     beginning on that date.
       ``(ii) Individual covered in future.--In the case of an 
     individual who is first enrolled under part B after November 
     1, 2002, there shall be an initial election period which is 
     the same as the initial enrollment period under section 
     1837(d).
       ``(C) Additional special election periods.--The Medicare 
     Benefits Administrator shall establish special election 
     periods--
       ``(i) in cases of individuals who have and involuntarily 
     lose prescription drug coverage described in subsection 
     (c)(2)(C);
       ``(ii) in cases described in section 1837(h) (relating to 
     errors in enrollment), in the same manner as such section 
     applies to part B; and
       ``(iii) in the case of an individual who meets such 
     exceptional conditions (including conditions recognized under 
     section 1851(d)(4)(D)) as the Administrator may provide.
       ``(D) One-time enrollment permitted for current part a only 
     beneficiaries.--In the case of an individual who as of 
     November 1, 2002--
       ``(i) is entitled to benefits under part A; and
       ``(ii) is not (and has not previously been) enrolled under 
     part B;
     the individual shall be eligible to enroll in a prescription 
     drug plan under this part but only during the period 
     described in subparagraph (B)(i). If the individual enrolls 
     in such a plan, the individual may change such enrollment 
     under this part, but the individual may not enroll in a 
     Medicare+Choice plan under part C unless the individual 
     enrolls under part B. Nothing in this subparagraph shall be 
     construed as providing for coverage under a prescription drug 
     plan of benefits that are excluded because of the application 
     of section 1860B(f)(2)(B).
       ``(c) Guaranteed Issue; Community Rating; and 
     Nondiscrimination.--
       ``(1) Guaranteed issue.--
       ``(A) In general.--An eligible individual who is eligible 
     to elect qualified prescription drug coverage under a 
     prescription drug plan or Medicare+Choice plan at a time 
     during which elections are accepted under this part with 
     respect to the plan shall not be denied enrollment based on 
     any health status-related factor (described in section 
     2702(a)(1) of the Public Health Service Act) or any other 
     factor.
       ``(B) Medicare+choice limitations permitted.--The 
     provisions of paragraphs (2) and (3) (other than subparagraph 
     (C)(i), relating to default enrollment) of section 1851(g) 
     (relating to priority and limitation on termination of 
     election) shall apply to PDP sponsors under this subsection.
       ``(2) Community-rated premium.--
       ``(A) In general.--In the case of an individual who 
     maintains (as determined under subparagraph (C)) continuous 
     prescription drug coverage since first qualifying to elect 
     prescription drug coverage under this part, a PDP sponsor or 
     Medicare+Choice organization offering a prescription drug 
     plan or Medicare+Choice plan that provides qualified 
     prescription drug coverage and in which the individual is 
     enrolled may not deny, limit, or condition the coverage or 
     provision of covered prescription drug benefits or increase 
     the premium under the plan based on any health status-related 
     factor described in section 2702(a)(1) of the Public Health 
     Service Act or any other factor.
       ``(B) Late enrollment penalty.--In the case of an 
     individual who does not maintain such continuous prescription 
     drug coverage, a PDP sponsor or Medicare+Choice organization 
     may (notwithstanding any provision in this title) increase 
     the premium otherwise applicable or impose a pre-existing 
     condition exclusion with respect to qualified prescription 
     drug coverage in a manner that reflects additional actuarial 
     risk involved. Such a risk shall be established through an 
     appropriate actuarial opinion of the type described in 
     subparagraphs (A) through (C) of section 2103(c)(4).
       ``(C) Continuous prescription drug coverage.--An individual 
     is considered for purposes of this part to be maintaining 
     continuous prescription drug coverage on and after a date if 
     the individual establishes that there is no period of 63 days 
     or longer on and after such date (beginning not earlier than 
     January 1, 2003) during all of which the individual did not 
     have any of the following prescription drug coverage:
       ``(i) Coverage under prescription drug plan or 
     medicare+choice plan.--Qualified prescription drug coverage 
     under a prescription drug plan or under a Medicare+Choice 
     plan.
       ``(ii) Medicaid prescription drug coverage.--Prescription 
     drug coverage under a medicaid plan under title XIX, 
     including through the Program of All-inclusive Care for the 
     Elderly (PACE) under section 1934, through a social health 
     maintenance organization (referred to in section 4104(c) of 
     the Balanced Budget Act of 1997), or through a 
     Medicare+Choice project that demonstrates the application of 
     capitation payment rates for frail elderly medicare 
     beneficiaries through the use of a interdisciplinary team and 
     through the provision of primary care services to such 
     beneficiaries by means of such a team at the nursing facility 
     involved.
       ``(iii) Prescription drug coverage under group health 
     plan.--Any outpatient prescription drug coverage under a 
     group health plan, including a health benefits plan under the 
     Federal Employees Health Benefit Plan under chapter 89 of 
     title 5, United States Code, and a qualified retiree 
     prescription drug plan as defined in section 1860H(f)(1).
       ``(iv) Prescription drug coverage under certain medigap 
     policies.--Coverage under a medicare supplemental policy 
     under section 1882 that provides benefits for prescription 
     drugs (whether or not such coverage conforms to the standards 
     for packages of benefits under section 1882(p)(1)), but only 
     if the policy was in effect on January 1, 2003, and only 
     until the date such coverage is terminated.
       ``(v) State pharmaceutical assistance program.--Coverage of 
     prescription drugs under a State pharmaceutical assistance 
     program.
       ``(vi) Veterans' coverage of prescription drugs.--Coverage 
     of prescription drugs for veterans under chapter 17 of title 
     38, United States Code.
       ``(D) Certification.--For purposes of carrying out this 
     paragraph, the certifications of the type described in 
     sections 2701(e) of the Public Health Service Act and in 
     section 9801(e) of the Internal Revenue Code shall also 
     include a statement for the period of coverage of whether the 
     individual involved had prescription drug coverage described 
     in subparagraph (C).
       ``(E) Construction.--Nothing in this section shall be 
     construed as preventing the disenrollment of an individual 
     from a prescription drug plan or a Medicare+Choice plan based 
     on the termination of an election described in section 
     1851(g)(3), including for non-payment of premiums or for 
     other reasons specified in subsection (d)(3), which takes 
     into account a grace period described in section 
     1851(g)(3)(B)(i).
       ``(3) Nondiscrimination.--A PDP sponsor offering a 
     prescription drug plan shall not establish a service area in 
     a manner that would discriminate based on health or economic 
     status of potential enrollees.
       ``(d) Effective Date of Elections.--
       ``(1) In general.--Except as provided in this section, the 
     Medicare Benefits Administrator shall provide that elections 
     under subsection (b) take effect at the same time as the 
     Secretary provides that similar elections under section 
     1851(e) take effect under section 1851(f).
       ``(2) No election effective before 2003.--In no case shall 
     any election take effect before January 1, 2003.
       ``(3) Termination.--The Medicare Benefits Administrator 
     shall provide for the termination of an election in the case 
     of--
       ``(A) termination of coverage under part B (other than the 
     case of an individual described in subsection (b)(2)(D) 
     (relating to part A only individuals)); and
       ``(B) termination of elections described in section 
     1851(g)(3) (including failure to pay required premiums).

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

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

     Any amount determined under subparagraph (B) that is not a 
     multiple of $5 shall be rounded to the nearest multiple of 
     $5.
       ``(2) Limits on cost-sharing.--The coverage has cost-
     sharing (for costs above the annual deductible specified in 
     paragraph (1) and up to the initial coverage limit under 
     paragraph (3)) that

[[Page 12687]]

     is equal to 50 percent or that is actuarially consistent 
     (using processes established under subsection (e)) with an 
     average expected payment of 50 percent of such costs.
       ``(3) Initial coverage limit.--Subject to paragraph (4), 
     the coverage has an initial coverage limit on the maximum 
     costs that may be recognized for payment purposes (above the 
     annual deductible)--
       ``(A) for 2003, that is equal to $2,100; or
       ``(B) for a subsequent year, that is equal to the amount 
     specified in this paragraph for the previous year, increased 
     by the annual percentage increase described in paragraph (5) 
     for the year involved.

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

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

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

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

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

       ``(a) Guaranteed Issue Community-Related Premiums and 
     Nondiscrimination.--For provisions requiring guaranteed 
     issue, community-rated premiums, and nondiscrimination, see 
     sections 1860A(c)(1), 1860A(c)(2), and 1860F(b).
       ``(b) Dissemination of Information.--
       ``(1) General information.--A PDP sponsor shall disclose, 
     in a clear, accurate, and standardized form to each enrollee 
     with a prescription drug plan offered by the sponsor under 
     this part at the time of enrollment and at least annually 
     thereafter, the information described in section 1852(c)(1) 
     relating to such plan. Such information includes the 
     following:
       ``(A) Access to covered outpatient drugs, including access 
     through pharmacy networks.
       ``(B) How any formulary used by the sponsor functions.
       ``(C) Co-payments and deductible requirements.
       ``(D) Grievance and appeals procedures.
       ``(2) Disclosure upon request of general coverage, 
     utilization, and grievance information.--Upon request of an 
     individual eligible to enroll under a prescription drug plan, 
     the PDP sponsor shall provide the information described in 
     section 1852(c)(2) (other than subparagraph (D)) to such 
     individual.
       ``(3) Response to beneficiary questions.--Each PDP sponsor 
     offering a prescription drug plan shall have a mechanism for 
     providing specific information to enrollees upon request. The 
     sponsor shall make available, through an Internet website and 
     in writing upon request, information on specific changes in 
     its formulary.
       ``(4) Claims information.--Each PDP sponsor offering a 
     prescription drug plan must furnish to enrolled individuals 
     in a form easily understandable to such individuals an 
     explanation of benefits (in accordance with section 1806(a) 
     or in a comparable manner) and a notice of the benefits in 
     relation to initial coverage limit and annual out-of-pocket 
     limit for the current year, whenever prescription drug 
     benefits are provided under this part (except that such 
     notice need not be provided more often than monthly).
       ``(c) Access to Covered Benefits.--

[[Page 12688]]

       ``(1) Assuring pharmacy access.--The PDP sponsor of the 
     prescription drug plan shall secure the participation of 
     sufficient numbers of pharmacies (which may include mail 
     order pharmacies) to ensure convenient access (including 
     adequate emergency access) for enrolled beneficiaries, in 
     accordance with standards established under section 1860D(e) 
     that ensure such convenient access. Nothing in this paragraph 
     shall be construed as requiring the participation of (or 
     permitting the exclusion of) all pharmacies in any area under 
     a plan.
       ``(2) Access to negotiated prices for prescription drugs.--
     The PDP sponsor of a prescription drug plan shall issue such 
     a card that may be used by an enrolled beneficiary to assure 
     access to negotiated prices under section 1860B(d) for the 
     purchase of prescription drugs for which coverage is not 
     otherwise provided under the prescription drug plan.
       ``(3) Requirements on development and application of 
     formularies.--Insofar as a PDP sponsor of a prescription drug 
     plan uses a formulary, the following requirements must be 
     met:
       ``(A) Formulary committee.--The sponsor must establish a 
     pharmaceutical and therapeutic committee that develops the 
     formulary. Such committee shall include at least one 
     physician and at least one pharmacist.
       ``(B) Inclusion of drugs in all therapeutic categories.--
     The formulary must include drugs within all therapeutic 
     categories and classes of covered outpatient drugs (although 
     not necessarily for all drugs within such categories and 
     classes).
       ``(C) Appeals and exceptions to application.--The PDP 
     sponsor must have, as part of the appeals process under 
     subsection (f)(2), a process for appeals for denials of 
     coverage based on such application of the formulary.
       ``(d) Cost and Utilization Management; Quality Assurance; 
     Medication Therapy Management Program.--
       ``(1) In general.--The PDP sponsor shall have in place--
       ``(A) an effective cost and drug utilization management 
     program, including appropriate incentives to use generic 
     drugs, when appropriate;
       ``(B) quality assurance measures and systems to reduce 
     medical errors and adverse drug interactions, including a 
     medication therapy management program described in paragraph 
     (2); and
       ``(C) a program to control fraud, abuse, and waste.
       ``(2) Medication therapy management program.--
       ``(A) In general.--A medication therapy management program 
     described in this paragraph is a program of drug therapy 
     management and medication administration that is designed to 
     assure that covered outpatient drugs under the prescription 
     drug plan are appropriately used to achieve therapeutic goals 
     and reduce the risk of adverse events, including adverse drug 
     interactions.
       ``(B) Elements.--Such program may include--
       ``(i) enhanced beneficiary understanding of such 
     appropriate use through beneficiary education, counseling, 
     and other appropriate means; and
       ``(ii) increased beneficiary adherence with prescription 
     medication regimens through medication refill reminders, 
     special packaging, and other appropriate means.
       ``(C) Development of program in cooperation with licensed 
     pharmacists.--The program shall be developed in cooperation 
     with licensed pharmacists and physicians.
       ``(D) Considerations in pharmacy fees.--The PDP sponsor of 
     a prescription drug program shall take into account, in 
     establishing fees for pharmacists and others providing 
     services under the medication therapy management program, the 
     resources and time used in implementing the program.
       ``(3) Treatment of accreditation.--Section 1852(e)(4) 
     (relating to treatment of accreditation) shall apply to 
     prescription drug plans under this part with respect to the 
     following requirements, in the same manner as they apply to 
     Medicare+Choice plans under part C with respect to the 
     requirements described in a clause of section 1852(e)(4)(B):
       ``(A) Paragraph (1) (including quality assurance), 
     including medication therapy management program under 
     paragraph (2).
       ``(B) Subsection (c)(1) (relating to access to covered 
     benefits).
       ``(C) Subsection (g) (relating to confidentiality and 
     accuracy of enrollee records).
       ``(4) Public disclosure of pharmaceutical prices for 
     generic equivalent drugs.--Each PDP sponsor shall provide 
     that each pharmacy or other dispenser that arranges for the 
     dispensing of a covered outpatient drug shall inform the 
     beneficiary at the time of purchase of the drug of any 
     differential between the price of the prescribed drug to the 
     enrollee and the price of the lowest cost generic drug that 
     is therapeutically and pharmaceutically equivalent and 
     bioequivalent.
       ``(e) Grievance Mechanism.--Each PDP sponsor shall provide 
     meaningful procedures for hearing and resolving grievances 
     between the organization (including any entity or individual 
     through which the sponsor provides covered benefits) and 
     enrollees with prescription drug plans of the sponsor under 
     this part in accordance with section 1852(f).
       ``(f) Coverage Determinations, Reconsiderations, and 
     Appeals.--
       ``(1) In general.--A PDP sponsor shall meet the 
     requirements of section 1852(g) with respect to covered 
     benefits under the prescription drug plan it offers under 
     this part in the same manner as such requirements apply to a 
     Medicare+Choice organization with respect to benefits it 
     offers under a Medicare+Choice plan under part C.
       ``(2) Appeals of formulary determinations.--Under the 
     appeals process under paragraph (1) an individual who is 
     enrolled in a prescription drug plan offered by a PDP sponsor 
     may appeal to obtain coverage for a covered outpatient drug 
     that is not on the formulary of the sponsor (established 
     under subsection (c)) if the prescribing physician determines 
     that the therapeutically similar drug that is on the 
     formulary is not as effective for the enrollee or has 
     significant adverse effects for the enrollee.
       ``(g) Confidentiality and Accuracy of Enrollee Records.--A 
     PDP sponsor shall meet the requirements of section 1852(h) 
     with respect to enrollees under this part in the same manner 
     as such requirements apply to a Medicare+Choice organization 
     with respect to enrollees under part C.

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

       ``(a) General Requirements.--Each PDP sponsor of a 
     prescription drug plan shall meet the following requirements:
       ``(1) Licensure.--Subject to subsection (c), the sponsor is 
     organized and licensed under State law as a risk-bearing 
     entity eligible to offer health insurance or health benefits 
     coverage in each State in which it offers a prescription drug 
     plan.
       ``(2) Assumption of full financial risk.--
       ``(A) In general.--Subject to subparagraph (B) and section 
     1860E(d)(2), the entity assumes full financial risk on a 
     prospective basis for qualified prescription drug coverage 
     that it offers under a prescription drug plan and that is not 
     covered under reinsurance under section 1860H.
       ``(B) Reinsurance permitted.--The entity may obtain 
     insurance or make other arrangements for the cost of coverage 
     provided to any enrolled member under this part.
       ``(3) Solvency for unlicensed sponsors.--In the case of a 
     sponsor that is not described in paragraph (1), the sponsor 
     shall meet solvency standards established by the Medicare 
     Benefits Administrator under subsection (d).
       ``(b) Contract Requirements.--
       ``(1) In general.--The Medicare Benefits Administrator 
     shall not permit the election under section 1860A of a 
     prescription drug plan offered by a PDP sponsor under this 
     part, and the sponsor shall not be eligible for payments 
     under section 1860G or 1860H, unless the Administrator has 
     entered into a contract under this subsection with the 
     sponsor with respect to the offering of such plan. Such a 
     contract with a sponsor may cover more than 1 prescription 
     drug plan. Such contract shall provide that the sponsor 
     agrees to comply with the applicable requirements and 
     standards of this part and the terms and conditions of 
     payment as provided for in this part.
       ``(2) Negotiation regarding terms and conditions.--The 
     Medicare Benefits Administrator shall have the same authority 
     to negotiate the terms and conditions of prescription drug 
     plans under this part as the Director of the Office of 
     Personnel Management has with respect to health benefits 
     plans under chapter 89 of title 5, United States Code. In 
     negotiating the terms and conditions regarding premiums for 
     which information is submitted under section 1860F(a)(2), the 
     Administrator shall take into account the reinsurance subsidy 
     payments under section 1860H and the adjusted community rate 
     (as defined in section 1854(f)(3)) for the benefits covered.
       ``(3) Incorporation of certain medicare+choice contract 
     requirements.--The following provisions of section 1857 shall 
     apply, subject to subsection (c)(5), to contracts under this 
     section in the same manner as they apply to contracts under 
     section 1857(a):
       ``(A) Minimum enrollment.--Paragraphs (1) and (3) of 
     section 1857(b).
       ``(B) Contract period and effectiveness.--Paragraphs (1) 
     through (3) and (5) of section 1857(c).
       ``(C) Protections against fraud and beneficiary 
     protections.--Section 1857(d).
       ``(D) Additional contract terms.--Section 1857(e); except 
     that in applying section 1857(e)(2) under this part--
       ``(i) such section shall be applied separately to costs 
     relating to this part (from costs under part C);
       ``(ii) in no case shall the amount of the fee established 
     under this subparagraph for a plan exceed 20 percent of the 
     maximum amount of the fee that may be established under 
     subparagraph (B) of such section; and
       ``(iii) no fees shall be applied under this subparagraph 
     with respect to Medicare+Choice plans.
       ``(E) Intermediate sanctions.--Section 1857(g).
       ``(F) Procedures for termination.--Section 1857(h).
       ``(4) Rules of application for intermediate sanctions.--In 
     applying paragraph (3)(E)--
       ``(A) the reference in section 1857(g)(1)(B) to section 
     1854 is deemed a reference to this part; and
       ``(B) the reference in section 1857(g)(1)(F) to section 
     1852(k)(2)(A)(ii) shall not be applied.
       ``(c) Waiver of Certain Requirements to Expand Choice.--
       ``(1) In general.--In the case of an entity that seeks to 
     offer a prescription drug plan in a State, the Medicare 
     Benefits Administrator shall waive the requirement of 
     subsection (a)(1) that

[[Page 12689]]

     the entity be licensed in that State if the Administrator 
     determines, based on the application and other evidence 
     presented to the Administrator, that any of the grounds for 
     approval of the application described in paragraph (2) has 
     been met.
       ``(2) Grounds for approval.--The grounds for approval under 
     this paragraph are the grounds for approval described in 
     subparagraph (B), (C), and (D) of section 1855(a)(2), and 
     also include the application by a State of any grounds other 
     than those required under Federal law.
       ``(3) Application of waiver procedures.--With respect to an 
     application for a waiver (or a waiver granted) under this 
     subsection, the provisions of subparagraphs (E), (F), and (G) 
     of section 1855(a)(2) shall apply.
       ``(4) Licensure does not substitute for or constitute 
     certification.--The fact that an entity is licensed in 
     accordance with subsection (a)(1) does not deem the entity to 
     meet other requirements imposed under this part for a PDP 
     sponsor.
       ``(5) References to certain provisions.--For purposes of 
     this subsection, in applying provisions of section 1855(a)(2) 
     under this subsection to prescription drug plans and PDP 
     sponsors--
       ``(A) any reference to a waiver application under section 
     1855 shall be treated as a reference to a waiver application 
     under paragraph (1); and
       ``(B) any reference to solvency standards shall be treated 
     as a reference to solvency standards established under 
     subsection (d).
       ``(d) Solvency Standards for Non-Licensed Sponsors.--
       ``(1) Establishment.--The Medicare Benefits Administrator 
     shall establish, by not later than October 1, 2001, financial 
     solvency and capital adequacy standards that an entity that 
     does not meet the requirements of subsection (a)(1) must meet 
     to qualify as a PDP sponsor under this part.
       ``(2) Compliance with standards.--Each PDP sponsor that is 
     not licensed by a State under subsection (a)(1) and for which 
     a waiver application has been approved under subsection (c) 
     shall meet solvency and capital adequacy standards 
     established under paragraph (1). The Medicare Benefits 
     Administrator shall establish certification procedures for 
     such PDP sponsors with respect to such solvency standards in 
     the manner described in section 1855(c)(2).
       ``(e) Other Standards.--The Medicare Benefits Administrator 
     shall establish by regulation other standards (not described 
     in subsection (d)) for PDP sponsors and plans consistent 
     with, and to carry out, this part. The Administrator shall 
     publish such regulations by October 1, 2001. In order to 
     carry out this requirement in a timely manner, the 
     Administrator may promulgate regulations that take effect on 
     an interim basis, after notice and pending opportunity for 
     public comment.
       ``(f) Relation to State Laws.--
       ``(1) In general.--The standards established under this 
     section shall supersede any State law or regulation 
     (including standards described in paragraph (2)) with respect 
     to prescription drug plans which are offered by PDP sponsors 
     under this part to the extent such law or regulation is 
     inconsistent with such standards.
       ``(2) Standards specifically superseded.--State standards 
     relating to the following are superseded under this 
     subsection:
       ``(A) Benefit requirements.
       ``(B) Requirements relating to inclusion or treatment of 
     providers.
       ``(C) Coverage determinations (including related appeals 
     and grievance processes).
       ``(D) Establishment and regulation of premiums.
       ``(3) Prohibition of state imposition of premium taxes.--No 
     State may impose a premium tax or similar tax with respect to 
     premiums paid to PDP sponsors for prescription drug plans 
     under this part, or with respect to any payments made to such 
     a sponsor by the Medicare Benefits Administrator under this 
     part.

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

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

     ``SEC. 1860F. PREMIUMS.

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

[[Page 12690]]



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

       ``(a) In General.--
       ``(1) Full premium subsidy and reduction of cost-sharing 
     for individuals with income below 135 percent of federal 
     poverty level.--In the case of a subsidy eligible individual 
     (as defined in paragraph (3)) who is determined to have 
     income that does not exceed 135 percent of the Federal 
     poverty level, the individual is entitled under this 
     section--
       ``(A) to a premium subsidy equal to 100 percent of the 
     amount described in subsection (b)(1); and
       ``(B) subject to subsection (c), to the substitution for 
     the beneficiary cost-sharing described in paragraphs (1) and 
     (2) of section 1860B(b) (up to the initial coverage limit 
     specified in paragraph (3) of such section) of amounts that 
     are nominal.
       ``(2) Sliding scale premium subsidy for individuals with 
     income above 135, but below 150 percent, of federal poverty 
     level.--In the case of a subsidy eligible individual who is 
     determined to have income that exceeds 135 percent, but does 
     not exceed 150 percent, of the Federal poverty level, the 
     individual is entitled under this section to a premium 
     subsidy determined on a linear sliding scale ranging from 100 
     percent of the amount described in subsection (b)(1) for 
     individuals with incomes at 135 percent of such level to 0 
     percent of such amount for individuals with incomes at 150 
     percent of such level.
       ``(3) Determination of eligibility.--
       ``(A) Subsidy eligible individual defined.--For purposes of 
     this section, subject to subparagraph (D), the term `subsidy 
     eligible individual' means an individual who--
       ``(i) is eligible to elect, and has elected, to obtain 
     qualified prescription drug coverage under this part;
       ``(ii) has income below 150 percent of the Federal poverty 
     line; and
       ``(iii) meets the resources requirement described in 
     section 1905(p)(1)(C).
       ``(B) Determinations.--The determination of whether an 
     individual residing in a State is a subsidy eligible 
     individual and the amount of such individual's income shall 
     be determined under the State medicaid plan for the State 
     under section 1935(a). In the case of a State that does not 
     operate such a medicaid plan (either under title XIX or under 
     a statewide waiver granted under section 1115), such 
     determination shall be made under arrangements made by the 
     Medicare Benefits Administrator.
       ``(C) Income determinations.--For purposes of applying this 
     section--
       ``(i) income shall be determined in the manner described in 
     section 1905(p)(1)(B); and
       ``(ii) the term `Federal poverty line' means the official 
     poverty line (as defined by the Office of Management and 
     Budget, and revised annually in accordance with section 
     673(2) of the Omnibus Budget Reconciliation Act of 1981) 
     applicable to a family of the size involved.
       ``(D) Treatment of territorial residents.--In the case of 
     an individual who is not a resident of the 50 States or the 
     District of Columbia, the individual is not eligible to be a 
     subsidy eligible individual but may be eligible for financial 
     assistance with prescription drug expenses under section 
     1935(e).
       ``(b) Premium Subsidy Amount.--
       ``(1) In general.--The premium subsidy amount described in 
     this subsection for an individual residing in an area is the 
     reference premium (as defined in paragraph (2)) for qualified 
     prescription drug coverage offered by the prescription drug 
     plan or the Medicare+Choice plan in which the individual is 
     enrolled.
       ``(2) Reference premium defined.--For purposes of this 
     subsection, the term `reference premium' means, with respect 
     to qualified prescription drug coverage offered under--
       ``(A) a prescription drug plan that--
       ``(i) provides standard coverage (or alternative 
     prescription drug coverage the actuarial value is equivalent 
     to that of standard coverage), the premium imposed for 
     enrollment under the plan under this part (determined without 
     regard to any subsidy under this section or any late 
     enrollment penalty under section 1860A(c)(2)(B)); or
       ``(ii) provides alternative prescription drug coverage the 
     actuarial value of which is greater than that of standard 
     coverage, the premium described in clause (i) multiplied by 
     the ratio of (I) the actuarial value of standard coverage, to 
     (II) the actuarial value of the alternative coverage; or
       ``(B) a Medicare+Choice plan, the standard premium computed 
     under section 1851(j)(5)(A)(iii), determined without regard 
     to any reduction effected under section 1851(j)(5)(B).
       ``(c) Rules in Applying Cost-Sharing Subsidies.--
       ``(1) In general.--In applying subsection (a)(1)(B)--
       ``(A) the maximum amount of subsidy that may be provided 
     with respect to an enrollee for a year may not exceed 95 
     percent of the maximum cost-sharing described in such 
     subsection that may be incurred for standard coverage;
       ``(B) the Medicare Benefits Administrator shall determine 
     what is `nominal' taking into account the rules applied under 
     section 1916(a)(3); and
       ``(C) nothing in this part shall be construed as preventing 
     a plan or provider from waiving or reducing the amount of 
     cost-sharing otherwise applicable.
       ``(2) Limitation on charges.--In the case of an individual 
     receiving cost-sharing subsidies under subsection (a)(1)(B), 
     the PDP sponsor may not charge more than a nominal amount in 
     cases in which the cost-sharing subsidy is provided under 
     such subsection.
       ``(d) Administration of Subsidy Program.--The Medicare 
     Benefits Administrator shall provide a process whereby, in 
     the case of an individual who is determined to be a subsidy 
     eligible individual and who is enrolled in prescription drug 
     plan or is enrolled in a Medicare+Choice plan under which 
     qualified prescription drug coverage is provided--
       ``(1) the Administrator provides for a notification of the 
     PDP sponsor or Medicare+Choice organization involved that the 
     individual is eligible for a subsidy and the amount of the 
     subsidy under subsection (a);
       ``(2) the sponsor or organization involved reduces the 
     premiums or cost-sharing otherwise imposed by the amount of 
     the applicable subsidy and submits to the Administrator 
     information on the amount of such reduction; and
       ``(3) the Administrator periodically and on a timely basis 
     reimburses the sponsor or organization for the amount of such 
     reductions.

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

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

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

     This section constitutes budget authority in advance of 
     appropriations Acts and represents the obligation of the 
     Administrator to provide for the payment of amounts provided 
     under this section.
       ``(b) Qualifying Entity Defined.--For purposes of this 
     section, the term `qualifying entity' means any of the 
     following that has entered into an agreement with the 
     Administrator to provide the Administrator with such 
     information as may be required to carry out this section:
       ``(1) A PDP sponsor offering a prescription drug plan under 
     this part.
       ``(2) A Medicare+Choice organization that provides 
     qualified prescription drug coverage under a Medicare+Choice 
     plan under part C.
       ``(3) The sponsor of a qualified retiree prescription drug 
     plan (as defined in subsection (f)).
       ``(c) Reinsurance Payment Amount.--
       ``(1) In general.--Subject to subsection (d)(2) and 
     paragraph (4), the reinsurance payment amount under this 
     subsection for a qualifying covered individual (as defined in 
     subsection (g)(1)) for a coverage year (as defined in 
     subsection (g)(2)) is equal to the sum of the following:
       ``(A) For the portion of the individual's gross covered 
     prescription drug costs (as defined in paragraph (3)) for the 
     year that exceeds $1,250, but does not exceed $1,350, an 
     amount equal to 30 percent of the allowable costs (as defined 
     in paragraph (2)) attributable to such gross covered 
     prescription drug costs.
       ``(B) For the portion of the individual's gross covered 
     prescription drug costs for the year that exceeds $1,350, but 
     does not exceed $1,450, an amount equal to 50 percent of the 
     allowable costs attributable to such gross covered 
     prescription drug costs.
       ``(C) For the portion of the individual's gross covered 
     prescription drug costs for the year that exceeds $1,450, but 
     does not exceed $1,550, an amount equal to 70 percent of the 
     allowable costs attributable to such gross covered 
     prescription drug costs.
       ``(D) For the portion of the individual's gross covered 
     prescription drug costs for the year that exceeds $1,550, but 
     does not exceed $2,350, an amount equal to 90 percent of the 
     allowable costs attributable to such gross covered 
     prescription drug costs.
       ``(E) For the portion of the individual's gross covered 
     prescription drug costs for the year that exceeds $7,050, an 
     amount equal to 90 percent of the allowable costs 
     attributable to such gross covered prescription drug costs.
       ``(2) Allowable costs.--For purposes of this section, the 
     term `allowable costs' means, with

[[Page 12691]]

     respect to gross covered prescription drug costs under a plan 
     described in subsection (b) offered by a qualifying entity, 
     the part of such costs that are actually paid under the plan, 
     but in no case more than the part of such costs that would 
     have been paid under the plan if the prescription drug 
     coverage under the plan were standard coverage.
       ``(3) Gross covered prescription drug costs.--For purposes 
     of this section, the term `gross covered prescription drug 
     costs' means, with respect to an enrollee with a qualifying 
     entity under a plan described in subsection (b) during a 
     coverage year, the costs incurred under the plan for covered 
     prescription drugs dispensed during the year, including costs 
     relating to the deductible, whether paid by the enrollee or 
     under the plan, regardless of whether the coverage under the 
     plan exceeds standard coverage and regardless of when the 
     payment for such drugs is made.
       ``(4) Indexing dollar amounts.--
       ``(A) Amounts for 2003.--The dollar amounts applied under 
     paragraph (1) for 2003 shall be the dollar amounts specified 
     in such paragraph.
       ``(B) For 2004.--The dollar amounts applied under paragraph 
     (1) for 2004 shall be the dollar amounts specified in such 
     paragraph increased by the annual percentage increase 
     described in section 1860B(b)(5) for 2004.
       ``(C) For subsequent years.--The dollar amounts applied 
     under paragraph (1) for a year after 2004 shall be the 
     amounts (under this paragraph) applied under paragraph (1) 
     for the preceding year increased by the annual percentage 
     increase described in section 1860B(b)(5) for the year 
     involved.
       ``(D) Rounding.--Any amount, determined under the preceding 
     provisions of this paragraph for a year, which is not a 
     multiple of $5 shall be rounded to the nearest multiple of 
     $5.
       ``(d) Adjustment of Payments.--
       ``(1) In general.--The Medicare Benefits Administrator 
     shall estimate--
       ``(A) the total payments to be made (without regard to this 
     subsection) during a year under this section; and
       ``(B) the total payments to be made by qualifying entities 
     for standard coverage under plans described in subsection (b) 
     during the year.
       ``(2) Adjustment of payments.--The Administrator shall 
     proportionally adjust the payments made under this section 
     for a coverage year in such manner so that the total of the 
     payments made for the year under this section is equal to 35 
     percent of the total payments described in paragraph (1)(B) 
     during the year.
       ``(e) Payment Methods.--
       ``(1) In general.--Payments under this section shall be 
     based on such a method as the Medicare Benefits Administrator 
     determines. The Administrator may establish a payment method 
     by which interim payments of amounts under this section are 
     made during a year based on the Administrator's best estimate 
     of amounts that will be payable after obtaining all of the 
     information.
       ``(2) Source of payments.--Payments under this section 
     shall be made from the Medicare Prescription Drug Account.
       ``(f) Qualified Retiree Prescription Drug Plan Defined.--
       ``(1) In general.--For purposes of this section, the term 
     `qualified retiree prescription drug plan' means employment-
     based retiree health coverage (as defined in paragraph 
     (3)(A)) if, with respect to an individual enrolled (or 
     eligible to be enrolled) under this part who is covered under 
     the plan, the following requirements are met:
       ``(A) Assurance.--The sponsor of the plan shall annually 
     attest, and provide such assurances as the Medicare Benefits 
     Administrator may require, that the coverage meets the 
     requirements for qualified prescription drug coverage.
       ``(B) Audits.--The sponsor (and the plan) shall maintain, 
     and afford the Medicare Benefits Administrator access to, 
     such records as the Administrator may require for purposes of 
     audits and other oversight activities necessary to ensure the 
     adequacy of prescription drug coverage, the accuracy of 
     payments made, and such other matters as may be appropriate.
       ``(C) Provision of certification of prescription drug 
     coverage.--The sponsor of the plan shall provide for issuance 
     of certifications of the type described in section 
     1860A(c)(2)(D).
       ``(D) Other requirements.--The sponsor of the plan shall 
     comply with such other requirements as the Medicare Benefits 
     Administrator finds necessary to administer the program under 
     this section.
       ``(2) Limitation on benefit eligibility.--No payment shall 
     be provided under this section with respect to an individual 
     who is enrolled under a qualified retiree prescription drug 
     plan unless the individual is a medicare primary individual 
     who--
       ``(A) is covered under the plan; and
       ``(B) is eligible to obtain qualified prescription drug 
     coverage under section 1860A but did not elect such coverage 
     under this part (either through a prescription drug plan or 
     through a Medicare+Choice plan).
       ``(3) Definitions.--As used in this section:
       ``(A) Employment-based retiree health coverage.--The term 
     `employment-based retiree health coverage' means health 
     insurance or other coverage of health care costs for medicare 
     primary individuals (or for such individuals and their 
     spouses and dependents) based on their status as former 
     employees or labor union members.
       ``(B) Employer.--The term `employer' has the meaning given 
     such term by section 3(5) of the Employee Retirement Income 
     Security Act of 1974 (except that such term shall include 
     only employers of two or more employees).
       ``(C) Sponsor.--The term `sponsor' means a plan sponsor, as 
     defined in section 3(16)(B) of the Employee Retirement Income 
     Security Act of 1974.
       ``(D) Medicare primary individual.--The term `medicare 
     primary individual' means, with respect to a plan, an 
     individual who is covered under the plan and with respect to 
     whom the plan is not a primary plan (as defined in section 
     1862(b)(2)(A)).
       ``(g) General Definitions.--For purposes of this section:
       ``(1) Qualifying covered individual.--The term `qualifying 
     covered individual' means an individual who--
       ``(A) is enrolled with a prescription drug plan under this 
     part;
       ``(B) is enrolled with a Medicare+Choice plan that provides 
     qualified prescription drug coverage under part C; or
       ``(C) is covered as a medicare primary individual under a 
     qualified retiree prescription drug plan.
       ``(2) Coverage year.--The term `coverage year' means a 
     calendar year in which covered outpatient drugs are dispensed 
     if a claim for payment is made under the plan for such drugs, 
     regardless of when the claim is paid.

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

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

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

       ``(a) Definitions.--For purposes of this part:
       ``(1) Covered outpatient drugs.--The term `covered 
     outpatient drugs' is defined in section 1860B(f).
       ``(2) Initial coverage limit.--The term `initial coverage 
     limit' means the such limit as established under section 
     1860B(b)(3), or, in the case of coverage that is not standard 
     coverage, the comparable limit (if any) established under the 
     coverage.
       ``(3) Medicare prescription drug account.--The term 
     `Medicare Prescription Drug Account' means the Account in the 
     Federal Supplementary Medical Insurance Trust Fund created 
     under section 1860I(a).
       ``(4) PDP sponsor.--The term `PDP sponsor' means an entity 
     that is certified under this part as meeting the requirements 
     and standards of this part for such a sponsor.
       ``(5) Prescription drug plan.--The term `prescription drug 
     plan' means health benefits coverage that--
       ``(A) is offered under a policy, contract, or plan by a PDP 
     sponsor pursuant to, and in accordance with, a contract 
     between the Medicare Benefits Administrator and the sponsor 
     under section 1860D(b);
       ``(B) provides qualified prescription drug coverage; and
       ``(C) meets the applicable requirements of the section 
     1860C for a prescription drug plan.
       ``(6) Qualified prescription drug coverage.--The term 
     `qualified prescription drug coverage' is defined in section 
     1860B(a).
       ``(7) Standard coverage.--The term `standard coverage' is 
     defined in section 1860B(b).

[[Page 12692]]

       ``(b) Application of Medicare+Choice Provisions Under This 
     Part.--For purposes of applying provisions of part C under 
     this part with respect to a prescription drug plan and a PDP 
     sponsor, unless otherwise provided in this part such 
     provisions shall be applied as if--
       ``(1) any reference to a Medicare+Choice plan included a 
     reference to a prescription drug plan;
       ``(2) any reference to a provider-sponsored organization 
     included a reference to a PDP sponsor;
       ``(3) any reference to a contract under section 1857 
     included a reference to a contract under section 1860D(b); 
     and
       ``(4) any reference to part C included a reference to this 
     part.''.
       (b) Conforming Amendments to Federal Supplementary Medical 
     Insurance Trust Fund.--Section 1841 of the Social Security 
     Act (42 U.S.C. 1395t) is amended--
       (1) in the last sentence of subsection (a)--
       (A) by striking ``and'' before ``such amounts'', and
       (B) by inserting before the period the following: ``and 
     such amounts as may be deposited in, or appropriated to, the 
     Medicare Prescription Drug Account established by section 
     1860I''; and
       (2) in subsection (g), by inserting after ``by this part,'' 
     the following: ``the payments provided for under part D (in 
     which case the payments shall come from the Medicare 
     Prescription Drug Account in the Trust Fund),''.
       (c) Additional Conforming Changes.--
       (1) Conforming references to previous part d.--Any 
     reference in law (in effect before the date of the enactment 
     of this Act) to part D of title XVIII of the Social Security 
     Act is deemed a reference to part E of such title (as in 
     effect after such date).
       (2) Secretarial submission of legislative proposal.--Not 
     later than 6 months after the date of the enactment of this 
     Act, the Secretary of Health and Human Services shall submit 
     to the appropriate committees of Congress a legislative 
     proposal providing for such technical and conforming 
     amendments in the law as are required by the provisions of 
     this subtitle.

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

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

     The premium under clause (i) shall be compute without regard 
     to any reduction in the premium permitted under subparagraph 
     (B).
       ``(B) Reduction of premiums allowed.--Nothing in this 
     subsection shall be construed as preventing a Medicare+Choice 
     organization from reducing the amount of a premium charged 
     for prescription drug coverage because of the application of 
     section 1854(f)(1)(A) to other coverage.
       ``(C) Acceptance of reference premium as full premium if no 
     standard (or equivalent) coverage in an area.--For 
     requirement to accept reference premium as full premium if 
     there is no standard (or equivalent) coverage in the area of 
     a Medicare+Choice plan, see section 1860F(d).
       ``(6) Transition in initial enrollment period.--
     Notwithstanding any other provision of this part, the annual, 
     coordinated election period under subsection (e)(3)(B) for 
     2003 shall be the 6-month period beginning with November 
     2002.
       ``(7) Qualified prescription drug coverage; standard 
     coverage.--For purposes of this part, the terms `qualified 
     prescription drug coverage' and `standard coverage' have the 
     meanings given such terms in section 1860B.''.
       (b) Conforming Amendments.--Section 1851 of such Act (42 
     U.S.C. 1395w-21) is amended--
       (1) in subsection (a)(1)--
       (A) by inserting ``(other than qualified prescription drug 
     benefits)'' after ``benefits'';
       (B) by striking the period at the end of subparagraph (B) 
     and inserting a comma; and
       (C) by adding after and below subparagraph (B) the 
     following:
     ``and may elect qualified prescription drug coverage in 
     accordance with section 1860A.''; and
       (2) in subsection (g)(1), by inserting ``and section 
     1860A(c)(2)(B)'' after ``in this subsection''.
       (c) Effective Date.--The amendments made by this section 
     apply to coverage provided on or after January 1, 2003.

     SEC. 103. MEDICAID AMENDMENTS.

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


  ``special provisions relating to medicare prescription drug benefit

       ``Sec. 1935. (a) Requirement for Making Eligibility 
     Determinations for Low-Income Subsidies.--As a condition of 
     its State plan under this title under section 1902(a)(66) and 
     receipt of any Federal financial assistance under section 
     1903(a), a State shall--
       ``(1) make determinations of eligibility for premium and 
     cost-sharing subsidies under (and in accordance with) section 
     1860G;
       ``(2) inform the Administrator of the Medicare Benefits 
     Administration of such determinations in cases in which such 
     eligibility is established; and
       ``(3) otherwise provide such Administrator with such 
     information as may be required to carry out part D of title 
     XVIII (including section 1860G).
       ``(b) Payments for Additional Administrative Costs.--
       ``(1) In general.--The amounts expended by a State in 
     carrying out subsection (a) are, subject to paragraph (2), 
     expenditures reimbursable under the appropriate paragraph of 
     section 1903(a); except that, notwithstanding any other 
     provision of such section, the applicable Federal matching 
     rates with respect to such expenditures under such section 
     shall be increased as follows:
       ``(A) For expenditures attributable to costs incurred 
     during 2003, the otherwise applicable Federal matching rate 
     shall be increased by 20 percent of the percentage otherwise 
     payable (but for this subsection) by the State.
       ``(B) For expenditures attributable to costs incurred 
     during 2004, the otherwise applicable Federal matching rate 
     shall be increased by 40 percent of the percentage otherwise 
     payable (but for this subsection) by the State.
       ``(C) For expenditures attributable to costs incurred 
     during 2005, the otherwise applicable Federal matching rate 
     shall be increased by 60 percent of the percentage otherwise 
     payable (but for this subsection) by the State.
       ``(D) For expenditures attributable to costs incurred 
     during 2006, the otherwise applicable Federal matching rate 
     shall be increased by 80 percent of the percentage otherwise 
     payable (but for this subsection) by the State.
       ``(E) For expenditures attributable to costs incurred after 
     2006, the otherwise applicable Federal matching rate shall be 
     increased to 100 percent.
       ``(2) Coordination.--The State shall provide the Secretary 
     with such information as may be necessary to properly 
     allocate administrative expenditures described in paragraph 
     (1) that may otherwise be made for similar eligibility 
     determinations.''.
       (b) Phased-In Federal Assumption of Medicaid Responsibility 
     for Premium and Cost-Sharing Subsidies for Dually Eligible 
     Individuals.--
       (1) In general.--Section 1903(a)(1) of the Social Security 
     Act (42 U.S.C. 1396b(a)(1)) is amended by inserting before 
     the semicolon the following: ``, reduced by the amount 
     computed under section 1935(c)(1) for the State and the 
     quarter''.

[[Page 12693]]

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

     SEC. 104. MEDIGAP TRANSITION PROVISIONS.

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

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

     SEC. 105. STATE PHARMACEUTICAL ASSISTANCE TRANSITION 
                   COMMISSION.

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

[[Page 12694]]

       (f) Termination.--The Commission shall terminate 30 days 
     after the date of submission of the report under subsection 
     (d).

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

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

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

         TITLE II--MODERNIZATION OF ADMINISTRATION OF MEDICARE

              Subtitle A--Medicare Benefits Administration

     SEC. 201. ESTABLISHMENT OF ADMINISTRATION.

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


                   ``medicare benefits administration

       ``Sec. 1807. (a) Establishment.--There is established 
     within the Department of Health and Human Services an agency 
     to be known as the Medicare Benefits Administration.
       ``(b) Administrator and Deputy Administrator.--
       ``(1) Administrator.--
       ``(A) In general.--The Medicare Benefits Administration 
     shall be headed by an Administrator (in this section referred 
     to as the `Administrator') who shall be appointed by the 
     President, by and with the advice and consent of the Senate. 
     The Administrator shall be in direct line of authority to the 
     Secretary.
       ``(B) Compensation.--The Administrator shall be paid at the 
     rate of basic pay payable for level III of the Executive 
     Schedule under section 5314 of title 5, United States Code.
       ``(C) Term of office.--The Administrator shall be appointed 
     for a term of 5 years. In any case in which a successor does 
     not take office at the end of an Administrator's term of 
     office, that Administrator may continue in office until the 
     entry upon office of such a successor. An Administrator 
     appointed to a term of office after the commencement of such 
     term may serve under such appointment only for the remainder 
     of such term.
       ``(D) General Authority.--The Administrator shall be 
     responsible for the exercise of all powers and the discharge 
     of all duties of the Administration, and shall have authority 
     and control over all personnel and activities thereof.
       ``(E) Rulemaking authority.--The Administrator may 
     prescribe such rules and regulations as the Administrator 
     determines necessary or appropriate to carry out the 
     functions of the Administration. The regulations prescribed 
     by the Administrator shall be subject to the rulemaking 
     procedures established under section 553 of title 5, United 
     States Code.
       ``(F) Authority to establish organizational units.--The 
     Administrator may establish, alter, consolidate, or 
     discontinue such organizational units or components within 
     the Administration as the Administrator considers necessary 
     or appropriate, except that this subparagraph shall not apply 
     with respect to any unit, component, or provision provided 
     for by this section.
       ``(G) Authority to delegate.--The Administrator may assign 
     duties, and delegate, or authorize successive redelegations 
     of, authority to act and to render decisions, to such 
     officers and employees of the Administration as the 
     Administrator may find necessary. Within the limitations of 
     such delegations, redelegations, or assignments, all official 
     acts and decisions of such officers and employees shall have 
     the same force and effect as though performed or rendered by 
     the Administrator.
       ``(2) Deputy administrator.--
       ``(A) In general.--There shall be a Deputy Administrator of 
     the Medicare Benefits Administration who shall be appointed 
     by the President, by and with the advice and consent of the 
     Senate.
       ``(B) Compensation.--The Deputy Administrator shall be paid 
     at the rate of basic pay payable for level IV of the 
     Executive Schedule under section 5315 of title 5, United 
     States Code.
       ``(C) Term of office.--The Deputy Administrator shall be 
     appointed for a term of 5 years. In any case in which a 
     successor does not take office at the end of a Deputy 
     Administrator's term of office, such Deputy Administrator may 
     continue in office until the entry upon office of such a 
     successor. A Deputy Administrator appointed to a term of 
     office after the commencement of such term may serve under 
     such appointment only for the remainder of such term.
       ``(D) Duties.--The Deputy Administrator shall perform such 
     duties and exercise such powers as the Administrator shall 
     from time to time assign or delegate. The Deputy 
     Administrator shall be Acting Administrator of the 
     Administration during the absence or disability of the 
     Administrator and, unless the President designates another 
     officer of the Government as Acting Administrator, in the 
     event of a vacancy in the office of the Administrator.
       ``(3) Secretarial coordination of program administration.--
     The Secretary shall ensure appropriate coordination between 
     the Administrator and the Administrator of the Health Care 
     Financing Administration in carrying out the programs under 
     this title.
       ``(c) Duties; Administrative Provisions.--
       ``(1) Duties.--
       ``(A) General duties.--The Administrator shall carry out 
     parts C and D, including--
       ``(i) negotiating, entering into, and enforcing, contracts 
     with plans for the offering of Medicare+Choice plans under 
     part C, including the offering of qualified prescription drug 
     coverage under such plans; and
       ``(ii) negotiating, entering into, and enforcing, contracts 
     with PDP sponsors for the offering of prescription drug plans 
     under part D.
       ``(B) Other duties.--The Administrator shall carry out any 
     duty provided for under part C or part D, including 
     demonstration projects carried out in part or in whole under 
     such parts, the programs of all-inclusive care for the 
     elderly (PACE program) under section 1894, the social health 
     maintenance organization (SHMO) demonstration projects 
     (referred to in section 4104(c) of the Balanced Budget Act of 
     1997), and through a Medicare+Choice project that 
     demonstrates the application of capitation payment rates for 
     frail elderly medicare beneficiaries through the use of a 
     interdisciplinary team and through the provision of primary 
     care services to such beneficiaries by means of such a team 
     at the nursing facility involved).
       ``(C) Noninterference.--In carrying out its duties with 
     respect to the provision of qualified prescription drug 
     coverage to beneficiaries under this title, the Administrator 
     may not--
       ``(i) require a particular formulary or institute a price 
     structure for the reimbursement of covered outpatient drugs;
       ``(ii) interfere in any way with negotiations between PDP 
     sponsors and Medicare+Choice organizations and drug 
     manufacturers, wholesalers, or other suppliers of covered 
     outpatient drugs; and
       ``(iii) otherwise interfere with the competitive nature of 
     providing such coverage through such sponsors and 
     organizations.
       ``(D) Annual reports.--Not later March 31 of each year, the 
     Administrator shall submit to Congress and the President a 
     report on the administration of parts C and D during the 
     previous fiscal year.
       ``(2) Staff.--

[[Page 12695]]

       ``(A) In general.--The Administrator, with the approval of 
     the Secretary, may employ, without regard to chapter 31 of 
     title 5, United States Code, such officers and employees as 
     are necessary to administer the activities to be carried out 
     through the Medicare Benefits Administration.
       ``(B) Flexibility with respect to compensation.--
       ``(i) In general.--The staff of the Medicare Benefits 
     Administration shall, subject to clause (ii), be paid without 
     regard to the provisions of chapter 51 and chapter 53 of such 
     title (relating to classification and schedule pay rates).
       ``(ii) Maximum rate.--In no case may the rate of 
     compensation determined under clause (i) exceed the rate of 
     basic pay payable for level IV of the Executive Schedule 
     under section 5315 of title 5, United States Code.
       ``(C) Limitation on full-time equivalent staffing for 
     current hcfa functions being transferred.--The Administrator 
     may not employ under this paragraph a number of full-time 
     equivalent employees, to carry out functions that were 
     previously conducted by the Health Care Financing 
     Administration and that are conducted by the Administrator by 
     reason of this section, that exceeds the number of such full-
     time equivalent employees authorized to be employed by the 
     Health Care Financing Administration to conduct such 
     functions as of the date of the enactment of this Act.
       ``(3) Redelegation of certain functions of the health care 
     financing administration.--
       ``(A) In general.--The Secretary, the Administrator, and 
     the Administrator of the Health Care Financing Administration 
     shall establish an appropriate transition of responsibility 
     in order to redelegate the administration of part C from the 
     Secretary and the Administrator of the Health Care Financing 
     Administration to the Administrator as is appropriate to 
     carry out the purposes of this section.
       ``(B) Transfer of data and information.--The Secretary 
     shall ensure that the Administrator of the Health Care 
     Financing Administration transfers to the Administrator of 
     the Medicare Benefits Administration such information and 
     data in the possession of the Administrator of the Health 
     Care Financing Administration as the Administrator of the 
     Medicare Benefits Administration requires to carry out the 
     duties described in paragraph (1).
       ``(C) Construction.--Insofar as a responsibility of the 
     Secretary or the Administrator of the Health Care Financing 
     Administration is redelegated to the Administrator under this 
     section, any reference to the Secretary or the Administrator 
     of the Health Care Financing Administration in this title or 
     title XI with respect to such responsibility is deemed to be 
     a reference to the Administrator.
       ``(d) Office of Beneficiary Assistance.--
       ``(1) Establishment.--The Secretary shall establish within 
     the Medicare Benefits Administration an Office of Beneficiary 
     Assistance to carry out functions relating to medicare 
     beneficiaries under this title, including making 
     determinations of eligibility of individuals for benefits 
     under this title, providing for enrollment of medicare 
     beneficiaries under this title, and the functions described 
     in paragraph (2). The Office shall be separate operating 
     division within the Administration.
       ``(2) Dissemination of information on benefits and appeals 
     rights.--
       ``(A) Dissemination of benefits information.--The Office of 
     Beneficiary Assistance shall disseminate to medicare 
     beneficiaries, by mail, by posting on the Internet site of 
     the Medicare Benefits Administration and through the toll-
     free telephone number provided for under section 1804(b), 
     information with respect to the following:
       ``(i) Benefits, and limitations on payment (including cost-
     sharing, stop-loss provisions, and formulary restrictions) 
     under parts C and D.
       ``(ii) Benefits, and limitations on payment under parts A 
     and B, including information on medicare supplemental 
     policies under section 1882.

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

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

       ``(iii) submit annual reports to Congress, the Secretary, 
     and the Medicare Policy Advisory Board describing the 
     activities of the Office, and including such recommendations 
     for improvement in the administration of this title as the 
     Ombudsman determines appropriate.
       ``(C) Coordination with state ombudsman programs and 
     consumer organizations.--The Medicare Ombudsman shall, to the 
     extent appropriate, coordinate with State medical Ombudsman 
     programs, and with State- and community-based consumer 
     organizations, to--
       ``(i) provide information about the medicare program; and
       ``(ii) conduct outreach to educate medicare beneficiaries 
     with respect to manners in which problems under the medicare 
     program may be resolved or avoided.
       ``(e) Medicare Policy Advisory Board.--
       ``(1) Establishment.--There is established within the 
     Medicare Benefits Administration the Medicare Policy Advisory 
     Board (in this section referred to the `Board'). The Board 
     shall advise, consult with, and make recommendations to the 
     Administrator of the Medicare Benefits Administration with 
     respect to the administration of parts C and D, including the 
     review of payment policies under such parts.
       ``(2) Reports.--
       ``(A) In general.--With respect to matters of the 
     administration of parts C and D, the Board shall submit to 
     Congress and to the Administrator of the Medicare Benefits 
     Administration such reports as the Board determines 
     appropriate. Each such report may contain such 
     recommendations as the Board determines appropriate for 
     legislative or administrative changes to improve the 
     administration of such parts, including the topics described 
     in subparagraph (B). Each such report shall be published in 
     the Federal Register.
       ``(B) Topics described.--Reports required under 
     subparagraph (A) may include the following topics:
       ``(i) Fostering competition.--Recommendations or proposals 
     to increase competition under parts C and D for services 
     furnished to medicare beneficiaries.
       ``(ii) Education and enrollment.--Recommendations for the 
     improvement to efforts to provide medicare beneficiaries 
     information and education on the program under this title, 
     and specifically parts C and D, and the program for 
     enrollment under the title.
       ``(iii) Implementation of risk-adjustment.--Evaluation of 
     the implementation under section 1853(a)(3)(C) of the risk 
     adjustment methodology to payment rates under that section to 
     Medicare+Choice organizations offering Medicare+Choice plans 
     that accounts for variations in per capita costs based on 
     health status and other demographic factors.
       ``(iv) Disease management programs.--Recommendations on the 
     incorporation of disease management programs under parts C 
     and D.
       ``(v) Rural access.--Recommendations to improve competition 
     and access to plans under parts C and D in rural areas.
       ``(C) Maintaining independence of board.--The Board shall 
     directly submit to Congress reports required under 
     subparagraph (A). No officer or agency of the United States 
     may require the Board to submit to any officer or agency of 
     the United States for approval, comments, or review, prior to 
     the submission to Congress of such reports.
       ``(3) Duty of administrator of medicare benefits 
     administration.--With respect to any report submitted by the 
     Board under paragraph (2)(A), not later than 90 days after 
     the report is submitted, the Administrator of the Medicare 
     Benefits Administration shall submit to Congress and the 
     President an analysis of recommendations made by the Board in 
     such report. Each such analysis shall be published in the 
     Federal Register.
       ``(4) Membership.--
       ``(A) Appointment.--Subject to the succeeding provisions of 
     this paragraph, the Board shall consist of 7 members to be 
     appointed as follows:
       ``(i) 3 members shall be appointed by the President.
       ``(ii) 2 members shall be appointed by the Speaker of the 
     House of Representatives, with the advice of the chairman and 
     the ranking minority member of the Committees on Ways and 
     Means and on Commerce of the House of Representatives.
       ``(iii) 2 members shall be appointed by the President pro 
     tempore of the Senate with the advice of the chairman and the 
     ranking minority member of the Senate Committee on Finance.
       ``(B) Qualifications.--The members shall be chosen on the 
     basis of their integrity, impartiality, and good judgment, 
     and shall be individuals who are, by reason of their 
     education and experience in health care benefits management, 
     exceptionally qualified to perform the duties of members of 
     the Board.
       ``(C) Prohibition on inclusion of federal employees.--No 
     officer or employee of the United States may serve as a 
     member of the Board.
       ``(5) Compensation.--Members of the Board shall receive, 
     for each day (including travel time) they are engaged in the 
     performance of the functions of the board, compensation at

[[Page 12696]]

     rates not to exceed the daily equivalent to the annual rate 
     in effect for level IV of the Executive Schedule under 
     section 5315 of title 5, United States Code.
       ``(6) Terms of office.--
       ``(A) In general.--The term of office of members of the 
     Board shall be 3 years.
       ``(B) Terms of initial appointees.--As designated by the 
     President at the time of appointment, of the members first 
     appointed--
       ``(i) 1 shall be appointed for a term of 1 year;
       ``(ii) 3 shall be appointed for terms of 2 years; and
       ``(iii) 3 shall be appointed for terms of 3 years.
       ``(C) Reappointments.--Any person appointed as a member of 
     the Board may not serve for more than 8 years.
       ``(D) Vacancy.--Any member appointed to fill a vacancy 
     occurring before the expiration of the term for which the 
     member's predecessor was appointed shall be appointed only 
     for the remainder of that term. A member may serve after the 
     expiration of that member's term until a successor has taken 
     office. A vacancy in the Board shall be filled in the manner 
     in which the original appointment was made.
       ``(7) Chair.--The Chair of the Board shall be elected by 
     the members. The term of office of the Chair shall be 3 
     years.
       ``(8) Meetings.--The Board shall meet at the call of the 
     Chair, but in no event less than 3 times during each fiscal 
     year.
       ``(9) Director and staff.--
       ``(A) Appointment of director.--The Board shall have a 
     Director who shall be appointed by the Chair.
       ``(B) In general.--With the approval of the Board, the 
     Director may appoint, without regard to chapter 31 of title 
     5, United States Code, such additional personnel as the 
     Director considers appropriate.
       ``(C) Flexibility with respect to compensation.--
       ``(i) In general.--The Director and staff of the Board 
     shall, subject to clause (ii), be paid without regard to the 
     provisions of chapter 51 and chapter 53 of such title 
     (relating to classification and schedule pay rates).
       ``(ii) Maximum rate.--In no case may the rate of 
     compensation determined under clause (i) exceed the rate of 
     basic pay payable for level IV of the Executive Schedule 
     under section 5315 of title 5, United States Code.
       ``(D) Assistance from the administrator of the medicare 
     benefits administration.--The Administrator of the Medicare 
     Benefits Administration shall make available to the Board 
     such information and other assistance as it may require to 
     carry out its functions.
       ``(10) Contract authority.--The Board may contract with and 
     compensate government and private agencies or persons to 
     carry out its duties under this subsection, without regard to 
     section 3709 of the Revised Statutes (41 U.S.C. 5).
       ``(f) Funding.--There is authorized to be appropriated, in 
     appropriate part from the Federal Hospital Insurance Trust 
     Fund and from the Federal Supplementary Medical Insurance 
     Trust Fund (including the Medicare Prescription Drug 
     Account), such sums as are necessary to carry out this 
     section.''.
       (b) Effective Date.--
       (1) In general.--The amendment made by subsection (a) shall 
     take effect on the date of the enactment of this Act.
       (2) Timing of initial appointments.--The Administrator and 
     Deputy Administrator of the Medicare Benefits Administration 
     may not be appointed before March 1, 2001.
       (3) Duties with respect to eligibility determinations and 
     enrollment.--The Administrator of the Medicare Benefits 
     Administration shall carry out enrollment under title XVIII 
     of the Social Security Act, make eligibility determinations 
     under such title, and carry out part C of such title for 
     years beginning or after January 1, 2003.

     SEC. 202. MISCELLANEOUS ADMINISTRATIVE PROVISIONS.

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

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

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

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

      Subtitle C--Changes in Medicare Coverage and Appeals Process

     SEC. 221. REVISIONS TO MEDICARE APPEALS PROCESS.

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


                       ``determinations; appeals

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

[[Page 12697]]

     or service may be assigned to the provider of services or 
     supplier of the item or service upon the written consent of 
     such individual using a standard form established by the 
     Secretary for such an assignment.
       ``(D) Time limits for appeals.--
       ``(i) Reconsiderations.--Reconsideration under subparagraph 
     (A) shall be available only if the individual described 
     subparagraph (A) files notice with the Secretary to request 
     reconsideration by not later than 180 days after the 
     individual receives notice of the initial determination under 
     subsection (a) or within such additional time as the 
     Secretary may allow.
       ``(ii) Hearings conducted by the secretary.--The Secretary 
     shall establish in regulations time limits for the filing of 
     a request for a hearing by the Secretary in accordance with 
     provisions in sections 205 and 206.
       ``(E) Amounts in controversy.--
       ``(i) In general.--A hearing (by the Secretary) shall not 
     be available to an individual under this section if the 
     amount in controversy is less than $100, and judicial review 
     shall not be available to the individual if the amount in 
     controversy is less than $1,000.
       ``(ii) Aggregation of claims.--In determining the amount in 
     controversy, the Secretary, under regulations, shall allow 2 
     or more appeals to be aggregated if the appeals involve--

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

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

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

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

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

       ``(ii) Definition of national coverage determination.--For 
     purposes of this section, the term `national coverage 
     determination' means a determination by the Secretary 
     respecting whether or not a particular item or service is 
     covered nationally under this title, including such a 
     determination under 1862(a)(1).
       ``(B) Local coverage determination.--In the case of a local 
     coverage determination made by a fiscal intermediary or a 
     carrier under part A or part B respecting whether a 
     particular type or class of items or services is covered 
     under such parts, the following limitations apply:
       ``(i) Upon the filing of a complaint by an aggrieved party, 
     such a determination shall be reviewed by an administrative 
     law judge of the Social Security Administration. The 
     administrative law judge shall review the record and shall 
     permit discovery and the taking of evidence to evaluate the 
     reasonableness of the determination. In reviewing such a 
     determination, the administrative law judge shall defer only 
     to the reasonable findings of fact, reasonable 
     interpretations of law, and reasonable applications of fact 
     to law by the Secretary.
       ``(ii) Such a determination may be reviewed by the 
     Departmental Appeals Board of the Department of Health and 
     Human Services.
       ``(iii) A decision of the Departmental Appeals Board 
     constitutes a final agency action and is subject to judicial 
     review.
       ``(C) No material issues of fact in dispute.--In the case 
     of review of a determination under subparagraph (A)(i)(III) 
     or (B)(i) where the moving party alleges that there are no 
     material issues of fact in dispute, and alleges that the only 
     issue is the constitutionality of a provision of this title, 
     or that a regulation, determination, or ruling by the 
     Secretary is invalid, the moving party may seek review by a 
     court of competent jurisdiction.
       ``(D) Pending national coverage determinations.--
       ``(i) In general.--In the event the Secretary has not 
     issued a national coverage or noncoverage determination with 
     respect to a particular type or class of items or services, 
     an affected party may submit to the Secretary a request to 
     make such a determination with respect to such items or 
     services. By not later than the end of the 90-day period 
     beginning on the date the Secretary receives such a request, 
     the Secretary shall take one of the following actions:
       ``(I) Issue a national coverage determination, with or 
     without limitations.
       ``(II) Issue a national noncoverage determination.
       ``(III) Issue a determination that no national coverage or 
     noncoverage determination is appropriate as of the end of 
     such 90-day period with respect to national coverage of such 
     items or services.
       ``(IV) Issue a notice that states that the Secretary has 
     not completed a review of the request for a national coverage 
     determination and that includes an identification of the 
     remaining steps in the Secretary's review process and a 
     deadline by which the Secretary will complete the review and 
     take an action described in subclause (I), (II), or (III).
       ``(ii) In the case of an action described in clause 
     (i)(IV), if the Secretary fails to take an action referred to 
     in such clause by the deadline specified by the Secretary 
     under such clause, then the Secretary is deemed to have taken 
     an action described in clause (i)(III) as of the deadline.
       ``(iii) When issuing a determination under clause (i), the 
     Secretary shall include an explanation of the basis for the 
     determination. An action taken under clause (i) (other than 
     subclause (IV)) is deemed to be a national coverage 
     determination for purposes of review under subparagraph (A).
       ``(E) Annual report on national coverage determinations.--
       ``(i) In general.--Not later than December 1 of each year, 
     beginning in 2001, the Secretary shall submit to Congress a 
     report that sets forth a detailed compilation of the actual 
     time periods that were necessary to complete and fully 
     implement national coverage determinations that were made in 
     the previous fiscal year for items, services, or medical 
     devices not previously covered as a benefit under this title, 
     including, with respect to each new item, service, or medical 
     device, a statement of the time taken by the Secretary to 
     make the necessary coverage, coding, and payment 
     determinations, including the time taken to complete each 
     significant step in the process of making such 
     determinations.
       ``(ii) Publication of reports on the internet.--The 
     Secretary shall publish each report submitted under clause 
     (i) on the medicare Internet site of the Department of Health 
     and Human Services.
       ``(3) Publication on the internet of decisions of hearings 
     of the secretary.--Each decision of a hearing by the 
     Secretary shall be made public, and the Secretary shall 
     publish each decision on the Medicare Internet site of the 
     Department of Health and Human Services. The Secretary shall 
     remove from such decision any information that would identify 
     any individual, provider of services, or supplier.
       ``(4) Limitation on review of certain regulations.--A 
     regulation or instruction which relates to a method for 
     determining the amount of payment under part B and which was 
     initially issued before January 1, 1981, shall not be subject 
     to judicial review.
       ``(5) Standing.--An action under this section seeking 
     review of a coverage determination (with respect to items and 
     services under this title) may be initiated only by one (or 
     more) of the following aggrieved persons, or classes of 
     persons:
       ``(A) Individuals entitled to benefits under part A, or 
     enrolled under part B, or both, who are in need of the items 
     or services that are the subject of the coverage 
     determination.
       ``(B) Persons, or classes of persons, who make, 
     manufacture, offer, supply, make available, or provide such 
     items and services.
       ``(c) Conduct of Reconsiderations by Independent 
     Contractors.--
       ``(1) In general.--The Secretary shall enter into contracts 
     with qualified independent contractors to conduct 
     reconsiderations of initial determinations made under 
     paragraphs (2) and (3) of subsection (a). Contracts shall be 
     for an initial term of three years and shall be renewable on 
     a triennial basis thereafter.
       ``(2) Qualified independent contractor.--For purposes of 
     this subsection, the term `qualified independent contractor' 
     means an entity or organization that is independent of any 
     organization under contract with the Secretary that makes 
     initial determinations under subsection (a), and that meets 
     the requirements established by the Secretary consistent with 
     paragraph (3).
       ``(3) Requirements.--Any qualified independent contractor 
     entering into a contract with the Secretary under this 
     subsection shall meet the following requirements:
       ``(A) In general.--The qualified independent contractor 
     shall perform such duties and functions and assume such 
     responsibilities as may be

[[Page 12698]]

     required under regulations of the Secretary promulgated to 
     carry out the provisions of this subsection, and such 
     additional duties, functions, and responsibilities as 
     provided under the contract.
       ``(B) Determinations.--The qualified independent contractor 
     shall determine, on the basis of such criteria, guidelines, 
     and policies established by the Secretary and published under 
     subsection (d)(2)(D), whether payment shall be made for items 
     or services under part A or part B and the amount of such 
     payment. Such determination shall constitute the conclusive 
     determination on those issues for purposes of payment under 
     such parts for fiscal intermediaries, carriers, and other 
     entities whose determinations are subject to review by the 
     contractor; except that payment may be made if--
       ``(i) such payment is allowed by reason of section 1879;
       ``(ii) in the case of inpatient hospital services or 
     extended care services, the qualified independent contractor 
     determines that additional time is required in order to 
     arrange for postdischarge care, but payment may be continued 
     under this clause for not more than 2 days, and only in the 
     case in which the provider of such services did not know and 
     could not reasonably have been expected to know (as 
     determined under section 1879) that payment would not 
     otherwise be made for such services under part A or part B 
     prior to notification by the qualified independent contractor 
     under this subsection;
       ``(iii) such determination is changed as the result of any 
     hearing by the Secretary or judicial review of the decision 
     under this section; or
       ``(iv) such payment is authorized under section 
     1861(v)(1)(G).
       ``(C) Deadlines for decisions.--
       ``(i) Determinations.--The qualified independent contractor 
     shall conduct and conclude a determination under subparagraph 
     (B) or an appeal of an initial determination, and mail the 
     notice of the decision by not later than the end of the 45-
     day period beginning on the date a request for 
     reconsideration has been timely filed.
       ``(ii) Consequences of failure to meet deadline.--In the 
     case of a failure by the qualified independent contractor to 
     mail the notice of the decision by the end of the period 
     described in clause (i), the party requesting the 
     reconsideration or appeal may request a hearing before an 
     administrative law judge, notwithstanding any requirements 
     for a reconsidered determination for purposes of the party's 
     right to such hearing.
       ``(iii) Expedited reconsiderations.--The qualified 
     independent contractor shall perform an expedited 
     reconsideration under subsection (b)(1)(F) of a notice from a 
     provider of services or supplier that payment may not be made 
     for an item or service furnished by the provider of services 
     or supplier, of a decision by a provider of services to 
     terminate services furnished to an individual, or in 
     accordance with the following:

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

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

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

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

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

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

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

       ``(ii) Departmental appeals board review.--The Departmental 
     Appeals Board of the Department of Health and Human Services 
     shall conduct and conclude a review of the decision on a 
     hearing described in subparagraph (B) and make a decision or 
     remand the case to the administrative law judge for 
     reconsideration by not later than the end of the 90-day 
     period beginning on the date a request for review has been 
     timely filed.

[[Page 12699]]

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

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

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

[[Page 12700]]

       ``(2) lists with respect to each item or service furnished 
     the amount of the individual's liability for payment;'';
       (4) in paragraph (3), as so redesignated, by striking the 
     period at the end and inserting ``; and''; and
       (5) by adding at the end the following new paragraph:
       ``(4) includes the toll-free telephone number (1-800-
     MEDICAR(E)) (1-800-633-4227) for information and questions 
     concerning the statement, liability of the individual for 
     payment, and appeal rights.''.

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

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

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

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

     SEC. 225. EFFECTIVE DATE OF SUBTITLE.

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

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

                  Subtitle A--Medicare+Choice Reforms

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

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

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

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

     SEC. 303. INCREASING MINIMUM PAYMENT AMOUNT.

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

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

       Section 1853(c)(2) of the Social Security Act (42 U.S.C. 
     1395w-23(c)(2)) is amended--
       (1) by striking the period at the end of subparagraph (F) 
     and inserting a semicolon; and
       (2) by adding after and below subparagraph (F) the 
     following:

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

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

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

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

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

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

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

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

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

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

       Section 1853(a)(3)(C)(ii) of the Social Security Act (42 
     U.S.C. 1395w-23(c)(1)(C)(ii)) is amended--
       (1) by striking the period at the end of subclause (II) and 
     inserting a semicolon; and
       (2) by adding after and below subclause (II) the following:

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

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

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

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

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

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

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

       (a) In General.--The Comptroller General of the United 
     States shall conduct a study to quantify the extent to which 
     reimbursement for drugs and biologicals under the current 
     medicare payment methodology (provided under section 1842 (o) 
     of the Social Security Act (42 U.S.C. 1395u(o)) overpays for 
     the cost of such drugs and biologicals compared to the 
     average acquisition cost paid by physicians or other 
     suppliers of such drugs
       (b) Elements.--The study shall also assess the consequences 
     of changing the current medicare payment methodology to a 
     payment methodology that is based on the average acquisition 
     cost of the drugs. The study shall, at a minimum, assess the 
     effects of such a reduction on--

[[Page 12701]]

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

  The SPEAKER pro tempore. The gentleman from Texas (Mr. Archer), the 
gentleman from New York (Mr. Rangel), the gentleman from Virginia (Mr. 
Bliley), and the gentleman from Michigan (Mr. Dingell) each will 
control 30 minutes.
  The Chair recognizes the gentleman from Texas (Mr. Archer).


                             General Leave

  Mr. ARCHER. Mr. Speaker, I ask unanimous consent that all Members may 
have 5 legislative days within which to revise and extend their remarks 
and include extraneous material on H.R. 4680.
  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from Texas?
  There was no objection.
  Mr. ARCHER. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, today 12 million seniors and disabled Americans on 
Medicare, including 7 million women, have no prescription drug 
coverage. For the vast majority of seniors living on fixed incomes, 
this is a very difficult situation. This bill brings them help.
  Clearly, Mr. Speaker, now is the time for us to add to Medicare 
prescription drug coverage. Our Republican bipartisan plan does just 
that. 5.5 million low-income seniors, almost half of those on Medicare 
today, are without coverage. They now will have a prescription drug 
plan. For about the cost of a movie ticket, those seniors will be able 
to get the medicines that they need, no matter the cost, no matter the 
illness.
  We do not just cover low-income Americans. We cover every senior who 
wishes to enroll. Seniors will be given the right to choose, the right 
to voluntarily choose the drug plan that works best for them. They will 
receive a 25 percent reduction in the price of the drugs they buy and 
the security also of catastrophic coverage in the case of chronic 
illness or excessively high drug costs.
  So all 6\1/2\ million middle-income seniors without coverage will 
also get to choose a prescription drug benefit plan as well. This is 
truly a complete package, but there are some things that our plan will 
not do. First, it will not affect the millions of seniors who have 
existing drug coverage and like it. They will be able to continue with 
that.
  Second, it will not force seniors into a bureaucratic government-run 
plan that dictates what drugs seniors can and cannot have.
  Third, it will not evaporate over time if drug costs continue to 
outpace inflation.
  Finally, it will not break the bank or threaten Medicare's future.
  All of these items that I mentioned are concerns that we have with 
the Democrat plan. Democrats will offer seniors no choice. They offer 
seniors only a single government-run plan, and seniors will have to 
take it or leave it.
  Finally, the Democrat plan makes seniors wait until the year 2006, 6 
years from now, before they can get catastrophic coverage and then only 
if Washington has a surplus.
  Why the delay? Why the contingency? The Democrat plan is a big step 
toward Washington-run health care but a step backward in helping 
seniors with the high cost of prescription drugs.
  Our Republican bipartisan bill, by contrast, gives seniors the right 
to choose the coverage that works best for them. It gives seniors a 25 
to 39 percent discount off the price of their drugs.
  This vote is a simple choice, Mr. Speaker. I urge my colleagues to 
vote for the Republican bipartisan bill that makes prescription drugs 
available, affordable and voluntary.
  Mr. Speaker, I reserve the balance of my time.
  Mr. RANGEL. Mr. Speaker, I yield myself 3 minutes.
  Mr. Speaker, every time there is a good idea that we have in this 
House of Representatives, the Republican majority has to figure some 
way to find some wording that either it is going to be deep-sixed and 
never be brought to the floor or that it becomes a political statement 
because they can be assured that it is going to be vetoed. It is not 
only affordable health care. Whether it is school construction, minimum 
wage, gun safety, patient bill of rights, all good ideas, but they have 
to find some way to make certain that it never becomes the law; that 
they have to challenge Democrats and challenge the President.
  They keep calling this a bipartisan bill because they found a 
Democrat or two that lost their way. The truth of the matter is, 
bipartisanship starts with the committee. The gentleman from Texas (Mr. 
Archer) is supposed to talk with the gentleman from New York (Mr. 
Rangel) and say, hey, can we get a bipartisan bill? The gentleman from 
California (Mr. Thomas) is supposed to talk to the gentleman from 
California (Mr. Stark) and say, hey, can we work out something? That is 
how we get bipartisanship. That is historically how we do it here.
  But, no, what the other side has chosen to do is to wait until 2:00 
or 3:00 in the morning and decide that we are not going to have any 
option. It is going to be the Republican way or no way.
  One of my favorite Republicans once said, if one gets a telephone 
call at 2:30 in the morning, it must be suspicious, that something is 
going wrong. Well, if one gets it at 3:00 in the morning, then they can 
rest assured that something is going on that they do not want the 
American people to know.
  What is it? That they have a bill, they have a statement. We do not 
challenge the fact that they just do not like government helping 
people. That is their way. That is how they think. If it is Social 
Security, if it is Medicare, if it is education, privatize it and 
forget it. Get some vouchers, let the private sector do it. Give the 
money to the HMOs, give it to the insurers because they cannot trust 
old folks with their own prescription drugs.
  All we are asking for is a chance to have another way. So I can say 
this, it is possible that the voters were sleeping when the Republicans 
had concocted this scheme to deny us an option to really provide health 
care for those who need it, but I assure them

[[Page 12702]]

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

                              {time}  1445

  We think that the government can do a better job than subsidizing 
managed care drug plans whose record has been to increase the premiums, 
leave the program, abandon their beneficiaries, kick up the premiums, 
cut benefits, where Medicare has done none of that, it has been 
dependable. I wish we could bring our bill to the public.
  Mr. Speaker, I reserve the balance of my time.
  Mr. ARCHER. Mr. Speaker, I yield 1 minute to the gentleman from 
Pennsylvania, (Mr. English), another respected member of the Ways and 
Means Committee.
  Mr. ENGLISH. Mr. Speaker, if we can set aside for a moment the hot 
bipartisan rhetoric, today the House has an opportunity to take a 
historic step to ensure that no senior will ever have to face the 
choice again between destitution and neglecting their prescriptions.
  The House bipartisan prescription drug plan is a balanced, market-
oriented approach targeted to updating Medicare and providing 
prescription coverage, more generous coverage as it happens than what 
the President has originally proposed.
  For my district, the plan does some very important things. It takes 
vital steps toward improving Medicare as a whole. It expedites the 
appeals process by mandating Medicare appeals. They used to take an 
average of 400 days now it takes less than a quarter of that time.
  Our plan is the only one that addresses the problems in 
Medicare+Choice, particularly a problem in portions of my district, 
where plans are raising rates or cutting benefits.
  Under our bipartisan bill, we move the prescription drug benefit of 
Medicare+Choice out from under the cold shadow of the Health Care 
Financing Administration that has haunted the program, instead we 
create the Medicare Benefit Administration to safeguard prescription 
drug plans and negotiate lower prescription prices for seniors.
  Mr. Speaker, today the House takes a historic step to ensure that no 
senior will ever have to face the choice between destitution and 
prescription drugs. The House Bipartisan Prescription Drug Plan is 
available, affordable and voluntary for ALL seniors.
  Under this proposal, seniors will no longer have to pay exorbitant 
prices for drugs. Using group bargaining power, seniors will enjoy a 25 
percent discount on necessary prescriptions.
  Many seniors in my district will qualify for direct subsidies. About 
100,000 seniors in Pennsylvania will be covered 100 percent under this 
plan.
  But the best part is that those seniors who are struggling to pay 
runaway drug costs would have access to a Medicare entitlement which 
covers all of their costs about $6,000.
  Seniors at all income levels will have access to affordable 
prescription drug coverage that best meets their individual needs.
  The House Bipartisan Prescription Drug Plan is a balanced, market-
oriented approach targeted at updating Medicare and providing 
prescription drug coverage.
  Under our prescription drug plan, the government would share in 
insuring the sickest seniors, making the risk more manageable for 
private insurers.
  By sharing the risk and the cost associated with caring for the 
sickest beneficiaries, premiums will be lower for every beneficiary.

[[Page 12703]]

  Keeping rural seniors in mind, our plan guarantees at least two drug 
plans will be available in every area of the country with the 
government serving as the insurer of last resort.
  The President's plan shoehorns seniors--many of whom have private 
drug coverage which they are happy with--into what I call a ``one-size-
fits-few'' plan with Washington bureaucrats in control of their 
benefits.


                            medicare reforms

  The plan takes vital steps toward improving Medicare as a whole. It 
expedites the appeals process by mandating that appeals that used to 
take an average of 400 days now take less than a quarter of that time.
  Our plan is the only one that addresses the problems of 
Medicare+Choice. In portions of my district, plans are raising rates 
and cutting benefits to seniors because the dismal reimbursement rates.
  We move the prescription drug benefit and Medicare+Choice out from 
under the cold shadow of the Health Care Financing Administration that 
has haunted and nearly bankrupted the system.
  The Medicare Benefit Administration will be created to safeguard 
prescription drug plans and negotiate lower prescription prices for 
seniors. The administration will allow the plan to realize its 
potential, free from interference from the bureaucracy.
  We further strengthen Medicare+Choice plans by: raising the base rate 
that counties currently receive; providing higher updates for those 
areas who currently have 1 or no plans--thereby encouraging plans to 
continue to provide coverage in these areas.
  Mr. STARK. Mr. Speaker, I yield 2 minutes to the gentleman from 
Washington State (Mr. McDermott), who knows why the National Committee 
to Preserve Social Security and Medicare and National Council on Aging 
supports the Democrats' plan and opposes the Republicans' plan.
  Mr. McDERMOTT. Mr. Speaker, this bill is like a bad April Fool's Day 
joke. You know there is a purse that is laying out on the street with a 
string on it. And the person comes along and pulls the string and the 
people keep reaching for it and they cannot quite get it.
  The Republican bill has no guaranteed premium in it. It has no 
guaranteed costs reduction in it. I do not care what figures they throw 
around out here, 25 percent to 39 percent reduction, it is not in the 
bill. There is no assurance of two choices.
  One Republican Member let the cat out of the bag, it may be enough 
just to introduce a bill, but if we don't even have a bill, we are open 
to charges that we didn't do anything. That tells us where they really 
are, and it also tells us what their consultant told them.
  He said, it is more important to communicate that you have a plan as 
it is to communicate what is in the plan. The reason this was done at 
night, the reason they will not allow us to make an alternative, the 
reason they do not want any open debate is because they do not want to 
communicate to anybody until they put out those commercials in the 
election.
  They will say we passed a bipartisan bill for seniors with a couple 
of Democrats and a joke in terms of how it works. In this bill, we ask 
ourselves, where are they going to get the two plans that they talk 
about?
  The bill says on one page, we will subsidize up to 35 percent. What 
if nobody will take it at 35 percent, they hold out. The bill later 
says they can add incentives and the chairman of the subcommittee said 
in the committee room that you could subsidize up to 99 percent.
  If there is an insurance company out there that can get 99 percent 
subsidy on the plan maybe they will offer it, but I am telling my 
colleagues it is going to cost the American people. It is a bad bill.
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 2 minutes to the 
gentleman from Minnesota (Mr. Peterson), someone who believes in policy 
over politics.
  Mr. PETERSON of Minnesota. Mr. Speaker, I thank the gentleman for 
yielding to me. He and I have been working together on one aspect of 
this Medicare problem that I have depicted in this chart here, and that 
is the fact that we have 3,025 counties in this country that are being 
paid below the average of the normal reimbursement, and 168 counties 
that are being paid above.
  I am going to say something that I have heard a lot of my colleagues 
say, but I do not think very many people are going to dare say on the 
floor of this House, and, that is, that it is irresponsible for us to 
be providing a drug benefit without reforming this system. And where I 
am coming from with this issue is that I think if we add a drug 
benefit, such as my friends on the Democratic side, on top of the 
existing system, the chances of us ever getting this fixed are going to 
be almost zero.
  What has happened since we started work on this in 1995 in Dade 
County, which started off at $620 a month reimbursement, they are now 
up to $809 a month. In my area, we had $239 reimbursements, we raised 
that floor to $375, and it has stuck there ever since.
  Since 1997, what has happened, Dade County has gone up 8 percent, we 
are still at $375; and the problem I have with this whole thing is that 
we cannot set another benefit where we are going to have the Government 
pick up 100 percent of these benefits, that nobody else is at risk 
except the government and think we are going to have the money 
available to fix this plan.
  Mr. Speaker, at least on this side, the gentleman from California 
(Mr. Thomas) and others have come forward and tried to address this 
issue, have funded the blend, have raised the cap and then after we got 
done with that, then the administration and my friends on this side of 
the aisle came along and said, well, we will do the same thing on our 
bill.
  I have not seen a lot of interest, unfortunately, on my side of the 
aisle dealing with this problem, but this map shows where in this 
country they have zero premium plans or drug coverage, the dark areas 
are those areas, the whole rest of this is the area where they are not 
getting this kind of coverage. I would argue with the Democratic plan, 
they will never get it.
  Mr. STARK. Mr. Speaker, I yield 2 minutes to the gentleman from 
Wisconsin (Mr. Kleczka), a distinguished member of the Subcommittee on 
Health of the Committee on Ways and Means, who understands that 
Families USA and the Leadership Council of Aging organizations 
vehemently oppose the Republican bill and support the Democratic 
substitute.
  Mr. KLECZKA. Mr. Speaker, I am trying to figure out what the previous 
speaker said. He is the one supporting the Republican drug bill, and as 
I recall, he said it is irresponsible for us to provide a drug benefit 
at this time. Nevertheless, he signs on to the Republican drug benefit 
bill. That tells me, and he is a pretty honest guy, that their bill 
does not provide a drug benefit at all. I agree with that.
  Mr. Speaker, the Republican drug bill is a cruel hoax and an empty 
promise to our senior citizens. We are going to end up passing their 
bill today, and we are going to go home for the 4th of July break. I 
challenge the senior citizens in their districts to ask a few 
questions. My friends here is a copy of the bill, I challenge 
constituents to say, Mr. Republican Congressman, where in the bill is 
the premium that I am going to be charged? They are going to say well, 
it is not in there. I will be darned.
  Mr. Republican Congressman, what are the drugs covered? Where is the 
listing of the drugs? It is not in here. Well, Mr. Republican 
Congressman, how about the deductibles and copays; is that in there? 
No, that is not in there either.
  The constituent will say, what kind of bill is this? They will say we 
are going to hire a new bureaucrat for $140,000 a year who will work 
with the insurance companies to make those decisions.
  Our bill is voluntary, defines a premium of $25 a month. In the 
Republican bill insurance companies will decide that with this new 
bureaucrat. That is a drug benefit? That is a farce. This bill does not 
provide a universal program, where doctors coverage for Medicare is the 
same in this part of the country as in that part. This bill hopes and 
prays that the insurance companies will offer it.
  Mr. Speaker, if this type of policy was profitable for insurance 
companies,

[[Page 12704]]

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

                              {time}  1500

  Mr. LEWIS of Georgia. Mr. Speaker, under the Republican plan, there 
is no defined benefit. There is no set premium. This is a scheme 
written by the insurance companies. The Republicans did not like 
Medicare back in 1965, and they do not like it now. Here they are, once 
again, trying to privatize prescription drugs for seniors, just like 
they tried to privatize Medicare. This is nothing but a scheme.
  The Republican scheme requires low-income seniors to go to the State 
welfare office. Are my Republican sisters and brothers suggesting that 
my 86-year-old mother go down to the welfare office to find out whether 
she can get her prescription medicine?
  This is a sham. This is a shame, and this is a disgrace.
  My Republican colleagues, on the other hand, would prefer to give the 
money away in tax breaks to the wealthy, rather than to offer a 
sensible and affordable prescription medicine benefit. The availability 
of prescription medicine should not depend on the size of one's wallet 
or one's ZIP code.
  There is no room, but no room in here to play partisan politics. No 
person in the twilight of his or her life should not have to choose 
between putting food on the table and getting his or her blood pressure 
and heart medicine.
  This is not just, this is not right, and this is not fair. We have a 
moral obligation, a mission, and a mandate to

[[Page 12705]]

stand up for our seniors. Our seniors do not want a prescription drug 
benefit next year, our seniors want it now, and they deserve it now. We 
can do no less for the seniors of America.


                Announcement By The Speaker Pro Tempore

  The SPEAKER pro tempore (Mr. LaHood). The Chair will remind all 
persons in the gallery that they are here as guests of the House and 
that any manifestation of approval or disapproval of proceedings or 
other audible conversation is in violation of the House.
  Mr. THOMAS. Mr. Speaker, I yield 1 minute to the gentlewoman from 
Washington (Ms. Dunn), a member of the Committee on Ways and Means.
  Ms. DUNN. Mr. Speaker, seniors are living longer because of 
innovative new treatments that extend and improve their quality of 
life. Unfortunately, many of these new treatments carry a cost that 
puts a huge burden on the shoulders of seniors who are living on fixed 
incomes. Today will ensure that low-income seniors no longer need to 
have to decide between purchasing drugs and buying food or paying for 
rent. This bill of ours will provide all seniors access to affordable 
prescription drug coverage that will limit their out-of-pocket 
payments.
  In addition, for low-income seniors, the bill will provide drug 
coverage that is free of premiums, deductibles and copayments. 
Regardless of income, seniors will be able to have peace of mind that 
they will have access to a voluntary drug benefit plan.
  More importantly, Mr. Speaker, we offer seniors a choice of selecting 
a drug plan that meets their individual needs. We leave the decisions 
in the hands of seniors, not in the hands of government bureaucrats. In 
this way, we can make sure that those who offer drug plans are 
accountable to seniors who can choose to vote with their feet.
  Mr. Speaker, I urge passage of our bill.
  Mr. STARK. Mr. Speaker, I yield 2 minutes to the gentlewoman from 
Florida (Mrs. Thurman), a member of the Subcommittee on Health of the 
Committee on Ways and Means, who twice offered an amendment to give 
seniors a discount on their pharmaceutical drugs at no cost to the 
Federal Government, only to see every Republican on the Committee on 
Ways and Means vote against her amendment.
  Mrs. THURMAN. Mr. Speaker, I find it quite interesting that we are 
talking about an insurance plan. In this country, we already have these 
plans. We have Medigap plans, we have Medicare Choice. But the problem 
is, they failed; and yet this is what we have to vote on again today. 
That is why this is the hottest issue in the country.
  Senior groups who have nothing to gain have written and talked to us 
about why they cannot support the bill in front of us. They do not have 
any politics in this game. They want a drug benefit. They want to have 
life-sustaining drugs available to them.
  So listen to them. The Senior Citizens League says, ``After 
considerable study, the Medicare RX 2000 Act will do more harm than 
good to the people that it is intended to help.''
  How about Families of USA? They said, ``This proposal has all the 
attributes of a mirage. It looks inviting from a distance, but once you 
get up close, you realize there is nothing there. What is more, 
consumers do not know what they will actually get out of this. The 
Republican proposal leaves the actual benefit undefined.''
  How about the Older Women's League who actually says, ``the 
Republican prescription drug plan does not represent a defined benefit 
added to the Medicare program but, rather, a private insurance 
program.''
  Or how about the National Committee to Preserve Social Security and 
Medicare. ``The congressional Republican plan for prescription drug 
coverage for senior citizens is not what the American people need or 
want,'' according to one of the country's leading citizens advocate 
groups.
  Mr. Speaker, these are folks that have come to talk to us. These are 
the folks that are in my town hall meetings. These are the folks that 
have told me: we want a defined benefit; we want a Medicare benefit. We 
are tired of being switched from plan to plan. We are tired of seeing 
our prices go up, and we have no control over it. The only way we get 
this is to make sure it goes through Medicare.
  Please vote against this bill. Give our seniors what they deserve, 
and that is prescription drugs that they can afford.
  Mr. THOMAS. Mr. Speaker, I yield myself 10 seconds.
  Just so that people understand, letters of support for H.R. 4680 have 
come in from a number of institutions. The American Cancer Research 
Institute, the Kidney Cancer Association, National Alliance for the 
Mentally Ill. There are a number of organizations that simply disagree 
with the gentlewoman.
  Mr. Speaker, I yield 1 minute to the gentlewoman from Connecticut 
(Mrs. Johnson), a member of the Subcommittee on Health of the Committee 
on Ways and Means.
  Mrs. JOHNSON of Connecticut. Mr. Speaker, this is a red letter day 
for seniors. It is just a red letter day. For the first time in 
history, out of this House is going to go legislation to provide 
prescription drug coverage for seniors across America, every village, 
every city. I am proud of that. This is not about insurance companies, 
and here is the proof.
  In the Democrats' bill, they are going to use, and it says, ``or 
insurers.'' They are going to use insurers; we are going to use 
insurers. They are going to use pharmaceutical benefits managers; we 
are going to use pharmaceutical benefits managers. They are going to 
use pharmacy chains; we are going to use pharmacies. The difference is, 
they are going to use one. They are going to use one plan. Seniors will 
have no choice, one formulary. Seniors will have no choice. In that one 
formulary, they may have only one drug in each category. In our bill, 
they must have multiple drugs. In our bill, we guarantee that we will 
cover off-label uses. Sixty percent of cancer victims depend on off-
label uses of drugs for their cure.
  Mr. Speaker, our plan offers them not only prescription coverage, but 
choice and hope.
  Mr. Speaker, today is a great day for our nation's seniors because 
today we are considering historic legislation that will expand Medicare 
to cover the rising cost of prescription drugs.
  When Medicare was created in 1965, prescription drug coverage was not 
included because there were relatively few drugs available and the 
focus was on physician and hospital care.
  Today, however, it's clear that you can't have modern health care 
without having access to lifesaving pharmaceuticals.
  Thankfully, two-thirds of seniors have prescription drug coverage 
under other health plans, but 12 million have no coverage at all.
  This is simply morally wrong in the world's most prosperous nation 
because no senior should have to choose between filling the 
prescription they need and putting food on the table.
  So, today is truly a red letter day. We will pass a House Republican 
bill with bipartisan support to make prescription drug coverage a part 
of Medicare for all seniors in America, in every town and every city.
  While some of my Democrat colleagues are dramatizing their opposition 
to this bill, I would remind those watching that if it weren't an 
election year, they'd be claiming victory. The similarities between the 
two proposals, ours and theirs, is striking and broad.
  The AARP acknowledged this point in a letter that they sent to 
Congress yesterday. ``We are pleased that both the House Republican and 
Democratic bills include a voluntary prescription drug benefit in 
Medicare--a benefit to which every Medicare beneficiary is entitled. 
Further, both bills provide for a benefit that would be available in 
either fee-for-service or managed care settings. And while there are 
differences, both bills describe the core prescription drug benefit in 
statute. These are important steps and represent real progress over the 
past year.'' Horace B. Deets, AARP, June 27.
  In other words, our plan is universal, just like the President's.
  Our plan is voluntary, just like the President's.
  Our plan provides an entitlement under Medicare, just like the 
President's.
  Our plan contracts with private health organizations, just like the 
President's.
  And like Part B coverage for doctor services and diagnostic tests, it 
is funded with both premiums and government subsidies, just like the 
President's.

[[Page 12706]]

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

[[Page 12707]]

hit Republicans for failing to offer prescription drug coverage to 
seniors.''
  My friends, put those commercials away. America is sick and tired of 
bickering. Americans want us to create a product that will benefit 
them.

                              {time}  1515

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

[[Page 12708]]

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

                              {time}  1530

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

[[Page 12709]]

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


                Announcement by the Speaker Pro Tempore

  The SPEAKER pro tempore (Mr. LaHood). The Chair would ask all Members 
to abide by the time that they are allotted.
  Mr. THOMAS. Mr. Speaker, it is now my pleasure to yield 1 minute to 
the gentleman from Florida (Mr. Foley), a member of the Committee on 
Ways and Means.
  [H28JN0-416]{H5357}FOLEY
  Mr. FOLEY. Mr. Speaker, maybe people should switch to decaf around 
here. A little excited. A little tense. I know they want to leave the 
Capitol, but they should remain and discuss the issue.
  It is so complicated, our Medicare prescription drug coverage. It is 
so hard to understand. And yet every Member of Congress is entitled to 
it. I do not hear any of them turning in their cards because it is 
difficult to get prescription drug coverage.
  They can go to the pharmacy. They can order from Merck-Medco. They 
can go to any place in America and get covered under their policy here, 
provided by the taxpayers, at the House of Representatives.
  But today, Mr. Speaker, a similar plan is being offered for our 
seniors and is this abomination? Now, we can have disagreements on 
policy; we can certainly have disagreement on how we arrive. But I 
would suggest this is a good plan. And if we wait 48 hours, Al Gore 
will endorse it; and the President will support it. He did not like 
marriage penalty elimination. It was too expensive. Give him a month; 
he will support it and trade us drugs.
  Mr. Speaker, I urge my colleagues to vote for a very good, 
responsible policy and give the seniors drugs they need.
  Mr. STARK. Mr. Speaker, I yield 1 minute to the gentleman from 
Louisiana (Mr. Jefferson), a distinguished member of the Committee on 
Ways and Means who understands that the Friends Committee on National 
Legislation and the International Union of United Automobile, 
Aerospace, Agriculture and Implement Workers both support the Democrat 
bill and oppose the Republican bill.
  Mr. JEFFERSON. Mr. Speaker, I thank the gentleman from California 
(Mr. Stark) for yielding me this time.
  Mr. Speaker, I am glad my colleagues on the other side of the aisle 
have finally turned to a discussion of our Nation's most pressing 
priority, the need to ensure affordable access for seniors to 
prescription drugs. Unfortunately, Mr. Speaker, the debate is all that 
we really have.
  The sharp rise in prescription drug prices has placed an intolerable 
burden on our Nation's seniors. This burden is aggravated by the fact 
that there is no Medicare prescription drug benefit. Three-fourths of 
Medicare beneficiaries lack decent, dependable coverage of prescription 
drugs.
  Our Nation's seniors are not fooled by this legislation that is on 
the floor today, Mr. Speaker, and neither are we. A clear majority of 
senior and consumer groups have labeled this legislation a ``sham,'' 
providing no real hope of a solution.
  We need a bill that will afford a solid guarantee of a drug benefit 
for all Medicare beneficiaries, not a bill that relies on the profit-
driven whims of the private insurance industry. If Medicare is indeed 
an entitlement program for seniors, should we not pass a drug benefit 
bill that clearly lets seniors know what drug benefit they are going to 
get and they are entitled to?
  Mr. Speaker, the program we have in front of us makes no sense. I 
hoped for a real choice today. It is a shame we do not have it. Our 
Nation's seniors deserve better.
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 1 minute to the 
gentlewoman from Connecticut (Mrs. Johnson), and I hope this is not 
disruptive of the debate, who wishes to talk about something that is 
actually in the bipartisan plan.
  Mrs. JOHNSON of Connecticut. Mr. Speaker, I thank the gentleman from 
California for yielding me this time.
  Mr. Speaker, in my earlier remarks, I did mention the breadth of 
formulary that seniors would have access to under the Republican bill, 
because they would have access to competing plans. So they would have 
access to a number of prescription drugs in every category, and 
assurance that off-label use of drugs, so important to cancer 
treatment, will be at their beck and call.
  But there is another wonderful provision of the bill that I want to 
point out to my colleagues. It allows our seniors to participate in a 
demonstration project if they are diagnosed with advanced stage 
congestive heart failure, diabetes, or coronary heart disease.
  These are the very seniors with the highest drug costs, and 
participating in these disease management programs will enable them to 
get their pharmaceuticals essentially covered and through a disease 
management approach they will get support in recovering and adopting 
preventative health life style changes, following all of their doctor's 
orders, that will improve their health and reduce their health care 
costs all the while covering their drug costs. It has been proven that 
disease management lowers hospital costs, lowers doctor costs, lowers 
emergency costs. Good for Medicare and good health for seniors.
  Mr. STARK. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Pennsylvania (Mr. Mascara).
  Mr. MASCARA. Mr. Speaker, I rise in opposition to H.R. 4680.
  Mr. Speaker, I come to the floor today to air my deep concerns 
regarding the lack of prescription drug coverage for many of our 
nation's seniors.
  Last year I introduced H. Con. Res. 152, which called upon Congress 
to fix this problem. The bill we are debating today does nothing to fix 
the problem.
  I am sure my colleagues here in the House are aware of enormity of 
this issue. They know that upwards of 14 million seniors in this nation 
are without any kind of prescription drug benefit. They know that 
millions of seniors are suffering in ways that are morally wrong, 
especially for such a wealthy and caring nation.
  How can we on one hand give away billions of dollars in foreign aid, 
yet turn our backs on seniors who often times must choose between 
buying food or buying prescription drugs.
  This bill can't see the forest for the trees. It does nothing to 
solve the problem on how to provide 13 million seniors with adequate 
prescription drugs at an affordable price.
  This bill H.R. 4680 does not accomplish that. I oppose it and ask my 
colleagues to vote ``No.''
  Mr. STARK. Mr. Speaker, I yield such time as he may consume to the 
gentleman from Indiana (Mr. Visclosky).
  Mr. VISCLOSKY. Mr. Speaker, I rise in opposition to H.R. 4680.
  Mr. Speaker, I rise today to express my strong opposition to H.R. 
4680, the Medicare Rx 2000 Act. This overly complicated bill fails to 
guarantee affordable prescription drug coverage for all seniors and 
disabled persons. Prescription drug coverage for seniors is one of the 
most serious issues facing this Congress, and it is time to stop making 
empty promises.

[[Page 12710]]

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

[[Page 12711]]

choice on many different levels. First, I respect my seniors wishes to 
choose the coverage that is best for their individuals health care 
needs. I also respect individuals wishes to choose to not participate 
in one of these new Medicare prescription drug programs. Second, many 
of my seniors--over 150 of them--have taken the time to write and call 
me over the last month in order to let me know how happy they are with 
the prescription drug coverage and other benefits they are receiving 
through their Medicare+Choice HMOs. Mr. Speaker, this bill will respect 
their wishes to choose to remain in their Medicare+Choice plans. Third, 
this bill also protects the many retirees who have excellent retiree 
prescription drug coverage through their former employer. Finally, and 
most importantly, this bill gives seniors who want to participate the 
choice between at least two different prescription drug plans no matter 
where they live. Whether a senior lives in a large metropolitan area 
like the greater Miami-Ft Lauderdale-Palm Beach area or in the rural 
areas of Central Florida or in the Mid-West, every senior will be able 
to choose a plan that is best for them--not a plan that a government 
bureaucrat imposes on them and every other senior citizen in America. 
I, for one, do not believe, like the President's does, that the Health 
Care Financing Administration should make this choice for seniors. 
Under his plan, the President wouldn't give seniors any such choice. It 
would force seniors to choose between a government-run plan or nothing.
  Another important provision of this bill is peace of mind for every 
senior citizen who fears that they and their loved ones could be faced 
with large drug bills reaching into the hundreds of thousand of 
dollars. The Medicare Prescription 2000 bill protects all seniors from 
catastrophic drug expenses--once a senior's drug costs exceed $6000 in 
a year, this plan will completely cover the rest of their drugs for the 
year. Unfortunately, the President's plan did not protect beneficiaries 
from these huge expenses until our Republican plan came out--now the 
President has agreed that this was a major oversight in his plan and 
has agreed to support it.
  Mr. Speaker, this plan also has special provisions to make sure that 
low-income seniors will have all their drug expenses covered by 
Medicare. And this plan helps make prescription drugs more affordable 
for all seniors by ensuring that they get the same drug-price discounts 
that each of us enjoys when we buy drugs through our private health 
insurance plans. The Congressional Budget Office has calculated that my 
seniors will save at least 25 percent on every prescription they buy 
under our plan. Other experts estimate that seniors could save between 
30-35 percent on every drug purchase.
  I would like to close by saying that the Medicare Prescription Drug 
2000 bill will help the many seniors I represent who currently have no 
coverage. Am I satisfied that this is all Congress needs to do to 
improve the Medicare? No, I am not. But I am satisfied that this is a 
good place to start--just as Chairman Archer and I have done in 
announcing the outlines of our Social Security Reform proposal. By 
announcing the Archer-Shaw plan, we have started a rush of excellent 
Social Security reform ideas and suggestions from both parties. I 
believe that passage of H.R. 4680 will engender the continuation of a 
similarly energetic debate on how to build upon this newly created 
Medicare prescription drug benefit. I urge all my colleagues to vote 
yes on Medicare Prescription 2000.
  Mr. STARK. Mr. Speaker, I yield 1 minute to the gentleman from Texas 
(Mr. Turner), who recognizes that the American Medical Student 
Association and the American Network of Community Options and Resources 
both support the Democratic bill and oppose the Republican bill.
  Mr. TURNER. Mr. Speaker, the House leadership has twisted the rules 
today so that we have only one choice: their bill or no bill. So let us 
talk about what their bill does.
  First of all, it gives millions of dollars to insurance companies 
instead of giving it back to seniors in the form of lower prescription 
drug prices.
  Secondly, the bill leaves out middle-income Americans. Middle-income 
Americans cannot get any help. All they are told is to go buy 
insurance. There are millions of middle-income Americans who are 
struggling to pay the costs of high prescription medications.
  Thirdly, this bill simply rewards the pharmaceutical industry who has 
spent almost $100 million trying to be sure that this bill that is on 
the floor today is the only bill we have a chance to debate.
  A group called Citizens for Better Medicare, formed by the 
pharmaceutical industry, has worked hard to be sure that this day 
arrives in the form that we have it.
  Finally, the Republican bill lets the greedy HMOs decide what 
medicines seniors get. We believe seniors and their doctors should 
decide what kind of medications they get.
  Mr. THOMAS. Mr. Speaker, I yield myself 30 seconds. Mr. Speaker, I 
submit for the Record a letter from the National Alliance for the 
Mentally Ill. I initially said they supported H.R. 4680, which had been 
contradicted by the other side. And I believe the Record should show 
that the letter from the National Alliance for the Mentally Ill shows 
support for H.R. 4680. No number of denials will change the fact that 
they are in support.
  Mr. Speaker, the letter reads as follows:
                                                 National Alliance


                                         for the Mentally Ill,

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

[[Page 12712]]

     moving this legislation forward. NAMI looks forward to 
     working with all House members--on both sides of the aisle--
     and the Clinton Administration to ensure that Medicare 
     prescription drug legislation is enacted in 2000.
           Sincerely,
                                                  Laurie M. Flynn,
                                               Executive Director.

                              {time}  1545

  Mr. STARK. Mr. Speaker, may I inquire of the time.
  The SPEAKER pro tempore (Mr. LaHood). The gentleman from California 
(Mr. Stark) has 1\1/2\ minutes remaining. The gentleman from California 
(Mr. Thomas) has 4\1/2\ minutes remaining.
  Mr. STARK. Mr. Speaker, I reserve the balance of my time.
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 1 minute to the 
gentleman from Iowa (Mr. Nussle), someone who has been extremely 
important in helping us shape the rural assistant portions of this 
particular legislation.
  Mr. NUSSLE. Mr. Speaker, I thank the gentleman from California for 
yielding me this time.
  Mr. Speaker, as the chairman of the Rural Health Care Coalition, one 
of the first things that I looked at in the draft of this particular 
prescription drug bill was whether or not it provided seniors choice, 
whether it provided them access, security and affordability.
  First of all, on choice, the seniors that I represent in Iowa, they 
want to know that they are going to have choices in this particular 
bill. They are tired of a one-size-fits-all government program called 
Medicare that tells them exactly what to do, when to do it, how to do 
it, and takes the decision making away from doctors. This bill gives 
them a prescription drug plan to choose from.
  Second it provides access. In rural Iowa, one has a real concern 
about whether or not the local pharmacy is going to be involved. This 
particular bill gives them access to their local pharmacies.
  Finally, security and affordability, all rural seniors will be 
guaranteed a prescription drug benefit just like they are guaranteed 
drug benefits under all other Medicare benefits, and that once they 
reach $6,000, they will be held harmless.
  This is the bill for rural Iowa, for rural America. Please support 
this bill.
  Support H.R. 4680 for two important reasons.


                      i. prescription drug benefit

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


                          ii. medicare+choice

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

[[Page 12713]]

sharply on the rise. Medicare is therefore in need of modernization and 
the addition of a drug benefit for all beneficiaries, regardless of 
income level or location. The Republican plan falls far short of 
addressing the reality of the problem that many of our seniors face. I 
oppose the Republican proposal for three chief reasons:
  First of all, their proposal is based on the faulty premise that 
insurance companies will write prescription drug plans for seniors. The 
insurance industry admits that this private insurance model will not 
work and leaders in the industry deny that such plans will even be 
offered. Charles N. Kahn, President of the Health Insurance Association 
of American--a group comprised of 294 insurance companies--told The New 
York Times on Feb. 21, 2000: ``I don't know of an insurance company 
that would offer a drug-only policy like that or even consider it.'' 
Mr. Kahn also comments that ``Private drug-insurance policies are 
doomed from the start. The idea sounds good, but it cannot succeed in 
the real world.''
  Even if insurance companies write drug plans for seniors, there will 
be instability in coverage. It is well known that health insurers would 
use the system to move in and out of markets depending on their 
advantage, not seniors' health. We see many examples of such pullouts 
today. This is not right. The Republican plan stresses competition in 
an already-flawed private Medigap insurance market rather than adding a 
prescription drug benefit to Medicare.
  Secondly, the Republican proposal is not affordable: This plan offers 
no defined benefit. It appears to specify only the ``stop loss 
amount''--$2,100/yr, maximum limit on beneficiary out-of-pocket costs--
while private insurers could define deductibles, co-pays, and benefit 
limits. Also, seniors would pay a $250 deductible. Furthermore, their 
plan would break up seniors into various private plans--if even 
written--and thus their bargaining power would be significantly 
reduced.
  Finally, the Republican plan is not accessible to all Medicare 
beneficiaries: their plan fails to provide direct premium assistance 
for low- and middle-income Medicare beneficiaries. Any senior with an 
income above $12,600 will not have the assurance of lower premiums. 
This plan, therefore, does not protect against the risk of industry 
``cherry picking'' and the negative selection of the sickest and 
disabled seniors. This is a Darwinian scheme where only the strongest 
survive.
  Thus, I believe the Republican plan falls far short of providing a 
real drug benefit for our nation's seniors. The leaderships' denial to 
hear our alternative is a travesty.
  I therefore rise in opposition to the Republican proposal.
  Mr. STARK. Mr. Speaker, I yield myself such time as I may consume to 
bring this portion of the debate on our side to an end.
  Mr. Speaker, we are denied, not only the last word, which I am sure 
the gentleman from California (Mr. Thomas) will have, but we have been 
denied the opportunity to offer a bill.
  Had we had the opportunity, we would of course have suggested that we 
spend more money, hundreds of billions of dollars more money to provide 
a seamless guaranteed dependable benefit to seniors who could have the 
unknowing security that the government would be there in the last 
resort if no insurance company showed up, to see that they got the 
pharmaceutical drugs at a reasonable price.
  At a time in this country when we are so wealthy and when the 
surpluses are predicted to be many trillions of dollars, to me it is 
obscene to be sitting, offering to give away inheritance taxes and 
telephone taxes and taxes that nobody really cares about when we could 
be insuring our seniors, indeed we could be insuring our children and 
other folks in this country. But, no, this money is denied and is 
reserved for the wealthy few who would benefit from Republican tax 
cuts.
  Oppose the Republican bill, please, and support whatever minor motion 
to recommit we are finally allowed.
  Mr. THOMAS. Mr. Speaker, it is my pleasure to yield 1 minute to the 
gentleman from Georgia (Mr. Collins), a member of the Committee on Ways 
and Means.
  Mr. COLLINS. Mr. Speaker, I rise in support of this prescription drug 
bill for our seniors. It will be voluntary for our seniors. It will 
give them the freedom to choose as to whether or not to stay in a plan 
they may already be in or to choose this plan which they may need 
assistance for.
  It will assist low income. It will also assist those who have high 
drug costs and catastrophic coverage. Others it will assist in a 
different way. It will help reduce the cost of drugs by having the 
administration deal with drug companies. It is very similar to the way 
we do with the Federal Employee Health Benefit Program, lowering the 
cost of those who have to pay the co-pay and those who would be between 
the low income and the catastrophic.
  It is not a one-size-fits-all; that is for sure. I respect those who 
have the program or the plan that one size does fit all. But we must be 
aware of their plan, because of the back-end costs of their plans. We 
must be aware of the costs of any plan because, under the pay-as-you-go 
system, those who work today will pay the benefits.
  It is not a perfect plan, but it is moving in progress, a work in 
progress.
  Mr. THOMAS. Mr. Speaker, I yield myself the balance of the time.
  Mr. Speaker, this really is an opportunity for the House of 
Representatives to address a problem that, frankly, needed to be 
addressed for some time. The two plans have a lot in common, but I do 
think people need to understand that the Democrats' plan does not 
afford seniors choice.
  The bipartisan plan, not only affords them choice, but requires at 
least two options in every area of the country.
  The way in which we have structured our plan, the Congressional 
Budget Office says we save seniors twice as much as the Democrats' plan 
out-of-pocket. We provide pocketbook protection now. It is not true of 
the Democrats' plan because they wrote a plan to fit a budget window. 
Not until 2006 does their catastrophic or out-of-pocket protection plan 
really begin.
  AARP, the American Association of Retired Persons, has said the 
bipartisan plan is in Medicare, notwithstanding whatever may be said on 
the floor today. The American Association of Retired Persons has said 
this is an entitlement regardless of whatever may be said on the floor 
today.
  Most importantly, it provides seniors comfort and assurance that the 
bipartisan plan is a prescription drug benefit in statute. No amount of 
an attempt to confuse seniors should alter that position. This is in 
Medicare. It is an entitlement, and the benefit is in statute. Do not 
take my word for it. Take the word of the American Association of 
Retired Persons. Vote yes on H.R. 4680.
  The SPEAKER pro tempore. The gentleman from Virginia (Mr. Bliley) and 
the gentleman from Michigan (Mr. Dingell) each will control 30 minutes.
  The Chair recognizes the gentleman from Virginia (Mr. Bliley).
  Mr. BLILEY. Mr. Speaker, I yield myself 5 minutes.
  Mr. Speaker, I am pleased to give my full support to the bill before 
the House today, H.R. 4680, the Medicare Prescription Drug Act of 2000. 
This bill would provide for a universal, voluntary, and affordable drug 
benefit to Medicare beneficiaries.
  I have been studying this issue for some time. In addition to the 
five hearings our Subcommittee on Health and Environment held on this 
issue, I worked closely with a group of my colleagues on the Committee 
on Commerce for months studying different models for delivering drug 
coverage to seniors that offer them choice and affordability.
  Through this effort, a number of things have become clear to me. 
First, seniors want security, and they want choice. H.R. 4680 ensures 
that every Medicare beneficiary will have access to at least two 
choices of drug coverage everywhere in America. This proposal also 
provides, for the first time in the Medicare program, protections for 
those beneficiaries who have the highest out-of-pocket spending on 
drugs. True security is knowing one will not have to mortgage one's 
home or become Medicaid dependent because of one's prescription drug 
needs.
  Second, HCFA's house is not in order and cannot be asked to take on 
the task of administering a new drug benefit. One example of problems 
we have experienced with HCFA in the area of drug coverage is its 
policy on coverage for self-injectable drugs. Prior to August 1997, 
HCFA covered self-injectable drugs when administered by a physician. In 
August of that year, however,

[[Page 12714]]

HCFA issued a program memorandum to its carriers instructing them not 
to pay for drugs that can usually be self-administered, regardless of 
the patient's health condition.
  As a result of this instruction, many Medicare beneficiaries lost 
coverage for drugs that had been previously covered. These were MS 
victims and people in the late stages of cancer who could not possibly 
be expected to inject themselves with a needle. I find this totally 
unacceptable and am pleased that this bill includes language to 
permanently correct this problem.
  H.R. 4680 creates the Medicare Benefits Administration which will 
administer the new drug program as well as the Medicare+Choice program. 
I am not convinced that HCFA can be reformed to better meet beneficiary 
needs. More fundamental change is needed, a shift in the culture of the 
agency from one that micromanages benefits and administers prices to 
one that is more flexible, that adapts to changes in the marketplace, 
and has the expertise to negotiate with providers on behalf of Medicare 
beneficiaries. I believe the Medicare Benefits Administration is 
designed to meet beneficiaries' needs.
  Third, many seniors have drug coverage today that they like and want 
to keep. A key feature of our plan is that it is voluntary, and it 
preserves the good coverage that many seniors have today. Our proposal 
encourages employers to continue providing coverage by giving them 
access to the new reinsurance pool for beneficiaries with extraordinary 
drug costs.
  Mr. Speaker, Medicare needs to be modernized to reflect how health 
care is delivered today. By denying the seniors the types of choices we 
all have as Members of Congress, we are relegating them to a system of 
care that does not meet the high standards we want for ourselves, our 
staffs, and our families.
  I have been in this institution for 20 years, and I have seen 
thousands of bills come up for votes, some small in scope, some large. 
Many of the laws we pass do not stand the test of time. Medicare is an 
exception to that rule. It has fundamentally shaped the way health care 
is delivered in this country and provides needed coverage for millions 
of seniors and disabled Americans. But the program is not keeping pace 
with the change we have seen in medicine. A pill or an injection has, 
in many instances, replaced the need for a surgeon to use his scalpel. 
This is amazing progress that should continue without our interference.
  This bill is about more than drug coverage. It is about ensuring that 
the Medicare program continues to meet the needs of a growing number of 
elderly and disabled. It has my full support, and I urge all my 
colleagues to support it as well.
  Mr. Speaker, I reserve the balance of my time.

                              {time}  1600

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

[[Page 12715]]

that a senior picked one year would be available the next year.
  Unfortunately, we will not be allowed to vote for a real benefit. The 
Democratic substitute would have provided a guaranteed, affordable 
prescription drug coverage for every single senior and disabled person 
in Medicare. Whether they live in Miami, Ohio or Miami, Florida, 
seniors would be guaranteed the same benefit at the same premium. The 
Democratic substitute would guarantee seniors and the disabled access 
to the medically necessary drugs their doctor prescribes, and it would 
guarantee that they could continue to get their medication from their 
local pharmacist. Finally, the Democratic substitute should provide 
sufficient subsidies so that the benefit would remain affordable to 
all. That is why the Republican leadership will not even allow the 
House to vote on our substitute.
  Members of Congress don't have a choice before them today. We must 
reject a bill that would undermine all the principles that has made 
Medicare the most successful social program in history. And we will 
need to wait for another day, or another Congress, to vote for a 
package that provides a real Drug benefit in the Medicare program.
  Mr. BLILEY. Mr. Speaker, I yield 1 minute to the gentlewoman from New 
Jersey (Mrs. Roukema) for purposes of a colloquy.
  Mrs. ROUKEMA. Mr. Speaker, I thank the gentleman from Virginia for 
yielding me this time to have a colloquy with our colleague, the 
gentleman from California (Mr. Thomas).
  Mr. Speaker, as the gentleman from California knows, we have heard 
concerns from our States, several of them, like New Jersey, 
Pennsylvania, and Connecticut, regarding the potential negative 
interactions between State drug assistance programs and H.R. 4680, this 
bipartisan bill. Has the gentleman been made aware of this, and have 
the issues been resolved as we have presented them to the gentleman?
  Mr. THOMAS. Mr. Speaker, will the gentlewoman yield?
  Mrs. ROUKEMA. I yield to the gentleman from California.
  Mr. THOMAS. I would respond that, yes, the issues have been resolved.
  Mrs. ROUKEMA. Can the gentleman briefly describe them?
  Mr. THOMAS. Yes, I can describe them.
  First, we federalize the dual eligibles. We give the governors more 
than $22.8 billion in additional funds to spend in their States.
  Second, the bill allows maximum flexibility to take current State 
programs and so-called wraparound or integrate them with the Federal 
program.
  But most importantly the legislation creates a commission which is 
charged with developing a program to address these transitional issues. 
And it says in the legislation that the proposal must protect current 
program participants and the financial interests of the States 
involved. Those States, who on their own offer seniors Medicare 
prescription drugs should have a special handling to handle the 
transition with the Federal and the State program.
  Mrs. ROUKEMA. I thank the gentleman for his instructions.
  Mr. Speaker, another point that I would like made explicitly clear is 
ensuring that insurance providers will not pull out of an area, leaving 
seniors without any coverage. As you know, in New Jersey and other 
areas, HMOs participating Medicare Plus Choice have been leaving the 
program leaving many seniors without coverage. It is my understanding 
that under the bill, that at least two insurance providers must be 
available in each area. To ensure that at least two providers are 
always available, the government will step in and reimburse providers 
at a higher rate if necessary to make sure they are available to 
seniors. I would like reassurance from the Chairman that under this 
bill, seniors will not have to worry that HMOs will leave the program 
leaving them without any coverage.
  Mr. THOMAS. Mr. Speaker, my answer to the Gentlelady from New Jersey 
is that this bill guarantees that at least two plans will be available 
in each area.
  In fact, the Medicare Benefits Administrator would administer the 
program in a manner such that all eligible individuals would be assured 
of the availability of at least two qualifying plan options in their 
area of residence, at least one of which is a drug plan. If necessary 
to ensure such access, the Administrator would be authorized to provide 
financial incentives, including the partial underwriting of risk, for a 
PDP sponsor to expand its service area under an existing prescription 
drug plan to adjoining or additional areas, or to establish such a plan 
(including offering such plan on a regional or nationwide basis).
  It would be written in the statute that all participating seniors 
will be guaranteed at least two plans from which to choose. I thank the 
Gentlelady for seeking this important clarification.
  Mr. DINGELL. Mr. Speaker, I yield 2 minutes to the gentleman from 
California (Mr. Waxman), who was denied, along with the rest of the 
Committee on Commerce, the opportunity to discuss this matter in 
committee through this irregular process.
  Mr. WAXMAN. Mr. Speaker, I thank the gentleman from Michigan for 
yielding me this time.
  The bill the Republican leadership in this House has insisted on 
bringing to the floor today is a sham. It purports to provide drugs for 
the Medicare population. It does not. It purports to give seniors peace 
of mind that their drug costs will be covered. It does not. It claims 
to cover the drugs they need, and it does not do that.
  Instead, it would allow insurance companies to establish restrictive 
formularies and use that as a barrier in the way of patients getting 
medically necessary drugs if those drugs are not on the formularies. It 
would not assure that Medicare beneficiaries could get their drugs from 
their neighborhood drugstore. It would not assure that coverage was 
available in every area of the country. Seniors in rural areas would be 
particularly likely to find no coverage is available to them.
  What does the Republican bill do if it does not spend money to give 
seniors a drug benefit? It gives money to America's insurance 
companies. It tries to bribe them into offering an insurance policy 
that covers just drugs. The companies say they cannot cover just drugs. 
It will not be affordable, and it will not be available.
  Evidently, our Republican colleagues still regret that we passed 
Medicare. If they had their way, they would design Medicare the way 
they have this drug plan: use taxpayer dollars to pay insurance 
companies, and then cross their fingers and hope the insurance 
companies will provide health care to America's seniors and disabled 
people.
  No guaranteed benefit, differing premiums all over the country, no 
guarantee of affordability or availability and no accountability. 
America's seniors would not have wanted that from Medicare, and they 
will not be fooled by a sham plan for drug coverage now.
  What we are seeing here is really about a difference between 
Democrats and Republicans on Medicare. Democrats know Medicare works. 
We do not want to throw it out. We want to make it better. We want to 
add to Medicare a real, defined, guaranteed prescription drug benefit.
  We want a benefit that's available wherever you live in this country, 
whatever your income, whether you're sick or not, whether you're in 
traditional Medicare or in managed care.
  Republicans want to go back to the days before Medicare and tell 
seniors to depend on private insurance companies.
  It they are so sure that's the right way to go, why are they so 
afraid to let us vote on the plan the Democrats and the President want? 
Why are they so afraid of adding a real benefit to Medicare for all our 
senior and disabled citizens?
  Mr. BLILEY. Mr. Speaker, I yield 5 minutes to the gentleman from 
Florida (Mr. Bilirakis), the chairman of the Subcommittee on Health and 
Environment of the Committee on Commerce.
  Mr. BILIRAKIS. Mr. Speaker, I thank the gentleman for yielding me 
this time, and I rise in support of H.R. 4680, the Medicare RX 2000 
Act.
  The addition of prescription drug coverage to the Medicare program is 
one of the most important things we can do this year. I am saddened, 
Mr. Speaker, by the strictly partisan and political debate that has 
arisen on this vital issue and by the efforts to continuously interrupt 
these proceedings with nonsensical procedural motions. This conduct 
reinforces my sincere belief that the Democratic leadership does not 
want to take real action this year on this issue, just like they failed 
to address the problem for over 40 years when they controlled the 
House.
  This is a critical concern for seniors throughout the country, and it 
should

[[Page 12716]]

not be reduced to merely a political issue or to one of spite. I am 
reminded of a debate in the 104th Congress when we worked successfully 
to save Medicare from bankruptcy. At that time the Democratic 
leadership exploited the crisis facing Medicare by engaging in 
demagoguery for political gain. The Washington Post editorial board 
rightly labeled them ``Medagogues.'' Now they are playing politics with 
seniors in desperate need of prescription drugs. In the words of the 
Great Communicator, Ronald Reagan, ``There they go again.''
  Many of the latest drug and biological therapies are targeted at 
preventing or curing diseases that affect senior citizens and persons 
with disabilities. However, the Federal health insurance program 
serving these individuals, Medicare, currently, as we know, lacks 
coverage for most prescription drugs and biologicals. As a result, one-
third of Medicare beneficiaries have no drug coverage at all. The two-
thirds of beneficiaries who have coverage have to obtain it through a 
variety of sources, often at considerable expense.
  Last year, I introduced legislation to help the neediest and sickest 
seniors now. The bill before us, although not perfect, helps those 
seniors in greatest need and those who are the sickest and, thus, has 
my support. There is always room for improvement, but in the meantime, 
we can help the most vulnerable seniors now.
  This bill includes provisions that I introduced with my colleague, 
the gentleman from Florida (Mr. Shaw), to ensure access to self-
injectable drugs. Currently, Medicare part B only covers drugs that are 
furnished ``incident to a physician's service.'' In August 1997, 
however, HCFA issued a memorandum to Medicare carriers stating that 
Medicare part B would not reimburse for any drugs that were 
administered incident to a physician's service, if the drugs were 
capable of being self- injected.
  This memorandum, which reversed a previous policy of 30 years, does 
not take into account the health status of each patient. Many 
beneficiaries, including cancer and MS patients, are not able to self-
inject their necessary medications, even if the drug is normally able 
to be self-administered. The provision included in H.R. 4680 guarantees 
the Medicare beneficiaries who are receiving lifesaving injectable 
drugs and biologicals will continue to have access to those therapies 
under Medicare part B.
  It is also important that this reimbursement continue under Medicare 
part B because the physician's service must also be reimbursed. The 
bill before us will ensure that patients who cannot self-administer 
injectable drugs will be able to have those drugs administered by their 
physician and receive coverage under the Medicare program.
  In closing, Mr. Speaker, I want to again emphasize that for 40 years 
the Democratic leadership, which controlled the House, did nothing to 
help seniors gain access to prescription drugs. The problem existed 
then as it does today, and yet they made little or no mention of it. 
This Congress is working to solve the problem on a bipartisan basis, 
and I urge Members to demonstrate their concern by voting for a bill 
which will help beneficiaries in need today.
  Mr. DINGELL. Mr. Speaker, I yield 1 minute to the gentleman from 
Maryland (Mr. Wynn), to join the American Federation of Teachers in 
opposition to the Republican bill and in support of our bill.
  Mr. WYNN. Mr. Speaker, I thank the gentleman for yielding me this 
time.
  I rise in strong opposition to this bill. It is a bad product of a 
bad process. They shut out the Democrats today from introducing the 
Democratic alternative, and now they have on the floor essentially a 
bad bill.
  There are two ways to approach this. On the Democratic side, we have 
an expansion of Medicare, a guaranteed affordable benefit for all 
seniors who need coverage to help with prescription drugs. On the 
Republican side, we have a premium-driven system that basically is 
designed to benefit insurance companies.
  Now, I will tell my colleagues why this is problematic. The benefit 
is not guaranteed. They have a higher deductible. They have a higher 
premium. As a matter of fact, we do not have a deductible. They have a 
$250 deductible. It is a bad idea.
  We should not put this issue of prescription drug coverage in the 
hands of the private HMOs, and I will tell my colleagues why. We are 
already down here concerned about HMOs and are trying to pass a 
Patient's Bill of Rights, trying to get the right to see a specialist, 
trying to get the right for emergency care. The same people that are 
denying those fundamental rights are now going to be handling 
prescription drug coverage. I do not think that makes a great deal of 
sense.
  I believe we ought to opt for the Democratic alternative and reject 
the Republican proposal and reject the Republican process.
  Mr. BLILEY. Mr. Speaker, I yield 2 minutes to the gentleman from 
Pennsylvania (Mr. Greenwood), a member of the committee.
  Mr. GREENWOOD. Mr. Speaker, I thank the gentleman for yielding me 
this time.
  I would like to read from a letter I received recently from a 70-
year-old widow who has been widowed for 14 years. She writes, ``I am in 
pain daily, and I cannot correct this problem because of financial 
difficulty. I have stopped taking Prilosec, Zoloft, Lossomax, Zanax, 
and Zocor. I need these drugs filled monthly and simply cannot afford 
them. I also am in need of a pain pill, and I have not been able to 
purchase it. I have cried myself to sleep over this dilemma.''
  I think if this lady from my district were here today, she would cry 
to witness this process. Because over and over again Members from the 
Republican side of the aisle have stood up and talked about how to 
solve the problem, and over and over again Members from the Democratic 
side of the aisle have walked to the microphone with nothing more to 
offer than blasting away at the plan we have tried to put together in a 
bipartisan fashion.
  We have been criticized for partisanship. Early last year the 
gentleman from California (Mr. Thomas) and others put together, 
extended a wide invitation to Democrats to join Republicans to work out 
a plan. A few Democrats came over. Some of them have stayed with the 
bipartisan plan. Most of the others have been driven off by leadership, 
told not to participate with Republicans in writing a bipartisan bill.
  Why? It has been obvious from day one. The plan is that the Democrats 
want power back, and they think the way to get power back is to stop 
everything that gets done in this House. And so my colleagues on the 
other side will say anything and do anything to do it, including 
denying senior citizens prescription drugs, including my constituent's 
prescription drugs. And she ought to cry herself to sleep over this 
process.

                              {time}  1615

  There is a heck of a lot more in common between these plans than 
there is different, and we ought to work on the difference.
  What did the AARP say? ``We are pleased that both the House 
Republican and Democratic bills provide a voluntary prescription drug 
benefit in Medicare, a benefit to which every Medicare beneficiary is 
entitled. And while there are differences, both bills describe the core 
prescription drug benefit in statute.''
  The AARP, the most respected seniors' organization in the country, 
says we ought to work together and stop fighting in a partisan way.
  Mr. DINGELL. Mr. Speaker, I yield 1 minute to the distinguished 
gentleman from Louisiana (Mr. John) for purposes of debate in support 
of this legislation, along with the American Association of People with 
Disabilities, who join in support of the legislation.
  Mr. JOHN. Mr. Speaker, I rise today in order to express my 
frustrations with the consequences of the Republican plan.
  Today the last Medicare Choice HMO servicing the seventh district of 
Louisiana announced they are pulling out. This is not the case unique 
to Louisiana's seventh district. This is the case

[[Page 12717]]

all over America, especially in rural America.
  In a few short years since inception of this Medicare+Choice, my 
seniors have been forced to change health services numerous times. The 
Republican prescription drug proposal would privatize prescription drug 
coverage in the same manner that Medicare+Choice privatized Medicare 
health care services. And this plan, too, is doomed to fail.
  Why would the Republicans choose to model a failed plan that has 
failed seniors? A prescription drug benefit is important to all 
seniors, not just geographically where they are from.
  The Democratic plan guarantees all seniors will have equal access to 
prescription drugs. The Democratic plan guarantees all seniors will pay 
the same for prescription drugs.
  I urge all of my colleagues to join with me in opposing the 
Republican unrealistic plan and support the Democratic plan.
  Mr. BILIRAKIS. Mr. Speaker, I am pleased to yield 2 minutes to the 
gentleman from Georgia (Mr. Deal).
  Mr. DEAL of Georgia. Mr. Speaker, I thank the gentleman for yielding 
me the time, and I rise in support of this legislation.
  Mr. Speaker, most of our lives are regulated by the calendar and the 
clock. But if my colleagues come to my home and sit at my dinner table, 
they will soon find that it is the pill box that is both the calendar 
and the clock.
  The reason is that my 93-year-old mother, who had to have one of her 
legs amputated, lives with us, along with my wife's 86- and 84-year-old 
father and mother. They have had major surgery, and one suffers from 
Alzheimer's.
  So as my colleagues sit around our table, they will soon see that it 
is the pill box that tells us what day of the week it is and what hour 
of the day, because it is the medication that they must take that keeps 
them going. So I understand the importance of prescription drugs.
  But these three senior citizens who are now members of our family, 
and we are so pleased to have them, have served over three-quarters of 
a century as public school teachers in our State of Georgia; and, as 
such, they earned the right as a part of their retirement to a medical 
prescription drug program.
  One thing that is very important to them is that this Congress not 
force them to go into a program they do not want. Age and failing 
health have deprived them of many of their choices, and they want to 
retain this one to keep what they have.
  But, also, one of the things that they are concerned about is that 
they have lived frugal lives on school teachers' salaries and they do 
not want catastrophic illness to wipe that out. I am pleased that our 
plan provides that kind of financial security for them.
  So tonight, to Mary, to George, and to Ida Lu, this plan is for them. 
And do not forget to take your medication, by the way.
  Mr. DINGELL. Mr. Speaker, I yield 30 seconds to the distinguished 
gentlewoman from California (Mrs. Capps) in support of the legislation. 
She is joined in support of this legislation by the American 
Association of University Women.
  Mrs. CAPPS. Mr. Speaker, I rise to express my deep disappointment 
about the bill before us and this process, which does not even allow a 
vote on an alternative plan.
  As a nurse, I would never shortchange seniors out of their 
prescription drugs. That is what this legislation does. It is an empty 
bill which will lead to empty pill bottles for seniors across this 
country. Simply put, this bill sells our seniors short.
  Let us pass secure, affordable prescription drug coverage today for 
all older Americans, not a risky program that subsidizes private 
insurance companies.
  I urge a no vote.
  Mr. BLILEY. Mr. Speaker, I yield 3 minutes to the gentleman from New 
York (Mr. Lazio) a member of the committee.
  Mr. LAZIO. Mr. Speaker, first I would like to congratulate the 
chairman of the full committee for his leadership in driving us toward 
a solution. I would like to also thank the gentleman from Texas 
(Chairman Archer) from the Committee on Ways and Mean. I would like to 
thank all my colleagues on the task force that helped put this together 
and, in particular, the gentleman from North Carolina (Mr. Burr) who 
worked so hard on this issue.
  Without their leadership and vision, we just simply would not be here 
today with a bill that will improve the lives of millions of Americans.
  Make no mistake about it. We have an opportunity for those who can 
just lift their eyes up a little bit higher to see to do the fair and 
right thing for millions of American seniors and disabled.
  Mr. Speaker, senior citizens and disabled Americans are being 
squeezed between fixed incomes and rising drug prices. Every day many 
of them are forced to maybe a Hobson's choice between a flat line and 
the bread line, between paying for life-saving medications or next 
week's trip to the grocery, seniors like 62-year-old Diane, who worry 
about whether she will be able to keep a roof over her head when she 
retires in a couple years.
  Well, why does she worry? Because Diane has an IRA, a small pension, 
a number of chronic conditions that include diabetes, high blood 
pressure, and a degenerative disk disease. Diane's $1,100 per month 
medication bill will effectively cut her take-home family income in 
half.
  Mr. Speaker, these are the people who are in the fight of their lives 
to beat chronic and debilitating diseases. It is immoral to add 
monetary worries to their burden.
  Seniors and disabled Americans deserve to live secure lives, to live 
secure in the knowledge that the drugs that will save them medically do 
not ruin them financially.
  Mr. Speaker, we are now taking action to give them that security. The 
House bipartisan plan relies on the public-private partnership model 
that has proven so successful in the past. It is completely voluntary. 
It provides universal coverage to all Medicare beneficiaries who want 
it, senior citizens and the disabled alike.
  It contains a provision that will prevent financial ruin and will 
save older and disabled Americans from being thrown into poverty 
because of unexpected medication costs. It provides incentives to 
private insurers to offer subsidized drug coverage to the seniors and 
disabled Medicare beneficiaries. And the block purchasing power created 
by these new private sector plans will allow discounts of up to 25 
percent to be negotiated with drug manufacturers.
  Mr. Speaker, for the last 12 years, the State of New York has had its 
own prescription drug plan. Yet, even a large State like New York 
cannot implement a program with the same economies of scale and savings 
that a national plan would provide.
  Recent estimates show that between the years 2002 and 2008 this plan 
could save New York over $1 billion. Mr. Speaker, this is a good plan. 
It is a plan that helps our seniors and our disabled Americans but in a 
way that will not spawn bloated bureaucracies, budget-bursting 
spending, and Government waste.
  Let us do the right thing. Let us pass this bill.
  Mr. DINGELL. Mr. Speaker, I yield 1 minute to the distinguished 
gentleman from Arkansas (Mr. Berry). He is joined in his opposition to 
the Republican bill by the National Council of Churches of Christ in 
America.
  Mr. BERRY. Mr. Speaker, I thank the gentleman from Michigan for 
yielding me the time.
  Mr. Speaker, this is a sad day in this House. The reason it is so sad 
is because the Republicans have presented us with not a bill, not a 
plan, but a sham that is so bad and so ugly that they do not even want 
it compared to anything else. We have not been allowed a substitute. We 
have not been allowed an amendment. And this is a sad thing for the 
Republicans to do to the good people of this country.
  We have real people with real problems and real pain suffering every 
day

[[Page 12718]]

because they cannot afford their prescription medicine. The Republican 
plan is nothing more than an attempt to deceive our senior citizens and 
protect the outrageous profits of the prescription medicine makers of 
this country.
  It is a shame that we would allow this important debate to take place 
with no alternatives at all offered. I urge the defeat of the 
Republican plan.
  Mr. BLILEY. Mr. Speaker, I yield 1 minute to the gentlewoman from New 
York (Mrs. Kelly).
  Mrs. KELLY. Mr. Speaker, I thank the gentleman for yielding me the 
time.
  I rise to enter into a colloquy with the gentleman from Florida (Mr. 
Bilirakis) if he is willing.
  Mr. Speaker, access to affordable prescription drugs and health care 
coverage is a pressing issue for seniors in my district, which is why I 
support the Medicare Prescription Drug Act.
  I recently introduced legislation, H.R. 4753, which will create 
Medicare Consumer Coalition Demonstrate projects under the 
Medicare+Choice program. These nonprofit, regional coalitions would 
boost seniors' purchasing clout by allowing large groups of independent 
beneficiaries to join together and, through market-driven negotiations, 
drive down costs.
  I would ask the gentleman to review this legislation and to work with 
me to see that the concepts embodied in the Seniors Health Care 
Empowerment Act are incorporated into this and other Medicare reform 
initiatives that we consider in the coming months.
  Mr. Speaker, I yield to the gentleman from Florida (Mr. Bilirakis).
  Mr. BILIRAKIS. Mr. Speaker, I appreciate the gentlewoman bringing to 
my attention and to our attention the innovative legislation which she 
has recently introduced.
  Consumer coalitions could serve a dual purpose by educating the 
beneficiaries who are negotiating for lower health care costs. I 
appreciate her comments on the legislation before us and on her 
legislation, which is an innovative concept. The proposal is certainly 
worthy of a close review, and I look forward to working with her on 
this subject in the coming months.
  Mr. DINGELL. Mr. Speaker, I yield 1 minute to the distinguished 
gentlewoman from California (Ms. Eshoo) to discuss matters which she 
was denied an opportunity to discuss in any appropriate proceeding in 
our committee.
  Ms. ESHOO. Mr. Speaker, I thank the distinguished ranking member of 
the House Committee on Commerce for yielding me the time.
  I want to underscore something today that I think at the base of all 
of this is enormously sad; and that is, for the people that are tuned 
in and listening, this indeed is the House of Representatives, the 
Congress of the United States of America, the freest nation in the 
world. At the heart of our democracy is debate. And yet, the majority 
of this House will not and did not allow one side to bring their idea 
to the floor of the house.
  What are they afraid of? I can debate their idea. I do not support 
many parts of their plan. That is my prerogative on behalf of the 
people that I represent. I do not think insurance companies should be 
subsidized in order to bring about a Medicare drug prescription 
coverage for our seniors.
  But I think the saddest part of this today is that they are afraid of 
our idea. Why be afraid of what this side could bring to the floor of 
the House?
  In addition, I want to correct the Record. Democrats did do 
something. They established Medicare for the people of our great 
Nation.
  Mr. BLILEY. Mr. Speaker, I reserve the balance of my time and suggest 
that the minority use some more of their time.
  Mr. DINGELL. Mr. Speaker, I yield 1 minute to the gentleman from 
Michigan (Mr. Stupak) to discuss matters that he was denied the 
opportunity to discuss in this strangled proceeding in our committee.
  Mr. STUPAK. Mr. Speaker, I urge my colleagues to reject this 
Republican non-plan for prescription drug coverage.
  The Republican non-plan does not guarantee that seniors will be 
offered drug coverage. It does not guarantee that seniors in rural 
areas like I represent will have access to their medications from their 
local pharmacy or that they will have access to the medications they 
need.
  Instead, the Republican non-plan provides a subsidy to insurance 
companies so seniors can continue to pay high prices to drug companies 
for prescription drugs.
  Seniors do not want us to give a handout to the insurance and drug 
companies. They want affordable drugs now.

                              {time}  1630

  Let us stand with America's seniors. Let us support a real benefit 
for our seniors, not a cash benefit to the drug and insurance 
companies. This has not been a bipartisan day. The GOP majority will 
not even allow us a Democratic substitute or even a Democratic 
amendment to their bill. They will not even debate the merits of a 
prescription drug coverage policy for our seniors. That is why we have 
a nonplan before us. It does not guarantee us anything. It does not 
provide a benefit. It provides nothing for our seniors.
  The SPEAKER pro tempore. Mr. Dingell.
  Mr. DINGELL. Mr. Speaker, I believe it is customary to refer to a 
Member as the gentleman from Michigan.
  The SPEAKER pro tempore. The gentleman from Michigan.
  Mr. DINGELL. Am I incorrect in that, Mr. Speaker?
  The SPEAKER pro tempore. The gentleman from Michigan is recognized.
  Mr. DINGELL. I thank the Chair for observing the regular order.
  Mr. Speaker, I yield 1 minute to the distinguished gentleman from 
Texas (Mr. Green), since he was denied an opportunity to discuss this 
matter in our committee.
  Mr. GREEN of Texas. Mr. Speaker, I thank my ranking member, the 
gentleman from Michigan (Mr. Dingell), for yielding me this time.
  Mr. Speaker, I am surprised my Republican colleagues can get up the 
last couple of hours with a straight face and talk about their 
bipartisan bill. I rise in opposition to this prescription drug 
gimmick. It is not bipartisan. They even refused us an option to have a 
vote on an alternative plan. We should be putting the benefits in the 
hands of senior citizens and not in the hands of insurance companies. 
We should be providing a secure and reliable benefit instead of 
creating a new bureaucratic nightmare, a new Medigap policy for seniors 
to have to fight with. We should be building Medicare up and not 
tearing it down.
  The Republican bill is flawed. It gives seniors the right to buy an 
insurance policy. They want prescriptions. They do not want an 
insurance policy. It allows the insurance companies to limit the number 
of medications it covers. It restricts them from using their local 
pharmacy. The Republican bill does nothing but get them past the 
November elections, but our seniors who built this country, who fought 
in World War II and the Korean War, they know this is a trick, and they 
are not going to be fooled by it.
  The Republican bill costs seniors more each year and it gives them 
less. The deductibles can increase leaps and bounds. Our seniors 
deserve more than a voucher. We know this bill is bad for seniors. That 
is because it is supported by the pharmaceutical companies who are 
already charging them millions more than they should.
  Mr. DINGELL. Mr. Speaker, I yield 1 minute to the distinguished 
gentleman from Florida (Mr. Deutsch), to discuss matters he was denied 
an opportunity to discuss in our committee.
  Mr. DEUTSCH. Mr. Speaker, the Republicans have been calling this the 
Medicare prescription drug legislation. I think it would be more 
accurately described as the anti-Medicare prescription drug 
legislation. Essentially, what this legislation would do is destroy 
Medicare. That is what it does. It changes the entire concept that 
Medicare has had for over 30 years in this country of a universal 
health care system. If one makes more than $12,600, they get nothing. 
So it is welfare for health. The incredible broad-based political 
support that we have for Medicare in America would be lost if this

[[Page 12719]]

plan passes. What it also does is effectively creates a voucher system 
for anyone above that amount of income.
  The author of this bill, the chairman of the Subcommittee on Health, 
has said that our accusations of saying that this is not part of 
Medicare are not true. Well, this plan is being created that has 
nothing to do with Medicare, and calling it Medicare does not make it 
Medicare. If we put the Transportation Department into Medicare, it 
still would be the Transportation Department. It would not be Medicare. 
I urge its defeat.
  Mr. DINGELL. Mr. Speaker, I yield 30 seconds to the distinguished 
gentleman from Minnesota (Mr. Minge).
  Mr. MINGE. Mr. Speaker, I would like to thank the gentleman from 
Michigan (Mr. Dingell), the ranking member of the Committee on 
Commerce, for yielding me this time.
  Mr. Speaker, I would like to share with my colleagues the position of 
the Fairness Caucus. The Fairness Caucus is committed to ending the 
regional disparities that exist with respect to Medicare today. The 
fact that seniors in some parts of the country are already receiving 
prescription drugs as a part of Medicare, at no premium cost, while 
seniors in other parts of the country have to buy prescription drugs 
with their own dollars, this is fundamentally unfair. People are paying 
the same amounts in regardless of where they live, but the benefits are 
different. We must end these regional inequities. The motion to 
recommit will have language making that commitment in an unambiguous 
way, and I urge that we support the motion to recommit.
  Mr. DINGELL. Mr. Speaker, I yield 30 seconds to the distinguished 
gentleman from Washington (Mr. Baird).
  Mr. BAIRD. Mr. Speaker, it is right that this body address the 
problem of prescription medications. It is far past time. I have worked 
on this issue since I came to this Congress. But as we do so, we must 
not make the mistake of perpetuating and exacerbating a fundamental 
inequity in the Medicare system right now. That inequity is this: 
although every single American pays into the rate at the same payroll 
rate, we actually receive differential benefits depending upon where we 
live, such that small urban, suburban and rural hospitals in my 
district are closing; people are doing without benefits while 
beneficiaries elsewhere in the country are receiving prescription drug 
benefits already.
  This is wrong. The Republican bill is a placebo bill. It makes one 
feel good if they believe in it, but it does nothing of substance. We 
must redress the inequities in the AAPCC rates.
  Mr. DINGELL. Mr. Speaker, I yield 30 seconds to the distinguished 
gentlewoman from North Carolina (Mrs. Clayton).
  Mrs. CLAYTON. Mr. Speaker, I urge Members to vote against this bill 
because this bill indeed does nothing for seniors in general but 
particularly for those who live in rural areas. There is a differential 
for those of us who live in rural areas. Already we have lack of 
access. This does not indeed provide any additional care for them. This 
puts into the system the differential that is there now. So I object to 
this bill because it is bad for rural America.
  Mr. Speaker, I urge the rejection of this unfair, insensitive and 
closed Rule.
  Under this Rule, the Democratic Substitute is not allowed. The 
Democratic Substitute would have provided a guaranteed prescription 
drug benefit, and that guarantee is vital to any prescription drug 
plan. Indeed, this Rule does not allow any Substitute. It is unfair, 
undemocratic and should be rejected.
  We must make sure that our Seniors, especially those in Rural 
communities, are able to obtain medicines essential to a comfortable 
and pain free quality of life. Many Seniors do not have drug coverage, 
and they also do not have access to the discounts and rebates that 
insured people receive. Older Americans and people with disabilities, 
without drug coverage, typically pay 15 percent more for the same 
prescription drug as those with insurance. And, that gap is growing.
  Uncovered Medicare beneficiaries purchase one-third fewer drugs but 
pay nearly twice as much out-of-pocket. Chronically ill, uninsured 
Medicare beneficiaries spend over $500 more out-of-pocket than those 
with coverage. This is true, despite the fact that these ill 
beneficiaries purchase fewer prescriptions than those with coverage.
  Rural beneficiaries are particularly vulnerable. There is a Rural 
Differential that must be considered and that challenges us to 
construct a plan that benefits all Seniors. More than half of all Rural 
elderly live below 200 percent of the Federal poverty level. Rural 
Medicare beneficiaries are over 50 percent more likely than urban 
beneficiaries to lack prescription drug coverage for the entire year. 
Moreover, Rural seniors are less likely to have private Medicare 
supplemental insurance coverage than their urban counterparts--seventy-
five percent to sixty-five percent. Rural seniors are far less likely 
to have access to Medicare-Choice Plans with drug coverage--seventy-
nine percent to sixteen percent. And Rural Seniors will spend more out 
of pocket for prescription drugs than Urban Seniors--twenty-four 
percent of Urban seniors will spend more than $500, compared to thirty-
two percent of Rural seniors. Therefore, any prescription drug 
legislation, before it can be said that it helps our Seniors, must 
contain certain basic benefits.
  First and foremost, it must be affordable. The proposed legislation 
fails that test.
  Next, it must be available. The proposed legislation fails this test.
  Then, the benefits it provides must be set. There must be continuity 
in coverage. Again, the legislation fails this test.
  And, finally, the plan must provide choice. The proposed legislation 
also fails this test.
  While the proposed legislation fails each of these tests for most of 
our seniors in this Nation, as I indicated, it is especially brutal in 
its failure to address the needs of our seniors in Rural America. 
Proportionately, there are more low income senior citizens in Rural 
America than in any place else in the Country. The high deductibles, 
combined with the premium payments and the co-payments will discourage 
many seniors in Rural America from enrolling in the plan.
  Subsidies, under the proposal, are provided to insurers rather than 
seniors, apparently with the hope that premium costs will be lower. 
That is false hope. And, that false hope is further found in the 
premise of the proposal that insurers will participate and that seniors 
will have access to prescription drug plans. There are insurers who 
choose not to participate in Medigap, and that is especially true in 
Rural America.
  Mr. Speaker, we have a unique opportunity to help millions of our 
senior citizens with their critically needed prescription medicine. Far 
too many of our seniors are having to make a choice between the 
medication that they critically need and other basics, such as food and 
shelter.
  With the essential elements I have described, we can construct a 
prescription drug plan that helps rather than hurts our seniors. Reject 
this rule.
  Mr. DINGELL. Mr. Speaker, I yield 30 seconds to the distinguished 
gentlewoman from Nevada (Ms. Berkley).
  Ms. BERKLEY. Mr. Speaker, I thank the distinguished gentleman from 
Michigan (Mr. Dingell) for yielding me this time.
  Mr. Speaker, I oppose this bill because it fails to provide seniors 
in my district who are crying out for prescription drug relief with 
comprehensive coverage under Medicare. I favor a drug plan that is 
voluntary, affordable and reliable, one in which seniors feel secure 
and know that the Congress has not abandoned them.
  I urge my colleagues to vote against this half-hearted effort and 
stand up for seniors by demanding a comprehensive drug benefit under 
Medicare now.
  Mr. DINGELL. Mr. Speaker, I yield 1 minute to the distinguished 
gentleman from Indiana (Mr. Roemer).
  Mr. ROEMER. Mr. Speaker, I thank the gentleman from Michigan (Mr. 
Dingell) for yielding me this time.
  Mr. Speaker, President Harry Truman received the very first honorary 
card from President Johnson when Medicare was created. We need some 
Truman honesty about what this bill is about.
  Charles Kahn, the president of the Health Insurance Association of 
America, a group comprised of 294 insurance companies, said this, 
quote, ``we will withhold judgment on the House Republican bill until 
we see its details. Nevertheless, we continue to believe that the 
concept of a so-called drug-only private insurance simply would not 
work in practice,'' unquote.
  I am the first to work in a bipartisan way around here on balancing 
the budget, reforming welfare, improving

[[Page 12720]]

education; but a plan has to be given to me that will work.
  This will not work. The insurance companies who are getting the 
subsidy even say it will not work. Mr. Kahn says wait until we see the 
details.
  What is the copay? We do not know. What are the deductibles? We do 
not know. What are the premiums? We do not know. Let us sit down in a 
bipartisan way after we reject this plan and work for the senior 
citizens of this country to get a plan based on Medicare that will 
work.
  Mr. BLILEY. Mr. Speaker, I yield 3 minutes to the gentleman from 
Tennessee (Mr. Bryant).
  Mr. BRYANT. Mr. Speaker, I thank the gentleman from Virginia (Mr. 
Bliley) for yielding time to me.
  Mr. Speaker, I too want to add my appreciation for all the hard work 
that the chairman has done in coming up with this very fine bill.
  As I sat here and listened to some of the debate, I realized that 
talk is cheap but prescription drugs are not cheap. They are expensive 
and they are getting more expensive every day. Seniors need our help 
today, not 4 years from now, 6 years from now.
  Some of us in Congress have been working together to develop a truly 
bipartisan plan because there is no role for politics or partisanship 
in this debate. There should not be.
  The health and financial security of millions of our seniors are at 
stake. And, yes, we do need to tackle and reduce the cost of medicine, 
but not with a Washington-based one-size-fits-all program.
  Every senior is a different person. Every situation is unique, and we 
must maintain a health care system that recognizes the sanctity of the 
personal doctor-patient relationship.
  Our plan guarantees that every senior, in a big city or in a small 
town across America, has access to prescription drug coverage under 
Medicare.
  Now, there are several benefits that are unique to our plan. First, 
our plan gives citizens the right to choose, the right of choice. 
Seniors will have a choice of at least two plans. Every senior has 
different health care needs, and that is why they may need different 
health care plans to choose from. What is more, our plan is completely 
voluntary, so if a senior likes the coverage they already have, they 
can stick with it.
  Rather than enforcing government price controls, which some would 
argue in this body, our plan uses group buying power to reduce the 
costs of prescription drugs by as much as 25 to 39 percent. Millions of 
these seniors have benefited from these expanded choices and cheaper 
prices by banding together in private organizations like AARP. They get 
all the benefits of Washington-mandated price controls but without 
rules and regulations and choice limitations and inefficiency.
  Seniors who already have that private coverage should also be able to 
keep it and not be forced into a big government plan. And our plan has 
always provided real protection from being wiped or having to file 
bankruptcy because of high prescription drug costs. Once a beneficiary 
under our plan spends $6,000 out of pocket, she pays not another dime 
for prescription medicines that year.
  Our plan provides beneficiaries with this security and peace of mind 
while other proposals fall short. The Democrats tried to respond to 
this part of our proposal, but they have resorted simply to budget 
gimmickry. We offer this protection now and not in 6 years.
  I invite my congressional Democrats to work with us. This should not 
be a Republican, should not be a Democrat partisan issue. It is an 
American issue. It is a senior issue.
  I urge my colleagues to support this bill so we can give our seniors 
and the disabled the prescription drug coverage they need now.
  Mr. DINGELL. Mr. Speaker, I yield 1 minute to the distinguished 
gentlewoman from Connecticut (Ms. DeLauro). She is joined in her 
opposition to this outrageous bill by the AFL-CIO and the UAW.
  Ms. DeLAURO. Mr. Speaker, a month ago the Republican leadership was 
told by their pollsters that if they did not at least start to sound 
like they cared about helping seniors with the cost of prescription 
drugs they would pay a heavy political price. That is why we are here 
today, saddled with a sham Republican prescription drug bill and a 
rigged process. The Republican proposal does not provide all seniors 
with an affordable Medicare prescription drug benefit. It benefits 
insurance companies. It is complex, takes the very worst from an 
already failing HMO system. If one needs a medicine that their HMO does 
not approve, their only recourse is to appeal to the insurance company. 
My God, we know that that does not work.
  Today I was notified by an insurance company that offers 
Medicare+Choice HMO coverage to seniors in Connecticut that they are no 
longer going to be able to offer them coverage. Seniors know that they 
cannot rely on the HMOs, but the Republican leadership is building 
their plan on this crumbling foundation. The Democratic Medicare 
prescription drug plan is rooted in the Medicare program that seniors 
know and trust. It provides affordable, voluntary, dependable coverage, 
and a guaranteed benefit. It gives seniors security and dignity. Reject 
the Republican sham bill.
  Mr. DINGELL. Mr. Speaker, I yield 1 minute to the distinguished 
gentlewoman from California (Ms. Lee). She is joined in her opposition 
to this bill by Americans for Democratic Action.
  Ms. LEE. Mr. Speaker, let me thank the gentleman from Michigan (Mr. 
Dingell) for yielding me this time and just emphasize my very strong 
opposition to the Republican prescription coverage plan.
  Mr. Speaker, this proposal really claims to help seniors, but in 
actuality all it really does is help insurance companies. This plan 
will not guarantee access to coverage, and it will limit seniors' 
choice of drugs and pharmacies. It could even raise costs for some 
seniors with medical problems. It is really a sham, and it is a 
disgrace that the Republicans would not allow a debate on a Democratic 
proposal which includes a full prescription benefits package including 
$21 billion in assistance to Medicare health providers and a $3.6 
billion rural health package.
  Why do we want to have our seniors to be subjected to have to deal 
with the HMOs and the insurance companies for their medications when 
these for-profit businesses have really been an impediment to quality 
patient care for our senior citizens? Our seniors do deserve better. 
Let us go back to the drawing board. Let us allow for a full debate, 
one that really does make sense, which will help all of our seniors 
ensure that they live a safe and sound, long, healthy life.

                              {time}  1645

  Mr. DINGELL. Mr. Speaker, I yield 30 seconds to the distinguished 
gentlewoman from Wisconsin (Ms. Baldwin).
  Ms. BALDWIN. Mr. Speaker, I thank the gentleman for yielding me the 
time.
  Mr. Speaker, I come to the floor on behalf of the seniors in my 
district who demand affordable, comprehensive, prescription drug 
coverage to ask what are you afraid of. Instead of debating this very 
serious issue, we are playing election-year politics with the health of 
our parents and grandparents, like my 94-year-old grandmother.
  What are my colleagues afraid of? The only plan we will consider 
today throws money at special interests. It is a plan that subsidizes 
the very same private insurance companies that have fought our efforts 
to hold them accountable, and allows for pharmaceutical companies to 
continue their current price gauging.
  What are my colleagues afraid of? My constituents demand an answer.
  Mr. BLILEY. Mr. Speaker, I yield 3 minutes to the gentleman from 
Florida (Mr. Stearns), a member of the committee.
  Mr. STEARNS. Mr. Speaker, in response to the last speaker, I hope she 
has a chance just to listen. I have here a letter from Governor Tommy 
Thompson who talks about this particular bill, and lauds the bill and 
says it is very important that Congress pass this bill.
  I hope the gentlewoman from Wisconsin (Ms. Baldwin) will take some 
time this afternoon and perhaps read

[[Page 12721]]

what Governor Thompson says about this from her State. I would be glad, 
if the gentlewoman wants to, the gentlewoman can come up now, if she 
has an urgent need to read this letter.
  Mr. Speaker, I say to the gentleman from Michigan (Mr. Dingell) who 
is talking about bipartisanship, we have three times as many people who 
are going to vote for our bill than voted and supported the gentleman's 
bill that the gentleman called bipartisan last year dealing with 
managed care.
  I think when we talk about bipartisanship, at least we have three 
times the weight of power to say it is bipartisan than the gentleman 
did.
  Mr. Speaker, I rise obviously in support of H.R. 4680, the Medicare 
Prescription Act of 2000. Our plan is market based, this is the key, 
rather than relying upon a government-run program, like many of the 
Democrats have proposed time and time again.
  My colleagues might ask themselves, why is this so important, because 
we know that one of the overwhelming components of any plan that we 
offer that it must provide individuals with choice. Joshua Hammond 
wrote a great book on the seven cultural forces that define who we are 
as Americans, and the number one item is choice.
  Choice must be the centerpiece of anything we propose, and that is 
why as Republicans and some of the Democrats on that side who agree 
have joined us.
  Our bill fosters competition by empowering individuals with buying 
power, and it encourages consumers to spend health care dollars much 
more efficiently than the Democrat plan.
  Here is the key. It guarantees Medicare beneficiaries Nationwide that 
they would have access to at least two competing prescription drug 
plans. Let me repeat that, not just one, it is choice, but two 
competing prescription drug plans. To ensure that rural areas are not 
underserved, the plan must also offer local pharmacy access, insuring 
that drugs would be available for seniors in rural areas and not just 
through the mail.
  Recently in the press, the human genome project has been all over the 
front pages. It has now completed its work. The medications that will 
come on the market in the future as a result of the scientific 
breakthroughs that will occur because of the genome project will be 
prodigious, those will be available to Medicare with the passage of 
this bill.
  The real question my colleagues and our seniors should think about, 
here is what they are faced with. Who do they trust? That is the key 
question. Who do they trust with their prescription drug plan? Do they 
want to make their own choices and control the money that they spend, 
or do they want the government, the United States Government-run plan 
that leaves them without any say so on what works best for them?
  Mr. DINGELL. Mr. Speaker, I yield 30 seconds to the distinguished 
gentlewoman from Florida (Ms. Brown).
  Ms. BROWN of Florida. Mr. Speaker, I speak from Florida, and let me 
just say to my colleague from Florida (Mr. Stearns), we are being hurt 
most by this, not one program left in your county in Marion County. 
This Republican bill is a slap in the face to every senior citizen 
struggling to pay for a needed medicine.
  The leadership of this House does not support this bill, they never 
have. They do not support Medicaid. In fact, in 1995, they said they 
hoped it would wither on the vine. A zebra cannot change its stripes, 
Mr. Speaker, and the American people are not buying this sham.
  American seniors deserve a program that works. This is a life-
threatening situation. This is a hollow bill, vote no.
  Mr. BLILEY. Mr. Speaker, how much time is remaining?
  The SPEAKER pro tempore (Mr. LaHood). The gentleman from Virginia 
(Mr. Bliley) has 6\1/2\ minutes remaining. The gentleman from Michigan 
(Mr. Dingell) has 12 minutes remaining. The gentleman from Virginia has 
the right to close.
  Mr. DINGELL. Mr. Speaker, I yield 30 seconds to the distinguished 
gentlewoman from the Virgin Islands (Mrs. Christensen), who is joined 
in her opposition to this outrageous bill by the National Medical 
Association.
  Mrs. CHRISTENSEN. Mr. Speaker, I rise as a family physician who has 
taken care of seniors on Medicare and worked with them as they tried 
unsuccessfully to stretch their limited funds to purchase the 
medications they needed.
  H.R. 4680 does not represent prescription coverage for all seniors, 
at best it is an initial misstep to jeopardizing Medicare completely 
through privatization.
  The leadership of this body is doing a disservice by not even 
allowing the Democratic alternative to the floor for debate.
  I ask my colleagues to reject H.R. 4680, and I ask our colleagues to 
work with us to give our older citizens the kind of help they deserve 
and the medication they need and support the Democratic proposal.
  Mr. DINGELL. Mr. Speaker, I yield 1 minute to the distinguished 
gentleman from North Carolina (Mr. Price).
  Mr. PRICE of North Carolina. Mr. Speaker, any prescription drug 
benefit worthy of the name will provide a defined benefit as part of 
Medicare. It must be available to all seniors who wish to take 
advantage of it. The Republican plan does not measure up. It simply 
throws some taxpayers' money at some insurance companies in the hopes 
they will offer affordable coverage.
  It just will not work. The national president of Blue Cross/Blue 
Shield recently said, ``This idea provides false hope to America's 
seniors because it is neither workable nor affordable.''
  The Republican plan also defies logic. To get $1,000 worth of 
prescription drug coverage a senior would have to pay $1,070. Who is 
going to do that? Who wants to pay more to get less? Certainly not my 
constituents.
  The 1.1 million Medicare beneficiaries in North Carolina deserve a 
real prescription drug benefit, and it is outrageous that through 
partisan maneuvering we were not even allowed to offer a substitute 
plan today.
  Why are the Republicans scared of a vote? They must know we have a 
better plan, a real plan, and one that will help seniors get the 
coverage they need.
  Mr. DINGELL. Mr. Speaker, I yield 30 seconds to the distinguished 
gentlewoman from Texas (Ms. Jackson-Lee).
  Ms. JACKSON-LEE of Texas. Mr. Speaker, in the dark of night, the 
Republican Majority's Committee on Rules voted for nothing for American 
seniors. However, I refuse today to add to their farce by voting again 
for nothing. I will not vote for this Republican bill that provides no 
prescription drug benefit for the seniors in my district.
  I will not support the continuance of the travesty of seniors having 
money only to pay for rent and food and dying because they cannot pay 
for their needed prescription drugs. The Democrats have a plan that has 
no deductible, a plan that will allow a minimum premium of $25, and 
cover $2,000 of costs. In my own community, HMOs and health coverage 
insurance companies have jumped up and run out of town, or simply shut 
down. I will not condemn my seniors to dialing a phone number to some 
insurance company and there is a busy signal because that insurance 
company refuses to cover the costs of the prescription drugs. This 
Republican bill is a sham, vote it down and get on with the work we 
should do, provide a guaranteed drug prescription plan for America's 
Seniors as the Democrats' plan provides.
  Mr. Speaker, I rise to respond to this newest attempt by the majority 
to mislead this nation's seniors into the belief that they are truly 
concerned about prescription drug coverage.
  What the majority is proposing today fails as a legitimate response 
to the Democrats longstanding position that America's seniors need a 
comprehensive drug benefit.
  Today, the elderly constitute 13 percent of the population, yet 
account for more than one-third of the nation's annual drug 
expenditures.
  Since 1968, the percentage of seniors' expenditures on prescription 
drugs has risen from $64 annually to $848 annually which amounts to 4.1 
percent of their incomes.
  Additionally, despite the fact that 65 percent of the 39 million 
beneficiaries have some private or public coverage many still do not 
have adequate supplemental coverage for drug costs.

[[Page 12722]]

  To address this gap in medical coverage for our nation's elderly, 
President Clinton proposed a Medicare reform plan, but at that time, 
the Republicans felt that addressing this issue was not politically 
expedient.
  Yet, in light of the hotly debated Presidential and Congressional 
races, it appears that the Republicans have suddenly gotten religion!
  This latest ``revelation'' by the majority is not even that, in fact, 
this bill is merely a revelation that the polls indicate it is 
politically necessary for Republicans to at least address the issue of 
prescription drug benefits, even if their bill is void of any real 
relief for this nation's seniors.
  Senior and consumer advocates groups alike oppose the majority's 
Prescription Drug bill because it is fundamentally at odds with any 
meaningful prescription drug bill.
  Groups like the National Council of Senior Citizens, the National 
Committee to Preserve Social Security and Medicare and Families USA, 
the National Senior Citizens Law Center, and the American Association 
of People with Disabilities oppose the majority's plan.
  We must pay attention to this nation's seniors when they tell us that 
the majority's Rx 2000 Act risks the health and well being of not only 
seniors, but also people with disabilities.
  It is particularly enlightening when the head of the Health Insurance 
Association of America even admits that the Republican's concept of a 
``so-called drug-only private insurance simply would not work in 
practice.''
  The seniors living in the 18th Congressional District of Texas 
located in the City of Houston want real relief from the high price of 
prescription drugs. They have always told me that you have to watch 
what someone does, not what they say, in order to know what kind of 
person you are dealing with.
  Let me tell you what you are dealing with under the Republican plan 
because to hear it from their mouths one would believe that all this 
nation's seniors and the disabled would be provided with the 
prescription drug coverage they need . . . however, that is not the 
case.
  The Democratic prescription drug plan is secure because it is part of 
the Medicare system. However, the Republican scheme relies on private 
insurance.
  The Democratic plan provides comprehensive coverage through the 
Medicare program while the Republican scheme hopes the private insurers 
will provide these benefits. Can we really trust such a scheme that is 
based on the profit of big insurance companies that are in the business 
to make money without regard to affordability or reliability.
  The biggest issue in the debate on a Medicare drug plan is how much 
will seniors be required to pay out of pocket in order to receive this 
benefit. Under the Democratic plan there is no deductible, while the 
Republicans want our nation's elderly to pay $250 a year. If the 
household were two elderly people than they would be expected to pay 
$500 a year in medical prescriptions before they earn their benefit to 
prescription medicines.
  Under the Democratic plan, Medicare will pay half the costs of 
medicines up to $2000 and by the year 2009 Medicare will pay half of 
all prescription expenses for seniors up to $5000.
  The Republican's will only pay half the cost of medicines up to 
$2100, increasing at the rate of inflation in drug prices. Under the 
Democratic plan you can see that the real meaning of catastrophic is 
understood to be a great often, sudden calamity, which ordinary people 
could not possibly plan to overcome without assistance.
  For this reason, the democratic plan has a catastrophic benefit limit 
of $4,000, after which Medicare pays all costs. Unfortunately, the 
Republicans have a total life time limit of $6,000.
  I am disappointed that the needs of seniors is not at the top of the 
House's legislative agenda for consideration of a bill that should have 
addressed the life and death issue of affordable prescription 
medication, especially for our nation's elderly poor.
  Therefore, I ask that, my Colleagues on both sides of the isle use 
reason and right mindedness to find the best road to a real 
prescription for what is ailing our nation's Medicare System, which 
every American knows is affordable prescription medication for our 
nation's seniors.
  Our nations' elderly have given to this nation the opportunity to 
successfully compete in today's ever-changing world, which has lead to 
great economic prosperity for all of us.
  Now that our economy and our nation's people are in a position to 
reap benefits, that are far in a excess of our current needs, we should 
not hesitate to provide those benefits, which are needed by our nations 
disabled and senior citizens.
  This is a small investment for our nation so that our society can 
benefit from a healthier senior population, which happens to be a vital 
and growing sector of our nation's economy.
  It is a fact that the baby boomer generation who will be retiring 
over the next decade will be the wealthiest group of seniors in our 
nation's history. For this reason their long health and active 
participation as consumers in our nation's economy makes great economic 
sense.
  I urge my colleagues to oppose this critically flawed semblance of a 
prescription drug plan offered by the majority and support meaningful 
prescription drug plans to improve the health of our nation's elderly.
  Mr. DINGELL. Mr. Speaker, I yield 30 seconds to the distinguished 
gentleman from Rhode Island (Mr. Weygand).
  Mr. WEYGAND. Mr. Speaker, I rise in opposition to this proposal, as I 
did earlier today, as we have been doing all day long today. What has 
been happening to the American public is outrageous that, indeed, in 
fact, that the Republicans will propose today a bill that will actually 
cost us more in the long run, provide us less with prescription drug 
coverage and do a disservice to all of our seniors.
  I ask all of our Members to vote no on the bill. I ask all of our 
Members not to even entertain any inkling of an idea that this will be 
good for our senior citizens, and I hope that all of us will be able to 
come back with a real bill for prescription drug coverage that will be 
part of Medicare, not part of a bailout for insurance companies.
  Mr. DINGELL. Mr. Speaker, I yield 1 minute to the distinguished 
gentleman from New Jersey (Mr. Menendez).
  Mr. MENENDEZ. Mr. Speaker, as Republicans deny us a chance to offer 
real prescription benefit under Medicare, I think of my mother and the 
millions of seniors like her across this country who may not understand 
Washington politics, but know all too well the every day struggle to 
buy their medications. Like so many seniors, my mother relies solely on 
her Social Security benefit, and yet her drug costs totals more than 
half of her monthly income.
  Mr. Speaker, very simply stated, the Republican plan is the first 
step towards privatizing Medicare and denying Democrats the opportunity 
to provide the only real Medicare benefit.
  Mr. WEYGAND. Mr. Speaker, I raise a point of order. I object to the 
use of this exhibit that is here. Pursuant to clause 6 of rule XVII, I 
object to the use of this exhibit by the gentleman from New Jersey (Mr. 
Menendez).
  The SPEAKER pro tempore. Under the rule, the Chair will put the 
question to the House. The question is: Shall the gentleman from New 
Jersey (Mr. Menendez) be permitted to use the exhibit?
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. WEYGAND. Mr. Speaker, I object to the vote on the ground that a 
quorum is not present and make the point of order that a quorum is not 
present.
  The SPEAKER pro tempore. Evidently a quorum is not present.
  The Sergeant at Arms will notify absent Members.
  The vote was taken by electronic device, and there were--yeas 371, 
nays 48, not voting 15, as follows:

                             [Roll No. 352]

                               YEAS--371

     Abercrombie
     Ackerman
     Aderholt
     Andrews
     Armey
     Baca
     Bachus
     Baird
     Baker
     Baldwin
     Ballenger
     Barcia
     Barrett (NE)
     Barrett (WI)
     Bartlett
     Barton
     Bass
     Bateman
     Becerra
     Bereuter
     Berkley
     Berman
     Berry
     Biggert
     Bilbray
     Bilirakis
     Bishop
     Blagojevich
     Bliley
     Blumenauer
     Blunt
     Boehlert
     Boehner
     Bonilla
     Bono
     Borski
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brady (TX)
     Brown (FL)
     Bryant
     Burr
     Burton
     Buyer
     Callahan
     Calvert
     Camp
     Campbell
     Canady
     Cannon
     Capps
     Cardin
     Carson
     Castle
     Chabot
     Chambliss
     Chenoweth-Hage
     Clay
     Clement
     Clyburn
     Coble
     Collins
     Combest
     Condit
     Conyers
     Cooksey
     Costello
     Coyne
     Cramer
     Crowley
     Cubin
     Cummings
     Cunningham
     Davis (FL)
     Davis (VA)
     Deal
     DeFazio
     DeGette
     Delahunt
     DeLauro
     DeLay
     DeMint
     Diaz-Balart
     Dickey
     Dicks
     Dixon
     Doggett
     Dooley
     Doolittle
     Doyle
     Dreier
     Duncan
     Dunn
     Ehlers

[[Page 12723]]


     Ehrlich
     Engel
     Eshoo
     Etheridge
     Everett
     Farr
     Fattah
     Fletcher
     Foley
     Forbes
     Ford
     Fossella
     Fowler
     Frank (MA)
     Franks (NJ)
     Frelinghuysen
     Frost
     Gallegly
     Ganske
     Gejdenson
     Gekas
     Gephardt
     Gibbons
     Gilchrest
     Gillmor
     Gilman
     Gonzalez
     Goode
     Goodlatte
     Gordon
     Goss
     Graham
     Granger
     Green (WI)
     Greenwood
     Gutierrez
     Gutknecht
     Hall (OH)
     Hall (TX)
     Hansen
     Hastings (FL)
     Hastings (WA)
     Hayes
     Hayworth
     Herger
     Hill (IN)
     Hill (MT)
     Hilleary
     Hilliard
     Hinchey
     Hinojosa
     Hobson
     Hoeffel
     Hoekstra
     Holden
     Holt
     Horn
     Hostettler
     Houghton
     Hoyer
     Hulshof
     Hunter
     Hyde
     Inslee
     Isakson
     Istook
     Jackson (IL)
     Jefferson
     Jenkins
     John
     Johnson (CT)
     Johnson, E. B.
     Johnson, Sam
     Jones (NC)
     Jones (OH)
     Kaptur
     Kennedy
     Kildee
     Kilpatrick
     Kind (WI)
     King (NY)
     Kingston
     Kleczka
     Klink
     Knollenberg
     Kolbe
     Kucinich
     Kuykendall
     LaFalce
     LaHood
     Lampson
     Lantos
     Largent
     Larson
     Latham
     LaTourette
     Lazio
     Leach
     Lee
     Levin
     Lewis (CA)
     Lewis (GA)
     Lewis (KY)
     Linder
     Lipinski
     LoBiondo
     Lofgren
     Lowey
     Lucas (KY)
     Lucas (OK)
     Luther
     Maloney (NY)
     Manzullo
     Martinez
     Mascara
     McCarthy (MO)
     McCollum
     McCrery
     McGovern
     McHugh
     McInnis
     McIntyre
     McKeon
     McKinney
     McNulty
     Meehan
     Meeks (NY)
     Menendez
     Metcalf
     Millender-McDonald
     Miller (FL)
     Miller, George
     Minge
     Moakley
     Mollohan
     Moore
     Moran (KS)
     Morella
     Myrick
     Nadler
     Napolitano
     Nethercutt
     Ney
     Northup
     Norwood
     Nussle
     Oberstar
     Obey
     Olver
     Ortiz
     Ose
     Owens
     Oxley
     Packard
     Pallone
     Pascrell
     Pastor
     Paul
     Payne
     Pease
     Peterson (MN)
     Peterson (PA)
     Petri
     Phelps
     Pickering
     Pickett
     Pitts
     Pombo
     Pomeroy
     Porter
     Portman
     Price (NC)
     Pryce (OH)
     Quinn
     Rahall
     Ramstad
     Rangel
     Regula
     Reyes
     Reynolds
     Riley
     Rivers
     Rodriguez
     Roemer
     Rogan
     Rogers
     Rohrabacher
     Ros-Lehtinen
     Rothman
     Roukema
     Roybal-Allard
     Royce
     Rush
     Ryan (WI)
     Ryun (KS)
     Sabo
     Salmon
     Sanchez
     Sanders
     Sandlin
     Sanford
     Sawyer
     Saxton
     Scarborough
     Schaffer
     Schakowsky
     Scott
     Sensenbrenner
     Serrano
     Sessions
     Shadegg
     Shaw
     Shays
     Sherman
     Shimkus
     Shows
     Shuster
     Simpson
     Sisisky
     Skeen
     Skelton
     Smith (MI)
     Smith (NJ)
     Smith (TX)
     Smith (WA)
     Snyder
     Souder
     Spence
     Spratt
     Stabenow
     Stark
     Stenholm
     Strickland
     Stump
     Stupak
     Sununu
     Talent
     Tauscher
     Tauzin
     Taylor (NC)
     Thompson (CA)
     Thompson (MS)
     Thornberry
     Thune
     Thurman
     Tiahrt
     Toomey
     Traficant
     Turner
     Udall (CO)
     Udall (NM)
     Upton
     Velazquez
     Visclosky
     Vitter
     Walden
     Walsh
     Wamp
     Waters
     Watkins
     Watt (NC)
     Watts (OK)
     Weiner
     Weldon (FL)
     Weller
     Wexler
     Whitfield
     Wicker
     Wilson
     Wise
     Wolf
     Woolsey
     Wynn
     Young (AK)
     Young (FL)

                                NAYS--48

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

                             NOT VOTING--15

     Archer
     Cook
     Crane
     Edwards
     Filner
     Goodling
     Kasich
     Maloney (CT)
     Markey
     McIntosh
     Moran (VA)
     Pelosi
     Stearns
     Vento
     Waxman

                              {time}  1718

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


                      Personal Point of Privilege

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


                             Point of Order

  Mr. WEYGAND. Mr. Speaker, I raise a point of order.
  The SPEAKER pro tempore. The gentleman from Rhode Island will state 
his point of order.
  Mr. WEYGAND. I object to the use of this exhibit, Mr. Speaker, 
pursuant to clause 6 of rule XVII.
  Mr. THOMAS. Mr. Speaker, I ask unanimous consent that during 
consideration of H.R. 4680, all Members be permitted to use exhibits in 
debate.

[[Page 12724]]

  The SPEAKER pro tempore. Is there objection to the request of the 
gentleman from California?
  Mr. WEYGAND. I object, Mr. Speaker.
  The SPEAKER pro tempore. The Chair did hear an objection.
  The question is: Shall the gentleman from Massachusetts (Mr. Olver) 
be permitted to use the exhibit.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.


                             Recorded Vote

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

                             [Roll No. 353]

                               AYES--326

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

                                NOES--92

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

                             NOT VOTING--16

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

                              {time}  1747

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


                         parliamentary inquiry

  Mr. THOMAS. Mr. Speaker, parliamentary inquiry.

[[Page 12725]]

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


                             Recorded Vote

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


                         Parliamentary Inquiry

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

                             [Roll No. 354]

                               AYES--224

     Aderholt
     Allen
     Andrews
     Baca
     Baird
     Baldacci
     Baldwin
     Barcia
     Barrett (WI)
     Barton
     Becerra
     Berkley
     Berman
     Berry
     Bishop
     Blagojevich
     Blumenauer
     Bonior
     Borski
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Camp
     Capps
     Cardin
     Carson
     Chabot
     Chambliss
     Clay
     Clayton
     Clement
     Clyburn
     Condit
     Conyers
     Costello
     Cox
     Coyne
     Cramer
     Crowley
     Cummings
     Danner
     Davis (IL)
     Davis (VA)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch
     Dicks
     Dingell
     Dixon
     Doggett
     Doyle
     Dunn
     Edwards
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Foley
     Ford
     Frank (MA)
     Frost
     Gallegly
     Ganske
     Gejdenson
     Gephardt
     Gilman
     Gonzalez
     Goodlatte
     Gordon
     Green (TX)
     Hall (OH)
     Hall (TX)
     Hastings (FL)
     Hill (IN)
     Hilliard
     Hinchey
     Hinojosa
     Hobson
     Hoeffel
     Holden
     Holt
     Hooley
     Horn
     Hoyer
     Inslee
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     John
     Johnson (CT)
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy
     Kildee
     Kilpatrick
     Kind (WI)
     Kingston
     Kleczka
     Klink
     Kucinich
     LaFalce
     LaHood
     Lantos
     Larson
     Lazio
     Leach
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Lucas (KY)
     Luther
     Maloney (NY)
     Mascara
     Matsui
     McCarthy (MO)
     McCrery
     McDermott
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Metcalf
     Millender-McDonald
     Miller, George
     Minge
     Moakley
     Mollohan
     Moore
     Morella
     Nadler
     Napolitano
     Neal
     Ney
     Nussle
     Oberstar
     Obey
     Owens
     Pallone
     Pascrell
     Pastor
     Paul
     Payne
     Pelosi
     Petri
     Phelps
     Pickett
     Pomeroy
     Portman
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rivers
     Rodriguez
     Roemer
     Rothman
     Roybal-Allard
     Rush
     Sabo
     Salmon
     Sanchez
     Sanders
     Sandlin
     Sawyer
     Scarborough
     Schakowsky
     Scott
     Serrano
     Shays
     Sherman
     Shows
     Sisisky
     Skelton
     Slaughter
     Smith (MI)
     Smith (NJ)
     Smith (WA)
     Snyder
     Spratt
     Stabenow
     Stark
     Stenholm
     Strickland
     Stupak
     Talent
     Tanner
     Tauscher
     Thompson (CA)
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Traficant
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Visclosky
     Walden
     Waters
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Wise
     Wolf
     Woolsey
     Wynn

                               NOES--191

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

                        ANSWERED ``PRESENT''--2

     Callahan
     Wilson
       

                             NOT VOTING--17

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

                              {time}  1813

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

                              {time}  1815

  So the gentlewoman was permitted to use the exhibit in question.
  The result of the vote was announced as above recorded.
  Ms. HOOLEY of Oregon. Mr. Speaker, every senior in the United States 
that needs a prescription should be able to get it filled, no extra 
paperwork, no hunting around to find a private insurance company that 
might be so kind as to decide they are a good enough risk and sell them 
a policy.
  Unfortunately, the bill being rammed through Congress today is all 
smoke and mirrors.
  In this bill, who knows what the premium will be? We do not know. Who

[[Page 12726]]

knows what the benefit will be? We do not know. Who knows what the co-
pay will be? We do not know.
  We have seen private insurance companies in the Medicare+Choice plan 
pull out of areas in Oregon. The insurance companies have said they 
will not be in this plan. Our seniors are demanding coverage through 
the tried-and-true insurer that has not failed them, and that is 
Medicare.
  I want to make sure we take care of our seniors. I want to do it in a 
bipartisan way, but it is very hard to be bipartisan when we cannot get 
an amendment in, and we cannot get an alternative here.
  I urge my colleagues to vote no on this sham of a bill and support 
real drug benefits for our seniors.
  Mr. DINGELL. Mr. Speaker, I yield 2 minutes to the distinguished 
gentleman from New Jersey (Mr. Pallone).
  Mr. PALLONE. Mr. Speaker, I only ask that my Republican colleagues be 
honest about the substance and the procedure here tonight. They are not 
giving us a Medicare prescription drug benefit, and they are not 
willing to work on a bipartisan basis. They have stopped us from 
bringing the Democratic plan to the floor, no substitute, no 
amendments.
  All the Republicans are doing is throwing some money at the insurance 
companies hoping they will sell a drug-only insurance policy that the 
insurance companies have already told us that they will not sell.
  Let us look at this from the point of view of the average American 
senior. That senior will benefit directly from the Democratic plan and 
they will get absolutely nothing from the Republican plan.
  Seniors know what Medicare is. They get their hospitalization under 
Part A. They pay a monthly premium through Part B and they get their 
doctors bills paid.
  What the Democrats are saying, very simply, is we will give them a 
prescription drug benefit in the same way. They pay a modest premium 
and the Government pays for a certain percentage of their drug bills. 
The Democrats give them the benefit through Medicare if that is what 
they want, it is voluntary, and it covers all their medicines that are 
medically necessary as determined by their doctor, not by the insurance 
company.
  What the Republicans tell them is to go out and see if they can find 
an insurance policy to cover their medicine. If they cannot find it, 
tough luck. And even if they do find it, there is no guarantee as to 
what the monthly premiums are going to be or what kind of medicine they 
are going to get.
  Lastly, Mr. Speaker, and just as important, the Republicans leave 
America's seniors open to continued price discrimination. We know that 
our seniors have complained to us about the high cost and about the 
discrimination, about the prices in Canada versus the prices in Mexico, 
or the prices that they pay for their pet.
  The Republicans do nothing to prevent the drug companies from 
charging them whatever they want.
  Mr. BLILEY. Mr. Speaker, I yield 1\1/2\ minutes to the gentleman from 
Michigan (Mr. Upton) a member of the committee.
  Mr. UPTON. Mr. Speaker, I rise in strong support of the bipartisan 
Medicare prescription drug plan that we are now considering this 
evening.
  No senior citizen should be forced to forego needed medication, take 
less than the prescribed dose, or go without other necessities of life 
in order to afford life-saving medication.
  I have watched and I have heard stories and seen seniors literally 
cutting their pills in half so that they can make it last just a little 
bit longer and at a little bit less cost.
  Helping provide this benefit is important. As I have had a whole wave 
of town meetings across my district earlier this spring, I can remember 
one man who brought a bag of prescriptions with him and he said, ``Mr. 
Upton, I know you are an optimist. Can you get this bill done in 2 
weeks, because that is when this prescription is due and when I have to 
get it renewed?'' And I pledged to him I would work very hard to try to 
get a bill through this House this year but, sadly, not within the 2-
week time frame that he wanted.
  As a member of the House Prescription Drug Task Force, I had several 
core goals, tests that this bill does indeed meet. First, I wanted to 
make sure that seniors are not forced into a one-size-fits-all plan run 
by a distant, faceless, Federal bureaucracy and all that means in 
rules, regulations, restrictions, and red tape.
  Second, I wanted my constituents to have the same type of plan of 
choice that the President, all of us as Members of Congress, and the 
rest of the Federal workforce does. I want my constituents to have the 
ability that I have to select from plans that are competing for 
premiums on the basis of how well the restraining health care costs, 
providing access to high quality care.
  I urge all Members to support this bipartisan plan.
  Mr. DINGELL. Mr. Speaker, I yield the balance of the time to the 
gentleman from Ohio (Mr. Brown).
  Mr. BROWN of Ohio. Mr. Speaker, I thank the gentleman from Michigan 
for yielding me the time.
  Mr. Speaker, I have an idea. What if Congress broke Medicare apart? 
Congress would tell seniors to look to the private insurance market if 
they want to piece it back together, the seniors could buy one plan to 
cover doctors' visits, another plan to cover hospital stays, a third to 
cover home health services. Perhaps they could purchase an Aetna plan 
for outpatient care, a Kaiser plan for physical therapy, a Blue Cross 
plan for medical equipment.
  No one in this body, Mr. Speaker, would dare offer a proposal like 
that because it is simply absurd. But why is it any less absurd to 
isolate prescription drugs and require Medicare beneficiaries to carry 
a separate private insurance policy for that benefit?
  If the GOP prescription drug plan is a back-door attempt to privatize 
Medicare, my colleagues should tell us so. If the goal of this Congress 
truly is to help America's senior citizens, this bill simply is not a 
real option.
  Medicare came into being because half of all seniors could not get 
coverage. Medicare, a nationwide plan with a risk pool of 39 million 
strong, is a stable, reliable means of ensuring coverage for our 
seniors. Medicare works because it guarantees the same basic benefits 
to all beneficiaries regardless of where they live, regardless of their 
income, regardless of their social status, regardless of their gender. 
It is fair.
  H.R. 4680 costs $40 billion. Yet, it offers Medicare beneficiaries 
nothing tangible. Think about the kind of questions seniors might have 
about this proposal: Will I be able to buy this new coverage? How much 
will it cost me? How much will the Government contribute on my behalf? 
Which drugs will my doctor be able to prescribe? Is this new benefit a 
good deal for me?
  Under the Republican proposal, the answer to every one of these 
questions is ``who knows.'' When we are allegedly addressing the single 
most important problem for millions of people in this country, that 
answer, Mr. Speaker, should get them fired.
  Vote no on H.R. 4680.
  Mr. BLILEY. Mr. Speaker, I yield the balance of the time to the 
gentleman from North Carolina (Mr. Burr) the distinguished member of 
the committee who has worked long and hard on this bill.
  Mr. BURR of North Carolina. Mr. Speaker, while we have been here 
today to debate this bill, many Medicare beneficiaries across this 
country have taken their medication now for the third time. How long 
must they wait? The time is right today for us to solve this problem.
  Look around us. Look at this Chamber, the power that exists here, the 
Members before us who have handled the legislation that is so important 
to the future of this country. I wonder if in the old Statuary Hall 
just down the hall from here if the words ``sham,'' ``hoax,'' 
``dangerous'' were used when they debated legislation that we still 
look at today that affects our lives.
  I do not believe they did. Because there was a spirit then that there 
were some things that rose above politics.

[[Page 12727]]

There were some things that were so important for future generations 
that it bypassed everything.
  Thomas Jefferson said, ``I am not an advocate of frequent changes in 
laws and institutions, but laws and institutions must advance to keep 
pace with the progress of the human mind.''
  It was a message to us. It was a message to America that we have an 
obligation to revise and update our laws and, importantly, this 
institution.
  This is such an opportunity to take a 35-year-old program and to make 
an addition that technology has now made possible to be part of that.
  Mr. Speaker, it is time for us to see the human face, the seniors, 
the disabled that qualify for Medicare all across this country that are 
waiting for us. They are waiting for us to devise a plan. They are 
waiting for us to create a benefit. I truly believe today that 
Republicans and Democrats are both trying to supply that benefit. But 
we have some very stark differences.
  The President would like to administer this program through the 
Health Care Financing Administration. We want to do it through a new 
entity, not an entity that is bogged down with a system today that they 
cannot run but with one whose only responsibility it is is to 
administer and negotiate a drug benefit.
  The President wants a one-size-fits-all. We believe that choice is 
important. Choice is important at HCFA today because they use private-
sector insurance companies in Part A and Part B and they have the 
flexibility in each region to design that benefit to meet the needs of 
that region.

                              {time}  1830

  Mr. Speaker, my mother deserves the passage of this bill. She is one 
of those seniors that takes quite a bit of medication. Thank goodness 
she is able to afford it. But she deserves it because she has reached 
that golden age; and just as much as she deserves it, my children 
deserve that whatever we do today they can afford tomorrow, and that is 
why it is so delicate an issue.
  Mr. Speaker, this plan makes drug benefits available. It makes them 
affordable. They are voluntary. It has the security and predictability 
that seniors need. It has choice and it does not come from that face we 
know as government.
  It will stand the test of time. It will stand the test of the cost; 
and more importantly, Mr. Speaker, it will stand the weight of a 
doubling of the senior population in America.
  George Bush stood on the steps of this Capitol in 1988, and he said 
in his inaugural address, we are not the sum of our possessions. They 
are not the measure of our lives. In our hearts, we know what matters. 
We cannot hope only to leave our children a bigger car or a bigger bank 
account. We must hope to give them a sense of what it means to be a 
loyal friend, a loving parent, a citizen who leaves his home, his 
neighborhood and his town better than he found it.
  Mr. Speaker, as we close in on July 1, the year 2000, the 35th 
anniversary of the creation of Medicare, I hope it is this body that 
passes that date, having passed a prescription drug benefit so for the 
first time seniors in America will have access to affordable drugs for 
their well-being.
  I thank the gentleman from Virginia (Chairman Bliley) for his help, 
the gentleman from Texas (Mr. Archer), and all the Members that were 
involved.
  Mr. SANFORD. Mr. Speaker, I rise today, with great regret, to oppose 
H.R. 4680. It's been said that the road to hell is paved with good 
intentions. If you follow this debate on prescription drug coverage for 
Medicare beneficiaries you would understand that adage all too well. 
Throughout the debate, both Republicans and Democrats have tried to 
gain a political advantage in this election year by offering competing 
plans that would provide drug coverage. These plans, in the end, 
represent a bidding war for votes. So while I am the first to recognize 
the fact that many people need help with prescription drugs, I am not 
convinced that adding another element to the Medicare program that the 
Trustees say is going bankrupt is the way to get there. In particular, 
Washington's current proposals have two problems: 1. It does little 
good to add prescription drugs to Medicare if it still goes bankrupt, 
and 2. Both plans, particularly the President's leaves room for this 
``cure'' to get much more expensive.
  First, let's identify the problem. Today, one out of every three 
seniors does not have any prescription drug coverage. Compounding that 
problem is that prescription drug costs have increased an average of 
12.4 percent annually, while overall health care spending has increased 
by 5 percent. The average senior spends $500 or less each year on 
prescription drugs. In looking at the proposals, you can see that they 
we are using shotgun rather than a rifle in our aim to fix this 
problem. The plans are designed to offer prescription care to all 
Medicare beneficiaries--including the millionaire widow living in Palm 
Beach--rather than just those who truly need it, low-income seniors 
without prescription drug coverage. It's important to focus because, 
despite current opinion, dollars are limited in Washington.
  The House Republican plan is designed to implement a voluntary, 
market-oriented approach to prescription drug coverage, added as 
Medicare part D. The Republicans guarantee that each region of the 
country will have two competing insurance plans from which to choose. 
The insurance coverage includes a $250 deductible and require seniors 
to co-pay 50 percent of costs up to $2,100 each year. If a senior's 
drug costs go beyond $6,000 then the government and insurance pay all 
of the costs. The new program is projected to cost $37.5 billion over 5 
years and $155 billion over 10. However, that projection includes a 
couple of unlikely assumptions--that there will be no growth in 
Medicare and that 80 percent of seniors will participate in this 
program.
  Remember, only 33 percent of seniors have no drug coverage and only 
28 percent pay more than $500 a year out of pocket. Under this 
voluntary plan, only seniors with little or no coverage and high 
prescription drug costs will sign onto this plan. Such enrollment is 
known as adverse selection and leads to high premiums. This legislation 
will, in the long run, force the taxpayers to pick up the cost of the 
increasing premiums. Taxpayers will also have to guarantee the 
profitability of the insurance plans. If you include adverse selection 
into the formula, the costs of this prescription drug legislation could 
go as high as $600 billion over the next 10 years. The financial risks 
of this bill are just too great. The prescription drug coverage 
proposal starts looking like the Medicare private insurance plans set 
up in the Balanced Budget Act of 1997. Many seniors signed up for those 
plans in the first year, only to see the plans close out the next year.
  The President's plan presented different but equally bad options. His 
plan is optimistically estimated to cost $35 billion over 5 years and 
nearly $300 billion over 10 years. The prescription drug program would 
be a part of the current Medicare system, similar to Medicare part B. 
Monthly premiums begins at $24 and seniors would co-pay 50 percent of 
prescription drug costs up to $2,000. Premiums would go up to $51 a 
month for premiums and the ceiling is lifted to $5,000 a year. Again, 
the proposal is voluntary, so there would also be adverse selection--
making premiums again, much more expensive than now advertised.
  The problem with this plan is that, like all other portions of 
Medicare, the government gets to decide how big the benefit and whether 
or not you even get it. Seniors today can probably already relate to 
this. Since I came to Congress in 1995, more and more seniors tell me 
that they can not longer see their doctor simply because they have 
retired and joined Medicare. Today, Medicare pays 70 percent of what 
the private sector pays for the same procedure. Since the creation of 
Medicare in 1965, payments to providers have been cut 14 times, the net 
result is less access for patients. One can reasonably believe that the 
same will happen under a prescription drug program. Imagine Congress, 
trying to save billions of dollars sometime in the future, cutting 
prescription payments (cost controls) or taking expensive medications 
off the list of approved medications. The government should simply not 
be in the business of making those life or death decisions.
  At the end of the day, I maintain that Congress and the President 
should implement a more comprehensive reform bill that gives seniors 
the power to design their health care coverage. They could choose the 
type of insurance plan they want, whether or not to have prescription 
drug coverage, and how much they are willing to share in the cost 
burden. Such a proposal was offered by the Bipartisan Medicare 
Commission Co-Chairs Representative Bill Thomas and Senator John 
Breaux. The proposal would use the market place to make a more 
financially secure and less expensive plan for seniors. Perhaps when 
the dusts clears and November has passed, calmer heads will prevail.

[[Page 12728]]


  Mrs. FOWLER. Mr. Speaker, the Medicare Prescription Act of 2000 is of 
particular importance to me as I represent hundreds of thousands of 
senior Floridians who are seeing prescription drug costs skyrocket out 
of control forcing many to choose between food and medicine.
  We now have a tremendous opportunity to help millions of senior 
Americans afford the prescription drugs they need, without jeopardizing 
the Medicare benefits many already enjoy.
  Our bipartisan effort offers the best prescription for America. We 
strengthen Medicare while providing prescription drug coverage.
  More importantly--it is affordable, available, and voluntary for all.
  Under this bipartisan plan--seniors will no longer have sticker-shock 
when paying for their medicine. For the first time, they will have 
meaningful bargaining power.
  Unlike the Clinton/Gore plan--we give all seniors and the disabled 
the right to choose an affordable prescription drug benefit that best 
fits their need. They can choose a ``Cadillac'' plan or opt for a more 
affordable ``Honda'' plan--which ever they need.
  We lower costs of prescription drug coverage through group buying 
power--not by having politicians or federal bureaucrats set their 
prices. This will reduce prices by an average 25 percent and up to 39 
percent. The CBO even estimates we will save seniors twice as much than 
the Clinton/Gore plan.
  Our plan also includes a cap on catastrophic drug costs. This cap on 
out of pocket expenses at $6,000 a year gives seniors peace of mind--no 
longer will they be forced to choose between bankruptcy and the drugs 
they need.
  I urge my colleagues to support this important legislation.
  Mr. BENTSEN. Mr. Speaker, I rise in strong opposition to H.R. 4680, 
the Medicare Rx 2000 Act, legislation purporting to provide a new 
prescription drug benefit for America's senior citizens. I believe that 
this bill is fatally flawed and should be defeated.
  While Medicare has been a tremendously successful program in 
providing health care for senior citizens and a better quality of life, 
the rising use and cost of prescription drugs demands congressional 
action. Prescription drugs now account for about one-sixth of all out-
of-pocket health spending by senior citizens. The percent of 
beneficiaries without coverage who cannot afford to buy their medicine 
is about five times higher than those with coverage (10 percent 
compared to 2 percent). Almost 40 percent of those over age 85 do not 
have prescription drug coverage. H.R. 4680 not only does nothing to 
address this crisis in health care but also cruelly raises the hopes of 
America's senior that this problem will be meaningfully addressed.
  Specifically, Mr. Speaker, this plan subsidizes insurance companies 
and sets us on a path of privatizing Medicare. H.R. 4680 provides 
premium subsidies to insurers but does nothing to ensure that these 
premium subsidies are passed on to seniors. Moreover, private insurance 
plans have said that they will not offer this coverage. Scott Serota, 
acting president of Blue Cross & Blue Shield put it best when he said 
``The idea [a private sector drug benefit] provides false hope to 
America's seniors because it is neither workable nor affordable.'' 
Thus, the benefits offered are illusory and unstable, and the 
Republican majority know it. Moreover, even after these large 
subsidies, there are no guarantees under the Republican plan that 
seniors can afford to buy this coverage.
  As a senior member of the House Budget Committee, I offered a 
meaningful prescription drug benefit during the markup of the fiscal 
year 2001 budget. At the time, Chairman Kasich and others committed 
this effort to devising a budget that sacrifices everything in the name 
of giving the largest possible tax cuts without doing anything to 
address the long-term needs of Social Security or Medicare. H.R. 4680 
is the unfortunate offspring of budget language that the House Budget 
Committee adopted and that, at the time, I characterized as mere lip-
service to the public's desire for a prescription drug benefit. The 
budget provision provided for a ``$40 billion reserve'' that, during 
the Budget Committee markup, was spent several times on prescriptions, 
Medicare reform, and debt reduction. Today, The Republicans are married 
to ``$40 billion,'' an seemingly arbitrary number. However, actually 
the Republicans are putting tax cuts ahead of the needs of seniors.
  Both during the budget process and throughout the 106th Congress, I 
have witnessed the Republican majority purposefully and effectively 
provide for tax cuts, particularly for the highest income bracket. When 
it comes to providing for meaningful relief for our seniors, we see 
this limp halfhearted political measure that in no way guarantees any 
prescription drug relief for our seniors.
  I also believe that this procedure has not provided adequate debate 
about a critically important issue to 39 million Americans, our 
nation's senior citizens. Rather than allow an open and honest debate 
on how the Congress would provide for a prescription drug benefit for 
America's seniors citizens, the Republicans has scripted a closed rule 
limited debate, predicated on an arbitrary budget resolution, which 
they have shown a willingness, time and again, to violate when it suits 
their purposes. Unfortunately, both their flawed insurance subsidy plan 
and their desire to stifle debate in ``The People's House'' on a 
question of vital importance to nearly 40 million beneficiaries, 
indicates, once and for all, that responding to the needs of America's 
senior citizens does not suit the political purpose of congressional 
Republicans.
  The Republicans have designed a flawed plan that delays 
implementation and limits catastrophic coverage to only those costs 
that exceed $6,000. Under their plan, if the government pays an insurer 
enough to create a plan where the premiums are not set too high by the 
insurer that someone can afford it, you still only get a benefit of 
about $1,000 less premiums and after that you are on your own until you 
reach $6,000. The Republicans know full well that a real, affordable, 
workable prescription drug plan costs more, but they are opposed to 
investing in this coverage for America's senior citizens.
  During the drafting of the FY 2001 Budget Resolution, the Republican 
majority found room for $175 billion of tax cuts, primarily for upper-
income Americans, but said that ``if and when'' a Medicare prescription 
drug plan could be developed it would have to be limited to $40 
billion. There was no study, no scientific basis, no analysis that 
resulted in this $40 billion figure, rather it was a back of the 
envelope calculation to make room for the huge tax cut they wanted to 
fund.
  Furthermore, during the markup of the budget resolution, I offered an 
amendment to restore funding for teaching hospitals, academic medical 
centers and other Medicare impatient costs. My amendment was rejected 
and I was told by the Republican majority that any changes to the 
Balanced Budget Act (BBA) of 1997 could be addressed out of the $40 
billion set aside. I was also told that money could be used for 
Medicare reform. But, of course that's the same money that was 
supposedly set aside for prescription drug coverage.
  Now we hear that the Republican leadership has promised to push 
legislation later this year to revise the 1997 BBA as it relates to 
Medicare providers to the tune of $21 billion. But, if we are to abide 
by the FY 2001 Budget Resolution and adopt the Republican's 
prescription drug plan, there will be no money left for a BBA fix. 
Clearly, the Republicans have no intention of abiding by the FY 2001 
Budget Resolution so long as it does not serve their political 
purposes.
  This is not a new phenomenon. History shows that when the Republican 
majority wants to violate the budget resolution, they do it with 
finesse.
  Under the Balanced Budget Act of 1997, Agriculture programs were to 
be funded at $11.3 billion in 1999 and $10.7 billion in 2000. But, when 
the time came for Congress to live by these caps, the Republican 
majority, recognizing the harsh effects these constraints would have on 
America's farmers, abandoned them. Agriculture was funded at $23 
billion in 1999 and $35 billion, more than double the BBA figure for 
1999 and nearly three and half times the BBA level for 2000.
  When the Republican leadership decided they wanted to spend more, not 
less, on highway construction, than provided for under the 1997 BBA, 
they busted the caps. So far, they have funded the Transportation at 
$40.6 billion in 1999 and $44.3 billion in 2000, $1.7 billion and $5 
billion for each year respectively.
  Again, when the Republican leadership wanted to increase funding for 
the Department of Defense, they did not let arbitrary restrictions, in 
place since the BBA of 1997, hinder them. They increased outlays over 
the prescribed BBA level for 1999 by $17.1 billion and, for 2000, by 
$14.5 billion.
  Mr. Speaker, don't get me wrong. I do not dispute the need, at times, 
to adjust BBA caps when the need is justified. What I do challenge is 
whether the Republican leadership is really sincere about helping 
America's senior citizens. They found a way to finesse budget limits 
for national Defense, for highways and for our struggling farmers. 
These are all worthy causes, but why won't they work around the budget 
resolution for America's senior citizens? Why won't they do this for 
the generation that fought ``The Great War'' and built the nation? Why 
won't they do this for those we honored this past week, who fought the 
``Forgotten War'' in Korea?

[[Page 12729]]

  If the Republicans were really sincere about helping our seniors, 
they would not hide behind artificial budgets and stifle debate. They 
would allow the Democrats, who started this debate in the first place, 
to bring up our bill which provides for meaningful, voluntary, 
universal prescription drug coverage under Medicare.
  Let us have the debate on what is best for senior citizens, even if 
it means debating a real drug benefit versus large tax cuts. But, let 
us have the debate.
  I am strongly supporting the Democratic alternative legislation that 
would provide meaningful, comprehensive prescription drug benefits for 
our nation's senior citizens. The Democratic plan provides better 
benefits at a lower cost for the elderly. It includes zero deductible 
and a premium of $25 per month in 2003. It also includes subsidized 
premiums for low-income seniors who may have difficulty paying these 
premiums. The Democratic plan provides immediate coverage for 
prescription drugs starting in 2003, rather than the delayed 
implementation included in the Republican plan. The Democratic plan 
also provides better catastrophic benefits by limiting out-of-pocket 
expenses to $4,000, a full $2,000 lower than the $6,000 limit included 
in the Republican plan.
  The Democratic plan would also provide $21 billion in relief to rural 
and urban hospitals, nursing homes, home health agencies, and other 
health care providers who have faced difficulties due to the reductions 
included in the Balanced Budget Act of 1997. In my district, many of 
the teaching hospitals at the Texas Medical Center are facing increased 
pressures to maintain their teaching mission in a time of lower 
Medicare reimbursements. This comprehensive plan would provide needed 
revenues to ensure that our health care system remains the envy of the 
world.
  I am disappointed that the Democratic plan will not be considered 
today and for all of these reasons, I urge my colleagues to oppose this 
bill.
  Mr. GILMAN. Mr. Speaker, I rise today in qualified support of H.R. 
4680, the Medicare Rx 2000 Act. I urge my colleagues to carefully 
consider this issue in making a final decision.
  Mr. Speaker, we are all fully aware of the explosion in costs for 
prescription drugs in recent years. This phenomenon has in part been 
linked to the rapid proliferation of the number of new drugs that have 
become available in the past decade. We are currently enjoying a period 
of revolutionary advances in the fields of medicine and medical 
technology. Yet, at the same time, a significant portion of our elderly 
population is unable to benefit from these new advances, due to the 
high costs that are associated with them. This is ironic, when one 
realizes that senior citizens are the primary group that these new 
advances are targeting.
  One fact that has become increasingly apparent is that Medicare is 
woefully inadequate in meeting the medical needs of today's senior 
citizens. When Medicare was created in 1965, outpatient prescription 
drugs were simply not a major component of health care. For this 
reason, Medicare did not provide coverage for self-administered 
medicine.
  Today's health care environment is vastly different from that of 
1965. The majority of care is now provided in an outpatient setting, 
and dozens of new prescription drugs enter the market every year to 
treat the common ailments of the elderly, including cancer, heart 
disease, arthritis, and osteoporosis.
  But while the health care environment has made remarkable progress 
since 1965, Medicare has stood in place. Consequently, most of my 
colleagues and I have heard from constituents who are now facing the 
dilemma of paying for these expensive new drugs while living on a fixed 
income. The individual who is forced to choose between food and 
medicine is no exaggeration. It is an all too common occurrence across 
the country. The high cost of prescription drugs have become a threat 
to the retirement security of our nation's senior citizens.
  It is for this reason that I am pleased to see that the Ways and 
Means Committee has completed its work on a proposal to provide 
prescription drug coverage for Medicare beneficiaries. What concerns 
me, however, is the process by which this measure was brought to the 
full House for consideration.
  Mr. Speaker, the decision to add prescription drug coverage will 
result in the greatest change in the Medicare Program since its 
creation. This is not something that should be done lightly or in 
haste. Given that, I have serious reservations about bringing such 
major policy-changing legislation to the floor for final passage less 
than 3 weeks after it was introduced.
  With that said, I would like to comment on the positive points of the 
bill as well as to highlight some of my specific concerns with the 
legislation.
  In my view, any proposal to offer prescription drug coverage under 
Medicare needs to contain the following characteristics to be 
voluntary, to have universal eligibility under Medicare, contain stop-
loss protections to guard against catastrophic expenses, offer choices 
in the type of coverage provided, and remain a good value over time.
  The proposal outlined in H.R. 4680 clearly meets these requirements. 
It differs from the administration's proposal in that it defines the 
scope of its stop-loss protections, and ties its benefits to medical 
inflation and the actual costs of the drugs, rather than the Consumer 
Price Index, H.R. 4680 also avoids a one-size-fits-all government-
imposed solution by offering senior citizens a choice in the types of 
plans in which to enroll. In doing this, the government will guarantee 
that at least two plans will be available in every area of the country. 
Moreover, the proposal fully funds all costs for those enrollees below 
135% of the poverty rate, and partially funds the costs of those up to 
150% of the poverty rate.
  In addition, this legislation also establishes a new agency, the 
Medicare Benefit Administration, to oversee the implementation of the 
plans. It further creates an office of beneficiary assistance and 
Medicare ombudsman to serve as a patient advocate, and mandates the 
establishment of a policy advisory board much like those for the IRS 
and Social Security Administration.
  As I mentioned, I do have some reservations about certain aspects of 
this bill. The first of these is the matter of adverse selection. 
Simply put, this is the condition whereby most seniors in good health 
avoid signing up for a plan, leaving the majority of enrollees coming 
from the sickest segment of the population. If this were to occur, the 
premium and deductibles would have to be far higher than presently 
outlined.
  The bill's sponsors reply that by covering part or all of the costs 
of those with incomes up to 150 percent of the poverty level, the 
proposal would ensure that there would be an adequate base of healthy 
seniors to offset the portion in greatest need of the benefit. This 
remains to be seen, and I believe that this particular aspect of the 
plan needs to be monitored closely.
  I am also concerned about the viability of private insurers 
underwriting plans in areas where it is not profitable for them to do 
so. Recent experience with Medicare+Choice plans in my district have 
borne out this concern. In such cases, the government would step in as 
the ``insurer of last resort,'' assuming a share of the risk as well as 
subsidizing the cost of offering service in a rural area. My chief 
concern with this is that it has the potential to become a costly 
venture for the government, where the private insurers deliberately 
hold out in order to secure a greater level of government funding.
  In spite of these concerns, I firmly believe that this legislation is 
an important first step in providing a benefit to our senior citizens 
which is long overdue. The prescription drugs situation will not change 
on its own in the future. Rather, we will continue to see a flood of 
new revolutionary products hitting the market. However, there is a 
price to pay for innovation, as our recent experience has shown. In 
accepting this, it is important that we do not continue to fall into 
the trap in which we presently find ourselves--having new products that 
are too expensive for their target audience.
  This bill is the first step towards correcting this problem. For that 
reason, despite my stated reservations, I intend to give it my 
qualified support. It is my hope that my concerns will be addressed in 
a future House-Senate conference on this issue. Should this not be the 
case, I will reconsider my future support when the final compromise 
language comes before the House.
  Regardless of the final outcome, I will not support any legislation 
which, under the claim of reducing drug prices, denies doctors the 
ability to prescribe those medicines which they deem best for their 
patients simply to save money. This is exactly what has happened to the 
government-run systems in the United Kingdom and Canada.
  The relationship between the doctor and patient is sacred and should 
not be tread upon--especially by any government bureaucrat. This issue 
is too serious for party politics, and, as I stated at the outset, I 
urge my colleagues to give it their careful and thoughtful 
consideration.
  Mr. COYNE. Mr. Speaker, I rise today in opposition to the Republican 
Prescription Modernization Act and in support of the Democratic 
Substitutes. The Republican bill before us today does not assure all 
Medicare recipients access to affordable prescription drugs. Seniors 
have learned that they cannot rely on private insurance plans.
  The Democratic Substitute is a true entitlement for Medicare 
beneficiaries and it would

[[Page 12730]]

be administrated by Medicare. Under our bill, all seniors are entitled 
to defined premiums and defined benefits.
  Under the Democratic Substitute, seniors are entitled to a 
prescription drug benefit with a $25 premium and no deductible. The 
Republican plan offers no defined premium and no fixed deductible. Both 
of these factors will vary from region to region and from year to year.
  I urge my colleagues to vote against the Republican plan with its 
entitlements for the drugs and insurance industries. The Democratic 
substitutes is the only plan that entitles seniors to the benefits they 
deserve. The Republican plan is not an entitlement for senior citizens 
but an entitlement for insurance companies and pharmaceutical 
companies.
  Mr. Speaker, for these reasons, I urge my colleagues to vote against 
this bill.
  Mr. KNOLLENBERG. Mr. Speaker, I rise in strong support of H.R. 4680, 
the Medicare Rx 2000 Act, and urge its adoption.
  We all know that American society is growing older and there is a lot 
of discussion about the best way to prepare for this reality. Despite 
the fact that older Americans make up only 13 percent of our 
population, this age group consumes more than one-third of the 
prescription medicines in our country.
  The non-partisan Congressional Budget Office recently found that, in 
three years, the average senior will spend $2,075 annually on 
medication. Compare that to 1970, a year when surveys revealed that 
people over the age of 65 spent an average of $56 on prescription 
drugs. That equates to $247 in today's dollars, which is a mere 
fraction of the cost citizens are currently paying. This is a steep 
increase by any measure.
  The bipartisan plan we have before us is eminently fair. It provides 
reasonable choices for consumers. Every consumer is guaranteed a choice 
of a least two prescription plans. We should reject the `one size fits 
some' solution that some Members advocate. I think a recent New York 
Times (June 18, 2000) subtitle says it all: ``Democrats' Prescription 
Plan Calls for `One Size Fits All'--G.O.P. Offers Choice''. The 
American people saw through this scheme in 1994 when they rejected the 
Clinton health plan and they do not want to see a repeat of this 
mentality.
  The bipartisan plan ensures that our nation's neediest seniors 
receive prescription drug coverage. This vital safety net ensures that 
no one will be left without coverage.
  The bipartisan plan fits within the framework of the budget 
resolution this Congress adopted. I sit on the Budget Committee and we 
responsibly set aside $40 billion specifically for a prescription drug 
benefit. In fact, I would remind my colleagues that substitutes offered 
by the Ranking Democrat on the committee, Mr. Spratt, and the Blue Dog 
Coalition both offered $40 billion--exactly the same figure we are 
using today.
  Some Members advocate busting the budget through a $100 bill scheme. 
Like every household, we have to live within our means, especially 
since we are at the dawn of the balanced budget era.
  With all of the pomp and bluster of the prescription drug issue it is 
easy to lose sight of the bigger, more important issue: overall 
Medicare modernization. The bill we have before us is a nice step but 
we need to do more to address this critical issue. I look forward to 
the day when we turn our full attention towards saving and 
strengthening our Medicare system.
  I urge a ``yes'' vote on the bipartisan prescription drug plan.
  Ms. KILPATRICK. Mr. Speaker, I rise in opposition to the bill, H.R. 
4680, the Medicare Drug 2000 Act. I am outraged and frustrated that my 
colleagues across the aisle gave us no opportunity to vote or debate 
our Democratic alternative. That is ironic when you consider the 
opposition likes to champion itself as the party choice; yet, we are 
denied the opportunity to vote for a different choice today. It is 
either the Republican plan or no plan. Can it be that they are afraid 
to have their bill measured against a more affordable and comprehensive 
prescription drug proposal that Democratic Members sought to offer but 
were denied by the majority? The Republican plan cannot stand up to the 
rigors of a full, fair and honest debate.
  I oppose the legislation not only on procedural grounds, but for 
reasons of substance as well. I believe that a prescription drug 
benefit under Medicare must adhere to three principles: the benefit 
must be universal, it must be comprehensive, and it must be affordable. 
The Republican proposal fails on all three times tests.
  This bill lacks universality. I believe a Medicare prescription drug 
program should be available to eligible senior citizens or disabled 
persons from Michigan to Maine, from Oregon to Ohio, from Alaska to 
Alabama. This bill does not guarantee prescription drug coverage for 
all Medicare beneficiaries at an affordable price. It is restricted to 
only those who can afford to purchase private market drug plans.
  The Republican plan lacks a comprehensive package of benefits. My 
Republican colleagues point out that their plan is not a ``one size 
fits all'' plan. That is a cliche without meaning. I would suggest it 
is important to define by what ``one size fits all'' means. If one size 
fits all means a comprehensive set of pharmaceutical products, then I 
am for it. If one size fits all means that new drugs become available 
to everyone then I am for it. If one size fit all means that the 
prescription drug program is responsive to the needs of our severely 
disabled, then I am for that, too. The Republican plan is far from 
comprehensive.
  The Republican bill creates a multi-tiered system of coverage with 
the lowest beneficiaries limited to bargain basement plans. The 
Republican plan subsided private health insurance companies to offer 
``Medigap-like'' policies providing prescription drug coverage to 
Medicare beneficiaries. Even the president of the Health Insurance 
Association of America (HIAA) has said that private insurance companies 
will not offer these drug policies because they do not want to assume 
the financial risks.
  Although the bill contains no set deductible or premium, it is 
guesstimated by members of the Ways and Means Committee that seniors 
will pay a $250 deductible and a monthly premium of $37 to $40--a total 
of $700 off the top of modest budget as the price of admission for the 
benefit. The only way to make an affordable prescription drug coverage 
for all beneficiaries is to establish a prescription drug benefit 
administered by the Medicare program--just like benefits under part A 
and part B of Medicare. We need only look at Medigap insurance premiums 
costs seniors are charged for prescription drug coverage. Depending on 
the state, drug coverage can be more than $100 per month for a person 
65 years of age and more than $200 per month for a 75-year old. This 
plan for fails to meet the test of affordability.
  Another glaring defect of the Republican plan is that the benefits 
are not guaranteed. Medicines may be limited by private plans, and 
pharmacies may also be limited. Private insurers could discourage 
seniors with high drug costs from enrolling by offering plans that have 
few up-front costs such as no deductible and low co-payments but leave 
seniors paying a large amount before the $6,000 catastrophic threshold 
kicks in. Under the GOP bill, Medicare would not provide a single 
dollar of direct premium assistance for middle-class beneficiaries 
whose income is above $12,000 a year. The bill subsidizes the insurers 
under theory that the private sector offer drug benefit coverage at 
significant cost savings. Given the meager subsidies, it is very likely 
that the premiums would still be too expensive for many seniors.
  The Republican plan is all bread and no meat, a false promise to our 
senior citizens. The plan undermines the Medicare program by 
contracting out the program to private insurers who will repeat 
corporate subsidies and produce very little for the health security 
needs of the nation's seniors. What the Republicans are asking us to do 
today is ``buy a pig in a poke.'' Frankly, that's not good enough for 
us and it's not good enough for our senior citizens.
  We live in a special time in our nation's history. We are 
experiencing recorded economic growth and generating budget surpluses 
that are without precedent. The President's Mid-Session Review reported 
that budget surpluses over the next 10 years will total $4.2 trillion, 
a $1.3 trillion increase from the 10-year surpluses estimated in the 
President's budget issued last February.
  We have no modern day record to guide us through this period of 
economic prosperity. Even in era of record budget surpluses and 
economic growth, I recognize the importance of keeping a watchful eye 
on the bottom line. At the same time, we have the resources to fund a 
reasonable prescription drug benefit that is universal, comphrensive 
and affordable. The Republican plan fails.
  I urge my colleagues to joint me in voting against this bill.
  Mr. WATTS of Oklahoma. Mr. Speaker, today I rise in support of H.R. 
4680, the Medicare Prescription Drug Act of 2000. The Medicare program 
provides significant health insurance coverage for 39 million aged and 
disabled beneficiaries. However, the program does not offer protection 
against the costs of most outpatient prescription drugs. This has 
created a critical need for a significant drug benefit.
  However, the potential cost of adding prescription drug coverage has 
been the primary impediment to its implementation. In response

[[Page 12731]]

to this, Republicans have unveiled a plan to strengthen Medicare and 
provide prescription drug coverage for all senior citizens and disabled 
Americans, including those in rural areas. It focuses on three key 
principles: coverage will be affordable for all, available for all and 
voluntary for all--regardless of income or location.
  In Oklahoma and other parts of rural America, health care is a matter 
of access. The Republican plan offers protections for seniors in rural 
areas by guaranteeing availability of at least two drug plans in every 
area of the country and requires convenient access to pharmacies.
  The Republican plan utilizes a public-private partnership to let 
seniors choose the right coverage from several competing prescription 
drug plans, or to keep their existing coverage. The plan also protects 
seniors from high out-of-pocket drug costs, without resorting to price-
fixing or government price controls.
  We want to give individuals the power to decide what is best for them 
and choose the prescription drug coverage that best meets their needs. 
Therefore, I urge my colleagues to vote in favor of the Medicare 
Prescription Drug Act.
  Mrs. MALONEY of New York. Mr. Speaker, today I rise in opposition to 
the Republican prescription drug plan. I want to make very clear that 
the 2 plans are strikingly different.
  As co-chair of the Women's Caucus I want to stress the importance 
prescription drug coverage to older women throughout the country.
  The average income for a woman over the age of 65 is just $14,820. 
Thus the Republican Leadership's prescription drug plan, which has 
proposed only a 50 percent decrease in drug costs, is still 
unaffordable to most older women.
  Additionally, the suggested prescription plan's catastrophic coverage 
is not initiated until the beneficiary's drug costs have reached 
$6,000. This obviously does not provide seniors with the safety net 
they deserve given their limited incomes.
  Furthermore, prescription drugs are now the largest out-of-pocket 
health care expense for America's seniors. On average, America's 
seniors fill 18 prescriptions each year, and nationally, spending on 
prescription medications increases 15 percent annually.
  But even more disturbing is the growing evidence that many of 
America's major drug companies are engaging in a deliberate pattern of 
price discrimination.
  Many seniors, without drug coverage, are being forced to pay prices 
that are significantly higher than those charged to other customers, 
such as large HMOs.
  I was so concerned about this problem that I had the staff of one of 
the committees I serve on work with my staff to study the problem of 
drug pricing in my own district. And what they found shocked me.
  First, they discovered that seniors in Manhattan without prescription 
drug coverage--and that is about three-quarters of today's seniors--pay 
two and a half times as much for certain prescription drugs as other 
consumers, such as members of large HMOs.
  The study looked at the five best-selling prescription drugs and 
found that, in each case, seniors in my district pay more than twice 
what other consumers pay.
  In one instance--the cholesterol medication Zocor--seniors in my 
district pay four times what consumers in HMOs pay.
  In addition, they took a look at the prices American seniors pay and 
compared them to the prices that seniors in Mexico and Canada pay. In 
some cases, they pay seven times what consumers in other countries pay.
  The conclusions of both studies were clear: drug companies are 
gouging America's seniors only to increase their own profits.
  No senior should ever have to choose between buying needed 
prescription drugs and putting food on the table, or heating their 
homes, or having a decent retirement.
  But with what drug companies are charging these days, those are the 
choices many seniors face without prescription drug coverage.
  Prescription drugs prolong the lives of thousands of women and men 
each year. Enough is enough. Congress needs to produce a prescription 
drug plan that actually help seniors. America's seniors deserve better 
than this.
  Mr. DIXON. Mr. Speaker, today I had hoped to have the opportunity to 
vote to create an affordable, workable prescription drug benefit for 
Medicare beneficiaries. Unfortunately, I was not given that opportunity 
by the House leadership. The only bill before us--the Medicare Rx 2000 
Act, H.R. 4680--will not offer seniors the kind of protection against 
rising drug costs that they deserve.
  While both Republicans and Democrats may agree on the need for a 
Medicare drug benefit, we disagree about important details such as 
affordability and reliability. I am disappointed that the Republican 
leadership has chosen to prevent the Democrats from offering our 
prescription drug plan as an alternative to their own during today's 
debate. An issue as serious as the availability of prescription drugs 
for seniors requires an open debate that explores all competing 
proposals.
  I support the Democratic plan, H.R. 4770, which would create a 
voluntary, affordable prescription drug benefit in Medicare. The plan 
features inexpensive premiums and catastrophic coverage for drug costs 
over $4,000 annually. This is the type of plan my constituents have 
been asking for.
  The Republican plan, in contrast, invites private insurance companies 
to offer drug-only plans to Medicare beneficiaries. There is no 
guarantee that private insurers would even want to offer these types of 
plans or that they would be affordable. In fact, the Health Insurance 
Association of America has said that drug-only plans are unworkable. 
Under the Republican plan, premiums will vary and catastrophic coverage 
would not begin until an enrollee reached $6,000 in yearly costs.
  I will vote against H.R. 4680 because it does not provide the 
guaranteed, affordable Medicare drug benefit that my constituents need. 
I urge my colleagues to vote against this ill-advised bill so we can 
work together to craft a bipartisan prescription drug proposal that 
truly works for America's seniors.
  Mr. BUYER. Mr. Speaker, I rise in support of the measure to provide 
prescription drug coverage to our seniors and disabled with Medicare 
coverage.
  When Republicans took control of Congress in 1995, Medicare was going 
broke. Because of the bipartisan actions taken in 1997, the Medicare 
program was preserved. Now, we are in a financial position to enhance 
Medicare, by adding a prescription drug benefit.
  Mr. Speaker, seniors should not have to choose between buying food 
and buying prescription medicines. This bill, H.R. 4680, will give 
Medicare beneficiaries access to prescription drug insurance plans that 
negotiate lower prices and comprehensive coverage, something many 
seniors now lack.
  Fortunately, near two-thirds of seniors have access to prescription 
drug coverage, most of which is provided as a retiree benefit from a 
lifetime of working. Seniors who prefer the coverage they have now 
should not be forced into a government run plan. But this is exactly 
what the President and the Democrat plan would do. If the President's 
plan were enacted, between 50 percent to 75 percent of employers would 
drop their coverage . . . coverage that many seniors like.
  This plan, H.R. 4680, guarantees seniors choice on the type of 
prescription drug coverage that best suits their needs. All seniors 
will have at least 2 plans to choose from. The measure provides 
incentives for plans to be offered in rural areas and requires access 
to a ``bricks and mortar'' pharmacy. As a member who represents a rural 
constituency, I am pleased that this bill takes special care to see to 
the needs of seniors in rural America.
  It is the senior who will decide what elements in a plan make sense 
for their situation. The President gives seniors one option, one 
benefit . . . take it or leave it.
  H.R. 4680 provides subsidies for low-income seniors, just like the 
President's plan, and its also provides assurance that no senior would 
have to go bankrupt in order to pay high drug costs, unlike the 
President's original proposal. It guarantees that above $6,000, no 
senior would pay a penny more out-of-pocket. This catastrophic drug 
coverage is an extremely important provision.
  The Republican plan also begins structural reforms in Medicare. It 
creates an ombudsman to advocate on behalf of the beneficiary, and not 
the bureaucracy. The ombudsman would help beneficiaries navigate 
Medicare's requirements. It reforms Medicare rules regarding appeals to 
eliminate the endless waits for decisions.
  Under the President's plan, the government would become the largest 
HMO . . . deciding what drugs you can receive, and when you can get it. 
Like Canada, the President's plan would result in rationing of drug 
treatments, more hospital stays, and a lower standard of health care of 
our seniors.
  This is a bill that provides access to affordable prescription drugs 
with a choice of affordable plans to meet the beneficiary's needs. This 
coverage is delivered in a way to protect the doctor-patient 
relationship. It does not compromise seniors' access to modern miracle 
medicines and ensures that research and development into new and 
improved drugs can continue.
  I urge all Members to support this much needed bill.
  Mr. BLUMENAUER. Mr. Speaker, I am encouraged that Congress is finally 
working to provide relief to our nation's seniors; however, the bill 
under consideration today does not do

[[Page 12732]]

enough to help them. The only bill the Republicans offer, H.R. 4680, 
relies too much on private insurers who have already expressed 
opposition to providing drug coverage and who have already failed to 
provide adequate health insurance for many areas of the country, 
particularly rural areas.
  Prescription drugs are an increasingly vital part of health care and 
are the fastest growing component of health care expenditures. Spending 
on prescription drugs is expected to reach $112 billion this year 
alone. Seniors, only 13 percent of the total population, account for 
more than a third of the annual expenditure. The average senior uses 18 
prescriptions a year, prescriptions essential to their quality of life.
  The rising costs of pharmaceuticals combined with the increasing 
reliance on drugs for medical treatments have created a serious threat 
to the financial security of a vulnerable population, seniors on fixed 
incomes.
  The alternative legislation supported by the Administration and 
Congressional Democrats would do more to alleviate some of the 
financial burden imposed by prescription medications. The substitute 
bill, which was, unfortunately, prohibited from consideration today, 
offers coverage through the Medicare program that uses the purchasing 
power of the federal government to guarantee affordable prescription 
drug prices. Our seniors are paying the highest prescription drug 
prices in the world, not just in comparison with Canada, Mexico and 
other countries, but also with comparable medications offered to 
animals in veterinary clinics. The Republican proposal offers no 
guarantees that seniors who are purchasing drug coverage are being 
offered the best possible price for their pharmaceuticals.
  The debate today on perhaps the most important domestic issue of this 
Congress has been haphazard and rushed. Consequently, it is likely that 
even if passed, the Administration will veto H.R. 4680. However, I hope 
the debate today is the beginning of a truly bi-partisan conversation 
about how we can focus our efforts beyond election year politics to a 
proposal that makes a real difference for those who depend on 
prescription drugs for their quality of life.
  Mr. ETHERIDGE. Mr. Speaker, I rise today to announce my opposition to 
H.R. 4680, the Medicare Rx 2000 Act. This plan will not guarantee 
affordable prescription medicine coverage for all seniors and it takes 
the first step towards privatizing Medicare, forcing seniors to deal 
with private insurance companies instead of having the choice of 
getting their prescriptions through Medicare. The Republican plan 
provides huge subsidies to insurance companies and does not provide any 
direct assistance to our nation's seniors. Even after large subsidies, 
there is no guarantee that affordable prescription medicine coverage 
will be offered in every region of the country. In fact, we have heard 
from several insurance companies that ``the concept of `dug-only' 
private insurance simply would not work in practice.''
  I strongly support providing our nation's seniors with a real 
prescription medicine benefit. However, any such plan must be a defined 
benefit that is administered under Medicare. It must be voluntary, 
affordable, and available to all seniors regardless of their income 
level. The benefit must ensure that copayments and premiums are uniform 
for all seniors in all areas of the country. Finally, any plan enacted 
by this Congress must include a cap on the cost to seniors in order to 
protect them from any unexpected catastrophic events.
  Mr. Speaker, for too long our nation's seniors have been forced to 
choose between purchasing prescription medicines and putting food on 
their tables. Because of this, I rise in support of the Democratic 
substitute. This plan will provide seniors with a meaningful, 
affordable, and universal medicine benefit. Under this plan, there is 
no deductible, there is a low, affordable monthly premium of $25 for 
all seniors and half of seniors' costs will be covered by Medicare up 
to $2000. In addition, this legislation includes a catastrophic benefit 
that will cap seniors' costs at a maximum of $4000. Finally, Mr. 
Speaker, I rise in support of the Democratic substitute because it will 
provide much needed relief to rural and urban Medicare hospitals, 
nursing homes, home health agencies, rural HMOs, and others providers.
  Our North Carolina values call on us to provide health care security 
and retirement security for our senior citizens. The Republican bill 
utterly fails to meet that test.
  Mrs. MEEK of Florida. Mr. Speaker, the American people want and need 
affordable, voluntary and reliable Medicare prescription drug coverage 
for all seniors, not this poll-driven attempt to con them. I rise in 
strong opposition to both the Republican Leadership's bill and to the 
disgraceful Rule adopted for this bill, a Rule that deprives the 
Democrats of an opportunity to present their substitute, a substitute 
that would give America's seniors the option to obtain affordable, 
reliable prescription drug coverage through Medicare. The procedures 
adopted by the Republican leadership for consideration of this bill are 
a travesty. The American people deserve better.
  H.R. 4680, the Medicare 2000 Rx Prescription Act, is a prescription 
for disaster. This bill won't work. It seeks to provide prescription 
drug coverage to Medicare beneficiaries, not through Medicare, but by 
creating ``drugs only'' insurance policies through private insurers. It 
does so even in the face of the continuing massive withdrawals from 
Medicare by the health insurance industry. If you live on more than 
$12,525 a year, the Republican plan would not pay one dime toward your 
premium, while the Democratic plan would provide a 50 percent subsidy 
for monthly premiums for all seniors.
  The bill would pour money into the pocket of wealthy insurance 
companies even though the insurance companies themselves have called 
this ``private insurer'' approach unworkable. There is no reason to 
believe that any legitimate private insurers will step forward and 
offer this coverage to seniors. A prescription drug benefit surely can 
and should be offered through the existing regulatory structure, but 
the Republican leadership simply cannot overcome their longstanding 
history of hostility to Medicare.
  Instead of creating a defined benefit plan that would cover all with 
the same comprehensive benefits, the Republican bill would create a 
multi-tiered system of coverage that would relegate low-income 
beneficiaries to bargain basement plans. Private insurers would be free 
to define different deductibles, co-payments and benefit limits in 
different parts of the country.
  The Republican plan would provide whatever subsidy might be required 
to persuade two insurers to offer a prescription drug benefit, but 
provide no assurance whatsoever that the benefits offered would be 
comprehensive and affordable. Plans would come in and out of 
communities frequently, perhaps even on a yearly basis, and seniors 
would be left to fend with the fear, confusion, and uncertainty that 
all too many of them already have experienced when their insurers 
carrier abandons coverage in their market.
  To induce insurance companies to offer this coverage, participating 
companies would receive a 35 percent subsidy for their operating costs 
with no requirement that such payments be passed on to the 
beneficiaries. Reflecting their never-ending devotion to ``trickle-
down'' economics, the Republican bill would end up subsidizing 
insurers, not seniors. Plans also would be able to create restrictive 
formularies that would maximize the insurer's profits at the expense of 
seniors by refusing payment for many drugs, even though a beneficiary's 
doctor had determined that a particular drug is medically necessary.
  This is not the approach that we need. What seniors want and deserve 
is a simple, reliable, affordable prescription drug plan financed 
through Medicare with no deductibles, universal benefits, guaranteed 
access to needed drugs and local pharmacies, and guaranteed access to 
negotiated discounts in drug prices using the purchasing power of the 
Federal government. Under the Democratic plan, all drug costs would be 
covered once a senior incurred $4,000 in out-of-pocket drug costs. 
Simply put, the Democratic plan offers far better coverage than the 
Republican plan and at a lower cost.
  Mr. Speaker, it's no coincidence that the Republican leadership bill 
came to the Ways and Means Committee for a markup within days of being 
introduced and that seniors, the disabled, low income and minority 
populations, most members of the Congress and other citizens did not 
receive a chance to testify on H.R. 4680 before that markup. Nor is it 
an accident that this bill is now being rushed to the floor for a vote. 
There's a simple explanation.
  After years of resisting Democratic proposals for a prescription drug 
benefit, the Leadership's pollsters told them that they could not 
ignore the issue any longer. They would pay too heavy a price 
politically. So the challenge then became one of figuring out how to 
appear to be addressing the issue without involving Medicare; to 
portray concern for the desperate needs of seniors for prescription 
drug coverage.
  H.R. 4680 is the product of that exercise. 148 pages intended to 
suggest concern, but fundamentally inadequate to create affordable and 
reliable voluntary prescription drug coverage. Mr. Speaker, the 
leadership may have labored mightily to produce this bill, but they 
brought forth a mouse! As Families USE put it: ``This plan relies on 
the insurance industry to provide policies they don't want to sell and 
consumers can't afford to buy. It's impossible to tell what consumers 
will get or whether it

[[Page 12733]]

will even be available. This is a false promise to Medicare 
beneficiaries.''
  Mr. Speaker, the nature and extent of a senior's prescription drug 
benefit should not depend upon the accident of where that senior is 
located. Beneficiaries should pay the same premium and get the same 
benefits no matter where they live, just like they do for other 
Medicare services like doctors' visits and surgery. Seniors should be 
covered for all drugs that their doctors say are medically necessary. 
They should not be at the mercy of the insurance company's drug 
formulary.
  Our constituents deserve a benefit that they can count on and 
understand, a guaranteed and affordable benefit--not the confusion and 
uncertainty that the Republican leadership's plan will promote.
  Medicare has been the cornerstone of health security for the elderly 
and the disabled for over 30 years. We should build on the existing 
Medicare program to create a reliable and affordable prescription drug 
benefit for all beneficiaries who wish to participate. Our constituents 
need real affordable, reliable voluntary prescription drug coverage, 
not just election year rhetoric. Reject this sham proposal, adopt a 
fair process for considering the prescription drug issue, and let's 
work to adopt the Democratic substitute.
  Mr. COSTELLO. Mr. Speaker, I rise today in strong opposition to H.R. 
4680. It is outrageous that the Republican leadership blocked all 
attempts for free and open debate. A vote on the Democratic substitute 
was ruled out of order. The leadership has stifled consideration of any 
plan other than their own. It is obvious they are catering to the 
insurance companies. The ones who stand to gain the most from this 
legislation are not the seniors that the Republicans would lead you to 
believe but the multi-million dollar drug companies that only stand to 
get wealthier as a result of this legislation.
  The Republican leadership's prescription drug plan fails miserably to 
help our nation's seniors. The leadership should be ashamed to submit a 
plan that forces seniors to shop around for benefits when there is no 
guarantee that the insurance companies will continue to provide the 
benefit a year or two down the road, especially when the fees for such 
a plan can be raised to exorbitant rates.
  A better solution is President Clinton's plan which provides 
guaranteed benefits through Medicare, allows seniors to keep their 
current prescription drug plan if they choose and provides 100 percent 
of prescription expenses for low-income seniors. I support the 
President's plan because the plan provides affordable, voluntary and 
reliable prescription coverage for all seniors.
  Give our nation's seniors what they deserve, prescription drug 
coverage without all the strings. I urge my colleagues to oppose the 
Republican prescription drug plan.
  Mr. BALLENGER. Mr. Speaker, I rise today in support of H.R. 4680, the 
Medicare Prescription Drug and Modernization Act, as introduced by 
Subcommittee Chairman Bill Thomas and my good friend and colleague from 
North Carolina Representative Richard Burr. I encourage my colleagues 
on both sides of the aisle to support this legislation which provides 
senior citizens with a voluntary drug benefit, giving seniors the right 
of choice.
  Seniors comprise 12 percent of the population in the U.S., but 
consume more than one-third of all prescription drugs. Leaving seniors 
without a drug benefit is not an option. The time has come to correct 
this shortfall in Medicare and implement a program that provides a 
Medicare drug benefit for seniors. H.R. 4680 is a cost effective way to 
provide this benefit through the efficiency of the private sector.
  I believe H.R. 4680 provides the best approach by giving seniors the 
flexibility of choice. Unlike the Democrats proposed bill, H.R. 4680 
greatly diminishes the power of the Health Care Financing 
Administration (HCFA). Our bill creates a new agency to oversee the 
prescription drug and Medicare+Choice programs. This is a huge 
improvement, as the new agency's mission would be to foster innovation 
and competition in Medicare and ensure coverage in rural areas.
  Our new drug benefit would reduce prescription drug costs to seniors 
by giving them market-based bargaining power. A recent study by the 
Lewin group found that individuals enrolled in private insurance plans 
are getting 30 percent to 39 percent discounts on their prescription 
drugs through their plans' negotiations with pharmaceutical 
manufacturers. Yet today more than \1/3\ of seniors have no 
prescription coverage and pay the highest price for their medication. 
H.R. 4680 enables seniors to enroll in prescription drug plans (or 
Medicare+Choice plans) that will negotiate lower prescription drug 
prices on their behalf.
  And, last by certainly not least, the funding for this bill comes 
entirely from greater than anticipated savings from the 1997 Balanced 
Budget Act. Congressional Republicans have committed $40 billion (or 
about \1/3\ of those unanticipated savings) to fund a better and 
stronger Medicare system. This is an investment which will pay large 
dividends in the immediate future.
  Mr. Speaker, I urge my colleagues to support this common sense 
legislation that provides maximum coverage and optimum choice for 
seniors. Simply put, H.R. 4680 is affordable, available, and voluntary 
for all.
  Mr. HOLT. Mr. Speaker, I rise in opposition to the weak and untested 
legislation we are considering and in support of real voluntary, 
reliable, affordable, Medicare prescription drug coverage for our 
seniors.
  I strongly support the inclusion of prescription drug coverage under 
the Medicare plan. Unfortunately, the only bill being considered on the 
floor of Congress today is not a Medicare prescription drug plan--it's 
an untested, unreliable, proposal that gives money to private insurance 
companies instead of seniors. What's worse, it offers no real relief to 
those in central New Jersey who need it.
  Today, more than at any time in our nation's history, prescription 
medications are helping Americans live longer, healthier lives. It is 
difficult, however, for many that lack good health care coverage to 
afford these products. Older Americans--the men and women that won 
World War II, built our nation, and raised our families--shouldn't be 
forced to choose between medicine and food. They shouldn't have to 
worry that an insurance company clerk is going to deny them lifesaving 
medicine to save a buck.
  It is only common sense that Medicare include drugs as an integral 
part of health care in its benefits package. Medicare is a program that 
works. Seniors rely on it. All of us should be able to agree on that. 
We must work together in a bipartisan fashion to include drug coverage 
under Medicare.
  There are too many questions about this hastily-written plan we are 
voting on today. Insurance companies say they have no interest in 
writing the prescription drug coverage policies that the bill calls 
for. In central New Jersey, just a handful of insurance companies 
dominate the market. In addition, seniors' experience with HMO 
insurance plans is not good. Service is often unreliable. Premiums have 
risen by more than 100 percent in some instances. Well . . . health 
care that you can't count on is no health care at all. We need to do 
better than that.
  There are several proposals being considered in Congress which are 
intended to help seniors pay for prescription drugs. While I have 
opposed policies that put government price controls on medicines, some 
of the other proposals being discussed are promising. We need to put 
the politics aside and have a serious discussion about how to help 
seniors. They deserve it. We must help seniors by passing a voluntary, 
affordable, reliable Medicare prescription drug benefit that helps 
seniors and allows us to continue to develop these lifesaving drugs.
  The choice we are faced with today is an easy one. We can vote with 
insurance companies or with senior citizens. Mr. Speaker, I choose to 
side with the seniors.
  Mr. HOBSON. Mr. Speaker: I rise in support, of the important 
legislation before us today that will help seniors in Ohio's 7th 
Congressional District with the high cost of prescription drugs.
  I first want to acknowledge the efforts of Chairman Bliley and 
Chairman Thomas, as well as the efforts of Representative Burr, 
Representative Greenwood, and Representative McCrery. They've worked 
long hours, and they have written a very good bill that adds a 
sustainable, fair, and compassionate drug benefit that modernizes the 
Medicare program so seniors can afford the drugs they depend on to stay 
healthy.
  Our bill puts in place a new benefit in Medicare that allows seniors 
to receive their prescription drugs through at least two choices--as 
opposed to the one-size-fits-some approach advocated by the President. 
It does so in a fair way that lets seniors in my district keep their 
existing coverage, and in a way that provides assistance to every 
senior in financial distress or with unusually high drug costs. And 
every senior will benefit from the power of group discounts that will 
reduce the out-of-pocket cost of prescription drugs.
  One of the truly innovative things this bill does, and which is long 
overdue in the Medicare program, is to create a new Medicare Benefits 
Administration outside of the current bureaucracy that will be focused 
on seniors and their benefits first and foremost.
  Let's compare that to the existing agency that runs Medicare and that 
would run the program proposed by the President.
  Seniors and health care providers in my district are very familiar 
with HCFA, the Health

[[Page 12734]]

Care Financing Administration which runs Medicare. They also--
unfortunately--also are very familiar with the technical answers they 
can't understand, busy phone lines, a general level of 
unresponsiveness, and the endless delays at that agency.
  You might think that Congress would have a little better luck. Sadly, 
that is not the case. I want to tell my colleagues today about a letter 
I sent this week to HCFA that demonstrates the importance of our plan 
entrusting the administration of a new prescription drug benefit to a 
new senior-focused agency rather than HCFA.
  For example, in 1997, Congress included a simple and straight-forward 
provision in the Balanced Budget Act of 1997 that would allow seniors 
that depend on a wheelchair or a similar piece of medical equipment 
some flexibility in ``upgrading'' an old or deteriorating piece of 
equipment.
  Today, three years after Congress enacted this improvement for 
seniors, seniors are still waiting for the current bureaucracy to act. 
The point is, three, four or five years is too long to make seniors 
wait. And the President's new claim that HCFA could implement a new 
prescription drug benefit in a year and a half flies in the face of 
their actual track record.
  My colleagues can point to scores of missed deadlines on similar 
changes approved by Congress. We can't afford to take the same road 
with a prescription drug plan, and I believe our creation of a new 
Medicare Benefits Administration is a key improvement over the 
President's plan.
  I also want to address the idea that a prescription drug benefit 
should follow the Canadian model. Some have advocated the solution is 
simple--seniors just need to import the drugs from Canada.
  However, for those who support importing the Canadian system, let's 
take a look at prescription drugs in Canada. Since we last had this 
debate in 1994, Americans have not forgotten that the way Canada keeps 
costs down is simple--they don't provide the type of quality care we do 
in the United States, they allow the government instead of doctors make 
medical decisions, and health care is rationed--and the result is long 
waiting periods, where months or even years, for medical treatments are 
the norm.
  With respect to drugs, in Canada, it takes an average of one and a 
half times as long as in the U.S. to approve a new drug. Since 
Canadians then can only take the drugs their government has approved 
payment for, they then have to wait even longer to learn if the 
government will allow that drug in their medicine cabinet.
  In comparison, our bill provides the same type of discounts available 
under the socialist, state-run Canadian health care monopoly but 
instead relies on the power of the marketplace, group discounts, and 
competitive pricing to achieve these price reductions for seniors. 
Let's duplicate the cost savings, but let's not think again about 
importing a failed Canadian health care plan--which Americans 
overwhelmingly rejected the last time it was proposed.
  Let me conclude by saying that it is time for Congress to act. I am 
deeply disappointed by reports in the media that opponents of our 
legislation don't want to support this bill so they can point their 
fingers and say that this is a ``do-nothing Congress.'' Enough already.
  It's time to stop playing politics with this issue and pass this 
legislation to help the seniors in my Ohio district afford prescription 
drugs. I urge my colleagues to support the bill.
  Mr. McGOVERN. Mr. Speaker, I rise today in strong opposition to the 
sham of a prescription drug plan the Republican Majority has forced 
upon this Chamber. For the past few years, I have joined many members 
in attempting to create a guaranteed Medicare Prescription Drug 
Benefit. Today, we are voting on a poll-driven handout to the insurance 
companies, and not a defined benefit available to all seniors that want 
such a plan.
  Mr. Speaker, the Democratic prescription drug plan, which the 
Majority is refusing to let us offer today, is a true Medicare benefit. 
Our plan is simple, common sense. We use the existing and successful 
Medicare program to administer a guaranteed benefit for every Medicare 
patient that wants to take part. Our plan has deductible, very low 
monthly premiums and a catastrophic benefit. The catastrophic benefit 
is the key part of our plan because thousands of seniors across this 
country are facing extremely high prescription drug bills that they 
have trouble paying. There is no reason that in this time of economic 
prosperity that America's seniors should have to choose between food 
and medicine. The Democratic bill will provide real relief for seniors 
so they do not have to make these life-threatening decisions.
  The Republican plan is nothing more than a handout to the insurance 
companies. Their plan is a means-tested, private plan that would 
provide modest incentives for insurance companies to provide a 
deficient benefit to a limited number of seniors. But the irony is that 
the insurance companies have already rejected this handout. Insurance 
companies are in the business of making profits, and they are not going 
to enter a market where they cannot make a profit.
  Instead of working to provide a comprehensive prescription benefit 
that every senior can have the option of joining, the Majority devised 
a poll-driven plant hat furthers their political goal of privatizing 
Medicare. They have never supported Medicare and have been waiting 
anxiously for, as former Speaker Gingrich said, Medicare to ``wither on 
the vine.''
  Across my district, seniors consistently approach me, clutching their 
drug bills, and ask me how they can pay for their expensive bills on 
their fixed incomes. Unfortunately, there's no help for the seniors 
across America unless they have access to a Medicare HMO (which 
thousands of rural patients do not), have a private health insurance 
plan, or have a costly Medigap plan. The reality is that if Medicare 
were developed from scratch today, a prescription drug benefit would be 
one of the first provisions added to the program. We have a 
responsibility to provide seniors with a guaranteed prescription drug 
benefit.
  Mr. Speaker, this debate today is an exercise in futility. The 
Majority is attempting to insulate itself from public opinion with a 
prescription drug plan that is hollow and provides no real relief for 
America's seniors. They are trying to pull a fast one on the American 
public. I urge my colleagues to reject this political grandstanding and 
to work for a real, guaranteed Medicare prescription drug benefit.
  Mr. FRELINGHUYSEN. Mr. Speaker, I spent the last two Saturdays in the 
11th Congressional District of New Jersey meeting with my constituents 
in town meetings as I have done on so many other weekends in the past. 
Through winter, spring and now summer, one of the issues I get asked 
about is: when will Congress provide a prescription drug benefit for 
our older Americans?
  Our constituents should not have to choose between putting food on 
the table or paying for their next month's supply of medicine. Our 
older men and women want, and deserve, the peace of mind that comes 
with knowing they are covered by a safe, affordable, and easily 
accessible prescription drug benefit.
  The tremendous advances in medical science have produced amazing 
medical breakthroughs that help older Americans live longer, healthier, 
more active and independent lives. And so much of this is due to the 
continued development of new and better medicines that keep people 
healthy and out of hospitals.
  And while 65 percent of older men and women in America already have 
some form of prescription medication coverage, there are still too many 
who do not. Congress, and the President, need to provide a prescription 
benefit that allows choice, is affordable, available to all, and one 
that our older Americans can depend on to provide safe, effective 
therapies now and for the future.
  Today's action in the House is a good first step--and it's not the 
last step, either. But as we take this first step, and each one that 
will follow, we need to work together, Democrats and Republicans alike. 
Prescription medication coverage isn't a political issue; it's a health 
issue. Older Americans need us to work together to keep the Medicare 
program strong and solvent and to modernize the Medicare program to 
reflect today's health care needs. Unlike 30 years ago when Medicare 
was first designed, today medicines are an integral, important part of 
health care, and without such prescription drug coverage, medical 
coverage for our seniors is incomplete. So, let's work together and 
help give our older Americans the health care coverage they need and 
deserve.
  Mr. PORTMAN. Mr. Speaker, when Medicare was created in 1965, 
prescription drugs were not used as they are today to treat health 
problems. That's all changed. Advances in pharmaceutical research and 
development have made it possible to address many complex health 
problems with a simple trip to the pharmacist.
  Unfortunately, as more and more Americans have come to rely on 
prescription drugs, their costs have escalated, making it difficult for 
many seniors to make ends meet. Clearly, it is time to offer a 
prescription drug benefit to all seniors.
  Today, about two-thirds of seniors have some kind of prescription 
drug coverage--either through a private plan they purchased or through 
a company retirement plan--that helps them to offset the cost of 
prescription drugs. But the remaining one-third of seniors have no 
coverage, and everyone feels the pinch of rising drug costs.

[[Page 12735]]

  Under the plan before us today, Medicare would offer a voluntary 
prescription drug benefit that would be similar to private drug 
insurance that many seniors carry today. If you're eligible for 
Medicare, you'd be given a choice between at least two plans that offer 
prescription drug coverage. All you would have to do is to go to a 
local pharmacy to get your prescription filled, show them your Medicare 
prescription drug card, and pay a pre-determined co-payment. There 
would be no claims to file or forms to fill out.
  To ensure that prescription drugs remain affordable, seniors who 
choose to enroll in such a Medicare prescription drug program would 
also be covered for so-called ``catastrophic'' prescription drug 
expenses. In other words, seniors would have the peace-of-mind to know 
that they will not be responsible for paying additional costs that 
might accrue if drug prices rise unexpectedly.
  Because of the unprecedented purchasing power that a Medicare-wide 
prescription drug program will have, it will also help to lower drug 
prices for all Americans. A recent study concluded that, on average, 
there would be a 25% discount on the prescription drugs people need so 
badly. This will really help protect seniors from higher drug prices 
and rising out-of-pocket expenses. And, because this will be a 
voluntary program, it will help seniors who need it most while allowing 
seniors who currently have prescription drug coverage they like to 
continue to enjoy their existing plan.
  Mr. Speaker, despite the heated rhetoric we're hearing on the floor 
today, Members on both sides of the aisle are very interested in adding 
a prescription drug benefit to Medicare. Yes, there are legitimate 
differences of opinion and approach. But we have a real opportunity to 
pass this bipartisan bill today--and to enact a Medicare prescription 
drug benefit this year.
  I urge my colleagues on both sides of the aisle--let's do the right 
thing for America's seniors. Let's set aside the attack ads and the 
``MediScare'' tactics--and provide Medicare prescription drug coverage 
for our constituents.
  Mr. PASTOR. Mr. Speaker, with prescription drug expenses climbing 
ever higher, 75% of Medicare beneficiaries do not have dependable, 
comprehensive prescription drug coverage, and many American seniors are 
forced to decide between the purchase of medication and other 
necessities such as food or electricity. This situation is simply not 
acceptable in a nation as prosperous as ours.
  Congress must take action to restore the dignity of American seniors 
and ease the growing burden on American families. The time has come for 
an affordable, voluntary, and reliable Medicare prescription coverage 
plan. The need has never been greater and public support has never been 
stronger.
  I am deeply disappointed that the Republican leadership in Congress 
seems intent on squandering this opportunity for meaningful action by 
limiting floor consideration to a single Republican proposal which 
would do little to provide affordable drug coverage to seniors.
  While American seniors need the opportunity to purchase affordable 
drug coverage no matter where they live, the Republican proposal 
guarantees opportunities only to the insurance and drug industries it 
would subsidize, with no guarantee of affordable plans for all seniors.
  While American families want the peace of mind that comes from 
defined and dependable coverage, the Republicans have introduced a sham 
proposal that even the insurance companies it would rely on say will 
simply not work.
  While Americans seek universal relief from bearing the full burden of 
devastating prescription drug expenses, regardless of their health or 
income, the Republicans offer only a divisive political ploy.
  There is an alternative. The Democrats today have introduced a plan 
that offers the security, equity and universality of coverage that our 
seniors deserve. Rather than private, stand-alone drug coverage that is 
neither affordable or workable, the Democratic plan builds upon the 
strengths of the Medicare program, providing voluntary access to basic 
drug benefits to all Medicare beneficiaries, regardless of their 
income, health status, or where they live. It is a plan that will truly 
help the Arizonans I represent, and a plan that I am proud to co-
sponsor.
  I call on the Republican leadership to move beyond political 
maneuvering and allow for meaningful and comprehensive debate on this 
issue which affects all of our constituents. Seniors in my district, 
and across America, deserve the security of an affordable and defined 
Medicare drug benefit. It is time that Congress rise to the occasion, 
listen to what the American people are so clearly calling for, and make 
it happen.
  Mr. CALVERT. Mr. Speaker, I rise in support of H.R. 4680, the 
Medicare Prescription 2000 Act. The bill is a fiscally sound way to 
help our seniors with a vital need. As co-chair of the bi-partisan 
Generic Drug Equity Caucus, I am encouraged by the bill's support for 
generic drug use.
  Currently, generics fill over 40 percent of all prescriptions in the 
United States, and are extremely affordable at only 10 to 15 cents for 
every dollar spent on brand name drugs. The Congressional Budget Office 
reported in 1994 that generic drug competition results in a cost 
savings to consumers of 8 to 10 billion dollars annually.
  Mr. Speaker, I urge my colleagues to vote for this sensible bill. I 
hope that we can include an even more explicit preference for the use 
of generic drugs when the bill is conferenced with the Senate. This is 
a good bill, it's right solution at a critical time. We all should vote 
aye.
  Mr. DAVIS of Virginia. Mr. Speaker, I rise today in support of H.R. 
4680, the Medicare Rx 2000 Act. I believe that this important piece of 
legislation is the best way to address the dire impact the run-away 
costs of prescription drugs are having on our nation's senior citizens 
and disabled Americans.
  The Medicare program provides significant health insurance coverage 
for its 39 million aged and disabled beneficiaries. However, the 
program fails to offer protection against the costs of most outpatient 
prescription drugs. Even though 65% of beneficiaries have some private 
or public coverage for these costs, many do not have adequate 
supplemental coverage for their drug costs.
  The absence of a significant drug benefit has concerned me and many 
of my colleagues for quite a long time. However, the potential cost of 
adding prescription drug coverage has been the primary impediment to 
its implementation. This year, Congress has made a serious commitment 
to providing prescription drugs for seniors by specifically setting 
aside $40 billion dollars of the budget surplus to create a 
prescription drug plan and to strengthen the Medicare program.
  I commend the Speaker's Task Force on Prescription Drugs, which has 
worked diligently to create a voluntary prescription drug plan that is 
accessible, affordable, and will not encroach on seniors who are 
currently satisfied by their supplemental plan. This private-public 
sector approach to providing prescription drugs to every interested 
senior is modeled after the Federal Employees Health Benefit Program 
(FEHBP), which combines the advantages of a ``defined benefits'' plan 
and a ``defined contribution'' plan. To those who choose to participate 
in this plan, the premiums are affordable, averaging just $37 a month. 
And by allowing seniors to participate in an insurance-based plan at a 
reduced cost, it will give seniors the benefit of group bargaining 
power, which will reduce the price tag for prescription drugs. Studies 
show that Americans with insurance coverage pay 15 to 39 percent less 
for prescription drugs than those without insurance.
  Most importantly, the Medicare Rx plan creates choices for seniors. 
H.R. 4680 will mandate that at least two prescription drug plans will 
be available in every area of the United States. A choice of plans will 
give Medicare beneficiaries the power to determine which high-quality 
private insurance plan would best serve their individual healthcare 
needs. Having more than one plan in every district also spurs 
competition between plans, creating incentives for plans to create 
better products.
  H.R. 4680 also reaches out to those individuals who are not 
financially able to afford their prescription medicine needs due to 
their income level or their escalating drug needs. This bill provides a 
full subsidy to low-income beneficiaries up to 135% of the poverty 
level and phases out that subsidy on a sliding scale to 150% of the 
poverty level. Furthermore, H.R. 4680 caps exorbitant drug costs with 
catastrophic drug coverage, meaning that Medicare will pay 100% of 
every seniors' drug costs beyond a certain level.
  Mr. Speaker, seniors deserve access to the best medicines available 
to lead healthy and independent lives and, in many cases, to avoid more 
expensive treatments such as surgery or hospitalization. We need to 
expand seniors' access to the same kind of private-sector plans that 
millions of working Americans benefit from. I urge all my colleagues to 
vote in support of the Medicare Rx Act of 2000, a fair and responsible 
prescription drug plan for all of America's seniors.
  The SPEAKER pro tempore (Mr. LaHood). All time for debate has 
expired.
  Pursuant to House Resolution 539, the previous question is ordered on 
the bill, as amended.
  The question is on the engrossment and third reading of the bill.
  The bill was ordered to be engrossed and read a third time, and was 
read the third time.

[[Page 12736]]




                Motion to Recommit Offered by Mr. Stark

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

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

       Strike all after the enacting clause and insert the 
     following:

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

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

        TITLE I--MEDICARE PRESCRIPTION MEDICINE BENEFIT PROGRAM

Sec. 101. Prescription medicine benefit program.

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

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

             TITLE II--IMPROVEMENT IN BENEFICIARY SERVICES

    Subtitle A--Improvement of Medicare Coverage and Appeals Process

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

            Subtitle B--Establishment of Medicare Ombudsman

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

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

                  Subtitle A--Medicare+Choice Reforms

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

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

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

         Subtitle C--Improvement of Certain Preventive Benefits

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

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

          Subtitle A--Payments for Inpatient Hospital Services

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

           Subtitle B--Payments for Skilled Nursing Services

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

             Subtitle C--Payments for Home Health Services

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

                 Subtitle D--Rural Provider Provisions

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

                      Subtitle E--Other Providers

Sec. 441. Update in renal dialysis composite rate.

            Subtitle F--Provision for Additional Adjustments

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

     SEC. 2. FINDINGS.

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

        TITLE I--MEDICARE PRESCRIPTION MEDICINE BENEFIT PROGRAM

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

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

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


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

       ``Sec. 1860. (a) In General.--There is established as a 
     part of the medicare program under this title a voluntary 
     insurance program to provide defined prescription medicine 
     benefits, including pharmacy services, in accordance with the 
     provisions of this part for individuals who are aged or 
     disabled or have end-stage renal disease and who voluntarily 
     elect to enroll under such program, to be financed from 
     premium payments by enrollees together with contributions 
     from funds appropriated by the Federal Government.
       ``(b) Noninterference by the Secretary.--In administering 
     the prescription medicine benefit program established under 
     this part, the Secretary may not--

[[Page 12737]]

       ``(1) require a particular formulary, institute a price 
     structure for benefits, or in any way ration benefits;
       ``(2) interfere in any way with negotiations between 
     benefit administrators and medicine manufacturers, or 
     wholesalers; or
       ``(3) otherwise interfere with the competitive nature of 
     providing a prescription medicine benefit using private 
     benefit administrators, except as is required to guarantee 
     coverage of the defined benefit.


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

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


          ``payment of defined basic and catastrophic benefits

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


                      ``eligibility and enrollment

       ``Sec. 1860C. (a) Eligibility.--Every individual who, in or 
     after 2003, is entitled to hospital insurance benefits under 
     part A or enrolled in the medical insurance program under 
     part B is eligible to enroll in the insurance program under 
     this part, during an enrollment period prescribed in or under 
     this section, in such manner and form as may be prescribed by 
     regulations.
       ``(b) Enrollment.--
       ``(1) In general.--Each individual who satisfies subsection 
     (a) shall be enrolled (or eligible to enroll) in the program 
     under this part in accordance with the provisions of section 
     1837, as if that section applied to this part, except as 
     otherwise explicitly provided in this part.
       ``(2) Single enrollment period.--Except as provided in 
     section 1837(i) (as such section applies to this part), 1860E 
     (relating to loss of coverage under the medicaid program), or 
     1860H(e) (relating to loss of employer or union coverage), or 
     as otherwise explicitly provided, no individual shall be 
     entitled to enroll in the program under this part at any time 
     after the initial enrollment period without penalty, and in 
     the case of all other late enrollments, the Secretary shall 
     develop a late enrollment penalty for the individual that 
     fully recovers the additional actuarial risk involved in 
     providing coverage for the individual.
       ``(3) Special enrollment period in 2003.--
       ``(A) In general.--An individual who first satisfies 
     subsection (a) in 2003 may, at any time on or before December 
     31, 2003--
       ``(i) enroll in the program under this part; and
       ``(ii) enroll or reenroll in such program after having 
     previously declined or terminated enrollment in such program.
       ``(B) Effective date of coverage.--An individual who 
     enrolls under the program under this part pursuant to 
     subparagraph (A) shall be entitled to benefits under this 
     part beginning on the first day of the month following the 
     month in which such enrollment occurs.
       ``(c) Period of Coverage.--
       ``(1) In general.--Except as otherwise provided in this 
     part, an individual's coverage under the program under this 
     part shall be effective for the period provided in section 
     1838, as if that section applied to the program under this 
     part.
       ``(2) Part d coverage terminated by termination of coverage 
     under parts a and b.--In addition to the causes of 
     termination specified in section 1838, an individual's 
     coverage under this part shall be terminated when the 
     individual retains coverage under neither the program under 
     part A nor the program under part B, effective on the 
     effective date of termination of coverage under part A or (if 
     later) under part B.


                 ``monthly premium; initial $25 premium

       ``Sec. 1860D. (a) Annual Establishment of Guaranteed Single 
     Rate for all Participating Beneficiaries.--
       ``(1) $25 monthly premium rate in 2003.--The monthly 
     premium rate in 2003 for prescription medicine benefits under 
     this part is $25.
       ``(2) Premium rates in subsequent years.--
       ``(A) In general.--The Secretary shall, during September of 
     2003 and of each succeeding year, determine and promulgate a 
     monthly premium rate for the succeeding year in accordance 
     with the provisions of this paragraph.

[[Page 12738]]

       ``(B) Determination of annual benefit costs.--The Secretary 
     shall estimate annually for the succeeding year the amount 
     equal to the total of the benefits (but not including 
     catastrophic benefits under section 1860B(c)) that will be 
     payable from the Prescription Medicine Insurance Account for 
     prescription medicines dispensed in such calendar year with 
     respect to enrollees in the program under this part. In 
     calculating such amount, the Secretary shall include an 
     appropriate amount for a contingency margin.
       ``(C) Determination of monthly premium rates.--
       ``(i) In general.--The Secretary shall determine the 
     monthly premium rate with respect to such enrollees for such 
     succeeding year, which shall be \1/12\ of the share specified 
     in clause (ii) of the amount determined under subparagraph 
     (B), divided by the total number of such enrollees, and 
     rounded (if such rate is not a multiple of 10 cents) to the 
     nearest multiple of 10 cents.
       ``(ii) Enrollee and employer percentage shares.--The share 
     specified in this clause, for purposes of clause (i), shall 
     be--

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

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


               ``prescription medicine insurance account

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


                      ``administration of benefits

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

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

       ``(ii) be accompanied by such information as the Secretary 
     may require on the entity's past performance; and
       ``(iii) disclose ownership and shared financial interests 
     with other entities involved in the delivery of the benefit 
     as proposed.
       ``(4) Criteria for competitive selection.--In awarding a 
     contract competitively, the Secretary shall consider the 
     comparative merits of each of the applications by eligible 
     entities, as determined on the basis of the entities' past 
     performance and other relevant factors, with respect to the 
     following:

[[Page 12739]]

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

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

       ``(iii) Development of program in cooperation with licensed 
     pharmacists.--The program shall be developed in cooperation 
     with licensed pharmacists and physicians.
       ``(iv) Considerations in pharmacy fees.--The benefit 
     administrators shall take into account, in establishing fees 
     for pharmacists and others providing services under the 
     medication therapy management program, the resources and time 
     used in implementing the program.
       ``(6) Education and information activities.--Each benefit 
     administrator shall have in place mechanisms for 
     disseminating educational and informational materials to 
     enrolled individuals and health care providers designed to 
     encourage effective and cost-effective use of prescription 
     medicine benefits and to ensure that enrolled individuals 
     understand their rights and obligations under the program.
       ``(7) Beneficiary protections.--
       ``(A) Confidentiality of health information.--Each benefit 
     administrator shall have in effect systems to safeguard the 
     confidentiality of health care information on enrolled 
     individuals, which comply with section 1106 and with section 
     552a of title 5, United States Code, and meet such additional 
     standards as the Secretary may prescribe.
       ``(B) Grievance and appeal procedures.--Each benefit 
     administrator shall have in place such procedures as the 
     Secretary may specify for hearing and resolving grievances 
     and appeals, including expedited appeals, brought by enrolled 
     individuals against the benefit administrator or a pharmacy 
     concerning benefits under this part, which shall include 
     procedures equivalent to those specified in subsections (f) 
     and (g) of section 1852.
       ``(8) Records, reports, and audits of benefit 
     administrators.--
       ``(A) Records and audits.--Each benefit administrator shall 
     maintain adequate records, and afford the Secretary access to 
     such records (including for audit purposes).
       ``(B) Reports.--Each benefit administrator shall make such 
     reports and submissions of financial and utilization data as 
     the Secretary may require taking into account standard 
     commercial practices.
       ``(9) Proposal for alternative coinsurance amount.--
       ``(A) Submission.--Each benefit administrator may submit a 
     proposal for decreased beneficiary cost-sharing for generic 
     prescription medicines, prescription medicines on the benefit 
     administrator's formulary, or prescription medicines obtained 
     through mail order pharmacies.

[[Page 12740]]

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


    ``incentive program to encourage employers to continue coverage

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

[[Page 12741]]

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


           ``appropriations to cover government contributions

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


                             ``definitions

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

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

       (a) State Option To Buy-In Dually Eligible Individuals.--
       (1) Coverage of premiums as medical assistance.--Section 
     1905(a) of the Social Security Act (42 U.S.C. 1396d) is 
     amended in the second sentence of the flush matter at the

[[Page 12742]]

     end by striking ``premiums under part B'' the first place it 
     appears and inserting ``premiums under parts B and D''.
       (2) State commitment to continue participation in part d 
     after benefit limit exceeded.--Section 1902(a) of such Act 
     (42 U.S.C. 1396a) is amended--
       (A) by striking ``and'' at the end of paragraph (64);
       (B) by striking the period at the end of paragraph (65)(B) 
     and inserting ``; and''; and
       (C) by adding at the end the following new paragraph:
       ``(66) provide that in the case of any individual whose 
     eligibility for medical assistance is not limited to medicare 
     or medicare medicine cost-sharing and for whom the State 
     elects to pay premiums under part D of title XVIII pursuant 
     to section 1860E, the State will purchase all prescription 
     medicines for such individual in accordance with the 
     provisions of such part D, without regard to whether the 
     basic benefit limitation for such individual under section 
     1860B(b)(3) has been reached.''.
       (b) Government Payment of Medicare Medicine Cost-Sharing 
     Required for Qualified Medicare Beneficiaries.--Section 
     1905(p)(3) of the Social Security Act (42 U.S.C. 1396d(p)(3)) 
     is amended--
       (1) in subparagraph (A)--
       (A) in clause (i), by striking ``and'' at the end;
       (B) in clause (ii), by inserting ``and'' at the end; and
       (C) by adding at the end the following new clause:
       ``(iii) premiums under section 1860D.''; and
       (2) in subparagraph (D)--
       (A) by inserting ``(i)'' after ``(D)''; and
       (B) by adding at the end the following:
       ``(ii) Part d cost-sharing.--The difference between the 
     amount that is paid under section 1860B and the amount that 
     would be paid under such section if any reference to `50 
     percent' therein were deemed a reference to `100 percent' 
     (or, if the Secretary approves a higher percentage under such 
     section, if such percentage were deemed to be 100 
     percent).''.
       (c) Government Payment of Medicare Medicine Cost-Sharing 
     Required for Medicare Beneficiaries With Incomes Between 100 
     and 150 Percent of Poverty Line.--
       (1) State plan requirement.--Section 1902(a)(10)(E) of the 
     Social Security Act (42 U.S.C. 1396a(a)(10)(E)) is amended--
       (A) in clause (iii), by striking ``and'' at the end; and
       (B) by adding at the end the following new clause:
       ``(v) for making medical assistance available for medicare 
     medicine cost-sharing (as defined in section 1905(x)(2)) for 
     qualified medicare medicine beneficiaries described in 
     section 1905(x)(1); and''.
       (2) 100 percent federal matching of state medical 
     assistance costs for medicare medicine cost-sharing.--Section 
     1903(a) of the Social Security Act (42 U.S.C. 1396b(a)) is 
     amended--
       (A) by redesignating paragraph (7) as paragraph (8); and
       (B) by inserting after paragraph (6) the following new 
     paragraph:
       ``(7) except in the case of amounts expended for an 
     individual whose eligibility for medical assistance is not 
     limited to medicare or medicare medicine cost-sharing, an 
     amount equal to 100 percent of amounts as expended as 
     medicare medicine cost-sharing for qualified medicare 
     medicine beneficiaries (as defined in section 1905(x)); 
     plus''.
       (3) Additional funds for medicare medicine cost-sharing in 
     territories.--Section 1108 of the Social Security Act (42 
     U.S.C. 1308) is amended--
       (A) in subsection (f), by striking ``subsection (g),'' and 
     inserting ``subsections (g) and (h)''; and
       (B) by adding at the end the following new subsection:
       ``(h) Additional Medicaid Payments to Territories for 
     Medicare Medicine Cost-Sharing.--.
       ``(1) In general.--In the case of a territory that develops 
     and implements a plan described in paragraph (2) (for 
     providing medical assistance with respect to the provision of 
     prescription drugs to medicare beneficiaries), the amount 
     otherwise determined under subsection (f) (as increased under 
     subsection (g)) for the State shall be increased by the 
     amount specified in paragraph (3).
       ``(2) Plan.--The plan described in this paragraph is a plan 
     that--
       ``(A) provides medical assistance with respect to the 
     provision of some or all medicare medicine cost sharing (as 
     defined in section 1905(x)(2)) to low-income medicare 
     beneficiaries; and
       ``(B) assures that additional amounts received by the State 
     that are attributable to the operation of this subsection are 
     used only for such assistance.
       ``(3) Increased amount.--
       ``(A) In general.--The amount specified in this paragraph 
     for a State for a year is equal to the product of--
       ``(i) the aggregate amount specified in subparagraph (B); 
     and
       ``(ii) the amount specified in subsection (g)(1) for that 
     State, divided by the sum of the amounts specified in such 
     section for all such States.
       ``(B) Aggregate amount.--The aggregate amount specified in 
     this subparagraph for--
       ``(i) 2003, is equal to $25,000,000; or
       ``(ii) a subsequent year, is equal to the aggregate amount 
     specified in this subparagraph for the previous year 
     increased by annual percentage increase specified in section 
     1860B(b)(3)(B) for the year involved.''.
       (4) Definitions of eligible beneficiaries and coverage.--
     Section 1905 of the Social Security Act (42 U.S.C. 1396d) is 
     amended by adding at the end the following new subsection:
       ``(x)(1) The term `qualified medicare medicine beneficiary' 
     means an individual--
       ``(A) who is enrolled or enrolling under part D of title 
     XVIII;
       ``(B) whose income (as determined under section 1612 for 
     purposes of the supplemental security income program, except 
     as provided in subsection (p)(2)(D)) is above 100 percent but 
     below 150 percent of the official poverty line (as referred 
     to in subsection (p)(2)) applicable to a family of the size 
     involved; and
       ``(C) whose resources (as determined under section 1613 for 
     purposes of the supplemental security income program) do not 
     exceed twice the maximum amount of resources that an 
     individual may have and obtain benefits under that program.
       ``(2) The term `medicare medicine cost-sharing' means the 
     following costs incurred with respect to a qualified medicare 
     medicine beneficiary, without regard to whether the costs 
     incurred were for items and services for which medical 
     assistance is otherwise available under the plan:
       ``(A) In the case of a qualified medicare medicine 
     beneficiary whose income (as determined under paragraph (1)) 
     is less than 135 percent of the official poverty line--
       ``(i) premiums under section 1860D; and
       ``(ii) the difference between the amount that is paid under 
     section 1860B and the amount that would be paid under such 
     section if any reference to `50 percent' therein were deemed 
     a reference to `100 percent' (or, if the Secretary approves a 
     higher percentage under such section, if such percentage were 
     deemed to be 100 percent).
       ``(B) In the case of a qualified medicare medicine 
     beneficiary whose income (as determined under paragraph (1)) 
     is at least 135 percent but less than 150 percent of the 
     official poverty line, a percentage of premiums under section 
     1860D, determined on a linear sliding scale ranging from 100 
     percent for individuals with incomes at 135 percent of such 
     line to 0 percent for individuals with incomes at 150 percent 
     of such line.
       ``(3) In the case of any State which is providing medical 
     assistance to its residents under a waiver granted under 
     section 1115, the Secretary shall require the State to meet 
     the requirement of section 1902(a)(10)(E) in the same manner 
     as the State would be required to meet such requirement if 
     the State had in effect a plan approved under this title.''.
       (d) Medicaid Medicine Price Rebates Unavailable With 
     Respect to Medicines Purchased Through Medicare Buy-In.--
     Section 1927 of the Social Security Act (42 U.S.C. 1396r-8) 
     is amended by adding at the end the following new subsection:
       ``(l) Medicines Purchased Through Medicare Buy-In.--The 
     provisions of this section shall not apply to prescription 
     medicines purchased under part D of title XVIII pursuant to 
     an agreement with the Secretary under section 1860E 
     (including any medicines so purchased after the limit under 
     section 1860B(b)(3) has been exceeded).''.
       (e) Amendments to Medicare Part D.--Part D of title XVIII 
     of the Social Security Act (as added by section 2) is amended 
     by inserting after section 1860D the following new section:


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

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

       ``(I) January 1, 2003;

[[Page 12743]]

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

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

     SEC. 103. OFFSET FOR CATASTROPHIC PRESCRIPTION MEDICINE 
                   BENEFIT.

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

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

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

             TITLE II--IMPROVEMENT IN BENEFICIARY SERVICES

    Subtitle A--Improvement of Medicare Coverage and Appeals Process

     SEC. 201. REVISIONS TO MEDICARE APPEALS PROCESS.

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


                       ``determinations; appeals

       ``Sec. 1869. (a) Initial Determinations.--The Secretary 
     shall promulgate regulations and make initial determinations 
     with respect to benefits under part A or part B in accordance 
     with those regulations for the following:
       ``(1) The initial determination of whether an individual is 
     entitled to benefits under such parts.
       ``(2) The initial determination of the amount of benefits 
     available to the individual under such parts.
       ``(3) Any other initial determination with respect to a 
     claim for benefits under such parts, including an initial 
     determination by

[[Page 12744]]

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

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

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

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

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

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

       ``(ii) Definition of national coverage determination.--For 
     purposes of this section, the term `national coverage 
     determination' means a determination by the Secretary 
     respecting whether or not a particular item or service is 
     covered nationally under this title, including such a 
     determination under 1862(a)(1).
       ``(B) Local coverage determination.--In the case of a local 
     coverage determination made by a fiscal intermediary or a 
     carrier under part A or part B respecting whether a 
     particular type or class of items or services is covered 
     under such parts, the following limitations apply:
       ``(i) Upon the filing of a complaint by an aggrieved party, 
     such a determination shall be reviewed by an administrative 
     law judge of the Social Security Administration. The 
     administrative law judge shall review the record and shall 
     permit discovery and the taking of evidence to evaluate the 
     reasonableness of the determination. In reviewing such a 
     determination, the administrative law judge shall defer only 
     to the reasonable findings of fact, reasonable 
     interpretations of law, and reasonable applications of fact 
     to law by the Secretary.
       ``(ii) Such a determination may be reviewed by the 
     Departmental Appeals Board of the Department of Health and 
     Human Services.
       ``(iii) A decision of the Departmental Appeals Board 
     constitutes a final agency action and is subject to judicial 
     review.
       ``(C) No material issues of fact in dispute.--In the case 
     of review of a determination under subparagraph (A)(i)(III) 
     or (B)(i) where the moving party alleges that there are no 
     material issues of fact in dispute, and alleges that the only 
     issue is the constitutionality of a provision of this title, 
     or that a regulation, determination, or ruling by the 
     Secretary is invalid, the moving party may seek review by a 
     court of competent jurisdiction.
       ``(D) Pending national coverage determinations.--
       ``(i) In general.--In the event the Secretary has not 
     issued a national coverage or noncoverage determination with 
     respect to a particular type or class of items or services, 
     an affected party may submit to the Secretary a request to 
     make such a determination with respect to such items or 
     services. By not later than the end of the 90-day period 
     beginning on the date the Secretary receives such a request, 
     the Secretary shall take one of the following actions:
       ``(I) Issue a national coverage determination, with or 
     without limitations.
       ``(II) Issue a national noncoverage determination.
       ``(III) Issue a determination that no national coverage or 
     noncoverage determination is appropriate as of the end of 
     such 90-day period with respect to national coverage of such 
     items or services.
       ``(IV) Issue a notice that states that the Secretary has 
     not completed a review of the request for a national coverage 
     determination and that includes an identification of the 
     remaining steps in the Secretary's review process and a 
     deadline by which the Secretary will complete the review and 
     take an action described in subclause (I), (II), or (III).
       ``(ii) In the case of an action described in clause 
     (i)(IV), if the Secretary fails to take an action referred to 
     in such clause by the deadline specified by the Secretary 
     under such clause, then the Secretary is deemed to have taken 
     an action described in clause (i)(III) as of the deadline.

[[Page 12745]]

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

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

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

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

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

[[Page 12746]]

     shall be maintained in an electronic database in a manner 
     that provides for identification of the following:

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

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

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

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

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

       (a) Expansion of Limitation of Liability Protection for 
     Beneficiaries With Respect to Medicare Claims Not Paid or 
     Paid Incorrectly.--
       (1) In general.--Section 1879 of the Social Security Act 
     (42 U.S.C. 1395pp) is amended by adding at the end the 
     following new subsections:
       ``(i) Notwithstanding any other provision of this Act, an 
     individual who is entitled to

[[Page 12747]]

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

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

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

            Subtitle B--Establishment of Medicare Ombudsman

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

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

[[Page 12748]]



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

                  Subtitle A--Medicare+Choice Reforms

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

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

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

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

     SEC. 303. INCREASING MINIMUM PAYMENT AMOUNT.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

         Subtitle C--Improvement of Certain Preventive Benefits

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

       (a) In General.--
       (1) Annual screening pap smear.--Section 1861(nn)(1) of the 
     Social Security Act (42 U.S.C. 1395x(nn)(1)) is amended by 
     striking ``if the individual involved has not had such a test 
     during the preceding 3 years, or during the preceding year in 
     the case of a woman described in paragraph (3).'' and 
     inserting ``if the woman involved has not had such a test 
     during the preceding year.''.
       (2) Annual screening pelvic exam.--Section 1861(nn)(2) of 
     such Act (42 U.S.C. 1395x(nn)(2)) is amended by striking 
     ``during the preceding 3 years, or during the preceding year 
     in the case of a woman described in paragraph (3),'' and 
     inserting ``during the preceding year,''.
       (3) Conforming amendment.--Section 1861(nn) of such Act (42 
     U.S.C. 1395x(nn)) is amended by striking paragraph (3).

[[Page 12749]]

       (b) Effective Date.--The amendments made by subsection (a) 
     apply to items and services furnished on or after January 1, 
     2001.

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

          Subtitle A--Payments for Inpatient Hospital Services

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

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

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

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

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

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

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

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

           Subtitle B--Payments for Skilled Nursing Services

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

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

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

     SEC. 412. EXTENSION OF MORATORIUM ON THERAPY CAPS.

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

             Subtitle C--Payments for Home Health Services

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

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

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

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

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

                 Subtitle D--Rural Provider Provisions

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

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

                      Subtitle E--Other Providers

     SEC. 441. UPDATE IN RENAL DIALYSIS COMPOSITE RATE.

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

            Subtitle F--Provision for Additional Adjustments

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

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


                         Parliamentary Inquiry

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

                              {time}  1845

  Mr. KLECZKA (during the reading) Mr. Speaker, I ask unanimous consent 
that the motion be considered as read and printed in the Record.
  The SPEAKER pro tempore (Mr. LaHood). Is there objection to the 
request of the gentleman from Wisconsin?
  Mr. DOGGETT. Mr. Speaker, reserving the right to object, subject to 
my reservation, I believe the part that was being read regards the 
ability of any citizen under the Medicare program to

[[Page 12750]]

be able to go out to their own pharmacy. There will be, under this 
plan, the right for a guaranteed benefit instead of the ploy that we 
have heard about all day that is really the product of the public 
relations firm.
  Mr. THOMAS. Mr. Speaker, I object.
  The SPEAKER pro tempore. Objection is heard.
  The Clerk will read.
  The Clerk continued reading the motion to recommit.


                         Parliamentary Inquiry

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

                              {time}  1945

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


                             Point of Order

  The SPEAKER pro tempore. The gentleman from California (Mr. Stark) 
will suspend.
  The Chair recognizes the gentleman from California (Mr. Thomas).
  Mr. THOMAS. Mr. Speaker, I had reserved points of order against the 
measure.
  The SPEAKER pro tempore. The gentleman from California (Mr. Thomas) 
has reserved the point of order and is recognized on his point of 
order.
  Mr. THOMAS. Mr. Speaker, I raise a point of order against the motion 
on the grounds that it violates section 302(f) of the Budget Act which 
prohibits consideration of legislation that would exceed the Committee 
on Ways and Means allocation of New Budget Authority for the period of 
2001 to 2005.
  The SPEAKER pro tempore. It is proper for the gentleman from 
California to insist on his point of order.
  Mr. STARK. Mr. Speaker, may I be heard on the point of order?
  The SPEAKER pro tempore. The gentleman may be heard.
  Mr. STARK. Mr. Speaker, I ask the Speaker's brief indulgence as this 
is a complex issue, but it is important to the seniors in our country.
  Mr. Speaker, this Republican resolution has all points of order 
waived, and we have none. The budget resolution which the Republicans 
have created that makes our hundred billion dollar bill out of order 
does not comport with what the Republicans have done to provide tax 
cuts for the wealthiest.
  For example, there is $661,000 each for the wealthiest Americans 
under a tax cut, and yet only $460 a year for senior citizens in 
prescription drugs. That basically gets to the heart of why I would 
object to the gentleman's point of order against our bill.
  There is a doctrine. It is clearly not fair. We have no points of 
order waived, and they do.
  I think it was Asher Hinds' for Speaker Jubilation Cornpone in 1867 
on a cold Thanksgiving evening who ruled on an issue of fairness, and I 
think it was Speaker Cornpone's statement, that goose again. What is 
sauce for the goose is sauce for the gander. Parliamentarian Cannon-
Deschler Precedents have carried this fairness doctrine down to today.
  So, Mr. Speaker, I would like to object to the point of order on the 
grounds of fairness that has been established in this House for over 
100 years and urge that the Speaker rule to allow the Democrats to 
present a plan which is arguably better than the Republican plan. Based 
on fairness, I do urge that the point of order is overridden.
  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
California (Mr. Thomas).
  Mr. THOMAS. Mr. Speaker, am I allowed to speak on the point of order, 
or would it be appropriate for others to speak?
  The SPEAKER pro tempore. The gentleman from California may proceed.
  Mr. THOMAS. Mr. Speaker, I am tempted to use the statement of the 
gentleman from California (Mr. Stark) who conceded that it was, in 
fact, in violation of the Budget Act, but I believe the Chair is in 
possession of a statement from the chairman on the Committee of the 
Budget which, in fact, supports the point of order that has been 
presented. Therefore, I would insist on my point of order.
  The SPEAKER pro tempore. The Chair recognizes the gentleman from 
Rhode Island (Mr. Weygand).
  Mr. WEYGAND. Mr. Speaker, may I be heard on the point of order?
  The SPEAKER pro tempore. The gentleman from Rhode Island may proceed.
  Mr. WEYGAND. Mr. Speaker, as a member of the Committee on the Budget, 
I know that the Committee on the Budget went through much frustration 
with regard to the concept that the Republicans are floating before us 
till now with regard to a prescription drug plan.
  They had allocated, in a very unusual way, about $40 billion based 
upon CBO estimates for anticipated surpluses and monies that would be 
available for such expenditures. The fact of the matter is that, over 
the last week and half, if we are talking about fairness, is the amount 
of surplus has been more than doubled even by CBO.
  So the basic premise for which the budget resolution and the 
Committee on the Budget deliberated is no longer valid because the 
amount of money that has been realized for the surplus is far more than 
what we realized when we first had those budget deliberations.
  In true fairness, if we are to look at this particular legislation 
that we are proposing, one should look at the fairness of the amount of 
surplus that is presently available to the Committee on the Budget. If 
indeed we are going to be fair, the chairman of the Committee on the 
Budget should reconvene the whole committee to take a look at exactly 
what truly is a surplus and, therefore, what could be spent on various 
other items, including a prescription drug benefit.
  We seek only to provide our seniors with a cost-effective way of 
providing for prescription drugs. I believe many of the people on the 
other side also want to do that. But what we propose is a system that 
will clearly work, will not be putting it into an insurance company 
program, but into a Medicare universal program that will be available 
to all seniors.
  I ask them to consider not raising this point of order, and I hope 
that we will dismiss with this point of order.
  Mr. RANGEL. Mr. Speaker, may I be heard on the point of order?
  The SPEAKER pro tempore. The Chair recognizes the gentleman from New 
York.
  Mr. RANGEL. Mr. Speaker, it just seems to me that, whether one is 
Republican or Democrat, that we all have at least the same concern for 
our older Americans who, as they get older, more susceptible to illness 
and pain, we have done a pretty good job with Medicare and giving older 
people access to doctors and to hospitals. Even initially those people 
who did not like the program would have to admit that it has really 
removed a lot of pain for some deserving Americans.
  Now, we reach the point in saying, what good is access to health care 
if after the doctors prescribed the medicine to keep one well, that one 
cannot afford to do it.
  Well, it was easy for us to say that we had to establish priorities. 
We always had the Communist threat. We always had to invest in defense. 
But now

[[Page 12751]]

when everybody agrees that, no matter who takes the credit for it, we 
have an opportunity really, not to pick and choose which are the 
winners and losers among the older people, but to be able to say we 
thank them for the investments that they have made in this great 
Republic. They are aged, but they are not forgotten; and that we trust 
them enough that we will take some of this surplus and make them whole 
so that they will never have to worry about not paying their rent or 
their mortgage or getting the foods that they need because they had to 
pay for their medicine.
  It seems to me that it may be that the majority, from a technical 
point of view, may be correct. But I think the American people would 
know or should know that the majority holds in its hands this evening 
the ability to waive that point of order and to say that they are 
prepared to do what is right, what is moral, and what is in their power 
to do.
  I just hope that the gentleman from California (Mr. Thomas) would be 
sensitive enough to at least consider at this point in time waiving the 
point of order so that we can give a better deal to those older people 
who deserve it.

                              {time}  2000

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


                 Motion to Table Offered by Mr. Thomas

  Mr. THOMAS. Mr. Speaker, I move to table the motion to appeal the 
ruling of the Chair.
  The SPEAKER pro tempore. The question is on the motion offered by the 
gentleman from California (Mr. Thomas) to lay on the table the appeal 
of the ruling of the Chair.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. STARK. Mr. Speaker, I object to the vote on the ground that a 
quorum is not present and make the point of order that a quorum is not 
present.
  The SPEAKER pro tempore. Evidently a quorum is not present.
  The Sergeant at Arms will notify absent Members.
  The vote was taken by electronic device, and there were--yeas 224, 
nays 202, not voting 8, as follows:

                             [Roll No. 355]

                               YEAS--224

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

                               NAYS--202

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

[[Page 12752]]



                             NOT VOTING--8

     Cook
     Filner
     Fowler
     Hinojosa
     Jefferson
     Markey
     Serrano
     Vento

                              {time}  2021

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


                Motion to Recommit Offered by Mr. Stark

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

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

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

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

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

        TITLE I--MEDICARE PRESCRIPTION MEDICINE BENEFIT PROGRAM

Sec. 101. Prescription medicine benefit program.

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

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

             TITLE II--IMPROVEMENT IN BENEFICIARY SERVICES

    Subtitle A--Improvement of Medicare Coverage and Appeals Process

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

            Subtitle B--Establishment of Medicare Ombudsman

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

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

                  Subtitle A--Medicare+Choice Reforms

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

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

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

         Subtitle C--Improvement of Certain Preventive Benefits

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

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

          Subtitle A--Payments for Inpatient Hospital Services

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

           Subtitle B--Payments for Skilled Nursing Services

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

             Subtitle C--Payments for Home Health Services

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

                 Subtitle D--Rural Provider Provisions

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

                      Subtitle E--Other Providers

Sec. 441. Update in renal dialysis composite rate.

            Subtitle F--Provision for Additional Adjustments

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

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

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

     SEC. 2. FINDINGS.

       Congress makes the following findings:
       (1) Prescription medicine coverage was not a standard part 
     of health insurance when the medicare program under title 
     XVIII of the Social Security Act was enacted in 1965. Since 
     1965, however, medicine coverage has become a key component 
     of most private and public health insurance coverage, except 
     for the medicare program.
       (2) At least \2/3\ of medicare beneficiaries have 
     unreliable, inadequate, or no medicine coverage at all.
       (3) Seniors who do not have medicine coverage typically 
     pay, at a minimum, 15 percent more than people with coverage.
       (4) Medicare beneficiaries at all income levels lack 
     prescription medicine coverage, with more than \1/2\ of such 
     beneficiaries having incomes greater than 150 percent of the 
     poverty line.
       (5) The number of private firms offering retiree health 
     coverage is declining.
       (6) Medigap premiums for medicines are too expensive for 
     most beneficiaries and are highest for older senior citizens, 
     who need prescription medicine coverage the most and 
     typically have the lowest incomes.

[[Page 12753]]

       (7) While the management of a medicare prescription 
     medicine benefit program should mirror the practices employed 
     by benefit administrators in delivering prescription 
     medicines, the Secretary of Health and Human Services should 
     oversee that program to assure that a guaranteed and defined 
     prescription drug benefit is provided to all medicare 
     beneficiaries.
       (8) All medicare beneficiaries should have access to a 
     voluntary, reliable, affordable, dependable, and defined 
     outpatient medicine benefit as part of the medicare program 
     that assists with the high cost of prescription medicines and 
     protects them against excessive out-of-pocket costs.

        TITLE I--MEDICARE PRESCRIPTION MEDICINE BENEFIT PROGRAM

     SEC. 101. PRESCRIPTION MEDICINE BENEFIT PROGRAM.

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

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


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

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


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

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


          ``payment of defined basic and catastrophic benefits

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


                      ``eligibility and enrollment

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

[[Page 12754]]

     under this part pursuant to subparagraph (A) shall be 
     entitled to benefits under this part beginning on the first 
     day of the month following the month in which such enrollment 
     occurs.
       ``(c) Period of Coverage.--
       ``(1) In general.--Except as otherwise provided in this 
     part, an individual's coverage under the program under this 
     part shall be effective for the period provided in section 
     1838, as if that section applied to the program under this 
     part.
       ``(2) Part d coverage terminated by termination of coverage 
     under parts a and b.--In addition to the causes of 
     termination specified in section 1838, an individual's 
     coverage under this part shall be terminated when the 
     individual retains coverage under neither the program under 
     part A nor the program under part B, effective on the 
     effective date of termination of coverage under part A or (if 
     later) under part B.


                 ``monthly premium; initial $25 premium

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

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

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


               ``prescription medicine insurance account

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


                      ``administration of benefits

       ``Sec. 1860G. (a) Administration.--
       ``(1) Use of private benefit administrators as provided for 
     under parts a and b.--The Secretary shall provide for 
     administration of the benefits under this part through a 
     contract with a private benefit administrator designated in 
     accordance with subsection (c), for enrolled individuals 
     residing in each service area designated pursuant to 
     subsection (b) (other than such individuals enrolled in a 
     Medicare+Choice program under part C), in accordance with the 
     provisions of this section.
       ``(2) Guarantee of program administration.--In the case of 
     a service area in which no private benefit administrator has 
     entered into a contract with the Secretary under paragraph 
     (1) for the administration of this part, the Secretary shall 
     seek to enter into a contract with a fiscal intermediary 
     under part A (with a contract under section 1816) or a 
     carrier under part B (with a contract under section 1842) to 
     administer this part in that service area in accordance with 
     the provisions of subsection (d). If the Secretary is unable 
     to enter into such a contract for that service area, the 
     Secretary shall provide for the administration of this part 
     in that service area in accordance with the provisions of 
     subsection (d) through another benefit administrator.
       ``(b) Designation of Geographic Service Areas.--
       ``(1) In general.--The Secretary shall divide the total 
     geographic area served by the programs under this title into 
     an appropriate number of service areas for purposes of 
     administration of benefits under this part.
       ``(2) Considerations in determining service areas.--In 
     determining or adjusting the number and boundaries of service 
     areas under this subsection, the Secretary shall seek to 
     ensure that--
       ``(A) there is a reasonable level of competition among 
     entities eligible to contract to administer the benefit 
     program under this section for each area; and
       ``(B) the designation of areas is consistent with the goal 
     of securing contracts under this section that use the volume 
     purchasing power of enrollees to obtain the same or similar 
     type of prescription medicine discounts as are afforded 
     favored, large purchasers.
       ``(c) Designation of Benefit Administrator.--
       ``(1) Award and duration of contract.--
       ``(A) Competitive award.--Each contract for a service area 
     shall be awarded competitively in accordance with section 5 
     of title 41, United States Code, for a period (subject to 
     subparagraph (B)) of not less than 2 nor more than 5 years.
       ``(B) Review.--A contract for a service area shall be 
     subject to an evaluation after a year and termination for 
     cause.
       ``(2) Eligible benefit administrators.--An entity shall not 
     be eligible for consideration as a benefit administrator 
     responsible for administering the prescription medicine 
     benefit program under this part in a service area unless it 
     meets at least the following criteria:
       ``(A) Type of entity.--The entity shall be capable of 
     administering a prescription medicine benefit program, and 
     may be a prescription medicine vendor, wholesale and retail 
     pharmacy delivery system, health care provider or insurer, 
     any other type of entity as the Secretary may specify, or a 
     consortium of such entities.
       ``(B) Performance capability.--The entity shall have 
     sufficient expertise, personnel, and resources to perform 
     effectively the benefit administration functions for such 
     area.

[[Page 12755]]

       ``(C) Financial integrity.--The entity and its officers, 
     directors, agents, and managing employees shall have a 
     satisfactory record of professional competence and 
     professional and financial integrity, and the entity shall 
     have adequate financial resources to perform services under 
     the contract without risk of insolvency.
       ``(3) Proposal requirements.--
       ``(A) In general.--An entity's proposal for award or 
     renewal of a contract under this section shall include such 
     material and information as the Secretary may require.
       ``(B) Specific information.--A proposal described in 
     subparagraph (A) shall--
       ``(i) include a detailed description of--

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

       ``(ii) be accompanied by such information as the Secretary 
     may require on the entity's past performance; and
       ``(iii) disclose ownership and shared financial interests 
     with other entities involved in the delivery of the benefit 
     as proposed.
       ``(4) Criteria for competitive selection.--In awarding a 
     contract competitively, the Secretary shall consider the 
     comparative merits of each of the applications by eligible 
     entities, as determined on the basis of the entities' past 
     performance and other relevant factors, with respect to the 
     following:
       ``(A) the estimated total cost of the contract, taking into 
     consideration the entity's proposed fees and price and cost 
     estimates, as evaluated and adjusted by the Secretary in 
     accordance with the provisions of the Federal Acquisition 
     Regulation concerning contracting by negotiation;
       ``(B) prior experience in administering a type of health 
     insurance program;
       ``(C) effectiveness in containing costs through obtaining 
     discounts from manufacturers, pricing incentives, utilization 
     management, and drug utilization review;
       ``(D) the quality and efficiency of benefit management 
     services with respect to such matters as claims processing 
     and benefits coordination; record-keeping and reporting; 
     maintenance of medical records confidentiality; and drug 
     utilization review, patient information, customer 
     satisfaction, and other activities supporting quality of 
     care; and
       ``(E) such other factors as the Secretary deems necessary 
     to evaluate the merits of each application.
       ``(5) Flexibility in securing best benefit administrator.--
     In awarding contracts under this subsection, the Secretary 
     may waive conflict of interest rules generally applicable to 
     Federal acquisitions (subject to such safeguards as the 
     Secretary may find necessary to impose) in circumstances 
     where the Secretary finds that such waiver--
       ``(A) is not inconsistent with the purposes of the programs 
     under this title and the best interests of enrolled 
     individuals; and
       ``(B) will permit a sufficient level of competition for 
     such contracts, promote efficiency of benefits 
     administration, or otherwise serve the objectives of the 
     program under this part.

     If the Secretary waives such rules, the Secretary shall 
     establish a special monitoring program to ensure that 
     beneficiaries served by the benefit administrator have access 
     to all necessary pharmaceuticals as prescribed.
       ``(6) Maximizing competition and savings.--In awarding 
     contracts under this section, the Secretary shall give 
     consideration to the need to maintain sufficient numbers of 
     entities eligible and willing to administer benefits under 
     this part to ensure vigorous competition for such contracts, 
     while also giving consideration to the need for a benefit 
     administrator to have sufficient purchasing power to obtain 
     appropriate cost savings.
       ``(d) Functions of Benefit Administrator.--A benefit 
     administrator for a service area shall (or in the case of the 
     function described in paragraph (9), may) perform the 
     following functions:
       ``(1) Participation agreements, prices, and fees.--
       ``(A) Privately negotiated prices.--Each benefit 
     administrator shall establish, through negotiations with 
     medicine manufacturers and wholesalers and pharmacies, a 
     schedule of prices for covered prescription medicines.
       ``(B) Agreements with any willing pharmacy.--Each benefit 
     administrator shall enter into participation agreements under 
     subsection (e) with any willing pharmacy, that include terms 
     that--
       ``(i) secure the participation of sufficient numbers of 
     pharmacies to ensure convenient access (including adequate 
     emergency access);
       ``(ii) permit the participation of any willing pharmacy in 
     the service area that meets the participation requirements 
     described in subsection (e); and
       ``(iii) allow for reasonable dispensing and consultation 
     fees for pharmacies.
       ``(C) Lists of prices and participating pharmacies.--Each 
     benefit administrator shall ensure that the negotiated prices 
     established under subparagraph (A) and the list of pharmacies 
     with agreements under subsection (e) are regularly updated 
     and readily available in the service area to health care 
     professionals authorized to prescribe medicines, 
     participating pharmacies, and enrolled individuals.
       ``(2) Tracking of covered enrolled individuals.--In 
     coordination with the Secretary, each benefit administrator 
     shall maintain accurate, updated records of all enrolled 
     individuals residing in the service area (other than 
     individuals enrolled in a plan under part C).
       ``(3) Payment and coordination of benefits.--
       ``(A) Payment.--Each benefit administrator shall--
       ``(i) administer claims for payment of benefits under this 
     part and encourage, to the maximum extent possible, use of 
     electronic means for the submissions of claims;
       ``(ii) determine amounts of benefit payments to be made; 
     and
       ``(iii) receive, disburse, and account for funds used in 
     making such payments, including through the activities 
     specified in the provisions of this paragraph.
       ``(B) Coordination.--Each benefit administrator shall 
     coordinate with the Secretary, other benefit administrators, 
     pharmacies, and other relevant entities as necessary to 
     ensure appropriate coordination of benefits with respect to 
     enrolled individuals, including coordination of access to and 
     payment for covered prescription medicines according to an 
     individual's in-service area plan provisions, when such 
     individual is traveling outside the home service area, and 
     under such other circumstances as the Secretary may specify.
       ``(C) Explanation of benefits.--Each benefit administrator 
     shall furnish to enrolled individuals an explanation of 
     benefits in accordance with section 1806(a), and a notice of 
     the balance of benefits remaining for the current year, 
     whenever prescription medicine benefits are provided under 
     this part (except that such notice need not be provided more 
     often than monthly).
       ``(4) Requirements with respect to formularies.--If a 
     benefit administrator uses a formulary to contain costs under 
     this part, the benefit administrator shall--
       ``(A) use a pharmacy and therapeutics committee comprised 
     of licensed practicing physicians, pharmacists, and other 
     health care practitioners to develop and manage the 
     formulary;
       ``(B) include in the formulary at least 1 medicine from 
     each therapeutic class and, if available, a generic 
     equivalent thereof; and
       ``(C) disclose to current and prospective enrollees and to 
     participating providers and pharmacies in the service area, 
     the nature of the formulary restrictions, including 
     information regarding the medicines included in the formulary 
     and any difference in cost-sharing amounts.
       ``(5) Cost and utilization management; quality assurance.--
     Each benefit administrator shall have in place effective cost 
     and utilization management, drug utilization review, quality 
     assurance measures, and systems to reduce medical errors, 
     including at least the following, together with such 
     additional measures as the Secretary may specify:
       ``(A) Drug utilization review.--A drug utilization review 
     program conforming to the standards provided in section 
     1927(g)(2) (with such modifications as the Secretary finds 
     appropriate).
       ``(B) Fraud and abuse control.--Activities to control 
     fraud, abuse, and waste, including prevention of diversion of 
     pharmaceuticals to the illegal market.
       ``(C) Medication therapy management.--
       ``(i) In general.--A program of medicine therapy management 
     and medication administration that is designed to assure that 
     covered outpatient medicines are appropriately used to 
     achieve therapeutic goals and reduce the risk of adverse 
     events, including adverse drug interactions.
       ``(ii) Elements of medication therapy management.--Such 
     program may include--

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

       ``(iii) Development of program in cooperation with licensed 
     pharmacists.--The program shall be developed in cooperation 
     with licensed pharmacists and physicians.
       ``(iv) Considerations in pharmacy fees.--The benefit 
     administrators shall take into account, in establishing fees 
     for pharmacists and others providing services under the 
     medication therapy management program, the resources and time 
     used in implementing the program.
       ``(6) Education and information activities.--Each benefit 
     administrator shall have in place mechanisms for 
     disseminating educational and informational materials to 
     enrolled individuals and health care providers designed to 
     encourage effective and cost-effective use of prescription 
     medicine benefits and to ensure that enrolled individuals 
     understand their rights and obligations under the program.
       ``(7) Beneficiary protections.--

[[Page 12756]]

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


    ``incentive program to encourage employers to continue coverage

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

[[Page 12757]]

       ``(B) at that time, the individual was covered under a 
     qualified retiree prescription medicine plan for which an 
     incentive payment was paid under this section; and
       ``(C)(i) the sponsor subsequently ceased to offer such 
     plan; or
       ``(ii) the value of prescription medicine coverage under 
     such plan became less than the value of the coverage under 
     the program under this part.
       ``(2) Special enrollment period.--An individual described 
     in paragraph (1) shall be eligible to enroll in the program 
     under this part during the 6-month period beginning on the 
     first day of the month in which--
       ``(A) the individual receives a notice that coverage under 
     such plan has terminated (in the circumstance described in 
     paragraph (1)(C)(i)) or notice that a claim has been denied 
     because of such a termination; or
       ``(B) the individual received notice of the change in 
     benefits (in the circumstance described in paragraph 
     (1)(C)(ii)).
       ``(f) Definitions.--In this section:
       ``(1) Employment-based retiree health coverage.--The term 
     `employment-based retiree health coverage' means health 
     insurance or other coverage of health care costs for retired 
     individuals (or for such individuals and their spouses and 
     dependents) based on their status as former employees or 
     labor union members.
       ``(2) Employer.--The term `employer' has the meaning given 
     to such term by section 3(5) of the Employee Retirement 
     Income Security Act of 1974 (except that such term shall 
     include only employers of 2 or more employees).
       ``(3) Qualified retiree prescription medicine plan.--The 
     term `qualified retiree prescription medicine plan' means 
     health insurance coverage included in employment-based 
     retiree health coverage that--
       ``(A) provides coverage of the cost of prescription 
     medicines whose actuarial value to each retired beneficiary 
     equals or exceeds the actuarial value of the benefits 
     provided to an individual enrolled in the program under this 
     part; and
       ``(B) does not deny, limit, or condition the coverage or 
     provision of prescription medicine benefits for retired 
     individuals based on age or any health status-related factor 
     described in section 2702(a)(1) of the Public Health Service 
     Act.
       ``(4) Sponsor.--The term `sponsor' has the meaning given 
     the term `plan sponsor' by section 3(16)(B) of the Employee 
     Retirement Income Security Act of 1974.


           ``appropriations to cover government contributions

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


                             ``definitions

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

[[Page 12758]]

       ``(6) Availability of negotiated prices.--Each contract 
     under this section shall provide that enrollees who exhaust 
     prescription medicine benefits under the plan will continue 
     to have access to prescription medicines at negotiated prices 
     equivalent to the total combined cost of such medicines to 
     the plan and the enrollee prior to such exhaustion of 
     benefits.''.
       (3) Exclusions from coverage.--
       (A) Application to part d.--Section 1862(a) of the Social 
     Security Act (42 U.S.C. 1395y(a)) is amended in the matter 
     preceding paragraph (1) by striking ``part A or part B'' and 
     inserting ``part A, B, or D''.
       (B) Prescription medicines not excluded from coverage if 
     appropriately prescribed.--Section 1862(a)(1) of such Act (42 
     U.S.C. 1395y(a)(1)) is amended--
       (i) in subparagraph (H), by striking ``and'' at the end;
       (ii) in subparagraph (I), by striking the semicolon at the 
     end and inserting ``, and''; and
       (iii) by adding at the end the following new subparagraph:
       ``(J) in the case of prescription medicines covered under 
     part D, which are not prescribed in accordance with such 
     part;''.

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

       (a) State Option To Buy-In Dually Eligible Individuals.--
       (1) Coverage of premiums as medical assistance.--Section 
     1905(a) of the Social Security Act (42 U.S.C. 1396d) is 
     amended in the second sentence of the flush matter at the end 
     by striking ``premiums under part B'' the first place it 
     appears and inserting ``premiums under parts B and D''.
       (2) State commitment to continue participation in part d 
     after benefit limit exceeded.--Section 1902(a) of such Act 
     (42 U.S.C. 1396a) is amended--
       (A) by striking ``and'' at the end of paragraph (64);
       (B) by striking the period at the end of paragraph (65)(B) 
     and inserting ``; and''; and
       (C) by adding at the end the following new paragraph:
       ``(66) provide that in the case of any individual whose 
     eligibility for medical assistance is not limited to medicare 
     or medicare medicine cost-sharing and for whom the State 
     elects to pay premiums under part D of title XVIII pursuant 
     to section 1860E, the State will purchase all prescription 
     medicines for such individual in accordance with the 
     provisions of such part D, without regard to whether the 
     basic benefit limitation for such individual under section 
     1860B(b)(3) has been reached.''.
       (b) Government Payment of Medicare Medicine Cost-Sharing 
     Required for Qualified Medicare Beneficiaries.--Section 
     1905(p)(3) of the Social Security Act (42 U.S.C. 1396d(p)(3)) 
     is amended--
       (1) in subparagraph (A)--
       (A) in clause (i), by striking ``and'' at the end;
       (B) in clause (ii), by inserting ``and'' at the end; and
       (C) by adding at the end the following new clause:
       ``(iii) premiums under section 1860D.''; and
       (2) in subparagraph (D)--
       (A) by inserting ``(i)'' after ``(D)''; and
       (B) by adding at the end the following:
       ``(ii) Part d cost-sharing.--The difference between the 
     amount that is paid under section 1860B and the amount that 
     would be paid under such section if any reference to `50 
     percent' therein were deemed a reference to `100 percent' 
     (or, if the Secretary approves a higher percentage under such 
     section, if such percentage were deemed to be 100 
     percent).''.
       (c) Government Payment of Medicare Medicine Cost-Sharing 
     Required for Medicare Beneficiaries With Incomes Between 100 
     and 150 Percent of Poverty Line.--
       (1) State plan requirement.--Section 1902(a)(10)(E) of the 
     Social Security Act (42 U.S.C. 1396a(a)(10)(E)) is amended--
       (A) in clause (iii), by striking ``and'' at the end; and
       (B) by adding at the end the following new clause:
       ``(v) for making medical assistance available for medicare 
     medicine cost-sharing (as defined in section 1905(x)(2)) for 
     qualified medicare medicine beneficiaries described in 
     section 1905(x)(1); and''.
       (2) 100 percent federal matching of state medical 
     assistance costs for medicare medicine cost-sharing.--Section 
     1903(a) of the Social Security Act (42 U.S.C. 1396b(a)) is 
     amended--
       (A) by redesignating paragraph (7) as paragraph (8); and
       (B) by inserting after paragraph (6) the following new 
     paragraph:
       ``(7) except in the case of amounts expended for an 
     individual whose eligibility for medical assistance is not 
     limited to medicare or medicare medicine cost-sharing, an 
     amount equal to 100 percent of amounts as expended as 
     medicare medicine cost-sharing for qualified medicare 
     medicine beneficiaries (as defined in section 1905(x)); 
     plus''.
       (3) Additional funds for medicare medicine cost-sharing in 
     territories.--Section 1108 of the Social Security Act (42 
     U.S.C. 1308) is amended--
       (A) in subsection (f), by striking ``subsection (g),'' and 
     inserting ``subsections (g) and (h)''; and
       (B) by adding at the end the following new subsection:
       ``(h) Additional Medicaid Payments to Territories for 
     Medicare Medicine Cost-Sharing.--
       ``(1) In general.--In the case of a territory that develops 
     and implements a plan described in paragraph (2) (for 
     providing medical assistance with respect to the provision of 
     prescription drugs to medicare beneficiaries), the amount 
     otherwise determined under subsection (f) (as increased under 
     subsection (g)) for the State shall be increased by the 
     amount specified in paragraph (3).
       ``(2) Plan.--The plan described in this paragraph is a plan 
     that--
       ``(A) provides medical assistance with respect to the 
     provision of some or all medicare medicine cost sharing (as 
     defined in section 1905(x)(2)) to low-income medicare 
     beneficiaries; and
       ``(B) assures that additional amounts received by the State 
     that are attributable to the operation of this subsection are 
     used only for such assistance.
       ``(3) Increased amount.--
       ``(A) In general.--The amount specified in this paragraph 
     for a State for a year is equal to the product of--
       ``(i) the aggregate amount specified in subparagraph (B); 
     and
       ``(ii) the amount specified in subsection (g)(1) for that 
     State, divided by the sum of the amounts specified in such 
     section for all such States.
       ``(B) Aggregate amount.--The aggregate amount specified in 
     this subparagraph for--
       ``(i) 2003, is equal to $25,000,000; or
       ``(ii) a subsequent year, is equal to the aggregate amount 
     specified in this subparagraph for the previous year 
     increased by annual percentage increase specified in section 
     1860B(b)(3)(B) for the year involved.''.
       (4) Definitions of eligible beneficiaries and coverage.--
     Section 1905 of the Social Security Act (42 U.S.C. 1396d) is 
     amended by adding at the end the following new subsection:
       ``(x)(1) The term `qualified medicare medicine beneficiary' 
     means an individual--
       ``(A) who is enrolled or enrolling under part D of title 
     XVIII;
       ``(B) whose income (as determined under section 1612 for 
     purposes of the supplemental security income program, except 
     as provided in subsection (p)(2)(D)) is above 100 percent but 
     below 150 percent of the official poverty line (as referred 
     to in subsection (p)(2)) applicable to a family of the size 
     involved; and
       ``(C) whose resources (as determined under section 1613 for 
     purposes of the supplemental security income program) do not 
     exceed twice the maximum amount of resources that an 
     individual may have and obtain benefits under that program.
       ``(2) The term `medicare medicine cost-sharing' means the 
     following costs incurred with respect to a qualified medicare 
     medicine beneficiary, without regard to whether the costs 
     incurred were for items and services for which medical 
     assistance is otherwise available under the plan:
       ``(A) In the case of a qualified medicare medicine 
     beneficiary whose income (as determined under paragraph (1)) 
     is less than 135 percent of the official poverty line--
       ``(i) premiums under section 1860D; and
       ``(ii) the difference between the amount that is paid under 
     section 1860B and the amount that would be paid under such 
     section if any reference to `50 percent' therein were deemed 
     a reference to `100 percent' (or, if the Secretary approves a 
     higher percentage under such section, if such percentage were 
     deemed to be 100 percent).
       ``(B) In the case of a qualified medicare medicine 
     beneficiary whose income (as determined under paragraph (1)) 
     is at least 135 percent but less than 150 percent of the 
     official poverty line, a percentage of premiums under section 
     1860D, determined on a linear sliding scale ranging from 100 
     percent for individuals with incomes at 135 percent of such 
     line to 0 percent for individuals with incomes at 150 percent 
     of such line.
       ``(3) In the case of any State which is providing medical 
     assistance to its residents under a waiver granted under 
     section 1115, the Secretary shall require the State to meet 
     the requirement of section 1902(a)(10)(E) in the same manner 
     as the State would be required to meet such requirement if 
     the State had in effect a plan approved under this title.''.
       (d) Medicaid Medicine Price Rebates Unavailable With 
     Respect to Medicines Purchased Through Medicare Buy-In.--
     Section 1927 of the Social Security Act (42 U.S.C. 1396r-8) 
     is amended by adding at the end the following new subsection:
       ``(l) Medicines Purchased Through Medicare Buy-In.--The 
     provisions of this section shall not apply to prescription 
     medicines purchased under part D of title XVIII pursuant to 
     an agreement with the Secretary under section 1860E 
     (including any medicines so purchased after the limit under 
     section 1860B(b)(3) has been exceeded).''.
       (e) Amendments to Medicare Part D.--Part D of title XVIII 
     of the Social Security Act (as added by section 2) is amended 
     by inserting after section 1860D the following new section:

[[Page 12759]]




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

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

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

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

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

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

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

             TITLE II--IMPROVEMENT IN BENEFICIARY SERVICES

    Subtitle A--Improvement of Medicare Coverage and Appeals Process

     SEC. 201. REVISIONS TO MEDICARE APPEALS PROCESS.

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

[[Page 12760]]




                       ``determinations; appeals

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

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

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

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

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

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

       ``(ii) Definition of national coverage determination.--For 
     purposes of this section, the term `national coverage 
     determination' means a determination by the Secretary 
     respecting whether or not a particular item or service is 
     covered nationally under this title, including such a 
     determination under 1862(a)(1).
       ``(B) Local coverage determination.--In the case of a local 
     coverage determination made by a fiscal intermediary or a 
     carrier under part A or part B respecting whether a 
     particular type or class of items or services is covered 
     under such parts, the following limitations apply:
       ``(i) Upon the filing of a complaint by an aggrieved party, 
     such a determination shall be reviewed by an administrative 
     law judge of the Social Security Administration. The 
     administrative law judge shall review the record and shall 
     permit discovery and the taking of evidence to evaluate the 
     reasonableness of the determination. In reviewing such a 
     determination, the administrative law judge shall defer only 
     to the reasonable findings of fact, reasonable 
     interpretations of law, and reasonable applications of fact 
     to law by the Secretary.
       ``(ii) Such a determination may be reviewed by the 
     Departmental Appeals Board of the Department of Health and 
     Human Services.
       ``(iii) A decision of the Departmental Appeals Board 
     constitutes a final agency action and is subject to judicial 
     review.
       ``(C) No material issues of fact in dispute.--In the case 
     of review of a determination under subparagraph (A)(i)(III) 
     or (B)(i) where the moving party alleges that there are no 
     material issues of fact in dispute, and alleges that the only 
     issue is the constitutionality of a provision of this title, 
     or that a regulation, determination, or ruling by the 
     Secretary is invalid, the moving party may seek review by a 
     court of competent jurisdiction.
       ``(D) Pending national coverage determinations.--
       ``(i) In general.--In the event the Secretary has not 
     issued a national coverage or noncoverage determination with 
     respect to a particular type or class of items or services, 
     an affected party may submit to the Secretary a request to 
     make such a determination with respect to such items or 
     services. By not later than the end of the 90-day period 
     beginning on the date the Secretary receives such a request, 
     the Secretary shall take one of the following actions:
       ``(I) Issue a national coverage determination, with or 
     without limitations.
       ``(II) Issue a national noncoverage determination.
       ``(III) Issue a determination that no national coverage or 
     noncoverage determination is appropriate as of the end of 
     such 90-day period with respect to national coverage of such 
     items or services.
       ``(IV) Issue a notice that states that the Secretary has 
     not completed a review of the

[[Page 12761]]

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

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

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

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

       ``(ii) Physician's family described.--For purposes of this 
     paragraph, a physician's family includes the physician's 
     spouse (other than a spouse who is legally separated from the 
     physician under a decree of divorce or separate maintenance), 
     children (including stepchildren and legally adopted 
     children), grandchildren, parents, and grandparents.
       ``(E) Explanation of determinations.--Any determination of 
     a qualified independent contractor shall be in writing, and 
     shall include a detailed explanation of the determination as 
     well as a discussion of the pertinent facts and applicable 
     regulations applied in making such determination.
       ``(F) Notice requirements.--Whenever a qualified 
     independent contractor makes a determination under this 
     subsection, the qualified independent contractor shall 
     promptly notify such individual and the entity responsible 
     for the payment of claims under part A or part B of such 
     determination.
       ``(G) Dissemination of information.--Each qualified 
     independent contractor shall, using the methodology 
     established by the Secretary under subsection (d)(4), make 
     available all determinations of such qualified independent 
     contractors to fiscal intermediaries (under section 1816), 
     carriers (under section 1842), peer review organizations 
     (under part B of title XI), Medicare+Choice organizations 
     offering Medicare+Choice plans under part C, and other 
     entities under contract with the Secretary to make initial 
     determinations under part A or part B or title XI.
       ``(H) Ensuring consistency in determinations.--Each 
     qualified independent contractor shall monitor its 
     determinations to ensure the consistency of its 
     determinations with respect to requests for reconsideration 
     of similar or related matters.
       ``(I) Data collection.--

[[Page 12762]]

       ``(i) In general.--Consistent with the requirements of 
     clause (ii), a qualified independent contractor shall collect 
     such information relevant to its functions, and keep and 
     maintain such records in such form and manner as the 
     Secretary may require to carry out the purposes of this 
     section and shall permit access to and use of any such 
     information and records as the Secretary may require for such 
     purposes.
       ``(ii) Type of data collected.--Each qualified independent 
     contractor shall keep accurate records of each decision made, 
     consistent with standards established by the Secretary for 
     such purpose. Such records shall be maintained in an 
     electronic database in a manner that provides for 
     identification of the following:

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

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

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

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

[[Page 12763]]

       ``(3) Findings described in paragraph (1) and 
     determinations and other decisions described in paragraph (2) 
     may be reviewed or appealed under section 1869.''.

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

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

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

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

            Subtitle B--Establishment of Medicare Ombudsman

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

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

[[Page 12764]]

       (4) The term ``carrier'' has the meaning given such term 
     under section 1842(f) of the Social Security Act (42 U.S.C. 
     1395u(f)).
       (5) The term ``Medicare+Choice organization'' has the 
     meaning given such term under section 1859(a)(1) of the 
     Social Security Act (42 U.S.C. 1395w-29(a)(1)).
       (6) The term ``Secretary'' means the Secretary of Health 
     and Human Services.

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

                  Subtitle A--Medicare+Choice Reforms

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

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

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

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

     SEC. 303. INCREASING MINIMUM PAYMENT AMOUNT.

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

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

       (a) Revision of Medicare Coverage for Immunosuppressive 
     Drugs.--
       (1) In general.--Section 1861(s)(2)(J) of the Social 
     Security Act (42 U.S.C. 1395x(s)(2)(J)) (as amended by 
     section 227(a) of the Medicare, Medicaid, and SCHIP Balanced 
     Budget Refinement Act of 1999 (113 Stat. 1501A-354), as 
     enacted into law by section 1000(a)(6) of Public Law 106-113) 
     is amended by striking ``, to an individual who receives'' 
     and all that follows before the semicolon at the end and 
     inserting ``to an individual who has received an organ 
     transplant''.
       (2) Conforming amendments.--
       (A) Section 1832 of the Social Security Act (42 U.S.C. 
     1395k) (as amended by section 227(b) of the Medicare, 
     Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 
     (113 Stat. 1501A-354), as enacted into law by section 
     1000(a)(6) of Public Law 106-113) is amended--
       (i) by striking subsection (b); and
       (ii) by redesignating subsection (c) as subsection (b).
       (B) Subsections (c) and (d) of section 227 of the Medicare, 
     Medicaid, and SCHIP Balanced Budget Refinement Act of 1999 
     (113 Stat. 1501A-355), as enacted into law by section 
     1000(a)(6) of Public Law 106-113, are repealed.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to drugs furnished on or after October 1, 2001.
       (b) Extension of Certain Secondary Payer Requirements.--
     Section 1862(b)(1)(C) of the Social Security Act (42 U.S.C. 
     1395y(b)(1)(C)) is amended by adding at the end the 
     following: ``With regard to immunosuppressive drugs furnished 
     on or after October 1, 2001, this subparagraph shall be 
     applied without regard to any time limitation.''.
       (c) Establishment of Part D Catastrophic Limit on Part B 
     Copayments for Immunosuppressive Drugs.--
       (1) In general.--Section 1833 of the Social Security Act 
     (42 U.S.C. 1395l) is amended by inserting after subsection 
     (o) the following new subsection:
       ``(p) Limitation on Amount of Deductibles and Coinsurance 
     for Immunosuppressive Drugs for Certain Beneficiaries.--With 
     respect to 2006 and each subsequent year, no deductibles and 
     coinsurance applicable to immunosuppressive drugs (as 
     described in section 1861(s)(2)(J)) in a year under this part 
     shall be imposed to the extent that the individual has 
     incurred expenditures in that year for out-of-pocket 
     expenditures for such immunosuppressive drugs in excess of 
     the catastrophic benefit level specified in section 
     1860B(c).''.
       (2) Effective date.--The amendment made by this subsection 
     shall apply to drugs furnished on or after October 1, 2001.

         Subtitle C--Improvement of Certain Preventive Benefits

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

       (a) In General.--
       (1) Annual screening pap smear.--Section 1861(nn)(1) of the 
     Social Security Act (42 U.S.C. 1395x(nn)(1)) is amended by 
     striking ``if the individual involved has not had such a test 
     during the preceding 3 years, or during the preceding year in 
     the case of a woman described in paragraph (3).'' and 
     inserting ``if the woman involved has not had such a test 
     during the preceding year.''.
       (2) Annual screening pelvic exam.--Section 1861(nn)(2) of 
     such Act (42 U.S.C.

[[Page 12765]]

     1395x(nn)(2)) is amended by striking ``during the preceding 3 
     years, or during the preceding year in the case of a woman 
     described in paragraph (3),'' and inserting ``during the 
     preceding year,''.
       (3) Conforming amendment.--Section 1861(nn) of such Act (42 
     U.S.C. 1395x(nn)) is amended by striking paragraph (3).
       (b) Effective Date.--The amendments made by subsection (a) 
     apply to items and services furnished on or after January 1, 
     2006.

       Amend the title so as to read: ``A Bill to amend title 
     XVIII of the Social Security Act to provide a prescription 
     medicine benefit under the medicare program, to enhance the 
     preventive benefits covered under such program, and for other 
     purposes.''

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

          Subtitle A--Payments for Inpatient Hospital Services

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

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

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

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

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

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

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

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

           Subtitle B--Payments for Skilled Nursing Services

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

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

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

     SEC. 412. EXTENSION OF MORATORIUM ON THERAPY CAPS.

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

             Subtitle C--Payments for Home Health Services

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

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

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

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

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

                 Subtitle D--Rural Provider Provisions

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

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

                      Subtitle E--Other Providers

     SEC. 441. UPDATE IN RENAL DIALYSIS COMPOSITE RATE.

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

            Subtitle F--Provision for Additional Adjustments

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

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

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

     SEC. 501. IMPLEMENTATION OF CERTAIN PROVISIONS BEFORE 2005 
                   CONTINGENT ON ENSURING DEBT RETIREMENT AND 
                   INTEGRITY OF THE SOCIAL SECURITY AND MEDICARE 
                   TRUST FUND SURPLUSES.

       (a) In General.--Notwithstanding any other provision of 
     this Act, the amendments made by title IV (and catastrophic 
     benefits under section 1860B(c) of the Social Security Act, 
     as inserted by section 101(a)(2)) shall not take apply for a 
     year before 2006 (or, in the case of title IV, a fiscal year 
     before fiscal year 2006), unless the certifications specified 
     by subsection (b) for the fiscal year (or the fiscal year in 
     which the calendar year involved begins) are made before the 
     beginning of such fiscal year.
       (b) Certifications Specified.--The certifications specified 
     in this subsection are the following:
       (1) The Director of Office of Management and Budget has 
     certified that a law has been enacted which--
       (A) ensures that a sufficient portion of the on-budget 
     surplus is reserved for debt retirement to put the Government 
     on a path to eliminate the publicly held debt by fiscal year 
     2012 under current economic and technical projections; and
       (B) ensures that, under current economic and technical 
     projections, the unified budget surplus for the fiscal year 
     in which such calendar year begins shall not be less than the 
     surplus of the Federal Old-Age and Survivors Insurance Trust 
     Fund and Federal Hospital Insurance Trust Fund for such 
     fiscal year.
       (2) The Board of Trustees of the Federal Old-Age and 
     Survivors Insurance Trust Fund and the Federal Disability 
     Insurance Trust Fund has certified either--
       (A) that outlays from such trust funds are not anticipated 
     to exceed the revenues to such trust funds during such fiscal 
     year and any of the next 5 fiscal years; or
       (B) that legislation has been enacted extending the 
     solvency of such trust funds for 75 years.
       (3) The Board of Trustees of the Federal Hospital Insurance 
     Trust Fund has certified--
       (A) that the outlays from such trust fund are not 
     anticipated to exceed the revenues to such trust fund during 
     such fiscal year and any of the next 5 fiscal years; and

[[Page 12766]]

       (B) that legislation has been enacted which strengthens and 
     modernizes the medicare program and extends the solvency of 
     such trust fund beyond 2030.

  Mr. STARK (during the reading). Mr. Speaker, I ask unanimous consent 
that the motion be considered as read and printed in the Record.
  The SPEAKER pro tempore. Is there objection to the request of the man 
from California?
  There was no objection.
  Mr. STARK. Mr. Speaker, I yield 30 seconds to the gentleman from 
Pennsylvania (Mr. Hoeffel).
  Mr. HOEFFEL. Mr. Speaker, I thank the gentleman for yielding me the 
time.
  Mr. Speaker, what is this House going to say to Earl and Irene Baker, 
who came to my town hall meeting and told me about the 21 pills that 
Earl takes every day and how Irene cannot fill her prescription drugs 
because she figures her husband is sicker than she is and they cannot 
afford to fill both sets of prescriptions?
  I say, do not put them at the mercy of private insurance companies, 
do not make them write a $39 check each month to pay their premium and 
keep their coverage. Give them a guaranteed, defined benefit, reliable 
Medicare prescription drug coverage. They deserve it and they need it.
  Mr. STARK. Mr. Speaker, I yield myself such time as I may consume.
  Mr. Speaker, I would like to explain that this Democratic motion to 
recommit would give the American people a true Medicare benefit and 
start us on the road to providing meaningful, adequate protection for 
seniors.
  Mr. Speaker, this is the same bill as was just ruled out of order 
with some changes to make the benefit to extend the benefits in time so 
that it fits within the budget requirements. It covers half of all 
spending on medicines up to $5,000. It has a $25 a month premium and 
that is deductible.
  It will not require our seniors to mail a check for $39 a month to 
some private insurance company, as would be required under the 
Republican bill. It has an out-of-pocket limit of $4,000. After the 
beneficiaries have spent $4,000, all funds above that spent for 
pharmaceutical prescriptions will be covered.
  Our package, in essence, provides twice as much help for our seniors 
as does the Republican bill.
  Mr. Speaker, in our motion to recommit, we use a budget determination 
safety device. It would provide up to $21 billion over 5 years and $40 
billion over 10 years to help health care providers, hospitals, nursing 
homes, home health agencies, rural hospitals, and others to deal with 
the unexpected tough cuts in the balanced budget amendment.
  It would provide these where there is certification by OMB and we are 
on a path to retiring the publicly held national public debt by 2012, 
that Social Security is safe, and that Medicare is solvent past 2030.
  Mr. Speaker, our proposal is not the Republicans' let-us-help-you-
buy-a-Medigap scheme, it is a benefit in Medicare as to Part A. They go 
to the doctor, any doctor, Medicare pays the bill. They pay 20 percent 
of that bill unless they have supplemental insurance or a union plan or 
they are in a managed care plan, in which case they pay nothing. That 
is what we do with pharmaceuticals.

                              {time}  2030

  They do not shop around from insurance company to insurance company. 
They can, in our plan, stay with their company plan. They can stay with 
their HMO. They can stay with whatever they are happy with, or they can 
voluntarily join the Medicare plan for a premium of $25 a month, $14 a 
month less than the Republican premium for twice the benefits.
  The plan will cover all Medicare beneficiaries, and it will cover 
5\1/2\ million more beneficiaries, according to the Congressional 
Budget Office, than the Republican plan.
  It helps low-income seniors, and it contains the same relief for 
rural HMOs as does the Republican bill.
  This is a bill that will help the American people, not the drug 
industry or the insurers. Quite contrarily, it will do nothing for the 
drug industry or the insurers. It will do something for our seniors who 
need the help.
  This should say, if one likes high-priced pills, support the 
Republican bill, which is supported by the drug makers' lobby. If they 
like hassles of HMOs, support the Republican bill. It would force 
everyone into a drug HMO program where they will be hassled over every 
pill their doctor prescribes, and they will be forced to drive miles 
and miles to some distant pharmacy. Under our bill, any pharmacy, any 
provider, would be able to provide their prescription if they chose to.
  If one wants a true, dependable, reliable benefit that covers all 
Americans who need help, support the Democratic bill and support the 
motion to recommit.
  The SPEAKER pro tempore (Mr. LaHood). Does the gentleman from 
California (Mr. Thomas) seek the time in opposition?
  Mr. THOMAS. I do, Mr. Speaker.
  Mr. Speaker, this was an important debate, although at some point the 
seniors are tired of waiting for Congress to act to put prescription 
drugs in Medicare. I want all Members to understand the significance of 
this vote on the motion to recommit. Although it may not seem 
important, the motion to recommit of the gentleman from California (Mr. 
Stark) is not forthwith. If the motion were forthwith, the legislation 
the gentleman described would be substituted for the bipartisan plan, 
and it would come back in front of the House to be voted upon.
  The motion the gentleman offered on the motion to recommit was to 
report promptly. That means, in reality, that any prescription drug 
benefit for seniors this year is gone.
  I would sober everyone up by saying that if they vote for this motion 
to recommit, they will have denied the seniors the opportunity that all 
of us want to provide them with.
  The reason there is no point of order against this motion, although 
over the 10-year period it spends $295 billion, is because, as the 
gentleman from California said, there is a trigger.
  One really ought to examine the trigger that is in this legislation. 
First of all, it says that there has to be a law that says we are going 
to retire the entire Federal debt by 2012. We are for that, but this 
bill adds $300 billion to the job of doing that.
  Secondly, it says that there has to be legislation that has been 
passed guaranteeing the solvency of Social Security for 75 years. We 
could have already done that.
  The chairman of the Committee on Ways and Means, the gentleman from 
Texas (Mr. Archer), and the chairman of the subcommittee, the gentleman 
from Florida (Mr. Shaw), have legislation ready to go that will not 
worry about the 75-year provision because it resolves the solvency of 
Social Security for all time.
  If the President had been willing to address that problem, this would 
not have been in their bill. We would have guaranteed the solvency of 
Social Security.
  There is another trigger that says solvency has to be guaranteed, 
under law, for the hospital trust fund, Medicare, beyond 2030.
  The bipartisan commission that this Congress created could have 
provided a plan had the President been willing to cooperate with the 
public and private Members of the House and the Senate, the Democrats 
and the Republicans who all came together and provided 10 votes for 
that plan, but not one of the President's appointees agreed with that 
plan. That would have been met had the President been willing to work 
with the bipartisan commission.
  So what do we have in front of us? A bill that gives no choice, 
limits choices of drugs. Basic benefits are flat, not just for 2003, 
2004 but 2005 as well, and provides no out-of-pocket protection for 
seniors until the year 2006. Two presidential elections have to go by 
before seniors are guaranteed that their exposure to drug costs are 
limited.
  The bipartisan plan has freedom to choose. There are a number of 
drugs in the various classes. The benefits are increased by the drug 
inflation rate, and one gets immediate pocketbook protection when they 
vote for H.R. 4680.

[[Page 12767]]

  I would ask everyone here to make sure that seniors get prescription 
drugs this year. Vote no on the motion to recommit, and vote yes on the 
bipartisan H.R. 4680.
  Mr. STENHOLM. Mr. Speaker, I rise in strong support of a Medicare 
prescription drug benefit that is available, affordable, dependable and 
voluntary for all seniors and against the bill the leadership has 
brought to the floor today.
  The Democratic plan will provide a meaningful prescription benefit 
that is available to all seniors, including those in rural areas. 
Unlike H.R. 4680, it will provide equal treatment for all seniors, 
without disparities in coverage between rural, urban and suburban 
regions. It will use market power of seniors to reduce costs through 
competition, and it will help low and middle-income seniors afford 
prescription medicine.
  I am particularly pleased that the Democratic plan contains an 
amendment I suggested which will ensure that the Medicare prescription 
drug benefit will fit within a fiscally responsible budget. 
Specifically, the Democratic plan requires that we stay on a course to 
take the Medicaid trust fund off budget and eliminate the debt held by 
the public by 2012. In addition, despite what some of my colleagues on 
the other side have stated, the Democratic plan would provide a 
catastrophic benefit in 2003 if Congress and the President work 
together to enact reforms to strengthen and modernize Medicare. Several 
supporters of H.R. 4860 have said we need to reform Medicare, but 
unlike the Democratic plan, H.R. 4860 does not call for action on 
Medicare reform.
  Relying on private sector plans to deliver prescription drug coverage 
as H.R. 4860 would do will not provide a meaningful benefit which is 
available to all seniors, including those in rural areas. It will not 
be cost effective for private plans to offer coverage in rural areas, 
which will result in expensive government subsidies to attract plans to 
rural areas. Rural seniors should not be forced to pay higher premiums 
or have less generous benefits, simply because they live in areas that 
are not financially attractive to private insurance companies.
  I am not hostile to private sector solutions. But we understand the 
role of the private sector is to make a profit. Meanwhile, the role of 
the government is to provide benefits in situations of great need that 
go unanswered by business.
  Over the past decade, crop insurance for farmers has shown not only 
that private insurance sometimes fails to provide a guaranteed safety 
net in necessary situations, but also that it can become enormously 
costly. Even though the Republican's prescription drug bill is tallied 
at $40 billion today, I have no doubt that, just like crop insurance, 
its costs would multiply many, many time as we have to come back to 
provide higher and higher subsidies over the coming years, and still 
seniors would be left without the guarantee of prescription drug 
coverage.
  Seniors deserve certainty about getting help with their prescription 
drugs. They deserve to be treated equally, regardless of whether they 
live in rural communities like my District or big cities like Dallas. 
They deserve to have their government supporting them with their most 
basic life needs. They deserve to have a Medicare program which is 
modernized in a way that reassures them the program will be strong for 
their grandkids. That is what the Democratic motion to recommit would 
do and what the bill before us fails to do.
  Mr. EVANS. Mr. Speaker, over the past few weeks, the Republican 
leadership in Congress has been scrambling to score political points by 
pushing a flawed prescription drug bill. But to millions of America's 
seniors, this is not a political game, but a matter of life or death.
  The Republican prescription drug plan is barely a plan at all. It is 
a sham that favors insurance companies over older Americans and profits 
over quality care. It fails to provide affordable prescription coverage 
for all seniors and limits the choices of essential medications and 
pharmacies.
  The so-called plan doesn't even lay out a defined benefits package. 
Private insurers will be able to establish restrictive formularies and 
exclude coverage of drugs that they deem too expensive.
  The Republicans are offering a benefits package that offers no 
benefits at all. If we pass this plan, our seniors would be left no 
better off then they are today. Let's give our seniors the health care 
they need and deserve. Please support the motion to recommit.
  Mr. EVANS. Mr. Speaker, over the past few weeks, the Republican 
leadership in Congress has been scrambling to score political points by 
pushing a flawed prescription drug bill. But to millions of America's 
seniors, this is not a political game, but a matter of life and death.
  The Republican prescription drug plan is barely a plan at all. It is 
a sham that favors insurance companies over older Americans and profits 
over quality care. It fails to provide affordable prescription coverage 
for all seniors and limits the choices of essential medications and 
pharmacies.
  The so-called plan doesn't even lay out a defined benefits package. 
Private insurers will be able to establish restrictive formularies and 
exclude coverage of drugs that they deem too expensive.
  The Republicans are offering a benefits package that offers no 
benefits at all. If we pass this plan, our seniors would be left no 
better off than they are today. Let's give our seniors the health care 
they need and deserve. Please support the motion to recommit.
  Mr. DAVIS of Illinois. Mr. Speaker, I rise today in support of the 
Democratic Alternative to the Republican proposal for a prescription 
drug benefit for seniors.
  As we know, the Medicare program provides significant health 
insurance coverage for more than 39 million seniors and disabled 
beneficiaries. However, the program fails to offer protection against 
the costs of most outpatient prescription drugs. In the 7th District of 
Illinois, there are 57,353 seniors (65 years and older) who need 
quality, affordable drug coverage. Patricia Conyers, William Danne, 
Cassandra Moore, and many others from my district deserve this.
  Life-saving and sustaining drugs are just as important to seniors 
today as surgery and clinical evaluation. For example, cardiovascular 
disease is the leading cause of death in America. Patients with severe 
heart failure must take at least 3, often 5, medicines at a time.
  Prescription drug prices continue to rise and the percentage of 
Americans over age 65 is sharply on the rise--as technology improves, 
it prolongs life. Last year alone, our nation spent $105 billion on 
prescription drugs. Accordingly to one study, we will spend 15-18% more 
in the next five years, more than $200 billion each year. This year, 
more than one-third of seniors on Medicare will spend over $1,000 on 
prescription medication.
  Even worse still are the seniors in our communities who have no drug 
coverage at all. They are forced to make life-threatening decisions 
between prescription drugs or food and clothing. These decisions are 
unfair and un-Democratic. Twenty-seven percent of urban beneficiaries, 
and 43% of rural beneficiaries lack prescription drug coverage for the 
entire year (1996).
  Clearly, neither Medicare nor the private insurance industry are 
addressing the problem adequately. Medicare is therefore in need of 
modernization and the addition of a drug benefit that is accessible and 
affordable to all beneficiaries, regardless of income level or 
location. The Democratic Plan would provide a voluntary prescription 
drug benefit accessible and affordable to all Medicare beneficiaries. 
This is not a new entitlement program as some Republican colleagues 
claim; it's simply a long-needed modernization of Medicare.
  Regarding accessibility. Our plan guarantees a prescription benefit 
for all Medicare beneficiaries, whether or not they are rich or poor, 
enrolled in traditional fee-for-service or Medicare+Choice plans. In 
our plan, low-income beneficiaries--below 150% poverty level ($17,000 
for a couple)--would receive extra help with the cost of premiums; 
those below 135% would have no cost-sharing.
  And regarding affordability: Under the Democratic plan, beneficiaries 
who join the program receive a high quality, defined benefit. It is 
affordable to all beneficiaries. Premiums would be $25 per month in 
2003. Seniors would pay no yearly deductible. Also, the plan offers 
catastrophic protection (over $4000 out-of-pocket costs) for 
beneficiaries. This plan, therefore, protects against the risk of 
industry ``cherry picking'' and negative selection of seniors with the 
greatest need.
  Finally, the Democratic prescription drug benefit is consistent with 
broader reform to strengthen and modernize Medicare. This plan includes 
greater access to the wide array of prescription drugs available in our 
marketplace by providing affordable premiums to all Medicare 
beneficiaries. Therefore, I urge all my colleagues to support the 
Democratic Plan for prescription drug coverage for seniors. This is 
true reform.
  The SPEAKER pro tempore. Without objection, the previous question is 
ordered on the motion to recommit.
  There was no objection.
  The SPEAKER. The question is on the motion to recommit.
  The question was taken; and the Speaker pro tempore announced that 
the noes appeared to have it.
  Mr. STARK. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.

[[Page 12768]]

  The vote was taken by electronic device, and there were--yeas 204, 
nays 222, not voting 9, as follows:

                             [Roll No. 356]

                               YEAS--204

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

                               NAYS--222

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

                             NOT VOTING--9

     Bass
     Cook
     DeGette
     Filner
     Hooley
     Knollenberg
     Markey
     Serrano
     Vento

                              {time}  2052

  So the motion to recommit was rejected.
  The result of the vote was announced as above recorded.
  Stated for:
  Mr. SERRANO. Mr. Speaker, I was unfortunately detained during 
rollcall No. 356, and I want the Record to reflect that if I had been 
present, my vote would have been ``yea.''
  The SPEAKER pro tempore (Mr. LaHood). The question is on the passage 
of the bill.
  The question was taken; and the Speaker pro tempore announced that 
the ayes appeared to have it.
  Mr. STARK. Mr. Speaker, on that I demand the yeas and nays.
  The yeas and nays were ordered.
  The vote was taken by electronic device, and there were--yeas 217, 
nays 214, not voting 4, as follows:

                             [Roll No. 357]

                               YEAS--217

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

                               NAYS--214

     Abercrombie
     Ackerman
     Allen
     Andrews
     Baca
     Baird
     Baldacci
     Baldwin
     Barcia
     Barrett (WI)
     Becerra
     Bentsen
     Berkley
     Berman
     Berry
     Bishop
     Blagojevich
     Blumenauer
     Bonior
     Borski
     Boswell
     Boucher
     Boyd
     Brady (PA)
     Brown (FL)
     Brown (OH)
     Capps
     Capuano
     Cardin
     Carson
     Chenoweth-Hage
     Clay
     Clayton
     Clement
     Clyburn
     Coburn
     Condit
     Conyers
     Costello
     Coyne
     Cramer
     Crowley
     Cummings
     Danner
     Davis (FL)
     Davis (IL)
     DeFazio
     DeGette
     Delahunt
     DeLauro
     Deutsch

[[Page 12769]]


     Dicks
     Dingell
     Dixon
     Doggett
     Dooley
     Doyle
     Edwards
     Engel
     Eshoo
     Etheridge
     Evans
     Farr
     Fattah
     Forbes
     Ford
     Frank (MA)
     Frost
     Ganske
     Gejdenson
     Gephardt
     Gonzalez
     Gordon
     Green (TX)
     Gutierrez
     Hall (OH)
     Hastings (FL)
     Hill (IN)
     Hilliard
     Hinchey
     Hinojosa
     Hoeffel
     Holden
     Holt
     Hooley
     Hostettler
     Hoyer
     Inslee
     Istook
     Jackson (IL)
     Jackson-Lee (TX)
     Jefferson
     John
     Johnson, E. B.
     Jones (OH)
     Kanjorski
     Kaptur
     Kennedy
     Kildee
     Kilpatrick
     Kind (WI)
     Kleczka
     Klink
     Kucinich
     LaFalce
     Lampson
     Lantos
     Larson
     Lee
     Levin
     Lewis (GA)
     Lipinski
     Lofgren
     Lowey
     Lucas (KY)
     Luther
     Maloney (NY)
     Mascara
     Matsui
     McCarthy (MO)
     McCarthy (NY)
     McDermott
     McGovern
     McIntyre
     McKinney
     McNulty
     Meehan
     Meek (FL)
     Meeks (NY)
     Menendez
     Millender-McDonald
     Miller, George
     Minge
     Mink
     Moakley
     Mollohan
     Moore
     Moran (VA)
     Morella
     Murtha
     Nadler
     Napolitano
     Neal
     Oberstar
     Obey
     Olver
     Ortiz
     Owens
     Pallone
     Pascrell
     Pastor
     Paul
     Payne
     Pelosi
     Phelps
     Pickett
     Pomeroy
     Price (NC)
     Rahall
     Rangel
     Reyes
     Rivers
     Rodriguez
     Roemer
     Rothman
     Roybal-Allard
     Rush
     Sabo
     Sanchez
     Sanders
     Sandlin
     Sanford
     Sawyer
     Schaffer
     Schakowsky
     Scott
     Serrano
     Sherman
     Shows
     Sisisky
     Skelton
     Slaughter
     Smith (MI)
     Smith (WA)
     Snyder
     Spratt
     Stabenow
     Stark
     Stenholm
     Strickland
     Stupak
     Tanner
     Tauscher
     Taylor (MS)
     Thompson (CA)
     Thompson (MS)
     Thurman
     Tierney
     Towns
     Turner
     Udall (CO)
     Udall (NM)
     Velazquez
     Visclosky
     Waters
     Watt (NC)
     Waxman
     Weiner
     Wexler
     Weygand
     Wise
     Woolsey
     Wu
     Wynn

                             NOT VOTING--4

     Cook
     Filner
     Markey
     Vento

                              {time}  2109

  So the bill was passed.
  The result of the vote was announced as above recorded.
  A motion to reconsider was laid on the table.

                          ____________________

                              {time}  2115