[House Report 114-751]
[From the U.S. Government Publishing Office]
114th Congress } { Rept. 114-751
HOUSE OF REPRESENTATIVES
2d Session } { Part 1
======================================================================
EXPANDING SENIORS RECEIVING DIALYSIS CHOICE ACT OF 2016
_______
September 19, 2016.--Committed to the Committee of the Whole House on
the State of the Union and ordered to be printed
_______
Mr. Brady of Texas, from the Committee on Ways and Means, submitted the
following
R E P O R T
[To accompany H.R. 5659]
[Including cost estimate of the Congressional Budget Office]
The Committee on Ways and Means, to whom was referred the
bill (H.R. 5659) to amend title XVIII of the Social Security
Act with respect to expanding Medicare Advantage coverage for
individuals with end-stage renal disease (ESRD), having
considered the same, report favorably thereon with an amendment
and recommend that the bill as amended do pass.
CONTENTS
Page
I. SUMMARY AND BACKGROUND............................................3
A. Purpose and Summary................................. 3
B. Background and Need for Legislation................. 3
C. Legislative History................................. 3
II. EXPLANATION OF THE BILL...........................................4
III.VOTES OF THE COMMITTEE............................................5
IV. BUDGET EFFECTS OF THE BILL........................................5
A. Committee Estimate of Budgetary Effects............. 5
B. Statement Regarding New Budget Authority and Tax
Expenditures Budget Authority...................... 5
C. Cost Estimate Prepared by the Congressional Budget
Office............................................. 5
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE........7
A. Committee Oversight Findings and Recommendations.... 7
B. Statement of General Performance Goals and
Objectives......................................... 7
C. Information Relating to Unfunded Mandates........... 7
D. Congressional Earmarks, Limited Tax Benefits, and
Limited Tariff Benefits............................ 7
E. Duplication of Federal Programs..................... 7
F. Disclosure of Directed Rule Makings................. 7
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED.............8
A. Text of Existing Law Amended or Repealed by the
Bill, as Reported.................................. 8
B. Changes in Existing Law Proposed by the Bill, as
Reported........................................... 79
The amendment is as follows:
Strike all after the enacting clause and insert the
following:
SECTION 1. SHORT TITLE.
This Act may be cited as the ``Expanding Seniors Receiving Dialysis
Choice Act of 2016'' or as the ``ESRD Choice Act of 2016''.
SEC. 2. EXPANDING MEDICARE ADVANTAGE COVERAGE FOR INDIVIDUALS WITH END-
STAGE RENAL DISEASE (ESRD).
(a) Expanded MA Eligibility.--
(1) In general.--Section 1851(a)(3) of the Social Security
Act (42 U.S.C. 1395w-21(a)(3)) is amended--
(A) by striking subparagraph (B); and
(B) by striking ``eligible individual'' and all that
follows through ``In this title, subject to
subparagraph (B),'' and inserting ``eligible
individual.--In this title,''.
(2) Conforming amendments.--
(A) Section 1852(b)(1) of the Social Security Act (42
U.S.C. 1395w-22(b)(1)) is amended--
(i) by striking subparagraph (B); and
(ii) by striking ``Beneficiaries'' and all
that follows through ``A Medicare+Choice
organization'' and inserting ``Beneficiaries.--
A Medicare Advantage organization''.
(B) Section 1859(b)(6) of the Social Security Act (42
U.S.C. 1395w-28(b)(6)) is amended by striking ``may
waive'' and all that follows through ``subparagraph
and''.
(b) Excluding Costs for Kidney Acquisitions From MA Benchmark.--
Section 1853 of the Social Security Act (42 U.S.C. 1395w-23) is
amended--
(1) in subsection (k)--
(A) in paragraph (1)--
(i) in the matter preceding subparagraph (A),
by striking ``paragraphs (2) and (4)'' and
inserting ``paragraphs (2), (4), and (5)''; and
(ii) in subparagraph (B)(i), by striking
``paragraphs (2) and (4)'' and inserting
``paragraphs (2), (4), and (5)''; and
(B) by adding at the end the following new paragraph:
``(5) Exclusion of costs for kidney acquisitions from
capitation rates.--After determining the applicable amount for
an area for a year under paragraph (1) (beginning with 2019),
the Secretary shall adjust such applicable amount to exclude
from such applicable amount the Secretary's estimate of the
standardized costs for payments for organ acquisitions for
kidney transplants covered under this title (including expenses
covered under section 1881(d)) in the area for the year.''; and
(2) in subsection (n)(2)--
(A) in subparagraph (A)(i), by inserting ``and, for
2019 and subsequent years, the exclusion of payments
for organ acquisitions for kidney transplants from the
capitation rate as described in subsection (k)(5)''
before the semicolon at the end;
(B) in subparagraph (E), in the matter preceding
clause (i), by striking ``subparagraph (F)'' and
inserting ``subparagraphs (F) and (G)''; and
(C) by adding at the end the following new
subparagraph:
``(G) Application of kidney acquisitions
adjustment.--The base payment amount specified in
subparagraph (E) for a year (beginning with 2019) shall
be adjusted in the same manner under paragraph (5) of
subsection (k) as the applicable amount is adjusted
under such subsection.''.
(c) FFS Coverage of Kidney Acquisitions.--
(1) In general.--Section 1852(a)(1)(B)(i) of the Social
Security Act (42 U.S.C. 1395w-22(a)(1)(B)(i)) is amended by
inserting ``or coverage for organ acquisitions for kidney
transplants, including as covered under section 1881(d)'' after
``hospice care''.
(2) Conforming amendment.--Section 1851(i) of the Social
Security Act (42 U.S.C. 1395w-21(i)) is amended by adding at
the end the following new paragraph:
``(3) FFS payment for expenses for kidney acquisitions.--
Paragraphs (1) and (2) do not apply with respect to expenses
for organ acquisitions for kidney transplants described in
section 1852(a)(1)(B)(i).''.
(d) Sense of Congress Regarding Application of Appropriate Medicare
Advantage Risk Adjustment for Payment for Increased ESRD Enrollees.--It
is the sense of Congress that in implementing the policies under this
section, the Centers for Medicare & Medicaid Services should provide,
in an accurate and transparent manner, for risk adjustment to payment
under the Medicare Advantage program to account for the increased
enrollment in Medicare Advantage plans of individuals with end-stage
renal disease.
(e) Expanded MA Education.--Section 1851(d)(2)(A)(iii) of the Social
Security Act (42 U.S.C. 1395w-21(d)(2)(A)(iii)) is amended by inserting
before the period at the end the following: ``, including any
additional information that individuals determined to have end-stage
renal disease may need to make informed decisions with respect to such
an election''.
(f) Report.--Not later than April 1, 2022, the Administrator of the
Centers for Medicare & Medicaid Services shall submit to Congress a
report on the impact of the amendments made by this section on spending
under the traditional Medicare fee-for-service program under parts A
and B of title XVIII of the Social Security Act as well as on spending
under parts C and D of such title. The report shall include an
assessment of the risk adjustment payment methodologies under such
parts C and D and their adequacy with respect to individuals with end-
stage renal disease and such recommendations as the Administrator deems
appropriate.
(g) Effective Date.--The amendments made by this section shall apply
to plans years beginning on or after January 1, 2020.
I. SUMMARY AND BACKGROUND
A. Purpose and Summary
The bill, H.R. 5659, the ``Expanding Senior Receiving
Dialysis (ESRD) Choice Act of 2016'' as ordered reported by the
Committee on Ways and Means on July 13, 2016, amends title
XVIII of the Social Security Act with respect to expanding
Medicare Advantage (MA) coverage for individuals with end-stage
renal disease (ESRD).
B. Background and Need for Legislation
On July 7, 2016, Representative Smith (R-MO),
Representative Lewis (D-GA), Representative Bilirakis (R-FL),
Representative Marino (R-PA), and Representative Schrader (D-
OR) introduced H.R. 5659, the ESRD Choice Act of 2016. More
than 640,000 Americans live with kidney failure and are among
the most vulnerable Medicare beneficiaries. The only real
treatments available are kidney transplants, or renal dialysis.
Most individuals with ESRD receive dialysis due to the limited
number of kidneys available for transplantation. The majority
of people with kidney failure rely on Medicare for their
dialysis treatments. This legislation will allow beneficiaries
receiving dialysis access to an MA plan, which has proven
valuable for patients that suffer from multiple chronic
conditions.
Since 2000, the Medicare Payment Advisory Commission has
regularly advised Congress to eliminate the unfair MA
enrollment prohibition. The Committee believes that the
expansion of MA to be a whole benefit is an important step
towards achieving a high quality sustainable Medicare program.
C. Legislative History
Background
H.R. 5659 was introduced on July 7, 2016, and was referred
to the Committee on Ways and Means and additionally to the
Committee on Energy and Commerce.
Committee Hearings
On July 24, 2014, the Committee on Ways and Means
Subcommittee on Health held a hearing on the status of the MA
program.
On March 16, 2016, the Committee on Ways and Means
Subcommittee on Health held a hearing on Preserving and
Strengthening Medicare, including the MA program.
Committee Action
The Committee on Ways and Means marked up H.R. 5659, the
ESRD Choice Act of 2016, on July 13, 2016, and ordered the bill
favorably reported to the House of Representatives as amended
by a voice vote (with a quorum being present).
II. EXPLANATION OF THE BILL
``Expanding Seniors Receiving Dialysis (ESRD) Choice Act of 2016''
PRESENT LAW
Current law does not allow beneficiaries that suffer from
kidney failure prior to choosing a managed care plan under the
MA program to leave fee-for-service and choose an MA plan.
EXPLANATION OF PROVISIONS
This legislation would remove the current restrictions on
ESRD beneficiaries that prevent them from switching into a
managed care MA plan by lifting the statutory restriction on
Medicare beneficiaries who suffer from end-stage renal disease
from enrolling in an MA plan.
The legislation removes the current financial add-on that
MA plans receive per member per month in the benchmark that
currently exists to account for costs associated with kidney
acquisition in the case of a kidney transplant. Consequently,
the legislation removes the kidney acquisition costs from MA
altogether, streamlining the transplant process across
Medicare. Additionally, it requires the Centers for Medicare
and Medicaid Services (CMS) to provide a report to Congress by
2022 regarding the effects of this legislation on spending and
the risk adjusted payments to MA plans, including
recommendations as deemed appropriate by the Administrator.
The amendment in the nature of a substitute added a sense
of Congress that CMS properly risk adjust payments to plans, in
an accurate and transparent manner, for the additional
beneficiaries through the implementation of this legislation.
REASONS FOR CHANGE
Currently, more than 640,000 Americans live with kidney
failure, known as ESRD. ESRD beneficiaries are among the most
vulnerable and kidney failure affects Americans of all ages.
The only real treatments available are kidney transplants or
renal dialysis, with most individuals receiving dialysis. The
overwhelming majority of people with kidney failure, regardless
of their age, rely on Medicare for their life sustaining
dialysis treatments.
MA offers better coordinated and integrated care,
flexibility, and financial protections for beneficiaries, but
ESRD patients are the only group of beneficiaries specifically
denied enrollment in MA plans. MA includes integrated care
models that allow plans the flexibility to distribute clinical
resources to address unique patient needs. Integrated managed
care models have shown to be valuable tools for patients that
suffer from multiple chronic conditions. Low-income Medicare
beneficiaries also enjoy the benefits of MA's maximum out-of-
pocket cost that protects beneficiaries from catastrophic
health care costs.
EFFECTIVE DATE
The bill would take effect beginning in 2020.
III. VOTES OF THE COMMITTEE
In compliance with clause 3(b) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the vote of the Committee on Ways and Means in its
consideration of H.R. 5659, the ``Expanding Seniors Receiving
Dialysis Choice Act of 2016,'' on July 13, 2016.
The bill, H.R. 5659, was ordered favorably reported as
amended by voice vote (with a quorum being present).
IV. BUDGET EFFECTS OF THE BILL
A. Committee Estimate of Budgetary Effects
In compliance with clause 3(d) of rule XIII of the Rules of
the House of Representatives, the following statement is made
concerning the effects on the budget of the bill, H.R. 5659, as
reported. The Committee agrees with the estimate prepared by
the Congressional Budget Office (CBO), which is included below.
B. Statement Regarding New Budget Authority and Tax Expenditures Budget
Authority
In compliance with clause 3(c)(2) of rule XIII of the Rules
of the House of Representatives, the Committee states that the
bill involves no new or increased budget authority. The
Committee states further that the bill involves no new or
increased tax expenditures.
C. Cost Estimate Prepared by the Congressional Budget Office
In compliance with clause 3(c)(3) of rule XIII of the Rules
of the House of Representatives, requiring a cost estimate
prepared by the CBO, the following statement by CBO is
provided.
U.S. Congress,
Congressional Budget Office,
Washington, DC, July 21, 2016.
Hon. Kevin Brady,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
Dear Mr. Chairman: The Congressional Budget Office has
prepared the enclosed cost estimate for H.R. 5659, the
Expanding Seniors Receiving Dialysis Choice Act of 2016.
If you wish further details on this estimate, we will be
pleased to provide them. The CBO staff contact is Paul Masi.
Sincerely,
Keith Hall.
Enclosure.
H.R. 5659--Expanding Seniors Receiving Dialysis Choice Act of 2016
Under current law, beneficiaries who develop End-Stage
Renal Disease (ESRD) while enrolled in a Medicare Advantage
(MA) plan may remain in that plan. However, Medicare
beneficiaries are prohibited from enrolling in an MA plan after
they have developed ESRD, and must stay in the fee-for-service
portion of the Medicare program. H.R. 5659 would eliminate that
prohibition, beginning in January 2020.
For beneficiaries with ESRD, Medicare currently pays MA
plans an amount equal to the statewide average cost of treating
such beneficiaries in the fee-for-service portion of Medicare,
and would continue to do so under H.R. 5659. That methodology
is designed to pay similar amounts regardless of whether
beneficiaries are in fee-for-service or an MA plan. In CBO's
judgement, that system, on average, is effective at achieving
parity in payment between the two sectors. For beneficiaries
who would newly enroll in MA plans under H.R. 5659, CBO
estimates that, on average, payments to MA plans would be equal
to the spending that otherwise would have occurred for those
beneficiaries in the fee-for-service portion of Medicare. Thus,
the budgetary effect of enacting this provision would be
negligible.
The bill would also transfer responsibility for the costs
of acquiring organs for kidney transplants from MA plans to the
fee-for-service portion of Medicare. Payments to MA plans would
be adjusted to reflect that shift. Thus, CBO estimates that
this provision would not have a significant effect on federal
spending.
Because enacting H.R. 5659 would affect direct spending,
pay-as-you-go procedures apply; however CBO estimates that
effects would be negligible over the 2017-2026 period. CBO
estimates that enacting H.R. 5659 would not increase net direct
spending or on-budget deficits in any of the four consecutive
10-year periods beginning in 2027.
H.R. 5659 contains no intergovernmental or private-sector
mandates as defined in the Unfunded Mandates Reform Act.
The CBO staff contact for this estimate is Paul Masi. The
estimate was approved by Holly Harvey, Deputy Assistant
Director for Budget Analysis.
V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE
A. Committee Oversight Findings and Recommendation
With respect to clause 3(c)(1) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
findings and recommendations of the Committee, based on
oversight activities under clause 2(b)(1) of rule X of the
Rules of the House of Representatives, are incorporated in the
descriptive portions of this report.
B. Statement of General Performance Goals and Objectives
With respect to clause 3(c)(4) of rule XIII of the Rules of
the House of Representatives, the Committee advises that the
bill contains no measure that authorizes funding, so no
statement of general performance goals and objectives for which
any measure authorizes funding is required.
C. Information Relating to Unfunded Mandates
This information is provided in accordance with section 423
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
The Committee has determined that the bill does not contain
Federal mandates on the private sector. The Committee has
determined that the bill does not impose a Federal
intergovernmental mandate on State, local, or tribal
governments.
D. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff
Benefits
With respect to clause 9 of rule XXI of the Rules of the
House of Representatives, the Committee has carefully reviewed
the provisions of the bill, and states that the provisions of
the bill do not contain any congressional earmarks, limited tax
benefits, or limited tariff benefits within the meaning of the
rule.
E. Duplication of Federal Programs
In compliance with Sec. 3(g)(2) of H. Res. 5 (114th
Congress), the Committee states that no provision of the bill
establishes or reauthorizes: (1) a program of the Federal
Government known to be duplicative of another Federal program;
(2) a program included in any report from the Government
Accountability Office to Congress pursuant to section 21 of
Public Law 111-139; or (3) a program related to a program
identified in the most recent Catalog of Federal Domestic
Assistance, published pursuant to the Federal Program
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No.
98-169).
F. Disclosure of Directed Rule Makings
In compliance with Sec. 3(i) of H. Res. 5 (114th Congress),
the following statement is made concerning directed rule
makings: The Committee estimates that the bill requires no
directed rule makings within the meaning of such section.
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED
A. Text of Existing Law Amended or Repealed by the Bill, as Reported
In compliance with clause 3(e)(1)(A) of rule XIII of the
Rules of the House of Representatives, the text of each section
proposed to be amended or repealed by the bill, as reported, is
shown below:
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e)(1)(A) of rule XIII of the
Rules of the House of Representatives, the text of each section
proposed to be amended or repealed by the bill, as reported, is
shown below:
SOCIAL SECURITY ACT
* * * * * * *
TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND DISABLED
* * * * * * *
Part C--Medicare+Choice Program
eligibility, election, and enrollment
Sec. 1851. (a) Choice of Medicare Benefits Through
Medicare+Choice Plans.--
(1) In general.--Subject to the provisions of this
section, each Medicare+Choice eligible individual (as
defined in paragraph (3)) is entitled to elect to
receive benefits (other than qualified prescription
drug benefits) under this title--
(A) through the original medicare fee-for-
service program under parts A and B, or
(B) through enrollment in a Medicare+Choice
plan under this part,
and may elect qualified prescription drug coverage in
accordance with section 1860D-1.
(2) Types of medicare+choice plans that may be
available.--A Medicare+Choice plan may be any of the
following types of plans of health insurance:
(A) Coordinated care plans (including
regional plans).--
(i) In general.--Coordinated care
plans which provide health care
services, including but not limited to
health maintenance organization plans
(with or without point of service
options), plans offered by provider-
sponsored organizations (as defined in
section 1855(d)), and regional or local
preferred provider organization plans
(including MA regional plans).
(ii) Specialized ma plans for special
needs individuals.--Specialized MA
plans for special needs individuals (as
defined in section 1859(b)(6)) may be
any type of coordinated care plan.
(B) Combination of msa plan and contributions
to medicare+choice msa.--An MSA plan, as
defined in section 1859(b)(3), and a
contribution into a Medicare+Choice medical
savings account (MSA).
(C) Private fee-for-service plans.--A
Medicare+Choice private fee-for-service plan,
as defined in section 1859(b)(2).
(3) Medicare+choice eligible individual.--
(A) In general.--In this title, subject to
subparagraph (B), the term ``Medicare+Choice
eligible individual'' means an individual who
is entitled to benefits under part A and
enrolled under part B.
(B) Special rule for end-stage renal
disease.--Such term shall not include an
individual medically determined to have end-
stage renal disease, except that--
(i) an individual who develops end-
stage renal disease while enrolled in a
Medicare+Choice plan may continue to be
enrolled in that plan; and
(ii) in the case of such an
individual who is enrolled in a
Medicare+Choice plan under clause (i)
(or subsequently under this clause), if
the enrollment is discontinued under
circumstances described in subsection
(e)(4)(A), then the individual will be
treated as a ``Medicare+Choice eligible
individual'' for purposes of electing
to continue enrollment in another
Medicare+Choice plan.
An individual who develops end-stage renal
disease while enrolled in a reasonable cost
reimbursement contract under section 1876(h)
shall be treated as an MA eligible individual
for purposes of applying the deemed enrollment
under subsection (c)(4).
(b) Special Rules.--
(1) Residence requirement.--
(A) In general.--Except as the Secretary may
otherwise provide and except as provided in
subparagraph (C), an individual is eligible to
elect a Medicare+Choice plan offered by a
Medicare+Choice organization only if the plan
serves the geographic area in which the
individual resides.
(B) Continuation of enrollment permitted.--
Pursuant to rules specified by the Secretary,
the Secretary shall provide thatan MA local
plan may offer to all individuals residing in a
geographic area the option to continue
enrollment in the plan, notwithstanding that
the individual no longer resides in the service
area of the plan, so long as the plan provides
that individuals exercising this option have,
as part of the benefits under the original
medicare fee-for-service program option,
reasonable access within that geographic area
to the full range of basic benefits, subject to
reasonable cost sharing liability in obtaining
such benefits.
(C) Continuation of enrollment permitted
where service changed.--Notwithstanding
subparagraph (A) and in addition to
subparagraph (B), if a Medicare+Choice
organization eliminates from its service area a
Medicare+Choice payment area that was
previously within its service area, the
organization may elect to offer individuals
residing in all or portions of the affected
area who would otherwise be ineligible to
continue enrollment the option to continue
enrollment in an MA local plan it offers so
long as--
(i) the enrollee agrees to receive
the full range of basic benefits
(excluding emergency and urgently
needed care) exclusively at facilities
designated by the organization within
the plan service area; and
(ii) there is no other
Medicare+Choice plan offered in the
area in which the enrollee resides at
the time of the organization's
election.
(2) Special rule for certain individuals covered
under fehbp or eligible for veterans or military health
benefits, veterans.--
(A) FEHBP.--An individual who is enrolled in
a health benefit plan under chapter 89 of title
5, United States Code, is not eligible to
enroll in an MSA plan until such time as the
Director of the Office of Management and Budget
certifies to the Secretary that the Office of
Personnel Management has adopted policies which
will ensure that the enrollment of such
individuals in such plans will not result in
increased expenditures for the Federal
Government for health benefit plans under such
chapter.
(B) VA and dod.--The Secretary may apply
rules similar to the rules described in
subparagraph (A) in the case of individuals who
are eligible for health care benefits under
chapter 55 of title 10, United States Code, or
under chapter 17 of title 38 of such Code.
(3) Limitation on eligibility of qualified medicare
beneficiaries and other medicaid beneficiaries to
enroll in an msa plan.--An individual who is a
qualified medicare beneficiary (as defined in section
1905(p)(1)), a qualified disabled and working
individual (described in section 1905(s)), an
individual described in section 1902(a)(10)(E)(iii), or
otherwise entitled to medicare cost-sharing under a
State plan under title XIX is not eligible to enroll in
an MSA plan.
(4) Coverage under msa plans.--
(A) In general.--Under rules established by
the Secretary, an individual is not eligible to
enroll (or continue enrollment) in an MSA plan
for a year unless the individual provides
assurances satisfactory to the Secretary that
the individual will reside in the United States
for at least 183 days during the year.
(B) Evaluation.--The Secretary shall
regularly evaluate the impact of permitting
enrollment in MSA plans under this part on
selection (including adverse selection), use of
preventive care, access to care, and the
financial status of the Trust Funds under this
title.
(C) Reports.--The Secretary shall submit to
Congress periodic reports on the numbers of
individuals enrolled in such plans and on the
evaluation being conducted under subparagraph
(B).
(c) Process for Exercising Choice.--
(1) In general.--The Secretary shall establish a
process through which elections described in subsection
(a) are made and changed, including the form and manner
in which such elections are made and changed. Subject
to paragraph (4), such elections shall be made or
changed only during coverage election periods specified
under subsection (e) and shall become effective as
provided in subsection (f).
(2) Coordination through medicare+choice
organizations.--
(A) Enrollment.--Such process shall permit an
individual who wishes to elect a
Medicare+Choice plan offered by a
Medicare+Choice organization to make such
election through the filing of an appropriate
election form with the organization.
(B) Disenrollment.--Such process shall permit
an individual, who has elected a
Medicare+Choice plan offered by a
Medicare+Choice organization and who wishes to
terminate such election, to terminate such
election through the filing of an appropriate
election form with the organization.
(3) Default.--
(A) Initial election.--
(i) In general.--Subject to clause
(ii), an individual who fails to make
an election during an initial election
period under subsection (e)(1) is
deemed to have chosen the original
medicare fee-for-service program
option.
(ii) Seamless continuation of
coverage.--The Secretary may establish
procedures under which an individual
who is enrolled in a health plan (other
than Medicare+Choice plan) offered by a
Medicare+Choice organization at the
time of the initial election period and
who fails to elect to receive coverage
other than through the organization is
deemed to have elected the
Medicare+Choice plan offered by the
organization (or, if the organization
offers more than one such plan, such
plan or plans as the Secretary
identifies under such procedures).
(B) Continuing periods.--An individual who
has made (or is deemed to have made) an
election under this section is considered to
have continued to make such election until such
time as--
(i) the individual changes the
election under this section, or
(ii) the Medicare+Choice plan with
respect to which such election is in
effect is discontinued or, subject to
subsection (b)(1)(B), no longer serves
the area in which the individual
resides.
(4) Deemed enrollment relating to converted
reasonable cost reimbursement contracts.--
(A) In general.--On the first day of the
annual, coordinated election period under
subsection (e)(3) for plan years beginning on
or after January 1, 2017, an MA eligible
individual described in clause (i) or (ii) of
subparagraph (B) is deemed, unless the
individual elects otherwise, to have elected to
receive benefits under this title through an
applicable MA plan (and shall be enrolled in
such plan) beginning with such plan year, if--
(i) the individual is enrolled in a
reasonable cost reimbursement contract
under section 1876(h) in the previous
plan year;
(ii) such reasonable cost
reimbursement contract was extended or
renewed for the last reasonable cost
reimbursement contract year of the
contract (as described in subclause (I)
of section 1876(h)(5)(C)(iv)) pursuant
to such section;
(iii) the eligible organization that
is offering such reasonable cost
reimbursement contract provided the
notice described in subclause (III) of
such section that the contract was to
be converted;
(iv) the applicable MA plan--
(I) is the plan that was
converted from the reasonable
cost reimbursement contract
described in clause (iii);
(II) is offered by the same
entity (or an organization
affiliated with such entity
that has a common ownership
interest of control) that
entered into such contract; and
(III) is offered in the
service area where the
individual resides;
(v) in the case of reasonable cost
reimbursement contracts that provide
coverage under parts A and B (and, to
the extent the Secretary determines it
to be feasible, contracts that provide
only part B coverage), the difference
between the estimated individual costs
(as determined applicable by the
Secretary) for the applicable MA plan
and such costs for the predecessor cost
plan does not exceed a threshold
established by the Secretary; and
(vi) the applicable MA plan--
(I) provides coverage for
enrollees transitioning from
the converted reasonable cost
reimbursement contract to such
plan to maintain current
providers of services and
suppliers and course of
treatment at the time of
enrollment for a period of at
least 90 days after enrollment;
and
(II) during such period, pays
such providers of services and
suppliers for items and
services furnished to the
enrollee an amount that is not
less than the amount of payment
applicable for such items and
services under the original
Medicare fee-for-service
program under parts A and B.
(B) MA eligible individuals described.--
(i) Without prescription drug
coverage.--An MA eligible individual
described in this clause, with respect
to a plan year, is an MA eligible
individual who is enrolled in a
reasonable cost reimbursement contract
under section 1876(h) in the previous
plan year and who is not, for such
previous plan year, enrolled in a
prescription drug plan under part D,
including coverage under section 1860D-
22.
(ii) With prescription drug
coverage.--An MA eligible individual
described in this clause, with respect
to a plan year, is an MA eligible
individual who is enrolled in a
reasonable cost reimbursement contract
under section 1876(h) in the previous
plan year and who, for such previous
plan year, is enrolled in a
prescription drug plan under part D--
(I) through such contract; or
(II) through a prescription
drug plan, if the sponsor of
such plan is the same entity
(or an organization affiliated
with such entity) that entered
into such contract.
(C) Applicable ma plan defined.--In this
paragraph, the term ``applicable MA plan''
means, in the case of an individual described
in--
(i) subparagraph (B)(i), an MA plan
that is not an MA-PD plan; and
(ii) subparagraph (B)(ii), an MA-PD
plan.
(D) Identification and notification of deemed
individuals.--Not later than 45 days before the
first day of the annual, coordinated election
period under subsection (e)(3) for plan years
beginning on or after January 1, 2017, the
Secretary shall identify and notify the
individuals who will be subject to deemed
elections under subparagraph (A) on the first
day of such period.
(d) Providing Information To Promote Informed Choice.--
(1) In general.--The Secretary shall provide for
activities under this subsection to broadly disseminate
information to medicare beneficiaries (and prospective
medicare beneficiaries) on the coverage options
provided under this section in order to promote an
active, informed selection among such options.
(2) Provision of notice.--
(A) Open season notification.--At least 15
days before the beginning of each annual,
coordinated election period (as defined in
subsection (e)(3)(B)), the Secretary shall mail
to each Medicare+Choice eligible individual
residing in an area the following:
(i) General information.--The general
information described in paragraph (3).
(ii) List of plans and comparison of
plan options.--A list identifying the
Medicare+Choice plans that are (or will
be) available to residents of the area
and information described in paragraph
(4) concerning such plans. Such
information shall be presented in a
comparative form.
(iii) Additional information.--Any
other information that the Secretary
determines will assist the individual
in making the election under this
section.
The mailing of such information shall be
coordinated, to the extent practicable, with
the mailing of any annual notice under section
1804.
(B) Notification to newly eligible
medicare+choice eligible individuals.--To the
extent practicable, the Secretary shall, not
later than 30 days before the beginning of the
initial Medicare+Choice enrollment period for
an individual described in subsection (e)(1),
mail to the individual the information
described in subparagraph (A).
(ii) Notification related to certain
deemed elections.--The Secretary shall
require a Medicare Advantage
organization that is offering a
Medicare Advantage plan that has been
converted from a reasonable cost
reimbursement contract pursuant to
section 1876(h)(5)(C)(iv) to mail, not
later than 30 days prior to the first
day of the annual, coordinated election
period under subsection (e)(3) of a
year, to any individual enrolled under
such contract and identified by the
Secretary under subsection (c)(4)(D)
for such year--
(I) a notification that such
individual will, on such day,
be deemed to have made an
election with respect to such
plan to receive benefits under
this title through an MA plan
or MA-PD plan (and shall be
enrolled in such plan) for the
next plan year under subsection
(c)(4)(A), but that the
individual may make a different
election during the annual,
coordinated election period for
such year;
(II) the information
described in subparagraph (A);
(III) a description of the
differences between such MA
plan or MA-PD plan and the
reasonable cost reimbursement
contract in which the
individual was most recently
enrolled with respect to
benefits covered under such
plans, including cost-sharing,
premiums, drug coverage, and
provider networks;
(IV) information about the
special period for elections
under subsection (e)(2)(F); and
(V) other information the
Secretary may specify.
(C) Form.--The information disseminated under
this paragraph shall be written and formatted
using language that is easily understandable by
medicare beneficiaries.
(D) Periodic updating.--The information
described in subparagraph (A) shall be updated
on at least an annual basis to reflect changes
in the availability of Medicare+Choice plans
and the benefits and Medicare+Choice monthly
basic and supplemental beneficiary premiums for
such plans.
(3) General information.--General information under
this paragraph, with respect to coverage under this
part during a year, shall include the following:
(A) Benefits under original medicare fee-for-
service program option.--A general description
of the benefits covered under the original
medicare fee-for-service program under parts A
and B, including--
(i) covered items and services,
(ii) beneficiary cost sharing, such
as deductibles, coinsurance, and
copayment amounts, and
(iii) any beneficiary liability for
balance billing.
(B) Election procedures.--Information and
instructions on how to exercise election
options under this section.
(C) Rights.--A general description of
procedural rights (including grievance and
appeals procedures) of beneficiaries under the
original medicare fee-for-service program and
the Medicare+Choice program and the right to be
protected against discrimination based on
health status-related factors under section
1852(b).
(D) Information on medigap and medicare
select.--A general description of the benefits,
enrollment rights, and other requirements
applicable to medicare supplemental policies
under section 1882 and provisions relating to
medicare select policies described in section
1882(t).
(E) Potential for contract termination.--The
fact that a Medicare+Choice organization may
terminate its contract, refuse to renew its
contract, or reduce the service area included
in its contract, under this part, and the
effect of such a termination, nonrenewal, or
service area reduction may have on individuals
enrolled with the Medicare+Choice plan under
this part.
(F) Catastrophic coverage and single
deductible.--In the case of an MA regional
plan, a description of the catastrophic
coverage and single deductible applicable under
the plan.
(4) Information comparing plan options.--Information
under this paragraph, with respect to a Medicare+Choice
plan for a year, shall include the following:
(A) Benefits.--The benefits covered under the
plan, including the following:
(i) Covered items and services beyond
those provided under the original
medicare fee-for-service program.
(ii) Any beneficiary cost sharing,
including information on the single
deductible (if applicable) under
section 1858(b)(1).
(iii) Any maximum limitations on out-
of-pocket expenses.
(iv) In the case of an MSA plan,
differences in cost sharing, premiums,
and balance billing under such a plan
compared to under other Medicare+Choice
plans.
(v) In the case of a Medicare+Choice
private fee-for-service plan,
differences in cost sharing, premiums,
and balance billing under such a plan
compared to under other Medicare+Choice
plans.
(vi) The extent to which an enrollee
may obtain benefits through out-of-
network health care providers.
(vii) The extent to which an enrollee
may select among in-network providers
and the types of providers
participating in the plan's network.
(viii) The organization's coverage of
emergency and urgently needed care.
(B) Premiums.--
(i) In general.--The monthly amount
of the premium charged to an
individual.
(ii) Reductions.--The reduction in
part B premiums, if any.
(C) Service area.--The service area of the
plan.
(D) Quality and performance.--To the extent
available, plan quality and performance
indicators for the benefits under the plan (and
how they compare to such indicators under the
original medicare fee-for-service program under
parts A and B in the area involved),
including--
(i) disenrollment rates for medicare
enrollees electing to receive benefits
through the plan for the previous 2
years (excluding disenrollment due to
death or moving outside the plan's
service area),
(ii) information on medicare enrollee
satisfaction,
(iii) information on health outcomes,
and
(iv) the recent record regarding
compliance of the plan with
requirements of this part (as
determined by the Secretary).
(E) Supplemental benefits.--Supplemental
health care benefits, including any reductions
in cost-sharing under section 1852(a)(3) and
the terms and conditions (including premiums)
for such benefits.
(5) Maintaining a toll-free number and internet
site.--The Secretary shall maintain a toll-free number
for inquiries regarding Medicare+Choice options and the
operation of this part in all areas in which
Medicare+Choice plans are offered and an Internet site
through which individuals may electronically obtain
information on such options and Medicare+Choice plans.
(6) Use of non-federal entities.--The Secretary may
enter into contracts with non-Federal entities to carry
out activities under this subsection.
(7) Provision of information.--A Medicare+Choice
organization shall provide the Secretary with such
information on the organization and each
Medicare+Choice plan it offers as may be required for
the preparation of the information referred to in
paragraph (2)(A).
(e) Coverage Election Periods.--
(1) Initial choice upon eligibility to make election
if medicare+choice plans available to individual.--If,
at the time an individual first becomes entitled to
benefits under part A and enrolled under part B, there
is one or more Medicare+Choice plans offered in the
area in which the individual resides, the individual
shall make the election under this section during a
period specified by the Secretary such that if the
individual elects a Medicare+Choice plan during the
period, coverage under the plan becomes effective as of
the first date on which the individual may receive such
coverage. If any portion of an individual's initial
enrollment period under part B occurs after the end of
the annual, coordinated election period described in
paragraph (3)(B)(iii), the initial enrollment period
under this part shall further extend through the end of
the individual's initial enrollment period under part
B.
(2) Open enrollment and disenrollment
opportunities.--Subject to paragraph (5)--
(A) Continuous open enrollment and
disenrollment through 2005.--At any time during
the period beginning January 1, 1998, and
ending on December 31, 2005, a Medicare+Choice
eligible individual may change the election
under subsection (a)(1).
(B) Continuous open enrollment and
disenrollment for first 6 months during 2006.--
(i) In general.--Subject to clause
(ii), subparagraph(C)(iii), and
subparagraph (D), at any time during
the first 6 months of 2006, or, if the
individual first becomes a
Medicare+Choice eligible individual
during 2006, during the first 6 months
during 2006 in which the individual is
a Medicare+Choice eligible individual,
a Medicare+Choice eligible individual
may change the election under
subsection (a)(1).
(ii) Limitation of one change.--An
individual may exercise the right under
clause (i) only once. The limitation
under this clause shall not apply to
changes in elections effected during an
annual, coordinated election period
under paragraph (3) or during a special
enrollment period under the first
sentence of paragraph (4).
(C) Annual 45-day period for disenrollment
from ma plans to elect to receive benefits
under the original medicare fee-for-service
program.--Subject to subparagraph (D), at any
time during the first 45 days of a year
(beginning with 2011), an individual who is
enrolled in a Medicare Advantage plan may
change the election under subsection (a)(1),
but only with respect to coverage under the
original medicare fee-for-service program under
parts A and B, and may elect qualified
prescription drug coverage in accordance with
section 1860D-1.
(D) Continuous open enrollment for
institutionalized individuals.--At any time
after 2005 in the case of a Medicare+Choice
eligible individual who is institutionalized
(as defined by the Secretary), the individual
may elect under subsection (a)(1)--
(i) to enroll in a Medicare+Choice
plan; or
(ii) to change the Medicare+Choice
plan in which the individual is
enrolled.
(E) Limited continuous open enrollment of
original fee-for-service enrollees in medicare
advantage non-prescription drug plans.--
(i) In general.--On any date during
the period beginning on January 1,
2007, and ending on July 31, 2007, on
which a Medicare Advantage eligible
individual is an unenrolled fee-for-
service individual (as defined in
clause (ii)), the individual may elect
under subsection (a)(1) to enroll in a
Medicare Advantage plan that is not an
MA-PD plan.
(ii) Unenrolled fee-for-service
individual defined.--In this
subparagraph, the term ``unenrolled
fee-for-service individual'' means,
with respect to a date, a Medicare
Advantage eligible individual who--
(I) is receiving benefits
under this title through
enrollment in the original
medicare fee-for-service
program under parts A and B;
(II) is not enrolled in an MA
plan on such date; and
(III) as of such date is not
otherwise eligible to elect to
enroll in an MA plan.
(iii) Limitation of one change during
the applicable period.--An individual
may exercise the right under clause (i)
only once during the period described
in such clause.
(iv) No effect on coverage under a
prescription drug plan.--Nothing in
this subparagraph shall be construed as
permitting an individual exercising the
right under clause (i)--
(I) who is enrolled in a
prescription drug plan under
part D, to disenroll from such
plan or to enroll in a
different prescription drug
plan; or
(II) who is not enrolled in a
prescription drug plan, to
enroll in such a plan.
(F) Special period for certain deemed
elections.--
(i) In general.--At any time during
the period beginning after the last day
of the annual, coordinated election
period under paragraph (3) in which an
individual is deemed to have elected to
enroll in an MA plan or MA-PD plan
under subsection (c)(4) and ending on
the last day of February of the first
plan year for which the individual is
enrolled in such plan, such individual
may change the election under
subsection (a)(1) (including changing
the MA plan or MA-PD plan in which the
individual is enrolled).
(ii) Limitation of one change.--An
individual may exercise the right under
clause (i) only once during the
applicable period described in such
clause. The limitation under this
clause shall not apply to changes in
elections effected during an annual,
coordinated election period under
paragraph (3) or during a special
enrollment period under paragraph (4).
(3) Annual, coordinated election period.--
(A) In general.--Subject to paragraph (5),
each individual who is eligible to make an
election under this section may change such
election during an annual, coordinated election
period.
(B) Annual, coordinated election period.--For
purposes of this section, the term ``annual,
coordinated election period'' means--
(i) with respect to a year before
2002, the month of November before such
year;
(ii) with respect to 2002, 2003,
2004, and 2005, the period beginning on
November 15 and ending on December 31
of the year before such year;
(iii) with respect to 2006, the
period beginning on November 15, 2005,
and ending on May 15, 2006;
(iv) with respect to 2007, 2008,
2009, and 2010, the period beginning on
November 15 and ending on December 31
of the year before such year; and
(v) with respect to 2012 and
succeeding years, the period beginning
on October 15 and ending on December 7
of the year before such year.
(C) Medicare+choice health information
fairs.--During the fall season of each year
(beginning with 1999) and during the period
described in subparagraph (B)(iii), in
conjunction with the annual coordinated
election period defined in subparagraph (B),
the Secretary shall provide for a nationally
coordinated educational and publicity campaign
to inform Medicare+Choice eligible individuals
about Medicare+Choice plans and the election
process provided under this section.
(D) Special information campaigns.--During
November 1998 the Secretary shall provide for
an educational and publicity campaign to inform
Medicare+Choice eligible individuals about the
availability of Medicare+Choice plans, and
eligible organizations with risk-sharing
contracts under section 1876, offered in
different areas and the election process
provided under this section. During the period
described in subparagraph (B)(iii), the
Secretary shall provide for an educational and
publicity campaign to inform MA eligible
individuals about the availability of MA plans
(including MA-PD plans) offered in different
areas and the election process provided under
this section.
(4) Special election periods.--Effective as of
January 1, 2006, an individual may discontinue an
election of a Medicare+Choice plan offered by a
Medicare+Choice organization other than during an
annual, coordinated election period and make a new
election under this section if--
(A)(i) the certification of the organization
or plan under this part has been terminated, or
the organization or plan has notified the
individual of an impending termination of such
certification; or
(ii) the organization has terminated or
otherwise discontinued providing the plan in
the area in which the individual resides, or
has notified the individual of an impending
termination or discontinuation of such plan;
(B) the individual is no longer eligible to
elect the plan because of a change in the
individual's place of residence or other change
in circumstances (specified by the Secretary,
but not including termination of the
individual's enrollment on the basis described
in clause (i) or (ii) of subsection (g)(3)(B));
(C) the individual demonstrates (in
accordance with guidelines established by the
Secretary) that--
(i) the organization offering the
plan substantially violated a material
provision of the organization's
contract under this part in relation to
the individual (including the failure
to provide an enrollee on a timely
basis medically necessary care for
which benefits are available under the
plan or the failure to provide such
covered care in accordance with
applicable quality standards); or
(ii) the organization (or an agent or
other entity acting on the
organization's behalf) materially
misrepresented the plan's provisions in
marketing the plan to the individual;
or
(D) the individual meets such other
exceptional conditions as the Secretary may
provide.
Effective as of January 1, 2006, an individual who,
upon first becoming eligible for benefits under part A
at age 65, enrolls in a Medicare+Choice plan under this
part, the individual may discontinue the election of
such plan, and elect coverage under the original fee-
for-service plan, at any time during the 12-month
period beginning on the effective date of such
enrollment.
(5) Special rules for msa plans.--Notwithstanding the
preceding provisions of this subsection, an
individual--
(A) may elect an MSA plan only during--
(i) an initial open enrollment period
described in paragraph (1), or
(ii) an annual, coordinated election
period described in paragraph (3)(B);
(B) subject to subparagraph (C), may not
discontinue an election of an MSA plan except
during the periods described in clause (ii) or
(iii) of subparagraph (A) and under the first
sentence of paragraph (4); and
(C) who elects an MSA plan during an annual,
coordinated election period, and who never
previously had elected such a plan, may revoke
such election, in a manner determined by the
Secretary, by not later than December 15
following the date of the election.
(6) Open enrollment periods.--Subject to paragraph
(5), a Medicare+Choice organization--
(A) shall accept elections or changes to
elections during the initial enrollment periods
described in paragraph (1), during the period
described in paragraph (2)(F), during the month
of November 1998 and during the annual,
coordinated election period under paragraph (3)
for each subsequent year, and during special
election periods described in the first
sentence of paragraph (4); and
(B) may accept other changes to elections at
such other times as the organization provides.
(f) Effectiveness of Elections and Changes of Elections.--
(1) During initial coverage election period.--An
election of coverage made during the initial coverage
election period under subsection (e)(1) subsection
(e)(1) shall take effect upon the date the individual
becomes entitled to benefits under part A and enrolled
under part B, except as the Secretary may provide
(consistent with section 1838) in order to prevent
retroactive coverage.
(2) During continuous open enrollment periods.--An
election or change of coverage made under subsection
(e)(2) shall take effect with the first day of the
first calendar month following the date on which the
election or change is made.
(3) Annual, coordinated election period.--An election
or change of coverage made during an annual,
coordinated election period (as defined in subsection
(e)(3)(B), other than the period described in clause
(iii) of such subsection) in a year shall take effect
as of the first day of the following year.
(4) Other periods.--An election or change of coverage
made during any other period under subsection (e)(4)
shall take effect in such manner as the Secretary
provides in a manner consistent (to the extent
practicable) with protecting continuity of health
benefit coverage.
(g) Guaranteed Issue and Renewal.--
(1) In general.--Except as provided in this
subsection, a Medicare+Choice organization shall
provide that at any time during which elections are
accepted under this section with respect to a
Medicare+Choice plan offered by the organization, the
organization will accept without restrictions
individuals who are eligible to make such election.
(2) Priority.--If the Secretary determines that a
Medicare+Choice organization, in relation to a
Medicare+Choice plan it offers, has a capacity limit
and the number of Medicare+Choice eligible individuals
who elect the plan under this section exceeds the
capacity limit, the organization may limit the election
of individuals of the plan under this section but only
if priority in election is provided--
(A) first to such individuals as have elected
the plan at the time of the determination, and
(B) then to other such individuals in such a
manner that does not discriminate, on a basis
described in section 1852(b), among the
individuals (who seek to elect the plan).
The preceding sentence shall not apply if it would
result in the enrollment of enrollees substantially
nonrepresentative, as determined in accordance with
regulations of the Secretary, of the medicare
population in the service area of the plan.
(3) Limitation on termination of election.--
(A) In general.--Subject to subparagraph (B),
a Medicare+Choice organization may not for any
reason terminate the election of any individual
under this section for a Medicare+Choice plan
it offers.
(B) Basis for termination of election.--A
Medicare+Choice organization may terminate an
individual's election under this section with
respect to a Medicare+Choice plan it offers
if--
(i) any Medicare+Choice monthly basic
and supplemental beneficiary premiums
required with respect to such plan are
not paid on a timely basis (consistent
with standards under section 1856 that
provide for a grace period for late
payment of such premiums),
(ii) the individual has engaged in
disruptive behavior (as specified in
such standards), or
(iii) the plan is terminated with
respect to all individuals under this
part in the area in which the
individual resides.
(C) Consequence of termination.--
(i) Terminations for cause.--Any
individual whose election is terminated
under clause (i) or (ii) of
subparagraph (B) is deemed to have
elected the original medicare fee-for-
service program option described in
subsection (a)(1)(A).
(ii) Termination based on plan
termination or service area
reduction.--Any individual whose
election is terminated under
subparagraph (B)(iii) shall have a
special election period under
subsection (e)(4)(A) in which to change
coverage to coverage under another
Medicare+Choice plan. Such an
individual who fails to make an
election during such period is deemed
to have chosen to change coverage to
the original medicare fee-for-service
program option described in subsection
(a)(1)(A).
(D) Organization obligation with respect to
election forms.--Pursuant to a contract under
section 1857, each Medicare+Choice organization
receiving an election form under subsection
(c)(2) shall transmit to the Secretary (at such
time and in such manner as the Secretary may
specify) a copy of such form or such other
information respecting the election as the
Secretary may specify.
(h) Approval of Marketing Material and Application Forms.--
(1) Submission.--No marketing material or application
form may be distributed by a Medicare+Choice
organization to (or for the use of) Medicare+Choice
eligible individuals unless--
(A) at least 45 days (or 10 days in the case
described in paragraph (5)) before the date of
distribution the organization has submitted the
material or form to the Secretary for review,
and
(B) the Secretary has not disapproved the
distribution of such material or form.
(2) Review.--The standards established under section
1856 shall include guidelines for the review of any
material or form submitted and under such guidelines
the Secretary shall disapprove (or later require the
correction of) such material or form if the material or
form is materially inaccurate or misleading or
otherwise makes a material misrepresentation.
(3) Deemed approval (1-stop shopping).--In the case
of material or form that is submitted under paragraph
(1)(A) to the Secretary or a regional office of the
Department of Health and Human Services and the
Secretary or the office has not disapproved the
distribution of marketing material or form under
paragraph (1)(B) with respect to a Medicare+Choice plan
in an area, the Secretary is deemed not to have
disapproved such distribution in all other areas
covered by the plan and organization except with regard
to that portion of such material or form that is
specific only to an area involved.
(4) Prohibition of certain marketing practices.--Each
Medicare+Choice organization shall conform to fair
marketing standards, in relation to Medicare+Choice
plans offered under this part, included in the
standards established under section 1856. Such
standards--
(A) shall not permit a Medicare+Choice
organization to provide for, subject to
subsection (j)(2)(C), cash, gifts, prizes, or
other monetary rebates as an inducement for
enrollment or otherwise;
(B) may include a prohibition against a
Medicare+Choice organization (or agent of such
an organization) completing any portion of any
election form used to carry out elections under
this section on behalf of any individual;
(C) shall not permit a Medicare Advantage
organization (or the agents, brokers, and other
third parties representing such organization)
to conduct the prohibited activities described
in subsection (j)(1); and
(D) shall only permit a Medicare Advantage
organization (and the agents, brokers, and
other third parties representing such
organization) to conduct the activities
described in subsection (j)(2) in accordance
with the limitations established under such
subsection.
(5) Special treatment of marketing material following
model marketing language.--In the case of marketing
material of an organization that uses, without
modification, proposed model language specified by the
Secretary, the period specified in paragraph (1)(A)
shall be reduced from 45 days to 10 days.
(6) Required inclusion of plan type in plan name.--
For plan years beginning on or after January 1, 2010, a
Medicare Advantage organization must ensure that the
name of each Medicare Advantage plan offered by the
Medicare Advantage organization includes the plan type
of the plan (using standard terminology developed by
the Secretary).
(7) Strengthening the ability of states to act in
collaboration with the secretary to address fraudulent
or inappropriate marketing practices.--
(A) Appointment of agents and brokers.--Each
Medicare Advantage organization shall--
(i) only use agents and brokers who
have been licensed under State law to
sell Medicare Advantage plans offered
by the Medicare Advantage organization;
(ii) in the case where a State has a
State appointment law, abide by such
law; and
(iii) report to the applicable State
the termination of any such agent or
broker, including the reasons for such
termination (as required under
applicable State law).
(B) Compliance with state information
requests.--Each Medicare Advantage organization
shall comply in a timely manner with any
request by a State for information regarding
the performance of a licensed agent, broker, or
other third party representing the Medicare
Advantage organization as part of an
investigation by the State into the conduct of
the agent, broker, or other third party.
(i) Effect of Election of Medicare+Choice Plan Option.--
(1) Payments to organizations.--Subject to sections
1852(a)(5), 1853(a)(4), 1853(g), 1853(h), 1886(d)(11),
1886(h)(3)(D), and 1853(m), payments under a contract
with a Medicare+Choice organization under section
1853(a) with respect to an individual electing a
Medicare+Choice plan offered by the organization shall
be instead of the amounts which (in the absence of the
contract) would otherwise be payable under parts A and
B for items and services furnished to the individual.
(2) Only organization entitled to payment.--Subject
to sections 1853(a)(4), 1853(e), 1853(g), 1853(h),
1857(f)(2), 1858(h), 1886(d)(11), and 1886(h)(3)(D),
only the Medicare+Choice organization shall be entitled
to receive payments from the Secretary under this title
for services furnished to the individual.
(j) Prohibited Activities Described and Limitations on the
Conduct of Certain Other Activities.--
(1) Prohibited activities described.--The following
prohibited activities are described in this paragraph:
(A) Unsolicited means of direct contact.--Any
unsolicited means of direct contact of
prospective enrollees, including soliciting
door-to-door or any outbound telemarketing
without the prospective enrollee initiating
contact.
(B) Cross-selling.--The sale of other non-
health related products (such as annuities and
life insurance) during any sales or marketing
activity or presentation conducted with respect
to a Medicare Advantage plan.
(C) Meals.--The provision of meals of any
sort, regardless of value, to prospective
enrollees at promotional and sales activities.
(D) Sales and marketing in health care
settings and at educational events.--Sales and
marketing activities for the enrollment of
individuals in Medicare Advantage plans that
are conducted--
(i) in health care settings in areas
where health care is delivered to
individuals (such as physician offices
and pharmacies), except in the case
where such activities are conducted in
common areas in health care settings;
and
(ii) at educational events.
(2) Limitations.--The Secretary shall establish
limitations with respect to at least the following:
(A) Scope of marketing appointments.--The
scope of any appointment with respect to the
marketing of a Medicare Advantage plan. Such
limitation shall require advance agreement with
a prospective enrollee on the scope of the
marketing appointment and documentation of such
agreement by the Medicare Advantage
organization. In the case where the marketing
appointment is in person, such documentation
shall be in writing.
(B) Co-branding.--The use of the name or logo
of a co-branded network provider on Medicare
Advantage plan membership and marketing
materials.
(C) Limitation of gifts to nominal dollar
value.--The offering of gifts and other
promotional items other than those that are of
nominal value (as determined by the Secretary)
to prospective enrollees at promotional
activities.
(D) Compensation.--The use of compensation
other than as provided under guidelines
established by the Secretary. Such guidelines
shall ensure that the use of compensation
creates incentives for agents and brokers to
enroll individuals in the Medicare Advantage
plan that is intended to best meet their health
care needs.
(E) Required training, annual retraining, and
testing of agents, brokers, and other third
parties.--The use by a Medicare Advantage
organization of any individual as an agent,
broker, or other third party representing the
organization that has not completed an initial
training and testing program and does not
complete an annual retraining and testing
program.
benefits and beneficiary protections
Sec. 1852. (a) Basic Benefits.--
(1) Requirement.--
(A) In general.--Except as provided in
section 1859(b)(3) for MSA plans and except as
provided in paragraph (6) for MA regional
plans, each Medicare+Choice plan shall provide
to members enrolled under this part, through
providers and other persons that meet the
applicable requirements of this title and part
A of title XI, benefits under the original
medicare fee-for-service program option (and,
for plan years before 2006, additional benefits
required under section 1854(f)(1)(A)).
(B) Benefits under the original medicare fee-
for-service program option defined.--
(i) In general.--For purposes of this
part, the term ``benefits under the
original medicare fee-for-service
program option'' means those items and
services (other than hospice care) for
which benefits are available under
parts A and B to individuals entitled
to benefits under part A and enrolled
under part B, with cost-sharing for
those services as required under parts
A and B or, subject to clause (iii), an
actuarially equivalent level of cost-
sharing as determined in this part.
(ii) Special rule for regional
plans.--In the case of an MA regional
plan in determining an actuarially
equivalent level of cost-sharing with
respect to benefits under the original
medicare fee-for-service program
option, there shall only be taken into
account, with respect to the
application of section 1858(b)(2), such
expenses only with respect to
subparagraph (A) of such section.
(iii) Limitation on variation of cost
sharing for certain benefits.--Subject
to clause (v), cost-sharing for
services described in clause (iv) shall
not exceed the cost-sharing required
for those services under parts A and B.
(iv) Services described.--The
following services are described in
this clause:
(I) Chemotherapy
administration services.
(II) Renal dialysis services
(as defined in section
1881(b)(14)(B)).
(III) Skilled nursing care.
(IV) Such other services that
the Secretary determines
appropriate (including services
that the Secretary determines
require a high level of
predictability and transparency
for beneficiaries).
(v) Exception.--In the case of
services described in clause (iv) for
which there is no cost-sharing required
under parts A and B, cost-sharing may
be required for those services in
accordance with clause (i).
(2) Satisfaction of requirement.--
(A) In general.--A Medicare+Choice plan
(other than an MSA plan) offered by a
Medicare+Choice organization satisfies
paragraph (1)(A), with respect to benefits for
items and services furnished other than through
a provider or other person that has a contract
with the organization offering the plan, if the
plan provides payment in an amount so that--
(i) the sum of such payment amount
and any cost sharing provided for under
the plan, is equal to at least
(ii) the total dollar amount of
payment for such items and services as
would otherwise be authorized under
parts A and B (including any balance
billing permitted under such parts).
(B) Reference to related provisions.--For
provision relating to--
(i) limitations on balance billing
against Medicare+Choice organizations
for non-contract providers, see
sections 1852(k) and 1866(a)(1)(O), and
(ii) limiting actuarial value of
enrollee liability for covered
benefits, see section 1854(e).
(C) Election of uniform coverage
determination.--In the case of a
Medicare+Choice organization that offers a
Medicare+Choice plan in an area in which more
than one local coverage determination is
applied with respect to different parts of the
area, the organization may elect to have the
local coverage determination for the part of
the area that is most beneficial to
Medicare+Choice enrollees (as identified by the
Secretary) apply with respect to all
Medicare+Choice enrollees enrolled in the plan.
(3) Supplemental benefits.--
(A) Benefits included subject to secretary's
approval.--Each Medicare+Choice organization
may provide to individuals enrolled under this
part, other than under an MSA plan (without
affording those individuals an option to
decline the coverage), supplemental health care
benefits that the Secretary may approve. The
Secretary shall approve any such supplemental
benefits unless the Secretary determines that
including such supplemental benefits would
substantially discourage enrollment by
Medicare+Choice eligible individuals with the
organization.
(B) At enrollees' option.--
(i) In general.--Subject to clause
(ii), a Medicare+Choice organization
may provide to individuals enrolled
under this part supplemental health
care benefits that the individuals may
elect, at their option, to have
covered.
(ii) Special rule for msa plans.--A
Medicare+Choice organization may not
provide, under an MSA plan,
supplemental health care benefits that
cover the deductible described in
section 1859(b)(2)(B). In applying the
previous sentence, health benefits
described in section 1882(u)(2)(B)
shall not be treated as covering such
deductible.
(C) Application to Medicare+Choice private
fee-for-service plans.--Nothing in this
paragraph shall be construed as preventing a
Medicare+Choice private fee-for-service plan
from offering supplemental benefits that
include payment for some or all of the balance
billing amounts permitted consistent with
section 1852(k) and coverage of additional
services that the plan finds to be medically
necessary. Such benefits may include reductions
in cost-sharing below the actuarial value
specified in section 1854(e)(4)(B).
(4) Organization as secondary payer.--Notwithstanding
any other provision of law, a Medicare+Choice
organization may (in the case of the provision of items
and services to an individual under a Medicare+Choice
plan under circumstances in which payment under this
title is made secondary pursuant to section 1862(b)(2))
charge or authorize the provider of such services to
charge, in accordance with the charges allowed under a
law, plan, or policy described in such section--
(A) the insurance carrier, employer, or other
entity which under such law, plan, or policy is
to pay for the provision of such services, or
(B) such individual to the extent that the
individual has been paid under such law, plan,
or policy for such services.
(5) National coverage determinations and legislative
changes in benefits.--If there is a national coverage
determination or legislative change in benefits
required to be provided under this part made in the
period beginning on the date of an announcement under
section 1853(b) and ending on the date of the next
announcement under such section and the Secretary
projects that the determination will result in a
significant change in the costs to a Medicare+Choice
organization of providing the benefits that are the
subject of such national coverage determination and
that such change in costs was not incorporated in the
determination of the annual Medicare+Choice capitation
rate under section 1853 included in the announcement
made at the beginning of such period, then, unless
otherwise required by law--
(A) such determination or legislative change
in benefits shall not apply to contracts under
this part until the first contract year that
begins after the end of such period, and
(B) if such coverage determination or
legislative change provides for coverage of
additional benefits or coverage under
additional circumstances, section 1851(i)(1)
shall not apply to payment for such additional
benefits or benefits provided under such
additional circumstances until the first
contract year that begins after the end of such
period.
The projection under the previous sentence shall be
based on an analysis by the Chief Actuary of the
Centers for Medicare & Medicaid Services of the
actuarial costs associated with the coverage
determination or legislative change in benefits.
(6) Special benefit rules for regional plans.--In the
case of an MA plan that is an MA regional plan,
benefits under the plan shall include the benefits
described in paragraphs (1) and (2) of section 1858(b).
(7) Limitation on cost-sharing for dual eligibles and
qualified medicare beneficiaries.--In the case of an
individual who is a full-benefit dual eligible
individual (as defined in section 1935(c)(6)) or a
qualified medicare beneficiary (as defined in section
1905(p)(1)) and who is enrolled in a specialized
Medicare Advantage plan for special needs individuals
described in section 1859(b)(6)(B)(ii), the plan may
not impose cost-sharing that exceeds the amount of
cost-sharing that would be permitted with respect to
the individual under title XIX if the individual were
not enrolled in such plan.
(b) Antidiscrimination.--
(1) Beneficiaries.--
(A) In general.-- A Medicare+Choice
organization may not deny, limit, or condition
the coverage or provision of benefits under
this part, for individuals permitted to be
enrolled with the organization under this part,
based on any health status-related factor
described in section 2702(a)(1) of the Public
Health Service Act. The Secretary shall not
approve a plan of an organization if the
Secretary determines that the design of the
plan and its benefits are likely to
substantially discourage enrollment by certain
MA eligible individuals with the organization.
(B) Construction.--Subparagraph (A) shall not
be construed as requiring a Medicare+Choice
organization to enroll individuals who are
determined to have end-stage renal disease,
except as provided under section 1851(a)(3)(B).
(2) Providers.--A Medicare+Choice organization shall
not discriminate with respect to participation,
reimbursement, or indemnification as to any provider
who is acting within the scope of the provider's
license or certification under applicable State law,
solely on the basis of such license or certification.
This paragraph shall not be construed to prohibit a
plan from including providers only to the extent
necessary to meet the needs of the plan's enrollees or
from establishing any measure designed to maintain
quality and control costs consistent with the
responsibilities of the plan.
(c) Disclosure Requirements.--
(1) Detailed description of plan provisions.--A
Medicare+Choice organization shall disclose, in clear,
accurate, and standardized form to each enrollee with a
Medicare+Choice plan offered by the organization under
this part at the time of enrollment and at least
annually thereafter, the following information
regarding such plan:
(A) Service area.--The plan's service area.
(B) Benefits.--Benefits offered under the
plan, including information described in
section 1851(d)(3)(A) and exclusions from
coverage and, if it is an MSA plan, a
comparison of benefits under such a plan with
benefits under other Medicare+Choice plans.
(C) Access.--The number, mix, and
distribution of plan providers, out-of-network
coverage (if any) provided by the plan, and any
point-of-service option (including the
supplemental premium for such option).
(D) Out-of-area coverage.--Out-of-area
coverage provided by the plan.
(E) Emergency coverage.--Coverage of
emergency services, including--
(i) the appropriate use of emergency
services, including use of the 911
telephone system or its local
equivalent in emergency situations and
an explanation of what constitutes an
emergency situation;
(ii) the process and procedures of
the plan for obtaining emergency
services; and
(iii) the locations of (I) emergency
departments, and (II) other settings,
in which plan physicians and hospitals
provide emergency services and post-
stabilization care.
(F) Supplemental benefits.--Supplemental
benefits available from the organization
offering the plan, including--
(i) whether the supplemental benefits
are optional,
(ii) the supplemental benefits
covered, and
(iii) the Medicare+Choice monthly
supplemental beneficiary premium for
the supplemental benefits.
(G) Prior authorization rules.--Rules
regarding prior authorization or other review
requirements that could result in nonpayment.
(H) Plan grievance and appeals procedures.--
All plan appeal or grievance rights and
procedures.
(I) Quality improvement program.--A
description of the organization's quality
improvement program under subsection (e).
(2) Disclosure upon request.--Upon request of a
Medicare+Choice eligible individual, a Medicare+Choice
organization must provide the following information to
such individual:
(A) The general coverage information and
general comparative plan information made
available under clauses (i) and (ii) of section
1851(d)(2)(A).
(B) Information on procedures used by the
organization to control utilization of services
and expenditures.
(C) Information on the number of grievances,
redeterminations, and appeals and on the
disposition in the aggregate of such matters.
(D) An overall summary description as to the
method of compensation of participating
physicians.
(d) Access to Services.--
(1) In general.--A Medicare+Choice organization
offering a Medicare+Choice plan may select the
providers from whom the benefits under the plan are
provided so long as--
(A) the organization makes such benefits
available and accessible to each individual
electing the plan within the plan service area
with reasonable promptness and in a manner
which assures continuity in the provision of
benefits;
(B) when medically necessary the organization
makes such benefits available and accessible 24
hours a day and 7 days a week;
(C) the plan provides for reimbursement with
respect to services which are covered under
subparagraphs (A) and (B) and which are
provided to such an individual other than
through the organization, if--
(i) the services were not emergency
services (as defined in paragraph (3)),
but (I) the services were medically
necessary and immediately required
because of an unforeseen illness,
injury, or condition, and (II) it was
not reasonable given the circumstances
to obtain the services through the
organization,
(ii) the services were renal dialysis
services and were provided other than
through the organization because the
individual was temporarily out of the
plan's service area, or
(iii) the services are maintenance
care or post-stabilization care covered
under the guidelines established under
paragraph (2);
(D) the organization provides access to
appropriate providers, including credentialed
specialists, for medically necessary treatment
and services; and
(E) coverage is provided for emergency
services (as defined in paragraph (3)) without
regard to prior authorization or the emergency
care provider's contractual relationship with
the organization.
(2) Guidelines respecting coordination of post-
stabilization care.--A Medicare+Choice plan shall
comply with such guidelines as the Secretary may
prescribe relating to promoting efficient and timely
coordination of appropriate maintenance and post-
stabilization care of an enrollee after the enrollee
has been determined to be stable under section 1867.
(3) Definition of emergency services.--In this
subsection--
(A) In general.--The term ``emergency
services'' means, with respect to an individual
enrolled with an organization, covered
inpatient and outpatient services that--
(i) are furnished by a provider that
is qualified to furnish such services
under this title, and
(ii) are needed to evaluate or
stabilize an emergency medical
condition (as defined in subparagraph
(B)).
(B) Emergency medical condition based on
prudent layperson.--The term ``emergency
medical condition'' means a medical condition
manifesting itself by acute symptoms of
sufficient severity (including severe pain)
such that a prudent layperson, who possesses an
average knowledge of health and medicine, could
reasonably expect the absence of immediate
medical attention to result in--
(i) placing the health of the
individual (or, with respect to a
pregnant woman, the health of the woman
or her unborn child) in serious
jeopardy,
(ii) serious impairment to bodily
functions, or
(iii) serious dysfunction of any
bodily organ or part.
(4) Assuring access to services in
medicare+choice private fee-for-service
plans.--In addition to any other requirements
under this part, in the case of a
Medicare+Choice private fee-for-service plan,
the organization offering the plan must
demonstrate to the Secretary that the
organization has sufficient number and range of
health care professionals and providers willing
to provide services under the terms of the
plan. Subject to paragraphs (5) and (6), the
Secretary shall find that an organization has
met such requirement with respect to any
category of health care professional or
provider if, with respect to that category of
provider--
(A) the plan has established payment
rates for covered services furnished by
that category of provider that are not
less than the payment rates provided
for under part A, part B, or both, for
such services, or
(B) the plan has contracts or
agreements (other than deemed contracts
or agreements under subsection (j)(6))
with a sufficient number and range of
providers within such category to meet
the access standards in subparagraphs
(A) through (E) of paragraph (1),
or a combination of both. The previous sentence
shall not be construed as restricting the
persons from whom enrollees under such a plan
may obtain covered benefits, except that, if a
plan entirely meets such requirement with
respect to a category of health care
professional or provider on the basis of
subparagraph (B), it may provide for a higher
beneficiary copayment in the case of health
care professionals and providers of that
category who do not have contracts or
agreements (other than deemed contracts or
agreements under subsection (j)(6)) to provide
covered services under the terms of the plan.
(5) Requirement of certain nonemployer medicare
advantage private fee-for-service plans to use
contracts with providers.--
(A) In general.--For plan year 2011 and
subsequent plan years, in the case of a
Medicare Advantage private fee-for-service plan
not described in paragraph (1) or (2) of
section 1857(i) operating in a network area (as
defined in subparagraph (B)), the plan shall
meet the access standards under paragraph (4)
in that area only through entering into written
contracts as provided for under subparagraph
(B) of such paragraph and not, in whole or in
part, through the establishment of payment
rates meeting the requirements under
subparagraph (A) of such paragraph.
(B) Network area defined.--For purposes of
subparagraph (A), the term ``network area''
means, for a plan year, an area which the
Secretary identifies (in the Secretary's
announcement of the proposed payment rates for
the previous plan year under section
1853(b)(1)(B)) as having at least 2 network-
based plans (as defined in subparagraph (C))
with enrollment under this part as of the first
day of the year in which such announcement is
made.
(C) Network-based plan defined.--
(i) In general.--For purposes of
subparagraph (B), the term ``network-
based plan'' means--
(I) except as provided in
clause (ii), a Medicare
Advantage plan that is a
coordinated care plan described
in section 1851(a)(2)(A)(i);
(II) a network-based MSA
plan; and
(III) a reasonable cost
reimbursement plan under
section 1876.
(ii) Exclusion of non-network
regional ppos.--The term ``network-
based plan'' shall not include an MA
regional plan that, with respect to the
area, meets access adequacy standards
under this part substantially through
the authority of section
422.112(a)(1)(ii) of title 42, Code of
Federal Regulations, rather than
through written contracts.
(6) Requirement of all employer medicare advantage
private fee-for-service plans to use contracts with
providers.--For plan year 2011 and subsequent plan
years, in the case of a Medicare Advantage private fee-
for-service plan that is described in paragraph (1) or
(2) of section 1857(i), the plan shall meet the access
standards under paragraph (4) only through entering
into written contracts as provided for under
subparagraph (B) of such paragraph and not, in whole or
in part, through the establishment of payment rates
meeting the requirements under subparagraph (A) of such
paragraph.
(e) Quality Improvement Program.--
(1) In general.--Each MA organization shall have an
ongoing quality improvement program for the purpose of
improving the quality of care provided to enrollees in
each MA plan offered by such organization.
(2) Chronic care improvement programs.--As part of
the quality improvement program under paragraph (1),
each MA organization shall have a chronic care
improvement program. Each chronic care improvement
program shall have a method for monitoring and
identifying enrollees with multiple or sufficiently
severe chronic conditions that meet criteria
established by the organization for participation under
the program.
(3) Data.--
(A) Collection, analysis, and reporting.--
(i) In general.--Except as provided
in clauses (ii) and (iii) with respect
to plans described in such clauses and
subject to subparagraph (B), as part of
the quality improvement program under
paragraph (1), each MA organization
shall provide for the collection,
analysis, and reporting of data that
permits the measurement of health
outcomes and other indices of quality.
With respect to MA private fee-for-
service plans and MSA plans, the
requirements under the preceding
sentence may not exceed the
requirements under this subparagraph
with respect to MA local plans that are
preferred provider organization plans,
except that, for plan year 2010, the
limitation under clause (iii) shall not
apply and such requirements shall apply
only with respect to administrative
claims data.
(ii) Special requirements for
specialized ma plans for special needs
individuals.--In addition to the data
required to be collected, analyzed, and
reported under clause (i) and
notwithstanding the limitations under
subparagraph (B), as part of the
quality improvement program under
paragraph (1), each MA organization
offering a specialized Medicare
Advantage plan for special needs
individuals shall provide for the
collection, analysis, and reporting of
data that permits the measurement of
health outcomes and other indices of
quality with respect to the
requirements described in paragraphs
(2) through (5) of subsection (f). Such
data may be based on claims data and
shall be at the plan level.
(iii) Application to local preferred
provider organizations and MA regional
plans.--Clause (i) shall apply to MA
organizations with respect to MA local
plans that are preferred provider
organization plans and to MA regional
plans only insofar as services are
furnished by providers or services,
physicians, and other health care
practitioners and suppliers that have
contracts with such organization to
furnish services under such plans.
(iv) Definition of preferred provider
organization plan.--In this
subparagraph, the term ``preferred
provider organization plan'' means an
MA plan that--
(I) has a network of
providers that have agreed to a
contractually specified
reimbursement for covered
benefits with the organization
offering the plan;
(II) provides for
reimbursement for all covered
benefits regardless of whether
such benefits are provided
within such network of
providers; and
(III) is offered by an
organization that is not
licensed or organized under
State law as a health
maintenance organization.
(B) Limitations.--
(i) Types of data.--The Secretary
shall not collect under subparagraph
(A) data on quality, outcomes, and
beneficiary satisfaction to facilitate
consumer choice and program
administration other than the types of
data that were collected by the
Secretary as of November 1, 2003.
(ii) Changes in types of data.--
Subject to subclause (iii), the
Secretary may only change the types of
data that are required to be submitted
under subparagraph (A) after submitting
to Congress a report on the reasons for
such changes that was prepared in
consultation with MA organizations and
private accrediting bodies.
(iii) Construction.--Nothing in the
subsection shall be construed as
restricting the ability of the
Secretary to carry out the duties under
section 1851(d)(4)(D).
(4) Treatment of accreditation.--
(A) In general.--The Secretary shall provide
that a Medicare+Choice organization is deemed
to meet all the requirements described in any
specific clause of subparagraph (B) if the
organization is accredited (and periodically
reaccredited) by a private accrediting
organization under a process that the Secretary
has determined assures that the accrediting
organization applies and enforces standards
that meet or exceed the standards established
under section 1856 to carry out the
requirements in such clause.
(B) Requirements described.--The provisions
described in this subparagraph are the
following:
(i) Paragraphs (1) through (3) of
this subsection (relating to quality
improvement programs).
(ii) Subsection (b) (relating to
antidiscrimination).
(iii) Subsection (d) (relating to
access to services).
(iv) Subsection (h) (relating to
confidentiality and accuracy of
enrollee records).
(v) Subsection (i) (relating to
information on advance directives).
(vi) Subsection (j) (relating to
provider participation rules).
(vii) The requirements described in
section 1860D-4(j), to the extent such
requirements apply under section 1860D-
21(c).
(C) Timely action on applications.--The
Secretary shall determine, within 210 days
after the date the Secretary receives an
application by a private accrediting
organization and using the criteria specified
in section 1865(a)(2), whether the process of
the private accrediting organization meets the
requirements with respect to any specific
clause in subparagraph (B) with respect to
which the application is made. The Secretary
may not deny such an application on the basis
that it seeks to meet the requirements with
respect to only one, or more than one, such
specific clause.
(D) Construction.--Nothing in this paragraph
shall be construed as limiting the authority of
the Secretary under section 1857, including the
authority to terminate contracts with
Medicare+Choice organizations under subsection
(c)(2) of such section.
(f) Grievance Mechanism.--Each Medicare+Choice organization
must provide meaningful procedures for hearing and resolving
grievances between the organization (including any entity or
individual through which the organization provides health care
services) and enrollees with Medicare+Choice plans of the
organization under this part.
(g) Coverage Determinations, Reconsiderations, and Appeals.--
(1) Determinations by organization.--
(A) In general.--A Medicare+Choice
organization shall have a procedure for making
determinations regarding whether an individual
enrolled with the plan of the organization
under this part is entitled to receive a health
service under this section and the amount (if
any) that the individual is required to pay
with respect to such service. Subject to
paragraph (3), such procedures shall provide
for such determination to be made on a timely
basis.
(B) Explanation of determination.--Such a
determination that denies coverage, in whole or
in part, shall be in writing and shall include
a statement in understandable language of the
reasons for the denial and a description of the
reconsideration and appeals processes.
(2) Reconsiderations.--
(A) In general.--The organization shall
provide for reconsideration of a determination
described in paragraph (1)(B) upon request by
the enrollee involved. The reconsideration
shall be within a time period specified by the
Secretary, but shall be made, subject to
paragraph (3), not later than 60 days after the
date of the receipt of the request for
reconsideration.
(B) Physician decision on certain
reconsiderations.--A reconsideration relating
to a determination to deny coverage based on a
lack of medical necessity shall be made only by
a physician with appropriate expertise in the
field of medicine which necessitates treatment
who is other than a physician involved in the
initial determination.
(3) Expedited determinations and reconsiderations.--
(A) Receipt of requests.--
(i) Enrollee requests.--An enrollee
in a Medicare+Choice plan may request,
either in writing or orally, an
expedited determination under paragraph
(1) or an expedited reconsideration
under paragraph (2) by the
Medicare+Choice organization.
(ii) Physician requests.--A
physician, regardless whether the
physician is affiliated with the
organization or not, may request,
either in writing or orally, such an
expedited determination or
reconsideration.
(B) Organization procedures.--
(i) In general.--The Medicare+Choice
organization shall maintain procedures
for expediting organization
determinations and reconsiderations
when, upon request of an enrollee, the
organization determines that the
application of the normal time frame
for making a determination (or a
reconsideration involving a
determination) could seriously
jeopardize the life or health of the
enrollee or the enrollee's ability to
regain maximum function.
(ii) Expedition required for
physician requests.--In the case of a
request for an expedited determination
or reconsideration made under
subparagraph (A)(ii), the organization
shall expedite the determination or
reconsideration if the request
indicates that the application of the
normal time frame for making a
determination (or a reconsideration
involving a determination) could
seriously jeopardize the life or health
of the enrollee or the enrollee's
ability to regain maximum function.
(iii) Timely response.--In cases
described in clauses (i) and (ii), the
organization shall notify the enrollee
(and the physician involved, as
appropriate) of the determination or
reconsideration under time limitations
established by the Secretary, but not
later than 72 hours of the time of
receipt of the request for the
determination or reconsideration (or
receipt of the information necessary to
make the determination or
reconsideration), or such longer period
as the Secretary may permit in
specified cases.
(4) Independent review of certain coverage denials.--
The Secretary shall contract with an independent,
outside entity to review and resolve in a timely manner
reconsiderations that affirm denial of coverage, in
whole or in part. The provisions of section 1869(c)(5)
shall apply to independent outside entities under
contract with the Secretary under this paragraph.
(5) Appeals.--An enrollee with a Medicare+Choice plan
of a Medicare+Choice organization under this part who
is dissatisfied by reason of the enrollee's failure to
receive any health service to which the enrollee
believes the enrollee is entitled and at no greater
charge than the enrollee believes the enrollee is
required to pay is entitled, if the amount in
controversy is $100 or more, to a hearing before the
Secretary to the same extent as is provided in section
205(b), and in any such hearing the Secretary shall
make the organization a party. If the amount in
controversy is $1,000 or more, the individual or
organization shall, upon notifying the other party, be
entitled to judicial review of the Secretary's final
decision as provided in section 205(g), and both the
individual and the organization shall be entitled to be
parties to that judicial review. In applying
subsections (b) and (g) of section 205 as provided in
this paragraph, and in applying section 205(l) thereto,
any reference therein to the Commissioner of Social
Security or the Social Security Administration shall be
considered a reference to the Secretary or the
Department of Health and Human Services, respectively.
The provisions of section 1869(b)(1)(E)(iii) shall
apply with respect to dollar amounts specified in the
first 2 sentences of this paragraph in the same manner
as they apply to the dollar amounts specified in
section 1869(b)(1)(E)(i).
(h) Confidentiality and Accuracy of Enrollee Records.--
Insofar as a Medicare+Choice organization maintains medical
records or other health information regarding enrollees under
this part, the Medicare+Choice organization shall establish
procedures--
(1) to safeguard the privacy of any individually
identifiable enrollee information;
(2) to maintain such records and information in a
manner that is accurate and timely; and
(3) to assure timely access of enrollees to such
records and information.
(i) Information on Advance Directives.--Each Medicare+Choice
organization shall meet the requirement of section 1866(f)
(relating to maintaining written policies and procedures
respecting advance directives).
(j) Rules Regarding Provider Participation.--
(1) Procedures.--Insofar as a Medicare+Choice
organization offers benefits under a Medicare+Choice
plan through agreements with physicians, the
organization shall establish reasonable procedures
relating to the participation (under an agreement
between a physician and the organization) of physicians
under such a plan. Such procedures shall include--
(A) providing notice of the rules regarding
participation,
(B) providing written notice of participation
decisions that are adverse to physicians, and
(C) providing a process within the
organization for appealing such adverse
decisions, including the presentation of
information and views of the physician
regarding such decision.
(2) Consultation in medical policies.--A
Medicare+Choice organization shall consult with
physicians who have entered into participation
agreements with the organization regarding the
organization's medical policy, quality, and medical
management procedures.
(3) Prohibiting interference with provider advice to
enrollees.--
(A) In general.--Subject to subparagraphs (B)
and (C), a Medicare+Choice organization (in
relation to an individual enrolled under a
Medicare+Choice plan offered by the
organization under this part) shall not
prohibit or otherwise restrict a covered health
care professional (as defined in subparagraph
(D)) from advising such an individual who is a
patient of the professional about the health
status of the individual or medical care or
treatment for the individual's condition or
disease, regardless of whether benefits for
such care or treatment are provided under the
plan, if the professional is acting within the
lawful scope of practice.
(B) Conscience protection.--Subparagraph (A)
shall not be construed as requiring a
Medicare+Choice plan to provide, reimburse for,
or provide coverage of a counseling or referral
service if the Medicare+Choice organization
offering the plan--
(i) objects to the provision of such
service on moral or religious grounds;
and
(ii) in the manner and through the
written instrumentalities such
Medicare+Choice organization deems
appropriate, makes available
information on its policies regarding
such service to prospective enrollees
before or during enrollment and to
enrollees within 90 days after the date
that the organization or plan adopts a
change in policy regarding such a
counseling or referral service.
(C) Construction.--Nothing in subparagraph
(B) shall be construed to affect disclosure
requirements under State law or under the
Employee Retirement Income Security Act of
1974.
(D) Health care professional defined.--For
purposes of this paragraph, the term ``health
care professional'' means a physician (as
defined in section 1861(r)) or other health
care professional if coverage for the
professional's services is provided under the
Medicare+Choice plan for the services of the
professional. Such term includes a podiatrist,
optometrist, chiropractor, psychologist,
dentist, physician assistant, physical or
occupational therapist and therapy assistant,
speech-language pathologist, audiologist,
registered or licensed practical nurse
(including nurse practitioner, clinical nurse
specialist, certified registered nurse
anesthetist, and certified nurse-midwife),
licensed certified social worker, registered
respiratory therapist, and certified
respiratory therapy technician.
(4) Limitations on physician incentive plans.--
(A) In general.--No Medicare+Choice
organization may operate any physician
incentive plan (as defined in subparagraph (B))
unless the organization provides assurances
satisfactory to the Secretary that the
following requirements are met:
(i) No specific payment is made
directly or indirectly under the plan
to a physician or physician group as an
inducement to reduce or limit medically
necessary services provided with
respect to a specific individual
enrolled with the organization.
(ii) If the plan places a physician
or physician group at substantial
financial risk (as determined by the
Secretary) for services not provided by
the physician or physician group, the
organization provides stop-loss
protection for the physician or group
that is adequate and appropriate, based
on standards developed by the Secretary
that take into account the number of
physicians placed at such substantial
financial risk in the group or under
the plan and the number of individuals
enrolled with the organization who
receive services from the physician or
group.
(B) Physician incentive plan defined.--In
this paragraph, the term ``physician incentive
plan'' means any compensation arrangement
between a Medicare+Choice organization and a
physician or physician group that may directly
or indirectly have the effect of reducing or
limiting services provided with respect to
individuals enrolled with the organization
under this part.
(5) Limitation on provider indemnification.--A
Medicare+Choice organization may not provide (directly
or indirectly) for a health care professional, provider
of services, or other entity providing health care
services (or group of such professionals, providers, or
entities) to indemnify the organization against any
liability resulting from a civil action brought for any
damage caused to an enrollee with a Medicare+Choice
plan of the organization under this part by the
organization's denial of medically necessary care.
(6) Special rules for medicare+choice private fee-
for-service plans.--For purposes of applying this part
(including subsection (k)(1)) and section
1866(a)(1)(O), a hospital (or other provider of
services), a physician or other health care
professional, or other entity furnishing health care
services is treated as having an agreement or contract
in effect with a Medicare+Choice organization (with
respect to an individual enrolled in a Medicare+Choice
private fee-for-service plan it offers), if--
(A) the provider, professional, or other
entity furnishes services that are covered
under the plan to such an enrollee; and
(B) before providing such services, the
provider, professional, or other entity --
(i) has been informed of the
individual's enrollment under the plan,
and
(ii) either--
(I) has been informed of the
terms and conditions of payment
for such services under the
plan, or
(II) is given a reasonable
opportunity to obtain
information concerning such
terms and conditions,
in a manner reasonably designed to
effect informed agreement by a
provider.
The previous sentence shall only apply in the absence
of an explicit agreement between such a provider,
professional, or other entity and the Medicare+Choice
organization.
(7) Promotion of E-Prescribing by MA Plans.--
(A) In general.--An MA-PD plan may provide
for a separate payment or otherwise provide for
a differential payment for a participating
physician that prescribes covered part D drugs
in accordance with an electronic prescription
drug program that meets standards established
under section 1860D-4(e).
(B) Considerations.--Such payment may take
into consideration the costs of the physician
in implementing such a program and may also be
increased for those participating physicians
who significantly increase--
(i) formulary compliance;
(ii) lower cost, therapeutically
equivalent alternatives;
(iii) reductions in adverse drug
interactions; and
(iv) efficiencies in filing
prescriptions through reduced
administrative costs.
(C) Structure.--Additional or increased
payments under this subsection may be
structured in the same manner as medication
therapy management fees are structured under
section 1860D-4(c)(2)(E).
(k) Treatment of Services Furnished by Certain Providers.--
(1) In general.--Except as provided in paragraph (2),
a physician or other entity (other than a provider of
services) that does not have a contract establishing
payment amounts for services furnished to an individual
enrolled under this part with a Medicare+Choice
organization described in section 1851(a)(2)(A) or with
an organization offering an MSA plan shall accept as
payment in full for covered services under this title
that are furnished to such an individual the amounts
that the physician or other entity could collect if the
individual were not so enrolled. Any penalty or other
provision of law that applies to such a payment with
respect to an individual entitled to benefits under
this title (but not enrolled with a Medicare+Choice
organization under this part) also applies with respect
to an individual so enrolled.
(2) Application to medicare+choice private fee-for-
service plans.--
(A) Balance billing limits under
medicare+choice private fee-for-service plans
in case of contract providers.--
(i) In general.--In the case of an
individual enrolled in a
Medicare+Choice private fee-for-service
plan under this part, a physician,
provider of services, or other entity
that has a contract (including through
the operation of subsection (j)(6))
establishing a payment rate for
services furnished to the enrollee
shall accept as payment in full for
covered services under this title that
are furnished to such an individual an
amount not to exceed (including any
deductibles, coinsurance, copayments,
or balance billing otherwise permitted
under the plan) an amount equal to 115
percent of such payment rate.
(ii) Procedures to enforce limits.--
The Medicare+Choice organization that
offers such a plan shall establish
procedures, similar to the procedures
described in section 1848(g)(1)(A), in
order to carry out the previous
sentence.
(iii) Assuring enforcement.--If the
Medicare+Choice organization fails to
establish and enforce procedures
required under clause (ii), the
organization is subject to intermediate
sanctions under section 1857(g).
(B) Enrollee liability for noncontract
providers.--For provision--
(i) establishing minimum payment rate
in the case of noncontract providers
under a Medicare+Choice private fee-
for-service plan, see section
1852(a)(2); or
(ii) limiting enrollee liability in
the case of covered services furnished
by such providers, see paragraph (1)
and section 1866(a)(1)(O).
(C) Information on beneficiary liability.--
(i) In general.--Each Medicare+Choice
organization that offers a
Medicare+Choice private fee-for-service
plan shall provide that enrollees under
the plan who are furnished services for
which payment is sought under the plan
are provided an appropriate explanation
of benefits (consistent with that
provided under parts A and B and, if
applicable, under medicare supplemental
policies) that includes a clear
statement of the amount of the
enrollee's liability (including any
liability for balance billing
consistent with this subsection) with
respect to payments for such services.
(ii) Advance notice before receipt of
inpatient hospital services and certain
other services.--In addition, such
organization shall, in its terms and
conditions of payments to hospitals for
inpatient hospital services and for
other services identified by the
Secretary for which the amount of the
balance billing under subparagraph (A)
could be substantial, require the
hospital to provide to the enrollee,
before furnishing such services and if
the hospital imposes balance billing
under subparagraph (A)--
(I) notice of the fact that
balance billing is permitted
under such subparagraph for
such services, and
(II) a good faith estimate of
the likely amount of such
balance billing (if any), with
respect to such services, based
upon the presenting condition
of the enrollee.
(l) Return to Home Skilled Nursing Facilities for Covered
Post-Hospital Extended Care Services.--
(1) Ensuring return to home snf.--
(A) In general.--In providing coverage of
post-hospital extended care services, a
Medicare+Choice plan shall provide for such
coverage through a home skilled nursing
facility if the following conditions are met:
(i) Enrollee election.--The enrollee
elects to receive such coverage through
such facility.
(ii) SNF agreement.--The facility has
a contract with the Medicare+Choice
organization for the provision of such
services, or the facility agrees to
accept substantially similar payment
under the same terms and conditions
that apply to similarly situated
skilled nursing facilities that are
under contract with the Medicare+Choice
organization for the provision of such
services and through which the enrollee
would otherwise receive such services.
(B) Manner of payment to home snf.--The
organization shall provide payment to the home
skilled nursing facility consistent with the
contract or the agreement described in
subparagraph (A)(ii), as the case may be.
(2) No less favorable coverage.--The coverage
provided under paragraph (1) (including scope of
services, cost-sharing, and other criteria of coverage)
shall be no less favorable to the enrollee than the
coverage that would be provided to the enrollee with
respect to a skilled nursing facility the post-hospital
extended care services of which are otherwise covered
under the Medicare+Choice plan.
(3) Rule of construction.--Nothing in this subsection
shall be construed to do the following:
(A) To require coverage through a skilled
nursing facility that is not otherwise
qualified to provide benefits under part A for
medicare beneficiaries not enrolled in a
Medicare+Choice plan.
(B) To prevent a skilled nursing facility
from refusing to accept, or imposing conditions
upon the acceptance of, an enrollee for the
receipt of post-hospital extended care
services.
(4) Definitions.--In this subsection:
(A) Home skilled nursing facility.--The term
``home skilled nursing facility'' means, with
respect to an enrollee who is entitled to
receive post-hospital extended care services
under a Medicare+Choice plan, any of the
following skilled nursing facilities:
(i) SNF residence at time of
admission.--The skilled nursing
facility in which the enrollee resided
at the time of admission to the
hospital preceding the receipt of such
post-hospital extended care services.
(ii) SNF in continuing care
retirement community.--A skilled
nursing facility that is providing such
services through a continuing care
retirement community (as defined in
subparagraph (B)) which provided
residence to the enrollee at the time
of such admission.
(iii) SNF residence of spouse at time
of discharge.--The skilled nursing
facility in which the spouse of the
enrollee is residing at the time of
discharge from such hospital.
(B) Continuing care retirement community.--
The term ``continuing care retirement
community'' means, with respect to an enrollee
in a Medicare+Choice plan, an arrangement under
which housing and health-related services are
provided (or arranged) through an organization
for the enrollee under an agreement that is
effective for the life of the enrollee or for a
specified period.
payments to medicare+choice organizations
Sec. 1853. (a) Payments to Organizations.--
(1) Monthly payments.--
(A) In general.--Under a contract under
section 1857 and subject to subsections (e),
(g), (i), and (l) and section 1859(e)(4), the
Secretary shall make monthly payments under
this section in advance to each Medicare+Choice
organization, with respect to coverage of an
individual under this part in a Medicare+Choice
payment area for a month, in an amount
determined as follows:
(i) Payment before 2006.--For years
before 2006, the payment amount shall
be equal to \1/12\ of the annual MA
capitation rate (as calculated under
subsection (c)(1)) with respect to that
individual for that area, adjusted
under subparagraph (C) and reduced by
the amount of any reduction elected
under section 1854(f)(1)(E).
(ii) Payment for original fee-for-
service benefits beginning with 2006.--
For years beginning with 2006, the
amount specified in subparagraph (B).
(B) Payment amount for original fee-for-
service benefits beginning with 2006.--
(i) Payment of bid for plans with
bids below benchmark.--In the case of a
plan for which there are average per
capita monthly savings described in
section 1854(b)(3)(C) or 1854(b)(4)(C),
as the case may be, the amount
specified in this subparagraph is equal
to the unadjusted MA statutory non-drug
monthly bid amount, adjusted under
subparagraph (C) and (if applicable)
under subparagraphs (F) and (G), plus
the amount (if any) of any rebate under
subparagraph (E).
(ii) Payment of benchmark for plans
with bids at or above benchmark.--In
the case of a plan for which there are
no average per capita monthly savings
described in section 1854(b)(3)(C) or
1854(b)(4)(C), as the case may be, the
amount specified in this subparagraph
is equal to the MA area-specific non-
drug monthly benchmark amount, adjusted
under subparagraph (C) and (if
applicable) under subparagraphs (F) and
(G).
(iii) Payment of benchmark for msa
plans.--Notwithstanding clauses (i) and
(ii), in the case of an MSA plan, the
amount specified in this subparagraph
is equal to the MA area-specific non-
drug monthly benchmark amount, adjusted
under subparagraph (C).
(iv) Authority to apply frailty
adjustment under pace payment rules for
certain specialized ma plans for
special needs individuals.--
(I) In general.--
Notwithstanding the preceding
provisions of this paragraph,
for plan year 2011 and
subsequent plan years, in the
case of a plan described in
subclause (II), the Secretary
may apply the payment rules
under section 1894(d) (other
than paragraph (3) of such
section) rather than the
payment rules that would
otherwise apply under this
part, but only to the extent
necessary to reflect the costs
of treating high concentrations
of frail individuals.
(II) Plan described.--A plan
described in this subclause is
a specialized MA plan for
special needs individuals
described in section
1859(b)(6)(B)(ii) that is fully
integrated with capitated
contracts with States for
Medicaid benefits, including
long-term care, and that have
similar average levels of
frailty (as determined by the
Secretary) as the PACE program.
(C) Demographic adjustment, including
adjustment for health status.--
(i) In general.--The Secretary shall
adjust the payment amount under
subparagraph (A)(i) and the amount
specified under subparagraph (B)(i),
(B)(ii), and (B)(iii) for such risk
factors as age, disability status,
gender, institutional status, and such
other factors as the Secretary
determines to be appropriate, including
adjustment for health status under
paragraph (3), so as to ensure
actuarial equivalence. The Secretary
may add to, modify, or substitute for
such adjustment factors if such changes
will improve the determination of
actuarial equivalence.
(ii) Application of coding
adjustment.--For 2006 and each
subsequent year:
(I) In applying the
adjustment under clause (i) for
health status to payment
amounts, the Secretary shall
ensure that such adjustment
reflects changes in treatment
and coding practices in the
fee-for-service sector and
reflects differences in coding
patterns between Medicare
Advantage plans and providers
under part A and B to the
extent that the Secretary has
identified such differences.
(II) In order to ensure
payment accuracy, the Secretary
shall annually conduct an
analysis of the differences
described in subclause (I). The
Secretary shall complete such
analysis by a date necessary to
ensure that the results of such
analysis are incorporated on a
timely basis into the risk
scores for 2008 and subsequent
years. In conducting such
analysis, the Secretary shall
use data submitted with respect
to 2004 and subsequent years,
as available and updated as
appropriate.
(III) In calculating each
year's adjustment, the
adjustment factor shall be for
2014, not less than the
adjustment factor applied for
2010, plus 1.5 percentage
points; for each of years 2015
through 2018, not less than the
adjustment factor applied for
the previous year, plus 0.25
percentage point; and for 2019
and each subsequent year, not
less than 5.9 percent.
(IV) Such adjustment shall be
applied to risk scores until
the Secretary implements risk
adjustment using Medicare
Advantage diagnostic, cost, and
use data.
(iii) Improvements to risk adjustment
for special needs individuals with
chronic health conditions.--
(I) In general.--For 2011 and
subsequent years, for purposes
of the adjustment under clause
(i) with respect to individuals
described in subclause (II),
the Secretary shall use a risk
score that reflects the known
underlying risk profile and
chronic health status of
similar individuals. Such risk
score shall be used instead of
the default risk score for new
enrollees in Medicare Advantage
plans that are not specialized
MA plans for special needs
individuals (as defined in
section 1859(b)(6)).
(II) Individuals described.--
An individual described in this
subclause is a special needs
individual described in
subsection (b)(6)(B)(iii) who
enrolls in a specialized MA
plan for special needs
individuals on or after January
1, 2011.
(III) Evaluation.--For 2011
and periodically thereafter,
the Secretary shall evaluate
and revise the risk adjustment
system under this subparagraph
in order to, as accurately as
possible, account for higher
medical and care coordination
costs associated with frailty,
individuals with multiple,
comorbid chronic conditions,
and individuals with a
diagnosis of mental illness,
and also to account for costs
that may be associated with
higher concentrations of
beneficiaries with those
conditions.
(IV) Publication of
evaluation and revisions.--The
Secretary shall publish, as
part of an announcement under
subsection (b), a description
of any evaluation conducted
under subclause (III) during
the preceding year and any
revisions made under such
subclause as a result of such
evaluation.
(D) Separate payment for federal drug
subsidies.--In the case of an enrollee in an
MA-PD plan, the MA organization offering such
plan also receives--
(i) subsidies under section 1860D-15
(other than under subsection (g)); and
(ii) reimbursement for premium and
cost-sharing reductions for low-income
individuals under section 1860D-
14(c)(1)(C).
(E) Payment of rebate for plans with bids
below benchmark.--In the case of a plan for
which there are average per capita monthly
savings described in section 1854(b)(3)(C) or
1854(b)(4)(C), as the case may be, the amount
specified in this subparagraph is the amount of
the monthly rebate computed under section
1854(b)(1)(C)(i) for that plan and year (as
reduced by the amount of any credit provided
under section 1854(b)(1)(C)(iv)).
(F) Adjustment for intra-area variations.--
(i) Intra-regional variations.--In
the case of payment with respect to an
MA regional plan for an MA region, the
Secretary shall also adjust the amounts
specified under subparagraphs (B)(i)
and (B)(ii) in a manner to take into
account variations in MA local payment
rates under this part among the
different MA local areas included in
such region.
(ii) Intra-service area variations.--
In the case of payment with respect to
an MA local plan for a service area
that covers more than one MA local
area, the Secretary shall also adjust
the amounts specified under
subparagraphs (B)(i) and (B)(ii) in a
manner to take into account variations
in MA local payment rates under this
part among the different MA local areas
included in such service area.
(G) Adjustment relating to risk adjustment.--
The Secretary shall adjust payments with
respect to MA plans as necessary to ensure
that--
(i) the sum of--
(I) the monthly payment made
under subparagraph (A)(ii); and
(II) the MA monthly basic
beneficiary premium under
section 1854(b)(2)(A); equals
(ii) the unadjusted MA statutory non-
drug monthly bid amount, adjusted in
the manner described in subparagraph
(C) and, for an MA regional plan,
subparagraph (F).
(H) Special rule for end-stage renal
disease.--The Secretary shall establish
separate rates of payment to a Medicare+Choice
organization with respect to classes of
individuals determined to have end-stage renal
disease and enrolled in a Medicare+Choice plan
of the organization. Such rates of payment
shall be actuarially equivalent to rates that
would have been paid with respect to other
enrollees in the MA payment area (or such other
area as specified by the Secretary) under the
provisions of this section as in effect before
the date of the enactment of the Medicare
Prescription Drug, Improvement, and
Modernization Act of 2003. In accordance with
regulations, the Secretary shall provide for
the application of the seventh sentence of
section 1881(b)(7) to payments under this
section covering the provision of renal
dialysis treatment in the same manner as such
sentence applies to composite rate payments
described in such sentence. In establishing
such rates, the Secretary shall provide for
appropriate adjustments to increase each rate
to reflect the demonstration rate (including
the risk adjustment methodology associated with
such rate) of the social health maintenance
organization end-stage renal disease capitation
demonstrations (established by section 2355 of
the Deficit Reduction Act of 1984, as amended
by section 13567(b) of the Omnibus Budget
Reconciliation Act of 1993), and shall compute
such rates by taking into account such factors
as renal treatment modality, age, and the
underlying cause of the end-stage renal
disease. The Secretary may apply the
competitive bidding methodology provided for in
this section, with appropriate adjustments to
account for the risk adjustment methodology
applied to end stage renal disease payments.
(2) Adjustment to reflect number of enrollees.--
(A) In general.--The amount of payment under
this subsection may be retroactively adjusted
to take into account any difference between the
actual number of individuals enrolled with an
organization under this part and the number of
such individuals estimated to be so enrolled in
determining the amount of the advance payment.
(B) Special rule for certain enrollees.--
(i) In general.--Subject to clause
(ii), the Secretary may make
retroactive adjustments under
subparagraph (A) to take into account
individuals enrolled during the period
beginning on the date on which the
individual enrolls with a
Medicare+Choice organization under a
plan operated, sponsored, or
contributed to by the individual's
employer or former employer (or the
employer or former employer of the
individual's spouse) and ending on the
date on which the individual is
enrolled in the organization under this
part, except that for purposes of
making such retroactive adjustments
under this subparagraph, such period
may not exceed 90 days.
(ii) Exception.--No adjustment may be
made under clause (i) with respect to
any individual who does not certify
that the organization provided the
individual with the disclosure
statement described in section 1852(c)
at the time the individual enrolled
with the organization.
(3) Establishment of risk adjustment factors.--
(A) Report.--The Secretary shall develop, and
submit to Congress by not later than March 1,
1999, a report on the method of risk adjustment
of payment rates under this section, to be
implemented under subparagraph (C), that
accounts for variations in per capita costs
based on health status. Such report shall
include an evaluation of such method by an
outside, independent actuary of the actuarial
soundness of the proposal.
(B) Data collection.--In order to carry out
this paragraph, the Secretary shall require
Medicare+Choice organizations (and eligible
organizations with risk-sharing contracts under
section 1876) to submit data regarding
inpatient hospital services for periods
beginning on or after July 1, 1997, and data
regarding other services and other information
as the Secretary deems necessary for periods
beginning on or after July 1, 1998. The
Secretary may not require an organization to
submit such data before January 1, 1998.
(C) Initial implementation.--
(i) In general.--The Secretary shall
first provide for implementation of a
risk adjustment methodology that
accounts for variations in per capita
costs based on health status and other
demographic factors for payments by no
later than January 1, 2000.
(ii) Phase-in.--Except as provided in
clause (iv), such risk adjustment
methodology shall be implemented in a
phased-in manner so that the
methodology insofar as it makes
adjustments to capitation rates for
health status applies to--
(I) 10 percent of \1/12\ of
the annual Medicare+Choice
capitation rate in 2000 and
each succeeding year through
2003;
(II) 30 percent of such
capitation rate in 2004;
(III) 50 percent of such
capitation rate in 2005;
(IV) 75 percent of such
capitation rate in 2006; and
(V) 100 percent of such
capitation rate in 2007 and
succeeding years.
(iii) Data for risk adjustment
methodology.--Such risk adjustment
methodology for 2004 and each
succeeding year, shall be based on data
from inpatient hospital and ambulatory
settings.
(iv) Full implementation of risk
adjustment for congestive heart failure
enrollees for 2001.--
(I) Exemption from phase-
in.--Subject to subclause (II),
the Secretary shall fully
implement the risk adjustment
methodology described in clause
(i) with respect to each
individual who has had a
qualifying congestive heart
failure inpatient diagnosis (as
determined by the Secretary
under such risk adjustment
methodology) during the period
beginning on July 1, 1999, and
ending on June 30, 2000, and
who is enrolled in a
coordinated care plan that is
the only coordinated care plan
offered on January 1, 2001, in
the service area of the
individual.
(II) Period of application.--
Subclause (I) shall only apply
during the 1-year period
beginning on January 1, 2001.
(D) Uniform application to all types of
plans.--Subject to section 1859(e)(4), the
methodology shall be applied uniformly without
regard to the type of plan.
(4) Payment rule for federally qualified health center
services.--If an individual who is enrolled with an MA plan
under this part receives a service from a federally qualified
health center that has a written agreement with the MA
organization that offers such plan for providing such a service
(including any agreement required under section 1857(e)(3))--
(A) the Secretary shall pay the amount determined
under section 1833(a)(3)(B) directly to the federally
qualified health center not less frequently than
quarterly; and
(B) the Secretary shall not reduce the amount of the
monthly payments under this subsection as a result of
the application of subparagraph (A).
(b) Annual Announcement of Payment Rates.--
(1) Annual announcements.--
(A) For 2005.--The Secretary shall determine,
and shall announce (in a manner intended to
provide notice to interested parties), not
later than the second Monday in May of 2004,
with respect to each MA payment area, the
following:
(i) MA capitation rates.--The annual
MA capitation rate for each MA payment
area for 2005.
(ii) Adjustment factors.--The risk
and other factors to be used in
adjusting such rates under subsection
(a)(1)(C) for payments for months in
2005.
(B) For 2006 and subsequent years.--For a
year after 2005--
(i) Initial announcement.--The
Secretary shall determine, and shall
announce (in a manner intended to
provide notice to interested parties),
not later than the first Monday in
April before the calendar year
concerned, with respect to each MA
payment area, the following:
(I) MA capitation rates; ma
local area benchmark.--The
annual MA capitation rate for
each MA payment area for the
year.
(II) Adjustment factors.--The
risk and other factors to be
used in adjusting such rates
under subsection (a)(1)(C) for
payments for months in such
year.
(ii) Regional benchmark
announcement.--The Secretary shall
determine, and shall announce (in a
manner intended to provide notice to
interested parties), on a timely basis
before the calendar year concerned,
with respect to each MA region and each
MA regional plan for which a bid was
submitted under section 1854, the MA
region-specific non-drug monthly
benchmark amount for that region for
the year involved.
(iii) Benchmark announcement for cca
local areas.--The Secretary shall
determine, and shall announce (in a
manner intended to provide notice to
interested parties), on a timely basis
before the calendar year concerned,
with respect to each CCA area (as
defined in section 1860C-1(b)(1)(A)),
the CCA non-drug monthly benchmark
amount under section 1860C-1(e)(1) for
that area for the year involved.
(2) Advance notice of methodological changes.--At
least 45 days (or, in 2017 and each subsequent year, at
least 60 days) before making the announcement under
paragraph (1) for a year, the Secretary shall provide
for notice to Medicare+Choice organizations of proposed
changes to be made in the methodology from the
methodology and assumptions used in the previous
announcement and shall provide such organizations an
opportunity (in 2017 and each subsequent year, of no
less than 30 days) to comment on such proposed changes.
(3) Explanation of assumptions.--In each announcement
made under paragraph (1), the Secretary shall include
an explanation of the assumptions and changes in
methodology used in such announcement.
(4) Continued computation and publication of county-
specific per capita fee-for-service expenditure
information.--The Secretary, through the Chief Actuary
of the Centers for Medicare & Medicaid Services, shall
provide for the computation and publication, on an
annual basis beginning with 2001 at the time of
publication of the annual Medicare+Choice capitation
rates under paragraph (1), of the following information
for the original medicare fee-for-service program under
parts A and B (exclusive of individuals eligible for
coverage under section 226A) for each Medicare+Choice
payment area for the second calendar year ending before
the date of publication:
(A) Total expenditures per capita per month,
computed separately for part A and for part B.
(B) The expenditures described in
subparagraph (A) reduced by the best estimate
of the expenditures (such as graduate medical
education and disproportionate share hospital
payments) not related to the payment of claims.
(C) The average risk factor for the covered
population based on diagnoses reported for
medicare inpatient services, using the same
methodology as is expected to be applied in
making payments under subsection (a).
(D) Such average risk factor based on
diagnoses for inpatient and other sites of
service, using the same methodology as is
expected to be applied in making payments under
subsection (a).
(c) Calculation of Annual Medicare+Choice Capitation Rates.--
(1) In general.--For purposes of this part, subject
to paragraphs (6)(C) and (7), each annual
Medicare+Choice capitation rate, for a Medicare+Choice
payment area that is an MA local area for a contract
year consisting of a calendar year, is equal to the
largest of the amounts specified in the following
subparagraph (A), (B), (C), or (D):
(A) Blended capitation rate.--For a year
before 2005, the sum of--
(i) the area-specific percentage (as
specified under paragraph (2) for the
year) of the annual area-specific
Medicare+Choice capitation rate for the
Medicare+Choice payment area, as
determined under paragraph (3) for the
year, and
(ii) the national percentage (as
specified under paragraph (2) for the
year) of the input-price-adjusted
annual national Medicare+Choice
capitation rate, as determined under
paragraph (4) for the year,
multiplied (for a year other than 2004) by the
budget neutrality adjustment factor determined
under paragraph (5).
(B) Minimum amount.--12 multiplied by the
following amount:
(i) For 1998, $367 (but not to
exceed, in the case of an area outside
the 50 States and the District of
Columbia, 150 percent of the annual per
capita rate of payment for 1997
determined under section 1876(a)(1)(C)
for the area).
(ii) For 1999 and 2000, the minimum
amount determined under clause (i) or
this clause, respectively, for the
preceding year, increased by the
national per capita Medicare+Choice
growth percentage described in
paragraph (6)(A) applicable to 1999 or
2000, respectively.
(iii)(I) Subject to subclause (II),
for 2001, for any area in a
Metropolitan Statistical Area with a
population of more than 250,000, $525,
and for any other area $475.
(II) In the case of an area outside
the 50 States and the District of
Columbia, the amount specified in this
clause shall not exceed 120 percent of
the amount determined under clause (ii)
for such area for 2000.
(iv) For 2002, 2003, and 2004, the
minimum amount specified in this clause
(or clause (iii)) for the preceding
year increased by the national per
capita Medicare+Choice growth
percentage, described in paragraph
(6)(A) for that succeeding year.
(C) Minimum percentage increase.--
(i) For 1998, 102 percent of the
annual per capita rate of payment for
1997 determined under section
1876(a)(1)(C) for the Medicare+Choice
payment area.
(ii) For 1999 and 2000, 102 percent
of the annual Medicare+Choice
capitation rate under this paragraph
for the area for the previous year.
(iii) For 2001, 103 percent of the
annual Medicare+Choice capitation rate
under this paragraph for the area for
2000.
(iv) For 2002 and 2003, 102 percent
of the annual Medicare+Choice
capitation rate under this paragraph
for the area for the previous year.
(v) For 2004 and each succeeding
year, the greater of--
(I) 102 percent of the annual
MA capitation rate under this
paragraph for the area for the
previous year; or
(II) the annual MA capitation
rate under this paragraph for
the area for the previous year
increased by the national per
capita MA growth percentage,
described in paragraph (6) for
that succeeding year, but not
taking into account any
adjustment under paragraph
(6)(C) for a year before 2004.
(D) 100 percent of fee-for-service costs.--
(i) In general.--For each year
specified in clause (ii), the adjusted
average per capita cost for the year
involved, determined under section
1876(a)(4) and adjusted as appropriate
for the purpose of risk adjustment, for
the MA payment area for individuals who
are not enrolled in an MA plan under
this part for the year, but adjusted to
exclude costs attributable to payments
under sections, 1848(o), and 1886(n)
and 1886(h).
(ii) Periodic rebasing.--The
provisions of clause (i) shall apply
for 2004 and for subsequent years as
the Secretary shall specify (but not
less than once every 3 years).
(iii) Inclusion of costs of va and
dod military facility services to
medicare-eligible beneficiaries.--In
determining the adjusted average per
capita cost under clause (i) for a
year, such cost shall be adjusted to
include the Secretary's estimate, on a
per capita basis, of the amount of
additional payments that would have
been made in the area involved under
this title if individuals entitled to
benefits under this title had not
received services from facilities of
the Department of Defense or the
Department of Veterans Affairs.
(2) Area-specific and national percentages.--For
purposes of paragraph (1)(A)--
(A) for 1998, the ``area-specific
percentage'' is 90 percent and the ``national
percentage'' is 10 percent,
(B) for 1999, the ``area-specific
percentage'' is 82 percent and the ``national
percentage'' is 18 percent,
(C) for 2000, the ``area-specific
percentage'' is 74 percent and the ``national
percentage'' is 26 percent,
(D) for 2001, the ``area-specific
percentage'' is 66 percent and the ``national
percentage'' is 34 percent,
(E) for 2002, the ``area-specific
percentage'' is 58 percent and the ``national
percentage'' is 42 percent, and
(F) for a year after 2002, the ``area-
specific percentage'' is 50 percent and the
``national percentage'' is 50 percent.
(3) Annual area-specific medicare+choice capitation
rate.--
(A) In general.--For purposes of paragraph
(1)(A), subject to subparagraphs (B) and (E),
the annual area-specific Medicare+Choice
capitation rate for a Medicare+Choice payment
area--
(i) for 1998 is, subject to
subparagraph (D), the annual per capita
rate of payment for 1997 determined
under section 1876(a)(1)(C) for the
area, increased by the national per
capita Medicare+Choice growth
percentage for 1998 (described in
paragraph (6)(A)); or
(ii) for a subsequent year is the
annual area-specific Medicare+Choice
capitation rate for the previous year
determined under this paragraph for the
area, increased by the national per
capita Medicare+Choice growth
percentage for such subsequent year.
(B) Removal of medical education from
calculation of adjusted average per capita
cost.--
(i) In general.--In determining the
area-specific Medicare+Choice
capitation rate under subparagraph (A)
for a year (beginning with 1998), the
annual per capita rate of payment for
1997 determined under section
1876(a)(1)(C) shall be adjusted to
exclude from the rate the applicable
percent (specified in clause (ii)) of
the payment adjustments described in
subparagraph (C).
(ii) Applicable percent.--For
purposes of clause (i), the applicable
percent for--
(I) 1998 is 20 percent,
(II) 1999 is 40 percent,
(III) 2000 is 60 percent,
(IV) 2001 is 80 percent, and
(V) a succeeding year is 100
percent.
(C) Payment adjustment.--
(i) In general.--Subject to clause
(ii), the payment adjustments described
in this subparagraph are payment
adjustments which the Secretary
estimates were payable during 1997--
(I) for the indirect costs of
medical education under section
1886(d)(5)(B), and
(II) for direct graduate
medical education costs under
section 1886(h).
(ii) Treatment of payments covered
under state hospital reimbursement
system.--To the extent that the
Secretary estimates that an annual per
capita rate of payment for 1997
described in clause (i) reflects
payments to hospitals reimbursed under
section 1814(b)(3), the Secretary shall
estimate a payment adjustment that is
comparable to the payment adjustment
that would have been made under clause
(i) if the hospitals had not been
reimbursed under such section.
(D) Treatment of areas with highly variable
payment rates.--In the case of a
Medicare+Choice payment area for which the
annual per capita rate of payment determined
under section 1876(a)(1)(C) for 1997 varies by
more than 20 percent from such rate for 1996,
for purposes of this subsection the Secretary
may substitute for such rate for 1997 a rate
that is more representative of the costs of the
enrollees in the area.
(E) Inclusion of costs of dod and va military
facility services to medicare-eligible
beneficiaries.--In determining the area-
specific MA capitation rate under subparagraph
(A) for a year (beginning with 2004), the
annual per capita rate of payment for 1997
determined under section 1876(a)(1)(C) shall be
adjusted to include in the rate the Secretary's
estimate, on a per capita basis, of the amount
of additional payments that would have been
made in the area involved under this title if
individuals entitled to benefits under this
title had not received services from facilities
of the Department of Defense or the Department
of Veterans Affairs.
(4) Input-price-adjusted annual national
medicare+choice capitation rate.--
(A) In general.--For purposes of paragraph
(1)(A), the input-price-adjusted annual
national Medicare+Choice capitation rate for a
Medicare+Choice payment area for a year is
equal to the sum, for all the types of medicare
services (as classified by the Secretary), of
the product (for each such type of service)
of--
(i) the national standardized annual
Medicare+Choice capitation rate
(determined under subparagraph (B)) for
the year,
(ii) the proportion of such rate for
the year which is attributable to such
type of services, and
(iii) an index that reflects (for
that year and that type of services)
the relative input price of such
services in the area compared to the
national average input price of such
services.
In applying clause (iii), the Secretary may,
subject to subparagraph (C), apply those
indices under this title that are used in
applying (or updating) national payment rates
for specific areas and localities.
(B) National standardized annual
medicare+choice capitation rate.--In
subparagraph (A)(i), the ``national
standardized annual Medicare+Choice capitation
rate'' for a year is equal to--
(i) the sum (for all Medicare+Choice
payment areas) of the product of--
(I) the annual area-specific
Medicare+Choice capitation rate
for that year for the area
under paragraph (3), and
(II) the average number of
medicare beneficiaries residing
in that area in the year,
multiplied by the average of
the risk factor weights used to
adjust payments under
subsection (a)(1)(A) for such
beneficiaries in such area;
divided by
(ii) the sum of the products
described in clause (i)(II) for all
areas for that year.
(C) Special rules for 1998.--In applying this
paragraph for 1998--
(i) medicare services shall be
divided into 2 types of services: part
A services and part B services;
(ii) the proportions described in
subparagraph (A)(ii)--
(I) for part A services shall
be the ratio (expressed as a
percentage) of the national
average annual per capita rate
of payment for part A for 1997
to the total national average
annual per capita rate of
payment for parts A and B for
1997, and
(II) for part B services
shall be 100 percent minus the
ratio described in subclause
(I);
(iii) for part A services, 70 percent
of payments attributable to such
services shall be adjusted by the index
used under section 1886(d)(3)(E) to
adjust payment rates for relative
hospital wage levels for hospitals
located in the payment area involved;
(iv) for part B services--
(I) 66 percent of payments
attributable to such services
shall be adjusted by the index
of the geographic area factors
under section 1848(e) used to
adjust payment rates for
physicians' services furnished
in the payment area, and
(II) of the remaining 34
percent of the amount of such
payments, 40 percent shall be
adjusted by the index described
in clause (iii); and
(v) the index values shall be
computed based only on the beneficiary
population who are 65 years of age or
older and who are not determined to
have end stage renal disease.
The Secretary may continue to apply the rules
described in this subparagraph (or similar
rules) for 1999.
(5) Payment adjustment budget neutrality factor.--For
purposes of paragraph (1)(A), for each year (other than
2004), the Secretary shall determine a budget
neutrality adjustment factor so that the aggregate of
the payments under this part (other than those
attributable to subsections (a)(3)(C)(iv), (a)(4), and
(i) shall equal the aggregate payments that would have
been made under this part if payment were based
entirely on area-specific capitation rates.
(6) National per capita medicare+choice growth
percentage defined.--
(A) In general.--In this part, the ``national
per capita Medicare+Choice growth percentage''
for a year is the percentage determined by the
Secretary, by March 1st before the beginning of
the year involved, to reflect the Secretary's
estimate of the projected per capita rate of
growth in expenditures under this title for an
individual entitled to benefits under part A
and enrolled under part B, excluding
expenditures attributable to subsections (a)(7)
and (o) of section 1848 and subsections
(b)(3)(B)(ix) and (n) of section 1886, reduced
by the number of percentage points specified in
subparagraph (B) for the year. Separate
determinations may be made for aged enrollees,
disabled enrollees, and enrollees with end-
stage renal disease.
(B) Adjustment.--The number of percentage
points specified in this subparagraph is--
(i) for 1998, 0.8 percentage points,
(ii) for 1999, 0.5 percentage points,
(iii) for 2000, 0.5 percentage
points,
(iv) for 2001, 0.5 percentage points,
(v) for 2002, 0.3 percentage points,
and
(vi) for a year after 2002, 0
percentage points.
(C) Adjustment for over or under projection
of national per capita medicare+choice growth
percentage.--Beginning with rates calculated
for 1999, before computing rates for a year as
described in paragraph (1), the Secretary shall
adjust all area-specific and national
Medicare+Choice capitation rates (and beginning
in 2000, the minimum amount) for the previous
year for the differences between the
projections of the national per capita
Medicare+Choice growth percentage for that year
and previous years and the current estimate of
such percentage for such years, except that for
purposes of paragraph (1)(C)(v)(II), no such
adjustment shall be made for a year before
2004.
(7) Adjustment for national coverage determinations
and legislative changes in benefits.--If the Secretary
makes a determination with respect to coverage under
this title or there is a change in benefits required to
be provided under this part that the Secretary projects
will result in a significant increase in the costs to
Medicare+Choice of providing benefits under contracts
under this part (for periods after any period described
in section 1852(a)(5)), the Secretary shall adjust
appropriately the payments to such organizations under
this part. Such projection and adjustment shall be
based on an analysis by the Chief Actuary of the
Centers for Medicare & Medicaid Services of the
actuarial costs associated with the new benefits.
(d) MA Payment Area; MA Local Area; MA Region Defined.--
(1) MA payment area.--In this part, except as
provided in this subsection, the term ``MA payment
area'' means--
(A) with respect to an MA local plan, an MA
local area (as defined in paragraph (2)); and
(B) with respect to an MA regional plan, an
MA region (as established under section
1858(a)(2)).
(2) MA local area.--The term ``MA local area'' means
a county or equivalent area specified by the Secretary.
(3) Rule for esrd beneficiaries.--In the case of
individuals who are determined to have end stage renal
disease, the Medicare+Choice payment area shall be a
State or such other payment area as the Secretary
specifies.
(4) Geographic adjustment.--
(A) In general.--Upon written request of the
chief executive officer of a State for a
contract year (beginning after 1998) made by
not later than February 1 of the previous year,
the Secretary shall make a geographic
adjustment to a Medicare+Choice payment area in
the State otherwise determined under paragraph
(1) for MA local plans--
(i) to a single statewide
Medicare+Choice payment area,
(ii) to the metropolitan based system
described in subparagraph (C), or
(iii) to consolidating into a single
Medicare+Choice payment area
noncontiguous counties (or equivalent
areas described inparagraph (1)(A))
within a State.
Such adjustment shall be effective for payments
for months beginning with January of the year
following the year in which the request is
received.
(B) Budget neutrality adjustment.--In the
case of a State requesting an adjustment under
this paragraph, the Secretary shall initially
(and annually thereafter) adjust the payment
rates otherwise established under this section
with respect to MA local plans for
Medicare+Choice payment areas in the State in a
manner so that the aggregate of the payments
under this section for such plans in the State
shall not exceed the aggregate payments that
would have been made under this section for
such plans for Medicare+Choice payment areas in
the State in the absence of the adjustment
under this paragraph.
(C) Metropolitan based system.--The
metropolitan based system described in this
subparagraph is one in which--
(i) all the portions of each
metropolitan statistical area in the
State or in the case of a consolidated
metropolitan statistical area, all of
the portions of each primary
metropolitan statistical area within
the consolidated area within the State,
are treated as a single Medicare+Choice
payment area, and
(ii) all areas in the State that do
not fall within a metropolitan
statistical area are treated as a
single Medicare+Choice payment area.
(D) Areas.--In subparagraph (C), the terms
``metropolitan statistical area'',
``consolidated metropolitan statistical area'',
and ``primary metropolitan statistical area''
mean any area designated as such by the
Secretary of Commerce.
(e) Special Rules for Individuals Electing MSA Plans.--
(1) In general.--If the amount of the Medicare+Choice
monthly MSA premium (as defined in section
1854(b)(2)(C)) for an MSA plan for a year is less than
\1/12\ of the annual Medicare+Choice capitation rate
applied under this section for the area and year
involved, the Secretary shall deposit an amount equal
to 100 percent of such difference in a Medicare+Choice
MSA established (and, if applicable, designated) by the
individual under paragraph (2).
(2) Establishment and designation of medicare+choice
medical savings account as requirement for payment of
contribution.--In the case of an individual who has
elected coverage under an MSA plan, no payment shall be
made under paragraph (1) on behalf of an individual for
a month unless the individual--
(A) has established before the beginning of
the month (or by such other deadline as the
Secretary may specify) a Medicare+Choice MSA
(as defined in section 138(b)(2) of the
Internal Revenue Code of 1986), and
(B) if the individual has established more
than one such Medicare+Choice MSA, has
designated one of such accounts as the
individual's Medicare+Choice MSA for purposes
of this part.
Under rules under this section, such an individual may
change the designation of such account under
subparagraph (B) for purposes of this part.
(3) Lump-sum deposit of medical savings account
contribution.--In the case of an individual electing an
MSA plan effective beginning with a month in a year,
the amount of the contribution to the Medicare+Choice
MSA on behalf of the individual for that month and all
successive months in the year shall be deposited during
that first month. In the case of a termination of such
an election as of a month before the end of a year, the
Secretary shall provide for a procedure for the
recovery of deposits attributable to the remaining
months in the year.
(f) Payments From Trust Funds.--The payment to a
Medicare+Choice organization under this section for individuals
enrolled under this part with the organization and for payments
under subsection (l) and subsection (m) and payments to a
Medicare+Choice MSA under subsection (e)(1) shall be made from
the Federal Hospital Insurance Trust Fund and the Federal
Supplementary Medical Insurance Trust Fund in such proportion
as the Secretary determines reflects the relative weight that
benefits under part A and under part B represents of the
actuarial value of the total benefits under this title.
Payments to MA organizations for statutory drug benefits
provided under this title are made from the Medicare
Prescription Drug Account in the Federal Supplementary Medical
Insurance Trust Fund. Monthly payments otherwise payable under
this section for October 2000 shall be paid on the first
business day of such month. Monthly payments otherwise payable
under this section for October 2001 shall be paid on the last
business day of September 2001. Monthly payments otherwise
payable under this section for October 2006 shall be paid on
the first business day of October 2006.
(g) Special Rule for Certain Inpatient Hospital Stays.--In
the case of an individual who is receiving inpatient hospital
services from a subsection (d) hospital (as defined in section
1886(d)(1)(B)), a rehabilitation hospital described in section
1886(d)(1)(B)(ii) or a distinct part rehabilitation unit
described in the matter following clause (v) of section
1886(d)(1)(B), or a long-term care hospital (described in
section 1886(d)(1)(B)(iv)) as of the effective date of the
individual's--
(1) election under this part of a Medicare+Choice
plan offered by a Medicare+Choice organization--
(A) payment for such services until the date
of the individual's discharge shall be made
under this title through the Medicare+Choice
plan or the original medicare fee-for-service
program option described in section
1851(a)(1)(A) (as the case may be) elected
before the election with such organization,
(B) the elected organization shall not be
financially responsible for payment for such
services until the date after the date of the
individual's discharge, and
(C) the organization shall nonetheless be
paid the full amount otherwise payable to the
organization under this part; or
(2) termination of election with respect to a
Medicare+Choice organization under this part--
(A) the organization shall be financially
responsible for payment for such services after
such date and until the date of the
individual's discharge,
(B) payment for such services during the stay
shall not be made under section 1886(d) or
other payment provision under this title for
inpatient services for the type of facility,
hospital, or unit involved, described in the
matter preceding paragraph (1), as the case may
be, or by any succeeding Medicare+Choice
organization, and
(C) the terminated organization shall not
receive any payment with respect to the
individual under this part during the period
the individual is not enrolled.
(h) Special Rule for Hospice Care.--
(1) Information.--A contract under this part shall
require the Medicare+Choice organization to inform each
individual enrolled under this part with a
Medicare+Choice plan offered by the organization about
the availability of hospice care if--
(A) a hospice program participating under
this title is located within the organization's
service area; or
(B) it is common practice to refer patients
to hospice programs outside such service area.
(2) Payment.--If an individual who is enrolled with a
Medicare+Choice organization under this part makes an
election under section 1812(d)(1) to receive hospice
care from a particular hospice program--
(A) payment for the hospice care furnished to
the individual shall be made to the hospice
program elected by the individual by the
Secretary;
(B) payment for other services for which the
individual is eligible notwithstanding the
individual's election of hospice care under
section 1812(d)(1), including services not
related to the individual's terminal illness,
shall be made by the Secretary to the
Medicare+Choice organization or the provider or
supplier of the service instead of payments
calculated under subsection (a); and
(C) the Secretary shall continue to make
monthly payments to the Medicare+Choice
organization in an amount equal to the value of
the additional benefits required under section
1854(f)(1)(A).
(i) New Entry Bonus.--
(1) In general.--Subject to paragraphs (2) and (3),
in the case of Medicare+Choice payment area in which a
Medicare+Choice plan has not been offered since 1997
(or in which all organizations that offered a plan
since such date have filed notice with the Secretary,
as of October 13, 1999, that they will not be offering
such a plan as of January 1, 2000, or filed notice with
the Secretary as of October 3, 2000, that they will not
be offering such a plan as of January 1, 2001), the
amount of the monthly payment otherwise made under this
section shall be increased--
(A) only for the first 12 months in which any
Medicare+Choice plan is offered in the area, by
5 percent of the total monthly payment
otherwise computed for such payment area; and
(B) only for the subsequent 12 months, by 3
percent of the total monthly payment otherwise
computed for such payment area.
(2) Period of application.--Paragraph (1) shall only
apply to payment for Medicare+Choice plans which are
first offered in a Medicare+Choice payment area during
the 2-year period beginning on January 1, 2000.
(3) Limitation to organization offering first plan in
an area.--Paragraph (1) shall only apply to payment to
the first Medicare+Choice organization that offers a
Medicare+Choice plan in each Medicare+Choice payment
area, except that if more than one such organization
first offers such a plan in an area on the same date,
paragraph (1) shall apply to payment for such
organizations.
(4) Construction.--Nothing in paragraph (1) shall be
construed as affecting the calculation of the annual
Medicare+Choice capitation rate under subsection (c)
for any payment area or as applying to payment for any
period not described in such paragraph and paragraph
(2).
(5) Offered defined.--In this subsection, the term
``offered'' means, with respect to a Medicare+Choice
plan as of a date, that a Medicare+Choice eligible
individual may enroll with the plan on that date,
regardless of when the enrollment takes effect or when
the individual obtains benefits under the plan.
(j) Computation of Benchmark Amounts.--For purposes of this
part, subject to subsection (o), the term ``MA area-specific
non-drug monthly benchmark amount'' means for a month in a
year--
(1) with respect to--
(A) a service area that is entirely within an
MA local area, subject to section 1860C-
1(d)(2)(A), an amount equal to \1/12\ of the
annual MA capitation rate under section
1853(c)(1) for the area for the year (or, for
2007, 2008, 2009, and 2010, \1/12\ of the
applicable amount determined under subsection
(k)(1) for the area for the year; for 2011, \1/
12\ of the applicable amount determined under
subsection (k)(1) for the area for 2010; and,
beginning with 2012, \1/12\ of the blended
benchmark amount determined under subsection
(n)(1) for the area for the year), adjusted as
appropriate (for years before 2007) for the
purpose of risk adjustment; or
(B) a service area that includes more than
one MA local area, an amount equal to the
average of the amounts described in
subparagraph (A) for each such local MA area,
weighted by the projected number of enrollees
in the plan residing in the respective local MA
areas (as used by the plan for purposes of the
bid and disclosed to the Secretary under
section 1854(a)(6)(A)(iii)), adjusted as
appropriate (for years before 2007) for the
purpose of risk adjustment; or
(2) with respect to an MA region for a month in a
year, the MA region-specific non-drug monthly benchmark
amount, as defined in section 1858(f) for the region
for the year.
(k) Determination of Applicable Amount for Purposes of
Calculating the Benchmark Amounts.--
(1) Applicable amount defined.--For purposes of
subsection (j), subject to paragraphs (2) and (4), the
term ``applicable amount'' means for an area--
(A) for 2007--
(i) if such year is not specified
under subsection (c)(1)(D)(ii), an
amount equal to the amount specified in
subsection (c)(1)(C) for the area for
2006--
(I) first adjusted by the
rescaling factor for 2006 for
the area (as made available by
the Secretary in the
announcement of the rates on
April 4, 2005, under subsection
(b)(1), but excluding any
national adjustment factors for
coding intensity and risk
adjustment budget neutrality
that were included in such
factor); and
(II) then increased by the
national per capita MA growth
percentage, described in
subsection (c)(6) for 2007, but
not taking into account any
adjustment under subparagraph
(C) of such subsection for a
year before 2004;
(ii) if such year is specified under
subsection (c)(1)(D)(ii), an amount
equal to the greater of--
(I) the amount determined
under clause (i) for the area
for the year; or
(II) the amount specified in
subsection (c)(1)(D) for the
area for the year; and
(B) for a subsequent year--
(i) if such year is not specified
under subsection (c)(1)(D)(ii), an
amount equal to the amount determined
under this paragraph for the area for
the previous year (determined without
regard to paragraphs (2) and (4)),
increased by the national per capita MA
growth percentage, described in
subsection (c)(6) for that succeeding
year, but not taking into account any
adjustment under subparagraph (C) of
such subsection for a year before 2004;
and
(ii) if such year is specified under
subsection (c)(1)(D)(ii), an amount
equal to the greater of--
(I) the amount determined
under clause (i) for the area
for the year; or
(II) the amount specified in
subsection (c)(1)(D) for the
area for the year.
(2) Phase-out of budget neutrality factor.--
(A) In general.--Except as provided in
subparagraph (D), in the case of 2007 through
2010, the applicable amount determined under
paragraph (1) shall be multiplied by a factor
equal to 1 plus the product of--
(i) the percent determined under
subparagraph (B) for the year; and
(ii) the applicable phase-out factor
for the year under subparagraph (C).
(B) Percent determined.--
(i) In general.--For purposes of
subparagraph (A)(i), subject to clause
(iv), the percent determined under this
subparagraph for a year is a percent
equal to a fraction the numerator of
which is described in clause (ii) and
the denominator of which is described
in clause (iii).
(ii) Numerator based on difference
between demographic rate and risk
rate.--
(I) In general.--The
numerator described in this
clause is an amount equal to
the amount by which the
demographic rate described in
subclause (II) exceeds the risk
rate described in subclause
(III).
(II) Demographic rate.--The
demographic rate described in
this subclause is the
Secretary's estimate of the
total payments that would have
been made under this part in
the year if all the monthly
payment amounts for all MA
plans were equal to \1/12\ of
the annual MA capitation rate
under subsection (c)(1) for the
area and year, adjusted
pursuant to subsection
(a)(1)(C).
(III) Risk rate.--The risk
rate described in this
subclause is the Secretary's
estimate of the total payments
that would have been made under
this part in the year if all
the monthly payment amounts for
all MA plans were equal to the
amount described in subsection
(j)(1)(A) (determined as if
this paragraph had not applied)
under subsection (j) for the
area and year, adjusted
pursuant to subsection
(a)(1)(C).
(iii) Denominator based on risk
rate.--The denominator described in
this clause is equal to the total
amount estimated for the year under
clause (ii)(III).
(iv) Requirements.--In estimating the
amounts under the previous clauses, the
Secretary shall--
(I) use a complete set of the
most recent and representative
Medicare Advantage risk scores
under subsection (a)(3) that
are available from the risk
adjustment model announced for
the year;
(II) adjust the risk scores
to reflect changes in treatment
and coding practices in the
fee-for-service sector;
(III) adjust the risk scores
for differences in coding
patterns between Medicare
Advantage plans and providers
under the original Medicare
fee-for-service program under
parts A and B to the extent
that the Secretary has
identified such differences, as
required in subsection
(a)(1)(C);
(IV) as necessary, adjust the
risk scores for late data
submitted by Medicare Advantage
organizations;
(V) as necessary, adjust the
risk scores for lagged cohorts;
and
(VI) as necessary, adjust the
risk scores for changes in
enrollment in Medicare
Advantage plans during the
year.
(v) Authority.--In computing such
amounts the Secretary may take into
account the estimated health risk of
enrollees in preferred provider
organization plans (including MA
regional plans) for the year.
(C) Applicable phase-out factor.--For
purposes of subparagraph (A)(ii), the term
``applicable phase-out factor'' means--
(i) for 2007, 0.55;
(ii) for 2008, 0.40;
(iii) for 2009, 0.25; and
(iv) for 2010, 0.05.
(D) Termination of application.--Subparagraph
(A) shall not apply in a year if the amount
estimated under subparagraph (B)(ii)(III) for
the year is equal to or greater than the amount
estimated under subparagraph (B)(ii)(II) for
the year.
(3) No revision in percent.--
(A) In general.--The Secretary may not make
any adjustment to the percent determined under
paragraph (2)(B) for any year.
(B) Rule of construction.--Nothing in this
subsection shall be construed to limit the
authority of the Secretary to make adjustments
to the applicable amounts determined under
paragraph (1) as appropriate for purposes of
updating data or for purposes of adopting an
improved risk adjustment methodology.
(4) Phase-out of the indirect costs of medical
education from capitation rates.--
(A) In general.--After determining the
applicable amount for an area for a year under
paragraph (1) (beginning with 2010), the
Secretary shall adjust such applicable amount
to exclude from such applicable amount the
phase-in percentage (as defined in subparagraph
(B)(i)) for the year of the Secretary's
estimate of the standardized costs for payments
under section 1886(d)(5)(B) in the area for the
year. Any adjustment under the preceding
sentence shall be made prior to the application
of paragraph (2).
(B) Percentages defined.--For purposes of
this paragraph:
(i) Phase-in percentage.--The term
``phase-in percentage'' means, for an
area for a year, the ratio (expressed
as a percentage, but in no case greater
than 100 percent) of--
(I) the maximum cumulative
adjustment percentage for the
year (as defined in clause
(ii)); to
(II) the standardized IME
cost percentage (as defined in
clause (iii)) for the area and
year.
(ii) Maximum cumulative adjustment
percentage.--The term ``maximum
cumulative adjustment percentage''
means, for--
(I) 2010, 0.60 percent; and
(II) a subsequent year, the
maximum cumulative adjustment
percentage for the previous
year increased by 0.60
percentage points.
(iii) Standardized ime cost
percentage.--The term ``standardized
IME cost percentage'' means, for an
area for a year, the per capita costs
for payments under section
1886(d)(5)(B) (expressed as a
percentage of the fee-for-service
amount specified in subparagraph (C))
for the area and the year.
(C) Fee-for-service amount.--The fee-for-
service amount specified in this subparagraph
for an area for a year is the amount specified
under subsection (c)(1)(D) for the area and the
year.
(l) Application of Eligible Professional Incentives for
Certain MA Organizations for Adoption and Meaningful Use of
Certified EHR Technology.--
(1) In general.--Subject to paragraphs (3) and (4),
in the case of a qualifying MA organization, the
provisions of sections 1848(o) and 1848(a)(7) shall
apply with respect to eligible professionals described
in paragraph (2) of the organization who the
organization attests under paragraph (6) to be
meaningful EHR users in a similar manner as they apply
to eligible professionals under such sections.
Incentive payments under paragraph (3) shall be made to
and payment adjustments under paragraph (4) shall apply
to such qualifying organizations.
(2) Eligible professional described.--With respect to
a qualifying MA organization, an eligible professional
described in this paragraph is an eligible professional
(as defined for purposes of section 1848(o)) who--
(A)(i) is employed by the organization; or
(ii)(I) is employed by, or is a partner of,
an entity that through contract with the
organization furnishes at least 80 percent of
the entity's Medicare patient care services to
enrollees of such organization; and
(II) furnishes at least 80 percent of the
professional services of the eligible
professional covered under this title to
enrollees of the organization; and
(B) furnishes, on average, at least 20 hours
per week of patient care services.
(3) Eligible professional incentive payments.--
(A) In general.--In applying section 1848(o)
under paragraph (1), instead of the additional
payment amount under section 1848(o)(1)(A) and
subject to subparagraph (B), the Secretary may
substitute an amount determined by the
Secretary to the extent feasible and practical
to be similar to the estimated amount in the
aggregate that would be payable if payment for
services furnished by such professionals was
payable under part B instead of this part.
(B) Avoiding duplication of payments.--
(i) In general.--In the case of an
eligible professional described in
paragraph (2)--
(I) that is eligible for the
maximum incentive payment under
section 1848(o)(1)(A) for the
same payment period, the
payment incentive shall be made
only under such section and not
under this subsection; and
(II) that is eligible for
less than such maximum
incentive payment for the same
payment period, the payment
incentive shall be made only
under this subsection and not
under section 1848(o)(1)(A).
(ii) Methods.--In the case of an
eligible professional described in
paragraph (2) who is eligible for an
incentive payment under section
1848(o)(1)(A) but is not described in
clause (i) for the same payment period,
the Secretary shall develop a process--
(I) to ensure that duplicate
payments are not made with
respect to an eligible
professional both under this
subsection and under section
1848(o)(1)(A); and
(II) to collect data from
Medicare Advantage
organizations to ensure against
such duplicate payments.
(C) Fixed schedule for application of
limitation on incentive payments for all
eligible professionals.--In applying section
1848(o)(1)(B)(ii) under subparagraph (A), in
accordance with rules specified by the
Secretary, a qualifying MA organization shall
specify a year (not earlier than 2011) that
shall be treated as the first payment year for
all eligible professionals with respect to such
organization.
(4) Payment adjustment.--
(A) In general.--In applying section
1848(a)(7) under paragraph (1), instead of the
payment adjustment being an applicable percent
of the fee schedule amount for a year under
such section, subject to subparagraph (D), the
payment adjustment under paragraph (1) shall be
equal to the percent specified in subparagraph
(B) for such year of the payment amount
otherwise provided under this section for such
year.
(B) Specified percent.--The percent specified
under this subparagraph for a year is 100
percent minus a number of percentage points
equal to the product of--
(i) the number of percentage points
by which the applicable percent (under
section 1848(a)(7)(A)(ii)) for the year
is less than 100 percent; and
(ii) the Medicare physician
expenditure proportion specified in
subparagraph (C) for the year.
(C) Medicare physician expenditure
proportion.--The Medicare physician expenditure
proportion under this subparagraph for a year
is the Secretary's estimate of the proportion,
of the expenditures under parts A and B that
are not attributable to this part, that are
attributable to expenditures for physicians'
services.
(D) Application of payment adjustment.--In
the case that a qualifying MA organization
attests that not all eligible professionals of
the organization are meaningful EHR users with
respect to a year, the Secretary shall apply
the payment adjustment under this paragraph
based on the proportion of all such eligible
professionals of the organization that are not
meaningful EHR users for such year.
(5) Qualifying ma organization defined.--In this
subsection and subsection (m), the term ``qualifying MA
organization'' means a Medicare Advantage organization
that is organized as a health maintenance organization
(as defined in section 2791(b)(3) of the Public Health
Service Act).
(6) Meaningful ehr user attestation.--For purposes of
this subsection and subsection (m), a qualifying MA
organization shall submit an attestation, in a form and
manner specified by the Secretary which may include the
submission of such attestation as part of submission of
the initial bid under section 1854(a)(1)(A)(iv),
identifying--
(A) whether each eligible professional
described in paragraph (2), with respect to
such organization is a meaningful EHR user (as
defined in section 1848(o)(2)) for a year
specified by the Secretary; and
(B) whether each eligible hospital described
in subsection (m)(1), with respect to such
organization, is a meaningful EHR user (as
defined in section 1886(n)(3)) for an
applicable period specified by the Secretary.
(7) Posting on website.--The Secretary shall post on
the Internet website of the Centers for Medicare &
Medicaid Services, in an easily understandable format,
a list of the names, business addresses, and business
phone numbers of--
(A) each qualifying MA organization receiving
an incentive payment under this subsection for
eligible professionals of the organization; and
(B) the eligible professionals of such
organization for which such incentive payment
is based.
(8) Limitation on review.--There shall be no
administrative or judicial review under section 1869,
section 1878, or otherwise, of--
(A) the methodology and standards for
determining payment amounts and payment
adjustments under this subsection, including
avoiding duplication of payments under
paragraph (3)(B) and the specification of rules
for the fixed schedule for application of
limitation on incentive payments for all
eligible professionals under paragraph (3)(C);
(B) the methodology and standards for
determining eligible professionals under
paragraph (2); and
(C) the methodology and standards for
determining a meaningful EHR user under section
1848(o)(2), including specification of the
means of demonstrating meaningful EHR use under
section 1848(o)(3)(C) and selection of measures
under section 1848(o)(3)(B).
(m) Application of Eligible Hospital Incentives for Certain
MA Organizations for Adoption and Meaningful Use of Certified
EHR Technology.--
(1) Application.--Subject to paragraphs (3) and (4),
in the case of a qualifying MA organization, the
provisions of sections 1886(n) and 1886(b)(3)(B)(ix)
shall apply with respect to eligible hospitals
described in paragraph (2) of the organization which
the organization attests under subsection (l)(6) to be
meaningful EHR users in a similar manner as they apply
to eligible hospitals under such sections. Incentive
payments under paragraph (3) shall be made to and
payment adjustments under paragraph (4) shall apply to
such qualifying organizations.
(2) Eligible hospital described.--With respect to a
qualifying MA organization, an eligible hospital
described in this paragraph is an eligible hospital (as
defined in section 1886(n)(6)(B)) that is under common
corporate governance with such organization and serves
individuals enrolled under an MA plan offered by such
organization.
(3) Eligible hospital incentive payments.--
(A) In general.--In applying section
1886(n)(2) under paragraph (1), instead of the
additional payment amount under section
1886(n)(2), there shall be substituted an
amount determined by the Secretary to be
similar to the estimated amount in the
aggregate that would be payable if payment for
services furnished by such hospitals was
payable under part A instead of this part. In
implementing the previous sentence, the
Secretary--
(i) shall, insofar as data to
determine the discharge related amount
under section 1886(n)(2)(C) for an
eligible hospital are not available to
the Secretary, use such alternative
data and methodology to estimate such
discharge related amount as the
Secretary determines appropriate; and
(ii) shall, insofar as data to
determine the medicare share described
in section 1886(n)(2)(D) for an
eligible hospital are not available to
the Secretary, use such alternative
data and methodology to estimate such
share, which data and methodology may
include use of the inpatient-bed-days
(or discharges) with respect to an
eligible hospital during the
appropriate period which are
attributable to both individuals for
whom payment may be made under part A
or individuals enrolled in an MA plan
under a Medicare Advantage organization
under this part as a proportion of the
estimated total number of patient-bed-
days (or discharges) with respect to
such hospital during such period.
(B) Avoiding duplication of payments.--
(i) In general.--In the case of a
hospital that for a payment year is an
eligible hospital described in
paragraph (2) and for which at least
one-third of their discharges (or bed-
days) of Medicare patients for the year
are covered under part A, payment for
the payment year shall be made only
under section 1886(n) and not under
this subsection.
(ii) Methods.--In the case of a
hospital that is an eligible hospital
described in paragraph (2) and also is
eligible for an incentive payment under
section 1886(n) but is not described in
clause (i) for the same payment period,
the Secretary shall develop a process--
(I) to ensure that duplicate
payments are not made with
respect to an eligible hospital
both under this subsection and
under section 1886(n); and
(II) to collect data from
Medicare Advantage
organizations to ensure against
such duplicate payments.
(4) Payment adjustment.--
(A) Subject to paragraph (3), in the case of
a qualifying MA organization (as defined in
section 1853(l)(5)), if, according to the
attestation of the organization submitted under
subsection (l)(6) for an applicable period, one
or more eligible hospitals (as defined in
section 1886(n)(6)(B)) that are under common
corporate governance with such organization and
that serve individuals enrolled under a plan
offered by such organization are not meaningful
EHR users (as defined in section 1886(n)(3))
with respect to a period, the payment amount
payable under this section for such
organization for such period shall be the
percent specified in subparagraph (B) for such
period of the payment amount otherwise provided
under this section for such period.
(B) Specified percent.--The percent specified
under this subparagraph for a year is 100
percent minus a number of percentage points
equal to the product of--
(i) the number of the percentage
point reduction effected under section
1886(b)(3)(B)(ix)(I) for the period;
and
(ii) the Medicare hospital
expenditure proportion specified in
subparagraph (C) for the year.
(C) Medicare hospital expenditure
proportion.--The Medicare hospital expenditure
proportion under this subparagraph for a year
is the Secretary's estimate of the proportion,
of the expenditures under parts A and B that
are not attributable to this part, that are
attributable to expenditures for inpatient
hospital services.
(D) Application of payment adjustment.--In
the case that a qualifying MA organization
attests that not all eligible hospitals are
meaningful EHR users with respect to an
applicable period, the Secretary shall apply
the payment adjustment under this paragraph
based on a methodology specified by the
Secretary, taking into account the proportion
of such eligible hospitals, or discharges from
such hospitals, that are not meaningful EHR
users for such period.
(5) Posting on website.--The Secretary shall post on
the Internet website of the Centers for Medicare &
Medicaid Services, in an easily understandable format--
(A) a list of the names, business addresses,
and business phone numbers of each qualifying
MA organization receiving an incentive payment
under this subsection for eligible hospitals
described in paragraph (2); and
(B) a list of the names of the eligible
hospitals for which such incentive payment is
based.
(6) Limitations on review.--There shall be no
administrative or judicial review under section 1869,
section 1878, or otherwise, of--
(A) the methodology and standards for
determining payment amounts and payment
adjustments under this subsection, including
avoiding duplication of payments under
paragraph (3)(B);
(B) the methodology and standards for
determining eligible hospitals under paragraph
(2); and
(C) the methodology and standards for
determining a meaningful EHR user under section
1886(n)(3), including specification of the
means of demonstrating meaningful EHR use under
subparagraph (C) of such section and selection
of measures under subparagraph (B) of such
section.
(n) Determination of Blended Benchmark Amount.--
(1) In general.--For purposes of subsection (j),
subject to paragraphs (3), (4), and (5), the term
``blended benchmark amount'' means for an area--
(A) for 2012 the sum of--
(i) \1/2\ of the applicable amount
for the area and year; and
(ii) \1/2\ of the amount specified in
paragraph (2)(A) for the area and year;
and
(B) for a subsequent year the amount
specified in paragraph (2)(A) for the area and
year.
(2) Specified amount.--
(A) In general.--The amount specified in this
subparagraph for an area and year is the
product of--
(i) the base payment amount specified
in subparagraph (E) for the area and
year adjusted to take into account the
phase-out in the indirect costs of
medical education from capitation rates
described in subsection (k)(4) and, for
2019 and subsequent years, the
exclusion of payments for organ
acquisitions for kidney transplants
from the capitation rate as described
in subsection (k)(5); and
(ii) the applicable percentage for
the area for the year specified under
subparagraph (B).
(B) Applicable percentage.--Subject to
subparagraph (D), the applicable percentage
specified in this subparagraph for an area for
a year in the case of an area that is ranked--
(i) in the highest quartile under
subparagraph (C) for the previous year
is 95 percent;
(ii) in the second highest quartile
under such subparagraph for the
previous year is 100 percent;
(iii) in the third highest quartile
under such subparagraph for the
previous year is 107.5 percent; or
(iv) in the lowest quartile under
such subparagraph for the previous year
is 115 percent.
(C) Periodic ranking.--For purposes of this
paragraph in the case of an area located--
(i) in 1 of the 50 States or the
District of Columbia, the Secretary
shall rank such area in each year
specified under subsection
(c)(1)(D)(ii) based upon the level of
the amount specified in subparagraph
(A)(i) for such areas; or
(ii) in a territory, the Secretary
shall rank such areas in each such year
based upon the level of the amount
specified in subparagraph (A)(i) for
such area relative to quartile rankings
computed under clause (i).
(D) 1-year transition for changes in
applicable percentage.--If, for a year after
2012, there is a change in the quartile in
which an area is ranked compared to the
previous year, the applicable percentage for
the area in the year shall be the average of--
(i) the applicable percentage for the
area for the previous year; and
(ii) the applicable percentage that
would otherwise apply for the area for
the year.
(E) Base payment amount.--Subject to
subparagraph (F), the base payment amount
specified in this subparagraph--
(i) for 2012 is the amount specified
in subsection (c)(1)(D) for the area
for the year; or
(ii) for a subsequent year that--
(I) is not specified under
subsection (c)(1)(D)(ii), is
the base amount specified in
this subparagraph for the area
for the previous year,
increased by the national per
capita MA growth percentage,
described in subsection (c)(6)
for that succeeding year, but
not taking into account any
adjustment under subparagraph
(C) of such subsection for a
year before 2004; and
(II) is specified under
subsection (c)(1)(D)(ii), is
the amount specified in
subsection (c)(1)(D) for the
area for the year.
(F) Application of indirect medical education
phase-out.--The base payment amount specified
in subparagraph (E) for a year shall be
adjusted in the same manner under paragraph (4)
of subsection (k) as the applicable amount is
adjusted under such subsection.
(3) Alternative phase-ins.--
(A) 4-year phase-in for certain areas.--If
the difference between the applicable amount
(as defined in subsection (k)) for an area for
2010 and the projected 2010 benchmark amount
(as defined in subparagraph (C)) for the area
is at least $30 but less than $50, the blended
benchmark amount for the area is--
(i) for 2012 the sum of--
(I) \3/4\ of the applicable
amount for the area and year;
and
(II) \1/4\ of the amount
specified in paragraph (2)(A)
for the area and year;
(ii) for 2013 the sum of--
(I) \1/2\ of the applicable
amount for the area and year;
and
(II) \1/2\ of the amount
specified in paragraph (2)(A)
for the area and year;
(iii) for 2014 the sum of--
(I) \1/4\ of the applicable
amount for the area and year;
and
(II) \3/4\ of the amount
specified in paragraph (2)(A)
for the area and year; and
(iv) for a subsequent year the amount
specified in paragraph (2)(A) for the
area and year.
(B) 6-year phase-in for certain areas.--If
the difference between the applicable amount
(as defined in subsection (k)) for an area for
2010 and the projected 2010 benchmark amount
(as defined in subparagraph (C)) for the area
is at least $50, the blended benchmark amount
for the area is--
(i) for 2012 the sum of--
(I) \5/6\ of the applicable
amount for the area and year;
and
(II) \1/6\ of the amount
specified in paragraph (2)(A)
for the area and year;
(ii) for 2013 the sum of--
(I) \2/3\ of the applicable
amount for the area and year;
and
(II) \1/3\ of the amount
specified in paragraph (2)(A)
for the area and year;
(iii) for 2014 the sum of--
(I) \1/2\ of the applicable
amount for the area and year;
and
(II) \1/2\ of the amount
specified in paragraph (2)(A)
for the area and year;
(iv) for 2015 the sum of--
(I) \1/3\ of the applicable
amount for the area and year;
and
(II) \2/3\ of the amount
specified in paragraph (2)(A)
for the area and year; and
(v) for 2016 the sum of--
(I) \1/6\ of the applicable
amount for the area and year;
and
(II) \5/6\ of the amount
specified in paragraph (2)(A)
for the area and year; and
(vi) for a subsequent year the amount
specified in paragraph (2)(A) for the
area and year.
(C) Projected 2010 benchmark amount.--The
projected 2010 benchmark amount described in
this subparagraph for an area is equal to the
sum of--
(i) \1/2\ of the applicable amount
(as defined in subsection (k)) for the
area for 2010; and
(ii) \1/2\ of the amount specified in
paragraph (2)(A) for the area for 2010
but determined as if there were
substituted for the applicable
percentage specified in clause (ii) of
such paragraph the sum of--
(I) the applicable percent
that would be specified under
subparagraph (B) of paragraph
(2) (determined without regard
to subparagraph (D) of such
paragraph) for the area for
2010 if any reference in such
paragraph to ``the previous
year'' were deemed a reference
to 2010; and
(II) the applicable
percentage increase that would
apply to a qualifying plan in
the area under subsection (o)
as if any reference in such
subsection to 2012 were deemed
a reference to 2010 and as if
the determination of a
qualifying county under
paragraph (3)(B) of such
subsection were made for 2010.
(4) Cap on benchmark amount.--In no case shall the
blended benchmark amount for an area for a year
(determined taking into account subsection (o)) be
greater than the applicable amount that would (but for
the application of this subsection) be determined under
subsection (k)(1) for the area for the year.
(5) Non-application to pace plans.--This subsection
shall not apply to payments to a PACE program under
section 1894.
(o) Applicable Percentage Quality Increases.--
(1) In general.--Subject to the succeeding
paragraphs, in the case of a qualifying plan with
respect to a year beginning with 2012, the applicable
percentage under subsection (n)(2)(B) shall be
increased on a plan or contract level, as determined by
the Secretary--
(A) for 2012, by 1.5 percentage points;
(B) for 2013, by 3.0 percentage points; and
(C) for 2014 or a subsequent year, by 5.0
percentage points.
(2) Increase for qualifying plans in qualifying
counties.--The increase applied under paragraph (1) for
a qualifying plan located in a qualifying county for a
year shall be doubled.
(3) Qualifying plans and qualifying county defined;
application of increases to low enrollment and new
plans.--For purposes of this subsection:
(A) Qualifying plan.--
(i) In general.--The term
``qualifying plan'' means, for a year
and subject to paragraph (4), a plan
that had a quality rating under
paragraph (4) of 4 stars or higher
based on the most recent data available
for such year.
(ii) Application of increases to low
enrollment plans.--
(I) 2012.--For 2012, the term
``qualifying plan'' includes an
MA plan that the Secretary
determines is not able to have
a quality rating under
paragraph (4) because of low
enrollment.
(II) 2013 and subsequent
years.--For 2013 and subsequent
years, for purposes of
determining whether an MA plan
with low enrollment (as defined
by the Secretary) is included
as a qualifying plan, the
Secretary shall establish a
method to apply to MA plans
with low enrollment (as defined
by the Secretary) the
computation of quality rating
and the rating system under
paragraph (4).
(iii) Application of increases to new
plans.--
(I) In general.--A new MA
plan that meets criteria
specified by the Secretary
shall be treated as a
qualifying plan, except that in
applying paragraph (1), the
applicable percentage under
subsection (n)(2)(B) shall be
increased--
(aa) for 2012, by 1.5
percentage points;
(bb) for 2013, by 2.5
percentage points; and
(cc) for 2014 or a
subsequent year, by 3.5
percentage points.
(II) New ma plan defined.--
The term ``new MA plan'' means,
with respect to a year, a plan
offered by an organization or
sponsor that has not had a
contract as a Medicare
Advantage organization in the
preceding 3-year period.
(B) Qualifying county.--The term ``qualifying
county'' means, for a year, a county--
(i) that has an MA capitation rate
that, in 2004, was based on the amount
specified in subsection (c)(1)(B) for a
Metropolitan Statistical Area with a
population of more than 250,000;
(ii) for which, as of December 2009,
of the Medicare Advantage eligible
individuals residing in the county at
least 25 percent of such individuals
were enrolled in Medicare Advantage
plans; and
(iii) that has per capita fee-for-
service spending that is lower than the
national monthly per capita cost for
expenditures for individuals enrolled
under the original medicare fee-for-
service program for the year.
(4) Quality determinations for application of
increase.--
(A) Quality determination.--The quality
rating for a plan shall be determined according
to a 5-star rating system (based on the data
collected under section 1852(e)).
(B) Plans that failed to report.--An MA plan
which does not report data that enables the
Secretary to rate the plan for purposes of this
paragraph shall be counted as having a rating
of fewer than 3.5 stars.
(C) Special rule for first 3 plan years for
plans that were converted from a reasonable
cost reimbursement contract.--For purposes of
applying paragraph (1) and section
1854(b)(1)(C) for the first 3 plan years under
this part in the case of an MA plan to which
deemed enrollment applies under section
1851(c)(4)--
(i) such plan shall not be treated as
a new MA plan (as defined in paragraph
(3)(A)(iii)(II)); and
(ii) in determining the star rating
of the plan under subparagraph (A), to
the extent that Medicare Advantage data
for such plan is not available for a
measure used to determine such star
rating, the Secretary shall use data
from the period in which such plan was
a reasonable cost reimbursement
contract.
(5) Exception for pace plans.--This subsection shall
not apply to payments to a PACE program under section
1894.
* * * * * * *
definitions; miscellaneous provisions
Sec. 1859. (a) Definitions Relating to Medicare+Choice
Organizations.--In this part--
(1) Medicare+choice organization.--The term
``Medicare+Choice organization'' means a public or
private entity that is certified under section 1856 as
meeting the requirements and standards of this part for
such an organization.
(2) Provider-sponsored organization.--The term
``provider-sponsored organization'' is defined in
section 1855(d)(1).
(b) Definitions Relating to Medicare+Choice Plans.--
(1) Medicare+choice plan.--The term ``Medicare+Choice
plan'' means health benefits coverage offered under a
policy, contract, or plan by a Medicare+Choice
organization pursuant to and in accordance with a
contract under section 1857.
(2) Medicare+Choice private fee-for-service plan.--
The term ``Medicare+Choice private fee-for-service
plan'' means a Medicare+Choice plan that--
(A) reimburses hospitals, physicians, and
other providers at a rate determined by the
plan on a fee-for-service basis without placing
the provider at financial risk;
(B) does not vary such rates for such a
provider based on utilization relating to such
provider; and
(C) does not restrict the selection of
providers among those who are lawfully
authorized to provide the covered services and
agree to accept the terms and conditions of
payment established by the plan.
Nothing in subparagraph (B) shall be construed to
preclude a plan from varying rates for such a provider
based on the specialty of the provider, the location of
the provider, or other factors related to such provider
that are not related to utilization, or to preclude a
plan from increasing rates for such a provider based on
increased utilization of specified preventive or
screening services.
(3) MSA plan.--
(A) In general.--The term ``MSA plan'' means
a Medicare+Choice plan that--
(i) provides reimbursement for at
least the items and services described
in section 1852(a)(1) in a year but
only after the enrollee incurs
countable expenses (as specified under
the plan) equal to the amount of an
annual deductible (described in
subparagraph (B));
(ii) counts as such expenses (for
purposes of such deductible) at least
all amounts that would have been
payable under parts A and B, and that
would have been payable by the enrollee
as deductibles, coinsurance, or
copayments, if the enrollee had elected
to receive benefits through the
provisions of such parts; and
(iii) provides, after such deductible
is met for a year and for all
subsequent expenses for items and
services referred to in clause (i) in
the year, for a level of reimbursement
that is not less than--
(I) 100 percent of such
expenses, or
(II) 100 percent of the
amounts that would have been
paid (without regard to any
deductibles or coinsurance)
under parts A and B with
respect to such expenses,
whichever is less.
(B) Deductible.--The amount of annual
deductible under an MSA plan--
(i) for contract year 1999 shall be
not more than $6,000; and
(ii) for a subsequent contract year
shall be not more than the maximum
amount of such deductible for the
previous contract year under this
subparagraph increased by the national
per capita Medicare+Choice growth
percentage under section 1853(c)(6) for
the year.
If the amount of the deductible under clause
(ii) is not a multiple of $50, the amount shall
be rounded to the nearest multiple of $50.
(4) MA regional plan.--The term ``MA regional plan''
means an MA plan described in section
1851(a)(2)(A)(i)--
(A) that has a network of providers that have
agreed to a contractually specified
reimbursement for covered benefits with the
organization offering the plan;
(B) that provides for reimbursement for all
covered benefits regardless of whether such
benefits are provided within such network of
providers; and
(C) the service area of which is one or more
entire MA regions.
(5) MA local plan.--The term ``MA local plan'' means
an MA plan that is not an MA regional plan.
(6) Specialized ma plans for special needs
individuals.--
(A) In general.--The term ``specialized MA
plan for special needs individuals'' means an
MA plan that exclusively serves special needs
individuals (as defined in subparagraph (B))
and that, as of January 1, 2010, meets the
applicable requirements of paragraph (2), (3),
or (4) of subsection (f), as the case may be.
(B) Special needs individual.--The term
``special needs individual'' means an MA
eligible individual who--
(i) is institutionalized (as defined
by the Secretary);
(ii) is entitled to medical
assistance under a State plan under
title XIX; or
(iii) meets such requirements as the
Secretary may determine would benefit
from enrollment in such a specialized
MA plan described in subparagraph (A)
for individuals with severe or
disabling chronic conditions who have
one or more comorbid and medically
complex chronic conditions that are
substantially disabling or life
threatening, have a high risk of
hospitalization or other significant
adverse health outcomes, and require
specialized delivery systems across
domains of care.
The Secretary may waive application of section
1851(a)(3)(B) in the case of an individual
described in clause (i), (ii), or (iii) of this
subparagraph and may apply rules similar to the
rules of section 1894(c)(4) for continued
eligibility of special needs individuals.
(c) Other References to Other Terms.--
(1) Medicare+choice eligible individual.--The term
``Medicare+Choice eligible individual'' is defined in
section 1851(a)(3).
(2) Medicare+choice payment area.--The term
``Medicare+Choice payment area'' is defined in section
1853(d).
(3) National per capita medicare+choice growth
percentage.--The ``national per capita Medicare+Choice
growth percentage'' is defined in section 1853(c)(6).
(4) Medicare+choice monthly basic beneficiary
premium; medicare+choice monthly supplemental
beneficiary premium.--The terms ``Medicare+Choice
monthly basic beneficiary premium'' and
``Medicare+Choice monthly supplemental beneficiary
premium'' are defined in section 1854(a)(2).
(5) MA local area.--The term ``MA local area'' is
defined in section 1853(d)(2).
(d) Coordinated Acute and Long-Term Care Benefits Under a
Medicare+Choice Plan.--Nothing in this part shall be construed
as preventing a State from coordinating benefits under a
medicaid plan under title XIX with those provided under a
Medicare+Choice plan in a manner that assures continuity of a
full-range of acute care and long-term care services to poor
elderly or disabled individuals eligible for benefits under
this title and under such plan.
(e) Restriction on Enrollment for Certain Medicare+Choice
Plans.--
(1) In general.--In the case of a Medicare+Choice
religious fraternal benefit society plan described in
paragraph (2), notwithstanding any other provision of
this part to the contrary and in accordance with
regulations of the Secretary, the society offering the
plan may restrict the enrollment of individuals under
this part to individuals who are members of the church,
convention, or group described in paragraph (3)(B) with
which the society is affiliated.
(2) Medicare+choice religious fraternal benefit
society plan described.--For purposes of this
subsection, a Medicare+Choice religious fraternal
benefit society plan described in this paragraph is a
Medicare+Choice plan described in section 1851(a)(2)
that--
(A) is offered by a religious fraternal
benefit society described in paragraph (3) only
to members of the church, convention, or group
described in paragraph (3)(B); and
(B) permits all such members to enroll under
the plan without regard to health status-
related factors.
Nothing in this subsection shall be construed as
waiving any plan requirements relating to financial
solvency.
(3) Religious fraternal benefit society defined.--For
purposes of paragraph (2)(A), a ``religious fraternal
benefit society'' described in this section is an
organization that--
(A) is described in section 501(c)(8) of the
Internal Revenue Code of 1986 and is exempt
from taxation under section 501(a) of such Act;
(B) is affiliated with, carries out the
tenets of, and shares a religious bond with, a
church or convention or association of churches
or an affiliated group of churches;
(C) offers, in addition to a Medicare+Choice
religious fraternal benefit society plan,
health coverage to individuals not entitled to
benefits under this title who are members of
such church, convention, or group; and
(D) does not impose any limitation on
membership in the society based on any health
status-related factor.
(4) Payment adjustment.--Under regulations of the
Secretary, in the case of individuals enrolled under
this part under a Medicare+Choice religious fraternal
benefit society plan described in paragraph (2), the
Secretary shall provide for such adjustment to the
payment amounts otherwise established under section
1854 as may be appropriate to assure an appropriate
payment level, taking into account the actuarial
characteristics and experience of such individuals.
(f) Requirements Regarding Enrollment in Specialized MA Plans
for Special Needs Individuals.--
(1) Requirements for enrollment.--In the case of a
specialized MA plan for special needs individuals (as
defined in subsection (b)(6)), notwithstanding any
other provision of this part and in accordance with
regulations of the Secretary and for periods before
January 1, 2019, the plan may restrict the enrollment
of individuals under the plan to individuals who are
within one or more classes of special needs
individuals.
(2) Additional requirements for institutional snps.--
In the case of a specialized MA plan for special needs
individuals described in subsection (b)(6)(B)(i), the
applicable requirements described in this paragraph are
as follows:
(A) Each individual that enrolls in the plan
on or after January 1, 2010, is a special needs
individuals described in subsection
(b)(6)(B)(i). In the case of an individual who
is living in the community but requires an
institutional level of care, such individual
shall not be considered a special needs
individual described in subsection (b)(6)(B)(i)
unless the determination that the individual
requires an institutional level of care was
made--
(i) using a State assessment tool of
the State in which the individual
resides; and
(ii) by an entity other than the
organization offering the plan.
(B) The plan meets the requirements described
in paragraph (5).
(C) If applicable, the plan meets the
requirement described in paragraph (7).
(3) Additional requirements for dual snps.--In the
case of a specialized MA plan for special needs
individuals described in subsection (b)(6)(B)(ii), the
applicable requirements described in this paragraph are
as follows:
(A) Each individual that enrolls in the plan
on or after January 1, 2010, is a special needs
individuals described in subsection
(b)(6)(B)(ii).
(B) The plan meets the requirements described
in paragraph (5).
(C) The plan provides each prospective
enrollee, prior to enrollment, with a
comprehensive written statement (using
standardized content and format established by
the Secretary) that describes--
(i) the benefits and cost-sharing
protections that the individual is
entitled to under the State Medicaid
program under title XIX; and
(ii) which of such benefits and cost-
sharing protections are covered under
the plan.
Such statement shall be included with any
description of benefits offered by the plan.
(D) The plan has a contract with the State
Medicaid agency to provide benefits, or arrange
for benefits to be provided, for which such
individual is entitled to receive as medical
assistance under title XIX. Such benefits may
include long-term care services consistent with
State policy.
(E) If applicable, the plan meets the
requirement described in paragraph (7).
(4) Additional requirements for severe or disabling
chronic condition snps.--In the case of a specialized
MA plan for special needs individuals described in
subsection (b)(6)(B)(iii), the applicable requirements
described in this paragraph are as follows:
(A) Each individual that enrolls in the plan
on or after January 1, 2010, is a special needs
individual described in subsection
(b)(6)(B)(iii).
(B) The plan meets the requirements described
in paragraph (5).
(C) If applicable, the plan meets the
requirement described in paragraph (7).
(5) Care management requirements for all snps.--The
requirements described in this paragraph are that the
organization offering a specialized MA plan for special
needs individuals--
(A) have in place an evidenced-based model of
care with appropriate networks of providers and
specialists; and
(B) with respect to each individual enrolled
in the plan--
(i) conduct an initial assessment and
an annual reassessment of the
individual's physical, psychosocial,
and functional needs;
(ii) develop a plan, in consultation
with the individual as feasible, that
identifies goals and objectives,
including measurable outcomes as well
as specific services and benefits to be
provided; and
(iii) use an interdisciplinary team
in the management of care.
(6) Transition and exception regarding restriction on
enrollment.--
(A) In general.--Subject to subparagraph (C),
the Secretary shall establish procedures for
the transition of applicable individuals to--
(i) a Medicare Advantage plan that is
not a specialized MA plan for special
needs individuals (as defined in
subsection (b)(6)); or
(ii) the original medicare fee-for-
service program under parts A and B.
(B) Applicable individuals.--For purposes of
clause (i), the term ``applicable individual''
means an individual who--
(i) is enrolled under a specialized
MA plan for special needs individuals
(as defined in subsection (b)(6)); and
(ii) is not within the 1 or more of
the classes of special needs
individuals to which enrollment under
the plan is restricted to.
(C) Exception.--The Secretary shall provide
for an exception to the transition described in
subparagraph (A) for a limited period of time
for individuals enrolled under a specialized MA
plan for special needs individuals described in
subsection (b)(6)(B)(ii) who are no longer
eligible for medical assistance under title
XIX.
(D) Timeline for initial transition.--The
Secretary shall ensure that applicable
individuals enrolled in a specialized MA plan
for special needs individuals (as defined in
subsection (b)(6)) prior to January 1, 2010,
are transitioned to a plan or the program
described in subparagraph (A) by not later than
January 1, 2013.
(7) Authority to require special needs plans be ncqa
approved.--For 2012 and subsequent years, the Secretary
shall require that a Medicare Advantage organization
offering a specialized MA plan for special needs
individuals be approved by the National Committee for
Quality Assurance (based on standards established by
the Secretary).
(g) Special Rules for Senior Housing Facility Plans.--
(1) In general.--In the case of a Medicare Advantage
senior housing facility plan described in paragraph
(2), notwithstanding any other provision of this part
to the contrary and in accordance with regulations of
the Secretary, the service area of such plan may be
limited to a senior housing facility in a geographic
area.
(2) Medicare advantage senior housing facility plan
described.--For purposes of this subsection, a Medicare
Advantage senior housing facility plan is a Medicare
Advantage plan that--
(A) restricts enrollment of individuals under
this part to individuals who reside in a
continuing care retirement community (as
defined in section 1852(l)(4)(B));
(B) provides primary care services onsite and
has a ratio of accessible physicians to
beneficiaries that the Secretary determines is
adequate;
(C) provides transportation services for
beneficiaries to specialty providers outside of
the facility; and
(D) has participated (as of December 31,
2009) in a demonstration project established by
the Secretary under which such a plan was
offered for not less than 1 year.
* * * * * * *
B. Changes in Existing Law Proposed by the Bill, as Reported
In compliance with clause 3(e)(1)(B) of rule XIII of the
Rules of the House of Representatives, changes in existing law
proposed by the bill, as reported, are shown as follows
(existing law proposed to be omitted is enclosed in black
brackets, new matter is printed in italics, existing law in
which no change is proposed is shown in roman):
Changes in Existing Law Made by the Bill, as Reported
In compliance with clause 3(e)(1)(B) of rule XIII of the
Rules of the House of Representatives, changes in existing law
proposed by the bill, as reported, are shown as follows (new
matter is printed in italics and existing law in which no
change is proposed is shown in roman):
SOCIAL SECURITY ACT
* * * * * * *
TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND DISABLED
* * * * * * *
Part C--Medicare+Choice Program
eligibility, election, and enrollment
Sec. 1851. (a) Choice of Medicare Benefits Through
Medicare+Choice Plans.--
(1) In general.--Subject to the provisions of this
section, each Medicare+Choice eligible individual (as
defined in paragraph (3)) is entitled to elect to
receive benefits (other than qualified prescription
drug benefits) under this title--
(A) through the original medicare fee-for-
service program under parts A and B, or
(B) through enrollment in a Medicare+Choice
plan under this part,
and may elect qualified prescription drug coverage in
accordance with section 1860D-1.
(2) Types of medicare+choice plans that may be
available.--A Medicare+Choice plan may be any of the
following types of plans of health insurance:
(A) Coordinated care plans (including
regional plans).--
(i) In general.--Coordinated care
plans which provide health care
services, including but not limited to
health maintenance organization plans
(with or without point of service
options), plans offered by provider-
sponsored organizations (as defined in
section 1855(d)), and regional or local
preferred provider organization plans
(including MA regional plans).
(ii) Specialized ma plans for special
needs individuals.--Specialized MA
plans for special needs individuals (as
defined in section 1859(b)(6)) may be
any type of coordinated care plan.
(B) Combination of msa plan and contributions
to medicare+choice msa.--An MSA plan, as
defined in section 1859(b)(3), and a
contribution into a Medicare+Choice medical
savings account (MSA).
(C) Private fee-for-service plans.--A
Medicare+Choice private fee-for-service plan,
as defined in section 1859(b)(2).
(3) Medicare+choice [eligible individual.--]
[(A) In general.--In this title, subject to
subparagraph (B),] eligible individual._In this
title, the term ``Medicare+Choice eligible
individual'' means an individual who is
entitled to benefits under part A and enrolled
under part B.
[(B) Special rule for end-stage renal
disease.--Such term shall not include an
individual medically determined to have end-
stage renal disease, except that--
[(i) an individual who develops end-
stage renal disease while enrolled in a
Medicare+Choice plan may continue to be
enrolled in that plan; and
[(ii) in the case of such an
individual who is enrolled in a
Medicare+Choice plan under clause (i)
(or subsequently under this clause), if
the enrollment is discontinued under
circumstances described in subsection
(e)(4)(A), then the individual will be
treated as a ``Medicare+Choice eligible
individual'' for purposes of electing
to continue enrollment in another
Medicare+Choice plan.
An individual who develops end-stage renal
disease while enrolled in a reasonable cost
reimbursement contract under section 1876(h)
shall be treated as an MA eligible individual
for purposes of applying the deemed enrollment
under subsection (c)(4).]
(b) Special Rules.--
(1) Residence requirement.--
(A) In general.--Except as the Secretary may
otherwise provide and except as provided in
subparagraph (C), an individual is eligible to
elect a Medicare+Choice plan offered by a
Medicare+Choice organization only if the plan
serves the geographic area in which the
individual resides.
(B) Continuation of enrollment permitted.--
Pursuant to rules specified by the Secretary,
the Secretary shall provide thatan MA local
plan may offer to all individuals residing in a
geographic area the option to continue
enrollment in the plan, notwithstanding that
the individual no longer resides in the service
area of the plan, so long as the plan provides
that individuals exercising this option have,
as part of the benefits under the original
medicare fee-for-service program option,
reasonable access within that geographic area
to the full range of basic benefits, subject to
reasonable cost sharing liability in obtaining
such benefits.
(C) Continuation of enrollment permitted
where service changed.--Notwithstanding
subparagraph (A) and in addition to
subparagraph (B), if a Medicare+Choice
organization eliminates from its service area a
Medicare+Choice payment area that was
previously within its service area, the
organization may elect to offer individuals
residing in all or portions of the affected
area who would otherwise be ineligible to
continue enrollment the option to continue
enrollment in an MA local plan it offers so
long as--
(i) the enrollee agrees to receive
the full range of basic benefits
(excluding emergency and urgently
needed care) exclusively at facilities
designated by the organization within
the plan service area; and
(ii) there is no other
Medicare+Choice plan offered in the
area in which the enrollee resides at
the time of the organization's
election.
(2) Special rule for certain individuals covered
under fehbp or eligible for veterans or military health
benefits, veterans.--
(A) FEHBP.--An individual who is enrolled in
a health benefit plan under chapter 89 of title
5, United States Code, is not eligible to
enroll in an MSA plan until such time as the
Director of the Office of Management and Budget
certifies to the Secretary that the Office of
Personnel Management has adopted policies which
will ensure that the enrollment of such
individuals in such plans will not result in
increased expenditures for the Federal
Government for health benefit plans under such
chapter.
(B) VA and dod.--The Secretary may apply
rules similar to the rules described in
subparagraph (A) in the case of individuals who
are eligible for health care benefits under
chapter 55 of title 10, United States Code, or
under chapter 17 of title 38 of such Code.
(3) Limitation on eligibility of qualified medicare
beneficiaries and other medicaid beneficiaries to
enroll in an msa plan.--An individual who is a
qualified medicare beneficiary (as defined in section
1905(p)(1)), a qualified disabled and working
individual (described in section 1905(s)), an
individual described in section 1902(a)(10)(E)(iii), or
otherwise entitled to medicare cost-sharing under a
State plan under title XIX is not eligible to enroll in
an MSA plan.
(4) Coverage under msa plans.--
(A) In general.--Under rules established by
the Secretary, an individual is not eligible to
enroll (or continue enrollment) in an MSA plan
for a year unless the individual provides
assurances satisfactory to the Secretary that
the individual will reside in the United States
for at least 183 days during the year.
(B) Evaluation.--The Secretary shall
regularly evaluate the impact of permitting
enrollment in MSA plans under this part on
selection (including adverse selection), use of
preventive care, access to care, and the
financial status of the Trust Funds under this
title.
(C) Reports.--The Secretary shall submit to
Congress periodic reports on the numbers of
individuals enrolled in such plans and on the
evaluation being conducted under subparagraph
(B).
(c) Process for Exercising Choice.--
(1) In general.--The Secretary shall establish a
process through which elections described in subsection
(a) are made and changed, including the form and manner
in which such elections are made and changed. Subject
to paragraph (4), such elections shall be made or
changed only during coverage election periods specified
under subsection (e) and shall become effective as
provided in subsection (f).
(2) Coordination through medicare+choice
organizations.--
(A) Enrollment.--Such process shall permit an
individual who wishes to elect a
Medicare+Choice plan offered by a
Medicare+Choice organization to make such
election through the filing of an appropriate
election form with the organization.
(B) Disenrollment.--Such process shall permit
an individual, who has elected a
Medicare+Choice plan offered by a
Medicare+Choice organization and who wishes to
terminate such election, to terminate such
election through the filing of an appropriate
election form with the organization.
(3) Default.--
(A) Initial election.--
(i) In general.--Subject to clause
(ii), an individual who fails to make
an election during an initial election
period under subsection (e)(1) is
deemed to have chosen the original
medicare fee-for-service program
option.
(ii) Seamless continuation of
coverage.--The Secretary may establish
procedures under which an individual
who is enrolled in a health plan (other
than Medicare+Choice plan) offered by a
Medicare+Choice organization at the
time of the initial election period and
who fails to elect to receive coverage
other than through the organization is
deemed to have elected the
Medicare+Choice plan offered by the
organization (or, if the organization
offers more than one such plan, such
plan or plans as the Secretary
identifies under such procedures).
(B) Continuing periods.--An individual who
has made (or is deemed to have made) an
election under this section is considered to
have continued to make such election until such
time as--
(i) the individual changes the
election under this section, or
(ii) the Medicare+Choice plan with
respect to which such election is in
effect is discontinued or, subject to
subsection (b)(1)(B), no longer serves
the area in which the individual
resides.
(4) Deemed enrollment relating to converted
reasonable cost reimbursement contracts.--
(A) In general.--On the first day of the
annual, coordinated election period under
subsection (e)(3) for plan years beginning on
or after January 1, 2017, an MA eligible
individual described in clause (i) or (ii) of
subparagraph (B) is deemed, unless the
individual elects otherwise, to have elected to
receive benefits under this title through an
applicable MA plan (and shall be enrolled in
such plan) beginning with such plan year, if--
(i) the individual is enrolled in a
reasonable cost reimbursement contract
under section 1876(h) in the previous
plan year;
(ii) such reasonable cost
reimbursement contract was extended or
renewed for the last reasonable cost
reimbursement contract year of the
contract (as described in subclause (I)
of section 1876(h)(5)(C)(iv)) pursuant
to such section;
(iii) the eligible organization that
is offering such reasonable cost
reimbursement contract provided the
notice described in subclause (III) of
such section that the contract was to
be converted;
(iv) the applicable MA plan--
(I) is the plan that was
converted from the reasonable
cost reimbursement contract
described in clause (iii);
(II) is offered by the same
entity (or an organization
affiliated with such entity
that has a common ownership
interest of control) that
entered into such contract; and
(III) is offered in the
service area where the
individual resides;
(v) in the case of reasonable cost
reimbursement contracts that provide
coverage under parts A and B (and, to
the extent the Secretary determines it
to be feasible, contracts that provide
only part B coverage), the difference
between the estimated individual costs
(as determined applicable by the
Secretary) for the applicable MA plan
and such costs for the predecessor cost
plan does not exceed a threshold
established by the Secretary; and
(vi) the applicable MA plan--
(I) provides coverage for
enrollees transitioning from
the converted reasonable cost
reimbursement contract to such
plan to maintain current
providers of services and
suppliers and course of
treatment at the time of
enrollment for a period of at
least 90 days after enrollment;
and
(II) during such period, pays
such providers of services and
suppliers for items and
services furnished to the
enrollee an amount that is not
less than the amount of payment
applicable for such items and
services under the original
Medicare fee-for-service
program under parts A and B.
(B) MA eligible individuals described.--
(i) Without prescription drug
coverage.--An MA eligible individual
described in this clause, with respect
to a plan year, is an MA eligible
individual who is enrolled in a
reasonable cost reimbursement contract
under section 1876(h) in the previous
plan year and who is not, for such
previous plan year, enrolled in a
prescription drug plan under part D,
including coverage under section 1860D-
22.
(ii) With prescription drug
coverage.--An MA eligible individual
described in this clause, with respect
to a plan year, is an MA eligible
individual who is enrolled in a
reasonable cost reimbursement contract
under section 1876(h) in the previous
plan year and who, for such previous
plan year, is enrolled in a
prescription drug plan under part D--
(I) through such contract; or
(II) through a prescription
drug plan, if the sponsor of
such plan is the same entity
(or an organization affiliated
with such entity) that entered
into such contract.
(C) Applicable ma plan defined.--In this
paragraph, the term ``applicable MA plan''
means, in the case of an individual described
in--
(i) subparagraph (B)(i), an MA plan
that is not an MA-PD plan; and
(ii) subparagraph (B)(ii), an MA-PD
plan.
(D) Identification and notification of deemed
individuals.--Not later than 45 days before the
first day of the annual, coordinated election
period under subsection (e)(3) for plan years
beginning on or after January 1, 2017, the
Secretary shall identify and notify the
individuals who will be subject to deemed
elections under subparagraph (A) on the first
day of such period.
(d) Providing Information To Promote Informed Choice.--
(1) In general.--The Secretary shall provide for
activities under this subsection to broadly disseminate
information to medicare beneficiaries (and prospective
medicare beneficiaries) on the coverage options
provided under this section in order to promote an
active, informed selection among such options.
(2) Provision of notice.--
(A) Open season notification.--At least 15
days before the beginning of each annual,
coordinated election period (as defined in
subsection (e)(3)(B)), the Secretary shall mail
to each Medicare+Choice eligible individual
residing in an area the following:
(i) General information.--The general
information described in paragraph (3).
(ii) List of plans and comparison of
plan options.--A list identifying the
Medicare+Choice plans that are (or will
be) available to residents of the area
and information described in paragraph
(4) concerning such plans. Such
information shall be presented in a
comparative form.
(iii) Additional information.--Any
other information that the Secretary
determines will assist the individual
in making the election under this
section, including any additional
information that individuals determined
to have end-stage renal disease may
need to make informed decisions with
respect to such an election.
The mailing of such information shall be
coordinated, to the extent practicable, with
the mailing of any annual notice under section
1804.
(B) Notification to newly eligible
medicare+choice eligible individuals.--To the
extent practicable, the Secretary shall, not
later than 30 days before the beginning of the
initial Medicare+Choice enrollment period for
an individual described in subsection (e)(1),
mail to the individual the information
described in subparagraph (A).
(ii) Notification related to certain
deemed elections.--The Secretary shall
require a Medicare Advantage
organization that is offering a
Medicare Advantage plan that has been
converted from a reasonable cost
reimbursement contract pursuant to
section 1876(h)(5)(C)(iv) to mail, not
later than 30 days prior to the first
day of the annual, coordinated election
period under subsection (e)(3) of a
year, to any individual enrolled under
such contract and identified by the
Secretary under subsection (c)(4)(D)
for such year--
(I) a notification that such
individual will, on such day,
be deemed to have made an
election with respect to such
plan to receive benefits under
this title through an MA plan
or MA-PD plan (and shall be
enrolled in such plan) for the
next plan year under subsection
(c)(4)(A), but that the
individual may make a different
election during the annual,
coordinated election period for
such year;
(II) the information
described in subparagraph (A);
(III) a description of the
differences between such MA
plan or MA-PD plan and the
reasonable cost reimbursement
contract in which the
individual was most recently
enrolled with respect to
benefits covered under such
plans, including cost-sharing,
premiums, drug coverage, and
provider networks;
(IV) information about the
special period for elections
under subsection (e)(2)(F); and
(V) other information the
Secretary may specify.
(C) Form.--The information disseminated under
this paragraph shall be written and formatted
using language that is easily understandable by
medicare beneficiaries.
(D) Periodic updating.--The information
described in subparagraph (A) shall be updated
on at least an annual basis to reflect changes
in the availability of Medicare+Choice plans
and the benefits and Medicare+Choice monthly
basic and supplemental beneficiary premiums for
such plans.
(3) General information.--General information under
this paragraph, with respect to coverage under this
part during a year, shall include the following:
(A) Benefits under original medicare fee-for-
service program option.--A general description
of the benefits covered under the original
medicare fee-for-service program under parts A
and B, including--
(i) covered items and services,
(ii) beneficiary cost sharing, such
as deductibles, coinsurance, and
copayment amounts, and
(iii) any beneficiary liability for
balance billing.
(B) Election procedures.--Information and
instructions on how to exercise election
options under this section.
(C) Rights.--A general description of
procedural rights (including grievance and
appeals procedures) of beneficiaries under the
original medicare fee-for-service program and
the Medicare+Choice program and the right to be
protected against discrimination based on
health status-related factors under section
1852(b).
(D) Information on medigap and medicare
select.--A general description of the benefits,
enrollment rights, and other requirements
applicable to medicare supplemental policies
under section 1882 and provisions relating to
medicare select policies described in section
1882(t).
(E) Potential for contract termination.--The
fact that a Medicare+Choice organization may
terminate its contract, refuse to renew its
contract, or reduce the service area included
in its contract, under this part, and the
effect of such a termination, nonrenewal, or
service area reduction may have on individuals
enrolled with the Medicare+Choice plan under
this part.
(F) Catastrophic coverage and single
deductible.--In the case of an MA regional
plan, a description of the catastrophic
coverage and single deductible applicable under
the plan.
(4) Information comparing plan options.--Information
under this paragraph, with respect to a Medicare+Choice
plan for a year, shall include the following:
(A) Benefits.--The benefits covered under the
plan, including the following:
(i) Covered items and services beyond
those provided under the original
medicare fee-for-service program.
(ii) Any beneficiary cost sharing,
including information on the single
deductible (if applicable) under
section 1858(b)(1).
(iii) Any maximum limitations on out-
of-pocket expenses.
(iv) In the case of an MSA plan,
differences in cost sharing, premiums,
and balance billing under such a plan
compared to under other Medicare+Choice
plans.
(v) In the case of a Medicare+Choice
private fee-for-service plan,
differences in cost sharing, premiums,
and balance billing under such a plan
compared to under other Medicare+Choice
plans.
(vi) The extent to which an enrollee
may obtain benefits through out-of-
network health care providers.
(vii) The extent to which an enrollee
may select among in-network providers
and the types of providers
participating in the plan's network.
(viii) The organization's coverage of
emergency and urgently needed care.
(B) Premiums.--
(i) In general.--The monthly amount
of the premium charged to an
individual.
(ii) Reductions.--The reduction in
part B premiums, if any.
(C) Service area.--The service area of the
plan.
(D) Quality and performance.--To the extent
available, plan quality and performance
indicators for the benefits under the plan (and
how they compare to such indicators under the
original medicare fee-for-service program under
parts A and B in the area involved),
including--
(i) disenrollment rates for medicare
enrollees electing to receive benefits
through the plan for the previous 2
years (excluding disenrollment due to
death or moving outside the plan's
service area),
(ii) information on medicare enrollee
satisfaction,
(iii) information on health outcomes,
and
(iv) the recent record regarding
compliance of the plan with
requirements of this part (as
determined by the Secretary).
(E) Supplemental benefits.--Supplemental
health care benefits, including any reductions
in cost-sharing under section 1852(a)(3) and
the terms and conditions (including premiums)
for such benefits.
(5) Maintaining a toll-free number and internet
site.--The Secretary shall maintain a toll-free number
for inquiries regarding Medicare+Choice options and the
operation of this part in all areas in which
Medicare+Choice plans are offered and an Internet site
through which individuals may electronically obtain
information on such options and Medicare+Choice plans.
(6) Use of non-federal entities.--The Secretary may
enter into contracts with non-Federal entities to carry
out activities under this subsection.
(7) Provision of information.--A Medicare+Choice
organization shall provide the Secretary with such
information on the organization and each
Medicare+Choice plan it offers as may be required for
the preparation of the information referred to in
paragraph (2)(A).
(e) Coverage Election Periods.--
(1) Initial choice upon eligibility to make election
if medicare+choice plans available to individual.--If,
at the time an individual first becomes entitled to
benefits under part A and enrolled under part B, there
is one or more Medicare+Choice plans offered in the
area in which the individual resides, the individual
shall make the election under this section during a
period specified by the Secretary such that if the
individual elects a Medicare+Choice plan during the
period, coverage under the plan becomes effective as of
the first date on which the individual may receive such
coverage. If any portion of an individual's initial
enrollment period under part B occurs after the end of
the annual, coordinated election period described in
paragraph (3)(B)(iii), the initial enrollment period
under this part shall further extend through the end of
the individual's initial enrollment period under part
B.
(2) Open enrollment and disenrollment
opportunities.--Subject to paragraph (5)--
(A) Continuous open enrollment and
disenrollment through 2005.--At any time during
the period beginning January 1, 1998, and
ending on December 31, 2005, a Medicare+Choice
eligible individual may change the election
under subsection (a)(1).
(B) Continuous open enrollment and
disenrollment for first 6 months during 2006.--
(i) In general.--Subject to clause
(ii), subparagraph(C)(iii), and
subparagraph (D), at any time during
the first 6 months of 2006, or, if the
individual first becomes a
Medicare+Choice eligible individual
during 2006, during the first 6 months
during 2006 in which the individual is
a Medicare+Choice eligible individual,
a Medicare+Choice eligible individual
may change the election under
subsection (a)(1).
(ii) Limitation of one change.--An
individual may exercise the right under
clause (i) only once. The limitation
under this clause shall not apply to
changes in elections effected during an
annual, coordinated election period
under paragraph (3) or during a special
enrollment period under the first
sentence of paragraph (4).
(C) Annual 45-day period for disenrollment
from ma plans to elect to receive benefits
under the original medicare fee-for-service
program.--Subject to subparagraph (D), at any
time during the first 45 days of a year
(beginning with 2011), an individual who is
enrolled in a Medicare Advantage plan may
change the election under subsection (a)(1),
but only with respect to coverage under the
original medicare fee-for-service program under
parts A and B, and may elect qualified
prescription drug coverage in accordance with
section 1860D-1.
(D) Continuous open enrollment for
institutionalized individuals.--At any time
after 2005 in the case of a Medicare+Choice
eligible individual who is institutionalized
(as defined by the Secretary), the individual
may elect under subsection (a)(1)--
(i) to enroll in a Medicare+Choice
plan; or
(ii) to change the Medicare+Choice
plan in which the individual is
enrolled.
(E) Limited continuous open enrollment of
original fee-for-service enrollees in medicare
advantage non-prescription drug plans.--
(i) In general.--On any date during
the period beginning on January 1,
2007, and ending on July 31, 2007, on
which a Medicare Advantage eligible
individual is an unenrolled fee-for-
service individual (as defined in
clause (ii)), the individual may elect
under subsection (a)(1) to enroll in a
Medicare Advantage plan that is not an
MA-PD plan.
(ii) Unenrolled fee-for-service
individual defined.--In this
subparagraph, the term ``unenrolled
fee-for-service individual'' means,
with respect to a date, a Medicare
Advantage eligible individual who--
(I) is receiving benefits
under this title through
enrollment in the original
medicare fee-for-service
program under parts A and B;
(II) is not enrolled in an MA
plan on such date; and
(III) as of such date is not
otherwise eligible to elect to
enroll in an MA plan.
(iii) Limitation of one change during
the applicable period.--An individual
may exercise the right under clause (i)
only once during the period described
in such clause.
(iv) No effect on coverage under a
prescription drug plan.--Nothing in
this subparagraph shall be construed as
permitting an individual exercising the
right under clause (i)--
(I) who is enrolled in a
prescription drug plan under
part D, to disenroll from such
plan or to enroll in a
different prescription drug
plan; or
(II) who is not enrolled in a
prescription drug plan, to
enroll in such a plan.
(F) Special period for certain deemed
elections.--
(i) In general.--At any time during
the period beginning after the last day
of the annual, coordinated election
period under paragraph (3) in which an
individual is deemed to have elected to
enroll in an MA plan or MA-PD plan
under subsection (c)(4) and ending on
the last day of February of the first
plan year for which the individual is
enrolled in such plan, such individual
may change the election under
subsection (a)(1) (including changing
the MA plan or MA-PD plan in which the
individual is enrolled).
(ii) Limitation of one change.--An
individual may exercise the right under
clause (i) only once during the
applicable period described in such
clause. The limitation under this
clause shall not apply to changes in
elections effected during an annual,
coordinated election period under
paragraph (3) or during a special
enrollment period under paragraph (4).
(3) Annual, coordinated election period.--
(A) In general.--Subject to paragraph (5),
each individual who is eligible to make an
election under this section may change such
election during an annual, coordinated election
period.
(B) Annual, coordinated election period.--For
purposes of this section, the term ``annual,
coordinated election period'' means--
(i) with respect to a year before
2002, the month of November before such
year;
(ii) with respect to 2002, 2003,
2004, and 2005, the period beginning on
November 15 and ending on December 31
of the year before such year;
(iii) with respect to 2006, the
period beginning on November 15, 2005,
and ending on May 15, 2006;
(iv) with respect to 2007, 2008,
2009, and 2010, the period beginning on
November 15 and ending on December 31
of the year before such year; and
(v) with respect to 2012 and
succeeding years, the period beginning
on October 15 and ending on December 7
of the year before such year.
(C) Medicare+choice health information
fairs.--During the fall season of each year
(beginning with 1999) and during the period
described in subparagraph (B)(iii), in
conjunction with the annual coordinated
election period defined in subparagraph (B),
the Secretary shall provide for a nationally
coordinated educational and publicity campaign
to inform Medicare+Choice eligible individuals
about Medicare+Choice plans and the election
process provided under this section.
(D) Special information campaigns.--During
November 1998 the Secretary shall provide for
an educational and publicity campaign to inform
Medicare+Choice eligible individuals about the
availability of Medicare+Choice plans, and
eligible organizations with risk-sharing
contracts under section 1876, offered in
different areas and the election process
provided under this section. During the period
described in subparagraph (B)(iii), the
Secretary shall provide for an educational and
publicity campaign to inform MA eligible
individuals about the availability of MA plans
(including MA-PD plans) offered in different
areas and the election process provided under
this section.
(4) Special election periods.--Effective as of
January 1, 2006, an individual may discontinue an
election of a Medicare+Choice plan offered by a
Medicare+Choice organization other than during an
annual, coordinated election period and make a new
election under this section if--
(A)(i) the certification of the organization
or plan under this part has been terminated, or
the organization or plan has notified the
individual of an impending termination of such
certification; or
(ii) the organization has terminated or
otherwise discontinued providing the plan in
the area in which the individual resides, or
has notified the individual of an impending
termination or discontinuation of such plan;
(B) the individual is no longer eligible to
elect the plan because of a change in the
individual's place of residence or other change
in circumstances (specified by the Secretary,
but not including termination of the
individual's enrollment on the basis described
in clause (i) or (ii) of subsection (g)(3)(B));
(C) the individual demonstrates (in
accordance with guidelines established by the
Secretary) that--
(i) the organization offering the
plan substantially violated a material
provision of the organization's
contract under this part in relation to
the individual (including the failure
to provide an enrollee on a timely
basis medically necessary care for
which benefits are available under the
plan or the failure to provide such
covered care in accordance with
applicable quality standards); or
(ii) the organization (or an agent or
other entity acting on the
organization's behalf) materially
misrepresented the plan's provisions in
marketing the plan to the individual;
or
(D) the individual meets such other
exceptional conditions as the Secretary may
provide.
Effective as of January 1, 2006, an individual who,
upon first becoming eligible for benefits under part A
at age 65, enrolls in a Medicare+Choice plan under this
part, the individual may discontinue the election of
such plan, and elect coverage under the original fee-
for-service plan, at any time during the 12-month
period beginning on the effective date of such
enrollment.
(5) Special rules for msa plans.--Notwithstanding the
preceding provisions of this subsection, an
individual--
(A) may elect an MSA plan only during--
(i) an initial open enrollment period
described in paragraph (1), or
(ii) an annual, coordinated election
period described in paragraph (3)(B);
(B) subject to subparagraph (C), may not
discontinue an election of an MSA plan except
during the periods described in clause (ii) or
(iii) of subparagraph (A) and under the first
sentence of paragraph (4); and
(C) who elects an MSA plan during an annual,
coordinated election period, and who never
previously had elected such a plan, may revoke
such election, in a manner determined by the
Secretary, by not later than December 15
following the date of the election.
(6) Open enrollment periods.--Subject to paragraph
(5), a Medicare+Choice organization--
(A) shall accept elections or changes to
elections during the initial enrollment periods
described in paragraph (1), during the period
described in paragraph (2)(F), during the month
of November 1998 and during the annual,
coordinated election period under paragraph (3)
for each subsequent year, and during special
election periods described in the first
sentence of paragraph (4); and
(B) may accept other changes to elections at
such other times as the organization provides.
(f) Effectiveness of Elections and Changes of Elections.--
(1) During initial coverage election period.--An
election of coverage made during the initial coverage
election period under subsection (e)(1) subsection
(e)(1) shall take effect upon the date the individual
becomes entitled to benefits under part A and enrolled
under part B, except as the Secretary may provide
(consistent with section 1838) in order to prevent
retroactive coverage.
(2) During continuous open enrollment periods.--An
election or change of coverage made under subsection
(e)(2) shall take effect with the first day of the
first calendar month following the date on which the
election or change is made.
(3) Annual, coordinated election period.--An election
or change of coverage made during an annual,
coordinated election period (as defined in subsection
(e)(3)(B), other than the period described in clause
(iii) of such subsection) in a year shall take effect
as of the first day of the following year.
(4) Other periods.--An election or change of coverage
made during any other period under subsection (e)(4)
shall take effect in such manner as the Secretary
provides in a manner consistent (to the extent
practicable) with protecting continuity of health
benefit coverage.
(g) Guaranteed Issue and Renewal.--
(1) In general.--Except as provided in this
subsection, a Medicare+Choice organization shall
provide that at any time during which elections are
accepted under this section with respect to a
Medicare+Choice plan offered by the organization, the
organization will accept without restrictions
individuals who are eligible to make such election.
(2) Priority.--If the Secretary determines that a
Medicare+Choice organization, in relation to a
Medicare+Choice plan it offers, has a capacity limit
and the number of Medicare+Choice eligible individuals
who elect the plan under this section exceeds the
capacity limit, the organization may limit the election
of individuals of the plan under this section but only
if priority in election is provided--
(A) first to such individuals as have elected
the plan at the time of the determination, and
(B) then to other such individuals in such a
manner that does not discriminate, on a basis
described in section 1852(b), among the
individuals (who seek to elect the plan).
The preceding sentence shall not apply if it would
result in the enrollment of enrollees substantially
nonrepresentative, as determined in accordance with
regulations of the Secretary, of the medicare
population in the service area of the plan.
(3) Limitation on termination of election.--
(A) In general.--Subject to subparagraph (B),
a Medicare+Choice organization may not for any
reason terminate the election of any individual
under this section for a Medicare+Choice plan
it offers.
(B) Basis for termination of election.--A
Medicare+Choice organization may terminate an
individual's election under this section with
respect to a Medicare+Choice plan it offers
if--
(i) any Medicare+Choice monthly basic
and supplemental beneficiary premiums
required with respect to such plan are
not paid on a timely basis (consistent
with standards under section 1856 that
provide for a grace period for late
payment of such premiums),
(ii) the individual has engaged in
disruptive behavior (as specified in
such standards), or
(iii) the plan is terminated with
respect to all individuals under this
part in the area in which the
individual resides.
(C) Consequence of termination.--
(i) Terminations for cause.--Any
individual whose election is terminated
under clause (i) or (ii) of
subparagraph (B) is deemed to have
elected the original medicare fee-for-
service program option described in
subsection (a)(1)(A).
(ii) Termination based on plan
termination or service area
reduction.--Any individual whose
election is terminated under
subparagraph (B)(iii) shall have a
special election period under
subsection (e)(4)(A) in which to change
coverage to coverage under another
Medicare+Choice plan. Such an
individual who fails to make an
election during such period is deemed
to have chosen to change coverage to
the original medicare fee-for-service
program option described in subsection
(a)(1)(A).
(D) Organization obligation with respect to
election forms.--Pursuant to a contract under
section 1857, each Medicare+Choice organization
receiving an election form under subsection
(c)(2) shall transmit to the Secretary (at such
time and in such manner as the Secretary may
specify) a copy of such form or such other
information respecting the election as the
Secretary may specify.
(h) Approval of Marketing Material and Application Forms.--
(1) Submission.--No marketing material or application
form may be distributed by a Medicare+Choice
organization to (or for the use of) Medicare+Choice
eligible individuals unless--
(A) at least 45 days (or 10 days in the case
described in paragraph (5)) before the date of
distribution the organization has submitted the
material or form to the Secretary for review,
and
(B) the Secretary has not disapproved the
distribution of such material or form.
(2) Review.--The standards established under section
1856 shall include guidelines for the review of any
material or form submitted and under such guidelines
the Secretary shall disapprove (or later require the
correction of) such material or form if the material or
form is materially inaccurate or misleading or
otherwise makes a material misrepresentation.
(3) Deemed approval (1-stop shopping).--In the case
of material or form that is submitted under paragraph
(1)(A) to the Secretary or a regional office of the
Department of Health and Human Services and the
Secretary or the office has not disapproved the
distribution of marketing material or form under
paragraph (1)(B) with respect to a Medicare+Choice plan
in an area, the Secretary is deemed not to have
disapproved such distribution in all other areas
covered by the plan and organization except with regard
to that portion of such material or form that is
specific only to an area involved.
(4) Prohibition of certain marketing practices.--Each
Medicare+Choice organization shall conform to fair
marketing standards, in relation to Medicare+Choice
plans offered under this part, included in the
standards established under section 1856. Such
standards--
(A) shall not permit a Medicare+Choice
organization to provide for, subject to
subsection (j)(2)(C), cash, gifts, prizes, or
other monetary rebates as an inducement for
enrollment or otherwise;
(B) may include a prohibition against a
Medicare+Choice organization (or agent of such
an organization) completing any portion of any
election form used to carry out elections under
this section on behalf of any individual;
(C) shall not permit a Medicare Advantage
organization (or the agents, brokers, and other
third parties representing such organization)
to conduct the prohibited activities described
in subsection (j)(1); and
(D) shall only permit a Medicare Advantage
organization (and the agents, brokers, and
other third parties representing such
organization) to conduct the activities
described in subsection (j)(2) in accordance
with the limitations established under such
subsection.
(5) Special treatment of marketing material following
model marketing language.--In the case of marketing
material of an organization that uses, without
modification, proposed model language specified by the
Secretary, the period specified in paragraph (1)(A)
shall be reduced from 45 days to 10 days.
(6) Required inclusion of plan type in plan name.--
For plan years beginning on or after January 1, 2010, a
Medicare Advantage organization must ensure that the
name of each Medicare Advantage plan offered by the
Medicare Advantage organization includes the plan type
of the plan (using standard terminology developed by
the Secretary).
(7) Strengthening the ability of states to act in
collaboration with the secretary to address fraudulent
or inappropriate marketing practices.--
(A) Appointment of agents and brokers.--Each
Medicare Advantage organization shall--
(i) only use agents and brokers who
have been licensed under State law to
sell Medicare Advantage plans offered
by the Medicare Advantage organization;
(ii) in the case where a State has a
State appointment law, abide by such
law; and
(iii) report to the applicable State
the termination of any such agent or
broker, including the reasons for such
termination (as required under
applicable State law).
(B) Compliance with state information
requests.--Each Medicare Advantage organization
shall comply in a timely manner with any
request by a State for information regarding
the performance of a licensed agent, broker, or
other third party representing the Medicare
Advantage organization as part of an
investigation by the State into the conduct of
the agent, broker, or other third party.
(i) Effect of Election of Medicare+Choice Plan Option.--
(1) Payments to organizations.--Subject to sections
1852(a)(5), 1853(a)(4), 1853(g), 1853(h), 1886(d)(11),
1886(h)(3)(D), and 1853(m), payments under a contract
with a Medicare+Choice organization under section
1853(a) with respect to an individual electing a
Medicare+Choice plan offered by the organization shall
be instead of the amounts which (in the absence of the
contract) would otherwise be payable under parts A and
B for items and services furnished to the individual.
(2) Only organization entitled to payment.--Subject
to sections 1853(a)(4), 1853(e), 1853(g), 1853(h),
1857(f)(2), 1858(h), 1886(d)(11), and 1886(h)(3)(D),
only the Medicare+Choice organization shall be entitled
to receive payments from the Secretary under this title
for services furnished to the individual.
(3) FFS payment for expenses for kidney
acquisitions.--Paragraphs (1) and (2) do not apply with
respect to expenses for organ acquisitions for kidney
transplants described in section 1852(a)(1)(B)(i).
(j) Prohibited Activities Described and Limitations on the
Conduct of Certain Other Activities.--
(1) Prohibited activities described.--The following
prohibited activities are described in this paragraph:
(A) Unsolicited means of direct contact.--Any
unsolicited means of direct contact of
prospective enrollees, including soliciting
door-to-door or any outbound telemarketing
without the prospective enrollee initiating
contact.
(B) Cross-selling.--The sale of other non-
health related products (such as annuities and
life insurance) during any sales or marketing
activity or presentation conducted with respect
to a Medicare Advantage plan.
(C) Meals.--The provision of meals of any
sort, regardless of value, to prospective
enrollees at promotional and sales activities.
(D) Sales and marketing in health care
settings and at educational events.--Sales and
marketing activities for the enrollment of
individuals in Medicare Advantage plans that
are conducted--
(i) in health care settings in areas
where health care is delivered to
individuals (such as physician offices
and pharmacies), except in the case
where such activities are conducted in
common areas in health care settings;
and
(ii) at educational events.
(2) Limitations.--The Secretary shall establish
limitations with respect to at least the following:
(A) Scope of marketing appointments.--The
scope of any appointment with respect to the
marketing of a Medicare Advantage plan. Such
limitation shall require advance agreement with
a prospective enrollee on the scope of the
marketing appointment and documentation of such
agreement by the Medicare Advantage
organization. In the case where the marketing
appointment is in person, such documentation
shall be in writing.
(B) Co-branding.--The use of the name or logo
of a co-branded network provider on Medicare
Advantage plan membership and marketing
materials.
(C) Limitation of gifts to nominal dollar
value.--The offering of gifts and other
promotional items other than those that are of
nominal value (as determined by the Secretary)
to prospective enrollees at promotional
activities.
(D) Compensation.--The use of compensation
other than as provided under guidelines
established by the Secretary. Such guidelines
shall ensure that the use of compensation
creates incentives for agents and brokers to
enroll individuals in the Medicare Advantage
plan that is intended to best meet their health
care needs.
(E) Required training, annual retraining, and
testing of agents, brokers, and other third
parties.--The use by a Medicare Advantage
organization of any individual as an agent,
broker, or other third party representing the
organization that has not completed an initial
training and testing program and does not
complete an annual retraining and testing
program.
benefits and beneficiary protections
Sec. 1852. (a) Basic Benefits.--
(1) Requirement.--
(A) In general.--Except as provided in
section 1859(b)(3) for MSA plans and except as
provided in paragraph (6) for MA regional
plans, each Medicare+Choice plan shall provide
to members enrolled under this part, through
providers and other persons that meet the
applicable requirements of this title and part
A of title XI, benefits under the original
medicare fee-for-service program option (and,
for plan years before 2006, additional benefits
required under section 1854(f)(1)(A)).
(B) Benefits under the original medicare fee-
for-service program option defined.--
(i) In general.--For purposes of this
part, the term ``benefits under the
original medicare fee-for-service
program option'' means those items and
services (other than hospice care or
coverage for organ acquisitions for
kidney transplants, including as
covered under section 1881(d)) for
which benefits are available under
parts A and B to individuals entitled
to benefits under part A and enrolled
under part B, with cost-sharing for
those services as required under parts
A and B or, subject to clause (iii), an
actuarially equivalent level of cost-
sharing as determined in this part.
(ii) Special rule for regional
plans.--In the case of an MA regional
plan in determining an actuarially
equivalent level of cost-sharing with
respect to benefits under the original
medicare fee-for-service program
option, there shall only be taken into
account, with respect to the
application of section 1858(b)(2), such
expenses only with respect to
subparagraph (A) of such section.
(iii) Limitation on variation of cost
sharing for certain benefits.--Subject
to clause (v), cost-sharing for
services described in clause (iv) shall
not exceed the cost-sharing required
for those services under parts A and B.
(iv) Services described.--The
following services are described in
this clause:
(I) Chemotherapy
administration services.
(II) Renal dialysis services
(as defined in section
1881(b)(14)(B)).
(III) Skilled nursing care.
(IV) Such other services that
the Secretary determines
appropriate (including services
that the Secretary determines
require a high level of
predictability and transparency
for beneficiaries).
(v) Exception.--In the case of
services described in clause (iv) for
which there is no cost-sharing required
under parts A and B, cost-sharing may
be required for those services in
accordance with clause (i).
(2) Satisfaction of requirement.--
(A) In general.--A Medicare+Choice plan
(other than an MSA plan) offered by a
Medicare+Choice organization satisfies
paragraph (1)(A), with respect to benefits for
items and services furnished other than through
a provider or other person that has a contract
with the organization offering the plan, if the
plan provides payment in an amount so that--
(i) the sum of such payment amount
and any cost sharing provided for under
the plan, is equal to at least
(ii) the total dollar amount of
payment for such items and services as
would otherwise be authorized under
parts A and B (including any balance
billing permitted under such parts).
(B) Reference to related provisions.--For
provision relating to--
(i) limitations on balance billing
against Medicare+Choice organizations
for non-contract providers, see
sections 1852(k) and 1866(a)(1)(O), and
(ii) limiting actuarial value of
enrollee liability for covered
benefits, see section 1854(e).
(C) Election of uniform coverage
determination.--In the case of a
Medicare+Choice organization that offers a
Medicare+Choice plan in an area in which more
than one local coverage determination is
applied with respect to different parts of the
area, the organization may elect to have the
local coverage determination for the part of
the area that is most beneficial to
Medicare+Choice enrollees (as identified by the
Secretary) apply with respect to all
Medicare+Choice enrollees enrolled in the plan.
(3) Supplemental benefits.--
(A) Benefits included subject to secretary's
approval.--Each Medicare+Choice organization
may provide to individuals enrolled under this
part, other than under an MSA plan (without
affording those individuals an option to
decline the coverage), supplemental health care
benefits that the Secretary may approve. The
Secretary shall approve any such supplemental
benefits unless the Secretary determines that
including such supplemental benefits would
substantially discourage enrollment by
Medicare+Choice eligible individuals with the
organization.
(B) At enrollees' option.--
(i) In general.--Subject to clause
(ii), a Medicare+Choice organization
may provide to individuals enrolled
under this part supplemental health
care benefits that the individuals may
elect, at their option, to have
covered.
(ii) Special rule for msa plans.--A
Medicare+Choice organization may not
provide, under an MSA plan,
supplemental health care benefits that
cover the deductible described in
section 1859(b)(2)(B). In applying the
previous sentence, health benefits
described in section 1882(u)(2)(B)
shall not be treated as covering such
deductible.
(C) Application to Medicare+Choice private
fee-for-service plans.--Nothing in this
paragraph shall be construed as preventing a
Medicare+Choice private fee-for-service plan
from offering supplemental benefits that
include payment for some or all of the balance
billing amounts permitted consistent with
section 1852(k) and coverage of additional
services that the plan finds to be medically
necessary. Such benefits may include reductions
in cost-sharing below the actuarial value
specified in section 1854(e)(4)(B).
(4) Organization as secondary payer.--Notwithstanding
any other provision of law, a Medicare+Choice
organization may (in the case of the provision of items
and services to an individual under a Medicare+Choice
plan under circumstances in which payment under this
title is made secondary pursuant to section 1862(b)(2))
charge or authorize the provider of such services to
charge, in accordance with the charges allowed under a
law, plan, or policy described in such section--
(A) the insurance carrier, employer, or other
entity which under such law, plan, or policy is
to pay for the provision of such services, or
(B) such individual to the extent that the
individual has been paid under such law, plan,
or policy for such services.
(5) National coverage determinations and legislative
changes in benefits.--If there is a national coverage
determination or legislative change in benefits
required to be provided under this part made in the
period beginning on the date of an announcement under
section 1853(b) and ending on the date of the next
announcement under such section and the Secretary
projects that the determination will result in a
significant change in the costs to a Medicare+Choice
organization of providing the benefits that are the
subject of such national coverage determination and
that such change in costs was not incorporated in the
determination of the annual Medicare+Choice capitation
rate under section 1853 included in the announcement
made at the beginning of such period, then, unless
otherwise required by law--
(A) such determination or legislative change
in benefits shall not apply to contracts under
this part until the first contract year that
begins after the end of such period, and
(B) if such coverage determination or
legislative change provides for coverage of
additional benefits or coverage under
additional circumstances, section 1851(i)(1)
shall not apply to payment for such additional
benefits or benefits provided under such
additional circumstances until the first
contract year that begins after the end of such
period.
The projection under the previous sentence shall be
based on an analysis by the Chief Actuary of the
Centers for Medicare & Medicaid Services of the
actuarial costs associated with the coverage
determination or legislative change in benefits.
(6) Special benefit rules for regional plans.--In the
case of an MA plan that is an MA regional plan,
benefits under the plan shall include the benefits
described in paragraphs (1) and (2) of section 1858(b).
(7) Limitation on cost-sharing for dual eligibles and
qualified medicare beneficiaries.--In the case of an
individual who is a full-benefit dual eligible
individual (as defined in section 1935(c)(6)) or a
qualified medicare beneficiary (as defined in section
1905(p)(1)) and who is enrolled in a specialized
Medicare Advantage plan for special needs individuals
described in section 1859(b)(6)(B)(ii), the plan may
not impose cost-sharing that exceeds the amount of
cost-sharing that would be permitted with respect to
the individual under title XIX if the individual were
not enrolled in such plan.
(b) Antidiscrimination.--
(1) [Beneficiaries.--
[(A) In general.--A Medicare+Choice
organization] Beneficiaries._A Medicare
Advantage organization may not deny, limit, or
condition the coverage or provision of benefits
under this part, for individuals permitted to
be enrolled with the organization under this
part, based on any health status-related factor
described in section 2702(a)(1) of the Public
Health Service Act. The Secretary shall not
approve a plan of an organization if the
Secretary determines that the design of the
plan and its benefits are likely to
substantially discourage enrollment by certain
MA eligible individuals with the organization.
[(B) Construction.--Subparagraph (A) shall
not be construed as requiring a Medicare+Choice
organization to enroll individuals who are
determined to have end-stage renal disease,
except as provided under section
1851(a)(3)(B).]
(2) Providers.--A Medicare+Choice organization shall
not discriminate with respect to participation,
reimbursement, or indemnification as to any provider
who is acting within the scope of the provider's
license or certification under applicable State law,
solely on the basis of such license or certification.
This paragraph shall not be construed to prohibit a
plan from including providers only to the extent
necessary to meet the needs of the plan's enrollees or
from establishing any measure designed to maintain
quality and control costs consistent with the
responsibilities of the plan.
(c) Disclosure Requirements.--
(1) Detailed description of plan provisions.--A
Medicare+Choice organization shall disclose, in clear,
accurate, and standardized form to each enrollee with a
Medicare+Choice plan offered by the organization under
this part at the time of enrollment and at least
annually thereafter, the following information
regarding such plan:
(A) Service area.--The plan's service area.
(B) Benefits.--Benefits offered under the
plan, including information described in
section 1851(d)(3)(A) and exclusions from
coverage and, if it is an MSA plan, a
comparison of benefits under such a plan with
benefits under other Medicare+Choice plans.
(C) Access.--The number, mix, and
distribution of plan providers, out-of-network
coverage (if any) provided by the plan, and any
point-of-service option (including the
supplemental premium for such option).
(D) Out-of-area coverage.--Out-of-area
coverage provided by the plan.
(E) Emergency coverage.--Coverage of
emergency services, including--
(i) the appropriate use of emergency
services, including use of the 911
telephone system or its local
equivalent in emergency situations and
an explanation of what constitutes an
emergency situation;
(ii) the process and procedures of
the plan for obtaining emergency
services; and
(iii) the locations of (I) emergency
departments, and (II) other settings,
in which plan physicians and hospitals
provide emergency services and post-
stabilization care.
(F) Supplemental benefits.--Supplemental
benefits available from the organization
offering the plan, including--
(i) whether the supplemental benefits
are optional,
(ii) the supplemental benefits
covered, and
(iii) the Medicare+Choice monthly
supplemental beneficiary premium for
the supplemental benefits.
(G) Prior authorization rules.--Rules
regarding prior authorization or other review
requirements that could result in nonpayment.
(H) Plan grievance and appeals procedures.--
All plan appeal or grievance rights and
procedures.
(I) Quality improvement program.--A
description of the organization's quality
improvement program under subsection (e).
(2) Disclosure upon request.--Upon request of a
Medicare+Choice eligible individual, a Medicare+Choice
organization must provide the following information to
such individual:
(A) The general coverage information and
general comparative plan information made
available under clauses (i) and (ii) of section
1851(d)(2)(A).
(B) Information on procedures used by the
organization to control utilization of services
and expenditures.
(C) Information on the number of grievances,
redeterminations, and appeals and on the
disposition in the aggregate of such matters.
(D) An overall summary description as to the
method of compensation of participating
physicians.
(d) Access to Services.--
(1) In general.--A Medicare+Choice organization
offering a Medicare+Choice plan may select the
providers from whom the benefits under the plan are
provided so long as--
(A) the organization makes such benefits
available and accessible to each individual
electing the plan within the plan service area
with reasonable promptness and in a manner
which assures continuity in the provision of
benefits;
(B) when medically necessary the organization
makes such benefits available and accessible 24
hours a day and 7 days a week;
(C) the plan provides for reimbursement with
respect to services which are covered under
subparagraphs (A) and (B) and which are
provided to such an individual other than
through the organization, if--
(i) the services were not emergency
services (as defined in paragraph (3)),
but (I) the services were medically
necessary and immediately required
because of an unforeseen illness,
injury, or condition, and (II) it was
not reasonable given the circumstances
to obtain the services through the
organization,
(ii) the services were renal dialysis
services and were provided other than
through the organization because the
individual was temporarily out of the
plan's service area, or
(iii) the services are maintenance
care or post-stabilization care covered
under the guidelines established under
paragraph (2);
(D) the organization provides access to
appropriate providers, including credentialed
specialists, for medically necessary treatment
and services; and
(E) coverage is provided for emergency
services (as defined in paragraph (3)) without
regard to prior authorization or the emergency
care provider's contractual relationship with
the organization.
(2) Guidelines respecting coordination of post-
stabilization care.--A Medicare+Choice plan shall
comply with such guidelines as the Secretary may
prescribe relating to promoting efficient and timely
coordination of appropriate maintenance and post-
stabilization care of an enrollee after the enrollee
has been determined to be stable under section 1867.
(3) Definition of emergency services.--In this
subsection--
(A) In general.--The term ``emergency
services'' means, with respect to an individual
enrolled with an organization, covered
inpatient and outpatient services that--
(i) are furnished by a provider that
is qualified to furnish such services
under this title, and
(ii) are needed to evaluate or
stabilize an emergency medical
condition (as defined in subparagraph
(B)).
(B) Emergency medical condition based on
prudent layperson.--The term ``emergency
medical condition'' means a medical condition
manifesting itself by acute symptoms of
sufficient severity (including severe pain)
such that a prudent layperson, who possesses an
average knowledge of health and medicine, could
reasonably expect the absence of immediate
medical attention to result in--
(i) placing the health of the
individual (or, with respect to a
pregnant woman, the health of the woman
or her unborn child) in serious
jeopardy,
(ii) serious impairment to bodily
functions, or
(iii) serious dysfunction of any
bodily organ or part.
(4) Assuring access to services in
medicare+choice private fee-for-service
plans.--In addition to any other requirements
under this part, in the case of a
Medicare+Choice private fee-for-service plan,
the organization offering the plan must
demonstrate to the Secretary that the
organization has sufficient number and range of
health care professionals and providers willing
to provide services under the terms of the
plan. Subject to paragraphs (5) and (6), the
Secretary shall find that an organization has
met such requirement with respect to any
category of health care professional or
provider if, with respect to that category of
provider--
(A) the plan has established payment
rates for covered services furnished by
that category of provider that are not
less than the payment rates provided
for under part A, part B, or both, for
such services, or
(B) the plan has contracts or
agreements (other than deemed contracts
or agreements under subsection (j)(6))
with a sufficient number and range of
providers within such category to meet
the access standards in subparagraphs
(A) through (E) of paragraph (1),
or a combination of both. The previous sentence
shall not be construed as restricting the
persons from whom enrollees under such a plan
may obtain covered benefits, except that, if a
plan entirely meets such requirement with
respect to a category of health care
professional or provider on the basis of
subparagraph (B), it may provide for a higher
beneficiary copayment in the case of health
care professionals and providers of that
category who do not have contracts or
agreements (other than deemed contracts or
agreements under subsection (j)(6)) to provide
covered services under the terms of the plan.
(5) Requirement of certain nonemployer medicare
advantage private fee-for-service plans to use
contracts with providers.--
(A) In general.--For plan year 2011 and
subsequent plan years, in the case of a
Medicare Advantage private fee-for-service plan
not described in paragraph (1) or (2) of
section 1857(i) operating in a network area (as
defined in subparagraph (B)), the plan shall
meet the access standards under paragraph (4)
in that area only through entering into written
contracts as provided for under subparagraph
(B) of such paragraph and not, in whole or in
part, through the establishment of payment
rates meeting the requirements under
subparagraph (A) of such paragraph.
(B) Network area defined.--For purposes of
subparagraph (A), the term ``network area''
means, for a plan year, an area which the
Secretary identifies (in the Secretary's
announcement of the proposed payment rates for
the previous plan year under section
1853(b)(1)(B)) as having at least 2 network-
based plans (as defined in subparagraph (C))
with enrollment under this part as of the first
day of the year in which such announcement is
made.
(C) Network-based plan defined.--
(i) In general.--For purposes of
subparagraph (B), the term ``network-
based plan'' means--
(I) except as provided in
clause (ii), a Medicare
Advantage plan that is a
coordinated care plan described
in section 1851(a)(2)(A)(i);
(II) a network-based MSA
plan; and
(III) a reasonable cost
reimbursement plan under
section 1876.
(ii) Exclusion of non-network
regional ppos.--The term ``network-
based plan'' shall not include an MA
regional plan that, with respect to the
area, meets access adequacy standards
under this part substantially through
the authority of section
422.112(a)(1)(ii) of title 42, Code of
Federal Regulations, rather than
through written contracts.
(6) Requirement of all employer medicare advantage
private fee-for-service plans to use contracts with
providers.--For plan year 2011 and subsequent plan
years, in the case of a Medicare Advantage private fee-
for-service plan that is described in paragraph (1) or
(2) of section 1857(i), the plan shall meet the access
standards under paragraph (4) only through entering
into written contracts as provided for under
subparagraph (B) of such paragraph and not, in whole or
in part, through the establishment of payment rates
meeting the requirements under subparagraph (A) of such
paragraph.
(e) Quality Improvement Program.--
(1) In general.--Each MA organization shall have an
ongoing quality improvement program for the purpose of
improving the quality of care provided to enrollees in
each MA plan offered by such organization.
(2) Chronic care improvement programs.--As part of
the quality improvement program under paragraph (1),
each MA organization shall have a chronic care
improvement program. Each chronic care improvement
program shall have a method for monitoring and
identifying enrollees with multiple or sufficiently
severe chronic conditions that meet criteria
established by the organization for participation under
the program.
(3) Data.--
(A) Collection, analysis, and reporting.--
(i) In general.--Except as provided
in clauses (ii) and (iii) with respect
to plans described in such clauses and
subject to subparagraph (B), as part of
the quality improvement program under
paragraph (1), each MA organization
shall provide for the collection,
analysis, and reporting of data that
permits the measurement of health
outcomes and other indices of quality.
With respect to MA private fee-for-
service plans and MSA plans, the
requirements under the preceding
sentence may not exceed the
requirements under this subparagraph
with respect to MA local plans that are
preferred provider organization plans,
except that, for plan year 2010, the
limitation under clause (iii) shall not
apply and such requirements shall apply
only with respect to administrative
claims data.
(ii) Special requirements for
specialized ma plans for special needs
individuals.--In addition to the data
required to be collected, analyzed, and
reported under clause (i) and
notwithstanding the limitations under
subparagraph (B), as part of the
quality improvement program under
paragraph (1), each MA organization
offering a specialized Medicare
Advantage plan for special needs
individuals shall provide for the
collection, analysis, and reporting of
data that permits the measurement of
health outcomes and other indices of
quality with respect to the
requirements described in paragraphs
(2) through (5) of subsection (f). Such
data may be based on claims data and
shall be at the plan level.
(iii) Application to local preferred
provider organizations and MA regional
plans.--Clause (i) shall apply to MA
organizations with respect to MA local
plans that are preferred provider
organization plans and to MA regional
plans only insofar as services are
furnished by providers or services,
physicians, and other health care
practitioners and suppliers that have
contracts with such organization to
furnish services under such plans.
(iv) Definition of preferred provider
organization plan.--In this
subparagraph, the term ``preferred
provider organization plan'' means an
MA plan that--
(I) has a network of
providers that have agreed to a
contractually specified
reimbursement for covered
benefits with the organization
offering the plan;
(II) provides for
reimbursement for all covered
benefits regardless of whether
such benefits are provided
within such network of
providers; and
(III) is offered by an
organization that is not
licensed or organized under
State law as a health
maintenance organization.
(B) Limitations.--
(i) Types of data.--The Secretary
shall not collect under subparagraph
(A) data on quality, outcomes, and
beneficiary satisfaction to facilitate
consumer choice and program
administration other than the types of
data that were collected by the
Secretary as of November 1, 2003.
(ii) Changes in types of data.--
Subject to subclause (iii), the
Secretary may only change the types of
data that are required to be submitted
under subparagraph (A) after submitting
to Congress a report on the reasons for
such changes that was prepared in
consultation with MA organizations and
private accrediting bodies.
(iii) Construction.--Nothing in the
subsection shall be construed as
restricting the ability of the
Secretary to carry out the duties under
section 1851(d)(4)(D).
(4) Treatment of accreditation.--
(A) In general.--The Secretary shall provide
that a Medicare+Choice organization is deemed
to meet all the requirements described in any
specific clause of subparagraph (B) if the
organization is accredited (and periodically
reaccredited) by a private accrediting
organization under a process that the Secretary
has determined assures that the accrediting
organization applies and enforces standards
that meet or exceed the standards established
under section 1856 to carry out the
requirements in such clause.
(B) Requirements described.--The provisions
described in this subparagraph are the
following:
(i) Paragraphs (1) through (3) of
this subsection (relating to quality
improvement programs).
(ii) Subsection (b) (relating to
antidiscrimination).
(iii) Subsection (d) (relating to
access to services).
(iv) Subsection (h) (relating to
confidentiality and accuracy of
enrollee records).
(v) Subsection (i) (relating to
information on advance directives).
(vi) Subsection (j) (relating to
provider participation rules).
(vii) The requirements described in
section 1860D-4(j), to the extent such
requirements apply under section 1860D-
21(c).
(C) Timely action on applications.--The
Secretary shall determine, within 210 days
after the date the Secretary receives an
application by a private accrediting
organization and using the criteria specified
in section 1865(a)(2), whether the process of
the private accrediting organization meets the
requirements with respect to any specific
clause in subparagraph (B) with respect to
which the application is made. The Secretary
may not deny such an application on the basis
that it seeks to meet the requirements with
respect to only one, or more than one, such
specific clause.
(D) Construction.--Nothing in this paragraph
shall be construed as limiting the authority of
the Secretary under section 1857, including the
authority to terminate contracts with
Medicare+Choice organizations under subsection
(c)(2) of such section.
(f) Grievance Mechanism.--Each Medicare+Choice organization
must provide meaningful procedures for hearing and resolving
grievances between the organization (including any entity or
individual through which the organization provides health care
services) and enrollees with Medicare+Choice plans of the
organization under this part.
(g) Coverage Determinations, Reconsiderations, and Appeals.--
(1) Determinations by organization.--
(A) In general.--A Medicare+Choice
organization shall have a procedure for making
determinations regarding whether an individual
enrolled with the plan of the organization
under this part is entitled to receive a health
service under this section and the amount (if
any) that the individual is required to pay
with respect to such service. Subject to
paragraph (3), such procedures shall provide
for such determination to be made on a timely
basis.
(B) Explanation of determination.--Such a
determination that denies coverage, in whole or
in part, shall be in writing and shall include
a statement in understandable language of the
reasons for the denial and a description of the
reconsideration and appeals processes.
(2) Reconsiderations.--
(A) In general.--The organization shall
provide for reconsideration of a determination
described in paragraph (1)(B) upon request by
the enrollee involved. The reconsideration
shall be within a time period specified by the
Secretary, but shall be made, subject to
paragraph (3), not later than 60 days after the
date of the receipt of the request for
reconsideration.
(B) Physician decision on certain
reconsiderations.--A reconsideration relating
to a determination to deny coverage based on a
lack of medical necessity shall be made only by
a physician with appropriate expertise in the
field of medicine which necessitates treatment
who is other than a physician involved in the
initial determination.
(3) Expedited determinations and reconsiderations.--
(A) Receipt of requests.--
(i) Enrollee requests.--An enrollee
in a Medicare+Choice plan may request,
either in writing or orally, an
expedited determination under paragraph
(1) or an expedited reconsideration
under paragraph (2) by the
Medicare+Choice organization.
(ii) Physician requests.--A
physician, regardless whether the
physician is affiliated with the
organization or not, may request,
either in writing or orally, such an
expedited determination or
reconsideration.
(B) Organization procedures.--
(i) In general.--The Medicare+Choice
organization shall maintain procedures
for expediting organization
determinations and reconsiderations
when, upon request of an enrollee, the
organization determines that the
application of the normal time frame
for making a determination (or a
reconsideration involving a
determination) could seriously
jeopardize the life or health of the
enrollee or the enrollee's ability to
regain maximum function.
(ii) Expedition required for
physician requests.--In the case of a
request for an expedited determination
or reconsideration made under
subparagraph (A)(ii), the organization
shall expedite the determination or
reconsideration if the request
indicates that the application of the
normal time frame for making a
determination (or a reconsideration
involving a determination) could
seriously jeopardize the life or health
of the enrollee or the enrollee's
ability to regain maximum function.
(iii) Timely response.--In cases
described in clauses (i) and (ii), the
organization shall notify the enrollee
(and the physician involved, as
appropriate) of the determination or
reconsideration under time limitations
established by the Secretary, but not
later than 72 hours of the time of
receipt of the request for the
determination or reconsideration (or
receipt of the information necessary to
make the determination or
reconsideration), or such longer period
as the Secretary may permit in
specified cases.
(4) Independent review of certain coverage denials.--
The Secretary shall contract with an independent,
outside entity to review and resolve in a timely manner
reconsiderations that affirm denial of coverage, in
whole or in part. The provisions of section 1869(c)(5)
shall apply to independent outside entities under
contract with the Secretary under this paragraph.
(5) Appeals.--An enrollee with a Medicare+Choice plan
of a Medicare+Choice organization under this part who
is dissatisfied by reason of the enrollee's failure to
receive any health service to which the enrollee
believes the enrollee is entitled and at no greater
charge than the enrollee believes the enrollee is
required to pay is entitled, if the amount in
controversy is $100 or more, to a hearing before the
Secretary to the same extent as is provided in section
205(b), and in any such hearing the Secretary shall
make the organization a party. If the amount in
controversy is $1,000 or more, the individual or
organization shall, upon notifying the other party, be
entitled to judicial review of the Secretary's final
decision as provided in section 205(g), and both the
individual and the organization shall be entitled to be
parties to that judicial review. In applying
subsections (b) and (g) of section 205 as provided in
this paragraph, and in applying section 205(l) thereto,
any reference therein to the Commissioner of Social
Security or the Social Security Administration shall be
considered a reference to the Secretary or the
Department of Health and Human Services, respectively.
The provisions of section 1869(b)(1)(E)(iii) shall
apply with respect to dollar amounts specified in the
first 2 sentences of this paragraph in the same manner
as they apply to the dollar amounts specified in
section 1869(b)(1)(E)(i).
(h) Confidentiality and Accuracy of Enrollee Records.--
Insofar as a Medicare+Choice organization maintains medical
records or other health information regarding enrollees under
this part, the Medicare+Choice organization shall establish
procedures--
(1) to safeguard the privacy of any individually
identifiable enrollee information;
(2) to maintain such records and information in a
manner that is accurate and timely; and
(3) to assure timely access of enrollees to such
records and information.
(i) Information on Advance Directives.--Each Medicare+Choice
organization shall meet the requirement of section 1866(f)
(relating to maintaining written policies and procedures
respecting advance directives).
(j) Rules Regarding Provider Participation.--
(1) Procedures.--Insofar as a Medicare+Choice
organization offers benefits under a Medicare+Choice
plan through agreements with physicians, the
organization shall establish reasonable procedures
relating to the participation (under an agreement
between a physician and the organization) of physicians
under such a plan. Such procedures shall include--
(A) providing notice of the rules regarding
participation,
(B) providing written notice of participation
decisions that are adverse to physicians, and
(C) providing a process within the
organization for appealing such adverse
decisions, including the presentation of
information and views of the physician
regarding such decision.
(2) Consultation in medical policies.--A
Medicare+Choice organization shall consult with
physicians who have entered into participation
agreements with the organization regarding the
organization's medical policy, quality, and medical
management procedures.
(3) Prohibiting interference with provider advice to
enrollees.--
(A) In general.--Subject to subparagraphs (B)
and (C), a Medicare+Choice organization (in
relation to an individual enrolled under a
Medicare+Choice plan offered by the
organization under this part) shall not
prohibit or otherwise restrict a covered health
care professional (as defined in subparagraph
(D)) from advising such an individual who is a
patient of the professional about the health
status of the individual or medical care or
treatment for the individual's condition or
disease, regardless of whether benefits for
such care or treatment are provided under the
plan, if the professional is acting within the
lawful scope of practice.
(B) Conscience protection.--Subparagraph (A)
shall not be construed as requiring a
Medicare+Choice plan to provide, reimburse for,
or provide coverage of a counseling or referral
service if the Medicare+Choice organization
offering the plan--
(i) objects to the provision of such
service on moral or religious grounds;
and
(ii) in the manner and through the
written instrumentalities such
Medicare+Choice organization deems
appropriate, makes available
information on its policies regarding
such service to prospective enrollees
before or during enrollment and to
enrollees within 90 days after the date
that the organization or plan adopts a
change in policy regarding such a
counseling or referral service.
(C) Construction.--Nothing in subparagraph
(B) shall be construed to affect disclosure
requirements under State law or under the
Employee Retirement Income Security Act of
1974.
(D) Health care professional defined.--For
purposes of this paragraph, the term ``health
care professional'' means a physician (as
defined in section 1861(r)) or other health
care professional if coverage for the
professional's services is provided under the
Medicare+Choice plan for the services of the
professional. Such term includes a podiatrist,
optometrist, chiropractor, psychologist,
dentist, physician assistant, physical or
occupational therapist and therapy assistant,
speech-language pathologist, audiologist,
registered or licensed practical nurse
(including nurse practitioner, clinical nurse
specialist, certified registered nurse
anesthetist, and certified nurse-midwife),
licensed certified social worker, registered
respiratory therapist, and certified
respiratory therapy technician.
(4) Limitations on physician incentive plans.--
(A) In general.--No Medicare+Choice
organization may operate any physician
incentive plan (as defined in subparagraph (B))
unless the organization provides assurances
satisfactory to the Secretary that the
following requirements are met:
(i) No specific payment is made
directly or indirectly under the plan
to a physician or physician group as an
inducement to reduce or limit medically
necessary services provided with
respect to a specific individual
enrolled with the organization.
(ii) If the plan places a physician
or physician group at substantial
financial risk (as determined by the
Secretary) for services not provided by
the physician or physician group, the
organization provides stop-loss
protection for the physician or group
that is adequate and appropriate, based
on standards developed by the Secretary
that take into account the number of
physicians placed at such substantial
financial risk in the group or under
the plan and the number of individuals
enrolled with the organization who
receive services from the physician or
group.
(B) Physician incentive plan defined.--In
this paragraph, the term ``physician incentive
plan'' means any compensation arrangement
between a Medicare+Choice organization and a
physician or physician group that may directly
or indirectly have the effect of reducing or
limiting services provided with respect to
individuals enrolled with the organization
under this part.
(5) Limitation on provider indemnification.--A
Medicare+Choice organization may not provide (directly
or indirectly) for a health care professional, provider
of services, or other entity providing health care
services (or group of such professionals, providers, or
entities) to indemnify the organization against any
liability resulting from a civil action brought for any
damage caused to an enrollee with a Medicare+Choice
plan of the organization under this part by the
organization's denial of medically necessary care.
(6) Special rules for medicare+choice private fee-
for-service plans.--For purposes of applying this part
(including subsection (k)(1)) and section
1866(a)(1)(O), a hospital (or other provider of
services), a physician or other health care
professional, or other entity furnishing health care
services is treated as having an agreement or contract
in effect with a Medicare+Choice organization (with
respect to an individual enrolled in a Medicare+Choice
private fee-for-service plan it offers), if--
(A) the provider, professional, or other
entity furnishes services that are covered
under the plan to such an enrollee; and
(B) before providing such services, the
provider, professional, or other entity --
(i) has been informed of the
individual's enrollment under the plan,
and
(ii) either--
(I) has been informed of the
terms and conditions of payment
for such services under the
plan, or
(II) is given a reasonable
opportunity to obtain
information concerning such
terms and conditions,
in a manner reasonably designed to
effect informed agreement by a
provider.
The previous sentence shall only apply in the absence
of an explicit agreement between such a provider,
professional, or other entity and the Medicare+Choice
organization.
(7) Promotion of E-Prescribing by MA Plans.--
(A) In general.--An MA-PD plan may provide
for a separate payment or otherwise provide for
a differential payment for a participating
physician that prescribes covered part D drugs
in accordance with an electronic prescription
drug program that meets standards established
under section 1860D-4(e).
(B) Considerations.--Such payment may take
into consideration the costs of the physician
in implementing such a program and may also be
increased for those participating physicians
who significantly increase--
(i) formulary compliance;
(ii) lower cost, therapeutically
equivalent alternatives;
(iii) reductions in adverse drug
interactions; and
(iv) efficiencies in filing
prescriptions through reduced
administrative costs.
(C) Structure.--Additional or increased
payments under this subsection may be
structured in the same manner as medication
therapy management fees are structured under
section 1860D-4(c)(2)(E).
(k) Treatment of Services Furnished by Certain Providers.--
(1) In general.--Except as provided in paragraph (2),
a physician or other entity (other than a provider of
services) that does not have a contract establishing
payment amounts for services furnished to an individual
enrolled under this part with a Medicare+Choice
organization described in section 1851(a)(2)(A) or with
an organization offering an MSA plan shall accept as
payment in full for covered services under this title
that are furnished to such an individual the amounts
that the physician or other entity could collect if the
individual were not so enrolled. Any penalty or other
provision of law that applies to such a payment with
respect to an individual entitled to benefits under
this title (but not enrolled with a Medicare+Choice
organization under this part) also applies with respect
to an individual so enrolled.
(2) Application to medicare+choice private fee-for-
service plans.--
(A) Balance billing limits under
medicare+choice private fee-for-service plans
in case of contract providers.--
(i) In general.--In the case of an
individual enrolled in a
Medicare+Choice private fee-for-service
plan under this part, a physician,
provider of services, or other entity
that has a contract (including through
the operation of subsection (j)(6))
establishing a payment rate for
services furnished to the enrollee
shall accept as payment in full for
covered services under this title that
are furnished to such an individual an
amount not to exceed (including any
deductibles, coinsurance, copayments,
or balance billing otherwise permitted
under the plan) an amount equal to 115
percent of such payment rate.
(ii) Procedures to enforce limits.--
The Medicare+Choice organization that
offers such a plan shall establish
procedures, similar to the procedures
described in section 1848(g)(1)(A), in
order to carry out the previous
sentence.
(iii) Assuring enforcement.--If the
Medicare+Choice organization fails to
establish and enforce procedures
required under clause (ii), the
organization is subject to intermediate
sanctions under section 1857(g).
(B) Enrollee liability for noncontract
providers.--For provision--
(i) establishing minimum payment rate
in the case of noncontract providers
under a Medicare+Choice private fee-
for-service plan, see section
1852(a)(2); or
(ii) limiting enrollee liability in
the case of covered services furnished
by such providers, see paragraph (1)
and section 1866(a)(1)(O).
(C) Information on beneficiary liability.--
(i) In general.--Each Medicare+Choice
organization that offers a
Medicare+Choice private fee-for-service
plan shall provide that enrollees under
the plan who are furnished services for
which payment is sought under the plan
are provided an appropriate explanation
of benefits (consistent with that
provided under parts A and B and, if
applicable, under medicare supplemental
policies) that includes a clear
statement of the amount of the
enrollee's liability (including any
liability for balance billing
consistent with this subsection) with
respect to payments for such services.
(ii) Advance notice before receipt of
inpatient hospital services and certain
other services.--In addition, such
organization shall, in its terms and
conditions of payments to hospitals for
inpatient hospital services and for
other services identified by the
Secretary for which the amount of the
balance billing under subparagraph (A)
could be substantial, require the
hospital to provide to the enrollee,
before furnishing such services and if
the hospital imposes balance billing
under subparagraph (A)--
(I) notice of the fact that
balance billing is permitted
under such subparagraph for
such services, and
(II) a good faith estimate of
the likely amount of such
balance billing (if any), with
respect to such services, based
upon the presenting condition
of the enrollee.
(l) Return to Home Skilled Nursing Facilities for Covered
Post-Hospital Extended Care Services.--
(1) Ensuring return to home snf.--
(A) In general.--In providing coverage of
post-hospital extended care services, a
Medicare+Choice plan shall provide for such
coverage through a home skilled nursing
facility if the following conditions are met:
(i) Enrollee election.--The enrollee
elects to receive such coverage through
such facility.
(ii) SNF agreement.--The facility has
a contract with the Medicare+Choice
organization for the provision of such
services, or the facility agrees to
accept substantially similar payment
under the same terms and conditions
that apply to similarly situated
skilled nursing facilities that are
under contract with the Medicare+Choice
organization for the provision of such
services and through which the enrollee
would otherwise receive such services.
(B) Manner of payment to home snf.--The
organization shall provide payment to the home
skilled nursing facility consistent with the
contract or the agreement described in
subparagraph (A)(ii), as the case may be.
(2) No less favorable coverage.--The coverage
provided under paragraph (1) (including scope of
services, cost-sharing, and other criteria of coverage)
shall be no less favorable to the enrollee than the
coverage that would be provided to the enrollee with
respect to a skilled nursing facility the post-hospital
extended care services of which are otherwise covered
under the Medicare+Choice plan.
(3) Rule of construction.--Nothing in this subsection
shall be construed to do the following:
(A) To require coverage through a skilled
nursing facility that is not otherwise
qualified to provide benefits under part A for
medicare beneficiaries not enrolled in a
Medicare+Choice plan.
(B) To prevent a skilled nursing facility
from refusing to accept, or imposing conditions
upon the acceptance of, an enrollee for the
receipt of post-hospital extended care
services.
(4) Definitions.--In this subsection:
(A) Home skilled nursing facility.--The term
``home skilled nursing facility'' means, with
respect to an enrollee who is entitled to
receive post-hospital extended care services
under a Medicare+Choice plan, any of the
following skilled nursing facilities:
(i) SNF residence at time of
admission.--The skilled nursing
facility in which the enrollee resided
at the time of admission to the
hospital preceding the receipt of such
post-hospital extended care services.
(ii) SNF in continuing care
retirement community.--A skilled
nursing facility that is providing such
services through a continuing care
retirement community (as defined in
subparagraph (B)) which provided
residence to the enrollee at the time
of such admission.
(iii) SNF residence of spouse at time
of discharge.--The skilled nursing
facility in which the spouse of the
enrollee is residing at the time of
discharge from such hospital.
(B) Continuing care retirement community.--
The term ``continuing care retirement
community'' means, with respect to an enrollee
in a Medicare+Choice plan, an arrangement under
which housing and health-related services are
provided (or arranged) through an organization
for the enrollee under an agreement that is
effective for the life of the enrollee or for a
specified period.
payments to medicare+choice organizations
Sec. 1853. (a) Payments to Organizations.--
(1) Monthly payments.--
(A) In general.--Under a contract under
section 1857 and subject to subsections (e),
(g), (i), and (l) and section 1859(e)(4), the
Secretary shall make monthly payments under
this section in advance to each Medicare+Choice
organization, with respect to coverage of an
individual under this part in a Medicare+Choice
payment area for a month, in an amount
determined as follows:
(i) Payment before 2006.--For years
before 2006, the payment amount shall
be equal to \1/12\ of the annual MA
capitation rate (as calculated under
subsection (c)(1)) with respect to that
individual for that area, adjusted
under subparagraph (C) and reduced by
the amount of any reduction elected
under section 1854(f)(1)(E).
(ii) Payment for original fee-for-
service benefits beginning with 2006.--
For years beginning with 2006, the
amount specified in subparagraph (B).
(B) Payment amount for original fee-for-
service benefits beginning with 2006.--
(i) Payment of bid for plans with
bids below benchmark.--In the case of a
plan for which there are average per
capita monthly savings described in
section 1854(b)(3)(C) or 1854(b)(4)(C),
as the case may be, the amount
specified in this subparagraph is equal
to the unadjusted MA statutory non-drug
monthly bid amount, adjusted under
subparagraph (C) and (if applicable)
under subparagraphs (F) and (G), plus
the amount (if any) of any rebate under
subparagraph (E).
(ii) Payment of benchmark for plans
with bids at or above benchmark.--In
the case of a plan for which there are
no average per capita monthly savings
described in section 1854(b)(3)(C) or
1854(b)(4)(C), as the case may be, the
amount specified in this subparagraph
is equal to the MA area-specific non-
drug monthly benchmark amount, adjusted
under subparagraph (C) and (if
applicable) under subparagraphs (F) and
(G).
(iii) Payment of benchmark for msa
plans.--Notwithstanding clauses (i) and
(ii), in the case of an MSA plan, the
amount specified in this subparagraph
is equal to the MA area-specific non-
drug monthly benchmark amount, adjusted
under subparagraph (C).
(iv) Authority to apply frailty
adjustment under pace payment rules for
certain specialized ma plans for
special needs individuals.--
(I) In general.--
Notwithstanding the preceding
provisions of this paragraph,
for plan year 2011 and
subsequent plan years, in the
case of a plan described in
subclause (II), the Secretary
may apply the payment rules
under section 1894(d) (other
than paragraph (3) of such
section) rather than the
payment rules that would
otherwise apply under this
part, but only to the extent
necessary to reflect the costs
of treating high concentrations
of frail individuals.
(II) Plan described.--A plan
described in this subclause is
a specialized MA plan for
special needs individuals
described in section
1859(b)(6)(B)(ii) that is fully
integrated with capitated
contracts with States for
Medicaid benefits, including
long-term care, and that have
similar average levels of
frailty (as determined by the
Secretary) as the PACE program.
(C) Demographic adjustment, including
adjustment for health status.--
(i) In general.--The Secretary shall
adjust the payment amount under
subparagraph (A)(i) and the amount
specified under subparagraph (B)(i),
(B)(ii), and (B)(iii) for such risk
factors as age, disability status,
gender, institutional status, and such
other factors as the Secretary
determines to be appropriate, including
adjustment for health status under
paragraph (3), so as to ensure
actuarial equivalence. The Secretary
may add to, modify, or substitute for
such adjustment factors if such changes
will improve the determination of
actuarial equivalence.
(ii) Application of coding
adjustment.--For 2006 and each
subsequent year:
(I) In applying the
adjustment under clause (i) for
health status to payment
amounts, the Secretary shall
ensure that such adjustment
reflects changes in treatment
and coding practices in the
fee-for-service sector and
reflects differences in coding
patterns between Medicare
Advantage plans and providers
under part A and B to the
extent that the Secretary has
identified such differences.
(II) In order to ensure
payment accuracy, the Secretary
shall annually conduct an
analysis of the differences
described in subclause (I). The
Secretary shall complete such
analysis by a date necessary to
ensure that the results of such
analysis are incorporated on a
timely basis into the risk
scores for 2008 and subsequent
years. In conducting such
analysis, the Secretary shall
use data submitted with respect
to 2004 and subsequent years,
as available and updated as
appropriate.
(III) In calculating each
year's adjustment, the
adjustment factor shall be for
2014, not less than the
adjustment factor applied for
2010, plus 1.5 percentage
points; for each of years 2015
through 2018, not less than the
adjustment factor applied for
the previous year, plus 0.25
percentage point; and for 2019
and each subsequent year, not
less than 5.9 percent.
(IV) Such adjustment shall be
applied to risk scores until
the Secretary implements risk
adjustment using Medicare
Advantage diagnostic, cost, and
use data.
(iii) Improvements to risk adjustment
for special needs individuals with
chronic health conditions.--
(I) In general.--For 2011 and
subsequent years, for purposes
of the adjustment under clause
(i) with respect to individuals
described in subclause (II),
the Secretary shall use a risk
score that reflects the known
underlying risk profile and
chronic health status of
similar individuals. Such risk
score shall be used instead of
the default risk score for new
enrollees in Medicare Advantage
plans that are not specialized
MA plans for special needs
individuals (as defined in
section 1859(b)(6)).
(II) Individuals described.--
An individual described in this
subclause is a special needs
individual described in
subsection (b)(6)(B)(iii) who
enrolls in a specialized MA
plan for special needs
individuals on or after January
1, 2011.
(III) Evaluation.--For 2011
and periodically thereafter,
the Secretary shall evaluate
and revise the risk adjustment
system under this subparagraph
in order to, as accurately as
possible, account for higher
medical and care coordination
costs associated with frailty,
individuals with multiple,
comorbid chronic conditions,
and individuals with a
diagnosis of mental illness,
and also to account for costs
that may be associated with
higher concentrations of
beneficiaries with those
conditions.
(IV) Publication of
evaluation and revisions.--The
Secretary shall publish, as
part of an announcement under
subsection (b), a description
of any evaluation conducted
under subclause (III) during
the preceding year and any
revisions made under such
subclause as a result of such
evaluation.
(D) Separate payment for federal drug
subsidies.--In the case of an enrollee in an
MA-PD plan, the MA organization offering such
plan also receives--
(i) subsidies under section 1860D-15
(other than under subsection (g)); and
(ii) reimbursement for premium and
cost-sharing reductions for low-income
individuals under section 1860D-
14(c)(1)(C).
(E) Payment of rebate for plans with bids
below benchmark.--In the case of a plan for
which there are average per capita monthly
savings described in section 1854(b)(3)(C) or
1854(b)(4)(C), as the case may be, the amount
specified in this subparagraph is the amount of
the monthly rebate computed under section
1854(b)(1)(C)(i) for that plan and year (as
reduced by the amount of any credit provided
under section 1854(b)(1)(C)(iv)).
(F) Adjustment for intra-area variations.--
(i) Intra-regional variations.--In
the case of payment with respect to an
MA regional plan for an MA region, the
Secretary shall also adjust the amounts
specified under subparagraphs (B)(i)
and (B)(ii) in a manner to take into
account variations in MA local payment
rates under this part among the
different MA local areas included in
such region.
(ii) Intra-service area variations.--
In the case of payment with respect to
an MA local plan for a service area
that covers more than one MA local
area, the Secretary shall also adjust
the amounts specified under
subparagraphs (B)(i) and (B)(ii) in a
manner to take into account variations
in MA local payment rates under this
part among the different MA local areas
included in such service area.
(G) Adjustment relating to risk adjustment.--
The Secretary shall adjust payments with
respect to MA plans as necessary to ensure
that--
(i) the sum of--
(I) the monthly payment made
under subparagraph (A)(ii); and
(II) the MA monthly basic
beneficiary premium under
section 1854(b)(2)(A); equals
(ii) the unadjusted MA statutory non-
drug monthly bid amount, adjusted in
the manner described in subparagraph
(C) and, for an MA regional plan,
subparagraph (F).
(H) Special rule for end-stage renal
disease.--The Secretary shall establish
separate rates of payment to a Medicare+Choice
organization with respect to classes of
individuals determined to have end-stage renal
disease and enrolled in a Medicare+Choice plan
of the organization. Such rates of payment
shall be actuarially equivalent to rates that
would have been paid with respect to other
enrollees in the MA payment area (or such other
area as specified by the Secretary) under the
provisions of this section as in effect before
the date of the enactment of the Medicare
Prescription Drug, Improvement, and
Modernization Act of 2003. In accordance with
regulations, the Secretary shall provide for
the application of the seventh sentence of
section 1881(b)(7) to payments under this
section covering the provision of renal
dialysis treatment in the same manner as such
sentence applies to composite rate payments
described in such sentence. In establishing
such rates, the Secretary shall provide for
appropriate adjustments to increase each rate
to reflect the demonstration rate (including
the risk adjustment methodology associated with
such rate) of the social health maintenance
organization end-stage renal disease capitation
demonstrations (established by section 2355 of
the Deficit Reduction Act of 1984, as amended
by section 13567(b) of the Omnibus Budget
Reconciliation Act of 1993), and shall compute
such rates by taking into account such factors
as renal treatment modality, age, and the
underlying cause of the end-stage renal
disease. The Secretary may apply the
competitive bidding methodology provided for in
this section, with appropriate adjustments to
account for the risk adjustment methodology
applied to end stage renal disease payments.
(2) Adjustment to reflect number of enrollees.--
(A) In general.--The amount of payment under
this subsection may be retroactively adjusted
to take into account any difference between the
actual number of individuals enrolled with an
organization under this part and the number of
such individuals estimated to be so enrolled in
determining the amount of the advance payment.
(B) Special rule for certain enrollees.--
(i) In general.--Subject to clause
(ii), the Secretary may make
retroactive adjustments under
subparagraph (A) to take into account
individuals enrolled during the period
beginning on the date on which the
individual enrolls with a
Medicare+Choice organization under a
plan operated, sponsored, or
contributed to by the individual's
employer or former employer (or the
employer or former employer of the
individual's spouse) and ending on the
date on which the individual is
enrolled in the organization under this
part, except that for purposes of
making such retroactive adjustments
under this subparagraph, such period
may not exceed 90 days.
(ii) Exception.--No adjustment may be
made under clause (i) with respect to
any individual who does not certify
that the organization provided the
individual with the disclosure
statement described in section 1852(c)
at the time the individual enrolled
with the organization.
(3) Establishment of risk adjustment factors.--
(A) Report.--The Secretary shall develop, and
submit to Congress by not later than March 1,
1999, a report on the method of risk adjustment
of payment rates under this section, to be
implemented under subparagraph (C), that
accounts for variations in per capita costs
based on health status. Such report shall
include an evaluation of such method by an
outside, independent actuary of the actuarial
soundness of the proposal.
(B) Data collection.--In order to carry out
this paragraph, the Secretary shall require
Medicare+Choice organizations (and eligible
organizations with risk-sharing contracts under
section 1876) to submit data regarding
inpatient hospital services for periods
beginning on or after July 1, 1997, and data
regarding other services and other information
as the Secretary deems necessary for periods
beginning on or after July 1, 1998. The
Secretary may not require an organization to
submit such data before January 1, 1998.
(C) Initial implementation.--
(i) In general.--The Secretary shall
first provide for implementation of a
risk adjustment methodology that
accounts for variations in per capita
costs based on health status and other
demographic factors for payments by no
later than January 1, 2000.
(ii) Phase-in.--Except as provided in
clause (iv), such risk adjustment
methodology shall be implemented in a
phased-in manner so that the
methodology insofar as it makes
adjustments to capitation rates for
health status applies to--
(I) 10 percent of \1/12\ of
the annual Medicare+Choice
capitation rate in 2000 and
each succeeding year through
2003;
(II) 30 percent of such
capitation rate in 2004;
(III) 50 percent of such
capitation rate in 2005;
(IV) 75 percent of such
capitation rate in 2006; and
(V) 100 percent of such
capitation rate in 2007 and
succeeding years.
(iii) Data for risk adjustment
methodology.--Such risk adjustment
methodology for 2004 and each
succeeding year, shall be based on data
from inpatient hospital and ambulatory
settings.
(iv) Full implementation of risk
adjustment for congestive heart failure
enrollees for 2001.--
(I) Exemption from phase-
in.--Subject to subclause (II),
the Secretary shall fully
implement the risk adjustment
methodology described in clause
(i) with respect to each
individual who has had a
qualifying congestive heart
failure inpatient diagnosis (as
determined by the Secretary
under such risk adjustment
methodology) during the period
beginning on July 1, 1999, and
ending on June 30, 2000, and
who is enrolled in a
coordinated care plan that is
the only coordinated care plan
offered on January 1, 2001, in
the service area of the
individual.
(II) Period of application.--
Subclause (I) shall only apply
during the 1-year period
beginning on January 1, 2001.
(D) Uniform application to all types of
plans.--Subject to section 1859(e)(4), the
methodology shall be applied uniformly without
regard to the type of plan.
(4) Payment rule for federally qualified health center
services.--If an individual who is enrolled with an MA plan
under this part receives a service from a federally qualified
health center that has a written agreement with the MA
organization that offers such plan for providing such a service
(including any agreement required under section 1857(e)(3))--
(A) the Secretary shall pay the amount determined
under section 1833(a)(3)(B) directly to the federally
qualified health center not less frequently than
quarterly; and
(B) the Secretary shall not reduce the amount of the
monthly payments under this subsection as a result of
the application of subparagraph (A).
(b) Annual Announcement of Payment Rates.--
(1) Annual announcements.--
(A) For 2005.--The Secretary shall determine,
and shall announce (in a manner intended to
provide notice to interested parties), not
later than the second Monday in May of 2004,
with respect to each MA payment area, the
following:
(i) MA capitation rates.--The annual
MA capitation rate for each MA payment
area for 2005.
(ii) Adjustment factors.--The risk
and other factors to be used in
adjusting such rates under subsection
(a)(1)(C) for payments for months in
2005.
(B) For 2006 and subsequent years.--For a
year after 2005--
(i) Initial announcement.--The
Secretary shall determine, and shall
announce (in a manner intended to
provide notice to interested parties),
not later than the first Monday in
April before the calendar year
concerned, with respect to each MA
payment area, the following:
(I) MA capitation rates; ma
local area benchmark.--The
annual MA capitation rate for
each MA payment area for the
year.
(II) Adjustment factors.--The
risk and other factors to be
used in adjusting such rates
under subsection (a)(1)(C) for
payments for months in such
year.
(ii) Regional benchmark
announcement.--The Secretary shall
determine, and shall announce (in a
manner intended to provide notice to
interested parties), on a timely basis
before the calendar year concerned,
with respect to each MA region and each
MA regional plan for which a bid was
submitted under section 1854, the MA
region-specific non-drug monthly
benchmark amount for that region for
the year involved.
(iii) Benchmark announcement for cca
local areas.--The Secretary shall
determine, and shall announce (in a
manner intended to provide notice to
interested parties), on a timely basis
before the calendar year concerned,
with respect to each CCA area (as
defined in section 1860C-1(b)(1)(A)),
the CCA non-drug monthly benchmark
amount under section 1860C-1(e)(1) for
that area for the year involved.
(2) Advance notice of methodological changes.--At
least 45 days (or, in 2017 and each subsequent year, at
least 60 days) before making the announcement under
paragraph (1) for a year, the Secretary shall provide
for notice to Medicare+Choice organizations of proposed
changes to be made in the methodology from the
methodology and assumptions used in the previous
announcement and shall provide such organizations an
opportunity (in 2017 and each subsequent year, of no
less than 30 days) to comment on such proposed changes.
(3) Explanation of assumptions.--In each announcement
made under paragraph (1), the Secretary shall include
an explanation of the assumptions and changes in
methodology used in such announcement.
(4) Continued computation and publication of county-
specific per capita fee-for-service expenditure
information.--The Secretary, through the Chief Actuary
of the Centers for Medicare & Medicaid Services, shall
provide for the computation and publication, on an
annual basis beginning with 2001 at the time of
publication of the annual Medicare+Choice capitation
rates under paragraph (1), of the following information
for the original medicare fee-for-service program under
parts A and B (exclusive of individuals eligible for
coverage under section 226A) for each Medicare+Choice
payment area for the second calendar year ending before
the date of publication:
(A) Total expenditures per capita per month,
computed separately for part A and for part B.
(B) The expenditures described in
subparagraph (A) reduced by the best estimate
of the expenditures (such as graduate medical
education and disproportionate share hospital
payments) not related to the payment of claims.
(C) The average risk factor for the covered
population based on diagnoses reported for
medicare inpatient services, using the same
methodology as is expected to be applied in
making payments under subsection (a).
(D) Such average risk factor based on
diagnoses for inpatient and other sites of
service, using the same methodology as is
expected to be applied in making payments under
subsection (a).
(c) Calculation of Annual Medicare+Choice Capitation Rates.--
(1) In general.--For purposes of this part, subject
to paragraphs (6)(C) and (7), each annual
Medicare+Choice capitation rate, for a Medicare+Choice
payment area that is an MA local area for a contract
year consisting of a calendar year, is equal to the
largest of the amounts specified in the following
subparagraph (A), (B), (C), or (D):
(A) Blended capitation rate.--For a year
before 2005, the sum of--
(i) the area-specific percentage (as
specified under paragraph (2) for the
year) of the annual area-specific
Medicare+Choice capitation rate for the
Medicare+Choice payment area, as
determined under paragraph (3) for the
year, and
(ii) the national percentage (as
specified under paragraph (2) for the
year) of the input-price-adjusted
annual national Medicare+Choice
capitation rate, as determined under
paragraph (4) for the year,
multiplied (for a year other than 2004) by the
budget neutrality adjustment factor determined
under paragraph (5).
(B) Minimum amount.--12 multiplied by the
following amount:
(i) For 1998, $367 (but not to
exceed, in the case of an area outside
the 50 States and the District of
Columbia, 150 percent of the annual per
capita rate of payment for 1997
determined under section 1876(a)(1)(C)
for the area).
(ii) For 1999 and 2000, the minimum
amount determined under clause (i) or
this clause, respectively, for the
preceding year, increased by the
national per capita Medicare+Choice
growth percentage described in
paragraph (6)(A) applicable to 1999 or
2000, respectively.
(iii)(I) Subject to subclause (II),
for 2001, for any area in a
Metropolitan Statistical Area with a
population of more than 250,000, $525,
and for any other area $475.
(II) In the case of an area outside
the 50 States and the District of
Columbia, the amount specified in this
clause shall not exceed 120 percent of
the amount determined under clause (ii)
for such area for 2000.
(iv) For 2002, 2003, and 2004, the
minimum amount specified in this clause
(or clause (iii)) for the preceding
year increased by the national per
capita Medicare+Choice growth
percentage, described in paragraph
(6)(A) for that succeeding year.
(C) Minimum percentage increase.--
(i) For 1998, 102 percent of the
annual per capita rate of payment for
1997 determined under section
1876(a)(1)(C) for the Medicare+Choice
payment area.
(ii) For 1999 and 2000, 102 percent
of the annual Medicare+Choice
capitation rate under this paragraph
for the area for the previous year.
(iii) For 2001, 103 percent of the
annual Medicare+Choice capitation rate
under this paragraph for the area for
2000.
(iv) For 2002 and 2003, 102 percent
of the annual Medicare+Choice
capitation rate under this paragraph
for the area for the previous year.
(v) For 2004 and each succeeding
year, the greater of--
(I) 102 percent of the annual
MA capitation rate under this
paragraph for the area for the
previous year; or
(II) the annual MA capitation
rate under this paragraph for
the area for the previous year
increased by the national per
capita MA growth percentage,
described in paragraph (6) for
that succeeding year, but not
taking into account any
adjustment under paragraph
(6)(C) for a year before 2004.
(D) 100 percent of fee-for-service costs.--
(i) In general.--For each year
specified in clause (ii), the adjusted
average per capita cost for the year
involved, determined under section
1876(a)(4) and adjusted as appropriate
for the purpose of risk adjustment, for
the MA payment area for individuals who
are not enrolled in an MA plan under
this part for the year, but adjusted to
exclude costs attributable to payments
under sections, 1848(o), and 1886(n)
and 1886(h).
(ii) Periodic rebasing.--The
provisions of clause (i) shall apply
for 2004 and for subsequent years as
the Secretary shall specify (but not
less than once every 3 years).
(iii) Inclusion of costs of va and
dod military facility services to
medicare-eligible beneficiaries.--In
determining the adjusted average per
capita cost under clause (i) for a
year, such cost shall be adjusted to
include the Secretary's estimate, on a
per capita basis, of the amount of
additional payments that would have
been made in the area involved under
this title if individuals entitled to
benefits under this title had not
received services from facilities of
the Department of Defense or the
Department of Veterans Affairs.
(2) Area-specific and national percentages.--For
purposes of paragraph (1)(A)--
(A) for 1998, the ``area-specific
percentage'' is 90 percent and the ``national
percentage'' is 10 percent,
(B) for 1999, the ``area-specific
percentage'' is 82 percent and the ``national
percentage'' is 18 percent,
(C) for 2000, the ``area-specific
percentage'' is 74 percent and the ``national
percentage'' is 26 percent,
(D) for 2001, the ``area-specific
percentage'' is 66 percent and the ``national
percentage'' is 34 percent,
(E) for 2002, the ``area-specific
percentage'' is 58 percent and the ``national
percentage'' is 42 percent, and
(F) for a year after 2002, the ``area-
specific percentage'' is 50 percent and the
``national percentage'' is 50 percent.
(3) Annual area-specific medicare+choice capitation
rate.--
(A) In general.--For purposes of paragraph
(1)(A), subject to subparagraphs (B) and (E),
the annual area-specific Medicare+Choice
capitation rate for a Medicare+Choice payment
area--
(i) for 1998 is, subject to
subparagraph (D), the annual per capita
rate of payment for 1997 determined
under section 1876(a)(1)(C) for the
area, increased by the national per
capita Medicare+Choice growth
percentage for 1998 (described in
paragraph (6)(A)); or
(ii) for a subsequent year is the
annual area-specific Medicare+Choice
capitation rate for the previous year
determined under this paragraph for the
area, increased by the national per
capita Medicare+Choice growth
percentage for such subsequent year.
(B) Removal of medical education from
calculation of adjusted average per capita
cost.--
(i) In general.--In determining the
area-specific Medicare+Choice
capitation rate under subparagraph (A)
for a year (beginning with 1998), the
annual per capita rate of payment for
1997 determined under section
1876(a)(1)(C) shall be adjusted to
exclude from the rate the applicable
percent (specified in clause (ii)) of
the payment adjustments described in
subparagraph (C).
(ii) Applicable percent.--For
purposes of clause (i), the applicable
percent for--
(I) 1998 is 20 percent,
(II) 1999 is 40 percent,
(III) 2000 is 60 percent,
(IV) 2001 is 80 percent, and
(V) a succeeding year is 100
percent.
(C) Payment adjustment.--
(i) In general.--Subject to clause
(ii), the payment adjustments described
in this subparagraph are payment
adjustments which the Secretary
estimates were payable during 1997--
(I) for the indirect costs of
medical education under section
1886(d)(5)(B), and
(II) for direct graduate
medical education costs under
section 1886(h).
(ii) Treatment of payments covered
under state hospital reimbursement
system.--To the extent that the
Secretary estimates that an annual per
capita rate of payment for 1997
described in clause (i) reflects
payments to hospitals reimbursed under
section 1814(b)(3), the Secretary shall
estimate a payment adjustment that is
comparable to the payment adjustment
that would have been made under clause
(i) if the hospitals had not been
reimbursed under such section.
(D) Treatment of areas with highly variable
payment rates.--In the case of a
Medicare+Choice payment area for which the
annual per capita rate of payment determined
under section 1876(a)(1)(C) for 1997 varies by
more than 20 percent from such rate for 1996,
for purposes of this subsection the Secretary
may substitute for such rate for 1997 a rate
that is more representative of the costs of the
enrollees in the area.
(E) Inclusion of costs of dod and va military
facility services to medicare-eligible
beneficiaries.--In determining the area-
specific MA capitation rate under subparagraph
(A) for a year (beginning with 2004), the
annual per capita rate of payment for 1997
determined under section 1876(a)(1)(C) shall be
adjusted to include in the rate the Secretary's
estimate, on a per capita basis, of the amount
of additional payments that would have been
made in the area involved under this title if
individuals entitled to benefits under this
title had not received services from facilities
of the Department of Defense or the Department
of Veterans Affairs.
(4) Input-price-adjusted annual national
medicare+choice capitation rate.--
(A) In general.--For purposes of paragraph
(1)(A), the input-price-adjusted annual
national Medicare+Choice capitation rate for a
Medicare+Choice payment area for a year is
equal to the sum, for all the types of medicare
services (as classified by the Secretary), of
the product (for each such type of service)
of--
(i) the national standardized annual
Medicare+Choice capitation rate
(determined under subparagraph (B)) for
the year,
(ii) the proportion of such rate for
the year which is attributable to such
type of services, and
(iii) an index that reflects (for
that year and that type of services)
the relative input price of such
services in the area compared to the
national average input price of such
services.
In applying clause (iii), the Secretary may,
subject to subparagraph (C), apply those
indices under this title that are used in
applying (or updating) national payment rates
for specific areas and localities.
(B) National standardized annual
medicare+choice capitation rate.--In
subparagraph (A)(i), the ``national
standardized annual Medicare+Choice capitation
rate'' for a year is equal to--
(i) the sum (for all Medicare+Choice
payment areas) of the product of--
(I) the annual area-specific
Medicare+Choice capitation rate
for that year for the area
under paragraph (3), and
(II) the average number of
medicare beneficiaries residing
in that area in the year,
multiplied by the average of
the risk factor weights used to
adjust payments under
subsection (a)(1)(A) for such
beneficiaries in such area;
divided by
(ii) the sum of the products
described in clause (i)(II) for all
areas for that year.
(C) Special rules for 1998.--In applying this
paragraph for 1998--
(i) medicare services shall be
divided into 2 types of services: part
A services and part B services;
(ii) the proportions described in
subparagraph (A)(ii)--
(I) for part A services shall
be the ratio (expressed as a
percentage) of the national
average annual per capita rate
of payment for part A for 1997
to the total national average
annual per capita rate of
payment for parts A and B for
1997, and
(II) for part B services
shall be 100 percent minus the
ratio described in subclause
(I);
(iii) for part A services, 70 percent
of payments attributable to such
services shall be adjusted by the index
used under section 1886(d)(3)(E) to
adjust payment rates for relative
hospital wage levels for hospitals
located in the payment area involved;
(iv) for part B services--
(I) 66 percent of payments
attributable to such services
shall be adjusted by the index
of the geographic area factors
under section 1848(e) used to
adjust payment rates for
physicians' services furnished
in the payment area, and
(II) of the remaining 34
percent of the amount of such
payments, 40 percent shall be
adjusted by the index described
in clause (iii); and
(v) the index values shall be
computed based only on the beneficiary
population who are 65 years of age or
older and who are not determined to
have end stage renal disease.
The Secretary may continue to apply the rules
described in this subparagraph (or similar
rules) for 1999.
(5) Payment adjustment budget neutrality factor.--For
purposes of paragraph (1)(A), for each year (other than
2004), the Secretary shall determine a budget
neutrality adjustment factor so that the aggregate of
the payments under this part (other than those
attributable to subsections (a)(3)(C)(iv), (a)(4), and
(i) shall equal the aggregate payments that would have
been made under this part if payment were based
entirely on area-specific capitation rates.
(6) National per capita medicare+choice growth
percentage defined.--
(A) In general.--In this part, the ``national
per capita Medicare+Choice growth percentage''
for a year is the percentage determined by the
Secretary, by March 1st before the beginning of
the year involved, to reflect the Secretary's
estimate of the projected per capita rate of
growth in expenditures under this title for an
individual entitled to benefits under part A
and enrolled under part B, excluding
expenditures attributable to subsections (a)(7)
and (o) of section 1848 and subsections
(b)(3)(B)(ix) and (n) of section 1886, reduced
by the number of percentage points specified in
subparagraph (B) for the year. Separate
determinations may be made for aged enrollees,
disabled enrollees, and enrollees with end-
stage renal disease.
(B) Adjustment.--The number of percentage
points specified in this subparagraph is--
(i) for 1998, 0.8 percentage points,
(ii) for 1999, 0.5 percentage points,
(iii) for 2000, 0.5 percentage
points,
(iv) for 2001, 0.5 percentage points,
(v) for 2002, 0.3 percentage points,
and
(vi) for a year after 2002, 0
percentage points.
(C) Adjustment for over or under projection
of national per capita medicare+choice growth
percentage.--Beginning with rates calculated
for 1999, before computing rates for a year as
described in paragraph (1), the Secretary shall
adjust all area-specific and national
Medicare+Choice capitation rates (and beginning
in 2000, the minimum amount) for the previous
year for the differences between the
projections of the national per capita
Medicare+Choice growth percentage for that year
and previous years and the current estimate of
such percentage for such years, except that for
purposes of paragraph (1)(C)(v)(II), no such
adjustment shall be made for a year before
2004.
(7) Adjustment for national coverage determinations
and legislative changes in benefits.--If the Secretary
makes a determination with respect to coverage under
this title or there is a change in benefits required to
be provided under this part that the Secretary projects
will result in a significant increase in the costs to
Medicare+Choice of providing benefits under contracts
under this part (for periods after any period described
in section 1852(a)(5)), the Secretary shall adjust
appropriately the payments to such organizations under
this part. Such projection and adjustment shall be
based on an analysis by the Chief Actuary of the
Centers for Medicare & Medicaid Services of the
actuarial costs associated with the new benefits.
(d) MA Payment Area; MA Local Area; MA Region Defined.--
(1) MA payment area.--In this part, except as
provided in this subsection, the term ``MA payment
area'' means--
(A) with respect to an MA local plan, an MA
local area (as defined in paragraph (2)); and
(B) with respect to an MA regional plan, an
MA region (as established under section
1858(a)(2)).
(2) MA local area.--The term ``MA local area'' means
a county or equivalent area specified by the Secretary.
(3) Rule for esrd beneficiaries.--In the case of
individuals who are determined to have end stage renal
disease, the Medicare+Choice payment area shall be a
State or such other payment area as the Secretary
specifies.
(4) Geographic adjustment.--
(A) In general.--Upon written request of the
chief executive officer of a State for a
contract year (beginning after 1998) made by
not later than February 1 of the previous year,
the Secretary shall make a geographic
adjustment to a Medicare+Choice payment area in
the State otherwise determined under paragraph
(1) for MA local plans--
(i) to a single statewide
Medicare+Choice payment area,
(ii) to the metropolitan based system
described in subparagraph (C), or
(iii) to consolidating into a single
Medicare+Choice payment area
noncontiguous counties (or equivalent
areas described inparagraph (1)(A))
within a State.
Such adjustment shall be effective for payments
for months beginning with January of the year
following the year in which the request is
received.
(B) Budget neutrality adjustment.--In the
case of a State requesting an adjustment under
this paragraph, the Secretary shall initially
(and annually thereafter) adjust the payment
rates otherwise established under this section
with respect to MA local plans for
Medicare+Choice payment areas in the State in a
manner so that the aggregate of the payments
under this section for such plans in the State
shall not exceed the aggregate payments that
would have been made under this section for
such plans for Medicare+Choice payment areas in
the State in the absence of the adjustment
under this paragraph.
(C) Metropolitan based system.--The
metropolitan based system described in this
subparagraph is one in which--
(i) all the portions of each
metropolitan statistical area in the
State or in the case of a consolidated
metropolitan statistical area, all of
the portions of each primary
metropolitan statistical area within
the consolidated area within the State,
are treated as a single Medicare+Choice
payment area, and
(ii) all areas in the State that do
not fall within a metropolitan
statistical area are treated as a
single Medicare+Choice payment area.
(D) Areas.--In subparagraph (C), the terms
``metropolitan statistical area'',
``consolidated metropolitan statistical area'',
and ``primary metropolitan statistical area''
mean any area designated as such by the
Secretary of Commerce.
(e) Special Rules for Individuals Electing MSA Plans.--
(1) In general.--If the amount of the Medicare+Choice
monthly MSA premium (as defined in section
1854(b)(2)(C)) for an MSA plan for a year is less than
\1/12\ of the annual Medicare+Choice capitation rate
applied under this section for the area and year
involved, the Secretary shall deposit an amount equal
to 100 percent of such difference in a Medicare+Choice
MSA established (and, if applicable, designated) by the
individual under paragraph (2).
(2) Establishment and designation of medicare+choice
medical savings account as requirement for payment of
contribution.--In the case of an individual who has
elected coverage under an MSA plan, no payment shall be
made under paragraph (1) on behalf of an individual for
a month unless the individual--
(A) has established before the beginning of
the month (or by such other deadline as the
Secretary may specify) a Medicare+Choice MSA
(as defined in section 138(b)(2) of the
Internal Revenue Code of 1986), and
(B) if the individual has established more
than one such Medicare+Choice MSA, has
designated one of such accounts as the
individual's Medicare+Choice MSA for purposes
of this part.
Under rules under this section, such an individual may
change the designation of such account under
subparagraph (B) for purposes of this part.
(3) Lump-sum deposit of medical savings account
contribution.--In the case of an individual electing an
MSA plan effective beginning with a month in a year,
the amount of the contribution to the Medicare+Choice
MSA on behalf of the individual for that month and all
successive months in the year shall be deposited during
that first month. In the case of a termination of such
an election as of a month before the end of a year, the
Secretary shall provide for a procedure for the
recovery of deposits attributable to the remaining
months in the year.
(f) Payments From Trust Funds.--The payment to a
Medicare+Choice organization under this section for individuals
enrolled under this part with the organization and for payments
under subsection (l) and subsection (m) and payments to a
Medicare+Choice MSA under subsection (e)(1) shall be made from
the Federal Hospital Insurance Trust Fund and the Federal
Supplementary Medical Insurance Trust Fund in such proportion
as the Secretary determines reflects the relative weight that
benefits under part A and under part B represents of the
actuarial value of the total benefits under this title.
Payments to MA organizations for statutory drug benefits
provided under this title are made from the Medicare
Prescription Drug Account in the Federal Supplementary Medical
Insurance Trust Fund. Monthly payments otherwise payable under
this section for October 2000 shall be paid on the first
business day of such month. Monthly payments otherwise payable
under this section for October 2001 shall be paid on the last
business day of September 2001. Monthly payments otherwise
payable under this section for October 2006 shall be paid on
the first business day of October 2006.
(g) Special Rule for Certain Inpatient Hospital Stays.--In
the case of an individual who is receiving inpatient hospital
services from a subsection (d) hospital (as defined in section
1886(d)(1)(B)), a rehabilitation hospital described in section
1886(d)(1)(B)(ii) or a distinct part rehabilitation unit
described in the matter following clause (v) of section
1886(d)(1)(B), or a long-term care hospital (described in
section 1886(d)(1)(B)(iv)) as of the effective date of the
individual's--
(1) election under this part of a Medicare+Choice
plan offered by a Medicare+Choice organization--
(A) payment for such services until the date
of the individual's discharge shall be made
under this title through the Medicare+Choice
plan or the original medicare fee-for-service
program option described in section
1851(a)(1)(A) (as the case may be) elected
before the election with such organization,
(B) the elected organization shall not be
financially responsible for payment for such
services until the date after the date of the
individual's discharge, and
(C) the organization shall nonetheless be
paid the full amount otherwise payable to the
organization under this part; or
(2) termination of election with respect to a
Medicare+Choice organization under this part--
(A) the organization shall be financially
responsible for payment for such services after
such date and until the date of the
individual's discharge,
(B) payment for such services during the stay
shall not be made under section 1886(d) or
other payment provision under this title for
inpatient services for the type of facility,
hospital, or unit involved, described in the
matter preceding paragraph (1), as the case may
be, or by any succeeding Medicare+Choice
organization, and
(C) the terminated organization shall not
receive any payment with respect to the
individual under this part during the period
the individual is not enrolled.
(h) Special Rule for Hospice Care.--
(1) Information.--A contract under this part shall
require the Medicare+Choice organization to inform each
individual enrolled under this part with a
Medicare+Choice plan offered by the organization about
the availability of hospice care if--
(A) a hospice program participating under
this title is located within the organization's
service area; or
(B) it is common practice to refer patients
to hospice programs outside such service area.
(2) Payment.--If an individual who is enrolled with a
Medicare+Choice organization under this part makes an
election under section 1812(d)(1) to receive hospice
care from a particular hospice program--
(A) payment for the hospice care furnished to
the individual shall be made to the hospice
program elected by the individual by the
Secretary;
(B) payment for other services for which the
individual is eligible notwithstanding the
individual's election of hospice care under
section 1812(d)(1), including services not
related to the individual's terminal illness,
shall be made by the Secretary to the
Medicare+Choice organization or the provider or
supplier of the service instead of payments
calculated under subsection (a); and
(C) the Secretary shall continue to make
monthly payments to the Medicare+Choice
organization in an amount equal to the value of
the additional benefits required under section
1854(f)(1)(A).
(i) New Entry Bonus.--
(1) In general.--Subject to paragraphs (2) and (3),
in the case of Medicare+Choice payment area in which a
Medicare+Choice plan has not been offered since 1997
(or in which all organizations that offered a plan
since such date have filed notice with the Secretary,
as of October 13, 1999, that they will not be offering
such a plan as of January 1, 2000, or filed notice with
the Secretary as of October 3, 2000, that they will not
be offering such a plan as of January 1, 2001), the
amount of the monthly payment otherwise made under this
section shall be increased--
(A) only for the first 12 months in which any
Medicare+Choice plan is offered in the area, by
5 percent of the total monthly payment
otherwise computed for such payment area; and
(B) only for the subsequent 12 months, by 3
percent of the total monthly payment otherwise
computed for such payment area.
(2) Period of application.--Paragraph (1) shall only
apply to payment for Medicare+Choice plans which are
first offered in a Medicare+Choice payment area during
the 2-year period beginning on January 1, 2000.
(3) Limitation to organization offering first plan in
an area.--Paragraph (1) shall only apply to payment to
the first Medicare+Choice organization that offers a
Medicare+Choice plan in each Medicare+Choice payment
area, except that if more than one such organization
first offers such a plan in an area on the same date,
paragraph (1) shall apply to payment for such
organizations.
(4) Construction.--Nothing in paragraph (1) shall be
construed as affecting the calculation of the annual
Medicare+Choice capitation rate under subsection (c)
for any payment area or as applying to payment for any
period not described in such paragraph and paragraph
(2).
(5) Offered defined.--In this subsection, the term
``offered'' means, with respect to a Medicare+Choice
plan as of a date, that a Medicare+Choice eligible
individual may enroll with the plan on that date,
regardless of when the enrollment takes effect or when
the individual obtains benefits under the plan.
(j) Computation of Benchmark Amounts.--For purposes of this
part, subject to subsection (o), the term ``MA area-specific
non-drug monthly benchmark amount'' means for a month in a
year--
(1) with respect to--
(A) a service area that is entirely within an
MA local area, subject to section 1860C-
1(d)(2)(A), an amount equal to \1/12\ of the
annual MA capitation rate under section
1853(c)(1) for the area for the year (or, for
2007, 2008, 2009, and 2010, \1/12\ of the
applicable amount determined under subsection
(k)(1) for the area for the year; for 2011, \1/
12\ of the applicable amount determined under
subsection (k)(1) for the area for 2010; and,
beginning with 2012, \1/12\ of the blended
benchmark amount determined under subsection
(n)(1) for the area for the year), adjusted as
appropriate (for years before 2007) for the
purpose of risk adjustment; or
(B) a service area that includes more than
one MA local area, an amount equal to the
average of the amounts described in
subparagraph (A) for each such local MA area,
weighted by the projected number of enrollees
in the plan residing in the respective local MA
areas (as used by the plan for purposes of the
bid and disclosed to the Secretary under
section 1854(a)(6)(A)(iii)), adjusted as
appropriate (for years before 2007) for the
purpose of risk adjustment; or
(2) with respect to an MA region for a month in a
year, the MA region-specific non-drug monthly benchmark
amount, as defined in section 1858(f) for the region
for the year.
(k) Determination of Applicable Amount for Purposes of
Calculating the Benchmark Amounts.--
(1) Applicable amount defined.--For purposes of
subsection (j), subject to [paragraphs (2) and (4)]
paragraphs (2), (4), and (5), the term ``applicable
amount'' means for an area--
(A) for 2007--
(i) if such year is not specified
under subsection (c)(1)(D)(ii), an
amount equal to the amount specified in
subsection (c)(1)(C) for the area for
2006--
(I) first adjusted by the
rescaling factor for 2006 for
the area (as made available by
the Secretary in the
announcement of the rates on
April 4, 2005, under subsection
(b)(1), but excluding any
national adjustment factors for
coding intensity and risk
adjustment budget neutrality
that were included in such
factor); and
(II) then increased by the
national per capita MA growth
percentage, described in
subsection (c)(6) for 2007, but
not taking into account any
adjustment under subparagraph
(C) of such subsection for a
year before 2004;
(ii) if such year is specified under
subsection (c)(1)(D)(ii), an amount
equal to the greater of--
(I) the amount determined
under clause (i) for the area
for the year; or
(II) the amount specified in
subsection (c)(1)(D) for the
area for the year; and
(B) for a subsequent year--
(i) if such year is not specified
under subsection (c)(1)(D)(ii), an
amount equal to the amount determined
under this paragraph for the area for
the previous year (determined without
regard to [paragraphs (2) and (4)]
paragraphs (2), (4), and (5)),
increased by the national per capita MA
growth percentage, described in
subsection (c)(6) for that succeeding
year, but not taking into account any
adjustment under subparagraph (C) of
such subsection for a year before 2004;
and
(ii) if such year is specified under
subsection (c)(1)(D)(ii), an amount
equal to the greater of--
(I) the amount determined
under clause (i) for the area
for the year; or
(II) the amount specified in
subsection (c)(1)(D) for the
area for the year.
(2) Phase-out of budget neutrality factor.--
(A) In general.--Except as provided in
subparagraph (D), in the case of 2007 through
2010, the applicable amount determined under
paragraph (1) shall be multiplied by a factor
equal to 1 plus the product of--
(i) the percent determined under
subparagraph (B) for the year; and
(ii) the applicable phase-out factor
for the year under subparagraph (C).
(B) Percent determined.--
(i) In general.--For purposes of
subparagraph (A)(i), subject to clause
(iv), the percent determined under this
subparagraph for a year is a percent
equal to a fraction the numerator of
which is described in clause (ii) and
the denominator of which is described
in clause (iii).
(ii) Numerator based on difference
between demographic rate and risk
rate.--
(I) In general.--The
numerator described in this
clause is an amount equal to
the amount by which the
demographic rate described in
subclause (II) exceeds the risk
rate described in subclause
(III).
(II) Demographic rate.--The
demographic rate described in
this subclause is the
Secretary's estimate of the
total payments that would have
been made under this part in
the year if all the monthly
payment amounts for all MA
plans were equal to \1/12\ of
the annual MA capitation rate
under subsection (c)(1) for the
area and year, adjusted
pursuant to subsection
(a)(1)(C).
(III) Risk rate.--The risk
rate described in this
subclause is the Secretary's
estimate of the total payments
that would have been made under
this part in the year if all
the monthly payment amounts for
all MA plans were equal to the
amount described in subsection
(j)(1)(A) (determined as if
this paragraph had not applied)
under subsection (j) for the
area and year, adjusted
pursuant to subsection
(a)(1)(C).
(iii) Denominator based on risk
rate.--The denominator described in
this clause is equal to the total
amount estimated for the year under
clause (ii)(III).
(iv) Requirements.--In estimating the
amounts under the previous clauses, the
Secretary shall--
(I) use a complete set of the
most recent and representative
Medicare Advantage risk scores
under subsection (a)(3) that
are available from the risk
adjustment model announced for
the year;
(II) adjust the risk scores
to reflect changes in treatment
and coding practices in the
fee-for-service sector;
(III) adjust the risk scores
for differences in coding
patterns between Medicare
Advantage plans and providers
under the original Medicare
fee-for-service program under
parts A and B to the extent
that the Secretary has
identified such differences, as
required in subsection
(a)(1)(C);
(IV) as necessary, adjust the
risk scores for late data
submitted by Medicare Advantage
organizations;
(V) as necessary, adjust the
risk scores for lagged cohorts;
and
(VI) as necessary, adjust the
risk scores for changes in
enrollment in Medicare
Advantage plans during the
year.
(v) Authority.--In computing such
amounts the Secretary may take into
account the estimated health risk of
enrollees in preferred provider
organization plans (including MA
regional plans) for the year.
(C) Applicable phase-out factor.--For
purposes of subparagraph (A)(ii), the term
``applicable phase-out factor'' means--
(i) for 2007, 0.55;
(ii) for 2008, 0.40;
(iii) for 2009, 0.25; and
(iv) for 2010, 0.05.
(D) Termination of application.--Subparagraph
(A) shall not apply in a year if the amount
estimated under subparagraph (B)(ii)(III) for
the year is equal to or greater than the amount
estimated under subparagraph (B)(ii)(II) for
the year.
(3) No revision in percent.--
(A) In general.--The Secretary may not make
any adjustment to the percent determined under
paragraph (2)(B) for any year.
(B) Rule of construction.--Nothing in this
subsection shall be construed to limit the
authority of the Secretary to make adjustments
to the applicable amounts determined under
paragraph (1) as appropriate for purposes of
updating data or for purposes of adopting an
improved risk adjustment methodology.
(4) Phase-out of the indirect costs of medical
education from capitation rates.--
(A) In general.--After determining the
applicable amount for an area for a year under
paragraph (1) (beginning with 2010), the
Secretary shall adjust such applicable amount
to exclude from such applicable amount the
phase-in percentage (as defined in subparagraph
(B)(i)) for the year of the Secretary's
estimate of the standardized costs for payments
under section 1886(d)(5)(B) in the area for the
year. Any adjustment under the preceding
sentence shall be made prior to the application
of paragraph (2).
(B) Percentages defined.--For purposes of
this paragraph:
(i) Phase-in percentage.--The term
``phase-in percentage'' means, for an
area for a year, the ratio (expressed
as a percentage, but in no case greater
than 100 percent) of--
(I) the maximum cumulative
adjustment percentage for the
year (as defined in clause
(ii)); to
(II) the standardized IME
cost percentage (as defined in
clause (iii)) for the area and
year.
(ii) Maximum cumulative adjustment
percentage.--The term ``maximum
cumulative adjustment percentage''
means, for--
(I) 2010, 0.60 percent; and
(II) a subsequent year, the
maximum cumulative adjustment
percentage for the previous
year increased by 0.60
percentage points.
(iii) Standardized ime cost
percentage.--The term ``standardized
IME cost percentage'' means, for an
area for a year, the per capita costs
for payments under section
1886(d)(5)(B) (expressed as a
percentage of the fee-for-service
amount specified in subparagraph (C))
for the area and the year.
(C) Fee-for-service amount.--The fee-for-
service amount specified in this subparagraph
for an area for a year is the amount specified
under subsection (c)(1)(D) for the area and the
year.
(5) Exclusion of costs for kidney acquisitions from
capitation rates.--After determining the applicable
amount for an area for a year under paragraph (1)
(beginning with 2019), the Secretary shall adjust such
applicable amount to exclude from such applicable
amount the Secretary's estimate of the standardized
costs for payments for organ acquisitions for kidney
transplants covered under this title (including
expenses covered under section 1881(d)) in the area for
the year.
(l) Application of Eligible Professional Incentives for
Certain MA Organizations for Adoption and Meaningful Use of
Certified EHR Technology.--
(1) In general.--Subject to paragraphs (3) and (4),
in the case of a qualifying MA organization, the
provisions of sections 1848(o) and 1848(a)(7) shall
apply with respect to eligible professionals described
in paragraph (2) of the organization who the
organization attests under paragraph (6) to be
meaningful EHR users in a similar manner as they apply
to eligible professionals under such sections.
Incentive payments under paragraph (3) shall be made to
and payment adjustments under paragraph (4) shall apply
to such qualifying organizations.
(2) Eligible professional described.--With respect to
a qualifying MA organization, an eligible professional
described in this paragraph is an eligible professional
(as defined for purposes of section 1848(o)) who--
(A)(i) is employed by the organization; or
(ii)(I) is employed by, or is a partner of,
an entity that through contract with the
organization furnishes at least 80 percent of
the entity's Medicare patient care services to
enrollees of such organization; and
(II) furnishes at least 80 percent of the
professional services of the eligible
professional covered under this title to
enrollees of the organization; and
(B) furnishes, on average, at least 20 hours
per week of patient care services.
(3) Eligible professional incentive payments.--
(A) In general.--In applying section 1848(o)
under paragraph (1), instead of the additional
payment amount under section 1848(o)(1)(A) and
subject to subparagraph (B), the Secretary may
substitute an amount determined by the
Secretary to the extent feasible and practical
to be similar to the estimated amount in the
aggregate that would be payable if payment for
services furnished by such professionals was
payable under part B instead of this part.
(B) Avoiding duplication of payments.--
(i) In general.--In the case of an
eligible professional described in
paragraph (2)--
(I) that is eligible for the
maximum incentive payment under
section 1848(o)(1)(A) for the
same payment period, the
payment incentive shall be made
only under such section and not
under this subsection; and
(II) that is eligible for
less than such maximum
incentive payment for the same
payment period, the payment
incentive shall be made only
under this subsection and not
under section 1848(o)(1)(A).
(ii) Methods.--In the case of an
eligible professional described in
paragraph (2) who is eligible for an
incentive payment under section
1848(o)(1)(A) but is not described in
clause (i) for the same payment period,
the Secretary shall develop a process--
(I) to ensure that duplicate
payments are not made with
respect to an eligible
professional both under this
subsection and under section
1848(o)(1)(A); and
(II) to collect data from
Medicare Advantage
organizations to ensure against
such duplicate payments.
(C) Fixed schedule for application of
limitation on incentive payments for all
eligible professionals.--In applying section
1848(o)(1)(B)(ii) under subparagraph (A), in
accordance with rules specified by the
Secretary, a qualifying MA organization shall
specify a year (not earlier than 2011) that
shall be treated as the first payment year for
all eligible professionals with respect to such
organization.
(4) Payment adjustment.--
(A) In general.--In applying section
1848(a)(7) under paragraph (1), instead of the
payment adjustment being an applicable percent
of the fee schedule amount for a year under
such section, subject to subparagraph (D), the
payment adjustment under paragraph (1) shall be
equal to the percent specified in subparagraph
(B) for such year of the payment amount
otherwise provided under this section for such
year.
(B) Specified percent.--The percent specified
under this subparagraph for a year is 100
percent minus a number of percentage points
equal to the product of--
(i) the number of percentage points
by which the applicable percent (under
section 1848(a)(7)(A)(ii)) for the year
is less than 100 percent; and
(ii) the Medicare physician
expenditure proportion specified in
subparagraph (C) for the year.
(C) Medicare physician expenditure
proportion.--The Medicare physician expenditure
proportion under this subparagraph for a year
is the Secretary's estimate of the proportion,
of the expenditures under parts A and B that
are not attributable to this part, that are
attributable to expenditures for physicians'
services.
(D) Application of payment adjustment.--In
the case that a qualifying MA organization
attests that not all eligible professionals of
the organization are meaningful EHR users with
respect to a year, the Secretary shall apply
the payment adjustment under this paragraph
based on the proportion of all such eligible
professionals of the organization that are not
meaningful EHR users for such year.
(5) Qualifying ma organization defined.--In this
subsection and subsection (m), the term ``qualifying MA
organization'' means a Medicare Advantage organization
that is organized as a health maintenance organization
(as defined in section 2791(b)(3) of the Public Health
Service Act).
(6) Meaningful ehr user attestation.--For purposes of
this subsection and subsection (m), a qualifying MA
organization shall submit an attestation, in a form and
manner specified by the Secretary which may include the
submission of such attestation as part of submission of
the initial bid under section 1854(a)(1)(A)(iv),
identifying--
(A) whether each eligible professional
described in paragraph (2), with respect to
such organization is a meaningful EHR user (as
defined in section 1848(o)(2)) for a year
specified by the Secretary; and
(B) whether each eligible hospital described
in subsection (m)(1), with respect to such
organization, is a meaningful EHR user (as
defined in section 1886(n)(3)) for an
applicable period specified by the Secretary.
(7) Posting on website.--The Secretary shall post on
the Internet website of the Centers for Medicare &
Medicaid Services, in an easily understandable format,
a list of the names, business addresses, and business
phone numbers of--
(A) each qualifying MA organization receiving
an incentive payment under this subsection for
eligible professionals of the organization; and
(B) the eligible professionals of such
organization for which such incentive payment
is based.
(8) Limitation on review.--There shall be no
administrative or judicial review under section 1869,
section 1878, or otherwise, of--
(A) the methodology and standards for
determining payment amounts and payment
adjustments under this subsection, including
avoiding duplication of payments under
paragraph (3)(B) and the specification of rules
for the fixed schedule for application of
limitation on incentive payments for all
eligible professionals under paragraph (3)(C);
(B) the methodology and standards for
determining eligible professionals under
paragraph (2); and
(C) the methodology and standards for
determining a meaningful EHR user under section
1848(o)(2), including specification of the
means of demonstrating meaningful EHR use under
section 1848(o)(3)(C) and selection of measures
under section 1848(o)(3)(B).
(m) Application of Eligible Hospital Incentives for Certain
MA Organizations for Adoption and Meaningful Use of Certified
EHR Technology.--
(1) Application.--Subject to paragraphs (3) and (4),
in the case of a qualifying MA organization, the
provisions of sections 1886(n) and 1886(b)(3)(B)(ix)
shall apply with respect to eligible hospitals
described in paragraph (2) of the organization which
the organization attests under subsection (l)(6) to be
meaningful EHR users in a similar manner as they apply
to eligible hospitals under such sections. Incentive
payments under paragraph (3) shall be made to and
payment adjustments under paragraph (4) shall apply to
such qualifying organizations.
(2) Eligible hospital described.--With respect to a
qualifying MA organization, an eligible hospital
described in this paragraph is an eligible hospital (as
defined in section 1886(n)(6)(B)) that is under common
corporate governance with such organization and serves
individuals enrolled under an MA plan offered by such
organization.
(3) Eligible hospital incentive payments.--
(A) In general.--In applying section
1886(n)(2) under paragraph (1), instead of the
additional payment amount under section
1886(n)(2), there shall be substituted an
amount determined by the Secretary to be
similar to the estimated amount in the
aggregate that would be payable if payment for
services furnished by such hospitals was
payable under part A instead of this part. In
implementing the previous sentence, the
Secretary--
(i) shall, insofar as data to
determine the discharge related amount
under section 1886(n)(2)(C) for an
eligible hospital are not available to
the Secretary, use such alternative
data and methodology to estimate such
discharge related amount as the
Secretary determines appropriate; and
(ii) shall, insofar as data to
determine the medicare share described
in section 1886(n)(2)(D) for an
eligible hospital are not available to
the Secretary, use such alternative
data and methodology to estimate such
share, which data and methodology may
include use of the inpatient-bed-days
(or discharges) with respect to an
eligible hospital during the
appropriate period which are
attributable to both individuals for
whom payment may be made under part A
or individuals enrolled in an MA plan
under a Medicare Advantage organization
under this part as a proportion of the
estimated total number of patient-bed-
days (or discharges) with respect to
such hospital during such period.
(B) Avoiding duplication of payments.--
(i) In general.--In the case of a
hospital that for a payment year is an
eligible hospital described in
paragraph (2) and for which at least
one-third of their discharges (or bed-
days) of Medicare patients for the year
are covered under part A, payment for
the payment year shall be made only
under section 1886(n) and not under
this subsection.
(ii) Methods.--In the case of a
hospital that is an eligible hospital
described in paragraph (2) and also is
eligible for an incentive payment under
section 1886(n) but is not described in
clause (i) for the same payment period,
the Secretary shall develop a process--
(I) to ensure that duplicate
payments are not made with
respect to an eligible hospital
both under this subsection and
under section 1886(n); and
(II) to collect data from
Medicare Advantage
organizations to ensure against
such duplicate payments.
(4) Payment adjustment.--
(A) Subject to paragraph (3), in the case of
a qualifying MA organization (as defined in
section 1853(l)(5)), if, according to the
attestation of the organization submitted under
subsection (l)(6) for an applicable period, one
or more eligible hospitals (as defined in
section 1886(n)(6)(B)) that are under common
corporate governance with such organization and
that serve individuals enrolled under a plan
offered by such organization are not meaningful
EHR users (as defined in section 1886(n)(3))
with respect to a period, the payment amount
payable under this section for such
organization for such period shall be the
percent specified in subparagraph (B) for such
period of the payment amount otherwise provided
under this section for such period.
(B) Specified percent.--The percent specified
under this subparagraph for a year is 100
percent minus a number of percentage points
equal to the product of--
(i) the number of the percentage
point reduction effected under section
1886(b)(3)(B)(ix)(I) for the period;
and
(ii) the Medicare hospital
expenditure proportion specified in
subparagraph (C) for the year.
(C) Medicare hospital expenditure
proportion.--The Medicare hospital expenditure
proportion under this subparagraph for a year
is the Secretary's estimate of the proportion,
of the expenditures under parts A and B that
are not attributable to this part, that are
attributable to expenditures for inpatient
hospital services.
(D) Application of payment adjustment.--In
the case that a qualifying MA organization
attests that not all eligible hospitals are
meaningful EHR users with respect to an
applicable period, the Secretary shall apply
the payment adjustment under this paragraph
based on a methodology specified by the
Secretary, taking into account the proportion
of such eligible hospitals, or discharges from
such hospitals, that are not meaningful EHR
users for such period.
(5) Posting on website.--The Secretary shall post on
the Internet website of the Centers for Medicare &
Medicaid Services, in an easily understandable format--
(A) a list of the names, business addresses,
and business phone numbers of each qualifying
MA organization receiving an incentive payment
under this subsection for eligible hospitals
described in paragraph (2); and
(B) a list of the names of the eligible
hospitals for which such incentive payment is
based.
(6) Limitations on review.--There shall be no
administrative or judicial review under section 1869,
section 1878, or otherwise, of--
(A) the methodology and standards for
determining payment amounts and payment
adjustments under this subsection, including
avoiding duplication of payments under
paragraph (3)(B);
(B) the methodology and standards for
determining eligible hospitals under paragraph
(2); and
(C) the methodology and standards for
determining a meaningful EHR user under section
1886(n)(3), including specification of the
means of demonstrating meaningful EHR use under
subparagraph (C) of such section and selection
of measures under subparagraph (B) of such
section.
(n) Determination of Blended Benchmark Amount.--
(1) In general.--For purposes of subsection (j),
subject to paragraphs (3), (4), and (5), the term
``blended benchmark amount'' means for an area--
(A) for 2012 the sum of--
(i) \1/2\ of the applicable amount
for the area and year; and
(ii) \1/2\ of the amount specified in
paragraph (2)(A) for the area and year;
and
(B) for a subsequent year the amount
specified in paragraph (2)(A) for the area and
year.
(2) Specified amount.--
(A) In general.--The amount specified in this
subparagraph for an area and year is the
product of--
(i) the base payment amount specified
in subparagraph (E) for the area and
year adjusted to take into account the
phase-out in the indirect costs of
medical education from capitation rates
described in subsection (k)(4) and, for
2019 and subsequent years, the
exclusion of payments for organ
acquisitions for kidney transplants
from the capitation rate as described
in subsection (k)(5); and
(ii) the applicable percentage for
the area for the year specified under
subparagraph (B).
(B) Applicable percentage.--Subject to
subparagraph (D), the applicable percentage
specified in this subparagraph for an area for
a year in the case of an area that is ranked--
(i) in the highest quartile under
subparagraph (C) for the previous year
is 95 percent;
(ii) in the second highest quartile
under such subparagraph for the
previous year is 100 percent;
(iii) in the third highest quartile
under such subparagraph for the
previous year is 107.5 percent; or
(iv) in the lowest quartile under
such subparagraph for the previous year
is 115 percent.
(C) Periodic ranking.--For purposes of this
paragraph in the case of an area located--
(i) in 1 of the 50 States or the
District of Columbia, the Secretary
shall rank such area in each year
specified under subsection
(c)(1)(D)(ii) based upon the level of
the amount specified in subparagraph
(A)(i) for such areas; or
(ii) in a territory, the Secretary
shall rank such areas in each such year
based upon the level of the amount
specified in subparagraph (A)(i) for
such area relative to quartile rankings
computed under clause (i).
(D) 1-year transition for changes in
applicable percentage.--If, for a year after
2012, there is a change in the quartile in
which an area is ranked compared to the
previous year, the applicable percentage for
the area in the year shall be the average of--
(i) the applicable percentage for the
area for the previous year; and
(ii) the applicable percentage that
would otherwise apply for the area for
the year.
(E) Base payment amount.--Subject to
[subparagraph (F)] subparagraphs (F) and (G),
the base payment amount specified in this
subparagraph--
(i) for 2012 is the amount specified
in subsection (c)(1)(D) for the area
for the year; or
(ii) for a subsequent year that--
(I) is not specified under
subsection (c)(1)(D)(ii), is
the base amount specified in
this subparagraph for the area
for the previous year,
increased by the national per
capita MA growth percentage,
described in subsection (c)(6)
for that succeeding year, but
not taking into account any
adjustment under subparagraph
(C) of such subsection for a
year before 2004; and
(II) is specified under
subsection (c)(1)(D)(ii), is
the amount specified in
subsection (c)(1)(D) for the
area for the year.
(F) Application of indirect medical education
phase-out.--The base payment amount specified
in subparagraph (E) for a year shall be
adjusted in the same manner under paragraph (4)
of subsection (k) as the applicable amount is
adjusted under such subsection.
(G) Application of kidney acquisitions
adjustment.--The base payment amount specified
in subparagraph (E) for a year (beginning with
2019) shall be adjusted in the same manner
under paragraph (5) of subsection (k) as the
applicable amount is adjusted under such
subsection.
(3) Alternative phase-ins.--
(A) 4-year phase-in for certain areas.--If
the difference between the applicable amount
(as defined in subsection (k)) for an area for
2010 and the projected 2010 benchmark amount
(as defined in subparagraph (C)) for the area
is at least $30 but less than $50, the blended
benchmark amount for the area is--
(i) for 2012 the sum of--
(I) \3/4\ of the applicable
amount for the area and year;
and
(II) \1/4\ of the amount
specified in paragraph (2)(A)
for the area and year;
(ii) for 2013 the sum of--
(I) \1/2\ of the applicable
amount for the area and year;
and
(II) \1/2\ of the amount
specified in paragraph (2)(A)
for the area and year;
(iii) for 2014 the sum of--
(I) \1/4\ of the applicable
amount for the area and year;
and
(II) \3/4\ of the amount
specified in paragraph (2)(A)
for the area and year; and
(iv) for a subsequent year the amount
specified in paragraph (2)(A) for the
area and year.
(B) 6-year phase-in for certain areas.--If
the difference between the applicable amount
(as defined in subsection (k)) for an area for
2010 and the projected 2010 benchmark amount
(as defined in subparagraph (C)) for the area
is at least $50, the blended benchmark amount
for the area is--
(i) for 2012 the sum of--
(I) \5/6\ of the applicable
amount for the area and year;
and
(II) \1/6\ of the amount
specified in paragraph (2)(A)
for the area and year;
(ii) for 2013 the sum of--
(I) \2/3\ of the applicable
amount for the area and year;
and
(II) \1/3\ of the amount
specified in paragraph (2)(A)
for the area and year;
(iii) for 2014 the sum of--
(I) \1/2\ of the applicable
amount for the area and year;
and
(II) \1/2\ of the amount
specified in paragraph (2)(A)
for the area and year;
(iv) for 2015 the sum of--
(I) \1/3\ of the applicable
amount for the area and year;
and
(II) \2/3\ of the amount
specified in paragraph (2)(A)
for the area and year; and
(v) for 2016 the sum of--
(I) \1/6\ of the applicable
amount for the area and year;
and
(II) \5/6\ of the amount
specified in paragraph (2)(A)
for the area and year; and
(vi) for a subsequent year the amount
specified in paragraph (2)(A) for the
area and year.
(C) Projected 2010 benchmark amount.--The
projected 2010 benchmark amount described in
this subparagraph for an area is equal to the
sum of--
(i) \1/2\ of the applicable amount
(as defined in subsection (k)) for the
area for 2010; and
(ii) \1/2\ of the amount specified in
paragraph (2)(A) for the area for 2010
but determined as if there were
substituted for the applicable
percentage specified in clause (ii) of
such paragraph the sum of--
(I) the applicable percent
that would be specified under
subparagraph (B) of paragraph
(2) (determined without regard
to subparagraph (D) of such
paragraph) for the area for
2010 if any reference in such
paragraph to ``the previous
year'' were deemed a reference
to 2010; and
(II) the applicable
percentage increase that would
apply to a qualifying plan in
the area under subsection (o)
as if any reference in such
subsection to 2012 were deemed
a reference to 2010 and as if
the determination of a
qualifying county under
paragraph (3)(B) of such
subsection were made for 2010.
(4) Cap on benchmark amount.--In no case shall the
blended benchmark amount for an area for a year
(determined taking into account subsection (o)) be
greater than the applicable amount that would (but for
the application of this subsection) be determined under
subsection (k)(1) for the area for the year.
(5) Non-application to pace plans.--This subsection
shall not apply to payments to a PACE program under
section 1894.
(o) Applicable Percentage Quality Increases.--
(1) In general.--Subject to the succeeding
paragraphs, in the case of a qualifying plan with
respect to a year beginning with 2012, the applicable
percentage under subsection (n)(2)(B) shall be
increased on a plan or contract level, as determined by
the Secretary--
(A) for 2012, by 1.5 percentage points;
(B) for 2013, by 3.0 percentage points; and
(C) for 2014 or a subsequent year, by 5.0
percentage points.
(2) Increase for qualifying plans in qualifying
counties.--The increase applied under paragraph (1) for
a qualifying plan located in a qualifying county for a
year shall be doubled.
(3) Qualifying plans and qualifying county defined;
application of increases to low enrollment and new
plans.--For purposes of this subsection:
(A) Qualifying plan.--
(i) In general.--The term
``qualifying plan'' means, for a year
and subject to paragraph (4), a plan
that had a quality rating under
paragraph (4) of 4 stars or higher
based on the most recent data available
for such year.
(ii) Application of increases to low
enrollment plans.--
(I) 2012.--For 2012, the term
``qualifying plan'' includes an
MA plan that the Secretary
determines is not able to have
a quality rating under
paragraph (4) because of low
enrollment.
(II) 2013 and subsequent
years.--For 2013 and subsequent
years, for purposes of
determining whether an MA plan
with low enrollment (as defined
by the Secretary) is included
as a qualifying plan, the
Secretary shall establish a
method to apply to MA plans
with low enrollment (as defined
by the Secretary) the
computation of quality rating
and the rating system under
paragraph (4).
(iii) Application of increases to new
plans.--
(I) In general.--A new MA
plan that meets criteria
specified by the Secretary
shall be treated as a
qualifying plan, except that in
applying paragraph (1), the
applicable percentage under
subsection (n)(2)(B) shall be
increased--
(aa) for 2012, by 1.5
percentage points;
(bb) for 2013, by 2.5
percentage points; and
(cc) for 2014 or a
subsequent year, by 3.5
percentage points.
(II) New ma plan defined.--
The term ``new MA plan'' means,
with respect to a year, a plan
offered by an organization or
sponsor that has not had a
contract as a Medicare
Advantage organization in the
preceding 3-year period.
(B) Qualifying county.--The term ``qualifying
county'' means, for a year, a county--
(i) that has an MA capitation rate
that, in 2004, was based on the amount
specified in subsection (c)(1)(B) for a
Metropolitan Statistical Area with a
population of more than 250,000;
(ii) for which, as of December 2009,
of the Medicare Advantage eligible
individuals residing in the county at
least 25 percent of such individuals
were enrolled in Medicare Advantage
plans; and
(iii) that has per capita fee-for-
service spending that is lower than the
national monthly per capita cost for
expenditures for individuals enrolled
under the original medicare fee-for-
service program for the year.
(4) Quality determinations for application of
increase.--
(A) Quality determination.--The quality
rating for a plan shall be determined according
to a 5-star rating system (based on the data
collected under section 1852(e)).
(B) Plans that failed to report.--An MA plan
which does not report data that enables the
Secretary to rate the plan for purposes of this
paragraph shall be counted as having a rating
of fewer than 3.5 stars.
(C) Special rule for first 3 plan years for
plans that were converted from a reasonable
cost reimbursement contract.--For purposes of
applying paragraph (1) and section
1854(b)(1)(C) for the first 3 plan years under
this part in the case of an MA plan to which
deemed enrollment applies under section
1851(c)(4)--
(i) such plan shall not be treated as
a new MA plan (as defined in paragraph
(3)(A)(iii)(II)); and
(ii) in determining the star rating
of the plan under subparagraph (A), to
the extent that Medicare Advantage data
for such plan is not available for a
measure used to determine such star
rating, the Secretary shall use data
from the period in which such plan was
a reasonable cost reimbursement
contract.
(5) Exception for pace plans.--This subsection shall
not apply to payments to a PACE program under section
1894.
* * * * * * *
definitions; miscellaneous provisions
Sec. 1859. (a) Definitions Relating to Medicare+Choice
Organizations.--In this part--
(1) Medicare+choice organization.--The term
``Medicare+Choice organization'' means a public or
private entity that is certified under section 1856 as
meeting the requirements and standards of this part for
such an organization.
(2) Provider-sponsored organization.--The term
``provider-sponsored organization'' is defined in
section 1855(d)(1).
(b) Definitions Relating to Medicare+Choice Plans.--
(1) Medicare+choice plan.--The term ``Medicare+Choice
plan'' means health benefits coverage offered under a
policy, contract, or plan by a Medicare+Choice
organization pursuant to and in accordance with a
contract under section 1857.
(2) Medicare+Choice private fee-for-service plan.--
The term ``Medicare+Choice private fee-for-service
plan'' means a Medicare+Choice plan that--
(A) reimburses hospitals, physicians, and
other providers at a rate determined by the
plan on a fee-for-service basis without placing
the provider at financial risk;
(B) does not vary such rates for such a
provider based on utilization relating to such
provider; and
(C) does not restrict the selection of
providers among those who are lawfully
authorized to provide the covered services and
agree to accept the terms and conditions of
payment established by the plan.
Nothing in subparagraph (B) shall be construed to
preclude a plan from varying rates for such a provider
based on the specialty of the provider, the location of
the provider, or other factors related to such provider
that are not related to utilization, or to preclude a
plan from increasing rates for such a provider based on
increased utilization of specified preventive or
screening services.
(3) MSA plan.--
(A) In general.--The term ``MSA plan'' means
a Medicare+Choice plan that--
(i) provides reimbursement for at
least the items and services described
in section 1852(a)(1) in a year but
only after the enrollee incurs
countable expenses (as specified under
the plan) equal to the amount of an
annual deductible (described in
subparagraph (B));
(ii) counts as such expenses (for
purposes of such deductible) at least
all amounts that would have been
payable under parts A and B, and that
would have been payable by the enrollee
as deductibles, coinsurance, or
copayments, if the enrollee had elected
to receive benefits through the
provisions of such parts; and
(iii) provides, after such deductible
is met for a year and for all
subsequent expenses for items and
services referred to in clause (i) in
the year, for a level of reimbursement
that is not less than--
(I) 100 percent of such
expenses, or
(II) 100 percent of the
amounts that would have been
paid (without regard to any
deductibles or coinsurance)
under parts A and B with
respect to such expenses,
whichever is less.
(B) Deductible.--The amount of annual
deductible under an MSA plan--
(i) for contract year 1999 shall be
not more than $6,000; and
(ii) for a subsequent contract year
shall be not more than the maximum
amount of such deductible for the
previous contract year under this
subparagraph increased by the national
per capita Medicare+Choice growth
percentage under section 1853(c)(6) for
the year.
If the amount of the deductible under clause
(ii) is not a multiple of $50, the amount shall
be rounded to the nearest multiple of $50.
(4) MA regional plan.--The term ``MA regional plan''
means an MA plan described in section
1851(a)(2)(A)(i)--
(A) that has a network of providers that have
agreed to a contractually specified
reimbursement for covered benefits with the
organization offering the plan;
(B) that provides for reimbursement for all
covered benefits regardless of whether such
benefits are provided within such network of
providers; and
(C) the service area of which is one or more
entire MA regions.
(5) MA local plan.--The term ``MA local plan'' means
an MA plan that is not an MA regional plan.
(6) Specialized ma plans for special needs
individuals.--
(A) In general.--The term ``specialized MA
plan for special needs individuals'' means an
MA plan that exclusively serves special needs
individuals (as defined in subparagraph (B))
and that, as of January 1, 2010, meets the
applicable requirements of paragraph (2), (3),
or (4) of subsection (f), as the case may be.
(B) Special needs individual.--The term
``special needs individual'' means an MA
eligible individual who--
(i) is institutionalized (as defined
by the Secretary);
(ii) is entitled to medical
assistance under a State plan under
title XIX; or
(iii) meets such requirements as the
Secretary may determine would benefit
from enrollment in such a specialized
MA plan described in subparagraph (A)
for individuals with severe or
disabling chronic conditions who have
one or more comorbid and medically
complex chronic conditions that are
substantially disabling or life
threatening, have a high risk of
hospitalization or other significant
adverse health outcomes, and require
specialized delivery systems across
domains of care.
The Secretary [may waive application of section
1851(a)(3)(B) in the case of an individual
described in clause (i), (ii), or (iii) of this
subparagraph and] may apply rules similar to
the rules of section 1894(c)(4) for continued
eligibility of special needs individuals.
(c) Other References to Other Terms.--
(1) Medicare+choice eligible individual.--The term
``Medicare+Choice eligible individual'' is defined in
section 1851(a)(3).
(2) Medicare+choice payment area.--The term
``Medicare+Choice payment area'' is defined in section
1853(d).
(3) National per capita medicare+choice growth
percentage.--The ``national per capita Medicare+Choice
growth percentage'' is defined in section 1853(c)(6).
(4) Medicare+choice monthly basic beneficiary
premium; medicare+choice monthly supplemental
beneficiary premium.--The terms ``Medicare+Choice
monthly basic beneficiary premium'' and
``Medicare+Choice monthly supplemental beneficiary
premium'' are defined in section 1854(a)(2).
(5) MA local area.--The term ``MA local area'' is
defined in section 1853(d)(2).
(d) Coordinated Acute and Long-Term Care Benefits Under a
Medicare+Choice Plan.--Nothing in this part shall be construed
as preventing a State from coordinating benefits under a
medicaid plan under title XIX with those provided under a
Medicare+Choice plan in a manner that assures continuity of a
full-range of acute care and long-term care services to poor
elderly or disabled individuals eligible for benefits under
this title and under such plan.
(e) Restriction on Enrollment for Certain Medicare+Choice
Plans.--
(1) In general.--In the case of a Medicare+Choice
religious fraternal benefit society plan described in
paragraph (2), notwithstanding any other provision of
this part to the contrary and in accordance with
regulations of the Secretary, the society offering the
plan may restrict the enrollment of individuals under
this part to individuals who are members of the church,
convention, or group described in paragraph (3)(B) with
which the society is affiliated.
(2) Medicare+choice religious fraternal benefit
society plan described.--For purposes of this
subsection, a Medicare+Choice religious fraternal
benefit society plan described in this paragraph is a
Medicare+Choice plan described in section 1851(a)(2)
that--
(A) is offered by a religious fraternal
benefit society described in paragraph (3) only
to members of the church, convention, or group
described in paragraph (3)(B); and
(B) permits all such members to enroll under
the plan without regard to health status-
related factors.
Nothing in this subsection shall be construed as
waiving any plan requirements relating to financial
solvency.
(3) Religious fraternal benefit society defined.--For
purposes of paragraph (2)(A), a ``religious fraternal
benefit society'' described in this section is an
organization that--
(A) is described in section 501(c)(8) of the
Internal Revenue Code of 1986 and is exempt
from taxation under section 501(a) of such Act;
(B) is affiliated with, carries out the
tenets of, and shares a religious bond with, a
church or convention or association of churches
or an affiliated group of churches;
(C) offers, in addition to a Medicare+Choice
religious fraternal benefit society plan,
health coverage to individuals not entitled to
benefits under this title who are members of
such church, convention, or group; and
(D) does not impose any limitation on
membership in the society based on any health
status-related factor.
(4) Payment adjustment.--Under regulations of the
Secretary, in the case of individuals enrolled under
this part under a Medicare+Choice religious fraternal
benefit society plan described in paragraph (2), the
Secretary shall provide for such adjustment to the
payment amounts otherwise established under section
1854 as may be appropriate to assure an appropriate
payment level, taking into account the actuarial
characteristics and experience of such individuals.
(f) Requirements Regarding Enrollment in Specialized MA Plans
for Special Needs Individuals.--
(1) Requirements for enrollment.--In the case of a
specialized MA plan for special needs individuals (as
defined in subsection (b)(6)), notwithstanding any
other provision of this part and in accordance with
regulations of the Secretary and for periods before
January 1, 2019, the plan may restrict the enrollment
of individuals under the plan to individuals who are
within one or more classes of special needs
individuals.
(2) Additional requirements for institutional snps.--
In the case of a specialized MA plan for special needs
individuals described in subsection (b)(6)(B)(i), the
applicable requirements described in this paragraph are
as follows:
(A) Each individual that enrolls in the plan
on or after January 1, 2010, is a special needs
individuals described in subsection
(b)(6)(B)(i). In the case of an individual who
is living in the community but requires an
institutional level of care, such individual
shall not be considered a special needs
individual described in subsection (b)(6)(B)(i)
unless the determination that the individual
requires an institutional level of care was
made--
(i) using a State assessment tool of
the State in which the individual
resides; and
(ii) by an entity other than the
organization offering the plan.
(B) The plan meets the requirements described
in paragraph (5).
(C) If applicable, the plan meets the
requirement described in paragraph (7).
(3) Additional requirements for dual snps.--In the
case of a specialized MA plan for special needs
individuals described in subsection (b)(6)(B)(ii), the
applicable requirements described in this paragraph are
as follows:
(A) Each individual that enrolls in the plan
on or after January 1, 2010, is a special needs
individuals described in subsection
(b)(6)(B)(ii).
(B) The plan meets the requirements described
in paragraph (5).
(C) The plan provides each prospective
enrollee, prior to enrollment, with a
comprehensive written statement (using
standardized content and format established by
the Secretary) that describes--
(i) the benefits and cost-sharing
protections that the individual is
entitled to under the State Medicaid
program under title XIX; and
(ii) which of such benefits and cost-
sharing protections are covered under
the plan.
Such statement shall be included with any
description of benefits offered by the plan.
(D) The plan has a contract with the State
Medicaid agency to provide benefits, or arrange
for benefits to be provided, for which such
individual is entitled to receive as medical
assistance under title XIX. Such benefits may
include long-term care services consistent with
State policy.
(E) If applicable, the plan meets the
requirement described in paragraph (7).
(4) Additional requirements for severe or disabling
chronic condition snps.--In the case of a specialized
MA plan for special needs individuals described in
subsection (b)(6)(B)(iii), the applicable requirements
described in this paragraph are as follows:
(A) Each individual that enrolls in the plan
on or after January 1, 2010, is a special needs
individual described in subsection
(b)(6)(B)(iii).
(B) The plan meets the requirements described
in paragraph (5).
(C) If applicable, the plan meets the
requirement described in paragraph (7).
(5) Care management requirements for all snps.--The
requirements described in this paragraph are that the
organization offering a specialized MA plan for special
needs individuals--
(A) have in place an evidenced-based model of
care with appropriate networks of providers and
specialists; and
(B) with respect to each individual enrolled
in the plan--
(i) conduct an initial assessment and
an annual reassessment of the
individual's physical, psychosocial,
and functional needs;
(ii) develop a plan, in consultation
with the individual as feasible, that
identifies goals and objectives,
including measurable outcomes as well
as specific services and benefits to be
provided; and
(iii) use an interdisciplinary team
in the management of care.
(6) Transition and exception regarding restriction on
enrollment.--
(A) In general.--Subject to subparagraph (C),
the Secretary shall establish procedures for
the transition of applicable individuals to--
(i) a Medicare Advantage plan that is
not a specialized MA plan for special
needs individuals (as defined in
subsection (b)(6)); or
(ii) the original medicare fee-for-
service program under parts A and B.
(B) Applicable individuals.--For purposes of
clause (i), the term ``applicable individual''
means an individual who--
(i) is enrolled under a specialized
MA plan for special needs individuals
(as defined in subsection (b)(6)); and
(ii) is not within the 1 or more of
the classes of special needs
individuals to which enrollment under
the plan is restricted to.
(C) Exception.--The Secretary shall provide
for an exception to the transition described in
subparagraph (A) for a limited period of time
for individuals enrolled under a specialized MA
plan for special needs individuals described in
subsection (b)(6)(B)(ii) who are no longer
eligible for medical assistance under title
XIX.
(D) Timeline for initial transition.--The
Secretary shall ensure that applicable
individuals enrolled in a specialized MA plan
for special needs individuals (as defined in
subsection (b)(6)) prior to January 1, 2010,
are transitioned to a plan or the program
described in subparagraph (A) by not later than
January 1, 2013.
(7) Authority to require special needs plans be ncqa
approved.--For 2012 and subsequent years, the Secretary
shall require that a Medicare Advantage organization
offering a specialized MA plan for special needs
individuals be approved by the National Committee for
Quality Assurance (based on standards established by
the Secretary).
(g) Special Rules for Senior Housing Facility Plans.--
(1) In general.--In the case of a Medicare Advantage
senior housing facility plan described in paragraph
(2), notwithstanding any other provision of this part
to the contrary and in accordance with regulations of
the Secretary, the service area of such plan may be
limited to a senior housing facility in a geographic
area.
(2) Medicare advantage senior housing facility plan
described.--For purposes of this subsection, a Medicare
Advantage senior housing facility plan is a Medicare
Advantage plan that--
(A) restricts enrollment of individuals under
this part to individuals who reside in a
continuing care retirement community (as
defined in section 1852(l)(4)(B));
(B) provides primary care services onsite and
has a ratio of accessible physicians to
beneficiaries that the Secretary determines is
adequate;
(C) provides transportation services for
beneficiaries to specialty providers outside of
the facility; and
(D) has participated (as of December 31,
2009) in a demonstration project established by
the Secretary under which such a plan was
offered for not less than 1 year.
* * * * * * *
[all]