[Congressional Record (Bound Edition), Volume 154 (2008), Part 10]
[House]
[Pages 13424-13453]
[From the U.S. Government Publishing Office, www.gpo.gov]




      MEDICARE IMPROVEMENTS FOR PATIENTS AND PROVIDERS ACT OF 2008

  Mr. PALLONE. Mr. Speaker, I move to suspend the rules and pass the 
bill (H.R. 6331) to amend titles XVIII and XIX of the Social Security 
Act to extend expiring provisions under the Medicare Program, to 
improve beneficiary access to preventive and mental health services, to 
enhance low-income benefit programs, and to maintain access to care in 
rural areas, including pharmacy access, and for other purposes, as 
amended.
  The Clerk read the title of the bill.
  The text of the bill is as follows:

                               H.R. 6331

     SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

       (a) Short Title.--This Act may be cited as the ``Medicare 
     Improvements for Patients and Providers Act of 2008''.
       (b) Table of Contents.--The table of contents of this Act 
     is as follows:

Sec. 1. Short title; table of contents.

                           TITLE I--MEDICARE

                  Subtitle A--Beneficiary Improvements

            Part I--Prevention, Mental Health, and Marketing

Sec. 101. Improvements to coverage of preventive services.
Sec. 102. Elimination of discriminatory copayment rates for Medicare 
              outpatient psychiatric services.

[[Page 13425]]

Sec. 103. Prohibitions and limitations on certain sales and marketing 
              activities under Medicare Advantage plans and 
              prescription drug plans.
Sec. 104. Improvements to the Medigap program.

                      Part II--Low-Income Programs

Sec. 111. Extension of qualifying individual (QI) program.
Sec. 112. Application of full LIS subsidy assets test under Medicare 
              Savings Program.
Sec. 113. Eliminating barriers to enrollment.
Sec. 114. Elimination of Medicare part D late enrollment penalties paid 
              by subsidy eligible individuals.
Sec. 115. Eliminating application of estate recovery.
Sec. 116. Exemptions from income and resources for determination of 
              eligibility for low-income subsidy.
Sec. 117. Judicial review of decisions of the Commissioner of Social 
              Security under the Medicare part D low-income subsidy 
              program.
Sec. 118. Translation of model form.
Sec. 119. Medicare enrollment assistance.

               Subtitle B--Provisions Relating to Part A

Sec. 121. Expansion and extension of the Medicare Rural Hospital 
              Flexibility Program.
Sec. 122. Rebasing for sole community hospitals.
Sec. 123. Demonstration project on community health integration models 
              in certain rural counties.
Sec. 124. Extension of the reclassification of certain hospitals.
Sec. 125. Revocation of unique deeming authority of the Joint 
              Commission.

               Subtitle C--Provisions Relating to Part B

                      Part I--Physicians' Services

Sec. 131. Physician payment, efficiency, and quality improvements.
Sec. 132. Incentives for electronic prescribing.
Sec. 133. Expanding access to primary care services.
Sec. 134. Extension of floor on Medicare work geographic adjustment 
              under the Medicare physician fee schedule.
Sec. 135. Imaging provisions.
Sec. 136. Extension of treatment of certain physician pathology 
              services under Medicare.
Sec. 137. Accommodation of physicians ordered to active duty in the 
              Armed Services.
Sec. 138. Adjustment for Medicare mental health services.
Sec. 139. Improvements for Medicare anesthesia teaching programs.

            Part II--Other Payment and Coverage Improvements

Sec. 141. Extension of exceptions process for Medicare therapy caps.
Sec. 142. Extension of payment rule for brachytherapy and therapeutic 
              radiopharmaceuticals.
Sec. 143. Speech-language pathology services.
Sec. 144. Payment and coverage improvements for patients with chronic 
              obstructive pulmonary disease and other conditions.
Sec. 145. Clinical laboratory tests.
Sec. 146. Improved access to ambulance services.
Sec. 147. Extension and expansion of the Medicare hold harmless 
              provision under the prospective payment system for 
              hospital outpatient department (HOPD) services for 
              certain hospitals.
Sec. 148. Clarification of payment for clinical laboratory tests 
              furnished by critical access hospitals.
Sec. 149. Adding certain entities as originating sites for payment of 
              telehealth services.
Sec. 150. MedPAC study and report on improving chronic care 
              demonstration programs.
Sec. 151. Increase of FQHC payment limits.
Sec. 152. Kidney disease education and awareness provisions.
Sec. 153. Renal dialysis provisions.
Sec. 154. Delay in and reform of Medicare DMEPOS competitive 
              acquisition program.

               Subtitle D--Provisions Relating to Part C

Sec. 161. Phase-out of indirect medical education (IME).
Sec. 162. Revisions to requirements for Medicare Advantage private fee-
              for-service plans.
Sec. 163. Revisions to quality improvement programs.
Sec. 164. Revisions relating to specialized Medicare Advantage plans 
              for special needs individuals.
Sec. 165. Limitation on out-of-pocket costs for dual eligibles and 
              qualified medicare beneficiaries enrolled in a 
              specialized Medicare Advantage plan for special needs 
              individuals.
Sec. 166. Adjustment to the Medicare Advantage stabilization fund.
Sec. 167. Access to Medicare reasonable cost contract plans.
Sec. 168. MedPAC study and report on quality measures.
Sec. 169. MedPAC study and report on Medicare Advantage payments.

               Subtitle E--Provisions Relating to Part D

                   Part I--Improving Pharmacy Access

Sec. 171. Prompt payment by prescription drug plans and MA-PD plans 
              under part D.
Sec. 172. Submission of claims by pharmacies located in or contracting 
              with long-term care facilities.
Sec. 173. Regular update of prescription drug pricing standard.

                       Part II--Other Provisions

Sec. 175. Inclusion of barbiturates and benzodiazepines as covered part 
              D drugs.
Sec. 176. Formulary requirements with respect to certain categories or 
              classes of drugs.

                      Subtitle F--Other Provisions

Sec. 181. Use of part D data.
Sec. 182. Revision of definition of medically accepted indication for 
              drugs.
Sec. 183. Contract with a consensus-based entity regarding performance 
              measurement.
Sec. 184. Cost-sharing for clinical trials.
Sec. 185. Addressing health care disparities.
Sec. 186. Demonstration to improve care to previously uninsured.
Sec. 187. Office of the Inspector General report on compliance with and 
              enforcement of national standards on culturally and 
              linguistically appropriate services (CLAS) in Medicare.
Sec. 188. Medicare Improvement Funding.
Sec. 189. Inclusion of Medicare providers and suppliers in Federal 
              Payment Levy and Administrative Offset Program.

                           TITLE II--MEDICAID

Sec. 201. Extension of transitional medical assistance (TMA) and 
              abstinence education program.
Sec. 202. Medicaid DSH extension.
Sec. 203. Pharmacy reimbursement under Medicaid.
Sec. 204. Review of administrative claim determinations.
Sec. 205. County medicaid health insuring organizations.

                        TITLE III--MISCELLANEOUS

Sec. 301. Extension of TANF supplemental grants.
Sec. 302. 70 percent federal matching for foster care and adoption 
              assistance for the District of Columbia.
Sec. 303. Extension of Special Diabetes Grant Programs.
Sec. 304. IOM reports on best practices for conducting systematic 
              reviews of clinical effectiveness research and for 
              developing clinical protocols.

                           TITLE I--MEDICARE

                  Subtitle A--Beneficiary Improvements

            PART I--PREVENTION, MENTAL HEALTH, AND MARKETING

     SEC. 101. IMPROVEMENTS TO COVERAGE OF PREVENTIVE SERVICES.

       (a) Coverage of Additional Preventive Services.--
       (1) Coverage.--Section 1861 of the Social Security Act (42 
     U.S.C. 1395x), as amended by section 114 of the Medicare, 
     Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-
     173), is amended--
       (A) in subsection (s)(2)--
       (i) in subparagraph (Z), by striking ``and'' after the 
     semicolon at the end;
       (ii) in subparagraph (AA), by adding ``and'' after the 
     semicolon at the end; and
       (iii) by adding at the end the following new subparagraph:
       ``(BB) additional preventive services (described in 
     subsection (ddd)(1));''; and
       (B) by adding at the end the following new subsection:

                    ``Additional Preventive Services

       ``(ddd)(1) The term `additional preventive services' means 
     services not otherwise described in this title that identify 
     medical conditions or risk factors and that the Secretary 
     determines are--
       ``(A) reasonable and necessary for the prevention or early 
     detection of an illness or disability;
       ``(B) recommended with a grade of A or B by the United 
     States Preventive Services Task Force; and
       ``(C) appropriate for individuals entitled to benefits 
     under part A or enrolled under part B.
       ``(2) In making determinations under paragraph (1) 
     regarding the coverage of a new service, the Secretary shall 
     use the process for making national coverage determinations 
     (as defined in section 1869(f)(1)(B)) under this title. As 
     part of the use of such process, the Secretary may conduct an 
     assessment of the relation between predicted outcomes and the 
     expenditures for such service and may take into account the 
     results of such assessment in making such determination.''.
       (2) Payment and coinsurance for additional preventive 
     services.--Section

[[Page 13426]]

     1833(a)(1) of the Social Security Act (42 U.S.C. 1395l(a)(1)) 
     is amended--
       (A) by striking ``and'' before ``(V)''; and
       (B) by inserting before the semicolon at the end the 
     following: ``, and (W) with respect to additional preventive 
     services (as defined in section 1861(ddd)(1)), the amount 
     paid shall be (i) in the case of such services which are 
     clinical diagnostic laboratory tests, the amount determined 
     under subparagraph (D), and (ii) in the case of all other 
     such services, 80 percent of the lesser of the actual charge 
     for the service or the amount determined under a fee schedule 
     established by the Secretary for purposes of this 
     subparagraph''.
       (3) Conforming amendment regarding coverage.--Section 
     1862(a)(1)(A) of the Social Security Act (42 U.S.C. 
     1395y(a)(1)(A)) is amended by inserting ``or additional 
     preventive services (as described in section 1861(ddd)(1))'' 
     after ``succeeding subparagraph''.
       (4) Rule of construction.--Nothing in the provisions of, or 
     amendments made by, this subsection shall be construed to 
     provide coverage under title XVIII of the Social Security Act 
     of items and services for the treatment of a medical 
     condition that is not otherwise covered under such title.
       (b) Revisions to Initial Preventive Physical Examination.--
       (1) In general.--Section 1861(ww) of the Social Security 
     Act (42 U.S.C. 1395x(ww)) is amended--
       (A) in paragraph (1)--
       (i) by inserting ``body mass index,'' after ``weight'';
       (ii) by striking ``, and an electrocardiogram''; and
       (iii) by inserting ``and end-of-life planning (as defined 
     in paragraph (3)) upon the agreement with the individual'' 
     after ``paragraph (2)'';
       (B) in paragraph (2), by adding at the end the following 
     new subparagraphs:
       ``(M) An electrocardiogram.
       ``(N) Additional preventive services (as defined in 
     subsection (ddd)(1)).''; and
       (C) by adding at the end the following new paragraph:
       ``(3) For purposes of paragraph (1), the term `end-of-life 
     planning' means verbal or written information regarding--
       ``(A) an individual's ability to prepare an advance 
     directive in the case that an injury or illness causes the 
     individual to be unable to make health care decisions; and
       ``(B) whether or not the physician is willing to follow the 
     individual's wishes as expressed in an advance directive.''.
       (2) Waiver of application of deductible.--The first 
     sentence of section 1833(b) of the Social Security Act (42 
     U.S.C. 1395l(b)) is amended--
       (A) by striking ``and'' before ``(8)''; and
       (B) by inserting ``, and (9) such deductible shall not 
     apply with respect to an initial preventive physical 
     examination (as defined in section 1861(ww))'' before the 
     period at the end.
       (3) Extension of eligibility period from six months to one 
     year.--Section 1862(a)(1)(K) of the Social Security Act (42 
     U.S.C. 1395y(a)(1)(K)) is amended by striking ``6 months'' 
     and inserting ``1 year''.
       (4) Technical correction.--Section 1862(a)(1)(K) of the 
     Social Security Act (42 U.S.C. 1395y(a)(1)(K)) is amended by 
     striking ``not later'' and inserting ``more''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to services furnished on or after January 1, 
     2009.

     SEC. 102. ELIMINATION OF DISCRIMINATORY COPAYMENT RATES FOR 
                   MEDICARE OUTPATIENT PSYCHIATRIC SERVICES.

       Section 1833(c) of the Social Security Act (42 U.S.C. 
     1395l(c)) is amended to read as follows:
       ``(c)(1) Notwithstanding any other provision of this part, 
     with respect to expenses incurred in a calendar year in 
     connection with the treatment of mental, psychoneurotic, and 
     personality disorders of an individual who is not an 
     inpatient of a hospital at the time such expenses are 
     incurred, there shall be considered as incurred expenses for 
     purposes of subsections (a) and (b)--
       ``(A) for expenses incurred in years prior to 2010, only 
     62\1/2\ percent of such expenses;
       ``(B) for expenses incurred in 2010 or 2011, only 68\3/4\ 
     percent of such expenses;
       ``(C) for expenses incurred in 2012, only 75 percent of 
     such expenses;
       ``(D) for expenses incurred in 2013, only 81\1/4\ percent 
     of such expenses; and
       ``(E) for expenses incurred in 2014 or any subsequent 
     calendar year, 100 percent of such expenses.
       ``(2) For purposes of subparagraphs (A) through (D) of 
     paragraph (1), the term `treatment' does not include brief 
     office visits (as defined by the Secretary) for the sole 
     purpose of monitoring or changing drug prescriptions used in 
     the treatment of such disorders or partial hospitalization 
     services that are not directly provided by a physician.''.

     SEC. 103. PROHIBITIONS AND LIMITATIONS ON CERTAIN SALES AND 
                   MARKETING ACTIVITIES UNDER MEDICARE ADVANTAGE 
                   PLANS AND PRESCRIPTION DRUG PLANS.

       (a) Prohibitions.--
       (1) Medicare advantage program.--
       (A) In general.--Section 1851 of the Social Security Act 
     (42 U.S.C. 1395w-21) is amended--
       (i) in subsection (h)(4)--

       (I) in subparagraph (A)--

       (aa) by striking ``cash or other monetary rebates'' and 
     inserting ``, subject to subsection (j)(2)(C), cash, gifts, 
     prizes, or other monetary rebates''; and
       (bb) by striking ``, and'' at the end and inserting a 
     semicolon;

       (II) in subparagraph (B), by striking the period at the end 
     and inserting a semicolon; and
       (III) by adding at the end the following new subparagraph:

       ``(C) shall not permit a Medicare Advantage organization 
     (or the agents, brokers, and other third parties representing 
     such organization) to conduct the prohibited activities 
     described in subsection (j)(1); and''; and
       (ii) by adding at the end the following new subsection:
       ``(j) Prohibited Activities Described and Limitations on 
     the Conduct of Certain Other Activities.--
       ``(1) Prohibited activities described.--The following 
     prohibited activities are described in this paragraph:
       ``(A) Unsolicited means of direct contact.--Any unsolicited 
     means of direct contact of prospective enrollees, including 
     soliciting door-to-door or any outbound telemarketing without 
     the prospective enrollee initiating contact.
       ``(B) Cross-selling.--The sale of other non-health related 
     products (such as annuities and life insurance) during any 
     sales or marketing activity or presentation conducted with 
     respect to a Medicare Advantage plan.
       ``(C) Meals.--The provision of meals of any sort, 
     regardless of value, to prospective enrollees at promotional 
     and sales activities.
       ``(D) Sales and marketing in health care settings and at 
     educational events.--Sales and marketing activities for the 
     enrollment of individuals in Medicare Advantage plans that 
     are conducted--
       ``(i) in health care settings in areas where health care is 
     delivered to individuals (such as physician offices and 
     pharmacies), except in the case where such activities are 
     conducted in common areas in health care settings; and
       ``(ii) at educational events.''.
       (2) Medicare prescription drug program.--Section 1860D-4 of 
     the Social Security Act (42 U.S.C. 1395w-104) is amended by 
     adding at the end the following new subsection:
       ``(l) Requirements With Respect to Sales and Marketing 
     Activities.--The following provisions shall apply to a PDP 
     sponsor (and the agents, brokers, and other third parties 
     representing such sponsor) in the same manner as such 
     provisions apply to a Medicare Advantage organization (and 
     the agents, brokers, and other third parties representing 
     such organization):
       ``(1) The prohibition under section 1851(h)(4)(C) on 
     conducting activities described in section 1851(j)(1).''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to plan years beginning on or after January 1, 
     2009.
       (b) Limitations.--
       (1) Medicare advantage program.--Section 1851 of the Social 
     Security Act (42 U.S.C. 1395w-21), as amended by subsection 
     (a)(1), is amended--
       (A) in subsection (h)(4), by adding at the end the 
     following new subparagraph:
       ``(D) shall only permit a Medicare Advantage organization 
     (and the agents, brokers, and other third parties 
     representing such organization) to conduct the activities 
     described in subsection (j)(2) in accordance with the 
     limitations established under such subsection.''; and
       (B) in subsection (j), by adding at the end the following 
     new paragraph:
       ``(2) Limitations.--The Secretary shall establish 
     limitations with respect to at least the following:
       ``(A) Scope of marketing appointments.--The scope of any 
     appointment with respect to the marketing of a Medicare 
     Advantage plan. Such limitation shall require advance 
     agreement with a prospective enrollee on the scope of the 
     marketing appointment and documentation of such agreement by 
     the Medicare Advantage organization. In the case where the 
     marketing appointment is in person, such documentation shall 
     be in writing.
       ``(B) Co-branding.--The use of the name or logo of a co-
     branded network provider on Medicare Advantage plan 
     membership and marketing materials.
       ``(C) Limitation of gifts to nominal dollar value.--The 
     offering of gifts and other promotional items other than 
     those that are of nominal value (as determined by the 
     Secretary) to prospective enrollees at promotional 
     activities.
       ``(D) Compensation.--The use of compensation other than as 
     provided under guidelines established by the Secretary. Such 
     guidelines shall ensure that the use of compensation creates 
     incentives for agents and brokers to enroll individuals in 
     the Medicare Advantage plan that is intended to best meet 
     their health care needs.
       ``(E) Required training, annual retraining, and testing of 
     agents, brokers, and

[[Page 13427]]

     other third parties.--The use by a Medicare Advantage 
     organization of any individual as an agent, broker, or other 
     third party representing the organization that has not 
     completed an initial training and testing program and does 
     not complete an annual retraining and testing program.''.
       (2) Medicare prescription drug program.--Section 1860D-4(l) 
     of the Social Security Act, as added by subsection (a)(2), is 
     amended by adding at the end the following new paragraph:
       ``(2) The requirement under section 1851(h)(4)(D) to 
     conduct activities described in section 1851(j)(2) in 
     accordance with the limitations established under such 
     subsection.''.
       (3) Effective date.--The amendments made by this subsection 
     shall take effect on a date specified by the Secretary (but 
     in no case later than November 15, 2008).
       (c) Required Inclusion of Plan Type in Plan Name.--
       (1) Medicare advantage program.--Section 1851(h) of the 
     Social Security Act (42 U.S.C. 1395w-21(h)) is amended by 
     adding at the end following new paragraph:
       ``(6) Required inclusion of plan type in plan name.--For 
     plan years beginning on or after January 1, 2010, a Medicare 
     Advantage organization must ensure that the name of each 
     Medicare Advantage plan offered by the Medicare Advantage 
     organization includes the plan type of the plan (using 
     standard terminology developed by the Secretary).''.
       (2) Prescription drug plans.--Section 1860D-4(l) of the 
     Social Security Act, as added by subsection (a)(2) and 
     amended by subsection (b)(2), is amended by adding at the end 
     the following new paragraph:
       ``(3) The inclusion of the plan type in the plan name under 
     section 1851(h)(6).''.
       (d) Strengthening the Ability of States to Act in 
     Collaboration With the Secretary to Address Fraudulent or 
     Inappropriate Marketing Practices.--
       (1) Medicare advantage program.--Section 1851(h) of the 
     Social Security Act (42 U.S.C. 1395w-21(h), as amended by 
     subsection (c)(1), is amended by adding at the end the 
     following new paragraph:
       ``(7) Strengthening the ability of states to act in 
     collaboration with the secretary to address fraudulent or 
     inappropriate marketing practices.--
       ``(A) Appointment of agents and brokers.--Each Medicare 
     Advantage organization shall--
       ``(i) only use agents and brokers who have been licensed 
     under State law to sell Medicare Advantage plans offered by 
     the Medicare Advantage organization;
       ``(ii) in the case where a State has a State appointment 
     law, abide by such law; and
       ``(iii) report to the applicable State the termination of 
     any such agent or broker, including the reasons for such 
     termination (as required under applicable State law).
       ``(B) Compliance with state information requests.--Each 
     Medicare Advantage organization shall comply in a timely 
     manner with any request by a State for information regarding 
     the performance of a licensed agent, broker, or other third 
     party representing the Medicare Advantage organization as 
     part of an investigation by the State into the conduct of the 
     agent, broker, or other third party.''.
       (2) Prescription drug plans.--Section 1860D-4(l) of the 
     Social Security Act, as amended by subsection (c)(2), is 
     amended by adding at the end the following new paragraph:
       ``(4) The requirements regarding the appointment of agents 
     and brokers and compliance with State information requests 
     under subparagraphs (A) and (B), respectively, of section 
     1851(h)(7).''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to plan years beginning on or after January 1, 
     2009.

     SEC. 104. IMPROVEMENTS TO THE MEDIGAP PROGRAM.

       (a) Implementation of NAIC Recommendations.--
       (1) In general.--The Secretary of Health and Human Services 
     (in this section referred to as the ``Secretary'') shall 
     provide for implementation of the changes in the NAIC model 
     law and regulations approved by the National Association of 
     Insurance Commissioners in its Model #651 (``Model Regulation 
     to Implement the NAIC Medicare Supplement Insurance Minimum 
     Standards Model Act'') on March 11, 2007, as modified to 
     reflect the changes made under this Act and the Genetic 
     Information Nondiscrimination Act of 2008 (Public Law 110-
     233).
       (2) Implementation dates.--
       (A) In general.--The modifications to Model #651 required 
     under paragraph (1) shall be completed by the National 
     Association of Insurance Commissioners not later than October 
     31, 2008. Except as provided in subparagraph (B), each State 
     shall have 1 year from the date the National Association of 
     Insurance Commissioners adopts the revised NAIC model law and 
     regulations (as changed by Model #651, as so modified) to 
     conform the regulatory program established by the State to 
     such revised NAIC model law and regulations.
       (B) Extension of effective date for state law amendment.--
     In the case of a State which the Secretary determines 
     requires State legislation in order to conform the regulatory 
     program established by the State to such revised NAIC model 
     law and regulations, the State shall not be regarded as 
     failing to comply with the requirements of this section 
     solely on the basis of its failure to meet such requirements 
     before the first day of the first calendar quarter beginning 
     after the close of the first regular session of the State 
     legislature that begins after the date of the enactment of 
     this Act. For purposes of the previous sentence, in the case 
     of a State that has a 2-year legislative session, each year 
     of the session is considered to be a separate regular session 
     of the State legislature.
       (C) Transition dates.--No carrier may issue a new or 
     revised medicare supplemental policy or certificate under 
     section 1882 of the Social Security Act (42 U.S.C. 1395ss) 
     that meets the requirements of such revised NAIC model law 
     and regulations for coverage effective prior to June 1, 2010. 
     A carrier may continue to offer or issue a medicare 
     supplemental policy under such section that meets the 
     requirements of the NAIC model law and regulations and State 
     law (as in effect prior to the adoption of such revised NAIC 
     model law and regulations) prior to June 1, 2010. Nothing 
     shall preclude carriers from marketing new or revised 
     medicare supplemental policies or certificates that meet the 
     requirements of such revised NAIC model law and regulations 
     on or after the date on which the State conforms the 
     regulatory program established by the State to such revised 
     NAIC model law and regulations.
       (b) Required Offering of a Range of Policies.--Section 
     1882(o) of the Social Security Act (42 U.S.C. 1395s(o)), as 
     amended by section 104(b)(3) of the Genetic Information 
     Nondiscrimination Act of 2008 (Public Law 110-233), is 
     amended by adding at the end the following new paragraph:
       ``(5) In addition to the requirement under paragraph (2), 
     the issuer of the policy must make available to the 
     individual at least Medicare supplemental policies with 
     benefit packages classified as `C' or `F'.''.
       (c) Clarification.--Any health insurance policy that 
     provides reimbursement for expenses incurred for items and 
     services for which payment may be made under title XVIII of 
     the Social Security Act but which are not reimbursable by 
     reason of the applicability of deductibles, coinsurance, 
     copayments or other limitations imposed by a Medicare 
     Advantage plan (including a Medicare Advantage private fee-
     for-service plan) under part C of such title shall comply 
     with the requirements of section 1882(o) of the such Act (42 
     U.S.C. 1395ss(o)).

                      PART II--LOW-INCOME PROGRAMS

     SEC. 111. EXTENSION OF QUALIFYING INDIVIDUAL (QI) PROGRAM.

       (a) Extension.--Section 1902(a)(10)(E)(iv) of the Social 
     Security Act (42 U.S.C. 1396a(a)(10)(E)(iv)) is amended by 
     striking ``June 2008'' and inserting ``December 2009''.
       (b) Extending Total Amount Available for Allocation.--
     Section 1933(g) of such Act (42 U.S.C. 1396u-3(g)) is 
     amended--
       (1) in paragraph (2)--
       (A) by striking ``and'' at the end of subparagraph (H);
       (B) in subparagraph (I)--
       (i) by striking ``June 30'' and inserting ``September 30'';
       (ii) by striking ``$200,000,000'' and inserting 
     ``$300,000,000''; and
       (iii) by striking the period at the end and inserting a 
     semicolon; and
       (C) by adding at the end the following new subparagraphs:
       ``(J) for the period that begins on October 1, 2008, and 
     ends on December 31, 2008, the total allocation amount is 
     $100,000,000;
       ``(K) for the period that begins on January 1, 2009, and 
     ends on September 30, 2009, the total allocation amount is 
     $350,000,000; and
       ``(L) for the period that begins on October 1, 2009, and 
     ends on December 31, 2009, the total allocation amount is 
     $150,000,000.''; and
       (2) in paragraph (3), in the matter preceding subparagraph 
     (A), by striking ``or (H)'' and inserting ``(H), (J), or 
     (L)''.

     SEC. 112. APPLICATION OF FULL LIS SUBSIDY ASSETS TEST UNDER 
                   MEDICARE SAVINGS PROGRAM.

       Section 1905(p)(1)(C) of such Act (42 U.S.C. 
     1396d(p)(1)(C)) is amended by inserting before the period at 
     the end the following: ``or, effective beginning with January 
     1, 2010, whose resources (as so determined) do not exceed the 
     maximum resource level applied for the year under 
     subparagraph (D) of section 1860D-14(a)(3) (determined 
     without regard to the life insurance policy exclusion 
     provided under subparagraph (G) of such section) applicable 
     to an individual or to the individual and the individual's 
     spouse (as the case may be)''.

     SEC. 113. ELIMINATING BARRIERS TO ENROLLMENT.

       (a) SSA Assistance With Medicare Savings Program and Low-
     Income Subsidy Program Applications.--Section 1144 of such 
     Act (42 U.S.C. 1320b-14) is amended by adding at the end the 
     following new subsection:
       ``(c) Assistance With Medicare Savings Program and Low-
     Income Subsidy Program Applications.--
       ``(1) Distribution of applications and information to 
     individuals who are potentially eligible for low-income 
     subsidy program.--For each individual who submits an 
     application for low-income subsidies

[[Page 13428]]

     under section 1860D-14, requests an application for such 
     subsidies, or is otherwise identified as an individual who is 
     potentially eligible for such subsidies, the Commissioner 
     shall do the following:
       ``(A) Provide information describing the low-income subsidy 
     program under section 1860D-14 and the Medicare Savings 
     Program (as defined in paragraph (7)).
       ``(B) Provide an application for enrollment under such low-
     income subsidy program (if not already received by the 
     Commissioner).
       ``(C) In accordance with paragraph (3), transmit data from 
     such an application for purposes of initiating an application 
     for benefits under the Medicare Savings Program.
       ``(D) Provide information on how the individual may obtain 
     assistance in completing such application and an application 
     under the Medicare Savings Program, including information on 
     how the individual may contact the State health insurance 
     assistance program (SHIP).
       ``(E) Make the application described in subparagraph (B) 
     and the information described in subparagraphs (A) and (D) 
     available at local offices of the Social Security 
     Administration.
       ``(2) Training personnel in explaining benefit programs and 
     assisting in completing lis application.--The Commissioner 
     shall provide training to those employees of the Social 
     Security Administration who are involved in receiving 
     applications for benefits described in paragraph (1)(B) in 
     order that they may promote beneficiary understanding of the 
     low-income subsidy program and the Medicare Savings Program 
     in order to increase participation in these programs. Such 
     employees shall provide assistance in completing an 
     application described in paragraph (1)(B) upon request.
       ``(3) Transmittal of data to states.--Beginning on January 
     1, 2010, with the consent of an individual completing an 
     application for benefits described in paragraph (1)(B), the 
     Commissioner shall electronically transmit to the appropriate 
     State Medicaid agency data from such application, as 
     determined by the Commissioner, which transmittal shall 
     initiate an application of the individual for benefits under 
     the Medicare Savings Program with the State Medicaid agency. 
     In order to ensure that such data transmittal provides 
     effective assistance for purposes of State adjudication of 
     applications for benefits under the Medicare Savings Program, 
     the Commissioner shall consult with the Secretary, after the 
     Secretary has consulted with the States, regarding the 
     content, form, frequency, and manner in which data (on a 
     uniform basis for all States) shall be transmitted under this 
     subparagraph.
       ``(4) Coordination with outreach.--The Commissioner shall 
     coordinate outreach activities under this subsection in 
     connection with the low-income subsidy program and the 
     Medicare Savings Program.
       ``(5) Reimbursement of social security administration 
     administrative costs.--
       ``(A) Initial medicare savings program costs; additional 
     low-income subsidy costs.--
       ``(i) Initial medicare savings program costs.--There are 
     hereby appropriated to the Commissioner to carry out this 
     subsection, out of any funds in the Treasury not otherwise 
     appropriated, $24,100,000. The amount appropriated under ths 
     clause shall be available on October 1, 2008, and shall 
     remain available until expended.
       ``(ii) Additional amount for low-income subsidy 
     activities.--There are hereby appropriated to the 
     Commissioner, out of any funds in the Treasury not otherwise 
     appropriated, $24,800,000 for fiscal year 2009 to carry out 
     low-income subsidy activities under section 1860D-14 and the 
     Medicare Savings Program (in accordance with this 
     subsection), to remain available until expended. Such funds 
     shall be in addition to the Social Security Administration's 
     Limitation on Administrative Expenditure appropriations for 
     such fiscal year.
       ``(B) Subsequent funding under agreements.--
       ``(i) In general.--Effective for fiscal years beginning on 
     or after October 1, 2010, the Commissioner and the Secretary 
     shall enter into an agreement which shall provide funding 
     (subject to the amount appropriated under clause (ii)) to 
     cover the administrative costs of the Commissioner's 
     activities under this subsection. Such agreement shall--

       ``(I) provide funds to the Commissioner for the full cost 
     of the Social Security Administration's work related to the 
     Medicare Savings Program required under this section;
       ``(II) provide such funding quarterly in advance of the 
     applicable quarter based on estimating methodology agreed to 
     by the Commissioner and the Secretary; and
       ``(III) require an annual accounting and reconciliation of 
     the actual costs incurred and funds provided under this 
     subsection.

       ``(ii) Appropriation.--There are hereby appropriated to the 
     Secretary solely for the purpose of providing payments to the 
     Commissioner pursuant to an agreement specified in clause (i) 
     that is in effect, out of any funds in the Treasury not 
     otherwise appropriated, not more than $3,000,000 for fiscal 
     year 2011 and each fiscal year thereafter.
       ``(C) Limitation.--In no case shall funds from the Social 
     Security Administration's Limitation on Administrative 
     Expenses be used to carry out activities related to the 
     Medicare Savings Program. For fiscal years beginning on or 
     after October 1, 2010, no such activities shall be undertaken 
     by the Social Security Administration unless the agreement 
     specified in subparagraph (B) is in effect and full funding 
     has been provided to the Commissioner as specified in such 
     subparagraph.
       ``(6) GAO analysis and report.--
       ``(A) Analysis.--The Comptroller General of the United 
     States shall prepare an analysis of the impact of this 
     subsection--
       ``(i) in increasing participation in the Medicare Savings 
     Program, and
       ``(ii) on States and the Social Security Administration.
       ``(B) Report.--Not later than January 1, 2012, the 
     Comptroller General shall submit to Congress, the 
     Commissioner, and the Secretary a report on the analysis 
     conducted under subparagraph (A).
       ``(7) Medicare savings program defined.--For purposes of 
     this subsection, the term `Medicare Savings Program' means 
     the program of medical assistance for payment of the cost of 
     medicare cost-sharing under the Medicaid program pursuant to 
     sections 1902(a)(10)(E) and 1933.''.
       (b) Medicaid Agency Consideration of Data Transmittal.--
       (1) In general.--Section 1935(a) of such Act (42 U.S.C. 
     1396u-5(a)) is amended by adding at the end the following new 
     paragraph:
       ``(4) Consideration of data transmitted by the social 
     security administration for purposes of medicare savings 
     program.--The State shall accept data transmitted under 
     section 1144(c)(3) and act on such data in the same manner 
     and in accordance with the same deadlines as if the data 
     constituted an initiation of an application for benefits 
     under the Medicare Savings Program (as defined for purposes 
     of such section) that had been submitted directly by the 
     applicant. The date of the individual's application for the 
     low income subsidy program from which the data have been 
     derived shall constitute the date of filing of such 
     application for benefits under the Medicare Savings 
     Program.''.
       (2) Conforming amendments.--Section 1935(a) of such Act (42 
     U.S.C. 1396u-5(a)) is amended in the subsection heading by 
     striking ``and'' and by inserting ``, and Medicare Cost-
     Sharing'' after ``Assistance''.
       (c) Effective Date.--Except as otherwise provided, the 
     amendments made by this section shall take effect on January 
     1, 2010.

     SEC. 114. ELIMINATION OF MEDICARE PART D LATE ENROLLMENT 
                   PENALTIES PAID BY SUBSIDY ELIGIBLE INDIVIDUALS.

       (a) Waiver of Late Enrollment Penalty.--
       (1) In general.--Section 1860D-13(b) of the Social Security 
     Act (42 U.S.C. 1395w-113(b)) is amended by adding at the end 
     the following new paragraph:
       ``(8) Waiver of penalty for subsidy-eligible individuals.--
     In no case shall a part D eligible individual who is 
     determined to be a subsidy eligible individual (as defined in 
     section 1860D-14(a)(3)) be subject to an increase in the 
     monthly beneficiary premium established under subsection 
     (a).''.
       (2) Conforming amendment.--Section 1860D-14(a)(1)(A) of the 
     Social Security Act (42 U.S.C. 1395w-114(a)(1)(A)) is amended 
     by striking ``equal to'' and all that follows through the 
     period and inserting ``equal to 100 percent of the amount 
     described in subsection (b)(1), but not to exceed the premium 
     amount specified in subsection (b)(2)(B).''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to subsidies for months beginning with January 
     2009.

     SEC. 115. ELIMINATING APPLICATION OF ESTATE RECOVERY.

       (a) In General.--Section 1917(b)(1)(B)(ii) of the Social 
     Security Act (42 U.S.C. 1396p(b)(1)(B)(ii)) is amended by 
     inserting ``(but not including medical assistance for 
     medicare cost-sharing or for benefits described in section 
     1902(a)(10)(E))'' before the period at the end.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect as of January 1, 2010.

     SEC. 116. EXEMPTIONS FROM INCOME AND RESOURCES FOR 
                   DETERMINATION OF ELIGIBILITY FOR LOW-INCOME 
                   SUBSIDY.

       (a) In General.--Section 1860D-14(a)(3) of the Social 
     Security Act (42 U.S.C. 1395w-114(a)(3)) is amended--
       (1) in subparagraph (C)(i), by inserting ``and except that 
     support and maintenance furnished in kind shall not be 
     counted as income'' after ``section 1902(r)(2)'';
       (2) in subparagraph (D), in the matter before clause (i), 
     by inserting ``subject to the life insurance policy exclusion 
     provided under subparagraph (G)'' before ``)'';
       (3) in subparagraph (E)(i), in the matter before subclause 
     (I), by inserting ``subject to the life insurance policy 
     exclusion provided under subparagraph (G)'' before ``)''; and
       (4) by adding at the end the following new subparagraph:
       ``(G) Life insurance policy exclusion.--In determining the 
     resources of an individual (and the eligible spouse of the 
     individual, if any) under section 1613 for purposes of 
     subparagraphs (D) and (E) no part of the value of any life 
     insurance policy shall be taken into account.''.
       (b) Effective Date.--The amendments made by this section 
     shall take effect with

[[Page 13429]]

     respect to applications filed on or after January 1, 2010.

     SEC. 117. JUDICIAL REVIEW OF DECISIONS OF THE COMMISSIONER OF 
                   SOCIAL SECURITY UNDER THE MEDICARE PART D LOW-
                   INCOME SUBSIDY PROGRAM.

       (a) In General.--Section 1860D-14(a)(3)(B)(iv) of the 
     Social Security Act (42 U.S.C. 1395w-114(a)(3)(B)(iv)) is 
     amended--
       (1) in subclause (I), by striking ``and'' at the end;
       (2) in subclause (II), by striking the period at the end 
     and inserting ``; and''; and
       (3) by adding at the end the following new subclause:

       ``(III) judicial review of the final decision of the 
     Commissioner made after a hearing shall be available to the 
     same extent, and with the same limitations, as provided in 
     subsections (g) and (h) of section 205.''.

       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect as if included in the enactment of section 
     101 of the Medicare Prescription Drug, Improvement, and 
     Modernization Act of 2003.

     SEC. 118. TRANSLATION OF MODEL FORM.

       (a) In General.--Section 1905(p)(5)(A) of the Social 
     Security Act (42 U.S.C. 1396d(p)(5)(A)) is amended by adding 
     at the end the following: ``The Secretary shall provide for 
     the translation of such application form into at least the 10 
     languages (other than English) that are most often used by 
     individuals applying for hospital insurance benefits under 
     section 226 or 226A and shall make the translated forms 
     available to the States and to the Commissioner of Social 
     Security.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on January 1, 2010.

     SEC. 119. MEDICARE ENROLLMENT ASSISTANCE.

       (a) Additional Funding for State Health Insurance 
     Assistance Programs.--
       (1) Grants.--
       (A) In general.--The Secretary of Health and Human Services 
     (in this section referred to as the ``Secretary'') shall use 
     amounts made available under subparagraph (B) to make grants 
     to States for State health insurance assistance programs 
     receiving assistance under section 4360 of the Omnibus Budget 
     Reconciliation Act of 1990.
       (B) Funding.--For purposes of making grants under this 
     subsection, 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 Medical Insurance Trust Fund under 
     section 1841 of such Act (42 U.S.C. 1395t), in the same 
     proportion as the Secretary determines under section 1853(f) 
     of such Act (42 U.S.C. 1395w-23(f)), of $7,500,000 to the 
     Centers for Medicare & Medicaid Services Program Management 
     Account for fiscal year 2009, to remain available until 
     expended.
       (2) Amount of grants.--The amount of a grant to a State 
     under this subsection from the total amount made available 
     under paragraph (1) shall be equal to the sum of the amount 
     allocated to the State under paragraph (3)(A) and the amount 
     allocated to the State under subparagraph (3)(B).
       (3) Allocation to states.--
       (A) Allocation based on percentage of low-income 
     beneficiaries.--The amount allocated to a State under this 
     subparagraph from \2/3\ of the total amount made available 
     under paragraph (1) shall be based on the number of 
     individuals who meet the requirement under subsection 
     (a)(3)(A)(ii) of section 1860D-14 of the Social Security Act 
     (42 U.S.C. 1395w-114) but who have not enrolled to receive a 
     subsidy under such section 1860D-14 relative to the total 
     number of individuals who meet the requirement under such 
     subsection (a)(3)(A)(ii) in each State, as estimated by the 
     Secretary.
       (B) Allocation based on percentage of rural 
     beneficiaries.--The amount allocated to a State under this 
     subparagraph from \1/3\ of the total amount made available 
     under paragraph (1) shall be based on the number of part D 
     eligible individuals (as defined in section 1860D-1(a)(3)(A) 
     of such Act (42 U.S.C. 1395w-101(a)(3)(A))) residing in a 
     rural area relative to the total number of such individuals 
     in each State, as estimated by the Secretary.
       (4) Portion of grant based on percentage of low-income 
     beneficiaries to be used to provide outreach to individuals 
     who may be subsidy eligible individuals or eligible for the 
     medicare savings program.--Each grant awarded under this 
     subsection with respect to amounts allocated under paragraph 
     (3)(A) shall be used to provide outreach to individuals who 
     may be subsidy eligible individuals (as defined in section 
     1860D-14(a)(3)(A) of the Social Security Act (42 U.S.C. 
     1395w-114(a)(3)(A)) or eligible for the Medicare Savings 
     Program (as defined in subsection (f)).
       (b) Additional Funding for Area Agencies on Aging.--
       (1) Grants.--
       (A) In general.--The Secretary, acting through the 
     Assistant Secretary for Aging, shall make grants to States 
     for area agencies on aging (as defined in section 102 of the 
     Older Americans Act of 1965 (42 U.S.C. 3002)) and Native 
     American programs carried out under the Older Americans Act 
     of 1965 (42 U.S.C. 3001 et seq.).
       (B) Funding.--For purposes of making grants under this 
     subsection, 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 Medical Insurance Trust Fund under 
     section 1841 of such Act (42 U.S.C. 1395t), in the same 
     proportion as the Secretary determines under section 1853(f) 
     of such Act (42 U.S.C. 1395w-23(f)), of $7,500,000 to the 
     Administration on Aging for fiscal year 2009, to remain 
     available until expended.
       (2) Amount of grant and allocation to states based on 
     percentage of low-income and rural beneficiaries.--The amount 
     of a grant to a State under this subsection from the total 
     amount made available under paragraph (1) shall be determined 
     in the same manner as the amount of a grant to a State under 
     subsection (a), from the total amount made available under 
     paragraph (1) of such subsection, is determined under 
     paragraph (2) and subparagraphs (A) and (B) of paragraph (3) 
     of such subsection.
       (3) Required use of funds.--
       (A) All funds.--Subject to subparagraph (B), each grant 
     awarded under this subsection shall be used to provide 
     outreach to eligible Medicare beneficiaries regarding the 
     benefits available under title XVIII of the Social Security 
     Act.
       (B) Outreach to individuals who may be subsidy eligible 
     individuals or eligible for the medicare savings program.--
     Subsection (a)(4) shall apply to each grant awarded under 
     this subsection in the same manner as it applies to a grant 
     under subsection (a).
       (c) Additional Funding for Aging and Disability Resource 
     Centers.--
       (1) Grants.--
       (A) In general.--The Secretary shall make grants to Aging 
     and Disability Resource Centers under the Aging and 
     Disability Resource Center grant program that are established 
     centers under such program on the date of the enactment of 
     this Act.
       (B) Funding.--For purposes of making grants under this 
     subsection, 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 Medical Insurance Trust Fund under 
     section 1841 of such Act (42 U.S.C. 1395t), in the same 
     proportion as the Secretary determines under section 1853(f) 
     of such Act (42 U.S.C. 1395w-23(f)), of $5,000,000 to the 
     Administration on Aging for fiscal year 2009, to remain 
     available until expended.
       (2) Required use of funds.--Each grant awarded under this 
     subsection shall be used to provide outreach to individuals 
     regarding the benefits available under the Medicare 
     prescription drug benefit under part D of title XVIII of the 
     Social Security Act and under the Medicare Savings Program.
       (d) Coordination of Efforts To Inform Older Americans About 
     Benefits Available Under Federal and State Programs.--
       (1) In general.--The Secretary, acting through the 
     Assistant Secretary for Aging, in cooperation with related 
     Federal agency partners, shall make a grant to, or enter into 
     a contract with, a qualified, experienced entity under which 
     the entity shall--
       (A) maintain and update web-based decision support tools, 
     and integrated, person-centered systems, designed to inform 
     older individuals (as defined in section 102 of the Older 
     Americans Act of 1965 (42 U.S.C. 3002)) about the full range 
     of benefits for which the individuals may be eligible under 
     Federal and State programs;
       (B) utilize cost-effective strategies to find older 
     individuals with the greatest economic need (as defined in 
     such section 102) and inform the individuals of the programs;
       (C) develop and maintain an information clearinghouse on 
     best practices and the most cost-effective methods for 
     finding older individuals with greatest economic need and 
     informing the individuals of the programs; and
       (D) provide, in collaboration with related Federal agency 
     partners administering the Federal programs, training and 
     technical assistance on the most effective outreach, 
     screening, and follow-up strategies for the Federal and State 
     programs.
       (2) Funding.--For purposes of making a grant or entering 
     into a contract under paragraph (1), 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 Medical Insurance 
     Trust Fund under section 1841 of such Act (42 U.S.C. 1395t), 
     in the same proportion as the Secretary determines under 
     section 1853(f) of such Act (42 U.S.C. 1395w-23(f)), of 
     $5,000,000 to the Administration on Aging for fiscal year 
     2009, to remain available until expended.
       (e) Reprogramming Funds From Medicare, Medicaid, and SCHIP 
     Extension Act of 2007.--The Secretary shall only use the 
     $5,000,000 in funds allocated to make grants to States for 
     Area Agencies on Aging and Aging Disability and Resource 
     Centers for the period of fiscal years 2008 through 2009 
     under section 118 of the Medicare, Medicaid, and SCHIP 
     Extension Act of 2007 (Public Law 110-173) for the sole 
     purpose of providing outreach to individuals regarding the 
     benefits

[[Page 13430]]

     available under the Medicare prescription drug benefit under 
     part D of title XVIII of the Social Security Act. The 
     Secretary shall republish the request for proposals issued on 
     April 17, 2008, in order to comply with the preceding 
     sentence.
       (f) Medicare Savings Program Defined.--For purposes of this 
     section, the term ``Medicare Savings Program'' means the 
     program of medical assistance for payment of the cost of 
     medicare cost-sharing under the Medicaid program pursuant to 
     sections 1902(a)(10)(E) and 1933 of the Social Security Act 
     (42 U.S.C. 1396a(a)(10)(E), 1396u-3).

               Subtitle B--Provisions Relating to Part A

     SEC. 121. EXPANSION AND EXTENSION OF THE MEDICARE RURAL 
                   HOSPITAL FLEXIBILITY PROGRAM.

       (a) In General.--Section 1820(g) of the Social Security Act 
     (42 U.S.C. 1395i-4(g)) is amended by adding at the end the 
     following new paragraph:
       ``(6) Providing mental health services and other health 
     services to veterans and other residents of rural areas.--
       ``(A) Grants to states.--The Secretary may award grants to 
     States that have submitted applications in accordance with 
     subparagraph (B) for increasing the delivery of mental health 
     services or other health care services deemed necessary to 
     meet the needs of veterans of Operation Iraqi Freedom and 
     Operation Enduring Freedom living in rural areas (as defined 
     for purposes of section 1886(d) and including areas that are 
     rural census tracks, as defined by the Administrator of the 
     Health Resources and Services Administration), including for 
     the provision of crisis intervention services and the 
     detection of post-traumatic stress disorder, traumatic brain 
     injury, and other signature injuries of veterans of Operation 
     Iraqi Freedom and Operation Enduring Freedom, and for 
     referral of such veterans to medical facilities operated by 
     the Department of Veterans Affairs, and for the delivery of 
     such services to other residents of such rural areas.
       ``(B) Application.--
       ``(i) In general.--An application is in accordance with 
     this subparagraph if the State submits to the Secretary at 
     such time and in such form as the Secretary may require an 
     application containing the assurances described in 
     subparagraphs (A)(ii) and (A)(iii) of subsection (b)(1).
       ``(ii) Consideration of regional approaches, networks, or 
     technology.--The Secretary may, as appropriate in awarding 
     grants to States under subparagraph (A), consider whether the 
     application submitted by a State under this subparagraph 
     includes 1 or more proposals that utilize regional 
     approaches, networks, health information technology, 
     telehealth, or telemedicine to deliver services described in 
     subparagraph (A) to individuals described in that 
     subparagraph. For purposes of this clause, a network may, as 
     the Secretary determines appropriate, include Federally 
     qualified health centers (as defined in section 1861(aa)(4)), 
     rural health clinics (as defined in section 1861(aa)(2)), 
     home health agencies (as defined in section 1861(o)), 
     community mental health centers (as defined in section 
     1861(ff)(3)(B)) and other providers of mental health 
     services, pharmacists, local government, and other providers 
     deemed necessary to meet the needs of veterans.
       ``(iii) Coordination at local level.--The Secretary shall 
     require, as appropriate, a State to demonstrate consultation 
     with the hospital association of such State, rural hospitals 
     located in such State, providers of mental health services, 
     or other appropriate stakeholders for the provision of 
     services under a grant awarded under this paragraph.
       ``(iv) Special consideration of certain applications.--In 
     awarding grants to States under subparagraph (A), the 
     Secretary shall give special consideration to applications 
     submitted by States in which veterans make up a high 
     percentage (as determined by the Secretary) of the total 
     population of the State. Such consideration shall be given 
     without regard to the number of veterans of Operation Iraqi 
     Freedom and Operation Enduring Freedom living in the areas in 
     which mental health services and other health care services 
     would be delivered under the application.
       ``(C) Coordination with va.--The Secretary shall, as 
     appropriate, consult with the Director of the Office of Rural 
     Health of the Department of Veterans Affairs in awarding and 
     administering grants to States under subparagraph (A).
       ``(D) Use of funds.--A State awarded a grant under this 
     paragraph may, as appropriate, use the funds to reimburse 
     providers of services described in subparagraph (A) to 
     individuals described in that subparagraph.
       ``(E) Limitation on use of grant funds for administrative 
     expenses.--A State awarded a grant under this paragraph may 
     not expend more than 15 percent of the amount of the grant 
     for administrative expenses.
       ``(F) Independent evaluation and final report.--The 
     Secretary shall provide for an independent evaluation of the 
     grants awarded under subparagraph (A). Not later than 1 year 
     after the date on which the last grant is awarded to a State 
     under such subparagraph, the Secretary shall submit a report 
     to Congress on such evaluation. Such report shall include an 
     assessment of the impact of such grants on increasing the 
     delivery of mental health services and other health services 
     to veterans of the United States Armed Forces living in rural 
     areas (as so defined and including such areas that are rural 
     census tracks), with particular emphasis on the impact of 
     such grants on the delivery of such services to veterans of 
     Operation Enduring Freedom and Operation Iraqi Freedom, and 
     to other individuals living in such rural areas.''.
       (b) Use of Funds for Federal Administrative Expenses.--
     Section 1820(g)(5) of the Social Security Act (42 U.S.C. 
     1395i-4(g)(5)) is amended--
       (1) by striking ``beginning with fiscal year 2005'' and 
     inserting ``for each of fiscal years 2005 through 2008''; and
       (2) by inserting ``and, of the total amount appropriated 
     for grants under paragraphs (1), (2), and (6) for a fiscal 
     year (beginning with fiscal year 2009)'' after ``2005)''.
       (c) Extension of Authorization for FLEX Grants.--Section 
     1820(j) of the Social Security Act (42 U.S.C. 1395i-4(j)) is 
     amended--
       (1) by striking ``and for'' and inserting ``for''; and
       (2) by inserting ``, for making grants to all States under 
     paragraphs (1) and (2) of subsection (g), $55,000,000 in each 
     of fiscal years 2009 and 2010, and for making grants to all 
     States under paragraph (6) of subsection (g), $50,000,000 in 
     each of fiscal years 2009 and 2010, to remain available until 
     expended'' before the period at the end.
       (d) Medicare Rural Hospital Flexibility Program.--Section 
     1820(g)(1) of the Social Security Act (42 U.S.C. 1395i-
     4(g)(1)) is amended--
       (1) in subparagraph (B), by striking ``and'' at the end;
       (2) in subparagraph (C), by striking the period at the end 
     and inserting ``; and''; and
       (3) by adding at the end the following new subparagraph:
       ``(D) providing support for critical access hospitals for 
     quality improvement, quality reporting, performance 
     improvements, and benchmarking.''.
       (e) Assistance to Small Critical Access Hospitals 
     Transitioning to Skilled Nursing Facilities and Assisted 
     Living Facilities.--Section 1820(g) of the Social Security 
     Act (42 U.S.C. 1395i-4(g)), as amended by subsection (a), is 
     amended by adding at the end the following new paragraph:
       ``(7) Critical access hospitals transitioning to skilled 
     nursing facilities and assisted living facilities.--
       ``(A) Grants.--The Secretary may award grants to eligible 
     critical access hospitals that have submitted applications in 
     accordance with subparagraph (B) for assisting such hospitals 
     in the transition to skilled nursing facilities and assisted 
     living facilities.
       ``(B) Application.--An applicable critical access hospital 
     seeking a grant under this paragraph shall submit an 
     application to the Secretary on or before such date and in 
     such form and manner as the Secretary specifies.
       ``(C) Additional requirements.--The Secretary may not award 
     a grant under this paragraph to an eligible critical access 
     hospital unless--
       ``(i) local organizations or the State in which the 
     hospital is located provides matching funds; and
       ``(ii) the hospital provides assurances that it will 
     surrender critical access hospital status under this title 
     within 180 days of receiving the grant.
       ``(D) Amount of grant.--A grant to an eligible critical 
     access hospital under this paragraph may not exceed 
     $1,000,000.
       ``(E) Funding.--There are appropriated from the Federal 
     Hospital Insurance Trust Fund under section 1817 for making 
     grants under this paragraph, $5,000,000 for fiscal year 2008.
       ``(F) Eligible critical access hospital defined.--For 
     purposes of this paragraph, the term `eligible critical 
     access hospital' means a critical access hospital that has an 
     average daily acute census of less than 0.5 and an average 
     daily swing bed census of greater than 10.0.''.

     SEC. 122. REBASING FOR SOLE COMMUNITY HOSPITALS.

       (a) Rebasing Permitted.--Section 1886(b)(3) of the Social 
     Security Act (42 U.S.C. 1395ww(b)(3)) is amended by adding at 
     the end the following new subparagraph:
       ``(L)(i) For cost reporting periods beginning on or after 
     January 1, 2009, in the case of a sole community hospital 
     there shall be substituted for the amount otherwise 
     determined under subsection (d)(5)(D)(i) of this section, if 
     such substitution results in a greater amount of payment 
     under this section for the hospital, the subparagraph (L) 
     rebased target amount.
       ``(ii) For purposes of this subparagraph, the term 
     `subparagraph (L) rebased target amount' has the meaning 
     given the term `target amount' in subparagraph (C), except 
     that--
       ``(I) there shall be substituted for the base cost 
     reporting period the 12-month cost reporting period beginning 
     during fiscal year 2006;
       ``(II) any reference in subparagraph (C)(i) to the `first 
     cost reporting period' described in such subparagraph is 
     deemed a reference to the first cost reporting period 
     beginning on or after January 1, 2009; and
       ``(III) the applicable percentage increase shall only be 
     applied under subparagraph

[[Page 13431]]

     (C)(iv) for discharges occurring on or after January 1, 
     2009.''.
       (b) Conforming Amendments.--Section 1886(b)(3) of the 
     Social Security Act (42 U.S.C. 1395ww(b)(3)) is amended--
       (1) in subparagraph (C), in the matter preceding clause 
     (i), by striking ``subparagraph (I)'' and inserting 
     ``subparagraphs (I) and (L)''; and
       (2) in subparagraph (I)(i), in the matter preceding 
     subclause (I), by striking ``For'' and inserting ``Subject to 
     subparagraph (L), for''.

     SEC. 123. DEMONSTRATION PROJECT ON COMMUNITY HEALTH 
                   INTEGRATION MODELS IN CERTAIN RURAL COUNTIES.

       (a) In General.--The Secretary shall establish a 
     demonstration project to allow eligible entities to develop 
     and test new models for the delivery of health care services 
     in eligible counties for the purpose of improving access to, 
     and better integrating the delivery of, acute care, extended 
     care, and other essential health care services to Medicare 
     beneficiaries.
       (b) Purpose.--The purpose of the demonstration project 
     under this section is to--
       (1) explore ways to increase access to, and improve the 
     adequacy of, payments for acute care, extended care, and 
     other essential health care services provided under the 
     Medicare and Medicaid programs in eligible counties; and
       (2) evaluate regulatory challenges facing such providers 
     and the communities they serve.
       (c) Requirements.--The following requirements shall apply 
     under the demonstration project:
       (1) Health care providers in eligible counties selected to 
     participate in the demonstration project under subsection 
     (d)(3) shall (when determined appropriate by the Secretary), 
     instead of the payment rates otherwise applicable under the 
     Medicare program, be reimbursed at a rate that covers at 
     least the reasonable costs of the provider in furnishing 
     acute care, extended care, and other essential health care 
     services to Medicare beneficiaries.
       (2) Methods to coordinate the survey and certification 
     process under the Medicare program and the Medicaid program 
     across all health service categories included in the 
     demonstration project shall be tested with the goal of 
     assuring quality and safety while reducing administrative 
     burdens, as appropriate, related to completing such survey 
     and certification process.
       (3) Health care providers in eligible counties selected to 
     participate in the demonstration project under subsection 
     (d)(3) and the Secretary shall work with the State to explore 
     ways to revise reimbursement policies under the Medicaid 
     program to improve access to the range of health care 
     services available in such eligible counties.
       (4) The Secretary shall identify regulatory requirements 
     that may be revised appropriately to improve access to care 
     in eligible counties.
       (5) Other essential health care services necessary to 
     ensure access to the range of health care services in 
     eligible counties selected to participate in the 
     demonstration project under subsection (d)(3) shall be 
     identified. Ways to ensure adequate funding for such services 
     shall also be explored.
       (d) Application Process.--
       (1) Eligibility.--
       (A) In general.--Eligibility to participate in the 
     demonstration project under this section shall be limited to 
     eligible entities.
       (B) Eligible entity defined.--In this section, the term 
     ``eligible entity'' means an entity that--
       (i) is a Rural Hospital Flexibility Program grantee under 
     section 1820(g) of the Social Security Act (42 U.S.C. 1395i-
     4(g)); and
       (ii) is located in a State in which at least 65 percent of 
     the counties in the State are counties that have 6 or less 
     residents per square mile.
       (2) Application.--
       (A) In general.--An eligible entity seeking to participate 
     in the demonstration project 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) Limitation.--The Secretary shall select eligible 
     entities located in not more than 4 States to participate in 
     the demonstration project under this section.
       (3) Selection of eligible counties.--An eligible entity 
     selected by the Secretary to participate in the demonstration 
     project under this section shall select not more than 6 
     eligible counties in the State in which the entity is located 
     in which to conduct the demonstration project.
       (4) Eligible county defined.--In this section, the term 
     ``eligible county'' means a county that meets the following 
     requirements:
       (A) The county has 6 or less residents per square mile.
       (B) As of the date of the enactment of this Act, a facility 
     designated as a critical access hospital which meets the 
     following requirements was located in the county:
       (i) As of the date of the enactment of this Act, the 
     critical access hospital furnished 1 or more of the 
     following:

       (I) Home health services.
       (II) Hospice care.
       (III) Rural health clinic services.

       (ii) As of the date of the enactment of this Act, the 
     critical access hospital has an average daily inpatient 
     census of 5 or less.
       (C) As of the date of the enactment of this Act, skilled 
     nursing facility services were available in the county in--
       (i) a critical access hospital using swing beds; or
       (ii) a local nursing home.
       (e) Administration.--
       (1) In general.--The demonstration project under this 
     section shall be administered jointly by the Administrator of 
     the Office of Rural Health Policy of the Health Resources and 
     Services Administration and the Administrator of the Centers 
     for Medicare & Medicaid Services, in accordance with 
     paragraphs (2) and (3).
       (2) HRSA duties.--In administering the demonstration 
     project under this section, the Administrator of the Office 
     of Rural Health Policy of the Health Resources and Services 
     Administration shall--
       (A) award grants to the eligible entities selected to 
     participate in the demonstration project; and
       (B) work with such entities to provide technical assistance 
     related to the requirements under the project.
       (3) CMS duties.--In administering the demonstration project 
     under this section, the Administrator of the Centers for 
     Medicare & Medicaid Services shall determine which provisions 
     of titles XVIII and XIX of the Social Security Act (42 U.S.C. 
     1395 et seq.; 1396 et seq.) the Secretary should waive under 
     the waiver authority under subsection (i) that are relevant 
     to the development of alternative reimbursement 
     methodologies, which may include, as appropriate, covering at 
     least the reasonable costs of the provider in furnishing 
     acute care, extended care, and other essential health care 
     services to Medicare beneficiaries and coordinating the 
     survey and certification process under the Medicare and 
     Medicaid programs, as appropriate, across all service 
     categories included in the demonstration project.
       (f) Duration.--
       (1) In general.--The demonstration project under this 
     section shall be conducted for a 3-year period beginning on 
     October 1, 2009.
       (2) Beginning date of demonstration project.--The 
     demonstration project under this section shall be considered 
     to have begun in a State on the date on which the eligible 
     counties selected to participate in the demonstration project 
     under subsection (d)(3) begin operations in accordance with 
     the requirements under the demonstration project.
       (g) Funding.--
       (1) CMS.--
       (A) In general.--The Secretary shall provide for the 
     transfer, in appropriate part from the Federal Hospital 
     Insurance Trust Fund established under section 1817 of the 
     Social Security Act (42 U.S.C. 1395i) and the Federal 
     Supplementary Medical Insurance Trust Fund established under 
     section 1841 of such Act (42 U.S.C. 1395t), of such sums as 
     are necessary for the costs to the Centers for Medicare & 
     Medicaid Services of carrying out its duties under the 
     demonstration project under this section.
       (B) Budget neutrality.--In conducting the demonstration 
     project under this section, the Secretary shall ensure that 
     the aggregate payments made by the Secretary do not exceed 
     the amount which the Secretary estimates would have been paid 
     if the demonstration project under this section was not 
     implemented.
       (2) HRSA.--There are authorized to be appropriated to the 
     Office of Rural Health Policy of the Health Resources and 
     Services Administration $800,000 for each of fiscal years 
     2010, 2011, and 2012 for the purpose of carrying out the 
     duties of such Office under the demonstration project under 
     this section, to remain available for the duration of the 
     demonstration project.
       (h) Report.--
       (1) Interim report.--Not later than the date that is 2 
     years after the date on which the demonstration project under 
     this section is implemented, the Administrator of the Office 
     of Rural Health Policy of the Health Resources and Services 
     Administration, in coordination with the Administrator of the 
     Centers for Medicare & Medicaid Services, shall submit a 
     report to Congress on the status of the demonstration project 
     that includes initial recommendations on ways to improve 
     access to, and the availability of, health care services in 
     eligible counties based on the findings of the demonstration 
     project.
       (2) Final report.--Not later than 1 year after the 
     completion of the demonstration project, the Administrator of 
     the Office of Rural Health Policy of the Health Resources and 
     Services Administration, in coordination with the 
     Administrator of the Centers for Medicare & Medicaid 
     Services, shall submit a report to Congress on such project, 
     together with recommendations for such legislation and 
     administrative action as the Secretary determines 
     appropriate.
       (i) Waiver Authority.--The Secretary may waive such 
     requirements of titles XVIII and XIX of the Social Security 
     Act (42 U.S.C. 1395 et seq.; 1396 et seq.) as may be 
     necessary

[[Page 13432]]

     and appropriate for the purpose of carrying out the 
     demonstration project under this section.
       (j) Definitions.--In this section:
       (1) Extended care services.--The term ``extended care 
     services'' means the following:
       (A) Home health services.
       (B) Covered skilled nursing facility services.
       (C) Hospice care.
       (2) Covered skilled nursing facility services.--The term 
     ``covered skilled nursing facility services'' has the meaning 
     given such term in section 1888(e)(2)(A) of the Social 
     Security Act (42 U.S.C. 1395yy(e)(2)(A)).
       (3) Critical access hospital.--The term ``critical access 
     hospital'' means a facility designated as a critical access 
     hospital under section 1820(c) of such Act (42 U.S.C. 1395i-
     4(c)).
       (4) Home health services.--The term ``home health 
     services'' has the meaning given such term in section 1861(m) 
     of such Act (42 U.S.C. 1395x(m)).
       (5) Hospice care.--The term ``hospice care'' has the 
     meaning given such term in section 1861(dd) of such Act (42 
     U.S.C. 1395x(dd)).
       (6) Medicaid program.--The term ``Medicaid program'' means 
     the program under title XIX of such Act (42 U.S.C. 1396 et 
     seq.).
       (7) Medicare program.--The term ``Medicare program'' means 
     the program under title XVIII of such Act (42 U.S.C. 1395 et 
     seq.).
       (8) Other essential health care services.--The term ``other 
     essential health care services'' means the following:
       (A) Ambulance services (as described in section 1861(s)(7) 
     of the Social Security Act (42 U.S.C. 1395x(s)(7))).
       (B) Rural health clinic services.
       (C) Public health services (as defined by the Secretary).
       (D) Other health care services determined appropriate by 
     the Secretary.
       (9) Rural health clinic services.--The term ``rural health 
     clinic services'' has the meaning given such term in section 
     1861(aa)(1) of such Act (42 U.S.C. 1395x(aa)(1)).
       (10) Secretary.--The term ``Secretary'' means the Secretary 
     of Health and Human Services.

     SEC. 124. EXTENSION OF THE RECLASSIFICATION OF CERTAIN 
                   HOSPITALS.

       (a) In General.--Subsection (a) of section 106 of division 
     B of the Tax Relief and Health Care Act of 2006 (42 U.S.C. 
     1395 note), as amended by section 117 of the Medicare, 
     Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-
     173), is amended by striking ``September 30, 2008'' and 
     inserting ``September 30, 2009''.
       (b) Special Exception Reclassifications.--Section 117(a)(2) 
     of the Medicare, Medicaid, and SCHIP Extension Act of 2007 
     (Public Law 110-173)) is amended by striking ``September 30, 
     2008'' and inserting ``the last date of the extension of 
     reclassifications under section 106(a) of the Medicare 
     Improvement and Extension Act of 2006 (division B of Public 
     Law 109-432)''.
       (c) Disregarding Section 508 Hospital Reclassifications for 
     Purposes of Group Reclassifications.--Section 508(g) of the 
     Medicare Prescription Drug, Improvement, and Modernization 
     Act of 2003 (Public Law 108-173, 42 U.S.C. 1395ww note), as 
     added by section 117(b) of the Medicare, Medicaid, and SCHIP 
     Extension Act of 2008 (Public Law 110-173)), is amended by 
     striking ``during fiscal year 2008'' and inserting 
     ``beginning on October 1, 2007, and ending on the last date 
     of the extension of reclassifications under section 106(a) of 
     the Medicare Improvement and Extension Act of 2006 (division 
     B of Public Law 109-432)''.

     SEC. 125. REVOCATION OF UNIQUE DEEMING AUTHORITY OF THE JOINT 
                   COMMISSION.

       (a) Revocation.--Section 1865 of the Social Security Act 
     (42 U.S.C. 1395bb) is amended--
       (1) by striking subsection (a); and
       (2) by redesignating subsections (b), (c), (d), and (e) as 
     subsections (a), (b), (c), and (d), respectively.
       (b) Conforming Amendments.--(1) Section 1865 of the Social 
     Security Act (42 U.S.C. 1395bb) is amended--
       (A) in subsection (a)(1), as redesignated by subsection 
     (a)(2), by striking ``In addition, if'' and inserting ``If'';
       (B) in subsection (b), as so redesignated--
       (i) by striking ``released to him by the Joint Commission 
     on Accreditation of Hospitals,'' and inserting ``released to 
     the Secretary by''; and
       (ii) by striking the comma after ``Association'';
       (C) in subsection (c), as so redesignated, by striking 
     ``pursuant to subsection (a) or (b)(1)'' and inserting 
     ``pursuant to subsection (a)(1)''; and
       (D) in subsection (d), as so redesignated, by striking 
     ``pursuant to subsection (a) or (b)(1)'' and inserting 
     ``pursuant to subsection (a)(1)''.
       (2) Section 1861(e) of the Social Security Act (42 U.S.C. 
     1395x(e)) is amended in the fourth sentence by striking ``and 
     (ii) is accredited by the Joint Commission on Accreditation 
     of Hospitals, or is accredited by or approved by a program of 
     the country in which such institution is located if the 
     Secretary finds the accreditation or comparable approval 
     standards of such program to be essentially equivalent to 
     those of the Joint Commission on Accreditation of Hospitals'' 
     and inserting ``and (ii) is accredited by a national 
     accreditation body recognized by the Secretary under section 
     1865(a), or is accredited by or approved by a program of the 
     country in which such institution is located if the Secretary 
     finds the accreditation or comparable approval standards of 
     such program to be essentially equivalent to those of such a 
     national accreditation body.''.
       (3) Section 1864(c) of the Social Security Act (42 U.S.C. 
     1395aa(c)) is amended by striking ``pursuant to subsection 
     (a) or (b)(1) of section 1865'' and inserting ``pursuant to 
     section 1865(a)(1)''.
       (4) Section 1875(b) of the Social Security Act (42 U.S.C. 
     1395ll(b)) is amended by striking ``the Joint Commission on 
     Accreditation of Hospitals,'' and inserting ``national 
     accreditation bodies under section 1865(a)''.
       (5) Section 1834(a)(20)(B) of the Social Security Act (42 
     U.S.C. 1395m(a)(20)(B)) is amended by striking ``section 
     1865(b)'' and inserting ``section 1865(a)''.
       (6) Section 1852(e)(4)(C) of the Social Security Act (42 
     U.S.C. 1395w-22(e)(4)(C)) is amended by striking ``section 
     1865(b)(2)'' and inserting ``section 1865(a)(2)''.
       (c) Authority To Recognize the Joint Commission as a 
     National Accreditation Body.--The Secretary of Health and 
     Human Services may recognize the Joint Commission as a 
     national accreditation body under section 1865 of the Social 
     Security Act (42 U.S.C. 1395bb), as amended by this section, 
     upon such terms and conditions, and upon submission of such 
     information, as the Secretary may require.
       (d) Effective Date; Transition Rule.--(1) Subject to 
     paragraph (2), the amendments made by this section shall 
     apply with respect to accreditations of hospitals granted on 
     or after the date that is 24 months after the date of the 
     enactment of this Act.
       (2) For purposes of title XVIII of the Social Security Act 
     (42 U.S.C. 1395 et seq.), the amendments made by this section 
     shall not effect the accreditation of a hospital by the Joint 
     Commission, or under accreditation or comparable approval 
     standards found to be essentially equivalent to accreditation 
     or approval standards of the Joint Commission, for the period 
     of time applicable under such accreditation.

               Subtitle C--Provisions Relating to Part B

                      PART I--PHYSICIANS' SERVICES

     SEC. 131. PHYSICIAN PAYMENT, EFFICIENCY, AND QUALITY 
                   IMPROVEMENTS.

       (a) In General.--
       (1) Increase in update for the second half of 2008 and for 
     2009.--
       (A) For the second half of 2008.--Section 1848(d)(8) of the 
     Social Security Act (42 U.S.C. 1395w-4(d)(8)), as added by 
     section 101 of the Medicare, Medicaid, and SCHIP Extension 
     Act of 2007 (Public Law 110-173), is amended--
       (i) in the heading, by striking ``a portion of'';
       (ii) in subparagraph (A), by striking ``for the period 
     beginning on January 1, 2008, and ending on June 30, 2008,''; 
     and
       (iii) in subparagraph (B)--

       (I) in the heading, by striking ``the remaining portion of 
     2008 and''; and
       (II) by striking ``for the period beginning on July 1, 
     2008, and ending on December 31, 2008, and''.

       (B) For 2009.--Section 1848(d) of the Social Security Act 
     (42 U.S.C. 1395w-4(d)), as amended by section 101 of the 
     Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public 
     Law 110-173), is amended by adding at the end the following 
     new paragraph:
       ``(9) Update for 2009.--
       ``(A) In general.--Subject to paragraphs (7)(B) and (8)(B), 
     in lieu of the update to the single conversion factor 
     established in paragraph (1)(C) that would otherwise apply 
     for 2009, the update to the single conversion factor shall be 
     1.1 percent.
       ``(B) No effect on computation of conversion factor for 
     2010 and subsequent years.--The conversion factor under this 
     subsection shall be computed under paragraph (1)(A) for 2010 
     and subsequent years as if subparagraph (A) had never 
     applied.''.
       (3) Revision of the physician assistance and quality 
     initiative fund.--
       (A) In general.--Subject to subparagraph (B), section 
     1848(l)(2) of the Social Security Act (42 U.S.C. 1395w-
     4(l)(2)), as amended by section 101(a)(2) of the Medicare, 
     Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-
     173), is amended--
       (i) in subparagraph (A)--

       (I) by striking clause (i)(III); and
       (II) by striking clause (ii)(III); and

       (ii) in subparagraph (B)--

       (I) in clause (i), by adding ``and'' at the end;
       (II) in clause (ii), by striking ``; and'' and inserting a 
     period; and
       (III) by striking clause (iii).

       (B) Contingency.--If there is enacted, before, on, or after 
     the date of the enactment of this Act, a Supplemental 
     Appropriations Act, 2008 that includes a provision amending 
     section 1848(l) of the Social Security Act, the alternative 
     amendment described in subparagraph (C)--
       (i) shall apply instead of the amendments made by 
     subparagraph (A); and

[[Page 13433]]

       (ii) shall be executed after such provision in such 
     Supplemental Appropriations Act.
       (C) Alternative amendment described.--The alternative 
     amendment described in this subparagraph is as follows: 
     Section 1848(l)(2) of the Social Security Act (42 U.S.C. 
     1395w-4(l)(2)), as amended by section 101(a)(2) of the 
     Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public 
     Law 110-173) and by the Supplemental Appropriations Act, 
     2008, is amended--
       (i) in subparagraph (A)--

       (I) by striking subclauses (III) and (IV) of clause (i); 
     and
       (II) by striking subclauses (III) and (IV) of clause (ii); 
     and

       (ii) in subparagraph (B)--

       (I) in clause (i), by adding ``and'' at the end;
       (II) in clause (ii), by striking the semicolon at the end 
     and inserting a period; and
       (III) by striking clauses (iii) and (iv).

       (b) Extension and Improvement of the Quality Reporting 
     System.--
       (1) System.--Section 1848(k)(2) of the Social Security Act 
     (42 U.S.C. 1395w-4(k)(2)), as amended by section 101(b)(1) of 
     the Medicare, Medicaid, and SCHIP Extension Act of 2007 
     (Public Law 110-173), is amended by adding at the end the 
     following new subparagraphs:
       ``(C) For 2010 and subsequent years.--
       ``(i) In general.--Subject to clause (ii), for purposes of 
     reporting data on quality measures for covered professional 
     services furnished during 2010 and each subsequent year, 
     subject to subsection (m)(3)(C), the quality measures 
     (including electronic prescribing quality measures) specified 
     under this paragraph shall be such measures selected by the 
     Secretary from measures that have been endorsed by the entity 
     with a contract with the Secretary under section 1890(a).
       ``(ii) Exception.--In the case of a specified area or 
     medical topic determined appropriate by the Secretary for 
     which a feasible and practical measure has not been endorsed 
     by the entity with a contract under section 1890(a), the 
     Secretary may specify a measure that is not so endorsed as 
     long as due consideration is given to measures that have been 
     endorsed or adopted by a consensus organization identified by 
     the Secretary, such as the AQA alliance.
       ``(D) Opportunity to provide input on measures for 2009 and 
     subsequent years.--For each quality measure (including an 
     electronic prescribing quality measure) adopted by the 
     Secretary under subparagraph (B) (with respect to 2009) or 
     subparagraph (C), the Secretary shall ensure that eligible 
     professionals have the opportunity to provide input during 
     the development, endorsement, or selection of measures 
     applicable to services they furnish.''.
       (2) Redesignation of reporting system.--Subsection (c) of 
     section 101 of division B of the Tax Relief and Health Care 
     Act of 2006 (42 U.S.C. 1395w-4 note), as amended by section 
     101(b)(2) of the Medicare, Medicaid, and SCHIP Extension Act 
     of 2007 (Public Law 110-173), is redesignated as subsection 
     (m) of section 1848 of the Social Security Act.
       (3) Incentive payments under reporting system.--Section 
     1848(m) of the Social Security Act, as redesignated by 
     paragraph (2), is amended--
       (A) by amending the heading to read as follows: ``Incentive 
     Payments for Quality Reporting'';
       (B) by striking paragraph (1) and inserting the following:
       ``(1) Incentive payments.--
       ``(A) In general.--For 2007 through 2010, with respect to 
     covered professional services furnished during a reporting 
     period by an eligible professional, if--
       ``(i) there are any quality measures that have been 
     established under the physician reporting system that are 
     applicable to any such services furnished by such 
     professional for such reporting period; and
       ``(ii) the eligible professional satisfactorily submits (as 
     determined under this subsection) to the Secretary data on 
     such quality measures in accordance with such reporting 
     system for such reporting period,
     in addition to the amount otherwise paid under this part, 
     there also shall be paid to the eligible professional (or to 
     an employer or facility in the cases described in clause (A) 
     of section 1842(b)(6)) or, in the case of a group practice 
     under paragraph (3)(C), to the group practice, from the 
     Federal Supplementary Medical Insurance Trust Fund 
     established under section 1841 an amount equal to the 
     applicable quality percent of the Secretary's estimate (based 
     on claims submitted not later than 2 months after the end of 
     the reporting period) of the allowed charges under this part 
     for all such covered professional services furnished by the 
     eligible professional (or, in the case of a group practice 
     under paragraph (3)(C), by the group practice) during the 
     reporting period.
       ``(B) Applicable quality percent.--For purposes of 
     subparagraph (A), the term `applicable quality percent' 
     means--
       ``(i) for 2007 and 2008, 1.5 percent; and
       ``(ii) for 2009 and 2010, 2.0 percent.'';
       (C) by striking paragraph (3) and redesignating paragraph 
     (2) as paragraph (3);
       (D) in paragraph (3), as so redesignated--
       (i) in the matter preceding subparagraph (A), by striking 
     ``For purposes'' and inserting the following:
       ``(A) In general.--For purposes'';
       (ii) by redesignating subparagraphs (A) and (B) as clauses 
     (i) and (ii), respectively, and moving the indentation of 
     such clauses 2 ems to the right;
       (iii) in subparagraph (A), as added by clause (i), by 
     adding at the end the following flush sentence:
     ``For years after 2008, quality measures for purposes of this 
     subparagraph shall not include electronic prescribing quality 
     measures.''; and
       (iv) by adding at the end the following new subparagraphs:
       ``(C) Satisfactory reporting measures for group 
     practices.--
       ``(i) In general.--By January 1, 2010, the Secretary shall 
     establish and have in place a process under which eligible 
     professionals in a group practice (as defined by the 
     Secretary) shall be treated as satisfactorily submitting data 
     on quality measures under subparagraph (A) and as meeting the 
     requirement described in subparagraph (B)(ii) for covered 
     professional services for a reporting period (or, for 
     purposes of subsection (a)(5), for a reporting period for a 
     year) if, in lieu of reporting measures under subsection 
     (k)(2)(C), the group practice reports measures determined 
     appropriate by the Secretary, such as measures that target 
     high-cost chronic conditions and preventive care, in a form 
     and manner, and at a time, specified by the Secretary.
       ``(ii) Statistical sampling model.--The process under 
     clause (i) shall provide for the use of a statistical 
     sampling model to submit data on measures, such as the model 
     used under the Physician Group Practice demonstration project 
     under section 1866A.
       ``(iii) No double payments.--Payments to a group practice 
     under this subsection by reason of the process under clause 
     (i) shall be in lieu of the payments that would otherwise be 
     made under this subsection to eligible professionals in the 
     group practice for satisfactorily submitting data on quality 
     measures.
       ``(D) Authority to revise satisfactorily reporting data.--
     For years after 2009, the Secretary, in consultation with 
     stakeholders and experts, may revise the criteria under this 
     subsection for satisfactorily submitting data on quality 
     measures under subparagraph (A) and the criteria for 
     submitting data on electronic prescribing quality measures 
     under subparagraph (B)(ii).'';
       (E) in paragraph (5)--
       (i) in subparagraph (C), by inserting ``for 2007, 2008, and 
     2009,'' after ``provision of law,'';
       (ii) in subparagraph (D)--

       (I) in clause (i)--

       (aa) by inserting ``for 2007 and 2008'' after ``under this 
     subsection''; and
       (bb) by striking ``paragraph (2)'' and inserting ``this 
     subsection'';

       (II) in clause (ii), by striking ``shall'' and inserting 
     ``may establish procedures to''; and
       (III) in clause (iii)--

       (aa) by inserting ``(or, in the case of a group practice 
     under paragraph (3)(C), the group practice)'' after ``an 
     eligible professional'';
       (bb) by striking ``bonus incentive payment'' and inserting 
     ``incentive payment under this subsection''; and
       (cc) by adding at the end the following new sentence: ``If 
     such payments for such period have already been made, the 
     Secretary shall recoup such payments from the eligible 
     professional (or the group practice).'';
       (iii) in subparagraph (E)--

       (I) by striking ``(i) in general.--'';
       (II) by striking clause (ii);
       (III) by redesignating subclauses (I) through (IV) as 
     clauses (i) through (iv), respectively, and moving the 
     indentation of such clauses 2 ems to the left;
       (IV) in clause (ii), as so redesignated, by striking 
     ``paragraph (2)'' and inserting ``this subsection''; and
       (V) in clause (iv), as so redesignated--

       (aa) by striking ``the bonus'' and inserting ``any''; and
       (bb) by inserting ``and the payment adjustment under 
     subsection (a)(5)(A)'' before the period at the end;
       (iv) in subparagraph (F)--

       (I) by striking ``2009, paragraph (3) shall not apply, 
     and'' and inserting ``subsequent years,''; and
       (II) by striking ``paragraph (2)'' and inserting ``this 
     subsection''; and

       (v) by adding at the end the following new subparagraph:
       ``(G) Posting on website.--The Secretary shall post on the 
     Internet website of the Centers for Medicare & Medicaid 
     Services, in an easily understandable format, a list of the 
     names of the following:
       ``(i) The eligible professionals (or, in the case of 
     reporting under paragraph (3)(C), the group practices) who 
     satisfactorily submitted data on quality measures under this 
     subsection.
       ``(ii) The eligible professionals (or, in the case of 
     reporting under paragraph (3)(C), the group practices) who 
     are successful electronic prescribers.''; and
       (F) in paragraph (6), by striking subparagraph (C) and 
     inserting the following:
       ``(C) Reporting period.--
       ``(i) In general.--Subject to clauses (ii) and (iii), the 
     term `reporting period' means--

       ``(I) for 2007, the period beginning on July 1, 2007, and 
     ending on December 31, 2007; and

[[Page 13434]]

       ``(II) for 2008, 2009, 2010, and 2011, the entire year.

       ``(ii) Authority to revise reporting period.--For years 
     after 2009, the Secretary may revise the reporting period 
     under clause (i) if the Secretary determines such revision is 
     appropriate, produces valid results on measures reported, and 
     is consistent with the goals of maximizing scientific 
     validity and reducing administrative burden. If the Secretary 
     revises such period pursuant to the preceding sentence, the 
     term `reporting period' shall mean such revised period.
       ``(iii) Reference.--Any reference in this subsection to a 
     reporting period with respect to the application of 
     subsection (a)(5) shall be deemed a reference to the 
     reporting period under subparagraph (D)(iii) of such 
     subsection.''.
       (4) Inclusion of qualified audiologists as eligible 
     professionals.--
       (A) In general.--Section 1848(k)(3)(B) of the Social 
     Security Act (42 U.S.C. 1395w-4(k)(3)(B)), is amended by 
     adding at the end the following new clause:
       ``(iv) Beginning with 2009, a qualified audiologist (as 
     defined in section 1861(ll)(3)(B)).''.
       (B) No change in billing.--Nothing in the amendment made by 
     subparagraph (A) shall be construed to change the way in 
     which billing for audiology services (as defined in section 
     1861(ll)(2) of the Social Security Act (42 U.S.C. 
     1395x(ll)(2))) occurs under title XVIII of such Act as of 
     July 1, 2008.
       (5) Conforming amendments.--Section 1848(m) of the Social 
     Security Act, as added and amended by paragraphs (2) and (3), 
     is amended--
       (A) in paragraph (5)--
       (i) in subparagraph (A)--

       (I) by striking ``section 1848(k) of the Social Security 
     Act, as added by subsection (b),'' and inserting ``subsection 
     (k)''; and
       (II) by striking ``such section'' and inserting ``such 
     subsection'';

       (ii) in subparagraph (B), by striking ``of the Social 
     Security Act (42 U.S.C. 1395l)'';
       (iii) in subparagraph (E), in the matter preceding clause 
     (i), by striking ``1869 or 1878 of the Social Security Act or 
     otherwise'' and inserting ``1869, section 1878, or 
     otherwise''; and
       (iv) in subparagraph (F)--

       (I) by striking ``paragraph (2)(B) of section 1848(k) of 
     the Social Security Act (42 U.S.C. 1395w-4(k))'' and 
     inserting ``subsection (k)(2)(B)''; and
       (II) by striking ``paragraph (4) of such section'' and 
     inserting ``subsection (k)(4)'';

       (B) in paragraph (6)--
       (i) in subparagraph (A), by striking ``section 1848(k)(3) 
     of the Social Security Act, as added by subsection (b)'' and 
     inserting ``subsection (k)(3)''; and
       (ii) in subparagraph (B), by striking ``section 1848(k) of 
     the Social Security Act, as added by subsection (b)'' and 
     inserting ``subsection (k)''; and
       (C) by striking paragraph (6)(D).
       (6) No affect on incentive payments for 2007 or 2008.--
     Nothing in the amendments made by this subsection or section 
     132 shall affect the operation of the provisions of section 
     1848(m) of the Social Security Act, as redesignated and 
     amended by such subsection and section, with respect to 2007 
     or 2008.
       (c) Physician Feedback Program To Improve Efficiency and 
     Control Costs.--
       (1) In general.--Section 1848 of the Social Security Act 
     (42 U.S.C. 1395w-4), as amended by subsection (b), is amended 
     by adding at the end the following new subsection:
       ``(n) Physician Feedback Program.--
       ``(1) Establishment.--
       ``(A) In general.--The Secretary shall establish a 
     Physician Feedback Program (in this subsection referred to as 
     the `Program') under which the Secretary shall use claims 
     data under this title (and may use other data) to provide 
     confidential reports to physicians (and, as determined 
     appropriate by the Secretary, to groups of physicians) that 
     measure the resources involved in furnishing care to 
     individuals under this title. If determined appropriate by 
     the Secretary, the Secretary may include information on the 
     quality of care furnished to individuals under this title by 
     the physician (or group of physicians) in such reports.
       ``(B) Resource use.--The resources described in 
     subparagraph (A) may be measured--
       ``(i) on an episode basis;
       ``(ii) on a per capita basis; or
       ``(iii) on both an episode and a per capita basis.
       ``(2) Implementation.--The Secretary shall implement the 
     Program by not later than January 1, 2009.
       ``(3) Data for reports.--To the extent practicable, reports 
     under the Program shall be based on the most recent data 
     available.
       ``(4) Authority to focus application.--The Secretary may 
     focus the application of the Program as appropriate, such as 
     focusing the Program on--
       ``(A) physician specialties that account for a certain 
     percentage of all spending for physicians' services under 
     this title;
       ``(B) physicians who treat conditions that have a high cost 
     or a high volume, or both, under this title;
       ``(C) physicians who use a high amount of resources 
     compared to other physicians;
       ``(D) physicians practicing in certain geographic areas; or
       ``(E) physicians who treat a minimum number of individuals 
     under this title.
       ``(5) Authority to exclude certain information if 
     insufficient information.--The Secretary may exclude certain 
     information regarding a service from a report under the 
     Program with respect to a physician (or group of physicians) 
     if the Secretary determines that there is insufficient 
     information relating to that service to provide a valid 
     report on that service.
       ``(6) Adjustment of data.--To the extent practicable, the 
     Secretary shall make appropriate adjustments to the data used 
     in preparing reports under the Program, such as adjustments 
     to take into account variations in health status and other 
     patient characteristics.
       ``(7) Education and outreach.--The Secretary shall provide 
     for education and outreach activities to physicians on the 
     operation of, and methodologies employed under, the Program.
       ``(8) Disclosure exemption.--Reports under the Program 
     shall be exempt from disclosure under section 552 of title 5, 
     United States Code.''.
       (2) GAO study and report on the physician feedback 
     program.--
       (A) Study.--The Comptroller General of the United States 
     shall conduct a study of the Physician Feedback Program 
     conducted under section 1848(n) of the Social Security Act, 
     as added by paragraph (1), including the implementation of 
     the Program.
       (B) Report.--Not later than March 1, 2011, the Comptroller 
     General of the United States shall submit a report to 
     Congress containing the results of the study conducted under 
     subparagraph (A), together with recommendations for such 
     legislation and administrative action as the Comptroller 
     General determines appropriate.
       (d) Plan for Transition to Value-Based Purchasing Program 
     for Physicians and Other Practitioners.--
       (1) In general.--The Secretary of Health and Human Services 
     shall develop a plan to transition to a value-based 
     purchasing program for payment under the Medicare program for 
     covered professional services (as defined in section 
     1848(k)(3)(A) of the Social Security Act (42 U.S.C. 1395w-
     4(k)(3)(A))).
       (2) Report.--Not later than May 1, 2010, the Secretary of 
     Health and Human Services shall submit a report to Congress 
     containing the plan developed under paragraph (1), together 
     with recommendations for such legislation and administrative 
     action as the Secretary determines appropriate.

     SEC. 132. INCENTIVES FOR ELECTRONIC PRESCRIBING.

       (a) Incentive Payments.--Section 1848(m) of the Social 
     Security Act, as added and amended by section 131(b), is 
     amended--
       (1) by inserting after paragraph (1), the following new 
     paragraph:
       ``(2) Incentive payments for electronic prescribing.--
       ``(A) In general.--For 2009 through 2013, with respect to 
     covered professional services furnished during a reporting 
     period by an eligible professional, if the eligible 
     professional is a successful electronic prescriber for such 
     reporting period, in addition to the amount otherwise paid 
     under this part, there also shall be paid to the eligible 
     professional (or to an employer or facility in the cases 
     described in clause (A) of section 1842(b)(6)) or, in the 
     case of a group practice under paragraph (3)(C), to the group 
     practice, from the Federal Supplementary Medical Insurance 
     Trust Fund established under section 1841 an amount equal to 
     the applicable electronic prescribing percent of the 
     Secretary's estimate (based on claims submitted not later 
     than 2 months after the end of the reporting period) of the 
     allowed charges under this part for all such covered 
     professional services furnished by the eligible professional 
     (or, in the case of a group practice under paragraph (3)(C), 
     by the group practice) during the reporting period.
       ``(B) Limitation with respect to electronic prescribing 
     quality measures.--The provisions of this paragraph and 
     subsection (a)(5) shall not apply to an eligible professional 
     (or, in the case of a group practice under paragraph (3)(C), 
     to the group practice) if, for the reporting period (or, for 
     purposes of subsection (a)(5), for the reporting period for a 
     year)--
       ``(i) the allowed charges under this part for all covered 
     professional services furnished by the eligible professional 
     (or group, as applicable) for the codes to which the 
     electronic prescribing quality measure applies (as identified 
     by the Secretary and published on the Internet website of the 
     Centers for Medicare & Medicaid Services as of January 1, 
     2008, and as subsequently modified by the Secretary) are less 
     than 10 percent of the total of the allowed charges under 
     this part for all such covered professional services 
     furnished by the eligible professional (or the group, as 
     applicable); or
       ``(ii) if determined appropriate by the Secretary, the 
     eligible professional does not submit (including both 
     electronically and nonelectronically) a sufficient number (as 
     determined by the Secretary) of prescriptions under part D.

     If the Secretary makes the determination to apply clause (ii) 
     for a period, then clause (i) shall not apply for such 
     period.

[[Page 13435]]

       ``(C) Applicable electronic prescribing percent.--For 
     purposes of subparagraph (A), the term `applicable electronic 
     prescribing percent' means--
       ``(i) for 2009 and 2010, 2.0 percent;
       ``(ii) for 2011 and 2012, 1.0 percent; and
       ``(iii) for 2013, 0.5 percent.'';
       (2) in paragraph (3), as redesignated by section 131(b)--
       (A) in the heading, by inserting ``and successful 
     electronic prescriber'' after ``reporting''; and
       (B) by inserting after subparagraph (A) the following new 
     subparagraph:
       ``(B) Successful electronic prescriber.--
       ``(i) In general.--For purposes of paragraph (2) and 
     subsection (a)(5), an eligible professional shall be treated 
     as a successful electronic prescriber for a reporting period 
     (or, for purposes of subsection (a)(5), for the reporting 
     period for a year) if the eligible professional meets the 
     requirement described in clause (ii), or, if the Secretary 
     determines appropriate, the requirement described in clause 
     (iii). If the Secretary makes the determination under the 
     preceding sentence to apply the requirement described in 
     clause (iii) for a period, then the requirement described in 
     clause (ii) shall not apply for such period.
       ``(ii) Requirement for submitting data on electronic 
     prescribing quality measures.--The requirement described in 
     this clause is that, with respect to covered professional 
     services furnished by an eligible professional during a 
     reporting period (or, for purposes of subsection (a)(5), for 
     the reporting period for a year), if there are any electronic 
     prescribing quality measures that have been established under 
     the physician reporting system and are applicable to any such 
     services furnished by such professional for the period, such 
     professional reported each such measure under such system in 
     at least 50 percent of the cases in which such measure is 
     reportable by such professional under such system.
       ``(iii) Requirement for electronically prescribing under 
     part d.--The requirement described in this clause is that the 
     eligible professional electronically submitted a sufficient 
     number (as determined by the Secretary) of prescriptions 
     under part D during the reporting period (or, for purposes of 
     subsection (a)(5), for the reporting period for a year).
       ``(iv) Use of part d data.--Notwithstanding sections 1860D-
     15(d)(2)(B) and 1860D-15(f)(2), the Secretary may use data 
     regarding drug claims submitted for purposes of section 
     1860D-15 that are necessary for purposes of clause (iii), 
     paragraph (2)(B)(ii), and paragraph (5)(G).
       ``(v) Standards for electronic prescribing.--To the extent 
     practicable, in determining whether eligible professionals 
     meet the requirements under clauses (ii) and (iii) for 
     purposes of clause (i), the Secretary shall ensure that 
     eligible professionals utilize electronic prescribing systems 
     in compliance with standards established for such systems 
     pursuant to the Part D Electronic Prescribing Program under 
     section 1860D-4(e).''; and
       (3) in paragraph (5)(E), by striking clause (iii) and 
     inserting the following new clause:
       ``(iii) the determination of a successful electronic 
     prescriber under paragraph (3), the limitation under 
     paragraph (2)(B), and the exception under subsection 
     (a)(5)(B); and''.
       (b) Incentive Payment Adjustment.--Section 1848(a) of the 
     Social Security Act (42 U.S.C. 1395w-4(a)) is amended by 
     adding at the end the following new paragraph:
       ``(5) Incentives for electronic prescribing.--
       ``(A) Adjustment.--
       ``(i) In general.--Subject to subparagraph (B) and 
     subsection (m)(2)(B), with respect to covered professional 
     services furnished by an eligible professional during 2012 or 
     any subsequent year, if the eligible professional is not a 
     successful electronic prescriber for the reporting period for 
     the year (as determined under subsection (m)(3)(B)), the fee 
     schedule amount for such services furnished by such 
     professional during the year (including the fee schedule 
     amount for purposes of determining a payment based on such 
     amount) shall be equal to the applicable percent of the fee 
     schedule amount that would otherwise apply to such services 
     under this subsection (determined after application of 
     paragraph (3) but without regard to this paragraph).
       ``(ii) Applicable percent.--For purposes of clause (i), the 
     term `applicable percent' means--

       ``(I) for 2012, 99 percent;
       ``(II) for 2013, 98.5 percent; and
       ``(III) for 2014 and each subsequent year, 98 percent.

       ``(B) Significant hardship exception.--The Secretary may, 
     on a case-by-case basis, exempt an eligible professional from 
     the application of the payment adjustment under subparagraph 
     (A) if the Secretary determines, subject to annual renewal, 
     that compliance with the requirement for being a successful 
     electronic prescriber would result in a significant hardship, 
     such as in the case of an eligible professional who practices 
     in a rural area without sufficient Internet access.
       ``(C) Application.--
       ``(i) Physician reporting system rules.--Paragraphs (5), 
     (6), and (8) of subsection (k) shall apply for purposes of 
     this paragraph in the same manner as they apply for purposes 
     of such subsection.
       ``(ii) Incentive payment validation rules.--Clauses (ii) 
     and (iii) of subsection (m)(5)(D) shall apply for purposes of 
     this paragraph in a similar manner as they apply for purposes 
     of such subsection.
       ``(D) Definitions.--For purposes of this paragraph:
       ``(i) Eligible professional; covered professional 
     services.--The terms `eligible professional' and `covered 
     professional services' have the meanings given such terms in 
     subsection (k)(3).
       ``(ii) Physician reporting system.--The term `physician 
     reporting system' means the system established under 
     subsection (k).
       ``(iii) Reporting period.--The term `reporting period' 
     means, with respect to a year, a period specified by the 
     Secretary.''.
       (c) GAO Report on Electronic Prescribing.--Not later than 
     September 1, 2012, the Comptroller General of the United 
     States shall submit to Congress a report on the 
     implementation of the incentives for electronic prescribing 
     established under the provisions of, and amendments made by, 
     this section. Such report shall include information regarding 
     the following:
       (1) The percentage of eligible professionals (as defined in 
     section 1848(k)(3) of the Social Security Act (42 U.S.C. 
     1395w-4(k)(3)) that are using electronic prescribing systems, 
     including a determination of whether less than 50 percent of 
     eligible professionals are using electronic prescribing 
     systems.
       (2) If less than 50 percent of eligible professionals are 
     using electronic prescribing systems, recommendations for 
     increasing the use of electronic prescribing systems by 
     eligible professionals, such as changes to the incentive 
     payment adjustments established under section 1848(a)(5) of 
     such Act, as added by subsection (b).
       (3) The estimated savings to the Medicare program under 
     title XVIII of such Act resulting from the use of electronic 
     prescribing systems.
       (4) Reductions in avoidable medical errors resulting from 
     the use of electronic prescribing systems.
       (5) The extent to which the privacy and security of the 
     personal health information of Medicare beneficiaries is 
     protected when such beneficiaries' prescription drug data and 
     usage information is used for purposes other than their 
     direct clinical care, including--
       (A) whether information identifying the beneficiary is, and 
     remains, removed from data regarding the beneficiary's 
     prescription drug utilization; and
       (B) the extent to which current law requires sufficient and 
     appropriate oversight and audit capabilities to monitor the 
     practice of prescription drug data mining.
       (6) Such other recommendations and administrative action as 
     the Comptroller General determines to be appropriate.

     SEC. 133. EXPANDING ACCESS TO PRIMARY CARE SERVICES.

       (a) Revisions to the Medicare Medical Home Demonstration 
     Project.--
       (1) Authority to expand.--Section 204(b) of division B of 
     the Tax Relief and Health Care Act of 2006 (42 U.S.C. 1395b-1 
     note) is amended--
       (A) in paragraph (1), by striking ``The project'' and 
     inserting ``Subject to paragraph (3), the project''; and
       (B) by adding at the end the following new paragraph:
       ``(3) Expansion.--The Secretary may expand the duration and 
     the scope of the project under paragraph (1), to an extent 
     determined appropriate by the Secretary, if the Secretary 
     determines that such expansion will result in any of the 
     following conditions being met:
       ``(A) The expansion of the project is expected to improve 
     the quality of patient care without increasing spending under 
     the Medicare program (not taking into account amounts 
     available under subsection (g)).
       ``(B) The expansion of the project is expected to reduce 
     spending under the Medicare program (not taking into account 
     amounts available under subsection (g)) without reducing the 
     quality of patient care.''.
       (2) Funding and application.--Section 204 of division B of 
     the Tax Relief and Health Care Act of 2006 (42 U.S.C. 1395b-1 
     note) is amended by adding at the end the following new 
     subsections:
       ``(g) Funding From SMI Trust Fund.--There shall be 
     available, from the Federal Supplementary Medical Insurance 
     Trust Fund (under section 1841 of the Social Security Act (42 
     U.S.C. 1395t)), the amount of $100,000,000 to carry out the 
     project.
       ``(h) Application.--Chapter 35 of title 44, United States 
     Code, shall not apply to the conduct of the project.''.
       (b) Application of Budget-Neutrality Adjustor to Conversion 
     Factor.--Section 1848(c)(2)(B) of the Social Security Act (42 
     U.S.C. 1395w-4(c)(2)(B)) is amended by adding at the end the 
     following new clause:
       ``(vi) Alternative application of budget-neutrality 
     adjustment.--Notwithstanding subsection (d)(9)(A), effective 
     for fee schedules established beginning with 2009, with 
     respect to the 5-year review of work relative value units 
     used in fee schedules for 2007 and

[[Page 13436]]

     2008, in lieu of continuing to apply budget-neutrality 
     adjustments required under clause (ii) for 2007 and 2008 to 
     work relative value units, the Secretary shall apply such 
     budget-neutrality adjustments to the conversion factor 
     otherwise determined for years beginning with 2009.''.

     SEC. 134. EXTENSION OF FLOOR ON MEDICARE WORK GEOGRAPHIC 
                   ADJUSTMENT UNDER THE MEDICARE PHYSICIAN FEE 
                   SCHEDULE.

       (a) In General.--Section 1848(e)(1)(E) of the Social 
     Security Act (42 U.S.C. 1395w-4(e)(1)(E)), as amended by 
     section 103 of the Medicare, Medicaid, and SCHIP Extension 
     Act of 2007 (Public Law 110-173), is amended by striking 
     ``before July 1, 2008'' and inserting ``before January 1, 
     2010''.
       (b) Treatment of Physicians' Services Furnished in Certain 
     Areas.--Section 1848(e)(1)(G) of the Social Security Act (42 
     U.S.C. 1395w-4(e)(1)(G)) is amended by adding at the end the 
     following new sentence: ``For purposes of payment for 
     services furnished in the State described in the preceding 
     sentence on or after January 1, 2009, after calculating the 
     work geographic index in subparagraph (A)(iii), the Secretary 
     shall increase the work geographic index to 1.5 if such index 
     would otherwise be less than 1.5''.
       (c) Technical Correction.--Section 602(1) of the Medicare 
     Prescription Drug, Improvement, and Modernization Act of 2003 
     (Public Law 108-173; 117 Stat. 2301) is amended to read as 
     follows:
       ``(1) in subparagraph (A), by striking `subparagraphs (B), 
     (C), and (E)' and inserting `subparagraphs (B), (C), (E), and 
     (G)'; and''.

     SEC. 135. IMAGING PROVISIONS.

       (a) Accreditation Requirement.--
       (1) Accreditation requirement.--Section 1834 of the Social 
     Security Act (42 U.S.C. 1395m) is amended by inserting after 
     subsection (d) the following new subsection:
       ``(e) Accreditation Requirement for Advanced Diagnostic 
     Imaging Services.--
       ``(1) In general.--
       ``(A) In general.--Beginning with January 1, 2012, with 
     respect to the technical component of advanced diagnostic 
     imaging services for which payment is made under the fee 
     schedule established under section 1848(b) and that are 
     furnished by a supplier, payment may only be made if such 
     supplier is accredited by an accreditation organization 
     designated by the Secretary under paragraph (2)(B)(i).
       ``(B) Advanced diagnostic imaging services defined.--In 
     this subsection, the term `advanced diagnostic imaging 
     services' includes--
       ``(i) diagnostic magnetic resonance imaging, computed 
     tomography, and nuclear medicine (including positron emission 
     tomography); and
       ``(ii) such other diagnostic imaging services, including 
     services described in section 1848(b)(4)(B) (excluding X-ray, 
     ultrasound, and fluoroscopy), as specified by the Secretary 
     in consultation with physician specialty organizations and 
     other stakeholders.
       ``(C) Supplier defined.--In this subsection, the term 
     `supplier' has the meaning given such term in section 
     1861(d).
       ``(2) Accreditation organizations.--
       ``(A) Factors for designation of accreditation 
     organizations.--The Secretary shall consider the following 
     factors in designating accreditation organizations under 
     subparagraph (B)(i) and in reviewing and modifying the list 
     of accreditation organizations designated pursuant to 
     subparagraph (C):
       ``(i) The ability of the organization to conduct timely 
     reviews of accreditation applications.
       ``(ii) Whether the organization has established a process 
     for the timely integration of new advanced diagnostic imaging 
     services into the organization's accreditation program.
       ``(iii) Whether the organization uses random site visits, 
     site audits, or other strategies for ensuring accredited 
     suppliers maintain adherence to the criteria described in 
     paragraph (3).
       ``(iv) The ability of the organization to take into account 
     the capacities of suppliers located in a rural area (as 
     defined in section 1886(d)(2)(D)).
       ``(v) Whether the organization has established reasonable 
     fees to be charged to suppliers applying for accreditation.
       ``(vi) Such other factors as the Secretary determines 
     appropriate.
       ``(B) Designation.--Not later than January 1, 2010, the 
     Secretary shall designate organizations to accredit suppliers 
     furnishing the technical component of advanced diagnostic 
     imaging services. The list of accreditation organizations so 
     designated may be modified pursuant to subparagraph (C).
       ``(C) Review and modification of list of accreditation 
     organizations.--
       ``(i) In general.--The Secretary shall review the list of 
     accreditation organizations designated under subparagraph (B) 
     taking into account the factors under subparagraph (A). 
     Taking into account the results of such review, the Secretary 
     may, by regulation, modify the list of accreditation 
     organizations designated under subparagraph (B).
       ``(ii) Special rule for accreditations done prior to 
     removal from list of designated accreditation 
     organizations.--In the case where the Secretary removes an 
     organization from the list of accreditation organizations 
     designated under subparagraph (B), any supplier that is 
     accredited by the organization during the period beginning on 
     the date on which the organization is designated as an 
     accreditation organization under subparagraph (B) and ending 
     on the date on which the organization is removed from such 
     list shall be considered to have been accredited by an 
     organization designated by the Secretary under subparagraph 
     (B) for the remaining period such accreditation is in effect.
       ``(3) Criteria for accreditation.--The Secretary shall 
     establish procedures to ensure that the criteria used by an 
     accreditation organization designated under paragraph (2)(B) 
     to evaluate a supplier that furnishes the technical component 
     of advanced diagnostic imaging services for the purpose of 
     accreditation of such supplier is specific to each imaging 
     modality. Such criteria shall include--
       ``(A) standards for qualifications of medical personnel who 
     are not physicians and who furnish the technical component of 
     advanced diagnostic imaging services;
       ``(B) standards for qualifications and responsibilities of 
     medical directors and supervising physicians, including 
     standards that recognize the considerations described in 
     paragraph (4);
       ``(C) procedures to ensure that equipment used in 
     furnishing the technical component of advanced diagnostic 
     imaging services meets performance specifications;
       ``(D) standards that require the supplier have procedures 
     in place to ensure the safety of persons who furnish the 
     technical component of advanced diagnostic imaging services 
     and individuals to whom such services are furnished;
       ``(E) standards that require the establishment and 
     maintenance of a quality assurance and quality control 
     program by the supplier that is adequate and appropriate to 
     ensure the reliability, clarity, and accuracy of the 
     technical quality of diagnostic images produced by such 
     supplier; and
       ``(F) any other standards or procedures the Secretary 
     determines appropriate.
       ``(4) Recognition in standards for the evaluation of 
     medical directors and supervising physicians.--The standards 
     described in paragraph (3)(B) shall recognize whether a 
     medical director or supervising physician--
       ``(A) in a particular specialty receives training in 
     advanced diagnostic imaging services in a residency program;
       ``(B) has attained, through experience, the necessary 
     expertise to be a medical director or a supervising 
     physician;
       ``(C) has completed any continuing medical education 
     courses relating to such services; or
       ``(D) has met such other standards as the Secretary 
     determines appropriate.
       ``(5) Rule for accreditations made prior to designation.--
     In the case of a supplier that is accredited before January 
     1, 2010, by an accreditation organization designated by the 
     Secretary under paragraph (2)(B) as of January 1, 2010, such 
     supplier shall be considered to have been accredited by an 
     organization designated by the Secretary under such paragraph 
     as of January 1, 2012, for the remaining period such 
     accreditation is in effect.''.
       (2) Conforming amendments.--
       (A) In general.--Section 1862(a) of the Social Security Act 
     (42 U.S.C. 1395y(a)) is amended--
       (i) in paragraph (21), by striking ``or'' at the end;
       (ii) in paragraph (22), by striking the period at the end 
     and inserting ``; or''; and
       (iii) by inserting after paragraph (22) the following new 
     paragraph:
       ``(23) which are the technical component of advanced 
     diagnostic imaging services described in section 
     1834(e)(1)(B) for which payment is made under the fee 
     schedule established under section 1848(b) and that are 
     furnished by a supplier (as defined in section 1861(d)), if 
     such supplier is not accredited by an accreditation 
     organization designated by the Secretary under section 
     1834(e)(2)(B).''.
       (B) Effective date.--The amendments made by this paragraph 
     shall apply to advanced diagnostic imaging services furnished 
     on or after January 1, 2012.
       (b) Demonstration Project To Assess the Appropriate Use of 
     Imaging Services.--
       (1) Conduct of demonstration project.--
       (A) In general.--The Secretary of Health and Human Services 
     (in this section referred to as the ``Secretary'') shall 
     conduct a demonstration project using the models described in 
     paragraph (2)(E) to collect data regarding physician 
     compliance with appropriateness criteria selected under 
     paragraph (2)(D) in order to determine the appropriateness of 
     advanced diagnostic imaging services furnished to Medicare 
     beneficiaries.
       (B) Advanced diagnostic imaging services.--In this 
     subsection, the term ``advanced diagnostic imaging services'' 
     has the meaning given such term in section 1834(e)(1)(B) of 
     the Social Security Act, as added by subsection (a).
       (C) Authority to focus demonstration project.--The 
     Secretary may focus the demonstration project with respect to 
     certain advanced diagnostic imaging services, such as 
     services that account for a large amount of expenditures 
     under the Medicare program, services that have recently 
     experienced a

[[Page 13437]]

     high rate of growth, or services for which appropriateness 
     criteria exists.
       (2) Implementation and design of demonstration project.--
       (A) Implementation and duration.--
       (i) Implementation.--The Secretary shall implement the 
     demonstration project under this subsection not later than 
     January 1, 2010.
       (ii) Duration.--The Secretary shall conduct the 
     demonstration project under this subsection for a 2-year 
     period.
       (B) Application and selection of participating 
     physicians.--
       (i) Application.--Each physician that desires to 
     participate in the demonstration project under this 
     subsection shall submit an application to the Secretary at 
     such time, in such manner, and containing such information as 
     the Secretary may require.
       (ii) Selection.--The Secretary shall select physicians to 
     participate in the demonstration project under this 
     subsection from among physicians submitting applications 
     under clause (i). The Secretary shall ensure that the 
     physicians selected--

       (I) represent a wide range of geographic areas, demographic 
     characteristics (such as urban, rural, and suburban), and 
     practice settings (such as private and academic practices); 
     and
       (II) have the capability to submit data to the Secretary 
     (or an entity under a subcontract with the Secretary) in an 
     electronic format in accordance with standards established by 
     the Secretary.

       (C) Administrative costs and incentives.--The Secretary 
     shall--
       (i) reimburse physicians for reasonable administrative 
     costs incurred in participating in the demonstration project 
     under this subsection; and
       (ii) provide reasonable incentives to physicians to 
     encourage participation in the demonstration project under 
     this subsection.
       (D) Use of appropriateness criteria.--
       (i) In general.--The Secretary, in consultation with 
     medical specialty societies and other stakeholders, shall 
     select criteria with respect to the clinical appropriateness 
     of advanced diagnostic imaging services for use in the 
     demonstration project under this subsection.
       (ii) Criteria selected.--Any criteria selected under clause 
     (i) shall--

       (I) be developed or endorsed by a medical specialty 
     society; and
       (II) be developed in adherence to appropriateness 
     principles developed by a consensus organization, such as the 
     AQA alliance.

       (E) Models for collecting data regarding physician 
     compliance with selected criteria.--Subject to subparagraph 
     (H), in carrying out the demonstration project under this 
     subsection, the Secretary shall use each of the following 
     models for collecting data regarding physician compliance 
     with appropriateness criteria selected under subparagraph 
     (D):
       (i) A model described in subparagraph (F).
       (ii) A model described in subparagraph (G).
       (iii) Any other model that the Secretary determines to be 
     useful in evaluating the use of appropriateness criteria for 
     advanced diagnostic imaging services.
       (F) Point of service model described.--A model described in 
     this subparagraph is a model that--
       (i) uses an electronic or paper intake form that--

       (I) contains a certification by the physician furnishing 
     the imaging service that the data on the intake form was 
     confirmed with the Medicare beneficiary before the service 
     was furnished;
       (II) contains standardized data elements for diagnosis, 
     service ordered, service furnished, and such other 
     information determined by the Secretary, in consultation with 
     medical specialty societies and other stakeholders, to be 
     germane to evaluating the effectiveness of the use of 
     appropriateness criteria selected under subparagraph (D); and
       (III) is accessible to physicians participating in the 
     demonstration project under this subsection in a format that 
     allows for the electronic submission of such form; and

       (ii) provides for feedback reports in accordance with 
     paragraph (3)(B).
       (G) Point of order model described.--A model described in 
     this subparagraph is a model that--
       (i) uses a computerized order-entry system that requires 
     the transmittal of relevant supporting information at the 
     time of referral for advanced diagnostic imaging services and 
     provides automated decision-support feedback to the referring 
     physician regarding the appropriateness of furnishing such 
     imaging services; and
       (ii) provides for feedback reports in accordance with 
     paragraph (3)(B).
       (H) Limitation.--In no case may the Secretary use prior 
     authorization--
       (i) as a model for collecting data regarding physician 
     compliance with appropriateness criteria selected under 
     subparagraph (D) under the demonstration project under this 
     subsection; or
       (ii) under any model used for collecting such data under 
     the demonstration project.
       (I) Required contracts and performance standards for 
     certain entities.--
       (i) In general.--The Secretary shall enter into contracts 
     with entities to carry out the model described in 
     subparagraph (G).
       (ii) Performance standards.--The Secretary shall establish 
     and enforce performance standards for such entities under the 
     contracts entered into under clause (i), including 
     performance standards with respect to--

       (I) the satisfaction of Medicare beneficiaries who are 
     furnished advanced diagnostic imaging services by a physician 
     participating in the demonstration project;
       (II) the satisfaction of physicians participating in the 
     demonstration project;
       (III) if applicable, timelines for the provision of 
     feedback reports under paragraph (3)(B); and
       (IV) any other areas determined appropriate by the 
     Secretary.

       (3) Comparison of utilization of advanced diagnostic 
     imaging services and feedback reports.--
       (A) Comparison of utilization of advanced diagnostic 
     imaging services.--The Secretary shall consult with medical 
     specialty societies and other stakeholders to develop 
     mechanisms for comparing the utilization of advanced 
     diagnostic imaging services by physicians participating in 
     the demonstration project under this subsection against--
       (i) the appropriateness criteria selected under paragraph 
     (2)(D); and
       (ii) to the extent feasible, the utilization of such 
     services by physicians not participating in the demonstration 
     project.
       (B) Feedback reports.--The Secretary shall, in consultation 
     with medical specialty societies and other stakeholders, 
     develop mechanisms to provide feedback reports to physicians 
     participating in the demonstration project under this 
     subsection. Such feedback reports shall include--
       (i) a profile of the rate of compliance by the physician 
     with appropriateness criteria selected under paragraph 
     (2)(D), including a comparison of--

       (I) the rate of compliance by the physician with such 
     criteria; and
       (II) the rate of compliance by the physician's peers (as 
     defined by the Secretary) with such criteria; and

       (ii) to the extent feasible, a comparison of--

       (I) the rate of utilization of advanced diagnostic imaging 
     services by the physician; and
       (II) the rate of utilization of such services by the 
     physician's peers (as defined by the Secretary) who are not 
     participating in the demonstration project.

       (4) Conduct of demonstration project and waiver.--
       (A) Conduct of demonstration project.--Chapter 35 of title 
     44, United States Code, shall not apply to the conduct of the 
     demonstration project under this subsection.
       (B) Waiver.--The Secretary may waive such provisions of 
     titles XI and XVIII of the Social Security Act (42 U.S.C. 
     1301 et seq.; 1395 et seq.) as may be necessary to carry out 
     the demonstration project under this subsection.
       (5) Evaluation and report.--
       (A) Evaluation.--The Secretary shall evaluate the 
     demonstration project under this subsection to--
       (i) assess the timeliness and efficacy of the demonstration 
     project;
       (ii) assess the performance of entities under a contract 
     entered into under paragraph (2)(I)(i);
       (iii) analyze data--

       (I) on the rates of appropriate, uncertain, and 
     inappropriate advanced diagnostic imaging services furnished 
     by physicians participating in the demonstration project;
       (II) on patterns and trends in the appropriateness and 
     inappropriateness of such services furnished by such 
     physicians;
       (III) on patterns and trends in national and regional 
     variations of care with respect to the furnishing of such 
     services; and
       (IV) on the correlation between the appropriateness of the 
     services furnished and image results; and

       (iv) address--

       (I) the thresholds used under the demonstration project to 
     identify acceptable and outlier levels of performance with 
     respect to the appropriateness of advanced diagnostic imaging 
     services furnished;
       (II) whether prospective use of appropriateness criteria 
     could have an effect on the volume of such services 
     furnished;
       (III) whether expansion of the use of appropriateness 
     criteria with respect to such services to a broader 
     population of Medicare beneficiaries would be advisable;
       (IV) whether, under such an expansion, physicians who 
     demonstrate consistent compliance with such appropriateness 
     criteria should be exempted from certain requirements;
       (V) the use of incident-specific versus practice-specific 
     outlier information in formulating future recommendations 
     with respect to the use of appropriateness criteria for such 
     services under the Medicare program; and
       (VI) the potential for using methods (including financial 
     incentives), in addition to those used under the models under 
     the demonstration project, to ensure compliance with such 
     criteria.

       (B) Report.--Not later than 1 year after the completion of 
     the demonstration project

[[Page 13438]]

     under this subsection, the Secretary shall submit to Congress 
     a report containing the results of the evaluation of the 
     demonstration project conducted under subparagraph (A), 
     together with recommendations for such legislation and 
     administrative action as the Secretary determines 
     appropriate.
       (6) Funding.--The Secretary shall provide for the transfer 
     from the Federal Supplementary Medical Insurance Trust Fund 
     established under section 1841 of the Social Security Act (42 
     U.S.C. 1395t) of $10,000,000, for carrying out the 
     demonstration project under this subsection (including costs 
     associated with administering the demonstration project, 
     reimbursing physicians for administrative costs and providing 
     incentives to encourage participation under paragraph (2)(C), 
     entering into contracts under paragraph (2)(I), and 
     evaluating the demonstration project under paragraph (5)).
       (c) GAO Study and Reports on Accreditation Requirement for 
     Advanced Diagnostic Imaging Services.--
       (1) Study.--
       (A) In general.--The Comptroller General of the United 
     States (in this subsection referred to as the ``Comptroller 
     General'') shall conduct a study, by imaging modality, on--
       (i) the effect of the accreditation requirement under 
     section 1834(e) of the Social Security Act, as added by 
     subsection (a); and
       (ii) any other relevant questions involving access to, and 
     the value of, advanced diagnostic imaging services for 
     Medicare beneficiaries.
       (B) Issues.--The study conducted under subparagraph (A) 
     shall examine the following:
       (i) The impact of such accreditation requirement on the 
     number, type, and quality of imaging services furnished to 
     Medicare beneficiaries.
       (ii) The cost of such accreditation requirement, including 
     costs to facilities of compliance with such requirement and 
     costs to the Secretary of administering such requirement.
       (iii) Access to imaging services by Medicare beneficiaries, 
     especially in rural areas, before and after implementation of 
     such accreditation requirement.
       (iv) Such other issues as the Secretary determines 
     appropriate.
       (2) Reports.--
       (A) Preliminary report.--Not later than March 1, 2013, the 
     Comptroller General shall submit a preliminary report to 
     Congress on the study conducted under paragraph (1).
       (B) Final report.--Not later than March 1, 2014, the 
     Comptroller General shall submit a final report to Congress 
     on the study conducted under paragraph (1), together with 
     recommendations for such legislation and administrative 
     action as the Comptroller General determines appropriate.

     SEC. 136. EXTENSION OF TREATMENT OF CERTAIN PHYSICIAN 
                   PATHOLOGY SERVICES UNDER MEDICARE.

       Section 542(c) of the Medicare, Medicaid, and SCHIP 
     Benefits Improvement and Protection Act of 2000 (as enacted 
     into law by section 1(a)(6) of Public Law 106-554), as 
     amended by section 732 of the Medicare Prescription Drug, 
     Improvement, and Modernization Act of 2003 (42 U.S.C. 1395w-4 
     note), section 104 of division B of the Tax Relief and Health 
     Care Act of 2006 (42 U.S.C. 1395w-4 note), and section 104 of 
     the Medicare, Medicaid, and SCHIP Extension Act of 2007 
     (Public Law 110-173), is amended by striking ``2007, and the 
     first 6 months of 2008'' and inserting ``2007, 2008, and 
     2009''.

     SEC. 137. ACCOMMODATION OF PHYSICIANS ORDERED TO ACTIVE DUTY 
                   IN THE ARMED SERVICES.

       Section 1842(b)(6)(D)(iii) of the Social Security Act (42 
     U.S.C. 1395u(b)(6)(D)(iii)), as amended by section 116 of the 
     Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public 
     Law 110-173), is amended by striking ``(before July 1, 
     2008)''.

     SEC. 138. ADJUSTMENT FOR MEDICARE MENTAL HEALTH SERVICES.

       (a) Payment Adjustment.--
       (1) In general.--For purposes of payment for services 
     furnished under the physician fee schedule under section 1848 
     of the Social Security Act (42 U.S.C. 1395w-4) during the 
     period beginning on July 1, 2008, and ending on December 31, 
     2009, the Secretary of Health and Human Services shall 
     increase the fee schedule otherwise applicable for specified 
     services by 5 percent.
       (2) Nonapplication of budget-neutrality.--The budget-
     neutrality provision of section 1848(c)(2)(B)(ii) of the 
     Social Security Act (42 U.S.C. 1395w-4(c)(2)(B)(ii)) shall 
     not apply to the adjustments described in paragraph (1).
       (b) Definition of Specified Services.--In this section, the 
     term ``specified services'' means procedure codes for 
     services in the categories of the Health Care Common 
     Procedure Coding System, established by the Secretary of 
     Health and Human Services under section 1848(c)(5) of the 
     Social Security Act (42 U.S.C. 1395w-4(c)(5)), as of July 1, 
     2007, and as subsequently modified by the Secretary, 
     consisting of psychiatric therapeutic procedures furnished in 
     office or other outpatient facility settings or in inpatient 
     hospital, partial hospital, or residential care facility 
     settings, but only with respect to such services in such 
     categories that are in the subcategories of services which 
     are--
       (1) insight oriented, behavior modifying, or supportive 
     psychotherapy; or
       (2) interactive psychotherapy.
       (c) Implementation.--Notwithstanding any other provision of 
     law, the Secretary may implement this section by program 
     instruction or otherwise.

     SEC. 139. IMPROVEMENTS FOR MEDICARE ANESTHESIA TEACHING 
                   PROGRAMS.

       (a) Special Payment Rule for Teaching Anesthesiologists.--
     Section 1848(a) of the Social Security Act (42 U.S.C. 1395w-
     4(a)), as amended by section 132(b), is amended--
       (1) in paragraph (4)(A), by inserting ``except as provided 
     in paragraph (5),'' after ``anesthesia cases,''; and
       (2) by adding at the end the following new paragraph:
       ``(6) Special rule for teaching anesthesiologists.--With 
     respect to physicians' services furnished on or after January 
     1, 2010, in the case of teaching anesthesiologists involved 
     in the training of physician residents in a single anesthesia 
     case or two concurrent anesthesia cases, the fee schedule 
     amount to be applied shall be 100 percent of the fee schedule 
     amount otherwise applicable under this section if the 
     anesthesia services were personally performed by the teaching 
     anesthesiologist alone and paragraph (4) shall not apply if--
       ``(A) the teaching anesthesiologist is present during all 
     critical or key portions of the anesthesia service or 
     procedure involved; and
       ``(B) the teaching anesthesiologist (or another 
     anesthesiologist with whom the teaching anesthesiologist has 
     entered into an arrangement) is immediately available to 
     furnish anesthesia services during the entire procedure.''.
       (b) Treatment of Certified Registered Nurse Anesthetists.--
     With respect to items and services furnished on or after 
     January 1, 2010, the Secretary of Health and Human Services 
     shall make appropriate adjustments to payments under the 
     Medicare program under title XVIII of the Social Security Act 
     for teaching certified registered nurse anesthetists to 
     implement a policy with respect to teaching certified 
     registered nurse anesthetists that--
       (1) is consistent with the adjustments made by the special 
     rule for teaching anesthesiologists under section 1848(a)(6) 
     of the Social Security Act, as added by subsection (a); and
       (2) maintains the existing payment differences between 
     teaching anesthesiologists and teaching certified registered 
     nurse anesthetists.

            PART II--OTHER PAYMENT AND COVERAGE IMPROVEMENTS

     SEC. 141. EXTENSION OF EXCEPTIONS PROCESS FOR MEDICARE 
                   THERAPY CAPS.

       Section 1833(g)(5) of the Social Security Act (42 U.S.C. 
     1395l(g)(5)), as amended by section 105 of the Medicare, 
     Medicaid, and SCHIP Extension Act of 2007 (Public Law 110-
     173), is amended by striking ``June 30, 2008'' and inserting 
     ``December 31, 2009''.

     SEC. 142. EXTENSION OF PAYMENT RULE FOR BRACHYTHERAPY AND 
                   THERAPEUTIC RADIOPHARMACEUTICALS.

       Section 1833(t)(16)(C) of the Social Security Act (42 
     U.S.C. 1395l(t)(16)(C)), as amended by section 106 of the 
     Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public 
     Law 110-173), is amended by striking ``July 1, 2008'' each 
     place it appears and inserting ``January 1, 2010''.

     SEC. 143. SPEECH-LANGUAGE PATHOLOGY SERVICES.

       (a) In General.--Section 1861(ll) of the Social Security 
     Act (42 U.S.C. 1395x(ll)) is amended--
       (1) by redesignating paragraphs (2) and (3) as paragraphs 
     (3) and (4), respectively; and
       (2) by inserting after paragraph (1) the following new 
     paragraph:
       ``(2) The term `outpatient speech-language pathology 
     services' has the meaning given the term `outpatient physical 
     therapy services' in subsection (p), except that in applying 
     such subsection--
       ``(A) `speech-language pathology' shall be substituted for 
     `physical therapy' each place it appears; and
       ``(B) `speech-language pathologist' shall be substituted 
     for `physical therapist' each place it appears.''.
       (b) Conforming Amendments.--
       (1) Section 1832(a)(2)(C) of the Social Security Act (42 
     U.S.C. 1395k(a)(2)(C)) is amended--
       (A) by striking ``and outpatient'' and inserting ``, 
     outpatient''; and
       (B) by inserting before the semicolon at the end the 
     following: ``, and outpatient speech-language pathology 
     services (other than services to which the second sentence of 
     section 1861(p) applies through the application of section 
     1861(ll)(2))''.
       (2) Subparagraphs (A) and (B) of section 1833(a)(8) of the 
     Social Security Act (42 U.S.C. 1395l(a)(8)) are each amended 
     by striking ``(which includes outpatient speech-language 
     pathology services)'' and inserting ``, outpatient speech-
     language pathology services,''.
       (3) Section 1833(g)(1) of the Social Security Act (42 
     U.S.C. 1395l(g)(1)) is amended--
       (A) by inserting ``and speech-language pathology services 
     of the type described in such section through the application 
     of section 1861(ll)(2)'' after ``1861(p)''; and

[[Page 13439]]

       (B) by inserting ``and speech-language pathology services'' 
     after ``and physical therapy services''.
       (4) The second sentence of section 1835(a) of the Social 
     Security Act (42 U.S.C. 1395n(a)) is amended--
       (A) by striking ``section 1861(g)'' and inserting 
     ``subsection (g) or (ll)(2) of section 1861'' each place it 
     appears; and
       (B) by inserting ``or outpatient speech-language pathology 
     services, respectively'' after ``occupational therapy 
     services''.
       (5) Section 1861(p) of the Social Security Act (42 U.S.C. 
     1395x(p)) is amended by striking the fourth sentence.
       (6) Section 1861(s)(2)(D) of the Social Security Act (42 
     U.S.C. 1395x(s)(2)(D)) is amended by inserting ``, outpatient 
     speech-language pathology services,'' after ``physical 
     therapy services''.
       (7) Section 1862(a)(20) of the Social Security Act (42 
     U.S.C. 1395y(a)(20)) is amended--
       (A) by striking ``outpatient occupational therapy services 
     or outpatient physical therapy services'' and inserting 
     ``outpatient physical therapy services, outpatient speech-
     language pathology services, or outpatient occupational 
     therapy services''; and
       (B) by striking ``section 1861(g)'' and inserting 
     ``subsection (g) or (ll)(2) of section 1861''.
       (8) Section 1866(e)(1) of the Social Security Act (42 
     U.S.C. 1395cc(e)(1)) is amended--
       (A) by striking ``section 1861(g)'' and inserting 
     ``subsection (g) or (ll)(2) of section 1861'' the first two 
     places it appears;
       (B) by striking ``defined) or'' and inserting 
     ``defined),''; and
       (C) by inserting before the semicolon at the end the 
     following: ``, or (through the operation of section 
     1861(ll)(2)) with respect to the furnishing of outpatient 
     speech-language pathology''.
       (9) Section 1877(h)(6) of the Social Security Act (42 
     U.S.C. 1395nn(h)(6)) is amended by adding at the end the 
     following new subparagraph:
       ``(L) Outpatient speech-language pathology services.''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to services furnished on or after July 1, 2009.
       (d) Construction.--Nothing in this section shall be 
     construed to affect existing regulations and policies of the 
     Centers for Medicare & Medicaid Services that require 
     physician oversight of care as a condition of payment for 
     speech-language pathology services under part B of the 
     Medicare program.

     SEC. 144. PAYMENT AND COVERAGE IMPROVEMENTS FOR PATIENTS WITH 
                   CHRONIC OBSTRUCTIVE PULMONARY DISEASE AND OTHER 
                   CONDITIONS.

       (a) Coverage of Pulmonary and Cardiac Rehabilitation.--
       (1) In general.--Section 1861 of the Social Security Act 
     (42 U.S.C. 1395x), as amended by section 101(a), is amended--
       (A) in subsection (s)(2)--
       (i) in subparagraph (AA), by striking ``and'' at the end;
       (ii) by adding at the end the following new subparagraphs:
       ``(CC) items and services furnished under a cardiac 
     rehabilitation program (as defined in subsection (eee)(1)) or 
     under a pulmonary rehabilitation program (as defined in 
     subsection (fff)(1)); and
       ``(DD) items and services furnished under an intensive 
     cardiac rehabilitation program (as defined in subsection 
     (eee)(4));''; and
       (B) by adding at the end the following new subsections:

  ``Cardiac Rehabilitation Program; Intensive Cardiac Rehabilitation 
                                Program

       ``(eee)(1) The term `cardiac rehabilitation program' means 
     a physician-supervised program (as described in paragraph 
     (2)) that furnishes the items and services described in 
     paragraph (3).
       ``(2) A program described in this paragraph is a program 
     under which--
       ``(A) items and services under the program are delivered--
       ``(i) in a physician's office;
       ``(ii) in a hospital on an outpatient basis; or
       ``(iii) in other settings determined appropriate by the 
     Secretary.
       ``(B) a physician is immediately available and accessible 
     for medical consultation and medical emergencies at all times 
     items and services are being furnished under the program, 
     except that, in the case of items and services furnished 
     under such a program in a hospital, such availability shall 
     be presumed; and
       ``(C) individualized treatment is furnished under a written 
     plan established, reviewed, and signed by a physician every 
     30 days that describes--
       ``(i) the individual's diagnosis;
       ``(ii) the type, amount, frequency, and duration of the 
     items and services furnished under the plan; and
       ``(iii) the goals set for the individual under the plan.
       ``(3) The items and services described in this paragraph 
     are--
       ``(A) physician-prescribed exercise;
       ``(B) cardiac risk factor modification, including 
     education, counseling, and behavioral intervention (to the 
     extent such education, counseling, and behavioral 
     intervention is closely related to the individual's care and 
     treatment and is tailored to the individual's needs);
       ``(C) psychosocial assessment;
       ``(D) outcomes assessment; and
       ``(E) such other items and services as the Secretary may 
     determine, but only if such items and services are--
       ``(i) reasonable and necessary for the diagnosis or active 
     treatment of the individual's condition;
       ``(ii) reasonably expected to improve or maintain the 
     individual's condition and functional level; and
       ``(iii) furnished under such guidelines relating to the 
     frequency and duration of such items and services as the 
     Secretary shall establish, taking into account accepted norms 
     of medical practice and the reasonable expectation of 
     improvement of the individual.
       ``(4)(A) The term `intensive cardiac rehabilitation 
     program' means a physician-supervised program (as described 
     in paragraph (2)) that furnishes the items and services 
     described in paragraph (3) and has shown, in peer-reviewed 
     published research, that it accomplished--
       ``(i) one or more of the following:
       ``(I) positively affected the progression of coronary heart 
     disease; or
       ``(II) reduced the need for coronary bypass surgery; or
       ``(III) reduced the need for percutaneous coronary 
     interventions; and
       ``(ii) a statistically significant reduction in 5 or more 
     of the following measures from their level before receipt of 
     cardiac rehabilitation services to their level after receipt 
     of such services:
       ``(I) low density lipoprotein;
       ``(II) triglycerides;
       ``(III) body mass index;
       ``(IV) systolic blood pressure;
       ``(V) diastolic blood pressure; or
       ``(VI) the need for cholesterol, blood pressure, and 
     diabetes medications.
       ``(B) To be eligible for an intensive cardiac 
     rehabilitation program, an individual must have--
       ``(i) had an acute myocardial infarction within the 
     preceding 12 months;
       ``(ii) had coronary bypass surgery;
       ``(iii) stable angina pectoris;
       ``(iv) had heart valve repair or replacement;
       ``(v) had percutaneous transluminal coronary angioplasty 
     (PTCA) or coronary stenting; or
       ``(vi) had a heart or heart-lung transplant.
       ``(C) An intensive cardiac rehabilitation program may be 
     provided in a series of 72 one-hour sessions (as defined in 
     section 1848(b)(5)), up to 6 sessions per day, over a period 
     of up to 18 weeks.
       ``(5) The Secretary shall establish standards to ensure 
     that a physician with expertise in the management of 
     individuals with cardiac pathophysiology who is licensed to 
     practice medicine in the State in which a cardiac 
     rehabilitation program (or the intensive cardiac 
     rehabilitation program, as the case may be) is offered--
       ``(A) is responsible for such program; and
       ``(B) in consultation with appropriate staff, is involved 
     substantially in directing the progress of individual in the 
     program.

                   ``Pulmonary Rehabilitation Program

       ``(fff)(1) The term `pulmonary rehabilitation program' 
     means a physician-supervised program (as described in 
     subsection (eee)(2) with respect to a program under this 
     subsection) that furnishes the items and services described 
     in paragraph (2).
       ``(2) The items and services described in this paragraph 
     are--
       ``(A) physician-prescribed exercise;
       ``(B) education or training (to the extent the education or 
     training is closely and clearly related to the individual's 
     care and treatment and is tailored to such individual's 
     needs);
       ``(C) psychosocial assessment;
       ``(D) outcomes assessment; and
       ``(E) such other items and services as the Secretary may 
     determine, but only if such items and services are--
       ``(i) reasonable and necessary for the diagnosis or active 
     treatment of the individual's condition;
       ``(ii) reasonably expected to improve or maintain the 
     individual's condition and functional level; and
       ``(iii) furnished under such guidelines relating to the 
     frequency and duration of such items and services as the 
     Secretary shall establish, taking into account accepted norms 
     of medical practice and the reasonable expectation of 
     improvement of the individual.
       ``(3) The Secretary shall establish standards to ensure 
     that a physician with expertise in the management of 
     individuals with respiratory pathophysiology who is licensed 
     to practice medicine in the State in which a pulmonary 
     rehabilitation program is offered--
       ``(A) is responsible for such program; and
       ``(B) in consultation with appropriate staff, is involved 
     substantially in directing the progress of individual in the 
     program.''.
       (2) Payment for intensive cardiac rehabilitation 
     programs.--
       (A) Inclusion in 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)(DD),'' after 
     ``(2)(AA),''.
       (B) Conforming amendment.--Section 1848(b) of the Social 
     Security Act (42 U.S.C.

[[Page 13440]]

     1395w-4(b)) is amended by adding at the end the following new 
     paragraph:
       ``(5) Treatment of intensive cardiac rehabilitation 
     program.--
       ``(A) In general.--In the case of an intensive cardiac 
     rehabilitation program described in section 1861(eee)(4), the 
     Secretary shall substitute the Medicare OPD fee schedule 
     amount established under the prospective payment system for 
     hospital outpatient department service under paragraph (3)(D) 
     of section 1833(t) for cardiac rehabilitation (under HCPCS 
     codes 93797 and 93798 for calendar year 2007, or any 
     succeeding HCPCS codes for cardiac rehabilitation).
       ``(B) Definition of session.--Each of the services 
     described in subparagraphs (A) through (E) of section 
     1861(eee)(3), when furnished for one hour, is a separate 
     session of intensive cardiac rehabilitation.
       ``(C) Multiple sessions per day.--Payment may be made for 
     up to 6 sessions per day of the series of 72 one-hour 
     sessions of intensive cardiac rehabilitation services 
     described in section 1861(eee)(4)(B).''.
       (3) Effective date.--The amendments made by this subsection 
     shall apply to items and services furnished on or after 
     January 1, 2010.
       (b) Repeal of Transfer of Ownership of Oxygen Equipment.--
       (1) In general.--Section 1834(a)(5)(F) of the Social 
     Security Act (42 U.S.C. 1395m(a)(5)(F)) is amended--
       (A) in the heading, by striking ``OWNERSHIP of equipment'' 
     and inserting ``RENTAL cap''; and
       (B) by striking clause (ii) and inserting the following:
       ``(ii) Payments and rules after rental cap.--After the 36th 
     continuous month during which payment is made for the 
     equipment under this paragraph--

       ``(I) the supplier furnishing such equipment under this 
     subsection shall continue to furnish the equipment during any 
     period of medical need for the remainder of the reasonable 
     useful lifetime of the equipment, as determined by the 
     Secretary;
       ``(II) payments for oxygen shall continue to be made in the 
     amount recognized for oxygen under paragraph (9) for the 
     period of medical need; and
       ``(III) maintenance and servicing payments shall, if the 
     Secretary determines such payments are reasonable and 
     necessary, be made (for parts and labor not covered by the 
     supplier's or manufacturer's warranty, as determined by the 
     Secretary to be appropriate for the equipment), and such 
     payments shall be in an amount determined to be appropriate 
     by the Secretary.''.

       (2) Effective date.--The amendments made by paragraph (1) 
     shall take effect on January 1, 2009.

     SEC. 145. CLINICAL LABORATORY TESTS.

       (a) Repeal of Medicare Competitive Bidding Demonstration 
     Project for Clinical Laboratory Services.--
       (1) In general.--Section 1847 of the Social Security Act 
     (42 U.S.C. 1395w-3) is amended by striking subsection (e).
       (2) Conforming amendments.--Section 1833(a)(1)(D) of the 
     Social Security Act (42 U.S.C. 1395l(a)(1)(D)) is amended--
       (A) by inserting ``or'' before ``(ii)''; and
       (B) by striking ``or (iii) on the basis'' and all that 
     follows before the comma at the end.
       (3) Effective date.--The amendments made by this subsection 
     shall take effect on the date of the enactment of this Act.
       (b) Clinical Laboratory Test Fee Schedule Update 
     Adjustment.--Section 1833(h)(2)(A)(i) of the Social Security 
     Act (42 U.S.C. 1395l(h)(2)(A)(ii)) is amended by inserting 
     ``minus, for each of the years 2009 through 2013, 0.5 
     percentage points'' after ``city average)''.

     SEC. 146. IMPROVED ACCESS TO AMBULANCE SERVICES.

       (a) Extension of Increased Medicare Payments for Ground 
     Ambulance Services.--Section 1834(l)(13) of the Social 
     Security Act (42 U.S.C. 1395m(l)(13)) is amended--
       (1) in subparagraph (A)--
       (A) in the matter preceding clause (i), by inserting ``and 
     for such services furnished on or after July 1, 2008, and 
     before January 1, 2010'' after ``2007,'';
       (B) in clause (i), by inserting ``(or 3 percent if such 
     service is furnished on or after July 1, 2008, and before 
     January 1, 2010)'' after ``2 percent''; and
       (C) in clause (ii), by inserting ``(or 2 percent if such 
     service is furnished on or after July 1, 2008, and before 
     January 1, 2010)'' after ``1 percent''; and
       (2) in subparagraph (B)--
       (A) in the heading, by striking ``2006'' and inserting 
     ``applicable period''; and
       (B) by inserting ``applicable'' before ``period''.
       (b) Air Ambulance Payment Improvements.--
       (1) Treatment of certain areas for payment for air 
     ambulance services under the ambulance fee schedule.--
     Notwithstanding any other provision of law, for purposes of 
     making payments under section 1834(l) of the Social Security 
     Act (42 U.S.C. 1395m(l)) for air ambulance services furnished 
     during the period beginning on July 1, 2008, and ending on 
     December 31, 2009, any area that was designated as a rural 
     area for purposes of making payments under such section for 
     air ambulance services furnished on December 31, 2006, shall 
     be treated as a rural area for purposes of making payments 
     under such section for air ambulance services furnished 
     during such period.
       (2) Clarification regarding satisfaction of requirement of 
     medically necessary.--
       (A) In general.--Section 1834(l)(14)(B)(i) of the Social 
     Security Act (42 U.S.C. 1395m(l)(14)(B)(i)) is amended by 
     striking ``reasonably determines or certifies'' and inserting 
     ``certifies or reasonably determines''.
       (B) Effective date.--The amendment made by subparagraph (A) 
     shall apply to services furnished on or after the date of the 
     enactment of this Act.

     SEC. 147. EXTENSION AND EXPANSION OF THE MEDICARE HOLD 
                   HARMLESS PROVISION UNDER THE PROSPECTIVE 
                   PAYMENT SYSTEM FOR HOSPITAL OUTPATIENT 
                   DEPARTMENT (HOPD) SERVICES FOR CERTAIN 
                   HOSPITALS.

       Section 1833(t)(7)(D)(i) of the Social Security Act (42 
     U.S.C. 1395l(t)(7)(D)(i)) is amended--
       (1) in subclause (II)--
       (A) in the first sentence, by striking ``2009'' and 
     inserting ``2010''; and
       (B) by striking the second sentence and inserting the 
     following new sentence: ``For purposes of the preceding 
     sentence, the applicable percentage shall be 95 percent with 
     respect to covered OPD services furnished in 2006, 90 percent 
     with respect to such services furnished in 2007, and 85 
     percent with respect to such services furnished in 2008 or 
     2009.''; and
       (2) by adding at the end the following new subclause:
       ``(III) In the case of a sole community hospital (as 
     defined in section 1886(d)(5)(D)(iii)) that has not more than 
     100 beds, for covered OPD services furnished on or after 
     January 1, 2009, and before January 1, 2010, for which the 
     PPS amount is less than the pre-BBA amount, the amount of 
     payment under this subsection shall be increased by 85 
     percent of the amount of such difference.''.

     SEC. 148. CLARIFICATION OF PAYMENT FOR CLINICAL LABORATORY 
                   TESTS FURNISHED BY CRITICAL ACCESS HOSPITALS.

       (a) In General.--Section 1834(g)(4) of the Social Security 
     Act (42 U.S.C. 1395m(g)(4)) is amended--
       (1) in the heading, by striking ``no beneficiary cost-
     sharing for'' and inserting ``treatment of''; and
       (2) by adding at the end the following new sentence: ``For 
     purposes of the preceding sentence and section 1861(mm)(3), 
     clinical diagnostic laboratory services furnished by a 
     critical access hospital shall be treated as being furnished 
     as part of outpatient critical access services without regard 
     to whether the individual with respect to whom such services 
     are furnished is physically present in the critical access 
     hospital, or in a skilled nursing facility or a clinic 
     (including a rural health clinic) that is operated by a 
     critical access hospital, at the time the specimen is 
     collected.''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to services furnished on or after July 1, 2009.

     SEC. 149. ADDING CERTAIN ENTITIES AS ORIGINATING SITES FOR 
                   PAYMENT OF TELEHEALTH SERVICES.

       (a) In General.--Section 1834(m)(4)(C)(ii) of the Social 
     Security Act (42 U.S.C. 1395m(m)(4)(C)(ii)) is amended by 
     adding at the end the following new subclauses:

       ``(VI) A hospital-based or critical access hospital-based 
     renal dialysis center (including satellites).
       ``(VII) A skilled nursing facility (as defined in section 
     1819(a)).
       ``(VIII) A community mental health center (as defined in 
     section 1861(ff)(3)(B)).''.

       (b) Conforming Amendment.--Section 1888(e)(2)(A)(ii) of the 
     Social Security Act (42 U.S.C. 1395yy(e)(2)(A)(ii)) is 
     amended by inserting ``telehealth services furnished under 
     section 1834(m)(4)(C)(ii)(VII),'' after ``section 
     1861(s)(2),''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to services furnished on or after January 1, 
     2009.

     SEC. 150. MEDPAC STUDY AND REPORT ON IMPROVING CHRONIC CARE 
                   DEMONSTRATION PROGRAMS.

       (a) Study.--The Medicare Payment Advisory Commission (in 
     this section referred to as the ``Commission'') shall conduct 
     a study on the feasability and advisability of establishing a 
     Medicare Chronic Care Practice Research Network that would 
     serve as a standing network of providers testing new models 
     of care coordination and other care approaches for 
     chronically ill beneficiaries, including the initiation, 
     operation, evaluation, and, if appropriate, expansion of such 
     models to the broader Medicare patient population. In 
     conducting such study, the Commission shall take into account 
     the structure, implementation, and results of prior and 
     existing care coordination and disease management 
     demonstrations and pilots, including the Medicare Coordinated 
     Care Demonstration Project under section 4016 of the Balanced 
     Budget Act of 1997 (42 U.S.C. 1395b-1 note) and the chronic 
     care improvement programs under section 1807 of the Social 
     Security Act (42 U.S.C. 1395b-8), commonly known to as 
     ``Medicare Health Support''.
       (b) Report.--Not later than June 15, 2009, the Commission 
     shall submit to Congress a report containing the results of 
     the study conducted under subsection (a).

[[Page 13441]]



     SEC. 151. INCREASE OF FQHC PAYMENT LIMITS.

       (a) In General.--Section 1833 of the Social Security Act 
     (42 U.S.C. 1395l) is amended by adding at the end the 
     following new subsection:
       ``(v) Increase of FQHC Payment Limits.--In the case of 
     services furnished by Federally qualified health centers (as 
     defined in section 1861(aa)(4)), the Secretary shall 
     establish payment limits with respect to such services under 
     this part for services furnished--
       ``(1) in 2010, at the limits otherwise established under 
     this part for such year increased by $5; and
       ``(2) in a subsequent year, at the limits established under 
     this subsection for the previous year increased by the 
     percentage increase in the MEI (as defined in section 
     1842(i)(3)) for such subsequent year.''.
       (b) Study and Report on the Effects and Adequacy of the 
     Medicare Federally Qualified Health Center Payment 
     Structure.--
       (1) Study.--The Comptroller General of the United States 
     shall conduct a study to determine whether the structure for 
     payments for services furnished by Federally qualified health 
     centers (as defined in section 1861(aa)(4) of the Social 
     Security Act (42 U.S.C. 1395x(aa)(4)) under part B of title 
     XVIII of the Social Security Act (42 U.S.C. 1395j et seq.) 
     adequately reimburses Federally qualified health centers for 
     the care furnished to Medicare beneficiaries. In conducting 
     such study, the Comptroller General shall--
       (A) use the most current cost report data available;
       (B) examine the effects of the payment limits established 
     with respect to such services under such part B on the 
     ability of Federally qualified health centers to furnish care 
     to Medicare beneficiaries; and
       (C) examine the cost of furnishing services covered under 
     the Medicare program as of the date of the enactment of this 
     Act that were not covered under such program as of the date 
     on which the Secretary determined the payment rate for 
     Federally qualified health centers in 1991.
       (2) Report.--Not later than 15 months after the date of the 
     enactment of this Act, the Comptroller General of the United 
     States shall submit to Congress a report on the study 
     conducted under paragraph (1), together with recommendations 
     for such legislation and administrative action the 
     Comptroller General determines appropriate, taking into 
     consideration the structure and adequacy of the prospective 
     payment methodology used to make payments to Federally 
     qualified health centers under the Medicaid program under 
     title XIX of the Social Security Act (42 U.S.C. 1396 et 
     seq.).

     SEC. 152. KIDNEY DISEASE EDUCATION AND AWARENESS PROVISIONS.

       (a) Chronic Kidney Disease Initiatives.--Part P of title 
     III of the Public Health Service Act (42 U.S.C. 280g et seq.) 
     is amended by adding at the end the following new section:

     ``SEC. 399R. CHRONIC KIDNEY DISEASE INITIATIVES.

       ``(a) In General.--The Secretary shall establish pilot 
     projects to--
       ``(1) increase public and medical community awareness 
     (particularly of those who treat patients with diabetes and 
     hypertension) regarding chronic kidney disease, focusing on 
     prevention;
       ``(2) increase screening for chronic kidney disease, 
     focusing on Medicare beneficiaries at risk of chronic kidney 
     disease; and
       ``(3) enhance surveillance systems to better assess the 
     prevalence and incidence of chronic kidney disease.
       ``(b) Scope and Duration.--
       ``(1) Scope.--The Secretary shall select at least 3 States 
     in which to conduct pilot projects under this section.
       ``(2) Duration.--The pilot projects under this section 
     shall be conducted for a period that is not longer than 5 
     years and shall begin on January 1, 2009.
       ``(c) Evaluation and Report.--The Comptroller General of 
     the United States shall conduct an evaluation of the pilot 
     projects conducted under this section. Not later than 12 
     months after the date on which the pilot projects are 
     completed, the Comptroller General shall submit to Congress a 
     report on the evaluation.
       ``(d) Authorization of Appropriations.--There are 
     authorized to be appropriated such sums as may be necessary 
     for the purpose of carrying out this section.''.
       (b) Medicare Coverage of Kidney Disease Patient Education 
     Services.--
       (1) Coverage of kidney disease education services.--
       (A) Coverage.--Section 1861(s)(2) of the Social Security 
     Act (42 U.S.C. 1395x(s)(2)), as amended by section 144(a), is 
     amended--
       (i) in subparagraph (CC), by striking ``and'' after the 
     semicolon at the end;
       (ii) in subparagraph (DD), by adding ``and'' after the 
     semicolon at the end; and
       (iii) by adding at the end the following new subparagraph:
       ``(EE) kidney disease education services (as defined in 
     subsection (ggg));''.
       (B) Services described.--Section 1861 of the Social 
     Security Act (42 U.S.C. 1395x), as amended by section 144(a), 
     is amended by adding at the end the following new subsection:

                  ``Kidney Disease Education Services

       ``(ggg)(1) The term `kidney disease education services' 
     means educational services that are--
       ``(A) furnished to an individual with stage IV chronic 
     kidney disease who, according to accepted clinical guidelines 
     identified by the Secretary, will require dialysis or a 
     kidney transplant;
       ``(B) furnished, upon the referral of the physician 
     managing the individual's kidney condition, by a qualified 
     person (as defined in paragraph (2)); and
       ``(C) designed--
       ``(i) to provide comprehensive information (consistent with 
     the standards set under paragraph (3)) regarding--
       ``(I) the management of comorbidities, including for 
     purposes of delaying the need for dialysis;
       ``(II) the prevention of uremic complications; and
       ``(III) each option for renal replacement therapy 
     (including hemodialysis and peritoneal dialysis at home and 
     in-center as well as vascular access options and 
     transplantation);
       ``(ii) to ensure that the individual has the opportunity to 
     actively participate in the choice of therapy; and
       ``(iii) to be tailored to meet the needs of the individual 
     involved.
       ``(2)(A) The term `qualified person' means--
       ``(i) a physician (as defined in section 1861(r)(1)) or a 
     physician assistant, nurse practitioner, or clinical nurse 
     specialist (as defined in section 1861(aa)(5)), who furnishes 
     services for which payment may be made under the fee schedule 
     established under section 1848; and
       ``(ii) a provider of services located in a rural area (as 
     defined in section 1886(d)(2)(D)).
       ``(B) Such term does not include a provider of services 
     (other than a provider of services described in subparagraph 
     (A)(ii)) or a renal dialysis facility.
       ``(3) The Secretary shall set standards for the content of 
     such information to be provided under paragraph (1)(C)(i) 
     after consulting with physicians, other health professionals, 
     health educators, professional organizations, accrediting 
     organizations, kidney patient organizations, dialysis 
     facilities, transplant centers, network organizations 
     described in section 1881(c)(2), and other knowledgeable 
     persons. To the extent possible the Secretary shall consult 
     with persons or entities described in the previous sentence, 
     other than a dialysis facility, that has not received 
     industry funding from a drug or biological manufacturer or 
     dialysis facility.
       ``(4) No individual shall be furnished more than 6 sessions 
     of kidney disease education services under this title.''.
       (C) Payment under the physician fee schedule.--Section 
     1848(j)(3) of the Social Security Act (42 U.S.C. 1395w-
     4(j)(3)), as amended by section 144(b), is amended by 
     inserting ``(2)(EE),'' after ``(2)(DD),''.
       (D) Limitation on number of sessions.--Section 1862(a)(1) 
     of the Social Security Act (42 U.S.C. 1395y(a)(1)) is 
     amended--
       (i) in subparagraph (M), by striking ``and'' at the end;
       (ii) in subparagraph (N), by striking the semicolon at the 
     end and inserting ``, and''; and
       (iii) by adding at the end the following new subparagraph:
       ``(O) in the case of kidney disease education services (as 
     defined in paragraph (1) of section 1861(ggg)), which are 
     furnished in excess of the number of sessions covered under 
     paragraph (4) of such section;''.
       (2) Effective date.--The amendments made by this subsection 
     shall apply to services furnished on or after January 1, 
     2010.

     SEC. 153. RENAL DIALYSIS PROVISIONS.

       (a) Composite Rate.--
       (1) Update.--Section 1881(b)(12)(G) of the Social Security 
     Act (42 U.S.C. 1395rr(b)(12)(G)) is amended--
       (A) in clause (i), by striking ``and'' at the end;
       (B) in clause (ii)--
       (i) by inserting ``and before January 1, 2009,'' after 
     ``April 1, 2007,''; and
       (ii) by striking the period at the end and inserting a 
     semicolon; and
       (C) by adding at the end the following new clauses:
       ``(iii) furnished on or after January 1, 2009, and before 
     January 1, 2010, by 1.0 percent above the amount of such 
     composite rate component for such services furnished on 
     December 31, 2008; and
       ``(iv) furnished on or after January 1, 2010, by 1.0 
     percent above the amount of such composite rate component for 
     such services furnished on December 31, 2009.''.
       (2) Site neutral composite rate.--Section 1881(b)(12)(A) of 
     the Social Security Act (42 U.S.C. 1395rr(b)(12)(A)) is 
     amended by adding at the end the following new sentence: 
     ``Under such system, the payment rate for dialysis services 
     furnished on or after January 1, 2009, by providers of 
     services shall be the same as the payment rate (computed 
     without regard to this sentence) for such services furnished 
     by renal dialysis facilities, and in applying the geographic 
     index under subparagraph (D) to providers of services,

[[Page 13442]]

     the labor share shall be based on the labor share otherwise 
     applied for renal dialysis facilities.''.
       (b) Development of ESRD Bundled Payment System.--
       (1) In general.--Section 1881(b) of the Social Security Act 
     (42 U.S.C. 1395rr(b)) is amended by adding at the end the 
     following new paragraph:
       ``(14)(A)(i) Subject to subparagraph (E), for services 
     furnished on or after January 1, 2011, the Secretary shall 
     implement a payment system under which a single payment is 
     made under this title to a provider of services or a renal 
     dialysis facility for renal dialysis services (as defined in 
     subparagraph (B)) in lieu of any other payment (including a 
     payment adjustment under paragraph (12)(B)(ii)) and for such 
     services and items furnished pursuant to paragraph (4).
       ``(ii) In implementing the system under this paragraph the 
     Secretary shall ensure that the estimated total amount of 
     payments under this title for 2011 for renal dialysis 
     services shall equal 98 percent of the estimated total amount 
     of payments for renal dialysis services, including payments 
     under paragraph (12)(B)(ii), that would have been made under 
     this title with respect to services furnished in 2011 if such 
     system had not been implemented. In making the estimation 
     under subclause (I), the Secretary shall use per patient 
     utilization data from 2007, 2008, or 2009, whichever has the 
     lowest per patient utilization.
       ``(B) For purposes of this paragraph, the term `renal 
     dialysis services' includes--
       ``(i) items and services included in the composite rate for 
     renal dialysis services as of December 31, 2010;
       ``(ii) erythropoiesis stimulating agents and any oral form 
     of such agents that are furnished to individuals for the 
     treatment of end stage renal disease;
       ``(iii) other drugs and biologicals that are furnished to 
     individuals for the treatment of end stage renal disease and 
     for which payment was (before the application of this 
     paragraph) made separately under this title, and any oral 
     equivalent form of such drug or biological; and
       ``(iv) diagnostic laboratory tests and other items and 
     services not described in clause (i) that are furnished to 
     individuals for the treatment of end stage renal disease.

     Such term does not include vaccines.
       ``(C) The system under this paragraph may provide for 
     payment on the basis of services furnished during a week or 
     month or such other appropriate unit of payment as the 
     Secretary specifies.
       ``(D) Such system--
       ``(i) shall include a payment adjustment based on case mix 
     that may take into account patient weight, body mass index, 
     comorbidities, length of time on dialysis, age, race, 
     ethnicity, and other appropriate factors;
       ``(ii) shall include a payment adjustment for high cost 
     outliers due to unusual variations in the type or amount of 
     medically necessary care, including variations in the amount 
     of erythropoiesis stimulating agents necessary for anemia 
     management;
       ``(iii) shall include a payment adjustment that reflects 
     the extent to which costs incurred by low-volume facilities 
     (as defined by the Secretary) in furnishing renal dialysis 
     services exceed the costs incurred by other facilities in 
     furnishing such services, and for payment for renal dialysis 
     services furnished on or after January 1, 2011, and before 
     January 1, 2014, such payment adjustment shall not be less 
     than 10 percent; and
       ``(iv) may include such other payment adjustments as the 
     Secretary determines appropriate, such as a payment 
     adjustment--
       ``(I) for pediatric providers of services and renal 
     dialysis facilities;
       ``(II) by a geographic index, such as the index referred to 
     in paragraph (12)(D), as the Secretary determines to be 
     appropriate; and
       ``(III) for providers of services or renal dialysis 
     facilities located in rural areas.
     The Secretary shall take into consideration the unique 
     treatment needs of children and young adults in establishing 
     such system.
       ``(E)(i) The Secretary shall provide for a four-year phase-
     in (in equal increments) of the payment amount under the 
     payment system under this paragraph, with such payment amount 
     being fully implemented for renal dialysis services furnished 
     on or after January 1, 2014.
       ``(ii) A provider of services or renal dialysis facility 
     may make a one-time election to be excluded from the phase-in 
     under clause (i) and be paid entirely based on the payment 
     amount under the payment system under this paragraph. Such an 
     election shall be made prior to January 1, 2011, in a form 
     and manner specified by the Secretary, and is final and may 
     not be rescinded.
       ``(iii) The Secretary shall make an adjustment to the 
     payments under this paragraph for years during which the 
     phase-in under clause (i) is applicable so that the estimated 
     total amount of payments under this paragraph, including 
     payments under this subparagraph, shall equal the estimated 
     total amount of payments that would otherwise occur under 
     this paragraph without such phase-in.
       ``(F)(i) Subject to clause (ii), beginning in 2012, the 
     Secretary shall annually increase payment amounts established 
     under this paragraph by an ESRD market basket percentage 
     increase factor for a bundled payment system for renal 
     dialysis services that reflects changes over time in the 
     prices of an appropriate mix of goods and services included 
     in renal dialysis services minus 1.0 percentage point.
       ``(ii) For years during which a phase-in of the payment 
     system pursuant to subparagraph (E) is applicable, the 
     following rules shall apply to the portion of the payment 
     under the system that is based on the payment of the 
     composite rate that would otherwise apply if the system under 
     this paragraph had not been enacted:
       ``(I) The update under clause (i) shall not apply.
       ``(II) The Secretary shall annually increase such composite 
     rate by the ESRD market basket percentage increase factor 
     described in clause (i) minus 1.0 percentage point.
       ``(G) There shall be no administrative or judicial review 
     under section 1869, section 1878, or otherwise of the 
     determination of payment amounts under subparagraph (A), the 
     establishment of an appropriate unit of payment under 
     subparagraph (C), the identification of renal dialysis 
     services included in the bundled payment, the adjustments 
     under subparagraph (D), the application of the phase-in under 
     subparagraph (E), and the establishment of the market basket 
     percentage increase factors under subparagraph (F).
       ``(H) Erythropoiesis stimulating agents and other drugs and 
     biologicals shall be treated as prescribed and dispensed or 
     administered and available only under part B if they are--
       ``(i) furnished to an individual for the treatment of end 
     stage renal disease; and
       ``(ii) included in subparagraph (B) for purposes of payment 
     under this paragraph.''.
       (2) Prohibition of unbundling.--Section 1862(a) of the 
     Social Security Act (42 U.S.C. 1395y(a)), as amended by 
     section 135(a)(2), is amended--
       (A) in paragraph (22), by striking ``or'' at the end;
       (B) in paragraph (23), by striking the period at the end 
     and inserting ``; or''; and
       (C) by inserting after paragraph (23) the following new 
     paragraph:
       ``(24) where such expenses are for renal dialysis services 
     (as defined in subparagraph (B) of section 1881(b)(14)) for 
     which payment is made under such section unless such payment 
     is made under such section to a provider of services or a 
     renal dialysis facility for such services.''.
       (3) Conforming amendments.--(A) Section 1881(b) of the 
     Social Security Act (42 U.S.C. 1395rr(b)) is amended--
       (i) in paragraph (12)(A), by striking ``In lieu of 
     payment'' and inserting ``Subject to paragraph (14), in lieu 
     of payment'';
       (ii) in the second sentence of paragraph (12)(F)--
       (I) by inserting ``or paragraph (14)'' after ``this 
     paragraph''; and
       (II) by inserting ``or under the system under paragraph 
     (14)'' after ``subparagraph (B)''; and
       (iii) in paragraph (13)--
       (I) in subparagraph (A), in the matter preceding clause 
     (i), by striking ``The payment amounts'' and inserting 
     ``Subject to paragraph (14), the payment amounts''; and
       (II) in subparagraph (B)--

       (aa) in clause (i), by striking ``(i)'' after ``(B)'' and 
     by inserting ``, subject to paragraph (14)'' before the 
     period at the end; and
       (bb) by striking clause (ii).

       (B) Section 1861(s)(2)(F) of the Social Security Act (42 
     U.S.C. 1395x(s)(2)(F)) is amended by inserting ``, and, for 
     items and services furnished on or after January 1, 2011, 
     renal dialysis services (as defined in section 
     1881(b)(14)(B))'' before the semicolon at the end.
       (C) Section 623(e) of the Medicare Prescription Drug, 
     Improvement, and Modernization Act of 2003 (42 U.S.C. 1395rr 
     note) is repealed.
       (4) Rule of construction.--Nothing in this subsection or 
     the amendments made by this subsection shall be construed as 
     authorizing or requiring the Secretary of Health and Human 
     Services to make payments under the payment system 
     implemented under paragraph (14)(A)(i) of section 1881(b) of 
     the Social Security Act (42 U.S.C. 1395rr(b)), as added by 
     paragraph (1), for any unrecovered amount for any bad debt 
     attributable to deductible and coinsurance on items and 
     services not included in the basic case-mix adjusted 
     composite rate under paragraph (12) of such section as in 
     effect before the date of the enactment of this Act.
       (c) Quality Incentives in the End-Stage Renal Disease 
     Program.--Section 1881 of the Social Security Act (42 U.S.C. 
     1395rr) is amended by adding at the end the following new 
     subsection:
       ``(h) Quality Incentives in the End-Stage Renal Disease 
     Program.--
       ``(1) Quality incentives.--
       ``(A) In general.--With respect to renal dialysis services 
     (as defined in subsection (b)(14)(B)) furnished on or after 
     January 1, 2012, in the case of a provider of services or a 
     renal dialysis facility that does not meet the requirement 
     described in subparagraph (B) with respect to the year, 
     payments otherwise made to such provider or facility under 
     the system under subsection (b)(14) for such services shall 
     be reduced by up to 2.0 percent, as determined appropriate by 
     the Secretary.

[[Page 13443]]

       ``(B) Requirement.--The requirement described in this 
     subparagraph is that the provider or facility meets (or 
     exceeds) the total performance score under paragraph (3) with 
     respect to performance standards established by the Secretary 
     with respect to measures specified in paragraph (2).
       ``(C) No effect in subsequent years.--The reduction under 
     subparagraph (A) shall apply only with respect to the year 
     involved, and the Secretary shall not take into account such 
     reduction in computing the single payment amount under the 
     system under paragraph (14) in a subsequent year.
       ``(2) Measures.--
       ``(A) In general.--The measures specified under this 
     paragraph with respect to the year involved shall include--
       ``(i) measures on anemia management that reflect the 
     labeling approved by the Food and Drug Administration for 
     such management and measures on dialysis adequacy;
       ``(ii) to the extent feasible, such measure (or measures) 
     of patient satisfaction as the Secretary shall specify; and
       ``(iii) such other measures as the Secretary specifies, 
     including, to the extent feasible, measures on--

       ``(I) iron management;
       ``(II) bone mineral metabolism; and
       ``(III) vascular access, including for maximizing the 
     placement of arterial venous fistula.

       ``(B) Use of endorsed measures.--
       ``(i) In general.--Subject to clause (ii), any measure 
     specified by the Secretary under subparagraph (A)(iii) must 
     have been endorsed by the entity with a contract under 
     section 1890(a).
       ``(ii) Exception.--In the case of a specified area or 
     medical topic determined appropriate by the Secretary for 
     which a feasible and practical measure has not been endorsed 
     by the entity with a contract under section 1890(a), the 
     Secretary may specify a measure that is not so endorsed as 
     long as due consideration is given to measures that have been 
     endorsed or adopted by a consensus organization identified by 
     the Secretary.
       ``(C) Updating measures.--The Secretary shall establish a 
     process for updating the measures specified under 
     subparagraph (A) in consultation with interested parties.
       ``(D) Consideration.--In specifying measures under 
     subparagraph (A), the Secretary shall consider the 
     availability of measures that address the unique treatment 
     needs of children and young adults with kidney failure.
       ``(3) Performance scores.--
       ``(A) Total performance score.--
       ``(i) In general.--Subject to clause (ii), the Secretary 
     shall develop a methodology for assessing the total 
     performance of each provider of services and renal dialysis 
     facility based on performance standards with respect to the 
     measures selected under paragraph (2) for a performance 
     period established under paragraph (4)(D) (in this subsection 
     referred to as the `total performance score').
       ``(ii) Application.--For providers of services and renal 
     dialysis facilities that do not meet (or exceed) the total 
     performance score established by the Secretary, the Secretary 
     shall ensure that the application of the methodology 
     developed under clause (i) results in an appropriate 
     distribution of reductions in payment under paragraph (1) 
     among providers and facilities achieving different levels of 
     total performance scores, with providers and facilities 
     achieving the lowest total performance scores receiving the 
     largest reduction in payment under paragraph (1)(A).
       ``(iii) Weighting of measures.--In calculating the total 
     performance score, the Secretary shall weight the scores with 
     respect to individual measures calculated under subparagraph 
     (B) to reflect priorities for quality improvement, such as 
     weighting scores to ensure that providers of services and 
     renal dialysis facilities have strong incentives to meet or 
     exceed anemia management and dialysis adequacy performance 
     standards, as determined appropriate by the Secretary.
       ``(B) Performance score with respect to individual 
     measures.--The Secretary shall also calculate separate 
     performance scores for each measure, including for dialysis 
     adequacy and anemia management.
       ``(4) Performance standards.--
       ``(A) Establishment.--Subject to subparagraph (E), the 
     Secretary shall establish performance standards with respect 
     to measures selected under paragraph (2) for a performance 
     period with respect to a year (as established under 
     subparagraph (D)).
       ``(B) Achievement and improvement.--The performance 
     standards established under subparagraph (A) shall include 
     levels of achievement and improvement, as determined 
     appropriate by the Secretary.
       ``(C) Timing.--The Secretary shall establish the 
     performance standards under subparagraph (A) prior to the 
     beginning of the performance period for the year involved.
       ``(D) Performance period.--The Secretary shall establish 
     the performance period with respect to a year. Such 
     performance period shall occur prior to the beginning of such 
     year.
       ``(E) Special rule.--The Secretary shall initially use as 
     the performance standard for the measures specified under 
     paragraph (2)(A)(i) for a provider of services or a renal 
     dialysis facility the lesser of--
       ``(i) the performance of such provider or facility for such 
     measures in the year selected by the Secretary under the 
     second sentence of subsection (b)(14)(A)(ii); or
       ``(ii) a performance standard based on the national 
     performance rates for such measures in a period determined by 
     the Secretary.
       ``(5) Limitation on review.--There shall be no 
     administrative or judicial review under section 1869, section 
     1878, or otherwise of the following:
       ``(A) The determination of the amount of the payment 
     reduction under paragraph (1).
       ``(B) The establishment of the performance standards and 
     the performance period under paragraph (4).
       ``(C) The specification of measures under paragraph (2).
       ``(D) The methodology developed under paragraph (3) that is 
     used to calculate total performance scores and performance 
     scores for individual measures.
       ``(6) Public reporting.--
       ``(A) In general.--The Secretary shall establish procedures 
     for making information regarding performance under this 
     subsection available to the public, including--
       ``(i) the total performance score achieved by the provider 
     of services or renal dialysis facility under paragraph (3) 
     and appropriate comparisons of providers of services and 
     renal dialysis facilities to the national average with 
     respect to such scores; and
       ``(ii) the performance score achieved by the provider or 
     facility with respect to individual measures.
       ``(B) Opportunity to review.--The procedures established 
     under subparagraph (A) shall ensure that a provider of 
     services and a renal dialysis facility has the opportunity to 
     review the information that is to be made public with respect 
     to the provider or facility prior to such data being made 
     public.
       ``(C) Certificates.--
       ``(i) In general.--The Secretary shall provide certificates 
     to providers of services and renal dialysis facilities who 
     furnish renal dialysis services under this section to display 
     in patient areas. The certificate shall indicate the total 
     performance score achieved by the provider or facility under 
     paragraph (3).
       ``(ii) Display.--Each facility or provider receiving a 
     certificate under clause (i) shall prominently display the 
     certificate at the provider or facility.
       ``(D) Web-based list.--The Secretary shall establish a list 
     of providers of services and renal dialysis facilities who 
     furnish renal dialysis services under this section that 
     indicates the total performance score and the performance 
     score for individual measures achieved by the provider and 
     facility under paragraph (3). Such information shall be 
     posted on the Internet website of the Centers for Medicare & 
     Medicaid Services in an easily understandable format.''.
       (d) GAO Report on ESRD Bundling System and Quality 
     Initiative.--Not later than March 1, 2013, the Comptroller 
     General of the United States shall submit to Congress a 
     report on the implementation of the payment system under 
     subsection (b)(14) of section 1881 of the Social Security Act 
     (as added by subsection (b)) for renal dialysis services and 
     related services (defined in subparagraph (B) of such 
     subsection (b)(14)) and the quality initiative under 
     subsection (h) of such section 1881 (as added by subsection 
     (b)). Such report shall include the following information:
       (1) The changes in utilization rates for erythropoiesis 
     stimulating agents.
       (2) The mode of administering such agents, including 
     information on the proportion of individuals receiving such 
     agents intravenously as compared to subcutaneously.
       (3) An analysis of the payment adjustment under 
     subparagraph (D)(iii) of such subsection (b)(14), including 
     an examination of the extent to which costs incurred by 
     rural, low-volume providers and facilities (as defined by the 
     Secretary) in furnishing renal dialysis services exceed the 
     costs incurred by other providers and facilities in 
     furnishing such services, and a recommendation regarding the 
     appropriateness of such adjustment.
       (4) The changes, if any, in utilization rates of drugs and 
     biologicals that the Secretary identifies under subparagraph 
     (B)(iii) of such subsection (b)(14), and any oral equivalent 
     or oral substitutable forms of such drugs and biologicals or 
     of drugs and biologicals described in clause (ii), that have 
     occurred after implementation of the payment system under 
     such subsection (b)(14).
       (5) Any other information or recommendations for 
     legislative and administrative actions determined appropriate 
     by the Comptroller General.

     SEC. 154. DELAY IN AND REFORM OF MEDICARE DMEPOS COMPETITIVE 
                   ACQUISITION PROGRAM.

       (a) Temporary Delay and Reform.--
       (1) In general.--Section 1847(a)(1) of the Social Security 
     Act (42 U.S.C. 1395w-3(a)(1)) is amended--
       (A) in paragraph (1)--
       (i) in subparagraph (B)(i), in the matter before subclause 
     (I), by inserting ``consistent with subparagraph (D)'' after 
     ``in a manner'';
       (ii) in subparagraph (B)(i)(II), by striking ``80'' and 
     ``in 2009'' and inserting ``an additional 70'' and ``in 
     2011'', respectively;
       (iii) in subparagraph (B)(i)(III), by striking ``after 
     2009'' and inserting ``after 2011 (or, in

[[Page 13444]]

     the case of national mail order for items and services, after 
     2010)''; and
       (iv) by adding at the end the following new subparagraphs:
       ``(D) Changes in competitive acquisition programs.--
       ``(i) Round 1 of competitive acquisition program.--
     Notwithstanding subparagraph (B)(i)(I) and in implementing 
     the first round of the competitive acquisition programs under 
     this section--

       ``(I) the contracts awarded under this section before the 
     date of the enactment of this subparagraph are terminated, no 
     payment shall be made under this title on or after the date 
     of the enactment of this subparagraph based on such a 
     contract, and, to the extent that any damages may be 
     applicable as a result of the termination of such contracts, 
     such damages shall be payable from the Federal Supplementary 
     Medical Insurance Trust Fund under section 1841;
       ``(II) the Secretary shall conduct the competition for such 
     round in a manner so that it occurs in 2009 with respect to 
     the same items and services and the same areas, except as 
     provided in subclauses (III) and (IV);
       ``(III) the Secretary shall exclude Puerto Rico so that 
     such round of competition covers 9, instead of 10, of the 
     largest metropolitan statistical areas; and
       ``(IV) there shall be excluded negative pressure wound 
     therapy items and services.

     Nothing in subclause (I) shall be construed to provide an 
     independent cause of action or right to administrative or 
     judicial review with regard to the termination provided under 
     such subclause.
       ``(ii) Round 2 of competitive acquisition program.--In 
     implementing the second round of the competitive acquisition 
     programs under this section described in subparagraph 
     (B)(i)(II)--

       ``(I) the metropolitan statistical areas to be included 
     shall be those metropolitan statistical areas selected by the 
     Secretary for such round as of June 1, 2008; and
       ``(II) the Secretary may subdivide metropolitan statistical 
     areas with populations (based upon the most recent data from 
     the Census Bureau) of at least 8,000,000 into separate areas 
     for competitive acquisition purposes.

       ``(iii) Exclusion of certain areas in subsequent rounds of 
     competitive acquisition programs.--In implementing subsequent 
     rounds of the competitive acquisition programs under this 
     section, including under subparagraph (B)(i)(III), for 
     competitions occurring before 2015, the Secretary shall 
     exempt from the competitive acquisition program (other than 
     national mail order) the following:

       ``(I) Rural areas.
       ``(II) Metropolitan statistical areas not selected under 
     round 1 or round 2 with a population of less than 250,000.
       ``(III) Areas with a low population density within a 
     metropolitan statistical area that is otherwise selected, as 
     determined for purposes of paragraph (3)(A).

       ``(E) Verification by oig.--The Inspector General of the 
     Department of Health and Human Services shall, through post-
     award audit, survey, or otherwise, assess the process used by 
     the Centers for Medicare & Medicaid Services to conduct 
     competitive bidding and subsequent pricing determinations 
     under this section that are the basis for pivotal bid amounts 
     and single payment amounts for items and services in 
     competitive bidding areas under rounds 1 and 2 of the 
     competitive acquisition programs under this section and may 
     continue to verify such calculations for subsequent rounds of 
     such programs.
       ``(F) Supplier feedback on missing financial 
     documentation.--
       ``(i) In general.--In the case of a bid where one or more 
     covered documents in connection with such bid have been 
     submitted not later than the covered document review date 
     specified in clause (ii), the Secretary--

       ``(I) shall provide, by not later than 45 days (in the case 
     of the first round of the competitive acquisition programs as 
     described in subparagraph (B)(i)(I)) or 90 days (in the case 
     of a subsequent round of such programs) after the covered 
     document review date, for notice to the bidder of all such 
     documents that are missing as of the covered document review 
     date; and
       ``(II) may not reject the bid on the basis that any covered 
     document is missing or has not been submitted on a timely 
     basis, if all such missing documents identified in the notice 
     provided to the bidder under subclause (I) are submitted to 
     the Secretary not later than 10 business days after the date 
     of such notice.

       ``(ii) Covered document review date.--The covered document 
     review date specified in this clause with respect to a 
     competitive acquisition program is the later of--

       ``(I) the date that is 30 days before the final date 
     specified by the Secretary for submission of bids under such 
     program; or
       ``(II) the date that is 30 days after the first date 
     specified by the Secretary for submission of bids under such 
     program.

       ``(iii) Limitations of process.--The process provided under 
     this subparagraph--

       ``(I) applies only to the timely submission of covered 
     documents;
       ``(II) does not apply to any determination as to the 
     accuracy or completeness of covered documents submitted or 
     whether such documents meet applicable requirements;
       ``(III) shall not prevent the Secretary from rejecting a 
     bid based on any basis not described in clause (i)(II); and
       ``(IV) shall not be construed as permitting a bidder to 
     change bidding amounts or to make other changes in a bid 
     submission.

       ``(iv) Covered document defined.--In this subparagraph, the 
     term `covered document' means a financial, tax, or other 
     document required to be submitted by a bidder as part of an 
     original bid submission under a competitive acquisition 
     program in order to meet required financial standards. Such 
     term does not include other documents, such as the bid itself 
     or accreditation documentation.''; and
       (B) in paragraph (2)(A), by inserting before the period at 
     the end the following: ``and excluding certain complex 
     rehabilitative power wheelchairs recognized by the Secretary 
     as classified within group 3 or higher (and related 
     accessories when furnished in connection with such 
     wheelchairs)''.
       (2) Budget neutral offset.--
       (A) In general.--Section 1834(a)(14) of such Act (42 U.S.C. 
     1395m(a)(14)) is amended--
       (i) by striking ``and'' at the end of subparagraphs (H) and 
     (I);
       (ii) by redesignating subparagraph (J) as subparagraph (M); 
     and
       (iii) by inserting after subparagraph (I) the following new 
     subparagraphs:
       ``(J) for 2009--
       ``(i) in the case of items and services furnished in any 
     geographic area, if such items or services were selected for 
     competitive acquisition in any area under the competitive 
     acquisition program under section 1847(a)(1)(B)(i)(I) before 
     July 1, 2008, including related accessories but only if 
     furnished with such items and services selected for such 
     competition and diabetic supplies but only if furnished 
     through mail order, - 9.5 percent; or
       ``(ii) in the case of other items and services, the 
     percentage increase in the consumer price index for all urban 
     consumers (U.S. urban average) for the 12-month period ending 
     with June 2008;
       ``(K) for 2010, 2011, 2012, and 2013, the percentage 
     increase in the consumer price index for all urban consumers 
     (U.S. urban average) for the 12-month period ending with June 
     of the previous year;
       ``(L) for 2014--
       ``(i) in the case of items and services described in 
     subparagraph (J)(i) for which a payment adjustment has not 
     been made under subsection (a)(1)(F)(ii) in any previous 
     year, the percentage increase in the consumer price index for 
     all urban consumers (U.S. urban average) for the 12-month 
     period ending with June 2013, plus 2.0 percentage points; or
       ``(ii) in the case of other items and services, the 
     percentage increase in the consumer price index for all urban 
     consumers (U.S. urban average) for the 12-month period ending 
     with June 2013; and''.
       (B) Conforming treatment for certain items and services.--
     The second sentence of section 1842(s)(1) of such Act (42 
     U.S.C. 1395u(s)(1)) is amended by striking ``except that'' 
     and all that follows and inserting the following: ``except 
     that for items and services described in paragraph (2)(D)--
       ``(A) for 2009 section 1834(a)(14)(J)(i) shall apply under 
     this paragraph instead of the percentage increase otherwise 
     applicable; and
       ``(B) for 2014, if subparagraph (A) is applied to the items 
     and services and there has not been a payment adjustment 
     under paragraph (3)(B) for the items and services for any 
     previous year, the percentage increase computed under section 
     1834(a)(14)(L)(i) shall apply instead of the percentage 
     increase otherwise applicable.''.
       (3) Conforming delay.--Subsections (a)(1)(F) and (h)(1)(H) 
     of section 1834 of the Social Security Act (42 U.S.C. 1395m) 
     are each amended by striking ``January 1, 2009'' and 
     inserting ``January 1, 2011''.
       (4) Considerations in application.--Section 1834 of such 
     Act (42 U.S.C. 1395m) is amended--
       (A) in subsection (a)(1)--
       (i) in subparagraph (F), by inserting ``subject to 
     subparagraph (G),'' before ``that are included''; and
       (ii) by adding at the end the following new subparagraph:
       ``(G) Use of information on competitive bid rates.--The 
     Secretary shall specify by regulation the methodology to be 
     used in applying the provisions of subparagraph (F)(ii) and 
     subsection (h)(1)(H)(ii). In promulgating such regulation, 
     the Secretary shall consider the costs of items and services 
     in areas in which such provisions would be applied compared 
     to the payment rates for such items and services in 
     competitive acquisition areas.''; and
       (B) in subsection (h)(1)(H), by inserting ``subject to 
     subsection (a)(1)(G),'' before ``that are included''.
       (b) Quality Standards.--
       (1) Application of accreditation requirement.--
       (A) In general.--Section 1834(a)(20) of the Social Security 
     Act (42 U.S.C. 1395m(a)(20)) is amended--
       (i) in subparagraph (E), by inserting ``including 
     subparagraph (F),'' after ``under this paragraph,''; and

[[Page 13445]]

       (ii) by adding at the end the following new subparagraph:
       ``(F) Application of accreditation requirement.--In 
     implementing quality standards under this paragraph--
       ``(i) subject to clause (ii), the Secretary shall require 
     suppliers furnishing items and services described in 
     subparagraph (D) on or after October 1, 2009, directly or as 
     a subcontractor for another entity, to have submitted to the 
     Secretary evidence of accreditation by an accreditation 
     organization designated under subparagraph (B) as meeting 
     applicable quality standards; and
       ``(ii) in applying such standards and the accreditation 
     requirement of clause (i) with respect to eligible 
     professionals (as defined in section 1848(k)(3)(B)), and 
     including such other persons, such as orthotists and 
     prosthetists, as specified by the Secretary, furnishing such 
     items and services--

       ``(I) such standards and accreditation requirement shall 
     not apply to such professionals and persons unless the 
     Secretary determines that the standards being applied are 
     designed specifically to be applied to such professionals and 
     persons; and
       ``(II) the Secretary may exempt such professionals and 
     persons from such standards and requirement if the Secretary 
     determines that licensing, accreditation, or other mandatory 
     quality requirements apply to such professionals and persons 
     with respect to the furnishing of such items and services.''.

       (B) Construction.--Section 1834(a)(20)(F)(ii) of the Social 
     Security Act, as added by subparagraph (A), shall not be 
     construed as preventing the Secretary of Health and Human 
     Services from implementing the first round of competition 
     under section 1847 of such Act on a timely basis.
       (2) Disclosure of subcontractors under competitive 
     acquisition program.--Section 1847(b)(3) of such Act (42 
     U.S.C. 1395w-3(b)(3)) is amended by adding at the end the 
     following new subparagraph:
       ``(C) Disclosure of subcontractors.--
       ``(i) Initial disclosure.--Not later than 10 days after the 
     date a supplier enters into a contract with the Secretary 
     under this section, such supplier shall disclose to the 
     Secretary, in a form and manner specified by the Secretary, 
     the information on--

       ``(I) each subcontracting relationship that such supplier 
     has in furnishing items and services under the contract; and
       ``(II) whether each such subcontractor meets the 
     requirement of section 1834(a)(20)(F)(i), if applicable to 
     such subcontractor.

       ``(ii) Subsequent disclosure.--Not later than 10 days after 
     such a supplier subsequently enters into a subcontracting 
     relationship described in clause (i)(II), such supplier shall 
     disclose to the Secretary, in such form and manner, the 
     information described in subclauses (I) and (II) of clause 
     (i).''.
       (3) Competitive acquisition ombudsman.--Such section is 
     further amended by adding at the end the following new 
     subsection:
       ``(f) Competitive Acquisition Ombudsman.--The Secretary 
     shall provide for a competitive acquisition ombudsman within 
     the Centers for Medicare & Medicaid Services in order to 
     respond to complaints and inquiries made by suppliers and 
     individuals relating to the application of the competitive 
     acquisition program under this section. The ombudsman may be 
     within the office of the Medicare Beneficiary Ombudsman 
     appointed under section 1808(c). The ombudsman shall submit 
     to Congress an annual report on the activities under this 
     subsection, which report shall be coordinated with the report 
     provided under section 1808(c)(2)(C).''.
       (c) Change in Reports and Deadlines.--
       (1) GAO report.--Section 302(b)(3) of the Medicare 
     Prescription Drug, Improvement, and Modernization Act of 2003 
     (Public Law 108-173) is amended--
       (A) in subparagraph (A)--
       (i) by inserting ``and as amended by section 2 of the 
     Medicare DMEPOS Competitive Acquisition Reform Act of 2008'' 
     after ``as amended by paragraph (1)''; and
       (ii) by inserting before the period at the end the 
     following: ``and the topics specified in subparagraph (C)'';
       (B) in subparagraph (B), by striking ``Not later than 
     January 1, 2009,'' and inserting ``Not later than 1 year 
     after the first date that payments are made under section 
     1847 of the Social Security Act,''; and
       (C) by adding at the end the following new subparagraph:
       ``(C) Topics.--The topics specified in this subparagraph, 
     for the study under subparagraph (A) concerning the 
     competitive acquisition program, are the following:
       ``(i) Beneficiary access to items and services under the 
     program, including the impact on such access of awarding 
     contracts to bidders that--

       ``(I) did not have a physical presence in an area where 
     they received a contract; or
       ``(II) had no previous experience providing the product 
     category they were contracted to provide.

       ``(ii) Beneficiary satisfaction with the program and cost 
     savings to beneficiaries under the program.
       ``(iii) Costs to suppliers of participating in the program 
     and recommendations about ways to reduce those costs without 
     compromising quality standards or savings to the Medicare 
     program.
       ``(iv) Impact of the program on small business suppliers.
       ``(v) Analysis of the impact on utilization of different 
     items and services paid within the same Healthcare Common 
     Procedure Coding System (HCPCS) code.
       ``(vi) Costs to the Centers for Medicare & Medicaid 
     Services, including payments made to contractors, for 
     administering the program compared with administration of a 
     fee schedule, in comparison with the relative savings of the 
     program.
       ``(vii) Impact on access, Medicare spending, and 
     beneficiary spending of any difference in treatment for 
     diabetic testing supplies depending on how such supplies are 
     furnished.
       ``(viii) Such other topics as the Comptroller General 
     determines to be appropriate.''.
       (2) Delay in other deadlines.--
       (A) Program advisory and oversight committee.--Section 
     1847(c)(5) of the Social Security Act (42 U.S.C. 1395w-
     3(c)(5)) is amended by striking ``December 31, 2009'' and 
     inserting ``December 31, 2011''.
       (B) Secretarial report.--Section 1847(d) of such Act (42 
     U.S.C. 1395w-3(d)) is amended by striking ``July 1, 2009'' 
     and inserting ``July 1, 2011''.
       (C) IG report.--Section 302(e) of the Medicare Prescription 
     Drug, Improvement, and Modernization Act of 2003 (Public Law 
     108-173) is amended by striking ``July 1, 2009'' and 
     inserting ``July 1, 2011''.
       (3) Evaluation of certain code.--The Secretary of Health 
     and Human Services shall evaluate the existing Health Care 
     Common Procedure Coding System (HCPCS) codes for negative 
     pressure wound therapy to ensure accurate reporting and 
     billing for items and services under such codes. In carrying 
     out such evaluation, the Secretary shall use an existing 
     process, administered by the Durable Medical Equipment 
     Medicare Administrative Contractors, for the consideration of 
     coding changes and consider all relevant studies and 
     information furnished pursuant to such process.
       (d) Other Provisions.--
       (1) Exemption from competitive acquisition for certain off-
     the-shelf ortho-
     tics.--Section 1847(a) of the Social Security Act (42 U.S.C. 
     1395w-3(a)) is amended by adding at the end the following new 
     paragraph:
       ``(7) Exemption from competitive acquisition.--The programs 
     under this section shall not apply to the following:
       ``(A) Certain off-the-shelf orthotics.--Items and services 
     described in paragraph (2)(C) if furnished--
       ``(i) by a physician or other practitioner (as defined by 
     the Secretary) to the physician's or practitioner's own 
     patients as part of the physician's or practitioner's 
     professional service; or
       ``(ii) by a hospital to the hospital's own patients during 
     an admission or on the date of discharge.
       ``(B) Certain durable medical equipment.--Those items and 
     services described in paragraph (2)(A)--
       ``(i) that are furnished by a hospital to the hospital's 
     own patients during an admission or on the date of discharge; 
     and
       ``(ii) to which such programs would not apply, as specified 
     by the Secretary, if furnished by a physician to the 
     physician's own patients as part of the physician's 
     professional service.''.
       (2) Correction in face-to-face examination requirement.--
     Section 1834(a)(1)(E)(ii) of such Act (42 U.S.C. 
     1395m(a)(1)(E)(ii)) is amended by striking ``1861(r)(1)'' and 
     inserting ``1861(r)''.
       (3) Special rule in case of national mail-order competition 
     for diabetic testing strips.--Section 1847(b) of such Act (42 
     U.S.C. 1395w-3(b)) is amended--
       (A) by redesignating paragraph (10) as paragraph (11); and
       (B) by inserting after paragraph (9) the following new 
     paragraph:
       ``(10) Special rule in case of competition for diabetic 
     testing strips.--
       ``(A) In general.--With respect to the competitive 
     acquisition program for diabetic testing strips conducted 
     after the first round of the competitive acquisition 
     programs, if an entity does not demonstrate to the Secretary 
     that its bid covers types of diabetic testing strip products 
     that, in the aggregate and taking into account volume for the 
     different products, cover 50 percent (or such higher 
     percentage as the Secretary may specify) of all such types of 
     products, the Secretary shall reject such bid. The volume for 
     such types of products may be determined in accordance with 
     such data (which may be market based data) as the Secretary 
     recognizes.
       ``(B) Study of types of testing strip products.--Before 
     2011, the Inspector General of the Department of Health and 
     Human Services shall conduct a study to determine the types 
     of diabetic testing strip products by volume that could be 
     used to make determinations pursuant to subparagraph (A) for 
     the first competition under the competitive acquisition 
     program described in such subparagraph and submit to the 
     Secretary a report on the results of the study. The Inspector 
     General shall also conduct such a study and submit such a 
     report before the Secretary conducts a subsequent competitive 
     acquistion program described in subparagraph (A).''.

[[Page 13446]]

       (4) Other conforming amendments.--Section 1847(b)(11) of 
     such Act, as redesignated by paragraph (3), is amended--
       (A) in subparagraph (C), by inserting ``and the 
     identification of areas under subsection (a)(1)(D)(iii)'' 
     after ``(a)(1)(A)'';
       (B) in subparagraph (D), by inserting ``and implementation 
     of subsection (a)(1)(D)'' after ``(a)(1)(B)'';
       (C) in subparagraph (E), by striking ``or'' at the end;
       (D) in subparagraph (F), by striking the period at the end 
     and inserting ``; or''; and
       (E) by adding at the end the following new subparagraph:
       ``(G) the implementation of the special rule described in 
     paragraph (10).''.
       (5) Funding for implementation.--In addition to funds 
     otherwise available, for purposes of implementing the 
     provisions of, and amendments made by, this section, other 
     than the amendment made by subsection (c)(1) and other than 
     section 1847(a)(1)(E) of the Social Security Act, the 
     Secretary of Health and Human Services shall provide for the 
     transfer from the Federal Supplementary Medical Insurance 
     Trust Fund established under section 1841 of the Social 
     Security Act (42 U.S.C. 1395t) to the Centers for Medicare & 
     Medicaid Services Program Management Account of $20,000,000 
     for fiscal year 2008, and $25,000,000 for each of fiscal 
     years 2009 through 2012. Amounts transferred under this 
     paragraph for a fiscal year shall be available until 
     expended.
       (e) Effective Date.--The amendments made by this section 
     shall take effect as of June 30, 2008.

               Subtitle D--Provisions Relating to Part C

     SEC. 161. PHASE-OUT OF INDIRECT MEDICAL EDUCATION (IME).

       (a) In General.--Section 1853(k) of the Social Security Act 
     (42 U.S.C. 1395w-23(k)) 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) Phase-out of the indirect costs of medical education 
     from capitation rates.--
       ``(A) In general.--After determining the applicable amount 
     for an area for a year under paragraph (1) (beginning with 
     2010), the Secretary shall adjust such applicable amount to 
     exclude from such applicable amount the phase-in percentage 
     (as defined in subparagraph (B)(i)) for the year of the 
     Secretary's estimate of the standardized costs for payments 
     under section 1886(d)(5)(B) in the area for the year. Any 
     adjustment under the preceding sentence shall be made prior 
     to the application of paragraph (2).
       ``(B) Percentages defined.--For purposes of this paragraph:
       ``(i) Phase-in percentage.--The term `phase-in percentage' 
     means, for an area for a year, the ratio (expressed as a 
     percentage, but in no case greater than 100 percent) of--

       ``(I) the maximum cumulative adjustment percentage for the 
     year (as defined in clause (ii)); to
       ``(II) the standardized IME cost percentage (as defined in 
     clause (iii)) for the area and year.

       ``(ii) Maximum cumulative adjustment percentage.--The term 
     `maximum cumulative adjustment percentage' means, for--

       ``(I) 2010, 0.60 percent; and
       ``(II) a subsequent year, the maximum cumulative adjustment 
     percentage for the previous year increased by 0.60 percentage 
     points.

       ``(iii) Standardized ime cost percentage.--The term 
     `standardized IME cost percentage' means, for an area for a 
     year, the per capita costs for payments under section 
     1886(d)(5)(B) (expressed as a percentage of the fee-for-
     service amount specified in subparagraph (C)) for the area 
     and the year.
       ``(C) Fee-for-service amount.--The fee-for-service amount 
     specified in this subparagraph for an area for a year is the 
     amount specified under subsection (c)(1)(D) for the area and 
     the year.''.
       (b) Excluding Adjustment From the Update.--Section 
     1853(k)(1)(B)(i) of the Social Security Act (42 U.S.C. 1395w-
     23(k)(1)(B)(i)) is amended by striking ``paragraph (2)'' and 
     inserting ``paragraphs (2) and (4)''.
       (c) Hold Harmless for PACE Program Payments.--Section 
     1894(d) of the Social Security Act (42 U.S.C. 1395eee(d)) is 
     amended by adding at the end the following new paragraph:
       ``(3) Capitation rates determined without regard to the 
     phase-out of the indirect costs of medical education from the 
     annual medicare advantage capitation rate.--Capitation 
     amounts under this subsection shall be determined without 
     regard to the application of section 1853(k)(4).''.

     SEC. 162. REVISIONS TO REQUIREMENTS FOR MEDICARE ADVANTAGE 
                   PRIVATE FEE-FOR-SERVICE PLANS.

       (a) Requirements To Assure Access to Network Coverage.--
       (1) Individual market.--Section 1852(d) of the Social 
     Security Act (42 U.S.C. 1395w-22(d)) is amended--
       (A) in paragraph (4), in the second sentence, by striking 
     ``The Secretary'' and inserting ``Subject to paragraph (5), 
     the Secretary''; and
       (B) by adding at the end the following new paragraph:
       ``(5) Requirement of certain nonemployer medicare advantage 
     private fee-for-service plans to use contracts with 
     providers.--
       ``(A) In general.--For plan year 2011 and subsequent plan 
     years, in the case of a Medicare Advantage private fee-for-
     service plan not described in paragraph (1) or (2) of section 
     1857(i) operating in a network area (as defined in 
     subparagraph (B)), the plan shall meet the access standards 
     under paragraph (4) in that area only through entering into 
     written contracts as provided for under subparagraph (B) of 
     such paragraph and not, in whole or in part, through the 
     establishment of payment rates meeting the requirements under 
     subparagraph (A) of such paragraph.
       ``(B) Network area defined.--For purposes of subparagraph 
     (A), the term `network area' means, for a plan year, an area 
     which the Secretary identifies (in the Secretary's 
     announcement of the proposed payment rates for the previous 
     plan year under section 1853(b)(1)(B)) as having at least 2 
     network-based plans (as defined in subparagraph (C)) with 
     enrollment under this part as of the first day of the year in 
     which such announcement is made.
       ``(C) Network-based plan defined.--
       ``(i) In general.--For purposes of subparagraph (B), the 
     term `network-based plan' means--

       ``(I) except as provided in clause (ii), a Medicare 
     Advantage plan that is a coordinated care plan described in 
     section 1851(a)(2)(A)(i);
       ``(II) a network-based MSA plan; and
       ``(III) a reasonable cost reimbursement plan under section 
     1876.

       ``(ii) Exclusion of non-network regional ppos.--The term 
     `network-based plan' shall not include an MA regional plan 
     that, with respect to the area, meets access adequacy 
     standards under this part substantially through the authority 
     of section 422.112(a)(1)(ii) of title 42, Code of Federal 
     Regulations, rather than through written contracts.''.
       (2) Employer plans.--Section 1852(d) of the Social Security 
     Act (42 U.S.C. 1395w-22(d)), as amended by paragraph (1), is 
     amended--
       (A) in paragraph (4), in the second sentence, by striking 
     ``paragraph (5)'' and inserting ``paragraphs (5) and (6)''; 
     and
       (B) by adding at the end the following new paragraph:
       ``(6) Requirement of all employer medicare advantage 
     private fee-for-service plans to use contracts with 
     providers.--For plan year 2011 and subsequent plan years, in 
     the case of a Medicare Advantage private fee-for-service plan 
     that is described in paragraph (1) or (2) of section 1857(i), 
     the plan shall meet the access standards under paragraph (4) 
     only through entering into written contracts as provided for 
     under subparagraph (B) of such paragraph and not, in whole or 
     in part, through the establishment of payment rates meeting 
     the requirements under subparagraph (A) of such paragraph.''.
       (3) Access requirements.--
       (A) In general.--Section 1852(d)(4)(B) of the Social 
     Security Act (42 U.S.C. 1395w-22(d)(4)(B)) is amended by 
     striking ``a sufficient number'' through ``terms of the 
     plan'' and inserting ``a sufficient number and range of 
     providers within such category to meet the access standards 
     in subparagraphs (A) through (E) of paragraph (1)''.
       (B) Effective date.--The amendment made by subparagraph (A) 
     shall apply to plan year 2010 and subsequent plan years.
       (b) Clarification Regarding Utilization.--Section 
     1859(b)(2) of the Social Security Act (42 U.S.C. 1395w-
     28(b)(2)) is amended by adding at the end the following flush 
     sentence:
     ``Nothing in subparagraph (B) shall be construed to preclude 
     a plan from varying rates for such a provider based on the 
     specialty of the provider, the location of the provider, or 
     other factors related to such provider that are not related 
     to utilization, or to preclude a plan from increasing rates 
     for such a provider based on increased utilization of 
     specified preventive or screening services.''.

     SEC. 163. REVISIONS TO QUALITY IMPROVEMENT PROGRAMS.

       (a) Requirement for MA Private Fee-for-Service and MSA 
     Plans To Have a Quality Improvement Program.--Section 
     1852(e)(1) of the Social Security Act (42 U.S.C. 1395w-
     22(e)(1)) is amended by striking ``(other than an MA private 
     fee-for-service plan or an MSA plan)''.
       (b) Data Collection Requirements for MA Regional Plans, MA 
     Private Fee-for-Service Plans, and MSA Plans.--Section 
     1852(e)(3)(A) of the Social Security Act (42 U.S.C. 1395w-
     22(e)(3)(A)) is amended--
       (1) in clause (i), by adding at the end the following new 
     sentence: ``With respect to MA private fee-for-service plans 
     and MSA plans, the requirements under the preceding sentence 
     may not exceed the requirements under this subparagraph with 
     respect to MA local plans that are preferred provider 
     organization plans, except that, for plan year 2010, the 
     limitation under clause (iii) shall not apply and such 
     requirements shall apply only with respect to administrative 
     claims data.''

[[Page 13447]]

       (2) by striking clause (ii); and
       (3) in clause (iii)--
       (A) in the heading--
       (i) by inserting ``local'' after ``to''; and
       (ii) by inserting ``and ma regional plans'' after 
     ``organizations''; and
       (B) by inserting ``and to MA regional plans'' after 
     ``organization plans''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to plan years beginning on or after January 1, 
     2010.

     SEC. 164. REVISIONS RELATING TO SPECIALIZED MEDICARE 
                   ADVANTAGE PLANS FOR SPECIAL NEEDS INDIVIDUALS.

       (a) Extension of Authority To Restrict Enrollment.--Section 
     1859(f) of the Social Security Act (42 U.S.C. 1395w-28(f)), 
     as amended by section 108(a) of the Medicare, Medicaid, and 
     SCHIP Extension Act of 2007 (Public Law 110-173) is amended 
     by striking ``2010'' and inserting ``2011''.
       (b) Moratorium on Authority To Designate Other Plans as 
     Specialized MA Plans.--During the period beginning on January 
     1, 2010, and ending on December 31, 2010, the Secretary of 
     Health and Human Services may not exercise the authority 
     provided under section 231(d) of the Medicare Prescription 
     Drug, Improvement, and Modernization Act of 2003 (42 U.S.C. 
     1395w-21 note) to designate other plans as specialized MA 
     plans for special needs individuals.
       (c) Requirements for Enrollment.--
       (1) In general.--Section 1859 of the Social Security Act 
     (42 U.S.C. 1395w-28) is amended--
       (A) in subsection (b)(6)(A), by inserting ``and that, as of 
     January 1, 2010, meets the applicable requirements of 
     paragraph (2), (3), or (4) of subsection (f), as the case may 
     be'' before the period at the end; and
       (B) in subsection (f)--
       (i) by amending the heading to read as follows: 
     ``Requirements Regarding Enrollment in Specialized MA Plans 
     for Special Needs Individuals'';
       (ii) by designating the sentence beginning ``In the case 
     of'' as paragraph (1) with the heading ``Requirements for 
     enrollment.--'' and with appropriate indentation; and
       (iii) by adding at the end the following new paragraphs:
       ``(2) Additional requirements for institutional snps.--In 
     the case of a specialized MA plan for special needs 
     individuals described in subsection (b)(6)(B)(i), the 
     applicable requirements described in this paragraph are as 
     follows:
       ``(A) Each individual that enrolls in the plan on or after 
     January 1, 2010, is a special needs individuals described in 
     subsection (b)(6)(B)(i). In the case of an individual who is 
     living in the community but requires an institutional level 
     of care, such individual shall not be considered a special 
     needs individual described in subsection (b)(6)(B)(i) unless 
     the determination that the individual requires an 
     institutional level of care was made--
       ``(i) using a State assessment tool of the State in which 
     the individual resides; and
       ``(ii) by an entity other than the organization offering 
     the plan.
       ``(B) The plan meets the requirements described in 
     paragraph (5).
       ``(3) Additional requirements for dual snps.--In the case 
     of a specialized MA plan for special needs individuals 
     described in subsection (b)(6)(B)(ii), the applicable 
     requirements described in this paragraph are as follows:
       ``(A) Each individual that enrolls in the plan on or after 
     January 1, 2010, is a special needs individuals described in 
     subsection (b)(6)(B)(ii).
       ``(B) The plan meets the requirements described in 
     paragraph (5).
       ``(C) The plan provides each prospective enrollee, prior to 
     enrollment, with a comprehensive written statement (using 
     standardized content and format established by the Secretary) 
     that describes--
       ``(i) the benefits and cost-sharing protections that the 
     individual is entitled to under the State Medicaid program 
     under title XIX; and
       ``(ii) which of such benefits and cost-sharing protections 
     are covered under the plan.
     Such statement shall be included with any description of 
     benefits offered by the plan.
       ``(D) The plan has a contract with the State Medicaid 
     agency to provide benefits, or arrange for benefits to be 
     provided, for which such individual is entitled to receive as 
     medical assistance under title XIX. Such benefits may include 
     long-term care services consistent with State policy.
       ``(4) Additional requirements for severe or disabling 
     chronic condition snps.--In the case of a specialized MA plan 
     for special needs individuals described in subsection 
     (b)(6)(B)(iii), the applicable requirements described in this 
     paragraph are as follows:
       ``(A) Each individual that enrolls in the plan on or after 
     January 1, 2010, is a special needs individual described in 
     subsection (b)(6)(B)(iii).
       ``(B) The plan meets the requirements described in 
     paragraph (5).''.
       (2) Authority to operate but no service area expansion for 
     dual snps that do not meet certain requirements.--
     Notwithstanding subsection (f) of section 1859 of the Social 
     Security Act (42 U.S.C. 1395w-28), during the period 
     beginning on January 1, 2010, and ending on December 31, 
     2010, in the case of a specialized Medicare Advantage plan 
     for special needs individuals described in subsection 
     (b)(6)(B)(ii) of such section, as amended by this section, 
     that does not meet the requirement described in subsection 
     (f)(3)(D) of such section, the Secretary of Health and Human 
     Services--
       (A) shall permit such plan to be offered under part C of 
     title XVIII of such Act; and
       (B) shall not permit an expansion of the service area of 
     the plan under such part C.
       (3) Resources for state medicaid agencies.--The Secretary 
     of Health and Human Services shall provide for the 
     designation of appropriate staff and resources that can 
     address State inquiries with respect to the coordination of 
     State and Federal policies for specialized MA plans for 
     special needs individuals described in section 
     1859(b)(6)(B)(ii) of the Social Security Act (42 U.S.C. 
     1395w-28(b)(6)(B)(ii)), as amended by this section.
       (4) No requirement for contract.--Nothing in the provisions 
     of, or amendments made by, this subsection shall require a 
     State to enter into a contract with a Medicare Advantage 
     organization with respect to a specialized MA plan for 
     special needs individuals described in section 
     1859(b)(6)(B)(ii) of the Social Security Act (42 U.S.C. 
     1395w-28(b)(6)(B)(ii)), as amended by this section.
       (d) Care Management Requirements for All SNPs.--
       (1) Requirements.--Section 1859(f) of the Social Security 
     Act (42 U.S.C. 1395w-28(f)), as amended by subsection (c)(1), 
     is amended by adding at the end the following new paragraph:
       ``(5) Care management requirements for all snps.--The 
     requirements described in this paragraph are that the 
     organization offering a specialized MA plan for special needs 
     individuals described in subsection (b)(6)(B)(i)--
       ``(A) have in place an evidenced-based model of care with 
     appropriate networks of providers and specialists; and
       ``(B) with respect to each individual enrolled in the 
     plan--
       ``(i) conduct an initial assessment and an annual 
     reassessment of the individual's physical, psychosocial, and 
     functional needs;
       ``(ii) develop a plan, in consultation with the individual 
     as feasible, that identifies goals and objectives, including 
     measurable outcomes as well as specific services and benefits 
     to be provided; and
       ``(iii) use an interdisciplinary team in the management of 
     care.''.
       (2) Review to ensure compliance with care management 
     requirements.--Section 1857(d) of the Social Security Act (42 
     U.S.C. 1395w-27(d)) is amended by adding at the end the 
     following new paragraph:
       ``(6) Review to ensure compliance with care management 
     requirements for specialized medicare advantage plans for 
     special needs individuals.--In conjunction with the periodic 
     audit of a specialized Medicare Advantage plan for special 
     needs individuals under paragraph (1), the Secretary shall 
     conduct a review to ensure that such organization offering 
     the plan meets the requirements described in section 
     1859(f)(5).''.
       (e) Clarification of the Definition of a Severe or 
     Disabling Chronic Conditions Specialized Needs Individual.--
       (1) In general.--Section 1859(b)(6)(B)(iii) of the Social 
     Security Act (42 U.S.C. 1395w-28(b)(6)(B)(iii)) is amended by 
     inserting ``who have one or more comorbid and medically 
     complex chronic conditions that are substantially disabling 
     or life threatening, have a high risk of hospitalization or 
     other significant adverse health outcomes, and require 
     specialized delivery systems across domains of care'' before 
     the period at the end.
       (2) Panel.--The Secretary of Health and Human Services 
     shall convene a panel of clinical advisors to determine the 
     conditions that meet the definition of severe and disabling 
     chronic conditions under section 1859(b)(6)(B)(iii) of the 
     Social Security Act (42 U.S.C. 1395w-28(b)(6)(B)(iii)), as 
     amended by paragraph (1). The panel shall include the 
     Director of the Agency for Healthcare Research and Quality 
     (or the Director's designee).
       (f) Special Requirements Regarding Quality Reporting for 
     Specialized MA Plans for Special Needs Individuals.--
       (1) In general.--Section 1852(e)(3)(A) of the Social 
     Security Act (42 U.S.C. 1395w-22(e)(3)(A)), as amended by 
     section 163, is amended by inserting after clause (i) the 
     following new clause:
       ``(ii) Special requirements for specialized ma plans for 
     special needs individuals.--In addition to the data required 
     to be collected, analyzed, and reported under clause (i) and 
     notwithstanding the limitations under subparagraph (B), as 
     part of the quality improvement program under paragraph (1), 
     each MA organization offering a specialized Medicare 
     Advantage plan for special needs individuals shall provide 
     for the collection, analysis, and reporting of data that 
     permits the measurement of health outcomes and other indices 
     of quality with respect to the requirements described in 
     paragraphs (2) through (5) of subsection (f). Such data may 
     be based on claims data and shall be at the plan level.''.
       (2) Effective date.--The amendment made by paragraph (1) 
     shall take effect on a date specified by the Secretary of 
     Health and Human Services (but in no case later than

[[Page 13448]]

     January 1, 2010), and shall apply to all specialized Medicare 
     Advantage plans for special needs individuals regardless of 
     when the plan first entered the Medicare Advantage program 
     under part C of title XVIII of the Social Security Act.
       (g) Effective Date and Application.--The amendments made by 
     subsections (c)(1), (d), and (e)(1) shall apply to plan years 
     beginning on or after January 1, 2010, and shall apply to all 
     specialized Medicare Advantage plans for special needs 
     individuals regardless of when the plan first entered the 
     Medicare Advantage program under part C of title XVIII of the 
     Social Security Act.
       (h) No Affect on Medicaid Benefits for Duals.--Nothing in 
     the provisions of, or amendments made by, this section shall 
     affect the benefits available under the Medicaid program 
     under title XIX of the Social Security Act for special needs 
     individuals described in section 1859(b)(6)(B)(ii) of such 
     Act (42 U.S.C. 1395w-28(b)(6)(B)(ii)).

     SEC. 165. LIMITATION ON OUT-OF-POCKET COSTS FOR DUAL 
                   ELIGIBLES AND QUALIFIED MEDICARE BENEFICIARIES 
                   ENROLLED IN A SPECIALIZED MEDICARE ADVANTAGE 
                   PLAN FOR SPECIAL NEEDS INDIVIDUALS.

       (a) In General.--Section 1852(a) of the Social Security Act 
     (42 U.S.C. 1395w-22(a)) is amended by adding at the end the 
     following new paragraph:
       ``(7) Limitation on cost-sharing for dual eligibles and 
     qualified medicare beneficiaries.--In the case of an 
     individual who is a full-benefit dual eligible individual (as 
     defined in section 1935(c)(6)) or a qualified medicare 
     beneficiary (as defined in section 1905(p)(1)) and who is 
     enrolled in a specialized Medicare Advantage plan for special 
     needs individuals described in section 1859(b)(6)(B)(ii), the 
     plan may not impose cost-sharing that exceeds the amount of 
     cost-sharing that would be permitted with respect to the 
     individual under title XIX if the individual were not 
     enrolled in such plan.''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall apply to plan years beginning on or after January 1, 
     2010.

     SEC. 166. ADJUSTMENT TO THE MEDICARE ADVANTAGE STABILIZATION 
                   FUND.

       Section 1858(e)(2)(A)(i) of the Social Security Act (42 
     U.S.C. 1395w-27a(e)(2)(A)(i)), as amended by section 110 of 
     the Medicare, Medicaid, and SCHIP Extension Act of 2007 
     (Public Law 110-173), is amended--
       (1) by striking ``2013'' and inserting ``2014''; and
       (2) by striking ``$1,790,000,000'' and inserting ``$1''.

     SEC. 167. ACCESS TO MEDICARE REASONABLE COST CONTRACT PLANS.

       (a) Extension of Reasonable Cost Contracts.--Section 
     1876(h)(5)(C)(ii) of the Social Security Act (42 U.S.C. 
     1395mm(h)(5)(C)(ii)), as amended by section 109 of the 
     Medicare, Medicaid, and SCHIP Extension Act of 2007 (Public 
     Law 110-173), is amended by striking ``January 1, 2009'' and 
     inserting ``January 1, 2010'' in the matter preceding 
     subclause (I).
       (b) Requirement for at Least Two Medicare Advantage 
     Organizations To Be Offering a Plan in an Area for the 
     Prohibition To Be Applicable.--Subclauses (I) and (II) of 
     section 1876(h)(5)(C)(ii) of the Social Security Act (42 
     U.S.C. 1395mm(h)(5)(C)(ii)) are each amended by inserting ``, 
     provided that all such plans are not offered by the same 
     Medicare Advantage organization'' after ``clause (iii)''.
       (c) Revision of Requirements for a Plan That Are Used To 
     Determine if Prohibition Is Applicable.--
       (1) In general.--Section 1876(h)(5)(C)(iii)(I) of the 
     Social Security Act (42 U.S.C. 1395mm(h)(5)(C)(iii)(I)) is 
     amended by inserting ``that are not in another Metropolitan 
     Statistical Area with a population of more than 250,000'' 
     after ``such Metropolitan Statistical Area''.
       (2) Clarification.--Section 1876(h)(5)(C)(iii)(I) of the 
     Social Security Act (42 U.S.C. 1395mm(h)(5)(C)(iii)(I)) is 
     amended by adding at the end the following new sentence: ``If 
     the service area includes a portion in more than 1 
     Metropolitan Statistical Area with a population of more than 
     250,000, the minimum enrollment determination under the 
     preceding sentence shall be made with respect to each such 
     Metropolitan Statistical Area (and such applicable contiguous 
     counties to such Metropolitan Statistical Area).''.
       (d) GAO Study and Report.--
       (1) Study.--The Comptroller General of the United States 
     shall conduct a study of the reasons (if any) why reasonable 
     cost contracts under section 1876(h) of the Social Security 
     Act (42 U.S.C. 1395mm(h)) are unable to become Medicare 
     Advantage plans under part C of title XVIII of such Act.
       (2) Report.--Not later than December 31, 2009, the 
     Comptroller General of the United States shall submit to 
     Congress a report containing the results of the study 
     conducted under paragraph (1), together with recommendations 
     for such legislation and administrative action as the 
     Comptroller General determines appropriate.

     SEC. 168. MEDPAC STUDY AND REPORT ON QUALITY MEASURES.

       (a) Study.--The Medicare Payment Advisory Commission shall 
     conduct a study on how comparable measures of performance and 
     patient experience can be collected and reported by 2011 for 
     the Medicare Advantage program under part C of title XVIII of 
     the Social Security Act and the original Medicare fee-for-
     service program under parts A and B of such title. Such study 
     shall address technical issues, such as data requirements, in 
     addition to issues relating to appropriate quality benchmarks 
     that--
       (1) compare the quality of care Medicare beneficiaries 
     receive across Medicare Advantage plans; and
       (2) compare the quality of care Medicare beneficiaries 
     receive under Medicare Advantage plans and under the original 
     Medicare fee-for-service program.
       (b) Report.--Not later than March 31, 2010, the Medicare 
     Payment Advisory Commission shall submit to Congress a report 
     containing the results of the study conducted under 
     subsection (a), together with recommendations for such 
     legislation and administrative action as the Medicare Payment 
     Advisory Commission determines appropriate.

     SEC. 169. MEDPAC STUDY AND REPORT ON MEDICARE ADVANTAGE 
                   PAYMENTS.

       (a) Study.--The Medicare Payment Advisory Commission (in 
     this section referred to as the ``Commission'') shall conduct 
     a study of the following:
       (1) The correlation between--
       (A) the costs that Medicare Advantage organizations with 
     respect to Medicare Advantage plans incur in providing 
     coverage under the plan for items and services covered under 
     the original Medicare fee-for-service program under parts A 
     and B of title XVIII of the Social Security Act, as reflected 
     in plan bids; and
       (B) county-level spending under such original Medicare fee-
     for-service program on a per capita basis, as calculated by 
     the Chief Actuary of the Centers for Medicare & Medicaid 
     Services.
     The study with respect to the issue described in the 
     preceding sentence shall include differences in correlation 
     statistics by plan type and geographic area.
       (2) Based on these results of the study with respect to the 
     issue described in paragraph (1), and other data the 
     Commission determines appropriate--
       (A) alternate approaches to payment with respect to a 
     Medicare beneficiary enrolled in a Medicare Advantage plan 
     other than through county-level payment area equivalents.
       (B) the accuracy and completeness of county-level estimates 
     of per capita spending under such original Medicare fee-for-
     service program (including counties in Puerto Rico), as used 
     to determine the annual Medicare Advantage capitation rate 
     under section 1853 of the Social Security Act (42 U.S.C. 
     1395w-23), and whether such estimates include--
       (i) expenditures with respect to Medicare beneficiaries at 
     facilities of the Department of Veterans Affairs; and
       (ii) all appropriate administrative expenses, including 
     claims processing.
       (3) Ways to improve the accuracy and completeness of 
     county-level estimates of per capita spending described in 
     paragraph (2)(B).
       (b) Report.--Not later than March 31, 2010, the Commission 
     shall submit to Congress a report containing the results of 
     the study conducted under subsection (a), together with 
     recommendations for such legislation and administrative 
     action as the Commission determines appropriate.

               Subtitle E--Provisions Relating to Part D

                   PART I--IMPROVING PHARMACY ACCESS

     SEC. 171. PROMPT PAYMENT BY PRESCRIPTION DRUG PLANS AND MA-PD 
                   PLANS UNDER PART D.

       (a) Prompt Payment by Prescription Drug Plans.--Section 
     1860D-12(b) of the Social Security Act (42 U.S.C. 1395w-
     112(b)) is amended by adding at the end the following new 
     paragraph:
       ``(4) Prompt payment of clean claims.--
       ``(A) Prompt payment.--
       ``(i) In general.--Each contract entered into with a PDP 
     sponsor under this part with respect to a prescription drug 
     plan offered by such sponsor shall provide that payment shall 
     be issued, mailed, or otherwise transmitted with respect to 
     all clean claims submitted by pharmacies (other than 
     pharmacies that dispense drugs by mail order only or are 
     located in, or contract with, a long-term care facility) 
     under this part within the applicable number of calendar days 
     after the date on which the claim is received.
       ``(ii) Clean claim defined.--In this paragraph, the term 
     `clean claim' means a claim that has no defect or impropriety 
     (including any lack of any required substantiating 
     documentation) or particular circumstance requiring special 
     treatment that prevents timely payment from being made on the 
     claim under this part.
       ``(iii) Date of receipt of claim.--In this paragraph, a 
     claim is considered to have been received--

       ``(I) with respect to claims submitted electronically, on 
     the date on which the claim is transferred; and
       ``(II) with respect to claims submitted otherwise, on the 
     5th day after the postmark date of the claim or the date 
     specified in the time stamp of the transmission.

       ``(B) Applicable number of calendar days defined.--In this 
     paragraph, the term `applicable number of calendar days' 
     means--

[[Page 13449]]

       ``(i) with respect to claims submitted electronically, 14 
     days; and
       ``(ii) with respect to claims submitted otherwise, 30 days.
       ``(C) Interest payment.--
       ``(i) In general.--Subject to clause (ii), if payment is 
     not issued, mailed, or otherwise transmitted within the 
     applicable number of calendar days (as defined in 
     subparagraph (B)) after a clean claim is received, the PDP 
     sponsor shall pay interest to the pharmacy that submitted the 
     claim at a rate equal to the weighted average of interest on 
     3-month marketable Treasury securities determined for such 
     period, increased by 0.1 percentage point for the period 
     beginning on the day after the required payment date and 
     ending on the date on which payment is made (as determined 
     under subparagraph (D)(iv)). Interest amounts paid under this 
     subparagraph shall not be counted against the administrative 
     costs of a prescription drug plan or treated as allowable 
     risk corridor costs under section 1860D-15(e).
       ``(ii) Authority not to charge interest.--The Secretary may 
     provide that a PDP sponsor is not charged interest under 
     clause (i) in the case where there are exigent circumstances, 
     including natural disasters and other unique and unexpected 
     events, that prevent the timely processing of claims.
       ``(D) Procedures involving claims.--
       ``(i) Claim deemed to be clean.--A claim is deemed to be a 
     clean claim if the PDP sponsor involved does not provide 
     notice to the claimant of any deficiency in the claim--

       ``(I) with respect to claims submitted electronically, 
     within 10 days after the date on which the claim is received; 
     and
       ``(II) with respect to claims submitted otherwise, within 
     15 days after the date on which the claim is received.

       ``(ii) Claim determined to not be a clean claim.--

       ``(I) In general.--If a PDP sponsor determines that a 
     submitted claim is not a clean claim, the PDP sponsor shall, 
     not later than the end of the period described in clause (i), 
     notify the claimant of such determination. Such notification 
     shall specify all defects or improprieties in the claim and 
     shall list all additional information or documents necessary 
     for the proper processing and payment of the claim.
       ``(II) Determination after submission of additional 
     information.--A claim is deemed to be a clean claim under 
     this paragraph if the PDP sponsor involved does not provide 
     notice to the claimant of any defect or impropriety in the 
     claim within 10 days of the date on which additional 
     information is received under subclause (I).

       ``(iii) Obligation to pay.--A claim submitted to a PDP 
     sponsor that is not paid or contested by the sponsor within 
     the applicable number of days (as defined in subparagraph 
     (B)) after the date on which the claim is received shall be 
     deemed to be a clean claim and shall be paid by the PDP 
     sponsor in accordance with subparagraph (A).
       ``(iv) Date of payment of claim.--Payment of a clean claim 
     under such subparagraph is considered to have been made on 
     the date on which--

       ``(I) with respect to claims paid electronically, the 
     payment is transferred; and
       ``(II) with respect to claims paid otherwise, the payment 
     is submitted to the United States Postal Service or common 
     carrier for delivery.

       ``(E) Electronic transfer of funds.--A PDP sponsor shall 
     pay all clean claims submitted electronically by electronic 
     transfer of funds if the pharmacy so requests or has so 
     requested previously. In the case where such payment is made 
     electronically, remittance may be made by the PDP sponsor 
     electronically as well.
       ``(F) Protecting the rights of claimants.--
       ``(i) In general.--Nothing in this paragraph shall be 
     construed to prohibit or limit a claim or action not covered 
     by the subject matter of this section that any individual or 
     organization has against a provider or a PDP sponsor.
       ``(ii) Anti-retaliation.--Consistent with applicable 
     Federal or State law, a PDP sponsor shall not retaliate 
     against an individual or provider for exercising a right of 
     action under this subparagraph.
       ``(G) Rule of construction.--A determination under this 
     paragraph that a claim submitted by a pharmacy is a clean 
     claim shall not be construed as a positive determination 
     regarding eligibility for payment under this title, nor is it 
     an indication of government approval of, or acquiescence 
     regarding, the claim submitted. The determination shall not 
     relieve any party of civil or criminal liability with respect 
     to the claim, nor does it offer a defense to any 
     administrative, civil, or criminal action with respect to the 
     claim.''.
       (b) Prompt Payment by MA-PD Plans.--Section 1857(f) of the 
     Social Security Act (42 U.S.C. 1395w-27) is amended by adding 
     at the end the following new paragraph:
       ``(3) Incorporation of certain prescription drug plan 
     contract requirements.--The following provisions shall apply 
     to contracts with a Medicare Advantage organization offering 
     an MA-PD plan in the same manner as they apply to contracts 
     with a PDP sponsor offering a prescription drug plan under 
     part D:
       ``(A) Prompt payment.--Section 1860D-12(b)(4).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to plan years beginning on or after January 1, 
     2010.

     SEC. 172. SUBMISSION OF CLAIMS BY PHARMACIES LOCATED IN OR 
                   CONTRACTING WITH LONG-TERM CARE FACILITIES.

       (a) Submission of Claims by Pharmacies Located in or 
     Contracting With Long-Term Care Facilities.--
       (1) Submission of claims to prescription drug plans.--
     Section 1860D-12(b) of the Social Security Act (42 U.S.C. 
     1395w-112(b)), as amended by section 171(a), is amended by 
     adding at the end the following new paragraph:
       ``(5) Submission of claims by pharmacies located in or 
     contracting with long-term care facilities.--Each contract 
     entered into with a PDP sponsor under this part with respect 
     to a prescription drug plan offered by such sponsor shall 
     provide that a pharmacy located in, or having a contract 
     with, a long-term care facility shall have not less than 30 
     days (but not more than 90 days) to submit claims to the 
     sponsor for reimbursement under the plan.''.
       (2) Submission of claims to ma-pd plans.--Section 
     1857(f)(3) of the Social Security Act, as added by section 
     171(b), is amended by adding at the end the following new 
     subparagraph:
       ``(B) Submission of claims by pharmacies located in or 
     contracting with long-term care facilities.--Section 1860D-
     12(b)(5).''.
       (b) Effective Date.--The amendments made by this section 
     shall apply to plan years beginning on or after January 1, 
     2010.

     SEC. 173. REGULAR UPDATE OF PRESCRIPTION DRUG PRICING 
                   STANDARD.

       (a) Requirement for Prescription Drug Plans.--Section 
     1860D-12(b) of the Social Security Act (42 U.S.C. 1395w-
     112(b)), as amended by section 172(a)(1), is amended by 
     adding at the end the following new paragraph:
       ``(6) Regular update of prescription drug pricing 
     standard.--If the PDP sponsor of a prescription drug plan 
     uses a standard for reimbursement of pharmacies based on the 
     cost of a drug, each contract entered into with such sponsor 
     under this part with respect to the plan shall provide that 
     the sponsor shall update such standard not less frequently 
     than once every 7 days, beginning with an initial update on 
     January 1 of each year, to accurately reflect the market 
     price of acquiring the drug.''.
       (b) Requirement for MA-PD Plans.--Section 1857(f)(3) of the 
     Social Security Act, as amended by section 172(a)(2), is 
     amended by adding at the end the following new subparagraph:
       ``(C) Regular update of prescription drug pricing 
     standard.--Section 1860D-12(b)(6).''.
       (c) Effective Date.--The amendments made by this section 
     shall apply to plan years beginning on or after January 1, 
     2009.

                       PART II--OTHER PROVISIONS

     SEC. 175. INCLUSION OF BARBITURATES AND BENZODIAZEPINES AS 
                   COVERED PART D DRUGS.

       (a) In General.--Section 1860D-2(e)(2)(A) of the Social 
     Security Act (42 U.S.C. 1395w-102(e)(2)(A)) is amended by 
     inserting after ``agents),'' the following ``other than 
     subparagraph (I) of such section (relating to barbiturates) 
     if the barbiturate is used in the treatment of epilepsy, 
     cancer, or a chronic mental health disorder, and other than 
     subparagraph (J) of such section (relating to 
     benzodiazepines),''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall apply to prescriptions dispensed on or after January 1, 
     2013.

     SEC. 176. FORMULARY REQUIREMENTS WITH RESPECT TO CERTAIN 
                   CATEGORIES OR CLASSES OF DRUGS.

       Section 1860D-4(b)(3) of the Social Security Act (42 U.S.C. 
     1395w-104(b)(3)) is amended--
       (1) in subparagraph (C)(i), by striking ``The formulary'' 
     and inserting ``Subject to subparagraph (G), the formulary''; 
     and
       (2) by inserting after subparagraph (F) the following new 
     subparagraph:
       ``(G) Required inclusion of drugs in certain categories and 
     classes.--
       ``(i) Identification of drugs in certain categories and 
     classes.--Beginning with plan year 2010, the Secretary shall 
     identify, as appropriate, categories and classes of drugs for 
     which both of the following criteria are met:

       ``(I) Restricted access to drugs in the category or class 
     would have major or life threatening clinical consequences 
     for individuals who have a disease or disorder treated by the 
     drugs in such category or class.
       ``(II) There is significant clinical need for such 
     individuals to have access to multiple drugs within a 
     category or class due to unique chemical actions and 
     pharmacological effects of the drugs within the category or 
     class, such as drugs used in the treatment of cancer.

       ``(ii) Formulary requirements.--Subject to clause (iii), 
     PDP sponsors offering prescription drug plans shall be 
     required to include all covered part D drugs in the 
     categories and classes identified by the Secretary under 
     clause (i).

[[Page 13450]]

       ``(iii) Exceptions.--The Secretary may establish exceptions 
     that permits a PDP sponsor of a prescription drug plan to 
     exclude from its formulary a particular covered part D drug 
     in a category or class that is otherwise required to be 
     included in the formulary under clause (ii) (or to otherwise 
     limit access to such a drug, including through prior 
     authorization or utilization management). Any exceptions 
     established under the preceding sentence shall be provided 
     under a process that--

       ``(I) ensures that any exception to such requirement is 
     based upon scientific evidence and medical standards of 
     practice (and, in the case of antiretroviral medications, is 
     consistent with the Department of Health and Human Services 
     Guidelines for the Use of Antiretroviral Agents in HIV-1-
     Infected Adults and Adolescents); and
       ``(II) includes a public notice and comment period.''.

                      Subtitle F--Other Provisions

     SEC. 181. USE OF PART D DATA.

       Section 1860D-12(b)(3)(D) of the Social Security Act (42 
     U.S.C. 1395w-112(b)(3)(D)) is amended by adding at the end 
     the following sentence: ``Notwithstanding any other provision 
     of law, information provided to the Secretary under the 
     application of section 1857(e)(1) to contracts under this 
     section under the preceding sentence--
       ``(i) may be used for the purposes of carrying out this 
     part, improving public health through research on the 
     utilization, safety, effectiveness, quality, and efficiency 
     of health care services (as the Secretary determines 
     appropriate); and
       ``(ii) shall be made available to Congressional support 
     agencies (in accordance with their obligations to support 
     Congress as set out in their authorizing statutes) for the 
     purposes of conducting Congressional oversight, monitoring, 
     making recommendations, and analysis of the program under 
     this title.''.

     SEC. 182. REVISION OF DEFINITION OF MEDICALLY ACCEPTED 
                   INDICATION FOR DRUGS.

       (a) Revision of Definition for Part D Drugs.--
       (1) In general.--Section 1860D-2(e)(1) of the Social 
     Security Act (42 U.S.C. 1395w-102(e)(1)) is amended, in the 
     matter following subparagraph (B)--
       (A) by striking ``(as defined in section 1927(k)(6))'' and 
     inserting ``(as defined in paragraph (4))''; and
       (B) by adding at the end the following new paragraph:
       ``(4) Medically accepted indication defined.--
       ``(A) In general.--For purposes of paragraph (1), the term 
     `medically accepted indication' has the meaning given that 
     term--
       ``(i) in the case of a covered part D drug used in an 
     anticancer chemotherapeutic regimen, in section 
     1861(t)(2)(B), except that in applying such section--

       ``(I) `prescription drug plan or MA-PD plan' shall be 
     substituted for `carrier' each place it appears; and
       ``(II) subject to subparagraph (B), the compendia described 
     in section 1927(g)(1)(B)(i)(III) shall be included in the 
     list of compendia described in clause (ii)(I) section 
     1861(t)(2)(B); and

       ``(ii) in the case of any other covered part D drug, in 
     section 1927(k)(6).
       ``(B) Conflict of interest.--On and after January 1, 2010, 
     subparagraph (A)(i)(II) shall not apply unless the compendia 
     described in section 1927(g)(1)(B)(i)(III) meets the 
     requirement in the third sentence of section 1861(t)(2)(B).
       ``(C) Update.--For purposes of applying subparagraph 
     (A)(ii), the Secretary shall revise the list of compendia 
     described in section 1927(g)(1)(B)(i) as is appropriate for 
     identifying medically accepted indications for drugs. Any 
     such revision shall be done in a manner consistent with the 
     process for revising compendia under section 
     1861(t)(2)(B).''.
       (2) Effective date.--The amendments made by this subsection 
     shall apply to plan years beginning on or after January 1, 
     2009.
       (b) Conflicts of Interest.--Section 1861(t)(2)(B) of the 
     Social Security Act (42 U.S.C. 1395x(t)(2)(B)) is amended by 
     adding at the end the following new sentence: ``On and after 
     January 1, 2010, no compendia may be included on the list of 
     compendia under this subparagraph unless the compendia has a 
     publicly transparent process for evaluating therapies and for 
     identifying potential conflicts of interests.''.

     SEC. 183. CONTRACT WITH A CONSENSUS-BASED ENTITY REGARDING 
                   PERFORMANCE MEASUREMENT.

       (a) Contract.--
       (1) In general.--Part E of title XVIII of the Social 
     Security Act (42 U.S.C. 1395x et seq.) is amended by 
     inserting after section 1889 the following new section:


    ``contract with a consensus-based entity regarding performance 
                              measurement

       ``Sec. 1890.  (a) Contract.--
       ``(1) In general.--For purposes of activities conducted 
     under this Act, the Secretary shall identify and have in 
     effect a contract with a consensus-based entity, such as the 
     National Quality Forum, that meets the requirements described 
     in subsection (c). Such contract shall provide that the 
     entity will perform the duties described in subsection (b).
       ``(2) Timing for first contract.--As soon as practicable 
     after the date of the enactment of this subsection, the 
     Secretary shall enter into the first contract under paragraph 
     (1).
       ``(3) Period of contract.--A contract under paragraph (1) 
     shall be for a period of 4 years (except as may be renewed 
     after a subsequent bidding process).
       ``(4) Competitive procedures.--Competitive procedures (as 
     defined in section 4(5) of the Office of Federal Procurement 
     Policy Act (41 U.S.C. 403(5))) shall be used to enter into a 
     contract under paragraph (1).
       ``(b) Duties.--The duties described in this subsection are 
     the following:
       ``(1) Priority setting process.--The entity shall 
     synthesize evidence and convene key stakeholders to make 
     recommendations, with respect to activities conducted under 
     this Act, on an integrated national strategy and priorities 
     for health care performance measurement in all applicable 
     settings. In making such recommendations, the entity shall--
       ``(A) ensure that priority is given to measures--
       ``(i) that address the health care provided to patients 
     with prevalent, high-cost chronic diseases;
       ``(ii) with the greatest potential for improving the 
     quality, efficiency, and patient-centeredness of health care; 
     and
       ``(iii) that may be implemented rapidly due to existing 
     evidence, standards of care, or other reasons; and
       ``(B) take into account measures that--
       ``(i) may assist consumers and patients in making informed 
     health care decisions;
       ``(ii) address health disparities across groups and areas; 
     and
       ``(iii) address the continuum of care a patient receives, 
     including services furnished by multiple health care 
     providers or practitioners and across multiple settings.
       ``(2) Endorsement of measures.--The entity shall provide 
     for the endorsement of standardized health care performance 
     measures. The endorsement process under the preceding 
     sentence shall consider whether a measure--
       ``(A) is evidence-based, reliable, valid, verifiable, 
     relevant to enhanced health outcomes, actionable at the 
     caregiver level, feasible to collect and report, and 
     responsive to variations in patient characteristics, such as 
     health status, language capabilities, race or ethnicity, and 
     income level; and
       ``(B) is consistent across types of health care providers, 
     including hospitals and physicians.
       ``(3) Maintenance of measures.--The entity shall establish 
     and implement a process to ensure that measures endorsed 
     under paragraph (2) are updated (or retired if obsolete) as 
     new evidence is developed.
       ``(4) Promotion of the development of electronic health 
     records.--The entity shall promote the development and use of 
     electronic health records that contain the functionality for 
     automated collection, aggregation, and transmission of 
     performance measurement information.
       ``(5) Annual report to congress and the secretary; 
     secretarial publication and comment.--
       ``(A) Annual report.--By not later than March 1 of each 
     year (beginning with 2009), the entity shall submit to 
     Congress and the Secretary a report containing a description 
     of--
       ``(i) the implementation of quality measurement initiatives 
     under this Act and the coordination of such initiatives with 
     quality initiatives implemented by other payers;
       ``(ii) the recommendations made under paragraph (1); and
       ``(iii) the performance by the entity of the duties 
     required under the contract entered into with the Secretary 
     under subsection (a).
       ``(B) Secretarial review and publication of annual 
     report.--Not later than 6 months after receiving a report 
     under subparagraph (A) for a year, the Secretary shall--
       ``(i) review such report; and
       ``(ii) publish such report in the Federal Register, 
     together with any comments of the Secretary on such report.
       ``(c) Requirements Described.--The requirements described 
     in this subsection are the following:
       ``(1) Private nonprofit.--The entity is a private nonprofit 
     entity governed by a board.
       ``(2) Board membership.--The members of the board of the 
     entity include--
       ``(A) representatives of health plans and health care 
     providers and practitioners or representatives of groups 
     representing such health plans and health care providers and 
     practitioners;
       ``(B) health care consumers or representatives of groups 
     representing health care consumers; and
       ``(C) representatives of purchasers and employers or 
     representatives of groups representing purchasers or 
     employers.
       ``(3) Entity membership.--The membership of the entity 
     includes persons who have experience with--
       ``(A) urban health care issues;
       ``(B) safety net health care issues;
       ``(C) rural and frontier health care issues; and
       ``(D) health care quality and safety issues.
       ``(4) Open and transparent.--With respect to matters 
     related to the contract with the

[[Page 13451]]

     Secretary under subsection (a), the entity conducts its 
     business in an open and transparent manner and provides the 
     opportunity for public comment on its activities.
       ``(5) Voluntary consensus standards setting organization.--
     The entity operates as a voluntary consensus standards 
     setting organization as defined for purposes of section 12(d) 
     of the National Technology Transfer and Advancement Act of 
     1995 (Public Law 104-113) and Office of Management and Budget 
     Revised Circular A-119 (published in the Federal Register on 
     February 10, 1998).
       ``(6) Experience.--The entity has at least 4 years of 
     experience in establishing national consensus standards.
       ``(7) Membership fees.--If the entity requires a membership 
     fee for participation in the functions of the entity, such 
     fees shall be reasonable and adjusted based on the capacity 
     of the potential member to pay the fee. In no case shall 
     membership fees pose a barrier to the participation of 
     individuals or groups with low or nominal resources to 
     participate in the functions of the entity.
       ``(d) Funding.--For purposes of carrying out this section, 
     the Secretary shall provide for the transfer, from the 
     Federal Hospital Insurance Trust Fund under section 1817 and 
     the Federal Supplementary Medical Insurance Trust Fund under 
     section 1841 (in such proportion as the Secretary determines 
     appropriate), of $10,000,000 to the Centers for Medicare & 
     Medicaid Services Program Management Account for each of 
     fiscal years 2009 through 2012.''.
       (2) Sense of the senate.--It is the Sense of the Senate 
     that the selection by the Secretary of Health and Human 
     Services of an entity to contract with under section 1890(a) 
     of the Social Security Act, as added by paragraph (1), should 
     not be construed as diminishing the significant contributions 
     of the Boards of Medicine, the quality alliances, and other 
     clinical and technical experts to efforts to measure and 
     improve the quality of health care services.
       (b) GAO Study and Reports on the Performance and Costs of 
     the Consensus-Based Entity Under the Contract.--
       (1) In general.--The Comptroller General of the United 
     States shall conduct a study on--
       (A) the performance of the entity with a contract with the 
     Secretary of Health and Human Services under section 1890(a) 
     of the Social Security Act, as added by subsection (a), of 
     its duties under such contract; and
       (B) the costs incurred by such entity in performing such 
     duties.
       (2) Reports.--Not later than 18 months and 36 months after 
     the effective date of the first contract entered into under 
     such section 1890(a), the Comptroller General of the United 
     States shall submit to Congress a report containing the 
     results of the study conducted under paragraph (1), together 
     with recommendations for such legislation and administrative 
     action as the Comptroller General determines appropriate.

     SEC. 184. COST-SHARING FOR CLINICAL TRIALS.

       Section 1833 of the Social Security Act (42 U.S.C. 1395l), 
     as amended by section 151(a), is amended by adding at the end 
     the following new subsection:
       ``(w) Methods of Payment.--The Secretary may develop 
     alternative methods of payment for items and services 
     provided under clinical trials and comparative effectiveness 
     studies sponsored or supported by an agency of the Department 
     of Health and Human Services, as determined by the Secretary, 
     to those that would otherwise apply under this section, to 
     the extent such alternative methods are necessary to preserve 
     the scientific validity of such trials or studies, such as in 
     the case where masking the identity of interventions from 
     patients and investigators is necessary to comply with the 
     particular trial or study design.''.

     SEC. 185. ADDRESSING HEALTH CARE DISPARITIES.

       Title XVIII of the Social Security Act (42 U.S.C. 1395 et 
     seq.) is amended by inserting after section 1808 the 
     following new section:


                  ``addressing health care disparities

       ``Sec. 1809.  (a) Evaluating Data Collection Approaches.--
     The Secretary shall evaluate approaches for the collection of 
     data under this title, to be performed in conjunction with 
     existing quality reporting requirements and programs under 
     this title, that allow for the ongoing, accurate, and timely 
     collection and evaluation of data on disparities in health 
     care services and performance on the basis of race, 
     ethnicity, and gender. In conducting such evaluation, the 
     Secretary shall consider the following objectives:
       ``(1) Protecting patient privacy.
       ``(2) Minimizing the administrative burdens of data 
     collection and reporting on providers and health plans 
     participating under this title.
       ``(3) Improving Medicare program data on race, ethnicity, 
     and gender.
       ``(b) Reports to Congress.--
       ``(1) Report on evaluation.--Not later than 18 months after 
     the date of the enactment of this section, the Secretary 
     shall submit to Congress a report on the evaluation conducted 
     under subsection (a). Such report shall, taking into 
     consideration the results of such evaluation--
       ``(A) identify approaches (including defining 
     methodologies) for identifying and collecting and evaluating 
     data on health care disparities on the basis of race, 
     ethnicity, and gender for the original Medicare fee-for-
     service program under parts A and B, the Medicare Advantage 
     program under part C, and the Medicare prescription drug 
     program under part D; and
       ``(B) include recommendations on the most effective 
     strategies and approaches to reporting HEDIS quality measures 
     as required under section 1852(e)(3) and other nationally 
     recognized quality performance measures, as appropriate, on 
     the basis of race, ethnicity, and gender.
       ``(2) Reports on data analyses.--Not later than 4 years 
     after the date of the enactment of this section, and 4 years 
     thereafter, the Secretary shall submit to Congress a report 
     that includes recommendations for improving the 
     identification of health care disparities for Medicare 
     beneficiaries based on analyses of the data collected under 
     subsection (c).
       ``(c) Implementing Effective Approaches.--Not later than 24 
     months after the date of the enactment of this section, the 
     Secretary shall implement the approaches identified in the 
     report submitted under subsection (b)(1) for the ongoing, 
     accurate, and timely collection and evaluation of data on 
     health care disparities on the basis of race, ethnicity, and 
     gender.''.

     SEC. 186. DEMONSTRATION TO IMPROVE CARE TO PREVIOUSLY 
                   UNINSURED.

       (a) Establishment.--Within one year after the date of the 
     enactment of this Act, the Secretary (in this section 
     referred to as the ``Secretary'') shall establish a 
     demonstration project to determine the greatest needs and 
     most effective methods of outreach to medicare beneficiaries 
     who were previously uninsured.
       (b) Scope.--The demonstration shall be in no fewer than 10 
     sites, and shall include state health insurance assistance 
     programs, community health centers, community-based 
     organizations, community health workers, and other service 
     providers under parts A, B, and C of title XVIII of the 
     Social Security Act. Grantees that are plans operating under 
     part C shall document that enrollees who were previously 
     uninsured receive the ``Welcome to Medicare'' physical exam.
       (c) Duration.--The Secretary shall conduct the 
     demonstration project for a period of 2 years.
       (d) Report and Evaluation.--The Secretary shall conduct an 
     evaluation of the demonstration and not later than 1 year 
     after the completion of the project shall submit to Congress 
     a report including the following:
       (1) An analysis of the effectiveness of outreach activities 
     targeting beneficiaries who were previously uninsured, such 
     as revising outreach and enrollment materials (including the 
     potential for use of video information), providing one-on-one 
     counseling, working with community health workers, and 
     amending the Medicare and You handbook.
       (2) The effect of such outreach on beneficiary access to 
     care, utilization of services, efficiency and cost-
     effectiveness of health care delivery, patient satisfaction, 
     and select health outcomes.

     SEC. 187. OFFICE OF THE INSPECTOR GENERAL REPORT ON 
                   COMPLIANCE WITH AND ENFORCEMENT OF NATIONAL 
                   STANDARDS ON CULTURALLY AND LINGUISTICALLY 
                   APPROPRIATE SERVICES (CLAS) IN MEDICARE.

       (a) Report.--Not later than two years after the date of the 
     enactment of this Act, the Inspector General of the 
     Department of Health and Human Services shall prepare and 
     publish a report on--
       (1) the extent to which Medicare providers and plans are 
     complying with the Office for Civil Rights' Guidance to 
     Federal Financial Assistance Recipients Regarding Title VI 
     Prohibition Against National Origin Discrimination Affecting 
     Limited English Proficient Persons and the Office of Minority 
     Health's Culturally and Linguistically Appropriate Services 
     Standards in health care; and
       (2) a description of the costs associated with or savings 
     related to the provision of language services.

     Such report shall include recommendations on improving 
     compliance with CLAS Standards and recommendations on 
     improving enforcement of CLAS Standards.
       (b) Implementation.--Not later than one year after the date 
     of publication of the report under subsection (a), the 
     Department of Health and Human Services shall implement 
     changes responsive to any deficiencies identified in the 
     report.

     SEC. 188. MEDICARE IMPROVEMENT FUNDING.

       (a) Medicare Improvement Fund.--
       (1) In general.--Subject to paragraph (2), title XVIII of 
     the Social Security Act (42 U.S.C. 1395 et seq.) is amended 
     by adding at the end the following new section:


                      ``medicare improvement fund

       ``Sec. 1898.  (a) Establishment.--
       ``The Secretary shall establish under this title a Medicare 
     Improvement Fund (in this section referred to as the `Fund') 
     which shall be available to the Secretary to make 
     improvements under the original fee-for-service program under 
     parts A and B for individuals entitled to, or enrolled for, 
     benefits under part A or enrolled under part B.

[[Page 13452]]

       ``(b) Funding.--
       ``(1) In general.--There shall be available to the Fund, 
     for expenditures from the Fund for services furnished during 
     fiscal years 2014 through 2017, $19,900,000,000.
       ``(2) Payment from trust funds.--The amount specified under 
     paragraph (1) shall be available to the Fund, as expenditures 
     are made from the Fund, from the Federal Hospital Insurance 
     Trust Fund and the Federal Supplementary Medical Insurance 
     Trust Fund in such proportion as the Secretary determines 
     appropriate.
       ``(3) Funding limitation.--Amounts in the Fund shall be 
     available in advance of appropriations but only if the total 
     amount obligated from the Fund does not exceed the amount 
     available to the Fund under paragraph (1). The Secretary may 
     obligate funds from the Fund only if the Secretary determines 
     (and the Chief Actuary of the Centers for Medicare & Medicaid 
     Services and the appropriate budget officer certify) that 
     there are available in the Fund sufficient amounts to cover 
     all such obligations incurred consistent with the previous 
     sentence.''.
       (2) Contingency.--
       (A) In general.--If there is enacted, before, on, or after 
     the date of the enactment of this Act, a Supplemental 
     Appropriations Act, 2008 that includes a provision providing 
     for a Medicare Improvement Fund under a section 1898 of the 
     Social Security Act, the alternative amendment described in 
     subparagraph (B)--
       (i) shall apply instead of the amendment made by paragraph 
     (1); and
       (ii) shall be executed after such provision in such 
     Supplemental Appropriations Act.
       (B) Alternative amendment described.--The alternative 
     amendment described in this subparagraph is as follows: 
     Section 1898(b)(1) of the Social Security Act, as added by 
     the Supplemental Appropriations Act, 2008, is amended by 
     inserting before the period at the end the following: `` and, 
     in addition for services furnished during fiscal years 2014 
     through 2017, $19,900,000,000''.
       (b) Implementation.--For purposes of carrying out the 
     provisions of, and amendments made by, this title, in 
     addition to any other amounts provided in such provisions and 
     amendments, the Secretary of Health and Human Services 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 Medical Insurance 
     Trust Fund under section 1841 of such Act (42 U.S.C. 1395t), 
     in the same proportion as the Secretary determines under 
     section 1853(f) of such Act (42 U.S.C. 1395w-23(f)), of 
     $140,000,000 to the Centers for Medicare & Medicaid Services 
     Program Management Account for the period of fiscal years 
     2009 through 2013.

     SEC. 189. INCLUSION OF MEDICARE PROVIDERS AND SUPPLIERS IN 
                   FEDERAL PAYMENT LEVY AND ADMINISTRATIVE OFFSET 
                   PROGRAM.

       (a) In General.--Section 1874 of the Social Security Act 
     (42 U.S.C. 1395kk) is amended by adding at the end the 
     following new subsection:
       ``(d) Inclusion of Medicare Provider and Supplier Payments 
     in Federal Payment Levy Program.--
       ``(1) In general.--The Centers for Medicare & Medicaid 
     Services shall take all necessary steps to participate in the 
     Federal Payment Levy Program under section 6331(h) of the 
     Internal Revenue Code of 1986 as soon as possible and shall 
     ensure that--
       ``(A) at least 50 percent of all payments under parts A and 
     B are processed through such program beginning within 1 year 
     after the date of the enactment of this section;
       ``(B) at least 75 percent of all payments under parts A and 
     B are processed through such program beginning within 2 years 
     after such date; and
       ``(C) all payments under parts A and B are processed 
     through such program beginning not later than September 30, 
     2011.
       ``(2) Assistance.--The Financial Management Service and the 
     Internal Revenue Service shall provide assistance to the 
     Centers for Medicare & Medicaid Services to ensure that all 
     payments described in paragraph (1) are included in the 
     Federal Payment Levy Program by the deadlines specified in 
     that subsection.''.
       (b) Application of Administrative Offset Provisions to 
     Medicare Provider or Supplier Payments.--Section 3716 of 
     title 31, United States Code, is amended--
       (1) by inserting ``the Department of Health and Human 
     Services,'' after ``United States Postal Service,'' in 
     subsection (c)(1)(A); and
       (2) by adding at the end of subsection (c)(3) the following 
     new subparagraph:
       ``(D) This section shall apply to payments made after the 
     date which is 90 days after the enactment of this 
     subparagraph (or such earlier date as designated by the 
     Secretary of Health and Human Services) with respect to 
     claims or debts, and to amounts payable, under title XVIII of 
     the Social Security Act.''.
       (c) Effective Date.--The amendments made by this section 
     shall take effect on the date of the enactment of this Act.

                           TITLE II--MEDICAID

     SEC. 201. EXTENSION OF TRANSITIONAL MEDICAL ASSISTANCE (TMA) 
                   AND ABSTINENCE EDUCATION PROGRAM.

       Section 401 of division B of the Tax Relief and Health Care 
     Act of 2006 (Public Law 109-432, 120 Stat. 2994), as amended 
     by section 1 of Public Law 110-48 (121 Stat. 244), section 2 
     of the TMA, Abstinence, Education, and QI Programs Extension 
     Act of 2007 (Public Law 110-90, 121 Stat. 984), and section 
     202 of the Medicare, Medicaid, and SCHIP Extension Act of 
     2007 (Public Law 110-173) is amended--
       (1) by striking ``June 30, 2008'' and inserting ``June 30, 
     2009'';
       (2) by striking ``the third quarter of fiscal year 2008'' 
     and inserting ``the third quarter of fiscal year 2009''; and
       (3) by striking ``the third quarter of fiscal year 2007'' 
     and inserting ``the third quarter of fiscal year 2008''.

     SEC. 202. MEDICAID DSH EXTENSION.

       Section 1923(f)(6) of the Social Security Act (42 U.S.C. 
     1396r-4(f)(6)) is amended--
       (1) in the heading, by striking ``fiscal year 2007 and 
     portions of fiscal year 2008'' and inserting ``fiscal years 
     2007 through 2009 and the first calendar quarter of fiscal 
     year 2010''; and
       (2) in subparagraph (A)--
       (A) in clause (i)--
       (i) in the second sentence--

       (I) by striking ``fiscal year 2008 for the period ending on 
     June 30, 2008'' and inserting ``fiscal years 2008 and 2009''; 
     and
       (II) by striking ``\3/4\ of''; and

       (ii) by adding at the end the following new sentences: 
     ``Only with respect to fiscal year 2010 for the period ending 
     on December 31, 2009, the DSH allotment for Tennessee for 
     such portion of the fiscal year, notwithstanding such table 
     or terms, shall be \1/4\ of the amount specified in the first 
     sentence for fiscal year 2007.'';
       (B) in clause (ii), by striking ``or for a period in fiscal 
     year 2008'' and inserting ``, 2008, 2009, or for a period in 
     fiscal year 2010'';
       (C) in clause (iv)--
       (i) in the heading, by striking ``fiscal year 2007 and 
     fiscal year 2008'' and inserting ``fiscal years 2007 through 
     2009 and the first calendar quarter of fiscal year 2010'';
       (ii) in subclause (I), by striking ``or for a period in 
     fiscal year 2008'' and inserting ``, 2008, 2009, or for a 
     period in fiscal year 2010''; and
       (iii) in subclause (II), by striking ``or for a period in 
     fiscal year 2008'' and inserting ``, 2008, 2009, or for a 
     period in fiscal year 2010''; and
       (3) in subparagraph (B)(i)--
       (A) in the first sentence, by striking ``fiscal year 2007'' 
     and inserting ``each of fiscal years 2007 through 2009''; and
       (B) by striking the second sentence and inserting the 
     following: ``Only with respect to fiscal year 2010 for the 
     period ending on December 31, 2009, the DSH allotment for 
     Hawaii for such portion of the fiscal year, notwithstanding 
     the table set forth in paragraph (2), shall be $2,500,000.''.

     SEC. 203. PHARMACY REIMBURSEMENT UNDER MEDICAID.

       (a) Delay in Application of New Payment Limit for Multiple 
     Source Drugs Under Medicaid.--Notwithstanding paragraphs (4) 
     and (5) of subsection (e) of section 1927 of the Social 
     Security Act (42 U.S.C. 1396r-8) or part 447 of title 42, 
     Code of Federal Regulations, as published on July 17, 2007 
     (72 Federal Register 39142)--
       (1) the specific upper limit under section 447.332 of title 
     42, Code of Federal Regulations (as in effect on December 31, 
     2006) applicable to payments made by a State for multiple 
     source drugs under a State Medicaid plan shall continue to 
     apply through September 30, 2009, for purposes of the 
     availability of Federal financial participation for such 
     payments; and
       (2) the Secretary of Health and Human Services shall not, 
     prior to October 1, 2009, finalize, implement, enforce, or 
     otherwise take any action (through promulgation of 
     regulation, issuance of regulatory guidance, use of Federal 
     payment audit procedures, or other administrative action, 
     policy, or practice, including a Medical Assistance Manual 
     transmittal or letter to State Medicaid directors) to impose 
     the specific upper limit established under section 447.514(b) 
     of title 42, Code of Federal Regulations as published on July 
     17, 2007 (72 Federal Register 39142).
       (b) Temporary Suspension of Updated Publicly Available AMP 
     Data.--Notwithstanding clause (v) of section 1927(b)(3)(D) of 
     the Social Security Act (42 U.S.C. 1396r-8(b)(3)(D)), the 
     Secretary of Health and Human Services shall not, prior to 
     October 1, 2009, make publicly available any AMP disclosed to 
     the Secretary.
       (c) Definitions.--In this subsection:
       (1) The term ``multiple source drug'' has the meaning given 
     that term in section 1927(k)(7)(A)(i) of the Social Security 
     Act (42 U.S.C. 1396r-8(k)(7)(A)(i)).
       (2) The term ``AMP'' has the meaning given ``average 
     manufacturer price'' in section 1927(k)(1) of the Social 
     Security Act (42 U.S.C. 1396r-8(k)(1)) and ``AMP'' in section 
     447.504(a) of title 42, Code of Federal Regulations as 
     published on July 17, 2007 (72 Federal Register 39142).

     SEC. 204. REVIEW OF ADMINISTRATIVE CLAIM DETERMINATIONS.

       (a) In General.--Section 1116 of the Social Security Act 
     (42 U.S.C. 1316) is amended by adding at the end the 
     following new subsection:
       ``(e)(1) Whenever the Secretary determines that any item or 
     class of items on account of

[[Page 13453]]

     which Federal financial participation is claimed under title 
     XIX shall be disallowed for such participation, the State 
     shall be entitled to and upon request shall receive a 
     reconsideration of the disallowance, provided that such 
     request is made during the 60-day period that begins on the 
     date the State receives notice of the disallowance.
       ``(2)(A) A State may appeal a disallowance of a claim for 
     federal financial participation under title XIX by the 
     Secretary, or an unfavorable reconsideration of a 
     disallowance, during the 60-day period that begins on the 
     date the State receives notice of the disallowance or of the 
     unfavorable reconsideration, in whole or in part, to the 
     Departmental Appeals Board, established in the Department of 
     Health and Human Services (in this paragraph referred to as 
     the `Board'), by filing a notice of appeal with the Board.
       ``(B) The Board shall consider a State's appeal of a 
     disallowance of such a claim (or of an unfavorable 
     reconsideration of a disallowance) on the basis of such 
     documentation as the State may submit and as the Board may 
     require to support the final decision of the Board. In 
     deciding whether to uphold a disallowance of such a claim or 
     any portion thereof, the Board shall be bound by all 
     applicable laws and regulations and shall conduct a thorough 
     review of the issues, taking into account all relevant 
     evidence. The Board's decision of an appeal under 
     subparagraph (A) shall be the final decision of the Secretary 
     and shall be subject to reconsideration by the Board only 
     upon motion of either party filed during the 60-day period 
     that begins on the date of the Board's decision or to 
     judicial review in accordance with subparagraph (C).
       ``(C) A State may obtain judicial review of a decision of 
     the Board by filing an action in any United States District 
     Court located within the appealing State (or, if several 
     States jointly appeal the disallowance of claims for Federal 
     financial participation under section 1903, in any United 
     States District Court that is located within any State that 
     is a party to the appeal) or the United States District Court 
     for the District of Columbia. Such an action may only be 
     filed--
       ``(i) if no motion for reconsideration was filed within the 
     60-day period specified in subparagraph (B), during such 60-
     day period; or
       ``(ii) if such a motion was filed within such period, 
     during the 60-day period that begins on the date of the 
     Board's decision on such motion.''.
       (b) Conforming Amendment.--Section 1116(d) of such Act (42 
     U.S.C. 1316(d)) is amended by striking ``or XIX,''.
       (c) Effective Date.--The amendments made by this section 
     take effect on the date of the enactment of this Act and 
     apply to any disallowance of a claim for Federal financial 
     participation under title XIX of the Social Security Act (42 
     U.S.C. 1396 et seq.) made on or after such date or during the 
     60-day period prior to such date.

     SEC. 205. COUNTY MEDICAID HEALTH INSURING ORGANIZATIONS.

       (a) In General.--Section 9517(c)(3) of the Consolidated 
     Omnibus Budget Reconciliation Act of 1985 (42 U.S.C. 1396b 
     note), as added by section 4734 of the Omnibus Budget 
     Reconciliation Act of 1990 and as amended by section 704 of 
     the Medicare, Medicaid, and SCHIP Benefits Improvement and 
     Protection Act of 2000, is amended--
       (1) in subparagraph (A), by inserting ``, in the case of 
     any health insuring organization described in such 
     subparagraph that is operated by a public entity established 
     by Ventura County, and in the case of any health insuring 
     organization described in such subparagraph that is operated 
     by a public entity established by Merced County'' after 
     ``described in subparagraph (B)''; and
       (2) in subparagraph (C), by striking ``14 percent'' and 
     inserting ``16 percent''.
       (b) Effective Date.--The amendments made by subsection (a) 
     shall take effect on the date of the enactment of this Act.

                        TITLE III--MISCELLANEOUS

     SEC. 301. EXTENSION OF TANF SUPPLEMENTAL GRANTS.

       (a) Extension Through Fiscal Year 2009.--Section 7101(a) of 
     the Deficit Reduction Act of 2005 (Public Law 109-171; 120 
     Stat. 135) is amended by striking ``fiscal year 2008'' and 
     inserting ``fiscal year 2009''.
       (b) Conforming Amendment.--Section 403(a)(3)(H)(ii) of the 
     Social Security Act (42 U.S.C. 603(a)(3)(H)(ii)) is amended 
     to read as follows:
       ``(ii) subparagraph (G) shall be applied as if `fiscal year 
     2009' were substituted for `fiscal year 2001'; and''.

     SEC. 302. 70 PERCENT FEDERAL MATCHING FOR FOSTER CARE AND 
                   ADOPTION ASSISTANCE FOR THE DISTRICT OF 
                   COLUMBIA.

       (a) In General.--Section 474(a) of the Social Security Act 
     (42 U.S.C. 674(a)) is amended in each of paragraphs (1) and 
     (2) by striking ``(as defined in section 1905(b) of this 
     Act)'' and inserting ``(which shall be as defined in section 
     1905(b), in the case of a State other than the District of 
     Columbia, or 70 percent, in the case of the District of 
     Columbia)''.
       (b) Effective Date.--The amendment made by subsection (a) 
     shall take effect on October 1, 2008, and shall apply to 
     calendar quarters beginning on or after that date.

     SEC. 303. EXTENSION OF SPECIAL DIABETES GRANT PROGRAMS.

       (a) Special Diabetes Programs for Type I Diabetes.--Section 
     330B(b)(2)(C) of the Public Health Service Act (42 U.S.C. 
     254c-2(b)(2)) is amended by striking ``2009'' and inserting 
     ``2011''.
       (b) Special Diabetes Programs for Indians.--Section 
     330C(c)(2)(C) of the Public Health Service Act (42 U.S.C. 
     254c-3(c)(2)(C)) is amended by striking ``2009'' and 
     inserting ``2011''.
       (c) Report on Grant Programs.--Section 4923(b) of the 
     Balanced Budget Act of 1997 (42 U.S.C. 1254c-2 note), as 
     amended by section 931(c) of the Medicare, Medicaid, and 
     SCHIP Benefits Improvement and Protection Act of 2000, as 
     enacted into law by section 1(a)(6) of Public Law 106-554, 
     and section 1(c) of Public Law 107-360, is amended--
       (1) in paragraph (1), by striking ``and'' at the end;
       (2) in paragraph (2)--
       (A) by striking ``a final report'' and inserting ``a second 
     interim report''; and
       (B) by striking the period at the end and inserting ``; 
     and''; and
       (3) by adding at the end the following new paragraph:
       ``(3) a report on such evaluation not later than January 1, 
     2011.''.

     SEC. 304. IOM REPORTS ON BEST PRACTICES FOR CONDUCTING 
                   SYSTEMATIC REVIEWS OF CLINICAL EFFECTIVENESS 
                   RESEARCH AND FOR DEVELOPING CLINICAL PROTOCOLS.

       (a) Systematic Reviews of Clinical Effectiveness 
     Research.--
       (1) Study.--Not later than 60 days after the date of the 
     enactment of this Act, the Secretary of Health and Human 
     Services shall enter into a contract with the Institute of 
     Medicine of the National Academies (in this section referred 
     to as the ``Institute'') under which the Institute shall 
     conduct a study to identify the methodological standards for 
     conducting systematic reviews of clinical effectiveness 
     research on health and health care in order to ensure that 
     organizations conducting such reviews have information on 
     methods that are objective, scientifically valid, and 
     consistent.
       (2) Report.--Not later than 18 months after the effective 
     date of the contract under paragraph (1), the Institute, as 
     part of such contract, shall submit to the Secretary of 
     Health and Human Services and the appropriate committees of 
     jurisdiction of Congress a report containing the results of 
     the study conducted under paragraph (1), together with 
     recommendations for such legislation and administrative 
     action as the Institute determines appropriate.
       (3) Participation.--The contract under paragraph (1) shall 
     require that stakeholders with expertise in conducting 
     clinical effectiveness research participate on the panel 
     responsible for conducting the study under paragraph (1) and 
     preparing the report under paragraph (2).
       (b) Clinical Protocols.--
       (1) Study.--Not later than 60 days after the date of the 
     enactment of this Act, the Secretary of Health and Human 
     Services shall enter into a contract with the Institute of 
     Medicine of the National Academies (in this section referred 
     to as the ``Institute'') under which the Institute shall 
     conduct a study on the best methods used in developing 
     clinical practice guidelines in order to ensure that 
     organizations developing such guidelines have information on 
     approaches that are objective, scientifically valid, and 
     consistent.
       (2) Report.--Not later than 18 months after the effective 
     date of the contract under paragraph (1), the Institute, as 
     part of such contract, shall submit to the Secretary of 
     Health and Human Services and the appropriate committees of 
     jurisdiction of Congress a report containing the results of 
     the study conducted under paragraph (1), together with 
     recommendations for such legislation and administrative 
     action as the Institute determines appropriate.
       (3) Participation.--The contract under paragraph (1) shall 
     require that stakeholders with expertise in making clinical 
     recommendations participate on the panel responsible for 
     conducting the study under paragraph (1) and preparing the 
     report under paragraph (2).
       (c) Funding.--Out of any funds in the Treasury not 
     otherwise appropriated, there are appropriated for the period 
     of fiscal years 2009 and 2010, $3,000,000 to carry out this 
     section.

                          ____________________