[Congressional Record (Bound Edition), Volume 149 (2003), Part 12]
[Senate]
[Pages 16769-16815]
[From the U.S. Government Publishing Office, www.gpo.gov]




                           TEXT OF AMENDMENTS

  SA 1094. Mr. SESSIONS submitted an amendment intended to be proposed 
by him to the bill S. 1, to amend title XVII of the Social Security Act 
to provide for a voluntary prescription drug benefit under the Medicare 
program and to strengthen and improve the Medicare program, and for 
other purposes; which was ordered to lie on the table; as follows:

       On page 637, line 1, strike ``no debt'' and all that 
     follows through line 5, and insert the following: ``the 
     sponsor of such an alien shall be responsible for paying 100 
     percent of the costs attributable to the provision of such 
     assistance, unless the sponsor demonstrates that the sponsor 
     has an extreme and unusual financial hardship that prevents 
     the sponsor from paying such costs.''
                                 ______
                                 
  SA 1095. Mr. REID (for himself and Mr. Cochran) proposed an amendment 
to the bill S. 1, to amend title XVIII of the Social Security Act to 
provide for a voluntary prescription drug benefit under the Medicare 
program and to strengthen and improve the Medicare program, and for 
other purposes; as follows:

       At the end of subtitle A of title I, add the following:

     SEC. __. MEDICATION THERAPY MANAGEMENT ASSESSMENT PROGRAM.

       (a) Establishment.--
       (1) In general.--The Secretary shall establish an 
     assessment program to contract with qualified pharmacists to 
     provide medication therapy management services to eligible 
     beneficiaries who receive care under the original medicare 
     fee-for-service program under parts A and B of title XVIII of 
     the Social Security Act to eligible beneficiaries.
       (2) Sites.--The Secretary shall designate 6 geographic 
     areas, each containing not less than 3 sites, at which to 
     conduct the assessment program under this section. At least 2 
     geographic areas designated under this paragraph shall be 
     located in rural areas.
       (3) Duration.--The Secretary shall conduct the assessment 
     program under this section for a 1-year period.
       (4) Implementation.--The Secretary shall implement the 
     program not later than January 1, 2005, but may not implement 
     the assessment program before October 1, 2004.
       (b) Participants.--Any eligible beneficiary who resides in 
     an area designated by the Secretary as an assessment site 
     under subsection (a)(2) may participate in the assessment 
     program under this section if such beneficiary identifies a 
     qualified pharmacist who agrees to furnish medication therapy 
     management services to the eligible beneficiary under the 
     assessment program.
       (c) Contracts With Qualified Pharmacists.--
       (1) In general.--The Secretary shall enter into a contract 
     with qualified pharmacists to provide medication therapy 
     management services to eligible beneficiaries residing in the 
     area served by the qualified pharmacist.
       (2) Number of qualified pharmacists.--The Secretary may 
     contract with more than 1 qualified pharmacist at each site.
       (d) Payment to Qualified Pharmacists.--
       (1) In general.--Under a contract entered into under 
     subsection (c), the Secretary shall pay qualified pharmacists 
     a fee for providing medication therapy management services.
       (2) Assessment of payment methodologies.--The Secretary 
     shall, in consultation with national pharmacists and pharmacy 
     associations, design the fee paid under paragraph (1) to test 
     various payment methodologies applicable with respect to 
     medication therapy management services, including a payment 
     methodology that applies a relative value scale and fee-
     schedule with respect to such services that take into account 
     the differences in--
       (A) the time required to perform the different types of 
     medication therapy management services;
       (B) the level of risk associated with the use of particular 
     outpatient prescription drugs or groups of drugs; and
       (C) the health status of individuals to whom such services 
     are provided.
       (e) Funding.--
       (1) In general.--Subject to paragraph (2), the Secretary 
     shall provide for the transfer from the Federal Supplementary 
     Insurance Trust Fund established under section 1841 of the 
     Social Security Act (42 U.S.C. 1395t) of such funds as are 
     necessary for the costs of carrying out the assessment 
     program under this section.
       (2) Budget neutrality.--In conducting the assessment 
     program under this section, the Secretary shall ensure that 
     the aggregate payments made by the Secretary do not exceed 
     the amount which the Secretary would have paid if the 
     assessment program under this section was not implemented.
       (f) Waiver Authority.--The Secretary may waive such 
     requirements of titles XI and XVIII of the Social Security 
     Act (42 U.S.C. 1301 et seq.; 1395 et seq.) as may be 
     necessary for the purpose of carrying out the assessment 
     program under this section.
       (g) Availability of Data.--During the period in which the 
     assessment program is conducted, the Secretary annually shall 
     make available data regarding--
       (1) the geographic areas and sites designated under 
     subsection (a)(2);
       (2) the number of eligible beneficiaries participating in 
     the program under subsection (b) and the level and types 
     medication therapy management services used by such 
     beneficiaries;
       (3) the number of qualified pharmacists with contracts 
     under subsection (c), the location of such pharmacists, and 
     the number of eligible beneficiaries served by such 
     pharmacists; and
       (4) the types of payment methodologies being tested under 
     subsection (d)(2).
       (h) Report.--
       (1) In general.--Not later than 6 months after the 
     completion of the assessment program under this section, the 
     Secretary shall submit to Congress a final report summarizing 
     the final outcome of the program and evaluating the results 
     of the program, together with recommendations for such 
     legislation and administrative action as the Secretary 
     determines to be appropriate.
       (2) Assessment of payment methodologies.--The final report 
     submitted under paragraph (1) shall include an assessment of 
     the feasibility and appropriateness of the various payment 
     methodologies tested under subsection (d)(2).
       (i) Definitions.--In this section:
       (1) Medication therapy management services.--The term 
     ``medication therapy management services'' means services or 
     programs furnished by a qualified pharmacist to an eligible 
     beneficiary, individually or on behalf of a pharmacy 
     provider, which are designed--
       (A) to ensure that medications are used appropriately by 
     such individual;
       (B) to enhance the individual's understanding of the 
     appropriate use of medications;
       (C) to increase the individual's compliance with 
     prescription medication regimens;
       (D) to reduce the risk of potential adverse events 
     associated with medications; and
       (E) to reduce the need for other costly medical services 
     through better management of medication therapy.
       (2) Eligible beneficiary.--The term ``eligible 
     beneficiary'' means an individual who is--
       (A) entitled to (or enrolled for) benefits under part A and 
     enrolled for benefits under part B of the Social Security Act 
     (42 U.S.C. 1395c et seq.; 1395j et seq.);
       (B) not enrolled with a Medicare+Choice plan or a 
     MedicareAdvantage plan under part C; and
       (C) receiving, in accordance with State law or regulation, 
     medication for--
       (i) the treatment of asthma, diabetes, or chronic 
     cardiovascular disease, including an individual on 
     anticoagulation or lipid reducing medications; or
       (ii) such other chronic diseases as the Secretary may 
     specify.
       (3) Qualified pharmacist.--The term ``qualified 
     pharmacist'' means an individual who is a licensed pharmacist 
     in good standing with the State Board of Pharmacy.
                                 ______
                                 
  SA 1096. Ms. MURKOWSKI (for herself and Mr. Stevens) submitted an 
amendment intended to be proposed by her to the bill S. 1, to amend the 
title XVIII of the Social Security Act to provide for a voluntary 
prescription drug benefit under the Medicare program and to strengthen 
and improve the Medicare program, and for other purposes; as follows:

       On page 529, between lines 8 and 9, insert the following:

     SEC. 455. FRONTIER EXTENDED STAY CLINIC DEMONSTRATION 
                   PROJECT.

       (a) Authority To Conduct Demonstration Project.--The 
     Secretary shall waive such provisions of the medicare program 
     established under title XVIII of the Social Security Act (42 
     U.S.C. 1395 et seq.) as are necessary to conduct a 
     demonstration project under which frontier extended stay 
     clinics described in subsection (b) in isolated rural areas 
     are treated as providers of items and services under the 
     medicare program.
       (b) Clinics Described.--A frontier extended stay clinic is 
     described in this subsection if the clinic--
       (1) is located in a community where the closest short-term 
     acute care hospital or critical access hospital is at least 
     75 miles away from the community or is inaccessible by public 
     road; and

[[Page 16770]]

       (2) is designed to address the needs of--
       (A) seriously or critically ill or injured patients who, 
     due to adverse weather conditions or other reasons, cannot be 
     transferred quickly to acute care referral centers; or
       (B) patients who need monitoring and observation for a 
     limited period of time.
       (c) Definitions.--In this section, the terms ``hospital'' 
     and ``critical access hospital'' have the meanings given such 
     terms in subsections (e) and (mm), respectively, of section 
     1861 of the Social Security Act (42 U.S.C. 1395x).
                                 ______
                                 
  SA 1097. Mr. McCONNELL proposed an amendment to the bill S. 1, to 
amend title XVIII of the Social Security Act to provide for a voluntary 
prescription drug benefit under the Medicare program and to strengthen 
and improve the Medical program, and for other purposes; as follows:

       At the end of subtitle A of title I, add the following:

     SEC. __. PROTECTING SENIORS WITH CANCER.

       Any eligible beneficiary (as defined in section 1860D(3) of 
     the Social Security Act) who is diagnosed with cancer shall 
     be protected from high prescription drug costs in the 
     following manner:
       (1) Subsidy eligible individuals with an income below 100 
     percent of the federal poverty line.--If the individual is a 
     qualified medicare beneficiary (as defined in section 1860D-
     19(a)(4) of such Act), such individual shall receive the full 
     premium subsidy and reduction of cost-sharing described in 
     section 1860D-19(a)(1) of such Act, including the payment 
     of--
       (A) no deductible;
       (B) no monthly beneficiary premium for at least one 
     Medicare Prescription Drug plan available in the area in 
     which the individual resides; and
       (C) reduced cost-sharing described in subparagraphs (C), 
     (D), and (E) of section 1860D-19(a)(1) of such Act.
       (2) Subsidy eligible individuals with an income between 100 
     and 135 percent of the federal poverty line.--If the 
     individual is a specified low income medicare beneficiary (as 
     defined in paragraph 1860D-19(4)(B) of such Act) or a 
     qualifying individual (as defined in paragraph 1860D-19(4)(C) 
     of such Act) who is diagnosed with cancer, such individual 
     shall receive the full premium subsidy and reduction of cost-
     sharing described in section 1860D-19(a)(2) of such Act, 
     including payment of--
       (A) no deductible;
       (B) no monthly premium for any Medicare Prescription Drug 
     plan described paragraph (1) or (2) of section 1860D-17(a) of 
     such Act; and
       (C) reduced cost-sharing described in subparagraphs (C), 
     (D), and (E) of section 1860D-19(a)(2) of such Act.
       (3) Subsidy-eligible individuals with income between 135 
     percent and 160 percent of the federal poverty level.--If the 
     individual is a subsidy-eligible individual (as defined in 
     section 1860D-19(a)(4)(D) of such Act) who is diagnosed with 
     cancer, such individual shall receive sliding scale premium 
     subsidy and reduction of cost-sharing for subsidy-eligible 
     individuals, including payment of--
       (A) for 2006, a deductible of only $50;
       (B) only a percentage of the monthly premium (as described 
     in section 1860D-19(a)(3)(A)(i)); and
       (C) reduced cost-sharing described in clauses (iii), (iv), 
     and (v) of section 1860D-19(a)(3)(A).
       (4) Eligible beneficiaries with income above 160 percent of 
     the federal poverty level.--If an individual is an eligible 
     beneficiary (as defined in section 1860D(3) of such Act), is 
     not described in paragraphs (1) through (3), and is diagnosed 
     with cancer, such individual shall have access to qualified 
     prescription drug coverage (as described in section 1860D-
     6(a)(1) of such Act), including payment of--
       (A) for 2006, a deductible of $275;
       (B) the limits on cost-sharing described section 1860D-
     6(c)(2) of such Act up to, for 2006, an initial coverage 
     limit of $4,500; and
       (C) for 2006, an annual out-of-pocket limit of $3,700 with 
     10 percent cost-sharing after that limit is reached.
                                 ______
                                 
  SA 1098. Mr. DAYTON submitted an amendment intended to be proposed by 
him to the bill S. 1, to amend title XVIII of the Social Security Act 
to provide for a voluntary prescription drug benefit under the Medicare 
program and to strengthen and improve the Medicare program, and for 
other purposes; which was ordered to lie on the table; as follows:

       Strike section 426 and insert the following:

     SEC. 426. INCREASE FOR GROUND AMBULANCE SERVICES.

       Section 1834(l) (42 U.S.C. 1395m(l)), as amended by section 
     405(b)(2), is amended by adding at the end the following new 
     paragraphs:
       ``(10) Temporary increase for ground ambulance services.--
       ``(A) In general.--Notwithstanding any other provision of 
     this subsection, in the case of ground ambulance services 
     furnished on or after January 1, 2004, and before January 1, 
     2007, the fee schedule established under this section, with 
     respect to both the payment rate for service and the payment 
     rate for mileage, shall provide that such rates otherwise 
     established, shall be increased by 21.5 percent.
       ``(B) Additional increase for services furnished in a rural 
     area.--Notwithstanding any other provision of this 
     subsection, in the case of ground ambulance services 
     furnished on or after January 1, 2004, and before January 1, 
     2007, for which the transportation originates in a rural area 
     described in subparagraph (C), the fee schedule established 
     under this section, with respect to both the payment rate for 
     service and the payment rate for mileage, shall provide that 
     such rates otherwise established, shall be increased by the 
     higher of either 20 percent of the rate determined after the 
     application of subparagraph (C), in addition to the increase 
     provided under subparagraph (A).
       ``(C) Determination of rural areas based on population 
     density within postal zip codes.--With respect to ground 
     ambulance services described in subparagraph (B), during the 
     period described in that subparagraph, paragraph (9) shall be 
     applied by substituting `(as determined under an area 
     classification system established by the Secretary that is 
     based on population density within postal zip code areas)' 
     for `(as defined in section 1886(d)(2)(D)) or in a rural 
     census tract of a metropolitan statistical area (as 
     determined under the most recent modification of the 
     Goldsmith Modification, originally published in the Federal 
     Register on February 27, 1992 (57 Fed. Reg. 6725))'. Not 
     later than December 31, 2003, the Secretary, taking into 
     account the recommendations contained in the report submitted 
     under section 221(b)(3) of the Medicare, Medicaid, and SCHIP 
     Benefits Improvement and Protection Act of 2000, shall 
     implement the increase in payment required under subparagraph 
     (B) and shall establish the classification system required by 
     the application of this subparagraph. The Secretary shall 
     provide such increased payment for services furnished on or 
     after the earlier of 30 days after the establishment of such 
     classification system or December 31, 2003.
       ``(D) Application of increased payments after 2007.--The 
     increased payments under subparagraphs (A) and (B) shall not 
     be taken into account in calculating payments for services 
     furnished on or after the period specified in such 
     subparagraph.
       ``(11) Conversion factor adjustments.--The Secretary shall 
     not adjust downward the conversion factor in any year because 
     of an evaluation of the prior year conversion factor.''.

     SEC. 426A. MEDICARE SECONDARY PAYOR (MSP) PROVISIONS.

       (a) Technical Amendment Concerning Secretary's Authority to 
     Make Conditional Payment When Certain Primary Plans Do Not 
     Pay Promptly.--
       (1) In general.--Section 1862(b)(2) (42 U.S.C. 1395y(b)(2)) 
     is amended--
       (A) in subparagraph (A)(ii), by striking ``promptly (as 
     determined in accordance with regulations)'';
       (B) in subparagraph (B)--
       (i) by redesignating clauses (i) through (iii) as clauses 
     (ii) through (iv), respectively; and
       (ii) by inserting before clause (ii), as so redesignated, 
     the following new clause:
       ``(i) Authority to make conditional payment.--The Secretary 
     may make payment under this title with respect to an item or 
     service if a primary plan described in subparagraph (A)(ii) 
     has not made or cannot reasonably be expected to make payment 
     with respect to such item or service promptly (as determined 
     in accordance with regulations). Any such payment by the 
     Secretary shall be conditioned on reimbursement to the 
     appropriate Trust Fund in accordance with the succeeding 
     provisions of this subsection.''.
       (2) Effective date.--The amendments made by paragraph (1) 
     shall be effective as if included in the enactment of title 
     III of the Medicare and Medicaid Budget Reconciliation 
     Amendments of 1984 (Public Law 98-369).
       (b) Clarifying Amendments to Conditional Payment 
     Provisions.--Section 1862(b)(2) (42 U.S.C. 1395y(b)(2)) is 
     further amended--
       (1) in subparagraph (A), in the matter following clause 
     (ii), by inserting the following sentence at the end: ``An 
     entity that engages in a business, trade, or profession shall 
     be deemed to have a self-insured plan if it carries its own 
     risk (whether by a failure to obtain insurance, or otherwise) 
     in whole or in part.'';
       (2) in subparagraph (B)(ii), as redesignated by subsection 
     (a)(2)(B)--
       (A) by striking the first sentence and inserting the 
     following: ``A primary plan, and an entity that receives 
     payment from a primary plan, shall reimburse the appropriate 
     Trust Fund for any payment made by the Secretary under this 
     title with respect to an item or service if it is 
     demonstrated that such primary plan has or had a 
     responsibility to make payment with respect to such item or 
     service. A primary plan's responsibility for such payment may 
     be demonstrated by a judgment, a payment conditioned upon the 
     recipient's compromise, waiver, or release (whether or not 
     there is a

[[Page 16771]]

     determination or admission of liability) of payment for items 
     or services included in a claim against the primary plan or 
     the primary plan's insured, or by other means.''; and
       (B) in the final sentence, by striking ``on the date such 
     notice or other information is received'' and inserting ``on 
     the date notice of, or information related to, a primary 
     plan's responsibility for such payment or other information 
     is received''; and
       (3) in subparagraph (B)(iii), as redesignated by subsection 
     (a)(2)(B), by striking the first sentence and inserting the 
     following: ``In order to recover payment made under this 
     title for an item or service, the United States may bring an 
     action against any or all entities that are or were required 
     or responsible (directly, as an insurer or self-insurer, as a 
     third-party administrator, as an employer that sponsors or 
     contributes to a group health plan, or large group health 
     plan, or otherwise) to make payment with respect to the same 
     item or service (or any portion thereof) under a primary 
     plan. The United States may, in accordance with paragraph 
     (3)(A) collect double damages against any such entity. In 
     addition, the United States may recover under this clause 
     from any entity that has received payment from a primary plan 
     or from the proceeds of a primary plan's payment to any 
     entity.''.
       (c) Clerical Amendments.--Section 1862(b) (42 U.S.C. 
     1395y(b)) is amended--
       (1) in paragraph (1)(A), by moving the indentation of 
     clauses (ii) through (v) 2 ems to the left; and
       (2) in paragraph (3)(A), by striking ``such'' before 
     ``paragraphs''.
                                 ______
                                 
  SA 1099. Mr. DAYTON submitted an amendment intended to be proposed by 
him to the bill S. 1, to amend title XVIII of the Social Security Act 
to provide for a voluntary prescription drug benefit under the Medicare 
program and to strengthen and improve the Medicare program, and for 
other purposes; which was ordered to lie on the table; as follows:

       Strike section 426 and insert the following:

     SEC. 426. INCREASE FOR GROUND AMBULANCE SERVICES.

       Section 1834(l) of the Social Security Act (42 U.S.C. 
     Sec. 1395m(l)), as amended by section 405(b)(2), is amended 
     by adding at the end the following new paragraphs.
       ``(10) Temporary increase for ambulance services.--
       ``(A) Ground ambulance services.--Notwithstanding any other 
     provision of this subsection, in the case of ground ambulance 
     services furnished on or after January 1, 2004 and before 
     January 1, 2007, the fee schedule established under this 
     section, with respect to both the payment rate for service 
     and the payment rate for mileage, shall provide that such 
     rates otherwise established shall be increased by 21.5 
     percent.
       ``(B) Additional increase for services furnished in a rural 
     area.--Notwithstanding any other provision of this 
     subsection, in the case of ground ambulance services 
     furnished on or after January 1, 2004 and before January 1, 
     2007, for which the transportation originates in a rural area 
     described in paragraph (10)(C), the fee schedule established 
     under this section, with respect to both the payment rate for 
     service and the payment rate for mileage, shall provide that 
     such rates otherwise established shall be increased by the 
     higher of either 20 percent or the following section:
       ``(C) Basing rural areas on population density by postal 
     zip codes.''
       (a) In General.--Section 1834(l) of the Social Security Act 
     (42 U.S.C. 1395m(l)) is amended in paragraph (9), as so 
     redesignated by section 2(a)(1), by striking ``(as defined in 
     section 1886(d)(2)(D)'' and all that follows through ``(57 
     Fed. Reg. 6725)'' and inserting ``(as determined under an 
     area classification system established by the Secretary that 
     is based on population density within postal zip code 
     areas)''.
       (b) Effective Date.--The Secretary of Health and Human 
     Services, taking into account the recommendations contained 
     in the report submitted under section 221(b)(3) the Medicare, 
     Medicaid, and SCHIP Benefits Improvements and Protection Act 
     of 2000, shall implement such increase in addition to the 
     increase under subparagraph (A). The Secretary shall 
     establish the classification system described in the 
     amendment made by subsection (a) by not later than December 
     31, 2003. Such amendment shall apply to services furnished on 
     or after such date, not later than 30 days after the 
     establishment of such system, as the Secretary shall provide 
     by regulation.
       ``(D) Application of increased payments after 2007.--The 
     increased payments under subparagraphs (A) and (B) shall not 
     be taken into account in calculating payments for services 
     furnished on or after the period specified in such 
     subparagraph.''
       ``(11) Conversion factor adjustments.--The Secretary shall 
     not adjust downward the conversion factor in any year because 
     of an evaluation of the prior year conversion factor.''
                                 ______
                                 
  SA 1100. Mr. DAYTON submitted an amendment intended to be proposed by 
him to the bill S. 1, to amend title XVIII of the Social Security Act 
to provide for a voluntary prescription drug benefit under the Medicare 
program and to strengthen and improve the Medicare program and for 
other purposes; which was ordered to lie on the table; as follows:

       At the end of subtitle A of title I, add the following:

     SEC. __. INCREASE IN DRUG BENEFIT.

       Notwithstanding any other provision of law, the Secretary 
     shall use $12,000,000,000 to improve the prescription drug 
     benefit added under part D of title XVIII of the Social 
     Security Act (as added by section 101) by eliminating 
     coverage gaps, reducing the premium or cost-sharing, or 
     expanding subsidies for low-income beneficiaries in lieu of 
     conducting any demonstration projects or making any increased 
     payments to providers authorized under this Act or the 
     amendments made by this Act.
                                 ______
                                 
  SA 1101. Mr. DAYTON submitted an amendment intended to be proposed by 
him to the bill S. 1, to amend title XVIII of the Social Security Act 
to provide for a voluntary prescription drug benefit under the Medicare 
program and to strengthen and improve the Medicare program and for 
other purposes; which was ordered to lie on the table; as follows:

       On page 134, strike line 9 and insert the following:
     under paragraph (1).
       ``(d) Implementation of Part D.--
       ``(1) In general.--Notwithstanding section 1860D-1(a)(4) or 
     any other provision of this part or part C, the Secretary 
     shall implement, and make benefits available under, this part 
     on January 1, 2005, unless the Secretary certifies in writing 
     to Congress, by not later than March 1, 2004, that such 
     implementation is not possible. If such implementation is 
     possible by January 1, 2005, the Secretary shall carry out 
     this part until the Administrator is appointed and able to 
     carry out this part. The Secretary shall implement sections 
     1807 and 1807A until the date of implementation as certified 
     by the Secretary.
       ``(2) Certification requirements.--A certification by the 
     Secretary under paragraph (1) that implementation of this 
     part is not possible by January 1, 2005, shall declare the 
     reasons for the impossibility and a new date certain (which 
     in no event shall be later than January 1, 2006) for 
     implementation of this part.
                                 ______
                                 
  SA 1102. Mr. McCONNELL proposed an amendment to the bill S. 1, to 
amend title XVIII of the Social Security Act to provide for a voluntary 
prescription drug benefit under the Medicare program and to strengthen 
and improve the Medicare program, and for other purposes; as follows:

       At the end of subtitle A of title I, add the following:

     SEC. __. PROTECTING SENIORS WITH ALZHEIMER'S DISEASE.

       Any eligible beneficiary (as defined in section 1860D(3) of 
     the Social Security Act) who is diagnosed with Alzheimer's 
     disease shall be protected from high prescription drug costs 
     in the following manner:
       (1) Subsidy eligible individuals with an income below 100 
     percent of the federal poverty line.--If the individual is a 
     qualified medicare beneficiary (as defined in section 1860D-
     19(a)(4) of such Act), such individual shall receive the full 
     premium subsidy and reduction of cost-sharing described in 
     section 1860D-19(a)(1) of such Act, including the payment 
     of--
       (A) no deductible;
       (B) no monthly beneficiary premium for at least one 
     Medicare Prescription Drug plan available in the area in 
     which the individual resides; and
       (C) reduced cost-sharing described in subparagraphs (C), 
     (D), and (E) of section 1860D-19(a)(1) of such Act.
       (2) Subsidy eligible individuals with an income between 100 
     and 135 percent of the federal poverty line.--If the 
     individual is a specified low income medicare beneficiary (as 
     defined in paragraph 1860D-19(4)(B) of such Act) or a 
     qualifying individual (as defined in paragraph 1860D-19(4)(C) 
     of such Act) who is diagnosed with Alzheimer's disease, such 
     individual shall receive the full premium subsidy and 
     reduction of cost-sharing described in section 1860D-19(a)(2) 
     of such Act, including payment of--
       (A) no deductible;
       (B) no monthly premium for any Medicare Prescription Drug 
     plan described paragraph (1) or (2) of section 1860D-17(a) of 
     such Act; and
       (C) reduced cost-sharing described in subparagraphs (C), 
     (D), and (E) of section 1860D-19(a)(2) of such Act.
       (3) Subsidy-eligible individuals with income between 135 
     percent and 160 percent of the federal poverty level.--If the 
     individual is a subsidy-eligible individual (as defined in 
     section 1860D-19(a)(4)(D) of such Act) who is diagnosed with 
     Alzheimer's disease, such individual shall receive sliding 
     scale

[[Page 16772]]

     premium subsidy and reduction of cost-sharing for subsidy-
     eligible individuals, including payment of--
       (A) for 2006, a deductible of only $50;
       (B) only a percentage of the monthly premium (as described 
     in section 1860D-19(a)(3)(A)(i)); and
       (C) reduced cost-sharing described in clauses (iii), (iv), 
     and (v) of section 1860D-19(a)(3)(A).
       (4) Eligible beneficiaries with income above 160 percent of 
     the federal poverty level.--If an individual is an eligible 
     beneficiary (as defined in section 1860D(3) of such Act), is 
     not described in paragraphs (1) through (3), and is diagnosed 
     with Alzheimer's disease, such individual shall have access 
     to qualified prescription drug coverage (as described in 
     section 1860D-6(a)(1) of such Act), including payment of--
       (A) for 2006, a deductible of $275;
       (B) the limits on cost-sharing described section 1860D-
     6(c)(2) of such Act up to, for 2006, an initial coverage 
     limit of $4,500; and
       (C) for 2006, an annual out-of-pocket limit of $3,700 with 
     10 percent cost-sharing after that limit is reached.
                                 ______
                                 
  SA 1103. Mr. DORGAN (for himself and Mr. Pryor) proposed an amendment 
SA 1092 proposed by Mr. Grassley (for himself and Mr. Baucus) to the 
bill S. 1, to amend title XVIII of the Social Security Act to provide 
for a voluntary prescription drug benefit under the Medicare program 
and to strengthen and improve the Medicare program and for other 
purposes; as follows:

       In lieu of the matter proposed to be inserted, insert the 
     following:

     SEC. __. AGGREGATE REDUCTION IN MONTHLY BENEFICIARY 
                   OBLIGATIONS.

       Section 1860D-17, as added by section 101, is amended by 
     adding at the end the following:
       ``(d) Aggregate Reduction in Monthly Beneficiary 
     Obligations.--The Administrator shall for each year 
     (beginning with 2009) determine a percentage which--
       ``(1) shall apply in lieu of the applicable percent 
     otherwise determined under subsection (c) for that year, and
       ``(2) will result in a decrease of $2,400,000,000 for that 
     year in the aggregate monthly beneficiary obligations 
     otherwise required of all eligible beneficiaries enrolled in 
     a Medicare Prescription Drug Plan or a Medicare Advantage 
     plan that provides qualified prescription drug coverage.5

     This subsection shall not apply in determining the applicable 
     percent under subsection (c) for purposes of section 1860D-
     21.''.
                                 ______
                                 
  SA 1104. Mr. KOHL (for himself and Mr. Reid) submitted an amendment 
intended to be proposed by him to the bill S. 1, to amend title XVIII 
of the Social Security Act to provide for a voluntary prescription drug 
benefit under the Medicare program and to strengthen and improve the 
Medicare program, and for other purposes; which was ordered to lie on 
the table; as follows:

       At the end of title VI, add the following:

     SEC. 6__. ESTABLISHMENT OF PROGRAM TO PREVENT ABUSE OF 
                   NURSING FACILITY RESIDENTS.

       (a) In General.--
       (1) Screening of skilled nursing facility and nursing 
     facility provisional employees.--
       (A) Medicare program.--Section 1819(b) (42 U.S.C. 1395i-
     3(b)) is amended by adding at the end the following:
       ``(8) Screening of skilled nursing facility workers.--
       ``(A) Background checks of provisional employees.--Subject 
     to subparagraph (B)(ii), after a skilled nursing facility 
     selects an individual for a position as a skilled nursing 
     facility worker, the facility, prior to employing such worker 
     in a status other than a provisional status to the extent 
     permitted under subparagraph (B)(ii), shall--
       ``(i) give such worker written notice that the facility is 
     required to perform background checks with respect to 
     provisional employees;
       ``(ii) require, as a condition of employment, that such 
     worker--

       ``(I) provide a written statement disclosing any conviction 
     for a relevant crime or finding of patient or resident abuse;
       ``(II) provide a statement signed by the worker authorizing 
     the facility to request the search and exchange of criminal 
     records;
       ``(III) provide in person to the facility a copy of the 
     worker's fingerprints or thumb print, depending upon 
     available technology; and
       ``(IV) provide any other identification information the 
     Secretary may specify in regulation;

       ``(iii) initiate a check of the data collection system 
     established under section 1128E in accordance with 
     regulations promulgated by the Secretary to determine whether 
     such system contains any disqualifying information with 
     respect to such worker; and
       ``(iv) if that system does not contain any such 
     disqualifying information--

       ``(I) request through the appropriate State agency that the 
     State initiate a State and national criminal background check 
     on such worker in accordance with the provisions of 
     subsection (e)(6); and
       ``(II) submit to such State agency the information 
     described in subclauses (II) through (IV) of clause (ii) not 
     more than 7 days (excluding Saturdays, Sundays, and legal 
     public holidays under section 6103(a) of title 5, United 
     States Code) after completion of the check against the system 
     initiated under clause (iii).

       ``(B) Prohibition on hiring of abusive workers.--
       ``(i) In general.--A skilled nursing facility may not 
     knowingly employ any skilled nursing facility worker who has 
     any conviction for a relevant crime or with respect to whom a 
     finding of patient or resident abuse has been made.
       ``(ii) Provisional employment.--After complying with the 
     requirements of clauses (i), (ii), and (iii) of subparagraph 
     (A), a skilled nursing facility may provide for a provisional 
     period of employment for a skilled nursing facility worker 
     pending completion of the check against the data collection 
     system described under subparagraph (A)(iii) and the 
     background check described under subparagraph (A)(iv). 
     Subject to clause (iii), such facility shall maintain direct 
     supervision of the covered individual during the worker's 
     provisional period of employment.
       ``(iii) Exception for small rural skilled nursing 
     facilities.--In the case of a small rural skilled nursing 
     facility (as defined by the Secretary), the Secretary shall 
     provide, by regulation after consultation with providers of 
     skilled nursing facility services and entities representing 
     beneficiaries of such services, for an appropriate level of 
     supervision with respect to any provisional employees 
     employed by the facility in accordance with clause (ii). Such 
     regulation should encourage the provision of direct 
     supervision of such employees whenever practicable with 
     respect to such a facility and if such supervision would not 
     impose an unreasonable cost or other burden on the facility.
       ``(C) Reporting requirements.--A skilled nursing facility 
     shall report to the State any instance in which the facility 
     determines that a skilled nursing facility worker has 
     committed an act of resident neglect or abuse or 
     misappropriation of resident property in the course of 
     employment by the facility.
       ``(D) Use of information.--
       ``(i) In general.--A skilled nursing facility that obtains 
     information about a skilled nursing facility worker pursuant 
     to clauses (iii) and (iv) of subparagraph (A) may use such 
     information only for the purpose of determining the 
     suitability of the worker for employment.
       ``(ii) Immunity from liability.--A skilled nursing facility 
     that, in denying employment for an individual selected for 
     hiring as a skilled nursing facility worker (including during 
     the period described in subparagraph (B)(ii)), reasonably 
     relies upon information about such individual provided by the 
     State pursuant to subsection (e)(6) or section 1128E shall 
     not be liable in any action brought by such individual based 
     on the employment determination resulting from the 
     information.
       ``(iii) Criminal penalty.--Whoever knowingly violates the 
     provisions of clause (i) shall be fined in accordance with 
     title 18, United States Code, imprisoned for not more than 2 
     years, or both.
       ``(E) Civil penalty.--
       ``(i) In general.--A skilled nursing facility that violates 
     the provisions of this paragraph shall be subject to a civil 
     penalty in an amount not to exceed--

       ``(I) for the first such violation, $2,000; and
       ``(II) for the second and each subsequent violation within 
     any 5-year period, $5,000.

       ``(ii) Knowing retention of worker.--In addition to any 
     civil penalty under clause (i), a skilled nursing facility 
     that--

       ``(I) knowingly continues to employ a skilled nursing 
     facility worker in violation of subparagraph (A) or (B); or
       ``(II) knowingly fails to report a skilled nursing facility 
     worker under subparagraph (C),

     shall be subject to a civil penalty in an amount not to 
     exceed $5,000 for the first such violation, and $10,000 for 
     the second and each subsequent violation within any 5-year 
     period.
       ``(F) Definitions.--In this paragraph:
       ``(i) Conviction for a relevant crime.--The term 
     `conviction for a relevant crime' means any Federal or State 
     criminal conviction for--

       ``(I) any offense described in paragraphs (1) through (4) 
     of section 1128(a); and
       ``(II) such other types of offenses as the Secretary may 
     specify in regulations, taking into account the severity and 
     relevance of such offenses, and after consultation with 
     representatives of long-term care providers, representatives 
     of long-term care employees, consumer advocates, and 
     appropriate Federal and State officials.

       ``(ii) Disqualifying information.--The term `disqualifying 
     information' means information about a conviction for a 
     relevant crime or a finding of patient or resident abuse.
       ``(iii) Finding of patient or resident abuse.--The term 
     `finding of patient or resident abuse' means any 
     substantiated finding

[[Page 16773]]

      by a State agency under subsection (g)(1)(C) or a Federal 
     agency that a skilled nursing facility worker has committed--

       ``(I) an act of patient or resident abuse or neglect or a 
     misappropriation of patient or resident property; or
       ``(II) such other types of acts as the Secretary may 
     specify in regulations.

       ``(iv) Skilled nursing facility worker.--The term `skilled 
     nursing facility worker' means any individual (other than a 
     volunteer) that has access to a patient of a skilled nursing 
     facility under an employment or other contract, or both, with 
     such facility. Such term includes individuals who are 
     licensed or certified by the State to provide such services, 
     and nonlicensed individuals providing such services, as 
     defined by the Secretary, including nurse assistants, nurse 
     aides, home health aides, and personal care workers and 
     attendants.''.
       (B) Medicaid program.--Section 1919(b) (42 U.S.C. 1396r(b)) 
     is amended by adding at the end the following new paragraph:
       ``(8) Screening of nursing facility workers.--
       ``(A) Background checks on provisional employees.--Subject 
     to subparagraph (B)(ii), after a nursing facility selects an 
     individual for a position as a nursing facility worker, the 
     facility, prior to employing such worker in a status other 
     than a provisional status to the extent permitted under 
     subparagraph (B)(ii), shall--
       ``(i) give the worker written notice that the facility is 
     required to perform background checks with respect to 
     provisional employees;
       ``(ii) require, as a condition of employment, that such 
     worker--

       ``(I) provide a written statement disclosing any conviction 
     for a relevant crime or finding of patient or resident abuse;
       ``(II) provide a statement signed by the worker authorizing 
     the facility to request the search and exchange of criminal 
     records;
       ``(III) provide in person to the facility a copy of the 
     worker's fingerprints or thumb print, depending upon 
     available technology; and
       ``(IV) provide any other identification information the 
     Secretary may specify in regulation;

       ``(iii) initiate a check of the data collection system 
     established under section 1128E in accordance with 
     regulations promulgated by the Secretary to determine whether 
     such system contains any disqualifying information with 
     respect to such worker; and
       ``(iv) if that system does not contain any such 
     disqualifying information--

       ``(I) request through the appropriate State agency that the 
     State initiate a State and national criminal background check 
     on such worker in accordance with the provisions of 
     subsection (e)(8); and
       ``(II) submit to such State agency the information 
     described in subclauses (II) through (IV) of clause (ii) not 
     more than 7 days (excluding Saturdays, Sundays, and legal 
     public holidays under section 6103(a) of title 5, United 
     States Code) after completion of the check against the system 
     initiated under clause (iii).

       ``(B) Prohibition on hiring of abusive workers.--
       ``(i) In general.--A nursing facility may not knowingly 
     employ any nursing facility worker who has any conviction for 
     a relevant crime or with respect to whom a finding of patient 
     or resident abuse has been made.
       ``(ii) Provisional employment.--After complying with the 
     requirements of clauses (i), (ii), and (iii) of subparagraph 
     (A), a nursing facility may provide for a provisional period 
     of employment for a nursing facility worker pending 
     completion of the check against the data collection system 
     described under subparagraph (A)(iii) and the background 
     check described under subparagraph (A)(iv). Subject to clause 
     (iii), such facility shall maintain direct supervision of the 
     worker during the worker's provisional period of employment.
       ``(iii) Exception for small rural nursing facilities.--

       ``(I) In general.--In the case of a small rural nursing 
     facility (as defined by the Secretary), the Secretary shall 
     provide, by regulation after consultation with providers of 
     nursing facility services and entities representing 
     beneficiaries of such services, for an appropriate level of 
     supervision with respect to any provisional employees 
     employed by the facility in accordance with clause (ii). Such 
     regulation should encourage the provision of direct 
     supervision of such employees whenever practicable with 
     respect to such a facility and if such supervision would not 
     impose an unreasonable cost or other burden on the facility.

       ``(C) Reporting requirements.--A nursing facility shall 
     report to the State any instance in which the facility 
     determines that a nursing facility worker has committed an 
     act of resident neglect or abuse or misappropriation of 
     resident property in the course of employment by the 
     facility.
       ``(D) Use of information.--
       ``(i) In general.--A nursing facility that obtains 
     information about a nursing facility worker pursuant to 
     clauses (iii) and (iv) of subparagraph (A) may use such 
     information only for the purpose of determining the 
     suitability of the worker for employment.
       ``(ii) Immunity from liability.--A nursing facility that, 
     in denying employment for an individual selected for hiring 
     as a nursing facility worker (including during the period 
     described in subparagraph (B)(ii)), reasonably relies upon 
     information about such individual provided by the State 
     pursuant to subsection (e)(6) or section 1128E shall not be 
     liable in any action brought by such individual based on the 
     employment determination resulting from the information.
       ``(iii) Criminal penalty.--Whoever knowingly violates the 
     provisions of clause (i) shall be fined in accordance with 
     title 18, United States Code, imprisoned for not more than 2 
     years, or both.
       ``(E) Civil penalty.--
       ``(i) In general.--A nursing facility that violates the 
     provisions of this paragraph shall be subject to a civil 
     penalty in an amount not to exceed--

       ``(I) for the first such violation, $2,000; and
       ``(II) for the second and each subsequent violation within 
     any 5-year period, $5,000.

       ``(ii) Knowing retention of worker.--In addition to any 
     civil penalty under clause (i), a nursing facility that--

       ``(I) knowingly continues to employ a nursing facility 
     worker in violation of subparagraph (A) or (B); or
       ``(II) knowingly fails to report a nursing facility worker 
     under subparagraph (C),

     shall be subject to a civil penalty in an amount not to 
     exceed $5,000 for the first such violation, and $10,000 for 
     the second and each subsequent violation within any 5-year 
     period.
       ``(F) Definitions.--In this paragraph:
       ``(i) Conviction for a relevant crime.--The term 
     `conviction for a relevant crime' means any Federal or State 
     criminal conviction for--

       ``(I) any offense described in paragraphs (1) through (4) 
     of section 1128(a); and
       ``(II) such other types of offenses as the Secretary may 
     specify in regulations, taking into account the severity and 
     relevance of such offenses, and after consultation with 
     representatives of long-term care providers, representatives 
     of long-term care employees, consumer advocates, and 
     appropriate Federal and State officials.

       ``(ii) Disqualifying information.--The term `disqualifying 
     information' means information about a conviction for a 
     relevant crime or a finding of patient or resident abuse.
       ``(iii) Finding of patient or resident abuse.--The term 
     `finding of patient or resident abuse' means any 
     substantiated finding by a State agency under subsection 
     (g)(1)(C) or a Federal agency that a nursing facility worker 
     has committed--

       ``(I) an act of patient or resident abuse or neglect or a 
     misappropriation of patient or resident property; or
       ``(II) such other types of acts as the Secretary may 
     specify in regulations.

       ``(iv) Nursing facility worker.--The term `nursing facility 
     worker' means any individual (other than a volunteer) that 
     has access to a patient of a nursing facility under an 
     employment or other contract, or both, with such facility. 
     Such term includes individuals who are licensed or certified 
     by the State to provide such services, and nonlicensed 
     individuals providing such services, as defined by the 
     Secretary, including nurse assistants, nurse aides, home 
     health aides, and personal care workers and attendants.''.
       (2) Federal responsibilities.--
       (A) Development of standard federal and state background 
     check form.--The Secretary of Health and Human Services, in 
     consultation with the Attorney General and representatives of 
     appropriate State agencies, shall develop a model form that a 
     provisional employee at a nursing facility may complete and 
     Federal and State agencies may use to conduct the criminal 
     background checks required under sections 1819(b)(8) and 
     1919(b)(8) of the Social Security Act (42 U.S.C. 1395i-3(b), 
     1396r(b)) (as added by this section).
       (B) Periodic evaluation.--The Secretary of Health and Human 
     Services, in consultation with the Attorney General, 
     periodically shall evaluate the background check system 
     imposed under sections 1819(b)(8) and 1919(b)(8) of the 
     Social Security Act (42 U.S.C. 1395i-3(b), 1396r(b)) (as 
     added by this section) and shall implement changes, as 
     necessary, based on available technology, to make the 
     background check system more efficient and able to provide a 
     more immediate response to long-term care providers using the 
     system.
       (3) No preemption of stricter state laws.--Nothing in 
     section 1819(b)(8) or 1919(b)(8) of the Social Security Act 
     (42 U.S.C. 1395i-3(b)(8), 1396r(b)(8)) (as so added) shall be 
     construed to supersede any provision of State law that--
       (A) specifies a relevant crime for purposes of prohibiting 
     the employment of an individual at a long-term care facility 
     (as defined in section 1128E(g)(6) of the Social Security Act 
     (as added by subsection (e)) that is not included in the list 
     of such crimes specified in such sections or in regulations 
     promulgated by the Secretary of Health and Human Services to 
     carry out such sections; or
       (B) requires a long-term care facility (as so defined) to 
     conduct a background check prior to employing an individual 
     in an employment position that is not included in the

[[Page 16774]]

     positions for which a background check is required under such 
     sections.
       (4) Technical amendments.--Effective as if included in the 
     enactment of section 941 of BIPA (114 Stat. 2763A-585), 
     sections 1819(b) and 1919(b) (42 U.S.C. 1395i-3(b), 
     1396r(b)), as amended by such section 941 are each amended by 
     redesignating the paragraph (8) added by such section as 
     paragraph (9).
       (b) Federal and State Requirements Concerning Background 
     Checks.--
       (1) Medicare.--Section 1819(e) (42 U.S.C. 1395i-3(e)) is 
     amended by adding at the end the following:
       ``(6) Federal and state requirements concerning criminal 
     background checks on skilled nursing facility employees.--
       ``(A) In general.--Upon receipt of a request by a skilled 
     nursing facility pursuant to subsection (b)(8) that is 
     accompanied by the information described in subclauses (II) 
     through (IV) of subsection (b)(8)(A)(ii), a State, after 
     checking appropriate State records and finding no 
     disqualifying information (as defined in subsection 
     (b)(8)(F)(ii)), shall immediately submit such request and 
     information to the Attorney General and shall request the 
     Attorney General to conduct a search and exchange of records 
     with respect to the individual as described in subparagraph 
     (B).
       ``(B) Search and exchange of records by attorney general.--
     Upon receipt of a submission pursuant to subparagraph (A), 
     the Attorney General shall direct a search of the records of 
     the Federal Bureau of Investigation for any criminal history 
     records corresponding to the fingerprints and other positive 
     identification information submitted. The Attorney General 
     shall provide any corresponding information resulting from 
     the search to the State.
       ``(C) State reporting of information to skilled nursing 
     facility.--Upon receipt of the information provided by the 
     Attorney General pursuant to subparagraph (B), the State 
     shall--
       ``(i) review the information to determine whether the 
     individual has any conviction for a relevant crime (as 
     defined in subsection (b)(8)(F)(i));
       ``(ii) immediately report to the skilled nursing facility 
     in writing the results of such review; and
       ``(iii) in the case of an individual with a conviction for 
     a relevant crime, report the existence of such conviction of 
     such individual to the database established under section 
     1128E.

       ``(D) Fees for performance of criminal background checks.--
       ``(i) Authority to charge fees.--

       ``(I) Attorney general.--The Attorney General may charge a 
     fee to any State requesting a search and exchange of records 
     pursuant to this paragraph and subsection (b)(8) for 
     conducting the search and providing the records. The amount 
     of such fee shall not exceed the lesser of the actual cost of 
     such activities or $50. Such fees shall be available to the 
     Attorney General, or, in the Attorney General's discretion, 
     to the Federal Bureau of Investigation until expended.

       ``(II) State.--A State may charge a skilled nursing 
     facility a fee for initiating the criminal background check 
     under this paragraph and subsection (b)(8), including fees 
     charged by the Attorney General, and for performing the 
     review and report required by subparagraph (C). The amount of 
     such fee shall not exceed the actual cost of such activities.

       ``(ii) Prohibition on charging.--An entity may not impose 
     on a provisional employee or an employee any charges relating 
     to the performance of a background check under this 
     paragraph.

       ``(E) Regulations.--
       ``(i) In general.--In addition to the Secretary's authority 
     to promulgate regulations under this title, the Attorney 
     General, in consultation with the Secretary, may promulgate 
     such regulations as are necessary to carry out the Attorney 
     General's responsibilities under this paragraph and 
     subsection (b)(9), including regulations regarding the 
     security confidentiality, accuracy, use, destruction, and 
     dissemination of information, audits and recordkeeping, and 
     the imposition of fees.
       ``(ii) Appeal procedures.--The Attorney General, in 
     consultation with the Secretary, shall promulgate such 
     regulations as are necessary to establish procedures by which 
     a provisional employee or an employee may appeal or dispute 
     the accuracy of the information obtained in a background 
     check conducted under this paragraph. Appeals shall be 
     limited to instances in which a provisional employee or an 
     employee is incorrectly identified as the subject of the 
     background check, or when information about the provisional 
     employee or employee has not been updated to reflect changes 
     in the provisional employee's or employee's criminal record.

       ``(F) Report.--Not later than 2 years after the date of 
     enactment of this paragraph, the Attorney General shall 
     submit a report to Congress on--

       ``(i) the number of requests for searches and exchanges of 
     records made under this section;

       ``(ii) the disposition of such requests; and

       ``(iii) the cost of responding to such requests.''.
       (2) Medicaid.--Section 1919(e) (42 U.S.C. 1396r(e)) is 
     amended by adding at the end the following:
       ``(8) Federal and state requirements concerning criminal 
     background checks on nursing facility employees.--
       ``(A) In general.--Upon receipt of a request by a nursing 
     facility pursuant to subsection (b)(8) that is accompanied by 
     the information described in subclauses (II) through (IV) of 
     subsection (b)(8)(A)(ii), a State, after checking appropriate 
     State records and finding no disqualifying information (as 
     defined in subsection (b)(8)(F)(ii)), shall immediately 
     submit such request and information to the Attorney General 
     and shall request the Attorney General to conduct a search 
     and exchange of records with respect to the individual as 
     described in subparagraph (B).
       ``(B) Search and exchange of records by attorney general.--
     Upon receipt of a submission pursuant to subparagraph (A), 
     the Attorney General shall direct a search of the records of 
     the Federal Bureau of Investigation for any criminal history 
     records corresponding to the fingerprints and other positive 
     identification information submitted. The Attorney General 
     shall provide any corresponding information resulting from 
     the search to the State.
       ``(C) State reporting of information to nursing facility.--
     Upon receipt of the information provided by the Attorney 
     General pursuant to subparagraph (B), the State shall--
       ``(i) review the information to determine whether the 
     individual has any conviction for a relevant crime (as 
     defined in subsection (b)(8)(F)(i));
       ``(ii) immediately report to the nursing facility in 
     writing the results of such review; and
       ``(iii) in the case of an individual with a conviction for 
     a relevant crime, report the existence of such conviction of 
     such individual to the database established under section 
     1128E.
       ``(D) Fees for performance of criminal background checks.--
       ``(i) Authority to charge fees.--

       ``(I) Attorney general.--The Attorney General may charge a 
     fee to any State requesting a search and exchange of records 
     pursuant to this paragraph and subsection (b)(8) for 
     conducting the search and providing the records. The amount 
     of such fee shall not exceed the lesser of the actual cost of 
     such activities or $50. Such fees shall be available to the 
     Attorney General, or, in the Attorney General's discretion, 
     to the Federal Bureau of Investigation, until expended.
       ``(II) State.--A State may charge a nursing facility a fee 
     for initiating the criminal background check under this 
     paragraph and subsection (b)(8), including fees charged by 
     the Attorney General, and for performing the review and 
     report required by subparagraph (C). The amount of such fee 
     shall not exceed the actual cost of such activities.

       ``(ii) Prohibition on charging.--An entity may not impose 
     on a provisional employee or an employee any charges relating 
     to the performance of a background check under this 
     paragraph.
       ``(E) Regulations.--
       ``(i) In general.--In addition to the Secretary's authority 
     to promulgate regulations under this title, the Attorney 
     General, in consultation with the Secretary, may promulgate 
     such regulations as are necessary to carry out the Attorney 
     General's responsibilities under this paragraph and 
     subsection (b)(8), including regulations regarding the 
     security, confidentiality, accuracy, use, destruction, and 
     dissemination of information, audits and recordkeeping, and 
     the imposition of fees.
       ``(ii) Appeal procedures.--The Attorney General, in 
     consultation with the Secretary, shall promulgate such 
     regulations as are necessary to establish procedures by which 
     a provisional employee or an employee may appeal or dispute 
     the accuracy of the information obtained in a background 
     check conducted under this paragraph. Appeals shall be 
     limited to instances in which a provisional employee or an 
     employee is incorrectly identified as the subject of the 
     background check, or when information about the provisional 
     employee or employee has not been updated to reflect changes 
     in the provisional employee's or employee's criminal record.
       ``(F) Report.--Not later than 2 years after the date of 
     enactment of this paragraph, the Attorney General shall 
     submit a report to Congress on--
       ``(i) the number of requests for searches and exchanges of 
     records made under this section;
       ``(ii) the disposition of such requests; and
       ``(iii) the cost of responding to such requests.''.
       (c) Application to Other Entities Providing Home Health or 
     Long-Term Care Services.--
       (1) Medicare.--Part D of title XVIII (42 U.S.C. 1395x et 
     seq.) is amended by adding at the end the following:

[[Page 16775]]




 ``APPLICATION OF SKILLED NURSING FACILITY PREVENTIVE ABUSE PROVISIONS 
 TO ANY PROVIDER OF SERVICES OR OTHER ENTITY PROVIDING HOME HEALTH OR 
                        LONG-TERM CARE SERVICES

       ``Sec. 1897. (a) In General.--The requirements of 
     subsections (b)(8) and (e)(6) of section 1819 shall apply to 
     any provider of services or any other entity that is eligible 
     to be paid under this title for providing home health 
     services, hospice care (including routine home care and other 
     services included in hospice care under this title), or long-
     term care services to an individual entitled to benefits 
     under part A or enrolled under part B, including an 
     individual provided with a Medicare+Choice plan offered by a 
     Medicare+Choice organization under part C (in this section 
     referred to as a `medicare beneficiary').
       ``(b) Supervision of Provisional Employees.--
       ``(1) In general.--With respect to an entity that provides 
     home health services, such entity shall be considered to have 
     satisfied the requirements of section 1819(b)(8)(B)(ii) or 
     1919(b)(8)(B)(ii) if the entity meets such requirements for 
     supervision of provisional employees of the entity as the 
     Secretary shall, by regulation, specify in accordance with 
     paragraph (2).
       ``(2) Requirements.--The regulations required under 
     paragraph (1) shall provide the following:
       ``(A) Supervision of a provisional employee shall consist 
     of ongoing, good faith, verifiable efforts by the supervisor 
     of the provisional employee to conduct monitoring and 
     oversight activities to ensure the safety of a medicare 
     beneficiary.
       ``(B) For purposes of subparagraph (A), monitoring and 
     oversight activities may include (but are not limited to) the 
     following:
       ``(i) Follow-up telephone calls to the medicare 
     beneficiary.
       ``(ii) Unannounced visits to the medicare beneficiary's 
     home while the provisional employee is serving the medicare 
     beneficiary.
       ``(iii) To the extent practicable, limiting the provisional 
     employee's duties to serving only those medicare 
     beneficiaries in a home or setting where another family 
     member or resident of the home or setting of the medicare 
     beneficiary is present.
       ``(C) In promulgating such regulations, the Secretary shall 
     take into account the staffing and geographic issues faced by 
     small rural entities (as defined by the Secretary) that 
     provide home health services, hospice care (including routine 
     home care and other services included in hospice care under 
     this title), or other long-term care services. Such 
     regulations should encourage the provision of monitoring and 
     oversight activities whenever practicable with respect to 
     such an entity, and if such activities would not impose an 
     unreasonable cost or other burden on the entity.''.
       (2) Medicaid.--Section 1902(a) (42 U.S.C. 1396a), as 
     amended by section 104(a), is amended--
       (A) in paragraph (65), by striking ``and'' at the end;
       (B) in paragraph (66), by striking the period and inserting 
     ``; and''; and
       (C) by inserting after paragraph (66) the following:
       ``(67) provide that any entity that is eligible to be paid 
     under the State plan for providing home health services, 
     hospice care (including routine home care and other services 
     included in hospice care under title XVIII), or long-term 
     care services for which medical assistance is available under 
     the State plan to individuals requiring long-term care 
     complies with the requirements of subsections (b)(8) and 
     (e)(8) of section 1919 and section 1897(b) (in the same 
     manner as such section applies to a medicare beneficiary).''.
       (3) Expansion of State Nurse Aide Registry.--
       (A) Medicare.--Section 1819 (42 U.S.C. 1395i-3) is 
     amended--
       (i) in subsection (e)(2)--

       (I) in the paragraph heading, by striking ``Nurse aide 
     registry'' and inserting ``Employee registry'';
       (II) in subparagraph (A)--

       (aa) by striking ``By not later than January 1, 1989, the'' 
     and inserting ``The'';
       (bb) by striking ``a registry of all individuals'' and 
     inserting ``a registry of (i) all individuals''; and
       (cc) by inserting before the period the following: ``, (ii) 
     all other skilled nursing facility employees with respect to 
     whom the State has made a finding described in subparagraph 
     (B), and (iii) any employee of any provider of services or 
     any other entity that is eligible to be paid under this title 
     for providing home health services, hospice care (including 
     routine home care and other services included in hospice care 
     under this title), or long-term care services and with 
     respect to whom the entity has reported to the State a 
     finding of patient neglect or abuse or a misappropriation of 
     patient property''; and

       (III) in subparagraph (C), by striking ``a nurse aide'' and 
     inserting ``an individual''; and

       (ii) in subsection (g)(1)--

       (I) by striking the first sentence of subparagraph (C) and 
     inserting the following: ``The State shall provide, through 
     the agency responsible for surveys and certification of 
     skilled nursing facilities under this subsection, for a 
     process for the receipt and timely review and investigation 
     of allegations of neglect and abuse and misappropriation of 
     resident property by a nurse aide or a skilled nursing 
     facility employee of a resident in a skilled nursing 
     facility, by another individual used by the facility in 
     providing services to such a resident, or by an individual 
     described in subsection (e)(2)(A)(iii).''; and
       (II) in the fourth sentence of subparagraph (C), by 
     inserting ``or described in subsection (e)(2)(A)(iii)'' after 
     ``used by the facility''; and
       (III) in subparagraph (D)--

       (aa) in the subparagraph heading, by striking ``nurse 
     aide''; and
       (bb) in clause (i), in the matter preceding subclause (I), 
     by striking ``a nurse aide'' and inserting ``an individual''; 
     and
       (cc) in clause (i)(I), by striking ``nurse aide'' and 
     inserting ``individual''.
       (B) Medicaid.--Section 1919 (42 U.S.C. 1396r) is amended--
       (i) in subsection (e)(2)--

       (I) in the paragraph heading, by striking ``Nurse aide 
     registry'' and inserting ``Employee registry'';
       (II) in subparagraph (A)--

       (aa) by striking ``By not later than January 1, 1989, the'' 
     and inserting ``The'';
       (bb) by striking ``a registry of all individuals'' and 
     inserting ``a registry of (i) all individuals''; and
       (cc) by inserting before the period the following: ``, (ii) 
     all other nursing facility employees with respect to whom the 
     State has made a finding described in subparagraph (B), and 
     (iii) any employee of an entity that is eligible to be paid 
     under the State plan for providing home health services, 
     hospice care (including routine home care and other services 
     included in hospice care under title XVIII), or long-term 
     care services and with respect to whom the entity has 
     reported to the State a finding of patient neglect or abuse 
     or a misappropriation of patient property''; and

       (III) in subparagraph (C), by striking ``a nurse aide'' and 
     inserting ``an individual''; and

       (ii) in subsection (g)(1)--

       (I) by striking the first sentence of subparagraph (C) and 
     inserting the following: ``The State shall provide, through 
     the agency responsible for surveys and certification of 
     nursing facilities under this subsection, for a process for 
     the receipt and timely review and investigation of 
     allegations of neglect and abuse and misappropriation of 
     resident property by a nurse aide or a nursing facility 
     employee of a resident in a nursing facility, by another 
     individual used by the facility in providing services to such 
     a resident, or by an individual described in subsection 
     (e)(2)(A)(iii).''; and
       (II) in the fourth sentence of subparagraph (C), by 
     inserting ``or described in subsection (e)(2)(A)(iii)'' after 
     ``used by the facility''; and
       (III) in subparagraph (D)--

       (aa) in the subparagraph heading, by striking ``nurse 
     aide''; and
       (bb) in clause (i), in the matter preceding subclause (I), 
     by striking ``a nurse aide'' and inserting ``an individual''; 
     and
       (cc) in clause (i)(I), by striking ``nurse aide'' and 
     inserting ``individual''.
       (d) Reimbursement of Costs for Background Checks.--The 
     Secretary of Health and Human Services shall reimburse 
     nursing facilities, skilled nursing facilities, and other 
     entities for costs incurred by the facilities and entities in 
     order to comply with the requirements imposed under sections 
     1819(b)(8) and 1919(b)(8) of such Act (42 U.S.C. 1395i-
     3(b)(8), 1396r(b)(8)), as added by this section.
       (e) Inclusion of Abusive Acts Within a Long-Term Care 
     Facility or Provider in the National Health Care Fraud and 
     Abuse Data Collection Program.--
       (1) In general.--Section 1128E(g)(1)(A) (42 U.S.C. 1320a-
     7e(g)(1)(A)) is amended--
       (A) by redesignating clause (v) as clause (vi); and
       (B) by inserting after clause (iv), the following:
       ``(v) A finding of abuse or neglect of a patient or a 
     resident of a long-term care facility, or misappropriation of 
     such a patient's or resident's property.''.
       (2) Coverage of long-term care facility or provider 
     employees.--Section 1128E(g)(2) (42 U.S.C. 1320a-7e(g)(2)) is 
     amended by inserting ``, and includes any individual of a 
     long-term care facility or provider (other than any 
     volunteer) that has access to a patient or resident of such a 
     facility under an employment or other contract, or both, with 
     the facility or provider (including individuals who are 
     licensed or certified by the State to provide services at the 
     facility or through the provider, and nonlicensed 
     individuals, as defined by the Secretary, providing services 
     at the facility or through the provider, including nurse 
     assistants, nurse aides, home health aides, individuals who 
     provide home care, and personal care workers and 
     attendants)'' before the period.
       (3) Reporting by long-Term care facilities or providers.--
       (A) In general.--Section 1128E(b)(1) (42 U.S.C. 1320a-
     7e(b)(1)) is amended by striking ``and health plan'' and 
     inserting ``, health

[[Page 16776]]

     plan, and long-term care facility or provider''.
       (B) Correction of information.--Section 1128E(c)(2) (42 
     U.S.C. 1320a-7e(c)(2)) is amended by striking ``and health 
     plan'' and inserting ``, health plan, and long-term care 
     facility or provider''.
       (4) Access to reported information.--Section 1128E(d)(1) 
     (42 U.S.C. 1320a-7e(d)(1)) is amended by striking ``and 
     health plans'' and inserting ``, health plans, and long-term 
     care facilities or providers''.
       (5) Mandatory check of database by long-term care 
     facilities or providers.--Section 1128E(d) (42 U.S.C. 1320a-
     7e(d)) is amended by adding at the end the following:
       ``(3) Mandatory check of database by long-term care 
     facilities or providers.--A long-term care facility or 
     provider shall check the database maintained under this 
     section prior to hiring under an employment or other 
     contract, or both, (other than in a provisional status) any 
     individual as an employee of such a facility or provider who 
     will have access to a patient or resident of the facility or 
     provider (including individuals who are licensed or certified 
     by the State to provide services at the facility or through 
     the provider, and nonlicensed individuals, as defined by the 
     Secretary, that will provide services at the facility or 
     through the provider, including nurse assistants, nurse 
     aides, home health aides, individuals who provide home care, 
     and personal care workers and attendants).''.
       (6) Definition of long-term care facility or provider.--
     Section 1128E(g) (42 U.S.C. 1320a-7e(g)) is amended by adding 
     at the end the following:
       ``(6) Long-term care facility or provider.--The term `long-
     term care facility or provider' means a skilled nursing 
     facility (as defined in section 1819(a)), a nursing facility 
     (as defined in section 1919(a)), a home health agency, a 
     provider of hospice care (as defined in section 1861(dd)(1)), 
     a long-term care hospital (as described in section 
     1886(d)(1)(B)(iv)), an intermediate care facility for the 
     mentally retarded (as defined in section 1905(d)), or any 
     other facility or entity that provides, or is a provider of, 
     long-term care services, home health services, or hospice 
     care (including routine home care and other services included 
     in hospice care under title XVIII), and receives payment for 
     such services under the medicare program under title XVIII or 
     the medicaid program under title XIX.''.
       (7) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out the amendments made by this 
     subsection, $10,200,000 for fiscal year 2004.
       (f) Prevention and Training Demonstration Project.--
       (1) Establishment.--The Secretary of Health and Human 
     Services shall establish a demonstration program to provide 
     grants to develop information on best practices in patient 
     abuse prevention training (including behavior training and 
     interventions) for managers and staff of hospital and health 
     care facilities.
       (2) Eligibility.--To be eligible to receive a grant under 
     paragraph (1), an entity shall be a public or private 
     nonprofit entity and prepare and submit to the Secretary of 
     Health and Human Services an application at such time, in 
     such manner, and containing such information as the Secretary 
     may require.
       (3) Use of funds.--Amounts received under a grant under 
     this subsection shall be used to--
       (A) examine ways to improve collaboration between State 
     health care survey and provider certification agencies, long-
     term care ombudsman programs, the long-term care industry, 
     and local community members;
       (B) examine patient care issues relating to regulatory 
     oversight, community involvement, and facility staffing and 
     management with a focus on staff training, staff stress 
     management, and staff supervision;
       (C) examine the use of patient abuse prevention training 
     programs by long-term care entities, including the training 
     program developed by the National Association of Attorneys 
     General, and the extent to which such programs are used; and
       (D) identify and disseminate best practices for preventing 
     and reducing patient abuse.
       (4) Authorization of appropriations.--There is authorized 
     to be appropriated such sums as may be necessary to carry out 
     this subsection.
       (g) Effective Date.--
       (1) In general.--With respect to a skilled nursing facility 
     (as defined in section 1819(a) of the Social Security Act (42 
     U.S.C. 1395i-3(a)) or a nursing facility (as defined in 
     section 1919(a) of the Social Security Act (42 U.S.C. 
     1396r(a)), this section and the amendments made by this 
     section shall take effect on the date that is the earlier 
     of--
       (A) 6 months after the effective date of final regulations 
     promulgated to carry out this section and such amendments; or
       (B) January 1, 2006.
       (2) Long-term care facilities and providers.--With respect 
     to a long-term care facility or provider (as defined in 
     section 1128E(g)(6) of the Social Security Act (42 U.S.C. 
     1320a-7e(g)(6)) (as added by subsection (e)), this section 
     and the amendments made by this section shall take effect on 
     the date that is the earlier of--
       (A) 18 months after the effective date of final regulations 
     promulgated to carry out this section and such amendments; or
       (B) January 1, 2007.
                                 ______
                                 
  SA 1105. Mr. HATCH submitted an amendment intended to be proposed by 
him to the bill S. 1, to amend title XVIII of the Social Security Act 
to provide for a voluntary prescription drug benefit under the Medicare 
program and to strengthen and improve the Medicare program, and for 
other purposes; which was ordered to lie on the table; as follows:

       On page 486, line 3, insert ``and'' after the semicolon at 
     the end.
       On page 486, line 4, insert ``(I)'' after ``(ii)''.
       On page 486, line 8, strike ``and'' and insert ``or''.
       On page 486, line 9, strike ``(iii)'' and insert ``(II)''.
                                 ______
                                 
  SA 1106. Mr. HATCH (for himself and Mr. Wyden) submitted an amendment 
intended to be proposed by him to the bill S. 1, to amend title XVIII 
of the Social Security Act to provide for a voluntary prescription drug 
benefit under the Medicare program and to strengthen and improve the 
Medicare program, and for other purposes; as follows:

       At the end of title VI, insert the following:

     SEC. __. HEALTH CARE THAT WORKS FOR ALL AMERICANS-CITIZENS 
                   HEALTH CARE WORKING GROUP.

       (a) Findings.--Congress finds the following:
       (1) In order to improve the health care system, the 
     American public must engage in an informed national public 
     debate to make choices about the services they want covered, 
     what health care coverage they want, and how they are willing 
     to pay for coverage.
       (2) More than a trillion dollars annually is spent on the 
     health care system, yet--
       (A) 41,000,000 Americans are uninsured;
       (B) insured individuals do not always have access to 
     essential, effective services to improve and maintain their 
     health; and
       (C) employers, who cover over 170,000,000 Americans, find 
     providing coverage increasingly difficult because of rising 
     costs and double digit premium increases.
       (3) Despite increases in medical care spending that are 
     greater than the rate of inflation, population growth, and 
     Gross Domestic Product growth, there has not been a 
     commensurate improvement in our health status as a nation.
       (4) Health care costs for even just 1 member of a family 
     can be catastrophic, resulting in medical bills potentially 
     harming the economic stability of the entire family.
       (5) Common life occurrences can jeopardize the ability of a 
     family to retain private coverage or jeopardize access to 
     public coverage.
       (6) Innovations in health care access, coverage, and 
     quality of care, including the use of technology, have often 
     come from States, local communities, and private sector 
     organizations, but more creative policies could tap this 
     potential.
       (7) Despite our Nation's wealth, the health care system 
     does not provide coverage to all Americans who want it.
       (b) Purposes.--The purposes of this Act are--
       (1) to provide for a nationwide public debate about 
     improving the health care system to provide every American 
     with the ability to obtain quality, affordable health care 
     coverage; and
       (2) to provide for a vote by Congress on the 
     recommendations that result from the debate.
       (c) Establishment.--The Secretary, acting through the 
     Agency for Healthcare Research and Quality, shall establish 
     an entity to be known as the Citizens' Health Care Working 
     Group (referred to in this Act as the ``Working Group'').
       (d) Appointment.--Not later than 45 days after the date of 
     enactment of this Act, the Speaker and Minority Leader of the 
     House of Representatives and the Majority Leader and Minority 
     Leader of the Senate (in this section referred to as the 
     ``leadership'') shall each appoint individuals to serve as 
     members of the Working Group in accordance with subsections 
     (e), (f), and (g).
       (e) Membership Criteria.--
       (1) Appointed members.--
       (A) Separate appointments.--The Speaker of the House of 
     Representatives jointly with the Minority Leader of the House 
     of Representatives, and the Majority Leader of the Senate 
     jointly with the Minority Leader of the Senate, shall each 
     appoint 1 member of the Working Group described in 
     subparagraphs (A), (G), (J), (K), and (M) of paragraph (2).
       (B) Joint appointments.--Members of the Working Group 
     described in subparagraphs (B), (C), (D), (E), (F), (I), and 
     (N) of paragraph (2) shall be appointed jointly by the 
     leadership.
       (C) Combined appointments.--Members of the Working Group 
     described in subparagraphs (H) and (L) shall be appointed in 
     the following manner:
       (i) One member of the Working Group in each of such 
     subparagraphs shall be appointed jointly by the leadership.

[[Page 16777]]

       (ii) The remaining appointments of the members in each of 
     such subparagraphs shall be divided equally such that the 
     Speaker of the House of Representatives jointly with the 
     Minority Leader of the House of Representatives, and the 
     Majority Leader of the Senate jointly with the Minority 
     Leader of the Senate each appoint an equal number of members.
       (2) Categories of appointed members.--Members of the 
     Working Group shall be appointed as follows:
       (A) 2 members shall be patients or family members of 
     patients who, at least 1 year prior to the date of enactment 
     of this Act, have had no health insurance.
       (B) 1 member shall be a representative of children.
       (C) 1 member shall be a representative of the mentally ill.
       (D) 1 member shall be a representative of the disabled.
       (E) 1 member shall be over the age of 65 and a beneficiary 
     under the medicare program established under title XVIII of 
     the Social Security Act (42 U.S.C. 1395 et seq.).
       (F) 1 member shall be a recipient of benefits under the 
     medicaid program under title XIX of the Social Security Act 
     (42 U.S.C. 1396 et seq.).
       (G) 2 members shall be State health officials.
       (H) 3 members shall be employers, including--
       (i) 1 large employer (an employer who employed 50 or more 
     employees on business days during the preceding calendar year 
     and who employed at least 50 employees on the first of the 
     year);
       (ii) 1 small employer (an employer who employed an average 
     of at least 2 employees but less than 50 employees on 
     business days in the preceding calendar year and who employs 
     at least 2 employees on the first of the year); and
       (iii) 1 multi-state employer.
       (I) 1 member shall be a representative of labor.
       (J) 2 members shall be health insurance issuers.
       (K) 2 members shall be health care providers.
       (L) 5 members shall be appointed as follows:
       (i) 1 economist.
       (ii) 1 academician.
       (iii) 1 health policy researcher.
       (iv) 1 individual with expertise in pharmacoeconomics.
       (v) 1 health technology expert.
       (M) 2 members shall be representatives of community leaders 
     who have developed State or local community solutions to the 
     problems addressed by the Working Group.
       (N) 1 member shall be a representative of a medical school.
       (3) Secretary.--The Secretary, or the designee of the 
     Secretary, shall be a member of the Working Group.
       (f) Prohibited Appointments.--Members of the Working Group 
     shall not include members of Congress or other elected 
     government officials (Federal, State, or local) other than 
     those individuals specified in subsection (e). To the extent 
     possible, individuals appointed to the Working Group shall 
     have used the health care system within the previous 2 years 
     and shall not be paid employees or representatives of 
     associations or advocacy organizations involved in the health 
     care system.
       (g) Appointment Criteria.--
       (1) House of representatives.--The Speaker and Minority 
     Leader of the House of Representatives shall make the 
     appointments described in subsection (d) in consultation with 
     the chairperson and ranking member of the following 
     committees of the House of Representatives:
       (A) The Committee on Ways and Means.
       (B) The Committee on Energy and Commerce.
       (C) The Committee on Education and the Workforce.
       (2) Senate.--The Majority Leader and Minority Leader of the 
     Senate shall make the appointments described in subsection 
     (d) in consultation with the chairperson and ranking member 
     of the following committees of the Senate:
       (A) The Committee on Finance.
       (B) The Committee on Health, Education, Labor, and 
     Pensions.
       (h) Period of Appointment.--Members of the Working Group 
     shall be appointed for a term of 2 years. Such term is 
     renewable and any vacancies shall not affect the power and 
     duties of the Working Group but shall be filled in the same 
     manner as the original appointment.
       (i) Appointment of the Chairperson.--Not later than 15 days 
     after the date on which all members of the Working Group have 
     been appointed under subsection (d), the leadership shall 
     make a joint designation of the chairperson of the Working 
     Group. If the leadership fails to make such designation 
     within such time period, the Working Group Members shall, not 
     later than 10 days after the end of such time period, 
     designate a chairperson by majority vote.
       (j) Subcommittees.--The Working Group may establish 
     subcommittees if doing so increases the efficiency of the 
     Working Group in completing its tasks.
       (k) Duties.--
       (1) Hearings.--Not later than 90 days after the date of 
     appointment of the chairperson under subsection (i), the 
     Working Group shall hold hearings to examine--
       (A) the capacity of the public and private health care 
     systems to expand coverage options;
       (B) the cost of health care and the effectiveness of care 
     provided at all stages of disease;
       (C) innovative State strategies used to expand health care 
     coverage and lower health care costs;
       (D) local community solutions to accessing health care 
     coverage;
       (E) efforts to enroll individuals currently eligible for 
     public or private health care coverage;
       (F) the role of evidence-based medical practices that can 
     be documented as restoring, maintaining, or improving a 
     patient's health, and the use of technology in supporting 
     providers in improving quality of care and lowering costs; 
     and
       (G) strategies to assist purchasers of health care, 
     including consumers, to become more aware of the impact of 
     costs, and to lower the costs of health care.
       (2) Additional hearings.--The Working Group may hold 
     additional hearings on subjects other than those listed in 
     paragraph (1) so long as such hearings are determined to be 
     necessary by the Working Group in carrying out the purposes 
     of this Act. Such additional hearings do not have to be 
     completed within the time period specified in paragraph (1) 
     but shall not delay the other activities of the Working Group 
     under this section.
       (3) The health report to the american people.--Not later 
     than 90 days after the hearings described in paragraphs (1) 
     and (2) are completed, the Working Group shall prepare and 
     make available to health care consumers through the Internet 
     and other appropriate public channels, a report to be 
     entitled, ``The Health Report to the American People''. Such 
     report shall be understandable to the general public and 
     include--
       (A) a summary of--
       (i) health care and related services that may be used by 
     individuals throughout their life span;
       (ii) the cost of health care services and their medical 
     effectiveness in providing better quality of care for 
     different age groups;
       (iii) the source of coverage and payment, including 
     reimbursement, for health care services;
       (iv) the reasons people are uninsured or underinsured and 
     the cost to taxpayers, purchasers of health services, and 
     communities when Americans are uninsured or underinsured;
       (v) the impact on health care outcomes and costs when 
     individuals are treated in all stages of disease;
       (vi) health care cost containment strategies; and
       (vii) information on health care needs that need to be 
     addressed;
       (B) examples of community strategies to provide health care 
     coverage or access;
       (C) information on geographic-specific issues relating to 
     health care;
       (D) information concerning the cost of care in different 
     settings, including institutional-based care and home and 
     community-based care;
       (E) a summary of ways to finance health care coverage; and
       (F) the role of technology in providing future health care 
     including ways to support the information needs of patients 
     and providers.
       (4) Community meetings.--
       (A) In general.--Not later than 1 year after the date of 
     enactment of this Act, the Working Group shall initiate 
     health care community meetings throughout the United States 
     (in this section referred to as ``community meetings''). Such 
     community meetings may be geographically or regionally based 
     and shall be completed within 180 days after the initiation 
     of the first meeting.
       (B) Number of meetings.--The Working Group shall hold a 
     sufficient number of community meetings in order to receive 
     information that reflects--
       (i) the geographic differences throughout the United 
     States;
       (ii) diverse populations; and
       (iii) a balance among urban and rural populations.
       (C) Meeting requirements.--
       (i) Facilitator.--A State health officer may be the 
     facilitator at the community meetings.
       (ii) Attendance.--At least 1 member of the Working Group 
     shall attend and serve as chair of each community meeting. 
     Other members may participate through interactive technology.
       (iii) Topics.--The community meetings shall, at a minimum, 
     address the following issues:

       (I) The optimum way to balance costs and benefits so that 
     affordable health coverage is available to as many people as 
     possible.
       (II) The identification of services that provide cost-
     effective, essential health care services to maintain and 
     improve health and which should be included in health care 
     coverage.
       (III) The cost of providing increased benefits.

[[Page 16778]]

       (IV) The mechanisms to finance health care coverage, 
     including defining the appropriate financial role for 
     individuals, businesses, and government.

       (iv) Interactive technology.--The Working Group may 
     encourage public participation in community meetings through 
     interactive technology and other means as determined 
     appropriate by the Working Group.
       (D) Interim requirements.--Not later than 180 days after 
     the date of completion of the community meetings, the Working 
     Group shall prepare and make available to the public through 
     the Internet and other appropriate public channels, an 
     interim set of recommendations on health care coverage and 
     ways to improve and strengthen the health care system based 
     on the information and preferences expressed at the community 
     meetings. There shall be a 90-day public comment period on 
     such recommendations.
       (l) Recommendations.--Not later than 120 days after the 
     expiration of the public comment period described in 
     subsection (k)(4)(D), the Working Group shall submit to 
     Congress and the President a final set of recommendations.
       (m) Administration.--
       (1) Executive director.--There shall be an Executive 
     Director of the Working Group who shall be appointed by the 
     chairperson of the Working Group in consultation with the 
     members of the Working Group.
       (2) Compensation.--While serving on the business of the 
     Working Group (including travel time), a member of the 
     Working Group shall be entitled to compensation at the per 
     diem equivalent of the rate provided for level IV of the 
     Executive Schedule under section 5315 of title 5, United 
     States Code, and while so serving away from home and the 
     member's regular place of business, a member may be allowed 
     travel expenses, as authorized by the chairperson of the 
     Working Group. For purposes of pay and employment benefits, 
     rights, and privileges, all personnel of the Working Group 
     shall be treated as if they were employees of the Senate.
       (3) Information from federal agencies.--The Working Group 
     may secure directly from any Federal department or agency 
     such information as the Working Group considers necessary to 
     carry out this Act. Upon request of the Working Group, the 
     head of such department or agency shall furnish such 
     information.
       (4) Postal services.--The Working Group may use the United 
     States mails in the same manner and under the same conditions 
     as other departments and agencies of the Federal Government.
       (n) Detail.--Not more than 10 Federal Government employees 
     employed by the Department of Labor and 10 Federal Government 
     employees employed by the Department of Health and Human 
     Services may be detailed to the Working Group under this 
     section without further reimbursement. Any detail of an 
     employee shall be without interruption or loss of civil 
     service status or privilege.
       (o) Temporary and Intermittent Services.--The chairperson 
     of the Working Group may procure temporary and intermittent 
     services under section 3109(b) of title 5, United States 
     Code, at rates for individuals which do not exceed the daily 
     equivalent of the annual rate of basic pay prescribed for 
     level V of the Executive Schedule under section 5316 of such 
     title.
       (p) Annual Report.--Not later than 1 year after the date of 
     enactment of this Act, and annually thereafter during the 
     existence of the Working Group, the Working Group shall 
     report to Congress and make public a detailed description of 
     the expenditures of the Working Group used to carry out its 
     duties under this section.
       (q) Sunset of Working Group.--The Working Group shall 
     terminate when the report described in subsection (l) is 
     submitted to Congress.
       (r) Administration Review and Comments.--Not later than 45 
     days after receiving the final recommendations of the Working 
     Group under subsection (l), the President shall submit a 
     report to Congress which shall contain--
       (1) additional views and comments on such recommendations; 
     and
       (2) recommendations for such legislation and administrative 
     actions as the President considers appropriate.
       (s) Required Congressional Action.--Not later than 45 days 
     after receiving the report submitted by the President under 
     subsection (r), each committee of jurisdiction of Congress 
     shall hold at least 1 hearing on such report and on the final 
     recommendations of the Working Group submitted under 
     subsection (l).
       (t) Authorization of Appropriations.--
       (1) In General.--There are authorized to be appropriated to 
     carry out this Act, other than subsection (k)(3), $3,000,000 
     for each of fiscal years 2004, 2005, and 2006.
       (2) Health Report to the American People.--There are 
     authorized to be appropriated for the preparation and 
     dissemination of the Health Report to the American People 
     described in subsection (k)(3), such sums as may be necessary 
     for the fiscal year in which the report is required to be 
     submitted.
                                 ______
                                 
  SA 1107. Mr. COCHRAN submitted an amendment intended to be proposed 
by him to the bill S. 1, to amend title XVIII of the Social Security 
Act to provide for a voluntary prescription drug benefit under the 
Medicare program and to strengthen and improve the Medicare program, 
and for other purposes; which was ordered to lie on the table; as 
follows:

       At the end of title VI, add the following:

     SEC. __. AUTHORIZATION OF APPROPRIATIONS TO CONTINUE THE 
                   EXISTING CMS MEDICATION MONITORING SYSTEM.

       There are authorized to be appropriated such sums as are 
     necessary to continue the Prescription Continuity of Care 
     medication monitoring system in cooperation with the CMS 
     Mississippi Quality Improvement Organization, Information 
     Healthcare, and the University of Mississippi.
                                 ______
                                 
  SA 1108. Mr. DURBIN proposed an amendment to the bill S. 1, to amend 
title XVIII of the Social Security Act to provide for a voluntary 
prescription drug benefit under the Medicare program and to strengthen 
and improve the Medicare program, and for other purposes; as follows:

       At the appropriate place, insert the following:

     SEC. __. ADDITIONAL ASSISTANCE FOR CERTAIN ELIGIBLE 
                   BENEFICIARIES UNDER PART D.

       Section 1860D-26, as added by section 101, is amended by 
     adding at the end the following:
       ``(d) Additional Assistance for Certain Eligible 
     Beneficiaries.--
       ``(1) Program.--Subject to paragraph (2), the Administrator 
     shall implement a program (for the period beginning on 
     January 1, 2009, and ending on September 30, 2013) to provide 
     additional assistance to applicable eligible beneficiaries 
     who have reached the initial coverage limit described in 
     section 1860D-6(c)(3) for the year but have not reached the 
     annual out-of-pocket limit under section 1860D-6(c)(4)(A)) 
     for the year in order to reduce the cost-sharing requirement 
     during this coverage gap.
       ``(2) Funding limitation.--The Administrator shall 
     implement the program described in paragraph (1) in such a 
     manner that will result in a decrease of $12,000,000,000 in 
     cost-sharing for covered drugs under part D by applicable 
     eligible beneficiaries during the period described in such 
     paragraph. The Administrator shall take appropriate steps to 
     ensure that the costs of the program during such period do 
     not exceed $12,000,000,000.
       ``(3) Applicable eligible beneficiary.--For purposes of 
     this subsection, the term `applicable eligible beneficiary' 
     means an eligible beneficiary with cardiovascular disease, 
     diabetes and its complications, cancer, or Alzheimer's 
     disease who is enrolled under part D.''.
                                 ______
                                 
  SA 1109. Mr. BURNS (for himself and Ms. Murkowski) submitted an 
amendment intended to be proposed by him to the bill S. 1, to amend 
title XVIII of the Social Security Act to provide for a voluntary 
prescription drug benefit under the Medicare program and to strengthen 
and improve the Medicare program, and for other purposes; which was 
ordered to lie on table; as follows:

       On page 68, between lines 5 and 6, insert the following:
       ``(E) Not be less than 1,000,000 eligible beneficiaries 
     shall reside in each service area.
       On page 354, between lines 19 and 20, insert the following:
       ``(F) Not be less than 1,000,000 MedicareAdvantage eligible 
     individuals shall reside in each region.
                                 ______
                                 
  SA 1110. Mr. BAUCUS (for Mr. Levin) proposed an amendment to the bill 
S. 1, to amend title XVIII of the Social Security Act to provide for a 
voluntary prescription drug benefit under the Medicare program and to 
strengthen and improve the Medicare program, and for other purposes; as 
follows:

       Insert the following in the appropriate place: The 
     Secretary of Health and Human Services shall retain or 
     designate one or more Medicare backup plans so that 
     beneficiaries initially covered by a private insurer under 
     this act who are subsequently covered by a Medicare fallback 
     plan have the option of retaining a Medicare fallback plan or 
     entering private insurance under this act.
                                 ______
                                 
  SA 1111. Mr. BAUCUS (for Mr. Levin (for himself, Ms. Stabenow, and 
Mrs. Clinton)) proposed an amendment to the bill S. 1, to amend title 
XVIII of the Social Security Act to provide for a voluntary 
prescription drug benefit under the Medicare program and to strengthen 
and improve the Medicare program, and for other purposes; as follows:

       Insert the following in the appropriate place: The 
     Secretary of Health and Human Services shall retain or 
     designate one or more Medicare backup plans so that the 37%

[[Page 16779]]

     of current retirees who have prescription drug coverage, 
     estimated by the Congressional Budget Office who will lose 
     their current employer retiree coverage as a result of the 
     enactment of this legislation will have the option to enter 
     either a Medicare backup plan or private insurance under this 
     act.
                                 ______
                                 
  SA 1112. Mr. KERRY submitted an amendment intended to by proposed by 
him to the bill S. 1, to amend title XVIII of the Social Security Act 
to provide for a voluntary prescription drug benefit under the Medicare 
program and to strengthen and improve the Medicare program, and for 
other purposes; which was ordered to lie on the table; as follows:

       After section 404, insert the following:

     SEC. 404A. INCREASE FOR HOSPITALS WITH DISPROPORTIONATE 
                   INDIGENT CARE REVENUES.

       (a) Disproportionate Share Adjustment Percentage.--Section 
     1886(d)(5)(F)(iii) (42 U.S.C. 1395ww(d)(5)(F)(iii)) is 
     amended by striking ``35 percent'' and inserting ``35 percent 
     (or, for discharges occurring on or after October 1, 2003, 40 
     percent)''.
       (b) Capital Costs.--Section 1886(g)(1)(B) (42 U.S.C. 
     1395ww(g)(1)(B)) is amended--
       (1) in clause (iii), by striking ``and'' at the end;
       (2) in clause (iv), by striking the period at the end and 
     inserting ``, and''; and
       (3) by adding at the end the following new clause:
       ``(v) in the case of cost reporting periods beginning on or 
     after October 1, 2003, shall provide for a disproportionate 
     share adjustment in the same manner as section 
     1886(d)(5)(F)(iii).''.
                                 ______
                                 
  SA 1113. Mr. GRASSLEY proposed an amendment to the bill S. 312, to 
amend title XXI of the Social Security Act to extend the availability 
of allotments for fiscal years 1998 through 2001 under the State 
Children's Health Insurance Programs; as follows:

       At the end, add the following:

     SEC. 2. TECHNICAL CORRECTION.

       (a) Temporary Increase of the Medicaid FMAP.--Section 
     401(a)(6)(A) of the Jobs and Growth Tax Relief Reconciliation 
     Act of 2003 (Public Law 108-027) is amended by inserting 
     ``after September 2, 2003,'' after ``(42 U.S.C. 1315))''.
       (b) Retroactive Effective Date.--The amendment made by 
     subsection (a) shall take effect as if included in the 
     enactment of section 401 of the Jobs and Growth Tax Relief 
     Reconciliation Act of 2003 (Public Law 108-027).
                                 ______
                                 
  SA 1114. Mr. KYL submitted an amendment intended to be proposed by 
him to the bill S. 1, to amend title XVIII of the Social Security Act 
to provide for a voluntary prescription drug benefit under the Medicare 
program and to strengthen and improve the Medicare program, and for 
other purposes; as follows:

       At the appropriate place, insert the following:

     SEC. . GAO STUDY OF PHARMACEUTICAL PRICE CONTROLS AND PATENT 
                   PROTECTIONS IN THE G-7 COUNTRIES.

       (a) Study.--The Comptroller General of the United States 
     shall conduct a study of price controls imposed on 
     pharmaceuticals in France, Germany, Italy, Japan, the United 
     Kingdom and Canada to review the impact such regulations have 
     on consumers, including American consumers, and on innovation 
     in medicine. Such study shall include--
       (1) The pharmaceutical price control structure in each 
     country for a wide range of pharmaceuticals, compared with 
     average pharmaceutical prices paid by Americans covered by 
     private sector health insurance;
       (2) The proportion of the cost for innovation borne by 
     American consumers compared with consumers in the other six 
     countries;
       (3) A review of how closely the observed prices in 
     regulated markets correspond to the prices that efficiently 
     distribute common costs of production (``Ramsey prices'');
       (4) A review of any peer-reviewed literature that might 
     show the health consequences to patients in the listed 
     countries that result from the absence or delayed 
     introduction of medicines, including the cost of not having 
     access to medicines, in terms of lower life expectancy and 
     lower quality of health;
       (5) The impact on American consumers, in terms of reduced 
     research into new or improved pharmaceuticals (including the 
     cost of delaying the introduction of a significant advance in 
     certain major diseases), if similar price controls were 
     adopted in the United States;
       (6) The existing standards under international conventions, 
     including the World Trade Organization and the North American 
     Free Trade Agreement, regarding regulated pharmaceutical 
     prices, including any restrictions on anti-competitive laws 
     that might apply to price regulations and how economic harm 
     caused to consumers in markets without price regulations may 
     be remedied;
       (7) In parallel trade regimes, how much of the price 
     difference between countries in the European Union is 
     captured by middlemen and how much goes to benefit patients 
     and health systems where parallel importing is significant; 
     and
       (8) How much cost is imposed on the owner of a property 
     right from counterfeiting and from international violation of 
     intellectual property rights for prescription medicines.
       (b) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Comptroller General of the Untied 
     States shall submit to Congress a report on the study 
     conducted under subsection (A).
                                 ______
                                 
  SA 1115. Mr. KYL (for himself, Mr. Hatch, and Ms. Murkowski) 
submitted an amendment intended to be proposed by him to the bill S. 1, 
to amend title XVIII of the Social Security Act to provide for a 
voluntary prescription drug benefit under the Medicare program and to 
strengthen and improve the Medicare program, and for other purposes; as 
follows:

       At the appropriate place, insert the following:

     SEC. . SENSE OF THE SENATE CONCERNING MEDICARE PAYMENT UPDATE 
                   FOR PHYSICIANS AND OTHER HEALTH PROFESSIONALS.

       (a) Findings.--The Senate makes the following findings:
       (1) The formula by which Medicare payments are updated each 
     year for services furnished by physicians and other health 
     professionals is fundamentally flawed.
       (2) The flawed physician payment update formula is causing 
     a continuing physician payment crisis, and, without 
     Congressional action, Medicare payment rates for physicians 
     and other practitioners are predicted to fall by 4.2% in 
     2004.
       (3) A physician payment cut in 2004 would be the fifth cut 
     since 1991, and would be on top of a 5.4% cut in 2002, with 
     additional cuts estimated for 2005, 2006, and 2007; from 
     1991-2003, payment rates for physicians and health 
     professionals fell 14% behind practice cost inflation as 
     measured by Medicare's own conservative estimates.
       (4) The sustainable growth rate (SGR) expenditure target, 
     which is the basis for the physician payment update, is 
     linked to the gross domestic product and penalizes physicians 
     and other practitioners for volume increases that they cannot 
     control and that the government actively promotes through new 
     coverage decisions, quality improvement activities and other 
     initiatives that, while beneficial to patients, are not 
     reflected in the SGR.
       (b) Sense of the Senate.--It is the Sense of the Senate 
     that Medicare beneficiary access to quality care may be 
     compromised if Congress does not take action to prevent cuts 
     next year and the following that result from the SGR formula.
                                 ______
                                 
  SA 1116. Mr. DAYTON (for himself, Mr. Coleman, and Mr. Smith) 
submitted an amendment intended to be proposed by him to the bill S. 1, 
to amend title XVIII of the Social Security Act to provide for a 
voluntary prescription drug benefit under the Medicare program and to 
strengthen and improve the Medicare program, and for other purposes; 
which was ordered to lie on the table; as follows:

       Strike section 426 and insert the following:

     SEC. 426. INCREASE FOR GROUND AMBULANCE SERVICES.

       Section 1834(l) (42 U.S.C. 1395m(l)), as amended by section 
     405(b)(2), is amended by adding at the end the following new 
     paragraphs:
       ``(10) Temporary increase for ground ambulance services.--
       ``(A) In general.--Notwithstanding any other provision of 
     this subsection, in the case of ground ambulance services 
     furnished on or after January 1, 2004, and before January 1, 
     2007, the fee schedule established under this section, with 
     respect to both the payment rate for service and the payment 
     rate for mileage, shall provide that such rates otherwise 
     established, shall be increased by 21.5 percent.
       ``(B) Additional increase for services furnished in a rural 
     area.--Notwithstanding any other provision of this 
     subsection, in the case of ground ambulance services 
     furnished on or after January 1, 2004, and before January 1, 
     2007, for which the transportation originates in a rural area 
     described in subparagraph (C), the fee schedule established 
     under this section, with respect to both the payment rate for 
     service and the payment rate for mileage, shall provide that 
     such rates otherwise established, shall be increased by the 
     higher of either 20 percent of the rate determined after the 
     application of subparagraph (C), in addition to the increase 
     provided under subparagraph (A).
       ``(C) Determination of rural areas based on population 
     density within postal zip codes.--With respect to ground 
     ambulance services described in subparagraph (B), during the 
     period described in that subparagraph, paragraph (9) shall be 
     applied by substituting `(as determined under an area 
     classification system established by the Secretary that is 
     based on population density

[[Page 16780]]

     within postal zip code areas)' for `(as defined in section 
     1886(d)(2)(D)) or in a rural census tract of a metropolitan 
     statistical area (as determined under the most recent 
     modification of the Goldsmith Modification, originally 
     published in the Federal Register on February 27, 1992 (57 
     Fed. Reg. 6725))'. Not later than December 31, 2003, the 
     Secretary, taking into account the recommendations contained 
     in the report submitted under section 221(b)(3) of the 
     Medicare, Medicaid, and SCHIP Benefits Improvement and 
     Protection Act of 2000, shall implement the increase in 
     payment required under subparagraph (B) and shall establish 
     the classification system required by the application of this 
     subparagraph. The Secretary shall provide such increased 
     payment for services furnished on or after the earlier of 30 
     days after the establishment of such classification system or 
     December 31, 2003.
       ``(D) Application of increased payments after 2007.--The 
     increased payments under subparagraphs (A) and (B) shall not 
     be taken into account in calculating payments for services 
     furnished on or after the period specified in such 
     subparagraph.
       ``(11) Conversion factor adjustments.--The Secretary shall 
     not adjust downward the conversion factor in any year because 
     of an evaluation of the prior year conversion factor.''.

     SEC. 426A. MEDICARE SECONDARY PAYOR (MSP) PROVISIONS.

       (a) Technical Amendment Concerning Secretary's Authority to 
     Make Conditional Payment When Certain Primary Plans Do Not 
     Pay Promptly.--
       (1) In general.--Section 1862(b)(2) (42 U.S.C. 1395y(b)(2)) 
     is amended--
       (A) in subparagraph (A)(ii), by striking ``promptly (as 
     determined in accordance with regulations)'';
       (B) in subparagraph (B)--
       (i) by redesignating clauses (i) through (iii) as clauses 
     (ii) through (iv), respectively; and
       (ii) by inserting before clause (ii), as so redesignated, 
     the following new clause:
       ``(i) Authority to make conditional payment.--The Secretary 
     may make payment under this title with respect to an item or 
     service if a primary plan described in subparagraph (A)(ii) 
     has not made or cannot reasonably be expected to make payment 
     with respect to such item or service promptly (as determined 
     in accordance with regulations). Any such payment by the 
     Secretary shall be conditioned on reimbursement to the 
     appropriate Trust Fund in accordance with the succeeding 
     provisions of this subsection.''.
       (2) Effective date.--The amendments made by paragraph (1) 
     shall be effective as if included in the enactment of title 
     III of the Medicare and Medicaid Budget Reconciliation 
     Amendments of 1984 (Public Law 98-369).
       (b) Clarifying Amendments to Conditional Payment 
     Provisions.--Section 1862(b)(2) (42 U.S.C. 1395y(b)(2)) is 
     further amended--
       (1) in subparagraph (A), in the matter following clause 
     (ii), by inserting the following sentence at the end: ``An 
     entity that engages in a business, trade, or profession shall 
     be deemed to have a self-insured plan if it carries its own 
     risk (whether by a failure to obtain insurance, or otherwise) 
     in whole or in part.'';
       (2) in subparagraph (B)(ii), as redesignated by subsection 
     (a)(2)(B)--
       (A) by striking the first sentence and inserting the 
     following: ``A primary plan, and an entity that receives 
     payment from a primary plan, shall reimburse the appropriate 
     Trust Fund for any payment made by the Secretary under this 
     title with respect to an item or service if it is 
     demonstrated that such primary plan has or had a 
     responsibility to make payment with respect to such item or 
     service. A primary plan's responsibility for such payment may 
     be demonstrated by a judgment, a payment conditioned upon the 
     recipient's compromise, waiver, or release (whether or not 
     there is a determination or admission of liability) of 
     payment for items or services included in a claim against the 
     primary plan or the primary plan's insured, or by other 
     means.''; and
       (B) in the final sentence, by striking ``on the date such 
     notice or other information is received'' and inserting ``on 
     the date notice of, or information related to, a primary 
     plan's responsibility for such payment or other information 
     is received''; and
       (3) in subparagraph (B)(iii), as redesignated by subsection 
     (a)(2)(B), by striking the first sentence and inserting the 
     following: ``In order to recover payment made under this 
     title for an item or service, the United States may bring an 
     action against any or all entities that are or were required 
     or responsible (directly, as an insurer or self-insurer, as a 
     third-party administrator, as an employer that sponsors or 
     contributes to a group health plan, or large group health 
     plan, or otherwise) to make payment with respect to the same 
     item or service (or any portion thereof) under a primary 
     plan. The United States may, in accordance with paragraph 
     (3)(A) collect double damages against any such entity. In 
     addition, the United States may recover under this clause 
     from any entity that has received payment from a primary plan 
     or from the proceeds of a primary plan's payment to any 
     entity.''.
       (c) Clerical Amendments.--Section 1862(b) (42 U.S.C. 
     1395y(b)) is amended--
       (1) in paragraph (1)(A), by moving the indentation of 
     clauses (ii) through (v) 2 ems to the left; and
       (2) in paragraph (3)(A), by striking ``such'' before 
     ``paragraphs''.
                                 ______
                                 
  SA 1117. Mr. BAUCUS submitted an amendment intended to be proposed by 
him to the bill S. 1, to amend title XVIII of the Social Security Act 
to provide for a voluntary prescription drug benefit under the Medicare 
program and to strengthen and improve the Medicare program, and for 
other purposes; as follows:

       At the end of title VI, add the following:

     SEC. __. SAFETY NET ORGANIZATIONS AND PATIENT ADVISORY 
                   COMMISSION.

       (a) In General.--Title XI (42 U.S.C. 1320 et seq.) is 
     amended by adding at the end the following new part:

   ``Part D--Safety Net Organizations and Patient Advisory Commission


       ``safety net organizations and patient advisory commission

       ``Sec. 1181. (a) Establishment.--There is hereby 
     established the Safety Net Organizations and Patient Advisory 
     Commission (in this section referred to as the `Commission').
       ``(b) Review of Health Care Safety Net Programs and 
     Reporting Requirements.--
       ``(1) Review.--The Commission shall conduct an ongoing 
     review of the health care safety net programs (as described 
     in paragraph (3)(C)) by--
       ``(A) monitoring each health care safety net program to 
     document and analyze the effects of changes in these programs 
     on the core health care safety net;
       ``(B) evaluating the impact of the Emergency Medical 
     Treatment and Labor Act, the Health Insurance Portability and 
     Accountability Act of 1996, the Balanced Budget Act of 1997, 
     the Medicare, Medicaid, and SCHIP Balanced Budget Refinement 
     Act of 1999, the Medicare, Medicaid, and SCHIP Benefits 
     Protection and Improvement Act of 2000, Prescription Drug and 
     Medicare Improvement Act of 2003, and other forces on the 
     capacity of the core health care safety net to continue their 
     roles in the core health care safety net system to care for 
     uninsured individuals, medicaid beneficiaries, and other 
     vulnerable populations;
       ``(C) monitoring existing data sets to assess the status of 
     the core health care safety net and health outcomes for 
     vulnerable populations;
       ``(D) wherever possible, linking and integrating existing 
     data systems to enhance the ability of the core health care 
     safety net to track changes in the status of the core health 
     care safety net and health outcomes for vulnerable 
     populations;
       ``(E) supporting the development of new data systems where 
     existing data are insufficient or inadequate;
       ``(F) developing criteria and indicators of impending core 
     health care safety net failure;
       ``(G) establishing an early-warning system to identify 
     impending failures of core health care safety net systems and 
     providers;
       ``(H) providing accurate and timely information to Federal, 
     State, and local policymakers on the indicators that may lead 
     to the failure of the core health care safety net and an 
     estimate of the projected consequences of such failures and 
     the impact of such a failure on the community;
       ``(I) monitoring and providing oversight for the transition 
     of individuals receiving supplemental security income 
     benefits, medical assistance under title XIX, or child health 
     assistance under title XXI who enroll with a managed care 
     entity (as defined in section 1932(a)(1)(B)), including the 
     review of--
       ``(i) the degree to which health plans have the capacity 
     (including case management and management information system 
     infrastructure) to provide quality managed care services to 
     such an individual;
       ``(ii) the degree to which these plans may be overburdened 
     by adverse selection; and
       ``(iii) the degree to which emergency departments are used 
     by enrollees of these plans; and
       ``(J) identifying and disseminating the best practices for 
     more effective application of the lessons that have been 
     learned.
       ``(2) Reports.--
       ``(A) Annual reports.--Not later than June 1 of each year 
     (beginning with 2005), the Commission shall, based on the 
     review conducted under paragraph (1), submit to the 
     appropriate committees of Congress a report on--
       ``(i) the health care needs of the uninsured; and
       ``(ii) the financial and infrastructure stability of the 
     Nation's core health care safety net.
       ``(B) Agenda and additional reviews.--
       ``(i) Agenda.--The Chair of the Commission shall consult 
     periodically with the Chairpersons and Ranking Minority 
     Members of the appropriate committees of Congress regarding 
     the Commission's agenda and progress toward achieving the 
     agenda.
       ``(ii) Additional reviews.--The Commission shall conduct 
     additional reviews and

[[Page 16781]]

     submit additional reports to the appropriate committees of 
     Congress on topics relating to the health care safety net 
     programs under the following circumstances:

       ``(I) If requested by the Chairpersons or Ranking Minority 
     Members of such committees.
       ``(II) If the Commission deems such additional reviews and 
     reports appropriate.

       ``(C) Availability of reports.--The Commission shall 
     transmit to the Comptroller General and the Secretary a copy 
     of each report submitted under this subsection and shall make 
     such reports available to the public.
       ``(3) Definitions.--In this section:
       ``(A) Appropriate committees of congress.--The term 
     `appropriate committees of Congress' means the Committees on 
     Ways and Means and Energy and Commerce of the House of 
     Representatives and the Committees on Finance and Health, 
     Education, Labor, and Pensions of the Senate.
       ``(B) Core health care safety net.--The term `core health 
     care safety net' means any health care provider that--
       ``(i) by legal mandate or explicitly adopted mission, 
     offers access to health care services to patients, regardless 
     of the ability of the patient to pay for such services; and
       ``(ii) has a case mix that is substantially comprised of 
     patients who are uninsured, covered under the medicaid 
     program, covered under any other public health care program, 
     or are otherwise vulnerable populations.

     Such term includes disproportionate share hospitals, 
     Federally qualified health centers, other Federal, State, and 
     locally supported clinics, rural health clinics, local health 
     departments, and providers covered under the Emergency 
     Medical Treatment and Labor Act.
       ``(C) Health care safety net programs.--The term `health 
     care safety net programs' includes the following:
       ``(i) Medicaid.--The medicaid program under title XIX.
       ``(ii) SCHIP.--The State children's health insurance 
     program under title XXI.
       ``(iii) Maternal and child health services block grant 
     program.--The maternal and child health services block grant 
     program under title V.
       ``(iv) FQHC programs.--Each federally funded program under 
     which a health center (as defined in section 330(1) of the 
     Public Health Service Act), a Federally qualified health 
     center (as defined in section 1861(aa)(4)), or a Federally-
     qualified health center (as defined in section 1905(l)(2)(B)) 
     receives funds.
       ``(v) RHC programs.--Each federally funded program under 
     which a rural health clinic (as defined in section 
     1861(aa)(4) or 1905(l)(1)) receives funds.
       ``(vi) DSH payment programs.--Each federally funded program 
     under which a disproportionate share hospital receives funds.
       ``(vii) Emergency medical treatment and active labor act.--
     All care provided under section 1867 for the uninsured, 
     underinsured, beneficiaries under title XIX, and other 
     vulnerable individuals.
       ``(viii) Other health care safety net programs.--Such term 
     also includes any other health care program that the 
     Commission determines to be appropriate.
       ``(D) Vulnerable populations.--The term `vulnerable 
     populations' includes uninsured and underinsured individuals, 
     low-income individuals, farm workers, homeless individuals, 
     individuals with disabilities, individuals with HIV or AIDS, 
     and such other individuals as the Commission may designate.
       ``(c) Membership.--
       ``(1) Number and appointment.--The Commission shall be 
     composed of 13 members appointed by the Comptroller General 
     of the United States (in this section referred to as the 
     `Comptroller General'), in consultation with the appropriate 
     committees of Congress.
       ``(2) Qualifications.--
       ``(A) In general.--The membership of the Commission shall 
     include individuals with national recognition for their 
     expertise in health finance and economics, health care safety 
     net research and program management, actuarial science, 
     health facility management, health plans and integrated 
     delivery systems, reimbursement of health facilities, 
     allopathic and osteopathic medicine (including emergency 
     medicine), and other providers of health services, and other 
     related fields, who provide a mix of different professionals, 
     broad geographic representation, and a balance between urban 
     and rural representatives.
       ``(B) Inclusion.--The membership of the Commission shall 
     include health professionals, employers, third-party payers, 
     individuals skilled in the conduct and interpretation of 
     biomedical, health services, and health economics research 
     and expertise in outcomes and effectiveness research and 
     technology assessment. Such membership shall also include 
     recipients of care from core health care safety net and 
     individuals who provide and manage the delivery of care by 
     the core health care safety net.
       ``(C) Majority nonproviders.--Individuals who are directly 
     involved in the provision, or management of the delivery, of 
     items and services covered under the health care safety net 
     programs shall not constitute a majority of the membership of 
     the Commission.
       ``(D) Ethical disclosure.--The Comptroller General shall 
     establish a system for public disclosure by members of the 
     Commission of financial and other potential conflicts of 
     interest relating to such members.
       ``(3) Terms.--
       ``(A) In general.--The terms of members of the Commission 
     shall be for 3 years except that of the members first 
     appointed, the Comptroller General shall designate--
       ``(i) four to serve a term of 1 year;
       ``(ii) four to serve a term of 2 years; and
       ``(iii) five to serve a term of 3 years.
       ``(B) Vacancies.--
       ``(i) In general.--A vacancy in the Commission shall be 
     filled in the same manner in which the original appointment 
     was made.
       ``(ii) Appointment.--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.
       ``(iii) Terms.--A member may serve after the expiration of 
     that member's term until a successor has taken office.
       ``(4) Compensation.--
       ``(A) Members.--While serving on the business of the 
     Commission (including travel time), a member of the 
     Commission--
       ``(i) shall be entitled to compensation at the per diem 
     equivalent of the rate provided for level IV of the Executive 
     Schedule under section 5315 of title 5, United States Code; 
     and
       ``(ii) while so serving away from home and the member's 
     regular place of business, may be allowed travel expenses, as 
     authorized by the Commission.
       ``(B) Treatment.--For purposes of pay (other than pay of 
     members of the Commission) and employment benefits, rights, 
     and privileges, all personnel of the Commission shall be 
     treated as if they were employees of the United States 
     Senate.
       ``(5) Chair; vice chair.--The Comptroller General shall 
     designate a member of the Commission, at the time of 
     appointment of the member as Chair and a member as Vice Chair 
     for that term of appointment, except that in the case of 
     vacancy of the Chair or Vice Chair, the Comptroller General 
     may designate another member for the remainder of that 
     member's term.
       ``(6) Meetings.--The Commission shall meet at the call of 
     the Chair or upon the written request of a majority of its 
     members.
       ``(d) Director and Staff; Experts and Consultants.--Subject 
     to such review as the Comptroller General determines 
     necessary to ensure the efficient administration of the 
     Commission, the Commission may--
       ``(1) employ and fix the compensation of an Executive 
     Director (subject to the approval of the Comptroller General) 
     and such other personnel as may be necessary to carry out the 
     duties of the Commission under this section (without regard 
     to the provisions of title 5, United States Code, governing 
     appointments in the competitive service);
       ``(2) seek such assistance and support as may be required 
     in the performance of the duties of the Commission under this 
     section from appropriate Federal departments and agencies;
       ``(3) enter into contracts or make other arrangements, as 
     may be necessary for the conduct of the work of the 
     Commission (without regard to section 3709 of the Revised 
     Statutes (41 U.S.C. 5));
       ``(4) make advance, progress, and other payments which 
     relate to the work of the Commission;
       ``(5) provide transportation and subsistence for persons 
     serving without compensation; and
       ``(6) prescribe such rules and regulations as it deems 
     necessary with respect to the internal organization and 
     operation of the Commission.
       ``(e) Powers.--
       ``(1) Obtaining official data.--
       ``(A) In general.--The Commission may secure directly from 
     any department or agency of the United States information 
     necessary for the Commission to carry the duties under this 
     section.
       ``(B) Request of chair.--Upon request of the Chair, the 
     head of that department or agency shall furnish that 
     information to the Commission on an agreed upon schedule.
       ``(2) Data collection.--In order to carry out the duties of 
     the Commission under this section, the Commission shall--
       ``(A) use existing information, both published and 
     unpublished, where possible, collected and assessed either by 
     the staff of the Commission or under other arrangements made 
     in accordance with this section;
       ``(B) carry out, or award grants or contracts for, original 
     research and experimentation, where existing information is 
     inadequate; and
       ``(C) adopt procedures allowing any interested party to 
     submit information for the Commission's use in making reports 
     and recommendations.
       ``(3) Access of gao to information.--The Comptroller 
     General shall have unrestricted access to all deliberations, 
     records, and nonproprietary data that pertains to the work of 
     the Commission, immediately upon request. The expense of 
     providing such information shall be borne by the General 
     Accounting Office.

[[Page 16782]]

       ``(4) Periodic audit.--The Commission shall be subject to 
     periodic audit by the Comptroller General.
       ``(f) Application of FACA.--Section 14 of the Federal 
     Advisory Committee Act (5 U.S.C. App.) does not apply to the 
     Commission.
       ``(g) Authorization of Appropriations.--
       ``(1) Request for appropriations.--The Commission shall 
     submit requests for appropriations in the same manner as the 
     Comptroller General submits requests for appropriations, but 
     amounts appropriated for the Commission shall be separate 
     from amounts appropriated for the Comptroller General.
       ``(2) Authorization.--There are authorized to be 
     appropriated such sums as may be necessary to carry out the 
     provisions of this section.''.
       (b) Effective Date.--The Comptroller General of the United 
     States shall appoint the initial members of the Safety Net 
     Organizations and Patient Advisory Commission established 
     under subsection (a) not later than June 1, 2004.
                                 ______
                                 
  SA 1118. Mr. SPECTER submitted an amendment intended to be proposed 
by him to the bill S. 1, to amend title XVIII of the Social Security 
Act to provide for a voluntary prescription drug benefit under the 
Medicare program and to strengthen and improve the Medicare program, 
and for other purposes; as follows:

       At the end of title VI, insert the following:

     SEC.   . SENSE OF THE SENATE REGARDING THE ESTABLISHMENT OF A 
                   NATIONWIDE PERMANENT LIFESTYLE MODIFICATION 
                   PROGRAM FOR MEDICARE BENEFICIARIES.

       (a) Findings.--Congress finds that:
       (1) Heart disease kills more than 500,000 Americans per 
     year.
       (2) The number and costs of interventions for the treatment 
     of coronary disease are rising and currently cost the health 
     care system $58,000,000,000 annually.
       (3) The Medicare Lifestyle Modification Program has been 
     operating throughout 12 States and has been demonstrated to 
     reduce the need for coronary procedures by 88 percent per 
     year.
       (4) The Medicare Lifestyle Modification Program is less 
     expensive to deliver than interventional cardiac procedures 
     and could reduce cardiovascular expenditures by 
     $36,000,000,000 annually.
       (5) Lifestyle choices such as diet and exercise affect 
     heart disease and heart disease outcomes by 50 percent or 
     greater.
       (6) Intensive lifestyle interventions which include teams 
     of nurses, doctors, exercise physiologists, registered 
     dietitians, and behavioral health clinicians have been 
     demonstrated to reduce heart disease risk factors and enhance 
     heart disease outcomes dramatically.
       (7) The National Institutes of Health estimates that 
     17,000,000 Americans have diabetes and the Centers for 
     Disease Control and Prevention estimates that the number of 
     Americans who have a diagnosis of diabetes increased 61 
     percent in the last decade and is expected to more than 
     double by 2050.
       (8) Lifestyle modification programs are superior to 
     medication therapy for treating diabetes.
       (9) Individuals with diabetes are now considered to have 
     coronary disease at the date of diagnosis of their diabetic 
     state.
       (10) The Medicare Lifestyle Modification Program has been 
     an effective lifestyle program for the reversal and treatment 
     of heart disease.
       (11) Men with prostate cancer have shown significant 
     improvement in prostate cancer markers using a similar 
     approach in lifestyle modification.
       (12) These lifestyle changes are therefore likely to affect 
     other chronic disease states, in addition to heart disease.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that--
       (1) the Secretary of Health and Human Services should carry 
     out the demonstration project known as the Lifestyle 
     Modification Program Demonstration, as described in the 
     Health Care Financing Administration Memorandum of 
     Understanding entered into on November 13, 2000, on a 
     permanent basis;
       (2) the project should include as many Medicare 
     beneficiaries as would like to participate in the project on 
     a voluntary basis; and
       (3) the project should be conducted on a national basis.
                                 ______
                                 
  SA 1119. Mrs. LINCOLN submitted an amendment intended to be proposed 
by her to the bill S. 1, to amend title XVIII of the Social Security 
Act to provide for a voluntary prescription drug benefit under the 
Medicare program and to strengthen and improve the Medicare program, 
and for other purposes; which was ordered to lie on the table; as 
follows:

       Strike section 443 and insert the following:

     SEC. 443. MEDICARE COVERAGE OF CARE COORDINATION AND 
                   ASSESSMENT SERVICES.

       (a) Part B Coverage of Care Coordination and Assessment 
     Services.--Section 1861(s)(2) of the Social Security Act (42 
     U.S.C. 1395x(s)(2)) is amended--
       (1) in subparagraph (U), by striking ``and'' at the end;
       (2) in subparagraph (V)(iii), by adding ``and'' after the 
     semicolon at the end; and
       (3) by adding at the end the following new subparagraph:
       ``(W) care coordination and assessment services (as defined 
     in subsection (ww)).''.
       (b) Care Coordination and Assessment Services Defined.--
     Section 1861 of the Social Security Act (42 U.S.C. 1395x) is 
     amended by adding at the end the following new subsection:

              ``Care Coordination and Assessment Services

       ``(ww)(1) The term `care coordination and assessment 
     services' means services that are furnished to an eligible 
     individual (as defined in paragraph (2)) by a care 
     coordinator (as defined in paragraph (3)) under a plan of 
     care prescribed by such care coordinator for the purpose of 
     care coordination and assessment, which may include any of 
     the following services:
       ``(A) an initial assessment of an individual's medical 
     condition, functional and cognitive capacity and 
     environmental and psychological needs and an annual 
     assessment thereafter.
       ``(B) Management of transitions of care across practice 
     settings and between providers.
       ``(C) Coordination of, and referral for, medical and other 
     health-related services, including--
       ``(i) multidisciplinary care conferences;
       ``(ii) coordination with other providers, including 
     telephone consultations with physicians; and
       ``(iii) monitoring and management of medications, with 
     special emphasis on clients using multiple prescriptions 
     (including coordination with the entity managing benefits for 
     the individual).
       ``(D) Patient and family care-giver education and 
     counseling (through office visits or telephone consultation), 
     including self-management services and risk appraisal to 
     identify behavioral risk factors through self assessment.
       ``(E) Providing information about end of life care, 
     including referral to hospice services, when appropriate, 
     including patient and family caregiver education and 
     counseling about hospice, and managing and facilitating 
     transition to hospice when elected.
       ``(F) Referral to and coordination with community 
     resources.
       ``(G) Such other services for which payment would not 
     otherwise be made under this title as the Secretary shall 
     determine to be appropriate including, but not limited to, 
     activities to facilitate continuity of care and patient 
     adherence to plans of care.
       ``(2) For purposes of this subsection, the term `eligible 
     individual' means an individual who a care coordinator 
     annually certifies has multiple chronic conditions and meets 
     eligibility criteria determined by the Secretary.
       ``(3)(A) For purposes of this subsection, the term `care 
     coordinator' means an individual or entity that--
       ``(i) is--
       ``(I) a physician who provides care to at least 50 eligible 
     individuals; or
       ``(II) an independent nurse practitioner who provides care 
     to at least 50 eligible individuals;
       ``(ii) has entered into a care coordination agreement with 
     the Secretary; and
       ``(iii) has appropriate office staffing, operating under 
     the direction of the eligible provider, which is sufficient 
     in size and expertise to address the complex clinical care 
     coordination needs of participating beneficiaries in the 
     practice;
       ``(iv) has an ability and process to identify eligible 
     beneficiaries;
       ``(v) has an ability to coordinate care for participating 
     beneficiaries;
       ``(vi) has an ability to maintain and update patient 
     records to ensure that care provided by other treating 
     providers (including the instructions of other treating 
     providers and any related lab results, prescription orders, 
     and ancillary treatment services) is included in the record;
       ``(vii) has an ability to periodically review the medical 
     record of participating beneficiaries to identify problems 
     related to transitions, poly-pharmacy, and care continuity 
     and to respond to resolve identified problems;
       ``(viii) is capable of referring to and coordinating with 
     community-based supportive services;
       ``(ix) has an ability to communicate with participating 
     beneficiaries or family caregivers as needed and appropriate, 
     using telephonic and/or electronic communications; and
       ``(x) agrees to coordinate care for participating 
     beneficiaries, consult with other treating providers 
     (including but not limited to other treating physicians, 
     other medical professionals involved in patient care, 
     residential and inpatient facilities, and pharmacies), and 
     community service providers;
       ``(xi) agrees to recognize patient treatment preferences; 
     and
       ``(xii) is certified by the Secretary as meeting standards 
     defined by the Secretary and being capable of coordinating 
     clinical care for eligible beneficiaries.

[[Page 16783]]

       ``(B) For purposes of subparagraph (A)(ii), each care 
     coordination agreement shall--
       ``(i) be entered into for a period of 1 year and may be 
     renewed if the Secretary is satisfied that the care 
     coordinator continues to meet the conditions of participation 
     specified in subparagraph (A);
       ``(ii) contain such other terms and conditions as the 
     Secretary may require.
       ``(4) For purposes of this subsection, the Secretary shall 
     send quarterly reports to each eligible provider that inform, 
     in aggregate, on the provider's participating beneficiary 
     caseload, using measures determined by the Secretary that are 
     derived from existing Medicare date sources. In preparing the 
     reports under this paragraph, the Secretary shall consider--
       ``(A) the average number of emergency room and nursing home 
     visits relative to geographic norms for all eligible 
     beneficiaries; and
       ``(B) the average number of unique physician visits 
     relative to geographic norms for all eligible beneficiaries.
       ``(5) For purposes of this subsection, the term `functional 
     limitations' means each of the following:
       ``(A) Eating.
       ``(B) Toileting.
       ``(C) Transferring.
       ``(D) Bathing.
       ``(E) Dressing.
       ``(F) Continence.
       ``(6) Rural health clinics and Federally qualified health 
     centers shall be eligible sites at which care coordination 
     and assessment services may be provided.
       ``(7) For purposes of this subsection, the term `chronic 
     condition' means an illness, functional limitation, or 
     cognitive impairment that is expected to last at least 1 year 
     and limits what a person can do, and requires ongoing care.
       ``(8) For purposes of this subsection, the Secretary shall 
     establish eligibility criteria for the care management 
     benefit that would target approximately 5 percent of elderly 
     medicare fee-for-service enrollees. The eligibility criteria 
     should identify enrollees who need care management because 
     they have multiple chronic conditions that result in high use 
     of Medicare services, high use of prescription medications, 
     and high Medicare costs. Inability to manage one's own care 
     due to cognitive impairment should be considered as an 
     additional indicator of need for care management.
       (c) Payment and Elimination of Coinsurance.--
       (1) In general.--Section 1833(a)(1) of the Social Security 
     Act (42 U.S.C. 1395l(a)(1)) is amended--
       (A) by striking ``and'' before ``(U)''; and
       (B) by inserting before the semicolon at the end the 
     following: ``, and (V) with respect to assessment services 
     described in section 1861(s)(2)(W), the amounts paid shall be 
     100 percent of the lesser of the actual charge for the 
     service or the amount determined under the payment basis 
     determined under section 1848 by the Secretary for such 
     service and an administrative fee shall be developed for care 
     coordination services''.
       (2) Payment under physician fee schedule.--Section 
     1848(j)(3) of the Social Security Act (42 U.S.C. 1395w-
     4(j)(3)) is amended by inserting ``(2)(W),'' after 
     ``(2)(S),''.
       (3) Elimination of coinsurance in outpatient hospital 
     settings.--The third sentence of section 1866(a)(2)(A) of the 
     Social Security Act (42 U.S.C. 1395cc(a)(2)(A)) is amended by 
     inserting after ``1861(s)(10)(A)'' the following: ``, with 
     respect to care coordination and assessment services (as 
     defined in section 1861(ww)(1)),''.
       (d) Application of Limits on Billing.--Section 
     1842(b)(18)(C) of the Social Security Act (42 U.S.C. 
     1395u(b)(18)(C)) is amended by adding at the end the 
     following new clause:
       ``(vii) A care coordinator (as defined in section 
     1861(ww)(3)) that is not a physician.''.
       (e) Exception to Limits on Physician Referrals.--Section 
     1877(b) of the Social Security Act (42 U.S.C. 1395nn(b)) is 
     amended--
       (1) by redesignating paragraph (4) as paragraph (5); and
       (2) by inserting after paragraph (3) the following new 
     paragraph:
       ``(4) Private sector purchasing and quality improvement 
     tools for original medicare.--In the case of a designated 
     health service, if the designated health service is--
       ``(A) a care coordination and assessment service (as 
     defined in section 1861(ww)(1)); and
       ``(B) provided by a care coordinator (as defined in 
     paragraph (3) of such section).''.
       (f) Rulemaking.--The Secretary of Health and Human Services 
     shall define such terms and establish such procedures as the 
     Secretary determines necessary to implement the provisions of 
     this section.
       (g) Effective Date.--The amendments made by this section 
     shall apply to care coordination and assessment services 
     furnished on or after January 1, 2006, and before January 1, 
     2011.
       At the end of subtitle B of title IV, add the following:

     SEC. __. MEDICARE SECONDARY PAYOR (MSP) PROVISIONS.

       (a) Technical Amendment Concerning Secretary's Authority to 
     Make Conditional Payment When Certain Primary Plans Do Not 
     Pay Promptly.--
       (1) In general.--Section 1862(b)(2) (42 U.S.C. 1395y(b)(2)) 
     is amended--
       (A) in subparagraph (A)(ii), by striking ``promptly (as 
     determined in accordance with regulations)'';
       (B) in subparagraph (B)--
       (i) by redesignating clauses (i) through (iii) as clauses 
     (ii) through (iv), respectively; and
       (ii) by inserting before clause (ii), as so redesignated, 
     the following new clause:
       ``(i) Authority to make conditional payment.--The Secretary 
     may make payment under this title with respect to an item or 
     service if a primary plan described in subparagraph (A)(ii) 
     has not made or cannot reasonably be expected to make payment 
     with respect to such item or service promptly (as determined 
     in accordance with regulations). Any such payment by the 
     Secretary shall be conditioned on reimbursement to the 
     appropriate Trust Fund in accordance with the succeeding 
     provisions of this subsection.''.
       (2) Effective date.--The amendments made by paragraph (1) 
     shall be effective as if included in the enactment of title 
     III of the Medicare and Medicaid Budget Reconciliation 
     Amendments of 1984 (Public Law 98-369).
       (b) Clarifying Amendments to Conditional Payment 
     Provisions.--Section 1862(b)(2) (42 U.S.C. 1395y(b)(2)) is 
     further amended--
       (1) in subparagraph (A), in the matter following clause 
     (ii), by inserting the following sentence at the end: ``An 
     entity that engages in a business, trade, or profession shall 
     be deemed to have a self-insured plan if it carries its own 
     risk (whether by a failure to obtain insurance, or otherwise) 
     in whole or in part.'';
       (2) in subparagraph (B)(ii), as redesignated by subsection 
     (a)(2)(B)--
       (A) by striking the first sentence and inserting the 
     following: ``A primary plan, and an entity that receives 
     payment from a primary plan, shall reimburse the appropriate 
     Trust Fund for any payment made by the Secretary under this 
     title with respect to an item or service if it is 
     demonstrated that such primary plan has or had a 
     responsibility to make payment with respect to such item or 
     service. A primary plan's responsibility for such payment may 
     be demonstrated by a judgment, a payment conditioned upon the 
     recipient's compromise, waiver, or release (whether or not 
     there is a determination or admission of liability) of 
     payment for items or services included in a claim against the 
     primary plan or the primary plan's insured, or by other 
     means.''; and
       (B) in the final sentence, by striking ``on the date such 
     notice or other information is received'' and inserting ``on 
     the date notice of, or information related to, a primary 
     plan's responsibility for such payment or other information 
     is received''; and
       (3) in subparagraph (B)(iii), , as redesignated by 
     subsection (a)(2)(B), by striking the first sentence and 
     inserting the following: ``In order to recover payment made 
     under this title for an item or service, the United States 
     may bring an action against any or all entities that are or 
     were required or responsible (directly, as an insurer or 
     self-insurer, as a third-party administrator, as an employer 
     that sponsors or contributes to a group health plan, or large 
     group health plan, or otherwise) to make payment with respect 
     to the same item or service (or any portion thereof) under a 
     primary plan. The United States may, in accordance with 
     paragraph (3)(A) collect double damages against any such 
     entity. In addition, the United States may recover under this 
     clause from any entity that has received payment from a 
     primary plan or from the proceeds of a primary plan's payment 
     to any entity.''.
       (c) Clerical Amendments.--Section 1862(b) (42 U.S.C. 
     1395y(b)) is amended--
       (1) in paragraph (1)(A), by moving the indentation of 
     clauses (ii) through (v) 2 ems to the left; and
       (2) in paragraph (3)(A), by striking ``such'' before 
     ``paragraphs''.
                                 ______
                                 
  SA 1120. Mr. DAYTON (for himself, Mr. Coleman, and Mr. Smith) 
submitted an amendment intended to be proposed by him to the bill S. 1, 
to amend title XVIII of the Social Security Act to provide for a 
voluntary prescription drug benefit under the Medicare program and to 
strengthen and improve the Medicare program, and for other purposes; 
which was ordered to lie on the table; as follows:

       Strike section 426 and insert the following:

     SEC. 426. TEMPORARY INCREASE FOR GROUND AMBULANCE SERVICES.

       Section 1834(l) (42 U.S.C. 1395m(l)), as amended by section 
     405(b)(2), is amended by adding at the end the following new 
     paragraph:
       ``(10) Temporary increase for ground ambulance services.--
       ``(A) In general.--Notwithstanding any other provision of 
     this subsection, in the case of ground ambulance services 
     furnished on or after January 1, 2004, and before January 1, 
     2007 for which the transportation originates in--
       ``(i) a rural area described in paragraph (9) or in a rural 
     census tract described in such paragraph, the fee schedule 
     established

[[Page 16784]]

     under this section shall provide that the rate for the 
     service otherwise established, after application of any 
     increase under such paragraph, shall be increased by 5 
     percent; and
       ``(ii) an area not described in clause (i), the fee 
     schedule established under this section shall provide that 
     the rate for the service otherwise established shall be 
     increased by 2 percent
       ``(B) Application of increased payments after 2007.--The 
     increased payments under subparagraph (A) shall not be taken 
     into account in calculating payments for services furnished 
     on or after the period specified in such subparagraph.''.
                                 ______
                                 
  SA 1121. Mr. KYL (for himself, Mr. Nickles, Mr. Gregg, Mr. Thomas, 
and Mr. Lott) proposed an amendment to the bill S. 1, to amend title 
XVIII of the Social Security Act to provide for a voluntary 
prescription drug benefit under the Medicare program and to strengthen 
and improve the Medicare program, and for other purposes; as follows:

       At the appropriate place, insert the following:

     SEC.   . SENSE OF THE SENATE CONCERNING THE STRUCTURE OF 
                   MEDICARE REFORM AND THE PRESCRIPTION DRUG 
                   BENEFIT.

       (a) Findings.--The Senate makes the following findings:
       (1) America's seniors deserve a fiscally-strong Medicare 
     system that fulfills its promise to them and future retirees.
       (2) The impending retirement of the ``baby boom'' 
     generation will dramatically increase the costs of providing 
     Medicare benefits. Medicare costs will double relative to the 
     size of the economy from 2% of GDP today to 4% in 2025 and 
     double again to 8% of GDP in 2075. This growth will 
     accelerate substantially when Congress adds a necessary 
     prescription drug benefit.
       (3) Medicare's current structure does not have the 
     flexibility to quickly adapt to rapid advances in modern 
     health care. Medicare lags far behind other insurers in 
     providing prescription drug coverage, disease management 
     programs, and a host of other advances. Reforming Medicare to 
     create a more self-adjusting, innovative structure is 
     essential to improve Medicare's efficiency and the quality of 
     the medical care it provides.
       (4) Private-sector choice for Medicare beneficiaries would 
     provide two key benefits: it would be tailored to the needs 
     of America's seniors, not the government, and would create a 
     powerful incentive for private-sector Medicare plans to 
     provide the best quality health care to seniors at the most 
     affordable price.
       (5) The method by which the national preferred provider 
     organizations in the Federal Employees Health Benefits 
     Program have been reimbursed has proven to be a reliable and 
     successful mechanism for providing Members of Congress and 
     federal employees with excellent health care choices.
       (6) Unlike the Medicare payment system, which has had to be 
     changed by Congress every few years, the Federal Employees 
     Health Benefits Program has existed for 43 years with minimal 
     changes from Congress.
       (b) Sense of the Senate.--It is the Sense of the Senate 
     that Medicare reform legislation should:
       (1) Ensure that prescription drug coverage is directed to 
     those who need it most.
       (2) Provide that government contributions used to support 
     Medicare Advantage plans are based on market principles 
     beginning in 2006 to ensure the long and short term viability 
     of such options for America's seniors.
       (3) Develop a payment system for the Medicare Advantage 
     preferred provider organizations similar to the payment 
     system used for the national preferred provider organizations 
     in the Federal Employees Health Benefits Program.
       (4) Limit the addition of new unfunded obligations in the 
     Medicare program so that the long-term solvency of this 
     important program is not further jeopardized.
       (5) Incorporate private sector, market-based elements, that 
     do not rely on the inefficient Medicare price control 
     structure.
       (6) Keep the cost of structural changes and new benefits 
     within the $400 billion provided for under the current 
     Congressional Budget Resolution for implementing Medicare 
     reform and providing a prescription drug benefit.
       (7) Preserve the current employer-sponsored retiree health 
     plans and not design a benefit which has the unintended 
     consequences of supplanting private coverage.
       (8) Incorporate regulatory reform proposals to eliminate 
     red tape and reduce costs.
       (9 Restore the right of Medicare beneficiaries and their 
     doctors to work together to provide services, allow private 
     fee for service plans to set their own premiums, and permit 
     seniors to add their own dollars beyond the government 
     contribution.
                                 ______
                                 
  SA 1122. Mr. BROWNBACK (for himself, and Mr. Nelson of Nebraska) 
submitted an amendment intended to be proposed by him to the bill S. 1, 
to amend title XVIII of the Social Security Act to provide for a 
voluntary prescription drug benefit under the Medicare program and to 
strengthen and improve the Medicare program, and for other purposes; as 
follows:

       At the end of subtitle A of title IV, add the following:

     SEC. __. RURAL COMMUNITY HOSPITAL DEMONSTRATION PROGRAM.

       (a) Establishment of Rural Community Hospital (RCH) 
     Demonstration Program.--
       (1) In general.--The Secretary shall establish a 
     demonstration program to test the feasibility and 
     advisability of the establishment of rural community 
     hospitals that furnish rural community hospital services to 
     medicare beneficiaries.
       (2) Designation of rchs.--
       (A) Application.--Each hospital that is located in a 
     demonstration area described in subparagraph (C) that desires 
     to participate in the demonstration program under this 
     section shall submit an application to the Secretary at such 
     time, in such manner, and containing such information as the 
     Secretary may require.
       (B) Designation.--The Secretary shall designate any 
     hospital that is located in a demonstration area described in 
     subparagraph (C), submits an application in accordance with 
     subparagraph (A), and meets the other requirements of this 
     section as a rural community hospital for purposes of the 
     demonstration program.
       (C) Demonstration areas.--There shall be four demonstration 
     areas within this program. Two of these demonstration areas 
     described in this subparagraph shall include Kansas and 
     Nebraska.
       (3) Duration.--The Secretary shall conduct the 
     demonstration program under this section for a 5-year period.
       (4) Implementation.--The Secretary shall implement the 
     demonstration program not later than January 1, 2005, but may 
     not implement the program before October 1, 2004.
       (b) Payment.--
       (1) Inpatient hospital services.--The amount of payment 
     under the demonstration program for inpatient hospital 
     services furnished in a rural community hospital, other than 
     such services furnished in a psychiatric or rehabilitation 
     unit of the hospital which is a distinct part, is, at the 
     election of the hospital in the application referred to in 
     subsection (a)(2)(A)--
       (A) the reasonable costs of providing such services, 
     without regard to the amount of the customary or other 
     charge; or
       (B) the amount of payment provided for under the 
     prospective payment system for inpatient hospital services 
     under section 1886(d) of the Social Security Act (42 U.S.C. 
     1395ww(d)).
       (2) Outpatient services.--The amount of payment under the 
     demonstration program for outpatient services furnished in a 
     rural community hospital is, at the election of the hospital 
     in the application referred to in subsection (a)(2)(A)--
       (A) the reasonable costs of providing such services, 
     without regard to the amount of the customary or other charge 
     and any limitation under section 1861(v)(1)(U) of the Social 
     Security Act (42 U.S.C. 1395x(v)(1)(U)); or
       (B) the amount of payment provided for under the 
     prospective payment system for covered OPD services under 
     section 1833(t) of the Social Security Act (42 U.S.C. 
     1395l(t)).
       (3) Home health services.--In determining payments under 
     the demonstration program for home health services furnished 
     by a qualified RCH-based home health agency (as defined in 
     paragraph (2))--
       (A) the agency may make a one-time election to waive 
     application of the prospective payment system established 
     under section 1895 of the Social Security Act (42 U.S.C. 
     1395fff) to such services furnished by the agency; and
       (B) in the case of such an election, payment shall be made 
     on the basis of the reasonable costs incurred in furnishing 
     such services as determined under section 1861(v) of the 
     Social Security Act (42 U.S.C. 1395x(v)), but without regard 
     to the amount of the customary or other charges with respect 
     to such services or the limitations established under 
     paragraph (1)(L) of such section.
       (4) Consolidated billing.--The Secretary shall permit 
     consolidated billing under section 1842(b)(6)(E) of the 
     Social Security Act (42 U.S.C. 1395u(b)(6)(E)).
       (5) Exemption from 30 percent reduction in reimbursement 
     for bad debt.--In determining the reasonable costs for rural 
     community hospitals, section 1861(v)(1)(T) of the Social 
     Security Act (42 U.S.C. 1395x(v)(1)(T)) shall not apply.
       (6) Beneficiary cost-sharing for outpatient services.--The 
     amounts of beneficiary cost-sharing for outpatient services 
     furnished in a rural community hospital under the 
     demonstration program shall be as follows:
       (A) For items and services that would have been paid under 
     section 1833(t) of the Social Security Act (42 U.S.C. 
     1395l(t)) if provided by a hospital, the amount of cost-
     sharing determined under paragraph (8) of such section.
       (B) For items and services that would have been paid under 
     section 1833(h) of such Act (42 U.S.C. 1395l(h)) if furnished 
     by a provider or supplier, no cost-sharing shall apply.
       (C) For all other items and services, the amount of cost-
     sharing that would apply to the item or service under the 
     methodology

[[Page 16785]]

     that would be used to determine payment for such item or 
     service if provided by a physician, provider, or supplier, as 
     the case may be.
       (7) Return on equity.--
       (A) In general.--Notwithstanding subparagraph (P)(i) and 
     (S)(i) of section 1861(v)(1) of the Social Security Act (42 
     U.S.C. 1395x(v)(1)) and section 1886(g)(2) of such Act (42 
     U.S.C. 1395ww(g)(2)), in determining the reasonable costs of 
     the services described in subclause (II) furnished by a rural 
     community hospital for payment of a return on equity capital 
     at a rate of return equal to 150 percent of the average 
     specified in section 1861(v)(1)(P)(i) of such Act (42 U.S.C. 
     1395x(v)(1)(P)(i)).
       (B) Services described.--The services referred to in 
     subclause (I) are rural community hospital services.
       (C) Disregard of proprietary provider status.--Payment 
     under the demonstration program shall be made without regard 
     to whether a provider is a proprietary provider.
       (8) Removing barriers to establishment of distinct part 
     units by rch facilities.--Notwithstanding section 
     1886(d)(1)(B) of the Social Security Act (42 U.S.C. 
     1395ww(d)(1)(B)), the Secretary shall permit rural community 
     hospitals to establish distinct part units for purposes of 
     applying such section.
       (c) Funding.--
       (1) In general.--The Secretary shall provide for the 
     transfer from the Federal Hospital Insurance Trust Fund under 
     section 1817 of the Social Security Act (42 U.S.C. 1395i) and 
     the Federal Supplementary Insurance Trust Fund established 
     under section 1841 of such Act (42 U.S.C. 1395t), in such 
     proportion as the Secretary determines to be appropriate, of 
     such funds as are necessary for the costs of carrying out the 
     demonstration program under this section.
       (2) Budget neutrality.--In conducting the demonstration 
     program under this section, the Secretary shall ensure that 
     the aggregate payments made by the Secretary do not exceed 
     the amount which the Secretary would have paid if the 
     demonstration program under this section was not implemented.
       (d) Waiver Authority.--The Secretary may waive such 
     requirements of titles XI and XVIII of the Social Security 
     Act (42 U.S.C. 1301 et seq.; 1395 et seq.) as may be 
     necessary for the purpose of carrying out the demonstration 
     program under this section.
       (e) Report.--Not later than 6 months after the completion 
     of the demonstration program under this section, the 
     Secretary shall submit to Congress a report on such program, 
     together with recommendations for such legislation and 
     administrative action as the Secretary determines to be 
     appropriate.
       (f) Definitions.--In this section:
       (1) Rural community hospital.--
       (A) In general.--The term ``rural community hospital'' 
     means a hospital (as defined in section 1861(e) of the Social 
     Security Act (42 U.S.C. 1395x(e))) that--
       (i) is located in a rural area (as defined in section 
     1886(d)(2)(D) of such Act (42 U.S.C. 1395ww(d)(2)(D))) or 
     treated as being so located pursuant to section 1886(d)(8)(E) 
     of such Act (42 U.S.C. 1395ww(d)(8)(E));
       (ii) subject to subparagraph (B), has less than 51 acute 
     care inpatient beds, as reported in its most recent cost 
     report;
       (iii) makes available 24-hour emergency care services;
       (iv) subject to subparagraph (C), has a provider agreement 
     in effect with the Secretary and is open to the public as of 
     January 1, 2003; and
       (v) applies to the Secretary for such designation.
       (B) Treatment of psychiatric and rehabilitation units.--For 
     purposes of paragraph (1)(B), beds in a psychiatric or 
     rehabilitation unit of the hospital which is a distinct part 
     of the hospital shall not be counted.
       (C) Types of hospitals that may participate.--Subparagraph 
     (1)(D) shall not be construed to prohibit any of the 
     following from qualifying as a rural community hospital:
       (i) A replacement facility (as defined by the Secretary in 
     regulations in effect on January 1, 2003) with the same 
     service area (as defined by the Secretary in regulations in 
     effect on such date).
       (ii) A facility obtaining a new provider number pursuant to 
     a change of ownership.
       (iii) A facility which has a binding written agreement with 
     an outside, unrelated party for the construction, 
     reconstruction, lease, rental, or financing of a building as 
     of January 1, 2003.
       (D) Inclusion of cahs.--Nothing in this subsection shall be 
     construed as prohibiting a critical access hospital from 
     qualifying as a rural community hospital if the critical 
     access hospital meets the conditions otherwise applicable to 
     hospitals under section 1861(e) of the Social Security Act 
     (42 U.S.C. 1395x(e)) and section 1866 of such Act (42 U.S.C. 
     1395cc).
       (2) Qualified rch-based home health agency defined.--The 
     term ``qualified RCH-based home health agency'' is a home 
     health agency that is a provider-based entity (as defined in 
     section 404 of the Medicare, Medicaid, and SCHIP Benefits 
     Improvement and Protection Act of 2000 (Public Law 106-554; 
     Appendix F, 114 Stat. 2763A-506)) of a rural community 
     hospital that is located--
       (A) in a county in which no main or branch office of 
     another home health agency is located; or
       (B) at least 35 miles from any main or branch office of 
     another home health agency.

     SEC. __. CRITICAL ACCESS HOSPITAL IMPROVEMENT DEMONSTRATION 
                   PROGRAM.

       (a) Establishment of Critical Access Hospital Demonstration 
     Program.--
       (1) In general.--The Secretary shall establish a 
     demonstration program to test various methods to improve the 
     critical access hospital program under section 1820 of the 
     Social Security Act (42 U.S.C. 1395i-4).
       (2) Critical access hospital improvement.--In conducting 
     the demonstration program under this section, the Secretary 
     shall apply rules with respect to critical access hospitals 
     participating in the program as follows:
       (A) Exclusion of certain beds from bed count.--In 
     determining the number of beds of a facility for purposes of 
     applying the bed limitations referred to in subsections 
     (c)(2)(B)(iii) and (f) of section 1820 of the Social Security 
     Act (42 U.S.C. 1395i-4), the Secretary shall not take into 
     account any bed of a distinct part psychiatric or 
     rehabilitation unit (described in the matter following clause 
     (v) of section 1886(d)(1)(B) of such Act (42 U.S.C. 
     1395ww(d)(1)(B))) of the facility, except that the total 
     number of beds that are not taken into account pursuant to 
     this subparagraph with respect to a facility shall not exceed 
     10.
       (B) Exclusion from home health pps.--Notwithstanding 
     section 1895 of the Social Security Act (42 U.S.C. 1395fff), 
     in determining payments under the demonstration program for 
     home health services furnished by a home health agency that 
     is owned and operated by a critical access hospital 
     participating in the demonstration program--
       (i) the agency may make an election to waive application of 
     the prospective payment system established under such section 
     to such services furnished by the agency; and
       (ii) in the case of such an election, payment shall be made 
     on the basis of the reasonable costs incurred in furnishing 
     such services as determined under section 1861(v), but 
     without regard to the amount of the customary or other 
     charges with respect to such services or the limitations 
     established under paragraph (1)(L) of such section.
       (C) Exemption of cah facilities from pps.--Notwithstanding 
     section 1888(e) of the Social Security Act (42 U.S.C. 
     1395yy(e)), in determining payments under this part for 
     covered skilled nursing facility services furnished by a 
     skilled nursing facility that is a distinct part unit of a 
     critical access hospital participating in the demonstration 
     program or is owned and operated by a critical access 
     hospital participating in the demonstration program--
       (i) the prospective payment system established under such 
     section shall not apply; and
       (ii) payment shall be made on the basis of the reasonable 
     costs incurred in furnishing such services as determined 
     under section 1861(v) of such Act (42 U.S.C. 1395x(v)), but 
     without regard to the amount of the customary or other 
     charges with respect to such services.
       (D) Consolidated billing.--The Secretary shall permit 
     consolidated billing under section 1842(b)(6)(E) of the 
     Social Security Act (42 U.S.C. 1395u(b)(6)(E)).
       (E) Exemption of certain distinct part psychiatric or 
     rehabilitation units from cost limits.--Notwithstanding 
     section 1886(b) of the Social Security Act (42 U.S.C. 
     1395ww(b)), in determining payments under the demonstration 
     program for inpatient hospital services furnished by a 
     distinct part psychiatric or rehabilitation unit (described 
     in the matter following section 1886(d)(1)(B)(v) of such Act 
     (42 U.S.C. 1395ww(d)(1)(B)(v))) of a critical access hospital 
     participating in the demonstration program--
       (i) the limits imposed under the preceding paragraphs of 
     this subsection shall not apply; and
       (ii) payment shall be made on the basis of the reasonable 
     costs incurred in furnishing such services as determined 
     under section 1861(v) of such Act (42 U.S.C. 1395x(v)), but 
     without regard to the amount of the customary or other 
     charges with respect to such services.
       (F) Return on equity.--
       (i) In general.--Notwithstanding subparagraph (P)(i) and 
     (S)(i) of section 1861(v)(1) of the Social Security Act (42 
     U.S.C. 1395x(v)(1)) and section 1886(g)(2) of such Act (42 
     U.S.C. 1395ww(g)(2)), in determining the reasonable costs of 
     the services described in subclause (II) furnished by a 
     critical access hospital participating in the demonstration 
     program for payment of a return on equity capital at a rate 
     of return equal to 150 percent of the average specified in 
     section 1861(v)(1)(P)(i) of such Act (42 U.S.C. 
     1395x(v)(1)(P)(i)).
       (ii) Services described.--The services referred to in 
     subclause (I) are inpatient critical access hospital 
     services, outpatient critical access hospital services, 
     extended care services, posthospital extended care services, 
     home health services, ambulance services, and inpatient 
     hospital services.
       (iii) Disregard of proprietary provider status.--Payment 
     under the demonstration program shall be made without regard 
     to whether a provider is a proprietary provider.

[[Page 16786]]

       (G) Removing barriers to establishment of distinct part 
     units by cah facilities.--Notwithstanding section 
     1886(d)(1)(B) of the Social Security Act (42 U.S.C. 
     1395ww(d)(1)(B)), the Secretary shall permit critical access 
     hospitals participating in the demonstration program to 
     establish distinct part units for purposes of applying such 
     section.
       (3) Participation of cahs.--
       (A) Application.--Each critical access hospital that is 
     located in a demonstration area described in subparagraph (C) 
     that desires to participate in the demonstration program 
     under this section shall submit an application to the 
     Secretary at such time, in such manner, and containing such 
     information as the Secretary may require.
       (B) Participation.--The Secretary shall permit any critical 
     access hospital that is located in a demonstration area 
     described in subparagraph (C), submits an application in 
     accordance with subparagraph (A), and meets the other 
     requirements of this section to participate in the 
     demonstration program.
       (C) Demonstration areas.--There shall be four demonstration 
     areas within this program. Two of these demonstration areas 
     described in this subparagraph shall include Kansas and 
     Nebraska.
       (4) Duration.--The Secretary shall conduct the 
     demonstration program under this section for a 5-year period.
       (5) Implementation.--The Secretary shall implement the 
     demonstration program not later than January 1, 2005, but may 
     not implement the program before October 1, 2004.
       (b) Funding.--
       (1) In general.--The Secretary shall provide for the 
     transfer from the Federal Hospital Insurance Trust Fund under 
     section 1817 of the Social Security Act (42 U.S.C. 1395i) and 
     the Federal Supplementary Insurance Trust Fund established 
     under section 1841 of such Act (42 U.S.C. 1395t), in such 
     proportion as the Secretary determines to be appropriate, of 
     such funds as are necessary for the costs of carrying out the 
     demonstration program under this section.
       (2) Budget neutrality.--In conducting the demonstration 
     program under this section, the Secretary shall ensure that 
     the aggregate payments made by the Secretary do not exceed 
     the amount which the Secretary would have paid if the 
     demonstration program under this section was not implemented.
       (c) Waiver Authority.--The Secretary may waive such 
     requirements of titles XI and XVIII of the Social Security 
     Act (42 U.S.C. 1301 et seq.; 1395 et seq.) as may be 
     necessary for the purpose of carrying out the demonstration 
     program under this section.
       (d) Report.--Not later than 6 months after the completion 
     of the demonstration program under this section, the 
     Secretary shall submit to Congress a report on such program, 
     together with recommendations for such legislation and 
     administrative action as the Secretary determines to be 
     appropriate.
                                 ______
                                 
  SA 1123. Mr. DeWINE submitted an amendment intended to be proposed by 
him to the bill S. 1, to amend title XVIII of the Social Security Act 
to provide for a voluntary prescription drug benefit under the Medicare 
program and to strengthen and improve the Medicare program, and for 
other purposes; which was ordered to lie on the table; as follows:

       At the end of subtitle B of title IV, add the following:

     SEC. __. SENSE OF THE SENATE REGARDING THE PRESERVATION OF 
                   BENEFICIARY CHOICES UNDER MEDICAREADVANTAGE; 
                   ESTABLISHMENT OF STANDARDS.

       (a) Sense of the Senate.--It is the sense of the Senate 
     that medicare beneficiaries should have a choice among 
     multiple types of health plans under the MedicareAdvantage 
     program, including regional preferred provider organizations 
     and local health maintenance organization plans in markets 
     where such plans naturally occur.
       (b) Establishment of Standards.--The Secretary shall 
     establish standards with respect to the participation of 
     private health plans in the MedicareAdvantage program under 
     part C of title XVIII of the Social Security Act (42 U.S.C. 
     1395w-21 et seq.) that--
       (1) encourage fair competition among such plans;
       (2) ensure that beneficiaries who desire to elect health 
     benefits coverage under such a plan are provided with 
     benefits that are actuarially equivalent to the benefits 
     provided under other beneficiary options for health benefits 
     coverage available under the medicare program; and
       (3) equally apply incentives to promote health plan 
     participation to all plans desiring to participate in the 
     MedicareAdvantage program.
                                 ______
                                 
  SA 1124. Mr. ROBERTS submitted an amendment intended to be proposed 
by him to the bill S. 1, to amend title XVIII of the Social Security 
Act to provide for a voluntary prescription drug benefit under the 
Medicare program and to strengthen and improve the Medicare program, 
and for other purposes; which was ordered to lie on the table; as 
follows:

       On page 159, line 19, insert the following before the 
     closing quotation: ``As part of such review, the Commission 
     shall hold 3 field hearings in 2007.''.
                                 ______
                                 
  SA 1125. Mr. HATCH submitted an amendment intended to be proposed by 
him the bill S. 1, to amend title XVIII of the Social Security Act to 
provide for a voluntary prescription drug benefit under the Medicare 
program and to strengthen and improve the Medicare program, and for 
other purposes; which was ordered to lie on the table; as follows:

       Strike title V and insert the following:

    TITLE V--MEDICARE EDUCATION, REGULATORY REFORM, AND CONTRACTING 
                              IMPROVEMENTS

                     Subtitle A--Regulatory Reform

     SEC. 500. SHORT TITLE.

       This title may be cited as the ``Medicare Education, 
     Regulatory Reform, and Contracting Improvement Act of 2003''.

     SEC. 501. COMPLIANCE WITH CHANGES IN REGULATIONS AND 
                   POLICIES.

       (a) No Retroactive Application of Substantive Changes.--
       (1) In general.--Section 1871 (42 U.S.C. 1395hh) is amended 
     by adding at the end the following new subsection:
       ``(d)(1)(A) A substantive change in regulations, manual 
     instructions, interpretative rules, statements of policy, or 
     guidelines of general applicability under this title shall 
     not be applied (by extrapolation or otherwise) retroactively 
     to items and services furnished before the effective date of 
     the change, unless the Secretary determines that--
       ``(i) such retroactive application is necessary to comply 
     with statutory requirements; or
       ``(ii) failure to apply the change retroactively would be 
     contrary to the public interest.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to substantive changes issued on or after the 
     date of the enactment of this Act.
       (b) Timeline for Compliance With Substantive Changes After 
     Notice.--
       (1) In general.--Section 1871(d)(1), as added by subsection 
     (a), is amended by adding at the end the following:
       ``(B) A compliance action may be made against a provider of 
     services, physician, practitioner, or other supplier with 
     respect to noncompliance with such a substantive change only 
     for items and services furnished on or after the effective 
     date of the change.
       ``(C)(i) Except as provided in clause (ii), a substantive 
     change may not take effect until not earlier than the date 
     that is the end of the 30-day period that begins on the date 
     that the Secretary has issued or published, as the case may 
     be, the substantive change.
       ``(ii) The Secretary may provide for a substantive change 
     to take effect on a date that precedes the end of the 30-day 
     period under clause (i) if the Secretary finds that waiver of 
     such 30-day period is necessary to comply with statutory 
     requirements or that the application of such 30-day period is 
     contrary to the public interest. If the Secretary provides 
     for an earlier effective date pursuant to this clause, the 
     Secretary shall include in the issuance or publication of the 
     substantive change a finding described in the first sentence, 
     and a brief statement of the reasons for such finding.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to compliance actions undertaken on or after the 
     date of the enactment of this Act.

     SEC. 502. REPORT ON LEGAL AND REGULATORY INCONSISTENCIES.

       Section 1871 (42 U.S.C. 1395hh), as amended by section 
     501(a)(1), is amended by adding at the end the following new 
     subsection:
       ``(e)(1) Not later than 2 years after the date of the 
     enactment of this subsection, and every 2 years thereafter, 
     the Secretary shall submit to Congress a report with respect 
     to the administration of this title and areas of 
     inconsistency or conflict among the various provisions under 
     law and regulation.
       ``(2) In preparing a report under paragraph (1), the 
     Secretary shall collect--
       ``(A) information from beneficiaries, providers of 
     services, physicians, practitioners, and other suppliers with 
     respect to such areas of inconsistency and conflict; and
       ``(B) information from medicare contractors that tracks the 
     nature of communications and correspondence, including the 
     communications and correspondence required under section 
     1874A.
       ``(3) A report under paragraph (1) shall include a 
     description of efforts by the Secretary to reduce such 
     inconsistency or conflicts, and recommendations for 
     legislation or administrative action that the Secretary 
     determines appropriate to further reduce such inconsistency 
     or conflicts.''.

     SEC. 503. STATUS OF PENDING INTERIM FINAL REGULATIONS.

       Section 1871 (42 U.S.C. 1395hh) as amended by sections 501 
     and 502, is amended by adding at the end the following new 
     subsection:
       ``(f) The Secretary shall publish in the Federal Register 
     at least once every 6 months a

[[Page 16787]]

     list that provides the status of each interim final 
     regulation for which no final regulation has been published. 
     Such list shall include the date by which the Secretary plans 
     to publish the final regulation that is based on the interim 
     final regulation.''.

                   Subtitle B--Appeals Process Reform

     SEC. 511. SUBMISSION OF PLAN FOR TRANSFER OF RESPONSIBILITY 
                   FOR MEDICARE APPEALS.

       (a) Submission of Transition Plan.--
       (1) In general.--Not later than April 1, 2004, the 
     Commissioner of Social Security and the Secretary shall 
     develop and transmit to Congress and the Comptroller General 
     of the United States a plan under which the functions of 
     administrative law judges responsible for hearing cases under 
     title XVIII of the Social Security Act (and related 
     provisions in title XI of such Act) are transferred from the 
     responsibility of the Commissioner and the Social Security 
     Administration to the Secretary and the Department of Health 
     and Human Services.
       (2) Contents.--The plan shall include information on the 
     following:
       (A) Workload.--The number of such administrative law judges 
     and support staff required now and in the future to hear and 
     decide such cases in a timely manner, taking into account the 
     current and anticipated claims volume, appeals, number of 
     beneficiaries, and statutory changes.
       (B) Cost projections and financing.--Funding levels 
     required for fiscal year 2005 and subsequent fiscal years to 
     carry out the functions transferred under the plan and how 
     such transfer should be financed.
       (C) Transition timetable.--A timetable for the transition.
       (D) Regulations.--The establishment of specific regulations 
     to govern the appeals process.
       (E) Case tracking.--The development of a unified case 
     tracking system that will facilitate the maintenance and 
     transfer of case specific data across both the fee-for-
     service and managed care components of the medicare program.
       (F) Feasibility of precedential authority.--The feasibility 
     of developing a process to give decisions of the Departmental 
     Appeals Board in the Department of Health and Human Services 
     addressing broad legal issues binding, precedential 
     authority.
       (G) Access to administrative law judges.--The feasibility 
     of--
       (i) filing appeals with administrative law judges 
     electronically; and
       (ii) conducting hearings using tele- or video-conference 
     technologies.
       (H) Independence of judges.--The steps that should be taken 
     to ensure that judges who perform the administrative law 
     judge functions after the transfer under the plan maintain 
     their independence from the Centers for Medicare & Medicaid 
     Services and its contractors.
       (I) Geographic distribution.--The steps that should be 
     taken to provide for an appropriate geographic distribution 
     of judges performing the administrative law judge functions 
     that are transferred under the plan throughout the United 
     States to ensure timely access to such judges.
       (J) Hiring.--The steps that should be taken to hire judges 
     (and support staff) to perform the administrative law judge 
     functions that are transferred under the plan.
       (K) Performance standards.--The establishment of 
     performance standards for judges performing the 
     administrative law judge functions that are transferred under 
     the plan with respect to timelines for decisions in cases 
     under title XVIII.
       (L) Shared resources.--The feasibility of the Secretary 
     entering into such arrangements with the Commissioner of 
     Social Security as may be appropriate with respect to 
     transferred functions under the plan to share office space, 
     support staff, and other resources, with appropriate 
     reimbursement.
       (M) Training.--The training that should be provided to 
     judges performing the administrative law judge functions that 
     are transferred under the plan with respect to laws and 
     regulations under title XVIII.
       (3) Additional information.--The plan may also include 
     recommendations for further congressional action, including 
     modifications to the requirements and deadlines established 
     under section 1869 of the Social Security Act (as amended by 
     sections 521 and 522 of BIPA (114 Stat. 2763A-534) and this 
     Act).
       (b) GAO Evaluation.--The Comptroller General of the United 
     States shall--
       (1) evaluate the plan submitted under subsection (a); and
       (2) not later than 6 months after such submission, submit 
     to Congress a report on such evaluation.

     SEC. 512. EXPEDITED ACCESS TO JUDICIAL REVIEW.

       (a) In General.--Section 1869(b) (42 U.S.C. 1395ff(b)) is 
     amended--
       (1) in paragraph (1)(A), by inserting ``, subject to 
     paragraph (2),'' before ``to judicial review of the 
     Secretary's final decision''; and
       (2) by adding at the end the following new paragraph:
       ``(2) Expedited access to judicial review.--
       ``(A) In general.--The Secretary shall establish a process 
     under which a provider of services or supplier that furnishes 
     an item or service or a beneficiary who has filed an appeal 
     under paragraph (1) (other than an appeal filed under 
     paragraph (1)(F)(i)) may obtain access to judicial review 
     when a review entity (described in subparagraph (D)), on its 
     own motion or at the request of the appellant, determines 
     that the Departmental Appeals Board does not have the 
     authority to decide the question of law or regulation 
     relevant to the matters in controversy and that there is no 
     material issue of fact in dispute. The appellant may make 
     such request only once with respect to a question of law or 
     regulation for a specific matter in dispute in a case of an 
     appeal.
       ``(B) Prompt determinations.--If, after or coincident with 
     appropriately filing a request for an administrative hearing, 
     the appellant requests a determination by the appropriate 
     review entity that the Departmental Appeals Board does not 
     have the authority to decide the question of law or 
     regulations relevant to the matters in controversy and that 
     there is no material issue of fact in dispute and if such 
     request is accompanied by the documents and materials as the 
     appropriate review entity shall require for purposes of 
     making such determination, such review entity shall make a 
     determination on the request in writing within 60 days after 
     the date such review entity receives the request and such 
     accompanying documents and materials. Such a determination by 
     such review entity shall be considered a final decision and 
     not subject to review by the Secretary.
       ``(C) Access to judicial review.--
       ``(i) In general.--If the appropriate review entity--

       ``(I) determines that there are no material issues of fact 
     in dispute and that the only issue is one of law or 
     regulation that the Departmental Appeals Board does not have 
     authority to decide; or
       ``(II) fails to make such determination within the period 
     provided under subparagraph (B);

     then the appellant may bring a civil action as described in 
     this subparagraph.
       ``(ii) Deadline for filing.--Such action shall be filed, in 
     the case described in--

       ``(I) clause (i)(I), within 60 days of the date of the 
     determination described in such clause; or
       ``(II) clause (i)(II), within 60 days of the end of the 
     period provided under subparagraph (B) for the determination.

       ``(iii) Venue.--Such action shall be brought in the 
     district court of the United States for the judicial district 
     in which the appellant is located (or, in the case of an 
     action brought jointly by more than one applicant, the 
     judicial district in which the greatest number of applicants 
     are located) or in the district court for the District of 
     Columbia.
       ``(iv) Interest on any amounts in controversy.--Where a 
     provider of services or supplier is granted judicial review 
     pursuant to this paragraph, the amount in controversy (if 
     any) shall be subject to annual interest beginning on the 
     first day of the first month beginning after the 60-day 
     period as determined pursuant to clause (ii) and equal to the 
     rate of interest on obligations issued for purchase by the 
     Federal Supplementary Medical Insurance Trust Fund for the 
     month in which the civil action authorized under this 
     paragraph is commenced, to be awarded by the reviewing court 
     in favor of the prevailing party. No interest awarded 
     pursuant to the preceding sentence shall be deemed income or 
     cost for the purposes of determining reimbursement due 
     providers of services, physicians, practitioners, and other 
     suppliers under this Act.
       ``(D) Review entity defined.--For purposes of this 
     subsection, the term `review entity' means an entity of up to 
     3 qualified reviewers drawn from existing appeals levels 
     other than the redetermination level.''.
       (b) Application to Provider Agreement Determinations.--
     Section 1866(h)(1) (42 U.S.C. 1395cc(h)(1)) is amended--
       (1) by inserting ``(A)'' after ``(h)(1)''; and
       (2) by adding at the end the following new subparagraph:
       ``(B) An institution or agency described in subparagraph 
     (A) that has filed for a hearing under subparagraph (A) shall 
     have expedited access to judicial review under this 
     subparagraph in the same manner as providers of services, 
     suppliers, and beneficiaries may obtain expedited access to 
     judicial review under the process established under section 
     1869(b)(2). Nothing in this subparagraph shall be construed 
     to affect the application of any remedy imposed under section 
     1819 during the pendency of an appeal under this 
     subparagraph.''.
       (c) Conforming Amendment.--Section 1869(b)(1)(F)(ii) (42 
     U.S.C. 1395ff(b)(1)(F)(ii)) is amended to read as follows:
       ``(ii) Reference to expedited access to judicial review.--
     For the provision relating to expedited access to judicial 
     review, see paragraph (2).''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to appeals filed on or after October 1, 2004.

     SEC. 513. COST REPORT REFORM.

       (a) Report.--Not later than the date that is 1 year after 
     the date of enactment of this Act, the Secretary shall submit 
     to the Committee on Finance of the Senate and the Committees 
     on Ways and Means and Energy and Commerce of the House of 
     Representatives a report recommending specific ways to 
     modernize the cost reporting system under

[[Page 16788]]

     the medicare program under title XVIII of the Social Security 
     Act (42 U.S.C. 1395 et seq.). Such report shall be consistent 
     with the recommendations of the Secretary's Advisory 
     Committee on Regulatory Reform, including the use of 
     Generally Accepted Accounting Principles.
       (b) Consultation.--In developing the report submitted under 
     subsection (a), the Secretary shall consult with 
     representatives of the hospital industry, the Medicare 
     Payment Advisory Commission, the General Accounting Office, 
     and such other individuals and entities as the Secretary 
     determines to be appropriate.

     SEC. 514. EXPEDITED REVIEW OF CERTAIN PROVIDER AGREEMENT 
                   DETERMINATIONS.

       (a) Termination and Certain Other Immediate Remedies.--
       (1) In general.--The Secretary shall develop and implement 
     a process to expedite proceedings under sections 1866(h) of 
     the Social Security Act (42 U.S.C. 1395cc(h)) in which--
       (A) the remedy of termination of participation has been 
     imposed;
       (B) a sanction described in clause (i) or (iii) of section 
     1819(h)(2)(B) of such Act (42 U.S.C. 1395i-3(h)(2)(B)) has 
     been imposed, but only if such sanction has been imposed on 
     an immediate basis; or
       (C) the Secretary has required a skilled nursing facility 
     to suspend operations of a nurse aide training program.
       (2) Priority for cases of termination.--Under the process 
     described in paragraph (1), priority shall be provided in 
     cases of termination described in subparagraph (A) of such 
     paragraph.
       (b) Increased Financial Support.--In addition to any 
     amounts otherwise appropriated, to reduce by 50 percent the 
     average time for administrative determinations on appeals 
     under section 1866(h) of the Social Security Act (42 U.S.C. 
     1395cc(h)), there are authorized to be appropriated (in 
     appropriate part from the Federal Hospital Insurance Trust 
     Fund and the Federal Supplementary Medical Insurance Trust 
     Fund) to the Secretary such sums for fiscal year 2004 and 
     each subsequent fiscal year as may be necessary to increase 
     the number of administrative law judges (and their staffs) at 
     the Departmental Appeals Board of the Department of Health 
     and Human Services and to educate such judges and staff on 
     long-term care issues.

     SEC. 515. REVISIONS TO MEDICARE APPEALS PROCESS.

       (a) Timeframes for the Completion of the Record.--Section 
     1869(b) (42 U.S.C. 1395ff(b)), as amended by section 
     512(a)(2), is amended by adding at the end the following new 
     paragraph:
       ``(3) Timely completion of the record.--
       ``(A) Deadline.--Subject to subparagraph (B), the deadline 
     to complete the record in a hearing before an administrative 
     law judge or a review by the Departmental Appeals Board is 90 
     days after the date the request for the review or hearing is 
     filed.
       ``(B) Extensions for good cause.--The person filing a 
     request under subparagraph (A) may request an extension of 
     such deadline for good cause. The administrative law judge, 
     in the case of a hearing, and the Departmental Appeals Board, 
     in the case of a review, may extend such deadline based upon 
     a finding of good cause to a date specified by the judge or 
     Board, as the case may be.
       ``(C) Delay in decision deadlines until completion of 
     record.--Notwithstanding any other provision of this section, 
     the deadlines otherwise established under subsection (d) for 
     the making of determinations in hearings or review under this 
     section are 90 days after the date on which the record is 
     complete.
       ``(D) Complete record described.--For purposes of this 
     paragraph, a record is complete when the administrative law 
     judge, in the case of a hearing, or the Departmental Appeals 
     Board, in the case of a review, has received--
       ``(i) written or testimonial evidence, or both, submitted 
     by the person filing the request,
       ``(ii) written or oral argument, or both,
       ``(iii) the decision of, and the record for, the prior 
     level of appeal, and
       ``(iv) such other evidence as such judge or Board, as the 
     case may be, determines is required to make a determination 
     on the request.''.
       (b) Revisions to Appeals Timeframes.--Section 1869 (42 
     U.S.C. 1395ff) is amended--
       (1) in subsection (a)(3)(C)(ii), by striking ``30-day 
     period'' each place it appears and inserting ``60-day 
     period'';
       (2) in subsection (c)(3)(C)(i), by striking ``30-day 
     period'' and inserting ``60-day period'';
       (3) in subsection (d)(1)(A), by striking ``90-day period'' 
     and inserting ``120-day period''; and
       (4) in subsection (d)(2)(A), by striking ``90-day period'' 
     and inserting ``120-day period''.
       (c) Use of Patients' Medical Records.--Section 
     1869(c)(3)(B)(i) (42 U.S.C. 1395ff(c)(3)(B)(i)) is amended by 
     inserting ``(including the medical records of the individual 
     involved)'' after ``clinical experience''.
       (d) Notice Requirements for Medicare Appeals.--
       (1) Initial determinations and redeterminations.--Section 
     1869(a) (42 U.S.C. 1395ff(a)) is amended by adding at the end 
     the following new paragraph:
       ``(4) Requirements of notice of determinations and 
     redeterminations.--A written notice of a determination on an 
     initial determination or on a redetermination, insofar as 
     such determination or redetermination results in a denial of 
     a claim for benefits, shall be provided in printed form and 
     written in a manner to be understood by the beneficiary and 
     shall include--
       ``(A) the reasons for the determination, including, as 
     appropriate--
       ``(i) upon request in the case of an initial determination, 
     the provision of the policy, manual, or regulation that 
     resulted in the denial; and
       ``(ii) upon request, in the case of a redetermination, a 
     summary of the clinical or scientific evidence used in making 
     the determination (as appropriate);
       ``(B) the procedures for obtaining additional information 
     concerning the determination or redetermination; and
       ``(C) notification of the right to seek a redetermination 
     or otherwise appeal the determination and instructions on how 
     to initiate such a redetermination or appeal under this 
     section.''.
       (2) Reconsiderations.--Section 1869(c)(3)(E) (42 U.S.C. 
     1395ff(c)(3)(E)) is amended to read as follows:
       ``(E) Explanation of decision.--Any decision with respect 
     to a reconsideration of a qualified independent contractor 
     shall be in writing in a manner to be understood by the 
     beneficiary and shall include--
       ``(i) to the extent appropriate, an explanation of the 
     decision as well as a discussion of the pertinent facts and 
     applicable regulations applied in making such decision;
       ``(ii) a notification of the right to appeal such 
     determination and instructions on how to initiate such appeal 
     under this section; and
       ``(iii) in the case of a determination of whether an item 
     or service is reasonable and necessary for the diagnosis or 
     treatment of illness or injury (under section 1862(a)(1)(A)) 
     an explanation of the decision.''.
       (3) Appeals.--Section 1869(d) (42 U.S.C. 1395ff(d)) is 
     amended--
       (A) in the heading, by inserting ``; Notice'' after 
     ``Secretary''; and
       (B) by adding at the end the following new paragraph:
       ``(4) Notice.--Notice of the decision of an administrative 
     law judge shall be in writing in a manner to be understood by 
     the beneficiary and shall include--
       ``(A) the specific reasons for the determination; and
       ``(B) notification of the right to appeal the decision and 
     instructions on how to initiate such an appeal under this 
     section.''.
       (4) Preparation of record for appeal.--Section 
     1869(c)(3)(J) (42 U.S.C. 1395ff(c)(3)(J)) is amended by 
     striking ``such information as is required for an appeal'' 
     and inserting ``the record for the appeal''.
       (e) Qualified Independent Contractors.--
       (1) Eligibility requirements of qualified independent 
     contractors.--Section 1869(c) (42 U.S.C. 1395ff(c)) is 
     amended--
       (A) in paragraph (2)--
       (i) by inserting ``(except in the case of a utilization and 
     quality control peer review organization, as defined in 
     section 1152)'' after ``means an entity or organization 
     that''; and
       (ii) by striking the period at the end and inserting the 
     following: ``and meets the following requirements:
       ``(A) General requirements.--
       ``(i) The entity or organization has (directly or through 
     contracts or other arrangements) sufficient medical, legal, 
     and other expertise (including knowledge of the program under 
     this title) and sufficient staffing to carry out duties of a 
     qualified independent contractor under this section on a 
     timely basis.
       ``(ii) The entity or organization has provided assurances 
     that it will conduct activities consistent with the 
     applicable requirements of this section, including that it 
     will not conduct any activities in a case unless the 
     independence requirements of subparagraph (B) are met with 
     respect to the case.
       ``(iii) The entity or organization meets such other 
     requirements as the Secretary provides by regulation.
       ``(B) Independence requirements.--
       ``(i) In general.--Subject to clause (ii), an entity or 
     organization meets the independence requirements of this 
     subparagraph with respect to any case if the entity--

       ``(I) is not a related party (as defined in subsection 
     (g)(5));
       ``(II) does not have a material familial, financial, or 
     professional relationship with such a party in relation to 
     such case; and
       ``(III) does not otherwise have a conflict of interest with 
     such a party (as determined under regulations).

       ``(ii) Exception for compensation.--Nothing in clause (i) 
     shall be construed to prohibit receipt by a qualified 
     independent contractor of compensation from the Secretary for 
     the conduct of activities under this section if the 
     compensation is provided consistent with clause (iii).
       ``(iii) Limitations on entity compensation.--Compensation 
     provided by the Secretary to a qualified independent 
     contractor

[[Page 16789]]

     in connection with reviews under this section shall not be 
     contingent on any decision rendered by the contractor or by 
     any reviewing professional.''; and
       (B) in paragraph (3)(A), by striking ``, and shall have 
     sufficient training and expertise in medical science and 
     legal matters to make reconsiderations under this 
     subsection''.
       (2) Eligibility requirements of reviewers.--Section 1869 
     (42 U.S.C. 1395ff) is amended--
       (A) in subsection (c)(3)(B)(i), by striking ``a panel of 
     physicians or other appropriate health care professionals'' 
     and inserting ``a physician or another appropriate health 
     care professional'';
       (B) by striking subsection (c)(3)(D) and inserting the 
     following:
       ``(D) Qualifications for reviewers.--The requirements of 
     subsection (g) shall be met (relating to qualifications of 
     reviewing professionals).''; and
       (C) by adding at the end the following new subsection:
       ``(g) Qualifications of Reviewers.--
       ``(1) In general.--In reviewing determinations under this 
     section, a qualified independent contractor shall ensure 
     that--
       ``(A) each individual conducting a review shall meet the 
     qualifications of paragraph (2);
       ``(B) compensation provided by the contractor to each such 
     reviewer is consistent with paragraph (3); and
       ``(C) in the case of a review described in subsection 
     (c)(3)(B) and conducted by a physician or another health care 
     professional (each in this subsection referred to as a 
     `reviewing professional'), that the reviewing professional 
     meets the qualifications described in paragraph (4).
       ``(2) Independence.--
       ``(A) In general.--Subject to subparagraph (B), each 
     individual conducting a review in a case shall--
       ``(i) not be a related party (as defined in paragraph (5));
       ``(ii) not have a material familial, financial, or 
     professional relationship with such a party in the case under 
     review; and
       ``(iii) not otherwise have a conflict of interest with such 
     a party (as determined under regulations).
       ``(B) Exception.--Nothing in subparagraph (A) shall be 
     construed to--
       ``(i) prohibit an individual, solely on the basis of 
     affiliation with a fiscal intermediary, carrier, or other 
     contractor, from serving as a reviewing professional if--

       ``(I) a nonaffiliated individual is not reasonably 
     available;
       ``(II) the affiliated individual is not involved in the 
     provision of items or services in the case under review;
       ``(III) the fact of such an affiliation is disclosed to the 
     Secretary and the beneficiary (or authorized representative) 
     and neither party objects; and
       ``(IV) the affiliated individual is not an employee of the 
     intermediary, carrier, or contractor and does not provide 
     services exclusively or primarily to or on behalf of such 
     intermediary, carrier, or contractor;

       ``(ii) prohibit an individual who has staff privileges at 
     the institution where the treatment involved takes place from 
     serving as a reviewer merely on the basis of such affiliation 
     if the affiliation is disclosed to the Secretary and the 
     beneficiary (or authorized representative), and neither party 
     objects; or
       ``(iii) prohibit receipt of compensation by a reviewing 
     professional from a contractor if the compensation is 
     provided consistent with paragraph (3).
       ``(3) Limitations on reviewer compensation.--Compensation 
     provided by a qualified independent contractor to a reviewer 
     in connection with a review under this section shall not be 
     contingent on the decision rendered by the reviewer.
       ``(4) Licensure and expertise.--Each reviewing professional 
     shall be a physician (allopathic or osteopathic) or health 
     care professional who--
       ``(A) is appropriately credentialed or licensed in 1 or 
     more States to deliver health care services; and
       ``(B) has medical expertise in the field of practice that 
     is appropriate for the items or services at issue.
       ``(5) Related party defined.--For purposes of this section, 
     the term `related party' means, with respect to a case under 
     this title involving an individual beneficiary, any of the 
     following:
       ``(A) The Secretary, the medicare administrative contractor 
     involved, or any fiduciary, officer, director, or employee of 
     the Department of Health and Human Services, or of such 
     contractor.
       ``(B) The individual (or authorized representative).
       ``(C) The health care professional that provides the items 
     or services involved in the case.
       ``(D) The institution at which the items or services (or 
     treatment) involved in the case are provided.
       ``(E) The manufacturer of any drug or other item that is 
     included in the items or services involved in the case.
       ``(F) Any other party determined under any regulations to 
     have a substantial interest in the case involved.''.
       (3) Number of qualified independent contractors.--Section 
     1869(c)(4) (42 U.S.C. 1395ff(c)(4)) is amended by striking 
     ``12'' and inserting ``4''.
       (e) Implementation of Certain BIPA Reforms.--
       (1) Delay in certain bipa reforms.--Section 521(d) of BIPA 
     (114 Stat. 2763A-543) is amended to read as follows:
       ``(d) Effective Date.--
       ``(1) In general.--Except as specified in paragraph (2), 
     the amendments made by this section shall apply with respect 
     to initial determinations made on or after January 1, 2005.
       ``(2) Expedited proceedings and reconsideration 
     requirements.--The amendments made by subsection (a) shall 
     apply with respect to initial determinations made on or after 
     October 1, 2003 under the following provisions:
       ``(A) Subsection (b)(1)(F)(i) of section 1869 of the Social 
     Security Act.
       ``(B) Subsection (c)(3)(C)(iii) of such section.
       ``(C) Subsection (c)(3)(C)(iv) of such section to the 
     extent that it applies to expedited reconsiderations under 
     subsection (c)(3)(C)(iii) of such section.
       ``(3) Transitional use of peer review organizations to 
     conduct expedited reconsiderations until qics are 
     operational.--Expedited reconsiderations of initial 
     determinations under section 1869(c)(3)(C)(iii) of the Social 
     Security Act shall be made by peer review organizations until 
     qualified independent contractors are available for such 
     expedited reconsiderations.''.
       (2) Conforming amendment.--Section 521(c) of BIPA (114 
     Stat. 2763A-543) and section 1869(c)(3)(C)(iii)(III) of the 
     Social Security Act (42 U.S.C. 1395ff(c)(3)(C)(iii)(III)), as 
     added by section 521 of BIPA, are repealed.
       (f) Effective Date.--The amendments made by this section 
     shall be effective as if included in the enactment of the 
     respective provisions of subtitle C of title V of BIPA, 114 
     Stat. 2763A-534.
       (g) Transition.--In applying section 1869(g) of the Social 
     Security Act (as added by subsection (d)(2)), any reference 
     to a medicare administrative contractor shall be deemed to 
     include a reference to a fiscal intermediary under section 
     1816 of the Social Security Act (42 U.S.C. 1395h) and a 
     carrier under section 1842 of such Act (42 U.S.C. 1395u).

     SEC. 516. HEARING RIGHTS RELATED TO DECISIONS BY THE 
                   SECRETARY TO DENY OR NOT RENEW A MEDICARE 
                   ENROLLMENT AGREEMENT; CONSULTATION BEFORE 
                   CHANGING PROVIDER ENROLLMENT FORMS.

       (a) Hearing Rights.--
       (1) In general.--Section 1866 (42 U.S.C. 1395cc) is amended 
     by adding at the end the following new subsection:
       ``(j) Hearing Rights in Cases of Denial or Nonrenewal.--The 
     Secretary shall establish by regulation procedures under 
     which--
       ``(1) there are deadlines for actions on applications for 
     enrollment (and, if applicable, renewal of enrollment); and
       ``(2) a provider of services or supplier whose application 
     to enroll (or, if applicable, to renew enrollment) under this 
     title is denied may have a hearing and judicial review of 
     such denial under the procedures that apply under subsection 
     (h)(1)(A) to a provider of services that is dissatisfied with 
     a determination by the Secretary.''.
       (2) Effective date.--The Secretary shall provide for the 
     establishment of the procedures under the amendment made by 
     paragraph (1) within 18 months after the date of the 
     enactment of this Act.
       (b) Consultation Before Changing Provider Enrollment 
     Forms.--Section 1871 (42 U.S.C. 1395hh), as amended by 
     sections 501, 502, and 503, is amended by adding at the end 
     the following new subsection:
       ``(g) The Secretary shall consult with providers of 
     services, physicians, practitioners, and suppliers before 
     making changes in the provider enrollment forms required of 
     such providers, physicians, practitioners, and suppliers to 
     be eligible to submit claims for which payment may be made 
     under this title.''.

     SEC. 517. APPEALS BY PROVIDERS WHEN THERE IS NO OTHER PARTY 
                   AVAILABLE.

       (a) In General.--Section 1870 (42 U.S.C. 1395gg) is amended 
     by adding at the end the following new subsection:
       ``(h) Notwithstanding subsection (f) or any other provision 
     of law, the Secretary shall permit a provider of services, 
     physician, practitioner, or other supplier to appeal any 
     determination of the Secretary under this title relating to 
     services rendered under this title to an individual who 
     subsequently dies if there is no other party available to 
     appeal such determination and the provider of services, 
     physician, practitioner, or other supplier would be 
     prejudiced by the determination.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on the date of the enactment of this Act 
     and shall apply to items and services furnished on or after 
     such date.

     SEC. 518. PROVIDER ACCESS TO REVIEW OF LOCAL COVERAGE 
                   DETERMINATIONS.

       (a) Provider Access To Review of Local Coverage 
     Determinations.--Section 1869(f)(5) (42 U.S.C. 1395ff(f)(5)) 
     is amended to read as follows:
       ``(5) Aggrieved party defined.--In this section, with 
     respect to a national or local coverage determination, the 
     term `aggrieved party' means--

[[Page 16790]]

       ``(A) an individual entitled to benefits under part A, or 
     enrolled under part B, or both, who is in need of the items 
     or services that are the subject of the coverage 
     determination; or
       ``(B) a provider of services, physician, practitioner, or 
     supplier that is adversely affected by such a 
     determination.''.
       (b) Clarification of Local Coverage Determination 
     Definition.--Section 1869(f)(2)(B) (42 U.S.C. 
     1395ff(f)(2)(B)) is amended by inserting ``, including, where 
     appropriate, a clear explanation of the reasons for the 
     denial'' before the period at the end.
       (c) Request for Local Coverage Determinations by 
     Providers.--Section 1869 (42 U.S.C. 1395ff), as amended by 
     section 515(d)(2)(B), is amended by adding at the end the 
     following new subsection:
       ``(h) Request for Local Coverage Determinations by 
     Providers.--
       ``(1) Establishment of process.--The Secretary shall 
     establish a process under which a provider of services, 
     physician, practitioner, or supplier who certifies that they 
     meet the requirements established in paragraph (3) may 
     request a local coverage determination in accordance with the 
     succeeding provisions of this subsection.
       ``(2) Provider local coverage determination request 
     defined.--In this subsection, the term `provider local 
     coverage determination request' means a request, filed with 
     the Secretary, at such time and in such form and manner as 
     the Secretary may specify, that the Secretary, pursuant to 
     paragraph (4)(A), require a fiscal intermediary, carrier, or 
     program safeguard contractor to make or revise a local 
     coverage determination under this section with respect to an 
     item or service.
       ``(3) Request requirements.--Under the process established 
     under paragraph (1), by not later than 30 days after the date 
     on which a provider local coverage determination request is 
     filed under paragraph (1), the Secretary shall determine 
     whether such request establishes that--
       ``(A) there have been at least 5 reversals of 
     redeterminations made by a fiscal intermediary or carrier 
     after a hearing before an administrative law judge on claims 
     submitted by the provider in at least 2 different cases 
     before an administrative law judge;
       ``(B) each reversal described in subparagraph (A) involves 
     substantially similar material facts;
       ``(C) each reversal described in subparagraph (A) involves 
     the same medical necessity issue; and
       ``(D) at least 50 percent of the total number of claims 
     submitted by such provider within the past year involving the 
     substantially similar material facts described in 
     subparagraph (B) and the same medical necessity issue 
     described in subparagraph (C) have been denied and have been 
     reversed by an administrative law judge.
       ``(4) Approval or rejection of request.--
       ``(A) Approval of request.--If the Secretary determines 
     that subparagraphs (A) through (D) of paragraph (3) have been 
     satisfied, the Secretary shall require the fiscal 
     intermediary, carrier, or program safeguard contractor 
     identified in the provider local coverage determination 
     request, to make or revise a local coverage determination 
     with respect to the item or service that is the subject of 
     the request not later than the date that is 210 days after 
     the date on which the Secretary makes the determination. Such 
     fiscal intermediary, carrier, or program safeguard contractor 
     shall retain the discretion to determine whether or not, and/
     or the circumstances under which, to cover the item or 
     service for which a local coverage determination is 
     requested. Nothing in this subsection shall be construed to 
     require a fiscal intermediary, carrier or program safeguard 
     contractor to develop a local coverage determination that is 
     inconsistent with any national coverage determination, or any 
     coverage provision in this title or in regulation, manual, or 
     interpretive guidance of the Secretary.
       ``(B) Rejection of request.--If the Secretary determines 
     that subparagraphs (A) through (D) of paragraph (3) have not 
     been satisfied, the Secretary shall reject the provider local 
     coverage determination request and shall notify the provider 
     of services, physician, practitioner, or supplier that filed 
     the request of the reason for such rejection and no further 
     proceedings in relation to such request shall be 
     conducted.''.
       (d) Study and Report on the Use of Contractors To Monitor 
     Medicare Appeals.--
       (1) Study.--The Secretary of Health and Human Services (in 
     this section referred to as the ``Secretary'') shall conduct 
     a study on the feasibility and advisability of requiring 
     fiscal intermediaries and carriers to monitor and track--
       (A) the subject matter and status of claims denied by the 
     fiscal intermediary or carrier (as applicable) that are 
     appealed under section 1869 of the Social Security Act (42 
     U.S.C. 1395ff), as added by section 522 of BIPA (114 Stat. 
     2763A-543) and amended by this Act; and
       (B) any final determination made with respect to such 
     claims.
       (2) Report.--Not later than the date that is 1 year after 
     the date of the enactment of this Act, the Secretary shall 
     submit to Congress a report on the study conducted under 
     paragraph (1) together with such recommendations for 
     legislation and administrative action as the Commission 
     determines appropriate.
       (e) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     the amendments made by subsections (a), (b), and (c).
       (f) Effective Dates.--
       (1) Provider access to review of local coverage 
     determinations.--The amendments made by subsections (a) and 
     (b) shall apply to--
       (A) any review of any local coverage determination filed on 
     or after January 1, 2004;
       (B) any request to make such a determination made on or 
     after such date; or
       (C) any local coverage determination made on or after such 
     date.
       (2) Provider local coverage determination requests.--The 
     amendment made by subsection (c) shall apply with respect to 
     provider local coverage determination requests (as defined in 
     section 1869(h)(2) of the Social Security Act, as added by 
     subsection (c)) filed on or after the date of the enactment 
     of this Act.

                     Subtitle C--Contracting Reform

     SEC. 521. INCREASED FLEXIBILITY IN MEDICARE ADMINISTRATION.

       (a) Consolidation and Flexibility in Medicare 
     Administration.--
       (1) In general.--Title XVIII is amended by inserting after 
     section 1874 the following new section:


          ``contracts with medicare administrative contractors

       ``Sec. 1874A. (a) Authority.--
       ``(1) Authority to enter into contracts.--The Secretary may 
     enter into contracts with any eligible entity to serve as a 
     medicare administrative contractor with respect to the 
     performance of any or all of the functions described in 
     paragraph (4) or parts of those functions (or, to the extent 
     provided in a contract, to secure performance thereof by 
     other entities).
       ``(2) Eligibility of entities.--An entity is eligible to 
     enter into a contract with respect to the performance of a 
     particular function described in paragraph (4) only if--
       ``(A) the entity has demonstrated capability to carry out 
     such function;
       ``(B) the entity complies with such conflict of interest 
     standards as are generally applicable to Federal acquisition 
     and procurement;
       ``(C) the entity has sufficient assets to financially 
     support the performance of such function; and
       ``(D) the entity meets such other requirements as the 
     Secretary may impose.
       ``(3) Medicare administrative contractor defined.--For 
     purposes of this title and title XI--
       ``(A) In general.--The term `medicare administrative 
     contractor' means an agency, organization, or other person 
     with a contract under this section.
       ``(B) Appropriate medicare administrative contractor.--With 
     respect to the performance of a particular function in 
     relation to an individual entitled to benefits under part A 
     or enrolled under part B, or both, a specific provider of 
     services, physician, practitioner, facility, or supplier (or 
     class of such providers of services, physicians, 
     practitioners, facilities, or suppliers), the `appropriate' 
     medicare administrative contractor is the medicare 
     administrative contractor that has a contract under this 
     section with respect to the performance of that function in 
     relation to that individual, provider of services, physician, 
     practitioner, facility, or supplier or class of provider of 
     services, physician, practitioner, facility, or supplier.
       ``(4) Functions described.--The functions referred to in 
     paragraphs (1) and (2) are payment functions, provider 
     services functions, and beneficiary services functions as 
     follows:
       ``(A) Determination of payment amounts.--Determining 
     (subject to the provisions of section 1878 and to such review 
     by the Secretary as may be provided for by the contracts) the 
     amount of the payments required pursuant to this title to be 
     made to providers of services, physicians, practitioners, 
     facilities, suppliers, and individuals.
       ``(B) Making payments.--Making payments described in 
     subparagraph (A) (including receipt, disbursement, and 
     accounting for funds in making such payments).
       ``(C) Beneficiary education and assistance.--Serving as a 
     center for, and communicating to individuals entitled to 
     benefits under part A or enrolled under part B, or both, with 
     respect to education and outreach for those individuals, and 
     assistance with specific issues, concerns, or problems of 
     those individuals.
       ``(D) Provider consultative services.--Providing 
     consultative services to institutions, agencies, and other 
     persons to enable them to establish and maintain fiscal 
     records necessary for purposes of this title and otherwise to 
     qualify as providers of services, physicians, practitioners, 
     facilities, or suppliers.
       ``(E) Communication with providers.--Serving as a center 
     for, and communicating to providers of services, physicians, 
     practitioners, facilities, and suppliers, any information or 
     instructions furnished to the medicare administrative 
     contractor by the Secretary, and serving as a channel of 
     communication from such providers, physicians,

[[Page 16791]]

     practitioners, facilities, and suppliers to the Secretary.
       ``(F) Provider education and technical assistance.--
     Performing the functions described in subsections (e) and 
     (f), relating to education, training, and technical 
     assistance to providers of services, physicians, 
     practitioners, facilities, and suppliers.
       ``(G) Additional functions.--Performing such other 
     functions, including (subject to paragraph (5)) functions 
     under the Medicare Integrity Program under section 1893, as 
     are necessary to carry out the purposes of this title.
       ``(5) Relationship to mip contracts.--
       ``(A) Nonduplication of activities.--In entering into 
     contracts under this section, the Secretary shall assure that 
     activities of medicare administrative contractors do not 
     duplicate activities carried out under contracts entered into 
     under the Medicare Integrity Program under section 1893. The 
     previous sentence shall not apply with respect to the 
     activity described in section 1893(b)(5) (relating to prior 
     authorization of certain items of durable medical equipment 
     under section 1834(a)(15)).
       ``(B) Construction.--An entity shall not be treated as a 
     medicare administrative contractor merely by reason of having 
     entered into a contract with the Secretary under section 
     1893.
       ``(6) Application of federal acquisition regulation.--
     Except to the extent inconsistent with a specific requirement 
     of this title, the Federal Acquisition Regulation applies to 
     contracts under this title.
       ``(b) Contracting Requirements.--
       ``(1) Use of competitive procedures.--
       ``(A) In general.--Except as provided in laws with general 
     applicability to Federal acquisition and procurement, the 
     Federal Acquisition Regulation, or in subparagraph (B), the 
     Secretary shall use competitive procedures when entering into 
     contracts with medicare administrative contractors under this 
     section.
       ``(B) Renewal of contracts.--The Secretary may renew a 
     contract with a medicare administrative contractor under this 
     section from term to term without regard to section 5 of 
     title 41, United States Code, or any other provision of law 
     requiring competition, if the medicare administrative 
     contractor has met or exceeded the performance requirements 
     applicable with respect to the contract and contractor, 
     except that the Secretary shall provide for the application 
     of competitive procedures, unless laws with general 
     applicability to Federal acquisition and procurement or the 
     Federal Acquisition Regulation authorize the use of other 
     procedures, under such a contract not less frequently than 
     once every 8 years.
       ``(C) Transfer of functions.--The Secretary may transfer 
     functions among medicare administrative contractors without 
     regard to any provision of law requiring competition. The 
     Secretary shall ensure that performance quality is considered 
     in such transfers. The Secretary shall provide notice 
     (whether in the Federal Register or otherwise) of any such 
     transfer (including a description of the functions so 
     transferred and contact information for the contractors 
     involved) to providers of services, physicians, 
     practitioners, facilities, and suppliers affected by the 
     transfer.
       ``(D) Incentives for quality.--The Secretary may provide 
     incentives for medicare administrative contractors to provide 
     quality service and to promote efficiency.
       ``(2) Compliance with requirements.--No contract under this 
     section shall be entered into with any medicare 
     administrative contractor unless the Secretary finds that 
     such medicare administrative contractor will perform its 
     obligations under the contract efficiently and effectively 
     and will meet such requirements as to financial 
     responsibility, legal authority, and other matters as the 
     Secretary finds pertinent.
       ``(3) Performance requirements.--
       ``(A) Development of specific performance requirements.--
     The Secretary shall develop contract performance requirements 
     to carry out the specific requirements applicable under this 
     title to a function described in subsection (a)(4) and shall 
     develop standards for measuring the extent to which a 
     contractor has met such requirements. In developing such 
     performance requirements and standards for measurement, the 
     Secretary shall consult with providers of services, 
     organizations representative of beneficiaries under this 
     title, and organizations and agencies performing functions 
     necessary to carry out the purposes of this section with 
     respect to such performance requirements. The Secretary shall 
     make such performance requirements and measurement standards 
     available to the public.
       ``(B) Considerations.--The Secretary shall include, as one 
     of the standards, provider and beneficiary satisfaction 
     levels.
       ``(C) Inclusion in contracts.--All contractor performance 
     requirements shall be set forth in the contract between the 
     Secretary and the appropriate medicare administrative 
     contractor. Such performance requirements--
       ``(i) shall reflect the performance requirements published 
     under subparagraph (A), but may include additional 
     performance requirements;
       ``(ii) shall be used for evaluating contractor performance 
     under the contract; and
       ``(iii) shall be consistent with the written statement of 
     work provided under the contract.
       ``(4) Information requirements.--The Secretary shall not 
     enter into a contract with a medicare administrative 
     contractor under this section unless the contractor agrees--
       ``(A) to furnish to the Secretary such timely information 
     and reports as the Secretary may find necessary in performing 
     his functions under this title; and
       ``(B) to maintain such records and afford such access 
     thereto as the Secretary finds necessary to assure the 
     correctness and verification of the information and reports 
     under subparagraph (A) and otherwise to carry out the 
     purposes of this title.
       ``(5) Surety bond.--A contract with a medicare 
     administrative contractor under this section may require the 
     medicare administrative contractor, and any of its officers 
     or employees certifying payments or disbursing funds pursuant 
     to the contract, or otherwise participating in carrying out 
     the contract, to give surety bond to the United States in 
     such amount as the Secretary may deem appropriate.
       ``(c) Terms and Conditions.--
       ``(1) In general.--Subject to subsection (a)(6), a contract 
     with any medicare administrative contractor under this 
     section may contain such terms and conditions as the 
     Secretary finds necessary or appropriate and may provide for 
     advances of funds to the medicare administrative contractor 
     for the making of payments by it under subsection (a)(4)(B).
       ``(2) Prohibition on mandates for certain data 
     collection.--The Secretary may not require, as a condition of 
     entering into, or renewing, a contract under this section, 
     that the medicare administrative contractor match data 
     obtained other than in its activities under this title with 
     data used in the administration of this title for purposes of 
     identifying situations in which the provisions of section 
     1862(b) may apply.
       ``(d) Limitation on Liability of Medicare Administrative 
     Contractors and Certain Officers.--
       ``(1) Certifying officer.--No individual designated 
     pursuant to a contract under this section as a certifying 
     officer shall, in the absence of the reckless disregard of 
     the individual's obligations or the intent by that individual 
     to defraud the United States, be liable with respect to any 
     payments certified by the individual under this section.
       ``(2) Disbursing officer.--No disbursing officer shall, in 
     the absence of the reckless disregard of the officer's 
     obligations or the intent by that officer to defraud the 
     United States, be liable with respect to any payment by such 
     officer under this section if it was based upon an 
     authorization (which meets the applicable requirements for 
     such internal controls established by the Comptroller 
     General) of a certifying officer designated as provided in 
     paragraph (1) of this subsection.
       ``(3) Liability of medicare administrative contractor.--No 
     medicare administrative contractor shall be liable to the 
     United States for a payment by a certifying or disbursing 
     officer unless, in connection with such a payment, the 
     medicare administrative contractor acted with reckless 
     disregard of its obligations under its medicare 
     administrative contract or with intent to defraud the United 
     States.
       ``(4) Relationship to false claims act.--Nothing in this 
     subsection shall be construed to limit liability for conduct 
     that would constitute a violation of sections 3729 through 
     3731 of title 31, United States Code (commonly known as the 
     ``False Claims Act'').
       ``(5) Indemnification by secretary.--
       ``(A) In general.--Notwithstanding any other provision of 
     law and subject to the succeeding provisions of this 
     paragraph, in the case of a medicare administrative 
     contractor (or a person who is a director, officer, or 
     employee of such a contractor or who is engaged by the 
     contractor to participate directly in the claims 
     administration process) who is made a party to any judicial 
     or administrative proceeding arising from, or relating 
     directly to, the claims administration process under this 
     title, the Secretary may, to the extent specified in the 
     contract with the contractor, indemnify the contractor (and 
     such persons).
       ``(B) Conditions.--The Secretary may not provide 
     indemnification under subparagraph (A) insofar as the 
     liability for such costs arises directly from conduct that is 
     determined by the Secretary to be criminal in nature, 
     fraudulent, or grossly negligent.
       ``(C) Scope of indemnification.--Indemnification by the 
     Secretary under subparagraph (A) may include payment of 
     judgments, settlements (subject to subparagraph (D)), awards, 
     and costs (including reasonable legal expenses).
       ``(D) Written approval for settlements.--A contractor or 
     other person described in subparagraph (A) may not propose to 
     negotiate a settlement or compromise of a proceeding 
     described in such subparagraph without the prior written 
     approval of the Secretary to negotiate a settlement. Any 
     indemnification under subparagraph (A) with respect to 
     amounts paid under a settlement are conditioned upon the 
     Secretary's prior written approval of the final settlement.

[[Page 16792]]

       ``(E) Construction.--Nothing in this paragraph shall be 
     construed--
       ``(i) to change any common law immunity that may be 
     available to a medicare administrative contractor or person 
     described in subparagraph (A); or
       ``(ii) to permit the payment of costs not otherwise 
     allowable, reasonable, or allocable under the Federal 
     Acquisition Regulations.''.
       (2) Consideration of incorporation of current law 
     standards.--In developing contract performance requirements 
     under section 1874A(b) of the Social Security Act (as added 
     by paragraph (1)) the Secretary shall consider inclusion of 
     the performance standards described in sections 1816(f)(2) of 
     such Act (relating to timely processing of reconsiderations 
     and applications for exemptions) and section 1842(b)(2)(B) of 
     such Act (relating to timely review of determinations and 
     fair hearing requests), as such sections were in effect 
     before the date of the enactment of this Act.
       (b) Conforming Amendments to Section 1816 (Relating to 
     Fiscal Intermediaries).--Section 1816 (42 U.S.C. 1395h) is 
     amended as follows:
       (1) The heading is amended to read as follows:


        ``provisions relating to the administration of part a''.

       (2) Subsection (a) is amended to read as follows:
       ``(a) The administration of this part shall be conducted 
     through contracts with medicare administrative contractors 
     under section 1874A.''.
       (3) Subsection (b) is repealed.
       (4) Subsection (c) is amended--
       (A) by striking paragraph (1); and
       (B) in each of paragraphs (2)(A) and (3)(A), by striking 
     ``agreement under this section'' and inserting ``contract 
     under section 1874A that provides for making payments under 
     this part''.
       (5) Subsections (d) through (i) are repealed.
       (6) Subsections (j) and (k) are each amended--
       (A) by striking ``An agreement with an agency or 
     organization under this section'' and inserting ``A contract 
     with a medicare administrative contractor under section 1874A 
     with respect to the administration of this part''; and
       (B) by striking ``such agency or organization'' and 
     inserting ``such medicare administrative contractor'' each 
     place it appears.
       (7) Subsection (l) is repealed.
       (c) Conforming Amendments to Section 1842 (Relating to 
     Carriers).--Section 1842 (42 U.S.C. 1395u) is amended as 
     follows:
       (1) The heading is amended to read as follows:


        ``provisions relating to the administration of part b''.

       (2) Subsection (a) is amended to read as follows:
       ``(a) The administration of this part shall be conducted 
     through contracts with medicare administrative contractors 
     under section 1874A.''.
       (3) Subsection (b) is amended--
       (A) by striking paragraph (1);
       (B) in paragraph (2)--
       (i) by striking subparagraphs (A) and (B);
       (ii) in subparagraph (C), by striking ``carriers'' and 
     inserting ``medicare administrative contractors''; and
       (iii) by striking subparagraphs (D) and (E);
       (C) in paragraph (3)--
       (i) in the matter before subparagraph (A), by striking 
     ``Each such contract shall provide that the carrier'' and 
     inserting ``The Secretary'';
       (ii) by striking ``will'' the first place it appears in 
     each of subparagraphs (A), (B), (F), (G), (H), and (L) and 
     inserting ``shall'';
       (iii) in subparagraph (B), in the matter before clause (i), 
     by striking ``to the policyholders and subscribers of the 
     carrier'' and inserting ``to the policyholders and 
     subscribers of the medicare administrative contractor'';
       (iv) by striking subparagraphs (C), (D), and (E);
       (v) in subparagraph (H)--

       (I) by striking ``if it makes determinations or payments 
     with respect to physicians' services,''; and
       (II) by striking ``carrier'' and inserting ``medicare 
     administrative contractor'';

       (vi) by striking subparagraph (I);
       (vii) in subparagraph (L), by striking the semicolon and 
     inserting a period;
       (viii) in the first sentence, after subparagraph (L), by 
     striking ``and shall contain'' and all that follows through 
     the period; and
       (ix) in the seventh sentence, by inserting ``medicare 
     administrative contractor,'' after ``carrier,'';
       (D) by striking paragraph (5);
       (E) in paragraph (6)(D)(iv), by striking ``carrier'' and 
     inserting ``medicare administrative contractor''; and
       (F) in paragraph (7), by striking ``the carrier'' and 
     inserting ``the Secretary'' each place it appears.
       (4) Subsection (c) is amended--
       (A) by striking paragraph (1);
       (B) in paragraph (2), by striking ``contract under this 
     section which provides for the disbursement of funds, as 
     described in subsection (a)(1)(B),'' and inserting ``contract 
     under section 1874A that provides for making payments under 
     this part'';
       (C) in paragraph (3)(A), by striking ``subsection 
     (a)(1)(B)'' and inserting ``section 1874A(a)(3)(B)'';
       (D) in paragraph (4), by striking ``carrier'' and inserting 
     ``medicare administrative contractor'';
       (E) in paragraph (5), by striking ``contract under this 
     section which provides for the disbursement of funds, as 
     described in subsection (a)(1)(B), shall require the 
     carrier'' and ``carrier responses'' and inserting ``contract 
     under section 1874A that provides for making payments under 
     this part shall require the medicare administrative 
     contractor'' and ``contractor responses'', respectively; and
       (F) by striking paragraph (6).
       (5) Subsections (d), (e), and (f) are repealed.
       (6) Subsection (g) is amended by striking ``carrier or 
     carriers'' and inserting ``medicare administrative contractor 
     or contractors''.
       (7) Subsection (h) is amended--
       (A) in paragraph (2)--
       (i) by striking ``Each carrier having an agreement with the 
     Secretary under subsection (a)'' and inserting ``The 
     Secretary''; and
       (ii) by striking ``Each such carrier'' and inserting ``The 
     Secretary'';
       (B) in paragraph (3)(A)--
       (i) by striking ``a carrier having an agreement with the 
     Secretary under subsection (a)'' and inserting ``medicare 
     administrative contractor having a contract under section 
     1874A that provides for making payments under this part''; 
     and
       (ii) by striking ``such carrier'' and inserting ``such 
     contractor'';
       (C) in paragraph (3)(B)--
       (i) by striking ``a carrier'' and inserting ``a medicare 
     administrative contractor'' each place it appears; and
       (ii) by striking ``the carrier'' and inserting ``the 
     contractor'' each place it appears; and
       (D) in paragraphs (5)(A) and (5)(B)(iii), by striking 
     ``carriers'' and inserting ``medicare administrative 
     contractors'' each place it appears.
       (8) Subsection (l) is amended--
       (A) in paragraph (1)(A)(iii), by striking ``carrier'' and 
     inserting ``medicare administrative contractor''; and
       (B) in paragraph (2), by striking ``carrier'' and inserting 
     ``medicare administrative contractor''.
       (9) Subsection (p)(3)(A) is amended by striking ``carrier'' 
     and inserting ``medicare administrative contractor''.
       (10) Subsection (q)(1)(A) is amended by striking 
     ``carrier''.
       (d) Effective Date; Transition Rule.--
       (1) Effective date.--
       (A) In general.--Except as otherwise provided in this 
     subsection, the amendments made by this section shall take 
     effect on October 1, 2005, and the Secretary is authorized to 
     take such steps before such date as may be necessary to 
     implement such amendments on a timely basis.
       (B) Construction for current contracts.--Such amendments 
     shall not apply to contracts in effect before the date 
     specified under subparagraph (A) that continue to retain the 
     terms and conditions in effect on such date (except as 
     otherwise provided under this title, other than under this 
     section) until such date as the contract is let out for 
     competitive bidding under such amendments.
       (C) Deadline for competitive bidding.--The Secretary shall 
     provide for the letting by competitive bidding of all 
     contracts for functions of medicare administrative 
     contractors for annual contract periods that begin on or 
     after October 1, 2011.
       (2) General transition rules.--
       (A) Authority to continue to enter into new agreements and 
     contracts and waiver of provider nomination provisions during 
     transition.--Prior to the date specified in paragraph (1)(A), 
     the Secretary may, consistent with subparagraph (B), continue 
     to enter into agreements under section 1816 and contracts 
     under section 1842 of the Social Security Act (42 U.S.C. 
     1395h, 1395u). The Secretary may enter into new agreements 
     under section 1816 during the time period without regard to 
     any of the provider nomination provisions of such section.
       (B) Appropriate transition.--The Secretary shall take such 
     steps as are necessary to provide for an appropriate 
     transition from agreements under section 1816 and contracts 
     under section 1842 of the Social Security Act (42 U.S.C. 
     1395h, 1395u) to contracts under section 1874A, as added by 
     subsection (a)(1).
       (3) Authorizing continuation of mip activities under 
     current contracts and agreements and under transition 
     contracts.--The provisions contained in the exception in 
     section 1893(d)(2) of the Social Security Act (42 U.S.C. 
     1395ddd(d)(2)) shall continue to apply notwithstanding the 
     amendments made by this section, and any reference in such 
     provisions to an agreement or contract shall be deemed to 
     include agreements and contracts entered into pursuant to 
     paragraph (2)(A).
       (e) References.--On and after the effective date provided 
     under subsection (d)(1), any reference to a fiscal 
     intermediary or carrier under title XI or XVIII of the Social 
     Security Act (or any regulation, manual instruction, 
     interpretative rule, statement of policy, or guideline issued 
     to carry out such titles) shall be deemed a reference to an 
     appropriate medicare administrative contractor

[[Page 16793]]

     (as provided under section 1874A of the Social Security Act).
       (f) Secretarial Submission of Legislative Proposal.--Not 
     later than 6 months after the date of the enactment of this 
     Act, the Secretary 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 section.
       (g) Reports on Implementation.--
       (1) Proposal for implementation.--At least 1 year before 
     the date specified in subsection (d)(1)(A), the Secretary 
     shall submit a report to Congress and the Comptroller General 
     of the United States that describes a plan for an appropriate 
     transition. The Comptroller General shall conduct an 
     evaluation of such plan and shall submit to Congress, not 
     later than 6 months after the date the report is received, a 
     report on such evaluation and shall include in such report 
     such recommendations as the Comptroller General deems 
     appropriate.
       (2) Status of implementation.--The Secretary shall submit a 
     report to Congress not later than October 1, 2008, that 
     describes the status of implementation of such amendments and 
     that includes a description of the following:
       (A) The number of contracts that have been competitively 
     bid as of such date.
       (B) The distribution of functions among contracts and 
     contractors.
       (C) A timeline for complete transition to full competition.
       (D) A detailed description of how the Secretary has 
     modified oversight and management of medicare contractors to 
     adapt to full competition.

            Subtitle D--Education and Outreach Improvements

     SEC. 531. PROVIDER EDUCATION AND TECHNICAL ASSISTANCE.

       (a) Coordination of Education Funding.--
       (1) In general.--Title XVIII is amended by inserting after 
     section 1888 the following new section:


             ``provider education and technical assistance

       ``Sec. 1889. (a) Coordination of Education Funding.--The 
     Secretary shall coordinate the educational activities 
     provided through medicare contractors (as defined in 
     subsection (e), including under section 1893) in order to 
     maximize the effectiveness of Federal education efforts for 
     providers of services, physicians, practitioners, and 
     suppliers.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect on the date of the enactment of this Act.
       (b) Incentives To Improve Contractor Performance.--Section 
     1874A, as added by section 521(a)(1), is amended by adding at 
     the end the following new subsection:
       ``(e) Incentives To Improve Contractor Performance in 
     Provider Education and Outreach.--
       ``(1) Methodology to measure contractor error rates.--In 
     order to give medicare contractors (as defined in paragraph 
     (3)) an incentive to implement effective education and 
     outreach programs for providers of services, physicians, 
     practitioners, and suppliers, the Secretary shall develop and 
     implement by October 1, 2004, a methodology to measure the 
     specific claims payment error rates of such contractors in 
     the processing or reviewing of medicare claims.
       ``(2) IG review of methodology.--The Inspector General of 
     the Department of Health and Human Services shall review, and 
     make recommendations to the Secretary, regarding the adequacy 
     of such methodology.
       ``(3) Medicare contractor defined.--For purposes of this 
     subsection, the term `medicare contractor' includes a 
     medicare administrative contractor, a fiscal intermediary 
     with a contract under section 1816, and a carrier with a 
     contract under section 1842.''.
       (c) Improved Provider Education and Training.--
       (1) Increased funding for enhanced education and training 
     through medicare integrity program.--Section 1817(k)(4) (42 
     U.S.C. 1395i(k)(4)) is amended--
       (A) in subparagraph (A), by striking ``subparagraph (B)'' 
     and inserting ``subparagraphs (B) and (C)'';
       (B) in subparagraph (B), by striking ``The amount 
     appropriated'' and inserting ``Subject to subparagraph (C), 
     the amount appropriated''; and
       (C) by adding at the end the following new subparagraph:
       ``(C) Enhanced provider education and training.--
       ``(i) In general.--In addition to the amount appropriated 
     under subparagraph (B), the amount appropriated under 
     subparagraph (A) for a fiscal year (beginning with fiscal 
     year 2004) is increased by $35,000,000.
       ``(ii) Use.--The funds made available under this 
     subparagraph shall be used only to increase the conduct by 
     medicare contractors of education and training of providers 
     of services, physicians, practitioners, and suppliers 
     regarding billing, coding, and other appropriate items and 
     may also be used to improve the accuracy, consistency, and 
     timeliness of contractor responses to written and phone 
     inquiries from providers of services, physicians, 
     practitioners, and suppliers.''.
       (2) Tailoring education and training for small providers or 
     suppliers.--
       (A) In general.--Section 1889, as added by subsection (a), 
     is amended by adding at the end the following new subsection:
       ``(b) Tailoring Education and Training Activities for Small 
     Providers or Suppliers.--
       ``(1) In general.--Insofar as a medicare contractor 
     conducts education and training activities, it shall take 
     into consideration the special needs of small providers of 
     services or suppliers (as defined in paragraph (2)). Such 
     education and training activities for small providers of 
     services and suppliers may include the provision of technical 
     assistance (such as review of billing systems and internal 
     controls to determine program compliance and to suggest more 
     efficient and effective means of achieving such compliance).
       ``(2) Small provider of services or supplier.--In this 
     subsection, the term `small provider of services or supplier' 
     means--
       ``(A) an institutional provider of services with fewer than 
     25 full-time-equivalent employees; or
       ``(B) a physician, practitioner, or supplier with fewer 
     than 10 full-time-equivalent employees.''.
       (B) Effective date.--The amendment made by subparagraph (A) 
     shall take effect on January 1, 2004.
       (d) Additional Provider Education Provisions.--
       (1) In general.--Section 1889, as added by subsection (a) 
     and as amended by subsection (c)(2), is amended by adding at 
     the end the following new subsections:
       ``(c) Encouragement of Participation in Education Program 
     Activities.--A medicare contractor may not use a record of 
     attendance at (or failure to attend) educational activities 
     or other information gathered during an educational program 
     conducted under this section or otherwise by the Secretary to 
     select or track providers of services, physicians, 
     practitioners, or suppliers for the purpose of conducting any 
     type of audit or prepayment review.
       ``(d) Construction.--Nothing in this section or section 
     1893(g) shall be construed as providing for disclosure by a 
     medicare contractor--
       ``(1) of the screens used for identifying claims that will 
     be subject to medical review; or
       ``(2) of information that would compromise pending law 
     enforcement activities or reveal findings of law enforcement-
     related audits.
       ``(e) Definitions.--For purposes of this section and 
     section 1817(k)(4)(C), the term `medicare contractor' 
     includes the following:
       ``(1) A medicare administrative contractor with a contract 
     under section 1874A, a fiscal intermediary with a contract 
     under section 1816, and a carrier with a contract under 
     section 1842.
       ``(2) An eligible entity with a contract under section 
     1893.

     Such term does not include, with respect to activities of a 
     specific provider of services, physician, practitioner, or 
     supplier an entity that has no authority under this title or 
     title XI with respect to such activities and such provider of 
     services, physician, practitioner, or supplier.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect on the date of the enactment of this Act.

     SEC. 532. ACCESS TO AND PROMPT RESPONSES FROM MEDICARE 
                   CONTRACTORS.

       (a) In General.--Section 1874A, as added by section 
     521(a)(1) and as amended by section 531(b)(1), is amended by 
     adding at the end the following new subsection:
       ``(f) Communicating With Beneficiaries and Providers.--
       ``(1) Communication process.--The Secretary shall develop a 
     process for medicare contractors to communicate with 
     beneficiaries and with providers of services, physicians, 
     practitioners, and suppliers under this title.
       ``(2) Response to written inquiries.--Each medicare 
     contractor (as defined in paragraph (5)) shall provide 
     general written responses (which may be through electronic 
     transmission) in a clear, concise, and accurate manner to 
     inquiries by beneficiaries, providers of services, 
     physicians, practitioners, and suppliers concerning the 
     programs under this title within a contractual timeframe 
     established by the Secretary.
       ``(3) Response to toll-free lines.--The Secretary shall 
     ensure that medicare contractors provide a toll-free 
     telephone number at which beneficiaries, providers, 
     physicians, practitioners, and suppliers may obtain 
     information regarding billing, coding, claims, coverage, and 
     other appropriate information under this title.
       ``(4) Monitoring of contractor responses.--
       ``(A) In general.--Each medicare contractor shall, 
     consistent with standards developed by the Secretary under 
     subparagraph (B)--
       ``(i) maintain a system for identifying who provides the 
     information referred to in paragraphs (2) and (3); and
       ``(ii) monitor the accuracy, consistency, and timeliness of 
     the information so provided.
       ``(B) Development of standards.--
       ``(i) In general.--The Secretary shall establish (and 
     publish in the Federal Register)

[[Page 16794]]

     standards regarding the accuracy, consistency, and timeliness 
     of the information provided in response to inquiries under 
     this subsection. Such standards shall be consistent with the 
     performance requirements established under subsection (b)(3).
       ``(ii) Evaluation.--In conducting evaluations of individual 
     medicare contractors, the Secretary shall take into account 
     the results of the monitoring conducted under subparagraph 
     (A) taking into account as performance requirements the 
     standards established under clause (i). The Secretary shall, 
     in consultation with organizations representing providers of 
     services, suppliers, and individuals entitled to benefits 
     under part A or enrolled under part B, or both, establish 
     standards relating to the accuracy, consistency, and 
     timeliness of the information so provided.
       ``(C) Direct monitoring.--Nothing in this paragraph shall 
     be construed as preventing the Secretary from directly 
     monitoring the accuracy, consistency, and timeliness of the 
     information so provided.
       ``(5) Medicare contractor defined.--For purposes of this 
     subsection, the term `medicare contractor' has the meaning 
     given such term in subsection (e)(3).''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect October 1, 2004.
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as may be necessary to carry out 
     section 1874A(f) of the Social Security Act, as added by 
     subsection (a).

     SEC. 533. RELIANCE ON GUIDANCE.

       (a) In General.--Section 1871(d), as added by section 501, 
     is amended by adding at the end the following new paragraph:
       ``(2) If--
       ``(A) a provider of services, physician, practitioner, or 
     other supplier follows written guidance provided--
       ``(i) by the Secretary; or
       ``(ii) by a medicare contractor (as defined in section 
     1889(e) and whether in the form of a written response to a 
     written inquiry under section 1874A(f)(1) or otherwise) 
     acting within the scope of the contractor's contract 
     authority,
     in response to a written inquiry with respect to the 
     furnishing of items or services or the submission of a claim 
     for benefits for such items or services;
       ``(B) the Secretary determines that--
       ``(i) the provider of services, physician, practitioner, or 
     supplier has accurately presented the circumstances relating 
     to such items, services, and claim to the Secretary or the 
     contractor in the written guidance; and
       ``(ii) there is no indication of fraud or abuse committed 
     by the provider of services, physician, practitioner, or 
     supplier against the program under this title; and
       ``(C) the guidance was in error;
     the provider of services, physician, practitioner, or 
     supplier shall not be subject to any penalty or interest 
     under this title (or the provisions of title XI insofar as 
     they relate to this title) relating to the provision of such 
     items or service or such claim if the provider of services, 
     physician, practitioner, or supplier reasonably relied on 
     such guidance. In applying this paragraph with respect to 
     guidance in the form of general responses to frequently asked 
     questions, the Secretary retains authority to determine the 
     extent to which such general responses apply to the 
     particular circumstances of individual claims.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to penalties imposed on or after the date of the 
     enactment of this Act.

     SEC. 534. MEDICARE PROVIDER OMBUDSMAN; MEDICARE BENEFICIARY 
                   OMBUDSMAN.

       (a) Medicare Provider Ombudsman.--Section 1868 (42 U.S.C. 
     1395ee) is amended--
       (1) by adding at the end of the heading the following: ``; 
     medicare provider ombudsman'';
       (2) by inserting ``Practicing Physicians Advisory 
     Council.--(1)'' after ``(a)'';
       (3) in paragraph (1), as so redesignated under paragraph 
     (2), by striking ``in this section'' and inserting ``in this 
     subsection'';
       (4) by redesignating subsections (b) and (c) as paragraphs 
     (2) and (3), respectively; and
       (5) by adding at the end the following new subsection:
       ``(b) Medicare Provider Ombudsman.--By not later than 1 
     year after the date of the enactment of the Medicare 
     Education, Regulatory Reform, and Contracting Improvement Act 
     of 2003, the Secretary shall appoint a Medicare Provider 
     Ombudsman who shall have experience in health care. The 
     Ombudsman shall--
       ``(1) provide assistance, on a confidential basis, to 
     providers of services and suppliers with respect to 
     complaints, grievances, and requests for information 
     concerning the programs under this title (including 
     provisions of title XI insofar as they relate to this title 
     and are not administered by the Office of the Inspector 
     General of the Department of Health and Human Services) and 
     in the resolution of unclear or conflicting guidance given by 
     the Secretary and medicare contractors to such providers of 
     services and suppliers regarding such programs and provisions 
     and requirements under this title and such provisions; and
       ``(2) submit recommendations to the Secretary for 
     improvement in the administration of this title and such 
     provisions, including--
       ``(A) recommendations to respond to recurring patterns of 
     confusion in this title and such provisions (including 
     recommendations regarding suspending imposition of sanctions 
     where there is widespread confusion in program 
     administration);
       ``(B) recommendations to provide for an appropriate and 
     consistent response (including not providing for audits) in 
     cases of self-identified overpayments by providers of 
     services and suppliers; and
       ``(C) recommendations to improve communication between 
     providers, contractors, and the Centers for Medicare & 
     Medicaid Services.
       ``(c) Staff.--The Secretary shall provide appropriate staff 
     to assist in performing the duties described in subsection 
     (b).''.
       (b) Medicare Beneficiary Ombudsman.--Title XVIII is amended 
     by inserting after section 1806 the following new section:


                    ``medicare beneficiary ombudsman

       ``Sec. 1807. (a) In General.--By not later than 1 year 
     after the date of the enactment of the Medicare Education, 
     Regulatory Reform, and Contracting Improvement Act of 2003, 
     the Secretary shall appoint within the Department of Health 
     and Human Services a Medicare Beneficiary Ombudsman 
     (including support staff) who shall have expertise and 
     experience in the fields of health care and advocacy.
       ``(b) Duties.--The Medicare Beneficiary 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 paragraph (1), 
     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, or the Secretary; and
       ``(B) assistance to such beneficiaries with any problems 
     arising from disenrollment from a Medicare+Choice plan under 
     part C; and
       ``(3) submit annual reports to Congress and the Secretary 
     that describe the activities of the Office and that include 
     such recommendations for improvement in the administration of 
     this title as the Ombudsman determines appropriate.''.
       (c) Funding.--There are authorized to be appropriated to 
     the Secretary (in appropriate part from the Federal Hospital 
     Insurance Trust Fund and the Federal Supplementary Medical 
     Insurance Trust Fund) to carry out the provisions of 
     subsection (b) of section 1868 of the Social Security Act 
     (relating to the Medicare Provider Ombudsman), as added by 
     subsection (a)(5) and section 1807 of such Act (relating to 
     the Medicare Beneficiary Ombudsman), as added by subsection 
     (b), such sums as are necessary for fiscal year 2004 and each 
     succeeding fiscal year.
       (d) Use of Central, Toll-Free Number (1-800-MEDICARE).--
     Section 1804(b) (42 U.S.C. 1395b-2(b)) is amended by adding 
     at the end the following: ``By not later than 1 year after 
     the date of the enactment of the Medicare Education, 
     Regulatory Reform, and Contracting Improvement Act of 2003, 
     the Secretary shall provide, through the toll-free number 1-
     800-MEDICARE, for a means by which individuals seeking 
     information about, or assistance with, such programs who 
     phone such toll-free number are transferred (without charge) 
     to appropriate entities for the provision of such information 
     or assistance. Such toll-free number shall be the toll-free 
     number listed for general information and assistance in the 
     annual notice under subsection (a) instead of the listing of 
     numbers of individual contractors.''.

     SEC. 535. BENEFICIARY OUTREACH DEMONSTRATION PROGRAM.

       (a) In General.--The Secretary shall establish a 
     demonstration program (in this section referred to as the 
     ``demonstration program'') under which medicare specialists 
     employed by the Department of Health and Human Services 
     provide advice and assistance to medicare beneficiaries at 
     the location of existing local offices of the Social Security 
     Administration.
       (b) Locations.--
       (1) In general.--The demonstration program shall be 
     conducted in at least 6 offices or areas. Subject to 
     paragraph (2), in selecting such offices and areas, the 
     Secretary shall provide preference for offices with a high 
     volume of visits by medicare beneficiaries.
       (2) Assistance for rural beneficiaries.--The Secretary 
     shall provide for the selection of at least 3 rural areas to 
     participate in the demonstration program. In conducting the 
     demonstration program in such rural areas, the Secretary 
     shall provide for medicare specialists to travel among local 
     offices in a rural area on a scheduled basis.
       (c) Duration.--The demonstration program shall be conducted 
     over a 3-year period.
       (d) Evaluation and Report.--
       (1) Evaluation.--The Secretary shall provide for an 
     evaluation of the demonstration program. Such evaluation 
     shall include an analysis of--

[[Page 16795]]

       (A) utilization of, and beneficiary satisfaction with, the 
     assistance provided under the program; and
       (B) the cost-effectiveness of providing beneficiary 
     assistance through out-stationing medicare specialists at 
     local social security offices.
       (2) Report.--The Secretary shall submit to Congress a 
     report on such evaluation and shall include in such report 
     recommendations regarding the feasibility of permanently out-
     stationing medicare specialists at local social security 
     offices.

          Subtitle E--Review, Recovery, and Enforcement Reform

     SEC. 541. PREPAYMENT REVIEW.

       (a) In General.--Section 1874A, as added by section 
     521(a)(1) and as amended by sections 531(b)(1) and 532(a), is 
     amended by adding at the end the following new subsection:
       ``(g) Conduct of Prepayment Review.--
       ``(1) Standardization of random prepayment review.--A 
     medicare administrative contractor shall conduct random 
     prepayment review only in accordance with a standard protocol 
     for random prepayment audits developed by the Secretary.
       ``(2) Limitations on initiation of nonrandom prepayment 
     review.--A medicare administrative contractor may not 
     initiate nonrandom prepayment review of a provider of 
     services, physician, practitioner, or supplier based on the 
     initial identification by that provider of services, 
     physician, practitioner, or supplier of an improper billing 
     practice unless there is a likelihood of sustained or high 
     level of payment error (as defined by the Secretary).
       ``(3) Termination of nonrandom prepayment review.--The 
     Secretary shall establish protocols or standards relating to 
     the termination, including termination dates, of nonrandom 
     prepayment review. Such regulations may vary such a 
     termination date based upon the differences in the 
     circumstances triggering prepayment review.
       ``(4) Construction.--Nothing in this subsection shall be 
     construed as preventing the denial of payments for claims 
     actually reviewed under a random prepayment review. In the 
     case of a provider of services, physician, practitioner, or 
     supplier with respect to which amounts were previously 
     overpaid, nothing in this subsection shall be construed as 
     limiting the ability of a medicare administrative contractor 
     to request the periodic production of records or supporting 
     documentation for a limited sample of submitted claims to 
     ensure that the previous practice is not continuing.
       ``(5) Random prepayment review defined.--For purposes of 
     this subsection, the term `random prepayment review' means a 
     demand for the production of records or documentation absent 
     cause with respect to a claim.''.
       (b) Effective Date.--
       (1) In general.--Except as provided in this subsection, the 
     amendment made by subsection (a) shall take effect on the 
     date of the enactment of this Act.
       (2) Deadline for promulgation of certain regulations.--The 
     Secretary shall first issue regulations under section 
     1874A(g) of the Social Security Act, as added by subsection 
     (a), by not later than 1 year after the date of the enactment 
     of this Act.
       (3) Application of standard protocols for random prepayment 
     review.--Section 1874A(g)(1) of the Social Security Act, as 
     added by subsection (a), shall apply to random prepayment 
     reviews conducted on or after such date (not later than 1 
     year after the date of the enactment of this Act) as the 
     Secretary shall specify. The Secretary shall develop and 
     publish the standard protocol under such section by not later 
     than 1 year after the date of the enactment of this Act.

     SEC. 542. RECOVERY OF OVERPAYMENTS.

       (a) In General.--Section 1874A, as added by section 
     521(a)(1) and as amended by sections 531(b)(1), 532(a), and 
     541(a), is amended by adding at the end the following new 
     subsection:
       ``(h) Recovery of Overpayments.--
       ``(1) Use of repayment plans.--
       ``(A) In general.--If the repayment, within the period 
     otherwise permitted by a provider of services, physician, 
     practitioner, or other supplier, of an overpayment under this 
     title meets the standards developed under subparagraph (B), 
     subject to subparagraph (C), and the provider, physician, 
     practitioner, or supplier requests the Secretary to enter 
     into a repayment plan with respect to such overpayment, the 
     Secretary shall enter into a plan with the provider, 
     physician, practitioner, or supplier for the offset or 
     repayment (at the election of the provider, physician, 
     practitioner, or supplier) of such overpayment over a period 
     of at least 1 year, but not longer than 3 years. Interest 
     shall accrue on the balance through the period of repayment. 
     The repayment plan shall meet terms and conditions determined 
     to be appropriate by the Secretary.
       ``(B) Development of standards.--The Secretary shall 
     develop standards for the recovery of overpayments. Such 
     standards shall--
       ``(i) include a requirement that the Secretary take into 
     account (and weigh in favor of the use of a repayment plan) 
     the reliance (as described in section 1871(d)(2)) by a 
     provider of services, physician, practitioner, and supplier 
     on guidance when determining whether a repayment plan should 
     be offered; and
       ``(ii) provide for consideration of the financial hardship 
     imposed on a provider of services, physician, practitioner, 
     or supplier in considering such a repayment plan.
     In developing standards with regard to financial hardship 
     with respect to a provider of services, physician, 
     practitioner, or supplier, the Secretary shall take into 
     account the amount of the proposed recovery as a proportion 
     of payments made to that provider, physician, practitioner, 
     or supplier.
       ``(C) Exceptions.--Subparagraph (A) shall not apply if--
       ``(i) the Secretary has reason to suspect that the provider 
     of services, physician, practitioner, or supplier may file 
     for bankruptcy or otherwise cease to do business or 
     discontinue participation in the program under this title; or
       ``(ii) there is an indication of fraud or abuse committed 
     against the program.
       ``(D) Immediate collection if violation of repayment 
     plan.--If a provider of services, physician, practitioner, or 
     supplier fails to make a payment in accordance with a 
     repayment plan under this paragraph, the Secretary may 
     immediately seek to offset or otherwise recover the total 
     balance outstanding (including applicable interest) under the 
     repayment plan.
       ``(E) Relation to no fault provision.--Nothing in this 
     paragraph shall be construed as affecting the application of 
     section 1870(c) (relating to no adjustment in the cases of 
     certain overpayments).
       ``(2) Limitation on recoupment.--
       ``(A) No recoupment until reconsideration exercised.--In 
     the case of a provider of services, physician, practitioner, 
     or supplier that is determined to have received an 
     overpayment under this title and that seeks a reconsideration 
     of such determination by a qualified independent contractor 
     under section 1869(c), the Secretary may not take any action 
     (or authorize any other person, including any medicare 
     contractor, as defined in subparagraph (C)) to recoup the 
     overpayment until the date the decision on the 
     reconsideration has been rendered. If the provisions of 
     section 1869(b)(1) (providing for such a reconsideration by a 
     qualified independent contractor) are not in effect, in 
     applying the previous sentence any reference to such a 
     reconsideration shall be treated as a reference to a 
     redetermination by the fiscal intermediary or carrier 
     involved.
       ``(B) Payment of interest.--
       ``(i) Return of recouped amount with interest in case of 
     reversal.--Insofar as such determination on appeal against 
     the provider of services, physician, practitioner, or 
     supplier is later reversed, the Secretary shall provide for 
     repayment of the amount recouped plus interest for the period 
     in which the amount was recouped.
       ``(ii) Interest in case of affirmation.--Insofar as the 
     determination on such appeal is against the provider of 
     services, physician, practitioner, or supplier, interest on 
     the overpayment shall accrue on and after the date of the 
     original notice of overpayment.
       ``(iii) Rate of interest.--The rate of interest under this 
     subparagraph shall be the rate otherwise applicable under 
     this title in the case of overpayments.
       ``(C) Medicare contractor defined.--For purposes of this 
     subsection, the term `medicare contractor' has the meaning 
     given such term in section 1889(e).
       ``(3) Payment audits.--
       ``(A) Written notice for post-payment audits.--Subject to 
     subparagraph (C), if a medicare contractor decides to conduct 
     a post-payment audit of a provider of services, physician, 
     practitioner, or supplier under this title, the contractor 
     shall provide the provider of services, physician, 
     practitioner, or supplier with written notice (which may be 
     in electronic form) of the intent to conduct such an audit.
       ``(B) Explanation of findings for all audits.--Subject to 
     subparagraph (C), if a medicare contractor audits a provider 
     of services, physician, practitioner, or supplier under this 
     title, the contractor shall--
       ``(i) give the provider of services, physician, 
     practitioner, or supplier a full review and explanation of 
     the findings of the audit in a manner that is understandable 
     to the provider of services, physician, practitioner, or 
     supplier and permits the development of an appropriate 
     corrective action plan;
       ``(ii) inform the provider of services, physician, 
     practitioner, or supplier of the appeal rights under this 
     title as well as consent settlement options (which are at the 
     discretion of the Secretary); and
       ``(iii) give the provider of services, physician, 
     practitioner, or supplier an opportunity to provide 
     additional information to the contractor.
       ``(C) Exception.--Subparagraphs (A) and (B) shall not apply 
     if the provision of notice or findings would compromise 
     pending law enforcement activities, whether civil or 
     criminal, or reveal findings of law enforcement-related 
     audits.
       ``(4) Notice of over-utilization of codes.--The Secretary 
     shall establish, in consultation with organizations 
     representing the classes of providers of services, 
     physicians, practitioners, and suppliers, a process under 
     which the Secretary provides for notice to classes of 
     providers of services, physicians, practitioners, and 
     suppliers served by

[[Page 16796]]

     a medicare contractor in cases in which the contractor has 
     identified that particular billing codes may be over utilized 
     by that class of providers of services, physicians, 
     practitioners, or suppliers under the programs under this 
     title (or provisions of title XI insofar as they relate to 
     such programs).
       ``(5) Standard methodology for probe sampling.--The 
     Secretary shall establish a standard methodology for medicare 
     administrative contractors to use in selecting a sample of 
     claims for review in the case of an abnormal billing pattern.
       ``(6) Consent settlement reforms.--
       ``(A) In general.--The Secretary may use a consent 
     settlement (as defined in subparagraph (D)) to settle a 
     projected overpayment.
       ``(B) Opportunity to submit additional information before 
     consent settlement offer.--Before offering a provider of 
     services, physician, practitioner, or supplier a consent 
     settlement, the Secretary shall--
       ``(i) communicate to the provider of services, physician, 
     practitioner, or supplier in a nonthreatening manner that, 
     based on a review of the medical records requested by the 
     Secretary, a preliminary evaluation of those records 
     indicates that there would be an overpayment; and
       ``(ii) provide for a 45-day period during which the 
     provider of services, physician, practitioner, or supplier 
     may furnish additional information concerning the medical 
     records for the claims that had been reviewed.
       ``(C) Consent settlement offer.--The Secretary shall review 
     any additional information furnished by the provider of 
     services, physician, practitioner, or supplier under 
     subparagraph (B)(ii). Taking into consideration such 
     information, the Secretary shall determine if there still 
     appears to be an overpayment. If so, the Secretary--
       ``(i) shall provide notice of such determination to the 
     provider of services, physician, practitioner, or supplier, 
     including an explanation of the reason for such 
     determination; and
       ``(ii) in order to resolve the overpayment, may offer the 
     provider of services, physician, practitioner, or supplier--

       ``(I) the opportunity for a statistically valid random 
     sample; or
       ``(II) a consent settlement.

     The opportunity provided under clause (ii)(I) does not waive 
     any appeal rights with respect to the alleged overpayment 
     involved.
       ``(D) Consent settlement defined.--For purposes of this 
     paragraph, the term `consent settlement' means an agreement 
     between the Secretary and a provider of services, physician, 
     practitioner, or supplier whereby both parties agree to 
     settle a projected overpayment based on less than a 
     statistically valid sample of claims and the provider of 
     services, physician, practitioner, or supplier agrees not to 
     appeal the claims involved.''.
       (b) Effective Dates and Deadlines.--
       (1) Not later than 1 year after the date of the enactment 
     of this Act, the Secretary shall first--
       (A) develop standards for the recovery of overpayments 
     under section 1874A(h)(1)(B) of the Social Security Act, as 
     added by subsection (a);
       (B) establish the process for notice of overutilization of 
     billing codes under section 1874A(h)(4) of the Social 
     Security Act, as added by subsection (a); and
       (C) establish a standard methodology for selection of 
     sample claims for abnormal billing patterns under section 
     1874A(h)(5) of the Social Security Act, as added by 
     subsection (a).
       (2) Section 1874A(h)(2) of the Social Security Act, as 
     added by subsection (a), shall apply to actions taken after 
     the date that is 1 year after the date of the enactment of 
     this Act.
       (3) Section 1874A(h)(3) of the Social Security Act, as 
     added by subsection (a), shall apply to audits initiated 
     after the date of the enactment of this Act.
       (4) Section 1874A(h)(6) of the Social Security Act, as 
     added by subsection (a), shall apply to consent settlements 
     entered into after the date of the enactment of this Act.

     SEC. 543. PROCESS FOR CORRECTION OF MINOR ERRORS AND 
                   OMISSIONS ON CLAIMS WITHOUT PURSUING APPEALS 
                   PROCESS.

       (a) In General.--The Secretary shall develop, in 
     consultation with appropriate medicare contractors (as 
     defined in section 1889(e) of the Social Security Act, as 
     added by section 531(d)(1)) and representatives of providers 
     of services, physicians, practitioners, facilities, and 
     suppliers, a process whereby, in the case of minor errors or 
     omissions (as defined by the Secretary) that are detected in 
     the submission of claims under the programs under title XVIII 
     of such Act, a provider of services, physician, practitioner, 
     facility, or supplier is given an opportunity to correct such 
     an error or omission without the need to initiate an appeal. 
     Such process shall include the ability to resubmit corrected 
     claims.
       (b) Deadline.--Not later than 1 year after the date of the 
     enactment of this Act, the Secretary shall first develop the 
     process under subsection (a).

     SEC. 544. AUTHORITY TO WAIVE A PROGRAM EXCLUSION.

       The first sentence of section 1128(c)(3)(B) (42 U.S.C. 
     1320a-7(c)(3)(B)) is amended to read as follows: ``Subject to 
     subparagraph (G), in the case of an exclusion under 
     subsection (a), the minimum period of exclusion shall be not 
     less than 5 years, except that, upon the request of an 
     administrator of a Federal health care program (as defined in 
     section 1128B(f)) who determines that the exclusion would 
     impose a hardship on beneficiaries of that program, the 
     Secretary may waive the exclusion under subsection (a)(1), 
     (a)(3), or (a)(4) with respect to that program in the case of 
     an individual or entity that is the sole community physician 
     or sole source of essential specialized services in a 
     community.

     SEC. 545. RECOVERY OF OVERPAYMENTS.

       (a) In General.--Section 1893 (42 U.S.C. 1395ddd) is 
     amended by adding at the end the following new subsection:
       ``(f) Limitation on Use of Extrapolation.--A medicare 
     contractor may not use extrapolation to determine overpayment 
     amounts to be recovered by recoupment, offset, or otherwise 
     unless--
       ``(1) there is a sustained or high level of payment error 
     (as defined by the Secretary by regulation); or
       ``(2) documented educational intervention has failed to 
     correct the payment error (as determined by the 
     Secretary).''.
       (b) Effective Date.--Section 1893(f) of the Social Security 
     Act, as added by subsection (a), shall apply to statistically 
     valid random samples initiated after the date that is 1 year 
     after the date of the enactment of this Act.

                     Subtitle F--Other Improvements

     SEC. 551. INCLUSION OF ADDITIONAL INFORMATION IN NOTICES TO 
                   BENEFICIARIES ABOUT SKILLED NURSING FACILITY 
                   AND HOSPITAL BENEFITS.

       (a) In General.--The Secretary shall provide that in 
     medicare beneficiary notices provided (under section 1806(a) 
     of the Social Security Act, 42 U.S.C. 1395b-7(a)) with 
     respect to the provision of post-hospital extended care 
     services and inpatient hospital services under part A of 
     title XVIII of the Social Security Act, there shall be 
     included information on the number of days of coverage of 
     such services remaining under such part for the medicare 
     beneficiary and spell of illness involved.
       (b) Effective Date.--Subsection (a) shall apply to notices 
     provided during calendar quarters beginning more than 6 
     months after the date of the enactment of this Act.

     SEC. 552. INFORMATION ON MEDICARE-CERTIFIED SKILLED NURSING 
                   FACILITIES IN HOSPITAL DISCHARGE PLANS.

       (a) Availability of Data.--The Secretary shall publicly 
     provide information that enables hospital discharge planners, 
     medicare beneficiaries, and the public to identify skilled 
     nursing facilities that are participating in the medicare 
     program.
       (b) Inclusion of Information in Certain Hospital Discharge 
     Plans.--
       (1) In general.--Section 1861(ee)(2)(D) (42 U.S.C. 
     1395x(ee)(2)(D)) is amended--
       (A) by striking ``hospice services'' and inserting 
     ``hospice care and post-hospital extended care services''; 
     and
       (B) by inserting before the period at the end the 
     following: ``and, in the case of individuals who are likely 
     to need post-hospital extended care services, the 
     availability of such services through facilities that 
     participate in the program under this title and that serve 
     the area in which the patient resides''.
       (2) Effective date.--The amendments made by paragraph (1) 
     shall apply to discharge plans made on or after such date as 
     the Secretary shall specify, but not later than 6 months 
     after the date the Secretary provides for availability of 
     information under subsection (a).

     SEC. 553. EVALUATION AND MANAGEMENT DOCUMENTATION GUIDELINES 
                   CONSIDERATION.

       The Secretary shall ensure, before making changes in 
     documentation guidelines for, or clinical examples of, or 
     codes to report evaluation and management physician services 
     under title XVIII of Social Security Act, that the process 
     used in developing such guidelines, examples, or codes was 
     widely consultative among physicians, reflects a broad 
     consensus among specialties, and would allow verification of 
     reported and furnished services.

     SEC. 554. IMPROVEMENT IN OVERSIGHT OF TECHNOLOGY AND 
                   COVERAGE.

       (a) Council for Technology and Innovation.--Section 1868 
     (42 U.S.C. 1395ee), as amended by section 301(a), is amended 
     by adding at the end the following new subsection:
       ``(c) Council for Technology and Innovation.--
       ``(1) Establishment.--The Secretary shall establish a 
     Council for Technology and Innovation within the Centers for 
     Medicare & Medicaid Services (in this section referred to as 
     `CMS').
       ``(2) Composition.--The Council shall be composed of senior 
     CMS staff and clinicians and shall be chaired by the 
     Executive Coordinator for Technology and Innovation 
     (appointed or designated under paragraph (4)).
       ``(3) Duties.--The Council shall coordinate the activities 
     of coverage, coding, and payment processes under this title 
     with respect to new technologies and procedures, including 
     new drug therapies, and shall coordinate the exchange of 
     information on new technologies between CMS and other 
     entities that make similar decisions.

[[Page 16797]]

       ``(4) Executive coordinator for technology and 
     innovation.--The Secretary shall appoint (or designate) a 
     noncareer appointee (as defined in section 3132(a)(7) of 
     title 5, United States Code) who shall serve as the Executive 
     Coordinator for Technology and Innovation. Such executive 
     coordinator shall report to the Administrator of CMS, shall 
     chair the Council, shall oversee the execution of its duties, 
     and shall serve as a single point of contact for outside 
     groups and entities regarding the coverage, coding, and 
     payment processes under this title.''.
       (b) Methods for Determining Payment Basis for New Lab 
     Tests.--Section 1833(h) (42 U.S.C. 1395l(h)) is amended by 
     adding at the end the following:
       ``(8)(A) The Secretary shall establish by regulation 
     procedures for determining the basis for, and amount of, 
     payment under this subsection for any clinical diagnostic 
     laboratory test with respect to which a new or substantially 
     revised HCPCS code is assigned on or after January 1, 2005 
     (in this paragraph referred to as `new tests').
       ``(B) Determinations under subparagraph (A) shall be made 
     only after the Secretary--
       ``(i) makes available to the public (through an Internet 
     site and other appropriate mechanisms) a list that includes 
     any such test for which establishment of a payment amount 
     under this subsection is being considered for a year;
       ``(ii) on the same day such list is made available, causes 
     to have published in the Federal Register notice of a meeting 
     to receive comments and recommendations (and data on which 
     recommendations are based) from the public on the appropriate 
     basis under this subsection for establishing payment amounts 
     for the tests on such list;
       ``(iii) not less than 30 days after publication of such 
     notice convenes a meeting, that includes representatives of 
     officials of the Centers for Medicare & Medicaid Services 
     involved in determining payment amounts, to receive such 
     comments and recommendations (and data on which the 
     recommendations are based);
       ``(iv) taking into account the comments and recommendations 
     (and accompanying data) received at such meeting, develops 
     and makes available to the public (through an Internet site 
     and other appropriate mechanisms) a list of proposed 
     determinations with respect to the appropriate basis for 
     establishing a payment amount under this subsection for each 
     such code, together with an explanation of the reasons for 
     each such determination, the data on which the determinations 
     are based, and a request for public written comments on the 
     proposed determination; and
       ``(v) taking into account the comments received during the 
     public comment period, develops and makes available to the 
     public (through an Internet site and other appropriate 
     mechanisms) a list of final determinations of the payment 
     amounts for such tests under this subsection, together with 
     the rationale for each such determination, the data on which 
     the determinations are based, and responses to comments and 
     suggestions received from the public.
       ``(C) Under the procedures established pursuant to 
     subparagraph (A), the Secretary shall--
       ``(i) set forth the criteria for making determinations 
     under subparagraph (A); and
       ``(ii) make available to the public the data (other than 
     proprietary data) considered in making such determinations.
       ``(D) The Secretary may convene such further public 
     meetings to receive public comments on payment amounts for 
     new tests under this subsection as the Secretary deems 
     appropriate.
       ``(E) For purposes of this paragraph:
       ``(i) The term `HCPCS' refers to the Health Care Procedure 
     Coding System.
       ``(ii) A code shall be considered to be `substantially 
     revised' if there is a substantive change to the definition 
     of the test or procedure to which the code applies (such as a 
     new analyte or a new methodology for measuring an existing 
     analyte-specific test).''.
       (c) GAO Study on Improvements in External Data Collection 
     for Use in the Medicare Inpatient Payment System.--
       (1) Study.--The Comptroller General of the United States 
     shall conduct a study that analyzes which external data can 
     be collected in a shorter time frame by the Centers for 
     Medicare & Medicaid Services for use in computing payments 
     for inpatient hospital services. The study may include an 
     evaluation of the feasibility and appropriateness of using of 
     quarterly samples or special surveys or any other methods. 
     The study shall include an analysis of whether other 
     executive agencies, such as the Bureau of Labor Statistics in 
     the Department of Commerce, are best suited to collect this 
     information.
       (2) Report.--By not later than October 1, 2004, the 
     Comptroller General shall submit a report to Congress on the 
     study under paragraph (1).

     SEC. 555. TREATMENT OF HOSPITALS FOR CERTAIN SERVICES UNDER 
                   MEDICARE SECONDARY PAYOR (MSP) PROVISIONS.

       (a) In General.--The Secretary shall not require a hospital 
     (including a critical access hospital) to ask questions (or 
     obtain information) relating to the application of section 
     1862(b) of the Social Security Act (relating to medicare 
     secondary payor provisions) in the case of reference 
     laboratory services described in subsection (b), if the 
     Secretary does not impose such requirement in the case of 
     such services furnished by an independent laboratory.
       (b) Reference Laboratory Services Described.--Reference 
     laboratory services described in this subsection are clinical 
     laboratory diagnostic tests (or the interpretation of such 
     tests, or both) furnished without a face-to-face encounter 
     between the individual entitled to benefits under part A or 
     enrolled under part B, or both, and the hospital involved and 
     in which the hospital submits a claim only for such test or 
     interpretation.

     SEC. 556. EMTALA IMPROVEMENTS.

       (a) Payment for EMTALA-Mandated Screening and Stabilization 
     Services.--
       (1) In general.--Section 1862 (42 U.S.C. 1395y) is amended 
     by inserting after subsection (c) the following new 
     subsection:
       ``(d) For purposes of subsection (a)(1)(A), in the case of 
     any item or service that is required to be provided pursuant 
     to section 1867 to an individual who is entitled to benefits 
     under this title, determinations as to whether the item or 
     service is reasonable and necessary shall be made on the 
     basis of the information available to the treating physician 
     or practitioner (including the patient's presenting symptoms 
     or complaint) at the time the item or service was ordered or 
     furnished by the physician or practitioner (and not on the 
     patient's principal diagnosis). When making such 
     determinations with respect to such an item or service, the 
     Secretary shall not consider the frequency with which the 
     item or service was provided to the patient before or after 
     the time of the admission or visit.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall apply to items and services furnished on or after 
     January 1, 2004.
       (b) Notification of Providers When EMTALA Investigation 
     Closed.--Section 1867(d) (42 U.S.C. 42 U.S.C. 1395dd(d)) is 
     amended by adding at the end the following new paragraph:
       ``(4) Notice upon closing an investigation.--The Secretary 
     shall establish a procedure to notify hospitals and 
     physicians when an investigation under this section is 
     closed.''.
       (c) Prior Review by Peer Review Organizations in EMTALA 
     Cases Involving Termination of Participation.--
       (1) In general.--Section 1867(d)(3) (42 U.S.C. 
     1395dd(d)(3)) is amended--
       (A) in the first sentence, by inserting ``or in terminating 
     a hospital's participation under this title'' after ``in 
     imposing sanctions under paragraph (1)''; and
       (B) by adding at the end the following new sentences: 
     ``Except in the case in which a delay would jeopardize the 
     health or safety of individuals, the Secretary shall also 
     request such a review before making a compliance 
     determination as part of the process of terminating a 
     hospital's participation under this title for violations 
     related to the appropriateness of a medical screening 
     examination, stabilizing treatment, or an appropriate 
     transfer as required by this section, and shall provide a 
     period of 5 days for such review. The Secretary shall provide 
     a copy of the organization's report to the hospital or 
     physician consistent with confidentiality requirements 
     imposed on the organization under such part B.''.
       (2) Effective date.--The amendments made by paragraph (1) 
     shall apply to terminations of participation initiated on or 
     after the date of the enactment of this Act.

     SEC. 557. EMERGENCY MEDICAL TREATMENT AND ACTIVE LABOR ACT 
                   (EMTALA) TECHNICAL ADVISORY GROUP.

       (a) Establishment.--The Secretary shall establish a 
     Technical Advisory Group (in this section referred to as the 
     ``Advisory Group'') to review issues related to the Emergency 
     Medical Treatment and Labor Act (EMTALA) and its 
     implementation. In this section, the term ``EMTALA'' refers 
     to the provisions of section 1867 of the Social Security Act 
     (42 U.S.C. 1395dd).
       (b) Membership.--The Advisory Group shall be composed of 19 
     members, including the Administrator of the Centers for 
     Medicare & Medicaid Services and the Inspector General of the 
     Department of Health and Human Services and of which--
       (1) 4 shall be representatives of hospitals, including at 
     least one public hospital, that have experience with the 
     application of EMTALA and at least 2 of which have not been 
     cited for EMTALA violations;
       (2) 7 shall be practicing physicians drawn from the fields 
     of emergency medicine, cardiology or cardiothoracic surgery, 
     orthopedic surgery, neurosurgery, pediatrics or a pediatric 
     subspecialty, obstetrics-gynecology, and psychiatry, with not 
     more than one physician from any particular field;
       (3) 2 shall represent patients;
       (4) 2 shall be staff involved in EMTALA investigations from 
     different regional offices of the Centers for Medicare & 
     Medicaid Services; and
       (5) 1 shall be from a State survey office involved in 
     EMTALA investigations and 1 shall be from a peer review 
     organization, both of whom shall be from areas other than the 
     regions represented under paragraph (4).


[[Page 16798]]


     In selecting members described in paragraphs (1) through (3), 
     the Secretary shall consider qualified individuals nominated 
     by organizations representing providers and patients.
       (c) General Responsibilities.--The Advisory Group--
       (1) shall review EMTALA regulations;
       (2) may provide advice and recommendations to the Secretary 
     with respect to those regulations and their application to 
     hospitals and physicians;
       (3) shall solicit comments and recommendations from 
     hospitals, physicians, and the public regarding the 
     implementation of such regulations; and
       (4) may disseminate information on the application of such 
     regulations to hospitals, physicians, and the public.
       (d) Administrative Matters.--
       (1) Chairperson.--The members of the Advisory Group shall 
     elect a member to serve as chairperson of the Advisory Group 
     for the life of the Advisory Group.
       (2) Meetings.--The Advisory Group shall first meet at the 
     direction of the Secretary. The Advisory Group shall then 
     meet twice per year and at such other times as the Advisory 
     Group may provide.
       (e) Termination.--The Advisory Group shall terminate 30 
     months after the date of its first meeting.
       (f) Waiver of Administrative Limitation.--The Secretary 
     shall establish the Advisory Group notwithstanding any 
     limitation that may apply to the number of advisory 
     committees that may be established (within the Department of 
     Health and Human Services or otherwise).

     SEC. 558. AUTHORIZING USE OF ARRANGEMENTS TO PROVIDE CORE 
                   HOSPICE SERVICES IN CERTAIN CIRCUMSTANCES.

       (a) In General.--Section 1861(dd)(5) (42 U.S.C. 
     1395x(dd)(5)) is amended by adding at the end the following:
       ``(D) In extraordinary, exigent, or other nonroutine 
     circumstances, such as unanticipated periods of high patient 
     loads, staffing shortages due to illness or other events, or 
     temporary travel of a patient outside a hospice program's 
     service area, a hospice program may enter into arrangements 
     with another hospice program for the provision by that other 
     program of services described in paragraph (2)(A)(ii)(I). The 
     provisions of paragraph (2)(A)(ii)(II) shall apply with 
     respect to the services provided under such arrangements.
       ``(E) A hospice program may provide services described in 
     paragraph (1)(A) other than directly by the program if the 
     services are highly specialized services provided by or under 
     the supervision of a registered professional nurse and are 
     provided nonroutinely and so infrequently so that the 
     provision of such services directly would be impracticable 
     and prohibitively expensive.''.
       (b) Conforming Payment Provision.--Section 1814(i) (42 
     U.S.C. 1395f(i)) is amended by adding at the end the 
     following new paragraph:
       ``(4) In the case of hospice care provided by a hospice 
     program under arrangements under section 1861(dd)(5)(D) made 
     by another hospice program, the hospice program that made the 
     arrangements shall bill and be paid for the hospice care.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to hospice care provided on or after the date of 
     the enactment of this Act.

     SEC. 559. COVERAGE OF HOSPICE CONSULTATION SERVICES.

       (a) Coverage of Hospice Consultation Services.--Section 
     1812(a) (42 U.S.C. 1395d(a)) is amended--
       (1) by striking ``and'' at the end of paragraph (3);
       (2) by striking the period at the end of paragraph (4) and 
     inserting ``; and''; and
       (3) by inserting after paragraph (4) the following new 
     paragraph:
       ``(5) for individuals who are terminally ill and who have 
     not made an election under subsection (d)(1), services that 
     are furnished by a physician who is either the medical 
     director or an employee of a hospice program and that consist 
     of--
       ``(A) an evaluation of the individual's need for pain and 
     symptom management, including the need for hospice care;
       ``(B) counseling the individual with respect to end-of-life 
     issues, the benefits of hospice care, and care options; and
       ``(C) if appropriate, advising the individual regarding 
     advanced care planning.''.
       (b) Payment.--Section 1814(i) (42 U.S.C. 1395f(i)) is 
     amended by adding at the end the following new paragraph:
       ``(4) The amount paid to a hospice program with respect to 
     the services under section 1812(a)(5) for which payment may 
     be made under part A shall be the amount determined under a 
     fee schedule established by the Secretary.''.
       (c) Conforming Amendment.--Section 1861(dd)(2)(A)(i) (42 
     U.S.C. 1395x(dd)(2)(A)(i)) is amended by inserting before the 
     comma at the end the following: ``and services described in 
     section 1812(a)(5)''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to services provided by a hospice program on or 
     after January 1, 2004.

     SEC. 560. APPLICATION OF OSHA BLOODBORNE PATHOGENS STANDARD 
                   TO CERTAIN HOSPITALS.

       (a) In General.--Section 1866 (42 U.S.C. 1395cc) is 
     amended--
       (1) in subsection (a)(1)--
       (A) in subparagraph (R), by striking ``and'' at the end;
       (B) in subparagraph (S), by striking the period at the end 
     and inserting ``, and''; and
       (C) by inserting after subparagraph (S) the following new 
     subparagraph:
       ``(T) in the case of hospitals that are not otherwise 
     subject to the Occupational Safety and Health Act of 1970 or 
     a State occupational safety and health plan that is approved 
     under section 18(b) of such Act, to comply with the 
     Bloodborne Pathogens standard under section 1910.1030 of 
     title 29 of the Code of Federal Regulations (or as 
     subsequently redesignated).''; and
       (2) by adding at the end of subsection (b) the following 
     new paragraph:
       ``(4)(A) A hospital that fails to comply with the 
     requirement of subsection (a)(1)(T) (relating to the 
     Bloodborne Pathogens standard) is subject to a civil money 
     penalty in an amount described in subparagraph (B), but is 
     not subject to termination of an agreement under this 
     section.
       ``(B) The amount referred to in subparagraph (A) is an 
     amount that is similar to the amount of civil penalties that 
     may be imposed under section 17 of the Occupational Safety 
     and Health Act of 1970 for a violation of the Bloodborne 
     Pathogens standard referred to in subsection (a)(1)(T) by a 
     hospital that is subject to the provisions of such Act.
       ``(C) A civil money penalty under this paragraph shall be 
     imposed and collected in the same manner as civil money 
     penalties under subsection (a) of section 1128A are imposed 
     and collected under that section.''.
       (b) Effective Date.--The amendments made by this subsection 
     (a) shall apply to hospitals as of July 1, 2004.

     SEC. 561. BIPA-RELATED TECHNICAL AMENDMENTS AND CORRECTIONS.

       (a) Technical Amendments Relating to Advisory Committee 
     under BIPA Section 522.--(1) Subsection (i) of section 1114 
     (42 U.S.C. 1314)--
       (A) is transferred to section 1862 and added at the end of 
     such section; and
       (B) is redesignated as subsection (j).
       (2) Section 1862 (42 U.S.C. 1395y) is amended--
       (A) in the last sentence of subsection (a), by striking 
     ``established under section 1114(f)''; and
       (B) in subsection (j), as so transferred and redesignated--
       (i) by striking ``under subsection (f)''; and
       (ii) by striking ``section 1862(a)(1)'' and inserting 
     ``subsection (a)(1)''.
       (b) Terminology Corrections.--(1) Section 1869(c)(3)(I)(ii) 
     (42 U.S.C. 1395ff(c)(3)(I)(ii)), as amended by section 521 of 
     BIPA, is amended--
       (A) in subclause (III), by striking ``policy'' and 
     inserting ``determination''; and
       (B) in subclause (IV), by striking ``medical review 
     policies'' and inserting ``coverage determinations''.
       (2) Section 1852(a)(2)(C) (42 U.S.C. 1395w-22(a)(2)(C)) is 
     amended by striking ``policy'' and ``policy'' and inserting 
     ``determination'' each place it appears and 
     ``determination'', respectively.
       (c) Reference Corrections.--Section 1869(f)(4) (42 U.S.C. 
     1395ff(f)(4)), as added by section 522 of BIPA, is amended--
       (1) in subparagraph (A)(iv), by striking ``subclause (I), 
     (II), or (III)'' and inserting ``clause (i), (ii), or 
     (iii)'';
       (2) in subparagraph (B), by striking ``clause (i)(IV)'' and 
     ``clause (i)(III)'' and inserting ``subparagraph (A)(iv)'' 
     and ``subparagraph (A)(iii)'', respectively; and
       (3) in subparagraph (C), by striking ``clause (i)'', 
     ``subclause (IV)'' and ``subparagraph (A)'' and inserting 
     ``subparagraph (A)'', ``clause (iv)'' and ``paragraph 
     (1)(A)'', respectively each place it appears.
       (d) Other Corrections.--Effective as if included in the 
     enactment of section 521(c) of BIPA, section 1154(e) (42 
     U.S.C. 1320c-3(e)) is amended by striking paragraph (5).
       (e) Effective Date.--Except as otherwise provided, the 
     amendments made by this section shall be effective as if 
     included in the enactment of BIPA.

     SEC. 562. TREATMENT OF CERTAIN DENTAL CLAIMS.

       (a) In General.--Section 1862 (42 U.S.C. 1395y) is amended 
     by adding after subsection (g) the following new subsection:
       ``(h)(1) Subject to paragraph (2), a group health plan (as 
     defined in subsection (a)(1)(A)(v)) providing supplemental or 
     secondary coverage to individuals also entitled to services 
     under this title shall not require a medicare claims 
     determination under this title for dental benefits 
     specifically excluded under subsection (a)(12) as a condition 
     of making a claims determination for such benefits under the 
     group health plan.
       ``(2) A group health plan may require a claims 
     determination under this title in cases involving or 
     appearing to involve inpatient dental hospital services or 
     dental services expressly covered under this title pursuant 
     to actions taken by the Secretary.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on the date that is 60 days after the date 
     of the enactment of this Act.

     SEC. 563. REVISIONS TO REASSIGNMENT PROVISIONS.

       (a) In General.--Section 1842(b)(6)(A)(ii) (42 U.S.C. 
     1395u(b)(6)(A)(ii)) is amended to

[[Page 16799]]

     read as follows: ``(ii) where the service was provided under 
     a contractual arrangement between such physician or other 
     person and a qualified entity (as defined by the Secretary) 
     or other person, to the entity or other person if under such 
     arrangement such entity or individual submits the bill for 
     such service and such arrangement (I) includes joint and 
     several liability for overpayment by such physician or other 
     person and such entity or other person, and (II) meets such 
     other program integrity and other safeguards as the Secretary 
     may determine to be appropriate,''.
       (b) Conforming Amendments.--
       (1) The second sentence of section 1842(b)(6) (42 U.S.C. 
     1395u(b)(6)) is amended by striking ``except to an employer 
     or facility as described in clause (A)'' and inserting 
     ``except to an employer, entity, or other person as described 
     in subparagraph (A)''.
       (2) Section 1842(b)(6) (42 U.S.C. 1395u(b)(6)) is amended 
     by adding at the end the following new sentence: ``Nothing in 
     subparagraph (A)(ii) shall be construed to prohibit 
     requirements for joint and several liability for contractual 
     arrangements where such requirements are not explicitly 
     stated in a statute.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to payments made on or after 1 year after the 
     date of the enactment of this Act.

     SEC. 564. GAO STUDY AND REPORT REGARDING ILLINOIS COUNCIL 
                   DECISION.

       (a) Study.--The Comptroller General of the United States 
     shall conduct a study on the access of health care providers 
     and beneficiaries under the medicare program under title 
     XVIII of the Social Security Act to judicial review of the 
     actions of the Secretary of Health and Human Services and the 
     effects of the decision of the Supreme Court of the United 
     States in Shalala v. Illinois Council on Long Term Care, 
     Inc., 529 U.S. 1 (1999) on such access.
       (a) Report.--Not later than the date that is 1 year after 
     the date of enactment of this Act, the Comptroller General of 
     the United States shall submit to Congress a report on the 
     study conducted under subsection (a) together with 
     recommendations for such legislation or administrative action 
     as the Comptroller General determines to be appropriate.
                                 ______
                                 
  SA 1126. Mrs. DOLE (for herself, and Mr. Edwards) submitteed an 
amendment intended to be proposed by her to the bill S. 1, to amend 
title XVIII of the Social Security Act to provide for a voluntary 
prescription drug benefit under the Medicare program and to strengthen 
and improve the Medicare program, and for other purposes; as follows:

       At the end of subtitle A of title IV, add the following:

     SEC. __. TREATMENT OF CERTAIN ENTITIES FOR PURPOSES OF 
                   PAYMENTS UNDER THE MEDICARE PROGRAM.

       (a) Payments to Hospitals.--
       (1) In general.--Notwithstanding any other provision of 
     law, effective for discharges occurring on or after October 
     1, 2003, for purposes of making payments to hospitals (as 
     defined in section 1886(d) and 1833(t) of the Social Security 
     Act (42 U.S.C. 1395(d)) under the medicare program under 
     title XVIII of such Act (42 U.S.C. 1395 et seq.), Iredell 
     County, North Carolina, and Rowan County, North Carolina, are 
     deemed to be located in the Charlotte-Gastonia-Rock Hill, 
     North Carolina, South Carolina Metropolitan Statistical Area.
       (2) Budget neutral within north carolina.--The Secretary 
     shall adjust the area wage index referred to in paragraph (1) 
     with respect to payments to hospitals located in North 
     Carolina in a manner which assures that the total payments 
     made under section 1886(d) of the Social Security Act (42 
     U.S.C., 1395(ww)(d)) in a fiscal year for the operating cost 
     of inpatient hospital services are not greater or less than 
     the total of such payments that would have been made in the 
     year if this subsection had not been enacted.
       (b) Payments to Skilled Nursing Facilities and Home Health 
     Agencies.--
       (1) In general.--Notwithstanding any other provision of 
     law, effective beginning October 1, 2003, for purposes of 
     making payments to skilled nursing facilities (SNFs) and home 
     health agencies (as defined in sections 1861(j) and 1861(o) 
     of the Social Security Act (42 U.S.C. 1395x(j); 1395x(o)) 
     under the medicare program under title XVIII of such Act, 
     Iredell County, North Carolina, and Rowan County, North 
     Carolina, are deemed to be located in the Charlotte-Gastonia-
     Rock Hill, North Carolina, South Carolina Metropolitan 
     Statistical Area.
       (2) Application and budget neutral within north carolina.--
     Effective for fiscal year 2004, the skilled nursing facility 
     PPS and home health PPS rates for Iredell County, North 
     Carolina, and Rowan County, North Carolina, will be updated 
     by the prefloor, prereclassified hospital wage index 
     available for the Charlotte-Gastonia-Rock Hill, North 
     Carolina, South Carolina Metropolitan Statistical Area. This 
     subsection shall be implemented in a budget neutral manner, 
     using a methodology that ensures that the total amount of 
     expenditures for skilled nursing facility services and home 
     health services in a year does not exceed the total amount of 
     expenditures that would have been made in the year if this 
     subsection had not been enacted. Required adjustments by 
     reason of the preceding sentence shall be done with respect 
     to skilled nursing facilities and home health agencies 
     located in North Carolina.
       (c) Construction.--The provisions of this section shall 
     have no effect on the amount of payments made under title 
     XVIII of the Social Security Act to entities located in 
     States other than North Carolina.
                                 ______
                                 
  SA 1127. Mr. CHAMBLISS submitted an amendment intended to be proposed 
by him to the bill S. 1, to amend title XVIII of the Social Security 
Act to provide for a voluntary prescription drug benefit under the 
Medicare program and to strengthen and improve the Medicare program, 
and for other purposes; which was ordered to lie on the table; as 
follows:

       At the end of subtitle B of title IV, add the following:

     SEC. __. BRACHYTHERAPY DEVICES.

       (a) Specification of Groups for Brachytherapy Devices.--
     Section 1833(t)(2) (42 U.S.C. 1395l(t)(2)) is amended--
       (1) in subparagraph (F), by striking ``and'' at the end;
       (2) in subparagraph (G), by striking the period at the end 
     and inserting ``; and''; and
       (3) by adding at the end the following new subparagraph:
       ``(H) with respect to devices of brachytherapy furnished on 
     or after January 1, 2004, and before January 1, 2007, the 
     Secretary shall create additional groups of covered OPD 
     services that classify such devices separately from the other 
     services (or group of services) paid for under this 
     subsection in a manner reflecting the number of such devices 
     furnished separately for palladium-103 and iodine-125.''.
       (b) GAO Report.--The Comptroller General of the United 
     States shall conduct a study to determine appropriate payment 
     amounts under section 1833(t)(13)(B) of the Social Security 
     Act, as added by subsection (a), for devices of 
     brachytherapy. Not later than January 1, 2005, the 
     Comptroller General shall submit to Congress and the 
     Secretary a report on the study conducted under this 
     subsection, and shall include specific recommendations for 
     appropriate payments for such devices.
                                 ______
                                 
  SA 1128. Mr. SPECTER submitted an amendment intended to be proposed 
by him to the bill S. 1, to amend title XVIII of the Social Security 
Act to provide for a voluntary prescription drug benefit under the 
Medicare program and to strengthen and improve the Medicare program, 
and for other purposes; which was ordered to lie on the table; as 
follows:

       On page 133, after line 25, insert the following:
       ``(3) Coordination with existing state pharmaceutical 
     assistance programs.--
       ``(A) In general.--An eligible entity offering a Medicare 
     Prescription Drug plan, or a MedicareAdvantage organization 
     offering a MedicareAdvantage plan (other than an MSA plan or 
     a private fee-for-service plan that does not provide 
     qualified prescription drug coverage), shall enter into an 
     agreement with each existing State pharmaceutical assistance 
     program to coordinate the coverage provided under the plan 
     with the assistance provided under the existing State 
     pharmaceutical assistance program.
       ``(B) Election.--Under the process established under 
     section 1860D-3(a), an eligible beneficiary who resides in a 
     State with an existing State pharmaceutical assistance 
     program and who is eligible to enroll in such program shall 
     elect to enroll in a Medicare Prescription Drug plan or 
     MedicareAdvantage plan through the existing State 
     pharmaceutical assistance program.
       ``(C) Existing state pharmaceutical assistance program 
     defined.--In this paragraph, the term `existing State 
     pharmaceutical assistance program' means a program that has 
     been established pursuant to a waiver under section 1115 or 
     otherwise before January 1, 2004.
                                 ______
                                 
  SA 1129. Mr. DASCHLE (for Mr. Kerry) submitted an amendment intended 
to be proposed by Mr. Daschle to the bill S. 1, to amend title XVIII of 
the Social Security Act to provide for a voluntary prescription drug 
benefit under the Medicare program and to strengthen and improve the 
Medicare program, and for other purposes; which was ordered to lie on 
the table; as follows:

       At the end of title VI, insert the following:

     SEC. __. SENSE OF THE SENATE REGARDING PARITY OF MENTAL 
                   HEALTH SERVICES UNDER MEDICARE.

       (a) Findings.--The Senate finds the following:
       (1) Beneficiaries of the Medicare program under title XVIII 
     of the Social Security Act pay 50 percent coinsurance for 
     outpatient psychiatric services.

[[Page 16800]]

       (2) In comparison, such beneficiaries pay 20 percent 
     coinsurance for all other medical services.
       (3) There is no scientific or medical justification for 
     this discriminatory inequity.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that Congress should work to achieve parity under the 
     Medicare program under title XVIII of the Social Security Act 
     between mental health services and other medical services as 
     soon as practicable.
                                 ______
                                 
  SA 1130. Mr. ROBERTS submitted an amendment intended to be proposed 
by him to the bill to S. 1, to amend title XVIII of the Social Security 
Act to provide for a voluntary prescription drug benefit under the 
Medicare program and to strengthen and improve the Medicare program, 
and for other purposes; which was ordered to lie on the table, as 
follows:

       At the appropriate place in title II, insert the following:

     SEC. __. STUDY ON TRENDS IN EMPLOYMENT-BASED RETIREE HEALTH 
                   COVERAGE.

       (a) Study.--The Comptroller General of the United States, 
     in consultation with employers, health benefit experts, 
     academia, human resource professionals, State and local 
     government officials, and employer consulting firms, shall 
     conduct a study to determine the effect of the amendments 
     made by this Act on the provision of employment-based retiree 
     health coverage (as such term is defined in section 1860D-
     20(e)(4)(B) of the Social Security Act). Such study shall 
     examine the following:
       (1) Trends in employment-based retiree health coverage, as 
     such trends relate to retirees who are eligible for coverage 
     under the medicare program under title XVIII of the Social 
     Security Act (42 U.S.C. 1395 et seq.).
       (2) The extent to which health care coverage, including 
     coverage under Medicare+Choice, MedicareAdvantage, and fee-
     for-service prescription drug plans under the medicare 
     program, are available to retirees who are eligible for 
     coverage under the medicare program.
       (3) The extent to which geographic location plays a role in 
     the structure and availability of retiree health benefit 
     coverage.
       (4) Whether incentives built into this Act (and the 
     amendments made by this Act) are sufficient to induce 
     employers to maintain employment-based retiree health 
     coverage, and whether other voluntary incentives exist to 
     encourage employers to maintain such coverage.
       (5) Whether obstacles exist to employers providing 
     employment-based retiree health coverage, including 
     administrative burden, the cost of prescription drugs, and 
     the increasing overall health care costs.
       (6) Whether--
       (A) employment-based retiree health coverage has changed 
     because of the implementation of the MedicareAdvantage and 
     medicare fee-for-service programs under the amendments made 
     by this Act;
       (B) such coverage continues to maintain the employment-
     based retiree health benefit packages that were available 
     prior to the implementation of such programs;
       (C) employers conduct health fairs or provide other 
     educational opportunities for their retirees to encourage 
     retirees to obtain coverage under MedicareAdvantage or other 
     prescription drug plans that are available; and
       (D) employers offer retirees financial incentive to obtain 
     coverage under MedicareAdvantage or other prescription drug 
     plans, including premium subsidies.
       (7) Whether the availability of MedicareAdvantage and 
     medicare fee-for-service prescription drug coverage acts as 
     an incentive to employers that did not previously offer 
     employment-based retiree health coverage to offer such 
     coverage to retirees.
       (8) Whether other tools are used by employers to help 
     future employees afford health benefits and prescription drug 
     coverage once such employees reach retirement age.
       (b) Information.--In conducting the study under subsection 
     (a), the Comptroller General shall determine the effect of 
     the amendments made by this Act on the provision of 
     employment-based retiree health coverage using information 
     available for the period--
       (1) beginning on the date of enactment of this Act and 
     ending on January 1, 2005; and
       (2) beginning on January 1, 2006 and ending on January 1, 
     2007.
       (c) Report.--Not later than July 1, 2007, the Comptroller 
     General shall submit to the Secretary and the appropriate 
     committees of Congress a report based on the study conducted 
     under subsection (a).
                                 ______
                                 
  SA 1131. Mr. KYL submitted an amendment intended to be proposed by 
him to the bill S. 1, to amend title XVIII of the Social Security Act 
to provide for a voluntary prescription drug benefit under the Medicare 
program and to strengthen and improve the Medicare program, and for 
other purposes; which was ordered to lie on the table; as follows:

       At the end of subtitle B of title IV, add the following:

     SEC. __. USE OF DATA COLLECTED BY ORGANIZATIONS AND ENTITIES 
                   IN DETERMINING PRACTICE EXPENSE RELATIVE 
                   VALUES.

       (a) In General.--The Secretary shall revise the regulation 
     promulgated under section 212 of the Medicare, Medicaid, and 
     SCHIP Balanced Budget Refinement Act of 1999 (113 Stat. 
     1501A-350) so that, in determining the practice expense 
     component under section 1848(c)(2)(C)(ii) of the Social 
     Security Act (42 U.S.C. 1395w-4(c)(2)(C)(ii)) for purposes of 
     determining relative values for payment for physicians' 
     services under the fee schedule under section 1848 of such 
     Act (42 U.S.C. 1395w-4), the Secretary recognizes all costs 
     of clinical staff employed by cardio-thoracic surgeons (net 
     of any reimbursements for staff for whom there is direct 
     reimbursement under part B of such Act (42 U.S.C. 1395j et 
     seq.)), regardless of the site at which such costs are 
     incurred and notwithstanding any other provision of law or 
     regulation. For purposes of revising such regulation, the 
     Secretary shall use validated data collected by organizations 
     and entities (other than the Department of Health and Human 
     Services) on all costs incurred by physicians, including data 
     from the Socioeconomic Monitoring System of the American 
     Medical Association and from supplemental surveys accepted by 
     the Department of Health and Human Services as consistent 
     with sound data practices prior to the date of enactment of 
     this Act.
       (b) Effective Date.--The regulation revised under 
     subsection (a) shall apply with respect to payments for 
     physicians' services furnished on and after January 1, 2004.
                                 ______
                                 
  SA 1132. Mr. SANTORUM proposed an amendment to the bill S. 1, to 
amend title XVIII of the Social Security Act to provide for a voluntary 
prescription drug benefit under the Medicare program and to strengthen 
and improve the Medicare program and for other purposes; as follows:

       On page 343, between lines 15 and 16, insert the following:
       ``(f) Zero Premium Stop-Loss Protection and Access to 
     Negotiated Prices For Eligible Beneficiaries Enrolled in 
     MedicareAdvantage Plans.--
       ``(1) In general.--Notwithstanding any provision of this 
     part or part D, a MedicareAdvantage plan shall be treated as 
     meeting the requirements of this section if, in lieu of the 
     qualified prescription drug coverage otherwise required, the 
     plan makes available such coverage with the following 
     modifications:
       ``(A) No premium.--Notwithstanding subsection (d) or 
     sections 1860D-13(e)(2) and 1860D-17, the amount of the 
     MedicareAdvantage monthly beneficiary obligation for 
     qualified prescription drug coverage shall be zero.
       ``(B) Beneficiary receives access to negotiated prices and 
     stop-loss protection for no additional premium.--
     Notwithstanding section 1860D-6, qualified prescription drug 
     coverage shall include coverage of covered drugs that meets 
     the following requirements:
       ``(i) The coverage has cost-sharing (for costs up to the 
     annual out-of-pocket limit under subsection (c)(4) of such 
     section) that is equal to 100 percent.
       ``(ii) The coverage provides the limitation on out-of-
     pocket expenditures under such subsection (c)(4), except that 
     in applying such subsection, `$__' shall be substituted for 
     `$3,700' in subparagraph (B)(i)(I) of such subsection.
       ``(iii) The coverage provides access to negotiated prices 
     under subsection (e) of such section during the entire year.
       ``(C) Application of low-income subsidies.--Notwithstanding 
     subsection (f) or section 1860D-19, the Administrator shall 
     not apply the following provisions of subsection (a) of such 
     section:
       ``(i) Subparagraphs (A), (B), (C), and (D) of paragraph 
     (1).
       ``(ii) Subparagraphs (A), (B), (C), and (D) of paragraph 
     (2).
       ``(iii) Clauses (i), (ii), (iii), and (iv) of paragraph 
     (3)(A).
       ``(2) Penalty for enrolling in a zero premium stop-loss 
     protection plans after initial eligibility for such 
     enrollment.--In the case of an eligible beneficiary that 
     enrolled in a plan offered pursuant to this subsection at any 
     time after the initial enrollment period described in section 
     1860D-2, the Secretary shall establish procedures for 
     imposing a monthly beneficiary obligation for enrollment 
     under such plan. The amount of such obligation shall be an 
     amount that the Administrator determines is actuarially sound 
     for each full 12-month period (in the same continuous period 
     of eligibility) in which the eligible beneficiary could have 
     been enrolled under such a plan but was not so enrolled. The 
     provisions of subsection (b) of such section shall apply to 
     the penalty under this paragraph in a manner that is similar 
     to the manner such provisions apply to the penalty under part 
     D.
       ``(3) Procedures.--The Administrator shall establish 
     procedures to carry out this subsection. Under such 
     procedures, the Administrator may waive or modify any of the 
     preceding provisions of this part or part D to

[[Page 16801]]

     the extent necessary to carry out this subsection.
       ``(4) No effect on medicare drug plans.--This subsection 
     shall have no effect on eligible beneficiaries enrolled under 
     part D in a Medicare Prescription Drug plan or under a 
     contract under section 1860D-13(e).''
                                 ______
                                 
  SA 1133. Mr. GRASSLEY (for himself and Mr. Baucus) proposed an 
amendment to the bill S. 1, to amend title XVIII of the Social Security 
Act to provide for a voluntary prescription drug benefit under the 
Medicare program and to strengthen and improve the Medicare program, 
and for other purposes; as follows:
       On page 8, line 12, insert ``(including syringes, and 
     necessary medical supplies associated with the administration 
     of insulin, as defined by the Administrator)'' before the 
     semicolon.
       On page 46, line 9, after the end period insert: ``Such 
     requirement shall not apply to enrollees of a Medicare 
     Prescription Drug plan who are enrolled in the plan pursuant 
     to a contractual agreement between the plan and an employer 
     or other group health plan that provides employment-based 
     retiree health coverage (as defined in section 1860D-
     20(d)(4)(B)) if the premium amount is the same for all such 
     enrollees under such agreement.''
       On page 51, line 19, insert ``(but only with respect to the 
     percentage of such costs that the individual is responsible 
     for under that section)'' after ``1860D-19''.
       On page 56, strike lines 3 through 19, and insert the 
     following:
       ``(B) Medicaid related provisions.--Insofar as a State 
     elects to provide medical assistance under title XIX for a 
     drug based on the prices negotiated under a Medicare 
     Prescription Drug plan under this part--
       ``(i) the medical assistance for such a drug shall be 
     disregarded for purposes of a rebate agreement entered into 
     under section 1927 which would otherwise apply to the 
     provision of medical assistance for the drug under title XIX; 
     and
       ``(ii) the prices negotiated under a Medicare Prescription 
     Drug plan with respect to covered drugs, under a 
     MedicareAdvantage plan with respect to such drugs, or under a 
     qualified retiree prescription drug plan (as defined in 
     section 1860D-20(e)(4)) with respect to such drugs, on behalf 
     of eligible beneficiaries, shall (notwithstanding any other 
     provision of law) not be taken into account for the purposes 
     of establishing the best price under section 1927(c)(1)(C).
       On page 74, strike lines 14 through 16, and insert the 
     following:
     the plan;
       ``(D) the average aggregate projected cost of covered drugs 
     under the plan relative to other Medicare Prescription Drug 
     plans and MedicareAdvantage plans; or
       ``(E) other factors determined appropriate by the 
     Administrator.
       Beginning on page 88, strike lines 9 through page 89, line 
     10, and insert the following:
       ``(ii) Amounts resulting in actual costs.--With respect to 
     the total amount under clause (i) for the year--

       ``(I) the aggregate amount of payments made by the entity 
     to pharmacies and other entities with respect to such 
     coverage for such enrollees; and
       ``(II) the aggregate amount of discounts, direct or 
     indirect subsidies, rebates, or other price concessions or 
     direct or indirect remunerations made to the entity with 
     respect to such coverage for such enrollees.

       ``(B) Certain expenses not included.--The amount under 
     subparagraph (A)(i) may not include--
       ``(i) administrative expenses incurred in providing the 
     coverage described in subparagraph (A)(i);
       ``(ii) amounts expended on providing additional 
     prescription drug coverage pursuant to section 1860D-6(a)(2);
       ``(iii) amounts expended for which the entity is 
     subsequently provided with reinsurance payments under section 
     1860D-20; or
       ``(iv) discounts, direct or indirect subsidies, rebates, or 
     other price concessions or direct or indirect remunerations 
     made to the entity with respect to coverage described in 
     subparagraph (A)(i).
       On page 78, beginning on line 20, strike ``An entity'' and 
     all that follows through line 24.
       On page 84, line 6, strike ``(including a contract 
     under)''.
       Beginning on page 92, strike line 20 through page 93, line 
     25, and insert the following:
       ``(3) Establishment of allowable costs.--For each year, the 
     Administrator shall establish the allowable costs for each 
     Medicare Prescription Drug plan for the year. The allowable 
     costs for a plan for a year shall be equal to the amount 
     described in paragraph (1)(A)(i) for the plan for the year.
       On page 116, strike lines 11 and 12, and insert the 
     following:
       ``(ii) is eligible for medicare cost-sharing described in 
     section 1905(p)(3) under the State plan under title XIX (or 
     under a waiver of such plan), on the basis of being described 
     in section 1905(p)(1), as determined under such plan (or 
     under a waiver of plan); and
       On page 117, strike lines 1 and 2, and insert the 
     following:
       ``(ii) is eligible for medicare cost-sharing described in 
     section 1905(p)(3)(A)(ii) under the State plan under title 
     XIX (or under a waiver of such plan), on the basis of being 
     described in section 1902(a)(10)(E)(iii), as determined under 
     such plan (or under a waiver of plan); and
       On page 117, strike lines 14 through 17, and insert the 
     following:
       ``(ii) is eligible for medicare cost-sharing described in 
     section 1905(p)(3)(A)(ii) under the State plan under title 
     XIX (or under a waiver of such plan), on the basis of being 
     described in section 1902(a)(10)(E)(iv) (without regard to 
     any termination of the application of such section under 
     title XIX), as determined under such plan (or under a waiver 
     of such plan); and
       On page 120, line 11, strike ``such individuals'' and 
     insert ``in the case of such an individual who is not a 
     resident of the 50 States or the District of Columbia, such 
     individual''.
       Beginning on page 123, strike line 10 through page 124, 
     line 6, and insert the following:
       ``(B) Amounts resulting in actual costs.--With respect to 
     the total amount under subparagraph (A) for the year--
       ``(i) the aggregate amount of payments made by the entity 
     to pharmacies and other entities with respect to such 
     coverage for such enrollees; and
       ``(ii) the aggregate amount of discounts, direct or 
     indirect subsidies, rebates, or other price concessions or 
     direct or indirect remunerations made to the entity with 
     respect to such coverage for such enrollees.
       ``(2) Certain expenses not included.--The amount under 
     paragraph (1)(A) may not include--
       ``(A) administrative expenses incurred in providing the 
     coverage described in paragraph (1)(A);
       ``(B) amounts expended on providing additional prescription 
     drug coverage pursuant to section 1860D-6(a)(2); or
       ``(C) discounts, direct or indirect subsidies, rebates, or 
     other price concessions or direct or indirect remunerations 
     made to the entity with respect to coverage described in 
     paragraph (1)(A).
       On page 124, on line 15, insert ``(or 65 percent with 
     respect to a qualifying covered individual described in 
     subsection (e)(2)(D))'' after ``80 percent''.
       Beginning on page 124, strike line 18 through page 125, 
     line 13, and insert the following:
       ``(2) Establishment of allowable costs.--In the case of a 
     qualifying entity that has incurred costs described in 
     subsection (b)(1)(A) with respect to a qualifying covered 
     individual for a coverage year, the Administrator shall 
     establish the allowable costs for the individual and year. 
     Such allowable costs shall be equal to the amount described 
     in such subsection for the individual and year.
       Beginning on page 126, strike line 7 through page 127, line 
     9, and insert the following:
       ``(2) Qualifying covered individual.--The term `qualifying 
     covered individual' means an individual who--
       ``(A) is enrolled in this part and in a Medicare 
     Prescription Drug plan;
       ``(B) is enrolled in this part and in a MedicareAdvantage 
     plan (except for an MSA plan or a private fee-for-service 
     plan that does not provide qualified prescription drug 
     coverage);
       ``(C) is eligible for, but not enrolled in, the program 
     under this part, and is covered under a qualified retiree 
     prescription drug plan; or
       ``(D) is eligible for, but not enrolled in, the program 
     under this part, and is covered under a qualified State 
     pharmaceutical assistance program.
       ``(3) Qualifying entity.--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:
       ``(A) An eligible entity offering a Medicare Prescription 
     Drug plan under this part.
       ``(B) A MedicareAdvantage organization offering a 
     MedicareAdvantage plan under part C (except for an MSA plan 
     or a private fee-for-service plan that does not provide 
     qualified prescription drug coverage).
       ``(C) The sponsor of a qualified retiree prescription drug 
     plan.
       ``(D) A State offering a qualified State pharmaceutical 
     assistance program.

       On page 127, beginning with line 18, strike all through 
     page 128, line 2, and insert:
       ``(i) Attestation of actuarial value of coverage.--The 
     sponsor of the plan shall, annually or at such other time as 
     the Administrator may require, provide the Administrator an 
     attestation, in accordance with the procedures established 
     under section 1860D-6(f), that the actuarial value of 
     prescription drug coverage under the plan is at least equal 
     to the actuarial value of standard prescription drug 
     coverage.
       ``(ii) Audits.--The sponsor of the plan, or an 
     administrator of the plan designated by the sponsor, shall 
     maintain (and afford the 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

[[Page 16802]]

     drug coverage and the accuracy of payments made under this 
     part to and by the plan.
       On page 128, between lines 12 and 13, insert the following:
       ``(6) Qualified State pharmaceutical assistance program.--
       ``(A) In general.--The term `qualified State pharmaceutical 
     assistance program' means a State pharmaceutical assistance 
     program if, with respect to a qualifying covered individual 
     who is covered under the program, the following requirements 
     are met:
       ``(i) Assurance.--The State offering the program shall, 
     annually or at such other times as the Administrator may 
     require, provide the Administrator an attestation that, in 
     accordance with the procedures established under section 
     1860D-6(f), that--

       ``(I) the actuarial value of prescription drug coverage 
     under the program is at least equal to the actuarial value of 
     standard prescription drug coverage; and
       ``(II) the actuarial value of subsidies to individuals 
     provided under the program are at least equal to the 
     actuarial value of the subsidies that would apply under 
     section 1860D-19 if the individual was enrolled under this 
     part rather than under the program.

       ``(ii) Disclosure of information.--The State complies with 
     the requirements described in clauses (i) and (ii) of section 
     1860D-16(b)(7)(A).
       ``(B) State pharmaceutical assistance program.--For 
     purposes of subparagraph (A), the term `State pharmaceutical 
     assistance program' means a program--
       ``(i) that is in operation as of the date of enactment of 
     the Prescription Drug and Medicare Improvement Act of 2003;
       ``(ii) that is sponsored and financed by a State; and
       ``(iii) that provides coverage for outpatient drugs for 
     individuals in the State who meet income- and resource-
     related qualifications specified under such program.
       On page 128, between lines 15 and 16, insert the following:
       ``(g) Distribution of Reinsurance Payment Amounts.--
       ``(1) In general.--Any sponsor meeting the requirements of 
     subsection (e)(3) with respect to a quarter in a calendar 
     year, but which is not an employer, shall distribute the 
     reinsurance payments received for such quarter under 
     subsection (c) to the employers contributing to the qualified 
     retiree prescription drug plan maintained by such sponsor 
     during that quarter, in the manner described in paragraphs 
     (2) and (3).
       ``(2) Allocation.--The reinsurance payments to be 
     distributed pursuant to paragraph (1) shall be allocated 
     proportionally among all employers who contribute to the plan 
     during the quarter with respect to which the payments are 
     received. The share allocated to each employer contributing 
     to the plan during a quarter shall be determined by 
     multiplying the total reinsurance payments received by the 
     sponsor for the quarter by a fraction, the numerator of which 
     is the total contributions made by an employer for that 
     quarter, and the denominator of which is the total 
     contributions required to be made to the plan by all 
     employers for that quarter. Any share allocated to an 
     employer required to contribute for a quarter who does not 
     make the contributions required for that quarter on or before 
     the date due shall be retained by the sponsor for the benefit 
     of the plan as a whole.
       ``(3) Timing.--Reinsurance payments required to be 
     distributed to employers pursuant to this subsection shall be 
     distributed as soon as practicable after received by the 
     sponsor, but in no event later than the end of the quarter 
     immediately following the quarter in which such reinsurance 
     payments are received by the sponsor.
       ``(4) Regulations.--The Secretary shall promulgate 
     regulations providing that any sponsor subject to the 
     requirements of this subsection who fails to meet such 
     requirements shall not be eligible for a payment under this 
     section.
       On page 130, between lines 7 and 8, insert the following:


``direct subsidies for qualified state offering a state pharmaceutical 
assistance program for program enrollees eligible for, but not enrolled 
                             in, this part

       ``Sec. 1860D-22. (a) Direct Subsidy.--
       ``(1) In general.--The Administrator shall provide for the 
     payment to a State offering a qualified State pharmaceutical 
     assistance program (as defined in section 1860D-20(e)(6)) for 
     each qualifying covered individual (described in subparagraph 
     (D) of section 1860D-(e)(2)) enrolled in the program for each 
     month for which such individual is so enrolled.
       ``(2) Amount of payment.--
       ``(A) In general.--The amount of the payment under 
     paragraph (1) shall be an amount equal to the amount of 
     payment for the area and year made under section 1860D-
     21(a)(2).
       ``(b) Additional Subsidy.--
       ``(1) In general.--The Administrator shall provide for the 
     payment to a State offering a qualified State pharmaceutical 
     program (as defined in section 1860D-20(e)(6)) for each 
     applicable low-income individual enrolled in the program for 
     each month for which such individual is so enrolled.
       ``(2) Amount of payment.--
       ``(A) In general.--The amount of the payment under 
     paragraph (1) shall be the amount the Administrator estimates 
     would have been made to an entity or organization under 
     section 1860D-19 with respect to the applicable low-income 
     individual if such individual was enrolled in this part and 
     under a Medicare Prescription Drug plan or a 
     MedicareAdvantage plan.
       ``(B) Maximum payments.--In no case may the amount of the 
     payment determined under subparagraph (A) with respect to an 
     applicable low-income individual exceed, as estimated by the 
     Administrator, the average amounts made in a year under 
     section 1860D-19 on behalf of an eligible beneficiary 
     enrolled under this part with income that is the same as the 
     income of the applicable low-income individual.
       ``(3) Applicable low-income individual.--For purposes of 
     this subsection, the term `applicable low-income individual' 
     means an individual who is both--
       ``(A) a qualifying covered individual (described in 
     subparagraph (D) of section 1860D-(e)(2)); and
       ``(B) a qualified medicare beneficiary, a specified low 
     income medicare beneficiary, or a subsidy-eligible 
     individual, as such terms are defined in section 1860D-
     19(a)(4).
       ``(c) Payment Methods.--
       ``(1) In general.--Payments under this section shall be 
     based on such a method as the 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 Prescription Drug Account.
       ``(d) Construction.--Nothing in this section or section 
     1860D-20 shall effect the provisions of section 1860D-26(b).
       On page 134, between lines 9 and 10, insert:
       ``(d) Waiver Authority.--The Secretary shall have authority 
     similar to the waiver authority under section 1857(i) to 
     facilitate the offering of Medicare Prescription Drug plans 
     by employer or other group health plans as part of 
     employment-based retiree health coverage (as defined in 
     section 1860D-20(d)(4)(B)), including the authority to 
     establish separate premium amounts for enrollees in a 
     Medicare Prescription Drug plan by reason of such coverage.''
       On page 142, beginning on line 16, strike ``in a manner'' 
     and all that follows through line 19 and insert a semicolon.
       On page 143, beginning on line 15, strike ``in a manner'' 
     and all that follows through line 18 and insert a semicolon.
       On page 144, between lines 10 and 11, insert the following:
       ``(4) Screen and enroll individuals eligible for medicare 
     cost-sharing.--As part of making an eligibility determination 
     required under paragraph (1) or (2), screen an individual who 
     applies for such a determination for eligibility for medical 
     assistance for any medicare cost-sharing described in section 
     1905(p)(3) and, if the individual is eligible for any such 
     medicare cost-sharing, enroll the individual under the State 
     plan (or under a waiver of such plan).
       On page 147, line 1, insert ``and notwithstanding section 
     1905(b),'' after ``(4)''.
       On page 147, beginning on line 6, strike ``Secretary'' and 
     all that follows through ``paying'' on line 8, and insert 
     ``Federal medical assistance percentage shall be''.
       On page 147, line 8, strike ``of the'' and insert ``for''.
       On page 147, strike lines 13 through 16, and insert the 
     following:
       ``(B) whose income is at least the income required for an 
     individual to be an eligible individual under section 1611 
     for purposes of the supplemental security income program (as 
     determined under section 1612), but does not exceed 100 
     percent of the poverty line (as defined in section 
     2110(c)(5)) applicable to a family of the size involved.,
       On page 149, line 1, insert ``and notwithstanding section 
     1905(b),'' after ``(2)''.
       On page 149, beginning on line 6, strike ``Secretary'' and 
     all that follows through ``paying'' on line 8, and insert 
     ``Federal medical assistance percentage shall be''.
       On page 149, line 8, strike ``of the'' and insert ``for''.
       On page 151, line 9, strike ``$22,500,000'' and insert 
     ``$37,500,000''.
       On page 151, line 11, strike ``$30,000,000'' and insert 
     ``$50,000,000''.
       On page 152, strike lines 8 through 11, and insert the 
     following:
       (2) Conforming amendments.--
       (A) Section 1905(b) (42 U.S.C. 1396d(b)) is amended by 
     inserting ``and subsections (c)(1) and (d)(1) of section 
     1935'' after ``1933(d)''.
       (B) Section 1108(f) (42 U.S.C. 1308(f)) is amended by 
     inserting ``and section 1935(e)(1)(B)'' after ``Subject to 
     subsection (g)''.
       On page 157, line 17, strike ``and''.
       On page 157, line 20, strike the period and insert ``; 
     and''.
       On page 157, between lines 20 and 21, insert the following:
       (C) by adding at the end the following:
       ``(3) Agreements to establish information and enrollment 
     sites at social security field offices.--
       ``(A) In general.--The Commissioner shall enter into an 
     agreement with each State operating a State plan under title 
     XIX (including under a waiver of such plan) to establish

[[Page 16803]]

     information and enrollment sites within all the Social 
     Security field offices located in the State for purposes of--
       ``(i) the State determining the eligibility of individuals 
     residing in the State for medical assistance for payment of 
     the cost of medicare cost-sharing under the medicaid program 
     pursuant to sections 1902(a)(10)(E) and 1933, the 
     transitional prescription drug assistance card program under 
     section 1807A, or premium and cost-sharing subsidies under 
     section 1860D-19; and
       ``(ii) enrolling individuals who are determined eligible 
     for such medical assistance, program, or subsidies in the 
     State plan (or waiver), the transitional prescription drug 
     assistance card program under section 1807A, or the 
     appropriate category for premium and cost-sharing subsidies 
     under section 1860D-19.
       ``(B) Agreement terms.--The Secretary and the Commissioner 
     jointly shall develop terms for the State agreements required 
     under subparagraph (A) that shall specify the 
     responsibilities of the State and the Commissioner in the 
     establishment and operation of such sites.
       ``(C) Authorization of appropriations.--There are 
     authorized to be appropriated to the Commissioner, such sums 
     as may be necessary to carry out this paragraph.''.
       On page 159, line 19, insert the following before the 
     closing quotation: ``As part of such review, the Commission 
     shall hold 3 field hearings in 2007.''.
       On page 174, line 14, insert ``(including syringes, and 
     necessary medical supplies associated with the administration 
     of insulin, as defined by the Secretary)'' before the comma.
       Beginning on page 195, strike line 16 through page 196, 
     line 7, and insert the following:
       ``(A) Patient may request a written prescription.--The 
     standards provide that--
       ``(i) a prescription shall be written and not transmitted 
     electronically if the patient makes such a request; and
       ``(ii) no additional charges may be imposed on the patient 
     for making such a request.
       On page 199, strike lines 10 through 14, and insert the 
     following:
       ``(A) In general.--Individuals or entities that transmit or 
     receive prescriptions electronically shall comply with the 
     standards adopted or modified under this part.
       On page 200, between lines 16 and 17, insert the following:
       ``(e) No Requirement to Transmit or Receive Prescriptions 
     Electronically.--Nothing in this part shall be construed to 
     require an individual or entity to transmit or receive 
     prescriptions electronically.
       On page 254, line 25, insert ``(other than deemed contracts 
     or agreements under subsection (j)(6))'' before ``with a 
     sufficient number''.
       On page 255, line 7, before the period, insert the 
     following: ``, except that, if a plan entirely meets such 
     requirement with respect to a category of health care 
     professional or provider on the basis of subparagraph (B), it 
     may provide for a higher beneficiary copayment in the case of 
     health care professionals and providers of that category who 
     do not have contracts or agreements (other than deemed 
     contracts or agreements under subsection (j)(6)) to provide 
     covered services under the terms of the plan''.
       On page 297, strike lines 5 through 9, and insert the 
     following:
       ``(iv) For 2002, 2003, and 2004, 102 percent of the annual 
     Medicare+Choice capitation rate under this paragraph for the 
     area for the previous year.
       ``(v) For 2005, 103 percent of the annual Medicare+Choice 
     capitation rate under this paragraph for the area for 2003.
       ``(vi) For 2006 and each succeeding year, 102 percent of 
     the annual Medicare+Choice capitation rate under this 
     paragraph for the area for the previous year, except that 
     such rate shall be determined by substituting `102' for `103' 
     in clause (v).
       On page 323, strike lines 1 through 3, and insert the 
     following:
       ``(B) Exception.--The Secretary shall not review, approve, 
     or disapprove the amounts submitted under paragraph (3), or, 
     with respect to a private fee-for-service plan (as described 
     in section 1851(a)(2)(C)) under subparagraph (A)(i), 
     (A)(ii)(III), or (B) of paragraph (2).
       On page 326, line 11, after the end period insert: 
     ``Subject to the provisions of section 1858(h), such 
     requirement shall not apply to enrollees of a 
     MedicareAdvantage plan who are enrolled in the plan pursuant 
     to a contractual agreement between the plan and an employer 
     or other group health plan that provides employment-based 
     retiree health coverage (as defined in section 1860D-
     20(d)(4)(B)) if the premium amount is the same for all such 
     enrollees under such agreement.''.
       On page 328, line 3, strike ``or (C)''.
       On page 328, line 20, strike ``or (C)''.
       On page 343, strike lines 22 through 24, and insert:
       Section 1858(h) (as added by section 211) is amended--
       (1) by inserting ``(including subsection (i) of such 
     section)'' after ``section 1857''; and
       (2) by adding at the end the following new sentence: ``In 
     applying the authority under section 1857(i) pursuant to this 
     subsection, the Administrator may permit MedicareAdvantage 
     plans to establish separate premium amounts for enrollees in 
     an employer or other group health plan that provides 
     employment-based retiree health coverage (as defined in 
     section 1860D-20(d)(4)(B)).''
       On page 349, between lines 4 and 5, insert the following:
       (3) Update in minimum percentage increase.--Section 
     1853(c)(1)(C) (42 U.S.C. 1395w-23(c)(1)(C)) is amended by 
     striking clause (iv) and inserting the following new clauses:
       ``(iv) For 2002, 2003, and 2004, 102 percent of the annual 
     Medicare+Choice capitation rate under this paragraph for the 
     area for the previous year.
       ``(v) For 2005, 103 percent of the annual Medicare+Choice 
     capitation rate under this paragraph for the area for 2003.
       ``(vi) For 2006 and each succeeding year, 102 percent of 
     the annual Medicare+Choice capitation rate under this 
     paragraph for the area for the previous year, except that 
     such rate shall be determined by substituting `102' for `103' 
     in clause (v).''.
       On page 379, strike lines 9 through 13, and insert:
       ``(A) In general.--The term `specialized Medicare+Choice 
     plans for special needs beneficiaries' means a 
     Medicare+Choice plan that--
       ``(i) exclusively serves special needs beneficiaries (as 
     defined in subparagraph (B)), or
       ``(ii) to the extent provided in regulations prescribed by 
     the Secretary, disproportionately serves such special needs 
     beneficiaries, frail elderly medicare beneficiaries, or both.
       Beginning on page 411, strike line 5 through page 414, line 
     9, and insert the following:

     SEC. 401. EQUALIZING URBAN AND RURAL STANDARDIZED PAYMENT 
                   AMOUNTS UNDER THE MEDICARE INPATIENT HOSPITAL 
                   PROSPECTIVE PAYMENT SYSTEM.

       (a) In General.--Section 1886(d)(3)(A)(iv) (42 U.S.C. 
     1395ww(d)(3)(A)(iv)) is amended--
       (1) by striking ``(iv) For discharges'' and inserting 
     ``(iv)(I) Subject to subclause (II), for discharges''; and
       (2) by adding at the end the following new subclause:
       ``(II) For discharges occurring in a fiscal year (beginning 
     with fiscal year 2004), the Secretary shall compute a 
     standardized amount for hospitals located in any area within 
     the United States and within each region equal to the 
     standardized amount computed for the previous fiscal year 
     under this subparagraph for hospitals located in a large 
     urban area (or, beginning with fiscal year 2005, for 
     applicable for all hospitals in the previous fiscal year) 
     increased by the applicable percentage increase under 
     subsection (b)(3)(B)(i) for the fiscal year involved.''.
       (b) Application to Subsection (d) Puerto Rico Hospitals.--
     Section 1886(d)(9) (42 U.S.C. 1395ww(d)(9)) is amended--
       (1) in subparagraph (A)--
       (A) in clause (i), by striking ``and'' after the comma at 
     the end;
       (B) in clause (ii)--
       (i) in the matter preceding subclause (I), by inserting 
     ``and before October 1, 2003'' after ``October 1, 1997''; and
       (ii) in the matter following clause (III), by striking the 
     period at the end and inserting ``, and''; and
       (iii) by adding at the end the following new clause:
       ``(iii) for discharges in a fiscal year beginning on or 
     after October 1, 2003, 50 percent of the national 
     standardized rate (determined under paragraph (3)(D)(iii)) 
     for hospitals located in any area.'';
       (2) in subparagraph (C)--
       (A) in clause (i)--
       (i) by striking ``(i) The Secretary'' and inserting 
     ``(i)(I) For discharges in a fiscal year after fiscal year 
     1988 and before fiscal year 2004, the Secretary; and
       (ii) by adding at the end the following:
       ``(II) For discharges in fiscal year 2004, the Secretary 
     shall compute an average standardized amount for hospitals 
     located in any area of Puerto Rico that is equal to the 
     average standardized amount computed under subclause (I) for 
     fiscal year 2003 for hospitals in an urban area, increased by 
     the applicable percentage increase under subsection (b)(3)(B) 
     for fiscal year 2004.
       ``(III) For discharges in a fiscal year after fiscal year 
     2004, the Secretary shall compute an average standardized 
     amount for hospitals located in any are of Puerto Rico that 
     is equal to the average standardized amount computed under 
     subclause (II) or this subclause for the previous fiscal 
     year, increased by the applicable percentage increase under 
     subsection (b)(3)(B), adjusted to reflect the most recent 
     case mix data.'';
       (B) in clause (ii), by inserting ``(or for fiscal year 2004 
     and thereafter, the standardized amount)'' after ``each of 
     the average standardized amounts''; and
       (C) in clause (iii)(I), by striking ``for hospitals located 
     in an urban or rural area, respectively''.
       (c) Conforming Amendments.--
       (1) Computing drg-specific rates.--Section 1886(d)(3)(D) 
     (42 U.S.C. 1395ww(d)(3)(D)) is amended--
       (A) in the heading, by striking ``in different areas'';

[[Page 16804]]

       (B) in the matter preceding clause (i), by striking ``, 
     each of'';
       (C) in clause (i)--
       (i) in the matter preceding subclause (I), by inserting 
     ``for fiscal years before fiscal year 2004,'' before ``for 
     hospitals''; and
       (ii) in subclause (II), by striking ``and'' after the 
     semicolon at the end;
       (D) in clause (ii)--
       (i) in the matter preceding subclause (I), by inserting 
     ``for fiscal years before fiscal year 2004,'' before ``for 
     hospitals''; and
       (ii) in subclause (II), by striking the period at the end 
     and inserting ``; and''; and
       (E) by adding at the end the following new clause:
       ``(iii) for a fiscal year beginning after fiscal year 2003, 
     for hospitals located in all areas, to the product of--
       ``(I) the applicable standardized amount (computed under 
     subparagraph (A)), reduced under subparagraph (B), and 
     adjusted or reduced under subparagraph (C) for the fiscal 
     year; and
       ``(II) the weighting factor (determined under paragraph 
     (4)(B)) for that diagnosis-related group.''.
       (2) Technical conforming sunset.--Section 1886(d)(3) (42 
     U.S.C. 1395ww(d)(3)) is amended--
       (A) in the matter preceding subparagraph (A), by inserting 
     ``, for fiscal years before fiscal year 1997,'' before ``a 
     regional adjusted DRG prospective payment rate''; and
       (B) in subparagraph (D), in the matter preceding clause 
     (i), by inserting ``, for fiscal years before fiscal year 
     1997,'' before ``a regional DRG prospective payment rate for 
     each region,''.
       On page 430, strike lines 19 through 21, and insert the 
     following:
       (b) Permitting Nurse Practitioners, Physician Assistants, 
     and Clinical Nurse Specialist to Review Hospice Plans of 
     Care.--Section 1814(a)(7)(B) is amended by inserting ``(or by 
     a physician assistant, nurse practitioner or clinical nurse 
     specialist who is not an employee of the hospice program, and 
     whom the individual identifies as the health care provider 
     having the most significant role in the determination and 
     delivery of medical care to the individual at the time the 
     individual makes an election to receive hospice care)'' after 
     ``and is periodically reviewed by the individual's attending 
     physician''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to hospice care furnished on or after October 1, 
     2004.
       On page 438, between lines 10 and 11, insert the following:

     SEC. 414. REVISION OF THE INDIRECT MEDICAL EDUCATION (IME) 
                   ADJUSTMENT PERCENTAGE.

       (a) In General.--Section 1886(d)(5)(B)(ii) (42 U.S.C. 
     1395ww(d)(5)(B)(ii)) is amended--
       (1) in subclause (VI), by striking ``and'' after the 
     semicolon at the end;
       (2) in subclause (VII)--
       (A) by striking ``on or after October 1, 2002'' and 
     inserting ``during fiscal year 2003''; and
       (B) by striking the period at the end and inserting a 
     semicolon; and
       (3) by adding at the end the following new subclauses:
       ``(VIII) during each of fiscal years 2004 and 2005, `c' is 
     equal to 1.36; and
       ``(IX) on or after October 1, 2005, `c' is equal to 
     1.355.''.
       (b) Conforming Amendment Relating to Determination of 
     Standardized Amount.--Section 1886(d)(2)(C)(i) (42 U.S.C. 
     1395ww(d)(2)(C)(i)) is amended--
       (1) by striking ``1999 or'' and inserting ``1999,''; and
       (2) by inserting ``, or the Prescription Drug and Medicare 
     Improvement Act of 2003'' after ``2000''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to discharges occurring on or after October 1, 
     2003.

     SEC. 415. CALCULATION OF WAGE INDICES FOR HOSPITALS.

       (a) In General.--Notwithstanding any other provision of 
     law, in the calculation of a wage index in a State for 
     purposes of making payments for discharge waive such other 
     criteria for re-classification as deemed appropriate by the 
     Secretary.

     SEC. 416. CONFORMING CHANGES REGARDING FEDERALLY QUALIFIED 
                   HEALTH CENTERS.

       Section 1833(a)(3) (42 U.S.C. 1395l(a)(3)) is amended by 
     inserting ``(which regulations shall exclude any cost 
     incurred for the provision of services pursuant to a contract 
     with an eligible entity (as defined in section 1860D(4)) 
     operating a Medicare Prescription Drug plan or with an entity 
     with a contract under section 1860D-13(e), for which payment 
     is made by the entity)'' after ``the Secretary may prescribe 
     in regulations''.

     SEC. 417. INCREASE FOR HOSPITALS WITH DISPROPORTIONATE 
                   INDIGENT CARE REVENUES.

       (a) Disproportionate Share Adjustment Percentage.--Section 
     1886(d)(5)(F)(iii) (42 U.S.C. 1395ww(d)(5)(F)(iii)) is 
     amended by striking ``35 percent'' and inserting ``35 percent 
     (or, for discharges occurring on or after October 1, 2003, 40 
     percent)''.
       (b) Capital Costs.--Section 1886(g)(1)(B) (42 U.S.C. 
     1395ww(g)(1)(B)) is amended--
       (1) in clause (iii), by striking ``and'' at the end;
       (2) in clause (iv), by striking the period at the end and 
     inserting ``, and''; and
       (3) by adding at the end the following new clause:
       ``(v) in the case of cost reporting periods beginning on or 
     after October 1, 2003, shall provide for a disproportionate 
     share adjustment in the same manner as section 
     1886(d)(5)(F)(iii).''.

     SEC. 418. TREATMENT OF GRANDFATHERED LONG-TERM CARE 
                   HOSPITALS.

       (a) In General.--The last sentence of section 1886(d)(1)(B) 
     is amended by inserting ``, and the Secretary may not impose 
     any special conditions on the operation, size, number of 
     beds, or location of any hospital so classified for continued 
     participation under this title or title XIX or for continued 
     classification as a hospital described in clause (iv)'' 
     before the period at the end.
       (b) Treatment of Proposed Revision.--The Secretary shall 
     not adopt the proposed revision to section 412.22(f) of title 
     42, Code of Federal Regulations contained in 68 Federal 
     Register 27154 (May 19, 2003) or any revision reaching the 
     same or substantially the same result as such revision.
       (c) Effective Date.--The amendment made by, and provisions 
     of, this section shall apply to cost reporting periods ending 
     on or after December 31, 2002.
       On page 440, line 2, insert closing quotation marks and a 
     period after the period at the end.
       Beginning on page 441, strike line 19 and all that follows 
     through page 442, line 2.
       Beginning on page 445, strike line 5 and all that follows 
     through page 446, line 6, and insert the following:

     SEC. 426. TEMPORARY INCREASE FOR GROUND AMBULANCE SERVICES.

       Section 1834(l) (42 U.S.C. 1395m(l)), as amended by section 
     405(b)(2), is amended by adding at the end the following new 
     paragraphs:
       ``(10) Temporary increase for ground ambulance services.--
       ``(A) In general.--Notwithstanding any other provision of 
     this subsection, in the case of ground ambulance services 
     furnished on or after January 1, 2005, and before January 1, 
     2008, for which the transportation originates in--
       ``(i) a rural area described in paragraph (9) or in a rural 
     census tract described in such paragraph, the fee schedule 
     established under this section shall provide that the rate 
     for the service otherwise established, after application of 
     any increase under such paragraph, shall be increased by 5 
     percent; and
       ``(ii) an area not described in clause (i), the fee 
     schedule established under this section shall provide that 
     the rate for the service otherwise established shall be 
     increased by 2 percent.
       ``(B) Application of increased payments after 2007.--The 
     increased payments under subparagraph (A) shall not be taken 
     into account in calculating payments for services furnished 
     on or after the period specified in such subparagraph.
       ``(11) Conversion factor adjustments.--The Secretary shall 
     not adjust downward the conversion factor in any year because 
     of an evaluation of the prior year conversion factor.''.
       Beginning on page 470, strike line 21 and all that follows 
     through page 471, line 13, and insert the following:
       ``(B) Subject to subparagraph (E), in the case of dialysis 
     services furnished in 2005, the composite rate for such 
     services shall be an amount equal to the composite rate 
     established under subparagraph (A), increased by 0.05 percent 
     and further increased by 1.6 percent.
       ``(C) Subject to subparagraph (E), in the case of dialysis 
     services furnished in 2006, the composite rate for such 
     services shall be an amount equal to the composite rate 
     established under subparagraph (B), increased by 0.05 percent 
     and further increased by 1.6 percent.
       ``(D) Subject to subparagraph (E), in the case of dialysis 
     services furnished in 2007 and all subsequent years, the 
     composite rate for such services shall be an amount equal to 
     the composite rate established under this paragraph for the 
     previous year, increased by 0.05 percent.
       On page 486, line 3, insert ``and'' after the semicolon at 
     the end.
       On page 486, line 4, insert ``(I)'' after ``(ii)''.
       On page 486, line 8, strike ``and'' and insert ``or''.
       On page 486, line 9, strike ``(iii)'' and insert ``(II)''.
       On page 488, after line 25, add the following:
       (c) Limitation of Expenditures in Years Prior to 2014.--
       (1) In general.--The Secretary shall ensure that the total 
     amount of expenditures under title XVIII of the Social 
     Security Act (including amounts expended by reason of this 
     section) in a year prior to 2014 does not exceed the sum of--
       (A) the total amount of expenditures under such title XVIII 
     that would have made if this section had not been enacted; 
     and
       (B) the applicable amount.
       (2) Applicable amount.--For purposes of paragraph (1), the 
     term ``applicable amount'' means--
       (A) for 2005, $32,000,000;
       (B) for 2006, $34,000,000;
       (C) for 2007, $36,000,000;

[[Page 16805]]

       (D) for 2008, $38,000,000;
       (E) for 2009, $40,000,000;
       (F) for 2010, $42,000,000;
       (G) for 2011, $44,000,000;
       (H) for 2012, $48,000,000; and
       (I) for 2013, $50,000,000.
       (3) Steps to ensure funding limitation not violated.--If 
     the Secretary determines that the application of this section 
     will result in the funding limitation described in paragraph 
     (1) being violated for any year, the Secretary shall take 
     appropriate steps to stay within such funding limitation, 
     including through limiting the number of clinical trials 
     deemed under subsection (a) and only covering a portion of 
     the routine costs described in such subsection.
       On page 516, after line 22, add the following:

     SEC. 446. AUTHORIZATION OF REIMBURSEMENT FOR ALL MEDICARE 
                   PART B SERVICES FURNISHED BY CERTAIN INDIAN 
                   HOSPITALS AND CLINICS.

       (a) In General.--Section 1880(e) (42 U.S.C. 1395qq(e)) is 
     amended--
       (1) in paragraph (1)(A), by striking ``for services 
     described in paragraph (2)'' and inserting ``for all items 
     and services for which payment may be made under such part'';
       (2) by striking paragraph (2); and
       (3) by redesignating paragraph (3) as paragraph (2).
       (b) Effective Date.--The amendments made by this section 
     shall apply to items and services furnished on or after 
     October 1, 2004.

     SEC. 447. COVERAGE OF CARDIOVASCULAR SCREENING TESTS.

       (a) Coverage.--Section 1861(s)(2) of the Social Security 
     Act (42 U.S.C. 1395x(s)(2)) is amended--
       (1) in subparagraph (U), by striking ``and'' at the end;
       (2) in subparagraph (V)(iii), by inserting ``and'' at the 
     end; and
       (3) by adding at the end the following new subparagraph:
       ``(W) cardiovascular screening tests (as defined in 
     subsection (ww)(1));''.
       (b) Services Described.--Section 1861 of the Social 
     Security Act (42 U.S.C. 1395x) is amended by adding at the 
     end the following new subsection:

                    ``Cardiovascular Screening Tests

       ``(ww)(1) The term `cardiovascular screening tests' means 
     the following diagnostic tests for the early detection of 
     cardiovascular disease:
       ``(A) Tests for the determination of cholesterol levels.
       ``(B) Tests for the determination of lipid levels of the 
     blood.
       ``(C) Such other tests for cardiovascular disease as the 
     Secretary may approve.
       ``(2)(A) Subject to subparagraph (B), the Secretary shall 
     establish standards, in consultation with appropriate 
     organizations, regarding the frequency and type of 
     cardiovascular screening tests.
       ``(B) With respect to the frequency of cardiovascular 
     screening tests approved by the Secretary under subparagraph 
     (A), in no case may the frequency of such tests be more often 
     than once every 2 years.''.
       (c) Frequency.--Section 1862(a)(1) of the Social Security 
     Act (42 U.S.C. 1395y(a)(1)) is amended--
       (1) by striking ``and'' at the end of subparagraph (H);
       (2) by striking the semicolon at the end of subparagraph 
     (I) and inserting ``, and''; and
       (3) by adding at the end the following new subparagraph:
       ``(J) in the case of a cardiovascular screening test (as 
     defined in section 1861(ww)(1)), which is performed more 
     frequently than is covered under section 1861(ww)(2).''.
       (d) Effective Date.--The amendments made by this section 
     shall apply to tests furnished on or after January 1, 2005.

     SEC. 448. MEDICARE COVERAGE OF SELF-INJECTED BIOLOGICALS.

       (a) Coverage.--
       (1) In general.--Section 1861(s)(2) (42 U.S.C. 1395x(s)(2)) 
     is amended--
       (A) in subparagraph (U), by striking ``and'' at the end;
       (B) in subparagraph (V), by inserting ``and'' at the end; 
     and
       (C) by adding at the end the following new subparagraph:
       ``(W)(i) a self-injected biological (which is approved by 
     the Food and Drug Administration) that is prescribed as a 
     complete replacement for a drug or biological (including the 
     same biological for which payment is made under this title 
     when it is furnished incident to a physicians' service) that 
     would otherwise be described in subparagraph (A) or (B) and 
     that is furnished during 2004 or 2005; and
       ``(ii) a self-injected drug that is used to treat multiple 
     sclerosis;''.
       (2) Conforming amendment.--Subparagraphs (A) and (B) of 
     section 1861(s)(2) of the Social Security Act (42 U.S.C. 
     1395x(s)(2)) are each amended by inserting ``, except for any 
     drug or biological described in subparagraph (W),'' after 
     ``which''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to drugs and biologicals furnished on or after 
     January 1, 2004 and before January 1, 2006.

     SEC. 449. EXTENSION OF MEDICARE SECONDARY PAYER RULES FOR 
                   INDIVIDUALS WITH END-STAGE RENAL DISEASE.

       Section 1862(b)(1)(C) (42 U.S.C. 1395y(b)(1)(C)) is 
     amended--
       (1) in the last sentence, by inserting ``, and before 
     January 1, 2004'' after ``prior to such date)''; and
       (2) by adding at the end the following new sentence: 
     ``Effective for items and services furnished on or after 
     January 1, 2004 (with respect to periods beginning on or 
     after June 1, 2002), clauses (i) and (ii) shall be applied by 
     substituting `36-month' for `12-month' each place it appears 
     in the first sentence.

     SEC. 450. REQUIRING THE INTERNAL REVENUE SERVICE TO DEPOSIT 
                   INSTALLMENT AGREEMENT AND OTHER FEES IN THE 
                   TREASURY AS MISCELLANEOUS RECEIPTS.

       Notwithstanding any other provision of law, the Secretary 
     of the Treasury is required to deposit in the Treasury as 
     miscellaneous receipts any fee receipts, including fees from 
     installment agreements and restructured installment 
     agreements, collected under the authority provided by Section 
     3 of the Administrative Provisions of the Internal Revenue 
     Service of Public Law 103-329, the Treasury, Postal Service 
     and General Government Appropriations Act, 1995. Fees 
     collected under this section shall be available for use by 
     the Internal Revenue Service only to the extent that such 
     authority is provided in advance in an appropriations Act.

     SEC. 450A. INCREASING TYPES OF ORIGINATING TELEHEALTH SITES 
                   AND FACILITATING THE PROVISION OF TELEHEALTH 
                   SERVICES ACROSS STATE LINES.

       (a) Increasing Types of Originating Sites.--Section 
     1834(m)(4)(C)(ii) (42 U.S.C. 1395m(m)(4)(C)(ii)) is amended 
     by adding at the end the following new subclauses:

       ``(VI) A skilled nursing facility (as defined in section 
     1819(a)).
       ``(VII) An assisted-living facility (as defined by the 
     Secretary).
       ``(VIII) A board-and-care home (as defined by the 
     Secretary).
       ``(IX) A county of community health clinic (as defined by 
     the Secretary).
       ``(X) A community mental health center (as described in 
     section 1861(ff)(2)(B)).
       ``(XI) A long-term care facility (as defined by the 
     Secretary).
       ``(XII) A facility operated by the Indian Health Service or 
     by an Indian tribe, tribal organization, or an urban Indian 
     organization (as such terms are defined in section 4 of the 
     Indian Health Care Improvement Act (25 U.S.C. 1603)) 
     directly, or under contract or other arrangement.''.

       (b) Facilitating the Provision of Telehealth Services 
     Across State Lines.--
       (1) In general.--For purposes of expediting the provision 
     of telehealth services for which payment is made under the 
     medicare program under section 1834(m) of the Social Security 
     Act (42 U.S.C. 1395m(m)), across State lines, the Secretary 
     shall, in consultation with representatives of States, 
     physicians, health care practitioners, and patient advocates, 
     encourage and facilitate the adoption of State provisions 
     allowing for multistate practitioner licensure across State 
     lines.
       (2) Definitions.--In this subsection:
       (A) Telehealth service.--The term ``telehealth service'' 
     has the meaning given that term in subparagraph (F)(i) of 
     section 1834(m)(4) of the Social Security Act (42 U.S.C. 
     1395m(m)(4)).
       (B) Physician, practitioner.--The terms ``physician'' and 
     ``practitioner'' have the meaning given those terms in 
     subparagraphs (D) and (E), respectively, of such section.
       (C) Medicare program.--The term ``medicare program'' means 
     the program of health insurance administered by the Secretary 
     under title XVIII of the Social Security Act (42 U.S.C. 1395 
     et seq.).

     SEC. 450B. DEMONSTRATION PROJECT FOR COVERAGE OF SURGICAL 
                   FIRST ASSISTING SERVICES OF CERTIFIED 
                   REGISTERED NURSE FIRST ASSISTANTS.

       (a) Demonstration Project.--The Secretary shall conduct a 
     demonstration project under part B of title XVIII of the 
     Social Security Act under which payment is made for surgical 
     first assisting services furnished by a certified registered 
     nurse first assistant to medicare beneficiaries.
       (b) Definitions.--In this section:
       (1) Surgical First Assisting Services.--The term ``surgical 
     first assisting services'' means services consisting of first 
     assisting a physician with surgery and related preoperative, 
     intraoperative, and postoperative care (as determined by the 
     Secretary) furnished by a certified registered nurse first 
     assistant (as defined in paragraph (2)) which the certified 
     registered nurse first assistant is legally authorized to 
     perform by the State in which the services are performed.
       (2) Certified Registered Nurse First Assistant.--The term 
     ``certified registered nurse first assistant'' means an 
     individual who--
       (A) is a registered nurse and is licensed to practice 
     nursing in the State in which the surgical first assisting 
     services are performed;
       (B) has completed a minimum of 2,000 hours of first 
     assisting a physician with surgery and related preoperative, 
     intraoperative, and postoperative care; and
       (C) is certified as a registered nurse first assistant by 
     an organization recognized by the Secretary.

[[Page 16806]]

       (c) Payment Rates.--Payment under the demonstration project 
     for surgical first assisting services furnished by a 
     certified registered nurse first assistant shall be made at 
     the rate of 80 percent of the lesser of the actual charge for 
     the services or 85 percent of the amount determined under the 
     fee schedule established under section 1848(b) of the Social 
     Security Act (42 U.S.C. 1395w-4(b)) for the same services if 
     furnished by a physician.
       (d) Demonstration Project Sites.--The project established 
     under this section shall be conducted in 5 States selected by 
     the Secretary.
       (e) Duration.--The Secretary shall conduct the 
     demonstration project for the 3-year period beginning on the 
     date that is 90 days after the date of the enactment of this 
     Act.
       (f) Report.--Not later than January 1, 2007, the Secretary 
     shall submit to Congress a report on the project. The report 
     shall include an evaluation of patient outcomes under the 
     project, as well as an analysis of the cost effectiveness of 
     the project.
       (g) Funding.--
       (1) In general.--The Secretary shall provide for the 
     transfer from the Federal Supplementary Insurance Trust Fund 
     established under section 1841 of the Social Security Act (42 
     U.S.C. 1395t) of such funds as are necessary for the costs of 
     carrying out the project under this section.
       (2) Budget neutrality.--In conducting the project under 
     this section, the Secretary shall ensure that the aggregate 
     payments made by the Secretary do not exceed the amount which 
     the Secretary would have paid if the project under this 
     section was not implemented.
       (i) Waiver Authority.--The Secretary shall waive compliance 
     with the requirements of title XVIII of the Social Security 
     Act to such extent and for such period as the Secretary 
     determines is necessary to conduct demonstration projects.

     SEC. 450C. EQUITABLE TREATMENT FOR CHILDREN'S HOSPITALS.

       (a) In General.--Section 1833(t)(7)(D)(ii) (42 U.S.C. 
     1395l(t)(7)(D)(ii)) is amended to read as follows:
       ``(ii) Permanent treatment for cancer hospitals and 
     children's hospitals.--

       ``(I) In general.--Subject to subclause (II), in the case 
     of a hospital described in clause (iii) or (v) of section 
     1886(d)(1)(B), for covered OPD services for which the PPS 
     amount is less than the pre-BBA amount, the amount of payment 
     under this subsection shall be increased by the amount of 
     such difference.

       ``(II) Special rule for certain children's hospitals.--In 
     the case of a hospital described in section 
     1886(d)(1)(B)(iii) that is located in a State with a 
     reimbursement system under section 1814(b)(3), but that is 
     not reimbursed under such system, for covered OPD services 
     furnished on or after October 1, 2003, and for which the PPS 
     amount is less than the greater of the pre-BBA amount or the 
     reasonable operating and capital costs without reductions of 
     the hospital in providing such services, the amount of 
     payment under this subsection shall be increased by the 
     amount of such difference.''.

     SEC. 450D. TREATMENT OF PHYSICIANS' SERVICES FURNISHED IN 
                   ALASKA.

       Section 1848(b) (42 U.S.C. 1395w-4(b)) is amended--
       (1) in paragraph (1), in the matter preceding subparagraph 
     (A), by striking ``paragraph (2)'' and inserting ``paragraphs 
     (2) and (4)''; and
       (2) by adding at the end the following new paragraph:
       ``(4) Treatment of physicians' services furnished in 
     alaska.--
       ``(A) In general.--With respect to physicians' services 
     furnished in Alaska on or after January 1, 2004, and before 
     January 1, 2006, the fee schedule for such services shall be 
     determined as follows:
       ``(i) Subject to clause (ii), the payment amount for a 
     service furnished in a year shall be an amount equal to--

       ``(I) in the case of services furnished in calendar year 
     2004, 90 percent of the VA Alaska fee schedule amount for the 
     service for fiscal year 2001; and
       ``(II) in the case of services furnished in calendar year 
     2005, the amount determined under subclause (I) for 2004, 
     increased by the annual update determined under subsection 
     (d) for the year involved.

       ``(ii) In the case of a service for which there was no VA 
     Alaska fee schedule amount for fiscal year 2001, the payment 
     amount shall be an amount equal to the sum of--

       ``(I) the amount of payment for the service that would 
     otherwise apply under this section; plus
       ``(II) an amount equal to the applicable percent (as 
     described in subparagraph (C)) of the amount described in 
     subclause (I).

       ``(B) VA alaska fee schedule amount.--For purposes of this 
     paragraph, the term `VA Alaska fee schedule amount' means the 
     amount that was paid by the Department of Veterans Affairs in 
     Alaska in fiscal year 2001 for non-Department of Veterans 
     Affairs physicians' services associated with either 
     outpatient or inpatient care provided to individuals eligible 
     for hospital care or medical services under chapter 17 of 
     title 38, United States Code, at a non-Department facility 
     (as that term is defined in section 1701(4) of such title 38.
       ``(C) Applicable percent.--For purposes of this paragraph, 
     the term `applicable percent' means the weighted average 
     percentage (based on claims under this section) by which the 
     fiscal year 2001 VA Alaska fee schedule amount for 
     physicians' services exceeded the amount of payment for such 
     services under this section that applied in Alaska in 
     2001.''.

     SEC. 450E. DEMONSTRATION PROJECT TO EXAMINE WHAT WEIGHT LOSS 
                   WEIGHT MANAGEMENT SERVICES CAN COST EFFECTIVELY 
                   REACH THE SAME RESULT AS THE NIH DIABETES 
                   PRIMARY PREVENTION TRIAL STUDY: A 50 PERCENT 
                   REDUCTION IN THE RISK FOR TYPE 2 DIABETES FOR 
                   INDIVIDUALS WHO HAVE IMPAIRED GLUCOSE TOLERANCE 
                   AND ARE OBESE.

       (a) In General.--Inasmuch as the NIH Diabetes Primary 
     Prevention Trial study proved that the risk of type 2 
     diabetes could be cut in half when the Institute of Medicine 
     definition of successful weight loss (5 percent weight loss 
     maintained for a year) is achieved by individuals at risk for 
     type 2 diabetes due to obesity and impaired glucose 
     tolerance, the Secretary shall conduct a demonstration 
     project to examine the cost effectiveness and health benefits 
     of providing group weight loss management services to achieve 
     the same result for beneficiaries under the medicare program 
     under title XVIII of the Social Security Act who are obese 
     and have impaired glucose tolerance.
       (b) Limitation.--The cost of the group weight loss 
     management services provided under subsection (a) shall not 
     exceed the cost per recipient per year of the medical 
     nutritional therapy benefit currently available to medicare 
     beneficiaries.
       (c) Scope of Services.--
       (1) Duration.--The project shall be conducted for a period 
     of 2 fiscal years.
       (2) Sites.--The Secretary shall designate the sites at 
     which to conduct the demonstration program under this 
     section. In selecting sites under this paragraph, the 
     Secretary shall give preference to sites located in--
       (A) rural areas; or
       (B) areas that have a high concentration of Native 
     Americans with type 2 diabetes.
       (3) Funding.--
       (A) In general.--Subject to subparagraph (B), the Secretary 
     shall provide for the transfer from the Federal Supplementary 
     Insurance Trust Fund established under section 1841 of such 
     Act (42 U.S.C. 1395t) of such funds as are necessary for the 
     costs of carrying out the demonstration program under this 
     section.
       (B) Limitation.--The total amount of the payments that may 
     be made under this section shall not exceed $2,500,000 for 
     each fiscal year in which the project is conducted under 
     paragraph (1).
       (d) Coverage as Medicare Part B Services.--
       (1) In general.--Subject to the succeeding provisions of 
     this subsection, medical nutrition therapy services furnished 
     under the project shall be considered to be services covered 
     under part B of title XVIII of the Social Security Act (42 
     U.S.C. 1395j et seq.).
       (2) Payment.--Payment for such services shall be made at a 
     rate of 80 percent of the lesser of the actual charge for the 
     services or 85 percent of the fee schedule amount provided 
     under section 1848 of the Social Security Act (42 U.S.C. 
     139w-4) for the same services if such services were furnished 
     by a physician.
       (3) Application of limits of billing.--The provisions of 
     section 1842(b)(18) of the Social Security Act (42 U.S.C. 
     1395u(b)(18)) shall apply to a group weight loss management 
     professional furnishing services under the project in the 
     same manner as they to a practitioner described in 
     subparagraph (C) of such section furnishing services under 
     title XVIII of such Act.
       (e) Reports.--The Secretary shall submit to the Committee 
     on Ways and Means and the Committee on Commerce of the House 
     of Representatives and the Committee on Finance of the Senate 
     interim reports on the project and a final report on the 
     project not later than the date that is 6 months after the 
     date on which the project concludes. The final report shall 
     include an evaluation of the impact of the use of group 
     weight loss management services as part of medical nutrition 
     therapy on medicare beneficiaries and on the medicare 
     program, including any impact on reducing costs under the 
     program and improving the health of beneficiaries.
       (f) Definitions.--For purposes of this section:
       (1) The term ``obesity'' means that an individual has a 
     Body Mass Index (BMI) of 30 and above.
       (2) Group weight loss management services.--The term 
     ``group weight loss management services'' means comprehensive 
     services furnished to individuals who have been diagnosed and 
     referred by a physician as having impaired glucose tolerance 
     and who are obese that consist of--
       (A) assessment and treatment based on the needs of 
     individuals as determined by a group weight loss management 
     professional; or
       (B) a specific program or method that has demonstrated its 
     efficacy to produce and maintain weight loss through results 
     published in peer-reviewed scientific journals

[[Page 16807]]

     using recognized research methods and statistical analysis 
     that provides--
       (i) assessment of current body weight and recording of 
     weight status at each meeting session;
       (ii) provision of a healthy eating plan;
       (iii) provision of an activity plan;
       (iv) provision of a behavior modification plan; and
       (v) a weekly group support meeting.
       (3) Group weight loss management professional.--The term 
     ``group weight loss management professional'' means an 
     individual who has completed training to provide a program or 
     method that has completed clinical trials and has 
     demonstrated its efficacy through publications in peer-
     reviewed scientific journals who--
       (A)(i) holds a baccalaureate or higher degree granted by a 
     regionally accredited college or university in the United 
     States (or an equivalent foreign degree) in nutrition social 
     work, psychology with experience in behavioral modification 
     methods to reduce obesity; or
       (ii) has completed a curriculum of training for a specific 
     behavioral based weight management program as described in 
     section (4)(A)(2) and recommended in the NIH Clinical 
     Guidelines on Identification, Evaluation, and Treatment of 
     Overweight and Obesity in Adults, chapter 4, section H, parts 
     1, 2, 3, 4, and pursuant to guidelines by the Secretary; and
       (B)(i) is licensed or certified as a group weight loss 
     management professional by the State in which the services 
     are performed; or
       (ii) is certified by an organization that meets such 
     criteria as the Secretary establishes with--
       (I) national organizations representing consumers such as 
     the American Obesity Association and the elderly; and
       (II) such other organizations as the Secretary determines 
     appropriate.
       On page 529, between lines 8 and 9, insert the following:

     SEC. 455. FRONTIER EXTENDED STAY CLINIC DEMONSTRATION 
                   PROJECT.

       (a) Authority To Conduct Demonstration Project.--The 
     Secretary shall waive such provisions of the medicare program 
     established under title XVIII of the Social Security Act (42 
     U.S.C. 1395 et seq.) as are necessary to conduct a 
     demonstration project under which frontier extended stay 
     clinics described in subsection (b) in isolated rural areas 
     are treated as providers of items and services under the 
     medicare program.
       (b) Clinics Described.--A frontier extended stay clinic is 
     described in this subsection if the clinic--
       (1) is located in a community where the closest short-term 
     acute care hospital or critical access hospital is at least 
     75 miles away from the community or is inaccessible by public 
     road; and
       (2) is designed to address the needs of--
       (A) seriously or critically ill or injured patients who, 
     due to adverse weather conditions or other reasons, cannot be 
     transferred quickly to acute care referral centers; or
       (B) patients who need monitoring and observation for a 
     limited period of time.
       (c) Definitions.--In this section, the terms ``hospital'' 
     and ``critical access hospital'' have the meanings given such 
     terms in subsections (e) and (mm), respectively, of section 
     1861 of the Social Security Act (42 U.S.C. 1395x).

     SEC. 456. MEDICARE SECONDARY PAYOR (MSP) PROVISIONS.

       (a) Technical Amendment Concerning Secretary's Authority To 
     Make Conditional Payment When Certain Primary Plans Do Not 
     Pay Promptly.--
       (1) In general.--Section 1862(b)(2) (42 U.S.C. 1395y(b)(2)) 
     is amended--
       (A) in subparagraph (A)(ii), by striking ``promptly (as 
     determined in accordance with regulations)'';
       (B) in subparagraph (B)--
       (i) by redesignating clauses (i) through (iii) as clauses 
     (ii) through (iv), respectively; and
       (ii) by inserting before clause (ii), as so redesignated, 
     the following new clause:
       ``(i) Authority to make conditional payment.--The Secretary 
     may make payment under this title with respect to an item or 
     service if a primary plan described in subparagraph (A)(ii) 
     has not made or cannot reasonably be expected to make payment 
     with respect to such item or service promptly (as determined 
     in accordance with regulations). Any such payment by the 
     Secretary shall be conditioned on reimbursement to the 
     appropriate Trust Fund in accordance with the succeeding 
     provisions of this subsection.''.
       (2) Effective date.--The amendments made by paragraph (1) 
     shall be effective as if included in the enactment of title 
     III of the Medicare and Medicaid Budget Reconciliation 
     Amendments of 1984 (Public Law 98-369).
       (b) Clarifying Amendments to Conditional Payment 
     Provisions.--Section 1862(b)(2) (42 U.S.C. 1395y(b)(2)) is 
     further amended--
       (1) in subparagraph (A), in the matter following clause 
     (ii), by inserting the following sentence at the end: ``An 
     entity that engages in a business, trade, or profession shall 
     be deemed to have a self-insured plan if it carries its own 
     risk (whether by a failure to obtain insurance, or otherwise) 
     in whole or in part.'';
       (2) in subparagraph (B)(ii), as redesignated by subsection 
     (a)(2)(B)--
       (A) by striking the first sentence and inserting the 
     following: ``A primary plan, and an entity that receives 
     payment from a primary plan, shall reimburse the appropriate 
     Trust Fund for any payment made by the Secretary under this 
     title with respect to an item or service if it is 
     demonstrated that such primary plan has or had a 
     responsibility to make payment with respect to such item or 
     service. A primary plan's responsibility for such payment may 
     be demonstrated by a judgment, a payment conditioned upon the 
     recipient's compromise, waiver, or release (whether or not 
     there is a determination or admission of liability) of 
     payment for items or services included in a claim against the 
     primary plan or the primary plan's insured, or by other 
     means.''; and
       (B) in the final sentence, by striking ``on the date such 
     notice or other information is received'' and inserting ``on 
     the date notice of, or information related to, a primary 
     plan's responsibility for such payment or other information 
     is received''; and
       (3) in subparagraph (B)(iii), , as redesignated by 
     subsection (a)(2)(B), by striking the first sentence and 
     inserting the following: ``In order to recover payment made 
     under this title for an item or service, the United States 
     may bring an action against any or all entities that are or 
     were required or responsible (directly, as an insurer or 
     self-insurer, as a third-party administrator, as an employer 
     that sponsors or contributes to a group health plan, or large 
     group health plan, or otherwise) to make payment with respect 
     to the same item or service (or any portion thereof) under a 
     primary plan. The United States may, in accordance with 
     paragraph (3)(A) collect double damages against any such 
     entity. In addition, the United States may recover under this 
     clause from any entity that has received payment from a 
     primary plan or from the proceeds of a primary plan's payment 
     to any entity.''.
       (c) Clerical Amendments.--Section 1862(b) (42 U.S.C. 
     1395y(b)) is amended--
       (1) in paragraph (1)(A), by moving the indentation of 
     clauses (ii) through (v) 2 ems to the left; and
       (2) in paragraph (3)(A), by striking ``such'' before 
     ``paragraphs''.

     SEC. 457. MEDICARE PANCREATIC ISLET CELL TRANSPLANT 
                   DEMONSTRATION PROJECT.

       (a) Establishment.--In order to test the appropriateness of 
     pancreatic islet cell transplantation, not later than 120 
     days after the date of the enactment of this Act, the 
     Secretary shall establish a demonstration project which the 
     Secretary, provides for payment under the medicare program 
     under title XVIII of the Social Security Act for pancreatic 
     islet cell transplantation and related items and services in 
     the case of medicare beneficiaries who have type I (juvenile) 
     diabetes and have end stage renal disease.
       (b) Duration of Project.--The authority of the Secretary to 
     conduct the demonstration project under this section shall 
     terminate on the date that is 5 years after the date of the 
     establishment of the project.
       (c) Evaluation and Report.--The Secretary shall conduct an 
     evaluation of the outcomes of the demonstration project. Not 
     later than 120 days after the date of the termination of the 
     demonstration project under subsection (b), the Secretary 
     shall submit to Congress a report on the project, including 
     recommendations for such legislative and administrative 
     action as the Secretary deems appropriate.
       (d) Payment Methodology.--The Secretary shall establish an 
     appropriate payment methodology for the provision of items 
     and services under the demonstration project, which may 
     include a payment methodology that bundles, to the maximum 
     extent feasible, payment for all such items and services.

     SEC. 458. INCREASE IN MEDICARE PAYMENT FOR CERTAIN HOME 
                   HEALTH SERVICES.

       (a) In General.--Section 1895 of the Social Security Act 
     (42 U.S.C. 1395fff) is amended by adding at the end the 
     following:
       ``(f) Increase in Payment for Services Furnished in a Rural 
     Area.--
       ``(1) In general.--In the case of home health services 
     furnished in a rural area (as defined in section 
     1886(d)(2)(D)) on or after October 1, 2004, and before 
     October 1, 2006, the Secretary shall increase the payment 
     amount otherwise made under this section for such services by 
     10 percent.
       ``(2) Waiver of budget neutrality.--The Secretary shall not 
     reduce the standard prospective payment amount (or amounts) 
     under this section applicable to home health services 
     furnished during any period to offset the increase in 
     payments resulting from the application of paragraph (1).''.
       (b) Payment Adjustment.--Section 1895(b)(5) of the Social 
     Security Act (42 U.S. C. 1395fff(b)(5)) is amended by adding 
     at the end the following:``Notwithstanding this paragraph, 
     the total amount of the additional payments or payment 
     adjustments made under this paragraph may not exceed, with 
     respect to fiscal year 2004, 3 percent, and, with respect to 
     fiscal years 2005 and 2006, 4 percent, of the total payments 
     projected or estimated to be made based on the

[[Page 16808]]

     prospective payment system under this subsection in the year 
     involved.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to services furnished on or after October 1, 
     2003.

     SEC. 459. SENSE OF THE SENATE CONCERNING MEDICARE PAYMENT 
                   UPDATE FOR PHYSICIANS AND OTHER HEALTH 
                   PROFESSIONALS.

       (a) Findings.--The Senate makes the following findings:
       (1) The formula by which medicare payments are updated each 
     year for services furnished by physicians and other health 
     professionals is fundamentally flawed.
       (2) The flawed physician payment update formula is causing 
     a continuing physician payment crisis, and, without 
     congressional action, medicare payment rates for physicians 
     and other practitioners are predicted to fall by 4.2 percent 
     in 2004.
       (3) A physician payment cut in 2004 would the fifth cut 
     since 1991, and would be on top of a 5.4 percent cut in 2002, 
     with additional cuts estimated for 2005, 2006, and 2007. From 
     1991 through 2003, payment rates for physicians and health 
     professionals fell 14 percent behind practice cost inflation 
     as measured by medicare's own conservative estimates.
       (4) The sustainable growth rate (SGR) expenditure target, 
     which is the basis for the physician payment update, is 
     linked to the gross domestic product and penalizes physicians 
     and other practitioners for volume increases that they cannot 
     control and that the government actively promotes through new 
     coverage decisions, quality improvement activities, and other 
     initiatives that, while beneficial to patients, are not 
     reflected in the SGR.
       (b) Sense of the Senate.--It is the sense of the Senate 
     that medicare beneficiary access to quality care may be 
     compromised if Congress does not take action to prevent cuts 
     in 2004 and the following years that result from the SGR 
     formula.
       On page 542, strike lines 18 through 23, and insert the 
     following:
       ``(D) Review entity defined.--For purposes of this 
     subsection, the term `review entity' means an entity of up to 
     3 qualified reviewers drawn from existing appeals levels 
     other than the redetermination level.''.
       On page 569, between lines 3 and 4, insert the following:

     SEC. 518. REVISIONS TO APPEALS TIMEFRAMES.

       Section 1869 (42 U.S.C. 1395ff) is amended--
       (1) in subsection (a)(3)(C)(ii), by striking ``30-day 
     period'' each place it appears and inserting ``60-day 
     period'';
       (2) in subsection (c)(3)(C)(i), by striking ``30-day 
     period'' and inserting ``60-day period'';
       (3) in subsection (d)(1)(A), by striking ``90-day period'' 
     and inserting ``120-day period''; and
       (4) in subsection (d)(2)(A), by striking ``90-day period'' 
     and inserting ``120-day period''.

     SEC. 519. ELIMINATION OF REQUIREMENT TO USE SOCIAL SECURITY 
                   ADMINISTRATION ADMINISTRATIVE LAW JUDGES.

       The first sentence of section 1869(f)(2)(A)(i) (42 U.S.C. 
     1395ff(f)(2)(A)(i)) is amended by striking ``of the Social 
     Security Administration''.

     SEC. 520. ELIMINATION OF REQUIREMENT FOR DE NOVO REVIEW BY 
                   THE DEPARTMENTAL APPEALS BOARD.

       Section 1869(d)(2) (42 U.S.C. 1395ff(d)(2)) is amended to 
     read as follows:
       ``(2) 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 paragraph (1) 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.''.
       On page 595, strike lines 1 through 6.
       On page 603, after line 25, insert the following:
       (c) Authorization of Appropriations.--There are authorized 
     to be appropriated such sums as are necessary to carry out 
     section 1874A(f) of the Social Security Act, as added by 
     subsection (a).

       On page 625, between lines 19 and 20, insert the following:

                     Subtitle F--Other Improvements

     SEC. 551. INCLUSION OF ADDITIONAL INFORMATION IN NOTICES TO 
                   BENEFICIARIES ABOUT SKILLED NURSING FACILITY 
                   AND HOSPITAL BENEFITS.

       (a) In General.--The Secretary shall provide that in 
     medicare beneficiary notices provided (under section 1806(a) 
     of the Social Security Act, 42 U.S.C. 1395b-7(a)) with 
     respect to the provision of post-hospital extended care 
     services and inpatient hospital services under part A of 
     title XVIII of the Social Security Act, there shall be 
     included information on the number of days of coverage of 
     such services remaining under such part for the medicare 
     beneficiary and spell of illness involved.
       (b) Effective Date.--Subsection (a) shall apply to notices 
     provided during calendar quarters beginning more than 6 
     months after the date of enactment of this Act.

     SEC. 552. INFORMATION ON MEDICARE-CERTIFIED SKILLED NURSING 
                   FACILITIES IN HOSPITAL DISCHARGE PLANS.

       (a) Availability of Data.--The Secretary shall publicly 
     provide information that enables hospital discharge planners, 
     medicare beneficiaries, and the public to identify skilled 
     nursing facilities that are participating in the medicare 
     program.
       (b) Inclusion of Information in Certain Hospital Discharge 
     Plans.--
       (1) In general.--Section 1861(ee)(2)(D) (42 U.S.C. 
     1395x(ee)(2)(D)) is amended--
       (A) by striking ``hospice services'' and inserting 
     ``hospice care and post-hospital extended care services''; 
     and
       (B) by inserting before the period at the end the 
     following: ``and, in the case of individuals who are likely 
     to need post-hospital extended care services, the 
     availability of such services through facilities that 
     participate in the program under this title and that serve 
     the area in which the patient resides''.
       (2) Effective date.--The amendments made by paragraph (1) 
     shall apply to discharge plans made on or after such date as 
     the Secretary shall specify, but not later than 6 months 
     after the date the Secretary provides for availability of 
     information under subsection (a).

     SEC. 553. EVALUATION AND MANAGEMENT DOCUMENTATION GUIDELINES 
                   CONSIDERATION.

       The Secretary shall ensure, before making changes in 
     documentation guidelines for, or clinical examples of, or 
     codes to report evaluation and management physician services 
     under title XVIII of Social Security Act, that the process 
     used in developing such guidelines, examples, or codes was 
     widely consultative among physicians, reflects a broad 
     consensus among specialties, and would allow verification of 
     reported and furnished services.

     SEC. 554. COUNCIL FOR TECHNOLOGY AND INNOVATION.

       Section 1868 (42 U.S.C. 1395ee), as amended by section 
     534(a), is amended by adding at the end the following new 
     subsection:
       ``(c) Council for Technology and Innovation.--
       ``(1) Establishment.--The Secretary shall establish a 
     Council for Technology and Innovation within the Centers for 
     Medicare & Medicaid Services (in this section referred to as 
     `CMS').
       ``(2) Composition.--The Council shall be composed of senior 
     CMS staff and clinicians and shall be chaired by the 
     Executive Coordinator for Technology and Innovation 
     (appointed or designated under paragraph (4)).
       ``(3) Duties.--The Council shall coordinate the activities 
     of coverage, coding, and payment processes under this title 
     with respect to new technologies and procedures, including 
     new drug therapies, and shall coordinate the exchange of 
     information on new technologies between CMS and other 
     entities that make similar decisions.
       ``(4) Executive coordinator for technology and 
     innovation.--The Secretary shall appoint (or designate) a 
     noncareer appointee (as defined in section 3132(a)(7) of 
     title 5, United States Code) who shall serve as the Executive 
     Coordinator for Technology and Innovation. Such executive 
     coordinator shall report to the Administrator of CMS, shall 
     chair the Council, shall oversee the execution of its duties, 
     and shall serve as a single point of contact for outside 
     groups and entities regarding the coverage, coding, and 
     payment processes under this title.''.

     SEC. 555. TREATMENT OF CERTAIN DENTAL CLAIMS.

       (a) In General.--Section 1862 (42 U.S.C. 1395y) is amended 
     by adding after subsection (g) the following new subsection:
       ``(h)(1) Subject to paragraph (2), a group health plan (as 
     defined in subsection (a)(1)(A)(v)) providing supplemental or 
     secondary coverage to individuals also entitled to services 
     under this title shall not require a medicare claims 
     determination under this title for dental benefits 
     specifically excluded under subsection (a)(12) as a condition 
     of making a claims determination for such benefits under the 
     group health plan.
       ``(2) A group health plan may require a claims 
     determination under this title in cases involving or 
     appearing to involve inpatient dental hospital services or 
     dental services expressly covered under this title pursuant 
     to actions taken by the Secretary.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on the date that is 60 days after the date 
     of enactment of this Act.
       On page 629, between lines 17 and 18, insert the following:
       (d) Urban Health Provider Adjustment.--
       (1) In general.--Beginning with fiscal year 2004, 
     notwithstanding section 1923(f) of the Social Security Act 
     (42 U.S.C. 1396r-4(f)) and subject to paragraph (3), with 
     respect to a State, payment adjustments made under title XIX 
     of the Social Security Act (42 U.S.C. 1396 et seq.) to a 
     hospital described in paragraph (2) shall be made without 
     regard to the DSH allotment limitation for the State 
     determined under section 1923(f) of that Act (42 U.S.C. 
     1396r-4(f)).
       (2) Hospital described.--A hospital is described in this 
     paragraph if the hospital--
       (A) is owned or operated by a State (as defined for 
     purposes of title XIX of the Social Security Act), or by an 
     instrumentality or a municipal governmental unit within a 
     State (as so defined) as of January 1, 2003; and

[[Page 16809]]

       (B) is located in Marion County, Indiana.
       (3) Limitation.--The payment adjustment described in 
     paragraph (1) for fiscal year 2004 and each fiscal year 
     thereafter shall not exceed 175 percent of the costs of 
     furnishing hospital services described in section 
     1923(g)(1)(A) of the Social Security Act (42 U.S.C. 1396r-
     4(g)(1)(A)).
       On page 633, after line 21, add the following:
       (3) Application to hawaii.--Section 1923(f) (42 U.S.C. 
     1396r-4(f)), as amended by paragraph (1), is amended--
       (A) by redesignating paragraph (7) as paragraph (8); and
       (B) by inserting after paragraph (6), the following:
       ``(7) Treatment of hawaii as a low-dsh state.--The 
     Secretary shall compute a DSH allotment for the State of 
     Hawaii for each of fiscal years 2004 and 2005 in the same 
     manner as DSH allotments are determined with respect to those 
     States to which paragraph (5) applies (but without regard to 
     the requirement under such paragraph that total expenditures 
     under the State plan for disproportionate share hospital 
     adjustments for any fiscal year exceeds 0).''.
       On page 676, after line 22, add the following:

     SEC. 615. EMPLOYER FLEXIBILITY.

       (a) Medicare.--Nothing in part D of title XVIII of the 
     Social Security Act, as added by section 101, shall be 
     construed as--
       (1) preventing employment-based retiree health coverage (as 
     defined in section 1860D-20(e)(4)(B) of such Act, as so 
     added) from providing coverage that is supplemental to the 
     benefits provided under a Medicare Prescription Drug plan 
     under such part or a MedicareAdvantage plan under part C of 
     such title, as amended by this Act; or
       (2) requiring employment-based retiree health coverage (as 
     so defined) that provides medical benefits to retired 
     participants who are not eligible for medical benefits under 
     title XVIII of the Social Security Act or under a plan 
     maintained by a State or an agency thereof to provide medical 
     benefits, or the same medical benefits, to retired 
     participants who are so eligible.
       (b) ADEA.--
       (1) In General.--Section 4(l) of the Age Discrimination in 
     Employment Act of 1967 (29 U.S.C. 623(l)) is amended by 
     adding at the end the following:
       ``(4) An employee benefit plan (as defined in section 3(3) 
     of the Employee Retirement Income Security Act of 1974 (29 
     U.S.C. 1002(3))) shall not be treated as violating subsection 
     (a), (b), (c), or (e) solely because the plan provides 
     medical benefits to retired participants who are not eligible 
     for medical benefits under title XVIII of the Social Security 
     Act (42 U.S.C. 1395 et seq.) or under a plan maintained by a 
     State or an agency thereof, but does not provide medical 
     benefits, or the same medical benefits, to retired 
     participants who are so eligible.''
       (2) Effective date.--The amendment made by this subsection 
     shall apply as of the date of the enactment of this Act.

     SEC. 616. 100 PERCENT FMAP FOR MEDICAL ASSISTANCE PROVIDED TO 
                   A NATIVE HAWAIIAN THROUGH A FEDERALLY-QUALIFIED 
                   HEALTH CENTER OR A NATIVE HAWAIIAN HEALTH CARE 
                   SYSTEM UNDER THE MEDICAID PROGRAM.

       (a) Medicaid.--Section 1905(b) of the Social Security Act 
     (42 U.S.C. 1396d(b)) is amended, in the third sentence, by 
     inserting ``, and with respect to medical assistance provided 
     to a Native Hawaiian (as defined in section 12 of the Native 
     Hawaiian Health Care Improvement Act) through a Federally-
     qualified health center or a Native Hawaiian health care 
     system (as so defined) whether directly, by referral, or 
     under contract or other arrangement between a Federally-
     qualified health center or a Native Hawaiian health care 
     system and another health care provider'' before the period.
       (b) Effective Date.--The amendment made by this section 
     applies to medical assistance provided on or after the date 
     of enactment of this Act.

     SEC. 617. EXTENSION OF MORATORIUM.

       (a) In General.--Section 6408(a)(3) of the Omnibus Budget 
     Reconciliation Act of 1989, as amended by section 13642 of 
     the Omnibus Budget Reconciliation Act of 1993 and section 
     4758 of the Balanced Budget Act of 1997, is amended--
       (1) by striking ``until December 31, 2002'', and
       (2) by striking ``Kent Community Hospital Complex in 
     Michigan or.''
       (b) Effective Dates.--
       (1) Permanent extension.--The amendment made by subsection 
     (a)(1) shall take effect as if included in the amendment made 
     by section 4758 of the Balanced Budget Act of 1997.
       (2) Modification.--The amendment made by subsection (a)(2) 
     shall take effect on the date of enactment of this Act.

     SEC. 618. GAO STUDY OF PHARMACEUTICAL PRICE CONTROLS AND 
                   PATENT PROTECTIONS IN THE G-7 COUNTRIES.

       (a) Study.--The Comptroller General of the United States 
     shall conduct a study of price controls imposed on 
     pharmaceuticals in France, Germany, Italy, Japan, the United 
     Kingdom and Canada to review the impact such regulations have 
     on consumers, including American consumers, and on innovation 
     in medicine. The study shall include the following:
       (1) The pharmaceutical price control structure in each 
     country for a wide range of pharmaceuticals, compared with 
     average pharmaceutical prices paid by Americans covered by 
     private sector health insurance.
       (2) The proportion of the cost for innovation borne by 
     American consumers, compared with consumers in the other 6 
     countries.
       (3) A review of how closely the observed prices in 
     regulated markets correspond to the prices that efficiently 
     distribute common costs of production (``Ramsey prices'').
       (4) A review of any peer-reviewed literature that might 
     show the health consequences to patients in the listed 
     countries that result from the absence or delayed 
     introduction of medicines, including the cost of not having 
     access to medicines, in terms of lower life expectancy and 
     lower quality of health.
       (5) The impact on American consumers, in terms of reduced 
     research into new or improved pharmaceuticals (including the 
     cost of delaying the introduction of a significant advance in 
     certain major diseases), if similar price controls were 
     adopted in the United States.
       (6) The existing standards under international conventions, 
     including the World Trade Organization and the North American 
     Free Trade Agreement, regarding regulated pharmaceutical 
     prices, including any restrictions on anti-competitive laws 
     that might apply to price regulations and how economic harm 
     caused to consumers in markets without price regulations may 
     be remedied.
       (7) In parallel trade regimes, how much of the price 
     difference between countries in the European Union is 
     captured by middlemen and how much goes to benefit patients 
     and health systems where parallel importing is significant.
       (8) How much cost is imposed on the owner of a property 
     right from counterfeiting and from international violations 
     of intellectual property rights for prescription medicines.
       (b) Report.--Not later than 1 year after the date of 
     enactment of this Act, the Comptroller General of the United 
     States shall submit to Congress a report on the study 
     conducted under subsection (a).

     SEC. 619. SAFETY NET ORGANIZATIONS AND PATIENT ADVISORY 
                   COMMISSION.

       (a) In General.--Title XI (42 U.S.C. 1320 et seq.) is 
     amended by adding at the end the following new part:

   ``Part D--Safety Net Organizations and Patient Advisory Commission


       ``safety net organizations and patient advisory commission

       ``Sec. 1181. (a) Establishment.--There is hereby 
     established the Safety Net Organizations and Patient Advisory 
     Commission (in this section referred to as the `Commission').
       ``(b) Review of Health Care Safety Net Programs and 
     Reporting Requirements.--
       ``(1) Review.--The Commission shall conduct an ongoing 
     review of the health care safety net programs (as described 
     in paragraph (3)(C)) by--
       ``(A) monitoring each health care safety net program to 
     document and analyze the effects of changes in these programs 
     on the core health care safety net;
       ``(B) evaluating the impact of the Emergency Medical 
     Treatment and Labor Act, the Health Insurance Portability and 
     Accountability Act of 1996, the Balanced Budget Act of 1997, 
     the Medicare, Medicaid, and SCHIP Balanced Budget Refinement 
     Act of 1999, the Medicare, Medicaid, and SCHIP Benefits 
     Protection and Improvement Act of 2000, Prescription Drug and 
     Medicare Improvement Act of 2003, and other forces on the 
     capacity of the core health care safety net to continue their 
     roles in the core health care safety net system to care for 
     uninsured individuals, medicaid beneficiaries, and other 
     vulnerable populations;
       ``(C) monitoring existing data sets to assess the status of 
     the core health care safety net and health outcomes for 
     vulnerable populations;
       ``(D) wherever possible, linking and integrating existing 
     data systems to enhance the ability of the core health care 
     safety net to track changes in the status of the core health 
     care safety net and health outcomes for vulnerable 
     populations;
       ``(E) supporting the development of new data systems where 
     existing data are insufficient or inadequate;
       ``(F) developing criteria and indicators of impending core 
     health care safety net failure;
       ``(G) establishing an early-warning system to identify 
     impending failures of core health care safety net systems and 
     providers;
       ``(H) providing accurate and timely information to Federal, 
     State, and local policymakers on the indicators that may lead 
     to the failure of the core health care safety net and an 
     estimate of the projected consequences of such failures and 
     the impact of such a failure on the community;
       ``(I) monitoring and providing oversight for the transition 
     of individuals receiving supplemental security income 
     benefits, medical assistance under title XIX, or child health 
     assistance under title XXI who enroll with a managed care 
     entity (as defined in section 1932(a)(1)(B)), including the 
     review of--
       ``(i) the degree to which health plans have the capacity 
     (including case management

[[Page 16810]]

     and management information system infrastructure) to provide 
     quality managed care services to such an individual;
       ``(ii) the degree to which these plans may be overburdened 
     by adverse selection; and
       ``(iii) the degree to which emergency departments are used 
     by enrollees of these plans; and
       ``(J) identifying and disseminating the best practices for 
     more effective application of the lessons that have been 
     learned.
       ``(2) Reports.--
       ``(A) Annual reports.--Not later than June 1 of each year 
     (beginning with 2005), the Commission shall, based on the 
     review conducted under paragraph (1), submit to the 
     appropriate committees of Congress a report on--
       ``(i) the health care needs of the uninsured; and
       ``(ii) the financial and infrastructure stability of the 
     Nation's core health care safety net.
       ``(B) Agenda and additional reviews.--
       ``(i) Agenda.--The Chair of the Commission shall consult 
     periodically with the Chairpersons and Ranking Minority 
     Members of the appropriate committees of Congress regarding 
     the Commission's agenda and progress toward achieving the 
     agenda.
       ``(ii) Additional reviews.--The Commission shall conduct 
     additional reviews and submit additional reports to the 
     appropriate committees of Congress on topics relating to the 
     health care safety net programs under the following 
     circumstances:

       ``(I) If requested by the Chairpersons or Ranking Minority 
     Members of such committees.
       ``(II) If the Commission deems such additional reviews and 
     reports appropriate.

       ``(C) Availability of reports.--The Commission shall 
     transmit to the Comptroller General and the Secretary a copy 
     of each report submitted under this subsection and shall make 
     such reports available to the public.
       ``(3) Definitions.--In this section:
       ``(A) Appropriate committees of congress.--The term 
     `appropriate committees of Congress' means the Committees on 
     Ways and Means and Energy and Commerce of the House of 
     Representatives and the Committees on Finance and Health, 
     Education, Labor, and Pensions of the Senate.
       ``(B) Core health care safety net.--The term `core health 
     care safety net' means any health care provider that--
       ``(i) by legal mandate or explicitly adopted mission, 
     offers access to health care services to patients, regardless 
     of the ability of the patient to pay for such services; and
       ``(ii) has a case mix that is substantially comprised of 
     patients who are uninsured, covered under the medicaid 
     program, covered under any other public health care program, 
     or are otherwise vulnerable populations.

     Such term includes disproportionate share hospitals, 
     Federally qualified health centers, other Federal, State, and 
     locally supported clinics, rural health clinics, local health 
     departments, and providers covered under the Emergency 
     Medical Treatment and Labor Act.
       ``(C) Health care safety net programs.--The term `health 
     care safety net programs' includes the following:
       ``(i) Medicaid.--The medicaid program under title XIX.
       ``(ii) SCHIP.--The State children's health insurance 
     program under title XXI.
       ``(iii) Maternal and child health services block grant 
     program.--The maternal and child health services block grant 
     program under title V.
       ``(iv) FQHC programs.--Each federally funded program under 
     which a health center (as defined in section 330(1) of the 
     Public Health Service Act), a Federally qualified health 
     center (as defined in section 1861(aa)(4)), or a Federally-
     qualified health center (as defined in section 1905(l)(2)(B)) 
     receives funds.
       ``(v) RHC programs.--Each federally funded program under 
     which a rural health clinic (as defined in section 
     1861(aa)(4) or 1905(l)(1)) receives funds.
       ``(vi) DSH payment programs.--Each federally funded program 
     under which a disproportionate share hospital receives funds.
       ``(vii) Emergency medical treatment and active labor act.--
     All care provided under section 1867 for the uninsured, 
     underinsured, beneficiaries under title XIX, and other 
     vulnerable individuals.
       ``(viii) Other health care safety net programs.--Such term 
     also includes any other health care program that the 
     Commission determines to be appropriate.
       ``(D) Vulnerable populations.--The term `vulnerable 
     populations' includes uninsured and underinsured individuals, 
     low-income individuals, farm workers, homeless individuals, 
     individuals with disabilities, individuals with HIV or AIDS, 
     and such other individuals as the Commission may designate.
       ``(c) Membership.--
       ``(1) Number and appointment.--The Commission shall be 
     composed of 13 members appointed by the Comptroller General 
     of the United States (in this section referred to as the 
     `Comptroller General'), in consultation with the appropriate 
     committees of Congress.
       ``(2) Qualifications.--
       ``(A) In general.--The membership of the Commission shall 
     include individuals with national recognition for their 
     expertise in health finance and economics, health care safety 
     net research and program management, actuarial science, 
     health facility management, health plans and integrated 
     delivery systems, reimbursement of health facilities, 
     allopathic and osteopathic medicine (including emergency 
     medicine), and other providers of health services, and other 
     related fields, who provide a mix of different professionals, 
     broad geographic representation, and a balance between urban 
     and rural representatives.
       ``(B) Inclusion.--The membership of the Commission shall 
     include health professionals, employers, third-party payers, 
     individuals skilled in the conduct and interpretation of 
     biomedical, health services, and health economics research 
     and expertise in outcomes and effectiveness research and 
     technology assessment. Such membership shall also include 
     recipients of care from core health care safety net and 
     individuals who provide and manage the delivery of care by 
     the core health care safety net.
       ``(C) Majority nonproviders.--Individuals who are directly 
     involved in the provision, or management of the delivery, of 
     items and services covered under the health care safety net 
     programs shall not constitute a majority of the membership of 
     the Commission.
       ``(D) Ethical disclosure.--The Comptroller General shall 
     establish a system for public disclosure by members of the 
     Commission of financial and other potential conflicts of 
     interest relating to such members.
       ``(3) Terms.--
       ``(A) In general.--The terms of members of the Commission 
     shall be for 3 years except that of the members first 
     appointed, the Comptroller General shall designate--
       ``(i) four to serve a term of 1 year;
       ``(ii) four to serve a term of 2 years; and
       ``(iii) five to serve a term of 3 years.
       ``(B) Vacancies.--
       ``(i) In general.--A vacancy in the Commission shall be 
     filled in the same manner in which the original appointment 
     was made.
       ``(ii) Appointment.--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.
       ``(iii) Terms.--A member may serve after the expiration of 
     that member's term until a successor has taken office.
       ``(4) Compensation.--
       ``(A) Members.--While serving on the business of the 
     Commission (including travel time), a member of the 
     Commission--
       ``(i) shall be entitled to compensation at the per diem 
     equivalent of the rate provided for level IV of the Executive 
     Schedule under section 5315 of title 5, United States Code; 
     and
       ``(ii) while so serving away from home and the member's 
     regular place of business, may be allowed travel expenses, as 
     authorized by the Commission.
       ``(B) Treatment.--For purposes of pay (other than pay of 
     members of the Commission) and employment benefits, rights, 
     and privileges, all personnel of the Commission shall be 
     treated as if they were employees of the United States 
     Senate.
       ``(5) Chair; vice chair.--The Comptroller General shall 
     designate a member of the Commission, at the time of 
     appointment of the member as Chair and a member as Vice Chair 
     for that term of appointment, except that in the case of 
     vacancy of the Chair or Vice Chair, the Comptroller General 
     may designate another member for the remainder of that 
     member's term.
       ``(6) Meetings.--The Commission shall meet at the call of 
     the Chair or upon the written request of a majority of its 
     members.
       ``(d) Director and Staff; Experts and Consultants.--Subject 
     to such review as the Comptroller General determines 
     necessary to ensure the efficient administration of the 
     Commission, the Commission may--
       ``(1) employ and fix the compensation of an Executive 
     Director (subject to the approval of the Comptroller General) 
     and such other personnel as may be necessary to carry out the 
     duties of the Commission under this section (without regard 
     to the provisions of title 5, United States Code, governing 
     appointments in the competitive service);
       ``(2) seek such assistance and support as may be required 
     in the performance of the duties of the Commission under this 
     section from appropriate Federal departments and agencies;
       ``(3) enter into contracts or make other arrangements, as 
     may be necessary for the conduct of the work of the 
     Commission (without regard to section 3709 of the Revised 
     Statutes (41 U.S.C. 5));
       ``(4) make advance, progress, and other payments which 
     relate to the work of the Commission;
       ``(5) provide transportation and subsistence for persons 
     serving without compensation; and
       ``(6) prescribe such rules and regulations as it deems 
     necessary with respect to the internal organization and 
     operation of the Commission.
       ``(e) Powers.--
       ``(1) Obtaining official data.--
       ``(A) In general.--The Commission may secure directly from 
     any department or

[[Page 16811]]

     agency of the United States information necessary for the 
     Commission to carry the duties under this section.
       ``(B) Request of chair.--Upon request of the Chair, the 
     head of that department or agency shall furnish that 
     information to the Commission on an agreed upon schedule.
       ``(2) Data collection.--In order to carry out the duties of 
     the Commission under this section, the Commission shall--
       ``(A) use existing information, both published and 
     unpublished, where possible, collected and assessed either by 
     the staff of the Commission or under other arrangements made 
     in accordance with this section;
       ``(B) carry out, or award grants or contracts for, original 
     research and experimentation, where existing information is 
     inadequate; and
       ``(C) adopt procedures allowing any interested party to 
     submit information for the Commission's use in making reports 
     and recommendations.
       ``(3) Access of gao to information.--The Comptroller 
     General shall have unrestricted access to all deliberations, 
     records, and nonproprietary data that pertains to the work of 
     the Commission, immediately upon request. The expense of 
     providing such information shall be borne by the General 
     Accounting Office.
       ``(4) Periodic audit.--The Commission shall be subject to 
     periodic audit by the Comptroller General.
       ``(f) Application of FACA.--Section 14 of the Federal 
     Advisory Committee Act (5 U.S.C. App.) does not apply to the 
     Commission.
       ``(g) Authorization of Appropriations.--
       ``(1) Request for appropriations.--The Commission shall 
     submit requests for appropriations in the same manner as the 
     Comptroller General submits requests for appropriations, but 
     amounts appropriated for the Commission shall be separate 
     from amounts appropriated for the Comptroller General.
       ``(2) Authorization.--There are authorized to be 
     appropriated such sums as may be necessary to carry out the 
     provisions of this section.''.
       (b) Effective Date.--The Comptroller General of the United 
     States shall appoint the initial members of the Safety Net 
     Organizations and Patient Advisory Commission established 
     under subsection (a) not later than June 1, 2004.

     SEC. 620. ESTABLISHMENT OF PROGRAM TO PREVENT ABUSE OF 
                   NURSING FACILITY RESIDENTS.

       (a) In General.--
       (1) Screening of skilled nursing facility and nursing 
     facility provisional employees.--
       (A) Medicare program.--Section 1819(b) (42 U.S.C. 1395i-
     3(b)) is amended by adding at the end the following:
       ``(8) Screening of skilled nursing facility workers.--
       ``(A) Background checks of provisional employees.--Subject 
     to subparagraph (B)(ii), after a skilled nursing facility 
     selects an individual for a position as a skilled nursing 
     facility worker, the facility, prior to employing such worker 
     in a status other than a provisional status to the extent 
     permitted under subparagraph (B)(ii), shall--
       ``(i) give such worker written notice that the facility is 
     required to perform background checks with respect to 
     provisional employees;
       ``(ii) require, as a condition of employment, that such 
     worker--

       ``(I) provide a written statement disclosing any conviction 
     for a relevant crime or finding of patient or resident abuse;
       ``(II) provide a statement signed by the worker authorizing 
     the facility to request the search and exchange of criminal 
     records;
       ``(III) provide in person to the facility a copy of the 
     worker's fingerprints or thumb print, depending upon 
     available technology; and
       ``(IV) provide any other identification information the 
     Secretary may specify in regulation;

       ``(iii) initiate a check of the data collection system 
     established under section 1128E in accordance with 
     regulations promulgated by the Secretary to determine whether 
     such system contains any disqualifying information with 
     respect to such worker; and
       ``(iv) if that system does not contain any such 
     disqualifying information--

       ``(I) request through the appropriate State agency that the 
     State initiate a State and national criminal background check 
     on such worker in accordance with the provisions of 
     subsection (e)(6); and
       ``(II) submit to such State agency the information 
     described in subclauses (II) through (IV) of clause (ii) not 
     more than 7 days (excluding Saturdays, Sundays, and legal 
     public holidays under section 6103(a) of title 5, United 
     States Code) after completion of the check against the system 
     initiated under clause (iii).

       ``(B) Prohibition on hiring of abusive workers.--
       ``(i) In general.--A skilled nursing facility may not 
     knowingly employ any skilled nursing facility worker who has 
     any conviction for a relevant crime or with respect to whom a 
     finding of patient or resident abuse has been made.
       ``(ii) Provisional employment.--After complying with the 
     requirements of clauses (i), (ii), and (iii) of subparagraph 
     (A), a skilled nursing facility may provide for a provisional 
     period of employment for a skilled nursing facility worker 
     pending completion of the check against the data collection 
     system described under subparagraph (A)(iii) and the 
     background check described under subparagraph (A)(iv). 
     Subject to clause (iii), such facility shall maintain direct 
     supervision of the covered individual during the worker's 
     provisional period of employment.
       ``(iii) Exception for small rural skilled nursing 
     facilities.--In the case of a small rural skilled nursing 
     facility (as defined by the Secretary), the Secretary shall 
     provide, by regulation after consultation with providers of 
     skilled nursing facility services and entities representing 
     beneficiaries of such services, for an appropriate level of 
     supervision with respect to any provisional employees 
     employed by the facility in accordance with clause (ii). Such 
     regulation should encourage the provision of direct 
     supervision of such employees whenever practicable with 
     respect to such a facility and if such supervision would not 
     impose an unreasonable cost or other burden on the facility.
       ``(C) Reporting requirements.--A skilled nursing facility 
     shall report to the State any instance in which the facility 
     determines that a skilled nursing facility worker has 
     committed an act of resident neglect or abuse or 
     misappropriation of resident property in the course of 
     employment by the facility.
       ``(D) Use of information.--
       ``(i) In general.--A skilled nursing facility that obtains 
     information about a skilled nursing facility worker pursuant 
     to clauses (iii) and (iv) of subparagraph (A) may use such 
     information only for the purpose of determining the 
     suitability of the worker for employment.
       ``(ii) Immunity from liability.--A skilled nursing facility 
     that, in denying employment for an individual selected for 
     hiring as a skilled nursing facility worker (including during 
     the period described in subparagraph (B)(ii)), reasonably 
     relies upon information about such individual provided by the 
     State pursuant to subsection (e)(6) or section 1128E shall 
     not be liable in any action brought by such individual based 
     on the employment determination resulting from the 
     information.
       ``(iii) Criminal penalty.--Whoever knowingly violates the 
     provisions of clause (i) shall be fined in accordance with 
     title 18, United States Code, imprisoned for not more than 2 
     years, or both.
       ``(E) Civil penalty.--
       ``(i) In general.--A skilled nursing facility that violates 
     the provisions of this paragraph shall be subject to a civil 
     penalty in an amount not to exceed--

       ``(I) for the first such violation, $2,000; and
       ``(II) for the second and each subsequent violation within 
     any 5-year period, $5,000.

       ``(ii) Knowing retention of worker.--In addition to any 
     civil penalty under clause (i), a skilled nursing facility 
     that--

       ``(I) knowingly continues to employ a skilled nursing 
     facility worker in violation of subparagraph (A) or (B); or
       ``(II) knowingly fails to report a skilled nursing facility 
     worker under subparagraph (C),

     shall be subject to a civil penalty in an amount not to 
     exceed $5,000 for the first such violation, and $10,000 for 
     the second and each subsequent violation within any 5-year 
     period.
       ``(F) Definitions.--In this paragraph:
       ``(i) Conviction for a relevant crime.--The term 
     `conviction for a relevant crime' means any Federal or State 
     criminal conviction for--

       ``(I) any offense described in paragraphs (1) through (4) 
     of section 1128(a); and
       ``(II) such other types of offenses as the Secretary may 
     specify in regulations, taking into account the severity and 
     relevance of such offenses, and after consultation with 
     representatives of long-term care providers, representatives 
     of long-term care employees, consumer advocates, and 
     appropriate Federal and State officials.

       ``(ii) Disqualifying information.--The term `disqualifying 
     information' means information about a conviction for a 
     relevant crime or a finding of patient or resident abuse.
       ``(iii) Finding of patient or resident abuse.--The term 
     `finding of patient or resident abuse' means any 
     substantiated finding by a State agency under subsection 
     (g)(1)(C) or a Federal agency that a skilled nursing facility 
     worker has committed--

       ``(I) an act of patient or resident abuse or neglect or a 
     misappropriation of patient or resident property; or
       ``(II) such other types of acts as the Secretary may 
     specify in regulations.

       ``(iv) Skilled nursing facility worker.--The term `skilled 
     nursing facility worker' means any individual (other than a 
     volunteer) that has access to a patient of a skilled nursing 
     facility under an employment or other contract, or both, with 
     such facility. Such term includes individuals who are 
     licensed or certified by the State to provide such services, 
     and nonlicensed individuals providing such services, as 
     defined by the Secretary, including nurse assistants, nurse 
     aides, home health aides, and personal care workers and 
     attendants.''.

[[Page 16812]]

       (B) Medicaid program.--Section 1919(b) (42 U.S.C. 1396r(b)) 
     is amended by adding at the end the following new paragraph:
       ``(8) Screening of nursing facility workers.--
       ``(A) Background checks on provisional employees.--Subject 
     to subparagraph (B)(ii), after a nursing facility selects an 
     individual for a position as a nursing facility worker, the 
     facility, prior to employing such worker in a status other 
     than a provisional status to the extent permitted under 
     subparagraph (B)(ii), shall--
       ``(i) give the worker written notice that the facility is 
     required to perform background checks with respect to 
     provisional employees;
       ``(ii) require, as a condition of employment, that such 
     worker--

       ``(I) provide a written statement disclosing any conviction 
     for a relevant crime or finding of patient or resident abuse;
       ``(II) provide a statement signed by the worker authorizing 
     the facility to request the search and exchange of criminal 
     records;
       ``(III) provide in person to the facility a copy of the 
     worker's fingerprints or thumb print, depending upon 
     available technology; and
       ``(IV) provide any other identification information the 
     Secretary may specify in regulation;

       ``(iii) initiate a check of the data collection system 
     established under section 1128E in accordance with 
     regulations promulgated by the Secretary to determine whether 
     such system contains any disqualifying information with 
     respect to such worker; and
       ``(iv) if that system does not contain any such 
     disqualifying information--

       ``(I) request through the appropriate State agency that the 
     State initiate a State and national criminal background check 
     on such worker in accordance with the provisions of 
     subsection (e)(8); and
       ``(II) submit to such State agency the information 
     described in subclauses (II) through (IV) of clause (ii) not 
     more than 7 days (excluding Saturdays, Sundays, and legal 
     public holidays under section 6103(a) of title 5, United 
     States Code) after completion of the check against the system 
     initiated under clause (iii).

       ``(B) Prohibition on hiring of abusive workers.--
       ``(i) In general.--A nursing facility may not knowingly 
     employ any nursing facility worker who has any conviction for 
     a relevant crime or with respect to whom a finding of patient 
     or resident abuse has been made.
       ``(ii) Provisional employment.--After complying with the 
     requirements of clauses (i), (ii), and (iii) of subparagraph 
     (A), a nursing facility may provide for a provisional period 
     of employment for a nursing facility worker pending 
     completion of the check against the data collection system 
     described under subparagraph (A)(iii) and the background 
     check described under subparagraph (A)(iv). Subject to clause 
     (iii), such facility shall maintain direct supervision of the 
     worker during the worker's provisional period of employment.
       ``(iii) Exception for small rural nursing facilities.--

       ``(I) In general.--In the case of a small rural nursing 
     facility (as defined by the Secretary), the Secretary shall 
     provide, by regulation after consultation with providers of 
     nursing facility services and entities representing 
     beneficiaries of such services, for an appropriate level of 
     supervision with respect to any provisional employees 
     employed by the facility in accordance with clause (ii). Such 
     regulation should encourage the provision of direct 
     supervision of such employees whenever practicable with 
     respect to such a facility and if such supervision would not 
     impose an unreasonable cost or other burden on the facility.

       ``(C) Reporting requirements.--A nursing facility shall 
     report to the State any instance in which the facility 
     determines that a nursing facility worker has committed an 
     act of resident neglect or abuse or misappropriation of 
     resident property in the course of employment by the 
     facility.
       ``(D) Use of information.--
       ``(i) In general.--A nursing facility that obtains 
     information about a nursing facility worker pursuant to 
     clauses (iii) and (iv) of subparagraph (A) may use such 
     information only for the purpose of determining the 
     suitability of the worker for employment.
       ``(ii) Immunity from liability.--A nursing facility that, 
     in denying employment for an individual selected for hiring 
     as a nursing facility worker (including during the period 
     described in subparagraph (B)(ii)), reasonably relies upon 
     information about such individual provided by the State 
     pursuant to subsection (e)(6) or section 1128E shall not be 
     liable in any action brought by such individual based on the 
     employment determination resulting from the information.
       ``(iii) Criminal penalty.--Whoever knowingly violates the 
     provisions of clause (i) shall be fined in accordance with 
     title 18, United States Code, imprisoned for not more than 2 
     years, or both.
       ``(E) Civil penalty.--
       ``(i) In general.--A nursing facility that violates the 
     provisions of this paragraph shall be subject to a civil 
     penalty in an amount not to exceed--

       ``(I) for the first such violation, $2,000; and
       ``(II) for the second and each subsequent violation within 
     any 5-year period, $5,000.

       ``(ii) Knowing retention of worker.--In addition to any 
     civil penalty under clause (i), a nursing facility that--

       ``(I) knowingly continues to employ a nursing facility 
     worker in violation of subparagraph (A) or (B); or
       ``(II) knowingly fails to report a nursing facility worker 
     under subparagraph (C),

     shall be subject to a civil penalty in an amount not to 
     exceed $5,000 for the first such violation, and $10,000 for 
     the second and each subsequent violation within any 5-year 
     period.
       ``(F) Definitions.--In this paragraph:
       ``(i) Conviction for a relevant crime.--The term 
     `conviction for a relevant crime' means any Federal or State 
     criminal conviction for--

       ``(I) any offense described in paragraphs (1) through (4) 
     of section 1128(a); and
       ``(II) such other types of offenses as the Secretary may 
     specify in regulations, taking into account the severity and 
     relevance of such offenses, and after consultation with 
     representatives of long-term care providers, representatives 
     of long-term care employees, consumer advocates, and 
     appropriate Federal and State officials.

       ``(ii) Disqualifying information.--The term `disqualifying 
     information' means information about a conviction for a 
     relevant crime or a finding of patient or resident abuse.
       ``(iii) Finding of patient or resident abuse.--The term 
     `finding of patient or resident abuse' means any 
     substantiated finding by a State agency under subsection 
     (g)(1)(C) or a Federal agency that a nursing facility worker 
     has committed--

       ``(I) an act of patient or resident abuse or neglect or a 
     misappropriation of patient or resident property; or
       ``(II) such other types of acts as the Secretary may 
     specify in regulations.

       ``(iv) Nursing facility worker.--The term `nursing facility 
     worker' means any individual (other than a volunteer) that 
     has access to a patient of a nursing facility under an 
     employment or other contract, or both, with such facility. 
     Such term includes individuals who are licensed or certified 
     by the State to provide such services, and nonlicensed 
     individuals providing such services, as defined by the 
     Secretary, including nurse assistants, nurse aides, home 
     health aides, and personal care workers and attendants.''.
       (2) Federal responsibilities.--
       (A) Development of standard federal and state background 
     check form.--The Secretary of Health and Human Services, in 
     consultation with the Attorney General and representatives of 
     appropriate State agencies, shall develop a model form that a 
     provisional employee at a nursing facility may complete and 
     Federal and State agencies may use to conduct the criminal 
     background checks required under sections 1819(b)(8) and 
     1919(b)(8) of the Social Security Act (42 U.S.C. 1395i-3(b), 
     1396r(b)) (as added by this section).
       (B) Periodic evaluation.--The Secretary of Health and Human 
     Services, in consultation with the Attorney General, 
     periodically shall evaluate the background check system 
     imposed under sections 1819(b)(8) and 1919(b)(8) of the 
     Social Security Act (42 U.S.C. 1395i-3(b), 1396r(b)) (as 
     added by this section) and shall implement changes, as 
     necessary, based on available technology, to make the 
     background check system more efficient and able to provide a 
     more immediate response to long-term care providers using the 
     system.
       (3) No preemption of stricter state laws.--Nothing in 
     section 1819(b)(8) or 1919(b)(8) of the Social Security Act 
     (42 U.S.C. 1395i-3(b)(8), 1396r(b)(8)) (as so added) shall be 
     construed to supersede any provision of State law that--
       (A) specifies a relevant crime for purposes of prohibiting 
     the employment of an individual at a long-term care facility 
     (as defined in section 1128E(g)(6) of the Social Security Act 
     (as added by subsection (e)) that is not included in the list 
     of such crimes specified in such sections or in regulations 
     promulgated by the Secretary of Health and Human Services to 
     carry out such sections; or
       (B) requires a long-term care facility (as so defined) to 
     conduct a background check prior to employing an individual 
     in an employment position that is not included in the 
     positions for which a background check is required under such 
     sections.
       (4) Technical amendments.--Effective as if included in the 
     enactment of section 941 of BIPA (114 Stat. 2763A-585), 
     sections 1819(b) and 1919(b) (42 U.S.C. 1395i-3(b), 
     1396r(b)), as amended by such section 941 are each amended by 
     redesignating the paragraph (8) added by such section as 
     paragraph (9).
       (b) Federal and State Requirements Concerning Background 
     Checks.--
       (1) Medicare.--Section 1819(e) (42 U.S.C. 1395i-3(e)) is 
     amended by adding at the end the following:
       ``(6) Federal and state requirements concerning criminal 
     background checks on skilled nursing facility employees.--
       ``(A) In general.--Upon receipt of a request by a skilled 
     nursing facility pursuant to subsection (b)(8) that is 
     accompanied by

[[Page 16813]]

     the information described in subclauses (II) through (IV) of 
     subsection (b)(8)(A)(ii), a State, after checking appropriate 
     State records and finding no disqualifying information (as 
     defined in subsection (b)(8)(F)(ii)), shall immediately 
     submit such request and information to the Attorney General 
     and shall request the Attorney General to conduct a search 
     and exchange of records with respect to the individual as 
     described in subparagraph (B).
       ``(B) Search and exchange of records by attorney general.--
     Upon receipt of a submission pursuant to subparagraph (A), 
     the Attorney General shall direct a search of the records of 
     the Federal Bureau of Investigation for any criminal history 
     records corresponding to the fingerprints and other positive 
     identification information submitted. The Attorney General 
     shall provide any corresponding information resulting from 
     the search to the State.
       ``(C) State reporting of information to skilled nursing 
     facility.--Upon receipt of the information provided by the 
     Attorney General pursuant to subparagraph (B), the State 
     shall--
       ``(i) review the information to determine whether the 
     individual has any conviction for a relevant crime (as 
     defined in subsection (b)(8)(F)(i));
       ``(ii) immediately report to the skilled nursing facility 
     in writing the results of such review; and
       ``(iii) in the case of an individual with a conviction for 
     a relevant crime, report the existence of such conviction of 
     such individual to the database established under section 
     1128E.

       ``(D) Fees for performance of criminal background checks.--
       ``(i) Authority to charge fees.--

       ``(I) Attorney general.--The Attorney General may charge a 
     fee to any State requesting a search and exchange of records 
     pursuant to this paragraph and subsection (b)(8) for 
     conducting the search and providing the records. The amount 
     of such fee shall not exceed the lesser of the actual cost of 
     such activities or $50. Such fees shall be available to the 
     Attorney General, or, in the Attorney General's discretion, 
     to the Federal Bureau of Investigation until expended.

       ``(II) State.--A State may charge a skilled nursing 
     facility a fee for initiating the criminal background check 
     under this paragraph and subsection (b)(8), including fees 
     charged by the Attorney General, and for performing the 
     review and report required by subparagraph (C). The amount of 
     such fee shall not exceed the actual cost of such activities.

       ``(ii) Prohibition on charging.--An entity may not impose 
     on a provisional employee or an employee any charges relating 
     to the performance of a background check under this 
     paragraph.

       ``(E) Regulations.--
       ``(i) In general.--In addition to the Secretary's authority 
     to promulgate regulations under this title, the Attorney 
     General, in consultation with the Secretary, may promulgate 
     such regulations as are necessary to carry out the Attorney 
     General's responsibilities under this paragraph and 
     subsection (b)(9), including regulations regarding the 
     security confidentiality, accuracy, use, destruction, and 
     dissemination of information, audits and recordkeeping, and 
     the imposition of fees.
       ``(ii) Appeal procedures.--The Attorney General, in 
     consultation with the Secretary, shall promulgate such 
     regulations as are necessary to establish procedures by which 
     a provisional employee or an employee may appeal or dispute 
     the accuracy of the information obtained in a background 
     check conducted under this paragraph. Appeals shall be 
     limited to instances in which a provisional employee or an 
     employee is incorrectly identified as the subject of the 
     background check, or when information about the provisional 
     employee or employee has not been updated to reflect changes 
     in the provisional employee's or employee's criminal record.

       ``(F) Report.--Not later than 2 years after the date of 
     enactment of this paragraph, the Attorney General shall 
     submit a report to Congress on--

       ``(i) the number of requests for searches and exchanges of 
     records made under this section;

       ``(ii) the disposition of such requests; and

       ``(iii) the cost of responding to such requests.''.
       (2) Medicaid.--Section 1919(e) (42 U.S.C. 1396r(e)) is 
     amended by adding at the end the following:
       ``(8) Federal and state requirements concerning criminal 
     background checks on nursing facility employees.--
       ``(A) In general.--Upon receipt of a request by a nursing 
     facility pursuant to subsection (b)(8) that is accompanied by 
     the information described in subclauses (II) through (IV) of 
     subsection (b)(8)(A)(ii), a State, after checking appropriate 
     State records and finding no disqualifying information (as 
     defined in subsection (b)(8)(F)(ii)), shall immediately 
     submit such request and information to the Attorney General 
     and shall request the Attorney General to conduct a search 
     and exchange of records with respect to the individual as 
     described in subparagraph (B).
       ``(B) Search and exchange of records by attorney general.--
     Upon receipt of a submission pursuant to subparagraph (A), 
     the Attorney General shall direct a search of the records of 
     the Federal Bureau of Investigation for any criminal history 
     records corresponding to the fingerprints and other positive 
     identification information submitted. The Attorney General 
     shall provide any corresponding information resulting from 
     the search to the State.
       ``(C) State reporting of information to nursing facility.--
     Upon receipt of the information provided by the Attorney 
     General pursuant to subparagraph (B), the State shall--
       ``(i) review the information to determine whether the 
     individual has any conviction for a relevant crime (as 
     defined in subsection (b)(8)(F)(i));
       ``(ii) immediately report to the nursing facility in 
     writing the results of such review; and
       ``(iii) in the case of an individual with a conviction for 
     a relevant crime, report the existence of such conviction of 
     such individual to the database established under section 
     1128E.
       ``(D) Fees for performance of criminal background checks.--
       ``(i) Authority to charge fees.--

       ``(I) Attorney general.--The Attorney General may charge a 
     fee to any State requesting a search and exchange of records 
     pursuant to this paragraph and subsection (b)(8) for 
     conducting the search and providing the records. The amount 
     of such fee shall not exceed the lesser of the actual cost of 
     such activities or $50. Such fees shall be available to the 
     Attorney General, or, in the Attorney General's discretion, 
     to the Federal Bureau of Investigation, until expended.
       ``(II) State.--A State may charge a nursing facility a fee 
     for initiating the criminal background check under this 
     paragraph and subsection (b)(8), including fees charged by 
     the Attorney General, and for performing the review and 
     report required by subparagraph (C). The amount of such fee 
     shall not exceed the actual cost of such activities.

       ``(ii) Prohibition on charging.--An entity may not impose 
     on a provisional employee or an employee any charges relating 
     to the performance of a background check under this 
     paragraph.
       ``(E) Regulations.--
       ``(i) In general.--In addition to the Secretary's authority 
     to promulgate regulations under this title, the Attorney 
     General, in consultation with the Secretary, may promulgate 
     such regulations as are necessary to carry out the Attorney 
     General's responsibilities under this paragraph and 
     subsection (b)(8), including regulations regarding the 
     security, confidentiality, accuracy, use, destruction, and 
     dissemination of information, audits and recordkeeping, and 
     the imposition of fees.
       ``(ii) Appeal procedures.--The Attorney General, in 
     consultation with the Secretary, shall promulgate such 
     regulations as are necessary to establish procedures by which 
     a provisional employee or an employee may appeal or dispute 
     the accuracy of the information obtained in a background 
     check conducted under this paragraph. Appeals shall be 
     limited to instances in which a provisional employee or an 
     employee is incorrectly identified as the subject of the 
     background check, or when information about the provisional 
     employee or employee has not been updated to reflect changes 
     in the provisional employee's or employee's criminal record.
       ``(F) Report.--Not later than 2 years after the date of 
     enactment of this paragraph, the Attorney General shall 
     submit a report to Congress on--
       ``(i) the number of requests for searches and exchanges of 
     records made under this section;
       ``(ii) the disposition of such requests; and
       ``(iii) the cost of responding to such requests.''.
       (c) Application to Other Entities Providing Home Health or 
     Long-Term Care Services.--
       (1) Medicare.--Part D of title XVIII (42 U.S.C. 1395x et 
     seq.) is amended by adding at the end the following:


 ``APPLICATION OF SKILLED NURSING FACILITY PREVENTIVE ABUSE PROVISIONS 
 TO ANY PROVIDER OF SERVICES OR OTHER ENTITY PROVIDING HOME HEALTH OR 
                        LONG-TERM CARE SERVICES

       ``Sec. 1897. (a) In General.--The requirements of 
     subsections (b)(8) and (e)(6) of section 1819 shall apply to 
     any provider of services or any other entity that is eligible 
     to be paid under this title for providing home health 
     services, hospice care (including routine home care and other 
     services included in hospice care under this title), or long-
     term care services to an individual entitled to benefits 
     under part A or enrolled under part B, including an 
     individual provided with a Medicare+Choice plan offered by a 
     Medicare+Choice organization under part C (in this section 
     referred to as a `medicare beneficiary').
       ``(b) Supervision of Provisional Employees.--
       ``(1) In general.--With respect to an entity that provides 
     home health services, such entity shall be considered to have 
     satisfied the

[[Page 16814]]

     requirements of section 1819(b)(8)(B)(ii) or 
     1919(b)(8)(B)(ii) if the entity meets such requirements for 
     supervision of provisional employees of the entity as the 
     Secretary shall, by regulation, specify in accordance with 
     paragraph (2).
       ``(2) Requirements.--The regulations required under 
     paragraph (1) shall provide the following:
       ``(A) Supervision of a provisional employee shall consist 
     of ongoing, good faith, verifiable efforts by the supervisor 
     of the provisional employee to conduct monitoring and 
     oversight activities to ensure the safety of a medicare 
     beneficiary.
       ``(B) For purposes of subparagraph (A), monitoring and 
     oversight activities may include (but are not limited to) the 
     following:
       ``(i) Follow-up telephone calls to the medicare 
     beneficiary.
       ``(ii) Unannounced visits to the medicare beneficiary's 
     home while the provisional employee is serving the medicare 
     beneficiary.
       ``(iii) To the extent practicable, limiting the provisional 
     employee's duties to serving only those medicare 
     beneficiaries in a home or setting where another family 
     member or resident of the home or setting of the medicare 
     beneficiary is present.
       ``(C) In promulgating such regulations, the Secretary shall 
     take into account the staffing and geographic issues faced by 
     small rural entities (as defined by the Secretary) that 
     provide home health services, hospice care (including routine 
     home care and other services included in hospice care under 
     this title), or other long-term care services. Such 
     regulations should encourage the provision of monitoring and 
     oversight activities whenever practicable with respect to 
     such an entity, and if such activities would not impose an 
     unreasonable cost or other burden on the entity.''.
       (2) Medicaid.--Section 1902(a) (42 U.S.C. 1396a), as 
     amended by section 104(a), is amended--
       (A) in paragraph (65), by striking ``and'' at the end;
       (B) in paragraph (66), by striking the period and inserting 
     ``; and''; and
       (C) by inserting after paragraph (66) the following:
       ``(67) provide that any entity that is eligible to be paid 
     under the State plan for providing home health services, 
     hospice care (including routine home care and other services 
     included in hospice care under title XVIII), or long-term 
     care services for which medical assistance is available under 
     the State plan to individuals requiring long-term care 
     complies with the requirements of subsections (b)(8) and 
     (e)(8) of section 1919 and section 1897(b) (in the same 
     manner as such section applies to a medicare beneficiary).''.
       (3) Expansion of State Nurse Aide Registry.--
       (A) Medicare.--Section 1819 (42 U.S.C. 1395i-3) is 
     amended--
       (i) in subsection (e)(2)--

       (I) in the paragraph heading, by striking ``Nurse aide 
     registry'' and inserting ``Employee registry'';
       (II) in subparagraph (A)--

       (aa) by striking ``By not later than January 1, 1989, the'' 
     and inserting ``The'';
       (bb) by striking ``a registry of all individuals'' and 
     inserting ``a registry of (i) all individuals''; and
       (cc) by inserting before the period the following: ``, (ii) 
     all other skilled nursing facility employees with respect to 
     whom the State has made a finding described in subparagraph 
     (B), and (iii) any employee of any provider of services or 
     any other entity that is eligible to be paid under this title 
     for providing home health services, hospice care (including 
     routine home care and other services included in hospice care 
     under this title), or long-term care services and with 
     respect to whom the entity has reported to the State a 
     finding of patient neglect or abuse or a misappropriation of 
     patient property''; and

       (III) in subparagraph (C), by striking ``a nurse aide'' and 
     inserting ``an individual''; and

       (ii) in subsection (g)(1)--

       (I) by striking the first sentence of subparagraph (C) and 
     inserting the following: ``The State shall provide, through 
     the agency responsible for surveys and certification of 
     skilled nursing facilities under this subsection, for a 
     process for the receipt and timely review and investigation 
     of allegations of neglect and abuse and misappropriation of 
     resident property by a nurse aide or a skilled nursing 
     facility employee of a resident in a skilled nursing 
     facility, by another individual used by the facility in 
     providing services to such a resident, or by an individual 
     described in subsection (e)(2)(A)(iii).''; and
       (II) in the fourth sentence of subparagraph (C), by 
     inserting ``or described in subsection (e)(2)(A)(iii)'' after 
     ``used by the facility''; and
       (III) in subparagraph (D)--

       (aa) in the subparagraph heading, by striking ``nurse 
     aide''; and
       (bb) in clause (i), in the matter preceding subclause (I), 
     by striking ``a nurse aide'' and inserting ``an individual''; 
     and
       (cc) in clause (i)(I), by striking ``nurse aide'' and 
     inserting ``individual''.
       (B) Medicaid.--Section 1919 (42 U.S.C. 1396r) is amended--
       (i) in subsection (e)(2)--

       (I) in the paragraph heading, by striking ``Nurse aide 
     registry'' and inserting ``Employee registry'';
       (II) in subparagraph (A)--

       (aa) by striking ``By not later than January 1, 1989, the'' 
     and inserting ``The'';
       (bb) by striking ``a registry of all individuals'' and 
     inserting ``a registry of (i) all individuals''; and
       (cc) by inserting before the period the following: ``, (ii) 
     all other nursing facility employees with respect to whom the 
     State has made a finding described in subparagraph (B), and 
     (iii) any employee of an entity that is eligible to be paid 
     under the State plan for providing home health services, 
     hospice care (including routine home care and other services 
     included in hospice care under title XVIII), or long-term 
     care services and with respect to whom the entity has 
     reported to the State a finding of patient neglect or abuse 
     or a misappropriation of patient property''; and

       (III) in subparagraph (C), by striking ``a nurse aide'' and 
     inserting ``an individual''; and

       (ii) in subsection (g)(1)--

       (I) by striking the first sentence of subparagraph (C) and 
     inserting the following: ``The State shall provide, through 
     the agency responsible for surveys and certification of 
     nursing facilities under this subsection, for a process for 
     the receipt and timely review and investigation of 
     allegations of neglect and abuse and misappropriation of 
     resident property by a nurse aide or a nursing facility 
     employee of a resident in a nursing facility, by another 
     individual used by the facility in providing services to such 
     a resident, or by an individual described in subsection 
     (e)(2)(A)(iii).''; and
       (II) in the fourth sentence of subparagraph (C), by 
     inserting ``or described in subsection (e)(2)(A)(iii)'' after 
     ``used by the facility''; and
       (III) in subparagraph (D)--

       (aa) in the subparagraph heading, by striking ``nurse 
     aide''; and
       (bb) in clause (i), in the matter preceding subclause (I), 
     by striking ``a nurse aide'' and inserting ``an individual''; 
     and
       (cc) in clause (i)(I), by striking ``nurse aide'' and 
     inserting ``individual''.
       (d) Reimbursement of Costs for Background Checks.--The 
     Secretary of Health and Human Services shall reimburse 
     nursing facilities, skilled nursing facilities, and other 
     entities for costs incurred by the facilities and entities in 
     order to comply with the requirements imposed under sections 
     1819(b)(8) and 1919(b)(8) of such Act (42 U.S.C. 1395i-
     3(b)(8), 1396r(b)(8)), as added by this section.
       (e) Inclusion of Abusive Acts Within a Long-Term Care 
     Facility or Provider in the National Health Care Fraud and 
     Abuse Data Collection Program.--
       (1) In general.--Section 1128E(g)(1)(A) (42 U.S.C. 1320a-
     7e(g)(1)(A)) is amended--
       (A) by redesignating clause (v) as clause (vi); and
       (B) by inserting after clause (iv), the following:
       ``(v) A finding of abuse or neglect of a patient or a 
     resident of a long-term care facility, or misappropriation of 
     such a patient's or resident's property.''.
       (2) Coverage of long-term care facility or provider 
     employees.--Section 1128E(g)(2) (42 U.S.C. 1320a-7e(g)(2)) is 
     amended by inserting ``, and includes any individual of a 
     long-term care facility or provider (other than any 
     volunteer) that has access to a patient or resident of such a 
     facility under an employment or other contract, or both, with 
     the facility or provider (including individuals who are 
     licensed or certified by the State to provide services at the 
     facility or through the provider, and nonlicensed 
     individuals, as defined by the Secretary, providing services 
     at the facility or through the provider, including nurse 
     assistants, nurse aides, home health aides, individuals who 
     provide home care, and personal care workers and 
     attendants)'' before the period.
       (3) Reporting by long-Term care facilities or providers.--
       (A) In general.--Section 1128E(b)(1) (42 U.S.C. 1320a-
     7e(b)(1)) is amended by striking ``and health plan'' and 
     inserting ``, health plan, and long-term care facility or 
     provider''.
       (B) Correction of information.--Section 1128E(c)(2) (42 
     U.S.C. 1320a-7e(c)(2)) is amended by striking ``and health 
     plan'' and inserting ``, health plan, and long-term care 
     facility or provider''.
       (4) Access to reported information.--Section 1128E(d)(1) 
     (42 U.S.C. 1320a-7e(d)(1)) is amended by striking ``and 
     health plans'' and inserting ``, health plans, and long-term 
     care facilities or providers''.
       (5) Mandatory check of database by long-term care 
     facilities or providers.--Section 1128E(d) (42 U.S.C. 1320a-
     7e(d)) is amended by adding at the end the following:
       ``(3) Mandatory check of database by long-term care 
     facilities or providers.--A long-term care facility or 
     provider shall check the database maintained under this 
     section prior to hiring under an employment or other 
     contract, or both, (other than in a provisional status) any 
     individual as an employee of such a facility or provider who 
     will have access to a patient or resident of the facility or 
     provider (including individuals who

[[Page 16815]]

     are licensed or certified by the State to provide services at 
     the facility or through the provider, and nonlicensed 
     individuals, as defined by the Secretary, that will provide 
     services at the facility or through the provider, including 
     nurse assistants, nurse aides, home health aides, individuals 
     who provide home care, and personal care workers and 
     attendants).''.
       (6) Definition of long-term care facility or provider.--
     Section 1128E(g) (42 U.S.C. 1320a-7e(g)) is amended by adding 
     at the end the following:
       ``(6) Long-term care facility or provider.--The term `long-
     term care facility or provider' means a skilled nursing 
     facility (as defined in section 1819(a)), a nursing facility 
     (as defined in section 1919(a)), a home health agency, a 
     provider of hospice care (as defined in section 1861(dd)(1)), 
     a long-term care hospital (as described in section 
     1886(d)(1)(B)(iv)), an intermediate care facility for the 
     mentally retarded (as defined in section 1905(d)), or any 
     other facility or entity that provides, or is a provider of, 
     long-term care services, home health services, or hospice 
     care (including routine home care and other services included 
     in hospice care under title XVIII), and receives payment for 
     such services under the medicare program under title XVIII or 
     the medicaid program under title XIX.''.
       (7) Authorization of appropriations.--There is authorized 
     to be appropriated to carry out the amendments made by this 
     subsection, $10,200,000 for fiscal year 2004.
       (f) Prevention and Training Demonstration Project.--
       (1) Establishment.--The Secretary of Health and Human 
     Services shall establish a demonstration program to provide 
     grants to develop information on best practices in patient 
     abuse prevention training (including behavior training and 
     interventions) for managers and staff of hospital and health 
     care facilities.
       (2) Eligibility.--To be eligible to receive a grant under 
     paragraph (1), an entity shall be a public or private 
     nonprofit entity and prepare and submit to the Secretary of 
     Health and Human Services an application at such time, in 
     such manner, and containing such information as the Secretary 
     may require.
       (3) Use of funds.--Amounts received under a grant under 
     this subsection shall be used to--
       (A) examine ways to improve collaboration between State 
     health care survey and provider certification agencies, long-
     term care ombudsman programs, the long-term care industry, 
     and local community members;
       (B) examine patient care issues relating to regulatory 
     oversight, community involvement, and facility staffing and 
     management with a focus on staff training, staff stress 
     management, and staff supervision;
       (C) examine the use of patient abuse prevention training 
     programs by long-term care entities, including the training 
     program developed by the National Association of Attorneys 
     General, and the extent to which such programs are used; and
       (D) identify and disseminate best practices for preventing 
     and reducing patient abuse.
       (4) Authorization of appropriations.--There is authorized 
     to be appropriated such sums as may be necessary to carry out 
     this subsection.
       (g) Effective Date.--
       (1) In general.--With respect to a skilled nursing facility 
     (as defined in section 1819(a) of the Social Security Act (42 
     U.S.C. 1395i-3(a)) or a nursing facility (as defined in 
     section 1919(a) of the Social Security Act (42 U.S.C. 
     1396r(a)), this section and the amendments made by this 
     section shall take effect on the date that is the earlier 
     of--
       (A) 6 months after the effective date of final regulations 
     promulgated to carry out this section and such amendments; or
       (B) January 1, 2006.
       (2) Long-term care facilities and providers.--With respect 
     to a long-term care facility or provider (as defined in 
     section 1128E(g)(6) of the Social Security Act (42 U.S.C. 
     1320a-7e(g)(6)) (as added by subsection (e)), this section 
     and the amendments made by this section shall take effect on 
     the date that is the earlier of--
       (A) 18 months after the effective date of final regulations 
     promulgated to carry out this section and such amendments; or
       (B) January 1, 2007.

     SEC. 621. OFFICE OF RURAL HEALTH POLICY IMPROVEMENTS.

       Section 711(b) (42 U.S.C. 912(b)) is amended--
       (1) in paragraph (3), by striking ``and'' after the comma 
     at the end;
       (2) in paragraph (4), by inserting ``and'' after the comma 
     at the end; and
       (3) by inserting after paragraph (4) the following new 
     paragraph:
       ``(5) administer grants, cooperative agreements, and 
     contracts to provide technical assistance and other 
     activities as necessary to support activities related to 
     improving health care in rural areas.''.

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