[United States Statutes at Large, Volume 122, 110th Congress, 2nd Session]
[From the U.S. Government Publishing Office, www.gpo.gov]

122 STAT. 2494

Public Law 110-275
110th Congress

An Act


 
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. [NOTE: July 15,
2008 -  [H.R. 6331]]

Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled, [NOTE: Medicare
Improvements for Patients and Providers Act of 2008. Inter-governmental
relations.]
SECTION 1. [NOTE: 42 USC 1305 note.] 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.
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.

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122 STAT. 2495

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.

[[Page 2496]]
122 STAT. 2496

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

[[Page 2497]]
122 STAT. 2497

``(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 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)  [NOTE: 42 USC 1395l note.] 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.''.

[[Page 2498]]
122 STAT. 2498

(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) [NOTE: 42 USC 1395l note.]  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

[[Page 2499]]
122 STAT. 2499

(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.--
[NOTE: Applicability.] 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) [NOTE: 42 USC 1395w-21 note.]  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--

[[Page 2500]]
122 STAT. 2500

(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 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.-- [NOTE: Deadline. 42 USC 1395w-21
note.] 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. [NOTE:  Effective date.] --For plan years beginning on
or after January 1, 2010, a Medicare Advantage organization must
ensure that the name of

[[Page 2501]]
122 STAT. 2501

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) [NOTE: Reports.] 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) [NOTE: 42 USC 1395w-21 note.]  Effective date.--The
amendments made by this subsection shall apply to plan years
beginning on or after January 1, 2009.
SEC. 104. [NOTE: 42 USC 1395ss note.] 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

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122 STAT. 2502

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)), [NOTE: 42 USC
1395ss.] 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) [NOTE: 42 USC 1395ss-1.] Clarification.--Any health insurance
policy that provides reimbursement for expenses incurred for items and
services for

[[Page 2503]]
122 STAT. 2503

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.--

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122 STAT. 2504

``(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 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.-- [NOTE: Effective
date.] 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) [NOTE: Appropriation authorization.] Reimbursement
of social security administration administrative costs.--

[[Page 2505]]
122 STAT. 2505

``(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.-- [NOTE: Effective
date.] 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. [NOTE: Effective date.] 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.--

[[Page 2506]]
122 STAT. 2506

``(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) [NOTE: 42 USC 1320b-14 note.]  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).''.

[[Page 2507]]
122 STAT. 2507

(b) [NOTE: 42 USC 1395w-113 note.]  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) [NOTE: 42 USC 1396p note.]  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) [NOTE: 42 USC 1395w-114 note.]  Effective Date.--The
amendments made by this section shall take effect with 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) [NOTE: 42 USC 1395w-114 note.]  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

[[Page 2508]]
122 STAT. 2508

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) [NOTE: 42 USC 1396d note.]  Effective Date.--The amendment
made by subsection (a) shall take effect on January 1, 2010.
SEC. 119. [NOTE: 42 USC 1395b-3 note.] 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.

[[Page 2509]]
122 STAT. 2509

(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.

[[Page 2510]]
122 STAT. 2510

(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.-- [NOTE: Grants.] 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) [NOTE: Internet.] 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

[[Page 2511]]
122 STAT. 2511

(Public Law 110-173) for the sole purpose of providing outreach to
individuals regarding the benefits available under the Medicare
prescription drug benefit under part D of title XVIII of the Social
Security Act. [NOTE: Publication.] 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

[[Page 2512]]
122 STAT. 2512

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.''.

[[Page 2513]]
122 STAT. 2513

(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) [NOTE: Appropriation authorization.]
Funding.--There are appropriated from the Federal
Hospital Insurance Trust Fund under section 1817

[[Page 2514]]
122 STAT. 2514

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) [NOTE: Applicability.] 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 (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. [NOTE: 42 USC 1395i-4 note.] 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:

[[Page 2515]]
122 STAT. 2515

(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.

[[Page 2516]]
122 STAT. 2516

(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) [NOTE: Grants.] 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

[[Page 2517]]
122 STAT. 2517

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) [NOTE: Appropriation authorization.]  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 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.

[[Page 2518]]
122 STAT. 2518

(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) [NOTE: 42 USC 1395ww note.]  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)) [NOTE: 42 USC 1395ww note.] 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

[[Page 2519]]
122 STAT. 2519

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) [NOTE: 42 USC 1395bb note.]  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

[[Page 2520]]
122 STAT. 2520

(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) [NOTE: Applicability. 42 USC 1395bb note.]  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.--

[[Page 2521]]
122 STAT. 2521

(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) [NOTE: Applicability.]  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
(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).

[[Page 2522]]
122 STAT. 2522

``(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), [NOTE: 42 USC 1395w-4.] 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) [NOTE: Deadline.]  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.

[[Page 2523]]
122 STAT. 2523

``(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.-- [NOTE: Deadline.] 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)--

[[Page 2524]]
122 STAT. 2524

(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

[[Page 2525]]
122 STAT. 2525

(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
``(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) [NOTE: 42 USC 1395w-4 note.]  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

[[Page 2526]]
122 STAT. 2526

(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) [NOTE: 42 USC 1395w-4 note.]  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.-- [NOTE: Deadline.] 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

[[Page 2527]]
122 STAT. 2527

``(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), [NOTE: 42 USC 1395w-4.] is
amended--
(1) by inserting after paragraph (1), the following new
paragraph:
``(2) Incentive payments for electronic prescribing.--
``(A) [NOTE: Deadline.]  In general.--For 2009
through 2013, with respect to covered professional
services furnished during a reporting period by an
eligible professional, if the eligible

[[Page 2528]]
122 STAT. 2528

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.
``(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

[[Page 2529]]
122 STAT. 2529

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.--

[[Page 2530]]
122 STAT. 2530

``(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:

[[Page 2531]]
122 STAT. 2531

(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:

[[Page 2532]]
122 STAT. 2532

``(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 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) [NOTE: 42 USC 1395w-4.] 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.-- [NOTE: Effective
date.] 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

[[Page 2533]]
122 STAT. 2533

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.-- [NOTE: Deadline.] 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

[[Page 2534]]
122 STAT. 2534

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.--
[NOTE: Procedures.] 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;

[[Page 2535]]
122 STAT. 2535

``(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) [NOTE: 42 USC 1395y note.]  Effective date.--
The amendments made by this paragraph shall apply to
advanced diagnostic imaging services furnished on or
after January 1, 2012.

(b) [NOTE: 42 USC 1395m note.]  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 high rate of growth, or
services for which appropriateness criteria exists.
(2) Implementation and design of demonstration project.--
(A) Implementation and duration.--

[[Page 2536]]
122 STAT. 2536

(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).

[[Page 2537]]
122 STAT. 2537

(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) [NOTE: Certification.] 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;

[[Page 2538]]
122 STAT. 2538

(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--

[[Page 2539]]
122 STAT. 2539

(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 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.--

[[Page 2540]]
122 STAT. 2540

(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), [NOTE: 42 USC 1395w-4 note.] 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)''.

[[Page 2541]]
122 STAT. 2541

SEC. 138. [NOTE: 42 USC 1395w-4.]  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 [NOTE: Effective date.]  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 [NOTE: Effective date. 42 USC 1395l.]  to items and services
furnished on or after

[[Page 2542]]
122 STAT. 2542

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

[[Page 2543]]
122 STAT. 2543

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
(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) [NOTE: 42 USC 1395k note.]  Effective Date.--The amendments
made by this section shall apply to services furnished on or after July
1, 2009.

(d) [NOTE: 42 USC 1395k note.]  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.

[[Page 2544]]
122 STAT. 2544

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--

[[Page 2545]]
122 STAT. 2545

``(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) [NOTE: Standards.] 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.

[[Page 2546]]
122 STAT. 2546

``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) [NOTE: Standards.] 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. 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.

[[Page 2547]]
122 STAT. 2547

``(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) [NOTE: 42 USC 1395w-4 note.]  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) [NOTE: 42 USC 1395m note.]  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) [NOTE: 42 USC 1395l.]  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)''.

[[Page 2548]]
122 STAT. 2548

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) [NOTE: 42 USC 1395m note.]  Treatment of certain areas
for payment for air ambulance services under the ambulance fee
schedule.--Notwithstanding [NOTE: Time period.] 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) [NOTE: 42 USC 1395m note.]  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

[[Page 2549]]
122 STAT. 2549

(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) [NOTE: 42 USC 1395m note.]  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) [NOTE: 42 USC 1395m note.]  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,

[[Page 2550]]
122 STAT. 2550

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).
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

[[Page 2551]]
122 STAT. 2551

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. [NOTE: 42 USC 280g-6.] 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--

[[Page 2552]]
122 STAT. 2552

``(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) [NOTE: Standards.] 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:

[[Page 2553]]
122 STAT. 2553

``(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) [NOTE: 42 USC 1395w-4 note.]  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:
[NOTE: Time period.] ``(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) [NOTE: Effective date.] 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 [NOTE: Effective date.] 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, 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) [NOTE: Effective date.] 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

[[Page 2554]]
122 STAT. 2554

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) [NOTE: Time period.] 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) [NOTE: Effective date.] 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.

[[Page 2555]]
122 STAT. 2555

``(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. [NOTE: Deadline.] 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) [NOTE: Effective date.] 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.''.

[[Page 2556]]
122 STAT. 2556

(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) [NOTE: 42 USC 1395rr note.]  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.-- [NOTE: Effective date.] 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.
``(B) Requirement.--The requirement described in
this subparagraph is that the provider or facility meets
(or

[[Page 2557]]
122 STAT. 2557

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').

[[Page 2558]]
122 STAT. 2558

``(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:

[[Page 2559]]
122 STAT. 2559

``(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.-- [NOTE: Procedures.] 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.

[[Page 2560]]
122 STAT. 2560

(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
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) [NOTE: Contracts.] 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;

[[Page 2561]]
122 STAT. 2561

``(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) [NOTE: Puerto Rico.] 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.--

[[Page 2562]]
122 STAT. 2562

``(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) [NOTE: Deadlines.] 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

[[Page 2563]]
122 STAT. 2563

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) [NOTE: Applicability.]  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.''.

[[Page 2564]]
122 STAT. 2564

(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 [NOTE: Regulations.] 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
(ii) by adding at the end the following new
subparagraph:
``(F) Application of accreditation requirement.--In
implementing quality standards under this paragraph--
``(i) [NOTE: Effective date.] 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

[[Page 2565]]
122 STAT. 2565

requirements apply to such professionals
and persons with respect to the
furnishing of such items and
services.''.
(B) [NOTE: 42 USC 1395m note.]  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. [NOTE: Deadline.] --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) [NOTE: Establishment.]  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). [NOTE: Reports.] 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) [NOTE: 42 USC 1395w-3 note.] 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)'';

[[Page 2566]]
122 STAT. 2566

(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) [NOTE: 42 USC 1395w-3
note.] is amended by striking ``July 1, 2009'' and
inserting ``July 1, 2011''.
(3) [NOTE: 42 USC 1395m note.]  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,

[[Page 2567]]
122 STAT. 2567

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 orthotics.--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, [NOTE: Deadline.] 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

[[Page 2568]]
122 STAT. 2568

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. [NOTE: Reports.] 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).''.
(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) [NOTE: 42 USC 1395m note.]  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

[[Page 2569]]
122 STAT. 2569

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.--

[[Page 2570]]
122 STAT. 2570

``(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

[[Page 2571]]
122 STAT. 2571

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) [NOTE: 42 USC 1395w-22 note.]  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.''
(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) [NOTE: 42 USC 1395w-22 note.]  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) [NOTE: 42 USC 1395w-21 note.]  Moratorium on Authority To
Designate Other Plans as Specialized MA Plans.-- [NOTE: Time
period.] 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

[[Page 2572]]
122 STAT. 2572

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) [NOTE: Effective date.] 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) [NOTE: Effective date.] 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.

[[Page 2573]]
122 STAT. 2573

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) [NOTE: Effective date.] 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) [NOTE: 42 USC 1395w-28 note.]  Authority to operate
but no service area expansion for dual snps that do not meet
certain requirements.-- [NOTE: Time period.] 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

[[Page 2574]]
122 STAT. 2574

``(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) [NOTE: Establishment.]  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

[[Page 2575]]
122 STAT. 2575

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) [NOTE: 42 USC 1395w-22 note.]  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 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) [NOTE: 42 USC 1395w-27 note.]  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) [NOTE: 42 USC 1395w-28 note.]  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) [NOTE: 42 USC 1395w-22 note.]  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-

[[Page 2576]]
122 STAT. 2576

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

[[Page 2577]]
122 STAT. 2577

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.

[[Page 2578]]
122 STAT. 2578

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--
``(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

[[Page 2579]]
122 STAT. 2579

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. [NOTE: Notice. Deadlines.] --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) [NOTE: Deadlines.]  Claim determined
to not be a clean claim.--
``(I) In general.--
[NOTE: Notice.] 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.

[[Page 2580]]
122 STAT. 2580

``(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) [NOTE: Applicability.]  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) [NOTE: 42 USC 1395w-27 note.]  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.--
[NOTE: Deadline.] 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),

[[Page 2581]]
122 STAT. 2581

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) [NOTE: 42 USC 1395w-27 note.]  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) [NOTE: 42 USC 1395w-27 note.]  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) [NOTE: 42 USC 1395w-102 note.]  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.--

[[Page 2582]]
122 STAT. 2582

``(i) [NOTE: Effective date.]
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).
``(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

[[Page 2583]]
122 STAT. 2583

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.-- [NOTE: Effective
date.] 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) [NOTE: 42 USC 1395w-102 note.]  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: [NOTE: Effective date.] ``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.--

[[Page 2584]]
122 STAT. 2584

(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.  [NOTE: 42 USC 1395aaa.] (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

[[Page 2585]]
122 STAT. 2585

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.

[[Page 2586]]
122 STAT. 2586

``(4) Open and transparent.--With respect to matters related
to the contract with the 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.

[[Page 2587]]
122 STAT. 2587

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) [NOTE: 42 USC 1395b-10.]  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

[[Page 2588]]
122 STAT. 2588

of health care disparities for Medicare beneficiaries based on
analyses of the data collected under subsection (c).

``(c) Implementing Effective Approaches.--Not [NOTE: Deadline.]
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. [NOTE: 42 USC 1395b-4 note.] DEMONSTRATION TO IMPROVE
CARE TO PREVIOUSLY UNINSURED.

(a) Establishment.--Within [NOTE: Deadline.]  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. [NOTE: 42 USC 1395cc note.] 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.

[[Page 2589]]
122 STAT. 2589

Such report shall include recommendations on improving compliance with
CLAS Standards and recommendations on improving enforcement of CLAS
Standards.
(b) Implementation.--Not [NOTE: Deadline.] 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.

``(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). [NOTE: Certification.] 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) [NOTE: Applicability.] 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, [NOTE: 42 USC 1395iii.] is amended by inserting
before the period at the end the

[[Page 2590]]
122 STAT. 2590

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) [NOTE: Deadline.] 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) [NOTE: Applicability. Effective date.] 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.''.

[[Page 2591]]
122 STAT. 2591

(c) [NOTE: 31 USC 3176 note.]  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

[[Page 2592]]
122 STAT. 2592

(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. [NOTE: 42 USC 1396r-8 note.] 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) [NOTE: Time periods.] Whenever the Secretary determines
that any item or class of items on account of 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

[[Page 2593]]
122 STAT. 2593

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) [NOTE: 42 USC 1316 note.]  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--

[[Page 2594]]
122 STAT. 2594

(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) [NOTE: 42 USC 1396b note.]  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) [NOTE: 42 USC 674 note.]  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), [NOTE: 42 USC 254c-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:

[[Page 2595]]
122 STAT. 2595

``(3) [NOTE: Deadline.] 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.-- [NOTE: Contracts.] 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 [NOTE: Contracts.] 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).

[[Page 2596]]
122 STAT. 2596

(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.

Nancy Pelosi

Speaker of the House of Representatives.

Robert C. Byrd

President of the Senate pro tempore.

IN THE HOUSE OF REPRESENTATIVES, U.S.

July 15, 2008.

The House of Representatives having proceeded to reconsider the bill
(H.R. 6331) entitled `An Act 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'',
returned by the President of the United States with his objections, to
the House of Representatives, in which it originated, it was
Resolved, That the said bill pass, two-thirds of the House of
Representatives agreeing to pass the same.

Lorraine C. Miller

Clerk.

By

Robert F. Reeves

Deputy Clerk.

I certify that this Act originated in the House of Representatives.



Lorraine C. Miller

Clerk.

[[Page 2597]]
122 STAT. 2597

IN THE SENATE OF THE UNITED STATES,

July 15, 2008.

The Senate having proceeded to reconsider the bill (H.R. 6331)
entitled ``An Act 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'', returned by
the President of the United States with his objections, to the House of
Representatives, in which it originated, and passed by the House of
Representatives on reconsideration of the same, it was
Resolved, That the said bill pass, two-thirds of the Senators present
having voted in the affirmative.

Nancy Erickson

Secretary.



LEGISLATIVE HISTORY--H.R. 6331:
---------------------------------------------------------------------------

CONGRESSIONAL RECORD, Vol. 154 (2008):
June 24, considered and passed House.
July 9, considered and passed Senate.
WEEKLY COMPILATION OF PRESIDENTIAL DOCUMENTS, Vol. 44 (2008):
July 15, Presidential veto message.
CONGRESSIONAL RECORD, Vol. 154 (2008):
July 15, House and Senate overrode veto.