Congressional Record United States Th of America PROCEEDINGS and DEBATES of the 108 CONGRESS, FIRST SESSION

E PL UR UM IB N U U S Congressional Record United States th of America PROCEEDINGS AND DEBATES OF THE 108 CONGRESS, FIRST SESSION

Vol. 149 WASHINGTON, MONDAY, JULY 7, 2003 No. 98 House of Representatives The House met at 2 p.m. and was last day’s proceedings and announces Resolved, That the Secretary of the Senate called to order by the Speaker pro tem- to the House his approval thereof. communicate these resolutions to the House pore (Mr. GILCHREST). Pursuant to clause 1, rule I, the Jour- of Representatives and transmit an enrolled nal stands approved. copy thereof to the family of the deceased. f Resolved, That when the Senate adjourns f DESIGNATION OF THE SPEAKER today, it stand adjourned as a further mark PLEDGE OF ALLEGIANCE of respect to the memory of the Honorable J. PRO TEMPORE Strom Thurmond. The SPEAKER pro tempore. Will the The SPEAKER pro tempore laid be- The message also announced that the gentleman from Virginia (Mr. WOLF) fore the House the following commu- Senate has passed with an amendment nication from the Speaker: come forward and lead the House in the Pledge of Allegiance. a bill of the House of the following WASHINGTON, DC, Mr. WOLF led the Pledge of Alle- title: July 7, 2003. giance as follows: H.R. 1474. An act to facilitate check trun- I hereby appoint the Honorable WAYNE T. cation by authorizing substitute checks, to I pledge allegiance to the Flag of the GILCHREST to act as Speaker pro tempore on foster innovation in the check collection United States of America, and to the Repub- this day. system without mandating receipt of checks lic for which it stands, one nation under God, J. DENNIS HASTERT, in electronic form, and to improve the over- indivisible, with liberty and justice for all. Speaker of the House of Representatives. all efficiency of the Nation’s payments sys- f f tem, and for other purposes. PRAYER MESSAGE FROM THE SENATE The message also announced that the Senate has passed a bill of the fol- The Chaplain, the Reverend Daniel P. A message from the Senate by Mr. Monahan, one of its clerks, announced lowing title in which the concurrence Coughlin, offered the following prayer: of the House is requested: As the Nation celebrated Independ- that the Senate agreed to the following S. 148. An act to provide for the Secretary ence Day this year, we thank You resolution: S. RES. 191 of Homeland Security to be included in the again, Lord, and we praise You still. line of Presidential succession. You have blessed this land with abun- Whereas the Honorable J. Strom Thur- dance and hold us together in our di- mond conducted his life in an exemplary manner, an example to all of his fellow citi- f versity. zens; Let freedom continue to ring out Whereas the Honorable J. Strom Thur- COMMUNICATION FROM THE from the Nation’s capital as leaders in mond was a devoted husband, father, and CLERK OF THE HOUSE government turn to You in prayer and most recently, grandfather; seek Your guidance in the days ahead. Whereas the Honorable J. Strom Thur- The SPEAKER pro tempore laid be- Strengthen and protect our military mond gave a great measure of his life to pub- fore the House the following commu- lic service; nication from the Clerk of the House of troops at home and abroad, for the gift Whereas having abandoned the safety of of this Nation holds promise for peo- high position, the Honorable J. Strom Thur- Representatives: ples around the world. mond served his country during World War OFFICE OF THE CLERK, May the songs of equal justice and II, fighting the greatest threat the world had HOUSE OF REPRESENTATIVES, religious truths heard this weekend at thus far seen; Washington, DC, June 27, 2003. the Capitol Fourth concert on the Mall Whereas the Honorable J. Strom Thur- Hon. J. DENNIS HASTERT, and from the Mormon Tabernacle Choir mond served South Carolina in the United Speaker, House of Representatives, Washington, DC. at Wolf Trap continue to sound across States Senate with devotion and distinction; Whereas his service on behalf of South DEAR MR. SPEAKER: Pursuant to the per- this Nation and stir America’s soul in Carolina and all Americans earned him the mission granted in Clause 2(h) of Rule II of her desire to be ‘‘the land of the free esteem and high regard of his colleagues; and the Rules of the U.S. House of Representa- and the home of the brave,’’ now and Whereas his death has deprived his State tives, the Clerk received the following mes- forever. and Nation of a most outstanding Senator: sage from the Secretary of the Senate on Amen. Now, therefore, be it June 27, 2003 at 12:49 p.m. Resolved, That the Senate has heard with That the Senate passed without amend- f profound sorrow and deep regret the an- ment H. Con. Res. 231. THE JOURNAL nouncement of the death of the Honorable J. With best wishes, I am Strom Thurmond, former Senator and Presi- Sincerely, The SPEAKER pro tempore. The dent Pro Tempore Emeritus from the State MARTHA C. MORRISON, Chair has examined the Journal of the of South Carolina. Deputy Clerk of the House.

b This symbol represents the time of day during the House proceedings, e.g., b 1407 is 2:07 p.m. Matter set in this typeface indicates words inserted or appended, rather than spoken, by a Member of the House on the floor.

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VerDate Jan 31 2003 23:45 Jul 07, 2003 Jkt 019060 PO 00000 Frm 00001 Fmt 7634 Sfmt 0634 E:\CR\FM\A07JY7.000 H07PT1 H6268 CONGRESSIONAL RECORD — HOUSE July 7, 2003 COMMUNICATION FROM THE the House of the following titles, which ‘‘Dr. Caesar A.W. Clark, Sr. Post Office CLERK OF THE HOUSE were thereupon signed by the Speaker: Building’’. H.R. 2030. To designate the facility of the H.R. 2350. An act to reauthorize the Tem- The SPEAKER pro tempore laid be- United States Postal Service located at 120 porary Assistance for Needy Families block fore the House the following commu- Baldwin Avenue in Paia, Maui, Hawaii, as grant program through fiscal year 2003, and nication from the Clerk of the House of the ‘‘Patsy Takemoto Mink Post Office for other purposes. Building’’. Representatives: H.R. 2474. An act to authorize the Congres- OFFICE OF THE CLERK, sional Hunger Center to award Bill Emerson f HOUSE OF REPRESENTATIVES, and Mickey Leland Hunger Fellowships for ADJOURNMENT Washington, DC, June 27, 2003. fiscal years 2003 and 2004. Hon. J. DENNIS HASTERT, f Mr. WOLF. Mr. Speaker, I move that Speaker, House of Representatives, the House do now adjourn. Washington, DC. BILLS PRESENTED TO THE The motion was agreed to; accord- DEAR MR. SPEAKER: Pursuant to the per- PRESIDENT mission granted in Clause 2(h) of Rule II of ingly (at 2 o’clock and 8 minutes p.m.), the Rules of the U.S. House of Representa- Jeff Trandahl, Clerk of the House re- under its previous order, the House ad- tives, the Clerk received the following mes- ports that on June 30, 2003 he presented journed until tomorrow, Tuesday, July sage from the Secretary of the Senate on to the President of the United States, 8, 2003, at 10:30 a.m., for morning hour June 27, 2003 at 5:06 p.m. for his approval, the following bills. debates. That the Senate passed without amend- H.R. 2350. To reauthorize the Temporary ment H.R. 2350. f That the Senate passed without amend- Assistance for Needy Families block grant program through fiscal year 2003, and for EXECUTIVE COMMUNICATIONS, ment H.R. 2474. ETC. With best wishes, I am other purposes. Sincerely, Jeff Trandahl, Clerk of the House re- Under clause 8 of rule XII, executive DANIEL STRODEL, ports that on July 2, 2003 he presented communications were taken from the Assistant to the Clerk. to the President of the United States, Speaker’s table and referred as follows: f for his approval, the following bills. 2937. A letter from the transmitting a pro- ANNOUNCEMENT BY THE SPEAKER H.R. 825. To redesignate the facility of the posed emergency supplemental appropriations request totaling $32.2 mi million for fis- PRO TEMPORE United States Postal Service located at 7401 West 100th Place in Bridgeview, Illinois, as cal year 2003 to fund non-recurring expenses The SPEAKER pro tempore. Pursu- the ‘‘Michael J. Healy Post Office Building’’. associated with new Article III judgeships ant to clause 4 of rule I, Speaker pro H.R. 917. To designate the facility of the and to pay for higher than anticipated tempore TOM DAVIS of Virginia signed United States Postal Service located at 1830 Criminal Justice Act representations and the following enrolled bills on Monday, South Lake Drive in Lexington, South Caro- juror days; to the Committee on Appropria- tions. June 30, 2003: lina, as the ‘‘Floyd Spence Post Office Build- ing’’. 2938. A letter from the Principal Deputy H.R. 2350, to reauthorize the Temporary H.R. 925. To redesignate the facility of the Under Secretary, Department of Defense, Assistance for Needy Families block grant United States Postal Service located at 1859 transmitting a report entitled ‘‘Interim Re- program through fiscal year 2003, and for South Ashland Avenue in Chicago, Illinois, port to Congress on Corrosion Matters in the other purposes; as the ‘‘Cesar Chavez Post Office’’. Department of Defense’’ May 2003, pursuant H.R. 2474, to authorize the Congressional H.R. 981. To designate the facility of the to 10 U.S.C. 2228 (1067) (c) Public Law 107— Hunger Center to award Bill Emerson and United States Postal Service located at 141 314; to the Committee on Armed Mickey Leland Hunger Fellowships for fiscal Erie Street in Linesville, Pennsylvania, as 2939. A letter from the Deputy Secretary, years 2003 and 2004. the ‘‘James R. Merry Post Office’’. Department of Defense, transmitting he De- f H.R. 985. To designate the facility of the partment’s certification that the costs of Wedges 2 through 5, of the Pentagon Renova- HOUR OF MEETING ON TOMORROW United States Postal Service located at 111 West Washington Street in Bowling Green, tion will be within the specified limitation; Mr. WOLF. Mr. Speaker, I ask unani- Ohio, as the ‘‘Delbert L. Latta Post Office to the Committee on Armed Services. mous consent that when the House ad- Building’’. 2940. A letter from the Assistant General journs today it adjourn to meet at 10:30 H.R. 1055. To designate the facility of the Counsel for Regulations, Department of a.m. tomorrow for morning hour de- United States Postal Service located at 1901 Housing and Urban Development, transmit- bates. West Evans Street in Florence, South Caro- ting the Department’s final rule — Open Competition and Government Neutrality To- The SPEAKER pro tempore. Is there lina, as the ‘‘Dr. Roswell N. Beck Post Office Building’’. wards Government Contractors’ Labor Rela- objection to the request of the gen- H.R. 2474. To authorize the Congressional tions on Federal and Federally Funded Con- tleman from Virginia? Hunger Center to award Bill Emerson and struction Projects [Docket No. FR-4695-I-01] There was no objection. Mickey Leland Hunger Fellowships for fiscal (RIN: 2501-AC98) received June 5, 2003, pursu- f years 2003 and 2004. ant to 5 U.S.C. 801(a)(1)(A); to the Committee Jeff Trandahl, Clerk of the House re- on Financial Services. CORRECTION TO THE CONGRES- 2941. A letter from the Board of Governors, SIONAL RECORD OF THURSDAY, ports that on July 3, 2003 he presented Federal Reserve System, transmitting the JUNE 26, 2003, AT PAGE H6259 to the President of the United States, thirteenth annual report on the Profitability for his approval, the following bills. of Credit Card Operations of Depository In- H.R. 1368. To designate the facility of the stitutions, pursuant to 15 U.S.C. 1637 note. ADJOURNMENT United States Postal Service located at 7554 Public Law 100—583, section 8 (102 Stat. 2969); Pacific Avenue in Stockton, California, as to the Committee on Financial Services. Mr. DELAY. Mr. Speaker, I move the ‘‘Norman D. Shumway Post Office Build- 2942. A letter from the General Counsel, that the House do now adjourn. ing’’. National Credit Union Administration, The motion was agreed to. H.R. 1465. To designate the facility of the transmitting the Administration’s final rule f United States Postal Service located at 4832 — Rules of NCUA Board Procedure; Promul- gation of NCUA Rules and Regulations; Pub- SENATE BILL REFERRED East Highway 27 in Iron Station, North Caro- lina, as the ‘‘General Charles Gabriel Post lic Observance of NCUA Board Meetings — A bill of the Senate of the following Office’’. received June 24, 2003, pursuant to 5 U.S.C. title was taken from the Speaker’s H.R. 1596. To designate the facility of the 801(a)(1)(A); to the Committee on Financial table and, under the rule, referred as United States Postal Service located at 2318 Services. follows: Woodson Road in St. Louis, Missouri, as the 2943. A letter from the General Counsel, ‘‘Timothy Michael Gaffney Post Office National Credit Union Administration, S. 148. An act to provide for the Secretary Building’’. transmitting the Administration’s final rule of Homeland Security to be included in the H.R. 1609. To redesignate the facility of the — Involuntary Liquidation of Federal Credit line of Presidential succession; to the Com- United States Postal Service located at 201 Unions and Adjudication of Creditor Claims mittee on the Judiciary. West Boston Street in Brookfield, Missouri, Involving Federally Insured Credit Unions in f as the ‘‘Admiral Donald Davis Post Office Liquidation — received June 24, 2003, pursu- ENROLLED BILLS SIGNED Building’’. ant to 5 U.S.C. 801(a)(1)(A); to the Committee H.R. 1704. To designate the facility of the on Financial Services. Mr. Trandahl, Clerk of the House, re- United States Postal Service located at 1502 2944. A letter from the Director, OSHA ported and found truly enrolled bills of East Kiest Boulevard in Dallas, Texas, as the Standards and Guidance, Department of

VerDate Jan 31 2003 00:53 Jul 08, 2003 Jkt 019060 PO 00000 Frm 00002 Fmt 7634 Sfmt 0634 E:\CR\FM\K07JY7.004 H07PT1 July 7, 2003 CONGRESSIONAL RECORD — HOUSE H6269 Labor, transmitting the Department’s final copy of D.C. ACT 15-101, ‘‘Dedication and received June 20, 2003, pursuant to 5 U.S.C. rule — Powered Industrial Trucks — received Designation of Commodore Joshua Barney 801(a)(1)(A); to the Committee on Resources. June 16, 2003, pursuant to 5 U.S.C. Drive, N.E., Fort Lincoln Drive, N.E., and 2967. A letter from the Secretary, Depart- 801(a)(1)(A); to the Committee on Education Lincoln Drive North, N.E., Act of ment of Health and Human Services, trans- and the Workforce. 2003’’received July 7, 2003, pursuant to D.C. mitting the annual report on the Refugee 2945. A letter from the Director, Regula- Code section 1—233(c)(1); to the Committee Resettlement Program for FY 2001, pursuant tions Policy and Management Staff, FDA, on Government Reform. to 8 U.S.C. 1523(a); to the Committee on the Department of Health and Human Services, 2956. A letter from the Chairman, Council Judiciary. transmitting the Department’s final rule — of the District of Columbia, transmitting a 2968. A letter from the Assistant Secretary, Medical Devices; Designation of Special Con- copy of D.C. ACT 15-100, ‘‘Lead-Based Paint Department of Labor, transmitting the De- trol for Eight Surgical Suture Devices Abatement and Control Temporary Amend- partment’s final rule — Procedures for the [Docket No. 02N-0288] received June 24, 2003, ment Act of 2003’’ received July 7, 2003, pur- Handling of Discrimination Complaints pursuant to 5 U.S.C. 801(a)(1)(A); to the Com- suant to D.C. Code section 1—233(c)(1); to the Under Section 806 of the Corporate and mittee on Energy and Commerce. Committee on Government Reform. Criminal Fraud Accountability Act of 2002, 2946. A letter from the Director, Regula- 2957. A letter from the Chairman, Council Title VIII of the Sarbanes-Oxley Act of 2002 tions Policy and Management Staff, FDA, of the District of Columbia, transmitting a (RIN: 1218-AC10) received June 6, 2003, pursu- Department of Health and Human Services, copy of D.C. ACT 15-99, ‘‘Honoraria Tem- ant to 5 U.S.C. 801(a)(1)(A); to the Committee transmitting the Department’s final rule — porary Amendment Act of 2003’’ received on the Judiciary. Public Information Regulations [Docket No. July 7, 2003, pursuant to D.C. Code section 2969. A letter from the Cheif, Regulations 99N-2637] received June 12, 2003, pursuant to 1—233(c)(1); to the Committee on Govern- and Administrative Law, USCG, Department 5 U.S.C. 801(a)(1)(A); to the Committee on ment Reform. of Homeland Security, transmitting the De- Energy and Commerce. 2958. A letter from the Senior Staff Attor- partment’s final rule — Licensing and Man- 2947. A letter from the Director, Regula- ney, Court of Appeals For the First Circuit, ning for Officers of Towing Vehicles [USCG tions Policy and Management Staff, FDA, transmitting the opinion from Sunday Dixon 1999-6224] (RIN: 1625-AA15) received June 13, Department of Health and Human Services, Orekoya v. James Mooney, No. 02-1306 (1st 2003, pursuant to 5 U.S.C. 801(a)(1)(A); to the transmitting the Department’s final rule — Cir. May 15, 2003); to the Committee on Gov- Committee on Transportation and Infra- Skin Protectant Drug Products for Over-the- ernment Reform. structure. Counter Human Use; Final Monograph 2959. A letter from the Chief, Regulations 2970. A letter from the Chief, Regulations [Docket Nos. 78N-0021 and 78N-021P] (RIN: Branch, Department of Homeland Security, and Administrative Law, USCG, Department 0910-AA01) received June 24, 2003, pursuant to transmitting the Department’s final rule — of Homeland Security, transmitting the De- 5 U.S.C. 801(a)(1)(A); to the Committee on Confidentiality of Commercial Information partment’s final rule — Drawbridge Oper- Energy and Commerce. [CBP Decision 03-02] (RIN: 1515-AD29) re- ation Regulations; Illinois Waterway, 2948. A letter from the Assistant Secretary ceived June 20, 2003, pursuant to 5 U.S.C. Beardstown, IL [CGD08-03-025] received June for Legislative Affairs, Department of State, 801(a)(1)(A); to the Committee on Govern- 13, 2003, pursuant to 5 U.S.C. 801(a)(1)(A); to transmitting the Department’s report enti- ment Reform. the Committee on Transportation and Infra- tled, ‘‘Fleet Alternative Fuel Vehicles Pro- 2960. A letter from the Secretary, Depart- structure. gram Report for Fiscal Year 2002’’ April 30, ment of Homeland Security, transmitting 2971. A letter from the Chief, Regulations 2003, pursuant to Public Law 105—388; to the the semiannual report of the Inspector Gen- and Administrative Law, USCG, Department Committee on Energy and Commerce. eral for the period October 1, 2003 through of Homeland Security, transmitting the De- 2949. A letter from the Director, Office of Congressional Affairs, Nuclear Regulatory March 31, 2003, pursuant to Public Law 95— partment’s final rule — Safety Zone; Ohio Commission, transmitting the Commission’s 452, section 5(b) (102 Stat. 2526); to the Com- River Miles 466.8 to 470.5, Cincinnati, OH final rule — Event Notification Require- mittee on Government Reform. [COTP Louisville-02-011] (RIN: 2115-AA97) re- 2961. A letter from the Director, Regula- ments (RIN: 3150-AG90) received June 12, ceived May 15, 2003, pursuant to 5 U.S.C. tions Managment, Department of Veterans 2003, pursuant to 5 U.S.C. 801(a)(1)(A); to the 801(a)(1)(A); to the Committee on Transpor- Committee on Energy and Commerce. Affairs, transmitting the Department’s final tation and Infrastructure. 2950. A communication from the President rule — Privacy Act of 1974; Implementation- 2972. A letter from the Chief, Regulations of the United States, transmitting a 6-month -Exemption of Police and Security Records and Administrative Law, USCG, Department periodic report on the national emergency (RIN: 2900-AL33) received June 12, 2003, pur- of Homeland Security, transmitting the De- with respect to Libya that was declared in suant to 5 U.S.C. 801(a)(1)(A); to the Com- partment’s final rule — Safety Zone: 2002 Executive Order 12543 of January 7, 1986, pur- mittee on Government Reform. West Palm Holiday Boat Parade, Intra- suant to 50 U.S.C. 1641(c) and 50 U.S.C. 2962. A letter from the Managing Director, coastal Waterway, West Palm Beach, FL 1703(c); (H. Doc. No. 108—88); to the Com- Federal Home Loan Banks, transmitting the [COTP Miami 02-136] (RIN: 2115-AA97) re- mittee on International Relations and or- 2002 management reports of the 12 Federal ceived May 15, 2003, pursuant to 5 U.S.C. dered to be printed. Home Loan Banks (FHLBanks), Resolution 801(a)(1)(A); to the Committee on Transpor- 2951. A communication from the President Funding Corporation (REFCORP) and the Fi- tation and Infrastructure. of the United States, transmitting a 6-month nancing Corporation (FICO), pursuant to 31 2973. A letter from the Chief, Regulations periodic report on the national emergency U.S.C. 9106; to the Committee on Govern- and Administrative Law, USCG, Department with respect to the proliferation of weapons ment Reform. of Homeland Security, transmitting the De- of mass destruction that was declared in Ex- 2963. A letter from the Chairman, Federal partment’s final rule — Safety Zone: ecutive Order 12938 of November 14, 1994, pur- Maritime Commission, transmitting the Winterfest Boat Parade Fireworks, Intra- suant to 50 U.S.C. 1703(c) and 50 U.S.C. Commission’s semiannual report on the ac- coastal Waterway, Ft. Lauderdale, FL [COTP 1641(c); (H. Doc. No. 108—92); to the Com- tivities of the Office of Inspector General for Miami 02-140] (RIN: 2115-AA97) received May mittee on International Relations and or- the period October 31, 2002 to March 31, 2003, 15, 2003, pursuant to 5 U.S.C. 801(a)(1)(A); to dered to be printed. pursuant to 5 U.S.C. app. (Insp. Gen. Act) the Committee on Transportation and Infra- 2952. A letter from the Deputy Director, section 8G(h)(2); to the Committee on Gov- structure. Defense Security Cooperation Agency, trans- ernment Reform. 2974. A letter from the Chief, Regulations mitting the Department of the Defense’s pro- 2964. A letter from the Secretary, Federal and Administrative Law, USCG, Department posed lease of defense articles to the Govern- Trade Commission, transmitting the Com- of Homeland Security, transmitting the De- ment of Singapore (Transmittal No. 03-03), mission’s final rule — Final notice of new partment’s final rule — Safety Zone; Black pursuant to 22 U.S.C. 2796a(a); to the Com- Privacy Act system of records [Billing Code: Warrior River, Walker County, AL [COTP mittee on International Relations. 6750-01P] received June 23, 2003, pursuant to 5 Mobile-02-023] (RIN: 2115-Aa97) received May 2953. A letter from the Chief Counsel, For- U.S.C. 801(a)(1)(A); to the Committee on Gov- 15, 2003, pursuant to 5 U.S.C. 801(a)(1)(A); to eign Assets Control, Department of the ernment Reform. the Committee on Transportation and Infra- Treasury, transmitting the Department’s 2965. A letter from the Director, Office of structure. final rule — Iraqi Sanctions Regulations; Au- Surface Mining, Department of the Interior, 2975. A letter from the Chief, Regulations thorization of Certain New Transactions — transmitting the Department’s final rule — and Administrative Law, USCG, Department received June 23, 2003, pursuant to 5 U.S.C. West Virginia Regulatory Program [WV-097- of Homeland Security, transmitting the De- 801(a)(1)(A); to the Committee on Inter- FOR] received June 24, 2003, pursuant to 5 partment’s final rule — Safety Zone; national Relations. U.S.C. 801(a)(1)(A); to the Committee on Re- Tchefuncte River, Mile Marker 1.0 to 3.0, 2954. A letter from the Chairman, Council sources. Madisonville, Louisiana [COTP New Orleans- of the District of Columbia, transmitting a 2966. A letter from the Acting Assistant 02-023] (RIN: 2115-AA97) received May 15, 2003, copy of D.C. ACT 15-106, ‘‘Fiscal Year 2004 Administrator, Nation Oceanic and Atmos- pursuant to 5 U.S.C. 801(a)(1)(A); to the Com- Budget Support Act of 2003’’ received July 7, pheric Administration, transmitting the Ad- mittee on Transportation and Infrastruc- 2003, pursuant to D.C. Code section 1— ministration’s final rule — Announcement of ture. 233(c)(1); to the Committee on Government Funding Opportunity to submit proposals for 2976. A letter from the Chief, Regulations Reform. the South Florida Ecosystem Research and and Administrative Law, USCG, Department 2955. A letter from the Chairman, Council Monitoring Program (SFP) FY04 [Docket No. of Homeland Security, transmitting the De- of the District of Columbia, transmitting a 000202024-3109-03 I.D. 030303B] (RIN: 0648-ZA79) partment’s final rule — Safety Zone; South

VerDate Jan 31 2003 23:45 Jul 07, 2003 Jkt 019060 PO 00000 Frm 00003 Fmt 7634 Sfmt 0634 E:\CR\FM\L07JY7.000 H07PT1 H6270 CONGRESSIONAL RECORD — HOUSE July 7, 2003 Shore, Lake Pontchartrain, New Orleans, LA prises in Department of Transportation Fi- 2997. A letter from the Chief, Regulations [COTP New Orleans-02-024] (RIN: 2115-AA97) nancial Assistance Programs [Docket OST- Unit, Internal Revenue Service, transmitting received May 15, 2003, pursuant to 5 U.S.C. 2000-7639 & OST-2000-7640] (RIN: 2105-AC89) re- the Service’s final rule — Update of Rev. 801(a)(1)(A); to the Committee on Transpor- ceived June 9, 2003, pursuant to 5 U.S.C. Proc. 96-30 (Rev. Proc. 2003-48) received June tation and Infrastructure. 801(a)(1)(A); to the Committee on Transpor- 24, 2003, pursuant to 5 U.S.C. 801(a)(1)(A); to 2977. A letter from the Chief, Regulations tation and Infrastructure. the Committee on Ways and Means. and Administrative Law, USCG, Department 2987. A letter from the Counsel for NIST, 2998. A letter from the Chief, Regulations of Homeland Security, transmitting the De- Department of Commerce, transmitting the Unit, Internal Revenue Service, transmitting partment’s final rule — Safety Zone; Department’s final rule — Procedures for Im- the Service’s final rule — 2003 Section 43 In- Ouachita River, Miles 165.0 to 168.0, Monroe, plementation of the National Construction flation Adjustment (Notice 2003-43) received LA [COTP New Orleans-02-026] (RIN: 2115- Safety Team Act [Docket No. 021224331-2331- June 24, 2003, pursuant to 5 U.S.C. AA97) received May 15, 2003, pursuant to 5 01] (RIN: 0693-AB52) received June 17, 2003, 801(a)(1)(A); to the Committee on Ways and U.S.C. 801(a)(1)(A); to the Committee on pursuant to 5 U.S.C. 801(a)(1)(A); to the Com- Means. Transportation and Infrastructure. mittee on Science. 2999. A letter from the Chief, Regulations 2978. A letter from the Chief, Regulations 2988. A letter from the Counsel for NIST, Unit, Internal Revenue Service, transmitting and Administrative Law, USCG, Department Department of Commerce, transmitting the the Service’s final rule — 2003 Marginal Pro- of Homeland Security, transmitting the De- Department’s final rule — Procedures for Im- duction Rates (Notice 2003-44) received June partment’s final rule — Safety Zone; Red plementation of the National Construction 24, 2003, pursuant to 5 U.S.C. 801(a)(1)(A); to River, Miles 87.0 to 90.0, Pineville, LA [COTP Safety Team Act [Docket No. 021224331-3093- the Committee on Ways and Means. New Orleans-02-027] (RIN: 2115-AA97) received 03] (RIN: 0693-AB52) received June 17, 2003, 3000. A letter from the Chief, Regulations May 15, 2003, pursuant to 5 U.S.C. pursuant to 5 U.S.C. 801(a)(1)(A); to the Com- Unit, Internal Revenue Service, transmitting 801(a)(1)(A); to the Committee on Transpor- mittee on Science. the Service’s final rule — Assumption of tation and Infrastructure. 2989. A letter from the Assistant Adminis- Partner Liabilities [TD 9062] (RIN: 1545-BB83) 2979. A letter from the Chief, Regulations trator for Procurement, National Aero- received June 24, 2003, pursuant to 5 U.S.C. and Administrative Law, USCG, Department nautics and Space Administration, transmit- 801(a)(1)(A); to the Committee on Ways and of Homeland Security, transmitting the De- ting the Administration’s final rule — NASA Means. 3001. A letter from the Chief, Regulations partment’s final rule — Safety Zone; Ohio Grant and Cooperative Agreement Handbook Unit, Internal Revenue Service, transmitting River, Mile Marker 934.0 to 936.0, Paducah, — Incremental Funding (RIN: 2700-AC53) re- the Service’s final rule — Guidance Regard- Kentucky [COTP Paducah, KY 02-010] (RIN: ceived June 5, 2003, pursuant to 5 U.S.C. ing Election Under Section 953(d) (Rev. Proc. 2115-AA97) received May 15, 2003, pursuant to 801(a)(1)(A); to the Committee on Science. 2003-47) received June 24, 2003, pursuant to 5 5 U.S.C. 801(a)(1)(A); to the Committee on 2990. A letter from the Assistant Adminis- U.S.C. 801(a)(1)(A); to the Committee on Transportation and Infrastructure. trator for Procurement, National Aero- Ways and Means. 2980. A letter from the Chief, Regulations nautics and Space Administration, transmit- 3002. A letter from the Chief, Regulations and Administrative Law, USCG, Department ting the Administration’s final rule — NASA Unit, Internal Revenue Service, transmitting of Homeland Security, transmitting the De- Grant and Cooperative Agreement Hand- the Service’s final rule — Determination of partment’s final rule — Safety Zone; book-Unsolicited Proposals — received June Issue Price in the Case of Certain Debt In- Alleghany River Mile Marker 0.3 to Mile 24, 2003, pursuant to 5 U.S.C. 801(a)(1)(A); to struments Issued for Property (Rev. Rul. Marker 0.6, Pittsburgh, Pennsylvania [COTP the Committee on Science. 2003-71) received June 24, 2003, pursuant to 5 2991. A letter from the Deputy General Pittsburgh-02-025] (RIN: 2115-AA97) received U.S.C. 801(a)(1)(A); to the Committee on Counsel, Small Business Administration, May 15, 2003, pursuant to 5 U.S.C. Ways and Means. 801(a)(1)(A); to the Committee on Transpor- transmitting the Administration’s final rule 3003. A letter from the Cheif, Regulations tation and Infrastructure. — Small Business Size Standards; Forest Unit, Internal Revenue Service, transmitting 2981. A letter from the Chief, Regulations Fire Suppression and Fuels Management the Service’s final rule — Capital Allocation and Administrative Law, USCG, Department Services (RIN: 3245-AE89) received June 24, Ruling (Rev. Rul. 2003-75) received June 24, of Homeland Security, transmitting the De- 2003, pursuant to 5 U.S.C. 801(a)(1)(A); to the 2003, pursuant to 5 U.S.C. 801(a)(1)(A); to the partment’s final rule — Safety Zone; Cooper Committee on Small Business. Committee on Ways and Means. River, Port of Charleston, South Carolina 2992. A letter from the Director, Regula- 3004. A letter from the Deputy Secretary, [COTP Charleston-02-142] (RIN: 2115-AA97) re- tions Management, Department of Veterans Department of Defense, transmitting notifi- ceived May 15, 2003, pursuant to 5 U.S.C. Affairs, transmitting the Department’s final cation of a payment to the Czech Republic 801(a)(1)(A); to the Committee on Transpor- rule — Increase in Rates Payable Under the Government in the amount of $0.930 million tation and Infrastructure. Montgomery GI Bill--Active Duty and Sur- to reimburse it for military support provided 2982. A letter from the Chief, Regulations vivors’ and Dependents’ Educational Assist- to U.S. military operations in connection and Administrative Law, USCG, Department ance Program (RIN: 2900-AL17) received June with the global war on terrorism (GWOT); of Homeland Security, transmitting the De- 9, 2003, pursuant to 5 U.S.C. 801(a)(1)(A); to jointly to the Committees on Armed Serv- partment’s final rule — Safety Zone; Navy the Committee on Veterans’ Affairs. ices and Appropriations. Pier, Lake Michigan, Chicago Harbor, IL 2993. A letter from the Director, Regula- 3005. A letter from the Director, Financial [CGD09-02-527] (RIN: 2115-AA97) received May tions Management, Department of Veterans Management and Assurance, General Ac- 15, 2003, pursuant to 5 U.S.C. 801(a)(1)(A); to Affairs, transmitting the Department’s final counting Office, transmitting a report enti- the Committee on Transportation and Infra- rule — Veterans Education: Additional Op- tled, ‘‘Financial Audit: Capitol Preservation structure. portunity to Participate in the Montgomery Fund’s Fiscal Years 2002 and 2001 Financial 2983. A letter from the Paralegal, FTA, De- GI Bill and Other Miscellaneous Issues (RIN: Statements,’’ pursuant to 40 U.S.C. 188a—3; partment of Transportation, transmitting 2900-AK81) received June 9, 2003, pursuant to jointly to the Committees on House Admin- the Department’s final rule — Bus Testing 5 U.S.C. 801(a)(1)(A); to the Committee on istration and Government Reform. [FTA Docket No. 98-B] (RIN: 2132-AA30) re- Veterans’ Affairs. 3006. A communication from the President ceived June 9, 2003, pursuant to 5 U.S.C. 2994. A letter from the Federal Register of the United States, transmitting notifica- 801(a)(1)(A); to the Committee on Transpor- Certifying Officer, FMS, Department of the tion of changes to existing law required to tation and Infrastructure. Treasury, transmitting the Department’s bring the United States into Compliance 2984. A letter from the Paralegal, FTA, De- final rule — Federal Government Participa- with Obligations under the United States- partment of Transportation, transmitting tion in the Automated Clearing House (RIN: Chile Free Trade Agreement, pursuant to the Department’s final rule — Buy America 1510-AA89) received June 12, 2003, pursuant to Public Law 107—210, section 2105 (a)(1)(B); (H. Requirements; Amendment to Certification 5 U.S.C. 801(a)(1)(A); to the Committee on Doc. No. 108—90); jointly to the Committees Procedures [FTA Docket No. FTA-98-4454] Government Reform. on Ways and Means and the Judiciary, and (RIN: 2132-AA62) received June 9, 2003, pursu- 2995. A letter from the Regulations Coordi- ordered to be printed. ant to 5 U.S.C. 801(a)(1)(A); to the Committee nator, Department of Health and Human 3007. A communication from the President on Transportation and Infrastructure. Services, transmitting the Department’s of the United States, transmitting notifica- 2985. A letter from the Acting Director, De- final rule — Child Support Enforcement Pro- tion of changes to existing law required to partment of Transportation, transmitting gram Federal Tax Refund Offset — received bring the United States into Compliance the Department’s final rule — Procedures for June 25, 2003, pursuant to 5 U.S.C. with obligations under the United States- Transportation Workplace Drug and Alcohol 801(a)(1)(A); to the Committee on Ways and Singapore Free Trade Agreement, pursuant Testing Programs [Docket OST-2003-15245] Means. to Public Law 107—210, section 2105 (a)(1)(B); (RIN: 2105-AD26) received June 9, 2003, pursu- 2996. A letter from the Chief, Regulations (H. Doc. No. 108—89); jointly to the Commit- ant to 5 U.S.C. 801(a)(1)(A); to the Committee Unit, Internal Revenue Service, transmitting tees on Ways and Means and the Judiciary, on Transportation and Infrastructure. the Service’s final rule — Bureau of Labor and ordered to be printed. 2986. A letter from the Deputy Assistant Statistics, Department Store Inventory 3008. A communication from the President General Counsel, Regulations and Enforce- Price Indexes by Department Groups (Rev. of the United States, transmitting a report ment, Department of Transportation, trans- Rul. 2003-68) received June 13, 2003, pursuant on progress made toward achieving bench- mitting the Department’s final rule — Par- to 5 U.S.C. 801(a)(1)(A); to the Committee on marks for a sustainable peace process in Bos- ticipation by Disadvantaged Business Enter- Ways and Means. nia and Herzegovina; (H. Doc. No. 108—91);

VerDate Jan 31 2003 23:45 Jul 07, 2003 Jkt 019060 PO 00000 Frm 00004 Fmt 7634 Sfmt 0634 E:\CR\FM\L07JY7.000 H07PT1 July 7, 2003 CONGRESSIONAL RECORD — HOUSE H6271

jointly to the Committees on International H.R. 2122. Referral to the Select Com- H.R. 122: Mr. REYES. Relations, Armed Services, and Appropria- mittee on Homeland Security extended for a H.R. 125: Mrs. TAUSCHER. tions and ordered to be printed. period ending not later than July 8, 2003. H.R. 169: Mr. FOLEY. f [The following action occurred on July 7, 2003] H.R. 241: Mr. FOLEY. H.R. 676: Mr. UDALL of New Mexico. H.R. 2330. Referral to the Committees on REPORTS OF COMMITTEES ON H.R. 779: Mr. WAXMAN. Ways and Means, Financial Services, and the PUBLIC BILLS AND RESOLUTIONS H.R. 811: Mr. KILDEE and Mrs. Judiciary for a period ending not later than CHRISTENSEN. Under clause 2 of rule XIII, reports of July 11, 2003. committees were delivered to the Clerk H.R. 873: Mr. HOEFFEL and Ms. ESHOO. f H.R. 941: Mr. CAPUANO for printing and reference to the proper H.R. 1068: Mr. ISSA, Mrs. MYRICK, and Mr. calendar, as follows: PUBLIC BILLS AND RESOLUTIONS JANKLOW. [The following action occurred on June 30, 2003] Under clause 2 of rule XII, H.R. 1130: Mr. MARSHALL. Mr. HUNTER: Committee on Armed Serv- Mr. CRENSHAW introduced A bill (H.R. H.R. 1162: Mr. ETHERIDGE. ices. H.R. 1950. A bill to authorize appropria- 2659) to require advance notification of Con- H.R. 1210: Mr. LEVIN, Ms. LEE, Mr. MATSUI, tions for the Department of State for the fis- gress regarding any action proposed to be and Mr. BROWN of Ohio. cal years 2004 and 2005, to authorize appro- taken by the Secretary of Veterans Affairs H.R. 1268: Mr. DAVIS of Alabama. priations under the Arms Export Control Act in the implementation of the Capital Asset H.R. 1442: Mr. SANDLIN, Mr. BERMAN, and and the Foreign Assistance Act of 1961 for se- Realignment for Enhanced Services initia- Mr. FOLEY. curity assistance for fiscal years 2004 and tive of the Department of Veterans Affairs, H.R. 1533: Mr. GONZALEZ, Mr. PAUL, Mr. 2005, and for other purposes; with amend- and for other purposes; which was referred to JONES of North Carolina, Mr. FRANK of Mas- ments (Rept. 108–105 Pt. 3). Ordered to be the Committee on Veterans’ Affairs. sachusetts, Mr. HAYWORTH, and Mr. SHIMKUS. printed. H.R. 1589: Mr. SKELTON. Pursuant to the order of the House on June 26, f H.R. 1633: Mr. CASE, Ms. JACKSON-LEE of Texas, Mrs. CHRISTENSEN, Ms. HARMAN, Mr. 2003, the following report was filed on July 1, MEMORIALS 2003: SANDERS, Mr. FROST, Mr. EMANUEL, and Mr. Mr. KINGSTON: Committee on Appropria- Under clause 3 of rule XII, memorials CONYERS. tions. H.R. 2657. A bill making appropria- were presented and referred as follows: H.R. 1865: Mr. CLAY. H.R. 1943: Mr. NORWOOD. tions for the Legislative Branch for the fis- 135. The SPEAKER presented a memorial H.R. 2156: Ms. KAPTUR. cal year ending September 30, 2004, and for of the Senate of the State of Louisiana, rel- H.R. 2193: Mr. GEORGE MILLER of Cali- other purposes (Rept. 108–186). Referred to ative to Senate Resolution No. 57 memori- fornia, Mr. ACEVEDO-VILA, and Ms. ESHOO. the Committee of the Whole House on the alizing the Congress of the United States H.R. 2198: Mr. UDALL of Colorado. State of the Union. that the Senate of the Legislature of Lou- H.R. 2336: Mr. UPTON. (Pursuant to section 6 of House Resolution 299 isiana desires to clarify Senate Concurrent H.R. 2337: Mr. ENGLISH and Mrs. the following report was filed on July 2, 2003) Resolution No. 18 of the 2003 Regular Ses- CHRISTENSEN. Mr. LEWIS of California: Committee on sion, enrolled on May 8, 2003, that the Lou- H.R. 2409: Mr. DAVIS of Alabama. Appropriations. H.R. 2658. A bill making ap- isiana Legislature only supports the testing H.R. 2432: Mr. SCHROCK. propriations for the Department of Defense of imported seafood by the Federal Food and H.R. 2475: Mr. JANKLOW. for the fiscal year ending September 30, 2004, Drug Administration within the boundaries H.R. 2494: Mr. CONYERS and Mr. OTTER. and for other purposes (Rept. 108–187). Re- of the United States; to the Committee on H.R. 2524: Mr. GEORGE MILLER of California ferred to the Committee of the Whole House Agriculture. and Mr. NADLER. on the State of the Union. 136. Also, a memorial of the Senate of the H.R. 2569: Mr. BOSWELL, Mr. CROWLEY, Mr. State of Louisiana, relative to Senate Reso- DISCHARGE OF COMMITTEE EMANUEL, Mr. ABERCROMBIE, Mr. GREEN of lution No. 108 memorializing the Congress of [The following actions occurred on June 27, Texas, Mr. FROST, Mr. RODRIGUEZ, Mr. RAN- the United States to provide funding for the 2003] GEL, Ms. KAPTUR, Mr. HALL, Mr. BACA, Mr. Louisiana University of Medical Sciences, Pursuant to clause 2 of rule XIII the ALLEN, Mr. MCINTYRE, Mr. ETHERIDGE, Mr. Inc., College of Primary Care Medicine; to CARSON of Oklahoma, Ms. ROYBAL-ALLARD, Committee on Resources discharged the Committee on Education and the Work- Mr. PAYNE, Mr. COSTELLO, Mr. MCGOVERN, from further consideration. H.R. 238 re- force. Mr. OLVER, and Mr. GUTIERREZ. ferred to the Committee of the Whole 137. Also, a memorial of the Legislature of H.R. 2627: Mr. CANNON. House on the State of the Union. the State of Hawaii, relative to House Con- f current Resolution No. 26, HD1, memori- f alizing the United States Congress to edu- TIME LIMITATION OF REFERRED cate and sensitize members of Congress on PETITIONS, ETC. BILL the unfortunate circumstances of the intern- Under clause 3 of rule XII, Pursuant to clause 2 of rule XII the ment of civilians during World War II; to the Committee on the Judiciary. 21. The SPEAKER presented a petition of following action was taken by the Kenai Peninsula Borough, Alaska, relative f Speaker: to Resolution No. 2003–043 petitioning the [The following actions occurred on June 27, ADDITIONAL SPONSORS United States Congress to establish Kenai 2003] Peninsula Borough Policy in Defense of the H.R. 1562. Referral to the Committee on Under clause 7 of rule XII, sponsors Bill of Rights with respect to Federal Anti- Ways and Means extended for a period ending were added to public bills and resolu- Terrorism Acts, Legislation, and Orders; to not later than July 11, 2003. tions as follows: the Committee on the Judiciary.

VerDate Jan 31 2003 00:53 Jul 08, 2003 Jkt 019060 PO 00000 Frm 00005 Fmt 7634 Sfmt 0634 E:\CR\FM\L07JY7.000 H07PT1 E PL UR UM IB N U U S Congressional Record United States th of America PROCEEDINGS AND DEBATES OF THE 108 CONGRESS, FIRST SESSION

Vol. 149 WASHINGTON, MONDAY, JULY 7, 2003 No. 98 Senate The Senate met at 2 p.m. and was safe and restful period. As I announced Fourth, today we will begin to ad- called to order by the President pro before the recess, there will be no roll- dress the crisis of medical liability. tempore (Mr. STEVENS). call votes during today’s session. The Prior to the recess we attempted to next scheduled rollcall votes will begin reach consent to begin consideration of PRAYER tomorrow at 11:45 a.m. S. 11, the Patients First Act of 2003. We The Chaplain, Admiral Barry C. The first vote will be on the con- are in desperate need of medical liabil- Black, offered the following prayer: firmation of David Campbell to be a ity reform in this country, and now is U.S. District Judge for Arizona. The O God of new beginnings, giver of the time for us to act. Unfortunately, gifts and architect of opportunities, second vote will be invoking cloture on the nomination of Victor Wolski to be there was an objection prior to the re- You ride the wings of the wind and cess to proceeding to this bill. Today if even our secret thoughts are visible to a judge for the U.S. Court of Federal we are unable to reach that consent, it Your eyes. Before we speak, You hear. Claims. would be my intent to move to proceed And before we call, You answer. I would like to take a minute or two Lord, in the stillness of this moment, to talk about this month’s schedule. to that bill and file cloture on the mo- we thank You for Dr. Lloyd John We are now entering a very busy legis- tion if that is necessary. If that is the Ogilvie’s ministry. May his legacy of lative session for the Senate. There is case, the vote would occur on Wednes- faithfulness continue to bless us. much work to be done, and we have day of this week. Senator MCCONNELL Today deliver us from insulating only 4 weeks to do that. One major will be here later this afternoon to dis- privilege that obscures humanity’s focus for the Senate this month will be cuss the medical malpractice crisis. needs. As the Senate meets, give these the appropriations process. Senator Also this week we will consider other STEVENS will be working hard to pre- leaders the gift of discernment that authorization measures, including the pare the spending bills for floor action, they will know what matters most and State Department authorization. approve what is excellent. May they re- and we will be scheduling these for floor action throughout the month. Chairman LUGAR has indicated the bill member that with many advisors, will be ready for the floor this week. there is safety. In addition, this month we will com- We hope we will be able to complete ac- Lord, protect and sustain our troops plete consideration and passage of the tion on this important bill in a day or in harm’s way. Energy bill. Both consideration and Accept this our prayer in the name of passage will be before the August re- two. the One who fills our hearts with cess. I am committed, along with These are just a few of the issues we peace. Amen. Chairman DOMENICI, to pass an energy will be addressing during this legisla- bill that will enhance our country’s na- f tive session. A lot of that will be done tional energy security. There are many this week. To get our work done, it is PLEDGE OF ALLEGIANCE remaining amendments, as we all going to take the cooperation of all know, to debate and dispose of, but I do The Honorable TED STEVENS, a Sen- Senators. We will schedule these items want to be clear: We must pass a bill as ator from the State of Alaska, lead the for consideration from Monday through Pledge of Allegiance, as follows: soon as possible to establish a clear national energy policy which will reduce Friday. Having said that, I alert Mem- I pledge allegiance to the Flag of the bers they should prepare for full days United States of America, and to the Repub- our dependence on foreign oil. lic for which it stands, one nation under God, Third, we have a lot of remaining of voting that includes Mondays and indivisible, with liberty and justice for all. work to do on executive nominations, especially Fridays. That includes this Friday. Senators should arrange their f especially judicial nominations. I urge my colleagues again to allow the Sen- schedules accordingly and plan to be RECOGNITION OF THE MAJORITY ate to work its will on these nomina- here in the Senate each day of the LEADER tions and give them an up-or-down week unless I specifically say we are The PRESIDENT pro tempore. The vote. I will continue to schedule con- not having votes. majority leader. sideration of nominations as they be- I do want to thank my colleagues for come available with the hope that we f their attention and look forward to can move forward and give the individ- work together with them in a collabo- SCHEDULE uals their due process. Advice and con- Mr. FRIST. Mr. President, today the sent means allowing Senators an up-or- rative way in what will be a very busy Senate returns from the Fourth of July down vote on the President’s nomina- 4 weeks. recess, and I do hope everybody had a tions. I yield the floor.

∑ This ‘‘bullet’’ symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor.

S8869

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00001 Fmt 0624 Sfmt 0634 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8870 CONGRESSIONAL RECORD — SENATE July 7, 2003 RESERVATION OF LEADER TIME ing or very little. My own State, while with her. On a lot of issues I strongly The PRESIDING OFFICER (Mr. COR- the legislature wrestled with it, made disagreed with her. But she was quali- NYN). Under the previous order, the some progress but it has not been near- fied by education, experience, tempera- leadership time is reserved. ly enough. My friends in the bar say ment, and ethics. She had a right, I be- this is a States rights issue, more or lieve, to have an up-or-down vote. She f less. But in this case there is no ques- got one and she was confirmed, and I MORNING BUSINESS tion that this is driving up health care voted for her. The PRESIDING OFFICER. Under costs across the board. Doctors will tell On two of the other nominees, I be- the previous order, the Senate will you that they are ordering additional lieve for the Ninth Circuit, Berzon and begin a period of morning business procedures—defensive medicine, if you Paez, I felt very strongly that they with Senators permitted to speak will—and it is clearly affecting how should not be on that circuit court therein for up to 10 minutes each. much Medicare is costing. bench. But, again, they came through The Senator from Mississippi. I have heard astronomical numbers, the committee, we debated them on the floor, there was an attempted fili- f and I will verify them before I speak on this issue tomorrow or the next day as buster, which I opposed, and we voted MEDICAL LIABILITY REFORM to exactly how much the impact of this on them. I voted against them but they Mr. LOTT. Mr. President, I thank the excessive lawsuit activity against doc- got a vote. They were confirmed and distinguished leader for the informa- tors and the medical professions and they now serve on the judiciary. tion he has just given us about the the hospitals is driving up the cost of I think the leader has tried very dili- schedule for the month of July. Obvi- Medicare. There is no question—you gently to find a way to get away from ously, we do have a lot of important might say the States have a right to do these filibusters, even though we still work to do. Having dealt with the dif- this and can handle it, or tort reform, have two. I think we have had five or ficulties of having to put in full days, or product liability even; but in this six votes on cloture on Miguel Estrada, including votes on Mondays and Fri- case there is no question that it has a and I think we have had two on Pris- days, I know it is not always well re- Federal ramification that is costing us cilla Owen. But I hear there may be ceived. It has to be done in order to lots of money. filibusters on other qualified men and achieve these very important pieces of We are trying to do the right thing women, as well as the minorities that legislation that need to be acted on in for Medicare beneficiaries. We are try- are going to be affected by this—espe- July. ing to put prescription drugs in there cially in the case of Miguel Estrada. I especially thank the leader for but we need reform and we have to find So we have to find a way to get away from this. There is even talk now that going forward with the legislation on some ways to reduce the costs that are maybe we should have recess appoint- medical liability reform, the Patients being paid out by Medicare. This is one ments. I don’t think that is a good First Act. In my own State of Mis- way to do it. precedent either. I spoke against it on sissippi, we have a health care catas- I am excited that we are going for- the floor when President Clinton did it, trophe on our hands. Doctors are losing ward with this bill. I don’t know if we so how can I now say it is OK? But if their coverage. They are leaving the can get enough votes to stop a fili- we continue down this trail of filibus- State. And they are getting out of spe- buster but that is not the important tering judges, there will be a reaction. cialty services such as in the case of an thing. The important thing is that we There will have to be additional action. have a crisis developing in America in OB/GYN. They are getting out of ob- The leader has introduced a bill that stetrics. It is causing a huge problem health care delivery and the medical li- has been reported out of the Rules along the Mississippi gulf coast where ability area, and so I think we should Committee that would be very careful. we have over 500,000 people. We are take it up and let’s have the vote—and After 12 days, you could file cloture, down to three neurosurgeons. We did we may have to have more than one and then it would be 60 votes required; have seven. We have two fully staffed vote. the second cloture, 57; the third clo- trauma facilities in that area, only JUDICIAL NOMINATIONS ture, 54; and finally, only 51 after basi- two. And with only three doctors now, The other thing I want to do is pick cally what would take a full month. I on weekends we are really stretched up on what the leader said about judi- think that is a very long, protracted, very thin. If we lose one more neuro- cial nominations. I continue to be con- and unnecessary process but it, again, surgeon, we will not be able to keep cerned that we are in the process of shows good faith on the part of the those two trauma facilities operative. setting a precedent, where judges can leader to find a way to get ourselves We also have a problem in getting an be defeated by filibuster. That has not out of this precedent. adequate number of orthopedic sur- been the rule. That has not been done— I think we will all rue the day if we geons. As Dr. FRIST knows, you have to there is maybe one instance that you do this. Yes, we have all ramped up the have an orthopedic surgeon available can point to in 200 years. In that case, difficulty in confirming judges on both also for trauma services. We recently I think it is a very fragile argument be- sides with a number of men and attracted a doctor from St. Louis, MO cause the nominee, Abe Fortas, was de- women, perhaps unfairly. But we are who wanted to raise his family in a bated for only 10 days, and there were taking a huge leap and really under- smaller community. He is an out- ethical problems that developed and mining the process for confirming Fed- standing doctor. He was paying $70,000 his name was withdrawn. We didn’t do eral judges if we allow filibusters to a year for his medical liability insur- it during the Clinton years. stand. We must find a way in the next ance when he left St. Louis. He came to A lot of delays are involved when you couple of months to work through this. our State. Within 6 months his cov- are talking about how Senators react, I call on my colleagues on both sides of erage went up to $150,000 a year. This is and sending a blue slip to indicate the aisle, let’s let cooler heads prevail an African American doctor, highly their preference on judicial nomina- and pull back from this precipice that qualified, desperately needed there in tions, and there were concerns and a we are standing on and find a way to the Pascagoula-Moss Pt., MS area. I lot of problems. But not one time did give these judges an up-or-down vote. I am afraid he is not going to be able to we defeat a judge by filibuster. I had to believe we will be better as an institu- stay with that kind of problem. file cloture, I think, six or seven times tion and the judiciary will be better if This is a huge problem. Some of my but in each case we either vitiated it or we avoid this problem. friends I went to law school with are had a vote on cloture and then went I have been thinking about these saying: Let the States handle this straight to the vote. We completed ac- issues over the past week when I have problem. Some States have done a tion on those judges. been at home. I particularly was con- pretty good job. California has done an I don’t think we should have a litmus fronted everywhere I went with the exemplary job. I believe this legisla- test that involves one issue, or a few problem of doctors in my State of Mis- tion is pretty closely patterned after issues, because I make the case repeat- sissippi, and to be able to keep the doc- the California example. edly that I voted for Justice Ruth tors in practice, keep them from retir- Some States have done some good Bader Ginsburg, even though I knew ing and leaving the States, we must act work but other States have done noth- that philosophically I would not agree in this area.

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00002 Fmt 0624 Sfmt 0634 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8871 With that, I yield the floor and sug- House, to fashion a final product that Mr. FRIST. Mr. President, I ask gest the absence of a quorum. will be a resolution of the differences unanimous consent that the order for The PRESIDING OFFICER. The between that House and Senate bill. I the quorum call be rescinded. clerk will call the roll. am confident in that process we will The PRESIDING OFFICER (Mr. ROB- The assistant legislative clerk pro- have the same resolve and determina- ERTS). Without objection, it is so or- ceeded to call the roll. tion in meeting that goal, that we will dered. Mr. FRIST. Mr. President, I ask be able to bridge those differences, and f unanimous consent that the order for develop a strong bill that can be sup- the quorum call be rescinded. ported in a bipartisan way and signed PATIENTS FIRST ACT OF 2003— The PRESIDING OFFICER. Without by the President of the United States. MOTION TO PROCEED objection, it is so ordered. Both Chambers are committed to ac- Mr. FRIST. Mr. President, I ask f complishing this, to doing it right, and unanimous consent that the Senate to getting it done. now proceed to the consideration of BIPARTISAN MEDICARE REFORM PRESIDENTIAL TRIP TO AFRICA Calendar No. 186, S. 11, the Patients BILL I do want to comment on the Presi- First Act of 2003. Mr. FRIST. Mr. President, before we dent’s trip to Africa. I commend Presi- The PRESIDING OFFICER. Is there left for the Fourth of July recess, we dent Bush for his bold leadership and objection? passed historic legislation to improve his personal, as well as governmental— Mr. DURBIN. Mr. President, I object. Medicare, to strengthen Medicare, and meaning the Senate, the House, and The PRESIDING OFFICER. Objec- to offer for the first time a prescription the executive branch—commitment to tion is heard. drug benefit through the Medicare Pro- the pressing needs of Africa. President Mr. FRIST. Mr. President, with that gram for our seniors and individuals Bush will be leaving this afternoon for objection, I now move to proceed to S. with disabilities. We worked hard in Africa to see firsthand the opportuni- 11. I understand that Members on the that endeavor to produce a bipartisan ties, and indeed the challenges, that other side of the aisle are prepared to consensus, working together on both exist on that continent. debate the motion itself. The majority sides of the aisle, with this common Approximately once a year I have whip, Senator MCCONNELL, is prepared mission, this common goal, and we suc- had the opportunity, since being in the to open our debate on this issue as ceeded. Senate, to go to that continent, to a well. We were successful in passing a bi- range of countries, several of which he It would be my intent later today to partisan bill that for the first time will be going to. The countries I usu- file a cloture motion on the motion to since 1965, in the history of Medicare, ally go to are the Sudan, Kenya, Tan- proceed to this medical liabilities re- offers access to this new prescription zania, and Uganda. He will visit a form bill. This vote would then occur drug benefit, and at the same time re- range of other countries. on Wednesday of this week. I look for- forms, modernizes, and strengthens I think it is important for members ward to the very important debate on Medicare in a very significant way. of the executive branch as well as this truly national crisis, and I encour- Both individuals with disabilities and Members of this body and the House of age Members who want to speak to seniors collectively, 40 million people, Representatives to go firsthand and see come to the floor today. We will be de- will have health care coverage that in the ravages that occur as a product of bating this legislation today as well as the future will be responsive to their this little virus, HIV/AIDS, to see the tomorrow. We encourage Members to needs in order to achieve that goal of impact of malaria, to see the impact of come to the floor today. health care security after the age of 65 resistant tuberculosis and, at the same I yield the floor. or, if you are an individual with a dis- time, to look at the issues that sur- The PRESIDING OFFICER. The disability, in the near future. round the security of those nations as tinguished Senator from Kentucky is It is responsive to them directly but well as international security. recognized. also in a way that will allow the Medi- The President’s trip will highlight a Mr. MCCONNELL. Mr. President, care Program to take advantage of the positive, substantive agenda that the there is perhaps no more vexing chal- great innovations in technology, in administration has put on the table. lenge confronting this Congress than new prescription drugs that can make Part of that agenda and vision is this improving the quality and affordability people’s lives better, which will im- AIDS initiative which we addressed in of health care for all our citizens. prove the quality of life. the Senate a little over a month ago, a Just a few weeks ago, this Senate I mentioned the fact that this was bi- 5-year, $15 billion commitment that took historic action to strengthen and partisan legislation. I think it is im- this body passed and was ultimately modernize Medicare by providing sen- portant that we showed a spirit of co- signed by the President. This global iors new choices and adding a prescrip- operation in taking on an issue many HIV/AIDS initiative is the largest tion drug benefit. During the past year, people in the United States thought international public health initiative this Senate passed legislation to pro- would be too partisan and too political. on a single disease, a single entity, in vide new resources to the scientists at We addressed it in a bipartisan fashion the history of this country. the National Institutes of Health and I look forward to taking a delegation with the leadership of Chairman to strengthen our Nation’s defenses of U.S. Senators to Africa sometime in GRASSLEY and Senator BAUCUS in a against the threat of bioterrorism. August—next month—to advance our way that was reasoned, showed com- While we shouldn’t minimize the im- collective effort in this regard. mon sense, and that accomplished that As I mentioned earlier in opening the portance of these initiatives, the Sen- goal of significant modernization while Senate, we have a very challenging ate has not addressed one of the most at the same time adding a new benefit. month ahead with medical liability, fundamental problems limiting Amer- We identified the issue. We tackled it with energy, with the appropriations ican access to quality health care; that head on, and we delivered a bill that re- process, which will be well underway in is, reforming our Nation’s flawed med- flected the priorities of both sides of a few days, with the judicial nominees, ical liability system. the aisle. with State Department authorization. Our current medical liability system That demonstrated to me, and I There is a lot to accomplish. I am con- encourages excessive litigation, drives think to the American people, that fident we can meet the goals I set out up costs, and is literally scaring doc- even in a very evenly, closely divided this afternoon. I look forward to work- tors out of the medical profession. All Senate, if we share a common goal we ing with my colleagues to make this too often, these lawsuits result in exor- can indeed move America forward on one of the most productive sessions bitant judgments that benefit personal issues that are important to the Amer- thus far. injury lawyers more than they com- ican people. I suggest the absence of a quorum. pensate injured patients. I am pleased Coming back from recess, we will The PRESIDING OFFICER. The that the Senate will soon consider leg- very shortly begin the conference clerk will call the roll. islation, the Patients First Act, au- where once again both sides of the aisle The assistant legislative clerk pro- thored by Senator ENSIGN, to address will work together, the Senate and the ceeded to call the roll. many of these shortcomings.

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00003 Fmt 0624 Sfmt 0634 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8872 CONGRESSIONAL RECORD — SENATE July 7, 2003 As we debate this legislation over the Sierra Vista. When the newborn was institutions not only train our future next several days, Members will use not breathing, her levelheaded mother doctors, they also tackle many of the some complex actuarial terms such as cleared the child’s mouth and per- most difficult medical procedures. Ear- ‘‘combined loss ratios,’’ ‘‘asset alloca- formed CPR. After resuscitating the in- lier this year, the University of Louis- tion,’’ and ‘‘the McCarran-Ferguson fant, Melinda wrapped her in a sweater, ville Obstetrics Department was just Act’’ to illustrate their points. While and the new family completed the jour- days away from closure because it they may be important, I believe it is ney to Sierra Vista. Thankfully, both could not find insurance for its doctors. more important that we recognize this mother and daughter survived. How- As I travel through Kentucky, I am is a real crisis facing real families. ever, it is unacceptable that expectant approached frequently by doctors who Let’s look first at this photo of Tony mothers should be forced to drive past plead for reforms we are proposing and Leanne Dyess with their family. a perfectly good hospital and drive 45 today. Some have already packed up This picture was taken prior to July 5 miles through the desert to deliver a their practices and moved across the of last year. On that evening, Tony was child. river to Indiana, which has medical li- critically injured in a car accident Unfortunately, these are not isolated ability reforms. Many more doctors are while on his way home from work in anecdotes but just a few examples of thinking about following them. Gulfport, MS. Immediately after the the impact runaway litigation is hav- Kentucky is now one of these States crash, Tony was rushed to Garden Park ing on patients in every corner of our facing a medical liability crisis. So, Hospital, right there in Gulfport, suf- country. Patients across America— Mr. President, Kentucky now goes fering from serious brain injuries that from the Pacific Northwest to the from yellow to red. required immediate medical attention. Southeast, from New England to the Let’s talk about Connecticut. This Tragically, nearly all of the special- desert Southwest—are facing a medical year, 28 OB/GYNs in Connecticut an- ists capable of treating this type of liability crisis. nounced they could no longer afford to head injury had left Gulfport because As many of our colleagues will recall, deliver babies because of rising medical of the medical liability crisis and none I offered an amendment to the generic liability premiums. According to the was available to treat Tony Dyess. drug legislation just last year that in- Connecticut State Medical Society, Tony had to be airlifted to Univer- cluded some very modest medical li- each doctor would deliver approxi- sity Medical Center in Jackson, MS. ability reforms. During that debate, I mately 100 babies a year. This means Six excruciating hours passed before he called our colleagues’ attention to this that 2,800 Connecticut patients must received the surgery he needed to re- map produced by the American Medical now find new doctors because of the lieve the swelling in his brain. As Dr. Association. At that time, the AMA medical liability crisis. FRIST can explain to us, every minute had identified 12 States, those States Dr. Sally Crawford of Norwich, CT, is critical when treating patients who that are depicted on the map in red— provides a compelling example. She re- have experienced serious brain trauma. this was a little over a year ago—as ex- tired from medicine this year at age 55 While the doctors in Jackson saved periencing a medical liability crisis. because she could no longer afford her Tony’s life, they were unable—unable— The States shown on the map in yellow medical liability premiums. She had to prevent him from suffering perma- were ones at that time with significant never been sued, but her liability insur- nent brain damage. As a result, Tony problems which were nearing a crisis. ance premiums became so expensive, will require constant care and medical As I am about to illustrate, the situ- they cost her $124,000 a year. attention for the rest of his life. ation has grown worse in the past year. Dr. Jose Pecheco’s insurer stopped The Senate was fortunate to hear The AMA reports there are now 19 offering medical liability insurance, so from Leanne Dyess when she testified States experiencing a medical liability he shopped around for a new policy. before a joint HELP-Judiciary Com- crisis, with the addition of Wyoming When he learned that a new policy with mittee hearing on the medical liability just today. ‘‘tail’’ coverage would cost him $150,000 crisis earlier this year. I thank her for Unfortunately, my own State of Ken- a year, he did what Dr. Crawford did; her willingness to share her story with tucky is one of those States now facing he retired. the American people and ask unani- a medical liability crisis. Knox County Why are insurance premiums for doc- mous consent that her testimony be Hospital in Barbourville, KY, which is tors rising? They are rising because the printed in the RECORD following my rein the eastern part of our State, re- size of jury verdicts and settlements is marks. cently announced it would no longer rising at an alarming rate. According The PRESIDING OFFICER. Without deliver babies because its doctors could to the Hartford Courant, the average objection, it is so ordered. no longer handle the malpractice prepayment made of one of the State’s (See exhibit 1.) miums. The hospital averaged about major insurers to resolve claims in- Mr. MCCONNELL. Mr. President, 200 deliveries per year. These mothers- creased from $271,000 in 1995 to $536,000 let’s consider the case of Melinda to-be will now be forced to travel an in 2001. When so many experienced phy- Sallard. This is a picture of Melinda additional one-half hour through Ken- sicians such as these take early retire- Sallard and her daughter. They live in tucky’s mountain roads to the next ment or curtail services, it is not sur- Arizona. closest hospital. prising that the AMA has now des- In 2002, the administrators at Copper Not surprisingly, these expectant ignated Connecticut a crisis State. So Queen Community Hospital in Bisbee, mothers are upset. One mother-to-be Connecticut goes from yellow to red. AZ, were forced to close their mater- told the Lexington Herald Leader: ‘‘To Connecticut is now a State in crisis. nity ward because their doctors’ insur- have to see someone new at the last Let’s take a look at North Carolina. ance premiums had risen by 500 per- moment is just horrible. You develop a Time magazine recently featured the cent. close bond with your doctor, almost story of Dr. Mary-Emma Beres, a fam- A few months later, Melinda awoke like family. You don’t want a strang- ily practitioner in Sparta, NC, who had at 2 o’clock in the morning with sharp er.’’ always loved delivering babies. How- labor pains. Since her local hospital In another part of our State, Dr. ever, when she learned her malpractice stopped delivering babies because of Susan Coleman, up in Danville, was premiums were about to triple, she was the medical liability crisis, Melinda forced to give up delivering babies forced to give up her calling. Now Spar- and her husband were faced with a 45- after her premiums doubled from ta is left with one obstetrician for dif- mile drive to Sierra Vista in order to $44,000 a year to $105,000 a year—even ficult cases, and some women who need reach the nearest hospital with a ma- though she has never lost a jury ver- C-sections must now take a 40-minute ternity ward. As many of us who are dict or paid an out-of-court settlement. ambulance ride to the next nearest fa- parents know, babies do not always More than two-thirds—84 of 120—of cility. wait for the hospital, particularly Kentucky’s counties have either one or We have heard several examples when that hospital is almost an hour no obstetricians who will deliver ba- about escalating premiums that cause away. bies. some doctors to retire early, but what Melinda gave birth to her daughter in This crisis has hit Kentucky’s teach- impact is the medical liability crisis a car on a desert highway heading to ing hospitals as well. These valuable having on doctors at the beginning of

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00004 Fmt 0624 Sfmt 0634 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8873 their careers? The same article in Time problems, to red, indicating a State in State. If seriously injured patients features the story of Martin Palmeri, a crisis. need the trauma services of a neuro- medical student at East Carolina Uni- Next we turn north to Missouri. This surgeon, then they will have to travel versity. He had his heart set on a ca- April, St. Joseph Health Center in Kan- another 45 minutes to the next nearest reer in obstetrics, but after witnessing sas City was forced to close its trauma trauma center. a medical liability trial in North Caro- center when its neurosurgeons decided These problems are not confined to lina, he decided ‘‘the risks of the spe- to leave. Last April, Overland Park Re- Joliet. The Chicago Tribune reports cialty were greater than the rewards.’’ gional Medical Center in suburban that for specialties such as neuro- He is now considering a less risky spe- Kansas City closed the only trauma surgery and obstetrics, medical liabil- cialty. center ever in suburban Johnson Coun- ity rates have increased by more than The crisis has hit North Carolina ty, KS. This means residents of south- 100 percent and could climb even higher hospitals particularly hard. According ern Kansas City and the millions of later this year. So it is no wonder the to McNeary Healthcare Services, small motorists who pass through on I–35 or AMA has now observed that Illinois is rural hospitals in North Carolina expe- I–70 have limited access to a trauma experiencing a medical liability crisis. rienced an average increase in liability center in an emergency. Now critically Mr. President, I am sorry to say that premiums of 180 percent in 2002 alone. injured patients in Kansas City must this week the AMA added a 19th State The crisis is impacting patient access be transported to either the University to its list of States facing a medical li- to emergency care in Cabarrus County. of Kansas Medical Center or the Med- ability crisis. Dr. Willard Woods of The county’s Level III trauma center ical Center of Independence, but even Wheatland, WY, was forced to give up was facing possible closure this year that may not be for long. Because of delivering babies earlier this year. when its 17-member emergency medical exorbitant medical liability premiums, Throughout his career, he delivered group was faced with an 88-percent in- the two neurosurgeons who service the 2,500 babies, which is most of the young crease in premiums for reduced cov- Independence Medical Center are pack- people within Wheatland and the sur- erage. It is no wonder that North Caro- ing up their practice and moving on rounding communities. Dr. Woods described his situation in lina is facing a medical liability crisis, November 1. and North Carolina now moves from a But this crisis isn’t limited to just the Washington Post. He said: yellow State to a red State, a State in Missouri’s major cities. In May, Dr. I love delivering babies. I really love delivering the babies of women I delivered a cou- crisis. Julie Wood was forced to close her Like Kentucky and North Carolina, ple of decades ago. And I know this commu- rural family practice in Macon because nity needs an obstetrician. But you can’t the AMA has recently added Arkansas she could no longer afford her $71,000 practice without insurance. And I can’t get to its list of States facing a medical li- malpractice premium while treating coverage for deliveries anymore. ability crisis. In Ashdown, AK, the Medicare and Medicaid patients. Since Dr. Woods stopped delivering emergency room at the Little River Macon’s other two family doctors re- babies, mothers with complicated preg- Memorial Hospital was in danger of cently stopped delivering babies in nancies must now make the 3-hour closing when it could not find an insur- order to reduce their insurance pre- round trip to Cheyenne. Sadly, Wyo- ance carrier. It was only able to stay miums, making the nearest point of ming, too, is now facing a medical li- open after obtaining new insurance care for expectant mothers nearly an ability crisis. coverage at a 300-percent increase in hour away. So why are premiums rising so quick- premiums. According to a recent sur- All of that explains why Missouri un- ly that good physicians such as Dr. vey by the Arkansas Medical Society, fortunately is now facing a medical li- Coleman, Dr. Crawford, and Dr. Woods 90 percent of doctors have practiced ex- ability crisis and moves from a State are forced to give up their practices? pensive and often unnecessary defen- with problems to a State in crisis. The primary reason is rapidly increas- sive medicine; 80 percent of doctors are Let’s look across the Mississippi ing jury awards. less willing to perform high-risk proce- River to Missouri’s neighbor, the great As this chart clearly shows, the Jury dures; 71 percent of physicians sur- State of Illinois. Verdict Research Service reports that veyed in Arkansas stated they were Time magazine recently ran a cover the median award made by a jury has considering early retirement; and one- story entitled ‘‘The Doctor is Out,’’ more than doubled between 1996 and third of Arkansas physicians are con- highlighting the plight of Dr. Alex- 2000. As you can see, between 1996 and sidering moving their practices. ander Sosenko of Joliet, IL, and his pa- 2000 the median jury awards have gone Doctors in Arkansas who want to tients. up dramatically, actually more than care for the State’s frailest patients Dr. Sosenko’s insurance carrier re- doubling. In fact, the median liability are in a particularly difficult bind. cently dropped him and his cardiology award jumped 43 percent in just 1 There are currently no insurers writing partners, even though the practice had year—from $700,000 in 1999 to $1 million new policies for doctors who treat never lost or settled a single mal- in 2000. nursing home patients, and those doc- practice case. The one offer of insur- This chart depicts growth in liability tors who have coverage report a whop- ance the practice received would have claim payments. Not surprisingly, the ping 1,000-percent increase. Let me say raised their annual premiums from increase in jury awards has led to simi- that again: There are currently no in- $14,000 per doctor to nearly $100,000 per lar increases in the dollar value of set- surers, none, in Arkansas writing new doctor. tlements reached out of court. policies for doctors who treat nursing Dr. Sosenko and his colleagues are As this chart shows, the average home patients, and those doctors who trying to determine their next step, claim—including both jury awards and have coverage report a whopping 1,000- but he is clearly worried about his out-of-court settlements—has risen percent increase. practice’s 6,000 patients. He told Time: sharply in the past 6 years, rising from Why? Jury awards and settlements ‘‘We doctors can move, but our pa- $176,000 in 1995 to approximately are rising faster than insurers can raise tients can’t.’’ $325,000 in 2001. their premiums to meet these in- Dr. Sosenko’s cardiology practice is The crisis will continue to grow creased costs. From 1992 to 2000, the not the only one in Joliet coping with worse until Congress acts. If we miss amount that doctors and insurers paid a medical liability crisis. The town is yet another opportunity to pass mean- out in jury verdicts and settlements quickly losing all of its neurosurgeons. ingful liability reforms, I have no tripled, but then it doubled again in In February, two Joliet neuro- doubt that more of these yellow States 2001. In that year, for every $1 an Ar- surgeons gave up performing brain sur- will turn red next year as they find kansas medical liability insurer re- gery, leaving the city’s two hospitals themselves facing a medical liability ceived in premiums, it had to pay out without full-time coverage for head crisis. $1.61 in jury awards and settlements. trauma cases. The situation may soon Thankfully, President Bush has out- Arkansas, as you can imagine, is now get worse for Joliet’s patients. The lined several commonsense legal re- confronting a medical liability crisis. town’s last remaining neurosurgeon forms that Congress can adopt to ad- So Arkansas moves from a yellow must now pay $468,000 a year for insur- dress this crisis. The President’s pro- State, which indicates a State with ance and is considering leaving the posal is based on the Medical Injury

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00005 Fmt 0624 Sfmt 0634 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8874 CONGRESSIONAL RECORD — SENATE July 7, 2003 Compensation Reform Act, commonly vent doctors from being driven out of not many of them have. Will the Sen- called MICRA, which California adopt- business. ator from Kentucky expand on that ed back in 1975. Let’s look at punitive damages. In point? As this chart shows, California those rare instances where a medical Mr. MCCONNELL. Mr. President, I MICRA reforms have kept medical li- professional acts in a malicious or par- say to my friend from Mississippi, the ability premiums affordable for Cali- ticularly egregious manner, the Pa- argument typically made for this type fornia’s physicians. Since the reforms tients First Act also allows victims to of legislation is that we are interfering were adopted back in 1975, California’s recover punitive damages the greater with the rights of the States. What we total premiums have risen 182 percent, of $250,000 or twice the economic dam- have done in this measure is to give while the rest of the Nation’s have ages. This is in addition to recovering the States an opportunity to act, to, in risen 573 percent—three times the Cali- full economic damages and up to effect, supercede what we have done to fornia increase. $250,000 in noneconomic damages. make it less generous or more gen- In short, while medical liability pre- The legislation establishes a stand- erous, depending on what they may miums across the country have taken ard of ‘‘fair share’’ liability. What this conclude. A State is given an option to off over the last 25 years, California’s simply means is doctors and hospitals address this crisis in a way that is dif- have remained relatively stable. will not be held liable for harm they ferent from the way we addressed it So what do the California MICRA re- did not cause. Simple justice. Doctors within certain guidelines. By doing forms mean for the average doctor and and hospitals won’t be held liable for that, we do make an effort to respect his patients? Quite a bit, as this chart harm they didn’t cause which is pos- the State’s right to act. shows. sible today and would not be possible Mr. LOTT. Mr. President, if the Sen- This chart lists the going market after the passage of this act. ator will yield further, I say to the rate for an insurance policy with the The Patients First Act also protects Senator, just coming back from my largest insurer in each of the following the injured by ensuring that a majority State, I had occasion to meet with doc- cities. It should be noted that Colorado of any jury award or settlement goes to tors, hospital administrators, and civil- has passed meaningful liability reforms the patient who is actually hurt and ians who are having problems, like that are very similar to California’s re- not their personal injury lawyer. some of those the Senator pointed out forms. These take a look at Los Ange- Finally, this legislation preserves earlier. I also met with some of the at- les, Denver, New York, Las Vegas, Chi- State flexibility on damages by includ- torneys who raise the point that the cago, and Miami. Doctors in Los Ange- ing what is commonly referred to as a States should be allowed to act. les and Denver, where States have en- flexicap. Recognizing that different My own State legislature tried to acted reforms, pay less than those in States have adopted different ap- deal with this issue and made a little States that have not enacted com- proaches to address this crisis, the Pa- progress, but it is still very weak. Our prehensive reforms. tients First Act allows States to estab- crisis is getting worse, and we are los- For example, an obstetrician in Los lish their own limits on damages. ing particularly those critical services Angeles, with the State’s MICRA re- Under the flexicap provision, in any that we need in our trauma systems, forms, can expect to pay $54,000, while State that has adopted limits on eco- for instance. The point I wish to make or ask the his colleague in Miami is looking at a nomic, noneconomic, or punitive dam- Senator to further expand on is, they bill of more than $200,000. As you can ages, those State limits, not the Fed- say: What is the Federal role in this see, Florida is certainly a medical li- eral limits, will apply. situation? Why is it necessary for the ability crisis State. The flexicap also applies prospec- Federal Government to become in- Similarly, a surgeon in Los Angeles tively. If any State legislature believes volved? My response has been, clearly, or Denver can expect to pay about one- the monetary limits established in this there is a Federal application for med- half as much as a colleague in Las bill are too generous or not generous ical liability that may not exist in Vegas or Chicago. These same surgeons enough, it can simply enact a statute other areas because of the impact it is would face an enormous liability bill— to change the limits within that State. having on Medicare. The additional about $175,000—if they moved their Mr. LOTT. Mr. President, will the threat of these lawsuits, the defensive practices to Miami. distinguished Senator from Kentucky medicine, the additional costs of med- Senator ENSIGN has shown a great yield for a couple questions on these ical liability insurance are causing all deal of leadership on this issue dating issues? kinds of additional costs to be added to back to his days in the House of Rep- Mr. MCCONNELL. I will be happy to our Medicare system. I have heard bil- resentatives. He has incorporated the yield. lions of dollars, and I am going to find best parts of the President’s proposal Mr. LOTT. Mr. President, I know the out in the next day or so what is the and MICRA, the California law, into Senator from Kentucky is presenting approximate amount that is being his prepared statement, and it really the legislation before the Senate, S. 11, added each year to the cost of Medi- has been quite interesting, and I share the Patients First Act of 2003. care. While I would allow the author of his concern. My State is one of those We are trying to improve Medicare this legislation to explain it in detail, first States to be in red. We have a cri- and trying to add prescription drugs, I will briefly describe some of the im- sis in health care delivery. We are los- but there are other costs that are being portant reforms included in the Pa- ing doctors to retirement, leaving the heaped on to the system that are very tients First Act. State, or leaving part of their practice, destructive. First and foremost, the Patients like OB/GYNs getting out of the OB I think the answer is, more than in First Act allows patients to recover 100 part of their practice. The Senator any other area where we tried to get percent of their economic damages. made a particular point. I think the some legal reform, there is a Federal This can include hospital bills, lost bill is a good solution, and it is based, application in medical liability because wages, therapy, and rehabilitation as Senator MCCONNELL said, on the of the impact it is having on the Medi- costs and a wide variety of additional California plan that has been success- care system. expenses a victim might incur. So all ful that does have some limits on puni- Does the Senator from Kentucky of the economic losses would be recov- tive damages. care to respond? ered. The Senator from Kentucky just Mr. MCCONNELL. Mr. President, I In addition to recovering every dime made a point about the abilities of the say to my friend from Mississippi, I do of economic damages, patients can re- States to act differently if they so not know the exact figure—maybe my ceive additional sums up to $250,000 to choose. Will the Senator explain that? staff does—but clearly it has had an compensate for ‘‘pain and suffering.’’ I did not understand that was in the impact on the cost to the Federal Gov- The $250,000 is a substantial amount of bill. I am very interested because one ernment. In addition, these doctors are money, identical to California’s of the complaints I have heard is that moving back and forth across State MICRA limit. But it still places at we are imposing our will on the States lines seeking a place where they can least some limit on unquantifiable and the State legislatures cannot act, practice their profession without basi- noneconomic damages in order to pre- if they want to or if they will, although cally giving away their services.

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00006 Fmt 0624 Sfmt 0634 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8875 Kentucky happens to be next to Indi- as a graveyard for meaningful legal re- I couldn’t understand this. Gulfport is one ana which adopted standards similar to forms. of the fastest growing and most prosperous California some two decades ago. I However, I believe the tide has begun regions of Mississippi. Garden Park is a good to turn. The American people are be- hospital. Where, I wondered, was the spe- have met a number of doctors in Louis- cialist—the specialist who could have taken ville and Henderson who are contem- ginning to understand this is not a bat- care of my husband? Almost six hours passed plating simply moving across the river tle about doctors, personal injuries, before Tony was airlifted to the University to even afford to continue to practice lawyers, and insurance companies; it is Medical Center—six hours for the damage to their profession. about ensuring their access, the pa- his brain to continue before they had a spe- At least in two ways it impacts at tients of America, to needed medical cialist capable of putting a shunt into his the Federal level, with interstate care. Expectant mothers are worried brain to drain the swelling—six unforget- table hours that changed our life. movement of doctors seeking a place to that their obstetricians will have to Today Tony is permanently brain dam- go where they can practice their pro- discontinue practice before their baby aged. He is mentally incompetent, unable to fession, and the direct costs to the Fed- is born. Parents are concerned that care for himself—unable to provide for his eral Government under Medicare. their local trauma center might not children—unable to live the vibrant, active Mr. LOTT. A similar situation exists have a neurosurgeon on staff to treat a and loving life he was living only moments in my State. We are right next to Lou- child injured in a car accident. Seniors before his accident. isiana and not a State one would think worry that the double whammy of ris- I could share with you the panic of a woman suddenly forced into the role of both would have the type of reforms they ing malpractice premiums and reduced mother and father to her teenage children— have in place. It is very easy to move Medicare payments will drive their of a woman whose life is suddenly caught in from Mississippi to Louisiana. They doctors out of business. limbo, unable to move forward or backward. serve different patients in a different I believe the Patients First Act en- I could tell you about a woman who now had State and medical liability costs are compasses the key reforms needed to to worry about the constant care of her hus- probably half of what they are right address this crisis. This legislation al- band, who had to make concessions she across the border. lows patients to be fairly com- thought she’d never have to make to be able What worries me more is we have pensated—fairly compensated—while to pay for his therapy and care. But to de- doctors leaving tremendously under- scribe this would be to take us away from placing badly needed limits on often the most important point and the value of served areas such as the Delta. One out-of-control damage awards. I believe what I learned. Senator Hatch, I learned that doctor in particular I know moved up it is time for the Senate to address this there was no specialist on staff that night in to South Dakota and started practicing crisis, and I urge my colleagues to sup- Gulfport because rising medical liability medicine. Others are retiring when port the Patients First Act. costs had forced physicians in that commu- they would not have retired if they be- Mr. President, I yield the floor. nity to abandon their practices. In that area, at that time, there was only one doctor who lieved they could make a decent living. EXHIBIT 1 had the expertise to care for Tony and he Even worse than that, doctors are TESTIMONY—UNITED STATES SENATE COM- getting out of certain practices. It has was forced to cover multiple hospitals— MITTEE ON THE JUDICIARY: PATIENT ACCESS stretched thin and unable to care for every- become a serious problem for health CRISIS: THE ROLE OF MEDICAL LITIGATION— one. Another doctor had recently quit his care delivery in my State. We have to FEBRUARY 11, 2003 practice because his insurance company ter- act in this area, and soon, because the Ms. Leanne Dyess. Chairman Hatch, Chair- minated all of the medical liability policies bleeding is growing in terms of losing man Gregg, Senators Leahy and Kennedy, nationwide. That doctor could not obtain af- doctors in these critical areas. distinguished members of the Senate Judici- fordable coverage. He could not practice. Mr. MCCONNELL. Mr. President, I ary and HELP committees, it’s an honor for And on that hot night in July, my husband say to my friend from Mississippi, he is me to sit before you this afternoon—to open and our family drew the short straw. up my life, and the life of my family, in an absolutely right. Not only does it af- I have also learned that Mississippi is not attempt to demonstrate how medical liabil- unique, that this crisis rages in states all fect decisionmaking at the end of one’s ity costs are hurting people all across Amer- across America. It rages in Nevada, where career but at the beginning. The ica. While others may talk in terms of eco- young expectant mothers cannot find ob/ younger doctors taking a look at which nomics and policy, I want to speak from the gyns. It rages in Florida, where children can- speciality to choose are shying away heart. not find pediatric neurosurgeons. And it from obstetrics because they believe I want to share with you the life of my two rages in Pennsylvania, where the elderly who they cannot afford to go into that spe- children and I are now forced to live because have come to depend on their orthopedic sur- cialty, thus creating a shortage at that of a crisis in health care that I believe can be geons are being told that those trusted doc- fixed. And when I leave and the lights turn end as well as on the other end where tors are moving to states where practicing off and the television cameras go away, I medicine is affordable and less risky. doctors who have been in the field a want you—and all America—to know one The real danger of this crisis is that it is number of years are no longer able to thing, and that is that this crisis is not not readily seen. It’s insidious, like termites afford it. This is truly a national prob- about insurance. It’s not about doctors, or in the structure of a home. They get into the lem that cries out for a national solu- hospitals, or even personal injury lawyers. woodwork, but you cannot see the damage. tion. It’s a crisis about individuals and their ac- The walls of the house remain beautiful. You One modest estimate from CBO, in cess to what I believe is, otherwise, the don’t know what’s going on just beneath the greatest health care in the world. response to Senator LOTT’s earlier surface. At least not for a season. Then, one Our story began on July 5th of last year, question—this is from my staff—this day you go to hang a shelf and the whole when my husband Tony was returning from wall comes down; everything is destroyed. bill would probably save the Federal work in Gulfport, Mississippi. We had started Before July 5th, I was like most Americans, Government at least $11 billion. Our a new business. Tony was working hard, as completely unaware that just below the sur- suspicion is it is higher than that. was I. We were doing our best to build a life face of our nation’s health care delivery sys- In conclusion, as this map shows, for our children, and their futures were filled tem, serious damage was being done by ex- most of America is either nearing or with promise. Everything looked bright. cessive and frivolous litigation—litigation facing a medical liability crisis. There Then, in an instant, it changed. Tony was in- that was forcing liability costs beyond the are not many white States on this volved in a single car accident. They suspect ability of doctors to pay. I had heard about map. The white States are the ones he may have fallen asleep, though we’ll some of the frivolous cases and, of course, never know. the awards that climbed into the hundreds of that are currently OK. There are six of What we do know is that after removing millions of dollars. And like most Americans them. The rest are either in yellow, him from the car, they rushed Tony to Gar- I shook my head and said, ‘‘Someone hit the States showing problem signs, or red, den Park hospital in Gulfport. He had head lottery.’’ States now in crisis, to which we have injuries and required immediate attention. But I never asked, ‘‘At what cost?’’ I never added a reasonable number just since Shortly thereafter, I received the telephone asked, ‘‘Who has to pay for those incredible this debate last year. call that I pray no other wife will ever have awards?’’ It is a tragedy when a medical mis- During the last 8 years, the House of to receive. I was informed of the accident take results in serious injury. But when that Representatives has recognized this and told that the injuries were serious. But injury—often an accident or oversight by an I cannot describe to you the panic that gave otherwise skilled physician—is compounded brewing storm and has passed meaning- way to hopelessness when they somberly by a lottery-like award, and that award ful medical liability reforms on mul- said, ‘‘We don’t have the specialist necessary along with others make it too expensive to tiple occasions. Unfortunately, during to take care of him. We need to airlift him to practice medicine, there is a cost. And be- this same period, the Senate has served another hospital.’’ lieve me, it’s a terrible cost to pay. Like

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00007 Fmt 0624 Sfmt 0634 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8876 CONGRESSIONAL RECORD — SENATE July 7, 2003 many Americans, I did not know the cost. I my colleagues. For a person like my- Memorial Hospital in Belleville, IL, did not known the damage. You see, Senator self who served for some time in the near the area where I grew up, has lost Hatch, it’s not until your spouse needs a spe- House and the Senate, it seems to me three OB/GYN physicians in the past 6 cialist, or you’re the expectant mother who that the Republican leadership in con- months due to increases in rising mal- needs an ob/gyn, or it’s your child who needs trol of the committee structure would practice premiums. I met one of them. a pediatric neurosurgeon, that you realize the damage beneath the surface. not object to taking this bill to one of I met one during the course of the cam- From my perspective, sitting here today, their committees, having hearings, paign last year. She came to me and this problem far exceeds any other challenge bringing in the doctors, the lawyers, said: Senator, I just cannot continue to facing America’s health care—even the chal- the victims, the insurance companies, pay these premiums and deliver babies. lenge of the uninsured. My family had insur- the pharmaceutical companies, and the And I believe her. ance when Tony was injured. We had good in- companies that make medical devices. Eduardo Barriuso of Humboldt Park, surance. What we didn’t have was a doctor. Let’s hear about this problem in its en- an obstetrician in my State of Illinois, And now, no amount of money can relieve tirety. But, no, they object to that. pays $104,000 a year for malpractice in- our pain and suffering. But knowing that They do not want hearings. They do surance. He says he earns $175,000 a others may not have to go through what year treating mostly poor people, Med- we’ve gone through, could go a long way to- not want the people of this country to ward healing us heal. hear both sides of the story. They icaid patients. He pays $104,000 in mal- Senator Hatch, I know of your efforts to would rather come to the floor and practice, and has $175,000 in income. see America through this crisis. I know this present their side with a take-it-or- Like other doctors who treat patients is important to you, and that it’s important leave-it approach. I do not think that who depend on Medicare or Medicaid or to the President. I know of the priority Con- is fair. I think we can and we should do insurance through an HMO, Dr. gress and many in the Senate are placing better. Barriuso cannot pass on his higher in- upon doing something . . . and doing it now. Let me say at the outset that though surance rates to his patients. Today, I pledge to you my complete support. I have objected and though most major The Family Health Partnership Clin- It is my prayer that no woman—or anyone medical associations, like the Amer- ic in McHenry, IL, was almost forced to else—anywhere will ever have to go through what I’ve gone through, and what I continue ican Medical Association, support this close after its insurer left my home to go through every day with my two beau- bill, I want to make clear my high re- State. They found new insurance at tiful children and a husband I dearly love. gard for the medical profession. Time four times the cost. The clinic serves The PRESIDING OFFICER. The dis- and time again, in my life and the life the uninsured and operates off the vol- tinguished Senator from Illinois is rec- of my family, I have turned to some of unteer services of physicians. It now the best and most talented medical ognized. pays $28,000 a year for malpractice in- Mr. DURBIN. Mr. President, let me professionals in America. I have en- surance, up from $7,000 last year, for a trusted them with the most important first commend my colleague, Senator clinic serving poor people. things I have on Earth—my wife, my A Chicago area OB/GYN is studying MCCONNELL of Kentucky, for his pres- children, and the people whom I love. to obtain his pharmacist license. He entation and his leadership on this Time and again I have found them to issue. Though we disagree on some has decided he cannot continue as a be selfless, extraordinarily talented, doctor. He thinks he can make a better very fundamental parts of this issue, I compassionate men and women who have the highest regard and respect for life as a pharmacist. He is now paying give the medical profession a good $115,000 for his liability insurance. I his ability and I look forward to work- name every single day. Thank God would readily concede the point made ing with him. they are there, and I want them to con- What occurred about 45 minutes ago over and over by Senator MCCONNELL tinue to be there. So I do not come to that these malpractice premiums are was that Senator FRIST, the majority this Chamber as a doctor basher, as not fair. They are unfair particularly leader, came to the Chamber and filed someone who thinks doctors are over- to certain specialties—neurosurgery, a motion to proceed, and I objected. paid or frankly should be held to task trauma care physicians, OB/GYN, and What Senator FRIST was asking was for this, that, and the other. Not at all. several others who have been hit hard that the Senate stop its business and Like most Americans, if I, my wife, or by these increases. That is just not move directly to S. 11 relative to the children are ever sick, I want to look fair. issue of medical malpractice. Because I up into the eyes of the best and bright- I suggest there is another unfairness have filed an objection, Senator FRIST est doctor in America helping a mem- involved in this discussion, an unfair- indicated he would file a cloture mo- ber of my family through a medical ness which my colleague from Ken- tion. After collecting the necessary sig- crisis. My family and I have been lucky tucky never conceded. Frankly, there natures from our colleagues, this will in our lives. Many times I think we is an unfairness in this bill when it lead to a vote on cloture come Wednes- have had the best and the brightest, comes to the victims of medical mal- day. and I still continue to thank them as I practice. Of all the comments made by If Senator FRIST can gather some 60 take a position with which many of my colleague from Kentucky, little votes, he will be in a position to then them will not agree. was said about whether it is fair to cap move to this bill and begin the debate I believe there is a fundamental un- the recovery for a victim of medical and the amendment process. That is fairness in the current situation with malpractice at medical bills, lost the ordinary course of the procedure. medical malpractice. I have seen that wages, and pain and suffering of no An obvious question is why I ob- unfairness in my State. Senator more than $250,000. jected. An issue clearly as important as MCCONNELL has noted it in many other Now, I do not come as an expert on medical malpractice should be consid- States. The largest medical mal- anything. Some 20 years ago, in my ered by the Senate. There is no doubt practice insurance company in Illinois, legal practice in Springfield, IL, I han- in my mind. But I would object to the the Illinois State Mutual Insurance dled medical malpractice cases. For a fact that this bill comes to the floor Company, raised its rates last week 35 number of years I defended doctors without any hearing before a Senate percent on doctors for medical mal- through their insurance company. I committee. Consider that. The most practice insurance. Many lines of in- had about 7 years with that experience. revolutionary and dramatic reform of surance are going up in cost, health in- Another 21⁄2 years I was a plaintiffs’ at- tort law in America, in modern mem- surance and other insurance, but this torney suing some doctors and hos- ory, will come to the floor without the is an extraordinary increase. pitals for malpractice. So I have seen it normal hearings, witnesses, opportuni- Two neurosurgeons in Joliet, IL, from both sides of the table in a court- ties to amend, opportunity to work out have given up the practice of brain sur- room. I do understand the dynamics of compromises and negotiate, all part of gery because of malpractice premium a medical malpractice case, at least as the legislative process. So why then increases. They have left the city’s they applied 20 years ago. I do not does a bill of this gravity and impor- only two hospitals without a full-time know how many others in this Cham- tance only come to us in this cir- coverage for head trauma cases. Sen- ber have had that experience. Some cumstance where there is no chance for ator MCCONNELL is right; Victims of have but very few. us to work out ways to resolve our dif- automobile accidents and trauma need So we come to this discussion, frank- ferences? Why, I cannot explain that to immediate help and immediate care. ly, listening to others who are experts

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00008 Fmt 0624 Sfmt 0634 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8877 in the subject asking them for advice. ma. When he was 6 he had a respiratory requires constant care. His mother What is the right thing to do to deal infection and started running a fever. gave up her job at a local college to with this medical malpractice insur- The doctor who usually cared for him care for him full time. ance crisis? I think, frankly, that this was out of town so his parents took For all of these losses with their bill, which limits the compensation to him to a clinic for nighttime care. At child, for being denied a normal life, be paid to an individual under a med- the clinic, he was given an antibiotic those who bring S. 11 today say they ical malpractice case to $250,000, is fun- and sent home. He got worse. His par- know what it is worth. They know damentally unfair. It is as unfair to ents took him to an emergency room what the pain and suffering of David is victims as the malpractice insurance that same night where he remained worth for the rest of his life. It is worth rates are to doctors. overnight with a fever. The next day, $250,000. Not a penny more. Is that fair? Is that the best the Senate can do, concerned about David’s continuing Is that fair to David, his mother, his that we take the unfairness to doctors fever, David and his parents returned. father? I don’t think it is. and then visit it on unsuspecting peo- The doctor admitted him to the hos- What we have here is a response to a ple who go to a doctor or to a hospital pital at 5 p.m. At the hospital, they medical insurance crisis which I don’t expecting professional care and come took his temperature and admitted believe gets to the root cause of a prob- home with their lives changed or ru- him to a regular hospital room. They lem. ined? did not refer him to the ICU, nor did What I am about to say now is not a I recall one case in Chicago. Let me they place a temperature monitor on statement made by trial lawyers or give an illustration of what S. 11 would him. those friendly to them. I quote from mean in this case. This woman, about His mother was dozing in the chair in Dr. Carolyn Clancy, director for the 50 years old, had two moles on the side his room when a nurse observed he ap- Agency for Health Care Research and of her face. She said to her doctor: I peared to be lapsing into a seizure con- Quality at the U.S. Department of think I would like to have those re- dition. The nurse did an emergency Health and Human Services. What I am moved, doctor. He said: I will send you code. By the time the emergency team stating she said, under oath, before a to one of the very best hospitals for arrived, he was in full seizure. His tem- committee I attended several weeks this surgical procedure, and he did. perature spiked to 107.7 degrees. He re- ago. This is what she said: She went in for this surgical proce- mained in a state of seizure for quite As we all know, medical errors and patient dure to have two moles removed. She some time and eventually went into safety issues represent a national problem of was given an anesthesia. They adminis- cardiac arrest. epidemic proportion. tered oxygen to her and they began to As a result of this ordeal, this 6-year- This is a spokesman for the Depart- cauterize these moles. But there was a old boy was rendered a quadriplegic ment of Health and Human Services, a problem. Medical personnel were not and lost all expressive ability. Profes- medical doctor herself. supposed to use a cauterizing gun near sionals believe he has what is called re- When listening to the explanation of oxygen. ceptive language. He can understand this bill, at any point in time did you As a consequence, there was an ex- spoken language at an age-appropriate hear any reference to the fact that we plosion and a fire on her face, burning level but he is unable to communicate. are facing an epidemic of medical er- off her nose, completely disfiguring He breathes through a tracheotomy rors on patient safety issues in Amer- and scarring her face. She is in her stoma and is fed through a gastro- ica? No. What we heard was we have early fifties now and has gone through intestinal tube. lawyers who want to make too much extensive reconstructive surgery. She That was 11 years ago. He is now 17. money in court and they are taking is lucky to be able to breathe through David can never be left alone, not for 1 these cases to the courtroom. what was once her nose. Her life will minute of 1 day. His mother says she Do you know, according to Harvard, never, ever be the same. can tell he is interested in girls by the what percentage of medical mal- She told the story herself in an arti- way he perks up when a girl his age en- practice actually ends up in a lawsuit cle published in the newspaper in Chi- ters the room. But he cannot express being filed? Two percent. One case out cago. Routine surgery went disas- himself. He cannot say a word. There is of 50 ends up with a lawsuit being filed. trously bad and her life was changed no chance of recovery and, of course, in Think of that. In the universe of med- forever. his condition he is at a heightened risk ical errors and patient safety, think of According to those who have brought prone to infection. it in terms of this statement by Dr. the bill to the Senate, they have de- The very issue that brought David to Clancy that we have a national prob- cided how much it is worth to live 20 or the hospital in the first place was his lem of epidemic proportions. 30 years with permanent disfigurement elevated temperature. Despite that The response of S. 11 to this epidemic and scarring, what it is worth to go fact, no temperature monitor was ever of malpractice and medical negligence into the hospital for routine surgery placed on him. In light of his history is to do what? It is to say that David, and have something happen that com- and his delicate medical condition he who is now 17, who is now a quad- pletely changes your life. Do you know should have been admitted to the ICU riplegic, unable to respond or express what it is worth under this bill? It is rather than simply sent to the regular himself, is going to pay the price. worth $250,000 for her pain and suf- hospital room and given periodic atten- David and children like him in the fu- fering. Not a penny more, not one tion. His family reached a settlement ture will never, ever be able to recover penny more. with the doctors and the hospital for more than $250,000 regardless of med- The decision will be made in the Sen- the negligence in the treatment of ical malpractice that brings them to ate that in her case, and thousands of David. the court. others across America, we will decide It is not likely with all of the liabil- I understand my colleague from Or- the maximum amount to which she is ity protections and extreme cap on egon is here and I yield to him for the entitled. I don’t think that is fair. I damages under this bill that defend- purpose of a question. don’t think it is fair to victims. ants would have felt compelled to Mr. WYDEN. I thank my colleague. I Malpractice premiums are too high reach a settlement with that family if had a couple of questions, having lis- and that is unfair to doctors. But a the bill before the Senate would have tened to the statement. $250,000 pain and suffering cap? That is been the law of the land. First, my sense is that many physi- unfair in many cases of which I am The tragic malpractice of which cians in our country—I am seeing this aware. David was a victim literally took away across Oregon and rural Oregon—are Let me talk about another case from from him all that every one of us take having a real problem out there paying my home State of Illinois, in the city for granted. He will never walk again. their malpractice premiums. We are of Urbana. David was born prematurely He will never have a normal relation- seeing physicians leave the profession. with a lot of problems. By the time he ship with other people. Though he re- This has resulted in patients not hav- was 6 years old many of the problems mains alert and is apparently not intel- ing the access to care they deserve. were behind him, though he still had lectually impaired, he cannot express My understanding is that the distin- some problems with his lungs and asth- himself and he never will be able to. He guished Senator from Illinois agrees

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It is a serious there is a medical malpractice insur- He is open. I hope, if opportunity pre- problem. The source of my statement ance crisis affecting some specialties in sents itself, we have that chance. I is none other than the Institute of some States. I do not argue that point. think we need to bring to the table, not Medicine, a well respected organization I have seen those doctors face to face. only the legal profession but also the here in Washington. They say this epi- Maybe my colleague from Oregon has, medical profession and the insurance demic of medical malpractice has too. companies. If you do not have all three caused more American deaths this year It is interesting, I might say to my of them at the table, as I will make than breast cancer, AIDS, and car acci- friend from Oregon, as I listened care- clear in my statement, you are not dents combined. It is an equivalent of a fully to the explanation on the other going to get to the root cause of the jumbo jet liner crashing every 24 hours side as to how to deal with this crisis, problem. for a year. I waited in vain to hear any suggestion The answer from the other side is More than 70 studies in the past dec- that insurance companies should be strictly to limit for malpractice vic- ade have documented serious quality brought in as part of this conversation. tims the amount they can recover in problems in medical treatment. One of To the other side of the aisle it appears court. I am going to show in charts I the most well known studies published the only thing we need to do is to make will present that that has not worked. in 1991 by a team of Harvard research- sure the victims of medical mal- Caps really do not guarantee that mal- ers found adverse events occur in 3.7 practice have a limitation on what practice premiums come down, for a percent of all hospital admissions and they can recover in court, no matter variety of very complicated reasons. 58 percent of those events are due to whether we are dealing with children I hope we can do that. I hope on a bi- error. or elderly people, no matter how seri- partisan basis we can stop this high- The Institute of Medicine later took ous the injuries. I do not think that is noon standoff and reach a point where that study and another similar study a complete and honest approach to an we have real conversation and dialog. done in Colorado and Utah and extrap- extremely complicated problem. Mr. WYDEN. If my colleague will olated the results to all U.S. hospital Mr. WYDEN. If my colleague will yield for one last question—— admissions. The Institute of Medicine yield further, my understanding is you The PRESIDING OFFICER (Mr. found that there are at least 44,000 ad- have already indicated you are open to SUNUNU). Will the Senator suspend so verse events every year and as many as working with others in the Senate, col- the Presiding Officer may remind all 98,000. leagues on the other side of the aisle, Senators that yielding is only for pur- They also found that each year drugs to try to find a bipartisan solution. I poses of asking a question in order for kill 14,000 hospital patients and injure am particularly interested. Senator the Senator from Illinois to retain his another 750,000. HATCH and I were able to do this a recognition on the floor. The group of Harvard researchers number of years ago for the commu- Mr. DURBIN. I yield for the purpose that published the 1991 study found nity health centers that were being of a question. only 47 malpractice claims in the 31,429 priced out of their malpractice cov- Mr. WYDEN. I ask, is there any rea- cases they discovered. Of the 280 identi- erage. We were able to come up with a son why we couldn’t begin such a bi- fied patients who experienced adverse solution that has made it possible for partisan effort immediately? That is events as a result of medical neg- thousands and thousands of poor people something I would like to do. I cited a ligence, only eight filed malpractice across the country to get their care specific example with Senator HATCH lawsuits. That is only 2 percent of the and have these clinics covered without where we were able to make a real dif- people who had a justifiable reason to extra cost to the taxpayers, simply by ference by working in a bipartisan way. file a claim. Those researchers con- working in a bipartisan way. My sense It is making a difference in community cluded that we do not now have a prob- is to get out beyond the blame game, health centers for their liability cov- lem of too many claims. If anything, saying it is this interest group’s fault erage. Is there any reason why efforts they said they were surprised there or that interest group’s fault, and to to come up with creative solutions that were so few. try to find some common ground here are bipartisan could not begin right A similar study published in The between Democrats and Republicans so now, rather than going this route that Lancet found that although 17.7 per- we can really deal with a problem that is going to polarize the Senate once cent of patients experienced an adverse is affecting many of our physicians and again? event that led to longer hospital stays, affecting our vulnerable patients. My Mr. DURBIN. I would say through only 1.2 percent filed a claim. Thirty understanding is my colleague from Il- the Presiding Officer, there is no rea- patients filed a malpractice claim out linois is open to that kind of bipartisan son why it should not start this of 1,047 who could have, under this approach and may even have some evening and I hope it will. But it will study. ideas he will offer this week. require people of good will on both There are profound problems with I wanted to come to the floor because sides. It will require some of the spe- the current system. Doctors are not I think this is a real problem. I so often cial interest groups that have not even being disciplined and errors are not go to meetings and one group says it is been brought into this conversation to being reported. How can we expect the insurance companies’ fault and the be brought in and to accept their share fewer errors in the future if we do not other group says it is the trial lawyers’ of responsibility. address the system as a whole? Despite fault. I have heard the distinguished I think we can work this out. We the alarming incidence of malpractice, Senator from Illinois say he wants to must work this out so we do not have only about 2,000 doctors, one-third of 1 get beyond that and find a solution to the denial of basic medical services percent of the doctors in the United a real problem. Perhaps he could ad- that are needed across the State of Or- States, are disciplined each year by dress that in whatever time is remain- egon and Illinois and New Hampshire State medical boards. Let me repeat, ing. and Kentucky and so many other one-third of 1 percent of all doctors are Mr. DURBIN. I thank the Senator. I States. But we have to do it in a bipar- disciplined each year by State medical did not have a chance to speak to Sen- tisan, constructive way. boards. ator MCCONNELL, but I did speak to Mr. WYDEN. I thank my colleague. I was on a trip recently and picked Senator FRIST, who was here earlier Mr. DURBIN. I thank the Senator up a book in a book store which I rec- and made that same offer. I said to from Oregon for coming to the floor. ommend to people on both sides of this him, instead of bringing this bill to the The point I wanted to make with Dr. issue because I think it is the best and floor, take it or leave it, with no com- Clancy’s quote is that medical mal- most balanced story of what we are

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00010 Fmt 0624 Sfmt 0634 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8879 facing and debating. It is entitled to be talking about medical errors and your sister, but it is a sense of Con- ‘‘Complications.’’ It is by a surgical negligence and what we can respon- gress, not a law—that a health insurer resident from Boston, Atul Gawande, a sibly do to make certain that the small should be liable for damages for harm National Book Award finalist for this minority of physicians who are guilty caused when it makes a decision as to book. It is subtitled ‘‘A Surgeon’s of malpractice are changed or removed what care is medically necessary and Notes On An Imperfect Science.’’ from the practice? appropriate. If you read this book—some people It is estimated that 50 percent of the We debated for months as to whether won’t want to because there are some malpractice cases in America are filed the HMO and managed care company parts that may make you squeamish. I against 5 percent of the doctors. Yet all would be held accountable for making think Dr. Gawande really talks to you of the doctors end up seeing their mal- the decision on what is medically nec- about the difficulty of being a medical practice premiums increase. essary and appropriate. Those on the doctor. The first chapter talks about When Congress set up a national other side of the aisle stood with the placing a central line. It was tough for practitioner database in 1986 to collect insurance companies and said: No, we me to read this chapter, let alone what data on adverse medical practice, it don’t want to hold those insurance it was like for him as a surgical resi- was expected that at most it would re- companies liable. If they say that dent after having seen this central line port about 1,000 disciplinary actions a somebody has to leave a hospital too implanted in a person’s chest to do it month. However, fewer than 1,000 a soon or that surgery is not indicated, for the first time himself. He had to. year are reported across the United the best we can do in this bill on mal- Trial and error was the only way he States. practice is a sense of Congress—note to would learn. Of course, some mistakes Let me address another issue. It is your sister—that says we really think were made. In his case they were not interesting, when I speak to groups of a health insurer should be liable for fatal or serious. But it was part of the doctors, this is the focus of their atten- damages performed. No law, just that learning process. tion, as it should be, because mal- is what we think; that is what we I think we have to concede that med- practice premiums have gone up so sense. ical practice is not perfect. But we also high. But 2 years ago, this wasn’t what Is that any way to address this seri- know some serious mistakes can be doctors were talking about. Mal- ous problem that is part of the medical made with terrible consequences on an practice premiums were lower. They malpractice crisis facing our country? innocent patient. weren’t raising this issue as often. Doctors and nurses many times know Dr. Gawande refers in one part to They were raising another issue who the problem doctors are, and they this whole question of what to do or which is related. They were raising the know the problems with insurance how to deal with the fact that many issue of HMOs and managed care. Doc- companies. But the culture we are cre- doctors practice with other doctors tors across America told me that for ating in the medical profession and the who they really are worried about. years they were having difficulty being political culture which we created on Let me give you an example of what good doctors because insurance compa- the floor of the Senate has led us to the he refers to in a chapter entitled nies were telling them whether or not point where we can’t honestly speak to ‘‘When Good Doctors Go Bad.’’ He says: they could have tests performed, how the American people about remedying But the problem of bad doctors isn’t the long they could leave a patient in the this problem. problem of these frightening aberrations. hospital, and whether or not a surgery I think there is a better way to deal . . . In medicine, we all come to know such was indicated. They were beside them- with this. We should enact legislation physicians: the illustrious cardiologist who selves saying we were trained as med- following the lead of Senator KENNEDY, has slowly gone senile and won’t retire; the long-respected obstetrician with a drinking ical professionals. We are being over- who introduced a bill last year. It habit; the surgeon who has somehow lost his ruled by insurance companies. would establish a voluntary system to touch. On the one hand, strong evidence indi- Is it a great leap for us to take that share medical error information among cates that mistakes are not made primarily concern of doctors over these many providers’ and patients’ safety organi- by this minority of doctors. Errors are too years and understand that perhaps one zations through the National Patients’ common and widespread to be explained so of the reasons why malpractice has in- Safety Database. Information shared in simply. On the other hand, problem doctors creased is that HMOs and managed this manner would be privileged and do exist. Even good doctors can go bad, and care companies are squeezing doctors not subject to legal discovery. But it when they do, colleagues tend to be almost away from the professional standards entirely unequipped to do anything about would allow health care professionals them. that they were taught to follow? That to report accidents without fear that is part of the reality. He talks about situations that he has that information will put anyone in Another part of the reality is that faced where doctors are taking drugs. legal jeopardy. It would take a bad doc- not very long ago increased mal- Doctors continue to practice and make tor out of the operating room when he practice premiums were passed on to errors every day. Because of the tight- should be out. patients. Patients paid more in fees. Health professionals who submit re- knit community of physicians, other Hospitals, of course, charged more for ports would also be protected from dis- doctors are even afraid to speak to their services. Now, with HMOs and crimination in the workplace for par- them, let alone to governing boards. managed care and strict accounting ticipating in reporting systems. Those doctors continue to make seri- and restrictions in compensation, the Also, consistent with the Institute of ous mistakes. Medicine recommendation, this bill Quoting again, he says: malpractice premiums can’t be passed on. The doctor pays more of it person- creates a new Center for Quality Im- When a skilled, decent, ordinarily con- provement and Patient Safety and the scientious colleague, whom you’ve known ally. and worked with for years, starts popping That is why this has become a domi- Agency for Health Care Research and Percodans, or become preoccupied with per- nant issue. But it also relates to insur- Quality. The center would conduct and sonal problems and neglects the proper care ance companies. support research on medical errors— of patients, you want to help, not destroy A special interest group that is so something we need to face and face the doctor’s career. heavily favored here in the U.S. Sen- honestly. There is no easy way to help, though. ate, which was hardly mentioned in the We also have to concede another In private practice, there are no opening statement about S. 11, is the point. When the doctors from Illinois sabbaticals to offer, no leaves of ab- insurance companies. We just do not came in and said they favored this bill, sence, only disciplinary proceedings of talk about insurance companies in po- I asked them: If we imposed a strict public reports and misdeeds. As a con- lite Senate company. It is considered limitation of $250,000 on David and his sequence, when people try to help, they inappropriate to think that perhaps family, a child who went to the doctor do it quietly, privately. Their inten- they have gone too far. and hospital but unfortunately did not tions are good; the result usually isn’t. Do you know what this bill does? I have his temperature monitored and This is a serious problem. If we are think this is a classic. When you get to became quadriplegic, if we said that talking about malpractice claims, section 13 of this bill, the sense of Con- child, no matter how long he lives, can don’t we owe it to the American people gress—this is like sending a note to never get more than $250,000 for pain

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00011 Fmt 0624 Sfmt 0634 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8880 CONGRESSIONAL RECORD — SENATE July 7, 2003 and suffering, no matter what the cir- But there is another part of the In fact, if you look at it on a national cumstances, if we did that, would it story. The insurance companies are a basis—this, again, from the Weiss Rat- bring down your malpractice pre- part of the story. We are not supposed ings, Incorporated—the percentage in- miums? The doctors said: No, not right to talk about that on the floor of the crease in median medical malpractice away, but maybe in 3 or 4 years we U.S. Senate. Perhaps someone is enter- premiums from 1991 to 2002: States would start to see that turn around. In taining a rule to prohibit reference to with caps, with limitations on how 3 or 4 years? insurance companies. We just don’t do much victims can recover, if they are I listened to the Senator from Ken- that around here. That is not consid- the victims of medical negligence, a 48 tucky come before us and talk about ered polite. But it is part of the prob- percent increase in that period time; an immediate national crisis. If his bill lem, and it is also part of the solution. States without caps, 36 percent. So it is passes, it doesn’t respond to this imme- We need to deal with making certain counterintuitive to argue that we are diate national crisis. There is a better that insurance companies treat doctors dealing with a linear relationship, di- way to do this. fairly—and reinsurance companies. rect relationship between caps and the Over the past 21⁄2 years with the Bush Now, this gets into the complexity of premiums that are charged. administration, we have been rather insurance policy, which I may not un- I would like to also add that I think liberal—I guess I could use that word— derstand as well as I should, but I do we have to be honest about how we in relation to their particular subject, know this part: There are five reinsur- bring the groups together to deal with tax cuts. We decided to use the tax cuts ance companies in the world that rein- this. I think we also have to look to to reward and help certain people in sure for medical malpractice. Only one the legal profession. I do believe that if our society. I believe we should con- of them, the Hartford, is regulated in attorneys are guilty of filing frivolous struct legislation that allows a tax the United States and subject to State medical malpractice lawsuits, we credit for those medical professionals regulation; the other four are not. We should put into law penalties to not and doctors who see their malpractice have no idea whether the rates they only penalize them for costs and attor- premiums going through the roof. To are charging are fair. So before we say ney’s fees but ultimately to prohibit do that gives them immediate assist- to David and his family, $250,000 and them from filing this kind of lawsuit if ance, not something that may or may not a penny more, no matter how long it is done with any repetition. not help them 3 or 4 years from now. you live, the obvious questions is, Are I do not believe doctors should be The same could be true for hospitals the insurance companies dealing with harassed. I want them to be doctors and certainly for high-risk specialties. this challenge and dealing with it fair- first and not sitting around in deposi- We need to allow doctors and hospitals ly? tions and courtrooms for lawsuits that to claim a tax credit for the percentage Incidentally, the insurance compa- never should have been filed. But let of malpractice premiums they are pay- nies are exempt from antitrust law. me add very quickly, I have been there. ing or will pay in the next number of They can gather information and share I, as an attorney, had people walk into years. that information without any penalty, my office where they had husbands who I also want to talk to you about the through the Department of Justice, for had died, children who had died, and whole question of insurers and why we violations of antitrust. asked me to file medical malpractice are in this dilemma. This has been ana- I think we understand what we are lawsuits. I had to listen to those facts lyzed by many groups, including the dealing with, but let me give you an and make a decision. I will tell you, I Government Accounting Office, the idea of actual cases in States. The Sen- thought long and hard before I consid- Wall Street Journal, and USA Today. ator from Kentucky talked about var- ered taking on any of those cases. How did we reach this point of a mal- ious States facing a malpractice insur- Filing a medical malpractice case is practice insurance crisis today? Why is ance crisis, with which I do not quar- not easy. It is not cheap. It is com- it so much worse today than it was? rel. He suggested caps on recovery was plicated and extremely expensive. If According to the Senator from Ken- the way to bring down malpractice in- you do not start off with an under- tucky, one of the sponsors of S. 11, it is surance premiums. standing that you have a good chance all about lawyers filing claims. That is The Weiss Ratings analysis took a of recovery, then, frankly, most attor- not the whole story. look at the percentage increase in me- neys will turn down those cases. That Insurance works in this fashion. If I dian medical malpractice premiums in is why so few cases are filed relative to am going to insure you for a loss, I col- the period between 1991 and 2002. They the number of malpractice claims that lect the premium from you. The only took a look at the States with caps, could be filed. Attorneys know that way that I make a profit is if I collect with limitations on how much a victim getting involved in those lawsuits in more premiums from you than I have can recover, and those without caps. my State, now, requires an affidavit to pay back or I take those premiums You would assume, by the opening from a doctor which says, before you and invest them in a way where I make argument, that if the State has caps on can file the complaint, that you do money, and, coupling that together how much a victim and his family can have a legitimate claim for medical with excess premiums, make my profit. recover, the malpractice premiums malpractice. It turned out that a few years ago, must be low. But look at these States We know the depositions will require with the booming stock market and as examples of what happened during expert witnesses, who are extremely during the period of economic expan- that 10- or 11-year period of time. The expensive, in preparing your case to sion in this country, a malpractice in- States without caps on recovery for take it to the jury. All of these things surance company—a leading company malpractice victims such as this child are understood. We also know, at the in St. Paul, which is now out of busi- David: Arizona had a 3 percent increase end of the day, most plaintiffs lose ness—had collected so much money in in median premiums for medical mal- their cases filed for medical mal- reserves and was making so much practice; New York, 6 percent; Georgia, practice, and that is after they have money in investments that they de- 8 percent; the State of Washington, 27 cleared all these hurdles. So to suggest cided to declare a $1 billion dividend. percent. that attorneys are just filing these Other companies saw this and said we When you go to the States with caps cases frivolously, believing they are need to get in the malpractice busi- on recovery, let’s see how their pre- going to receive money for just filing a ness; this is lucrative. So they did. miums reacted in the same period of complaint, is certainly not my experi- They went in and made their invest- time: California, up 50 percent; Kansas, ence. ments. As the stock market started to up 60 percent; Utah, up 82 percent; and Let me say before I yield the floor— crumble, they had no choice but to cut Louisiana, up 84 percent. So there is no I notice my colleagues are in the off their malpractice insurance or raise direct correlation, no linear relation Chamber and would like to speak— their premiums dramatically. between caps and the premiums there is an element of this bill which Did you hear any part of that expla- charged to doctors—exactly the oppo- the Senator from Kentucky made no nation in the introduction of S. 11? You site of what has been argued on the mention of and no reference to whatso- didn’t. It was all about lawyers filing floor of the Senate on the motion to ever. He told us very good and impor- claims. proceed to the bill. tant stories about doctors who could

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00012 Fmt 0624 Sfmt 0634 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8881 not practice because of malpractice fashion, and involving doctors and law- we seldom ever talk about what the premiums. I think he should have also yers as well as insurance companies. If costs are and what we could do about included the fact that this bill does not we do it, and do it right, it will be a reducing some of the costs that put just provide a limitation on recovery service to every family in America and people out of touch with their own phy- for lawsuits brought against doctors; every community in America. sician. This is one that is proven. This this bill provides a limitation on recov- But this bill, S. 11, is equally unfair is one that does work. It is here to be ery for lawsuits brought against phar- to the victims of medical negligence. acted upon. maceutical companies and medical de- To put a limitation on the amount a As to the discussion on the other side vice manufacturers. person can recover—regardless of the of the aisle that maybe we are in too I did not read anywhere about a mal- permanent disfigurement, the inconti- much of a hurry, this has been on our practice crisis involving pharma- nence, the blindness, the quadriplegia minds and on our floor and in our ceutical companies, but we learned 2 that these people will suffer for a life- States for a very long time. This is not weeks ago, when we debated the pre- time—is fundamentally unfair and, as a new idea as a matter of fact. scription drug bill—and we have we have demonstrated, will not lead to I just wanted to show one little chart learned time and again—that hardly lower premiums. There are better, I think is interesting. That is to show any major bill could go through the more reasonable ways to approach this that reforms do work as a matter of Senate unless it figured out a way to problem. fact. This says, ‘‘2003 Premium Survey help drug companies. This bill is no ex- As I said before on the floor, and I re- Data Selected by Specialties, $1 mil- ception. This bill has been designed to peat at this point, I stand ready to lion to $3 million limits.’’ Here are the make certain there is a limitation on work with the majority and other specialties. Los Angeles, CA; Denver the amount of money that can be re- Members of the Senate. Let’s roll up which has the limitation versus similar covered from drug companies and med- our sleeves and do this the right way. to what is here; New York, Nevada, Il- ical device companies when they may Let’s do it in a way that we can be linois, Florida do not. Then take a look be guilty of product liability, when proud of, and not do it in a take-it-or- here at internal medicine. Here is an they may have sold a product which in- leave-it fashion, as this bill has been $11,000 premium, $9,000 premium. Over jured someone. brought to the floor. here where there is no control—$16,000, I can recall a specific situation: heart I yield the floor. $19,000, $26,000, $56,000. Down here is the catheters. I am a little bit familiar The PRESIDING OFFICER. The Sen- OB/GYN. In these cases where there is with this issue, and maybe some of ator from Wyoming. some limitation, $54,000, which is obvi- those who have followed the debate are Mr. THOMAS. Mr. President, we are ously too much anywhere, and $30,000. as well. These are tiny little lines on this subject now. We are out of But look over here where there are which are passed through a vein of a morning business; is that correct? none, none of the controls we are talk- person to their heart, and they actu- The PRESIDING OFFICER. The ing about here, $89,000, $107,000, $102,000, ally film what is going on in the per- pending business is the motion to pro- $200,000. It does work. It does work. son’s heart. It is an amazing diagnostic ceed on this bill. Medical Liability Monitor is the source device. Mr. THOMAS. I thank the Chairman. of these numbers. The medical device itself had been I am very pleased to come to the It isn’t as if we are talking about cleared by the Food and Drug Adminis- floor this afternoon and join my col- something that is untested, something tration, but it turned out that the leagues to address an issue that has a that we don’t know about. It is not as manufacturer was guilty of shoddy crippling effect on the health care sys- if we are talking about a new problem practices in Massachusetts. This manu- tem. It has helped take out of control of which we were not aware. The fact facturer was creating and producing Medicare costs, malpractice costs. I is, we have physicians living in Chey- catheters which, when inserted into a guess specifically I am interested in it enne, WY, who drive to Colorado for patient and sent up to the heart, would for my own State, of course, as well as this reason. Can you imagine Wyoming break, leaving portions within the everyone else’s. Some providers have being one of the highest places to pay. heart, leading to the necessity for sur- seen premiums jump as much as 81 per- You wouldn’t think that, would you? I gery to retrieve those pieces that were cent in 2 years. Rural areas are dis- think this is something that has a good left behind. proportionately impacted. Often there deal of merit, something that we need Now, I ask you, is that truly what is no other provider to fill in when a to talk about. this debate is all about, that medical doctor is forced to close shop. That has We have cited some of the things device manufacturers which neg- been the case in my State. that are peculiar to our own States. We ligently make a product that can en- Recent studies by HHS show that in have a doctor in Wheatland, WY, who danger the lives of individuals should States where they have enacted limits over the last several years has deliv- also be limited in terms of their liabil- on noneconomic damages in lawsuits, ered more than 2,000 babies in about ity? These are not individual doctors; there are about 12 percent more physi- four different counties. He has been the these are medical device companies. cians per capita than there are where major provider of services there. He The same thing can be said of pharma- there is no such cap. has quit operating. He has quit deliv- ceutical companies. So we are beginning to not only test ering babies. So I would just ask the sponsor of the costs but whether we have pro- Sheridan, a little larger town, has this legislation, the next time he viders. That is a very important one. one of two OB/GYNs in the area. His comes to the floor to explain this bill— OB/GYN services have been especially medical malpractice insurance costs and does it in compassionate terms impacted in my State, where 9 out of 54 over $60,000 a year. So we are in the po- about doctors—why he does not tell us recently surveyed have either stopped sition, then, when providers drop out of the rest of the story. I want to hear the delivering babies or plan to do so be- communities like this, where people rationale about drug companies and cause of rising liability costs. are forced to drive 2 to 3 hours before medical device companies, why they, I have listened to my friend from Illi- they can get services. We have talked a too, need this protection when their nois talk about this issue. Obviously it lot, and we have a lot of concerns products cause extremely excessive is going to be a controversial issue. about rural health care. And it is dif- damage to individuals. There are different views, very difficult to keep providers in those areas. It is my understanding that tomor- ferent views, but it is not a new solu- When you have one or two who leave, row we are going to return to the motion. It is one that has been in place you have none. And so it is really quite tion to proceed to this bill, and I am and has proven to work in many of the different to be in our area. sure many of my colleagues will be States. It also is interesting that we The Wyoming physician population coming to the floor. But I will say this, have talked a lot—I happen to be in- ranks 47th out of 50 States. So every as I did at the outset: It is unfair the volved with the rural health caucus. physician is very valuable to us. Forty way doctors are being treated with We have spent 2 weeks previous to this percent of our family physicians are medical malpractice premiums. Some- talking about Medicare. And we talk over the age of 50, and we are going to thing needs to be done in a responsible about, frankly, who is going to pay, but see more retirements. We are going to

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00013 Fmt 0624 Sfmt 0634 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8882 CONGRESSIONAL RECORD — SENATE July 7, 2003 see more movement, particularly if economic damages. Past and future way, I do have a law degree and I do there are disincentives to serve such as medical expense, loss of past and future know a lot of lawyers on both sides of this cost of malpractice insurance. So earnings, cost of domestic services, the issue for whom I have a great deal we need to deal with this. these things are not limited. It estab- of respect. Nobody is saying you should As I said, this idea that is being pro- lishes a reasonable limit on non- not have an opportunity to bring a law- moted has been in place. We know that economic damages which is exactly suit when you have been wronged or it works. Is it going to solve all the what we are seeking to do. States, how- damaged. That is clearly not the case. problems of cost? Of course not. But we ever, would have the flexibility to es- But the idea that we are going to say know this one will solve some of the tablish or maintain their own laws on no, no, there is not a medical liability problems of cost, and we can move for- damage awards. It establishes a fair crisis, there is a medical malpractice ward to find some other ones. share rule that allocates damages prop- crisis—in fact, when I go around and As I said, we talk all the time about erly and fairly in proportion to the par- talk to people who have pacemakers health care and who is going to pay. ty’s degree of fault. There is a sliding and have drugs that make their lives But as all health care costs keep going scale for attorney’s contingency fees; somewhat acceptable, or they have had up 12 or 13, 14 percent a year, we have therefore, maximizing recovery for pa- strokes but they are controlling their to begin sometime to take a look at tients, which this is really all about. blood pressure, up or down, they feel how we can contain some of the costs It authorizes periodic payments to pretty good about health care in Amer- so that somebody will be able to pay injured parties rather than one lump ica. for it. payment. Health care in America is the goose One of our orthopedic surgeons in It is interesting to me, it does seem that laid the golden egg. We are the Teton County, Jackson Hole, WY, has to present kind of strange politics. We most blessed people in the world when seen a 300-percent increase in liability argue on the other side of the aisle all it comes to medical care. Is it perfect? premiums in the last 12 months. With- the time about health care and that we No. Are mistakes made? Yes. Do we out trauma care in Jackson, these peo- ought to pay and make sure everybody need better reporting or to keep ple have to go to Salt Lake City. This has health care and so we will do it records of this sort of thing? I will sup- is the kind of additional difficulty we with taxes so that they are appealing port that. The AMA may not like it have. to those people who need help in terms that we keep closer track and deal with We all pay for medical liability costs. of costs. But when we come up with some of these mistakes that are made. All patients pay the escalating costs something that will impact the costs, But I am for that. I think we need to generated by the Nation’s dysfunc- suddenly the sympathy shifts over to know where the problems are and we tional medical liability system. And the trial lawyers. It is sort of inter- need to deal with them. these increased premiums are the re- esting to try to argue both sides, when But to say the problem here is the sult. It also reduces the access to care, there is a certain amount of conflict medical profession or the insurance in- especially specialty care. So every tax- here. dustry—by the way, I don’t want to payer pays the price. I think this is a real opportunity for just dismiss their involvement either. I We think we can reduce Federal us to do some things that will be help- want to make sure we understand why spending in Medicare, Medicaid, the ful to everyone, whether they are tax- these medical liability insurance rates Federal Employees Benefits Plan. It is payers, patients, physicians, or what- are going through the ceiling like they suggested we can reduce this by $14 bil- ever. We have a chance to do some- are. It is a variety of issues, I believe. lion in 10 years. This would be a sav- thing with that. Now is our oppor- I don’t believe it is just the lawsuits ings to everyone. Local and State gov- tunity. It is not a new problem. I think but I think that is a big contributor. I ernments could save over $8 billion it is time we act. I am pleased to be think defensive medicine is a big part over that period of time. So it isn’t among the sponsors. I want to work to of it. I think that some of their invest- just a focus on a few people. This is the see that this moves forward. ments went south on them and that is kind of thing that would save us all The PRESIDING OFFICER. The Sen- causing some insurance companies to money and I think would make our ator from Kentucky is recognized. raise rates. lives much better. Mr. MCCONNELL. Mr. President, But to shift the burden over to the What we are doing—and I think there briefly, I thank the Senator from Wyo- medical profession, when I know these needs to be a little explanation of it, to ming for his contribution to this de- men and women practicing medicine— talk about it—doesn’t limit damages to bate. We were discussing off the floor the neurosurgeons, orthopedics, OB/ $250,000. It limits noneconomic dam- the fact that Wyoming got added to the GYNs—these general practitioners in ages to $250,000. So if someone needs crisis list—today, actually. Talk about the Mississippi Delta are already so care, if somebody needs various things a State in which the distances are terribly underserved and are just say- that are economic costs, those things great and the problems are coming: We cannot continue. We are retir- are not there. We want to make sure pounded by it; Wyoming has to be at ing or leaving and going to another we listen carefully to what is being the top of the list. I thank the Senator. State. This is the crisis. Maybe my said here. I yield the floor. State is worse than most but this is a So what we are seeking to do, of The PRESIDING OFFICER. The Sen- huge problem, and it is all over the course—it seems to me reasonable—is ator from Mississippi is recognized. country now. to set reasonable limits on non- Mr. LOTT. Mr. President, I want to One of the things I want to correct is economic damages, provide for a correct some of the perceptions that this: Senator DURBIN talked about quicker review of liability claims, as- perhaps have been left about what this David, referred to David’s situation. sure claims are filed within a reason- legislation would do, or what the situa- The inference was that all he would get able limit of time, and educate folks tion is. is $250,000. As a matter of fact, under that frivolous suits only add to the First, it is very interesting to me this legislation, he would get all of his overall cost of care for everyone. We that it appears there is an effort to hospital bills paid for, all rehabilita- spend a lot of time talking about who blame the medical profession, the doc- tion bills paid for, all physical therapy, should pay. I have already discussed tors. I ask this question now of most all speech therapy, all occupational that but rarely do we talk about the Americans: Who do you have more con- therapy; and if a home nurse is needed costs. They are becoming increasingly fidence in, your local doctors, the 24 hours a day, he could receive full important to us. drugs you have been taking, the med- compensation for that. He could get This bill is modeled after California’s ical devices that are keeping many lost wages up to a lifetime of what he liability reform bill. California’s law alive, the type of medical care you are could have earned, which could be, ob- stabilized the State’s medical liability getting in home towns, or your local viously, millions of dollars. It could insurance market, increasing patient trial lawyer? cover anything David’s family would access to care, saving more than $1 bil- Well, that is an easy question to an- have to spend on his condition. Plus, lion a year in liability premiums. As I swer. I have had to deal with that my- the punitive damages in this legisla- said, specifically it allows unlimited self on both sides of the issue. By the tion is not $250,000; it is the greater of

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00014 Fmt 0624 Sfmt 0634 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8883 $250,000 or two times economic dam- total award in a case under the current Mr. DURBIN. If the Senator will fur- ages. Quite often, economic damages California law; a $21 million in January ther yield, this bill says that in any could easily be $10 million. of 1999; a $25 million award in October health care lawsuit any party may in- Mr. DURBIN. Will the Senator yield? of 1997 for a boy with severe brain dam- troduce evidence of collateral source Mr. LOTT. Then it would be two age and mental retardation because of benefits. I ask the Senator, does he times that—$20 million—that a victim the anesthesia. It goes on. Here is one consider it fair that if David’s family could receive if the economic damages for a $59 million total award. had health insurance that paid for are $10 million. So the inference that all you could some or all of his medical bills, that So let me give an example, and then get under this legislation would be those who were guilty of malpractice, I will yield. I want to make this point. $250,000 is absolutely not the case. It in his case, should somehow be ab- Under the California situation, with would depend on the economic dam- solved from paying because his family the $250,000 limit, what has happened? I ages, the totality of the costs, and the had the foresight to have insurance? ask unanimous consent to have this verdict rendered. So I just wanted to Mr. LOTT. Are these lawsuits about printed in the RECORD. make sure people are aware that there punishment, or are they about helping There being no objection, the mate- is flexibility here and that, depending the people who have been damaged? rial was ordered to be printed in the on the severity and how long it would Sometimes both. By the way, there RECORD, as follows: last, it could be a multimillion-dollar could be, I guess, under certain cir- recovery. [From Californians Allied for Patient cumstances, a criminal act involved. I am glad to yield to Senator DURBIN Protection] While I am not an expert in this area— for a comment or question. SAMPLE RECENT MEDICAL MALPRACTICE it has been a long time since I prac- Mr. DURBIN. I thank the Senator. I ticed law and defended anybody—I have AWARDS IN CALIFORNIA UNDER MICRA ask him this question: Is the Senator December 2002; $84,250,000 total award; Ala- always thought the admission of evi- familiar with the provisions in this law dence about where the money would meda County. relating to collateral sources? For ex- 5 year-old boy with cerebral palsy and come from or how much should be ad- ample, health insurance? quadriplegia because of delayed treatment of missible in court. I have to defer to Mr. LOTT. That you would get health jaundice after birth. others who have more experience and insurance and that would be deducted, The $750,000 award for non-economic dam- more expertise in this area than I do. ages was reduced to $250,000 under MICRA. in effect, from the damage? I was not Mr. President, does Senator MCCON- familiar with that particular provision January 1999; $21,789,549 total award; Los NELL wish to comment? I yield for a but I understand that does happen all Angeles County. question. Newborn girl with cerebral palsy and men- the time. I am not a cosponsor of the Mr. MCCONNELL. Mr. President, I tal retardation because of birth related in- legislation but I am planning on being say to my friend, my understanding of jury. one. That is why I have been here lis- the way this provision would work is October 1997; $25,000,000 total award; San tening to the debate and reading the the collateral rule would allow the jury Diego County. legislation. I want to know all of the to know but does not reduce the award Boy with severe brain damage, spastic ramifications of it. There may be the quadriplegic and mental retardation because and does not allow the insurer to sub- collateral insurance provision that too much anesthesia was administered dur- rogate. That is the way this provision ing a procedure. would allow the amount of money received to be reduced by that. is crafted in this legislation. It would November 2000; $27,573,922 total award; San allow a jury to know, but it would not Bernardino County. Mr. DURBIN. Is the Senator from 25 year-old woman with quadriplegia be- Mississippi familiar with the fact that reduce the award and would not allow cause of a failure to diagnose a spinal injury. in all 50 States across the United the insurer to subrogate. That is my July 2002; $12,558,852 total award; Los Ange- States, including his State and mine, understanding of the way it is crafted les County. there is no similar provision about the in the underlying legislation. 30 year-old homemaker with brain damage deduction of collateral sources? There Mr. DURBIN. Mr. President, I assume because of a lack of oxygen during recovery is only one other instance where we the Senator from Mississippi has the from surgery. floor. The award included $250,000 in non-eco- have passed a law where collateral sources would be credited, and that was Mr. LOTT. I yield to Senator DURBIN nomic damages for the plaintiff’s husband for a further question or answer to the and $676,921 for past and future household for the victims of 9/11. services. Mr. LOTT. I wasn’t aware it doesn’t comments from Senator MCCONNELL. July 1999; $30,900,000 total award; Los Ange- apply to any other States. I would Mr. DURBIN. I will do it in the na- les County. think the States would want to take ture of a question. Is it not true if the Newborn girl with cerebral palsy because that into consideration. I don’t have a jury knows that the plaintiff’s family, of birth injuries. problem with that. You need to look at in David’s case, has health insurance October 2002; $59,317,500 total award; the totality of a situation—and you which is going to pay for some of his Contra Costa County. have judges and juries who will do medical costs, which are obviously 3 year-old girl with cerebral palsy as a re- that—to see what recovery they might going to be extensive, that this is like- sult of birth injury. be getting through their insurance, as ly to diminish the amount that will The award included $100,000 in non-eco- have to be paid by the party respon- nomic damages for the child, $200,000 in non- you decide what the award may be in economic damages for the mother and terms of what their economic needs sible for David’s condition? $200,000 in non-economic damages for the fa- are. I ask the Senator, he suggested ear- ther. Mr. DURBIN. If the Senator will fur- lier that this should not be about pun- April 1999; $6,885,000 total award; Orange ther yield, is he aware of the fact that ishment. Is there not a question of ac- County. in most States, if you go into a civil countability? If the doctor in this case Premature newborn girl with permanent lawsuit and raise the issue of insurance did not monitor his temperature lead- blindness because of delay in treatment. coverage, it is an automatic mistrial? ing to quadriplegia and a lifetime of February 2000; $1,384,685 total award; River- Mr. LOTT. Absolutely. I have seen it pain and suffering, is there not a ques- side County. happen. I was involved in a case one tion of holding that doctor accountable 39 year-old pregnant homemaker and time and one of the lawyers acciden- rather than his parents for having the mother who died because of misdiagnosis. tally mentioned insurance, and there foresight of buying insurance? The $300,000 award for non-economic dam- was a mistrial on the spot. I always Mr. LOTT. To answer the question, I ages was reduced to $250,000 under MICRA. December 1999; $50,239,557 total award; San thought that was kind of ridiculous. see no problem in a jury being able to Francisco County. But I also know that some juries, when consider the totality of the situation. I 10 year-old boy with brain damage because they think an insurance company is in- do not think we should ignore the fact of undiagnosed infection at birth. volved and that actually the doctor a doctor—first of all, they are human The $324,000 non-economic damage verdict might not himself be paying, that beings. They do make mistakes. There was reduced to $250,000 under MICRA. might affect the amount of the verdict are lawsuits based on very good cases Mr. LOTT. This shows that in De- they would give. So that is why that and recoveries of a significant nature cember of 2002 there was an $84,250,000 law is on the books. because of the extent of the damage or

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00015 Fmt 0624 Sfmt 0634 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8884 CONGRESSIONAL RECORD — SENATE July 7, 2003 the longtime life impact on that per- Mr. President, does Senator MCCON- Mr. DURBIN. If the Senator from son. NELL wish to comment? Kentucky is kind enough to yield to When a doctor goes through this, Mr. MCCONNELL. Mr. President, I this procedure, I ask unanimous con- don’t you think it has an effect on his want to make sure my friend from Mis- sent—I do not yield the floor—that we practice in that community? Do you sissippi is aware that, in fact, there be allowed to engage in a dialog about think he is not adversely affected by was a joint hearing on February 11 be- some aspects of this bill so there is a it? I remember a case in my home area tween the Judiciary Committee and clear understanding on the record of where a doctor left a sponge in a pa- the Labor Committee on this subject. his intention. tient and it affected his career the rest There has been a recent hearing. Of The PRESIDING OFFICER. Without of his life. He was punished. He was course, in previous Congresses, there objection, it is so ordered. punished by the verdict, his insurance have been numerous hearings on this Mr. DURBIN. Mr. President, I thank company had to pay, obviously—the subject for as long as the Senator from the Senator from Kentucky. As I have patient got significant damages, both Mississippi and I have been Members of said before, we get dangerously close to economic and punitive damages, and he the Senate. Senate debate on this floor from time suffered mightily. Mr. LOTT. Mr. President, I yield the to time. This just happens to be one of The point is, I have watched this floor. those moments. I am happy to be here issue for pretty close to 34 years, both The PRESIDING OFFICER. The Sen- to witness it. as a lawyer and then as a Member of ator from Kentucky. I ask the Senator from Kentucky, Congress, and it has gotten worse and Mr. MCCONNELL. Mr. President, to what is the Senator’s intention in the worse. It is leading to a serious prob- make sure we all understand what the portion of the bill relative to State lem. It is about the patients, and it is provision is in the bill we have been flexibility? I want to make certain I about the doctors’ insurance compa- discussing, let’s put it this way, Mr. understand. If my State has any law nies. But what about the people now President: This provision only allows a relative to medical malpractice, rel- who are losing access to medical care, jury to know the victim has received ative to discovery or expert witnesses to expert doctors, to especially the benefits from a third party, such as a or, in my case, we do not have a limita- trauma doctors we are about to lose in health insurer. It allows the jury to tion on noneconomic losses, what part my own State, the women who have to know that, I say to my friend from of State laws would this new S. 11 pre- drive literally hundreds of miles to get Mississippi, but the jury is free to ig- empt, and which portion would it not to an obstetrician when they are going nore that evidence if they like. It preempt? to have a baby, what about their risks? would allow them to know there was Mr. MCCONNELL. Mr. President, I Maybe they should be able to file a insurance coverage, but the jury is free say to my friend from Illinois, reading lawsuit against somebody because they to ignore that evidence if they like. from the bill, of which I hope he has a do not get sufficient health care. The provision also prevents health in- copy, section 11 says: This is something we are going to surers, a third party, from recovering SEC. 11. STATE FLEXIBILITY AND PROTECTION talk about over the next 24 to 48 hours. payments it made to the victim. That OF STATES’ RIGHTS. I do think something has to be done. is what this bill actually does. (a) HEALTH CARE LAWSUITS.—The provi- I want to make this point, too, in I think it is important just to set the sions governing health care lawsuits set terms of working something out: We record straight on what is, in fact, con- forth in this Act preempt, subject to sub- saw last year prescription drug legisla- tained in this legislation on that point. sections (b) and (c)— tion was brought directly to the Senate Mr. President, I yield the floor. Which I will go through in a floor. It did not go through the Finance The PRESIDING OFFICER. The Sen- minute— Committee. Because of that, we were ator from Illinois. State law to the extent that State law pre- required to get 60 votes, and that is Mr. DURBIN. Mr. President, I thank vents the application of any provisions of why we did not get prescription drug my colleagues for joining us in this law established by or under this Act. The legislation last year. A couple of the floor debate, and I hope others will to- provisions governing health care lawsuits set alternatives that were voted on got morrow, and I am sure they will. It is forth in this Act supersede chapter 171 of over 50 votes, but we had to have 60. So worth noting that the State of Mis- title 28, United States Code, to the extent that such chapter— there is nothing extraordinary about sissippi, faced with the circumstances (1) provides for a greater amount of dam- taking up a bill that comes over from described by my colleague and friend, ages or contingent fees, a longer period in the House or taking a bill directly to Senator LOTT, decided to do what each which a health care lawsuit may be com- the floor for consideration. State has the right to do, and that is menced, or a reduced applicability or scope I would prefer we have hearings. I establish its own standards of recov- of periodic payment future damages, think hearings would be a lot of fun. I ering for noneconomic losses. (2) prohibits the introduction of evidence would like to see the doctors, the It is my understanding they have es- regarding collateral source benefits, or man- nurses, and patients who are being de- tablished a schedule that starts at half dates or permits subrogation or a lien on collateral source benefits. nied care have a chance to say what a million dollars and, over a period of Subsection (b) any issue that is not gov- this is doing to them. Maybe we could 10 or 15 years, goes up as high as $1 mil- erned by any provision of law established by work out some of the disagreements. lion or $1.2 million. That has been done or under this Act . . . shall be governed by I wish to make this point: That effort by the State of Mississippi, as it could otherwise applicable State or Federal law. has been made this year. Senator FRIST be done by any other State. What we Now, what the flexicaps are designed has been working with Senator FEIN- are considering here is what we will do to do, as I understand it, is to allow a STEIN to come up with a bipartisan bill on a national basis. State to, in effect, opt out, consistent basically along the lines of what is in I was wondering if the Senator from with the provisions that I read to my this bill with the $250,000 limit on puni- Kentucky would help me understand colleague from Illinois, within those tive damages or two times economic the portion of the bill relative to what parameters. damages, whichever is greater. Senator he described as flexibility in terms of Mr. DURBIN. If I could ask my col- MCCONNELL probably was involved in States rights. league from Kentucky, that paragraph those negotiations, but it fell apart Would the Senator be kind enough to (b) goes on to say: when there was pressure to raise it yield, without me yielding the floor, to This Act does not preempt or supersede from $250,000 to $500,000, and they just engage him in a dialog about this State any law that imposes greater protections basically quit working on it, I guess, flexibility? Is that permissible under (such as a shorter statute of limitations) for because they could not get an agree- the rules of the Senate? I direct that health care providers and health care organi- ment. request through the Chair. zations from liability, loss, or damages than I would hope a committee would The PRESIDING OFFICER. If the those provided by this Act. act—have hearings, report a bill, and Senator from Illinois will make a As I read that, though, I understand let’s make sure it is a good bill, but unanimous consent request for the pur- that if one’s State law is more gen- let’s make sure it is not one written by pose of engaging in a colloquy, that erous to doctors, hospitals, drug com- just the plaintiffs’ lawyers. will be acceptable. panies, medical device providers, HMO

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00016 Fmt 0624 Sfmt 0634 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8885 insurance companies, then that State my colleague, the Senator from Ken- and women in the Senate who came provision would be the applicable pro- tucky, is certainly an able attorney, here because of the votes of the people vision. Is that correct? there are some complicated elements. they represent, who trust the decision Mr. MCCONNELL. It is correct that It is important, if we are going to of the people they represent, would say this legislation allows states to provide consider a bill of this gravity, that we that when 12 of them are gathered to- greater protections to health care pro- do take the time to do it and do it gether in a jury box we cannot trust viders than are contained in this legis- right. them; they are just not reasonable. lation. I also note that a case which I men- They get carried away. And because Mr. DURBIN. So it is not a balanced tioned earlier is a clear illustration of they get carried away, according to playing field completely. We are not why this bill is fundamentally unfair those supporting S. 11, we have to re- leaving it to the States to decide, for to victims. I mentioned this case ear- strain them. The only way to restrain example, that wrongdoers of medical lier because it involves a woman who them is to put limits in the law, say to malpractice cases would be treated lives in the city of Chicago. As I said in them no matter how much they think more strictly, more severely? If there my opening statement, this lady, who this poor lady’s case is worth they can- is a stricter provision in the treatment has written an article in a leading not give her more than $250,000. This of those individuals, it would be pre- newspaper in our town, says that she is bill says we just do not trust that jury. empted by this act? Is that the way we literally the face of tort reform. Put the good lawyers in the room have explained it? Three years ago, she went to a pres- representing the doctor and the hos- Mr. MCCONNELL. Again, to ensure tigious hospital in Chicago for a rou- pital, as well as those representing her, the availability of health care services, tine surgery to have two moles re- and the fear is, from those who bring S. 11 to the floor today, that they are just the states are allowed to provide great- moved from the side of her head. Dur- going to see this situation and say this er or additional protections to health ing the surgery, the oxygen which was is not fair, it is not right, and this poor care providers than are contained in being administered to her ignited. In lady deserves more than $250,000. Be- this bill. her words, it set her face on fire. It Mr. DURBIN. Then if I might ask, cause of that fear that the jury may go ended with her face in flames. too far, this bill says: We will stop the next section (c)—I am trying to get In her words: them. We will stop them in every State to the point of let’s use an example of My entire upper lip was burned off and in the Union. the State of Mississippi which has just much of my nose is gone. For two years, I Is it not interesting that when it decided on a cap of $500,000 on non- couldn’t breathe on my own, and I now wear comes to juries in medical malpractice economic losses effective January 1 of a face mask with nasal tubes in what’s left of my nose, 23 hours a day. I have endured eight cases we have so little regard for their this year. Now, the underlying bill, S. ability to find the truth and do what is 11, says that the cap on noneconomic surgeries, with more to follow. The doctors who are trying to reconstruct my face and fair? And yet when it comes to so many losses will be $250,000. So in that in- teeth say the whole process could take up to other areas of the law, such as criminal stance, is it the position of the Senator seven years. justice and the imposition of the death that this bill would not preempt Mis- That is 10 years of surgery from that penalty, the jury is sacrosanct; the sissippi law; that Mississippi’s number tragic accident. jury has the final word. When it comes would apply even though it is larger to deciding what this is worth for this than S. 11? Even then, the scars and burn marks will still be visible and the emotional cost will be lady, we do not trust them. Mr. MCCONNELL. Yes. This legisla- with me forever. She goes on to say: tion does not preempt existing or fu- She says: Some claim that $250,000 compensates peo- ture state laws on noneconomic dam- ple who are injured. ages. I’m 50 years old, and the mistakes made at I refer to this photograph of this poor the hospital have damaged every part of my Mr. DURBIN. May I ask the Senator lady and what she has been through, to explain subsection 2(c)(2) in terms of life—from my career to my personal life to my sense of self. . . . and she asks: ‘‘Would any healthy per- defenses available to a party in a But today’s proponents of medical mal- son allow their face to be set on fire, or health care lawsuit under any other practice reform don’t want to consider each worse, to receive that sum of money?’’ provision of State or Federal law that case individually. They want to put a cap on She says: does not preempt it? I do not under- damages—regardless of how old a person was Not in the worst type of reality television stand that particular section. If I have when they were injured, how serious the in- show. caught the Senator off guard on that jury, how an individual’s life has been af- Some claim that caps are necessary to pro- particular section, we can return to it fected by the negligence of others. tect insurance companies and HMOs. With documented medical mistakes soaring, it is at a later time, but perhaps he could Let me interject for a moment. What is at stake in this debate is not just astonishing that federally proposed legisla- explain what that particular section tion would first target the victims of med- means. this important issue of medical mal- ical error, before addressing the errors them- We can come back. I do not mean to practice but several other important selves. catch the Senator off guard. issues. We are now talking about Now the Senator from Mississippi Mr. MCCONNELL. Let’s come back to changing, at least in some respects, the earlier suggested that I went too far in that. right of States to make individual de- suggesting we ought to look at the Mr. DURBIN. We can come back to cisions about the lawsuits filed in their whole issue of medical malpractice. that at some point. I thank the Sen- States. Well, I do not think that is an issue ator for yielding and providing that ad- As the Senator from Kentucky said foreign to this debate. I think it is an ditional information. earlier, there are some parts where the issue central to this debate. If we are As my colleagues can tell, during the States will still have the last word but going to reduce exposure to lawsuits, if course of this exchange we are doing in other parts they will not. So we will we are going to reduce the size of pre- what usually happens in a committee preempt a State’s right to establish miums, then we certainly have to look hearing where sections of the bill are standards for lawsuits in its State. Now to the root cause of the problem. If we explained and members of the com- that is an important issue which we do not deal with medical malpractice mittee have a chance to ask questions consider from time to time, and de- and the fact that only 1 out of every 50 such as I have asked of one of the spon- pending on one’s prejudice on the issue cases of malpractice ends up in a law- sors, Senator MCCONNELL. Then per- before them, they either ignore or suit being filed, then frankly no matter haps members of the committee say, honor States’ rights. In this case, we how much we lower the noneconomic perhaps, we need to change that lan- clearly do not honor States’ rights. losses per case, there is still a universe guage and we offer amendments. That The sponsors of S. 11 have decided that of liability, a universe of exposure, for is the committee process. on a national basis we will preempt doctors and hospitals which goes un- For this bill on medical malpractice, States’ rights. touched. we have not done that. We are bringing The other thing that S. 11 preempts If this is going to be an honest dis- it directly to the floor. As my col- that is critically important is the jury cussion about reducing malpractice in- leagues can see, despite the fact that system. It is interesting that the men surance premiums and the crisis that

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00017 Fmt 0624 Sfmt 0634 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8886 CONGRESSIONAL RECORD — SENATE July 7, 2003 they have created among some speci- We can keep noneconomic losses, With regard to the lady who was hor- alities in some States, then I think limit the amount of money the victims ribly disfigured—this picture displayed frankly, as is said by this poor lady like this can recover, find premiums by my friend from Illinois—it is impor- who was a victim, what is wrong with still rising through the roof as they tant to remember that her damages asking how we make our hospitals have in many States that already have would not be capped at $250,000. She safer? How do we get our doctors to these caps, and be powerless to re- would get all of her economic dam- reach a point where they are making spond. Our friends in the medical pro- ages—all of them—plus $250,000 non- better informed decisions? That is a fession who are rightly asking us to do economic damages, plus, in all likeli- reasonable inquiry. It is one from something should be enraged at that hood, punitive damages on top of that which we should not shy away. It is point, as well. Having been promised equal to twice economic damages or a certainly one that applies directly to this so-called tort reform—though I quarter of a million, whichever is what we are discussing. don’t believe it is real reform—that greater. She goes on to say: this limitation on the amount that can So the notion that there is simply no Some claim that juries are the problem. I be recovered on individuals is going to other compensation, that there is a trust a jury of my peers to competently de- be the answer to their prayers, it may $250,000 cap, is not accurate, I say with termine a fair judgment in cases like mine. fail. That is not fair to them. all due respect to my friend from Illi- The proponents of this legislation want to nois. rein in juries in medical malpractice cases, Bringing together in one place the medical profession to deal with less- Senator LOTT read off a few moments but never question the legitimacy of the jury ago a list of awards under the Cali- in cases of the death penalty or other cases ening medical malpractice, which ac- of wrongdoing. It appears that their concerns cording to the Bush administration fornia system—which is the underlying focus more on satisfying specific constitu- spokesman, Dr. Clancy, has reached bill, the one we are seeking to get be- encies than protecting citizens from harm. epidemic proportions, bringing to- fore the Senate, which this bill mir- Like many people, I have been injured by gether the insurance companies, which rors—of multimillions of dollars for poor care at a hospital. More than anything compensatory damages; and punitive in my life, I wish I could take that day back, because of bad investments have seen their premiums skyrocket to try to damages in a case of truly egregious to make myself the way I was before the fire events could be twice the economic exploded all around me. But I can’t have make up the difference, bringing to- that day back. All I can have now is the gether the attorneys to make sure friv- damages. Then there is a pain and suf- right to be treated as an individual, to have olous lawsuits are not filed, can bring a fering award potential of $250,000 on others understand how this event has solution. If that solution is to be im- top of that. The people who do not get a penny changed my life. mediate—and it should be—it should Caps on damages seek to treat all injured are the ones who cannot find a doctor necessarily involve some help in the people in the same way. No victim is exactly because the doctor is no longer there. Tax Code for doctors who are currently like any other. Devastating injuries affect One of the examples I used in my re- facing these problems, as well as hos- each life differently and deserve to be treat- marks earlier, Leanne Dyess from Mis- pitals. ed individually. sissippi, did not get a penny. Nor did In short, my injuries are personal—though I would like to know if the Senator the women who give birth by the side part of a national epidemic of negligence in from Kentucky would engage me, if he of the road. They don’t get any money hospitals. A recent study showed that 98,000 would explain why he has included in people were killed in hospitals, through ne- when their doctors have been driven this medical malpractice bill, that was glect, in a single year. out of business. originally designed for doctors and hos- I’m hoping that Congress and the public So the point I make in response to pitals, protection against lawsuits rel- will see that each victim of medical mal- my friend from Illinois: This is not practice is worth considering on his own and ative to medical device manufacturers nearly as draconian as he suggests. On not put arbitrary caps on the personal suf- and drug manufacturers. Why were fering of so many people. the economic side, there are no limits these two additional groups included in at all. Under punitive damages, there That is what it comes down to, a S. 11 to limit their exposure to law- could be twice what compensatory question of individual worth. The ques- suits? I don’t recall any reports of a damages are, and there is a $250,000 tion is whether or not we have reached crisis when it comes to insurance for possibility on pain and suffering al- such a point in our society where we pharmaceutical companies. ready. We think that clearly the vic- have to step away from the rights of I ask unanimous consent that the tims are not denied adequate com- this individual who was clearly a vic- Senator from Kentucky be allowed to pensation. tim—as much a victim as someone who respond and I still retain the floor. As we have already pointed out with would be shot by a gun on the street or The PRESIDING OFFICER. Without several speeches, the States that have hit by a drunk driver on the road— objection, it is so ordered. tried this kind of approach have lower whether we have to say in her cir- Mr. MCCONNELL. I want to respond malpractice insurance premiums and cumstance we cannot trust a jury of to some of the other suggestions my do not have the crisis that we have in her neighbors and people in her com- friend from Illinois has made, so if he most of America today without that munity to decide what that injury was completes his comments, I will be kind of legislation. worth. happy to respond. Mr. DURBIN. Will the Senator yield? Have we reached that point? I hope Mr. DURBIN. Fair enough. I yield the Mr. MCCONNELL. I will not yield at we have not. I hope, instead, we will do floor. the moment. something which would be a break- The PRESIDING OFFICER. The Sen- With regard to an earlier reference to through in the Senate—that we will ator from Kentucky. the FDA, if a product is found to be ap- bring together the parties who are Mr. MCCONNELL. Mr. President, propriate by the FDA, the companies clearly responsible for where we are with regard to medical errors, were we should not have punitive damages as- today. Those include insurance compa- not debating a motion to proceed, and sessed when they follow the FDA ap- nies. if we were on the bill, I am sure my proval process. Punitive damages are The Senator from Mississippi con- friend from Illinois or other Members for illegal conduct, and if the Federal ceded the point. He said: I will concede of the Senate would offer amendments Government blesses that conduct, it that the investments of insurance com- with regard to medical errors. A med- can’t be illegal. However, there is no panies have something to do with the ical errors bill has passed the House of cap on economic or noneconomic dam- premiums, of how high they are. Representatives. ages against the drug companies in Well, though the Senator from Mis- I don’t think anyone is suggesting— that situation. sissippi conceded the point, this bill certainly not I—that the underlying The other part of the FDA section doesn’t have anything to do with it. It bill which we are seeking consent to prevents doctors from being sued on does not bring to task the insurance get before the Senate should not be product liability cases just because companies for the premiums they are amended or improved in a variety of they prescribed a drug that the FDA charging or hold them accountable for different ways. However, it is pretty has approved. premiums they will charge in the fu- hard to offer an amendment when we That is the answer to the question ture. are on a motion to proceed. the Senator asked earlier.

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00018 Fmt 0624 Sfmt 0634 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8887 Mr. DURBIN. Will the Senator yield? the challenges facing my home State of I will tell you in my experience as a Mr. MCCONNELL. I yield the floor. Illinois as part of the crisis which he down-State Illinois attorney—I don’t Mr. DURBIN. Let me go on to say has referred to in his opening remarks. speak for any other part of the State or that in this case the question I was I might also note it was just a couple for current practitioners—it was not going to ask the Senator from Ken- of weeks ago in his home State of Ken- uncommon to say to someone coming tucky is this: This poor lady was a vic- tucky that a report that became very in: I am going to charge you a 25 per- tim in my home State of Illinois which controversial was put together by the cent fee if we can settle this before does not allow punitive damages in Program Review and Investigations court; a third if we have to go through medical malpractice cases. My ques- Committee on the cost of medical mal- a trial; and up to 40 percent if there is tion for him, which I will save for a practice insurance and its effect on an appeal. You will also have to pay time when he has a chance to answer— health care. It turned out when this re- costs, but I will try to hold onto those whether or not, under those cir- port was filed there were those who in the hopes that ultimately you re- cumstances, this victim of medical tried to suppress it so it would not be cover and we can take that out of the malpractice has been allowed to re- made public because it addressed the ultimate settlement. cover punitive damages under his bill. question of why malpractice insurance Many people would say, What is my The reason I ask that question is I premiums were high in the State of recourse? I can’t pay for this lawsuit. I think that the section relative to State Kentucky. They raised, I think, some know it is expensive to hire experts, it flexibility and protection of State important points that deserve being is expensive to have attorneys prepare rights is not altogether clear. If he is part of our debate, since the Senator the case—for this lady who was a vic- saying that this lady who was a victim from Kentucky has been kind enough tim of malpractice and many others. of this explosion in her face, which led to bring in my home State of Illinois. In this particular law that is before to multiple surgeries over a projected This report talked about the impact us today, we try to put, at least it is 10-year period of time, might have re- of medical malpractice costs and ac- suggested that we put, limits on the covered punitive damages under S. 11, cess in Kentucky, and I quote: amount attorneys can be paid. We take then in my home State you cannot The total number of physicians in Ken- away from the individuals the right to turn to punitive damages. Your re- tucky has increased in every year for which make that decision with their own at- course, in her case, is for noneconomic data was available—1981 through 2000—sug- torney. losses, which are limited. gesting that the cost of medical malpractice Undoubtedly there have been abuses I might also add the Senator should has not reduced the overall availability of on attorneys’ fees. I am sure that is the note his punitive damage section in- physicians for the State. case, as there have been abuses on med- cludes a phrase which is a very restric- It goes on to say: ical fees and abuses on fees charged by tive phrase. In my home State, when The difference of premiums in states with hospitals. But to say we are going to punitive damages were allowed they joint and several liability [another provision have a one-size-fits-all, one single ap- were allowed for reckless misconduct in S. 11] and other states was generally not proach nationwide as to the amount or willful and wanton misconduct, statistically significant. you can recover is in fact to work a which is a higher level of negligence. Then it went on to say: disservice as to whether or not attor- Under the specific language of S. 11, Premiums in states with caps on non-eco- neys will be able to take these cases. in order to recover for punitive dam- nomic damages were not statistically dif- I spoke to an attorney today who ages, you must show a malicious intent ferent than in other states. took an extremely complicated case in to injure. So to have cases of gross neg- This is a report from the State of Chicago who said before he finally ligence is not enough. There must be Kentucky written as it considered cap- reached a settlement his firm had in- ‘‘malicious intent to injure.’’ ping its own noneconomic losses. They curred $250,000 in costs alone and there Another question which I am going concluded: was no way that a 70-year-old plaintiff to ask the Senator from Kentucky to Premiums in States with caps on non-eco- could pay them. So this attorney and consider, and perhaps respond to at an- nomic damages were not significantly dif- his firm decided they would put the other time, is whether or not a situa- ferent than in other states. money on the table, believing the case tion where a doctor is either on drugs, It said: was meritorious, hoping ultimately addicted to drugs, or intoxicated, is a Premiums for internists and general sur- they could recover it if there were set- case of malicious intent as opposed to geons were higher in States that capped the tlement or verdict. And there was in gross negligence or willful and wanton amount of punitive damages that may be this case. misconduct. Because if the doctor is awarded than in other states. But in this approach here, there is an clearly addicted or intoxicated and as a . . . There was no evidence that limiting attempt to try to limit the amount at- consequence someone is severely in- the amount that attorneys may charge for torneys can receive. I think people like jured, the question in my mind is, Is fees resulted in lower premiums. the woman I showed here, this lady that plaintiff, that victim, then strict- That is from the State of Kentucky, here, who is a victim and certainly one ly limited to $250,000? Is that a ques- this controversial report, which many deserving of any compensation coming tion of negligence or is that a mali- people did not want released to the back—but she may never have her day cious intentional act? public. in court, may never have an attorney, The reason I raise that is because I think it raises questions as to may never get a chance to submit her though we come to the floor and have whether or not the premise of S. 11 is a case to a jury of her peers if some at- these phrases go back and forth in de- sound premise. Certainly in the State torney doesn’t offer a contingency fee bate, in a courtroom it makes all the of Kentucky, people who looked at it arrangement. I have serious concerns difference in the world, as in this case came to the opposite conclusion. about where this will take us in terms or similar cases where States allow pu- Let me say a word about attorneys’ of limiting these contingency fee con- nitive damages. fees. There has been a lot said here tracts. That, to me, is a concern which From my point of view, I think this about attorneys and contingency fees. should be I think debated and debated bill is certainly deserving of a com- The contingency fee is the way a poor openly here. mittee hearing where many of these person comes to court. Unless you are I also want to raise a question—I questions could be asked and answered independently wealthy and can finance hope if the Senator from Kentucky before taken up on the floor. We should a lawsuit and pay a lawyer by the hour, does not want to address the issue at have an amendment process. At the your only recourse is to say to the law- this point; he will at a later point—as end of that process, we should decide yer, You recover your fee if I recover a to his qualifications of experts in med- whether or not this is the only way to settlement or a verdict. That is what a ical malpractice cases. I want to under- deal with the malpractice insurance contingency fee is. stand the limitations he is putting on premium crisis, which we are facing in In this bill, S. 11, the authors go to the experts who come before the court. this country. great lengths to limit the amount of In each trial I have been involved in, I will also add at this point, the Sen- fees that can be recovered by attorneys it was a decision to be made by the ator made reference earlier to some of filing medical malpractice cases. judge initially, and ultimately by the

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00019 Fmt 0624 Sfmt 0634 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8888 CONGRESSIONAL RECORD — SENATE July 7, 2003 jury, as to the credibility of an expert quately compensated. But to protect malpractice law which put caps on the witness. The difficulty which a plain- the victim from his own lawyer, it amount that individuals could recover tiff has in a medical malpractice law- seems to me that some reasonable lim- from malpractice lawsuits. They have suit, in any city—whether it’s in Illi- itation is appropriate. This bill in- not changed that $250,000 cap in the in- nois or Kentucky or New Hampshire— cludes what we believe to be a reason- terim. The actual value has been cal- is most doctors are not anxious to tes- able limitation. culated. Because there has been some tify against their colleagues. So if you The Senator from Illinois also sug- 28 years since California put that in are a person who has been injured in a gested the bill only allows punitive place, inflation has really taken its toll malpractice case, you have to look damages in case of malicious intent. It on $250,000. Its value today is about hard, far, and wide to find an expert is not just malicious intent; the bill $38,877. who will come to the courtroom and also allows punitive damages when the Mr. MCCONNELL. Mr. President, will say the doctor did something wrong. doctor deliberately failed to avoid un- the Senator yield for a question on In this particular legislation there is necessary injury that such person that point? a limitation on the types of doctors knew the claimant was substantially Mr. DURBIN. I am happy to yield. who can testify in medical malpractice certain to suffer. Interpreted, that Mr. MCCONNELL. If we indexed that cases. I hope tomorrow when we return means that would apply to the situa- amount under this bill, would the Sen- to this bill the Senator from Kentucky tion of the drunk doctor Senator DUR- ator then support the bill? will consider addressing that particular BIN refers to, or a doctor who was on Mr. DURBIN. I would be open to the issue as well—what kind of limitations drugs or somehow incapacitated Senator bringing that in as an option, he puts in place. Usually it is a case for through this kind of behavior. This as long as we are dealing with honest the judge to decide initially and the would clearly mean that punitive dam- figures and fair compensation. But I jury to weigh. If they take a look at ages would be allowed in this case. would also say that in most States the doctor who is brought in and say, We are making a careful list of all which have caps, there are exceptions. This doctor doesn’t even have a spe- the questions which the Senator from For instance, in the State of Mis- cialty that relates to this lawsuit, or Illinois asked. All of them are good sissippi, there were exceptions where has no experience or really no testi- questions. They deserve a response and judges could see extraordinary cases mony, then they discount this and per- further argument for getting past the like the one I mentioned earlier and haps even reject it and maybe even use motion to proceed and getting onto the say that should not be subject to the it against the party who called this bill. So if there are improvements that caps. My problem with California is it doctor. But to establish standards of the Senator from Illinois and others is a blanket cap. evidence in this law—I think at least think should be made to the bill, offer Mr. MCCONNELL. I agree with the during the course of debating this mo- those amendments, debate them, vote Senator from Illinois that some kind of tion to proceed, we should have an op- on them. It could well be that by the inflation adjustment is an appropriate portunity to discuss the matter. time we get to the end of this bill it suggestion. I yield the floor. would be in such a form that the Sen- Mr. DURBIN. I hope the Senator also The PRESIDING OFFICER. The Sen- ator from Illinois might applaud and agrees with me that we ought to allow ator from Kentucky. want to clear the Senate. Who knows. some exceptions to the cap. I don’t Mr. MCCONNELL. Mr. President, the But at the moment, what we are left want to put words in his mouth. But Senator from Illinois mentioned the with is a cloture motion which the that is what I think. I think those ex- Legislative Research Service’s study in leader will later file on the motion to ceptions should be allowed. Kentucky, which has been quite con- proceed in order to even get into a po- I would also say it is important to re- troversial and discredited by some. I sition to do anything beyond having an member if there has been any contain- think a more interesting study was re- interesting back and forth conversa- ment of malpractice premiums in Cali- leased today by HHS here in Wash- tion between the Senator from Illinois fornia, they also followed Proposition ington which revealed that the States’ and myself and get beyond that and ac- 103 which is insurance reform. It is not that enacted limits on noneconomic tually begin to offer amendments to just the limitation on malpractice law damages and medical losses have been the bill and have debate on them and that California has, but they passed in- about 12 percent more for physicians see where the votes may lie. surance reform. After that reform, we per capita than States without such a I think that pretty well covers my saw some changes in the amount that cap. observations for today. We look for- was charged to physicians. As was pointed out earlier by a num- ward to continuing the discussion to- The last point I want to make is this: ber of speakers on this side of the morrow. There has been talk that if we don’t do issue, California and Colorado tend to I yield the floor. something about malpractice insur- prove the point. This legislation is The PRESIDING OFFICER. The Sen- ance, some doctors are forced to leave modeled after the California legisla- ator from Illinois. the State in which they are practicing. tion. They enjoy lower malpractice in- Mr. DURBIN. Mr. President, I thank I don’t doubt that is a fact. I have spo- surance premiums in California. Wide- the Senator from Kentucky for his in- ken to doctors in Illinois in specialties ly believed by everyone is that the rea- vitation to improve the bill. I believe it in certain areas who are seriously con- son for that is a sensible system of caps would be a better exercise done in a sidering leaving. I hope they don’t have on noneconomic damages. committee setting with experts and to. I hope we can do something here to With regard to the limitation of law- witnesses and Senators having the op- avoid it. yer’s fees, I would remind everyone portunity to debate it openly and But the fact is, in California there that is for the benefit of the victim be- amend it and to include not just are indicators of significant physician cause every penny the lawyer doesn’t changes to the rights of malpractice dissatisfaction with medical mal- get, the victim does. The notion that victims to recover, but also the insur- practice, and they have the caps. There somehow there would not be lawyers ance industry and the medical profes- appears to be widespread problems re- available to pursue worthy litigation if sion. I think all of those would make cruiting physicians. Only a third of there were some kind of reasonable cap for a very constructive and important California physicians would still on lawyer’s fees, it seems to me, is not and timely undertaking which, unfor- choose to practice in California, if they substantiated by the facts. Under the tunately, we are not doing here. had to do it over today. Federal Tort Claims Act, there has This is a vote to bring this bill to the To suggest that this is all about mal- been a 25-percent cap for many years. I floor immediately, and to literally de- practice premiums and whether you never heard of any crisis created by the bate it and pass it in a span of 3 or 4 have a cap on how much victims of absence of lawyers willing to bring liti- weeks that we have left before the Au- malpractice can recover, the California gation under the Federal Tort Claims gust recess. experience does not necessarily prove Act. Certainly there should be a rea- I might also add that California is that. sonable limitation on fees. We want to often referred to in this debate. It is Let me also say I would take excep- make it possible for lawyers to be ade- true that in 1975 California passed a tion—and we can debate this, I am

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00020 Fmt 0624 Sfmt 0634 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8889 sure—to my colleague’s interpretations The legislative clerk proceeded to lem, financially, that doctors are fac- of the punitive damage section. It is call the roll. ing but let us not forget that we had true there are two elements here for Mr. DASCHLE. Mr. President, I ask reported by Health and Human Serv- punitive damages. They are both possi- unanimous consent that the order for ices that there were approximately bilities. the quorum call be rescinded. 100,000 deaths due to malpractice last One is that the person who is being The PRESIDING OFFICER. Without year. Mr. President, 100,000 people died charged with malpractice has acted objection, it is so ordered. due to mistakes made in the operating with ‘‘malicious intent to injure the Mr. DASCHLE. Mr. President, I did room, in the hospital, in the clinic. I claimant.’’ not come to the floor to talk specifi- will talk more about this at a later So that is an intentional act. cally about this debate but I commend date but there are cases in South Da- Then it goes on to say, ‘‘or that such the distinguished Senator from Illinois kota that are troubling. person deliberately failed to avoid unfor his excellent presentation today So while we ought to be concerned necessary injury that such person and for the work he has already com- with one side of this ledger, let us not knew the claimant was substantially mitted to with our colleague, Senator forget the real problem that exists, as certain to suffer.’’ GRAHAM, and others in an effort to try the Senator from Illinois has said so I would say to my colleague from to resolve this matter and provide powerfully this afternoon, on the other Kentucky and those who drafted this some meaningful direction and leader- side of the ledger. Let’s find that bal- bill that is unusual wording, and word- ship. ance. I hope we can do that. ing I am not familiar with. I would I am disappointed we find ourselves But the reason I oppose the motion have to study that. But I think to talk in the position we are in, both proce- to proceed is because we have not real- about the deliberate act rises to inten- durally as well as substantively—pro- ly allowed the same opportunity that tional conduct again. The example I cedurally because this bill, obviously, worked with terrorism insurance to has not had the benefit of committee used was not a deliberate act but the work here. If Senator DURBIN and Sen- consideration. The majority leader, as act of a doctor who was under the in- ator GRAHAM can work together to find fluence of alcohol or drugs who may is his right, brought it directly to the some solution, you would think there have imbibed or taken drugs, and then floor. could be other ways with which we We have a model we used last year to in that state of mind did a careless could use that terrorism model and resolve issues of controversy of this na- thing which resulted in medical mal- truly find a constructive, bipartisan so- ture, in particular the terrorism insur- practice. Whether that is included in ance bill. That bill was brought to the lution to this issue. the phrase ‘‘deliberately failed to avoid Jamming this in the Senate, over- floor after a significant degree of con- unnecessary injury,’’ I think is argu- riding the committee, and filing clo- sultation and cooperation and, ulti- able. It should be clarified. ture on the motion to proceed is not mately, negotiation. As a result of that I also want to say in fairness to my the way to achieve some bipartisan negotiation, even though the whole friend from Kentucky, since Kentucky consensus on a very legitimate issue. question of jury awards and issues in- and Illinois have been part of this de- So we will vote in opposition to the volving tort reform were brought up— bate, that a report of Wednesday, Au- because there were some who argued motion to proceed, not because we do gust 9, 2000, in the Courier Journal that was the only way to resolve this not want to address the issue but be- noted that 329 physicians had been dis- issue involving terrorism and the prob- cause there is a better model if we are ciplined in Kentucky for alcohol or lems of insurance related to ter- ultimately going to find a solution. drug abuse, incompetence, and other rorism—we passed the legislation on a That is what it is we are trying to do. offenses from 1990–1999 according to a bipartisan basis. Let’s use the model we established last report issued on questionable doctors. If you ask anybody today in the in- year. I would hope we could do that. I might also say, Kentucky was dustry, they will tell you that insur- But we are spinning our wheels. We ranked as one of the 10 best States in ance premiums have gone down dra- have 4 weeks in July, 4 weeks in Sep- 1999 in responding to this problem. I matically. The terrorism insurance bill tember, maybe a week or two in Octo- only raise that because, as painful as it has worked. I would only hope that we ber—roughly 10 weeks to deal with all is to concede by anyone, including could use a model such as that with the appropriations bills, all of the those on the Senate floor, and cer- this issue as well. We can find legiti- other issues that have come before the tainly those in the medical profession, mate, bipartisan, constructive, sub- Senate so far, a prescription drug bill, there are, in fact, cases where individ- stantive ways to deal with this issue. the child tax credit legislation that is uals have been involved in alcohol and There is no question this is a prob- still languishing here, and an edu- drug abuse and then involved in mal- lem. There is no question that unless cation bill that falls far short of even practice. we address the problem successfully, it what the President said he would com- What I am hoping we can do, if we se- will become even more of a problem, mit with regard to resources. riously want to deal with the mal- exacerbated by the month. So clearly We have a homeland security situa- practice issue, is to go beyond limiting we have to address it. The question is tion now, we are told by a report by the amount that victims can recover how to address it. Senators Rudman and Hart, that falls and bringing this conversation to how If you look at independent analysis $98 billion short of where we need to be. we police the ranks, so doctors who are done over and over by studies—the One of the most stunning comments in not doing the right thing are not going most recent, the Weiss study, issued that most recent report is that there to continue to commit malpractice. about 3 weeks ago—those studies have isn’t a first responder in the country That isn’t fair to the patients, and it shown conclusively, and I would say al- that will survive today a chemical, bio- certainly isn’t fair to other members of most unanimously, that there is no logical, or nuclear attack to respond in their profession who end up paying connection between caps and reduced the first place. That is right out of the higher premiums as a result of it. I insurance premiums, none. report. So if we are serious about deal- think that should be part of any legiti- So we know we have to find a way to ing with the Nation’s issues, I hope we mate discussion that deals with this deal with the very legitimate problem will not look at the ideological agenda. malpractice crisis. being faced today by physicians across I hope we will look at the real agenda. Mr. President, I know my colleague the country. The question is how. I understand the President is going from Kentucky has yielded the floor I give great credit to the Senator to be spending some time traveling the for the evening, and I am prepared now, from Illinois and the Senator from country over the course of the next for my side, to close the debate on this South Carolina and others who have several days talking about jobs. I hope matter and perhaps return to it tomor- tried to find a way to address this issue he does. When we look at all the ad- row. At this point, until the Senate in a meaningful, effective, and, ulti- ministrations, from the very first time business is clear, I suggest the absence mately, bipartisan manner. I hope we we started looking at whether jobs of a quorum. can continue to work. were created or lost in any administra- The PRESIDING OFFICER. The There is a problem on the other side tion, you cannot find one—you cannot clerk will call the roll. as well. We want to relieve the prob- find one—where in the first term of an

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00021 Fmt 0624 Sfmt 0634 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8890 CONGRESSIONAL RECORD — SENATE July 7, 2003 administration that administration the other story is the 65 nominations This has been an extraordinarily pro- was actually responsible for the loss of filibustered by 1 person in the com- ductive first part of the first session of jobs, not the gain of jobs. We gained mittee, not on the floor. Sixty-five the 108th Congress, one of which we all them in the Eisenhower administra- nominations failed to come out of the have a right to be proud. We are mov- tion, the Kennedy administration, the Judiciary Committee because of a hold ing forward to complete the agenda for Johnson administration, all through respected by the majority leader at the the American people. the 1980s and 1990s. This will be the time or by a committee chairman. Ten The measure we are considering first administration since Herbert Hoo- had hearings. Fifty-five did not. Sixty- today, or hoping to consider in the ver that has actually seen a net loss of five nominations died before they could course of the week, the medical liabil- jobs—so far 3 million of those jobs in even be considered by the Senate on ity crisis, is a major part of trying to the first 21⁄2 years. the Senate floor. do what we need to do to make life bet- So my point in raising these other You have 35 nominations which came ter for the American people. issues is simply to say we have a lot of to the floor, 17 of which were judicial, I suggest the absence of a quorum. work to do. The more we spend time on all of which were filibustered, the 17 by The PRESIDING OFFICER. The ideological agendas and issues for Republicans, but 65 didn’t even have clerk will call the roll. which there has not been adequate the opportunity to come to the Senate The assistant legislative clerk pro- committee consideration, much less an floor for even a vote on cloture. ceeded to call the roll. effort made by people on both sides of I want to make sure the record, as Mr. FRIST. Mr. President, I ask the aisle to address them in a sub- the majority leader discussed the issue unanimous consent that the order for stantive way rather than in a political earlier today, is complete with regard the quorum call be rescinded. way, we are going to lose time and lose to judicial nominations as well. The PRESIDING OFFICER. Without an opportunity to address these issues. Again, I go back to my hope that we objection, it is so ordered. Mr. President, I know the majority can look back on those occasions when Mr. FRIST. Mr. President, I rise to leader came to the Senate floor earlier we actually succeeded at addressing a continue the discussion on the health to talk about how unprecedented it is real problem and how it was we did so. care crisis that exists because of our to consider the possibility of a fili- We succeeded with terrorism insurance medical liability system. It is an issue buster on a judge. I go back to our because people such as DICK DURBIN we began talking about 4 hours ago, record and I will say we have broken and MITCH MCCONNELL and others sat and it is an issue that does affect every all records with regard to the speedy down and negotiated and ultimately single American. I have been very confirmation of judges. The New York came to a resolution that solved a pleased in listening to the debate with Times again addressed it over the problem, solved it almost, I would say the wide range of issues that have been weekend. today, by acclamation. Nobody would discussed. For those who have listened, Out of 134 judges considered so far differ with that assertion that we have I think the debate today provides a under this administration, 132 have solved, at least for now, the issue on very effective beginning of a debate the been confirmed; 132 confirmed and 2 terrorism insurance, even though it American people deserve and the have not so far. But for the record I had many of the same questions involv- American people expect. want to make sure people understand. ing it that we are dealing with today Much of the discussion today has Michael Gerhardt is one of the most re- regarding malpractice. been about procedure and the fact that We have a lot of work to do. I hope spected analysts and experts with re- we are moving to proceed with a dis- we can address education and jobs and gard to the constitutionality of advice cussion of this bill on the Senate floor. prescription drugs and the child tax and consent. I want to read one seg- Although we can argue procedure back credit and homeland security, not to ment of a speech he gave a few weeks and forth, what we are trying to do is mention energy and a lot of other ago. He talks about the historical prac- respond to a health care crisis that is issues that have to be addressed in the real. The crisis affects not just doctors tices of the constitutional right of ad- month before we leave. We can spend and providers in health care today but vice and consent, especially as it ap- our time more productively. I hope does, in effect, have an impact on every plies to the rules of the Senate. that realization will be one that will be Obviously, we talk about rule XXII, American, whether it is through being accepted by our Republican colleagues and we are very cognizant of the im- beneficiaries of our Government pro- sooner rather than later. portance of Senate rules in this regard. I yield the floor. gram, Medicare, Medicaid, the Federal Senate historical practice, according The PRESIDING OFFICER (Mr. FITZ- Employees Health Benefit Plan, or to Mr. Gerhardt, goes back to the first GERALD). The Senator from Kentucky. through the private sector, or even for recorded filibuster of a judge in 1881, to Mr. MCCONNELL. Mr. President, let those who have no insurance today. block President Hayes’s nomination of me make a few observations about the I will outline a little bit about how Stanley Matthews to the Supreme record of the Senate this year. This every American is affected and why it Court. Numerous nominees before him year, the Senate had to complete 11 of is a bill that is important to every were denied votes by delay—in other last year’s appropriations bills. There State and every citizen in every State. words, they didn’t come to the floor— were only 13 that were supposed to pass Medical malpractice premiums, as we which has been a common practice for the basic work of the Government. reviewed over the course of the day, the 215 years the Senate has been meet- This Senate had to come back and ap- have skyrocketed in recent years. So it ing. But on the very first occasion of a prove last year’s work that was never is a problem we have been able to iden- recorded filibuster, in 1881, President done, 11 of the 13 appropriation bills. tify for a period of time. A lot of people Hayes’s nomination was defeated; that Last year, for the first time since the will date the debate back to the mid- being of Stanley Matthews. Budget Act was enacted in the early 1970s when MICRA, or the health care From 1949 to the year 2002, 35 nomi- 1970s, there was no budget. The Senate medical liability refrom that was put nations were filibustered, 3 fatally, in- never passed a budget. This year, the forth in California, was first passed and cluding Abe Fortas’s nomination as Senate enacted a budget. then implemented. It is an issue that Chief Justice. Seventeen of those thir- It is important to note that this in States which have not addressed the ty-five filibusters were of judicial year’s Senate has also enacted the problem that is growing and is growing nominations. From 1968 to 2002, Repub- President’s growth package which in- rapidly. We see access to doctors being licans filibustered against 19 Presi- cluded the third largest tax cut in threatened, especially for women, and I dential nominations. So these histor- American history. And just before the will come back to that particular ical practices weigh heavily in support, recently completed recess, the Senate point. Especially in rural areas, we see of course, of the constitutionality in completed a bill modernizing and pre- this access to care being threatened, addition to the language itself. serving Medicare and adding a pre- and this is why it is a crisis. Access to That really doesn’t tell the whole scription drug benefit for our seniors, care is being totally taken away in cer- story: Thirty-five nominations, seven- an issue that had languished over the tain regions of the country. The AMA teen filibustered against judicial nomi- last three or four Congresses with no has a chart to be brought out, I am nations by Republicans since 1968. But action. sure, in the next day or so that depicts

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00022 Fmt 0624 Sfmt 0634 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8891 those States which are in crisis. Since Crisis level means that premiums are ‘‘go bare’’ because then if they do get we last talked about some of these skyrocketing. There are increasing sued, it destroys their livelihood and issues on the Senate floor, the number numbers of frivolous lawsuits, but that any chance of practicing medicine in of States in crisis, where access to translates now to worse access, greater the future. health care is threatened, has grown barriers to access, to everybody. All The crisis is made real by the victims and grown dramatically. the citizens of that crisis State are themselves. I hope the opponents of the Every American should participate in harmed in the event there is a trauma underlying reform measure, or even this debate. We hear the anecdotes. We accident, in the event somebody needs those people who are saying, now is not see the trauma centers closing down. If to see a neurosurgeon or somebody the time to be addressing this in the one talks to their doctor or if my col- needs to see an orthopedic surgeon or Senate—I hope they look at those leagues would talk to their doctors, or somebody is going to have a baby deliv- anecdotes, those individual stories now if the people who are listening talk to ered. That is really the simple reason which, when accumulated in the aggre- their doctors, they know it is a real why we need to bring this legislation gate, have reached crisis proportion. I problem and challenge that is increas- to the floor now. We should not be hope they will agree that there is a cri- ing every day. blocking proceeding to this very im- sis and now is the time to respond. The situation is grave now. The crisis portant bill. The medical liability system is the is there. It is getting worse and thus we As a physician, this crisis is some- root cause of this crisis. It is the per- bring the bill to the floor of the Senate thing I am close to because I watch verse incentives we need to address and for open debate. Once we get to the what it is doing to my colleagues. that this underlying bill, when we are bill, it will be open for amendment These colleagues have chosen to go allowed to go to the bill, does address. where we can discuss these issues be- into this profession which is very spe- The current system, with the ineffi- fore the American people. cial. I have a bias, but it is very special ciencies, with the perverse incentives, The horror stories are there. The because they can go in and can heal, hurts every American. In addition, it headlines are there. Hospitals are clos- prevent disease, and people can live a hurts the negligently injured patients ing labor wards, delivery units, obstet- better quality of life, day in, day out. it is supposed to help. ric units. We see the trauma centers That is why people go into the profes- The good news is there is something that have either threatened to close or sion of medicine. to be done about the problem to make have actually closed. We hear the sto- Yet as we talk to doctors today, the system more fair, more just, to get ries of the expectant mothers who are many will say—and this is very dif- rid of the waste and frivolous lawsuits. unable to find obstetricians. Doctors, ferent than 15 or 20 years ago—that the That is what the underlying bill does. Our system encourages lawsuit abuse especially orthopedic doctors, bone greatest threat to their being able to in lots of different ways, in part, by re- doctors, who often are in a high-risk continue in this healing profession is warding personal injury lawyers who specialty, are the ones who are in- this skyrocketing escalation of mal- file huge claims in friendly venues, volved most often in trauma centers. practice premiums. They are being looking for that big payday. These law- We see the specialties, neurosurgeons, forced to pay for what ends up being a yers often keep up to 40 percent—I as well as orthopedists and obstetri- lot of frivolous lawsuits. These law- think the least is probably around 30 cians, all high-risk specialities, treat- suits are engendered or occur because percent or 33 percent. They keep up to ing the very sick in many cases, leav- the current system, which needs to be 40 percent of many of the settlements ing their States. If they are in a high- reformed, gives incentives to those or verdicts of those injured. If there is trial lawyers—not all trial lawyers—to risk State with skyrocketing pre- a million-dollar verdict, for example, go out and stir up business. I think miums, they are often moving to a low- in some States the personal injury law- that is what is most offensive to the risk State. In the case of obstetricians, yer, the trial lawyer, pockets 40 per- American people, that a component of they are leaving the practice of spe- cent, or $400,000, and the injured pa- our liability system is unnecessarily cializing in the delivery of children and tient gets only $600,000. stopping the delivery of children to- driving up the numbers of lawsuits At the same time, negligently in- tally. There are neurosurgeons who are which in turn is diminishing access to jured patient many times don’t receive no longer signing up to take trauma health care. Driving up the cost of any compensation at all. They are calls or work in trauma centers be- health care, which we all know, makes never addressed because the personal cause of the risk of being sued. The it more difficult for people to receive injury lawyers go after the big bucks, headlines go on. the care they deserve. the big pockets, the large lawsuits. What I really want to stress as a phy- The fact that highly qualified and When one is negligently injured and sician, because I talk to my colleagues committed health care providers are should be appropriately compensated, on a regular basis about this issue, the being literally driven from the field the personal injury lawyers are not problem is getting worse, and getting they entered so they would have that there to address their particular needs. worse by the day. opportunity to heal and to make oth- Again, they are going after the big Time Magazine, June 9, the cover ar- ers’ lives better, is tragic. These indi- pockets, the big sum. We have a system ticle—actually, I did not see Time viduals do not want to drop these vital that compensates the few all too often when it came out but have gone back services. They do not want to leave the at the expense of the many. to look at that particular front page specialities they spent years to de- The effect of these suits is stag- cover and then the articles behind it. velop, whether it is obstetrics, neuro- gering. Between 1996 and 2002, the aver- They talk about this problem in very surgery, or trauma surgery. They do age jury award in medical liability real terms. not want to have to walk away from cases jumped 83 percent. Between 1997 I do encourage people, if they are un- these fields. They do not want to have and 2002, over that 5-year period, the familiar with the debate, to go back to leave underserved areas where this percentage of medical malpractice pay- and read the stories, the anecdotes, problem can be particularly bad. ments of more than $1 million more about what is happening around the Tomorrow or once we get on the bill, than doubled. Again, this illustrates country. I will bring letters to the Senate from that the problem we have in this sys- A year ago last July, when we talked physicians writing if they worked in, tem is getting worse by the day. about a particular amendment my dis- say, the Appalachian Mountains. In un- The mere threat of these huge, multi- tinguished colleague from Kentucky derserved areas or rural areas, they are million-dollar awards forces many doc- had offered and we debated the issue, being hit particularly hard because tors and many insurance companies to there were 12 States that were in crisis they are having to pay these sky- settle cases for large amounts even if according to criteria used by the Amer- rocketing premiums, going from $20,000 that individual physician is not guilty. ican Medical Association. That number to $40,000 to 60,000 to $80,000. They sim- The incentive is to settle, simply to went from 12 States to 13, to 14, to 16, ply cannot stay in business. They can- avoid the exorbitant suit, even if there and 19. Now it is 19 States. Seven addi- not afford paying an $80,000 or $100,000 is no guilt involved. tional States have reached that thresh- premium for malpractice insurance. We will show charts in the Senate old of being in crisis level. Without the insurance, they cannot that most of the cases filed in the U.S.

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00023 Fmt 0624 Sfmt 0634 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8892 CONGRESSIONAL RECORD — SENATE July 7, 2003 courts are without merit. The most re- an expectant mother in rural Arizona could save the country anywhere from cent statistics showed that two out of having to drive more than 2 hours on a $70 billion a year to $126 billion a year three, or 67 percent, of those cases filed desolate desert highway just to see a in defensive medicine expenditures; in U.S. courts are being dismissed or doctor. That is not the sort of story that is overall defensive medicine. If being dropped—not being settled and that should be happening in America, you look just at what the Federal Gov- not actually going to trial. In addition, especially when we have physicians ernment could save by comprehensive only 7 percent of cases actually go to who want to stay in obstetrics, who medical liability reform, the Congres- trial, and a staggering 85 percent of want to practice in rural areas. How- sional Budget Office estimates about those cases are won by the defendant. ever, they are being discouraged from $18 billion a year could be saved over 10 So these numbers are clear evidence doing so by the current system of med- years with such reform. They are look- of the abuse of the current system, of ical liability. ing at just the Medicare Program and the inefficiencies, of the number of If anything, the incentives should be the Medicaid Program and the Federal lawsuits that are frivolous. It is that just the opposite. We should be encour- Employees Health Benefits Program. waste, those inefficiencies, those dis- aging physicians to deliver this care to Often in the Chamber today, a lot of incentives, those perverse incentives women. We ought to encourage them to people have talked about this issue of that this legislation addresses. go to these underserved areas which medical errors and patient safety. I Frivolous lawsuits are unnecessarily are being disproportionately affected. think a lot of good points have been driving up the premiums to physicians. It should be no surprise that the brought up in the Chamber. It is abso- For the most part, for the physician to American College of Obstetrics and lutely critical that we do address the stay in business with those premiums, Gynecology is one of the strongest sup- issue of reporting of medical errors. skyrocketing premiums, increasing 10, porters of meaningful medical liability I will have to say, just listening to 15, 20, 30, 40 percent a year, if that phy- reform. They are uniquely positioned physicians and having been in the field sician is to stay in business, those to understand the threat that the cur- of medicine myself, the current system costs must be passed on to those pa- rent system places on women. They are where you know that anything you tients directly. demanding action by Congress. I do say, in terms of even a possible medical It should be no surprise that the ex- urge my colleagues to listen to their error or mistake could result in a law- cessive litigation and frivolous law- unique concerns. suit is unacceptable. If they are there, suits are forcing these malpractice pre- The broken liability system does you need to shine a light on them, you miums up. In 2002, physicians in many more than just raise the liability pre- need to elevate them, you need to talk States did see their rates rise by 30 per- miums on individual physicians. It among your peers and talk among oth- cent or more. In some States, and in adds tremendous costs, both direct and ers; that is the only way you are going some specialties, malpractice insur- indirect, throughout the health care to fix and reduce these medical errors. ance premiums are rising by as much system. We have all heard of what is But when above your health care sys- as 300 percent a year. called defensive medicine and the in- tem you do have some predatory law- In New York and Florida, obstetri- crease in defensive medicine that is, in- yers who are sitting there looking for cians, gynecologists, and surgeons pay deed, practiced because of the fear, the the big bucks, recognizing they are more than $100,000 for every $1 million legitimate fear, of these outrageous going to take home 30 percent or 40 in coverage. Soon the annual premium and skyrocketing lawsuits. To avoid percent of a settlement it discourages these doctors pay could reach more lawsuits or to make sure that they are that light that we all know is critically than $200,000. I mentioned earlier that the sky-high protected as a physician if there hap- important to allow a discussion, to premiums uniquely affect women. This pens to be one of these lawsuits, physi- allow a self-examination so you can will be heard again and again in the cians will simply order more tests, es- have a system of ongoing, continuous Chamber. One of the three high-risk tablish more of a paper trail. quality improvement in health care. In the Chamber, people have referred specialties is obstetrics. Many obstetri- You think of the case of a simple and will continue to refer to the report cians are leaving the practice, leaving headache. With defensive medicine, for of 3 years ago by the Institute of Medi- obstetrics, and are involved just in the a headache coming into the emergency practice of gynecology or family prac- room, a physician might just order, in- cine, ‘‘To Err Is Human.’’ A lot of these tice because they cannot afford the stead of a good physical exam and issues are talked about there. That is premiums. Right now, nearly 1 out of maybe some medicine, simple diag- why I am a strong supporter of the pa- 11 obstetricians no longer deliver ba- nostic tests. With defensive medicine tient safety legislation that has been bies. Who can blame them? If you ask we might go to the extreme of a CAT developed by Senators GREGG and JEF- why, again and again it comes back to scan that might cost $800 or magnetic FORDS and many others in a bipartisan this threat of these frivolous lawsuits. resonance imaging, an MRI of the head, way, the Patient Safety and Quality It is a tax that affects women in which might cost $1,000. Why? Because Improvement Act. That needs to be many ways disproportionately. If an people are at risk if they are in emer- done. That needs to be addressed. But obstetrician today pays $100,000 for pre- gency rooms, treating somebody who at the same time, by improving in a miums—and that is not unusual—say comes to the door, even for something comprehensive way our medical liabil- they deliver 100 babies. That is a $1,000 as simple as a headache. You do that, ity system, we will actually improve tax that has nothing to do with the not just once or twice but hundreds of the system itself. That will allow light health care that is actually delivered times, indeed thousands of times all to shine openly with, I believe, a lot or the delivery itself, but it is a $1,000 across the United States of America— more discussion and self-reporting by tax that, in effect, is placed right on again, driven by the incentive of frivo- the provider system in order to have top of the delivery of that baby. Thus, lous lawsuits being directed against that quality improvement. if you are a woman and you have a you—and all of a sudden you can un- It is an inefficient system that we family, you need to realize that the derstand why these defensive medicine have today. It does waste tens of bil- doctor is having to pay that $1,000 tax costs tens of billions every year. lions of dollars. It does drive under- on each baby delivered. This cost is ul- Recent surveys show that 75 percent ground, I believe, our ability to im- timately passed on to the patient. or more of doctors acknowledge prac- prove patient safety. Thus, comprehen- This is clearly unacceptable because ticing defensive medicine. The exact sive reform of our medical liability it reflects the waste, the perverse in- cost is hard to calculate, but we do system is, I believe, demanded. This centives in the system, all of which, know it is tens of billions of dollars per bill, the Patients First Act, is a com- again, can be fixed. year. When we realize that three out of monsense measure. It does restore a Again, women living in rural areas four doctors are practicing defensive balance to the system itself. It protects are disproportionately affected and are medicine, those numbers seem to be the right of the negligently injured pa- even more threatened by the current very realistic. tient to sue for just compensation system. In an authoritative study out of while at the same time curtailing the In a June 9 front-page issue of Time Stanford, two researchers there esti- abuses that we know currently exist in magazine, there is one tragic story of mated that reasonable liability reform our system—today. It has a number of

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00024 Fmt 0624 Sfmt 0634 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8893 critical components. I will look for- Mr. DURBIN. Mr. President, reserv- rived in the Senate Chamber and I saw ward, once we get on the bill itself, to ing the right to object, this nomination active debate, I am not quite sure my talking about a number of those com- for the Sixth Circuit, and the others late arrival has caused too much incon- ponents. that will be made by the majority lead- venience. I am delighted with the debate thus er, have not had the benefit of any I support legislation which would ad- far. I look forward to continued par- hearing before the Senate Judiciary dress the serious problems faced today ticipation on this important bill. We Committee. I believe that hearing by doctors, hospitals and other medical have seen at the State level that liabil- should take place before a lifetime ap- professionals and at the same time pro- ity reform can work. This particular pointment is given to any person to the vide balance to treat fairly people who bill we are trying to bring to the floor Circuit Court. So, on behalf of Senators are injured in the course of medical is a bill based on the MICRA system, CARL LEVIN and DEBBIE STABENOW of treatment. Medical Injury and Compensation Re- Michigan, I object. While most of the attention has been form Act that was passed in California The PRESIDING OFFICER. Objec- directed to medical malpractice ver- in the mid-1970s. We know that is a big tion is heard. dicts, the issues are much broader, in- State. It has a high cost of living. Yet Mr. FRIST. Mr. President, I now send volving medical errors, insurance com- the overall premiums paid by physi- a resolution to discharge from the Ju- pany investments and administrative cians there have been much more con- diciary Committee the nomination of practices. trolled than in other parts of the coun- Susan Bieke Nielson of Michigan to be I support caps on noneconomic dam- try. MICRA works. We have that track a U.S. circuit judge for the Sixth Cir- ages so long as they do not apply to record. We have that to look back to. cuit, and I ask for its immediate con- situations like the paperwork mix-up That is why I feel so good about the sideration. leading to the erroneous double mas- legislation we will hopefully bring to The PRESIDING OFFICER. Is there tectomy of a woman or the recent the floor. objection? death of a 17-year-old woman on a There will be lots of blame passed Mr. DURBIN. Mr. President, for the North Carolina transplant case where around in terms of why the system same reasons, I object. there was a faulty blood test. today is not working. Some people say The PRESIDING OFFICER. Objec- An appropriate standard for cases not it is the doctors. Some people say it is tion is heard. covered could be analogous provisions hospitals. Others will say it is the in- Mr. FRIST. I now send a resolution in Pennsylvania law which limit ac- surance companies. Some people say to discharge from the Judiciary Com- tions against governmental entities or the stock market and the bond market. mittee the nomination of Henry W. in the limited tort context which ex- We will have this crisis blamed on lots Saad of Michigan to be a U.S. circuit clude death, serious impairment of of different things as we go forward. I judge for the Sixth Circuit, and I ask bodily function, and permanent dis- would argue that at the heart of the for its immediate consideration. figurement or dismemberment. crisis is the current liability system The PRESIDING OFFICER. Is there Beyond the issue of caps, I believe which promotes these excessive law- objection? there could be savings on the cost of suits, and that it can be fixed. It can be Mr. DURBIN. Mr. President, for the medical malpractice insurance by fixed. That is what I look forward to same reasons, I object. eliminating frivolous cases by requir- doing with my colleagues on the floor The PRESIDING OFFICER. Objec- ing plaintiffs to file with the court a of the Senate. tion is heard. certification by a doctor in the field Passage of this measure will help on Mr. FRIST. Mr. President, I now send that it is an appropriate case to bring both the access issues in health care as a resolution to discharge from the Ju- to court. This proposal, which is now well as the expense issues for all Amer- diciary Committee the nomination of part of Pennsylvania State procedure, icans. If we do it, and we do it right, it Richard Griffin of Michigan to be a would be expanded federally, thus re- will improve health care for all Ameri- U.S. circuit judge for the Sixth Circuit, ducing claims and saving costs. While cans. and I ask for its immediate consider- most malpractice cases are won by de- f ation. fendants, the high cost of litigation EXECUTIVE SESSION The PRESIDING OFFICER. Is there drives up malpractice premiums. The objection? proposed certification would reduce Mr. DURBIN. For the same reasons, I plaintiff’s joinder of peripheral defend- NOMINATION OF BRUCE E. object. ants and cut defense costs. KASOLD, OF VIRGINIA, TO BE A The PRESIDING OFFICER. Objec- Further savings could be accom- JUDGE OF THE UNITED STATES tion is heard. plished through patient safety initia- COURT OF APPEALS FOR VET- The foregoing resolutions will be tives identified in the report of the In- ERANS CLAIMS placed on the Executive Calendar. stitute of Medicine. On November 29, 1999, the Institute of Mr. FRIST. Pursuant to the order of f Medicine—IOM—issued a report enti- June 27, I ask that the Senate proceed LEGISLATIVE SESSION to executive session for the consider- tled: To Err is Human: Building a Safer ation of Calendar No. 132. Mr. FRIST. Mr. President, I ask Health System. The IOM Report esti- The PRESIDING OFFICER. The unanimous consent that the Senate re- mated that anywhere between 44,000 clerk will report the nomination. sume legislative session, and the mo- and 98,000 hospitalized Americans die The legislative clerk read the nomi- tion to proceed. each year due to avoidable medical nation of Bruce E. Kasold, of Virginia, The PRESIDING OFFICER. Without mistakes. However, only a fraction of to be judge for the United States Court objection, it is so ordered. these deaths and injuries are due to of Appeals for Veterans Claims for the f negligence; most errors are caused by term prescribed by law. system failures. The IOM issued a com- PATIENTS FIRST ACT OF 2003— prehensive set of recommendations, in- f MOTION TO PROCEED—Continued cluding the establishment of a nation- RESOLUTIONS PLACED ON The PRESIDING OFFICER. The Sen- wide, mandatory reporting system; in- EXECUTIVE CALENDAR ator from Pennsylvania. corporation of patient safety standards Mr. FRIST. I now send a resolution Mr. SPECTER. Mr. President, at the in regulatory and accreditation pro- to the desk to discharge from the Judi- outset, I thank my colleagues and the grams; and the development of a non- ciary Committee the nomination of clerical staff awaiting my arrival from punitive culture of safety in health David W. McKeague, of Michigan, to be the customary Monday travel day from care organizations. The report called a United States Circuit Judge for the Philadelphia to Scranton to Harrisburg for a 50 percent reduction in medical Sixth Circuit. I ask for its immediate to Washington. For those who may be errors over 5 years. consideration. about to venture onto the Baltimore The Appropriations Subcommittee on The PRESIDING OFFICER. Is there Washington Parkway, the traffic is Labor, Health and Human Services and objection? very heavy indeed. Although when I ar- Education, which I chair, held three

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00025 Fmt 0624 Sfmt 0634 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8894 CONGRESSIONAL RECORD — SENATE July 7, 2003 hearings to discuss the IOM’s findings cumscribed in recent decisions of the The PRESIDING OFFICER. Without and explore ways to implement the rec- United States Supreme Court. An ex- objection, it is so ordered. ommendations outlined in the IOM re- ample is the analysis that the Court Mr. FRIST. Mr. President, this clo- port. The FY 2001 Labor-HHS appro- has recently applied to limit punitive ture vote will occur Wednesday morn- priations bill contained $50 million for damage awards. ing. I will announce, during tomorrow’s a patient safety initiative and directed In recent cases, the Court has shifted session, the precise timing of this vote the Agency for Healthcare Research its Seventh Amendment focus away for Wednesday. and Quality—AHRQ—to develop guide- from 2 centuries of precedent in decid- f lines on the collection of uniform error ing that federal appellate review of pu- MORNING BUSINESS data; establish a competitive dem- nitive damage awards will be decided onstration program to test best prac- on a de novo basis and that a jury’s de- Mr. FRIST. Mr. President, I ask tices; and research ways to improve termination of punitive damages is not unanimous consent that the Senate provider training. In Fiscal Year 2002 a finding of fact for purposes of the re- proceed to a period for morning busi- and Fiscal Year 2003, $55 million was examination clause of the Seventh ness. included to continue these initiatives. Amendment which provides that ‘‘no The PRESIDING OFFICER. Without We are awaiting a report, scheduled to fact tried by a jury shall be otherwise objection, it is so ordered. be issued in September by the Depart- re-examined in any Court of the United f ment of Health and Human Services, States, than according to the rules of ADDITIONAL STATEMENTS which will detail the results of the pa- the common law’’. Then, earlier this tient safety initiative. year, the Court reasoned that any ratio There is evidence that increases in TRIBUTE TO MARGARET SEALS of punitive damages to compensatory insurance premiums have been caused, damages greater than 9/1 will likely be ∑ Mr. BUNNING. Mr. President, I pay at least in part, by insurance company considered unreasonable and dispropor- tribute to one of Kentucky’s finest citi- losses, the declining stock market of tionate, and thus constitute an uncon- zens. On July 29, 2003, Margaret Seals the past several years, and the general stitutional deprivation of property in of Winchester, will be inducted into the rate-setting practices of the industry. non-personal injury cases. Plaintiffs Kentucky Civil Rights Hall of Fame for As a matter of insurance company cal- will inevitably face a vastly increased the significant contributions she has culations, premiums are collected and burden to justify a greater ratio, and made to the Commonwealth of Ken- invested to build up an insurance re- appellate courts have far greater lati- tucky in the areas of civil and human serve where there is considerable lag tude to disallow or reduce such an rights. time between the payment of the pre- award. After decades of putting the interests mium and litigation which results in a These decisions may have already, in of others above her own, Margaret has verdict or settlement. When the stock effect, placed caps on some jury ver- distinguished herself as a leader. Upon market has gone down, for example, dicts in medical malpractice cases attending the Lafayette Vocational that has resulted in insufficient fund- which may involve punitive damages. School, where she developed the skills ing to pay claims and the attendant in- Consideration of the many complex necessary to succeed, Margaret re- crease in insurance premiums. A simi- issues on the Senate floor on the pend- mained determined to remain a mem- lar result occurred in Texas on home- ing legislation will obviously be very ber of the workforce in order to provide owners’ insurance where cost and difficult in the absence of a markup in for her two children. In Lexington, availability of insurance became an committee or the submission of a com- Margaret was the first African-Amer- issue because companies lost money in mittee report and a committee bill. ican to be employed by the Social Se- the market and could not cover the in- The pending bill is the starting point curity Administration in 1964. While sured losses on hurricanes. for analysis, discussion, debate, and she served in a number of occupational In structuring legislation to put caps possible amendment. I am prepared to fields, some of her notable accomplish- on jury verdicts, due regard should be proceed with the caveat that there is ments include her service to the Win- given to the history and development much work to be done before the Sen- chester Board of Commissioners and of trial by jury under the common law ate would be ready, in my opinion, for the Winchester Municipal Utilities where reliance is placed on average Commission. men and women who comprise a jury to consideration of final passage. I thank the Chair and yield the floor. Margaret has participated in a wide reach a just result reflecting the values The PRESIDING OFFICER. The ma- range of other public service projects and views of the community. including the Generations Center Jury trials in modern tort cases de- jority leader. Board, the Urban Renewal Develop- scend from the common law jury in CLOTURE MOTION trespass, which was drawn from and in- Mr. FRIST. Mr. President, I now send ment Board, and the Winchester Solid tended to be representative of the aver- a cloture motion to the desk on the Waste Committee. Her span of con- age members of the community in pending motion. tributions also include the Clark Coun- which the alleged trespass occurred. The PRESIDING OFFICER. The clo- ty United Way Distribution Committee This coincides with the incorporation ture motion having been presented where she served since 1995, the same of negligence standards of liability into under rule XXII, the Chair directs the year she graduated Leadership Win- trespass actions. clerk to read the motion. chester. Margaret also remains an ac- This ‘‘representative’’ jury right in The legislative clerk read as follows: tive member of the Elk Club. For her civil actions was protected by con- CLOTURE MOTION outstanding efforts, Reverend E. sensus among the state drafters of the We, the undersigned Senators, in accord- Baker, Sr., a retired pastor of the U.S. Constitution’s Bill of Rights. The ance with the provisions of rule XXII of the Broadway Baptist Church and an in- explicit trial by jury safeguards in the Standing Rules of the Senate, do hereby ductee into the Kentucky Civil Rights Seventh Amendment to the Constitu- move to bring to a close debate on the mo- Hall of Fame nominated Margaret to tion were adaptations of these common tion to proceed to the consideration of Cal- receive this distinguished honor. endar No. 186, S. 11, the Patients First Act of law concepts harmonized with the Margaret’s commitment to edu- 2003. cation, hard work, family and commu- Sixth Amendment’s clause that local Bill Frist, Mitch McConnell, John En- juries be used in criminal trials. Thus, sign, Craig Thomas, Rick Santorum, nity are an inspiration to many. Her from its inception at common law Larry E. Craig, George V. Voinovich, contributions have made a difference through its inclusion in the Bill of John Cornyn, Trent Lott, Ted Stevens, in the lives of many and have paved a Rights and today, the jury in tort/neg- Michael B. Enzi, James M. Inhofe, path for generations to come. ligence cases is meant to be represent- Chuck Hagel, Jon Kyl, Judd Gregg, Pat Margaret’s example should be emu- ative of the judgment of average mem- Roberts, John E. Sununu. lated throughout Kentucky and across bers of the community—not of elected Mr. FRIST. Mr. President, I ask our Nation. I thank the Senate for al- representatives. unanimous consent that the live lowing me to recognize Margaret Seals The right to have a jury decide one’s quorum, as provided for under rule and voice her praises. She is Kentucky damages has been greatly cir- XXII, be waived. at its finest.∑

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00026 Fmt 0624 Sfmt 0634 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8895 CONGRATULATING RUTH ABBEY Medal, the NASA Group Achievement H.R. 2474. An Act to authorize the Congres- sional Hunger Center to award Bill Emerson ∑ Mr. BURNS. Mr. President, I would Award, and the NASA Exceptional Achievement Medal. In 2001, he was and Mickey Leland Hunger Fellowships for like to congratulate Ruth Abbey of fiscal years 2003 and 2004. Malta, MT on her 99th birthday. Ruth awarded an honorary doctorate by The University of Alabama System and was Under the authority of the order of is a pillar of her community and an in- January 7, 2003, as modified on June 27, spiration to many, including her chil- selected by the American Society for Engineering Management as the 2001 2003, the enrolled bills were signed by dren, grandchildren, great-grand- the Acting President pro tempore (Mr. children, and great-great-grand- Engineering Manager of the Year. In ALLEN) on June 30, 2003. children. Ruth was a teacher for many 2002, he received the Career Achieve- years and subsequently served as Coun- ment Award from the University of f ty Superintendent of Schools. Redland, CA. Most recently, he was se- MESSAGE FROM THE HOUSE lected as the 2003 Martin Luther King Ruth is exemplary of our Montana At 2:18 p.m., a message from the way of life, and I am honored to offer Jr. Unity Award recipient by the Huntsville, AL, chapter of Alpha Phi House of Representatives, delivered by my congratulations on this special oc- Mr. Hays, one of its reading clerks, an- casion.∑ Alpha Fraternity, Inc. He also received the 2003 Community Service Award nounced that the House has passed the f from Oakwood College in Huntsville, following bill, in which it requests the concurrence of the Senate: LOCAL LAW ENFORCEMENT ACT AL. OF 2003 The multiple honors and awards Art H.R. 1. An act to amend title XVIII of the received are an indication of his devo- Social Security Act to provide for a vol- ∑ Mr. SMITH. Mr. President, I speak untary program for prescription drug cov- about the need for hate crimes legislation to our country and his dedication erage under the Medicare Program, to mod- to NASA. Without question, Art Ste- tion. On May 1, 2003, Senator KENNEDY ernize the Medicare Program, to amend the and I introduced the Local Law En- phenson is a man of honor and ability, Internal Revenue Code of 1986 to allow a de- forcement Act, a bill that would add and I would like to add my thanks to duction to individuals for amounts contrib- those provided by so many others. His uted to health savings security accounts and new categories to current hate crimes health saving accounts, to provide arrange- law, sending a signal that violence of work has been given to the success of the NASA programs and he has done so ments, and for other purposes. any kind is unacceptable in our soci- f ety. without ever seeking personal gain or I would like to describe a terrible glory. I have been extraordinarily im- MEASURES HELD OVER/UNDER crime that occurred in West Chester, pressed with his integrity and commit- RULE ment to service. OH. On September 11, 2001, a member of The following resolutions were read, The State of Alabama, NASA, and the West Chester’s Islamic Center was and held over, under the rule. brutally attacked in the mosque’s the nation are immensely proud of Art’s service. He will be missed by his S. Res. 192. An executive resolution to dis- parking lot. After the beating, mem- charge the David W. McKeague nomination. bers of the Islamic Center received a colleagues at Marshall Space Flight S. Res. 193. An executive resolution to dis- series of physical threats and the Center and those at NASA Head- charge the Susan Bieke Neilson nomination. mosque was forced to close its doors. quarters. Our Nation owes a great deal S. Res. 194. An executive resolution to discharge the Henry W. Saad nomination. I believe that government’s first duty to the Stephenson family. Art’s vision pushed us all toward the ultimate goal S. Res. 195. An executive resolution to dis- is to defend its citizens, to defend them charge the Richard A. Griffin nomination. against the harms that come out of of space exploration. His vision and f hate. The Local Law Enforcement En- that goal are both worth noting today, hancement Act is a symbol that can and I am pleased to bring them to the ENROLLED BILL PRESENTED attention of the Senate.∑ become substance. I believe that by The Secretary of the Senate reported passing this legislation and changing f that on July 2, 2003, she had presented current law, we can change hearts and MESSAGES FROM THE PRESIDENT to the President of the United States minds as well.∑ Messages from the President of the the following enrolled bill: f United States were communicated to S. 858. An act to extend the Abraham Lin- the Senate by Ms. Evans, one of his coln Bicentennial Commission, and for other ART STEPHENSON’S EXCEPTIONAL purposes. secretaries. CONTRIBUTIONS f ∑ f Mr. SESSIONS. Mr. President, I SUBMISSION OF CONCURRENT AND would like to take this moment to pay EXECUTIVE MESSAGES REFERRED SENATE RESOLUTIONS tribute to Art Stephenson, former Di- As in executive session the Presiding The following concurrent resolutions rector of NASA’s Marshall Space Officer laid before the Senate messages Flight Center. and Senate resolutions were read, and from the President of the United referred (or acted upon), as indicated: Mr. Stephenson joined Marshall in States submitting sundry nominations 1998, and has overseen the Center’s By Mr. FRIST: which were referred to the appropriate S. Res. 192. An executive resolution to dis- work on critical NASA initiatives such committees. as development of new reusable launch charge the David W. McKeague nomination; (The nominations received today are which was ordered to lie over, under the rule. vehicles, Space Shuttle propulsion, ad- printed at the end of the Senate pro- By Mr. FRIST: vanced space transportation systems, ceedings.) S. Res. 193. An executive resolution to dis- research in microgravity, and science charge the Susan Bieke Neilson nomination; f payload operations aboard the Inter- which was ordered to lie over, under the rule. national Space Station, as well as the MESSAGE FROM THE HOUSE By Mr. FRIST: launch and continuing successful oper- RECEIVED DURING ADJOURNMENT S. Res. 194. An executive resolution to discharge the Henry W. Saad nomination; which ation of the Chandra X-ray Observ- Under the authority of the order of atory. Under his guidance the National was ordered to lie over, under the rule. January 7, 2003, the Secretary of the By Mr. FRIST: Space Science Technology Center, a Senate, on June 30, 2003, during the ad- S. Res. 195. An executive resolution to dis- NASA partnership with local univer- journment of the Senate, received a charge the Richard A. Griffin nomination; sities conducting cutting-edge propul- message from the House of Representa- which was ordered to lie over, under the rule. sion research, was established and tives announcing that the Speaker has f ground was broken for the critical Pro- signed the following enrolled bills and ADDITIONAL COSPONSORS pulsion Research Laboratory. joint resolution: S. 11 For his exceptional contributions to H.R. 2350. An Act to reauthorize the Tem- the space program and the nation, Art porary Assistance for Needy Families block At the request of Mr. ENSIGN, the Stephenson has been recognized with grant program through fiscal year 2003, and name of the Senator from Utah (Mr. the NASA Outstanding Leadership for other purposes. HATCH) was added as a cosponsor of S.

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00027 Fmt 0624 Sfmt 0634 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8896 CONGRESSIONAL RECORD — SENATE July 7, 2003 11, a bill to protect patients’ access to S. 875 (Mr. LEVIN) was added as a cosponsor of quality and affordable health care by At the request of Mr. KERRY, the S. 1034, a bill to repeal the sunset date reducing the effects of excessive liabil- name of the Senator from North Da- on the assault weapons ban, to ban the ity costs. kota (Mr. CONRAD) was added as a co- importation of large capacity ammuni- S. 98 sponsor of S. 875, a bill to amend the tion feeding devices, and for other pur- At the request of Mr. ALLARD, the Internal Revenue Code of 1986 to allow poses. name of the Senator from Arkansas an income tax credit for the provision S. 1082 (Mr. PRYOR) was added as a cosponsor of homeownership and community de- At the request of Mr. BROWNBACK, the of S. 98, a bill to amend the Bank Hold- velopment, and for other purposes. name of the Senator from Oklahoma ing Company Act of 1956, and the Re- S. 894 (Mr. INHOFE) was added as a cosponsor vised Statutes of the United States, to At the request of Mr. WARNER, the of S. 1082, a bill to provide support for prohibit financial holding companies names of the Senator from California democracy in Iran. (Mrs. FEINSTEIN), the Senator from and national banks from engaging, di- S. 1091 Louisiana (Mr. BREAUX) and the Sen- rectly or indirectly, in real estate bro- At the request of Mr. DURBIN, the ator from New Mexico (Mr. BINGAMAN) kerage or real estate management ac- name of the Senator from Washington were added as cosponsors of S. 894, a tivities, and for other purposes. (Ms. CANTWELL) was added as a cospon- S. 227 bill to require the Secretary of the Treasury to mint coins in commemora- sor of S. 1091, a bill to provide funding At the request of Mrs. FEINSTEIN, the for student loan repayment for public name of the Senator from Michigan tion of the 230th Anniversary of the United States Marine Corps, and to attorneys. (Ms. STABENOW) was added as a cospon- S. 1108 sor of S. 227, a bill to amend the Higher support construction of the Marine Corps Heritage Center. At the request of Mrs. CLINTON, the Education Act of 1965 to extend loan name of the Senator from Massachu- forgiveness for certain loans to cer- S. 939 At the request of Mr. HAGEL, the setts (Mr. KENNEDY) was added as a co- tified or licensed teachers, to provide sponsor of S. 1108, a bill to establish for grants that promote teacher certifi- name of the Senator from New Jersey (Mr. LAUTENBERG) was added as a co- within the National Park Service the cation and licensing, and for other pur- 225th Anniversary of the American poses. sponsor of S. 939, a bill to amend part B of the Individuals with Disabilities Revolution Commemorative Program, S. 247 Education Act to provide full Federal and for other purposes. At the request of Ms. SNOWE, the funding of such part, to provide an ex- S. 1245 names of the Senator from Michigan ception to the local maintenance of ef- At the request of Ms. COLLINS, the (Mr. LEVIN), the Senator from Ohio fort requirements, and for other pur- name of the Senator from Rhode Island (Mr. DEWINE) and the Senator from poses. (Mr. CHAFEE) was added as a cosponsor Ohio (Mr. VOINOVICH) were added as co- S. 950 of S. 1245, a bill to provide for home- sponsors of S. 247, a bill to reauthorize At the request of Mr. ENZI, the name land security grant coordination and the Harmful Algal Bloom and Hypoxia of the Senator from Rhode Island (Mr. simplification, and for other purposes. Research and Control Act of 1998, and REED) was added as a cosponsor of S. for other purposes. S. 1252 950, a bill to allow travel between the At the request of Mr. DAYTON, the S. 537 United States and Cuba. name of the Senator from New Jersey At the request of Mr. CRAPO, the S. 976 (Mr. CORZINE) was added as a cosponsor name of the Senator from Montana At the request of Mr. WARNER, the of S. 1252, a bill to provide benefits to (Mr. BAUCUS) was added as a cosponsor name of the Senator from Vermont domestic partners of Federal employ- of S. 537, a bill to ensure the avail- (Mr. LEAHY) was added as a cosponsor ees. ability of spectrum to amateur radio of S. 976, a bill to provide for the S. 1297 operators. issuance of a coin to commemorate the S. 557 At the request of Mr. TALENT, the 400th anniversary of the Jamestown name of the Senator from Oklahoma At the request of Ms. COLLINS, the settlement. (Mr. INHOFE) was added as a cosponsor name of the Senator from Iowa (Mr. S. 982 HARKIN) was added as a cosponsor of S. of S. 1297, a bill to amend title 28, At the request of Mrs. BOXER, the United States Code, with respect to the 557, a bill to amend the Internal Rev- name of the Senator from Washington enue Code of 1986 to exclude from gross jurisdiction of Federal courts inferior (Ms. CANTWELL) was added as a cospon- to the Supreme Court over certain income amounts received on account of sor of S. 982, a bill to halt Syrian sup- claims based on certain unlawful dis- cases and controversies involving the port for terrorism, end its occupation Pledge of Allegiance to the Flag. crimination and to allow income aver- of Lebanon, stop its development of S. 1303 aging for backpay and frontpay awards weapons of mass destruction, cease its received on account of such claims, and illegal importation of Iraqi oil, and At the request of Mr. BROWNBACK, the for other purposes. hold Syria accountable for its role in name of the Senator from Georgia (Mr. S. 623 the Middle East, and for other pur- MILLER) was added as a cosponsor of S. At the request of Mr. WARNER, the poses. 1303, a bill to amend title XVIII of the Social Security Act and otherwise re- names of the Senator from Georgia S. 1010 vise the Medicare Program to reform (Mr. CHAMBLISS), the Senator from New At the request of Mr. HARKIN, the Mexico (Mr. DOMENICI) and the Senator name of the Senator from Nevada (Mr. the method of paying for covered drugs, drug administration services, from Nebraska (Mr. NELSON) were REID) was added as a cosponsor of S. added as cosponsors of S. 623, a bill to 1010, a bill to enhance and further re- and chemotherapy support services. amend the Internal Revenue Code of search into paralysis and to improve S. 1333 1986 to allow Federal civilian and mili- rehabilitation and the quality of life At the request of Mr. GRASSLEY, the tary retirees to pay health insurance for persons living with paralysis and names of the Senator from Georgia premiums on a pretax basis and to other physical disabilities. (Mr. CHAMBLISS) and the Senator from allow a deduction for TRICARE supple- S. 1023 Ohio (Mr. DEWINE) were added as co- mental premiums. At the request of Mr. HATCH, the sponsors of S. 1333, a bill to amend the S. 639 name of the Senator from Mississippi Internal Revenue Code of 1986 to pro- At the request of Mr. DURBIN, the (Mr. LOTT) was withdrawn as a cospon- vide for the treatment of certain ex- name of the Senator from New Jersey sor of S. 1023, a bill to increase the an- penses of rural letter carriers. (Mr. LAUTENBERG) was added as a co- nual salaries of justices and judges of S. 1368 sponsor of S. 639, a bill to designate the United States. At the request of Mr. LEVIN, the certain Federal land in the State of S. 1034 names of the Senator from Utah (Mr. Utah as wilderness, and for other pur- At the request of Mrs. FEINSTEIN, the HATCH), the Senator from South Da- poses. name of the Senator from Michigan kota (Mr. DASCHLE), the Senator from

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RES. 151 (B) was rejected by the Secretary as a no- Congress to Reverend Doctor Martin At the request of Mr. GRASSLEY, the tice of disagreement pursuant to section Luther King, Jr. (posthumously) and name of the Senator from Nebraska 20.201 of title 38, Code of Federal Regula- his widow Coretta Scott King in rec- (Mr. HAGEL) was added as a cosponsor tions. ognition of their contributions to the of S. Res. 151, a resolution eliminating (4) A document may not be treated as a no- Nation on behalf of the civil rights secret Senate holds. tice of disagreement under paragraph (2) un- movement. less a request for such treatment is filed by S. RES. 167 the claimant, or a motion is made by the S. CON. RES. 21 At the request of Mr. BUNNING, his Secretary, not later than one year after the At the request of Mr. BUNNING, the name was added as a cosponsor of S. date of the enactment of this Act. name of the Senator from South Da- Res. 167, a resolution recognizing the f kota (Mr. JOHNSON) was added as a co- 100th anniversary of the founding of sponsor of S. Con. Res. 21, a concurrent the Harley-Davidson Motor Company, SUBMITTED RESOLUTIONS resolution expressing the sense of the which has been a significant part of the social, economic, and cultural heritage Congress that community inclusion SENATE RESOLUTION 192—TO DIS- of the United States and many other and enhanced lives for individuals with CHARGE THE DAVID W. nations and a leading force for product mental retardation or other develop- McKEAGUE NOMINATION mental disabilities is at serious risk and manufacturing innovation because of the crisis in recruiting and throughout the 20th century. Mr. FRIST submitted the following retaining direct support professionals, S. RES. 169 resolution; which was submitted and which impedes the availability of a sta- At the request of Mrs. CLINTON, the read: ble, quality direct support workforce. name of the Senator from Massachu- S. RES. 192 S. CON. RES. 25 setts (Mr. KENNEDY) was added as a co- Resolved, That the Committee on the Judi- ciary is discharged from the further consid- At the request of Mr. VOINOVICH, the sponsor of S. Res. 169, a resolution ex- eration of the nomination of David W. name of the Senator from Alabama pressing the sense of the Senate that the United States Postal Service McKeague, of Michigan, to be a United (Mr. SESSIONS) was added as a cospon- States Circuit Judge for the Sixth Circuit. sor of S. Con. Res. 25, a concurrent res- should issue a postage stamp com- f olution recognizing and honoring memorating Anne Frank. America’s Jewish community on the f SENATE RESOLUTION 193—TO DIS- occasion of its 350th anniversary, sup- INTRODUCED BILLS—CORRECTED CHARGE THE SUSAN BIEKE porting the designation of an ‘‘Amer- TEXT—June 26, 2003 NEILSON NOMINATION ican Jewish History Month’’, and for By Mr. GRAHAM of Florida: Mr. FRIST submitted the following other purposes. S. 1360. A bill to amend section 7105 of title resolution; which was submitted and S. CON. RES. 33 38, United States Code, to clarify the re- read: At the request of Mr. CRAIG, the quirements for notices of disagreement for S. RES. 193 name of the Senator from Washington appellate review of Department of Veterans Resolved, That the Committee on the Judi- (Ms. CANTWELL) was added as a cospon- Affairs activities; to the Committee on Vet- ciary is discharged from the further consid- sor of S. Con. Res. 33, a concurrent res- erans’ Affairs. eration of the nomination of Susan Bieke olution expressing the sense of the S. 1360 Neilson, of Michigan, to be a United States Congress regarding scleroderma. Be it enacted by the Senate and House of Rep- Circuit Judge for the Sixth Circuit. resentatives of the United States of America in f S. CON. RES. 40 Congress assembled, At the request of Mrs. CLINTON, the SECTION 1. CLARIFICATION OF NOTICE OF DIS- SENATE RESOLUTION 194—TO DIS- name of the Senator from Oregon (Mr. AGREEMENT FOR APPELLATE RE- CHARGE THE HENRY W. SAAD WYDEN) was added as a cosponsor of S. VIEW OF DEPARTMENT OF VET- NOMINATION ERANS AFFAIRS ACTIVITIES. Con. Res. 40, a concurrent resolution (a) CLARIFICATION.—Section 7105(b) of title Mr. FRIST submitted the following designating August 7, 2003, as ‘‘Na- 38, United States Code, is amended by adding resolution; which was submitted and tional Purple Heart Recognition Day’’. at the end the following new paragraph: read: S. CON. RES. 45 ‘‘(3) A document that meets the requirements of the second sentence of paragraph S. RES. 194 At the request of Ms. LANDRIEU, the (1) and the first sentence of paragraph (2) Resolved, That the Committee on the Judi- name of the Senator from Alabama shall be recognized as a notice of disagree- ciary is discharged from the further consid- (Mr. SESSIONS) was added as a cospon- ment for purposes of this section.’’. eration of the nomination of Henry W. Saad, sor of S. Con. Res. 45, a concurrent res- (b) EFFECTIVE DATE.—(1) Except as specifi- of Michigan, to be a United States Circuit olution expressing appreciation to the cally provided otherwise, paragraph (3) of Judge for the Sixth Circuit. Government of Kuwait for the medical section 7105(b) of title 38, United States Code f assistance it provided to Ali Ismaeel (as added by subsection (a) of this section), SENATE RESOLUTION 195—TO DIS- Abbas and other children of Iraq and shall apply to any document— (A) filed under section 7105 of such title on CHARGE THE RICHARD A. GRIF- for the additional humanitarian aid or after the date of the enactment of this FIN NOMINATION provided by the Government and people Act; or of Kuwait, and for other purposes. (B) filed under section 7105 of such title be- Mr. FRIST submitted the following S. RES. 109 fore the date of the enactment of this Act resolution; which was submitted and At the request of Mr. FEINGOLD, the and not rejected by the Secretary of Vet- read: name of the Senator from Mississippi erans Affairs as a notice of disagreement S. RES. 195 pursuant to section 20.201 of title 38, Code of (Mr. COCHRAN) was added as a cospon- Resolved, That the Committee on the Judi- Federal Regulations, as of that date. ciary is discharged from the further consid- sor of S . Res. 109, a resolution express- (2) In the case of a document described in eration of the nomination of Richard A. Grif- ing the sense of the Senate with re- paragraph (3) of this subsection, the Sec- fin, of Michigan, to be a United States Cir- spect to polio. retary shall, upon the request of the claim- cuit Judge for the Sixth Circuit. S. RES. 140 ant or the Secretary’s own motion, order the document treated as a notice of disagree- f At the request of Mr. CAMPBELL, the ment under section 7105 of such title as if the names of the Senator from Connecticut AMENDMENTS SUBMITTED & document had not been rejected by the Sec- PROPOSED (Mr. DODD), the Senator from New Mex- retary as a notice of disagreement pursuant ico (Mr. BINGAMAN), the Senator from to section 20.201 of title 38, Code of Federal SA 1134. Mr. FRIST proposed an amend- Maine (Ms. COLLINS) and the Senator Regulations. ment to the bill H.R. 1, To amend title XVIII

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of the Social Security Act to provide for a COMMITTEE ON ENERGY AND NATURAL SECTION 1. SHORT TITLE; AMENDMENTS TO SO- voluntary program for prescription drug cov- RESOURCES CIAL SECURITY ACT; REFERENCES erage under the Medicare Program, to mod- Mr. DOMENICI. Mr. President, I TO BIPA AND SECRETARY; TABLE OF ernize the Medicare Program, to amend the CONTENTS. would like to announce for the infor- (a) SHORT TITLE.—This Act may be cited as Internal Revenue Code of 1986 to allow a de- mation of the Senate and the public duction to individuals for amounts contrib- the ‘‘Prescription Drug and Medicare Improve- uted to health savings security accounts and that a hearing has been scheduled be- ment Act of 2003’’. health savings accounts, to provide for the fore the Committee on Energy and Nat- (b) AMENDMENTS TO SOCIAL SECURITY ACT.— disposition of unused health benefits in cafe- ural Resources. Except as otherwise specifically provided, when- teria plans and flexible spending arrange- The hearing will take place on ever in this Act an amendment is expressed in ments, and for other purposes. Wednesday, July 16, at 2:30 p.m. in terms of an amendment to or repeal of a section Room 366 Dirksen Senate Office Build- or other provision, the reference shall be consid- f ered to be made to that section or other provi- ing in Washington, DC. sion of the Social Security Act. TEXT OF AMENDMENTS—June 26, The purpose of this hearing is to con- 2003 (c) BIPA; SECRETARY.—In this Act: sider the nomination of Suedeen G. (1) BIPA.—The term ‘‘BIPA’’ means the Medi- SA 1124. Mr. ROBERTS submitted an Kelly to be a Member at the Federal care, Medicaid, and SCHIP Benefits Improve- amendment intended to be proposed by Energy Regulatory Commission. ment and Protection Act of 2000, as enacted into him to the bill S. 1, to amend title For further information, please con- law by section 1(a)(6) of Public Law 106–554. XVIII of the Social Security Act to tact Judy Pensabene of the Committee (2) SECRETARY.—The term ‘‘Secretary’’ means provide for a voluntary prescription staff at 202–224–1327. the Secretary of Health and Human Services. (d) TABLE OF CONTENTS.—The table of con- drug benefit under the Medicare pro- f gram and to strengthen and improve tents of this Act is as follows: the Medicare program, and for other PRESCRIPTION DRUG AND MEDI- Sec. 1. Short title; amendments to Social Secu- purposes; which was ordered to lie on CARE IMPROVEMENT ACT OF 2003 rity Act; references to BIPA and Secretary; table of contents. the table; as follows: Mr. FRIST. Mr. President, I under- TITLE I—MEDICARE PRESCRIPTION DRUG On page 159, line 19, insert the following stand that the House companion bill to BENEFIT before the closing quotation: ‘‘As part of S. 1 is at the desk, and before the Chair such review, the Commission shall hold 3 appoints conferees pursuant to the Subtitle A—Medicare Voluntary Prescription Drug Delivery Program field hearings in 2007.’’. order of June 26, I ask unanimous consent that the title amendment, which Sec. 101. Medicare voluntary prescription drug SA 1134. Mr. FRIST proposed an delivery program. amendment to the bill H.R. 1, To is at the desk, be agreed to. The PRESIDING OFFICER. Without ‘‘PART D—VOLUNTARY PRESCRIPTION DRUG amend title XVIII of the Social Secu- DELIVERY PROGRAM rity Act to provide for a voluntary pro- objection, it is so ordered. The amendment (No. 1134) was agreed ‘‘Sec. 1860D. Definitions; treatment of ref- gram for prescription drug coverage to, as follows: erences to provisions in under the Medicare Program, to mod- MedicareAdvantage program. AMENDMENT NO. 1134 ernize the Medicare Program, to amend ‘‘Subpart 1—Establishment of Voluntary the Internal Revenue Code of 1986 to Amend the title so as to read: ‘‘An act to Prescription Drug Delivery Program amend title XVIII of the Social Security Act allow a deduction to individuals for to provide for a voluntary prescription drug ‘‘Sec. 1860D–1. Establishment of voluntary amounts contributed to health savings benefit under the medicare program and to prescription drug delivery pro- security accounts and health savings strengthen and improve the medicare program. accounts, to provide for the disposition gram, and for other purposes.’’. ‘‘Sec. 1860D–2. Enrollment under program. ‘‘Sec. 1860D–3. Election of a Medicare Pre- of unused health benefits in cafeteria The PRESIDING OFFICER. Under plans and flexible spending arrange- scription Drug plan. the previous order, H.R. 1 having been ‘‘Sec. 1860D–4. Providing information to ments, and for other purposes; as fol- received from the House, the Senate beneficiaries. lows: shall proceed to its consideration, all ‘‘Sec. 1860D–5. Beneficiary protections. Amend the title so as to read: ‘‘An act to after the enacting clause shall be ‘‘Sec. 1860D–6. Prescription drug benefits. amend title XVIII of the Social Security Act stricken and the text of S. 1 as passed ‘‘Sec. 1860D–7. Requirements for entities of- to provide for a voluntary prescription drug inserted in lieu thereof, the bill shall fering Medicare Prescription Drug benefit under the medicare program and to plans; establishment of standards. be read a third time and passed, with strengthen and improve the medicare pro- ‘‘Subpart 2—Prescription Drug Delivery System gram, and for other purposes.’’. the motion to reconsider laid on the table; further, the Senate insists on its ‘‘Sec. 1860D–10. Establishment of service f areas. amendments and requests a conference NOTICES OF HEARINGS/MEETINGS ‘‘Sec. 1860D–11. Publication of risk adjust- with the House, and the Chair is au- ers. COMMITTEE ON INDIAN AFFAIRS thorized to appoint conferees with a ‘‘Sec. 1860D–12. Submission of bids for pro- Mr. CAMPBELL. Mr. President, I ratio of 5 to 4. posed Medicare Prescription Drug would like to announce that the Com- The Presiding Officer appointed Mr. plans. mittee on Indian Affairs will meet on GRASSLEY, Mr. HATCH, Mr. NICKLES, ‘‘Sec. 1860D–13. Approval of proposed Medi- Wednesday, July 9, 2003, at 10 a.m. in Mr. FRIST, Mr. KYL, Mr. BAUCUS, Mr. care Prescription Drug plans. ‘‘Sec. 1860D–14. Computation of monthly Room 106 of the Dirksen Senate Office ROCKEFELLER, Mr. DASCHLE, and Mr. standard prescription drug cov- Building to conduct an Oversight Hear- BREAUX conferees on the part of the erage premiums. ing on the Indian Gaming Regulatory Senate. ‘‘Sec. 1860D–15. Computation of monthly Act. The bill (H.R. 1), as amended, was national average premium. Those wishing additional information read the third time and passed, as fol- ‘‘Sec. 1860D–16. Payments to eligible enti- may contact the Indian Affairs Com- lows: ties. mittee at 224–2251. Resolved, That the bill from the House of ‘‘Sec. 1860D–17. Computation of monthly COMMITTEE ON RULES AND ADMINISTRATION Representatives (H.R. 1) entitled ‘‘An Act to beneficiary obligation. Mr. LOTT. Mr. President, I wish to amend title XVIII of the Social Security Act ‘‘Sec. 1860D–18. Collection of monthly bene- to provide for a voluntary program for pre- ficiary obligation. announce that the Committee on Rules scription drug coverage under the Medicare ‘‘Sec. 1860D–19. Premium and cost-sharing and Administration will meet at 9:30 Program, to modernize the Medicare Pro- subsidies for low-income individ- a.m., Wednesday, July 9, 2003, in Room gram, to amend the Internal Revenue Code uals. 301 Russell Senate Office Building to of 1986 to allow a deduction to individuals for ‘‘Sec. 1860D–20. Reinsurance payments for conduct a hearing on Senate Resolu- amounts contributed to health savings secu- expenses incurred in providing tion 173 proposing changes in Rule XVI rity accounts and health savings accounts, prescription drug coverage above of the Standing Rules of the Senate as to provide for the disposition of unused the annual out-of-pocket threshold. they relate to unauthorized appropria- health benefits in cafeteria plans and flexible spending arrangements, and for other pur- ‘‘Sec. 1860D–21. Direct subsidy for sponsor tions. poses.’’, do pass with the following amend- of a qualified retiree prescription For further information concerning ments: drug plan for plan enrollees eligi- this meeting, please contact Susan Strike out all after the enacting clause and ble for, but not enrolled in, this Wells at 202–224–6352. insert: part.

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00030 Fmt 0624 Sfmt 6343 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8899 ‘‘Sec. 1860D–22. Direct subsidies for quali- Sec. 225. Expanding the work of medicare qual- Sec. 417. Treatment of certain entities for pur- fied State offering a State phar- ity improvement organizations to poses of payments under the medi- maceutical assistance program for include parts C and D. care program. program enrollees eligible for, but Sec. 226. Extension of demonstration for ESRD Sec. 418. Revision of the indirect medical edu- not enrolled in, this part. managed care. cation (IME) adjustment percent- ‘‘Subpart 3—Miscellaneous Provisions SUBTITLE D—EVALUATION OF ALTERNATIVE age. Sec. 419. Calculation of wage indices for hos- ‘‘Sec. 1860D–25. Prescription Drug Account PAYMENT AND DELIVERY SYSTEMS pitals. in the Federal Supplementary Sec. 231. Establishment of alternative payment Sec. 420. Conforming changes regarding feder- Medical Insurance Trust Fund. system for preferred provider orally qualified health centers. ‘‘Sec. 1860D–26. Other related provisions. ganizations in highly competitive Sec. 420A. Increase for hospitals with dis- Sec. 102. Study and report on permitting part B regions. proportionate indigent care reve- only individuals to enroll in medi- Sec. 232. Fee-for-service modernization projects. nues. care voluntary prescription drug SUBTITLE E—NATIONAL BIPARTISAN COMMISSION Sec. 420B. Treatment of grandfathered long- delivery program. ON MEDICARE REFORM term care hospitals. Sec. 103. Rules relating to medigap policies that Sec. 241. MedicareAdvantage goal; establish- Subtitle B—Provisions Relating to Part B provide prescription drug cov- ment of Commission. Sec. 421. Establishment of floor on geographic erage. Sec. 242. National bipartisan commission on adjustments of payments for phy- Sec. 104. Medicaid and other amendments re- medicare reform. sicians’ services. lated to low-income beneficiaries. Sec. 243. Congressional consideration of reform Sec. 422. Medicare incentive payment program Sec. 105. Expansion of membership and duties proposals. improvements. of Medicare Payment Advisory Sec. 244. Authorization of appropriations. Sec. 423. Extension of hold harmless provisions Commission (MedPAC). for small rural hospitals and Sec. 106. Study regarding variations in spend- TITLE III—CENTER FOR MEDICARE treatment of certain sole commu- ing and drug utilization. CHOICES nity hospitals to limit decline in Sec. 107. Limitation on prescription drug bene- Sec. 301. Establishment of the Center for Medi- payment under the OPD PPS. fits of Members of Congress. care Choices. Sec. 424. Increase in payments for certain serv- Sec. 108. Protecting seniors with cancer. Sec. 302. Miscellaneous administrative provi- ices furnished by small rural and Sec. 109. Protecting seniors with cardiovascular sions. disease, cancer, or Alzheimer’s sole community hospitals under TITLE IV—MEDICARE FEE-FOR-SERVICE medicare prospective payment sys- disease. IMPROVEMENTS Sec. 110. Review and report on current stand- tem for hospital outpatient de- Subtitle A—Provisions Relating to Part A ards of practice for pharmacy partment services. Sec. 425. Temporary increase for ground ambu- services provided to patients in Sec. 401. Equalizing urban and rural standard- lance services. nursing facilities. ized payment amounts under the Sec. 426. Ensuring appropriate coverage of air Sec. 110A. Medication therapy management as- medicare inpatient hospital pro- ambulance services under ambu- sessment program. spective payment system. lance fee schedule. Subtitle B—Medicare Prescription Drug Dis- Sec. 402. Adjustment to the medicare inpatient hospital PPS wage index to revise Sec. 427. Treatment of certain clinical diag- count Card and Transitional Assistance for nostic laboratory tests furnished Low-Income Beneficiaries the labor-related share of such index. by a sole community hospital. Sec. 111. Medicare prescription drug discount Sec. 403. Medicare inpatient hospital payment Sec. 428. Improvement in rural health clinic re- card and transitional assistance adjustment for low-volume hos- imbursement. for low-income beneficiaries. pitals. Sec. 429. Elimination of consolidated billing for Subtitle C—Standards for Electronic Prescribing Sec. 404. Fairness in the medicare dispropor- certain services under the medicare PPS for skilled nursing facil- Sec. 121. Standards for electronic prescribing. tionate share hospital (DSH) ad- ity services. Subtitle D—Other Provisions justment for rural hospitals. Sec. 404A. Medpac study and report regarding Sec. 430. Freeze in payments for certain items of Sec. 131. Additional requirements for annual fi- medicare Disproportionate Share durable medical equipment and nancial report and oversight on Hospital (DSH) adjustment pay- certain orthotics; establishment of medicare program. ments. quality standards and accredita- Sec. 132. Trustees’ report on medicare’s un- Sec. 405. Critical access hospital (CAH) im- tion requirements for DME pro- funded obligations. provements. viders. Sec. 133. Pharmacy benefit managers trans- Sec. 431. Application of coinsurance and de- Sec. 406. Authorizing use of arrangements to parency requirements. ductible for clinical diagnostic provide core hospice services in Sec. 134. Office of the Medicare Beneficiary Ad- laboratory tests. certain circumstances. vocate. Sec. 432. Basing medicare payments for covered Sec. 407. Services provided to hospice patients outpatient drugs on market TITLE II—MEDICAREADVANTAGE by nurse practitioners, clinical prices. Subtitle A—MedicareAdvantage Competition nurse specialists, and physician Sec. 433. Indexing part B deductible to infla- assistants. Sec. 201. Eligibility, election, and enrollment. tion. Sec. 202. Benefits and beneficiary protections. Sec. 408. Authority to include costs of training Sec. 434. Revisions to reassignment provisions. Sec. 203. Payments to MedicareAdvantage orga- of psychologists in payments to Sec. 435. Extension of treatment of certain phy- nizations. hospitals under medicare. sician pathology services under Sec. 204. Submission of bids; premiums. Sec. 409. Revision of Federal rate for hospitals medicare. Sec. 205. Special rules for prescription drug in Puerto Rico. Sec. 436. Adequate reimbursement for out- benefits. Sec. 410. Exception to initial residency period patient pharmacy therapy under Sec. 206. Facilitating employer participation. for geriatric residency or fellow- the hospital outpatient PPS. Sec. 207. Administration by the Center for ship programs. Sec. 437. Limitation of application of functional Medicare Choices. Sec. 411. Clarification of congressional intent equivalence standard. Sec. 208. Conforming amendments. regarding the counting of resi- Sec. 438. Medicare coverage of routine costs as- Sec. 209. Effective date. dents in a nonprovider setting sociated with certain clinical Sec. 210. Improvements in MedicareAdvantage and a technical amendment re- trials. benchmark determinations. garding the 3-year rolling average Sec. 439. Waiver of part B late enrollment pen- Subtitle B—Preferred Provider Organizations and the IME ratio. alty for certain military retirees; Sec. 412. Limitation on charges for inpatient Sec. 211. Establishment of MedicareAdvantage special enrollment period. hospital contract health services preferred provider program op- Sec. 440. Demonstration of coverage of chiro- provided to Indians by medicare tion. practic services under medicare. participating hospitals. Sec. 441. Medicare health care quality dem- Subtitle C—Other Managed Care Reforms Sec. 413. GAO study and report on appropriate- onstration programs. Sec. 221. Extension of reasonable cost contracts. ness of payments under the pro- Sec. 442. Medicare complex clinical care man- Sec. 222. Specialized Medicare+Choice plans for spective payment system for inpa- agement payment demonstration. special needs beneficiaries. tient hospital services. Sec. 443. Medicare fee-for-service care coordina- Sec. 223. Payment by PACE providers for medi- Sec. 414. Rural community hospital demonstration demonstration program. care and medicaid services fur- tion program. Sec. 444. GAO study of geographic differences nished by noncontract providers. Sec. 415. Critical access hospital improvement in payments for physicians’ serv- Sec. 224. Institute of Medicine evaluation and demonstration program. ices. report on health care performance Sec. 416. Treatment of grandfathered long-term Sec. 445. Improved payment for certain mam- measures. care hospitals. mography services.

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00031 Fmt 0624 Sfmt 6343 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8900 CONGRESSIONAL RECORD — SENATE July 7, 2003 Sec. 446. Improvement of outpatient vision serv- Sec. 463. Increase in medicare payment for cer- Sec. 603. Increased reporting requirements to ices under Part B. tain home health services. ensure the appropriateness of Sec. 447. GAO study and report on the propaga- Sec. 464. Sense of the Senate concerning medi- payment adjustments to dis- tion of concierge care. care payment update for physi- proportionate share hospitals Sec. 448. Coverage of marriage and family ther- cians and other health profes- under the medicaid program. apist services and mental health sionals. Sec. 604. Clarification of inclusion of inpatient counselor services under Part B of TITLE V—MEDICARE APPEALS, REGU- drug prices charged to certain the medicare program. LATORY, AND CONTRACTING IMPROVE- public hospitals in the best price Sec. 449. Medicare demonstration project for di- MENTS exemptions for the medicaid drug rect access to physical therapy Subtitle A—Regulatory Reform rebate program. services. Sec. 605. Assistance with coverage of legal im- Sec. 501. Rules for the publication of a final Sec. 450. Demonstration project to clarify the migrants under the medicaid pro- regulation based on the previous definition of homebound. gram and SCHIP. publication of an interim final Sec. 450A. Demonstration project for exclusion Sec. 606. Establishment of consumer ombuds- of brachytherapy devices from regulation. Sec. 502. Compliance with changes in regula- man account. prospective payment system for Sec. 607. GAO study regarding impact of assets outpatient hospital services. tions and policies. Sec. 503. Report on legal and regulatory incon- test for low-income beneficiaries. Sec. 450B. Reimbursement for total body sistencies. Sec. 608. Health care infrastructure improve- orthotic management for certain Sec. 504. Streamlining and simplification of ment. nursing home patients. medicare regulations. Sec. 609. Capital infrastructure revolving loan Sec. 450C. Authorization of reimbursement for program. Subtitle B—Appeals Process Reform all medicare part B services fur- Sec. 610. Federal reimbursement of emergency nished by certain Indian hospitals Sec. 511. Submission of plan for transfer of re- health services furnished to un- and clinics. sponsibility for medicare appeals. documented aliens. Sec. 450D. Coverage of cardiovascular screening Sec. 512. Expedited access to judicial review. Sec. 611. Increase in appropriation to the Sec. 513. Expedited review of certain provider tests. health care fraud and abuse con- agreement determinations. Sec. 450E. Medicare coverage of self-injected trol account. biologicals. Sec. 514. Revisions to medicare appeals process. Sec. 515. Hearing rights related to decisions by Sec. 612. Increase in civil penalties under the Sec. 450F. Extension of medicare secondary False Claims Act. payer rules for individuals with the Secretary to deny or not renew a medicare enrollment Sec. 613. Increase in civil monetary penalties end-stage renal disease. under the Social Security Act. Sec. 450G. Requiring the Internal Revenue agreement; consultation before changing provider enrollment Sec. 614. Extension of customs user fees. Service to deposit installment Sec. 615. Reimbursement for federally qualified agreement and other fees in the forms. Sec. 516. Appeals by providers when there is no health centers participating in Treasury as miscellaneous re- medicare managed care. ceipts. other party available. Sec. 517. Provider access to review of local cov- Sec. 616. Provision of information on advance Sec. 450H. Increasing types of originating tele- erage determinations. directives. health sites and facilitating the Sec. 518. Revisions to appeals timeframes. Sec. 617. Sense of the Senate regarding imple- provision of telehealth services Sec. 519. Elimination of requirement to use So- mentation of the Prescription across State lines. cial Security Administration Ad- Drug and Medicare Improvement Sec. 450I. Demonstration project for coverage of ministrative Law Judges. Act of 2003. surgical first assisting services of Sec. 520. Elimination of requirement for de novo Sec. 618. Extension of municipal health service certified registered nurse first as- review by the departmental ap- demonstration projects. sistants. peals board. Sec. 619. Study on making prescription pharma- Sec. 450J. Equitable treatment for children’s Subtitle C—Contracting Reform ceutical information accessible for hospitals. blind and visually-impaired indi- Sec. 450K. Treatment of physicians’ services Sec. 521. Increased flexibility in medicare administration. viduals. furnished in Alaska. Sec. 620. Health care that works for all ameri- Sec. 450L. Demonstration project to examine Subtitle D—Education and Outreach cans-citizens health care working what weight loss weight manage- Improvements group. ment services can cost effectively Sec. 531. Provider education and technical as- Sec. 621. GAO study of pharmaceutical price reach the same result as the NIH sistance. controls and patent protections in Diabetes Primary Prevention Sec. 532. Access to and prompt responses from the G–7 countries. Trial study: A 50 percent reduc- medicare contractors. Sec. 622. Sense of the Senate concerning medi- tion in the risk for type 2 diabetes Sec. 533. Reliance on guidance. care payment update for physi- Sec. 534. Medicare provider ombudsman. for individuals who have impaired cians and other health profes- Sec. 535. Beneficiary outreach demonstration glucose tolerance and are obese. sionals. programs. Subtitle C—Provisions Relating to Parts A and Sec. 623. Restoration of Federal Hospital Insur- B Subtitle E—Review, Recovery, and Enforcement ance Trust Fund. Reform Sec. 451. Increase for home health services fur- Sec. 624. Safety net organizations and Patient nished in a rural area. Sec. 541. Prepayment review. Advisory Commission. Sec. 452. Limitation on reduction in area wage Sec. 542. Recovery of overpayments. Sec. 625. Urban health provider adjustment. Sec. 543. Process for correction of minor errors adjustment factors under the pro- Sec. 626. Committee on drug compounding. and omissions on claims without spective payment system for home Sec. 627. Sense of the Senate concerning the pursuing appeals process. structure of medicare reform and health services. Sec. 544. Authority to waive a program exclu- Sec. 453. Clarifications to certain exceptions to the prescription drug benefit. sion. medicare limits on physician re- Sec. 628. Sense of the Senate regarding the es- ferrals. SUBTITLE F—OTHER IMPROVEMENTS tablishment of a nationwide per- Sec. 454. Demonstration program for substitute Sec. 551. Inclusion of additional information in manent lifestyle modification pro- adult day services. notices to beneficiaries about gram for medicare beneficiaries. Sec. 455. MEDPAC study on medicare payments skilled nursing facility and hos- Sec. 629. Sense of the Senate on payment reduc- and efficiencies in the health care pital benefits. tions under medicare physician system. Sec. 552. Information on medicare-certified fee schedule. Sec. 456. Medicare coverage of kidney disease skilled nursing facilities in hos- Sec. 630. Temporary suspension of oasis re- education services. pital discharge plans. quirement for collection of data Sec. 457. Frontier extended stay clinic dem- Sec. 553. Evaluation and management docu- on non-medicare and non-med- onstration project. mentation guidelines consider- icaid patients. Sec. 458. Improvements in national coverage de- ation. Sec. 631. Employer flexibility. termination process to respond to Sec. 554. Council for Technology and Innova- Sec. 632. One Hundred percent FMAP for med- changes in technology. tion. ical assistance provided to a Na- Sec. 459. Increase in medicare payment for cer- Sec. 555. Treatment of certain dental claims. tive Hawaiian through a feder- tain home health services. TITLE VI—OTHER PROVISIONS ally-qualified health center or a Sec. 460. Frontier extended stay clinic dem- Sec. 601. Increase in medicaid DSH allotments Native Hawaiian health care sys- onstration project. for fiscal years 2004 and 2005. tem under the medicaid program. Sec. 461. Medicare secondary payor (MSP) pro- Sec. 602. Increase in floor for treatment as an Sec. 633. Extension of moratorium. visions. extremely low DSH State under Sec. 634. GAO study of pharmaceutical price Sec. 462. Medicare pancreatic islet cell trans- the medicaid program for fiscal controls and patent protections in plant demonstration project. years 2004 and 2005. the G–7 countries.

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00032 Fmt 0624 Sfmt 6343 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8901 Sec. 635. Safety Net Organizations and Patient so considered if such payment is not available ‘‘(1) any reference to a MedicareAdvantage Advisory Commission. under part A or B or because benefits under plan included a reference to a Medicare Pre- Sec. 636. Establishment of program to prevent such parts have been exhausted. scription Drug plan; abuse of nursing facility resi- ‘‘(C) APPLICATION OF FORMULARY RESTRIC- ‘‘(2) any reference to a provider-sponsored or- dents. TIONS.—A drug prescribed for an individual that ganization included a reference to an eligible Sec. 637. Office of Rural Health Policy Improve- would otherwise be a covered drug under this entity; ments. part shall not be so considered under a plan if ‘‘(3) any reference to a contract under section TITLE VII—ACCESS TO AFFORDABLE the plan excludes the drug under a formulary 1857 included a reference to a contract under PHARMACEUTICALS and such exclusion is not successfully resolved section 1860D–7(b); and under subsection (d) or (e)(2) of section 1860D– ‘‘(4) any reference to part C included a ref- Sec. 701. Short title. erence to this part. Sec. 702. 30-month stay-of-effectiveness period. 5. ‘‘(D) APPLICATION OF GENERAL EXCLUSION Sec. 703. Forfeiture of 180-day exclusivity pe- ‘‘Subpart 1—Establishment of Voluntary PROVISIONS.—A Medicare Prescription Drug riod. Prescription Drug Delivery Program Sec. 704. Bioavailability and bioequivalence. plan or a MedicareAdvantage plan may exclude ‘‘ESTABLISHMENT OF VOLUNTARY PRESCRIPTION Sec. 705. Remedies for infringement. from qualified prescription drug coverage any DRUG DELIVERY PROGRAM Sec. 706. Conforming amendments. covered drug— ‘‘SEC. 1860D–1. (a) PROVISION OF BENEFIT.— ‘‘(i) for which payment would not be made if ‘‘(1) IN GENERAL.—The Administrator shall TITLE VIII—IMPORTATION OF section 1862(a) applied to part D; or PRESCRIPTION DRUGS provide for and administer a voluntary prescrip- ‘‘(ii) which are not prescribed in accordance tion drug delivery program under which each el- Sec. 801. Importation of prescription drugs. with the plan or this part. igible beneficiary enrolled under this part shall TITLE IX—DRUG COMPETITION ACT OF Such exclusions are determinations subject to be provided with access to qualified prescription 2003 reconsideration and appeal pursuant to section drug coverage as follows: Sec. 901. Short title. 1860D–5(e). ‘‘(A) MEDICAREADVANTAGE ENROLLEES RE- Sec. 902. Findings. ‘‘(3) ELIGIBLE BENEFICIARY.—The term ‘eligi- CEIVE COVERAGE THROUGH MEDICAREADVANTAGE Sec. 903. Purposes. ble beneficiary’ means an individual who is en- PLAN.— Sec. 904. Definitions. titled to, or enrolled for, benefits under part A ‘‘(i) IN GENERAL.—Except as provided in Sec. 905. Notification of agreements. and enrolled under part B (other than a dual el- clause (ii), an eligible beneficiary who is en- Sec. 906. Filing deadlines. igible individual, as defined in section 1860D– rolled under this part and enrolled in a Sec. 907. Disclosure exemption. 19(a)(4)(E)). MedicareAdvantage plan offered by a Sec. 908. Enforcement. ‘‘(4) ELIGIBLE ENTITY.—The term ‘eligible enti- MedicareAdvantage organization shall receive Sec. 909. Rulemaking. ty’ means any risk-bearing entity that the Ad- coverage of benefits under this part through Sec. 910. Savings clause. ministrator determines to be appropriate to pro- such plan. Sec. 911. Effective date. vide eligible beneficiaries with the benefits ‘‘(ii) EXCEPTION FOR ENROLLEES IN TITLE I—MEDICARE PRESCRIPTION DRUG under a Medicare Prescription Drug plan, in- MEDICAREADVANTAGE MSA PLANS.—An eligible BENEFIT cluding— beneficiary who is enrolled under this part and ‘‘(A) a pharmaceutical benefit management enrolled in an MSA plan under part C shall re- Subtitle A—Medicare Voluntary Prescription company; ceive coverage of benefits under this part Drug Delivery Program ‘‘(B) a wholesale or retail pharmacist delivery through enrollment in a Medicare Prescription SEC. 101. MEDICARE VOLUNTARY PRESCRIPTION system; Drug plan that is offered in the geographic area DRUG DELIVERY PROGRAM. ‘‘(C) an insurer (including an insurer that of- in which the beneficiary resides. For purposes of (a) ESTABLISHMENT.—Title XVIII (42 U.S.C. fers medicare supplemental policies under sec- this part, the term ‘MSA plan’ has the meaning 1395 et seq.) is amended by redesignating part D tion 1882); given such term in section 1859(b)(3). as part E and by inserting after part C the fol- ‘‘(D) any other risk-bearing entity; or ‘‘(iii) EXCEPTION FOR ENROLLEES IN lowing new part: ‘‘(E) any combination of the entities described MEDICAREADVANTAGE PRIVATE FEE-FOR-SERVICE ‘‘PART D—VOLUNTARY PRESCRIPTION DRUG in subparagraphs (A) through (D). PLANS.—An eligible beneficiary who is enrolled DELIVERY PROGRAM ‘‘(5) INITIAL COVERAGE LIMIT.—The term ‘ini- under this part and enrolled in a private fee-for- tial coverage limit’ means the limit as estab- ‘‘DEFINITIONS; TREATMENT OF REFERENCES TO service plan under part C shall— lished under section 1860D–6(c)(3), or, in the PROVISIONS IN MEDICAREADVANTAGE PROGRAM ‘‘(i) receive benefits under this part through case of coverage that is not standard prescrip- such plan if the plan provides qualified pre- ‘‘SEC. 1860D. (a) DEFINITIONS.—In this part: tion drug coverage, the comparable limit (if any) scription drug coverage; and ‘‘(1) ADMINISTRATOR.—The term ‘Adminis- established under the coverage. ‘‘(ii) if the plan does not provide qualified pre- trator’ means the Administrator of the Center ‘‘(6) MEDICAREADVANTAGE ORGANIZATION; scription drug coverage, receive coverage of ben- for Medicare Choices as established under sec- MEDICAREADVANTAGE PLAN.—The terms efits under this part through enrollment in a tion 1808. ‘MedicareAdvantage organization’ and Medicare Prescription Drug plan that is offered ‘‘(2) COVERED DRUG.— ‘MedicareAdvantage plan’ have the meanings in the geographic area in which the beneficiary ‘‘(A) IN GENERAL.—Except as provided in sub- given such terms in subsections (a)(1) and (b)(1), resides. For purposes of this part, the term ‘pri- paragraphs (B), (C), and (D), the term ‘covered respectively, of section 1859 (relating to defini- vate fee-for-service plan’ has the meaning given drug’ means— tions relating to MedicareAdvantage organiza- such term in section 1859(b)(2). ‘‘(i) a drug that may be dispensed only upon tions). ‘‘(B) FEE-FOR-SERVICE ENROLLEES RECEIVE a prescription and that is described in clause (i) ‘‘(7) MEDICARE PRESCRIPTION DRUG PLAN.— COVERAGE THROUGH A MEDICARE PRESCRIPTION or (ii) of subparagraph (A) of section 1927(k)(2); The term ‘Medicare Prescription Drug plan’ DRUG PLAN.—An eligible beneficiary who is en- or means prescription drug coverage that is offered rolled under this part but is not enrolled in a ‘‘(ii) a biological product described in clauses under a policy, contract, or plan— MedicareAdvantage plan (except for an MSA (i) through (iii) of subparagraph (B) of such sec- ‘‘(A) that has been approved under section plan or a private fee-for-service plan that does tion; or 1860D–13; and not provide qualified prescription drug cov- ‘‘(iii) insulin described in subparagraph (C) of ‘‘(B) by an eligible entity pursuant to, and in erage) shall receive coverage of benefits under such section (including syringes, and necessary accordance with, a contract between the Admin- this part through enrollment in a Medicare Pre- medical supplies associated with the administra- istrator and the entity under section 1860D–7(b). scription Drug plan that is offered in the geo- tion of insulin, as defined by the Adminis- ‘‘(8) PRESCRIPTION DRUG ACCOUNT.—The term graphic area in which the beneficiary resides. trator); ‘Prescription Drug Account’ means the Prescrip- ‘‘(2) VOLUNTARY NATURE OF PROGRAM.—Noth- and such term includes a vaccine licensed under tion Drug Account (as established under section ing in this part shall be construed as requiring section 351 of the Public Health Service Act and 1860D–25) in the Federal Supplementary Medical an eligible beneficiary to enroll in the program any use of a covered drug for a medically ac- Insurance Trust Fund under section 1841. under this part. cepted indication (as defined in section ‘‘(9) QUALIFIED PRESCRIPTION DRUG COV- ‘‘(3) SCOPE OF BENEFITS.—Pursuant to section 1927(k)(6)). ERAGE.—The term ‘qualified prescription drug 1860D–6(b)(3)(C), the program established under ‘‘(B) EXCLUSIONS.— coverage’ means the coverage described in sec- this part shall provide for coverage of all thera- ‘‘(i) IN GENERAL.—The term ‘covered drug’ tion 1860D–6(a)(1). peutic categories and classes of covered drugs does not include drugs or classes of drugs, or ‘‘(10) STANDARD PRESCRIPTION DRUG COV- (although not necessarily for all drugs within their medical uses, which may be excluded from ERAGE.—The term ‘standard prescription drug such categories and classes). coverage or otherwise restricted under section coverage’ means the coverage described in sec- ‘‘(4) PROGRAM TO BEGIN IN 2006.—The Adminis- 1927(d)(2), other than subparagraph (E) thereof tion 1860D–6(c). trator shall establish the program under this (relating to smoking cessation agents), or under ‘‘(b) APPLICATION OF MEDICAREADVANTAGE part in a manner so that benefits are first pro- section 1927(d)(3). PROVISIONS UNDER THIS PART.—For purposes of vided beginning on January 1, 2006. ‘‘(ii) AVOIDANCE OF DUPLICATE COVERAGE.—A applying provisions of part C under this part ‘‘(b) ACCESS TO ALTERNATIVE PRESCRIPTION drug prescribed for an individual that would with respect to a Medicare Prescription Drug DRUG COVERAGE.—In the case of an eligible ben- otherwise be a covered drug under this part plan and an eligible entity, unless otherwise eficiary who has creditable prescription drug shall not be so considered if payment for such provided in this part such provisions shall be coverage (as defined in section 1860D– drug is available under part A or B, but shall be applied as if— 2(b)(1)(F)), such beneficiary—

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‘‘(1) may continue to receive such coverage ‘‘(D) PERIODS TREATED SEPARATELY.—Any in- ‘‘(2) INITIAL ELECTION PERIODS.— and not enroll under this part; and crease in an eligible beneficiary’s monthly bene- ‘‘(A) OPEN ENROLLMENT PERIOD FOR CURRENT ‘‘(2) pursuant to section 1860D–2(b)(1)(C), is ficiary obligation under subparagraph (A) with BENEFICIARIES IN WHICH LATE ENROLLMENT PRO- permitted to subsequently enroll under this part respect to a particular continuous period of eli- CEDURES DO NOT APPLY.—In the case of an indi- without any penalty and obtain access to quali- gibility shall not be applicable with respect to vidual who is an eligible beneficiary as of No- fied prescription drug coverage in the manner any other continuous period of eligibility which vember 1, 2005, there shall be an open enroll- described in subsection (a) if the beneficiary in- the beneficiary may have. ment period of 6 months beginning on that date voluntarily loses such coverage. ‘‘(E) CONTINUOUS PERIOD OF ELIGIBILITY.— under which such beneficiary may enroll under ‘‘(c) FINANCING.—The costs of providing bene- ‘‘(i) IN GENERAL.—Subject to clause (ii), for this part without the application of the late en- fits under this part shall be payable from the purposes of this paragraph, an eligible bene- rollment procedures established under para- Prescription Drug Account. ficiary’s ‘continuous period of eligibility’ is the graph (1)(A). ‘‘ENROLLMENT UNDER PROGRAM period that begins with the first day on which ‘‘(B) INDIVIDUAL COVERED IN FUTURE.—In the ‘‘SEC. 1860D–2. (a) ESTABLISHMENT OF EN- the beneficiary is eligible to enroll under section case of an individual who becomes an eligible ROLLMENT PROCESS.— 1836 and ends with the beneficiary’s death. beneficiary after such date, there shall be an EPARATE PERIOD ‘‘(1) PROCESS SIMILAR TO PART B ENROLL- ‘‘(ii) S .—Any period during initial election period which is the same as the all of which an eligible beneficiary satisfied MENT.—The Administrator shall establish a initial enrollment period under section 1837(d). process through which an eligible beneficiary paragraph (1) of section 1836 and which termi- ‘‘(3) SPECIAL ENROLLMENT PERIOD FOR BENE- (including an eligible beneficiary enrolled in a nated in or before the month preceding the FICIARIES WHO INVOLUNTARILY LOSE CREDITABLE MedicareAdvantage plan offered by a month in which the beneficiary attained age 65 PRESCRIPTION DRUG COVERAGE.— shall be a separate ‘continuous period of eligi- ‘‘(A) ESTABLISHMENT.—The Administrator MedicareAdvantage organization) may make an bility’ with respect to the beneficiary (and each shall establish a special open enrollment period election to enroll under this part. Such process such period which terminates shall be deemed (as described in subparagraph (B)) for an eligi- shall be similar to the process for enrollment in not to have existed for purposes of subsequently ble beneficiary that loses creditable prescription part B under section 1837, including the deem- applying this paragraph). drug coverage. ing provisions of such section. ‘‘(F) CREDITABLE PRESCRIPTION DRUG COV- ‘‘(B) SPECIAL OPEN ENROLLMENT PERIOD.—The ‘‘(2) CONDITION OF ENROLLMENT.—An eligible ERAGE DEFINED.—Subject to subparagraph (G), special open enrollment period described in this beneficiary must be enrolled under this part in for purposes of this part, the term ‘creditable subparagraph is the 63-day period that begins order to be eligible to receive access to qualified prescription drug coverage’ means any of the on— prescription drug coverage. following: ‘‘(i) in the case of a beneficiary with coverage ‘‘(b) SPECIAL ENROLLMENT PROCEDURES.— ‘‘(i) DRUG-ONLY COVERAGE UNDER MEDICAID.— described in clause (ii) of paragraph (1)(F), the ‘‘(1) LATE ENROLLMENT PENALTY.— Coverage of covered outpatient drugs (as de- later of the date on which the plan terminates, ‘‘(A) INCREASE IN MONTHLY BENEFICIARY OBLI- fined in section 1927) under title XIX or a waiv- ceases to provide, or substantially reduces (as GATION.—Subject to the succeeding provisions of er under 1115 that is provided to an individual defined by the Administrator) the value of the this paragraph, in the case of an eligible bene- who is not a dual eligible individual (as defined prescription drug coverage under such plan or ficiary whose coverage period under this part in section 1860D–19(a)(4)(E)). the date the beneficiary is provided with notice began pursuant to an enrollment after the bene- ‘‘(ii) PRESCRIPTION DRUG COVERAGE UNDER A of such termination or reduction; ficiary’s initial enrollment period under part B GROUP HEALTH PLAN.—Any outpatient prescrip- ‘‘(ii) in the case of a beneficiary with coverage (determined pursuant to section 1837(d)) and not tion drug coverage under a group health plan, described in clause (i), (iii), or (iv) of paragraph pursuant to the open enrollment period de- including a health benefits plan under chapter (1)(F), the later of the date on which the bene- scribed in paragraph (2), the Administrator 89 of title 5, United States Code (commonly ficiary is involuntarily disenrolled or becomes shall establish procedures for increasing the known as the Federal employees health benefits ineligible for such coverage or the date the bene- amount of the monthly beneficiary obligation program), and a qualified retiree prescription ficiary is provided with notice of such loss of eli- under section 1860D–17 applicable to such bene- drug plan (as defined in section 1860D–20(e)(4)). gibility; or ficiary by an amount that the Administrator de- ‘‘(iii) STATE PHARMACEUTICAL ASSISTANCE PRO- ‘‘(iii) in the case of a beneficiary with cov- termines is actuarially sound for each full 12- GRAM.—Coverage of prescription drugs under a erage described in clause (v) of paragraph month period (in the same continuous period of State pharmaceutical assistance program. (1)(F), the latter of the date on which the issuer eligibility) in which the eligible beneficiary ‘‘(iv) VETERANS’ COVERAGE OF PRESCRIPTION of the policy terminates coverage under the pol- could have been enrolled under this part but DRUGS.—Coverage of prescription drugs for vet- icy or the date the beneficiary is provided with was not so enrolled. erans, and survivors and dependents of vet- notice of such termination. ‘‘(B) PERIODS TAKEN INTO ACCOUNT.—For pur- erans, under chapter 17 of title 38, United States ‘‘(c) PERIOD OF COVERAGE.— poses of calculating any 12-month period under Code. ‘‘(1) IN GENERAL.—Except as provided in para- subparagraph (A), there shall be taken into ac- ‘‘(v) PRESCRIPTION DRUG COVERAGE UNDER graph (2) and subject to paragraph (3), an eligi- count— MEDIGAP POLICIES.—Coverage under a medicare ble beneficiary’s coverage under the program ‘‘(i) the months which elapsed between the supplemental policy under section 1882 that pro- under this part shall be effective for the period close of the eligible beneficiary’s initial enroll- vides benefits for prescription drugs (whether or provided in section 1838, as if that section ap- ment period and the close of the enrollment pe- not such coverage conforms to the standards for plied to the program under this part. riod in which the beneficiary enrolled; and packages of benefits under section 1882(p)(1)). ‘‘(2) OPEN AND SPECIAL ENROLLMENT.— ‘‘(ii) in the case of an eligible beneficiary who ‘‘(G) REQUIREMENT FOR CREDITABLE COV- ‘‘(A) OPEN ENROLLMENT.—An eligible bene- reenrolls under this part, the months which ERAGE.—Coverage described in clauses (i) ficiary who enrolls under the program under elapsed between the date of termination of a through (v) of subparagraph (F) shall not be this part pursuant to subsection (b)(2) shall be previous coverage period and the close of the en- considered to be creditable coverage under this entitled to the benefits under this part begin- rollment period in which the beneficiary re- part unless the coverage provides coverage of ning on January 1, 2006. ‘‘(B) SPECIAL ENROLLMENT.—Subject to para- enrolled. the cost of prescription drugs the actuarial graph (3), an eligible beneficiary who enrolls ‘‘(C) PERIODS NOT TAKEN INTO ACCOUNT.— value of which (as defined by the Adminis- under the program under this part pursuant to ‘‘(i) IN GENERAL.—For purposes of calculating trator) to the beneficiary equals or exceeds the subsection (b)(3) shall be entitled to the benefits any 12-month period under subparagraph (A), actuarial value of standard prescription drug under this part beginning on the first day of the subject to clause (ii), there shall not be taken coverage (as determined under section 1860D– month following the month in which such en- into account months for which the eligible bene- 6(f)). rollment occurs. ficiary can demonstrate that the beneficiary had ‘‘(H) DISCLOSURE.— ‘‘(3) LIMITATION.—Coverage under this part creditable prescription drug coverage (as defined ‘‘(i) IN GENERAL.—Each entity that offers cov- shall not begin prior to January 1, 2006. erage of the type described in clause (ii) (iii), in subparagraph (F)). ‘‘(d) TERMINATION.— ‘‘(ii) BENEFICIARY MUST INVOLUNTARILY LOSE (iv), or (v) of subparagraph (F) shall provide for ‘‘(1) IN GENERAL.—The causes of termination COVERAGE.—Clause (i) shall only apply with re- disclosure, consistent with standards established specified in section 1838 shall apply to this part spect to coverage— by the Administrator, of whether the coverage in the same manner as such causes apply to part ‘‘(I) in the case of coverage described in clause provides coverage of the cost of prescription B. (ii) of subparagraph (F), if the plan terminates, drugs the actuarial value of which (as defined ‘‘(2) COVERAGE TERMINATED BY TERMINATION ceases to provide, or reduces the value of the by the Administrator) to the beneficiary equals OF COVERAGE UNDER PART A OR B.— prescription drug coverage under such plan to or exceeds the actuarial value of standard pre- ‘‘(A) IN GENERAL.—In addition to the causes below the actuarial value of standard prescrip- scription drug coverage (as determined under of termination specified in paragraph (1), the tion drug coverage (as determined under section section 1860D–6(f)). Administrator shall terminate an individual’s 1860D–6(f)); ‘‘(ii) WAIVER OF LIMITATIONS.—An individual coverage under this part if the individual is no ‘‘(II) in the case of coverage described in may apply to the Administrator to waive the ap- longer enrolled in both parts A and B. clause (i), (iii), or (iv) of subparagraph (F), if plication of subparagraph (G) if the individual ‘‘(B) EFFECTIVE DATE.—The termination de- the beneficiary is involuntarily disenrolled or establishes that the individual was not ade- scribed in subparagraph (A) shall be effective on becomes ineligible for such coverage; or quately informed that the coverage the bene- the effective date of termination of coverage ‘‘(III) in the case of a beneficiary with cov- ficiary was enrolled in did not provide the level under part A or (if earlier) under part B. erage described in clause (v) of subparagraph of benefits required in order for the coverage to ‘‘(3) PROCEDURES REGARDING TERMINATION OF (F), if the issuer of the policy terminates cov- be considered creditable coverage under sub- A BENEFICIARY UNDER A PLAN.—The Adminis- erage under the policy. paragraph (F). trator shall establish procedures for determining

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the status of an eligible beneficiary’s enrollment ‘‘PROVIDING INFORMATION TO BENEFICIARIES ‘‘(4) CLAIMS INFORMATION.—An eligible entity under this part if the beneficiary’s enrollment in ‘‘SEC. 1860D–4. (a) ACTIVITIES.— offering a Medicare Prescription Drug plan a Medicare Prescription Drug plan offered by ‘‘(1) IN GENERAL.—The Administrator shall must furnish to enrolled individuals in a form an eligible entity under this part is terminated conduct activities that are designed to broadly easily understandable to such individuals— by the entity for cause (pursuant to procedures disseminate information to eligible beneficiaries ‘‘(A) an explanation of benefits (in accord- established by the Administrator under section (and prospective eligible beneficiaries) regarding ance with section 1806(a) or in a comparable 1860D–3(a)(1)). the coverage provided under this part. manner); and ‘‘ELECTION OF A MEDICARE PRESCRIPTION DRUG ‘‘(2) SPECIAL RULE FOR FIRST ENROLLMENT ‘‘(B) when prescription drug benefits are pro- PLAN UNDER THE PROGRAM.—The activities described vided under this part, a notice of the benefits in ‘‘SEC. 1860D–3. (a) IN GENERAL.— in paragraph (1) shall ensure that eligible bene- relation to the initial coverage limit and annual ‘‘(1) PROCESS.— ficiaries are provided with such information at out-of-pocket limit for the current year (except ‘‘(A) ELECTION.— least 30 days prior to the first enrollment period that such notice need not be provided more ‘‘(i) IN GENERAL.—The Administrator shall es- described in section 1860D–3(a)(2). often than monthly). tablish a process through which an eligible ben- ‘‘(b) REQUIREMENTS.— ‘‘(5) APPROVAL OF MARKETING MATERIAL AND eficiary who is enrolled under this part but not ‘‘(1) IN GENERAL.—The activities described in APPLICATION FORMS.—The provisions of section enrolled in a MedicareAdvantage plan (except subsection (a) shall— 1851(h) shall apply to marketing material and for an MSA plan or a private fee-for-service ‘‘(A) be similar to the activities performed by application forms under this part in the same plan that does not provide qualified prescription the Administrator under section 1851(d); manner as such provisions apply to marketing drug coverage) offered by a MedicareAdvantage ‘‘(B) be coordinated with the activities per- material and application forms under part C. organization— formed by— ‘‘(b) ACCESS TO COVERED DRUGS.— ‘‘(I) shall make an election to enroll in any ‘‘(i) the Administrator under such section; ‘‘(1) ACCESS TO NEGOTIATED PRICES FOR PRE- Medicare Prescription Drug plan that is offered and SCRIPTION DRUGS.—An eligible entity offering a by an eligible entity and that serves the geo- ‘‘(ii) the Secretary under section 1804; and Medicare Prescription Drug plan shall have in graphic area in which the beneficiary resides; ‘‘(C) provide for the dissemination of informa- place procedures to ensure that beneficiaries are and tion comparing the plans offered by eligible enti- not charged more than the negotiated price of a ‘‘(II) may make an annual election to change ties under this part that are available to eligible covered drug. Such procedures shall include the the election under this clause. beneficiaries residing in an area. issuance of a card (or other technology) that ‘‘(2) COMPARATIVE INFORMATION.—The com- ‘‘(ii) CLARIFICATION REGARDING ENROLL- may be used by an enrolled beneficiary for the parative information described in paragraph MENT.—The process established under clause (i) purchase of prescription drugs for which cov- (1)(C) shall include a comparison of the fol- shall include, in the case of an eligible bene- erage is not otherwise provided under the Medi- lowing: ficiary who is enrolled under this part but who care Prescription Drug plan. ‘‘(A) BENEFITS.—The benefits provided under has failed to make an election of a Medicare ‘‘(2) ASSURING PHARMACY ACCESS.— the plan and the formularies and grievance and Prescription Drug plan in an area, for the en- ‘‘(A) IN GENERAL.—An eligible entity offering appeals processes under the plan. rollment in any Medicare Prescription Drug a Medicare Prescription Drug plan shall secure ‘‘(B) MONTHLY BENEFICIARY OBLIGATION.— plan that has been designated by the Adminis- the participation in its network of a sufficient The monthly beneficiary obligation under the trator in the area. The Administrator shall es- number of pharmacies that dispense (other than plan. tablish a process for designating a plan or plans by mail order) drugs directly to patients to en- in order to carry out the preceding sentence. ‘‘(C) QUALITY AND PERFORMANCE.—The quality and performance of the eligible entity offer- sure convenient access (as determined by the ‘‘(B) REQUIREMENTS FOR PROCESS.—In estab- Administrator and including adequate emer- lishing the process under subparagraph (A), the ing the plan. ‘‘(D) BENEFICIARY COST-SHARING.—The cost- gency access) for enrolled beneficiaries, in ac- Administrator shall— cordance with standards established by the Ad- ‘‘(i) use rules similar to the rules for enroll- sharing required of eligible beneficiaries under the plan. ministrator under section 1860D–7(g) that ensure ment, disenrollment, and termination of enroll- such convenient access. Such standards shall ment with a MedicareAdvantage plan under ‘‘(E) CONSUMER SATISFACTION SURVEYS.—The results of consumer satisfaction surveys regard- take into account reasonable distances to phar- section 1851, including— macy services in urban and rural areas and ac- ‘‘(I) the establishment of special election peri- ing the plan and the eligible entity offering such plan (conducted pursuant to section 1860D–5(h). cess to pharmacy services of the Indian Health ods under subsection (e)(4) of such section; and Service and Indian tribes and tribal organiza- ‘‘(II) the application of the guaranteed issue ‘‘(F) ADDITIONAL INFORMATION.—Such additions. and renewal provisions of section 1851(g) (other tional information as the Administrator may ‘‘(B) USE OF POINT-OF-SERVICE SYSTEM.—An than clause (i) and the second sentence of prescribe. eligible entity offering a Medicare Prescription clause (ii) of paragraph (3)(C), relating to de- ‘‘BENEFICIARY PROTECTIONS Drug plan shall establish an optional point-of- fault enrollment); and ‘‘SEC. 1860D–5. (a) DISSEMINATION OF INFOR- service method of operation under which— ‘‘(ii) coordinate enrollments, disenrollments, MATION.— ‘‘(i) the plan provides access to any or all and terminations of enrollment under part C ‘‘(1) GENERAL INFORMATION.—An eligible enti- pharmacies that are not participating phar- with enrollments, disenrollments, and termi- ty offering a Medicare Prescription Drug plan macies in its network; and nations of enrollment under this part. shall disclose, in a clear, accurate, and stand- ‘‘(ii) the plan may charge beneficiaries ‘‘(2) FIRST ENROLLMENT PERIOD FOR PLAN EN- ardized form to each enrollee at the time of en- through adjustments in copayments any addi- ROLLMENT.—The process developed under para- rollment, and at least annually thereafter, the tional costs associated with the point-of-service graph (1) shall ensure that eligible beneficiaries information described in section 1852(c)(1) relat- option. who enroll under this part during the open ening to such plan. Such information includes the rollment period under section 1860D–2(b)(2) are following: The additional copayments so charged shall not permitted to elect an eligible entity prior to Jan- ‘‘(A) Access to covered drugs, including access count toward the application of section 1860D– uary 1, 2006, in order to ensure that coverage through pharmacy networks. 6(c). under this part is effective as of such date. ‘‘(B) How any formulary used by the entity ‘‘(C) LEVEL PLAYING FIELD.—An eligible entity ‘‘(b) ENROLLMENT IN A MEDICAREADVANTAGE functions. offering a Medicare Prescription Drug plan PLAN.— ‘‘(C) Copayments, coinsurance, and deductible shall permit enrollees to receive benefits (which ‘‘(1) IN GENERAL.—An eligible beneficiary who requirements. may include a 90-day supply of drugs or is enrolled under this part and enrolled in a ‘‘(D) Grievance and appeals processes. biologicals) through a community pharmacy, MedicareAdvantage plan (except for an MSA The information described in the preceding sen- rather than through mail order, and may permit plan or a private fee-for-service plan that does tence shall also be made available on request to a differential amount to be paid by such enroll- not provide qualified prescription drug cov- prospective enrollees during open enrollment pe- ees. erage) offered by a MedicareAdvantage organi- riods. ‘‘(3) REQUIREMENTS ON DEVELOPMENT AND AP- zation shall receive access to such coverage ‘‘(2) DISCLOSURE UPON REQUEST OF GENERAL PLICATION OF FORMULARIES.—If an eligible enti- under this part through such plan. COVERAGE, UTILIZATION, AND GRIEVANCE INFOR- ty offering a Medicare Prescription Drug plan ‘‘(2) RULES.—Enrollment in a MATION.—Upon request of an individual eligible uses a formulary, the following requirements MedicareAdvantage plan is subject to the rules to enroll in a Medicare Prescription Drug plan, must be met: for enrollment in such plan under section 1851. the eligible entity offering such plan shall pro- ‘‘(A) PHARMACY AND THERAPEUTIC (P&T) COM- ‘‘(c) INFORMATION TO ENTITIES TO FACILITATE vide information similar (as determined by the MITTEE.— ENROLLMENT.—Notwithstanding any other pro- Administrator) to the information described in ‘‘(i) IN GENERAL.—The eligible entity must es- vision of law, the Administrator may provide to subparagraphs (A), (B), and (C) of section tablish a pharmacy and therapeutic committee each eligible entity with a contract under this 1852(c)(2) to such individual. that develops and reviews the formulary. part such information about eligible bene- ‘‘(3) RESPONSE TO BENEFICIARY QUESTIONS.— ‘‘(ii) COMPOSITION.—A pharmacy and thera- ficiaries as the Administrator determines to be An eligible entity offering a Medicare Prescrip- peutic committee shall include at least 1 aca- necessary to facilitate efficient enrollment by tion Drug plan shall have a mechanism for pro- demic expert, at least 1 practicing physician, such beneficiaries with such entities. The Ad- viding on a timely basis specific information to and at least 1 practicing pharmacist, all of ministrator may provide such information only enrollees upon request, including information whom have expertise in the care of elderly or so long as and to the extent necessary to carry on the coverage of specific drugs and changes in disabled persons, and a majority of the members out such objective. its formulary. of such committee shall consist of individuals

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00035 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8904 CONGRESSIONAL RECORD — SENATE July 7, 2003 who are a practicing physician or a practicing cation refill reminders, special packaging, and entity, the entity shall have in place procedures pharmacist (or both). other appropriate means; and to— ‘‘(B) FORMULARY DEVELOPMENT.—In devel- ‘‘(iii) detection of patterns of overuse and ‘‘(1) safeguard the privacy of any individually oping and reviewing the formulary, the com- underuse of prescription drugs. identifiable beneficiary information in a manner mittee shall base clinical decisions on the ‘‘(C) DEVELOPMENT OF PROGRAM IN COOPERA- consistent with the Federal regulations (con- strength of scientific evidence and standards of TION WITH LICENSED PHARMACISTS.—The pro- cerning the privacy of individually identifiable practice, including assessing peer-reviewed med- gram shall be developed in cooperation with li- health information) promulgated under section ical literature, such as randomized clinical censed and practicing pharmacists and physi- 264(c) of the Health Insurance Portability and trials, pharmacoeconomic studies, outcomes re- cians. Accountability Act of 1996; search data, and on such other information as ‘‘(D) CONSIDERATIONS IN PHARMACY FEES.— ‘‘(2) maintain such records and information in the committee determines to be appropriate. The eligible entity offering a Medicare Prescrip- a manner that is accurate and timely; ‘‘(C) INCLUSION OF DRUGS IN ALL THERAPEUTIC tion Drug plan shall take into account, in estab- ‘‘(3) ensure timely access by such beneficiaries CATEGORIES AND CLASSES.— lishing fees for pharmacists and others pro- to such records and information; and ‘‘(i) IN GENERAL.—The formulary must include viding services under the medication therapy ‘‘(4) otherwise comply with applicable laws re- drugs within each therapeutic category and management program, the resources and time lating to patient privacy and confidentiality. class of covered drugs (as defined by the Admin- used in implementing the program. ‘‘(g) UNIFORM MONTHLY PLAN PREMIUM.—An istrator), although not necessarily for all drugs ‘‘(3) PUBLIC DISCLOSURE OF PHARMACEUTICAL eligible entity shall ensure that the monthly within such categories and classes. PRICES FOR EQUIVALENT DRUGS.—The eligible en- plan premium for a Medicare Prescription Drug ‘‘(ii) REQUIREMENT.—In defining therapeutic tity offering a Medicare Prescription Drug plan plan charged under this part is the same for all categories and classes of covered drugs pursuant shall provide that each pharmacy or other dis- eligible beneficiaries enrolled in the plan. Such to clause (i), the Administrator shall use— penser that arranges for the dispensing of a cov- requirement shall not apply to enrollees of a ‘‘(I) the compendia referred to section ered drug shall inform the beneficiary at the Medicare Prescription Drug plan who are en- 1927(g)(1)(B)(i); and time of purchase of the drug of any differential rolled in the plan pursuant to a contractual ‘‘(II) other recognized sources of drug classi- between the price of the prescribed drug to the agreement between the plan and an employer or fications and categorizations determined appro- enrollee and the price of the lowest cost generic other group health plan that provides employ- priate by the Administrator. drug covered under the plan that is therapeuti- ment-based retiree health coverage (as defined ‘‘(D) PROVIDER EDUCATION.—The committee cally equivalent and bioequivalent. in section 1860D–20(d)(4)(B)) if the premium shall establish policies and procedures to edu- ‘‘(d) GRIEVANCE MECHANISM, COVERAGE DE- amount is the same for all such enrollees under cate and inform health care providers con- TERMINATIONS, AND RECONSIDERATIONS.— such agreement. N GENERAL cerning the formulary. ‘‘(1) I .—An eligible entity shall pro- ‘‘(h) CONSUMER SATISFACTION SURVEYS.—An ‘‘(E) NOTICE BEFORE REMOVING DRUGS FROM vide meaningful procedures for hearing and re- eligible entity shall conduct consumer satisfac- FORMULARY.—Any removal of a drug from a for- solving grievances between the eligible entity tion surveys with respect to the plan and the mulary shall take effect only after appropriate (including any entity or individual through entity. The Administrator shall establish uni- notice is made available to beneficiaries, physi- which the eligible entity provides covered bene- form requirements for such surveys. cians, and pharmacists. fits) and enrollees with Medicare Prescription ‘‘PRESCRIPTION DRUG BENEFITS ‘‘(F) APPEALS AND EXCEPTIONS TO APPLICA- Drug plans of the eligible entity under this part TION.—The eligible entity must have, as part of in accordance with section 1852(f). ‘‘SEC. 1860D–6. (a) REQUIREMENTS.— the appeals process under subsection (e), a proc- ‘‘(2) APPLICATION OF COVERAGE DETERMINA- ‘‘(1) IN GENERAL.—For purposes of this part ess for timely appeals for denials of coverage TION AND RECONSIDERATION PROVISIONS.—The and part C, the term ‘qualified prescription drug based on such application of the formulary. requirements of paragraphs (1) through (3) of coverage’ means either of the following: ‘‘(c) COST AND UTILIZATION MANAGEMENT; section 1852(g) shall apply to an eligible entity ‘‘(A) STANDARD PRESCRIPTION DRUG COVERAGE QUALITY ASSURANCE; MEDICATION THERAPY with respect to covered benefits under the Medi- WITH ACCESS TO NEGOTIATED PRICES.—Standard MANAGEMENT PROGRAM.— care Prescription Drug plan it offers under this prescription drug coverage (as defined in sub- ‘‘(1) IN GENERAL.—An eligible entity shall part in the same manner as such requirements section (c)) and access to negotiated prices have in place the following with respect to cov- apply to a MedicareAdvantage organization under subsection (e). ered drugs: with respect to benefits it offers under a ‘‘(B) ACTUARIALLY EQUIVALENT PRESCRIPTION ‘‘(A) A cost-effective drug utilization manage- MedicareAdvantage plan under part C. DRUG COVERAGE WITH ACCESS TO NEGOTIATED ment program, including incentives to reduce ‘‘(3) REQUEST FOR REVIEW OF TIERED FOR- PRICES.—Coverage of covered drugs which meets costs when appropriate. MULARY DETERMINATIONS.—In the case of a the alternative coverage requirements of sub- ‘‘(B) Quality assurance measures to reduce Medicare Prescription Drug plan offered by an section (d) and access to negotiated prices under medical errors and adverse drug interactions eligible entity that provides for tiered cost-shar- subsection (e), but only if it is approved by the and to improve medication use, which— ing for drugs included within a formulary and Administrator as provided under subsection (d). ‘‘(i) shall include a medication therapy man- provides lower cost-sharing for preferred drugs ‘‘(2) PERMITTING ADDITIONAL PRESCRIPTION agement program described in paragraph (2); included within the formulary, an individual DRUG COVERAGE.— and who is enrolled in the plan may request cov- ‘‘(A) IN GENERAL.—Subject to subparagraph ‘‘(ii) may include beneficiary education pro- erage of a nonpreferred drug under the terms (B) and section 1860D–13(c)(2), nothing in this grams, counseling, medication refill reminders, applicable for preferred drugs if the prescribing part shall be construed as preventing qualified and special packaging. physician determines that the preferred drug for prescription drug coverage from including cov- ‘‘(C) A program to control fraud, abuse, and treatment of the same condition is not as effec- erage of covered drugs that exceeds the coverage waste. tive for the individual or has adverse effects for required under paragraph (1). Nothing in this section shall be construed as im- the individual. ‘‘(B) REQUIREMENT.—An eligible entity may pairing an eligible entity from applying cost ‘‘(e) APPEALS.— not offer a Medicare Prescription Drug plan management tools (including differential pay- ‘‘(1) IN GENERAL.—Subject to paragraph (2), that provides additional benefits pursuant to ments) under all methods of operation. the requirements of paragraphs (4) and (5) of subparagraph (A) in an area unless the eligible ‘‘(2) MEDICATION THERAPY MANAGEMENT PRO- section 1852(g) shall apply to an eligible entity entity offering such plan also offers a Medicare GRAM.— with respect to drugs not included on any for- Prescription Drug plan in the area that only ‘‘(A) IN GENERAL.—A medication therapy mulary in a manner that is similar (as deter- provides the coverage of prescription drugs that management program described in this para- mined by the Administrator) to the manner that is required under paragraph (1). graph is a program of drug therapy management such requirements apply to a ‘‘(3) COST CONTROL MECHANISMS.—In pro- and medication administration that is designed MedicareAdvantage organization with respect viding qualified prescription drug coverage, the to assure, with respect to beneficiaries with to benefits it offers under a MedicareAdvantage entity offering the Medicare Prescription Drug chronic diseases (such as diabetes, asthma, hy- plan under part C. plan or the MedicareAdvantage plan may use a pertension, hyperlipidemia, and congestive ‘‘(2) FORMULARY DETERMINATIONS.—An indi- variety of cost control mechanisms, including heart failure) or multiple prescriptions, that vidual who is enrolled in a Medicare Prescrip- the use of formularies, tiered copayments, selec- covered drugs under the Medicare Prescription tion Drug plan offered by an eligible entity may tive contracting with providers of prescription Drug plan are appropriately used to optimize appeal to obtain coverage for a covered drug drugs, and mail order pharmacies. therapeutic outcomes through improved medica- that is not on a formulary of the entity under ‘‘(b) APPLICATION OF SECONDARY PAYOR PRO- tion use and to achieve therapeutic goals and the terms applicable for a formulary drug if the VISIONS.—The provisions of section 1852(a)(4) reduce the risk of adverse events, including ad- prescribing physician determines that the for- shall apply under this part in the same manner verse drug interactions. mulary drug for treatment of the same condition as they apply under part C. ‘‘(B) ELEMENTS.—Such program may in- is not as effective for the individual or has ad- ‘‘(c) STANDARD PRESCRIPTION DRUG COV- clude— verse effects for the individual. ERAGE.—For purposes of this part and part C, ‘‘(i) enhanced beneficiary understanding of ‘‘(f) PRIVACY, CONFIDENTIALITY, AND ACCU- the term ‘standard prescription drug coverage’ such appropriate use through beneficiary edu- RACY OF ENROLLEE RECORDS.—Insofar as an eli- means coverage of covered drugs that meets the cation, counseling, and other appropriate gible entity maintains individually identifiable following requirements: means; medical records or other health information re- ‘‘(1) DEDUCTIBLE.— ‘‘(ii) increased beneficiary adherence with garding eligible beneficiaries enrolled in the ‘‘(A) IN GENERAL.—The coverage has an an- prescription medication regimens through medi- Medicare Prescription Drug plan offered by the nual deductible—

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00036 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8905 ‘‘(i) for 2006, that is equal to $275; or reimbursement arrangements. An entity with a direct or indirect subsidies, rebates, or other ‘‘(ii) for a subsequent year, that is equal to contract under this part may also periodically price concessions or direct or indirect remunera- the amount specified under this paragraph for ask individuals enrolled in a plan offered by the tions. the previous year increased by the percentage entity whether the individuals have or expect to ‘‘(B) MEDICAID RELATED PROVISIONS.—Insofar specified in paragraph (5) for the year involved. receive such third-party reimbursement. A mate- as a State elects to provide medical assistance ‘‘(B) ROUNDING.—Any amount determined rial misrepresentation of the information de- under title XIX for a drug based on the prices under subparagraph (A)(ii) that is not a mul- scribed in the preceding sentence by an indi- negotiated under a Medicare Prescription Drug tiple of $1 shall be rounded to the nearest mul- vidual (as defined in standards set by the Ad- plan under this part— tiple of $1. ministrator and determined through a process ‘‘(i) the medical assistance for such a drug ‘‘(2) LIMITS ON COST-SHARING.—The coverage established by the Administrator) shall con- shall be disregarded for purposes of a rebate has cost-sharing (for costs above the annual de- stitute grounds for termination of enrollment agreement entered into under section 1927 which ductible specified in paragraph (1) and up to the under section 1860D–2(d). would otherwise apply to the provision of med- initial coverage limit under paragraph (3)) that ‘‘(5) ANNUAL PERCENTAGE INCREASE.—For pur- ical assistance for the drug under title XIX; and is equal to 50 percent or that is actuarially con- poses of this part, the annual percentage in- ‘‘(ii) the prices negotiated under a Medicare sistent (using processes established under sub- crease specified in this paragraph for a year is Prescription Drug plan with respect to covered section (f)) with an average expected payment of equal to the annual percentage increase in aver- drugs, under a MedicareAdvantage plan with 50 percent of such costs. age per capita aggregate expenditures for cov- respect to such drugs, or under a qualified re- ‘‘(3) INITIAL COVERAGE LIMIT.— ered drugs in the United States for beneficiaries tiree prescription drug plan (as defined in sec- ‘‘(A) IN GENERAL.—Subject to paragraph (4), under this title, as determined by the Adminis- tion 1860D–20(e)(4)) with respect to such drugs, the coverage has an initial coverage limit on the trator for the 12-month period ending in July of on behalf of eligible beneficiaries, shall (not- maximum costs that may be recognized for pay- the previous year. withstanding any other provision of law) not be ment purposes (including the annual deduct- ‘‘(d) ALTERNATIVE COVERAGE REQUIRE- taken into account for the purposes of estab- ible)— MENTS.—A Medicare Prescription Drug plan or lishing the best price under section 1927(c)(1)(C). ‘‘(i) for 2006, that is equal to $4,500; or MedicareAdvantage plan may provide a dif- ‘‘(2) CARDS OR OTHER TECHNOLOGY.— ‘‘(ii) for a subsequent year, that is equal to ferent prescription drug benefit design from the ‘‘(A) IN GENERAL.—In providing the access the amount specified in this paragraph for the standard prescription drug coverage described in under paragraph (1), the eligible entity or previous year, increased by the annual percent- subsection (c) so long as the Administrator de- MedicareAdvantage organization shall issue a age increase described in paragraph (5) for the termines (based on an actuarial analysis by the card or use other technology pursuant to section year involved. Administrator) that the following requirements 1860D–5(b)(1). ‘‘(B) ROUNDING.—Any amount determined are met and the plan applies for, and receives, ‘‘(B) NATIONAL STANDARDS.— under subparagraph (A)(ii) that is not a mul- the approval of the Administrator for such ben- ‘‘(i) DEVELOPMENT.—The Administrator shall tiple of $1 shall be rounded to the nearest mul- efit design: provide for the development of national stand- tiple of $1. ‘‘(1) ASSURING AT LEAST ACTUARIALLY EQUIVA- ards relating to a standardized format for the ‘‘(4) LIMITATION ON OUT-OF-POCKET EXPENDI- LENT PRESCRIPTION DRUG COVERAGE.— card or other technology required under sub- TURES BY BENEFICIARY.— ‘‘(A) ASSURING EQUIVALENT VALUE OF TOTAL paragraph (A). Such standards shall be compat- ‘‘(A) IN GENERAL.—The coverage provides ben- COVERAGE.—The actuarial value of the total ible with parts C and D of title XI and may be efits with cost-sharing that is equal to 10 per- coverage (as determined under subsection (f)) is based on standards developed by an appropriate cent after the individual has incurred costs (as at least equal to the actuarial value (as so deter- standard setting organization. described in subparagraph (C)) for covered mined) of standard prescription drug coverage. ONSULTATION.—In developing the drugs in a year equal to the annual out-of-pock- ‘‘(ii) C ‘‘(B) ASSURING EQUIVALENT UNSUBSIDIZED standards under clause (i), the Administrator et limit specified in subparagraph (B). VALUE OF COVERAGE.—The unsubsidized value shall consult with the National Council for Pre- ‘‘(B) ANNUAL OUT-OF-POCKET LIMIT.— of the coverage is at least equal to the unsub- ‘‘(i) IN GENERAL.—For purposes of this part, scription Drug Programs and other standard- sidized value of standard prescription drug cov- the ‘annual out-of-pocket limit’ specified in this setting organizations determined appropriate by erage. For purposes of this subparagraph, the subparagraph— the Administrator. unsubsidized value of coverage is the amount by ‘‘(I) for 2006, is equal to $3,700; or ‘‘(iii) IMPLEMENTATION.—The Administrator ‘‘(II) for a subsequent year, is equal to the which the actuarial value of the coverage (as shall implement the standards developed under amount specified in this subparagraph for the determined under subsection (f)) exceeds the ac- clause (i) by January 1, 2008. previous year, increased by the annual percent- tuarial value of the amounts associated with the ‘‘(3) DISCLOSURE.—The eligible entity offering age increase described in paragraph (5) for the application of section 1860D–17(c) and reinsur- a Medicare Prescription Drug plan and the year involved. ance payments under section 1860D–20 with re- MedicareAdvantage organization offering a spect to such coverage. ‘‘(ii) ROUNDING.—Any amount determined MedicareAdvantage plan shall disclose to the under clause (i)(II) that is not a multiple of $1 ‘‘(C) ASSURING STANDARD PAYMENT FOR COSTS Administrator (in a manner specified by the Ad- shall be rounded to the nearest multiple of $1. AT INITIAL COVERAGE LIMIT.—The coverage is ministrator) the extent to which discounts, di- ‘‘(C) APPLICATION.—In applying subpara- designed, based upon an actuarially representa- rect or indirect subsidies, rebates, or other price graph (A)— tive pattern of utilization (as determined under concessions or direct or indirect remunerations ‘‘(i) incurred costs shall only include costs in- subsection (f)), to provide for the payment, with made available to the entity or organization by curred, with respect to covered drugs, for the respect to costs incurred that are equal to the a manufacturer are passed through to enrollees annual deductible (described in paragraph (1)), initial coverage limit under subsection (c)(3), of through pharmacies and other dispensers or cost-sharing (described in paragraph (2)), and an amount equal to at least the product of— otherwise. The provisions of section amounts for which benefits are not provided be- ‘‘(i) such initial coverage limit minus the de- 1927(b)(3)(D) shall apply to information dis- cause of the application of the initial coverage ductible under subsection (c)(1); and closed to the Administrator under this para- limit described in paragraph (3) (including costs ‘‘(ii) the percentage specified in subsection graph in the same manner as such provisions incurred for covered drugs described in section (c)(2). apply to information disclosed under such sec- 1860D(a)(2)(C)); and Benefits other than qualified prescription drug tion. ‘‘(ii) such costs shall be treated as incurred coverage shall not be taken into account for ‘‘(4) AUDITS AND REPORTS.—To protect against only if they are paid by the individual (or by purposes of this paragraph. fraud and abuse and to ensure proper disclo- another individual, such as a family member, on ‘‘(2) DEDUCTIBLE AND LIMITATION ON OUT-OF- sures and accounting under this part, in addi- behalf of the individual), under section 1860D–19 POCKET EXPENDITURES BY BENEFICIARIES MAY tion to any protections against fraud and abuse (but only with respect to the percentage of such NOT VARY.—The coverage may not vary the de- provided under section 1860D–7(f)(1), the Ad- costs that the individual is responsible for under ductible under subsection (c)(1) for the year or ministrator may periodically audit the financial that section), under title XIX, or under a State the limitation on out-of-pocket expenditures by statements and records of an eligible entity of- pharmaceutical assistance program and the in- beneficiaries described in subsection (c)(4) for fering a Medicare Prescription Drug plan and a dividual (or other individual) is not reimbursed the year. MedicareAdvantage organization offering a through insurance or otherwise, a group health ‘‘(e) ACCESS TO NEGOTIATED PRICES.— MedicareAdvantage plan with the auditor of the plan, or other third-party payment arrangement ‘‘(1) ACCESS.— Administrator’s choice. for such costs. ‘‘(A) IN GENERAL.—Under qualified prescrip- ‘‘(f) ACTUARIAL VALUATION; DETERMINATION ‘‘(D) INFORMATION REGARDING THIRD-PARTY tion drug coverage offered by an eligible entity OF ANNUAL PERCENTAGE INCREASES.— REIMBURSEMENT.—In order to ensure compliance or a MedicareAdvantage organization, the enti- ‘‘(1) PROCESSES.—For purposes of this section, with the requirements of subparagraph (C)(ii), ty or organization shall provide beneficiaries the Administrator shall establish processes and the Administrator is authorized to establish pro- with access to negotiated prices used for pay- methods— cedures, in coordination with the Secretary of ment for covered drugs, regardless of the fact ‘‘(A) for determining the actuarial valuation Treasury and the Secretary of Labor, for deter- that no benefits may be payable under the cov- of prescription drug coverage, including— mining whether costs for individuals are being erage with respect to such drugs because of the ‘‘(i) an actuarial valuation of standard pre- reimbursed through insurance or otherwise, a application of the deductible, any cost-sharing, scription drug coverage and of the reinsurance group health plan, or other third-party payment or an initial coverage limit (described in sub- payments under section 1860D–20; arrangement, and for alerting the entities in section (c)(3)). For purposes of this part, the ‘‘(ii) the use of generally accepted actuarial which such individuals are enrolled about such term ‘negotiated prices’ includes all discounts, principles and methodologies; and

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‘‘(iii) applying the same methodology for de- ‘‘(3) APPLICATION OF WAIVER PROCEDURES.— ‘‘(A) to the extent such law or regulation is terminations of alternative coverage under sub- With respect to an application for a waiver (or inconsistent with such standards; and section (d) as is used with respect to determina- a waiver granted) under this subsection, the ‘‘(B) in the same manner as such laws and tions of standard prescription drug coverage provisions of subparagraphs (E), (F), and (G) of regulations are superseded under section under subsection (c); and section 1855(a)(2) shall apply. 1856(b)(3). ‘‘(B) for determining annual percentage in- ‘‘(4) REFERENCES TO CERTAIN PROVISIONS.— ‘‘(2) STANDARDS SPECIFICALLY SUPERSEDED.— creases described in subsection (c)(5). For purposes of this subsection, in applying the State standards relating to the following are su- Such processes shall take into account any ef- provisions of section 1855(a)(2) under this sub- perseded under this section: fect that providing actuarially equivalent pre- section to Medicare Prescription Drug plans and ‘‘(A) Benefit requirements, including require- scription drug coverage rather than standard eligible entities— ments relating to cost-sharing and the structure prescription drug coverage has on drug utiliza- ‘‘(A) any reference to a waiver application of formularies. tion. under section 1855 shall be treated as a reference ‘‘(B) Premiums. ‘‘(2) USE OF OUTSIDE ACTUARIES.—Under the to a waiver application under paragraph (1); ‘‘(C) Requirements relating to inclusion or processes under paragraph (1)(A), eligible enti- and treatment of providers. ties and MedicareAdvantage organizations may ‘‘(B) any reference to solvency standards were ‘‘(D) Coverage determinations (including re- use actuarial opinions certified by independent, treated as a reference to solvency standards es- lated appeals and grievance processes). qualified actuaries to establish actuarial values, tablished under subsection (d). ‘‘(E) Requirements relating to marketing mate- but the Administrator shall determine whether ‘‘(d) SOLVENCY STANDARDS FOR NON-LICENSED rials and summaries and schedules of benefits such actuarial values meet the requirements ENTITIES.— regarding a Medicare Prescription Drug plan. ‘‘(1) ESTABLISHMENT AND PUBLICATION.—The under subsection (c)(1). ‘‘(3) PROHIBITION OF STATE IMPOSITION OF Administrator, in consultation with the Na- ‘‘REQUIREMENTS FOR ENTITIES OFFERING MEDI- PREMIUM TAXES.—No State may impose a pre- tional Association of Insurance Commissioners, CARE PRESCRIPTION DRUG PLANS; ESTABLISH- mium tax or similar tax with respect to— shall establish and publish, by not later than MENT OF STANDARDS ‘‘(A) monthly beneficiary obligations paid to January 1, 2005, financial solvency and capital ‘‘SEC. 1860D–7. (a) GENERAL REQUIREMENTS.— the Administrator for Medicare Prescription adequacy standards for entities described in An eligible entity offering a Medicare Prescrip- Drug plans under this part; or paragraph (2). tion Drug plan shall meet the following require- ‘‘(B) any payments made by the Administrator ‘‘(2) COMPLIANCE WITH STANDARDS.—An eligi- under this part to an eligible entity offering ments: ble entity that is not licensed by a State under ‘‘(1) LICENSURE.—Subject to subsection (c), the such a plan. subsection (a)(1) and for which a waiver appli- entity is organized and licensed under State law cation has been approved under subsection (c) ‘‘Subpart 2—Prescription Drug Delivery System as a risk-bearing entity eligible to offer health shall meet solvency and capital adequacy stand- ‘‘ESTABLISHMENT OF SERVICE AREAS insurance or health benefits coverage in each ards established under paragraph (1). The Ad- ‘‘SEC. 1860D–10. (a) ESTABLISHMENT.— State in which it offers a Medicare Prescription ministrator shall establish certification proce- ‘‘(1) INITIAL ESTABLISHMENT.—Not later than Drug plan. dures for such eligible entities with respect to April 15, 2005, the Administrator shall establish ‘‘(2) ASSUMPTION OF FINANCIAL RISK.— and publish the service areas in which Medicare ‘‘(A) IN GENERAL.—Subject to subparagraph such solvency standards in the manner de- Prescription Drug plans may offer benefits (B) and subsections (d)(2) and (e) of section scribed in section 1855(c)(2). ‘‘(e) LICENSURE DOES NOT SUBSTITUTE FOR OR under this part. 1860D–13, to the extent that the entity is at risk CONSTITUTE CERTIFICATION.—The fact that an ‘‘(2) PERIODIC REVIEW AND REVISION OF SERV- pursuant to such section 1860D–16, the entity entity is licensed in accordance with subsection ICE AREAS.—The Administrator shall periodi- assumes financial risk on a prospective basis for (a)(1) or has a waiver application approved cally review the service areas applicable under the benefits that it offers under a Medicare Pre- under subsection (c) does not deem the eligible this section and, based on such review, may re- scription Drug plan and that is not covered entity to meet other requirements imposed under vise such service areas if the Administrator de- under section 1860D–20. this part for an eligible entity. termines such revision to be appropriate. ‘‘(B) REINSURANCE PERMITTED.—To the extent ‘‘(f) INCORPORATION OF CERTAIN ‘‘(b) REQUIREMENTS FOR ESTABLISHMENT OF that the entity is at risk pursuant to section MEDICAREADVANTAGE CONTRACT REQUIRE- SERVICE AREAS.— 1860D–16, the entity may obtain insurance or MENTS.—The following provisions of section 1857 ‘‘(1) IN GENERAL.—The Administrator shall es- make other arrangements for the cost of cov- shall apply, subject to subsection (c)(4), to con- tablish the service areas under subsection (a) in erage provided to any enrolled member under tracts under this section in the same manner as a manner that— this part. they apply to contracts under section 1857(a): ‘‘(A) maximizes the availability of Medicare ‘‘(3) SOLVENCY FOR UNLICENSED ENTITIES.—In ‘‘(1) PROTECTIONS AGAINST FRAUD AND BENE- the case of an eligible entity that is not de- Prescription Drug plans to eligible beneficiaries; FICIARY PROTECTIONS.—Section 1857(d). scribed in paragraph (1) and for which a waiver and ‘‘(2) INTERMEDIATE SANCTIONS.—Section ‘‘(B) minimizes the ability of eligible entities has been approved under subsection (c), such 1857(g), except that in applying such section— offering such plans to favorably select eligible entity shall meet solvency standards established ‘‘(A) the reference in section 1857(g)(1)(B) to beneficiaries. by the Administrator under subsection (d). section 1854 is deemed a reference to this part; ‘‘(2) ADDITIONAL REQUIREMENTS.—The Admin- ‘‘(b) CONTRACT REQUIREMENTS.—The Admin- and istrator shall establish the service areas under istrator shall not permit an eligible beneficiary ‘‘(B) the reference in section 1857(g)(1)(F) to to elect a Medicare Prescription Drug plan of- subsection (a) consistent with the following re- section 1852(k)(2)(A)(ii) shall not be applied. quirements: fered by an eligible entity under this part, and ‘‘(3) PROCEDURES FOR TERMINATION.—Section the entity shall not be eligible for payments ‘‘(A) There shall be at least 10 service areas. 1857(h). ‘‘(B) Each service area must include at least 1 under section 1860D–16 or 1860D–20, unless the ‘‘(g) OTHER STANDARDS.—The Administrator State. Administrator has entered into a contract under shall establish by regulation other standards ‘‘(C) The Administrator may not divide States this subsection with the entity with respect to (not described in subsection (d)) for eligible enti- so that portions of the State are in different the offering of such plan. Such a contract with ties and Medicare Prescription Drug plans con- service areas. an entity may cover more than 1 Medicare Pre- sistent with, and to carry out, this part. The ‘‘(D) To the extent possible, the Administrator scription Drug plan. Such contract shall provide Administrator shall publish such regulations by shall include multistate metropolitan statistical that the entity agrees to comply with the appli- January 1, 2005. areas in a single service area. The Administrator cable requirements and standards of this part ‘‘(h) PERIODIC REVIEW AND REVISION OF may divide metropolitan statistical areas where and the terms and conditions of payment as pro- STANDARDS.— it is necessary to establish service areas of such vided for in this part. ‘‘(1) IN GENERAL.—Subject to paragraph (2), size and geography as to maximize the partici- ‘‘(c) WAIVER OF CERTAIN REQUIREMENTS IN the Administrator shall periodically review the pation of Medicare Prescription Drug plans. ORDER TO ENSURE BENEFICIARY CHOICE.— standards established under this section and, ‘‘(3) MAY CONFORM TO MEDICAREADVANTAGE ‘‘(1) IN GENERAL.—In the case of an eligible based on such review, may revise such stand- PREFERRED PROVIDER REGIONS.—The Adminis- entity that seeks to offer a Medicare Prescrip- ards if the Administrator determines such revi- trator may conform the service areas established tion Drug plan in a State, the Administrator sion to be appropriate. under this section to the preferred provider re- shall waive the requirement of subsection (a)(1) ‘‘(2) PROHIBITION OF MIDYEAR IMPLEMENTA- gions established under section 1858(a)(3). that the entity be licensed in that State if the TION OF SIGNIFICANT NEW REGULATORY REQUIRE- Administrator determines, based on the applica- MENTS.—The Administrator may not implement, ‘‘PUBLICATION OF RISK ADJUSTERS tion and other evidence presented to the Admin- other than at the beginning of a calendar year, ‘‘SEC. 1860D–11. (a) PUBLICATION.—Not later istrator, that any of the grounds for approval of regulations under this section that impose new, than April 15 of each year (beginning in 2005), the application described in paragraph (2) have significant regulatory requirements on an eligi- the Administrator shall publish the risk adjust- been met. ble entity or a Medicare Prescription Drug plan. ers established under subsection (b) to be used ‘‘(2) GROUNDS FOR APPROVAL.—The grounds ‘‘(h) RELATION TO STATE LAWS.— in computing— for approval under this paragraph are the ‘‘(1) IN GENERAL.—The standards established ‘‘(1) the amount of payment to Medicare Pre- grounds for approval described in subpara- under this part shall supersede any State law or scription Drug plans in the subsequent year graphs (B), (C), and (D) of section 1855(a)(2), regulation (including standards described in under section 1860D–16(a), insofar as it is attrib- and also include the application by a State of paragraph (2)) with respect to Medicare Pre- utable to standard prescription drug coverage any grounds other than those required under scription Drug plans which are offered by eligi- (or actuarially equivalent prescription drug cov- Federal law. ble entities under this part— erage); and

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00038 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8907 ‘‘(2) the amount of payment to ‘‘(A) the entire area of 1 of the service areas paragraph (1) is not going to be provided in the MedicareAdvantage plans in the subsequent established by the Administrator under section area during the subsequent year, the Adminis- year under section 1858A(c), insofar as it is at- 1860D–10; or trator shall— tributable to standard prescription drug cov- ‘‘(B) the entire area covered by the medicare ‘‘(i) adjust the percents specified in para- erage (or actuarially equivalent prescription program. graphs (2) and (4) of section 1860D–16(b) in an drug coverage). ‘‘(2) RULE OF CONSTRUCTION.—Nothing in this area in a year; or ‘‘(b) ESTABLISHMENT OF RISK ADJUSTERS.— part shall be construed as prohibiting an eligible ‘‘(ii) increase the percent specified in section ‘‘(1) IN GENERAL.—Subject to paragraph (2), entity from submitting separate bids in multiple 1860D–20(c)(1) in an area in a year. the Administrator shall establish an appropriate service areas as long as each bid is for a single The administrator shall exercise the authority methodology for adjusting the amount of pay- service area. under the preceding sentence only so long as ment to plans referred to in subsection (a) to ‘‘APPROVAL OF PROPOSED MEDICARE (and to the extent) necessary to assure the ac- take into account variation in costs based on PRESCRIPTION DRUG PLANS cess guaranteed under paragraph (1). ‘‘(B) REQUIREMENTS FOR USE OF AUTHORITY.— the differences in actuarial risk of different en- ‘‘SEC. 1860D–13. (a) APPROVAL.— In exercising authority under subparagraph (A), rollees being served. Any such risk adjustment ‘‘(1) IN GENERAL.—The Administrator shall re- shall be designed in a manner as to not result in the Administrator— view the information filed under section 1860D– ‘‘(i) shall not provide for the full underwriting a change in the aggregate payments described in 12 and shall approve or disapprove the Medicare paragraphs (1) and (2) of subsection (a). of financial risk for any eligible entity; Prescription Drug plan. ‘‘(ii) shall not provide for any underwriting of ‘‘(2) CONSIDERATIONS.—In establishing the ‘‘(2) REQUIREMENTS FOR APPROVAL.—The Ad- financial risk for a public eligible entity with re- methodology under paragraph (1), the Adminis- ministrator may not approve a Medicare Pre- spect to the offering of a nationwide Medicare trator may take into account the similar meth- scription Drug plan unless the following re- Prescription Drug plan; and odologies used under section 1853(a)(3) to adjust quirements are met: ‘‘(iii) shall seek to maximize the assumption of payments to MedicareAdvantage organizations. ‘‘(A) COMPLIANCE WITH REQUIREMENTS.—The financial risk by eligible entities to ensure fair ‘‘(3) DATA COLLECTION.—In order to carry out plan and the entity offering the plan comply competition among Medicare Prescription Drug this subsection, the Administrator shall re- with the requirements under this part. plans. quire— ‘‘(B) APPLICATION OF FEHBP STANDARD.—(i) ‘‘(C) REQUIREMENT TO ACCEPT 2 FULL-RISK ‘‘(A) eligible entities to submit data regarding The portion of the monthly plan premium sub- QUALIFIED BIDS BEFORE EXERCISING AUTHOR- drug claims that can be linked at the beneficiary mitted under section 1860D–12(b) that is attrib- ITY.—The Administrator may not exercise the level to part A and part B data and such other utable to standard prescription drug coverage authority under subparagraph (A) with respect information as the Administrator determines reasonably and equitably reflects the actuarial to an area and year if 2 or more qualified bids necessary; and value of the standard prescription drug coverage are submitted by eligible entities to offer a Medi- ‘‘(B) MedicareAdvantage organizations (ex- less the actuarial value of the reinsurance pay- care Prescription Drug plan in the area for the cept MSA plans or a private fee-for-service plan ments under section 1860D–20 and the amount of year under paragraph (1) before the application that does not provide qualified prescription drug any funds in the plan stabilization reserve fund of subparagraph (A). coverage) to submit data regarding drug claims in the Prescription Drug Account used to sta- ‘‘(D) REPORTS.—The Administrator, in each that can be linked to other data that such orga- bilize or reduce the monthly plan premium. annual report to Congress under section nizations are required to submit to the Adminis- ‘‘(ii) If the plan provides additional prescrip- 1808(c)(1)(D), shall include information on the trator and such other information as the Admin- tion drug coverage pursuant to section 1860D– exercise of authority under subparagraph (A). istrator determines necessary. 6(a)(2), the monthly plan premium reasonably The Administrator also shall include such rec- ‘‘SUBMISSION OF BIDS FOR PROPOSED MEDICARE and equitably reflects the actuarial value of the ommendations as may be appropriate to limit PRESCRIPTION DRUG PLANS coverage provided less the actuarial value of the the exercise of such authority. ‘‘(e) GUARANTEED ACCESS.— ‘‘SEC. 1860D–12. (a) SUBMISSION.— reinsurance payments under section 1860D–20 ‘‘(1) ACCESS.—In order to assure access to ‘‘(1) IN GENERAL.—Each eligible entity that in- and the amount of any funds in the plan sta- qualified prescription drug coverage in an area, tends to offer a Medicare Prescription Drug bilization reserve fund in the Prescription Drug the Administrator shall take the following steps: plan in an area in a year (beginning with 2006) Account used to stabilize or reduce the monthly ‘‘(A) DETERMINATION.—Not later than Sep- shall submit to the Administrator, at such time plan premium. tember 1 of each year (beginning in 2005) and in the previous year and in such manner as the ‘‘(b) NEGOTIATION.—In exercising the author- for each area (established under section 1860D– Administrator may specify, such information as ity under subsection (a), the Administrator shall 10), the Administrator shall make a determina- the Administrator may require, including the in- have the authority to— tion as to whether the access required under formation described in subsection (b). ‘‘(1) negotiate the terms and conditions of the subsection (d)(1) is going to be provided in the ‘‘(2) ANNUAL SUBMISSION.—An eligible entity proposed monthly plan premiums submitted and area during the subsequent year. Such deter- shall submit the information required under other terms and conditions of a proposed plan; mination shall be made after the Administrator paragraph (1) with respect to a Medicare Pre- and has exercised the authority under subsection scription Drug plan that the entity intends to ‘‘(2) disapprove, or limit enrollment in, a pro- (d)(2). offer on an annual basis. posed plan based on— ‘‘(B) CONTRACT WITH AN ENTITY TO PROVIDE ‘‘(b) INFORMATION DESCRIBED.—The informa- ‘‘(A) the costs to beneficiaries under the plan; COVERAGE IN AN AREA.—Subject to paragraph tion described in this subsection includes infor- ‘‘(B) the quality of the coverage and benefits (3), if the Administrator makes a determination mation on each of the following: under the plan; under subparagraph (A) that the access re- ‘‘(1) The benefits under the plan (as required ‘‘(C) the adequacy of the network under the quired under subsection (d)(1) is not going to be under section 1860D–6). plan; provided in an area during the subsequent year, ‘‘(2) The actuarial value of the qualified pre- ‘‘(D) the average aggregate projected cost of the Administrator shall enter into a contract scription drug coverage. covered drugs under the plan relative to other with an entity to provide eligible beneficiaries ‘‘(3) The amount of the monthly plan premium Medicare Prescription Drug plans and enrolled under this part (and not, except for an under the plan, including an actuarial certifi- MedicareAdvantage plans; or MSA plan or a private fee-for-service plan that cation of— ‘‘(E) other factors determined appropriate by does not provide qualified prescription drug cov- ‘‘(A) the actuarial basis for such monthly the Administrator. erage enrolled in a MedicareAdvantage plan) plan premium; ‘‘(c) SPECIAL RULES FOR APPROVAL.—The Ad- and residing in the area with standard prescrip- ‘‘(B) the portion of such monthly plan pre- ministrator may approve a Medicare Prescrip- tion drug coverage (including access to nego- mium attributable to standard prescription drug tion Drug plan submitted under section 1860D– tiated prices for such beneficiaries pursuant to coverage or actuarially equivalent prescription 12 only if the benefits under such plan— section 1860D–6(e)) during the subsequent year. drug coverage and, if applicable, to benefits that ‘‘(1) include the required benefits under sec- An entity may be awarded a contract for more are in addition to such coverage; and tion 1860D–6(a)(1); and than 1 of the areas for which the Administrator ‘‘(C) the reduction in such monthly plan pre- ‘‘(2) are not designed in such a manner that is required to enter into a contract under this mium resulting from the payments provided the Administrator finds is likely to result in fa- paragraph but the Administrator may enter into under section 1860D–20. vorable selection of eligible beneficiaries. only 1 such contract in each such area. ‘‘(4) The service area for the plan. ‘‘(d) ACCESS TO COMPETITIVE COVERAGE.— ‘‘(C) REQUIREMENT TO ACCEPT 2 REDUCED-RISK ‘‘(5) Whether the entity plans to use any ‘‘(1) NUMBER OF CONTRACTS.—The Adminis- QUALIFIED BIDS BEFORE ENTERING INTO CON- funds in the plan stabilization reserve fund in trator, consistent with the requirements of this TRACT.—The Administrator may not enter into a the Prescription Drug Account that are avail- part and the goal of containing costs under this contract under subparagraph (B) with respect to able to the entity to stabilize or reduce the title, shall, with respect to a year, approve at an area and year if 2 or more qualified bids are monthly plan premium submitted under para- least 2 contracts to offer a Medicare Prescription submitted by eligible entities to offer a Medicare graph (3), and if so, the amount in such reserve Drug plan in each service area (established Prescription Drug plan in the area for the year fund that is to be used. under section 1860D–10) for the year. after the Administrator has exercised the au- ‘‘(6) Such other information as the Adminis- ‘‘(2) AUTHORITY TO REDUCE RISK TO ENSURE thority under subsection (d)(2) in the area for trator may require to carry out this part. ACCESS.— the year. ‘‘(c) OPTIONS REGARDING SERVICE AREAS.— ‘‘(A) IN GENERAL.—Subject to subparagraph ‘‘(D) ENTITY REQUIRED TO MEET BENEFICIARY ‘‘(1) IN GENERAL.—The service area of a Medi- (B), if the Administrator determines, with re- PROTECTION AND OTHER REQUIREMENTS.—An en- care Prescription Drug plan shall be either— spect to an area, that the access required under tity with a contract under subparagraph (B)

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shall meet the requirements described in section the Administrator is required to enter into a ‘‘(b) GEOGRAPHIC ADJUSTMENT.—The Adminis- 1860D–5 and such other requirements determined contract under such paragraph with respect to trator shall establish an appropriate method- appropriate by the Administrator. the area covered by such contract for the subse- ology for adjusting the monthly national aver- ‘‘(E) COMPETITIVE PROCEDURES.—Competitive quent year. age premium (as computed under subsection (a)) procedures (as defined in section 4(5) of the Of- ‘‘(6) ENTITY NOT PERMITTED TO MARKET OR for the year in an area to take into account dif- fice of Federal Procurement Policy Act (41 BRAND THE CONTRACT.—An entity with a conferences in prices for covered drugs among dif- U.S.C. 403(5))) shall be used to enter into a contract under paragraph (1)(B) may not engage in ferent areas. In establishing such methodology, tract under subparagraph (B). any marketing or branding of such contract. the Administrator may take into account dif- ‘‘(2) MONTHLY BENEFICIARY OBLIGATION FOR ‘‘(7) RULES FOR AREAS WHERE ONLY 1 COMPETI- ferences in drug utilization between eligible ENROLLMENT.— TIVELY BID PLAN WAS APPROVED.—In the case of beneficiaries in that area and other eligible ‘‘(A) IN GENERAL.—In the case of an eligible an area where (before the application of this beneficiaries and the results of the ongoing beneficiary receiving access to qualified pre- subsection) only 1 Medicare Prescription Drug study required under section 106 of the Prescrip- scription drug coverage through enrollment with plan was approved for a year— tion Drug and Medicare Improvement Act of an entity with a contract under paragraph ‘‘(A) the plan may (at the option of the plan) 2003. Any such adjustment shall be applied in a (1)(B), the monthly beneficiary obligation of be offered in the area for the year (under rules manner as to not result in a change in aggre- such beneficiary for such enrollment shall be an applicable to such plans under this part and not gate payments made under this part than would amount equal to the applicable percent (as de- under this subsection); have been made if the Administrator had not termined under section 1860D–17(c)) of the ‘‘(B) eligible beneficiaries described in para- applied such adjustment. monthly national average premium (as com- graph (1)(B) may receive access to qualified pre- ‘‘(c) SPECIAL RULE FOR 2006.—For purposes of puted under section 1860D–15) for the area for scription drug coverage through enrollment in applying this section for 2006, the Administrator the year, as adjusted using the geographic ad- the plan or with an entity with a contract under shall establish procedures for determining the juster under subparagraph (B). paragraph (1)(B); and weighted average under subsection (a)(2) for ‘‘(B) ESTABLISHMENT OF GEOGRAPHIC AD- ‘‘(C) for purposes of applying section 1860D– 2005. JUSTER.—The Administrator shall establish an 3(a)(1)(A)(ii), such plan shall be the plan des- ‘‘PAYMENTS TO ELIGIBLE ENTITIES ignated in the area under such section. appropriate methodology for adjusting the ‘‘SEC. 1860D–16. (a) PAYMENT OF MONTHLY ‘‘(f) TWO-YEAR CONTRACTS.—Except for a con- monthly beneficiary obligation (as computed PLAN PREMIUMS.—For each year (beginning tract entered into under subsection (e)(1)(B), a under subparagraph (A)) for the year in an area with 2006), the Administrator shall pay to each contract approved under this part shall be for a to take into account differences in drug prices entity offering a Medicare Prescription Drug 2-year period. among areas. In establishing such methodology, plan in which an eligible beneficiary is enrolled ‘‘COMPUTATION OF MONTHLY STANDARD the Administrator may take into account dif- an amount equal to the full amount of the PRESCRIPTION DRUG COVERAGE PREMIUMS ferences in drug utilization between eligible monthly plan premium approved for the plan beneficiaries in an area and eligible bene- ‘‘SEC. 1860D–14. (a) IN GENERAL.—For each under section 1860D–13 on behalf of each eligible ficiaries in other areas and the results of the on- year (beginning with 2006), the Administrator beneficiary enrolled in such plan for the year, going study required under section 106 of the shall compute a monthly standard prescription as adjusted using the risk adjusters that apply Prescription Drug and Medicare Improvement drug coverage premium for each Medicare Pre- to the standard prescription drug coverage pub- Act of 2003. Any such adjustment shall be ap- scription Drug plan approved under section lished under section 1860D–11. plied in a manner so as to not result in a change 1860D–13 and for each MedicareAdvantage plan. ‘‘(b) PORTION OF TOTAL PAYMENTS OF MONTH- EQUIREMENTS in the aggregate payments made under this part ‘‘(b) R .—The monthly standard LY PLAN PREMIUMS SUBJECT TO RISK.— that would have been made if the Administrator prescription drug coverage premium for a plan ‘‘(1) NOTIFICATION OF SPENDING UNDER THE had not applied such adjustment. for a year shall be equal to— PLAN.— ‘‘(3) PAYMENTS UNDER THE CONTRACT.— ‘‘(1) in the case of a plan offered by an eligible ‘‘(A) IN GENERAL.—For each year (beginning ‘‘(A) IN GENERAL.—A contract entered into entity or MedicareAdvantage organization that in 2007), the eligible entity offering a Medicare under paragraph (1)(B) shall provide for— provides standard prescription drug coverage or Prescription Drug plan shall notify the Admin- ‘‘(i) payment for the negotiated costs of cov- an actuarially equivalent prescription drug cov- istrator of the following: ered drugs provided to eligible beneficiaries en- erage and does not provide additional prescrip- ‘‘(i) TOTAL ACTUAL COSTS.—The total amount rolled with the entity; and tion drug coverage pursuant to section 1860D– of costs that the entity incurred in providing ‘‘(ii) payment of prescription management fees 6(a)(2), the monthly plan premium approved for standard prescription drug coverage (or pre- that are tied to performance requirements estab- the plan under section 1860D–13 for the year; scription drug coverage that is actuarially lished by the Administrator for the management, and equivalent pursuant to section 1860D–6(a)(1)(B)) administration, and delivery of the benefits ‘‘(2) in the case of a plan offered by an eligible for all enrollees under the plan in the previous under the contract. entity or MedicareAdvantage organization that year. ‘‘(B) PERFORMANCE REQUIREMENTS.—The per- provides additional prescription drug coverage ‘‘(ii) AMOUNTS RESULTING IN ACTUAL COSTS.— formance requirements established by the Ad- pursuant to section 1860D–6(a)(2)— With respect to the total amount under clause ministrator pursuant to subparagraph (A)(ii) ‘‘(A) an amount that reflects only the actu- (i) for the year— shall include the following: arial value of the standard prescription drug ‘‘(I) the aggregate amount of payments made ‘‘(i) The entity contains costs to the Prescrip- coverage offered under the plan; or by the entity to pharmacies and other entities tion Drug Account and to eligible beneficiaries ‘‘(B) if determined appropriate by the Admin- with respect to such coverage for such enrollees; enrolled under this part and with the entity. istrator, the monthly plan premium approved and ‘‘(ii) The entity provides such beneficiaries under section 1860D–13 for the year for the ‘‘(II) the aggregate amount of discounts, di- with quality clinical care. Medicare Prescription Drug plan (or, if applica- rect or indirect subsidies, rebates, or other price ‘‘(iii) The entity provides such beneficiaries ble, the MedicareAdvantage plan) that, as re- concessions or direct or indirect remunerations with quality services. quired under section 1860D–6(a)(2)(B) for a made to the entity with respect to such coverage ‘‘(C) ENTITY ONLY AT RISK TO THE EXTENT OF Medicare Prescription Drug plans and a for such enrollees. THE FEES TIED TO PERFORMANCE REQUIRE- MedicareAdvantage plan— ‘‘(B) CERTAIN EXPENSES NOT INCLUDED.—The MENTS.—An entity with a contract under para- ‘‘(i) is offered by such entity or organization amount under subparagraph (A)(i) may not in- graph (1)(B) shall only be at risk for the provi- in the same area as the plan; and clude— sion of benefits under the contract to the extent ‘‘(ii) does not provide additional prescription ‘‘(i) administrative expenses incurred in pro- that the management fees paid to the entity are drug coverage pursuant to such section. viding the coverage described in subparagraph tied to performance requirements under sub- ‘‘COMPUTATION OF MONTHLY NATIONAL AVERAGE (A)(i); paragraph (A)(ii). PREMIUM ‘‘(ii) amounts expended on providing addi- ‘‘(4) ELIGIBLE ENTITY THAT SUBMITTED A BID ‘‘SEC. 1860D–15. (a) COMPUTATION.— tional prescription drug coverage pursuant to FOR THE AREA NOT ELIGIBLE TO BE AWARDED THE ‘‘(1) IN GENERAL.—For each year (beginning section 1860D–6(a)(2); CONTRACT.—An eligible entity that submitted a with 2006) the Administrator shall compute a ‘‘(iii) amounts expended for which the entity bid to offer a Medicare Prescription Drug plan monthly national average premium equal to the is subsequently provided with reinsurance pay- for an area for a year under section 1860D–12, average of the monthly standard prescription ments under section 1860D–20; or including a bid submitted after the Adminis- drug coverage premium for each Medicare Pre- ‘‘(iv) discounts, direct or indirect subsidies, re- trator has exercised the authority under sub- scription Drug plan and each bates, or other price concessions or direct or in- section (d)(2), may not be awarded a contract MedicareAdvantage plan (as computed under direct remunerations made to the entity with re- under paragraph (1)(B) for that area and year. section 1860D–14). Such premium may be ad- spect to coverage described in subparagraph The previous sentence shall apply to an entity justed pursuant to any methodology determined (A)(i). that was awarded a contract under paragraph under subsection (b), as determined appropriate ‘‘(2) ADJUSTMENT OF PAYMENT.— (1)(B) for the area in the previous year and sub- by the Administrator. ‘‘(A) NO ADJUSTMENT IF ALLOWABLE COSTS mitted such a bid under section 1860D–12 for the ‘‘(2) WEIGHTED AVERAGE.—The monthly na- WITHIN RISK CORRIDOR.—If the allowable costs year. tional average premium computed under para- (specified in paragraph (3)) for the plan for the ‘‘(5) TERM OF CONTRACT.—A contract entered graph (1) shall be a weighted average, with the year are not more than the first threshold upper into under paragraph (1)(B) shall be for a 1- weight for each plan being equal to the average limit of the risk corridor (specified in paragraph year period. Such contract may provide for re- number of beneficiaries enrolled under such (4)(A)(iii)) and are not less than the first thresh- newal at the discretion of the Administrator if plan in the previous year. old lower limit of the risk corridor (specified in

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paragraph (4)(A)(i)) for the plan for the year, ‘‘(I) the target amount described in subpara- ‘‘(6) NO EFFECT ON ELIGIBLE BENEFICIARIES.— then no additional payments shall be made by graph (B) for the plan; minus No change in payments made by reason of this the Administrator and no payments shall be ‘‘(II) an amount equal to the second threshold subsection shall affect the beneficiary obligation made by (or collected from) the eligible entity of- risk percentage for the plan (as determined under section 1860D–17 for the year in which fering the plan. under subparagraph (C)(ii)) of such target such change in payments is made. ‘‘(B) INCREASE IN PAYMENT IF ALLOWABLE amount. ‘‘(7) DISCLOSURE OF INFORMATION.— COSTS ABOVE UPPER LIMIT OF RISK CORRIDOR.— ‘‘(iii) FIRST THRESHOLD UPPER LIMIT.—The ‘‘(A) IN GENERAL.—Each contract under this ‘‘(i) IN GENERAL.—If the allowable costs for first threshold upper limit of such corridor shall part shall provide that— the plan for the year are more than the first be equal to the sum of— ‘‘(i) the entity offering a Medicare Prescrip- threshold upper limit of the risk corridor for the ‘‘(I) such target amount; and tion Drug plan shall provide the Administrator plan for the year, then the Administrator shall ‘‘(II) the amount described in clause (i)(II). with such information as the Administrator de- increase the total of the monthly payments ‘‘(iv) SECOND THRESHOLD UPPER LIMIT.—The termines is necessary to carry out this section; made to the entity offering the plan for the year second threshold upper limit of such corridor and under subsection (a) by an amount equal to the shall be equal to the sum of— ‘‘(ii) the Administrator shall have the right to sum of— ‘‘(I) such target amount; and inspect and audit any books and records of the ‘‘(I) the applicable percent (as defined in sub- ‘‘(II) the amount described in clause (ii)(II). eligible entity that pertain to the information re- paragraph (D)) of such allowable costs which ‘‘(B) TARGET AMOUNT DESCRIBED.—The target garding costs provided to the Administrator are more than such first threshold upper limit of amount described in this paragraph is, with re- under paragraph (1). the risk corridor and not more than the second spect to a Medicare Prescription Drug plan of- ‘‘(B) RESTRICTION ON USE OF INFORMATION.— threshold upper limit of the risk corridor for the fered by an eligible entity in a year— Information disclosed or obtained pursuant to plan for the year (as specified under paragraph ‘‘(i) in the case of a plan offered by an eligible the provisions of this section may be used by of- (4)(A)(iv)); and entity that provides standard prescription drug ficers and employees of the Department of ‘‘(II) 90 percent of such allowable costs which coverage or actuarially equivalent prescription Health and Human Services only for the pur- are more than such second threshold upper limit drug coverage and does not provide additional poses of, and to the extent necessary in, car- of the risk corridor. prescription drug coverage pursuant to section rying out this section. ‘‘(ii) SPECIAL TRANSITIONAL CORRIDOR FOR 2006 1860D–6(a)(2), an amount equal to the total of ‘‘(c) STABILIZATION RESERVE FUND.— AND 2007.—If the Administrator determines with the monthly plan premiums paid to such entity ‘‘(1) ESTABLISHMENT.— respect to 2006 or 2007 that at least 60 percent of for such plan for the year pursuant to sub- ‘‘(A) IN GENERAL.—There is established, with- Medicare Prescription Drug plans and section (a), reduced by the percentage specified in the Prescription Drug Account, a stabiliza- MedicareAdvantage Plans (excluding MSA in subparagraph (D); and tion reserve fund in which the Administrator plans or private fee-for-service plans that do not ‘‘(ii) in the case of a plan offered by an eligi- shall deposit amounts on behalf of eligible enti- provide qualified prescription drug coverage) ble entity that provides additional prescription ties in accordance with paragraph (2) and such have allowable costs for the plan for the year drug coverage pursuant to section 1860D–6(a)(2), amounts shall be made available by the Sec- that are more than the first threshold upper an amount equal to the total of the monthly retary for the use of eligible entities in contract limit of the risk corridor for the plan for the plan premiums paid to such entity for such plan year 2008 and subsequent contract years in ac- year and that such plans represent at least 60 for the year pursuant to subsection (a) that are cordance with paragraph (3). percent of eligible beneficiaries enrolled under related to standard prescription drug coverage ‘‘(B) REVERSION OF UNUSED AMOUNTS.—Any this part, clause (i)(I) shall be applied by sub- (determined using the rules under section amount in the stabilization reserve fund estab- stituting ‘90 percent’ for ‘applicable percent’. 1860D–14(b)), reduced by the percentage speci- lished under subparagraph (A) that is not ex- ‘‘(C) PLAN PAYMENT IF ALLOWABLE COSTS fied in subparagraph (D). pended by an eligible entity in accordance with BELOW LOWER LIMIT OF RISK CORRIDOR.—If the ‘‘(C) FIRST AND SECOND THRESHOLD RISK PER- paragraph (3) or that was deposited for the use allowable costs for the plan for the year are less CENTAGE DEFINED.— of an eligible entity that no longer has a con- than the first threshold lower limit of the risk ‘‘(i) FIRST THRESHOLD RISK PERCENTAGE.— tract under this part shall revert for the use of corridor for the plan for the year, then the enti- Subject to clause (iii), for purposes of this sec- the Prescription Drug Account. ty offering the plan shall a make a payment to tion, the first threshold risk percentage is— ‘‘(2) DEPOSIT OF AMOUNTS FOR 5 YEARS.— the Administrator of an amount (or the Admin- ‘‘(I) for 2006 and 2007, and 2.5 percent; ‘‘(A) IN GENERAL.—If the target amount for a istrator shall otherwise recover from the plan an ‘‘(II) for 2008 through 2011, 5 percent; and Medicare Prescription Drug plan for 2006, 2007, amount) equal to— ‘‘(III) for 2012 and subsequent years, a per- 2008, 2009, or 2010 (as determined under sub- ‘‘(i) the applicable percent (as so defined) of centage established by the Administrator, but in section (b)(4)(B)) exceeds the applicable costs for such allowable costs which are less than such no case less than 5 percent. the plan for the year by more than 3 percent, first threshold lower limit of the risk corridor ‘‘(ii) SECOND THRESHOLD RISK PERCENTAGE.— then— and not less than the second threshold lower Subject to clause (iii), for purposes of this sec- ‘‘(i) the entity offering the plan shall make a limit of the risk corridor for the plan for the tion, the second threshold risk percentage is— payment to the Administrator of an amount (or year (as specified under paragraph (4)(A)(ii)); ‘‘(I) for 2006 and 2007, 5.0 percent; the Administrator shall otherwise recover from and ‘‘(II) for 2008 through 2011, 10 percent the plan an amount) equal to the portion of ‘‘(ii) 90 percent of such allowable costs which ‘‘(III) for 2012 and subsequent years, a per- such excess that is in excess of 3 percent of the are less than such second threshold lower limit centage established by the Administrator that is target amount; and of the risk corridor. greater than the percent established for the year ‘‘(ii) the Administrator shall deposit an ‘‘(D) APPLICABLE PERCENT DEFINED.—For pur- under clause (i)(III), but in no case less than 10 amount equal to the amount collected or other- poses of this paragraph, the term ‘applicable percent. wise recovered under clause (i) in the stabiliza- percent’ means— ‘‘(iii) REDUCTION OF RISK PERCENTAGE TO EN- tion reserve fund on behalf of the eligible entity ‘‘(i) for 2006 and 2007, 75 percent; and SURE 2 PLANS IN AN AREA.—Pursuant to para- ‘‘(ii) for 2008 and subsequent years, 50 per- offering such plan. graph (2) of section 1860D–13(d), the Adminis- ‘‘(B) APPLICABLE COSTS.—For purposes of sub- cent. trator may reduce the applicable first or second ‘‘(3) ESTABLISHMENT OF ALLOWABLE COSTS.— paragraph (A), the term ‘applicable costs’ threshold risk percentage in an area in a year in For each year, the Administrator shall establish means, with respect to a Medicare Prescription order to ensure the access to plans required the allowable costs for each Medicare Prescrip- Drug plan and year, an amount equal the sum under paragraph (1) of such section. tion Drug plan for the year. The allowable costs of— ‘‘(D) TARGET AMOUNT NOT TO INCLUDE ADMIN- for a plan for a year shall be equal to the ‘‘(i) the allowable costs for the plan and year ISTRATIVE EXPENSES NEGOTIATED BETWEEN THE amount described in paragraph (1)(A)(i) for the (as determined under subsection (b)(3)(A); and ADMINISTRATOR AND THE ENTITY OFFERING THE plan for the year. ‘‘(ii) the total amount by which monthly pay- PLAN.—For each year (beginning in 2006), the ‘‘(4) ESTABLISHMENT OF RISK CORRIDORS.— ments to the plan were reduced (or otherwise re- ‘‘(A) IN GENERAL.—For each year (beginning Administrator and the entity offering a Medi- covered from the plan) for the year under sub- with 2006), the Administrator shall establish a care Prescription Drug plan shall negotiate, as section (b)(2)(C). risk corridor for each Medicare Prescription part of the negotiation process described in sec- ‘‘(3) USE OF RESERVE FUND TO STABILIZE OR Drug plan. The risk corridor for a plan for a tion 1860D–13(b) during the previous year, the REDUCE MONTHLY PLAN PREMIUMS.— year shall be equal to a range as follows: percentage of the payments to the entity under ‘‘(A) IN GENERAL.—For any contract year be- ‘‘(i) FIRST THRESHOLD LOWER LIMIT.—The first subsection (a) with respect to the plan that are ginning after 2007, an eligible entity offering a threshold lower limit of such corridor shall be attributable and reasonably incurred for admin- Medicare Prescription Drug plan may use funds equal to— istrative expenses for providing standard pre- in the stabilization reserve fund in the Prescrip- ‘‘(I) the target amount described in subpara- scription drug coverage or actuarially equiva- tion Drug Account that were deposited in such graph (B) for the plan; minus lent prescription drug coverage in the year. fund on behalf of the entity to stabilize or re- ‘‘(II) an amount equal to the first threshold ‘‘(5) PLANS AT RISK FOR ENTIRE AMOUNT OF duce monthly plan premiums submitted under risk percentage for the plan (as determined ADDITIONAL PRESCRIPTION DRUG COVERAGE.—An section 1860D–12(b)(3). under subparagraph (C)(i)) of such target eligible entity that offers a Medicare Prescrip- ‘‘(B) PROCEDURES.—The Administrator shall amount. tion Drug plan that provides additional pre- establish procedures for— ‘‘(ii) SECOND THRESHOLD LOWER LIMIT.—The scription drug coverage pursuant to section ‘‘(i) reducing monthly plan premiums sub- second threshold lower limit of such corridor 1860D–6(a)(2) shall be at full financial risk for mitted under section 1860D–12(b)(3) pursuant to shall be equal to— the provision of such additional coverage. subparagraph (A); and

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00041 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8910 CONGRESSIONAL RECORD — SENATE July 7, 2003 ‘‘(ii) making payments from the plan stabiliza- by the Administrator under section 1860D–13 for provisions related to the collection of the month- tion reserve fund in the Prescription Drug Ac- a Medicare Prescription Drug plan for the year ly beneficiary obligation for qualified prescrip- count to eligible entities that inform the Sec- exceeds the monthly national average premium tion drug coverage under a MedicareAdvantage retary under section 1860D–12(b)(5) of the enti- (as computed under section 1860D–15) for the plan, see section 1858A(e). ty’s intent to use funds in such reserve fund to area for the year, the monthly beneficiary obli- ‘‘PREMIUM AND COST-SHARING SUBSIDIES FOR reduce such premiums. gation of the eligible beneficiary in that year LOW-INCOME INDIVIDUALS ‘‘(d) PORTION OF PAYMENTS OF MONTHLY shall be an amount equal to the sum of— ‘‘SEC. 1860D–19. (a) AMOUNT OF SUBSIDIES.— PLAN PREMIUMS ATTRIBUTABLE TO ADMINISTRA- ‘‘(A) the applicable percent of the amount of ‘‘(1) FULL PREMIUM SUBSIDY AND REDUCTION TIVE EXPENSES TIED TO PERFORMANCE REQUIRE- such monthly national average premium; plus OF COST-SHARING FOR QUALIFIED MEDICARE MENTS.— ‘‘(B) the amount by which the monthly plan BENEFICIARIES.—In the case of a qualified medi- ‘‘(1) IN GENERAL.—The Administrator shall es- premium approved by the Administrator for the care beneficiary (as defined in paragraph tablish procedures to adjust the portion of the plan exceeds the amount of such monthly na- (4)(A))— payments made to an entity under subsection tional average premium. ‘‘(A) section 1860D–17 shall be applied— (a) that are attributable to administrative ex- ‘‘(b) BENEFICIARIES ENROLLED IN A ‘‘(i) in subsection (c), by substituting ‘0 per- penses (as determined pursuant to subsection MEDICAREADVANTAGE PLAN.—In the case of an cent’ for the applicable percent that would oth- (b)(4)(D)) to ensure that the entity meets the eligible beneficiary that is enrolled in a erwise apply under such subsection; and ‘‘(ii) in subsection (a)(3)(B), by substituting performance requirements described in clauses MedicareAdvantage plan (except for an MSA ‘the amount of the monthly plan premium for (ii) and (iii) of section 1860D–13(e)(4)(B). plan or a private fee-for-service plan that does the Medicare Prescription Drug plan with the ‘‘(2) NO EFFECT ON ELIGIBLE BENEFICIARIES.— not provide qualified prescription drug cov- lowest monthly plan premium in the area that No change in payments made by reason of this erage), the Medicare monthly beneficiary obliga- the beneficiary resides’ for ‘the amount of such subsection shall affect the beneficiary obligation tion for qualified prescription drug coverage monthly national average premium’, but only if under section 1860D–17 for the year in which shall be determined pursuant to section there is no Medicare Prescription Drug plan of- such change in payments is made. 1858A(d). ‘‘(c) APPLICABLE PERCENT.—For purposes of fered in the area in which the individual resides ‘‘(e) PAYMENT TERMS.— that has a monthly plan premium for the year ‘‘(1) ADMINISTRATOR PAYMENTS.—Payments to this section, except as provided in section 1860D–19 (relating to premium subsidies for low- that is equal to or less than the monthly na- an entity offering a Medicare Prescription Drug tional average premium (as computed under sec- plan under this section shall be made in a man- income individuals), the applicable percent for any year is the percentage equal to a fraction— tion 1860D–15) for the area for the year; ner determined by the Administrator and based ‘‘(B) the annual deductible applicable under upon the manner in which payments are made ‘‘(1) the numerator of which is 30 percent; and ‘‘(2) the denominator of which is 100 percent section 1860D–6(c)(1) in a year shall be reduced under section 1853(a) (relating to payments to to $0; MedicareAdvantage organizations). minus a percentage equal to— ‘‘(A) the total reinsurance payments which ‘‘(C) section 1860D–6(c)(2) shall be applied by ‘‘(2) PLAN PAYMENTS.—The Administrator the Administrator estimates will be made under substituting ‘2.5 percent’ for ‘50 percent’ each shall establish a process for collecting (or other section 1860D–20 to qualifying entities described place it appears; otherwise recovering) amounts that an entity of- ‘‘(D) such individual shall be responsible for in subsection (e)(3) of such section during the fering a Medicare Prescription Drug plan is re- cost-sharing for the cost of any covered drug year; divided by quired to make to the Administrator under this provided in the year (after the individual has ‘‘(B) the sum of— section. reached the initial coverage limit described in ‘‘(i) the amount estimated under subpara- ‘‘(f) PAYMENTS TO MEDICAREADVANTAGE section 1860D–6(c)(3) and before the individual graph (A) for the year; and PLANS.—For provisions related to payments to ‘‘(ii) the total payments which the Adminis- has reached the annual out-of-pocket limit MedicareAdvantage organizations offering trator estimates will be made under sections under section 1860D–6(c)(4)(A)), that is equal to 5.0 percent; and MedicareAdvantage plans for qualified prescrip- 1860D–16 and 1858A(c) during the year that re- ‘‘(E) section 1860D–6(c)(4)(A) shall be applied tion drug coverage made available under the late to standard prescription drug coverage (or by substituting ‘2.5 percent’ for ‘10 percent’. plan, see section 1858A(c). actuarially equivalent prescription drug cov- ‘‘(g) SECONDARY PAYER PROVISIONS.—The erage). In no case may the application of subparagraph provisions of section 1862(b) shall apply to the (A) result in a monthly beneficiary obligation ‘‘COLLECTION OF MONTHLY BENEFICIARY benefits provided under this part. that is below 0. OBLIGATION ‘‘COMPUTATION OF MONTHLY BENEFICIARY ‘‘(2) FULL PREMIUM SUBSIDY AND REDUCTION ‘‘SEC. 1860D–18. (a) COLLECTION OF AMOUNT OBLIGATION OF COST-SHARING FOR SPECIFIED LOW INCOME IN SAME MANNER AS PART B PREMIUM.— MEDICARE BENEFICIARIES AND QUALIFYING INDI- ‘‘SEC. 1860D–17. (a) BENEFICIARIES ENROLLED ‘‘(1) IN GENERAL.—Subject to paragraph (2), VIDUALS.—In the case of a specified low income IN A MEDICARE PRESCRIPTION DRUG PLAN.—In the amount of the monthly beneficiary obliga- the case of an eligible beneficiary enrolled under medicare beneficiary (as defined in paragraph tion (determined under section 1860D–17) appli- (4)(B)) or a qualifying individual (as defined in this part and in a Medicare Prescription Drug cable to an eligible beneficiary under this part paragraph (4)(C))— plan, the monthly beneficiary obligation for en- (after application of any increase under section ‘‘(A) section 1860D–17 shall be applied— rollment in such plan in a year shall be deter- 1860D–2(b)(1)(A)) shall be collected and credited ‘‘(i) in subsection (c), by substituting ‘0 per- mined as follows: to the Prescription Drug Account in the same cent’ for the applicable percent that would oth- ‘‘(1) MONTHLY PLAN PREMIUM EQUALS MONTH- manner as the monthly premium determined erwise apply under such subsection; and LY NATIONAL AVERAGE PREMIUM.—If the amount under section 1839 is collected and credited to ‘‘(ii) in subsection (a)(3)(B), by substituting of the monthly plan premium approved by the the Federal Supplementary Medical Insurance ‘the amount of the monthly plan premium for Administrator under section 1860D–13 for a Trust Fund under section 1840. the Medicare Prescription Drug plan with the Medicare Prescription Drug plan for the year is ‘‘(2) PROCEDURES FOR SPONSOR TO PAY OBLI- lowest monthly plan premium in the area that equal to the monthly national average premium GATION ON BEHALF OF RETIREE.—The Adminis- the beneficiary resides’ for ‘the amount of such (as computed under section 1860D–15) for the trator shall establish procedures under which monthly national average premium’, but only if area for the year, the monthly beneficiary obli- an eligible beneficiary enrolled in a Medicare there is no Medicare Prescription Drug plan of- gation of the eligible beneficiary in that year Prescription Drug plan may elect to have the fered in the area in which the individual resides shall be an amount equal to the applicable per- sponsor (as defined in paragraph (5) of section that has a monthly plan premium for the year cent (as determined in subsection (c)) of the 1860D–20(e)) of employment-based retiree health that is equal to or less than the monthly na- amount of such monthly national average pre- coverage (as defined in paragraph (4)(B) of such tional average premium (as computed under sec- mium. section) in which the beneficiary is enrolled pay tion 1860D–15) for the area for the year; ‘‘(2) MONTHLY PLAN PREMIUM LESS THAN the amount of the monthly beneficiary obliga- ‘‘(B) the annual deductible applicable under MONTHLY NATIONAL AVERAGE PREMIUM.—If the tion applicable to the beneficiary under this section 1860D–6(c)(1) in a year shall be reduced amount of the monthly plan premium approved part directly to the Administrator. to $0; by the Administrator under section 1860D–13 for ‘‘(b) INFORMATION NECESSARY FOR COLLEC- ‘‘(C) section 1860D–6(c)(2) shall be applied by the Medicare Prescription Drug plan for the TION.—In order to carry out subsection (a), the substituting ‘5.0 percent’ for ‘50 percent’ each year is less than the monthly national average Administrator shall transmit to the Commis- place it appears; premium (as computed under section 1860D–15) sioner of Social Security— ‘‘(D) such individual shall be responsible for for the area for the year, the monthly bene- ‘‘(1) by the beginning of each year, the name, cost-sharing for the cost of any covered drug ficiary obligation of the eligible beneficiary in social security account number, monthly bene- provided in the year (after the individual has that year shall be an amount equal to— ficiary obligation owed by each individual en- reached the initial coverage limit described in ‘‘(A) the applicable percent of the amount of rolled in a Medicare Prescription Drug plan for section 1860D–6(c)(3) and before the individual such monthly national average premium; minus each month during the year, and other informa- has reached the annual out-of-pocket limit ‘‘(B) the amount by which such monthly nation determined appropriate by the Adminis- under section 1860D–6(c)(4)(A)), that is equal to tional average premium exceeds the amount of trator; and 10.0 percent; and the monthly plan premium approved by the Ad- ‘‘(2) periodically throughout the year, infor- ‘‘(E) section 1860D–6(c)(4)(A) shall be applied ministrator for the plan. mation to update the information previously by substituting ‘2.5 percent’ for ‘10 percent’. ‘‘(3) MONTHLY PLAN PREMIUM EXCEEDS transmitted under this paragraph for the year. In no case may the application of subparagraph MONTHLY NATIONAL AVERAGE PREMIUM.—If the ‘‘(c) COLLECTION FOR BENEFICIARIES EN- (A) result in a monthly beneficiary obligation amount of the monthly plan premium approved ROLLED IN A MEDICAREADVANTAGE PLAN.—For that is below 0.

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‘‘(3) SLIDING SCALE PREMIUM SUBSIDY AND RE- ‘‘(i) is enrolled under this part, including an Columbia, such individual may be provided with DUCTION OF COST-SHARING FOR SUBSIDY-ELIGIBLE individual who is enrolled under a medical assistance for covered outpatient drugs INDIVIDUALS.— MedicareAdvantage plan; (as such term is defined for purposes of section ‘‘(A) IN GENERAL.—In the case of a subsidy-el- ‘‘(ii) is eligible for medicare cost-sharing de- 1927) in accordance with section 1935 under the igible individual (as defined in paragraph scribed in section 1905(p)(3)(A)(ii) under the State medicaid program under title XIX. (4)(D))— State plan under title XIX (or under a waiver of ‘‘(I) UPDATE OF ASSET OR RESOURCE TEST.— ‘‘(i) section 1860D–17 shall be applied— such plan), on the basis of being described in With respect to eligibility determinations for ‘‘(I) in subsection (c), by substituting ‘subsidy section 1902(a)(10)(E)(iii), as determined under premium and cost-sharing subsidies under this percent’ for the applicable percentage that such plan (or under a waiver of plan); and section that are made on or after January 1, would otherwise apply under such subsection; ‘‘(iii) is not— 2009, such determinations shall be made (to the and ‘‘(I) a qualified medicare beneficiary; extent a State, as of such date, has not already ‘‘(II) in subparagraphs (A) and (B) of sub- ‘‘(II) a qualifying individual; or eliminated the application of an asset or re- section (a)(3), by substituting ‘the amount of the ‘‘(III) a dual eligible individual. source test under section 1905(p)(1)(C)) in ac- monthly plan premium for the Medicare Pre- ‘‘(C) QUALIFYING INDIVIDUAL.—Subject to sub- cordance with the following: scription Drug plan with the lowest monthly paragraph (H), the term ‘qualifying individual’ ‘‘(i) SELF-DECLARATION OF VALUE.— plan premium in the area that the beneficiary means an individual who— ‘‘(I) IN GENERAL.—A State shall permit an in- resides’ for ‘the amount of such monthly na- ‘‘(i) is enrolled under this part, including an dividual applying for such subsidies to declare tional average premium’, but only if there is no individual who is enrolled under a and certify by signature under penalty of per- Medicare Prescription Drug plan offered in the MedicareAdvantage plan; jury on the application form that the value of area in which the individual resides that has a ‘‘(ii) is eligible for medicare cost-sharing de- the individual’s assets or resources (or the com- monthly plan premium for the year that is equal scribed in section 1905(p)(3)(A)(ii) under the bined value of the individual’s assets or re- to or less than the monthly national average State plan under title XIX (or under a waiver of sources and the assets or resources of the indi- premium (as computed under section 1860D–15) such plan), on the basis of being described in vidual’s spouse), as determined under section for the area for the year; and section 1902(a)(10)(E)(iv) (without regard to any 1613 for purposes of the supplemental security ‘‘(ii) the annual deductible applicable under termination of the application of such section income program, does not exceed $10,000 ($20,000 section 1860D–6(c)(1)— under title XIX), as determined under such plan in the case of the combined value of the individ- ‘‘(I) for 2006, shall be reduced to $50; and (or under a waiver of such plan); and ual’s assets or resources and the assets or re- ‘‘(iii) is not— ‘‘(II) for a subsequent year, shall be reduced sources of the individual’s spouse). ‘‘(I) a qualified medicare beneficiary; to the amount specified under this clause for the ‘‘(II) ANNUAL ADJUSTMENT.—Beginning on previous year increased by the percentage speci- ‘‘(II) a specified low-income medicare beneficiary; or January 1, 2010, and for each subsequent year, fied in section 1860D–6(c)(5) for the year in- the dollar amounts specified in subclause (I) for volved; ‘‘(III) a dual eligible individual. ‘‘(D) SUBSIDY-ELIGIBLE INDIVIDUAL.—Subject the preceding year shall be increased by the per- ‘‘(iii) section 1860D–6(c)(2) shall be applied by centage increase in the Consumer Price Index substituting ‘10.0 percent’ for ‘50 percent’ each to subparagraph (H), the term ‘subsidy-eligible individual’ means an individual— for all urban consumers (U.S. urban average) place it appears; for the 12-month period ending with June of the ‘‘(iv) such individual shall be responsible for ‘‘(i) who is enrolled under this part, including an individual who is enrolled under a previous year. cost-sharing for the cost of any covered drug ‘‘(ii) METHODOLOGY FLEXIBILITY.—Nothing in provided in the year (after the individual has MedicareAdvantage plan; ‘‘(ii) whose income is less than 160 percent of clause (i) shall be construed as prohibiting a reached the initial coverage limit described in State in making eligibility determinations for section 1860D–6(c)(3) and before the individual the poverty line; and ‘‘(iii) who is not— premium and cost-sharing subsidies under this has reached the annual out-of-pocket limit section from using asset or resource methodolo- under section 1860D–6(c)(4)(A)), that is equal to ‘‘(I) a qualified medicare beneficiary; ‘‘(II) a specified low-income medicare bene- gies that are less restrictive than the methodolo- 20.0 percent; and ficiary; gies used under 1613 for purposes of the supple- ‘‘(v) such individual shall be responsible for ‘‘(III) a qualifying individual; or mental security income program. the cost-sharing described in section 1860D– ‘‘(IV) a dual eligible individual. ‘‘(J) DEVELOPMENT OF MODEL DECLARATION 6(c)(4)(A). ‘‘(E) DUAL ELIGIBLE INDIVIDUAL.— FORM.—The Secretary shall— In no case may the application of clause (i) re- ‘‘(i) IN GENERAL.—The term ‘dual eligible indi- ‘‘(i) develop a model, simplified application sult in a monthly beneficiary obligation that is vidual’ means an individual who is— form for individuals to use in making a self-dec- below 0. ‘‘(I) enrolled under title XIX or under a waiv- laration of assets or resources in accordance ‘‘(B) SUBSIDY PERCENT DEFINED.—For pur- er under section 1115 of the requirements of such with subparagraph (I)(i); and poses of subparagraph (A)(i), the term ‘subsidy title for medical assistance that is not less than ‘‘(ii) provide such form to States and, for pur- percent’ means, with respect to a State, a per- the medical assistance provided to an individual poses of outreach under section 1144, the Com- cent determined on a linear sliding scale rang- described in section 1902(a)(10)(A)(i) and in- missioner of Social Security.’’. ing from— cludes covered outpatient drugs (as such term is ‘‘(b) RULES IN APPLYING COST-SHARING SUB- ‘‘(i) 0 percent with respect to a subsidy-eligible defined for purposes of section 1927); and SIDIES.—Nothing in this section shall be con- individual residing in the State whose income ‘‘(II) entitled to benefits under part A and en- strued as preventing an eligible entity offering a does not exceed 135 percent of the poverty line; rolled under part B. Medicare Prescription Drug plan or a to ‘‘(ii) INCLUSION OF MEDICALLY NEEDY.—Such MedicareAdvantage organization offering a ‘‘(ii) the highest percentage that would other- term includes an individual described in section MedicareAdvantage plan from waiving or reduc- wise apply under section 1860D–17 in the service 1902(a)(10)(C). ing the amount of the deductible or other cost- area in which the subsidy-eligible individual re- ‘‘(F) POVERTY LINE.—The term ‘poverty line’ sharing otherwise applicable pursuant to section sides, in the case of a subsidy-eligible individual has the meaning given such term in section 1860D–6(a)(2). residing in the State whose income equals 160 673(2) of the Community Services Block Grant ‘‘(c) ADMINISTRATION OF SUBSIDY PROGRAM.— percent of the poverty line. Act (42 U.S.C. 9902(2)), including any revision The Administrator shall establish a process ‘‘(4) DEFINITIONS.—In this part: required by such section. whereby, in the case of an individual eligible for ‘‘(A) QUALIFIED MEDICARE BENEFICIARY.— ‘‘(G) ELIGIBILITY DETERMINATIONS.—Begin- a cost-sharing subsidy under subsection (a) who Subject to subparagraph (H), the term ‘qualified ning on November 1, 2005, the determination of is enrolled in a Medicare Prescription Drug plan medicare beneficiary’ means an individual whether an individual residing in a State is an or a MedicareAdvantage plan— who— individual described in subparagraph (A), (B), ‘‘(1) the Administrator provides for a notifica- ‘‘(i) is enrolled under this part, including an (C), (D), or (E) and, for purposes of paragraph tion of the eligible entity or MedicareAdvantage individual who is enrolled under a (3), the amount of an individual’s income, shall organization involved that the individual is eli- MedicareAdvantage plan; be determined under the State medicaid plan for gible for a cost-sharing subsidy and the amount ‘‘(ii) is eligible for medicare cost-sharing de- the State under section 1935(a). In the case of a of the subsidy under such subsection; scribed in section 1905(p)(3) under the State State that does not operate such a medicaid ‘‘(2) the entity or organization involved re- plan under title XIX (or under a waiver of such plan (either under title XIX or under a state- duces the cost-sharing otherwise imposed by the plan), on the basis of being described in section wide waiver granted under section 1115), such amount of the applicable subsidy and submits to 1905(p)(1), as determined under such plan (or determination shall be made under arrange- the Administrator information on the amount of under a waiver of plan); and ments made by the Administrator. such reduction; and ‘‘(iii) is not— ‘‘(H) NONAPPLICATION TO DUAL ELIGIBLE INDI- ‘‘(I) a specified low-income medicare bene- VIDUALS AND TERRITORIAL RESIDENTS.—In the ‘‘(3) the Administrator periodically and on a ficiary; case of an individual who is a dual eligible indi- timely basis reimburses the entity or organiza- ‘‘(II) a qualifying individual; or vidual or an individual who is not a resident of tion for the amount of such reductions. ‘‘(III) a dual eligible individual. the 50 States or the District of Columbia— The reimbursement under paragraph (3) may be ‘‘(B) SPECIFIED LOW INCOME MEDICARE BENE- ‘‘(i) the subsidies provided under this section computed on a capitated basis, taking into ac- FICIARY.—Subject to subparagraph (H), the term shall not apply; and count the actuarial value of the subsidies and ‘specified low income medicare beneficiary’ ‘‘(ii) in the case of such an individual who is with appropriate adjustments to reflect dif- means an individual who— not a resident of the 50 States or the District of ferences in the risks actually involved.

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‘‘(d) RELATION TO MEDICAID PROGRAM.—For for a coverage year, the Administrator shall es- insurance coverage or pursuant to statutory or provisions providing for eligibility determina- tablish the allowable costs for the individual contractual obligation, of health care costs for tions and additional Federal payments for ex- and year. Such allowable costs shall be equal to retired individuals (or for such individuals and penditures related to providing prescription the amount described in such subsection for the their spouses and dependents) based on their drug coverage for dual eligible individuals and individual and year. status as former employees or labor union mem- territorial residents under the medicaid pro- ‘‘(d) PAYMENT METHODS.— bers. gram, see section 1935. ‘‘(1) IN GENERAL.—Payments under this sec- ‘‘(5) QUALIFIED STATE PHARMACEUTICAL AS- ‘‘REINSURANCE PAYMENTS FOR EXPENSES IN- tion shall be based on such a method as the Ad- SISTANCE PROGRAM.— ‘‘(A) IN GENERAL.—The term ‘qualified State CURRED IN PROVIDING PRESCRIPTION DRUG ministrator determines. The Administrator may pharmaceutical assistance program’ means a COVERAGE ABOVE THE ANNUAL OUT-OF-POCKET establish a payment method by which interim State pharmaceutical assistance program if, THRESHOLD payments of amounts under this section are with respect to a qualifying covered individual ‘‘SEC. 1860D–20. (a) REINSURANCE PAY- made during a year based on the Administra- tor’s best estimate of amounts that will be pay- who is covered under the program, the following MENTS.— requirements are met: ‘‘(1) IN GENERAL.—Subject to section 1860D– able after obtaining all of the information. ‘‘(2) SOURCE OF PAYMENTS.—Payments under ‘‘(i) ASSURANCE.—The State offering the pro- 21(b), the Administrator shall provide in accord- gram shall, annually or at such other times as ance with this section for payment to a quali- this section shall be made from the Prescription Drug Account. the Administrator may require, provide the Ad- fying entity of the reinsurance payment amount ministrator an attestation that, in accordance (as specified in subsection (c)(1)) for costs in- ‘‘(e) DEFINITIONS.—In this section: ‘‘(1) COVERAGE YEAR.—The term ‘coverage with the procedures established under section curred by the entity in providing prescription year’ means a calendar year in which covered 1860D–6(f), that— drug coverage for a qualifying covered indi- drugs are dispensed if a claim for payment is ‘‘(I) the actuarial value of prescription drug vidual after the individual has reached the an- made under the plan for such drugs, regardless coverage under the program is at least equal to nual out-of-pocket threshold specified in section of when the claim is paid. the actuarial value of standard prescription 1860D–6(c)(4)(B) for the year. ‘‘(2) QUALIFYING COVERED INDIVIDUAL.—The drug coverage; and ‘‘(2) BUDGET AUTHORITY.—This section con- term ‘qualifying covered individual’ means an ‘‘(II) the actuarial value of subsidies to indi- stitutes budget authority in advance of appro- individual who— viduals provided under the program are at least priations Acts and represents the obligation of ‘‘(A) is enrolled in this part and in a Medicare equal to the actuarial value of the subsidies that the Administrator to provide for the payment of Prescription Drug plan; would apply under section 1860D–19 if the indi- amounts provided under this section. ‘‘(B) is enrolled in this part and in a vidual was enrolled under this part rather than ‘‘(b) NOTIFICATION OF SPENDING UNDER THE MedicareAdvantage plan (except for an MSA under the program. PLAN FOR COSTS INCURRED IN PROVIDING PRE- ‘‘(ii) DISCLOSURE OF INFORMATION.—The State plan or a private fee-for-service plan that does SCRIPTION DRUG COVERAGE ABOVE THE ANNUAL complies with the requirements described in not provide qualified prescription drug cov- OUT-OF-POCKET THRESHOLD.— clauses (i) and (ii) of section 1860D–16(b)(7)(A). erage); ‘‘(B) STATE PHARMACEUTICAL ASSISTANCE PRO- ‘‘(1) IN GENERAL.—Each qualifying entity ‘‘(C) is eligible for, but not enrolled in, the GRAM.—For purposes of subparagraph (A), the shall notify the Administrator of the following program under this part, and is covered under a term ‘State pharmaceutical assistance program’ with respect to a qualifying covered individual qualified retiree prescription drug plan; or means a program— for a coverage year: ‘‘(D) is eligible for, but not enrolled in, the ‘‘(A) TOTAL ACTUAL COSTS.—The total amount ‘‘(i) that is in operation as of the date of en- program under this part, and is covered under a actment of the Prescription Drug and Medicare (if any) of costs that the qualifying entity in- qualified State pharmaceutical assistance pro- curred in providing prescription drug coverage Improvement Act of 2003; gram. ‘‘(ii) that is sponsored and financed by a for the individual in the year after the indi- ‘‘(3) QUALIFYING ENTITY.—The term ‘quali- vidual had reached the annual out-of-pocket State; and fying entity’ means any of the following that ‘‘(iii) that provides coverage for outpatient threshold specified in section 1860D–6(c)(4)(B) has entered into an agreement with the Admin- for the year. drugs for individuals in the State who meet istrator to provide the Administrator with such income- and resource-related qualifications ‘‘(B) AMOUNTS RESULTING IN ACTUAL COSTS.— information as may be required to carry out this With respect to the total amount under subpara- specified under such program. section: ‘‘(6) SPONSOR.—The term ‘sponsor’ means a graph (A) for the year— ‘‘(A) An eligible entity offering a Medicare plan sponsor, as defined in section 3(16)(B) of ‘‘(i) the aggregate amount of payments made Prescription Drug plan under this part. the Employee Retirement Income Security Act of by the entity to pharmacies and other entities ‘‘(B) A MedicareAdvantage organization of- 1974. with respect to such coverage for such enrollees; fering a MedicareAdvantage plan under part C ‘‘(f) DISTRIBUTION OF REINSURANCE PAYMENT and (except for an MSA plan or a private fee-for- AMOUNTS.— ‘‘(ii) the aggregate amount of discounts, direct service plan that does not provide qualified pre- ‘‘(1) IN GENERAL.—Any sponsor meeting the or indirect subsidies, rebates, or other price con- scription drug coverage). requirements of subsection (e)(3) with respect to cessions or direct or indirect remunerations ‘‘(C) The sponsor of a qualified retiree pre- a quarter in a calendar year, but which is not made to the entity with respect to such coverage scription drug plan. an employer, shall distribute the reinsurance for such enrollees. ‘‘(D) A State offering a qualified State phar- payments received for such quarter under sub- ‘‘(2) CERTAIN EXPENSES NOT INCLUDED.—The maceutical assistance program. section (c) to the employers contributing to the amount under paragraph (1)(A) may not in- ‘‘(4) QUALIFIED RETIREE PRESCRIPTION DRUG qualified retiree prescription drug plan main- clude— PLAN.— tained by such sponsor during that quarter, in ‘‘(A) administrative expenses incurred in pro- ‘‘(A) IN GENERAL.—The term ‘qualified retiree the manner described in paragraphs (2) and (3). viding the coverage described in paragraph prescription drug plan’ means employment- ‘‘(2) ALLOCATION.—The reinsurance payments (1)(A); based retiree health coverage if, with respect to to be distributed pursuant to paragraph (1) shall ‘‘(B) amounts expended on providing addi- a qualifying covered individual who is covered be allocated proportionally among all employers tional prescription drug coverage pursuant to under the plan, the following requirements are who contribute to the plan during the quarter section 1860D–6(a)(2); or met: with respect to which the payments are received. ‘‘(C) discounts, direct or indirect subsidies, re- ‘‘(i) ATTESTATION OF ACTUARIAL VALUE OF The share allocated to each employer contrib- bates, or other price concessions or direct or in- COVERAGE.—The sponsor of the plan shall, an- uting to the plan during a quarter shall be de- direct remunerations made to the entity with re- nually or at such other time as the Adminis- termined by multiplying the total reinsurance spect to coverage described in paragraph (1)(A). trator may require, provide the Administrator payments received by the sponsor for the quar- ‘‘(3) RESTRICTION ON USE OF INFORMATION.— an attestation, in accordance with the proce- ter by a fraction, the numerator of which is the The restriction specified in section 1860D– dures established under section 1860D–6(f), that total contributions made by an employer for 16(b)(7)(B) shall apply to information disclosed the actuarial value of prescription drug cov- that quarter, and the denominator of which is or obtained pursuant to the provisions of this erage under the plan is at least equal to the ac- the total contributions required to be made to section. tuarial value of standard prescription drug cov- the plan by all employers for that quarter. Any ‘‘(c) REINSURANCE PAYMENT AMOUNT.— erage. share allocated to an employer required to con- ‘‘(1) IN GENERAL.—The reinsurance payment ‘‘(ii) AUDITS.—The sponsor of the plan, or an tribute for a quarter who does not make the con- amount under this subsection for a qualifying administrator of the plan designated by the tributions required for that quarter on or before covered individual for a coverage year is an sponsor, shall maintain (and afford the Admin- the date due shall be retained by the sponsor for amount equal to 80 percent (or 65 percent with istrator access to) such records as the Adminis- the benefit of the plan as a whole. respect to a qualifying covered individual de- trator may require for purposes of audits and ‘‘(3) TIMING.—Reinsurance payments required scribed in subsection (e)(2)(D)) of the allowable other oversight activities necessary to ensure the to be distributed to employers pursuant to this costs (as specified in paragraph (2)) incurred by adequacy of prescription drug coverage and the subsection shall be distributed as soon as prac- the qualifying entity with respect to the indi- accuracy of payments made under this part to ticable after received by the sponsor, but in no vidual and year. and by the plan. event later than the end of the quarter imme- ‘‘(2) ESTABLISHMENT OF ALLOWABLE COSTS.— ‘‘(B) EMPLOYMENT-BASED RETIREE HEALTH diately following the quarter in which such re- In the case of a qualifying entity that has in- COVERAGE.—The term ‘employment-based retiree insurance payments are received by the sponsor. curred costs described in subsection (b)(1)(A) health coverage’ means health insurance or ‘‘(4) REGULATIONS.—The Secretary shall pro- with respect to a qualifying covered individual other coverage, whether provided by voluntary mulgate regulations providing that any sponsor

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subject to the requirements of this subsection ‘‘(3) APPLICABLE LOW-INCOME INDIVIDUAL.— (5) of section 1860D–20(e)) of employment-based who fails to meet such requirements shall not be For purposes of this subsection, the term ‘appli- retiree health coverage (as defined in paragraph eligible for a payment under this section. cable low-income individual’ means an indi- (4)(B) of such section), notwithstanding any ‘‘DIRECT SUBSIDY FOR SPONSOR OF A QUALIFIED vidual who is both— other provision of this part and in accordance RETIREE PRESCRIPTION DRUG PLAN FOR PLAN ‘‘(A) a qualifying covered individual (de- with regulations of the Administrator, the entity ENROLLEES ELIGIBLE FOR, BUT NOT ENROLLED scribed in subparagraph (D) of section 1860D– offering the plan may restrict the enrollment of IN, THIS PART (e)(2)); and eligible beneficiaries enrolled under this part to ‘‘SEC. 1860D–21. (a) DIRECT SUBSIDY.— ‘‘(B) a qualified medicare beneficiary, a speci- eligible beneficiaries who are enrolled in such ‘‘(1) IN GENERAL.—The Administrator shall fied low income medicare beneficiary, or a sub- coverage. provide for the payment to a sponsor of a quali- sidy-eligible individual, as such terms are de- ‘‘(2) LIMITATION.—The sponsor of the employ- fied retiree prescription drug plan (as defined in fined in section 1860D–19(a)(4). ment-based retiree health coverage described in section 1860D–20(e)(4)) for each qualifying cov- ‘‘(c) PAYMENT METHODS.— paragraph (1) may not offer enrollment in the ered individual (described in subparagraph (C) ‘‘(1) IN GENERAL.—Payments under this sec- Medicare Prescription Drug plan described in of section 1860D–20(e)(2)) enrolled in the plan tion shall be based on such a method as the Ad- such paragraph based on the health status of el- for each month for which such individual is so ministrator determines. The Administrator may igible beneficiaries enrolled for such coverage. enrolled. establish a payment method by which interim ‘‘(b) COORDINATION WITH STATE PHARMA- ‘‘(2) AMOUNT OF PAYMENT.— payments of amounts under this section are CEUTICAL ASSISTANCE PROGRAMS.— ‘‘(A) IN GENERAL.—The amount of the pay- made during a year based on the Administra- ‘‘(1) IN GENERAL.—An eligible entity offering a ment under paragraph (1) shall be an amount tor’s best estimate of amounts that will be pay- Medicare Prescription Drug plan, or a equal to the direct subsidy percent determined able after obtaining all of the information. MedicareAdvantage organization offering a for the year of the monthly national average ‘‘(2) SOURCE OF PAYMENTS.—Payments under MedicareAdvantage plan (other than an MSA premium for the area for the year (determined this section shall be made from the Prescription plan or a private fee-for-service plan that does under section 1860D–15), as adjusted using the Drug Account. not provide qualified prescription drug cov- risk adjusters that apply to the standard pre- ‘‘(d) CONSTRUCTION.—Nothing in this section erage), may enter into an agreement with a scription drug coverage published under section or section 1860D–20 shall effect the provisions of State pharmaceutical assistance program de- 1860D–11. section 1860D–26(b). scribed in paragraph (2) to coordinate the cov- ‘‘(B) DIRECT SUBSIDY PERCENT.—For purposes ‘‘Subpart 3—Miscellaneous Provisions erage provided under the plan with the assist- of subparagraph (A), the term ‘direct subsidy ance provided under the State pharmaceutical ‘‘PRESCRIPTION DRUG ACCOUNT IN THE FEDERAL percent’ means the percentage equal to— assistance program. SUPPLEMENTARY MEDICAL INSURANCE TRUST ‘‘(i) 100 percent; minus ‘‘(2) STATE PHARMACEUTICAL ASSISTANCE PRO- FUND ‘‘(ii) the applicable percent for the year (as GRAM DESCRIBED.—For purposes of paragraph determined under section 1860D–17(c). ‘‘SEC. 1860D–25. (a) ESTABLISHMENT.— (1), a State pharmaceutical assistance program ‘‘(b) PAYMENT METHODS.— ‘‘(1) IN GENERAL.—There is created within the described in this paragraph is a program that ‘‘(1) IN GENERAL.—Payments under this sec- Federal Supplementary Medical Insurance has been established pursuant to a waiver under tion shall be based on such a method as the Ad- Trust Fund established by section 1841 an ac- section 1115 or otherwise. ministrator determines. The Administrator may count to be known as the ‘Prescription Drug Ac- ‘‘(c) REGULATIONS TO CARRY OUT THIS establish a payment method by which interim count’ (in this section referred to as the ‘Ac- PART.— payments of amounts under this section are count’). ‘‘(1) AUTHORITY FOR INTERIM FINAL REGULA- made during a year based on the Administra- ‘‘(2) FUNDS.—The Account shall consist of TIONS.—The Secretary may promulgate initial tor’s best estimate of amounts that will be pay- such gifts and bequests as may be made as pro- regulations implementing this part in interim able after obtaining all of the information. vided in section 201(i)(1), and such amounts as final form without prior opportunity for public ‘‘(2) SOURCE OF PAYMENTS.—Payments under may be deposited in, or appropriated to, the Ac- comment. this section shall be made from the Prescription count as provided in this part. ‘‘(2) FINAL REGULATIONS.—A final regulation Drug Account. ‘‘(3) SEPARATE FROM REST OF TRUST FUND.— reflecting public comments must be published ‘‘DIRECT SUBSIDIES FOR QUALIFIED STATE OFFER- Funds provided under this part to the Account within 1 year of the interim final regulation ING A STATE PHARMACEUTICAL ASSISTANCE PRO- shall be kept separate from all other funds with- promulgated under paragraph (1).’’. GRAM FOR PROGRAM ENROLLEES ELIGIBLE FOR, in the Federal Supplementary Medical Insur- ‘‘(d) WAIVER AUTHORITY.—The Secretary BUT NOT ENROLLED IN, THIS PART ance Trust Fund. shall have authority similar to the waiver au- ‘‘(b) PAYMENTS FROM ACCOUNT.— ‘‘SEC. 1860D–22. (a) DIRECT SUBSIDY.— thority under section 1857(i) to facilitate the of- ‘‘(1) IN GENERAL.—The Administrator shall ‘‘(1) IN GENERAL.—The Managing Trustee fering of Medicare Prescription Drug plans by provide for the payment to a State offering a shall pay from time to time from the Account employer or other group health plans as part of qualified State pharmaceutical assistance pro- such amounts as the Secretary certifies are nec- employment-based retiree health coverage (as gram (as defined in section 1860D–20(e)(6)) for essary to make payments to operate the program defined in section 1860D–20(d)(4)(B)), including each qualifying covered individual (described in under this part, including— the authority to establish separate premium subparagraph (D) of section 1860D–(e)(2)) en- ‘‘(A) payments to eligible entities under sec- amounts for enrollees in a Medicare Prescription rolled in the program for each month for which tion 1860D–16; Drug plan by reason of such coverage.’’. such individual is so enrolled. ‘‘(B) payments under 1860D–19 for low-income (b) CONFORMING AMENDMENTS TO FEDERAL ‘‘(2) AMOUNT OF PAYMENT.— subsidy payments for cost-sharing; SUPPLEMENTARY MEDICAL INSURANCE TRUST ‘‘(A) IN GENERAL.—The amount of the pay- ‘‘(C) reinsurance payments under section FUND.—Section 1841 (42 U.S.C. 1395t) is amendment under paragraph (1) shall be an amount 1860D–20; ed— equal to the amount of payment for the area ‘‘(D) payments to sponsors of qualified retiree (1) in the last sentence of subsection (a)— and year made under section 1860D–21(a)(2). prescription drug plans under section 1860D–21; (A) by striking ‘‘and’’ before ‘‘such amounts’’; ‘‘(b) ADDITIONAL SUBSIDY.— ‘‘(E) payments to MedicareAdvantage organi- and ‘‘(1) IN GENERAL.—The Administrator shall zations for the provision of qualified prescrip- (B) by inserting before the period the fol- provide for the payment to a State offering a tion drug coverage under section 1858A(c); and lowing: ‘‘, and such amounts as may be depos- qualified State pharmaceutical program (as de- ‘‘(F) payments with respect to administrative ited in, or appropriated to, the Prescription fined in section 1860D–20(e)(6)) for each applica- expenses under this part in accordance with sec- Drug Account established by section 1860D–25’’; ble low-income individual enrolled in the pro- tion 201(g). (2) in subsection (g), by inserting after ‘‘by gram for each month for which such individual ‘‘(2) TREATMENT IN RELATION TO PART B PRE- this part,’’ the following: ‘‘the payments pro- is so enrolled. MIUM.—Amounts payable from the Account vided for under part D (in which case the pay- ‘‘(2) AMOUNT OF PAYMENT.— shall not be taken into account in computing ments shall be made from the Prescription Drug ‘‘(A) IN GENERAL.—The amount of the pay- actuarial rates or premium amounts under sec- Account in the Trust Fund),’’; ment under paragraph (1) shall be the amount tion 1839. (3) in subsection (h), by inserting after the Administrator estimates would have been ‘‘(c) APPROPRIATIONS TO COVER BENEFITS AND ‘‘1840(d)’’ the following: ‘‘and sections 1860D–18 made to an entity or organization under section ADMINISTRATIVE COSTS.—There are appro- and 1858A(e) (in which case the payments shall 1860D–19 with respect to the applicable low-in- priated to the Account in a fiscal year, out of be made from the Prescription Drug Account in come individual if such individual was enrolled any moneys in the Treasury not otherwise ap- the Trust Fund)’’; and in this part and under a Medicare Prescription propriated, an amount equal to the payments (4) in subsection (i), by inserting after ‘‘sec- Drug plan or a MedicareAdvantage plan. and transfers made from the Account in the tion 1840(b)(1)’’ the following: ‘‘, sections 1860D– ‘‘(B) MAXIMUM PAYMENTS.—In no case may year. 18 and 1858A(e) (in which case the payments the amount of the payment determined under ‘‘OTHER RELATED PROVISIONS shall be made from the Prescription Drug Ac- subparagraph (A) with respect to an applicable ‘‘SEC. 1860D–26. (a) RESTRICTION ON ENROLL- count in the Trust Fund),’’. low-income individual exceed, as estimated by MENT IN A MEDICARE PRESCRIPTION DRUG PLAN (c) CONFORMING REFERENCES TO PREVIOUS the Administrator, the average amounts made in OFFERED BY A SPONSOR OF EMPLOYMENT-BASED PART D.—Any reference in law (in effect before a year under section 1860D–19 on behalf of an RETIREE HEALTH COVERAGE.— the date of enactment of this Act) to part D of eligible beneficiary enrolled under this part with ‘‘(1) IN GENERAL.—In the case of a Medicare title XVIII of the Social Security Act is deemed income that is the same as the income of the ap- Prescription Drug plan offered by an eligible en- a reference to part F of such title (as in effect plicable low-income individual. tity that is a sponsor (as defined in paragraph after such date).

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(d) SUBMISSION OF LEGISLATIVE PROPOSAL.— supplemental policy which has a benefit pack- ficiaries (as defined in section 1807A(i)(2)) under Not later than 6 months after the date of the en- age classified as ‘H’, ‘I’, or ‘J’ (including the that section; actment of this Act, the Secretary shall submit benefit package classified as ‘J’ with a high de- ‘‘(C) makes determinations of eligibility and to the appropriate committees of Congress a leg- ductible feature, as described in section income for purposes of identifying eligible low- islative proposal providing for such technical 1882(p)(11)) under the standards referred to in income beneficiaries (as so defined) under that and conforming amendments in the law as are subparagraph (A)(i) or terminates enrollment in section; and required by the provisions of this Act. a policy to which such standards do not apply ‘‘(D) communicates to the Secretary deter- SEC. 102. STUDY AND REPORT ON PERMITTING but which provides benefits for prescription minations of eligibility or discontinuation of eli- PART B ONLY INDIVIDUALS TO EN- drugs. gibility under that section for purposes of noti- ROLL IN MEDICARE VOLUNTARY ‘‘(C) ENFORCEMENT.—The provisions of sub- fying prescription drug card sponsors under PRESCRIPTION DRUG DELIVERY paragraph (A) shall be enforced as though they that section of the identity of eligible medicare PROGRAM. were included in subsection (s). low-income beneficiaries. (a) STUDY.—The Administrator of the Center ‘‘(3) NOTICE REQUIRED TO BE PROVIDED TO ‘‘(2) DETERMINATION OF ELIGIBILITY FOR PRE- for Medicare Choices (as established under sec- CURRENT POLICYHOLDERS WITH PRESCRIPTION MIUM AND COST-SHARING SUBSIDIES UNDER PART tion 1808 of the Social Security Act, as added by DRUG COVERAGE.—No medicare supplemental D OF TITLE XVIII FOR LOW-INCOME INDIVID- section 301(a)) shall conduct a study on the policy of an issuer shall be deemed to meet the UALS.—Beginning November 1, 2005, for pur- need for rules relating to permitting individuals standards in subsection (c) unless the issuer poses of section 1860D–19— ‘‘(A) make determinations of eligibility for who are enrolled under part B of title XVIII of provides written notice during the 60-day period premium and cost-sharing subsidies under and the Social Security Act but are not entitled to immediately preceding the period established for in accordance with such section; benefits under part A of such title to buy into the open enrollment period established under ‘‘(B) establish procedures for providing pre- the medicare voluntary prescription drug deliv- section 1860D–2(b)(2), to each individual who is sumptive eligibility for individuals eligible for ery program under part D of such title (as so a policyholder or certificate holder of a medicare subsidies under that section; added). supplemental policy issued by that issuer that (b) REPORT.—Not later than January 1, 2005, ‘‘(C) inform the Administrator of the Center provides some coverage of expenses for prescrip- for Medicare Choices of such determinations in the Administrator of the Center for Medicare tion drugs (at the most recent available address Choices shall submit a report to Congress on the cases in which such eligibility is established; of that individual) of— and study conducted under subsection (a), together ‘‘(A) the ability to enroll in a new medicare with any recommendations for legislation that ‘‘(D) otherwise provide such Administrator supplemental policy pursuant to paragraph (2); with such information as may be required to the Administrator determines to be appropriate and as a result of such study. carry out part D of title XVIII (including sec- ‘‘(B) the fact that, so long as such individual tion 1860D–19). SEC. 103. RULES RELATING TO MEDIGAP POLI- retains coverage under such policy, the indi- ‘‘(3) AGREEMENT TO ESTABLISH INFORMATION CIES THAT PROVIDE PRESCRIPTION vidual shall be ineligible for coverage of pre- DRUG COVERAGE. AND ENROLLMENT SITES AT SOCIAL SECURITY scription drugs under part D.’’. (a) RULES RELATING TO MEDIGAP POLICIES FIELD OFFICES.—Enter into an agreement with (b) RULE OF CONSTRUCTION (1) IN GENERAL.— THAT PROVIDE PRESCRIPTION DRUG COV- the Commissioner of Social Security to use all Nothing in this Act shall be construed to require ERAGE.—Section 1882 (42 U.S.C. 1395ss) is Social Security field offices located in the State an issuer of a medicare supplemental policy amended by adding at the end the following as information and enrollment sites for making under section 1882 of the Social Security Act (42 new subsection: the eligibility determinations required under U.S.C. 1395rr) to participate as an eligible entity ‘‘(v) RULES RELATING TO MEDIGAP POLICIES paragraphs (1) and (2). under part D of such Act, as added by section ‘‘(4) SCREEN AND ENROLL INDIVIDUALS ELIGI- THAT PROVIDE PRESCRIPTION DRUG COV- 101, as a condition for issuing such policy. BLE FOR MEDICARE COST-SHARING.—As part of ERAGE.— (2) PROHIBITION ON STATE REQUIREMENT.—A ‘‘(1) PROHIBITION ON SALE, ISSUANCE, AND RE- making an eligibility determination required State may not require an issuer of a medicare NEWAL OF POLICIES THAT PROVIDE PRESCRIPTION under paragraph (1) or (2), screen an individual supplemental policy under section 1882 of the DRUG COVERAGE TO PART D ENROLLEES.— who applies for such a determination for eligi- ‘‘(A) IN GENERAL.—Notwithstanding any other Social Security Act (42 U.S.C. 1395rr) to partici- bility for medical assistance for any medicare provision of law, on or after January 1, 2006, no pate as an eligible entity under part D of such cost-sharing described in section 1905(p)(3) and, medicare supplemental policy that provides cov- Act, as added by section 101, as a condition for if the individual is eligible for any such medi- erage of expenses for prescription drugs may be issuing such policy. care cost-sharing, enroll the individual under sold, issued, or renewed under this section to an SEC. 104. MEDICAID AND OTHER AMENDMENTS the State plan (or under a waiver of such plan). individual who is enrolled under part D. RELATED TO LOW-INCOME BENE- ‘‘(b) FEDERAL SUBSIDY OF ADMINISTRATIVE FICIARIES. COSTS.— ‘‘(B) PENALTIES.—The penalties described in ‘‘(1) ENHANCED MATCH FOR ELIGIBILITY DETER- subsection (d)(3)(A)(ii) shall apply with respect (a) DETERMINATIONS OF ELIGIBILITY FOR LOW- MINATIONS.—Subject to paragraphs (2) and (4), to a violation of subparagraph (A). INCOME SUBSIDIES.—Section 1902(a) (42 U.S.C. with respect to calendar quarters beginning on ‘‘(2) ISSUANCE OF SUBSTITUTE POLICIES IF THE 1396a(a)) is amended— or after January 1, 2004, the amounts expended POLICYHOLDER OBTAINS PRESCRIPTION DRUG COV- (1) by striking ‘‘and’’ at the end of paragraph by a State in carrying out subsection (a) are ex- ERAGE UNDER PART D.— (64); penditures reimbursable under section 1903(a)(7) ‘‘(A) IN GENERAL.—The issuer of a medicare (2) by striking the period at the end of para- supplemental policy— graph (65) and inserting ‘‘; and’’; and except that, in applying such section with re- ‘‘(i) may not deny or condition the issuance or (3) by inserting after paragraph (65) the fol- spect to such expenditures incurred for— ‘‘(A) such calendar quarters occurring in fis- effectiveness of a medicare supplemental policy lowing new paragraph: cal year 2004 or 2005, ‘75 percent’ shall be sub- that has a benefit package classified as ‘A’, ‘B’, ‘‘(66) provide for making eligibility determina- stituted for ‘50 per centum’; ‘C’, ‘D’, ‘E’, ‘F’ (including the benefit package tions under section 1935(a).’’. (b) NEW SECTION.— ‘‘(B) calendar quarters occurring in fiscal classified as ‘F’ with a high deductible feature, year 2006, ‘70 percent’ shall be substituted for as described in subsection (p)(11)), or ‘G’ (under (1) IN GENERAL.—Title XIX (42 U.S.C. 1396 et seq.) is amended— ‘50 per centum’; the standards established under subsection ‘‘(C) calendar quarters occurring in fiscal (A) by redesignating section 1935 as section (p)(2)) and that is offered and is available for year 2007, ‘65 percent’ shall be substituted for 1936; and issuance to new enrollees by such issuer; ‘50 per centum’; and (B) by inserting after section 1934 the fol- ‘‘(ii) may not discriminate in the pricing of ‘‘(D) calendar quarters occurring in fiscal lowing new section: such policy, because of health status, claims ex- year 2008 or any fiscal year thereafter, ‘60 per- perience, receipt of health care, or medical con- ‘‘SPECIAL PROVISIONS RELATING TO MEDICARE cent’ shall be substituted for ‘50 per centum’. dition; and PRESCRIPTION DRUG BENEFIT ‘‘(2) 100 PERCENT MATCH FOR ELIGIBILITY DE- ‘‘(iii) may not impose an exclusion of benefits ‘‘SEC. 1935. (a) REQUIREMENT FOR MAKING TERMINATIONS FOR SUBSIDY-ELIGIBLE INDIVID- based on a pre-existing condition under such ELIGIBILITY DETERMINATIONS FOR LOW-INCOME UALS.—In the case of amounts expended by a policy, SUBSIDIES.—As a condition of its State plan State on or after November 1, 2005, to determine in the case of an individual described in sub- under this title under section 1902(a)(66) and re- whether an individual is a subsidy-eligible indi- paragraph (B) who seeks to enroll under the ceipt of any Federal financial assistance under vidual for purposes of section 1860D–19, such ex- policy during the open enrollment period estab- section 1903(a), a State shall satisfy the fol- penditures shall be reimbursed under section lished under section 1860D–2(b)(2) and who sub- lowing: 1903(a)(7) by substituting ‘100 percent’ for ‘50 mits evidence that they meet the requirements ‘‘(1) DETERMINATION OF ELIGIBILITY FOR per centum’. under subparagraph (B) along with the applica- TRANSITIONAL PRESCRIPTION DRUG ASSISTANCE ‘‘(3) ENHANCED MATCH FOR UPDATES OR IM- tion for such medicare supplemental policy. CARD PROGRAM FOR ELIGIBLE LOW-INCOME BENE- PROVEMENTS TO ELIGIBILITY DETERMINATION ‘‘(B) INDIVIDUAL DESCRIBED.—An individual FICIARIES.—For purposes of section 1807A, sub- SYSTEMS.—With respect to calendar quarters oc- described in this subparagraph is an individual mit to the Secretary an eligibility plan under curring in fiscal year 2004, 2005, or 2006, the Sec- who— which the State— retary, in addition to amounts otherwise paid ‘‘(i) enrolls in the medicare prescription drug ‘‘(A) establishes eligibility standards con- under section 1903(a), shall pay to each State delivery program under part D; and sistent with the provisions of that section; which has a plan approved under this title, for ‘‘(ii) at the time of such enrollment was en- ‘‘(B) establishes procedures for providing pre- each such quarter an amount equal to 90 per- rolled and terminates enrollment in a medicare sumptive eligibility for eligible low-income bene- cent of so much of the sums expended during

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such quarter as are attributable to the design, 1902(a)(10)(A)(ii))(X), the Federal medical as- THE FEDERAL SUPPLEMENTARY MEDICAL INSUR- development, acquisition, or installation of im- sistance percentage shall be 100 percent for ANCE TRUST FUND.—Section 1841(f) (42 U.S.C. proved eligibility determination systems (includ- medicare cost-sharing described in subpara- 1395t(f)) is amended— ing hardware and software for such systems) in graphs (B) and (C) of section 1905(p)(3) (relating (i) by inserting ‘‘(1)’’ after ‘‘(f)’’; and order to carry out the requirements of subsection to coinsurance and deductibles established (ii) by adding at the end the following new (a) and section 1807A(h)(1). No payment shall be under title XVIII) for the individuals provided paragraph: made to a State under the preceding sentence medical assistance under section ‘‘(2) There shall be transferred periodically unless the State’s improved eligibility determina- 1902(a)(10)(A)(ii)(X), but only— (but not less often than once each fiscal year) to tion system— ‘‘(A) with respect to such medicare cost-shar- the Trust Fund from the Treasury amounts ‘‘(A) satisfies such standards for improvement ing that is incurred under part A of title XVIII; which the Secretary of Health and Human Serv- as the Secretary may establish; and and ices shall have certified are equivalent to the ‘‘(B) complies, and is compatible, with the ‘‘(B) for so long as the State elects to provide amounts determined under section 1935(c)(1) standards established under part C of title XI medical assistance under section with respect to all States for a fiscal year.’’. and any regulations promulgated under section 1902(a)(10)(A)(ii)(X). (B) TRANSFER OF ASSUMPTION OF PART A COST- 264(c) of the Health Insurance Portability and ‘‘(2) LIMITATION.—Paragraph (1) shall not SHARING FOR CERTAIN STATES.—Section 1817(g) Accountability Act of 1996 (42 U.S.C. 1320d–2 apply to any State before January 1, 2006. (42 U.S.C. 1395i(g)) is amended— note). ‘‘(e) TREATMENT OF TERRITORIES.— (i) by inserting ‘‘(1)’’ after ‘‘(g)’’; and ‘‘(4) COORDINATION.—The State shall provide ‘‘(1) IN GENERAL.—In the case of a State, other (ii) by adding at the end the following new the Secretary with such information as may be than the 50 States and the District of Colum- paragraph: necessary to properly allocate expenditures de- bia— ‘‘(2) There shall be transferred periodically scribed in paragraph (1), (2), or (3) that may ‘‘(A) the previous provisions of this section (but not less often than once each fiscal year) to otherwise be made for similar eligibility deter- shall not apply to residents of such State; and the Trust Fund from the Treasury amounts minations or expenditures. ‘‘(B) if the State establishes a plan described which the Secretary of Health and Human Serv- ‘‘(c) FEDERAL PAYMENT OF MEDICARE PART B in paragraph (2), the amount otherwise deter- ices shall have certified are equivalent to the PREMIUM FOR STATES PROVIDING PRESCRIPTION mined under section 1108(f) (as increased under amounts determined under section 1935(d)(1) DRUG COVERAGE FOR DUAL ELIGIBLE INDIVID- section 1108(g)) for the State shall be further in- with respect to certain States for a fiscal year.’’. UALS.— creased by the amount specified in paragraph (4) AMENDMENT TO BEST PRICE.—Section ‘‘(1) IN GENERAL.—Subject to paragraph (4) (3). 1927(c)(1)(C)(i) (42 U.S.C. 1396r–8(c)(1)(C)(i)), as and notwithstanding section 1905(b), in the case ‘‘(2) PLAN.—The plan described in this para- amended by section 111(b), is amended— of a State that provides medical assistance for graph is a plan that— (A) by striking ‘‘and’’ at the end of subclause covered drugs (as such term is defined in section ‘‘(A) provides medical assistance with respect (IV); 1860D(a)(2)) to dual eligible individuals under to the provision of covered drugs (as defined in (B) by striking the period at the end of sub- this title that satisfies the minimum standards section 1860D(a)(2)) to individuals described in clause (V) and inserting ‘‘; and’’; and described in paragraph (2), the Federal medical subparagraph (A), (B), (C), or (D) of section (C) by adding at the end the following new assistance percentage shall be 100 percent for 1860D–19(a)(3); and subclause: medicare cost-sharing described in section ‘‘(B) ensures that additional amounts received ‘‘(VI) any prices charged which are nego- 1905(p)(3)(A)(ii) (relating to premiums under sec- by the State that are attributable to the oper- tiated under a Medicare Prescription Drug plan tion 1839) for individuals— ation of this subsection are used only for such under part D of title XVIII with respect to cov- ‘‘(A) who are dual eligible individuals or assistance. ered drugs, under a MedicareAdvantage plan qualified medicare beneficiaries; and ‘‘(3) INCREASED AMOUNT.— under part C of such title with respect to such ‘‘(B) whose income is at least the income re- ‘‘(A) IN GENERAL.—The amount specified in drugs, or under a qualified retiree prescription quired for an individual to be an eligible indi- this paragraph for a State for a fiscal year is drug plan (as defined in section 1860D–20(f)(1)) vidual under section 1611 for purposes of the equal to the product of— with respect to such drugs, on behalf of eligible supplemental security income program (as deter- ‘‘(i) the aggregate amount specified in sub- beneficiaries (as defined in section mined under section 1612), but does not exceed paragraph (B); and 1860D(a)(3).’’. 100 percent of the poverty line (as defined in ‘‘(ii) the amount specified in section 1108(g)(1) (c) EXTENSION OF MEDICARE COST-SHARING section 2110(c)(5)) applicable to a family of the for that State, divided by the sum of the FOR PART B PREMIUM FOR QUALIFYING INDIVID- size involved. amounts specified in such section for all such UALS THROUGH 2008.— ‘‘(2) MINIMUM STANDARDS DESCRIBED.—For States. (1) IN GENERAL.—Section 1902(a)(10)(E)(iv) (42 purposes of paragraph (1), the minimum stand- ‘‘(B) AGGREGATE AMOUNT.—The aggregate U.S.C. 1396a(a)(10)(E)(iv)) is amended to read as ards described in this paragraph are the fol- amount specified in this subparagraph for— follows: lowing: ‘‘(i) the last 3 quarters of fiscal year 2006, is ‘‘(iv) subject to sections 1933 and 1905(p)(4), ‘‘(A) In providing medical assistance for dual equal to $37,500,000; for making medical assistance available (but eligible individuals for such covered drugs, the ‘‘(ii) fiscal year 2007, is equal to $50,000,000; only for premiums payable with respect to State satisfies the requirements of this title (in- and months during the period beginning with Janu- cluding limitations on cost-sharing imposed ‘‘(iii) any subsequent fiscal year, is equal to ary 1998, and ending with December 2008) for under section 1916) applicable to the provision the aggregate amount specified in this subpara- medicare cost-sharing described in section of medical assistance for prescribed drugs to graph for the previous fiscal year increased by 1905(p)(3)(A)(ii) for individuals who would be dual eligible individuals. the annual percentage increase specified in sec- qualified medicare beneficiaries described in sec- ‘‘(B) In providing medical assistance for dual tion 1860D–6(c)(5) for the calendar year begin- tion 1905(p)(1) but for the fact that their income eligible individuals for such covered drugs, the ning in such fiscal year. exceeds the income level established by the State State provides such individuals with beneficiary ‘‘(4) NONAPPLICATION.—Section 1927(d)(2)(E) under section 1905(p)(2) and is at least 120 per- protections that the Secretary determines are shall not apply to a State described in para- cent, but less than 135 percent, of the official equivalent to the beneficiary protections appli- graph (1) for purposes of providing medical as- poverty line (referred to in such section) for a cable under section 1860D–5 to eligible entities sistance described in paragraph (2)(A). family of the size involved and who are not oth- offering a Medicare Prescription Drug plan ‘‘(5) REPORT.—The Secretary shall submit to erwise eligible for medical assistance under the under part D of title XVIII. Congress a report on the application of this sub- State plan;’’. ‘‘(C) In providing medical assistance for dual section and may include in the report such rec- (2) TOTAL AMOUNT AVAILABLE FOR ALLOCA- eligible individuals for such covered drugs, the ommendations as the Secretary deems appro- TION.—Section 1933(c) (42 U.S.C. 1396u–3(c)) is State does not impose a limitation on the num- priate. amended— ber of prescriptions an individual may have ‘‘(f) DEFINITIONS.—For purposes of this sec- (A) in paragraph (1)— filled. tion, the terms ‘qualified medicare beneficiary’, (i) in subparagraph (D), by striking ‘‘and’’ at ‘‘(3) NONAPPLICATION.—Section 1927(d)(2)(E) ‘subsidy-eligible individual’, and ‘dual eligible the end; shall not apply to a State for purposes of pro- individual’ have the meanings given such terms (ii) in subparagraph (E)— viding medical assistance for covered drugs (as in subparagraphs (A), (D), and (E), respectively, (I) by striking ‘‘fiscal year 2002’’ and inserting such term is defined in section 1860D(a)(2)) to of section 1860D–19(a)(4).’’. ‘‘each of fiscal years 2002 through 2008’’; and dual eligible individuals that satisfies the min- (2) CONFORMING AMENDMENTS.— (II) by striking the period and inserting ‘‘; imum standards described in paragraph (2). (A) Section 1905(b) (42 U.S.C. 1396d(b)) is and’’; and ‘‘(4) LIMITATION.—Paragraph (1) shall not amended by inserting ‘‘and subsections (c)(1) (iii) by adding at the end the following new apply to any State before January 1, 2006. and (d)(1) of section 1935’’ after ‘‘1933(d)’’. subparagraph: ‘‘(d) FEDERAL PAYMENT OF MEDICARE PART A (B) Section 1108(f) (42 U.S.C. 1308(f)) is ‘‘(F) the first quarter of fiscal year 2009, COST-SHARING FOR CERTAIN STATES.— amended by inserting ‘‘and section $100,000,000.’’; and ‘‘(1) IN GENERAL.—Subject to paragraph (2) 1935(e)(1)(B)’’ after ‘‘Subject to subsection (g)’’. (B) in paragraph (2)(A), by striking ‘‘the sum and notwithstanding section 1905(b), in the case (3) TRANSFER OF FEDERALLY ASSUMED POR- of’’ and all that follows through of a State that, as of the date of enactment of TIONS OF MEDICARE COST-SHARING.— ‘‘1902(a)(10)(E)(iv)(II) in the State; to’’ and in- the Prescription Drug and Medicare Improve- (A) TRANSFER OF ASSUMPTION OF PART B PRE- serting ‘‘twice the total number of individuals ment Act of 2003, provides medical assistance for MIUM FOR STATES PROVIDING PRESCRIPTION DRUG described in section 1902(a)(10)(E)(iv) in the individuals described in section COVERAGE FOR DUAL ELIGIBLE INDIVIDUALS TO State; to’’.

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(d) OUTREACH BY THE COMMISSIONER OF SO- (A) in paragraph (1), by striking ‘‘17’’ and in- (C) reduced cost-sharing described in subpara- CIAL SECURITY.—Section 1144 (42 U.S.C. 1320b– serting ‘‘19’’; and graphs (C), (D), and (E) of section 1860D– 14) is amended— (B) in paragraph (2)(B), by inserting ‘‘experts 19(a)(1) of such Act. (1) in the section heading, by inserting ‘‘AND in the area of pharmacology and prescription (2) SUBSIDY ELIGIBLE INDIVIDUALS WITH AN IN- SUBSIDIES FOR LOW-INCOME INDIVIDUALS UNDER drug benefit programs,’’ after ‘‘other health pro- COME BETWEEN 100 AND 135 PERCENT OF THE FED- TITLE XVIII’’ after ‘‘COST-SHARING’’; fessionals,’’. ERAL POVERTY LINE.—If the individual is a spec- (2) in subsection (a)— (2) INITIAL TERMS OF ADDITIONAL MEMBERS.— ified low income medicare beneficiary (as de- (A) in paragraph (1)— (A) IN GENERAL.—For purposes of staggering fined in paragraph 1860D–19(4)(B) of such Act) (i) in subparagraph (A), by inserting ‘‘for the the initial terms of members of the Medicare or a qualifying individual (as defined in para- transitional prescription drug assistance card Payment Advisory Commission under section graph 1860D–19(4)(C) of such Act) who is diag- program under section 1807A, or for premium 1805(c)(3) of the Social Security Act (42 U.S.C. nosed with cancer, such individual shall receive and cost-sharing subsidies under section 1860D– 1395b–6(c)(3)), the initial terms of the 2 addi- the full premium subsidy and reduction of cost- 19’’ before the semicolon; and tional members of the Commission provided for sharing described in section 1860D–19(a)(2) of (ii) in subparagraph (B), by inserting ‘‘, pro- by the amendment under paragraph (1)(A) are such Act, including payment of— gram, and subsidies’’ after ‘‘medical assist- as follows: (A) no deductible; ance’’; and (i) One member shall be appointed for 1 year. (B) no monthly premium for any Medicare (B) in paragraph (2)— (ii) One member shall be appointed for 2 years. Prescription Drug plan described paragraph (1) (i) in the matter preceding subparagraph (A), (B) COMMENCEMENT OF TERMS.—Such terms or (2) of section 1860D–17(a) of such Act; and by inserting ‘‘, the transitional prescription shall begin on January 1, 2005. (C) reduced cost-sharing described in subpara- drug assistance card program under section (b) EXPANSION OF DUTIES.—Section 1805(b)(2) graphs (C), (D), and (E) of section 1860D– 1807A, or premium and cost-sharing subsidies (42 U.S.C. 1395b–6(b)(2)) is amended by adding 19(a)(2) of such Act. under section 1860D–19’’ after ‘‘assistance’’; and at the end the following new subparagraph: (3) SUBSIDY-ELIGIBLE INDIVIDUALS WITH IN- (ii) in subparagraph (A), by striking ‘‘such ‘‘(D) VOLUNTARY PRESCRIPTION DRUG DELIV- COME BETWEEN 135 PERCENT AND 160 PERCENT OF eligibility’’ and inserting ‘‘eligibility for medi- ERY PROGRAM.—Specifically, the Commission THE FEDERAL POVERTY LEVEL.—If the individual care cost-sharing under the medicaid program’’; shall review, with respect to the voluntary pre- is a subsidy-eligible individual (as defined in and scription drug delivery program under part D, section 1860D–19(a)(4)(D) of such Act) who is di- (3) in subsection (b)— competition among eligible entities offering agnosed with cancer, such individual shall re- (A) in paragraph (1)(A), by inserting ‘‘, for Medicare Prescription Drug plans and bene- ceive sliding scale premium subsidy and reduc- the transitional prescription drug assistance ficiary access to such plans and covered drugs, tion of cost-sharing for subsidy-eligible individ- card program under section 1807A, or for pre- particularly in rural areas. As part of such re- uals, including payment of— mium and cost-sharing subsidies for low-income view, the Commission shall hold 3 field hearings (A) for 2006, a deductible of only $50; individuals under section 1860D–19’’ after in 2007.’’. (B) only a percentage of the monthly premium ‘‘1933’’; (as described in section 1860D–19(a)(3)(A)(i)); (B) in paragraph (2), by inserting ‘‘, program, SEC. 106. STUDY REGARDING VARIATIONS IN SPENDING AND DRUG UTILIZATION. and and subsidies’’ after ‘‘medical assistance’’; and (a) STUDY.—The Secretary shall study on an (C) reduced cost-sharing described in clauses (C) by adding at the end the following: ongoing basis variations in spending and drug (iii), (iv), and (v) of section 1860D–19(a)(3)(A). ‘‘(3) AGREEMENTS TO ESTABLISH INFORMATION (4) ELIGIBLE BENEFICIARIES WITH INCOME AND ENROLLMENT SITES AT SOCIAL SECURITY utilization under part D of title XVIII of the So- cial Security Act for covered drugs to determine ABOVE 160 PERCENT OF THE FEDERAL POVERTY FIELD OFFICES.— LEVEL.—If an individual is an eligible bene- ‘‘(A) IN GENERAL.—The Commissioner shall the impact of such variations on premiums imposed by eligible entities offering Medicare Pre- ficiary (as defined in section 1860D(3) of such enter into an agreement with each State oper- Act), is not described in paragraphs (1) through ating a State plan under title XIX (including scription Drug plans under that part. In conducting such study, the Secretary shall examine (3), and is diagnosed with cancer, such indi- under a waiver of such plan) to establish infor- vidual shall have access to qualified prescrip- mation and enrollment sites within all the Social the impact of geographic adjustments of the monthly national average premium under section drug coverage (as described in section Security field offices located in the State for 1860D–6(a)(1) of such Act), including payment purposes of— tion 1860D–15 of such Act on— (1) maximization of competition under part D of— ‘‘(i) the State determining the eligibility of in- (A) for 2006, a deductible of $275; of title XVIII of such Act; and dividuals residing in the State for medical as- (B) the limits on cost-sharing described section (2) the ability of eligible entities offering sistance for payment of the cost of medicare 1860D–6(c)(2) of such Act up to, for 2006, an ini- Medicare Prescription Drug plans to contain cost-sharing under the medicaid program pursu- tial coverage limit of $4,500; and ant to sections 1902(a)(10)(E) and 1933, the tran- costs for covered drugs. (C) for 2006, an annual out-of-pocket limit of (b) REPORT.—Beginning with 2007, the Sec- sitional prescription drug assistance card pro- $3,700 with 10 percent cost-sharing after that retary shall submit annual reports to Congress gram under section 1807A, or premium and cost- limit is reached. on the study required under subsection (a). sharing subsidies under section 1860D–19; and SEC. 109. PROTECTING SENIORS WITH CARDIO- ‘‘(ii) enrolling individuals who are determined SEC. 107. LIMITATION ON PRESCRIPTION DRUG VASCULAR DISEASE, CANCER, OR eligible for such medical assistance, program, or BENEFITS OF MEMBERS OF CON- ALZHEIMER’S DISEASE. subsidies in the State plan (or waiver), the tran- GRESS. Any eligible beneficiary (as defined in section sitional prescription drug assistance card pro- (a) LIMITATION ON BENEFITS.—Notwith- 1860D(3) of the Social Security Act) who is diag- gram under section 1807A, or the appropriate standing any other provision of law, during cal- nosed with cardiovascular disease, cancer, dia- category for premium and cost-sharing subsidies endar year 2004, the actuarial value of the pre- betes or Alzheimer’s disease shall be protected under section 1860D–19. scription drug benefit of any Member of Con- from high prescription drug costs in the fol- ‘‘(B) AGREEMENT TERMS.—The Secretary and gress enrolled in a health benefits plan under lowing manner: the Commissioner jointly shall develop terms for chapter 89 of title 5, United States Code, may (1) SUBSIDY ELIGIBLE INDIVIDUALS WITH AN IN- the State agreements required under subpara- not exceed the actuarial value of any prescrip- COME BELOW 100 PERCENT OF THE FEDERAL POV- graph (A) that shall specify the responsibilities tion drug benefit under title XVIII of the Social ERTY LINE.—If the individual is a qualified of the State and the Commissioner in the estab- Security Act passed by the 1st session of the medicare beneficiary (as defined in section lishment and operation of such sites. 108th Congress and enacted in law. 1860D–19(a)(4) of such Act), such individual ‘‘(C) AUTHORIZATION OF APPROPRIATIONS.— (b) REGULATIONS.—The Office of Personnel shall receive the full premium subsidy and re- There are authorized to be appropriated to the Management shall promulgate regulations to duction of cost-sharing described in section Commissioner, such sums as may be necessary to carry out this section. 1860D–19(a)(1) of such Act, including the pay- carry out this paragraph.’’. SEC. 108. PROTECTING SENIORS WITH CANCER. ment of— (e) REPORT REGARDING VOLUNTARY ENROLL- Any eligible beneficiary (as defined in section (A) no deductible; MENT OF DUAL ELIGIBLE INDIVIDUALS IN PART 1860D(3) of the Social Security Act) who is diag- (B) no monthly beneficiary premium for at D.—Not later than January 1, 2005, the Sec- nosed with cancer shall be protected from high least one Medicare Prescription Drug plan retary shall submit a report to Congress that prescription drug costs in the following manner: available in the area in which the individual re- contains such recommendations for legislation (1) SUBSIDY ELIGIBLE INDIVIDUALS WITH AN IN- sides; and as the Secretary determines are necessary in COME BELOW 100 PERCENT OF THE FEDERAL POV- (C) reduced cost-sharing described in subpara- order to establish a voluntary option for dual el- ERTY LINE.—If the individual is a qualified graphs (C), (D), and (E) of section 1860D– igible individuals (as defined in 1860D– medicare beneficiary (as defined in section 19(a)(1) of such Act. 19(a)(4)(E) of the Social Security Act (as added 1860D–19(a)(4) of such Act), such individual (2) SUBSIDY ELIGIBLE INDIVIDUALS WITH AN IN- by section 101)) to enroll under part D of title shall receive the full premium subsidy and re- COME BETWEEN 100 AND 135 PERCENT OF THE FED- XVIII of such Act for prescription drug cov- duction of cost-sharing described in section ERAL POVERTY LINE.—If the individual is a spec- erage. 1860D–19(a)(1) of such Act, including the pay- ified low income medicare beneficiary (as de- SEC. 105. EXPANSION OF MEMBERSHIP AND DU- ment of— fined in paragraph 1860D–19(4)(B) of such Act) TIES OF MEDICARE PAYMENT ADVI- (A) no deductible; or a qualifying individual (as defined in para- SORY COMMISSION (MEDPAC). (B) no monthly beneficiary premium for at graph 1860D–19(4)(C) of such Act) who is diag- (a) EXPANSION OF MEMBERSHIP.— least one Medicare Prescription Drug plan nosed with cardiovascular disease, cancer, or (1) IN GENERAL.—Section 1805(c) (42 U.S.C. available in the area in which the individual re- Alzheimer’s disease, such individual shall re- 1395b–6(c)) is amended— sides; and ceive the full premium subsidy and reduction of

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cost-sharing described in section 1860D–19(a)(2) (1) IN GENERAL.—The Secretary shall establish (1) the geographic areas and sites designated of such Act, including payment of— an assessment program to contract with quali- under subsection (a)(2); (A) no deductible; fied pharmacists to provide medication therapy (2) the number of eligible beneficiaries partici- (B) no monthly premium for any Medicare management services to eligible beneficiaries pating in the program under subsection (b) and Prescription Drug plan described paragraph (1) who receive care under the original medicare the level and types medication therapy manage- or (2) of section 1860D–17(a) of such Act; and fee-for-service program under parts A and B of ment services used by such beneficiaries; (C) reduced cost-sharing described in subpara- title XVIII of the Social Security Act to eligible (3) the number of qualified pharmacists with graphs (C), (D), and (E) of section 1860D– beneficiaries. contracts under subsection (c), the location of 19(a)(2) of such Act. (2) SITES.—The Secretary shall designate 6 ge- such pharmacists, and the number of eligible (3) SUBSIDY-ELIGIBLE INDIVIDUALS WITH IN- ographic areas, each containing not less than 3 beneficiaries served by such pharmacists; and COME BETWEEN 135 PERCENT AND 160 PERCENT OF sites, at which to conduct the assessment pro- (4) the types of payment methodologies being THE FEDERAL POVERTY LEVEL.—If the individual gram under this section. At least 2 geographic tested under subsection (d)(2). is a subsidy-eligible individual (as defined in areas designated under this paragraph shall be (h) REPORT.— section 1860D–19(a)(4)(D) of such Act) who is di- located in rural areas. (1) IN GENERAL.—Not later than 6 months agnosed with cardiovascular disease, cancer, or (3) DURATION.—The Secretary shall conduct after the completion of the assessment program Alzheimer’s disease, such individual shall re- the assessment program under this section for a under this section, the Secretary shall submit to ceive sliding scale premium subsidy and reduc- 1-year period. Congress a final report summarizing the final tion of cost-sharing for subsidy-eligible individ- (4) IMPLEMENTATION.—The Secretary shall im- outcome of the program and evaluating the re- uals, including payment of— plement the program not later than January 1, sults of the program, together with recommenda- (A) for 2006, a deductible of only $50; 2005, but may not implement the assessment pro- tions for such legislation and administrative ac- (B) only a percentage of the monthly premium gram before October 1, 2004. tion as the Secretary determines to be appro- (as described in section 1860D–19(a)(3)(A)(i)); (b) PARTICIPANTS.—Any eligible beneficiary priate. and who resides in an area designated by the Sec- (2) ASSESSMENT OF PAYMENT METHODOLO- (C) reduced cost-sharing described in clauses retary as an assessment site under subsection GIES.—The final report submitted under para- (iii), (iv), and (v) of section 1860D–19(a)(3)(A). (a)(2) may participate in the assessment pro- graph (1) shall include an assessment of the fea- (4) ELIGIBLE BENEFICIARIES WITH INCOME gram under this section if such beneficiary iden- sibility and appropriateness of the various pay- ABOVE 160 PERCENT OF THE FEDERAL POVERTY tifies a qualified pharmacist who agrees to fur- ment methodologies tested under subsection LEVEL.—If an individual is an eligible bene- nish medication therapy management services to (d)(2). ficiary (as defined in section 1860D(3) of such the eligible beneficiary under the assessment (i) DEFINITIONS.—In this section: Act), is not described in paragraphs (1) through program. (1) MEDICATION THERAPY MANAGEMENT SERV- (3), and is diagnosed with cardiovascular dis- (c) CONTRACTS WITH QUALIFIED PHAR- ICES.—The term ‘‘medication therapy manage- ease, cancer, or Alzheimer’s disease, such indi- MACISTS.— ment services’’ means services or programs fur- vidual shall have access to qualified prescrip- (1) IN GENERAL.—The Secretary shall enter nished by a qualified pharmacist to an eligible tion drug coverage (as described in section into a contract with qualified pharmacists to beneficiary, individually or on behalf of a phar- 1860D–6(a)(1) of such Act), including payment provide medication therapy management serv- macy provider, which are designed— of— ices to eligible beneficiaries residing in the area (A) to ensure that medications are used appro- (A) for 2006, a deductible of $275; served by the qualified pharmacist. priately by such individual; (B) the limits on cost-sharing described section (2) NUMBER OF QUALIFIED PHARMACISTS.—The (B) to enhance the individual’s understanding 1860D–6(c)(2) of such Act up to, for 2006, an ini- Secretary may contract with more than 1 quali- of the appropriate use of medications; tial coverage limit of $4,500; and fied pharmacist at each site. (C) to increase the individual’s compliance (C) for 2006, an annual out-of-pocket limit of (d) PAYMENT TO QUALIFIED PHARMACISTS.— with prescription medication regimens; $3,700 with 10 percent cost-sharing after that (1) IN GENERAL.—Under an contract entered (D) to reduce the risk of potential adverse limit is reached. into under subsection (c), the Secretary shall events associated with medications; and SEC. 110. REVIEW AND REPORT ON CURRENT pay qualified pharmacists a fee for providing (E) to reduce the need for other costly medical STANDARDS OF PRACTICE FOR medication therapy management services. services through better management of medica- PHARMACY SERVICES PROVIDED TO (2) ASSESSMENT OF PAYMENT METHODOLO- tion therapy. PATIENTS IN NURSING FACILITIES. GIES.—The Secretary shall, in consultation with (2) ELIGIBLE BENEFICIARY.—The term ‘‘eligible (a) REVIEW.— national pharmacist and pharmacy associa- beneficiary’’ means an individual who is— (1) IN GENERAL.—The Secretary shall conduct tions, design the fee paid under paragraph (1) to (A) entitled to (or enrolled for) benefits under a thorough review of the current standards of test various payment methodologies applicable part A and enrolled for benefits under part B of practice for pharmacy services provided to pa- with respect to medication therapy management the Social Security Act (42 U.S.C. 1395c et seq.; tients in nursing facilities. services, including a payment methodology that 1395j et seq.); (2) SPECIFIC MATTERS REVIEWED.—In con- applies a relative value scale and fee-schedule (B) not enrolled with a Medicare+Choice plan ducting the review under paragraph (1), the with respect to such services that take into ac- or a MedicareAdvantage plan under part C; and Secretary shall— count the differences in— (C) receiving, in accordance with State law or (A) assess the current standards of practice, (A) the time required to perform the different regulation, medication for— clinical services, and other service requirements types of medication therapy management serv- (i) the treatment of asthma, diabetes, or generally used for pharmacy services in long- ices; chronic cardiovascular disease, including an in- term care settings; and (B) the level of risk associated with the use of dividual on anticoagulation or lipid reducing (B) evaluate the impact of those standards particular outpatient prescription drugs or medications; or with respect to patient safety, reduction of groups of drugs; and (ii) such other chronic diseases as the Sec- medication errors and quality of care. (C) the health status of individuals to whom retary may specify. (b) REPORT.— such services are provided. (3) QUALIFIED PHARMACIST.—The term ‘‘qualified pharmacist’’ means an individual who is a (1) IN GENERAL.—Not later than the date that (e) FUNDING.— is 18 months after the date of enactment of this (1) IN GENERAL.—Subject to paragraph (2), the licensed pharmacist in good standing with the Act, the Secretary shall submit a report to Con- Secretary shall provide for the transfer from the State Board of Pharmacy. gress on the study conducted under subsection Federal Supplementary Insurance Trust Fund Subtitle B—Medicare Prescription Drug Dis- (a)(1), together with any recommendations for established under section 1841 of the Social Se- count Card and Transitional Assistance for legislation that the Administrator determines to curity Act (42 U.S.C. 1395t) of such funds as are Low-Income Beneficiaries be appropriate as a result of such study. necessary for the costs of carrying out the as- SEC. 111. MEDICARE PRESCRIPTION DRUG DIS- (2) CONTENTS.—The report submitted under sessment program under this section. COUNT CARD AND TRANSITIONAL paragraph (1) shall contain— (2) BUDGET NEUTRALITY.—In conducting the ASSISTANCE FOR LOW-INCOME (A) a detailed description of the plans of the assessment program under this section, the Sec- BENEFICIARIES. Secretary to implement the provisions of this Act retary shall ensure that the aggregate payments (a) IN GENERAL.—Title XVIII is amended by in a manner consistent with applicable State made by the Secretary do not exceed the amount inserting after section 1806 the following new and Federal laws designed to protect the safety which the Secretary would have paid if the as- sections: and quality of care of nursing facility patients; sessment program under this section was not im- ‘‘MEDICARE PRESCRIPTION DRUG DISCOUNT CARD and plemented. ENDORSEMENT PROGRAM (B) recommendations regarding necessary ac- (f) WAIVER AUTHORITY.—The Secretary may ‘‘SEC. 1807. (a) ESTABLISHMENT.—There is es- tions and appropriate reimbursement to ensure waive such requirements of titles XI and XVIII tablished a medicare prescription drug discount the provision of prescription drugs to medicare of the Social Security Act (42 U.S.C. 1301 et seq.; card endorsement program under which the Sec- beneficiaries residing in nursing facilities in a 1395 et seq.) as may be necessary for the purpose retary shall— manner consistent with existing patient safety of carrying out the assessment program under ‘‘(1) endorse prescription drug discount card and quality of care standards under applicable this section. programs offered by prescription drug card State and Federal laws. (g) AVAILABILITY OF DATA.—During the pe- sponsors that meet the requirements of this sec- SEC. 110A. MEDICATION THERAPY MANAGEMENT riod in which the assessment program is con- tion; and ASSESSMENT PROGRAM. ducted, the Secretary annually shall make ‘‘(2) make available to eligible beneficiaries in- (a) ESTABLISHMENT.— available data regarding— formation regarding such endorsed programs.

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‘‘(b) ELIGIBILITY, ELECTION OF PROGRAM, AND services of the Indian Health Service and Indian that the beneficiary may use to obtain benefits ENROLLMENT FEES.— tribes and tribal organizations. under the program. ‘‘(1) ELIGIBILITY AND ELECTION OF PROGRAM.— ‘‘(3) QUALITY ASSURANCE.—Each prescription ‘‘(f) SUBMISSION OF APPLICATIONS FOR EN- ‘‘(A) IN GENERAL.—Subject to subparagraph drug card sponsor offering a prescription drug DORSEMENT AND APPROVAL.— (B), the Secretary shall establish procedures— discount card program endorsed under this sec- ‘‘(1) SUBMISSION OF APPLICATIONS FOR EN- ‘‘(i) for identifying eligible beneficiaries; and tion shall have in place adequate procedures for DORSEMENT.—Each prescription drug card spon- ‘‘(ii) under which such beneficiaries may assuring that quality service is provided to eligi- sor that seeks endorsement of a prescription make an election to enroll in any prescription ble beneficiaries enrolled in a prescription drug drug discount card program under this section drug discount card program endorsed under this discount card program offered by such sponsor. shall submit to the Secretary, at such time and section and disenroll from such a program. ‘‘(4) CONFIDENTIALITY OF ENROLLEE in such manner as the Secretary may specify, ‘‘(B) LIMITATION.—An eligible beneficiary RECORDS.—Insofar as a prescription drug card such information as the Secretary may require. may not be enrolled in more than 1 prescription sponsor maintains individually identifiable med- ‘‘(2) APPROVAL.—The Secretary shall review drug discount card program at any time. ical records or other health information regard- the information submitted under paragraph (1) ‘‘(2) ENROLLMENT FEES.— ing eligible beneficiaries enrolled in a prescrip- and shall determine whether to endorse the pre- ‘‘(A) IN GENERAL.—A prescription drug card tion drug discount card program endorsed under scription drug discount card program to which sponsor may charge an annual enrollment fee to this section, the prescription drug card sponsor such information relates. The Secretary may not each eligible beneficiary enrolled in a prescrip- shall have in place procedures to safeguard the approve a program unless the program and pre- tion drug discount card program offered by such privacy of any individually identifiable bene- scription drug card sponsor offering the pro- sponsor. ficiary information in a manner that the Sec- gram comply with the requirements under this ‘‘(B) AMOUNT.—No enrollment fee charged retary determines is consistent with the Federal section. under subparagraph (A) may exceed $25. regulations (concerning the privacy of individ- ‘‘(g) REQUIREMENTS ON DEVELOPMENT AND ‘‘(C) UNIFORM ENROLLMENT FEE.—A prescrip- ually identifiable health information) promul- APPLICATION OF FORMULARIES.—If a prescription drug card sponsor shall ensure that the en- gated under section 264(c) of the Health Insur- tion drug card sponsor offering a prescription rollment fee for a prescription drug discount ance Portability and Accountability Act of 1996. drug discount card program uses a formulary, card program endorsed under this section is the ‘‘(5) NO OTHER FEES.—A prescription drug the following requirements must be met: same for all eligible medicare beneficiaries en- card sponsor may not charge any fee to an eligi- ‘‘(1) PHARMACY AND THERAPEUTIC (P&T) COM- rolled in the program. ble beneficiary under a prescription drug dis- MITTEE.— ‘‘(D) COLLECTION.—Any enrollment fee shall count card program endorsed under this section ‘‘(A) IN GENERAL.—The eligible entity must es- be collected by the prescription drug card spon- other than an enrollment fee charged under sub- tablish a pharmacy and therapeutic committee sor. section (b)(2)(A). that develops and reviews the formulary. ‘‘(c) PROVIDING INFORMATION TO ELIGIBLE ‘‘(6) PRICES.— ‘‘(B) COMPOSITION.—A pharmacy and thera- BENEFICIARIES.— ‘‘(A) AVOIDANCE OF HIGH PRICED DRUGS.—A peutic committee shall include at least 1 aca- ‘‘(1) PROMOTION OF INFORMED CHOICE.— prescription drug card sponsor may not rec- demic expert, at least 1 practicing physician, ‘‘(A) BY THE SECRETARY.—In order to promote ommend switching an eligible beneficiary to a and at least 1 practicing pharmacist, all of informed choice among endorsed prescription drug with a higher negotiated price absent a whom have expertise in the care of elderly or drug discount card programs, the Secretary recommendation by a licensed health profes- disabled persons, and a majority of the members shall provide for the dissemination of informa- sional that there is a clinical indication with re- of such committee shall consist of individuals tion which compares the costs and benefits of spect to the patient for such a switch. who are a practicing physician or a practicing such programs. Such dissemination shall be co- ‘‘(B) PRICE STABILITY.—Negotiated prices pharmacist (or both). ordinated with the dissemination of educational charged for prescription drugs covered under a ‘‘(2) FORMULARY DEVELOPMENT.—In devel- information on other medicare options. prescription drug discount card program en- oping and reviewing the formulary, the com- ‘‘(B) BY PRESCRIPTION DRUG CARD SPONSORS.— dorsed under this section may not change more mittee shall base clinical decisions on the Each prescription drug card sponsor shall make frequently than once every 60 days. strength of scientific evidence and standards of available to each eligible beneficiary (through ‘‘(e) PRESCRIPTION DRUG BENEFITS.— practice, including assessing peer-reviewed med- the Internet and otherwise) information— ‘‘(1) IN GENERAL.—Each prescription drug ical literature, such as randomized clinical ‘‘(i) that the Secretary identifies as being nec- card sponsor may only provide benefits that re- trials, pharmacoeconomic studies, outcomes re- essary to promote informed choice among en- late to prescription drugs (as defined in sub- search data, and such other information as the dorsed prescription drug discount card programs section (i)(2)) under a prescription drug dis- committee determines to be appropriate. by eligible beneficiaries, including information count card program endorsed under this section. ‘‘(3) INCLUSION OF DRUGS IN ALL THERAPEUTIC on enrollment fees, negotiated prices for pre- ‘‘(2) SAVINGS TO ELIGIBLE BENEFICIARIES.— CATEGORIES AND CLASSES.— scription drugs charged to beneficiaries, and ‘‘(A) IN GENERAL.—Subject to subparagraph ‘‘(A) IN GENERAL.—The formulary must in- services relating to prescription drugs offered (D), each prescription drug card sponsor shall clude drugs within each therapeutic category under the program; provide eligible beneficiaries who enroll in a and class of covered outpatient drugs (as de- ‘‘(ii) on how any formulary used by such prescription drug discount card program offered fined by the Secretary), although not nec- sponsor functions. by such sponsor that is endorsed under this sec- essarily for all drugs within such categories and ‘‘(2) USE OF MEDICARE TOLL-FREE NUMBER.— tion with access to negotiated prices used by the classes. The Secretary shall provide through the 1–800– sponsor with respect to prescription drugs dis- ‘‘(B) REQUIREMENT.—In defining therapeutic MEDICARE toll free telephone number for the pensed to eligible beneficiaries. categories and classes of covered outpatient receipt and response to inquiries and complaints ‘‘(B) INAPPLICABILITY OF MEDICAID BEST PRICE drugs pursuant to subparagraph (A), the Sec- concerning the medicare prescription drug dis- RULES.—The requirements of section 1927 relat- retary shall use the compendia referred to sec- count card endorsement program established ing to manufacturer best price shall not apply to tion 1927(g)(1)(B)(i) or other recognized sources under this section and prescription drug dis- the negotiated prices for prescription drugs for categorizing drug therapeutic categories and count card programs endorsed under such pro- made available under a prescription drug dis- classes. gram. count card program endorsed under this section. ‘‘(4) PROVIDER EDUCATION.—The committee ‘‘(d) BENEFICIARY PROTECTIONS.— ‘‘(C) GUARANTEED ACCESS TO NEGOTIATED shall establish policies and procedures to edu- ‘‘(1) IN GENERAL.—Each prescription drug dis- PRICES.—The Secretary, in consultation with the cate and inform health care providers con- count card program endorsed under this section Inspector General of the Department of Health cerning the formulary. shall meet such requirements as the Secretary and Human Services, shall establish procedures ‘‘(5) NOTICE BEFORE REMOVING DRUGS FROM identifies to protect and promote the interest of to ensure that eligible beneficiaries have access FORMULARY.—Any removal of a drug from a for- eligible beneficiaries, including requirements to the negotiated prices for prescription drugs mulary shall take effect only after appropriate that— provided under subparagraph (A). notice is made available to beneficiaries and ‘‘(A) relate to appeals by eligible beneficiaries ‘‘(D) APPLICATION OF FORMULARY RESTRIC- pharmacies. and marketing practices; and TIONS.—A drug prescribed for an eligible bene- ‘‘(h) FRAUD AND ABUSE PREVENTION.— ‘‘(B) ensure that beneficiaries are not charged ficiary that would otherwise be a covered drug ‘‘(1) IN GENERAL.—The Secretary shall provide more than the lower of the negotiated retail under this section shall not be so considered appropriate oversight to ensure compliance of price or the usual and customary price. under a prescription drug discount card pro- endorsed programs with the requirements of this ‘‘(2) ENSURING PHARMACY ACCESS.—Each pre- gram if the program excludes the drug under a section, including verification of the negotiated scription drug card sponsor offering a prescrip- formulary. prices and services provided. tion drug discount card program endorsed under ‘‘(3) BENEFICIARY SERVICES.—Each prescrip- ‘‘(2) DISQUALIFICATION FOR ABUSIVE PRAC- this section shall secure the participation in its tion drug discount card program endorsed under TICES.—The Secretary may implement inter- network of a sufficient number of pharmacies this section shall provide pharmaceutical sup- mediate sanctions and may revoke the endorse- that dispense (other than by mail order) drugs port services, such as education, counseling, ment of a program that the Secretary determines directly to patients to ensure convenient access and services to prevent adverse drug inter- no longer meets the requirements of this section (as determined by the Secretary and including actions. or that has engaged in false or misleading mar- adequate emergency access) for enrolled bene- ‘‘(4) DISCOUNT CARDS.—Each prescription keting practices. ficiaries. Such standards shall take into account drug card sponsor shall issue a card to eligible ‘‘(3) AUTHORITY WITH RESPECT TO CIVIL MONEY reasonable distances to pharmacy services in beneficiaries enrolled in a prescription drug dis- PENALTIES.—The Secretary may impose a civil urban and rural areas and access to pharmacy count card program offered by such sponsor money penalty in an amount not to exceed

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The ‘‘(C) an insurer (including an insurer that of- defined by the Secretary) to receive prescription provisions of section 1128A (other than sub- fers medicare supplemental policies under sec- drug benefits under the program. sections (a) and (b)) shall apply to a civil money tion 1882); ‘‘(3) COORDINATION OF BENEFITS.— penalty under the previous sentence in the same ‘‘(D) any other entity; or ‘‘(A) IN GENERAL.—The Secretary shall estab- manner as such provisions apply to a penalty or ‘‘(E) any combination of the entities described lish procedures under which eligible low-income proceeding under section 1128A(a). in subparagraphs (A) through (D). beneficiaries who are enrolled for coverage de- ‘‘(4) REPORTING TO SECRETARY.—Each pre- ‘‘TRANSITIONAL PRESCRIPTION DRUG ASSISTANCE scribed in subparagraph (B) and enrolled in a prescription drug assistance card program have scription drug card sponsor offering a prescrip- CARD PROGRAM FOR ELIGIBLE LOW-INCOME access to the prescription drug benefits available tion drug discount card program endorsed under BENEFICIARIES this section shall report information relating to under such program. ‘‘SEC. 1807A. (a) ESTABLISHMENT.— ‘‘(B) COVERAGE DESCRIBED.—Coverage de- program performance, use of prescription drugs ‘‘(1) IN GENERAL.—There is established a pro- by eligible beneficiaries enrolled in the program, scribed in this subparagraph is as follows: gram under which the Secretary shall award ‘‘(i) Coverage of prescription drugs under a financial information of the sponsor, and such contracts to prescription drug card sponsors of- State pharmaceutical assistance program. other information as the Secretary may specify. fering a prescription drug discount card that ‘‘(ii) Enrollment in a Medicare+Choice plan The Secretary may not disclose any proprietary has been endorsed by the Secretary under sec- under part C. data reported under this paragraph. tion 1807 under which such sponsors shall offer ‘‘(4) GRIEVANCE MECHANISM.—Each prescrip- ‘‘(5) DRUG UTILIZATION REVIEW.—The Sec- a prescription drug assistance card program to tion drug card sponsor with a contract under retary may use claims data from parts A and B eligible low-income beneficiaries in accordance this section shall provide in accordance with for purposes of conducting a drug utilization re- with the requirements of this section. section 1852(f) meaningful procedures for hear- view program. ‘‘(2) APPLICATION OF DISCOUNT CARD PROVI- ing and resolving grievances between the pre- ‘‘(i) DEFINITIONS.—In this section: SIONS.—Except as otherwise provided in this sec- scription drug card sponsor (including any enti- ‘‘(1) ELIGIBLE BENEFICIARY.— tion, the provisions of section 1807 shall apply to ty or individual through which the prescription ‘‘(A) IN GENERAL.—The term ‘eligible bene- the program established under this section. drug card sponsor provides covered benefits) ficiary’ means an individual who— ‘‘(b) ELIGIBILITY, ELECTION OF PROGRAM, AND and enrollees in a prescription drug assistance ‘‘(i) is entitled to, or enrolled for, benefits ENROLLMENT FEES.— card program offered by such sponsor. under part A and enrolled under part B; and ‘‘(1) ELIGIBILITY AND ELECTION OF PROGRAM.— ‘‘(5) APPLICATION OF COVERAGE DETERMINA- ‘‘(ii) is not a dual eligible individual (as de- ‘‘(A) IN GENERAL.—Subject to the succeeding TION AND RECONSIDERATION PROVISIONS.— fined in subparagraph (B)). provisions of this paragraph, the enrollment ‘‘(A) IN GENERAL.—The requirements of para- ‘‘(B) DUAL ELIGIBLE INDIVIDUAL.— procedures established under section graphs (1) through (3) of section 1852(g) shall ‘‘(i) IN GENERAL.—The term ‘dual eligible indi- 1807(b)(1)(A)(ii) shall apply for purposes of this apply with respect to covered benefits under a vidual’ means an individual who is— section. prescription drug assistance card program under ‘‘(I) enrolled under title XIX or under a waiv- ‘‘(B) ENROLLMENT OF ANY ELIGIBLE LOW-IN- this section in the same manner as such require- er under section 1115 of the requirements of such COME BENEFICIARY.—Each prescription drug ments apply to a Medicare+Choice organization title for medical assistance that is not less than card sponsor offering a prescription drug assist- with respect to benefits it offers under a the medical assistance provided to an individual ance card program under this section shall per- Medicare+Choice plan under part C. ‘‘(B) REQUEST FOR REVIEW OF TIERED FOR- described in section 1902(a)(10)(A)(i) and in- mit any eligible low-income beneficiary to enroll MULARY DETERMINATIONS.—In the case of a pre- cludes covered outpatient drugs (as such term is in such program if it serves the geographic area scription drug assistance card program offered defined for purposes of section 1927); and in which the beneficiary resides. by a prescription drug card sponsor that pro- ‘‘(II) entitled to benefits under part A and en- ‘‘(C) SIMULTANEOUS ENROLLMENT IN PRESCRIP- vides for tiered pricing for drugs included with- rolled under part B. TION DRUG DISCOUNT CARD PROGRAM.—An eligi- in a formulary and provides lower prices for ‘‘(ii) INCLUSION OF MEDICALLY NEEDY.—Such ble low-income beneficiary who enrolls in a pre- preferred drugs included within the formulary, term includes an individual described in section scription drug assistance card program offered an eligible low-income beneficiary who is en- 1902(a)(10)(C). by a prescription drug card sponsor under this rolled in the program may request coverage of a ‘‘(2) PRESCRIPTION DRUG.— section shall be simultaneously enrolled in a nonpreferred drug under the terms applicable ‘‘(A) IN GENERAL.—Except as provided in sub- prescription drug discount card program offered for preferred drugs if the prescribing physician paragraph (B), the term ‘prescription drug’ by such sponsor. determines that the preferred drug for treatment means— ‘‘(2) WAIVER OF ENROLLMENT FEES.— of the same condition is not as effective for the ‘‘(i) a drug that may be dispensed only upon ‘‘(A) IN GENERAL.—A prescription drug card eligible low-income beneficiary or has adverse a prescription and that is described in clause (i) sponsor may not charge an enrollment fee to effects for the eligible low-income beneficiary. or (ii) of subparagraph (A) of section 1927(k)(2); any eligible low-income beneficiary enrolled in a ‘‘(C) FORMULARY DETERMINATIONS.—An eligi- or prescription drug discount card program offered ‘‘(ii) a biological product or insulin described ble low-income beneficiary who is enrolled in a by such sponsor. prescription drug assistance card program of- in subparagraph (B) or (C) of such section (in- ‘‘(B) PAYMENT BY SECRETARY.—Under a con- cluding syringes, and necessary medical supplies fered by a prescription drug card sponsor may tract awarded under subsection (f)(2), the Sec- appeal to obtain coverage for a covered drug associated with the administration of insulin, as retary shall pay to each prescription drug card defined by the Secretary), that is not on a formulary of the entity if the sponsor an amount equal to any enrollment fee prescribing physician determines that the for- and such term includes a vaccine licensed under charged under section 1807(b)(2)(A) on behalf of mulary drug for treatment of the same condition section 351 of the Public Health Service Act and each eligible low-income beneficiary enrolled in is not as effective for the eligible low-income any use of a covered outpatient drug for a medi- a prescription drug discount card program beneficiary or has adverse effects for the eligible cally accepted indication (as defined in section under paragraph (1)(C) offered by such sponsor. low-income beneficiary. 1927(k)(6)). ‘‘(c) ADDITIONAL BENEFICIARY PROTEC- ‘‘(6) APPEALS.— ‘‘(B) EXCLUSIONS.—The term ‘prescription TIONS.— ‘‘(A) IN GENERAL.—Subject to subparagraph drug’ does not include drugs or classes of drugs, ‘‘(1) PROVIDING INFORMATION TO ELIGIBLE (B), a prescription drug card sponsor shall meet or their medical uses, which may be excluded LOW-INCOME BENEFICIARIES.—In addition to the the requirements of paragraphs (4) and (5) of from coverage or otherwise restricted under sec- information provided to eligible beneficiaries section 1852(g) with respect to drugs not in- tion 1927(d)(2), other than subparagraph (E) under section 1807(c), the prescription drug card cluded on any formulary in a similar manner thereof (relating to smoking cessation agents), sponsor shall— (as determined by the Secretary) as such re- or under section 1927(d)(3). ‘‘(A) periodically notify each eligible low-in- quirements apply to a Medicare+Choice organi- ‘‘(3) NEGOTIATED PRICE.—The term ‘negotiated come beneficiary enrolled in a prescription drug zation with respect to benefits it offers under a price’ includes all discounts, direct or indirect assistance card program offered by such sponsor Medicare+Choice plan under part C. subsidies, rebates, price concessions, and direct of the amount of coverage for prescription drugs ‘‘(B) FORMULARY DETERMINATIONS.—An eligi- or indirect remunerations. remaining under subsection (d)(2)(A); and ble low-income beneficiary who is enrolled in a ‘‘(4) PRESCRIPTION DRUG CARD SPONSOR.—The ‘‘(B) notify each eligible low-income bene- prescription drug assistance card program of- term ‘prescription drug card sponsor’ means any ficiary enrolled in a prescription drug assistance fered by a prescription drug card sponsor may entity with demonstrated experience and exper- card program offered by such sponsor of the appeal to obtain coverage for a covered drug tise in operating a prescription drug discount grievance and appeals processes under the pro- that is not on a formulary of the entity if the card program, an insurance program that program. prescribing physician determines that the for- vides coverage for prescription drugs, or a simi- ‘‘(2) CONVENIENT ACCESS IN LONG-TERM CARE mulary drug for treatment of the same condition lar program that the Secretary determines to be FACILITIES.—For purposes of determining is not as effective for the eligible low-income appropriate to provide eligible beneficiaries with whether convenient access has been provided beneficiary or has adverse effects for the eligible the benefits under a prescription drug discount under section 1807(d)(2) with respect to eligible low-income beneficiary. card program endorsed by the Secretary under low-income beneficiaries enrolled in a prescrip- ‘‘(C) APPEALS AND EXCEPTIONS TO APPLICA- this section, including— tion drug assistance card program, the Secretary TION.—The prescription drug card sponsor must ‘‘(A) a pharmaceutical benefit management may only make a determination that such access have, as part of the appeals process under this company; has been provided if an appropriate arrange- paragraph, a process for timely appeals for de- ‘‘(B) a wholesale or retail pharmacist delivery ment is in place for eligible low-income bene- nials of coverage based on the application of the system; ficiaries who are in a long-term care facility (as formulary.

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‘‘(d) PRESCRIPTION DRUG BENEFITS.— ‘‘(B) negotiate with brand name and generic ‘‘(h) ELIGIBILITY DETERMINATIONS MADE BY ‘‘(1) IN GENERAL.—Subject to paragraph (5), prescription drug manufacturers and others for STATES; PRESUMPTIVE ELIGIBILITY.—States shall all the benefits available under a prescription low prices on prescription drugs; perform the functions described in section drug discount card program offered by a pre- ‘‘(C) track individual beneficiary expenditures 1935(a)(1). scription drug card sponsor and endorsed under in a format and periodicity specified by the Sec- ‘‘(i) APPROPRIATIONS.—There are appro- section 1807 shall be available to eligible low-in- retary; and priated from the Federal Supplementary Med- come beneficiaries enrolled in a prescription ‘‘(D) perform such other functions as the Sec- ical Insurance Trust Fund established under drug assistance card program offered by such retary may assign. section 1841 such sums as may be necessary to sponsor. ‘‘(2) DATA EXCHANGES.—Each prescription carry out the program under this section. ‘‘(2) ASSISTANCE FOR ELIGIBLE LOW-INCOME drug card sponsor shall receive data exchanges ‘‘(j) DEFINITIONS.—In this section: BENEFICIARIES.— in a format specified by the Secretary and shall ‘‘(1) ELIGIBLE BENEFICIARY; NEGOTIATED ‘‘(A) $600 ANNUAL ASSISTANCE.—Subject to maintain real-time beneficiary files. PRICE; PRESCRIPTION DRUG.—The terms ‘eligible subparagraphs (B) and (C) and paragraph (5), ‘‘(3) PUBLIC DISCLOSURE OF PHARMACEUTICAL beneficiary’, ‘negotiated price’, and ‘prescrip- each prescription drug card sponsor with a con- PRICES FOR EQUIVALENT DRUGS.—The prescription drug’ have the meanings given those terms tract under this section shall provide coverage tion drug card sponsor offering the prescription in section 1807(i). for the first $600 of expenses for prescription drug assistance card program shall provide that ‘‘(2) ELIGIBLE LOW-INCOME BENEFICIARY.—The drugs incurred during each calendar year by an each pharmacy or other dispenser that arranges term ‘eligible low-income beneficiary’ means an eligible low-income beneficiary enrolled in a pre- for the dispensing of a covered drug shall inform individual who— scription drug assistance card program offered the eligible low-income beneficiary at the time of ‘‘(A) is an eligible beneficiary (as defined in by such sponsor. purchase of the drug of any differential between section 1807(i)); and ‘‘(B) COINSURANCE.— the price of the prescribed drug to the enrollee ‘‘(B) is described in clause (iii) or (iv) of sec- ‘‘(i) IN GENERAL.—The prescription drug card and the price of the lowest priced generic drug tion 1902(a)(10)(E) or in section 1905(p)(1). sponsor shall determine an amount of coinsur- covered under the plan that is therapeutically ‘‘(3) PRESCRIPTION DRUG CARD SPONSOR.—The ance to collect from each eligible low-income equivalent and bioequivalent and available at term ‘prescription drug card sponsor’ has the beneficiary enrolled in a prescription drug as- such pharmacy or other dispenser. meaning given that term in section 1807(i), ex- sistance card program offered by such sponsor ‘‘(f) SUBMISSION OF BIDS AND AWARDING OF cept that such sponsor shall also be an entity for which coverage is available under subpara- CONTRACTS.— that the Secretary determines is— graph (A). ‘‘(1) SUBMISSION OF BIDS.—Each prescription ‘‘(A) is appropriate to provide eligible low-in- ‘‘(ii) AMOUNT.—The amount of coinsurance drug card sponsor that seeks to offer a prescrip- come beneficiaries with the benefits under a pre- collected under clause (i) shall be at least 10 per- tion drug assistance card program under this scription drug assistance card program under cent of the negotiated price of each prescription section shall submit to the Secretary, at such this section; and drug dispensed to an eligible low-income bene- time and in such manner as the Secretary may ‘‘(B) is able to manage the monetary assist- ficiary. specify, such information as the Secretary may ance made available under subsection (d)(2); ‘‘(iii) CONSTRUCTION.—Amounts collected require. ‘‘(C) agrees to submit to audits by the Sec- under clause (i) shall not be counted against the ‘‘(2) AWARDING OF CONTRACTS.—The Secretary retary; and total amount of coverage available under sub- shall review the information submitted under ‘‘(D) provides such other assurances as the paragraph (A). paragraph (1) and shall determine whether to Secretary may require. ‘‘(C) REDUCTION FOR LATE ENROLLMENT.—For award a contract to the prescription drug card ‘‘(4) STATE.—The term ‘State’ has the meaning each month during a calendar quarter in which sponsor offering the program to which such in- an eligible low-income beneficiary is not en- given such term for purposes of title XIX.’’. formation relates. The Secretary may not ap- (b) EXCLUSION OF PRICES FROM DETERMINA- rolled in a prescription drug assistance card prove a program unless the program and pre- TION OF BEST PRICE.—Section 1927(c)(1)(C)(i) (42 program offered by a prescription drug card scription drug card sponsor offering the pro- U.S.C. 1396r–8(c)(1)(C)(i)) is amended— sponsor with a contract under this section, the gram comply with the requirements under this (1) by striking ‘‘and’’ at the end of subclause amount of assistance available under subpara- section. (III); graph (A) shall be reduced by $50. ‘‘(3) NUMBER OF CONTRACTS.—There shall be (2) by striking the period at the end of sub- ‘‘(D) CREDITING OF UNUSED BENEFITS TOWARD no limit on the number of prescription drug card clause (IV) and inserting ‘‘; and’’; and FUTURE YEARS.—The dollar amount of coverage sponsors that may be awarded contracts under (3) by adding at the end the following new described in subparagraph (A) shall be in- paragraph (2). creased by any amount of coverage described in subclause: ‘‘(4) CONTRACT PROVISIONS.— ‘‘(V) any negotiated prices charged under the such subparagraph that was not used during ‘‘(A) DURATION.—A contract awarded under medicare prescription drug discount card en- the previous calendar year. paragraph (2) shall be for the lifetime of the dorsement program under section 1807 or under ‘‘(E) WAIVER TO ENSURE PROVISION OF BEN- program under this section. the transitional prescription drug assistance EFIT.—The Secretary may waive such require- ‘‘(B) WITHDRAWAL.—A prescription drug card ments of this section and section 1807 as may be sponsor that desires to terminate the contract card program for eligible low-income bene- necessary to ensure that each eligible low-in- awarded under paragraph (2) may terminate ficiaries under section 1807A.’’. come beneficiaries has access to the assistance such contract without penalty if such sponsor (c) EXCLUSION OF PRESCRIPTION DRUG ASSIST- described in subparagraph (A). gives notice— ANCE CARD COSTS FROM DETERMINATION OF ‘‘(3) ADDITIONAL DISCOUNTS.—A prescription ‘‘(i) to the Secretary 90 days prior to the ter- PART B MONTHLY PREMIUM.—Section 1839(g) of drug card sponsor with a contract under this mination of such contract; and the Social Security Act (42 U.S.C. 1395r(g)) is section shall provide each eligible low-income ‘‘(ii) to each eligible low-income beneficiary amended— beneficiary enrolled in a prescription drug as- that is enrolled in a prescription drug assistance (1) by striking ‘‘attributable to the application sistance program offered by the sponsor with ac- card program offered by such sponsor 60 days of section’’ and inserting ‘‘attributable to— cess to negotiated prices that reflect a minimum prior to such termination. ‘‘(1) the application of section’’; average discount of at least 20 percent of the av- ‘‘(C) SERVICE AREA.—The service area under (2) by striking the period and inserting ‘‘; erage wholesale price for prescription drugs cov- the contract shall be the same as the area served and’’; and ered under that program. by the prescription drug card sponsor under sec- (3) by adding at the end the following new ‘‘(4) ASSISTANCE CARDS.—Each prescription tion 1807. paragraph: drug card sponsor shall permit eligible low-in- ‘‘(5) SIMULTANEOUS APPROVAL OF DISCOUNT ‘‘(2) the prescription drug assistance card pro- come beneficiaries enrolled in a prescription CARD AND ASSISTANCE PROGRAMS.—A prescrip- gram under section 1807A.’’. drug assistance card program offered by such tion drug card sponsor may submit an applica- (d) REGULATIONS.— sponsor to use the discount card issued under tion for endorsement under section 1807 as part (1) AUTHORITY FOR INTERIM FINAL REGULA- section 1807(e)(4) to obtain benefits under the of the bid submitted under paragraph (1) and TIONS.—The Secretary may promulgate initial program. the Secretary may approve such application at regulations implementing sections 1807 and ‘‘(5) APPLICATION OF FORMULARY RESTRIC- the same time as the Secretary awards a con- 1807A of the Social Security Act (as added by TIONS.—A drug prescribed for an eligible low-in- tract under this section. this section) in interim final form without prior come beneficiary that would otherwise be a cov- ‘‘(g) PAYMENTS TO PRESCRIPTION DRUG CARD opportunity for public comment. ered drug under this section shall not be so con- SPONSORS.— (2) FINAL REGULATIONS.—A final regulation sidered under a prescription drug assistance ‘‘(1) IN GENERAL.—The Secretary shall pay to reflecting public comments must be published card program if the program excludes the drug each prescription drug card sponsor offering a within 1 year of the interim final regulation under a formulary and such exclusion is not prescription drug assistance card program in promulgated under paragraph (1). successfully resolved under paragraph (4), (5), which an eligible low-income beneficiary is en- (3) EXEMPTION FROM THE PAPERWORK REDUC- or (6) of subsection (c). rolled an amount equal to the amount agreed to TION ACT.—The promulgation of the regulations ‘‘(e) REQUIREMENTS FOR PRESCRIPTION DRUG by the Secretary and the sponsor in the contract under this subsection and the administration CARD SPONSORS THAT OFFER PRESCRIPTION awarded under subsection (f)(2). the programs established by sections 1807 and DRUG ASSISTANCE CARD PROGRAMS.— ‘‘(2) PAYMENT FROM PART B TRUST FUND.—The 1807A of the Social Security Act (as added by ‘‘(1) IN GENERAL.—Each prescription drug costs of providing benefits under this section this section) shall be made without regard to card sponsor shall— shall be payable from the Federal Supple- chapter 35 of title 44, United States Code (com- ‘‘(A) process claims made by eligible low-in- mentary Medical Insurance Trust Fund estab- monly known as the ‘‘Paperwork Reduction come beneficiaries; lished under section 1841. Act’’).

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(e) IMPLEMENTATION; TRANSITION.— standards do not impose an undue administra- ‘‘(b) APPLICATION.—No grant may be made (1) IMPLEMENTATION.—The Secretary shall im- tive burden on the practice of medicine, phar- under this section except pursuant to a grant plement the amendments made by this section in macy, or other health professions. application that is submitted in a time, manner, a manner that discounts are available to eligible ‘‘(D) COMPATIBILITY WITH ADMINISTRATIVE and form approved by the Secretary. beneficiaries under section 1807 of the Social Se- SIMPLIFICATION AND PRIVACY LAWS.—The stand- ‘‘(c) AUTHORIZATION OF APPROPRIATIONS.— curity Act and assistance is available to eligible ards shall be— There are authorized to be appropriated for low-income beneficiaries under section 1807A of ‘‘(i) consistent with the Federal regulations each of fiscal years 2006, 2007, and 2008, such such Act not later than January 1, 2004. (concerning the privacy of individually identifi- sums as may be necessary to carry out this sec- (2) TRANSITION.—The Secretary shall provide able health information) promulgated under section.’’. for an appropriate transition and discontinu- tion 264(c) of the Health Insurance Portability Subtitle D—Other Provisions ation of the programs under section 1807 and and Accountability Act of 1996; and 1807A of the Social Security Act. Such transition ‘‘(ii) compatible with the standards adopted SEC. 131. ADDITIONAL REQUIREMENTS FOR AN- and discontinuation shall ensure that such pro- under part C. NUAL FINANCIAL REPORT AND grams continue to operate until the date on OVERSIGHT ON MEDICARE PRO- ‘‘(4) TRANSFER OF INFORMATION.—The Sec- GRAM. which the first enrollment period under part D retary shall develop and adopt standards for (a) IN GENERAL.—Section 1817 (42 U.S.C. ends. transferring among prescribing and insurance 1395i) is amended by adding at the end the fol- entities and other necessary entities appropriate Subtitle C—Standards for Electronic lowing new subsection: Prescribing standard data elements needed for the electronic ‘‘(l) COMBINED REPORT ON OPERATION AND exchange of medication history, eligibility, ben- SEC. 121. STANDARDS FOR ELECTRONIC PRE- STATUS OF THE TRUST FUND AND THE FEDERAL efit, and other prescription drug information SCRIBING. SUPPLEMENTARY MEDICAL INSURANCE TRUST and other health information determined appro- Title XI (42 U.S.C. 1301 et seq.) is amended by FUND (INCLUDING THE PRESCRIPTION DRUG AC- priate in compliance with the standards adopted adding at the end the following new part: COUNT).—In addition to the duty of the Board or modified under this part. ‘‘PART D—ELECTRONIC PRESCRIBING of Trustees to report to Congress under sub- ‘‘(b) TIMETABLE FOR ADOPTION OF STAND- section (b), on the date the Board submits the ‘‘STANDARDS FOR ELECTRONIC PRESCRIBING ARDS.— report required under subsection (b)(2), the ‘‘SEC. 1180. (a) STANDARDS.— ‘‘(1) IN GENERAL.—The Secretary shall adopt ‘‘(1) DEVELOPMENT AND ADOPTION.— the standards under this part by January 1, Board shall submit to Congress a report on the ‘‘(A) IN GENERAL.—The Secretary shall de- 2006. operation and status of the Trust Fund and the Federal Supplementary Medical Insurance velop or adopt standards for transactions and ‘‘(2) ADDITIONS AND MODIFICATIONS TO STAND- Trust Fund established under section 1841 (in- data elements for such transactions (in this sec- ARDS.—The Secretary shall, in consultation tion referred to as ‘standards’) to enable the with appropriate representatives of interested cluding the Prescription Drug Account within electronic transmission of medication history, parties, review the standards developed or such Trust Fund), in this subsection referred to eligibility, benefit, and other prescription infor- adopted under this part and adopt modifications as the ‘Trust Funds’. Such report shall include mation. to the standards (including additions to the the following information: ‘‘(B) CONSULTATION.—In developing and standards), as determined appropriate. Any ad- ‘‘(1) OVERALL SPENDING FROM THE GENERAL adopting the standards under subparagraph dition or modification to such standards shall be FUND OF THE TREASURY.—A statement of total (A), the Secretary shall consult with representa- completed in a manner which minimizes the dis- amounts obligated during the preceding fiscal tives of physicians, hospitals, pharmacists, ruption and cost of compliance. year from the General Revenues of the Treasury standard setting organizations, pharmacy ben- ‘‘(c) COMPLIANCE WITH STANDARDS.— to the Trust Funds, separately stated in terms of efit managers, beneficiary information exchange ‘‘(1) REQUIREMENT FOR ALL INDIVIDUALS AND the total amount and in terms of the percentage networks, technology experts, and representa- ENTITIES THAT TRANSMIT OR RECEIVE PRESCRIP- such amount bears to all other amounts obli- tives of the Departments of Veterans Affairs and TIONS ELECTRONICALLY.— gated from such General Revenues during such Defense and other interested parties. ‘‘(A) IN GENERAL.—Individuals or entities that fiscal year, for each of the following amounts: ‘‘(2) OBJECTIVE.—Any standards developed or transmit or receive prescriptions electronically ‘‘(A) MEDICARE BENEFITS.—The amount ex- adopted under this part shall be consistent with shall comply with the standards adopted or pended for payment of benefits covered under the objectives of improving— modified under this part. this title. ‘‘(A) patient safety; and ‘‘(B) RELATION TO STATE LAWS.—The stand- ‘‘(B) ADMINISTRATIVE AND OTHER EXPENSES.— ‘‘(B) the quality of care provided to patients. ards adopted or modified under this part shall The amount expended for payments not related EQUIREMENTS.—Any standards devel- ‘‘(3) R supersede any State law or regulations per- to the benefits described in subparagraph (A). oped or adopted under this part shall comply taining to the electronic transmission of medica- ‘‘(2) HISTORICAL OVERVIEW OF SPENDING.— with the following: tion history, eligibility, benefit and prescription From the date of the inception of the program of ‘‘(A) PATIENT MAY REQUEST A WRITTEN PRE- information. insurance under this title through the fiscal SCRIPTION.—The standards provide that— ‘‘(2) TIMETABLE FOR COMPLIANCE.— year involved, a statement of the total amounts ‘‘(i) a prescription shall be written and not ‘‘(A) INITIAL COMPLIANCE.— referred to in paragraph (1), separately stated transmitted electronically if the patient makes ‘‘(i) IN GENERAL.—Not later than 24 months for the amounts described in subparagraphs (A) such a request; and after the date on which an initial standard is and (B) of such paragraph. ‘‘(ii) no additional charges may be imposed on adopted under this part, each individual or en- ‘‘(3) 10-YEAR AND 50-YEAR PROJECTIONS.—An the patient for making such a request. tity to whom the standard applies shall comply estimate of total amounts referred to in para- ‘‘(B) PATIENT-SPECIFIC MEDICATION HISTORY, with the standard. graph (1), separately stated for the amounts de- ELIGIBILITY, BENEFIT, AND OTHER PRESCRIPTION ‘‘(ii) SPECIAL RULE FOR SMALL HEALTH scribed in subparagraphs (A) and (B) of such INFORMATION.— PLANS.—In the case of a small health plan, as paragraph, required to be obligated for payment ‘‘(i) IN GENERAL.—The standards shall accom- for benefits covered under this title for each of modate electronic transmittal of patient-specific defined by the Secretary for purposes of section the 10 fiscal years succeeding the fiscal year in- medication history, eligibility, benefit, and other 1175(b)(1)(B), clause (i) shall be applied by sub- volved and for the 50-year period beginning prescription information among prescribing and stituting ‘36 months’ for ‘24 months’. with the succeeding fiscal year. dispensing professionals at the point of care. ‘‘(d) CONSULTATION WITH ATTORNEY GEN- ERAL.—The Secretary shall consult with the At- ‘‘(4) RELATION TO OTHER MEASURES OF ‘‘(ii) REQUIRED INFORMATION.—The informa- GROWTH.—A comparison of the rate of growth of tion described in clause (i) shall include the fol- torney General before developing, adopting, or the total amounts referred to in paragraph (1), lowing: modifying a standard under this part to ensure separately stated for the amounts described in ‘‘(I) Information (to the extent available and that the standard accommodates secure elec- subparagraphs (A) and (B) of such paragraph, feasible) on the drugs being prescribed for that tronic transmission of prescriptions for con- to the rate of growth for the same period in— patient and other information relating to the trolled substances in a manner that minimizes medication history of the patient that may be the possibility of violations under the Com- ‘‘(A) the gross domestic product; relevant to the appropriate prescription for that prehensive Drug Abuse Prevention and Control ‘‘(B) health insurance costs in the private sec- patient. Act of 1970 and related Federal laws. tor; ‘‘(II) Cost-effective alternatives (if any) to the ‘‘(e) NO REQUIREMENT TO TRANSMIT OR RE- ‘‘(C) employment-based health insurance costs drug prescribed. CEIVE PRESCRIPTIONS ELECTRONICALLY.—Noth- in the public and private sectors; and ‘‘(III) Information on eligibility and benefits, ing in this part shall be construed to require an ‘‘(D) other areas as determined appropriate by including the drugs included in the applicable individual or entity to transmit or receive pre- the Board of Trustees.’’. formulary and any requirements for prior au- scriptions electronically. (b) EFFECTIVE DATE.—The amendment made thorization. ‘‘GRANTS TO HEALTH CARE PROVIDERS TO by subsection (a) shall apply with respect to fis- ‘‘(IV) Information on potential interactions IMPLEMENT ELECTRONIC PRESCRIPTION PROGRAMS cal years beginning on or after the date of en- with drugs listed on the medication history, ‘‘SEC. 1180A. (a) IN GENERAL.—The Secretary actment of this Act. graded by severity of the potential interaction. is authorized to make grants to health care pro- (c) CONGRESSIONAL HEARINGS.—It is the sense ‘‘(V) Other information to improve the quality viders for the purpose of assisting such entities of Congress that the committees of jurisdiction of patient care and to reduce medical errors. to implement electronic prescription programs of Congress shall hold hearings on the reports ‘‘(C) UNDUE BURDEN.—The standards shall be that comply with the standards adopted or submitted under section 1817(l) of the Social Se- designed so that, to the extent practicable, the modified under this part. curity Act (as added by subsection (a)).

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SEC. 132. TRUSTEES’ REPORT ON MEDICARE’S UN- retary shall establish within the Department of ‘‘(2) TYPES OF MEDICAREADVANTAGE PLANS FUNDED OBLIGATIONS. Health and Human Services, an Office of the THAT MAY BE AVAILABLE.—A (a) REPORT.—The report submitted under sec- Medicare Beneficiary Advocate (in this section MedicareAdvantage plan may be any of the fol- tions 1817(b)(2) and 1841(b)(2) of the Social Se- referred to as the ‘‘Office’’). lowing types of plans of health insurance: curity Act (42 U.S.C. 1395i(b)(2) and 1395t(b)(2)) (b) DUTIES.—The Office shall carry out the ‘‘(A) COORDINATED CARE PLANS.—Coordinated during 2004 shall include an analysis of the following activities: care plans which provide health care services, total amount of the unfunded obligations of the (1) Establishing a toll-free telephone number including health maintenance organization Medicare program under title XVIII of the So- for medicare beneficiaries to use to obtain infor- plans (with or without point of service options) cial Security Act. mation on the medicare program, and particu- and plans offered by provider-sponsored organi- (b) MATTERS ANALYZED.—The analysis de- larly with respect to the benefits provided under zations (as defined in section 1855(d)). scribed in subsection (A) shall compare the long- part D of title XVIII of the Social Security Act ‘‘(B) COMBINATION OF MSA PLAN AND CON- term obligations of the Medicare program to the and the Medicare Prescription Drug plans and TRIBUTIONS TO MEDICAREADVANTAGE MSA.—An dedicated funding sources for that program MedicareAdvantage plans offering such bene- MSA plan, as defined in section 1859(b)(3), and (other than general revenue transfers), includ- fits. The Office shall ensure that the toll-free a contribution into a MedicareAdvantage med- ing the combined obligations of the Federal Hos- telephone number accommodates beneficiaries ical savings account (MSA). pital Insurance Trust Fund established under with disabilities and limited-English proficiency. ‘‘(C) PRIVATE FEE-FOR-SERVICE PLANS.—A section 1817 of such Act (42 U.S.C. 1395i) and (2) Establishing an Internet website with eas- MedicareAdvantage private fee-for-service plan, the Federal Supplementary Medical Insurance ily accessible information regarding Medicare as defined in section 1859(b)(2). Trust Fund established under section 1841 of Prescription Drug plans and ‘‘(3) MEDICAREADVANTAGE ELIGIBLE INDI- such Act (42 U.S.C. 1395t). MedicareAdvantage plans and the benefits of- VIDUAL.— SEC. 133. PHARMACY BENEFIT MANAGERS TRANS- fered under such plans. The website shall— ‘‘(A) IN GENERAL.—Subject to subparagraph PARENCY REQUIREMENTS. (A) be updated regularly to reflect changes in (B), in this title, the term ‘MedicareAdvantage Subpart 3 of part D of title XVIII of the Social services and benefits, including with respect to eligible individual’ means an individual who is Security Act (as added by section 101) is amend- the plans offered in a region and the associated entitled to (or enrolled for) benefits under part ed by adding at the end the following new sec- monthly premiums, benefits offered, formularies, A, enrolled under part B, and enrolled under tion: and contact information for such plans, and to part D. ‘‘PHARMACY BENEFIT MANAGERS TRANSPARENCY ensure that there are no broken links or errors; ‘‘(B) SPECIAL RULE FOR END-STAGE RENAL DIS- REQUIREMENTS (B) have printer-friendly, downloadable fact EASE.—Such term shall not include an indi- sheets on the medicare coverage options and ‘‘SEC. 1860D–27. (a) PROHIBITION.— vidual medically determined to have end-stage benefits; ‘‘(1) IN GENERAL.—Notwithstanding any other renal disease, except that— provision of law, an eligible entity offering a (C) be easy to navigate, with large print and easily recognizable links; and ‘‘(i) an individual who develops end-stage Medicare Prescription Drug plan under this renal disease while enrolled in a part or a MedicareAdvantage organization of- (D) provide links to the websites of the eligible entities participating in part D of title XVIII. Medicare+Choice or a MedicareAdvantage plan fering a MedicareAdvantage plan under part C may continue to be enrolled in that plan; and shall not enter into a contract with any phar- (3) Providing regional publications to medicare beneficiaries that include regional contacts ‘‘(ii) in the case of such an individual who is macy benefit manager (in this section referred to enrolled in a Medicare+Choice plan or a as a ‘PBM’) that is owned by a pharmaceutical for information, and that inform the beneficiaries of the prescription drug benefit options MedicareAdvantage plan under clause (i) (or manufacturing company. subsequently under this clause), if the enroll- ‘‘(2) PROVISION OF INFORMATION.—A PBM under title XVIII of the Social Security Act, in- ment is discontinued under circumstances de- that manages prescription drug coverage under cluding with respect to— scribed in section 1851(e)(4)(A), then the indi- this part or part C shall provide the following (A) monthly premiums; vidual will be treated as a ‘MedicareAdvantage information, on an annual basis, to the Assist- (B) formularies; and (C) the scope of the benefits offered. eligible individual’ for purposes of electing to ant Attorney General for Antitrust of the De- (4) Conducting outreach to medicare bene- continue enrollment in another partment of Justice and the Inspector General of ficiaries to inform the beneficiaries of the medi- MedicareAdvantage plan. the Health and Human Services Department: care coverage options and benefits under parts ‘‘(b) SPECIAL RULES.— ‘‘(A) The aggregate amount of any and all re- A, B, C, and D of title XVIII of the Social Secu- ‘‘(1) RESIDENCE REQUIREMENT.— bates, discounts, administrative fees, pro- rity Act. N GENERAL motional allowances, and other payments re- ‘‘(A) I .—Except as the Secretary (5) Working with local benefits administrators, ceived or recovered from each pharmaceutical may otherwise provide and except as provided in ombudsmen, local benefits specialists, and advo- manufacturer. subparagraph (C), an individual is eligible to cacy groups to ensure that medicare bene- ‘‘(B) The amount of payments received or re- elect a MedicareAdvantage plan offered by a ficiaries are aware of the medicare coverage op- covered from each pharmaceutical manufacturer MedicareAdvantage organization only if the tions and benefits under parts A, B, C, and D of for each of the top 50 drugs as measured by vol- plan serves the geographic area in which the in- title XVIII of the Social Security Act. ume (as determined by the Secretary). dividual resides. (c) FUNDING.— ‘‘(C) The percentage differential between the ‘‘(B) CONTINUATION OF ENROLLMENT PER- (1) ESTABLISHMENT.—Of the amounts author- price the PBM pays pharmacies for a drug de- MITTED.—Pursuant to rules specified by the Sec- ized to be appropriated under the Secretary’s scribed in subparagraph (B) and the price the retary, the Secretary shall provide that a plan discretion for administrative expenditures, PBM charges a Medicare Prescription Drug may offer to all individuals residing in a geo- $2,000,000 may be used to establish the Office in Plan or a MedicareAdvantage organization for graphic area the option to continue enrollment accordance with this section. such drug. in the plan, notwithstanding that the individual (2) OPERATION.—With respect to each fiscal ‘‘(b) FAILURE TO DISCLOSE.— no longer resides in the service area of the plan, year occurring after the fiscal year in which the ‘‘(1) CIVIL PENALTY.—Any PBM that fails to so long as the plan provides that individuals ex- comply with subsection (a) shall be liable for a Office is established under this section, the Sec- ercising this option have, as part of the basic civil penalty as determined appropriate through retary may use, out of amounts authorized to be benefits described in section 1852(a)(1)(A), rea- regulations promulgated by the Attorney Gen- appropriated under the Secretary’s discretion sonable access within that geographic area to eral. Such penalty may be recovered in a civil for administrative expenditures for such fiscal the full range of basic benefits, subject to rea- action brought by the United States. year, such sums as may be necessary to operate sonable cost-sharing liability in obtaining such ‘‘(2) COMPLIANCE AND EQUITABLE RELIEF.—If the Office in that fiscal year. benefits. any PBM fails to comply with subsection (a), TITLE II—MEDICAREADVANTAGE ‘‘(C) CONTINUATION OF ENROLLMENT PER- the United States district court may order com- Subtitle A—MedicareAdvantage Competition MITTED WHERE SERVICE CHANGED.—Notwith- pliance, and may grant such other equitable re- SEC. 201. ELIGIBILITY, ELECTION, AND ENROLL- standing subparagraph (A) and in addition to lief as the court in its discretion determines nec- MENT. subparagraph (B), if a MedicareAdvantage or- essary or appropriate, upon application of the Section 1851 (42 U.S.C. 1395w–21) is amended ganization eliminates from its service area a Assistant Attorney General. to read as follows: MedicareAdvantage payment area that was pre- ‘‘(c) DISCLOSURE EXEMPTION.—Any informa- ‘‘ELIGIBILITY, ELECTION, AND ENROLLMENT viously within its service area, the organization tion filed with the Assistant Attorney General ‘‘SEC. 1851. (a) CHOICE OF MEDICARE BENEFITS may elect to offer individuals residing in all or under subsection (a)(2) shall be exempt from dis- THROUGH MEDICAREADVANTAGE PLANS.— portions of the affected area who would other- closure under section 552 of title 5, and no such ‘‘(1) IN GENERAL.—Subject to the provisions of wise be ineligible to continue enrollment the op- information may be made public, except as may this section, each MedicareAdvantage eligible tion to continue enrollment in a be relevant to any administrative or judicial ac- individual (as defined in paragraph (3)) is enti- MedicareAdvantage plan it offers so long as— tion or proceeding. Nothing in this section is in- tled to elect to receive benefits under this title— ‘‘(i) the enrollee agrees to receive the full tended to prevent disclosure to either body of ‘‘(A) through— range of basic benefits (excluding emergency Congress or to any duly authorized committee or ‘‘(i) the original Medicare fee-for-service pro- and urgently needed care) exclusively at facili- subcommittee of the Congress.’’. gram under parts A and B; and ties designated by the organization within the SEC. 134. OFFICE OF THE MEDICARE BENE- ‘‘(ii) the voluntary prescription drug delivery plan service area; and FICIARY ADVOCATE. program under part D; or ‘‘(ii) there is no other MedicareAdvantage (a) ESTABLISHMENT.—Not later than 1 year ‘‘(B) through enrollment in a plan offered in the area in which the enrollee after the date of enactment of this Act, the Sec- MedicareAdvantage plan under this part. resides at the time of the organization’s election.

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‘‘(2) SPECIAL RULE FOR CERTAIN INDIVIDUALS an initial election period under subsection (e)(1) ‘‘(A) BENEFITS UNDER THE ORIGINAL MEDICARE COVERED UNDER FEHBP OR ELIGIBLE FOR VET- is deemed to have chosen the original medicare FEE-FOR-SERVICE PROGRAM OPTION.—A general ERANS OR MILITARY HEALTH BENEFITS.— fee-for-service program option. description of the benefits covered under parts A ‘‘(A) FEHBP.—An individual who is enrolled ‘‘(ii) SEAMLESS CONTINUATION OF COVERAGE.— and B of the original medicare fee-for-service in a health benefit plan under chapter 89 of title The Secretary may establish procedures under program, including— 5, United States Code, is not eligible to enroll in which an individual who is enrolled in a ‘‘(i) covered items and services; an MSA plan until such time as the Director of Medicare+Choice plan or another health plan ‘‘(ii) beneficiary cost-sharing, such as the Office of Management and Budget certifies (other than a MedicareAdvantage plan) offered deductibles, coinsurance, and copayment to the Secretary that the Office of Personnel by a MedicareAdvantage organization at the amounts; and Management has adopted policies which will en- time of the initial election period and who fails ‘‘(iii) any beneficiary liability for balance bill- sure that the enrollment of such individuals in to elect to receive coverage other than through ing. such plans will not result in increased expendi- the organization is deemed to have elected the ‘‘(B) CATASTROPHIC COVERAGE AND COMBINED tures for the Federal Government for health MedicareAdvantage plan offered by the organi- DEDUCTIBLE.—A description of the catastrophic benefit plans under such chapter. zation (or, if the organization offers more than coverage and unified deductible applicable ‘‘(B) VA AND DOD.—The Secretary may apply 1 such plan, such plan or plans as the Secretary under the plan. rules similar to the rules described in subpara- identifies under such procedures). ‘‘(C) OUTPATIENT PRESCRIPTION DRUG COV- graph (A) in the case of individuals who are eli- ‘‘(B) CONTINUING PERIODS.—An individual ERAGE BENEFITS.—The information required gible for health care benefits under chapter 55 of who has made (or is deemed to have made) an under section 1860D–4 with respect to coverage title 10, United States Code, or under chapter 17 election under this section is considered to have for prescription drugs under the plan. of title 38 of such Code. continued to make such election until such time ‘‘(D) ELECTION PROCEDURES.—Information ‘‘(3) LIMITATION ON ELIGIBILITY OF QUALIFIED as— and instructions on how to exercise election op- MEDICARE BENEFICIARIES AND OTHER MEDICAID ‘‘(i) the individual changes the election under tions under this section. BENEFICIARIES TO ENROLL IN AN MSA PLAN.—An this section; or ‘‘(E) RIGHTS.—A general description of proce- individual who is a qualified medicare bene- ‘‘(ii) the MedicareAdvantage plan with re- dural rights (including grievance and appeals ficiary (as defined in section 1905(p)(1)), a quali- spect to which such election is in effect is dis- procedures) of beneficiaries under the original fied disabled and working individual (described continued or, subject to subsection (b)(1)(B), no medicare fee-for-service program (including such in section 1905(s)), an individual described in longer serves the area in which the individual rights under part D) and the section 1902(a)(10)(E)(iii), or otherwise entitled resides. MedicareAdvantage program and the right to be to medicare cost-sharing under a State plan ‘‘(d) PROVIDING INFORMATION TO PROMOTE protected against discrimination based on under title XIX is not eligible to enroll in an INFORMED CHOICE.— health status-related factors under section MSA plan. ‘‘(1) IN GENERAL.—The Secretary shall provide 1852(b). ‘‘(4) COVERAGE UNDER MSA PLANS ON A DEM- for activities under this subsection to broadly ‘‘(F) INFORMATION ON MEDIGAP AND MEDICARE ONSTRATION BASIS.— disseminate information to medicare bene- SELECT.—A general description of the benefits, ‘‘(A) IN GENERAL.—An individual is not eligi- ficiaries (and prospective medicare beneficiaries) enrollment rights, and other requirements appli- ble to enroll in an MSA plan under this part— on the coverage options provided under this sec- cable to medicare supplemental policies under ‘‘(i) on or after January 1, 2004, unless the en- tion in order to promote an active, informed se- section 1882 and provisions relating to medicare rollment is the continuation of such an enroll- lection among such options. select policies described in section 1882(t). ment in effect as of such date; or ‘‘(2) PROVISION OF NOTICE.— ‘‘(G) POTENTIAL FOR CONTRACT TERMI- ‘‘(ii) as of any date if the number of such indi- ‘‘(A) OPEN SEASON NOTIFICATION.—At least 15 NATION.—The fact that a MedicareAdvantage viduals so enrolled as of such date has reached days before the beginning of each annual, co- organization may terminate its contract, refuse 390,000. ordinated election period (as defined in sub- to renew its contract, or reduce the service area Under rules established by the Secretary, an in- section (e)(3)(B)), the Secretary shall mail to included in its contract, under this part, and dividual is not eligible to enroll (or continue en- each MedicareAdvantage eligible individual re- the effect of such a termination, nonrenewal, or rollment) in an MSA plan for a year unless the siding in an area the following: service area reduction may have on individuals individual provides assurances satisfactory to ‘‘(i) GENERAL INFORMATION.—The general in- enrolled with the MedicareAdvantage plan the Secretary that the individual will reside in formation described in paragraph (3). under this part. NFORMATION COMPARING PLAN OP the United States for at least 183 days during ‘‘(ii) LIST OF PLANS AND COMPARISON OF PLAN ‘‘(4) I - TIONS the year. OPTIONS.—A list identifying the .—Information under this paragraph, with ‘‘(B) EVALUATION.—The Secretary shall regu- MedicareAdvantage plans that are (or will be) respect to a MedicareAdvantage plan for a year, larly evaluate the impact of permitting enroll- available to residents of the area and informa- shall include the following: ment in MSA plans under this part on selection tion described in paragraph (4) concerning such ‘‘(A) BENEFITS.—The benefits covered under (including adverse selection), use of preventive plans. Such information shall be presented in a the plan, including the following: ‘‘(i) Covered items and services beyond those care, access to care, and the financial status of comparative form. provided under the original medicare fee-for- the Trust Funds under this title. ‘‘(iii) ADDITIONAL INFORMATION.—Any other service program option. ‘‘(C) REPORTS.—The Secretary shall submit to information that the Secretary determines will ‘‘(ii) Beneficiary cost-sharing for any items Congress periodic reports on the numbers of in- assist the individual in making the election and services described in clause (i) and para- dividuals enrolled in such plans and on the under this section. evaluation being conducted under subparagraph graph (3)(A)(i), including information on the (B). The mailing of such information shall be coordi- unified deductible under section 1852(a)(1)(C). ‘‘(c) PROCESS FOR EXERCISING CHOICE.— nated, to the extent practicable, with the mail- ‘‘(iii) The maximum limitations on out-of- ‘‘(1) IN GENERAL.—The Secretary shall estab- ing of any annual notice under section 1804. pocket expenses under section 1852(a)(1)(C). lish a process through which elections described ‘‘(B) NOTIFICATION TO NEWLY ELIGIBLE ‘‘(iv) In the case of an MSA plan, differences in subsection (a) are made and changed, includ- MEDICAREADVANTAGE ELIGIBLE INDIVIDUALS.— in cost-sharing, premiums, and balance billing ing the form and manner in which such elec- To the extent practicable, the Secretary shall, under such a plan compared to under other tions are made and changed. Such elections not later than 30 days before the beginning of MedicareAdvantage plans. shall be made or changed only during coverage the initial MedicareAdvantage enrollment pe- ‘‘(v) In the case of a MedicareAdvantage pri- election periods specified under subsection (e) riod for an individual described in subsection vate fee-for-service plan, differences in cost- and shall become effective as provided in sub- (e)(1), mail to the individual the information de- sharing, premiums, and balance billing under section (f). scribed in subparagraph (A). such a plan compared to under other ‘‘(2) COORDINATION THROUGH ‘‘(C) FORM.—The information disseminated MedicareAdvantage plans. MEDICAREADVANTAGE ORGANIZATIONS.— under this paragraph shall be written and for- ‘‘(vi) The extent to which an enrollee may ob- ‘‘(A) ENROLLMENT.—Such process shall permit matted using language that is easily under- tain benefits through out-of-network health an individual who wishes to elect a standable by medicare beneficiaries. care providers. MedicareAdvantage plan offered by a ‘‘(D) PERIODIC UPDATING.—The information ‘‘(vii) The extent to which an enrollee may se- MedicareAdvantage organization to make such described in subparagraph (A) shall be updated lect among in-network providers and the types election through the filing of an appropriate on at least an annual basis to reflect changes in of providers participating in the plan’s network. election form with the organization. the availability of MedicareAdvantage plans, ‘‘(viii) The organization’s coverage of emer- ‘‘(B) DISENROLLMENT.—Such process shall the benefits under such plans, and the gency and urgently needed care. permit an individual, who has elected a MedicareAdvantage monthly basic beneficiary ‘‘(ix) The comparative information described MedicareAdvantage plan offered by a premium, MedicareAdvantage monthly bene- in section 1860D–4(b)(2) relating to prescription MedicareAdvantage organization and who ficiary premium for enhanced medical benefits, drug coverage under the plan. wishes to terminate such election, to terminate and MedicareAdvantage monthly beneficiary ‘‘(B) PREMIUMS.— such election through the filing of an appro- obligation for qualified prescription drug cov- ‘‘(i) IN GENERAL.—The MedicareAdvantage priate election form with the organization. erage for such plans. monthly basic beneficiary premium and ‘‘(3) DEFAULT.— ‘‘(3) GENERAL INFORMATION.—General infor- MedicareAdvantage monthly beneficiary pre- ‘‘(A) INITIAL ELECTION.— mation under this paragraph, with respect to mium for enhanced medical benefits, if any, for ‘‘(i) IN GENERAL.—Subject to clause (ii), an in- coverage under this part during a year, shall in- the plan or, in the case of an MSA plan, the dividual who fails to make an election during clude the following: MedicareAdvantage monthly MSA premium.

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‘‘(ii) REDUCTIONS.—The reduction in part B ‘‘(C) CONTINUOUS OPEN ENROLLMENT AND circumstances (specified by the Secretary, but premiums, if any. DISENROLLMENT FOR FIRST 3 MONTHS IN SUBSE- not including termination of the individual’s en- ‘‘(iii) NATURE OF THE PREMIUM FOR ENHANCED QUENT YEARS.— rollment on the basis described in clause (i) or MEDICAL BENEFITS.—Whether the ‘‘(i) IN GENERAL.—Subject to clause (ii) and (ii) of subsection (g)(3)(B)); MedicareAdvantage monthly premium for en- subparagraph (D), at any time during the first ‘‘(C) the individual demonstrates (in accord- hanced benefits is optional or mandatory. 3 months of 2007 and each subsequent year, or, ance with guidelines established by the Sec- ‘‘(C) SERVICE AREA.—The service area of the if the individual first becomes a retary) that— plan. MedicareAdvantage eligible individual during ‘‘(i) the organization offering the plan sub- ‘‘(D) QUALITY AND PERFORMANCE.—Plan qual- 2007 or any subsequent year, during the first 3 stantially violated a material provision of the ity and performance indicators for the benefits months of such year in which the individual is organization’s contract under this part in rela- under the plan (and how such indicators com- a MedicareAdvantage eligible individual, a tion to the individual (including the failure to pare to quality and performance indicators MedicareAdvantage eligible individual may provide an enrollee on a timely basis medically under the original medicare fee-for-service pro- change the election under subsection (a)(1). necessary care for which benefits are available gram under parts A and B and under the vol- ‘‘(ii) LIMITATION OF 1 CHANGE DURING OPEN under the plan or the failure to provide such untary prescription drug delivery program ENROLLMENT PERIOD EACH YEAR.—An individual covered care in accordance with applicable under part D in the area involved), including— may exercise the right under clause (i) only once quality standards); or ‘‘(i) disenrollment rates for medicare enrollees during the applicable 3-month period described ‘‘(ii) the organization (or an agent or other electing to receive benefits through the plan for in such clause in each year. The limitation entity acting on the organization’s behalf) mate- the previous 2 years (excluding disenrollment under this clause shall not apply to changes in rially misrepresented the plan’s provisions in due to death or moving outside the plan’s serv- elections effected during an annual, coordinated marketing the plan to the individual; or ice area); election period under paragraph (3) or during a ‘‘(D) the individual meets such other excep- ‘‘(ii) information on medicare enrollee satis- special enrollment period under paragraph (4). tional conditions as the Secretary may provide. faction; ‘‘(D) CONTINUOUS OPEN ENROLLMENT FOR IN- ‘‘(iii) information on health outcomes; and Effective on and after January 1, 2006, an indi- STITUTIONALIZED INDIVIDUALS.—At any time ‘‘(iv) the recent record regarding compliance vidual who, upon first becoming eligible for ben- during 2006 or any subsequent year, in the case of the plan with requirements of this part (as efits under part A at age 65, enrolls in a of a MedicareAdvantage eligible individual who determined by the Secretary). MedicareAdvantage plan under this part, the is institutionalized (as defined by the Sec- ‘‘(5) MAINTAINING A TOLL-FREE NUMBER AND individual may discontinue the election of such retary), the individual may elect under sub- INTERNET SITE.—The Secretary shall maintain a plan, and elect coverage under the original fee- section (a)(1)— toll-free number for inquiries regarding for-service plan, at any time during the 12- ‘‘(i) to enroll in a MedicareAdvantage plan; or MedicareAdvantage options and the operation month period beginning on the effective date of ‘‘(ii) to change the MedicareAdvantage plan of this part in all areas in which such enrollment. in which the individual is enrolled. MedicareAdvantage plans are offered and an ‘‘(5) SPECIAL RULES FOR MSA PLANS.—Notwith- ‘‘(3) ANNUAL, COORDINATED ELECTION PE- Internet site through which individuals may standing the preceding provisions of this sub- RIOD.— electronically obtain information on such op- ‘‘(A) IN GENERAL.—Subject to paragraph (5), section, an individual— tions and MedicareAdvantage plans. each individual who is eligible to make an elec- ‘‘(A) may elect an MSA plan only during— ‘‘(6) USE OF NON-FEDERAL ENTITIES.—The Sec- tion under this section may change such elec- ‘‘(i) an initial open enrollment period de- retary may enter into contracts with non-Fed- tion during an annual, coordinated election pe- scribed in paragraph (1); eral entities to carry out activities under this riod. ‘‘(ii) an annual, coordinated election period subsection. ‘‘(B) ANNUAL, COORDINATED ELECTION PE- described in paragraph (3)(B); or ‘‘(7) PROVISION OF INFORMATION.—A ‘‘(iii) the month of November 1998; MedicareAdvantage organization shall provide RIOD.—For purposes of this section, the term ‘annual, coordinated election period’ means, ‘‘(B) subject to subparagraph (C), may not the Secretary with such information on the or- discontinue an election of an MSA plan except ganization and each MedicareAdvantage plan it with respect to a year before 2003 and after 2006, the month of November before such year and during the periods described in clause (ii) or (iii) offers as may be required for the preparation of of subparagraph (A) and under the first sen- the information referred to in paragraph (2)(A). with respect to 2003, 2004, 2005, and 2006, the period beginning on November 15 and ending on tence of paragraph (4); and ‘‘(e) COVERAGE ELECTION PERIODS.— ‘‘(C) who elects an MSA plan during an an- ‘‘(1) INITIAL CHOICE UPON ELIGIBILITY TO December 31 of the year before such year. nual, coordinated election period, and who MAKE ELECTION IF MEDICAREADVANTAGE PLANS ‘‘(C) MEDICAREADVANTAGE HEALTH INFORMA- never previously had elected such a plan, may AVAILABLE TO INDIVIDUAL.—If, at the time an TION FAIRS.—During the fall season of each year revoke such election, in a manner determined by individual first becomes eligible to elect to re- (beginning with 2006), in conjunction with the the Secretary, by not later than December 15 fol- ceive benefits under part B or D (whichever is annual coordinated election period defined in lowing the date of the election. later), there is 1 or more MedicareAdvantage subparagraph (B), the Secretary shall provide ‘‘(6) OPEN ENROLLMENT PERIODS.—Subject to plans offered in the area in which the indi- for a nationally coordinated educational and paragraph (5), a MedicareAdvantage organiza- vidual resides, the individual shall make the publicity campaign to inform tion— election under this section during a period spec- MedicareAdvantage eligible individuals about ‘‘(A) shall accept elections or changes to elec- ified by the Secretary such that if the individual MedicareAdvantage plans and the election proc- tions during the initial enrollment periods de- elects a MedicareAdvantage plan during the pe- ess provided under this section. scribed in paragraph (1), during the period be- riod, coverage under the plan becomes effective ‘‘(D) SPECIAL INFORMATION CAMPAIGN IN ginning on November 15, 2005, and ending on as of the first date on which the individual may 2005.—During the period beginning on November December 31, 2005, and during the annual, co- receive such coverage. 15, 2005, and ending on December 31, 2005, the ordinated election period under paragraph (3) ‘‘(2) OPEN ENROLLMENT AND DISENROLLMENT Secretary shall provide for an educational and for each subsequent year, and during special OPPORTUNITIES.—Subject to paragraph (5), the publicity campaign to inform following rules shall apply: MedicareAdvantage eligible individuals about election periods described in the first sentence of ‘‘(A) CONTINUOUS OPEN ENROLLMENT AND the availability of MedicareAdvantage plans, paragraph (4); and DISENROLLMENT THROUGH 2005.—At any time and eligible organizations with risk-sharing ‘‘(B) may accept other changes to elections at during the period beginning January 1, 1998, contracts under section 1876, offered in different such other times as the organization provides. and ending on December 31, 2005, a areas and the election process provided under ‘‘(f) EFFECTIVENESS OF ELECTIONS AND Medicare+Choice eligible individual may change this section. CHANGES OF ELECTIONS.— the election under subsection (a)(1). ‘‘(4) SPECIAL ELECTION PERIODS.—Effective on ‘‘(1) DURING INITIAL COVERAGE ELECTION PE- ‘‘(B) CONTINUOUS OPEN ENROLLMENT AND and after January 1, 2006, an individual may RIOD.—An election of coverage made during the DISENROLLMENT FOR FIRST 6 MONTHS DURING discontinue an election of a MedicareAdvantage initial coverage election period under subsection 2006.— plan offered by a MedicareAdvantage organiza- (e)(1)(A) shall take effect upon the date the in- ‘‘(i) IN GENERAL.—Subject to clause (ii) and tion other than during an annual, coordinated dividual becomes entitled to (or enrolled for) subparagraph (D), at any time during the first election period and make a new election under benefits under part A, enrolled under part B, 6 months of 2006, or, if the individual first be- this section if— and enrolled under part D, except as the Sec- comes a MedicareAdvantage eligible individual ‘‘(A)(i) the certification of the organization or retary may provide (consistent with sections during 2006, during the first 6 months during plan under this part has been terminated, or the 1838 and 1860D–2)) in order to prevent retro- 2006 in which the individual is a organization or plan has notified the individual active coverage. MedicareAdvantage eligible individual, a of an impending termination of such certifi- ‘‘(2) DURING CONTINUOUS OPEN ENROLLMENT MedicareAdvantage eligible individual may cation; or PERIODS.—An election or change of coverage change the election under subsection (a)(1). ‘‘(ii) the organization has terminated or other- made under subsection (e)(2) shall take effect ‘‘(ii) LIMITATION OF 1 CHANGE.—An individual wise discontinued providing the plan in the area with the first day of the first calendar month may exercise the right under clause (i) only in which the individual resides, or has notified following the date on which the election or once. The limitation under this clause shall not the individual of an impending termination or change is made. apply to changes in elections effected during an discontinuation of such plan; ‘‘(3) ANNUAL, COORDINATED ELECTION PE- annual, coordinated election period under para- ‘‘(B) the individual is no longer eligible to RIOD.—An election or change of coverage made graph (3) or during a special enrollment period elect the plan because of a change in the indi- during an annual, coordinated election period under the first sentence of paragraph (4). vidual’s place of residence or other change in (as defined in subsection (e)(3)(B)) in a year

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shall take effect as of the first day of the fol- (at such time and in such manner as the Sec- ‘‘(1) IN GENERAL.—Except as provided in sec- lowing year. retary may specify) a copy of such form or such tion 1859(b)(3) for MSA plans, each ‘‘(4) OTHER PERIODS.—An election or change other information respecting the election as the MedicareAdvantage plan shall provide to mem- of coverage made during any other period under Secretary may specify. bers enrolled under this part, through providers subsection (e)(4) shall take effect in such man- ‘‘(h) APPROVAL OF MARKETING MATERIAL AND and other persons that meet the applicable re- ner as the Secretary provides in a manner con- APPLICATION FORMS.— quirements of this title and part A of title XI— sistent (to the extent practicable) with pro- ‘‘(1) SUBMISSION.—No marketing material or ‘‘(A) those items and services (other than hos- tecting continuity of health benefit coverage. application form may be distributed by a pice care) for which benefits are available under ‘‘(g) GUARANTEED ISSUE AND RENEWAL.— MedicareAdvantage organization to (or for the parts A and B to individuals residing in the ‘‘(1) IN GENERAL.—Except as provided in this use of) MedicareAdvantage eligible individuals area served by the plan; subsection, a MedicareAdvantage organization unless— ‘‘(B) except as provided in paragraph (2)(D), shall provide that at any time during which ‘‘(A) at least 45 days (or 10 days in the case qualified prescription drug coverage under part elections are accepted under this section with described in paragraph (5)) before the date of D to individuals residing in the area served by respect to a MedicareAdvantage plan offered by distribution the organization has submitted the the plan; the organization, the organization will accept material or form to the Secretary for review; and ‘‘(C) a maximum limitation on out-of-pocket without restrictions individuals who are eligible ‘‘(B) the Secretary has not disapproved the expenses and a unified deductible; and to make such election. distribution of such material or form. ‘‘(D) additional benefits required under sec- EVIEW ‘‘(2) PRIORITY.—If the Secretary determines ‘‘(2) R .—The standards established tion 1854(d)(1). that a MedicareAdvantage organization, in re- under section 1856 shall include guidelines for ‘‘(2) SATISFACTION OF REQUIREMENT.— lation to a MedicareAdvantage plan it offers, the review of any material or form submitted ‘‘(A) IN GENERAL.—A MedicareAdvantage has a capacity limit and the number of and under such guidelines the Secretary shall plan (other than an MSA plan) offered by a MedicareAdvantage eligible individuals who disapprove (or later require the correction of) MedicareAdvantage organization satisfies para- elect the plan under this section exceeds the ca- such material or form if the material or form is graph (1)(A), with respect to benefits for items pacity limit, the organization may limit the elec- materially inaccurate or misleading or otherwise and services furnished other than through a tion of individuals of the plan under this section makes a material misrepresentation. provider or other person that has a contract ‘‘(3) DEEMED APPROVAL (1-STOP SHOPPING).— but only if priority in election is provided— with the organization offering the plan, if the In the case of material or form that is submitted ‘‘(A) first to such individuals as have elected plan provides payment in an amount so that— under paragraph (1)(A) to the Secretary or a re- the plan at the time of the determination; and ‘‘(i) the sum of such payment amount and any gional office of the Department of Health and ‘‘(B) then to other such individuals in such a cost-sharing provided for under the plan; is Human Services and the Secretary or the office manner that does not discriminate, on a basis equal to at least has not disapproved the distribution of mar- described in section 1852(b), among the individ- ‘‘(ii) the total dollar amount of payment for keting material or form under paragraph (1)(B) uals (who seek to elect the plan). such items and services as would otherwise be with respect to a MedicareAdvantage plan in an authorized under parts A and B (including any The preceding sentence shall not apply if it area, the Secretary is deemed not to have dis- balance billing permitted under such parts). would result in the enrollment of enrollees sub- approved such distribution in all other areas ‘‘(B) REFERENCE TO RELATED PROVISIONS.— stantially nonrepresentative, as determined in covered by the plan and organization except For provisions relating to— accordance with regulations of the Secretary, of with regard to that portion of such material or ‘‘(i) limitations on balance billing against the medicare population in the service area of form that is specific only to an area involved. MedicareAdvantage organizations for noncon- the plan. ‘‘(4) PROHIBITION OF CERTAIN MARKETING tract providers, see sections 1852(k) and ‘‘(3) LIMITATION ON TERMINATION OF ELEC- PRACTICES.—Each MedicareAdvantage organi- 1866(a)(1)(O); and TION.— zation shall conform to fair marketing stand- ‘‘(ii) limiting actuarial value of enrollee liabil- ‘‘(A) IN GENERAL.—Subject to subparagraph ards, in relation to MedicareAdvantage plans ity for covered benefits, see section 1854(f). (B), a MedicareAdvantage organization may not offered under this part, included in the stand- ‘‘(C) ELECTION OF UNIFORM COVERAGE POL- for any reason terminate the election of any in- ards established under section 1856. Such stand- ICY.—In the case of a MedicareAdvantage orga- dividual under this section for a ards— nization that offers a MedicareAdvantage plan MedicareAdvantage plan it offers. ‘‘(A) shall not permit a MedicareAdvantage in an area in which more than 1 local coverage ‘‘(B) BASIS FOR TERMINATION OF ELECTION.—A organization to provide for cash or other mone- policy is applied with respect to different parts MedicareAdvantage organization may terminate tary rebates as an inducement for enrollment or of the area, the organization may elect to have an individual’s election under this section with otherwise (other than as an additional benefit the local coverage policy for the part of the area respect to a MedicareAdvantage plan it offers described in section 1854(g)(1)(C)(i)); and that is most beneficial to MedicareAdvantage if— ‘‘(B) may include a prohibition against a enrollees (as identified by the Secretary) apply ‘‘(i) any MedicareAdvantage monthly basic MedicareAdvantage organization (or agent of with respect to all MedicareAdvantage enrollees beneficiary premium, MedicareAdvantage such an organization) completing any portion of enrolled in the plan. monthly beneficiary obligation for qualified pre- any election form used to carry out elections ‘‘(D) SPECIAL RULE FOR PRIVATE FEE-FOR- scription drug coverage, or MedicareAdvantage under this section on behalf of any individual. SERVICE PLANS.— monthly beneficiary premium for required or op- ‘‘(5) SPECIAL TREATMENT OF MARKETING MATE- ‘‘(i) IN GENERAL.—A private fee-for-service tional enhanced medical benefits required with RIAL FOLLOWING MODEL MARKETING LAN- plan may elect not to provide qualified prescrip- respect to such plan are not paid on a timely GUAGE.—In the case of marketing material of an tion drug coverage under part D to individuals basis (consistent with standards under section organization that uses, without modification, residing in the area served by the plan. 1856 that provide for a grace period for late pay- proposed model language specified by the Sec- ‘‘(ii) AVAILABILITY OF DRUG COVERAGE FOR ment of such premiums); retary, the period specified in paragraph (1)(A) ENROLLEES.—If a beneficiary enrolls in a plan ‘‘(ii) the individual has engaged in disruptive shall be reduced from 45 days to 10 days. making the election described in clause (i), the behavior (as specified in such standards); or ‘‘(i) EFFECT OF ELECTION OF beneficiary may enroll for drug coverage under ‘‘(iii) the plan is terminated with respect to all MEDICAREADVANTAGE PLAN OPTION.— part D with an eligible entity under such part. individuals under this part in the area in which ‘‘(1) PAYMENTS TO ORGANIZATIONS.—Subject to ‘‘(3) ENHANCED MEDICAL BENEFITS.— the individual resides. sections 1852(a)(5), 1853(h), 1853(i), 1886(d)(11), ‘‘(A) BENEFITS INCLUDED SUBJECT TO SEC- ‘‘(C) CONSEQUENCE OF TERMINATION.— and 1886(h)(3)(D), payments under a contract RETARY’S APPROVAL.—Each MedicareAdvantage ‘‘(i) TERMINATIONS FOR CAUSE.—Any indi- with a MedicareAdvantage organization under organization may provide to individuals en- vidual whose election is terminated under clause section 1853(a) with respect to an individual rolled under this part, other than under an (i) or (ii) of subparagraph (B) is deemed to have electing a MedicareAdvantage plan offered by MSA plan (without affording those individuals elected to receive benefits under the original the organization shall be instead of the amounts an option to decline the coverage), enhanced medicare fee-for-service program option. which (in the absence of the contract) would medical benefits that the Secretary may ap- ‘‘(ii) TERMINATION BASED ON PLAN TERMI- otherwise be payable under parts A, B, and D prove. The Secretary shall approve any such en- NATION OR SERVICE AREA REDUCTION.—Any indi- for items and services furnished to the indi- hanced medical benefits unless the Secretary de- vidual whose election is terminated under sub- vidual. termines that including such enhanced medical paragraph (B)(iii) shall have a special election ‘‘(2) ONLY ORGANIZATION ENTITLED TO PAY- benefits would substantially discourage enroll- period under subsection (e)(4)(A) in which to MENT.—Subject to sections 1853(f), 1853(h), ment by MedicareAdvantage eligible individuals change coverage to coverage under another 1853(i), 1857(f)(2), 1886(d)(11), and 1886(h)(3)(D), with the organization. MedicareAdvantage plan. Such an individual only the MedicareAdvantage organization shall ‘‘(B) AT ENROLLEES’ OPTION.—A who fails to make an election during such pe- be entitled to receive payments from the Sec- MedicareAdvantage organization may not pro- riod is deemed to have chosen to change cov- retary under this title for services furnished to vide, under an MSA plan, enhanced medical erage to the original medicare fee-for-service the individual.’’. benefits that cover the deductible described in program option. SEC. 202. BENEFITS AND BENEFICIARY PROTEC- section 1859(b)(2)(B). In applying the previous ‘‘(D) ORGANIZATION OBLIGATION WITH RESPECT TIONS. sentence, health benefits described in section TO ELECTION FORMS.—Pursuant to a contract Section 1852 (42 U.S.C. 1395w–22) is amended 1882(u)(2)(B) shall not be treated as covering under section 1857858., each MedicareAdvantage to read as follows: such deductible. organization receiving an election form under ‘‘BENEFITS AND BENEFICIARY PROTECTIONS ‘‘(C) APPLICATION TO MEDICAREADVANTAGE subsection (c)(2) shall transmit to the Secretary ‘‘SEC. 1852. (a) BASIC BENEFITS.— PRIVATE FEE-FOR-SERVICE PLANS.—Nothing in

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this paragraph shall be construed as preventing ‘‘(A) IN GENERAL.—A MedicareAdvantage or- ‘‘(2) DISCLOSURE UPON REQUEST.—Upon re- a MedicareAdvantage private fee-for-service ganization may not deny, limit, or condition the quest of a MedicareAdvantage eligible indi- plan from offering enhanced medical benefits coverage or provision of benefits under this part, vidual, a MedicareAdvantage organization must that include payment for some or all of the bal- for individuals permitted to be enrolled with the provide the following information to such indi- ance billing amounts permitted consistent with organization under this part, based on any vidual: section 1852(k) and coverage of additional serv- health status-related factor described in section ‘‘(A) The general coverage information and ices that the plan finds to be medically nec- 2702(a)(1) of the Public Health Service Act. general comparative plan information made essary. ‘‘(B) CONSTRUCTION.—Except as provided available under clauses (i) and (ii) of section ‘‘(D) RULE FOR APPROVAL OF MEDICAL AND under section 1851(a)(3)(B), subparagraph (A) 1851(d)(2)(A). PRESCRIPTION DRUG BENEFITS.—Notwithstanding shall not be construed as requiring a ‘‘(B) Information on procedures used by the the preceding provisions of this paragraph, the MedicareAdvantage organization to enroll indi- organization to control utilization of services Secretary may not approve any enhanced med- viduals who are determined to have end-stage and expenditures. ical benefit that provides for the coverage of any renal disease. ‘‘(C) Information on the number of grievances, prescription drug (other than that relating to ‘‘(2) PROVIDERS.—A MedicareAdvantage orga- reconsiderations, and appeals and on the dis- prescription drugs covered under the original nization shall not discriminate with respect to position in the aggregate of such matters. medicare fee-for-service program option). participation, reimbursement, or indemnification ‘‘(D) An overall summary description as to the ‘‘(4) ORGANIZATION AS SECONDARY PAYER.— as to any provider who is acting within the method of compensation of participating physi- Notwithstanding any other provision of law, a scope of the provider’s license or certification cians. MedicareAdvantage organization may (in the under applicable State law, solely on the basis ‘‘(E) The information described in subpara- case of the provision of items and services to an of such license or certification. This paragraph graphs (A) through (C) in relation to the quali- individual under a MedicareAdvantage plan shall not be construed to prohibit a plan from fied prescription drug coverage provided by the under circumstances in which payment under including providers only to the extent necessary organization. this title is made secondary pursuant to section to meet the needs of the plan’s enrollees or from ‘‘(d) ACCESS TO SERVICES.— 1862(b)(2)) charge or authorize the provider of establishing any measure designed to maintain ‘‘(1) IN GENERAL.—A MedicareAdvantage or- such services to charge, in accordance with the quality and control costs consistent with the re- ganization offering a MedicareAdvantage plan charges allowed under a law, plan, or policy de- sponsibilities of the plan. may select the providers from whom the benefits scribed in such section— ‘‘(c) DISCLOSURE REQUIREMENTS.— under the plan are provided so long as— ‘‘(A) the insurance carrier, employer, or other ‘‘(1) DETAILED DESCRIPTION OF PLAN PROVI- ‘‘(A) the organization makes such benefits entity which under such law, plan, or policy is SIONS.—A MedicareAdvantage organization available and accessible to each individual to pay for the provision of such services; or shall disclose, in clear, accurate, and standard- electing the plan within the plan service area ‘‘(B) such individual to the extent that the in- ized form to each enrollee with a with reasonable promptness and in a manner dividual has been paid under such law, plan, or MedicareAdvantage plan offered by the organi- which assures continuity in the provision of policy for such services. zation under this part at the time of enrollment benefits; ‘‘(5) NATIONAL COVERAGE DETERMINATIONS and at least annually thereafter, the following ‘‘(B) when medically necessary the organiza- AND LEGISLATIVE CHANGES IN BENEFITS.—If there information regarding such plan: tion makes such benefits available and acces- is a national coverage determination or legisla- ‘‘(A) SERVICE AREA.—The plan’s service area. sible 24 hours a day and 7 days a week; tive change in benefits required to be provided ‘‘(B) BENEFITS.—Benefits offered under the ‘‘(C) the plan provides for reimbursement with under this part made in the period beginning on plan, including information described section respect to services which are covered under sub- the date of an announcement under section 1852(a)(1) (relating to benefits under the original paragraphs (A) and (B) and which are provided 1853(b) and ending on the date of the next an- medicare fee-for-service program option, the to such an individual other than through the nouncement under such section and the Sec- maximum limitation in out-of-pocket expenses organization, if— retary projects that the determination will result and the unified deductible, and qualified pre- ‘‘(i) the services were not emergency services in a significant change in the costs to a scription drug coverage under part D, respec- (as defined in paragraph (3)), but— ‘‘(I) the services were medically necessary and MedicareAdvantage organization of providing tively) and exclusions from coverage and, if it is immediately required because of an unforeseen the benefits that are the subject of such na- an MSA plan, a comparison of benefits under illness, injury, or condition; and tional coverage determination and that such such a plan with benefits under other ‘‘(II) it was not reasonable given the cir- change in costs was not incorporated in the de- MedicareAdvantage plans. cumstances to obtain the services through the termination of the benchmark amount an- ‘‘(C) ACCESS.—The number, mix, and distribu- organization; nounced under section 1853(b)(1)(A) at the be- tion of plan providers, out-of-network coverage ‘‘(ii) the services were renal dialysis services ginning of such period, then, unless otherwise (if any) provided by the plan, and any point-of- and were provided other than through the orga- required by law— service option (including the nization because the individual was temporarily ‘‘(A) such determination or legislative change MedicareAdvantage monthly beneficiary pre- out of the plan’s service area; or in benefits shall not apply to contracts under mium for enhanced medical benefits for such op- ‘‘(iii) the services are maintenance care or this part until the first contract year that begins tion). post-stabilization care covered under the guide- after the end of such period; and ‘‘(D) OUT-OF-AREA COVERAGE.—Out-of-area coverage provided by the plan. lines established under paragraph (2); ‘‘(B) if such coverage determination or legisla- ‘‘(D) the organization provides access to ap- tive change provides for coverage of additional ‘‘(E) EMERGENCY COVERAGE.—Coverage of emergency services, including— propriate providers, including credentialed spe- benefits or coverage under additional cir- cialists, for medically necessary treatment and cumstances, section 1851(i)(1) shall not apply to ‘‘(i) the appropriate use of emergency services, including use of the 911 telephone system or its services; and payment for such additional benefits or benefits ‘‘(E) coverage is provided for emergency serv- provided under such additional circumstances local equivalent in emergency situations and an explanation of what constitutes an emergency ices (as defined in paragraph (3)) without re- until the first contract year that begins after the gard to prior authorization or the emergency end of such period. situation; ‘‘(ii) the process and procedures of the plan care provider’s contractual relationship with the The projection under the previous sentence shall for obtaining emergency services; and organization. be based on an analysis by the Secretary of the ‘‘(iii) the locations of— ‘‘(2) GUIDELINES RESPECTING COORDINATION OF actuarial costs associated with the coverage de- ‘‘(I) emergency departments; and POST-STABILIZATION CARE.—A termination or legislative change in benefits. ‘‘(II) other settings, in which plan physicians MedicareAdvantage plan shall comply with ‘‘(6) AUTHORITY TO PROHIBIT RISK SELEC- and hospitals provide emergency services and such guidelines as the Secretary may prescribe TION.—The Secretary shall have the authority post-stabilization care. relating to promoting efficient and timely co- to disapprove any MedicareAdvantage plan that ‘‘(F) ENHANCED MEDICAL BENEFITS.—En- ordination of appropriate maintenance and the Secretary determines is designed to attract a hanced medical benefits available from the orga- post-stabilization care of an enrollee after the population that is healthier than the average nization offering the plan, including— enrollee has been determined to be stable under population residing in the service area of the ‘‘(i) whether the enhanced medical benefits section 1867. plan. are optional; ‘‘(3) DEFINITION OF EMERGENCY SERVICES.—In ‘‘(7) UNIFIED DEDUCTIBLE DEFINED.—In this ‘‘(ii) the enhanced medical benefits covered; this subsection— part, the term ‘unified deductible’ means an an- and ‘‘(A) IN GENERAL.—The term ‘emergency serv- nual deductible amount that is applied in lieu of ‘‘(iii) the MedicareAdvantage monthly bene- ices’ means, with respect to an individual en- the inpatient hospital deductible under section ficiary premium for enhanced medical benefits. rolled with an organization, covered inpatient 1813(b)(1) and the deductible under section ‘‘(G) PRIOR AUTHORIZATION RULES.—Rules re- and outpatient services that— 1833(b). Nothing in this part shall be construed garding prior authorization or other review re- ‘‘(i) are furnished by a provider that is quali- as preventing a MedicareAdvantage organiza- quirements that could result in nonpayment. fied to furnish such services under this title; and tion from requiring coinsurance or a copayment ‘‘(H) PLAN GRIEVANCE AND APPEALS PROCE- ‘‘(ii) are needed to evaluate or stabilize an for inpatient hospital services after the unified DURES.—All plan appeal or grievance rights and emergency medical condition (as defined in sub- deductible is satisfied, subject to the limitation procedures. paragraph (B)). on enrollee liability under section 1854(f). ‘‘(I) QUALITY ASSURANCE PROGRAM.—A de- ‘‘(B) EMERGENCY MEDICAL CONDITION BASED ‘‘(b) ANTIDISCRIMINATION.— scription of the organization’s quality assurance ON PRUDENT LAYPERSON.—The term ‘emergency ‘‘(1) BENEFICIARIES.— program under subsection (e). medical condition’ means a medical condition

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00058 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8927 manifesting itself by acute symptoms of suffi- to monitor and ensure the quality of care pro- termined assures that the accrediting organiza- cient severity (including severe pain) such that vided under this part; tion applies and enforces standards that meet or a prudent layperson, who possesses an average ‘‘(ix) provide review by physicians and other exceed the standards established under section knowledge of health and medicine, could rea- health care professionals of the process followed 1856 to carry out the requirements in such sonably expect the absence of immediate medical in the provision of such health care services; clause. attention to result in— ‘‘(x) provide for the establishment of written ‘‘(B) REQUIREMENTS DESCRIBED.—The provi- ‘‘(i) placing the health of the individual (or, protocols for utilization review, based on cur- sions described in this subparagraph are the fol- with respect to a pregnant woman, the health of rent standards of medical practice; lowing: the woman or her unborn child) in serious jeop- ‘‘(xi) have mechanisms to detect both under- ‘‘(i) Paragraphs (1) and (2) of this subsection ardy; utilization and overutilization of services; (relating to quality assurance programs). ‘‘(ii) serious impairment to bodily functions; ‘‘(xii) after identifying areas for improvement, ‘‘(ii) Subsection (b) (relating to antidiscrimi- or establish or alter practice parameters; nation). ‘‘(iii) serious dysfunction of any bodily organ ‘‘(xiii) take action to improve quality and as- ‘‘(iii) Subsection (d) (relating to access to serv- or part. sesses the effectiveness of such action through ices). ‘‘(4) ASSURING ACCESS TO SERVICES IN systematic followup; and ‘‘(iv) Subsection (h) (relating to confiden- MEDICAREADVANTAGE PRIVATE FEE-FOR-SERVICE ‘‘(xiv) make available information on quality tiality and accuracy of enrollee records). PLANS.—In addition to any other requirements and outcomes measures to facilitate beneficiary ‘‘(v) Subsection (i) (relating to information on under this part, in the case of a comparison and choice of health coverage op- advance directives). MedicareAdvantage private fee-for-service plan, tions (in such form and on such quality and ‘‘(vi) Subsection (j) (relating to provider par- the organization offering the plan must dem- outcomes measures as the Secretary determines ticipation rules). onstrate to the Secretary that the organization to be appropriate). ‘‘(C) TIMELY ACTION ON APPLICATIONS.—The Secretary shall determine, within 210 days after has sufficient number and range of health care Such program shall include a separate focus the date the Secretary receives an application professionals and providers willing to provide (with respect to all the elements described in this by a private accrediting organization and using services under the terms of the plan. The Sec- subparagraph) on racial and ethnic minorities. the criteria specified in section 1865(b)(2), retary shall find that an organization has met ‘‘(B) ELEMENTS OF PROGRAM FOR ORGANIZA- whether the process of the private accrediting such requirement with respect to any category TIONS OFFERING MEDICAREADVANTAGE PRIVATE organization meets the requirements with re- of health care professional or provider if, with FEE-FOR-SERVICE PLANS, AND NONNETWORK MSA spect to any specific clause in subparagraph (B) respect to that category of provider— PLANS.—The quality assurance program of an with respect to which the application is made. ‘‘(A) the plan has established payment rates organization with respect to a The Secretary may not deny such an applica- for covered services furnished by that category MedicareAdvantage private fee-for-service plan tion on the basis that it seeks to meet the re- of provider that are not less than the payment or a nonnetwork MSA plan it offers shall— rates provided for under part A, B, or D for ‘‘(i) meet the requirements of clauses (i) quirements with respect to only one, or more such services; or through (viii) of subparagraph (A); than one, such specific clause. ‘‘(D) CONSTRUCTION.—Nothing in this para- ‘‘(B) the plan has contracts or agreements ‘‘(ii) insofar as it provides for the establish- graph shall be construed as limiting the author- (other than deemed contracts or agreements ment of written protocols for utilization review, ity of the Secretary under section 1857, includ- under subsection (j)(6), with a sufficient number base such protocols on current standards of ing the authority to terminate contracts with and range of providers within such category to medical practice; and MedicareAdvantage organizations under sub- provide covered services under the terms of the ‘‘(iii) have mechanisms to evaluate utilization section (c)(2) of such section. plan, of services and inform providers and enrollees of ‘‘(5) REPORT TO CONGRESS.— the results of such evaluation. or a combination of both. The previous sentence ‘‘(A) IN GENERAL.—The Secretary shall submit shall not be construed as restricting the persons Such program shall include a separate focus to Congress a biennial report regarding how from whom enrollees under such a plan may ob- (with respect to all the elements described in this quality assurance programs conducted under tain covered benefits, except that, if a plan en- subparagraph) on racial and ethnic minorities. this subsection focus on racial and ethnic mi- tirely meets such requirement with respect to a ‘‘(C) DEFINITION OF NONNETWORK MSA PLAN.— norities. category of health care professional or provider In this subsection, the term ‘nonnetwork MSA ‘‘(B) CONTENTS OF REPORT.—Each such report on the basis of subparagraph (B), it may provide plan’ means an MSA plan offered by a shall include the following: for a higher beneficiary copayment in the case MedicareAdvantage organization that does not ‘‘(i) A description of the means by which such of health care professionals and providers of provide benefits required to be provided by this programs focus on such racial and ethnic mi- that category who do not have contracts or part, in whole or in part, through a defined set norities. agreements (other than deemed contracts or of providers under contract, or under another ‘‘(ii) An evaluation of the impact of such pro- agreements under subsection (j)(6)) to provide arrangement, with the organization. grams on eliminating health disparities and on covered services under the terms of the plan. ‘‘(3) EXTERNAL REVIEW.— improving health outcomes, continuity and co- ‘‘(e) QUALITY ASSURANCE PROGRAM.— ‘‘(A) IN GENERAL.—Each MedicareAdvantage ordination of care, management of chronic con- ‘‘(1) IN GENERAL.—Each MedicareAdvantage organization shall, for each MedicareAdvantage ditions, and consumer satisfaction. organization must have arrangements, con- plan it operates, have an agreement with an ‘‘(iii) Recommendations on ways to reduce sistent with any regulation, for an ongoing independent quality review and improvement or- clinical outcome disparities among racial and quality assurance program for health care serv- ganization approved by the Secretary to perform ethnic minorities. ices it provides to individuals enrolled with functions of the type described in paragraphs ‘‘(f) GRIEVANCE MECHANISM.—Each MedicareAdvantage plans of the organization. (4)(B) and (14) of section 1154(a) with respect to MedicareAdvantage organization must provide ‘‘(2) ELEMENTS OF PROGRAM.— services furnished by MedicareAdvantage plans meaningful procedures for hearing and resolv- ‘‘(A) IN GENERAL.—The quality assurance pro- for which payment is made under this title. The ing grievances between the organization (in- gram of an organization with respect to a previous sentence shall not apply to a cluding any entity or individual through which MedicareAdvantage plan (other than a MedicareAdvantage private fee-for-service plan the organization provides health care services) MedicareAdvantage private fee-for-service plan or a nonnetwork MSA plan that does not em- and enrollees with MedicareAdvantage plans of or a nonnetwork MSA plan) it offers shall— ploy utilization review. the organization under this part. ‘‘(i) stress health outcomes and provide for the ‘‘(B) NONDUPLICATION OF ACCREDITATION.— ‘‘(g) COVERAGE DETERMINATIONS, RECONSID- collection, analysis, and reporting of data (in Except in the case of the review of quality com- ERATIONS, AND APPEALS.— accordance with a quality measurement system plaints, and consistent with subparagraph (C), ‘‘(1) DETERMINATIONS BY ORGANIZATION.— that the Secretary recognizes) that will permit the Secretary shall ensure that the external re- ‘‘(A) IN GENERAL.—A MedicareAdvantage or- measurement of outcomes and other indices of view activities conducted under subparagraph ganization shall have a procedure for making the quality of MedicareAdvantage plans and or- (A) are not duplicative of review activities con- determinations regarding whether an individual ganizations; ducted as part of the accreditation process. enrolled with the plan of the organization under ‘‘(ii) monitor and evaluate high volume and ‘‘(C) WAIVER AUTHORITY.—The Secretary may this part is entitled to receive a health service high risk services and the care of acute and waive the requirement described in subpara- under this section and the amount (if any) that chronic conditions; graph (A) in the case of an organization if the the individual is required to pay with respect to ‘‘(iii) provide access to disease management Secretary determines that the organization has such service. Subject to paragraph (3), such pro- and chronic care services; consistently maintained an excellent record of cedures shall provide for such determination to ‘‘(iv) provide access to preventive benefits and quality assurance and compliance with other re- be made on a timely basis. information for enrollees on such benefits; quirements under this part. ‘‘(B) EXPLANATION OF DETERMINATION.—Such ‘‘(v) evaluate the continuity and coordination ‘‘(4) TREATMENT OF ACCREDITATION.— a determination that denies coverage, in whole of care that enrollees receive; ‘‘(A) IN GENERAL.—The Secretary shall pro- or in part, shall be in writing and shall include ‘‘(vi) be evaluated on an ongoing basis as to vide that a MedicareAdvantage organization is a statement in understandable language of the its effectiveness; deemed to meet all the requirements described in reasons for the denial and a description of the ‘‘(vii) include measures of consumer satisfac- any specific clause of subparagraph (B) if the reconsideration and appeals processes. tion; organization is accredited (and periodically re- ‘‘(2) RECONSIDERATIONS.— ‘‘(viii) provide the Secretary with such access accredited) by a private accrediting organiza- ‘‘(A) IN GENERAL.—The organization shall to information collected as may be appropriate tion under a process that the Secretary has de- provide for reconsideration of a determination

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described in paragraph (1)(B) upon request by cial review. In applying subsections (b) and (g) ‘‘(D) HEALTH CARE PROFESSIONAL DEFINED.— the enrollee involved. The reconsideration shall of section 205 as provided in this paragraph, For purposes of this paragraph, the term ‘health be within a time period specified by the Sec- and in applying section 205(l) thereto, any ref- care professional’ means a physician (as defined retary, but shall be made, subject to paragraph erence therein to the Commissioner of Social Se- in section 1861(r)) or other health care profes- (3), not later than 60 days after the date of the curity or the Social Security Administration sional if coverage for the professional’s services receipt of the request for reconsideration. shall be considered a reference to the Secretary is provided under the MedicareAdvantage plan ‘‘(B) PHYSICIAN DECISION ON CERTAIN RECON- or the Department of Health and Human Serv- for the services of the professional. Such term SIDERATIONS.—A reconsideration relating to a ices, respectively. includes a podiatrist, optometrist, chiropractor, determination to deny coverage based on a lack ‘‘(h) CONFIDENTIALITY AND ACCURACY OF EN- psychologist, dentist, licensed pharmacist, phy- of medical necessity shall be made only by a ROLLEE RECORDS.—Insofar as a sician assistant, physical or occupational thera- physician with appropriate expertise in the field MedicareAdvantage organization maintains pist and therapy assistant, speech-language pa- of medicine which necessitates treatment who is medical records or other health information re- thologist, audiologist, registered or licensed other than a physician involved in the initial garding enrollees under this part, the practical nurse (including nurse practitioner, determination. MedicareAdvantage organization shall establish clinical nurse specialist, certified registered ‘‘(3) EXPEDITED DETERMINATIONS AND RECON- procedures— nurse anesthetist, and certified nurse-midwife), SIDERATIONS.— ‘‘(1) to safeguard the privacy of any individ- licensed certified social worker, registered res- ‘‘(A) RECEIPT OF REQUESTS.— ually identifiable enrollee information; piratory therapist, and certified respiratory ‘‘(i) ENROLLEE REQUESTS.—An enrollee in a ‘‘(2) to maintain such records and information therapy technician. MedicareAdvantage plan may request, either in in a manner that is accurate and timely; and ‘‘(4) LIMITATIONS ON PHYSICIAN INCENTIVE writing or orally, an expedited determination ‘‘(3) to assure timely access of enrollees to PLANS.— under paragraph (1) or an expedited reconsider- such records and information. ‘‘(A) IN GENERAL.—No MedicareAdvantage or- ation under paragraph (2) by the ‘‘(i) INFORMATION ON ADVANCE DIRECTIVES.— ganization may operate any physician incentive MedicareAdvantage organization. Each MedicareAdvantage organization shall plan (as defined in subparagraph (B)) unless ‘‘(ii) PHYSICIAN REQUESTS.—A physician, re- meet the requirement of section 1866(f) (relating the following requirements are met: gardless whether the physician is affiliated with to maintaining written policies and procedures ‘‘(i) No specific payment is made directly or the organization or not, may request, either in respecting advance directives). indirectly under the plan to a physician or phy- writing or orally, such an expedited determina- ‘‘(j) RULES REGARDING PROVIDER PARTICIPA- sician group as an inducement to reduce or limit tion or reconsideration. TION.— medically necessary services provided with re- ‘‘(B) ORGANIZATION PROCEDURES.— ‘‘(1) PROCEDURES.—Insofar as a spect to a specific individual enrolled with the ‘‘(i) IN GENERAL.—The MedicareAdvantage or- MedicareAdvantage organization offers benefits organization. ganization shall maintain procedures for expe- under a MedicareAdvantage plan through ‘‘(ii) If the plan places a physician or physi- diting organization determinations and recon- agreements with physicians, the organization cian group at substantial financial risk (as de- siderations when, upon request of an enrollee, shall establish reasonable procedures relating to termined by the Secretary) for services not pro- the organization determines that the application the participation (under an agreement between vided by the physician or physician group, the of the normal timeframe for making a deter- a physician and the organization) of physicians organization— mination (or a reconsideration involving a de- under such a plan. Such procedures shall in- ‘‘(I) provides stop-loss protection for the phy- termination) could seriously jeopardize the life clude— sician or group that is adequate and appro- or health of the enrollee or the enrollee’s ability ‘‘(A) providing notice of the rules regarding priate, based on standards developed by the Sec- to regain maximum function. participation; retary that take into account the number of ‘‘(ii) EXPEDITION REQUIRED FOR PHYSICIAN RE- ‘‘(B) providing written notice of participation physicians placed at such substantial financial QUESTS.—In the case of a request for an expe- decisions that are adverse to physicians; and risk in the group or under the plan and the dited determination or reconsideration made ‘‘(C) providing a process within the organiza- number of individuals enrolled with the organi- under subparagraph (A)(ii), the organization tion for appealing such adverse decisions, in- zation who receive services from the physician shall expedite the determination or reconsider- cluding the presentation of information and or group; and ation if the request indicates that the applica- views of the physician regarding such decision. ‘‘(II) conducts periodic surveys of both indi- tion of the normal timeframe for making a deter- ‘‘(2) CONSULTATION IN MEDICAL POLICIES.—A viduals enrolled and individuals previously en- mination (or a reconsideration involving a de- MedicareAdvantage organization shall consult rolled with the organization to determine the determination) could seriously jeopardize the life with physicians who have entered into partici- gree of access of such individuals to services or health of the enrollee or the enrollee’s ability pation agreements with the organization regard- provided by the organization and satisfaction to regain maximum function. ing the organization’s medical policy, quality, with the quality of such services. ‘‘(iii) TIMELY RESPONSE.—In cases described in and medical management procedures. ‘‘(iii) The organization provides the Secretary clauses (i) and (ii), the organization shall notify ‘‘(3) PROHIBITING INTERFERENCE WITH PRO- with descriptive information regarding the plan, the enrollee (and the physician involved, as ap- VIDER ADVICE TO ENROLLEES.— sufficient to permit the Secretary to determine propriate) of the determination or reconsider- ‘‘(A) IN GENERAL.—Subject to subparagraphs whether the plan is in compliance with the re- ation under time limitations established by the (B) and (C), a MedicareAdvantage organization quirements of this subparagraph. Secretary, but not later than 72 hours of the (in relation to an individual enrolled under a ‘‘(B) PHYSICIAN INCENTIVE PLAN DEFINED.—In time of receipt of the request for the determina- MedicareAdvantage plan offered by the organi- this paragraph, the term ‘physician incentive tion or reconsideration (or receipt of the infor- zation under this part) shall not prohibit or oth- plan’ means any compensation arrangement be- mation necessary to make the determination or erwise restrict a covered health care professional tween a MedicareAdvantage organization and a reconsideration), or such longer period as the (as defined in subparagraph (D)) from advising physician or physician group that may directly Secretary may permit in specified cases. such an individual who is a patient of the pro- or indirectly have the effect of reducing or lim- ‘‘(4) INDEPENDENT REVIEW OF CERTAIN COV- fessional about the health status of the indi- iting services provided with respect to individ- ERAGE DENIALS.—The Secretary shall contract vidual or medical care or treatment for the indi- uals enrolled with the organization under this with an independent, outside entity to review vidual’s condition or disease, regardless of part. and resolve in a timely manner reconsiderations whether benefits for such care or treatment are ‘‘(5) LIMITATION ON PROVIDER INDEMNIFICA- that affirm denial of coverage, in whole or in provided under the plan, if the professional is TION.—A MedicareAdvantage organization may part. The provisions of section 1869(c)(5) shall acting within the lawful scope of practice. not provide (directly or indirectly) for a health apply to independent outside entities under con- ‘‘(B) CONSCIENCE PROTECTION.—Subparagraph care professional, provider of services, or other tract with the Secretary under this paragraph. (A) shall not be construed as requiring a entity providing health care services (or group ‘‘(5) APPEALS.—An enrollee with a MedicareAdvantage plan to provide, reimburse of such professionals, providers, or entities) to MedicareAdvantage plan of a for, or provide coverage of a counseling or refer- indemnify the organization against any liability MedicareAdvantage organization under this ral service if the MedicareAdvantage organiza- resulting from a civil action brought for any part who is dissatisfied by reason of the enroll- tion offering the plan— damage caused to an enrollee with a ee’s failure to receive any health service to ‘‘(i) objects to the provision of such service on MedicareAdvantage plan of the organization which the enrollee believes the enrollee is enti- moral or religious grounds; and under this part by the organization’s denial of tled and at no greater charge than the enrollee ‘‘(ii) in the manner and through the written medically necessary care. believes the enrollee is required to pay is enti- instrumentalities such MedicareAdvantage orga- ‘‘(6) SPECIAL RULES FOR MEDICAREADVANTAGE tled, if the amount in controversy is $100 or nization deems appropriate, makes available in- PRIVATE FEE-FOR-SERVICE PLANS.—For purposes more, to a hearing before the Secretary to the formation on its policies regarding such service of applying this part (including subsection same extent as is provided in section 205(b), and to prospective enrollees before or during enroll- (k)(1)) and section 1866(a)(1)(O), a hospital (or in any such hearing the Secretary shall make ment and to enrollees within 90 days after the other provider of services), a physician or other the organization a party. If the amount in con- date that the organization or plan adopts a health care professional, or other entity fur- troversy is $1,000 or more, the individual or or- change in policy regarding such a counseling or nishing health care services is treated as having ganization shall, upon notifying the other referral service. an agreement or contract in effect with a party, be entitled to judicial review of the Sec- ‘‘(C) CONSTRUCTION.—Nothing in subpara- MedicareAdvantage organization (with respect retary’s final decision as provided in section graph (B) shall be construed to affect disclosure to an individual enrolled in a 205(g), and both the individual and the organi- requirements under State law or under the Em- MedicareAdvantage private fee-for-service plan zation shall be entitled to be parties to that judi- ployee Retirement Income Security Act of 1974. it offers), if—

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‘‘(A) the provider, professional, or other entity supplemental policies) that includes a clear ‘‘(iii) SNF RESIDENCE OF SPOUSE AT TIME OF furnishes services that are covered under the statement of the amount of the enrollee’s liabil- DISCHARGE.—The skilled nursing facility in plan to such an enrollee; and ity (including any liability for balance billing which the spouse of the enrollee is residing at ‘‘(B) before providing such services, the pro- consistent with this subsection) with respect to the time of discharge from such hospital. vider, professional, or other entity — payments for such services. ‘‘(B) CONTINUING CARE RETIREMENT COMMU- ‘‘(i) has been informed of the individual’s en- ‘‘(ii) ADVANCE NOTICE BEFORE RECEIPT OF IN- NITY.—The term ‘continuing care retirement rollment under the plan; and PATIENT HOSPITAL SERVICES AND CERTAIN OTHER community’ means, with respect to an enrollee ‘‘(ii) either— SERVICES.—In addition, such organization shall, in a MedicareAdvantage plan, an arrangement ‘‘(I) has been informed of the terms and condi- in its terms and conditions of payments to hos- under which housing and health-related serv- tions of payment for such services under the pitals for inpatient hospital services and for ices are provided (or arranged) through an orga- plan; or other services identified by the Secretary for nization for the enrollee under an agreement ‘‘(II) is given a reasonable opportunity to ob- which the amount of the balance billing under that is effective for the life of the enrollee or for tain information concerning such terms and subparagraph (A) could be substantial, require a specified period.’’. conditions, in a manner reasonably designed to the hospital to provide to the enrollee, before SEC. 203. PAYMENTS TO MEDICAREADVANTAGE effect informed agreement by a provider. furnishing such services and if the hospital im- ORGANIZATIONS. The previous sentence shall only apply in the poses balance billing under subparagraph (A)— Section 1853 (42 U.S.C. 1395w–23) is amended absence of an explicit agreement between such a ‘‘(I) notice of the fact that balance billing is to read as follows: provider, professional, or other entity and the permitted under such subparagraph for such ‘‘PAYMENTS TO MEDICAREADVANTAGE MedicareAdvantage organization. services; and ORGANIZATIONS ‘‘(II) a good faith estimate of the likely ‘‘(k) TREATMENT OF SERVICES FURNISHED BY ‘‘SEC. 1853. (a) PAYMENTS TO ORGANIZA- amount of such balance billing (if any), with re- CERTAIN PROVIDERS.— TIONS.— spect to such services, based upon the pre- ‘‘(1) MONTHLY PAYMENTS.— ‘‘(1) IN GENERAL.—Except as provided in para- ‘‘(A) IN GENERAL.—Under a contract under graph (2), a physician or other entity (other senting condition of the enrollee. ‘‘(l) RETURN TO HOME SKILLED NURSING FA- section 1857 and subject to subsections (f), (h), than a provider of services) that does not have CILITIES FOR COVERED POST-HOSPITAL EX- and (j) and section 1859(e)(4), the Secretary a contract establishing payment amounts for TENDED CARE SERVICES.— shall make, to each MedicareAdvantage organi- services furnished to an individual enrolled ‘‘(1) ENSURING RETURN TO HOME SNF.— zation, with respect to coverage of an individual under this part with a MedicareAdvantage or- ‘‘(A) IN GENERAL.—In providing coverage of for a month under this part in a ganization described in section 1851(a)(2)(A) post-hospital extended care services, a MedicareAdvantage payment area, separate shall accept as payment in full for covered serv- MedicareAdvantage plan shall provide for such monthly payments with respect to— ices under this title that are furnished to such coverage through a home skilled nursing facility ‘‘(i) benefits under the original medicare fee- an individual the amounts that the physician or if the following conditions are met: for-service program under parts A and B in ac- other entity could collect if the individual were ‘‘(i) ENROLLEE ELECTION.—The enrollee elects cordance with subsection (d); and not so enrolled. Any penalty or other provision to receive such coverage through such facility. ‘‘(ii) benefits under the voluntary prescription of law that applies to such a payment with re- ‘‘(ii) SNF AGREEMENT.—The facility has a drug program under part D in accordance with spect to an individual entitled to benefits under contract with the MedicareAdvantage organiza- section 1858A and the other provisions of this this title (but not enrolled with a tion for the provision of such services, or the fa- part. MedicareAdvantage organization under this cility agrees to accept substantially similar pay- ‘‘(B) SPECIAL RULE FOR END-STAGE RENAL DIS- part) also applies with respect to an individual ment under the same terms and conditions that EASE.—The Secretary shall establish separate so enrolled. apply to similarly situated skilled nursing facili- rates of payment to a MedicareAdvantage orga- ‘‘(2) APPLICATION TO MEDICAREADVANTAGE ties that are under contract with the nization with respect to classes of individuals PRIVATE FEE-FOR-SERVICE PLANS.— MedicareAdvantage organization for the provi- determined to have end-stage renal disease and ‘‘(A) BALANCE BILLING LIMITS UNDER sion of such services and through which the en- enrolled in a MedicareAdvantage plan of the or- MEDICAREADVANTAGE PRIVATE FEE-FOR-SERVICE rollee would otherwise receive such services. ganization. Such rates of payment shall be actu- PLANS IN CASE OF CONTRACT PROVIDERS.— ‘‘(B) MANNER OF PAYMENT TO HOME SNF.—The arially equivalent to rates paid to other enroll- ‘‘(i) IN GENERAL.—In the case of an individual organization shall provide payment to the home ees in the MedicareAdvantage payment area (or enrolled in a MedicareAdvantage private fee- skilled nursing facility consistent with the con- such other area as specified by the Secretary). for-service plan under this part, a physician, tract or the agreement described in subpara- In accordance with regulations, the Secretary provider of services, or other entity that has a graph (A)(ii), as the case may be. shall provide for the application of the seventh contract (including through the operation of ‘‘(2) NO LESS FAVORABLE COVERAGE.—The cov- sentence of section 1881(b)(7) to payments under subsection (j)(6)) establishing a payment rate for erage provided under paragraph (1) (including this section covering the provision of renal di- services furnished to the enrollee shall accept as scope of services, cost-sharing, and other cri- alysis treatment in the same manner as such payment in full for covered services under this teria of coverage) shall be no less favorable to sentence applies to composite rate payments de- title that are furnished to such an individual an the enrollee than the coverage that would be scribed in such sentence. In establishing such amount not to exceed (including any provided to the enrollee with respect to a skilled rates, the Secretary shall provide for appro- deductibles, coinsurance, copayments, or bal- nursing facility the post-hospital extended care priate adjustments to increase each rate to re- ance billing otherwise permitted under the plan) services of which are otherwise covered under flect the demonstration rate (including the risk an amount equal to 115 percent of such payment the MedicareAdvantage plan. adjustment methodology associated with such rate. ‘‘(3) RULE OF CONSTRUCTION.—Nothing in this rate) of the social health maintenance organiza- ‘‘(ii) PROCEDURES TO ENFORCE LIMITS.—The subsection shall be construed to do the fol- tion end-stage renal disease capitation dem- MedicareAdvantage organization that offers lowing: onstrations (established by section 2355 of the such a plan shall establish procedures, similar ‘‘(A) To require coverage through a skilled Deficit Reduction Act of 1984, as amended by to the procedures described in section nursing facility that is not otherwise qualified section 13567(b) of the Omnibus Budget Rec- 1848(g)(1)(A), in order to carry out clause (i). to provide benefits under part A for medicare onciliation Act of 1993), and shall compute such ‘‘(iii) ASSURING ENFORCEMENT.—If the beneficiaries not enrolled in a rates by taking into account such factors as MedicareAdvantage organization fails to estab- MedicareAdvantage plan. renal treatment modality, age, and the under- lish and enforce procedures required under ‘‘(B) To prevent a skilled nursing facility from lying cause of the end-stage renal disease. clause (ii), the organization is subject to inter- refusing to accept, or imposing conditions upon ‘‘(2) ADJUSTMENT TO REFLECT NUMBER OF EN- mediate sanctions under section 1857(g). the acceptance of, an enrollee for the receipt of ROLLEES.— ‘‘(B) ENROLLEE LIABILITY FOR NONCONTRACT post-hospital extended care services. ‘‘(A) IN GENERAL.—The amount of payment PROVIDERS.—For provisions— ‘‘(4) DEFINITIONS.—In this subsection: under this subsection may be retroactively ad- ‘‘(i) establishing a minimum payment rate in ‘‘(A) HOME SKILLED NURSING FACILITY.—The justed to take into account any difference be- the case of noncontract providers under a term ‘home skilled nursing facility’ means, with tween the actual number of individuals enrolled MedicareAdvantage private fee-for-service plan, respect to an enrollee who is entitled to receive with an organization under this part and the see section 1852(a)(2); or post-hospital extended care services under a number of such individuals estimated to be so ‘‘(ii) limiting enrollee liability in the case of MedicareAdvantage plan, any of the following enrolled in determining the amount of the ad- covered services furnished by such providers, see skilled nursing facilities: vance payment. paragraph (1) and section 1866(a)(1)(O). ‘‘(i) SNF RESIDENCE AT TIME OF ADMISSION.— ‘‘(B) SPECIAL RULE FOR CERTAIN ENROLLEES.— ‘‘(C) INFORMATION ON BENEFICIARY LIABIL- The skilled nursing facility in which the en- ‘‘(i) IN GENERAL.—Subject to clause (ii), the ITY.— rollee resided at the time of admission to the Secretary may make retroactive adjustments ‘‘(i) IN GENERAL.—Each MedicareAdvantage hospital preceding the receipt of such post-hos- under subparagraph (A) to take into account in- organization that offers a MedicareAdvantage pital extended care services. dividuals enrolled during the period beginning private fee-for-service plan shall provide that ‘‘(ii) SNF IN CONTINUING CARE RETIREMENT on the date on which the individual enrolls with enrollees under the plan who are furnished serv- COMMUNITY.—A skilled nursing facility that is a MedicareAdvantage organization under a ices for which payment is sought under the plan providing such services through a continuing plan operated, sponsored, or contributed to by are provided an appropriate explanation of ben- care retirement community (as defined in sub- the individual’s employer or former employer (or efits (consistent with that provided under parts paragraph (B)) which provided residence to the the employer or former employer of the individ- A, B, and D, and, if applicable, under medicare enrollee at the time of such admission. ual’s spouse) and ending on the date on which

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00061 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8930 CONGRESSIONAL RECORD — SENATE July 7, 2003 the individual is enrolled in the organization costs for an individual who has elected to re- ‘‘(i) the area-specific percentage (as specified under this part, except that for purposes of ceive benefits under the original medicare fee- under paragraph (2) for the year) of the annual making such retroactive adjustments under this for-service program option and not enrolled in a area-specific Medicare+Choice capitation rate subparagraph, such period may not exceed 90 MedicareAdvantage plan under this part. The for the MedicareAdvantage payment area, as days. Secretary shall annually calculate such amount determined under paragraph (3) for the year; ‘‘(ii) EXCEPTION.—No adjustment may be made in a manner similar to the manner in which the and under clause (i) with respect to any individual Secretary calculated the adjusted average per ‘‘(ii) the national percentage (as specified who does not certify that the organization pro- capita cost under section 1876. under paragraph (2) for the year) of the input- vided the individual with the disclosure state- ‘‘(B) REMOVAL OF MEDICAL EDUCATION COSTS price-adjusted annual national ment described in section 1852(c) at the time the FROM CALCULATION OF LOCAL FEE-FOR-SERVICE Medicare+Choice capitation rate, as determined individual enrolled with the organization. RATE.— under paragraph (4) for the year, ‘‘(C) EQUALIZATION OF FEDERAL CONTRIBU- ‘‘(i) IN GENERAL.—In calculating the local fee- multiplied by the budget neutrality adjustment TION.—In applying subparagraph (A), the Sec- for-service rate under subparagraph (A) for a factor determined under paragraph (5). retary shall ensure that the payment to the year, the amount of payment described in such ‘‘(B) MINIMUM AMOUNT.—12 multiplied by the MedicareAdvantage organization for each indi- subparagraph shall be adjusted to exclude from following amount: vidual enrolled with the organization shall such payment the payment adjustments de- ‘‘(i) For 1998, $367 (but not to exceed, in the equal the MedicareAdvantage benchmark scribed in clause (ii). case of an area outside the 50 States and the amount for the payment area in which that in- ‘‘(ii) PAYMENT ADJUSTMENTS DESCRIBED.— District of Columbia, 150 percent of the annual ‘‘(I) IN GENERAL.—Subject to subclause (II), dividual resides (as determined under paragraph per capita rate of payment for 1997 determined the payment adjustments described in this sub- (4)), as adjusted— under section 1876(a)(1)(C) for the area). paragraph are payment adjustments which the ‘‘(i) by multiplying the benchmark amount for ‘‘(ii) For 1999 and 2000, the minimum amount Secretary estimates are payable during the that payment area by the ratio of— determined under clause (i) or this clause, re- ‘‘(I) the payment amount determined under year— spectively, for the preceding year, increased by subsection (d)(4); to ‘‘(aa) for the indirect costs of medical edu- the national per capita Medicare+Choice growth ‘‘(II) the weighted service area benchmark cation under section 1886(d)(5)(B); and percentage described in paragraph (6)(A) appli- amount determined under subsection (d)(2); and ‘‘(bb) for direct graduate medical education cable to 1999 or 2000, respectively. ‘‘(ii) using such risk adjustment factor as costs under section 1886(h). ‘‘(iii)(I) Subject to subclause (II), for 2001, for specified by the Secretary under subsection ‘‘(II) TREATMENT OF PAYMENTS COVERED any area in a Metropolitan Statistical Area with (b)(1)(B). UNDER STATE HOSPITAL REIMBURSEMENT SYS- a population of more than 250,000, $525, and for ‘‘(3) COMPREHENSIVE RISK ADJUSTMENT METH- TEM.—To the extent that the Secretary estimates any other area $475. ODOLOGY.— that the amount of the local fee-for-service rates ‘‘(II) In the case of an area outside the 50 ‘‘(A) APPLICATION OF METHODOLOGY.—The reflects payments to hospitals reimbursed under Secretary shall apply the comprehensive risk ad- section 1814(b)(3), the Secretary shall estimate a States and the District of Columbia, the amount justment methodology described in subpara- payment adjustment that is comparable to the specified in this clause shall not exceed 120 per- graph (B) to 100 percent of the amount of pay- payment adjustment that would have been made cent of the amount determined under clause (ii) ments to plans under subsection (d)(4)(B). under clause (i) if the hospitals had not been re- for such area for 2000. ‘‘(B) COMPREHENSIVE RISK ADJUSTMENT METH- imbursed under such section. ‘‘(iv) For 2002 through 2013, the minimum ODOLOGY DESCRIBED.—The comprehensive risk ‘‘(b) ANNUAL ANNOUNCEMENT OF PAYMENT amount specified in this clause (or clause (iii)) adjustment methodology described in this sub- FACTORS.— for the preceding year increased by the national paragraph is the risk adjustment methodology ‘‘(1) ANNUAL ANNOUNCEMENT.—Beginning in per capita Medicare+Choice growth percentage, that would apply with respect to 2005, at the same time as the Secretary publishes described in paragraph (6)(A) for that suc- MedicareAdvantage plans offered by the risk adjusters under section 1860D–11, the ceeding year. MedicareAdvantage organizations in 2005, ex- Secretary shall annually announce (in a man- ‘‘(v) For 2014 and each succeeding year, the cept that if such methodology does not apply to ner intended to provide notice to interested par- minimum amount specified in this clause (or groups of beneficiaries who are aged or disabled ties) the following payment factors: clause (iv)) for the preceding year increased by and groups of beneficiaries who have end-stage ‘‘(A) The benchmark amount for each the percentage increase in the Consumer Price renal disease, the Secretary shall revise such MedicareAdvantage payment area (as cal- Index for all urban consumers (U.S. urban aver- methodology to apply to such groups. culated under subsection (a)(4)) for the year. age) for the 12-month period ending with June ‘‘(C) UNIFORM APPLICATION TO ALL TYPES OF ‘‘(B) The factors to be used for adjusting pay- of the previous year. PLANS.—Subject to section 1859(e)(4), the comments under the comprehensive risk adjustment ‘‘(C) MINIMUM PERCENTAGE INCREASE.— prehensive risk adjustment methodology estab- methodology described in subsection (a)(3)(B) ‘‘(i) For 1998, 102 percent of the annual per lished under this paragraph shall be applied with respect to each MedicareAdvantage pay- capita rate of payment for 1997 determined uniformly without regard to the type of plan. ment area for the year. under section 1876(a)(1)(C) for the ‘‘(D) DATA COLLECTION.—In order to carry out ‘‘(2) ADVANCE NOTICE OF METHODOLOGICAL Medicare+Choice payment area. this paragraph, the Secretary shall require CHANGES.—At least 45 days before making the ‘‘(ii) For 1999 and 2000, 102 percent of the an- MedicareAdvantage organizations to submit announcement under paragraph (1) for a year, nual Medicare+Choice capitation rate under such data and other information as the Sec- the Secretary shall— this paragraph for the area for the previous retary deems necessary. ‘‘(A) provide for notice to MedicareAdvantage year. ‘‘(E) IMPROVEMENT OF PAYMENT ACCURACY.— organizations of proposed changes to be made in ‘‘(iii) For 2001, 103 percent of the annual Notwithstanding any other provision of this the methodology from the methodology and as- Medicare+Choice capitation rate under this paragraph, the Secretary may revise the com- sumptions used in the previous announcement; paragraph for the area for 2000. prehensive risk adjustment methodology de- and ‘‘(iv) For 2002, 2003, and 2004, 102 percent of scribed in subparagraph (B) from time to time to ‘‘(B) provide such organizations with an op- the annual Medicare+Choice capitation rate improve payment accuracy. portunity to comment on such proposed under this paragraph for the area for the pre- ‘‘(4) ANNUAL CALCULATION OF BENCHMARK changes. vious year. AMOUNTS.—For each year, the Secretary shall ‘‘(3) EXPLANATION OF ASSUMPTIONS.—In each ‘‘(v) For 2005, 103 percent of the annual calculate a benchmark amount for each announcement made under paragraph (1), the Medicare+Choice capitation rate under this MedicareAdvantage payment area for each Secretary shall include an explanation of the paragraph for the area for 2003. month for such year with respect to coverage of assumptions and changes in methodology used ‘‘(vi) For 2006 and each succeeding year, 102 the benefits available under the original medi- in the announcement in sufficient detail so that percent of the annual Medicare+Choice capita- care fee-for-service program option equal to the MedicareAdvantage organizations can compute tion rate under this paragraph for the area for greater of the following amounts (adjusted as each payment factor described in paragraph (1). the previous year, except that such rate shall be appropriate for the application of the risk ad- ‘‘(c) CALCULATION OF ANNUAL determined by substituting ‘102’ for ‘103’ in justment methodology under paragraph (3)): MEDICARE+CHOICE CAPITATION RATES.— clause (v). ‘‘(A) MINIMUM AMOUNT.—1⁄12 of the annual ‘‘(1) IN GENERAL.—For purposes of making ‘‘(2) AREA-SPECIFIC AND NATIONAL PERCENT- Medicare+Choice capitation rate determined payments under this part for years before 2006 AGES.—For purposes of paragraph (1)(A)— under subsection (c)(1)(B) for the payment area and for purposes of calculating the annual ‘‘(A) for 1998, the ‘area-specific percentage’ is for the year. Medicare+Choice capitation rates under para- 90 percent and the ‘national percentage’ is 10 ‘‘(B) LOCAL FEE-FOR-SERVICE RATE.—The local graph (7) beginning with such year, subject to percent; fee-for-service rate for such area for the year (as paragraph (6)(C), each annual Medicare+Choice ‘‘(B) for 1999, the ‘area-specific percentage’ is calculated under paragraph (5)). capitation rate, for a Medicare+Choice payment 82 percent and the ‘national percentage’ is 18 ‘‘(5) ANNUAL CALCULATION OF LOCAL FEE-FOR- area before 2006 or a MedicareAdvantage pay- percent; SERVICE RATES.— ment area beginning with such year for a con- ‘‘(C) for 2000, the ‘area-specific percentage’ is ‘‘(A) IN GENERAL.—Subject to subparagraph tract year consisting of a calendar year, is equal 74 percent and the ‘national percentage’ is 26 (B), the term ‘local fee-for-service rate’ means to the largest of the amounts specified in the fol- percent; the amount of payment for a month in a lowing subparagraph (A), (B), or (C): ‘‘(D) for 2001, the ‘area-specific percentage’ is MedicareAdvantage payment area for benefits ‘‘(A) BLENDED CAPITATION RATE.—The sum 66 percent and the ‘national percentage’ is 34 under this title and associated claims processing of— percent;

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00062 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8931 ‘‘(E) for 2002, the ‘area-specific percentage’ is ‘‘(iii) an index that reflects (for that year and Medicare+Choice capitation rate determined 58 percent and the ‘national percentage’ is 42 that type of services) the relative input price of under subsection (c)(1) for purposes of deter- percent; and such services in the area compared to the na- mining the benchmark amount under subsection ‘‘(F) for a year after 2002, the ‘area-specific tional average input price of such services. (a)(4). percentage’ is 50 percent and the ‘national per- In applying clause (iii), the Secretary may, sub- ‘‘(d) SECRETARY’S DETERMINATION OF PAY- centage’ is 50 percent. ject to subparagraph (C), apply those indices MENT AMOUNT.— ‘‘(3) ANNUAL AREA-SPECIFIC MEDICARE+CHOICE under this title that are used in applying (or up- ‘‘(1) REVIEW OF PLAN BIDS.—The Secretary CAPITATION RATE.— dating) national payment rates for specific shall review each plan bid submitted under sec- ‘‘(A) IN GENERAL.—For purposes of paragraph areas and localities. tion 1854(a) for the coverage of benefits under (1)(A), subject to subparagraph (B), the annual ‘‘(B) NATIONAL STANDARDIZED ANNUAL the original medicare fee-for-service program op- area-specific Medicare+Choice capitation rate MEDICARE+CHOICE CAPITATION RATE.—In sub- tion to ensure that such bids are consistent with for a Medicare+Choice payment area— paragraph (A)(i), the ‘national standardized an- the requirements under this part an are based ‘‘(i) for 1998 is, subject to subparagraph (D), nual Medicare+Choice capitation rate’ for a on the assumptions described in section the annual per capita rate of payment for 1997 year is equal to— 1854(a)(2)(A)(iii). ETERMINATION OF WEIGHTED SERVICE determined under section 1876(a)(1)(C) for the ‘‘(i) the sum (for all Medicare+Choice pay- ‘‘(2) D AREA BENCHMARK AMOUNTS.—The Secretary area, increased by the national per capita ment areas) of the product of— shall calculate a weighted service area bench- Medicare+Choice growth percentage for 1998 ‘‘(I) the annual area-specific mark amount for the benefits under the original (described in paragraph (6)(A)); or Medicare+Choice capitation rate for that year ‘‘(ii) for a subsequent year is the annual area- medicare fee-for-service program option for each for the area under paragraph (3); and specific Medicare+Choice capitation rate for the plan equal to the weighted average of the ‘‘(II) the average number of medicare bene- previous year determined under this paragraph benchmark amounts for benefits under such ficiaries residing in that area in the year, multi- for the area, increased by the national per cap- original medicare fee-for-service program option plied by the average of the risk factor weights ita Medicare+Choice growth percentage for such for the payment areas included in the service used to adjust payments under subsection subsequent year. area of the plan using the assumptions de- (a)(1)(A) for such beneficiaries in such area; di- ‘‘(B) REMOVAL OF MEDICAL EDUCATION FROM scribed in section 1854(a)(2)(A)(iii). vided by CALCULATION OF ADJUSTED AVERAGE PER CAPITA ‘‘(3) COMPARISON TO BENCHMARK.—The Sec- ‘‘(ii) the sum of the products described in COST.— retary shall determine the difference between clause (i)(II) for all areas for that year. ‘‘(i) IN GENERAL.—In determining the area- each plan bid (as adjusted under paragraph (1)) ‘‘(5) PAYMENT ADJUSTMENT BUDGET NEU- specific Medicare+Choice capitation rate under and the weighted service area benchmark TRALITY FACTOR.—For purposes of paragraph subparagraph (A) for a year (beginning with amount (as determined under paragraph (2)) for (1)(A), for each year, the Secretary shall deter- 1998), the annual per capita rate of payment for purposes of determining— mine a budget neutrality adjustment factor so 1997 determined under section 1876(a)(1)(C) shall ‘‘(A) the payment amount under paragraph that the aggregate of the payments under this be adjusted to exclude from the rate the applica- (4); and part (other than those attributable to sub- ble percent (specified in clause (ii)) of the pay- ‘‘(B) the additional benefits required and sections (a)(3)(C)(iii) and (i)) shall equal the ag- ment adjustments described in subparagraph MedicareAdvantage monthly basic beneficiary gregate payments that would have been made (C). premiums. under this part if payment were based entirely ‘‘(ii) APPLICABLE PERCENT.—For purposes of ‘‘(4) DETERMINATION OF PAYMENT AMOUNT FOR on area-specific capitation rates. clause (i), the applicable percent for— ORIGINAL MEDICARE FEE-FOR-SERVICE BENE- ‘‘(I) 1998 is 20 percent; ‘‘(6) NATIONAL PER CAPITA MEDICARE+CHOICE FITS.— ‘‘(II) 1999 is 40 percent; GROWTH PERCENTAGE DEFINED.— ‘‘(A) IN GENERAL.—Subject to subparagraph ‘‘(III) 2000 is 60 percent; ‘‘(A) IN GENERAL.—In this part, the ‘national (B), the Secretary shall determine the payment ‘‘(IV) 2001 is 80 percent; and per capita Medicare+Choice growth percentage’ amount for MedicareAdvantage plans for the ‘‘(V) a succeeding year is 100 percent. for a year is the percentage determined by the benefits under the original medicare fee-for- ‘‘(C) PAYMENT ADJUSTMENT.— Secretary, by March 1st before the beginning of service program option as follows: ‘‘(i) IN GENERAL.—Subject to clause (ii), the the year involved, to reflect the Secretary’s esti- ‘‘(i) BIDS THAT EQUAL OR EXCEED THE BENCH- payment adjustments described in this subpara- mate of the projected per capita rate of growth MARK.—In the case of a plan bid that equals or graph are payment adjustments which the Sec- in expenditures under this title for an indi- exceeds the weighted service area benchmark retary estimates were payable during 1997— vidual entitled to (or enrolled for) benefits under amount, the amount of each monthly payment ‘‘(I) for the indirect costs of medical education part A and enrolled under part B, reduced by to a MedicareAdvantage organization with re- under section 1886(d)(5)(B); and the number of percentage points specified in spect to each individual enrolled in a plan shall ‘‘(II) for direct graduate medical education subparagraph (B) for the year. Separate deter- be the weighted service area benchmark amount. costs under section 1886(h). minations may be made for aged enrollees, dis- ‘‘(ii) BIDS BELOW THE BENCHMARK.—In the ‘‘(ii) TREATMENT OF PAYMENTS COVERED abled enrollees, and enrollees with end-stage case of a plan bid that is less than the weighted UNDER STATE HOSPITAL REIMBURSEMENT SYS- renal disease. service area benchmark amount, the amount of TEM.—To the extent that the Secretary estimates ‘‘(B) ADJUSTMENT.—The number of percentage each monthly payment to a MedicareAdvantage that an annual per capita rate of payment for points specified in this subparagraph is— organization with respect to each individual en- 1997 described in clause (i) reflects payments to ‘‘(i) for 1998, 0.8 percentage points; rolled in a plan shall be the weighted service hospitals reimbursed under section 1814(b)(3), ‘‘(ii) for 1999, 0.5 percentage points; area benchmark amount reduced by the amount the Secretary shall estimate a payment adjust- ‘‘(iii) for 2000, 0.5 percentage points; of any premium reduction elected by the plan ment that is comparable to the payment adjust- ‘‘(iv) for 2001, 0.5 percentage points; under section 1854(d)(1)(A)(i). ment that would have been made under clause ‘‘(v) for 2002, 0.3 percentage points; and ‘‘(B) APPLICATION OF COMPREHENSIVE RISK (i) if the hospitals had not been reimbursed ‘‘(vi) for a year after 2002, 0 percentage ADJUSTMENT METHODOLOGY.—The Secretary under such section. points. shall adjust the amounts determined under sub- ‘‘(D) TREATMENT OF AREAS WITH HIGHLY VARI- ‘‘(C) ADJUSTMENT FOR OVER OR UNDER PROJEC- paragraph (A) using the comprehensive risk ad- ABLE PAYMENT RATES.—In the case of a TION OF NATIONAL PER CAPITA MEDICARE+CHOICE justment methodology applicable under sub- Medicare+Choice payment area for which the GROWTH PERCENTAGE.—Beginning with rates section (a)(3). annual per capita rate of payment determined calculated for 1999, before computing rates for a ‘‘(6) ADJUSTMENT FOR NATIONAL COVERAGE DE- under section 1876(a)(1)(C) for 1997 varies by year as described in paragraph (1), the Sec- TERMINATIONS AND LEGISLATIVE CHANGES IN BEN- more than 20 percent from such rate for 1996, for retary shall adjust all area-specific and na- EFITS.—If the Secretary makes a determination purposes of this subsection the Secretary may tional Medicare+Choice capitation rates (and with respect to coverage under this title or there substitute for such rate for 1997 a rate that is beginning in 2000, the minimum amount) for the is a change in benefits required to be provided more representative of the costs of the enrollees previous year for the differences between the under this part that the Secretary projects will in the area. projections of the national per capita result in a significant increase in the costs to ‘‘(4) INPUT-PRICE-ADJUSTED ANNUAL NATIONAL Medicare+Choice growth percentage for that MedicareAdvantage organizations of providing MEDICARE+CHOICE CAPITATION RATE.— year and previous years and the current esti- benefits under contracts under this part (for pe- ‘‘(A) IN GENERAL.—For purposes of paragraph mate of such percentage for such years. riods after any period described in section (1)(A), the input-price-adjusted annual national ‘‘(7) TRANSITION TO MEDICAREADVANTAGE 1852(a)(5)), the Secretary shall appropriately ad- Medicare+Choice capitation rate for a COMPETITION.— just the benchmark amounts or payment Medicare+Choice payment area for a year is ‘‘(A) IN GENERAL.—For each year (beginning amounts (as determined by the Secretary). Such equal to the sum, for all the types of medicare with 2006) payments to MedicareAdvantage projection and adjustment shall be based on an services (as classified by the Secretary), of the plans shall not be computed under this sub- analysis by the Secretary of the actuarial costs product (for each such type of service) of— section, but instead shall be based on the pay- associated with the new benefits. ‘‘(i) the national standardized annual ment amount determined under subsection (d). ‘‘(7) BENEFITS UNDER THE ORIGINAL MEDICARE Medicare+Choice capitation rate (determined ‘‘(B) CONTINUED CALCULATION OF CAPITATION FEE-FOR-SERVICE PROGRAM OPTION DEFINED.— under subparagraph (B)) for the year; RATES.—For each year (beginning with 2006) the For purposes of this part, the term ‘benefits ‘‘(ii) the proportion of such rate for the year Secretary shall calculate and publish the an- under the original medicare fee-for-service pro- which is attributable to such type of services; nual Medicare+Choice capitation rates under gram option’ means those items and services and this subsection and shall use the annual (other than hospice care) for which benefits are

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00063 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8932 CONGRESSIONAL RECORD — SENATE July 7, 2003 available under parts A and B to individuals has elected coverage under an MSA plan, no vidual under this part during the period the in- entitled to, or enrolled for, benefits under part A payment shall be made under paragraph (1) on dividual is not enrolled. and enrolled under part B, with cost-sharing for behalf of an individual for a month unless the ‘‘(i) SPECIAL RULE FOR HOSPICE CARE.— those services as required under parts A and B individual— ‘‘(1) INFORMATION.—A contract under this or an actuarially equivalent level of cost-shar- ‘‘(A) has established before the beginning of part shall require the MedicareAdvantage orga- ing as determined in this part. the month (or by such other deadline as the Sec- nization to inform each individual enrolled ‘‘(e) MEDICAREADVANTAGE PAYMENT AREA retary may specify) a MedicareAdvantage MSA under this part with a MedicareAdvantage plan DEFINED.— (as defined in section 138(b)(2) of the Internal offered by the organization about the avail- ‘‘(1) IN GENERAL.—In this part, except as pro- Revenue Code of 1986); and ability of hospice care if— vided in paragraph (3), the term ‘‘(B) if the individual has established more ‘‘(A) a hospice program participating under ‘MedicareAdvantage payment area’ means a than 1 such MedicareAdvantage MSA, has des- this title is located within the organization’s county, or equivalent area specified by the Sec- ignated 1 of such accounts as the individual’s service area; or retary. MedicareAdvantage MSA for purposes of this ‘‘(B) it is common practice to refer patients to ‘‘(2) RULE FOR ESRD BENEFICIARIES.—In the part. hospice programs outside such service area. case of individuals who are determined to have Under rules under this section, such an indi- ‘‘(2) PAYMENT.—If an individual who is en- end stage renal disease, the MedicareAdvantage vidual may change the designation of such ac- rolled with a MedicareAdvantage organization payment area shall be a State or such other count under subparagraph (B) for purposes of under this part makes an election under section payment area as the Secretary specifies. this part. 1812(d)(1) to receive hospice care from a par- ‘‘(3) GEOGRAPHIC ADJUSTMENT.— ‘‘(3) LUMP-SUM DEPOSIT OF MEDICAL SAVINGS ticular hospice program— ‘‘(A) IN GENERAL.—Upon written request of ACCOUNT CONTRIBUTION.—In the case of an indi- ‘‘(A) payment for the hospice care furnished the chief executive officer of a State for a con- vidual electing an MSA plan effective beginning to the individual shall be made to the hospice tract year (beginning after 2005) made by not with a month in a year, the amount of the con- program elected by the individual by the Sec- later than February 1 of the previous year, the tribution to the MedicareAdvantage MSA on be- retary; Secretary shall make a geographic adjustment to half of the individual for that month and all ‘‘(B) payment for other services for which the a MedicareAdvantage payment area in the State successive months in the year shall be deposited individual is eligible notwithstanding the indi- otherwise determined under paragraph (1)— during that first month. In the case of a termi- vidual’s election of hospice care under section ‘‘(i) to a single statewide MedicareAdvantage nation of such an election as of a month before 1812(d)(1), including services not related to the payment area; the end of a year, the Secretary shall provide individual’s terminal illness, shall be made by ‘‘(ii) to the metropolitan based system de- for a procedure for the recovery of deposits at- the Secretary to the MedicareAdvantage organi- scribed in subparagraph (C); or tributable to the remaining months in the year. zation or the provider or supplier of the service ‘‘(iii) to consolidating into a single ‘‘(g) PAYMENTS FROM TRUST FUNDS.—Except instead of payments calculated under subsection MedicareAdvantage payment area noncontig- as provided in section 1858A(c) (relating to pay- (a); and ‘‘(C) the Secretary shall continue to make uous counties (or equivalent areas described in ments for qualified prescription drug coverage), monthly payments to the MedicareAdvantage paragraph (1)) within a State. the payment to a MedicareAdvantage organization under this section for individuals enrolled organization in an amount equal to the value of Such adjustment shall be effective for payments the additional benefits required under section for months beginning with January of the year under this part with the organization and payments to a MedicareAdvantage MSA under sub- 1854(f)(1)(A).’’. following the year in which the request is re- SEC. 204. SUBMISSION OF BIDS; PREMIUMS. ceived. section (e)(1) shall be made from the Federal Hospital Insurance Trust Fund and the Federal Section 1854 (42 U.S.C. 1395w–24) is amended ‘‘(B) BUDGET NEUTRALITY ADJUSTMENT.—In to read as follows: the case of a State requesting an adjustment Supplementary Medical Insurance Trust Fund ‘‘SUBMISSION OF BIDS; PREMIUMS under this paragraph, the Secretary shall ini- in such proportion as the Secretary determines ‘‘SEC. 1854. (a) SUBMISSION OF BIDS BY tially (and annually thereafter) adjust the pay- reflects the relative weight that benefits under MEDICAREADVANTAGE ORGANIZATIONS.— ment rates otherwise established under this sec- part A and under part B represents of the actu- ‘‘(1) IN GENERAL.—Not later than the second tion for MedicareAdvantage payment areas in arial value of the total benefits under this title. Monday in September and except as provided in the State in a manner so that the aggregate of Monthly payments otherwise payable under this paragraph (3), each MedicareAdvantage organi- the payments under this section in the State section for October 2000 shall be paid on the zation shall submit to the Secretary, in such shall not exceed the aggregate payments that first business day of such month. Monthly pay- form and manner as the Secretary may specify, would have been made under this section for ments otherwise payable under this section for for each MedicareAdvantage plan that the orga- MedicareAdvantage payment areas in the State October 2001 shall be paid on the last business nization intends to offer in a service area in the in the absence of the adjustment under this day of September 2001. Monthly payments other- following year— paragraph. wise payable under this section for October 2006 shall be paid on the first business day of Octo- ‘‘(A) notice of such intent and information on ‘‘(C) METROPOLITAN BASED SYSTEM.—The met- the service area of the plan; ropolitan based system described in this sub- ber 2006. ‘‘(h) SPECIAL RULE FOR CERTAIN INPATIENT ‘‘(B) the plan type for each plan; paragraph is one in which— HOSPITAL STAYS.—In the case of an individual ‘‘(C) if the MedicareAdvantage plan is a co- ‘‘(i) all the portions of each metropolitan sta- who is receiving inpatient hospital services from ordinated care plan (as described in section tistical area in the State or in the case of a con- a subsection (d) hospital (as defined in section 1851(a)(2)(A)) or a private fee-for-service plan solidated metropolitan statistical area, all of the 1886(d)(1)(B)) as of the effective date of the indi- (as described in section 1851(a)(2)(C)), the infor- portions of each primary metropolitan statistical vidual’s— mation described in paragraph (2) with respect area within the consolidated area within the ‘‘(1) election under this part of a to each payment area; State, are treated as a single MedicareAdvantage plan offered by a ‘‘(D) the enrollment capacity (if any) in rela- MedicareAdvantage payment area; and MedicareAdvantage organization— tion to the plan and each payment area; ‘‘(ii) all areas in the State that do not fall ‘‘(A) payment for such services until the date ‘‘(E) the expected mix, by health status, of en- within a metropolitan statistical area are treat- of the individual’s discharge shall be made rolled individuals; and ed as a single MedicareAdvantage payment under this title through the MedicareAdvantage ‘‘(F) such other information as the Secretary area. plan or the original medicare fee-for-service pro- may specify. ‘‘(D) AREAS.—In subparagraph (C), the terms gram option (as the case may be) elected before ‘‘(2) INFORMATION REQUIRED FOR COORDI- ‘metropolitan statistical area’, ‘consolidated the election with such organization, NATED CARE PLANS AND PRIVATE FEE-FOR-SERV- metropolitan statistical area’, and ‘primary met- ‘‘(B) the elected organization shall not be fi- ICE PLANS.—For a MedicareAdvantage plan that ropolitan statistical area’ mean any area des- nancially responsible for payment for such serv- is a coordinated care plan (as described in sec- ignated as such by the Secretary of Commerce. ices until the date after the date of the individ- tion 1851(a)(2)(A)) or a private fee-for-service ‘‘(f) SPECIAL RULES FOR INDIVIDUALS ELECT- ual’s discharge; and plan (as described in section 1851(a)(2)(C)), the ING MSA PLANS.— ‘‘(C) the organization shall nonetheless be information described in this paragraph is as ‘‘(1) IN GENERAL.—If the amount of the paid the full amount otherwise payable to the follows: MedicareAdvantage monthly MSA premium (as organization under this part; or ‘‘(A) INFORMATION REQUIRED WITH RESPECT TO defined in section 1854(b)(2)(D)) for an MSA ‘‘(2) termination of election with respect to a BENEFITS UNDER THE ORIGINAL MEDICARE FEE- plan for a year is less than 1⁄12 of the annual MedicareAdvantage organization under this FOR-SERVICE PROGRAM OPTION.—Information re- Medicare+Choice capitation rate applied under part— lating to the coverage of benefits under the this section for the area and year involved, the ‘‘(A) the organization shall be financially re- original medicare fee-for-service program option Secretary shall deposit an amount equal to 100 sponsible for payment for such services after as follows: percent of such difference in a such date and until the date of the individual’s ‘‘(i) The plan bid, which shall consist of a dol- MedicareAdvantage MSA established (and, if discharge; lar amount that represents the total amount applicable, designated) by the individual under ‘‘(B) payment for such services during the that the plan is willing to accept (not taking paragraph (2). stay shall not be made under section 1886(d) or into account the application of the comprehen- ‘‘(2) ESTABLISHMENT AND DESIGNATION OF by any succeeding MedicareAdvantage organi- sive risk adjustment methodology under section MEDICAREADVANTAGE MEDICAL SAVINGS AC- zation; and 1853(a)(3)) for providing coverage of the benefits COUNT AS REQUIREMENT FOR PAYMENT OF CON- ‘‘(C) the terminated organization shall not re- under the original medicare fee-for-service pro- TRIBUTION.—In the case of an individual who ceive any payment with respect to the indi- gram option to an individual enrolled in the

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plan that resides in the service area of the plan ‘‘(5) APPLICATION OF FEHBP STANDARD; PROHI- the plan to provide additional benefits in ac- for a month. BITION ON PRICE GOUGING.—Each bid amount cordance with subsection (g). ‘‘(ii) For the enhanced medical benefits pack- submitted under paragraph (1) for a ‘‘(2) BIDS ABOVE THE BENCHMARK.—If the Sec- age offered— MedicareAdvantage plan must reasonably and retary determines under section 1853(d)(3) that ‘‘(I) the adjusted community rate (as defined equitably reflect the cost of benefits provided the plan bid exceeds the weighted service area in subsection (g)(3)) of the package; under that plan. benchmark amount (determined under section ‘‘(II) the portion of the actuarial value of ‘‘(b) MONTHLY PREMIUMS CHARGED.— 1853(d)(2)), the amount of such excess shall be such benefits package (if any) that will be ap- ‘‘(1) IN GENERAL.— the MedicareAdvantage monthly basic bene- plied toward satisfying the requirement for ad- ‘‘(A) COORDINATED CARE AND PRIVATE FEE- ficiary premium (as defined in section ditional benefits under subsection (g); FOR-SERVICE PLANS.—The monthly amount of 1854(b)(2)(A)). ‘‘(III) the MedicareAdvantage monthly bene- the premium charged to an individual enrolled ‘‘(e) TERMS AND CONDITIONS OF IMPOSING ficiary premium for enhanced medical benefits in a MedicareAdvantage plan (other than an PREMIUMS.—Each MedicareAdvantage organi- (as defined in subsection (b)(2)(C)); MSA plan) offered by a MedicareAdvantage or- ‘‘(IV) a description of any cost-sharing; zation shall permit the payment of any ganization shall be equal to the sum of the fol- ‘‘(V) a description of whether the amount of MedicareAdvantage monthly basic premium, the lowing: the unified deductible has been lowered or the MedicareAdvantage monthly beneficiary obliga- ‘‘(i) The MedicareAdvantage monthly basic maximum limitations on out-of-pocket expenses tion for qualified prescription drug coverage, beneficiary premium (if any). have been decreased (relative to the levels used and the MedicareAdvantage monthly bene- ‘‘(ii) The MedicareAdvantage monthly bene- in calculating the plan bid); ficiary premium for enhanced medical benefits ‘‘(VI) such other information as the Secretary ficiary premium for enhanced medical benefits on a monthly basis, may terminate election of considers necessary. (if any). individuals for a MedicareAdvantage plan for ‘‘(iii) The assumptions that the ‘‘(iii) The MedicareAdvantage monthly obliga- failure to make premium payments only in ac- MedicareAdvantage organization used in pre- tion for qualified prescription drug coverage (if cordance with section 1851(g)(3)(B)(i), and may paring the plan bid with respect to numbers, in any). not provide for cash or other monetary rebates each payment area, of enrolled individuals and ‘‘(B) MSA PLANS.—The rules under this sec- as an inducement for enrollment or otherwise the mix, by health status, of such individuals. tion that would have applied with respect to an (other than as an additional benefit described in ‘‘(B) INFORMATION REQUIRED WITH RESPECT TO MSA plan if the Prescription Drug and Medi- subsection (g)(1)(C)(i)). care Improvements Act of 2003 had not been en- PART D.—The information required to be sub- ‘‘(f) LIMITATION ON ENROLLEE LIABILITY.— acted shall continue to apply to MSA plans mitted by an eligible entity under section 1860D– ‘‘(1) FOR BENEFITS UNDER THE ORIGINAL MEDI- after the date of enactment of such Act. 12, including the monthly premiums for stand- CARE FEE-FOR-SERVICE PROGRAM OPTION.—The ‘‘(2) PREMIUM TERMINOLOGY.—For purposes of ard coverage and any other qualified prescrip- sum of— this part: tion drug coverage available to individuals en- ‘‘(A) the MedicareAdvantage monthly basic ‘‘(A) MEDICAREADVANTAGE MONTHLY BASIC rolled under part D. beneficiary premium (multiplied by 12) and the BENEFICIARY PREMIUM.—The term ‘‘(C) DETERMINING PLAN COSTS INCLUDED IN actuarial value of the deductibles, coinsurance, PLAN BID.—For purposes of submitting its plan ‘MedicareAdvantage monthly basic beneficiary premium’ means, with respect to a and copayments (determined on the same basis bid under subparagraph (A)(i) a as used in determining the plan’s bid under MedicareAdvantage plan offered by a MedicareAdvantage plan, the amount required to be charged under subsection (d)(2) for the paragraph (2)(C)) applicable on average to indi- MedicareAdvantage organization satisfies sub- viduals enrolled under this part with a paragraphs (A) and (C) of section 1852(a)(1) if plan. ‘‘(B) MEDICAREADVANTAGE MONTHLY BENE- MedicareAdvantage plan described in subpara- the actuarial value of the deductibles, coinsur- graph (A) of section 1851(a)(2) of an organiza- ance, and copayments applicable on average to FICIARY OBLIGATION FOR QUALIFIED PRESCRIP- TION DRUG COVERAGE.—The term tion with respect to required benefits described individuals enrolled in such plan under this in section 1852(a)(1)(A); must equal part with respect to benefits under the original ‘MedicareAdvantage monthly beneficiary obligation for qualified prescription drug coverage’ ‘‘(B) the actuarial value of the deductibles, medicare fee-for-service program option on coinsurance, and copayments that would be ap- which that bid is based (ignoring any reduction means, with respect to a MedicareAdvantage plan, the amount determined under section plicable on average to individuals who have in cost-sharing offered by such plan as en- elected to receive benefits under the original hanced medical benefits under paragraph 1858A(d). ‘‘(C) MEDICAREADVANTAGE MONTHLY BENE- medicare fee-for-service program option if such (2)(A)(ii) or required under clause (ii) or (iii) of individuals were not members of a subsection (g)(1)(C)) equals the amount specified FICIARY PREMIUM FOR ENHANCED MEDICAL BENE- FITS.—The term ‘MedicareAdvantage monthly MedicareAdvantage organization for the year in subsection (f)(1)(B). (adjusted as determined appropriate by the Sec- ‘‘(3) REQUIREMENTS FOR MSA PLANS.—For an beneficiary premium for enhanced medical bene- retary to account for geographic differences and MSA plan described in section 1851(a)(2)(B), the fits’ means, with respect to a for plan cost and utilization differences). information described in this paragraph is the MedicareAdvantage plan, the amount required ‘‘(2) FOR ENHANCED MEDICAL BENEFITS.—If the information that such a plan would have been to be charged under subsection (f)(2) for the MedicareAdvantage organization provides to its required to submit under this part if the Pre- plan, or, in the case of an MSA plan, the members enrolled under this part in a scription Drug and Medicare Improvements Act amount filed under subsection (a)(3). MedicareAdvantage plan described in subpara- of 2003 had not been enacted. ‘‘(D) MEDICAREADVANTAGE MONTHLY MSA PRE- ‘‘(4) REVIEW.— MIUM.—The term ‘MedicareAdvantage monthly graph (A) of section 1851(a)(2) with respect to ‘‘(A) IN GENERAL.—Subject to subparagraph MSA premium’ means, with respect to a enhanced medical benefits relating to benefits (B), the Secretary shall review the adjusted MedicareAdvantage plan, the amount of such under the original medicare fee-for-service pro- community rates (as defined in section premium filed under subsection (a)(3) for the gram option, the sum of the MedicareAdvantage 1854(g)(3)), the amounts of the plan. monthly beneficiary premium for enhanced med- MedicareAdvantage monthly basic premium and ‘‘(c) UNIFORM PREMIUM.—The ical benefits (multiplied by 12) charged and the the MedicareAdvantage monthly beneficiary MedicareAdvantage monthly basic beneficiary actuarial value of its deductibles, coinsurance, premium for enhanced medical benefits filed premium, the MedicareAdvantage monthly bene- and copayments charged with respect to such under this subsection and shall approve or dis- ficiary obligation for qualified prescription drug benefits for a year must equal the adjusted com- approve such rates and amounts so submitted. coverage, the MedicareAdvantage monthly bene- munity rate (as defined in subsection (g)(3)) for The Secretary shall review the actuarial as- ficiary premium for enhanced medical benefits, such benefits for the year minus the actuarial sumptions and data used by the and the MedicareAdvantage monthly MSA pre- value of any additional benefits pursuant to MedicareAdvantage organization with respect mium charged under subsection (b) of a clause (ii), (iii), or (iv) of subsection (g)(2)(C) to such rates and amounts so submitted to deter- MedicareAdvantage organization under this that the plan specified under subsection mine the appropriateness of such assumptions part may not vary among individuals enrolled (a)(2)(i)(II). and data. in the plan. Subject to the provisions of section ‘‘(3) DETERMINATION ON OTHER BASIS.—If the ‘‘(B) EXCEPTION.—The Secretary shall not re- 1858(h), such requirement shall not apply to en- Secretary determines that adequate data are not view, approve, or disapprove the amounts sub- rollees of a MedicareAdvantage plan who are available to determine the actuarial value under mitted under paragraph (3), or, with respect to enrolled in the plan pursuant to a contractual paragraph (1)(A) or (2), the Secretary may de- a private fee-for-service plan (as described in agreement between the plan and an employer or termine such amount with respect to all individ- section 1851(a)(2)(C)) under subparagraph other group health plan that provides employ- uals in the same geographic area, the State, or (A)(i), (A)(ii)(III), or (B) of paragraph (2). ment-based retiree health coverage (as defined in the United States, eligible to enroll in the ‘‘(C) CLARIFICATION OF AUTHORITY REGARDING in section 1860D–20(d)(4)(B)) if the premium MedicareAdvantage plan involved under this DISAPPROVAL OF UNREASONABLE BENEFICIARY amount is the same for all such enrollees under part or on the basis of other appropriate data. COST-SHARING.—Under the authority under sub- such agreement. ‘‘(4) SPECIAL RULE FOR PRIVATE FEE-FOR-SERV- paragraph (A), the Secretary may disapprove ‘‘(d) DETERMINATION OF PREMIUM REDUC- ICE PLANS.—With respect to a the bid if the Secretary determines that the TIONS, REDUCED COST-SHARING, ADDITIONAL MedicareAdvantage private fee-for-service plan deductibles, coinsurance, or copayments appli- BENEFITS, AND BENEFICIARY PREMIUMS.— (other than a plan that is an MSA plan), in no cable under the plan discourage access to cov- ‘‘(1) BIDS BELOW THE BENCHMARK.—If the Sec- event may— ered services or are likely to result in favorable retary determines under section 1853(d)(3) that ‘‘(A) the actuarial value of the deductibles, selection of MedicareAdvantage eligible individ- the weighted service area benchmark amount coinsurance, and copayments applicable on av- uals. exceeds the plan bid, the Secretary shall require erage to individuals enrolled under this part

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with such a plan of an organization with re- MedicareAdvantage organization from pro- (b) STUDY AND REPORT ON CLARIFICATION OF spect to required benefits described in subpara- viding enhanced medical benefits (described in AUTHORITY REGARDING DISAPPROVAL OF UNREA- graphs (A), (C), and (D) of section 1852(a)(1); section 1852(a)(3)) that are in addition to the SONABLE BENEFICIARY COST-SHARING.— exceed health care benefits otherwise required to be (1) STUDY.—The Secretary, in consultation ‘‘(B) the actuarial value of the deductibles, provided under this paragraph and from impos- with beneficiaries, consumer groups, employers, coinsurance, and copayments that would be ap- ing a premium for such enhanced medical bene- and Medicare+Choice organizations, shall con- plicable on average to individuals entitled to (or fits. duct a study to determine the extent to which enrolled for) benefits under part A and enrolled ‘‘(2) STABILIZATION FUND.—A the cost-sharing structures under under part B if they were not members of a MedicareAdvantage organization may provide Medicare+Choice plans under part C of title MedicareAdvantage organization for the year. that a part of the value of an excess amount de- XVIII of the Social Security Act discourage ac- ‘‘(g) REQUIREMENT FOR ADDITIONAL BENE- scribed in paragraph (1) be withheld and recess to covered services or discriminate based on FITS.— served in the Federal Hospital Insurance Trust the health status of Medicare+Choice eligible in- ‘‘(1) REQUIREMENT.— Fund and in the Federal Supplementary Med- dividuals (as defined in section 1851(a)(3) of the ‘‘(A) IN GENERAL.—Each MedicareAdvantage ical Insurance Trust Fund (in such proportions Social Security Act (42 U.S.C. 1395w–21(a)(3))). organization (in relation to a as the Secretary determines to be appropriate) (2) REPORT.—Not later than December 31, MedicareAdvantage plan, other than an MSA by the Secretary for subsequent annual contract 2004, the Secretary shall submit a report to Con- plan, it offers) shall provide that if there is an periods, to the extent required to prevent undue gress on the study conducted under paragraph excess amount (as defined in subparagraph (B)) fluctuations in the additional benefits offered in (1) together with recommendations for such leg- for the plan for a contract year, subject to the those subsequent periods by the organization in islation and administrative actions as the Sec- succeeding provisions of this subsection, the or- accordance with such paragraph. Any of such retary considers appropriate. ganization shall provide to individuals such ad- value of the amount reserved which is not pro- SEC. 205. SPECIAL RULES FOR PRESCRIPTION ditional benefits described in subparagraph (C) vided as additional benefits described in para- DRUG BENEFITS. as the organization may specify in a value graph (1)(A) to individuals electing the Part C of title XVIII (42 U.S.C. 1395w–21 et which the Secretary determines is at least equal MedicareAdvantage plan of the organization in seq.) is amended by inserting after section 1857 to the adjusted excess amount (as defined in accordance with such paragraph prior to the the following new section: subparagraph (D)). end of such periods, shall revert for the use of ‘‘SPECIAL RULES FOR PRESCRIPTION DRUG XCESS AMOUNT ‘‘(B) E .—For purposes of this such Trust Funds. BENEFITS paragraph, the term ‘excess amount’ means, for ‘‘(3) ADJUSTED COMMUNITY RATE.—For pur- ‘‘SEC. 1858A. (a) AVAILABILITY.— an organization for a plan, is 100 percent of the poses of this subsection, subject to paragraph ‘‘(1) PLANS REQUIRED TO PROVIDE QUALIFIED amount (if any) by which the weighted service (4), the term ‘adjusted community rate’ for a PRESCRIPTION DRUG COVERAGE TO ENROLLEES.— area benchmark amount (determined under sec- service or services means, at the election of a ‘‘(A) IN GENERAL.—Except as provided in sub- tion 1853(d)(2)) exceeds the plan bid (as adjusted MedicareAdvantage organization, either— paragraph (B), on and after January 1, 2006, a under section 1853(d)(1)). ‘‘(A) the rate of payment for that service or MedicareAdvantage organization offering a ‘‘(C) ADDITIONAL BENEFITS DESCRIBED.—The services which the Secretary annually deter- MedicareAdvantage plan (except for an MSA additional benefits described in this subpara- mines would apply to an individual electing a plan) shall make available qualified prescription graph are as follows: MedicareAdvantage plan under this part if the drug coverage that meets the requirements for ‘‘(i) Subject to subparagraph (F), a monthly rate of payment were determined under a ‘com- such coverage under this part and part D to part B premium reduction for individuals en- munity rating system’ (as defined in section each enrollee of the plan. rolled in the plan. 1302(8) of the Public Health Service Act, other RIVATE FEE-FOR-SERVICE PLANS MAY, ‘‘(ii) Lowering the amount of the unified de- ‘‘(B) P than subparagraph (C)); or BUT ARE NOT REQUIRED TO, PROVIDE QUALIFIED ductible and decreasing the maximum limita- ‘‘(B) such portion of the weighted aggregate PRESCRIPTION DRUG COVERAGE.—Pursuant to tions on out-of-pocket expenses for individuals premium, which the Secretary annually esti- section 1852(a)(2)(D), a private fee-for-service enrolled in the plan. mates would apply to such an individual, as the ‘‘(iii) A reduction in the actuarial value of plan may elect not to provide qualified prescrip- Secretary annually estimates is attributable to tion drug coverage under part D to individuals plan cost-sharing for plan enrollees. that service or services, ‘‘(iv) Subject to subparagraph (E), such addi- residing in the area served by the plan. tional benefits as the organization may specify. but adjusted for differences between the utiliza- ‘‘(2) REFERENCE TO PROVISION PERMITTING AD- ‘‘(v) Contributing to the stabilization fund tion characteristics of the individuals electing DITIONAL PRESCRIPTION DRUG COVERAGE.—For under paragraph (2). coverage under this part and the utilization the provisions of part D, made applicable to this ‘‘(vi) Any combination of the reductions and characteristics of the other enrollees with the part pursuant to paragraph (1), that permit a benefits described in clauses (i) through (v). plan (or, if the Secretary finds that adequate plan to make available qualified prescription ‘‘(D) ADJUSTED EXCESS AMOUNT.—For pur- data are not available to adjust for those dif- drug coverage that includes coverage of covered poses of this paragraph, the term ‘adjusted ex- ferences, the differences between the utilization drugs that exceeds the coverage required under cess amount’ means, for an organization for a characteristics of individuals selecting other paragraph (1) of section 1860D–6 in an area, but plan, is the excess amount reduced to reflect any MedicareAdvantage coverage, or only if the MedicareAdvantage organization of- amount withheld and reserved for the organiza- MedicareAdvantage eligible individuals in the fering the plan also offers a MedicareAdvantage tion for the year under paragraph (2). area, in the State, or in the United States, eligi- plan in the area that only provides the coverage ‘‘(E) RULE FOR APPROVAL OF MEDICAL AND ble to elect MedicareAdvantage coverage under that is required under such paragraph (1), see PRESCRIPTION DRUG BENEFITS.—An organization this part and the utilization characteristics of paragraph (2) of such section. may not specify any additional benefit that pro- the rest of the population in the area, in the ‘‘(3) RULE FOR APPROVAL OF MEDICAL AND vides for the coverage of any prescription drug State, or in the United States, respectively). PRESCRIPTION DRUG BENEFITS.—Pursuant to sec- (other than that relating to prescription drugs ‘‘(4) DETERMINATION BASED ON INSUFFICIENT tions 1854(g)(1)(F) and 1852(a)(3)(D), a covered under the original medicare fee-for-serv- DATA.—For purposes of this subsection, if the MedicareAdvantage organization offering a ice program option). Secretary finds that there is insufficient enroll- MedicareAdvantage plan that provides qualified ‘‘(F) PREMIUM REDUCTIONS.— ment experience to determine the average prescription drug coverage may not make avail- ‘‘(i) IN GENERAL.—Subject to clause (ii), as amount of payments to be made under this part able coverage of any prescription drugs (other part of providing any additional benefits re- at the beginning of a contract period or to deter- than that relating to prescription drugs covered quired under subparagraph (A), a mine (in the case of a newly operated provider- under the original medicare fee-for-service pro- MedicareAdvantage organization may elect a re- sponsored organization or other new organiza- gram option) to an enrollee as an additional duction in its payments under section tion) the adjusted community rate for the orga- benefit or as an enhanced medical benefit. 1853(a)(1)(A)(i) with respect to a nization, the Secretary may determine such an ‘‘(b) COMPLIANCE WITH ADDITIONAL BENE- MedicareAdvantage plan and the Secretary average based on the enrollment experience of FICIARY PROTECTIONS.—With respect to the of- shall apply such reduction to reduce the pre- other contracts entered into under this part and fering of qualified prescription drug coverage by mium under section 1839 of each enrollee in such may determine such a rate using data in the a MedicareAdvantage organization under a plan as provided in section 1840(i). general commercial marketplace. MedicareAdvantage plan, the organization and ‘‘(ii) AMOUNT OF REDUCTION.—The amount of ‘‘(h) PROHIBITION OF STATE IMPOSITION OF plan shall meet the requirements of section the reduction under clause (i) with respect to PREMIUM TAXES.—No State may impose a pre- 1860D–5, including requirements relating to in- any enrollee in a MedicareAdvantage plan— mium tax or similar tax with respect to pay- formation dissemination and grievance and ap- ‘‘(I) may not exceed 125 percent of the pre- ments to MedicareAdvantage organizations peals, and such other requirements under part D mium described under section 1839(a)(3); and under section 1853. that the Secretary determines appropriate in the ‘‘(II) shall apply uniformly to each enrollee of ‘‘(i) PERMITTING USE OF SEGMENTS OF SERVICE same manner as such requirements apply to an the MedicareAdvantage plan to which such re- AREAS.—The Secretary shall permit a eligible entity and a Medicare Prescription Drug duction applies. MedicareAdvantage organization to elect to plan under part D. The Secretary shall waive ‘‘(G) UNIFORM APPLICATION.—This paragraph apply the provisions of this section uniformly to such requirements to the extent the Secretary shall be applied uniformly for all enrollees for a separate segments of a service area (rather than determines that such requirements duplicate re- plan. uniformly to an entire service area) as long as quirements otherwise applicable to the organiza- ‘‘(H) CONSTRUCTION.—Nothing in this sub- such segments are composed of 1 or more tion or the plan under this part. section shall be construed as preventing a MedicareAdvantage payment areas.’’. ‘‘(c) PAYMENTS FOR PRESCRIPTION DRUGS.—

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‘‘(1) PAYMENT OF FULL AMOUNT OF PREMIUM SEC. 206. FACILITATING EMPLOYER PARTICIPA- ‘‘(2) MEDICAREADVANTAGE ELIGIBLE INDI- TO ORGANIZATIONS FOR QUALIFIED PRESCRIPTION TION. VIDUAL.—The term ‘MedicareAdvantage eligible DRUG COVERAGE.— Section 1858(h) (as added by section 211) is individual’ is defined in section 1851(a)(3). ‘‘(A) IN GENERAL.—For each year (beginning amended— ‘‘(3) MEDICAREADVANTAGE PAYMENT AREA.— with 2006), the Secretary shall pay to each (1) by inserting ‘‘(including subsection (i) of The term ‘MedicareAdvantage payment area’ is MedicareAdvantage organization offering a such section)’’ after ‘‘section 1857’’; and defined in section 1853(d). MedicareAdvantage plan that provides qualified (2) by adding at the end the following new ‘‘(4) NATIONAL PER CAPITA MEDICARE+CHOICE prescription drug coverage, an amount equal to sentence: ‘‘In applying the authority under sec- GROWTH PERCENTAGE.—The ‘national per capita the full amount of the monthly premium sub- tion 1857(i) pursuant to this subsection, the Ad- Medicare+Choice growth percentage’ is defined mitted under section 1854(a)(2)(B) for the year, ministrator may permit MedicareAdvantage in section 1853(c)(6). as adjusted using the risk adjusters that apply plans to establish separate premium amounts for ‘‘(5) MEDICAREADVANTAGE MONTHLY BASIC to the standard prescription drug coverage pub- enrollees in an employer or other group health BENEFICIARY PREMIUM; MEDICAREADVANTAGE lished under section 1860D–11. plan that provides employment-based retiree MONTHLY BENEFICIARY OBLIGATION FOR QUALI- ‘‘(B) APPLICATION OF PART D RISK CORRIDOR, health coverage (as defined in section 1860D– FIED PRESCRIPTION DRUG COVERAGE; STABILIZATION RESERVE FUND, AND ADMINISTRA- 20(d)(4)(B)).’’ MEDICAREADVANTAGE MONTHLY BENEFICIARY TIVE EXPENSES PROVISIONS.—The provisions of PREMIUM FOR ENHANCED MEDICAL BENEFITS.— SEC. 207. ADMINISTRATION BY THE CENTER FOR subsections (b), (c), and (d) of section 1860D–16 MEDICARE CHOICES. The terms ‘MedicareAdvantage monthly basic beneficiary premium’, ‘MedicareAdvantage shall apply to a MedicareAdvantage organiza- On and after January 1, 2006, the monthly beneficiary obligation for qualified pre- tion offering a MedicareAdvantage plan that MedicareAdvantage program under part C of scription drug coverage’, and provides qualified prescription drug coverage title XVIII of the Social Security Act shall be ‘MedicareAdvantage monthly beneficiary pre- and payments made to such organization under administered by the Center for Medicare Choices subparagraph (A) in the same manner as such mium for enhanced medical benefits’ are defined established under section 1808 such title (as provisions apply to an eligible entity offering a in section 1854(b)(2). added by section 301), and each reference to the Medicare Prescription Drug plan and payments ‘‘(6) QUALIFIED PRESCRIPTION DRUG COV- Secretary made in such part shall be deemed to made to such entity under subsection (a) of sec- ERAGE.—The term ‘qualified prescription drug be a reference to the Administrator of the Center tion 1860D–16. coverage’ has the meaning given such term in for Medicare Choices. ‘‘(2) PAYMENT FROM PRESCRIPTION DRUG AC- section 1860D(9). COUNT.—Payment made to MedicareAdvantage SEC. 208. CONFORMING AMENDMENTS. ‘‘(7) STANDARD PRESCRIPTION DRUG COV- organizations under this subsection shall be (a) ORGANIZATIONAL AND FINANCIAL REQUIRE- ERAGE.—The term ‘standard prescription drug made from the Prescription Drug Account in the MENTS FOR MEDICAREADVANTAGE ORGANIZA- coverage’ has the meaning given such term in Federal Supplementary Medical Insurance TIONS; PROVIDER-SPONSORED ORGANIZATIONS.— section 1860D(10).’’; and Trust Fund under section 1841. Section 1855 (42 U.S.C. 1395w–25) is amended— (2) by striking ‘‘Medicare+Choice’’ and insert- ‘‘(d) COMPUTATION OF MEDICAREADVANTAGE (1) in subsection (b), in the matter preceding ing ‘‘MedicareAdvantage’’ each place it ap- MONTHLY BENEFICIARY OBLIGATION FOR QUALI- paragraph (1), by inserting ‘‘subparagraphs (A), pears. FIED PRESCRIPTION DRUG COVERAGE.—In the (B), and (D) of’’ before ‘‘section 1852(A)(1)’’; (e) CONFORMING AMENDMENTS EFFECTIVE BE- case of a MedicareAdvantage eligible individual and FORE 2006.— receiving qualified prescription drug coverage (2) by striking ‘‘Medicare+Choice’’ and insert- (1) EXTENSION OF MSAS.—Section 1851(b)(4) under a MedicareAdvantage plan during a year ing ‘‘MedicareAdvantage’’ each place it ap- (42 U.S.C. 1395w–21(b)(4)) is amended by strik- after 2005, the MedicareAdvantage monthly ben- pears. ing ‘‘January 1, 2003’’ and inserting ‘‘January 1, 2004’’. eficiary obligation for qualified prescription (b) ESTABLISHMENT OF PSO STANDARDS.—Sec- (2) CONTINUOUS OPEN ENROLLMENT AND drug coverage of such individual in the year tion 1856 (42 U.S.C. 1395w–26) is amended by DISENROLLMENT THROUGH 2005.—Section 1851(e) shall be determined in the same manner as the striking ‘‘Medicare+Choice’’ and inserting of the Social Security Act (42 U.S.C. 1395w– monthly beneficiary obligation is determined ‘‘MedicareAdvantage’’ each place it appears. under section 1860D–17 for eligible beneficiaries 21(e)) is amended— (c) CONTRACTS WITH MEDICAREADVANTAGE (A) in paragraph (2)(A), by striking enrolled in a Medicare Prescription Drug plan, ORGANIZATIONS.—Section 1857 (42 U.S.C. 1395w– ‘‘THROUGH 2004’’ and ‘‘December 31,2004’’ and in- except that, for purposes of this subparagraph, 27) is amended— serting ‘‘THROUGH 2005’’ and ‘‘December 31, any reference to the monthly plan premium ap- (1) in subsection (g)(1)— proved by the Secretary under section 1860D–13 2005’’, respectively; (A) in subparagraph (B), by striking ‘‘amount (B) in the heading of paragraph (2)(B), by shall be treated as a reference to the monthly of the Medicare+Choice monthly basic and sup- striking ‘‘DURING 2005’’ and inserting ‘‘DURING premium for qualified prescription drug cov- plemental beneficiary premiums’’ and inserting 2006’’; erage submitted by the MedicareAdvantage or- ‘‘amounts of the MedicareAdvantage monthly (C) in paragraphs (2)(B)(i) and (2)(C)(i), by ganization offering the plan under section basic premium and MedicareAdvantage monthly striking ‘‘2005’’ and inserting ‘‘2006’’ each place 1854(a)(2)(A) and approved by the Secretary. beneficiary premium for enhanced medical bene- it appears; ‘‘(e) COLLECTION OF MEDICAREADVANTAGE fits’’; (D) in paragraph (2)(D), by striking ‘‘2004’’ MONTHLY BENEFICIARY OBLIGATION FOR QUALI- (B) in subparagraph (F), by striking ‘‘or’’ and inserting ‘‘2005’’; and FIED PRESCRIPTION DRUG COVERAGE.—The pro- after the semicolon at the end; (E) in paragraph (4), by striking ‘‘2005’’ and visions of section 1860D–18, including subsection (C) in subparagraph (G), by adding ‘‘or’’ after inserting ‘‘2006’’ each place it appears. (b) of such section, shall apply to the amount of the semicolon at the end; and (3) UPDATE IN MINIMUM PERCENTAGE IN- the MedicareAdvantage monthly beneficiary ob- (D) by inserting after subparagraph (G) the CREASE.—Section 1853(c)(1)(C) (42 U.S.C. 1395w– ligation for qualified prescription drug coverage following new subparagraph: 23(c)(1)(C)) is amended by striking clause (iv) (as determined under subsection (d)) required to ‘‘(H)(i) charges any individual an amount in and inserting the following new clauses: be paid by a MedicareAdvantage eligible indi- excess of the MedicareAdvantage monthly bene- ‘‘(iv) For 2002, 2003, and 2004, 102 percent of vidual enrolled in a MedicareAdvantage plan in ficiary obligation for qualified prescription drug the annual Medicare+Choice capitation rate the same manner as such provisions apply to the coverage under section 1858A(d); under this paragraph for the area for the pre- amount of the monthly beneficiary obligation ‘‘(ii) provides coverage for prescription drugs vious year. required to be paid by an eligible beneficiary en- that is not qualified prescription drug coverage; ‘‘(v) For 2005, 103 percent of the annual rolled in a Medicare Prescription Drug plan ‘‘(iii) offers prescription drug coverage, but Medicare+Choice capitation rate under this under part D. does not make standard prescription drug cov- paragraph for the area for 2003. ‘‘(f) AVAILABILITY OF PREMIUM SUBSIDY AND ‘‘(vi) For 2006 and each succeeding year, 102 COST-SHARING REDUCTIONS FOR LOW-INCOME erage available; or ‘‘(iv) provides coverage for prescription drugs percent of the annual Medicare+Choice capita- ENROLLEES AND REINSURANCE PAYMENTS.—For tion rate under this paragraph for the area for provisions— (other than that relating to prescription drugs covered under the original medicare fee-for-serv- the previous year, except that such rate shall be ‘‘(1) providing premium subsidies and cost- determined by substituting ‘102’ for ‘103’ in sharing reductions for low-income individuals ice program option described in section 1851(a)(1)(A)(i)) as an enhanced medical benefit clause (v).’’. receiving qualified prescription drug coverage (4) EFFECTIVE DATE.—The amendments made under section 1852(a)(3)(D) or as an additional through a MedicareAdvantage plan, see section by this subsection shall take effect on the date benefit under section 1854(g)(1)(F),’’; and 1860D–19; and of enactment of this Act. (2) by striking ‘‘Medicare+Choice’’ and insert- ‘‘(2) providing a MedicareAdvantage organi- (e) OTHER CONFORMING AMENDMENTS.— zation with reinsurance payments for certain ing ‘‘MedicareAdvantage’’ each place it ap- (1) CONFORMING MEDICARE CROSS-REF- expenses incurred in providing qualified pre- pears. ERENCES.— scription drug coverage through a (d) DEFINITIONS; MISCELLANEOUS PROVI- (A) Section 1839(a)(2) (42 U.S.C. 1395r(a)(2)) is MedicareAdvantage plan, see section 1860D– SIONS.—Section 1859 (42 U.S.C. 1395w–28) is amended by striking ‘‘section 1854(f)(1)(E)’’ and 20.’’. amended— inserting ‘‘section 1854(g)(1)(C)(i)’’. (b) TREATMENT OF REDUCTION FOR PURPOSES (1) by striking subsection (c) and inserting the (B) Section 1840(i) (42 U.S.C. 1395s(i)) is OF DETERMINING GOVERNMENT CONTRIBUTION following new subsection: amended by striking ‘‘section 1854(f)(1)(E)’’ and UNDER PART B.—Section 1844(c) (42 U.S.C. ‘‘(c) OTHER REFERENCES TO OTHER TERMS.— inserting ‘‘section 1854(g)(1)(C)(i)’’. 1395w) is amended by striking ‘‘section ‘‘(1) ENHANCED MEDICAL BENEFITS.—The term (C) Section 1844(c) (42 U.S.C. 1395w(c)) is 1854(f)(1)(E)’’ and inserting ‘‘section ‘enhanced medical benefits’ is defined in section amended by striking ‘‘section 1854(f)(1)(E)’’ and 1854(d)(1)(A)(i)’’. 1852(a)(3)(E). inserting ‘‘section 1854(g)(1)(C)(i)’’.

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(D) Section 1876(k)(3)(A) (42 U.S.C. ‘‘(C) INCLUSION OF COSTS OF DOD AND VA MILI- ‘‘(b) ELIGIBILITY, ELECTION, AND ENROLL- 1395mm(k)(3)(A)) is amended by inserting ‘‘(as TARY FACILITY SERVICES TO MEDICARE-ELIGIBLE MENT; BENEFITS AND BENEFICIARY PROTEC- in effect immediately before the enactment of BENEFICIARIES.—In determining the local fee- TIONS.— the Prescription Drug and Medicare Improve- for-service rate under subparagraph (A) for a ‘‘(1) IN GENERAL.—Except as provided in the ments Act of 2003)’’ after section 1853(a). year (beginning with 2006), the annual per cap- succeeding provisions of this subsection, the (F) Section 1876(k)(4) (42 U.S.C. ita rate of payment for 1997 determined under provisions of sections 1851 and 1852 that apply 1395mm(k)(4)(A)) is amended— section 1876(a)(1)(C) shall be adjusted to include with respect to coordinated care plans shall (i) in subparagraph (A), by striking ‘‘section in the rate the Secretary’s estimate, on a per apply to preferred provider organization plans 1853(a)(3)(B)’’ and inserting ‘‘section capita basis, of the amount of additional pay- offered by a preferred provider organization. 1853(a)(3)(D)’’; and ments that would have been made in the area ‘‘(2) SERVICE AREA.—The service area of a pre- (ii) in subparagraph (B), by striking ‘‘section involved under this title if individuals entitled ferred provider organization plan shall be a pre- 1854(g)’’ and inserting ‘‘section 1854(h)’’. to benefits under this title had not received serv- ferred provider region. (G) Section 1876(k)(4)(C) (42 U.S.C. ices from facilities of the Department of Defense ‘‘(3) AVAILABILITY.—Each preferred provider 1395mm(k)(4)(C)) in amended by inserting ‘‘(as or the Department of Veterans Affairs.’’. organization plan must be offered to each in effect immediately before the enactment of (b) EFFECTIVE DATE.—The amendments made MedicareAdvantage eligible individual who re- the Prescription Drug and Medicare Improve- by this section shall apply with respect to plan sides in the service area of the plan. ments Act of 2003)’’ after ‘‘section 1851(e)(6)’’. years beginning on and after January 1, 2006. ‘‘(4) AUTHORITY TO PROHIBIT RISK SELEC- TION.—The provisions of section 1852(a)(6) shall (H) Section 1894(d) (42 U.S.C. 1395eee(d)) is Subtitle B—Preferred Provider Organizations amended by adding at the end the following apply to preferred provider organization plans. SEC. 211. ESTABLISHMENT OF ‘‘(5) ASSURING ACCESS TO SERVICES IN PRE- new paragraph: MEDICAREADVANTAGE PREFERRED FERRED PROVIDER ORGANIZATION PLANS.— ‘‘(3) APPLICATION OF PROVISIONS.—For pur- PROVIDER PROGRAM OPTION. ‘‘(A) IN GENERAL.—In addition to any other poses of paragraphs (1) and (2), the references (a) ESTABLISHMENT OF PREFERRED PROVIDER requirements under this section, in the case of a to section 1853 and subsection (a)(2) of such sec- PROGRAM OPTION.—Section 1851(a)(2) is amend- preferred provider organization plan, the orga- tion in such paragraphs shall be deemed to be ed by adding at the end the following new sub- nization offering the plan must demonstrate to references to those provisions as in effect imme- paragraph: the Secretary that the organization has suffi- diately before the enactment of the Prescription ‘‘(D) PREFERRED PROVIDER ORGANIZATION cient number and range of health care profes- Drug and Medicare Improvements Act of 2003.’’. PLANS.—A MedicareAdvantage preferred pro- sionals and providers willing to provide services (2) CONFORMING MEDICARE TERMINOLOGY.— vider organization plan under the program es- under the terms of the plan. Title XVIII (42 U.S.C. 1395 et seq.), except for tablished under section 1858.’’. ‘‘(B) DETERMINATION OF SUFFICIENT ACCESS.— part C of such title (42 U.S.C. 1395w–21 et seq.), (b) PROGRAM SPECIFICATIONS.—Part C of title The Secretary shall find that an organization and title XIX (42 U.S.C. 1396 et seq.) are each XVIII (42 U.S.C. 1395w–21 et seq.) is amended by has met the requirement under subparagraph amended by striking ‘‘Medicare+Choice’’ and inserting after section 1857 the following new (A) with respect to any category of health care inserting ‘‘MedicareAdvantage’’ each place it section: professional or provider if, with respect to that appears. ‘‘PREFERRED PROVIDER ORGANIZATIONS category of provider the plan has contracts or SEC. 209. EFFECTIVE DATE. ‘‘SEC. 1858. (a) ESTABLISHMENT OF PRO- agreements with a sufficient number and range (a) IN GENERAL.—Except as provided in sec- GRAM.— of providers within such category to provide tion 208(d)(3) and subsection (b), the amend- ‘‘(1) IN GENERAL.—Beginning on January 1, covered services under the terms of the plan. ments made by this title shall apply with respect 2006, there is established a preferred provider ‘‘(C) CONSTRUCTION.—Subparagraph (B) shall to plan years beginning on and after January 1, program under which preferred provider organi- not be construed as restricting— 2006. zation plans offered by preferred provider orga- ‘‘(i) the persons from whom enrollees under (b) MEDICAREADVANTAGE MSA PLANS.—Not- nizations are offered to MedicareAdvantage eli- such plan may obtain covered benefits; or withstanding any provision of this title, the Sec- gible individuals in preferred provider regions. ‘‘(ii) the categories of licensed health profes- retary shall apply the payment and other rules ‘‘(2) DEFINITIONS.— sionals or providers from whom enrollees under that apply with respect to an MSA plan de- ‘‘(A) PREFERRED PROVIDER ORGANIZATION.— such a plan may obtain covered benefits if the scribed in section 1851(a)(2)(B) of the Social Se- The term ‘preferred provider organization’ covered services are provided to enrollees in a curity Act (42 U.S.C. 1395w–21(a)(2)(B)) as if means an entity with a contract under section State where 25 percent or more of the population this title had not been enacted. 1857 that meets the requirements of this section resides in health professional shortage areas applicable with respect to preferred provider or- SEC. 210. IMPROVEMENTS IN designated pursuant to section 332 of the Public MEDICAREADVANTAGE BENCHMARK ganizations. Health Service Act. DETERMINATIONS. ‘‘(B) PREFERRED PROVIDER ORGANIZATION ‘‘(c) PAYMENTS TO PREFERRED PROVIDER OR- PLAN (a) INCLUSION OF COSTS OF DOD AND VA .—The term ‘preferred provider organiza- GANIZATIONS.— ‘‘(1) PAYMENTS TO ORGANIZATIONS.— MILITARY FACILITY SERVICES TO MEDICARE-ELI- tion plan’ means a MedicareAdvantage plan ‘‘(A) MONTHLY PAYMENTS.— GIBLE BENEFICIARIES IN CALCULATION OF that— ‘‘(i) has a network of providers that have ‘‘(i) IN GENERAL.—Under a contract under sec- MEDICAREADVANTAGE PAYMENT RATES.— agreed to a contractually specified reimburse- tion 1857 and subject to paragraph (5), sub- (1) FOR PURPOSES OF CALCULATING ment for covered benefits with the organization section (e), and section 1859(e)(4), the Secretary MEDICARE+CHOICE PAYMENT RATES.—Section shall make, to each preferred provider organiza- 1853(c)(3) (42 U.S.C. 1395w–23(c)(3)), as amended offering the plan; ‘‘(ii) provides for reimbursement for all cov- tion, with respect to coverage of an individual by section 203, is amended— ered benefits regardless of whether such benefits for a month under this part in a preferred pro- (A) in subparagraph (A), by striking ‘‘sub- are provided within such network of providers; vider region, separate monthly payments with paragraph (B)’’ and inserting ‘‘subparagraphs and respect to— (B) and (E)’’; and ‘‘(iii) is offered by a preferred provider organi- ‘‘(I) benefits under the original medicare fee- (B) by adding at the end the following new zation. for-service program under parts A and B in ac- subparagraph: ‘‘(C) PREFERRED PROVIDER REGION.—The term cordance with paragraph (4); and ‘‘(E) INCLUSION OF COSTS OF DOD AND VA MILI- ‘preferred provider region’ means— ‘‘(II) benefits under the voluntary prescription TARY FACILITY SERVICES TO MEDICARE-ELIGIBLE ‘‘(i) a region established under paragraph (3); drug program under part D in accordance with BENEFICIARIES.—In determining the area-spe- and section 1858A and the other provisions of this cific Medicare+Choice capitation rate under ‘‘(ii) a region that consists of the entire part. subparagraph (A) for a year (beginning with United States. ‘‘(ii) SPECIAL RULE FOR END-STAGE RENAL DIS- 2006), the annual per capita rate of payment for ‘‘(3) PREFERRED PROVIDER REGIONS.—For pur- EASE.—The Secretary shall establish separate 1997 determined under section 1876(a)(1)(C) shall poses of this part the Secretary shall establish rates of payment applicable with respect to be adjusted to include in the rate the Secretary’s preferred provider regions as follows: classes of individuals determined to have end- estimate, on a per capita basis, of the amount of ‘‘(A) There shall be at least 10 regions. stage renal disease and enrolled in a preferred additional payments that would have been made ‘‘(B) Each region must include at least 1 provider organization plan under this clause in the area involved under this title if individ- State. that are similar to the separate rates of payment uals entitled to benefits under this title had not ‘‘(C) The Secretary may not divide States so described in section 1853(a)(1)(B). received services from facilities of the Depart- that portions of the State are in different re- ‘‘(B) ADJUSTMENT TO REFLECT NUMBER OF EN- ment of Defense or the Department of Veterans gions. ROLLEES.—The Secretary may retroactively ad- Affairs.’’. ‘‘(D) To the extent possible, the Secretary just the amount of payment under this para- (2) FOR PURPOSES OF CALCULATING LOCAL FEE- shall include multistate metropolitan statistical graph in a manner that is similar to the manner FOR-SERVICE RATES.—Section 1853(d)(5) (42 areas in a single region. The Secretary may di- in which payment amounts may be retroactively U.S.C. 1395w–23(d)(5)), as amended by section vide metropolitan statistical areas where it is adjusted under section 1853(a)(2). 203, is amended— necessary to establish regions of such size and ‘‘(C) COMPREHENSIVE RISK ADJUSTMENT METH- (A) in subparagraph (A), by striking ‘‘sub- geography as to maximize the participation of ODOLOGY.—The Secretary shall apply the com- paragraph (B)’’ and inserting ‘‘subparagraphs preferred provider organization plans. prehensive risk adjustment methodology de- (B) and (C)’’; and ‘‘(E) The Secretary may conform the preferred scribed in section 1853(a)(3)(B) to 100 percent of (B) by adding at the end the following new provider regions to the service areas established the amount of payments to plans under para- subparagraph: under section 1860D–10. graph (4)(D)(ii).

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‘‘(D) ADJUSTMENT FOR SPENDING VARIATIONS mark amount (as determined under subpara- MedicareAdvantage monthly basic premium and WITHIN A REGION.—The Secretary shall establish graph (B)) for purposes of determining— the MedicareAdvantage monthly beneficiary a methodology for adjusting the amount of pay- ‘‘(i) the payment amount under subparagraph premium for enhanced medical benefits filed ments to plans under paragraph (4)(D)(ii) that (D); and under this paragraph and shall approve or dis- achieves the same objective as the adjustment ‘‘(ii) the additional benefits required and approve such rates and amounts so submitted. described in paragraph 1853(a)(2)(C). MedicareAdvantage monthly basic beneficiary The Secretary shall review the actuarial as- ‘‘(2) ANNUAL CALCULATION OF BENCHMARK premiums. sumptions and data used by the preferred pro- AMOUNTS FOR PREFERRED PROVIDER REGIONS.— ‘‘(D) DETERMINATION OF PAYMENT AMOUNT.— vider organization with respect to such rates For each year (beginning in 2006), the Secretary ‘‘(i) IN GENERAL.—Subject to clause (ii), the and amounts so submitted to determine the ap- shall calculate a benchmark amount for each Secretary shall determine the payment amount propriateness of such assumptions and data. preferred provider region for each month for to a preferred provider organization for a pre- ‘‘(E) AUTHORITY TO LIMIT NUMBER OF PLANS such year with respect to coverage of the bene- ferred provider organization plan as follows: IN A REGION.—If there are bids for more than 3 fits available under the original medicare fee- ‘‘(I) BIDS THAT EQUAL OR EXCEED THE BENCH- preferred provider organization plans in a pre- for-service program option equal to the average MARK.—In the case of a plan bid that equals or ferred provider region, the Secretary shall ac- of each benchmark amount calculated under exceeds the preferred provider regional bench- cept only the 3 lowest-cost credible bids for that section 1853(a)(4) for each MedicareAdvantage mark amount, the amount of each monthly pay- region that meet or exceed the quality and min- payment area for the year within such region, ment to the organization with respect to each imum standards applicable under this section. weighted by the number of MedicareAdvantage individual enrolled in a plan shall be the pre- ‘‘(2) MONTHLY PREMIUMS CHARGED.—The eligible individuals residing in each such pay- ferred provider regional benchmark amount. amount of the monthly premium charged to an ment area for the year. ‘‘(II) BIDS BELOW THE BENCHMARK.—In the individual enrolled in a preferred provider orga- ‘‘(3) ANNUAL ANNOUNCEMENT OF PAYMENT FAC- case of a plan bid that is less than the preferred nization plan offered by a preferred provider or- TORS.— provider regional benchmark amount, the ganization shall be equal to the sum of the fol- ‘‘(A) ANNUAL ANNOUNCEMENT.—Beginning in amount of each monthly payment to the organi- lowing: 2005, at the same time as the Secretary publishes zation with respect to each individual enrolled ‘‘(A) The MedicareAdvantage monthly basic the risk adjusters under section 1860D–11, the in a plan shall be the preferred provider re- beneficiary premium, as defined in section Secretary shall annually announce (in a man- gional benchmark amount reduced by the 1854(b)(2)(A) (if any). ner intended to provide notice to interested par- amount of any premium reduction elected by the ‘‘(B) The MedicareAdvantage monthly bene- ties) the following payment factors: plan under section 1854(d)(1)(A)(i). ficiary premium for enhanced medical benefits, ‘‘(i) The benchmark amount for each preferred ‘‘(ii) APPLICATION OF ADJUSTMENT METH- as defined in section 1854(b)(2)(C) (if any). provider region (as calculated under paragraph ODOLOGIES.—The Secretary shall adjust the ‘‘(C) The MedicareAdvantage monthly obliga- (2)(A)) for the year. amounts determined under subparagraph (A) tion for qualified prescription drug coverage, as ‘‘(ii) The factors to be used for adjusting pay- using the factors described in paragraph defined in section 1854(b)(2)(B) (if any). ments described under— (3)(A)(ii). ‘‘(3) DETERMINATION OF PREMIUM REDUCTIONS, ‘‘(I) the comprehensive risk adjustment meth- ‘‘(E) FACTORS USED IN ADJUSTING BIDS AND REDUCED COST-SHARING, ADDITIONAL BENEFITS, odology described in paragraph (1)(C) with re- BENCHMARKS FOR PREFERRED PROVIDER ORGANI- AND BENEFICIARY PREMIUMS.—The rules for de- spect to each preferred provider region for the ZATIONS AND IN DETERMINING ENROLLEE PRE- termining premium reductions, reduced cost- year; and MIUMS.—Subject to subparagraph (F), in addi- sharing, additional benefits, and beneficiary ‘‘(II) the methodology used for adjustment for tion to the factors used to adjust payments to premiums under section 1854(d) shall apply with geographic variations within such region estab- plans described in section 1853(d)(6), the Sec- respect to preferred provider organizations. lished under paragraph (1)(D). retary shall use the adjustment for geographic ‘‘(4) PROHIBITION OF SEGMENTING PREFERRED ‘‘(B) ADVANCE NOTICE OF METHODOLOGICAL variation within the region established under PROVIDER REGIONS.—The Secretary may not per- CHANGES.—At least 45 days before making the paragraph (1)(D). mit a preferred provider organization to elect to announcement under subparagraph (A) for a ‘‘(F) ADJUSTMENT FOR NATIONAL COVERAGE apply the provisions of this section uniformly to year, the Secretary shall— DETERMINATIONS AND LEGISLATIVE CHANGES IN separate segments of a preferred provider region ‘‘(i) provide for notice to preferred provider or- BENEFITS.—The Secretary shall provide for ad- (rather than uniformly to an entire preferred ganizations of proposed changes to be made in justments for national coverage determinations provider region). ORTION OF TOTAL PAYMENTS TO AN OR- the methodology from the methodology and as- and legislative changes in benefits applicable ‘‘(e) P GANIZATION SUBJECT TO RISK FOR 2 YEARS.— sumptions used in the previous announcement; with respect to preferred provider organizations ‘‘(1) NOTIFICATION OF SPENDING UNDER THE and in the same manner as the Secretary provides PLAN.— ‘‘(ii) provide such organizations with an op- for adjustments under section 1853(d)(7). ‘‘(A) IN GENERAL.—For 2007 and 2008, the pre- portunity to comment on such proposed ‘‘(5) PAYMENTS FROM TRUST FUND.—The pay- ferred provider organization offering a preferred changes. ment to a preferred provider organization under provider organization plan shall notify the Sec- ‘‘(C) EXPLANATION OF ASSUMPTIONS.—In each this section shall be made from the Federal Hos- retary of the total amount of costs that the or- announcement made under subparagraph (A), pital Insurance Trust Fund and the Federal ganization incurred in providing benefits cov- the Secretary shall include an explanation of Supplementary Medical Insurance Trust Fund ered under parts A and B of the original medi- the assumptions and changes in methodology in a manner similar to the manner described in care fee-for-service program for all enrollees used in the announcement in sufficient detail so section 1853(g). under the plan in the previous year. that preferred provider organizations can com- ‘‘(6) SPECIAL RULE FOR CERTAIN INPATIENT ‘‘(B) CERTAIN EXPENSES NOT INCLUDED.—The pute each payment factor described in such sub- HOSPITAL STAYS.—Rules similar to the rules ap- total amount of costs specified in subparagraph paragraph. plicable under section 1853(h) shall apply with (A) may not include— ‘‘(4) SECRETARY’S DETERMINATION OF PAYMENT respect preferred provider organizations. ‘‘(i) subject to subparagraph (C), administra- AMOUNT FOR BENEFITS UNDER THE ORIGINAL ‘‘(7) SPECIAL RULE FOR HOSPICE CARE.—Rules tive expenses incurred in providing the benefits MEDICARE FEE-FOR-SERVICE PROGRAM.—The Sec- similar to the rules applicable under section described in such subparagraph; or retary shall determine the payment amount for 1853(i) shall apply with respect to preferred pro- ‘‘(ii) amounts expended on providing en- plans as follows: vider organizations. hanced medical benefits under section ‘‘(A) REVIEW OF PLAN BIDS.—The Secretary ‘‘(d) SUBMISSION OF BIDS BY PPOS; PRE- 1852(a)(3)(D). shall review each plan bid submitted under sub- MIUMS.— ‘‘(C) ESTABLISHMENT OF ALLOWABLE ADMINIS- section (d)(1) for the coverage of benefits under ‘‘(1) SUBMISSION OF BIDS BY PREFERRED PRO- TRATIVE EXPENSES.—For purposes of applying the original medicare fee-for-service program op- VIDER ORGANIZATIONS.— subparagraph (B)(i), the administrative ex- tion to ensure that such bids are consistent with ‘‘(A) IN GENERAL.—For the requirements on penses incurred in providing benefits described the requirements under this part and are based submissions by MedicareAdvantage preferred in subparagraph (A) under a preferred provider on the assumptions described in section provider organization plans, see section organization plan may not exceed an amount 1854(a)(2)(A)(iii) that the plan used with respect 1854(a)(1). determined appropriate by the Administrator. to numbers of enrolled individuals. ‘‘(B) UNIFORM PREMIUMS.—Each bid amount ‘‘(2) ADJUSTMENT OF PAYMENT.— ‘‘(B) DETERMINATION OF PREFERRED PROVIDER submitted under subparagraph (A) for a pre- ‘‘(A) NO ADJUSTMENT IF COSTS WITHIN RISK REGIONAL BENCHMARK AMOUNTS.—The Secretary ferred provider organization plan in a preferred CORRIDOR.—If the total amount of costs speci- shall calculate a preferred provider regional provider region may not vary among fied in paragraph (1)(A) for the plan for the benchmark amount for that plan for the benefits MedicareAdvantage eligible individuals residing year are not more than the first threshold upper under the original medicare fee-for-service pro- in such preferred provider region. limit of the risk corridor (specified in paragraph gram option for each plan equal to the regional ‘‘(C) APPLICATION OF FEHBP STANDARD; PROHI- (3)(A)(iii)) and are not less than the first thresh- benchmark adjusted by using the assumptions BITION ON PRICE GOUGING.—Each bid amount old lower limit of the risk corridor (specified in described in section 1854(a)(2)(A)(iii) that the submitted under subparagraph (A) for a pre- paragraph (3)(A)(i)) for the plan for the year, plan used with respect to numbers of enrolled ferred provider organization plan must reason- then no additional payments shall be made by individuals. ably and equitably reflect the cost of benefits the Secretary and no reduced payments shall be ‘‘(C) COMPARISON TO BENCHMARK.—The Sec- provided under that plan. made to the preferred provider organization of- retary shall determine the difference between ‘‘(D) REVIEW.—The Secretary shall review the fering the plan. each plan bid (as adjusted under subparagraph adjusted community rates (as defined in section ‘‘(B) INCREASE IN PAYMENT IF COSTS ABOVE (A)) and the preferred provider regional bench- 1854(g)(3)), the amounts of the UPPER LIMIT OF RISK CORRIDOR.—

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‘‘(i) IN GENERAL.—If the total amount of costs subsection shall affect the amount of the ‘‘(E) Section 1856(b) (regarding compliance specified in paragraph (1)(A) for the plan for MedicareAdvantage basic beneficiary premium with the standards established by regulation the year are more than the first threshold upper that a beneficiary is otherwise required to pay pursuant to such section, including the provi- limit of the risk corridor for the plan for the under the plan for the year under subsection sions of paragraph (3) of such section relating to year, then the Secretary shall increase the total (d)(2)(A). relation to State laws). of the monthly payments made to the preferred ‘‘(6) DISCLOSURE OF INFORMATION.—The pro- ‘‘(F) Section 1852(a)(3)(A) (regarding the au- provider organization offering the plan for the visions of section 1860D–16(b)(7), including sub- thority of organizations to include supplemental year under subsection (c)(1)(A) by an amount paragraph (B) of such section, shall apply to a health care benefits and, on and after January equal to the sum of— preferred provider organization and a preferred 1, 2006, enhanced medical benefits under the ‘‘(I) 50 percent of the amount of such total provider organization plan in the same manner plan subject to the approval of the Secretary). costs which are more than such first threshold as such provisions apply to an eligible entity ‘‘(G) The provisions of part C relating to upper limit of the risk corridor and not more and a Medicare Prescription Drug plan under timelines for benefit filings, contract renewal, than the second threshold upper limit of the risk part D. and beneficiary notification. corridor for the plan for the year (as specified ‘‘(f) ORGANIZATIONAL AND FINANCIAL RE- ‘‘(H) Section 1854(e), or, on and after January under paragraph (3)(A)(iv)); and QUIREMENTS FOR PREFERRED PROVIDER ORGANI- 1, 2006, section 1854(f) (relating to proposed cost- ‘‘(II) 90 percent of the amount of such total ZATIONS.—A preferred provider organization sharing under the contract being subject to re- costs which are more than such second thresh- shall be organized and licensed under State law view by the Secretary).’’. old upper limit of the risk corridor. as a risk-bearing entity eligible to offer health (c) PERMITTING DEDICATED GROUP PRACTICE ‘‘(C) REDUCTION IN PAYMENT IF COSTS BELOW insurance or health benefits coverage in each HEALTH MAINTENANCE ORGANIZATIONS TO PAR- LOWER LIMIT OF RISK CORRIDOR.—If the total State within the preferred provider region in TICIPATE IN THE MEDICARE COST CONTRACT PRO- amount of costs specified in paragraph (1)(A) which it offers a preferred provider organization GRAM.—Section 1876(h)(6) of the Social Security for the plan for the year are less than the first plan. Act (42 U.S.C. 1395mm(h)(6)), as redesignated threshold lower limit of the risk corridor for the ‘‘(g) INAPPLICABILITY OF PROVIDER-SPON- and amended by subsections (a) and (b), is plan for the year, then the Secretary shall re- SORED ORGANIZATION SOLVENCY STANDARDS.— amended— duce the total of the monthly payments made to The requirements of section 1856 shall not apply (1) in subparagraph (A), by striking ‘‘After the preferred provider organization offering the with respect to preferred provider organizations. the date of the enactment’’ and inserting ‘‘Ex- plan for the year under subsection (c)(1)(A) by ‘‘(h) CONTRACTS WITH PREFERRED PROVIDER cept as provided in subparagraph (C), after the an amount (or otherwise recover from the plan ORGANIZATIONS.—The provisions of section 1857 date of the enactment’’; an amount) equal to— shall apply to a preferred provider organization (2) in subparagraph (B), by striking ‘‘sub- ‘‘(i) 50 percent of the amount of such total plan offered by a preferred provider organiza- paragraph (C)’’ and inserting ‘‘subparagraph costs which are less than such first threshold tion under this section.’’. (D)’’; lower limit of the risk corridor and not less than (c) PREFERRED PROVIDER TERMINOLOGY DE- (3) by redesignating subparagraph (C) as sub- the second threshold lower limit of the risk cor- FINED.—Section 1859(a) is amended by adding at paragraph (D); and ridor for the plan for the year (as specified the end the following new paragraph: (4) by inserting after subparagraph (B), the under paragraph (3)(A)(ii)); and ‘‘(3) PREFERRED PROVIDER ORGANIZATION; following new subparagraph: ‘‘(ii) 90 percent of the amount of such total PREFERRED PROVIDER ORGANIZATION PLAN; PRE- ‘‘(C) Subject to paragraph (5) and subpara- costs which are less than such second threshold FERRED PROVIDER REGION.—The terms ‘preferred graph (D), the Secretary shall approve an appli- lower limit of the risk corridor. provider organization’, ‘preferred provider orga- cation to enter into a reasonable cost contract ‘‘(3) ESTABLISHMENT OF RISK CORRIDORS.— nization plan’, and ‘preferred provider region’ under this section if— ‘‘(A) IN GENERAL.—For 2006 and 2007, the Sec- have the meaning given such terms in section ‘‘(i) the application is submitted to the Sec- retary shall establish a risk corridor for each 1858(a)(2).’’. retary by a health maintenance organization (as preferred provider organization plan. The risk Subtitle C—Other Managed Care Reforms defined in section 1301(a) of the Public Health corridor for a plan for a year shall be equal to SEC. 221. EXTENSION OF REASONABLE COST CON- Service Act) that, as of January 1, 2004, and ex- a range as follows: TRACTS. cept as provided in section 1301(b)(3)(B) of such ‘‘(i) FIRST THRESHOLD LOWER LIMIT.—The first (a) FIVE-YEAR EXTENSION.—Section Act, provides at least 85 percent of the services threshold lower limit of such corridor shall be 1876(h)(5)(C) (42 U.S.C. 1395mm(h)(5)(C)) is of a physician which are provided as basic equal to— amended by striking ‘‘2004’’ and inserting health services through a medical group (or ‘‘(I) the target amount described in subpara- ‘‘2009’’. groups), as defined in section 1302(4) of such graph (B) for the plan; minus (b) APPLICATION OF CERTAIN Act; and ‘‘(II) an amount equal to 5 percent of such MEDICARE+CHOICE REQUIREMENTS TO COST ‘‘(ii) the Secretary determines that the organi- target amount. CONTRACTS EXTENDED OR RENEWED AFTER zation meets the requirements applicable to such ‘‘(ii) SECOND THRESHOLD LOWER LIMIT.—The 2003.—Section 1876(h) (42 U.S.C. 1395mm(h)(5)), organizations and contracts under this sec- second threshold lower limit of such corridor as amended by subsection (a), is amended— tion.’’. shall be equal to— (1) by redesignating paragraph (5) as para- SEC. 222. SPECIALIZED MEDICARE+CHOICE ‘‘(I) the target amount described in subparagraph (6); and PLANS FOR SPECIAL NEEDS BENE- graph (B) for the plan; minus (2) by inserting after paragraph (4) the fol- FICIARIES. ‘‘(II) an amount equal to 10 percent of such lowing new paragraph: (a) TREATMENT AS COORDINATED CARE target amount. ‘‘(5) Any reasonable cost reimbursement con- PLAN.—Section 1851(a)(2)(A) (42 U.S.C. 1395w– ‘‘(iii) FIRST THRESHOLD UPPER LIMIT.—The tract with an eligible organization under this 21(a)(2)(A)) is amended by adding at the end the first threshold upper limit of such corridor shall subsection that is extended or renewed on or following new sentence: ‘‘Specialized be equal to the sum of— after the date of enactment of the Prescription Medicare+Choice plans for special needs bene- ‘‘(I) such target amount; and Drug and Medicare Improvements Act of 2003 ficiaries (as defined in section 1859(b)(4)) may be ‘‘(II) the amount described in clause (i)(II). for plan years beginning on or after January 1, any type of coordinated care plan.’’. ‘‘(iv) SECOND THRESHOLD UPPER LIMIT.—The 2004, shall provide that the following provisions (b) SPECIALIZED MEDICARE+CHOICE PLAN FOR second threshold upper limit of such corridor of the Medicare+Choice program under part C SPECIAL NEEDS BENEFICIARIES DEFINED.—Sec- shall be equal to the sum of— (and, on and after January 1, 2006, the provi- tion 1859(b) (42 U.S.C. 1395w–28(b)) is amended ‘‘(I) such target amount; and sions of the MedicareAdvantage program under by adding at the end the following new para- ‘‘(II) the amount described in clause (ii)(II). such part) shall apply to such organization and graph: ‘‘(B) TARGET AMOUNT DESCRIBED.—The target such contract in a substantially similar manner ‘‘(4) SPECIALIZED MEDICARE+CHOICE PLANS amount described in this paragraph is, with re- as such provisions apply to Medicare+Choice or- FOR SPECIAL NEEDS BENEFICIARIES.— spect to a preferred provider organization plan ganizations and Medicare+Choice plans (or, on ‘‘(A) IN GENERAL.—The term ‘specialized offered by a preferred provider organization in a and after January 1, 2006, MedicareAdvantage Medicare+Choice plans for special needs bene- year, an amount equal to the sum of— organizations and MedicareAdvantage plans, ficiaries’ means a Medicare+Choice plan that— ‘‘(i) the total monthly payments made to the respectively) under such part: ‘‘(i) exclusively serves special needs bene- organization for enrollees in the plan for the ‘‘(A) Paragraph (1) of section 1852(e) (relating ficiaries (as defined in subparagraph (B)), or year under subsection (c)(1)(A); and to the requirement of having an ongoing quality ‘‘(ii) to the extent provided in regulations pre- ‘‘(ii) the total MedicareAdvantage basic bene- assurance program) and paragraph (2)(B) of scribed by the Secretary, disproportionately ficiary premiums collected for such enrollees for such section (relating to the required elements serves such special needs beneficiaries, frail el- the year under subsection (d)(2)(A). for such a program). derly medicare beneficiaries, or both. ‘‘(4) PLANS AT RISK FOR ENTIRE AMOUNT OF ‘‘(B) Section 1852(j)(4) (relating to limitations ‘‘(B) SPECIAL NEEDS BENEFICIARY.—The term ENHANCED MEDICAL BENEFITS.—A preferred pro- on physician incentive plans). ‘special needs beneficiary’ means a vider organization that offers a preferred pro- ‘‘(C) Section 1854(c) (relating to the require- Medicare+Choice eligible individual who— vider organization plan that provides enhanced ment of uniform premiums among individuals ‘‘(i) is institutionalized (as defined by the Sec- medial benefits under section 1852(a)(3)(D) shall enrolled in the plan). retary); be at full financial risk for the provision of such ‘‘(D) Section 1854(g), or, on and after January ‘‘(ii) is entitled to medical assistance under a benefits. 1, 2006, section 1854(h) (relating to restrictions State plan under title XIX; or ‘‘(5) NO EFFECT ON ELIGIBLE BENEFICIARIES.— on imposition of premium taxes with respect to ‘‘(iii) meets such requirements as the Secretary No change in payments made by reason of this payments to organizations). may determine would benefit from enrollment in

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such a specialized Medicare+Choice plan de- UNDER THIS TITLE.—For provisions relating to and options to implement policies that align per- scribed in subparagraph (A) for individuals with limitations on payments to providers partici- formance with payment under the medicare pro- severe or disabling chronic conditions.’’. pating under the State plan under title XIX gram under title XVIII of the Social Security (c) RESTRICTION ON ENROLLMENT PER- that do not have a contract with a PACE pro- Act (42 U.S.C. 1395 et seq.). MITTED.—Section 1859 (42 U.S.C. 1395w–28) is vider establishing payment amounts for services (2) SPECIFIC MATTERS EVALUATED.—In con- amended by adding at the end the following covered under such plan (but not under this ducting the evaluation under paragraph (1), the new subsection: title) when such services are furnished to enroll- Institute shall— ‘‘(f) RESTRICTION ON ENROLLMENT FOR SPE- ees of that PACE provider, see section (A) catalogue, review, and evaluate the valid- CIALIZED MEDICARE+CHOICE PLANS FOR SPECIAL 1902(a)(66).’’. ity of leading health care performance meas- NEEDS BENEFICIARIES.—In the case of a special- (b) MEDICAID SERVICES.— ures; ized Medicare+Choice plan (as defined in sub- (1) REQUIREMENT UNDER STATE PLAN.—Section (B) catalogue and evaluate the success and section (b)(4)), notwithstanding any other provi- 1902(a) (42 U.S.C. 1396a(a)) is amended— utility of alternative performance incentive pro- sion of this part and in accordance with regula- (A) in paragraph (64), by striking ‘‘and’’ at grams in public or private sector settings; and tions of the Secretary and for periods before the end; (C) identify and prioritize options to imple- January 1, 2008, the plan may restrict the en- (B) in paragraph (65), by striking the period ment policies that align performance with pay- rollment of individuals under the plan to indi- at the end and inserting ‘‘; and’’; and ment under the medicare program that individuals who are within 1 or more classes of spe- (C) by inserting after paragraph (65) the fol- cate— cial needs beneficiaries.’’. lowing new paragraph: (i) the performance measurement set to be (d) REPORT TO CONGRESS.—Not later than De- ‘‘(66) provide, with respect to services covered used and how that measurement set will be up- cember 31, 2006, the Secretary shall submit to under the State plan (but not under title XVIII) dated; Congress a report that assesses the impact of that are furnished to a PACE program eligible (ii) the payment policy that will reward per- specialized Medicare+Choice plans for special individual enrolled with a PACE provider by a formance; and provider participating under the State plan that needs beneficiaries on the cost and quality of (iii) the key implementation issues (such as does not have a contract with the PACE pro- services provided to enrollees. Such report shall data and information technology requirements) vider that establishes payment amounts for such include an assessment of the costs and savings that must be addressed. services, that such participating provider may to the medicare program as a result of amend- (3) SCOPE OF HEALTH CARE PERFORMANCE not require the PACE provider to pay the par- ments made by subsections (a), (b), and (c). MEASURES.—The health care performance meas- ticipating provider an amount greater than the (e) EFFECTIVE DATES.— ures described in paragraph (2)(A) shall encom- amount that would otherwise be payable for the (1) IN GENERAL.—The amendments made by pass a variety of perspectives, including physi- service to the participating provider under the subsections (a), (b), and (c) shall take effect on cians, hospitals, health plans, purchasers, and State plan for the State where the PACE pro- the date of enactment of this Act. consumers. (2) DEADLINE FOR ISSUANCE OF REQUIREMENTS vider is located (in accordance with regulations (4) CONSULTATION WITH MEDPAC.—In evalu- issued by the Secretary).’’. FOR SPECIAL NEEDS BENEFICIARIES; TRANSI- ating the matters described in paragraph (2)(C), (2) REFERENCE IN MEDICAID STATUTE.—Section TION.—No later than 1 year after the date of en- the Institute shall consult with the Medicare 1934(b) (42 U.S.C. 1396u–4(b)) is amended by actment of this Act, the Secretary shall issue Payment Advisory Commission established adding at the end the following new para- final regulations to establish requirements for under section 1805 of the Social Security Act (42 graphs: special needs beneficiaries under section U.S.C. 1395b–6). 1859(b)(4)(B)(iii) of the Social Security Act, as ‘‘(3) TREATMENT OF MEDICARE SERVICES FUR- (b) REPORT.—Not later than the date that is NISHED BY NONCONTRACT PHYSICIANS AND OTHER added by subsection (b). 18 months after the date of enactment of this SEC. 223. PAYMENT BY PACE PROVIDERS FOR ENTITIES.— ‘‘(A) APPLICATION OF MEDICARE+CHOICE RE- Act, the Institute shall submit to the Secretary MEDICARE AND MEDICAID SERVICES of Health and Human Services, the Committees FURNISHED BY NONCONTRACT PRO- QUIREMENT WITH RESPECT TO MEDICARE SERVICES VIDERS. FURNISHED BY NONCONTRACT PHYSICIANS AND on Ways and Means and Energy and Commerce of the House of Representatives, and the Com- (a) MEDICARE SERVICES.— OTHER ENTITIES.—Section 1852(k)(1) (relating to (1) MEDICARE SERVICES FURNISHED BY PRO- limitations on balance billing against mittee on Finance of the Senate a report on the VIDERS OF SERVICES.—Section 1866(a)(1)(O) (42 Medicare+Choice organizations for noncontract evaluation conducted under subsection (a)(1) U.S.C. 1395cc(a)(1)(O)) is amended— physicians and other entities with respect to describing the findings of such evaluation and (A) by striking ‘‘part C or’’ and inserting services covered under title XVIII) shall apply recommendations for an overall strategy and ap- ‘‘part C, with a PACE provider under section to PACE providers, PACE program eligible indi- proach for aligning payment with performance 1894 or 1934, or’’; viduals enrolled with such PACE providers, and in the original medicare fee-for-service program (B) by striking ‘‘(i)’’; physicians and other entities that do not have a under parts A and B of title XVIII of the Social (C) by striking ‘‘and (ii)’’; and contract establishing payment amounts for serv- Security Act, the Medicare+Choice program (D) by striking ‘‘members of the organization’’ ices furnished to such an individual in the same under part C of such title, and any other pro- and inserting ‘‘members of the organization or manner as such section applies to grams under such title XVIII. PACE program eligible individuals enrolled with Medicare+Choice organizations, individuals en- (c) AUTHORIZATION OF APPROPRIATIONS.— the PACE provider,’’. rolled with such organizations, and physicians There are authorized to be appropriated (2) MEDICARE SERVICES FURNISHED BY PHYSI- and other entities referred to in such section. $1,000,000 for purposes of conducting the eval- CIANS AND OTHER ENTITIES.—Section 1894(b) (42 ‘‘(B) REFERENCE TO RELATED PROVISION FOR uation and preparing the report required by this U.S.C. 1395eee(b)) is amended by adding at the NONCONTRACT PROVIDERS OF SERVICES.—For the section. end the following new paragraphs: provision relating to limitations on balance bill- SEC. 225. EXPANDING THE WORK OF MEDICARE ‘‘(3) TREATMENT OF MEDICARE SERVICES FUR- ing against PACE providers for services covered QUALITY IMPROVEMENT ORGANIZA- NISHED BY NONCONTRACT PHYSICIANS AND OTHER under title XVIII furnished by noncontract pro- TIONS TO INCLUDE PARTS C AND D. ENTITIES.— viders of services, see section 1866(a)(1)(O). (a) APPLICATION TO MEDICARE MANAGED CARE ‘‘(A) APPLICATION OF MEDICARE+CHOICE RE- ‘‘(4) REFERENCE TO RELATED PROVISION FOR AND PRESCRIPTION DRUG COVERAGE.—Section QUIREMENT WITH RESPECT TO MEDICARE SERVICES SERVICES COVERED UNDER THIS TITLE BUT NOT 1154(a)(1) (42 U.S.C. 1320c–3(a)(1)) is amended FURNISHED BY NONCONTRACT PHYSICIANS AND UNDER TITLE XVIII.—For provisions relating to by inserting ‘‘, Medicare+Choice organizations OTHER ENTITIES.—Section 1852(k)(1) (relating to limitations on payments to providers partici- and MedicareAdvantage organizations under limitations on balance billing against pating under the State plan under this title that part C, and prescription drug card sponsors and Medicare+Choice organizations for noncontract do not have a contract with a PACE provider eligible entities under part D’’ after ‘‘under sec- physicians and other entities with respect to establishing payment amounts for services cov- tion 1876’’. services covered under this title) shall apply to ered under such plan (but not under title XVIII) (b) PRESCRIPTION DRUG THERAPY QUALITY IM- PACE providers, PACE program eligible individ- when such services are furnished to enrollees of PROVEMENT.—Section 1154(a) (42 U.S.C. 1320c– uals enrolled with such PACE providers, and that PACE provider, see section 1902(a)(66).’’. 3(a)) is amended by adding at the end the fol- physicians and other entities that do not have a (c) EFFECTIVE DATE.—The amendments made lowing new paragraph: contract establishing payment amounts for serv- by this section shall apply to services furnished ‘‘(17) The organization shall execute its re- ices furnished to such an individual in the same on or after January 1, 2004. sponsibilities under subparagraphs (A) and (B) manner as such section applies to SEC. 224. INSTITUTE OF MEDICINE EVALUATION of paragraph (1) by offering to providers, practi- Medicare+Choice organizations, individuals en- AND REPORT ON HEALTH CARE PER- tioners, prescription drug card sponsors and eli- rolled with such organizations, and physicians FORMANCE MEASURES. gible entities under part D, and and other entities referred to in such section. (a) EVALUATION.— Medicare+Choice and MedicareAdvantage plans ‘‘(B) REFERENCE TO RELATED PROVISION FOR (1) IN GENERAL.—Not later than the date that under part C quality improvement assistance NONCONTRACT PROVIDERS OF SERVICES.—For the is 2 months after the date of enactment of this pertaining to prescription drug therapy. For provision relating to limitations on balance bill- Act, the Secretary of Health and Human Serv- purposes of this part and title XVIII, the func- ing against PACE providers for services covered ices shall enter into an arrangement under tions described in this paragraph shall be treat- under this title furnished by noncontract pro- which the Institute of Medicine of the National ed as a review function.’’. viders of services, see section 1866(a)(1)(O). Academy of Sciences (in this section referred to (c) EFFECTIVE DATE.—The amendments made ‘‘(4) REFERENCE TO RELATED PROVISION FOR as the ‘‘Institute’’) shall conduct an evaluation by this section shall apply on and after January SERVICES COVERED UNDER TITLE XIX BUT NOT of leading health care performance measures 1, 2004.

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SEC. 226. EXTENSION OF DEMONSTRATION FOR ‘‘(A) IN GENERAL.—Notwithstanding sub- retary shall submit a report to Congress and the ESRD MANAGED CARE. section (d)(1), for purposes of applying section Comptroller General of the United States that The Secretary shall extend without interrup- 1854(a)(2)(A)(i), the plan bid for a highly com- includes— tion, through December 31, 2007, the approval of petitive region shall consist of a dollar amount ‘‘(A) a detailed description of— the demonstration project, Contract No. H1021, that represents the total amount that the plan is ‘‘(i) the total amount expended as a result of under the authority of section 2355(b)(1)(B)(iv) willing to accept (not taking into account the the application of this subsection in the pre- of the Deficit Reduction Act of 1984, as amended application of the comprehensive risk adjust- vious year compared to the total amount that by section 13567 of the Omnibus Reconciliation ment methodology under section 1853(a)(3)) for would have been expended under this title in Act of 1993. Such approval shall be subject to providing coverage of only the benefits described the year if this subsection had not been enacted; the terms and conditions in effect for the 2002 in section 1852(a)(1)(A) to an individual enrolled ‘‘(ii) the projections of the total amount that project year with respect to eligible participants in the plan that resides in the service area of the will be expended as a result of the application of and covered benefits. The Secretary shall set the plan for a month. this subsection in the year in which the report monthly capitation rate for enrollees on the ‘‘(B) CONSTRUCTION.—Nothing in subpara- is submitted compared to the total amount that basis of the reasonable medical and direct ad- graph (A) shall be construed as permitting a would have been expended under this title in ministrative costs of providing those benefits to preferred provider organization plan not to pro- the year if this subsection had not been enacted; such participants. vide coverage for the benefits described in sec- ‘‘(iii) amounts remaining within the funding Subtitle D—Evaluation of Alternative tion 1852(a)(1)(C). limitation specified in paragraph (5); and Payment and Delivery Systems ‘‘(4) PAYMENTS TO PREFERRED PROVIDER OR- ‘‘(iv) the steps that the Secretary will take GANIZATIONS IN HIGHLY COMPETITIVE AREAS.— under clauses (i) and (ii) of paragraph (5)(B) to SEC. 231. ESTABLISHMENT OF ALTERNATIVE PAY- With respect to highly competitive regions, the ensure that the application of this subsection MENT SYSTEM FOR PREFERRED PRO- VIDER ORGANIZATIONS IN HIGHLY following rules shall apply: will not cause expenditures to exceed the appli- COMPETITIVE REGIONS. ‘‘(A) IN GENERAL.—Notwithstanding sub- cable amount described in paragraph (5)(A); section (c), of the plans described in subsection (a) ESTABLISHMENT OF ALTERNATIVE PAYMENT and (d)(1)(E), the Secretary shall substitute the sec- SYSTEM FOR PREFERRED PROVIDER ORGANIZA- ‘‘(B) a certification from the Chief Actuary of ond lowest bid for the benchmark applicable TIONS IN HIGHLY COMPETITIVE REGIONS.—Sec- the Centers for Medicare & Medicaid Services tion 1858 (as added by section 211(b)) is amended under subsection (c)(4). that the descriptions under clauses (i), (ii), (iii), ‘‘(B) IF THERE ARE FEWER THAN THREE BIDS.— by adding at the end the following new sub- and (iv) of subparagraph (A) are reasonable, ac- Notwithstanding subsection (c), if there are section: curate, and based on generally accepted actu- fewer than 3 bids in a highly competitive region ‘‘(i) ALTERNATIVE PAYMENT METHODOLOGY arial principles and methodologies. for a year, the Secretary shall substitute the FOR HIGHLY COMPETITIVE REGIONS.— ‘‘(8) BIENNIAL GAO REPORTS.—Not later than lowest bid for the benchmark applicable under ‘‘(1) ANNUAL DETERMINATION AND DESIGNA- January 1, 2011, and biennially thereafter, the subsection (c)(4). TION.— Comptroller General of the United States shall ‘‘(5) FUNDING LIMITATION.— ‘‘(A) IN 2008.—In 2008, prior to the date on submit to the Secretary and Congress a report ‘‘(A) IN GENERAL.— on the designation of highly competitive regions which the Secretary expects to publish the risk ‘‘(i) IN GENERAL.—The total amount expended under this subsection and the application of the adjusters under section 1860D–11, the Secretary as a result of the application of this subsection payment system under this subsection within shall designate a limited number (but in no case during the period or year, as applicable, may such regions. Each report shall include— fewer than 1) of preferred provider regions not exceed the applicable amount (as defined in (other than the region described in subsection ‘‘(A) an evaluation of— clause (ii)). ‘‘(i) the quality of care provided to bene- (a)(2)(C)(ii)) as highly competitive regions. ‘‘(ii) APPLICABLE AMOUNT DEFINED.—In this ficiaries enrolled in a MedicareAdvantage pre- ‘‘(B) SUBSEQUENT YEARS.—For each year (be- paragraph, the term ‘applicable amount’ ferred provider plan in a highly competitive re- ginning with 2009) the Secretary may designate means— a limited number of preferred provider regions ‘‘(I) for the period beginning on January 1, gion; (other than the region described in subsection 2009, and ending on September 30, 2013, the total ‘‘(ii) the satisfaction of beneficiaries with ben- (a)(2)(C)(ii)) as highly competitive regions in ad- amount that would have been expended under efits under such a plan; ‘‘(iii) the costs to the medicare program for dition to any region designated as a highly com- this title during the period if this subsection had payments made to such plans; and petitive region under subparagraph (A). not been enacted plus $6,000,000,000; and ‘‘(iv) any improvements in the delivery of ‘‘(C) CONSIDERATIONS.—In determining which ‘‘(II) for fiscal year 2014 and any subsequent health care services under such a plan; preferred provider regions to designate as highly fiscal year, the total amount that would have ‘‘(B) a comparative analysis of the benchmark competitive regions under subparagraph (A) or been expended under this title during the year if system applicable under the other provisions of (B), the Secretary shall consider the following: this subsection had not been enacted. this section and the payment system applicable ‘‘(i) Whether the application of this subsection ‘‘(B) APPLICATION OF LIMITATION.—If the Sec- in highly competitive regions under this sub- to the preferred provider region would enhance retary determines that the application of this section; and the participation of preferred provider organiza- subsection will cause expenditures to exceed the ‘‘(C) recommendations for such legislation or tion plans in that region. applicable amount, the Secretary shall— administrative action as the Comptroller Gen- ‘‘(ii) Whether the Secretary anticipates that ‘‘(i) take appropriate steps to stay within the eral determines to be appropriate. there is likely to be at least 3 bids submitted applicable amount, including through providing ‘‘(9) REPORT ON BUDGET NEUTRALITY FOR FIS- under subsection (d)(1) with respect to the pre- limitations on enrollment; or CAL YEARS AFTER 2013.— ferred provider region if the Secretary des- ‘‘(ii) rescind the designation under subpara- ‘‘(A) IN GENERAL.—If the Secretary intends to ignates such region as a highly competitive re- graph (A) or (B) of paragraph (1) of 1 or more preferred provider regions as highly competitive designate 1 or more regions as highly competi- gion under subparagraph (A) or (B). tive regions with respect to calendar 2014 or any ‘‘(iii) Whether the Secretary expects that regions. ‘‘(C) TRANSITION.—If the Secretary rescinds a subsequent calendar year, the Secretary shall MedicareAdvantage eligible individuals will designation under subparagraph (A) or (B) of submit a report to Congress indicating such in- elect preferred provider organization plans in paragraph (1) pursuant to subparagraph (B)(ii) tent no later than April 1 of the calendar year the preferred provider region if the region is des- with respect to a preferred provider region, the prior to the calendar year in which the applica- ignated as a highly competitive region under Secretary shall provide for an appropriate tran- ble designation year begins. subparagraph (A) or (B). sition from the payment system applicable under ‘‘(B) REQUIREMENTS.—A report submitted ‘‘(iv) Whether the designation of the preferred this subsection to the payment system described under subparagraph (A) shall— provider region as a highly competitive region in the other provisions of this section in that re- ‘‘(i) specify the steps (if any) that the Sec- will permit compliance with the limitation de- gion. Any amount expended by reason of the retary will take pursuant to paragraph (5)(B) to scribed in paragraph (5). preceding sentence shall be considered to be part ensure that the total amount expended as a re- In considering the matters described in clauses of the total amount expended as a result of the sult of the application of this subsection during (i) through (iv), the Secretary shall give special application of this subsection for purposes of the year will not exceed the applicable amount consideration to preferred provider regions applying the limitation under subparagraph for the year (as defined in paragraph where no bids were submitted under subsection (A). (5)(A)(ii)(II)); and (d)(1) for the previous year. ‘‘(D) APPLICATION.—Notwithstanding para- ‘‘(ii) contain a certification from the Chief Ac- ‘‘(2) EFFECT OF DESIGNATION.—If a preferred graph (1)(B), on or after January 1 of the year tuary of the Centers for Medicare and Medicaid provider region is designated as a highly com- in which the fiscal year described in subpara- Services that such steps will meet the require- petitive region under subparagraph (A) or (B) of graph (A)(ii)(II) begins, the Secretary may des- ments of paragraph (5)(A) based on an analysis paragraph (1)— ignate appropriate regions under such para- using generally accepted actuarial principles ‘‘(A) the provisions of this subsection shall graph. and methodologies.’’. apply to such region and shall supersede the ‘‘(6) LIMITATION OF JUDICIAL REVIEW.—There (b) CONFORMING AMENDMENT.—Section provisions of this part relating to benchmarks shall be no administrative or judicial review 1858(c)(3)(A)(i) (as added by section 211(b)) is for preferred provider regions; and under section 1869, section 1878, or otherwise, of amended to read as follows: ‘‘(B) such region shall continue to be a highly designations made under subparagraph (A) or ‘‘(i) Whether each preferred provider region competitive region until such designation is re- (B) of paragraph (1). has been designated as a highly competitive rescinded pursuant to paragraph (5)(B)(ii). ‘‘(7) SECRETARY REPORTS.—Not later than gion under subparagraph (A) or (B) of sub- ‘‘(3) SUBMISSION OF BIDS.— April 1 of each year (beginning in 2010), the Sec- section (i)(1) and the benchmark amount for

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FEE-FOR-SERVICE MODERNIZATION ficiaries receiving benefits or services under the CAL YEARS AFTER 2013.— PROJECTS. projects; (i) IN GENERAL.—If the Secretary intends to (a) ESTABLISHMENT.— (B) the satisfaction of beneficiaries receiving continue the projects under this section for fis- (1) REVIEW AND REPORT ON RESULTS OF EXIST- benefits or services under the projects; cal year 2014 or any subsequent fiscal year, the ING DEMONSTRATIONS.— (C) the costs to the medicare program under Secretary shall submit a report to Congress indi- (A) REVIEW.—The Secretary shall conduct an the projects; and cating such intent no later than April 1 of the empirical review of the results of the demonstra- (D) any improvements in the delivery of year prior to the year in which the fiscal year tions under sections 442, 443, and 444. health care services under the projects; and begins. (B) REPORT.—Not later than January 1, 2008, (2) recommendations for such legislation or (ii) REQUIREMENTS.—A report submitted under the Secretary shall submit a report to Congress administrative action as the Comptroller Gen- clause (i) shall— on the empirical review conducted under sub- eral determines to be appropriate. (I) specify the steps (if any) that the Secretary paragraph (A) which shall include estimates of (e) FUNDING.— will take pursuant to paragraph (4) to ensure the total costs of the demonstrations, including (1) IN GENERAL.—Payments for the costs of that the limitations described in paragraph expenditures as a result of the provision of serv- carrying out the projects under this section (2)(B) will not be violated for the year; and ices provided to beneficiaries under the dem- shall be made from the Federal Hospital Insur- (II) contain a certification from the Chief Ac- onstrations that are incidental to the services ance Trust Fund under section 1817 of the So- tuary of the Centers for Medicare and Medicaid provided under the demonstrations, and all cial Security Act (42 U.S.C. 1395i) and the Fed- Services that such steps will meet the require- other expenditures under title XVIII of the So- eral Supplementary Insurance Trust Fund ments of paragraph (2) based on an analysis cial Security Act. The report shall also include under section 1841 of such Act (42 U.S.C. 1395t), using generally accepted actuarial principles a certification from the Chief Actuary of the as determined appropriate by the Secretary. and methodologies. Centers for Medicare & Medicaid Services that (2) LIMITATION.—The total amount expended (4) APPLICATION OF LIMITATION.—If the Sec- such estimates are reasonable, accurate, and under the medicare fee-for-service program retary determines that the projects under this based on generally accepted actuarial principles under parts A and B of title XVIII of the Social section will cause the limitations described in and methodologies. Security Act (including all amounts expended as subparagraphs (A) and (B) of paragraph (2) to (2) PROJECTS.—Beginning in 2009, the Sec- a result of the projects under this section) dur- be violated, the Secretary shall take appropriate retary, based on the empirical review conducted ing the period or year, as applicable, may not steps to reduce spending under the projects, in- under paragraph (1), shall establish projects exceed— cluding through reducing the scope, site, and under which medicare beneficiaries receiving (A) for the period beginning on January 1, duration of the projects. benefits under the medicare fee-for-service pro- 2009, and ending on September 30, 2013, an (5) AUTHORITY.—Beginning in 2014, the Sec- gram under parts A and B of title XVIII of the amount equal to the total amount that would retary shall make necessary spending adjust- Social Security Act are provided with coverage have been expended under the medicare fee-for- ments (including pro rata reductions in pay- of enhanced benefits or services under such pro- service program under parts A and B of title ments to health care providers under the medi- gram. The purpose of such projects is to evalu- XVIII of the Social Security Act during the pe- care program) to recoup amounts so that the ate whether the provision of such enhanced riod if the projects had not been conducted plus limitations described in subparagraphs (A) and benefits or services to such beneficiaries— $6,000,000,000; and (B) of paragraph (2) are not violated. (A) improves the quality of care provided to (B) for fiscal year 2014 and any subsequent Subtitle E—National Bipartisan Commission such beneficiaries under the medicare program; fiscal year, an amount equal to the total on Medicare Reform (B) improves the health care delivery system amount that would have been expended under SEC. 241. MEDICAREADVANTAGE GOAL; ESTAB- under the medicare program; and the medicare fee-for-service program under parts LISHMENT OF COMMISSION. (C) results in reduced expenditures under the A and B of such title during the year if the (a) ENROLLMENT GOAL.—It is the goal of this medicare program. projects had not been conducted. title that, not later than January 1, 2010, at (2) ENHANCED BENEFITS OR SERVICES.—For (3) MONITORING AND REPORTS.— least 15 percent of individuals entitled to, or en- purposes of this section, enhanced benefits or (A) ONGOING MONITORING BY THE SECRETARY rolled for, benefits under part A of title XVIII of services shall include— TO ENSURE FUNDING LIMITATION IS NOT VIO- the Social Security Act and enrolled under part (A) preventive services not otherwise covered LATED.—The Secretary shall continually mon- B of such title should be enrolled in a under title XVIII of the Social Security Act; itor expenditures made under title XVIII of the MedicareAdvantage plan, as determined by the (B) chronic care coordination services; Social Security Act by reason of the projects Center for Medicare Choices. (C) disease management services; or under this section to ensure that the limitations (b) FAILURE TO ACHIEVE GOAL.—If the goal (D) other benefits or services that the Sec- described in subparagraphs (A) and (B) of para- described in subsection (a) is not met by Janu- retary determines will improve preventive health graph (2) are not violated. ary 1, 2012, as determined by the Center for care for medicare beneficiaries, result in im- (B) REPORTS.—Not later than April 1 of each Medicare Choices, there shall be established a proved chronic disease management, and man- year (beginning in 2010), the Secretary shall commission as described in section 2. agement of complex, life-threatening, or high- submit a report to Congress and the Comptroller SEC. 242. NATIONAL BIPARTISAN COMMISSION cost conditions and are consistent with the goals General of the United States that includes— ON MEDICARE REFORM. described in subparagraphs (A), (B), and (C) of (i) a detailed description of— (a) ESTABLISHMENT.—Upon a determination paragraph (1). (I) the total amount expended under the medi- under section 241(b) that the enrollment goal (b) PROJECT SITES AND DURATION.— care fee-for-service program under parts A and has not been met, there shall be established a (1) IN GENERAL.—Subject to subsection (e)(2), B of title XVIII of the Social Security Act (in- commission to be known as the National Bipar- the projects under this section shall be con- cluding all amounts expended as a result of the tisan Commission on Medicare Reform (in this ducted— projects under this section) during the previous section referred to as the ‘‘Commission’’). (A) in a region or regions that are comparable year compared to the total amount that would (b) DUTIES OF THE COMMISSION.—The Commis- (as determined by the Secretary) to the region or have been expended under the original medicare sion shall— regions that are designated as a highly competi- fee-for-service program in the year if the (1) review and analyze the long-term financial tive region under subparagraph (A) or (B) of projects had not been conducted; condition of the medicare program under title section 1858(i)(1) of the Social Security Act, as (II) the projections of the total amount ex- XVIII of the Social Security Act (42 U.S.C. 1395 added by section 231 of this Act; and pended under the medicare fee-for-service pro- et seq.); (B) during the years that a region or regions gram under parts A and B of title XVIII of the (2) identify problems that threaten the finan- are designated as such a highly competitive re- Social Security Act (including all amounts ex- cial integrity of the Federal Hospital Insurance gion. pended as a result of the projects under this sec- Trust Fund and the Federal Supplementary (2) RULE OF CONSTRUCTION.—For purposes of tion) during the year in which the report is sub- Medical Insurance Trust Fund established paragraph (1), a comparable region does not mitted compared to the total amount that would under sections 1817 and 1841 of such Act (42 necessarily mean the identical region. have been expended under the original medicare U.S.C. 1395i and 1395t), including— (c) WAIVER AUTHORITY.—The Secretary shall fee-for-service program in the year if the (A) the financial impact on the medicare pro- waive compliance with the requirements of title projects had not been conducted; gram of the significant increase in the number XVIII of the Social Security Act (42 U.S.C. 1395 (III) amounts remaining within the funding of medicare eligible individuals; and et seq.) only to the extent and for such period as limitation specified in paragraph (2); and (B) the ability of the Federal Government to the Secretary determines is necessary to provide (IV) how the Secretary will change the scope, sustain the program into the future; for enhanced benefits or services consistent with site, and duration of the projects in subsequent (3) analyze potential solutions to the problems the projects under this section. years in order to ensure that the limitations de- identified under paragraph (2) that will ensure (d) BIENNIAL GAO REPORTS.—Not later than scribed in subparagraphs (A) and (B) of para- both the financial integrity of the medicare pro- January 1, 2011, and biennially thereafter for as graph (2) are not violated; and gram and the provision of appropriate benefits long as the projects under this section are being (ii) a certification from the Chief Actuary of under such program, including methods used by conducted, the Comptroller General of the the Centers for Medicare & Medicaid Services other nations to respond to comparable demo- United States shall submit to the Secretary and that the descriptions under subclauses (I), (II), graphic patterns in eligibility for health care

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benefits for elderly and disabled individuals and personnel as the executive director considers ap- (9) PRINTING.—For purposes of costs relating trends in employment-related health care for re- propriate. to printing and binding, including the cost of tirees; (3) APPLICABILITY OF CIVIL SERVICE LAWS.— personnel detailed from the Government Print- (4) make recommendations to restore the sol- The staff of the Commission shall be appointed ing Office, the Commission shall be deemed to be vency of the Federal Hospital Insurance Trust without regard to the provisions of title 5, a committee of Congress. Fund and the financial integrity of the Federal United States Code, governing appointments in (f) REPORT.—Not later than April 1, 2014, the Supplementary Medical Insurance Trust Fund; the competitive service, and shall be paid with- Commission shall submit to the President and (5) make recommendations for establishing the out regard to the provisions of chapter 51 and Congress a report and an implementation bill appropriate financial structure of the medicare subchapter III of chapter 53 of such title (relat- that shall contain a detailed statement of only program as a whole; ing to classification and General Schedule pay those recommendations, findings, and conclu- (6) make recommendations for establishing the rates). sions of the Commission that receive the ap- appropriate balance of benefits covered under, (4) EXPERTS AND CONSULTANTS.—With the approval of at least 11 members of the Commission. and beneficiary contributions to, the medicare proval of the Commission, the executive director (g) TERMINATION.—The Commission shall ter- program; may procure temporary and intermittent services minate on the date that is 30 days after the date (7) make recommendations for the time periods under section 3109(b) of title 5, United States on which the report and implementation bill is during which the recommendations described in Code. submitted under subsection (f). paragraphs (4), (5) and (6) should be imple- (5) PHYSICAL FACILITIES.—The Administrator SEC. 243. CONGRESSIONAL CONSIDERATION OF mented; of the General Services Administration shall lo- REFORM PROPOSALS. (8) make recommendations on the impact of cate suitable office space for the operation of (a) DEFINITIONS.—In this section: chronic disease and disability trends on future the Commission. The facilities shall serve as the (1) IMPLEMENTATION BILL.—The term ‘‘imple- costs and quality of services under the current headquarters of the Commission and shall in- mentation bill’’ means only a bill that is intro- benefit, financing, and delivery system structure clude all necessary equipment and incidentals duced as provided under subsection (b), and of the medicare program; required for the proper functioning of the Com- contains the proposed legislation included in the (9) make recommendations regarding a commission. report submitted to Congress under section prehensive approach to preserve the medicare (e) POWERS OF COMMISSION.— 242(f), without modification. (2) CALENDAR DAY.—The term ‘‘calendar day’’ program, including ways to increase the effec- (1) HEARINGS AND OTHER ACTIVITIES.—The tiveness of the MedicareAdvantage program and Commission may hold such hearings and under- means a calendar day other than 1 on which either House is not in session because of an ad- to increase MedicareAdvantage enrollment take such other activities as the Commission de- journment of more than 3 days to a date certain. rates; and termines to be necessary to carry out its duties (b) INTRODUCTION; REFERRAL; AND REPORT OR (10) review and analyze such other matters as under this section. DISCHARGE.— the Commission determines appropriate. (2) STUDIES BY GAO.—Upon the request of the (c) MEMBERSHIP.— (1) INTRODUCTION.—On the first calendar day Commission, the Comptroller General shall con- on which both Houses are in session imme- (1) NUMBER AND APPOINTMENT.—The Commis- duct such studies or investigations as the Com- sion shall be composed of 17 members, of whom— diately following the date on which the report is mission determines to be necessary to carry out submitted to Congress under section 242(f), a (A) four shall be appointed by the President; its duties under this section. (B) six shall be appointed by the Majority single implementation bill shall be introduced (3) COST ESTIMATES BY CONGRESSIONAL BUDG- Leader of the Senate, in consultation with the (by request)— ET OFFICE AND OFFICE OF THE CHIEF ACTUARY OF Minority Leader of the Senate, of whom not (A) in the Senate by the Majority Leader of THE CENTERS FOR MEDICARE & MEDICAID.— the Senate, for himself and the Minority Leader more than 4 shall be of the same political party; (A) IN GENERAL.—The Director of the Congres- (C) six shall be appointed by the Speaker of of the Senate, or by Members of the Senate des- sional Budget Office or the Chief Actuary of the the House of Representatives, in consultation ignated by the Majority Leader and Minority Center for Medicare & Medicaid Services, or with the Minority Leader of the House of Rep- Leader of the Senate; and both, shall provide to the Commission, upon the resentatives, of whom not more than 4 shall be (B) in the House of Representatives by the request of the Commission, such cost estimates of the same political party; and Speaker of the House of Representatives, for as the Commission determines to be necessary to (D) one, who shall serve as Chairperson of the himself and the Minority Leader of the House of carry out its duties under this section. Commission, shall be appointed jointly by the Representatives, or by Members of the House of (B) REIMBURSEMENTS.—The Commission shall President, Majority Leader of the Senate, and Representatives designated by the Speaker and reimburse the Director of the Congressional the Speaker of the House of Representatives. Minority Leader of the House of Representa- Budget Office for expenses relating to the em- (2) DEADLINE FOR APPOINTMENT.—Members of tives. ployment in the office of the Director of such the Commission shall be appointed by not later (2) REFERRAL.—The implementation bills in- additional staff as may be necessary for the Di- than October 1, 2012. troduced under paragraph (1) shall be referred (3) TERMS OF APPOINTMENT.—The term of any rector to comply with requests by the Commis- to any appropriate committee of jurisdiction in member appointed under paragraph (1) shall be sion under subparagraph (A). the Senate and any appropriate committee of ju- for the life of the Commission. (4) DETAIL OF FEDERAL EMPLOYEES.—Upon risdiction in the House of Representatives. A (4) MEETINGS.—The Commission shall meet at the request of the Commission, the head of any committee to which an implementation bill is re- the call of the Chairperson or a majority of its Federal agency is authorized to detail, without ferred under this paragraph may report such members. reimbursement, any of the personnel of such bill to the respective House without amendment. (5) QUORUM.—A quorum for purposes of con- agency to the Commission to assist the Commis- (3) REPORT OR DISCHARGE.—If a committee to ducting the business of the Commission shall sion in carrying out its duties under this sec- which an implementation bill is referred has not consist of 8 members of the Commission, except tion. Any such detail shall not interrupt or oth- reported such bill by the end of the 15th cal- that 4 members may conduct a hearing under erwise affect the civil service status or privileges endar day after the date of the introduction of subsection (e). of the Federal employee. such bill, such committee shall be immediately (6) VACANCIES.—A vacancy in the membership (5) TECHNICAL ASSISTANCE.—Upon the request discharged from further consideration of such of the Commission shall be filled, not later than of the Commission, the head of a Federal agency bill, and upon being reported or discharged from 30 days after the Commission is given notice of shall provide such technical assistance to the the committee, such bill shall be placed on the the vacancy, in the same manner in which the Commission as the Commission determines to be appropriate calendar. original appointment was made. Such a vacancy necessary to carry out its duties under this sec- (c) FLOOR CONSIDERATION.— (1) IN GENERAL.—When the committee to shall not affect the power of the remaining tion. which an implementation bill is referred has re- members to carry out the duties of the Commis- (6) USE OF MAILS.—The Commission may use ported, or has been discharged under subsection sion. the United States mails in the same manner and (7) COMPENSATION.—Members of the Commis- under the same conditions as Federal agencies (b)(3), it is at any time thereafter in order (even sion shall receive no additional pay, allowances, and shall, for purposes of the frank, be consid- though a previous motion to the same effect has or benefits by reason of their service on the ered a commission of Congress as described in been disagreed to) for any Member of the respec- Commission. section 3215 of title 39, United States Code. tive House to move to proceed to the consider- (8) EXPENSES.—Each member of the Commis- (7) OBTAINING INFORMATION.—The Commis- ation of the implementation bill, and all points sion shall receive travel expenses and per diem sion may secure directly from any Federal agen- of order against the implementation bill (and in lieu of subsistence in accordance with sec- cy information necessary to enable it to carry against consideration of the implementation bill) tions 5702 and 5703 of title 5, United States out its duties under this section, if the informa- are waived. The motion is highly privileged in Code. tion may be disclosed under section 552 of title the House of Representatives and is privileged (d) STAFF AND SUPPORT SERVICES.— 5, United States Code. Upon request of the in the Senate. The motion is not subject to (1) EXECUTIVE DIRECTOR.— Chairperson of the Commission, the head of amendment, or to a motion to postpone, or to a (A) APPOINTMENT.—The Chairperson shall ap- each such agency shall furnish such informa- motion to proceed to the consideration of other point an executive director of the Commission. tion to the Commission. business. A motion to reconsider the vote by (B) COMPENSATION.—The executive director (8) ADMINISTRATIVE SUPPORT SERVICES.—Upon which the motion is agreed to or disagreed to shall be paid the rate of basic pay for level V of the request of the Commission, the Adminis- shall not be in order. If a motion to proceed to the Executive Schedule under title 5, United trator of General Services shall provide to the the consideration of the implementation bill is States Code. Commission on a reimbursable basis such admin- agreed to, the implementation bill shall remain (2) STAFF.—With the approval of the Commis- istrative support services as the Commission may the unfinished business of the respective House sion, the executive director may appoint such request. until disposed of.

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(2) AMENDMENTS.—An implementation bill ‘‘(A) IN GENERAL.—The Center for Medicare trator and the Administrator of the Centers for may not be amended in the Senate or the House Choices shall be headed by an Administrator (in Medicare & Medicaid Services in carrying out of Representatives. this section referred to as the ‘Administrator’) the programs under this title. (3) DEBATE.—Debate on the implementation who shall be appointed by the President, by and ‘‘(c) DUTIES; ADMINISTRATIVE PROVISIONS.— bill, and on all debatable motions and appeals with the advice and consent of the Senate. The ‘‘(1) DUTIES.— in connection therewith, shall be limited to not Administrator shall report directly to the Sec- ‘‘(A) GENERAL DUTIES.—The Administrator more than 20 hours, which shall be divided retary. shall carry out parts C and D, including— equally between those favoring and those oppos- ‘‘(B) COMPENSATION.—The Administrator ‘‘(i) negotiating, entering into, and enforcing, ing the resolution. A motion further to limit de- shall be paid at the rate of basic pay payable for contracts with plans for the offering of bate is in order and not debatable. An amend- level III of the Executive Schedule under section MedicareAdvantage plans under part C, includ- ment to, or a motion to postpone, or a motion to 5314 of title 5, United States Code. ing the offering of qualified prescription drug proceed to the consideration of other business, ‘‘(C) TERM OF OFFICE.—The Administrator coverage under such plans; and or a motion to recommit the implementation bill shall be appointed for a term of 5 years. In any ‘‘(ii) negotiating, entering into, and enforcing, is not in order. A motion to reconsider the vote case in which a successor does not take office at contracts with eligible entities for the offering of by which the implementation bill is agreed to or the end of an Administrator’s term of office, Medicare Prescription Drug plans under part D. ‘‘(B) OTHER DUTIES.—The Administrator shall disagreed to is not in order. that Administrator may continue in office until carry out any duty provided for under part C or (4) VOTE ON FINAL PASSAGE.—Immediately fol- the entry upon office of such a successor. An lowing the conclusion of the debate on an imple- Administrator appointed to a term of office after D, including duties relating to— ‘‘(i) reasonable cost contracts with eligible or- mentation bill, and a single quorum call at the the commencement of such term may serve under ganizations under section 1876(h); and conclusion of the debate if requested in accord- such appointment only for the remainder of ‘‘(ii) demonstration projects carried out in ance with the rules of the appropriate House, such term. part or in whole under such parts, including the the vote on final passage of the implementation ‘‘(D) GENERAL AUTHORITY.—The Adminis- demonstration project carried out through a bill shall occur. trator shall be responsible for the exercise of all MedicareAdvantage (formerly Medicare+Choice) (5) RULINGS OF THE CHAIR ON PROCEDURE.— powers and the discharge of all duties of the project that demonstrates the application of Appeals from the decisions of the Chair relating Center for Medicare Choices, and shall have au- capitation payment rates for frail elderly medi- to the application of the rules of the Senate or thority and control over all personnel and ac- care beneficiaries through the use of an inter- the House of Representatives, as the case may tivities thereof. disciplinary team and through the provision of be, to the procedure relating to an implementa- ‘‘(E) RULEMAKING AUTHORITY.—The Adminis- primary care services to such beneficiaries by tion bill shall be decided without debate. trator may prescribe such rules and regulations means of such a team at the nursing facility in- (d) COORDINATION WITH ACTION BY OTHER as the Administrator determines necessary or volved. HOUSE.—If, before the passage by 1 House of an appropriate to carry out the functions of the ‘‘(C) NONINTERFERENCE.—In order to promote implementation bill of that House, that House Center for Medicare Choices. The regulations competition under parts C and D, the Adminis- receives from the other House an implementa- prescribed by the Administrator shall be subject trator, in carrying out the duties required under tion bill, then the following procedures shall to the rulemaking procedures established under this section, may not, to the extent possible, apply: section 553 of title 5, United States Code. interfere in any way with negotiations between (1) NONREFERRAL.—The implementation bill of ‘‘(F) AUTHORITY TO ESTABLISH ORGANIZA- eligible entities, MedicareAdvantage organiza- the other House shall not be referred to a com- TIONAL UNITS.—The Administrator may estab- tions, hospitals, physicians, other entities or in- mittee. lish, alter, consolidate, or discontinue such or- dividuals furnishing items and services under (2) VOTE ON BILL OF OTHER HOUSE.—With re- ganizational units or components within the this title (including contractors for such items spect to an implementation bill of the House re- Center for Medicare Choices as the Adminis- and services), and drug manufacturers, whole- ceiving the implementation bill— trator considers necessary or appropriate, except (A) the procedure in that House shall be the that this subparagraph shall not apply with re- salers, or other suppliers of covered drugs ‘‘(D) ANNUAL REPORTS.—Not later than March same as if no implementation bill had been respect to any unit, component, or provision pro- 31 of each year, the Administrator shall submit ceived from the other House; but vided for by this section. to Congress and the President a report on the (B) the vote on final passage shall be on the ‘‘(G) AUTHORITY TO DELEGATE.—The Adminis- administration of the voluntary prescription implementation bill of the other House. trator may assign duties, and delegate, or au- drug delivery program under this part during (e) RULES OF SENATE AND HOUSE OF REP- thorize successive redelegations of, authority to the previous fiscal year. RESENTATIVES.—This section is enacted by Con- act and to render decisions, to such officers and ‘‘(2) MANAGEMENT STAFF.— gress— employees of the Center for Medicare Choices as ‘‘(A) IN GENERAL.—The Administrator, with (1) as an exercise of the rulemaking power of the Administrator may find necessary. Within the approval of the Secretary, may employ, such the Senate and House of Representatives, re- the limitations of such delegations, redelega- management staff as determined appropriate. spectively, and as such it is deemed a part of the tions, or assignments, all official acts and deci- Any such manager shall be required to have rules of each House, respectively, but applicable sions of such officers and employees shall have demonstrated, by their education and experience only with respect to the procedure to be followed the same force and effect as though performed (either in the public or private sector), superior in that House in the case of an implementation or rendered by the Administrator. expertise in the following areas: EPUTY ADMINISTRATOR.— bill described in subsection (a), and it super- ‘‘(2) D ‘‘(i) The review, negotiation, and administra- ‘‘(A) IN GENERAL.—There shall be a Deputy sedes other rules only to the extent that it is in- tion of health care contracts. consistent with such rules; and Administrator of the Center for Medicare ‘‘(ii) The design of health care benefit plans. (2) with full recognition of the constitutional Choices who shall be appointed by the Adminis- ‘‘(iii) Actuarial sciences. right of either House to change the rules (so far trator. ‘‘(iv) Compliance with health plan contracts. as relating to the procedure of that House) at ‘‘(B) COMPENSATION.—The Deputy Adminis- ‘‘(v) Consumer education and decision mak- any time, in the same manner, and to the same trator shall be paid at the rate of basic pay paying. extent as in the case of any other rule of that able for level IV of the Executive Schedule ‘‘(B) COMPENSATION.— House. under section 5315 of title 5, United States Code. ‘‘(i) IN GENERAL.—Subject to clause (ii), the SEC. 244. AUTHORIZATION OF APPROPRIATIONS. ‘‘(C) TERM OF OFFICE.—The Deputy Adminis- Administrator shall establish the rate of pay for There are authorized to be appropriated such trator shall be appointed for a term of 5 years. an individual employed under subparagraph sums as may be necessary to carry out this sub- In any case in which a successor does not take (A). title for each of fiscal years 2012 through 2013. office at the end of a Deputy Administrator’s ‘‘(ii) MAXIMUM RATE.—In no case may the term of office, such Deputy Administrator may rate of compensation determined under clause TITLE III—CENTER FOR MEDICARE continue in office until the entry upon office of (i) exceed the highest rate of basic pay for the CHOICES such a successor. A Deputy Administrator ap- Senior Executive Service under section 5382(b) of SEC. 301. ESTABLISHMENT OF THE CENTER FOR pointed to a term of office after the commence- title 5, United States Code. MEDICARE CHOICES. ment of such term may serve under such ap- ‘‘(3) REDELEGATION OF CERTAIN FUNCTIONS OF (a) IN GENERAL.—Title XVIII (42 U.S.C. 1395 pointment only for the remainder of such term. THE CENTERS FOR MEDICARE & MEDICAID SERV- et seq.), as amended by section 111, is amended ‘‘(D) DUTIES.—The Deputy Administrator ICES.— by inserting after 1806 the following new sec- shall perform such duties and exercise such ‘‘(A) IN GENERAL.—The Secretary, the Admin- tion: powers as the Administrator shall from time to istrator of the Center for Medicare Choices, and ‘‘ESTABLISHMENT OF THE CENTER FOR MEDICARE time assign or delegate. The Deputy Adminis- the Administrator of the Centers for Medicare & CHOICES trator shall be the Acting Administrator of the Medicaid Services shall establish an appropriate ‘‘SEC. 1808. (a) ESTABLISHMENT.—By not later Center for Medicare Choices during the absence transition of responsibility in order to redelegate than March 1, 2004, the Secretary shall establish or disability of the Administrator and, unless the administration of part C from the Secretary within the Department of Health and Human the President designates another officer of the and the Administrator of the Centers for Medi- Services the Center for Medicare Choices, which Government as Acting Administrator, in the care & Medicaid Services to the Administrator of shall be separate from the Centers for Medicare event of a vacancy in the office of the Adminis- the Center for Medicare Choices as is appro- & Medicaid Services. trator. priate to carry out the purposes of this section. ‘‘(b) ADMINISTRATOR AND DEPUTY ADMINIS- ‘‘(3) SECRETARIAL COORDINATION OF PROGRAM ‘‘(B) TRANSFER OF DATA AND INFORMATION.— TRATOR.— ADMINISTRATION.—The Secretary shall ensure The Secretary shall ensure that the Adminis- ‘‘(1) ADMINISTRATOR.— appropriate coordination between the Adminis- trator of the Centers for Medicare & Medicaid

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00075 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8944 CONGRESSIONAL RECORD — SENATE July 7, 2003 Services transfers to the Administrator such in- ‘‘(iii) submit annual reports to Congress, the the advice of the chairman and the ranking mi- formation and data in the possession of the Ad- Secretary, and the Medicare Competitive Policy nority member of the Committees on Ways and ministrator of the Centers for Medicare & Med- Advisory Board describing the activities of the Means and on Energy and Commerce of the icaid Services as the Administrator requires to Office, and including such recommendations for House of Representatives. carry out the duties described in paragraph (1). improvement in the administration of this title ‘‘(iii) Two members shall be appointed by the ‘‘(C) CONSTRUCTION.—Insofar as a responsi- as the Ombudsman determines appropriate. President pro tempore of the Senate with the ad- bility of the Secretary or the Administrator of ‘‘(C) COORDINATION WITH STATE OMBUDSMAN vice of the chairman and the ranking minority the Centers for Medicare & Medicaid Services is PROGRAMS AND CONSUMER ORGANIZATIONS.—The member of the Committee on Finance of the Sen- redelegated to the Administrator under this sec- Medicare Ombudsman shall, to the extent ap- ate. tion, any reference to the Secretary or the Ad- propriate, coordinate with State medical Om- ‘‘(B) QUALIFICATIONS.—The members shall be ministrator of the Centers for Medicare & Med- budsman programs, and with State- and commu- chosen on the basis of their integrity, impar- icaid Services in this title or title XI with respect nity-based consumer organizations, to— tiality, and good judgment, and shall be individ- to such responsibility is deemed to be a reference ‘‘(i) provide information about the medicare uals who are, by reason of their education and to the Administrator. program; and experience in health care benefits management, ‘‘(d) OFFICE OF BENEFICIARY ASSISTANCE.— ‘‘(ii) conduct outreach to educate medicare exceptionally qualified to perform the duties of ‘‘(1) ESTABLISHMENT.—The Secretary shall es- beneficiaries with respect to manners in which members of the Board. tablish within the Center for Medicare Choices problems under the medicare program may be re- ‘‘(C) PROHIBITION ON INCLUSION OF FEDERAL an Office of Beneficiary Assistance to carry out solved or avoided. EMPLOYEES.—No officer or employee of the EDICARE COMPETITIVE POLICY ADVI- functions relating to medicare beneficiaries ‘‘(e) M United States may serve as a member of the SORY BOARD.— under this title, including making determina- Board. ‘‘(1) ESTABLISHMENT.—There is established tions of eligibility of individuals for benefits ‘‘(5) COMPENSATION.—Members of the Board within the Center for Medicare Choices the under this title, providing for enrollment of shall receive, for each day (including travel Medicare Competitive Policy Advisory Board (in medicare beneficiaries under this title, and the time) they are engaged in the performance of this section referred to as the ‘Board’). The functions described in paragraph (2). The Office the functions of the Board, compensation at Board shall advise, consult with, and make rec- shall be a separate operating division within the rates not to exceed the daily equivalent to the ommendations to the Administrator with respect Center for Medicare Choices. annual rate in effect for level IV of the Execu- to the administration of parts C and D, includ- ‘‘(2) DISSEMINATION OF INFORMATION ON BENE- tive Schedule under section 5315 of title 5, ing the review of payment policies under such FITS AND APPEALS RIGHTS.— United States Code. ISSEMINATION OF BENEFITS INFORMA parts. ‘‘(A) D - ‘‘(6) TERMS OF OFFICE.— TION.—The Office of Beneficiary Assistance ‘‘(2) REPORTS.— ‘‘(A) IN GENERAL.—With respect to matters of ‘‘(A) IN GENERAL.—The term of office of mem- shall disseminate to medicare beneficiaries, by bers of the Board shall be 3 years. mail, by posting on the Internet site of the Cen- the administration of parts C and D, the Board ‘‘(B) TERMS OF INITIAL APPOINTEES.—As des- ter for Medicare Choices, and through the toll- shall submit to Congress and to the Adminis- trator such reports as the Board determines ap- ignated by the President at the time of appoint- free telephone number provided for under sec- ment, of the members first appointed— tion 1804(b), information with respect to the fol- propriate. Each such report may contain such recommendations as the Board determines ap- ‘‘(i) one shall be appointed for a term of 1 lowing: year; ‘‘(i) Benefits, and limitations on payment (in- propriate for legislative or administrative ‘‘(ii) three shall be appointed for terms of 2 cluding cost-sharing, stop-loss provisions, and changes to improve the administration of such years; and formulary restrictions) under parts C and D. parts, including the stability and solvency of ‘‘(iii) three shall be appointed for terms of 3 ‘‘(ii) Benefits, and limitations on payment the programs under such parts and the topics years. under parts A, and B, including information on described in subparagraph (B). Each such re- medicare supplemental policies under section port shall be published in the Federal Register. ‘‘(C) REAPPOINTMENTS.—Any person ap- 1882. ‘‘(B) TOPICS DESCRIBED.—Reports required pointed as a member of the Board may not serve ‘‘(iii) Other areas determined to be appro- under subparagraph (A) may include the fol- for more than 8 years. priate by the Administrator. lowing topics: ‘‘(D) VACANCY.—Any member appointed to fill ‘‘(i) FOSTERING COMPETITION.—Recommenda- a vacancy occurring before the expiration of the Such information shall be presented in a man- tions or proposals to increase competition under term for which the member’s predecessor was ap- ner so that medicare beneficiaries may compare parts C and D for services furnished to medicare pointed shall be appointed only for the remain- benefits under parts A, B, and D, and medicare beneficiaries. der of that term. A member may serve after the supplemental policies with benefits under ‘‘(ii) EDUCATION AND ENROLLMENT.—Rec- expiration of that member’s term until a suc- MedicareAdvantage plans under part C. ommendations for the improvement of efforts to cessor has taken office. A vacancy in the Board ‘‘(B) DISSEMINATION OF APPEALS RIGHTS IN- provide medicare beneficiaries information and shall be filled in the manner in which the origi- FORMATION.—The Office of Beneficiary Assist- education on the program under this title, and nal appointment was made. ance shall disseminate to medicare beneficiaries specifically parts C and D, and the program for ‘‘(7) CHAIR.—The Chair of the Board shall be in the manner provided under subparagraph (A) enrollment under the title. elected by the members. The term of office of the a description of procedural rights (including ‘‘(iii) QUALITY.—Recommendations on ways to Chair shall be 3 years. grievance and appeals procedures) of bene- improve the quality of benefits provided under ‘‘(8) MEETINGS.—The Board shall meet at the ficiaries under the original medicare fee-for- plans under parts C and D. call of the Chair, but in no event less than 3 service program under parts A and B, the ‘‘(iv) DISEASE MANAGEMENT PROGRAMS.—Rec- times during each fiscal year. MedicareAdvantage program under part C, and ommendations on the incorporation of disease ‘‘(9) DIRECTOR AND STAFF.— the voluntary prescription drug delivery pro- management programs under parts C and D. ‘‘(A) APPOINTMENT OF DIRECTOR.—The Board gram under part D. ‘‘(v) RURAL ACCESS.—Recommendations to im- ‘‘(3) MEDICARE OMBUDSMAN.— shall have a Director who shall be appointed by prove competition and access to plans under the Chair. ‘‘(A) IN GENERAL.—Within the Office of Bene- parts C and D in rural areas. ‘‘(B) IN GENERAL.—With the approval of the ficiary Assistance, there shall be a Medicare ‘‘(C) MAINTAINING INDEPENDENCE OF BOARD.— Board, the Director may appoint such addi- Ombudsman, appointed by the Secretary from The Board shall directly submit to Congress re- tional personnel as the Director considers ap- among individuals with expertise and experience ports required under subparagraph (A). No offi- propriate. in the fields of health care and advocacy, to cer or agency of the United States may require ‘‘(C) ASSISTANCE FROM THE ADMINISTRATOR.— carry out the duties described in subparagraph the Board to submit to any officer or agency of The Administrator shall make available to the (B). the United States for approval, comments, or re- Board such information and other assistance as ‘‘(B) DUTIES.—The Medicare Ombudsman view, prior to the submission to Congress of such it may require to carry out its functions. shall— reports. ‘‘(i) receive complaints, grievances, and re- ‘‘(3) DUTY OF ADMINISTRATOR.—With respect ‘‘(10) CONTRACT AUTHORITY.—The Board may quests for information submitted by a medicare to any report submitted by the Board under contract with and compensate government and beneficiary, with respect to any aspect of the paragraph (2)(A), not later than 90 days after private agencies or persons to carry out its du- medicare program; the report is submitted, the Administrator shall ties under this subsection, without regard to sec- ‘‘(ii) provide assistance with respect to com- submit to Congress and the President an anal- tion 3709 of the Revised Statutes (41 U.S.C. 5). plaints, grievances, and requests referred to in ysis of recommendations made by the Board in ‘‘(f) FUNDING.—There is authorized to be ap- clause (i), including— such report. Each such analysis shall be pub- propriated, in appropriate part from the Federal ‘‘(I) assistance in collecting relevant informa- lished in the Federal Register. Hospital Insurance Trust Fund and from the tion for such beneficiaries, to seek an appeal of ‘‘(4) MEMBERSHIP.— Federal Supplementary Medical Insurance a decision or determination made by a fiscal ‘‘(A) APPOINTMENT.—Subject to the suc- Trust Fund (including the Prescription Drug intermediary, carrier, MedicareAdvantage orga- ceeding provisions of this paragraph, the Board Account), such sums as are necessary to carry nization, an eligible entity under part D, or the shall consist of 7 members to be appointed as fol- out this section.’’. Secretary; and lows: (b) USE OF CENTRAL, TOLL-FREE NUMBER (1– ‘‘(II) assistance to such beneficiaries with any ‘‘(i) Three members shall be appointed by the 800–MEDICARE).—Section 1804(b) (42 U.S.C. problems arising from disenrollment from a President. 1395b–2(b)) is amended by adding at the end the MedicareAdvantage plan under part C or a pre- ‘‘(ii) Two members shall be appointed by the following: ‘‘By not later than 1 year after the scription drug plan under part D; and Speaker of the House of Representatives, with date of the enactment of the Prescription Drug

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and Medicare Improvement Act of 2003, the Sec- fiscal year 1988 and before fiscal year 2004, the ‘‘(II) HOLD HARMLESS FOR CERTAIN HOS- retary shall provide, through the toll-free num- Secretary; and PITALS.—If the application of subclause (I) ber 1–800–MEDICARE, for a means by which in- (ii) by adding at the end the following: would result in lower payments to a hospital dividuals seeking information about, or assist- ‘‘(II) For discharges in fiscal year 2004, the than would otherwise be made, then this sub- ance with, such programs who phone such toll- Secretary shall compute an average standard- paragraph shall be applied as if this clause had free number are transferred (without charge) to ized amount for hospitals located in any area of not been enacted.’’. appropriate entities for the provision of such in- Puerto Rico that is equal to the average stand- (b) WAIVING BUDGET NEUTRALITY.—Section formation or assistance. Such toll-free number ardized amount computed under subclause (I) 1886(d)(3)(E) (42 U.S.C. 1395ww(d)(3)(E)), as shall be the toll-free number listed for general for fiscal year 2003 for hospitals in an urban amended by subsection (a), is amended by add- information and assistance in the annual notice area, increased by the applicable percentage in- ing at the end of clause (i) the following new under subsection (a) instead of the listing of crease under subsection (b)(3)(B) for fiscal year sentence: ‘‘The Secretary shall apply the pre- numbers of individual contractors.’’. 2004. vious sentence for any period as if the amend- SEC. 302. MISCELLANEOUS ADMINISTRATIVE ‘‘(III) For discharges in a fiscal year after fis- ments made by section 402(a) of the Prescription PROVISIONS. cal year 2004, the Secretary shall compute an Drug and Medicare Improvement Act of 2003 (a) ADMINISTRATOR AS MEMBER AND CO-SEC- average standardized amount for hospitals lo- had not been enacted.’’. RETARY OF THE BOARD OF TRUSTEES OF THE cated in any are of Puerto Rico that is equal to SEC. 403. MEDICARE INPATIENT HOSPITAL PAY- MEDICARE TRUST FUNDS.—The fifth sentence of the average standardized amount computed MENT ADJUSTMENT FOR LOW-VOL- sections 1817(b) and 1841(b) (42 U.S.C. 1395i(b), under subclause (II) or this subclause for the UME HOSPITALS. 1395t(b)) are each amended by striking ‘‘shall previous fiscal year, increased by the applicable Section 1886(d) (42 U.S.C. 1395ww(d)) is serve as the Secretary’’ and inserting ‘‘and the percentage increase under subsection (b)(3)(B), amended by adding at the end the following Administrator of the Center for Medicare adjusted to reflect the most recent case mix new paragraph: ‘‘(12) PAYMENT ADJUSTMENT FOR LOW-VOLUME Choices shall serve as the Co-Secretaries’’. data.’’; HOSPITALS.— (b) INCREASE IN GRADE TO EXECUTIVE LEVEL (B) in clause (ii), by inserting ‘‘(or for fiscal ‘‘(A) PAYMENT ADJUSTMENT.— III FOR THE ADMINISTRATOR OF THE CENTERS year 2004 and thereafter, the standardized amount)’’ after ‘‘each of the average standard- ‘‘(i) IN GENERAL.—Notwithstanding any other FOR MEDICARE & MEDICAID SERVICES.— provision of this section, for each cost reporting (1) IN GENERAL.—Section 5314 of title 5, United ized amounts’’; and (C) in clause (iii)(I), by striking ‘‘for hospitals period (beginning with the cost reporting period States Code, is amended by adding at the end that begins in fiscal year 2005), the Secretary the following: located in an urban or rural area, respectively’’. ONFORMING AMENDMENTS.— shall provide for an additional payment amount ‘‘Administrator of the Centers for Medicare & (c) C (1) COMPUTING DRG-SPECIFIC RATES.—Section to each low-volume hospital (as defined in Medicaid Services.’’. 1886(d)(3)(D) (42 U.S.C. 1395ww(d)(3)(D)) is clause (iii)) for discharges occurring during that (2) CONFORMING AMENDMENT.—Section 5315 of amended— cost reporting period which is equal to the ap- such title is amended by striking ‘‘Administrator (A) in the heading, by striking ‘‘IN DIFFERENT plicable percentage increase (determined under of the Health Care Financing Administration.’’. AREAS’’; clause (ii)) in the amount paid to such hospital (3) EFFECTIVE DATE.—The amendments made (B) in the matter preceding clause (i), by under this section for such discharges. by this subsection take effect on March 1, 2004. striking ‘‘, each of’’; ‘‘(ii) APPLICABLE PERCENTAGE INCREASE.—The TITLE IV—MEDICARE FEE-FOR-SERVICE (C) in clause (i)— Secretary shall determine a percentage increase IMPROVEMENTS (i) in the matter preceding subclause (I), by applicable under this paragraph that ensures Subtitle A—Provisions Relating to Part A inserting ‘‘for fiscal years before fiscal year that— 2004,’’ before ‘‘for hospitals’’; and ‘‘(I) no percentage increase in payments under SEC. 401. EQUALIZING URBAN AND RURAL (ii) in subclause (II), by striking ‘‘and’’ after this paragraph exceeds 25 percent of the amount STANDARDIZED PAYMENT AMOUNTS UNDER THE MEDICARE INPATIENT the semicolon at the end; of payment that would (but for this paragraph) HOSPITAL PROSPECTIVE PAYMENT (D) in clause (ii)— otherwise be made to a low-volume hospital SYSTEM. (i) in the matter preceding subclause (I), by under this section for each discharge; (a) IN GENERAL.—Section 1886(d)(3)(A)(iv) (42 inserting ‘‘for fiscal years before fiscal year ‘‘(II) low-volume hospitals that have the low- U.S.C. 1395ww(d)(3)(A)(iv)) is amended— 2004,’’ before ‘‘for hospitals’’; and est number of discharges during a cost reporting (1) by striking ‘‘(iv) For discharges’’ and in- (ii) in subclause (II), by striking the period at period receive the highest percentage increases serting ‘‘(iv)(I) Subject to subclause (II), for dis- the end and inserting ‘‘; and’’; and in payments due to the application of this para- charges’’; and (E) by adding at the end the following new graph; and (2) by adding at the end the following new clause: ‘‘(III) the percentage increase in payments to subclause: ‘‘(iii) for a fiscal year beginning after fiscal any low-volume hospital due to the application ‘‘(II) For discharges occurring in a fiscal year year 2003, for hospitals located in all areas, to of this paragraph is reduced as the number of (beginning with fiscal year 2004), the Secretary the product of— discharges per cost reporting period increases. shall compute a standardized amount for hos- ‘‘(I) the applicable standardized amount (com- ‘‘(iii) LOW-VOLUME HOSPITAL DEFINED.—For pitals located in any area within the United puted under subparagraph (A)), reduced under purposes of this paragraph, the term ‘low-vol- States and within each region equal to the subparagraph (B), and adjusted or reduced ume hospital’ means, for a cost reporting period, standardized amount computed for the previous under subparagraph (C) for the fiscal year; and a subsection (d) hospital (as defined in para- ‘‘(II) the weighting factor (determined under fiscal year under this subparagraph for hos- graph (1)(B)) other than a critical access hos- paragraph (4)(B)) for that diagnosis-related pitals located in a large urban area (or, begin- pital (as defined in section 1861(mm)(1)) that— group.’’. ‘‘(I) the Secretary determines had an average ning with fiscal year 2005, for applicable for all (2) TECHNICAL CONFORMING SUNSET.—Section of less than 2,000 discharges (determined with hospitals in the previous fiscal year) increased 1886(d)(3) (42 U.S.C. 1395ww(d)(3)) is amended— respect to all patients and not just individuals by the applicable percentage increase under (A) in the matter preceding subparagraph (A), receiving benefits under this title) during the 3 subsection (b)(3)(B)(i) for the fiscal year in- by inserting ‘‘, for fiscal years before fiscal year most recent cost reporting periods for which volved.’’. 1997,’’ before ‘‘a regional adjusted DRG prospec- data are available that precede the cost report- (b) APPLICATION TO SUBSECTION (D) PUERTO tive payment rate’’; and ing period to which this paragraph applies; and RICO HOSPITALS.—Section 1886(d)(9) (42 U.S.C. (B) in subparagraph (D), in the matter pre- ‘‘(II) is located at least 15 miles from a like 1395ww(d)(9)) is amended— ceding clause (i), by inserting ‘‘, for fiscal years hospital (or is deemed by the Secretary to be so (1) in subparagraph (A)— before fiscal year 1997,’’ before ‘‘a regional DRG located by reason of such factors as the Sec- (A) in clause (i), by striking ‘‘and’’ after the prospective payment rate for each region,’’. retary determines appropriate, including the comma at the end; time required for an individual to travel to the (B) in clause (ii)— SEC. 402. ADJUSTMENT TO THE MEDICARE INPA- TIENT HOSPITAL PPS WAGE INDEX nearest alternative source of appropriate inpa- (i) in the matter preceding subclause (I), by TO REVISE THE LABOR-RELATED tient care (after taking into account the location inserting ‘‘and before October 1, 2003’’ after SHARE OF SUCH INDEX. of such alternative source of inpatient care and ‘‘October 1, 1997’’; and (a) IN GENERAL.—Section 1886(d)(3)(E) (42 any weather or travel conditions that may af- (ii) in the matter following clause (III), by U.S.C. 1395ww(d)(3)(E)) is amended— fect such travel time). striking the period at the end and inserting ‘‘, (1) by striking ‘‘WAGE LEVELS.—The Sec- ‘‘(B) PROHIBITING CERTAIN REDUCTIONS.—Not- and’’; and retary’’ and inserting ‘‘WAGE LEVELS.— withstanding subsection (e), the Secretary shall (iii) by adding at the end the following new ‘‘(i) IN GENERAL.—Except as provided in not reduce the payment amounts under this sec- clause: clause (ii), the Secretary’’; and tion to offset the increase in payments resulting ‘‘(iii) for discharges in a fiscal year beginning (2) by adding at the end the following new from the application of subparagraph (A).’’. on or after October 1, 2003, 50 percent of the na- clause: SEC. 404. FAIRNESS IN THE MEDICARE DIS- tional standardized rate (determined under ‘‘(ii) ALTERNATIVE PROPORTION TO BE AD- PROPORTIONATE SHARE HOSPITAL paragraph (3)(D)(iii)) for hospitals located in JUSTED BEGINNING IN FISCAL YEAR 2005.— (DSH) ADJUSTMENT FOR RURAL any area.’’; ‘‘(I) IN GENERAL.—Except as provided in sub- HOSPITALS. (2) in subparagraph (C)— clause (II), for discharges occurring on or after (a) EQUALIZING DSH PAYMENT AMOUNTS.— (A) in clause (i)— October 1, 2004, the Secretary shall substitute ‘62 (1) IN GENERAL.—Section 1886(d)(5)(F)(vii) (42 (i) by striking ‘‘(i) The Secretary’’ and insert- percent’ for the proportion described in the first U.S.C. 1395ww(d)(5)(F)(vii)) is amended by in- ing ‘‘(i)(I) For discharges in a fiscal year after sentence of clause (i). serting ‘‘, and, after October 1, 2004, for any

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other hospital described in clause (iv),’’ after (1) IN GENERAL.—Section 1820(c)(2)(B)(iii) (42 (A) by redesignating paragraph (3)(F) as ‘‘clause (iv)(I)’’ in the matter preceding sub- U.S.C. 1395i–4(c)(2)(B)(iii)) is amended to read paragraph (5) and redesignating and indenting clause (I). as follows: appropriately; and (2) CONFORMING AMENDMENTS.—Section ‘‘(iii) provides not more than a total of 25 ex- (B) by inserting after paragraph (3) the fol- 1886(d)(5)(F) (42 U.S.C. 1395ww(d)(5)(F)) is tended care service beds (pursuant to an agree- lowing new paragraph: amended— ment under subsection (f)) and acute care inpa- ‘‘(4) SMALL RURAL HOSPITAL IMPROVEMENT (A) in clause (iv)— tient beds (meeting such standards as the Sec- PROGRAM.— (i) in subclause (II)— retary may establish) for providing inpatient ‘‘(A) GRANTS TO HOSPITALS.—The Secretary (I) by inserting ‘‘and before October 1, 2004,’’ care for a period that does not exceed, as deter- may award grants to hospitals that have sub- after ‘‘April 1, 2001,’’; and mined on an annual, average basis, 96 hours per mitted applications in accordance with subpara- (II) by inserting ‘‘or, for discharges occurring patient;’’. graph (B) to assist eligible small rural hospitals on or after October 1, 2004, is equal to the per- (2) CONFORMING AMENDMENT.—Section 1820(f) (as defined in paragraph (3)(B)) in meeting the cent determined in accordance with the applica- (42 U.S.C. 1395i–4(f)) is amended by striking costs of reducing medical errors, increasing pa- ble formula described in clause (vii)’’ after ‘‘and the number of beds used at any time for tient safety, protecting patient privacy, and im- ‘‘clause (xiii)’’; acute care inpatient services does not exceed 15 proving hospital quality and performance. (ii) in subclause (III)— beds’’. ‘‘(B) APPLICATION.—A hospital seeking a (I) by inserting ‘‘and before October 1, 2004,’’ (3) EFFECTIVE DATE.—The amendments made grant under this paragraph shall submit an ap- after ‘‘April 1, 2001,’’; and by this subsection shall with respect to designa- plication to the Secretary on or before such date (II) by inserting ‘‘or, for discharges occurring tions made on or after October 1, 2004. and in such form and manner as the Secretary on or after October 1, 2004, is equal to the per- (b) ELIMINATION OF THE ISOLATION TEST FOR specifies. cent determined in accordance with the applica- COST-BASED CAH AMBULANCE SERVICES.— ‘‘(C) AMOUNT OF GRANT.—A grant to a hos- ble formula described in clause (vii)’’ after (1) ELIMINATION.— pital under this paragraph may not exceed ‘‘clause (xii)’’; (A) IN GENERAL.—Section 1834(l)(8) (42 U.S.C. $50,000. (iii) in subclause (IV)— 1395m(l)(8)), as added by section 205(a) of BIPA ‘‘(D) USE OF FUNDS.—A hospital receiving a (I) by inserting ‘‘and before October 1, 2004,’’ (114 Stat. 2763A–482), is amended by striking the grant under this paragraph may use the funds after ‘‘April 1, 2001,’’; and comma at the end of subparagraph (B) and all for the purchase of computer software and (II) by inserting ‘‘or, for discharges occurring that follows and inserting a period. hardware, the education and training of hos- on or after October 1, 2004, is equal to the per- (B) EFFECTIVE DATE.—The amendment made pital staff, and obtaining technical assistance.’’. cent determined in accordance with the applica- by subparagraph (A) shall apply to services fur- (2) AUTHORIZATION FOR APPROPRIATIONS.— ble formula described in clause (vii)’’ after nished on or after January 1, 2005. Section 1820(j) (42 U.S.C. 1395i–4(j)) is amended ‘‘clause (x) or (xi)’’; (2) TECHNICAL CORRECTION.—Section 1834(l) to read as follows: (iv) in subclause (V)— ‘‘(j) AUTHORIZATION OF APPROPRIATIONS.— (I) by inserting ‘‘and before October 1, 2004,’’ (42 U.S.C. 1395m(l)) is amended by redesignating ‘‘(1) HI TRUST FUND.—There are authorized to after ‘‘April 1, 2001,’’; and paragraph (8), as added by section 221(a) of (II) by inserting ‘‘or, for discharges occurring BIPA (114 Stat. 2763A–486), as paragraph (9). be appropriated from the Federal Hospital In- on or after October 1, 2004, is equal to the per- (c) COVERAGE OF COSTS FOR CERTAIN EMER- surance Trust Fund for making grants to all cent determined in accordance with the applica- GENCY ROOM ON-CALL PROVIDERS.— States under— ‘‘(A) subsection (g), $25,000,000 in each of the ble formula described in clause (vii)’’ after (1) IN GENERAL.—Section 1834(g)(5) (42 U.S.C. fiscal years 1998 through 2002; and ‘‘clause (xi)’’; and 1395m(g)(5)) is amended— ‘‘(B) paragraphs (1) and (2) of subsection (g), (v) in subclause (VI)— (A) in the heading— (I) by inserting ‘‘and before October 1, 2004,’’ (i) by inserting ‘‘CERTAIN’’ before ‘‘EMER- $40,000,000 in each of the fiscal years 2004 after ‘‘April 1, 2001,’’; and GENCY’’; and through 2008. (II) by inserting ‘‘or, for discharges occurring (ii) by striking ‘‘PHYSICIANS’’ and inserting ‘‘(2) GENERAL REVENUES.—There are author- on or after October 1, 2004, is equal to the per- ‘‘PROVIDERS’’; ized to be appropriated from amounts in the cent determined in accordance with the applica- (B) by striking ‘‘emergency room physicians Treasury not otherwise appropriated for making ble formula described in clause (vii)’’ after who are on-call (as defined by the Secretary)’’ grants to all States under subsection (g)(4), ‘‘clause (x)’’; and inserting ‘‘physicians, physician assistants, $25,000,000 in each of the fiscal years 2004 (B) in clause (viii), by striking ‘‘The formula’’ nurse practitioners, and clinical nurse special- through 2008.’’. and inserting ‘‘For discharges occurring before ists who are on-call (as defined by the Sec- (3) REQUIREMENT THAT STATES AWARDED October 1, 2004, the formula’’; and retary) to provide emergency services’’; and GRANTS CONSULT WITH THE STATE HOSPITAL AS- (C) in each of clauses (x), (xi), (xii), and (xiii), (C) by striking ‘‘physicians’ services’’ and in- SOCIATION AND RURAL HOSPITALS ON THE MOST by striking ‘‘For purposes’’ and inserting ‘‘With serting ‘‘services covered under this title’’. APPROPRIATE WAYS TO USE SUCH GRANTS.— respect to discharges occurring before October 1, (2) EFFECTIVE DATE.—The amendments made (A) IN GENERAL.—Section 1820(g) (42 U.S.C. 2004, for purposes’’. by paragraph (1) shall apply to costs incurred 1395i–4(g)), as amended by paragraph (1), is (b) EFFECTIVE DATE.—The amendments made for services provided on or after January 1, 2005. amended by adding at the end the following by this section shall apply to discharges occur- (d) AUTHORIZATION OF PERIODIC INTERIM new paragraph: ring on or after October 1, 2004. PAYMENT (PIP).— ‘‘(6) REQUIRED CONSULTATION FOR STATES AWARDED GRANTS SEC. 404A. MEDPAC STUDY AND REPORT REGARD- (1) IN GENERAL.—Section 1815(e)(2) (42 U.S.C. .—A State awarded a grant ING MEDICARE DISPROPORTIONATE 1395g(e)(2)) is amended— under paragraph (1) or (2) shall consult with SHARE HOSPITAL (DSH) ADJUST- (A) in subparagraph (C), by striking ‘‘and’’ the hospital association of such State and rural MENT PAYMENTS. after the semicolon at the end; hospitals located in such State on the most ap- (a) STUDY.—The Medicare Payment Advisory (B) in subparagraph (D), by adding ‘‘and’’ propriate ways to use the funds under such Commission established under section 1805 of the after the semicolon at the end; and grant.’’. Social Security Act (42 U.S.C. 1395b–6) (in this (C) by inserting after subparagraph (D) the (B) EFFECTIVE DATE AND APPLICATION.—The section referred to as ‘‘MedPAC’’) shall conduct following new subparagraph: amendment made by subparagraph (A) shall a study to determine, with respect to additional ‘‘(E) inpatient critical access hospital serv- take effect on the date of enactment of this Act payment amounts paid to subsection (d) hos- ices;’’. and shall apply to grants awarded on or after pitals under section 1886(d)(5)(F) of the Social (2) EFFECTIVE DATE.—The amendments made such date and to grants awarded prior to such Security Act (42 U.S.C. 1395ww(d)(5)(F))— by paragraph (1) shall apply to payments for in- date to the extent that funds under such grants (1) whether such payments should be made in patient critical access facility services furnished have not been obligated as of such date. the same manner as payments are made with re- on or after January 1, 2005. (g) EXCLUSION OF CERTAIN BEDS FROM BED spect to graduate medical education under title (e) EXCLUSION OF NEW CAHS FROM PPS HOS- COUNT AND REMOVAL OF BARRIERS TO ESTAB- XVIII and with respect to hospitals that serve a PITAL WAGE INDEX CALCULATION.—Section LISHMENT OF DISTINCT PART UNITS.— disproportionate share of low-income patients 1886(d)(3)(E)(i) (42 U.S.C. 1395ww(d)(3)(E)(i)), (1) EXCLUSION OF CERTAIN BEDS FROM BED under the medicaid program; and as amended by section 402, is amended by insert- COUNT.—Section 1820(c)(2) (42 U.S.C. 1395i– (2) whether to add costs attributable to un- ing after the first sentence the following new 4(c)(2)) is amended by adding at the end the fol- compensated care to the formula for determining sentence: ‘‘In calculating the hospital wage lev- lowing: such payment amounts. els under the preceding sentence applicable with ‘‘(E) EXCLUSION OF CERTAIN BEDS FROM BED (b) REPORT.—Not later than 1 year after the respect to cost reporting periods beginning on or COUNT.—In determining the number of beds of a date of enactment of this Act, MedPAC shall after January 1, 2004, the Secretary shall ex- facility for purposes of applying the bed limita- submit a report to Congress on the study conclude the wage levels of any facility that became tions referred to in subparagraph (B)(iii) and ducted under subsection (a), together with such a critical access hospital prior to the cost report- subsection (f), the Secretary shall not take into recommendations for legislation as MedPAC de- ing period for which such hospital wage levels account any bed of a distinct part psychiatric or termines are appropriate. are calculated.’’. rehabilitation unit (described in the matter fol- SEC. 405. CRITICAL ACCESS HOSPITAL (CAH) IM- (f) PROVISIONS RELATED TO CERTAIN RURAL lowing clause (v) of section 1886(d)(1)(B)) of the PROVEMENTS. GRANTS.— facility, except that the total number of beds (a) PERMITTING CAHS TO ALLOCATE SWING (1) SMALL RURAL HOSPITAL IMPROVEMENT PRO- that are not taken into account pursuant to this BEDS AND ACUTE CARE INPATIENT BEDS SUBJECT GRAM.—Section 1820(g) (42 U.S.C. 1395i–4(g)) is subparagraph with respect to a facility shall not TO A TOTAL LIMIT OF 25 BEDS.— amended— exceed 25.’’.

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(2) REMOVING BARRIERS TO ESTABLISHMENT OF SEC. 408. AUTHORITY TO INCLUDE COSTS OF end the following new sentence: For purposes of DISTINCT PART UNITS BY CRITICAL ACCESS HOS- TRAINING OF PSYCHOLOGISTS IN the preceding sentence time shall only be count- PITALS.—Section 1886(d)(1)(B) (42 U.S.C. PAYMENTS TO HOSPITALS UNDER ed from the effective date of a written agreement 195ww(d)(1)(B)) is amended by striking ‘‘a dis- MEDICARE. between the hospital and the entity owning or tinct part of the hospital (as defined by the Sec- Effective for cost reporting periods beginning operating a nonprovider setting. The effective retary)’’ in the matter following cause (v) and on or after October 1, 2004, for purposes of pay- date of such written agreement shall be deter- inserting ‘‘a distinct part (as defined by the Sec- ments to hospitals under the medicare program mined in accordance with generally accepted ac- retary) of the hospital or of a critical access hos- under title XVIII of the Social Security Act for counting principles. All, or substantially all, of pital’’. costs of approved educational activities (as de- the costs for the training program in that setting (3) EFFECTIVE DATE.—The amendments made fined in section 413.85 of title 42 of the Code of shall be defined as the residents’ stipends and by this subsection shall apply to determinations Federal Regulations), such approved edu- benefits and other costs, if any, as determined with respect to distinct part unit status, and cational activities shall include professional by the parties.’’. with respect to designations, that are made on educational training programs, recognized by (2) IME.—Section 1886(d)(5)(B)(iv) (42 U.S.C. or after October 1, 2003. the Secretary, for psychologists. 1395ww(d)(5)(B)(iv)) is amended by adding at SEC. 406. AUTHORIZING USE OF ARRANGEMENTS SEC. 409. REVISION OF FEDERAL RATE FOR HOS- the end the following new sentence: For pur- TO PROVIDE CORE HOSPICE SERV- PITALS IN PUERTO RICO. poses of the preceding sentence time shall only ICES IN CERTAIN CIRCUMSTANCES. Section 1886(d)(9) (42 U.S.C. 1395ww(d)(9)) is be counted from the effective date of a written (a) IN GENERAL.—Section 1861(dd)(5) (42 amended— agreement between the hospital and the entity U.S.C. 1395x(dd)(5)) is amended by adding at (1) in subparagraph (A)— owning or operating a nonprovider setting. The the end the following: (A) in clause (i), by striking ‘‘for discharges effective date of such written agreement shall be ‘‘(D) In extraordinary, exigent, or other non- beginning on or after October 1, 1997, 50 percent determined in accordance with generally accept- routine circumstances, such as unanticipated (and for discharges between October 1, 1987, and ed accounting principles. All, or substantially periods of high patient loads, staffing shortages September 30, 1997, 75 percent)’’ and inserting all, of the costs for the training program in that due to illness or other events, or temporary trav- ‘‘the applicable Puerto Rico percentage (speci- setting shall be defined as the residents’ sti- el of a patient outside a hospice program’s serv- fied in subparagraph (E))’’; and pends and benefits and other costs, if any, as ice area, a hospice program may enter into ar- (B) in clause (ii), by striking ‘‘for discharges determined by the parties.’’. rangements with another hospice program for beginning in a fiscal year beginning on or after (b) LIMITING ONE-YEAR LAG IN THE INDIRECT the provision by that other program of services October 1, 1997, 50 percent (and for discharges MEDICAL EDUCATION (IME) RATIO AND THREE- described in paragraph (2)(A)(ii)(I). The provi- between October 1, 1987, and September 30, 1997, YEAR ROLLING AVERAGE IN RESIDENT COUNT sions of paragraph (2)(A)(ii)(II) shall apply 25 percent)’’ and inserting ‘‘the applicable Fed- FOR IME AND FOR DIRECT GRADUATE MEDICAL with respect to the services provided under such eral percentage (specified in subparagraph EDUCATION (D–GME) TO MEDICAL RESIDENCY arrangements. (E))’’; and PROGRAMS.— ‘‘(E) A hospice program may provide services (2) by adding at the end the following new (1) IME RATIO AND IME ROLLING AVERAGE.— described in paragraph (1)(A) other than di- subparagraph: Section 1886(d)(5)(B)(vi) of the Social Security rectly by the program if the services are highly ‘‘(E) For purposes of subparagraph (A), for Act (42 U.S.C. 1395ww(d)(5)(B)(vi)) is amended specialized services of a registered professional discharges occurring— by adding at the end the following new sen- nurse and are provided non-routinely and so in- ‘‘(i) between October 1, 1987, and September tence: ‘‘For cost reporting periods beginning frequently so that the provision of such services 30, 1997, the applicable Puerto Rico percentage during fiscal years beginning on or after Octo- directly would be impracticable and prohibi- is 75 percent and the applicable Federal percent- ber 1, 2004, subclauses (I) and (II) shall be ap- tively expensive.’’. age is 25 percent; plied only with respect to a hospital’s approved (b) CONFORMING PAYMENT PROVISION.—Sec- ‘‘(ii) on or after October 1, 1997, and before medical residency training programs in the tion 1814(i) (42 U.S.C. 1395f(i)) is amended by October 1, 2004, the applicable Puerto Rico per- fields of allopathic and osteopathic medicine.’’. adding at the end the following new paragraph: centage is 50 percent and the applicable Federal (2) D–GME ROLLING AVERAGE.—Section ‘‘(4) In the case of hospice care provided by a percentage is 50 percent; 1886(h)(4)(G) of the Social Security Act (42 hospice program under arrangements under sec- ‘‘(iii) on or after October 1, 2004, and before U.S.C. 1395ww(h)(4)(G)) is amended by adding tion 1861(dd)(5)(D) made by another hospice October 1, 2009, the applicable Puerto Rico per- at the end the following new clause: program, the hospice program that made the ar- ‘‘(iv) APPLICATION FOR FISCAL YEAR 2004 AND centage is 0 percent and the applicable Federal rangements shall bill and be paid for the hospice SUBSEQUENT YEARS.—For cost reporting periods percentage is 100 percent; and care.’’. beginning during fiscal years beginning on or ‘‘(iv) on or after October 1, 2009, the applica- (c) EFFECTIVE DATE.—The amendments made after October 1, 2004, clauses (i) through (iii) ble Puerto Rico percentage is 50 percent and the by this section shall apply to hospice care pro- shall be applied only with respect to a hospital’s applicable Federal percentage is 50 percent.’’. vided on or after October 1, 2004. approved medical residency training program in SEC. 407. SERVICES PROVIDED TO HOSPICE PA- SEC. 410. EXCEPTION TO INITIAL RESIDENCY PE- the fields of allopathic and osteopathic medi- RIOD FOR GERIATRIC RESIDENCY OR TIENTS BY NURSE PRACTITIONERS, cine.’’. CLINICAL NURSE SPECIALISTS, AND FELLOWSHIP PROGRAMS. SEC. 412. LIMITATION ON CHARGES FOR INPA- PHYSICIAN ASSISTANTS. (a) CLARIFICATION OF CONGRESSIONAL IN- TIENT HOSPITAL CONTRACT (a) IN GENERAL.—Section 1812(d)(2)(A) (42 TENT.—Congress intended section HEALTH SERVICES PROVIDED TO IN- U.S.C. 1395d(d)(2)(A) in the matter following 1886(h)(5)(F)(ii) of the Social Security Act (42 DIANS BY MEDICARE PARTICIPATING clause (i)(II), is amended— U.S.C. 1395ww(h)(5)(F)(ii)), as added by section HOSPITALS. (1) by inserting ‘‘or services described in sec- 9202 of the Consolidated Omnibus Budget Rec- (a) IN GENERAL.—Section 1866(a)(1) (42 U.S.C. tion 1861(s)(2)(K)’’ after ‘‘except that clause (i) onciliation Act of 1985 (Public Law 99–272), to 1395cc(a)(1)) is amended— shall not apply to physicians’ services’’; and provide an exception to the initial residency pe- (1) in subparagraph (R), by striking ‘‘and’’ at (2) by inserting ‘‘, or by a physician assistant, riod for geriatric residency or fellowship pro- the end; nurse practitioner, or clinical nurse specialist grams such that, where a particular approved (2) in subparagraph (S), by striking the period whom is not an employee of the hospice pro- geriatric training program requires a resident to and inserting ‘‘, and’’; and gram, and who the individual identifies as the complete 2 years of training to initially become (3) by adding at the end the following new health care provider having the most significant board eligible in the geriatric specialty, the 2 subparagraph: role in the determination and delivery of med- years spent in the geriatric training program are ‘‘(T) in the case of hospitals which furnish in- ical care to the individual at the time the indi- treated as part of the resident’s initial residency patient hospital services for which payment may vidual makes an election to receive hospice period, but are not counted against any limita- be made under this title, to be a participating care,’’ after the ‘‘(if not an employee of the hos- tion on the initial residency period. provider of medical care— ‘‘(i) under the contract health services pro- pice program)’’. (b) INTERIM FINAL REGULATORY AUTHORITY gram funded by the Indian Health Service and (b) PERMITTING NURSE PRACTITIONERS, PHYSI- AND EFFECTIVE DATE.—The Secretary shall pro- CIAN ASSISTANTS, AND CLINICAL NURSE SPE- mulgate interim final regulations consistent operated by the Indian Health Service, an In- CIALIST TO REVIEW HOSPICE PLANS OF CARE.— with the congressional intent expressed in this dian tribe, or tribal organization (as those terms Section 1814(a)(7)(B) is amended by inserting section after notice and pending opportunity for are defined in section 4 of the Indian Health ‘‘(or by a physician assistant, nurse practitioner public comment to be effective for cost reporting Care Improvement Act), with respect to items or clinical nurse specialist who is not an em- periods beginning on or after October 1, 2003. and services that are covered under such pro- ployee of the hospice program, and whom the gram and furnished to an individual eligible for SEC. 411. CLARIFICATION OF CONGRESSIONAL IN- such items and services under such program; individual identifies as the health care provider TENT REGARDING THE COUNTING having the most significant role in the deter- OF RESIDENTS IN A NONPROVIDER and mination and delivery of medical care to the in- SETTING AND A TECHNICAL AMEND- ‘‘(ii) under a program funded by the Indian dividual at the time the individual makes an MENT REGARDING THE 3-YEAR ROLL- Health Service and operated by an urban In- election to receive hospice care)’’ after ‘‘and is ING AVERAGE AND THE IME RATIO. dian organization with respect to the purchase periodically reviewed by the individual’s attend- (a) CLARIFICATION OF REQUIREMENTS FOR of items and services for an eligible urban In- ing physician’’. COUNTING RESIDENTS TRAINING IN NONPROVIDER dian (as those terms are defined in such section (c) EFFECTIVE DATE.—The amendments made SETTING.— 4), by this section shall apply to hospice care fur- (1) D–GME.—Section 1886(h)(4)(E) (42 U.S.C. in accordance with regulations promulgated by nished on or after October 1, 2004. 1395ww(h)(4)(E)) is amended by adding at the the Secretary regarding admission practices,

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00079 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8948 CONGRESSIONAL RECORD — SENATE July 7, 2003 payment methodology, and rates of payment hospital services under section 1886(d) of the So- Security Act (42 U.S.C. 1395ww(d)(1)(B)), the (including the acceptance of no more than such cial Security Act (42 U.S.C. 1395ww(d)). Secretary shall permit rural community hos- payment rate as payment in full for such items (2) OUTPATIENT SERVICES.—The amount of pitals to establish distinct part units for pur- and services).’’. payment under the demonstration program for poses of applying such section. (b) EFFECTIVE DATE.—The amendments made outpatient services furnished in a rural commu- (c) FUNDING.— by this section shall apply as of a date specified nity hospital is, at the election of the hospital in (1) IN GENERAL.—The Secretary shall provide by the Secretary of Health and Human Services the application referred to in subsection for the transfer from the Federal Hospital Insur- (but in no case later than 6 months after the (a)(2)(A)— ance Trust Fund under section 1817 of the So- date of enactment of this Act) to medicare par- (A) the reasonable costs of providing such cial Security Act (42 U.S.C. 1395i) and the Fed- ticipation agreements in effect (or entered into) services, without regard to the amount of the eral Supplementary Insurance Trust Fund es- on or after such date. customary or other charge and any limitation tablished under section 1841 of such Act (42 SEC. 413. GAO STUDY AND REPORT ON APPRO- under section 1861(v)(1)(U) of the Social Secu- U.S.C. 1395t), in such proportion as the Sec- PRIATENESS OF PAYMENTS UNDER rity Act (42 U.S.C. 1395x(v)(1)(U)); or retary determines to be appropriate, of such THE PROSPECTIVE PAYMENT SYS- (B) the amount of payment provided for under funds as are necessary for the costs of carrying TEM FOR INPATIENT HOSPITAL the prospective payment system for covered OPD out the demonstration program under this sec- SERVICES. services under section 1833(t) of the Social Secu- tion. (a) STUDY.—The Comptroller General of the rity Act (42 U.S.C. 1395l(t)). (2) BUDGET NEUTRALITY.—In conducting the United States, using the most current data (3) HOME HEALTH SERVICES.—In determining demonstration program under this section, the available, shall conduct a study to determine— payments under the demonstration program for Secretary shall ensure that the aggregate pay- (1) the appropriate level and distribution of home health services furnished by a qualified ments made by the Secretary do not exceed the payments in relation to costs under the prospec- RCH-based home health agency (as defined in amount which the Secretary would have paid if tive payment system under section 1886 of the paragraph (2))— the demonstration program under this section Social Security Act (42 U.S.C. 1395ww) for inpa- (A) the agency may make a one-time election was not implemented. tient hospital services furnished by subsection to waive application of the prospective payment (d) WAIVER AUTHORITY.—The Secretary may (d) hospitals (as defined in subsection (d)(1)(B) system established under section 1895 of the So- waive such requirements of titles XI and XVIII of such section); and cial Security Act (42 U.S.C. 1395fff) to such serv- of the Social Security Act (42 U.S.C. 1301 et seq.; (2) whether there is a need to adjust such pay- ices furnished by the agency; and 1395 et seq.) as may be necessary for the purpose ments under such system to reflect legitimate (B) in the case of such an election, payment of carrying out the demonstration program differences in costs across different geographic shall be made on the basis of the reasonable under this section. areas, kinds of hospitals, and types of cases. costs incurred in furnishing such services as de- (e) REPORT.—Not later than 6 months after (b) REPORT.—Not later than 24 months after termined under section 1861(v) of the Social Se- the date of enactment of this Act, the Comp- the completion of the demonstration program curity Act (42 U.S.C. 1395x(v)), but without re- troller General of the United States shall submit under this section, the Secretary shall submit to gard to the amount of the customary or other to Congress a report on the study conducted Congress a report on such program, together charges with respect to such services or the limi- under subsection (a) together with such rec- with recommendations for such legislation and tations established under paragraph (1)(L) of ommendations for legislative and administrative administrative action as the Secretary deter- such section. action as the Comptroller General determines mines to be appropriate. (4) CONSOLIDATED BILLING.—The Secretary (f) DEFINITIONS.—In this section: appropriate. shall permit consolidated billing under section (1) RURAL COMMUNITY HOSPITAL.— SEC. 414. RURAL COMMUNITY HOSPITAL DEM- 1842(b)(6)(E) of the Social Security Act (42 (A) IN GENERAL.—The term ‘‘rural community ONSTRATION PROGRAM. U.S.C. 1395u(b)(6)(E)). hospital’’ means a hospital (as defined in sec- (a) ESTABLISHMENT OF RURAL COMMUNITY (5) EXEMPTION FROM 30 PERCENT REDUCTION IN tion 1861(e) of the Social Security Act (42 U.S.C. HOSPITAL (RCH) DEMONSTRATION PROGRAM.— REIMBURSEMENT FOR BAD DEBT.—In determining 1395x(e))) that— (1) IN GENERAL.—The Secretary shall establish the reasonable costs for rural community hos- a demonstration program to test the feasibility (i) is located in a rural area (as defined in sec- pitals, section 1861(v)(1)(T) of the Social Secu- and advisability of the establishment of rural tion 1886(d)(2)(D) of such Act (42 U.S.C. rity Act (42 U.S.C. 1395x(v)(1)(T)) shall not community hospitals that furnish rural commu- 1395ww(d)(2)(D))) or treated as being so located apply. nity hospital services to medicare beneficiaries. pursuant to section 1886(d)(8)(E) of such Act (42 (6) BENEFICIARY COST-SHARING FOR OUT- (2) DESIGNATION OF RCHS.— U.S.C. 1395ww(d)(8)(E)); (A) APPLICATION.—Each hospital that is lo- PATIENT SERVICES.—The amounts of beneficiary (ii) subject to subparagraph (B), has less than cated in a demonstration area described in sub- cost-sharing for outpatient services furnished in 51 acute care inpatient beds, as reported in its paragraph (C) that desires to participate in the a rural community hospital under the dem- most recent cost report; demonstration program under this section shall onstration program shall be as follows: (iii) makes available 24-hour emergency care submit an application to the Secretary at such (A) For items and services that would have services; time, in such manner, and containing such in- been paid under section 1833(t) of the Social Se- (iv) subject to subparagraph (C), has a pro- formation as the Secretary may require. curity Act (42 U.S.C. 1395l(t)) if provided by a vider agreement in effect with the Secretary and (B) DESIGNATION.—The Secretary shall des- hospital, the amount of cost-sharing determined is open to the public as of January 1, 2003; and ignate any hospital that is located in a dem- under paragraph (8) of such section. (v) applies to the Secretary for such designa- onstration area described in subparagraph (C), (B) For items and services that would have tion. submits an application in accordance with sub- been paid under section 1833(h) of such Act (42 (B) TREATMENT OF PSYCHIATRIC AND REHA- paragraph (A), and meets the other require- U.S.C. 1395l(h)) if furnished by a provider or BILITATION UNITS.—For purposes of paragraph ments of this section as a rural community hos- supplier, no cost-sharing shall apply. (1)(B), beds in a psychiatric or rehabilitation pital for purposes of the demonstration program. (C) For all other items and services, the unit of the hospital which is a distinct part of (C) DEMONSTRATION AREAS.—There shall be amount of cost-sharing that would apply to the the hospital shall not be counted. four demonstration areas within this program. item or service under the methodology that (C) TYPES OF HOSPITALS THAT MAY PARTICI- Two of these demonstration areas described in would be used to determine payment for such PATE.—Subparagraph (1)(D) shall not be con- this subparagraph shall include Kansas and Ne- item or service if provided by a physician, pro- strued to prohibit any of the following from braska. vider, or supplier, as the case may be. qualifying as a rural community hospital: (3) DURATION.—The Secretary shall conduct (7) RETURN ON EQUITY.— (i) A replacement facility (as defined by the the demonstration program under this section (A) IN GENERAL.—Notwithstanding subpara- Secretary in regulations in effect on January 1, for a 5-year period. graph (P)(i) and (S)(i) of section 1861(v)(1) of 2003) with the same service area (as defined by (4) IMPLEMENTATION.—The Secretary shall im- the Social Security Act (42 U.S.C. 1395x(v)(1)) the Secretary in regulations in effect on such plement the demonstration program not later and section 1886(g)(2) of such Act (42 U.S.C. date). than January 1, 2005, but may not implement 1395ww(g)(2)), in determining the reasonable (ii) A facility obtaining a new provider num- the program before October 1, 2004. costs of the services described in subclause (II) ber pursuant to a change of ownership. (b) PAYMENT.— furnished by a rural community hospital for (iii) A facility which has a binding written (1) INPATIENT HOSPITAL SERVICES.—The payment of a return on equity capital at a rate agreement with an outside, unrelated party for amount of payment under the demonstration of return equal to 150 percent of the average the construction, reconstruction, lease, rental, program for inpatient hospital services fur- specified in section 1861(v)(1)(P)(i) of such Act or financing of a building as of January 1, 2003. nished in a rural community hospital, other (42 U.S.C. 1395x(v)(1)(P)(i)). (D) INCLUSION OF CAHS.—Nothing in this sub- than such services furnished in a psychiatric or (B) SERVICES DESCRIBED.—The services re- section shall be construed as prohibiting a crit- rehabilitation unit of the hospital which is a ferred to in subclause (I) are rural community ical access hospital from qualifying as a rural distinct part, is, at the election of the hospital hospital services. community hospital if the critical access hos- in the application referred to in subsection (C) DISREGARD OF PROPRIETARY PROVIDER pital meets the conditions otherwise applicable (a)(2)(A)— STATUS.—Payment under the demonstration pro- to hospitals under section 1861(e) of the Social (A) the reasonable costs of providing such gram shall be made without regard to whether a Security Act (42 U.S.C. 1395x(e)) and section services, without regard to the amount of the provider is a proprietary provider. 1866 of such Act (42 U.S.C. 1395cc). customary or other charge; or (8) REMOVING BARRIERS TO ESTABLISHMENT OF (2) QUALIFIED RCH-BASED HOME HEALTH AGEN- (B) the amount of payment provided for under DISTINCT PART UNITS BY RCH FACILITIES.—Not- CY DEFINED.—The term ‘‘qualified RCH-based the prospective payment system for inpatient withstanding section 1886(d)(1)(B) of the Social home health agency’’ is a home health agency

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00080 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8949 that is a provider-based entity (as defined in tation unit (described in the matter following ments made by the Secretary do not exceed the section 404 of the Medicare, Medicaid, and section 1886(d)(1)(B)(v) of such Act (42 U.S.C. amount which the Secretary would have paid if SCHIP Benefits Improvement and Protection 1395ww(d)(1)(B)(v))) of a critical access hospital the demonstration program under this section Act of 2000 (Public Law 106–554; Appendix F, participating in the demonstration program— was not implemented. 114 Stat. 2763A–506)) of a rural community hos- (i) the limits imposed under the preceding (c) WAIVER AUTHORITY.—The Secretary may pital that is located— paragraphs of this subsection shall not apply; waive such requirements of titles XI and XVIII (A) in a county in which no main or branch and of the Social Security Act (42 U.S.C. 1301 et seq.; office of another home health agency is located; (ii) payment shall be made on the basis of the 1395 et seq.) as may be necessary for the purpose or reasonable costs incurred in furnishing such of carrying out the demonstration program (B) at least 35 miles from any main or branch services as determined under section 1861(v) of under this section. office of another home health agency. such Act (42 U.S.C. 1395x(v)), but without re- (d) REPORT.—Not later than 6 months after SEC. 415. CRITICAL ACCESS HOSPITAL IMPROVE- gard to the amount of the customary or other the completion of the demonstration program MENT DEMONSTRATION PROGRAM. charges with respect to such services. under this section, the Secretary shall submit to (a) ESTABLISHMENT OF CRITICAL ACCESS HOS- (F) RETURN ON EQUITY.— Congress a report on such program, together PITAL DEMONSTRATION PROGRAM.— (i) IN GENERAL.—Notwithstanding subpara- with recommendations for such legislation and (1) IN GENERAL.—The Secretary shall establish graph (P)(i) and (S)(i) of section 1861(v)(1) of administrative action as the Secretary deter- a demonstration program to test various meth- the Social Security Act (42 U.S.C. 1395x(v)(1)) mines to be appropriate. ods to improve the critical access hospital pro- and section 1886(g)(2) of such Act (42 U.S.C. SEC. 416. TREATMENT OF GRANDFATHERED gram under section 1820 of the Social Security 1395ww(g)(2)), in determining the reasonable LONG-TERM CARE HOSPITALS. Act (42 U.S.C. 1395i–4). costs of the services described in subclause (II) (a) IN GENERAL.—The last sentence of section (2) CRITICAL ACCESS HOSPITAL IMPROVE- furnished by a critical access hospital partici- 1886(d)(1)(B) is amended by inserting ‘‘, and the MENT.—In conducting the demonstration pro- pating in the demonstration program for pay- Secretary may not impose any special conditions gram under this section, the Secretary shall ment of a return on equity capital at a rate of on the operation, size, number of beds, or loca- apply rules with respect to critical access hos- return equal to 150 percent of the average speci- tion of any hospital so classified for continued pitals participating in the program as follows: fied in section 1861(v)(1)(P)(i) of such Act (42 participation under this title or title XIX or for (A) EXCLUSION OF CERTAIN BEDS FROM BED U.S.C. 1395x(v)(1)(P)(i)). continued classification as a hospital described COUNT.—In determining the number of beds of a (ii) SERVICES DESCRIBED.—The services rein clause (iv)’’ before the period at the end. facility for purposes of applying the bed limita- ferred to in subclause (I) are inpatient critical (b) TREATMENT OF PROPOSED REVISION.—The tions referred to in subsections (c)(2)(B)(iii) and access hospital services, outpatient critical ac- Secretary shall not adopt the proposed revision (f) of section 1820 of the Social Security Act (42 cess hospital services, extended care services, to section 412.22(f) of title 42, Code of Federal U.S.C. 1395i–4), the Secretary shall not take into posthospital extended care services, home health Regulations contained in 68 Federal Register account any bed of a distinct part psychiatric or services, ambulance services, and inpatient hos- 27154 (May 19, 2003) or any revision reaching rehabilitation unit (described in the matter fol- pital services. the same or substantially the same result as lowing clause (v) of section 1886(d)(1)(B) of such (iii) DISREGARD OF PROPRIETARY PROVIDER such revision. Act (42 U.S.C. 1395ww(d)(1)(B))) of the facility, STATUS.—Payment under the demonstration pro- (c) EFFECTIVE DATE.—The amendment made except that the total number of beds that are not gram shall be made without regard to whether a by, and provisions of, this section shall apply to taken into account pursuant to this subpara- provider is a proprietary provider. cost reporting periods ending on or after Decem- graph with respect to a facility shall not exceed (G) REMOVING BARRIERS TO ESTABLISHMENT OF ber 31, 2002. 10. DISTINCT PART UNITS BY CAH FACILITIES.—Not- SEC. 417. TREATMENT OF CERTAIN ENTITIES FOR (B) EXCLUSION FROM HOME HEALTH PPS.—Not- withstanding section 1886(d)(1)(B) of the Social PURPOSES OF PAYMENTS UNDER withstanding section 1895 of the Social Security Security Act (42 U.S.C. 1395ww(d)(1)(B)), the THE MEDICARE PROGRAM. Act (42 U.S.C. 1395fff), in determining payments Secretary shall permit critical access hospitals (a) PAYMENTS TO HOSPITALS.— under the demonstration program for home participating in the demonstration program to (1) IN GENERAL.—Notwithstanding any other health services furnished by a home health establish distinct part units for purposes of ap- provision of law, effective for discharges occur- agency that is owned and operated by a critical plying such section. ring on or after October 1, 2003, for purposes of access hospital participating in the demonstra- (3) PARTICIPATION OF CAHS.— making payments to hospitals (as defined in section program— (A) APPLICATION.—Each critical access hos- tion 1886(d) and 1833(t) of the Social Security (i) the agency may make an election to waive pital that is located in a demonstration area de- Act (42 U.S.C. 1395(d)) under the medicare pro- application of the prospective payment system scribed in subparagraph (C) that desires to par- gram under title XVIII of such Act (42 U.S.C. established under such section to such services ticipate in the demonstration program under 1395 et seq.), Iredell County, North Carolina, furnished by the agency; and this section shall submit an application to the and Rowan County, North Carolina, are deemed (ii) in the case of such an election, payment Secretary at such time, in such manner, and to be located in the Charlotte-Gastonia-Rock shall be made on the basis of the reasonable containing such information as the Secretary Hill, North Carolina, South Carolina Metropoli- costs incurred in furnishing such services as de- may require. tan Statistical Area. termined under section 1861(v), but without re- (B) PARTICIPATION.—The Secretary shall per- (2) BUDGET NEUTRAL WITHIN NORTH CARO- gard to the amount of the customary or other mit any critical access hospital that is located in LINA.—The Secretary shall adjust the area wage charges with respect to such services or the limi- a demonstration area described in subparagraph index referred to in paragraph (1) with respect tations established under paragraph (1)(L) of (C), submits an application in accordance with to payments to hospitals located in North Caro- such section. subparagraph (A), and meets the other require- lina in a manner which assures that the total (C) EXEMPTION OF CAH FACILITIES FROM PPS.— ments of this section to participate in the dem- payments made under section 1886(d) of the So- Notwithstanding section 1888(e) of the Social Se- onstration program. cial Security Act (42 U.S.C., 1395(ww)(d)) in a curity Act (42 U.S.C. 1395yy(e)), in determining (C) DEMONSTRATION AREAS.—There shall be fiscal year for the operating cost of inpatient payments under this part for covered skilled four demonstration areas within this program. hospital services are not greater or less than the nursing facility services furnished by a skilled Two of these demonstration areas described in total of such payments that would have been nursing facility that is a distinct part unit of a this subparagraph shall include Kansas and Ne- made in the year if this subsection had not been critical access hospital participating in the dem- braska. enacted. onstration program or is owned and operated by (4) DURATION.—The Secretary shall conduct (b) PAYMENTS TO SKILLED NURSING FACILITIES a critical access hospital participating in the the demonstration program under this section AND HOME HEALTH AGENCIES.— demonstration program— for a 5-year period. (1) IN GENERAL.—Notwithstanding any other (i) the prospective payment system established (5) IMPLEMENTATION.—The Secretary shall im- provision of law, effective beginning October 1, under such section shall not apply; and plement the demonstration program not later 2003, for purposes of making payments to skilled (ii) payment shall be made on the basis of the than January 1, 2005, but may not implement nursing facilities (SNFs) and home health agen- reasonable costs incurred in furnishing such the program before October 1, 2004. cies (as defined in sections 1861(j) and 1861(o) of services as determined under section 1861(v) of (b) FUNDING.— the Social Security Act (42 U.S.C. 1395x(j); such Act (42 U.S.C. 1395x(v)), but without re- (1) IN GENERAL.—The Secretary shall provide 1395x(o)) under the medicare program under gard to the amount of the customary or other for the transfer from the Federal Hospital Insur- title XVIII of such Act, Iredell County, North charges with respect to such services. ance Trust Fund under section 1817 of the So- Carolina, and Rowan County, North Carolina, (D) CONSOLIDATED BILLING.—The Secretary cial Security Act (42 U.S.C. 1395i) and the Fed- are deemed to be located in the Charlotte-Gas- shall permit consolidated billing under section eral Supplementary Insurance Trust Fund es- tonia-Rock Hill, North Carolina, South Carolina 1842(b)(6)(E) of the Social Security Act (42 tablished under section 1841 of such Act (42 Metropolitan Statistical Area. U.S.C. 1395u(b)(6)(E)). U.S.C. 1395t), in such proportion as the Sec- (2) APPLICATION AND BUDGET NEUTRAL WITHIN (E) EXEMPTION OF CERTAIN DISTINCT PART retary determines to be appropriate, of such NORTH CAROLINA.—Effective for fiscal year 2004, PSYCHIATRIC OR REHABILITATION UNITS FROM funds as are necessary for the costs of carrying the skilled nursing facility PPS and home COST LIMITS.—Notwithstanding section 1886(b) out the demonstration program under this sec- health PPS rates for Iredell County, North of the Social Security Act (42 U.S.C. 1395ww(b)), tion. Carolina, and Rowan County, North Carolina, in determining payments under the demonstra- (2) BUDGET NEUTRALITY.—In conducting the will be updated by the prefloor, prereclassified tion program for inpatient hospital services fur- demonstration program under this section, the hospital wage index available for the Charlotte- nished by a distinct part psychiatric or rehabili- Secretary shall ensure that the aggregate pay- Gastonia-Rock Hill, North Carolina, South

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00081 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8950 CONGRESSIONAL RECORD — SENATE July 7, 2003 Carolina Metropolitan Statistical Area. This SEC. 420B. TREATMENT OF GRANDFATHERED gram under section 1833(m) of the Social Secu- subsection shall be implemented in a budget LONG-TERM CARE HOSPITALS. rity Act (42 U.S.C. 1395l(m)). Such study shall neutral manner, using a methodology that en- (a) IN GENERAL.—The last sentence of section focus on whether such program increases the ac- sures that the total amount of expenditures for 1886(d)(1)(B) is amended by inserting ‘‘, and the cess of medicare beneficiaries who reside in an skilled nursing facility services and home health Secretary may not impose any special conditions area that is designated (under section services in a year does not exceed the total on the operation, size, number of beds, or loca- 332(a)(1)(A) of the Public Health Service Act (42 amount of expenditures that would have been tion of any hospital so classified for continued U.S.C. 254e(a)(1)(A))) as a health professional made in the year if this subsection had not been participation under this title or title XIX or for shortage area to physicians’ services under the enacted. Required adjustments by reason of the continued classification as a hospital described medicare program. preceding sentence shall be done with respect to in clause (iv)’’ before the period at the end. (2) ANNUAL REPORTS.—Not later than 1 year skilled nursing facilities and home health agen- (b) TREATMENT OF PROPOSED REVISION.—The after the date of enactment of this Act, and an- cies located in North Carolina. Secretary shall not adopt the proposed revision nually thereafter, the Comptroller General of (c) CONSTRUCTION.—The provisions of this sec- to section 412.22(f) of title 42, Code of Federal the United States shall submit to Congress a re- tion shall have no effect on the amount of pay- Regulations contained in 68 Federal Register port on the study conducted under paragraph ments made under title XVIII of the Social Secu- 27154 (May 19, 2003) or any revision reaching (1), together with recommendations as the rity Act to entities located in States other than the same or substantially the same result as Comptroller General considers appropriate. North Carolina. such revision. SEC. 423. EXTENSION OF HOLD HARMLESS PROVI- SEC. 418. REVISION OF THE INDIRECT MEDICAL (c) EFFECTIVE DATE.—The amendment made SIONS FOR SMALL RURAL HOS- PITALS AND TREATMENT OF CER- EDUCATION (IME) ADJUSTMENT by, and provisions of, this section shall apply to TAIN SOLE COMMUNITY HOSPITALS PERCENTAGE. cost reporting periods ending on or after Decem- TO LIMIT DECLINE IN PAYMENT (a) IN GENERAL.—Section 1886(d)(5)(B)(ii) (42 ber 31, 2002. UNDER THE OPD PPS. U.S.C. 1395ww(d)(5)(B)(ii)) is amended— Subtitle B—Provisions Relating to Part B (a) SMALL RURAL HOSPITALS.—Section (1) in subclause (VI), by striking ‘‘and’’ after 1833(t)(7)(D)(i) (42 U.S.C. 1395l(t)(7)(D)(i)) is the semicolon at the end; SEC. 421. ESTABLISHMENT OF FLOOR ON GEO- GRAPHIC ADJUSTMENTS OF PAY- amended by inserting ‘‘and during 2006’’ after (2) in subclause (VII)— ‘‘2004,’’. (A) by striking ‘‘on or after October 1, 2002’’ MENTS FOR PHYSICIANS’ SERVICES. Section 1848(e)(1) (42 U.S.C. 1395w–4(e)(1)) is (b) SOLE COMMUNITY HOSPITALS.—Section and inserting ‘‘during fiscal year 2003’’; and 1833(t)(7)(D) (42 U.S.C. 1395l(t)(7)(D)) is amend- (B) by striking the period at the end and in- amended— (1) in subparagraph (A), by striking ‘‘sub- ed by adding at the end the following: serting a semicolon; and ‘‘(iii) TEMPORARY TREATMENT FOR SOLE COM- (3) by adding at the end the following new paragraphs (B) and (C)’’ and inserting ‘‘subparagraphs (B), (C), (E), and (F)’’; and MUNITY HOSPITALS.—In the case of a sole com- subclauses: munity hospital (as defined in section ‘‘(VIII) during each of fiscal years 2004 and (2) by adding at the end the following new 1886(d)(5)(D)(iii)) located in a rural area, for 2005, ‘c’ is equal to 1.36; and subparagraphs: covered OPD services furnished in 2006, for ‘‘(IX) on or after October 1, 2005, ‘c’ is equal ‘‘(E) FLOOR FOR WORK GEOGRAPHIC INDICES.— which the PPS amount is less than the pre-BBA to 1.355.’’. ‘‘(i) IN GENERAL.—For purposes of payment amount, the amount of payment under this sub- (b) CONFORMING AMENDMENT RELATING TO for services furnished on or after January 1, section shall be increased by the amount of such DETERMINATION OF STANDARDIZED AMOUNT.— 2004, and before January 1, 2008, after calcu- difference.’’. Section 1886(d)(2)(C)(i) (42 U.S.C. lating the work geographic indices in subpara- 1395ww(d)(2)(C)(i)) is amended— graph (A)(iii), the Secretary shall increase the SEC. 424. INCREASE IN PAYMENTS FOR CERTAIN (1) by striking ‘‘1999 or’’ and inserting SERVICES FURNISHED BY SMALL work geographic index to the work floor index RURAL AND SOLE COMMUNITY HOS- ‘‘1999,’’; and for any locality for which such geographic PITALS UNDER MEDICARE PROSPEC- (2) by inserting ‘‘, or the Prescription Drug index is less than the work floor index. TIVE PAYMENT SYSTEM FOR HOS- and Medicare Improvement Act of 2003’’ after ‘‘(ii) WORK FLOOR INDEX.—For purposes of PITAL OUTPATIENT DEPARTMENT ‘‘2000’’. clause (i), the term ‘applicable floor index’ SERVICES. (c) EFFECTIVE DATE.—The amendments made means— (a) INCREASE.— by this section shall apply to discharges occur- ‘‘(I) 0.980 with respect to services furnished (1) IN GENERAL.—In the case of an applicable ring on or after October 1, 2003. during 2004; and covered OPD service (as defined in paragraph SEC. 419. CALCULATION OF WAGE INDICES FOR ‘‘(II) 1.000 for services furnished during 2005, (2)) that is furnished by a hospital described in HOSPITALS. 2006, and 2007. clause (i) or (iii) of paragraph (7)(D) of section Notwithstanding any other provision of law, ‘‘(F) FLOOR FOR PRACTICE EXPENSE AND MAL- 1833(t) of the Social Security Act (42 U.S.C. in the calculation of a wage index in a State for PRACTICE GEOGRAPHIC INDICES.—For purposes of 1395l(t)), as amended by section 424, on or after purposes of making payments for discharges oc- payment for services furnished on or after Janu- January 1, 2005, and before January 1, 2008, the curring during fiscal year 2004, the Secretary ary 1, 2005, and before January 1, 2008, after Secretary shall increase the medicare OPD fee may waive such other criteria for reclassifica- calculating the practice expense and mal- schedule amount (as determined under para- tion, as deemed appropriate by the Secretary. practice indices in clauses (i) and (ii) of sub- graph (4)(A) of such section) that is applicable SEC. 420. CONFORMING CHANGES REGARDING paragraph (A) and in subparagraph (B), the for such service in that year (determined with- FEDERALLY QUALIFIED HEALTH Secretary shall increase any such index to 1.00 out regard to any increase under this section in CENTERS. for any locality for which such index is less a previous year) by 5 percent. (2) APPLICABLE COVERED OPD SERVICES DE- Section 1833(a)(3) (42 U.S.C. 1395l(a)(3)) is than 1.00.’’. amended by inserting ‘‘(which regulations shall FINED.—For purposes of this section, the term SEC. 422. MEDICARE INCENTIVE PAYMENT PRO- ‘‘applicable covered OPD service’’ means a cov- exclude any cost incurred for the provision of GRAM IMPROVEMENTS. services pursuant to a contract with an eligible ered clinic or emergency room visit that is classi- (a) PROCEDURES FOR SECRETARY, AND NOT entity (as defined in section 1860D(4)) operating fied within the groups of covered OPD services PHYSICIANS, TO DETERMINE WHEN BONUS PAY- a Medicare Prescription Drug plan or with an (as defined in paragraph (1)(B) of section 1833(t) MENTS UNDER MEDICARE INCENTIVE PAYMENT entity with a contract under section 1860D– of the Social Security Act (42 U.S.C. 1395l(t))) PROGRAM SHOULD BE MADE.—Section 1833(m) 13(e), for which payment is made by the entity)’’ established under paragraph (2)(B) of such sec- (42 U.S.C. 1395l(m)) is amended— after ‘‘the Secretary may prescribe in regulation. (1) by inserting ‘‘(1)’’ after ‘‘(m)’’; and tions’’. (b) NO EFFECT ON COPAYMENT AMOUNT.—The (2) by adding at the end the following new Secretary shall compute the copayment amount SEC. 420A. INCREASE FOR HOSPITALS WITH DIS- paragraph: PROPORTIONATE INDIGENT CARE for applicable covered OPD services under sec- REVENUES. ‘‘(2) The Secretary shall establish procedures tion 1833(t)(8)(A) of the Social Security Act (42 (a) DISPROPORTIONATE SHARE ADJUSTMENT under which the Secretary, and not the physi- U.S.C. 1395l(t)(8)(A)) as if this section had not PERCENTAGE.—Section 1886(d)(5)(F)(iii) (42 cian furnishing the service, is responsible for de- been enacted. U.S.C. 1395ww(d)(5)(F)(iii)) is amended by strik- termining when a payment is required to be (c) NO EFFECT ON INCREASE UNDER HOLD ing ‘‘35 percent’’ and inserting ‘‘35 percent (or, made under paragraph (1).’’. HARMLESS OR OUTLIER PROVISIONS.—The Sec- for discharges occurring on or after October 1, (b) EDUCATIONAL PROGRAM REGARDING THE retary shall apply the temporary hold harmless 2003, 40 percent)’’. MEDICARE INCENTIVE PAYMENT PROGRAM.—The provision under clause (i) and (iii) of paragraph (b) CAPITAL COSTS.—Section 1886(g)(1)(B) (42 Secretary shall establish and implement an on- (7)(D) of section 1833(t) of the Social Security U.S.C. 1395ww(g)(1)(B)) is amended— going educational program to provide education Act (42 U.S.C. 1395l(t)) and the outlier provision (1) in clause (iii), by striking ‘‘and’’ at the to physicians under the medicare program on under paragraph (5) of such section as if this end; the medicare incentive payment program under section had not been enacted. (2) in clause (iv), by striking the period at the section 1833(m) of the Social Security Act (42 (d) WAIVING BUDGET NEUTRALITY AND NO RE- end and inserting ‘‘, and’’; and U.S.C. 1395l(m)). VISION OR ADJUSTMENTS.—The Secretary shall (3) by adding at the end the following new (c) ONGOING GAO STUDY AND ANNUAL REPORT not make any revision or adjustment under subclause: ON THE MEDICARE INCENTIVE PAYMENT PRO- paragraph (A), (B), or (C) of section 1833(t)(9) of ‘‘(v) in the case of cost reporting periods be- GRAM.— the Social Security Act (42 U.S.C. 1395l(t)(9)) beginning on or after October 1, 2003, shall pro- (1) ONGOING STUDY.—The Comptroller General cause of the application of subsection (a)(1). vide for a disproportionate share adjustment in of the United States shall conduct an ongoing (e) NO EFFECT ON PAYMENTS AFTER INCREASE the same manner as section 1886(d)(5)(F)(iii).’’. study on the medicare incentive payment pro- PERIOD ENDS.—The Secretary shall not take

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00082 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8951 into account any payment increase provided lance service’ means fixed wing and rotary wing 1395u(b)(6)(E); 1395cc(a)(1)(H)(ii)) are each under subsection (a)(1) in determining payments air ambulance services.’’. amended by striking ‘‘section 1888(e)(2)(A)(ii)’’ for covered OPD services (as defined in para- (b) CONFORMING AMENDMENT.—Section and inserting ‘‘clauses (ii), (iii), and (iv) of sec- graph (1)(B) of section 1833(t) of the Social Se- 1861(s)(7) (42 U.S.C. 1395x(s)(7)) is amended by tion 1888(e)(2)(A)’’. curity Act (42 U.S.C. 1395l(t))) under such sec- inserting ‘‘, subject to section 1834(l)(11),’’ after (d) EFFECTIVE DATE.—The amendments made tion that are furnished after January 1, 2008. ‘‘but’’. by this section and the provision of subsection (f) TECHNICAL AMENDMENT.—Section (c) EFFECTIVE DATE.—The amendments made (b) shall apply to services furnished on or after 1833(t)(2)(B) (42 U.S.C. 1395l(t)(2)(B)) is amend- by this section shall apply to services furnished January 1, 2005. ed by inserting ‘‘(and periodically revise such on or after January 1, 2005. SEC. 430. FREEZE IN PAYMENTS FOR CERTAIN groups pursuant to paragraph (9)(A))’’ after SEC. 427. TREATMENT OF CERTAIN CLINICAL DI- ITEMS OF DURABLE MEDICAL EQUIP- ‘‘establish groups’’. AGNOSTIC LABORATORY TESTS FUR- MENT AND CERTAIN ORTHOTICS; ES- SEC. 425. TEMPORARY INCREASE FOR GROUND NISHED BY A SOLE COMMUNITY HOS- TABLISHMENT OF QUALITY STAND- AMBULANCE SERVICES. PITAL. ARDS AND ACCREDITATION RE- Section 1834(l) (42 U.S.C. 1395m(l)), as amend- Notwithstanding subsections (a), (b), and (h) QUIREMENTS FOR DME PROVIDERS. ed by section 405(b)(2), is amended by adding at of section 1833 of the Social Security Act (42 (a) FREEZE FOR DME.—Section 1834(a)(14) (42 the end the following new paragraphs: U.S.C. 1395l) and section 1834(d)(1) of such Act U.S.C. 1395m(a)(14)) is amended— ‘‘(10) TEMPORARY INCREASE FOR GROUND AM- (42 U.S.C. 1395m(d)(1)), in the case of a clinical (1) in subparagraph (E), by striking ‘‘and’’ at BULANCE SERVICES.— diagnostic laboratory test covered under part B the end; ‘‘(A) IN GENERAL.—Notwithstanding any other of title XVIII of such Act that is furnished in (2) in subparagraph (F)— provision of this subsection, in the case of 2005 or 2006 by a sole community hospital (as de- (A) by striking ‘‘a subsequent year’’ and in- ground ambulance services furnished on or after fined in section 1886(d)(5)(D)(iii) of such Act (42 serting ‘‘2003’’; and January 1, 2005, and before January 1, 2008, for U.S.C. 1395ww(d)(5)(D)(iii))) as part of services (B) by striking ‘‘the previous year.’’ and in- which the transportation originates in— furnished to patients of the hospital, the fol- serting ‘‘2002;’’; and ‘‘(i) a rural area described in paragraph (9) or lowing rules shall apply: (3) by adding at the end the following new in a rural census tract described in such para- (1) PAYMENT BASED ON REASONABLE COSTS.— subparagraphs: graph, the fee schedule established under this The amount of payment for such test shall be ‘‘(G) for each of the years 2004 through 2010— ‘‘(i) in the case of class III medical devices de- section shall provide that the rate for the service 100 percent of the reasonable costs of the hos- scribed in section 513(a)(1)(C) of the Federal otherwise established, after application of any pital in furnishing such test. Food, Drug, and Cosmetic Act (21 U.S.C. increase under such paragraph, shall be in- (2) NO BENEFICIARY COST-SHARING.—Notwith- 360(c)(1)(C)), the percentage increase described creased by 5 percent; and standing section 432, no coinsurance, deduct- ‘‘(ii) an area not described in clause (i), the ible, copayment, or other cost-sharing otherwise in subparagraph (B) for the year involved; and fee schedule established under this section shall applicable under such part B shall apply with ‘‘(ii) in the case of covered items not described provide that the rate for the service otherwise respect to such test. in clause (i), 0 percentage points; and ‘‘(H) for a subsequent year, the percentage in- established shall be increased by 2 percent. SEC. 428. IMPROVEMENT IN RURAL HEALTH CLIN- ‘‘(B) APPLICATION OF INCREASED PAYMENTS IC REIMBURSEMENT. crease described in subparagraph (B) for the AFTER 2007.—The increased payments under sub- Section 1833(f) (42 U.S.C. 1395l(f)) is amend- year involved.’’. paragraph (A) shall not be taken into account ed— (b) FREEZE FOR OFF-THE-SHELF ORTHOTICS.— in calculating payments for services furnished (1) in paragraph (1), by striking ‘‘, and’’ at Section 1834(h)(4)(A) of the Social Security Act on or after the period specified in such subpara- the end and inserting a semicolon; (42 U.S.C. 1395m(h)(4)(A)) is amended— (1) in clause (vii), by striking ‘‘and’’ at the graph. (2) in paragraph (2)— ‘‘(11) CONVERSION FACTOR ADJUSTMENTS.—The (A) by striking ‘‘in a subsequent year’’ and end; Secretary shall not adjust downward the con- inserting ‘‘in 1989 through 2004’’; and (2) in clause (viii), by striking ‘‘a subsequent version factor in any year because of an evalua- (B) by striking the period at the end and in- year’’ and inserting ‘‘2003’’; and (3) by adding at the end the following new tion of the prior year conversion factor.’’. serting a semicolon; and clauses: SEC. 426. ENSURING APPROPRIATE COVERAGE OF (3) by adding at the end the following new paragraphs: ‘‘(ix) for each of the years 2004 through 2010— AIR AMBULANCE SERVICES UNDER ‘‘(I) in the case of orthotics that have not AMBULANCE FEE SCHEDULE. ‘‘(3) in 2005, at $80 per visit; and been custom-fabricated, 0 percent; and (a) COVERAGE.—Section 1834(l) (42 U.S.C. ‘‘(4) in a subsequent year, at the limit estab- ‘‘(II) in the case of prosthetics, prosthetic de- 1395m(l)), as amended by section 426, is amended lished under this subsection for the previous vices, and custom-fabricated orthotics, the per- by adding at the end the following new para- year increased by the percentage increase in the centage increase described in clause (viii) for the graph: MEI (as so defined) applicable to primary care ‘‘(11) ENSURING APPROPRIATE COVERAGE OF services (as so defined) furnished as of the first year involved; and ‘‘(x) for 2011 and each subsequent year, the AIR AMBULANCE SERVICES.— day of that year.’’. ‘‘(A) IN GENERAL.—The regulations described SEC. 429. ELIMINATION OF CONSOLIDATED BILL- percentage increase described in clause (viii) for in section 1861(s)(7) shall ensure that air ambu- ING FOR CERTAIN SERVICES UNDER the year involved;’’. lance services (as defined in subparagraph (C)) THE MEDICARE PPS FOR SKILLED (c) ESTABLISHMENT OF QUALITY STANDARDS are reimbursed under this subsection at the air NURSING FACILITY SERVICES. AND ACCREDITATION REQUIREMENTS FOR DURA- ambulance rate if the air ambulance service— (a) CERTAIN RURAL HEALTH CLINIC AND FED- BLE MEDICAL EQUIPMENT PROVIDERS.—Section ‘‘(i) is medically necessary based on the health ERALLY QUALIFIED HEALTH CENTER SERVICES.— 1834(a) (42 U.S.C. 1395m(a)) is amended— condition of the individual being transported at Section 1888(e) (42 U.S.C. 1395yy(e)) is amend- (1) by redesignating paragraph (17), as added or immediately prior to the time of the transport; ed— by section 4551(c)(1) of the Balanced Budget Act and (1) in paragraph (2)(A)(i)(II), by striking of 1997 (111 Stat. 458), as paragraph (19); and ‘‘(ii) complies with equipment and crew re- ‘‘clauses (ii) and (iii)’’ and inserting ‘‘clauses (2) by adding at the end the following new quirements established by the Secretary. (ii), (iii), and (iv)’’; and paragraph: ‘‘(B) MEDICALLY NECESSARY.—An air ambu- (2) by adding at the end of paragraph (2)(A) ‘‘(20) IDENTIFICATION OF QUALITY STAND- lance service shall be considered to be medically the following new clause: ARDS.— necessary for purposes of subparagraph (A)(i) if ‘‘(iv) EXCLUSION OF CERTAIN RURAL HEALTH ‘‘(A) IN GENERAL.—Subject to subparagraph such service is requested— CLINIC AND FEDERALLY QUALIFIED HEALTH CEN- (C), the Secretary shall establish and implement ‘‘(i) by a physician or a hospital in accord- TER SERVICES.—Services described in this clause quality standards for providers of durable med- ance with the physician’s or hospital’s respon- are— ical equipment throughout the United States sibilities under section 1867 (commonly known as ‘‘(I) rural health clinic services (as defined in that are developed by recognized independent the Emergency Medical Treatment and Active paragraph (1) of section 1861(aa)); and accreditation organizations (as designated Labor Act); ‘‘(II) Federally qualified health center services under subparagraph (B)(i)) and with which ‘‘(ii) as a result of a protocol established by a (as defined in paragraph (3) of such section); such providers shall be required to comply in State or regional emergency medical service that would be described in clause (ii) if such order to— (EMS) agency; services were furnished by a physician or practi- ‘‘(i) participate in the program under this ‘‘(iii) by a physician, nurse practitioner, phy- tioner not affiliated with a rural health clinic or title; sician assistant, registered nurse, or emergency a Federally qualified health center.’’. ‘‘(ii) furnish any item or service described in medical responder who reasonably determines or (b) CERTAIN SERVICES FURNISHED BY AN ENTI- subparagraph (D) for which payment is made certifies that the patient’s condition is such that TY JOINTLY OWNED BY HOSPITALS AND CRITICAL under this part; and the time needed to transport the individual by ACCESS HOSPITALS.—For purposes of applying ‘‘(iii) receive or retain a provider or supplier land or the lack of an appropriate ground am- section 411.15(p)–(3)(iii) of title 42 of the Code of number used to submit claims for reimbursement bulance, significantly increases the medical Federal Regulations, the Secretary shall treat for any item or service described in subpara- risks for the individual; or an entity that is 100 percent owned as a joint graph (D) for which payment may be made ‘‘(iv) by a Federal or State agency to relocate venture by 2 Medicare-participating hospitals or under this title. patients following a natural disaster, an act of critical access hospitals as a Medicare-partici- ‘‘(B) DESIGNATION OF INDEPENDENT ACCREDI- war, or a terrorist attack. pating hospital or a critical access hospital. TATION ORGANIZATIONS.— ‘‘(C) AIR AMBULANCE SERVICES DEFINED.—For (c) TECHNICAL AMENDMENTS.—Sections ‘‘(i) IN GENERAL.—Not later that the date that purposes of this paragraph, the term ‘air ambu- 1842(b)(6)(E) and 1866(a)(1)(H)(ii) (42 U.S.C. is 6 months after the date of enactment of the

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00083 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8952 CONGRESSIONAL RECORD — SENATE July 7, 2003 Prescription Drug and Medicare Improvement ‘‘(i) the average wholesale price for the drug payment amount is reduced in annual incre- Act of 2003, the Secretary shall designate inde- or biological; or ments equal to 15 percent of the payment pendent accreditation organizations for pur- ‘‘(ii) the amount determined under subpara- amount in such previous year until the payment poses of subparagraph (A). graph (B) amount is equal to the amount determined ‘‘(ii) CONSULTATION.—In determining which ‘‘(B)(i) Subject to clause (ii), the amount de- under clause (i), as increased each year by the independent accreditation organizations to des- termined under this subparagraph is an amount percentage increase described in subparagraph ignate under clause (i), the Secretary shall con- equal to— (B)(i)(II) for the year. The preceding sentence sult with an expert outside advisory panel com- ‘‘(I) in the case of a drug or biological fur- shall not apply to a drug or biological where a posed of an appropriate selection of representa- nished in 2004, 85 percent of the average whole- generic version of the drug or biological first en- tives of physicians, practitioners, suppliers, and sale price for the drug or biological (determined ters the market on or after January 1, 2004 (even manufacturers to review (and advise the Sec- as of April 1, 2003); and if the generic version of the drug or biological is retary concerning) selection of accrediting orga- ‘‘(II) in the case of a drug or biological fur- not marketed under the chemical name of such nizations and the quality standards of such or- nished in 2005 or a subsequent year, the amount drug or biological). ganizations. determined under this subparagraph for the pre- ‘‘(5) In the case of a drug or biological that is ‘‘(C) QUALITY STANDARDS.—The quality vious year increased by the percentage increase first available for payment under this part after standards described in subparagraph (A) may in the consumer price index for medical care for April 1, 2003, the following rules shall apply: not be less stringent than the quality standards the 12-month period ending with June of the ‘‘(A) As a condition of obtaining a code to re- that would otherwise apply if this paragraph previous year. port such new drug or biological and to receive did not apply and shall include consumer serv- ‘‘(ii) In the case of a vaccine described in sub- payment under this part, a manufacturer shall ices standards. paragraph (A) or (B) of section 1861(s)(10), the provide the Secretary (in a time, manner, and ‘‘(D) ITEMS AND SERVICES DESCRIBED.—The amount determined under this subparagraph is form approved by the Secretary) with data and items and services described in this subpara- an amount equal to the average wholesale price information on prices at which the manufac- graph are covered items (as defined in para- for the drug or biological. turer estimates physicians and suppliers will be graph (13)) for which payment may otherwise be ‘‘(C)(i) The Secretary shall establish a process able to routinely obtain the drug or biological in made under this subsection, other than items under which the Secretary determines, for such the market during the first year that the drug or used in infusion, and inhalation drugs used in drugs or biologicals as the Secretary determines biological is available for payment under this conjunction with durable medical equipment. appropriate, whether the widely available mar- part and such additional information that the ‘‘(E) PHASED-IN IMPLEMENTATION.—The appli- ket price to physicians or suppliers for the drug manufacturer determines appropriate. cation of the quality standards described in sub- or biological furnished in a year is different ‘‘(B) During the year that the drug or biologi- paragraph (A) shall be phased-in over a period from the payment amount established under cal is first available for payment under this that does not exceed 3 years.’’. subparagraph (B) for the year. Such determina- part, the manufacturer of the drug or biological SEC. 431. APPLICATION OF COINSURANCE AND tion shall be based on the information described shall provide the Secretary (in a time, manner, DEDUCTIBLE FOR CLINICAL DIAG- in clause (ii) as the Secretary determines appro- and form approved by the Secretary) with up- NOSTIC LABORATORY TESTS. priate. dated information on the actual market prices (a) COINSURANCE.— ‘‘(ii) The information described in this clause paid by such physicians or suppliers for the (1) IN GENERAL.—Section 1833(a) (42 U.S.C. is the following information: drug or biological in the year. 1395l(a)) is amended— ‘‘(I) Any report on drug or biological market ‘‘(C) The amount specified in this paragraph (A) in paragraph (1)(D)(i), by striking ‘‘(or 100 prices by the Inspector General of the Depart- for a drug or biological for the year described in percent, in the case of such tests for which payment of Health and Human Services or the subparagraph (B) is equal to an amount deter- ment is made on an assignment-related basis)’’; Comptroller General of the United States that is mined by the Secretary based on the information and made available after December 31, 1999. provided under subparagraph (A) and other in- (B) in paragraph (2)(D)(i), by striking ‘‘(or 100 ‘‘(II) A review of drug or biological market formation that the Secretary determines appro- percent, in the case of such tests for which pay- prices by the Secretary, which may include in- priate. ment is made on an assignment-related basis or formation on such market prices from insurers, ‘‘(D) The amount specified in this paragraph to a provider having an agreement under section private health plans, manufacturers, whole- for a drug or biological for the year after the 1866)’’. salers, distributors, physician supply houses, year described in subparagraph (B) is equal to (2) CONFORMING AMENDMENT.—The third sen- specialty pharmacies, group purchasing ar- an amount determined by the Secretary based tence of section 1866(a)(2)(A) of the Social Secu- rangements, physicians, suppliers, or any other on the information provided under subpara- rity Act (42 U.S.C. 1395cc(a)(2)(A) is amended by source the Secretary determines appropriate. graph (B) and other information that the Sec- striking ‘‘and with respect to clinical diagnostic ‘‘(III) Data and information submitted by the retary determines appropriate. laboratory tests for which payment is made manufacturer of the drug or biological or by an- ‘‘(E) The amount specified in this paragraph under part B’’. other entity. for a drug or biological for the year beginning (b) DEDUCTIBLE.—Section 1833(b) of the Social ‘‘(IV) Other data and information as deter- after the year described in subparagraph (D) Security Act (42 U.S.C. 1395l(b)) is amended— mined appropriate by the Secretary. and each subsequent year is equal to the lesser (1) by striking paragraph (3); and ‘‘(iii) If the Secretary makes a determination of— (2) by redesignating paragraphs (4), (5), and under clause (i) with respect to the widely avail- ‘‘(i) the average wholesale price for the drug (6) as paragraphs (3), (4), and (5), respectively. able market price for a drug or biological for a or biological; or (c) EFFECTIVE DATE.—The amendments made year, the following provisions shall apply: ‘‘(ii) the amount determined— by this section shall apply to tests furnished on ‘‘(I) Subject to clause (iv), the amount deter- ‘‘(I) by the Secretary under paragraph or after January 1, 2004. mined under this subparagraph shall be sub- (4)(C)(i) with respect to the widely available SEC. 432. BASING MEDICARE PAYMENTS FOR COV- stituted for the amount determined under sub- market price for the drug or biological for the ERED OUTPATIENT DRUGS ON MAR- paragraph (B) for purposes of applying sub- year, if such paragraph was applied by sub- KET PRICES. paragraph (A)(ii)(I) for the year and all subse- stituting ‘the payment determined under para- (a) MEDICARE MARKET BASED PAYMENT quent years. graph (5)(E)(ii)(II) for the year’ for ‘established AMOUNT.—Section 1842(o) (42 U.S.C. 1395u(o)) is ‘‘(II) The Secretary may make subsequent de- under subparagraph (B) for the year’; and amended— terminations under clause (i) with respect to the ‘‘(II) if no determination described in sub- (1) in paragraph (1), by striking ‘‘equal to 95 widely available market price for the drug or bi- clause (I) is made for the drug or biological for percent of the average wholesale price.’’ and in- ological. the year, under this subparagraph with respect serting ‘‘equal to— ‘‘(III) If the Secretary does not make a subse- to the drug or biological for the previous year ‘‘(A) in the case of a drug or biological fur- quent determination under clause (i) with re- increased by the percentage increase described nished prior to January 1, 2004, 95 percent of the spect to the widely available market price for in paragraph (4)(B)(i)(II) for the year in- average wholesale price; and the drug or biological for a year, the amount de- volved.’’. ‘‘(B) in the case of a drug or biological fur- termined under this subparagraph shall be an (b) ADJUSTMENTS TO PAYMENT AMOUNTS FOR nished on or after January 1, 2004, the payment amount equal to the amount determined under ADMINISTRATION OF DRUGS AND BIOLOGICALS.— amount specified in— this subparagraph for the previous year in- (1) ADJUSTMENT IN PHYSICIAN PRACTICE EX- ‘‘(i) in the case of such a drug or biological creased by the percentage increase described in PENSE RELATIVE VALUE UNITS.—Section that is first available for payment under this subparagraph (B)(i)(II) for the year involved. 1848(c)(2) (42 U.S.C. 1395w–4(c)(2)) is amended— part on or before April 1, 2003, paragraph (4); ‘‘(iv) If the first determination made under (A) in subparagraph (B)— and clause (i) with respect to the widely available (i) in clause (ii)(II), by striking ‘‘The adjust- ‘‘(ii) in the case of such a drug or biological market price for a drug or biological would re- ments’’ and inserting ‘‘Subject to clause (iv), the that is first available for payment under this sult in a payment amount in a year that is more adjustments’’; and part after such date, paragraph (5).’’; and than 15 percent less than the amount deter- (ii) by adding at the end the following new (2) by adding at the end the following new mined under subparagraph (B) for the drug or clause: paragraphs: biological for the previous year (or, for 2004, the ‘‘(iv) EXEMPTION FROM BUDGET NEUTRALITY IN ‘‘(4)(A) Subject to subparagraph (C), the pay- payment amount determined under paragraph 2004.—Any additional expenditures under this ment amount specified in this paragraph for a (1)(A), determined as of April 1, 2003), the Sec- part that are attributable to subparagraph (H) year for a drug or biological is an amount equal retary shall provide for a transition to the shall not be taken into account in applying to the lesser of— amount determined under clause (i) so that the clause (ii)(II) for 2004.’’; and

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00084 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8953 (B) by adding at the end the following new that would have been made for such factors duction in payment amount described in sub- subparagraph: under this part (as estimated by the Secretary) paragraph had not been made. ‘‘(H) ADJUSTMENTS IN PRACTICE EXPENSE REL- if the amendments made by section 433 of the ‘‘(F) There shall be no administrative or judi- ATIVE VALUE UNITS FOR DRUG ADMINISTRATION Prescription Drug and Medicare Improvement cial review under section 1869, section 1878, or SERVICES FOR 2004.—In establishing the physi- Act of 2003 had not been enacted. otherwise, of determinations of payment cian fee schedule under subsection (b) with re- ‘‘(C) The separate payment amount under this amounts, methods, or adjustments under this spect to payments for services furnished in 2004, subparagraph for blood clotting factors fur- paragraph.’’. the Secretary shall, in determining practice ex- nished in 2005 or a subsequent year shall be (6) HOME INFUSION DRUGS.—Section 1842(o) (42 pense relative value units under this subsection, equal to the separate payment amount deter- U.S.C. 1395u(o)), as amended by subsection utilize a survey submitted to the Secretary as of mined under this paragraph for the previous (a)(2) and paragraph (4), is amended by adding January 1, 2003, by a physician specialty orga- year increased by the percentage increase de- at the end the following new paragraph: nization pursuant to section 212 of the Medi- scribed in paragraph (4)(B)(i)(II) for the year ‘‘(7)(A) Subject to subparagraph (B), in the care, Medicaid, and SCHIP Balanced Budget involved.’’. case of infusion drugs and biologicals furnished Refinement Act of 1999 if the survey— (5) INCREASE IN COMPOSITE RATE FOR END through an item of durable medical equipment ‘‘(i) covers practice expenses for oncology ad- STAGE RENAL DISEASE FACILITIES.—Section covered under section 1861(n) on or after Janu- ministration services; and 1881(b) (42 U.S.C. 1395rr(b) is amended— ary 1, 2004, the Secretary may make separate ‘‘(ii) meets criteria established by the Sec- (A) in paragraph (7), by adding at the end the payments for furnishing such drugs and retary for acceptance of such surveys.’’. following new sentence: ‘‘In the case of dialysis biologicals in an amount determined by the Sec- (2) PAYMENT FOR MULTIPLE CHEMOTHERAPY services furnished in 2004 or a subsequent year, retary if the Secretary determines such separate AGENTS FURNISHED ON A SINGLE DAY THROUGH the composite rate for such services shall be de- payment to be appropriate. ‘‘(B) In determining the amount of any sepa- THE PUSH TECHNIQUE.— termined under paragraph (12).’’; and (A) REVIEW OF POLICY.—The Secretary shall (B) by adding at the end the following new rate payment under subparagraph (A) for a review the policy, as in effect on the date of en- paragraph: year, the Secretary shall ensure that the total actment of this Act, with respect to payment ‘‘(12)(A) In the case of dialysis services fur- amount of payments under this part for such in- under section 1848 of the Social Security Act (42 nished during 2004, the composite rate for such fusion drugs and biologicals for the year and U.S.C. 1395w–4) for the administration of more services shall be the composite rate that would such separate payments for the year does not than 1 anticancer chemotherapeutic agent to an otherwise apply under paragraph (7) for the exceed the total amount of payments that would individual on a single day through the push year increased by an amount to ensure (as esti- have been made under this part for the year for technique. mated by the Secretary) that— such infusion drugs and biologicals if section (B) MODIFICATION OF POLICY.—After con- ‘‘(i) the sum of the total amount of— 433 of the Prescription Drug and Medicare Im- ducting the review under subparagraph (A), the ‘‘(I) the composite rate payments for such provement Act of 2003 had not been enacted.’’. Secretary shall modify such payment policy if services for the year, as increased under this (7) INHALATION DRUGS.—Section 1842(o) (42 the Secretary determines such modification to be paragraph; and U.S.C. 1395u(o)), as amended by subsection appropriate. ‘‘(II) the payments for drugs and biologicals (a)(2) and paragraphs (4) and (6), is amended by (C) EXEMPTION FROM BUDGET NEUTRALITY (other than erythropoetin) furnished in connec- adding at the end the following new paragraph: ‘‘(8)(A) Subject to subparagraph (B), in the UNDER PHYSICIAN FEE SCHEDULE.—If the Sec- tion with the furnishing of renal dialysis serv- case of inhalation drugs and biologicals fur- retary modifies such payment policy pursuant to ices and separately billed by renal dialysis fa- nished through durable medical equipment cov- subparagraph (B), any increased expenditures cilities under paragraphs (4) and (5) of section ered under section 1861(n) on or after January 1, under title XVIII of the Social Security Act re- 1842(o) for the year; is equal to sulting from such modification shall be treated ‘‘(ii) the sum of the total amount of the com- 2004, the Secretary may increase payments for as additional expenditures attributable to sub- posite rate payments under paragraph (7) for such equipment under section 1834(a) and may paragraph (H) of section 1848(c)(2) of the Social the year and the payments for the separately make separate payments for furnishing such Security Act (42 U.S.C. 1395w–4(c)(2)), as added billed drugs and biologicals described in clause drugs and biologicals if the Secretary determines by paragraph (1)(B), for purposes of applying (i)(II) that would have been made if the amend- such increased or separate payments are nec- the exemption to budget neutrality under sub- ments made by section 433 of the Prescription essary to appropriately furnish such equipment paragraph (B)(iv) of such section, as added by Drug and Medicare Improvement Act of 2003 and drugs and biologicals to beneficiaries. ‘‘(B) The total amount of any increased pay- paragraph (1)(A). had not been enacted. ments and separate payments under subpara- (3) TREATMENT OF OTHER SERVICES CURRENTLY ‘‘(B) Subject to subparagraph (E), in the case graph (A) for a year may not exceed an amount IN THE NONPHYSICIAN WORK POOL.—The Sec- of dialysis services furnished in 2005, the com- equal to 10 percent of the amount (as estimated retary shall make adjustments to the nonphysi- posite rate for such services shall be an amount by the Secretary) by which— cian work pool methodology (as such term is equal to the composite rate established under ‘‘(i) the total amount of payments that would used in the final rule promulgated by the Sec- subparagraph (A), increased by 0.05 percent and have been made for such drugs and biologicals retary in the Federal Register on December 31, further increased by 1.6 percent. for the year if section 433 of the Prescription 2002 (67 Fed. Reg. 251)), for the determination of ‘‘(C) Subject to subparagraph (E), in the case Drug and Medicare Improvement Act of 2003 practice expense relative value units under the of dialysis services furnished in 2006, the com- had not been enacted; exceeds physician fee schedule under section posite rate for such services shall be an amount ‘‘(ii) the total amount of payments for such 1848(c)(2)(C)(ii) of the Social Security Act (42 equal to the composite rate established under drugs and biologicals under paragraphs (4) and U.S.C. 1395w–4(c)(2)(C)(ii)), so that the practice subparagraph (B), increased by 0.05 percent and (5).’’. expense relative value units for services deter- further increased by 1.6 percent. (8) PHARMACY DISPENSING FEE FOR CERTAIN mined under such methodology are not dis- ‘‘(D) Subject to subparagraph (E), in the case DRUGS AND BIOLOGICALS.—Section 1842(o)(2) (42 proportionately reduced relative to the practice of dialysis services furnished in 2007 and all U.S.C. 1395u(o)(2)) is amended to read as fol- expense relative value units of services not de- subsequent years, the composite rate for such lows: termined under such methodology, as a result of services shall be an amount equal to the com- ‘‘(2) If payment for a drug or biological is the amendments to such Act made by paragraph posite rate established under this paragraph for made to a licensed pharmacy approved to dis- (1). the previous year, increased by 0.05 percent. pense drugs or biologicals under this part, the (4) ADMINISTRATION OF BLOOD CLOTTING FAC- ‘‘(E) If the Secretary implements a reduction Secretary— TORS.—Section 1842(o) (42 U.S.C. 1395u(o)), as in the payment amount under paragraph (4)(C) ‘‘(A) in the case of an immunosuppressive amended by subsection (a)(2), is amended by or (5) for a drug or biological described in sub- drug described in subparagraph (J) of section adding at the end the following new paragraph: paragraph (A)(i)(II) for a year after 2004, the 1861(s)(2) and an oral drug described in sub- ‘‘(6)(A) Subject to subparagraph (B), in the Secretary shall, as estimated by the Secretary— paragraph (Q) or (T) of such section, shall pay case of clotting factors furnished on or after ‘‘(i) increase the composite rate for dialysis a dispensing fee determined appropriate by the January 1, 2004, the Secretary shall, after re- services furnished in such year in the same Secretary (less the applicable deductible and co- viewing the January 2003 report to Congress by manner that the composite rate for such services insurance amounts) to the pharmacy; and the Comptroller General of the United States en- for 2004 was increased under subparagraph (A); ‘‘(B) in the case of a drug or biological not de- titled ‘Payment for Blood Clotting Factor Ex- and scribed in subparagraph (A), may pay a dis- ceeds Providers Acquisition Cost’ (GAO–03–184), ‘‘(ii) increase the percentage increase under pensing fee determined appropriate by the Sec- provide for a separate payment for the adminis- subparagraph (C) or (D) (as applicable) for retary (less the applicable deductible and coin- tration of such blood clotting factors in an years after the year described in clause (i) to en- surance amounts) to the pharmacy.’’. amount that the Secretary determines to be ap- sure that such increased percentage would re- (9) PAYMENT FOR CHEMOTHERAPY DRUGS PUR- propriate. sult in expenditures equal to the sum of the CHASED BUT NOT ADMINISTERED BY PHYSICIANS.— ‘‘(B) In determining the separate payment total composite rate payments for such services Section 1842(o) (42 U.S.C. 1395u(o)), as amended amount under subparagraph (A) for blood clot- for such years and the total payments for drugs by subsection (a)(2) and paragraphs (4), (6) and ting factors furnished in 2004, the Secretary and biologicals described in subparagraph (7), is amended by adding at the end the fol- shall ensure that the total amount of payments (A)(i)(II) is equal to the sum of the total amount lowing new paragraph: under this part (as estimated by the Secretary) of the composite rate payments under this para- ‘‘(9)(A) Subject to subparagraph (B), the Sec- for such factors under paragraphs (4) and (5) graph for such years and the payments for the retary may increase (in an amount determined and such separate payments for such factors drugs and biologicals described in subparagraph appropriate) the amount of payments to physi- does not exceed the total amount of payments (A)(i)(II) that would have been made if the re- cians for anticancer chemotherapeutic drugs or

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biologicals that would otherwise be made under shall focus on those drugs and biologicals that ‘‘(ii) UPDATE FOR 2006.—For 2006, the amounts this part in order to compensate such physicians represent the largest portions of expenditures determined under clauses (i) and (ii) shall be the for anticancer chemotherapeutic drugs or under the medicare program for drugs and amount established for 2005 increased by the biologicals that are purchased by physicians biologicals. percentage increase in the Consumer Price Index with a reasonable intent to administer to an in- (C) REPORT.—The Inspector General shall pre- for all urban consumers (U.S. urban average) dividual enrolled under this part but which can- pare a report on any study conducted under for the 12-month period ending with June of the not be administered to such individual despite subparagraph (A). previous year. the reasonable efforts of the physician. SEC. 433. INDEXING PART B DEDUCTIBLE TO IN- ‘‘(B) AFTER 2007.— ‘‘(B) The total amount of increased payments FLATION. ‘‘(i) ONGOING STUDY AND REPORTS ON ADE- made under subparagraph (A) in a year (as esti- The first sentence of section 1833(b) (42 U.S.C. QUATE REIMBURSEMENTS.— mated by the Secretary) may not exceed an 1395l(b)) is amended by striking ‘‘and $100 for ‘‘(I) STUDY.—The Secretary shall contract amount equal to 1 percent of the total amount 1991 and subsequent years’’ and inserting the with an eligible organization (as defined in sub- of payments made under paragraphs (4) and (5) following: ‘‘, $100 for 1991 through 2005, $125 for clause (IV)) to conduct a study to determine the for such anticancer chemotherapeutic drugs or 2006, and for 2007 and thereafter, the amount in hospital acquisition, pharmacy services, and biologicals furnished by physicians in such year effect for the previous year, increase by the per- handling costs for each individual drug or bio- (as estimated by the Secretary).’’. centage increase in the consumer price index for logical described in subparagraph (D). (c) LINKAGE OF REVISED DRUG PAYMENTS AND all urban consumers (U.S. city average) for the ‘‘(II) STUDY REQUIREMENTS.—The study con- INCREASES FOR DRUG ADMINISTRATION.—The 12-month period ending with June of the pre- ducted under subclause (I) shall— Secretary shall not implement the revisions in vious year, rounded to the nearest dollar’’. ‘‘(aa) be accurate to within 3 percent of true payment amounts for a category of drug or bio- SEC. 434. REVISIONS TO REASSIGNMENT PROVI- mean hospital acquisition and handling costs logical as a result of the amendments made by SIONS. for each drug and biological at the 95 percent subsection (a) unless the Secretary concurrently (a) IN GENERAL.—Section 1842(b)(6)(A)(ii) (42 confidence level; implements the adjustments to payment amounts U.S.C. 1395u(b)(6)(A)(ii)) is amended to read as ‘‘(bb) begin not later than January 1, 2005; for administration of such category of drug or follows: ‘‘(ii) where the service was provided and biological for which the Secretary is required to under a contractual arrangement between such ‘‘(cc) be updated annually for changes in hos- make an adjustment, as specified in the amend- physician or other person and an entity (as de- pital costs and the addition of newly marketed ments made by, and provisions of, subsection fined by the Secretary), to the entity if under products. (b). such arrangement such entity submits the bill ‘‘(III) REPORTS.—Not later than January 1 of (d) PROHIBITION OF ADMINISTRATIVE AND JU- for such service and such arrangement meets each year (beginning with 2006), the Secretary DICIAL REVIEW.— such program integrity and other safeguards as shall submit to Congress a report on the study (1) DRUGS.—Section 1842(o) (42 U.S.C. the Secretary may determine to be appro- conducted under clause (i) together with rec- 1395u(o)), as amended by subsection (a)(2) and priate,’’. ommendations for such legislative or administra- paragraphs (4), (6), (7), and (9) of subsection (b) CONFORMING AMENDMENT.—The second tive action as the Secretary determines to be ap- (b), is amended by adding at the end the fol- sentence of section 1842(b)(6) (42 U.S.C. propriate. lowing new paragraph: 1395u(b)(6)) is amended by striking ‘‘except to ‘‘(IV) ELIGIBLE ORGANIZATION DEFINED.—In ‘‘(10) There shall be no administrative or judi- an employer or facility as described in clause this clause, the term ‘eligible organization’ cial review under section 1869, section 1878, or (A)’’ and inserting ‘‘except to an employer or means a private, nonprofit organization within otherwise, of determinations of payment entity as described in subparagraph (A)’’. the meaning of section 501(c) of the Internal amounts, methods, or adjustments under para- (c) EFFECTIVE DATE.—The amendments made Revenue Code. graph (2) or paragraphs (4) through (9).’’. by this section shall apply to payments made on ‘‘(ii) ESTABLISHMENT OF PAYMENT METHOD- (2) PHYSICIAN FEE SCHEDULE.—Section or after the date of enactment of this Act. OLOGY.—Notwithstanding paragraph (6), the 1848(i)(1) (42 U.S.C. 1395w–4(i)(1)) is amended— SEC. 435. EXTENSION OF TREATMENT OF CER- Secretary, in establishing a payment method- (A) in subparagraph (D), by striking ‘‘and’’ at TAIN PHYSICIAN PATHOLOGY SERV- ology on or after the date of enactment of the the end; ICES UNDER MEDICARE. Prescription Drug and Medicare Improvement (B) in subparagraph (E), by striking the pe- Section 542(c) of BIPA (114 Stat. 2763A–551) is Act of 2003, shall take into consideration the riod at the end and inserting ‘‘, and’’; and amended by inserting ‘‘, and for services fur- findings of the study conducted under clause (C) by adding at the end the following new nished during 2005’’ before the period at the (i)(I) in determining payment amounts for each subparagraph: end. drug and biological provided as part of a cov- ‘‘(F) adjustments in practice expense relative SEC. 436. ADEQUATE REIMBURSEMENT FOR OUT- ered OPD service furnished on or after January value units under subsection (c)(2)(H).’’. PATIENT PHARMACY THERAPY 1, 2007. (3) MULTIPLE CHEMOTHERAPY AGENTS AND UNDER THE HOSPITAL OUTPATIENT ‘‘(C) APPLICABLE PERCENTAGE DEFINED.—In OTHER SERVICES CURRENTLY ON THE NON-PHYSI- PPS. this paragraph, the term ‘applicable percentage’ CIAN WORK POOL.—There shall be no administra- (a) SPECIAL RULES FOR DRUGS AND means— tive or judicial review under section 1869, sec- BIOLOGICALS.—Section 1833(t) (42 U.S.C. 1395(t)) tion 1878, or otherwise, of determinations of is amended— ‘‘(i) with respect to a biological product (ap- payment amounts, methods, or adjustments (1) by redesignating paragraph (13) as para- proved under a biologics license application under paragraphs (2) and (3) of subsection (b). graph (14); and under section 351 of the Public Health Service Act), a single source drug (as defined in section (e) STUDIES AND REPORTS.— (2) by inserting after paragraph (12) the fol- (1) GAO STUDY AND REPORT ON BENEFICIARY lowing new paragraph: 1927(k)(7)(A)(iv)), or an orphan product des- ACCESS TO DRUGS AND BIOLOGICALS.— ‘‘(13) SPECIAL RULES FOR CERTAIN DRUGS AND ignated under section 526 of the Food, Drug, (A) STUDY.—The Comptroller General of the BIOLOGICALS.— and Cosmetic Act to which the prospective pay- United States shall conduct a study that exam- ‘‘(A) BEFORE 2007.— ment system established under this subsection ines the impact the provisions of, and the ‘‘(i) IN GENERAL.—Notwithstanding paragraph did not apply under the final rule for 2003 pay- amendments made by, this section have on ac- (6), but subject to clause (ii), with respect to a ments under such system, 94 percent; cess by medicare beneficiaries to drugs and separately payable drug or biological described ‘‘(ii) with respect to an innovator multiple biologicals covered under the medicare program. in subparagraph (D) furnished on or after Janu- source drug (as defined in section (B) REPORT.—Not later than January 1, 2006, ary 1, 2005, and before January 1, 2007, hos- 1927(k)(7)(A)(ii)), 91 percent; and the Comptroller General shall submit a report to pitals shall be reimbursed as follows: ‘‘(iii) with respect to a noninnovator multiple Congress on the study conducted under sub- ‘‘(I) DRUGS AND BIOLOGICALS FURNISHED AS source drug (as defined in as defined in section paragraph (A) together with such recommenda- PART OF A CURRENT OPD SERVICE.—The amount 1927(k)(7)(A)(iii)), 71 percent. tions as the Comptroller General determines to of payment for a drug or biological described in ‘‘(D) DRUGS AND BIOLOGICALS DESCRIBED.—A be appropriate. subparagraph (D) provided as a part of a service drug or biological described in this paragraph is (2) STUDY AND REPORT BY THE HHS INSPECTOR that was a covered OPD service on May 1, 2003, any drug or biological— GENERAL ON MARKET PRICES OF DRUGS AND shall be the applicable percentage (as defined in ‘‘(i) for which the amount of payment was de- BIOLOGICALS.— subparagraph (C)) of the average wholesale termined under paragraph (6) prior to January (A) STUDY.—The Inspector General of the De- price for the drug or biological that would have 1, 2005; and partment of Health and Human Services shall been determined under section 1842(o) on such ‘‘(ii)(I) which is assigned to a drug specific conduct 1 or more studies that— date. ambulatory payment classification on or after (i) examine the market prices that drugs and ‘‘(II) DRUGS AND BIOLOGICALS FURNISHED AS the date of enactment of the Prescription Drug biologicals covered under the medicare program PART OF OTHER OPD SERVICES.—The amount of and Medicare Improvement Act of 2003; or are widely available to physicians and sup- payment for a drug or biological described in ‘‘(II) that would have been reimbursed under pliers; and subparagraph (D) provided as part of any other paragraph (6) but for the application of this (ii) compare such widely available market covered OPD service shall be the applicable per- paragraph.’’. prices to the payment amount for such drugs centage (as defined in subparagraph (C)) of the (b) EXCEPTIONS TO BUDGET NEUTRALITY RE- and biologicals under section 1842(o) of the So- average wholesale price that would have been QUIREMENT.—Section 1833(t)(9)(B) (42 U.S.C. cial Security Act (42 U.S.C. 1395u(o). determined under section 1842(o) on May 1, 2003, 1395l(t)(9)(B)) is amended by adding at the end (B) REQUIREMENT.—In conducting the study if payment for such a drug or biological could the following: ‘‘In determining the budget neu- under subparagraph (A), the Inspector General have been made under this part on that date. trality adjustment required by the preceding

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00086 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8955 sentence for fiscal years 2005 and 2006, the Sec- being violated for any year, the Secretary shall ability of covering chiropractic services under retary shall not take into account any expendi- take appropriate steps to stay within such fund- the medicare program (in addition to the cov- tures that would not have been made but for the ing limitation, including through limiting the erage provided for services consisting of treat- application of paragraph (13).’’. number of clinical trials deemed under sub- ment by means of manual manipulation of the SEC. 437. LIMITATION OF APPLICATION OF FUNC- section (a) and only covering a portion of the spine to correct a subluxation described in sec- TIONAL EQUIVALENCE STANDARD. routine costs described in such subsection. tion 1861(r)(5) of the Social Security Act (42 Section 1833(t)(6) (42 U.S.C. 1395l(t)(6)) is (d) EFFECTIVE DATE.—This section shall apply U.S.C. 1395x(r)(5))). amended by adding at the end the following to clinical trials begun on or after January 1, (2) NO PHYSICIAN APPROVAL REQUIRED.—In es- new subparagraph: 2005. tablishing the demonstration projects, the Sec- ‘‘(F) LIMITATION OF APPLICATION OF FUNC- SEC. 439. WAIVER OF PART B LATE ENROLLMENT retary shall ensure that an eligible beneficiary TIONAL EQUIVALENCE STANDARD.— PENALTY FOR CERTAIN MILITARY who participates in a demonstration project, in- ‘‘(i) IN GENERAL.—The Secretary may not pub- RETIREES; SPECIAL ENROLLMENT cluding an eligible beneficiary who is enrolled lish regulations that apply a functional equiva- PERIOD. for coverage under a Medicare+Choice plan (or, lence standard to a drug or biological under this (a) WAIVER OF PENALTY.— on and after January 1, 2006, under a paragraph. (1) IN GENERAL.—Section 1839(b) (42 U.S.C. MedicareAdvantage plan), is not required to re- ‘‘(ii) APPLICATION.—Paragraph (1) shall apply 1395r(b)) is amended by adding at the end the ceive approval from a physician or other health to the application of a functional equivalence following new sentence: ‘‘No increase in the pre- care provider in order to receive a chiropractic standard to a drug or biological on or after the mium shall be effected for a month in the case service under a demonstration project. date of enactment of the Prescription Drug and of an individual who is 65 years of age or older, (3) CONSULTATION.—In establishing the dem- Medicare Improvement Act of 2003 unless— who enrolls under this part during 2002, 2003, onstration projects, the Secretary shall consult ‘‘(I) such application was being made to such 2004, or 2005 and who demonstrates to the Sec- with chiropractors, organizations representing drug or biological prior to such date of enact- retary before December 31, 2005, that the indi- chiropractors, eligible beneficiaries, and organi- ment; and vidual is a covered beneficiary (as defined in zations representing eligible beneficiaries. ‘‘(II) the Secretary applies such standard to section 1072(5) of title 10, United States Code). (4) PARTICIPATION.—Any eligible beneficiary such drug or biological only for the purpose of The Secretary shall consult with the Secretary may participate in the demonstration projects determining eligibility of such drug or biological of Defense in identifying individuals described on a voluntary basis. for additional payments under this paragraph in the previous sentence.’’. (c) CONDUCT OF DEMONSTRATION PROJECTS.— and not for the purpose of any other payments (2) EFFECTIVE DATE.—The amendment made (1) DEMONSTRATION SITES.— under this title. by paragraph (1) shall apply to premiums for (A) SELECTION OF DEMONSTRATION SITES.—The ‘‘(iii) RULE OF CONSTRUCTION.—Nothing in months beginning with January 2005. The Sec- Secretary shall conduct demonstration projects this subparagraph shall be construed to effect retary shall establish a method for providing re- at 6 demonstration sites. the Secretary’s authority to deem a particular bates of premium penalties paid for months on (B) GEOGRAPHIC DIVERSITY.—Of the sites de- drug to be identical to another drug if the 2 or after January 2005 for which a penalty does scribed in subparagraph (A)— products are pharmaceutically equivalent and not apply under such amendment but for which (i) 3 shall be in rural areas; and bioequvalent, as determined by the Commis- a penalty was previously collected. (ii) 3 shall be in urban areas. sioner of Food and Drugs. (b) MEDICARE PART B SPECIAL ENROLLMENT (C) SITES LOCATED IN HPSAS.—At least 1 site SEC. 438. MEDICARE COVERAGE OF ROUTINE PERIOD.— described in clause (i) of subparagraph (B) and COSTS ASSOCIATED WITH CERTAIN (1) IN GENERAL.—In the case of any individual at least 1 site described in clause (ii) of such CLINICAL TRIALS. who, as of the date of enactment of this Act, is subparagraph shall be located in an area that is (a) IN GENERAL.—With respect to the coverage 65 years of age or older, is eligible to enroll but designated under section 332(a)(1)(A) of the of routine costs of care for beneficiaries partici- is not enrolled under part B of title XVIII of the Public Health Service Act (42 U.S.C. pating in a qualifying clinical trial, as set forth Social Security Act, and is a covered beneficiary 254e(a)(1)(A)) as a health professional shortage on the date of the enactment of this Act in Na- (as defined in section 1072(5) of title 10, United area. tional Coverage Determination 30–1 of the Medi- States Code), the Secretary shall provide for a (2) IMPLEMENTATION; DURATION.— care Coverage Issues Manual, the Secretary special enrollment period during which the indi- (A) IMPLEMENTATION.—The Secretary shall shall deem clinical trials conducted in accord- vidual may enroll under such part. Such period not implement the demonstration projects before ance with an investigational device exemption shall begin 1 year after the date of the enact- October 1, 2004. approved under section 520(g) of the Federal ment of this Act and shall end on December 31, (B) DURATION.—The Secretary shall complete Food, Drug, and Cosmetic Act (42 U.S.C. 360j(g)) 2005. the demonstration projects by the date that is 3 to be automatically qualified for such coverage. (2) COVERAGE PERIOD.—In the case of an indi- years after the date on which the first dem- (b) RULE OF CONSTRUCTION.—Nothing in this vidual who enrolls during the special enrollment onstration project is implemented. section shall be construed as authorizing or re- period provided under paragraph (1), the cov- (d) EVALUATION AND REPORT.— quiring the Secretary to modify the regulations erage period under part B of title XVIII of the (1) EVALUATION.—The Secretary shall conduct set forth on the date of the enactment of this Social Security Act shall begin on the first day an evaluation of the demonstration projects— Act at subpart B of part 405 of title 42, Code of of the month following the month in which the (A) to determine whether eligible beneficiaries Federal Regulations, or subpart A of part 411 of individual enrolls. who use chiropractic services use a lesser overall such title, relating to coverage of, and payment SEC. 440. DEMONSTRATION OF COVERAGE OF amount of items and services for which payment for, a medical device that is the subject of an in- CHIROPRACTIC SERVICES UNDER is made under the medicare program than eligi- vestigational device exemption by the Food and MEDICARE. ble beneficiaries who do not use such services; Drug Administration (except as may be nec- (a) DEFINITIONS.—In this section: (B) to determine the cost of providing payment essary to implement subsection (a)). (1) CHIROPRACTIC SERVICES.—The term ‘‘chiro- for chiropractic services under the medicare pro- (c) LIMITATION OF EXPENDITURES IN YEARS practic services’’ has the meaning given that gram; PRIOR TO 2014.— term by the Secretary for purposes of the dem- (C) to determine the satisfaction of eligible (1) IN GENERAL.—The Secretary shall ensure onstration projects, but shall include, at a min- beneficiaries participating in the demonstration that the total amount of expenditures under imum— projects and the quality of care received by such title XVIII of the Social Security Act (including (A) care for neuromusculoskeletal conditions beneficiaries; and amounts expended by reason of this section) in typical among eligible beneficiaries; and (D) to evaluate such other matters as the Sec- a year prior to 2014 does not exceed the sum of— (B) diagnostic and other services that a chiro- retary determines is appropriate. (A) the total amount of expenditures under practor is legally authorized to perform by the (2) REPORT.—Not later than the date that is 1 such title XVIII that would have made if this State or jurisdiction in which such treatment is year after the date on which the demonstration section had not been enacted; and provided. projects conclude, the Secretary shall submit to (B) the applicable amount. (2) DEMONSTRATION PROJECT.—The term Congress a report on the evaluation conducted (2) APPLICABLE AMOUNT.—For purposes of ‘‘demonstration project’’ means a demonstration under paragraph (1) together with such rec- paragraph (1), the term ‘‘applicable amount’’ project established by the Secretary under sub- ommendations for legislation or administrative means— section (b)(1). action as the Secretary determines is appro- (A) for 2005, $32,000,000; (3) ELIGIBLE BENEFICIARY.—The term ‘‘eligible priate. (B) for 2006, $34,000,000; beneficiary’’ means an individual who is en- (e) WAIVER OF MEDICARE REQUIREMENTS.— (C) for 2007, $36,000,000; rolled under part B of the medicare program. The Secretary shall waive compliance with such (D) for 2008, $38,000,000; (4) MEDICARE PROGRAM.—The term ‘‘medicare requirements of the medicare program to the ex- (E) for 2009, $40,000,000; program’’ means the health benefits program tent and for the period the Secretary finds nec- (F) for 2010, $42,000,000; under title XVIII of the Social Security Act (42 essary to conduct the demonstration projects. (G) for 2011, $44,000,000; U.S.C. 1395 et seq.). (f) FUNDING.— (H) for 2012, $48,000,000; and (b) DEMONSTRATION OF COVERAGE OF CHIRO- (1) DEMONSTRATION PROJECTS.— (I) for 2013, $50,000,000. PRACTIC SERVICES UNDER MEDICARE.— (A) IN GENERAL.—Subject to subparagraph (B) (3) STEPS TO ENSURE FUNDING LIMITATION NOT (1) ESTABLISHMENT.—The Secretary shall es- and paragraph (2), the Secretary shall provide VIOLATED.—If the Secretary determines that the tablish demonstration projects in accordance for the transfer from the Federal Supplementary application of this section will result in the with the provisions of this section for the pur- Insurance Trust Fund under section 1841 of the funding limitation described in paragraph (1) pose of evaluating the feasibility and advis- Social Security Act (42 U.S.C. 1395t) of such

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(B) LIMITATION.—In conducting the dem- ‘‘(1) IN GENERAL.—Except as otherwise pro- ‘‘(h) PARTICIPATION AND SUPPORT BY FEDERAL onstration projects under this section, the Sec- vided in this section, the Secretary may admin- AGENCIES.—In carrying out the demonstration retary shall ensure that the aggregate payments ister the demonstration program established program under this section, the Secretary may made by the Secretary under the medicare pro- under this section in a manner that is similar to direct— gram do not exceed the amount which the Sec- the manner in which the demonstration program ‘‘(1) the Director of the National Institutes of retary would have paid under the medicare pro- established under section 1866A is administered Health to expand the efforts of the Institutes to gram if the demonstration projects under this in accordance with section 1866B. evaluate current medical technologies and im- section were not implemented. ‘‘(2) ALTERNATIVE PAYMENT SYSTEMS.—A prove the foundation for evidence-based prac- (2) EVALUATION AND REPORT.—There are au- health care group that receives assistance under tice; thorized to be appropriated such sums as are this section may, with respect to the demonstra- ‘‘(2) the Administrator of the Agency for necessary for the purpose of developing and tion project to be carried out with such assist- Healthcare Research and Quality to, where pos- submitting the report to Congress under sub- ance, include proposals for the use of alter- sible and appropriate, use the program under section (d). native payment systems for items and services this section as a laboratory for the study of SEC. 441. MEDICARE HEALTH CARE QUALITY DEM- provided to beneficiaries by the group that are quality improvement strategies and to evaluate, ONSTRATION PROGRAMS. designed to— monitor, and disseminate information relevant Title XVIII (42 U.S.C. 1395 et seq.) is amended ‘‘(A) encourage the delivery of high quality to such program; and by inserting after section 1866B the following care while accomplishing the objectives de- ‘‘(3) the Administrator of the Centers for new section: scribed in subsection (b); and Medicare & Medicaid Services and the Adminis- ‘‘(B) streamline documentation and reporting trator of the Center for Medicare Choices to ‘‘HEALTH CARE QUALITY DEMONSTRATION requirements otherwise required under this title. support linkages of relevant medicare data to PROGRAM ‘‘(3) BENEFITS.—A health care group that re- registry information from participating health ‘‘SEC. 1866C. (a) DEFINITIONS.—In this section: ceives assistance under this section may, with care groups for the beneficiary populations ‘‘(1) BENEFICIARY.—The term ‘beneficiary’ respect to the demonstration project to be car- served by the participating groups, for analysis means a beneficiary who is enrolled in the origi- ried out with such assistance, include modifica- supporting the purposes of the demonstration nal medicare fee-for-service program under parts tions to the package of benefits available under program, consistent with the applicable provi- A and B or a beneficiary in a staff model or the traditional fee-for-service program under sions of the Health Insurance Portability and dedicated group model health maintenance or- parts A and B or the package of benefits avail- Accountability Act of 1996. ganization under the Medicare+Choice program able through a staff model or a dedicated group ‘‘(i) IMPLEMENTATION.—The Secretary shall (or, on and after January 1, 2006, under the model health maintenance organization under not implement the demonstration program before MedicareAdvantage program) under part C. part C. The criteria employed under the dem- October 1, 2004.’’. ‘‘(2) HEALTH CARE GROUP.— onstration program under this section to evalu- SEC. 442. MEDICARE COMPLEX CLINICAL CARE ‘‘(A) IN GENERAL.—The term ‘health care ate outcomes and determine best practice guide- MANAGEMENT PAYMENT DEM- group’ means— lines and incentives shall not be used as a basis ONSTRATION. ‘‘(i) a group of physicians that is organized at for the denial of medicare benefits under the (a) ESTABLISHMENT.— least in part for the purpose of providing physi- demonstration program to patients against their (1) IN GENERAL.—The Secretary shall establish cian’s services under this title; wishes (or if the patient is incompetent, against a demonstration program to make the medicare ‘‘(ii) an integrated health care delivery system the wishes of the patient’s surrogate) on the program more responsive to needs of eligible that delivers care through coordinated hos- basis of the patient’s age or expected length of beneficiaries by promoting continuity of care, pitals, clinics, home health agencies, ambula- life or of the patient’s present or predicted dis- helping stabilize medical conditions, preventing tory surgery centers, skilled nursing facilities, ability, degree of medical dependency, or quality or minimizing acute exacerbations of chronic rehabilitation facilities and clinics, and em- of life. conditions, and reducing adverse health out- ployed, independent, or contracted physicians; ‘‘(d) ELIGIBILITY CRITERIA.—To be eligible to comes, such as adverse drug interactions related or receive assistance under this section, an entity to polypharmacy. ‘‘(iii) an organization representing regional shall— (2) SITES.—The Secretary shall designate 6 coalitions of groups or systems described in ‘‘(1) be a health care group; sites at which to conduct the demonstration pro- clause (i) or (ii). ‘‘(2) meet quality standards established by the gram under this section, of which at least 3 ‘‘(B) INCLUSION.—As the Secretary determines Secretary, including— shall be in an urban area and at least 1 shall be appropriate, a health care group may include a ‘‘(A) the implementation of continuous quality in a rural area. One of the sites shall be located hospital or any other individual or entity fur- improvement mechanisms that are aimed at inte- in the State of Arkansas. nishing items or services for which payment may grating community-based support services, pri- (3) DURATION.—The Secretary shall conduct be made under this title that is affiliated with mary care, and referral care; the demonstration program under this section the health care group under an arrangement ‘‘(B) the implementation of activities to infor a 3-year period. structured so that such hospital, individual, or crease the delivery of effective care to bene- (4) IMPLEMENTATION.—The Secretary shall not entity participates in a demonstration project ficiaries; implement the demonstration program before under this section. ‘‘(C) encouraging patient participation in October 1, 2004. ‘‘(3) PHYSICIAN.—Except as otherwise provided preference-based decisions; (b) PARTICIPANTS.—Any eligible beneficiary for by the Secretary, the term ‘physician’ means ‘‘(D) the implementation of activities to en- who resides in an area designated by the Sec- any individual who furnishes services that may courage the coordination and integration of retary as a demonstration site under subsection be paid for as physicians’ services under this medical service delivery; and (a)(2) may participate in the demonstration pro- title. ‘‘(E) the implementation of activities to meas- gram under this section if such beneficiary iden- ‘‘(b) DEMONSTRATION PROJECTS.—The Sec- ure and document the financial impact on the tifies a principal care physician who agrees to retary shall establish a 5-year demonstration health care marketplace of altering the incen- manage the complex clinical care of the eligible program under which the Secretary shall ap- tives of health care delivery and changing the beneficiary under the demonstration program. prove demonstration projects that examine allocation of resources; and (c) PRINCIPAL CARE PHYSICIAN RESPONSIBIL- health delivery factors that encourage the deliv- ‘‘(3) meet such other requirements as the Sec- ITIES.—The Secretary shall enter into an agree- ery of improved quality in patient care, includ- retary may establish. ment with each principal care physician who ing— ‘‘(e) WAIVER AUTHORITY.—The Secretary may agrees to manage the complex clinical care of an ‘‘(1) the provision of incentives to improve the waive such requirements of titles XI and XVIII eligible beneficiary under subsection (b) under safety of care provided to beneficiaries; as may be necessary to carry out the purposes of which the principal care physician shall— ‘‘(2) the appropriate use of best practice the demonstration program established under (1) serve as the primary contact of the eligible guidelines by providers and services by bene- this section. beneficiary in accessing items and services for ficiaries; ‘‘(f) BUDGET NEUTRALITY.—With respect to which payment may be made under the medi- ‘‘(3) reduced scientific uncertainty in the de- the 5-year period of the demonstration program care program; livery of care through the examination of vari- under subsection (b), the aggregate expenditures (2) maintain medical information related to ations in the utilization and allocation of serv- under this title for such period shall not exceed care provided by other health care providers ices, and outcomes measurement and research; the aggregate expenditures that would have who provide health care items and services to ‘‘(4) encourage shared decision making be- been expended under this title if the program es- the eligible beneficiary, including clinical re- tween providers and patients; tablished under this section had not been imple- ports, medication and treatments prescribed by ‘‘(5) the provision of incentives for improving mented. other physicians, hospital and hospital out- the quality and safety of care and achieving the ‘‘(g) NOTICE REQUIREMENTS.—In the case of patient services, skilled nursing home care, efficient allocation of resources; an individual that receives health care items or home health care, and medical equipment serv- ‘‘(6) the appropriate use of culturally and eth- services under a demonstration program carried ices; nically sensitive health care delivery; and out under this section, the Secretary shall en- (3) monitor and advocate for the continuity of ‘‘(7) the financial effects on the health care sure that such individual is notified of any care of the eligible beneficiary and the use of marketplace of altering the incentives for care waivers of coverage or payment rules that are evidence-based guidelines;

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(4) promote self-care and family caregiver in- living’’ means meal preparation, shopping, (2) BUDGET NEUTRALITY.—In conducting the volvement where appropriate; housekeeping, laundry, money management, demonstration program under this section, the (5) have appropriate staffing arrangements to telephone use, and transportation use. Secretary shall ensure that the aggregate pay- conduct patient self-management and other care (5) MEDICARE PROGRAM.—The term ‘‘medicare ments made by the Secretary do not exceed the coordination activities as specified by the Sec- program’’ means the health care program under amount which the Secretary would have paid if retary; title XVIII of the Social Security Act (42 U.S.C. the demonstration program under this section (6) refer the eligible beneficiary to community 1395 et seq.). was not implemented. services organizations and coordinate the serv- (6) PRINCIPAL CARE PHYSICIAN.—The term (f) WAIVER AUTHORITY.— ices of such organizations with the care pro- ‘‘principal care physician’’ means the physician (1) IN GENERAL.—The Secretary may waive vided by health care providers; and with primary responsibility for overall coordina- such requirements of titles XI and XVIII of the (7) meet such other complex care management tion of the care of an eligible beneficiary (as Social Security Act (42 U.S.C. 1301 et seq.; 1395 requirements as the Secretary may specify. specified in a written plan of care) who may be et seq.) as may be necessary for the purpose of (d) COMPLEX CLINICAL CARE MANAGEMENT a primary care physician or a specialist. carrying out the demonstration program under FEE.— SEC. 443. MEDICARE FEE-FOR-SERVICE CARE CO- this section. (1) PAYMENT.—Under an agreement entered ORDINATION DEMONSTRATION PRO- (2) WAIVER OF MEDIGAP PREEMPTIONS.—The into under subsection (c), the Secretary shall GRAM. Secretary shall waive any provision of section pay to each principal care physician, on behalf (a) ESTABLISHMENT.— 1882 of the Social Security Act that would pre- of each eligible beneficiary under the care of (1) IN GENERAL.—The Secretary shall establish vent an insurance carrier described in sub- that physician, the complex clinical care man- a demonstration program to contract with quali- section (h)(3)(D) from participating in the dem- agement fee developed by the Secretary under fied care management organizations to provide onstration program under this section. paragraph (2). health risk assessment and care management (g) REPORT.—Not later than 6 months after (2) DEVELOPMENT OF FEE.—The Secretary services to eligible beneficiaries who receive care the completion of the demonstration program shall develop a complex care management fee under the original medicare fee-for-service pro- under this section, the Secretary shall submit to under this paragraph that is paid on a monthly gram under parts A and B of title XVIII of the Congress a report on such program, together basis and which shall be payment in full for all Social Security Act to eligible beneficiaries. with recommendations for such legislation and the functions performed by the principal care (2) SITES.—The Secretary shall designate 6 administrative action as the Secretary deter- physician under the demonstration program, in- sites at which to conduct the demonstration pro- mines to be appropriate. cluding any functions performed by other quali- gram under this section. In selecting sites under (h) DEFINITIONS.—In this section: fied practitioners acting on behalf of the physi- this paragraph, the Secretary shall give pref- (1) CARE MANAGEMENT SERVICES.—The term cian, appropriate staff under the supervision of erence to sites located in rural areas. ‘‘care management services’’ means services that the physician, and any other person under a (3) DURATION.—The Secretary shall conduct are furnished to an eligible beneficiary (as de- contract with the physician, including any per- the demonstration program under this section fined in paragraph (2)) by a care management son who conducts patient self-management and for a 5-year period. organization (as defined in paragraph (3)) in caregiver education under subsection (c)(4). (4) IMPLEMENTATION.—The Secretary shall not accordance with guidelines established by the (e) FUNDING.— implement the demonstration program before Secretary that are consistent with guidelines es- (1) IN GENERAL.—The Secretary shall provide October 1, 2004. tablished by the American Geriatrics Society. for the transfer from the Federal Supplementary (b) PARTICIPANTS.—Any eligible beneficiary (2) ELIGIBLE BENEFICIARY.—The term ‘‘eligible Insurance Trust Fund established under section who resides in an area designated by the Sec- beneficiary’’ means an individual who is— 1841 of the Social Security Act (42 U.S.C. 1395t) retary as a demonstration site under subsection (A) entitled to (or enrolled for) benefits under of such funds as are necessary for the costs of (a)(2) may participate in the demonstration pro- part A and enrolled for benefits under part B of carrying out the demonstration program under gram under this section if such beneficiary iden- the Social Security Act (42 U.S.C. 1395c et seq.; this section. tifies a care management organization who 1395j et seq.); (2) BUDGET NEUTRALITY.—In conducting the agrees to furnish care management services to (B) not enrolled with a Medicare+Choice plan demonstration program under this section, the the eligible beneficiary under the demonstration or a MedicareAdvantage plan under part C; and Secretary shall ensure that the aggregate pay- program. (C) at high-risk (as defined by the Secretary, ments made by the Secretary do not exceed the (c) CONTRACTS WITH CMOS.— but including eligible beneficiaries with multiple amount which the Secretary would have paid if (1) IN GENERAL.—The Secretary shall enter sclerosis or another disabling chronic condition, the demonstration program under this section into a contract with care management organiza- eligible beneficiaries residing in a nursing home was not implemented. tions to provide care management services to eli- or at risk for nursing home placement, or eligi- (f) WAIVER AUTHORITY.—The Secretary may gible beneficiaries residing in the area served by ble beneficiaries eligible for assistance under a waive such requirements of titles XI and XVIII the care management organization. State plan under title XIX). of the Social Security Act (42 U.S.C. 1301 et seq.; (2) CANCELLATION.—The Secretary may cancel (3) CARE MANAGEMENT ORGANIZATION.—The 1395 et seq.) as may be necessary for the purpose a contract entered into under paragraph (1) if term ‘‘care management organization’’ means of carrying out the demonstration program the care management organization does not an organization that meets such qualifications under this section. meet negotiated savings or quality outcomes tar- as the Secretary may specify and includes any (g) REPORT.—Not later than 6 months after gets for the year. of the following: the completion of the demonstration program (3) NUMBER OF CMOS.—The Secretary may (A) A physician group practice, hospital, under this section, the Secretary shall submit to contract with more than 1 care management or- home health agency, or hospice program. Congress a report on such program, together ganization in a geographic area. (B) A disease management organization. with recommendations for such legislation and (d) PAYMENT TO CMOS.— (C) A Medicare+Choice or MedicareAdvantage administrative action as the Secretary deter- (1) PAYMENT.—Under an contract entered into organization. mines to be appropriate. under subsection (c), the Secretary shall pay (D) Insurance carriers offering medicare sup- (h) DEFINITIONS.—In this section: care management organizations a fee for which plemental policies under section 1882 of the So- (1) ACTIVITY OF DAILY LIVING.—The term ‘‘ac- the care management organization is partially cial Security Act (42 U.S.C. 1395ss). tivity of daily living’’ means eating, toiling, at risk based on bids submitted by care manage- (E) Such other entity as the Secretary deter- transferring, bathing, dressing, and continence. ment organizations. mines to be appropriate. (2) CHRONIC CONDITION.—The term ‘‘chronic (2) PORTION OF PAYMENT AT RISK.—The Sec- SEC. 444. GAO STUDY OF GEOGRAPHIC DIF- condition’’ means a biological, physical, or men- retary shall establish a benchmark for quality FERENCES IN PAYMENTS FOR PHYSI- tal condition that is likely to last a year or and cost against which the results of the care CIANS’ SERVICES. more, for which there is no known cure, for management organization are to be measured. (a) STUDY.—The Comptroller General of the which there is a need for ongoing medical care, The Secretary may not pay a care management United States shall conduct a study of dif- and which may affect an individual’s ability to organization the portion of the fee described in ferences in payment amounts under the physi- carry out activities of daily living or instru- paragraph (1) that is at risk unless the Sec- cian fee schedule under section 1848 of the So- mental activities of daily living, or both. retary determines that the care management or- cial Security Act (42 U.S.C. 1395w–4) for physi- (3) ELIGIBLE BENEFICIARY.—The term ‘‘eligible ganization has met the agreed upon savings and cians’ services in different geographic areas. beneficiary’’ means any individual who— outcomes targets for the year. Such study shall include— (A) is enrolled for benefits under part B of the (e) FUNDING.— (1) an assessment of the validity of the geo- medicare program; (1) IN GENERAL.—The Secretary shall provide graphic adjustment factors used for each compo- (B) has at least 4 complex medical conditions for the transfer from the Federal Hospital Insur- nent of the fee schedule; (one of which may be cognitive impairment); ance Trust Fund under section 1817 of the So- (2) an evaluation of the measures used for and cial Security Act (42 U.S.C. 1395i) and the Fed- such adjustment, including the frequency of re- (C) has— eral Supplementary Insurance Trust Fund es- visions; (i) an inability to self-manage their care; or tablished under section 1841 of such Act (42 (3) an evaluation of the methods used to de- (ii) a functional limitation defined as an im- U.S.C. 1395t), in such proportion as the Sec- termine professional liability insurance costs pairment in 1 or more activity of daily living or retary determines to be appropriate, of such used in computing the malpractice component, instrumental activity of daily living. funds as are necessary for the costs of carrying including a review of increases in professional (4) INSTRUMENTAL ACTIVITY OF DAILY LIV- out the demonstration program under this sec- liability insurance premiums and variation in ING.—The term ‘‘instrumental activity of daily tion. such increases by State and physician specialty

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00089 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8958 CONGRESSIONAL RECORD — SENATE July 7, 2003 and methods used to update the geographic cost ‘‘(iv) by any of the following individuals: ‘‘(ii) has successfully completed 350 hours of of practice index and relative weights for the ‘‘(I) A qualified physician. clinical practicum under the supervision of a malpractice component; ‘‘(II) A qualified occupational therapist. physician, and has furnished not less than 9 (4) an evaluation of whether there is a sound ‘‘(III) A vision rehabilitation professional (as months of supervised full-time low vision ther- economic basis for the implementation of the ad- defined in paragraph (2)) while under the gen- apy services; justment under subparagraphs (E) and (F) of eral supervision (as defined in subparagraph ‘‘(C) has successfully completed the national section 1848(e)(1) of the Social Security Act (42 (D)) of a qualified physician. examination in low vision therapy administered U.S.C. 1395w–4(e)(1)), as added by section 421, ‘‘(B) In the case of vision rehabilitation serv- by the Academy for Certification of Vision Re- in those areas in which the adjustment applies; ices furnished by a vision rehabilitation profes- habilitation and Education Professionals; and (5) an evaluation of the effect of such adjust- sional, the plan of care may only be established ‘‘(D) meets such other criteria as the Secretary ment on physician location and retention in and reviewed by a qualified physician. establishes. areas affected by such adjustment, taking into ‘‘(C) The term ‘qualified physician’ means— ‘‘(6) The term ‘vision impairment’ means vi- account— ‘‘(i) a physician (as defined in subsection sion loss that constitutes a significant limitation (A) differences in recruitment costs and reten- (r)(1)) who is an ophthalmologist; or of visual capability resulting from disease, trau- tion rates for physicians, including specialists, ‘‘(ii) a physician (as defined in subsection ma, or a congenital or degenerative condition between large urban areas and other areas; and (r)(4) (relating to a doctor of optometry)). that cannot be corrected by conventional means, (B) the mobility of physicians, including spe- ‘‘(D) The term ‘general supervision’ means, including refractive correction, medication, or cialists, over the last decade; with respect to a vision rehabilitation profes- surgery, and that is manifested by 1 or more of (6) an evaluation of the appropriateness of ex- sional, overall direction and control of that pro- the following: tending such adjustment or making such adjust- fessional by the qualified physician who estab- ‘‘(A) Best corrected visual acuity of less than ment permanent; lished the plan of care for the individual, but 20/60, or significant central field defect. (7) an evaluation of the adjustment of the the presence of the qualified physician is not re- ‘‘(B) Significant peripheral field defect includ- work geographic practice cost index required quired during the furnishing of vision rehabili- ing homonymous or heteronymous bilateral vis- under section 1848(e)(1)(A)(iii) of the Social Se- tation services by that professional to the indi- ual field defect or generalized contraction or curity Act (42 U.S.C. 1395w–4(e)(1)(A)(iii)) to re- vidual. constriction of field. 1 flect ⁄4 of the area cost difference in physician ‘‘(2) The term ‘vision rehabilitation profes- ‘‘(C) Reduced peak contrast sensitivity in con- work; sional’ means any of the following individuals: junction with a condition described in subpara- (8) an evaluation of the effect of the adjust- ‘‘(A) An orientation and mobility specialist (as graph (A) or (B). ment described in paragraph (7) on physician defined in paragraph (3)). ‘‘(D) Such other diagnoses, indications, or location and retention in higher than average ‘‘(B) A rehabilitation teacher (as defined in other manifestations as the Secretary may deter- cost-of-living areas, taking into account dif- paragraph (4)). mine to be appropriate.’’. ference in recruitment costs and retention rates ‘‘(C) A low vision therapist (as defined in (c) PAYMENT UNDER PART B.— (1) PHYSICIAN FEE SCHEDULE.—Section for physicians, including specialists; and paragraph (5)). (9) an evaluation of the appropriateness of the 1848(j)(3) (42 U.S.C. 1395w–4(j)(3)) is amended by ‘‘(3) The term ‘orientation and mobility spe- 1⁄4 adjustment for the work geographic practice inserting ‘‘(2)(W),’’ after ‘‘(2)(S),’’. cialist’ means an individual who— cost index.’’. (2) CARVE OUT FROM HOSPITAL OUTPATIENT ‘‘(A) if a State requires licensure or certifi- (b) REPORT.—Not later than 1 year after the DEPARTMENT PROSPECTIVE PAYMENT SYSTEM.— cation of orientation and mobility specialists, is date of enactment of this Act, the Comptroller Section 1833(t)(1)(B)(iv) (42 U.S.C. licensed or certified by that State as an orienta- General of the United States shall submit to 1395l(t)(1)(B)(iv)) is amended by inserting ‘‘vi- tion and mobility specialist; Congress a report on the study conducted under sion rehabilitation services (as defined in section ‘‘(B)(i) holds a baccalaureate or higher degree subsection (a). The report shall include rec- 1861(ww)(1)) or’’ after ‘‘does not include’’. from an accredited college or university in the ommendations regarding the use of more current (3) CLARIFICATION OF BILLING REQUIRE- United States (or an equivalent foreign degree) data in computing geographic cost of practice MENTS.—The first sentence of section 1842(b)(6) with a concentration in orientation and mobil- indices as well as the use of data directly rep- of such Act (42 U.S.C. 1395u(b)(6)) is amended— ity; and resentative of physicians’ costs (rather than (A) by striking ‘‘and’’ before ‘‘(G)’’; and ‘‘(ii) has successfully completed 350 hours of proxy measures of such costs). (B) by inserting before the period the fol- clinical practicum under the supervision of an lowing: ‘‘, and (H) in the case of vision rehabili- SEC. 445. IMPROVED PAYMENT FOR CERTAIN orientation and mobility specialist and has fur- MAMMOGRAPHY SERVICES. tation services (as defined in section nished not less than 9 months of supervised full- (a) EXCLUSION FROM OPD FEE SCHEDULE.— 1861(ww)(1)) furnished by a vision rehabilitation Section 1833(t)(1)(B)(iv) (42 U.S.C. time orientation and mobility services; professional (as defined in section 1861(ww)(2)) 13951(t)(1)(B)(iv)) is amended by inserting before ‘‘(C) has successfully completed the national while under the general supervision (as defined the period at the end the following: ‘‘and does examination in orientation and mobility admin- in section 1861(ww)(1)(D)) of a qualified physi- not include screening mammography (as defined istered by the Academy for Certification of Vi- cian (as defined in section 1861(ww)(1)(C)), pay- in section 1861(jj)) and unilateral and bilateral sion Rehabilitation and Education Profes- ment shall be made to (i) the qualified physician diagnostic mammography’’. sionals; and or (ii) the facility (such as a rehabilitation (b) EFFECTIVE DATE.—The amendment made ‘‘(D) meets such other criteria as the Secretary agency, a clinic, or other facility) through by subsection (a) shall apply to mammography establishes. which such services are furnished under the performed on or after January 1, 2005. ‘‘(4) The term ‘rehabilitation teacher’ means plan of care if there is a contractual arrange- an individual who— SEC. 446. IMPROVEMENT OF OUTPATIENT VISION ment between the vision rehabilitation profes- SERVICES UNDER PART B. ‘‘(A) if a State requires licensure or certifi- sional and the facility under which the facility (a) COVERAGE UNDER PART B.—Section cation of rehabilitation teachers, is licensed or submits the bill for such services’’. 1861(s)(2) (42 U.S.C. 1395x(s)(2)) is amended— certified by the State as a rehabilitation teacher; (d) PLAN OF CARE.—Section 1835(a)(2) (42 (1) in subparagraph (U), by striking ‘‘and’’ ‘‘(B)(i) holds a baccalaureate or higher degree U.S.C. 1395n(a)(2)) is amended— after the semicolon at the end; from an accredited college or university in the (1) in subparagraph (E), by striking ‘‘and’’ (2) in subparagraph (V)(iii), by adding ‘‘and’’ United States (or an equivalent foreign degree) after the semicolon at the end; after the semicolon at the end; and with a concentration in rehabilitation teaching, (2) in subparagraph (F), by striking the period (3) by adding at the end the following new or holds such a degree in a health field; and at the end and inserting ‘‘; and’’; and subparagraph: ‘‘(ii) has successfully completed 350 hours of (3) by inserting after subparagraph (F) the ‘‘(W) vision rehabilitation services (as defined clinical practicum under the supervision of a re- following new subparagraph: in subsection (ww)(1));’’. habilitation teacher and has furnished not less ‘‘(G) in the case of vision rehabilitation serv- (b) SERVICES DESCRIBED.—Section 1861 (42 than 9 months of supervised full-time rehabilita- ices, (i) such services are or were required be- U.S.C. 1395x) is amended by adding at the end tion teaching services; cause the individual needed vision rehabilita- the following new subsection: ‘‘(C) has successfully completed the national tion services, (ii) an individualized, written plan ‘‘Vision Rehabilitation Services; Vision examination in rehabilitation teaching adminis- for furnishing such services has been established Rehabilitation Professional tered by the Academy for Certification of Vision (I) by a qualified physician (as defined in sec- ‘‘(ww)(1)(A) The term ‘vision rehabilitation Rehabilitation and Education Professionals; tion 1861(ww)(1)(C)), (II) by a qualified occupa- services’ means rehabilitative services (as deter- and tional therapist, or (III) in the case of such serv- mined by the Secretary in regulations) fur- ‘‘(D) meets such other criteria as the Secretary ices furnished by a vision rehabilitation profes- nished— establishes. sional, by a qualified physician, (iii) the plan is ‘‘(i) to an individual diagnosed with a vision ‘‘(5) The term ‘low vision therapist’ means an periodically reviewed by the qualified physician, impairment (as defined in paragraph (6)); individual who— and (iv) such services are or were furnished ‘‘(ii) pursuant to a plan of care established by ‘‘(A) if a State requires licensure or certifi- while the individual is or was under the care of a qualified physician (as defined in subpara- cation of low vision therapists, is licensed or the qualified physician.’’. graph (C)) or by a qualified occupational thera- certified by the State as a low vision therapist; (e) RELATIONSHIP TO REHABILITATION ACT OF pist that is periodically reviewed by a qualified ‘‘(B)(i) holds a baccalaureate or higher degree 1973.—The provision of vision rehabilitation physician; from an accredited college or university in the services under the medicare program under title ‘‘(iii) in an appropriate setting (including the United States (or an equivalent foreign degree) XVIII (42 U.S.C. 1395 et seq.) shall not be taken home of the individual receiving such services if with a concentration in low vision therapy, or into account for any purpose under the Reha- specified in the plan of care); and holds such a degree in a health field; and bilitation Act of 1973 (29 U.S.C. 701 et seq.).

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(f) EFFECTIVE DATE.— marriage and family therapist (as defined in ‘‘(vii) A marriage and family therapist (as de- (1) INTERIM, FINAL REGULATIONS.—The Sec- paragraph (2)) for the diagnosis and treatment fined in section 1861(ww)(2)). retary shall publish a rule under this section in of mental illnesses, which the marriage and fam- ‘‘(viii) A mental health counselor (as defined the Federal Register by not later than 180 days ily therapist is legally authorized to perform in section 1861(ww)(4)).’’. after the date of enactment of this Act to carry under State law (or the State regulatory mecha- (b) COVERAGE OF CERTAIN MENTAL HEALTH out the provisions of this section. Such rule nism provided by State law) of the State in SERVICES PROVIDED IN CERTAIN SETTINGS.— shall be effective and final immediately on an which such services are performed, as would (1) RURAL HEALTH CLINICS AND FEDERALLY interim basis, but is subject to change and revi- otherwise be covered if furnished by a physician QUALIFIED HEALTH CENTERS.—Section sion after public notice and opportunity for a or as an incident to a physician’s professional 1861(aa)(1)(B) (42 U.S.C. 1395x(aa)(1)(B)) is period for public comment of not less than 60 service, but only if no facility or other provider amended by striking ‘‘or by a clinical social days. charges or is paid any amounts with respect to worker (as defined in subsection (hh)(1)),’’ and (2) CONSULTATION.—The Secretary shall con- the furnishing of such services. inserting ‘‘, by a clinical social worker (as de- sult with the National Vision Rehabilitation Co- ‘‘(2) The term ‘marriage and family therapist’ fined in subsection (hh)(1)), by a marriage and operative, the Association for Education and means an individual who— family therapist (as defined in subsection Rehabilitation of the Blind and Visually Im- ‘‘(A) possesses a master’s or doctoral degree (ww)(2)), or by a mental health counselor (as paired, the Academy for Certification of Vision which qualifies for licensure or certification as defined in subsection (ww)(4)),’’. Rehabilitation and Education Professionals, the a marriage and family therapist pursuant to (2) HOSPICE PROGRAMS.—Section American Academy of Ophthalmology, the State law; 1861(dd)(2)(B)(i)(III) (42 U.S.C. American Occupational Therapy Association, ‘‘(B) after obtaining such degree has per- 1395x(dd)(2)(B)(i)(III)) is amended by inserting the American Optometric Association, and such formed at least 2 years of clinical supervised ex- ‘‘or a marriage and family therapist (as defined other qualified professional and consumer orga- perience in marriage and family therapy; and in subsection (ww)(2))’’ after ‘‘social worker’’. ‘‘(C) in the case of an individual performing nizations as the Secretary determines appro- (c) AUTHORIZATION OF MARRIAGE AND FAMILY services in a State that provides for licensure or priate in promulgating regulations to carry out THERAPISTS TO DEVELOP DISCHARGE PLANS FOR certification of marriage and family therapists, this section. POST-HOSPITAL SERVICES.—Section is licensed or certified as a marriage and family 1861(ee)(2)(G) (42 U.S.C. 1395x(ee)(2)(G)) is SEC. 447. GAO STUDY AND REPORT ON THE PROP- therapist in such State. AGATION OF CONCIERGE CARE. amended by inserting ‘‘marriage and family ‘‘(3) The term ‘mental health counselor serv- (a) STUDY.— therapist (as defined in subsection (ww)(2)),’’ ices’ means services performed by a mental (1) IN GENERAL.—The Comptroller General of after ‘‘social worker,’’. health counselor (as defined in paragraph (4)) the United States shall conduct a study on con- (d) EFFECTIVE DATE.—The amendments made for the diagnosis and treatment of mental ill- cierge care (as defined in paragraph (2)) to de- by this section shall apply with respect to serv- nesses which the mental health counselor is le- termine the extent to which such care— ices furnished on or after January 1, 2004. (A) is used by medicare beneficiaries (as de- gally authorized to perform under State law (or the State regulatory mechanism provided by the SEC. 449. MEDICARE DEMONSTRATION PROJECT fined in section 1802(b)(5)(A) of the Social Secu- FOR DIRECT ACCESS TO PHYSICAL rity Act (42 U.S.C. 1395a(b)(5)(A))); and State law) of the State in which such services THERAPY SERVICES. (B) has impacted upon the access of medicare are performed, as would otherwise be covered if (a) IN GENERAL.—The Secretary shall conduct beneficiaries (as so defined) to items and serv- furnished by a physician or as incident to a a demonstration project under this section (in ices for which reimbursement is provided under physician’s professional service, but only if no this section referred to as the ‘‘project’’) to dem- the medicare program under title XVIII of the facility or other provider charges or is paid any onstrate the impact of allowing medicare fee-for- Social Security Act (42 U.S.C. 1395 et seq.). amounts with respect to the furnishing of such service beneficiaries direct access to outpatient (2) CONCIERGE CARE.—In this section, the term services. physical therapy services and physical therapy ‘‘(4) The term ‘mental health counselor’ means ‘‘concierge care’’ means an arrangement under services furnished as comprehensive rehabilita- an individual who— which, as a prerequisite for the provision of a tion facility services on— ‘‘(A) possesses a master’s or doctor’s degree in health care item or service to an individual, a (1) costs under the medicare program under mental health counseling or a related field; physician, practitioner (as described in section ‘‘(B) after obtaining such a degree has per- title XVIII of the Social Security Act; and 1842(b)(18)(C) of the Social Security Act (42 formed at least 2 years of supervised mental (2) the satisfaction of beneficiaries receiving U.S.C. 1395u(b)(18)(C))), or other individual— health counselor practice; and such services. (A) charges a membership fee or another inci- ‘‘(C) in the case of an individual performing (b) DEADLINE FOR ESTABLISHMENT; DURATION; dental fee to an individual desiring to receive services in a State that provides for licensure or SITES.— the health care item or service from such physi- certification of mental health counselors or pro- (1) DEADLINE.—The Secretary shall establish cian, practitioner, or other individual; or fessional counselors, is licensed or certified as a the project not later than 1 year after the date (B) requires the individual desiring to receive mental health counselor or professional coun- of enactment of this Act. the health care item or service from such physi- selor in such State.’’. (2) DURATION; SITES.—The project shall— cian, practitioner, or other individual to pur- (3) PROVISION FOR PAYMENT UNDER PART B.— (A) be conducted for a period of 3 years; chase an item or service. Section 1832(a)(2)(B) (42 U.S.C. 1395k(a)(2)(B)) (B) include sites in at least 5 States; and (b) REPORT.—Not later than the date that is is amended by adding at the end the following (C) to the extent feasible, be conducted on a 12 months after the date of enactment of this new clause: statewide basis in each State included under Act, the Comptroller General of the United ‘‘(v) marriage and family therapist services subparagraph (B). States shall submit to Congress a report on the and mental health counselor services;’’. (3) EARLY TERMINATION.—Notwithstanding study conducted under subsection (a)(1) to- (4) AMOUNT OF PAYMENT.—Section 1833(a)(1) paragraph (2)(A), the Secretary may terminate gether with such recommendations for legisla- (42 U.S.C. 1395l(a)(1)) is amended— the operation of the project at a site before the tive or administrative action as the Comptroller (A) by striking ‘‘and (U)’’ and inserting end of the 3-year period specified in such para- General determines to be appropriate. ‘‘(U)’’; and graph if the Secretary determines, based on ac- SEC. 448. COVERAGE OF MARRIAGE AND FAMILY (B) by inserting before the semicolon at the tual data, that the total amount expended for THERAPIST SERVICES AND MENTAL end the following: ‘‘, and (V) with respect to all services under this title for individuals at HEALTH COUNSELOR SERVICES marriage and family therapist services and men- such site for a 12-month period are greater than UNDER PART B OF THE MEDICARE tal health counselor services under section the total amount that would have been ex- PROGRAM. 1861(s)(2)(W), the amounts paid shall be 80 per- pended for such services for such individuals for (a) COVERAGE OF SERVICES.— cent of the lesser of the actual charge for the such period but for the operation of the project (1) IN GENERAL.—Section 1861(s)(2) (42 U.S.C. services or 75 percent of the amount determined at such site. 1395x(s)(2)) is amended— for payment of a psychologist under subpara- (c) WAIVER OF MEDICARE REQUIREMENTS.— (A) in subparagraph (U), by striking ‘‘and’’ graph (L)’’. The Secretary shall waive compliance with such after the semicolon at the end; (5) EXCLUSION OF MARRIAGE AND FAMILY requirements of the medicare program under (B) in subparagraph (V)(iii), by inserting THERAPIST SERVICES AND MENTAL HEALTH COUN- title XVIII of the Social Security Act to the ex- ‘‘and’’ after the semicolon at the end; and SELOR SERVICES FROM SKILLED NURSING FACILITY tent and for the period the Secretary finds nec- (C) by adding at the end the following new PROSPECTIVE PAYMENT SYSTEM.—Section essary to conduct the demonstration project. subparagraph: 1888(e)(2)(A)(ii) (42 U.S.C. 1395yy(e)(2)(A)(ii)), (d) EVALUATIONS AND REPORTS.— ‘‘(W) marriage and family therapist services as amended in section 301(a), is amended by in- (1) EVALUATIONS.— (as defined in subsection (ww)(1)) and mental serting ‘‘marriage and family therapist services (A) IN GENERAL.—The Secretary shall conduct health counselor services (as defined in sub- (as defined in subsection (ww)(1)), mental interim and final evaluations of the project. section (ww)(3));’’. health counselor services (as defined in section (B) FOCUS.—The evaluations conducted under (2) DEFINITIONS.—Section 1861 (42 U.S.C. 1861(ww)(3)),’’ after ‘‘qualified psychologist paragraph (1) shall— 1395x) is amended by adding at the end the fol- services,’’. (i) focus on the impact of the project on pro- lowing new subsection: (6) INCLUSION OF MARRIAGE AND FAMILY gram costs under title XVIII of the Social Secu- ‘‘Marriage and Family Therapist Services; Mar- THERAPISTS AND MENTAL HEALTH COUNSELORS AS rity Act and patient satisfaction with health riage and Family Therapist; Mental Health PRACTITIONERS FOR ASSIGNMENT OF CLAIMS.— care items and services for which payment is Counselor Services; Mental Health Counselor Section 1842(b)(18)(C) (42 U.S.C. 1395u(b)(18)(C)) made under such title; and ‘‘(ww)(1) The term ‘marriage and family ther- is amended by adding at the end the following (ii) include comparisons, with respect to epi- apist services’ means services performed by a new clauses: sodes of care involving direct access to physical

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00091 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8960 CONGRESSIONAL RECORD — SENATE July 7, 2003 therapy services and episodes of care involving given to such term for purposes of section penalties for false certifications for purposes of a physician referral for such services, of— 1861(p) of such Act (42 U.S.C. 1395x(p)), as in ef- receipt of items or services under the medicare (I) the average number of claims paid per epi- fect on the date of enactment of this Act. program. sode for outpatient physical therapy services SEC. 450. DEMONSTRATION PROJECT TO CLARIFY (i) AUTHORIZATION OF APPROPRIATIONS.—Pay- and physical therapy services furnished as com- THE DEFINITION OF HOMEBOUND. ments for the costs of carrying out the dem- prehensive outpatient rehabilitation facility (a) DEMONSTRATION PROJECT.—Not later than onstration project under this section shall be services; 180 days after the date of enactment of this Act, made from the Federal Supplementary Insur- (II) the average number of physician office the Secretary shall conduct a two-year dem- ance Trust Fund under section 1841 of such Act visits per episode; and onstration project under part B of title XVIII of (42 U.S.C. 1395t). (III) the average expenditures under such title the Social Security Act under which medicare (j) DEFINITIONS.—In this section: per episode. beneficiaries with chronic conditions described (1) MEDICARE BENEFICIARY.—The term ‘‘medi- (2) INTERIM AND FINAL REPORTS.—The Sec- in subsection (b) are deemed to be homebound care beneficiary’’ means an individual who is retary shall submit to the Committee on Finance for purposes of receiving home health services enrolled under part B of title XVIII of the So- of the Senate and the Committees on Ways and under the medicare program. cial Security Act. Means and Energy and Commerce of the House (b) MEDICARE BENEFICIARY DESCRIBED.—For of Representatives reports on the evaluations purposes of subsection (a), a medicare bene- (2) HOME HEALTH SERVICES.—The term ‘‘home conducted under paragraph (1) by— ficiary is eligible to be deemed to be homebound, health services’’ has the meaning given such (A) in the case of the report on the interim without regard to the purpose, frequency, or du- term in section 1861(m) of the Social Security evaluation, not later than the end of the second ration of absences from the home, if the bene- Act (42 U.S.C. 1395x(m)). year the project has been in operation; and ficiary— (3) ACTIVITIES OF DAILY LIVING DEFINED.—The (B) in the case of the report on the final eval- (1) has been certified by one physician as an term ‘‘activities of daily living’’ means eating, uation, not later than 180 days after the closing individual who has a permanent and severe con- toileting, transferring, bathing, and dressing. date of the project. dition that will not improve; (4) SECRETARY.—The term ‘‘Secretary’’ means (3) FUNDING FOR EVALUATION.—There are au- (2) requires the individual to receive assist- the Secretary of Health and Human Services. thorized to be appropriated such sums as may be ance from another individual with at least 3 out necessary to provide for the evaluations and re- SEC. 450A. DEMONSTRATION PROJECT FOR EX- of the 5 activities of daily living for the rest of CLUSION OF BRACHYTHERAPY DE- ports required by this subsection. the individual’s life; VICES FROM PROSPECTIVE PAY- (e) DEFINITIONS.—In this section: (3) requires 1 or more home health services to MENT SYSTEM FOR OUTPATIENT (1) COMPREHENSIVE OUTPATIENT REHABILITA- achieve a functional condition that gives the in- HOSPITAL SERVICES. TION SERVICES.—Subject to paragraph (2), the dividual the ability to leave home; and (a) DEMONSTRATION PROJECT.—The Secretary term ‘‘comprehensive outpatient rehabilitation (4) requires technological assistance or the as- shall conduct a demonstration project under services’’ has the meaning given to such term in sistance of another person to leave the home. part B of title XVIII of the Social Security Act section 1861(cc) of the Social Security Act (42 (c) DEMONSTRATION PROJECT SITES.—The under which brachytherapy devices shall be ex- U.S.C. 1395x(cc)). demonstration project established under this cluded from the prospective payment system for (2) DIRECT ACCESS.—The term ‘‘direct access’’ section shall be conducted in 3 States selected by outpatient hospital services under the medicare means, with respect to outpatient physical ther- the Secretary to represent the Northeast, Mid- program and, notwithstanding section 1833(t) of apy services and physical therapy services fur- west, and Western regions of the United States. the Social Security Act (42 U.S.C. 1395l(t)), the nished as comprehensive outpatient rehabilita- (d) LIMITATION ON NUMBER OF PARTICI- amount of payment for a device of tion facility services, coverage of and payment PANTS.—The aggregate number of such bene- brachytherapy furnished under the demonstra- for such services in accordance with the provi- ficiaries that may participate in the project may tion project shall be equal to the hospital’s sions of title XVIII of the Social Security Act, not exceed 15,000. charges for each device furnished, adjusted to except that sections 1835(a)(2), 1861(p), and (e) DATA.—The Secretary shall collect such cost. 1861(cc) of such Act (42 U.S.C. 1395n(a)(2), data on the demonstration project with respect 1395x(p), and 1395x(cc), respectively) shall be to the provision of home health services to medi- (b) SPECIFICATION OF GROUPS FOR applied— care beneficiaries that relates to quality of care, BRACHYTHERAPY DEVICES.—The Secretary shall (A) without regard to any requirement that— patient outcomes, and additional costs, if any, create additional groups of covered OPD serv- (i) an individual be under the care of (or re- to the medicare program. ices that classify devices of brachytherapy fur- ferred by) a physician; or (f) REPORT TO CONGRESS.—Not later than 1 nished under the demonstration project sepa- (ii) services be provided under the supervision year after the date of the completion of the dem- rately from the other services (or group of serv- of a physician; and onstration project under this section, the Sec- ices) paid for under section 1833(t) of the Social (B) by allowing a physician or a qualified retary shall submit to Congress a report on the Security Act (42 U.S.C. 1395l(t)) in a manner re- physical therapist to satisfy any requirement project using the data collected under sub- flecting the number, isotope, and radioactive infor— section (e) and shall include— tensity of such devices furnished, including sep- (i) certification and recertification; and (1) an examination of whether the provision of arate groups for palladium–103 and iodine–125 (ii) establishment and periodic review of a home health services to medicare beneficiaries devices. plan of care. under the project— (c) DURATION.—The Secretary shall conduct (3) FEE-FOR-SERVICE MEDICARE BENE- (A) adversely effects the provision of home the demonstration project under this section for FICIARY.—The term ‘‘fee-for-service medicare health services under the medicare program; or the 3-year period beginning on the date that is beneficiary’’ means an individual who— (B) directly causes an unreasonable increase 90 days after the date of enactment of this Act. (A) is enrolled under part B of title XVIII of of expenditures under the medicare program for (d) REPORT.—Not later than January 1, 2007, the Social Security Act (42 U.S.C. 1395j et seq.); the provision of such services that is directly at- the Secretary shall submit to Congress a report and tributable to such clarification; on the demonstration project conducted under (B) is not enrolled in— (2) the specific data evidencing the amount of this section. The report shall include an evalua- (i) a Medicare+Choice plan under part C of any increase in expenditures that is a directly tion of patient outcomes under the demonstra- such title (42 U.S.C. 1395w–21 et seq.); attributable to the demonstration project (ex- tion project, as well as an analysis of the cost (ii) a plan offered by an eligible organization pressed both in absolute dollar terms and as a effectiveness of the demonstration project. under section 1876 of such Act (42 U.S.C. percentage) above expenditures that would oth- (e) WAIVER AUTHORITY.—The Secretary shall 1395mm); erwise have been incurred for home health serv- waive compliance with the requirements of title (iii) a program of all-inclusive care for the el- ices under the medicare program; and XVIII of the Social Security Act to such extent derly (PACE) under section 1894 of such Act (42 (3) specific recommendations to exempt perma- and for such period as the Secretary determines U.S.C. 1395eee); or nently and severely disabled homebound bene- is necessary to conduct the demonstration (iv) a social health maintenance organization ficiaries from restrictions on the length, fre- project under this section. (SHMO) demonstration project established quency and purpose of their absences from the under section 4018(b) of the Omnibus Budget home to qualify for home health services with- (f) FUNDING.— Reconciliation Act of 1987 (Public Law 100–203). out incurring additional unreasonable costs to (1) IN GENERAL.—The Secretary shall provide (4) OUTPATIENT PHYSICAL THERAPY SERV- the medicare program. for the transfer from the Federal Supplementary ICES.—Subject to paragraph (2), the term ‘‘out- (g) WAIVER AUTHORITY.—The Secretary shall Insurance Trust Fund established under section patient physical therapy services’’ has the waive compliance with the requirements of title 1841 of the Social Security Act (42 U.S.C. 1395t) meaning given to such term in section 1861(p) of XVIII of the Social Security Act (42 U.S.C. 1395 of such funds as are necessary for the costs of the Social Security Act (42 U.S.C. 1395x(p)), ex- et seq.) to such extent and for such period as the carrying out the demonstration project under cept that such term shall not include the speech- Secretary determines is necessary to conduct this section. language pathology services described in the demonstration projects. (2) BUDGET NEUTRALITY.—In conducting the fourth sentence of such section. (h) CONSTRUCTION.—Nothing in this section demonstration project under this section, the (5) PHYSICIAN.—The term ‘‘physician’’ has the shall be construed as waiving any applicable Secretary shall ensure that the aggregate pay- meaning given to such term in section 1861(r)(1) civil monetary penalty, criminal penalty, or ments made by the Secretary do not exceed the of such Act (42 U.S.C. 1395x(r)(1)). other remedy available to the Secretary under amount which the Secretary would have paid if (6) QUALIFIED PHYSICAL THERAPIST.—The term title XI or title XVIII of the Social Security Act the demonstration project under this section was ‘‘qualified physical therapist’’ has the meaning for acts prohibited under such titles, including not implemented.

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00092 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8961 SEC. 450B. REIMBURSEMENT FOR TOTAL BODY with appropriate organizations, regarding the that such authority is provided in advance in ORTHOTIC MANAGEMENT FOR CER- frequency and type of cardiovascular screening an appropriations Act. TAIN NURSING HOME PATIENTS. tests. SEC. 450H INCREASING TYPES OF ORIGINATING (a) IN GENERAL.—Not later than 60 days after ‘‘(B) With respect to the frequency of cardio- TELEHEALTH SITES AND FACILI- the date of the enactment of this Act, the Sec- vascular screening tests approved by the Sec- TATING THE PROVISION OF TELE- retary shall issue product codes that qualified retary under subparagraph (A), in no case may HEALTH SERVICES ACROSS STATE practioners and suppliers may use to receive re- the frequency of such tests be more often than LINES. (a) INCREASING TYPES OF ORIGINATING imbursement under section 1834(h) of the Social once every 2 years.’’. SITES.—Section 1834(m)(4)(C)(ii) (42 U.S.C. Security Act (42 U.S.C. 1395m(h)) for qualified (c) FREQUENCY.—Section 1862(a)(1) of the So- 1395m(m)(4)(C)(ii)) is amended by adding at the total body orthotic management devices used for cial Security Act (42 U.S.C. 1395y(a)(1)) is the treatment of nonambulatory individuals end the following new subclauses: amended— ‘‘(VI) A skilled nursing facility (as defined in with severe musculoskeletal conditions who are (1) by striking ‘‘and’’ at the end of subpara- in the full-time care of skilled nursing facilities section 1819(a)). graph (H); ‘‘(VII) An assisted-living facility (as defined (as defined in section 1861(j) of such Act (42 (2) by striking the semicolon at the end of sub- by the Secretary). U.S.C. 1395x(j))). In issuing such codes, the Sec- paragraph (I) and inserting ‘‘, and’’; and ‘‘(VIII) A board-and-care home (as defined by retary shall take all steps necessary to prevent (3) by adding at the end the following new the Secretary). fraud and abuse. subparagraph: ‘‘(IX) A county of community health clinic (as (b) QUALIFIED TOTAL BODY ORTHOTIC MAN- ‘‘(J) in the case of a cardiovascular screening defined by the Secretary). AGEMENT DEVICE.—For purposes of this section, test (as defined in section 1861(ww)(1)), which is ‘‘(X) A community mental health center (as the term ‘‘qualified total body orthotic manage- performed more frequently than is covered described in section 1861(ff)(2)(B)). ment device’’ means a medically-prescribed de- under section 1861(ww)(2).’’. ‘‘(XI) A long-term care facility (as defined by vice which— (d) EFFECTIVE DATE.—The amendments made the Secretary). (1) consists of custom fitted individual braces by this section shall apply to tests furnished on ‘‘(XII) A facility operated by the Indian with adjustable points at the hips, knee, ankle, or after January 1, 2005. Health Service or by an Indian tribe, tribal or- elbow, and wrist, but only if— SEC. 450E. MEDICARE COVERAGE OF SELF-IN- ganization, or an urban Indian organization (as (A) the individually adjustable braces are at- JECTED BIOLOGICALS. such terms are defined in section 4 of the Indian tached to a frame which is an integral compo- (a) COVERAGE.— Health Care Improvement Act (25 U.S.C. 1603)) nent of the device and cannot function or be (1) IN GENERAL.—Section 1861(s)(2) (42 U.S.C. directly, or under contract or other arrange- used apart from the frame; and 1395x(s)(2)) is amended— ment.’’. (B) the frame is designed such that it serves (A) in subparagraph (U), by striking ‘‘and’’ at (b) FACILITATING THE PROVISION OF TELE- no purpose without the braces; and the end; HEALTH SERVICES ACROSS STATE LINES.— (2) is designed to— (B) in subparagraph (V), by inserting ‘‘and’’ (1) IN GENERAL.—For purposes of expediting (A) improve function; at the end; and the provision of telehealth services for which (B) retard progression of musculoskeletal de- (C) by adding at the end the following new payment is made under the medicare program formity; or subparagraph: under section 1834(m) of the Social Security Act (C) restrict, eliminate, or assist in the func- ‘‘(W)(i) a self-injected biological (which is ap- (42 U.S.C. 1395m(m)), across State lines, the Sec- tioning of lower and upper extremities and pel- proved by the Food and Drug Administration) retary shall, in consultation with representa- vic, spinal, and cervical regions of the body af- that is prescribed as a complete replacement for tives of States, physicians, health care practi- fected by injury, weakness, or deformity, a drug or biological (including the same biologi- tioners, and patient advocates, encourage and of an individual for whom stabilization of af- cal for which payment is made under this title facilitate the adoption of State provisions allow- fected areas of the body, or relief of pressure when it is furnished incident to a physicians’ ing for multistate practitioner licensure across points, is required for medical reasons. service) that would otherwise be described in State lines. subparagraph (A) or (B) and that is furnished (2) DEFINITIONS.—In this subsection: SEC. 450C. AUTHORIZATION OF REIMBURSEMENT (A) TELEHEALTH SERVICE.—The term ‘‘tele- during 2004 or 2005; and FOR ALL MEDICARE PART B SERV- health service’’ has the meaning given that term ICES FURNISHED BY CERTAIN IN- ‘‘(ii) a self-injected drug that is used to treat in subparagraph (F)(i) of section 1834(m)(4) of DIAN HOSPITALS AND CLINICS. multiple sclerosis;’’. the Social Security Act (42 U.S.C. 1395m(m)(4)). (a) IN GENERAL.—Section 1880(e) (42 U.S.C. (2) CONFORMING AMENDMENT.—Subparagraphs (B) PHYSICIAN, PRACTITIONER.—The terms 1395qq(e)) is amended— (A) and (B) of section 1861(s)(2) of the Social Se- ‘‘physician’’ and ‘‘practitioner’’ have the mean- (1) in paragraph (1)(A), by striking ‘‘for serv- curity Act (42 U.S.C. 1395x(s)(2)) are each ing given those terms in subparagraphs (D) and ices described in paragraph (2)’’ and inserting amended by inserting ‘‘, except for any drug or (E), respectively, of such section. biological described in subparagraph (W),’’ after ‘‘for all items and services for which payment (C) MEDICARE PROGRAM.—The term ‘‘medicare may be made under such part’’; ‘‘which’’. program’’ means the program of health insur- (2) by striking paragraph (2); and (b) EFFECTIVE DATE.—The amendments made ance administered by the Secretary under title (3) by redesignating paragraph (3) as para- by subsection (a) shall apply to drugs and XVIII of the Social Security Act (42 U.S.C. 1395 graph (2). biologicals furnished on or after January 1, 2004 et seq.). (b) EFFECTIVE DATE.—The amendments made and before January 1, 2006. SEC. 450I. DEMONSTRATION PROJECT FOR COV- by this section shall apply to items and services SEC. 450F. EXTENSION OF MEDICARE SECONDARY ERAGE OF SURGICAL FIRST ASSIST- furnished on or after October 1, 2004. PAYER RULES FOR INDIVIDUALS ING SERVICES OF CERTIFIED REG- SEC. 450D. COVERAGE OF CARDIOVASCULAR WITH END-STAGE RENAL DISEASE. ISTERED NURSE FIRST ASSISTANTS. SCREENING TESTS. Section 1862(b)(1)(C) (42 U.S.C. 1395y(b)(1)(C)) (a) DEMONSTRATION PROJECT.—The Secretary (a) COVERAGE.—Section 1861(s)(2) of the So- is amended— shall conduct a demonstration project under cial Security Act (42 U.S.C. 1395x(s)(2)) is (1) in the last sentence, by inserting ‘‘, and be- part B of title XVIII of the Social Security Act amended— fore January 1, 2004’’ after ‘‘prior to such under which payment is made for surgical first (1) in subparagraph (U), by striking ‘‘and’’ at date)’’; and assisting services furnished by a certified reg- the end; (2) by adding at the end the following new istered nurse first assistant to medicare bene- (2) in subparagraph (V)(iii), by inserting sentence: ‘‘Effective for items and services fur- ficiaries. ‘‘and’’ at the end; and nished on or after January 1, 2004 (with respect (b) DEFINITIONS.—In this section: (3) by adding at the end the following new to periods beginning on or after June 1, 2002), (1) SURGICAL FIRST ASSISTING SERVICES.—The subparagraph: clauses (i) and (ii) shall be applied by sub- term ‘‘surgical first assisting services’’ means ‘‘(W) cardiovascular screening tests (as de- stituting ‘36-month’ for ‘12-month’ each place it services consisting of first assisting a physician fined in subsection (ww)(1));’’. appears in the first sentence. with surgery and related preoperative, (b) SERVICES DESCRIBED.—Section 1861 of the SEC. 450G. REQUIRING THE INTERNAL REVENUE intraoperative, and postoperative care (as deter- Social Security Act (42 U.S.C. 1395x) is amended SERVICE TO DEPOSIT INSTALLMENT mined by the Secretary) furnished by a certified by adding at the end the following new sub- AGREEMENT AND OTHER FEES IN registered nurse first assistant (as defined in section: THE TREASURY AS MISCELLANEOUS paragraph (2)) which the certified registered RECEIPTS. nurse first assistant is legally authorized to per- ‘‘Cardiovascular Screening Tests Notwithstanding any other provision of law, form by the State in which the services are per- ‘‘(ww)(1) The term ‘cardiovascular screening the Secretary of the Treasury is required to de- formed. tests’ means the following diagnostic tests for posit in the Treasury as miscellaneous receipts (2) CERTIFIED REGISTERED NURSE FIRST AS- the early detection of cardiovascular disease: any fee receipts, including fees from installment SISTANT.—The term ‘‘certified registered nurse ‘‘(A) Tests for the determination of cholesterol agreements and restructured installment agree- first assistant’’ means an individual who— levels. ments, collected under the authority provided by (A) is a registered nurse and is licensed to ‘‘(B) Tests for the determination of lipid levels Section 3 of the Administrative Provisions of the practice nursing in the State in which the sur- of the blood. Internal Revenue Service of Public Law 103–329, gical first assisting services are performed; ‘‘(C) Such other tests for cardiovascular dis- the Treasury, Postal Service and General Gov- (B) has completed a minimum of 2,000 hours of ease as the Secretary may approve. ernment Appropriations Act, 1995. Fees collected first assisting a physician with surgery and re- ‘‘(2)(A) Subject to subparagraph (B), the Sec- under this section shall be available for use by lated preoperative, intraoperative, and post- retary shall establish standards, in consultation the Internal Revenue Service only to the extent operative care; and

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00093 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8962 CONGRESSIONAL RECORD — SENATE July 7, 2003 (C) is certified as a registered nurse first as- ‘‘(i) Subject to clause (ii), the payment Trust Fund established under section 1841 of sistant by an organization recognized by the amount for a service furnished in a year shall be such Act (42 U.S.C. 1395t) of such funds as are Secretary. an amount equal to— necessary for the costs of carrying out the dem- (c) PAYMENT RATES.—Payment under the ‘‘(I) in the case of services furnished in cal- onstration program under this section. demonstration project for surgical first assisting endar year 2004, 90 percent of the VA Alaska fee (B) LIMITATION.—The total amount of the services furnished by a certified registered nurse schedule amount for the service for fiscal year payments that may be made under this section first assistant shall be made at the rate of 80 2001; and shall not exceed $2,500,000 for each fiscal year in percent of the lesser of the actual charge for the ‘‘(II) in the case of services furnished in cal- which the project is conducted under paragraph services or 85 percent of the amount determined endar year 2005, the amount determined under (1). under the fee schedule established under section subclause (I) for 2004, increased by the annual (d) COVERAGE AS MEDICARE PART B SERV- 1848(b) of the Social Security Act (42 U.S.C. update determined under subsection (d) for the ICES.— 1395w–4(b)) for the same services if furnished by year involved. (1) IN GENERAL.—Subject to the succeeding a physician. ‘‘(ii) In the case of a service for which there provisions of this subsection, medical nutrition (d) DEMONSTRATION PROJECT SITES.—The was no VA Alaska fee schedule amount for fis- therapy services furnished under the project project established under this section shall be cal year 2001, the payment amount shall be an shall be considered to be services covered under conducted in 5 States selected by the Secretary. amount equal to the sum of— part B of title XVIII of the Social Security Act (e) DURATION.—The Secretary shall conduct ‘‘(I) the amount of payment for the service (42 U.S.C. 1395j et seq.). the demonstration project for the 3-year period that would otherwise apply under this section; (2) PAYMENT.—Payment for such services beginning on the date that is 90 days after the plus shall be made at a rate of 80 percent of the lesser date of the enactment of this Act. ‘‘(II) an amount equal to the applicable per- of the actual charge for the services or 85 percent of the fee schedule amount provided under (f) REPORT.—Not later than January 1, 2007, cent (as described in subparagraph (C)) of the the Secretary shall submit to Congress a report amount described in subclause (I). section 1848 of the Social Security Act (42 U.S.C. on the project. The report shall include an eval- ‘‘(B) VA ALASKA FEE SCHEDULE AMOUNT.—For 139w–4) for the same services if such services uation of patient outcomes under the project, as purposes of this paragraph, the term ‘VA Alaska were furnished by a physician. (3) APPLICATION OF LIMITS OF BILLING.—The well as an analysis of the cost effectiveness of fee schedule amount’ means the amount that provisions of section 1842(b)(18) of the Social Se- the project. was paid by the Department of Veterans Affairs curity Act (42 U.S.C. 1395u(b)(18)) shall apply to (g) FUNDING.— in Alaska in fiscal year 2001 for non-Depart- a group weight loss management professional (1) IN GENERAL.—The Secretary shall provide ment of Veterans Affairs physicians’ services as- furnishing services under the project in the same for the transfer from the Federal Supplementary sociated with either outpatient or inpatient care manner as they to a practitioner described in Insurance Trust Fund established under section provided to individuals eligible for hospital care subparagraph (C) of such section furnishing 1841 of the Social Security Act (42 U.S.C. 1395t) or medical services under chapter 17 of title 38, services under title XVIII of such Act. of such funds as are necessary for the costs of United States Code, at a non-Department facility (as that term is defined in section 1701(4) of (e) REPORTS.—The Secretary shall submit to carrying out the project under this section. the Committee on Ways and Means and the (2) BUDGET NEUTRALITY.—In conducting the such title 38. ‘‘(C) APPLICABLE PERCENT.—For purposes of Committee on Commerce of the House of Rep- project under this section, the Secretary shall resentatives and the Committee on Finance of ensure that the aggregate payments made by the this paragraph, the term ‘applicable percent’ means the weighted average percentage (based the Senate interim reports on the project and a Secretary do not exceed the amount which the final report on the project not later than the Secretary would have paid if the project under on claims under this section) by which the fiscal year 2001 VA Alaska fee schedule amount for date that is 6 months after the date on which this section was not implemented. the project concludes. The final report shall in- (i) WAIVER AUTHORITY.—The Secretary shall physicians’ services exceeded the amount of payment for such services under this section clude an evaluation of the impact of the use of waive compliance with the requirements of title group weight loss management services as part XVIII of the Social Security Act to such extent that applied in Alaska in 2001.’’. SEC. 450L. DEMONSTRATION PROJECT TO EXAM- of medical nutrition therapy on medicare bene- and for such period as the Secretary determines ficiaries and on the medicare program, including is necessary to conduct demonstration projects. INE WHAT WEIGHT LOSS WEIGHT MANAGEMENT SERVICES CAN COST any impact on reducing costs under the program SEC. 450J. EQUITABLE TREATMENT FOR CHIL- EFFECTIVELY REACH THE SAME RE- and improving the health of beneficiaries. DREN’S HOSPITALS. SULT AS THE NIH DIABETES PRI- (f) DEFINITIONS.—For purposes of this section: (a) IN GENERAL.—Section 1833(t)(7)(D)(ii) (42 MARY PREVENTION TRIAL STUDY: A (1) The term ‘‘obesity’’ means that an indi- U.S.C. 1395l(t)(7)(D)(ii)) is amended to read as 50 PERCENT REDUCTION IN THE vidual has a Body Mass Index (BMI) of 30 and follows: RISK FOR TYPE 2 DIABETES FOR IN- above. DIVIDUALS WHO HAVE IMPAIRED ‘‘(ii) PERMANENT TREATMENT FOR CANCER HOS- (2) GROUP WEIGHT LOSS MANAGEMENT SERV- GLUCOSE TOLERANCE AND ARE PITALS AND CHILDREN S HOSPITALS ICES ’ .— OBESE. .—The term ‘‘group weight loss management ‘‘(I) IN GENERAL.—Subject to subclause (II), in services’’ means comprehensive services fur- (a) IN GENERAL.—Inasmuch as the NIH Diabe- the case of a hospital described in clause (iii) or tes Primary Prevention Trial study proved that nished to individuals who have been diagnosed (v) of section 1886(d)(1)(B), for covered OPD the risk of type 2 diabetes could be cut in half and referred by a physician as having impaired services for which the PPS amount is less than when the Institute of Medicine definition of suc- glucose tolerance and who are obese that consist the pre-BBA amount, the amount of payment cessful weight loss (5 percent weight loss main- of— (A) assessment and treatment based on the under this subsection shall be increased by the tained for a year) is achieved by individuals at needs of individuals as determined by a group amount of such difference. risk for type 2 diabetes due to obesity and im- ‘‘(II) SPECIAL RULE FOR CERTAIN CHILDREN’S weight loss management professional; or paired glucose tolerance, the Secretary shall (B) a specific program or method that has HOSPITALS.—In the case of a hospital described conduct a demonstration project to examine the in section 1886(d)(1)(B)(iii) that is located in a demonstrated its efficacy to produce and main- cost effectiveness and health benefits of pro- tain weight loss through results published in State with a reimbursement system under sec- viding group weight loss management services to tion 1814(b)(3), but that is not reimbursed under peer-reviewed scientific journals using recog- achieve the same result for beneficiaries under nized research methods and statistical analysis such system, for covered OPD services furnished the medicare program under title XVIII of the on or after October 1, 2003, and for which the that provides— Social Security Act who are obese and have im- (i) assessment of current body weight and re- PPS amount is less than the greater of the pre- paired glucose tolerance. BBA amount or the reasonable operating and cording of weight status at each meeting ses- (b) LIMITATION.—The cost of the group weight capital costs without reductions of the hospital sion; loss management services provided under sub- (ii) provision of a healthy eating plan; in providing such services, the amount of pay- section (a) shall not exceed the cost per recipient ment under this subsection shall be increased by (iii) provision of an activity plan; per year of the medical nutritional therapy ben- (iv) provision of a behavior modification plan; the amount of such difference.’’. efit currently available to medicare bene- and SEC. 450K. TREATMENT OF PHYSICIANS’ SERV- ficiaries. (v) a weekly group support meeting. ICES FURNISHED IN ALASKA. (c) SCOPE OF SERVICES.— (3) GROUP WEIGHT LOSS MANAGEMENT PROFES- Section 1848(b) (42 U.S.C. 1395w–4(b)) is (1) DURATION.—The project shall be conducted SIONAL.—The term ‘‘group weight loss manage- amended— for a period of 2 fiscal years. ment professional’’ means an individual who (1) in paragraph (1), in the matter preceding (2) SITES.—The Secretary shall designate the has completed training to provide a program or subparagraph (A), by striking ‘‘paragraph (2)’’ sites at which to conduct the demonstration pro- method that has completed clinical trials and and inserting ‘‘paragraphs (2) and (4)’’; and gram under this section. In selecting sites under has demonstrated its efficacy through publica- (2) by adding at the end the following new this paragraph, the Secretary shall give pref- tions in peer-reviewed scientific journals who— paragraph: erence to sites located in— (A)(i) holds a baccalaureate or higher degree ‘‘(4) TREATMENT OF PHYSICIANS’ SERVICES FUR- (A) rural areas; or granted by a regionally accredited college or NISHED IN ALASKA.— (B) areas that have a high concentration of university in the United States (or an equivalent ‘‘(A) IN GENERAL.—With respect to physicians’ Native Americans with type 2 diabetes. foreign degree) in nutrition social work, psy- services furnished in Alaska on or after January (3) FUNDING.— chology with experience in behavioral modifica- 1, 2004, and before January 1, 2006, the fee (A) IN GENERAL.—Subject to subparagraph tion methods to reduce obesity; or schedule for such services shall be determined as (B), the Secretary shall provide for the transfer (ii) has completed a curriculum of training for follows: from the Federal Supplementary Insurance a specific behavioral based weight management

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00094 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8963 program as described in section (4)(A)(2) and that is primarily or exclusively engaged in the ices facility shall accept as payment in full for recommended in the NIH Clinical Guidelines on care and treatment of one of the following: substitute adult day services (including those Identification, Evaluation, and Treatment of ‘‘(i) patients with a cardiac condition; services described in clauses (ii) through (iv) of Overweight and Obesity in Adults, chapter 4, ‘‘(ii) patients with an orthopedic condition; subsection (i)(4)(B)) furnished by the facility to section H, parts 1, 2, 3, 4, and pursuant to ‘‘(iii) patients receiving a surgical procedure; an eligible medicare beneficiary the amount of guidelines by the Secretary; and or payment provided under the demonstration pro- (B)(i) is licensed or certified as a group weight ‘‘(iv) any other specialized category of pa- gram for home health services consisting of sub- loss management professional by the State in tients or cases that the Secretary designates as stitute adult services. which the services are performed; or inconsistent with the purpose of permitting phy- (3) ADJUSTMENT IN CASE OF OVERUTILIZATION (ii) is certified by an organization that meets sician ownership and investment interests in a OF SUBSTITUTE ADULT DAY SERVICES TO ENSURE such criteria as the Secretary establishes with— hospital under this section. BUDGET NEUTRALITY.—The Secretary shall mon- (I) national organizations representing con- ‘‘(B) EXCEPTION.—For purposes of this sec- itor the expenditures under the demonstration sumers such as the American Obesity Associa- tion, the term ‘specialty hospital’ does not in- program and under title XVIII of the Social Se- tion and the elderly; and clude any hospital— curity Act for home health services. If the Sec- (II) such other organizations as the Secretary ‘‘(i) determined by the Secretary— retary estimates that the total expenditures determines appropriate. ‘‘(I) to be in operation before June 12, 2003; or under the demonstration program and under ‘‘(II) under development as of such date; such title XVIII for home health services for a Subtitle C—Provisions Relating to Parts A ‘‘(ii) for which the number of beds and the and B period determined by the Secretary exceed ex- number of physician investors at any time on or penditures that would have been made under SEC. 451. INCREASE FOR HOME HEALTH SERV- after such date is no greater than the number of such title XVIII for home health services for ICES FURNISHED IN A RURAL AREA. such beds or investors as of such date; and such period if the demonstration program had (a) IN GENERAL.—In the case of home health ‘‘(iii) that meets such other requirements as not been conducted, the Secretary shall adjust services furnished in a rural area (as defined in the Secretary may specify.’’. the rate of payment to adult day services facili- section 1886(d)(2)(D) of the Social Security Act (2) OWNERSHIP AND INVESTMENT INTERESTS IN ties under paragraph (1)(B) in order to eliminate (42 U.S.C. 1395ww(d)(2)(D))) on or after October A RURAL PROVIDER.—Section 1877(d)(2) (42 such excess. 1, 2004, and before October 1, 2006, the Secretary U.S.C. 1395nn(d)(2)) is amended to read as fol- (c) DEMONSTRATION PROGRAM SITES.—The shall increase the payment amount otherwise lows: demonstration program shall be conducted in made under section 1895 of such Act (42 U.S.C. ‘‘(2) RURAL PROVIDERS.—In the case of des- not more than 3 sites selected by the Secretary. 1395fff ) for such services by 5 percent. ignated health services furnished in a rural area (d) DURATION; IMPLEMENTATION.— (b) WAIVING BUDGET NEUTRALITY.—The Sec- (as defined in section 1886(d)(2)(D)) by an enti- (1) DURATION.—The Secretary shall conduct retary shall not reduce the standard prospective ty, if— the demonstration program for a period of 3 payment amount (or amounts) under section ‘‘(A) substantially all of the designated health years. 1895 of the Social Security Act (42 U.S.C. services furnished by the entity are furnished to (2) IMPLEMENTATION.—The Secretary may not 1395fff ) applicable to home health services fur- individuals residing in such a rural area; implement the demonstration program before nished during a period to offset the increase in ‘‘(B) the entity is not a specialty hospital (as October 1, 2004. payments resulting from the application of sub- defined in subsection (h)(7)); and (e) VOLUNTARY PARTICIPATION.—Participation section (a). ‘‘(C) the Secretary determines, with respect to of eligible medicare beneficiaries in the dem- (c) NO EFFECT ON SUBSEQUENT PERIODS.—The such entity, that such services would not be onstration program shall be voluntary. payment increase provided under subsection (a) available in such area but for the ownership or (f) WAIVER AUTHORITY.— for a period under such subsection— investment interest.’’. (1) IN GENERAL.—Except as provided in para- (1) shall not apply to episodes and visits end- (b) EFFECTIVE DATE.—Subject to paragraph graph (2), the Secretary may waive such re- ing after such period; and (2), the amendments made by this section shall quirements of titles XI and XVIII of the Social (2) shall not be taken into account in calcu- apply to referrals made for designated health Security Act (42 U.S.C. 1301 et seq.; 1395 et seq.) lating the payment amounts applicable for epi- services on or after January 1, 2004. as may be necessary for the purposes of carrying sodes and visits occurring after such period. (c) APPLICATION OF EXCEPTION FOR HOSPITALS out the demonstration program. SEC. 452. LIMITATION ON REDUCTION IN AREA UNDER DEVELOPMENT.—For purposes of section (2) MAY NOT WAIVE ELIGIBILITY REQUIREMENTS WAGE ADJUSTMENT FACTORS 1877(h)(7)(B)(i)(II) of the Social Security Act, as FOR HOME HEALTH SERVICES.—The Secretary UNDER THE PROSPECTIVE PAYMENT added by subsection (a)(1)(B), in determining may not waive the beneficiary eligibility re- SYSTEM FOR HOME HEALTH SERV- whether a hospital is under development as of quirements for home health services under title ICES. June 12, 2003, the Secretary shall consider— XVIII of the Social Security Act. Section 1895(b)(4)(C) (42 U.S.C. (1) whether architectural plans have been (g) EVALUATION AND REPORT.— 1395fff(b)(4)(C)) is amended— completed, funding has been received, zoning re- (1) EVALUATION.—The Secretary shall conduct (1) by striking ‘‘FACTORS.—The Secretary’’ quirements have been met, and necessary ap- an evaluation of the clinical and cost effective- and inserting ‘‘FACTORS.— provals from appropriate State agencies have ness of the demonstration program. ‘‘(i) IN GENERAL.—Subject to clause (ii), the been received; and (2) REPORT.—Not later than 30 months after Secretary’’; and (2) any other evidence the Secretary deter- the commencement of the demonstration pro- (2) by adding at the end the following new mines would indicate whether a hospital is gram, the Secretary shall submit to Congress a clause: under development as of such date. report on the evaluation conducted under para- ‘‘(ii) LIMITATION ON REDUCTION IN FISCAL SEC. 454. DEMONSTRATION PROGRAM FOR SUB- graph (1) and shall include in the report the fol- YEAR 2005 AND 2006.—For fiscal years 2005 and STITUTE ADULT DAY SERVICES. lowing: 2006, the area wage adjustment factor applicable (a) ESTABLISHMENT.—The Secretary shall es- (A) An analysis of the patient outcomes and to home health services furnished in an area in tablish a demonstration program (in this section costs of furnishing care to the eligible medicare the fiscal year may not be more that 3 percent referred to as the ‘‘demonstration program’’) beneficiaries participating in the demonstration less than the area wage adjustment factor appli- under which the Secretary provides eligible program as compared to such outcomes and cable to home health services for the area for medicare beneficiaries with coverage under the costs to such beneficiaries receiving only home the previous year.’’. medicare program of substitute adult day serv- health services under title XVIII of the Social SEC. 453. CLARIFICATIONS TO CERTAIN EXCEP- ices furnished by an adult day services facility. Security Act for the same health conditions. TIONS TO MEDICARE LIMITS ON (b) PAYMENT RATE FOR SUBSTITUTE ADULT (B) Such recommendations regarding the ex- PHYSICIAN REFERRALS. DAY SERVICES.— tension, expansion, or termination of the pro- (a) LIMITS ON PHYSICIAN REFERRALS.— (1) PAYMENT RATE.—For purposes of making gram as the Secretary determines appropriate. (1) OWNERSHIP AND INVESTMENT INTERESTS IN payments to an adult day services facility for (i) DEFINITIONS.—In this section: WHOLE HOSPITALS.— substitute adult day services under the dem- (1) ADULT DAY SERVICES FACILITY.— (A) IN GENERAL.—Section 1877(d)(3) (42 U.S.C. onstration program, the following rules shall (A) IN GENERAL.—Except as provided in sub- 1395nn(d)(3)) is amended— apply: paragraphs (B) and (C), the term ‘‘adult day (i) by striking ‘‘and’’ at the end of subpara- (A) ESTIMATION OF PAYMENT AMOUNT.—The services facility’’ means a public agency or pri- graph (A); and Secretary shall estimate the amount that would vate organization, or a subdivision of such an (ii) by redesignating subparagraph (B) as sub- otherwise be payable to a home health agency agency or organization, that— paragraph (C) and inserting after subparagraph under section 1895 of the Social Security Act (42 (i) is engaged in providing skilled nursing (A) the following: U.S.C. 1395fff) for all home health services de- services and other therapeutic services directly ‘‘(B) the hospital is not a specialty hospital scribed in subsection (i)(4)(B)(i) under the plan or under arrangement with a home health agen- (as defined in subsection (h)(7)); and’’. of care. cy; (B) DEFINITION.—Section 1877(h) (42 U.S.C. (B) AMOUNT OF PAYMENT.—Subject to para- (ii) provides the items and services described 1395nn(h)) is amended by adding at the end the graph (3)(B), the total amount payable for sub- in paragraph (4)(B); and following: stitute adult day services under the plan of care (iii) meets the requirements of paragraphs (2) ‘‘(7) SPECIALTY HOSPITAL.— is equal to 95 percent of the amount estimated to through (8) of subsection (o). ‘‘(A) IN GENERAL.—For purposes of this sec- be payable under subparagraph (A). (B) INCLUSION.—Notwithstanding subpara- tion, except as provided in subparagraph (B), (2) LIMITATION ON BALANCE BILLING.—Under graph (A), the term ‘‘adult day services facility’’ the term ‘specialty hospital’ means a hospital the demonstration program, an adult day serv- shall include a home health agency in which

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the items and services described in clauses (ii) (1) IN GENERAL.—Section 1861 of the Social Se- (3) PAYMENT TO RENAL DIALYSIS FACILITIES.— through (iv) of paragraph (4)(B) are provided— curity Act (42 U.S.C.1395x) is amended— Section 1881(b) of such Act (42 U.S.C. 1395rr(b)), (i) by an adult day services program that is li- (A) in subsection (s)(2)— as amended by section 433(b)(5), is further censed or certified by a State, or accredited, to (i) in subparagraph (U), by striking ‘‘and’’ at amended by adding at the end the following furnish such items and services in the State; and the end; new paragraph: (ii) under arrangements with that program (ii) in subparagraph (V)(iii), by adding ‘‘and’’ ‘‘(13) For purposes of paragraph (7), the single made by such agency. at the end; and composite weighted formulas determined under (C) WAIVER OF SURETY BOND.—The Secretary (iii) by adding at the end the following new such paragraph shall not take into account the may waive the requirement of a surety bond subparagraph: amount of payment for kidney disease education under section 1861(o)(7) of the Social Security ‘‘(W) kidney disease education services (as de- services (as defined in section 1861(ww)). In- Act (42 U.S.C. 1395x(o)(7)) in the case of an fined in subsection (ww));’’; and stead, payment for such services shall be made agency or organization that provides a com- (B) by adding at the end the following new to the renal dialysis facility on an assignment- parable surety bond under State law. subsection: related basis under section 1848.’’. (2) ELIGIBLE MEDICARE BENEFICIARY.—The ‘‘Kidney Disease Education Services (4) ANNUAL REPORT TO CONGRESS.—Not later term ‘‘eligible medicare beneficiary’’ means an than April 1, 2004, and annually thereafter, the ‘‘(ww)(1) The term ‘kidney disease education individual eligible for home health services Secretary of Health and Human Services shall services’ means educational services that are— under title XVIII of the Social Security Act. submit to Congress a report on the number of ‘‘(A) furnished to an individual with kidney (3) HOME HEALTH AGENCY.—The term ‘‘home medicare beneficiaries who are entitled to kid- disease who, according to accepted clinical health agency’’ has the meaning given such ney disease education services (as defined in guidelines identified by the Secretary, will re- term in section 1861(o) of the Social Security Act section 1861(ww) of the Social Security Act, as quire dialysis or a kidney transplant; (42 U.S.C. 1395x(o)). added by paragraph (1)) under title XVIII of ‘‘(B) furnished, upon the referral of the physi- (4) SUBSTITUTE ADULT DAY SERVICES.— such Act and who receive such services, together (A) IN GENERAL.—The term ‘‘substitute adult cian managing the individual’s kidney condi- with such recommendations for legislative and day services’’ means the items and services de- tion, by a qualified person (as defined in para- administrative action as the Secretary deter- scribed in subparagraph (B) that are furnished graph (2)); and mines to be appropriate to fulfill the legislative to an individual by an adult day services facil- ‘‘(C) designed— intent that resulted in the enactment of that ity as a part of a plan under section 1861(m) of ‘‘(i) to provide comprehensive information re- subsection. the Social Security Act (42 U.S.C. 1395x(m)) that garding— (b) EFFECTIVE DATE.—The amendments made substitutes such services for some or all of the ‘‘(I) the management of comorbidities; by this section shall apply to services furnished items and services described in subparagraph ‘‘(II) the prevention of uremic complications; on or after January 1, 2004. (B)(i) furnished by a home health agency under and the plan, as determined by the physician estab- ‘‘(III) each option for renal replacement ther- SEC. 457. FRONTIER EXTENDED STAY CLINIC DEMONSTRATION PROJECT. lishing the plan. apy (including peritoneal dialysis, hemodialysis (a) AUTHORITY TO CONDUCT DEMONSTRATION (B) ITEMS AND SERVICES DESCRIBED.—The (including vascular access options), and trans- items and services described in this subpara- plantation); and PROJECT.—The Secretary shall waive such pro- graph are the following items and services: ‘‘(ii) to ensure that the individual has the op- visions of the medicare program established (i) Items and services described in paragraphs portunity to actively participate in the choice of under title XVIII of the Social Security Act (42 (1) through (7) of such section 1861(m). therapy. U.S.C. 1395 et seq.) as are necessary to conduct (ii) Meals. ‘‘(2) The term ‘qualified person’ means— a demonstration project under which frontier (iii) A program of supervised activities de- ‘‘(A) a physician (as described in subsection extended stay clinics described in subsection (b) signed to promote physical and mental health (r)(1)); in isolated rural areas are treated as providers and furnished to the individual by the adult ‘‘(B) an individual who— of items and services under the medicare pro- day services facility in a group setting for a pe- ‘‘(i) is— gram. riod of not fewer than 4 and not greater than 12 ‘‘(I) a registered nurse; (b) CLINICS DESCRIBED.—A frontier extended hours per day. ‘‘(II) a registered dietitian or nutrition profes- stay clinic is described in this subsection if the (iv) A medication management program (as sional (as defined in subsection (vv)(2)); clinic— defined in subparagraph (C)). ‘‘(III) a clinical social worker (as defined in (1) is located in a community where the closest (C) MEDICATION MANAGEMENT PROGRAM.—For subsection (hh)(1)); short-term acute care hospital or critical access purposes of subparagraph (B)(iv), the term ‘‘(IV) a physician assistant, nurse practi- hospital is at least 75 miles away from the com- ‘‘medication management program’’ means a tioner, or clinical nurse specialist (as those munity or is inaccessible by public road; and (2) is designed to address the needs of— program of services, including medicine screen- terms are defined in subsection (aa)(5)); or (A) seriously or critically ill or injured pa- ing and patient and health care provider edu- ‘‘(V) a transplant coordinator; and tients who, due to adverse weather conditions or cation programs, that provides services to mini- ‘‘(ii) meets such requirements related to expe- other reasons, cannot be transferred quickly to mize— rience and other qualifications that the Sec- acute care referral centers; or (i) unnecessary or inappropriate use of pre- retary finds necessary and appropriate for fur- (B) patients who need monitoring and obser- scription drugs; and nishing the services described in paragraph (1); (ii) adverse events due to unintended prescrip- vation for a limited period of time. or tion drug-to-drug interactions. (c) DEFINITIONS.—In this section, the terms ‘‘(C) a renal dialysis facility subject to the re- ‘‘hospital’’ and ‘‘critical access hospital’’ have SEC. 455. MEDPAC STUDY ON MEDICARE PAY- quirements of section 1881(b)(1) with personnel MENTS AND EFFICIENCIES IN THE the meanings given such terms in subsections (e) who— HEALTH CARE SYSTEM. and (mm), respectively, of section 1861 of the So- Not later than 18 months after the date of en- ‘‘(i) provide the services described in para- cial Security Act (42 U.S.C. 1395x). actment of this Act, the Medicare Payment Ad- graph (1); and ‘‘(ii) meet the requirements of subparagraph SEC. 458. IMPROVEMENTS IN NATIONAL COV- visory Commission established under section ERAGE DETERMINATION PROCESS 1805 of the Social Security Act (42 U.S.C. 1395b– (A) or (B). TO RESPOND TO CHANGES IN TECH- 6) shall provide Congress with recommendations ‘‘(3) The Secretary shall develop the require- NOLOGY. to recognize and reward, within payment meth- ments under paragraph (2)(B)(ii) after con- (a) IN GENERAL.—Section 1862 (42 U.S.C. odologies for physicians and hospitals estab- sulting with physicians, health educators, pro- 1395y) is amended— lished under the medicare program under title fessional organizations, accrediting organiza- (A) in the third sentence of subsection (a) by XVIII of the Social Security Act, efficiencies, tions, kidney patient organizations, dialysis fa- inserting ‘‘consistent with subsection (j)’’ after and the lower utilization of services created by cilities, transplant centers, network organiza- ‘‘the Secretary shall ensure’’; and the practice of medicine in historically efficient tions described in section 1881(c)(2), and other (B) by adding at the end the following new and low-cost areas. Measures of efficiency rec- knowledgeable persons. subsection: ognized in accordance with the preceding sen- ‘‘(4) In promulgating regulations to carry out ‘‘(j) NATIONAL COVERAGE DETERMINATION tence shall include— this subsection, the Secretary shall ensure that PROCESS.— (1) shorter hospital stays than the national such regulations ensure that each beneficiary ‘‘(1) TIMEFRAME FOR DECISIONS ON REQUESTS average; who is entitled to kidney disease education serv- FOR NATIONAL COVERAGE DETERMINATIONS.—In (2) fewer physician visits than the national ices under this title receives such services in a the case of a request for a national coverage de- average; timely manner that ensures that the beneficiary termination that— (3) fewer laboratory tests than the national receives the maximum benefit of those services. ‘‘(A) does not require a technology assessment average; ‘‘(5) The Secretary shall monitor the imple- from an outside entity or deliberation from the (4) a greater utilization of hospice services mentation of this subsection to ensure that Medicare Coverage Advisory Committee, the de- than the national average; and beneficiaries who are eligible for kidney disease cision on the request shall be made not later (5) the efficacy of disease management and education services receive such services in the than 6 months after the date of the request; or preventive health services. manner described in paragraph (4).’’. ‘‘(B) requires such an assessment or delibera- SEC. 456. MEDICARE COVERAGE OF KIDNEY DIS- (2) PAYMENT UNDER PHYSICIAN FEE SCHED- tion and in which a clinical trial is not re- EASE EDUCATION SERVICES. ULE.—Section 1848(j)(3) of such Act (42 U.S.C. quested, the decision on the request shall be (a) COVERAGE OF KIDNEY DISEASE EDUCATION 1395w–4(j)(3)) is amended by inserting ‘‘, made not later than 9 months after the date of SERVICES.— (2)(W)’’, after ‘‘(2)(S)’’. the request.

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‘‘(2) PROCESS FOR PUBLIC COMMENT IN NA- (b) CLINICS DESCRIBED.—A frontier extended tence and inserting the following: ‘‘In order to TIONAL COVERAGE DETERMINATIONS.—At the end stay clinic is described in this subsection if the recover payment made under this title for an of the 6-month period (with respect to a request clinic— item or service, the United States may bring an under paragraph (1)(A)) or 9-month period (1) is located in a community where the closest action against any or all entities that are or (with respect to a request under paragraph short-term acute care hospital or critical access were required or responsible (directly, as an in- (1)(B)) that begins on the date a request for a hospital is at least 75 miles away from the com- surer or self-insurer, as a third-party adminis- national coverage determination is made, the munity or is inaccessible by public road; and trator, as an employer that sponsors or contrib- Secretary shall— (2) is designed to address the needs of— utes to a group health plan, or large group ‘‘(A) make a draft of proposed decision on the (A) seriously or critically ill or injured pa- health plan, or otherwise) to make payment request available to the public through the tients who, due to adverse weather conditions or with respect to the same item or service (or any Medicare Internet site of the Department of other reasons, cannot be transferred quickly to portion thereof) under a primary plan. The Health and Human Services or other appro- acute care referral centers; or United States may, in accordance with para- priate means; (B) patients who need monitoring and obser- graph (3)(A) collect double damages against any ‘‘(B) provide a 30-day period for public com- vation for a limited period of time. such entity. In addition, the United States may (c) DEFINITIONS.—In this section, the terms ment on such draft; recover under this clause from any entity that ‘‘hospital’’ and ‘‘critical access hospital’’ have ‘‘(C) make a final decision on the request has received payment from a primary plan or the meanings given such terms in subsections (e) within 60 days of the conclusion of the 30-day from the proceeds of a primary plan’s payment and (mm), respectively, of section 1861 of the So- period referred to under subparagraph (B); to any entity.’’. cial Security Act (42 U.S.C. 1395x). ‘‘(D) include in such final decision summaries (c) CLERICAL AMENDMENTS.—Section 1862(b) of the public comments received and responses SEC. 461. MEDICARE SECONDARY PAYOR (MSP) (42 U.S.C. 1395y(b)) is amended— PROVISIONS. thereto; (1) in paragraph (1)(A), by moving the inden- (a) TECHNICAL AMENDMENT CONCERNING SEC- ‘‘(E) make available to the public the clinical tation of clauses (ii) through (v) 2 ems to the RETARY’S AUTHORITY TO MAKE CONDITIONAL evidence and other data used in making such a left; and PAYMENT WHEN CERTAIN PRIMARY PLANS DO decision when the decision differs from the rec- (2) in paragraph (3)(A), by striking ‘‘such’’ NOT PAY PROMPTLY.— before ‘‘paragraphs’’. ommendations of the Medicare Coverage Advi- (1) IN GENERAL.—Section 1862(b)(2) (42 U.S.C. sory Committee; and 1395y(b)(2)) is amended— SEC. 462. MEDICARE PANCREATIC ISLET CELL ‘‘(F) in the case of a decision to grant the cov- (A) in subparagraph (A)(ii), by striking TRANSPLANT DEMONSTRATION PROJECT. erage determination, assign a temporary or per- ‘‘promptly (as determined in accordance with (a) ESTABLISHMENT.—In order to test the ap- manent code and implement the coverage deci- regulations)’’; propriateness of pancreatic islet cell transplan- sion at the end of the 60-day period referred to (B) in subparagraph (B)— in subparagraph (C). (i) by redesignating clauses (i) through (iii) as tation, not later than 120 days after the date of ‘‘(3) NATIONAL COVERAGE DETERMINATION DE- clauses (ii) through (iv), respectively; and the enactment of this Act, the Secretary shall FINED.—For purposes of this subsection, the (ii) by inserting before clause (ii), as so redes- establish a demonstration project which the Sec- term ‘national coverage determination’ has the ignated, the following new clause: retary, provides for payment under the medicare meaning given such term in section ‘‘(i) AUTHORITY TO MAKE CONDITIONAL PAY- program under title XVIII of the Social Security 1869(f)(1)(B).’’. MENT.—The Secretary may make payment under Act for pancreatic islet cell transplantation and (b) EFFECTIVE DATE.—The amendments made this title with respect to an item or service if a related items and services in the case of medi- by this section shall apply to national coverage primary plan described in subparagraph (A)(ii) care beneficiaries who have type I (juvenile) di- determinations as of January 1, 2004. has not made or cannot reasonably be expected abetes and have end stage renal disease. to make payment with respect to such item or (b) DURATION OF PROJECT.—The authority of SEC. 459. INCREASE IN MEDICARE PAYMENT FOR the Secretary to conduct the demonstration CERTAIN HOME HEALTH SERVICES. service promptly (as determined in accordance project under this section shall terminate on the (a) IN GENERAL.—Section 1895 of the Social with regulations). Any such payment by the date that is 5 years after the date of the estab- Security Act (42 U.S.C. 1395fff) is amended by Secretary shall be conditioned on reimbursement lishment of the project. adding at the end the following: to the appropriate Trust Fund in accordance (c) EVALUATION AND REPORT.—The Secretary NCREASE IN PAYMENT FOR SERVICES FUR- with the succeeding provisions of this sub- ‘‘(f) I shall conduct an evaluation of the outcomes of NISHED IN A RURAL AREA.— section.’’. the demonstration project. Not later than 120 ‘‘(1) IN GENERAL.—In the case of home health (2) EFFECTIVE DATE.—The amendments made days after the date of the termination of the services furnished in a rural area (as defined in by paragraph (1) shall be effective as if included demonstration project under subsection (b), the section 1886(d)(2)(D)) on or after October 1, 2004 in the enactment of title III of the Medicare and Secretary shall submit to Congress a report on and before October 1, 2006, the Secretary shall Medicaid Budget Reconciliation Amendments of the project, including recommendations for such increase the payment amount otherwise made 1984 (Public Law 98-369). LARIFYING AMENDMENTS TO CONDITIONAL legislative and administrative action as the Sec- under this section for such services by 10 per- (b) C PAYMENT PROVISIONS.—Section 1862(b)(2) (42 retary deems appropriate. cent. U.S.C. 1395y(b)(2)) is further amended— (d) PAYMENT METHODOLOGY.—The Secretary ‘‘(2) WAIVER OF BUDGET NEUTRALITY.—The (1) in subparagraph (A), in the matter fol- shall establish an appropriate payment method- Secretary shall not reduce the standard prospec- lowing clause (ii), by inserting the following ology for the provision of items and services tive payment amount (or amounts) under this sentence at the end: ‘‘An entity that engages in under the demonstration project, which may in- section applicable to home health services fur- a business, trade, or profession shall be deemed clude a payment methodology that bundles, to nished during any period to offset the increase to have a self-insured plan if it carries its own the maximum extent feasible, payment for all in payments resulting from the application of risk (whether by a failure to obtain insurance, such items and services. paragraph (1).’’. or otherwise) in whole or in part.’’; SEC. 463. INCREASE IN MEDICARE PAYMENT FOR (b) PAYMENT ADJUSTMENT.—Section 1895(b)(5) (2) in subparagraph (B)(ii), as redesignated by CERTAIN HOME HEALTH SERVICES. of the Social Security Act (42 U.S.C. subsection (a)(2)(B)— (a) IN GENERAL.—Section 1895 of the Social 1395fff(b)(5)) is amended by adding at the end (A) by striking the first sentence and inserting Security Act (42 U.S.C. 1395fff) is amended by the following: ‘‘Notwithstanding this para- the following: ‘‘A primary plan, and an entity adding at the end the following: graph, the total amount of the additional pay- that receives payment from a primary plan, ‘‘(f) INCREASE IN PAYMENT FOR SERVICES FUR- ments or payment adjustments made under this shall reimburse the appropriate Trust Fund for NISHED IN A RURAL AREA.— paragraph may not exceed, with respect to fiscal any payment made by the Secretary under this ‘‘(1) IN GENERAL.—In the case of home health year 2004, 3 percent, and, with respect to fiscal title with respect to an item or service if it is services furnished in a rural area (as defined in years 2005 and 2006, 4 percent, of the total pay- demonstrated that such primary plan has or section 1886(d)(2)(D)) on or after October 1, 2004, ments projected or estimated to be made based had a responsibility to make payment with re- and before October 1, 2006, the Secretary shall on the prospective payment system under this spect to such item or service. A primary plan’s increase the payment amount otherwise made subsection in the year involved.’’. responsibility for such payment may be dem- under this section for such services by 10 per- (c) EFFECTIVE DATE.—The amendments made onstrated by a judgment, a payment conditioned cent. by this section shall apply to services furnished upon the recipient’s compromise, waiver, or re- ‘‘(2) WAIVER OF BUDGET NEUTRALITY.—The on or after October 1, 2003. lease (whether or not there is a determination or Secretary shall not reduce the standard prospec- SEC. 460. FRONTIER EXTENDED STAY CLINIC admission of liability) of payment for items or tive payment amount (or amounts) under this DEMONSTRATION PROJECT. services included in a claim against the primary section applicable to home health services fur- (a) AUTHORITY TO CONDUCT DEMONSTRATION plan or the primary plan’s insured, or by other nished during any period to offset the increase PROJECT.—The Secretary shall waive such pro- means.’’; and in payments resulting from the application of visions of the medicare program established (B) in the final sentence, by striking ‘‘on the paragraph (1).’’. under title XVIII of the Social Security Act (42 date such notice or other information is re- (b) PAYMENT ADJUSTMENT.—Section 1895(b)(5) U.S.C. 1395 et seq.) as are necessary to conduct ceived’’ and inserting ‘‘on the date notice of, or of the Social Security Act (42 U.S. C. a demonstration project under which frontier information related to, a primary plan’s respon- 1395fff(b)(5)) is amended by adding at the end extended stay clinics described in subsection (b) sibility for such payment or other information is the following: ‘‘Notwithstanding this para- in isolated rural areas are treated as providers received’’; and graph, the total amount of the additional pay- of items and services under the medicare pro- (3) in subparagraph (B)(iii), , as redesignated ments or payment adjustments made under this gram. by subsection (a)(2)(B), by striking the first sen- paragraph may not exceed, with respect to fiscal

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00097 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8966 CONGRESSIONAL RECORD — SENATE July 7, 2003 year 2004, 3 percent, and, with respect to fiscal final regulations published on or after such ‘‘(B) information from medicare contractors years 2005 and 2006, 4 percent, of the total pay- date. that tracks the nature of all communications ments projected or estimated to be made based (c) STATUS OF PENDING INTERIM FINAL REGU- and correspondence. on the prospective payment system under this LATIONS.—Not later than 6 months after the ‘‘(3) A report under paragraph (1) shall in- subsection in the year involved.’’. date of enactment of this Act, the Secretary clude a description of efforts by the Secretary to (c) EFFECTIVE DATE.—The amendments made shall publish a notice in the Federal Register reduce such inconsistency or conflicts, and rec- by this section shall apply to services furnished that provides the status of each interim final ommendations for legislation or administrative on or after October 1, 2003. regulation that was published on or before the action that the Secretary determines appropriate SEC. 464. SENSE OF THE SENATE CONCERNING date of enactment of this Act and for which no to further reduce such inconsistency or con- MEDICARE PAYMENT UPDATE FOR final regulation has been published. Such notice flicts.’’. PHYSICIANS AND OTHER HEALTH shall include the date by which the Secretary SEC. 504. STREAMLINING AND SIMPLIFICATION PROFESSIONALS. plans to publish the final regulation that is OF MEDICARE REGULATIONS. (a) FINDINGS.—The Senate makes the fol- based on the interim final regulation. (a) IN GENERAL.—The Secretary of Health and lowing findings: SEC. 502. COMPLIANCE WITH CHANGES IN REGU- Human Services shall conduct an analysis of the (1) The formula by which medicare payments LATIONS AND POLICIES. regulations issued under title XVIII of the So- are updated each year for services furnished by (a) NO RETROACTIVE APPLICATION OF SUB- cial Security Act and related laws in order to physicians and other health professionals is STANTIVE CHANGES.— determine how such regulations may be stream- fundamentally flawed. (1) IN GENERAL.—Section 1871 (42 U.S.C. lined and simplified to increase the efficiency (2) The flawed physician payment update for- 1395hh) is amended by adding at the end the fol- and effectiveness of the medicare program with- mula is causing a continuing physician payment lowing new subsection: out harming beneficiaries or providers and to crisis, and, without congressional action, medi- ‘‘(d)(1)(A) A substantive change in regula- decrease the burdens the medicare payment sys- care payment rates for physicians and other tions, manual instructions, interpretative rules, tems impose on both beneficiaries and providers. practitioners are predicted to fall by 4.2 percent statements of policy, or guidelines of general ap- (b) REDUCTION IN REGULATIONS.—The Sec- in 2004. plicability under this title shall not be applied retary, after completion of the analysis under (3) A physician payment cut in 2004 would the (by extrapolation or otherwise) retroactively to subsection (a), shall direct the rewriting of the fifth cut since 1991, and would be on top of a 5.4 items and services furnished before the effective regulations described in subsection (a) in such a percent cut in 2002, with additional cuts esti- date of the change, unless the Secretary deter- manner as to— mated for 2005, 2006, and 2007. From 1991 mines that— (1) reduce the number of words comprising all through 2003, payment rates for physicians and ‘‘(i) such retroactive application is necessary regulations by at least two-thirds by October 1, health professionals fell 14 percent behind prac- to comply with statutory requirements; or 2004, and tice cost inflation as measured by medicare’s ‘‘(ii) failure to apply the change retroactively (2) ensure the simple, effective, and efficient own conservative estimates. would be contrary to the public interest.’’. operation of the medicare program. (4) The sustainable growth rate (SGR) expend- (2) EFFECTIVE DATE.—The amendment made (c) APPLICATION OF THE PAPERWORK REDUC- iture target, which is the basis for the physician by paragraph (1) shall apply to substantive TION ACT.—The Secretary shall apply the provi- payment update, is linked to the gross domestic changes issued on or after the date of enactment sions of chapter 35 of title 44, United States product and penalizes physicians and other of this Act. Code (commonly known as the ‘‘Paperwork Re- practitioners for volume increases that they can- (b) TIMELINE FOR COMPLIANCE WITH SUB- duction Act’’) to the provisions of this Act to en- not control and that the government actively STANTIVE CHANGES AFTER NOTICE.— sure that any regulations issued to implement promotes through new coverage decisions, qual- (1) IN GENERAL.—Section 1871(d)(1), as added this Act are written in plain language, are ity improvement activities, and other initiatives by subsection (a), is amended by adding at the streamlined, promote the maximum efficiency that, while beneficial to patients, are not re- end the following: and effectiveness of the medicare and medicaid ‘‘(B) A compliance action may be made flected in the SGR. programs without harming beneficiaries or pro- against a provider of services, physician, practi- (b) SENSE OF THE SENATE.—It is the sense of viders, and minimize the burdens the payment tioner, or other supplier with respect to non- the Senate that medicare beneficiary access to systems affected by this Act impose on both compliance with such a substantive change only quality care may be compromised if Congress beneficiaries and providers. for items and services furnished on or after the does not take action to prevent cuts in 2004 and (d) FEASIBILITY.—If the Secretary determines effective date of the change. the following years that result from the SGR that the two-thirds reduction in words by Octo- ‘‘(C)(i) Except as provided in clause (ii), a formula. ber 1, 2004 required in subsection (b)(1) is not substantive change may not take effect before feasible, he shall inform Congress in writing by TITLE V—MEDICARE APPEALS, REGU- the date that is the end of the 30-day period July 1, 2004 of the reasons for its unfeasibility. LATORY, AND CONTRACTING IMPROVE- that begins on the date that the Secretary has He shall then establish a feasible reduction to be MENTS issued or published, as the case may be, the sub- achieved by January 1, 2005. Subtitle A—Regulatory Reform stantive change. SEC. 501. RULES FOR THE PUBLICATION OF A ‘‘(ii) The Secretary may provide for a sub- Subtitle B—Appeals Process Reform FINAL REGULATION BASED ON THE stantive change to take effect on a date that SEC. 511. SUBMISSION OF PLAN FOR TRANSFER PREVIOUS PUBLICATION OF AN IN- precedes the end of the 30-day period under OF RESPONSIBILITY FOR MEDICARE TERIM FINAL REGULATION. clause (i) if the Secretary finds that waiver of APPEALS. (a) IN GENERAL.—Section 1871(a) (42 U.S.C. such 30-day period is necessary to comply with (a) SUBMISSION OF TRANSITION PLAN.— 1395hh(a)) is amended by adding at the end the statutory requirements or that the application of (1) IN GENERAL.—Not later than April 1, 2004, following new paragraph: such 30-day period is contrary to the public in- the Commissioner of Social Security and the ‘‘(3)(A) With respect to the publication of a terest. If the Secretary provides for an earlier ef- Secretary shall develop and transmit to Con- final regulation based on the previous publica- fective date pursuant to this clause, the Sec- gress and the Comptroller General of the United tion of an interim final regulation— retary shall include in the issuance or publica- States a plan under which the functions of ad- ‘‘(i) subject to subparagraph (B), the Sec- tion of the substantive change a finding de- ministrative law judges responsible for hearing retary shall publish the final regulation within scribed in the first sentence, and a brief state- cases under title XVIII of the Social Security the 12-month period that begins on the date of ment of the reasons for such finding.’’. Act (and related provisions in title XI of such publication of the interim final regulation; (2) EFFECTIVE DATE.—The amendment made Act) are transferred from the responsibility of ‘‘(ii) if a final regulation is not published by by paragraph (1) shall apply to compliance ac- the Commissioner and the Social Security Ad- the deadline established under this paragraph, tions undertaken on or after the date of enact- ministration to the Secretary and the Depart- the interim final regulation shall not continue ment of this Act. ment of Health and Human Services. in effect unless the Secretary publishes a notice SEC. 503. REPORT ON LEGAL AND REGULATORY (2) CONTENTS.—The plan shall include infor- described in subparagraph (B) by such deadline; INCONSISTENCIES. mation on the following: and Section 1871 (42 U.S.C. 1395hh), as amended (A) WORKLOAD.—The number of such admin- ‘‘(iii) the final regulation shall include re- by section 502(a)(1), is amended by adding at istrative law judges and support staff required sponses to comments submitted in response to the end the following new subsection: now and in the future to hear and decide such the interim final regulation. ‘‘(e)(1) Not later than 2 years after the date of cases in a timely manner, taking into account ‘‘(B) If the Secretary determines before the enactment of this subsection, and every 3 years the current and anticipated claims volume, ap- deadline otherwise established in this paragraph thereafter, the Secretary shall submit to Con- peals, number of beneficiaries, and statutory that there is good cause, specified in a notice gress a report with respect to the administration changes. published before such deadline, for delaying the of this title and areas of inconsistency or con- (B) COST PROJECTIONS AND FINANCING.—Fund- deadline otherwise applicable under this para- flict among the various provisions under law ing levels required for fiscal year 2005 and sub- graph, the deadline otherwise established under and regulation. sequent fiscal years to carry out the functions this paragraph shall be extended for such period ‘‘(2) In preparing a report under paragraph transferred under the plan and how such trans- (not to exceed 12 months) as the Secretary speci- (1), the Secretary shall collect— fer should be financed. fies in such notice.’’. ‘‘(A) information from beneficiaries, providers (C) TRANSITION TIMETABLE.—A timetable for (b) EFFECTIVE DATE.—The amendment made of services, physicians, practitioners, and other the transition. by subsection (a) shall take effect on the date of suppliers with respect to such areas of inconsist- (D) REGULATIONS.—The establishment of spe- enactment of this Act and shall apply to interim ency and conflict; and cific regulations to govern the appeals process.

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(E) CASE TRACKING.—The development of a cial review when a review entity (described in under subparagraph (A) shall have expedited unified case tracking system that will facilitate subparagraph (D)), on its own motion or at the access to judicial review under this subpara- the maintenance and transfer of case specific request of the appellant, determines that the De- graph in the same manner as providers of serv- data across both the fee-for-service and man- partmental Appeals Board does not have the au- ices, suppliers, and beneficiaries may obtain ex- aged care components of the medicare program. thority to decide the question of law or regula- pedited access to judicial review under the proc- (F) FEASIBILITY OF PRECEDENTIAL AUTHOR- tion relevant to the matters in controversy and ess established under section 1869(b)(2). Nothing ITY.—The feasibility of developing a process to that there is no material issue of fact in dispute. in this subparagraph shall be construed to af- give decisions of the Departmental Appeals The appellant may make such request only once fect the application of any remedy imposed Board in the Department of Health and Human with respect to a question of law or regulation under section 1819 during the pendency of an Services addressing broad legal issues binding, for a specific matter in dispute in a case of an appeal under this subparagraph.’’. precedential authority. appeal. (c) GAO STUDY AND REPORT ON ACCESS TO JU- (G) ACCESS TO ADMINISTRATIVE LAW JUDGES.— ‘‘(B) PROMPT DETERMINATIONS.—If, after or DICIAL REVIEW.— The feasibility of— coincident with appropriately filing a request (1) STUDY.—The Comptroller General of the (i) filing appeals with administrative law for an administrative hearing, the appellant re- United States shall conduct a study on the ac- judges electronically; and quests a determination by the appropriate recess of medicare beneficiaries and health care (ii) conducting hearings using tele- or video- view entity that the Departmental Appeals providers to judicial review of actions of the conference technologies. Board does not have the authority to decide the Secretary and the Department of Health and (H) INDEPENDENCE OF ADMINISTRATIVE LAW question of law or regulations relevant to the Human Services with respect to items and serv- JUDGES.—The steps that should be taken to en- matters in controversy and that there is no ma- ices under title XVIII of the Social Security Act sure the independence of administrative law terial issue of fact in dispute, and if such re- subsequent to February 29, 2000, the date of the judges, including ensuring that such judges are quest is accompanied by the documents and ma- decision of Shalala, Secretary of Health and in an office that is functionally and operation- terials as the appropriate review entity shall re- Human Services, et al. v. Illinois Council on ally separate from the Centers for Medicare & quire for purposes of making such determina- Long Term Care, Inc. (529 U.S. 1 (2000)). Medicaid Services and the Center for Medicare tion, such review entity shall make a determina- (2) REPORT.—Not later than 1 year after the Choices. tion on the request in writing within 60 days date of enactment of this Act, the Comptroller (I) GEOGRAPHIC DISTRIBUTION.—The steps that after the date such review entity receives the re- General shall submit to Congress a report on the should be taken to provide for an appropriate quest and such accompanying documents and study conducted under paragraph (1) together geographic distribution of administrative law materials. Such a determination by such review with such recommendations as the Comptroller judges throughout the United States to ensure entity shall be considered a final decision and General determines to be appropriate. timely access to such judges. not subject to review by the Secretary. (d) CONFORMING AMENDMENT.—Section (J) HIRING.—The steps that should be taken to ‘‘(C) ACCESS TO JUDICIAL REVIEW.— 1869(b)(1)(F)(ii) (42 U.S.C. 1395ff(b)(1)(F)(ii)) is hire administrative law judges (and support ‘‘(i) IN GENERAL.—If the appropriate review amended to read as follows: staff). entity— ‘‘(ii) REFERENCE TO EXPEDITED ACCESS TO JU- (K) PERFORMANCE STANDARDS.—The establish- ‘‘(I) determines that there are no material DICIAL REVIEW.—For the provision relating to ment of performance standards for administra- issues of fact in dispute and that the only issues expedited access to judicial review, see parative law judges with respect to timelines for de- to be adjudicated are ones of law or regulation graph (2).’’. cisions in cases under title XVIII of the Social that the Departmental Appeals Board does not (e) EFFECTIVE DATE.—The amendments made Security Act. have authority to decide; or by this section shall apply to appeals filed on or (L) SHARED RESOURCES.—The feasibility of the ‘‘(II) fails to make such determination within after October 1, 2004. Secretary entering into such arrangements with the period provided under subparagraph (B); then the appellant may bring a civil action as SEC. 513. EXPEDITED REVIEW OF CERTAIN PRO- the Commissioner of Social Security as may be VIDER AGREEMENT DETERMINA- appropriate with respect to transferred func- described in this subparagraph. TIONS. ‘‘(ii) DEADLINE FOR FILING.—Such action shall tions under the plan to share office space, sup- (a) TERMINATION AND CERTAIN OTHER IMME- be filed, in the case described in— port staff, and other resources, with appropriate DIATE REMEDIES.— ‘‘(I) clause (i)(I), within 60 days of the date of reimbursement. (1) IN GENERAL.—The Secretary shall develop the determination described in such clause; or (M) TRAINING.—The training that should be ‘‘(II) clause (i)(II), within 60 days of the end and implement a process to expedite proceedings provided to administrative law judges with re- of the period provided under subparagraph (B) under sections 1866(h) of the Social Security Act spect to laws and regulations under title XVIII for the determination. (42 U.S.C. 1395cc(h)) in which— of the Social Security Act. ‘‘(iii) VENUE.—Such action shall be brought in (A) the remedy of termination of participation (3) ADDITIONAL INFORMATION.—The plan may the district court of the United States for the ju- has been imposed; also include recommendations for further con- dicial district in which the appellant is located (B) a sanction described in clause (i) or (iii) of gressional action, including modifications to the (or, in the case of an action brought jointly by section 1819(h)(2)(B) of such Act (42 U.S.C. requirements and deadlines established under more than 1 applicant, the judicial district in 1395i–3(h)(2)(B)) has been imposed, but only if section 1869 of the Social Security Act (as which the greatest number of applicants are lo- such sanction has been imposed on an imme- amended by sections 521 and 522 of BIPA (114 cated) or in the District Court for the District of diate basis; or (C) the Secretary has required a skilled nurs- Stat. 2763A–534) and this Act). Columbia. (b) GAO EVALUATION.—The Comptroller Gen- ‘‘(iv) INTEREST ON ANY AMOUNTS IN CON- ing facility to suspend operations of a nurse eral of the United States shall— TROVERSY.—Where a provider of services or sup- aide training program. (1) evaluate the plan submitted under sub- plier is granted judicial review pursuant to this (2) PRIORITY FOR CASES OF TERMINATION.— section (a); and paragraph, the amount in controversy (if any) Under the process described in paragraph (1), (2) not later than 6 months after such submis- shall be subject to annual interest beginning on priority shall be provided in cases of termination sion, submit to Congress, the Commissioner of the first day of the first month beginning after described in subparagraph (A) of such para- Social Security, and the Secretary a report on the 60-day period as determined pursuant to graph. (b) INCREASED FINANCIAL SUPPORT.—In addi- such evaluation. clause (ii) and equal to the rate of interest on tion to any amounts otherwise appropriated, to (c) SUBMISSION OF GAO REPORT REQUIRED obligations issued for purchase by the Federal reduce by 50 percent the average time for admin- BEFORE PLAN IMPLEMENTATION.—The Commis- Supplementary Medical Insurance Trust Fund istrative determinations on appeals under sec- sioner of Social Security and the Secretary may for the month in which the civil action author- tion 1866(h) of the Social Security Act (42 U.S.C. not implement the plan developed under sub- ized under this paragraph is commenced, to be 1395cc(h)), there are authorized to be appro- section (a) before the date that is 6 months after awarded by the reviewing court in favor of the priated (in appropriate part from the Federal the date the report required under subsection prevailing party. No interest awarded pursuant Hospital Insurance Trust Fund and the Federal (b)(2) is submitted to the Commissioner and the to the preceding sentence shall be deemed in- Supplementary Medical Insurance Trust Fund) Secretary. come or cost for the purposes of determining re- to the Secretary such sums for fiscal year 2004 SEC. 512. EXPEDITED ACCESS TO JUDICIAL RE- imbursement due providers of services, physi- and each subsequent fiscal year as may be nec- VIEW. cians, practitioners, and other suppliers under essary to increase the number of administrative (a) IN GENERAL.—Section 1869(b) (42 U.S.C. this Act. 1395ff(b)) is amended— (D) REVIEW ENTITY DEFINED.—For purposes of law judges (and their staffs) at the Depart- (1) in paragraph (1)(A), by inserting ‘‘, subject this subsection, the term ‘review entity’ means mental Appeals Board of the Department of to paragraph (2),’’ before ‘‘to judicial review of an entity of up to 3 qualified reviewers drawn Health and Human Services and to educate such the Secretary’s final decision’’; and from existing appeals levels other than the rede- judges and staff on long-term care issues. (2) by adding at the end the following new termination level. SEC. 514. REVISIONS TO MEDICARE APPEALS paragraph: (b) APPLICATION TO PROVIDER AGREEMENT PROCESS. ‘‘(2) EXPEDITED ACCESS TO JUDICIAL REVIEW.— DETERMINATIONS.—Section 1866(h)(1) (42 U.S.C. (a) TIMEFRAMES FOR THE COMPLETION OF THE ‘‘(A) IN GENERAL.—The Secretary shall estab- 1395cc(h)(1)) is amended— RECORD.—Section 1869(b) (42 U.S.C. 1395ff(b)), lish a process under which a provider of services (1) by inserting ‘‘(A)’’ after ‘‘(h)(1)’’; and as amended by section 512(a)(2), is amended by or supplier that furnishes an item or service or (2) by adding at the end the following new adding at the end the following new paragraph: a beneficiary who has filed an appeal under subparagraph: ‘‘(3) TIMELY COMPLETION OF THE RECORD.— paragraph (1) (other than an appeal filed under ‘‘(B) An institution or agency described in ‘‘(A) DEADLINE.—Subject to subparagraph paragraph (1)(F)(i)) may obtain access to judi- subparagraph (A) that has filed for a hearing (B), the deadline to complete the record in a

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00099 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8968 CONGRESSIONAL RECORD — SENATE July 7, 2003 hearing before an administrative law judge or a nation of the medical or scientific rationale for (A) by amending subsection (c)(3)(D) to read review by the Departmental Appeals Board is 90 the decision.’’. as follows: days after the date the request for the review or (3) APPEALS.—Section 1869(d) (42 U.S.C. ‘‘(D) QUALIFICATIONS OF REVIEWERS.—The re- hearing is filed. 1395ff(d)) is amended— quirements of subsection (g) shall be met (relat- ‘‘(B) EXTENSIONS FOR GOOD CAUSE.—The per- (A) in the heading, by inserting ‘‘; NOTICE’’ ing to qualifications of reviewing profes- son filing a request under subparagraph (A) after ‘‘SECRETARY’’; and sionals).’’; and may request an extension of such deadline for (B) by adding at the end the following new (B) by adding at the end the following new good cause. The administrative law judge, in paragraph: subsection: the case of a hearing, and the Departmental Ap- ‘‘(4) NOTICE.—Notice of the decision of an ad- ‘‘(g) QUALIFICATIONS OF REVIEWERS.— peals Board, in the case of a review, may extend ministrative law judge shall be in writing in a ‘‘(1) IN GENERAL.—In reviewing determina- such deadline based upon a finding of good manner to be understood by the beneficiary and tions under this section, a qualified independent cause to a date specified by the judge or Board, shall include— contractor shall assure that— as the case may be. ‘‘(A) the specific reasons for the determination ‘‘(A) each individual conducting a review ‘‘(C) DELAY IN DECISION DEADLINES UNTIL (including, to the extent appropriate, a sum- shall meet the qualifications of paragraph (2); COMPLETION OF RECORD.—Notwithstanding any mary of the clinical or scientific evidence used ‘‘(B) compensation provided by the contractor other provision of this section, the deadlines in making the determination); to each such reviewer is consistent with para- otherwise established under subsection (d) for ‘‘(B) the procedures for obtaining additional graph (3); and ‘‘(C) in the case of a review by a panel de- the making of determinations in hearings or re- information concerning the decision; and scribed in subsection (c)(3)(B) composed of phy- view under this section are 90 days after the ‘‘(C) notification of the right to appeal the de- sicians or other health care professionals (each date on which the record is complete. cision and instructions on how to initiate such in this subsection referred to as a ‘reviewing ‘‘(D) COMPLETE RECORD DESCRIBED.—For pur- an appeal under this section.’’. poses of this paragraph, a record is complete (4) PREPARATION OF RECORD FOR APPEAL.— professional’), each reviewing professional meets when the administrative law judge, in the case Section 1869(c)(3)(J) (42 U.S.C. 1395ff(c)(3)(J)) is the qualifications described in paragraph (4). ‘‘(2) INDEPENDENCE.— of a hearing, or the Departmental Appeals amended by striking ‘‘such information as is re- ‘‘(A) IN GENERAL.—Subject to subparagraph Board, in the case of a review, has received— quired for an appeal’’ and inserting ‘‘the record (B), each individual conducting a review in a ‘‘(i) written or testimonial evidence, or both, for the appeal’’. (d) QUALIFIED INDEPENDENT CONTRACTORS.— case shall— submitted by the person filing the request, ‘‘(i) not be a related party (as defined in para- ‘‘(ii) written or oral argument, or both, (1) ELIGIBILITY REQUIREMENTS OF QUALIFIED graph (5)); INDEPENDENT CONTRACTORS.—Section 1869(c) (42 ‘‘(iii) the decision of, and the record for, the ‘‘(ii) not have a material familial, financial, or U.S.C. 1395ff(c)) is amended— prior level of appeal, and professional relationship with such a party in ‘‘(iv) such other evidence as such judge or (A) in paragraph (2)— (i) by inserting ‘‘(except in the case of a utili- the case under review; and Board, as the case may be, determines is re- ‘‘(iii) not otherwise have a conflict of interest zation and quality control peer review organiza- quired to make a determination on the re- with such a party (as determined under regulation, as defined in section 1152)’’ after ‘‘means quest.’’. tions). an entity or organization that’’; and (b) USE OF PATIENTS’ MEDICAL RECORDS.— ‘‘(B) EXCEPTION.—Nothing in subparagraph (ii) by striking the period at the end and in- Section 1869(c)(3)(B)(i) (42 U.S.C. (A) shall be construed to— 1395ff(c)(3)(B)(i)) is amended by inserting ‘‘(inserting the following: ‘‘and meets the following ‘‘(i) prohibit an individual, solely on the basis cluding the medical records of the individual in- requirements: of affiliation with a fiscal intermediary, carrier, ‘‘(A) GENERAL REQUIREMENTS.— volved)’’ after ‘‘clinical experience’’. or other contractor, from serving as a reviewing ‘‘(i) The entity or organization has (directly (c) NOTICE REQUIREMENTS FOR MEDICARE AP- professional if— PEALS.— or through contracts or other arrangements) ‘‘(I) a nonaffiliated individual is not reason- (1) INITIAL DETERMINATIONS AND REDETER- sufficient medical, legal, and other expertise (in- ably available; MINATIONS.—Section 1869(a) (42 U.S.C. 1395ff(a)) cluding knowledge of the program under this ‘‘(II) the affiliated individual is not involved is amended by adding at the end the following title) and sufficient staffing to carry out duties in the provision of items or services in the case new paragraph: of a qualified independent contractor under this under review; ‘‘(4) REQUIREMENTS OF NOTICE OF DETERMINA- section on a timely basis. ‘‘(III) the fact of such an affiliation is dis- TIONS AND REDETERMINATIONS.—A written notice ‘‘(ii) The entity or organization has provided closed to the Secretary and the beneficiary (or of a determination on an initial determination assurances that it will conduct activities con- authorized representative) and neither party ob- or on a redetermination, insofar as such deter- sistent with the applicable requirements of this jects; and mination or redetermination results in a denial section, including that it will not conduct any ‘‘(IV) the affiliated individual is not an em- of a claim for benefits, shall be provided in activities in a case unless the independence re- ployee of the intermediary, carrier, or contractor printed form and written in a manner to be un- quirements of subparagraph (B) are met with re- and does not provide services exclusively or pri- derstood by the beneficiary and shall include— spect to the case. marily to or on behalf of such intermediary, car- ‘‘(A) the reasons for the determination, in- ‘‘(iii) The entity or organization meets such rier, or contractor; cluding, as appropriate— other requirements as the Secretary provides by ‘‘(ii) prohibit an individual who has staff ‘‘(i) upon request in the case of an initial de- regulation. privileges at the institution where the treatment termination, the provision of the policy, man- ‘‘(B) INDEPENDENCE REQUIREMENTS.— involved takes place from serving as a reviewer ual, or regulation that resulted in the denial; ‘‘(i) IN GENERAL.—Subject to clause (ii), an en- merely on the basis of such affiliation if the af- and tity or organization meets the independence re- filiation is disclosed to the Secretary and the ‘‘(ii) in the case of a redetermination, a sum- quirements of this subparagraph with respect to beneficiary (or authorized representative), and mary of the clinical or scientific evidence used any case if the entity— neither party objects; or in making the determination (as appropriate); ‘‘(I) is not a related party (as defined in sub- ‘‘(iii) prohibit receipt of compensation by a re- ‘‘(B) the procedures for obtaining additional section (g)(5)); viewing professional from a contractor if the information concerning the determination or re- ‘‘(II) does not have a material familial, finan- compensation is provided consistent with para- determination; and cial, or professional relationship with such a graph (3). ‘‘(C) notification of the right to seek a redeter- party in relation to such case; and ‘‘(3) LIMITATIONS ON REVIEWER COMPENSA- mination or otherwise appeal the determination ‘‘(III) does not otherwise have a conflict of in- TION.—Compensation provided by a qualified and instructions on how to initiate such a rede- terest with such a party (as determined under independent contractor to a reviewer in connec- termination or appeal under this section.’’. regulations). tion with a review under this section shall not (2) RECONSIDERATIONS.—Section 1869(c)(3)(E) ‘‘(ii) EXCEPTION FOR COMPENSATION.—Nothing be contingent on the decision rendered by the (42 U.S.C. 1395ff(c)(3)(E)) is amended to read as in clause (i) shall be construed to prohibit re- reviewer. follows: ceipt by a qualified independent contractor of ‘‘(4) LICENSURE AND EXPERTISE.—Each review- ‘‘(E) EXPLANATION OF DECISION.—Any deci- compensation from the Secretary for the conduct ing professional shall be a physician (allopathic sion with respect to a reconsideration of a quali- of activities under this section if the compensa- or osteopathic) or health care professional fied independent contractor shall be in writing tion is provided consistent with clause (iii). who— in a manner to be understood by the beneficiary ‘‘(iii) LIMITATIONS ON ENTITY COMPENSA- ‘‘(A) is appropriately credentialed or licensed and shall include— TION.—Compensation provided by the Secretary in 1 or more States to deliver health care serv- ‘‘(i) to the extent appropriate, a detailed ex- to a qualified independent contractor in connec- ices; and planation of the decision as well as a discussion tion with reviews under this section shall not be ‘‘(B) has medical expertise in the field of prac- of the pertinent facts and applicable regulations contingent on any decision rendered by the con- tice that is appropriate for the items or services applied in making such decision; tractor or by any reviewing professional.’’; and at issue. ‘‘(ii) a notification of the right to appeal such (B) in paragraph (3)(A), by striking ‘‘, and ‘‘(5) RELATED PARTY DEFINED.—For purposes determination and instructions on how to ini- shall have sufficient training and expertise in of this section, the term ‘related party’ means, tiate such appeal under this section; and medical science and legal matters to make recon- with respect to a case under this title involving ‘‘(iii) in the case of a determination of wheth- siderations under this subsection’’. an individual beneficiary, any of the following: er an item or service is reasonable and necessary (2) ELIGIBILITY REQUIREMENTS FOR REVIEW- ‘‘(A) The Secretary, the medicare administra- for the diagnosis or treatment of illness or in- ERS.—Section 1869 (42 U.S.C. 1395ff) is amend- tive contractor involved, or any fiduciary, offi- jury (under section 1862(a)(1)(A)) an expla- ed— cer, director, or employee of the Department of

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00100 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8969 Health and Human Services, or of such con- denial and a deadline for consideration of such pursuant to paragraph (4)(A), require a fiscal tractor. appeals.’’. intermediary, carrier, or program safeguard con- ‘‘(B) The individual (or authorized represent- (2) EFFECTIVE DATE.—The Secretary shall pro- tractor to make or revise a local coverage deter- ative). vide for the establishment of the procedures mination under this section with respect to an ‘‘(C) The health care professional that pro- under the amendment made by paragraph (1) item or service. vides the items or services involved in the case. within 18 months after the date of enactment of ‘‘(3) REQUEST REQUIREMENTS.—Under the ‘‘(D) The institution at which the items or this Act. process established under paragraph (1), by not services (or treatment) involved in the case are (b) CONSULTATION BEFORE CHANGING PRO- later than 30 days after the date on which a provided. VIDER ENROLLMENT FORMS.—Section 1871 (42 provider local coverage determination request is ‘‘(E) The manufacturer of any drug or other U.S.C. 1395hh), as amended by sections 502 and filed under paragraph (1), the Secretary shall item that is included in the items or services in- 503, is amended by adding at the end the fol- determine whether such request establishes volved in the case. lowing new subsection: that— ‘‘(F) Any other party determined under any ‘‘(f) The Secretary shall consult with pro- ‘‘(A) there have been at least 5 reversals of re- regulations to have a substantial interest in the viders of services, physicians, practitioners, and determinations made by a fiscal intermediary or case involved.’’. suppliers before making changes in the provider carrier after a hearing before an administrative (3) NUMBER OF QUALIFIED INDEPENDENT CON- enrollment forms required of such providers, law judge on claims submitted by the provider in TRACTORS.—Section 1869(c)(4) (42 U.S.C. physicians, practitioners, and suppliers to be el- at least 2 different cases before an administra- 1395ff(c)(4)) is amended by striking ‘‘12’’ and in- igible to submit claims for which payment may tive law judge; serting ‘‘4’’. be made under this title.’’. ‘‘(B) each reversal described in subparagraph (e) IMPLEMENTATION OF CERTAIN BIPA RE- SEC. 516. APPEALS BY PROVIDERS WHEN THERE (A) involves substantially similar material facts; FORMS.— IS NO OTHER PARTY AVAILABLE. ‘‘(C) each reversal described in subparagraph (1) DELAY IN CERTAIN BIPA REFORMS.—Section (a) IN GENERAL.—Section 1870 (42 U.S.C. (A) involves the same medical necessity issue; 521(d) of BIPA (114 Stat. 2763A–543) is amended 1395gg) is amended by adding at the end the fol- and to read as follows: lowing new subsection: ‘‘(D) at least 50 percent of the total number of ‘‘(d) EFFECTIVE DATE.— ‘‘(h) Notwithstanding subsection (f) or any claims submitted by such provider within the ‘‘(1) IN GENERAL.—Except as specified in para- other provision of law, the Secretary shall per- past year involving the substantially similar ma- graph (2), the amendments made by this section mit a provider of services, physician, practi- terial facts described in subparagraph (B) and shall apply with respect to initial determina- tioner, or other supplier to appeal any deter- the same medical necessity issue described in tions made on or after December 1, 2004. mination of the Secretary under this title relat- subparagraph (C) have been denied and have ‘‘(2) EXPEDITED PROCEEDINGS AND RECONSID- ing to services rendered under this title to an in- been reversed by an administrative law judge. ERATION REQUIREMENTS.—For the following pro- dividual who subsequently dies if there is no ‘‘(4) APPROVAL OR REJECTION OF REQUEST.— visions, the amendments made by subsection (a) other party available to appeal such determina- ‘‘(A) APPROVAL OF REQUEST.—If the Secretary shall apply with respect to initial determination.’’. determines that subparagraphs (A) through (D) tions made on or after October 1, 2003: (b) EFFECTIVE DATE.—The amendment made of paragraph (3) have been satisfied, the Sec- ‘‘(A) Subsection (b)(1)(F)(i) of section 1869 of by subsection (a) shall take effect on the date of retary shall require the fiscal intermediary, car- the Social Security Act. enactment of this Act and shall apply to items rier, or program safeguard contractor identified ‘‘(B) Subsection (c)(3)(C)(iii) of such section. and services furnished on or after such date. in the provider local coverage determination re- ‘‘(C) Subsection (c)(3)(C)(iv) of such section to SEC. 517. PROVIDER ACCESS TO REVIEW OF quest, to make or revise a local coverage deter- the extent that it applies to expedited reconsid- LOCAL COVERAGE DETERMINA- mination with respect to the item or service that erations under subsection (c)(3)(C)(iii) of such TIONS. is the subject of the request not later than the section. (a) PROVIDER ACCESS TO REVIEW OF LOCAL date that is 210 days after the date on which the ‘‘(3) TRANSITIONAL USE OF PEER REVIEW ORGA- COVERAGE DETERMINATIONS.—Section 1869(f)(5) Secretary makes the determination. Such fiscal NIZATIONS TO CONDUCT EXPEDITED RECONSIDER- (42 U.S.C. 1395ff(f)(5)) is amended to read as fol- intermediary, carrier, or program safeguard con- ATIONS UNTIL QICS ARE OPERATIONAL.—Expe- lows: tractor shall retain the discretion to determine dited reconsiderations of initial determinations ‘‘(5) AGGRIEVED PARTY DEFINED.—In this sec- whether or not, and/or the circumstances under under section 1869(c)(3)(C)(iii) of the Social Se- tion, the term ‘aggrieved party’ means— which, to cover the item or service for which a curity Act shall be made by peer review organi- ‘‘(A) with respect to a national coverage de- local coverage determination is requested. Noth- zations until qualified independent contractors termination, an individual entitled to benefits ing in this subsection shall be construed to re- are available for such expedited reconsider- under part A, or enrolled under part B, or both, quire a fiscal intermediary, carrier or program ations.’’. who is in need of the items or services that are safeguard contractor to develop a local coverage (2) CONFORMING AMENDMENTS.—Section 521(c) the subject of the coverage determination; and determination that is inconsistent with any na- of BIPA (114 Stat. 2763A–543) and section ‘‘(B) with respect to a local coverage deter- tional coverage determination, or any coverage 1869(c)(3)(C)(iii)(III) of the Social Security Act mination— provision in this title or in regulation, manual, (42 U.S.C. 1395ff(c)(3)(C)(iii)(III)), as added by ‘‘(i) an individual who is entitled to benefits or interpretive guidance of the Secretary. section 521 of BIPA, are repealed. under part A, or enrolled under part B, or both, ‘‘(B) REJECTION OF REQUEST.—If the Secretary (f) EFFECTIVE DATE.—The amendments made who is adversely affected by such a determina- determines that subparagraphs (A) through (D) by this section shall be effective as if included in tion; or of paragraph (3) have not been satisfied, the the enactment of the respective provisions of ‘‘(ii) a provider of services, physician, practi- Secretary shall reject the provider local coverage subtitle C of title V of BIPA, 114 Stat. 2763A– tioner, or supplier that is adversely affected by determination request and shall notify the pro- 534. such a determination.’’. vider of services, physician, practitioner, or sup- (g) TRANSITION.—In applying section 1869(g) (b) CLARIFICATION OF LOCAL COVERAGE DE- plier that filed the request of the reason for such of the Social Security Act (as added by sub- TERMINATION DEFINITION.—Section 1869(f)(2)(B) rejection and no further proceedings in relation section (d)(2)), any reference to a medicare ad- (42 U.S.C. 1395ff(f)(2)(B)) is amended by insert- to such request shall be conducted.’’. ministrative contractor shall be deemed to in- ing ‘‘, including, where appropriate, the specific (d) STUDY AND REPORT ON THE USE OF CON- clude a reference to a fiscal intermediary under requirements and clinical indications relating to TRACTORS TO MONITOR MEDICARE APPEALS.— section 1816 of the Social Security Act (42 U.S.C. the medical necessity of an item or service’’ be- (1) STUDY.—The Secretary shall conduct a 1395h) and a carrier under section 1842 of such fore the period at the end. study on the feasibility and advisability of re- Act (42 U.S.C. 1395u). (c) REQUEST FOR LOCAL COVERAGE DETER- quiring fiscal intermediaries and carriers to MINATIONS BY PROVIDERS.—Section 1869 (42 monitor and track— SEC. 515. HEARING RIGHTS RELATED TO DECI- SIONS BY THE SECRETARY TO DENY U.S.C. 1395ff), as amended by section (A) the subject matter and status of claims de- OR NOT RENEW A MEDICARE EN- 514(d)(2)(B), is amended by adding at the end nied by the fiscal intermediary or carrier (as ap- ROLLMENT AGREEMENT; CONSULTA- the following new subsection: plicable) that are appealed under section 1869 of TION BEFORE CHANGING PROVIDER ‘‘(h) REQUEST FOR LOCAL COVERAGE DETER- the Social Security Act (42 U.S.C. 1395ff), as ENROLLMENT FORMS. MINATIONS BY PROVIDERS.— added by section 522 of BIPA (114 Stat. 2763A– (a) HEARING RIGHTS.— ‘‘(1) ESTABLISHMENT OF PROCESS.—The Sec- 543) and amended by this Act; and (1) IN GENERAL.—Section 1866 (42 U.S.C. retary shall establish a process under which a (B) any final determination made with respect 1395cc) is amended by adding at the end the fol- provider of services, physician, practitioner, or to such claims. lowing new subsection: supplier who certifies that they meet the re- (2) REPORT.—Not later than the date that is 1 ‘‘(j) HEARING RIGHTS IN CASES OF DENIAL OR quirements established in paragraph (3) may re- year after the date of enactment of this Act, the NONRENEWAL.—The Secretary shall establish by quest a local coverage determination in accord- Secretary shall submit to Congress a report on regulation procedures under which— ance with the succeeding provisions of this sub- the study conducted under paragraph (1) to- ‘‘(1) there are deadlines for actions on appli- section. gether with such recommendations for legisla- cations for enrollment (and, if applicable, re- ‘‘(2) PROVIDER LOCAL COVERAGE DETERMINA- tion and administrative action as the Commis- newal of enrollment); and TION REQUEST DEFINED.—In this subsection, the sion determines appropriate. ‘‘(2) providers of services, physicians, practi- term ‘provider local coverage determination re- (e) AUTHORIZATION OF APPROPRIATIONS.— tioners, and suppliers whose application to en- quest’ means a request, filed with the Secretary, There are authorized to be appropriated such roll (or, if applicable, to renew enrollment) are at such time and in such form and manner as sums as are necessary to carry out the amend- denied are provided a mechanism to appeal such the Secretary may specify, that the Secretary, ments made by subsections (a), (b), and (c).

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(f) EFFECTIVE DATES.— tion, or other person with a contract under this with a specific requirement of this title, the Fed- (1) PROVIDER ACCESS TO REVIEW OF LOCAL section. eral Acquisition Regulation applies to contracts COVERAGE DETERMINATIONS.—The amendments ‘‘(B) APPROPRIATE MEDICARE ADMINISTRATIVE under this title. made by subsections (a) and (b) shall apply to— CONTRACTOR.—With respect to the performance ‘‘(b) CONTRACTING REQUIREMENTS.— (A) any review of any local coverage deter- of a particular function in relation to an indi- ‘‘(1) USE OF COMPETITIVE PROCEDURES.— mination filed on or after October 1, 2003; vidual entitled to benefits under part A or en- ‘‘(A) IN GENERAL.—Except as provided in laws (B) any request to make such a determination rolled under part B, or both, a specific provider with general applicability to Federal acquisition made on or after such date; or of services, physician, practitioner, facility, or and procurement, the Federal Acquisition Regu- (C) any local coverage determination made on supplier (or class of such providers of services, lation, or in subparagraph (B), the Secretary or after such date. physicians, practitioners, facilities, or sup- shall use competitive procedures when entering (2) PROVIDER LOCAL COVERAGE DETERMINA- pliers), the ‘appropriate’ medicare administra- into contracts with medicare administrative con- TION REQUESTS.—The amendment made by sub- tive contractor is the medicare administrative tractors under this section. section (c) shall apply with respect to provider contractor that has a contract under this sec- ‘‘(B) RENEWAL OF CONTRACTS.—The Secretary local coverage determination requests (as de- tion with respect to the performance of that may renew a contract with a medicare adminis- fined in section 1869(h)(2) of the Social Security function in relation to that individual, provider trative contractor under this section from term Act, as added by subsection (c)) filed on or after of services, physician, practitioner, facility, or to term without regard to section 5 of title 41, the date of enactment of this Act. supplier or class of provider of services, physi- United States Code, or any other provision of SEC. 518. REVISIONS TO APPEALS TIMEFRAMES. cian, practitioner, facility, or supplier. law requiring competition, if the medicare ad- Section 1869 (42 U.S.C. 1395ff) is amended— ‘‘(4) FUNCTIONS DESCRIBED.—The functions re- ministrative contractor has met or exceeded the (1) in subsection (a)(3)(C)(ii), by striking ‘‘30- ferred to in paragraphs (1) and (2) are payment performance requirements applicable with re- day period’’ each place it appears and inserting functions (including the function of developing spect to the contract and contractor, except that ‘‘60-day period’’; local coverage determinations, as defined in sec- the Secretary shall provide for the application (2) in subsection (c)(3)(C)(i), by striking ‘‘30- tion 1869(f)(2)(B)), provider services functions, of competitive procedures under such a contract day period’’ and inserting ‘‘60-day period’’; and beneficiary services functions as follows: not less frequently than once every 6 years. (3) in subsection (d)(1)(A), by striking ‘‘90-day ‘‘(A) DETERMINATION OF PAYMENT AMOUNTS.— ‘‘(C) TRANSFER OF FUNCTIONS.—The Secretary period’’ and inserting ‘‘120-day period’’; and Determining (subject to the provisions of section may transfer functions among medicare admin- (4) in subsection (d)(2)(A), by striking ‘‘90-day 1878 and to such review by the Secretary as may istrative contractors without regard to any pro- period’’ and inserting ‘‘120-day period’’. be provided for by the contracts) the amount of vision of law requiring competition. The Sec- SEC. 519. ELIMINATION OF REQUIREMENT TO USE the payments required pursuant to this title to retary shall ensure that performance quality is SOCIAL SECURITY ADMINISTRATION be made to providers of services, physicians, considered in such transfers. The Secretary ADMINISTRATIVE LAW JUDGES. practitioners, facilities, suppliers, and individ- shall provide notice (whether in the Federal The first sentence of section 1869(f)(2)(A)(i) (42 uals. Register or otherwise) of any such transfer (in- U.S.C. 1395ff(f)(2)(A)(i)) is amended by striking ‘‘(B) MAKING PAYMENTS.—Making payments cluding a description of the functions so trans- ‘‘of the Social Security Administration’’. described in subparagraph (A) (including referred and contact information for the contrac- SEC. 520. ELIMINATION OF REQUIREMENT FOR ceipt, disbursement, and accounting for funds in tors involved) to providers of services, physi- DE NOVO REVIEW BY THE DEPART- making such payments). cians, practitioners, facilities, and suppliers af- MENTAL APPEALS BOARD. ‘‘(C) BENEFICIARY EDUCATION AND ASSIST- fected by the transfer. Section 1869(d)(2) (42 U.S.C. 1395ff(d)(2)) is ANCE.—Serving as a center for, and commu- ‘‘(D) INCENTIVES FOR QUALITY.—The Secretary amended to read as follows: nicating to individuals entitled to benefits under may provide incentives for medicare administra- ‘‘(2) DEPARTMENTAL APPEALS BOARD RE- part A or enrolled under part B, or both, with tive contractors to provide quality service and to VIEW.—The Departmental Appeals Board of the respect to education and outreach for those in- promote efficiency. Department of Health and Human Services shall dividuals, and assistance with specific issues, ‘‘(2) COMPLIANCE WITH REQUIREMENTS.—No conduct and conclude a review of the decision concerns, or problems of those individuals. contract under this section shall be entered into on a hearing described in paragraph (1) and ‘‘(D) PROVIDER CONSULTATIVE SERVICES.—Pro- with any medicare administrative contractor make a decision or remand the case to the ad- viding consultative services to institutions, unless the Secretary finds that such medicare ministrative law judge for reconsideration by agencies, and other persons to enable them to administrative contractor will perform its obli- not later than the end of the 90-day period be- establish and maintain fiscal records necessary gations under the contract efficiently and effec- ginning on the date a request for review has for purposes of this title and otherwise to qual- tively and will meet such requirements as to fi- been timely filed.’’. ify as providers of services, physicians, practi- nancial responsibility, legal authority, and tioners, facilities, or suppliers. other matters as the Secretary finds pertinent. Subtitle C—Contracting Reform ‘‘(E) COMMUNICATION WITH PROVIDERS.—Serv- ‘‘(3) PERFORMANCE REQUIREMENTS.— SEC. 521. INCREASED FLEXIBILITY IN MEDICARE ing as a center for, and communicating to pro- ‘‘(A) DEVELOPMENT OF SPECIFIC PERFORMANCE ADMINISTRATION. viders of services, physicians, practitioners, fa- REQUIREMENTS.—The Secretary shall develop (a) CONSOLIDATION AND FLEXIBILITY IN MEDI- cilities, and suppliers, any information or in- contract performance requirements to carry out CARE ADMINISTRATION.— structions furnished to the medicare administra- the specific requirements applicable under this (1) IN GENERAL.—Title XVIII is amended by tive contractor by the Secretary, and serving as title to a function described in subsection (a)(4) inserting after section 1874 the following new a channel of communication from such pro- and shall develop standards for measuring the section: viders, physicians, practitioners, facilities, and extent to which a contractor has met such re- ‘‘CONTRACTS WITH MEDICARE ADMINISTRATIVE suppliers to the Secretary. quirements. In developing such performance re- CONTRACTORS ‘‘(F) PROVIDER EDUCATION AND TECHNICAL AS- quirements and standards for measurement, the ‘‘SEC. 1874A. (a) AUTHORITY.— SISTANCE.—Performing the functions described Secretary shall consult with providers of serv- ‘‘(1) AUTHORITY TO ENTER INTO CONTRACTS.— in subsections (e) and (f), relating to education, ices, organizations representative of bene- The Secretary may enter into contracts with training, and technical assistance to providers ficiaries under this title, and organizations and any eligible entity to serve as a medicare admin- of services, physicians, practitioners, facilities, agencies performing functions necessary to istrative contractor with respect to the perform- and suppliers. carry out the purposes of this section with re- ance of any or all of the functions described in ‘‘(G) ADDITIONAL FUNCTIONS.—Performing spect to such performance requirements. The paragraph (4) or parts of those functions (or, to such other functions, including (subject to para- Secretary shall make such performance require- the extent provided in a contract, to secure per- graph (5)) functions under the Medicare Integ- ments and measurement standards available to formance thereof by other entities). rity Program under section 1893, as are nec- the public. ‘‘(2) ELIGIBILITY OF ENTITIES.—An entity is el- essary to carry out the purposes of this title. ‘‘(B) CONSIDERATIONS.—The Secretary shall igible to enter into a contract with respect to the ‘‘(5) RELATIONSHIP TO MIP CONTRACTS.— include, as 1 of the standards, provider and ben- performance of a particular function described ‘‘(A) NONDUPLICATION OF ACTIVITIES.—In en- eficiary satisfaction levels. in paragraph (4) only if— tering into contracts under this section, the Sec- ‘‘(C) INCLUSION IN CONTRACTS.—All contractor ‘‘(A) the entity has demonstrated capability to retary shall assure that activities of medicare performance requirements shall be set forth in carry out such function; administrative contractors do not duplicate ac- the contract between the Secretary and the ap- ‘‘(B) the entity complies with such conflict of tivities carried out under contracts entered into propriate medicare administrative contractor. interest standards as are generally applicable to under the Medicare Integrity Program under Such performance requirements— Federal acquisition and procurement; section 1893. The previous sentence shall not ‘‘(i) shall reflect the performance requirements ‘‘(C) the entity has sufficient assets to finan- apply with respect to the activity described in published under subparagraph (A), but may in- cially support the performance of such function; section 1893(b)(5) (relating to prior authoriza- clude additional performance requirements; and tion of certain items of durable medical equip- ‘‘(ii) shall be used for evaluating contractor ‘‘(D) the entity meets such other requirements ment under section 1834(a)(15)). performance under the contract; and as the Secretary may impose. ‘‘(B) CONSTRUCTION.—An entity shall not be ‘‘(iii) shall be consistent with the written ‘‘(3) MEDICARE ADMINISTRATIVE CONTRACTOR treated as a medicare administrative contractor statement of work provided under the contract. DEFINED.—For purposes of this title and title merely by reason of having entered into a con- ‘‘(4) INFORMATION REQUIREMENTS.—The Sec- XI— tract with the Secretary under section 1893. retary shall not enter into a contract with a ‘‘(A) IN GENERAL.—The term ‘medicare admin- ‘‘(6) APPLICATION OF FEDERAL ACQUISITION medicare administrative contractor under this istrative contractor’ means an agency, organiza- REGULATION.—Except to the extent inconsistent section unless the contractor agrees—

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00102 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8971 ‘‘(A) to furnish to the Secretary such timely limit liability for conduct that would constitute (B) by striking ‘‘such agency or organization’’ information and reports as the Secretary may a violation of sections 3729 through 3731 of title and inserting ‘‘such medicare administrative find necessary in performing his functions 31, United States Code (commonly known as the contractor’’ each place it appears. under this title; and ‘‘False Claims Act’’). (7) Subsection (l) is repealed. ‘‘(B) to maintain such records and afford such ‘‘(5) INDEMNIFICATION BY SECRETARY.— (c) CONFORMING AMENDMENTS TO SECTION access thereto as the Secretary finds necessary ‘‘(A) IN GENERAL.—Notwithstanding any other 1842 (RELATING TO CARRIERS).—Section 1842 (42 to assure the correctness and verification of the provision of law and subject to the succeeding U.S.C. 1395u) is amended as follows: information and reports under subparagraph provisions of this paragraph, in the case of a (1) The heading is amended to read as follows: (A) and otherwise to carry out the purposes of medicare administrative contractor (or a person ‘‘PROVISIONS RELATING TO THE ADMINISTRATION this title. who is a director, officer, or employee of such a OF PART B’’. ‘‘(5) SURETY BOND.—A contract with a medi- contractor or who is engaged by the contractor (2) Subsection (a) is amended to read as fol- care administrative contractor under this sec- to participate directly in the claims administration may require the medicare administrative lows: tion process) who is made a party to any judi- ‘‘(a) The administration of this part shall be contractor, and any of its officers or employees cial or administrative proceeding arising from, certifying payments or disbursing funds pursu- conducted through contracts with medicare ad- or relating directly to, the claims administration ministrative contractors under section 1874A.’’. ant to the contract, or otherwise participating process under this title, the Secretary may, to in carrying out the contract, to give surety bond (3) Subsection (b) is amended— the extent specified in the contract with the (A) by striking paragraph (1); to the United States in such amount as the Sec- contractor, indemnify the contractor (and such retary may deem appropriate. (B) in paragraph (2)— persons). (i) by striking subparagraphs (A) and (B); ‘‘(6) RETAINING DIVERSITY OF LOCAL COVERAGE ‘‘(B) CONDITIONS.—The Secretary may not DETERMINATIONS.—A contract with a medicare (ii) in subparagraph (C), by striking ‘‘car- provide indemnification under subparagraph riers’’ and inserting ‘‘medicare administrative administrative contractor under this section to (A) insofar as the liability for such costs arises perform the function of developing local cov- contractors’’; and directly from conduct that is determined by the (iii) by striking subparagraphs (D) and (E); erage determinations (as defined in section Secretary to be criminal in nature, fraudulent, 1869(f)(2)(B)) shall provide that the contractor (C) in paragraph (3)— or grossly negligent. (i) in the matter before subparagraph (A), by shall— ‘‘(C) SCOPE OF INDEMNIFICATION.—Indem- ‘‘(A) designate at least 1 different individual striking ‘‘Each such contract shall provide that nification by the Secretary under subparagraph to serve as medical director for each State for the carrier’’ and inserting ‘‘The Secretary’’; (A) may include payment of judgments, settle- which such contract performs such function; (ii) by striking ‘‘will’’ the first place it appears ments (subject to subparagraph (D)), awards, ‘‘(B) utilize such medical director in the per- in each of subparagraphs (A), (B), (F), (G), (H), and costs (including reasonable legal expenses). formance of such function; and and (L) and inserting ‘‘shall’’; ‘‘(D) WRITTEN APPROVAL FOR SETTLEMENTS.— ‘‘(C) appoint a contractor advisory committee (iii) in subparagraph (B), in the matter before A contractor or other person described in sub- with respect to each such State to provide a for- clause (i), by striking ‘‘to the policyholders and paragraph (A) may not propose to negotiate a mal mechanism for physicians in the State to be subscribers of the carrier’’ and inserting ‘‘to the settlement or compromise of a proceeding de- informed of, and participate in, the development policyholders and subscribers of the medicare scribed in such subparagraph without the prior of a local coverage determination in an advisory administrative contractor’’; written approval of the Secretary to negotiate a capacity. (iv) by striking subparagraphs (C), (D), and settlement. Any indemnification under subpara- ‘‘(c) TERMS AND CONDITIONS.— (E); graph (A) with respect to amounts paid under a ‘‘(1) IN GENERAL.—Subject to subsection (a)(6), (v) in subparagraph (H)— settlement are conditioned upon the Secretary’s a contract with any medicare administrative (I) by striking ‘‘if it makes determinations or prior written approval of the final settlement. contractor under this section may contain such payments with respect to physicians’ services,’’; ‘‘(E) CONSTRUCTION.—Nothing in this para- terms and conditions as the Secretary finds nec- and essary or appropriate and may provide for ad- graph shall be construed— ‘‘(i) to change any common law immunity that (II) by striking ‘‘carrier’’ and inserting ‘‘medi- vances of funds to the medicare administrative care administrative contractor’’; contractor for the making of payments by it may be available to a medicare administrative contractor or person described in subparagraph (vi) by striking subparagraph (I); under subsection (a)(4)(B). (vii) in subparagraph (L), by striking the ‘‘(2) PROHIBITION ON MANDATES FOR CERTAIN (A); or semicolon and inserting a period; DATA COLLECTION.—The Secretary may not re- ‘‘(ii) to permit the payment of costs not other- (viii) in the first sentence, after subparagraph quire, as a condition of entering into, or renew- wise allowable, reasonable, or allocable under (L), by striking ‘‘and shall contain’’ and all ing, a contract under this section, that the the Federal Acquisition Regulations.’’. that follows through the period; and medicare administrative contractor match data (2) CONSIDERATION OF INCORPORATION OF CUR- (ix) in the seventh sentence, by inserting obtained other than in its activities under this RENT LAW STANDARDS.—In developing contract ‘‘medicare administrative contractor,’’ after title with data used in the administration of this performance requirements under section ‘‘carrier,’’; title for purposes of identifying situations in 1874A(b) of the Social Security Act (as added by (D) by striking paragraph (5); which the provisions of section 1862(b) may paragraph (1)) the Secretary shall consider in- (E) in paragraph (6)(D)(iv), by striking ‘‘car- apply. clusion of the performance standards described rier’’ and inserting ‘‘medicare administrative ‘‘(d) LIMITATION ON LIABILITY OF MEDICARE in sections 1816(f)(2) of such Act (relating to contractor’’; and ADMINISTRATIVE CONTRACTORS AND CERTAIN timely processing of reconsiderations and appli- (F) in paragraph (7), by striking ‘‘the carrier’’ OFFICERS.— cations for exemptions) and section 1842(b)(2)(B) ‘‘(1) CERTIFYING OFFICER.—No individual des- of such Act (relating to timely review of deter- and inserting ‘‘the Secretary’’ each place it ap- ignated pursuant to a contract under this sec- minations and fair hearing requests), as such pears. tion as a certifying officer shall, in the absence sections were in effect before the date of enact- (4) Subsection (c) is amended— of the reckless disregard of the individual’s obli- ment of this Act. (A) by striking paragraph (1); gations or the intent by that individual to de- (b) CONFORMING AMENDMENTS TO SECTION (B) in paragraph (2), by striking ‘‘contract fraud the United States, be liable with respect to 1816 (RELATING TO FISCAL INTERMEDIARIES).— under this section which provides for the dis- any payments certified by the individual under Section 1816 (42 U.S.C. 1395h) is amended as fol- bursement of funds, as described in subsection this section. lows: (a)(1)(B),’’ and inserting ‘‘contract under sec- ‘‘(2) DISBURSING OFFICER.—No disbursing offi- (1) The heading is amended to read as follows: tion 1874A that provides for making payments cer shall, in the absence of the reckless dis- ‘‘PROVISIONS RELATING TO THE ADMINISTRATION under this part’’; regard of the officer’s obligations or the intent OF PART A’’. (C) in paragraph (3)(A), by striking ‘‘sub- by that officer to defraud the United States, be (2) Subsection (a) is amended to read as fol- section (a)(1)(B)’’ and inserting ‘‘section liable with respect to any payment by such offi- lows: 1874A(a)(3)(B)’’; cer under this section if it was based upon an ‘‘(a) The administration of this part shall be (D) in paragraph (4), by striking ‘‘carrier’’ authorization (which meets the applicable re- conducted through contracts with medicare ad- and inserting ‘‘medicare administrative con- quirements for such internal controls established ministrative contractors under section 1874A.’’. tractor’’; by the Comptroller General) of a certifying offi- (3) Subsection (b) is repealed. (E) in paragraph (5), by striking ‘‘contract cer designated as provided in paragraph (1) of (4) Subsection (c) is amended— under this section which provides for the dis- this subsection. (A) by striking paragraph (1); and bursement of funds, as described in subsection ‘‘(3) LIABILITY OF MEDICARE ADMINISTRATIVE (B) in each of paragraphs (2)(A) and (3)(A), (a)(1)(B), shall require the carrier’’ and ‘‘carrier CONTRACTOR.—No medicare administrative con- by striking ‘‘agreement under this section’’ and responses’’ and inserting ‘‘contract under sec- tractor shall be liable to the United States for a inserting ‘‘contract under section 1874A that tion 1874A that provides for making payments payment by a certifying or disbursing officer provides for making payments under this part’’. under this part shall require the medicare ad- unless, in connection with such a payment, the (5) Subsections (d) through (i) are repealed. ministrative contractor’’ and ‘‘contractor re- medicare administrative contractor acted with (6) Subsections (j) and (k) are each amended— sponses’’, respectively; and reckless disregard of its obligations under its (A) by striking ‘‘An agreement with an agency (F) by striking paragraph (6). medicare administrative contract or with intent or organization under this section’’ and insert- (5) Subsections (d), (e), and (f) are repealed. to defraud the United States. ing ‘‘A contract with a medicare administrative (6) Subsection (g) is amended by striking ‘‘car- ‘‘(4) RELATIONSHIP TO FALSE CLAIMS ACT.— contractor under section 1874A with respect to rier or carriers’’ and inserting ‘‘medicare admin- Nothing in this subsection shall be construed to the administration of this part’’; and istrative contractor or contractors’’.

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00103 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8972 CONGRESSIONAL RECORD — SENATE July 7, 2003 (7) Subsection (h) is amended— and any reference in such provisions to an payment error rates of such contractors in the (A) in paragraph (2)— agreement or contract shall be deemed to in- processing or reviewing of medicare claims. (i) by striking ‘‘Each carrier having an agree- clude agreements and contracts entered into ‘‘(2) GAO REVIEW OF METHODOLOGY.—The ment with the Secretary under subsection (a)’’ pursuant to paragraph (2)(A). Comptroller General of the United States shall and inserting ‘‘The Secretary’’; and (e) REFERENCES.—On and after the effective review, and make recommendations to the Sec- (ii) by striking ‘‘Each such carrier’’ and in- date provided under subsection (d)(1), any ref- retary, regarding the adequacy of such method- serting ‘‘The Secretary’’; erence to a fiscal intermediary or carrier under ology. (B) in paragraph (3)(A)— title XI or XVIII of the Social Security Act (or ‘‘(3) MEDICARE CONTRACTOR DEFINED.—For (i) by striking ‘‘a carrier having an agreement any regulation, manual instruction, interpreta- purposes of this subsection, the term ‘medicare with the Secretary under subsection (a)’’ and tive rule, statement of policy, or guideline issued contractor’ includes a medicare administrative inserting ‘‘medicare administrative contractor to carry out such titles) shall be deemed a ref- contractor, a fiscal intermediary with a contract having a contract under section 1874A that pro- erence to an appropriate medicare administra- under section 1816, and a carrier with a contract vides for making payments under this part’’; tive contractor (as provided under section 1874A under section 1842.’’. and of the Social Security Act). (2) REPORT.—The Secretary shall submit to (ii) by striking ‘‘such carrier’’ and inserting (f) SECRETARIAL SUBMISSION OF LEGISLATIVE Congress a report that describes how the Sec- ‘‘such contractor’’; PROPOSAL.—Not later than 6 months after the retary intends to use the methodology developed (C) in paragraph (3)(B)— date of enactment of this Act, the Secretary under section 1874A(e)(1) of the Social Security (i) by striking ‘‘a carrier’’ and inserting ‘‘a shall submit to the appropriate committees of Act, as added by paragraph (1), in assessing medicare administrative contractor’’ each place Congress a legislative proposal providing for medicare contractor performance in imple- it appears; and such technical and conforming amendments in menting effective education and outreach pro- (ii) by striking ‘‘the carrier’’ and inserting the law as are required by the provisions of this grams, including whether to use such method- ‘‘the contractor’’ each place it appears; and section. ology as a basis for performance bonuses. (D) in paragraphs (5)(A) and (5)(B)(iii), by (g) REPORTS ON IMPLEMENTATION.— (c) IMPROVED PROVIDER EDUCATION AND striking ‘‘carriers’’ and inserting ‘‘medicare ad- (1) PROPOSAL FOR IMPLEMENTATION.—At least TRAINING.— ministrative contractors’’ each place it appears. 1 year before the date specified in subsection (1) INCREASED FUNDING FOR ENHANCED EDU- (8) Subsection (l) is amended— (d)(1)(A), the Secretary shall submit a report to CATION AND TRAINING THROUGH MEDICARE INTEG- (A) in paragraph (1)(A)(iii), by striking ‘‘car- Congress and the Comptroller General of the RITY PROGRAM.—Section 1817(k)(4) (42 U.S.C. rier’’ and inserting ‘‘medicare administrative United States that describes a plan for an ap- 1395i(k)(4)) is amended— contractor’’; and propriate transition. The Comptroller General (A) in subparagraph (A), by striking ‘‘sub- (B) in paragraph (2), by striking ‘‘carrier’’ shall conduct an evaluation of such plan and paragraph (B)’’ and inserting ‘‘subparagraphs and inserting ‘‘medicare administrative con- shall submit to Congress, not later than 6 (B) and (C)’’; (B) in subparagraph (B), by striking ‘‘The tractor’’. months after the date the report is received, a amount appropriated’’ and inserting ‘‘Subject to (9) Subsection (p)(3)(A) is amended by striking report on such evaluation and shall include in subparagraph (C), the amount appropriated’’; ‘‘carrier’’ and inserting ‘‘medicare administra- such report such recommendations as the Comp- and tive contractor’’. troller General deems appropriate. (10) Subsection (q)(1)(A) is amended by strik- (C) by adding at the end the following new (2) STATUS OF IMPLEMENTATION.—The Sec- ing ‘‘carrier’’. subparagraph: retary shall submit a report to Congress not ‘‘(C) ENHANCED PROVIDER EDUCATION AND (d) EFFECTIVE DATE; TRANSITION RULE.— later than October 1, 2008, that describes the (1) EFFECTIVE DATE.— TRAINING.— status of implementation of such amendments (A) IN GENERAL.—Except as otherwise pro- ‘‘(i) IN GENERAL.—In addition to the amount and that includes a description of the following: vided in this subsection, the amendments made appropriated under subparagraph (B), the (A) The number of contracts that have been by this section shall take effect on October 1, amount appropriated under subparagraph (A) competitively bid as of such date. 2005, and the Secretary is authorized to take for a fiscal year (beginning with fiscal year (B) The distribution of functions among con- 2004) is increased by $35,000,000. such steps before such date as may be necessary tracts and contractors. to implement such amendments on a timely ‘‘(ii) USE.—The funds made available under (C) A timeline for complete transition to full this subparagraph shall be used only to increase basis. competition. (B) CONSTRUCTION FOR CURRENT CONTRACTS.— the conduct by medicare contractors of edu- (D) A detailed description of how the Sec- cation and training of providers of services, Such amendments shall not apply to contracts retary has modified oversight and management in effect before the date specified under sub- physicians, practitioners, and suppliers regard- of medicare contractors to adapt to full competi- ing billing, coding, and other appropriate items paragraph (A) that continue to retain the terms tion. and conditions in effect on such date (except as and may also be used to improve the accuracy, otherwise provided under this title, other than Subtitle D—Education and Outreach consistency, and timeliness of contractor re- under this section) until such date as the con- Improvements sponses to written and phone inquiries from pro- tract is let out for competitive bidding under SEC. 531. PROVIDER EDUCATION AND TECHNICAL viders of services, physicians, practitioners, and such amendments. ASSISTANCE. suppliers.’’. (2) TAILORING EDUCATION AND TRAINING FOR (C) DEADLINE FOR COMPETITIVE BIDDING.— (a) COORDINATION OF EDUCATION FUNDING.— The Secretary shall provide for the letting by (1) IN GENERAL.—The Social Security Act is SMALL PROVIDERS OR SUPPLIERS.— (A) IN GENERAL.—Section 1889, as added by competitive bidding of all contracts for functions amended by inserting after section 1888 the fol- subsection (a), is amended by adding at the end of medicare administrative contractors for an- lowing new section: the following new subsection: nual contract periods that begin on or after Oc- ‘‘PROVIDER EDUCATION AND TECHNICAL ‘‘(b) TAILORING EDUCATION AND TRAINING AC- tober 1, 2011. ASSISTANCE TIVITIES FOR SMALL PROVIDERS OR SUPPLIERS.— ENERAL TRANSITION RULES (2) G .— ‘‘SEC. 1889. (a) COORDINATION OF EDUCATION ‘‘(1) IN GENERAL.—Insofar as a medicare con- (A) AUTHORITY TO CONTINUE TO ENTER INTO FUNDING.—The Secretary shall coordinate the tractor conducts education and training activi- NEW AGREEMENTS AND CONTRACTS AND WAIVER educational activities provided through medi- ties, it shall take into consideration the special OF PROVIDER NOMINATION PROVISIONS DURING care contractors (as defined in subsection (e), needs of small providers of services or suppliers TRANSITION.—Prior to the date specified in para- including under section 1893) in order to maxi- (as defined in paragraph (2)). Such education graph (1)(A), the Secretary may, consistent with mize the effectiveness of Federal education ef- and training activities for small providers of subparagraph (B), continue to enter into agree- forts for providers of services, physicians, prac- services and suppliers may include the provision ments under section 1816 and contracts under titioners, and suppliers.’’. of technical assistance (such as review of billing section 1842 of the Social Security Act (42 U.S.C. (2) EFFECTIVE DATE.—The amendment made systems and internal controls to determine pro- 1395h, 1395u). The Secretary may enter into new by paragraph (1) shall take effect on the date of gram compliance and to suggest more efficient agreements under section 1816 during the time enactment of this Act. and effective means of achieving such compli- period without regard to any of the provider (b) INCENTIVES TO IMPROVE CONTRACTOR PER- ance). nomination provisions of such section. FORMANCE.— ‘‘(2) SMALL PROVIDER OF SERVICES OR SUP- (B) APPROPRIATE TRANSITION.—The Secretary (1) IN GENERAL.—Section 1874A, as added by PLIER.—In this subsection, the term ‘small pro- shall take such steps as are necessary to provide section 521(a)(1), is amended by adding at the vider of services or supplier’ means— for an appropriate transition from agreements end the following new subsection: ‘‘(A) an institutional provider of services with under section 1816 and contracts under section ‘‘(e) INCENTIVES TO IMPROVE CONTRACTOR fewer than 25 full-time-equivalent employees; or 1842 of the Social Security Act (42 U.S.C. 1395h, PERFORMANCE IN PROVIDER EDUCATION AND ‘‘(B) a physician, practitioner, or supplier 1395u) to contracts under section 1874A, as OUTREACH.— with fewer than 10 full-time-equivalent employ- added by subsection (a)(1). ‘‘(1) METHODOLOGY TO MEASURE CONTRACTOR ees.’’. (3) AUTHORIZING CONTINUATION OF MIP ACTIVI- ERROR RATES.—In order to give medicare con- (B) EFFECTIVE DATE.—The amendment made TIES UNDER CURRENT CONTRACTS AND AGREE- tractors (as defined in paragraph (3)) an incen- by subparagraph (A) shall take effect on Janu- MENTS AND UNDER TRANSITION CONTRACTS.—The tive to implement effective education and out- ary 1, 2004. provisions contained in the exception in section reach programs for providers of services, physi- (d) ADDITIONAL PROVIDER EDUCATION PROVI- 1893(d)(2) of the Social Security Act (42 U.S.C. cians, practitioners, and suppliers, the Secretary SIONS.— 1395ddd(d)(2)) shall continue to apply notwith- shall develop and implement by October 1, 2004, (1) IN GENERAL.—Section 1889, as added by standing the amendments made by this section, a methodology to measure the specific claims subsection (a) and as amended by subsection

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(c)(2), is amended by adding at the end the fol- ‘‘(ii) EVALUATION.—In conducting evaluations (5) by adding at the end the following new lowing new subsections: of individual medicare contractors, the Sec- subsection: ‘‘(c) ENCOURAGEMENT OF PARTICIPATION IN retary shall consider the results of the moni- ‘‘(b) MEDICARE PROVIDER OMBUDSMAN.— EDUCATION PROGRAM ACTIVITIES.—A medicare toring conducted under subparagraph (A) tak- ‘‘(1) IN GENERAL.—By not later than 1 year contractor may not use a record of attendance ing into account as performance requirements after the date of enactment of the Prescription at (or failure to attend) educational activities or the standards established under clause (i). The Drug and Medicare Improvement Act of 2003, other information gathered during an edu- Secretary shall, in consultation with organiza- the Secretary shall appoint a Medicare Provider cational program conducted under this section tions representing providers of services, sup- Ombudsman. or otherwise by the Secretary to select or track pliers, and individuals entitled to benefits under ‘‘(2) DUTIES.—The Medicare Provider Om- providers of services, physicians, practitioners, part A or enrolled under part B, or both, estab- budsman shall— or suppliers for the purpose of conducting any lish standards relating to the accuracy, consist- ‘‘(A) provide assistance, on a confidential type of audit or prepayment review. ency, and timeliness of the information so pro- basis, to entities and individuals providing items ‘‘(d) CONSTRUCTION.—Nothing in this section vided. and services, including covered drugs under or section 1893(g) shall be construed as pro- ‘‘(C) DIRECT MONITORING.—Nothing in this part D, under this title with respect to com- viding for disclosure by a medicare contractor— paragraph shall be construed as preventing the plaints, grievances, and requests for information ‘‘(1) of the screens used for identifying claims Secretary from directly monitoring the accuracy, concerning the programs under this title (in- that will be subject to medical review; or consistency, and timeliness of the information so cluding provisions of title XI insofar as they re- ‘‘(2) of information that would compromise provided. late to this title and are not administered by the pending law enforcement activities or reveal ‘‘(5) MEDICARE CONTRACTOR DEFINED.—For Office of the Inspector General of the Depart- findings of law enforcement-related audits. purposes of this subsection, the term ‘medicare ment of Health and Human Services) and in the ‘‘(e) DEFINITIONS.—For purposes of this sec- contractor’ has the meaning given such term in resolution of unclear or conflicting guidance tion and section 1817(k)(4)(C), the term ‘medi- subsection (e)(3).’’. given by the Secretary and medicare contractors care contractor’ includes the following: (b) EFFECTIVE DATE.—The amendment made to such providers of services and suppliers re- ‘‘(1) A medicare administrative contractor by subsection (a) shall take effect October 1, garding such programs and provisions and re- with a contract under section 1874A, a fiscal 2004. quirements under this title and such provisions; intermediary with a contract under section 1816, (c) AUTHORIZATION OF APPROPRIATIONS.— and and a carrier with a contract under section 1842. There are authorized to be appropriated such ‘‘(B) submit recommendations to the Secretary ‘‘(2) An eligible entity with a contract under sums as are necessary to carry out section for improvement in the administration of this section 1893. 1874A(f) of the Social Security Act, as added by title and such provisions, including— subsection (a). Such term does not include, with respect to ac- ‘‘(i) recommendations to respond to recurring tivities of a specific provider of services, physi- SEC. 533. RELIANCE ON GUIDANCE. patterns of confusion in this title and such pro- cian, practitioner, or supplier an entity that has (a) IN GENERAL.—Section 1871(d), as added by visions (including recommendations regarding no authority under this title or title XI with re- section 502(a), is amended by adding at the end suspending imposition of sanctions where there spect to such activities and such provider of the following new paragraph: is widespread confusion in program administra- ‘‘(2) If— services, physician, practitioner, or supplier.’’. tion), and ‘‘(A) a provider of services, physician, practi- (2) EFFECTIVE DATE.—The amendment made ‘‘(ii) recommendations to provide for an ap- tioner, or other supplier follows written guid- by paragraph (1) shall take effect on the date of propriate and consistent response (including not ance provided— providing for audits) in cases of self-identified enactment of this Act. ‘‘(i) by the Secretary; or SEC. 532. ACCESS TO AND PROMPT RESPONSES ‘‘(ii) by a medicare contractor (as defined in overpayments by providers of services and sup- FROM MEDICARE CONTRACTORS. section 1889(e) and whether in the form of a pliers. (a) IN GENERAL.—Section 1874A, as added by written response to a written inquiry under sec- ‘‘(3) STAFF.—The Secretary shall provide the section 521(a)(1) and as amended by section tion 1874A(f)(1) or otherwise) acting within the Medicare Provider Ombudsman with appro- 531(b)(1), is amended by adding at the end the scope of the contractor’s contract authority, priate staff.’’. (b) FUNDING.—There are authorized to be ap- following new subsection: in response to a written inquiry with respect to propriated to the Secretary (in appropriate part ‘‘(f) COMMUNICATING WITH BENEFICIARIES AND the furnishing of items or services or the submis- from the Federal Hospital Insurance Trust Fund PROVIDERS.— sion of a claim for benefits for such items or and the Federal Supplementary Medical Insur- ‘‘(1) COMMUNICATION PROCESS.—The Secretary services; ance Trust Fund (including the Prescription shall develop a process for medicare contractors ‘‘(B) the Secretary determines that— to communicate with beneficiaries and with pro- ‘‘(i) the provider of services, physician, practi- Drug Account)) to carry out the provisions of viders of services, physicians, practitioners, and tioner, or supplier has accurately presented the subsection (b) of section 1868 of the Social Secu- suppliers under this title. circumstances relating to such items, services, rity Act (42 U.S.C. 1395ee) (relating to the Medi- ‘‘(2) RESPONSE TO WRITTEN INQUIRIES.—Each and claim to the Secretary or the contractor in care Provider Ombudsman), as added by sub- medicare contractor (as defined in paragraph the written guidance; and section (a)(5), such sums as are necessary for (5)) shall provide general written responses ‘‘(ii) there is no indication of fraud or abuse fiscal year 2004 and each succeeding fiscal year. (which may be through electronic transmission) committed by the provider of services, physician, SEC. 535. BENEFICIARY OUTREACH DEMONSTRA- in a clear, concise, and accurate manner to in- practitioner, or supplier against the program TION PROGRAMS. quiries by beneficiaries, providers of services, under this title; and (a) DEMONSTRATION ON THE PROVISION OF AD- physicians, practitioners, and suppliers con- ‘‘(C) the guidance was in error; VICE AND ASSISTANCE TO MEDICARE BENE- cerning the programs under this title within 45 the provider of services, physician, practitioner, FICIARIES AT LOCAL OFFICES OF THE SOCIAL SE- business days of the date of receipt of such in- or supplier shall not be subject to any penalty CURITY ADMINISTRATION.— quiries. or interest under this title (or the provisions of (1) ESTABLISHMENT.—The Secretary shall es- ‘‘(3) RESPONSE TO TOLL-FREE LINES.—The Sec- title XI insofar as they relate to this title) relat- tablish a demonstration program (in this sub- retary shall ensure that medicare contractors ing to the provision of such items or service or section referred to as the ‘‘demonstration pro- provide a toll-free telephone number at which such claim if the provider of services, physician, gram’’) under which medicare specialists em- beneficiaries, providers, physicians, practi- practitioner, or supplier reasonably relied on ployed by the Department of Health and Human tioners, and suppliers may obtain information such guidance. In applying this paragraph with Services provide advice and assistance to medi- regarding billing, coding, claims, coverage, and respect to guidance in the form of general re- care beneficiaries at the location of existing other appropriate information under this title. sponses to frequently asked questions, the Sec- local offices of the Social Security Administra- ‘‘(4) MONITORING OF CONTRACTOR RE- retary retains authority to determine the extent tion. SPONSES.— to which such general responses apply to the (2) LOCATIONS.— ‘‘(A) IN GENERAL.—Each medicare contractor particular circumstances of individual claims.’’. (A) IN GENERAL.—The demonstration program shall, consistent with standards developed by (b) EFFECTIVE DATE.—The amendment made shall be conducted in at least 6 offices or areas. the Secretary under subparagraph (B)— by subsection (a) shall apply to penalties im- Subject to subparagraph (B), in selecting such ‘‘(i) maintain a system for identifying who posed on or after the date of enactment of this offices and areas, the Secretary shall provide provides the information referred to in para- Act. preference for offices with a high volume of vis- graphs (2) and (3); and SEC. 534. MEDICARE PROVIDER OMBUDSMAN. its by medicare beneficiaries. ‘‘(ii) monitor the accuracy, consistency, and (a) MEDICARE PROVIDER OMBUDSMAN.—Sec- (B) ASSISTANCE FOR RURAL BENEFICIARIES.— timeliness of the information so provided. tion 1868 (42 U.S.C. 1395ee) is amended— The Secretary shall provide for the selection of ‘‘(B) DEVELOPMENT OF STANDARDS.— (1) by adding at the end of the heading the at least 2 rural areas to participate in the dem- ‘‘(i) IN GENERAL.—The Secretary shall estab- following: ‘‘; MEDICARE PROVIDER OMBUDSMAN’’; onstration program. In conducting the dem- lish (and publish in the Federal Register) stand- (2) by inserting ‘‘PRACTICING PHYSICIANS AD- onstration program in such rural areas, the Sec- ards regarding the accuracy, consistency, and VISORY COUNCIL.—(1)’’ after ‘‘(a)’’; retary shall provide for medicare specialists to timeliness of the information provided in re- (3) in paragraph (1), as so redesignated under travel among local offices in a rural area on a sponse to inquiries under this subsection. Such paragraph (2), by striking ‘‘in this section’’ and scheduled basis. standards shall be consistent with the perform- inserting ‘‘in this subsection’’; (3) DURATION.—The demonstration program ance requirements established under subsection (4) by redesignating subsections (b) and (c) as shall be conducted over a 3-year period. (b)(3). paragraphs (2) and (3), respectively; and (4) EVALUATION AND REPORT.—

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(A) EVALUATION.—The Secretary shall provide claims to ensure that the previous practice is not physician, practitioner, or supplier fails to make for an evaluation of the demonstration program. continuing. a payment in accordance with a repayment plan Such evaluation shall include an analysis of— ‘‘(5) RANDOM PREPAYMENT REVIEW DEFINED.— under this paragraph, the Secretary may imme- (i) utilization of, and beneficiary satisfaction For purposes of this subsection, the term ‘ran- diately seek to offset or otherwise recover the with, the assistance provided under the pro- dom prepayment review’ means a demand for total balance outstanding (including applicable gram; and the production of records or documentation ab- interest) under the repayment plan. (ii) the cost-effectiveness of providing bene- sent cause with respect to a claim.’’. ‘‘(E) RELATION TO NO FAULT PROVISION.— ficiary assistance through out-stationing medi- (b) EFFECTIVE DATE.— Nothing in this paragraph shall be construed as care specialists at local social security offices. (1) IN GENERAL.—Except as provided in this affecting the application of section 1870(c) (re- (B) REPORT.—The Secretary shall submit to subsection, the amendment made by subsection lating to no adjustment in the cases of certain Congress a report on such evaluation and shall (a) shall take effect on the date of enactment of overpayments). include in such report recommendations regard- this Act. ‘‘(2) LIMITATION ON RECOUPMENT.— ing the feasibility of permanently out-stationing (2) DEADLINE FOR PROMULGATION OF CERTAIN ‘‘(A) NO RECOUPMENT UNTIL RECONSIDERATION Medicare specialists at local social security of- REGULATIONS.—The Secretary shall first issue EXERCISED.—In the case of a provider of serv- fices. regulations under section 1874A(g) of the Social ices, physician, practitioner, or supplier that is (b) DEMONSTRATION ON PROVIDING PRIOR DE- Security Act, as added by subsection (a), by not determined to have received an overpayment TERMINATIONS.— later than 1 year after the date of enactment of under this title and that seeks a reconsideration (1) ESTABLISHMENT.—By not later than 1 year this Act. of such determination by a qualified inde- after the date of enactment of this Act, the Sec- (3) APPLICATION OF STANDARD PROTOCOLS FOR pendent contractor under section 1869(c), the retary shall establish a demonstration project to RANDOM PREPAYMENT REVIEW.—Section Secretary may not take any action (or authorize test the administrative feasibility of providing a 1874A(g)(1) of the Social Security Act, as added any other person, including any Medicare con- process for medicare beneficiaries and entities by subsection (a), shall apply to random prepay- tractor, as defined in subparagraph (C)) to re- and individuals furnishing such beneficiaries ment reviews conducted on or after such date coup the overpayment until the date the deci- with items and services under title XVIII of the (not later than 1 year after the date of enact- sion on the reconsideration has been rendered. Social Security Act program to make a request ment of this Act) as the Secretary shall specify. ‘‘(B) PAYMENT OF INTEREST.— for, and receive, a determination (after an ad- The Secretary shall develop and publish the ‘‘(i) RETURN OF RECOUPED AMOUNT WITH IN- vance beneficiary notice is issued with respect to standard protocol under such section by not TEREST IN CASE OF REVERSAL.—Insofar as such the item or service involved but before such item later than 1 year after the date of enactment of determination on appeal against the provider of or service is furnished to the beneficiary) as to this Act. services, physician, practitioner, or supplier is whether the item or service is covered under SEC. 542. RECOVERY OF OVERPAYMENTS. later reversed, the Secretary shall provide for repayment of the amount recouped plus interest such title consistent with the applicable require- (a) IN GENERAL.—Section 1874A, as added by ments of section 1862(a)(1)(A) of such Act (42 section 521(a)(1) and as amended by sections for the period in which the amount was re- U.S.C. 1395y(a)(1)(A)) (relating to medical ne- 531(b)(1), 532(a), and 541(a), is amended by add- couped. NTEREST IN CASE OF AFFIRMATION.—In- cessity). ing at the end the following new subsection: ‘‘(ii) I sofar as the determination on such appeal is (2) EVALUATION AND REPORT.— ‘‘(h) RECOVERY OF OVERPAYMENTS.— against the provider of services, physician, prac- (A) EVALUATION.—The Secretary shall provide ‘‘(1) USE OF REPAYMENT PLANS.— titioner, or supplier, interest on the overpay- for an evaluation of the demonstration program ‘‘(A) IN GENERAL.—If the repayment, within conducted under paragraph (1). the period otherwise permitted by a provider of ment shall accrue on and after the date of the (B) REPORT.—By not later than January 1, services, physician, practitioner, or other sup- original notice of overpayment. ‘‘(iii) RATE OF INTEREST.—The rate of interest 2006, the Secretary shall submit to Congress a plier, of an overpayment under this title meets under this subparagraph shall be the rate other- report on such evaluation together with rec- the standards developed under subparagraph wise applicable under this title in the case of ommendations for such legislation and adminis- (B), subject to subparagraph (C), and the pro- overpayments. trative actions as the Secretary considers appro- vider, physician, practitioner, or supplier re- ‘‘(C) MEDICARE CONTRACTOR DEFINED.—For priate. quests the Secretary to enter into a repayment purposes of this subsection, the term ‘medicare Subtitle E—Review, Recovery, and plan with respect to such overpayment, the Sec- contractor’ has the meaning given such term in Enforcement Reform retary shall enter into a plan with the provider, section 1889(e). physician, practitioner, or supplier for the offset SEC. 541. PREPAYMENT REVIEW. ‘‘(3) PAYMENT AUDITS.— or repayment (at the election of the provider, (a) IN GENERAL.—Section 1874A, as added by ‘‘(A) WRITTEN NOTICE FOR POST-PAYMENT AU- physician, practitioner, or supplier) of such section 521(a)(1) and as amended by sections DITS.—Subject to subparagraph (C), if a medi- 531(b)(1) and 532(a), is amended by adding at overpayment over a period of at least 1 year, but care contractor decides to conduct a post-pay- the end the following new subsection: not longer than 3 years. Interest shall accrue on ment audit of a provider of services, physician, ‘‘(g) CONDUCT OF PREPAYMENT REVIEW.— the balance through the period of repayment. practitioner, or supplier under this title, the ‘‘(1) STANDARDIZATION OF RANDOM PREPAY- The repayment plan shall meet terms and condi- contractor shall provide the provider of services, MENT REVIEW.—A medicare administrative con- tions determined to be appropriate by the Sec- physician, practitioner, or supplier with written tractor shall conduct random prepayment re- retary. notice (which may be in electronic form) of the view only in accordance with a standard pro- ‘‘(B) DEVELOPMENT OF STANDARDS.—The Sec- intent to conduct such an audit. tocol for random prepayment audits developed retary shall develop standards for the recovery ‘‘(B) EXPLANATION OF FINDINGS FOR ALL AU- by the Secretary. of overpayments. Such standards shall— DITS.—Subject to subparagraph (C), if a medi- ‘‘(2) LIMITATIONS ON INITIATION OF NON- ‘‘(i) include a requirement that the Secretary care contractor audits a provider of services, RANDOM PREPAYMENT REVIEW.—A medicare ad- take into account (and weigh in favor of the use physician, practitioner, or supplier under this ministrative contractor may not initiate non- of a repayment plan) the reliance (as described title, the contractor shall— random prepayment review of a provider of serv- in section 1871(d)(2)) by a provider of services, ‘‘(i) give the provider of services, physician, ices, physician, practitioner, or supplier based physician, practitioner, and supplier on guid- practitioner, or supplier a full review and expla- on the initial identification by that provider of ance when determining whether a repayment nation of the findings of the audit in a manner services, physician, practitioner, or supplier of plan should be offered; and that is understandable to the provider of serv- an improper billing practice unless there is a ‘‘(ii) provide for consideration of the financial ices, physician, practitioner, or supplier and likelihood of sustained or high level of payment hardship imposed on a provider of services, phy- permits the development of an appropriate cor- error (as defined by the Secretary). sician, practitioner, or supplier in considering rective action plan; ‘‘(3) TERMINATION OF NONRANDOM PREPAY- such a repayment plan. ‘‘(ii) inform the provider of services, physi- MENT REVIEW.—The Secretary shall establish In developing standards with regard to finan- cian, practitioner, or supplier of the appeal protocols or standards relating to the termi- cial hardship with respect to a provider of serv- rights under this title as well as consent settle- nation, including termination dates, of non- ices, physician, practitioner, or supplier, the ment options (which are at the discretion of the random prepayment review. Such regulations Secretary shall take into account the amount of Secretary); and may vary such a termination date based upon the proposed recovery as a proportion of pay- ‘‘(iii) give the provider of services, physician, the differences in the circumstances triggering ments made to that provider, physician, practi- practitioner, or supplier an opportunity to pro- prepayment review. tioner, or supplier. vide additional information to the contractor. ‘‘(4) CONSTRUCTION.—Nothing in this sub- ‘‘(C) EXCEPTIONS.—Subparagraph (A) shall ‘‘(C) EXCEPTION.—Subparagraphs (A) and (B) section shall be construed as preventing the de- not apply if— shall not apply if the provision of notice or find- nial of payments for claims actually reviewed ‘‘(i) the Secretary has reason to suspect that ings would compromise pending law enforce- under a random prepayment review. In the case the provider of services, physician, practitioner, ment activities, whether civil or criminal, or re- of a provider of services, physician, practitioner, or supplier may file for bankruptcy or otherwise veal findings of law enforcement-related audits. or supplier with respect to which amounts were cease to do business or discontinue participation ‘‘(4) NOTICE OF OVER-UTILIZATION OF CODES.— previously overpaid, nothing in this subsection in the program under this title; or The Secretary shall establish, in consultation shall be construed as limiting the ability of a ‘‘(ii) there is an indication of fraud or abuse with organizations representing the classes of medicare administrative contractor to request committed against the program. providers of services, physicians, practitioners, the periodic production of records or supporting ‘‘(D) IMMEDIATE COLLECTION IF VIOLATION OF and suppliers, a process under which the Sec- documentation for a limited sample of submitted REPAYMENT PLAN.—If a provider of services, retary provides for notice to classes of providers

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00106 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8975 of services, physicians, practitioners, and sup- (4) Section 1874A(h)(6) of the Social Security care services, the availability of such services pliers served by a medicare contractor in cases Act, as added by subsection (a), shall apply to through facilities that participate in the pro- in which the contractor has identified that par- consent settlements entered into after the date gram under this title and that serve the area in ticular billing codes may be overutilized by that of enactment of this Act. which the patient resides’’. class of providers of services, physicians, practi- SEC. 543. PROCESS FOR CORRECTION OF MINOR (2) EFFECTIVE DATE.—The amendments made tioners, or suppliers under the programs under ERRORS AND OMISSIONS ON CLAIMS by paragraph (1) shall apply to discharge plans this title (or provisions of title XI insofar as WITHOUT PURSUING APPEALS PROC- made on or after such date as the Secretary they relate to such programs). ESS. shall specify, but not later than 6 months after ‘‘(5) STANDARD METHODOLOGY FOR PROBE (a) IN GENERAL.—The Secretary shall develop, the date the Secretary provides for availability SAMPLING.—The Secretary shall establish a in consultation with appropriate medicare con- of information under subsection (a). standard methodology for medicare administra- tractors (as defined in section 1889(e) of the So- cial Security Act, as added by section 531(d)(1)) SEC. 553. EVALUATION AND MANAGEMENT DOCU- tive contractors to use in selecting a sample of MENTATION GUIDELINES CONSIDER- claims for review in the case of an abnormal and representatives of providers of services, ATION. physicians, practitioners, facilities, and sup- billing pattern. The Secretary shall ensure, before making pliers, a process whereby, in the case of minor ‘‘(6) CONSENT SETTLEMENT REFORMS.— changes in documentation guidelines for, or errors or omissions (as defined by the Secretary) ‘‘(A) IN GENERAL.—The Secretary may use a clinical examples of, or codes to report evalua- that are detected in the submission of claims consent settlement (as defined in subparagraph tion and management physician services under under the programs under title XVIII of such (D)) to settle a projected overpayment. title XVIII of Social Security Act, that the proc- Act, a provider of services, physician, practi- ‘‘(B) OPPORTUNITY TO SUBMIT ADDITIONAL IN- ess used in developing such guidelines, exam- tioner, facility, or supplier is given an oppor- FORMATION BEFORE CONSENT SETTLEMENT ples, or codes was widely consultative among tunity to correct such an error or omission with- OFFER.—Before offering a provider of services, physicians, reflects a broad consensus among out the need to initiate an appeal. Such process physician, practitioner, or supplier a consent specialties, and would allow verification of re- shall include the ability to resubmit corrected settlement, the Secretary shall— ported and furnished services. ‘‘(i) communicate to the provider of services, claims. (b) DEADLINE.—Not later than 1 year after the SEC. 554. COUNCIL FOR TECHNOLOGY AND INNO- physician, practitioner, or supplier in a non- VATION. threatening manner that, based on a review of date of enactment of this Act, the Secretary Section 1868 (42 U.S.C. 1395ee), as amended by the medical records requested by the Secretary, shall first develop the process under subsection section 534(a), is amended by adding at the end a preliminary evaluation of those records indi- (a). the following new subsection: cates that there would be an overpayment; and SEC. 544. AUTHORITY TO WAIVE A PROGRAM EX- ‘‘(ii) provide for a 45-day period during which CLUSION. ‘‘(c) COUNCIL FOR TECHNOLOGY AND INNOVA- the provider of services, physician, practitioner, The first sentence of section 1128(c)(3)(B) (42 TION.— or supplier may furnish additional information U.S.C. 1320a–7(c)(3)(B)) is amended to read as ‘‘(1) ESTABLISHMENT.—The Secretary shall es- concerning the medical records for the claims follows: ‘‘Subject to subparagraph (G), in the tablish a Council for Technology and Innova- that had been reviewed. case of an exclusion under subsection (a), the tion within the Centers for Medicare & Med- ‘‘(C) CONSENT SETTLEMENT OFFER.—The Sec- minimum period of exclusion shall be not less icaid Services (in this section referred to as retary shall review any additional information than 5 years, except that, upon the request of ‘CMS’). furnished by the provider of services, physician, an administrator of a Federal health care pro- ‘‘(2) COMPOSITION.—The Council shall be com- practitioner, or supplier under subparagraph gram (as defined in section 1128B(f)) who deter- posed of senior CMS staff and clinicians and (B)(ii). Taking into consideration such informa- mines that the exclusion would impose a hard- shall be chaired by the Executive Coordinator tion, the Secretary shall determine if there still ship on beneficiaries of that program, the Sec- for Technology and Innovation (appointed or appears to be an overpayment. If so, the Sec- retary may, after consulting with the Inspector designated under paragraph (4)). retary— General of the Department of Health and ‘‘(3) DUTIES.—The Council shall coordinate ‘‘(i) shall provide notice of such determination Human Services, waive the exclusion under sub- the activities of coverage, coding, and payment to the provider of services, physician, practi- section (a)(1), (a)(3), or (a)(4) with respect to processes under this title with respect to new tioner, or supplier, including an explanation of that program in the case of an individual or en- technologies and procedures, including new the reason for such determination; and tity that is the sole community physician or sole drug therapies, and shall coordinate the ex- ‘‘(ii) in order to resolve the overpayment, may source of essential specialized services in a com- change of information on new technologies be- offer the provider of services, physician, practi- munity.’’. tween CMS and other entities that make similar tioner, or supplier— Subtitle F—Other Improvements decisions. ‘‘(I) the opportunity for a statistically valid SEC. 551. INCLUSION OF ADDITIONAL INFORMA- ‘‘(4) EXECUTIVE COORDINATOR FOR TECH- random sample; or TION IN NOTICES TO BENEFICIARIES NOLOGY AND INNOVATION.—The Secretary shall ‘‘(II) a consent settlement. ABOUT SKILLED NURSING FACILITY appoint (or designate) a noncareer appointee (as AND HOSPITAL BENEFITS. defined in section 3132(a)(7) of title 5, United The opportunity provided under clause (ii)(I) (a) IN GENERAL.—The Secretary shall provide States Code) who shall serve as the Executive does not waive any appeal rights with respect to that in medicare beneficiary notices provided Coordinator for Technology and Innovation. the alleged overpayment involved. (under section 1806(a) of the Social Security Act, Such executive coordinator shall report to the ‘‘(D) CONSENT SETTLEMENT DEFINED.—For 42 U.S.C. 1395b–7(a)) with respect to the provi- purposes of this paragraph, the term ‘consent Administrator of CMS, shall chair the Council, sion of post-hospital extended care services and settlement’ means an agreement between the shall oversee the execution of its duties, and inpatient hospital services under part A of title Secretary and a provider of services, physician, shall serve as a single point of contact for out- XVIII of the Social Security Act, there shall be practitioner, or supplier whereby both parties side groups and entities regarding the coverage, included information on the number of days of agree to settle a projected overpayment based on coding, and payment processes under this coverage of such services remaining under such less than a statistically valid sample of claims title.’’. part for the medicare beneficiary and spell of ill- and the provider of services, physician, practi- SEC. 555. TREATMENT OF CERTAIN DENTAL ness involved. tioner, or supplier agrees not to appeal the CLAIMS. FFECTIVE ATE (b) E D .—Subsection (a) shall (a) IN GENERAL.—Section 1862 (42 U.S.C. claims involved.’’. apply to notices provided during calendar quar- FFECTIVE DATES AND DEADLINES.— 1395y) is amended by adding after subsection (g) (b) E ters beginning more than 6 months after the (1) Not later than 1 year after the date of en- the following new subsection: date of enactment of this Act. actment of this Act, the Secretary shall first— ‘‘(h)(1) Subject to paragraph (2), a group (A) develop standards for the recovery of over- SEC. 552. INFORMATION ON MEDICARE-CER- health plan (as defined in subsection TIFIED SKILLED NURSING FACILI- (a)(1)(A)(v)) providing supplemental or sec- payments under section 1874A(h)(1)(B) of the TIES IN HOSPITAL DISCHARGE Social Security Act, as added by subsection (a); PLANS. ondary coverage to individuals also entitled to (B) establish the process for notice of over- (a) AVAILABILITY OF DATA.—The Secretary services under this title shall not require a medi- utilization of billing codes under section shall publicly provide information that enables care claims determination under this title for 1874A(h)(4) of the Social Security Act, as added hospital discharge planners, medicare bene- dental benefits specifically excluded under sub- by subsection (a); and ficiaries, and the public to identify skilled nurs- section (a)(12) as a condition of making a claims (C) establish a standard methodology for se- ing facilities that are participating in the medi- determination for such benefits under the group lection of sample claims for abnormal billing care program. health plan. patterns under section 1874A(h)(5) of the Social (b) INCLUSION OF INFORMATION IN CERTAIN ‘‘(2) A group health plan may require a claims Security Act, as added by subsection (a). HOSPITAL DISCHARGE PLANS.— determination under this title in cases involving (2) Section 1874A(h)(2) of the Social Security (1) IN GENERAL.—Section 1861(ee)(2)(D) (42 or appearing to involve inpatient dental hos- Act, as added by subsection (a), shall apply to U.S.C. 1395x(ee)(2)(D)) is amended— pital services or dental services expressly cov- actions taken after the date that is 1 year after (A) by striking ‘‘hospice services’’ and insert- ered under this title pursuant to actions taken the date of enactment of this Act. ing ‘‘hospice care and post-hospital extended by the Secretary.’’. (3) Section 1874A(h)(3) of the Social Security care services’’; and (b) EFFECTIVE DATE.—The amendment made Act, as added by subsection (a), shall apply to (B) by inserting before the period at the end by subsection (a) shall take effect on the date audits initiated after the date of enactment of the following: ‘‘and, in the case of individuals that is 60 days after the date of enactment of this Act. who are likely to need post-hospital extended this Act.

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00107 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8976 CONGRESSIONAL RECORD — SENATE July 7, 2003 TITLE VI—OTHER PROVISIONS amended by inserting ‘‘, paragraph (4),’’ after ‘‘(A) permit the State whose waiver was re- SEC. 601. INCREASE IN MEDICAID DSH ALLOT- ‘‘subparagraph (B)’’. voked or terminated to submit an amendment to MENTS FOR FISCAL YEARS 2004 AND (d) URBAN HEALTH PROVIDER ADJUSTMENT.— its State plan that would describe the method- 2005. (1) IN GENERAL.—Beginning with fiscal year ology to be used by the State (after the effective (a) IN GENERAL.—Section 1923(f)(4) (42 U.S.C. 2004, notwithstanding section 1923(f) of the So- date of such revocation or termination) to iden- 1396r–4(f)(4)) is amended— cial Security Act (42 U.S.C. 1396r–4(f)) and sub- tify and make payments to disproportionate (1) in the paragraph heading, by striking ject to paragraph (3), with respect to a State, share hospitals, including children’s hospitals ‘‘FISCAL YEARS 2001 AND 2002’’ and inserting payment adjustments made under title XIX of and institutions for mental diseases or other ‘‘CERTAIN FISCAL YEARS’’; the Social Security Act (42 U.S.C. 1396 et seq.) to mental health facilities (other than State-owned (2) in subparagraph (A)— a hospital described in paragraph (2) shall be institutions or facilities), on the basis of the pro- (A) in clause (i)— made without regard to the DSH allotment limi- portion of patients served by such hospitals that (i) by striking ‘‘paragraph (2)’’ and inserting tation for the State determined under section are low-income patients with special needs; and ‘‘paragraphs (2) and (3)’’; and 1923(f) of that Act (42 U.S.C. 1396r–4(f)). ‘‘(B) provide for purposes of this subsection (ii) by striking ‘‘and’’ at the end; (2) HOSPITAL DESCRIBED.—A hospital is de- for computation of an appropriate DSH allot- (B) in clause (ii), by striking the period and scribed in this paragraph if the hospital— ment for the State for fiscal year 2004 or 2005 (or inserting a semicolon; and (A) is owned or operated by a State (as de- both) that provides for the maximum amount (C) by adding at the end the following: fined for purposes of title XIX of the Social Se- (permitted consistent with paragraph (3)(B)(ii)) ‘‘(iii) for fiscal year 2004, shall be the DSH al- curity Act), or by an instrumentality or a mu- that does not result in greater expenditures lotment determined under paragraph (3) for that nicipal governmental unit within a State (as so under this title than would have been made if fiscal year increased by the amount equal to the defined) as of January 1, 2003; and such waiver had not been revoked or termi- product of 0.50 and the difference between— (B) is located in Marion County, Indiana. nated.’’. (3) LIMITATION.—The payment adjustment de- ‘‘(I) the amount that the DSH allotment (2) TREATMENT OF INSTITUTIONS FOR MENTAL scribed in paragraph (1) for fiscal year 2004 and would be if the DSH allotment for the State de- DISEASES.—Section 1923(h)(1) of the Social Secu- each fiscal year thereafter shall not exceed 175 termined under clause (ii) were increased, sub- rity Act (42 U.S.C. 1396r–4(h)(1)) is amended— percent of the costs of furnishing hospital serv- ject to subparagraph (B) and paragraph (5), by (A) in paragraph (1), in the matter preceding ices described in section 1923(g)(1)(A) of the So- the percentage change in the Consumer Price subparagraph (A), by inserting ‘‘(subject to cial Security Act (42 U.S.C. 1396r–4(g)(1)(A)). Index for all urban consumers (all items; U.S. paragraph (3))’’ after ‘‘the lesser of the fol- city average) for each of fiscal years 2002 and SEC. 602. INCREASE IN FLOOR FOR TREATMENT lowing’’; and AS AN EXTREMELY LOW DSH STATE 2003; and (B) by adding at the end the following new ‘‘(II) the DSH allotment determined under UNDER THE MEDICAID PROGRAM FOR FISCAL YEARS 2004 AND 2005. paragraph: paragraph (3) for the State for fiscal year 2004; (a) IN GENERAL.—Section 1923(f)(5) (42 U.S.C. ‘‘(3) SPECIAL RULE.—The limitation of para- and 1396r–4(f)(5)) is amended— graph (1) shall not apply in the case of a State ‘‘(iv) for fiscal year 2005, shall be the DSH al- (1) by striking ‘‘In the case of’’ and inserting to which subsection (f)(6) applies.’’. lotment determined under paragraph (3) for that the following: (3) APPLICATION TO HAWAII.—Section 1923(f) fiscal year increased by the amount equal to the ‘‘(A) IN GENERAL.—In the case of’’; and (42 U.S.C. 1396r–4(f)), as amended by paragraph product of 0.50 and the difference between— (2) by adding at the end the following: (1), is amended— ‘‘(I) the amount that the DSH allotment ‘‘(B) INCREASE IN FLOOR FOR FISCAL YEARS 2004 (A) by redesignating paragraph (7) as para- would be if the DSH allotment for the State de- AND 2005.— graph (8); and termined under clause (ii) were increased, sub- ‘‘(i) FISCAL YEAR 2004.—In the case of a State (B) by inserting after paragraph (6), the fol- ject to subparagraph (B) and paragraph (5), by in which the total expenditures under the State lowing: the percentage change in the Consumer Price plan (including Federal and State shares) for ‘‘(7) TREATMENT OF HAWAII AS A LOW-DSH Index for all urban consumers (all items; U.S. disproportionate share hospital adjustments STATE.—The Secretary shall compute a DSH al- city average) for each of fiscal years 2002, 2003, under this section for fiscal year 2000, as re- lotment for the State of Hawaii for each of fiscal and 2004; and ported to the Administrator of the Centers for years 2004 and 2005 in the same manner as DSH ‘‘(II) the DSH allotment determined under Medicare & Medicaid Services as of August 31, allotments are determined with respect to those paragraph (3) for the State for fiscal year 2003, is greater than 0 but less than 3 percent of States to which paragraph (5) applies (but with- 2005.’’; and the State’s total amount of expenditures under out regard to the requirement under such para- (3) in subparagraph (C)— the State plan for medical assistance during the graph that total expenditures under the State (A) in the subparagraph heading, by striking fiscal year, the DSH allotment for fiscal year plan for disproportionate share hospital adjust- ‘‘AFTER FISCAL YEAR 2002’’ and inserting ‘‘FOR 2004 shall be increased to 3 percent of the State’s ments for any fiscal year exceeds 0).’’. OTHER FISCAL YEARS’’; and total amount of expenditures under such plan (B) by striking ‘‘2003 or’’ and inserting ‘‘2003, SEC. 603. INCREASED REPORTING REQUIRE- for such assistance during such fiscal year. MENTS TO ENSURE THE APPRO- fiscal year 2006, or’’. ‘‘(ii) FISCAL YEAR 2005.—In the case of a State PRIATENESS OF PAYMENT ADJUST- (b) DSH ALLOTMENT FOR THE DISTRICT OF CO- in which the total expenditures under the State MENTS TO DISPROPORTIONATE LUMBIA.—Section 1923(f)(4) (42 U.S.C. 1396r– plan (including Federal and State shares) for SHARE HOSPITALS UNDER THE MED- 4(f)(4)), as amended by paragraph (1), is amend- disproportionate share hospital adjustments ICAID PROGRAM. ed— under this section for fiscal year 2001, as re- Section 1923 (42 U.S.C. 1396r–4) is amended by (1) in subparagraph (A), by inserting ‘‘and ex- ported to the Administrator of the Centers for adding at the end the following new subsection: cept as provided in subparagraph (C)’’ after Medicare & Medicaid Services as of August 31, ‘‘(j) ANNUAL REPORTS REGARDING PAYMENT ‘‘paragraph (2)’’; 2004, is greater than 0 but less than 3 percent of ADJUSTMENTS.—With respect to fiscal year 2004 (2) by redesignating subparagraph (C) as sub- the State’s total amount of expenditures under and each fiscal year thereafter, the Secretary paragraph (D); and the State plan for medical assistance during the shall require a State, as a condition of receiving (3) by inserting after subparagraph (B) the fiscal year, the DSH allotment for fiscal year a payment under section 1903(a)(1) with respect following: 2005 shall be the DSH allotment determined for to a payment adjustment made under this sec- ‘‘(C) DSH ALLOTMENT FOR THE DISTRICT OF the State for fiscal year 2004 (under clause (i) or tion, to submit an annual report that— COLUMBIA.— paragraph (4) (as applicable)), increased by the ‘‘(1) identifies each disproportionate share ‘‘(i) IN GENERAL.—Notwithstanding subpara- percentage change in the consumer price index hospital that received a payment adjustment graph (A), the DSH allotment for the District of for all urban consumers (all items; U.S. city av- under this section for the preceding fiscal year Columbia for fiscal year 2004, shall be deter- erage) for fiscal year 2004. and the amount of the payment adjustment mined by substituting ‘‘49’’ for ‘‘32’’ in the item ‘‘(iii) NO APPLICATION TO ALLOTMENTS AFTER made to such hospital for the preceding fiscal in the table contained in paragraph (2) with re- FISCAL YEAR 2005.—The DSH allotment for any year; and spect to the DSH allotment for FY 00 (fiscal year State for fiscal year 2006 or any succeeding fis- ‘‘(2) includes such other information as the 2000) for the District of Columbia, and then in- cal year shall be determined under this sub- Secretary determines necessary to ensure the ap- creasing such allotment, subject to subpara- section without regard to the DSH allotments propriateness of the payment adjustments made graph (B) and paragraph (5), by the percentage determined under this subparagraph.’’. under this section for the preceding fiscal change in the Consumer Price Index for all (b) ALLOTMENT ADJUSTMENT.— year.’’. urban consumers (all items; U.S. city average) (1) IN GENERAL.—Section 1923(f) of the Social SEC. 604. CLARIFICATION OF INCLUSION OF INPA- for each of fiscal years 2000, 2001, 2002, and Security Act (42 U.S.C. 1396r–4(f)) is amended— TIENT DRUG PRICES CHARGED TO 2003. (A) by redesignating paragraph (6) as para- CERTAIN PUBLIC HOSPITALS IN THE ‘‘(ii) NO APPLICATION TO ALLOTMENTS AFTER graph (7); and BEST PRICE EXEMPTIONS FOR THE FISCAL YEAR 2004.—The DSH allotment for the (B) by inserting after paragraph (5) the fol- MEDICAID DRUG REBATE PROGRAM. District of Columbia for fiscal year 2003, fiscal lowing: (a) IN GENERAL.—Section 1927(c)(1)(C)(i)(I) of year 2005, or any succeeding fiscal year shall be ‘‘(6) ALLOTMENT ADJUSTMENT.—Only with re- the Social Security Act (42 U.S.C. 1396r– determined under paragraph (3) without regard spect to fiscal year 2004 or 2005, if a statewide 8(c)(1)(C)(i)(I)) is amended by inserting before to the DSH allotment determined under clause waiver under section 1115 that was implemented the semicolon the following: ‘‘(including inpa- (i).’’. on January 1, 1994, is revoked or terminated be- tient prices charged to hospitals described in (c) CONFORMING AMENDMENT.—Section fore the end of either such fiscal year, the Sec- section 340B(a)(4)(L) of the Public Health Serv- 1923(f)(3) of such Act (42 U.S.C. 1396r–4(f)(3)) is retary shall— ice Act)’’.

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(b) ANTI-DIVERSION PROTECTION.—Section ‘‘(i) $1; and serve funds, capital issuance expenses, and 1927(c)(1)(C) of the Social Security Act (42 ‘‘(ii) the total number of individuals receiving other carrying costs during construction; U.S.C. 1396r–8(c)(1)(C)) is amended by adding at benefits under this title for the calendar year ‘‘(D) major medical equipment determined to the end the following: ending on December 31 of the preceding fiscal be appropriate by the Secretary; and ‘‘(iii) APPLICATION OF AUDITING AND RECORD- year.’’. ‘‘(E) refinancing projects or activities that are KEEPING REQUIREMENTS.—With respect to a cov- (b) CONFORMING AMENDMENT.—Section 4360(g) otherwise eligible for financial assistance under ered entity described in section 340B(a)(4)(L) of of the Omnibus Budget Reconciliation Act of subparagraphs (A) through (D). the Public Health Service Act, any drug pur- 1990 (42 U.S.C. 1395b–4(g)) is amended to read as ‘‘(2) FEDERAL CREDIT INSTRUMENT.—The term chased for inpatient use shall be subject to the follows: ‘Federal credit instrument’ means a secured auditing and recordkeeping requirements de- ‘‘(g) FUNDING.—The Secretary shall use loan, loan guarantee, or line of credit author- scribed in section 340B(a)(5)(C) of the Public amounts appropriated to the Consumer Ombuds- ized to be made available under this title with Health Service Act.’’. man Account in accordance with section 1817(i) respect to a project. (c) EFFECTIVE DATE.—The amendments made of the Social Security Act for a fiscal year for ‘‘(3) INVESTMENT-GRADE RATING.—The term by this section take effect on October 1, 2003. making grants under this section for that fiscal ‘investment-grade rating’ means a rating cat- SEC. 605. ASSISTANCE WITH COVERAGE OF LEGAL year.’’. egory of BBB minus, Baa3, or higher assigned IMMIGRANTS UNDER THE MEDICAID SEC. 607. GAO STUDY REGARDING IMPACT OF AS- by a rating agency to project obligations offered PROGRAM AND SCHIP. SETS TEST FOR LOW-INCOME BENE- into the capital markets. (a) MEDICAID PROGRAM.—Section 1903(v) (42 FICIARIES. ‘‘(4) LENDER.—The term ‘lender’ means any U.S.C. 1396b(v)) is amended— (a) STUDY.—The Comptroller General of the non-Federal qualified institutional buyer (as de- (1) in paragraph (1), by striking ‘‘paragraph United States shall conduct a study to deter- fined in section 230.144A(a) of title 17, Code of (2)’’ and inserting ‘‘paragraphs (2) and (4)’’; mine the extent to which drug utilization and Federal Regulations (or any successor regula- and access to covered drugs for an individual de- tion), known as Rule 144A(a) of the Securities (2) by adding at the end the following new scribed in subsection (b) differs from the drug and Exchange Commission and issued under the paragraph: utilization and access to covered drugs of an in- Securities Act of 1933 (15 U.S.C. 77a et seq.)), in- ‘‘(4)(A) With respect to any or all of fiscal dividual who qualifies for the transitional as- cluding— years 2005 through 2007, a State may elect (in a sistance prescription drug card program under ‘‘(A) a qualified retirement plan (as defined in plan amendment under this title) to provide section 1807A of the Social Security Act (as section 4974(c) of the Internal Revenue Code of medical assistance under this title (including added by section 111) or for the premiums and 1986) that is a qualified institutional buyer; and under a waiver authorized by the Secretary) for cost-sharing subsidies applicable to a qualified ‘‘(B) a governmental plan (as defined in sec- aliens who are lawfully residing in the United medicare beneficiary, a specified low-income tion 414(d) of the Internal Revenue Code of States (including battered aliens described in medicare beneficiary, or a qualifying individual 1986) that is a qualified institutional buyer. section 431(c) of such Act) and who are other- under section 1860D–19 of the Social Security ‘‘(5) LINE OF CREDIT.—The term ‘line of credit’ wise eligible for such assistance, within either or Act (as added by section 101). means an agreement entered into by the Sec- both of the following eligibility categories: (b) INDIVIDUAL DESCRIBED.—An individual is retary with an obligor under section 2204 to pro- ‘‘(i) PREGNANT WOMEN.—Women during preg- described in this subsection if the individual vide a direct loan at a future date upon the oc- nancy (and during the 60-day period beginning does not qualify for the transitional assistance currence of certain events. on the last day of the pregnancy). prescription drug card program under section ‘‘(6) LOAN GUARANTEE.—The term ‘loan guar- ‘‘(ii) CHILDREN.—Children (as defined under 1807A of the Social Security Act or for the pre- antee’ means any guarantee or other pledge by such plan), including optional targeted low-in- miums and cost-sharing subsidies applicable to a the Secretary to pay all or part of the principal come children described in section 1905(u)(2)(B). qualified medicare beneficiary, a specified low- of and interest on a loan or other debt obliga- ‘‘(B)(i) In the case of a State that has elected income medicare beneficiary, or a qualifying in- tion issued by an obligor and funded by a lend- to provide medical assistance to a category of dividual under section 1860D–19 of the Social Se- er. aliens under subparagraph (A), no debt shall curity Act solely as a result of the application of ‘‘(7) LOCAL SERVICER.—The term ‘local accrue under an affidavit of support against an assets test to the individual. servicer’ means a State or local government or any sponsor of such an alien on the basis of (c) REPORT.—Not later than September 30, any agency of a State or local government that provision of assistance to such category and the 2007, the Comptroller General shall submit a re- is responsible for servicing a Federal credit in- cost of such assistance shall not be considered port to Congress on the study conducted under strument on behalf of the Secretary. as an unreimbursed cost. subsection (a) that includes such recommenda- ‘‘(8) OBLIGOR.—The term ‘obligor’ means a ‘‘(ii) The provisions of sections 401(a), 402(b), tions for legislation as the Comptroller General party primarily liable for payment of the prin- 403, and 421 of the Personal Responsibility and determines are appropriate. cipal of or interest on a Federal credit instru- Work Opportunity Reconciliation Act of 1996 (d) DEFINITIONS.—In this section: ment, which party may be a corporation, part- shall not apply to a State that makes an elec- (1) COVERED DRUGS.—The term ‘‘covered nership, joint venture, trust, or governmental tion under subparagraph (A).’’. drugs’’ has the meaning given that term in sec- entity, agency, or instrumentality. (b) SCHIP.—Section 2107(e)(1) (42 U.S.C. tion 1860D(a)(D) of the Social Security Act. 1397gg(e)(1)) is amended by redesignating sub- ‘‘(9) PROJECT.—The term ‘project’ means any (2) QUALIFIED MEDICARE BENEFICIARY; SPECI- project that is designed to improve the health paragraphs (C) and (D) as subparagraph (D) FIED LOW-INCOME MEDICARE BENEFICIARY; and (E), respectively, and by inserting after sub- care infrastructure, including the construction, QUALIFYING INDIVIDUAL.—The terms ‘‘qualified renovation, or other capital improvement of any paragraph (B) the following new subparagraph: medicare beneficiary’’, ‘‘specified low-income ‘‘(C) Section 1903(v)(4) (relating to optional hospital, medical research facility, or other med- medicare beneficiary’’ and ‘‘qualifying indi- ical facility or the purchase of any equipment to coverage of categories of permanent resident vidual’’ have the meaning given those terms alien children), but only if the State has elected be used in a hospital, research facility, or other under section 1860D–19 of the Social Security medical research facility. to apply such section to the category of children Act. under title XIX and only with respect to any or ‘‘(10) PROJECT OBLIGATION.—The term ‘project all of fiscal years 2005 through 2007.’’. SEC. 608. HEALTH CARE INFRASTRUCTURE IM- obligation’ means any note, bond, debenture, PROVEMENT. lease, installment sale agreement, or other debt SEC. 606. ESTABLISHMENT OF CONSUMER OM- At the end of the Social Security Act, add the obligation issued or entered into by an obligor in BUDSMAN ACCOUNT. following new title: (a) IN GENERAL.—Section 1817 (42 U.S.C. connection with the financing of a project, 1395i) is amended by adding at the end the fol- ‘‘TITLE XXII—HEALTH CARE other than a Federal credit instrument. lowing new subsection: INFRASTRUCTURE IMPROVEMENT ‘‘(11) RATING AGENCY.—The term ‘rating agen- ‘‘(i) CONSUMER OMBUDSMAN ACCOUNT.— ‘‘SEC. 2201. DEFINITIONS. cy’ means a bond rating agency identified by ‘‘(1) ESTABLISHMENT.—There is hereby estab- ‘‘In this title, the following definitions apply: the Securities and Exchange Commission as a lished in the Trust Fund an expenditure ac- ‘‘(1) ELIGIBLE PROJECT COSTS.—The term ‘eli- Nationally Recognized Statistical Rating Orga- count to be known as the ‘Consumer Ombuds- gible project costs’ means amounts substantially nization. man Account’ (in this subsection referred to as all of which are paid by, or for the account of, ‘‘(12) SECURED LOAN.—The term ‘secured loan’ the ‘Account’). an obligor in connection with a project, includ- means a direct loan or other debt obligation ‘‘(2) APPROPRIATED AMOUNTS TO ACCOUNT FOR ing the cost of— issued by an obligor and funded by the Sec- HEALTH INSURANCE INFORMATION, COUNSELING, ‘‘(A) development phase activities, including retary in connection with the financing of a AND ASSISTANCE GRANTS.— planning, feasibility analysis, revenue fore- project under section 2203. ‘‘(A) IN GENERAL.—There are hereby appro- casting, environmental study and review, per- ‘‘(13) STATE.—The term ‘State’ has the mean- priated to the Account from the Trust Fund for mitting, architectural engineering and design ing given the term in section 101 of title 23, each fiscal year beginning with fiscal year 2005, work, and other preconstruction activities; United States Code. the amount described in subparagraph (B) for ‘‘(B) construction, reconstruction, rehabilita- ‘‘(14) SUBSIDY AMOUNT.—The term ‘subsidy such fiscal year for the purpose of making tion, replacement, and acquisition of facilities amount’ means the amount of budget authority grants under section 4360 of the Omnibus Budg- and real property (including land related to the sufficient to cover the estimated long-term cost et Reconciliation Act of 1990. project and improvements to land), environ- to the Federal Government of a Federal credit ‘‘(B) AMOUNT DESCRIBED.—For purposes of mental mitigation, construction contingencies, instrument, calculated on a net present value subparagraph (A), the amount described in this and acquisition of equipment; basis, excluding administrative costs and any subparagraph for a fiscal year is the amount ‘‘(C) capitalized interest necessary to meet incidental effects on governmental receipts or equal to the product of— market requirements, reasonably required re- outlays in accordance with the provisions of the

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Federal Credit Reform Act of 1990 (2 U.S.C. 661 ‘‘(1) AGREEMENTS.—Subject to paragraphs (2) under this section shall include any revenue et seq.). through (4), the Secretary may enter into agree- generated by the project. ‘‘(15) SUBSTANTIAL COMPLETION.—The term ments with 1 or more obligors to make secured ‘‘(4) DEFERRED PAYMENTS.— ‘substantial completion’ means the opening of a loans, the proceeds of which shall be used— ‘‘(A) AUTHORIZATION.—If, at any time during project to patients or for research purposes. ‘‘(A) to finance eligible project costs; the 10 years after the date of substantial com- ‘‘SEC. 2202. DETERMINATION OF ELIGIBILITY AND ‘‘(B) to refinance interim construction financ- pletion of the project, the project is unable to PROJECT SELECTION. ing of eligible project costs; or generate sufficient revenues to pay the sched- ‘‘(a) ELIGIBILITY.—To be eligible to receive fi- ‘‘(C) to refinance existing debt or prior project uled loan repayments of principal and interest nancial assistance under this title, a project obligations; on the secured loan, the Secretary may, subject shall meet the following criteria: of any project selected under section 2202. to subparagraph (C), allow the obligor to add ‘‘(2) LIMITATION ON REFINANCING OF INTERIM ‘‘(1) APPLICATION.—A State, a local servicer unpaid principal and interest to the outstanding CONSTRUCTION FINANCING.—A loan under para- identified under section 2205(a), or the entity balance of the secured loan. graph (1) shall not refinance interim construc- undertaking a project shall submit a project ap- ‘‘(B) INTEREST.—Any payment deferred under tion financing under paragraph (1)(B) later plication to the Secretary. subparagraph (A) shall— than 1 year after the date of substantial comple- ‘‘(2) ELIGIBLE PROJECT COSTS.—To be eligible ‘‘(i) continue to accrue interest in accordance for assistance under this title, a project shall tion of the project. with subsection (b)(4) until fully repaid; and ‘‘(3) RISK ASSESSMENT.—Before entering into have total eligible project costs that are reason- ‘‘(ii) be scheduled to be amortized over the re- an agreement for a secured loan under this sub- ably anticipated to equal or exceed $40,000,000. maining term of the loan beginning not later section, the Secretary, in consultation with each ‘‘(3) SOURCES OF REPAYMENTS.—Project fi- than 10 years after the date of substantial com- rating agency providing a rating letter under nancing shall be repayable, in whole or in part, pletion of the project in accordance with para- section 2202(b)(2)(B), shall determine an appro- from reliable revenue sources as described in the graph (1). priate capital reserve subsidy amount for each application submitted under paragraph (1). ‘‘(C) CRITERIA.— secured loan, taking into account such letter. ‘‘(4) PUBLIC SPONSORSHIP OF PRIVATE ENTI- ‘‘(i) IN GENERAL.—Any payment deferral ‘‘(4) INVESTMENT-GRADE RATING REQUIRE- TIES.—In the case of a project that is under- under subparagraph (A) shall be contingent on MENT.—The funding of a secured loan under the project meeting criteria established by the taken by an entity that is not a State or local this section shall be contingent on the project’s government or an agency or instrumentality of Secretary. senior obligations receiving an investment-grade ‘‘(ii) REPAYMENT STANDARDS.—The criteria es- a State or local government, the project that the rating, except that— entity is undertaking shall be publicly spon- tablished under clause (i) shall include stand- ‘‘(A) the Secretary may fund an amount of ards for reasonable assurance of repayment. sored or sponsored by an entity that is described the secured loan not to exceed the capital rein section 501(c)(3) of the Internal Revenue Code ‘‘(5) PREPAYMENT.— serve subsidy amount determined under para- ‘‘(A) USE OF EXCESS REVENUES.—Any excess of 1986 and exempt from tax under section 501(a) graph (3) prior to the obligations receiving an of such Code. revenues that remain after satisfying scheduled investment-grade rating; and debt service requirements on the project obliga- ‘‘(b) SELECTION AMONG ELIGIBLE PROJECTS.— ‘‘(B) the Secretary may fund the remaining tions and secured loan and all deposit require- ‘‘(1) ESTABLISHMENT.—The Secretary shall es- portion of the secured loan only after the obli- tablish criteria for selecting among projects that ments under the terms of any trust agreement, gations have received an investment-grade rat- bond resolution, reimbursement agreement, cred- meet the eligibility criteria specified in sub- ing by at least 1 rating agency. section (a). it agreement, loan agreement, or similar agree- ‘‘(b) TERMS AND LIMITATIONS.— ment securing project obligations may be applied ‘‘(2) SELECTION CRITERIA.— ‘‘(1) IN GENERAL.—A secured loan under this annually to prepay the secured loan without ‘‘(A) IN GENERAL.—The selection criteria shall section with respect to a project shall be on such penalty. include the following: terms and conditions and contain such cov- ‘‘(i) The extent to which the project is nation- ‘‘(B) USE OF PROCEEDS OF REFINANCING.—The enants, representations, warranties, and re- secured loan may be prepaid at any time with- ally or regionally significant, in terms of ex- quirements (including requirements for audits) panding or improving the health care infra- out penalty, regardless of whether such repay- as the Secretary determines appropriate. ment is from the proceeds of refinancing from structure of the United States or the region or in ‘‘(2) MAXIMUM AMOUNT.—The amount of the non-Federal funding sources. terms of the medical benefit that the project will secured loan shall not exceed 100 percent of the ‘‘(6) FORGIVENESS OF INDEBTEDNESS.—The have. reasonably anticipated eligible project costs. Secretary may forgive a loan secured under this ‘‘(ii) The creditworthiness of the project, in- ‘‘(3) PAYMENT.—The secured loan— title under terms and conditions that are analo- cluding a determination by the Secretary that ‘‘(A) shall— gous to the loan forgiveness provision for stu- any financing for the project has appropriate ‘‘(i) be payable, in whole or in part, from reli- dent loans under part D of title IV of the Higher security features, such as a rate covenant, cred- able revenue sources; and Education Act of 1965 (20 U.S.C. 1087a et seq.), it enhancement requirements, or debt services ‘‘(ii) include a rate covenant, coverage re- except that the Secretary shall condition such coverages, to ensure repayment. quirement, or similar security feature supporting forgiveness on the establishment by the project ‘‘(iii) The extent to which assistance under the project obligations; and of— this title would foster innovative public-private ‘‘(B) may have a lien on revenues described in ‘‘(A) an outreach program for cancer preven- partnerships and attract private debt or equity subparagraph (A) subject to any lien securing tion, early diagnosis, and treatment that pro- investment. project obligations. vides services to a substantial majority of the ‘‘(iv) The likelihood that assistance under this ‘‘(4) INTEREST RATE.—The interest rate on the residents of a State or region, including resi- title would enable the project to proceed at an secured loan shall be not less than the yield on dents of rural areas; earlier date than the project would otherwise be marketable United States Treasury securities of ‘‘(B) an outreach program for cancer preven- able to proceed. a similar maturity to the maturity of the secured tion, early diagnosis, and treatment that pro- ‘‘(v) The extent to which the project uses or loan on the date of execution of the loan agree- vides services to multiple Indian tribes; and results in new technologies. ment. ‘‘(5) MATURITY DATE.—The final maturity ‘‘(C)(i) unique research resources (such as ‘‘(vi) The amount of budget authority required population databases); or to fund the Federal credit instrument made date of the secured loan shall be not later than 30 years after the date of substantial completion ‘‘(ii) an affiliation with an entity that has available under this title. unique research resources. ‘‘(vii) The extent to which the project helps of the project. ‘‘(6) NONSUBORDINATION.—The secured loan ‘‘(d) SALE OF SECURED LOANS.— maintain or protect the environment. shall not be subordinated to the claims of any ‘‘(1) IN GENERAL.—Subject to paragraph (2), as ‘‘(B) SPECIFIC REQUIREMENTS.—The selection soon as practicable after substantial completion criteria shall require that a project applicant— holder of project obligations in the event of bankruptcy, insolvency, or liquidation of the ob- of a project and after notifying the obligor, the ‘‘(i) be engaged in research in the causes, pre- Secretary may sell to another entity or reoffer vention, and treatment of cancer; ligor. ‘‘(7) FEES.—The Secretary may establish fees into the capital markets a secured loan for the ‘‘(ii) be designated as a cancer center for the at a level sufficient to cover all or a portion of project if the Secretary determines that the sale National Cancer Institute or be designated by the costs to the Federal Government of making or reoffering can be made on favorable terms. the State as the official cancer institute of the a secured loan under this section. ‘‘(2) CONSENT OF OBLIGOR.—In making a sale State; and ‘‘(c) REPAYMENT.— or reoffering under paragraph (1), the Secretary ‘‘(iii) be located in a State that, on the date of ‘‘(1) SCHEDULE.—The Secretary shall establish may not change the original terms and condi- enactment of this title, has a population of less a repayment schedule for each secured loan tions of the secured loan without the written than 3,000,000 individuals. under this section based on the projected cash consent of the obligor. ‘‘(C) RATING LETTER.—For purposes of sub- flow from project revenues and other repayment ‘‘(e) LOAN GUARANTEES.— paragraph (A)(ii), the Secretary shall require sources. ‘‘(1) IN GENERAL.—The Secretary may provide each project applicant to provide a rating letter ‘‘(2) COMMENCEMENT.—Scheduled loan repay- a loan guarantee to a lender in lieu of making from at least 1 rating agency indicating that the ments of principal or interest on a secured loan a secured loan if the Secretary determines that project’s senior obligations have the potential to under this section shall commence not later than the budgetary cost of the loan guarantee is sub- achieve an investment-grade rating with or 5 years after the date of substantial completion stantially the same as that of a secured loan. without credit enhancement. of the project. ‘‘(2) TERMS.—The terms of a guaranteed loan ‘‘SEC. 2203. SECURED LOANS. ‘‘(3) SOURCES OF REPAYMENT FUNDS.—The shall be consistent with the terms set forth in ‘‘(a) IN GENERAL.— sources of funds for scheduled loan repayments this section for a secured loan, except that the

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rate on the guaranteed loan and any prepay- ‘‘(9) FEES.—The Secretary may establish fees a contractual obligation to fund the Federal ment features shall be negotiated between the at a level sufficient to cover all or a portion of credit instrument. obligor and the lender, with the consent of the the costs to the Federal Government of pro- ‘‘(c) AVAILABILITY.—Amounts appropriated Secretary. viding a line of credit under this section. under this section shall be available for obliga- ‘‘SEC. 2204. LINES OF CREDIT. ‘‘(10) RELATIONSHIP TO OTHER CREDIT INSTRU- tion on July 1, 2004. ‘‘(a) IN GENERAL.— MENTS.—A project that receives a line of credit ‘‘SEC. 2209. REPORT TO CONGRESS. ‘‘(1) AGREEMENTS.—Subject to paragraphs (2) under this section also shall not receive a se- ‘‘Not later than 4 years after the date of en- through (4), the Secretary may enter into agree- cured loan or loan guarantee under section 2203 actment of this title, the Secretary shall submit ments to make available lines of credit to 1 or of an amount that, combined with the amount to Congress a report summarizing the financial more obligors in the form of direct loans to be of the line of credit, exceeds 100 percent of eligi- performance of the projects that are receiving, made by the Secretary at future dates on the oc- ble project costs. or have received, assistance under this title, in- currence of certain events for any project se- ‘‘(c) REPAYMENT.— cluding a recommendation as to whether the ob- lected under section 2202. ‘‘(1) TERMS AND CONDITIONS.—The Secretary jectives of this title are best served— ‘‘(2) USE OF PROCEEDS.—The proceeds of a shall establish repayment terms and conditions ‘‘(1) by continuing the program under the au- line of credit made available under this section for each direct loan under this section based on thority of the Secretary; shall be available to pay debt service on project the projected cash flow from project revenues ‘‘(2) by establishing a Government corporation obligations issued to finance eligible project and other repayment sources. or Government-sponsored enterprise to admin- costs, extraordinary repair and replacement ‘‘(2) TIMING.—All scheduled repayments of ister the program; or costs, operation and maintenance expenses, and principal or interest on a direct loan under this ‘‘(3) by phasing out the program and relying costs associated with unexpected Federal or section shall commence not later than 5 years on the capital markets to fund the types of in- State environmental restrictions. after the end of the period of availability speci- frastructure investments assisted by this title ‘‘(3) RISK ASSESSMENT.—Before entering into fied in subsection (b)(6) and be fully repaid, without Federal participation.’’. an agreement for a secured loan under this sub- with interest, by the date that is 25 years after SEC. 609. CAPITAL INFRASTRUCTURE REVOLVING section, the Secretary, in consultation with each the end of the period of availability specified in LOAN PROGRAM. rating agency providing a rating letter under subsection (b)(6). (a) IN GENERAL.—Part A of title XVI of the section 2202(b)(2)(B), shall determine an appro- ‘‘(3) SOURCES OF REPAYMENT FUNDS.—The Public Health Service Act (42 U.S.C. 300q et seq.) priate subsidy amount for each secured loan, sources of funds for scheduled loan repayments is amended by adding at the end the following taking into account such letter. under this section shall include reliable revenue new section: ‘‘(4) INVESTMENT-GRADE RATING REQUIRE- sources. ‘‘CAPITAL INFRASTRUCTURE REVOLVING LOAN MENT.—The funding of a line of credit under ‘‘SEC. 2205. PROJECT SERVICING. PROGRAM this section shall be contingent on the project’s ‘‘(a) REQUIREMENT.—The State in which a ‘‘SEC. 1603. (a) AUTHORITY TO MAKE AND senior obligations receiving an investment-grade project that receives financial assistance under GUARANTEE LOANS.— rating from at least 1 rating agency. this title is located may identify a local servicer ‘‘(1) AUTHORITY TO MAKE LOANS.—The Sec- ‘‘(b) TERMS AND LIMITATIONS.— to assist the Secretary in servicing the Federal retary may make loans from the fund estab- ‘‘(1) IN GENERAL.—A line of credit under this credit instrument made available under this lished under section 1602(d) to any rural entity section with respect to a project shall be on such title. for projects for capital improvements, includ- terms and conditions and contain such cov- ‘‘(b) AGENCY; FEES.—If a State identifies a ing— enants, representations, warranties, and re- local servicer under subsection (a), the local ‘‘(A) the acquisition of land necessary for the quirements (including requirements for audits) servicer— capital improvements; as the Secretary determines appropriate. ‘‘(1) shall act as the agent for the Secretary; ‘‘(B) the renovation or modernization of any ‘‘(2) MAXIMUM AMOUNTS.— and building; ‘‘(A) TOTAL AMOUNT.—The total amount of ‘‘(2) may receive a servicing fee, subject to ap- ‘‘(C) the acquisition or repair of fixed or major the line of credit shall not exceed 33 percent of proval by the Secretary. movable equipment; and the reasonably anticipated eligible project costs. ‘‘(c) LIABILITY.—A local servicer identified ‘‘(D) such other project expenses as the Sec- ‘‘(B) 1-YEAR DRAWS.—The amount drawn in under subsection (a) shall not be liable for the retary determines appropriate. any 1 year shall not exceed 20 percent of the obligations of the obligor to the Secretary or any ‘‘(2) AUTHORITY TO GUARANTEE LOANS.— total amount of the line of credit. lender. ‘‘(A) IN GENERAL.—The Secretary may guar- ‘‘(3) DRAWS.—Any draw on the line of credit ‘‘(d) ASSISTANCE FROM EXPERT FIRMS.—The antee the payment of principal and interest for shall represent a direct loan and shall be made Secretary may retain the services of expert firms loans made to rural entities for projects for any only if net revenues from the project (including in the field of project finance to assist in the un- capital improvement described in paragraph (1) capitalized interest, any debt service reserve derwriting and servicing of Federal credit in- to any non-Federal lender. fund, and any other available reserve) are in- struments. ‘‘(B) INTEREST SUBSIDIES.—In the case of a sufficient to pay the costs specified in subsection ‘‘SEC. 2206. STATE AND LOCAL PERMITS. guarantee of any loan made to a rural entity (a)(2). ‘‘The provision of financial assistance under under subparagraph (A), the Secretary may pay ‘‘(4) INTEREST RATE.—The interest rate on a this title with respect to a project shall not— to the holder of such loan, for and on behalf of direct loan resulting from a draw on the line of ‘‘(1) relieve any recipient of the assistance of the project for which the loan was made, credit shall be not less than the yield on 30-year any obligation to obtain any required State or amounts sufficient to reduce (by not more than marketable United States Treasury securities as local permit or approval with respect to the 3 percent) the net effective interest rate other- of the date on which the line of credit is obli- project; wise payable on such loan. gated. ‘‘(2) limit the right of any unit of State or ‘‘(b) AMOUNT OF LOAN.—The principal ‘‘(5) SECURITY.—The line of credit— local government to approve or regulate any amount of a loan directly made or guaranteed ‘‘(A) shall— rate of return on private equity invested in the under subsection (a) for a project for capital im- ‘‘(i) be payable, in whole or in part, from reli- project; or provement may not exceed $5,000,000. able revenue sources; and ‘‘(3) otherwise supersede any State or local ‘‘(c) FUNDING LIMITATIONS.— ‘‘(ii) include a rate covenant, coverage re- law (including any regulation) applicable to the ‘‘(1) GOVERNMENT CREDIT SUBSIDY EXPO- quirement, or similar security feature supporting construction or operation of the project. SURE.—The total of the Government credit sub- the project obligations; and sidy exposure under the Credit Reform Act of ‘‘SEC. 2207. REGULATIONS. ‘‘(B) may have a lien on revenues described in 1990 scoring protocol with respect to the loans ‘‘The Secretary may issue such regulations as subparagraph (A) subject to any lien securing outstanding at any time with respect to which the Secretary determines appropriate to carry project obligations. guarantees have been issued, or which have out this title. ‘‘(6) PERIOD OF AVAILABILITY.—The line of been directly made, under subsection (a) may credit shall be available during the period begin- ‘‘SEC. 2208. FUNDING. not exceed $50,000,000 per year. ning on the date of substantial completion of ‘‘(a) FUNDING.— ‘‘(2) TOTAL AMOUNTS.—Subject to paragraph the project and ending not later than 10 years ‘‘(1) IN GENERAL.—There are authorized to be (1), the total of the principal amount of all after that date. appropriated to carry out this title, $49,000,000 loans directly made or guaranteed under sub- ‘‘(7) RIGHTS OF THIRD-PARTY CREDITORS.— to remain available during the period beginning section (a) may not exceed $250,000,000 per year. ‘‘(A) AGAINST FEDERAL GOVERNMENT.—A on July 1, 2004 and ending on September 30, ‘‘(d) CAPITAL ASSESSMENT AND PLANNING third-party creditor of the obligor shall not have 2008. GRANTS.— any right against the Federal Government with ‘‘(2) ADMINISTRATIVE COSTS.—From funds ‘‘(1) NONREPAYABLE GRANTS.—Subject to para- respect to any draw on the line of credit. made available under paragraph (1), the Sec- graph (2), the Secretary may make a grant to a ‘‘(B) ASSIGNMENT.—An obligor may assign the retary may use, for the administration of this rural entity, in an amount not to exceed $50,000, line of credit to 1 or more lenders or to a trustee title, not more than $2,000,000 for each of fiscal for purposes of capital assessment and business on the lenders’ behalf. years 2004 through 2008. planning. ‘‘(8) NONSUBORDINATION.—A direct loan under ‘‘(b) CONTRACT AUTHORITY.—Notwithstanding ‘‘(2) LIMITATION.—The cumulative total of this section shall not be subordinated to the any other provision of law, approval by the Sec- grants awarded under this subsection may not claims of any holder of project obligations in the retary of a Federal credit instrument that uses exceed $2,500,000 per year. event of bankruptcy, insolvency, or liquidation funds made available under this title shall be ‘‘(e) TERMINATION OF AUTHORITY.—The Sec- of the obligor. deemed to be acceptance by the United States of retary may not directly make or guarantee any

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loan under subsection (a) or make a grant under year as the ratio of the number of undocu- (3) PROVIDER.—The term ‘‘provider’’ includes subsection (d) after September 30, 2008.’’. mented alien apprehensions in the State in that a physician, any other health care professional (b) RURAL ENTITY DEFINED.—Section 1624 of fiscal year bears to the total of such numbers for licensed under State law, and any other entity the Public Health Service Act (42 U.S.C. 300s–3) all such States for such fiscal year. that furnishes emergency health services, in- is amended by adding at the end the following (C) DATA.—For purposes of this paragraph, cluding ambulance services. new paragraph: the highest number of undocumented alien ap- (4) SECRETARY.—The term ‘‘Secretary’’ means ‘‘(14)(A) The term ‘rural entity’ includes— prehensions for a fiscal year shall be based on the Secretary of Health and Human Services. ‘‘(i) a rural health clinic, as defined in section the 4 most recent quarterly apprehension rates (5) STATE.—The term ‘‘State’’ means the 50 1861(aa)(2) of the Social Security Act; for undocumented aliens in such States, as re- States and the District of Columbia. ‘‘(ii) any medical facility with at least 1 bed, ported by the Immigration and Naturalization SEC. 611. INCREASE IN APPROPRIATION TO THE but with less than 50 beds, that is located in— Service. HEALTH CARE FRAUD AND ABUSE ‘‘(I) a county that is not part of a metropoli- (3) RULE OF CONSTRUCTION.—Nothing in this CONTROL ACCOUNT. tan statistical area; or section shall be construed as prohibiting a State Section 1817(k)(3)(A) (42 U.S.C. 1395i(k)(3)(A)) ‘‘(II) a rural census tract of a metropolitan that is described in both of paragraphs (1) and is amended— statistical area (as determined under the most (2) from receiving an allotment under both para- (1) in clause (i)— recent modification of the Goldsmith Modifica- graphs for a fiscal year. (A) in subclause (II), by striking ‘‘and’’ at the tion, originally published in the Federal Reg- (c) USE OF FUNDS.— end; and ister on February 27, 1992 (57 Fed. Reg. 6725)); (1) AUTHORITY TO MAKE PAYMENTS.—From the (B) by striking subclause (III), and inserting ‘‘(iii) a hospital that is classified as a rural, allotments made for a State under subsection (b) the following new subclauses: regional, or national referral center under sec- for a fiscal year, the Secretary shall pay directly ‘‘(III) for fiscal year 2004, the limit for fiscal tion 1886(d)(5)(C) of the Social Security Act; and to local governments, hospitals, or other pro- year 2003 increased by $10,000,000; ‘‘(iv) a hospital that is a sole community hos- viders located in the State (including providers ‘‘(IV) for fiscal year 2005, the limit for fiscal pital (as defined in section 1886(d)(5)(D)(iii) of of services received through an Indian Health year 2003 increased by $15,000,000; the Social Security Act). Service facility whether operated by the Indian ‘‘(V) for fiscal year 2006, the limit for fiscal ‘‘(B) For purposes of subparagraph (A), the Health Service or by an Indian tribe or tribal or- year 2003 increased by $25,000,000; and fact that a clinic, facility, or hospital has been ganization) that provide uncompensated emer- ‘‘(VI) for each fiscal year after fiscal year geographically reclassified under the medicare gency health services furnished to undocu- 2006, the limit for fiscal year 2003.’’; and program under title XVIII of the Social Security mented aliens during that fiscal year, and to the (2) in clause (ii)— Act shall not preclude a hospital from being State, such amounts (subject to the total amount (A) in subclause (VI), by striking ‘‘and’’ at considered a rural entity under clause (i) or (ii) available from such allotments) as the local gov- the end; of subparagraph (A).’’. ernments, hospitals, providers, or State dem- (B) in subclause (VII)— (c) CONFORMING AMENDMENTS.—Section 1602 onstrate were incurred for the provision of such (i) by striking ‘‘each fiscal year after fiscal of the Public Health Service Act (42 U.S.C. 300q– services during that fiscal year. year 2002’’ and inserting ‘‘fiscal year 2003’’; and 2) is amended— (2) LIMITATION ON STATE USE OF FUNDS.— (ii) by striking the period and inserting a (1) in subsection (b)(2)(D), by inserting ‘‘or Funds paid to a State from allotments made semicolon; and 1603(a)(2)(B)’’ after ‘‘1601(a)(2)(B)’’; and under subsection (b) for a fiscal year may only (3) by adding at the end the following: (2) in subsection (d)— be used for making payments to local govern- ‘‘(VIII) for fiscal year 2004, $170,000,000; (A) in paragraph (1)(C), by striking ‘‘section ments, hospitals, or other providers for costs in- ‘‘(IX) for fiscal year 2005, $175,000,000; 1601(a)(2)(B)’’ and inserting ‘‘sections curred in providing emergency health services to ‘‘(X) for fiscal year 2006, $185,000,000; and 1601(a)(2)(B) and 1603(a)(2)(B)’’; and undocumented aliens or for State costs incurred ‘‘(XI) for each fiscal year after fiscal year (B) in paragraph (2)(A), by inserting ‘‘or with respect to the provision of emergency 2006, not less than $150,000,000 and not more 1603(a)(2)(B)’’ after ‘‘1601(a)(2)(B)’’. health services to such aliens. than $160,000,000.’’. (3) INCLUSION OF COSTS INCURRED WITH RE- SEC. 610. FEDERAL REIMBURSEMENT OF EMER- SEC. 612. INCREASE IN CIVIL PENALTIES UNDER SPECT TO CERTAIN ALIENS.—Uncompensated GENCY HEALTH SERVICES FUR- THE FALSE CLAIMS ACT. NISHED TO UNDOCUMENTED emergency health services furnished to aliens (a) IN GENERAL.—Section 3729(a) of title 31, ALIENS. who have been allowed to enter the United United States Code, is amended— (a) TOTAL AMOUNT AVAILABLE FOR ALLOT- States for the sole purpose of receiving emer- (1) by striking ‘‘$5,000’’ and inserting MENT.—There is appropriated, out of any funds gency health services may be included in the de- ‘‘$7,500’’; and in the Treasury not otherwise appropriated, termination of costs incurred by a State, local (2) by striking ‘‘$10,000’’ and inserting $250,000,000 for each of fiscal years 2005 through government, hospital, or other provider with re- ‘‘$15,000’’. 2008, for the purpose of making allotments spect to the provision of such services. (b) EFFECTIVE DATE.—The amendments made under this section to States described in para- (d) APPLICATIONS; ADVANCE PAYMENTS.— graph (1) or (2) of subsection (b). Funds appro- (1) DEADLINE FOR ESTABLISHMENT OF APPLICA- by subsection (a) shall apply to violations occur- priated under the preceding sentence shall re- TION PROCESS.—24 (A) IN GENERAL.—Not later ring on or after January 1, 2004. main available until expended. than September 1, 2004, the Secretary shall es- SEC. 613. INCREASE IN CIVIL MONETARY PEN- (b) STATE ALLOTMENTS.— tablish a process under which States, local gov- ALTIES UNDER THE SOCIAL SECU- RITY ACT. (1) BASED ON PERCENTAGE OF UNDOCUMENTED ernments, hospitals, or other providers located ALIENS.— in the State may apply for payments from allot- (a) IN GENERAL.—Section 1128A(a) (42 U.S.C. (A) IN GENERAL.—Out of the amount appro- ments made under subsection (b) for a fiscal 1320a–7a(a)), in the matter following paragraph priated under subsection (a) for a fiscal year, year for uncompensated emergency health serv- (7), is amended— the Secretary shall use $167,000,000 of such ices furnished to undocumented aliens during (1) by striking ‘‘$10,000’’ each place it appears amount to make allotments for such fiscal year that fiscal year. and inserting ‘‘$12,500’’; in accordance with subparagraph (B). (B) INCLUSION OF MEASURES TO COMBAT (2) by striking ‘‘$15,000’’ and inserting (B) FORMULA.—The amount of the allotment FRAUD.—The Secretary shall include in the ‘‘$18,750’’; and for each State for a fiscal year shall be equal to process established under subparagraph (A) (3) striking ‘‘$50,000’’ and inserting ‘‘$62,500’’. the product of— measures to ensure that fraudulent payments (b) EFFECTIVE DATE.—The amendments made (i) the total amount available for allotments are not made from the allotments determined by subsection (a) shall apply to violations occur- under this paragraph for the fiscal year; and under subsection (b). ring on or after January 1, 2004. (ii) the percentage of undocumented aliens re- (2) ADVANCE PAYMENT; RETROSPECTIVE AD- SEC. 614. EXTENSION OF CUSTOMS USER FEES. siding in the State with respect to the total JUSTMENT.—The process established under para- Section 13031(j)(3) of the Consolidated Omni- number of such aliens residing in all States, as graph (1) shall allow for making payments bus Budget Reconciliation Act of 1985 (19 U.S.C. determined by the Statistics Division of the Im- under this section for each quarter of a fiscal 58c(j)(3)) is amended by striking ‘‘September 30, migration and Naturalization Service, as of Jan- year on the basis of advance estimates of ex- 2003’’ and inserting ‘‘September 30, 2013’’. uary 2003, based on the 2000 decennial census. penditures submitted by applicants for such SEC. 615. REIMBURSEMENT FOR FEDERALLY (2) BASED ON NUMBER OF UNDOCUMENTED payments and such other investigation as the QUALIFIED HEALTH CENTERS PAR- ALIEN APPREHENSION STATES.— Secretary may find necessary, and for making TICIPATING IN MEDICARE MANAGED (A) IN GENERAL.—Out of the amount appro- reductions or increases in the payments as nec- CARE. priated under subsection (a) for a fiscal year, essary to adjust for any overpayment or under- (a) REIMBURSEMENT.— the Secretary shall use $83,000,000 of such payment for prior quarters of such fiscal year. (1) IN GENERAL.—Section 1833(a)(3) (42 U.S.C. amount to make allotments for such fiscal year (e) DEFINITIONS.—In this section: 1395l(a)(3)) is amended to read as follows: for each of the 6 States with the highest number (1) HOSPITAL.—The term ‘‘hospital’’ has the ‘‘(3) in the case of services described in section of undocumented alien apprehensions for such meaning given such term in section 1861(e) of 1832(a)(2)(D)— fiscal year. the Social Security Act (42 U.S.C. 1395x(e)). ‘‘(A) except as provided in subparagraph (B), (B) DETERMINATION OF ALLOTMENTS.—The (2) INDIAN TRIBE; TRIBAL ORGANIZATION.—The the costs which are reasonable and related to amount of the allotment for each State described terms ‘‘Indian tribe’’ and ‘‘tribal organization’’ the cost of furnishing such services or which are in subparagraph (A) for a fiscal year shall bear have the meanings given such terms in section 4 based on such other tests of reasonableness as the same ratio to the total amount available for of the Indian Health Care Improvement Act (25 the Secretary may prescribe in regulations, in- allotments under this paragraph for the fiscal U.S.C. 1603). cluding those authorized under section

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1861(v)(1)(A), less the amount a provider may (d) SAFE HARBOR FROM ANTIKICKBACK PROHI- fore the Committee on Finance of the Senate on charge as described in clause (ii) of section BITION.—Section 1128B(b)(3) (42 U.S.C. 1320a– the following issues: 1866(a)(2)(A), but in no case may the payment 7b(b)(3)) is amended— (1) Progress on implementation of title I for such services (other than for items and serv- (1) in subparagraph (E), by striking ‘‘and’’ (Medicare Prescription Drug Benefit), title II ices described in section 1861(s)(10)(A)) exceed 80 after the semicolon at the end; (MedicareAdvantage), and title III (Center for percent of such costs; or (2) in subparagraph (F), by striking the period Medicare Choices) of the Act. ‘‘(B) with respect to the services described in at the end and inserting ‘‘; and’’; and (2) Any problems that will impede timely im- clause (ii) of section 1832(a)(2)(D) that are fur- (3) by adding at the end the following new plementation of the Act. nished to an individual enrolled with a subparagraph: SEC. 618. EXTENSION OF MUNICIPAL HEALTH MedicareAdvantage plan under part C pursuant ‘‘(G) any remuneration between a Federally SERVICE DEMONSTRATION to a written agreement described in section qualified health center (or an entity controlled PROJECTS. 1853(j), the amount by which— by such a health center) and a The last sentence of section 9215(a) of the ‘‘(i) the amount of payment that would have MedicareAdvantage plan pursuant to the writ- Consolidated Omnibus Budget Reconciliation otherwise been provided under subparagraph ten agreement described in section 1853(j).’’. Act of 1985 (42 U.S.C. 1395b–1 note), as pre- (A) (calculated as if ‘100 percent’ were sub- (e) EFFECTIVE DATE.—The amendments made viously amended, is amended by striking ‘‘De- stituted for ‘80 percent’ in such subparagraph) by this section shall apply to services provided cember 31, 2004, and inserting ‘‘December 31, for such services if the individual had not been on or after January 1, 2006, and contract years 2006. so enrolled; exceeds beginning on or after such date. SEC. 619. STUDY ON MAKING PRESCRIPTION ‘‘(ii) the amount of the payments received PHARMACEUTICAL INFORMATION SEC. 616. PROVISION OF INFORMATION ON AD- ACCESSIBLE FOR BLIND AND VIS- under such written agreement for such services VANCE DIRECTIVES. UALLY-IMPAIRED INDIVIDUALS. (not including any financial incentives provided Section 1804(c) of the Social Security Act (42 (a) STUDY.— for in such agreement such as risk pool pay- U.S.C. 1395b-2(c)) is amended— (1) IN GENERAL.—The Secretary of Health and ments, bonuses, or withholds), (1) by redesignating paragraphs (1) through Human Services shall undertake a study of how less the amount the Federally qualified health (4) as subparagraphs (A) through (D), respec- to make prescription pharmaceutical informa- center may charge as described in section tively; tion, including drug labels and usage instruc- 1857(e)(3)(C);’’. (2) in the matter preceding subparagraph (A), tions, accessible to blind and visually-impaired (b) CONTINUATION OF MEDICAREADVANTAGE as so redesignated, by striking ‘‘The notice’’ and individuals. MONTHLY PAYMENTS.— inserting ‘‘(1) The notice’’; and (2) STUDY TO INCLUDE EXISTING AND EMERGING (1) IN GENERAL.—Section 1853 (42 U.S.C. (3) by adding at the end the following: TECHNOLOGIES.—The study under paragraph (1) 1395w–23), as amended by this Act, is amended ‘‘(2)(A) The Secretary shall annually provide shall include a review of existing and emerging by adding at the end the following new sub- each medicare beneficiary with information con- technologies, including assistive technology, section: cerning advance directives. Such information that makes essential information on the content ‘‘(j) PAYMENT RULE FOR FEDERALLY QUALI- shall be provided by the Secretary as part of the and prescribed use of pharmaceutical medicines FIED HEALTH CENTER SERVICES.—If an indi- Medicare and You handbook that is provided to available in a usable format for blind and vis- vidual who is enrolled with a each such beneficiary. Such handbook shall in- ually-impaired individuals. MedicareAdvantage plan under this part re- clude a separate section on advanced directives (b) REPORT.— ceives a service from a Federally qualified and specific details on living wills and the dura- (1) IN GENERAL.—Not later than 18 months health center that has a written agreement with ble power of attorney for health care. The Sec- after the date of the enactment of this Act, the such plan for providing such a service (includ- retary shall ensure that the introductory letter Secretary of Health and Human Services shall ing any agreement required under section that accompanies such handbook contain a submit a report to Congress on the study re- 1857(e)(3))— statement concerning the inclusion of such in- quired under subsection (a). ‘‘(1) the Secretary shall pay the amount deter- formation. (2) CONTENTS OF REPORT.—The report required mined under section 1833(a)(3)(B) directly to the ‘‘(B) In this section: under subsection (a) shall include recommenda- Federally qualified health center not less fre- ‘‘(i) The term ‘advance directive’ has the tions for the implementation of usable formats quently than quarterly; and meaning given such term in section 1866(f)(3). for making prescription pharmaceutical infor- ‘‘(2) the Secretary shall not reduce the ‘‘(ii) The term ‘medicare beneficiary’ means an mation available to blind and visually-impaired amount of the monthly payments to the individual who is entitled to, or enrolled for, individuals and an estimate of the costs associ- MedicareAdvantage plan made under section benefits under part A or enrolled under part B, ated with the implementation of each format. 1853(a) as a result of the application of para- of this title.’’. SEC. 620. HEALTH CARE THAT WORKS FOR ALL graph (1).’’. SEC. 617. SENSE OF THE SENATE REGARDING IM- AMERICANS-CITIZENS HEALTH CARE WORKING GROUP. (2) CONFORMING AMENDMENTS.— PLEMENTATION OF THE PRESCRIP- (A) Paragraphs (1) and (2) of section 1851(i) TION DRUG AND MEDICARE IM- (a) FINDINGS.—Congress finds the following: (42 U.S.C. 1395w–21(i)(1)), as amended by this PROVEMENT ACT OF 2003. (1) In order to improve the health care system, Act, are each amended by inserting ‘‘1853(j),’’ (a) IN GENERAL.—It is the sense of the Senate the American public must engage in an informed after ‘‘1853(i),’’. that the Committee on Finance of the Senate national public debate to make choices about (B) Section 1853(c)(5) is amended by striking should hold not less than 4 hearings to monitor the services they want covered, what health ‘‘subsections (a)(3)(C)(iii) and (i)’’ and inserting implementation of the Prescription Drug and care coverage they want, and how they are will- ‘‘subsections (a)(3)(C)(iii), (i), and (j)(1)’’. Medicare Improvement Act of 2003 (hereinafter ing to pay for coverage. (2) More than a trillion dollars annually is (c) ADDITIONAL MEDICAREADVANTAGE CON- in this section referred to as the ‘‘Act’’) during spent on the health care system, yet— TRACT REQUIREMENTS.—Section 1857(e) (42 which the Secretary or his designee should tes- (A) 41,000,000 Americans are uninsured; tify before the Committee. U.S.C. 1395w–27(e)) is amended by adding at the (B) insured individuals do not always have (b) INITIAL HEARING.—It is the sense of the end the following new paragraph: access to essential, effective services to improve ‘‘(3) AGREEMENTS WITH FEDERALLY QUALIFIED Senate that the first hearing described in sub- and maintain their health; and HEALTH CENTERS.— section (a) should be held not later than 60 days (C) employers, who cover over 170,000,000 ‘‘(A) PAYMENT LEVELS AND AMOUNTS.—A con- after the date of the enactment the Act. At the Americans, find providing coverage increasingly tract under this part shall require the hearing, the Secretary or his designee should difficult because of rising costs and double digit MedicareAdvantage plan to provide, in any con- submit written testimony and testify before the premium increases. tract between the plan and a Federally qualified Committee on Finance of the Senate on the fol- (3) Despite increases in medical care spending health center, for a level and amount of pay- lowing issues: that are greater than the rate of inflation, pop- ment to the Federally qualified health center for (1) The progress toward implementation of the ulation growth, and Gross Domestic Product services provided by such health center that is prescription drug discount card under section growth, there has not been a commensurate im- not less than the level and amount of payment 111 of the Act. provement in our health status as a nation. that the plan would make for such services if (2) Development of the blueprint that will di- (4) Health care costs for even just 1 member of the services had been furnished by a provider of rect the implementation of the provisions of the a family can be catastrophic, resulting in med- services that was not a Federally qualified Act, including the implementation of title I ical bills potentially harming the economic sta- health center. (Medicare Prescription Drug Benefit), title II bility of the entire family. ‘‘(B) COST-SHARING.—Under the written agree- (MedicareAdvantage), and title III (Center for (5) Common life occurrences can jeopardize ment described in subparagraph (A), a Federally Medicare Choices) of the Act. the ability of a family to retain private coverage qualified health center must accept the (3) Any problems that will impede the timely or jeopardize access to public coverage. MedicareAdvantage contract price plus the Fed- implementation of the Act. (6) Innovations in health care access, cov- eral payment provided for in section (4) The overall progress toward implementa- erage, and quality of care, including the use of 1833(a)(3)(B) as payment in full for services cov- tion of the Act. technology, have often come from States, local ered by the contract, except that such a health (c) SUBSEQUENT HEARINGS.—It is the sense of communities, and private sector organizations, center may collect any amount of cost-sharing the Senate that the additional hearings de- but more creative policies could tap this poten- permitted under the contract under this part, so scribed in subsection (a) should be held in each tial. long as the amounts of any deductible, coinsur- of May 2004, October 2004, and May 2005. At (7) Despite our Nation’s wealth, the health ance, or copayment comply with the require- each hearing, the Secretary or his designee care system does not provide coverage to all ments under section 1854(e).’’. should submit written testimony and testify be- Americans who want it.

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(b) PURPOSES.—The purposes of this Act are— (L) 5 members shall be appointed as follows: (G) strategies to assist purchasers of health (1) to provide for a nationwide public debate (i) 1 economist. care, including consumers, to become more about improving the health care system to pro- (ii) 1 academician. aware of the impact of costs, and to lower the vide every American with the ability to obtain (iii) 1 health policy researcher. costs of health care. quality, affordable health care coverage; and (iv) 1 individual with expertise in (2) ADDITIONAL HEARINGS.—The Working (2) to provide for a vote by Congress on the pharmacoeconomics. Group may hold additional hearings on subjects recommendations that result from the debate. (v) 1 health technology expert. other than those listed in paragraph (1) so long (c) ESTABLISHMENT.—The Secretary, acting (M) 2 members shall be representatives of com- as such hearings are determined to be necessary through the Agency for Healthcare Research munity leaders who have developed State or by the Working Group in carrying out the pur- and Quality, shall establish an entity to be local community solutions to the problems ad- poses of this Act. Such additional hearings do known as the Citizens’ Health Care Working dressed by the Working Group. not have to be completed within the time period Group (referred to in this Act as the ‘‘Working (N) 1 member shall be a representative of a specified in paragraph (1) but shall not delay Group’’). medical school. the other activities of the Working Group under (d) APPOINTMENT.—Not later than 45 days (3) SECRETARY.—The Secretary, or the des- this section. after the date of enactment of this Act, the ignee of the Secretary, shall be a member of the (3) THE HEALTH REPORT TO THE AMERICAN Speaker and Minority Leader of the House of Working Group. PEOPLE.—Not later than 90 days after the hear- Representatives and the Majority Leader and (f) PROHIBITED APPOINTMENTS.—Members of ings described in paragraphs (1) and (2) are Minority Leader of the Senate (in this section the Working Group shall not include members of completed, the Working Group shall prepare referred to as the ‘‘leadership’’) shall each ap- Congress or other elected government officials and make available to health care consumers point individuals to serve as members of the (Federal, State, or local) other than those indi- through the Internet and other appropriate pub- Working Group in accordance with subsections viduals specified in subsection (e). To the extent lic channels, a report to be entitled, ‘‘The (e), (f), and (g). possible, individuals appointed to the Working Health Report to the American People’’. Such (e) MEMBERSHIP CRITERIA.— Group shall have used the health care system report shall be understandable to the general (1) APPOINTED MEMBERS.— within the previous 2 years and shall not be public and include— (A) SEPARATE APPOINTMENTS.—The Speaker of paid employees or representatives of associations (A) a summary of— the House of Representatives jointly with the or advocacy organizations involved in the (i) health care and related services that may Minority Leader of the House of Representa- health care system. be used by individuals throughout their life tives, and the Majority Leader of the Senate (g) APPOINTMENT CRITERIA.— span; jointly with the Minority Leader of the Senate, (1) HOUSE OF REPRESENTATIVES.—The Speaker (ii) the cost of health care services and their shall each appoint 1 member of the Working and Minority Leader of the House of Represent- medical effectiveness in providing better quality Group described in subparagraphs (A), (G), (J), atives shall make the appointments described in of care for different age groups; (K), and (M) of paragraph (2). subsection (d) in consultation with the chair- (iii) the source of coverage and payment, in- (B) JOINT APPOINTMENTS.—Members of the person and ranking member of the following cluding reimbursement, for health care services; Working Group described in subparagraphs (B), committees of the House of Representatives: (iv) the reasons people are uninsured or (C), (D), (E), (F), (I), and (N) of paragraph (2) (A) The Committee on Ways and Means. underinsured and the cost to taxpayers, pur- shall be appointed jointly by the leadership. (B) The Committee on Energy and Commerce. chasers of health services, and communities (C) COMBINED APPOINTMENTS.—Members of (C) The Committee on Education and the when Americans are uninsured or underinsured; the Working Group described in subparagraphs Workforce. (v) the impact on health care outcomes and (H) and (L) shall be appointed in the following (2) SENATE.—The Majority Leader and Minor- costs when individuals are treated in all stages manner: ity Leader of the Senate shall make the appoint- of disease; (i) One member of the Working Group in each ments described in subsection (d) in consultation (vi) health care cost containment strategies; of such subparagraphs shall be appointed joint- with the chairperson and ranking member of the and ly by the leadership. following committees of the Senate: (vii) information on health care needs that (ii) The remaining appointments of the mem- (A) The Committee on Finance. need to be addressed; bers in each of such subparagraphs shall be di- (B) The Committee on Health, Education, (B) examples of community strategies to provided equally such that the Speaker of the Labor, and Pensions. vide health care coverage or access; House of Representatives jointly with the Mi- (h) PERIOD OF APPOINTMENT.—Members of the (C) information on geographic-specific issues nority Leader of the House of Representatives, Working Group shall be appointed for a term of relating to health care; (D) information concerning the cost of care in and the Majority Leader of the Senate jointly 2 years. Such term is renewable and any vacan- different settings, including institutional-based with the Minority Leader of the Senate each ap- cies shall not affect the power and duties of the care and home and community-based care; point an equal number of members. Working Group but shall be filled in the same (E) a summary of ways to finance health care (2) CATEGORIES OF APPOINTED MEMBERS.— manner as the original appointment. coverage; and (i) APPOINTMENT OF THE CHAIRPERSON.—Not Members of the Working Group shall be ap- (F) the role of technology in providing future later than 15 days after the date on which all pointed as follows: health care including ways to support the infor- members of the Working Group have been ap- (A) 2 members shall be patients or family mem- mation needs of patients and providers. pointed under subsection (d), the leadership bers of patients who, at least 1 year prior to the (4) COMMUNITY MEETINGS.— shall make a joint designation of the chair- date of enactment of this Act, have had no (A) IN GENERAL.—Not later than 1 year after health insurance. person of the Working Group. If the leadership the date of enactment of this Act, the Working (B) 1 member shall be a representative of chil- fails to make such designation within such time Group shall initiate health care community dren. period, the Working Group Members shall, not meetings throughout the United States (in this (C) 1 member shall be a representative of the later than 10 days after the end of such time pe- section referred to as ‘‘community meetings’’). mentally ill. riod, designate a chairperson by majority vote. Such community meetings may be geographi- (D) 1 member shall be a representative of the (j) SUBCOMMITTEES.—The Working Group may cally or regionally based and shall be completed disabled. establish subcommittees if doing so increases the within 180 days after the initiation of the first (E) 1 member shall be over the age of 65 and efficiency of the Working Group in completing meeting. a beneficiary under the medicare program estab- its tasks. (B) NUMBER OF MEETINGS.—The Working lished under title XVIII of the Social Security (k) DUTIES.— Group shall hold a sufficient number of commu- Act (42 U.S.C. 1395 et seq.). (1) HEARINGS.—Not later than 90 days after nity meetings in order to receive information (F) 1 member shall be a recipient of benefits the date of appointment of the chairperson that reflects— under the medicaid program under title XIX of under subsection (i), the Working Group shall (i) the geographic differences throughout the the Social Security Act (42 U.S.C. 1396 et seq.). hold hearings to examine— United States; (G) 2 members shall be State health officials. (A) the capacity of the public and private (ii) diverse populations; and (H) 3 members shall be employers, including— health care systems to expand coverage options; (iii) a balance among urban and rural popu- (i) 1 large employer (an employer who em- (B) the cost of health care and the effective- lations. ployed 50 or more employees on business days ness of care provided at all stages of disease; (C) MEETING REQUIREMENTS.— during the preceding calendar year and who (C) innovative State strategies used to expand (i) FACILITATOR.—A State health officer may employed at least 50 employees on the first of health care coverage and lower health care be the facilitator at the community meetings. the year); costs; (ii) ATTENDANCE.—At least 1 member of the (ii) 1 small employer (an employer who em- (D) local community solutions to accessing Working Group shall attend and serve as chair ployed an average of at least 2 employees but health care coverage; of each community meeting. Other members may less than 50 employees on business days in the (E) efforts to enroll individuals currently eligi- participate through interactive technology. preceding calendar year and who employs at ble for public or private health care coverage; (iii) TOPICS.—The community meetings shall, least 2 employees on the first of the year); and (F) the role of evidence-based medical prac- at a minimum, address the following issues: (iii) 1 multi-state employer. tices that can be documented as restoring, main- (I) The optimum way to balance costs and (I) 1 member shall be a representative of labor. taining, or improving a patient’s health, and benefits so that affordable health coverage is (J) 2 members shall be health insurance the use of technology in supporting providers in available to as many people as possible. issuers. improving quality of care and lowering costs; (II) The identification of services that provide (K) 2 members shall be health care providers. and cost-effective, essential health care services to

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maintain and improve health and which should (r) ADMINISTRATION REVIEW AND COMMENTS.— SEC. 622. SENSE OF THE SENATE CONCERNING be included in health care coverage. Not later than 45 days after receiving the final MEDICARE PAYMENT UPDATE FOR (III) The cost of providing increased benefits. recommendations of the Working Group under PHYSICIANS AND OTHER HEALTH PROFESSIONALS. (IV) The mechanisms to finance health care subsection (l), the President shall submit a re- (a) FINDINGS.—The Senate makes the fol- coverage, including defining the appropriate fi- port to Congress which shall contain— lowing findings: nancial role for individuals, businesses, and (1) additional views and comments on such government. (1) The formula by which medicare payments recommendations; and are updated each year for services furnished by (iv) INTERACTIVE TECHNOLOGY.—The Working (2) recommendations for such legislation and Group may encourage public participation in physicians and other health professionals is administrative actions as the President con- fundamentally flawed. community meetings through interactive tech- siders appropriate. nology and other means as determined appro- (2) The flawed physician payment update for- (s) REQUIRED CONGRESSIONAL ACTION.—Not mula is causing a continuing physician payment priate by the Working Group. later than 45 days after receiving the report sub- (D) INTERIM REQUIREMENTS.—Not later than crisis, and, without congressional action, medi- mitted by the President under subsection (r), care payment rates for physicians and other 180 days after the date of completion of the com- each committee of jurisdiction of Congress shall munity meetings, the Working Group shall pre- practitioners are predicted to fall by 4.2 percent hold at least 1 hearing on such report and on in 2004. pare and make available to the public through the final recommendations of the Working the Internet and other appropriate public chan- (3) A physician payment cut in 2004 would be Group submitted under subsection (l). the fifth cut since 1991, and would be on top of nels, an interim set of recommendations on (t) AUTHORIZATION OF APPROPRIATIONS.— health care coverage and ways to improve and a 5.4 percent cut in 2002, with additional cuts (1) IN GENERAL.—There are authorized to be estimated for 2005, 2006, and 2007; from 1991– strengthen the health care system based on the appropriated to carry out this Act, other than information and preferences expressed at the 2003, payment rates for physicians and health subsection (k)(3), $3,000,000 for each of fiscal professionals fell 14 percent behind practice cost community meetings. There shall be a 90-day years 2004, 2005, and 2006. public comment period on such recommenda- inflation as measured by medicare’s own con- (2) HEALTH REPORT TO THE AMERICAN PEO- servative estimates. tions. PLE.—There are authorized to be appropriated ECOMMENDATIONS.—Not later than 120 (4) The sustainable growth rate (SGR) expend- (l) R for the preparation and dissemination of the days after the expiration of the public comment iture target, which is the basis for the physician Health Report to the American People described period described in subsection (k)(4)(D), the payment update, is linked to the gross domestic in subsection (k)(3), such sums as may be nec- Working Group shall submit to Congress and the product and penalizes physicians and other essary for the fiscal year in which the report is President a final set of recommendations. practitioners for volume increases that they can- required to be submitted. (m) ADMINISTRATION.— not control and that the Government actively (1) EXECUTIVE DIRECTOR.—There shall be an SEC. 621. GAO STUDY OF PHARMACEUTICAL promotes through new coverage decisions, qual- Executive Director of the Working Group who PRICE CONTROLS AND PATENT PRO- ity improvement activities and other initiatives shall be appointed by the chairperson of the TECTIONS IN THE G–7 COUNTRIES. that, while beneficial to patients, are not re- Working Group in consultation with the mem- (a) STUDY.—The Comptroller General of the flected in the SGR. bers of the Working Group. United States shall conduct a study of price (b) SENSE OF THE SENATE.—It is the sense of (2) COMPENSATION.—While serving on the controls imposed on pharmaceuticals in France, the Senate that medicare beneficiary access to business of the Working Group (including travel Germany, Italy, Japan, the United Kingdom quality care may be compromised if Congress time), a member of the Working Group shall be and Canada to review the impact such regula- does not take action to prevent cuts next year entitled to compensation at the per diem equiva- tions have on consumers, including American and the following that result from the SGR for- lent of the rate provided for level IV of the Exec- consumers, and on innovation in medicine. Such mula. utive Schedule under section 5315 of title 5, study shall include— SEC. 623. RESTORATION OF FEDERAL HOSPITAL United States Code, and while so serving away (1) the pharmaceutical price control structure INSURANCE TRUST FUND. from home and the member’s regular place of in each country for a wide range of pharma- (a) DEFINITIONS.—In this section: business, a member may be allowed travel ex- ceuticals, compared with average pharma- (1) CLERICAL ERROR.—The term ‘‘clerical error’’ means the failure that occurred on April penses, as authorized by the chairperson of the ceutical prices paid by Americans covered by 15, 2001, to have transferred the correct amount Working Group. For purposes of pay and em- private sector health insurance; from the general fund of the Treasury to the ployment benefits, rights, and privileges, all per- (2) the proportion of the cost for innovation Trust Fund. sonnel of the Working Group shall be treated as borne by American consumers, compared with consumers in the other six countries; (2) TRUST FUND.—The term ‘‘Trust Fund’’ if they were employees of the Senate. means the Federal Hospital Insurance Trust (3) INFORMATION FROM FEDERAL AGENCIES.— (3) a review of how closely the observed prices Fund established under section 1817 of the So- The Working Group may secure directly from in regulated markets correspond to the prices cial Security Act (42 U.S.C. 1395i). any Federal department or agency such infor- that efficiently distribute common costs of pro- (b) CORRECTION OF TRUST FUND HOLDINGS.— mation as the Working Group considers nec- duction (‘‘Ramsey prices’’); (4) a review of any peer-reviewed literature (1) IN GENERAL.—Not later than 120 days after essary to carry out this Act. Upon request of the the date of enactment of this Act, the Secretary Working Group, the head of such department or that might show the health consequences to patients in the listed countries that result from the of the Treasury shall take the actions described agency shall furnish such information. in paragraph (2) with respect to the Trust Fund absence or delayed introduction of medicines, (4) POSTAL SERVICES.—The Working Group with the goal being that, after such actions are including the cost of not having access to medi- may use the United States mails in the same taken, the holdings of the Trust Fund will rep- cines, in terms of lower life expectancy and manner and under the same conditions as other licate, to the extent practicable in the judgment lower quality of health; departments and agencies of the Federal Gov- of the Secretary of the Treasury, in consultation (5) the impact on American consumers, in ernment. with the Secretary of Health and Human Serv- terms of reduced research into new or improved (n) DETAIL.—Not more than 10 Federal Gov- ices, the holdings that would have been held by pharmaceuticals (including the cost of delaying ernment employees employed by the Department the Trust Fund if the clerical error had not oc- the introduction of a significant advance in cer- of Labor and 10 Federal Government employees curred. tain major diseases), if similar price controls employed by the Department of Health and (2) OBLIGATIONS ISSUED AND REDEEMED.—The Human Services may be detailed to the Working were adopted in the United States; Secretary of the Treasury shall— Group under this section without further reim- (6) the existing standards under international (A) issue to the Trust Fund obligations under bursement. Any detail of an employee shall be conventions, including the World Trade Organi- chapter 31 of title 31, United States Code, that without interruption or loss of civil service sta- zation and the North American Free Trade bear issue dates, interest rates, and maturity tus or privilege. Agreement, regarding regulated pharmaceutical dates that are the same as those for the obliga- (o) TEMPORARY AND INTERMITTENT SERV- prices, including any restrictions on anti-com- tions that— ICES.—The chairperson of the Working Group petitive laws that might apply to price regula- (i) would have been issued to the Trust Fund may procure temporary and intermittent services tions and how economic harm caused to con- if the clerical error had not occurred; or under section 3109(b) of title 5, United States sumers in markets without price regulations (ii) were issued to the Trust Fund and were Code, at rates for individuals which do not ex- may be remedied; redeemed by reason of the clerical error; and ceed the daily equivalent of the annual rate of (7) in parallel trade regimes, how much of the (B) redeem from the Trust Fund obligations basic pay prescribed for level V of the Executive price difference between countries in the Euro- that would have been redeemed from the Trust Schedule under section 5316 of such title. pean Union is captured by middlemen and how Fund if the clerical error had not occurred. (p) ANNUAL REPORT.—Not later than 1 year much goes to benefit patients and health sys- (c) APPROPRIATION.—Not later than 120 days after the date of enactment of this Act, and an- tems where parallel importing is significant; and after the date of enactment of this Act, there is nually thereafter during the existence of the (8) how much cost is imposed on the owner of appropriated to the Trust Fund, out of any Working Group, the Working Group shall report a property right from counterfeiting and from money in the Treasury not otherwise appro- to Congress and make public a detailed descrip- international violation of intellectual property priated, an amount determined by the Secretary tion of the expenditures of the Working Group rights for prescription medicines. of the Treasury, in consultation with the Sec- used to carry out its duties under this section. (b) REPORT.—Not later than 1 year after the retary of Health and Human Services, to be (q) SUNSET OF WORKING GROUP.—The Work- date of enactment of this Act, the Comptroller equal to the interest income lost by the Trust ing Group shall terminate when the report de- General of the United States shall submit to Fund through the date on which the appropria- scribed in subsection (l) is submitted to Con- Congress a report on the study conducted under tion is being made as a result of the clerical gress. subsection (a). error.

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00115 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8984 CONGRESSIONAL RECORD — SENATE July 7, 2003 SEC. 624. SAFETY NET ORGANIZATIONS AND PA- ‘‘(ii) the financial and infrastructure stability uals, farm workers, homeless individuals, indi- TIENT ADVISORY COMMISSION. of the Nation’s core health care safety net. viduals with disabilities, individuals with HIV (a) IN GENERAL.—Title XI (42 U.S.C. 1320 et ‘‘(B) AGENDA AND ADDITIONAL REVIEWS.— or AIDS, and such other individuals as the seq.) is amended by adding at the end the fol- ‘‘(i) AGENDA.—The Chair of the Commission Commission may designate. lowing new part: shall consult periodically with the Chairpersons ‘‘(c) MEMBERSHIP.— ‘‘PART D—SAFETY NET ORGANIZATIONS AND and Ranking Minority Members of the appro- ‘‘(1) NUMBER AND APPOINTMENT.—The Com- PATIENT ADVISORY COMMISSION priate committees of Congress regarding the mission shall be composed of 13 members appointed by the Comptroller General of the ‘‘SAFETY NET ORGANIZATIONS AND PATIENT Commission’s agenda and progress toward United States (in this section referred to as the ADVISORY COMMISSION achieving the agenda. ‘Comptroller General’), in consultation with the ‘‘SEC. 1181. (a) ESTABLISHMENT.—There is ‘‘(ii) ADDITIONAL REVIEWS.—The Commission appropriate committees of Congress. hereby established the Safety Net Organizations shall conduct additional reviews and submit additional reports to the appropriate committees of ‘‘(2) QUALIFICATIONS.— and Patient Advisory Commission (in this sec- ‘‘(A) IN GENERAL.—The membership of the Congress on topics relating to the health care tion referred to as the ‘Commission’). Commission shall include individuals with na- safety net programs under the following cir- ‘‘(b) REVIEW OF HEALTH CARE SAFETY NET tional recognition for their expertise in health cumstances: PROGRAMS AND REPORTING REQUIREMENTS.— finance and economics, health care safety net ‘‘(I) If requested by the Chairpersons or Rank- ‘‘(1) REVIEW.—The Commission shall conduct research and program management, actuarial an ongoing review of the health care safety net ing Minority Members of such committees. science, health facility management, health programs (as described in paragraph (3)(C)) ‘‘(II) If the Commission deems such additional plans and integrated delivery systems, reim- by— reviews and reports appropriate. bursement of health facilities, allopathic and os- ‘‘(A) monitoring each health care safety net ‘‘(C) AVAILABILITY OF REPORTS.—The Commis- teopathic medicine (including emergency medi- program to document and analyze the effects of sion shall transmit to the Comptroller General cine), and other providers of health services, changes in these programs on the core health and the Secretary a copy of each report sub- and other related fields, who provide a mix of care safety net; mitted under this subsection and shall make different professionals, broad geographic rep- ‘‘(B) evaluating the impact of the Emergency such reports available to the public. resentation, and a balance between urban and Medical Treatment and Labor Act, the Health ‘‘(3) DEFINITIONS.—In this section: rural representatives. Insurance Portability and Accountability Act of ‘‘(A) APPROPRIATE COMMITTEES OF CON- ‘‘(B) INCLUSION.—The membership of the Com- 1996, the Balanced Budget Act of 1997, the GRESS.—The term ‘appropriate committees of mission shall include health professionals, em- Medicare, Medicaid, and SCHIP Balanced Congress’ means the Committees on Ways and ployers, third-party payers, individuals skilled Budget Refinement Act of 1999, the Medicare, Means and Energy and Commerce of the House in the conduct and interpretation of biomedical, Medicaid, and SCHIP Benefits Protection and of Representatives and the Committees on Fi- health services, and health economics research Improvement Act of 2000, Prescription Drug and nance and Health, Education, Labor, and Pen- and expertise in outcomes and effectiveness re- Medicare Improvement Act of 2003, and other sions of the Senate. search and technology assessment. Such mem- forces on the capacity of the core health care ‘‘(B) CORE HEALTH CARE SAFETY NET.—The bership shall also include recipients of care from safety net to continue their roles in the core term ‘core health care safety net’ means any core health care safety net and individuals who health care safety net system to care for unin- health care provider that— provide and manage the delivery of care by the sured individuals, medicaid beneficiaries, and ‘‘(i) by legal mandate or explicitly adopted core health care safety net. other vulnerable populations; mission, offers access to health care services to ‘‘(C) MAJORITY NONPROVIDERS.—Individuals ‘‘(C) monitoring existing data sets to assess patients, regardless of the ability of the patient who are directly involved in the provision, or the status of the core health care safety net and to pay for such services; and management of the delivery, of items and serv- health outcomes for vulnerable populations; ‘‘(ii) has a case mix that is substantially com- ices covered under the health care safety net ‘‘(D) wherever possible, linking and inte- prised of patients who are uninsured, covered programs shall not constitute a majority of the grating existing data systems to enhance the under the medicaid program, covered under any membership of the Commission. ability of the core health care safety net to track other public health care program, or are other- ‘‘(D) ETHICAL DISCLOSURE.—The Comptroller changes in the status of the core health care wise vulnerable populations. General shall establish a system for public dis- safety net and health outcomes for vulnerable Such term includes disproportionate share hos- closure by members of the Commission of financial and other potential conflicts of interest re- populations; pitals, Federally qualified health centers, other lating to such members. ‘‘(E) supporting the development of new data Federal, State, and locally supported clinics, systems where existing data are insufficient or ‘‘(3) TERMS.— rural health clinics, local health departments, ‘‘(A) IN GENERAL.—The terms of members of inadequate; and providers covered under the Emergency ‘‘(F) developing criteria and indicators of im- the Commission shall be for 3 years except that Medical Treatment and Labor Act. pending core health care safety net failure; of the members first appointed, the Comptroller ‘‘(C) HEALTH CARE SAFETY NET PROGRAMS.— ‘‘(G) establishing an early-warning system to General shall designate— The term ‘health care safety net programs’ in- identify impending failures of core health care ‘‘(i) four to serve a term of 1 year; cludes the following: safety net systems and providers; ‘‘(ii) four to serve a term of 2 years; and ‘‘(H) providing accurate and timely informa- ‘‘(i) MEDICAID.—The medicaid program under ‘‘(iii) five to serve a term of 3 years. ‘‘(B) VACANCIES.— tion to Federal, State, and local policymakers title XIX. ‘‘(ii) SCHIP.—The State children’s health in- ‘‘(i) IN GENERAL.—A vacancy in the Commis- on the indicators that may lead to the failure of sion shall be filled in the same manner in which the core health care safety net and an estimate surance program under title XXI. ‘‘(iii) MATERNAL AND CHILD HEALTH SERVICES the original appointment was made. of the projected consequences of such failures ‘‘(ii) APPOINTMENT.—Any member appointed and the impact of such a failure on the commu- BLOCK GRANT PROGRAM.—The maternal and child health services block grant program under to fill a vacancy occurring before the expiration nity; of the term for which the member’s predecessor ‘‘(I) monitoring and providing oversight for title V. ‘‘(iv) FQHC PROGRAMS.—Each federally fund- was appointed shall be appointed only for the the transition of individuals receiving supple- remainder of that term. mental security income benefits, medical assisted program under which a health center (as defined in section 330(1) of the Public Health Serv- ‘‘(iii) TERMS.—A member may serve after the ance under title XIX, or child health assistance expiration of that member’s term until a suc- under title XXI who enroll with a managed care ice Act), a Federally qualified health center (as defined in section 1861(aa)(4)), or a Federally- cessor has taken office. entity (as defined in section 1932(a)(1)(B)), in- ‘‘(4) COMPENSATION.— qualified health center (as defined in section cluding the review of— ‘‘(A) MEMBERS.—While serving on the busi- ‘‘(i) the degree to which health plans have the 1905(l)(2)(B)) receives funds. ness of the Commission (including travel time), capacity (including case management and man- ‘‘(v) RHC PROGRAMS.—Each federally funded a member of the Commission— agement information system infrastructure) to program under which a rural health clinic (as ‘‘(i) shall be entitled to compensation at the provide quality managed care services to such defined in section 1861(aa)(4) or 1905(l)(1)) re- per diem equivalent of the rate provided for level an individual; ceives funds. IV of the Executive Schedule under section 5315 ‘‘(ii) the degree to which these plans may be ‘‘(vi) DSH PAYMENT PROGRAMS.—Each feder- of title 5, United States Code; and overburdened by adverse selection; and ally funded program under which a dispropor- ‘‘(ii) while so serving away from home and the ‘‘(iii) the degree to which emergency depart- tionate share hospital receives funds. member’s regular place of business, may be al- ments are used by enrollees of these plans; and ‘‘(vii) EMERGENCY MEDICAL TREATMENT AND lowed travel expenses, as authorized by the ‘‘(J) identifying and disseminating the best ACTIVE LABOR ACT.—All care provided under Commission. practices for more effective application of the section 1867 for the uninsured, underinsured, ‘‘(B) TREATMENT.—For purposes of pay (other lessons that have been learned. beneficiaries under title XIX, and other vulner- than pay of members of the Commission) and ‘‘(2) REPORTS.— able individuals. employment benefits, rights, and privileges, all ‘‘(A) ANNUAL REPORTS.—Not later than June 1 ‘‘(viii) OTHER HEALTH CARE SAFETY NET PRO- personnel of the Commission shall be treated as of each year (beginning with 2005), the Commis- GRAMS.—Such term also includes any other if they were employees of the United States Sen- sion shall, based on the review conducted under health care program that the Commission deter- ate. paragraph (1), submit to the appropriate com- mines to be appropriate. ‘‘(5) CHAIR; VICE CHAIR.—The Comptroller mittees of Congress a report on— ‘‘(D) VULNERABLE POPULATIONS.—The term General shall designate a member of the Com- ‘‘(i) the health care needs of the uninsured; ‘vulnerable populations’ includes uninsured and mission, at the time of appointment of the mem- and underinsured individuals, low-income individ- ber as Chair and a member as Vice Chair for

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that term of appointment, except that in the (b) EFFECTIVE DATE.—The Comptroller Gen- (4) Private-sector choice for medicare bene- case of vacancy of the Chair or Vice Chair, the eral of the United States shall appoint the ini- ficiaries would provide two key benefits: It Comptroller General may designate another tial members of the Safety Net Organizations would be tailored to the needs of America’s sen- member for the remainder of that member’s term. and Patient Advisory Commission established iors, not the Government, and would create a ‘‘(6) MEETINGS.—The Commission shall meet under subsection (a) not later than June 1, 2004. powerful incentive for private-sector medicare at the call of the Chair or upon the written re- SEC. 625. URBAN HEALTH PROVIDER ADJUST- plans to provide the best quality health care to quest of a majority of its members. MENT. seniors at the most affordable price. ‘‘(d) DIRECTOR AND STAFF; EXPERTS AND CON- (a) IN GENERAL.—Beginning with fiscal year (5) The method by which the national pre- SULTANTS.—Subject to such review as the Comp- 2004, notwithstanding section 1923(f) of the So- ferred provider organizations in the Federal Em- troller General determines necessary to ensure cial Security Act (42 U.S.C. 1396r–4(f)) and sub- ployees Health Benefits Program have been re- the efficient administration of the Commission, ject to subsection (c), with respect to a State, imbursed has proven to be a reliable and suc- the Commission may— payment adjustments made under title XIX of cessful mechanism for providing Members of ‘‘(1) employ and fix the compensation of an the Social Security Act (42 U.S.C. 1396 et seq.) to Congress and Federal employees with excellent Executive Director (subject to the approval of a hospital described in subsection (b) shall be health care choices. the Comptroller General) and such other per- made without regard to the DSH allotment limi- (6) Unlike the medicare payment system, sonnel as may be necessary to carry out the du- tation for the State determined under section which has had to be changed by Congress every ties of the Commission under this section (with- 1923(f) of that Act (42 U.S.C. 1396r–4(f)). few years, the Federal Employees Health Bene- out regard to the provisions of title 5, United (b) HOSPITAL DESCRIBED.—A hospital is de- fits Program has existed for 43 years with mini- States Code, governing appointments in the scribed in this subsection if the hospital— mal changes from Congress. competitive service); (1) is owned or operated by a State (as defined (b) SENSE OF THE SENATE.—It is the sense of ‘‘(2) seek such assistance and support as may for purposes of title XIX of the Social Security the Senate that medicare reform legislation be required in the performance of the duties of Act), or by an instrumentality or a municipal should: the Commission under this section from appro- governmental unit within a State (as so defined) (1) Ensure that prescription drug coverage is priate Federal departments and agencies; as of January 1, 2003; and directed to those who need it most. ‘‘(3) enter into contracts or make other ar- (2) is located in Marion County, Indiana. (2) Provide that Government contributions rangements, as may be necessary for the con- (c) LIMITATION.—The payment adjustment de- used to support MedicareAdvantage plans are duct of the work of the Commission (without re- scribed in subsection (a) for fiscal year 2004 and based on market principles beginning in 2006 to gard to section 3709 of the Revised Statutes (41 each fiscal year thereafter shall not exceed 175 ensure the long- and short-term viability of such U.S.C. 5)); percent of the costs of furnishing hospital serv- options for America’s seniors. ‘‘(4) make advance, progress, and other pay- ices described in section 1923(g)(1)(A) of the So- (3) Develop a payment system for the ments which relate to the work of the Commis- cial Security Act (42 U.S.C. 1396r–4(g)(1)(A)). MedicareAdvantage preferred provider organi- sion; zations similar to the payment system used for SEC. 626. COMMITTEE ON DRUG COMPOUNDING. ‘‘(5) provide transportation and subsistence the national preferred provider organizations in (a) ESTABLISHMENT.—The Secretary of Health for persons serving without compensation; and the Federal Employees Health Benefits Program. and Human Services shall establish an Com- ‘‘(6) prescribe such rules and regulations as it (4) Limit the addition of new unfunded obli- mittee on Drug Compounding (referred to in this deems necessary with respect to the internal or- gations in the medicare program so that the section as the ‘‘Committee’’) within the Food ganization and operation of the Commission. long-term solvency of this important program is and Drug Administration on drug compounding ‘‘(e) POWERS.— not further jeopardized. ‘‘(1) OBTAINING OFFICIAL DATA.— to ensure that patients are receiving necessary, (5) Incorporate private sector, market-based ‘‘(A) IN GENERAL.—The Commission may se- safe and accurate dosages of compounded drugs. elements, that do not rely on the inefficient cure directly from any department or agency of (b) MEMBERSHIP.—The membership of the Ad- medicare price control structure. the United States information necessary for the visory Committee shall be appointed by the Sec- (6) Keep the cost of structural changes and Commission to carry the duties under this secretary of Health and Human Services and shall new benefits within the $400,000,000,000 provided tion. include representatives of— for under the current Congressional Budget Res- ‘‘(B) REQUEST OF CHAIR.—Upon request of the (1) the National Association of Boards of olution for implementing medicare reform and Chair, the head of that department or agency Pharmacy; providing a prescription drug benefit. shall furnish that information to the Commis- (2) pharmacy groups; (7) Preserve the current employer-sponsored sion on an agreed upon schedule. (3) physician groups; retiree health plans and not design a benefit ‘‘(2) DATA COLLECTION.—In order to carry out (4) consumer and patient advocate groups; which has the unintended consequences of sup- the duties of the Commission under this section, (5) the United States Pharmacopoeia; and planting private coverage. the Commission shall— (6) other individuals determined appropriate (8) Incorporate regulatory reform proposals to ‘‘(A) use existing information, both published by the Secretary. eliminate red tape and reduce costs. and unpublished, where possible, collected and (c) REPORT AND RECOMMENDATIONS.—Not (9) Restore the right of medicare beneficiaries assessed either by the staff of the Commission or later than 1 year after the date of enactment of and their doctors to work together to provide under other arrangements made in accordance this Act, the Committee shall submit to the Sec- services, allow private fee for service plans to set with this section; retary a report concerning the recommendations their own premiums, and permit seniors to add ‘‘(B) carry out, or award grants or contracts of the Committee to improve and protect patient their own dollars beyond the Government con- for, original research and experimentation, safety. tribution. where existing information is inadequate; and (d) TERMINATION.—The Committee shall termi- SEC. 628. SENSE OF THE SENATE REGARDING THE ‘‘(C) adopt procedures allowing any interested nate on the date that is 1 year after the date of ESTABLISHMENT OF A NATIONWIDE party to submit information for the Commis- enactment of this Act. PERMANENT LIFESTYLE MODIFICA- sion’s use in making reports and recommenda- SEC. 627. SENSE OF THE SENATE CONCERNING TION PROGRAM FOR MEDICARE tions. THE STRUCTURE OF MEDICARE RE- BENEFICIARIES. ‘‘(3) ACCESS OF GAO TO INFORMATION.—The FORM AND THE PRESCRIPTION (a) FINDINGS.—Congress finds that: Comptroller General shall have unrestricted ac- DRUG BENEFIT. (1) Heart disease kills more than 500,000 Amer- cess to all deliberations, records, and nonpropri- (a) FINDINGS.—The Senate makes the fol- icans per year. etary data that pertains to the work of the Com- lowing findings: (2) The number and costs of interventions for mission, immediately upon request. The expense (1) America’s seniors deserve a fiscally-strong the treatment of coronary disease are rising and of providing such information shall be borne by medicare system that fulfills its promise to them currently cost the health care system the General Accounting Office. and future retirees. $58,000,000,000 annually. ‘‘(4) PERIODIC AUDIT.—The Commission shall (2) The impending retirement of the ‘‘baby (3) The Medicare Lifestyle Modification Pro- be subject to periodic audit by the Comptroller boom’’ generation will dramatically increase the gram has been operating throughout 12 States General. costs of providing medicare benefits. Medicare and has been demonstrated to reduce the need ‘‘(f) APPLICATION OF FACA.—Section 14 of the costs will double relative to the size of the econ- for coronary procedures by 88 percent per year. Federal Advisory Committee Act (5 U.S.C. App.) omy from 2 percent of GDP today to 4 percent (4) The Medicare Lifestyle Modification Pro- does not apply to the Commission. in 2025 and double again to 8 percent of GDP in gram is less expensive to deliver than inter- ‘‘(g) AUTHORIZATION OF APPROPRIATIONS.— 2075. This growth will accelerate substantially ventional cardiac procedures and could reduce ‘‘(1) REQUEST FOR APPROPRIATIONS.—The when Congress adds a necessary prescription cardiovascular expenditures by $36,000,000,000 Commission shall submit requests for appropria- drug benefit. annually. tions in the same manner as the Comptroller (3) Medicare’s current structure does not have (5) Lifestyle choices such as diet and exercise General submits requests for appropriations, but the flexibility to quickly adapt to rapid ad- affect heart disease and heart disease outcomes amounts appropriated for the Commission shall vances in modern health care. Medicare lags far by 50 percent or greater. be separate from amounts appropriated for the behind other insurers in providing prescription (6) Intensive lifestyle interventions which in- Comptroller General. drug coverage, disease management programs, clude teams of nurses, doctors, exercise physi- ‘‘(2) AUTHORIZATION.—There are authorized and host of other advances. Reforming medicare ologists, registered dietitians, and behavioral to be appropriated such sums as may be nec- to create a more self-adjusting, innovative struc- health clinicians have been demonstrated to re- essary to carry out the provisions of this sec- ture is essential to improve medicare’s efficiency duce heart disease risk factors and enhance tion.’’. and the quality of the medical care it provides. heart disease outcomes dramatically.

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00117 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8986 CONGRESSIONAL RECORD — SENATE July 7, 2003 (7) The National Institutes of Health estimates the price of the drugs and biologicals, nor the MedicareAdvantage plan under part C of such that 17,000,000 Americans have diabetes and the standards of care that encourage their use, are title, as amended by this Act; or Centers for Disease Control and Prevention esti- within the control of physicians; and (2) requiring employment-based retiree health mates that the number of Americans who have (11) SGR target adjustments have not been coverage (as so defined) that provides medical a diagnosis of diabetes increased 61 percent in made for cost increases due to new coverage de- benefits to retired participants who are not eligi- the last decade and is expected to more than cisions and new rules and regulations. ble for medical benefits under title XVIII of the double by 2050. (b) SENSE OF THE SENATE.—It is the sense of Social Security Act or under a plan maintained (8) Lifestyle modification programs are supe- the Senate that— by a State or an agency thereof to provide med- rior to medication therapy for treating diabetes. (1) the Center for Medicare & Medicaid Serv- ical benefits, or the same medical benefits, to re- (9) Individuals with diabetes are now consid- ices (CMS) should use its discretion to exclude tired participants who are so eligible. ered to have coronary disease at the date of di- drugs and biologicals administered incident to (b) ADEA.— agnosis of their diabetic state. physician services from the sustainable growth (1) IN GENERAL.—Section 4(l) of the Age Dis- (10) The Medicare Lifestyle Modification Pro- rate (SGR) system; crimination in Employment Act of 1967 (29 gram has been an effective lifestyle program for (2) CMS should use its discretion to make SGR U.S.C. 623(l)) is amended by adding at the end the reversal and treatment of heart disease. target adjustments for new coverage decisions the following: (11) Men with prostate cancer have shown sig- and new rules and regulations; and ‘‘(4) An employee benefit plan (as defined in nificant improvement in prostate cancer markers (3) in order to provide ample time for Congress section 3(3) of the Employee Retirement Income using a similar approach in lifestyle modifica- to consider more fundamental changes to the Security Act of 1974 (29 U.S.C. 1002(3))) shall tion. SGR system, the conferees on the Prescription not be treated as violating subsection (a), (b), (12) These lifestyle changes are therefore like- Drug and Medicare Improvement Act of 2003 (c), or (e) solely because the plan provides med- ly to affect other chronic disease states, in addi- should include in the conference agreement a ical benefits to retired participants who are not tion to heart disease. provision to establish a minimum percentage up- eligible for medical benefits under title XVIII of the Social Security Act (42 U.S.C. 1395 et seq.) or (b) SENSE OF THE SENATE.—It is the sense of date in physician fees for the next 2 years and the Senate that— should consider adding provisions that would under a plan maintained by a State or an agen- (1) the Secretary of Health and Human Serv- mitigate the swings in payment, such as estab- cy thereof, but does not provide medical bene- ices should carry out the demonstration project lishing multi-year adjustments to recoup the fits, or the same medical benefits, to retired par- known as the Lifestyle Modification Program variance and creating ‘‘tolerance’’ corridors for ticipants who are so eligible.’’ (2) EFFECTIVE DATE.—The amendment made Demonstration, as described in the Health Care variations around the update target trend. by this subsection shall apply as of the date of Financing Administration Memorandum of Un- SEC. 630. TEMPORARY SUSPENSION OF OASIS RE- the enactment of this Act. derstanding entered into on November 13, 2000, QUIREMENT FOR COLLECTION OF on a permanent basis; DATA ON NON-MEDICARE AND NON- SEC. 632. ONE HUNDRED PERCENT FMAP FOR MEDICAID PATIENTS. MEDICAL ASSISTANCE PROVIDED TO (2) the project should include as many Medi- A NATIVE HAWAIIAN THROUGH A care beneficiaries as would like to participate in (a) IN GENERAL.—During the period described FEDERALLY-QUALIFIED HEALTH the project on a voluntary basis; and in subsection (b), the Secretary may not require, CENTER OR A NATIVE HAWAIIAN (3) the project should be conducted on a na- under section 4602(e) of the Balanced Budget HEALTH CARE SYSTEM UNDER THE tional basis. Act of 1997 or otherwise under OASIS, a home MEDICAID PROGRAM. SEC. 629. SENSE OF THE SENATE ON PAYMENT health agency to gather or submit information (a) MEDICAID.—Section 1905(b) of the Social REDUCTIONS UNDER MEDICARE that relates to an individual who is not eligible Security Act (42 U.S.C. 1396d(b)) is amended, in PHYSICIAN FEE SCHEDULE. for benefits under either title XVIII or title XIX the third sentence, by inserting ‘‘, and with re- (a) FINDINGS.—Congress finds that— of the Social Security Act (such information in spect to medical assistance provided to a Native (1) the fees medicare pays physicians were re- this section referred to as ‘‘non-medicare/med- Hawaiian (as defined in section 12 of the Native duced by 5.4 percent across-the-board in 2002; icaid OASIS information’’). Hawaiian Health Care Improvement Act) (2) recent action by Congress narrowly avert- (b) PERIOD OF SUSPENSION.—The period de- through a federally-qualified health center or a ed another across-the-board reduction of 4.4 scribed in this subsection— Native Hawaiian health care system (as so de- percent for 2003; (1) begins on the date of the enactment of this fined) whether directly, by referral, or under (3) based on current projections, the Centers Act; and contract or other arrangement between a feder- for Medicare & Medicaid Services (CMS) esti- (2) ends on the last day of the 2nd month be- ally-qualified health center or a Native Hawai- mates that, absent legislative or administrative ginning after the date as of which the Secretary ian health care system and another health care action, fees will be reduced across-the-board has published final regulations regarding the provider’’ before the period. once again in 2004 by 4.2 percent; collection and use by the Centers for Medicare (b) EFFECTIVE DATE.—The amendment made (4) the prospect of continued payment reduc- & Medicaid Services of non-medicare/medicaid by this section applies to medical assistance pro- tions under the medicare physician fee schedule OASIS information following the submission of vided on or after the date of enactment of this for the foreseeable future threatens to desta- the report required under subsection (c). Act. bilize an important element of the program, (c) REPORT.— SEC. 633. EXTENSION OF MORATORIUM. namely physician participation and willingness (1) STUDY.—The Secretary shall conduct a (a) IN GENERAL.—Section 6408(a)(3) of the to accept medicare patients; study on how non-medicare/medicaid OASIS in- Omnibus Budget Reconciliation Act of 1989, as (5) the primary source of this instability is the formation is and can be used by large home amended by section 13642 of the Omnibus Budg- sustainable growth rate (SGR), a system of an- health agencies. Such study shall examine— et Reconciliation Act of 1993 and section 4758 of nual spending targets for physicians’ services (A) whether there are unique benefits from the the Balanced Budget Act of 1997, is amended— under medicare; analysis of such information that cannot be de- (1) by striking ‘‘until December 31, 2002’’, and (6) the SGR system has a number of defects rived from other information available to, or col- (2) by striking ‘‘Kent Community Hospital that result in unrealistically low spending tar- lected by, such agencies; and Complex in Michigan or.’’ (b) EFFECTIVE DATES.— gets, such as the use of the increase in the gross (B) the value of collecting such information (1) PERMANENT EXTENSION.—The amendment by small home health agencies compared to the domestic product (GDP) as a proxy for increases made by subsection (a)(1) shall take effect as if administrative burden related to such collection. in the volume and intensity of services provided included in the amendment made by section 4758 In conducting the study the Secretary shall ob- by physicians, no tolerance for variance be- of the Balanced Budget Act of 1997. tain recommendations from quality assessment tween growth in medicare beneficiary health (2) MODIFICATION.—The amendment made by experts in the use of such information and the care costs and our Nation’s GDP, and a require- subsection (a)(2) shall take effect on the date of necessity of small, as well as large, home health ment for immediate recoupment of the dif- enactment of this Act. agencies collecting such information. ference; SEC. 634. GAO STUDY OF PHARMACEUTICAL (2) REPORT.—The Secretary shall submit to (7) both administrative and legislative action PRICE CONTROLS AND PATENT PRO- are needed to return stability to the physician Congress a report on the study conducted under TECTIONS IN THE G–7 COUNTRIES. payment system; paragraph (1) by not later than 18 months after (a) STUDY.—The Comptroller General of the (8) using the discretion given to it by medicare the date of the enactment of this Act. United States shall conduct a study of price law, CMS has included expenditures for pre- (d) CONSTRUCTION.—Nothing in this section controls imposed on pharmaceuticals in France, scription drugs and biologicals administered in- shall be construed as preventing home health Germany, Italy, Japan, the United Kingdom cident to physicians’ services under the annual agencies from collecting non-medicare/medicaid and Canada to review the impact such regula- spending targets without making appropriate OASIS information for their own use. tions have on consumers, including American adjustments to the targets to reflect price in- SEC. 631. EMPLOYER FLEXIBILITY. consumers, and on innovation in medicine. The creases in these drugs and biologicals or the (a) MEDICARE.—Nothing in part D of title study shall include the following: growing reliance on such therapies in the treat- XVIII of the Social Security Act, as added by (1) The pharmaceutical price control structure ment of medicare patients; section 101, shall be construed as— in each country for a wide range of pharma- (9) between 1996 and 2002, annual medicare (1) preventing employment-based retiree ceuticals, compared with average pharma- spending on these drugs grew from $1,800,000,000 health coverage (as defined in section 1860D– ceutical prices paid by Americans covered by to $6,200,000,000, or from $55 per beneficiary to 20(e)(4)(B) of such Act, as so added) from pro- private sector health insurance. an estimated $187 per beneficiary; viding coverage that is supplemental to the ben- (2) The proportion of the cost for innovation (10) although physicians are responsible for efits provided under a Medicare Prescription borne by American consumers, compared with prescribing these drugs and biologicals, neither Drug plan under such part or a consumers in the other 6 countries.

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(3) A review of how closely the observed prices ‘‘(F) developing criteria and indicators of im- ‘‘(C) HEALTH CARE SAFETY NET PROGRAMS.— in regulated markets correspond to the prices pending core health care safety net failure; The term ‘health care safety net programs’ in- that efficiently distribute common costs of pro- ‘‘(G) establishing an early-warning system to cludes the following: duction (‘‘Ramsey prices’’). identify impending failures of core health care ‘‘(i) MEDICAID.—The medicaid program under (4) A review of any peer-reviewed literature safety net systems and providers; title XIX. that might show the health consequences to pa- ‘‘(H) providing accurate and timely informa- ‘‘(ii) SCHIP.—The State children’s health in- tients in the listed countries that result from the tion to Federal, State, and local policymakers surance program under title XXI. absence or delayed introduction of medicines, on the indicators that may lead to the failure of ‘‘(iii) MATERNAL AND CHILD HEALTH SERVICES including the cost of not having access to medi- the core health care safety net and an estimate BLOCK GRANT PROGRAM.—The maternal and cines, in terms of lower life expectancy and of the projected consequences of such failures child health services block grant program under lower quality of health. and the impact of such a failure on the commu- title V. (5) The impact on American consumers, in nity; ‘‘(iv) FQHC PROGRAMS.—Each federally fund- terms of reduced research into new or improved ‘‘(I) monitoring and providing oversight for ed program under which a health center (as de- pharmaceuticals (including the cost of delaying the transition of individuals receiving supple- fined in section 330(1) of the Public Health Serv- the introduction of a significant advance in cer- mental security income benefits, medical assist- ice Act), a Federally qualified health center (as tain major diseases), if similar price controls ance under title XIX, or child health assistance defined in section 1861(aa)(4)), or a Federally- were adopted in the United States. under title XXI who enroll with a managed care qualified health center (as defined in section (6) The existing standards under international entity (as defined in section 1932(a)(1)(B)), in- 1905(l)(2)(B)) receives funds. conventions, including the World Trade Organi- cluding the review of— ‘‘(v) RHC PROGRAMS.—Each federally funded zation and the North American Free Trade ‘‘(i) the degree to which health plans have the program under which a rural health clinic (as Agreement, regarding regulated pharmaceutical capacity (including case management and man- defined in section 1861(aa)(4) or 1905(l)(1)) re- prices, including any restrictions on anti-com- agement information system infrastructure) to ceives funds. petitive laws that might apply to price regula- provide quality managed care services to such ‘‘(vi) DSH PAYMENT PROGRAMS.—Each feder- tions and how economic harm caused to con- an individual; ally funded program under which a dispropor- sumers in markets without price regulations ‘‘(ii) the degree to which these plans may be tionate share hospital receives funds. may be remedied. overburdened by adverse selection; and ‘‘(vii) EMERGENCY MEDICAL TREATMENT AND (7) In parallel trade regimes, how much of the ‘‘(iii) the degree to which emergency depart- ACTIVE LABOR ACT.—All care provided under price difference between countries in the Euro- ments are used by enrollees of these plans; and section 1867 for the uninsured, underinsured, pean Union is captured by middlemen and how ‘‘(J) identifying and disseminating the best beneficiaries under title XIX, and other vulner- much goes to benefit patients and health sys- practices for more effective application of the able individuals. tems where parallel importing is significant. lessons that have been learned. ‘‘(viii) OTHER HEALTH CARE SAFETY NET PRO- (8) How much cost is imposed on the owner of ‘‘(2) REPORTS.— GRAMS.—Such term also includes any other a property right from counterfeiting and from ‘‘(A) ANNUAL REPORTS.—Not later than June 1 health care program that the Commission deter- international violations of intellectual property of each year (beginning with 2005), the Commis- mines to be appropriate. rights for prescription medicines. sion shall, based on the review conducted under ‘‘(D) VULNERABLE POPULATIONS.—The term (b) REPORT.—Not later than 1 year after the paragraph (1), submit to the appropriate com- date of enactment of this Act, the Comptroller ‘vulnerable populations’ includes uninsured and mittees of Congress a report on— underinsured individuals, low-income individ- General of the United States shall submit to ‘‘(i) the health care needs of the uninsured; Congress a report on the study conducted under uals, farm workers, homeless individuals, indi- and viduals with disabilities, individuals with HIV subsection (a). ‘‘(ii) the financial and infrastructure stability or AIDS, and such other individuals as the SEC. 635. SAFETY NET ORGANIZATIONS AND PA- of the Nation’s core health care safety net. Commission may designate. TIENT ADVISORY COMMISSION. ‘‘(B) AGENDA AND ADDITIONAL REVIEWS.— ‘‘(c) MEMBERSHIP.— (a) IN GENERAL.—Title XI (42 U.S.C. 1320 et ‘‘(i) AGENDA.—The Chair of the Commission ‘‘(1) NUMBER AND APPOINTMENT.—The Com- seq.) is amended by adding at the end the fol- shall consult periodically with the Chairpersons mission shall be composed of 13 members ap- lowing new part: and Ranking Minority Members of the appro- pointed by the Comptroller General of the ‘‘PART D—SAFETY NET ORGANIZATIONS AND priate committees of Congress regarding the United States (in this section referred to as the PATIENT ADVISORY COMMISSION Commission’s agenda and progress toward ‘Comptroller General’), in consultation with the achieving the agenda. ‘‘SAFETY NET ORGANIZATIONS AND PATIENT appropriate committees of Congress. ‘‘(ii) ADDITIONAL REVIEWS.—The Commission ADVISORY COMMISSION ‘‘(2) QUALIFICATIONS.— shall conduct additional reviews and submit ad- ‘‘SEC. 1181. (a) ESTABLISHMENT.—There is ‘‘(A) IN GENERAL.—The membership of the ditional reports to the appropriate committees of hereby established the Safety Net Organizations Commission shall include individuals with na- Congress on topics relating to the health care and Patient Advisory Commission (in this sec- tional recognition for their expertise in health safety net programs under the following cir- tion referred to as the ‘Commission’). finance and economics, health care safety net ‘‘(b) REVIEW OF HEALTH CARE SAFETY NET cumstances: ‘‘(I) If requested by the Chairpersons or Rank- research and program management, actuarial PROGRAMS AND REPORTING REQUIREMENTS.— science, health facility management, health ‘‘(1) REVIEW.—The Commission shall conduct ing Minority Members of such committees. plans and integrated delivery systems, reim- an ongoing review of the health care safety net ‘‘(II) If the Commission deems such additional bursement of health facilities, allopathic and os- programs (as described in paragraph (3)(C)) reviews and reports appropriate. teopathic medicine (including emergency medi- by— ‘‘(C) AVAILABILITY OF REPORTS.—The Commis- ‘‘(A) monitoring each health care safety net sion shall transmit to the Comptroller General cine), and other providers of health services, program to document and analyze the effects of and the Secretary a copy of each report sub- and other related fields, who provide a mix of changes in these programs on the core health mitted under this subsection and shall make different professionals, broad geographic rep- care safety net; such reports available to the public. resentation, and a balance between urban and ‘‘(B) evaluating the impact of the Emergency ‘‘(3) DEFINITIONS.—In this section: rural representatives. Medical Treatment and Labor Act, the Health ‘‘(A) APPROPRIATE COMMITTEES OF CON- ‘‘(B) INCLUSION.—The membership of the Com- Insurance Portability and Accountability Act of GRESS.—The term ‘appropriate committees of mission shall include health professionals, em- 1996, the Balanced Budget Act of 1997, the Congress’ means the Committees on Ways and ployers, third-party payers, individuals skilled Medicare, Medicaid, and SCHIP Balanced Means and Energy and Commerce of the House in the conduct and interpretation of biomedical, Budget Refinement Act of 1999, the Medicare, of Representatives and the Committees on Fi- health services, and health economics research Medicaid, and SCHIP Benefits Protection and nance and Health, Education, Labor, and Pen- and expertise in outcomes and effectiveness re- Improvement Act of 2000, Prescription Drug and sions of the Senate. search and technology assessment. Such mem- Medicare Improvement Act of 2003, and other ‘‘(B) CORE HEALTH CARE SAFETY NET.—The bership shall also include recipients of care from forces on the capacity of the core health care term ‘core health care safety net’ means any core health care safety net and individuals who safety net to continue their roles in the core health care provider that— provide and manage the delivery of care by the health care safety net system to care for unin- ‘‘(i) by legal mandate or explicitly adopted core health care safety net. sured individuals, medicaid beneficiaries, and mission, offers access to health care services to ‘‘(C) MAJORITY NONPROVIDERS.—Individuals other vulnerable populations; patients, regardless of the ability of the patient who are directly involved in the provision, or ‘‘(C) monitoring existing data sets to assess to pay for such services; and management of the delivery, of items and serv- the status of the core health care safety net and ‘‘(ii) has a case mix that is substantially com- ices covered under the health care safety net health outcomes for vulnerable populations; prised of patients who are uninsured, covered programs shall not constitute a majority of the ‘‘(D) wherever possible, linking and inte- under the medicaid program, covered under any membership of the Commission. grating existing data systems to enhance the other public health care program, or are other- ‘‘(D) ETHICAL DISCLOSURE.—The Comptroller ability of the core health care safety net to track wise vulnerable populations. General shall establish a system for public dis- changes in the status of the core health care Such term includes disproportionate share hos- closure by members of the Commission of finan- safety net and health outcomes for vulnerable pitals, Federally qualified health centers, other cial and other potential conflicts of interest re- populations; Federal, State, and locally supported clinics, lating to such members. ‘‘(E) supporting the development of new data rural health clinics, local health departments, ‘‘(3) TERMS.— systems where existing data are insufficient or and providers covered under the Emergency ‘‘(A) IN GENERAL.—The terms of members of inadequate; Medical Treatment and Labor Act. the Commission shall be for 3 years except that

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00119 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8988 CONGRESSIONAL RECORD — SENATE July 7, 2003 of the members first appointed, the Comptroller ‘‘(A) use existing information, both published tional criminal background check on such work- General shall designate— and unpublished, where possible, collected and er in accordance with the provisions of sub- ‘‘(i) four to serve a term of 1 year; assessed either by the staff of the Commission or section (e)(6); and ‘‘(ii) four to serve a term of 2 years; and under other arrangements made in accordance ‘‘(II) submit to such State agency the informa- ‘‘(iii) five to serve a term of 3 years. with this section; tion described in subclauses (II) through (IV) of ‘‘(B) VACANCIES.— ‘‘(B) carry out, or award grants or contracts clause (ii) not more than 7 days (excluding Sat- ‘‘(i) IN GENERAL.—A vacancy in the Commis- for, original research and experimentation, urdays, Sundays, and legal public holidays sion shall be filled in the same manner in which where existing information is inadequate; and under section 6103(a) of title 5, United States the original appointment was made. ‘‘(C) adopt procedures allowing any interested Code) after completion of the check against the ‘‘(ii) APPOINTMENT.—Any member appointed to fill a vacancy occurring before the expiration party to submit information for the Commis- system initiated under clause (iii). ROHIBITION ON HIRING OF ABUSIVE of the term for which the member’s predecessor sion’s use in making reports and recommenda- ‘‘(B) P was appointed shall be appointed only for the tions. WORKERS.— ‘‘(i) IN GENERAL.—A skilled nursing facility remainder of that term. ‘‘(3) ACCESS OF GAO TO INFORMATION.—The ‘‘(iii) TERMS.—A member may serve after the Comptroller General shall have unrestricted ac- may not knowingly employ any skilled nursing expiration of that member’s term until a success to all deliberations, records, and nonpropri- facility worker who has any conviction for a cessor has taken office. etary data that pertains to the work of the Com- relevant crime or with respect to whom a finding ‘‘(4) COMPENSATION.— mission, immediately upon request. The expense of patient or resident abuse has been made. ‘‘(A) MEMBERS.—While serving on the busi- of providing such information shall be borne by ‘‘(ii) PROVISIONAL EMPLOYMENT.—After com- ness of the Commission (including travel time), the General Accounting Office. plying with the requirements of clauses (i), (ii), a member of the Commission— ‘‘(4) PERIODIC AUDIT.—The Commission shall and (iii) of subparagraph (A), a skilled nursing ‘‘(i) shall be entitled to compensation at the be subject to periodic audit by the Comptroller facility may provide for a provisional period of per diem equivalent of the rate provided for level General. employment for a skilled nursing facility worker IV of the Executive Schedule under section 5315 ‘‘(f) APPLICATION OF FACA.—Section 14 of the pending completion of the check against the of title 5, United States Code; and Federal Advisory Committee Act (5 U.S.C. App.) data collection system described under subpara- ‘‘(ii) while so serving away from home and the does not apply to the Commission. graph (A)(iii) and the background check de- member’s regular place of business, may be al- ‘‘(g) AUTHORIZATION OF APPROPRIATIONS.— scribed under subparagraph (A)(iv). Subject to lowed travel expenses, as authorized by the ‘‘(1) REQUEST FOR APPROPRIATIONS.—The clause (iii), such facility shall maintain direct Commission. Commission shall submit requests for appropria- supervision of the covered individual during the ‘‘(B) TREATMENT.—For purposes of pay (other tions in the same manner as the Comptroller worker’s provisional period of employment. than pay of members of the Commission) and General submits requests for appropriations, but ‘‘(iii) EXCEPTION FOR SMALL RURAL SKILLED employment benefits, rights, and privileges, all amounts appropriated for the Commission shall NURSING FACILITIES.—In the case of a small personnel of the Commission shall be treated as be separate from amounts appropriated for the rural skilled nursing facility (as defined by the if they were employees of the United States Sen- Comptroller General. Secretary), the Secretary shall provide, by regu- ate. ‘‘(2) AUTHORIZATION.—There are authorized lation after consultation with providers of ‘‘(5) CHAIR; VICE CHAIR.—The Comptroller to be appropriated such sums as may be nec- skilled nursing facility services and entities rep- General shall designate a member of the Com- essary to carry out the provisions of this sec- resenting beneficiaries of such services, for an mission, at the time of appointment of the mem- tion.’’. appropriate level of supervision with respect to ber as Chair and a member as Vice Chair for (b) EFFECTIVE DATE.—The Comptroller Gen- any provisional employees employed by the fa- that term of appointment, except that in the eral of the United States shall appoint the ini- cility in accordance with clause (ii). Such regu- case of vacancy of the Chair or Vice Chair, the tial members of the Safety Net Organizations lation should encourage the provision of direct Comptroller General may designate another and Patient Advisory Commission established supervision of such employees whenever prac- member for the remainder of that member’s term. under subsection (a) not later than June 1, 2004. ticable with respect to such a facility and if ‘‘(6) MEETINGS.—The Commission shall meet SEC. 636. ESTABLISHMENT OF PROGRAM TO PRE- such supervision would not impose an unrea- at the call of the Chair or upon the written re- VENT ABUSE OF NURSING FACILITY sonable cost or other burden on the facility. quest of a majority of its members. RESIDENTS. ‘‘(C) REPORTING REQUIREMENTS.—A skilled ‘‘(d) DIRECTOR AND STAFF; EXPERTS AND CON- (a) IN GENERAL.— nursing facility shall report to the State any in- SULTANTS.—Subject to such review as the Comp- (1) SCREENING OF SKILLED NURSING FACILITY stance in which the facility determines that a troller General determines necessary to ensure AND NURSING FACILITY PROVISIONAL EMPLOY- skilled nursing facility worker has committed an the efficient administration of the Commission, EES.— act of resident neglect or abuse or misappropria- the Commission may— (A) MEDICARE PROGRAM.—Section 1819(b) (42 tion of resident property in the course of em- ‘‘(1) employ and fix the compensation of an U.S.C. 1395i–3(b)) is amended by adding at the ployment by the facility. Executive Director (subject to the approval of end the following: ‘‘(D) USE OF INFORMATION.— the Comptroller General) and such other per- ‘‘(8) SCREENING OF SKILLED NURSING FACILITY ‘‘(i) IN GENERAL.—A skilled nursing facility sonnel as may be necessary to carry out the du- WORKERS.— that obtains information about a skilled nursing ties of the Commission under this section (with- ‘‘(A) BACKGROUND CHECKS OF PROVISIONAL facility worker pursuant to clauses (iii) and (iv) out regard to the provisions of title 5, United EMPLOYEES.—Subject to subparagraph (B)(ii), of subparagraph (A) may use such information States Code, governing appointments in the after a skilled nursing facility selects an indi- only for the purpose of determining the suit- competitive service); vidual for a position as a skilled nursing facility ability of the worker for employment. ‘‘(2) seek such assistance and support as may worker, the facility, prior to employing such ‘‘(ii) IMMUNITY FROM LIABILITY.—A skilled be required in the performance of the duties of worker in a status other than a provisional sta- nursing facility that, in denying employment for the Commission under this section from appro- tus to the extent permitted under subparagraph an individual selected for hiring as a skilled priate Federal departments and agencies; (B)(ii), shall— nursing facility worker (including during the ‘‘(3) enter into contracts or make other ar- ‘‘(i) give such worker written notice that the period described in subparagraph (B)(ii)), rea- rangements, as may be necessary for the con- facility is required to perform background sonably relies upon information about such in- duct of the work of the Commission (without re- checks with respect to provisional employees; dividual provided by the State pursuant to sub- gard to section 3709 of the Revised Statutes (41 ‘‘(ii) require, as a condition of employment, section (e)(6) or section 1128E shall not be liable U.S.C. 5)); that such worker— ‘‘(4) make advance, progress, and other pay- in any action brought by such individual based ‘‘(I) provide a written statement disclosing ments which relate to the work of the Commis- on the employment determination resulting from any conviction for a relevant crime or finding of sion; the information. patient or resident abuse; ‘‘(5) provide transportation and subsistence ‘‘(iii) CRIMINAL PENALTY.—Whoever know- ‘‘(II) provide a statement signed by the worker for persons serving without compensation; and ingly violates the provisions of clause (i) shall ‘‘(6) prescribe such rules and regulations as it authorizing the facility to request the search be fined in accordance with title 18, United deems necessary with respect to the internal or- and exchange of criminal records; States Code, imprisoned for not more than 2 ganization and operation of the Commission. ‘‘(III) provide in person to the facility a copy years, or both. ‘‘(e) POWERS.— of the worker’s fingerprints or thumb print, de- ‘‘(E) CIVIL PENALTY.— ‘‘(1) OBTAINING OFFICIAL DATA.— pending upon available technology; and ‘‘(i) IN GENERAL.—A skilled nursing facility ‘‘(A) IN GENERAL.—The Commission may se- ‘‘(IV) provide any other identification infor- that violates the provisions of this paragraph cure directly from any department or agency of mation the Secretary may specify in regulation; shall be subject to a civil penalty in an amount the United States information necessary for the ‘‘(iii) initiate a check of the data collection not to exceed— Commission to carry the duties under this sec- system established under section 1128E in ac- ‘‘(I) for the first such violation, $2,000; and tion. cordance with regulations promulgated by the ‘‘(II) for the second and each subsequent vio- ‘‘(B) REQUEST OF CHAIR.—Upon request of the Secretary to determine whether such system lation within any 5-year period, $5,000. Chair, the head of that department or agency contains any disqualifying information with re- ‘‘(ii) KNOWING RETENTION OF WORKER.—In ad- shall furnish that information to the Commis- spect to such worker; and dition to any civil penalty under clause (i), a sion on an agreed upon schedule. ‘‘(iv) if that system does not contain any such skilled nursing facility that— ‘‘(2) DATA COLLECTION.—In order to carry out disqualifying information— ‘‘(I) knowingly continues to employ a skilled the duties of the Commission under this section, ‘‘(I) request through the appropriate State nursing facility worker in violation of subpara- the Commission shall— agency that the State initiate a State and na- graph (A) or (B); or

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00120 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8989 ‘‘(II) knowingly fails to report a skilled nurs- ‘‘(II) submit to such State agency the informa- and $10,000 for the second and each subsequent ing facility worker under subparagraph (C), tion described in subclauses (II) through (IV) of violation within any 5-year period. shall be subject to a civil penalty in an amount clause (ii) not more than 7 days (excluding Sat- ‘‘(F) DEFINITIONS.—In this paragraph: not to exceed $5,000 for the first such violation, urdays, Sundays, and legal public holidays ‘‘(i) CONVICTION FOR A RELEVANT CRIME.—The and $10,000 for the second and each subsequent under section 6103(a) of title 5, United States term ‘conviction for a relevant crime’ means any violation within any 5-year period. Code) after completion of the check against the Federal or State criminal conviction for— ‘‘(F) DEFINITIONS.—In this paragraph: system initiated under clause (iii). ‘‘(I) any offense described in paragraphs (1) ‘‘(i) CONVICTION FOR A RELEVANT CRIME.—The ‘‘(B) PROHIBITION ON HIRING OF ABUSIVE through (4) of section 1128(a); and term ‘conviction for a relevant crime’ means any WORKERS.— ‘‘(II) such other types of offenses as the Sec- Federal or State criminal conviction for— ‘‘(i) IN GENERAL.—A nursing facility may not retary may specify in regulations, taking into ‘‘(I) any offense described in paragraphs (1) knowingly employ any nursing facility worker account the severity and relevance of such of- through (4) of section 1128(a); and who has any conviction for a relevant crime or fenses, and after consultation with representa- ‘‘(II) such other types of offenses as the Sec- with respect to whom a finding of patient or tives of long-term care providers, representatives retary may specify in regulations, taking into resident abuse has been made. of long-term care employees, consumer advo- account the severity and relevance of such of- ‘‘(ii) PROVISIONAL EMPLOYMENT.—After com- cates, and appropriate Federal and State offi- fenses, and after consultation with representa- plying with the requirements of clauses (i), (ii), cials. tives of long-term care providers, representatives and (iii) of subparagraph (A), a nursing facility ‘‘(ii) DISQUALIFYING INFORMATION.—The term of long-term care employees, consumer advo- may provide for a provisional period of employ- ‘disqualifying information’ means information cates, and appropriate Federal and State offi- ment for a nursing facility worker pending com- about a conviction for a relevant crime or a cials. pletion of the check against the data collection finding of patient or resident abuse. ‘‘(ii) DISQUALIFYING INFORMATION.—The term system described under subparagraph (A)(iii) ‘‘(iii) FINDING OF PATIENT OR RESIDENT ‘disqualifying information’ means information and the background check described under sub- ABUSE.—The term ‘finding of patient or resident about a conviction for a relevant crime or a paragraph (A)(iv). Subject to clause (iii), such abuse’ means any substantiated finding by a finding of patient or resident abuse. facility shall maintain direct supervision of the State agency under subsection (g)(1)(C) or a ‘‘(iii) FINDING OF PATIENT OR RESIDENT worker during the worker’s provisional period of Federal agency that a nursing facility worker ABUSE.—The term ‘finding of patient or resident employment. has committed— abuse’ means any substantiated finding by a ‘‘(iii) EXCEPTION FOR SMALL RURAL NURSING ‘‘(I) an act of patient or resident abuse or ne- State agency under subsection (g)(1)(C) or a FACILITIES.— glect or a misappropriation of patient or resi- Federal agency that a skilled nursing facility ‘‘(I) IN GENERAL.—In the case of a small rural dent property; or worker has committed— nursing facility (as defined by the Secretary), ‘‘(II) such other types of acts as the Secretary ‘‘(I) an act of patient or resident abuse or ne- the Secretary shall provide, by regulation after may specify in regulations. glect or a misappropriation of patient or resi- consultation with providers of nursing facility ‘‘(iv) NURSING FACILITY WORKER.—The term dent property; or services and entities representing beneficiaries ‘nursing facility worker’ means any individual ‘‘(II) such other types of acts as the Secretary of such services, for an appropriate level of su- (other than a volunteer) that has access to a pa- may specify in regulations. pervision with respect to any provisional em- tient of a nursing facility under an employment ‘‘(iv) SKILLED NURSING FACILITY WORKER.— ployees employed by the facility in accordance or other contract, or both, with such facility. The term ‘skilled nursing facility worker’ means with clause (ii). Such regulation should encour- Such term includes individuals who are licensed any individual (other than a volunteer) that age the provision of direct supervision of such or certified by the State to provide such services, has access to a patient of a skilled nursing facil- employees whenever practicable with respect to and nonlicensed individuals providing such ity under an employment or other contract, or such a facility and if such supervision would services, as defined by the Secretary, including both, with such facility. Such term includes in- not impose an unreasonable cost or other bur- nurse assistants, nurse aides, home health aides, dividuals who are licensed or certified by the den on the facility. and personal care workers and attendants.’’. State to provide such services, and nonlicensed ‘‘(C) REPORTING REQUIREMENTS.—A nursing (2) FEDERAL RESPONSIBILITIES.— individuals providing such services, as defined facility shall report to the State any instance in (A) DEVELOPMENT OF STANDARD FEDERAL AND by the Secretary, including nurse assistants, which the facility determines that a nursing fa- STATE BACKGROUND CHECK FORM.—The Sec- nurse aides, home health aides, and personal cility worker has committed an act of resident retary of Health and Human Services, in con- care workers and attendants.’’. neglect or abuse or misappropriation of resident sultation with the Attorney General and rep- (B) MEDICAID PROGRAM.—Section 1919(b) (42 property in the course of employment by the fa- resentatives of appropriate State agencies, shall U.S.C. 1396r(b)) is amended by adding at the cility. develop a model form that a provisional em- end the following new paragraph: ‘‘(D) USE OF INFORMATION.— ployee at a nursing facility may complete and ‘‘(8) SCREENING OF NURSING FACILITY WORK- ‘‘(i) IN GENERAL.—A nursing facility that ob- Federal and State agencies may use to conduct ERS.— tains information about a nursing facility work- the criminal background checks required under ‘‘(A) BACKGROUND CHECKS ON PROVISIONAL er pursuant to clauses (iii) and (iv) of subpara- sections 1819(b)(8) and 1919(b)(8) of the Social EMPLOYEES.—Subject to subparagraph (B)(ii), graph (A) may use such information only for Security Act (42 U.S.C. 1395i–3(b), 1396r(b)) (as after a nursing facility selects an individual for the purpose of determining the suitability of the added by this section). a position as a nursing facility worker, the fa- worker for employment. (B) PERIODIC EVALUATION.—The Secretary of cility, prior to employing such worker in a sta- ‘‘(ii) IMMUNITY FROM LIABILITY.—A nursing Health and Human Services, in consultation tus other than a provisional status to the extent facility that, in denying employment for an in- with the Attorney General, periodically shall permitted under subparagraph (B)(ii), shall— dividual selected for hiring as a nursing facility evaluate the background check system imposed ‘‘(i) give the worker written notice that the fa- worker (including during the period described in under sections 1819(b)(8) and 1919(b)(8) of the cility is required to perform background checks subparagraph (B)(ii)), reasonably relies upon Social Security Act (42 U.S.C. 1395i–3(b), with respect to provisional employees; information about such individual provided by 1396r(b)) (as added by this section) and shall im- ‘‘(ii) require, as a condition of employment, the State pursuant to subsection (e)(6) or section plement changes, as necessary, based on avail- that such worker— 1128E shall not be liable in any action brought able technology, to make the background check ‘‘(I) provide a written statement disclosing by such individual based on the employment de- system more efficient and able to provide a more any conviction for a relevant crime or finding of termination resulting from the information. immediate response to long-term care providers patient or resident abuse; ‘‘(iii) CRIMINAL PENALTY.—Whoever know- using the system. ‘‘(II) provide a statement signed by the worker ingly violates the provisions of clause (i) shall (3) NO PREEMPTION OF STRICTER STATE authorizing the facility to request the search be fined in accordance with title 18, United LAWS.—Nothing in section 1819(b)(8) or and exchange of criminal records; States Code, imprisoned for not more than 2 1919(b)(8) of the Social Security Act (42 U.S.C. ‘‘(III) provide in person to the facility a copy years, or both. 1395i–3(b)(8), 1396r(b)(8)) (as so added) shall be ‘‘(E) CIVIL PENALTY.— of the worker’s fingerprints or thumb print, de- construed to supersede any provision of State ‘‘(i) IN GENERAL.—A nursing facility that vio- pending upon available technology; and law that— lates the provisions of this paragraph shall be ‘‘(IV) provide any other identification infor- (A) specifies a relevant crime for purposes of subject to a civil penalty in an amount not to mation the Secretary may specify in regulation; prohibiting the employment of an individual at exceed— ‘‘(iii) initiate a check of the data collection ‘‘(I) for the first such violation, $2,000; and a long-term care facility (as defined in section system established under section 1128E in ac- ‘‘(II) for the second and each subsequent vio- 1128E(g)(6) of the Social Security Act (as added cordance with regulations promulgated by the lation within any 5-year period, $5,000. by subsection (e)) that is not included in the list Secretary to determine whether such system ‘‘(ii) KNOWING RETENTION OF WORKER.—In ad- of such crimes specified in such sections or in contains any disqualifying information with re- dition to any civil penalty under clause (i), a regulations promulgated by the Secretary of spect to such worker; and nursing facility that— Health and Human Services to carry out such ‘‘(iv) if that system does not contain any such ‘‘(I) knowingly continues to employ a nursing sections; or disqualifying information— facility worker in violation of subparagraph (A) (B) requires a long-term care facility (as so de- ‘‘(I) request through the appropriate State or (B); or fined) to conduct a background check prior to agency that the State initiate a State and na- ‘‘(II) knowingly fails to report a nursing facil- employing an individual in an employment posi- tional criminal background check on such work- ity worker under subparagraph (C), tion that is not included in the positions for er in accordance with the provisions of sub- shall be subject to a civil penalty in an amount which a background check is required under section (e)(8); and not to exceed $5,000 for the first such violation, such sections.

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(4) TECHNICAL AMENDMENTS.—Effective as if tiality, accuracy, use, destruction, and dissemi- and report required by subparagraph (C). The included in the enactment of section 941 of nation of information, audits and record- amount of such fee shall not exceed the actual BIPA (114 Stat. 2763A–585), sections 1819(b) and keeping, and the imposition of fees. cost of such activities. 1919(b) (42 U.S.C. 1395i–3(b), 1396r(b)), as ‘‘(ii) APPEAL PROCEDURES.—The Attorney ‘‘(ii) PROHIBITION ON CHARGING.—An entity amended by such section 941 are each amended General, in consultation with the Secretary, may not impose on a provisional employee or an by redesignating the paragraph (8) added by shall promulgate such regulations as are nec- employee any charges relating to the perform- such section as paragraph (9). essary to establish procedures by which a provi- ance of a background check under this para- (b) FEDERAL AND STATE REQUIREMENTS CON- sional employee or an employee may appeal or graph. CERNING BACKGROUND CHECKS.— dispute the accuracy of the information ob- ‘‘(E) REGULATIONS.— (1) MEDICARE.—Section 1819(e) (42 U.S.C. tained in a background check conducted under ‘‘(i) IN GENERAL.—In addition to the Sec- 1395i–3(e)) is amended by adding at the end the this paragraph. Appeals shall be limited to in- retary’s authority to promulgate regulations following: stances in which a provisional employee or an under this title, the Attorney General, in con- ‘‘(6) FEDERAL AND STATE REQUIREMENTS CON- employee is incorrectly identified as the subject sultation with the Secretary, may promulgate CERNING CRIMINAL BACKGROUND CHECKS ON of the background check, or when information such regulations as are necessary to carry out SKILLED NURSING FACILITY EMPLOYEES.— about the provisional employee or employee has the Attorney General’s responsibilities under ‘‘(A) IN GENERAL.—Upon receipt of a request not been updated to reflect changes in the provi- this paragraph and subsection (b)(8), including by a skilled nursing facility pursuant to sub- sional employee’s or employee’s criminal record. regulations regarding the security, confiden- section (b)(8) that is accompanied by the infor- ‘‘(F) REPORT.—Not later than 2 years after tiality, accuracy, use, destruction, and dissemi- mation described in subclauses (II) through (IV) the date of enactment of this paragraph, the At- nation of information, audits and record- of subsection (b)(8)(A)(ii), a State, after check- torney General shall submit a report to Congress keeping, and the imposition of fees. ing appropriate State records and finding no on— ‘‘(ii) APPEAL PROCEDURES.—The Attorney disqualifying information (as defined in sub- ‘‘(i) the number of requests for searches and General, in consultation with the Secretary, section (b)(8)(F)(ii)), shall immediately submit exchanges of records made under this section; shall promulgate such regulations as are nec- such request and information to the Attorney ‘‘(ii) the disposition of such requests; and essary to establish procedures by which a provi- General and shall request the Attorney General ‘‘(iii) the cost of responding to such re- sional employee or an employee may appeal or to conduct a search and exchange of records quests.’’. dispute the accuracy of the information ob- with respect to the individual as described in (2) MEDICAID.—Section 1919(e) (42 U.S.C. tained in a background check conducted under subparagraph (B). 1396r(e)) is amended by adding at the end the this paragraph. Appeals shall be limited to in- ‘‘(B) SEARCH AND EXCHANGE OF RECORDS BY following: stances in which a provisional employee or an ATTORNEY GENERAL.—Upon receipt of a submis- ‘‘(8) FEDERAL AND STATE REQUIREMENTS CON- employee is incorrectly identified as the subject sion pursuant to subparagraph (A), the Attor- CERNING CRIMINAL BACKGROUND CHECKS ON of the background check, or when information ney General shall direct a search of the records NURSING FACILITY EMPLOYEES.— about the provisional employee or employee has of the Federal Bureau of Investigation for any ‘‘(A) IN GENERAL.—Upon receipt of a request not been updated to reflect changes in the provi- criminal history records corresponding to the by a nursing facility pursuant to subsection sional employee’s or employee’s criminal record. (b)(8) that is accompanied by the information fingerprints and other positive identification in- ‘‘(F) REPORT.—Not later than 2 years after formation submitted. The Attorney General described in subclauses (II) through (IV) of sub- the date of enactment of this paragraph, the At- shall provide any corresponding information re- section (b)(8)(A)(ii), a State, after checking ap- torney General shall submit a report to Congress sulting from the search to the State. propriate State records and finding no disquali- on— ‘‘(C) STATE REPORTING OF INFORMATION TO fying information (as defined in subsection ‘‘(i) the number of requests for searches and SKILLED NURSING FACILITY.—Upon receipt of the (b)(8)(F)(ii)), shall immediately submit such re- exchanges of records made under this section; information provided by the Attorney General quest and information to the Attorney General ‘‘(ii) the disposition of such requests; and pursuant to subparagraph (B), the State shall— and shall request the Attorney General to con- ‘‘(iii) the cost of responding to such re- ‘‘(i) review the information to determine duct a search and exchange of records with requests.’’. spect to the individual as described in subpara- whether the individual has any conviction for a (c) APPLICATION TO OTHER ENTITIES PRO- graph (B). relevant crime (as defined in subsection VIDING HOME HEALTH OR LONG-TERM CARE ‘‘(B) SEARCH AND EXCHANGE OF RECORDS BY (b)(8)(F)(i)); SERVICES.— ‘‘(ii) immediately report to the skilled nursing ATTORNEY GENERAL.—Upon receipt of a submis- (1) MEDICARE.—Part D of title XVIII (42 sion pursuant to subparagraph (A), the Attor- facility in writing the results of such review; U.S.C. 1395x et seq.) is amended by adding at ney General shall direct a search of the records and the end the following: ‘‘(iii) in the case of an individual with a con- of the Federal Bureau of Investigation for any viction for a relevant crime, report the existence criminal history records corresponding to the ‘‘APPLICATION OF SKILLED NURSING FACILITY of such conviction of such individual to the fingerprints and other positive identification in- PREVENTIVE ABUSE PROVISIONS TO ANY PRO- database established under section 1128E. formation submitted. The Attorney General VIDER OF SERVICES OR OTHER ENTITY PRO- VIDING HOME HEALTH OR LONG-TERM CARE ‘‘(D) FEES FOR PERFORMANCE OF CRIMINAL shall provide any corresponding information re- SERVICES BACKGROUND CHECKS.— sulting from the search to the State. ‘‘(i) AUTHORITY TO CHARGE FEES.— ‘‘(C) STATE REPORTING OF INFORMATION TO ‘‘SEC. 1897. (a) IN GENERAL.—The require- ‘‘(I) ATTORNEY GENERAL.—The Attorney Gen- NURSING FACILITY.—Upon receipt of the infor- ments of subsections (b)(8) and (e)(6) of section eral may charge a fee to any State requesting a mation provided by the Attorney General pursu- 1819 shall apply to any provider of services or search and exchange of records pursuant to this ant to subparagraph (B), the State shall— any other entity that is eligible to be paid under paragraph and subsection (b)(8) for conducting ‘‘(i) review the information to determine this title for providing home health services, the search and providing the records. The whether the individual has any conviction for a hospice care (including routine home care and amount of such fee shall not exceed the lesser of relevant crime (as defined in subsection other services included in hospice care under the actual cost of such activities or $50. Such (b)(8)(F)(i)); this title), or long-term care services to an indi- fees shall be available to the Attorney General, ‘‘(ii) immediately report to the nursing facility vidual entitled to benefits under part A or en- or, in the Attorney General’s discretion, to the in writing the results of such review; and rolled under part B, including an individual Federal Bureau of Investigation until expended. ‘‘(iii) in the case of an individual with a con- provided with a Medicare+Choice plan offered ‘‘(II) STATE.—A State may charge a skilled viction for a relevant crime, report the existence by a Medicare+Choice organization under part nursing facility a fee for initiating the criminal of such conviction of such individual to the C (in this section referred to as a ‘medicare ben- background check under this paragraph and database established under section 1128E. eficiary’). subsection (b)(8), including fees charged by the ‘‘(D) FEES FOR PERFORMANCE OF CRIMINAL ‘‘(b) SUPERVISION OF PROVISIONAL EMPLOY- Attorney General, and for performing the review BACKGROUND CHECKS.— EES.— and report required by subparagraph (C). The ‘‘(i) AUTHORITY TO CHARGE FEES.— ‘‘(1) IN GENERAL.—With respect to an entity amount of such fee shall not exceed the actual ‘‘(I) ATTORNEY GENERAL.—The Attorney Gen- that provides home health services, such entity cost of such activities. eral may charge a fee to any State requesting a shall be considered to have satisfied the require- ‘‘(ii) PROHIBITION ON CHARGING.—An entity search and exchange of records pursuant to this ments of section 1819(b)(8)(B)(ii) or may not impose on a provisional employee or an paragraph and subsection (b)(8) for conducting 1919(b)(8)(B)(ii) if the entity meets such require- employee any charges relating to the perform- the search and providing the records. The ments for supervision of provisional employees ance of a background check under this para- amount of such fee shall not exceed the lesser of of the entity as the Secretary shall, by regula- graph. the actual cost of such activities or $50. Such tion, specify in accordance with paragraph (2). ‘‘(E) REGULATIONS.— fees shall be available to the Attorney General, ‘‘(2) REQUIREMENTS.—The regulations re- ‘‘(i) IN GENERAL.—In addition to the Sec- or, in the Attorney General’s discretion, to the quired under paragraph (1) shall provide the retary’s authority to promulgate regulations Federal Bureau of Investigation, until ex- following: under this title, the Attorney General, in con- pended. ‘‘(A) Supervision of a provisional employee sultation with the Secretary, may promulgate ‘‘(II) STATE.—A State may charge a nursing shall consist of ongoing, good faith, verifiable such regulations as are necessary to carry out facility a fee for initiating the criminal back- efforts by the supervisor of the provisional em- the Attorney General’s responsibilities under ground check under this paragraph and sub- ployee to conduct monitoring and oversight ac- this paragraph and subsection (b)(9), including section (b)(8), including fees charged by the At- tivities to ensure the safety of a medicare bene- regulations regarding the security confiden- torney General, and for performing the review ficiary.

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‘‘(B) For purposes of subparagraph (A), moni- viding services to such a resident, or by an indi- (2) COVERAGE OF LONG-TERM CARE FACILITY toring and oversight activities may include (but vidual described in subsection (e)(2)(A)(iii).’’; OR PROVIDER EMPLOYEES.—Section 1128E(g)(2) are not limited to) the following: and (42 U.S.C. 1320a–7e(g)(2)) is amended by insert- ‘‘(i) Follow-up telephone calls to the medicare (II) in the fourth sentence of subparagraph ing ‘‘, and includes any individual of a long- beneficiary. (C), by inserting ‘‘or described in subsection term care facility or provider (other than any ‘‘(ii) Unannounced visits to the medicare (e)(2)(A)(iii)’’ after ‘‘used by the facility’’; and volunteer) that has access to a patient or resi- beneficiary’s home while the provisional em- (III) in subparagraph (D)— dent of such a facility under an employment or ployee is serving the medicare beneficiary. (aa) in the subparagraph heading, by striking other contract, or both, with the facility or pro- ‘‘(iii) To the extent practicable, limiting the ‘‘NURSE AIDE’’; and vider (including individuals who are licensed or provisional employee’s duties to serving only (bb) in clause (i), in the matter preceding sub- certified by the State to provide services at the those medicare beneficiaries in a home or setting clause (I), by striking ‘‘a nurse aide’’ and in- facility or through the provider, and non- where another family member or resident of the serting ‘‘an individual’’; and licensed individuals, as defined by the Sec- home or setting of the medicare beneficiary is (cc) in clause (i)(I), by striking ‘‘nurse aide’’ retary, providing services at the facility or present. and inserting ‘‘individual’’. through the provider, including nurse assist- (B) MEDICAID.—Section 1919 (42 U.S.C. 1396r) ‘‘(C) In promulgating such regulations, the ants, nurse aides, home health aides, individ- is amended— Secretary shall take into account the staffing uals who provide home care, and personal care and geographic issues faced by small rural enti- (i) in subsection (e)(2)— (I) in the paragraph heading, by striking workers and attendants)’’ before the period. ties (as defined by the Secretary) that provide (3) REPORTING BY LONG-TERM CARE FACILITIES ‘‘NURSE AIDE REGISTRY’’ and inserting ‘‘EM- home health services, hospice care (including OR PROVIDERS.— PLOYEE REGISTRY’’; routine home care and other services included in (A) IN GENERAL.—Section 1128E(b)(1) (42 (II) in subparagraph (A)— hospice care under this title), or other long-term (aa) by striking ‘‘By not later than January 1, U.S.C. 1320a–7e(b)(1)) is amended by striking care services. Such regulations should encour- 1989, the’’ and inserting ‘‘The’’; ‘‘and health plan’’ and inserting ‘‘, health plan, age the provision of monitoring and oversight (bb) by striking ‘‘a registry of all individuals’’ and long-term care facility or provider’’. activities whenever practicable with respect to and inserting ‘‘a registry of (i) all individuals’’; (B) CORRECTION OF INFORMATION.—Section such an entity, and if such activities would not and 1128E(c)(2) (42 U.S.C. 1320a–7e(c)(2)) is amended impose an unreasonable cost or other burden on (cc) by inserting before the period the fol- by striking ‘‘and health plan’’ and inserting ‘‘, the entity.’’. lowing: ‘‘, (ii) all other nursing facility employ- health plan, and long-term care facility or pro- (2) MEDICAID.—Section 1902(a) (42 U.S.C. ees with respect to whom the State has made a vider’’. 1396a), as amended by section 104(a), is amend- finding described in subparagraph (B), and (iii) (4) ACCESS TO REPORTED INFORMATION.—Sec- ed— any employee of an entity that is eligible to be tion 1128E(d)(1) (42 U.S.C. 1320a–7e(d)(1)) is (A) in paragraph (65), by striking ‘‘and’’ at paid under the State plan for providing home amended by striking ‘‘and health plans’’ and in- the end; health services, hospice care (including routine serting ‘‘, health plans, and long-term care fa- (B) in paragraph (66), by striking the period home care and other services included in hospice cilities or providers’’. (5) MANDATORY CHECK OF DATABASE BY LONG- and inserting ‘‘; and’’; and care under title XVIII), or long-term care serv- TERM CARE FACILITIES OR PROVIDERS.—Section (C) by inserting after paragraph (66) the fol- ices and with respect to whom the entity has re- 1128E(d) (42 U.S.C. 1320a–7e(d)) is amended by lowing: ported to the State a finding of patient neglect ‘‘(67) provide that any entity that is eligible to adding at the end the following: or abuse or a misappropriation of patient prop- be paid under the State plan for providing home ‘‘(3) MANDATORY CHECK OF DATABASE BY erty’’; and LONG-TERM CARE FACILITIES OR PROVIDERS.—A health services, hospice care (including routine (III) in subparagraph (C), by striking ‘‘a long-term care facility or provider shall check home care and other services included in hospice nurse aide’’ and inserting ‘‘an individual’’; and the database maintained under this section care under title XVIII), or long-term care serv- (ii) in subsection (g)(1)— ices for which medical assistance is available (I) by striking the first sentence of subpara- prior to hiring under an employment or other under the State plan to individuals requiring graph (C) and inserting the following: ‘‘The contract, or both, (other than in a provisional long-term care complies with the requirements of State shall provide, through the agency respon- status) any individual as an employee of such a subsections (b)(8) and (e)(8) of section 1919 and sible for surveys and certification of nursing fa- facility or provider who will have access to a section 1897(b) (in the same manner as such sec- cilities under this subsection, for a process for patient or resident of the facility or provider (in- tion applies to a medicare beneficiary).’’. the receipt and timely review and investigation cluding individuals who are licensed or certified (3) EXPANSION OF STATE NURSE AIDE REG- of allegations of neglect and abuse and mis- by the State to provide services at the facility or ISTRY.— appropriation of resident property by a nurse through the provider, and nonlicensed individ- (A) MEDICARE.—Section 1819 (42 U.S.C. 1395i– aide or a nursing facility employee of a resident uals, as defined by the Secretary, that will pro- 3) is amended— in a nursing facility, by another individual used vide services at the facility or through the pro- (i) in subsection (e)(2)— by the facility in providing services to such a vider, including nurse assistants, nurse aides, (I) in the paragraph heading, by striking resident, or by an individual described in sub- home health aides, individuals who provide ‘‘NURSE AIDE REGISTRY’’ and inserting ‘‘EM- section (e)(2)(A)(iii).’’; and home care, and personal care workers and at- PLOYEE REGISTRY’’; (II) in the fourth sentence of subparagraph tendants).’’. (II) in subparagraph (A)— (C), by inserting ‘‘or described in subsection (6) DEFINITION OF LONG-TERM CARE FACILITY (aa) by striking ‘‘By not later than January 1, (e)(2)(A)(iii)’’ after ‘‘used by the facility’’; and OR PROVIDER.—Section 1128E(g) (42 U.S.C. 1989, the’’ and inserting ‘‘The’’; (III) in subparagraph (D)— 1320a–7e(g)) is amended by adding at the end (bb) by striking ‘‘a registry of all individuals’’ (aa) in the subparagraph heading, by striking the following: and inserting ‘‘a registry of (i) all individuals’’; ‘‘NURSE AIDE’’; and ‘‘(6) LONG-TERM CARE FACILITY OR PRO- and (bb) in clause (i), in the matter preceding sub- VIDER.—The term ‘long-term care facility or pro- (cc) by inserting before the period the fol- clause (I), by striking ‘‘a nurse aide’’ and in- vider’ means a skilled nursing facility (as de- lowing: ‘‘, (ii) all other skilled nursing facility serting ‘‘an individual’’; and fined in section 1819(a)), a nursing facility (as employees with respect to whom the State has (cc) in clause (i)(I), by striking ‘‘nurse aide’’ defined in section 1919(a)), a home health agen- made a finding described in subparagraph (B), and inserting ‘‘individual’’. cy, a provider of hospice care (as defined in sec- and (iii) any employee of any provider of serv- (d) REIMBURSEMENT OF COSTS FOR BACK- tion 1861(dd)(1)), a long-term care hospital (as ices or any other entity that is eligible to be paid GROUND CHECKS.—The Secretary of Health and described in section 1886(d)(1)(B)(iv)), an inter- under this title for providing home health serv- Human Services shall reimburse nursing facili- mediate care facility for the mentally retarded ices, hospice care (including routine home care ties, skilled nursing facilities, and other entities (as defined in section 1905(d)), or any other fa- and other services included in hospice care for costs incurred by the facilities and entities in cility or entity that provides, or is a provider of, under this title), or long-term care services and order to comply with the requirements imposed long-term care services, home health services, or with respect to whom the entity has reported to under sections 1819(b)(8) and 1919(b)(8) of such hospice care (including routine home care and the State a finding of patient neglect or abuse or Act (42 U.S.C. 1395i–3(b)(8), 1396r(b)(8)), as other services included in hospice care under a misappropriation of patient property’’; and added by this section. title XVIII), and receives payment for such serv- (III) in subparagraph (C), by striking ‘‘a (e) INCLUSION OF ABUSIVE ACTS WITHIN A ices under the medicare program under title nurse aide’’ and inserting ‘‘an individual’’; and LONG-TERM CARE FACILITY OR PROVIDER IN THE XVIII or the medicaid program under title (ii) in subsection (g)(1)— NATIONAL HEALTH CARE FRAUD AND ABUSE XIX.’’. (I) by striking the first sentence of subpara- DATA COLLECTION PROGRAM.— (7) AUTHORIZATION OF APPROPRIATIONS.— graph (C) and inserting the following: ‘‘The (1) IN GENERAL.—Section 1128E(g)(1)(A) (42 There is authorized to be appropriated to carry State shall provide, through the agency respon- U.S.C. 1320a–7e(g)(1)(A)) is amended— out the amendments made by this subsection, sible for surveys and certification of skilled (A) by redesignating clause (v) as clause (vi); $10,200,000 for fiscal year 2004. nursing facilities under this subsection, for a and (f) PREVENTION AND TRAINING DEMONSTRA- process for the receipt and timely review and in- (B) by inserting after clause (iv), the fol- TION PROJECT.— vestigation of allegations of neglect and abuse lowing: (1) ESTABLISHMENT.—The Secretary of Health and misappropriation of resident property by a ‘‘(v) A finding of abuse or neglect of a patient and Human Services shall establish a dem- nurse aide or a skilled nursing facility employee or a resident of a long-term care facility, or mis- onstration program to provide grants to develop of a resident in a skilled nursing facility, by an- appropriation of such a patient’s or resident’s information on best practices in patient abuse other individual used by the facility in pro- property.’’. prevention training (including behavior training

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00123 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8992 CONGRESSIONAL RECORD — SENATE July 7, 2003 and interventions) for managers and staff of paragraph (A)(vii)(IV) shall include in the ap- ‘‘(AA) the date on which the court of appeals hospital and health care facilities. plication a statement that the applicant will decides that the patent is invalid or not in- (2) ELIGIBILITY.—To be eligible to receive a give notice as required by this subparagraph. fringed (including any substantive determina- grant under paragraph (1), an entity shall be a ‘‘(ii) TIMING OF NOTICE.—An applicant that tion that there is no cause of action for patent public or private nonprofit entity and prepare makes a certification described in subparagraph infringement or invalidity); or and submit to the Secretary of Health and (A)(vii)(IV) shall give notice as required under ‘‘(BB) the date of a settlement order or con- Human Services an application at such time, in this subparagraph— sent decree signed and entered by the court of such manner, and containing such information ‘‘(I) if the certification is in the application, appeals stating that the patent that is the sub- as the Secretary may require. not later than 20 days after the date of the post- ject of the certification is invalid or not in- (3) USE OF FUNDS.—Amounts received under a mark on the notice with which the Secretary infringed; or grant under this subsection shall be used to— forms the applicant that the application has ‘‘(bb) if the judgment of the district court is (A) examine ways to improve collaboration be- been filed; or not appealed or is affirmed, the approval shall tween State health care survey and provider ‘‘(II) if the certification is in an amendment or be made effective on the date specified by the certification agencies, long-term care ombuds- supplement to the application, at the time at district court in a court order under section man programs, the long-term care industry, and which the applicant submits the amendment or 271(e)(4)(A) of title 35, United States Code;’’; local community members; supplement, regardless of whether the applicant (cc) in subclause (III), by striking ‘‘on the (B) examine patient care issues relating to has already given notice with respect to another date of such court decision.’’ and inserting ‘‘as regulatory oversight, community involvement, such certification contained in the application provided in subclause (I); or’’; and and facility staffing and management with a or in an amendment or supplement to the appli- (dd) by inserting after subclause (III) the fol- focus on staff training, staff stress management, cation. lowing: and staff supervision; ‘‘(iii) RECIPIENTS OF NOTICE.—An applicant ‘‘(IV) if before the expiration of such period (C) examine the use of patient abuse preven- required under this subparagraph to give notice the court grants a preliminary injunction pro- tion training programs by long-term care enti- shall give notice to— hibiting the applicant from engaging in the com- ties, including the training program developed ‘‘(I) each owner of the patent that is the sub- mercial manufacture or sale of the drug until by the National Association of Attorneys Gen- ject of the certification (or a representative of the court decides the issues of patent validity eral, and the extent to which such programs are the owner designated to receive such a notice); and infringement and if the court decides that used; and and such patent has been infringed, the approval (D) identify and disseminate best practices for ‘‘(II) the holder of the approved application shall be made effective as provided in subclause preventing and reducing patient abuse. under subsection (b) for the drug that is claimed (II).’’; (4) AUTHORIZATION OF APPROPRIATIONS.— by the patent or a use of which is claimed by the (B) by redesignating subparagraphs (C) and There is authorized to be appropriated such patent (or a representative of the holder des- (D) as subparagraphs (E) and (F), respectively; sums as may be necessary to carry out this sub- ignated to receive such a notice). and section. ‘‘(iv) CONTENTS OF NOTICE.—A notice required (C) by inserting after subparagraph (B) the (g) EFFECTIVE DATE.— under this subparagraph shall— following: (1) IN GENERAL.—With respect to a skilled ‘‘(I) state that an application that contains ‘‘(C) CIVIL ACTION TO OBTAIN PATENT CER- nursing facility (as defined in section 1819(a) of data from bioavailability or bioequivalence stud- TAINTY.— the Social Security Act (42 U.S.C. 1395i–3(a)) or ies has been submitted under this subsection for ‘‘(i) DECLARATORY JUDGMENT ABSENT IN- a nursing facility (as defined in section 1919(a) the drug with respect to which the certification FRINGEMENT ACTION.—If an owner of the patent of the Social Security Act (42 U.S.C. 1396r(a)), is made to obtain approval to engage in the com- or the holder of the approved application under this section and the amendments made by this mercial manufacture, use, or sale of the drug be- subsection (b) for the drug that is claimed by the section shall take effect on the date that is the fore the expiration of the patent referred to in patent or a use of which is claimed by the pat- earlier of— the certification; and ent does not bring a civil action against the ap- (A) 6 months after the effective date of final ‘‘(II) include a detailed statement of the fac- plicant for infringement of the patent on or be- regulations promulgated to carry out this sec- tual and legal basis of the opinion of the appli- fore the date that is 45 days after the date on tion and such amendments; or cant that the patent is invalid or will not be in- which the notice given under paragraph (2)(B) (B) January 1, 2006. fringed.’’; and was received, the applicant may bring a civil ac- (2) in paragraph (5)— (2) LONG-TERM CARE FACILITIES AND PRO- tion against the owner or holder (but not (A) in subparagraph (B)— VIDERS.—With respect to a long-term care facil- against any owner or holder that has brought ity or provider (as defined in section 1128E(g)(6) (i) by striking ‘‘under the following’’ and inserting ‘‘by applying the following to each cer- such a civil action against that applicant, un- of the Social Security Act (42 U.S.C. 1320a– less that civil action was dismissed without prej- 7e(g)(6)) (as added by subsection (e)), this sec- tification made under paragraph (2)(A)(vii)’’; and udice) for a declaratory judgment under section tion and the amendments made by this section 2201 of title 28, United States Code, that the pat- shall take effect on the date that is the earlier (ii) in clause (iii)— (I) in the first sentence, by striking ‘‘unless’’ ent is invalid or will not be infringed by the of— drug for which the applicant seeks approval. (A) 18 months after the effective date of final and all that follows and inserting ‘‘unless, be- ‘‘(ii) COUNTERCLAIM TO INFRINGEMENT AC- regulations promulgated to carry out this sec- fore the expiration of 45 days after the date on which the notice described in paragraph (2)(B) TION.— tion and such amendments; or ‘‘(I) IN GENERAL.—If an owner of the patent (B) January 1, 2007. is received, an action is brought for infringement of the patent that is the subject of the cer- or the holder of the approved application under SEC. 637. OFFICE OF RURAL HEALTH POLICY IM- subsection (b) for the drug that is claimed by the PROVEMENTS. tification and for which information was submitted to the Secretary under subsection (b)(1) patent or a use of which is claimed by the pat- Section 711(b) (42 U.S.C. 912(b)) is amended— ent brings a patent infringement action against (1) in paragraph (3), by striking ‘‘and’’ after or (c)(2) before the date on which the applica- the applicant, the applicant may assert a coun- the comma at the end; tion (excluding an amendment or supplement to terclaim seeking an order requiring the holder to (2) in paragraph (4), by inserting ‘‘and’’ after the application), which the Secretary later de- correct or delete the patent information sub- the comma at the end; and termines to be substantially complete, was sub- (3) by inserting after paragraph (4) the fol- mitted.’’; and mitted by the holder under subsection (b) or (c) lowing new paragraph: (II) in the second sentence— on the ground that the patent does not claim ei- ‘‘(5) administer grants, cooperative agree- (aa) by striking subclause (I) and inserting ther— ments, and contracts to provide technical assist- the following: ‘‘(aa) the drug for which the application was ance and other activities as necessary to support ‘‘(I) if before the expiration of such period the approved; or activities related to improving health care in district court decides that the patent is invalid ‘‘(bb) an approved method of using the drug. ‘‘(II) NO INDEPENDENT CAUSE OF ACTION.— rural areas.’’. or not infringed (including any substantive determination that there is no cause of action for Subclause (I) does not authorize the assertion of TITLE VII—ACCESS TO AFFORDABLE patent infringement or invalidity), the approval a claim described in subclause (I) in any civil PHARMACEUTICALS shall be made effective on— action or proceeding other than a counterclaim SEC. 701. SHORT TITLE. ‘‘(aa) the date on which the court enters judg- described in subclause (I). This title may be cited as the ‘‘Greater Access ment reflecting the decision; or ‘‘(iii) NO DAMAGES.—An applicant shall not be to Affordable Pharmaceuticals Act’’. ‘‘(bb) the date of a settlement order or consent entitled to damages in a civil action under sub- SEC. 702. 30-MONTH STAY-OF-EFFECTIVENESS PE- decree signed and entered by the court stating paragraph (i) or a counterclaim under subpara- RIOD. that the patent that is the subject of the certifi- graph (ii).’’. (a) ABBREVIATED NEW DRUG APPLICATIONS.— cation is invalid or not infringed;’’; (b) APPLICATIONS GENERALLY.—Section 505 of Section 505(j) of the Federal Food, Drug, and (bb) by striking subclause (II) and inserting the Federal Food, Drug, and Cosmetic Act (21 Cosmetic Act (21 U.S.C. 355(j)) is amended— the following: U.S.C. 355) is amended— (1) in paragraph (2), by striking subparagraph ‘‘(II) if before the expiration of such period (1) in subsection (b), by striking paragraph (3) (B) and inserting the following: the district court decides that the patent has and inserting the following: ‘‘(B) NOTICE OF OPINION THAT PATENT IS IN- been infringed— ‘‘(3) NOTICE OF OPINION THAT PATENT IS IN- VALID OR WILL NOT BE INFRINGED.— ‘‘(aa) if the judgment of the district court is VALID OR WILL NOT BE INFRINGED.— ‘‘(i) AGREEMENT TO GIVE NOTICE.—An appli- appealed, the approval shall be made effective ‘‘(A) AGREEMENT TO GIVE NOTICE.—An applicant that makes a certification described in sub- on— cant that makes a certification described in

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00124 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8993 paragraph (2)(A)(iv) shall include in the appli- ‘‘(aa) the date on which the court of appeals that is the subject of the certification before the cation a statement that the applicant will give decides that the patent is invalid or not in- expiration of 45 days after the date on which notice as required by this paragraph. fringed (including any substantive determina- the notice given under subsection (b)(3) or ‘‘(B) TIMING OF NOTICE.—An applicant that tion that there is no cause of action for patent (j)(2)(B) of that section is received, shall estab- makes a certification described in paragraph infringement or invalidity); or lish an actual controversy between the appli- (2)(A)(iv) shall give notice as required under ‘‘(bb) the date of a settlement order or consent cant and the patent owner sufficient to confer this paragraph— decree signed and entered by the court of ap- subject matter jurisdiction in the courts of the ‘‘(i) if the certification is in the application, peals stating that the patent that is the subject United States in any action brought by the ap- not later than 20 days after the date of the post- of the certification is invalid or not infringed; or plicant under section 2201 of title 28 for a de- mark on the notice with which the Secretary in- ‘‘(II) if the judgment of the district court is claratory judgment that any patent that is the forms the applicant that the application has not appealed or is affirmed, the approval shall subject of the certification is invalid or not in- been filed; or be made effective on the date specified by the fringed.’’. ‘‘(ii) if the certification is in an amendment or district court in a court order under section (d) APPLICABILITY.— supplement to the application, at the time at 271(e)(4)(A) of title 35, United States Code;’’; (1) IN GENERAL.—Except as provided in para- which the applicant submits the amendment or (IV) in clause (iii), by striking ‘‘on the date of graphs (2) and (3), the amendments made by supplement, regardless of whether the applicant such court decision.’’ and inserting ‘‘as pro- subsections (a), (b), and (c) apply to any pro- has already given notice with respect to another vided in clause (i); or’’; and ceeding under section 505 of the Federal Food, such certification contained in the application (V) by inserting after clause (iii), the fol- Drug, and Cosmetic Act (21 U.S.C. 355) that is or in an amendment or supplement to the appli- lowing: pending on or after the date of enactment of cation. ‘‘(iv) if before the expiration of such period this Act regardless of the date on which the pro- ‘‘(C) RECIPIENTS OF NOTICE.—An applicant re- the court grants a preliminary injunction proceeding was commenced or is commenced. quired under this paragraph to give notice shall hibiting the applicant from engaging in the com- (2) NOTICE OF OPINION THAT PATENT IS INVALID give notice to— mercial manufacture or sale of the drug until OR WILL NOT BE INFRINGED.—The amendments ‘‘(i) each owner of the patent that is the sub- the court decides the issues of patent validity made by subsections (a)(1) and (b)(1) apply with ject of the certification (or a representative of and infringement and if the court decides that respect to any certification under subsection the owner designated to receive such a notice); such patent has been infringed, the approval (b)(2)(A)(iv) or (j)(2)(A)(vii)(IV) of section 505 of and shall be made effective as provided in clause the Federal Food, Drug, and Cosmetic Act (21 ‘‘(ii) the holder of the approved application (ii).’’; and U.S.C. 355) after the date of enactment of this under this subsection for the drug that is (iii) in the third sentence, by striking ‘‘para- Act in an application filed under subsection claimed by the patent or a use of which is graph (3)(B)’’ and inserting ‘‘subsection (b)(3)’’; (b)(2) or (j) of that section or in an amendment claimed by the patent (or a representative of the (C) by redesignating subparagraph (D) as sub- or supplement to an application filed under sub- holder designated to receive such a notice). paragraph (E); and section (b)(2) or (j) of that section. ‘‘(D) CONTENTS OF NOTICE.—A notice required (D) by inserting after subparagraph (C) the (3) EFFECTIVE DATE OF APPROVAL.—The under this paragraph shall— following: amendments made by subsections (a)(2)(A)(ii)(I) ‘‘(i) state that an application that contains ‘‘(D) CIVIL ACTION TO OBTAIN PATENT CER- and (b)(2)(B)(i) apply with respect to any pat- data from bioavailability or bioequivalence stud- TAINTY.— ent information submitted under subsection ies has been submitted under this subsection for ‘‘(i) DECLARATORY JUDGMENT ABSENT IN- (b)(1) or (c)(2) of section 505 of the Federal the drug with respect to which the certification FRINGEMENT ACTION.—If an owner of the patent Food, Drug, and Cosmetic Act (21 U.S.C. 355) is made to obtain approval to engage in the com- or the holder of the approved application under made after the date of enactment of this Act. mercial manufacture, use, or sale of the drug be- subsection (b) for the drug that is claimed by the SEC. 703. FORFEITURE OF 180-DAY EXCLUSIVITY fore the expiration of the patent referred to in patent or a use of which is claimed by the pat- PERIOD. the certification; and ent does not bring a civil action against the ap- (a) IN GENERAL.—Section 505(j)(5) of the Fed- ‘‘(ii) include a detailed statement of the fac- plicant for infringement of the patent on or be- eral Food, Drug, and Cosmetic Act (21 U.S.C. tual and legal basis of the opinion of the appli- fore the date that is 45 days after the date on 355(j)(5)) (as amended by section 702) is amend- cant that the patent is invalid or will not be in- which the notice given under subsection (b)(3) ed— fringed.’’; and was received, the applicant may bring a civil ac- (1) in subparagraph (B), by striking clause (2) in subsection (c)(3)— tion against the owner or holder (but not (iv) and inserting the following: (A) in the first sentence, by striking ‘‘under against any owner or holder that has brought ‘‘(iv) 180-DAY EXCLUSIVITY PERIOD.— the following’’ and inserting ‘‘by applying the such a civil action against that applicant, un- ‘‘(I) DEFINITIONS.—In this paragraph: following to each certification made under sub- less that civil action was dismissed without prej- ‘‘(aa) 180-DAY EXCLUSIVITY PERIOD.—The term section (b)(2)(A)(iv)’’; udice) for a declaratory judgment under section ‘180-day exclusivity period’ means the 180-day (B) in subparagraph (C)— 2201 of title 28, United States Code, that the pat- period ending on the day before the date on (i) in the first sentence, by striking ‘‘unless’’ ent is invalid or will not be infringed by the which an application submitted by an applicant and all that follows and inserting ‘‘unless, be- drug for which the applicant seeks approval. other than a first applicant could become effec- fore the expiration of 45 days after the date on ‘‘(ii) COUNTERCLAIM TO INFRINGEMENT AC- tive under this clause. which the notice described in subsection (b)(3) is TION.— ‘‘(bb) FIRST APPLICANT.—The term ‘first appli- received, an action is brought for infringement ‘‘(I) IN GENERAL.—If an owner of the patent cant’ means an applicant that, on the first day of the patent that is the subject of the certifi- or the holder of the approved application under on which a substantially complete application cation and for which information was submitted subsection (b) for the drug that is claimed by the containing a certification described in para- to the Secretary under paragraph (2) or sub- patent or a use of which is claimed by the pat- graph (2)(A)(vii)(IV) is submitted for approval section (b)(1) before the date on which the ap- ent brings a patent infringement action against of a drug, submits a substantially complete application (excluding an amendment or supple- the applicant, the applicant may assert a coun- plication containing a certification described in ment to the application) was submitted.’’; terclaim seeking an order requiring the holder to paragraph (2)(A)(vii)(IV) for the drug. (ii) in the second sentence— correct or delete the patent information sub- ‘‘(cc) SUBSTANTIALLY COMPLETE APPLICA- (I) by striking ‘‘paragraph (3)(B)’’ and insert- mitted by the holder under subsection (b) or this TION.—As used in this subsection, the term ‘sub- ing ‘‘subsection (b)(3)’’; subsection on the ground that the patent does stantially complete application’ means an appli- (II) by striking clause (i) and inserting the fol- not claim either— cation under this subsection that on its face is lowing: ‘‘(aa) the drug for which the application was sufficiently complete to permit a substantive re- ‘‘(i) if before the expiration of such period the approved; or view and contains all the information required district court decides that the patent is invalid ‘‘(bb) an approved method of using the drug. by paragraph (2)(A). or not infringed (including any substantive de- ‘‘(II) NO INDEPENDENT CAUSE OF ACTION.— ‘‘(dd) TENTATIVE APPROVAL.— termination that there is no cause of action for Subclause (I) does not authorize the assertion of ‘‘(AA) IN GENERAL.—The term ‘tentative ap- patent infringement or invalidity), the approval a claim described in subclause (I) in any civil proval’ means notification to an applicant by shall be made effective on— action or proceeding other than a counterclaim the Secretary that an application under this ‘‘(I) the date on which the court enters judg- described in subclause (I). subsection meets the requirements of paragraph ment reflecting the decision; or ‘‘(iii) NO DAMAGES.—An applicant shall not be (2)(A), but cannot receive effective approval be- ‘‘(II) the date of a settlement order or consent entitled to damages in a civil action under cause the application does not meet the require- decree signed and entered by the court stating clause (i) or a counterclaim under clause (ii).’’. ments of this subparagraph, there is a period of that the patent that is the subject of the certifi- (c) INFRINGEMENT ACTIONS.—Section 271(e) of exclusivity for the listed drug under subpara- cation is invalid or not infringed;’’; title 35, United States Code, is amended by add- graph (E) or section 505A, or there is a 7-year (III) by striking clause (ii) and inserting the ing at the end the following: period of exclusivity for the listed drug under following: ‘‘(5) The filing of an application described in section 527. ‘‘(ii) if before the expiration of such period the paragraph (2) that includes a certification ‘‘(BB) LIMITATION.—A drug that is granted district court decides that the patent has been under subsection (b)(2)(A)(iv) or tentative approval by the Secretary is not an infringed— (j)(2)(A)(vii)(IV) of section 505 of the Federal approved drug and shall not have an effective ‘‘(I) if the judgment of the district court is ap- Food, Drug, and Cosmetic Act (21 U.S.C. 355), approval until the Secretary issues an approval pealed, the approval shall be made effective and the failure of the owner of the patent to after any necessary additional review of the ap- on— bring an action for infringement of a patent plication.

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‘‘(II) EFFECTIVENESS OF APPLICATION.—Sub- a writ of certiorari) has been or can be taken of the Federal Food, Drug, and Cosmetic Act (21 ject to subparagraph (D), if the application con- that the agreement has violated the antitrust U.S.C. 355(j)). tains a certification described in paragraph laws (as defined in section 1 of the Clayton Act SEC. 705. REMEDIES FOR INFRINGEMENT. (2)(A)(vii)(IV) and is for a drug for which a first (15 U.S.C. 12), except that the term includes sec- Section 287 of title 35, United States Code, is applicant has submitted an application con- tion 5 of the Federal Trade Commission Act (15 amended by adding at the end the following: taining such a certification, the application U.S.C. 45) to the extent that that section applies ‘‘(d) CONSIDERATION.—In making a determina- shall be made effective on the date that is 180 to unfair methods of competition). tion with respect to remedy brought for infringe- days after the date of the first commercial mar- ‘‘(VI) EXPIRATION OF ALL PATENTS.—All of the ment of a patent that claims a drug or a method keting of the drug (including the commercial patents as to which the applicant submitted a or using a drug, the court shall consider wheth- marketing of the listed drug) by any first appli- certification qualifying it for the 180-day exclu- er information on the patent was filed as re- cant.’’; and sivity period have expired. quired under 21 U.S.C. 355 (b) or (c), and, if (2) by inserting after subparagraph (C) the ‘‘(ii) FORFEITURE.—The 180-day exclusivity such information was required to be filed but following: period described in subparagraph (B)(iv) shall was not, the court may refuse to award treble ‘‘(D) FORFEITURE OF 180-DAY EXCLUSIVITY PE- be forfeited by a first applicant if a forfeiture damages under section 284.’’. RIOD.— event occurs with respect to that first applicant. SEC. 706. CONFORMING AMENDMENTS. ‘‘(i) DEFINITION OF FORFEITURE EVENT.—In ‘‘(iii) SUBSEQUENT APPLICANT.—If all first ap- Section 505A of the Federal Food, Drug, and this subparagraph, the term ‘forfeiture event’, plicants forfeit the 180-day exclusivity period Cosmetic Act (21 U.S.C. 355a) is amended— with respect to an application under this sub- under clause (ii)— (1) in subsections (b)(1)(A)(i) and (c)(1)(A)(i), section, means the occurrence of any of the fol- ‘‘(I) approval of any application containing a by striking ‘‘(j)(5)(D)(ii)’’ each place it appears lowing: certification described in paragraph and inserting ‘‘(j)(5)(F)(ii)’’; ‘‘(I) FAILURE TO MARKET.—The first applicant (2)(A)(vii)(IV) shall be made effective in accord- (2) in subsections (b)(1)(A)(ii) and (c)(1)(A)(ii), fails to market the drug by the later of— ance with subparagraph (B)(iii); and by striking ‘‘(j)(5)(D)’’ each place it appears and ‘‘(aa) the earlier of the date that is— ‘‘(II) no applicant shall be eligible for a 180- inserting ‘‘(j)(5)(F)’’; and ‘‘(AA) 75 days after the date on which the ap- day exclusivity period.’’. (3) in subsections (e) and (l), by striking proval of the application of the first applicant is (b) EFFECTIVE DATE.— ‘‘505(j)(5)(D)’’ each place it appears and insert- made effective under subparagraph (B)(iii); or (1) IN GENERAL.—Except as provided in para- ing ‘‘505(j)(5)(F)’’. ‘‘(BB) 30 months after the date of submission graph (2), the amendment made by subsection of the application of the first applicant; or (a) shall be effective only with respect to an ap- TITLE VIII—IMPORTATION OF ‘‘(bb) with respect to the first applicant or any plication filed under section 505(j) of the Fed- PRESCRIPTION DRUGS other applicant (which other applicant has re- eral Food, Drug, and Cosmetic Act (21 U.S.C. SEC. 801. IMPORTATION OF PRESCRIPTION ceived tentative approval), the date that is 75 355(j)) after the date of enactment of this Act for DRUGS. days after the date as of which, as to each of a listed drug for which no certification under (a) IN GENERAL.—Chapter VIII of the Federal the patents with respect to which the first appli- section 505(j)(2)(A)(vii)(IV) of that Act was Food, Drug, and Cosmetic Act (21 U.S.C. 381 et cant submitted a certification qualifying the made before the date of enactment of this Act. seq.) is amended by striking section 804 and in- first applicant for the 180-day exclusivity period (2) COLLUSIVE AGREEMENTS.—If a forfeiture serting the following: under subparagraph (B)(iv), at least 1 of the fol- event described in section 505(j)(5)(D)(i)(V) of ‘‘SEC. 804. IMPORTATION OF PRESCRIPTION lowing has occurred: that Act occurs in the case of an applicant, the DRUGS. ‘‘(AA) In an infringement action brought applicant shall forfeit the 180-day period under ‘‘(a) DEFINITIONS.—In this section: against that applicant with respect to the pat- section 505(j)(5)(B)(iv) of that Act without re- ‘‘(1) IMPORTER.—The term ‘importer’ means a ent or in a declaratory judgment action brought gard to when the first certification under sec- pharmacist or wholesaler. by that applicant with respect to the patent, a tion 505(j)(2)(A)(vii)(IV) of that Act for the list- ‘‘(2) PHARMACIST.—The term ‘pharmacist’ court enters a final decision from which no ap- ed drug was made. means a person licensed by a State to practice peal (other than a petition to the Supreme Court (3) DECISION OF A COURT WHEN THE 180-DAY pharmacy, including the dispensing and selling for a writ of certiorari) has been or can be taken EXCLUSIVITY PERIOD HAS NOT BEEN TRIGGERED.— of prescription drugs. that the patent is invalid or not infringed. With respect to an application filed before, on, ‘‘(3) PRESCRIPTION DRUG.—The term ‘prescrip- ‘‘(BB) In an infringement action or a declara- or after the date of enactment of this Act for a tion drug’ means a drug subject to section tory judgment action described in subitem (AA), listed drug for which a certification under sec- 503(b), other than— ‘‘(A) a controlled substance (as defined in sec- a court signs a settlement order or consent de- tion 505(j)(2)(A)(vii)(IV) of that Act was made tion 102 of the Controlled Substances Act (21 cree that enters a final judgment that includes before the date of enactment of this Act and for U.S.C. 802)); a finding that the patent is invalid or not in- which neither of the events described in sub- ‘‘(B) a biological product (as defined in sec- fringed. clause (I) or (II) of section 505(j)(5)(B)(iv) of tion 351 of the Public Health Service Act (42 ‘‘(CC) The patent expires. that Act (as in effect on the day before the date ‘‘(DD) The patent is withdrawn by the holder U.S.C. 262)); of enactment of this Act) has occurred on or be- ‘‘(C) an infused drug (including a peritoneal of the application approved under subsection fore the date of enactment of this Act, the term dialysis solution); (b). ‘‘decision of a court’’ as used in clause (iv) of ‘‘(D) an intravenously injected drug; or ‘‘(II) WITHDRAWAL OF APPLICATION.—The first section 505(j)(5)(B) of that Act means a final de- ‘‘(E) a drug that is inhaled during surgery. applicant withdraws the application or the Sec- cision of a court from which no appeal (other ‘‘(4) QUALIFYING LABORATORY.—The term retary considers the application to have been than a petition to the Supreme Court for a writ ‘qualifying laboratory’ means a laboratory in withdrawn as a result of a determination by the of certiorari) has been or can be taken. the United States that has been approved by the Secretary that the application does not meet the SEC. 704. BIOAVAILABILITY AND BIOEQUIVA- Secretary for the purposes of this section. requirements for approval under paragraph (4). LENCE. ‘‘(5) WHOLESALER.— ‘‘(III) AMENDMENT OF CERTIFICATION.—The (a) IN GENERAL.—Section 505(j)(8) of the Fed- ‘‘(A) IN GENERAL.—The term ‘wholesaler’ first applicant amends or withdraws the certifi- eral Food, Drug, and Cosmetic Act (21 U.S.C. means a person licensed as a wholesaler or dis- cation for all of the patents with respect to 355(j)(8)) is amended— tributor of prescription drugs in the United which that applicant submitted a certification (1) by striking subparagraph (A) and inserting States under section 503(e)(2)(A). qualifying the applicant for the 180-day exclu- the following: ‘‘(B) EXCLUSION.—The term ‘wholesaler’ does sivity period. ‘‘(A)(i) The term ‘bioavailability’ means the not include a person authorized to import drugs ‘‘(IV) FAILURE TO OBTAIN TENTATIVE AP- rate and extent to which the active ingredient or under section 801(d)(1). PROVAL.—The first applicant fails to obtain ten- therapeutic ingredient is absorbed from a drug ‘‘(b) REGULATIONS.—The Secretary, after con- tative approval of the application within 30 and becomes available at the site of drug action. sultation with the United States Trade Rep- months after the date on which the application ‘‘(ii) For a drug that is not intended to be ab- resentative and the Commissioner of Customs, is filed, unless the failure is caused by a change sorbed into the bloodstream, the Secretary may shall promulgate regulations permitting phar- in or a review of the requirements for approval assess bioavailability by scientifically valid macists and wholesalers to import prescription of the application imposed after the date on measurements intended to reflect the rate and drugs from Canada into the United States. which the application is filed. extent to which the active ingredient or thera- ‘‘(c) LIMITATION.—The regulations under sub- ‘‘(V) AGREEMENT WITH ANOTHER APPLICANT, peutic ingredient becomes available at the site of section (b) shall— THE LISTED DRUG APPLICATION HOLDER, OR A drug action.’’; and ‘‘(1) require that safeguards be in place to en- PATENT OWNER.—The first applicant enters into (2) by adding at the end the following: sure that each prescription drug imported under an agreement with another applicant under this ‘‘(C) For a drug that is not intended to be ab- the regulations complies with section 505 (in- subsection for the drug, the holder of the appli- sorbed into the bloodstream, the Secretary may cluding with respect to being safe and effective cation for the listed drug, or an owner of the establish alternative, scientifically valid meth- for the intended use of the prescription drug), patent that is the subject of the certification ods to show bioequivalence if the alternative with sections 501 and 502, and with other appli- under paragraph (2)(A)(vii)(IV), the Federal methods are expected to detect a significant dif- cable requirements of this Act; Trade Commission or the Attorney General files ference between the drug and the listed drug in ‘‘(2) require that an importer of a prescription a complaint, and there is a final decision of the safety and therapeutic effect.’’. drug under the regulations comply with sub- Federal Trade Commission or the court with re- (b) EFFECT OF AMENDMENT.—The amendment sections (d)(1) and (e); and gard to the complaint from which no appeal made by subsection (a) does not alter the stand- ‘‘(3) contain any additional provisions deter- (other than a petition to the Supreme Court for ards for approval of drugs under section 505(j) mined by the Secretary to be appropriate as a

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00126 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8995 safeguard to protect the public health or as a ‘‘(1) that testing described in subparagraphs ‘‘(B) exercise discretion to permit individuals means to facilitate the importation of prescrip- (J) and (L) of subsection (d)(1) be conducted by to make such importations in circumstances in tion drugs. the importer or by the manufacturer of the pre- which— ‘‘(d) INFORMATION AND RECORDS.— scription drug at a qualified laboratory; ‘‘(i) the importation is clearly for personal ‘‘(1) IN GENERAL.—The regulations under sub- ‘‘(2) if the tests are conducted by the im- use; and section (b) shall require an importer of a pre- porter— ‘‘(ii) the prescription drug or device imported scription drug under subsection (b) to submit to ‘‘(A) that information needed to— does not appear to present an unreasonable risk the Secretary the following information and ‘‘(i) authenticate the prescription drug being to the individual. documentation: tested; and ‘‘(2) WAIVER AUTHORITY.— ‘‘(A) The name and quantity of the active in- ‘‘(ii) confirm that the labeling of the prescrip- ‘‘(A) IN GENERAL.—The Secretary may grant gredient of the prescription drug. tion drug complies with labeling requirements to individuals, by regulation or on a case-by- ‘‘(B) A description of the dosage form of the under this Act; case basis, a waiver of the prohibition of impor- prescription drug. be supplied by the manufacturer of the prescrip- tation of a prescription drug or device or class tion drug to the pharmacist or wholesaler; and ‘‘(C) The date on which the prescription drug of prescription drugs or devices, under such con- ‘‘(B) that the information supplied under sub- is shipped. ditions as the Secretary determines to be appro- ‘‘(D) The quantity of the prescription drug paragraph (A) be kept in strict confidence and used only for purposes of testing or otherwise priate. that is shipped. ‘‘(B) GUIDANCE ON CASE-BY-CASE WAIVERS.— ‘‘(E) The point of origin and destination of complying with this Act; and ‘‘(3) may include such additional provisions The Secretary shall publish, and update as nec- the prescription drug. essary, guidance that accurately describes cir- ‘‘(F) The price paid by the importer for the as the Secretary determines to be appropriate to provide for the protection of trade secrets and cumstances in which the Secretary will consist- prescription drug. ently grant waivers on a case-by-case basis ‘‘(G) Documentation from the foreign seller commercial or financial information that is privileged or confidential. under subparagraph (A), so that individuals specifying— may know with the greatest practicable degree ‘‘(i) the original source of the prescription ‘‘(f) REGISTRATION OF FOREIGN SELLERS.—Any of certainty whether a particular importation drug; and establishment within Canada engaged in the for personal use will be permitted. ‘‘(ii) the quantity of each lot of the prescrip- distribution of a prescription drug that is im- ‘‘(3) DRUGS IMPORTED FROM CANADA.—In par- tion drug originally received by the seller from ported or offered for importation into the United ticular, the Secretary shall by regulation grant that source. States shall register with the Secretary the name ‘‘(H) The lot or control number assigned to the and place of business of the establishment. individuals a waiver to permit individuals to im- prescription drug by the manufacturer of the ‘‘(g) SUSPENSION OF IMPORTATION.—The Sec- port into the United States a prescription drug prescription drug. retary shall require that importations of a spe- that— ‘‘(I) The name, address, telephone number, cific prescription drug or importations by a spe- ‘‘(A) is imported from a licensed pharmacy for and professional license number (if any) of the cific importer under subsection (b) be imme- personal use by an individual, not for resale, in importer. diately suspended on discovery of a pattern of quantities that do not exceed a 90-day supply; ‘‘(J)(i) In the case of a prescription drug that importation of that specific prescription drug or ‘‘(B) is accompanied by a copy of a valid pre- is shipped directly from the first foreign recipi- by that specific importer of drugs that are coun- scription; ent of the prescription drug from the manufac- terfeit or in violation of any requirement under ‘‘(C) is imported from Canada, from a seller turer: this section, until an investigation is completed registered with the Secretary; ‘‘(I) Documentation demonstrating that the and the Secretary determines that the public is ‘‘(D) is a prescription drug approved by the prescription drug was received by the recipient adequately protected from counterfeit and viola- Secretary under chapter V; from the manufacturer and subsequently tive prescription drugs being imported under ‘‘(E) is in the form of a final finished dosage shipped by the first foreign recipient to the im- subsection (b). that was manufactured in an establishment reg- porter. ‘‘(h) APPROVED LABELING.—The manufacturer istered under section 510; and ‘‘(II) Documentation of the quantity of each of a prescription drug shall provide an importer ‘‘(F) is imported under such other conditions lot of the prescription drug received by the first written authorization for the importer to use, at as the Secretary determines to be necessary to foreign recipient demonstrating that the quan- no cost, the approved labeling for the prescrip- ensure public safety. tity being imported into the United States is not tion drug. ‘‘(l) STUDIES; REPORTS.— ‘‘(i) PROHIBITION OF DISCRIMINATION.— more than the quantity that was received by the ‘‘(1) BY THE INSTITUTE OF MEDICINE OF THE ‘‘(1) IN GENERAL.—It shall be unlawful for a NATIONAL ACADEMY OF SCIENCES.— first foreign recipient. manufacturer of a prescription drug to discrimi- ‘‘(III)(aa) In the case of an initial imported ‘‘(A) STUDY.— nate against, or cause any other person to dis- shipment, documentation demonstrating that ‘‘(i) IN GENERAL.—The Secretary shall request criminate against, a pharmacist or wholesaler that the Institute of Medicine of the National each batch of the prescription drug in the ship- that purchases or offers to purchase a prescrip- ment was statistically sampled and tested for Academy of Sciences conduct a study of— tion drug from the manufacturer or from any ‘‘(I) importations of prescription drugs made authenticity and degradation. person that distributes a prescription drug man- ‘‘(bb) In the case of any subsequent shipment, under the regulations under subsection (b); and ufactured by the drug manufacturer. documentation demonstrating that a statis- ‘‘(II) information and documentation sub- ‘‘(2) DISCRIMINATION.—For the purposes of mitted under subsection (d). tically valid sample of the shipment was tested paragraph (1), a manufacturer of a prescription for authenticity and degradation. ‘‘(ii) REQUIREMENTS.—In conducting the drug shall be considered to discriminate against study, the Institute of Medicine shall— ‘‘(ii) In the case of a prescription drug that is a pharmacist or wholesaler if the manufacturer not shipped directly from the first foreign recipi- ‘‘(I) evaluate the compliance of importers with enters into a contract for sale of a prescription the regulations under subsection (b); ent of the prescription drug from the manufac- drug, places a limit on supply, or employs any turer, documentation demonstrating that each ‘‘(II) compare the number of shipments under other measure, that has the effect of— the regulations under subsection (b) during the batch in each shipment offered for importation ‘‘(A) providing pharmacists or wholesalers ac- into the United States was statistically sampled study period that are determined to be counter- cess to prescription drugs on terms or conditions feit, misbranded, or adulterated, and compare and tested for authenticity and degradation. that are less favorable than the terms or condi- ‘‘(K) Certification from the importer or manu- that number with the number of shipments made tions provided to a foreign purchaser (other during the study period within the United facturer of the prescription drug that the pre- than a charitable or humanitarian organiza- States that are determined to be counterfeit, scription drug— tion) of the prescription drug; or misbranded, or adulterated; and ‘‘(i) is approved for marketing in the United ‘‘(B) restricting the access of pharmacists or ‘‘(III) consult with the Secretary, the United States; and wholesalers to a prescription drug that is per- States Trade Representative, and the Commis- ‘‘(ii) meets all labeling requirements under this mitted to be imported into the United States Act. under this section. sioner of Patents and Trademarks to evaluate ‘‘(L) Laboratory records, including complete ‘‘(j) CHARITABLE CONTRIBUTIONS.—Notwith- the effect of importations under the regulations data derived from all tests necessary to ensure standing any other provision of this section, sec- under subsection (b) on trade and patent rights that the prescription drug is in compliance with tion 801(d)(1) continues to apply to a prescrip- under Federal law. established specifications and standards. tion drug that is donated or otherwise supplied ‘‘(B) REPORT.—Not later than 2 years after ‘‘(M) Documentation demonstrating that the at no charge by the manufacturer of the drug to the effective date of the regulations under sub- testing required by subparagraphs (J) and (L) a charitable or humanitarian organization (in- section (b), the Institute of Medicine shall sub- was conducted at a qualifying laboratory. cluding the United Nations and affiliates) or to mit to Congress a report describing the findings ‘‘(N) Any other information that the Secretary a government of a foreign country. of the study under subparagraph (A). determines is necessary to ensure the protection ‘‘(k) WAIVER AUTHORITY FOR IMPORTATION BY ‘‘(2) BY THE COMPTROLLER GENERAL.— of the public health. INDIVIDUALS.— ‘‘(A) STUDY.—The Comptroller General of the ‘‘(2) MAINTENANCE BY THE SECRETARY.—The ‘‘(1) DECLARATIONS.—Congress declares that United States shall conduct a study to deter- Secretary shall maintain information and docu- in the enforcement against individuals of the mine the effect of this section on the price of mentation submitted under paragraph (1) for prohibition of importation of prescription drugs prescription drugs sold to consumers at retail. such period of time as the Secretary determines and devices, the Secretary should— ‘‘(B) REPORT.—Not later than 18 months after to be necessary. ‘‘(A) focus enforcement on cases in which the the effective date of the regulations under sub- ‘‘(e) TESTING.—The regulations under sub- importation by an individual poses a significant section (b), the Comptroller General of the section (b) shall require— threat to public health; and United States shall submit to Congress a report

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00127 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY S8996 CONGRESSIONAL RECORD — SENATE July 7, 2003 describing the findings of the study under sub- (2) there is a potential for companies with pat- Cosmetic Act (21 U.S.C. 355(j)(5)(B)(iv)) as it ap- paragraph (A). ent rights regarding brand name drugs and complies to such ANDA or to any other ANDA based ‘‘(m) CONSTRUCTION.—Nothing in this section panies which could manufacture generic on the same brand name drug. limits the authority of the Secretary relating to versions of such drugs to enter into financial (b) FILING.— the importation of prescription drugs, other deals that could tend to restrain trade and (1) AGREEMENT.—The generic drug applicant than with respect to section 801(d)(1) as pro- greatly reduce competition and increase pre- and the brand name drug company entering vided in this section. scription drug expenditures for American citi- into an agreement described in subsection (a)(2) ‘‘(n) EFFECTIVENESS OF SECTION.— zens; and shall file with the Assistant Attorney General ‘‘(1) IN GENERAL.—If, after the date that is 1 (3) enhancing competition among these com- and the Commission the text of any such agree- year after the effective date of the regulations panies can significantly reduce prescription ment, except that the generic drug applicant under subsection (b) and before the date that is drug expenditures for Americans. and the brand-name drug company shall not be 18 months after the effective date, the Secretary required to file an agreement that solely con- submits to Congress a certification that, in the SEC. 903. PURPOSES. The purposes of this title are— cerns— opinion of the Secretary, based on substantial (A) purchase orders for raw material supplies; (1) to provide timely notice to the Department evidence obtained after the effective date, the (B) equipment and facility contracts; benefits of implementation of this section do not of Justice and the Federal Trade Commission re- (C) employment or consulting contracts; or outweigh any detriment of implementation of garding agreements between companies with (D) packaging and labeling contracts. this section, this section shall cease to be effec- patent rights regarding brand name drugs and (2) OTHER AGREEMENTS.—The generic drug tive as of the date that is 30 days after the date companies which could manufacture generic applicant and the brand name drug company on which the Secretary submits the certification. versions of such drugs; and entering into an agreement described in sub- ‘‘(2) PROCEDURE.—The Secretary shall not (2) by providing timely notice, to enhance the section (a)(2) shall file with the Assistant Attor- submit a certification under paragraph (1) un- effectiveness and efficiency of the enforcement ney General and the Commission the text of any less, after a hearing on the record under sec- of the antitrust and competition laws of the other agreements not described in subsection tions 556 and 557 of title 5, United States Code, United States. (a)(2) between the generic drug applicant and the Secretary— SEC. 904. DEFINITIONS. the brand name drug company which are con- ‘‘(A)(i) determines that it is more likely than In this title: tingent upon, provide a contingent condition not that implementation of this section would (1) ANDA.—The term ‘‘ANDA’’ means an Ab- for, or are otherwise related to an agreement result in an increase in the risk to the public breviated New Drug Application, as defined which must be filed under this title. health and safety; under section 201(aa) of the Federal Food, (3) DESCRIPTION.—In the event that any ‘‘(ii) identifies specifically, in qualitative and Drug, and Cosmetic Act (21 U.S.C. 321(aa)). agreement required to be filed by paragraph (1) quantitative terms, the nature of the increased (2) ASSISTANT ATTORNEY GENERAL.—The term or (2) has not been reduced to text, both the ge- risk; ‘‘Assistant Attorney General’’ means the Assist- neric drug applicant and the brand name drug ‘‘(iii) identifies specifically the causes of the ant Attorney General in charge of the Antitrust company shall file written descriptions of the increased risk; and Division of the Department of Justice. non-textual agreement or agreements that must ‘‘(iv)(I) considers whether any measures can (3) BRAND NAME DRUG.—The term ‘‘brand be filed sufficient to reveal all of the terms of be taken to avoid, reduce, or mitigate the in- name drug’’ means a drug approved under sec- the agreement or agreements. creased risk; and tion 505(c) of the Federal Food, Drug, and Cos- SEC. 906. FILING DEADLINES. ‘‘(II) if the Secretary determines that any metic Act (21 U.S.C. 355(c)). Any filing required under section 5 shall be measures described in subclause (I) would re- (4) BRAND NAME DRUG COMPANY.—The term filed with the Assistant Attorney General and quire additional statutory authority, submits to ‘‘brand name drug company’’ means the party the Commission not later than 10 business days Congress a report describing the legislation that that received Food and Drug Administration ap- after the date the agreements are executed. would be required; proval to market a brand name drug pursuant SEC. 907. DISCLOSURE EXEMPTION. ‘‘(B) identifies specifically, in qualitative and to an NDA, where that drug is the subject of an Any information or documentary material quantitative terms, the benefits that would re- ANDA, or a party owning or controlling en- filed with the Assistant Attorney General or the sult from implementation of this section (includ- forcement of any patent listed in the Approved Commission pursuant to this title shall be ex- ing the benefit of reductions in the cost of cov- Drug Products With Therapeutic Equivalence empt from disclosure under section 552 of title 5, ered products to consumers in the United States, Evaluations of the Food and Drug Administra- and no such information or documentary mate- allowing consumers to procure needed medication for that drug, under section 505(b) of the rial may be made public, except as may be rel- tion that consumers might not otherwise be able Federal Food, Drug, and Cosmetic Act (21 evant to any administrative or judicial action or to procure without foregoing other necessities of U.S.C. 355(b)). proceeding. Nothing in this section is intended life); and (5) COMMISSION.—The term ‘‘Commission’’ to prevent disclosure to either body of Congress ‘‘(C)(i) compares in specific terms the det- means the Federal Trade Commission. riment identified under subparagraph (A) with or to any duly authorized committee or sub- (6) GENERIC DRUG.—The term ‘‘generic drug’’ the benefits identified under subparagraph (B); committee of the Congress. means a product that the Food and Drug Ad- SEC. 908. ENFORCEMENT. and ministration has approved under section 505(j) ‘‘(ii) determines that the benefits do not out- (a) CIVIL PENALTY.—Any brand name drug of the Federal Food, Drug, and Cosmetic Act (21 weigh the detriment. company or generic drug applicant which fails U.S.C. 355(j)). ‘‘(o) AUTHORIZATION OF APPROPRIATIONS.— to comply with any provision of this title shall There are authorized to be appropriated such (7) GENERIC DRUG APPLICANT.—The term ‘‘ge- be liable for a civil penalty of not more than sums as are necessary to carry out this sec- neric drug applicant’’ means a person who has $11,000, for each day during which such entity tion.’’. filed or received approval for an ANDA under is in violation of this title. Such penalty may be (b) CONFORMING AMENDMENTS.—The Federal section 505(j) of the Federal Food, Drug, and recovered in a civil action brought by the United Food, Drug, and Cosmetic Act is amended— Cosmetic Act (21 U.S.C. 355(j)). States, or brought by the Commission in accord- (1) in section 301(aa) (21 U.S.C. 331(aa)), by (8) NDA.—The term ‘‘NDA’’ means a New ance with the procedures established in section striking ‘‘covered product in violation of section Drug Application, as defined under section 16(a)(1) of the Federal Trade Commission Act (15 804’’ and inserting ‘‘prescription drug in viola- 505(b) et seq. of the Federal Food, Drug, and U.S.C. 56(a)). tion of section 804’’; and Cosmetic Act (21 U.S.C. 355(b) et seq.) (b) COMPLIANCE AND EQUITABLE RELIEF.—If (2) in section 303(a)(6) (21 U.S.C. 333(a)(6), by SEC. 905. NOTIFICATION OF AGREEMENTS. any brand name drug company or generic drug striking ‘‘covered product pursuant to section (a) IN GENERAL.— applicant fails to comply with any provision of 804(a)’’ and inserting ‘‘prescription drug under (1) REQUIREMENT.—A generic drug applicant this title, the United States district court may section 804(b)’’. that has submitted an ANDA containing a cer- order compliance, and may grant such other eq- (c) CONDITIONS.—This section shall become ef- tification under section 505(j)(2)(vii)(IV) of the uitable relief as the court in its discretion deter- fective only if the Secretary of Health and Federal Food, Drug, and Cosmetic Act (21 mines necessary or appropriate, upon applica- Human Services certifies to the Congress that U.S.C. 355(j)(2)(vii)(IV)) and a brand name drug tion of the Assistant Attorney General or the the implementation of this section will— company that enter into an agreement described Commission. (1) pose no additional risk to the public’s in paragraph (2), prior to the generic drug that SEC. 909. RULEMAKING. health and safety; and is the subject of the application entering the The Commission, with the concurrence of the (2) result in a significant reduction in the cost market, shall each file the agreement as required Assistant Attorney General and by rule in ac- of covered products to the American consumer. by subsection (b). cordance with section 553 of title 5 United States TITLE IX—DRUG COMPETITION ACT OF (2) DEFINITION.—An agreement described in Code, consistent with the purposes of this title— 2003 this paragraph is an agreement regarding— (1) may define the terms used in this title; SEC. 901. SHORT TITLE. (A) the manufacture, marketing or sale of the (2) may exempt classes of persons or agree- This title may be cited as the ‘‘Drug Competi- brand name drug that is the subject of the ge- ments from the requirements of this title; and tion Act of 2003’’. neric drug applicant’s ANDA; (3) may prescribe such other rules as may be SEC. 902. FINDINGS. (B) the manufacture, marketing or sale of the necessary and appropriate to carry out the pur- Congress finds that— generic drug that is the subject of the generic poses of this title. (1) prescription drug prices are increasing at drug applicant’s ANDA; or SEC. 910. SAVINGS CLAUSE. an alarming rate and are a major worry of (C) the 180-day period referred to in section Any action taken by the Assistant Attorney many senior citizens and American families; 505(j)(5)(B)(iv) of the Federal Food, Drug, and General or the Commission, or any failure of the

VerDate Mar 15 2010 21:12 Jan 14, 2014 Jkt 081600 PO 00000 Frm 00128 Fmt 0624 Sfmt 6333 E:\2003SENATE\S07JY3.REC S07JY3 mmaher on DSKCGSP4G1 with SOCIALSECURITY July 7, 2003 CONGRESSIONAL RECORD — SENATE S8997 Assistant Attorney General or the Commission to tion to proceed to S. 11, the Patients MICHAEL D. BISH, 0000 EDWARD S. CLARK, 0000 take action, under this title shall not bar any First Act. A short while ago, I filed a LYNN D. FISHER, 0000 proceeding or any action with respect to any cloture motion on the motion to pro- FERGAL I. FOLEY, 0000 DEBRA A. SPEAR, 0000 agreement between a brand name drug company ceed to the bill and that cloture vote and a generic drug applicant at any time under THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT any other provision of law, nor shall any filing will occur on Wednesday. TO THE GRADE INDICATED IN THE UNITED STATES ARMY In addition to debating the motion to DENTAL CORPS, UNDER TITLE 10, U.S.C., SECTIONS 624 under this title constitute or create a presump- AND 3064: tion of any violation of any antitrust or com- proceed tomorrow, the Senate may pro- petition laws. ceed to any Executive Calendar item To be major SEC. 911. EFFECTIVE DATE. that can be cleared for action. There- NATHAN E BAKER, 0000 BRIAN D BARNHART, 0000 This title shall— fore, Senators should anticipate addi- MATTHEW K BRUNER, 0000 (1) take effect 30 days after the date of enact- tional votes during tomorrow’s session. STEPHANIE CALHOUNJAMISON, 0000 ment of this title; and JERRY M CARBONE, 0000 (2) shall apply to agreements described in sec- I thank the distinguished majority MYUNGSOOK CHO, 0000 whip for his leadership on managing SO B CHOI, 0000 tion 905 that are entered into 30 days after the STEPHEN E CLARY, 0000 date of enactment of this title. the attempt to proceed to the under- SCOTT P DAY, 0000 lying bill today. The debate, I thought, EDWARD L DONALDSON, 0000 Amend the title so as to read: ‘‘An Act to RUSSELL S EDDY, 0000 amend title XVIII of the Social Security Act was superb. I outlined a number of the KENNETH J ERLEY, 0000 to provide for a voluntary prescription drug issues that we should aggressively be WILLIE R FAISON, 0000 benefit under the medicare program and to ROBERT N GALBREATH, 0000 addressing on the floor of the Senate CRAIG M GAYTON, 0000 strengthen and improve the medicare pro- for the benefit of the American people. MICHAEL J GLIDDON, 0000 gram, and for other purposes.’’. MARRERO J GONZALEZ, 0000 The PRESIDING OFFICER. The pas- f BRETT H HENSON, 0000 TYLER J INGERSOLL, 0000 sage of S. 1 is vitiated and the bill is FAISON T JONES, 0000 ADJOURNMENT UNTIL 9:30 A.M. placed back on the calendar. MICHAEL R KERTES, 0000 TOMORROW NEIL E MOREY, 0000 f SANDRA N MUOGHALU, 0000 Mr. FRIST. Mr. President, if there is TODD E PIENKOS, 0000 ORDERS FOR TUESDAY, JULY 8, RODNEY R RICHARDS, 0000 no further business to come before the DAVID C SCHAEFER, 0000 2003 Senate, I ask unanimous consent that YILDIZTERESA SILTA, 0000 YUN U SONG, 0000 Mr. FRIST. Mr. President, I ask the Senate stand in adjournment under JASON C STRANGE, 0000 unanimous consent that when the Sen- the previous order. MICHAEL S TROUT, 0000 RYAN J WANG, 0000 ate completes its business today, it There being no objection, the Senate, FREDERICK V WRIGHT, 0000 stand in adjournment until 9:30 a.m., at 7:16 p.m., adjourned until Tuesday, THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT Tuesday, July 8. I further ask that fol- July 8, 2003, at 9:30 a.m. TO THE GRADE INDICATED IN THE UNITED STATES ARMY lowing the prayer and pledge, the AND FOR REGULAR APPOINTMENT IN THE DENTAL f CORPS (IDENTIFIED BY AN ASTERISK(*)) UNDER TITLE 10, morning hour be deemed expired, the U.S.C., SECTIONS 624, 531, AND 3064: Journal of proceedings be approved to NOMINATIONS To be lieutenant colonel date, the time for the two leaders be Executive nominations received by LISA M * ANDERSON, 0000 reserved for their use later in the day, the Senate July 7, 2003: CHRISTOPHER L * ARNHEITER, 0000 and the Senate then begin a period of SHAN K * BAGBY, 0000 DEPARTMENT OF DEFENSE DAVID R * BEANLAND, 0000 morning business until 11:30 a.m., with HOWELL I * BEARD, 0000 JAMES G. ROCHE, OF MARYLAND, TO BE SECRETARY OF JEFFREY G * CHAFFIN, 0000 the time equally divided between the THE ARMY, VICE THOMAS E. WHITE, RESIGNED. two leaders or their designees; provided PETER H * GUEVARA, 0000 DEPARTMENT OF STATE ROBERT W * HEROLD, 0000 that at 11:30 a.m., the Senate proceed JAMES M * HOWELL III, 0000 JEANE J. KIRKPATRICK, OF MARYLAND, FOR THE RANK SHAUN L * KANION, 0000 to executive session to consider Execu- OF AMBASSADOR DURING HER TENURE OF SERVICE AS COLLINS T * LYONS, 0000 tive Calendar No. 227, the nomination REPRESENTATIVE OF THE UNITED STATES OF AMERICA DAVID V * MALAVE, 0000 ON THE HUMAN RIGHTS COMMISSION OF THE ECONOMIC KATHLEEN * MCNALLY, 0000 of David Campbell to be a U.S. District AND SOCIAL COUNCIL OF THE UNITED NATIONS. RAMON E * MELENDEZ, 0000 Judge for the District of Arizona, and DONALD K. STEINBERG, OF CALIFORNIA, A CAREER GRANT K * NAKASHIMA, 0000 MEMBER OF THE SENIOR FOREIGN SERVICE, CLASS OF GEN B * PAEK, 0000 that the time until 11:45 a.m. be equal- MINISTER-COUNSELOR, TO BE AMBASSADOR EXTRAOR- DIANNE D * PANNES, 0000 ly divided between the chairman and DINARY AND PLENIPOTENTIARY OF THE UNITED STATES CHRISTOPHER D * PERRIN, 0000 OF AMERICA TO THE FEDERAL REPUBLIC OF NIGERIA. MICHAEL L * ROBERTS, 0000 ranking member of the Judiciary Com- ALFRED J * TERP, 0000 mittee or their designees. DEPARTMENT OF JUSTICE ANTHONY S * THOMAS, 0000 JAMES W * TURONIS, 0000 I further ask unanimous consent that FEDERICO LAWRENCE ROCHA, OF CALIFORNIA, TO BE UNITED STATES MARSHAL FOR THE NORTHERN DIS- THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT the Senate recess from 12:30 p.m. to 2:15 TRICT OF CALIFORNIA FOR THE TERM OF FOUR YEARS, TO THE GRADE INDICATED IN THE UNITED STATES ARMY p.m. for the weekly party lunches. VICE JAMES J. MOLINARI, RESIGNED. MEDICAL CORPS AND FOR REGULAR APPOINTMENT The PRESIDING OFFICER. Without IN THE MARINE CORPS (IDENTIFIED BY AN ASTERISK(*)) UNDER TITLE 10, U.S.C., SECTIONS 624, 531, AND 3064: objection, it is so ordered. THE FOLLOWING NAMED OFFICER FOR APPOINTMENT To be lieutenant colonel f IN THE UNITED STATES MARINE CORPS TO THE GRADE INDICATED WHILE ASSIGNED TO A POSITION OF IMPOR- BRETT T * ACKERMANN, 0000 PROGRAM TANCE AND RESPONSIBILITY UNDER TITLE 10, U.S.C., ALEXANDER D * ALLAIRE, 0000 SECTION 601: ANTHONY W * ALLEN, 0000 Mr. FRIST. Mr. President, for the in- To be lieutenant general PEDRO * ARCHEVALD, 0000 KRISTEN C BARNER, 0000 formation of all Senators, tomorrow MAJ. GEN. ROBERT M. SHEA, 0000 ROSS BARNER, 0000 the Senate will be in a period of morn- PATRICK J BENNETT, 0000 IN THE NAVY ing business until 11:30 a.m. Following MARY J BORSES, 0000 THE FOLLOWING NAMED OFFICER FOR APPOINTMENT FRED H * BRENNAN JR., 0000 morning business, the Senate will IN THE UNITED STATES NAVY TO THE GRADE INDICATED CHRISTOPHER M * BRIAN, 0000 begin up to 15 minutes of debate on the WHILE ASSIGNED TO A POSITION OF IMPORTANCE AND NORI Y BUISING, 0000 RESPONSIBILITY UNDER TITLE 10, U.S.C., SECTION 601: CHRISTOPHER P * CANNON, 0000 nomination of David Campbell to be a RICHARD L * CATALAN, 0000 To be vice admiral TIMOTHY T * CHANG, 0000 U.S. District Judge for the District of MICHAEL K * CHINN, 0000 Arizona. At 11:45 a.m., the Senate will REAR ADM. GARY ROUGHEAD, 0000 FRANCIS M * CHIRICOSTA, 0000 THE FOLLOWING NAMED OFFICER FOR APPOINTMENT FRANK L * CHRISTOPHER, 0000 vote on the Campbell nomination. Im- IN THE UNITED STATES NAVY TO THE GRADE INDICATED MATHEW H * CHUNG, 0000 mediately following that vote, the Sen- WHILE ASSIGNED TO A POSITION OF IMPORTANCE AND CYNTHIA L CLAGETT, 0000 RESPONSIBILITY UNDER TITLE 10, U.S.C., SECTION 601: DAVID B CLINE, 0000 ate will proceed to a vote on the mo- TERESA A * COLEMAN, 0000 tion to invoke cloture on the nomina- To be vice admiral JAN M COMBS, 0000 VICE ADM. JAMES C. DAWSON JR., 0000 WILLIAM C CONNER, 0000 tion of Victor Wolski to be a judge of PATRICK J CONTINO, 0000 the U.S. Court of Federal Claims. IN THE ARMY MARICELA * CONTRERAS, 0000 JOHN W * COURSEY, 0000 Therefore, the first vote in tomorrow’s THE FOLLOWING NAMED ARMY NATIONAL GUARD OF JOHN J * CRAWFORD, 0000 session will occur at 11:45 a.m. That THE UNITED STATES OFFICERS FOR APPOINTMENT TO MARK H CROLEY, 0000 THE GRADE INDICATED IN THE RESERVE OF THE ARMY TELITA CROSLAND, 0000 vote will be the first of two back-to- UNDER TITLE 10, U.S.C., SECTIONS 12203 AND 12211: MARTIN P * CURRY, 0000 back votes. To be colonel LEONARD E * DEAL, 0000 For the remainder of the day, the JOSE C * DEHOYOS, 0000 DAVID A. ARCHER, 0000 DIANE * DEVITA, 0000 Senate will resume debate on the mo- JAMES B. BAXTER, 0000 KEVIN D DEWEBER, 0000

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PHILIP A * DINAUER, 0000 FIONA O AZUBUIKE, 0000 GENE L KRISHINGNER, 0000 DARREL W * DODSON, 0000 DOUGLAS A BADZIK, 0000 ADAM J LABORE, 0000 MARIE A DOMINGUEZ, 0000 REGINALD L BAKER, 0000 CRAIG S LABUDA, 0000 MICHAEL E DOYLE, 0000 LESLEE I BALL, 0000 MICHAEL T LAKE, 0000 ETHAN E EMMONS, 0000 KEVIN P BANKS, 0000 STEVEN J LALLISS, 0000 JOHN J * FAILLACE, 0000 DARRELL J BARANKO, 0000 JENNIFER M LANE, 0000 CYDNEY L * FENTON, 0000 STEVEN J BAUER, 0000 CHRISTINE E LANG, 0000 GINAMARIE * FOGLIA, 0000 THERESA A BENCHOFF, 0000 JANET C LARSON, 0000 DIMITRY A FOMIN, 0000 ADAM J BENSON, 0000 PENNY L LARSON, 0000 JOHN T FRIEDLAND, 0000 MARY T BERNARD, 0000 CHARLOTTE M LEE, 0000 MICHAEL S FRIEDMAN, 0000 REONO BERTAGNOLLI, 0000 EVAN H LEE, 0000 MARK M * FUKUDA, 0000 GLENN T BESSINGER, 0000 JAMES R LEE, 0000 MATTHEW D * GILMAN, 0000 DANIEL P BIGLEY, 0000 CHRISTINE N LEGLER, 0000 JOHN E * GLORIOSO JR., 0000 DANIELLE N BIRD, 0000 PETROS G LEINONEN, 0000 ALFRED C * GORMAN, 0000 JASON R BOOLE, 0000 CHRISTINE F LETTIERI, 0000 BLAKE D GRAHAM, 0000 CHRISTOPHER G BOQUIST, 0000 CHRISTOPHER J LETTIERI, 0000 JOHNNIE A * HAM, 0000 CHRISTOPHER C BRAGA, 0000 JEFFREY A LEVY, 0000 MICHAEL T * HANDRIGAN, 0000 PREETINDER BRAR, 0000 ROBERT D LEWIS, 0000 BRIAN K * HARRIS, 0000 ROGER D BROCKBANK, 0000 PETER A LINDENBERG, 0000 WILLIAM B * HENGHOLD II, 0000 ADAM G BUCHANAN, 0000 COLIN A LINEHAN, 0000 ANTHONY D * HIRTZ, 0000 CHARLES P BUCK, 0000 RAULIE H LO, 0000 JOHN D * HORWHAT, 0000 DAVID W BUNDY, 0000 YINCE LOH, 0000 JAMES W * HOWARD, 0000 JEANETTE R BURGESS, 0000 GRANT C LYNDE, 0000 JOHN P * HUSAK, 0000 RICARDO M BURGOS, 0000 JOSEPH C MACDONALD, 0000 SUSAN N * ISHIKAWA, 0000 ROBERT E BURNETTE JR., 0000 CHRISTINA B MAIER, 0000 LUKE S * JANOWIAK, 0000 MARK G CARMICHAEL, 0000 CHETAN P MAINGI, 0000 NIEL A JOHNSON, 0000 AUTUMN H CAYCEDO, 0000 MARSHALL J MALINOWSKI, 0000 SCOTT J JOHNSON, 0000 MARIO CAYCEDO, 0000 JAMES D MANCUSO, 0000 SCOTT M * KAMBISS, 0000 JAMES H CHANG, 0000 BRYANT G MARCHANT, 0000 BETTY S * KIM, 0000 RODNEY C CHARLES, 0000 JONATHAN E MARTIN, 0000 ROSALYNN K * KIM, 0000 MATTHEW A CODY, 0000 NICHOLAS A MARTYAK, 0000 MICHAEL E * KIRK, 0000 MARC A COOPER, 0000 MATTHEW L MASTERSON, 0000 JORGE O * KLAJNBART, 0000 JOHN D CRAMER, 0000 LAWRENCE N MASULLO, 0000 BRIAN N KRAVITZ, 0000 JAMES V CRAWFORD, 0000 CHRISTOPHER J MATHEWS, 0000 MICHELLE B KRAVITZ, 0000 SANTO J CRESPO, 0000 KATHERINE A MATHEWS, 0000 MICHAEL D * KWAN, 0000 PETER J CUENCA, 0000 DOUGLAS MAURER, 0000 ROBERT K LATHER, 0000 STEVEN J CURRIER, 0000 JAMES R MAXWELL JR., 0000 GREGORY Y LEE, 0000 BRIAN B CUSHING, 0000 DEAN L MAYNARD, 0000 SUNMEE * LEE, 0000 SCOTT R DALTON, 0000 RICHARD V MAZZAFERRO, 0000 JONATHAN G * LEONG, 0000 CHRISTINE M DALY, 0000 STEWART C MCCARVER, 0000 JOHN A * LINFOOT JR., 0000 JASON L DAVIS, 0000 GAYLE P MCDERMOTT, 0000 FORREST * LITTLEBIRD JR., 0000 KEPLER A DAVIS, 0000 CRAIG C MCFARLAND, 0000 ROBERT H LUTZ, 0000 MICHAEL DAVIS, 0000 CRAIG H MCHOOD, 0000 ARTHUR G * LYONS, 0000 MICHAEL D DAVIS, 0000 BRIAN T MCKINLEY, 0000 KENDELL L * MANN, 0000 ROBERT W DAVIS, 0000 JOEL W MCMASTERS, 0000 BARRY D * MARTIN, 0000 TIMOTHY C DAWSON, 0000 COLIN A MEGHOO, 0000 MATTHEW M * MCCAMBRIDGE, 0000 HERBERT A DAY, 0000 WILLIAM A MERCANTI JR., 0000 ROBERT T MCCLELLAND, 0000 ALAN J DEANGELO, 0000 CECILIA P MIKITA, 0000 DAVID E * MCCUNE, 0000 MATTHEW J DEETER, 0000 MARIA C MOJICAOROURKE, 0000 MARK A MCGRAIL, 0000 GERALD T DELK, 0000 MEREDITH L MONA, 0000 TIMOTHY P * MCHENRY, 0000 MARIA DICARLANTONIO, 0000 SCOTT C MORAN, 0000 JOHN G * MCMANUS JR., 0000 TIMOTHY J DICKASON, 0000 TOMMY J MORGAN, 0000 JOHN S * MILIZIANO, 0000 JAMES A DICKERSON II, 0000 PABLO M MOUJAN, 0000 MICHAEL A MILLER, 0000 MINHLUAN N DOAN, 0000 MONICA D MURDOCHCUENCA, 0000 MICHAEL C * MOORE, 0000 KRISTIN J DOBAY, 0000 JEFFREY B MUSSER, 0000 GEORGINA L * MURRAY, 0000 MARTIN DOPERAK, 0000 OTHA MYLES, 0000 ANNE L NACLERIO, 0000 MARTEN B DUNCAN, 0000 HONGHUNG D NGUYEN, 0000 MARK L NELSON, 0000 ROBERT E ECKART, 0000 MARK W NOLLER, 0000 JOEL B * NILSSON, 0000 MARY E EDGECOMB, 0000 MEGAN M OBRIEN, 0000 SUSAN * NOE, 0000 JESS D EDISON, 0000 SETH D OBRIEN, 0000 KEVIN C * OCONNOR, 0000 HERBERT C EIDT, 0000 MARK S OCHOA, 0000 ERIC J * ORMSETH, 0000 ANTHONY R ELIAS, 0000 JOHN S OH, 0000 KEVIN J * OSHEA, 0000 ALICIA A ELMORE, 0000 ROBERT C OH, 0000 NICOLE M OWENS, 0000 LAURENCE D FINE, 0000 LISA J OLSEN, 0000 JOHN M PALMER, 0000 LISA M FOGLIA, 0000 LYLE J ONSTAD, 0000 ROSANGELA * PARSONS, 0000 JANIS L FOLLWELL, 0000 ERIK OSBORN, 0000 JOHN F * PAYNE, 0000 NEOMIE H FRIEDMAN, 0000 CLIFTON S OTTO, 0000 ANDRE M * PENNARDT, 0000 ERIC R FRIZZELL, 0000 LAURA A PACHA, 0000 MARK E * POLHEMUS, 0000 CHERYL FULTON, 0000 ELLEN L PARTRICH, 0000 JOHN R * PRAHINSKI, 0000 DAVID Y GAITONDE, 0000 MAUREEN M PETERSEN, 0000 BRET K * PURCELL, 0000 CARLOS A GARCIA, 0000 SCOTT M PETERSEN, 0000 DANA K RENTA, 0000 VINAYA A GARDE, 0000 MICHAEL PIESMAN, 0000 MATTHEW S RETTKE, 0000 ROBERT P GARNETT JR., 0000 JEFFREY D PINCO, 0000 MARYJO K ROHRER, 0000 BABETTE GLISTERCARLSON JR., 0000 MARK D PORTER, 0000 DANIEL S ROY, 0000 JOHN GODINO JR., 0000 MARTIN T PREEN, 0000 ROBERT S * RUDOLPHI, 0000 EDUARDO R GODOY, 0000 ROBERT C PRICE, 0000 JEFFREY S * SAENGER, 0000 RODNEY S GONZALEZ, 0000 CHRISTOPHER M PRIOR, 0000 STEVEN D * SIDES, 0000 JENNIFER L GOTKIN, 0000 SHELLEY A QUARLESS, 0000 DAVID A SIEGEL, 0000 SCOTT R GRIFFITH, 0000 ELDEN RAND, 0000 DANIEL E * SIMPSON, 0000 ROBERT J GUSTAFSON, 0000 JOSEPH W REARDON, 0000 JOHN A SMYRSKI III, 0000 DAVID D HAIGHT, 0000 RUTH A REARDON, 0000 DOUGLAS M SORENSEN, 0000 CHARLES G HAISLIP, 0000 KYLE N REMICK, 0000 H * SPRING, JR 0000 CHAD A HALEY, 0000 THOMAS B REPINE, 0000 BENJAMIN W * STARNES, 0000 CHRISTOPHER S HALL, 0000 III G RESTA, 0000 JEREMIAH * STUBBS, 0000 KATRINA D HALL, 0000 JOEL C REYNOLDS, 0000 RICHARD D * STUTZMAN, 0000 MARK A HALL, 0000 ANTHONY K RICE, 0000 GREGORY P * THIBAULT, 0000 MARC R HAPPE, 0000 TRAVIS B RICHARDSON, 0000 JENNIFER C * THOMPSON, 0000 MOHAMAD I HAQUE, 0000 KYLE W RICKNER, 0000 NATHAN * TILLOTSON, 0000 CLAYTON HARGIS, 0000 GADDIEL D RIOS, 0000 JEANNE K TOFFERI, 0000 SCOTTE R HARTRONFT, 0000 WAYNE L ROSEN, 0000 JAMES S * WADDING, 0000 DUANE R HENNION, 0000 JASON E ROTH, 0000 HARLAN M * WALKER II, 0000 JENNIFER B HENSING, 0000 ERIK J RUPARD, 0000 JAMIE K WASELENKO, 0000 ANNA D HOHLER, 0000 HAYRI E SANGIRAY, 0000 GREGORY P * WELCH, 0000 MICHAEL S HOOKER, 0000 GEORGE T SAWABINI, 0000 ALLEN C * WHITFORD JR., 0000 AARON Z HOOVER, 0000 JOHN D SCHABER, 0000 DONNA C * WHITNEY, 0000 LANCE R HOOVER, 0000 GREGORY A SCHERLE, 0000 DAVID J WILKIE, 0000 MITCHELL F HOWO, 0000 CARRIE L SCHMITT, 0000 CHRISTOPHER J * WILSON, 0000 CHRISTOPHER W HUMPHREYS, 0000 ERIK P SCHOBITZ, 0000 FRANKLIN H WOOD, 0000 JON R JACOBSON, 0000 BETH A SCHULZBUTULIS, 0000 JOSEPH C * WOOD, 0000 CLAIRE S JENKINS, 0000 RAFAEL A SCHULZE, 0000 MICHAEL J * ZAPOR, 0000 ANTHONY E JOHNSON, 0000 JENIFER L SCHWARZ, 0000 CHRISTINE L JOHNSON, 0000 ROBERT SETLIK, 0000 THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT CHRISTOPHER M JOHNSON, 0000 JAMES F SIMON, 0000 TO THE GRADE INDICATED IN THE UNITED STATES ARMY JEREMIAH J JOHNSON, 0000 ERIC B SMITH, 0000 MEDICAL CORPS UNDER TITLE 10, U.S.C., SECTIONS 624 DANIEL T JOHNSTON, 0000 REGINALD M SMITH, 0000 AND 3064: CHERYL H JORDAN, 0000 SIDNEY B SMITH, 0000 To be major ALINA A JOYCE, 0000 RODNEY J SPARKS, 0000 DANIEL B JUDD, 0000 JONATHAN R STABILE, 0000 ADIO ABDU, 0000 JEFFREY A KAHL, 0000 MICHAEL G STANLEY, 0000 FRANCISCO J ALBERT, 0000 ANDREW C KIM, 0000 CRAIG G STARK, 0000 GREGORY D ALES, 0000 ANN KIM, 0000 MICHAEL J STARKEY, 0000 NOEL C ALES, 0000 SAM Y KIM, 0000 SCOTT R STEELE, 0000 JAMES A ALFORD, 0000 CHRISTOPHER J KOCHAN, 0000 BENJAMIN J STEVENS, 0000 COLEMAN E ALTMAN, 0000 CATHERINE L KODAMA, 0000 DARRELL T STOCK, 0000 MADHUMITA ANANTHAKRISHNAN, 0000 FAITH L KOSCHMANN, 0000 ANN M STRAIGHT, 0000 DAVID E ANDRUS, 0000 PAUL W KRANTZ, 0000 TIMOTHY M STRAIGHT, 0000 JAYSON D AYDELOTTE, 0000 MICHAEL V KRASNOKUTSKY, 0000 WILLIAM J STRIMEL, 0000

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ANTHONY SULLIVAN, 0000 ERIN L WASHBURN, 0000 DAVID K GILBERT, 0000 MARY P SULLIVAN, 0000 MICHAEL B WATTO, 0000 JON H GOLD, 0000 MOLLY A SZERLIP, 0000 BRENDAN M WEISS, 0000 PETER A GOLDMAN, 0000 TING J TAI, 0000 JANINE G WEST, 0000 HARRIS B I HOLTMAN, 0000 SHAWN F TAYLOR, 0000 DEREK C WHITAKER, 0000 JAMES T HORNSTEIN, 0000 CHRISTOPHER E TEBROCK, 0000 ANNETTE S WILLIAMS, 0000 ROY H HOULTON JR., 0000 MELISSA J TEBROCK, 0000 JOHN K WILSON, 0000 DANA B HOWARTH, 0000 SIMON H TELIAN, 0000 JENNIFER S WINK, 0000 RENEE Q THAI, 0000 ROBERT N WOODMORRIS, 0000 JOHN P KACSAN JR., 0000 DANA L THOMAS, 0000 AMY L YOUNG, 0000 JEFFREY R KEANE, 0000 FRED N THOMAS III, 0000 RICARDO M YOUNG, 0000 ROBERT B KELSO, 0000 JON C THOMPSON, 0000 ARTHUR L KITT, 0000 WILLIAM L THOMPSON, 0000 THE FOLLOWING NAMED OFFICERS FOR APPOINTMENT ROBERT G KOVAL, 0000 JOSHUA A TOBIN, 0000 TO THE GRADE INDICATED IN THE RESERVE OF THE RANDALL E MATHEWS, 0000 JOMARI S TORRES, 0000 ARMY UNDER TITLE 10, U.S.C., SECTION 12203: CHERYL K MOORE, 0000 ALEXANDER G TRUESDELL, 0000 To be colonel LAURENCE C NELSON, 0000 VU TRUONG, 0000 JOHN NYE, 0000 DAVID A BARR, 0000 CREIGHTON C TUBB, 0000 MARTIN J OCHSNER, 0000 DANIEL L TURNER, 0000 FRANK E BROWN, 0000 JOSEPH E PAQUIN, 0000 TIMOTHY M UENG, 0000 CRAIG A CANDELORE, 0000 JAMES P PIERSON, 0000 FRANK E VALENTIN, 0000 CHRISTIAN C CHATFIELD, 0000 MICHAEL K VAUGHAN, 0000 WAYNE A CHRISTIAN II, 0000 PETER M PIETROWSKI, 0000 TRICIAMAY C VILLANUEVA, 0000 ROBERT J DANNEMILLER, 0000 EVIN D PLANTO, 0000 FELIPE D VILLENA, 0000 CHARLES P DONAGHEY, 0000 JOHN R RAGLAND, 0000 RODNEY C WADLEY, 0000 FREDERICK R FOWLER, 0000 MITCHELL C SARTAIN, 0000 WENDI M WAITS, 0000 WALTER H FREDERICK III, 0000 ROBIN S SPOFFORD, 0000 MATTHEW C WAKEFIELD, 0000 JOHN FRIEDLANDER, 0000 JAMES A WIEGEL, 0000 PAUL J WALTING, 0000 RICHARD R GAARD, 0000 ANTHONY L YELDELL, 0000 RICHARD D WARREN, 0000 BRIAN J GEORGE, 0000 SAMUEL R YOUNG, 0000

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HONORING FUTURE ‘‘FROST’’ Public Roads, the FHWA’s predecessor agen- Mr. Morgan was born in Cleveland and DAVIS cy. Except for a stint in the U.S. Army from raised in Royal Oak, MI. In addition to his de- 1957–58, he stayed with the agency until he gree from Michigan State, he received a J.D. HON. GEORGE RADANOVICH retired. degree from the Capital School of Law in Co- OF CALIFORNIA Over the years, Dick Morgan, a registered lumbus, Ohio. professional engineer, held a variety of posi- After living in Anne Arundel County, MD, he IN THE HOUSE OF REPRESENTATIVES tions at FHWA. After serving in the Arkansas, moved in the late 1990s to Maryland’s Eastern Monday, July 7, 2003 Ohio, and Texas divisions, he joined the Shore community of Easton Club. He re- Mr. RADANOVICH. Mr. Speaker, I rise Washington headquarters staff in 1972 as mained active in the community, volunteering today to recognize Mr. Future ‘‘Frost’’ Davis. chief of Special Procedures Branch in the with Habitat for Humanity in Talbot County Mr. Davis is going to celebrate his 100th birth- Federal-Aid Division. He became chief of that and the Chesapeake Bay Maritime Museum in day on July 17, 2003. division and later was name director of the Of- St. Michaels, MD, where he was a docent. Future ‘‘Frost’’ Davis was born on July 17, fice of Highway Planning before being ap- He was a member of St. Peter and Paul 1903, in Lubbock, Texas, to Mattie Ella Town- pointed associate administrator for engineering Catholic Church in Easton, where his funeral send and Charles Lee Davis. Mr. Davis at- and operations in 1979. In that slot, he helped service was held on June 25. We express our tended California Christian College, now develop a program that saved $225 million in sympathies to his wife of 45 years, Anna Lou- Chapman College, and graduated in 1931 with bridge construction costs and shepherded a ise Morgan of Easton, and their three children, a degree in Interior Design. While in college, national traffic signal timing demonstration pro- Thomas Richard Morgan of Oakland, CA, he was the president of the Art Club, Student gram, which has been credited with saving Karen Ann Yocum of Churchton, MD, and An- Body Treasurer, member of the Chi Phi millions of gallons of fuel. thony Patrick Morgan of Liberty, SC, his three Omega fraternity and the art editor of the After assuming the executive director posi- brothers, a sister, and three grandchildren. yearbook. tion in 1982, Dick Morgan is widely credited Mr. Speaker, we remember Dick Morgan as On June 23, 1933, Mr. Davis married Mar- with helping to move the FHWA from an era the ultimate professional whose public service jorie Wirt Jones. He then married Wilda Marie of highway expansion to an era of highway career left a legacy of unparalleled achieve- Collins in 1962. They moved to Oakhurst in preservation. He was one of the originators ment, providing the example for those at the 1970 and have lived there ever since. He has and strongest supporters of the Strategic Federal Highway Administration today to fol- two children and two grandchildren. Most of Highway Research Program developed to low. Mr. Davis’ life has been spent being an interior identify pavement design and maintenance f designer. His hobbies include dancing, wood- techniques that work—and those that don’t working and since his retirement he has be- work. That program has evolved over the IN RECOGNITION OF BROWN COUN- come an accomplished watercolor painter. Mr. years to help highway agencies across the na- TY GENERAL HOSPITAL BEING Davis’ life has been filled with accomplishment tion provide smoother, longer lasting roads. NAMED ONE OF THE NATION’S and enjoyment. His motto is ‘‘Life is good if Mr. Morgan also was a strong backer of in- TOP 100 HOSPITALS you don’t weaken.’’ novative techniques for increasing highway ca- Mr. Speaker, I urge my colleagues to join pacity, such as ‘‘smart’’ highways, surveillance HON. ROB PORTMAN me in wishing all the best to Mr. Future systems, and computer applications which OF OHIO ‘‘Frost’’ Davis on the occasion of his 100th today are working to reduce traffic congestion IN THE HOUSE OF REPRESENTATIVES birthday. in the nation’s urban areas. Monday, July 7, 2003 f Having played a major role in the construction of the National System of Interstate and Mr. PORTMAN. Mr. Speaker, I rise today to IN MEMORY OF RICHARD ‘‘DICK’’ Defense Highways, Dick Morgan was deeply pay tribute to all of the employees, physicians, MORGAN, RETIRED EXECUTIVE involved in the FHWA’s efforts to plan for the and volunteers of the Brown County General DIRECTOR OF FHWA post-Interstate era. With the Interstate pro- Hospital, which was recently recognized as gram coming to an end in the 1990’s, he one of the nation’s top 100 hospitals according HON. FRANK R. WOLF formed a ‘‘Futures Task Force’’ to identify and to a study conducted by a leading health care OF VIRGINIA study alternatives for the Department of Trans- information organization. IN THE HOUSE OF REPRESENTATIVES portation’s legislative initiatives and also The study, 100 Top Hospitals: National worked with organizations such as the Amer- Benchmarks for Success, utilized objective Monday, July 7, 2003 ican Association of State Highway and Trans- and quantitative data collected from over Mr. WOLF. Mr. Speaker, I want to share portation Officials to develop post-Interstate 5,600 hospitals nationwide in its analysis. Hos- with our colleagues the recent passing of proposals. pitals were evaluated in groups based on hos- Richard D. ‘‘Dick’’ Morgan, who retired in 1989 Dick Morgan received many honors during pital size and teaching status. Brown County as executive director of the Federal Highway his career. His first recognition was a cash General Hospital, a medium sized hospital, Administration (FHWA), the highest civil serv- award in 1959. Over the years, he received has earned this designation because of its ice post in the FHWA. He died on June 18 at the Secretary’s Award for Superior Achieve- commitment to quality service and continual a hospital in Easton, MD, following a year long ment (1974), the Senior Executive Service improvement. battle with leukemia. He was 69. Performance Award on several occasions, and When the hospital was founded in 1952 it Many of our colleagues who have been the Federal Highway Administrator’s Award for was a 50-bed facility providing emergency and here for a while will remember Dick Morgan as Superior Achievement (1983). In 1982, he re- maternity care. Since then, the hospital has the highway expert who helped steer the reau- ceived the Presidential Rank Award of Meri- expanded a great deal, providing the commu- thorization of the federal highway program in torious Executive and in 1987 he was given nity with the most advanced medical tech- 1982, which included a motor fuel tax in- the President Rank Award of Distinguished nologies and one of the first home care units crease, the first in more than two decades, to Executive. The American Public Works Asso- in Ohio. Today, the hospital is a 115-bed facil- fund repairs for what was described then as ciation recognized Mr. Morgan as one of the ity with two regional healthcare centers that the nation’s crumbling highways and bridges. Top Ten Public Works Leaders of the Year in offer a wide variety of services to Brown Mr. Morgan received a B.S. degree in civil 1988. County and the surrounding area. After 50 engineering, graduating with honors from When he retired from the FHWA in 1989, he years of operation, the hospital continues to Michigan State University in 1956. The fol- became vice president of the National Asphalt be a community-owned not-for-profit facility. It lowing year he began his federal career as a Pavement Association in Washington, where is Brown County’s largest employer with over highway engineer trainee with the Bureau of he remained until 1998. 300 employees that are known for their high

∑ This ‘‘bullet’’ symbol identifies statements or insertions which are not spoken by a Member of the Senate on the floor. Matter set in this typeface indicates words inserted or appended, rather than spoken, by a Member of the House on the floor.

VerDate Jan 31 2003 03:22 Jul 08, 2003 Jkt 019060 PO 00000 Frm 00001 Fmt 0626 Sfmt 9920 E:\CR\FM\A07JY8.001 E07PT1 E1404 CONGRESSIONAL RECORD — Extensions of Remarks July 7, 2003 level of patient care, having been named one of the people of Hong Kong. I call on Presi- bined five billion hours online each year and of the nation’s top patient satisfaction pro- dent Bush and his Administration, to express the numbers continue to increase. With chil- viders. to the People’s Republic of China the con- dren spending more time online, predators are Mr. Speaker, I hope my colleagues will join cerns as outlined in H. Res. 277. presented with more opportunity. One in five me in recognizing Brown County General Hos- f children who use chat rooms has received an pital for being named one of the nation’s top unwanted solicitation online and this is unac- 100 hospitals. All of us in southern Ohio are TRIBUTE TO BILL BARRETT ceptable. thankful for the outstanding service and dedi- We must teach our kids about the serious cation of its employees, volunteers, and com- HON. LYNN C. WOOLSEY threats they can face on-line. Recent studies munity members. OF CALIFORNIA have shown that forty percent of students do f IN THE HOUSE OF REPRESENTATIVES not understand the danger of exchanging pic- EXPRESSING SUPPORT FOR Monday, July 7, 2003 tures with strangers they have met on the FREEDOM IN HONG KONG internet and sixty percent do not understand Ms. WOOLSEY. Mr. Speaker, Mr. THOMP- the danger of meeting a stranger they have SON of California and I rise today, to recognize SPEECH OF met online in person. Often times, parents do Bill Barrett who is retiring this month after not know their children are meeting strangers HON. ALCEE L. HASTINGS twenty-six and a half years with the United on-line and this contributes to the problem. OF FLORIDA States Postal Service. Seventy-five percent of parents say they know IN THE HOUSE OF REPRESENTATIVES Mr. Barrett began his career as a letter car- when their children spend time online, but the rier in Milpitas, California in 1976. In 1978 he Wednesday, June 25, 2003 majority of teenagers log on right after school, worked briefly in his hometown of Yakima, before their parents arrive home. Also, most Mr. HASTINGS of Florida. Mr. Speaker, I Washington before returning to Milpitas, where children who are harassed online do not usu- rise today to voice my support for H. Res. he worked until 1985. He spent the last eight- ally reveal the harassment to their parents be- 277: Expressing Support for Freedom in Hong een years of his career in Santa Rosa, Cali- cause they are afraid their parents may ban Kong. This former British colony has been fornia. computer usage. known to many in recent years as one of the During this time Mr. Barrett also served his world’s freest economies due to its low taxes, co-workers as a Trustee of the National Asso- Many tend to think that harm on the internet free trade, and strong rule of law. Mr. Speak- ciation of Letter Carriers Branch 183 from extends only to children, however this is a er, Hong Kong has recently undergone a num- 1987 to 2002, and as Legislative Liaison from false assumption. Most adults do not realize ber of political changes, which are in opposi- 1994 to 1998. He has also been a District Offi- their identity can also be easily stolen on the tion to long-held agreements and under- cer with the California State Association of internet. According to the FBI, identity theft standings, which it maintained with its western Letter Carriers from 1998 to the present. has become the fastest growing financial trading partners. Prior to his career with the USPS, Mr. Bar- crime in America, simply because a person The government in Beijing is promoting rett was a Staff Sergeant in the United States can be identified based on three things: their changes in the internal security laws of Hong Air Force and served a tour of duty in Vietnam date of birth, gender, and zip code. Most im- Kong that will change the basic freedoms in from 1968 to 1970. He is also active with his portantly, during this turbulent time in our na- that territory. These laws will restrict distribu- military service group, Blind Bat. tion’s history, education is key to protecting tion of publications and an appointee of the Mr. Barrett and his wife, Fran, are very not only personal security, but also national Chinese government, not an elected official, proud of their two daughters, Amy, 26 and security. Our critical e-infrastructure must be could waive basic fundamental rights of the Missy, 22. protected from hacking, net vandalism, and people. In his retirement, Mr. Barrett plans to con- virus proliferation. The Chinese agreed in 1984 through the tinue his work with persons with special needs Thank you for the opportunity to discuss Sino-British Joint Declaration to explicitly guar- and to travel on his new motorcycle, with its internet safety. I urge other Members to be- antee that all of Hong Kong’s freedom, includ- special license plate that reads: XMAILMN. come involved on this issue. The internet has ing press freedom, religious freedom and free- His other hobbies are reading and research- vastly improved our lives and opened the door dom of association will continue for at least 50 ing genealogy on his computer. to a world of opportunity, but with these tech- years. The Chinese government also has Mr. Speaker, Bill Barrett has been a dedi- nological advances comes a great deal of re- pledged to respect Hong Kong Basic Law of cated public servant all of his adult life, both sponsibility. Unfortunately, there are people 1990, which explicitly protects freedom of in service to his country in the U.S. military out there who seek to exploit this new medium speech, press, publication, association, as- and as an employee with the United States in communication. I applaud I-Safe’s effort to sembly, procession, demonstration, con- Postal Service. It is appropriate that we honor educate children and adults on the internet science and religion. him today for his many contributions. and will continue to work with this organization Since July of 1977, Mr. Speaker, the Chi- f to promote internet safety. Thank you. nese authorities have gradually chipped away at the freedoms it promised to keep for 50 INTERNET SAFETY f years. For example, the system of electing representatives to the Legislative Council is HON. RANDY ‘‘DUKE’’ CUNNINGHAM PERSONAL EXPLANATION less democratic. Appointed members have OF CALIFORNIA been added to district councils, and the central IN THE HOUSE OF REPRESENTATIVES HON. TODD TIAHRT government has reversed Hong Kong courts, OF KANSAS and declined to admit entry of numerous Monday, July 7, 2003 American visitors and other foreign nationals. Mr. CUNNINGHAM. Mr. Speaker, I rise IN THE HOUSE OF REPRESENTATIVES The proposed Article 23 laws that deal with today to recognize I-Safe and the Home Depot Monday, July 7, 2003 sedition, treason, and subversion against the for announcing June 2003 as National Internet Chinese Communist Party threaten the rights Safety Month. I-Safe and the Home Depot Mr. TIAHRT. Mr. Speaker, on June 19, I of the people of Hong Kong. We know China’s have teamed up to combat victimization of was unavoidably detained and missed rollcall record in the application of the law to its citi- America’s youth on the internet. They have vote No. 296. Rollcall vote No. 296 was on zens. This record is one that brings grave con- chosen the month of June because it marks passage of H.R. 660, the Small Business cern that China will not administer the laws in the beginning of summer when children spend Health Fairness Act of 2003. Had I been Hong Kong in a fair, equitable, and honorable the most time without supervision and the present, I would have voted ‘‘yea’’ on H.R. manner. most time online. I know that we are all aware 660. Mr. Speaker, for all the above reasons, of the dangers the internet potentially holds, Also, Mr. Speaker, on June 23, I was un- among others, I condemn any restrictions of not only to us, but to our families and children avoidably detained and missed rollcall vote freedom of thought, freedom of expression, or as well. This is why I support educating Amer- No. 300. Rollcall vote number 300 was on association in Hong Kong. Furthermore, I ica’s citizens about the internet. Each month, passage of H.R. 2465, the Family Farmer strongly urge the People’s Republic of China forty-eight million children in the United States Bankruptcy Relief Act of 2003. Had I been to withdraw the proposed implementation of go online to chat with their friends, play, and/ present, I would have voted ‘‘yea’’ on H.R. Article 23 as it affects negatively the freedoms or do research. These children spend a com- 2465.

VerDate Jan 31 2003 03:22 Jul 08, 2003 Jkt 019060 PO 00000 Frm 00002 Fmt 0626 Sfmt 0634 E:\CR\FM\A07JY8.003 E07PT1 July 7, 2003 CONGRESSIONAL RECORD — Extensions of Remarks E1405 TRIBUTE TO WILLIAM MENNA AS uating. Serving for four years during the World Food Festival and Holy Rosary’s Food Fiesta. HE CELEBRATES HIS 80TH War II, he did tours in both the European and Bill’s generosity is seemingly unending and BIRTHDAY Pacific Theaters. After leaving the service, Bill the communities of Derby and Ansonia have returned to Connecticut and made a home truly been blessed to be the beneficiaries of HON. ROSA L. DeLAURO with his wife, Mary, in Ansonia where they his time, energy, and compassion. lived happily for almost fifty years before her OF CONNECTICUT When we speak of the ideal public servant, passing. of what it means to give back to your commu- IN THE HOUSE OF REPRESENTATIVES For as long as Valley residents can remem- nity, we talk of those who willingly devote their Monday, July 7, 2003 ber, Bill has been involved in both local and energies to enrich the lives of others. Bill Ms. DELAURO. Mr. Speaker, it is with great state politics. A State Representative, Mayor, Menna—with his enduring dedication and pleasure that I rise today to join the many and vocal community advocate—Bill’s commit- many years of unparalleled service—is a re- family, friends, and well-wishers who have ment and dedication to his community is un- flection of the very spirit of public service. His gathered to extend my sincere congratulations questioned. He has long been known as one hard work has made a real difference and for to William Menna—known to friends as ‘‘Wild to fight for and give voice to those most in that we owe him a debt of gratitude. Bill’’—as he celebrates his eightieth birthday. need. In addition to his political life, Bill has Bill has left an indelible mark on this com- This is an important milestone for one of the also volunteered countless hours to a variety munity—he is a true living treasure. I am most well-known and respected of our com- of local service organizations. Currently he proud to join all of those gathered today to ex- munity leaders. serves as a Board member for the Bir- tend my heart-felt congratulations to William For ‘‘Wild Bill,’’ public service has not been mingham Group, United Way, Boy Scouts of Menna on this his 80th birthday. Happy Birth- just a job, but a way of life. Born and raised America, and UNICO. He is a past president day! My very best wishes for many more in Derby—Connecticut’s smallest city—Bill of the Rotary Club and has long been a volun- years of health and happiness. joined the United States Navy upon grad- teer for the St. Michael’s Carnival, St. Mary’s

VerDate Jan 31 2003 03:22 Jul 08, 2003 Jkt 019060 PO 00000 Frm 00003 Fmt 0626 Sfmt 0634 E:\CR\FM\A07JY8.008 E07PT1 E1406 CONGRESSIONAL RECORD — Extensions of Remarks July 7, 2003 SENATE COMMITTEE MEETINGS 10:30 a.m. 10 a.m. Title IV of Senate Resolution 4, Appropriations Judiciary Homeland Security Subcommittee To hold hearings to examine agreed to by the Senate on February 4, Business meeting to markup proposed bankcruptcy and competition issues in 1977, calls for establishment of a sys- legislation making appropriations for relation to the WorldCom Case. tem for a computerized schedule of all the Deparment of Homeland Security SD–226 meetings and hearings of Senate com- for the fiscal year ending September 30, 2:30 p.m. mittees, subcommittees, joint commit- 2004. Veterans’ Affairs tees, and committees of conference. SD–124 To hold hearings to receive a report by This title requires all such committees 11 a.m. the National Commander of The Amer- to notify the Office of the Senate Daily Appropriations ican Legion, Ronald F. Conley, of his Digest—designated by the Rules Com- Interior Subcommittee tenure. mittee—of the time, place, and purpose Business meeting to markup proposed SR–418 legislation making appropriations for of the meetings, when scheduled, and JULY 16 any cancellations or changes in the the Department of the Interior and related agencies for the fiscal year end- 10 a.m. meetings as they occur. Indian Affairs As an additional procedure along ing September 30, 2004. SD–138 To hold hearings to examine S. 556, to with the computerization of this infor- amend the Indian Health Care Improve- mation, the Office of the Senate Daily JULY 10 ment Act to revise and extend that Digest will prepare this information for Act. 9:30 a.m. SR–485 printing in the Extensions of Remarks Armed Services Governmental Affairs section of the CONGRESSIONAL RECORD To hold hearings to examine the nomina- Oversight of Government Management, the on Monday and Wednesday of each tions of Paul Morgan Longsworth, of week. Federal Workforce, and the District of Virginia, to be Deputy Administrator Columbia Subcommittee Meetings scheduled for Tuesday, July for Defense Nuclear Nonproliferation, 8, 2003 may be found in the Daily Di- To hold hearings to examine the recent National Nuclear Security Administra- General Accounting Office report enti- gest of today’s RECORD. tion, and Thomas W. O’Connell, of Vir- tled: ‘‘An Overall Strategy and Indica- MEETINGS SCHEDULED ginia, to be an Assistant Secretary of tors for Measuring Progress Are Need- Defense. ed to Better Achieve Restoration SR–222 JULY 9 Goals’’, focusing on the ramifications Judiciary of an uncoordinated Great Lakes res- 9:30 a.m. Business meeting to consider pending toration strategy, current management Armed Services calendar business. of various environmental programs, To hold hearings to examine lessons SD–G50 and possible next steps to improve the learned during Operation Enduring Small Business and Entrepreneurship management of Great Lakes programs. Freedom in Afghanistan and Operation Business meeting to markup proposed SD–342 Iraqi Freedom, and to receive testi- legislation authorizing appropriations 2:30 p.m. mony on ongoing operations in the for fiscal year 2004 for Small Business Energy and Natural Resources United States Central Command re- Administration programs. To hold hearings to examine the nomina- gion; followed by a closed session in SR–428A tion of Suedeen G. Kelly, of New Mex- SH–219. 10 a.m. ico, to be a Member of Federal Energy SH–216 Banking, Housing, and Urban Affairs Regulatory Commission for the re- Judiciary mainder of the term expiring June 30, To hold hearings to examine the nomina- To hold hearings to examine ‘‘The Accu- 2004. tions of James O. Browning, to be racy of Credit Report Information and SD–366 United States District Judge for the the Fair Credit Reporting Act’’. District of New Mexico, Kathleen SD–538 JULY 17 Cardone, to be United States District Energy and Natural Resources Judge for the Western District of To hold hearings to examine the high 9:30 a.m. Texas, James I. Cohn, to be United price of natural gas, its effect on the Commerce, Science, and Transportation States District Judge for the Southern economy and to consider potential so- Business meeting to consider pending District of Florida, Frank Montalvo, to lutions. calendar business. be United States District Judge for the SH–216 SR–253 Western District of Texas, Xavier 2:30 p.m. Governmental Affairs Rodriguez, to be United States District Veterans’ Affairs To resume hearings to examine castaway Judge for the Western District of To hold hearings to consider proposed children, focusing on whether parents Texas, and Rene Acosta, of Virginia, to legislation regarding VA-provided ben- must relinquish custody in order to se- be an Assistant Attorney General, De- efits programs, including the following: cure mental health services for their partment of Justice. S. 257, S. 517, S. 1131, S. 1133, S. 1188, S. children. SD–226 1213, S. 1239, S. 1281, S. 249, S. 938, S. SD–342 Rules and Administration 1132, S. 792, S. 806, S. 1136, S. 978, S. JULY 22 To hold hearings to examine S. Res. 173, 1124, S. 1199, S. 1282. to amend Rule XVI of the Standing SR–418 10 a.m. Rules of the Senate with respect to Intelligence Energy and Natural Resources new or general legislation and unau- To hold closed hearings to examine cer- To hold hearings to examine S. 1314, to thorized appropriations in general ap- tain intelligence matters. expedite procedures for hazardous fuels propriations bills and amendments SH–219 reduction activities on National Forest thereto, and new or general legislation, 3:30 p.m. System lands established from the pub- unauthorized appropriations, new mat- Health, Education, Labor, and Pensions lic domain and other public lands ad- ter, or nongermane matter in con- Children and Families Subcommittee ministered by the Bureau of Land Man- ference reports on appropriations Acts, agement, to improve the health of Na- To hold hearings to examine proposed and unauthorized appropriations in tional Forest System lands established legislation authorizing funds for Com- amendments between the Houses relat- from the public domain and other pub- munity Services Block grant programs. ing to such Acts. lic lands administered by the Bureau of SD–430 SR–301 Land Management, and H.R. 1904, to Joint Economic Committee improve the capacity of the Secretary JULY 15 To hold hearings to examine technology of Agriculture and the Secretary of the and innovation in relation to health 9:30 a.m. Interior to plan and conduct hazardous care costs. Governmental Affairs fuels reduction projects on National SD–628 To hold hearings to examine castaway Forest System lands and Bureau of 10 a.m. children, focusing on whether parents Land Management lands aimed at pro- Indian Affairs must relinquish custody in order to se- tecting communities, watersheds, and To hold oversight hearings to examine cure mental health services for their certain other at-risk lands from cata- the Indian Gaming Regulatory Act. children. strophic wildfire, to enhance efforts to SD–106 SD–342 protect watersheds and address threats

VerDate Jan 31 2003 03:22 Jul 08, 2003 Jkt 019060 PO 00000 Frm 00004 Fmt 0626 Sfmt 0634 E:\CR\FM\M07JY8.000 E07PT1 July 7, 2003 CONGRESSIONAL RECORD — Extensions of Remarks E1407 to forest and rangeland health, includ- ment Act to revise and extend that SEPTEMBER 16 ing catastrophic wildfire, across the Act. 10 a.m. landscape; to examine the impacts of SR–485 Veterans’ Affairs insects, disease, weather-related dam- Judiciary To hold joint hearings with the House age, and fires on public and private for- To hold oversight hearings to examine Committee on Veterans’ Affairs to re- est lands. Processes for implementing certain pending matters. ceive the legislative presentation of forest health and hazardous fuels re- SD–226 The American Legion. duction projects on public and private SH–216 lands, and processes for implementing JULY 30 forest health and hazardous fuels re- 10 a.m. duction projects will also be discussed. Indian Affairs Room to be announced To hold hearings to examine S. 578, to amend the Homeland Security Act of JULY 23 2002 to include Indian tribes among the 10 a.m. entities consulted with respect to ac- Indian Affairs tivities carried out by the Secretary of To hold hearings to examine S. 556, to Homeland Security. amend the Indian Health Care Improve- SR–485

VerDate Jan 31 2003 03:22 Jul 08, 2003 Jkt 019060 PO 00000 Frm 00005 Fmt 0626 Sfmt 0634 E:\CR\FM\M07JY8.000 E07PT1 Monday, July 7, 2003 Daily Digest

HIGHLIGHTS See Re´sume´ of Congressional Activity. Senate passed H.R. 1, Medicare Prescription Drug and Modernization Act. Senate Kasold Nomination: Senate began consideration of Chamber Action the nomination of Bruce E. Kasold, of Virginia, to Routine Proceedings, pages S8869–S8999 be a Judge of the United States Court of Appeals for Measures Introduced: Four resolutions were sub- Veterans Claims. Page S8893 mitted, as follows: S. Res. 192–195. Page S8895 Nominations Received: Senate received the fol- Measure Passed: lowing nominations: Medicare Prescription Drug and Modernization James G. Roche, of Maryland, to be Secretary of Act: Pursuant to the order of June 26, 2003, Senate the Army. passed H.R. 1, to amend title XVIII of the Social Jeane J. Kirkpatrick, of Maryland, for the rank of Security Act to provide for a voluntary prescription Ambassador during her tenure of service as Rep- drug benefit under the Medicare program and to resentative of the United States of America on the strengthen and improve the Medicare program, after Human Rights Commission of the Economic and So- striking all after the enacting clause and inserting in cial Council of the United Nations. lieu thereof, the text of S. 1, Senate companion Donald K. Steinberg, of California, to be Ambas- measure, after agreeing to the following amendment sador to the Federal Republic of Nigeria. proposed thereto: Pages S8898–S8997 Federico Lawrence Rocha, of California, to be Frist Amendment No. 1134, to amend the title of United States Marshal for the Northern District of the bill. Page S8898 California for the term of four years. Senate insisted on its amendments, requested a 1 Marine Corps nomination in the rank of general. conference with the House thereon, and the Chair 2 Navy nominations in the rank of admiral. was authorized to appoint the following conferees on Routine lists in the Army. Pages S8997–99 the part of the Senate: Senators Grassley, Hatch, Messages From the House: Page S8895 Nickles, Frist, Kyl, Baucus, Rockefeller, Daschle, and Breaux. Page S8898 Measures Held Over/Under Rule: Page S8895 Subsequently, the June 26, 2003, passage of S. 1 Enrolled Bills Presented: Page S8895 was vitiated and the bill was then returned to the Additional Cosponsors: Pages S8895–97 Senate calendar. Page S8997 Statements on Introduced Bills/Resolutions: Patients First Act: Senate began consideration of Page S8897 the motion to proceed to consideration of S. 11, to Additional Statements: Pages S8894–95 protect patients’ access to quality and affordable health care by reducing the effects of excessive liabil- Amendments Submitted: Pages S8897–98 ity costs. Pages S8871–93, S8893–94 Notices of Hearings/Meetings: Page S8898 A motion was entered to close further debate on Adjournment: Senate met at 2 p.m., and adjourned the motion to proceed and, in accordance with the at 7:16 p.m., until 9:30 a.m., on Tuesday, July 8, provisions of Rule XXII of the Standing Rules of 2003. (For Senate’s program, see the remarks of the the Senate, a vote on the cloture motion will occur Majority Leader in today’s Record on page S8997.) on Wednesday, July 9, 2003. Page S8894 Senate will continue consideration of the motion to proceed to consideration of the bill on Tuesday, Committee Meetings July 8, 2003. No committee meetings were held.

D762 July 7, 2003 CONGRESSIONAL RECORD — DAILY DIGEST D763 House of Representatives H.R. 2350, to reauthorize the Temporary Assist- Chamber Action ance for Needy Families block grant program Measures Introduced: 1 public bill, H.R. 2659, through fiscal year 2003, and for other purposes. was introduced. Page H6271 Signed on June 30, 2003. (Public Law 108–40) Additional Cosponsors: Page H6271 H.R. 389, to authorize the use of certain grant funds to establish an information clearinghouse that Reports Filed: Reports were filed as follows: provides information to increase public access to Filed on June 30, H.R. 1950, to authorize appro- defibrillation in schools. Signed on July 1, 2003. priations for the Department of State for the fiscal (Public Law 108–41) years 2004 and 2005, to authorize appropriations H.R. 519, to authorize the Secretary of the Inte- under the Arms Export Control Act and the Foreign rior to conduct a study of the San Gabriel River Assistance Act of 1961 for security assistance for fis- Watershed. Signed on July 1, 2003. (Public Law cal years 2004 and 2005, amended (H. Rept. 108–42) 108–105 Pt. 3); H.R. 788, to revise the boundary of the Glen Filed on July 1, H.R. 2657, making appropria- Canyon National Recreation Area in the States of tions for the Legislative Branch for the fiscal year Utah and Arizona. Signed on July 1, 2003. (Public ending September 30, 2004 (H.Rept. 108–186); and Law 108–43) Filed on July 2, H.R. 2658, making appropriations for the Department of Defense for the fiscal f year ending September 30, 2004 (H. Rept. CONGRESSIONAL PROGRAM AHEAD 108–187). Page H6271 Week of July 8 through July 12, 2003 Speaker Pro Tempore: Read a letter from the Speaker wherein he appointed Representative Senate Chamber Gilchrest to act as Speaker pro tempore for today. On Tuesday, at 11:30 a.m., Senate will begin con- Page H6267 sideration of the nomination of David G. Campbell, Meeting Hour—Tuesday, July 8: Agreed that of Arizona, to be United States District Judge for when the House adjourns today, it adjourns to meet the District of Arizona, and vote on confirmation of at 10:30 on Tuesday, July 8 for morning-hour de- the nomination without intervening action or debates. Page H6268 bate, to be followed by a vote on the motion to close further debate on the nomination of Victor J. Senate Messages: Message received from the Senate Wolski, of Virginia, to be a Judge of the United appears on page H6267. States Court of Federal Claims. Also, Senate will Referrals:. S. 148 was referred to the Committee on continue consideration of the motion to proceed to the Judiciary. Page H6268 consideration of S. 11, Patient First Act. Quorum Calls—Votes: No quorum calls or re- During the balance of the week, Senate may con- corded votes developed during the proceedings of the sider other cleared legislative and executive business, House today. including appropriation bills and certain nominations, when available. Adjournment: The House met at 2 p.m. and adjourned at 2:08 p.m. Senate Committees (Committee meetings are open unless otherwise indicated) Committee on Appropriations: July 8, Subcommittee on Committee Meetings Defense, business meeting to mark up proposed legisla- No Committee meetings were held. tion making appropriations for the Department of De- f fense for the fiscal year ending September 30, 2004, 10 a.m., SD–192. NEW PUBLIC LAWS July 9, Subcommittee on Homeland Security, business (For last listing of Public Laws, see DAILY DIGEST, p. D759) meeting to mark up proposed legislation making appropriations for the Department of Homeland Security for H.R. 2312, to amend the Communications Sat- the fiscal year ending September 30, 2004, 10:30 a.m., ellite of 1962 to provide for the orderly dilution of SD–124. the ownership interest in Inmarsat by former sig- July 9, Subcommittee on Interior, business meeting to natories to the Inmarsat Operating Agreement. mark up proposed legislation making appropriations for Signed on June 30, 2003. (Public Law 108–39) the Department of the Interior and related agencies for D764 CONGRESSIONAL RECORD — DAILY DIGEST July 7, 2003 the fiscal year ending September 30, 2004, 11 a.m., Kathleen Cardone, to be United States District Judge for SD–138. the Western District of Texas, James I. Cohn, to be Committee on Armed Services: July 8, to hold a closed United States District Judge for the Southern District of briefing regarding the situation in Africa, with a focus on Florida, Frank Montalvo, to be United States District Liberia, 2:15 p.m., S–407, Capitol. Judge for the Western District of Texas, Xavier July 9, Full Committee, to hold hearings to examine Rodriguez, to be United States District Judge for the lessons learned during Operation Enduring Freedom in Western District of Texas, and Rene Acosta, of Virginia, Afghanistan and Operation Iraqi Freedom, and to receive to be an Assistant Attorney General, Department of Jus- testimony on ongoing operations in the United States tice, 9:30 a.m., SD–226. Central Command region; followed by a closed session in July 10, Full Committee, business meeting to consider SH–219, 9:30 a.m., SH–216. pending calendar business, 9:30 a.m., SD–G50. July 10, Full Committee, to hold hearings to examine Committee on Rules and Administration: July 9, to hold the nominations of Paul Morgan Longsworth, of Virginia, hearings to examine S. Res. 173, to amend Rule XVI of to be Deputy Administrator for Defense Nuclear Non- the Standing Rules of the Senate with respect to new or proliferation, National Nuclear Security Administration, general legislation and unauthorized appropriations in and Thomas W. O’Connell, of Virginia, to be an Assist- general appropriations bills and amendments thereto, and ant Secretary of Defense, 9:30 a.m., SR–222. new or general legislation, unauthorized appropriations, Committee on Banking, Housing, and Urban Affairs: July new matter, or nongermane matter in conference reports 10, to hold hearings to examine ‘‘The Accuracy of Credit on appropriations Acts, and unauthorized appropriations Report Information and the Fair Credit Reporting Act’’, in amendments between the Houses relating to such 10 a.m., SD–538. Acts, 9:30 a.m., SR–301. Committee on Commerce, Science, and Transportation: July 8, Committee on Small Business and Entrepreneurship: July 10, to hold hearings to examine the Nominations: of Nicole business meeting to mark up proposed legislation author- R. Nason, of Virginia, to be an Assistant Secretary of izing appropriations for fiscal year 2004 for Small Busi- Transportation, and Pamela Harbour, of New York, to be ness Administration programs, 9:30 a.m., SR–428A. a Federal Trade Commissioner; to be followed by hearings Committee on Veterans’ Affairs: July 10, to hold hearings on Radio Ownership, 9:30 a.m., SR–253. to consider proposed legislation regarding VA-provided Committee on Energy and Natural Resources: July 8, Sub- benefits programs, including the following: S. 257, S. committee on National Parks, to hold hearings to exam- 517, S. 1131, S. 1133, S. 1188, S. 1213, S. 1239, S. ine maintenance backlog, land acquisition backlog, and 1281, S. 249, S. 938, S. 1132, S. 792, S. 806, S. 1136, deficit in personnel within the National Park System, in- S. 978, S. 1124, S. 1199, S. 1282, 2:30 p.m., SR–418. cluding the impact of new park unit designations on re- Select Committee on Intelligence: July 10, to hold closed solving each of these concerns, 10 a.m., SD–366. hearings to examine certain intelligence matters, 2:30 July 10, Full Committee, to hold hearings to examine p.m., SH–219. the high price of natural gas, its effect on the economy and to consider potential solutions, 10 a.m., SH–216. House Committees Committee on Environment and Public Works: July 8, Sub- Committee on Agriculture, July 10, Subcommittee on committee on Clean Air, Climate Change, and Nuclear General Farm Commodities and Risk Management, hear- Safety, to hold hearings to examine agricultural sequestra- ing to review crop insurance products for specialty crop tion of carbon, 9:30 a.m., SD–406. producers, 10 a.m., 1300 Longworth. Committee on Finance: July 8, to hold hearings to exam- Committee on Appropriations, July 8, Subcommittee on ine U.S. tax policy and its effect on the domestic and Energy and Water Development, to mark up appropria- international competitiveness of U.S.-based operations, 10 tions for fiscal year 2004, 5 p.m., 2362B Rayburn. a.m., SD–215. Committee on Armed Services, July 10, hearing on Oper- Committee on Health, Education, Labor, and Pensions: July ation Iraqi Freedom, 10 a.m., 2118 Rayburn. 10, Subcommittee on Children and Families, to hold Committee on the Budget, July 9, hearing on A Closer hearings to examine proposed legislation authorizing Look, The Inspectors General Address Waste, Fraud, funds for Community Services Block grant programs, Abuse in Federal Mandatory Programs, 10 a.m., 210 Can- 3:30 p.m., SD–430. non. Committee on Indian Affairs: July 9, to hold oversight Committee on Education and the Workforce, July 8, Sub- hearings to examine the Indian Gaming Regulatory Act, committee on Education Reform, hearing on ‘‘LIHEAP & 10 a.m., SD–106. CSGB: Providing Assistance to Low-Income Families,’’ 3 Committee on the Judiciary: July 8, to hold hearings to p.m., 2175 Rayburn. examine the nominations of Michael J. Garcia, of New July 10, Subcommittee on 21st Century Competitive- York, to be an Assistant Secretary of Homeland Security, ness, hearing on ‘‘Affordability in Higher Education: We and Jack Landman Goldsmith III, of Virginia, to be an know there’s a problem; what’s the solution?’’ 10 a.m., Assistant Attorney General, Department of Justice, 2:30 2175 Rayburn. p.m., SD–226. Committee on Energy and Commerce, July 8, Subcommittee July 9, Full Committee, to hold hearings to examine on Energy and Air Quality, hearing entitled ‘‘The Clear the nominations of James O. Browning, to be United Skies Initiative: A Multipollutant Approach to the Clean States District Judge for the District of New Mexico, Air Act,’’ 2 p.m., 2123 Rayburn. July 7, 2003 CONGRESSIONAL RECORD — DAILY DIGEST D765

July 9, full Committee, to mark up the following July 8, Subcommittee on Crime, Terrorism, and measures: H.R. 1950, Foreign Relations Authorization Homeland Security, hearing on H.R. 2214, Reduction in Act, Fiscal Years 2004 and 2005; H. Con. Res. 215, hon- Distribution of Spam Act of 2003, 10 a.m., 2141 Ray- oring and congratulating chambers of commerce for their burn. efforts that contribute to the improvement of commu- July 9, full Committee, to mark up the following: H. nities and the strengthening of local and regional eco- Res. 287, directing the Attorney General to transmit to nomics; and H. Res. 296, recognizing the 100th anniver- the House of Representatives not later than 14 days after sary of the founding of the Harley-Davidson Motor Com- the date of the adoption of this resolution all physical and pany, which has been a significant part of the social, eco- electronic records and documents in his possession related nomic, and cultural heritage of the United States and to any use of Federal agency resources in any task or ac- many other nations and a leading force for product and tion involving or relating to Members of the Texas Legis- manufacturing innovation throughout the 20th century, lature in the period beginning May 11, 2003, and ending 10 a.m., 2123 Rayburn. May 16, 2003, except information the disclosure of which July 9, Subcommittee on Commerce, Trade and Con- would harm the national security interests of the United sumer Protection and the Subcommittee on Tele- States; a measure implementing the U.S. Chile Free Trade communications and the Internet, joint hearing entitled Agreement; a measure implementing the U.S. Singapore ‘‘Legislative Efforts to Combat Spam,’’ following full Free Trade Agreement; H.R. 1707, Prison Rape Reduc- Committee mark up, 2123 Rayburn. tion Act of 2003; H.R. 2330, Burmese Freedom and De- July 10, Subcommittee on Health, hearing entitled mocracy Act of 2003; H.R. 1561, United States Patent ‘‘NIH: Moving Research from the Bench to the Bedside,’’ and Trademark Fee Modernization Act of 2003; H.R. 10 a.m., 2123 Rayburn. Committee on Financial Services, July 8, Subcommittee on 2086, Office of National Drug Control Policy Reauthor- Housing and Community Opportunity, to continue hear- ization Act of 2003; and H.R. 1375, Financial Services ings entitled ‘‘Rural Housing in America.’’ 10 a.m., 2128 Regulatory Relief Act of 2003, 10 a.m., 2141 Rayburn. Rayburn. July 10, Subcommittee on Crime, Terrorism, and July 9, full Committee, hearing on H.R. 2622, Fair Homeland Security, oversight hearing on ‘‘Terrorism and and Accurate Credit Transactions Act of 2003, 10 a.m., War-Time Hoaxes,’’ 3 p.m., 2141 Rayburn. 2128 Rayburn. July 11, Subcommittee on Immigration, Border Secu- Committee on Government Reform, July 8, Subcommittee rity and Claims, oversight hearing on ‘‘Immigration Re- on Technology, Information Policy, Intergovernmental lief Under the Convention Against Torture for Serious Relations and the Census, hearing entitled ‘‘Federal Elec- Criminals and Human Rights Violators, 9 a.m., 2237 tronic Records Management: What is the Plan? What is Rayburn. our Progress?’’ 10 a.m., 2154 Rayburn. Committee on Resources, July 9, to mark up the following July 9, Subcommittee on Civil Service and Agency Or- bills: H.R. 1038, Public Lands Fire Regulations Enforce- ganization, hearing entitled ‘‘Making Health Care More ment Act of 2003; H.R. 1616, Martin Luther King, Jun- Affordable: Extending Premium Conversion to Federal ior, National Historic Site Land Exchange Act; H.R. Retirees,’’ 2 p.m., 2247 Rayburn. 1651, Sierra National Forest Land Exchange Act of 2003; July 9, Subcommittee on Criminal Justice, Drug Policy H.R. 1658, Railroad Right-of-Way Conveyance Valida- and Human Resources, hearing entitled ‘‘Disrupting the tion Act of 2003; H.R. 2040, to amend the Irrigation Market: Strategy, Implementation, and Results in Nar- Project Contract Extension Act of 1998 to extend certain cotics Source Nations,’’ 10 a.m., 2154 Rayburn. contracts between the Bureau of Reclamation and certain July 9, Subcommittee on Human Rights and Wellness, irrigation water contractors in the States of Wyoming and hearing on ‘‘International Child Abduction: The Rights Nebraska; H.R. 2059, Fort Bayard National Historic of American Citizens Being Held in Saudi Arabia,’’ 2 Landmark Act; S. 233, Coltsville Study Act of 2003; and p.m., 2154 Rayburn. S. 278, Mount Naomi Wilderness Boundary Adjustment July 10, full Committee, hearing on ‘‘Smooth Sailing Act, 10 a.m., and to hold an oversight hearing on ‘‘Can or an Impending Wreck? The Impact of New Visa and a process be developed to settle matters relating to the Passport Requirements on Foreign Travel to the United Indian Trust Fund lawsuit?’’ 2 p.m., 1324 Longworth. States,’’ 10 a.m., 2154 Rayburn. July 10, to hold a hearing on the following: a measure Committee on House Administration, July 9, hearing on Reauthorizing the Compacts of Free Associate with Mi- H.R. 2205, National Museum of African American His- cronesia and the Marshall Islands; and H.R. 2522, Com- tory and Culture Act, 2 p.m., 1310 Longworth. pact Impact Reconciliation Act, 9:30 a.m., 1324 Long- Committee on International Relations, July 9, hearing on worth. A Survey and Analysis of Supporting Human Rights and Committee on Rules, July 8, to consider the following: Democracy: The U.S. Record 2002–2003, 10:30 a.m., H.R. 2657, making appropriations for the Legislative 2172 Rayburn. Branch for the fiscal year ending September 30, 2004; Committee on the Judiciary, July 8, Subcommittee on the H.R. 2211, Ready to Teach Act of 2003; and H.R. 438, Constitution, hearing on H.R. 1997, Unborn Victims of Teacher Recruitment and Retention Act of 2003, 4:30 Violence Act of 2003 or Laci and Conner’s Law, 2 p.m., 2141 Rayburn. p.m., H–313 Capitol. D766 CONGRESSIONAL RECORD — DAILY DIGEST July 7, 2003

Committee on Science, July 9, Subcommittee on Research, Committee on Ways and Means, July 10, Subcommittee hearing on H.R. 2183, Minority Serving Institution Dig- on Social Security, hearing on Social Security Number ital and Wireless Technology Opportunity Act of 2003, Privacy, 10 a.m., B–318 Rayburn. 10 a.m., 2318 Rayburn. Permanent Select Committee on Intelligence, July 10, Sub- July 10, Subcommittee on Energy, hearing on Com- committee on Intelligence Policy and National Security, petition for Department of Energy Laboratory Contracts: executive, briefing on Global Intelligence Update, 9 a.m., What is the Impact on Science? 10 a.m., 2318 Rayburn. H–405 Capitol. Committee on Small Business, July 9, hearing on Saving Select Committee on Homeland Security, July 9, Sub- Our Defense Industrial Base, 2 p.m., 2360 Rayburn. committee on Intelligence and Counterterrorism, hearing Committee on Transportation and Infrastructure, July 9, entitled ‘‘DHS Responsibility for Threat Warnings and Subcommittee on Economic Development, Public Build- Analysis: How Well is the Department Serving its Cus- ings and Emergency Management, oversight hearing on tomers?’’ 10 a.m., room to be announced. GSA’s 2004 Capital Investment and Leasing Program, 10 July 10, Subcommittee on Rules, hearing entitled a.m., 2253 Rayburn. ‘‘Perspectives on House Reform: Committees and the Ex- ecutive Branch,’’ 10:30 a.m., 2247 Rayburn. Committee on Veterans’ Affairs, July 9, Subcommittee on Oversight and Investigations, hearing to review the pre- Joint Meetings and post-deployment health assessment processing of Joint Economic Committee: July 9, to hold hearings to ex- troops recently deployed to the Persian Gulf, 2 p.m., 334 amine technology and innovation in relation to health Cannon. care costs, 9:30 a.m., SD–628. July 7, 2003 CONGRESSIONAL RECORD—DAILY DIGEST D767

Re´sume´ of Congressional Activity

FIRST SESSION OF THE ONE HUNDRED EIGHTH CONGRESS The first table gives a comprehensive re´sume´ of all legislative business transacted by the Senate and House. The second table accounts for all nominations submitted to the Senate by the President for Senate confirmation.

DATA ON LEGISLATIVE ACTIVITY DISPOSITION OF EXECUTIVE NOMINATIONS January 7 through June 30, 2003 January 7 through June 30, 2003

Senate House Total Civilian Nominations, totaling 394, disposed of as follows: Days in session ...... 92 72 . . Confirmed ...... 210 Time in session ...... 761 hrs., 28′ 522 hrs., 54′ .. Unconfirmed ...... 178 Congressional Record: Withdrawn ...... 6 Pages of proceedings ...... 8,868 6,265 . . Extensions of Remarks ...... 1,401 . . Public bills enacted into law ...... 14 26 40 Other Civilian Nominations, totaling 1,692, disposed of as follows: Private bills enacted into law ...... Confirmed ...... 1,588 Bills in conference ...... 5 3 . . Unconfirmed ...... 104 Measures passed, total ...... 280 330 610 Senate bills ...... 75 16 . . House bills ...... 43 126 . . Air Force Nominations, totaling 5,464, disposed of as follows: Senate joint resolutions ...... 2 1 . . Confirmed ...... 5,292 House joint resolutions ...... 6 9 . . Unconfirmed ...... 172 Senate concurrent resolutions ...... 22 4 . . House concurrent resolutions ...... 20 41 . . Simple resolutions ...... 112 133 . . Army Nominations, totaling 1,608, disposed of as follows: Measures reported, total ...... *161 *175 336 Confirmed ...... 1,485 Senate bills ...... 101 2 . . Unconfirmed ...... 123 House bills ...... 20 103 . . Senate joint resolutions ...... 2 1 . . House joint resolutions ...... 2 . . Navy Nominations, totaling 1,978, disposed of as follows: Senate concurrent resolutions ...... 4 . . . . Confirmed ...... 1,237 House concurrent resolutions ...... 6 . . Unconfirmed ...... 741 Simple resolutions ...... 34 61 . . Special reports ...... 8 4 . . Conference reports ...... 2 6 . . Marine Corps nominations, totaling 2,404, disposed of as follows: Measures pending on calendar ...... 71 36 . . Confirmed ...... 2,389 Measures introduced, total ...... 1,629 3,264 4,893 Unconfirmed ...... 15 Bills ...... 1,368 2,656 . . Joint resolutions ...... 14 62 . . Concurrent resolutions ...... 57 239 . . Summary Simple resolutions ...... 191 307 . . Quorum calls ...... 3 2 . . Total nominations carried over from the First Session ...... 0 Yea-and-nay votes ...... 262 220 . . Total nominations received this Session ...... 13,540 Recorded votes ...... 111 . . Total confirmed ...... 12,201 Bills vetoed ...... Total unconfirmed ...... 1,333 Vetoes overridden ...... Total withdrawn ...... 6 Total returned to the White House ...... 0 D768 CONGRESSIONAL RECORD — DAILY DIGEST July 7, 2003

Next Meeting of the SENATE Next Meeting of the HOUSE OF REPRESENTATIVES 9:30 a.m., Tuesday, July 8 10:30 a.m., Tuesday, July 8

Senate Chamber House Chamber Program for Tuesday: After the transaction of any Program for Tuesday: consideration of suspensions; and morning business (not to extend beyond 11:30 a.m.), Sen- Consideration of H.R. 2658, DOD Appropriations for FY ate will proceed to the consideration of the nomination 2004 of David G. Campbell, of Arizona, to be United States District Judge for the District of Arizona, and that the Senate vote on confirmation of the nomination without intervening action or debate; to be followed by a vote on the motion to close further debate on the nomination of Victor J. Wolski, of Virginia, to be a Judge of the United States Court of Federal Claims. Also, Senate will continue consideration of the motion to proceed to consideration of S. 11, to protect patients’ access to quality and affordable health care by reducing the effects of excessive liability costs. (Senate will recess from 12:30 p.m. until 2:15 p.m. for their respective party conferences.)

Extensions of Remarks, as inserted in this issue

HOUSE

Cunningham, Randy ‘‘Duke’’, Calif., E1404 DeLauro, Rosa L., Conn., E1405 Hastings, Alcee L., Fla., E1404 Portman, Rob, Ohio, E1403 Radanovich, George, Calif., E1403 Tiahrt, Todd, Kans., E1404 Wolf, Frank R., Va., E1403 Woolsey, Lynn C., Calif., E1404

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