The text of the bill below is as of Nov 20, 1993 (Introduced).
This is not the latest text of this bill. Read the latest text.
103d CONGRESS
1st Session
S. 1757
To ensure individual and family security through health care coverage
for all Americans in a manner that contains the rate of growth in
health care costs and promotes responsible health insurance practices,
to promote choice in health care, and to ensure and protect the health
care of all Americans.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
November 20 (legislative day, November 2), 1993
Mr. Mitchell (for himself, Mr. Moynihan, Mr. Kennedy, Mr. Daschle, Mr.
Rockefeller, Mr. Riegle, Mr. Akaka, Mr. Baucus, Mrs. Boxer, Mr.
Bumpers, Mr. Campbell, Mr. Conrad, Mr. Dodd, Mrs. Feinstein, Mr. Glenn,
Mr. Graham, Mr. Harkin, Mr. Inouye, Mr. Jeffords, Mr. Leahy, Mr. Levin,
Mr. Mathews, Ms. Mikulski, Ms. Moseley-Braun, Mrs. Murray, Mr. Pell,
Mr. Pryor, Mr. Reid, Mr. Simon, and Mr. Wofford) (by request)
introduced the following bill; which was read the first time
_______________________________________________________________________
A BILL
To ensure individual and family security through health care coverage
for all Americans in a manner that contains the rate of growth in
health care costs and promotes responsible health insurance practices,
to promote choice in health care, and to ensure and protect the health
care of all Americans.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
Table
SECTION 1. SHORT TITLE; TABLE OF TITLES AND SUBTITLES.
(a) Short Title.--This Act may be cited as the ``Health Security
Act''.
(b) Table of Titles and Subtitles in Act.--The following are the
titles and subtitles contained in this Act:
Page
TITLE I--HEALTH CARE SECURITY
Subtitle A--Universal Coverage and Individual Responsibility 8
Subtitle B--Benefits........................................ 32
Subtitle C--State Responsibilities.......................... 95
Subtitle D--Health Alliances................................ 118
Subtitle E--Health Plans.................................... 224
Subtitle F--Federal Responsibilities........................ 256
Subtitle G--Employer Responsiblities........................ 303
Subtitle J--General Definitions; Miscellaneous Provisions... 323
TITLE II--NEW BENEFITS
Subtitle A--Medicare Outpatient Prescription Drug Benefit... 343
Subtitle B--Long-Term Care.................................. 389
TITLE III--PUBLIC HEALTH INITIATIVES
Subtitle A--Workforce Priorities Under Federal Payments..... 504
Subtitle B--Academic Health Centers......................... 548
Subtitle C--Health Research Initiatives..................... 560
Subtitle D--Core Functions of Public Health Programs; 564
National Initiatives Regarding
Preventive Health.
Subtitle E--Health Services for Medically Underserved 578
Populations.
Subtitle F--Mental Health; Substance Abuse.................. 615
Subtitle G--Comprehensive School Health Education; School- 627
Related Health Services.
Subtitle H--Public Health Service Initiative................ 667
Subtitle I--Coordination With COBRA Continuation Coverage... 668
TITLE IV--MEDICARE AND MEDICAID
Subtitle A--Medicare and the Alliance System................ 674
Subtitle B--Savings in Medicare Program..................... 752
Subtitle C--Medicaid........................................ 807
Subtitle D--Increase in SSI Personal Needs Allowance........ 832
TITLE V--QUALITY AND CONSUMER PROTECTION
Subtitle A--Quality Management and Improvement.............. 835
Subtitle B--Information Systems, Privacy, and Administrative 859
Simplification.
Subtitle C--Remedies and Enforcement........................ 887
Subtitle D--Medical Malpractice............................. 933
Subtitle E--Fraud and Abuse................................. 948
Subtitle F--McCarran-Ferguson Reform........................ 979
TITLE VI--PREMIUM CAPS; PREMIUM-BASED FINANCING; AND PLAN PAYMENTS
Subtitle A--Premium Caps.................................... 984
Subtitle B--Premium-Related Financing....................... 1025
Subtitle C--Payments to Regional Alliance Health Plans...... 1086
TITLE VII--REVENUE PROVISIONS
Subtitle A--Financing Provisions............................ 1094
Subtitle B--Tax Treatment of Employer-Provided Health Care.. 1133
Subtitle C--Employment Status Provisions.................... 1143
Subtitle D--Tax Treatment of Funding of Retiree Health 1153
Benefits.
Subtitle E--Coordination With COBRA Continuing Care 1157
Provisions.
Subtitle F--Tax Treatment of Organizations Providing Health 1159
Care Services and Related
Organizations.
Subtitle G--Tax Treatment of Long-term Care Insurance and 1171
Services.
Subtitle H--Tax Incentives for Health Services Providers.... 1192
Subtitle I--Miscellaneous Provisions........................ 1199
TITLE VIII--HEALTH AND HEALTH-RELATED PROGRAMS OF THE FEDERAL
GOVERNMENT
Subtitle A--Military Health Care Reform..................... 1207
Subtitle B--Department of Veterans Affairs.................. 1218
Subtitle C--Federal Employees Health Benefits Program....... 1233
Subtitle D--Indian Health Service........................... 1249
Subtitle E--Amendments to the Employee Retirement Income 1262
Security Act of 1974.
Subtitle F--Special Fund for WIC Program.................... 1274
TITLE IX--AGGREGATE GOVERNMENT PAYMENTS TO REGIONAL ALLIANCES
Subtitle A--Aggregate State Payments........................ 1277
Subtitle B--Aggregate Federal Alliance Payments............. 1296
Subtitle C--Borrowing Authority to Cover Cash-Flow 1308
Shortfalls.
TITLE X--COORDINATION OF MEDICAL PORTION OF WORKERS COMPENSATION AND
AUTOMOBILE INSURANCE
Subtitle A--Workers Compensation Insurance.................. 1314
Subtitle B--Automobile Insurance............................ 1326
Subtitle C--Commission on Integration of Health Benefits.... 1331
Subtitle D--Federal Employees' Compensation Act............. 1333
Subtitle E--Davis-Bacon Act and Service Contract Act........ 1333
Subtitle F--Effective Dates................................. 1334
TITLE XI--TRANSITIONAL INSURANCE REFORM
Findings
SEC. 2. FINDINGS.
The Congress finds as follows:
(1) Under the current health care system in the United
States--
(A) individuals risk losing their health care
coverage when they move, when they lose or change jobs,
when they become seriously ill, or when the coverage
becomes unaffordable;
(B) continued escalation of health care costs
threatens the economy of the United States, undermines
the international competitiveness of the Nation, and
strains Federal, State, and local budgets;
(C) an excessive burden of forms, paperwork, and
bureaucratic procedures confuses consumers and
overwhelms health care providers;
(D) fraud and abuse sap the strength of the health
care system; and
(E) health care is a critical part of the economy
of the United States and interstate commerce, consumes
a significant percentage of public and private
spending, and affects all industries and individuals in
the United States.
(2) Under any reform of the health care system--
(A) health insurance and high quality health care
should be secure, uninterrupted, and affordable for all
individuals in the United States;
(B) comprehensive health care benefits that meet
the full range of health needs, including primary,
preventive, and specialized care, should be available
to all individuals in the United States;
(C) the current high quality of health care in the
United States should be maintained;
(D) individuals in the United States should be
afforded a meaningful opportunity to choose among a
range of health plans, health care providers, and
treatments;
(E) regulatory and administrative burdens should be
reduced;
(F) the rapidly escalating costs of health care
should be contained without sacrificing high quality or
impeding technological improvements;
(G) competition in the health care industry should
ensure that health plans and health care providers are
efficient and charge reasonable prices;
(H) a partnership between the Federal Government
and each State should allow the State and its local
communities to design an effective, high-quality system
of care that serves the residents of the State;
(I) all individuals should have a responsibility to
pay their fair share of the costs of health care
coverage;
(J) a health care system should build on the
strength of the employment-based coverage arrangements
that now exist in the United States;
(K) the penalties for fraud and abuse should be
swift and severe; and
(L) an individual's medical information should
remain confidential and should be protected from
unauthorized disclosure and use.
Purposes
SEC. 3. PURPOSES.
The purposes of this Act are as follows:
(1) To guarantee comprehensive and secure health care
coverage.
(2) To simplify the health care system for consumers and
health care professionals.
(3) To control the cost of health care for employers,
employees, and others who pay for health care coverage.
(4) To promote individual choice among health plans and
health care providers.
(5) To ensure high quality health care.
(6) To encourage all individuals to take responsibility for
their health care coverage.
TITLE I--HEALTH CARE SECURITY
table of contents of title
Page
Subtitle A--Universal Coverage and Individual Responsibility
Part 1--Universal Coverage
Sec. 1001. Entitlement to health benefits................... 14
Sec. 1002. Individual responsibilities...................... 15
Sec. 1003. Protection of consumer choice.................... 15
Sec. 1004. Applicable health plan providing coverage........ 16
Sec. 1005. Treatment of other nonimmigrants................. 17
Sec. 1006. Effective date of entitlement.................... 18
Part 2--Treatment of Families and Special Rules
Sec. 1011. General rule of enrollment of family in same 21
health plan.
Sec. 1012. Treatment of certain families.................... 25
Sec. 1013. Multiple employment situations................... 30
Sec. 1014. Treatment of residents of States with statewide 32
single-payer systems.
Subtitle B--Benefits
Part 1--Comprehensive Benefit Package
Sec. 1101. Provision of comprehensive benefits by plans..... 32
Part 2--Description of Items and Services Covered
Sec. 1111. Hospital services................................ 34
Sec. 1112. Services of health professionals................. 36
Sec. 1113. Emergency and ambulatory medical and surgical 38
services.
Sec. 1114. Clinical preventive services..................... 38
Sec. 1115. Mental illness and substance abuse services...... 46
Sec. 1116. Family planning services and services for 63
pregnant women.
Sec. 1117. Hospice care..................................... 63
Sec. 1118. Home health care................................. 64
Sec. 1119. Extended care services........................... 64
Sec. 1120. Ambulance services............................... 66
Sec. 1121. Outpatient laboratory, radiology, and diagnostic 67
services.
Sec. 1122. Outpatient prescription drugs and biologicals.... 67
Sec. 1123. Outpatient rehabilitation services............... 69
Sec. 1124. Durable medical equipment and prosthetic and 70
orthotic devices.
Sec. 1125. Vision care...................................... 71
Sec. 1126. Dental care...................................... 71
Sec. 1127. Health education classes......................... 73
Sec. 1128. Investigational treatments....................... 74
Part 3--Cost Sharing
Sec. 1131. Cost sharing..................................... 76
Sec. 1132. Lower cost sharing............................... 80
Sec. 1133. Higher cost sharing.............................. 82
Sec. 1134. Combination cost sharing......................... 85
Sec. 1135. Table of copayments and coinsurance.............. 86
Sec. 1136. Indexing dollar amounts relating to cost sharing. 89
Part 4--Exclusions
Sec. 1141. Exclusions....................................... 90
Part 5--Role of the National Health Board
Sec. 1151. Definition of benefits........................... 92
Sec. 1152. Acceleration of expanded benefits................ 92
Sec. 1153. Authority with respect to clinical preventive 93
services.
Sec. 1154. Establishment of standards regarding medical 94
necessity.
Part 6--Additional Provisions Relating to Health Care Providers
Sec. 1161. Override of restrictive State practice laws...... 95
Sec. 1162. Provision of items or services contrary to 95
religious belief or moral
conviction.
Subtitle C--State Responsibilities
Sec. 1200. Participating State.............................. 95
Part 1--General State Responsibilities
Sec. 1201. General State responsibilities................... 97
Sec. 1202. State responsibilities with respect to alliances. 98
Sec. 1203. State responsibilities relating to health plans.. 101
Sec. 1204. Financial solvency; fiscal oversight; guaranty 106
fund.
Sec. 1205. Restrictions on funding of additional benefits... 108
Part 2--Requirements for State Single-payer Systems
Sec. 1221. Single-payer system described.................... 109
Sec. 1222. General requirements for single-payer systems.... 109
Sec. 1223. Special rules for States operating statewide 114
single-payer system.
Sec. 1224. Special rules for alliance-specific single-payer 117
systems.
Subtitle D--Health Alliances
Sec. 1300. Health alliance defined.......................... 118
Part 1--Establsubpart a--regional alliancesrate Alliances
Sec. 1301. Regional alliance defined........................ 118
Sec. 1302. Board of directors............................... 119
Sec. 1303. Provider asubpart b--corporate alliancesliances.. 120
Sec. 1311. Corporate alliance defined; individuals eligible 121
for coverage through corporate
alliances; additional
definitions.
Sec. 1312. Timing of elections.............................. 127
Sec. 1313. Termination of alliance election................. 129
Part 2--General Responsibilities and Authorities of Regional Alliances
Sec. 1321. Contracts with health plans...................... 131
Sec. 1322. Offering choice of health plans for enrollment; 132
establishment of fee-for-service
schedule.
Sec. 1323. Enrollment rules and procedures.................. 138
Sec. 1324. Issuance of health security cards................ 148
Sec. 1325. Consumer information and marketing............... 148
Sec. 1326. Ombudsman........................................ 150
Sec. 1327. Data collection; quality......................... 150
Sec. 1328. Additional duties................................ 150
Sec. 1329. Additional authorities for regional alliances to 151
address needs in areas with
inadequate health services;
prohibition of insurance role.
Sec. 1330. Prohibition against self-dealing and conflicts of 152
interest.
Part 3--Authorities and Responsibilities of Regional Alliances Relating
to Fsubpart a--collection of fundsions
Sec. 1341. Information and negotiation and acceptance of 153
bids.
Sec. 1342. Calculation and publication of general family 156
share and general employer
premium amounts.
Sec. 1343. Determination of family share for families....... 158
Sec. 1344. Notice of family payments due.................... 163
Sec. 1345. Collections...................................... 168
Sec. 1346. Coordination amsubpart b--paymentsces............ 171
Sec. 1351. Payment to regional alliance health plans........ 174
Sec. 1352. Alliance administrative allowance percentage..... 178
Sec. 1353. Payments subpart c--financial managementcademic 179
health centers and graduate
medical education.
Sec. 1subpart d--reductions in cost sharing; income determinations 180
Sec. 1371. Reduction in cost sharing for low-income families 183
Sec. 1372. Application process for cost sharing reductions.. 186
Sec. 1373. Application for premium discounts and reduction 191
in liabilities to alliances.
Sec. 1374. General provisions relating to application 193
process.
Sec. 1375. End-of-year reconciliation for premium discount 196
and repayment reduction with
actual income.
Part 4--Responsibilities and Authorities of Corporate Alliances
Sec. 1381. Contracts with health plans...................... 199
Sec. 1382. Offering choice of health plans for enrollment... 200
Sec. 1383. Enrollment; issuance of health security card..... 201
Sec. 1384. Community-rated premiums within premium areas.... 203
Sec. 1385. Assistance for low-wage families................. 205
Sec. 1386. Consumer information and marketing; data 206
collection and quality;
additional duties.
Sec. 1387. Plan and information requirements................ 206
Sec. 1388. Management of funds; relations with employees.... 207
Sec. 1389. Cost control..................................... 207
Sec. 1390. Payments by corporate alliance employers to 208
corporate alliances.
Sec. 1391. Coordination of payments......................... 208
Sec. 1392. Applicability of ERISA enforcement mechanisms for 209
enforcement of certain
requirements.
Sec. 1393. Applicability of certain ERISA protections to 209
enrolled individuals.
Sec. 1394. Disclosure and reserve requirements.............. 210
Sec. 1395. Trusteeship by the Secretary of insolvent 211
corporate alliance health plans.
Sec. 1396. Guaranteed benefits under trusteeship of the 216
Secretary.
Sec. 1397. Imposition and collection of periodic assessments 220
on self-insured corporate
alliance plans.
Sec. 1398. Payments to Federal government by multiemployer 224
corporate alliances for academic
health centers and graduate
medical education.
Subtitle E--Health Plans
Sec. 1400. Health plan defined.............................. 224
Part 1--Requirements Relating to Comprehensive Benefit Package
Sec. 1401. Application of requirements...................... 226
Sec. 1402. Requirements relating to enrollment and coverage. 226
Sec. 1403. Community rating................................. 231
Sec. 1404. Marketing of health plans; information........... 231
Sec. 1405. Grievance procedure.............................. 233
Sec. 1406. Health plan arrangements with providers.......... 234
Sec. 1407. Preemption of certain State laws relating to 237
health plans.
Sec. 1408. Financial solvency............................... 239
Sec. 1409. Requirement for offering cost sharing policy..... 239
Sec. 1410. Quality assurance................................ 239
Sec. 1411. Provider verification............................ 239
Sec. 1412. Consumer disclosures of utilization management 240
protocols.
Sec. 1413. Confidentiality, data management, and reporting.. 240
Sec. 1414. Participation in reinsurance system.............. 241
Part 2--Requirements Relating to Supplemental Insurance
Sec. 1421. Imposition of requirements on supplemental 241
insurance.
Sec. 1422. Standards for supplemental health benefit 243
policies.
Sec. 1423. Standards for cost sharing policies.............. 246
Part 3--Requirements Relating to Essential Community Providers
Sec. 1431. Health plan requirement.......................... 249
Sec. 1432. Sunset of requirement............................ 252
Part 4--Requirements Relating to Workers' Compensation and Automobile
Medical Liability Coverage
Sec. 1441. Reference to requirements relating to workers 256
compensation services.
Sec. 1442. Reference to requirements relating to automobile 256
medical liability services.
Subtitle F--Federal Responsibilities
subpart a--establishment of national health board
Sec. 1501. Creation of National Health Board; membership.... 256
Sec. 1502. Qualifications of board members.................. 258
Sec. 1503. General duties and responsibilities.............. 259
Sec. 1504. Annual report.................................... 262
Sec. 1505. Powers........................................... 263
Ssubpart b--responsibilities relating to review and approval of state 4
systems
Sec. 1511. Federal review and action on State systems....... 264
Sec. 1512. Failure of participating States to meet 270
conditions for compliance.
Sec. 1513. Reduction in payments for health programs by 272
Secretary of Health and Human
Services.
Sec. 1514. Review of Federal determinations................. 273
Sec. 151subpart c--responsibilities in absence of state systems 273
Sec. 1521. Application of subpart........................... 275
Sec. 1522. Federal assumption of responsibilities in non- 275
participating States.
Sec. 1523. Imposition of surcharge on premiums under 277
federally-operated system.
Sec.subpart d--establishment of class factors for charging premiums 278
Ssubpart e--risk adjustment and reinsurance methodology for payment of
plans
Sec. 1541. Development of a risk adjustment and reinsurance 279
methodology.
Sec. 1542. Incentives to enroll disadvantaged groups........ 285
Sec. 1543. Advisory committee............................... 285
Sec. 1544. Research and demonstrations...................... 286
Sec. 1545subpart f--responsibilities for financial requirements 286
Sec. 1551. Capital standards for regional alliance health 286
plan.
Sec. 1552. Standard for guaranty funds...................... 287
Part 2--Responsisubpart a--general responsibilitiesd Human Services
Sec. 1571. General responsibilities of Secretary of Health 289
and Human Services.
Sec. 15subpart b--certification of essential community providers 290
Sec. 1581. Certification.................................... 293
Sec. 1582. Categories of providers automatically certified.. 293
Sec. 1583. Standards for additional providers............... 296
Sec. 1584. Certification process; review; termination of 297
certifications.
Sec. 1585. Notification of health alliances and 299
participating States.
Part 3--Specific Responsibilities of Secretary of Labor
Sec. 1591. Responsibilities of Secretary of Labor........... 300
Subtitle G--Employer Responsibilities
Sec. 1601. Payment requirement.............................. 303
Sec. 1602. Requirement for information reporting............ 303
Sec. 1603. Requirements relating to new employees........... 314
Sec. 1604. Auditing of records.............................. 315
Sec. 1605. Prohibition of certain employer discrimination... 316
Sec. 1606. Prohibition on self-funding of cost sharing 316
benefits by regional alliance
employers.
Sec. 1607. Equal voluntary contribution requirement......... 317
Sec. 1608. Employer retiree obligation...................... 321
Sec. 1609. Enforcement...................................... 323
Subtitle J--General Definitions; Miscellaneous Provisions
Part 1--General Definitions
Sec. 1901. Definitions relating to employment and income.... 323
Sec. 1902. Other general definitions........................ 331
Subtitle B--Miscellaneous Provisions
Sec. 1911. Use of interim, final regulations................ 341
Sec. 1912. Social Security Act references................... 341
Title I, Subtitle A
TITLE I--HEALTH CARE SECURITY
Subtitle A--Universal Coverage and Individual Responsibility
PART 1--UNIVERSAL COVERAGE
SEC. 1001. ENTITLEMENT TO HEALTH BENEFITS.
(a) In General.--In accordance with this part, each eligible
individual is entitled to the comprehensive benefit package under
subtitle B through the applicable health plan in which the individual
is enrolled consistent with this title.
(b) Health Security Card.--Each eligible individual is entitled to
a health security card to be issued by the alliance or other entity
that offers the applicable health plan in which the individual is
enrolled.
(c) Eligible Individual Defined.--In this Act, the term ``eligible
individual'' means an individual who is residing in the United States
and who is--
(1) a citizen or national of the United States;
(2) an alien permanently residing in the United States
under color of law (as defined in section 1902(1)); or
(3) a long-term nonimmigrant (as defined in section
1902(19)).
(d) Treatment of Medicare-Eligible Individuals.--Subject to section
1012(a), a medicare-eligible individual is entitled to health benefits
under the medicare program instead of the entitlement under subsection
(a).
(e) Treatment of Prisoners.--A prisoner (as defined in section
1902(26)) is entitled to health care services provided by the authority
responsible for the prisoner instead of the entitlement under
subsection (a).
SEC. 1002. INDIVIDUAL RESPONSIBILITIES.
(a) In General.--In accordance with this Act, each eligible
individual (other than a medicare-eligible individual)--
(1) must enroll in an applicable health plan for the
individual, and
(2) must pay any premium required, consistent with this
Act, with respect to such enrollment.
(b) Limitation on Disenrollment.--No eligible individual shall be
disenrolled from an applicable health plan until the individual--
(1) is enrolled under another applicable health plan, or
(2) becomes a medicare-eligible individual.
SEC. 1003. PROTECTION OF CONSUMER CHOICE.
Nothing in this Act shall be construed as prohibiting the
following:
(1) An individual from purchasing any health care services.
(2) An individual from purchasing supplemental insurance
(offered consistent with this Act) to cover health care
services not included within the comprehensive benefit package.
(3) An individual who is not an eligible individual from
purchasing health insurance (other than through a regional
alliance).
(4) Employers from providing coverage for benefits in
addition to the comprehensive benefit package (subject to part
2 of subtitle E).
SEC. 1004. APPLICABLE HEALTH PLAN PROVIDING COVERAGE.
(a) Specification of Applicable Health Plan.--Except as otherwise
provided:
(1) General rule: regional alliance health plans.--The
applicable health plan for a family is a regional alliance
health plan for the alliance area in which the family resides.
(2) Corporate alliance health plans.--In the case of a
family member that is eligible to enroll in a corporate
alliance health plan under section 1311(c), the applicable
health plan for the family is such a corporate alliance health
plan.
(b) Choice of Plans for Certain Groups.--
(1) Military personnel and families.--For military
personnel and families who elect a Uniformed Services Health
Plan of the Department of Defense under section 1073a(d) of
title 10, United States Code, as inserted by section 8001(a) of
this Act, that plan shall be the applicable health plan.
(2) Veterans.--For veterans and families who elect to
enroll in a veterans health plan under section 1801 of title
38, United States Code, as inserted by section 8101(a) of this
Act, that plan shall be the applicable health plan.
(3) Indians.--For those individuals who are eligible to
enroll, and who elect to enroll, in a health program of the
Indian Health Service under section 8302(b) or 8306(b), that
program shall be the applicable health plan.
SEC. 1005. TREATMENT OF OTHER NONIMMIGRANTS.
(a) Undocumented Aliens Ineligible for Benefits.--An undocumented
alien is not eligible to obtain the comprehensive benefit package
through enrollment in a health plan pursuant to this Act.
(b) Diplomats and Other Foreign Government Officials.--Subject to
conditions established by the National Health Board in consultation
with the Secretary of State, a nonimmigrant under subparagraph (A) or
(G) of section 101(a)(15) of the Immigration and Nationality Act may
obtain the comprehensive benefit package through enrollment in the
regional alliance health plan for the alliance area in which the
nonimmigrant resides.
(c) Reciprocal Treatment of Other Nonimmigrants.--With respect to
those classes of individuals who are lawful nonimmigrants but who are
not long-term nonimmigrants (as defined in section 1902(19)) or
described in subsection (b), such individuals may obtain such benefits
through enrollment with regional alliance health plans only in
accordance with such reciprocal agreements between the United States
and foreign states as may be entered into.
SEC. 1006. EFFECTIVE DATE OF ENTITLEMENT.
(a) Regional Alliance Eligible Individuals.--
(1) In general.--In the case of regional alliance eligible
individuals residing in a State, the entitlement under this
part (and requirements under section 1002) shall not take
effect until the State becomes a participating State (as
defined in section 1200).
(2) Transitional rule for corporate alliances.--
(A) In general.--In the case of a State that
becomes a participating State before the general
effective date (as defined in subsection (c)) and for
periods before such date, under rules established by
the Board, an individual who is covered under a plan
(described in subparagraph (C)) based on the individual
(or the individual's spouse) being a qualifying
employee of a qualifying employer, the individual shall
not be treated under this Act as a regional alliance
eligible individual.
(B) Qualifying employer defined.--In subparagraph
(A), the term ``qualifying employer'' means an employer
that--
(i) is described in section 1311(b)(1)(A),
or is participating in a multiemployer plan
described in section 1311(b)(1)(B) or plan
described in section 1311(b)(1)(C), and
(ii) provides such notice to the regional
alliance involved as the Board specifies.
(C) Benefits plan described.--A plan described in
this subparagraph is an employee benefit plan that--
(i) provides (through insurance or
otherwise) the comprehensive benefit package,
and
(ii) provides an employer contribution of
at least 80 percent of the premium (or premium
equivalent) for coverage.
(b) Corporate Alliance Eligible Individuals.--
(1) In general.--In the case of corporate alliance eligible
individuals, the entitlement under this part shall not take
effect until the general effective date.
(2) Transition.--For purposes of this Act and before the
general effective date, in the case of an eligible individual
who resides in a participating State, the individual is deemed
a regional alliance eligible individual until the individual
becomes a corporate alliance eligible individual, unless
subsection (a)(2)(A) applies to the individual.
(c) General Effective Date Defined.--In this Act, the term
``general effective date'' means January 1, 1998.
PART 2--TREATMENT OF FAMILIES AND SPECIAL RULES
SEC. 1011. GENERAL RULE OF ENROLLMENT OF FAMILY IN SAME HEALTH PLAN.
(a) In General.--Except as provided in this part or otherwise, all
members of the same family (as defined in subsection (b)) shall be
enrolled in the same applicable health plan.
(b) Family Defined.--In this Act, unless otherwise provided, the
term ``family''--
(1) means, with respect to an eligible individual who is
not a child (as defined in subsection (c)), the individual; and
(2) includes the following persons (if any):
(A) The individual's spouse if the spouse is an
eligible individual.
(B) The individual's children (and, if applicable,
the children of the individual's spouse) if they are
eligible individuals.
(c) Classes of Family Enrollment; Terminology.--
(1) In general.--In this Act, each of the following is a
separate class of family enrollment:
(A) Coverage only of an individual (referred to in
this Act as the ``individual'' enrollment or class of
enrollment).
(B) Coverage of a married couple without children
(referred to in this Act as the ``couple-only''
enrollment or class of enrollment).
(C) Coverage of an unmarried individual and one or
more children (referred to in this Act as the ``single
parent'' enrollment or class of enrollment).
(D) Coverage of a married couple and one or more
children (referred to in this Act as the ``dual
parent'' enrollment or class of enrollment).
(2) References to family and couple classes of
enrollment.--In this Act:
(A) Family.--The terms ``family enrollment'' and
``family class of enrollment'', refer to enrollment in
a class of enrollment described in subparagraph (B),
(C), or (D) of paragraph (1).
(B) Couple.--The term ``couple class of
enrollment'' refers to enrollment in a class of
enrollment described in subparagraph (B) or (D) of
paragraph (1).
(d) Spouse; Married; Couple.--
(1) In general.--In this Act, the terms ``spouse'' and
``married'' mean, with respect to a person, another individual
who is the spouse of the person or married to the person, as
determined under applicable State law.
(2) Couple.--The term ``couple'' means an individual and
the individual's spouse.
(e) Child Defined.--
(1) In general.--In this Act, except as otherwise provided,
the term ``child'' means an eligible individual who (consistent
with paragraph (3))--
(A) is under 18 years of age (or under 24 years of
age in the case of a full-time student), and
(B) is a dependent of an eligible individual.
(2) Application of state law.--Subject to paragraph (3),
determinations of whether a person is the child of another
person shall be made in accordance with applicable State law.
(3) National rules.--The National Health Board may
establish such national rules respecting individuals who will
be treated as children under this Act as the Board determines
to be necessary. Such rules shall be consistent with the
following principles:
(A) Step and foster child.--A child includes a step
child or foster child who is an eligible individual
living with an adult in a regular parent-child
relationship.
(B) Disabled child.--A child includes an unmarried
dependent eligible individual regardless of age who is
incapable of self-support because of mental or physical
disability which existed before age 21.
(C) Certain 3-generation families.--A child
includes the grandchild of an individual, if the parent
of the grandchild is a child and the parent and
grandchild are living with the grandparent.
(D) Treatment of emancipated minors and married
individuals.--An emancipated minor or married
individual shall not be treated as a child.
(E) Children placed for adoption.--A child includes
a child who is placed for adoption with an eligible
individual.
(f) Additional Rules.--The Board shall provide for such additional
exceptions and special rules, including rules relating to--
(1) families in which members are not residing in the same
area or in which children are not residing with their parents,
(2) the treatment of eligible individuals who are under 19
years of age and who are not a dependent of an eligible
individual,
(3) changes in family composition occurring during a year,
and
(4) treatment of children of parents who are separated or
divorced,
as the Board finds appropriate.
SEC. 1012. TREATMENT OF CERTAIN FAMILIES.
(a) Treatment of Medicare-Eligible Individuals Who are Qualifying
Employees or Spouses of Qualifying Employees.--
(1) In general.--Except as specifically provided, in the
case of an individual who is an individual described in
paragraph (2) with respect to 2 consecutive months in a year
(and it is anticipated would be in the following month and in
such following month would be a medicare-eligible individual
but for this paragraph), the individual shall not be treated as
a medicare-eligible individual under this Act during such
following month and the remainder of the year.
(2) Individual described.--An individual described in this
paragraph with respect to a month is an individual who is a
qualifying employee or the spouse or family member of a
qualifying employee in the month.
(b) Separate Treatment for Certain Groups of Individuals.--In the
case of a family that includes one or more individuals in a group
described in subsection (c)--
(1) all the individuals in each such group within the
family shall be treated collectively as a separate family, and
(2) all the individuals not described in any such group
shall be treated collectively as a separate family.
(c) Groups of Individuals Described.--Each of the following is a
group of individuals described in this subsection:
(1) AFDC recipients (as defined in section 1902(3)).
(2) Disabled SSI recipients (as defined in section
1902(13)) .
(3) SSI recipients (as defined in section 1902(33)) who are
not disabled SSI recipients.
(4) Electing veterans (as defined in subsection (d)(1)).
(5) Active duty military personnel (as defined in
subsection (d)(2)).
(6) Electing Indians (as defined in subsection (d)(3)).
(7) Prisoners (as defined in section 1902(26)).
(d) Special Rules.--In this Act:
(1) Electing veterans.--
(A) Defined.--Subject to subparagraph (B), the term
``electing veteran'' means a veteran who makes an
election to enroll with a health plan of the Department
of Veterans Affairs under chapter 18 of title 38,
United States Code, as added by section 8101(a)(1).
(B) Family exception.--Subparagraph (A) shall not
apply with respect to coverage under a health plan
referred to in such subparagraph if, for the area in
which the electing veteran resides, such health plan
offers coverage to family members of an electing
veteran and the veteran elects family enrollment under
such plan (instead of individual enrollment).
(2) Active duty military personnel.--
(A) In general.--Subject to subparagraph (B), the
term ``active duty military personnel'' means an
individual on active duty in the Uniformed Services of
the United States.
(B) Exception.--If an individual described in
subparagraph (A) elects family coverage under section
1073a(e)(2)(A) of title 10, United States Code (as
added by section 8001(a)), then paragraph (5) of
subsection (c) shall not apply with respect to such
coverage.
(3) Electing indians.--
(A) In general.--Subject to subparagraph (B), the
term ``electing Indian'' means an eligible individual
who makes an election under section 8302(b) of this
Act.
(B) Family election for all individuals eligible to
elect.--No such election shall be made with respect to
an individual in a family (as defined without regard to
this section) unless such election is made for all
eligible individuals (described in section 8302(a)) who
are family members of the family.
(4) Multiple choice.--Eligible individuals who are
permitted to elect coverage under more than one health plan or
program referred to in this subsection may elect which of such
plans or programs will be the applicable health plan under this
Act.
(e) Qualifying Students.--
(1) In general.--In the case of a qualifying student
(described in paragraph (2)), the student may elect to enroll
in a regional alliance health plan offered by the regional
alliance for the area in which the school is located.
(2) Qualifying student.--In paragraph (1), the term
``qualifying student'' means an individual who--
(A) but for this subsection would receive coverage
under a health plan as a child of another person, and
(B) is a full-time student at a school in an
alliance area that is different from the alliance area
(or, in the case of a corporate alliance, such coverage
area as the Board may specify) providing the coverage
described in subparagraph (A).
(3) Payment rules.--
(A) Continued treatment as family.--Except as
provided in subparagraph (B), nothing in this
subsection shall be construed as affecting the payment
liabilities between families and health alliances or
between health alliances and health plans.
(B) Transfer payment.--In the case of an election
under paragraph (1), for transfer payments see section
1346(e).
(f) Spouses Living in Different Alliance Areas.--The Board shall
provide for such special rules in applying this Act in the case of a
couple in which the spouses reside in different alliance areas as the
Board finds appropriate.
SEC. 1013. MULTIPLE EMPLOYMENT SITUATIONS.
(a) Multiple Employment of an Individual.--In the case of an
individual who--
(1)(A) is not married or (B) is married and whose spouse is
not a qualifying employee (as defined in section 1901(b)(1)),
(2) is not a child, and
(3) who is a qualifying employee both of a regional
alliance employer and of a corporate alliance employer (or of 2
corporate alliance employers),
the individual may elect the applicable health plan to be either a
regional alliance health plan (for the alliance area in which the
individual resides) or a corporate alliance health plan (for an
employer employing the individual).
(b) Multiple Employment Within a Family.--
(1) Married couple with employment with a regional alliance
employer and with a corporate alliance employer.--In the case
of a married individual--
(A) who is a qualifying employee of a regional
alliance employer and whose spouse is a qualifying
employee of a corporate alliance employer, or
(B) who is a qualifying employee of a corporate
alliance employer and whose spouse is a qualifying
employee of a regional alliance employer,
the individual and the individual's spouse may elect the
applicable health plan to be either a regional alliance health
plan (for the alliance area in which the couple resides) or a
corporate alliance health plan (for an employer employing the
individual or the spouse).
(2) Married couple with different corporate alliance
employers.--In the case of a married individual--
(A) who is a qualifying employee of a corporate
alliance employer, and
(B) whose spouse is a qualifying employee of a
different corporate alliance employer,
the individual and the individual's spouse may elect the
applicable health plan to be a corporate alliance health plan
for an employer employing either the individual or the spouse.
SEC. 1014. TREATMENT OF RESIDENTS OF STATES WITH STATEWIDE SINGLE-PAYER
SYSTEMS.
(a) Universal Coverage.--Notwithstanding the previous provisions of
this title, except as provided in part 2 of subtitle C, in the case of
an individual who resides in a State that has a Statewide single-payer
system under section 1223, universal coverage shall be provided
consistent with section 1222(3).
(b) Individual Responsibilities.--In the case of an individual who
resides in a single-payer State, the responsibilities of such
individual under such system shall supersede the obligations of the
individual under section 1002.
Title I, Subtitle B
Subtitle B--Benefits
PART 1--COMPREHENSIVE BENEFIT PACKAGE
SEC. 1101. PROVISION OF COMPREHENSIVE BENEFITS BY PLANS.
(a) In General.--The comprehensive benefit package shall consist of
the following items and services (as described in part 2), subject to
the cost sharing requirements described in part 3, the exclusions
described in part 4, and the duties and authority of the National
Health Board described in part 5:
(1) Hospital services (described in section 1111).
(2) Services of health professionals (described in section
1112).
(3) Emergency and ambulatory medical and surgical services
(described in section 1113).
(4) Clinical preventive services (described in section
1114).
(5) Mental illness and substance abuse services (described
in section 1115).
(6) Family planning services and services for pregnant
women (described in section 1116).
(7) Hospice care (described in section 1117).
(8) Home health care (described in section 1118).
(9) Extended care services (described in section 1119).
(10) Ambulance services (described in section 1120).
(11) Outpatient laboratory, radiology, and diagnostic
services (described in section 1121).
(12) Outpatient prescription drugs and biologicals
(described in section 1122).
(13) Outpatient rehabilitation services (described in
section 1123).
(14) Durable medical equipment and prosthetic and orthotic
devices (described in section 1124).
(15) Vision care (described in section 1125).
(16) Dental care (described in section 1126).
(17) Health education classes (described in section 1127).
(18) Investigational treatments (described in section
1128).
(b) No Other Limitations or Cost Sharing.--The items and services
in the comprehensive benefit package shall not be subject to any
duration or scope limitation or any deductible, copayment, or
coinsurance amount that is not required or authorized under this Act.
(c) Health Plan.--Unless otherwise provided in this subtitle, for
purposes of this subtitle, the term ``health plan'' has the meaning
given such term in section 1400.
PART 2--DESCRIPTION OF ITEMS AND SERVICES COVERED
SEC. 1111. HOSPITAL SERVICES.
(a) Coverage.--The hospital services described in this section are
the following items and services:
(1) Inpatient hospital services.
(2) Outpatient hospital services.
(3) 24-hour a day hospital emergency services.
(b) Limitation.--The hospital services described in this section do
not include hospital services provided for the treatment of a mental or
substance abuse disorder (which are subject to section 1115), except
for medical detoxification as required for the management of medical
conditions associated with withdrawal from alcohol or drugs (which is
not covered under such section).
(c) Definitions.--For purposes of this subtitle:
(1) Hospital.--The term ``hospital'' has the meaning given
such term in section 1861(e) of the Social Security Act, except
that such term shall include--
(A) in the case of an item or service provided to
an individual whose applicable health plan is specified
pursuant to section 1004(b)(1), a facility of the
uniformed services under title 10, United States Code,
that is primarily engaged in providing services to
inpatients that are equivalent to the services provided
by a hospital defined in such section 1861(e);
(B) in the case of an item or service provided to
an individual whose applicable health plan is specified
pursuant to section 1004(b)(2), a facility operated by
the Department of Veterans Affairs that is primarily
engaged in providing services to inpatients that are
equivalent to the services provided by a hospital
defined in such section 1861(e); and
(C) in the case of an item or service provided to
an individual whose applicable health plan is specified
pursuant to section 1004(b)(3), a facility operated by
the Indian Health Service that is primarily engaged in
providing services to inpatients that are equivalent to
the services provided by a hospital defined in such
section 1861(e).
(2) Inpatient hospital services.--The term ``inpatient
hospital services'' means items and services described in
paragraphs (1) through (3) of section 1861(b) of the Social
Security Act when provided to an inpatient of a hospital. The
National Health Board shall specify those health professional
services described in section 1112 that shall be treated as
inpatient hospital services when provided to an inpatient of a
hospital.
SEC. 1112. SERVICES OF HEALTH PROFESSIONALS.
(a) Coverage.--The items and services described in this section
are--
(1) inpatient and outpatient health professional services,
including consultations, that are provided in--
(A) a home, office, or other ambulatory care
setting; or
(B) an institutional setting; and
(2) services and supplies (including drugs and biologicals
which cannot be self-administered) furnished as an incident to
such health professional services, of kinds which are commonly
furnished in the office of a health professional and are
commonly either rendered without charge or included in the bill
of such professional.
(b) Limitation.--The items and services described in this section
do not include items or services that are described in any other
section of this part. An item or service that is described in section
1114 but is not provided consistent with a periodicity schedule for
such item or service specified in such section or under section 1153
may be covered under this section if the item or service otherwise
meets the requirements of this section.
(c) Definitions.--Unless otherwise provided in this Act, for
purposes of this Act:
(1) Health professional.--The term ``health professional''
means an individual who provides health professional services.
(2) Health professional services.--The term ``health
professional services'' means professional services that--
(A) are lawfully provided by a physician; or
(B) would be described in subparagraph (A) if
provided by a physician, but are provided by another
person who is legally authorized to provide such
services in the State in which the services are
provided.
SEC. 1113. EMERGENCY AND AMBULATORY MEDICAL AND SURGICAL SERVICES.
The emergency and ambulatory medical and surgical services
described in this section are the following items and services provided
by a health facility that is not a hospital and that is legally
authorized to provide the services in the State in which they are
provided:
(1) 24-hour a day emergency services.
(2) Ambulatory medical and surgical services.
SEC. 1114. CLINICAL PREVENTIVE SERVICES.
(a) Coverage.--The clinical preventive services described in this
section are--
(1) an item or service for high risk populations (as
defined by the National Health Board) that is specified and
defined by the Board under section 1153, but only when the item
or service is provided consistent with any periodicity schedule
for the item or service promulgated by the Board;
(2) except as modified by the National Health Board under
section 1153, an age-appropriate immunization, test, or
clinician visit specified in one of subsections (b) through (h)
that is provided consistent with any periodicity schedule for
the item or service specified in the applicable subsection or
by the National Health Board under section 1153; and
(3) an immunization, test, or clinician visit that is
provided to an individual during an age range other than the
age range for such immunization, test, or clinician visit that
is specified in one of subsections (b) through (h), but only
when provided consistent with any requirements for such
immunizations, tests, and clinician visits established by the
National Health Board under section 1153.
(b) Individuals Under 3.--For an individual under 3 years of age:
(1) Immunizations.--The immunizations specified in this
subsection are age-appropriate immunizations for the following
illnesses:
(A) Diphtheria.
(B) Tetanus.
(C) Pertussis.
(D) Polio.
(E) Haemophilus influenzae type B.
(F) Measles.
(G) Mumps.
(H) Rubella.
(I) Hepatitis B.
(2) Tests.--The tests specified in this subsection are as
follows:
(A) 1 hematocrit.
(B) 2 blood tests to screen for blood lead levels
for individuals who are at risk for lead exposure.
(3) Clinician visits.--The clinician visits specified in
this subsection are 1 clinician visit for an individual who is
newborn and 7 other clinician visits.
(c) Individuals Age 3 to 5.--For an individual at least 3 years of
age, but less than 6 years of age:
(1) Immunizations.--The immunizations specified in this
subsection are age-appropriate immunizations for the following
illnesses:
(A) Diphtheria.
(B) Tetanus.
(C) Pertussis.
(D) Polio.
(E) Measles.
(F) Mumps.
(G) Rubella.
(2) Tests.--The tests specified in this subsection are 1
urinalysis.
(3) Clinician visits.--The clinician visits specified in
this subsection are 3 clinician visits.
(d) Individuals Age 6 to 12.--For an individual at least 6 years of
age, but less than 13 years of age, the clinician visits specified in
this subsection are 3 clinician visits.
(e) Individuals Age 13 to 19.--For an individual at least 13 years
of age, but less than 20 years of age:
(1) Immunizations.--The immunizations specified in this
subsection are age-appropriate immunizations for the following
illnesses:
(A) Tetanus.
(B) Diphtheria.
(2) Tests.--The tests specified in this subsection are as
follows:
(A) Papanicolaou smears and pelvic exams, for
females who have reached childbearing age and are at
risk for cervical cancer, every 3 years, but--
(i) annually until 3 consecutive negative
smears have been obtained, if medically
necessary; and
(ii) annually for females who are at risk
for fertility related infectious illnesses.
(B) Annual screening for chlamydia and gonorrhea
for females who have reached childbearing age and are
at risk for fertility related infectious illnesses.
(3) Clinician visits.--The clinician visits specified in
this subsection are 3 clinician visits.
(f) Individuals Age 20 to 39.--For an individual at least 20 years
of age, but less than 40 years of age:
(1) Immunizations.--The immunizations specified in this
subsection are booster immunizations against tetanus and
diphtheria every 10 years.
(2) Tests.--The tests specified in this subsection are as
follows:
(A) Papanicolaou smears and pelvic exams for
females every 3 years, but--
(i) annually if an abnormal smear has been
obtained, until 3 consecutive negative smears
have been obtained; and
(ii) annually for females who are at risk
for fertility related infectious illnesses.
(B) Annual screening for chlamydia and gonorrhea
for females who are at risk for fertility related
infectious illnesses.
(C) Cholesterol every 5 years.
(3) Clinician visits.--The clinician visits specified in
this subsection are 1 clinician visit every 3 years.
(g) Individuals Age 40 to 49.--For an individual at least 40 years
of age, but less than 50 years of age:
(1) Immunizations.--The immunizations specified in this
subsection are booster immunizations against tetanus and
diphtheria every 10 years.
(2) Tests.--The tests specified in this subsection are as
follows:
(A) Papanicolaou smears and pelvic exams for
females every 2 years, but--
(i) annually if an abnormal smear has been
obtained, until 3 consecutive negative smears
have been obtained; and
(ii) annually for females who are at risk
for fertility related infectious illnesses.
(B) Annual screening for chlamydia and gonorrhea
for females who are at risk for fertility related
infectious illnesses.
(C) Cholesterol every 5 years.
(3) Clinician visits.--The clinician visits specified in
this subsection are 1 clinician visit every 2 years.
(h) Individuals Age 50 to 65.--For an individual at least 50 years
of age, but less than 65 years of age:
(1) Immunizations.--The immunizations specified in this
subsection are booster immunizations against tetanus and
diphtheria every 10 years.
(2) Tests.--The tests specified in this subsection are as
follows:
(A) Papanicolaou smears and pelvic exams for
females every 2 years.
(B) Mammograms for females every 2 years.
(C) Cholesterol every 5 years.
(3) Clinician visits.--The clinician visits specified in
this subsection are 1 clinician visit every 2 years.
(i) Individuals Age 65 or Older.--For an individual at least 65
years of age who is enrolled under a health plan:
(1) Immunizations.--The immunizations specified in this
subsection are as follows:
(A) Booster immunizations against tetanus and
diphtheria every 10 years.
(B) Age-appropriate immunizations for the following
illnesses:
(i) Influenza.
(ii) Pneumococcal invasive disease.
(2) Tests.--The tests specified in this subsection are as
follows:
(A) Papanicolaou smears and pelvic exams for
females who are at risk for cervical cancer every 2
years.
(B) Mammograms for females every 2 years.
(C) Cholesterol every 5 years.
(3) Clinician visits.--The clinician visits specified in
this subsection are 1 clinician visit every year.
(j) Clinician Visit.--For purposes of this section, the term
``clinician visit'' includes the following health professional services
(as defined in section 1112(c)):
(1) A complete medical history.
(2) An appropriate physical examination.
(3) Risk assessment.
(4) Targeted health advice and counseling, including
nutrition counseling.
(5) The administration of age-appropriate immunizations and
tests specified in subsections (b) through (h).
(k) Immunizations and Tests Not Administered During Clinician
Visit.--Notwithstanding subsection (i)(5), the clinical preventive
services described in this section include an immunization or test
described in this section that is administered to an individual
consistent with any periodicity schedule for the immunization or test
during the age range specified for the immunization or test, and any
administration fee for such immunization or test, even if the
immunization or test is not administered during a clinician visit.
SEC. 1115. MENTAL ILLNESS AND SUBSTANCE ABUSE SERVICES.
(a) Coverage.--The mental illness and substance abuse services that
are described in this section are the following items and services for
eligible individuals, as defined in section 1001(c), who satisfy the
eligibility requirements in subsection (b):
(1) Inpatient and residential mental illness and substance
abuse treatment (described in subsection (c)).
(2) Intensive nonresidential mental illness and substance
abuse treatment (described in subsection (d)).
(3) Outpatient mental illness and substance abuse treatment
(described in subsection (e)), including case management,
screening and assessment, crisis services, and collateral
services.
(b) Eligibility.--The eligibility requirements referred to in
subsection (a) are as follows:
(1) Inpatient, residential, nonresidential, and outpatient
treatment.--An eligible individual is eligible to receive
coverage for inpatient and residential mental illness and
substance abuse treatment, intensive nonresidential mental
illness and substance abuse treatment, or outpatient mental
illness and substance abuse treatment (except case management
and collateral services) if the individual--
(A) has, or has had during the 1-year period
preceding the date of such treatment, a diagnosable
mental disorder or a diagnosable substance abuse
disorder; and
(B) is experiencing, or is at significant risk of
experiencing, functional impairment in family, work,
school, or community activities.
For purposes of this paragraph, an individual who has a
diagnosable mental disorder or a diagnosable substance abuse
disorder, is receiving treatment for such disorder, but does
not satisfy the functional impairment criterion in subparagraph
(B) shall be treated as satisfying such criterion if the
individual would satisfy such criterion without such treatment.
(2) Case management.--An eligible individual is eligible to
receive coverage for case management if--
(A) a health professional designated by the health
plan in which the individual is enrolled determines
that the individual should receive such services; and
(B) the individual is eligible to receive coverage
for, and is receiving, outpatient mental illness and
substance abuse treatment with respect to a diagnosable
mental disorder or a diagnosable substance abuse
disorder.
(3) Screening and assessment and crisis services.--All
eligible individuals enrolled under a health plan are eligible
to receive coverage for outpatient mental illness and substance
abuse treatment consisting of screening and assessment and
crisis services.
(4) Collateral services.--An eligible individual is
eligible to receive coverage for outpatient mental illness and
substance abuse treatment consisting of collateral services if
the individual is a family member (described in section
1011(b)) of an individual who is receiving inpatient and
residential mental illness and substance abuse treatment,
intensive nonresidential mental illness and substance abuse
treatment, or outpatient mental illness and substance abuse
treatment.
(c) Inpatient and Residential Treatment.--
(1) Definition.--For purposes of this subtitle, the term
``inpatient and residential mental illness and substance abuse
treatment'' means the items and services described in
paragraphs (1) through (3) of section 1861(b) of the Social
Security Act when provided with respect to a diagnosable mental
disorder or a diagnosable substance abuse disorder to--
(A) an inpatient of a hospital, psychiatric
hospital, residential treatment center, residential
detoxification center, crisis residential program, or
mental illness residential treatment program; or
(B) a resident of a therapeutic family or group
treatment home or community residential treatment and
recovery center for substance abuse.
The National Health Board shall specify those health
professional services described in section 1112 that shall be
treated as inpatient and residential mental illness and
substance abuse treatment when provided to such an inpatient or
resident.
(2) Limitations.--Coverage for inpatient and residential
mental illness and substance abuse treatment is subject to the
following limitations:
(A) Residential mental illness treatment.--Such
treatment, when provided with respect to a diagnosable
mental disorder in a setting that is not a hospital or
a psychiatric hospital, is covered only to avert the
need for, or as an alternative to, treatment in a
hospital or a psychiatric hospital, as determined by a
health professional designated by the health plan in
which the individual receiving such treatment is
enrolled.
(B) Residential substance abuse treatment.--Such
treatment, when provided with respect to a diagnosable
substance abuse disorder in a setting that is not a
hospital or a psychiatric hospital, is covered only if
a health professional designated by the health plan in
which the individual receiving such treatment is
enrolled determines (based on criteria that the plan
may choose to employ) that the individual should
receive such treatment.
(C) Least restrictive setting.--Such treatment is
covered only when--
(i) provided to an individual in the least
restrictive inpatient or residential setting
that is effective and appropriate for the
individual; and
(ii) less restrictive intensive
nonresidential or outpatient treatment would be
ineffective or inappropriate.
(D) Annual limit.--Prior to January 1, 2001, such
treatment is subject to an aggregate annual limit of 30
days. A maximum of 30 additional days of such treatment
shall be covered for an individual if a health
professional designated by the health plan in which the
individual is enrolled determines in advance that--
(i) the individual poses a threat to his or
her own life or the life of another individual;
or
(ii) the medical condition of the
individual requires inpatient treatment in a
hospital or a psychiatric hospital in order to
initiate, change, or adjust pharmacological or
somatic therapy.
(E) Inpatient hospital treatment for substance
abuse.--Such treatment, when provided in a hospital or
a psychiatric hospital with respect to a diagnosable
substance abuse disorder, is covered under this section
only for detoxification requiring the management of
psychiatric conditions associated with withdrawal from
alcohol or drugs. The items and services described in
this section do not include medical detoxification as
required for the management of medical conditions
associated with withdrawal from alcohol or drugs (which
is covered under section 1111).
(d) Intensive Nonresidential Treatment.--
(1) Definition.--For purposes of this subtitle, the term
``intensive nonresidential mental illness and substance abuse
treatment'' means diagnostic or therapeutic items or services
provided with respect to a diagnosable mental disorder or a
diagnosable substance abuse disorder to an individual--
(A) participating in a partial hospitalization
program, a day treatment program, a psychiatric
rehabilitation program, or an ambulatory detoxification
program; or
(B) receiving home-based mental illness services or
behavioral aide mental illness services.
The National Health Board shall specify those health
professional services described in section 1112 that shall be
treated as intensive nonresidential mental illness and
substance abuse treatment when provided to such an individual.
(2) Limitations.--Coverage for intensive nonresidential
mental illness and substance abuse treatment is subject to the
following limitations:
(A) Discretion of plan.--An individual shall
receive coverage for such treatment if a health
professional designated by the health plan in which the
individual is enrolled determines (based on criteria
that the plan may choose to employ) that the individual
should receive such treatment.
(B) Treatment purposes.--Such treatment is covered
only when provided--
(i) to avert the need for, or as an
alternative to, treatment in residential or
inpatient settings;
(ii) to facilitate the earlier discharge of
an individual receiving inpatient or
residential care;
(iii) to restore the functioning of an
individual with a diagnosable mental disorder
or a diagnosable substance abuse disorder; or
(iv) to assist such an individual to
develop the skills and gain access to the
support services the individual needs to
achieve the maximum level of functioning of the
individual within the community.
(C) Annual limit.--
(i) In general.--Prior to January 1, 2001,
the number of covered days of inpatient and
residential mental illness and substance abuse
treatment that are available to an individual
under the 30-day limit described in the first
sentence of subsection (c)(2)(D) shall be
reduced by 1 day for each 2 covered days of
intensive nonresidential mental illness and
substance abuse treatment that are provided to
the individual, until such number is reduced to
zero.
(ii) Additional days.--After the number of
covered days referred to in clause (i) has been
reduced to zero with respect to an individual,
the individual shall receive coverage for a
maximum of 60 days of intensive nonresidential
mental illness and substance abuse treatment if
a health professional designated by the health
plan in which the individual is enrolled
determines that the individual should receive
such treatment.
(D) Detoxification.--Intensive nonresidential
mental illness and substance abuse treatment consisting
of detoxification is covered only if it is provided in
the context of a treatment program.
(E) Out-of-pocket maximum.--Prior to January 1,
2001, expenses for intensive nonresidential mental
illness and substance abuse treatment that an
individual incurs prior to satisfying a deductible
applicable to such treatment, and copayments and
coinsurance paid by or on behalf of the individual for
such treatment, may not be applied toward any annual
out-of-pocket limit on cost sharing under any cost
sharing schedule described in part 3 of this subtitle
if such treatment is provided--
(i) with respect to a diagnosable substance
abuse disorder; or
(ii) pursuant to subparagraph (C)(ii).
(e) Outpatient Treatment.--
(1) Definition.--For purposes of this subtitle, the term
``outpatient mental illness and substance abuse treatment''
means the following services provided with respect to a
diagnosable mental disorder or a diagnosable substance abuse
disorder in an outpatient setting:
(A) Screening and assessment.
(B) Diagnosis.
(C) Medical management.
(D) Substance abuse counseling and relapse
prevention.
(E) Crisis services.
(F) Somatic treatment services.
(G) Psychotherapy.
(H) Case management.
(I) Collateral services.
(2) Limitations.--Coverage for outpatient mental illness
and substance abuse treatment is subject to the following
limitations:
(A) Health professional services.--Such treatment
is covered only when it constitutes health professional
services (as defined in section 1112(c)(2)).
(B) Discretion of plan.--An individual shall
receive coverage for outpatient mental illness and
substance abuse treatment consisting of substance abuse
counseling and relapse prevention if a health
professional designated by the health plan in which the
individual is enrolled determines (based on criteria
that the plan may choose to employ) that the individual
should receive such treatment. This subparagraph does
not apply to group therapy covered pursuant to
subparagraph (C)(ii)(II).
(C) Annual limits.--
(i) Psychotherapy and collateral
services.--Prior to January 1, 2001,
psychotherapy and collateral services are
subject to an aggregate annual limit of 30
visits per individual. Additional visits may be
covered, at the discretion of the health plan
in which the individual receiving treatment is
enrolled, to prevent hospitalization or to
facilitate earlier hospital release, for which
the number of covered days of inpatient and
residential mental illness and substance abuse
treatment that are available to an individual
under the 30-day limit described in the first
sentence of subsection (c)(2)(D) shall be
reduced by 1 day for each 4 visits. After such
number has been reduced to zero, no additional
visits under the preceding sentence may be
covered.
(ii) Substance abuse counseling and relapse
prevention.--
(I) In general.--Except as provided
in subclause (II), the number of
covered days of inpatient and
residential mental illness and
substance abuse treatment that are
available to an individual under the
30-day limit described in the first
sentence of subsection (c)(2)(D) shall
be reduced by 1 day for each 4 visits
for substance abuse counseling and
relapse prevention that are covered for
the individual under subparagraph (B).
After such number has been reduced to
zero, no visits for substance abuse
counseling and relapse prevention may
be covered, except as provided in
subclause (II).
(II) Group therapy.--Prior to
January 1, 2001, substance abuse
counseling and relapse prevention
consisting of group therapy is subject
to a separate aggregate annual limit of
30 visits, if such therapy occurs
within 12 months after the individual
has received, with respect to a
diagnosable substance abuse disorder,
inpatient and residential mental
illness and substance abuse treatment
or intensive nonresidential mental
illness and substance abuse treatment.
The provisions of clause (i) and
subclause (I) do not apply to therapy
that is described in the preceding
sentence.
(D) Detoxification.--Outpatient mental illness and
substance abuse treatment consisting of detoxification
is covered only if it is provided in the context of a
treatment program.
(E) Out-of-pocket maximum.--Prior to January 1,
2001, expenses for outpatient mental illness and
substance abuse treatment that an individual incurs
prior to satisfying a deductible applicable to such
treatment, and copayments and coinsurance paid by or on
behalf of the individual for such treatment, may not be
applied toward any annual out-of-pocket limit on cost
sharing under any cost sharing schedule described in
part 3 of this subtitle.
(f) Other Definitions.--For purposes of this subtitle:
(1) Case management.--The term ``case management'' means
services that assist individuals in gaining access to needed
medical, social, educational, and other services.
(2) Diagnosable mental disorder and diagnosable substance
abuse disorder.--The terms ``diagnosable mental disorder'' and
``diagnosable substance abuse disorder'' mean a disorder that--
(A) is listed in the Diagnostic and Statistical
Manual of Mental Disorders, Third Edition, Revised or a
revised version of such manual (except V Codes for
Conditions Not Attributable to a Mental Disorder That
Are a Focus of Attention or Treatment);
(B) is the equivalent of a disorder described in
subparagraph (A), but is listed in the International
Classification of Diseases, 9th Revision, Clinical
Modification, Third Edition or a revised version of
such text; or
(C) is listed in any authoritative text specifying
diagnostic criteria for mental disorders or substance
abuse disorders that is identified by the National
Health Board.
(3) Psychiatric hospital.--The term ``psychiatric
hospital'' has the meaning given such term in section 1861(f)
of the Social Security Act, except that such term shall
include--
(A) in the case of an item or service provided to
an individual whose applicable health plan is specified
pursuant to section 1004(b)(1), a facility of the
uniformed services under title 10, United States Code,
that is engaged in providing services to inpatients
that are equivalent to the services provided by a
psychiatric hospital;
(B) in the case of an item or service provided to
an individual whose applicable health plan is specified
pursuant to section 1004(b)(2), a facility operated by
the Department of Veterans Affairs that is engaged in
providing services to inpatients that are equivalent to
the services provided by a psychiatric hospital; and
(C) in the case of an item or service provided to
an individual whose applicable health plan is specified
pursuant to section 1004(b)(3), a facility operated by
the Indian Health Service that is engaged in providing
services to inpatients that are equivalent to the
services provided by a psychiatric hospital.
SEC. 1116. FAMILY PLANNING SERVICES AND SERVICES FOR PREGNANT WOMEN.
The services described in this section are the following items and
services:
(1) Voluntary family planning services.
(2) Contraceptive devices that--
(A) may only be dispensed upon prescription; and
(B) are subject to approval by the Secretary of
Health and Human Services under the Federal Food, Drug,
and Cosmetic Act.
(3) Services for pregnant women.
SEC. 1117. HOSPICE CARE.
The hospice care described in this section is the items and
services described in paragraph (1) of section 1861(dd) of the Social
Security Act, as defined in paragraphs (2), (3), and (4)(A) of such
section (with the exception of paragraph (2)(A)(iii)), except that all
references to the Secretary of Health and Human Services in such
paragraphs shall be treated as references to the National Health Board.
SEC. 1118. HOME HEALTH CARE.
(a) Coverage.--The home health care described in this section is--
(1) the items and services described in section 1861(m) of
the Social Security Act; and
(2) home infusion drug therapy services described in
section 1861(ll) of the Social Security Act (as inserted by
section 2005).
(b) Limitations.--Coverage for home health care is subject to the
following limitations:
(1) Inpatient treatment alternative.--Such care is covered
only as an alternative to inpatient treatment in a hospital,
skilled nursing facility, or rehabilitation facility after an
illness or injury.
(2) Reevaluation.--At the end of each 60-day period of home
health care, the need for continued care shall be reevaluated
by the person who is primarily responsible for providing the
home health care. Additional periods of care are covered only
if such person determines that the requirement in paragraph (1)
is satisfied.
SEC. 1119. EXTENDED CARE SERVICES.
(a) Coverage.--The extended care services described in this section
are the items and services described in section 1861(h) of the Social
Security Act when provided to an inpatient of a skilled nursing
facility or a rehabilitation facility.
(b) Limitations.--Coverage for extended care services is subject to
the following limitations:
(1) Hospital alternative.--Such services are covered only
as an alternative to inpatient treatment in a hospital after an
illness or injury.
(2) Annual limit.--Such services are subject to an
aggregate annual limit of 100 days.
(c) Definitions.--For purposes of this subtitle:
(1) Rehabilitation facility.--The term ``rehabilitation
facility'' means an institution (or a distinct part of an
institution) which is established and operated for the purpose
of providing diagnostic, therapeutic, and rehabilitation
services to individuals for rehabilitation from illness or
injury.
(2) Skilled nursing facility.--The term ``skilled nursing
facility'' means an institution (or a distinct part of an
institution) which is primarily engaged in providing to
residents--
(A) skilled nursing care and related services for
residents who require medical or nursing care; or
(B) rehabilitation services to residents for
rehabilitation from illness or injury.
SEC. 1120. AMBULANCE SERVICES.
(a) Coverage.--The ambulance services described in this section are
the following items and services:
(1) Ground transportation by ambulance.
(2) Air transportation by an aircraft equipped for
transporting an injured or sick individual.
(3) Water transportation by a vessel equipped for
transporting an injured or sick individual.
(b) Limitations.--Coverage for ambulance services is subject to the
following limitations:
(1) Medical indication.--Ambulance services are covered
only in cases in which the use of an ambulance is indicated by
the medical condition of the individual concerned.
(2) Air transport.--Air transportation is covered only in
cases in which there is no other method of transportation or
where the use of another method of transportation is contra-
indicated by the medical condition of the individual concerned.
(3) Water transport.--Water transportation is covered only
in cases in which there is no other method of transportation or
where the use of another method of transportation is contra-
indicated by the medical condition of the individual concerned.
SEC. 1121. OUTPATIENT LABORATORY, RADIOLOGY, AND DIAGNOSTIC SERVICES.
The items and services described in this section are laboratory,
radiology, and diagnostic services provided upon prescription to
individuals who are not inpatients of a hospital, hospice, skilled
nursing facility, or rehabilitation facility.
SEC. 1122. OUTPATIENT PRESCRIPTION DRUGS AND BIOLOGICALS.
(a) Coverage.--The items described in this section are the
following:
(1) Covered outpatient drugs described in section 1861(t)
of the Social Security Act (as amended by section 2001(b))--
(A) except that, for purposes of this section, a
medically accepted indication with respect to the use
of a covered outpatient drug includes any use which has
been approved by the Food and Drug Administration for
the drug, and includes another use of the drug if--
(i) the drug has been approved by the Food
and Drug Administration; and
(ii) such use is supported by one or more
citations which are included (or approved for
inclusion) in one or more of the following
compendia: the American Hospital Formulary
Service-Drug Information, the American Medical
Association Drug Evaluations, the United States
Pharmacopoeia-Drug Information, and other
authoritative compendia as identified by the
Secretary, unless the Secretary has determined
that the use is not medically appropriate or
the use is identified as not indicated in one
or more such compendia; or
(iii) such use is medically accepted based
on supportive clinical evidence in peer
reviewed medical literature appearing in
publications which have been identified for
purposes of this clause by the Secretary; and
(B) notwithstanding any exclusion from coverage
that may be made with respect to such a drug under
title XVIII of such Act pursuant to section 1862(a)(18)
of such Act.
(2) Blood clotting factors when provided on an outpatient
basis.
(b) Revision of Compendia List.--The Secretary may revise the list
of compendia in subsection (a)(1)(A)(ii) designated as appropriate for
identifying medically accepted indications for drugs.
(c) Blood Clotting Factors.--For purposes of this subtitle, the
term ``blood clotting factors'' has the meaning given such term in
section 1861(s)(2)(I) of the Social Security Act.
SEC. 1123. OUTPATIENT REHABILITATION SERVICES.
(a) Coverage.--The outpatient rehabilitation services described in
this section are--
(1) outpatient occupational therapy;
(2) outpatient physical therapy; and
(3) outpatient speech pathology services for the purpose of
attaining or restoring speech.
(b) Limitations.--Coverage for outpatient rehabilitation services
is subject to the following limitations:
(1) Restoration of capacity or minimization of
limitations.--Such services include only items or services used
to restore functional capacity or minimize limitations on
physical and cognitive functions as a result of an illness or
injury.
(2) Reevaluation.--At the end of each 60-day period of
outpatient rehabilitation services, the need for continued
services shall be reevaluated by the person who is primarily
responsible for providing the services. Additional periods of
services are covered only if such person determines that
functioning is improving.
SEC. 1124. DURABLE MEDICAL EQUIPMENT AND PROSTHETIC AND ORTHOTIC
DEVICES.
(a) Coverage.--The items and services described in this section
are--
(1) durable medical equipment, including accessories and
supplies necessary for repair, function, and maintenance of
such equipment;
(2) prosthetic devices (other than dental devices) which
replace all or part of the function of an internal body organ
(including colostomy bags and supplies directly related to
colostomy care), including replacement of such devices;
(3) accessories and supplies which are used directly with a
prosthetic device to achieve the therapeutic benefits of the
prosthesis or to assure the proper functioning of the device;
(4) leg, arm, back, and neck braces;
(5) artificial legs, arms, and eyes, including replacements
if required because of a change in the patient's physical
condition; and
(6) fitting and training for use of the items described in
paragraphs (1) through (5).
(b) Limitation.--An item or service described in this section is
covered only if it improves functional ability or prevents further
deterioration in function.
(c) Durable Medical Equipment.--For purposes of this subtitle, the
term ``durable medical equipment'' has the meaning given such term in
section 1861(n) of the Social Security Act.
SEC. 1125. VISION CARE.
(a) Coverage.--The vision care described in this section is routine
eye examinations, diagnosis, and treatment for defects in vision.
(b) Limitation.--Eyeglasses and contact lenses are covered only for
individuals less than 18 years of age, according to a periodicity
schedule established by the Board.
SEC. 1126. DENTAL CARE.
(a) Coverage.--The dental care described in this section is the
following:
(1) Emergency dental treatment, including simple
extractions, for acute infections, bleeding, and injuries to
natural teeth and oral structures for conditions requiring
immediate attention to prevent risks to life or significant
medical complications, as specified by the National Health
Board.
(2) Prevention and diagnosis of dental disease, including
oral dental examinations, radiographs, dental sealants,
fluoride application, and dental prophylaxis.
(3) Treatment of dental disease, including routine
fillings, prosthetics for genetic defects, periodontal
maintenance, and endodontic services.
(4) Space maintenance procedures to prevent orthodontic
complications.
(5) Interceptive orthodontic treatment to prevent severe
malocclusion.
(b) Limitations.--Coverage for dental care is subject to the
following limitations:
(1) Prevention and diagnosis.--Prior to January 1, 2001,
the items and services described in subsection (a)(2) are
covered only for individuals less than 18 years of age. On or
after such date, such items and services are covered for all
eligible individuals enrolled under a health plan, except that
dental sealants are not covered for individuals 18 years of age
or older.
(2) Treatment of dental disease.--Prior to January 1, 2001,
the items and services described in subsection (a)(3) are
covered only for individuals less than 18 years of age. On or
after such date, such items and services are covered for all
eligible individuals enrolled under a health plan, except that
endodontic services are not covered for individuals 18 years of
age or older.
(3) Space maintenance.--The items and services described in
subsection (a)(4) are covered only for individuals at least 3
years of age, but less than 13 years of age and--
(A) are limited to posterior teeth;
(B) involve maintenance of a space or spaces for
permanent posterior teeth that would otherwise be
prevented from normal eruption if the space were not
maintained; and
(C) do not include a space maintainer that is
placed within 6 months of the expected eruption of the
permanent posterior tooth concerned.
(4) Interceptive orthodontic treatment.--Prior to January
1, 2001, the items and services described in subsection (a)(5)
are not covered. On or after such date, such items and services
are covered only for individuals at least 6 years of age, but
less than 12 years of age.
SEC. 1127. HEALTH EDUCATION CLASSES.
(a) Coverage.--Subject to subsection (b), the items and services
described in this section are health education and training classes to
encourage the reduction of behavioral risk factors and to promote
healthy activities. Such education and training classes may include
smoking cessation, nutrition counseling, stress management, support
groups, and physical training classes.
(b) Discretion of Plan.--A health plan may offer education and
training classes at its discretion.
(c) Construction.--This section shall not be construed to include
or limit education or training that is provided in the course of the
delivery of health professional services (as defined in section
1112(c)).
SEC. 1128. INVESTIGATIONAL TREATMENTS.
(a) Coverage.--Subject to subsection (b), the items and services
described in this subsection are qualifying investigational treatments
that are administered for a life-threatening disease, disorder, or
other health condition (as defined by the National Health Board).
(b) Discretion of Plan.--A health plan may cover an investigational
treatment described in subsection (a) at its discretion.
(c) Routine Care During Investigational Treatments.--The
comprehensive benefit package includes an item or service described in
any other section of this part, subject to the limitations and cost
sharing requirements applicable to the item or service, when the item
or service is provided to an individual in the course of an
investigational treatment, if--
(1) the treatment is a qualifying investigational
treatment; and
(2) the item or service would have been provided to the
individual even if the individual were not receiving the
investigational treatment.
(d) Definitions.--For purposes of this subtitle:
(1) Qualifying investigational treatment.--The term
``qualifying investigational treatment'' means a treatment--
(A) the effectiveness of which has not been
determined; and
(B) that is under clinical investigation as part of
an approved research trial.
(2) Approved research trial.--The term ``approved research
trial'' means--
(A) a research trial approved by the Secretary of
Health and Human Services, the Director of the National
Institutes of Health, the Commissioner of the Food and
Drug Administration, the Secretary of Veterans Affairs,
the Secretary of Defense, or a qualified
nongovernmental research entity as defined in
guidelines of the National Institutes of Health; or
(B) a peer-reviewed and approved research program,
as defined by the Secretary of Health and Human
Services, conducted for the primary purpose of
determining whether or not a treatment is safe,
efficacious, or having any other characteristic of a
treatment which must be demonstrated in order for the
treatment to be medically necessary or appropriate.
PART 3--COST SHARING
SEC. 1131. COST SHARING.
(a) In General.--Each health plan shall offer to individuals
enrolled under the plan one, but not more than one, of the following
cost sharing schedules, which schedule shall be offered to all such
enrollees:
(1) Lower cost sharing (described in section 1132).
(2) Higher cost sharing (described in section 1133).
(3) Combination cost sharing (described in section 1134).
(b) Cost Sharing for Low-Income Families.--For provisions relating
to reducing cost sharing for certain low-income families, see section
1371.
(c) Deductibles, Cost Sharing, and Out-of-Pocket Limits on Cost
Sharing.--
(1) Application on an annual basis.--The deductibles and
out-of-pocket limits on cost sharing for a year under the
schedules referred to in subsection (a) shall be applied based
upon expenses incurred for items and services furnished in the
year.
(2) Individual and family general deductibles.--
(A) Individual.--Subject to subparagraph (B), with
respect to an individual enrolled under a health plan
(regardless of the class of enrollment), any individual
general deductible in the cost sharing schedule offered
by the plan represents the amount of countable expenses
(as defined in subparagraph (C)) that the individual
may be required to incur in a year before the plan
incurs liability for expenses for such items and
services furnished to the individual.
(B) Family.--In the case of an individual enrolled
under a health plan under a family class of enrollment
(as defined in section 1011(c)(2)(A)), the individual
general deductible under subparagraph (A) shall not
apply to countable expenses incurred by any member of
the individual's family in a year at such time as the
family has incurred, in the aggregate, countable
expenses in the amount of the family general deductible
for the year.
(C) Countable expense.--In this paragraph, the term
``countable expense'' means, with respect to an
individual for a year, an expense for an item or
service covered by the comprehensive benefit package
that is subject to the general deductible and for
which, but for such deductible and any other cost
sharing under this subtitle, a health plan is liable
for payment. The amount of countable expenses for an
individual for a year under this paragraph shall not
exceed the individual general deductible for the year.
(3) Coinsurance and copayments.--After a general or
separate deductible that applies to an item or service covered
by the comprehensive benefit package has been satisfied for a
year, subject to paragraph (4), coinsurance and copayments are
amounts (expressed as a percentage of an amount otherwise
payable or as a dollar amount, respectively) that an individual
may be required to pay with respect to the item or service.
(4) Individual and family limits on cost sharing.--
(A) Individual.--Subject to subparagraph (B), with
respect to an individual enrolled under a health plan
(regardless of the class of enrollment), the individual
out-of-pocket limit on cost sharing in the cost sharing
schedule offered by the plan represents the amount of
expenses that the individual may be required to incur
under the plan in a year because of a general
deductible, separate deductibles, copayments, and
coinsurance before the plan may no longer impose any
cost sharing with respect to items or services covered
by the comprehensive benefit package that are provided
to the individual, except as provided in subsections
(d)(2)(E) and (e)(2)(E) of section 1115.
(B) Family.--In the case of an individual enrolled
under a health plan under a family class of enrollment
(as defined in section 1011(c)(2)(A)), the family out-
of-pocket limit on cost sharing in the cost sharing
schedule offered by the plan represents the amount of
expenses that members of the individual's family, in
the aggregate, may be required to incur under the plan
in a year because of a general deductible, separate
deductibles, copayments, and coinsurance before the
plan may no longer impose any cost sharing with respect
to items or services covered by the comprehensive
benefit package that are provided to any member of the
individual's family, except as provided in subsections
(d)(2)(E) and (e)(2)(E) of section 1115.
SEC. 1132. LOWER COST SHARING.
(a) In General.--The lower cost sharing schedule referred to in
section 1131 that is offered by a health plan--
(1) may not include a deductible;
(2) shall have--
(A) an annual individual out-of-pocket limit on
cost sharing of $1500; and
(B) an annual family out-of-pocket limit on cost
sharing of $3000;
(3) except as provided in paragraph (4)--
(A) shall prohibit payment of any coinsurance; and
(B) subject to section 1152, shall require payment
of the copayment for an item or service (if any) that
is specified for the item or service in the table under
section 1135; and
(4) shall require payment of coinsurance for an out-of-
network item or service (as defined in section 1402(f)) in an
amount that is a percentage (determined under subsection (b))
of the applicable payment rate for the item or service
established under section 1322(c), but only if the item or
service is subject to coinsurance under the higher cost sharing
schedule described in section 1133.
(b) Out-of-Network Coinsurance Percentage.--
(1) In general.--The National Health Board shall determine
a percentage referred to in subsection (a)(4). The percentage--
(A) may not be less than 20 percent; and
(B) shall be the same with respect to all out-of-
network items and services that are subject to
coinsurance, except as provided in paragraph (2).
(2) Exception.--The National Health Board may provide for a
percentage that is greater than a percentage determined under
paragraph (1) in the case of an out-of-network item or service
for which, under the higher cost sharing schedule described in
section 1133, the coinsurance is greater than 20 percent of the
applicable payment rate.
SEC. 1133. HIGHER COST SHARING.
(a) In General.--The higher cost sharing schedule referred to in
section 1131 that is offered by a health plan--
(1) shall have an annual individual general deductible of
$200 and an annual family general deductible of $400 that apply
with respect to expenses incurred for all items and services in
the comprehensive benefit package except--
(A) an item or service with respect to which a
separate individual deductible applies under paragraph
(2), (3), or (4); or
(B) an item or service described in paragraph (5),
(6), or (7) with respect to which a deductible does not
apply;
(2) shall require an individual to incur expenses during
each episode of inpatient and residential mental illness and
substance abuse treatment (described in section 1115(c)) equal
to the cost of one day of such treatment before the plan
provides benefits for such treatment to the individual;
(3) shall require an individual to incur expenses during
each episode of intensive nonresidential mental illness and
substance abuse treatment (described in section 1115(d)) equal
to the cost of one day of such treatment before the plan
provides benefits for such treatment to the individual;
(4) shall require an individual to incur expenses in a year
for outpatient prescription drugs and biologicals (described in
section 1122) equal to $250 before the plan provides benefits
for such items to the individual;
(5) shall require an individual to incur expenses in a year
for dental care described in section 1126, except the items and
services for prevention and diagnosis of dental disease
described in section 1126(a)(2), equal to $50 before the plan
provides benefits for such care to the individual;
(6) may not require any deductible for clinical preventive
services (described in section 1114);
(7) may not require any deductible for clinician visits and
associated services related to prenatal care or 1 post-partum
visit under section 1116;
(8) may not require any deductible for the items and
services for prevention and diagnosis of dental disease
described in section 1126(a)(2);
(9) shall have--
(A) an annual individual out-of-pocket limit on
cost sharing of $1500; and
(B) an annual family out-of-pocket limit on cost
sharing of $3000;
(10) shall prohibit payment of any copayment; and
(11) subject to section 1152, shall require payment of the
coinsurance for an item or service (if any) that is specified
for the item or service in the table under section 1135.
(b) Episodes of Treatment.--
(1) Inpatient and residential treatment.--For purposes of
subsection (a)(2), an episode of inpatient and residential
mental illness and substance abuse treatment shall be
considered to begin on the date an individual is admitted to a
facility for such treatment and to end on the date the
individual is discharged from the facility.
(2) Intensive nonresidential treatment.--For purposes of
subsection (a)(3), an episode of intensive nonresidential
mental illness and substance abuse treatment--
(A) shall be considered to begin on the date an
individual begins participating in a program described
in section 1115(d)(1)(A) and to end on the date the
individual ceases such participation; or
(B) shall be considered to begin on the date an
individual begins receiving home-based or behavioral
aide services described in section 1115(d)(1)(B) and to
end on the date the individual ceases to receive such
services.
SEC. 1134. COMBINATION COST SHARING.
(a) In General.--The combination cost sharing schedule referred to
in section 1131 that is offered by a health plan--
(1) shall have--
(A) an annual individual out-of-pocket limit on
cost sharing of $1500; and
(B) an annual family out-of-pocket limit on cost
sharing of $3000; and
(2) otherwise shall require different cost sharing for in-
network items and services than for out-of-network items and
services.
(b) In-Network Items and Services.--With respect to an in-network
item or service (as defined in section 1402(f)(1)), the combination
cost sharing schedule that is offered by a health plan--
(1) may not apply a deductible;
(2) shall prohibit payment of any coinsurance; and
(3) shall require payment of a copayment in accordance with
the lower cost sharing schedule described in section 1132.
(c) Out-of-Network Items and Services.--With respect to an out-of-
network item or service (as defined in section 1402(f)(2)), the
combination cost sharing schedule that is offered by a health plan--
(1) shall require an individual and a family to incur
expenses before the plan provides benefits for the item or
service in accordance with the deductibles under the higher
cost sharing schedule described in section 1133;
(2) shall prohibit payment of any copayment; and
(3) shall require payment of coinsurance in accordance with
such schedule.
SEC. 1135. TABLE OF COPAYMENTS AND COINSURANCE.
(a) In General.--The following table specifies, for different items
and services, the copayments and coinsurance referred to in sections
1132 and 1133:
Copayments and Coinsurance for Items and Services
----------------------------------------------------------------------------------------------------------------
Benefit Section Lower Cost Sharing Schedule Higher Cost Sharing Schedule
----------------------------------------------------------------------------------------------------------------
Inpatient hospital services...... 1111 No copayment 20 percent of applicable payment
rate
----------------------------------------------------------------------------------------------------------------
Outpatient hospital services..... 1111 $10 per visit 20 percent of applicable payment
rate
----------------------------------------------------------------------------------------------------------------
Hospital emergency room services. 1111 $25 per visit (unless patient has 20 percent of applicable payment
an emergency medical condition rate
as defined in section 1867(e)(1)
of the Social Security Act)
----------------------------------------------------------------------------------------------------------------
Services of health professionals. 1112 $10 per visit 20 percent of applicable payment
rate
----------------------------------------------------------------------------------------------------------------
Emergency services other than $25 per visit (unless patient has 20 percent of applicable payment
hospital emergency room services 1113 an emergency medical condition rate
as defined in section 1867(e)(1)
of the Social Security Act)
----------------------------------------------------------------------------------------------------------------
Ambulatory medical and surgical $10 per visit 20 percent of applicable payment
services........................ 1113 rate
----------------------------------------------------------------------------------------------------------------
Clinical preventive services..... 1114 No copayment No coinsurance
----------------------------------------------------------------------------------------------------------------
Inpatient and residential mental No copayment 20 percent of applicable payment
illness and substance abuse rate
treatment....................... 1115
----------------------------------------------------------------------------------------------------------------
Intensive nonresidential mental No copayment 20 percent of applicable payment
illness and substance abuse rate
treatment (except treatment
provided pursuant to section
1115(d)(2)(C)(ii)).............. 1115
----------------------------------------------------------------------------------------------------------------
Intensive nonresidential mental $25 per visit 50 percent of applicable payment
illness and substance abuse rate
treatment provided pursuant to
section 1115(d)(2)(C)(ii)....... 1115
----------------------------------------------------------------------------------------------------------------
Outpatient mental illness and $10 per visit 20 percent of applicable payment
substance abuse treatment rate
(except psychotherapy,
collateral services, and case
management)..................... 1115
----------------------------------------------------------------------------------------------------------------
Outpatient psychotherapy and $25 per visit until January 1, 50 percent of applicable payment
collateral services............. 1115 2001, and $10 per visit rate until January 1, 2001, and
thereafter 20 percent thereafter
----------------------------------------------------------------------------------------------------------------
Case management.................. 1115 No copayment No coinsurance
----------------------------------------------------------------------------------------------------------------
Family planning and services for $10 per visit 20 percent of applicable payment
pregnant women (except clinician rate
visits and associated services
related to prenatal care and 1
post-partum visit).............. 1116
----------------------------------------------------------------------------------------------------------------
Clinician visits and associated No copayment No coinsurance
services related to prenatal
care and 1 post-partum visit.... 1116
----------------------------------------------------------------------------------------------------------------
Hospice care..................... 1117 No copayment 20 percent of applicable payment
rate
----------------------------------------------------------------------------------------------------------------
Home health care................. 1118 No copayment 20 percent of applicable payment
rate
----------------------------------------------------------------------------------------------------------------
Extended care services........... 1119 No copayment 20 percent of applicable payment
rate
----------------------------------------------------------------------------------------------------------------
Ambulance services............... 1120 No copayment 20 percent of applicable payment
rate
----------------------------------------------------------------------------------------------------------------
Outpatient laboratory, radiology, No copayment 20 percent of applicable payment
and diagnostic services......... 1121 rate
----------------------------------------------------------------------------------------------------------------
Outpatient prescription drugs and $5 per prescription 20 percent of applicable payment
biologicals..................... 1122 rate
----------------------------------------------------------------------------------------------------------------
Outpatient rehabilitation $10 per visit 20 percent of applicable payment
services........................ 1123 rate
----------------------------------------------------------------------------------------------------------------
Durable medical equipment and No copayment 20 percent of applicable payment
prosthetic and orthotic devices. 1124 rate
----------------------------------------------------------------------------------------------------------------
Vision care...................... 1125 $10 per visit (No additional 20 percent of applicable payment
charge for 1 set of necessary rate
eyeglasses for an individual
less than 18 years of age)
----------------------------------------------------------------------------------------------------------------
Dental care (except space $10 per visit 20 percent of applicable payment
maintenance procedures and rate
interceptive orthodontic
treatment)...................... 1126
----------------------------------------------------------------------------------------------------------------
Space maintenance procedures and $20 per visit 40 percent of applicable payment
interceptive orthodontic rate
treatment....................... 1126
----------------------------------------------------------------------------------------------------------------
Health education classes......... 1127 All cost sharing rules determined All cost sharing rules determined
by plans by plans
----------------------------------------------------------------------------------------------------------------
Investigational treatment for All cost sharing rules determined All cost sharing rules determined
life-threatening condition...... 1128 by plans by plans
----------------------------------------------------------------------------------------------------------------
(b) Applicable Payment Rate.--For purposes of this section, the
term ``applicable payment rate'', when used with respect to an item or
service, means the applicable payment rate for the item or service
established under section 1322(c).
SEC. 1136. INDEXING DOLLAR AMOUNTS RELATING TO COST SHARING.
(a) In General.--Any deductible, copayment, out-of-pocket limit on
cost sharing, or other amount expressed in dollars in this subtitle for
items or services provided in a year after 1994 shall be such amount
increased by the percentage specified in subsection (b) for the year.
(b) Percentage.--The percentage specified in this subsection for a
year is equal to the product of the factors described in subsection (d)
for the year and for each previous year after 1994, minus 1.
(c) Rounding.--Any increase (or decrease) under subsection (a)
shall be rounded, in the case of an amount specified in this subtitle
of--
(1) $200 or less, to the nearest multiple of $1,
(2) more than $200, but less than $500, to the nearest
multiple of $5, or
(3) $500 or more, to the nearest multiple of $10.
(d) Factor.--
(1) In general.--The factor described in this subsection
for a year is 1 plus the general health care inflation factor
(as specified in section 6001(a)(3) and determined under
paragraph (2)) for the year.
(2) Determination.--In computing such factor for a year,
the percentage increase in the CPI for a year (referred to in
section 6001(b)) shall be determined based upon the percentage
increase in the average of the CPI for the 12-month period
ending with August 31 of the previous year over such average
for the preceding 12-month period.
PART 4--EXCLUSIONS
SEC. 1141. EXCLUSIONS.
(a) Medical Necessity.--The comprehensive benefit package does not
include--
(1) an item or service that is not medically necessary or
appropriate; or
(2) an item or service that the National Health Board may
determine is not medically necessary or appropriate in a
regulation promulgated under section 1154.
(b) Additional Exclusions.--The comprehensive benefit package does
not include the following items and services:
(1) Custodial care, except in the case of hospice care
under section 1117.
(2) Surgery and other procedures performed solely for
cosmetic purposes and hospital or other services incident
thereto, unless--
(A) required to correct a congenital anomaly; or
(B) required to restore or correct a part of the
body that has been altered as a result of--
(i) accidental injury;
(ii) disease; or
(iii) surgery that is otherwise covered
under this subtitle.
(3) Hearing aids.
(4) Eyeglasses and contact lenses for individuals at least
18 years of age.
(5) In vitro fertilization services.
(6) Sex change surgery and related services.
(7) Private duty nursing.
(8) Personal comfort items, except in the case of hospice
care under section 1117.
(9) Any dental procedures involving orthodontic care,
inlays, gold or platinum fillings, bridges, crowns, pin/post
retention, dental implants, surgical periodontal procedures, or
the preparation of the mouth for the fitting or continued use
of dentures, except as specifically described in section 1126.
PART 5--ROLE OF THE NATIONAL HEALTH BOARD
SEC. 1151. DEFINITION OF BENEFITS.
(a) In General.--The National Health Board may promulgate such
regulations or establish such guidelines as may be necessary to assure
uniformity in the application of the comprehensive benefit package
across all health plans.
(b) Flexibility in Delivery.--The regulations or guidelines under
subsection (a) shall permit a health plan to deliver covered items and
services to individuals enrolled under the plan using the providers and
methods that the plan determines to be appropriate.
SEC. 1152. ACCELERATION OF EXPANDED BENEFITS.
(a) In General.--Subject to subsection (b), at any time prior to
January 1, 2001, the National Health Board, in its discretion, may by
regulation expand the comprehensive benefit package by--
(1) adding any item or service that is added to the package
as of January 1, 2001; and
(2) requiring that a cost sharing schedule described in
part 3 of this subtitle reflect (wholly or in part) any of the
cost sharing requirements that apply to the schedule as of
January 1, 2001.
No such expansion shall be effective except as of January 1 of a year.
(b) Condition.--The Board may not expand the benefit package under
subsection (a) which is to become effective with respect to a year, by
adding any item or service or altering any cost sharing schedule,
unless the Board estimates that the additional increase in per capita
health care expenditures resulting from the addition or alteration, for
each regional alliance for the year, will not cause any regional
alliance to exceed its per capita target (as determined under section
6003).
SEC. 1153. AUTHORITY WITH RESPECT TO CLINICAL PREVENTIVE SERVICES.
(a) In General.--With respect to clinical preventive services
described in section 1114, the National Health Board--
(1) shall specify and define specific items and services as
clinical preventive services for high risk populations and
shall establish and update a periodicity schedule for such
items and services;
(2) shall update the periodicity schedules for the age-
appropriate immunizations, tests, and clinician visits
specified in subsections (b) through (h) of such section;
(3) shall establish rules with respect to coverage for an
immunization, test, or clinician visit that is not provided to
an individual during the age range for such immunization, test,
or clinician visit that is specified in one of subsections (b)
through (h) of such section; and
(4) may otherwise modify the items and services described
in such section, taking into account age and other risk
factors, but may not modify the cost sharing for any such item
or service.
(b) Consultation.--In performing the functions described in
subsection (a), the National Health Board shall consult with experts in
clinical preventive services.
SEC. 1154. ESTABLISHMENT OF STANDARDS REGARDING MEDICAL NECESSITY.
The National Health Board may promulgate such regulations as may be
necessary to carry out section 1141(a)(2) (relating to the exclusion of
certain services that are not medically necessary or appropriate).
PART 6--ADDITIONAL PROVISIONS RELATING TO HEALTH CARE PROVIDERS
SEC. 1161. OVERRIDE OF RESTRICTIVE STATE PRACTICE LAWS.
No State may, through licensure or otherwise, restrict the practice
of any class of health professionals beyond what is justified by the
skills and training of such professionals.
SEC. 1162. PROVISION OF ITEMS OR SERVICES CONTRARY TO RELIGIOUS BELIEF
OR MORAL CONVICTION.
A health professional or a health facility may not be required to
provide an item or service in the comprehensive benefit package if the
professional or facility objects to doing so on the basis of a
religious belief or moral conviction.
Title I, Subtitle C
Subtitle C--State Responsibilities
SEC. 1200. PARTICIPATING STATE.
(a) In General.--For purposes of the approval of a State health
care system by the Board under section 1511, a State is a
``participating State'' if the State meets the applicable requirements
of this subtitle.
(b) Submission of System Document.--
(1) In general.--In order to be approved as a participating
State under section 1511, a State shall submit to the National
Health Board a document (in a form and manner specified by the
Board) that describes the State health care system that the
State is establishing (or has established).
(2) Deadline.--If a State is not a participating State with
a State health care system in operation by January 1, 1998, the
provisions of subpart C of part 1 of subtitle F (relating to
responsibilities in absence of State systems) shall take
effect.
(3) Submission of information subsequent to approval.--A
State approved as a participating State under section 1511
shall submit to the Board an annual update to the State health
care system not later than February 15 of each year following
the first year for which the State is a participating State.
The update shall contain--
(A) such information as the Board may require to
determine that the system shall meet the applicable
requirements of this Act for the succeeding year; and
(B) such information as the Board may require to
determine that the State operated the system during the
previous year in accordance with the Board's approval
of the system for such previous year.
PART 1--GENERAL STATE RESPONSIBILITIES
SEC. 1201. GENERAL STATE RESPONSIBILITIES.
The responsibilities for a participating State are as follows:
(1) Regional alliances.--Establishing one or more regional
alliances (in accordance with section 1202).
(2) Health plans.--Certifying health plans (in accordance
with section 1203).
(3) Financial solvency of plans.--Assuring the financial
solvency of health plans (in accordance with section 1204).
(4) Administration.--Designating an agency or official
charged with coordinating the State responsibilities under this
Act.
(5) Workers compensation and automobile insurance.--
Conforming State laws to meet the requirements of subtitles A
and B of title X (relating to medical benefits under workers
compensation and automobile insurance).
(6) Other responsibilities.--Carrying out other
responsibilities of participating States specified under this
Act.
SEC. 1202. STATE RESPONSIBILITIES WITH RESPECT TO ALLIANCES.
(a) Establishment of Alliances.--
(1) In general.--A participating State shall--
(A) establish and maintain one or more regional
alliances in accordance with this section and subtitle
D, and ensure that such alliances meet the requirements
of this Act; and
(B) designate alliance areas in accordance with
subsection (b).
(2) Deadline.--A State may not be a participating State for
a year unless the State has established such alliances by March
1 of the previous year.
(b) Alliance Areas.--
(1) In general.--In accordance with this subsection, each
State shall designate a geographic area assigned to each
regional alliance. Each such area is referred to in this Act as
an ``alliance area''.
(2) Population required.--
(A) In general.--Each alliance area shall encompass
a population large enough to ensure that the alliance
has adequate market share to negotiate effectively with
health plans providing the comprehensive benefit
package to eligible individuals who reside in the area.
(B) Treatment of consolidated metropolitan
statistical areas.--An alliance area that includes a
Consolidated Metropolitan Statistical Area within a
State is presumed to meet the requirement of
subparagraph (A).
(3) Single alliance in each area.--No geographic area may
be assigned to more than one regional alliance.
(4) Boundaries.--In establishing boundaries for alliance
areas, the State may not discriminate on the basis of or
otherwise take into account race, age, language, religion,
national origin, socio-economic status, disability, or
perceived health status.
(5) Treatment of metropolitan areas.--The entire portion of
a metropolitan statistical area located in a State shall be
included in the same alliance area.
(6) No portions of State permitted to be outside alliance
area.--Each portion of the State shall be assigned to a
regional alliance under this subsection.
(c) State Coordination of Regional Alliances.--One or more States
may allow or require two or more regional alliances to coordinate their
operations, whether such alliances are in the same or different States.
Such coordination may include adoption of joint operating rules,
contracting with health plans, enforcement activities, and
establishment of fee schedules for health providers.
(d) Assistance in Collection of Amounts Owed to Alliances.--Each
State shall assure that the amounts owed to regional alliances in the
State are collected and paid to such alliances.
(e) Assistance in Eligibility Verifications.--
(1) In general.--Each State shall assure that the
determinations of eligibility for cost sharing assistance (and
premium discounts and cost sharing reductions for families) are
made by regional alliances in the State on the basis of the
best information available to the alliances and the State.
(2) Provision of information.--Each State shall use the
information available to the State under section
6103(l)(7)(D)(x) of the Internal Revenue Code of 1986 to assist
regional alliances in verifying such eligibility status.
(f) Special Requirements for Alliances With Single-Payer System.--
If the State operates an alliance-specific single-payer system (as
described in part 2), the State shall assure that the regional alliance
in which the system is operated meets the requirements for such an
alliance described in section 1224(b).
(g) Payment of Shortfalls for Certain Administrative Errors.--Each
participating State is financially responsible, under section
9201(c)(2), for administrative errors described in section 9201(e)(2).
SEC. 1203. STATE RESPONSIBILITIES RELATING TO HEALTH PLANS.
(a) Criteria for Certification.--
(1) In general.--For purposes of this section, a
participating State shall establish and publish the criteria
that are used in the certification of health plans under this
section.
(2) Requirements.--Such criteria shall be established with
respect to--
(A) the quality of the plan,
(B) the financial stability of the plan,
(C) the plan's capacity to deliver the
comprehensive benefit package in the designated service
area,
(D) other applicable requirements for health plans
under parts 1, 3, and 4 of subtitle E, and
(E) other requirements imposed by the State
consistent with this part.
(b) Certification of Health Plans.--A participating State shall
certify each plan as a regional alliance health plan that it determines
meets the criteria for certification established and published under
subsection (a).
(c) Monitoring.--A participating State shall monitor the
performance of each State-certified regional alliance health plan to
ensure that it continues to meet the criteria for certification.
(d) Limitations on Authority.--A participating State may not--
(1) discriminate against a plan based on the domicile of
the entity offering of the plan; and
(2) regulate premium rates charged by health plans, except
as may be required under title VI (relating to the enforcement
of cost containment rules for plans in the State) or as may be
necessary to ensure that plans meet financial solvency
requirements under section 1408.
(e) Assuring Adequate Access to a Choice of Health Plans.--
(1) General access.--
(A) In general.--Each participating State shall
ensure that--
(i) each regional alliance eligible family
has adequate access to enroll in a choice of
regional alliance health plans providing
services in the area in which the individual
resides, including (to the maximum extent
practicable) adequate access to a plan whose
premium is at or below the weighted average
premium for plans in the regional alliance, and
(ii) each such family that is eligible for
a premium discount under section 6104(b) is
provided a discount in accordance with such
section (including an increase in such discount
described in section 6104(b)(2)).
(B) Authority.--In order to carry out its
responsibility under subparagraph (A), a participating
State may require, as a condition of entering into a
contract with a regional alliance under section 1321,
that one or more certified regional alliance health
plans cover all (or selected portions) of the alliance
area.
(2) Access to plans using centers of excellence.--Each
participating State may require, as a condition of entering
into a contract with a regional alliance under section 1321,
that one or more certified health plans provide access (through
reimbursement, contracts, or otherwise) of enrolled individuals
to services of centers of excellence (as designated by the
State in accordance with rules promulgated by the Secretary).
(3) Use of incentives to enroll and serve disadvantaged
groups.--A State may provide--
(A) for an adjustment to the risk-adjustment
methodology under section 1541(b) and other financial
incentives to regional alliance health plans to ensure
that such plans enroll individuals who are members of
disadvantaged groups, and
(B) for appropriate extra services, such as
outreach to encourage enrollment and transportation and
interpreting services to ensure access to care, for
certain population groups that face barriers to access
because of geographic location, income levels, or
racial or cultural differences.
(f) Coordination of Workers' Compensation Services and Automobile
Insurance.--Each participating State shall comply with the
responsibilities regarding workers' compensation and automobile
insurance specified in subtitles A and B of title X.
(g) Implementation of Mandatory Reinsurance System.--If the risk
adjustment and reinsurance methodology developed under section 1541
includes a mandatory reinsurance system, each participating State shall
establish a reinsurance program consistent with such methodology and
any additional standards established by the Board.
(h) Requirements for Plans Offering Supplemental Insurance.--
Notwithstanding any other provision of this Act a State may not certify
a regional alliance health plan under this section if--
(1) the plan (or any entity with which the plan is
affiliated under such rules as the Board may establish) offers
a supplemental health benefit policy (as defined in section
1421(b)(1)) that fails to meet the applicable requirements for
such a policy under part 2 of subtitle E (without regard to the
State in which the policy is offered); or
(2) the plan offers a cost sharing policy (as defined in
section 1421(b)(2)) that fails to meet the applicable
requirements for such a policy under part 2 of subtitle E.
SEC. 1204. FINANCIAL SOLVENCY; FISCAL OVERSIGHT; GUARANTY FUND.
(a) Capital Standards.--A participating State shall establish
capital standards for health plans that meet minimum Federal
requirements established by the National Health Board under sections
1503(i) and 1551(a).
(b) Reporting and Auditing Requirements.--Each participating State
shall define financial reporting and auditing requirements and
requirements for fund reserves adequate to monitor the financial status
of plans.
(c) Guaranty Fund.--
(1) Establishment.--Each participating State shall ensure
that there is a guaranty fund that meets the requirements
established by the Board under sections 1503(i) and 1552, in
order to provide financial protection to health care providers
and others in the case of a failure of a regional alliance
health plan.
(2) Assessments to provide funds.--In the case of a failure
of one or more regional alliance health plans, the State may
require each regional alliance health plan within the State to
pay an assessment to the State in an amount not to exceed 2
percent of the premiums of such plans paid by or on behalf of
regional alliance eligible individuals during a year for so
long as necessary to generate sufficient revenue to cover any
outstanding claims against the failed plan.
(d) Procedures in Event of Plan Failure.--
(1) In general.--A participating State shall assure that,
in the event of the failure of a regional alliance health plan
in the State, eligible individuals enrolled in the plan will be
assured continuity of coverage for the comprehensive benefit
package.
(2) Designation of state agency.--A participating State
shall designate an agency of State government that supervises
or assumes control of the operation of a regional alliance
health plan in the case of the failure of the plan.
(3) Protections for health care providers and enrollees.--
Each participating State shall assure that in the case of a
plan failure--
(A) the guaranty fund shall pay health care
providers for items and services covered under the
comprehensive benefit package for enrollees of the plan
for which the plan is otherwise obligated to make
payment;
(B) after making all payments required to be made
to providers under subparagraph (A), the guaranty fund
shall make payments for the operational,
administrative, and other costs and debts of the plan
(in accordance with requirements imposed by the State
based on rules promulgated by the Board);
(C) such health care providers have no legal right
to seek payment from eligible individuals enrolled in
the plan for any such covered items or services (other
than the enrollees' obligations under cost sharing
arrangements); and
(D) health care providers are required to continue
caring for such eligible individuals until such
individuals are enrolled in a new health plan.
(4) Plan failure.--For purposes of this section, the
failure of a health plan means the current or imminent
inability of the plan to pay claims.
SEC. 1205. RESTRICTIONS ON FUNDING OF ADDITIONAL BENEFITS.
If a participating State provides benefits (either directly or
through regional alliance health plans or otherwise) in addition to
those covered under the comprehensive benefit package, the State may
not provide for payment for such benefits through funds provided under
this Act.
PART 2--REQUIREMENTS FOR STATE SINGLE-PAYER SYSTEMS
SEC. 1221. SINGLE-PAYER SYSTEM DESCRIBED.
The Board shall approve the application of a State to operate a
single-payer system if the Board finds that the system--
(1) meets the requirements of section 1222;
(2)(A) meets the requirements for a Statewide single-payer
system under section 1223, in the case of a system offered
throughout a State; or
(B) meets the requirements for an alliance-specific single-
payer system under section 1224, in the case of a system
offered in a single alliance of a State.
SEC. 1222. GENERAL REQUIREMENTS FOR SINGLE-PAYER SYSTEMS.
Each single-payer system shall meet the following requirements:
(1) Establishment by state.--The system is established
under State law, and State law provides for mechanisms to
enforce the requirements of the system.
(2) Operation by state.--The system is operated by the
State or a designated agency of the State.
(3) Enrollment of eligible individuals.--
(A) Mandatory enrollment of all regional alliance
individuals.--The system provides for the enrollment of
all eligible individuals residing in the State (or, in
the case of an alliance-specific single-payer system,
in the alliance area) for whom the applicable health
plan would otherwise be a regional alliance health
plan.
(B) Optional enrollment of medicare-eligible
individuals.--At the option of the State, the system
may provide for the enrollment of medicare-individuals
residing in the State (or, in the case of an alliance-
specific single-payer system, in the alliance area) if
the Secretary of Health and Human Services has approved
an application submitted by the State under section
1893 of the Social Security Act (as added by section
4001(a)) for the integration of medicare beneficiaries
into plans of the State. Nothing in this subparagraph
shall be construed as requiring that a State have a
single-payer system in order to provide for such
integration.
(C) Optional enrollment of corporate alliance
individuals in statewide plans.--At the option of the
State, a Statewide single-payer system may provide for
the enrollment of individuals residing in the State who
are otherwise eligible to enroll in a corporate
alliance health plan under section 1311.
(D) Options included in state system document.--A
State may not exercise any of the options described in
subparagraphs (A) or (B) for a year unless the State
included a description of the option in the submission
of its system document to the Board for the year under
section 1200(b).
(E) Exclusion of certain individuals.--A single-
payer system may not require the enrollment of electing
veterans, active duty military personnel, and electing
Indians (as defined in 1012(d)).
(4) Direct payment to providers.--
(A) In general.--With respect to providers who
furnish items and services included in the
comprehensive benefit package to individuals enrolled
in the system, the State shall make payments directly
to such providers and assume (subject to subparagraph
(B)) all financial risk associated with making such
payments.
(B) Capitated payments permitted.--Nothing in
subparagraph (A) shall be construed to prohibit
providers furnishing items and services under the
system from receiving payments from the plan on a
capitated, at-risk basis based on prospectively
determined rates.
(5) Provision of comprehensive benefit package.--
(A) In general.--The system shall provide for
coverage of the comprehensive benefit package,
including the cost sharing provided under the package
(subject to subparagraph (B)), to all individuals
enrolled in the system.
(B) Imposition of reduced cost sharing.--The system
may decrease the cost sharing otherwise provided in the
comprehensive benefit package with respect to any class
of individuals enrolled in the system or any class of
services included in the package, so long as the system
does not increase the cost sharing otherwise imposed
with respect to any other class of individuals or
services.
(6) Cost containment.--The system shall provide for
mechanisms to ensure, in a manner satisfactory to the Board,
that--
(A) per capita expenditures for items and services
in the comprehensive benefit package under the system
for a year (beginning with the first year) do not
exceed an amount equivalent to the regional alliance
per capita premium target that is determined under
section 6003 (based on the State being a single
regional alliance) for the year;
(B) the per capita expenditures described in
subparagraph (A) are computed and effectively
monitored; and
(C) automatic, mandatory, nondiscretionary
reductions in payments to health care providers will be
imposed to the extent required to assure that such per
capita expenditures do not exceed the applicable target
referred to in subparagraph (A).
(7) Requirements generally applicable to health plans.--The
system shall meet the requirements applicable to a health plan
under section 1400(a), except that--
(A) the system does not have the authority provided
to health plans under section 1402(a)(2) (relating to
permissible limitations on the enrollment of eligible
individuals on the basis of limits on the plan's
capacity);
(B) the system is not required to meet the
requirements of section 1404(a) (relating to
restrictions on the marketing of plan materials); and
(C) the system is not required to meet the
requirements of section 1408 (relating to plan
solvency).
SEC. 1223. SPECIAL RULES FOR STATES OPERATING STATEWIDE SINGLE-PAYER
SYSTEM.
(a) In General.--In the case of a State operating a Statewide
single-payer system--
(1) the State shall operate the system throughout the State
through a single alliance;
(2) except as provided in subsection (b), the State shall
meet the requirements for participating States under part 1;
and
(3) the State shall assume the functions described in
subsection (c) that are otherwise required to be performed by
regional alliances in participating States that do not operate
a Statewide single-payer system.
(b) Exceptions to Certain Requirements for Participating States.--
In the case of a State operating a Statewide single-payer system, the
State is not required to meet the following requirements otherwise
applicable to participating States under part 1:
(1) Establishment of alliances.--The requirements of
section 1202 (relating to the establishment of alliances).
(2) Health plans.--The requirements of section 1203
(relating to health plans), other than the requirement of
subsection (f) of such section (relating to coordination of
workers' compensation services and automobile liability
insurance).
(3) Financial solvency.--The requirements of section 1204
(relating to the financial solvency of health plans in the
State).
(c) Assumption by State of Certain Requirements Applicable to
Regional Alliances.--A State operating a Statewide single-payer system
shall be subject to the following requirements otherwise applicable to
regional alliances in other participating States:
(1) Enrollment; issuance of health security cards.--The
requirements of subsections (a) and (c) of section 1323 and
section 1324 shall apply to the State, eligible individuals
residing in the State, and the single-payer system operated by
the State in the same manner as such requirements apply to a
regional alliance, alliance eligible individuals, and regional
alliance health plans.
(2) Reductions in cost sharing for low-income
individuals.--The requirement of section 1371 shall apply to
the State in the same manner as such requirement applies to a
regional alliance.
(3) Data collection; quality.--The requirements of section
1327 shall apply to the State and the single-payer system
operated by the State in the same manner as such requirement
applies to a regional alliance and health plans offered through
a regional alliance.
(4) Anti-discrimination; coordination.--The requirements of
section 1328 shall apply to the State in the same manner as
such requirements apply with respect to a regional alliance.
(d) Financing.--
(1) In general.--A State operating a Statewide single-payer
system shall provide for the financing of the system using, at
least in part, a payroll-based financing system that requires
employers to pay at least the amount that the employers would
be required to pay if the employers were subject to the
requirements of subtitle B of title VI.
(2) Use of financing methods.--Such a State may use,
consistent with paragraph (1), any other method of financing.
(e) Single-Payer State Defined.--In this Act, the term ``single-
payer State'' means a State with a Statewide single-payer system in
effect that has been approved by the Board in accordance with this
part.
SEC. 1224. SPECIAL RULES FOR ALLIANCE-SPECIFIC SINGLE-PAYER SYSTEMS.
(a) In General.--In the case of a State operating an alliance-
specific single-payer system--
(1) the State shall meet the requirements for participating
States under part 1; and
(2) the regional alliance in which the system is operated
shall meet the requirements of subsection (b).
(b) Requirements for Alliance in Which System Operates.--A regional
alliance in which an alliance-specific single payer system is operated
shall meet the requirements applicable to regional alliances under
subtitle D, except that the alliance is not required to meet the
following requirements of such subtitle:
(1) Contracts with health plans.--The requirements of
section 1321 (relating to contracts with health plans).
(2) Choice of health plans offered.--The requirements of
subsections (a) or (b) of section 1322 (relating to offering a
choice of health plans to eligible enrollees).
(3) Establishment of ombudsman office.--The requirements of
section 1326(a) (relating to the establishment of an office of
ombudsman).
(4) Addressing needs of areas with inadequate health
services.--The regional alliance does not have any of the
authorities described in subsections (a) and (b) of section
1329 (relating to adjusting payments to plans and encouraging
the establishment of new plans).
Title I, Subtitle D
Subtitle D--Health Alliances
SEC. 1300. HEALTH ALLIANCE DEFINED.
In this Act, the term ``health alliance'' means a regional alliance
(as defined in section 1301) and a corporate alliance (as defined in
section 1311).
PART 1--ESTABLISHMENT OF REGIONAL AND CORPORATE ALLIANCES
Subpart A--Regional Alliances
SEC. 1301. REGIONAL ALLIANCE DEFINED.
In this Act, the term ``regional alliance'' means a non-profit
organization, an independent state agency, or an agency of the State
which--
(1) meets the applicable organizational requirements of
this subpart, and
(2) is carrying out activities consistent with part 2.
SEC. 1302. BOARD OF DIRECTORS.
(a) In General.--A regional alliance must be governed by a Board of
Directors appointed consistent with the provisions of this subpart. All
powers vested in a regional alliance under this Act shall be vested in
the Board of Directors.
(b) Membership.--
(1) In general.--Such a Board of Directors shall consist
of--
(A) members who represent employers whose employees
purchase health coverage through the alliance,
including self-employed individuals who purchase such
coverage; and
(B) members who represent individuals who purchase
such coverage, including employees who purchase such
coverage.
(2) Equal representation of employers and consumers.--The
number of members of the Board described under subparagraph (A)
of paragraph (1) shall be the same as the number of members
described in subparagraph (B) of such paragraph.
(c) No Conflict of Interest Permitted.--An individual may not serve
as a member of the Board of Directors if the individual is one of the
following (or an immediate family member of one of the following):
(1) A health care provider.
(2) An individual who is an employee or member of the Board
of Directors of, has a substantial ownership in, or derives
substantial income from, a health care provider, health plan,
pharmaceutical company, or a supplier of medical equipment,
devices, or services.
(3) A person who derives substantial income from the
provision of health care.
(4)(A) A member or employee of an association, law firm, or
other institution or organization that represents the interests
of one or more health care providers, health plans or others
involved in the health care field, or (B) an individual who
practices as a professional in an area involving health care.
SEC. 1303. PROVIDER ADVISORY BOARDS FOR REGIONAL ALLIANCES.
Each regional alliance must establish a provider advisory board
consisting of representatives of health care providers and
professionals who provide covered services through health plans offered
by the alliance.
Subpart B--Corporate Alliances
SEC. 1311. CORPORATE ALLIANCE DEFINED; INDIVIDUALS ELIGIBLE FOR
COVERAGE THROUGH CORPORATE ALLIANCES; ADDITIONAL
DEFINITIONS.
(a) Corporate Alliance Defined.--In this Act, the term ``corporate
alliance'' means an eligible sponsor (as defined in subsection (b))
if--
(1) the sponsor elects, in a form and manner specified by
the Secretary of Labor consistent with this subpart, to be
treated as a corporate alliance under this title and such
election has not been terminated under section 1313; and
(2) the sponsor has filed with the Secretary of Labor a
document describing how the sponsor shall carry out activities
as such an alliance consistent with part 4.
(b) Eligible Sponsors.--
(1) In general.--In this subpart, each of the following is
an eligible sponsor:
(A) Large employer.--An employer that--
(i) is a large employer (as defined in
subsection (e)(2)) as of the date of an
election under subsection (a)(1), and
(ii) is not an excluded employer described
in paragraph (2).
(B) Plan sponsor of a multiemployer plan.--A plan
sponsor described in section 3(16)(B)(iii) of Employee
Retirement Income Security Act of 1974, but only with
respect to a group health plan that is a multiemployer
plan (as defined in subsection (e)(3)) maintained by
the sponsor and only if--
(i) such plan offered health benefits as of
September 1, 1993, and
(ii) as of both September 1, 1993, and
January 1, 1996, such plan has more than 5,000
active participants in the United States, or
the plan is maintained by one or more
affiliates of the same labor organization, or
one or more affiliates of labor organizations
representing employees in the same industry,
covering more than 5,000 employees.
(C) Rural electric cooperative and rural telephone
cooperative association.--A rural electric cooperative
or a rural telephone cooperative association, but only
with respect to a group health plan that is maintained
by such cooperative or association (or members of such
cooperative or association) and only if such plan--
(i) offered health benefits as of September
1, 1993, and
(ii) as of both September 1, 1993, and
January 1, 1996, has more than 5,000 full-time
employees in the United States entitled to
health benefits under the plan.
(2) Excluded employers.--For purposes of paragraph (1)(A),
any of the following are excluded employers described in this
paragraph:
(A) An employer whose primary business is employee
leasing.
(B) The Federal government (other than the United
States Postal Service).
(C) A State government, a unit of local government,
and an agency or instrumentality of government,
including any special purpose unit of government.
(c) Individuals Eligible To Enroll in Corporate Alliance Health
Plans.--For purposes of part 1 of subtitle A, subject to subsection
(d)--
(1) Full-time employees of large employers.--Each eligible
individual who is a full-time employee (as defined in section
1901(b)(2)(C)) of a large employer that has an election in
effect as a corporate alliance is eligible to enroll in a
corporate alliance health plan offered by such corporate
alliance.
(2) Multiemployer alliances.--
(A) Participants.--Each participant and beneficiary
(as defined in subparagraph (B)) under a multiemployer
plan, with respect to which an eligible sponsor of the
plan described in subsection (b)(1)(B) has an election
in effect as a corporate alliance, is eligible to
enroll in a corporate alliance health plan offered by
such corporate alliance.
(B) Participant and beneficiary defined.--In
subparagraph (A), the terms ``participant'' and
``beneficiary'' have the meaning given such terms in
section 3 of the Employee Retirement Income Security
Act of 1974.
(3) Full-time employees of rural cooperative alliances.--
Each full-time employee of a member of a rural electric
cooperative or rural telephone cooperative association which
has an election in effect as a corporate alliance (and each
full-time employee of such a cooperative or association) is
eligible to enroll in a corporate alliance health plan offered
by such corporate alliance.
(4) Ineligible to enroll in regional alliance health
plan.--Except as provided in section 1013, a corporate alliance
eligible individual is not eligible to enroll under a regional
alliance health plan.
(d) Exclusion of Certain Individuals.--In accordance with rules of
the Board, the following individuals shall not be treated as corporate
alliance eligible individuals:
(1) AFDC recipients.
(2) SSI recipients.
(3) Individuals who are described in section 1004(b)
(relating to veterans, military personnel, and Indians) and who
elect an applicable health plan described in such section.
(4) Employees who are seasonal or temporary workers (as
defined by the Board), other than such workers who are treated
as corporate alliance eligible individuals pursuant to a
collective bargaining agreement (as defined by the Secretary of
Labor).
(e) Definitions Relating to Corporate Alliances.--In this subtitle,
except as otherwise provided:
(1) Group health plan.--The term ``group health plan''
means an employee welfare benefit plan (as defined in section
3(1) of the Employee Retirement Income Security Act of 1974)
providing medical care (as defined in section 213(d) of the
Internal Revenue Code of 1986) to participants or beneficiaries
(as defined in section 3 of the Employee Retirement Income
Security Act of 1974) directly or through insurance,
reimbursement, or otherwise.
(2) Large employer.--The term ``large employer'' means an
employer that has more than 5,000 full-time employees in the
United States. Such term includes the United States Postal
Service.
(3) Multiemployer plan.--The term ``multiemployer plan''
has the meaning given such term in section 3(37) of the
Employee Retirement Income Security Act of 1974, and includes
any plan that is treated as such a plan under title I of such
Act.
(4) Rural electric cooperative.--The term ``rural electric
cooperative'' has the meaning given such term in section
3(40)(A)(iv) of the Employee Retirement Income Security Act of
1974.
(5) Rural telephone cooperative associations.--The term
``rural telephone cooperative association'' has the meaning
given such term in section 3(40)(A)(v) of the Employee
Retirement Income Security Act of 1974.
SEC. 1312. TIMING OF ELECTIONS.
(a) For Large Employers.--
(1) Current large employers.--
(A) In general.--In the case of an employer that is
an eligible sponsor described in section 1311(b)(1)(A)
as of the most recent January 1 prior to the general
effective date, the sponsor's election to be a
corporate alliance under such section must be made and
filed with the Secretary of Labor not later than the
date specified in subparagraph (B).
(B) Deadline for notice.--The date specified in
this subparagraph is January 1 of the second year
preceding the general effective date or, in the case of
a State that elects to become a participating State
before the general effective date, not later than one
month later than the date specified for States under
section 1202(a)(2).
(2) New large employers.--In the case of an employer that
is not an eligible sponsor described in section 1311(b)(1)(A)
as of the most recent January 1 prior to the general effective
date, but first becomes such a sponsor as of a subsequent date,
the election to be a corporate alliance under such section must
be made and filed with the Secretary of Labor not later than
March 1 of the year following the year in which the employer
first becomes such a sponsor.
(3) Application of option.--The Secretary of Labor shall
promulgate rules regarding how the option described in section
1311(c)(1)(B) will be applied to the determination of whether
an employer is a large employer before an election is made
under section 1311.
(b) For Multiemployer Plans and Rural Cooperatives.--In the case of
an eligible sponsor described in section 1311(b)(1) (B) or (C), the
sponsor's election to be a corporate alliance under such section must
be made and filed with the Secretary of Labor not later than March 1,
1996.
(c) Effective Date of Election.--An election made under subsection
(a) or (b) shall be effective for coverage provided under health plans
on and after January 1 of the year following the year in which the
election is made.
(d) One-time Election.--If an eligible sponsor fails to make the
election on a timely manner under subsection (a) or (b), the sponsor
may not make such election at any other time.
SEC. 1313. TERMINATION OF ALLIANCE ELECTION.
(a) Termination for Insufficient Number of Full-Time Employees or
Participants.--If a corporate alliance reports under section 1387(c),
that there were fewer than 4,800 full-time employees (or, active
participants, in the case of one or more plans offered by a corporate
alliance which is an eligible sponsor described in section
1311(b)(1)(B)) who are enrolled in a health plan through the alliance,
the election under this part with respect to the alliance shall
terminate.
(b) Termination for Failure to Meet Requirements.--
(1) In general.--If the Secretary of Labor finds that a
corporate alliance has failed substantially to meet the
applicable requirements of this subtitle, the Secretary shall
terminate the election under this part with respect to the
alliance
(2) Excess increase in premium equivalent.--If the
Secretary of Labor finds that the alliance is in violation of
the requirements of section 6022 (relating to prohibition
against excess increase in premium expenditures), the Secretary
shall terminate the alliance in accordance with such section.
(c) Elective Termination.--A corporate alliance may terminate an
election under this part by filing with the National Health Board and
the Secretary of Labor a notice of intent to terminate.
(d) Effective Date of Termination.--In the case of a termination of
an election under this section, in accordance with rules established by
the Secretary of Labor--
(1) subject to section 6022(a)(1), the termination shall
take effect as of the effective date of enrollments in regional
alliance health plans made during the next open enrollment
period (as provided in section 1323(d)), and
(2) the enrollment of eligible individuals in corporate
alliance health plans of the corporate alliance shall be
terminated as of such date and such individuals shall be
enrolled in other applicable health plans effective on such
date.
(e) Notice to Board.--If an election with respect to a corporate
alliance is terminated pursuant to subsection (a) or subsection (b),
the Secretary of Labor shall notify the National Health Board of the
termination of the election.
PART 2--GENERAL RESPONSIBILITIES AND AUTHORITIES OF REGIONAL ALLIANCES
SEC. 1321. CONTRACTS WITH HEALTH PLANS.
(a) Contracts with Plans.--
(1) In general.--In order to assure the availability of the
comprehensive benefit package to eligible individuals residing
in the alliance area in a cost-effective manner, except as
provided in this section, each regional alliance shall
negotiate with any willing State-certified health plan to enter
into a contract with the alliance for the enrollment under the
plan of eligible individuals in the alliance area. Subject to
paragraph (2), a regional alliance shall not enter into any
such contract with a health plan that is not a State-certified
health plan.
(2) Treatment of certain plans.--Each regional alliance
shall enter into a contract under this section with any
veterans health plan of the Department of Veterans Affairs and
with a Uniformed Services Health Plan of the Department of
Defense, that offers the comprehensive benefit package to
eligible individuals residing in the alliance area if the
appropriate official requests to enter into such a contract.
(b) General Conditions for Denial of Contract by a Regional
Alliance.--A regional alliance is not required under this section to
offer a contract with a health plan if--
(1) the alliance finds that the proposed bid exceeds 120
percent of the regional alliance per capita prremium target (as
determined under section 6003); or
(2) the plan has failed to comply with requirements under
prior contracts with the alliance, including failing to offer
coverage for all the services in the comprehensive benefit
package in the entire service area of the plan.
SEC. 1322. OFFERING CHOICE OF HEALTH PLANS FOR ENROLLMENT;
ESTABLISHMENT OF FEE-FOR-SERVICE SCHEDULE.
(a) In General.--Each regional alliance must provide to each
eligible enrollee (as defined in section 1902(14)) with respect to the
alliance a choice of health plans among the plans which have contracts
in effect with the alliance under section 1321 (in the case of a
regional alliance) or section 1341 (in the case of a corporate
alliance).
(b) Offering of Plans by Regional Alliances.--
(1) In general.--Each regional alliance shall include among
its health plan offerings at least one fee-for-service plan (as
defined in paragraph (2)).
(2) Fee-for-service plan defined.--
(A) In general.--For purposes of this Act, the term
``fee-for-service plan'' means a health plan that--
(i) provides coverage for all items and
services included in the comprehensive benefit
package that are furnished by any lawful health
care provider of the enrollee's choice, subject
to reasonable restrictions (described in
subparagraph (B)), and
(ii) makes payment to such a provider
without regard to whether or not there is a
contractual arrangement between the plan and
the provider.
(B) Reasonable restrictions described.--The
reasonable restrictions on coverage permitted under a
fee-for-service plan (as specified by the National
Health Board) are as follows:
(i) Utilization review.
(ii) Prior approval for specified services.
(iii) Exclusion of providers on the basis
of poor quality of care, based on evidence
obtainable by the plan.
Clause (ii) shall not be construed as permitting a plan
to require prior approval for non-primary health care
services through a gatekeeper or other process.
(c) Establishment of Fee-for-Service Schedule.--
(1) In general.--Except in the case of regional alliances
of a State that has established a Statewide fee schedule under
paragraph (3), each regional alliance shall establish a fee
schedule setting forth the payment rates applicable to services
furnished during a year to individuals enrolled in fee-for-
service plans (or to services furnished under the fee-for-
service component of any regional alliance health plan) for use
by regional alliance health plans under section 1406(c) and
corporate alliance health plans providing services subject to
the schedule in the regional alliance area.
(2) Negotiation with providers.--The fee schedule under
paragraph (1) shall be established after negotiations with
providers, and (subject to paragraphs (5) and (6)) providers
may collectively negotiate the fee schedule with the regional
alliance.
(3) Use of statewide schedule.--At the option of a State,
the State may establish its own statewide fee schedule which
shall apply to all fee-for-service plans offered by regional
alliances and corporate alliances in the State instead of
alliance-specific schedules established under paragraph (1).
(4) Annual revision.--A regional alliance or State (as the
case may be) shall annually update the payment rates provided
under the fee schedule established pursuant to paragraph (1) or
paragraph (3).
(5) Activities treated as State action or efforts intended
to influence government action.--The establishment of a fee
schedule under this subsection by a regional alliance of a
State shall be considered to be pursuant to a clearly
articulated and affirmatively expressed State policy to
displace competition and to be actively supervised by the
State, and conduct by providers respecting the establishment of
the fee schedule, including collective negotiations by
providers with the regional alliance (or the State) pursuant to
paragraph (2), shall be considered as efforts intended to
influence governmental action.
(6) No boycott permitted.--Nothing in this subsection shall
be construed to permit providers to threaten or engage in any
boycott.
(7) Negotiations defined.--In this subsection,
``negotiations'' are the process by which providers
collectively and jointly meet, confer, consult, discuss, share
information, among and between themselves in order to agree on
information to be provided, presentations to be made, and other
such activities with respect to regional alliances (or States)
relating to the establishment of the fee schedule (but not
including any activity that constitutes engaging in or
threatening to engage in a boycott), as well as any and all
collective and joint meetings, discussions, presentations,
conferences, and consultations between or among providers and
any regional alliance (or State) for the purpose of
establishing the fee schedule described in this subsection.
(d) Prospective Budgeting of Fee-for-Service.--
(1) In general.--The fee schedule established by a regional
alliance or a State under subsection (c) may be based on
prospective budgeting described in paragraph (2).
(2) Prospective budgeting described.--Under prospective
budgeting--
(A) the regional alliance or State (as the case may
be) shall negotiate with health providers annually to
develop a budget for the designated fee-for-service
plan;
(B) the negotiated budget shall establish spending
targets for each sector of health expenditures made by
the plan; and
(C) if the regional alliance or State (as the case
may be) determines that the utilization of services
under the plan is at a level that will result in
expenditures under the plan exceeding the negotiated
budget, the plan shall reduce the amount of payments
otherwise made to providers (through a withhold or
delay in payments or adjustments) in such a manner and
by such amounts as necessary to assure that
expenditures will not exceed the budget.
(3) Use of prospective budgeting exclusive.--If a regional
alliance or State establishes the fee schedule for fee-for-
service plans on the basis of prospective budgeting under this
subsection, payment for all services provided by fee-for-
service plans in the alliance or State shall be determined on
such basis.
SEC. 1323. ENROLLMENT RULES AND PROCEDURES.
(a) In General.--Each regional alliance shall assure that each
regional alliance eligible individual who resides in the alliance area
is enrolled in a regional alliance health plan and shall establish and
maintain methods and procedures, consistent with this section,
sufficient to assure such enrollment. Such methods and procedures shall
assure the enrollment of alliance eligible individuals at the time they
first become eligible enrollees in the alliance area, including
individuals at the time of birth, at the time they move into the
alliance area, and at the time of reaching the age of individual
eligibility as an eligible enrollee (and not merely as a family
member). Each regional alliance shall establish procedures, consistent
with subtitle A, for the selection of a single health plan in which all
members of a family are enrolled.
(b) Point of Service Enrollment Mechanism.--
(1) In general.--Each regional alliance shall establish a
point-of-service enrollment mechanism (meeting the requirements
of this subsection) for enrolling eligible individuals who are
not enrolled in a health plan of the alliance when the
individual seeks health services.
(2) Requirements of mechanism.--Under such a mechanism, if
an eligible individual seeks to receive services (included in
the comprehensive benefit package) from a provider in an
alliance area and does not present evidence of enrollment under
any applicable health plan, or if the provider has no evidence
of the individual's enrollment under any such plan, the
following rules shall apply:
(A) Notice to alliance.--Consistent with part 2 of
subtitle B of title V, the provider--
(i) shall provide the regional alliance
with information relating to the identity of
the eligible individual, and
(ii) may request payment from the regional
alliance for the furnishing of such services.
(B) Initial determination of eligibility and
enrollment status.--The regional alliance shall
determine--
(i) if the individual is an alliance
eligible individual for the alliance, and
(ii) if the individual is enrolled under an
applicable health plan (including a corporate
alliance health plan).
(C) Treatment of alliance eligible individuals.--If
the regional alliance determines that the individual is
an alliance eligible individual with respect to the
alliance and--
(i) is enrolled under a regional alliance
health plan of the alliance, the alliance shall
forward the claim to the health plan involved
and shall notify the provider (and the
individual) of the fact of such enrollment and
the forwarding of such claim (and the plan
shall make payment to the provider for the
services furnished to the individual as
described in paragraph (3)(C));
(ii) is not enrolled under a regional
alliance health plan of the alliance but is
required to be so enrolled in a specific health
plan as a family member under section 1011, the
alliance shall record the individual's
enrollment under such specific plan, shall
forward the claim to such plan, and shall
notify the provider (and the individual) of the
fact of such enrollment and the forwarding of
such claim (and the plan shall make payment to
the provider for the services furnished to the
individual as described in paragraph (3)(C));
or
(iii) is not enrolled under such a plan and
is not described in clause (ii), the point-of-
service enrollment procedures described in
paragraph (3) shall apply.
(D) Treatment of individuals enrolled under health
plans of other alliances.--If the regional alliance
determines that the individual is not an alliance
eligible individual with respect to the alliance but
the individual is enrolled--
(i) under a regional alliance health plan
of another alliance, the alliance shall forward
the claim to the other regional alliance and
shall notify the provider (and the individual)
of the fact of such enrollment and the
forwarding of such claim (and the plan shall
make payment to the provider for the services
furnished to the individual as described in
paragraph (3)(C)); or
(ii) under a corporate alliance health
plan, the alliance shall forward the claim to
the corporate alliance involved and shall
notify the provider (and the individual) of the
fact of such enrollment and the forwarding of
such claim (and the plan shall make payment to
the provider for the services furnished to the
individual as described in section
1383(b)(2)(B)).
(E) Treatment of other alliance eligible
individuals not enrolled in health plan.--If the
regional alliance determines that the individual is not
an alliance eligible individual with respect to the
alliance and the individual is an alliance eligible
individual with respect to another health alliance but
is not enrolled in a health plan of such alliance, the
regional alliance shall forward the claim to the other
alliance involved and shall notify the provider (and
the individual) of the forwarding of such claim and the
requirement for prompt enrollment of the individual
under an applicable health plan of such alliance
pursuant to the procedures described in paragraph (3)
(in the case of a regional alliance) or in section
1383(b) (in the case of a corporate alliance).
(F) Treatment of all other individuals.--The
National Board shall promulgate rules regarding the
responsibilities of regional alliances relating to
individuals whose applicable health plan is not an
alliance plan and other individuals the alliance is
unable to identify as eligible individuals.
(3) Point-of-service enrollment procedures described.--The
point-of-service enrollment procedures under this paragraph are
as follows:
(A) Not later than 10 days after the date an
alliance is notified of the receipt of services by an
unenrolled eligible individual, the alliance provides
the individual with materials describing health plans
offered through the alliance.
(B) The individual shall be provided a period of 30
days in which to enroll in a health plan of the
individual's choice. If the individual fails to so
enroll during such period, the alliance shall enroll
the individual in a health plan of the alliance
selected on a random basis.
(C) Using the fee-for-service schedule adopted by
the alliance under section 1322(c), the health plan in
which the individual is enrolled under this
subparagraph shall reimburse the provider who provided
the services referred to in subparagraph (A) to the
same extent as if the individual had been enrolled
under the plan at the time of provision of the
services.
(c) Enrollment of New Residents.--
(1) In general.--Each regional alliance shall establish
procedures for enrolling regional alliance eligible individuals
who move into the alliance area.
(2) Long-term residents.--Such procedures shall assure that
regional alliance eligible individuals who intend to reside in
the alliance area for longer than 6 months shall register with
the regional alliance for the area and shall enroll in a
regional alliance health plan offered by the alliance.
(3) Short-term residents.--Such procedures shall permit
eligible individuals who intend to reside in the alliance area
for more than 3 months but less than 6 months to choose among
the following options:
(A) To continue coverage through the health plan in
which such individual is previously enrolled, in which
case coverage for care in the area of temporary
residence may be limited to emergency services and
urgent care.
(B) To register with the regional alliance and
enroll in a regional alliance health plan offered by
the alliance.
(C) To change enrollment in the previous alliance
area to enrollment in a health plan of such alliance
that provides for coverage on a fee-for-service basis
of services provided outside the area of that alliance.
(d) Changes in Enrollment.--
(1) Annual open enrollment period to change plan
enrollment.--Each regional alliance shall hold an annual open
enrollment period during which each eligible enrollee in the
alliance has the opportunity to choose among health plans
offered through the alliance, according to rules to be
promulgated by the National Health Board.
(2) Disenrollment for cause.--In addition to the annual
open enrollment period held under paragraph (1), each regional
alliance shall establish procedures under which alliance
eligible individuals enrolled in a plan may disenroll from the
plan for good cause at any time during a year and enroll in
another plan of the alliance. Such procedures shall be
implemented in a manner that ensures continuity of coverage for
the comprehensive benefit package for such individuals during
the year.
(e) Enrollment of Family Members.--Each regional alliance shall
provide for the enrollment of all family members in the same plan,
consistent with part 2 of subtitle A.
(f) Oversubscription of Plans.--
(1) In general.--Each regional alliance shall establish a
method for establishing enrollment priorities in the case of a
health plan that does not have sufficient capacity to enroll
all eligible individuals seeking enrollment.
(2) Preference for current members.--Such method shall
provide that in the case of such an oversubscribed plan--
(A) individuals already enrolled in the plan are
given priority in continuing enrollment in the plan,
and
(B) other individuals who seek enrollment during an
applicable enrollment period are permitted to enroll in
accordance with a random selection method, up to the
enrollment capacity of the plan.
(g) Termination of Enrollment.--
(1) In general.--Each regional alliance shall establish
special enrollment procedures to permit alliance eligible
individuals to change the plan in which they are enrolled in
the case of the termination of coverage under a plan, in a
manner that ensures the individuals' continuation of coverage
for the comprehensive benefit package.
(2) Failure of a corporate alliance.--Each regional
alliance shall establish special enrollment procedures to
permit individuals, who become alliance eligible individuals as
a result of the failure of a corporate alliance, to enroll
promptly in regional alliance health plans in a manner that
ensures the individuals' continuation of coverage for the
comprehensive benefit package.
(h) Limitation on Offering of Coverage to Ineligible Individuals.--
A regional alliance may not knowingly offer coverage under a regional
alliance health plan or other health insurance or health benefits to an
individual who is not an eligible individual. Nothing in this section
shall be construed as affecting the ability of a regional alliance
health plan or other health plan to offer coverage to such individuals
without any financial payment or participation by a regional alliance.
(i) Enforcement of Enrollment Requirement.--In the case of a
regional alliance eligible individual who fails to enroll in an
applicable health plan as required under section 1002(a)--
(1) the applicable regional alliance shall enroll the
individual in a regional alliance health plan (selected by the
alliance consistent with this Act and with any rules
established by the Board), and
(2) such alliance shall require the payment of twice the
amount of the family share of premiums that would have been
payable under subtitle B of title VI if the individual had
enrolled on a timely basis in the plan, unless the individual
has established to the satisfaction of the alliance good cause
for the failure to enroll on a timely basis.
SEC. 1324. ISSUANCE OF HEALTH SECURITY CARDS.
A regional alliance is responsible for the issuance of health
security cards to regional alliance eligible individuals under section
1001(b).
SEC. 1325. CONSUMER INFORMATION AND MARKETING.
(a) Consumer Information.--
(1) In general.--Before each open enrollment period, each
regional alliance shall make available to eligible enrollees
information, in an easily understood and useful form, that
allows such enrollees (and other alliance eligible individuals)
to make valid comparisons among health plans offered by the
alliance.
(2) Information to be included.--Such information must
include, in the same format for each plan, such information as
the National Health Board shall require, including at least the
following:
(A) The cost of the plan, including premiums and
average out-of-pocket expenses.
(B) The characteristics and availability of health
care professionals and institutions participating in
the plan.
(C) Any restrictions on access to providers and
services under the plan.
(D) A summary of the annual quality performance
report, established pursuant to section 5005(c)(1),
which contains measures of quality presented in a
standard format.
(b) Marketing.--Each regional alliance shall, consistent with
section 1404, review and approve or disapprove the distribution of any
materials used to market health plans offered through the alliance.
SEC. 1326. OMBUDSMAN.
(a) Establishment.--Each regional alliance must establish and
maintain an office of an ombudsman to assist consumers in dealing with
problems that arise with health plans and the alliance.
(b) Optional Financing Through Voluntary Contribution.--At the
option of the State in which a regional alliance is located, the
alliance--
(1) shall permit alliance eligible individuals to designate
that one dollar of the premium paid for enrollment in the
individual's regional alliance health plan for the operation of
the office of the alliance's ombudsman; and
(2) shall apply any such amounts towards the establishment
and operation of such office.
SEC. 1327. DATA COLLECTION; QUALITY.
Each regional alliance shall comply with requirements of subtitles
A and B of title V (relating to quality, information systems, and
privacy), and shall take appropriate steps to ensure that health plans
offered through the alliance comply with such requirements.
SEC. 1328. ADDITIONAL DUTIES.
(a) Anti-Discrimination.--In carrying out its activities under this
part, a regional alliance may not discriminate against health plans on
the basis of race, sex, national origin, religion, mix of health
professionals, location of the plan's headquarters, or (except as
specifically provided in this part) organizational arrangement.
(b) Coordination of Enrollment Activities.--Each regional alliance
shall coordinate, in a manner specified by the National Health Board,
with other health alliances its activities, including enrollment and
disenrollment activities, in a manner that ensures continuous,
nonduplicative coverage of alliance eligible individuals in health
plans and that minimizes administrative procedures and paperwork.
SEC. 1329. ADDITIONAL AUTHORITIES FOR REGIONAL ALLIANCES TO ADDRESS
NEEDS IN AREAS WITH INADEQUATE HEALTH SERVICES;
PROHIBITION OF INSURANCE ROLE.
(a) Payment Adjustment.--In order to ensure that plans are
available to all eligible individuals residing in all portions of the
alliance area, a regional alliance may adjust payments to plans or use
other financial incentives to encourage health plans to expand into
areas that have inadequate health services.
(b) Encouraging New Plans.--Subject to subsection (c), in order to
encourage the establishment of a new health plan in an area that has
inadequate health services, an alliance may--
(1) organize health providers to create such a plan in such
an area a new health plan targeted at such an area,
(2) provide assistance with setting up and administering
such a plan, and
(3) arrange favorable financing for such a plan.
(c) Prohibition of Regional Alliances Bearing Risk.--A regional
alliance may not bear insurance risk.
SEC. 1330. PROHIBITION AGAINST SELF-DEALING AND CONFLICTS OF INTEREST.
(a) Promulgation of Standards.--The Board shall promulgate
standards of conduct in accordance with subsection (b) for any
administrator, officer, trustee, fiduciary, custodian, counsel, agent,
or employee of any regional alliance.
(b) Requirements for Standards.--The standards of conduct referred
to in subsection (a) shall set forth--
(1) the types of investment interests, ownership interests,
affiliations or other employment that would be improper for an
individual described in subsection (a) to hold during the time
of the individual's service or employment with an alliance; and
(2) the circumstances that will constitute impermissible
conflicts of interest or self-dealing by such employees in
performing their official duties and functions for any regional
alliance.
(c) Civil Monetary Penalty.--Any individual who engages in an
activity that the individual knows or has reason to know is in
violation of the regulations and standards promulgated by the Board
pursuant to subsections (a) and (b) shall be subject, in addition to
any other penalties that may be prescribed by law, to a civil money
penalty of not more than $10,000 for each such violation. The
provisions of section 1128A of the Social Security Act (other than
subsections (a) and (b)) shall apply to civil money penalties under
this subsection in the same manner as they apply to a penalty or
proceeding under section 1128A(a) of such Act.
PART 3--AUTHORITIES AND RESPONSIBILITIES OF REGIONAL ALLIANCES RELATING
TO FINANCING AND INCOME DETERMINATIONS
Subpart A--Collection of Funds
SEC. 1341. INFORMATION AND NEGOTIATION AND ACCEPTANCE OF BIDS.
(a) Information Provided to Plans Before Soliciting Bids.--
(1) In general.--Each regional alliance shall make
available, by April 1 of each year, to each plan that indicates
an interest in submitting a premium bid under section 6004 in
the year, information (including information described in
paragraph (2)) that the Board specifies as being necessary to
enable a plan to estimate, based upon an accepted bid, the
amounts payable to such a plan under section 1351.
(2) Information to be included.--Such information shall
include the following:
(A) The demographic and other characteristics of
regional alliance eligible individuals for the regional
alliance.
(B) The uniform per capita conversion factor for
the regional alliance (established under subsection
(b)).
(C) The premium class factors (established by the
Board under section 1531).
(D) The regional alliance inflation factor
(determined under section 6001(a)).
(E) The risk-adjustment factors and reinsurance
methodology and payment amounts (published under
subsection (c)) to be used by the regional alliance in
computing blended plan per capita rates (in accordance
with section 6201).
(F) The plan bid proportion, the AFDC proportion,
the SSI proportion, the AFDC per capita premium amount,
and the SSI per capita premium amount, for the year, as
computed under subtitle D of title VI.
(G) The alliance administrative allowance
percentage, computed under section 1352(b).
(b) Determination of Uniform Per Capita Conversion Factor.--Each
regional alliance shall specify, not later than April 1 of each year
(beginning with the year before the first year) a uniform per capita
conversion factor to be used under section 6102(a)(2) in converting the
accepted bid for each plan for the year into the premium for an
individual enrollment for such plan for the year. SSI or AFDC
recipients shall not be included for purposes of computing the
conversion factor.
(c) Determination of Risk-Adjustment Factors and Reinsurance
Payment Amounts.--Each regional alliance shall compute and publish the
risk-adjustment factors and reinsurance payment amounts to be used by
the regional alliance in computing blended plan per capita rates under
section 6201.
(d) Solicitation of Bids.--Each regional alliance shall solicit and
negotiate, consistent with section 6004, with each regional alliance
health plan a bid for the payment rate on a per capita basis for the
comprehensive benefit package for all alliance eligible individuals in
the alliance area.
SEC. 1342. CALCULATION AND PUBLICATION OF GENERAL FAMILY SHARE AND
GENERAL EMPLOYER PREMIUM AMOUNTS.
(a) Calculation of Components in General Family Share and General
Employer Premiums.--
(1) Family share.--Each regional alliance shall compute the
following components of the general family share of premiums
(as defined in subsection (b)(1)(B)):
(A) Plan premiums.--For each plan offered, the
premium for the plan for each class of family
enrollment (including the amount of any family
collection shortfall).
(B) Alliance credit.--The alliance credit amount
for each class of family enrollment, under section
6103.
(C) Excess premium credit.--The amount of any
excess premium credit provided under section 6105 for
each class of family enrollment.
(D) Corporate alliance opt-in credit.--The amount
of any corporate alliance opt-in credit provided under
section 6106 for each class of family enrollment.
(2) Employer premiums.--Each regional alliance shall
compute the following components of the general employer
premium payment amount (as defined in subsection (b)(2)(B)):
(A) Base employer monthly premium per worker.--The
base employer monthly premium determined under section
6122 for each class of family enrollment.
(B) Employer collection shortfall add-on.--The
employer collection shortfall add-on computed under
section 6125(b).
(b) Publication.--
(1) Family share.--
(A) In general.--Each regional alliance shall
publish, before the open enrollment period in each
year, the general family share of the premium (as
defined in subparagraph (B)) for each class of family
enrollment for each regional alliance health plan to be
offered by the alliance in the following year.
(B) General family share of premium defined.--In
this subpart, the term ``general family share of
premium'' means the family share of premium under
section 6101 computed without regard to section 6104
and without regard to section 6101(b)(2)(C)(v).
(2) Employer premium.--
(A) In general.--Each regional alliance shall
publish, in December before each year (beginning with
December before the first year) the general employer
premium payment amount (as defined in subparagraph (B))
for each class of family enrollment for the following
year.
(B) General employer premium payment amount
defined.--In this subpart, the term ``general employer
premium payment amount'' means the employer premium
payment under section 6121 computed, as an amount per
full-time equivalent worker, without regard to sections
6124 through 6126.
SEC. 1343. DETERMINATION OF FAMILY SHARE FOR FAMILIES.
(a) Amount of Family Share.--The amount charged by a regional
alliance to a family for a class of family enrollment (specified under
section 1011(c)) under a regional alliance health plan is equal to the
family share of premium established under section 6101(a) for the
family. Based upon the information described in this section, each
regional alliance shall determine the amount required to be paid under
section 6101 and under section 6111 for each year for families
enrolling in regional alliance health plans.
(b) Family Share Amount.--The amount required to be paid under
section 6101, with respect to each family, takes into account--
(1) the general family share of premium (as defined in
section 1342(b)(1)(B)) for the class of enrollment involved;
(2) any income-related discount provided under section
6104(a)(1) for the family; and
(3) whether or not the family is an SSI or AFDC family.
(c) Alliance Credit Repayment Amount.--The amount of the alliance
credit repayment amount under section 6111, with respect to each
family, takes into account the following:
(1) The number of months of enrollment, and class of
enrollment, in regional alliance health plans, used in
determining the amount of the alliance credit under section
6103 for the family.
(2) Reductions in liability under section 6111(b) based on
employer premium payments based on net earnings from self-
employment for the family.
(3) Reductions in liability under section 6112 based on
months of employment for the family.
(4) Limitations in liability under section 6113 on the
basis of the adjusted family income for the family.
(5) The elimination of liability in the case of certain
retirees and qualified spouses and children under section 6114.
(6) The elimination of liability in the case of certain
working medicare beneficiaries under section 6115.
(d) Access to Necessary Information to Make Determination.--
Information required for an alliance to make the determination under
subsection (a) shall be based on information obtained or maintained by
the alliance in the conduct of its business, including the following:
(1) Information required for income-related determinations
shall be obtained under subpart B.
(2) Information on SSI and AFDC recipients under subsection
(e).
(3) Information submitted on a monthly and annual basis by
employers under section 1602.
(4) Information submitted by self-employed individuals on
net earnings from self-employment under section 1602(d).
(5) Applications for premium reductions under section 6114.
(6) Information concerning medicare-eligible individuals
under subsection (f).
(7) Any income-related discount provided under section
6104(a)(1) for the family.
(8) Whether or not the family is an SSI or AFDC family.
(e) Information Concerning Cash Assistance Status.--Each
participating State and the Secretary shall make available (in a time
and manner specified by the Secretary) to each regional alliance such
information as may be necessary to determine and verify whether an
individual is an AFDC or SSI recipient for a month in a year.
(f) Information Concerning Medicare-Eligible Individuals.--
(1) Information to regional alliances.--The Secretary shall
make available to regional alliances (through regional
information centers or otherwise) information necessary to
determine--
(A) whether an individual is a medicare-eligible
individual,
(B) the eligibility of individuals for the special
treatment under section 6115,
(C) if medicare-eligible individuals are described
in section 1012(a), and
(D) the amounts of payments owed the alliance under
section 1894 of the Social Security Act, added by
section 4003.
(2) Information to secretary.--Each regional alliance shall
make available to the Secretary (through the national
information system under section 5101 or otherwise) information
relating to the enrollment of individuals who would be
medicare-eligible individuals but for section 1012(a).
(g) Alliance Accounting System.--
(1) In general.--Each regional alliance shall establish an
accounting system that meets standards established by the
Secretary.
(2) Specifics.--Such system shall collect information, on a
timely basis for each individual enrolled (and, to the extent
required by the Secretary, identified and required to be
enrolled) in a regional alliance health plan regarding--
(A) the applicable premium for such enrollment,
(B) family members covered under such enrollment,
(C) the premium payments made by (or on behalf of)
the individual for such enrollment,
(D) employer premium payments made respecting the
employment of the individual and other employer
contributions made respecting such enrollment, and
(E) any government contributions made with respect
to such enrollment (including contributions for
electing veterans and active duty military personnel).
(3) End-of-year reporting.--Such system shall provide for a
report, at the end of each year, regarding the total premiums
imposed, and total amounts collected, for individuals enrolled
under regional health alliance plans, in such manner as
identifies net amounts that may be owed to the regional
alliance.
SEC. 1344. NOTICE OF FAMILY PAYMENTS DUE.
(a) Family Statements.--
(1) Notice of no amount owed.--If the regional alliance
determines under section 1343 that a family has paid any family
share required under section 6101 and is not required to repay
any amount under section 6111 for a year, the alliance shall
provide notice of such determination to the family. Such notice
shall include a prominent statement that the family is not
required to make any additional payment and is not required to
file any additional information with the regional alliance.
(2) Notice of amount owed.--
(A) In general.--If the regional alliance
determines that a family has not paid the entire family
share required under section 6101 or is required to
repay an amount under section 6111 for a year, the
alliance shall provide to the family a notice of such
determination.
(B) Information on amount due.--Such notice shall
include detailed information regarding the amount owed,
the basis for the computation (including the amount of
any reductions that have been made in the family's
liability under subtitle B of title VI), and the date
the amount is due and the manner in which such amount
is payable.
(C) Information on discounts and reductions
available.--Such notice shall include--
(i) information regarding the discounts and
reductions available (under sections 6104,
6112, 6113, 6114, and 6115) to reduce or
eliminate any liability, and
(ii) a worksheet which may be used to
calculate reductions in liability based on
income under sections 6104 and 6113.
(3) Inclusion of income reconciliation form for families
provided premium discounts.--
(A) In general.--A notice under this subsection
shall include, in the case of a family that has been
provided a premium discount under section 6104 (or
section 6113) for the previous year, an income
reconciliation statement (for use under section 1375)
to be completed and returned to the regional alliance
(along with any additional amounts owed) by the
deadline specified in subsection (b). Such form shall
require the submission of such information as the
Secretary specifies to establish or verify eligibility
for such premium discount.
(B) Other families.--Any family which has not been
provided such a discount but may be eligible for such a
discount may submit such an income reconciliation
statement and, if eligible, receive a rebate of the
amount of excess family share paid for the previous
year.
(C) Additional information.--The alliance shall
permit a family to provide additional information
relating to the amount of such reductions or the income
of the family (insofar as it may relate to a premium
discount or reduction in liability under section 6104
or 6113).
(4) Timing of notice.--Notices under this subsection shall
be mailed to each family at least 45 days before the deadline
specified in subsection (b).
(b) Deadline for Payment.--The deadline specified in this
subsection for amounts owed for a year is such date as the Secretary
may specify, taking into account the dates when the information
specified in section 1343 becomes available to compute the amounts owed
and to file income reconciliation statements under section 1375.
Amounts not paid by such deadline are subject to interest and penalty.
(c) Change in Regional Alliance.--In the case of a family that
during a year changes the regional alliance through which the family
obtains coverage under a regional alliance health plan, the Secretary
shall establish rules which provide that the regional alliance in which
the family last obtained such coverage in a year--
(1) is responsible for recovering amounts due under this
subpart for the year (whether or not attributable to periods of
coverage obtained through that alliance);
(2) shall obtain such information, through the health
information system implemented under section 5101, as the
alliance may require in order to compute the amount of any
liability owed under this subpart (taking into account any
reduction in such amount under this section), and
(3) shall provide for the payment to other regional
alliances of such amounts collected as may be attributable to
amounts owed for periods of coverage obtained through such
alliances.
(d) No Loss of Coverage.--In no case shall the failure to pay
amounts owed under this subsection result in an individual's or
family's loss of coverage under this Act.
(e) Dispute Resolution.--Each regional alliance shall establish a
fair hearing mechanism for the resolution of disputes concerning
amounts owed the alliance under this subpart.
SEC. 1345. COLLECTIONS.
(a) In General.--Each regional alliance is responsible for the
collection of all amounts owed the alliance (whether by individuals,
employers, or others and whether on the basis of premiums owed,
incorrect amounts of discounts or premium, cost sharing, or other
reductions made, or otherwise). No amounts are payable by the Federal
Government under this Act (including section 9102) with respect to the
failure to collect any such amounts. Each regional alliance shall use
credit and collection procedures, including the imposition of interest
charges and late fees for failure to make timely payment, as may be
necessary to collect amounts owed to the alliance. States assist
regional alliances in such collection process under section 1202(d).
(b) Collection of Family Share.--
(1) Withholding.--
(A) in general.--In the case of a family that
includes a qualifying employee of an employer, the
employer shall deduct from the wages of the qualifying
employee (in a manner consistent with any rules of the
Secretary of Labor) the amount of the family share of
the premium for the plan in which the family is
enrolled.
(B) Multiple employment.--In the case of a family
that includes more than one qualifying employee, the
family shall choose the employer to which subparagraph
(A) will apply.
(C) Payment.--Amounts withheld under this paragraph
shall be maintained in a manner consistent with
standards established by the Secretary of Labor and
paid to the regional alliance involved in a manner
consistent with the payment of employer premiums under
subsection (c).
(D) Satisfaction of liability.--An amount deducted
from wages of a qualifying employee by an employer is
deemed to have been paid by the employee and to have
satisfied the employee's obligation under subsection
(a) to the extent of such amount.
(2) Other methods.--In the case of a family that does not
include a qualifying employee, the regional alliance shall
require payment to be made prospectively. Such payment may be
required to be made not less frequently than monthly. The
Secretary may issue regulations in order to assure the timely
and accurate collection of the family share due.
(c) Timing and Method of Payment of Employer Premiums.--
(1) Frequency of payment.--Payment of employer premiums
under section 6121 for a month shall be made not less
frequently than monthly (or quarterly in the case of such
payments made by virtue of section 6126). The Secretary of
Labor may establish a method under which employers that pay
wages on a weekly or biweekly basis are permitted to make such
employer payments on such a weekly or biweekly basis.
(2) Electronic transfer.--A regional alliance may require
those employers that have the capacity to make payments by
electronic transfer to make payments under this subsection by
electronic transfer.
(d) Assistance.--
(1) Employer collections.--The Secretary of Labor shall
provide regional alliances with such technical and other
assistance as may promote the efficient collection of all
amounts owed such alliances under this Act by employers. Such
assistance may include the assessment of civil monetary
penalties, not to exceed $5,000 or three times the amount of
the liability owed, whichever is greater, in the case of
repeated failure to pay (as specified in rules of the Secretary
of Labor).
(2) Family collections.--Except as provided in paragraph
(1), the Secretary shall provide regional alliances with such
technical and other assistance as may promote the efficient
collection of other amounts owed such alliances under this Act.
Such assistance may include the assessment of civil monetary
penalties, not to exceed $5,000 or three times the amount of
the liability owed, whichever is greater, in the case of
repeated failure to pay (as specified in rules of the
Secretary).
(e) Receipt of Miscellaneous Amounts.--For payments to regional
alliances by--
(1) States, see subtitle A of title IX, and
(2) the Federal Government, see subtitle B of such title
and section 1894 of the Social Security Act (as added by
section 4003).
SEC. 1346. COORDINATION AMONG REGIONAL ALLIANCES.
(a) In General.--The regional alliance which offers the regional
alliance health plan in which a family is enrolled in December of each
year (in this section referred to as the ``final alliance'') is
responsible for the collection of any amounts owed by the family under
this subpart, without regard to whether the family resided in the
alliance area during the entire year.
(b) Provision of Information in the Case of Change of Residence.--
In the case of a family that moves from one alliance area to another
alliance area during a year, each regional alliance (other than the
final alliance) is responsible for providing to the final alliance
(through the national information system under section 5101 or
otherwise) such information as the final alliance may require in order
to determine the liability (and reductions in liability under section
6112) attributable to alliance credits provided by such regional
alliance.
(c) Distribution of Proceeds.--In accordance with rules established
by the Secretary, in consultation with the Secretary of Labor, the
final alliance shall provide for the distribution of amounts collected
under this subpart with respect to families in a year in an equitable
manner among the regional alliances that provided health plan coverage
to the families in the year.
(d) Expediting Process.--In order to reduce paperwork and promote
efficiency in the collection of amounts owed regional alliances under
this subpart, the Secretary may require or permit regional alliances to
share such information (through the national information system under
section 5101 or otherwise) as the Secretary determines to be cost-
effective, subject to such confidentiality restrictions as may
otherwise apply.
(e) Students.--In the case of a qualifying student who makes an
election described in section 1012(e)(1) (relating to certain full-time
students who are covered under the plan of a parent but enrolled in a
health plan offered by a different regional alliance from the one in
which the parent is enrolled), the regional alliance that offered the
plan to the parent shall provide for transfers of an appropriate
portion of the premium (determined in accordance with procedures
specified by the Board) to the other regional alliance in order to
compensate that alliance for the provision of such coverage.
(f) Payments of Certain Amounts to Corporate Alliances.--In the
case of a married couple in which one spouse is a qualifying employee
of a regional alliance employer and the other spouse is a qualifying
employee of a corporate alliance employer, if the couple is enrolled
with a corporate alliance health plan the regional alliance (which
receives employer premium payments from such regional alliance employer
with respect to such employee) shall pay to the corporate alliance the
amounts so paid (or would be payable by the employer if section 6123
did not apply).
Subpart B--Payments
SEC. 1351. PAYMENT TO REGIONAL ALLIANCE HEALTH PLANS.
(a) Computation of Blended Plan Per Capita Payment Amount.--For
purposes of making payments to plans under this section, each regional
alliance shall compute, under section 6201(a), a blended plan per
capita payment amount for each regional alliance health plan for
enrollment in the alliance for a year.
(b) Amount of Payment to Plans.--
(1) In general.--Subject to subsection (e) and section
6121(b)(5)(B), each regional alliance shall provide for payment
to each regional alliance health plan, in which an alliance
eligible individual is enrolled, an amount equal to the net
blended rate (described in paragraph (2)) adjusted (consistent
with subsection (c)) to take into account the relative
actuarial risk associated with the coverage with respect to the
individual.
(2) Net blended rate.--The net blended rate described in
this paragraph is the blended plan per capita payment amount
(determined under section 6201(a)), reduced by--
(A) such amount multiplied by the sum of--
(i) the administrative allowance percentage
for the regional alliance, computed by the
alliance under section 1352(b), and
(ii) 1.5 percentage points; and
(B) any plan payment reduction imposed under
section 6011 for the plan for the year.
(c) Application of Risk Adjustment and Reinsurance Methodology.--
Each regional alliance shall use the risk adjustment methodology
developed under section 1541 in making payments to regional alliance
health plans under this section, except as provided in section 1542.
(d) Application of Portion of Set Aside.--Amounts attributable to
subsection (b)(2)(A)(ii) are paid to the Federal Government (for
academic health centers and graduate medical education) under section
1353.
(e) Treatment of Veterans, Military, and Indian Health Plans and
Programs.--
(1) Veterans health plan.--In applying this subtitle (and
title VI) in the case of a regional alliance health plan that
is a veterans health plan of the Department of Veterans
Affairs, the following rules apply:
(A) For purposes of applying subtitle A of title
VI, families enrolled under the plan shall not be taken
into account.
(B) The provisions of subtitle A of title VI shall
not apply to the plan, other than such provisions as
require the plan to submit a per capita amount for each
regional alliance area on a timely basis, which amount
shall be treated as the final accepted bid of the plan
for the area for purposes of subtitle B of such title
and this subtitle. This amount shall not be subject to
negotiation and not subject to reduction under section
6011.
(C) For purposes of computing the blended plan per
capita payment amount under section 6201(a), the AFDC
and SSI proportions (under section 6202(a)) are deemed
to be 0 percent.
(2) Uniformed services health plan.--In applying this
subtitle (and title VI) in the case of a regional alliance
health plan that is a Uniformed Services Health Plan of the
Department of Defense, the following rules apply:
(A) For purposes of applying subtitle A of title
VI, families enrolled under the plan shall not be taken
into account.
(B) The provisions of subtitle A of title VI shall
not apply to the plan, other than such provisions as
require the plan to submit a per capita amount on a
timely basis, which amount shall be treated as the
final accepted bid of the plan for the area involved
for purposes of subtitle B of such title and this
subtitle. This amount shall not be subject to
negotiation and not subject to reduction under section
6011. The Board, in consultation with the Secretary of
Defense, shall establish rules relating to the area (or
areas) in which such a bid shall apply.
(C) For purposes of computing the blended plan per
capita payment amount under section 6201(a), the AFDC
and SSI proportions (under section 6202(a)) are deemed
to be 0 percent.
(3) Indian health programs.--In applying this subtitle (and
title VI) in the case of a health program of the Indian Health
Service, the following rules apply:
(A) Except as provided in this paragraph, the plan
shall not be considered or treated to be a regional
alliance health plan and for purposes of applying title
VI, families enrolled under the program shall not be
taken into account.
(B) In accordance with rules established by the
Secretary, regional alliances shall act as agents for
the collection of employer premium payments (including
payments of corporate alliance employers) required
under subtitle B of title VI with respect to qualifying
employees who are enrolled under a health program of
the Indian Health Service. The Secretary shall permit
such alliances to retain a nominal fee to compensate
them for such collection activities. In applying this
subparagraph, the family share of premium for such
employees is deemed to be zero for electing Indians (as
defined in section 1012(d)(3)) and for other employees
is the amount of the premium established under section
8306(b)(4)(A), employees are deemed to be residing in
the area of residence (or area of employment), as
specified under rules of the Secretary, and the class
of enrollment shall be such class (or classes) as
specified under rules of the Secretary.
SEC. 1352. ALLIANCE ADMINISTRATIVE ALLOWANCE PERCENTAGE.
(a) Specification by Alliance.--Before obtaining bids under section
6004 from health plans for a year, each regional alliance shall
establish the administrative allowance for the operation of the
regional alliance in the year.
(b) Administrative Allowance Percentage.--Subject to subsection
(c), the regional alliance shall compute an administrative allowance
percentage for each year equal to--
(1) the administrative allowance determined under
subsection (a) for the year, divided by
(2) the total of the amounts payable to regional alliance
health plans under subpart A (as estimated by the alliance and
determined without regard to section 1345(d)).
(c) Limitation to 2\1/2\ percent.--In no case shall an
administrative allowance percentage exceed 2.5 percent.
SEC. 1353. PAYMENTS TO THE FEDERAL GOVERNMENT FOR ACADEMIC HEALTH
CENTERS AND GRADUATE MEDICAL EDUCATION.
Each regional alliance shall make payment to the Secretary of an
amount equal to the reduction in payments by the alliance to regional
alliance health plans attributable to section 1351(b)(2)(A)(ii).
Subpart C--Financial Management
SEC. 1361. MANAGEMENT OF FINANCES AND RECORDS.
(a) In General.--Each regional alliance shall comply with standards
established under section 1571(b) (relating to the management of
finances, maintenance of records, accounting practices, auditing
procedures, and financial reporting) and under section 1591(d)
(relating to employer payments).
(b) Specific Provisions.--In accordance with such standards--
(1) Financial statements.--
(A) In general.--Each regional alliance shall
publish periodic audited financial statements.
(B) Annual financial audit.--
(i) In general.--Each regional alliance
shall have an annual financial audit conducted
by an independent auditor in accordance with
generally accepted auditing standards.
(ii) Publication.--A report on each such
audit shall be made available to the public at
nominal cost.
(iii) Required actions for deficiencies.--
If the report from such an audit does not bear
an unqualified opinion, the alliance shall take
such steps on a timely basis as may be
necessary to correct any material deficiency
identified in the report.
(C) Eligibility error rates.--Each regional
alliance shall make eligibility determinations for
premium discounts, liability reductions, and cost
sharing reductions under sections 6104 and 6123,
section 6113, and section 1371, respectively, in a
manner that maintains the error rates below an
applicable maximum permissible error rate specified by
the Secretary (or the Secretary of Labor with respect
to section 6123). In specifying such a rate, the
Secretary shall take into account maximum permissible
error rates recognized by the Federal Government under
comparable State-administered programs.
(2) Safeguarding of funds.--Each regional alliance shall
safeguard family, employer, State, and Federal government
payments to the alliance in accordance with fiduciary standards
and shall hold such payments in financial institutions and
instruments that meet standards recognized or established by
the Secretary, in consultation with the Secretaries of Labor
and the Treasury and taking into account current Federal laws
and regulations relating to fiduciary responsibilities and
financial management of public funds.
(3) Contingencies.--Each regional alliance shall provide
that any surplus of funds resulting from an estimation
discrepancy described in section 9201(e)(1), up to a reasonable
amount specified by the Secretary, shall be held in a
contingency fund established by the alliance and used to fund
any future shortfalls resulting from such a discrepancy.
(4) Auditing of employer payments.--
(A) In general.--Each regional alliance is
responsible for auditing the records of regional
alliance employers to assure that employer payments
(including the payment of amounts withheld) were made
in the appropriate amount as provided under subpart A
of part 2 of subtitle B of title VI.
(B) Employers with employees residing in different
alliance areas.--In the case of a regional alliance
employer which has employees who reside in more than
one alliance area, the Secretary of Labor, in
consultation with the Secretary, shall establish a
process for the coordination of regional alliance
auditing activities among the regional alliances
involved.
(C) Appeal.--In the case of an audit conducted by a
regional alliance on an employer under this paragraph,
an employer or other regional alliance that is
aggrieved by the determination in the audit is entitled
to review of such audit by the Secretary of Labor in a
manner to be provided by such Secretary.
Subpart D--Reductions in Cost Sharing; Income Determinations
SEC. 1371. REDUCTION IN COST SHARING FOR LOW-INCOME FAMILIES.
(a) Reduction.--
(1) In general.--Subject to subsection (b), in the case of
a family that is enrolled in a regional alliance health plan
and that is either (A) an AFDC or SSI family or (B) is
determined under this subpart to have family adjusted income
below 150 percent of the applicable poverty level, the family
is entitled to a reduction in cost sharing in accordance with
this section.
(2) Timing of reduction.--The reduction in cost sharing
shall only apply to items and services furnished after the date
the application for such reduction is approved under section
1372(c) and before the date of termination of the reduction
under this subpart, or, in the case of an AFDC or SSI family,
during the period in which the family is such a family.
(3) Information to providers and plans.--Each regional
alliance shall provide, through electronic means and otherwise,
health care providers and regional alliance health plans with
access to such information as may be necessary in order to
provide for the cost sharing reductions under this section.
(b) Limitation.--No reduction in cost sharing under subsection
(c)(1) shall be available for families residing in an alliance area if
the regional alliance for the area determines that there are sufficient
low-cost plans (as defined in section 6104(b)(3)) that are lower or
combination cost sharing plans available in the alliance area to enroll
AFDC and SSI families and families with family adjusted income below
150 percent of the applicable poverty level.
(c) Amount of Cost Sharing Reduction.--
(1) In general.--Subject to paragraph (2), the reduction in
cost sharing under this section shall be such reduction as will
reduce cost sharing to the level of a lower or combination cost
sharing plan.
(2) Special treatment of certain afdc and ssi families.--In
the case of an AFDC or SSI family enrolled in a lower or
combination cost sharing plan or receiving a reduction in cost
sharing under paragraph (1), the amount of copayment applied
with respect to an item or service (other than with respect to
hospital emergency room services for which there is no
emergency medical condition, as defined in section 1867(e)(1)
of the Social Security Act) shall be an amount equal to 20
percent of the copayment amount otherwise applicable under
sections 1135 and 1136, rounded to the nearest dollar.
(d) Administration.--
(1) In general.--In the case of an approved family (as
defined in section 1372(b)(3)) enrolled in a regional alliance
health plan, the regional alliance shall pay the plan for cost
sharing reductions (other than cost sharing reductions under
subsection (c)(2)) provided under this section and included in
payments made by the plan to its providers.
(2) Estimated payments, subject to reconciliation.--Such
payment shall be made initially on the basis of reasonable
estimates of cost sharing reductions incurred by such a plan
with respect to approved families and shall be reconciled not
less often than quarterly based on actual claims for items and
services provided.
(e) No Cost Sharing for Indians and Certain Veterans and Military
Personnel.--The provisions of section 6104(a)(3) shall apply to cost
sharing reductions under this section in the same manner as such
provisions apply to premium discounts under section 6104.
SEC. 1372. APPLICATION PROCESS FOR COST SHARING REDUCTIONS.
(a) Application.--
(1) In general.--A regional alliance eligible family may
apply for a determination of the family adjusted income of the
family, for the purpose of establishing eligibility for cost
sharing reductions under section 1371.
(2) Form.--An application under this section shall include
such information as may be determined by the regional alliance
(consistent with rules developed by the Secretary) and shall
include at least information about the family's employment
status and income.
(b) Timing.--
(1) In general.--An application under this section may be
filed at such times as the Secretary may provide, including
during any open enrollment period, at the time of a move, or
after a change in life circumstances (such as unemployment or
divorce) affecting class of enrollment or amount of family
share or repayment amount.
(2) Consideration.--Each regional alliance shall approve or
disapprove an application under this section, and notify the
applicant of such decision, within such period (specified by
the Secretary) after the date of the filing of the application.
(3) Approved family defined.--In this section and section
1371, the term ``approved family'' means a family for which an
application under this section is approved, until the date of
termination of such approval under this section.
(c) Approval of Application.--
(1) In general.--A regional alliance shall approve an
application of a family under this section filed in a month if
the application demonstrates that the family adjusted income of
the family (as defined in subsection (d) and determined under
paragraph (2)) is (or is expected to be) less than 150 percent
of the applicable poverty level.
(2) Use of current income.--In making the determination
under paragraph (1), a regional alliance shall take into
account the income for the previous 3-month period and current
wages from employment (if any), consistent with rules specified
by the Secretary.
(d) Family Adjusted Income.--
(1) In general.--Except as provided in paragraph (4), in
this Act the term ``family adjusted income'' means, with
respect to a family, the sum of the adjusted incomes (as
defined in paragraph (2)) for all members of the family
(determined without regard to section 1012).
(2) Adjusted income.--In paragraph (1), the term ``adjusted
income'' means, with respect to an individual, adjusted gross
income (as defined in section 62(a) of the Internal Revenue
Code of 1986)--
(A) determined without regard to sections 135,
162(l), 911, 931, and 933 of such Code, and
(B) increased by the amount of interest received or
accrued by the individual which is exempt from tax.
(3) Presence of additional dependents.--At the option of an
individual, a family may include (and not be required to
separate out) the income of other individuals who are claimed
as dependents of the family for income tax purposes, but such
individuals shall not be counted as part of the family for
purposes of determining the size of the family.
(e) Requirement for Periodic Confirmation and Verification and
Notices.--
(1) Confirmation and verification requirement.--The
continued eligibility of a family for cost sharing reductions
under this section is conditioned upon the family's eligibility
being--
(A) confirmed periodically by the regional
alliance, and
(B) verified (through the filing of a new
application under this section) by the regional
alliance at the time income reconciliation statements
are required to be filed under section 1375.
(2) Rules.--The Secretary shall issue rules related to the
manner in which alliances confirm and verify eligibility under
this section.
(3) Notices of changes in income and employment status.--
(A) In general.--Each approved family shall
promptly notify the regional alliance of any material
increase (as defined by the Secretary) in the family
adjusted income.
(B) Response.--If a regional alliance receives
notice under subparagraph (A) (or from an employer
under section 1602(b)(3)(A)(i)) or otherwise receives
information indicating a potential significant change
in the family's employment status or increase in
adjusted family income, the regional alliance shall
promptly take steps necessary to reconfirm the family's
eligibility.
(f) Termination of Cost Sharing Reduction.--The regional alliance
shall, after notice to the family, terminate the reduction of cost
sharing under this subpart for an approved family if the family fails
to provide for confirmation or verification or notice required under
subsection (c) on a timely basis or the alliance otherwise determines
that the family is no longer eligible for such reduction. The previous
sentence shall not prevent the family from subsequently reapplying for
cost sharing reduction under this section.
(g) Treatment of AFDC and SSI Recipients.--
(1) No application required.--AFDC and SSI families are not
required to make an application under this section.
(2) Notice requirement.--Each State (and the Secretary)
shall notify each regional alliance, in a manner specified by
the Secretary, of the identity (and period of eligibility under
the AFDC or SSI programs) of each AFDC and SSI recipient,
unless such a recipient elects (in a manner specified by the
Secretary) not to accept the reduction of cost sharing under
this section.
SEC. 1373. APPLICATION FOR PREMIUM DISCOUNTS AND REDUCTION IN
LIABILITIES TO ALLIANCES.
(a) In General.--Any regional alliance eligible family may apply
for a determination of the family adjusted income of the family, for
the purpose of establishing eligibility for a premium discount under
section 6104 or a reduction in liability under section 6113.
(b) Timing.--Such an application may be filed at such times as an
application for a cost sharing reduction may be filed under section
1372(b) and also may be filed after the end of the year to obtain a
rebate for excess premium payments made during a year.
(c) Approval of Application.--
(1) In general.--A regional alliance shall approve an
application of a family under this section filed in a month--
(A) for a premium discount under section 6104, if
the application demonstrates that family adjusted
income of the family (as determined under paragraph
(2)) is (or is expected to be) less than 150 percent of
the applicable poverty level, or
(B) for a reduction in liability under section
6113, if the application demonstrates that the wage-
adjusted income (as defined in subsection 6113(d)) of
the family (as determined under paragraph (2)) is (or
is expected to be) less than 250 percent of the
applicable poverty level.
(2) Use of current income.--In making the determination
under paragraph (1), a regional alliance shall take into
account the income for the previous 3-month period and current
wages from employment (if any) and the statement of estimated
income for the year (filed under section 1374(c)), consistent
with rules specified by the Secretary.
(d) Requirement for Periodic Confirmation and Verification and
Notices.--The provisions of subsection (e) of section 1372 shall apply
under this section in the same manner as it applies under such section,
except that any reference to family adjusted income is deemed a
reference to wage-adjusted income.
SEC. 1374. GENERAL PROVISIONS RELATING TO APPLICATION PROCESS.
(a) Distribution of Applications.--Each regional alliance shall
distribute applications under this subpart directly to consumers and
through employers, banks, and designated public agencies.
(b) To Whom Application Made.--Applications under this subpart
shall be filed, by person or mail, with a regional alliance or an
agency designated by the State for this purpose. The application may be
submitted with an application to enroll with a health plan under this
subtitle or separately.
(c) Income Statement.--Each application shall include a declaration
of estimated annual income for the year involved.
(d) Form and Contents.--An application for a discount or reduction
under this subpart shall be in a form and manner specified by the
Secretary and shall require the provision of information necessary to
make the determinations required under this subpart.
(e) Frequency of Applications.--
(1) In general.--An application under this subpart may be
filed at any time during the year (including, in the case of
section 1373, during the reconciliation process).
(2) Correction of income.--Nothing in paragraph (1) shall
be construed as preventing an individual or family from, at any
time, submitting an application to reduce the amount of premium
discount or reduction of liability under this subpart based
upon an increase in income from that stated in the previous
application.
(f) Timing of Reductions and Discounts.--
(1) In general.--Subject to reconciliation under section
1375, premium discounts and cost sharing reductions under this
subpart shall be applied to premium payments required (and for
expenses incurred) after the date of approval of the
application under this subpart.
(2) AFDC and ssi recipients.--In the case of an AFDC or SSI
family, in applying paragraph (1), the date of approval of
benefits under the AFDC or SSI program shall be considered the
date of approval of an application under this subpart.
(g) Verification.--The Secretary shall provide for verification, on
a sample basis or other basis, of the information supplied in
applications under this part. This verification shall be separate from
the reconciliation provided under section 1375.
(h) Help in Completing Applications.--Each regional alliance shall
assist individuals in the filing of applications and income
reconciliation statements under this subpart.
(i) Penalties for Inaccurate Information.--
(1) Interest for understatements.--Each individual who
knowingly understates income reported in an application to a
regional alliance under this subpart or otherwise makes a
material misrepresentation of information in such an
application shall be liable to the alliance for excess payments
made based on such understatement or misrepresentation, and for
interest on such excess payments at a rate specified by the
Secretary.
(2) Penalties for misrepresentation.--In addition to the
liability established under paragraph (1), each individual who
knowingly misrepresents material information in an application
under this subpart to a regional alliance shall be liable to
the State in which the alliance is located for $2,000 or, if
greater, three times the excess payments made based on such
misrepresentation. The State shall provide for the transfer of
a significant portion of such amount to the regional alliance
involved.
SEC. 1375. END-OF-YEAR RECONCILIATION FOR PREMIUM DISCOUNT AND
REPAYMENT REDUCTION WITH ACTUAL INCOME.
(a) In General.--In the case of a family whose application for a
premium discount or reduction of liability for a year has been approved
before the end of the year under this subpart, the family shall,
subject to subsection (c) and by the deadline specified in section
1344(b) file with the regional alliance an income reconciliation
statement to verify the family's adjusted income or wage-adjusted
income, as the case may be, for the previous year. Such a statement
shall contain such information as the Secretary may specify. Each
regional alliance shall coordinate the submission of such statements
with the notice and payment of family payments due under section 1344.
(b) Reconciliation of Premium Discount and Liability Assistance
Based on Actual Income.--Based on and using the income reported in the
reconciliation statement filed under subsection (a) with respect to a
family, the regional alliance shall compute the amount of premium
discount or reduction in liability that should have been provided under
section 6104 or section 6113 with respect for the family for the year
involved. If the amount of such discount or liability reduction
computed is--
(1) greater than the amount that has been provided, the
family is liable to the regional alliance to pay (directly or
through an increase in future family share of premiums or other
payments) a total amount equal to the amount of the excess
payment, or
(2) less than the amount that has been provided, the
regional alliance shall pay to the family (directly or through
a reduction in future family share of premiums or other
payments) a total amount equal to the amount of the deficit.
(c) No Reconciliation for AFDC and SSI Families; No Reconciliation
for Cost Sharing Reductions.--No reconciliation statement is required
under this section--
(1) with respect to cost sharing reductions provided under
section 1372, or
(2) for a family that only claims a premium discount or
liability reduction under this subpart on the basis of being an
AFDC or SSI family.
(d) Disqualification for Failure to File.--In the case of any
family that is required to file a statement under this section in a
year and that fails to file such a statement by the deadline specified,
members of the family shall not be eligible for premium reductions
under section 6104 or reductions in liability under section 6113 until
such statement is filed. A regional alliance, using rules established
by the Secretary, shall waive the application of this subsection if the
family establishes, to the satisfaction of the alliance under such
rules, good cause for the failure to file the statement on a timely
basis.
(e) Penalties for False Information.--Any individual that provides
false information in a statement under subsection (a) is subject to the
same liabilities as are provided under section 1374(h) for a
misrepresentation of material fact described in such section.
(f) Notice of Requirement.--Each regional alliance (directly or in
coordination with other regional alliances) shall provide for written
notice, at the end of each year, of the requirement of this section to
each family which had received premium discount or reduction in
liability under this subpart in any month during the preceding year and
to which such requirement applies.
(g) Transmittal of Information; Verification.--
(1) In general.--Each participating State shall transmit
annually to the Secretary such information relating to the
income of families for the previous year as the Secretary may
require to verify such income under this subpart.
(2) Verification.--Each participating State may use such
information as it has available to it to assist regional
alliances in verifying income of families with applications
filed under this subpart. The Secretary of the Treasury may,
consistent with section 6103 of the Internal Revenue Code of
1986, permit return information to be disclosed and used by a
participating State in verifying such income but only in
accordance with such section and only if the information is not
directly disclosed to a regional alliance.
(h) Construction.--Nothing in this section shall be construed as
authorizing reconciliation of any cost sharing reduction provided under
this subpart.
PART 4--RESPONSIBILITIES AND AUTHORITIES OF CORPORATE ALLIANCES
SEC. 1381. CONTRACTS WITH HEALTH PLANS.
(a) Contracts with Plans.--Subject to section 1382, each corporate
alliance may--
(1) offer to individuals eligible to enroll under section
1311(c) coverage under an appropriate self-insured health plan
(as defined in section 1400(b)), or
(2) negotiate with a State-certified health plan to enter
into a contract with the plan for the enrollment of such
individuals under the plan,
or do both.
(b) Terms of Contracts with State-Certified Health Plans.--
Contracts under this section between a corporate alliance and a State-
certified health plan may contain such provisions (not inconsistent
with the requirements of this title) as the alliance and plan may
provide, except that in no case does such contract remove the
obligation of the sponsor of the corporate alliance to provide for
health benefits to corporate alliance eligible individuals consistent
with this part.
SEC. 1382. OFFERING CHOICE OF HEALTH PLANS FOR ENROLLMENT.
(a) In General.--Each corporate alliance must provide to each
eligible enrollee with respect to the alliance a choice of health plans
among the plans which have contracts with the alliance under section
1381.
(b) Offering of Plans by Alliances.--A corporate alliance shall
include among its health plan offerings for any eligible enrollee at
least 3 health plans to enrollees, of which the alliance must offer--
(1) at least one fee-for-service plan (as defined in
section 1322(b)(2)); and
(2) at least two health plans that are not fee-for-service
plans.
SEC. 1383. ENROLLMENT; ISSUANCE OF HEALTH SECURITY CARD.
(a) In General.--
(1) Enrollment of alliance eligible individuals.--Each
corporate alliance shall assure that each alliance eligible
individual with respect to the alliance is enrolled in a
corporate alliance health plan offered by the alliance, and
shall establish and maintain methods and procedures consistent
with this section sufficient to assure such enrollment. Such
methods and procedures shall assure the enrollment of such
individuals at the time they first become alliance eligible
individuals with respect to the alliance.
(2) Issuance of health security cards.--A corporate
alliance is responsible for the issuance of health security
cards to corporate alliance eligible individuals under section
1001(b).
(b) Response to Point-of-Service Notices.--If a corporate alliance
is notified under section 1323(b)(2) regarding an individual who has
received services and appears to be a corporate alliance eligible
individual--
(1) the alliance shall promptly ascertain the individual's
eligibility as a corporate alliance eligible individual; and
(2) if the alliance determines that the individual is a
corporate alliance eligible individual--
(A) the alliance shall promptly provide for the
enrollment of the individual in a health plan offered
by the alliance (and notify the Secretary of Labor of
such enrollment), and
(B) the alliance shall forward the claim for
payment for the services to the health plan in which
the individual is so enrolled and the plan shall make
payment to the provider for such claim (in a manner
consistent with requirements of the Secretary of
Labor).
(c) Annual Open Enrollment; Enrollment of Family Members;
Oversubscription of Plans.--The provisions of subsections (d) through
(f) of section 1323 shall apply to a corporate alliance in the same
manner as such provisions apply to a regional alliance.
(d) Termination.--
(1) In general.--The provisions of section 1323(g)(1) shall
apply to a corporate alliance in the same manner as such
provisions apply to a regional alliance.
(2) Failure to pay premiums.--If a corporate alliance fails
to make premium payments to a health plan, the plan, after
reasonable written notice to the alliance and the Secretary of
Labor, may terminate coverage (and any contract with the
alliance under this part). If such coverage is terminated the
corporate alliance is responsible for the prompt enrollment of
alliance eligible individuals whose coverage is terminated in
another corporate alliance health plan.
(e) Corporate Alliance Transition.--Each corporate alliance must
provide coverage--
(1) as of the first day of any month in which an individual
first becomes a corporate alliance eligible individual, and
(2) through the end of the month in the case of a corporate
alliance eligible individual who loses such eligibility during
the month.
SEC. 1384. COMMUNITY-RATED PREMIUMS WITHIN PREMIUM AREAS.
(a) Application of Community-Rated Premiums.--The premiums charged
by a corporate alliance for enrollment in a corporate alliance health
plan (not taking into account any employer premium payment required
under section 6131) shall vary only by class of family enrollment
(specified in section 1011(c)) and by premium area.
(b) Designation of Premium Areas.--
(1) Designation.--Each corporate alliance shall designate
premium areas to be used for the imposition of premiums (and
calculation of employer premium payments) under this Act.
(2) Conditions.--The boundaries of such areas shall
reasonably reflect labor market areas or health care delivery
areas and shall be consistent with rules the Secretary of Labor
establishes (consistent with paragraph (3)) so that within such
areas there are not substantial differences in average per
capita health care expenditures.
(3) Anti-redlining.--The provisions of paragraphs (4) and
(5) of section 1202(b) (relating to redlining and metropolitan
statistical areas) shall apply to the establishment of premium
areas in the same manner as they apply to the establishment of
the boundaries of regional alliance areas.
(c) Applications of Classes of Enrollment.--
(1) In general.--The premiums shall be applied under this
section based on class of family enrollment and shall vary
based on such class in accordance with factors specified by the
corporate alliance.
(2) Basis for factors.--Such factors shall be the same in
each premium area and shall take into account such appropriate
considerations (including the considerations the Board takes
into account in the establishment of premium class factors
under section 1531 and the costs of regional alliance health
plans providing the comprehensive benefit package for families
enrolled in the different classes) as the alliance considers
appropriate, consistent with rules the Secretary of Labor
establishes.
(d) Special Treatment of Multiemployer Alliances.--The Secretary of
Labor shall provide for such exceptions to the requirements of this
section in the case of a corporate alliance with a sponsor described in
section 1311(b)(1)(B) as may be appropriate to reflect the unique and
historical relationship between the employers and employees under such
alliances.
SEC. 1385. ASSISTANCE FOR LOW-WAGE FAMILIES.
Each corporate alliance shall make an additional contribution
towards the enrollment in health plans of the alliance by certain low-
wage families in accordance with section 6131(b)(2).
SEC. 1386. CONSUMER INFORMATION AND MARKETING; DATA COLLECTION AND
QUALITY; ADDITIONAL DUTIES.
The provisions of sections 1325(a), 1327, and 1328 shall apply to a
corporate alliance in the same manner as such provisions apply to a
regional alliance.
SEC. 1387. PLAN AND INFORMATION REQUIREMENTS.
(a) In General.--A corporate alliance shall provide a written
submission to the Secretary of Labor (in such form as the Secretary may
require) detailing how the corporate alliance will carry out its
activities under this part.
(b) Annual Information.--A corporate alliance shall provide to the
Secretary of Labor each year, in such form and manner as the Secretary
may require, such information as the Secretary may require in order to
monitor the compliance of the alliance with the requirements of this
part.
(c) Annual Notice of Employees or Participants.--
(1) Corporate alliance.--Each corporate alliance shall
submit to the Secretary of Labor, by not later than March 1 of
each year, information on the number of full-time employees or
participants obtaining coverage through the alliance as of
January 1 of that year.
(2) Employers that become large employers.--Each employer
that is not a corporate alliance but employs 5,000 full-time
employees as of January 1 of a year, shall submit to the
Secretary of Labor, by not later than March 1 of the year,
information on the number of such employees.
SEC. 1388. MANAGEMENT OF FUNDS; RELATIONS WITH EMPLOYEES.
(a) Management of Funds.--The management of funds by a corporate
alliance shall be subject to the applicable fiduciary requirements of
part 4 of subtitle B of title I of the Employee Retirement Income
Security Act of 1974, together with the applicable enforcement
provisions of part 5 of subtitle B of title I of such Act.
(b) Management of Finances and Records; Accounting System.--Each
corporate alliance shall comply with standards relating to the
management of finances and records and accounting systems as the
Secretary of Labor shall specify.
SEC. 1389. COST CONTROL.
Each corporate alliance shall control covered expenditures in a
manner that meets the requirements of part 2 of subtitle A of title VI.
SEC. 1390. PAYMENTS BY CORPORATE ALLIANCE EMPLOYERS TO CORPORATE
ALLIANCES.
(a) Large Employer Alliances.--In the case of a corporate alliance
with a sponsor described in section 1311(b)(1)(A), the sponsor shall
provide for the funding of benefits, through insurance or otherwise,
consistent with section 6131, the applicable solvency requirements of
sections 1394, 1395, and 1396, and any rules established by the
Secretary of Labor.
(b) Other Alliances.--In the case of a corporate alliance with a
sponsor described in subparagraph (B) or (C) of section 1311(b)(1), a
corporate alliance employer shall make payment of the employer premiums
required under section 6131 under rules established by the corporate
alliance, which rules shall be consistent with rules established by the
Secretary of Labor.
SEC. 1391. COORDINATION OF PAYMENTS.
(a) Payments of Certain Amounts to Regional Alliances.--In the case
of a married couple in which one spouse is a qualifying employee of a
regional alliance employer and the other spouse is a qualifying
employee of a corporate alliance employer, if the couple is enrolled
with a regional alliance health plan, the corporate alliance (which
receives employer premium payments from such corporate alliance
employer with respect to such employee) shall pay to the regional
alliance the amounts so paid.
(b) Payments of Certain Amounts to Corporate Alliances.--In the
case of a married couple in which one spouse is a qualifying employee
of a corporate alliance employer and the other spouse is a qualifying
employee of another corporate alliance employer, the corporate alliance
of the corporate alliance health plan in which the couple is not
enrolled shall pay to the corporate alliance of the plan in which the
couple is enrolled any employer premium payments received from such
corporate alliance employer with respect to such employee.
SEC. 1392. APPLICABILITY OF ERISA ENFORCEMENT MECHANISMS FOR
ENFORCEMENT OF CERTAIN REQUIREMENTS.
The provisions of sections 502 (relating to civil enforcement) and
504 (relating to investigative authority) of the Employee Retirement
Income Security Act of 1974 shall apply to enforcement by the Secretary
of Labor of this part in the same manner and to same extent as such
provisions apply to enforcement of title I of such Act.
SEC. 1393. APPLICABILITY OF CERTAIN ERISA PROTECTIONS TO ENROLLED
INDIVIDUALS.
The provisions of sections 510 (relating to interference with
rights protected under Act) and 511 (relating to coercive interference)
of the Employee Retirement Income Security Act of 1974 shall apply, in
relation to the provisions of this Act, with respect to individuals
enrolled under corporate alliance health plans in the same manner and
to the same extent as such provisions apply, in relation to the
provisions of the Employee Retirement Income Security Act of 1974, with
respect to participants and beneficiaries under employee welfare
benefit plans covered by title I of such Act.
SEC. 1394. DISCLOSURE AND RESERVE REQUIREMENTS.
(a) In General.--The Secretary of Labor shall ensure that each
corporate alliance health plan which is a self-insured plan maintains
plan assets in trust as provided in section 403 of the Employee
Retirement Income Security Act of 1974--
(1) without any exemption under section 403(b)(4) of such
Act, and
(2) in amounts which the Secretary determines are
sufficient to provide at any time for payment to health care
providers of all outstanding balances owed by the plan at such
time.
The requirements of the preceding sentence may be met through letters
of credit, bonds, or other appropriate security to the extent provided
in regulations of the Secretary.
(b) Disclosure.--Each self-insured corporate alliance health plan
shall notify the Secretary at such time as the financial reserve
requirements of this section are not being met. The Secretary may
assess a civil money penalty of not more than $100,000 against any
corporate alliance for any failure to provide such notification in such
form and manner and within such time periods as the Secretary may
prescribe by regulation.
SEC. 1395. TRUSTEESHIP BY THE SECRETARY OF INSOLVENT CORPORATE ALLIANCE
HEALTH PLANS.
(a) Appointment of Secretary as Trustee for Insolvent Plans.--
Whenever the Secretary of Labor determines that a corporate alliance
health plan which is a self-insured plan will be unable to provide
benefits when due or is otherwise in a financially hazardous condition
as defined in regulations of the Secretary, the Secretary shall, upon
notice to the plan, apply to the appropriate United States district
court for appointment of the Secretary as trustee to administer the
plan for the duration of the insolvency. The plan may appear as a party
and other interested persons may intervene in the proceedings at the
discretion of the court. The court shall appoint the Secretary trustee
if the court determines that the trusteeship is necessary to protect
the interests of the enrolled individuals or health care providers or
to avoid any unreasonable deterioration of the financial condition of
the plan or any unreasonable increase in the liability of the Corporate
Alliance Health Plan Insolvency Fund. The trusteeship of the Secretary
shall continue until the conditions described in the first sentence of
this subsection are remedied or the plan is terminated.
(b) Powers as Trustee.--The Secretary of Labor, upon appointment as
trustee under subsection (a), shall have the power--
(1) to do any act authorized by the plan, this Act, or
other applicable provisions of law to be done by the plan
administrator or any trustee of the plan,
(2) to require the transfer of all (or any part) of the
assets and records of the plan to the Secretary as trustee,
(3) to invest any assets of the plan which the Secretary
holds in accordance with the provisions of the plan,
regulations of the Secretary, and applicable provisions of law,
(4) to do such other acts as the Secretary deems necessary
to continue operation of the plan without increasing the
potential liability of the Corporate Alliance Health Plan
Insolvency Fund, if such acts may be done under the provisions
of the plan,
(5) to require the corporate alliance, the plan
administrator, any contributing employer, and any employee
organization representing covered individuals to furnish any
information with respect to the plan which the Secretary as
trustee may reasonably need in order to administer the plan,
(6) to collect for the plan any amounts due the plan and to
recover reasonable expenses of the trusteeship,
(7) to commence, prosecute, or defend on behalf of the plan
any suit or proceeding involving the plan,
(8) to issue, publish, or file such notices, statements,
and reports as may be required under regulations of the
Secretary or by any order of the court,
(9) to terminate the plan and liquidate the plan assets in
accordance with applicable provisions of this Act and other
provisions of law, to restore the plan to the responsibility of
the corporate alliance, or to continue the trusteeship,
(10) to provide for the enrollment of individuals covered
under the plan in an appropriate regional alliance health plan,
and
(11) to do such other acts as may be necessary to comply
with this Act or any order of the court and to protect the
interests of enrolled individuals and health care providers.
(c) Notice of Appointment.--As soon as practicable after the
Secretary's appointment as trustee, the Secretary shall give notice of
such appointment to--
(1) the plan administrator,
(2) each enrolled individual,
(3) each employer who may be liable for contributions to
the plan, and
(4) each employee organization which, for purposes of
collective bargaining, represents enrolled individuals.
(d) Additional Duties.--Except to the extent inconsistent with the
provisions of this Act or part 4 of subtitle B of title I of the
Employee Retirement Income Security Act of 1974, or as may be otherwise
ordered by the court, the Secretary of Labor, upon appointment as
trustee under this section, shall be subject to the same duties as
those of a trustee under section 704 of title 11, United States Code,
and shall have the duties of a fiduciary for purposes of such part 4.
(e) Other Proceedings.--An application by the Secretary of Labor
under this subsection may be filed notwithstanding the pendency in the
same or any other court of any bankruptcy, mortgage foreclosure, or
equity receivership proceeding, or any proceeding to reorganize,
conserve, or liquidate such plan or its property, or any proceeding to
enforce a lien against property of the plan.
(f) Jurisdiction of Court.--
(1) In general.--Upon the filing of an application for the
appointment as trustee or the issuance of a decree under this
subsection, the court to which the application is made shall
have exclusive jurisdiction of the plan involved and its
property wherever located with the powers, to the extent
consistent with the purposes of this subsection, of a court of
the United States having jurisdiction over cases under chapter
11 of title 11, United States Code. Pending an adjudication
under this section such court shall stay, and upon appointment
by it of the Secretary of Labor as trustee, such court shall
continue the stay of, any pending mortgage foreclosure, equity
receivership, or other proceeding to reorganize, conserve, or
liquidate the plan, the sponsoring alliance, or property of
such plan or alliance, and any other suit against any receiver,
conservator, or trustee of the plan, the sponsoring alliance,
or property of the plan or alliance. Pending such adjudication
and upon the appointment by it of the Secretary as trustee, the
court may stay any proceeding to enforce a lien against
property of the plan or the sponsoring alliance or any other
suit against the plan or the alliance.
(2) Venue.--An action under this subsection may be brought
in the judicial district where the plan administrator resides
or does business or where any asset of the plan is situated. A
district court in which such action is brought may issue
process with respect to such action in any other judicial
district.
(g) Personnel.--In accordance with regulations of the Secretary of
Labor, the Secretary shall appoint, retain, and compensate accountants,
actuaries, and other professional service personnel as may be necessary
in connection with the Secretary's service as trustee under this
section.
SEC. 1396. GUARANTEED BENEFITS UNDER TRUSTEESHIP OF THE SECRETARY.
(a) In General.--Subject to subsection (b), the Secretary of Labor
shall guarantee the payment of all benefits under a corporate alliance
health plan which is a self-insured plan while such plan is under the
Secretary's trusteeship under section 1395.
(b) Limitations.--Any increase in the amount of benefits under the
plan resulting from a plan amendment which was made, or became
effective, whichever is later, within 180 days (or such other
reasonable time as may be prescribed in regulations of the Secretary of
Labor) before the date of the Secretary's appointment as trustee of the
plan shall be disregarded for purposes of determining the guarantee
under this section.
(c) Corporate Alliance Health Plan Insolvency Fund.--
(1) Establishment.--The Secretary of Labor shall establish
a Corporate Alliance Health Plan Insolvency Fund (hereinafter
in this part referred to as the ``Fund'') from which the
Secretary shall authorize payment of all guaranteed benefits
under this section.
(2) Receipts and disbursements.--
(A) Receipts.--The Fund shall be credited with--
(i) funds borrowed under paragraph (3),
(ii) assessments collected under section
1397, and
(iii) earnings on investment of the Fund.
(B) Disbursements.--The Fund shall be available--
(i) for making such payments as the
Secretary of Labor determines are necessary to
pay benefits guaranteed under this section,
(ii) to repay the Secretary of the Treasury
such sums as may be borrowed (together with
interest thereon) under paragraph (3), and
(iii) to pay the operational and
administrative expenses of the Fund.
(3) Borrowing authority.--At the direction of the Secretary
of Labor, the Fund may, to the extent necessary to carry out
the purposes of paragraph (1), issue to the Secretary of the
Treasury notes or other obligations, in such forms and
denominations, bearing such maturities, and subject to such
terms and conditions as may be prescribed by the Secretary of
the Treasury. The total balance of the Fund obligations
outstanding at any time shall not exceed $500,000,000. Such
notes or other obligations shall bear interest at a rate
determined by the Secretary of the Treasury, taking into
consideration the current average market yield on outstanding
marketable obligations of the United States of comparable
maturities during the month preceding the issuance of such
notes or other obligations by the Fund. The Secretary of the
Treasury shall purchase any notes or other obligations issued
by the Fund under this paragraph, and for that purpose the
Secretary of the Treasury may use as a public debt transaction
the proceeds from the sale of any securities issued under
chapter 31 of title 31, United States Code and the purposes for
which securities may be issued under such chapter are extended
to include any purchase of such notes and obligations. The
Secretary of the Treasury may at any time sell any of the notes
or other obligations acquired by such Secretary under this
paragraph. All redemptions, purchases, and sales by the
Secretary of the Treasury of such notes or other obligations
shall be treated as public debt transactions of the United
States.
(4) Investment authority.--Whenever the Secretary of Labor
determines that the moneys of the Fund are in excess of current
needs, such Secretary may request the investment of such
amounts as such Secretary determines advisable by the Secretary
of the Treasury in obligations issued or guaranteed by the
United States, but, until all borrowings under paragraph (3)
have been repaid, the obligations in which such excess moneys
are invested may not yield a rate of return in excess of the
rate of interest payable on such borrowings.
SEC. 1397. IMPOSITION AND COLLECTION OF PERIODIC ASSESSMENTS ON SELF-
INSURED CORPORATE ALLIANCE PLANS.
(a) Imposition of Assessments.--Upon a determination that
additional receipts to the Fund are necessary in order to enable the
Fund to repay amounts borrowed by the Fund under section 1396(c)(3)
while maintaining a balance sufficient to ensure the solvency of the
Fund, the Secretary of Labor may impose assessments under this section.
The Secretary shall prescribe from time to time such schedules of
assessment rates and bases for the application of such rates as may be
necessary to provide for such repayments.
(b) Uniformity of Assessments.--The assessment rates so prescribed
by the Secretary for any period shall be uniform for all plans, except
that the Secretary may vary the amount of such assessments by category,
or waive the application of such assessments by category, taking into
account differences in the financial solvency of, and financial
reserves maintained by, plans in each category.
(c) Limitation on Amount of Assessment.--The total amount assessed
against a corporate alliance health plan under this section during a
year may not exceed 2 percent of the total premiums paid to the plan
with respect to corporate alliance eligible individuals enrolled with
the plan during the year.
(d) Payment of Assessments.--
(1) Obligation to pay.--The designated payor of each plan
shall pay the assessments imposed by the Secretary of Labor
under this section with respect to that plan when they are due.
Assessments under this section are payable at the time, and on
an estimated, advance, or other basis, as determined by the
Secretary. Assessments shall continue to accrue until the
plan's assets are distributed pursuant to a termination
procedure or the Secretary is appointed to serve as trustee of
the plan under section 1395.
(2) Late payment charges and interest.--
(A) Late payment charges.--If any assessment is not
paid when it is due, the Secretary of Labor may assess
a late payment charge of not more than 100 percent of
the assessment payment which was not timely paid.
(B) Waivers.--Subparagraph (A) shall not apply to
any assessment payment made within 60 days after the
date on which payment is due, if before such date, the
designated payor obtains a waiver from the Secretary of
Labor based upon a showing of substantial hardship
arising from the timely payment of the assessment. The
Secretary may grant a waiver under this subparagraph
upon application made by the designated payor, but the
Secretary may not grant a waiver if it appears that the
designated payor will be unable to pay the assessment
within 60 days after the date on which it is due.
(C) Interest.--If any assessment is not paid by the
last date prescribed for a payment, interest on the
amount of such assessment at the rate imposed under
section 6601(a) of the Internal Revenue Code of 1986
shall be paid for the period from such last date to the
date paid.
(e) Civil Action upon Nonpayment.--If any designated payor fails to
pay an assessment when due, the Secretary of Labor may bring a civil
action in any district court of the United States within the
jurisdiction of which the plan assets are located, the plan is
administered, or in which a defendant resides or is found, for the
recovery of the amount of the unpaid assessment, any late payment
charge, and interest, and process may be served in any other district.
The district courts of the United States shall have jurisdiction over
actions brought under this subsection by the Secretary without regard
to the amount in controversy.
(f) Guarantee Held Harmless.--The Secretary of Labor shall not
cease to guarantee benefits on account of the failure of a designated
payor to pay any assessment when due.
(g) Designated Payor Defined.--
(1) In general.--For purposes of this section, the term
``designated payor'' means--
(A) the employer or plan administrator in any case
in which the eligible sponsor of the corporate alliance
health plan is described in subparagraph (A) of section
1311(b)(1); and
(B) the contributing employers or the plan
administrator in any case in which the eligible sponsor
of the corporate alliance is described in subparagraph
(B) or (C) of section 1311(b)(1).
(2) Controlled groups.--If an employer is a member of a
controlled group, each member of such group shall be jointly
and severally liable for any assessments required to be paid by
such employer. For purposes of the preceding sentence, the term
``controlled group'' means any group treated as a single
employer under subsection (b), (c), (m), or (o) of section 414
of the Internal Revenue Code of 1986.
SEC. 1398. PAYMENTS TO FEDERAL GOVERNMENT BY MULTIEMPLOYER CORPORATE
ALLIANCES FOR ACADEMIC HEALTH CENTERS AND GRADUATE
MEDICAL EDUCATION.
(a) In General.--A corporate alliance with an eligible sponsor
described in section 1311(b)(1)(B) shall make payment to the Secretary
of an amount equivalent to the amount (as estimated based on rules
established by the Secretary and based on the annual per capita
expenditure equivalent calculated under section 6021) that would have
been payable by the alliance under section 1353 if the alliance were a
regional alliance.
(b) Reference to Exemption from Assessment.--For provision
exempting certain corporate alliance employers participating in an
alliance described in subsection (a) from an assessment under section
3461 of the Internal Revenue Code of 1986, as added by section 7121 of
this Act, see section 3461(c)(1) of such Code.
Title I, Subtitle E
Subtitle E--Health Plans
SEC. 1400. HEALTH PLAN DEFINED.
(a) In General.--In this Act, the term ``health plan'' means a plan
that provides the comprehensive benefit package and meets the
requirements of parts 1, 3, and 4 applicable to health plans.
(b) Appropriate Self-Insured Health Plan.--In this Act, the term
``appropriate self-insured health plan'' means a group health plan (as
defined in section 3(42) of the Employee Retirement Income Security Act
of 1974) which is a self-insured health plan and with respect to which
the applicable requirements of title I of the Employee Retirement
Income Security Act of 1974 are met.
(c) State-Certified Health Plan.--In this Act, the term ``State-
certified health plan'' means a health plan that has been certified by
a State under section 1203(a) (or, in the case in which the Board is
exercising certification authority under section 1522(b), that has been
certified by the Board).
(d) Applicable Regulatory Authority Defined.--In this subtitle, the
term ``applicable regulatory authority'' means--
(1) with respect to a self-insured health plan, the
Secretary of Labor, or
(2) with respect to a State-certified health plan, the
State authority responsible for certification of the plan.
PART 1--REQUIREMENTS RELATING TO COMPREHENSIVE BENEFIT PACKAGE
SEC. 1401. APPLICATION OF REQUIREMENTS.
No plan shall be treated under this Act as a health plan--
(1) unless the plan is a self-insured plan or a State-
certified plan; or
(2) on and after the effective date of a finding by the
applicable regulatory authority that the plan has failed to
comply with such applicable requirements.
SEC. 1402. REQUIREMENTS RELATING TO ENROLLMENT AND COVERAGE.
(a) No Underwriting.--
(1) In general.--Subject to paragraph (2), each health plan
offered by a regional alliance or a corporate alliance must
accept for enrollment every alliance eligible individual who
seeks such enrollment. No plan may engage in any practice that
has the effect of attracting or limiting enrollees on the basis
of personal characteristics, such as health status, anticipated
need for health care, age, occupation, or affiliation with any
person or entity.
(2) Capacity limitations.--With the approval of the
applicable regulatory authority, a health plan may limit
enrollment because of the plan's capacity to deliver services
or to maintain financial stability. If such a limitation is
imposed, the limitation may not be imposed on a basis referred
to in paragraph (1).
(b) No Limits on Coverage; No Pre-Existing Condition Limits.--A
health plan may not--
(1) terminate, restrict, or limit coverage for the
comprehensive benefit package in any portion of the plan's
service area for any reason, including nonpayment of premiums;
(2) cancel coverage for any alliance eligible individual
until that individual is enrolled in another applicable health
plan;
(3) exclude coverage of an alliance eligible individual
because of existing medical conditions;
(4) impose waiting periods before coverage begins; or
(5) impose a rider that serves to exclude coverage of
particular eligible individuals.
(c) Antidiscrimination.--
(1) In general.--No health plan may discriminate, or engage
(directly or through contractual arrangements) in any activity,
including the selection of a service area, that has the effect
of discriminating, against an individual on the basis of race,
national origin, sex, language, socio-economic status, age,
disability, health status, or anticipated need for health
services.
(2) Selection of providers for plan network.--In selecting
among providers of health services for membership in a provider
network, or in establishing the terms and conditions of such
membership, a health plan may not engage in any practice that
has the effect of discriminating against a provider--
(A) based on the race, national origin, sex,
language, age, or disability of the provider; or
(B) based on the socio-economic status, disability,
health status, or anticipated need for health services
of a patient of the provider.
(3) Business necessity.--Except in the case of intentional
discrimination, it shall not be a violation of this subsection,
or of any regulation issued under this subsection, for any
person to take any action otherwise prohibited under this
subsection, if the action is required by business necessity.
(4) Regulations.--Not later than 1 year after the date of
the enactment of this Act, the Secretary of Health and Human
Services shall issue regulations to carry out this subsection.
(d) Requirements for Plans Offering Lower Cost Sharing.--Each
health plan that offers enrollees the lower cost sharing schedule
referred to in section 1131--
(1) shall apply such schedule to all items and services in
the comprehensive benefit package;
(2) shall offer enrollees the opportunity to obtain
coverage for out-of-network items and services (as described in
subsection (f)(2)); and
(3) notwithstanding section 1403, in the case of an
enrollee who obtains coverage for such items and services, may
charge an alternative premium to take into account such
coverage.
(e) Treatment of Cost Sharing.--Each health plan, in providing
benefits in the comprehensive benefit package--
(1) shall include in its payments to providers, such
additional reimbursement as may be necessary to reflect cost
sharing reductions to which individuals are entitled under
section 1371, and
(2) shall maintain such claims or encounter records as may
be necessary to audit the amount of such additional
reimbursements and the individuals for which such reimbursement
is provided.
(f) In-Network and Out-of-Network Items and Services Defined.--
(1) In-network items and services.--For purposes of this
Act, the term ``in-network'', when used with respect to items
or services described in this subtitle, means items or services
provided to an individual enrolled under a health plan by a
health care provider who is a member of a provider network of
the plan (as defined in paragraph (3)).
(2) Out-of-network items and services.--For purposes of
this Act, the term ``out-of network'', when used with respect
to items or services described in this subtitle, means items or
services provided to an individual enrolled under a health plan
by a health care provider who is not a member of a provider
network of the plan (as defined in paragraph (3)).
(3) Provider network defined.--A ``provider network''
means, with respect to a health plan, providers who have
entered into an agreement with the plan under which such
providers are obligated to provide items and services in the
comprehensive benefit package to individuals enrolled in the
plan, or have an agreement to provide services on a fee-for-
service basis.
(g) Relation to Detention.--A health plan is not required to
provide any reimbursement to any detention facility for services
performed in that facility for detainees in the facility.
SEC. 1403. COMMUNITY RATING.
(a) Regional Alliance Health Plans.--Each regional alliance health
plan may not vary the premium imposed with respect to residents of an
alliance area, except as may be required under section 6102(a) with
respect to different types of individual and family coverage under the
plan.
(b) Corporate Alliance Health Plans.--Each corporate alliance
health plan may not vary the premium imposed with respect to
individuals enrolled in the plan, except as may be required under
section 1384 with respect to different types of individual and family
coverage under the plan.
SEC. 1404. MARKETING OF HEALTH PLANS; INFORMATION.
(a) Regional Alliance Marketing Restrictions.--
(1) In general.--The contract entered into between a
regional alliance and a regional alliance health plan shall
prohibit the distribution by the health plan of marketing
materials within the regional alliance that contain false or
materially misleading information and shall provide for prior
approval by the regional alliance of any marketing materials to
be distributed by the plan.
(2) Entire market.--A health plan offered by a regional
alliance may not distribute marketing materials to an area
smaller than the entire area served by the plan.
(3) Prohibition of tie-ins.--A regional alliance health
plan, and any agency of such a plan, may not seek to influence
an individual's choice of plans in conjunction with the sale of
any other insurance.
(b) Information Available.--
(1) In general.--Each regional alliance health plan must
provide to the regional alliance and make available to alliance
eligible individuals and health care professionals complete and
timely information concerning the following:
(A) Costs.
(B) The identity, locations, qualifications, and
availability of participating providers.
(C) Procedures used to control utilization of
services and expenditures.
(D) Procedures for assuring and improving the
quality of care.
(E) Rights and responsibilities of enrollees.
(F) Information on the number of plan members who
disenroll from the plan.
(2) Prohibition against certification of plans providing
inaccurate information.--No regional alliance health plan may
be a State-certified health plan under this title if the State
determines that the plan submitted materially inaccurate
information under paragraph (1).
(c) Advance Directives.--Each self-insured health plan and each
State-certified health plan shall meet the requirement of section
1866(f) of the Social Security Act (relating to maintaining written
policies and procedures respecting advance directives) in the same
manner as such requirement relates to organizations with contracts
under section 1876 of such Act.
SEC. 1405. GRIEVANCE PROCEDURE.
(a) In General.--Each health plan must establish a grievance
procedure for enrollees to use in pursuing complaints. Such procedure
shall be consistent with subtitle C of title V.
(b) Additional Remedies.--If the grievance procedure fails to
resolve an enrollee's complaint--
(1) in the case of an enrollee of a regional alliance
health plan, the enrollee has the option of seeking assistance
from the office of the ombudsman for the regional alliance
established under section 1326(a), and
(2) the enrollee may pursue additional legal remedies,
including those provided under subtitle C of title V.
SEC. 1406. HEALTH PLAN ARRANGEMENTS WITH PROVIDERS.
(a) Requirement.--Each health plan must enter into such agreements
with health care providers or have such other arrangements as may be
necessary to assure the provision of all services covered by the
comprehensive benefit package to eligible individuals enrolled with the
plan.
(b) Emergency and Urgent Care Services.--
(1) In general.--Each health plan must cover emergency and
urgent care services provided to enrollees, without regard to
whether or not the provider furnishing such services has a
contractual (or other) arrangement with the plan to provide
items or services to enrollees of the plan and in the case of
emergency services without regard to prior authorization.
(2) Payment amounts.--In the case of emergency and urgent
care provided to an enrollee outside of a health plan's service
area, the payment amounts of the plan shall be based on the fee
for service rate schedule established by the regional alliance
for the alliance area where the services were provided.
(c) Application of Fee Schedule.--
(1) In general.--Subject to paragraph (2), each regional
alliance health plan or corporate alliance health plan that
provides for payment for services on a fee-for-service basis
shall make such payment in the amounts provided under the fee
schedule established by the regional alliance under section
1322(c) (or, in the case of a plan offered in a State that has
established a Statewide fee schedule under section 1322(c)(3),
under such Statewide fee schedule).
(2) Reduction for providers voluntarily reducing charges.--
If a provider under a health plan voluntarily agrees to reduce
the amount charged to an individual enrolled under the plan,
the plan shall reduce the amount otherwise determined under the
fee schedule applicable under paragraph (1) by the proportion
of the reduction in such amount charged.
(3) Reduction for noncomplying plan.--Each regional
alliance health plan that is a noncomplying plan shall provide
for reductions in payments under the fee schedule to providers
that are not participating providers in accordance with section
6012(b).
(d) Prohibition Against Balance Billing; Requirement of Direct
Billing.--
(1) Prohibition of balance billing.--A provider may not
charge or collect from an enrollee a fee in excess of the
applicable payment amount under the applicable fee schedule
under subsection (c), and the health plan and its enrollees are
not legally responsible for payment of any amount in excess of
such applicable payment amount for items and services covered
under the comprehensive benefits package.
(2) Direct billing.--A provider may not charge or collect
from an enrollee amounts that are payable by the health plan
(including any cost sharing reduction assistance payable by the
plan) and shall submit charges to such plan in accordance with
any applicable requirements of part 1 of subtitle B of title V
(relating to health information systems).
(3) Coverage under agreements with plans.--The agreements
or other arrangements entered into under subsection (a) between
a health plan and the health care providers providing the
comprehensive benefit package to individuals enrolled with the
plan shall prohibit a provider from engaging in balance billing
described in paragraph (1).
(e) Imposition of Participating Provider Assessment in Case of a
Noncomplying Plan.--Each regional alliance health plan shall provide
that if the plan is a noncomplying plan for a year under section 6012,
payments to participating providers shall be reduced by the applicable
network reduction percentage under such section.
SEC. 1407. PREEMPTION OF CERTAIN STATE LAWS RELATING TO HEALTH PLANS.
(a) Laws Restricting Plans Other Than Fee-for-Service Plans.--
Except as may otherwise be provided in this section, no State law shall
apply to any services provided under a health plan that is not a fee-
for-service plan (or a fee-for-service component of a plan) if such law
has the effect of prohibiting or otherwise restricting plans from--
(1) except as provided in section 1203, limiting the number
and type of health care providers who participate in the plan;
(2) requiring enrollees to obtain health services (other
than emergency services) from participating providers or from
providers authorized by the plan;
(3) requiring enrollees to obtain a referral for treatment
by a specialized physician or health institution;
(4) establishing different payment rates for participating
providers and providers outside the plan;
(5) creating incentives to encourage the use of
participating providers; or
(6) requiring the use of single-source suppliers for
pharmacy, medical equipment, and other health products and
services.
(b) Preemption of State Corporate Practice Acts.--Any State law
related to the corporate practice of medicine and to provider ownership
of health plans or other providers shall not apply to arrangements
between health plans that are not fee-for-service plans and their
participating providers.
(c) Participating Provider Defined.--In this title, a
``participating provider'' means, with respect to a health plan, a
provider of health care services who is a member of a provider network
of the plan (as described in section 1402(f)(3)).
SEC. 1408. FINANCIAL SOLVENCY.
Each regional alliance health plan must--
(1) meet or exceed minimum capital requirements established
by States under section 1204(a);
(2) in the case of a plan operating in a State, must
participate in the guaranty fund established by the State under
section 1204(c); and
(3) meet such other requirements relating to fiscal
soundness as the State may establish (subject to the
establishment of any alternative standards by the Board).
SEC. 1409. REQUIREMENT FOR OFFERING COST SHARING POLICY.
Each regional alliance health plan shall offer a cost sharing
policy (as defined in section 1421(b)(2)) to each eligible family
enrolled under the plan.
SEC. 1410. QUALITY ASSURANCE.
Each health plan shall comply with such quality assurance
requirements as are imposed under subtitle A of title V with respect to
such a plan.
SEC. 1411. PROVIDER VERIFICATION.
Each health plan shall--
(1) verify the credentials of practitioners and facilities;
(2) ensure that all providers participating in the plan
meet applicable State licensing and certification standards;
(3) oversee the quality and performance of participating
providers, consistent with section 1410; and
(4) investigate and resolve consumer complaints against
participating providers.
SEC. 1412. CONSUMER DISCLOSURES OF UTILIZATION MANAGEMENT PROTOCOLS.
Each health plan shall disclose to enrollees (and prospective
enrollees) the protocols used by the plan for controlling utilization
and costs.
SEC. 1413. CONFIDENTIALITY, DATA MANAGEMENT, AND REPORTING.
(a) In General.--Each health plan shall comply with the
confidentiality, data management, and reporting requirements imposed
under subtitle B of title V.
(b) Treatment of Electronic Information.--
(1) Accuracy and reliability.--Each health plan shall take
such measures as may be necessary to ensure that health care
information in electronic form that the plan, or a member of a
provider network of the plan, collects for or transmits to the
Board under subtitle B of title V is accurate and reliable.
(2) Privacy and security.--Each health plan shall take such
measures as may be necessary to ensure that health care
information described in paragraph (1) is not distributed to
any individual or entity in violation of a standard promulgated
by the Board under part 2 of subtitle B of title V.
SEC. 1414. PARTICIPATION IN REINSURANCE SYSTEM.
Each regional alliance health plan of a State that has established
a reinsurance system under section 1203(g) shall participate in the
system in the manner specified by the State.
PART 2--REQUIREMENTS RELATING TO SUPPLEMENTAL INSURANCE
SEC. 1421. IMPOSITION OF REQUIREMENTS ON SUPPLEMENTAL INSURANCE.
(a) In General.--An entity may offer a supplemental insurance
policy but only if--
(1) in the case of a supplemental health benefit policy (as
defined in subsection (b)(1)), the entity and the policy meet
the requirements of section 1422; and
(2) in the case of a cost sharing policy (as defined in
subsection (b)(2)), the entity and the policy meet the
requirements of section 1423.
(b) Policies Defined.--
(1) Supplemental health benefit policy.--
(A) In general.--In this part, the term
``supplemental health benefit policy'' means a health
insurance policy or health benefit plan offered to an
alliance eligible individual which provides--
(i) coverage for services and items not
included in the comprehensive benefit package,
or
(ii) coverage for items and services
included in such package but not covered
because of a limitation in amount, duration, or
scope provided under this title,
or both.
(B) Exclusions.--Such term does not include the
following:
(i) A cost sharing policy (as defined in
paragraph (2)).
(ii) A long-term care insurance policy (as
defined in section 2304(10)).
(iii) Insurance that limits benefits with
respect to specific diseases (or conditions).
(iv) Hospital or nursing home indemnity
insurance.
(v) A medicare supplemental policy (as
defined in section 1882(g) of the Social
Security Act).
(vi) Insurance with respect to accidents.
(2) Cost sharing policy.--In this part, the term ``cost
sharing policy'' means a health insurance policy or health
benefit plan offered to an alliance eligible individual which
provides coverage for deductibles, coinsurance, and copayments
imposed as part of the comprehensive benefit package under
subtitle B, whether imposed under a higher cost sharing plan or
with respect to out-of-network providers.
SEC. 1422. STANDARDS FOR SUPPLEMENTAL HEALTH BENEFIT POLICIES.
(a) Prohibiting Duplication of Coverage.--
(1) In general.--No health plan, insurer, or any other
person may offer--
(A) to any eligible individual a supplemental
health benefit policy that duplicates any coverage
provided in the comprehensive benefit package; or
(B) to any medicare-eligible individual a
supplemental health benefit policy that duplicates any
coverage provided under the medicare program.
(2) Exception for medicare-eligible individuals.--For
purposes of this subsection, for the period in which an
individual is a medicare-eligible individual and also is an
alliance eligible individual (and is enrolled under a regional
alliance or corporate alliance health plan), paragraph (1)(A)
(and not paragraph (1)(B)) shall apply.
(b) No Limitation on Individuals Offered Policy.--
(1) In general.--Except as provided in paragraph (2), each
entity offering a supplemental health benefit policy must
accept for enrollment every individual who seeks such
enrollment, subject to capacity and financial limits.
(2) Exception for certain offerors.--Paragraph (1) shall
not apply to any supplemental health benefit policy offered to
an individual only on the basis of--
(A) the individual's employment (in the case of a
policy offered by the individual's employer); or
(B) the individual's membership or enrollment in a
fraternal, religious, professional, educational, or
other similar organization.
(c) Restrictions on Marketing Abuses.--Not later than January 1,
1996, the Board shall develop (in consultation with the States) minimum
standards that prohibit marketing practices by entities offering
supplemental health benefit policies that involve:
(1) Providing monetary incentives for or tying or otherwise
conditioning the sale of the policy to enrollment in a regional
alliance health plan of the entity.
(2) Using or disclosing to any party information about the
health status or claims experience of participants in a
regional alliance health plan for the purpose of marketing such
a policy.
(d) Civil Monetary Penalty.--An entity that knowingly and willfully
violates any provision of this section with respect to the offering of
a supplemental health benefit policy to any individual shall be subject
to a civil monetary penalty (not to exceed $10,000) for each such
violation. The provisions of section 1128A of the Social Security Act
(other than subsections (a) and (b)) shall apply to civil money
penalties under this subsection in the same manner as they apply to a
penalty or proceeding under section 1128A(a) of such Act.
SEC. 1423. STANDARDS FOR COST SHARING POLICIES.
(a) Rules for Offering of Policies.--Subject to subsection (f), a
cost sharing policy may be offered to an individual only if--
(1) the policy is offered by the regional alliance health
plan in which the individual is enrolled;
(2) the regional alliance health plan offers the policy to
all individuals enrolled in the plan;
(3) the plan offers each such individual a choice of a
policy that provides standard coverage and a policy that
provides maximum coverage (in accordance with standards
established by the Board); and
(4) the policy is offered only during the annual open
enrollment period for regional alliance health plans (described
in section 1323(d)(1)).
(b) Prohibition of Coverage of Copayments.--Each cost sharing
policy may not provide any benefits relating to any copayments
established under the table of copayments and coinsurance under section
1135.
(c) Equivalent Coverage for All Services.--Each cost sharing policy
must provide coverage for items and services in the comprehensive
benefit package to the same extent as the policy provides coverage for
all items and services in the package.
(d) Requirements for Pricing.--
(1) In general.--The price of any cost sharing policy
shall--
(A) be the same for each individual to whom the
policy is offered;
(B) take into account any expected increase in
utilization resulting from the purchase of the policy
by individuals enrolled in the regional alliance health
plan; and
(C) not result in a loss-ratio of less than 90
percent.
(2) Loss-ratio defined.--In paragraph (1)(C), a ``loss-
ratio'' is the ratio of the premium returned to the consumer in
payout relative to the total premium collected.
(e) Loss of State Certification for Regional Alliance Health Plans
Failing to Meet Standards.--A State may not certify a regional alliance
health plan that offers a cost sharing policy unless the plan and the
policy meet the standards described in this section.
(f) Special Rules for FEHBP Supplemental Plans.--Subsection (a)
shall not apply to an FEHBP supplemental plan described in section
8203(f)(1), but only if the plan meets the following requirements:
(1) The plan must be offered to all individuals to whom
such a plan is required to be offered under section 8203.
(2) The plan must offer each such individual a choice of a
policy that provides standard coverage and a policy that
provides maximum coverage (in accordance with standards
established by the Board under subsection (a)(3)).
(3) The plan is offered only during the annual open
enrollment period for regional alliance health plans (described
in section 1323(d)(1)).
(4)(A) The price of the plan shall include an amount,
established in accordance with rules established by the Board
in consultation with the Office of Personnel Management, that
takes into account any expected increase in utilization of the
items and services in the comprehensive benefit package
resulting from the purchase of the plan by individuals enrolled
in a regional alliance health plan.
(B) The plan provides for payment, in a manner specified by
the Board in the case of an individual enrolled in the plan and
in a regional alliance health plan, to the regional alliance
health plan of an amount equivalent to the additional amount
described in subparagraph (A).
PART 3--REQUIREMENTS RELATING TO ESSENTIAL COMMUNITY PROVIDERS
SEC. 1431. HEALTH PLAN REQUIREMENT.
(a) In General.--Subject to section 1432, each health plan shall,
with respect to each electing essential community provider (as defined
in subsection (d), other than a provider of school health services)
located within the plan's service area, either--
(1) enter into a written provider participation agreement
(described in subsection (b)) with the provider, or
(2) enter into a written agreement under which the plan
shall make payment to the provider in accordance with
subsection (c).
(b) Participation Agreement.--A participation agreement between a
health plan and an electing essential community provider under this
subsection shall provide that the health plan agrees to treat the
provider in accordance with terms and conditions at least as favorable
as those that are applicable to other providers participating in the
health plan with respect to each of the following:
(1) The scope of services for which payment is made by the
plan to the provider.
(2) The rate of payment for covered care and services.
(3) The availability of financial incentives to
participating providers.
(4) Limitations on financial risk provided to other
participating providers.
(5) Assignment of enrollees to participating providers.
(6) Access by the provider's patients to providers in
medical specialties or subspecialties participating in the
plan.
(c) Payments for Providers Without Participation Agreements.--
(1) In general.--Payment in accordance with this subsection
is payment based, as elected by the electing essential
community provider, either--
(A) on the fee schedule developed by the applicable
regional alliance (or the State) under section 1322(c),
or
(B) on payment methodologies and rates used under
the applicable Medicare payment methodology and rates
(or the most closely applicable methodology under such
program as the Secretary of Health and Human Services
specifies in regulations).
(2) No application of gate-keeper limitations.--Payment in
accordance with this subsection may be subject to utilization
review, but may not be subject to otherwise applicable gate-
keeper requirements under the plan.
(d) Election.--
(1) In general.--In this part, the term ``electing
essential community provider'' means, with respect to a health
plan, an essential community provider that elects this subpart
to apply to the health plan.
(2) Form of election.--An election under this subsection
shall be made in a form and manner specified by the Secretary,
and shall include notice to the health plan involved. Such an
election may be made annually with respect to a health plan,
except that the plan and provider may agree to make such an
election on a more frequent basis.
(e) Special Rule for Providers of School Health Services.--A health
plan shall pay, to each provider of school health services located in
the plan's service area an amount determined by the Secretary for such
services furnished to enrollees of the plan.
SEC. 1432. SUNSET OF REQUIREMENT.
(a) In General.--Subject to subsection (d), the requirement of
section 1431 shall only apply to health plans offered by a health
alliance during the 5-year period beginning with the first year in
which any health plan is offered by the alliance.
(b) Studies.--In order to prepare recommendations under subsection
(c), the Secretary shall conduct studies regarding essential community
providers, including studies that assess--
(1) the definition of essential community provider,
(2) the sufficiency of the funding levels for providers,
for both covered and uncovered benefits under this Act,
(3) the effects of contracting requirements relating to
such providers on such providers, health plans, and enrollees,
(4) the impact of the payment rules for such providers, and
(5) the impact of national health reform on such providers.
(c) Recommendations to Congress.--The Secretary shall submit to
Congress, by not later than March 1, 2001, specific recommendations
respecting whether, and to what extent, section 1431 should continue to
apply to some or all essential community providers. Such
recommendations may include a description of the particular types of
such providers and circumstances under which such section should
continue to apply.
(d) Congressional Consideration.--
(1) In general.--Recommendations submitted under subsection
(c) shall apply under this part (and may supersede the
provisions of subsection (a)) unless a joint resolution
(described in paragraph (2)) disapproving such recommendations
is enacted, in accordance with the provisions of paragraph (3),
before the end of the 60-day period beginning on the date on
which such recommendations were submitted. For purposes of
applying the preceding sentence and paragraphs (2) and (3), the
days on which either House of Congress is not in session
because of an adjournment of more than three days to a day
certain shall be excluded in the computation of a period.
(2) Joint resolution of disapproval.--A joint resolution
described in this paragraph means only a joint resolution which
is introduced within the 10-day period beginning on the date on
which the Secretary submits recommendations under subsection
(c) and--
(A) which does not have a preamble;
(B) the matter after the resolving clause of which
is as follows: ``That Congress disapproves the
recommendations of the Secretary of Health and Human
Services concerning the continued application of
certain essential community provider requirements under
section 1431 of the Health Security Act, as submitted
by the Secretary on ______________.'', the blank space
being filled in with the appropriate date; and
(C) the title of which is as follows: ``Joint
resolution disapproving recommendations of the
Secretary of Health and Human Services concerning the
continued application of certain essential community
provider requirements under section 1431 of the Health
Security Act, as submitted by the Secretary on
______________.'', the blank space being filled in with
the appropriate date.
(3) Procedures for consideration of resolution of
disapproval.--Subject to paragraph (4), the provisions of
section 2908 (other than subsection (a)) of the Defense Base
Closure and Realignment Act of 1990 shall apply to the
consideration of a joint resolution described in paragraph (2)
in the same manner as such provisions apply to a joint
resolution described in section 2908(a) of such Act.
(4) Special rules.--For purposes of applying paragraph (3)
with respect to such provisions--
(A) any reference to the Committee on Armed
Services of the House of Representatives shall be
deemed a reference to an appropriate Committee of the
House of Representatives (specified by the Speaker of
the House of Representatives at the time of submission
of recommendations under subsection (c)) and any
reference to the Committee on Armed Services of the
Senate shall be deemed a reference to an appropriate
Committee of the Senate (specified by the Majority
Leader of the Senate at the time of submission of
recommendations under subsection (c)); and
(B) any reference to the date on which the
President transmits a report shall be deemed a
reference to the date on which the Secretary submits
recommendations under subsection (c).
PART 4--REQUIREMENTS RELATING TO WORKERS' COMPENSATION AND AUTOMOBILE
MEDICAL LIABILITY COVERAGE
SEC. 1441. REFERENCE TO REQUIREMENTS RELATING TO WORKERS COMPENSATION
SERVICES.
Each health plan shall meet the applicable requirements of part 2
of subtitle A of title X (relating to provision of workers compensation
services to enrollees).
SEC. 1442. REFERENCE TO REQUIREMENTS RELATING TO AUTOMOBILE MEDICAL
LIABILITY SERVICES.
Each health plan shall meet the applicable requirements of part 2
of subtitle B of title X (relating to provision of automobile medical
liability services to enrollees).
Title I, Subtitle F
Subtitle F--Federal Responsibilities
PART 1--NATIONAL HEALTH BOARD
Subpart A--Establishment of National Health Board
SEC. 1501. CREATION OF NATIONAL HEALTH BOARD; MEMBERSHIP.
(a) In General.--There is hereby created in the Executive Branch a
National Health Board.
(b) Composition.--The Board is composed of 7 members appointed by
the President, by and with the advice and consent of the Senate.
(c) Chair.--The President shall designate one of the members as
chair. The chair serves a term concurrent with that of the President.
The chair may serve a maximum of 3 terms. The chair shall serve as the
chief executive officer of the Board.
(d) Terms.--
(1) In general.--Except as provided in paragraphs (2) and
(4), the term of each member of the Board, except the chair, is
4 years and begins when the term of the predecessor of that
member ends.
(2) Initial terms.--The initial terms of the members of the
Board (other than the chair) first taking office after the date
of the enactment of this Act, shall expire as designated by the
President, two at the end of one year, two at the end of two
years, and two at the end of three years.
(3) Reappointment.--A member (other than the chair) may be
reappointed for one additional term.
(4) Continuation in office.--Upon the expiration of a term
of office, a member shall continue to serve until a successor
is appointed and qualified.
(e) Vacancies.--
(1) In general.--Whenever a vacancy shall occur, other than
by expiration of term, a successor shall be appointed by the
President, by and with the consent of the Senate, to fill such
vacancy, and is appointed for the remainder of the term of the
predecessor.
(2) No impairment of function.--A vacancy in the membership
of the Board does not impair the authority of the remaining
members to exercise all of the powers of the Board.
(3) Acting chair.--The Board may designate a Member to act
as chair during any period in which there is no chair
designated by the President.
(f) Meetings; Quorum.--
(1) Meetings.--At meetings of the Board the chair shall
preside, and in the absence of the chair, the Board shall elect
a member to act as chair pro tempore.
(2) Quorum.--Four members of the Board shall constitute a
quorum thereof.
SEC. 1502. QUALIFICATIONS OF BOARD MEMBERS.
(a) Citizenship.--Each member of the Board shall be a citizen of
the United States.
(b) Basis of Selection.--Board members will be selected on the
basis of their experience and expertise in relevant subjects, including
the practice of medicine, nursing, or other clinical practices, health
care financing and delivery, state health systems, consumer protection,
business, law, and delivery of care to vulnerable populations.
(c) Exclusive Employment.--During the term of appointment, Board
members shall serve as employees of the Federal Government and shall
hold no other employment.
(d) Prohibition of Conflict of Interest.--A member of the Board may
not have a pecuniary interest in or hold an official relation to any
health care plan, health care provider, insurance company,
pharmaceutical company, medical equipment company, or other affected
industry. Before entering upon the duties as a member of the Board, the
member shall certify under oath compliance with this requirement.
(e) Post-Employment Restrictions.--After leaving the Board, former
members are subject to post-employment restrictions applicable to
comparable Federal employees.
(f) Compensation of Board Members.--Each member of the Board (other
than the chair) shall receive an annual salary at the annual rate
payable from time to time for level IV of the Executive Schedule. The
chair of the Board, during the period of service as chair, shall
receive an annual salary at the annual rate payable from time to time
for level III of the Executive Schedule.
SEC. 1503. GENERAL DUTIES AND RESPONSIBILITIES.
(a) Comprehensive Benefit Package.--
(1) Interpretation.--The Board shall interpret the
comprehensive benefit package, adjust the delivery of
preventive services under section 1153, and take such steps as
may be necessary to assure that the comprehensive benefit
package is available on a uniform national basis to all
eligible individuals.
(2) Recommendations.--The Board may recommend to the
President and the Congress appropriate revisions to such
package. Such recommendations may reflect changes in
technology, health care needs, health care costs, and methods
of service delivery.
(b) Administration of Cost Containment Provisions.--The Board shall
oversee the cost containment requirements of subtitle A of title VI and
certify compliance with such requirements.
(c) Coverage and Families.--The Board shall develop and implement
standards relating to the eligibility of individuals for coverage in
applicable health plans under subtitle A of title I and may provide
such additional exceptions and special rules relating to the treatment
of family members under section 1012 as the Board finds appropriate.
(d) Quality Management and Improvement.--The Board shall establish
and have ultimate responsibility for a performance-based system of
quality management and improvement as required by section 5001.
(e) Information Standards.--The Board shall develop and implement
standards to establish national health information system to measure
quality as required by section 5101.
(f) Participating State Requirements.--Consistent with the
provisions of subtitle C, the Board shall--
(1) establish requirements for participating States,
(2) monitor State compliance with those requirements,
(3) provide technical assistance, and
in a manner that ensures access to the comprehensive benefit package
for all eligible individuals.
(g) Development of Premium Class Factors.--The Board shall
establish premium class factors under subpart D of this part.
(h) Development of Risk-Adjustment Methodology.--The Board shall
develop a methodology for the risk-adjustment of premium payments to
regional alliance health plans in accordance with subpart E of this
part.
(i) Financial Requirements.--The Board shall establish minimum
capital requirements and requirements for guaranty funds under subpart
F of this part.
(j) Standards for Health Plan Grievance Procedures.--The Board
shall establish standards for health plan grievance procedures that are
used by enrollees in pursuing complaints.
SEC. 1504. ANNUAL REPORT.
(a) In General.--The Board shall prepare and send to the President
and Congress an annual report addressing the overall implementation of
the new health care system.
(b) Matters To Be Included.--The Board shall include in each annual
report under this section the following:
(1) Information on Federal and State implementation.
(2) Data related to quality improvement.
(3) Recommendations or changes in the administration,
regulation and laws related to health care and coverage.
(4) A full account of all actions taken during the previous
year.
SEC. 1505. POWERS.
(a) Staff; Contract Authority.--The Board shall have authority,
subject to the provisions of the civil-service laws and chapter 51 and
subchapter III of chapter 53 of title 5, United States Code, to appoint
such officers and employees as are necessary to carry out its
functions. To the extent provided in advance in appropriations Acts,
the Board may contract with any person (including an agency of the
Federal Government) for studies and analysis as required to execute its
functions. Any employee of the Executive Branch may be detailed to the
Board to assist the Board in carrying out its duties.
(b) Establishment of Advisory Committees.--The Board may establish
advisory committees.
(c) Access to Information.--The Board may secure directly from any
department or agency of the United States information necessary to
enable it to carry out its functions, to the extent such information is
otherwise available to a department or agency of the United States.
Upon request of the chair, the head of that department or agency shall
furnish that information to the Board.
(d) Delegation of Authority.--Except as otherwise provided in this
Act, the Board may delegate any function to such officers and employees
as the Board may designate and may authorize such successive
redelegations of such functions with the Board as the Board deems to be
necessary or appropriate. No delegation of functions by the Board shall
relieve the Board of responsibility for the administration of such
functions.
(e) Rulemaking.--The National Health Board is authorized to
establish such rules as may be necessary to carry out this Act.
SEC. 1506. FUNDING.
(a) Authorization of Appropriations.--There are authorized to be
appropriated to the Board such sums as may be necessary for fiscal
years 1994, 1995, 1996, 1997, and 1998.
(b) Submission of Budget.--Under the procedures of chapter 11 of
title 31, United States Code, the budget for the Board for a fiscal
year shall be reviewed by the Director of the Office of Management and
Budget and submitted to the Congress as part of the President's
submission of the Budget of the United States for the fiscal year.
Subpart B--Responsibilities Relating to Review and Approval of State
Systems
SEC. 1511. FEDERAL REVIEW AND ACTION ON STATE SYSTEMS.
(a) Approval of State Systems by National Board.--
(1) In general.--The National Health Board shall approve a
State health care system for which a document is submitted
under section 1200(b) unless the Board finds that the system
(as set forth in the document) does not (or will not) provide
for the State meeting the responsibilities for participating
States under this Act.
(2) Regulations.--The Board shall issue regulations, not
later than July 1, 1995, prescribing the requirements for State
health care systems under parts 2 and 3 of subtitle C, except
that in the case of a document submitted under section 1200(b)
before the date of issuance of such regulations, the Board
shall take action on such document notwithstanding the fact
that such regulations have not been issued.
(3) No approval permitted for years prior to 1996.--The
Board may not approve a State health care system under this
subpart for any year prior to 1996.
(b) Review of Completeness of Documents.--
(1) In general.--If a State submits a document under
subsection (a)(1), the Board shall notify the State, not later
than 7 working days after the date of submission, whether or
not the document is complete and provides the Board with
sufficient information to approve or disapprove the document.
(2) Additional information on incomplete document.--If the
Board notifies a State that the State's document is not
complete, the State shall be provided such additional period
(not to exceed 45 days) as the Board may by regulation
establish in which to submit such additional information as the
Board may require. Not later than 7 working days after the
State submits the additional information, the Board shall
notify the State respecting the completeness of the document.
(c) Action on Completed Documents.--
(1) In general.--The Board shall make a determination (and
notify the State) on whether the State's document provides for
implementation of a State system that meets the applicable
requirements of subtitle C--
(A) in the case of a State that did not require the
additional period described in subsection (b)(2) to
file a complete document, not later than 90 days after
notifying a State under subsection (b) that the State's
document is complete, or
(B) in the case of a State that required the
additional period described in subsection (b)(2) to
file a complete document, not later than 90 days after
notifying a State under subsection (b) that the State's
document is complete.
(2) Plans deemed approved.--If the Board does not meet the
applicable deadline for making a determination and providing
notice under paragraph (1) with respect to a State's document,
the Board shall be deemed to have approved the State's document
for purposes of this Act.
(d) Opportunity to Respond to Rejected Document.--
(1) In general.--If (within the applicable deadline under
subsection (c)(1)) the Board notifies a State that its document
does not provide for implementation of a State system that
meets the applicable requirements of subtitle C, the Board
shall provide the State with a period of 30 days in which to
submit such additional information and assurances as the Board
may require.
(2) Deadline for response.--Not later than 30 days after
receiving such additional information and assurances, the Board
shall make a determination (and notify the State) on whether
the State's document provides for implementation of a State
system that meets the applicable requirements of subtitle C.
(3) Plan deemed approved.--If the Board does not meet the
deadline established under paragraph (2) with respect to a
State, the Board shall be deemed to have approved the State's
document for purposes of this Act.
(e) Approval of Previously Terminated States.--If the Board has
approved a State system under this part for a year but subsequently
terminated the approval of the system under section 1512(b)(2), the
Board shall approve the system for a succeeding year if the State--
(1) demonstrates to the satisfaction of the Board that the
failure that formed the basis for the termination no longer
exists, and
(2) provides reasonable assurances that the types of
actions (or inactions) which formed the basis for such
termination will not recur.
(f) Revisions to State System.--
(1) Submission.--A State may revise a system approved for a
year under this section, except that such revision shall not
take effect unless the State has submitted to the Board a
document describing such revision and the Board has approved
such revision.
(2) Actions on amendments.--Not later than 60 days after a
document is submitted under paragraph (1), the Board shall make
a determination (and notify the State) on whether the
implementation of the State system, as proposed to be revised,
meets the applicable requirements of subtitle C. If the Board
fails to meet the requirement of the preceding sentence, the
Board shall be deemed to have approved the implementation of
the State system as proposed to be revised.
(3) Rejection of amendments.--Subsection (d) shall apply to
an amendment submitted under this subsection in the same manner
as it applies to a completed document submitted under
subsection (b).
(g) Notification of Non-Participating States.--If a State fails to
submit a document for a State system by the deadline referred to in
section 1200, or such a document is not approved under subsection (c),
the Board shall immediately notify the Secretary of Health and Human
Services of the State's failure for purposes of applying subpart C in
that State.
SEC. 1512. FAILURE OF PARTICIPATING STATES TO MEET CONDITIONS FOR
COMPLIANCE.
(a) In General.--In the case of a participating State, if the Board
determines that the operation of the State system under subtitle C
fails to meet the applicable requirements of this Act, sanctions shall
apply against the State in accordance with subsection (b).
(b) Type of Sanction Applicable.--The sanctions applicable under
this part are as follows:
(1) If the Board determines that the State's failure does
not substantially jeopardize the ability of eligible
individuals in the State to obtain coverage for the
comprehensive benefit package--
(A) the Board may order a regional alliance in the
State to comply with applicable requirements of this
Act and take such additional measures to assure
compliance with such requirements as the Board may
impose, if the Board determines that the State's
failure relates to a requirement applicable to a
regional alliance in the State, or
(B) if the Board does not take the action described
in subparagraph (A) (or if the Board takes the action
and determines that the action has not remedied the
violation that led to the imposition of the sanction),
the Board shall notify the Secretary of Health and
Human Services, who shall reduce payments with respect
to the State in accordance with section 1513.
(2) If the Board determines that the failure substantially
jeopardizes the ability of eligible individuals in the State to
obtain coverage for the comprehensive benefit package--
(A) the Board shall terminate its approval of the
State system; and
(B) the Board shall notify the Secretary of Health
and Human Services, who shall assume the
responsibilities described in section 1522.
(c) Termination of Sanction.--
(1) Compliance by State.--A State against which a sanction
is imposed may submit information at any time to the Board to
demonstrate that the failure that led to the imposition of the
sanction has been corrected.
(2) Termination of sanction.--If the Board determines that
the failure that led to the imposition of a sanction has been
corrected--
(A) in the case of the sanction described in
subsection (b)(1)(A), the Board shall notify the
regional alliance against which the sanction is
imposed; or
(B) in the case of any other sanction described in
subsection (b), the Board shall notify the Secretary of
Health and Human Services.
(d) Protection of Access to Benefits.--The Board and the Secretary
of Health and Human Services shall exercise authority to take actions
under this section with respect to a State only in a manner that
assures the continuous coverage of eligible individuals under regional
alliance health plans.
SEC. 1513. REDUCTION IN PAYMENTS FOR HEALTH PROGRAMS BY SECRETARY OF
HEALTH AND HUMAN SERVICES.
(a) In General.--Upon receiving notice from the Board under section
1512(b)(1)(B), the Secretary of Health and Human Services shall reduce
the amount of any of the payments described in subsection (b) that
would otherwise be made to individuals and entities in the State by
such amount as the Secretary determines to be appropriate.
(b) Payments Described.--The payments described in this subsection
are as follows:
(1) Payments to academic health centers in the State under
subtitle B of title III.
(2) Payments to individuals and entities in the State for
health research activities under section 301 and title IV of
the Public Health Service Act.
(3) Payments to hospitals in the State under part 4 of
subtitle E of title III (relating to payments to hospitals
serving vulnerable populations)
SEC. 1514. REVIEW OF FEDERAL DETERMINATIONS.
Any State or alliance affected by a determination by the Board
under this subpart may appeal such determination in accordance with
section 5231.
SEC. 1515. FEDERAL SUPPORT FOR STATE IMPLEMENTATION.
(a) Planning Grants.--
(1) In general.--Not later than 90 days after the date of
the enactment of this Act, the Secretary shall make available
to each State a planning grant to assist a State in the
development of a health care system to become a participating
State under subtitle C.
(2) Formula.--The Secretary shall establish a formula for
the distribution of funds made available under this subsection.
(3) Authorization of appropriations.--There are authorized
to be appropriated $50,000,000 in each of fiscal years 1995 and
1996 for grants under this subsection.
(b) Grants for Start-up Support.--
(1) In general.--The Secretary shall make available to
States, upon their enacting enabling legislation to become
participating States, grants to assist in the establishment of
regional alliances.
(2) Formula.--The Secretary shall establish a formula for
the distribution of funds made available under this subsection.
(3) State matching funds required.--Funds are payable to a
State under this subsection only if the State provides
assurances, satisfactory to the Secretary, that amounts of
State funds (at least equal to the amount made available under
this subsection) are expended for the purposes described in
paragraph (1).
(4) Authorization of appropriations.--There are authorized
to be appropriated $313,000,000 for fiscal year 1996,
$625,000,000 for fiscal year 1997, and $313,000,000 for fiscal
year 1998 for grants under this subsection.
Subpart C--Responsibilities in Absence of State Systems
SEC. 1521. APPLICATION OF SUBPART.
(a) Initial Application.--This subpart shall apply with respect to
a State as of January 1, 1998, unless--
(1) the State submits a document for a State system under
section 1511(a)(1) by July 1, 1997, and
(2) the Board determines under section 1511 that such
system meets the requirements of part 1 of subtitle C.
(b) Termination of Approval of System of Participating State.--In
the case of a participating State for which the Board terminates
approval of the State system under section 1512(b)(2), this subpart
shall apply with respect to the State as of such date as is appropriate
to assure the continuity of coverage for the comprehensive benefit
package for eligible individuals in the State.
SEC. 1522. FEDERAL ASSUMPTION OF RESPONSIBILITIES IN NON-PARTICIPATING
STATES.
(a) Notice.--When the Board determines that this subpart will apply
to a State for a calendar year, the Board shall notify the Secretary of
Health and Human Services.
(b) Establishment of Regional Alliance System.--Upon receiving
notice under subsection (a), the Secretary shall take such steps,
including the establishment of regional alliances, and compliance with
other requirements applicable to participating States under subtitle C,
as are necessary to ensure that the comprehensive benefit package is
provided to eligible individuals in the State during the year.
(c) Requirements for Alliances.--Subject to section 1523, any
regional alliance established by the Secretary pursuant to this section
must meet all the requirements applicable under subtitle D to a
regional alliance established and operated by a participating State,
and the Secretary shall have the authority to fulfill all the functions
of such an alliance.
(d) Establishment of Guaranty Fund.--
(1) Establishment.--The Secretary must ensure that there is
a guaranty fund that meets the requirements established by the
Board under section 1552, in order to provide financial
protection to health care providers and others in the case of a
failure of a regional alliance health plan under a regional
alliance established and operated by the Secretary under this
section.
(2) Assessments to provide guaranty funds.--In the case of
a failure of one or more regional alliance health plans under a
regional alliance established and operated by the Secretary
under this section, the Secretary may require each regional
alliance health plan under the alliance to pay an assessment to
the Secretary in an amount not to exceed 2 percent of the
premiums of such plans paid by or on behalf of regional
alliance eligible individuals during a year for so long as
necessary to generate sufficient revenue to cover any
outstanding claims against the failed plan.
SEC. 1523. IMPOSITION OF SURCHARGE ON PREMIUMS UNDER FEDERALLY-OPERATED
SYSTEM.
(a) In General.--If this subpart applies to a State for a calendar
year, the premiums charged under the regional alliance established and
operated by the Secretary in the State shall be equal to premiums that
would otherwise be charged under a regional alliance established and
operated by the State, increased by 15 percent. Such 15 percent
increase shall be used to reimburse the Secretary for any
administrative or other expenses incurred as a result of establishing
and operating the system.
(b) Treatment of Surcharge as Part of Premium.--For purposes of
determining the compliance of a State for which this subpart applies in
a year with the requirements for budgeting under subtitle A of title VI
for the year, the 15 percent increase described in subsection (a) shall
be treated as part of the premium for payment to a regional alliance.
SEC. 1524. RETURN TO STATE OPERATION.
(a) Application Process.--After the establishment and operation of
an alliance system by the Secretary in a State under section 1522, the
State may at any time apply to the Board for the approval of a State
system in accordance with the procedures described in section 1511.
(b) Timing.--If the Board approves the system of a State for which
the Secretary has operated an alliance system during a year, the
Secretary shall terminate the operation of the system, and the State
shall establish and operate its approved system, as of January 1 of the
first year beginning after the Board approves the State system. The
termination of the Secretary's system and the operation of the State's
system shall be conducted in a manner that assures the continuous
coverage of eligible individuals in the State under regional alliance
health plans.
Subpart D--Establishment of Class Factors for Charging Premiums
SEC. 1531. PREMIUM CLASS FACTORS.
(a) In General.--For each class of family enrollment (as specified
in section 1011(c)), for purposes of title VI, the Board shall
establish a premium class factor that reflects, subject to subsection
(b), the relative actuarial value of the comprehensive benefit package
of the class of family enrollment compared to such value of such
package for individual enrollment.
(b) Conditions.--In establishing such factors, the factor for the
class of individual enrollment shall be 1 and the factor for the
couple-only class of family enrollment shall be 2.
Subpart E--Risk Adjustment and Reinsurance Methodology for Payment of
Plans
SEC. 1541. DEVELOPMENT OF A RISK ADJUSTMENT AND REINSURANCE
METHODOLOGY.
(a) Development.--
(1) Initial development.--Not later than April 1, 1995, the
Board shall develop a risk adjustment and reinsurance
methodology in accordance with this subpart.
(2) Improvements.--The Board shall make such improvements
in such methodology as may be appropriate to achieve the
purposes described in subsection (b)(1).
(b) Methodology.--
(1) Purposes.--Such methodology shall provide for the
adjustment of payments to regional alliance health plans for
the purposes of--
(A) assuring that payments to such plans reflect
the expected relative utilization and expenditures for
such services by each plan's enrollees compared to the
average utilization and expenditures for regional
alliance eligible individuals, and
(B) protecting health plans that enroll a
disproportionate share of regional alliance eligible
individuals with respect to whom expected utilization
of health care services (included in the comprehensive
benefit package) and expected health care expenditures
for such services are greater than the average level of
such utilization and expenditures for regional alliance
eligible individuals.
(2) Factors to be considered.--In developing such
methodology, the Board shall take into account the following
factors:
(A) Demographic characteristics.
(B) Health status.
(C) Geographic area of residence.
(D) Socio-economic status.
(E) Subject to paragraph (5), (i) the proportion of
enrollees who are SSI recipients and (ii) the
proportion of enrollees who are AFDC recipients.
(F) Any other factors determined by the Board to be
material to the purposes described in paragraph (1).
(3) Zero sum.--The methodology shall assure that the total
payments to health plans by the regional alliance after
application of the methodology are the same as the amount of
payments that would have been made without application of the
methodology.
(4) Prospective adjustment of payments.--The methodology,
to the extent possible and except in the case of a mandatory
reinsurance system described in subsection (c), shall be
applied in a manner that provides for the prospective
adjustment of payments to health plans.
(5) Treatment of ssi/afdc adjustment.--The Board is not
required to apply the factor described in clause (i) or (ii) of
paragraph (2)(E) if the Board determines that the application
of the other risk adjustment factors described in paragraph (2)
is sufficient to adjust premiums to take into account the
enrollment in plans of AFDC recipients and SSI recipients.
(6) Special consideration for mental illness.--In
developing the methodology under this section, the Board shall
give consideration to the unique problems of adjusting payments
to health plans with respect to individuals with mental
illness.
(7) Special consideration for veterans, military, and
indian health plans.--In developing the methodology under this
section, the Board shall give consideration to the special
enrollment and funding provisions relating to plans described
in section 1004(b).
(8) Adjustment to account for use of estimates.--Subject to
section 1361(b)(3) (relating to establishment of regional
alliance reserve funds), if the total payments made by a
regional alliance to all regional alliance health plans in a
year under section 1351(b) exceeds, or is less than, the total
of such payments estimated by the alliance in the application
of the methodology under this subsection, because of a
difference between--
(A) the alliance's estimate of the distribution of
enrolled families in different risk categories (assumed
in the application of risk factors under this
subsection in making payments to regional alliance
health plans), and
(B) the actual distribution of such enrolled
families in such categories,
the methodology under this subsection shall provide for an
adjustment in the application of such methodology in the second
succeeding year in a manner that would reduce, or increase,
respectively, by the amount of such excess (or deficit) the
total of such payments made by the alliance to all such plans.
(c) Mandatory Reinsurance.--
(1) In general.--The methodology developed under this
section may include a system of mandatory reinsurance, but may
not include a system of voluntary reinsurance.
(2) Requirement in certain cases.--If the Board determines
that an adequate system of prospective adjustment of payments
to health plans to account for the health status of individuals
enrolled by regional alliance health plans cannot be developed
(and ready for implementation) by the date specified in
subsection (a)(1), the Board shall include a mandatory
reinsurance system as a component of the methodology. The Board
may thereafter reduce or eliminate such a system at such time
as the Board determines that an adequate prospective payment
adjustment for health status has been developed and is ready
for implementation.
(3) Reinsurance system.--The Board, in developing the
methodology for a mandatory reinsurance system under this
subsection, shall--
(A) provide for health plans to make payments to
state-established reinsurance programs for the purpose
of reinsuring part or all of the health care expenses
for items and services included in the comprehensive
benefit package for specified classes of high-cost
enrollees or specified high-cost treatments or
diagnoses; and
(B) specify the manner of creation, structure, and
operation of the system in each State, including--
(i) the manner (which may be prospective or
retrospective) in which health plans make
payments to the system, and
(ii) the type and level of reinsurance
coverage provided by the system.
(d) Confidentiality of Information.--The methodology shall be
developed in a manner consistent with privacy standards promulgated
under section 5120(a). In developing such standards, the Board shall
take into account any potential need of alliances for certain
individually identifiable health information in order to carry out
risk-adjustment and reinsurance activities under this Act, but only to
the minimum extent necessary to carry out such activities and with
protections provided to minimize the identification of the individuals
to whom the information relates.
SEC. 1542. INCENTIVES TO ENROLL DISADVANTAGED GROUPS.
The Board shall establish standards under which States may provide
(under section 1203(e)(3)) for an adjustment in the risk-adjustment
methodology developed under section 1541 in order to provide a
financial incentive for regional alliance health plans to enroll
individuals who are members of disadvantaged groups.
SEC. 1543. ADVISORY COMMITTEE.
(a) In General.--The Board shall establish an advisory committee to
provide technical advice and recommendations regarding the development
and modification of the risk adjustment and reinsurance methodology
developed under this subpart.
(b) Composition.--Such advisory committee shall consist of 15
individuals and shall include individuals who are representative of
health plans, regional alliances, consumers, experts, employers, and
health providers.
SEC. 1544. RESEARCH AND DEMONSTRATIONS.
The Secretary shall conduct and support research and demonstration
projects to develop and improve, on a continuing basis, the risk
adjustment and reinsurance methodology under this subpart.
SEC. 1545. TECHNICAL ASSISTANCE TO STATES AND ALLIANCES.
The Board shall provide technical assistance to States and regional
alliances in implementing the methodology developed under this subpart.
Subpart F--Responsibilities for Financial Requirements
SEC. 1551. CAPITAL STANDARDS FOR REGIONAL ALLIANCE HEALTH PLAN.
(a) In General.--The Board shall establish, in consultation with
the States, minimum capital requirements for regional alliance health
plans, for purposes of section 1204(a).
(b) $500,000 Minimum.--Subject to subsection (c), under such
requirements there shall be not less than $500,000 of capital
maintained for each plan offered in each alliance area, regardless of
whether or not the same sponsor offered more than one of such plans.
(c) Additional Capital Requirements.--The Board may require
additional capital for factors likely to affect the financial stability
of health plans, including the following:
(1) Projected plan enrollment and number of providers
participating in the plan.
(2) Market share and strength of competition.
(3) Extent and nature of risk-sharing with participating
providers and the financial stability of risk-sharing
providers.
(4) Prior performance of the plan, risk history, and
liquidity of assets.
(d) Development of Standards by NAIC.--The Board may request the
National Association of Insurance Commissioners to develop model
standards for the additional capital requirements described in
subsection (c) and to present such standards to the Board not later
than July 1, 1995. The Board may accept such standards as the standards
to be applied under subsection (c) or modify the standards in any
manner it finds appropriate.
SEC. 1552. STANDARD FOR GUARANTY FUNDS.
(a) In General.--In consultation with the States, the Board shall
establish standards for guaranty funds established by States under
section 1204(c).
(b) Guaranty Fund Standards.--The standards established under
subsection (a) for a guaranty fund shall include the following:
(1) Each fund must have a method to generate sufficient
resources to pay health providers and others in the case of a
failure of a health plan (as described in section 1204(d)(4))
in order to meet obligations with respect to--
(A) services rendered by the health plan for the
comprehensive benefit package, including any
supplemental coverage for cost sharing provided by the
health plan, and
(B) services rendered prior to health plan
insolvency and services to patients after the
insolvency but prior to their enrollment in other
health plans.
(2) The fund is liable for all claims against the plan by
health care providers with respect to their provision of items
and services covered under the comprehensive benefit package to
enrollees of the failed plan. Such claims, in full, shall take
priority over all other claims. The fund also is liable, to the
extent and in the manner provided in accordance with rules
established by the Board, for other claims, including other
claims of such providers and the claims of contractors,
employees, governments, or any other claimants.
(3) The fund stands as a creditor for any payments owed the
plan to the extent of the payments made by the fund for
obligations of the plan.
(4) The fund has authority to borrow against future
assessments (payable under section 1204(c)(2)) in order to meet
the obligations of failed plans participating in the fund.
PART 2--RESPONSIBILITIES OF DEPARTMENT OF HEALTH AND HUMAN SERVICES
Subpart A--General Responsibilities
SEC. 1571. GENERAL RESPONSIBILITIES OF SECRETARY OF HEALTH AND HUMAN
SERVICES.
(a) In General.--Except as otherwise specifically provided under
this Act (or with respect to administration of provisions in the
Internal Revenue Code of 1986 or in the Employee Retirement Income
Security Act of 1974), the Secretary of Health and Human Services shall
administer and implement all of the provisions of this Act, except
those duties delegated to the National Health Board, any other
executive agency, or to any State.
(b) Financial Management Standards.--The Secretary, in consultation
with the Secretaries of Labor and the Treasury, shall establish, for
purposes of section 1361, standards relating to the management of
finances, maintenance of records, accounting practices, auditing
procedures, and financial reporting for health alliances. Such
standards shall take into account current Federal laws and regulations
relating to fiduciary responsibilities and financial management of
funds.
(c) Auditing Regional Alliance Performance.--The Secretary shall
perform periodic financial and other audits of regional alliances to
assure that such alliances are carrying out their responsibilities
under this Act consistent with this Act. Such audits shall include
audits of alliance performance in the areas of--
(1) assuring enrollment of all regional alliance eligible
individuals in health plans,
(2) management of premium and cost sharing discounts and
reductions provided; and
(3) financial management of the alliance, including
allocation of collection shortfalls.
SEC. 1572. ADVISORY COUNCIL ON BREAKTHROUGH DRUGS.
(a) In General.--The Secretary shall appoint an Advisory Council on
Breakthrough Drugs (in this section referred to as the ``Council'')
that will examine the reasonableness of launch prices of new drugs that
represent a breakthrough or significant advance over existing
therapies.
(b) Duties.--(1) At the request of the Secretary, or a member of
the Council, the Council shall make a determination regarding the
reasonableness of launch prices of a breakthrough drug. Such a
determination shall be based on--
(A) prices of other drugs in the same therapeutic class;
(B) cost information supplied by the manufacturer;
(C) prices of the drug in countries specified in section
802(b)(4)(A) of the Federal Food, Drug, and Cosmetic Act;
(D) projected prescription volume, economies of scale,
product stability, special manufacturing requirements and
research costs;
(E) cost effectiveness relative to the cost of alternative
course of treatment options, including non-pharmacological
medical interventions; and
(F) improvements in quality of life offered by the new
product, including ability to return to work, ability to
perform activities of daily living, freedom from attached
medical devices, and other appropriate measurements of quality
of life improvements.
(2) The Secretary shall review the determinations of the Council
and publish the results of such review along with the Council's
determination (including minority opinions) as a notice in the Federal
Register.
(c) Membership.--The Council shall consist of a chair and 12 other
persons, appointed without regard to the provisions of title 5, United
States Code, governing appointments in the competitive service. The
Council shall include a representative from the pharmaceutical
industry, consumer organizations, physician organizations, the hospital
industry, and the managed care industry. Other individuals appointed by
the Secretary shall be recognized experts in the fields of health care
economics, pharmacology, pharmacy, and prescription drug reimbursement.
Only one member of the Council may have direct or indirect financial
ties to the pharmaceutical industry.
(d) Term of Appointments.--Appointments shall be for a term of 3
years, except that the Secretary may provide initially for such shorter
terms as will ensure that the terms of not more than 5 members expire
in any one year.
(e) Compensation.--Members of the Council shall be entitled to
receive reimbursement of expenses and per diem in lieu of subsistence
in the same manner as other members of advisory councils appointed by
the Secretary are provided such reimbursements under the Social
Security Act.
(f) No Termination.--Notwithstanding the provisions of the Federal
Advisory Committee Act, the Council shall continue in existence until
otherwise specified in law.
Subpart B--Certification of Essential Community Providers
SEC. 1581. CERTIFICATION.
(a) In General.--For purposes of this Act, the Secretary shall
certify as an ``essential community provider'' any health care provider
or organization that--
(1) is within any of the categories of providers and
organizations specified in section 1582(a), or
(2) meets the standards for certification under section
1583(a).
(b) Timely Establishment of Process.--The Secretary shall take such
actions as may be necessary to permit health care providers and
organizations to be certified as essential community providers in a
State before the beginning of the first year for the State.
SEC. 1582. CATEGORIES OF PROVIDERS AUTOMATICALLY CERTIFIED.
(a) In General.--The categories of providers and organizations
specified in this subsection are as follows:
(1) Migrant health centers.--A recipient or subrecipient of
a grant under section 329 of the Public Health Service Act.
(2) Community health centers.--A recipient or subrecipient
of a grant under section 330 of the Public Health Service Act.
(3) Homeless program providers.--A recipient or
subrecipient of a grant under section 340 of the Public Health
Service Act.
(4) Public housing providers.--A recipient or subrecipient
of a grant under section 340A of the Public Health Service Act.
(5) Family planning clinics.--A recipient or subrecipient
of a grant under title X of the Public Health Service Act.
(6) Indian health programs.--A service unit of the Indian
Health Service, a tribal organization, or an urban Indian
program, as defined in the Indian Health Care Improvement Act.
(7) AIDS providers under ryan white act.--A public or
private nonprofit health care provider that is a recipient or
subrecipient of a grant under title XXVI of the Public Health
Service Act.
(8) Maternal and child health providers.--A public or
private nonprofit entity that provides prenatal care, pediatric
care, or ambulatory services to children, including children
with special health care needs, and that receives funding for
such care or services under title V of the Social Security Act.
(9) Federally qualified health center; rural health
clinic.--A Federally-qualified health center or a rural health
clinic (as such terms are defined in section 1861(aa) of the
Social Security Act).
(10) Provider of school health services.--A provider of
school health services that receives funding for such services
under subtitle G of title III.
(11) Community practice network.--A qualified community
practice network receiving development funds under subtitle E
of title III.
(b) Subrecipient Defined.--In this subpart, the term
``subrecipient'' means, with respect to a recipient of a grant under a
particular authority, an entity that--
(1) is receiving funding from such a grant under a contract
with the principal recipient of such a grant, and
(2) meets the requirements established to be a recipient of
such a grant.
(c) Health Professional Defined.--In this subpart, the term
``health professional'' means a physician, nurse, nurse practitioner,
certified nurse midwife, physician assistant, psychologist, dentist,
pharmacist, and other health care professional recognized by the
Secretary.
SEC. 1583. STANDARDS FOR ADDITIONAL PROVIDERS.
(a) Standards.--The Secretary shall publish standards for the
certification of additional categories of health care providers and
organizations as essential community providers, including the
categories described in subsection (b). Such a health care provider or
organization shall not be certified unless the Secretary determines,
under such standards, that health plans operating in the area served by
the applicant would not otherwise be able to assure adequate access to
items and services included in the comprehensive benefit package if
such a provider was not so certified.
(b) Categories To Be Included.--The categories described in this
subsection are as follows:
(1) Health professionals.--Health professionals--
(A) located in an area designated as a health
professional shortage area (under section 332 of the
Public Health Service Act), or
(B) providing a substantial amount of health
services (as determined in accordance with standards
established by the Secretary) to a medically
underserved population (as designated under section 330
of such Act).
(2) Institutional providers.--Public and private nonprofit
hospitals and other institutional health care providers located
in such an area or providing health services to such a
population.
(3) Other providers.--Other public and private nonprofit
agencies and organizations that--
(A) are located in such an area or providing health
services to such a population, and
(B) provide health care and services essential to
residents of such an area or such populations.
SEC. 1584. CERTIFICATION PROCESS; REVIEW; TERMINATION OF
CERTIFICATIONS.
(a) Certification Process.--
(1) Publication of procedures.--The Secretary shall
publish, not later than 6 months after the date of the
enactment of this Act, the procedures to be used by health care
professionals, providers, agencies, and organizations seeking
certification under this subpart, including the form and manner
in which an application for such certification is to be made.
(2) Timely determination.--The Secretary shall make a
determination upon such an application not later than 60 days
(or 15 days in the case of a certification for an entity
described in section 1582) after the date the complete
application has been submitted. The determination on an
application for certification of an entity described in section
1582 shall only involve the verification that the entity is an
entity described in such section.
(b) Review of Certifications.--The Secretary shall periodically
review whether professionals, providers, agencies, and organizations
certified under this subpart continue to meet the requirements for such
certification.
(c) Termination or Denial of Certification.--
(1) Preliminary finding.--If the Secretary preliminarily
finds that an entity seeking certification under this section
does not meet the requirements for such certification or such
an entity certified under this subpart fails to continue to
meet the requirements for such certification, the Secretary
shall notify the entity of such preliminary finding and permit
the entity an opportunity, under subtitle C of title V, to
rebut such findings.
(2) Final determination.--If, after such opportunity, the
Secretary continues to find that such an entity continues to
fail to meet such requirements, the Secretary shall terminate
the certification and shall notify the entity, regional
alliances, and corporate alliances of such termination and the
effective date of the termination.
SEC. 1585. NOTIFICATION OF HEALTH ALLIANCES AND PARTICIPATING STATES.
(a) In General.--Not less often than annually the Secretary shall
notify each participating State and each health alliance of essential
community providers that have been certified under this subpart.
(b) Contents.--Such notice shall include sufficient information to
permit each health alliance to notify health plans of the identify of
each entity certified as an essential community provider, including--
(1) the location of the provider within each plan's service
area,
(2) the health services furnished by the provider, and
(3) other information necessary for health plans to carry
out part 3 of subtitle E.
PART 3--SPECIFIC RESPONSIBILITIES OF SECRETARY OF LABOR.
SEC. 1591. RESPONSIBILITIES OF SECRETARY OF LABOR.
(a) In General.--The Secretary of Labor is responsible--
(1) under subtitle G, for the enforcement of requirements
applicable to employers under regional alliances (including
requirements relating to payment of premiums) and the
administration of corporate alliances;
(2) under subtitle D, with respect to elections by eligible
sponsors to become corporate alliances and the termination of
such elections;
(3) under section 1395, for the temporary assumption of the
operation of self-insured corporate alliance health plans that
are insolvent;
(4) under section 1396, for the establishment and
administration of Corporate Alliance Health Plan Insolvency
Fund;
(5) for carrying out any other responsibilities assigned to
the Secretary under this Act; and
(6) for administering title I of the Employee Retirement
Income Security Act of 1974 as it relates to group health plans
maintained by corporate alliances.
(b) Agreements with States.--The Secretary of Labor may enter into
agreements with States in order to enforce responsibilities of
employers and corporate alliances, and requirements of corporate
alliance health plans, under subtitle B of title I of the Employee
Retirement Income Security Act of 1974.
(c) Consultation with Board.--In carrying out activities under this
Act with respect to corporate alliances, corporate alliance health
plans, and employers, the Secretary of Labor shall consult with the
National Health Board.
(d) Employer-Related Requirements.--
(1) In general.--The Secretary of Labor, in consultation
with the Secretary, shall be responsible for assuring that
employers--
(A) make payments of any employer premiums (and
withhold and make payment of the family share of
premiums with respect to qualifying employees) as
required under this Act, including auditing of regional
alliance collection activities with respect to such
payments,
(B) submit timely reports as required under this
Act, and
(C) otherwise comply with requirements imposed on
employers under this Act.
(2) Audit and similar authorities.--The Secretary of
Labor--
(A) may carry out such audits (directly or through
contract) and such investigations of employers and
health alliances,
(B) may exercise such authorities under section 504
of Employee Retirement Income Security Act of 1974 (in
relation to activities under this Act),
(C) may, with the permission of the Board, provide
(through contract or otherwise) for such collection
activities (in relation to amounts owed to regional
alliances and for the benefit of such alliances), and
(D) may impose such civil penalties under section
1345(d)(1),
as may be necessary to carry out such Secretary's
responsibilities under this section.
(e) Authority.--The Secretary of Labor is authorized to issue such
regulations as may be necessary to carry out section 1607 and
responsibilities of the Secretary under this Act (including under title
XI).
Title I, Subtitle G
Subtitle G--Employer Responsibilities
SEC. 1601. PAYMENT REQUIREMENT.
(a) In General.--Each employer shall provide for payments required
under section 6121 or 6131 in accordance with the applicable provisions
of this Act.
(b) Employers in Single-Payer States.--In the case of an employer
with respect to employees who reside in a single-payer State, the
responsibilities of such employer under such system shall supersede the
obligations of the employer under subsection (a), except as the Board
may provide.
(c) Employers Participating in Regional Alliances Through
Multiemployer Plans.--In the case of an employer participating in a
multiemployer plan, which plan elects to serve as a regional alliance
employer on behalf of its participating employers, the employer's
payment obligation under section 6121 shall be deemed satisfied if the
employer pays to the multiemployer plan at least the premium payment
amount specified in section 6121(b) and the plan has assumed legal
obligations of such an employer under such section.
SEC. 1602. REQUIREMENT FOR INFORMATION REPORTING.
(a) Reporting of End-of-Year Information to Qualifying Employees.--
(1) In general.--Each employer shall provide to each
individual who was a qualifying employee of the employer during
any month in the previous year information described in
paragraph (2) with respect to the employee.
(2) Information to be supplied.--The information described
in this paragraph, with respect to a qualifying employee, is
the following (as specified by the Secretary):
(A) Regional alliance information.--With respect to
each regional alliance through which the individual
obtained health coverage:
(i) The total number of months of full-time
equivalent employment (as determined under
section 1901(b)(2)) for each class of
enrollment.
(ii) The amount of wages attributable to
qualified employment and the amount of covered
wages (as defined in paragraph (4)).
(iii) The total amount deducted from wages
and paid for the family share of the premium.
(iv) Such other information as the
Secretary of Labor may specify.
(B) Corporate alliance information.--With respect
to a qualifying employee who obtains coverage through a
corporate alliance health plan:
(i) The total number of months of full-time
equivalent employees (as determined under
section 1901(b)(2)) for each class of
enrollment.
(ii) Such other information as the
Secretary of Labor may specify.
(3) Alliance specific information.--In the case of a
qualifying employee with respect to whom an employer made
employer premium payments during the year to more than one
regional alliance, the information under this subsection shall
be reported separately with respect to each such alliance.
(4) Covered wages defined.--In this section, the term
``covered wages'' means wages paid an employee of an employer
during a month in which the employee was a qualifying employee
of the employer.
(b) Reporting of Information for Use of Regional Alliances.--
(1) In general.--Each employer (including corporate
alliance employers) shall provide under subsection (f) on
behalf of each regional alliance information described in
paragraph (2) on an annual basis, information described in
paragraph (3) on a monthly basis, and information described in
paragraph (4) on a one-time basis, with respect to the
employment of qualifying employees in each year, month, or
other time, respectively.
(2) Information to be supplied on an annual basis.--The
information described in this paragraph, with respect to an
employer, is the following (as specified by the Secretary of
Labor):
(A) Regional alliance information.--With respect to
each regional alliance to which employer premium
payments were payable in the year:
(i) For each qualifying employee in the
year--
(I) The total number of months of
full-time equivalent employment (as
determined under section 1901(b)(2))
for the employee for each class of
enrollment.
(II) The total amount deducted from
wages and paid for the family share of
the premium of the qualifying employee.
(ii) The total employer premium payment
made under section 6121 for the year with
respect to the employment of all qualifying
employees residing in the alliance area and, in
the case of an employer that has obtained (or
seeks to obtain) a premium discount under
section 6123, the total employer premium
payment that would have been owed for such
employment for the year but for such section.
(iii) The number of full-time equivalent
employees (determined under section 1901(b)(2))
for each class of family enrollment in the year
(and for each month in the year in the case of
an employer that has obtained or is seeking a
premium discount under section 6123).
(iv) In the case of an employer to which
section 6124 applies in a year, such additional
information as the Secretary of Labor may
require for purposes of that section.
(v) The amounts paid (and payable) pursuant
to section 6125.
(vi) The amount of covered wages for each
qualifying employee.
(3) Information on a monthly basis.--
(A) In general.--The information described in this
paragraph for a month for an employer is such
information as the Secretary of Labor may specify
regarding--
(i) the identity of each eligible
individual who changed qualifying employee
status with respect to the employer in the
month; and
(ii) in the case of such an individual
described in subparagraph (B)(i)--
(I) the regional alliance for the
alliance area in which the individual
resides, and
(II) the individual's class of
family enrollment.
(B) Changes in qualifying employee status
described.--For purposes of subparagraph (A), an
individual is considered to have changed qualifying
employee status in a month if the individual either (i)
is a qualifying employee of the employer in the month
and was not a qualifying employee of the employer in
the previous month, or (ii) is not a qualifying
employee of the employer in the month but was a
qualifying employee of the employer in the previous
month.
(4) Initial information.--Each employer, at such time
before the first year in which qualifying employees of the
employer are enrolled in regional alliance health plans as the
Board may specify, shall provide for the reporting of such
information relating to employment of eligible individuals as
the Board may specify.
(c) Reconciliation of Employer Premium Payments.--
(1) Provision of information.--Each employer (whether or
not the employer claimed (or claims) an employer premium
discount under section 6123 for a year) that is liable for
employer premium payments to a regional alliance for any month
in a year shall provide the alliance with such information as
the alliance may require (consistent with rules of the
Secretary of Labor) to determine the appropriate amount of
employer premium payments that should have been made for all
months in the year (taking into account any employer premium
discount under section 6123 for the employer).
(2) Deadline.--Such information shall be provided not later
than the beginning of February of the following year with the
payment to be made for that month.
(3) Reconciliation.--
(A) Continuing employers.--Based on such
information, the employer shall adjust the amount of
employer premium payment made in the month in which the
information is provided to reflect the amount by which
the payments in the previous year were greater or less
than the amount of payments that should have been made.
(B) Discontinuing employers.--In the case of a
person that ceases to be an employer in a year, such
adjustment shall be made in the form of a payment to,
or from, the alliance involved.
(4) Special treatment of self-employed individuals.--Except
as the Secretary of Labor may provide, individuals who are
employers only by virtue of the operation of section 6126 shall
have employer premium payments attributable to such section
reconciled (in the manner previously described in this
subsection) under the process for the collection of the family
share of premiums under section 1344 rather than under this
subsection.
(d) Special Rules for Self-Employed.--
(1) In general.--In the case of an individual who is
treated as an employer under section 6126, the individual shall
provide, under subsection (f) on behalf of each regional
alliance, information described in paragraph (2) with respect
to net earnings from self-employment income of the individual
in each year.
(2) Information to be supplied.--The information described
in this paragraph, with respect to an individual, is such
information as may be necessary to compute the amount payable
under section 6131 by virtue of section 6126.
(e) Form.--Information shall be provided under this section in such
electronic or other form as the Secretary specifies. Such
specifications shall be done in a manner that, to the maximum extent
practicable, simplifies administration for small employers.
(f) Information Clearinghouse Functions.--
(1) Designation.--The Board shall provide for the use of
the regional centers (which are part of the electronic data
network under section 5103) to perform information
clearinghouse functions under this section with respect to
employers and regional and corporate alliances.
(2) Functions.--The functions referred to in paragraph (1)
shall include--
(A) receipt of information submitted by employers
under subsection (b) on an annual (or one-time) basis,
(B) from the information received, transmittal of
information required to regional alliances, and
(C) such other functions as the Board specifies.
(g) Deadline.--Information required to be provided by an employer
for a year under this section--
(1) to a qualifying employee shall be provided not later
than the date the employer is required under law to provide for
statements under section 6051 of the Internal Revenue Code of
1986 for that year, or
(2) to a health alliance (through a regional center) shall
be provided not later than the date by which information is
required to be filed with the Secretary pursuant to agreements
under section 232 of the Social Security Act for that year.
(h) Notice to Certain Individuals Who Are Not Employees.--
(1) In general.--A person that carries on a trade or
business shall notify in writing each individual described in
paragraph (2) that the person is not obligated to make any
employer health care premium payment (under section 6121) in
relation to the services performed by the individual for the
person.
(2) Individual described.--An individual described in this
paragraph, with respect to a person, is an individual who
normally performs services for the person in the person's trade
or business for more than 40 hours per month but who is not an
employee of the person (within the meaning of section 1901(a)).
(3) Timing; effective date.--Such notice shall be provided
within a reasonable time after the individual begins performing
services for the person, except that in no event is such a
notice required to be provided with respect to services
performed before January 1, 1998.
(4) Exceptions.--The Secretary shall issue regulations
providing exceptions to the notice requirement of paragraph (1)
with respect to individuals performing services on an
irregular, incidental, or casual basis.
(5) Model notice.--The Secretary shall publish a model
notice that is easily understood by the average reader and that
persons may use to satisfy the requirements of paragraph (1).
SEC. 1603. REQUIREMENTS RELATING TO NEW EMPLOYEES.
(a) Completion of Enrollment Information Form.--At the time an
individual is hired as a qualifying employee of a regional alliance
employer, the employer shall obtain from the individual the following
information (pursuant to rules established by the Secretary of Labor):
(1) The identity of the individual.
(2) The individual's alliance area of residence and whether
the individual has moved from another alliance area.
(3) The class of family enrollment applicable to the
individual.
(4) The health plan (and health alliance) in which the
individual is enrolled at that time.
(5) If the individual has moved from another alliance area,
whether the individual intends to enroll in a regional alliance
health plan.
(b) Transmittal of Information to Alliance.--
(1) In general.--Each employer shall transmit the
information obtained under subsection (a) to the regional
alliance for the alliance area in which the qualifying employee
resides (or will reside at the time of initial employment).
(2) Deadline.--Such information shall be transmitted within
30 days of the date of hiring of the employee.
(3) Form.--Information under this section may be forwarded
in electronic form to a regional alliance.
(c) Provision of Enrollment Form and Information.--In the case of
an individual described in subsection (a)(5), the employer shall
provide the individual, at the time of hiring, with--
(1) such information regarding the choice of, and
enrollment in, regional alliance health plans, and
(2) such enrollment form,
as the regional alliance provides to the employer.
SEC. 1604. AUDITING OF RECORDS.
Each regional alliance employer shall maintain such records, and
provide the regional alliance for the area in which the employer
maintains the principal place of employment (as specified by the
Secretary of Labor) with access to such records, as may be necessary to
verify and audit the information reported under this subtitle.
SEC. 1605. PROHIBITION OF CERTAIN EMPLOYER DISCRIMINATION.
No employer may discriminate with respect to an employee on the
basis of the family status of the employee or on the basis of the class
of family enrollment selected with respect to the employee.
SEC. 1606. PROHIBITION ON SELF-FUNDING OF COST SHARING BENEFITS BY
REGIONAL ALLIANCE EMPLOYERS.
(a) Prohibition.--A regional alliance employer (and a corporate
alliance employer with respect to employees who are regional alliance
eligible individuals) may provide benefits to employees that consist of
the benefits included in a cost sharing policy (as defined in section
1421(b)(2)) only through a contribution toward the purchase of a cost
sharing policy which is funded primarily through insurance.
(b) Individual and Employer Responsibilities.--In the case of an
individual who resides in a single-payer State and an employer with
respect to employees who reside in such a State, the responsibilities
of such individual and employer under such system shall supersede the
obligations of the individual and employer under this subtitle.
SEC. 1607. EQUAL VOLUNTARY CONTRIBUTION REQUIREMENT.
(a) In General.--
(1) Equal voluntary employer premium payment requirement.--
(A) Regional alliance health plans.--If an employer
makes available a voluntary employer premium payment
(as defined in subsection (d)) on behalf of a full-time
employee (as defined in section 1901(b)(2)(C)) who is
enrolled in a regional alliance health plan of a
regional alliance in a class of family enrollment, the
employer shall make available such a voluntary employer
premium payment in the same dollar amount to all
qualifying employees (as defined in section 1901(b)(1))
of the employer who are enrolled in any regional
alliance health plan of the same alliance in the same
class of family enrollment.
(B) Corporate alliance health plans.--If a
corporate alliance employer makes available a voluntary
employer premium payment on behalf of a full-time
employee who is enrolled in a corporate alliance health
plan of a corporate alliance in a class of family
enrollment in a premium area (designated under section
1384(b)), the employer shall make available such a
voluntary employer premium payment in the same dollar
amount to all qualifying employees of the employer
enrolled in any corporate alliance health plan of the
same alliance in the same class of family enrollment in
the same premium area.
(C) Treatment of part-time employees.--In applying
subparagraphs (A) and (B) in the case of a qualifying
employee employed on a part-time basis (within the
meaning of section 1901(b)(2)(A)(ii)), the dollar
amount shall be equal to the full-time employment ratio
(as defined in section 1901(b)(2)(B)) multiplied by the
dollar amount otherwise required.
(2) Limit on voluntary employer premium payments.--
(A) Regional alliance health plans.--An employer
may not make available a voluntary employer premium
payment on behalf of an employee (enrolled in a
regional alliance health plan of a regional alliance in
a class of family enrollment) in an amount that exceeds
the maximum amount that could be payable as the family
share of premium (described in section 6101(b)(2)) for
the most expensive regional alliance health plan of the
same alliance for the same class of family enrollment.
(B) Corporate alliance health plans.--An employer
may not make available a voluntary employer premium
payment on behalf of an employee (enrolled in a
corporate alliance health plan of a corporate alliance
in a class of family enrollment in a premium area,
designated under section 1384) in an amount that
exceeds the maximum amount that could be payable as the
family share of premium (described in section
6101(b)(3)) for the most expensive corporate alliance
health plan of the same alliance for the same class of
family enrollment in the same premium area.
(C) Exclusion of plans without material
enrollment.--Subparagraphs (A) and (B) shall not take
into account any health plan that does not have
material enrollment (as determined in accordance with
regulations of the Secretary of Labor).
(3) Nondiscrimination among plans selected.--An employer
may not discriminate in the wages or compensation paid, or
other terms or conditions of employment, with respect to an
employee based on the health plan (or premium of such a plan)
in which the employee is enrolled.
(b) Rebate Required in Certain Cases.--
(1) In general.--Subject to subsection (c), if--
(A) an employer makes available a voluntary
employer premium payment on behalf of an employee, and
(B)(i) the sum of the amount of the applicable
alliance credit (under section 6103) and the voluntary
employer premium payment, exceeds (ii) the premium for
the plan selected,
the employer must rebate to the employee an amount equal to the
excess described in subparagraph (B).
(2) Rebates.--
(A) In general.--Any rebate provided under
paragraph (1) shall be treated, for purposes of the
Internal Revenue Code of 1986, as wages described in
section 3121(a) of such Act.
(B) Treatment of multiple full-time employment in a
family.--In the case of--
(i) an individual who is an employee of
more than one employer, or
(ii) a couple for which both spouses are
employees,
if more than one employer provides for voluntary
employer premium payments, the individual or couple may
elect to have paragraph (1) applied with respect to all
employment.
(c) Exception for Collective Bargaining Agreement.--Subsections (a)
and (b) (other than subsection (a)(2)) shall not apply with respect to
voluntary employer premium payments made pursuant to a bona fide
collective bargaining agreement.
(d) Voluntary Employer Premium Payment.--In this section, the term
``voluntary employer premium payment'' means any payment designed to be
used exclusively (or primarily) towards the cost of the family share of
premiums for a health plan. Such term does not include any employer
premiums required to be paid under part 3 of subtitle B of title VI.
SEC. 1608. EMPLOYER RETIREE OBLIGATION.
(a) In General.--If an employer was providing, as of October 1,
1993, a threshold payment (specified in subsection (c)) for a person
who was a qualifying retired beneficiary (as defined in subsection (b))
as of such date, the employer shall pay, to or on behalf of that
beneficiary for each month beginning with January 1998, an amount that
is not less than the amount specified in subsection (d), but only if
and for so long as the person remains a qualifying retired beneficiary.
(b) Qualifying Retired Beneficiary.--In this section, the term
``qualifying retired beneficiary'' means a person who is an eligible
retiree or qualified spouse or child (as such terms are defined in
subsections (b) and (c) of section 6114).
(c) Threshold Payment.--The term ``threshold payment'' means, for
an employer with respect to a health benefit plan providing coverage to
a qualifying retired beneficiary, a payment--
(1) for coverage of any item or service described in
section 1101, and
(2) the amount of which is at least 20 percent of the
amount of the premium (or premium equivalent) for such coverage
with respect to the beneficiary (and dependents).
(d) Amount.--The amount specified in this subsection is 20 percent
of the weighted average premium for the regional alliance in which the
beneficiary resides and for the applicable class of family enrollment.
(e) Nature of Obligation.--The requirement of this section shall be
in addition to any other requirement imposed on an employer under this
Act or otherwise.
(f) Protection of Collective Bargaining Rights.--Nothing in this
Act (including this section) shall be construed as affecting collective
bargaining rights or rights under collective bargaining agreements.
SEC. 1609. ENFORCEMENT.
In the case of a person that violates a requirement of this
subtitle, the Secretary of Labor may impose a civil money penalty, in
an amount not to exceed $10,000, for each violation with respect to
each individual.
Subtitle J--General Definitions; Miscellaneous Provisions
PART 1--GENERAL DEFINITIONS
SEC. 1901. DEFINITIONS RELATING TO EMPLOYMENT AND INCOME.
(a) In General.--Except as otherwise specifically provided, in this
Act the following definitions and rules apply:
(1) Employer, employee, employment, and wages defined.--
Except as provided in this section--
(A) the terms ``wages'' and ``employment'' have the
meanings given such terms under section 3121 of the
Internal Revenue Code of 1986,
(B) the term ``employee'' has the meaning given
such term under section 3121 of such Code, subject to
the provisions of chapter 25 of such Code, and
(C) the term ``employer'' has the same meaning as
the term ``employer'' as used in such section 3121.
(2) Exceptions.--For purposes of paragraph (1)--
(A) Employment.--
(i) Employment included.--Paragraphs (1),
(2), (5), (7) (other than clauses (i) through
(iv) of subparagraph (C) and clauses (i)
through (v) of subparagraph (F)), (8), (9),
(10), (11), (13), (15), (18), and (19) of
section 3121(b) of the Internal Revenue Code of
1986 shall not apply.
(ii) Exclusion of inmates as employees.--
Employment shall not include services performed
in a penal institution by an inmate thereof or
in a hospital or other health care institution
by a patient thereof.
(B) Wages.--
(i) In general.--Paragraph (1) of section
3121(a) of the Internal Revenue Code of 1986
shall not apply.
(ii) Tips not included.--The term ``wages''
does not include cash tips.
(C) Exclusion of employees outside the united
states.--The term ``employee'' does not include an
individual who does not reside in the United States.
(D) Exclusion of foreign employment.--The term
``employee'' does not include an individual--
(i) with respect to service, if the
individual is not a citizen or resident of the
United States and the service is performed
outside the United States, or
(ii) with respect to service, if the
individual is a citizen or resident of the
United States and the service is performed
outside the United States for an employer other
than an American employer (as defined in
section 3121(h) of the Internal Revenue Code of
1986).
(3) Aggregation rules for employers.--For purposes of this
Act--
(A) all employers treated as a single employer
under subsection (a) or (b) of section 52 of the
Internal Revenue Code of 1986 shall be treated as a
single employer, and
(B) under regulations of the Secretary of Labor,
all employees of organizations which are under common
control with one or more organizations which are exempt
from income tax under subtitle A of the Internal
Revenue Code of 1986 shall be treated as employed by a
single employer.
The regulations prescribed under subparagraph (B) shall be
based on principles similar to the principles which apply to
taxable organizations under subparagraph (A).
(4) Employer premium.--The term ``employer premium'' refers
to the premium established and imposed under part 2 of subtitle
B of title VI.
(b) Qualifying Employee; Full-Time Employment.--
(1) Qualifying employee.--
(A) In general.--In this Act, the term ``qualifying
employee'' means, with respect to an employer for a
month, an employee (other than a covered child, as
defined in subparagraph (C)) who is employed by the
employer for at least 40 hours (as determined under
paragraph (3)) in the month.
(B) No special treatment of medicare beneficiaries,
ssi recipients, afdc recipients, and others.--
Subparagraph (A) shall apply regardless of whether or
not the employee is a medicare-eligible individual, an
SSI recipient, an AFDC recipient, an individual
described in section 1004(b), an eligible individual or
is authorized to be so employed.
(C) Covered child defined.--In subparagraph (A),
the term ``covered child'' means an eligible individual
who is a child and is enrolled under a health plan as a
family member described in section 1011(b)(2)(B).
(2) Full-time equivalent employees; part-time employees.--
(A) In general.--For purposes of this Act, a
qualifying employee who is employed by an employer--
(i) for at least 120 hours in a month, is
counted as 1 full-time equivalent employee for
the month and shall be deemed to be employed on
a full-time basis, or
(ii) for at least 40 hours, but less than
120 hours, in a month, is counted as a fraction
of a full-time equivalent employee in the month
equal to the full-time employment ratio (as
defined in subparagraph (B)) for the employee
and shall be deemed to be employed on a part-
time basis.
(B) Full-time employment ratio defined.--For
purposes of this Act, the term ``full-time employment
ratio'' means, with respect to a qualifying employee of
an employer in a month, the lesser of 1 or the ratio
of--
(i) the number of hours of employment such
employee is employed by such employer for the
month (as determined under paragraph (3)), to
(ii) 120 hours.
(C) Full-time employee.--For purposes of this Act,
the term ``full-time employee'' means, with respect to
an employer, an employee who is employed on a full-time
basis (as specified in subparagraph (A)) by the
employer.
(D) Consideration of industry practice.--As
provided under rules established by the Board, an
employee who is not described in subparagraph (C) shall
be considered to be employed on a full-time basis by an
employer (and to be a full-time employee of an
employer) for a month (or for all months in a 12-month
period) if the employee is employed by that employer on
a continuing basis that, taking into account the
structure or nature of the employment in the industry,
represents full time employment.
(3) Hours of employment.--
(A) In general.--For purposes of this Act, the
Board shall specify the method for computing hours of
employment for employees of an employer consistent with
this paragraph. The Board shall take into account rules
used for purposes of applying the Fair Labor Standards
Act.
(B) Hourly wage earners.--In the case of an
individual who receives compensation (in the form of
hourly wages or compensation) for the performance of
services, the individual is considered to be
``employed'' by an employer for an hour if compensation
is payable with respect to that hour of employment,
without regard to whether or not the employee is
actually performing services during such hours.
(4) Treatment of salaried employees and employees paid on
contingent or bonus arrangements.--In the case of an employee
who receives compensation on a salaried basis or on the basis
of a commission (or other contingent or bonus basis), rather
than an hourly wage, the Board shall establish rules for the
conversion of the compensation to hours of employment, taking
into account the minimum monthly compensation levels for
workers employed on a full-time basis under the Fair Labor
Standards Act and other factors the Board considers relevant.
(c) Definitions Relating to Self-Employment.--In this Act:
(1) Net earnings from self-employment.--The term ``net
earnings from self-employment'' has the meaning given such term
under section 1402(a) of the Internal Revenue Code of 1986.
(2) Self-employed individual.--The term ``self-employed
individual'' means, for a year, an individual who has net
earnings from self-employment for the year.
SEC. 1902. OTHER GENERAL DEFINITIONS.
Except as otherwise specifically provided, in this Act the
following definitions apply:
(1) Alien permanently residing in the united states under
color of law.--The term ``alien permanently residing in the
United States under color of law'' means an alien lawfully
admitted for permanent residence (within the meaning of section
101(a)(20) of the Immigration and Nationality Act), and
includes any of the following:
(A) An alien who is admitted as a refugee under
section 207 of the Immigration and Nationality Act.
(B) An alien who is granted asylum under section
208 of such Act.
(C) An alien whose deportation is withheld under
section 243(h) of such Act.
(D) An alien who is admitted for temporary
residence under section 210, 210A, or 245A of such Act.
(E) An alien who has been paroled into the United
States under section 212(d)(5) of such Act for an
indefinite period or who has been granted extended
voluntary departure as a member of a nationality group.
(F) An alien who is the spouse or unmarried child
under 21 years of age of a citizen of the United
States, or the parent of such a citizen if the citizen
is over 21 years of age, and with respect to whom an
application for adjustment to lawful permanent
residence is pending.
(G) An alien within such other classification of
permanent resident aliens as the National Health Board
may establish by regulation.
(2) AFDC family.--The term ``AFDC family'' means a family
composed entirely of one or more AFDC recipients.
(3) AFDC recipient.--The term ``AFDC recipient'' means, for
a month, an individual who is receiving aid or assistance under
any plan of the State approved under title I, X, XIV, or XVI,
or part A or part E of title IV, of the Social Security Act for
the month.
(4) Alliance area.--The term ``alliance area'' means the
area served by a regional alliance and specified under section
1202(b).
(5) Alliance eligible individual.--The term ``alliance
eligible individual'' means, with respect to a health alliance,
an eligible individual with respect to whom the applicable
health plan is a health plan offered by or through such
alliance and does not include a prisoner.
(6) Applicable health plan.--The term ``applicable health
plan'' means, with respect to an eligible individual, the
health plan specified pursuant to section 1004 and part 2 of
subtitle A.
(7) Combination cost sharing plan.--The term ``combination
cost sharing plan'' means a health plan that provides
combination cost sharing schedule (consistent with section
1134).
(8) Comprehensive benefit package.--The term
``comprehensive benefit package'' means the package of health
benefits provided under subtitle B.
(9) Consumer price index; cpi.--The terms ``consumer price
index'' and ``CPI'' mean the Consumer Price Index for all urban
consumers (U.S. city average), as published by the Bureau of
Labor Statistics.
(10) Corporate alliance eligible individual.--The term
``corporate alliance eligible individual'' means, with respect
to a corporate alliance, an eligible individual with respect to
whom the corporate alliance is the applicable health plan.
(11) Corporate alliance employer.--The term ``corporate
alliance employer'' means, with respect to a corporate
alliance, an employer of an individual who is a participant in
a corporate alliance health plan of that alliance.
(12) Corporate alliance health plan.--The term ``corporate
alliance health plan'' means a health plan offered by a
corporate alliance.
(13) Disabled ssi recipient.--The term ``disabled SSI
recipient'' means an individual who--
(A) is an SSI recipient, and
(B) has been determined to be disabled for purposes
of the supplemental security income program (under
title XVI of the Social Security Act).
(14) Eligible enrollee.--The term ``eligible enrollee''
means, with respect to a health plan offered by a health
alliance, an alliance eligible individual, but does not include
such an individual if the individual is enrolled under such a
plan as the family member of another alliance eligible
individual.
(15) Essential community provider.--The term ``essential
community provider'' means an entity certified as such a
provider under subpart B of part 2 of subtitle F.
(16) Fee-for-service plan.--The term ``fee-for-service
plan'' means a health plan described in section 1322(b)(2)(A).
(17) First year.--The term ``first year'' means, with
respect to--
(A) a State that is a participating State in a year
before 1998, the year in which the State first is a
participating State, or
(B) any other State, 1998.
(18) Higher cost sharing plan.--The term ``higher cost
sharing plan'' means a health plan that provides a higher cost
sharing schedule (consistent with section 1133).
(19) Long-term nonimmigrant.--The term ``long-term
nonimmigrant'' means a nonimmigrant described in subparagraph
(E), (H), (I), (J), (K), (L), (M), (N), (O), (Q), or (R) of
section 101(a)(15) of the Immigration and Nationality Act or an
alien within such other classification of nonimmigrant as the
National Health Board may establish by regulation.
(20) Lower cost sharing plan.--The term ``lower cost
sharing plan'' means a health plan that provides a lower cost
sharing schedule (consistent with section 1132).
(21) Medicare program.--The term ``medicare program'' means
the health insurance program under title XVIII of the Social
Security Act.
(22) Medicare-eligible individual.--The term ``medicare-
eligible individual'' means, subject to section 1012(a), an
individual who is entitled to benefits under part A of the
medicare program.
(23) Move.--The term ``move'' means, respect to an
individual, a change of residence of the individual from one
alliance area to another alliance area.
(24) National health board; board.--The terms ``National
Health Board'' and ``Board'' mean the National Health Board
created under section 1501.
(25) Poverty level.--
(A) In general.--The term ``applicable poverty
level'' means, for a family for a year, the official
poverty line (as defined by the Office of Management
and Budget, and revised annually in accordance with
section 673(2) of the Omnibus Budget Reconciliation Act
of 1981) applicable to a family of the size involved
(as determined under subparagraph (B)) for 1994
adjusted by the percentage increase or decrease
described in subparagraph (C) for the year involved.
(B) Family size.--In applying the applicable
poverty level to--
(i) an individual enrollment, the family
size is deemed to be one person;
(ii) a couple-only enrollment, the family
size is deemed to be two persons;
(iii) a single parent enrollment, the
family size is deemed to be three persons; or
(iv) a dual parent enrollment, the family
size is deemed to be four persons.
(C) Percentage adjustment.--The percentage increase
or decrease described in this subparagraph for a year
is the percentage increase or decrease by which the
average CPI for the 12-month-period ending with August
31 of the preceding year exceeds such average for the
12-month period ending with August 31, 1993.
(D) Rounding.--Any adjustment made under
subparagraph (A) for a year shall be rounded to the
nearest multiple of $100.
(26) Prisoner.--The term ``prisoner'' means, as specified
by the Board, an eligible individual during a period of
imprisonment under Federal, State, or local authority after
conviction as an adult.
(27) Regional alliance eligible individual.--The term
``regional alliance eligible individual'' means an eligible
individual with respect to whom a regional alliance health plan
is an applicable health plan.
(28) Regional alliance employer.--The term ``regional
alliance employer'' means, with respect to an employee, an
employer that is not a corporate alliance employer with respect
to such employee.
(29) Regional alliance health plan.--The term ``regional
alliance health plan'' means a health plan offered by a
regional alliance.
(30) Reside.--
(A) An individual is considered to reside in the
location in which the individual maintains a primary
residence (as established under rules of the National
Health Board).
(B) Under such rules and subject to section
1323(c), in the case of an individual who maintains
more than one residence, the primary residence of the
individual shall be determined taking into account the
proportion of time spent at each residence.
(C) In the case of a couple only one spouse of
which is a qualifying employee, except as the Board may
provide, the residence of the employee shall be the
residence of the couple.
(31) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services.
(32) SSI family.--The term ``SSI family'' means a family
composed entirely of one or more SSI recipients.
(33) SSI recipient.--The term ``SSI recipient'' means, for
a month, an individual--
(A) with respect to whom supplemental security
income benefits are being paid under title XVI of the
Social Security Act for the month,
(B) who is receiving a supplementary payment under
section 1616 of such Act or under section 212 of Public
Law 93-66 for the month, or
(C) who is receiving monthly benefits under section
1619(a) of the Social Security Act (whether or not
pursuant to section 1616(c)(3) of such Act) for the
month.
(34) State.--The term ``State'' includes the District of
Columbia, Puerto Rico, the Virgin Islands, Guam, American
Samoa, and the Northern Mariana Islands.
(35) State medicaid plan.--The term ``State medicaid plan''
means a plan of medical assistance of a State approved under
title XIX of the Social Security Act.
(36) Undocumented alien.--The term ``undocumented alien''
means an alien who is not a long-term nonimmigrant, a diplomat,
or described in section 1005(c).
(37) United States.--The term ``United States'' means the
50 States, the District of Columbia, Puerto Rico, the Virgin
Islands, Guam, American Samoa, and Northern Mariana Islands.
Subtitle B--Miscellaneous Provisions
SEC. 1911. USE OF INTERIM, FINAL REGULATIONS.
In order to permit the timely implementation of the provisions of
this Act, the National Health Board, the Secretary of Health and Human
Services, the Secretary of Labor are each authorized to issue
regulations under this Act on an interim basis that become final on the
date of publication, subject to change based on subsequent public
comment.
SEC. 1912. SOCIAL SECURITY ACT REFERENCES.
Except as may otherwise be provided, any reference in this title,
or in title V or VI, to a provision of the Social Security Act shall be
to that provision of the Social Security Act as in effect on the date
of the enactment of this Act.
Title II
TITLE II--NEW BENEFITS
table of contents of title
Page
Subtitle A--Medicare Outpatient Prescription Drug Benefit
Sec. 2001. Coverage of outpatient prescription drugs........ 343
Sec. 2002. Payment rules and related requirements for 349
covered outpatient drugs.
Sec. 2003. Medicare rebates for covered outpatient drugs.... 365
Sec. 2004. Extension of 25 percent rule for portion of 379
premium attributable to covered
outpatient drugs.
Sec. 2005. Coverage of home infusion drug therapy services.. 380
Sec. 2006. Conforming amendments to medicaid program........ 387
Sec. 2007. Effective date................................... 389
Subtitle B--Long-Term Care
Part 1--State Programs for Home and Community-based Services for
Individuals With Disabilities
Sec. 2101. State programs for home and community-based 389
services for individuals with
disabilities.
Sec. 2102. State plans...................................... 390
Sec. 2103. Individuals with disabilities defined............ 398
Sec. 2104. Home and community-based services covered under 402
State plan.
Sec. 2105. Cost sharing..................................... 408
Sec. 2106. Quality assurance and safeguards................. 409
Sec. 2107. Advisory groups.................................. 410
Sec. 2108. Payments to States............................... 412
Sec. 2109. Total Federal budget; allotments to States....... 415
Part 2--Medicaid Nursing Home Improvements
Sec. 2201. Reference to amendments.......................... 425
Part subpart a--general provisionsurance
Sec. 2301. Federal regulations; prior application or certain 426
requirements.
Sec. 2302. National Long-Term Care Insurance Advisory 430
Council.
Sec. 2303. Relation to State law............................ 438
Sec. 2304. Desubpart b--federal standards and requirements.. 438
Sec. 2321. Requirements to facilitate understanding and 443
comparison of benefits.
Sec. 2322. Requirements relating to coverage................ 449
Sec. 2323. Requirements relating to premiums................ 454
Sec. 2324. Requirements relating to sales practices......... 455
Sec. 2325. Continuation, renewal, replacement, conversion, 461
and cancellation of policies.
Sec. 2326. Requirements rsubpart c--enforcementbenefits..... 470
Sec. 2342. State programs for enforcement of standards...... 474
Sec. 2342. Authorization of appropriations for State 480
programs.
Sec. 2343. Allotments to States............................. 481
Sec. 2344. Payments to States............................... 481
Sec. 2345. Federal oversight of State enforcement........... 482
Sec. 2346. Effect subpart d--consumer education grantsogram. 483
Sec. 2361. Grants for consumer education.................... 485
Part 4--Tax Treatment of Long-term Care Insurance and Services
Sec. 2401. Reference to tax provisions...................... 488
Part 5--Tax Incentives for Individuals With Disabilities Who Work
Sec. 2501. Reference to tax provision....................... 489
Part 6--Demonstration and Evaluation
Sec. 2601. Demonstration on acute and long-term care 489
integration.
Sec. 2602. Performance review of the long-term care programs 497
Title II, Subtitle A
Subtitle A--Medicare Outpatient Prescription Drug Benefit
SEC. 2001. COVERAGE OF OUTPATIENT PRESCRIPTION DRUGS.
(a) Covered Outpatient Drugs as Medical and Other Health
Services.--Section 1861(s)(2)(J) of the Social Security Act (42 U.S.C.
1395x(s)(2)(J)) is amended to read as follows:
``(J) covered outpatient drugs;''.
(b) Definition of Covered Outpatient Drug.--Section 1861(t) of such
Act (42 U.S.C. 1395x(t)), as amended by section 13553(b) of the Omnibus
Budget Reconciliation Act of 1993 (hereafter in this subtitle referred
to as ``OBRA-1993''), is amended--
(1) in the heading, by adding at the end the following: ``;
Covered Outpatient Drugs'';
(2) in paragraph (1), by striking ``paragraph (2)'' and
inserting ``the succeeding paragraphs of this subsection''; and
(3) by striking paragraph (2) and inserting the following:
``(2) Except as otherwise provided in paragraph (3), the term
`covered outpatient drug' means any of the following products used for
a medically accepted indication (as described in paragraph (4)):
``(A) A drug which may be dispensed only upon prescription
and--
``(i) which is approved for safety and
effectiveness as a prescription drug under section 505
or 507 of the Federal Food, Drug, and Cosmetic Act or
which is approved under section 505(j) of such Act;
``(ii)(I) which was commercially used or sold in
the United States before the date of the enactment of
the Drug Amendments of 1962 or which is identical,
similar, or related (within the meaning of section
310.6(b)(1) of title 21 of the Code of Federal
Regulations) to such a drug, and (II) which has not
been the subject of a final determination by the
Secretary that it is a `new drug' (within the meaning
of section 201(p) of the Federal Food, Drug, and
Cosmetic Act) or an action brought by the Secretary
under section 301, 302(a), or 304(a) of such Act to
enforce section 502(f) or 505(a) of such Act; or
``(iii)(I) which is described in section 107(c)(3)
of the Drug Amendments of 1962 and for which the
Secretary has determined there is a compelling
justification for its medical need, or is identical,
similar, or related (within the meaning of section
310.6(b)(1) of title 21 of the Code of Federal
Regulations) to such a drug, and (II) for which the
Secretary has not issued a notice of an opportunity for
a hearing under section 505(e) of the Federal Food,
Drug, and Cosmetic Act on a proposed order of the
Secretary to withdraw approval of an application for
such drug under such section because the Secretary has
determined that the drug is less than effective for all
conditions of use prescribed, recommended, or suggested
in the labeling.
``(B) A biological product which--
``(i) may only be dispensed upon prescription,
``(ii) is licensed under section 351 of the Public
Health Service Act, and
``(iii) is produced at an establishment licensed
under such section to produce such product.
``(C) Insulin certified under section 506 of the Federal
Food, Drug, and Cosmetic Act.
``(3) The term `covered outpatient drug' does not include any
product--
``(A) which is administered through infusion in a home
setting unless the product is a covered home infusion drug (as
defined in paragraph (5));
``(B) when furnished as part of, or as incident to, any
other item or service for which payment may be made under this
title; or
``(C) which is listed under paragraph (2) of section
1927(d) (other than subparagraph (I) or (J) of such
subparagraph) as a drug which may be excluded from coverage
under a State plan under title XIX and which the Secretary
elects to exclude from coverage under part B.
``(4) For purposes of paragraph (2), the term `medically accepted
indication', with respect to the use of an outpatient drug, includes
any use which has been approved by the Food and Drug Administration for
the drug, and includes another use of the drug if--
``(A) the drug has been approved by the Food and Drug
Administration; and
``(B)(i) such use is supported by one or more citations
which are included (or approved for inclusion) in one or more
of the following compendia: the American Hospital Formulary
Service-Drug Information, the American Medical Association Drug
Evaluations, the United States Pharmacopoeia-Drug Information,
and other authoritative compendia as identified by the
Secretary, unless the Secretary has determined that the use is
not medically appropriate or the use is identified as not
indicated in one or more such compendia, or
``(ii) the carrier involved determines, based upon guidance
provided by the Secretary to carriers for determining accepted
uses of drugs, that such use is medically accepted based on
supportive clinical evidence in peer reviewed medical
literature appearing in publications which have been identified
for purposes of this clause by the Secretary.
The Secretary may revise the list of compendia in subparagraph (B)(i)
designated as appropriate for identifying medically accepted
indications for drugs.
``(5)(A) For purposes of paragraph (3), the term `covered home
infusion drug' means a covered outpatient drug or an enteral or
parenteral nutrient dispensed to an individual that--
``(i) is administered intravenously, subcutaneously,
epidurally, or through other means determined by the Secretary,
using an access device that is inserted in to the body and an
infusion device to control the rate of flow of the drug,
``(ii) is administered in the individual's home (including
an institution used as the individual's home, other than a
hospital under subsection (e) or a skilled nursing facility
that meets the requirements of section 1819(a)), and
``(iii)(I) is an antibiotic drug and the Secretary has not
determined, for the specific drug or the indication to which
the drug is applied, that the drug cannot generally be
administered safely and effectively in a home setting, or
``(II) is not an antibiotic drug and the Secretary has
determined, for the specific drug or the indication to which
the drug is applied, that the drug can generally be
administered safely and effectively in a home setting.
``(B) Not later than January 1, 1996, (and periodically
thereafter), the Secretary shall publish a list of the drugs, and
indications for such drugs, that are covered home infusion drugs, with
respect to which home infusion drug therapy may be provided under this
title.''.
(c) Other Conforming Amendments.--(1) Section 1861 of such Act (42
U.S.C. 1395x) is amended--
(A) in subsection (s)(2), as amended by section 13553 of
OBRA-1993--
(i) by striking subparagraphs (O) and (Q),
(ii) by adding ``and'' at the end of subparagraph
(N),
(iii) by striking ``; and'' at the end of
subparagraph (P) and inserting a period, and
(iv) by redesignating subparagraph (P) as
subparagraph (O); and
(B) by striking the subsection (jj) added by section
4156(a)(2) of the Omnibus Budget Reconciliation Act of 1990.
(2) Section 1881(b)(1)(C) of such Act (42 U.S.C. 1395rr(b)(1)(C)),
as amended by section 13566(a) of OBRA-1993, is amended by striking
``section 1861(s)(2)(P)'' and inserting ``section 1861(s)(2)(O)''.
SEC. 2002. PAYMENT RULES AND RELATED REQUIREMENTS FOR COVERED
OUTPATIENT DRUGS.
(a) In General.--Section 1834 of the Social Security Act (42 U.S.C.
1395m) is amended by inserting after subsection (c) the following new
subsection:
``(d) Payment for and Certain Requirements Concerning Covered
Outpatient Drugs.--
``(1) Deductible.--
``(A) In general.--Payment shall be made under
paragraph (2) only for expenses incurred by an
individual for a covered outpatient drug during a
calendar year after the individual has incurred
expenses in the year for such drugs (during a period in
which the individual is entitled to benefits under this
part) equal to the deductible amount for that year.
``(B) Deductible amount.--
``(i) For purposes of subparagraph (A), the
deductible amount is--
``(I) for 1996, $250, and
``(II) for any succeeding year, the
amount (rounded to the nearest dollar)
that the Secretary estimates will
ensure that the percentage of the
average number of individuals covered
under this part (other than individuals
enrolled with an eligible organization
under section 1876 or an organization
described in section 1833(a)(1)(A))
during the year who will incur expenses
for covered outpatient drugs equal to
or greater than such amount will be the
same as the percentage for the previous
year.
``(ii) The Secretary shall promulgate the
deductible amount for 1997 and each succeeding
year during September of the previous year.
``(C) Special rule for determination of expenses
incurred.--In determining the amount of expenses
incurred by an individual for covered outpatient drugs
during a year for purposes of subparagraph (A), there
shall not be included any expenses incurred with
respect to a drug to the extent such expenses exceed
the payment basis for such drug under paragraph (3).
``(2) Payment amount.--
``(A) In general.--Subject to the deductible
established under paragraph (1), the amount payable
under this part for a covered outpatient drug furnished
to an individual during a calendar year shall be equal
to--
``(i) 80 percent of the payment basis
described in paragraph (3), in the case of an
individual who has not incurred expenses for
covered outpatient drugs during the year
(including the deductible imposed under
paragraph (1)) in excess of the out-of-pocket
limit for the year under subparagraph (B); and
``(ii) 100 percent of the payment basis
described in paragraph (3), in the case of any
other individual.
``(B) Out-of-pocket limit described.--
``(i) For purposes of subparagraph (A), the
out-of-pocket limit for a year is equal to--
``(I) for 1996, $1000, and
``(II) for any succeeding year, the
amount (rounded to the nearest dollar)
that the Secretary estimates will
ensure that the percentage of the
average number of individuals covered
under this part (other than individuals
enrolled with an eligible organization
under section 1876 or an organization
described in section 1833(a)(1)(A))
during the year who will incur expenses
for covered outpatient drugs equal to
or greater than such amount will be the
same as the percentage for the previous
year.
``(ii) The Secretary shall promulgate the
out-of-pocket limit for 1997 and each
succeeding year during September of the
previous year.
``(C) Special rule for determination of expenses
incurred.--In determining the amount of expenses
incurred by an individual for covered outpatient drugs
during a year for purposes of subparagraph (A), there
shall not be included any expenses incurred with
respect to a drug to the extent such expenses exceed
the payment basis for such drug under paragraph (3).
``(3) Payment basis.--For purposes of paragraph (2), the
payment basis is the lesser of--
``(A) the actual charge for a covered outpatient
drug, or
``(B) the applicable payment limit established
under paragraph (4).
``(4) Payment limits.--
``(A) Payment limit for single source drugs and
multiple source drugs with restrictive prescriptions.--
In the case of a covered outpatient drug that is a
multiple source drug which has a restrictive
prescription, or that is single source drug, the
payment limit for a payment calculation period is equal
to--
``(i) the 90th percentile of the actual
charges (computed on the geographic basis
specified by the Secretary) for the drug
product for the second previous payment
calculation period, or
``(ii) the amount of the administrative
allowance (established under paragraph (5))
plus the product of the number of dosage units
dispensed and the per unit estimated
acquisition cost for the drug product
(determined under subparagraph (C)) for the
period,
whichever is less.
``(B) Payment limit for multiple source drugs
without restrictive prescriptions.--In the case of a
drug that is a multiple source drug which does not have
a restrictive prescription, the payment limit for a
payment calculation period is equal to the amount of
the administrative allowance (established under
paragraph (5)) plus the product of the number of dosage
units dispensed and the unweighted median of the unit
estimated acquisition cost (determined under
subparagraph (C)) for the drug products for the period.
``(C) Determination of unit price.--
``(i) In general.--The Secretary shall
determine, for the dispensing of a covered
outpatient drug product in a payment
calculation period, the estimated acquisition
cost for the drug product. With respect to any
covered outpatient drug product, such cost may
not exceed 93 percent of the published average
wholesale price for the drug during the period.
``(ii) Compliance with request for
information.--If a wholesaler or direct seller
of a covered outpatient drug refuses, after
being requested by the Secretary, to provide
price information requested to carry out clause
(i), or deliberately provides information that
is false, the Secretary may impose a civil
money penalty of not to exceed $10,000 for each
such refusal or provision of false information.
The provisions of section 1128A (other than
subsections (a) and (b)) shall apply to civil
money penalties under the previous sentence in
the same manner as they apply to a penalty or
proceeding under section 1128A(a). Information
gathered pursuant to clause (i) shall not be
disclosed except as the Secretary determines to
be necessary to carry out the purposes of this
part.
``(5) Administrative allowance for purposes of payment
limit.--
``(A) In general.--Except as provided in
subparagraph (B), the administrative allowance
established under this paragraph is--
``(i) for 1996, $5, and
``(ii) for each succeeding year, the amount
for the previous year adjusted by the
percentage change in the consumer price index
for all urban consumers (U.S. city average) for
the 12-month period ending with June of that
previous year.
``(B) Reduction for mail order pharmacies.--The
Secretary may, after consulting with representatives of
pharmacists, individuals enrolled under this part, and
of private insurers, reduce the administrative
allowances established under subparagraph (A) for any
covered outpatient drug dispensed by a mail order
pharmacy, based on differences between such pharmacies
and other pharmacies with respect to operating costs
and other economies.
``(6) Assuring appropriate prescribing and dispensing
practices.--
``(A) In general.--The Secretary shall establish a
program to identify (and to educate physicians and
pharmacists concerning)--
``(i) instances or patterns of unnecessary
or inappropriate prescribing or dispensing
practices for covered outpatient drugs,
``(ii) instances or patterns of substandard
care with respect to such drugs,
``(iii) potential adverse reactions, and
``(iv) appropriate use of generic products.
``(B) Prior authorization.--The Secretary may
require advance approval for a covered outpatient drug
which the Secretary finds is subject to misuse or
inappropriate use, is not cost effective, which is a
multiple source drug with a restrictive prescription,
or is subject to negotiation under section 1850(c)(3).
The Secretary may also establish maximum quantities per
prescription and limits on the number of prescription
refills. The Secretary shall ensure that any advance
approval requirements imposed under this subparagraph
do not restrict the access of patients to medically
necessary covered outpatient drugs on a timely basis,
and assure prompt determinations of approval or
disapproval and provide a means for providers and
patients to appeal a decision to disapprove a drug.
``(C) Drug use review.--The Secretary may provide
for a drug use review program with respect to covered
outpatient drugs dispensed to individuals eligible for
benefits under this part. Such program may include such
elements as the Secretary determines to be necessary to
assure that prescriptions (i) are appropriate, (ii) are
medically necessary, and (iii) are not likely to result
in adverse medical results, including any elements of
the State drug use review programs required under
section 1927(g) that the Secretary determines to be
appropriate.
``(7) Administrative improvements.--The Secretary shall
develop, in consultation with representatives of pharmacies and
of other interested persons, a standard claims form for covered
outpatient drugs in accordance with title V of the Health
Security Act.
``(8) Counseling requirements for pharmacies.--A pharmacy
may not receive any payment under this part for a covered
outpatient drug unless the pharmacy agrees to answer questions
of individuals enrolled under this part who receive a covered
outpatient drug from the pharmacy regarding the appropriate use
of the drug, potential interactions between the drug and other
drugs dispensed to the individual, and other matters relating
to the dispensing of such drugs.
``(9) Definitions.--In this subsection:
``(A) Multiple and single source drugs.--The terms
`multiple source drug' and `single source drug' have
the meanings of those terms under section 1927(k)(7).
``(B) Restrictive prescription.--A drug has a
`restrictive prescription' only if--
``(i) in the case of a written
prescription, the prescription for the drug
indicates, in the handwriting of the physician
or other person prescribing the drug and with
an appropriate phrase (such as `brand medically
necessary') recognized by the Secretary, that a
particular drug product must be dispensed, or
``(ii) in the case of a prescription issued
by telephone--
``(I) the physician or other person
prescribing the drug (through use of
such an appropriate phrase) states that
a particular drug product must be
dispensed, and
``(II) the physician or other
person submits to the pharmacy
involved, within 30 days after the date
of the telephone prescription, a
written confirmation which is in the
handwriting of the physician or other
person prescribing the drug and which
indicates with such appropriate phrase
that the particular drug product was
required to have been dispensed.
``(C) Payment calculation period.--The term
`payment calculation period' means the 6-month period
beginning with January of each year and the 6-month
period beginning with July of each year.''.
(b) Submission of Claims by Pharmacies.--Section 1848(g)(4) of such
Act (42 U.S.C. 1395w-4(g)(4)) is amended--
(1) in the heading--
(A) by striking ``Physician'', and
(B) by inserting ``by physicians and suppliers''
after ``claims'',
(2) in the matter in subparagraph (A) preceding clause
(i)--
(A) by striking ``For services furnished on or
after September 1, 1990, within 1 year'' and inserting
``Within 1 year (90 days in the case of covered
outpatient drugs)'',
(B) by striking ``a service'' and inserting ``an
item or service'', and
(C) by inserting ``or of providing a covered
outpatient drug,'' after ``basis,'' and
(3) in subparagraph (A)(i), by inserting ``item or'' before
``service.
(c) Special Rules for Carriers.--
(1) Use of regional carriers.--Section 1842(b)(2) of such
Act (42 U.S.C. 1395u(b)(2)) is amended by adding at the end the
following:
``(D) With respect to activities related to covered outpatient
drugs, the Secretary may enter into contracts with carriers under this
section to perform the activities on a regional basis.''.
(2) Payment on other than a cost basis.--Section
1842(c)(1)(A) of such Act (42 U.S.C. 1395u(c)(1)(A)) is
amended--
(A) by inserting ``(i)'' after ``(c)(1)(A)'',
(B) in the first sentence, by inserting ``, except
as otherwise provided in clause (ii),'' after ``under
this part, and'', and
(C) by adding at the end the following:
``(ii) To the extent that a contract under this section provides
for activities related to covered outpatient drugs, the Secretary may
provide for payment for those activities based on any method of payment
determined by the Secretary to be appropriate.''.
(3) Use of other entities for covered outpatient drugs.--
Section 1842(f) of such Act (42 U.S.C. 1395u(f)) is amended--
(A) by striking ``and'' at the end of paragraph
(1),
(B) by striking the period at the end of paragraph
(2) and inserting ``; and'', and
(C) by adding at the end the following:
``(3) with respect to activities related to covered
outpatient drugs, any other private entity which the Secretary
determines is qualified to conduct such activities.''.
(4) Designated carriers to process claims of railroad
retirees.--Section 1842(g) of such Act (42 U.S.C. 1395u(g)) is
amended by inserting ``(other than functions related to covered
outpatient drugs)'' after ``functions''.
(d) Contracts for Automatic Data Processing Equipment.--Actions
taken before 1996 that affect contracts related to the processing of
claims for covered outpatient drugs (as defined in section 1861(t) of
the Social Security Act) shall not be subject to section 111 of the
Federal Property and Administrative Services Act of 1949, and shall not
be subject to administrative or judicial review.
(e) Conforming Amendments.--
(1)(A) Section 1833(a)(1) of such Act (42 U.S.C.
1395l(a)(1)), as amended by section 13544(b)(2) of OBRA-1993,
is amended--
(i) by striking ``and'' at the end of clause (O),
and
(ii) by inserting before the semicolon at the end
the following: ``, and (Q) with respect to covered
outpatient drugs, the amounts paid shall be as
prescribed by section 1834(d)''.
(B) Section 1833(a)(2) of such Act (42 U.S.C. 1395l(a)(2))
is amended in the matter preceding subparagraph (A) by
inserting ``, except for covered outpatient drugs,'' after
``and (I) of such section''.
(2) Section 1833(b)(2) of such Act (42 U.S.C. 1395l(b)(2))
is amended by inserting ``or with respect to covered outpatient
drugs'' before the comma.
(3) The first sentence of section 1842(h)(2) of such Act
(42 U.S.C. 1395u(h)(2)) is amended by inserting ``(other than a
carrier described in subsection (f)(3))'' after ``Each
carrier''.
(4) The first sentence of section 1866(a)(2)(A) of such Act
(42 U.S.C. 1395cc(a)(2)(A)) is amended--
(A) in clause (i), by inserting ``section
1834(d),'' after ``section 1833(b),'', and
(B) in clause (ii), by inserting ``, other than for
covered outpatient drugs,'' after ``provider)''.
SEC. 2003. MEDICARE REBATES FOR COVERED OUTPATIENT DRUGS.
(a) In General.--Part B of title XVIII of the Social Security Act
is amended by adding at the end the following new section:
``rebates for covered outpatient drugs
``Sec. 1850. (a) Requirement for Rebate Agreement.--In order for
payment to be available under this part for covered outpatient drugs of
a manufacturer dispensed on or after January 1, 1996, the manufacturer
must have entered into and have in effect a rebate agreement with the
Secretary meeting the requirements of subsection (b), and an agreement
to give equal access to discounts in accordance with subsection (e).
``(b) Terms, Implementation, and Enforcement of Rebate Agreement.--
``(1) Periodic rebates.--
``(A) In general.--A rebate agreement under this
section shall require the manufacturer to pay to the
Secretary for each calendar quarter, not later than 30
days after the date of receipt of the information
described in paragraph (2) for such quarter, a rebate
in an amount determined under subsection (c) for all
covered outpatient drugs of the manufacturer described
in subparagraph (B).
``(B) Drugs included in quarterly rebate
calculation.--Drugs subject to rebate with respect to a
calendar quarter are drugs which are dispensed by a
pharmacy during such quarter to individuals (other than
individuals enrolled with an eligible organization with
a contract under section 1876) eligible for benefits
under this part, as reported by such pharmacies to the
Secretary.
``(2) Information furnished to manufacturers.--
``(A) In general.--The Secretary shall report to
each manufacturer, not later than 60 days after the end
of each calendar quarter, information on the total
number, for each covered outpatient drug, of units of
each dosage form, strength, and package size dispensed
under the plan during the quarter, on the basis of the
data reported to the Secretary described in paragraph
(1)(B).
``(B) Audit.--The Comptroller General may audit the
records of the Secretary to the extent necessary to
determine the accuracy of reports by the Secretary
pursuant to subparagraph (A). Adjustments to rebates
shall be made to the extent determined necessary by the
audit to reflect actual units of drugs dispensed.
``(3) Provision of price information by manufacturer.--
``(A) Quarterly pricing information.--Each
manufacturer with an agreement in effect under this
section shall report to the Secretary, not later than
30 days after the last day of each calendar quarter, on
the average manufacturer retail price and the average
manufacturer non-retail price for each dosage form and
strength of each covered outpatient drug for the
quarter.
``(B) Base quarter prices.--Each manufacturer of a
covered outpatient drug with an agreement under this
section shall report to the Secretary, by not later
than 30 days after the effective date of such agreement
(or, if later, 30 days after the end of the base
quarter), the average manufacturer retail price, for
such base quarter, for each dosage form and strength of
each such covered drug.
``(C) Verification of average manufacturer price.--
The Secretary may inspect the records of manufacturers,
and survey wholesalers, pharmacies, and institutional
purchasers of drugs, as necessary to verify prices
reported under subparagraph (A).
``(D) Penalties.--
``(i) Civil money penalties.--The Secretary
may impose a civil money penalty on a
manufacturer with an agreement under this
section--
``(I) for failure to provide
information required under subparagraph
(A) on a timely basis, in an amount up
to $10,000 per day of delay;
``(II) for refusal to provide
information about charges or prices
requested by the Secretary for purposes
of verification pursuant to
subparagraph (C), in an amount up to
$100,000; and
``(III) for provision, pursuant to
subparagraph (A) or (B), of information
that the manufacturer knows or should
know is false, in an amount up to
$100,000 per item of information.
Such civil money penalties are in addition to
any other penalties prescribed by law. The
provisions of section 1128A (other than
subsections (a) (with respect to amounts of
penalties or additional assessments) and (b))
shall apply to a civil money penalty under this
subparagraph in the same manner as such
provisions apply to a penalty or proceeding
under section 1128A(a).
``(ii) Termination of agreement.--If a
manufacturer with an agreement under this
section has not provided information required
under subparagraph (A) or (B) within 90 days of
the deadline imposed, the Secretary may suspend
the agreement with respect to covered
outpatient drugs dispensed after the end of
such 90-day period and until the date such
information is reported (but in no case shall a
suspension be for less than 30 days).
``(4) Length of agreement.--
``(A) In general.--A rebate agreement shall be
effective for an initial period of not less than one
year and shall be automatically renewed for a period of
not less than one year unless terminated under
subparagraph (B).
``(B) Termination.--
``(i) By the secretary.--The Secretary may
provide for termination of a rebate agreement
for violation of the requirements of the
agreement or other good cause shown. Such
termination shall not be effective earlier than
60 days after the date of notice of such
termination. The Secretary shall afford a
manufacturer an opportunity for a hearing
concerning such termination, but such hearing
shall not delay the effective date of the
termination.
``(ii) By a manufacturer.--A manufacturer
may terminate a rebate agreement under this
section for any reason. Any such termination
shall not be effective until the calendar
quarter beginning at least 60 days after the
date the manufacturer provides notice to the
Secretary.
``(iii) Effective date of termination.--Any
termination under this subparagraph shall not
affect rebates due under the agreement before
the effective date of its termination.
``(iv) Notice to pharmacies.--In the case
of a termination under this subparagraph, the
Secretary shall notify pharmacies and physician
organizations not less than 30 days before the
effective date of such termination.
``(c) Amount of Rebate.--
``(1) Basic rebate.--Each manufacturer shall remit a basic
rebate to the Secretary for each calendar quarter in an amount,
with respect to each dosage form and strength of a covered drug
(except as provided under paragraph (4)), equal to the product
of--
``(A) the total number of units subject to rebate
for such quarter, as described in subsection (b)(1)(B);
and
``(B) the greater of--
``(i) the difference between the average
manufacturer retail price and the average
manufacturer non-retail price,
``(ii) 17 percent of the average
manufacturer retail price, or
``(iii) the amount determined pursuant to
paragraph (3).
``(2) Additional rebate.--Each manufacturer shall remit to
the Secretary, for each calendar quarter, an additional rebate
for each dosage form and strength of a covered drug (except as
provided under paragraph (4)), in an amount equal to--
``(A) the total number of units subject to rebate
for such quarter, as described in subsection (b)(1)(B),
multiplied by
``(B) the amount, if any, by which the average
manufacturer retail price for covered drugs of the
manufacturer exceeds the average manufacturer retail
price for the base quarter, increased by the percentage
increase in the Consumer Price Index for all urban
consumers (U.S. average) from the end of such base
quarter to the month before the beginning of such
calendar quarter.
``(3) Negotiated rebate amount for new drugs.--
``(A) In general.--The Secretary may negotiate with
the manufacturer a per-unit rebate amount, in
accordance with this paragraph, for any covered
outpatient drug (except as provided under paragraph
(4)) first marketed after June 30, 1993--
``(i) which is not marketed in any country
specified in section 802(b)(4)(A) of the
Federal Food, Drug, and Cosmetic Act and for
which the Secretary believes the average
manufacturer's retail price may be excessive,
or
``(ii) which is marketed in one or more of
such countries, at prices significantly lower
than the average manufacturer retail price.
``(B) Maximum rebate amount for drugs marketed in
certain countries.--The rebate negotiated pursuant to
this paragraph for a drug described in subparagraph
(A)(ii) may be an amount up to the difference between
the average manufacturer retail price and any price at
which the drug is available to wholesalers in a country
specified in such section 802(b)(4)(A).
``(C) Factors to be considered.--In making
determinations with respect to the prices of a covered
drug described in subparagraph (A) and in negotiating a
rebate amount pursuant to this paragraph, the Secretary
shall take into consideration, as applicable and
appropriate, the prices of other drugs in the same
therapeutic class, cost information requested by the
Secretary and supplied by the manufacturer or estimated
by the Secretary, prescription volumes, economies of
scale, product stability, special manufacturing
requirements, prices of the drug in countries specified
in subparagraph (A)(i) (in the case of a drug described
in such subparagraph), and other relevant factors.
``(D) Option to exclude coverage.--If the Secretary
is unable to negotiate with the manufacturer an
acceptable rebate amount with respect to a covered
outpatient drug pursuant to this paragraph, the
Secretary may exclude such drug from coverage under
this part.
``(E) Effective date of exclusion from coverage.--
An exclusion of a drug from coverage pursuant to
subparagraph (D) shall be effective on and after--
``(i) the date 6 months after the effective
date of marketing approval of such drug by the
Food and Drug Administration (but in no event
earlier than July 1, 1996), or
``(ii) the date the manufacturer terminates
negotiations with the Secretary concerning the
rebate amount,
whichever is earlier.
``(4) No rebate required for generic drugs.--Paragraphs (1)
through (3) shall not apply with respect to a covered
outpatient drug that is not a single source drug or an
innovator multiple source drug (as such terms are defined in
section 1927(k)).
``(5) Deposit of rebates.--The Secretary shall deposit
rebates under this section in the Federal Supplementary Medical
Insurance Trust Fund established under section 1841.
``(d) Confidentiality of Information.--Notwithstanding any other
provision of law, information disclosed by a manufacturer under this
section is confidential and shall not be disclosed by the Secretary,
except--
``(A) as the Secretary determines to be necessary to carry
out this section,
``(B) to permit the Comptroller General to review the
information provided, and
``(C) to permit the Director of the Congressional Budget
Office to review the information provided.
``(e) Agreement to Give Equal Access to Discounts.--An agreement
under this subsection by a manufacturer of covered outpatient drugs
shall guarantee that the manufacturer will offer, to each wholesaler or
retailer (or other purchaser representing a group of such wholesalers
or retailers) that purchases such drugs on substantially the same terms
(including such terms as prompt payment, cash payment, volume purchase,
single-site delivery, the use of formularies by purchasers, and any
other terms effectively reducing the manufacturer's costs) as any other
purchaser (including any institutional purchaser) the same price for
such drugs as is offered to such other purchaser. In determining a
manufacturer's compliance with the previous sentence, there shall not
be taken into account terms offered to the Department of Veterans
Affairs, the Department of Defense, or any public program.
``(f) Definitions.--For purposes of this section--
``(1) Average manufacturer retail price.--The term `average
manufacturer retail price' means, with respect to a covered
outpatient drug of a manufacturer for a calendar quarter, the
average price (inclusive of discounts for cash payment, prompt
payment, volume purchases, and rebates (other than rebates
under this section), but exclusive of nominal prices) paid to
the manufacturer for the drug in the United States for drugs
distributed to the retail pharmacy class of trade.
``(2) Average manufacturer non-retail price.--The term
`average manufacturer non-retail price' means, with respect to
a covered outpatient drug of a manufacturer for a calendar
quarter, the weighted average price (inclusive of discounts for
cash payment, prompt payment, volume purchases, and rebates
(other than rebates under this section), but exclusive of
nominal prices) paid to the manufacturer for the drug in the
United States by hospitals and other institutional purchasers
that purchase drugs for institutional use and not for resale.
``(3) Base quarter.--The term `base quarter' means, with
respect to a covered outpatient drug of a manufacturer, the
calendar quarter beginning April 1, 1993, or (if later) the
first full calendar quarter during which the drug was marketed
in the United States.
``(4) Covered drug.--The term `covered drug' includes each
innovator multiple source drug and single source drug, as those
terms are defined in section 1927(k)(7).
``(5) Manufacturer.--The term `manufacturer' means, with
respect to a covered outpatient drug--
``(A) the entity whose National Drug Code number
(as issued pursuant to section 510(e) of the Federal
Food, Drug, and Cosmetic Act) appears on the labeling
of the drug; or
``(B) if the number described in subparagraph (A)
does not appear on the labeling of the drug, the person
named as the applicant in a human drug application (in
the case of a new drug) or the product license
application (in the case of a biological product) for
such drug approved by the Food and Drug
Administration.''.
(b) Exclusions From Coverage.--Section 1862(a) of such Act (42
U.S.C. 1395y(a)), as amended by sections 4034(b)(4) and 4118(b), is
amended--
(1) by striking ``and'' at the end of paragraph (15),
(2) by striking the period at the end of paragraph (16) and
inserting ``; or'', and
(3) by inserting after paragraph (16) the following new
paragraph:
``(17) A covered outpatient drug (as described in section
1861(t))--
``(A) furnished during a year for which the drug's
manufacturer does not have in effect a rebate agreement
with the Secretary that meets the requirements of
section 1850 for the year, or
``(B) excluded from coverage during the year by the
Secretary pursuant to section 1850(c)(3)(D) (relating
to negotiated rebate amounts for certain new drugs).''.
SEC. 2004. EXTENSION OF 25 PERCENT RULE FOR PORTION OF PREMIUM
ATTRIBUTABLE TO COVERED OUTPATIENT DRUGS.
Section 1839(e) of the Social Security Act (42 U.S.C. 1395r(e)) is
amended by adding at the end the following:
``(3) Notwithstanding the provisions of subsection (a), the portion
of the monthly premium for each individual enrolled under this part for
each month after December 1998 that is attributable to covered
outpatient drugs shall be an amount equal to 50 percent of the portion
of the monthly actuarial rate for enrollees age 65 and over, as
determined under subsection (a)(1) and applicable to such month, that
is attributable to covered outpatient drugs.''.
SEC. 2005. COVERAGE OF HOME INFUSION DRUG THERAPY SERVICES.
(a) In General.--Section 1832(a)(2)(A) of the Social Security Act
(42 U.S.C. 1395k(a)(2)(A)) is amended by inserting ``and home infusion
drug therapy services'' before the semicolon.
(b) Home Infusion Drug Therapy Services Defined.--Section 1861 of
such Act (42 U.S.C. 1395x) is amended--
(1) by redesignating the subsection (jj) inserted by
section 4156(a)(2) of the Omnibus Budget Reconciliation Act of
1990 as subsection (kk); and
(2) by inserting after such subsection the following new
subsection:
``Home Infusion Drug Therapy Services
``(ll)(1) The term `home infusion drug therapy services' means the
items and services described in paragraph (2) furnished to an
individual who is under the care of a physician--
``(A) in a place of residence used as the individual's
home,
``(B) by a qualified home infusion drug therapy provider
(as defined in paragraph (3)) or by others under arrangements
with them made by that provider, and
``(C) under a plan established and periodically reviewed by
a physician.
``(2) The items and services described in this paragraph are such
nursing, pharmacy, and related services (including medical supplies,
intravenous fluids, delivery, and equipment) as are necessary to
conduct safely and effectively a drug regimen through use of a covered
home infusion drug (as defined in subsection (t)(5)), but do not
include such covered home infusion drugs.
``(3) The term `qualified home infusion drug therapy provider'
means any entity that the Secretary determines meets the following
requirements:
``(A) The entity is capable of providing or arranging for
the items and services described in paragraph (2) and covered
home infusion drugs.
``(B) The entity maintains clinical records on all
patients.
``(C) The entity adheres to written protocols and policies
with respect to the provision of items and services.
``(D) The entity makes services available (as needed) seven
days a week on a 24-hour basis.
``(E) The entity coordinates all service with the patient's
physician.
``(F) The entity conducts a quality assessment and
assurance program, including drug regimen review and
coordination of patient care.
``(G) The entity assures that only trained personnel
provide covered home infusion drugs (and any other service for
which training is required to provide the service safely).
``(H) The entity assumes responsibility for the quality of
services provided by others under arrangements with the entity.
``(I) In the case of an entity in any State in which State
or applicable local law provides for the licensing of entities
of this nature, the entity (i) is licensed pursuant to such
law, or (ii) is approved, by the agency of such State or
locality responsible for licensing entities of this nature, as
meeting the standards established for such licensing.
``(J) The entity meets such other requirements as the
Secretary may determine are necessary to assure the safe and
effective provision of home infusion drug therapy services and
the efficient administration of the home infusion drug therapy
benefit.''.
(c) Payment.--
(1) In general.--Section 1833 of such Act (42 U.S.C. 1395l)
is amended--
(A) in subsection (a)(2)(B), by striking ``or (E)''
and inserting ``(E), or (F)'',
(B) in subsection (a)(2)(D), by striking ``and'' at
the end,
(C) in subsection (a)(2)(E), by striking the
semicolon and inserting ``; and'',
(D) by inserting after subsection (a)(2)(E) the
following new subparagraph:
``(F) with respect to home infusion drug therapy
services, the amounts described in section 1834(j);'',
and
(E) in the first sentence of subsection (b), by
striking ``services, (3)'' and inserting ``services and
home infusion drug therapy services, (3)''.
(2) Amount described.--Section 1834 of such Act, as amended
by section 13544(b)(i) of OBRA-1993, is amended by adding at
the end the following new subsection:
``(j) Home Infusion Drug Therapy Services.--
``(1) In general.--With respect to home infusion drug
therapy services, payment under this part shall be made in an
amount equal to the lesser of the actual charges for such
services or the fee schedule established under paragraph (2).
``(2) Establishment of fee schedule.--The Secretary shall
establish by regulation before the beginning of 1996 and each
succeeding year a fee schedule for home infusion drug therapy
services for which payment is made under this part. A fee
schedule established under this subsection shall be on a per
diem basis.''.
(3) Prohibition on certain referrals.--Section 1877(h)(6)
of such Act (42 U.S.C. 1395nn(h)(6)), as amended by section
13562(a) of OBRA-1993, is amended by adding at the end the
following:
``(L) Home infusion drug therapy services.''.
(d) Certification.--Section 1835(a)(2) of such Act (42 U.S.C.
1395n(a)(2)) is amended--
(1) by striking ``and'' at the end of subparagraph (E),
(2) by striking the period at the end of subparagraph (F)
and inserting ``; and'', and
(3) by inserting after subparagraph (F) the following:
``(G) in the case of home infusion drug therapy
services, (i) such services are or were required
because the individual needed such services for the
administration of a covered home infusion drug, (ii) a
plan for furnishing such services has been established
and is reviewed periodically by a physician, and (iii)
such services are or were furnished while the
individual is or was under the care of a physician.''.
(e) Certification of Home infusion Drug Therapy Providers;
Intermediate Sanctions for Noncompliance.--
(1) Treatment as provider of services.--Section 1861(u) of
such Act (42 U.S.C. 1395x(u)) is amended by inserting ``home
infusion drug therapy provider,'' after ``hospice program,''.
(2) Consultation with state agencies and other
organizations.--Section 1863 of such Act (42 U.S.C. 1395z) is
amended by striking ``and (dd)(2)'' and inserting ``(dd)(2),
and (ll)(3)''.
(3) Use of state agencies in determining compliance.--
Section 1864(a) of such Act (42 U.S.C. 1395aa(a)) is amended--
(A) in the first sentence, by striking ``an agency
is a hospice program'' and inserting ``an agency or
entity is a hospice program or a home infusion drug
therapy provider,''; and
(B) in the second sentence--
(i) by striking ``institution or agency''
and inserting ``institution, agency, or
entity'', and
(ii) by striking ``or hospice program'' and
inserting ``hospice program, or home infusion
drug therapy provider''.
(4) Application of intermediate sanctions.--Section 1846 of
such Act (42 U.S.C. 1395w-2) is amended--
(A) in the heading, by adding ``and for qualified
home infusion drug therapy providers'' at the end,
(B) in subsection (a), by inserting ``or that a
qualified home infusion drug therapy provider that is
certified for participation under this title no longer
substantially meets the requirements of section
1861(ll)(3)'' after ``under this part'', and
(C) in subsection (b)(2)(A)(iv), by inserting ``or
home infusion drug therapy services'' after ``clinical
diagnostic laboratory tests''.
(f) Use of Regional Intermediaries in Administration of Benefit.--
Section 1816 of such Act (42 U.S.C. 1395h) is amended by adding at the
end the following new subsection:
``(k) With respect to carrying out functions relating to payment
for home infusion drug therapy services and covered home infusion
drugs, the Secretary may enter into contracts with agencies or
organizations under this section to perform such functions on a
regional basis.''.
(g) Conforming Amendments Relating to Coverage of Enteral and
Parenteral Nutrients, Supplies, and Equipment.--(1) Section
1834(h)(4)(B) of such Act (42 U.S.C. 1395m(h)(4)(B)) is amended by
striking ``, except that'' and all that follows through ``equipment''.
(2) Section 1861(s)(8) of such Act (42 U.S.C. 1395x(s)(8)) is
amended by inserting after ``dental'' the following: ``devices or
enteral and parenteral nutrients, supplies, and equipment''.
SEC. 2006. CONFORMING AMENDMENTS TO MEDICAID PROGRAM.
(a) In General.--
(1) Requiring medicare rebate as condition of coverage.--
The first sentence of section 1927(a)(1) of the Social Security
Act (42 U.S.C. 1396r-8(a)(1)) is amended--
(A) in the first sentence of paragraph (1), by
striking ``and paragraph (6)'' and inserting ``,
paragraph (6), and (for calendar quarters beginning on
or after January 1, 1996) paragraph (7)''; and
(B) by adding at the end the following new
paragraph:
``(7) Requirement relating to rebate agreements for covered
outpatient drugs under medicare program.--A manufacturer meets
the requirements of this paragraph for quarters in a year if
the manufacturer has in effect an agreement with the Secretary
under section 1850 for providing rebates for covered outpatient
drugs furnished to individuals under title XVIII during the
year.''.
(2) Non-duplication of rebates.--Section 1927(b)(1) of such
Act (42 U.S.C. 1396r-8(b)(1)) is amended--
(A) by redesignating subparagraph (B) as
subparagraph (C), and
(B) by inserting after subparagraph (A) the
following new subparagraph:
``(B) Non-duplication of medicare rebate.--Covered
drugs furnished to an individual eligible for benefits
under part B of title XVIII and enrolled in a State
plan under this title shall not be included in the
determination of units of covered outpatient drugs
subject to rebate under this section.''.
(b) Effective Date.--The amendments made by subsection (a) shall
apply to quarters beginning on or after January 1, 1996.
SEC. 2007. EFFECTIVE DATE.
Except as otherwise provided, the amendments made by this subtitle
shall apply to items and services furnished on or after January 1,
1996.
Title II, Subtitle B
Subtitle B--Long-Term Care
PART 1--STATE PROGRAMS FOR HOME AND COMMUNITY-BASED SERVICES FOR
INDIVIDUALS WITH DISABILITIES
SEC. 2101. STATE PROGRAMS FOR HOME AND COMMUNITY-BASED SERVICES FOR
INDIVIDUALS WITH DISABILITIES.
(a) In General.--Each State that has a plan for the home and
community-based services to individuals with disabilities submitted to
and approved by the Secretary under section 2102(b) is entitled to
payment in accordance with section 2108.
(b) No Individual Entitlement Established.--Nothing in this part
shall be construed to create an entitlement for individuals or a
requirement that a State with such an approved plan expend the entire
amount of funds to which it is entitled in any year.
SEC. 2102. STATE PLANS.
(a) Plan Requirements.--In order to be approved under subsection
(b), a State plan for home and community-based services for individuals
with disabilities must meet the following requirements:
(1) Eligibility.--
(A) In general.--Within the amounts provided by the
State (and under section 2108) for such plan, the plan
shall provide that services under the plan will be
available to individuals with disabilities (as defined
in section 2103(a)) in the State.
(B) Initial screening.--The plan shall provide a
process for the initial screening of individuals who
appear to have some reasonable likelihood of being an
individual with disabilities.
(C) Restrictions.--The plan may not limit the
eligibility of individuals with disabilities based on--
(i) income,
(ii) age,
(iii) geography,
(iv) nature, severity, or category of
disability,
(v) residential setting (other than an
institutional setting), or
(vi) other grounds specified by the
Secretary.
(D) Maintenance of effort.--The plan must provide
assurances that, in the case of an individual receiving
medical assistance for home and community-based
services under the State medicaid plan as of the date
of the enactment of this Act, the State will continue
to make available (either under this plan, under the
State medicaid plan, or otherwise) to such individual
an appropriate level of assistance for home and
community-based services, taking into account the level
of assistance provided as of such date and the
individual's need for home and community-based
services.
(2) Services.--
(A) Specification.--Consistent with section 2104,
the plan shall specify--
(i) the services made available under the
plan,
(ii) the extent and manner in which such
services are allocated and made available to
individuals with disabilities, and
(iii) the manner in which services under
the plan are coordinated with each other and
with health and long-term care services
available outside the plan for individuals with
disabilities.
(B) Allocation.--The State plan--
(i) shall specify how it will allocate
services under the plan, during and after the
7-fiscal-year phase-in period beginning with
fiscal year 1996, among covered individuals
with disabilities, and
(ii) may not allocate such services based
on the income or other financial resources of
such individuals.
(C) Limitation on licensure or certification.--The
State may not subject consumer-directed providers of
personal assistance services to licensure,
certification, or other requirements which the
Secretary finds not to be necessary for the health and
safety of individuals with disabilities.
(D) Consumer choice.--To the extent possible, the
choice of an individual with disabilities (and that
individual's family) regarding which covered services
to receive and the providers who will provide such
services shall be followed.
(E) Requirement to serve low-income individuals.--
The plan shall assure that--
(i) the proportion of the population of
low-income individuals with disabilities in the
State that represents individuals with
disabilities who are provided home and
community-based services either under the plan,
under the State medicaid plan, or under both,
is not less than
(ii) the proportion of the population of
the State that represents individuals who are
low-income individuals.
(3) Cost sharing.--The plan shall impose cost sharing with
respect to covered services only in accordance with section
2105.
(4) Types of providers and requirements for
participation.--The plan shall specify--
(A) the types of service providers eligible to
participate in the program under the plan, which shall
include consumer-directed providers, and
(B) any requirements for participation applicable
to each type of service provider.
(5) Budget.--The plan shall specify how the State will
manage Federal and State funds available under the plan for
each fiscal year during the period beginning with fiscal year
1996 and ending with fiscal year 2003 and for each 5-fiscal-
year periods thereafter to serve all categories of individuals
with disabilities and meet the requirements of this subsection.
If the Secretary makes an adjustment under section
2109(a)(5)(C) for a year, each State shall update the
specifications under this paragraph to reflect the impact of
such an adjustment.
(6) Provider reimbursement.--
(A) Payment methods.--The plan shall specify the
payment methods to be used to reimburse providers for
services furnished under the plan. Such methods may
include retrospective reimbursement on a fee-for-
service basis, prepayment on a capitation basis,
payment by cash or vouchers to individuals with
disabilities, or any combination of these methods. In
the case of the use of cash or vouchers, the plan shall
specify how the plan will assure compliance with
applicable employment tax provisions.
(B) Payment rates.--The plan shall specify the
methods and criteria to be used to set payment rates
for services furnished under the plan (including rates
for cash payments or vouchers to individuals with
disabilities).
(C) Plan payment as payment in full.--The plan
shall restrict payment under the plan for covered
services to those providers that agree to accept the
payment under the plan (at the rates established
pursuant to subparagraph (B)) and any cost sharing
permitted or provided for under section 2105 as payment
in full for services furnished under the plan.
(7) Quality assurance and safeguards.--The State plan shall
provide for quality assurance and safeguards for applicants and
beneficiaries in accordance with section 2106.
(8) Advisory group.--The State plan shall--
(A) assure the establishment and maintenance of an
advisory group under section 2107(b), and
(B) include the documentation prepared by the group
under section 2107(b)(4).
(9) Administration.--
(A) State agency.--The plan shall designate a State
agency or agencies to administer (or to supervise the
administration of) the plan.
(B) Administrative expenditures.--Effective
beginning with fiscal year 2003, the plan shall contain
assurances that not more than 10 percent of
expenditures under the plan for all quarters in any
fiscal year shall be for administrative costs.
(C) Coordination.--The plan shall specify how the
plan--
(i) will be integrated with the State
medicaid plan, titles V and XX of the Social
Security Act, programs under the Older
Americans Act of 1965, programs under the
Developmental Disabilities Assistance and Bill
of Rights Act, the Individuals with
Disabilities Education Act, and any other
Federal or State programs that provide services
or assistance targeted to individuals with
disabilities, and
(ii) will be coordinated with health plans.
(10) Reports and information to secretary; audits.--The
plan shall provide that the State will furnish to the
Secretary--
(A) such reports, and will cooperate with such
audits, as the Secretary determines are needed
concerning the State's administration of its plan under
this part, including the processing of claims under the
plan, and
(B) such data and information as the Secretary may
require in order to carry out the Secretary's
responsibilities.
(11) Use of state funds for matching.--The plan shall
provide assurances that Federal funds will not be used to
provide for the State share of expenditures under this part.
(12) Health care worker redeployment requirement.--The plan
provides for compliance with the requirement of section
3074(a).
(b) Approval of Plans.--The Secretary shall approve a plan
submitted by a State if the Secretary determines that the plan--
(1) was developed by the State after consultation with
individuals with disabilities and representatives of groups of
such individuals, and
(2) meets the requirements of subsection (a).
The approval of such a plan shall take effect as of the first day of
the first fiscal year beginning after the date of such approval (except
that any approval made before January 1, 1996, shall be effective as of
January 1, 1996). In order to budget funds allotted under this part,
the Secretary may establish a deadline for the submission of such a
plan before the beginning of a fiscal year as a condition of its
approval effective with that fiscal year.
(c) Monitoring.--The Secretary shall monitor the compliance of
State plans with the eligibility requirements of section 2103 and may
monitor the compliance of such plans with other requirements of this
part.
(d) Regulations.--The Secretary shall issue such regulations as may
be appropriate to carry out this part on a timely basis.
SEC. 2103. INDIVIDUALS WITH DISABILITIES DEFINED.
(a) In General.--In this part, the term ``individual with
disabilities'' means any individual within one or more of the following
4 categories of individuals:
(1) Individuals requiring help with activities of daily
living.--An individual of any age who--
(A) requires hands-on or standby assistance,
supervision, or cueing (as defined in regulations) to
perform three or more activities of daily living (as
defined in subsection (c)), and
(B) is expected to require such assistance,
supervision, or cueing over a period of at least 100
days.
(2) Individuals with severe cognitive or mental
impairment.--An individual of any age--
(A) whose score, on a standard mental status
protocol (or protocols) appropriate for measuring the
individual's particular condition specified by the
Secretary, indicates either severe cognitive impairment
or severe mental impairment, or both;
(B) who--
(i) requires hands-on or standby
assistance, supervision, or cueing with one or
more activities of daily living,
(ii) requires hands-on or standby
assistance, supervision, or cueing with at
least such instrumental activity (or
activities) of daily living related to
cognitive or mental impairment as the Secretary
specifies, or
(iii) displays symptoms of one or more
serious behavioral problems (that is on a list
of such problems specified by the Secretary)
which create a need for supervision to prevent
harm to self or others; and
(C) whose is expected to meet the requirements of
subparagraphs (A) and (B) over a period of at least 100
days.
(3) Individuals with severe or profound mental
retardation.--An individual of any age who has severe or
profound mental retardation (as determined according to a
protocol specified by the Secretary).
(4) Severely disabled children.--An individual under 6
years of age who--
(A) has a severe disability or chronic medical
condition,
(B) but for receiving personal assistance services
or any of the services described in section 2104(d)(1),
would require institutionalization in a hospital,
nursing facility, or intermediate care facility for the
mentally retarded, and
(C) is expected to have such disability or
condition and require such services over a period of at
least 100 days.
(b) Determination.--
(1) In general.--The determination of whether an individual
is an individual with disabilities shall be made, by persons or
entities specified under the State plan, using a uniform
protocol consisting of an initial screening and assessment
specified by the Secretary. A State may collect additional
information, at the time of obtaining information to make such
determination, in order to provide for the assessment and plan
described in section 2104(b) or for other purposes. The State
shall establish a fair hearing process for appeals of such
determinations.
(2) Periodic reassessment.--The determination that an
individual is an individual with disabilities shall be
considered to be effective under the State plan for a period of
not more than 12 months (or for such longer period in such
cases as a significant change in an individual's condition that
may affect such determination is unlikely). A reassessment
shall be made if there is a significant change in an
individual's condition that may affect such determination.
(c) Activity of Daily Living Defined.--In this part, the term
``activity of daily living'' means any of the following: eating,
toileting, dressing, bathing, and transferring.
SEC. 2104. HOME AND COMMUNITY-BASED SERVICES COVERED UNDER STATE PLAN.
(a) Specification.--
(1) In general.--Subject to the succeeding provisions of
this section, the State plan under this part shall specify--
(A) the home and community-based services available
under the plan to individuals with disabilities (or to
such categories of such individuals), and
(B) any limits with respect to such services.
(2) Flexibility in meeting individual needs.--The services
shall be specified in a manner that permits sufficient
flexibility for providers to meet the needs of individuals with
disabilities in a cost effective manner. Subject to subsection
(e)(1)(B), such services may be delivered in an individual's
home, a range of community residential arrangements, or outside
the home.
(b) Requirement for Needs Assessment and Plan of Care.--
(1) In general.--The State plan shall provide for home and
community-based services to an individual with disabilities
only if--
(A) a comprehensive assessment of the individual's
need for home and community-based services (regardless
of whether all needed services are available under the
plan) has been made,
(B) an individualized plan of care based on such
assessment is developed, and
(C) such services are provided consistent with such
plan of care.
(2) Involvement of individuals.--The individualized plan of
care under paragraph (1)(B) for an individual with disabilities
shall--
(A) be developed by qualified individuals
(specified under the State plan),
(B) be developed and implemented in close
consultation with the individual and the individual's
family,
(C) be approved by the individual (or the
individual's representative), and
(D) be reviewed and updated not less often than
every 6 months.
(3) Plan of care.--The plan of care under paragraph (1)(B)
shall--
(A) specify which services specified under the
individual plan will be provided under the State plan
under this part,
(B) identify (to the extent possible) how the
individual will be provided any services specified
under the plan of care and not provided under the State
plan, and
(C) specify how the provision of services to the
individual under the plan will be coordinated with the
provision of other health care services to the
individual.
The State shall make reasonable efforts to identify and arrange
for services described in subparagraph (B). Nothing in this
subsection shall be construed as requiring a State (under the
State plan or otherwise) to provide all the services specified
in such a plan.
(c) Mandatory Coverage of Personal Assistance Services.--The State
plan shall include, in the array of services made available to each
category of individuals with disabilities, both agency-administered and
consumer-directed personal assistance services (as defined in
subsection (g)).
(d) Additional Services.--
(1) Types of services.--Subject to subsection (e), services
available under a State plan under this part shall include any
(or all) of the following:
(A) Case management.
(B) Homemaker and chore assistance.
(C) Home modifications.
(D) Respite services.
(E) Assistive devices.
(F) Adult day services.
(G) Habilitation and rehabilitation.
(H) Supported employment.
(I) Home health services.
(J) Any other care or assistive services (approved
by the Secretary) that the State determines will help
individuals with disabilities to remain in their homes
and communities.
(2) Criteria for selection of services.--The State plan
shall specify--
(A) the methods and standards used to select the
types, and the amount, duration, and scope, of services
to be covered under the plan and to be available to
each category of individuals with disabilities, and
(B) how the types, and the amount, duration, and
scope, of services specified meet the needs of
individuals within each of the 4 categories of
individuals with disabilities.
(e) Exclusions and Limitations.--
(1) In general.--A State plan may not provide for coverage
of--
(A) room and board,
(B) services furnished in a hospital, nursing
facility, intermediate care facility for the mentally
retarded, or other institutional setting specified by
the Secretary, or
(C) items and services to the extent coverage is
provided for the individual under a health plan or the
medicare program.
(2) Taking into account informal care.--A State plan may
take into account, in determining the amount and array of
services made available to covered individuals with disability,
the availability of informal care.
(f) Payment for Services.--A State plan may provide for the use
of--
(1) vouchers,
(2) cash payments directly to individuals with
disabilities,
(3) capitation payments to health plans, and
(4) payment to providers,
to pay for covered services.
(g) Personal Assistance Services.--
(1) In general.--In this section, the term ``personal
assistance services'' means those services specified under the
State plan as personal assistance services and shall include at
least hands-on and standby assistance, supervision, and cueing
with activities of daily living, whether agency-administered or
consumer-directed (as defined in paragraph (2)).
(2) Consumer-directed; agency-administered.--In this part:
(A) The term ``consumer-directed'' means, with
reference to personal assistance services or the
provider of such services, services that are provided
by an individual who is selected and managed (and, at
the individual's option, trained) by the individual
receiving the services.
(B) The term ``agency-administered'' means, with
respect to such services, services that are not
consumer-directed.
SEC. 2105. COST SHARING.
(a) No or Nominal Cost Sharing for Poorest.--The State plan may not
impose any cost sharing (other than nominal cost sharing) for
individuals with income (as determined under subsection (c)) less than
150 percent of the official poverty line (referred to in section
1902(25)(A)) applicable to a family of the size involved (determined
without regard to section 1902(25)(B)).
(b) Sliding Scale for Remainder.--The State plan shall impose cost
sharing in the form of coinsurance (based on the amount paid under the
State plan for a service)--
(1) at a rate of 10 percent for individuals with
disabilities with income not less than 150 percent, and less
than 200 percent, of such official poverty line (as so
applied);
(2) at a rate of 20 percent for such individuals with
income not less than 200 percent, and less than 250 percent, of
such official poverty line (as so applied); and
(3) at a rate of 25 percent for such individuals with
income equal to at least 250 percent of such official poverty
line (as so applied).
(c) Determination of Income for Purposes of Cost Sharing.--The
State plan shall specify the process to be used to determine the income
of an individual with disabilities for purposes of this section. Such
process shall be consistent with standards specified by the Secretary.
SEC. 2106. QUALITY ASSURANCE AND SAFEGUARDS.
(a) Quality Assurance.--The State plan shall specify how the State
will ensure and monitor the quality of services, including--
(1) safeguarding the health and safety of individuals with
disabilities,
(2) the minimum standards for agency providers and how such
standards will be enforced,
(3) the minimum competency requirements for agency provider
employees who provide direct services under this part and how
the competency of such employees will be enforced,
(4) obtaining meaningful consumer input, including consumer
surveys that measure the extent to which participants receive
the services described in the plan of care and participant
satisfaction with such services,
(5) participation in quality assurance activities, and
(6) specifying the role of the long-term care ombudsman
(under the Older Americans Act of 1965) and the Protection and
Advocacy Agency (under the Developmental Disabilities
Assistance and Bill of Rights Act) in assuring quality of
services and protecting the rights of individuals with
disabilities.
(b) Safeguards.--
(1) Confidentiality.--The State plan shall provide
safeguards which restrict the use or disclosure of information
concerning applicants and beneficiaries to purposes directly
connected with the administration of the plan (including
performance reviews under section 2602).
(2) Safeguards against abuse.--The State plans shall
provide safeguards against physical, emotional, or financial
abuse or exploitation (specifically including appropriate
safeguards in cases where payment for program benefits is made
by cash payments or vouchers given directly to individuals with
disabilities).
SEC. 2107. ADVISORY GROUPS.
(a) Federal Advisory Group.--
(1) Establishment.--The Secretary shall establish an
advisory group, to advise the Secretary and States on all
aspects of the program under this part.
(2) Composition.--The group shall be composed of
individuals with disabilities and their representatives,
providers, Federal and State officials, and local community
implementing agencies. A majority of its members shall be
individuals with disabilities and their representatives.
(b) State Advisory Groups.--
(1) In general.--Each State plan shall provide for the
establishment and maintenance of an advisory group to advise
the State on all aspects of the State plan under this part.
(2) Composition.--Members of each advisory group shall be
appointed by the Governor (or other chief executive officer of
the State) and shall include individuals with disabilities and
their representatives, providers, State officials, and local
community implementing agencies. A majority of its members
shall be individuals with disabilities and their
representatives.
(3) Selection of members.--Each State shall establish a
process whereby all residents of the State, including
individuals with disabilities and their representatives, shall
be given the opportunity to nominate members to the advisory
group.
(4) Particular concerns.--Each advisory group shall--
(A) before the State plan is developed, advise the
State on guiding principles and values, policy
directions, and specific components of the plan,
(B) meet regularly with State officials involved in
developing the plan, during the development phase, to
review and comment on all aspects of the plan,
(C) participate in the public hearings to help
assure that public comments are addressed to the extent
practicable,
(D) document any differences between the group's
recommendations and the plan,
(E) document specifically the degree to which the
plan is consumer-directed, and
(F) meet regularly with officials of the designated
State agency (or agencies) to provide advice on all
aspects of implementation and evaluation of the plan.
SEC. 2108. PAYMENTS TO STATES.
(a) In General.--Subject to section 2102(a)(9)(B) (relating to
limitation on payment for administrative costs), the Secretary, in
accordance with the Cash Management Improvement Act, shall authorize
payment to each State with a plan approved under this part, for each
quarter (beginning on or after January 1, 1996), from its allotment
under section 2109(b), an amount equal to--
(1) the Federal matching percentage (as defined in
subsection (b)) of amount demonstrated by State claims to have
been expended during the quarter for home and community-based
services under the plan for individuals with disabilities; plus
(2) an amount equal to 90 percent of amount expended during
the quarter under the plan for activities (including
preliminary screening) relating to determination of eligibility
and performance of needs assessment; plus
(3) an amount equal to 90 percent (or, beginning with
quarters in fiscal year 2003, 75 percent) of the amount
expended during the quarter for the design, development, and
installation of mechanical claims processing systems and for
information retrieval; plus
(4) an amount equal to 50 percent of the remainder of the
amounts expended during the quarter as found necessary by the
Secretary for the proper and efficient administration of the
State plan.
(b) Federal Matching Percentage.--
(1) In general.--In subsection (a), the term ``Federal
matching percentage'' means, with respect to a State, the
reference percentage specified in paragraph (2) increased by 28
percentage points, except that the Federal matching percentage
shall in no case be less than 78 percent or more than 95
percent.
(2) Reference percentage.--
(A) In general.--The reference percentage specified
in this paragraph is 100 percent less the State
percentage specified in subparagraph (B), except that--
(i) the percentage under this paragraph
shall in no case be less than 50 percent or
more than 83 percent, and
(ii) the percentage for Puerto Rico, the
Virgin Islands, Guam, the Northern Mariana
Islands, and American Samoa shall be 50
percent.
(B) State percentage.--The State percentage
specified in this subparagraph is that percentage which
bears the same ratio to 45 percent as the square of the
per capita income of such State bears to the square of
the per capita income of the continental United States
(including Alaska) and Hawaii.
(c) Payments on Estimates with Retrospective Adjustments.--The
method of computing and making payments under this section shall be as
follows:
(1) The Secretary shall, prior to the beginning of each
quarter, estimate the amount to be paid to the State under
subsection (a) for such quarter, based on a report filed by the
State containing its estimate of the total sum to be expended
in such quarter, and such other information as the Secretary
may find necessary.
(2) From the allotment available therefore, the Secretary
shall provide for payment of the amount so estimated, reduced
or increased, as the case may be, by any sum (not previously
adjusted under this section) by which the Secretary finds that
the estimate of the amount to be paid the State for any prior
period under this section was greater or less than the amount
which should have been paid.
(d) Application of Rules Regarding Limitations on Provider-Related
Donations and Health Care Related Taxes.--The provisions of section
1903(w) of the Social Security Act shall apply to payments to States
under this section in the same manner as they apply to payments to
States under section 1903(a) of such Act .
SEC. 2109. TOTAL FEDERAL BUDGET; ALLOTMENTS TO STATES.
(a) Total Federal Budget.--
(1) Fiscal years 1996 through 2003.--Subject to paragraph
(5)(C), for purposes of this part, the total Federal budget for
State plans under this part for each of fiscal years 1996
through 2003 is the following:
(A) For fiscal year 1996, $4.5 billion.
(B) For fiscal year 1997, $7.8 billion.
(C) For fiscal year 1998, $11.0 billion.
(D) For fiscal year 1999, $14.7 billion.
(E) For fiscal year 2000, $18.7 billion.
(F) For fiscal year 2001, $26.7 billion.
(G) For fiscal year 2002, $35.5 billion.
(H) For fiscal year 2003, $38.3 billion.
(2) Subsequent fiscal years.--For purposes of this part,
the total Federal budget for State plans under this part for
each fiscal year after fiscal year 2003 is the total Federal
budget under this subsection for the preceding fiscal year
multiplied by--
(A) a factor (described in paragraph (3))
reflecting the change in the CPI for the fiscal year,
and
(B) a factor (described in paragraph (4))
reflecting the change in the number of individuals with
disabilities for the fiscal year.
(3) CPI increase factor.--For purposes of paragraph (2)(A),
the factor described in this paragraph for a fiscal year is the
ratio of--
(A) the annual average index of the consumer price
index for the preceding fiscal year, to--
(B) such index, as so measured, for the second
preceding fiscal year.
(4) Disabled population factor.--For purposes of paragraph
(2)(B), the factor described in this paragraph for a fiscal
year is 100 percent plus (or minus) the percentage increase (or
decrease) change in the disabled population of the United
States (as determined for purposes of the most recent update
under subsection (b)(3)(D)).
(5) Additional funds due to medicaid offsets.--
(A) In general.--Each participating State must
provide the Secretary with information concerning
offsets and reductions in the medicaid program
resulting from home and community-based services
provided disabled individuals under this part, that
would have been paid for such individuals under the
State medicaid plan but for the provision of similar
services under the program under this part. At the time
a State first submits its plan under this title and
before each subsequent fiscal year (through fiscal year
2003), the State also must provide the Secretary with
such budgetary information (for each fiscal year
through fiscal year 2003), as the Secretary determines
to be necessary to carry out this paragraph.
(B) Reports.--Each State with a program under this
part shall submit such reports to the Secretary as the
Secretary may require in order to monitor compliance
with subparagraph (A).
(C) Adjustments to federal budget.--
(i) In general.--For each fiscal year
(beginning with fiscal year 1996 and ending
with fiscal year 2003) and based on a review of
information submitted under subparagraph (A),
the Secretary shall determine the amount by
which the total Federal budget under subsection
(a) will increase. The amount of such increase
for a fiscal year shall be limited to the
reduction in Federal expenditures of medical
assistance (as determined by Secretary) that
would have been made under title XIX of the
Social Security Act for home and community
based services for disabled individuals but for
the provision of similar services under the
program under this part.
(ii) Annual publication.--The Secretary
shall publish before the beginning of such
fiscal year, the revised total Federal budget
under this subsection for such fiscal year (and
succeeding fiscal years before fiscal year
2003).
(D) No duplicate payment.--No payment may be made
to a State under this section for any services to the
extent that the State received payment for such
services under section 1903(a) of the Social Security
Act.
(E) Construction.--Nothing in this subsection shall
be construed as requiring States to determine
eligibility for medical assistance under the State
medicaid plan on behalf of individuals receiving
assistance under this part.
(b) Allotments to States.--
(1) In general.--The Secretary shall allot to each State
for each fiscal year an amount that bears the same ratio to the
total Federal budget for the fiscal year (specified under
paragraph (1) or (2) of subsection (a)) as the State allotment
factor (under paragraph (2) for the State for the fiscal year)
bears to the sum of such factors for all States for that fiscal
year.
(2) State allotment factor.--
(A) In general.--For each State for each fiscal
year, the Secretary shall compute a State allotment
factor equal to the sum of--
(i) the base allotment factor (specified in
subparagraph (B)), and
(ii) the low income allotment factor
(specified in subparagraph (C)),
for the State for the fiscal year.
(B) Base allotment factor.--The base allotment
factor, specified in this subparagraph, for a State for
a fiscal year is equal to the product of the following:
(i) Number of individuals with
disabilities.--The number of individuals with
disabilities in the State (determined under
paragraph (3)) for the fiscal year.
(ii) 80 percent of the national per capita
budget.--80 percent of the national average per
capita budget amount (determined under
paragraph (4)) for the fiscal year.
(iii) Wage adjustment factor.--The wage
adjustment factor (determined under paragraph
(5)) for the State for the fiscal year.
(iv) Federal matching rate.--The Federal
matching rate (determined under section
2108(b)) for the fiscal year.
(C) Low income allotment factor.--The low income
allotment factor, specified in this subparagraph, for a
State for a fiscal year is equal to the product of the
following:
(i) Number of individuals with
disabilities.--The number of individuals with
disabilities in the State (determined under
paragraph (3)) for the fiscal year.
(ii) 10 percent of the national per capita
budget.--10 percent of the national average per
capita budget amount (determined under
paragraph (4)) for the fiscal year.
(iii) Wage adjustment factor.--The wage
adjustment factor (determined under paragraph
(5)) for the State for the fiscal year.
(iv) Federal matching rate.--The Federal
matching rate (determined under section
2108(b)) for the fiscal year.
(v) Low income index.--The low income index
(determined under paragraph (6)) for the State
for the preceding fiscal year.
(3) Number of individuals with disabilities.--The number of
individuals with disabilities in a State for a fiscal year
shall be determined as follows:
(A) Base.--The Secretary shall determine the number
of individuals in the State by age, sex, and income
category, based on the 1990 decennial census, adjusted
(as appropriate) by the March 1994 current population
survey.
(B) Disability prevalence level by population
category.--The Secretary shall determine, for each such
age, sex, and income category, the national average
proportion of the population of such category that
represents individuals with disabilities. The Secretary
may conduct periodic surveys in order to determine such
proportions.
(C) Base disabled population in a state.--The
number of individuals with disabilities in a State in
1994 is equal to the sum of the products, for such each
age, sex, and income category, of--
(i) the population of individuals in the
State in the category (determined under
subparagraph (A)), and
(ii) the national average proportion for
such category (determined under subparagraph
(B)).
(D) Update.--The Secretary shall determine the
number of individuals with disabilities in a State in a
fiscal year equal to the number determined under
subparagraph (C) for the State increased (or decreased)
by the percentage increase (or decrease) in the
disabled population of the State as determined under
the current population survey from 1994 to the year
before the fiscal year involved.
(4) National per capita budget amount.--The national
average per capita budget amount, for a fiscal year, is--
(A) the total Federal budget specified under
subsection (a) for the fiscal year; divided by
(B) the sum, for the fiscal year, of the numbers of
individuals with disabilities (determined under
paragraph (3)) for all the States for the fiscal year.
(5) Wage adjustment factor.--The wage adjustment factor,
for a State for a fiscal year, is equal to the ratio of--
(A) the average hourly wages for service workers
(other than household or protective services) in the
State, to
(B) the national average hourly wages for service
workers (other than household or protective services).
The hourly wages shall be determined under this paragraph based
on data from the most recent decennial census for which such
data are available.
(6) Low income index.--The low income index for each State
for a fiscal year is the ratio, determined for the preceding
fiscal year, of--
(A) the percentage of the State's population that
has income below 150 percent of the poverty level, to
(B) the percentage of the population of the United
States that has income below 150 percent of the poverty
level.
Such percentages shall be based on data from the most recent
decennial census for which such data are available, adjusted by
data from the most recent current population survey as
determined appropriate by the Secretary.
(c) State Entitlement.--This part constitutes budget authority in
advance of appropriations Acts, and represents the obligation of the
Federal Government to provide for the payment to States of amounts
described in subsection (a).
PART 2--MEDICAID NURSING HOME IMPROVEMENTS
SEC. 2201. REFERENCE TO AMENDMENTS.
For amendments to the medicaid program under title XIX of the
Social Security Act to improve nursing home benefits under such
program, see part 2 of subtitle C of title IV.
PART 3--PRIVATE LONG-TERM CARE INSURANCE
Subpart A--General Provisions
SEC. 2301. FEDERAL REGULATIONS; PRIOR APPLICATION OR CERTAIN
REQUIREMENTS.
(a) In General.--The Secretary, with the advice and assistance of
the Advisory Council, as appropriate, shall promulgate regulations as
necessary to implement the provisions of this part, in accordance with
the timetable specified in subsection (b).
(b) Timetable for Publication of Regulations.--
(1) Federal register notice.--Within 120 days after the
date a majority of the members are first appointed to the
Advisory Council pursuant to section 2302, the Secretary shall
publish in the Federal Register a notice setting forth the
projected timetable for promulgation of regulations required
under this part. Such timetable shall indicate which
regulations are proposed to be published by the end of the
first, second, and third years after appointment of the
Advisory Council.
(2) Final deadline.--All regulations required under this
part shall be published by the end of the third year after
appointment of the Advisory Council.
(c) Provisions Effective Without Regard to Promulgation of
Regulations.--
(1) In general.--Notwithstanding any other provision of
this part, insurers shall be required, not later than 6 months
after the enactment of this Act, regardless of whether final
implementing regulations have been promulgated by the
Secretary, to comply with the following provisions of this
part:
(A) Section 2321(c) (standard outline of coverage);
(B) Section 2321(d) (reporting to State insurance
commissioners);
(C) Section 2322(b) (preexisting condition
exclusions);
(D) Section 2322(c) (limiting conditions on
benefits);
(E) Section 2322(d) (inflation protection);
(F) Section 2324 (sales practices);
(G) Section 2325 (continuation, renewal,
replacement, conversion, and cancellation of policies);
and
(H) Section 2326 (payment of benefits).
(2) Interim requirements.--Before the effective date of
applicable regulations promulgated by the Secretary
implementing requirements of this part as specified below, such
requirements will be considered to be met--
(A) in the case of section 2321(c) (requiring a
standard outline of coverage), if the long-term care
insurance policy meets the requirements of section
6.G.(2) of the NAIC Model Act and of section 24 of the
NAIC Model Regulation;
(B) in the case of section 2321(d) (requiring
reporting to the State insurance commissioner), if the
insurer meets the requirements of section 14 of the
NAIC Model Regulation;
(C) in the case of section 2322(c)(1) (general
requirements concerning limiting conditions on
benefits), if such policy meets the requirements of
section 6.D. of the NAIC Model Act;
(D) in the case of section 2322(c)(2) (limiting
conditions on home health care or community-based
services) if such policy meets the requirements of
section 11 of the NAIC Model Regulations;
(E) in the case of section 2322(d) (concerning
inflation protection), if the insurer meets the
requirements of section 12 of the NAIC Model
Regulation;
(F) in the case of section 2324(b) (concerning
applications for the purchase of insurance), if the
insurer meets the requirements of section 10 of the
NAIC Model Regulation;
(G) in the case of section 2324(d) (concerning
compensation for the sale of policies), if the insurer
meets the requirements of the optional regulation
entitled ``Permitted Compensation Arrangements''
included in the NAIC Model Regulation;
(H) in the case of section 2324(g) (concerning
sales through employers or membership organizations),
if the insurer and the membership organization meet the
requirements of section 21.C. of the NAIC Model
Regulation;
(I) in the case of section 2324(h) (concerning
interstate sales of group policies), if the insurer and
the policy meet the requirements of section 5 of the
NAIC Model Act; and
(J) in the case of section 2325(f) (concerning
continuation, renewal, replacement, and conversion of
policies), if the insurer and the policy meet the
requirements of section 7 of the NAIC Model Regulation.
SEC. 2302. NATIONAL LONG-TERM CARE INSURANCE ADVISORY COUNCIL.
(a) Appointment.--The Secretary shall appoint an advisory board to
be known as the National Long-Term Care Insurance Advisory Council.
(b) Composition.--
(1) Number and qualifications of members.--The Advisory
Council shall consist of 5 members, each of whom has
substantial expertise in matters relating to the provision and
regulation of long-term care insurance. At least one member
shall have experience as a State insurance commissioner or
legislator with expertise in policy development with respect
to, and regulation of, long-term care insurance.
(2) Terms of Office.--
(A) In general.--Except as otherwise provided in
this subsection, members shall be appointed for terms
of office of 5 years.
(B) Initial members.--Of the initial members of the
Council, one shall be appointed for a term of 5 years,
one for 4 years, one for 3 years, one for 2 years, and
one for 1 year.
(C) Two-term limit.--No member shall be eligible to
serve in excess of two consecutive terms, but may
continue to serve until such member's successor is
appointed.
(3) Vacancies.--Any member appointed to fill a vacancy
occurring before the expiration of the term of such member's
predecessor shall be appointed for the remainder of such term.
(4) Removal.--No member may be removed during the member's
term of office except for just and sufficient cause.
(c) Chairperson.--The Secretary shall appoint a Chairperson from
among the members.
(d) Compensation.--
(1) In general.--Except as provided in paragraph (3),
members of the Advisory Council, while serving on business of
the Advisory Council, shall be entitled to receive compensation
at a rate not to exceed the daily equivalent of the rate
specified for level V of the Executive Schedule under section
5316 of title 5, United States Code.
(2) Travel.--Except as provided in paragraph (3), members
of the Advisory Council, while serving on business of the
Advisory Council away from their homes or regular places of
business, may be allowed travel expenses (including per diem in
lieu of subsistence) as authorized by section 5703(b) of title
5, United States Code, for persons in the Government service
employed intermittently.
(3) Restriction.--A member of the Advisory Council may not
be compensated under this section if the member is receiving
compensation or travel expenses from another source while
serving on business of the Advisory Council.
(e) Meetings.--The Advisory Council shall meet not less often than
2 times a year at the direction of the Chairperson.
(f) Staff and Support.--
(1) In general.--The Advisory Council shall have a salaried
executive director appointed by the Chairperson, and staff
appointed by the executive director with the approval of the
Chairperson.
(2) Federal entities.--The head of each Federal department
and agency shall make available to the Advisory Council such
information and other assistance as it may require to carry out
its responsibilities.
(g) General Responsibilities.--The Advisory Council shall--
(1) provide advice, recommendations, and assistance to the
Secretary on matters relating to long-term care insurance as
specified in this part and as otherwise required by the
Secretary;
(2) collect, analyze, and disseminate information relating
to long-term care insurance in order to increase the
understanding of insurers, providers, consumers, and regulatory
bodies of the issues relating to, and to facilitate
improvements in, such insurance;
(3) develop for the Secretary's consideration proposed
models, standards, requirements, and procedures relating to
long-term care insurance, as appropriate, with respect to the
content and format of insurance policies, agent and insurer
practices concerning the sale and servicing of such policies,
and regulatory activities; and
(4) monitor the development of the long-term care insurance
market (including policies, marketing practices, pricing,
eligibility and benefit preconditions, and claims payment
procedures) and advise the Secretary concerning the need for
regulatory changes.
(h) Specific Matters for Consideration.--The Advisory Council shall
consider, and provide views and recommendations to the Secretary
concerning, the following matters relating to long-term care insurance:
(1) Uniform terms, definitions, and formats.--The Advisory
Council shall develop and propose to the Secretary uniform
terminology, definitions, and formats for use in long-term care
insurance policies.
(2) Standard outline of coverage.--The Advisory Council
shall develop and propose to the Secretary a standard format
for use by all insurers offering long-term care policies for
the outline of coverage required pursuant to section 2321(c).
(3) Premiums.--The Advisory Council shall consider, and
make recommendations to the Secretary concerning--
(A) whether Federal standards should be established
governing the amounts of and rates of increase in
premiums in long-term care policies, and
(B) if so, what factors should be taken into
account (and whether such factors should include the
age of the insured, actuarial information, cost of
care, lapse rates, financial reserve requirements,
insurer solvency, and tax treatment of premiums, and
benefits.
(4) Upgrades of coverage.--The Advisory Council shall
consider, and make recommendations to the Secretary concerning,
whether Federal standards are needed governing the terms and
conditions insurers may place on insured individuals'
eligibility to obtain improved coverage (including any
restrictions considered advisable with respect to premium
increases, agent commissions, medical underwriting, and age
rating).
(5) Threshold conditions for payment of benefits.--The
Advisory Council shall--
(A) consider, and make recommendations to the
Secretary concerning, the advisability of establishing
standardized sets of threshold conditions (based on
degrees of functional or cognitive impairment or on
other conditions) for payment of covered benefits;
(B) to the extent found appropriate, recommend to
the Secretary specific sets of threshold conditions to
be used for such purpose;
(C) develop and propose to the Secretary, with
respect to assessments of insured individuals' levels
of need for purposes of receipt of covered benefits--
(i) professional qualification standards
applicable to individuals making such
determinations; and
(ii) uniform procedures and formats for use
in performing and documenting such assessments.
(6) Dispute resolution.--The Advisory Council shall
consider, and make recommendations to the Secretary concerning,
procedures that insurers and States should be required to
implement to afford insured individuals a reasonable
opportunity to dispute denial of benefits under a long-term
care insurance policy.
(7) Sales and servicing of policies.--The Advisory Council
shall consider, and make recommendations to the Secretary
concerning--
(A) training and certification to be required of
agents involved in selling or servicing long-term care
insurance policies;
(B) appropriate limits on commissions or other
compensation paid to agents for the sale or servicing
of such policies;
(C) sales practices that should be prohibited or
limited with respect to such policies (including any
financial limits that should be applied concerning the
individuals to whom such policies may be sold); and
(D) appropriate standards and requirements with
respect to sales of such policies by or through
employers and other entities, to employees, members, or
affiliates of such entities.
(8) Continuing care retirement communities.--The Advisory
Council shall consider, and make recommendations to the
Secretary concerning, the extent to which the long-term care
insurance aspects of continuing care retirement community
arrangements should be subject to regulation under this part
(and the Secretary, in consultation with the Secretary of the
Treasury, shall consider such recommendations and promulgate
appropriate regulations).
(i) Activities.--In order to carry out its responsibilities under
this part, the Advisory Council is authorized to--
(1) consult individuals and public and private entities
with experience and expertise in matters relating to long-term
care insurance (and shall consult the National Association of
Insurance Commissioners);
(2) conduct meetings and hold hearings;
(3) conduct research (either directly or under grant or
contract);
(4) collect, analyze, publish, and disseminate data and
information (either directly or under grant or contract); and
(5) develop model formats and procedures for insurance
policies and marketing materials; and develop proposed
standards, rules, and procedures for regulatory programs.
(j) Authorization of Appropriations.--There are authorized to be
appropriated, for activities of the Advisory Council, $1,500,000 for
fiscal year 1995, and $2,000,000 for each succeeding fiscal year.
SEC. 2303. RELATION TO STATE LAW.
Nothing in this part shall be construed as preventing a State from
applying standards that provide greater protection to insured
individuals under long-term care insurance policies than the standards
promulgated under this part, except that such State standards may not
be inconsistent with any of the requirements of this part or of
regulations hereunder.
SEC. 2304. DEFINITIONS.
For purposes of this part:
(1) Activity of daily living.--The term ``activity of daily
living'' means any of the following: eating, toileting,
dressing, bathing, and transferring.
(2) Adult day care.--The term ``adult day care'' means a
program providing social and health-related services during the
day to six or more adults with disabilities (or such smaller
number as the Secretary may specify in regulations) in a
community group setting outside the home.
(3) Advisory council.--The term ``Advisory Council'' means
the National Long-Term Care Insurance Advisory Council
established pursuant to section 2302.
(4) Certificate.--The term ``certificate'' means a document
issued to an individual as evidence of such individual's
coverage under a group insurance policy.
(5) Continuing care retirement community.--The term
``continuing care retirement community'' means a residential
community operated by a private entity that enters into
contractual agreements with residents under which such entity
guarantees, in consideration for residents' purchase of or
periodic payment for membership in the community, to provide
for such residents' future long-term care needs.
(6) Designated representative.--The term ``designated
representative'' means the person designated by an insured
individual (or, if such individual is incapacitated, pursuant
to an appropriate administrative or judicial procedure) to
communicate with the insurer on behalf of such individual in
the event of such individual's incapacitation.
(7) Home health care.--The term ``home health care'' means
medical and nonmedical services including such services as
homemaker services, assistance with activities of daily living,
and respite care provided to individuals in their residences.
(8) Insured individual.--The term ``insured individual''
means, with respect to a long-term care insurance policy, any
individual who has coverage of benefits under such policy.
(9) Insurer.--The term ``insurer'' means any person that
offers or sells an individual or group long-term care insurance
policy under which such person is at risk for all or part of
the cost of benefits under the policy, and includes any agent
of such person.
(10) Long-term care insurance policy.--The term ``long-term
care insurance policy'' has the meaning given that term in
section 4 of the NAIC Model Act, except that the last sentence
of such section shall not apply.
(11) NAIC model act.--The term ``NAIC Model Act'' means the
Long-Term Care Insurance Model Act published by the NAIC, as
amended through January 1993.
(12) NAIC model regulation.--The term ``NAIC Model
Regulation'' means the Long-Term Care Insurance Model
Regulation published by the NAIC, as amended through January
1993.
(13) Nursing facility.--The term ``nursing facility'' means
a facility licensed by the State to provide to residents--
(A) skilled nursing care and related services for
residents who require medical or nursing care;
(B) rehabilitation services for the rehabilitation
of injured, disabled, or sick individuals, or
(C) on a regular basis, health-related care and
services to individuals who because of their mental or
physical condition require care and services (above the
level of room and board) which can be made available to
them only through institutional facilities.
(14) Policyholder.--The term ``policyholder'' means the
entity which is the holder of record of a group long-term care
insurance policy.
(15) Residential care facility.--The term ``residential
care facility'' means a facility (including a nursing facility)
that--
(A) provides to residents medical or personal care
services (including at a minimum assistance with
activities of daily living) in a setting other than an
individual or single-family home, and
(B) does not provide services of a higher level
than can be provided by a nursing facility.
(16) Respite care.--The term ``respite care'' means the
temporary provision of care (including assistance with
activities of daily living) to an individual, in the
individual's home or another setting in the community, for the
purpose of affording such individual's unpaid caregiver a
respite from the responsibilities of such care.
(17) State insurance commissioner.--The term ``State
insurance commissioner'' means the State official bearing such
title, or, in the case of a jurisdiction where such title is
not used, the State official with primary responsibility for
the regulation of insurance.
Subpart B--Federal Standards and Requirements
SEC. 2321. REQUIREMENTS TO FACILITATE UNDERSTANDING AND COMPARISON OF
BENEFITS.
(a) In General.--The Secretary, after considering (where
appropriate) recommendations of the Advisory Council, shall promulgate
regulations designed to standardize formats and terminology used in
long-term care insurance policies, to require insurers to provide to
customers and beneficiaries information on the range of public and
private long-term care coverage available, and to establish such other
requirements as may be appropriate to promote consumer understanding
and facilitate comparison of benefits, which shall include at a minimum
the requirements specified in this section.
(b) Uniform Terms, Definitions, and Formats.--Insurers shall be
required to use, in long-term care insurance policies, uniform
terminology, definitions of terms, and formats, in accordance with
regulations promulgated by the Secretary, after considering
recommendations of the Advisory Council.
(c) Standard Outline of Coverage.--
(1) In general.--Insurers shall be required to develop for
each long-term care insurance policy offered or sold, to
include as a part of each such policy, and to make available to
each potential purchaser and furnish to each insured individual
and policyholder, an outline of coverage under such policy
that--
(A) includes the elements specified in paragraph
(2),
(B) is in a uniform format (as prescribed by
Secretary on the basis of recommendations by the
Advisory Council),
(C) accurately and clearly reflects the contents of
the policy, and
(D) is updated periodically on such timetable as
may be required by the Secretary (or more frequently as
necessary to reflect significant changes in outlined
information).
(2) Contents of outline.--The outline of coverage for each
long-term care insurance policy shall include at least the
following:
(A) Benefits.--A description of--
(i) the principal benefits covered,
including the extent of--
(I) benefits for services furnished
in residential care facilities, and
(II) other benefits,
(ii) the principal exclusions from and
limitations on coverage,
(iii) the terms and conditions, if any,
upon which the insured individual may obtain
upgraded benefits, and
(iv) the threshold conditions for
entitlement to receive benefits.
(B) Continuation, renewal, and conversion.--A
statement of the terms under which a policy may be--
(i) returned (and premium refunded) during
an initial examination period,
(ii) continued in force or renewed,
(iii) converted to an individual policy (in
the case of coverage under a group policy),
(C) Cancellation.--A statement of the circumstances
in which a policy may be terminated, and the refund or
nonforfeitures benefits (if any) applicable in each
such circumstance, including--
(i) death of the insured individual,
(ii) nonpayment of premiums,
(iii) election by the insured individual
not to renew,
(iv) any other circumstance.
(D) Premium.--A statement of--
(i) the total annual premium, and the
portion of such premium attributable to each
covered benefit,
(ii) any reservation by the insurer of a
right to change premiums,
(iii) any limit on annual premium
increases,
(iv) any expected premium increases
associated with automatic or optional benefit
increases (including inflation protection), and
(v) any circumstances under which payment
of premium is waived.
(E) Declaration concerning summary.--A statement,
in bold face type on the face of the document in
language understandable to the average individual, that
the outline of coverage is a summary only, not a
contract of insurance, and that the policy contains the
contractual provisions that govern.
(F) Cost/value comparison.--
(i) Information on average costs (and
variation in such costs) for nursing facility
care (and such other care as the Secretary may
specify) and information on the value of
benefits relative to such costs.
(ii) A comparison of benefits, over a
period of at least 20 years, for policies with
and without inflation protection.
(iii) A declaration as to whether the
amount of benefits will increase over time,
and, if so, a statement of the type and amount
of, any limitations on, and any premium
increases for, such benefit increases.
(G) Tax treatment.--A statement of the Federal
income tax treatment of premiums and benefits under the
policy, as determined by the Secretary of the Treasury.
(H) Other.--Such other information as the Secretary
may require.
(d) Reporting to State Insurance Commissioner.--Each insurer shall
be required to report at least annually, to the State insurance
commissioner of each State in which any long-term care insurance policy
of the insurer is sold, such information, in such format, as the
Secretary may specify with respect to each such policy, including--
(1) the standard outline of coverage required pursuant to
subsection (c);
(2) lapse rates and replacement rates for such policies;
(3) the ratio of premiums collected to benefits paid;
(4) reserves;
(5) written materials used in sale or promotion of such
policy; and
(6) any other information the Secretary may require.
(e) Comparison of Long-Term Care Coverage Alternatives.--Each
insurer shall be required to furnish to each individual before a long-
term care insurance policy of the insurer is sold to the individual
information on the conditions of eligibility for, and benefits under,
each of the following:
(1) Policies offered by the insurer.--The standard outline
of coverage, and such other information as the Secretary may
specify, with respect to each long-term care insurance policy
offered by the insurer.
(2) Comparison to other available private insurance.--
Information, in such format as may be required under this part,
on--
(A) benefits offered under long-term care insurance
policies of the insurer (and the threshold conditions
for receipt by an insured individual of each such
benefit); and
(B) additional benefits available under policies
offered by other private insurers (to the extent such
information is made available by the State insurance
commissioner).
(3) Public programs; regional alliances.--Information
furnished to the insurer, pursuant to section 2342(b)(2), by
the State in which such individual resides, on conditions of
eligibility for, and long-term care benefits (or the lack of
such benefits) under--
(A) each public long-term care program administered
by the State,
(B) the Medicare programs under title XVIII of the
Social Security Act; and
(C) each regional alliance operating in the State.
SEC. 2322. REQUIREMENTS RELATING TO COVERAGE.
(a) In General.--The Secretary, after considering (where
appropriate) recommendations of the Advisory Council, shall promulgate
regulations establishing requirements with respect to the terms of and
benefits under long-term care insurance policies, which shall include
at a minimum the requirements specified in this section.
(b) Limitations on Preexisting Condition Exclusions.--
(1) Initial policies.--A long-term care insurance policy
may not exclude or limit coverage for any service or benefit,
the need for which is the result of a medical condition or
disability because an insured individual received medical
treatment for, or was diagnosed as having, such condition
before the issuance of the policy, unless--
(A) the insurer, prior to issuance of the policy,
determines and documents (with evidence including
written evidence that such condition has been treated
or diagnosed by a qualified health care professional)
that the insured individual had such condition during
the 6-month period (or such longer period as the
Secretary may specify) ending on the effective date of
the policy; and
(B) the need or such service or benefit begins
within 6 months (or such longer period as the Secretary
may specify) following the effective date of the
policy.
(2) Replacement policies.--Solely for purposes of the
requirements of paragraph (1), with respect to an insured
individual, the effective date of a long-term care insurance
policy issued to replace a previous policy, with respect to
benefits which are the same as or substantially equivalent to
benefits under such previous policy, shall be considered to be
the effective date of such previous policy with respect to such
individual.
(c) Limiting Conditions on Benefits.--
(1) In general.--A long-term care insurance policy may
not--
(A) condition eligibility for benefits for a type
of service on the need for or receipt of any other type
of service (such as prior hospitalization or
institutionalization, or a higher level of care than
the care for which benefits are covered);
(B) condition eligibility for any benefit (where
the need for such benefit has been established by an
independent assessment of impairment) on any particular
medical diagnosis (including any acute condition) or on
one of a group of diagnoses;
(C) condition eligibility for benefits furnished by
licensed or certified providers on compliance by such
providers with conditions not required under Federal or
State law; or
(D) condition coverage of any service on provision
of such service by a provider, or in a setting,
providing a higher level of care than that required by
an insured individual.
(2) Home care or community-based services.--A long-term
care insurance policy that provides benefits for any home care
or community-based services provided in a setting other than a
residential care facility--
(A) may not limit such benefits to services
provided by registered nurses or licensed practical
nurses;
(B) may not limit such benefits to services
furnished by persons or entities participating in
programs under titles XVIII and XIX of the Social
Security Act and in part 1 of this subtitle; and
(C) must provide, at a minimum, benefits for
personal assistance with activities of daily living,
home health care, adult day care, and respite care.
(3) Nursing facility services.--A long-term care insurance
policy that provides benefits for any nursing facility
services--
(A) must provide benefits for such services
provided by all types of nursing facilities licensed by
the State, and
(B) may provide benefits for care in other
residential facilities.
(4) Prohibition on discrimination by diagnosis.--A long-
term care insurance policy may not provide for treatment of--
(A) Alzheimer's disease or any other progressive
degenerative dementia of an organic origin,
(B) any organic or inorganic mental illness,
(C) mental retardation or any other cognitive or
mental impairment, or
(D) HIV infection or AIDS,
different from the treatment of any other medical condition for
purposes of determining whether threshold conditions for the
receipt of benefits have been met, or the amount of benefits
under the policy.
(d) Inflation Protection.--
(1) Requirement to offer.--An insurer offering for sale any
long-term care insurance policy shall be required to afford the
purchaser the option to obtain coverage under such policy (upon
payment of increased premiums) of annual increases in benefits
at rates in accordance with paragraph (2).
(2) Rate increase in benefits.--For purposes of paragraph
(1), the benefits under a policy for each year shall be
increased by a percentage of the full value of benefits under
the policy for the previous year, which shall be not less than
5 percent of such value (or such other rate of increase as may
be determined by the Secretary to be adequate to offset
increases in the costs of long-term care services for which
coverage is provided under the policy).
(3) Requirement of written rejection.--Inflation protection
in accordance with paragraph (1) may be excluded from the
coverage under a policy only if the insured individual (or, if
different, the person responsible for payment of premiums) has
rejected in writing the option to obtain such coverage.
SEC. 2323. REQUIREMENTS RELATING TO PREMIUMS.
(a) In General.--The Secretary, after considering (where
appropriate) recommendations of the Advisory Council, shall promulgate
regulations establishing requirements applicable to premiums for long-
term care insurance policies, which shall include at a minimum the
requirements specified in this section.
(b) Limitations on Rates and Increases.--The Secretary, after
considering recommendations of the Advisory Council, may establish by
regulation such standards and requirements as may be determined
appropriate with respect to--
(1) mandatory or optional State procedures for review and
approval of premium rates and rate increases or decreases;
(2) limitations on the amount of initial premiums, or on
the rate or amount of premium increases;
(3) the factors to be taken into consideration by an
insurer in proposing, and by a State in approving or
disapproving, premium rates and increases; and
(4) the extent to which consumers should be entitled to
participate or be represented in the rate-setting process and
to have access to actuarial and other information relied on in
setting rates.
SEC. 2324. REQUIREMENTS RELATING TO SALES PRACTICES.
(a) In General.--The Secretary, after considering (where
appropriate) recommendations of the Advisory Council, shall promulgate
regulations establishing requirements applicable to the sale or
offering for sale of long-term care insurance policies, which shall
include at a minimum the requirements specified in this section.
(b) Applications.--Any insurer that offers any long-term care
insurance policy (including any group policy) shall be required to meet
such requirements with respect to the content, format, and use of
application forms for long-term care insurance as the Secretary may
require by regulation.
(c) Agent Training and Certification.--An insurer may not sell or
offer for sale a long-term care insurance policy through an agent who
does not comply with minimum standards with respect to training and
certification established by the Secretary after consideration of
recommendations by the Advisory Council.
(d) Compensation for Sale of Policies.--Compensation by an insurer
to an agent or agents for the sale of an original long-term care
insurance policy, or for servicing or renewing such a policy, may not
exceed amounts (or percentage shares of premiums or other reference
amounts) specified by the Secretary in regulations, after considering
recommendations of the Advisory Council.
(e) Prohibited Sales Practices.--The following practices by
insurers shall be prohibited with respect to the sale or offer for sale
of long-term care insurance policies:
(1) False and misleading representations.--Making any
statement or representation--
(A) which the insurer knows or should know is false
or misleading (including the inaccurate, incomplete, or
misleading comparison of long-term care insurance
policies or insurers), and
(B) which is intended, or would be likely, to
induce any person to purchase, retain, terminate,
forfeit, permit to lapse, pledge, assign, borrow
against, convert, or effect a change with respect to,
any long-term care insurance policy.
(2) Inaccurate completion of medical history.--Making or
causing to be made (by any means including failure to inquire
about or to record information relating to preexisting
conditions) statements or omissions, in records detailing the
medical history of an applicant for insurance, which the
insurer knows or should know render such records false,
incomplete, or misleading in any way material to such
applicant's eligibility for or coverage under a long-term care
insurance policy.
(3) Undue pressure.--Employing force, fright, threat, or
other undue pressure, whether explicit or implicit, which is
intended, or would be likely, to induce the purchase of a long-
term care insurance policy.
(4) Cold lead advertising.--Using, directly or indirectly,
any method of contacting consumers (including any method
designed to induce consumers to contact the insurer or agent)
for the purpose of inducing the purchase of long-term care
insurance (regardless of whether such purpose is the sole or
primary purpose of the contact) without conspicuously
disclosing such purpose.
(f) Prohibition on Sale of Duplicate Benefits.--An insurer or agent
may not sell or issue to an individual a long-term care insurance
policy that the insurer or agent knows or should know provides for
coverage that duplicates coverage already provided in another long-term
care insurance policy held by such individual (unless the policy is
intended to replace such other policy).
(g) Sales Through Employers or Membership Organizations.--
(1) Requirements concerning such arrangements.--In any case
where an employer, organization, association, or other entity
(referred to as a ``membership entity'') endorses a long-term
care insurance policy to, or such policy is marketed or sold
through such membership entity to, employees, members, or other
individuals affiliated with such membership entity--
(A) the insurer offering such policy shall not
permit its marketing or sale through such entity unless
the requirements of this subsection are met; and
(B) a membership entity that receives any
compensation for such sale, marketing, or endorsement
of such policy shall be considered the agent of the
insurer for purposes of this part.
(2) Disclosure and information requirements.--A membership
entity that endorses a long-term care insurance policy, or
through which such policy is sold, to individuals affiliated
with such entity, shall--
(A) disclose prominently, in a form and manner
designed to ensure that each such individual who
receives information concerning any such policy through
such entity is aware of and understands such
disclosure--
(i) the manner in which the insurer and
policy were selected;
(ii) the extent (if any) to which a person
independent of the insurer with expertise in
long-term care insurance analyzed the
advantages and disadvantages of such policy
from the standpoint of such individuals
(including such matters as the merits of the
policy compared to other available benefit
packages, and the financial stability of the
insurer), and the results of any such analysis;
(iii) any organizational or financial ties
between the entity (or a related entity) and
the insurer (or a related entity); and
(iv) the nature of compensation
arrangements (if any) and the amount of
compensation (including all fees, commissions,
and other forms of financial support) for the
endorsement or sale of such policy; and
(B) make available to such individuals, either
directly or through referrals, appropriate counseling
to assist such individuals to make educated and
informed decisions concerning the purchase of such
policies.
SEC. 2325. CONTINUATION, RENEWAL, REPLACEMENT, CONVERSION, AND
CANCELLATION OF POLICIES.
(a) In General.--The Secretary, after considering (where
appropriate) recommendations of the Advisory Council, shall promulgate
regulations establishing requirements applicable to the renewal,
replacement, conversion, and cancellation of long-term care insurance
policies, which shall include at a minimum the requirements specified
in this section.
(b) Insured's Right to Cancel During Examination Period.--Each
individual insured (or, if different, each individual liable for
payment of premiums) under a long-term care insurance policy shall have
the unconditional right to return the policy within 30 days after the
date of its issuance and delivery, and to obtain a full refund of any
premium paid.
(c) Insurer's Right to Cancel (or Deny Benefits) Based on Fraud or
Nondisclosure.--An insurer shall have the right to cancel a long-term
care insurance policy, or to refuse to pay a claim for benefits, based
on evidence that the insured falsely represented or failed to disclose
information material to the determination of eligibility to purchase
such insurance, but only if--
(1) the insurer presents written documentation, developed
at the time the insured applied for such insurance, of the
insurer's request for the information thus withheld or
misrepresented, and the insured individual's response to such
request;
(2) the insurer presents medical records or other evidence
showing that the insured individual knew or should have known
that such response was false, incomplete, or misleading;
(3) notice of cancellation is furnished to the insured
individual before the date 3 years after the effective date of
the policy (or such earlier date as the Secretary may specify
in regulations); and
(4) the insured individual is afforded the opportunity to
review and refute the evidence presented by the insurer
pursuant to paragraphs (1) and (2).
(d) Insurer's Right to Cancel for Nonpayment of Premiums.--
(1) In general.--Insurers shall have the right to cancel
long-term care insurance policies for nonpayment of premiums,
subject to the provisions of this subsection and subsection (e)
(relating to nonforfeiture).
(2) Notice and acknowledgement.--
(A) In general.--The insurer may not cancel
coverage of an insured individual until--
(i) the insurer, not earlier than the date
when such payment is 30 days past due, has
given written notice to the insured individual
(by registered letter or the equivalent) of
such intent, and
(ii) 30 days have elapsed since the insurer
obtained written acknowledgment of receipt of
such notice from the insured individual (or the
designated representative, at the insured
individual's option or in the case of an
insured individual determined to be
incapacitated in accordance with paragraph
(4)).
(B) Additional Requirement for Group Policies.--In
the case of a group long-term care insurance policy,
the notice and acknowledgement requirements of
subparagraph (A) apply with respect to the policyholder
and to each insured individual.
(3) Reinstatement of coverage of incapacitated
individuals.--In any case where the coverage of an individual
under a long-term care insurance policy has been canceled
pursuant to paragraph (2), the insurer shall be required to
reinstate full coverage of such individual under such policy,
retroactive to the effective date of cancellation, if the
insurer receives from such individual (or the designated
representative of such individual), within 5 months after such
date--
(A) evidence of a determination of such
individual's incapacitation in accordance with
paragraph (4) (whether made before or after such date),
and
(B) payment of all premiums due and past due, and
all charges for late payment.
(4) Determination of incapacitation.--For purposes of this
subsection, the term ``determination of incapacitation'' means
a determination by a qualified health professional (in
accordance with such requirements as the Secretary may
specify), that an insured individual has suffered a cognitive
impairment or loss of functional capacity which could
reasonably be expected to render the individual permanently or
temporarily unable to deal with business or financial matters.
The standard used to make such determination shall not be more
stringent than the threshold conditions for the receipt of
covered benefits.
(5) Designation of representative.--The insurer shall be
required--
(A) to require the insured individual, at the time
of sale or issuance of a long-term care insurance
policy--
(i) to designate a representative for
purposes of communication with the insurer
concerning premium payments in the event the
insured individual cannot be located or is
incapacitated, or
(ii) to complete a signed and dated
statement declining to designate a
representative, and
(B) to obtain from the insured individual, at the
time of each premium payment (but in no event less
often than once in each 12-month period) reconfirmation
or revision of such designation or declination.
(e) Nonforfeiture.--
(1) In general.--The Secretary, after consideration of
recommendations by the Advisory Council, shall by regulation
require appropriate nonforfeiture benefits with respect to each
long-term care insurance policy that lapses for any reason
(including nonpayment of premiums, cancellation, or failure to
renew, but excluding lapses due to death) after remaining in
effect beyond a specified minimum period.
(2) Nonforfeiture benefits.--The standards established
under this subsection shall require that the amount or
percentage of nonforfeiture benefits shall increase
proportionally with the amount of premiums paid by a
policyholder.
(f) Continuation, Renewal, Replacement, and Conversion of
Policies.--
(1) In general.--Insurers shall not be permitted to cancel,
or refuse to renew (or replace with a substantial equivalent),
any long-term care insurance policy for any reason other than
for fraud or material misrepresentation (as provided in
subsection (c)) or for nonpayment of premium (as provided in
subsection (d)).
(2) Duration and renewal of policies.--Each long-term care
insurance policy shall contain a provision that clearly
states--
(A) the duration of the policy,
(B) the right of the insured individual (or
policyholder) to renewal (or to replacement with a
substantial equivalent),
(C) the date by which, and the manner in which, the
option to renew must be exercised, and
(D) any applicable restrictions or limitations
(which may not be inconsistent with the requirements of
this part).
(3) Replacement of policies.--
(A) In general.--Except as provided in subparagraph
(B), an insurer shall not be permitted to sell any
long-term care insurance policy as a replacement for
another such policy unless coverage under such
replacement policy is available to an individual
insured for benefits covered under the previous policy
to the same extent as under such previous policy
(including every individual insured under a group
policy) on the date of termination of such previous
policy, without exclusions or limitations that did not
apply under such previous policy.
(B) Insured's option to reduce coverage.--In any
case where an insured individual covered under a long-
term care insurance policy knowingly and voluntarily
elects to substitute for such policy a policy that
provides less coverage, substitute policy shall be
considered a replacement policy for purposes of this
part.
(3) Continuation and conversion rights with respect to
group policies.--
(A) In general.--Insurers shall be required to
include in each group long-term care insurance policy,
a provision affording to each insured individual, when
such policy would otherwise terminate, the opportunity
(at the insurer's option, subject to approval of the
State insurance commissioner) either to continue or to
convert coverage under such policy in accordance with
this paragraph.
(B) Rights of related individuals.--In the case of
any insured individual whose eligibility for coverage
under a group policy is based on relationship to
another individual, the insurer shall be required to
continue such coverage upon termination of the
relationship due to divorce or death.
(C) Continuation of coverage.--A group policy shall
be considered to meet the requirements of this
paragraph with respect to rights of an insured
individual to continuation of coverage if coverage of
the same (or substantially equivalent) benefits for
such individual under such policy is maintained,
subject only to timely payment of premiums.
(D) Conversion of coverage.--A group policy shall
be considered to meet the requirements of this
paragraph with respect to conversion if it entitles
each individual who has been continuously covered under
the policy for at least 6 months before the date of the
termination to issuance of a replacement policy
providing benefits identical to, substantially
equivalent to, or in excess of, the benefits under such
terminated group policy--
(i) without requiring evidence of
insurability with respect to benefits covered
under such previous policy, and
(ii) at premium rates no higher than would
apply if the insured individual had initially
obtained coverage under such replacement policy
on the date such insured individual initially
obtained coverage under such group policy.
(4) Treatment of substantial equivalence.--
(A) Under secretary's guidelines.--The Secretary,
after considering recommendations by the Advisory
Council, shall develop guidelines for comparing long-
term care insurance policies for the purpose of
determining whether benefits under such policies are
substantially equivalent.
(B) Before effective date of secretary's
guidelines.--During the period prior to the effective
date of guidelines published by the Secretary under
this paragraph, insurers shall comply with standards
for determinations of substantial equivalence
established by State insurance commissioners.
(5) Additional requirements.--Insurers shall comply with
such other requirements relating to continuation, renewal,
replacement, and conversion of long-term care insurance
policies as the Secretary may establish.
SEC. 2326. REQUIREMENTS RELATING TO PAYMENT OF BENEFITS.
(a) In General.--The Secretary, after considering (where
appropriate) recommendations of the Advisory Council, shall promulgate
regulations establishing requirements with respect to claims for and
payment of benefits under long-term care insurance policies, which
shall include at a minimum the requirements specified in this section.
(b) Standards Relating to Threshold Conditions for Receipt of
Covered Benefits.--Each long-term care insurance policy shall meet the
following requirements with respect to identification of, and
determination of whether an insured individual meets, the threshold
conditions for receipt of benefits covered under such policy:
(1) Declaration of threshold conditions.--
(A) In general.--The policy shall specify the level
(or levels) of functional or cognitive mental
impairment (or combination of impairments) required as
a threshold condition of entitlement to receive
benefits under the policy (which threshold condition or
conditions shall be consistent with any regulations
promulgated by the Secretary pursuant to subsection
(B)).
(B) Secretarial responsibility.--The Secretary
(after considering the views of the Advisory Council on
current practices of insurers concerning, and the
appropriateness of standardizing, threshold conditions)
may promulgate such regulations as the Secretary finds
appropriate establishing standardized thresholds to be
used under such policies as preconditions for varying
levels of benefits.
(2) Independent professional assessment.--The policy shall
provide for a procedure for determining whether the threshold
conditions specified under paragraph (1) have been met with
respect to an insured individual which--
(A) applies such uniform assessment standards,
procedures, and formats as the Secretary may specify,
after consideration of recommendations by the Advisory
Council;
(B) permits an initial evaluation (or, if the
initial evaluation was performed by a qualified
independent assessor selected by the insurer, a
reevaluation) to be made by a qualified independent
assessor selected by the insured individual (or
designated representative) as to whether the threshold
conditions for receipt of benefits have been met;
(C) permits the insurer the option to obtain a
reevaluation by a qualified independent assessor
selected and reimbursed by the insurer;
(D) provides that the insurer will consider that
the threshold conditions have been met in any case
where--
(i) the assessment under subparagraph (B)
concluded that such conditions had been met,
and the insurer declined the option under
subparagraph (C), or
(ii) assessments under both subparagraphs
(B) and (C) concluded that such conditions had
been met; and
(E) provides for final resolution of the question
by a State agency or other impartial third party in any
case where assessments under subparagraphs (B) and (C)
reach inconsistent conclusions.
(3) Qualified independent assessor.--For purposes of
paragraph (2), the term ``qualified independent assessor''
means a licensed or certified professional, as appropriate,
who--
(A) meets such standards with respect to
professional qualifications as may be established by
the Secretary, after consulting with the Secretary of
the Treasury, and
(B) has no significant or controlling financial
interest in, is not an employee of, and does not derive
more than 5 percent of gross income from, the insurer
(or any provider of services for which benefits are
available under the policy and in which the insurer has
a significant or controlling financial interest).
(c) Requirements Relating to Claims for Benefits.--Insurers shall
be required--
(1) to promptly pay or deny claims for benefits submitted
by (or on behalf of) insured individuals who have been
determined pursuant to subsection (b) to meet the threshold
conditions for payment of benefits;
(2) to provide an explanation in writing of the reasons for
payment, partial payment, or denial of each such claim; and
(3) to provide an administrative procedure under which an
insured individual may appeal the denial of any claim.
Subpart C--Enforcement
SEC. 2342. STATE PROGRAMS FOR ENFORCEMENT OF STANDARDS.
(a) Requirement for State Programs Implementing Federal
Standards.--In order for a State to be eligible for grants under this
subpart, the State must have in effect a program (including such laws
and procedures as may be necessary) for the regulation of long-term
care insurance which the Secretary has determined--
(1) includes the elements required under this subpart, and
(2) is designed to ensure the compliance of long-term care
insurance policies sold in the State, and insurers offering
such policies and their agents, with the requirements
established pursuant to subpart B.
(b) Activities Under State Program.--A State program approved under
this subpart shall provide for the following procedures and activities:
(1) Monitoring of insurers and policies.--Procedures for
ongoing monitoring of the compliance of insurers doing business
in the State, and of long-term care insurance policies sold in
the State, with requirements under this part, including at
least the following:
(A) Policy review and certification.--A program for
review and certification (and annual recertification)
of each such policy sold in the State.
(B) Reporting by insurers.--Requirements of annual
reporting by insurers selling or servicing long-term
care insurance policies in the State, in such form and
containing such information as the State may require to
determine whether the insurer (and policies) are in
compliance with requirements under this part.
(C) Data collection.--Procedures for collection,
from insurers, service providers, insured individuals,
and others, of information required by the State for
purposes of carrying out its responsibilities under
this part (including authority to compel compliance of
insurers with requests for such information).
(D) Marketing oversight.--Procedures for monitoring
(through sampling or other appropriate procedures) the
sales practices of insurers and agents, including
review of marketing literature.
(E) Oversight of administration of benefits.--
Procedures for monitoring (through sampling or other
appropriate procedures) insurers' administration of
benefits, including monitoring of--
(i) determinations of insured individuals'
eligibility to receive benefits, and
(ii) disposition of claims for payment.
(2) Information to insurers.--Procedures for furnishing, to
insurers selling or servicing any long-term care insurance
policies in the State, information on conditions of eligibility
for, and benefits under, each public long-term care program
administered by the State, in order to enable them to comply
with the requirement under section 2321(e)(3).
(3) Consumer complaints and dispute resolution.--
Administrative procedures for the investigation and resolution
of complaints by consumers, and disputes between consumers and
insurers, with respect to long-term care insurance, including--
(A) procedures for the filing, investigation, and
adjudication of consumer complaints with respect to the
compliance of insurers and policies with requirements
under this part, or other requirements under State law;
and
(B) procedures for resolution of disputes between
insured individuals and insurers concerning eligibility
for, or the amount of, benefits payable under such
policies, and other issues with respect to the rights
and responsibilities of insurers and insured
individuals under such policies.
(4) Technical assistance to insurers.--Provision of
technical assistance to insurers to help them to understand and
comply with the requirements of this part, and other State
laws, concerning long-term care insurance policies and business
practices.
(c) State Enforcement Authorities.--A State program meeting the
requirements of this subpart shall ensure that the State insurance
commissioner (or other appropriate official or agency) has the
following authority with respect to long-term care insurers and
policies:
(1) Prohibition of sale.--Authority to prohibit the sale,
or offering for sale, of any long-term care insurance policy
that fails to comply with all applicable requirements under
this part.
(2) Plans of correction.--Authority, in cases where the
business practices of an insurer are determined not to comply
with requirements under this part, to require the insurer to
develop, submit for State approval, and implement a plan of
correction which must be fulfilled within the shortest period
possible (not to exceed a year) as a condition of continuing to
do business in the State.
(3) Corrective action orders.--Authority, in cases where an
insurer is determined to have failed to comply with
requirements of this part, or with the terms of a policy, with
respect to a consumer or insured individual, to direct the
insurer (subject to appropriate due process) to eliminate such
noncompliance within 30 days.
(4) Civil money penalties.--Authority to assess civil money
penalties, in amounts for each violative act up to the greater
of $10,000 or three times the amount of any commission
involved--
(A) for violations of subsections (d) (concerning
compensation or sale of policies), (e) (concerning
prohibited sales practices), and (f) (prohibition on
sale of duplicate benefits) of section 2324,
(B) for such other violative acts as the Secretary
may specify in regulations, and
(C) in such other cases as the State finds
appropriate.
(5) Other authorities.--Such other authorities as the State
finds necessary or appropriate to enforce requirements under
this part.
(d) Records, Reports, and Audits.--As a condition of approval of
its program under this part, a State must agree to maintain such
records, make such reports (including expenditure reports), and
cooperate with such audits, as the Secretary finds necessary to
determine the compliance of such State program (and insurers and
policies regulated under such program) with the requirements of this
part.
(e) Secretarial Responsibilities.--
(1) Approval of state programs.--The Secretary shall
approve a State program meeting the requirements of this part.
(2) Information on medicare benefits.--The Secretary shall
furnish, to the official in each State with chief
responsibility for the regulation of long-term care insurance,
a description of the Medicare programs under title XVIII of the
Social Security Act which makes clear the unavailability of
long-term benefits under such programs, for distribution by
such State official to insurers selling long-term care
insurance in the State, in accordance with subsection (b)(2).
SEC. 2342. AUTHORIZATION OF APPROPRIATIONS FOR STATE PROGRAMS.
There are authorized to be appropriated $10,000,000 for fiscal year
1996, $10,000,000 for fiscal year 1997, $7,500,000 for fiscal year
1998, and $5,000,000 for fiscal year 1999 and each succeeding fiscal
year, for grants to States with programs meeting the requirements of
this part, to remain available until expended.
SEC. 2343. ALLOTMENTS TO STATES.
The allotment for any fiscal year to a State with a program
approved under this part shall be an amount determined by the
Secretary, taking into account the numbers of long-term care insurance
policies sold, and of elderly individuals residing, in the State, and
such other factors as the Secretary finds appropriate.
SEC. 2344. PAYMENTS TO STATES.
(a) In General.--Each State with a program approved under this part
shall be entitled to payment under this title for each fiscal year in
an amount equal to its allotment for such fiscal year, for expenditure
by such State for up to 50 percent of the cost of activities under such
program.
(b) State Share of Program Expenditures.--No Federal funds from any
source may be used as any part of the non-Federal share of expenditures
under the State program under this subpart.
(c) Transfer and Deposit Requirements.--The Secretary shall make
payments under this section in accordance with section 6503 of title
31, United States Code.
SEC. 2345. FEDERAL OVERSIGHT OF STATE ENFORCEMENT.
(a) In General.--The Secretary shall periodically review State
regulatory programs approved under section 2341 to determine whether
they continue to comply with the requirements of this part.
(b) Notice of Determination of Noncompliance.--The Secretary shall
promptly notify the State of a determination that a State program fails
to comply with this part, specifying the requirement or requirements
not met and the elements of the State program requiring correction.
(c) Opportunity for Correction.--
(1) In general.--The Secretary shall afford a State
notified of noncompliance pursuant to subsection (b) a
reasonable opportunity to eliminate such noncompliance.
(2) Correction plans.--In a case where substantial
corrections are needed to eliminate noncompliance of a State
program, the Secretary may--
(A) permit the State a reasonable time after the
date of the notice pursuant to subsection (b) to
develop and obtain the Secretary's approval of a
correction plan, and
(B) permit the State a reasonable time after the
date of approval of such plan to eliminate the
noncompliance.
(d) Withdrawal of Program Approval.--In the case of a State that
fails to eliminate noncompliance with requirements under this part by
the date specified by the Secretary pursuant to subsection (c), the
Secretary shall withdraw the approval of the State program pursuant to
section 2341(e).
SEC. 2346. EFFECT OF FAILURE TO HAVE APPROVED STATE PROGRAM.
(a) Restriction on Sale of Long-Term Care Insurance.--
(1) In general.--No insurer may sell or offer for sale any
long-term care insurance policy, on or after the date specified
in subsection (c), in a State that does not have in effect a
regulatory program approved under section 2341(e).
(2) Application of prohibition.--For purposes of paragraph
(1), an insurance policy shall not be considered to be sold or
offered for sale in a State solely because it is sold or
offered to a resident of such State.
(b) Civil Money Penalty.--
(1) In general.--An insurer shall be subject to a civil
money penalty, in an amount up to the greater of $10,000 or
three times any commission involved, for each incident in which
the insurer sells, or offers to sell, an insurance policy to an
individual in violation of subsection (a).
(2) Enforcement procedure.--The Secretary shall enforce the
provisions of this subsection in accordance with the procedures
provided under section 5412 of this Act.
(c) Effective Date.--
(1) In general.--The date specified in this subsection, for
purposes of subsection (a), with respect to any requirement
under this part, is the date one year after the date the
Secretary first promulgates regulations with respect to such
requirement.
(2) Exception.--To the extent that a State demonstrates to
the Secretary that State legislation is required to meet any
such requirement, the State shall not be regarded as failing to
have in effect a program in compliance with this part solely on
the basis of its failure to comply with such requirement before
the first day of the first calendar quarter beginning after the
close of the first regular session of the State legislature
that begins after the promulgation of the regulation imposing
such requirement. For purposes of the preceding sentence, in
the case of a State that has a 2-year legislative session, each
year of such session shall be deemed to be a separate regular
session of the State legislature.
Subpart D--Consumer Education Grants
SEC. 2361. GRANTS FOR CONSUMER EDUCATION.
(a) Grant Program Authorized.--The Secretary is authorized to make
grants--
(1) to States,
(2) to regional alliances (at the option of States within
which such Alliances are located), and
(3) to national organizations representing insurance
consumers, long-term care providers, and insurers,
for the development and implementation of long-term care information,
counseling, and other programs.
(b) Applications.--
(1) In general.--Each State or organization seeking a grant
under this section shall submit to the Secretary an
application, in such format and containing such information as
the Secretary may require.
(2) Goals.--Programs under this section shall be directed
at the goals of increasing consumers' understanding and
awareness of options available to them with respect to long-
term care insurance (and alternatives, such as public long-term
care programs), including--
(A) the risk of needing long-term care;
(B) the costs associated with long-term care
services;
(C) the lack of long-term care coverage under the
Medicare program, Medicare supplemental (Medigap)
policies, and standard private health insurance;
(D) the limitations on (and conditions of
eligibility for) long-term care coverage under State
programs;
(E) the availability, and variations in coverage
and cost, of private long-term care insurance;
(F) features common to many private long-term care
insurance policies; and
(G) pitfalls to avoid when purchasing a long-term
care insurance policy.
(3) Activities.--An application for a grant under this
section shall indicate the activities the State or organization
would carry out under such grant, which activities may
include--
(A) coordination of the activities of State
agencies and private entities as necessary to carry out
the State's program under this section;
(B) collection, analysis, publication, and
dissemination of information,
(C) conducting or sponsoring of consumer education,
outreach, and information programs,
(D) providing (directly or through referral)
counseling and consultation services to consumers to
assist them in choosing long-term care insurance
coverage appropriate to their circumstances, and
(E) other appropriate activities.
(4) Priority for innovation.--In awarding grants under this
section, the Secretary shall give priority to applications
proposing to use innovative approaches to providing
information, counseling, and other assistance to individuals
who might benefit from, or are considering the purchase of,
long-term care insurance.
(c) Period of Grants.--Grants under this section shall be for not
longer than 3 years.
(d) Evaluations and Reports.--
(1) By grantees to the secretary.--Each recipient of a
grant under this section shall annually evaluate the
effectiveness of its program under such grant, and report its
conclusions to the Secretary.
(2) By the secretary to the congress.--The Secretary shall
annually evaluate, and report to the Congress on, the
effectiveness of programs under this section, on the basis of
reports received under paragraph (1) and such independent
evaluation as the Secretary finds necessary.
(e) Authorization of Appropriations.--There are authorized to be
appropriated, for grants under this section--
(1) $10,000,000 for each of fiscal years 1995 through 1997
for grants to States, and
(2) $1,000,000 for each of fiscal years 1995 through 1997,
for grants to eligible organizations.
PART 4--TAX TREATMENT OF LONG-TERM CARE INSURANCE AND SERVICES
SEC. 2401. REFERENCE TO TAX PROVISIONS.
For amendments to the Internal Revenue Code of 1986 relating to the
treatment of long-term care insurance and services, see subtitle G of
title VII.
PART 5--TAX INCENTIVES FOR INDIVIDUALS WITH DISABILITIES WHO WORK
SEC. 2501. REFERENCE TO TAX PROVISION.
For amendment to the Internal Revenue Code of 1986 providing for a
tax credit for cost of personal assistance services required by
employed individuals, see section 7901.
PART 6--DEMONSTRATION AND EVALUATION
SEC. 2601. DEMONSTRATION ON ACUTE AND LONG-TERM CARE INTEGRATION.
(a) Program Authorized.--The Secretary of Health and Human Services
shall conduct a demonstration program to test the effectiveness of
various approaches to financing and providing integrated acute and
long-term care services described in subsection (b) for the chronically
ill and disabled who meet eligibility criteria under subsection (c).
(b) Services and Benefits.--
(1) In general.--Except as provided in paragraph (2), the
following services and benefits shall be provided under each
demonstration approved under this section:
(A) Comprehensive benefit package.--All benefits
included in the comprehensive benefit package under
title I of this Act.
(B) Transitional benefits.--Specialized benefits
relating to the transition from acute to long-term
care, including--
(i) assessment and consultation,
(ii) inpatient transitional care,
(iii) medical rehabilitation,
(iv) home health care and home care,
(v) caregiver support, and
(vi) self-help technology.
(C) Long-term care benefits.--Long-term care
benefits, including--
(i) adult day care,
(ii) personal assistance services,
(iii) homemaker services and chore
services;
(iv) home-delivered meals;
(v) respite services;
(vi) nursing facility services in
specialized care units;
(vii) services in other residential
settings including community supported living
arrangements and assisted living facilities;
and
(viii) assistive devices and environmental
modifications.
(D) Habilitation services.--Specialized
habilitation services for participants with
developmental disabilities.
(2) Variations in minimum benefits.--
(A) In general.--Subject to the requirement of
subparagraph (B), demonstrations may omit specified
services listed under subparagraphs (C) and (D) of
paragraph (1), or provide additional services, as found
appropriate by the Secretary in the case of a
particular demonstration, taking into consideration
factors such as--
(i) the needs of a specialized group of
eligible beneficiaries;
(ii) the availability of the omitted
benefits under other programs in the service
area; and
(iii) the geographic availability of
service providers.
(B) Breadth requirement.--In approving variant
demonstrations pursuant to subparagraph (A), the
Secretary shall ensure that demonstrations under this
section, taken as a group, adequately test financing
and delivery models covering the entire array of
services and benefits described in paragraph (1).
(c) Eligibility Criteria.--The Secretary shall establish
eligibility criteria for individuals who may receive services under
demonstrations under this section. Under such criteria, any of the
following may be found to be eligible populations for such
demonstrations:
(1) Individuals with disabilities who are entitled to
services and benefits under a State program under part 1 of
this subtitle.
(2) Individuals who are entitled to benefits under parts A
and B of title XVIII of the Social Security Act.
(3) Individuals who are entitled to medical assistance
under a State plan under title XIX of the Social Security Act,
and are also--
(A) individuals described in paragraph (2), or
(B) individuals eligible for supplemental security
income under title XVI of that Act.
(d) Application.--
(1) In general.--Each entity seeking to participate in a
demonstration under this section shall submit an application,
in such format and containing such information as the Secretary
may require, including the information specified in this
subsection.
(2) Service delivery.--The application shall state the
services to be provided under the demonstration (either
directly by the applicant or under other arrangements approved
by the Secretary), which shall include services specified
pursuant to subsection (b) and--
(A) enrollment services;
(B) client assessment and care planning;
(C) simplified access to needed services;
(D) integrated management of acute and chronic
care, including measures to ensure continuity of care
across settings and services;
(E) quality assurance, grievance, and appeals
mechanisms; and
(F) such other services as the Secretary may
require.
(3) Consumer protection and participation.--The applicant
shall provide evidence of consumer participation--
(A) in the planning of the demonstration (including
a showing of support from community agencies or
consumer interest groups); and
(B) in the conduct of the demonstration, including
descriptions of methods and procedures to be used--
(i) to make available to individuals
enrolled in the demonstration information on
self-help, health promotion and disability
prevention practices, and enrollees'
contributions to the costs of care;
(ii) to ensure participation by such
enrollees (or their designated representatives,
where appropriate) in care planning and in
decisions concerning treatment;
(iii) to handle and resolve client
grievances and appeals;
(iv) to take enrollee views into account in
quality assurance and provider contracting
procedures; and
(v) to evaluate enrollee satisfaction with
the program.
(4) Applicant qualifications.--Applicants for grants under
this section shall meet eligibility criteria established by the
Secretary, including requirements relating to--
(A) adequate financial controls to monitor
administrative and service costs,
(B) demonstrated commitment of the Board of
Directors or comparable governing body to the goals of
demonstration,
(C) information systems adequate to pay service
providers, to collect required utilization and cost
data, and to provide data adequate to permit evaluation
of program performance, and
(D) compliance with applicable State laws.
(e) Payments to Participants.--An entity conducting a demonstration
under this section shall be entitled to receive, with respect to each
enrollee, for the period during which it is providing to such enrollee
services under a demonstration under this section, such amounts as the
Secretary shall provide, which amounts--
(1) may include risk-based payments and non-risk based
payments by governmental programs, by third parties, or by
project enrollees, or any combination of such payments, and
(2) may vary by project and by enrollee.
(f) Number and Duration of Demonstration Projects.--
(1) Request for applications.--The Secretary shall publish
a request for applications under this section not later than
one year after enactment of this Act.
(2) Number and duration.--The Secretary shall authorize not
more than 25 demonstrations under this section, each of which
shall run for 7 years from the date of the award.
(g) Evaluation and Reports.--The Secretary shall evaluate the
demonstration projects under this section, and shall submit to the
Congress--
(1) an interim report, by three years after enactment,
describing the status of the demonstration and characteristics
of the approved projects; and
(2) a final report, by one year after completion of such
demonstration projects, evaluating their effectiveness
(including cost-effectiveness), and discussing the advisability
of including some or all of the integrated models tested in the
demonstration as a benefit under the comprehensive benefit
package under title I of this Act, or under the programs under
title XVIII of the Social Security Act.
(h) Authorization of Appropriations.--
(1) For secretarial responsibilities.--
(A) In general.--There are authorized to be
appropriated $7,000,000 for fiscal year 1996, and
$4,500,000 for each of the 6 succeeding fiscal years,
for payment of costs of the Secretary in carrying out
this section (including costs for technical assistance
to potential service providers, and research and
evaluation), which amounts shall remain available until
expended.
(B) Set-aside for feasibility studies.--Of the
total amount authorized to be appropriated under
subparagraph (A), not less than $1,000,000 shall be
available for studies of the feasibility of systems to
provide integrated care for nonaged populations
(including physically disabled children and adults, the
chronically mentally ill, and individuals with
disabilities, and combinations of these groups).
(2) For covered benefits.--There are authorized to be
appropriated $50,000,000 for the first fiscal year for which
grants are awarded under this section, and for each of the four
succeeding fiscal years, for payment of costs of benefits for
which no public or private program or entity is legally
obligated to pay.
SEC. 2602. PERFORMANCE REVIEW OF THE LONG-TERM CARE PROGRAMS.
(a) In General.--The Secretary of Health and Human Services shall
prepare and submit to the Congress--
(1) an interim report, not later than the end of the
seventh full calendar year beginning after the date of the
enactment of this Act, and
(2) a final report, not later than two years after the date
of the interim report,
evaluating the effectiveness of the programs established and amendments
made by this subtitle (and including at a minimum the elements
specified in subsection (b)).
(b) Elements of Assessment.--The evaluations to be made, and
included in the reports required pursuant to subsection (a), include at
least the following:
(1) State service delivery programs.--An evaluation of
States' effectiveness in meeting the needs for home and
community-based services (including personal assistance
services) of individuals with disabilities (including
individuals who do, and who do not, meet the eligibility
criteria for the service program under part 1, individuals of
different ages, type and degree of disability, and income
levels, members of minority groups, and individuals residing in
rural areas).
(2) Service access.--An evaluation of the degree of (and
obstacles to) access of individuals with disabilities to needed
home and community-based services and to inpatient services.
(3) Quality.--An evaluation of the quality of long-term
care services available.
(4) Private insurance.--An evaluation of the performance of
the private sector in offering affordable long-term care
insurance that provides adequate protection against the costs
of long-term care, and of the effectiveness of Federal
standards and State enforcement, pursuant to part 3, in
adequately protecting long-term care insurance consumers.
(5) Cost issues.--An evaluation of the effectiveness of
amendments made by this subtitle in containing the costs of
long-term care, and in limiting the share of such costs borne
by individuals with lower incomes.
(6) Service coordination and integration.--An evaluation of
the effectiveness of the programs established or amended under
this subtitle in achieving coordination and integration of
long-term care services, and of such services with acute care
services and social services, and in ensuring provision of
services in the least restrictive setting possible.
Title III
TITLE III--PUBLIC HEALTH INITIATIVES
table of contents of title
Page
Subtitle A--Workforce Priorities Under Federal Payments
Part 1--Institutional Costs of Graduate Medical Education; Workforce
subpart a--national council regarding workforce priorities
Sec. 3001subpart b--authorized positions in specialty training 504
Sec. 3011. Cooperation regarding approved physician training 506
programs.
Sec. 3012. Annual authorization of number of specialty 509
positions; requirements
regarding primary health care.
Sec. 3subpart c--institutional costs of graduate medical education 513
Sec. 3031. Federal formula payments to approved physician 515
training programs.
Sec. 3032. Application for payments......................... 516
Sec. 3033. Availability of funds for payments; annual amount 517
of payments.
Sec. 3034. Additionalsubpart d--general provisions.......... 522
Sec. 3041. Definitisubpart e--transitional provisions....... 526
Sec. 3051. Transitional payments to institutions............ 527
Part 2--Institutional Costs of Graduate Nursing Education; Workforce
Priorities
Sec. 3061. National council; authorized graduate nurse 533
training positions;
institutional costs.
Sec. 3062. Applicability of part 1 provisions............... 535
Sec. 3063. Funding.......................................... 536
Part 3--Related Programs
Sec. 3071. Programs of the Secretary of Health and Human 536
Services.
Sec. 3072. Programs of the Secretary of Labor............... 540
Sec. 3073. National Institute for Health Care Workforce 543
Development.
Sec. 3074. Requirement for certain programs regarding 546
redeployment of health care
workers.
Subtitle B--Academic Health Centers
Part 1--Formula Payments
Sec. 3101. Federal formula payments to academic health 548
centers.
Sec. 3102. Request for payments............................. 551
Sec. 3103. Availability of funds for payments; annual amount 552
of payments.
Sec. 3104. Additional funding provisions.................... 554
Part 2--Access of Patients to Academic Health Centers
Sec. 3131. Contracts for ensuring access to centers......... 558
Sec. 3132. Discretionary grants regarding access to centers. 559
Subtitle C--Health Research Initiatives
Part 1--Programs for Certain Agencies
Sec. 3201. Biomedical and behavioral research on health
promotion and disease
prevention. 560
Sec. 3202. Health services research......................... 561
Part 2--Funding for Programs
Sec. 3211. Authorizations of appropriations................. 563
Subtitle D--Core Functions of Public Health Programs; National
Initiatives Regarding Preventive Health
Part 1--Funding
Sec. 3301. Authorizations of appropriations................. 564
Part 2--Core Functions of Public Health Programs
Sec. 3311. Purposes......................................... 565
Sec. 3312. Grants to States for core health functions....... 565
Sec. 3313. Submission of information........................ 570
Sec. 3314. Reports.......................................... 571
Sec. 3315. Application for grant............................ 571
Sec. 3316. General provisions............................... 572
Sec. 3317. Allocations for certain activities............... 572
Sec. 3318. Definitions...................................... 573
Part 3--National Initiatives Regarding Health Promotion and Disease
Prevention
Sec. 3331. Grants for national prevention initiatives....... 573
Sec. 3332. Priorities....................................... 575
Sec. 3333. Submission of information........................ 576
Sec. 3334. Application for grant............................ 577
Subtitle E--Health Services for Medically Underserved Populations
Part 1--Community and Migrant Health Centers
Sec. 3401. Authorizations of appropriations................. 578
Sec. 3402. Use of funds..................................... 579
Part 2--Isubpart a--purposes; fundinglth Care
Sec. 3411. Purposes......................................... 579
subpart b--development of qualified community health plans and practice
networks
Sec. 3421. Grants and contracts for development of plans and 581
networks.
Sec. 3422. Preferences in making awards of assistance....... 586
Sec. 3423. Certain uses of awards........................... 587
Sec. 3424. Accessibility of services........................ 589
Sec. 3425. Additional agreements............................ 592
Sec. 3426. Submission of certain information................ 594
Sec. 3427. Reports; audits.................................. 595
Sec. 3428. Application for assistance....................... 595
Ssubpart c--capital cost of development of qualified community health 6
plans and practice networks
Sec. 3441. Loans and loan guarantees regarding plans and 596
networks.
Sec. 3442. Certain requirements............................. 598
Sec. 3443. Defaults; right of recovery...................... 600
Sec. 3444. Provisions regarding construction or expansion of 603
facilities.
Sec. 3445. Application for assistance....................... 604
Sec. 3446. Administratsubpart d--enabling services.......... 605
Sec. 3461. Grants and contracts for enabling services....... 605
Sec. 3462. Authorizations of appropriations................. 608
Part 3--National Health Service Corps
Sec. 3471. Authorizations of appropriations................. 608
Sec. 3472. Allocation for participation of nurses in 609
scholarship and loan repayment
programs.
Part 4--Payments to Hospitals Serving Vulnerable Populations
Sec. 3481. Payments to hospitals............................ 610
Sec. 3482. Identification of eligible hospitals............. 612
Sec. 3483. Amount of payments............................... 613
Sec. 3484. Base year........................................ 615
Subtitle F--Mental Health; Substance Abuse
Part 1--Financial Assistance
Sec. 3501. Authorizations of appropriations................. 615
Sec. 3502. Supplemental formula grants for States regarding
activities under part B of title
XIX of Public Health Service
Act. 616
Sec. 3503. Capital costs of development of certain centers 621
and clinics.
Part 2--Authoritsubpart a--reportticipating States
Sec. 3511. Report on intsubpart b--pilot programh systems... 622
Sec. 3521. Pilot program.................................... 626
Subtitle G--Comprehensive School Health Education; School-Related
Health Services
Part 1--General Provisions
Sec. 3601. Purposes......................................... 627
Sec. 3602. Definitions...................................... 629
Part 2--School Health Education; General Provisions
Sec. 3611. Authorizations of appropriations................. 631
Sec. 3612. Waivers of statutory and regulatory requirements. 632
Part 3subpart a--planning grants for state education agenciesencies
Sec. 3621. Application for grant............................ 636
Sec. 3622. Approval of Secretary............................ 638
Sec. 3623. Amount of grant.................................. 638
Sec. subpart b--implementation grants for state education agencies 639
Sec. 3631. Application for grant............................ 640
Sec. 3632. Selection of grantees............................ 642
Sec. 3633. Amount of grant.................................. 642
Sec. 3634. Authorized activities; limitation on 643
administrative costs.
Sec. 3635. Subgrantsubpart c--state and local reports....... 644
Sec. 3641. State and local reports.......................... 646
Part 4--School Health Education; Grants to Certain Local Educational
subpart a--eligibility
Sec. 365subpart b--planning grants for local education agencies 647
Sec. 3661. Application for grant............................ 647
Sec. 3662. Selection of grantees............................ 649
Sec. 3663. Amount of grant.................................. 649
Sec.subpart c--implementation grants for local educational agencies 650
Sec. 3671. Application for grant............................ 651
Sec. 3672. Selection of grantees............................ 653
Sec. 3673. Amount of grant.................................. 654
Sec. 3674. Authorized activities............................ 655
Sec. 3675. Reports.......................................... 655
subpart a--development and operation of projects
Sec. 3681. Authorizations of appropriations................. 656
Sec. 3682. Eligibility for development and operation grants. 656
Sec. 3683. Preferences...................................... 658
Sec. 3684. Grants for development of projects............... 659
Sec. 3685. Grants for operation of projects................. 662
Sec. 3686. Fsubpart b--capital costs of developing projects. 666
Sec. 3691. Loans and loan guarantees regarding projects..... 666
Sec. 3692. Funding.......................................... 667
Subtitle H--Public Health Service Initiative
Sec. 3701. Public health service initiative................. 667
Subtitle I--Coordination With COBRA Continuation Coverage
Sec. 3801. Public Health Service Act; coordination with 668
COBRA continuation coverage.
Title III, Subtitle A
Subtitle A--Workforce Priorities Under Federal Payments
PART 1--INSTITUTIONAL COSTS OF GRADUATE MEDICAL EDUCATION; WORKFORCE
PRIORITIES
Subpart A--National Council Regarding Workforce Priorities
SEC. 3001. NATIONAL COUNCIL ON GRADUATE MEDICAL EDUCATION.
(a) In General.--There is established within the Department of
Health and Human Services a council to be known as the National Council
on Graduate Medical Education.
(b) Duties.--The Secretary shall carry out subpart B acting through
the National Council.
(c) Composition.--
(1) In general.--The membership of the National Council
shall include individuals who are appointed to the Council from
among individuals who are not officers or employees of the
United States. Such individuals shall be appointed by the
Secretary, and shall include individuals from each of the
following categories:
(A) Consumers of health care services.
(B) Physicians who are faculty members of medical
schools.
(C) Physicians in private practice who are not
physicians described in subparagraph (B).
(D) Officers or employees of regional and corporate
health alliances.
(E) Officers or employees of health care plans that
participate in such alliances.
(F) Such other individuals as the Secretary
determines to be appropriate.
(2) Ex officio members; other federal officers or
employees.--The membership of the National Council shall
include individuals designated by the Secretary to serve as
members of the Council from among Federal officers or employees
who are appointed by the President, or by the Secretary or
other Federal officers who are appointed by the President with
the advice and consent of the Senate.
(d) Chair.--The Secretary shall, from among members of the National
Council appointed under subsection (c)(1), designate an individual to
serve as the Chair of the Council.
(e) Definitions.--For purposes of this subtitle:
(1) The term ``medical school'' means a school of medicine
(as defined in section 799 of the Public Health Service Act) or
a school of osteopathic medicine (as defined in such section).
(2) The term ``National Council'' means the council
established in subsection (a).
Subpart B--Authorized Positions in Specialty Training
SEC. 3011. COOPERATION REGARDING APPROVED PHYSICIAN TRAINING PROGRAMS.
(a) In General.--With respect to an approved physician training
program in a medical specialty, a funding agreement for payments under
section 3031 for a calendar year is that the program will ensure that
the number of individuals enrolled in the program in the subsequent
academic year is in accordance with this subpart.
(b) Definitions.--
(1) Approved program.--For purposes of this subtitle:
(A) The term ``approved physician training
program'', with respect to the medical speciality
involved, means a residency or other postgraduate
program that trains physicians and meets the following
conditions:
(i) Participation in the program may be
counted toward certification in the medical
specialty.
(ii) The program is accredited by the
Accreditation Council on Graduate Medical
Education, or approved by the Council on
Postgraduate Training of the American
Osteopathic Association.
(B) The term ``approved physician training
program'' includes any postgraduate program described
in subparagraph (A) that provides health services in an
ambulatory setting, without regard to whether the
program provides inpatient hospital services.
(C) The term ``approved physician training
program'' includes any postgraduate program described
in subparagraph (A), whether operated by academic
health centers, teaching hospitals, multispecialty
group practices, ambulatory care providers, prepaid
health plans, or other entities.
(2) Eligible program; subpart definition.--For purposes of
this subpart, the term ``eligible program'', with respect to an
academic year, means an approved physician training program
that receives payments under subpart C for the calendar year in
which the academic year begins.
(3) Other definitions.--For purposes of this subtitle:
(A)(i) The term ``academic year'' means the 1-year
period beginning on July 1. The academic year beginning
July 1, 1993, is academic year 1993-94.
(ii) With respect to the funding agreement
described in subsection (a), the term ``subsequent
academic year'' means the academic year beginning July
1 of the calendar year for which payments are to be
made under the agreement.
(B) The term ``funding agreement'', with respect to
payments under section 3031 to an eligible program,
means that the Secretary may make the payments only if
the program makes the agreement involved.
(C) The term ``medical specialty'' includes all
medical, surgical, and other physician specialties and
subspecialties.
SEC. 3012. ANNUAL AUTHORIZATION OF NUMBER OF SPECIALTY POSITIONS;
REQUIREMENTS REGARDING PRIMARY HEALTH CARE.
(a) Annual Authorization of Number of Positions.--In the case of
each medical specialty, the National Council shall, pursuant to section
3011, designate for each academic year the number of individuals
nationwide who are authorized to be enrolled in eligible programs. The
preceding sentence is subject to subsection (c)(2).
(b) Primary Health Care.--
(1) In general.--Subject to paragraph (2), in carrying out
subsection (a) for an academic year, the National Council shall
ensure that, of the class of training participants entering
eligible programs for academic year 1998-99 or any subsequent
academic year, the percentage of such class that completes
eligible programs in primary health care is not less than 55
percent (without regard to the academic year in which the
members of the class complete the programs).
(2) Rule of construction.--The requirement of paragraph (1)
regarding a percentage applies in the aggregate to training
participants entering eligible programs for the academic year
involved, and not individually to any eligible program.
(c) Designations Regarding 3-Year Periods.--
(1) Designation periods.--For each medical specialty, the
National Council shall make the annual designations under
subsection (a) for periods of 3 academic years.
(2) Initial period.--The first designation period
established by the National Council after the date of the
enactment of this Act shall be the academic years 1998-99
through 2000-01.
(d) Certain Considerations in Designating Annual Numbers.--
(1) In general.--Factors considered by the National Council
in designating the annual number of specialty positions for an
academic year for a medical specialty shall include the extent
to which there is a need for additional practitioners in the
speciality, as indicated by the following:
(A) The incidence and prevalence (in the general
population and in various other populations) of the
diseases, disorders, or other health conditions with
which the specialty is concerned.
(B) The number of physicians who will be practicing
in the specialty in the academic year.
(C) The number of physicians who will be practicing
in the specialty at the end of the 5-year period
beginning on the first day of the academic year.
(2) Recommendations of private organizations.--In
designating the annual number of specialty positions for an
academic year for a medical specialty, the National Council
shall consider the recommendations of organizations
representing physicians in the specialty and the
recommendations of organizations representing consumers of the
services of such physicians.
(3) Total of respective annual numbers.--
(A) Subject to subparagraph (B), for academic year
1998-99 and subsequent academic years, the National
Council shall ensure that the total of the respective
annual numbers designated under subsection (a) for an
academic year is a total that--
(i) bears a relationship to the number of
individuals who graduated from medical schools
in the United States in the preceding academic
year; and
(ii) is consistent with the purposes of
this subpart.
(B) For each of the academic years 1998-99 through
2002-03, the total determined under subparagraph (A)
shall be reduced by a percentage determined by the
National Council.
(e) Definitions.--For purposes of this subtitle:
(1) The term ``annual number of specialty positions'', with
respect to a medical specialty, means the number designated by
the National Council under subsection (a) for eligible programs
for the academic year involved.
(2) The term ``designation period'' means a 3-year period
under subsection (c)(1) for which designations under subsection
(a) are made by the National Council.
(3) The term ``primary health care'' means the following
medical specialties: Family medicine, general internal
medicine, general pediatrics, and obstetrics and gynecology.
(4) The term ``specialty position'' means a position as a
training participant.
(5) The term ``training participant'' means an individual
who is enrolled in an approved physician training program.
SEC. 3013. ALLOCATIONS AMONG SPECIALITIES AND PROGRAMS.
(a) In General.--For each academic year, the National Council shall
for each medical specialty make allocations among eligible programs of
the annual number of specialty positions that the Council has
designated for such year. The preceding sentence is subject to
subsection (b)(3).
(b) Allocations Regarding 3-Year Period.--
(1) In general.--For each medical specialty, the National
Council shall make the annual allocations under subsection (a)
for periods of 3 academic years.
(2) Advance notice to programs.--With respect to the first
academic year of an allocation period established by the
National Council, the National Council shall, not later than
July 1 of the preceding academic year, notify each eligible
program of the allocations made for the program for each of the
academic years of the period.
(3) Initial period.--The first allocation period
established by the National Council after the date of the
enactment of this Act shall be the academic years 1998-99
through 2000-01.
(c) Certain Considerations.--
(1) Geographic areas; quality of programs.--In making
allocations under subsection (a) for eligible programs of the
various geographic areas, the National Council shall include
among the factors considered the historical distribution among
the areas of approved physician training programs, and the
quality of such programs.
(2) Underrepresentation of minority groups.--In making an
allocation under subsection (a) for an eligible program, the
National Council shall include among the factors considered the
following:
(A) The extent to which the population of training
participants in the program includes training
participants who are members of racial or ethnic
minority groups.
(B) With respect to a racial or ethnic group
represented among the training participants, the extent
to which the group is underrepresented in the field of
medicine generally and in the various medical
specialities.
(3) Recommendations of private organizations.--In making
allocations under subsection (a) for eligible programs, the
National Council shall consider the recommendations of
organizations representing physicians in the medical
specialties and the recommendations of organizations
representing consumers of the services of such physicians.
(d) Definitions.--For purposes of this subtitle, the term
``allocation period'' means a 3-year period under subsection (b)(1) for
which allocations under subsection (a) are made by the National
Council.
Subpart C--Institutional Costs of Graduate Medical Education
SEC. 3031. FEDERAL FORMULA PAYMENTS TO APPROVED PHYSICIAN TRAINING
PROGRAMS.
(a) In General.--In the case of an approved physician training
program that in accordance with section 3032 submits to the Secretary
an application for calendar year 1996 or any subsequent calendar year,
the Secretary shall make payments for such year to the program for the
purpose specified in subsection (b). The Secretary shall make the
payments in an amount determined in accordance with section 3033, and
may administer the payments as a contract, grant, or cooperative
agreement.
(b) Payments for Operation of Approved Physician Training
Programs.--The purpose of payments under subsection (a) is to assist an
eligible program with the costs of operation. A funding agreement for
such payments is that the approved physician training program involved
will expend the payments only for such purpose.
(c) Eligible Program; Subpart Definition.--For purposes of this
subpart, the term ``eligible program'', with respect to the calendar
year involved, means an approved physician training program that
submits to the Secretary an application for such year in accordance
with section 3032.
SEC. 3032. APPLICATION FOR PAYMENTS.
(a) In General.--For purposes of section 3031(a), an application
for payments under such section for a calendar year is in accordance
with this section if--
(1) the approved physician training program involved
submits the application not later than the date specified by
the Secretary;
(2) the application demonstrates that the condition
described in subsection (b) is met with respect to the program;
(3) the application contains each funding agreement
described in this part and the application provides such
assurances of compliance with the agreements as the Secretary
may require; and
(4) the application is in such form, is made in such
manner, and contains such agreements, assurances, and
information as the Secretary determines to be necessary to
carry out this part.
(b) Certain Conditions.--An approved physician training program
meets the condition described in this subsection for receiving payments
under section 3031 for a calendar year if the institution within which
the program operates agrees that such payments will be made by the
Secretary directly to the program (and such agreement is included in
the application under subsection (a)), and the Secretary shall ensure
that such institution is permitted to participate as a provider in a
regional or corporate alliance health plan during such year only if
each of the approved physician training programs of the institution
meets the requirements for receiving payments under such section for
such year.
SEC. 3033. AVAILABILITY OF FUNDS FOR PAYMENTS; ANNUAL AMOUNT OF
PAYMENTS.
(a) Annual Health Professions Workforce Account.--
(1) In general.--Subject to paragraph (2) and section 3034,
the amount available for a calendar year for making payments
under sections 3031 and 3051 (constituting an account to be
known as the annual health professions workforce account) is
the following, as applicable to the calendar year:
(A) In the case of calendar year 1996,
$3,200,000,000.
(B) In the case of calendar year 1997,
$3,550,000,000.
(C) In the case of calendar year 1998,
$4,800,000,000.
(D) In the case of each of the calendar years 1999
and 2000, $5,800,000,000.
(E) In the case of each subsequent calendar year,
the amount specified in subparagraph (D) increased by
the product of such amount and the general health care
inflation factor for such year (as defined in
subsection (d)).
(2) Transitional provision.--
(A) With respect to making payments under sections
3031 and 3051 for calendar year 1996 or 1997, the
Secretary shall first make payments under section 3031
to eligible programs described in subparagraph (B) in
the amount determined for the programs under subsection
(b) for such year, and then, from such amounts as
remain available in the annual health professions
workforce account for such year, shall make payments
under section 3031 to other eligible programs and shall
make payments under section 3051.
(B) An eligible program described in this
subparagraph is such a program that is operated in a
State that is a participating State under title I.
(b) Amount of Payments for Individual Eligible Programs.--
(1) In general.--Subject to the annual health professions
workforce account available for a calendar year, the amount of
payments required in section 3031 to be made to an eligible
program for the calendar year is an amount equal to the product
of--
(A) the number of full-time equivalent training
participants in the program; and
(B) the national average of the costs of such
programs in training such a participant, as determined
by consideration of the following factors (and as
adjusted under paragraph (2)):
(i) The national average salary of training
participants.
(ii) The national average costs of such
programs in providing for faculty supervision
of training participants and for related
activities.
(2) Additional provisions regarding national average
cost.--
(A) The Secretary shall in accordance with
paragraph (1)(B) determine, for academic year 1992-93,
an amount equal to the national average described in
such paragraph with respect to training a participant
in an approved physician training program in the
medical specialty involved. The national average
applicable under such paragraph for a calendar year for
such programs is, subject to subparagraph (B), the
amount determined under the preceding sentence
increased by the amount necessary to offset the effects
of inflation occurring since academic year 1992-93, as
determined through use of the consumer price index.
(B) The national average determined under
subparagraph (A) and applicable to a calendar year
shall, in the case of the eligible program involved, be
adjusted by a factor to reflect regional differences in
the applicable wage and wage-related costs.
(c) Limitation.--If, subject to subsection (a)(2), the annual
health professions workforce account available for a calendar year is
insufficient for providing each eligible program with the amount of
payments determined under subsection (b) for the program for such year,
the Secretary shall make such pro rata reductions in the amounts so
determined as may be necessary to ensure that the total of payments
made under section 3031 for such year equals the total of such account.
(d) Definitions.--For purposes of this subtitle:
(1) The term ``annual health professions workforce
account'' means the account established pursuant to subsection
(a)(1).
(2) The term ``consumer price index'' has the meaning given
such term in section 1902.
(3) The term ``general health care inflation factor'', with
respect to a year, has the meaning given such term in section
6001(a)(3) for such year.
SEC. 3034. ADDITIONAL FUNDING PROVISIONS.
(a) Sources of Funds for Annual Health Professions Workforce
Account.--The amount specified in section 3033(a)(1) for the annual
health professions workforce account for a calendar year shall be
derived from the sources specified in subsection (b).
(b) Contributions From Medicare Trust Funds, Regional Alliances,
and Corporate Alliances.--For purposes of subsection (a), the sources
specified in this subsection for a calendar year are the following:
(1) Transfers made by the Secretary under section 4051.
(2) Payments made by regional alliances under section 1353
and--
(A) in the case of each of the calendar years 1996
and 1997, transferred in an amount equal to 50 percent
of such payments made for the calendar year involved;
and
(B) in the case of calendar year 1998 and each
subsequent calendar year, transferred in an amount
equal to the aggregate regional alliance portion
determined under subsection (c)(2)(A).
(3) The transfer made under subsection (d)(1).
(c) Contributions From Regional and Corporate Alliances.--
(1) Determination of aggregate regional and corporate
alliance amount.--For purposes regarding the provision of funds
for the annual health professions workforce account for a
calendar year (other than calendar year 1996 or 1997), the
Secretary shall determine an aggregate regional and corporate
alliance amount, which amount is to be paid by such alliances
pursuant to paragraphs (2)(B) and (3) of subsection (b),
respectively, and which amount shall be equal to the difference
between--
(A) the amount specified in section 3033(a)(1) for
the annual health professions workforce account for
such year; and
(B) the amount transferred under section 4051 for
the year.
(2) Allocation of amount among regional and corporate
alliances.--With respect to the aggregate regional and
corporate alliance amount determined under paragraph (1) for a
calendar year (other than calendar year 1996 or 1997)--
(A) the aggregate regional alliance portion of such
amount is the product of such amount and the percentage
constituted by the ratio of the total plan payments of
regional alliances to the combined total plan payments
of regional alliances and corporate alliances; and
(B) the aggregate corporate alliance portion of
such amount is the product of such amount and the
percentage constituted by the ratio of the total plan
payments of corporate alliances to such combined total
plan payments.
(d) Compliance Regarding Corporate Alliances.--
(1) In general.--Effective January 15 of calendar year 1996
and each subsequent calendar year, there is hereby transferred
to the Secretary, out of any money in the Treasury not
otherwise appropriated--
(A) in the case of each of the calendar years 1996
and 1997, an amount equal to the difference between--
(i) the amount specified in section
3033(a)(1) for the annual health professions
workforce account for the calendar year
involved; and
(ii) the sum of the amount transferred
under section 4051 for such year and the amount
transferred under subsection (b)(2)(A) for such
year; and
(B) in the case of calendar year 1998 and each
subsequent calendar year, an amount equal to the
aggregate corporate alliance portion determined under
subsection (c)(2)(B) for the calendar year involved.
(2) Manner of compliance.--The payment by corporate
alliances of the tax imposed under section 3461 of the Internal
Revenue Code of 1986 (as added by section 7121 of this Act),
together with the transfer made in paragraph (1)(B) for the
calendar year involved, is deemed to be the payment required
pursuant to subsection (c)(1) for corporate alliances for such
year.
(3) Graduate nurse education.--Effective January 15 of
calendar year 1996 and each subsequent calendar year, there is
hereby transferred to the Secretary, out of any money in the
Treasury not otherwise appropriated, 50 percent of the amount
specified in section 3063(b) with respect to the annual
graduate nurse training account.
(e) Definitions.--For purposes of this subtitle, the term ``plan
payments'' with respect to a regional or corporate alliance, means the
amount paid to health plans by the alliance.
Subpart D--General Provisions
SEC. 3041. DEFINITIONS.
For purposes of this subtitle:
(1) The term ``academic year'' has the meaning given such
term in section 3011(b).
(2) The term ``allocation period'' has the meaning given
such term in section 3013(d).
(3) The term ``annual health professions workforce
account'' has the meaning given such term in section 3033(d).
(4) The term ``annual number of specialty positions'' has
the meaning given such term in section 3012(e).
(5) The term ``approved physician training program'' has
the meaning given such term in section 3011(b).
(6) The term ``consumer price index'' has the meaning given
such term in section 3033(d).
(7) The term ``designation period'' has the meaning given
such term in section 3012(e).
(8) The term ``eligible program'' has the meaning given
such term in section 3011(b), in the case of subpart B; and has
the meaning given such term in section 3031(c), in the case of
subpart C.
(9) The term ``funding agreement'' has the meaning given
such term in section 3011(b).
(10) The term ``general health care inflation factor'' has
the meaning given such term in section 3033(d).
(11) The term ``medical school'' has the meaning given such
term in section 3001(e).
(12) The term ``medical specialty'' has the meaning given
such term in section 3011(b).
(13) The term ``National Council'' has the meaning given
such term in section 3001(e).
(14) The term ``plan payments'' has the meaning given such
term in section 3034(e).
(15) The term ``primary health care'' has the meaning given
such term in section 3012(e).
(16) The term ``specialty position'' has the meaning given
such term in section 3012(e).
(17) The term ``training participant'' has the meaning
given such term in section 3012(e).
Subpart E--Transitional Provisions
SEC. 3051. TRANSITIONAL PAYMENTS TO INSTITUTIONS.
(a) Payments Regarding Effects of Subpart B Allocations.--For each
of the four calendar years specified in subsection (b)(2), in the case
of an institution that submits to the Secretary an application for such
year in accordance with subsection (d), the Secretary shall make
payments for the year to the institution for the purpose specified in
subsection (c). The Secretary shall make the payments in an amount
determined in accordance with subsection (e), and may administer the
payments as a contract, grant, or cooperative agreement.
(b) Institutions Losing Specialty Positions; Relevant Years
Regarding Payments.--
(1) Institutions losing specialty positions.--The Secretary
may make payments under subsection (a) to an institution only
if, with respect to the calendar year involved, the institution
meets the following conditions:
(A) The institution operates one or more programs
that--
(i) are approved physician training
programs; and
(ii) are receiving payments under section
3031 for such year.
(B) The aggregate number of speciality positions in
such programs (in the medical specialities with respect
to which such payments are made) is below the aggregate
number of such positions at the institution for
academic year 1993-94 as a result of allocations under
subpart B.
(2) Relevant years.--The Secretary may make payments under
subsection (a) to an institution only for the first four
calendar years after calendar 1997 for which the institution
meets the conditions described in paragraph (1).
(3) Eligible institution.--For purposes of this section,
the term ``eligible institution'' means an institution that
submits to the Secretary an application in accordance with
subsection (d).
(c) Purpose of Payments.--The purpose of payments under subsection
(a) is to assist an eligible institution with the costs of operation. A
funding agreement for such payments is that the institution involved
will expend the payments only for such purpose.
(d) Application for Payments.--For purposes of subsection (a), an
application for payments under such subsection is in accordance with
this subsection if the institution involved submits the application not
later than the date specified by the Secretary; the application
demonstrates that the institution meets the conditions described in
subsection (b)(1) and that the institution has cooperated with the
approved physician training programs of the institution in meeting the
condition described in section 3032(b); the application contains each
funding agreement described in this subpart and the application
provides such assurances of compliance with the agreements as the
Secretary may require; and the application is in such form, is made in
such manner, and contains such agreements, assurances, and information
as the Secretary determines to be necessary to carry out this subpart.
(e) Amount of Payments.--
(1) In general.--Subject to the annual health professions
workforce account available for the calendar year involved, the
amount of payments required in subsection (a) to be made to an
eligible institution for such year is the product of the amount
determined under paragraph (2) and the applicable percentage
specified in paragraph (3).
(2) Number of specialty positions lost; national average
salary.--For purposes of paragraph (1), the amount determined
under this paragraph for an eligible institution for the
calendar year involved is the product of--
(A) an amount equal to the aggregate number of
full-time equivalent specialty positions lost; and
(B) the national average salary of training
participants.
(3) Applicable percentage.--For purposes of paragraph (1),
the applicable percentage for a calendar year is the following,
as applicable to such year:
(A) For the first calendar year after calendar 1997
for which the eligible institution involved meets the
conditions described in subsection (b)(1), 100 percent.
(B) For the second such year, 75 percent.
(C) For the third such year, 50 percent.
(D) For the fourth such year, 25 percent.
(4) Determination of specialty positions lost.--
(A) For purposes of this subsection, the aggregate
number of specialty positions lost, with respect to a
calendar year, is the difference between--
(i) the aggregate number of specialty
positions described in subparagraph (B) that
are estimated for the eligible institution
involved for the academic year beginning in
such calendar year; and
(ii) the aggregate number of such specialty
positions at the institution for academic year
1993-94.
(B) For purposes of subparagraph (A), the specialty
positions described in this subparagraph are specialty
positions in the medical specialities with respect to
which payments under section 3031 are made to the
approved physician training programs of the eligible
institution involved.
(5) Additional provision regarding national average
salary.--
(A) The Secretary shall determine, for academic
year 1992-93, an amount equal to the national average
described in paragraph (2)(B). The national average
applicable under such paragraph for a calendar year is,
subject to subparagraph (B), the amount determined
under the preceding sentence increased by an amount
necessary to offset the effects of inflation occurring
since academic year 1992-93, as determined through use
of the consumer price index.
(B) The national average determined under
subparagraph (A) and applicable to a calendar year
shall, in the case of the eligible institution
involved, be adjusted by a factor to reflect regional
differences in the applicable wage and wage-related
costs.
PART 2--INSTITUTIONAL COSTS OF GRADUATE NURSING EDUCATION; WORKFORCE
PRIORITIES
SEC. 3061. NATIONAL COUNCIL; AUTHORIZED GRADUATE NURSE TRAINING
POSITIONS; INSTITUTIONAL COSTS.
(a) Program Regarding Graduate Nurse Training Programs.--The
Secretary shall, in accordance with this part, carry out a program with
respect to graduate nurse training programs that is equivalent to the
program carried out under part 1 with respect to approved physician
training programs.
(b) Definitions.--For purposes of this part:
(1) The term ``graduate nurse training programs'' means
programs for advanced nurse education, programs for education
as nurse practitioners, programs for education as nurse
midwives, programs for education as nurse anesthetists, and
such other programs for training in clinical nurse specialties
as are determined by the Secretary to require advanced
education.
(2) The term ``graduate nurse training position'' means a
position as an individual who is enrolled in a graduate nurse
training program.
(3) The term ``programs for advanced nurse education''
means programs meeting the conditions to be programs for which
awards of grants and contracts may be made under section 821 of
the Public Health Service Act.
(4) The term ``programs for education as nurse
practitioners'' means programs meeting the conditions to be
programs for which awards of grants and contracts may be made
under section 822 of the Public Health Service Act for
education as a nurse practitioners.
(5) The term ``programs for education as nurse midwives''
means programs meeting the conditions to be programs for which
awards of grants and contracts may be made under section 822 of
the Public Health Service Act for education as nurse midwives.
(6) The term ``programs for education as nurse
anesthetists'' means programs meeting the conditions to be
programs for which awards of grants may be made under section
831 of the Public Health Service Act for education as nurse
anesthetists.
SEC. 3062. APPLICABILITY OF PART 1 PROVISIONS.
(a) In General.--The provisions of part 1 apply to the program
carried out under section 3061 to the same extent and in the same
manner as such provisions apply to the program carried out under part
1, subject to the subsequent provisions of this section. Section 3051
does not apply for purposes of the preceding sentence.
(b) National Council.--With respect to section 3001 as applied to
this part, the council shall be known as the National Council on
Graduate Nurse Education (in this part referred to as the ``National
Council''). The provisions of section 851 of the Public Health Service
Act regarding the composition of the council under such section apply
to the composition of the National Council to the same extent and in
the same manner as such provisions apply to the council under such
section 851.
(c) Allocation of Graduate Nurse Training Positions; Formula
Payments for Operating Costs.--With respect to subparts B and C of part
1 as applied to this part--
(1) the funding agreement described in section 3011 is to
be made by graduate nurse training programs;
(2) designations under section 3012 and allocations under
section 3013 apply to graduate nurse training positions; and
(3) payments under section 3031 are to be made to graduate
nurse training programs, subject to the requirements for such
payments.
SEC. 3063. FUNDING.
(a) In General.--With respect to sections 3033 and 3034 as applied
to this part, the provisions of this section apply.
(b) Annual Graduate Nurse Training Account.--Subject to subsection
(c), the amount available for each calendar year for making payments
pursuant to section 3062(c)(3) to graduate nurse training programs
(constituting an account to be known as the annual graduate nurse
training account) is $200,000,000.
(c) Sources of Funds for Account.--The amount specified in
subsection (b) for the annual graduate nurse training account for a
calendar year shall be derived from the following sources:
(1) The transfer under section 3034(d)(3).
(2) The transfer under section 3104(d)(3).
PART 3--RELATED PROGRAMS
SEC. 3071. PROGRAMS OF THE SECRETARY OF HEALTH AND HUMAN SERVICES.
(a) In General.--
(1) Funding.--For purposes of carrying out the programs
described in this section, there is authorized to be
appropriated $400,000,000 for fiscal year 1994 and each
subsequent fiscal year (in addition to amounts that may
otherwise be authorized to be appropriated for carrying out the
programs).
(2) Administration.--The programs described in this section
and carried out with amounts made available under subsection
(a) shall be carried out by the Secretary of Health and Human
Services.
(b) Primary Care Physician and Physician Assistant Training.--For
purposes of subsection (a), the programs described in this section
include programs to support projects to train additional numbers of
primary care physicians and physician assistants, including projects to
enhance community-based generalist training for medical students,
residents, and practicing physicians; to retrain mid-career physicians
previously certified in a nonprimary care medical specialty; to expand
the supply of physicians with special training to serve in rural and
inner-city medically underserved areas; to support expansion of
service-linked educational networks that train a range of primary care
providers in community settings; to provide for training in managed
care, cost-effective practice management, and continuous quality
improvement; and to develop additional information on primary care
workforce issues as required to meet future needs in health care.
(c) Training of Underrepresented Minorities and Disadvantaged
Persons.--For purposes of subsection (a), the programs described in
this section include a program to support projects to increase the
number of underrepresented minority and disadvantaged persons in
medicine, osteopathy, dentistry, nursing, public health, and other
health professions, including projects to provide continuing financial
assistance for such persons entering health professions training
programs; to increase support for recruitment and retention of such
persons in the health professions; to maintain efforts to foster
interest in health careers among such persons at the preprofessional
level; and to increase the number of minority health professions
faculty.
(d) Nurse Training.--For purposes of subsection (a), the programs
described in this section include a program to support projects to
support midlevel provider training and address priority nursing
workforce needs, including projects to train additional nurse
practitioners and nurse midwives; to support baccalaureate-level nurse
training programs providing preparation for careers in teaching,
community health service, and specialized clinical care; to train
additional nurse clinicians and nurse anesthetists; to support
interdisciplinary school-based community nursing programs; and to
promote research on nursing workforce issues.
(e) Inappropriate Practice Barriers; Full Utilization of Skills.--
For purposes of subsection (a), the programs described in this section
include a program--
(1) to develop and encourage the adoption of model
professional practice statutes for advanced practice nurses and
physician assistants, and to otherwise support efforts to
remove inappropriate barriers to practice by such nurses and
such physician assistants; and
(2) to promote the full utilization of the professional
education and clinical skills of advanced practice nurses and
physician assistants.
(f) Other Programs.--For purposes of subsection (a), the programs
described in this section include a program to train health
professionals and administrators in managed care, cost-effective
practice management, continuous quality improvement practices, and
provision of culturally sensitive care.
(g) Relationship to Existing Programs.--This section may be carried
out through programs established in title VII or VIII of the Public
Health Service Act, as appropriate and as consistent with the purposes
of such programs.
SEC. 3072. PROGRAMS OF THE SECRETARY OF LABOR.
(a) In General.--
(1) Funding.--For purposes of carrying out the programs
described in this section, and for carrying out section 3073,
there is authorized to be appropriated $200,000,000 for fiscal
year 1994 and each subsequent fiscal year (in addition to
amounts that may otherwise be authorized to be appropriated for
carrying out the programs).
(2) Administration.--The programs described in this section
and carried out with amounts made available under subsection
(a) shall be carried out by the Secretary of Labor (in this
section referred to as the ``Secretary'').
(b) Retraining Programs; Advanced Career Positions; Workforce
Adjustment Programs.--
(1) In general.--For purposes of subsection (a), the
programs described in this section are the following:
(A) A program for skills upgrading and occupational
retraining (including retraining health care workers
for more advanced positions as technicians, nurses, and
physician assistants), and for quality and workforce
improvement.
(B) A demonstration program to assist workers in
health care institutions in obtaining advanced career
positions.
(C) A program to develop and operate health-worker
job banks in local employment services agencies,
subject to the following:
(i) Such job banks shall be available to
all health care providers in the community
involved.
(ii) Such job banks shall begin operation
not later than 90 days after the date of the
enactment of this Act.
(D) A program to provide for joint labor-management
decision-making in the health care sector on workplace
matters related to the restructuring of the health care
delivery system provided for in this Act.
(E) A program to facilitate the comprehensive
workforce adjustment initiative.
(2) Use of funds.--Amounts made available under subsection
(a) for carrying out this section may be expended for program
support, faculty development, trainee support, workforce
analysis, and dissemination of information, as necessary to
produce required performance outcomes.
(c) Certain Requirements for Programs.--In carrying out the
programs described in subsection (b), the Secretary shall, with respect
to the organizations and employment positions involved, provide for the
following:
(1) Explicit, clearly defined skill requirements developed
for all the positions and projections of the number of openings
for each position.
(2) Opportunities for internal career movement.
(3) Opportunities to work while training or completing an
educational program.
(4) Evaluation and dissemination.
(5) Training opportunities in several forms, as
appropriate.
(d) Administrative Requirements.--In carrying out the programs
described in subsection (b), the Secretary shall, with respect to the
organizations and employment positions involved, provide for the
following:
(1) Joint labor-management implementation and
administration.
(2) Discussion with employees as to training needs for
career advancement.
(3) Commitment to a policy of internal hirings and
promotion.
(4) Provision of support services.
(5) Consultations with employers and with organized labor.
SEC. 3073. NATIONAL INSTITUTE FOR HEALTH CARE WORKFORCE DEVELOPMENT.
(a) Establishment of Institute.--The Secretary of Health and Human
Services and the Secretary of Labor shall jointly establish an office
to be known as the National Institute for Health Care Workforce
Development.
(b) Director.--The Institute shall be headed by a director, who
shall be appointed jointly by the Secretaries.
(c) Duties.--
(1) In general.--The Director of the Institute shall make
recommendations to the Secretaries regarding--
(A) the supply of health care workers needed for
proper staffing of the health care delivery system
serving the regional and corporate alliance health
plans established under title I;
(B) the impact of this Act, and of related changes
regarding health care, on health care workers and the
needs of such workers with respect to such matters,
including needs regarding education, training, and
other matters relating to career development; and
(C) the development and implementation of high-
performance, high-quality health care delivery systems,
including employee participation committee systems and
employee team systems, that will contribute to the
development of better, more effective health care by
increasing the role, the responsibilities and the area
of independent decision-making authority of health care
workers.
(2) Administration of programs regarding retraining,
advanced career positions, job banks, and high-performance
workplaces.--The Secretary of Labor is authorized to--
(A) carry out section 3073 acting through the
Director of the Institute; and
(B) implement the recommendations of the Director
regarding employee participation committees and other
high-performance systems.
(d) Advisory Board.--
(1) In general.--The Secretaries shall establish an
advisory board to assist in the develop of recommendations
under subsection (c).
(2) Composition.--The Advisory Board shall be composed of--
(A) the Secretary of Labor;
(B) the Secretary of Health and Human Services;
(C) representatives of health care workers in
organized labor;
(D) representatives of health care institutions;
(E) representatives of health care education
organizations;
(F) representatives of consumer organizations; and
(G) such other individuals as the Secretaries
determine to be appropriate.
(e) Staff, Quarters, and Other Assistance.--The Secretaries shall
provide the Institute and the Advisory Board with such staff, quarters,
and other administrative assistance as may be necessary for the
Institute and the Advisory Board to carry out this section.
(f) Definitions.--For purposes of this section:
(1) The term ``Advisory Board'' means the advisory board
established under subsection (d).
(2) The term ``employee participation committees'' means
committees of workers independently drawn from a facility's
workforce, or selected by unions where collective bargaining
agreements are in effect, and which operate without employer
interference and consult with management on issues of costs and
efficiency, workplace reorganizations, productivity, and
quality of care.
(3) The term ``Institute'' means the Institute established
under subsection (a).
(4) The term ``Secretaries'' means the Secretary of Health
and Human Services and the Secretary of Labor.
(g) Sunset.--Effective upon the end of calendar year 2000, this
section is repealed.
SEC. 3074. REQUIREMENT FOR CERTAIN PROGRAMS REGARDING REDEPLOYMENT OF
HEALTH CARE WORKERS.
(a) State Programs for Home and Community-Based Services for
Individuals with Disabilities.--With respect to the plan required in
section 2102(a) (for State programs for home and community-based
services for individuals with disabilities under part 1 of subtitle B
of title II), the plan shall, in addition to requirements under such
part, provide for the following:
(1) Before initiating the process of implementing the State
program under such plan, negotiations will be commenced with
labor unions representing the employees of the affected
hospitals or other facilities.
(2) Negotiations under paragraph (1) will address the
following:
(A) The impact of the implementation of the program
upon the workforce.
(B) Methods to redeploy workers to positions in the
proposed system, in the case of workers affected by the
program.
(3) The plan will provide evidence that there has been
compliance with paragraphs (1) and (2), including a description
of the results of the negotiations.
(b) Plan for Integration of Mental Health Systems.--With respect to
the plan required in section 3511(a) (relating to the integration of
the mental health and substance abuse services of a State and its
political subdivisions with the mental health and substance abuse
services included in the comprehensive benefit package under title I),
the plan shall, in addition to requirements under such section, provide
for the following:
(1) Before initiating the process of implementing the
integration of such services, negotiations will be commenced
with labor unions representing the employees of the affected
hospitals or other facilities.
(2) Negotiations under paragraph (1) will address the
following:
(A) The impact of the proposed changes upon the
workforce.
(B) Methods to redeploy workers to positions in the
proposed system, in the case of workers affected by the
proposed changes.
(3) The plan will provide evidence that there has been
compliance with paragraphs (1) and (2), including a description
of the results of the negotiations.
Title III, Subtitle B
Subtitle B--Academic Health Centers
PART 1--FORMULA PAYMENTS
SEC. 3101. FEDERAL FORMULA PAYMENTS TO ACADEMIC HEALTH CENTERS.
(a) In General.--In the case of a qualified academic health center
or qualified teaching hospital that in accordance with section 3102
submits to the Secretary a written request for calendar year 1996 or
any subsequent calendar year, the Secretary shall make payments for
such year to the center or hospital for the purpose specified in
subsection (b). The Secretary shall make the payments in an amount
determined in accordance with section 3103, and may administer the
payments as a contract, grant, or cooperative agreement.
(b) Payments for Costs Attributable to Academic Nature of
Institutions.--The purpose of payments under subsection (a) is to
assist eligible institutions with costs that are not routinely incurred
by other entities in providing health services, but are incurred by
such institutions in providing health services by virtue of the
academic nature of such institutions. Such costs include--
(1) with respect to productivity in the provision of health
services, costs resulting from the reduced rate of productivity
of faculty due to teaching responsibilities;
(2) the uncompensated costs of clinical research; and
(3) exceptional costs associated with the treatment of
health conditions with respect to which an eligible institution
has specialized expertise (including treatment of rare
diseases, treatment of unusually severe conditions, and
providing other specialized health care).
(c) Definitions.--
(1) Academic health center.--For purposes of this subtitle,
the term ``academic health center'' means an entity that--
(A) operates a school of medicine or osteopathic
medicine, as defined in section 799 of the Public
Health Service Act;
(B) operates, or is affiliated with, one or more
other types of schools or programs described in such
section, or with one or more schools of nursing (as
defined in section 853 of such Act); and
(C) operates, or is affiliated with, one or more
teaching hospitals.
(2) Teaching hospital.--For purposes of this subtitle, the
term ``teaching hospital'' means a hospital that operates an
approved physician training program (as defined in section
3011(b)).
(3) Qualified center or hospital.--For purposes of this
subtitle:
(A) The term ``qualified academic health center''
means an academic health center that operates a
teaching hospital.
(B) The term ``qualified teaching hospital'' means
any teaching hospital other than a teaching hospital
that is operated by an academic health center.
(4) Eligible institution.--For purposes of this subtitle,
the term ``eligible institution'', with respect to a calendar
year, means a qualified academic health center, or a qualified
teaching hospital, that submits to the Secretary a written
request in accordance with section 3102.
SEC. 3102. REQUEST FOR PAYMENTS.
(a) In General.--For purposes of section 3101, a written request for
payments under such section is in accordance with this section if the
qualified academic health center or qualified teaching hospital
involved submits the request not later than the date specified by the
Secretary; the request is accompanied by each funding agreement
described in this part; and the request is in such form, is made in
such manner, and contains such agreements, assurances, and information
as the Secretary determines to be necessary to carry out this part.
(b) Continued Status as Academic Health Center.--A funding
agreement for payments under section 3101 is that the qualified
academic health center or qualified teaching hospital involved will
maintain status as such a center or hospital, respectively. For
purposes of this subtitle, the term ``funding agreement'', with respect
to payments under section 3101 to such a center or hospital, means that
the Secretary may make the payments only if the center or hospital
makes the agreement involved.
SEC. 3103. AVAILABILITY OF FUNDS FOR PAYMENTS; ANNUAL AMOUNT OF
PAYMENTS.
(a) Annual Academic Health Center Account.--Subject to section
3104, the amount available for a calendar year for making payments
under section 3101 (constituting an account to be known as the annual
academic health center account) is the following, as applicable to the
calendar year:
(1) In the case of calendar year 1996, $3,100,000,000.
(2) In the case of each of the calendar years 1997 and
1998, $3,200,000,000.
(3) In the case of calendar year 1999, $3,700,000,000.
(4) In the case of calendar year 2000, $3,800,000,000.
(5) In the case of each subsequent calendar year, the
amount specified in paragraph (4) increased by the product of
such amount and the general health care inflation factor (as
defined in subsection (d)).
(b) Amount of Payments for Individual Eligible Institutions.--The
amount of payments required in section 3101 to be made to an eligible
institution for a calendar year is an amount equal to the product of--
(1) the annual academic health center account available for
the calendar year; and
(2) the percentage constituted by the ratio of--
(A) an amount equal to the product of--
(i) the portion of the gross receipts of
the institution for the preceding calendar year
that was derived from providing services to
patients (both inpatients and outpatients); and
(ii) the indirect teaching adjustment
factor determined under section
1886(d)(5)(B)(ii) of the Social Security Act
(as in effect before January 1, 1998) and--
(I) applicable to patients
discharged from the institution (or
hospitals of the institution, as the
case may be) in such preceding year; or
(II) in the case of patients
discharged on or after January 1, 1998,
applicable to patients discharged in
calendar year 1997; to
(B) the sum of the respective amounts determined
under subparagraph (A) for eligible institutions.
(c) Report Regarding Modifications in Formula.--Not later than July
1, 1996, the Secretary shall submit to the Congress a report containing
any recommendations of the Secretary regarding policies for allocating
amounts under subsection (a) among eligible institutions. In making
such recommendations, the Secretary shall consider the costs described
in section 3101(b) that are incurred by such institutions.
(d) Definition.--For purposes of this subtitle:
(1) The term ``annual academic health center account''
means the account established pursuant to subsection (a).
(2) The term ``general health care inflation factor'', with
respect to a year, has the meaning given such term in section
6001(a)(3) for such year.
SEC. 3104. ADDITIONAL FUNDING PROVISIONS.
(a) Sources of Funds for Annual Academic Health Center Account.--
The amount specified in section 3103(a) for the annual academic health
center account for a calendar year shall be derived from the sources
specified in subsection (b).
(b) Contributions From Medicare Trust Funds, Regional Alliances,
and Corporate Alliances.--For purposes of subsection (a), the sources
specified in this subsection for a calendar year are the following:
(1) Transfers made by the Secretary under section 4052.
(2) Payments made by regional alliances under section 1353
and--
(A) in the case of each of the calendar years 1996
and 1997, transferred in an amount equal to 50 percent
of such payments made for the calendar year involved;
and
(B) in the case of calendar year 1998 and each
subsequent calendar year, transferred in an amount
equal to the aggregate regional alliance portion
determined under subsection (c)(2)(A).
(3) The transfer made under subsection (d)(1).
(c) Contributions From Regional and Corporate Alliances.--
(1) Determination of aggregate regional and corporate
alliance amount.--For purposes regarding the provision of funds
for the annual academic health center account for a calendar
year (other than calendar year 1996 or 1997), the Secretary
shall determine an aggregate regional and corporate alliance
amount, which amount is to be paid by such alliances pursuant
to paragraphs (2)(B) and (3) of subsection (b), respectively,
and which amount shall be equal to the difference between--
(A) the amount specified in section 3103(a) for the
annual academic health center account for such year;
and
(B) the amount transferred under section 4052 for
the year.
(2) Allocation of amount among regional and corporate
alliances.--With respect to the aggregate regional and
corporate alliance amount determined under paragraph (1) for a
calendar year (other than calendar year 1996 or 1997)--
(A) the aggregate regional alliance portion of such
amount is the product of such amount and the percentage
constituted by the ratio of the total plan payments of
regional alliances to the combined total plan payments
of regional alliances and corporate alliances; and
(B) the aggregate corporate alliance portion of
such amount is the product of such amount and the
percentage constituted by the ratio of the total plan
payments of corporate alliances to such combined total
plan payments.
(d) Compliance Regarding Corporate Alliances.--
(1) In general.--Effective January 15 of calendar year 1996
and each subsequent calendar year, there is hereby transferred
to the Secretary, out of any money in the Treasury not
otherwise appropriated--
(A) in the case of each of the calendar years 1996
and 1997, an amount equal to the difference between--
(i) the amount specified in section 3103(a)
for the annual academic health center account
for the calendar year involved; and
(ii) the sum of the amount transferred
under section 4052 for such year and the amount
transferred under subsection (b)(2)(A) for such
year; and
(B) in the case of calendar year 1998 and each
subsequent calendar year, an amount equal to the
aggregate corporate alliance portion determined under
subsection (c)(2)(B) for the calendar year involved.
(2) Manner of compliance.--The payment by corporate
alliances of the tax imposed under section 3461 of the Internal
Revenue Code of 1986 (as added by section 7121 of this Act),
together with the transfer made in paragraph (1)(B) for the
calendar year involved, is deemed to be the payment required
pursuant to subsection (c)(1) for corporate alliances for such
year.
(3) Graduate nurse education.--Effective January 15 of
calendar year 1996 and each subsequent calendar year, there is
hereby transferred to the Secretary, out of any money in the
Treasury not otherwise appropriated, 50 percent of the amount
specified in section 3063(b) with respect to the annual
graduate nurse training account.
(e) Definitions.--For purposes of this subtitle, the term ``plan
payments'' with respect to a regional or corporate alliance, means the
amount paid to health plans by the alliance.
PART 2--ACCESS OF PATIENTS TO ACADEMIC HEALTH CENTERS
SEC. 3131. CONTRACTS FOR ENSURING ACCESS TO CENTERS.
(a) Contracts With Health Plans.--Regional and corporate health
alliances under this Act shall ensure that, in accordance with
subsection (b), the health plans of the alliances enter into sufficient
contracts with eligible centers to ensure that enrollees in regional or
corporate alliance health plans, as appropriate, receive the
specialized treatment expertise of such centers, subject to such
exceptions as the Secretary may provide.
(b) Utilization of Specialized Treatment Expertise of Centers.--
Contracts under subsection (a) between eligible centers and health
plans are in accordance with this subsection if the contracts provide
that, with respect to health conditions within the specialized
treatment expertise of the centers, health plans will refer medical
cases involving such conditions to the centers.
(c) Specialized Treatment Expertise.--For purposes of this
subtitle, the term ``specialized treatment expertise'', with respect to
treatment of a health condition by an academic health center, means
expertise in treating rare diseases, treating unusually severe
conditions, and providing other specialized health care.
SEC. 3132. DISCRETIONARY GRANTS REGARDING ACCESS TO CENTERS.
(a) Rural Information and Referral Systems.--The Secretary may make
grants to eligible centers for the establishment and operation of
information and referral systems to provide the services of such
centers to rural regional and corporate health alliance health plans.
(b) Other Purposes Regarding Urban and Rural Areas.--The Secretary
may make grants to eligible centers to carry out activities (other than
activities carried out under subsection (a)) for the purpose of
providing the services of eligible centers to residents of rural or
urban communities who otherwise would not have adequate access to such
services.
Title III, Subtitle C
Subtitle C--Health Research Initiatives
PART 1--PROGRAMS FOR CERTAIN AGENCIES
SEC. 3201. BIOMEDICAL AND BEHAVIORAL RESEARCH ON HEALTH PROMOTION AND
DISEASE PREVENTION.
Section 402(f) of the Public Health Service Act (42 U.S.C. 282(f)),
as amended by section 201 of Public Law 103-43 (107 Stat. 144), is
amended--
(1) in paragraph (3), by redesignating subparagraphs (A)
and (B) as clauses (i) and (ii), respectively;
(2) by redesignating paragraphs (1) through (3) as
subparagraphs (A) through (C);
(3) by inserting ``(1)'' after ``(f)''; and
(4) by adding at the end the following paragraph:
``(2)(A) The Director of NIH, in collaboration with the Associate
Director for Prevention and with the heads of the agencies of the
National Institutes of Health, shall ensure that such Institutes
conduct and support biomedical and behavioral research on promoting
health and preventing diseases, disorders, and other health conditions
(including Alzheimer's disease, breast cancer, heart disease, and
stroke).
``(B) In carrying out subparagraph (A), the Director of NIH shall
give priority to conducting and supporting research on child and
adolescent health (including birth defects), chronic and recurrent
health conditions, reproductive health, mental health, elderly health,
substance abuse, infectious diseases, health and wellness promotion,
and environmental health, and to resource development related to such
research.''.
SEC. 3202. HEALTH SERVICES RESEARCH.
Section 902 of the Public Health Service Act (42 U.S.C. 299a), as
amended by section 2(b) of Public Law 102-410 (106 Stat. 2094), is
amended by adding at the end the following subsection:
``(f) Research on Health Care Reform.--
``(1) In general.--In carrying out section 901(b), the
Administrator shall conduct and support research on the reform
of the health care system of the United States, as directed by
the National Board.
``(2) Priorities.--In carrying out paragraph (1), the
Administrator shall give priority to the following:
``(A) Conducting and supporting research on the
appropriateness and effectiveness of alternative
clinical strategies; the quality and outcomes of care;
and administrative simplification.
``(B) Conducting and supporting research on
consumer choice and information resources; the effects
of health care reform on health delivery systems;
workplace injury and illness prevention; methods for
risk adjustment; factors influencing access to health
care for underserved populations; and primary care.
``(C) The development of clinical practice
guidelines consistent with section 913, the
dissemination of such guidelines consistent with
section 903, and the assessment of the effectiveness of
such guidelines.''.
PART 2--FUNDING FOR PROGRAMS
SEC. 3211. AUTHORIZATIONS OF APPROPRIATIONS.
(a) Biomedical and Behavioral Research on Health Promotion and
Disease Prevention.--For the purpose of carrying out activities
pursuant to the amendments made by section 3201, there are authorized
to be appropriated $400,000,000 for fiscal year 1995, and $500,000,000
for each of the fiscal years 1996 through 2000.
(b) Health Services Research.--For the purpose of carrying out
activities pursuant to the amendments made by section 3202, there are
authorized to be appropriated $150,000,000 for fiscal year 1995,
$400,000,000 for fiscal year 1996, $500,000,000 for fiscal year 1997,
and $600,000,000 for each of the fiscal years 1998 through 2000.
(c) Relation to Other Funds.--The authorizations of appropriations
established in subsections (a) and (b) are in addition to any other
authorizations of appropriations that are available for the purposes
described in such subsections.
Title III, Subtitle C
Subtitle D--Core Functions of Public Health Programs; National
Initiatives Regarding Preventive Health
PART 1--FUNDING
SEC. 3301. AUTHORIZATIONS OF APPROPRIATIONS.
(a) Core Functions of Public Health Programs.--For the purpose of
carrying out part 2, there are authorized to be appropriated
$12,000,000 for fiscal year 1995, $325,000,000 for fiscal year 1996,
$450,000,000 for fiscal year 1997, $550,000,000 for fiscal year 1998,
$650,000,000 for fiscal year 1999, and $750,000,000 for fiscal year
2000.
(b) National Initiatives Regarding Health Promotion and Disease
Prevention.--For the purpose of carrying out part 3, there are
authorized to be appropriated $175,000,000 for fiscal year 1996, and
$200,000,000 for each of the fiscal years 1997 through 2000.
(c) Relation to Other Funds.--The authorizations of appropriations
established in subsections (a) and (b) are in addition to any other
authorizations of appropriations that are available for the purposes
described in such subsections.
PART 2--CORE FUNCTIONS OF PUBLIC HEALTH PROGRAMS
SEC. 3311. PURPOSES.
Subject to the subsequent provisions of this subtitle, the purposes
of this part are to strengthen the capacity of State and local public
health agencies to carry out the following functions:
(1) To monitor and protect the health of communities
against communicable diseases and exposure to toxic
environmental pollutants, occupational hazards, harmful
products, and poor quality health care.
(2) To identify and control outbreaks of infectious disease
and patterns of chronic disease and injury.
(3) To inform and educate health care consumers and
providers about their roles in preventing and controlling
disease and the appropriate use of medical services.
(4) To develop and test new prevention and public health
control interventions.
SEC. 3312. GRANTS TO STATES FOR CORE HEALTH FUNCTIONS.
(a) In General.--The Secretary may make grants to States for the
purpose of carrying out one or more of the functions described in
subsection (b).
(b) Core Functions of Public Health Programs.--For purposes of
subsection (a), the functions described in this subsection are, subject
to subsection to subsection (c), as follows:
(1) Data collection, activities related to population
health measurement and outcomes monitoring, including the
regular collection and analysis of public health data, vital
statistics, and personal health services data and analysis for
planning and needs assessment purposes of data collected from
health plans through the information system under title V of
this Act.
(2) Activities to protect the environment and to assure the
safety of housing, workplaces, food and water, including the
following activities:
(A) Monitoring the overall public health quality
and safety of communities.
(B) Assessing exposure to high lead levels and
water contamination.
(C) Monitoring sewage and solid waste disposal,
radiation exposure, radon exposure, and noise levels.
(D) Abatement of lead-related hazards.
(E) Assuring recreation and worker safety.
(F) Enforcing public health safety and sanitary
codes.
(G) Other activities relating to promoting the
public health of communities.
(3) Investigation and control of adverse health conditions,
including improvements in emergency treatment preparedness,
cooperative activities to reduce violence levels in
communities, activities to control the outbreak of disease,
exposure related conditions and other threats to the health
status of individuals.
(4) Public information and education programs to reduce
risks to health such as use of tobacco, alcohol and other
drugs, sexual activities that increase the risk to HIV
transmission and sexually transmitted diseases, poor diet,
physical inactivity, and low childhood immunization levels.
(5) Accountability and quality assurance activities,
including monitoring the quality of personal health services
furnished by health plans and providers of medical and health
services in a manner consistent with the overall quality of
care monitoring activities undertaken under title V, and
monitoring communities' overall access to health services.
(6) Provision of public health laboratory services to
complement private clinical laboratory services and that screen
for diseases and conditions such as metabolic diseases in
newborns, provide toxicology assessments of blood lead levels
and other environmental toxins, diagnose sexually transmitted
diseases, tuberculosis and other diseases requiring partner
notification, test for infectious and food-borne diseases, and
monitor the safety of water and food supplies.
(7) Training and education to assure provision of care by
all health professionals, with special emphasis placed on the
training of public health professions including
epidemiologists, biostatisticians, health educators, public
health administrators, sanitarians and laboratory technicians.
(8) Leadership, policy development and administration
activities, including needs assessment, the setting of public
health standards, the development of community public health
policies, and the development of community public health
coalitions.
(c) Restrictions on Use of Grant.--
(1) In general.--A funding agreement for a grant under
subsection (a) for a State is that the grant will not be
expended--
(A) to provide inpatient services;
(B) to make cash payments to intended recipients of
health services;
(C) to purchase or improve land, purchase,
construct, or permanently improve (other than minor
remodeling) any building or other facility, or purchase
major medical equipment;
(D) to satisfy any requirement for the expenditure
of non-Federal funds as a condition for the receipt of
Federal funds; or
(E) to provide financial assistance to any entity
other than a public or nonprofit private entity.
(2) Limitation on administrative expenses.--A funding
agreement for a grant under subsection (a) is that the State
involved will not expend more than 10 percent of the grant for
administrative expenses with respect to the grant.
(d) Maintenance of Effort.--A funding agreement for a grant under
subsection (a) is that the State involved will maintain expenditures of
non-Federal amounts for core health functions at a level that is not
less than the level of such expenditures maintained by the State for
the fiscal year preceding the first fiscal year for which the State
receives such a grant.
SEC. 3313. SUBMISSION OF INFORMATION.
The Secretary may make a grant under section 3312 only if the State
involved submits to the Secretary the following information:
(1) A description of existing deficiencies in the State's
public health system (at the State level and the local level),
using standards of sufficiency developed by the Secretary.
(2) A description of health status measures to be improved
within the State (at the State level and the local level)
through expanded public health functions.
(3) Measurable outcomes and process objectives for
improving health status and core health functions for which the
grant is to be expended.
(4) Information regarding each such function, which--
(A) identifies the amount of State and local
funding expended on each such function for the fiscal
year preceding the fiscal year for which the grant is
sought; and
(B) provides a detailed description of how
additional Federal funding will improve each such
function by both the State and local public health
agencies.
(5) A description of the core health functions to be
carried out at the local level, and a specification for each
such function of--
(A) the communities in which the function will be
carried out; and
(B) the amount of the grant to be expended for the
function in each community so specified.
SEC. 3314. REPORTS.
A funding agreement for a grant under section 3312 is that the
States involved will, not later than the date specified by the
Secretary, submit to the Secretary a report describing--
(1) the purposes for which the grant was expended; and
(2) describing the extent of progress made by the State in
achieving measurable outcomes and process objectives described
in section 3313(3).
SEC. 3315. APPLICATION FOR GRANT.
The Secretary may make a grant under section 3312 only if an
application for the grant is submitted to the Secretary, the
application contains each agreement described in this part, the
application contains the information required in section 3314, and the
application is in such form, is made in such manner, and contains such
agreements, assurances, and information as the Secretary determines to
be necessary to carry out this part.
SEC. 3316. GENERAL PROVISIONS.
(a) Uniform Data Sets.--The Secretary, in consultation with the
States, shall develop uniform sets of data for the purpose of
monitoring the core health functions carried out with grants under
section 3312.
(b) Duration of Grant.--The period during which payments are made
to a State from a grant under section 3312 may not exceed 5 years. The
provision of such payments shall be subject to annual approval by the
Secretary of the payments. This subsection may not be construed as
establishing a limitation on the number of grants under such section
that may be made to the State.
SEC. 3317. ALLOCATIONS FOR CERTAIN ACTIVITIES.
Of the amounts made available under section 3301 for a fiscal year
for carrying out this part, the Secretary may reserve not more than 5
percent for carrying out the following activities:
(1) Technical assistance with respect to planning,
development, and operation of core health functions carried out
under section 3312, including provision of biostatistical and
epidemiological expertise and provision of laboratory
expertise.
(2) Development and operation of a national information
network among State and local health agencies.
(3) Program monitoring and evaluation of core health
functions carried out under section 3312.
(4) Development of a unified electronic reporting mechanism
to improve the efficiency of administrative management
requirements regarding the provision of Federal grants to State
public health agencies.
SEC. 3318. DEFINITIONS.
For purposes of this part:
(1) The term ``funding agreement'', with respect to a grant
under section 3312 to a State, means that the Secretary may
make the grant only if the State makes the agreement involved.
(2) The term ``core health functions'', with respect to a
State, means the functions described in section 3312(b).
PART 3--NATIONAL INITIATIVES REGARDING HEALTH PROMOTION AND DISEASE
PREVENTION
SEC. 3331. GRANTS FOR NATIONAL PREVENTION INITIATIVES.
(a) In General.--The Secretary may make grants to entities
described in subsection (b) for the purpose of carrying out projects to
develop and implement innovative community-based strategies to provide
for health promotion and disease prevention activities for which there
is a significant need, as identified under section 1701 of the Public
Health Service Act.
(b) Eligible Entities.--The entities referred to in subsection (a)
are agencies of State or local government, private nonprofit
organizations (including research institutions), and coalitions that
link two or more of these groups.
(c) Certain Activities.--The Secretary shall ensure that projects
carried out under subsection (a)--
(1) reflect approaches that take into account the special
needs and concerns of the affected populations;
(2) are targeted to the most needy and vulnerable
population groups and geographic areas of the Nation;
(3) examine links between various high priority preventable
health problems and the potential community-based remedial
actions; and
(4) establish or strengthen the links between the
activities of agencies engaged in public health activities with
those of health alliances, health care providers, and other
entities involved in the personal health care delivery system
described in title I.
SEC. 3332. PRIORITIES.
(a) Establishment.--
(1) Annual statement.--The Secretary shall for each fiscal
year develop a statement of proposed priorities for grants
under section 3331 for the fiscal year.
(2) Allocations among priorities.--With respect to the
amounts available under section 3301(b) for the fiscal year for
carrying out this part, each statement under paragraph (1) for
a fiscal year shall include a specification of the percentage
of the amount to be devoted to projects addressing each of the
proposed priorities established in the statement.
(3) Process for establishing priorities.--Not later than
January 1 of each fiscal year, the Secretary shall publish a
statement under paragraph (1) in the Federal Register. A period
of 60 days shall be allowed for the submission of public
comments and suggestions concerning the proposed priorities.
After analyzing and considering comments on the proposed
priorities, the Secretary shall publish in the Federal Register
final priorities (and associated reservations of funds) for
approval of projects for the following fiscal year.
(b) Applicability to Making of Grants.--
(1) In general.--The Secretary may make grants under
section 3331 for projects that the Secretary determines--
(A) are consistent with the applicable final
statement of priorities and otherwise meets the
objectives described in subsection (a); and
(B) will assist in meeting a health need or concern
of a population served by a health plan or health
alliance established under title I.
(2) Special consideration for certain projects.--In making
grants under section 3331, the Secretary shall give special
consideration to applicants that will carry out projects that,
in addition to being consistent with the applicable published
priorities under subsection (a) and otherwise meeting the
requirements of this part, have the potential for replication
in other communities.
SEC. 3333. SUBMISSION OF INFORMATION.
The Secretary may make a grant under section 3331 only if the
applicant involved submits to the Secretary the following information:
(1) A description of the activities to be conducted, and
the manner in which the activities are expected to contribute
to meeting one or more of the priority health needs specified
under section 3332 for the fiscal year for which the grant is
initially sought.
(2) A description of the total amount of Federal funding
requested, the geographic area and populations to be served,
and the evaluation procedures to be followed.
(3) Such other information as the Secretary determines to
be appropriate.
SEC. 3334. APPLICATION FOR GRANT.
The Secretary may make a grant under section 3331 only if an
application for the grant is submitted to the Secretary, the
application contains each agreement described in this part, the
application contains the information required in section 3333, and the
application is in such form, is made in such manner, and contains such
agreements, assurances, and information as the Secretary determines to
be necessary to carry out this part.
Subtitle E--Health Services for Medically Underserved Populations
PART 1--COMMUNITY AND MIGRANT HEALTH CENTERS
Title III, Subtitle E
SEC. 3401. AUTHORIZATIONS OF APPROPRIATIONS.
(a) Grants to Community and Migrant Health Centers.--The Secretary
shall make grants in accordance with this part to migrant health
centers and community health centers.
(b) Authorization of Appropriations.--For the purpose of carrying
out subsection (a), there are authorized to be appropriated
$100,000,000 for each of the fiscal years 1995 through 2000.
(c) Relation to Other Funds.--The authorizations of appropriations
established in subsection (b) for the purpose described in such
subsection are in addition to any other authorizations of
appropriations that are available for such purpose.
(d) Definitions.--For purposes of this subtitle, the terms
``migrant health center'' and ``community health center'' have the
meanings given such terms in sections 329(a)(1) and 330(a) of the
Public Health Service Act, respectively.
SEC. 3402. USE OF FUNDS.
(a) Development, Operation, and Other Purposes Regarding Centers.--
Subject to subsection (b), grants under section 3401 to migrant health
centers and community health centers may be made only in accordance
with the conditions upon which grants are made under sections 329 and
330 of the Public Health Service Act, respectively.
(b) Required Financial Reserves.--The Secretary may authorize
migrant health centers and community health centers to expend a grant
under section 3401 to establish and maintain the financial reserves
required under title I for providers of health services.
PART 2--INITIATIVES FOR ACCESS TO HEALTH CARE
Subpart A--Purposes; Funding
SEC. 3411. PURPOSES.
Subject to the provisions of subparts B through D, the purposes of
this part are as follows:
(1) To improve access to health services for urban and
rural medically-underserved populations through a program of
flexible grants, contracts, and loans.
(2) To facilitate transition to a system in which
medically-underserved populations have an adequate choice of
community-oriented providers and health plans.
(3) To promote the development of community practice
networks and community health plans that integrate health
professionals and health care organizations supported through
public funding with other providers in medically underserved
areas.
(4) To support linkages between providers of health care
for medically-underserved populations and regional and
corporate alliance health plans.
(5) To expand the capacity of community practice networks
and community health plans in underserved areas by increasing
the number of practice sites and by renovating and converting
substandard inpatient and outpatient facilities.
(6) To link providers in underserved areas with each other
and with regional health care institutions and academic health
centers through information systems and telecommunications.
(7) To support activities that enable medically underserved
populations to gain access to the health care system and use it
effectively.
SEC. 3412. AUTHORIZATIONS OF APPROPRIATIONS.
(a) Development of Qualified Community Health Plans and Practice
Groups.--For the purpose of carrying out subparts B and C, there are
authorized to be appropriated $200,000,000 for fiscal year 1995,
$500,000,000 for fiscal year 1996, $600,000,000 for fiscal year 1997,
$700,000,000 for fiscal year 1998, $500,000,000 for fiscal year 1999,
and $200,000,000 for fiscal year 2000.
(b) Relation to Other Funds.--The authorizations of appropriations
established in subsection (a) are in addition to any other
authorizations of appropriations that are available for the purpose
described in such subsection.
(c) Relationship to Program Regarding School-Related Health
Services.--This section is subject to section 3692.
Subpart B--Development of Qualified Community Health Plans and Practice
Networks
SEC. 3421. GRANTS AND CONTRACTS FOR DEVELOPMENT OF PLANS AND NETWORKS.
(a) In General.--The Secretary may make grants to and enter into
contracts with consortia of public or private health care providers for
the development of qualified community health plans and qualified
community practice networks. For purposes of this subtitle, the term
``qualified community health group'' means such a health plan or such a
practice network.
(b) Qualified Community Health Plans.--For purposes of this
subtitle, the term ``qualified community health plan'' means a health
plan that meets the following conditions:
(1) The health plan is a public or nonprofit private entity
whose principal purpose is, with respect to the items and
services included in the comprehensive benefit package under
title I, to provide each of such items and services in one or
more health professional shortage areas or to provide such
items and services to a significant number of individuals who
are members of a medically underserved population.
(2) The health plan is a participant in one or more health
alliances.
(3) Two or more of the categories specified in subsection
(d) are represented among the entities providing health
services through the health plan.
(c) Qualified Community Practice Networks.--For purposes of this
subtitle, the term ``qualified community practice network'' means a
consortium of health care providers meeting the following conditions:
(1) The consortium is a public or nonprofit private entity
whose principal purpose is the purpose described in subsection
(b)(1).
(2) The consortium has an agreement with one or more health
plans that are participating in one or more health alliances.
(3) The participation of health care providers in the
consortium is governed by a written agreement to which each of
the participating providers is a party.
(4) Two or more of the categories described in subsection
(d) are represented among the entities participating in the
consortium.
(d) Relevant Categories of Entities.--For purposes of subsections
(b)(3) and (c)(4), the categories described in this subsection are the
following categories of entities:
(1) Physicians, other health professionals, or health care
institutions that provide health services in one or more health
professional shortage areas or provide such services to a
significant number of individuals who are members of a
medically underserved population, and that do not provide
health services under any of the programs specified in
paragraphs (2) through (7) or as employees of public entities.
(2) Entities providing health services under grants under
sections 329 and 330 of the Public Health Service Act.
(3) Entities providing health services under grants under
sections 340 and 340A of such Act.
(4) Entities providing health services under grants under
section 1001 or title XXVI of such Act.
(5) Entities providing health services under title V of the
Social Security Act.
(6) Entities providing health services through rural health
clinics and other federally qualified health centers.
(7) Entities providing health services in urban areas
through programs under title V of the Indian Health Care
Improvement Act, and entities providing outpatient health
services through programs under the Indian Self-Determination
Act.
(8) Programs providing personal health services and
operating through State or local public health agencies.
(e) Rule of Construction.--The consortia to which the Secretary may
make an award of financial assistance under subsection (a) for the
development of qualified community practice networks include any health
plan that participates in one or more health alliances, without regard
to whether the health plan is a qualified community health plan.
(f) Service Area.--In making an award of financial assistance under
subsection (a), the Secretary shall designate the geographic area with
respect to which the qualified community health group involved is to
provide health services. A funding agreement for such an award is that
the qualified community health group involved will provide such
services in the area so designated.
(g) Definitions.--For purposes of this subtitle:
(1) The term ``health professional shortage areas'' means
health professional shortage areas designated under section 332
of the Public Health Service Act.
(2) The term ``medically underserved population'' means a
medically underserved population designated under section 330
of the Public Health Service Act.
(3) The term ``rural health clinic'' has the meaning given
such term in section 1861(aa)(2) of the Social Security Act.
(4) The term ``federally qualified health centers'' has the
meaning given such term in section 1861(aa)(4) of the Social
Security Act.
(5) The term ``service area'', with respect to a qualified
community health group, means the geographic area designated
under subsection (f).
(6) The term ``funding agreement'', with respect to an
award of financial assistance under this section, means that
the Secretary may make the award only if the applicant for the
award makes the agreement involved.
(7) The term ``financial assistance'', with respect to
awards under subsection (a), means a grant or contract.
SEC. 3422. PREFERENCES IN MAKING AWARDS OF ASSISTANCE.
In making awards of financial assistance under section 3421, the
Secretary shall give preference to applicants in accordance with the
following:
(1) The Secretary shall give preference if 3 or more of the
categories described in subsection (d) of such section will be
represented in the qualified community health group involved
(pursuant to subsection (b)(3) or (c)(4) of such section, as
the case may be).
(2) Of applicants receiving preference under paragraph (1),
the Secretary shall give a greater degree of preference
according to the extent to which a greater number of categories
are represented.
(3) Of applicants receiving preference under paragraph (1),
the Secretary shall give a greater degree of preference if one
of the categories represented is the category described in
subsection (d)(1) of such section.
SEC. 3423. CERTAIN USES OF AWARDS.
(a) In General.--Subject to subsection (b), the purposes for which
an award of financial assistance under section 3421 may be expended in
developing a qualified community health group include the following:
(1) Planning such group, including entering into contracts
between the recipient of the award and health care providers
who are to participate in the group.
(2) Recruitment, compensation, and training of health
professionals and administrative staff.
(3) Acquisition, expansion, modernization, and conversion
of facilities, including for purposes of providing for sites at
which health services are to be provided through such group.
(4) Acquisition and development of information systems
(exclusive of systems that the Secretary determines are
information highways).
(5) Such other expenditures as the Secretary determines to
be appropriate.
(b) Twenty-year Obligation Regarding Significant Capital
Expenditures; Right of Recovery.--
(1) In general.--With respect to a facility for which
substantial capital costs are to paid from an award of
financial assistance under section 3421, the Secretary may make
the award only if the applicant involved agrees that the
applicant will be liable to the United States for the amount of
the award expended for such costs, together with an amount
representing interest, if at any time during the 20-year period
beginning on the date of completion of the activities involved,
the facility--
(A) ceases to be a facility utilized by a qualified
community health group, or by another public or
nonprofit private entity that provides health services
in one or more health professional shortage areas or
that provides such services to a significant number of
individuals who are members of a medically underserved
population; or
(B) is sold or transferred to any entity other than
an entity that is--
(i) a qualified community health group or
other entity described in subparagraph (A); and
(ii) approved by the Secretary as a
purchaser or transferee regarding the facility.
(2) Subordination; waivers.--The Secretary may subordinate
or waive the right of recovery under paragraph (1), and any
other Federal interest that may be derived by virtue of an
award of financial assistance under section 3421 from which
substantial capital costs are to paid, if the Secretary
determines that subordination or waiver will further the
objectives of this part.
SEC. 3424. ACCESSIBILITY OF SERVICES.
(a) Services for Certain Individuals.--A funding agreement for an
award of financial assistance under section 3421 is that the qualified
community health group involved will ensure that the services of the
group will be accessible directly or through formal contractual
arrangements with its participating providers regardless of whether
individuals who seek care from the applicant are eligible persons under
title I.
(b) Use of Third-Party Payors.--A funding agreement for an award of
financial assistance under section 3421 is that the qualified community
health group involved will ensure that the health care providers of the
group are all approved by the Secretary as providers under title XVIII
of the Social Security Act and by the appropriate State agency as
providers under title XIX of the Social Security Act, and the applicant
has made or will make every reasonable effort to collect appropriate
reimbursement for its costs in providing health services to individuals
who are entitled to health benefits under title I of this Act,
insurance benefits under title XVIII of the Social Security Act,
medical assistance under a State plan approved under title XIX of the
Social Security Act, or to assistance for medical expenses under any
other public assistance program or private health insurance program.
(c) Schedule of Fees.--A funding agreement for an award of
financial assistance under section 3421 is that the qualified community
health group involved will--
(1) prepare a schedule of fees or payments for the
provision of health services not covered by title I that is
consistent with locally prevailing rates or charges and
designed to cover its reasonable costs of operation and has
prepared a corresponding schedule of discounts to be applied to
the payment of such fees or payments (or payments of cost
sharing amounts owed in the case of covered benefits) which
discounts are applied on the basis of the patient's ability to
pay; and
(2) make every reasonable effort to secure from patients
payment in accordance with such schedules, and to collect
reimbursement for services to persons entitled to public or
private insurance benefits or other medical assistance on the
basis of full fees without application of discounts, except
that the applicant will ensure that no person is denied service
based on the person's inability to pay therefor.
(d) Barriers Within Service Area.--A funding agreement for an award
of financial assistance under section 3421 is that the qualified
community health group involved will ensure that the following
conditions are met:
(1) In the service area of the group, the group will ensure
that--
(A) the services of the group are accessible to all
residents; and
(B) to the maximum extent possible, barriers to
access to the services of the group are eliminated,
including barriers resulting from the area's physical
characteristics, its residential patterns, its
economic, social and cultural groupings, and available
transportation.
(2) The group will periodically conduct reviews within the
service area of the group to determine whether the conditions
described in paragraph (1) are being met.
(e) Limited Ability to Speak English Language.--A funding agreement
for an award of financial assistance under section 3421 is that, if the
service area of the qualified community health group involved includes
a substantial number of individuals who have a limited ability to speak
the English language, the applicant will--
(1) maintain arrangements responsive to the needs of such
individuals for providing services to the extent practicable in
the language and cultural context most appropriate to such
individuals; and
(2) maintain a sufficient number of staff members who are
fluent in both English and the languages spoken by such
individuals, and will ensure that the responsibilities of the
employees include providing guidance and assistance to such
individuals and to other staff members of the group.
SEC. 3425. ADDITIONAL AGREEMENTS.
(a) Required Services.--A funding agreement for an award of
financial assistance under section 3421 is that the qualified community
health group involved will provide enabling services (as defined in
section 3461(g)) and all of the items and services identified by the
Secretary in rules regarding qualified community health plans and
practice networks.
(b) Quality Control System.--A funding agreement for an award of
financial assistance under section 3421 is that the qualified community
health group involved will maintain a community-oriented, patient
responsive, quality control system under which the group, in accordance
with regulations prescribed by the Secretary--
(1) conducts an ongoing quality assurance program for the
health services delivered by participating provider entities;
(2) maintains a continuous community health status
improvement process; and
(3) maintains a system for development, compilation,
evaluation and reporting of information to the public regarding
the costs of operation, service utilization patterns,
availability, accessibility and acceptability of services,
developments in the health status of the populations served,
uniform health and clinical performance measures and financial
performance of the network or plan.
(c) Use of Existing Resources.--A funding agreement for an award of
financial assistance under section 3421 is that the applicant will, in
developing the qualified community health group involved, utilize
existing resources to the maximum extent practicable.
SEC. 3426. SUBMISSION OF CERTAIN INFORMATION.
(a) Assessment of Need.--The Secretary may make an award of
financial assistance under section 3421 only if the applicant involved
submits to the Secretary an assessment of the need that the medically
underserved population or populations proposed to be served by the
applicant have for health services and for enabling services (as
defined in section 3461(g)).
(b) Description of Intended Expenditures; Related Information.--The
Secretary may make an award of financial assistance under section 3421
only if the applicant involved submits to the Secretary the following
information:
(1) A description of how the applicant will design the
proposed quality community health plan or practice network
(including the service sites involved) for such populations
based on the assessment of need.
(2) A description of efforts to secure, within the proposed
service area of such health plan or practice network (including
the service sites involved), financial and professional
assistance and support for the project.
(3) Evidence of significant community involvement in the
initiation, development and ongoing operation of the project.
SEC. 3427. REPORTS; AUDITS.
A funding agreement for an award of financial assistance under
section 3421 is that the applicant involved will--
(1) provide such reports and information on activities
carried out under this section in a manner and form required by
the Secretary; and
(2) provide an annual organization-wide audit that meets
applicable standards of the Secretary.
SEC. 3428. APPLICATION FOR ASSISTANCE.
The Secretary may make an award of financial assistance under
section 3421 only if an application for the award is submitted to the
Secretary, the application contains each funding agreement described in
this subpart, the application contains the information required in
section 3426, and the application is in such form, is made in such
manner, and contains such agreements, assurances, and information as
the Secretary determines to be necessary to carry out this subpart.
SEC. 3429. GENERAL PROVISIONS.
(a) Limitation on Number of Awards.--The Secretary may not make
more than two awards of financial assistance under section 3421 for the
same project.
(b) Amount.--The amount of any award of financial assistance under
section 3421 for any project shall be determined by the Secretary.
Subpart C--Capital Cost of Development of Qualified Community Health
Plans and Practice Networks
SEC. 3441. LOANS AND LOAN GUARANTEES REGARDING PLANS AND NETWORKS.
(a) In General.--The Secretary may make loans to, and guarantee the
payment of principal and interest to Federal and non-Federal lenders on
behalf of, public and private entities for the capital costs of
developing qualified community health groups (as defined in section
3421(a)).
(b) Preferences; Accessibility of Services; Certain Other
Provisions.--The provisions of subpart B apply to loans and loan
guarantees under subsection (a) to the same extent and in the same
manner as such provisions apply to awards of grants and contracts under
section 3421.
(c) Use of Assistance.--
(1) In general.--With respect to the development of
qualified community health groups, the capital costs for which
loans made pursuant to subsection (a) may be expended are,
subject to paragraphs (2) and (3), the following:
(A) The acquisition, modernization, expansion or
construction of facilities, or the conversion of
unneeded hospital facilities to facilities that will
assure or enhance the provision and accessibility of
health care and enabling services to medically
underserved populations.
(B) The purchase of major equipment, including
equipment necessary for the support of external and
internal information systems.
(C) The establishment of reserves required for
furnishing services on a prepaid basis.
(D) Such other capital costs as the Secretary may
determine are necessary to achieve the objectives of
this section.
(2) Priorities regarding use of funds.--In providing loans
or loan guarantees under subsection (a) for an entity, the
Secretary shall give priority to authorizing the use of amounts
for projects for the renovation and modernization of medical
facilities necessary to prevent or eliminate safety hazards,
avoid noncompliance with licensure or accreditation standards,
or projects to replace obsolete facilities.
(3) Limitation.--The Secretary may authorize the use of
amounts under subsection (a) for the construction of new
buildings only if the Secretary determines that appropriate
facilities are not available through acquiring, modernizing,
expanding or converting existing buildings, or that
construction new buildings will cost less.
(d) Amount of assistance.--The principal amount of loans or loan
guarantees under subsection (a) may, when added to any other assistance
under this section, cover up to 100 percent of the costs involved.
SEC. 3442. CERTAIN REQUIREMENTS.
(a) Loans.--
(1) In general.--The Secretary may approve a loan under
section 3441 only if--
(A) the Secretary is reasonably satisfied that the
applicant for the project for which the loan would be
made will be able to make payments of principal and
interest thereon when due; and
(B) the applicant provides the Secretary with
reasonable assurances that there will be available to
it such additional funds as may be necessary to
complete the project or undertaking with respect to
which such loan is requested.
(2) Terms and conditions.--Any loan made under section 3441
shall, subject to the Federal Credit Reform Act of 1990, meet
such terms and conditions (including provisions for recovery in
case of default) as the Secretary, in consultation with the
Secretary of the Treasury, determines to be necessary to carry
out the purposes of such section while adequately protecting
the financial interests of the United States. Terms and
conditions for such loans shall include provisions regarding
the following:
(A) Security.
(B) Maturity date.
(C) Amount and frequency of installments.
(D) Rate of interest, which shall be at a rate
comparable to the rate of interest prevailing on the
date the loan is made.
(b) Loan Guarantees.--The Secretary may not approve a loan
guarantee under section 3441 unless the Secretary determines that the
terms, conditions, security (if any), schedule and amount of repayments
with respect to the loan are sufficient to protect the financial
interests of the United States and are otherwise reasonable. Such loan
guarantees shall be subject to such further terms and conditions as the
Secretary determines, in consultation with the Secretary of the
Treasury, and subject to the Federal Credit Reform Act of 1990, to be
necessary to ensure that the purposes of this section will be achieved.
(c) Use of Existing Resources.--The Secretary may provide a loan or
loan guarantee under section 3441 only if the applicant involved agrees
that, in developing the qualified community health group involved, the
applicant will utilize existing resources to the maximum extent
practicable.
SEC. 3443. DEFAULTS; RIGHT OF RECOVERY.
(a) Defaults.--
(1) In general.--The Secretary may take such action as may
be necessary to prevent a default on loans or loan guarantees
under section 3441, including the waiver of regulatory
conditions, deferral of loan payments, renegotiation of loans,
and the expenditure of funds for technical and consultative
assistance, for the temporary payment of the interest and
principal on such a loan, and for other purposes.
(2) Foreclosure.--The Secretary may take such action,
consistent with State law respecting foreclosure procedures, as
the Secretary deems appropriate to protect the interest of the
United States in the event of a default on a loan made pursuant
to section 3441, including selling real property pledged as
security for such a loan or loan guarantee and for a reasonable
period of time taking possession of, holding, and using real
property pledged as security for such a loan or loan guarantee.
(3) Waivers.--The Secretary may, for good cause, but with
due regard to the financial interests of the United States,
waive any right of recovery which the Secretary has by reasons
of the failure of a borrower to make payments of principal of
and interest on a loan made pursuant to section 3441, except
that if such loan is sold and guaranteed, any such waiver shall
have no effect upon the Secretary's guarantee of timely payment
of principal and interest.
(b) Twenty-year Obligation; Right of Recovery.--
(1) In general.--With respect to a facility for which a
loan is to be made pursuant to section 3441, the Secretary may
provide the loan or loan guarantee only if the applicant
involved agrees that the applicant will be liable to the United
States for the amount of the loan or loan guarantee, together
with an amount representing interest, if at any time during the
20-period beginning on the date of completion of the activities
involved, the facility--
(A) ceases to be a facility utilized by a qualified
community health group, or by another public or
nonprofit private entity that provides health services
in one or more health professional shortage areas or
that provides such services to a significant number of
individuals who are members of a medically underserved
population; or
(B) is sold or transferred to any entity other than
an entity that is--
(i) a qualified community health group or
other entity described in subparagraph (A); and
(ii) approved by the Secretary as a
purchaser or transferee regarding the facility.
(2) Subordination; waivers.--The Secretary may subordinate
or waive the right of recovery under paragraph (1), and any
other Federal interest that may be derived by virtue of a loan
or loan guarantee under subsection (a), if the Secretary
determines that subordination or waiver will further the
objectives of this part.
SEC. 3444. PROVISIONS REGARDING CONSTRUCTION OR EXPANSION OF
FACILITIES.
(a) Submission of Information.--In the case of a project for
construction, conversion, expansion or modernization of a facility, the
Secretary may provide loans or loan guarantees under section 3441 only
if the applicant submits to the Secretary the following:
(1) A description of the site.
(2) Plans and specifications which meet requirements
prescribed by the Secretary.
(3) Information reasonably demonstrating that title to such
site is vested in one or more of the entities filing the
application (unless the agreement described in subsection
(b)(1) is made).
(4) A specification of the type of assistance being
requested under section 3441.
(b) Agreements.--In the case of a project for construction,
conversion, expansion or modernization of a facility, the Secretary may
provide loans or loan guarantees under section 3441 only if the
applicant makes the following agreements:
(1) Title to such site will be vested in one or more of the
entities filing the application (unless the assurance described
in subsection (a)(3) has been submitted under such subsection).
(2) Adequate financial support will be available for
completion of the project and for its maintenance and operation
when completed.
(3) All laborers and mechanics employed by contractors or
subcontractors in the performance of work on a project will be
paid wages at rates not less than those prevailing on similar
construction in the locality as determined by the Secretary of
Labor in accordance with the Act of March 3, 1931 (40 U.S.C.
276a et seq; commonly known as the Davis-Bacon Act), and the
Secretary of Labor shall have with respect to such labor
standards the authority and functions set forth in
Reorganization Plan Numbered 14 of 1950 (15 FR 3176; 5 U.S.C.
Appendix) and section 276c of title 40.
(4) The facility will be made available to all persons
seeking service regardless of their ability to pay.
SEC. 3445. APPLICATION FOR ASSISTANCE.
The Secretary may provide loans or loan guarantees under section
3441 only if an application for such assistance is submitted to the
Secretary, the application contains each agreement described in this
subpart, the application contains the information required in section
3444(a), and the application is in such form, is made in such manner,
and contains such agreements, assurances, and information as the
Secretary determines to be necessary to carry out this subpart.
SEC. 3446. ADMINISTRATION OF PROGRAMS.
This subpart, and any other program of the Secretary that provides
loans or loan guarantees, shall be carried out by a centralized loan
unit established within the Department of Health and Human Services.
Subpart D--Enabling Services
SEC. 3461. GRANTS AND CONTRACTS FOR ENABLING SERVICES.
(a) In General.--
(1) Grants and contracts.--The Secretary may make grants to
and enter into contracts with entities described in paragraph
(2) to assist such entities in providing the services described
in subsection (b) for the purpose of increasing the capacity of
individuals to utilize the items and services included in the
comprehensive benefits package under title I.
(2) Relevant entities.--For purposes of paragraph (1), the
entities described in this paragraph are qualified community
health groups (as defined in section 3421(a)), and other public
or nonprofit private entities, that--
(A) provide health services in one or more health
professional shortage areas or that provide such
services to a significant number of individuals who are
members of a medically underserved population; and
(B) are experienced in providing services to
increase the capacity of individuals to utilize health
services.
(b) Enabling Services.--The services referred to in subsection
(a)(1) are transportation, community and patient outreach, patient
education, translation services, and such other services as the
Secretary determines to be appropriate in carrying out the purpose
described in such subsection.
(c) Certain Requirements Regarding Project Area.--The Secretary may
make an award of a grant or contract under subsection (a) only if the
applicant involved--
(1) submits to the Secretary--
(A) information demonstrating that the medically
underserved populations in the community to be served
under the award have a need for enabling services; and
(B) a proposed budget for providing such services;
and
(2) the applicant for the award agrees that the residents
of the community will be significantly involved in the project
carried out with the award.
(d) Imposition of Fees.--The Secretary may make an award of a grant
or contract under subsection (a) only if the applicant involved agrees
that, in the project carried out under such subsection, enabling
services will be provided without charge to the recipients of the
services.
(e) Use of Existing Resources.--The Secretary may make an award of
a grant or contract under subsection (a) only if the applicant involved
agrees that, in carrying out the project under such subsection, the
applicant will utilize existing resources to the maximum extent
practicable.
(f) Application for Awards of Assistance.--The Secretary may make
an award of a grant or contract under subsection (a) only if an
application for the award is submitted to the Secretary, the
application contains each agreement described in this subpart, the
application contains the information required in subsection (d)(1), and
the application is in such form, is made in such manner, and contains
such agreements, assurances, and information as the Secretary
determines to be necessary to carry out this subpart.
(g) Definition.--For purposes of this section, the term ``enabling
services'' means services described in subsection (b) that are provided
for the purpose described in subsection (a)(1).
SEC. 3462. AUTHORIZATIONS OF APPROPRIATIONS.
(a) Enabling Services.--For the purpose of carrying out section
3461, there are authorized to be appropriated $200,000,000 for fiscal
year 1996, $300,000,000 for each of the fiscal years 1997 through 1999,
and $100,000,000 for fiscal year 2000.
(b) Relation to Other Funds.--The authorizations of appropriations
established in subsection (a) are in addition to any other
authorizations of appropriations that are available for the purpose
described in such subsection.
PART 3--NATIONAL HEALTH SERVICE CORPS
SEC. 3471. AUTHORIZATIONS OF APPROPRIATIONS.
(a) Additional Funding; General Corps Program; Allocations
Regarding Nurses.--For the purpose of carrying out subpart II of part D
of title III of the Public Health Service Act, and for the purpose of
carrying out section 3472, there are authorized to be appropriated
$50,000,000 for fiscal year 1995, $100,000,000 for fiscal year 1996,
and $200,000,000 for each of the fiscal years 1997 through 2000.
(b) Relation to Other Funds.--The authorizations of appropriations
established in subsection (a) are in addition to any other
authorizations of appropriations that are available for the purpose
described in such subsection.
(c) Availability of Funds.--An appropriation under this section for
any fiscal year may be made at any time before that fiscal year and may
be included in an Act making an appropriation under an authorization
under subsection (a) for another fiscal year; but no funds may be made
available from any appropriation under this section for obligation
under sections 331 through 335, section 336A, and section 337 before
the fiscal year involved.
SEC. 3472. ALLOCATION FOR PARTICIPATION OF NURSES IN SCHOLARSHIP AND
LOAN REPAYMENT PROGRAMS.
Of the amounts appropriated under section 3471, the Secretary shall
reserve such amounts as may be necessary to ensure that, of the
aggregate number of individuals who are participants in the Scholarship
Program under section 338A of the Public Health Service Act, or in the
Loan Repayment Program under section 338B of such Act, the total number
who are being educated as nurses or are serving as nurses,
respectively, is increased to 20 percent.
PART 4--PAYMENTS TO HOSPITALS SERVING VULNERABLE POPULATIONS
SEC. 3481. PAYMENTS TO HOSPITALS.
(a) Entitlement Status.--The Secretary shall make payments in
accordance with this part to eligible hospitals described in section
3482. The preceding sentence--
(1) is an entitlement in the Secretary on behalf of such
eligible hospitals (but is not an entitlement in the State in
which any such hospital is located or in any individual
receiving services from any such hospital); and
(2) constitutes budget authority in advance of
appropriations Acts and represents the obligation of the
Federal Government to provide funding for such payments in the
amounts, and for the fiscal years, specified in subsection (b).
(b) Amount of Entitlement.--
(1) In general.--For purposes of subsection (a)(2), the
amounts and fiscal years specified in this subsection are (in
the aggregate for all eligible hospitals) $800,000,000 for the
fiscal year in which the general effective date occurs and for
each subsequent fiscal year.
(2) Special rule for years before general effective date.--
(A) In general.--For any fiscal year that begins
prior to the general effective date, the amount
specified in this subsection for purposes of subsection
(a)(2) shall be equal to the aggregate DSH percentage
of the amount otherwise determined under paragraph (1).
(B) Aggregate dsh percentage defined.--In
subparagraph (A), the ``aggregate DSH percentage'' for
a year is the amount (expressed as a percentage) equal
to--
(i) the total amount of payment made by the
Secretary under section 1903(a) of the Social
Security Act during the base year with respect
to payment adjustments made under section
1923(c) of such Act for hospitals in the States
in which eligible hospitals for the year are
located; divided by
(ii) the total amount of payment made by
the Secretary under section 1903(a) of such Act
during the base year with respect to payment
adjustments made under section 1923(c) of such
Act for hospitals in all States.
(c) Period of Payment.--An eligible hospital shall receive a
payment under this section for a period of 5 years, without regard to
the year for which the hospital first receives a payment.
(d) Payments Made on Quarterly Basis.--Payments to an eligible
hospital under this section for a year shall be made on a quarterly
basis during the year.
SEC. 3482. IDENTIFICATION OF ELIGIBLE HOSPITALS.
(a) Hospitals in Participating States.--In order to be an eligible
hospital under this part, a hospital must be located in a State that is
a participating State under this Act, except that an eligible hospital
remains eligible to receive a payment under this part notwithstanding
that, during the 5-year period for which the payment is to be made, the
State in which it is located no longer meets the requirements for
participating States under this Act.
(b) State Identification.--In accordance with the criteria
described in subsection (c) and such procedures as the Secretary may
require, each State shall identify the hospitals in the State that meet
such criteria and provide the Secretary with a list of such hospitals.
(c) Criteria for Eligibility.--A hospital meets the criteria
described in this subsection if the hospital's low-income utilization
rate for the base year under section 1923(b)(3) of the Social Security
Act (as such section is in effect on the day before the date of the
enactment of this Act) is not less than 25 percent.
SEC. 3483. AMOUNT OF PAYMENTS.
(a) Distribution of Allocation for Low-Income Assistance.--
(1) Allocation from total amount.--Of the total amount
available for payments under this section in a year, 75 percent
shall be allocated to hospitals for low-income assistance in
accordance with this subsection.
(2) Determination of hospital payment amount.--The amount
of payment to an eligible hospital from the allocation made
under paragraph (1) during a year shall be the equal to the
hospital's low-income percentage of the allocation for the
year.
(b) Distribution of Allocation for Assistance for Uncovered
Services.--
(1) Allocation from total amount; determination of State-
specific portion of allocation.--Of the total amount available
for payments under this section in a year, 25 percent shall be
allocated to hospitals for assistance in furnishing inpatient
hospital services that are not covered services under title I
(in accordance with regulations of the Secretary) in accordance
with this subsection. The amount available for payments to
eligible hospitals in a State shall be equal to an amount
determined in accordance with a methodology specified by the
Secretary.
(2) Determination of hospital payment amount.--The amount
of payment to an eligible hospital in a State from the amount
available for payments to eligible hospitals in the State under
paragraph (1) during a year shall be the equal to the
hospital's low-income percentage of such amount for the year.
(c) Low-Income Percentage Defined.--
(1) In general.--In this subsection, an eligible hospital's
``low-income percentage'' for a year is equal to the amount
(expressed as a percentage) of the total low-income days for
all eligible hospitals for the year that are attributable to
the hospital.
(2) Low-income days described.--For purposes of paragraph
(1), an eligible hospital's low-income days for a year shall be
equal to the product of--
(A) the total number of inpatient days for the
hospital for the year (as reported to the Secretary by
the State in which the hospital is located, in
accordance with a reporting schedule and procedures
established by the Secretary); and
(B) the hospital's low-income utilization rate for
the base year under section 1923(b)(3) of the Social
Security Act (as such section is in effect on the day
before the date of the enactment of this Act).
SEC. 3484. BASE YEAR.
In this part, the ``base year'' is, with respect to a State and
hospitals in a State, the year immediately prior to the year in which
the general effective date occurs.
Subtitle F--Mental Health; Substance Abuse
PART 1--FINANCIAL ASSISTANCE
Title III, Subtitle F
SEC. 3501. AUTHORIZATIONS OF APPROPRIATIONS.
(a) In General.--For the purpose of carrying out this part, there
are authorized to be appropriated $100,000,000 for fiscal year 1995,
$150,000,000 for fiscal year 1996, and $250,000,000 for each of the
fiscal years 1997 through 2000.
(b) Allocation Among Programs.--Of the amounts made available under
subsection (a) for a fiscal year--
(1) the Secretary may reserve for carrying out section 3503
such amounts as the Secretary determines to be appropriate; and
(2) the Secretary shall, of the remaining amounts, reserve
50 percent for carrying out subsection (a) of section 3502 and
50 percent for carrying out subsection (b) of such section.
(c) Relation to Other Funds.--The authorizations of appropriations
established in subsection (a) are in addition to any other
authorizations of appropriations that are available for the purpose
described in such subsection.
SEC. 3502. SUPPLEMENTAL FORMULA GRANTS FOR STATES REGARDING ACTIVITIES
UNDER PART B OF TITLE XIX OF PUBLIC HEALTH SERVICE ACT.
(a) Mental Health.--
(1) In general.--In the case of any State that submits to
the Secretary an application in accordance with subsection (e)
for a fiscal year with respect to mental health, the Secretary
shall make a grant to the State for the purposes authorized in
subsection (c) with respect to mental health. The grant shall
consist of the allotment determined under paragraph (2) for the
State for such year.
(2) Determination of allotment.--For purposes of paragraph
(1), the allotment under this paragraph for a State for a
fiscal year shall be determined as follows: With respect to the
amount reserved under section 3501(b)(2) for carrying out this
subsection, section 1918 of the Public Health Service Act shall
be applied to such amount to the same extent and in the same
manner as such section 1918 is applied to the amount determined
under section 1918(a)(2) of such Act.
(b) Substance Abuse.--
(1) In general.--In the case of any State that submits to
the Secretary an application in accordance with subsection (e)
for a fiscal year with respect to substance abuse, the
Secretary shall make a grant to the State for the purposes
authorized in subsection (c) with respect to substance abuse.
The grant shall consist of the allotment determined under
paragraph (2) for the State for such year.
(2) Determination of allotment.--For purposes of paragraph
(1), the allotment under this paragraph for a State for a
fiscal year shall be determined as follows: With respect to the
amount reserved under section 3501(b)(2) for carrying out this
subsection, section 1933 of the Public Health Service Act shall
be applied to such amount to the same extent and in the same
manner as such section 1933 is applied to the amount determined
pursuant to sections 1933(a)(1)(B)(i) and 1918(a)(2)(A) of such
Act.
(c) Use of Grants.--
(1) In general.--With respect to the expenditure of a grant
to a State under subsection (a) or (b), the Secretary--
(A) shall designate as authorized expenditures such
of the activities described in paragraph (2) with
respect to mental health and substance abuse,
respectively, as the Secretary determines to be
appropriate; and
(B) may make the grant only if the State agrees to
expend the grant in accordance with the activities so
designated.
(2) Description of activities.--The activities referred to
in paragraph (1) are (as applicable to the grant involved) the
following:
(A) For the purpose of increasing the access of
individuals to services relating to mental health and
substance abuse, the following services:
Transportation, community and patient outreach, patient
education, translation services, and such other
services as the Secretary determines to be appropriate
regarding such purpose.
(B) Improving the capacity of State and local
service systems to coordinate and monitor mental health
and substance abuse services, including improvement of
management information systems, and establishment of
linkages between providers of mental health and
substance abuse services and primary care providers and
health plans.
(C) Providing incentives to integrate public and
private systems for the treatment of mental health and
substance abuse disorders.
(D) Any activity for which a grant under section
1911 or section 1921 of the Public Health Service Act
is authorized to be expended.
(d) Maintenance of Effort.--
(1) In general.--With respect to the activities for which a
grant under subsection (a) or (b) is to be made, the Secretary
may make the grant only if the State involved agrees to
maintain expenditures of non-Federal amounts for such
activities at a level that is not less than the level of such
expenditures maintained by the State for the fiscal year
preceding the first fiscal year for which the State receives
such a grant.
(2) Waiver.--The Secretary may waive all or part of the
requirement established for a State under paragraph (1) if--
(A) the State agrees that the amounts that
otherwise would have been subject to such requirement
will be expended for the purpose of developing
community-based systems of care to promote the eventual
integration of the public and private systems for
treatment of mental health, or substance abuse, as
applicable to the grant;
(B) the State submits to the Secretary a request
for the waiver and a description of the manner in which
the State will carry out such purpose; and
(C) the Secretary approves the waiver.
(e) Application for Grant.--For purposes of subsection (a)(1) and
(b)(1), an application for a grant under this section regarding mental
health or substance abuse, respectively, is in accordance with this
subsection if the State involved submits the application not later than
the date specified by the Secretary, the application contains each
applicable agreement described in this section, and the application
otherwise is in such form, is made in such manner, and contains such
agreements, assurances, and information as the Secretary determines to
be necessary to carry out the purpose involved.
SEC. 3503. CAPITAL COSTS OF DEVELOPMENT OF CERTAIN CENTERS AND CLINICS.
(a) In General.--The Secretary may make loans to, and guarantee the
payment of principal and interest to Federal and non-Federal lenders on
behalf of, public and private entities for the capital costs to be
incurred by the entities in the development of non-acute, residential
treatment centers and community-based ambulatory clinics.
(b) Priorities Regarding Use of Funds.--In providing loans or loan
guarantees under subsection (a), the Secretary shall give priority to
authorizing the use of amounts for projects in health professional
shortage areas or in geographic area in which there resides a
significant number of individuals who are members of a medically
underserved population.
(c) Applicability of Certain Provisions.--The Secretary may provide
loans or loan guarantees under subsection (a) only if the applicant
involved agrees that, except to the extent inconsistent with the
purpose described in subsection (a), subpart C of part 2 of subtitle E
applies to such assistance to the same extent and in the same manner as
such subpart applies to loans and loan guarantees under section 3441.
PART 2--AUTHORITIES REGARDING PARTICIPATING STATES
Subpart A--Report
SEC. 3511. REPORT ON INTEGRATION OF MENTAL HEALTH SYSTEMS.
(a) In General.--As a condition of being a participating State
under title I, each State shall, not later than October 1, 1998, submit
to the Secretary a report on (including a plan for) the measures to be
implemented by the State to achieve the integration of the mental
illness and substance abuse services of the State and its political
subdivisions with the mental illness and substance abuse services that
are included in the comprehensive benefit package under title I. The
plan required in the preceding sentence shall meet the conditions
described in section 3074(b).
(b) Required Contents.--With respect to the provision of items and
services relating to mental illness and substance abuse, the report of
a State under subsection (a) shall, at a minimum, contain the following
information:
(1) Information on the number of individuals served by or
through mental illness and substance abuse programs
administered by State and local agencies and the proportion who
are eligible persons under title I.
(2) The following information on services furnished to
eligible persons:
(A) Each type of benefit furnished.
(B) The mental illness diagnoses for which each
type of benefit is covered, the amount, duration and
scope of coverage for each covered benefit, and any
applicable limits on benefits.
(C) Cost sharing rules that apply.
(3) Information on the extent to which each health provider
furnishing mental illness and substance abuse services under a
State program participates in one or more regional or corporate
alliance health plans, and, in the case of providers that do
not so participate, the reasons for the lack of participation.
(4) The amount of revenues from health plans received by
mental illness and substance abuse providers that are
participating in such health plans and are funded under one or
more State programs.
(5) With respect to the two years preceding the year in
which the State becomes a participating State under title I--
(A) the amount of funds expended by the State and
its political subdivisions for each of such years for
items and services that are included in the
comprehensive benefit package under such title;
(B) the amount of funds expended for medically
necessary and appropriate items and services not
included in such benefit package, including medical
care, other health care, and supportive services
related to the provision of health care.
(6) An estimate of the amount that the State will expend to
furnish items and services not included in such package once
the expansion of coverage for mental illness and substance
abuse services is implemented in the year 2001.
(7) A description of how the State will assure that all
individuals served by mental illness and substance abuse
programs funded by the State will be enrolled in a health plan
and how mental illness and substance abuse services not covered
under the benefit package will continue to be furnished to such
enrollees.
(8) A description of the conditions under which the
integration of mental illness and substance abuse providers
into regional and corporate alliances can be achieved, and an
identification of changes in participation and certification
requirements that are needed to achieve the integration of such
programs and providers into health plans.
(9) If the integration of mental illness and substance
abuse programs operated by the State into one or more health
plans is not medically appropriate or feasible for one or more
groups of individuals treated under State programs, a
description of the reasons that integration is not feasible or
appropriate and a plan for assuring the coordination for such
individuals of the care and services covered under the
comprehensive benefit package with the additional items and
services furnished by such programs.
(c) General Provisions.--Reports under subsection (a) shall be
provided at the time and in the manner prescribed by the Secretary.
Subpart B--Pilot Program
SEC. 3521. PILOT PROGRAM.
(a) In General.--The Secretary shall establish a pilot program to
demonstrate model methods of achieving the integration of the mental
illness and substance abuse services of the States with the mental
illness and substance abuse services that are included in the
comprehensive benefit package under title I.
(b) Certain Considerations.--With respect to the provision of items
and services relating to mental illness and substance abuse, the
Secretary, in carrying out subsection (a), shall consider the
following:
(1) The types of items and services needed in addition to
the items and services included in the comprehensive benefits
package under title I.
(2) The optimal methods of treatment for individuals with
long-term conditions.
(3) The capacity of alliance health plans to furnish such
treatment.
(4) The modifications that should be made in the items and
services furnished by such health plans.
(5) The role of publicly-funded health providers in the
integration of acute and long-term treatment.
Subtitle G--Comprehensive School Health Education; School-Related
Health Services
PART 1--GENERAL PROVISIONS
SEC. 3601. PURPOSES.
Title III, Subtitle G
Subject to the subsequent provisions of this subtitle, the purposes
of this subtitle are as follows:
(1) To support the provision in kindergarten through grade
12 of sequential, age-appropriate, comprehensive health
education programs that address locally relevant priorities.
(2) To establish a national framework within which States
can create comprehensive school health education programs
that--
(A) target the health risk behaviors accounting for
the majority of the morbidity and mortality among youth
and adults, including the following: Tobacco use;
alcohol and other drug abuse; sexual behaviors
resulting in infection with the human immunodeficiency
virus, in other sexually transmitted diseases or in
unintended pregnancy; behaviors resulting in
intentional and unintentional injuries; dietary
patterns resulting in disease; and sedentary
lifestyles; and
(B) are integrated with plans and programs in the
State, if any, under title III of the Goals 2000:
Educate America Act and those targeting health
promotion and disease prevention goals related to the
national health objectives set forth in Healthy People
2000.
(3) To pay the initial costs of planning and establishing
Statewide comprehensive school health education programs that
will be implemented and maintained with local, State, and other
Federal resources.
(4) To support Federal activities such as research and
demonstrations, evaluations, and training and technical
assistance regarding comprehensive school health education.
(5) To motivate youth, especially low-achieving youth, to
stay in school, avoid teen pregnancy, and strive for success by
providing intensive, high-quality health education programs
that include peer-teaching, family, and community involvement.
(6) To improve the knowledge and skills of children and
youth by integrating academic and experiential learning in
health education with other elements of a comprehensive school
health program.
(7) To further the National Education Goals set forth in
title I of the Goals 2000: Educate America Act and the national
health objectives set forth in Healthy People 2000.
SEC. 3602. DEFINITIONS.
(a) Comprehensive School Health Education Program.--For purposes of
this subtitle, the term ``comprehensive school health education
program'' means a program that addresses locally relevant priorities
and meets the following conditions:
(1) The program is sequential, and age and developmentally
appropriate.
(2) The program is provided, in the area served by the
program, every year for all students from kindergarten through
grade 12.
(3) The program provides comprehensive health education,
including the following components:
(A) Community health.
(B) Environmental health.
(C) Personal health.
(D) Family life.
(E) Growth and development.
(F) Nutritional health.
(G) Prevention and control of disease and
disorders.
(H) Safety and prevention of injuries.
(I) Substance abuse, including tobacco and alcohol
use.
(J) Consumer health, including education to ensure
that students understand the benefits and appropriate
use of medical services, including immunizations and
other clinical preventive services.
(4) The program promotes personal responsibility for a
healthy lifestyle and provides the knowledge and skills
necessary to adopt a healthy lifestyle, including teaching the
legal, social, and health consequences of behaviors that pose
health risks.
(5) The program is sensitive to cultural and ethnic issues
in the content of instructional materials and approaches.
(6) The program includes activities that support
instruction.
(7) The program includes activities to promote involvement
by parents, families, community organizations, and other
appropriate entities.
(8) The program is coordinated with other Federal, State,
and local health education and prevention programs and with
other Federal, State and local education programs, including
those carried out under title I of the Elementary and Secondary
Education Act of 1965.
(9) The program focuses on the particular health concerns
of the students in the State, school district, or school, as
the case may be.
(b) Other Definitions.--For purposes of this subtitle:
(1) The term ``local educational agency'' has the meaning
given such term in section 1471(12) of the Elementary and
Secondary Education Act of 1965.
(2) The term ``State educational agency'' has the meaning
given such term in section 1471(23) of the Elementary and
Secondary Education Act of 1965.
PART 2--SCHOOL HEALTH EDUCATION; GENERAL PROVISIONS
SEC. 3611. AUTHORIZATIONS OF APPROPRIATIONS.
(a) Funding for School Health Education.--For the purpose of
carrying out parts 3 and 4, there are authorized to be appropriated
$50,000,000 for each of the fiscal year 1995 through 2000.
(b) Allocations.--Of the amounts appropriated under subsection (a)
for a fiscal year--
(1) the Secretary may reserve not more than $13,000,000 for
carrying out part 4;
(2) the Secretary may reserve not more than $5,000,000 to
support national leadership activities, such as research and
demonstration, evaluation, and training and technical
assistance in comprehensive school health education; and
(3) the Secretary may reserve not more than 5 percent for
administrative expenses regarding parts 3 and 4.
(c) Relation to Other Funds.--The authorizations of appropriations
established in subsection (a) are in addition to any other
authorizations of appropriations that are available for the purpose
described in such subsection.
SEC. 3612. WAIVERS OF STATUTORY AND REGULATORY REQUIREMENTS.
(a) In General.--
(1) Waivers.--Except as provided in subsection (c), upon
the request of an entity receiving funds under part 3 or part 4
and under a program specified in paragraph (2), the Secretary
of Health and Human Services or the Secretary of Education (as
the case may be, according to which Secretary administers the
program so specified) may grant to the entity a waiver of any
requirement of such program regarding the use of funds, or of
the regulations issued for the program by the Secretary
involved, if the following conditions are met with respect to
such program:
(A) The Secretary involved determines that the
requirement of such program impedes the ability of the
State educational agency or other recipient to achieve
more effectively the purposes of part 3 or 4.
(B) The Secretary involved determines that, with
respect to the use of funds under such program, the
requested use of the funds by the entity would be
consistent with the purposes of part 3 or 4.
(C) In the case of a request for a waiver submitted
by a State educational agency, the State educational
agency--
(i) provides all interested local
educational agencies in the State with notice
and an opportunity to comment on the proposal;
and
(ii) submits the comments to the Secretary
involved.
(D) In the case of a request for a waiver submitted
by a local educational agency or other agency,
institution, or organization that receives funds under
part 3 from the State educational agency, such request
has been reviewed by the State educational agency and
is accompanied by the comments, if any, of such agency.
(2) Relevant programs.--For purposes of paragraph (1), the
programs specified in this paragraph are as follows:
(A) In the case of programs administered by the
Secretary of Health and Human Services, the following:
(i) The program known as the Prevention,
Treatment, and Rehabilitation Model Projects
for High Risk Youth, carried out under section
517 of the Public Health Service Act.
(ii) The program known as the State and
Local Comprehensive School Health Programs to
Prevent Important Health Problems and Improve
Educational Outcomes, carried out under such
Act.
(B) In the case of programs administered by the
Secretary of Education, any program carried out under
part B of the Drug-Free Schools and Communities Act of
1986.
(b) Waiver Period.--
(1) In general.--A waiver under this section shall be for a
period not to exceed three years.
(2) Extensions.--The Secretary involved under subsection
(a) may extend such period if the Secretary determines that--
(A) the waiver has been effective in enabling the
State or affected recipients to carry out the
activities for which it was requested and has
contributed to improved performance; and
(B) such extension is in the public interest.
(c) Waivers Not Authorized.--The Secretary involved under
subsection (a) may not waive, under this section, any statutory or
regulatory requirement relating to--
(1) comparability of services;
(2) maintenance of effort;
(3) the equitable participation of students attending
private schools;
(4) parental participation and involvement;
(5) the distribution of funds to States or to local
educational agencies or other recipients of funds under the
programs specified in subsection (a)(2);
(6) maintenance of records;
(7) applicable civil rights requirements; or
(8) the requirements of sections 438 and 439 of the General
Education Provisions Act.
(d) Termination of Waiver.--The Secretary involved under subsection
(a) shall terminate a waiver under this section if the Secretary
determines that the performance of the State or other recipient
affected by the waiver has been inadequate to justify a continuation of
the waiver or if it is no longer necessary to achieve its original
purposes.
PART 3--SCHOOL HEALTH EDUCATION; GRANTS TO STATE EDUCATION AGENCIES
Subpart A--Planning Grants for State Education Agencies
SEC. 3621. APPLICATION FOR GRANT.
(a) In General.--Any State educational agency that wishes to
receive a planning grant under this subpart shall submit an application
to the Secretary of Health and Human Services, at such time and in such
manner as the Secretary may require.
(b) Application; Joint Development; Contents.--An application under
subsection (a) shall be jointly developed by the State educational
agency and the State health agencies of the State involved, and shall
contain the following:
(1) An assessment of the State's need for comprehensive
school health education, using goals established by the
Department of Health and Human Services and the Department of
Education and the State's school improvement plan, if any,
under title III of Goals 2000: Educate America Act.
(2) A description of how the State educational agency will
collaborate with the State health agency in the planning and
development of a comprehensive school health education program
in the State, including coordination of existing health
education programs and resources.
(3) A plan to build capacity at the State and local levels
to provide staff development and technical assistance to local
educational agency and local health agency personnel involved
with comprehensive school health education.
(4) A preliminary plan for evaluating comprehensive school
health education activities.
(5) Information demonstrating that the State has
established a State-level advisory council whose membership
includes representatives of the State agencies with principal
responsibilities for programs regarding health, education, and
mental health.
(6) A timetable and proposed budget for the planning
process.
(7) Such other information and assurances as the Secretary
may require.
(c) Number of Grants.--States may receive one planning grant
annually and no more than two planning grants may be awarded to any one
State.
SEC. 3622. APPROVAL OF SECRETARY.
The Secretary may approve the application of a State under section
3621 if the Secretary determines that--
(1) the application meets the requirements of this subpart;
and
(2) there is a substantial likelihood that the State will
be able to develop and implement a comprehensive school health
education plan that complies with the requirements of subpart
B.
SEC. 3623. AMOUNT OF GRANT.
For any fiscal year, the minimum grant to any State under this
subpart is an amount determined by the Secretary to be necessary to
enable the State to conduct the planning process, and the maximum such
grant is $500,000.
SEC. 3624. AUTHORIZED ACTIVITIES.
A State may use funds received under this subpart only for the
following:
(1) To establish and carry out the State planning process.
(2) To conduct Statewide or sub-State regional coordination
and collaboration activities for local educational agencies,
local health agencies, and other agencies and organizations, as
appropriate.
(3) To conduct activities to build capacity to provide
staff development and technical assistance services to local
educational agency and local health agency personnel involved
with comprehensive school health education.
(4) To develop student learning objectives and assessment
instruments.
(5) To work with State and local health agencies and State
and local educational agencies to reduce barriers to the
implementation of comprehensive school health education
programs in schools.
(6) To prepare the plan required to receive an
implementation grant under subpart B.
(7) To adopt, validate, and disseminate curriculum models
and program strategies, if the Secretary determines that such
activities are necessary to achieving the objectives of the
State's program.
Subpart B--Implementation Grants for State Education Agencies
SEC. 3631. APPLICATION FOR GRANT.
(a) In General.--Any State that wishes to receive an implementation
grant under this subpart shall submit an application to the Secretary
of Health and Human Services, at such time, in such manner, and
containing such information and assurances as the Secretary may
require.
(b) Application and State Plan; Joint Development; Contents.--An
application under subsection (a) shall be jointly developed by the
State educational agency and the State health agencies of the State
involved, and shall include a State plan for comprehensive school
health education programs (as defined in section 3602) that describes
the following:
(1) The State's goals and objectives for those programs.
(2) How the State will allocate funds to local educational
agencies in accordance with section 3634.
(3) How the State will coordinate programs under this
subpart with other local, State and Federal health education
programs.
(4) How comprehensive school health education programs will
be coordinated with other local, State and Federal education
programs, such as programs under title I of the Elementary and
Secondary Education Act of 1965, with the State's school
improvement plan, if any, under title III of the Goals 2000:
Educate America Act, and with any similar programs.
(5) How the State has worked with State and local education
agencies and with State and local health agencies to reduce
barriers to implementing comprehensive school health education
programs.
(6) How the State will monitor the implementation of such
programs by local educational agencies.
(7) How the State will build capacity for professional
development of health educators.
(8) How the State will provide staff development and
technical assistance to local educational agencies.
(9) The respective roles of the State educational agency,
local educational agencies, the State health agency, and the
local health agencies in developing and implementing such
school health education programs.
(10) How such school health education programs will be
tailored to the extent practicable to be culturally and
linguistically sensitive and responsive to the various needs of
the students served, including individuals with disabilities,
and individuals from disadvantaged backgrounds (including
racial and ethnic minorities).
(11) How the State will evaluate and report on the State's
progress toward attaining the goals and objectives described in
paragraph (1).
SEC. 3632. SELECTION OF GRANTEES.
(a) Selection of Grantees.--The Secretary shall establish criteria
for the competitive selection of grantees under this subpart.
(b) Opportunity for Planning Grant.--If the Secretary does not
approve a State's application under this subpart and determines that
the State could benefit from a planning grant under subpart A, the
Secretary shall inform the State of any planning grant funds that may
be available to it under subpart A, subject to section 3621(c).
SEC. 3633. AMOUNT OF GRANT.
(a) In General.--For any fiscal year, the minimum grant to any
State under this subpart is an amount determined by the Secretary to be
necessary to enable the State to conduct the implementation process.
(b) Criteria.--In determining the amount of any such grant, the
Secretary may consider such factors as the number of children enrolled
in schools in the State, the number of school-aged children living in
poverty in the State, and the scope and quality of the State's plan.
SEC. 3634. AUTHORIZED ACTIVITIES; LIMITATION ON ADMINISTRATIVE COSTS.
(a) Subgrants to Local Educational Agencies.--Each State that
receives funds under this subpart for any fiscal year shall retain not
more than 75 percent of those funds in the first year, 50 percent of
those funds in the second and third years, and 25 percent of those
funds in each succeeding year. Those funds not retained by the State
shall be used to make grants to local educational agencies in
accordance with section 3635.
(b) State-level Activities.--Each State shall use retained funds
for any fiscal year for the following purposes:
(1) To conduct Statewide or sub-State regional coordination
and collaboration activities.
(2) To adapt, validate, or disseminate program models or
strategies for comprehensive school health education.
(3) To build capacity to deliver staff development and
technical assistance services to local educational agencies,
and State and local health agencies.
(4) To promote program activities involving families and
coordinating program activities with community groups and
agencies.
(5) To evaluate and report to the Secretary on the progress
made toward attaining the goals and objectives described in
section 3621(b)(1).
(6) To conduct such other activities to achieve the
objectives of this subpart as the Secretary may by regulation
authorize.
(c) State Administration.--Of the amounts received by a State for a
fiscal year under this subpart and remaining after any grants to local
educational agencies made from such amounts, the State may use up to 10
percent for the costs of administering such amounts, including the
activities of the State advisory council and monitoring the performance
of local educational agencies.
SEC. 3635. SUBGRANTS TO LOCAL EDUCATIONAL AGENCIES.
(a) Application for Grant.--Any local educational agency that
wishes to receive a grant under this subpart shall submit an
application to the State, containing such information and assurances as
the State may require, including a description of the following:
(1) The local educational agency's goals and objectives for
comprehensive school health education programs.
(2) How the local educational agency will concentrate funds
in high-need schools and provide sufficient funds to targeted
schools to ensure the implementation of comprehensive programs.
(3) How the local educational agency will monitor the
implementation of these programs.
(4) How the local educational agency will ensure that
school health education programs are tailored to the extent
practicable to be culturally and linguistically sensitive and
responsive to the various needs of the students served,
including individuals with disabilities, and individuals from
disadvantaged backgrounds (including racial and ethnic
minorities).
(5) How the local educational agency, in consultation with
the local health agency, will evaluate and report on its
progress toward attaining the goals and objectives described in
paragraph (1).
(b) Selection of Subgrantees.--Each State shall give priority to
applications from local educational agencies serving areas with high
needs, as indicated by criteria developed by the State, which shall
include, but need not be limited to, high rates of any of the
following:
(1) Poverty among school-aged youth.
(2) Births to adolescents.
(3) Sexually transmitted diseases among school-aged youth.
(4) Drug and alcohol use among school-aged youth.
(5) Violence among school-aged youth.
(c) Authorized Activities.--Each local educational agency that
receives a grant under this subpart shall use the grant funds to
implement comprehensive school health education programs, as defined in
section 3602.
Subpart C--State and Local Reports
SEC. 3641. STATE AND LOCAL REPORTS.
(a) State Reports.--Each State that receives a grant under this
part shall collect and submit to the Secretary such data and other
information on State and local programs as the Secretary may require.
(b) In General.-- Each local educational agency that receives a
grant under subpart B shall collect and report to the State such data
and other information as the Secretary may require.
PART 4--SCHOOL HEALTH EDUCATION; GRANTS TO CERTAIN LOCAL EDUCATIONAL
AGENCIES
Subpart A--Eligibility
SEC. 3651. SUBSTANTIAL NEED OF AREA SERVED BY AGENCY.
Any local educational agency is eligible for a grant under this
part for any fiscal year if--
(1) the agency enrolls at least 25,000 students; and
(2) the geographic area served by the agency has a
substantial need for such a grant, relative to other geographic
areas in the United States.
Subpart B--Planning Grants for Local Education Agencies
SEC. 3661. APPLICATION FOR GRANT.
(a) In General.--Any local educational agency that wishes to
receive a planning grant under this subpart shall submit an application
to the Secretary of Health and Human Services at such time and in such
manner as the Secretary may require.
(b) State Educational Agency Review.--Each such local educational
agency, before submitting its application to the Secretary, shall
submit the application to the State educational agency for comment by
such agency and by the State health agencies of the State.
(c) Contents of Applications.--Each such application shall contain
the following:
(1) An assessment of the local educational agency's need
for comprehensive school health education, using goals
established by the Department of Health and Human Services and
the Department of Education, as well as local health and
education strategies, such as State school improvement plans,
if any, under title III of the Goals 2000: Educate America Act.
(2) Information demonstrating that the local educational
agency has established or selected a community-level advisory
council, which shall include representatives of relevant
community agencies such as those that administer education,
child nutrition, health, and mental health programs.
(3) A description of how the local educational agency will
collaborate with the State educational agency, the State health
agency, and the local health agency in the planning and
development of a comprehensive school health education program
in the local educational agency, including coordination of
existing health education programs and resources.
(4) A plan to build capacity at the local educational
agency to provide staff development and technical assistance to
local educational agency and local health agency personnel
involved with comprehensive school health education.
(5) A preliminary plan for evaluating comprehensive school
health education activities.
(6) A timetable and proposed budget for the planning
process.
(7) Such other information and assurances as the Secretary
may require.
(d) Number of Grants.--Local educational agencies may receive at a
maximum two annual planning grants.
SEC. 3662. SELECTION OF GRANTEES.
(a) Selection Criteria.--The Secretary shall establish criteria for
the competitive selection of grantees under this part.
(b) Limitation.--The Secretary shall not approve an application
from a local educational agency in a State that has an approved plan
under subpart A or B of part 3 of this subtitle unless the Secretary
determines, after consultation with the State that the local
application is consistent with the State plan, if one exists.
SEC. 3663. AMOUNT OF GRANT.
For any fiscal year, the minimum grant to any local educational
agency under this subpart is an amount determined by the Secretary to
be necessary to enable the local educational agency to conduct the
planning process, and the maximum such grant is $500,000.
SEC. 3664. AUTHORIZED ACTIVITIES.
A local educational agency may use funds received under this
subpart only for the following:
(1) To establish and carry out the local educational agency
planning process.
(2) To undertake joint training, staffing, administration,
and other coordination and collaboration activities for local
educational agencies, local health agencies, and other agencies
and organizations, as appropriate.
(3) To conduct activities to build capacity to provide
staff development and technical assistance services to local
educational agency and local health agency personnel involved
with comprehensive school health education.
(4) To develop student learning objectives and assessment
instruments.
(5) To work with State and local health agencies and State
educational agencies to reduce barriers to the implementation
of comprehensive school health education programs in schools,
by, for example, ensuring that adequate time is a available
during the school day for such programs.
(6) To prepare the plan required to receive an
implementation grant under subpart C.
Subpart C--Implementation Grants for Local Educational Agencies
SEC. 3671. APPLICATION FOR GRANT.
(a) In General.--Any local educational agency that wishes to
receive an implementation grant under this subpart shall submit an
application to the Secretary of Health and Human Services, at such
time, in such manner, and containing such information and assurances as
the Secretary may require.
(b) State Educational Agency Review.--Each such local educational
agency shall submit its application to the State educational agency for
comment before submitting it to the Secretary.
(c) Local Educational Agency Plan.--Each such application shall
include a local educational agency plan for comprehensive school health
education programs (as defined in section 3602) that describes the
following:
(1) The local educational agency's goals and objectives for
those programs.
(2) How the local educational agency will coordinate
programs under this subpart with other local, State and Federal
health education programs.
(3) How comprehensive school health education programs will
be coordinated with other local, State and Federal education
programs, such as programs under title I of the Elementary and
Secondary Education Act of 1965, and with State's school
improvement plan, if any, under title III of the Goals 2000:
Educate America Act.
(4) How the local educational agency has worked with State
educational agencies and with State and local health agencies
to reduce barriers to implementing comprehensive school health
education programs.
(5) How local educational agencies will monitor the
implementation of such programs.
(6) How the local educational agency, in consultation with
the State educational agency and State and local health
agencies and in conjunction with other local professional
development activities, will build capacity for professional
development of health educators.
(7) How the local educational agency, in consultation with
the State educational agency and State and local health
agencies, will provide staff development and technical
assistance.
(8) The respective roles of the State educational agency,
local educational agencies, the State health agency, and the
local health agencies in developing and implementing such
school health education programs.
(9) How such school health education programs will be
tailored to the extent practicable to be culturally and
linguistically sensitive and responsive to the various needs of
the students served, including individuals with disabilities,
and individuals from disadvantaged backgrounds (including
racial and ethnic minorities).
(10) How the local educational agency, in consultation with
the local health agency, will evaluate and report on the local
educational agency's progress toward attaining the goals and
objectives described in paragraph (1).
SEC. 3672. SELECTION OF GRANTEES.
(a) Selection of Grantees.--The Secretary shall establish criteria
for the competitive selection of grantees under this subpart.
(b) Limitation.--The Secretary shall not approve an application
from a local educational agency in a State that has an approved plan
under subpart A or B of part 3 unless the Secretary determines, after
consultation with the State that the local application is consistent
with such State plan.
(c) Opportunity for Planning Grant.--If the Secretary does not
approve a local educational agency's application under this subpart and
determines that the local educational agency could benefit from a
planning grant under subpart B, the Secretary shall inform the local
educational agency of any planning grant funds that may be available to
it under subpart B, subject to section 3661(d).
SEC. 3673. AMOUNT OF GRANT.
(a) In General.--For any fiscal year, the minimum grant to any
local educational agency under this subpart is an amount determined by
the Secretary to be necessary to enable the local educational agency to
conduct the implementation process.
(b) Criteria.--In determining the amount of any such grant, the
Secretary may consider such factors as the number of children enrolled
in schools in the local educational agency, the number of school-aged
children living in poverty in the local educational agency, and the
scope and quality of the local educational agency's plan.
SEC. 3674. AUTHORIZED ACTIVITIES.
Each local educational agency that receives a grant under this
subpart shall use the grant funds as follows:
(1) To implement comprehensive school health education
programs, as defined in section 3602.
(2) To conduct local or regional coordination and
collaboration activities.
(3) To provide staff development and technical assistance
to schools, local health agencies, and other community agencies
involved in providing comprehensive school health education
programs.
(4) To administer the program and monitor program
implementation at the local level.
(5) To evaluate and report to the Secretary on the local
educational agency's progress toward attaining the goals and
objectives described in section 3671(c)(1).
(6) To conduct such other activities as the Secretary may
by regulation authorize.
SEC. 3675. REPORTS.
Each local educational agency that receives a grant under this
subpart shall collect and report to the Secretary and the State such
data and other information as the Secretary may require.
PART 5--SCHOOL-RELATED HEALTH SERVICES
Subpart A--Development and Operation of Projects
SEC. 3681. AUTHORIZATIONS OF APPROPRIATIONS.
(a) Funding for School-Related Health Services.--For the purpose of
carrying out this subpart, there are authorized to be appropriated
$100,000,000 for fiscal year 1996, $275,000,000 for fiscal year 1997,
$350,000,000 for fiscal year 1998, and $400,000,000 for each of the
fiscal years 1999 and 2000.
(b) Relation to Other Funds.--The authorizations of appropriations
established in subsection (a) are in addition to any other
authorizations of appropriations that are available for the purpose
described in such subsection.
SEC. 3682. ELIGIBILITY FOR DEVELOPMENT AND OPERATION GRANTS.
(a) In General.--Entities eligible to apply for and receive grants
under section 3484 or 3485 are the following:
(1) State health agencies that apply on behalf of local
community partnerships and other communities in need of
adolescent health services within the State.
(2) Local community partnerships in States in which health
agencies have not applied.
(b) Local Community Partnerships.--
(1) In general.--A local community partnership under
subsection (a)(2) is an entity that, at a minimum, includes--
(A) a local health care provider with experience in
delivering services to adolescents;
(B) one or more local public schools; and
(C) at least one community based organization
located in the community to be served that has a
history of providing services to at-risk youth in the
community.
(2) Participation.--A partnership described in paragraph
(1) shall, to the maximum extent feasible, involve broad based
community participation from parents and youth to be served,
health and social service providers (including regional
alliance health plans and corporate alliance health plans in
which families in the community are enrolled), teachers and
other public school and school board personnel, the regional
health alliance in which the schools participating in the
partnership are located, youth development and service
organizations, and interested business leaders. Such
participation may be evidenced through an expanded partnership,
or an advisory board to such partnership.
SEC. 3683. PREFERENCES.
(a) In General.--In making grants under sections 3484 and 3485, the
Secretary shall give preference to applicants whose communities to be
served show the most substantial level of need for such services among
individuals who are between the ages of 10 and 19 (inclusive), as
measured by indicators of community health including the following:
(1) High levels of poverty.
(2) The presence of a medically underserved area or
population (as defined under section 330(a) of the Public
Health Service Act).
(3) A health professional shortage area, as designated
under section 332 of the Public Health Service Act.
(4) High rates of indicators of health risk among children
and youth, including a high proportion of children receiving
services through the Individuals with Disabilities Education
Act, adolescent pregnancy, sexually transmitted disease
(including infection with the human immunodeficiency virus),
preventable disease, communicable disease, intentional and
unintentional injuries among children and youth, community and
gang violence, youth unemployment, juvenile justice
involvement, and high rates of drug and alcohol exposure.
(b) Linkage to Qualified Community Health Groups.--In making grants
under sections 3484 and 3485, the Secretary shall give preference to
applicants that demonstrate a linkage to qualified community health
groups (as defined in section 3421(a)).
SEC. 3684. GRANTS FOR DEVELOPMENT OF PROJECTS.
(a) In General.--The Secretary may make grants to State health
agencies or to local community partnerships to develop school health
service sites.
(b) Use of Funds.--A project for which a grant may be made under
subsection (a) may include but not be limited to the cost of the
following:
(1) Planning for the provision of school health services.
(2) Recruitment, compensation, and training of health and
administrative staff.
(3) The development of agreements with regional and
corporate alliance health plans and the acquisition and
development of equipment and information services necessary to
support information exchange between school health service
sites and health plans, health providers, and other entities
authorized to collect information under this Act.
(4) In the case of communities described in subsection
(d)(2)(B), funds to aid in the establishment of local community
partnerships.
(5) Other activities necessary to assume operational
status.
(c) Application for Grant.--
(1) In general.--Applicants shall submit applications in a
form and manner prescribed by the Secretary.
(2) Applications by state health agencies.--
(A) In the case of applicants that are State health
agencies, the application shall contain assurances that
the State health agency is applying for funds--
(i) on behalf of at least one local
community partnership; and
(ii) on behalf of at least one other
community identified by the State as in need of
the services funded under this part but without
a local community partnership.
(B) In the case of communities identified in
applications submitted by State health agencies that do
not yet have local community partnerships, the State
shall describe the steps that will be taken to aid the
community in developing a local community partnership.
(C) A State applying on behalf of local community
partnerships and other communities may retain not more
than 10 percent of grants awarded under this subpart
for administrative costs.
(d) Contents of Application.--In order to receive a grant under
this section, an applicant must include in the application the
following information:
(1) An assessment of the need for school health services in
the communities to be served, using the latest available health
data and health goals and objectives established by the
Secretary.
(2) A description of how the applicant will design the
proposed school health services to reach the maximum number of
school-aged children and youth at risk for poor health outcome.
(3) An explanation of how the applicant will integrate its
services with those of other health and social service programs
within the community.
(4) An explanation of how the applicant will link its
activities to the regional and corporate alliance health plans
serving the communities in which the applicant's program is to
be located.
(5) A description of linkages with regional and corporate
health alliances in whose areas the applicant's program is to
be located.
(6) A description of a quality assurance program which
complies with standards that the Secretary may prescribe.
(e) Number of Grants.--Not more than one planning grant may be made
to a single applicant. A planning grant may not exceed two years in
duration.
SEC. 3685. GRANTS FOR OPERATION OF PROJECTS.
(a) In General.--The Secretary may make grants to State health
agencies or to local community partnerships for the cost of operating
school health service sites.
(b) Use of Grant.--The costs for which a grant may be made under
this section include but are not limited to the following:
(1) The cost of furnishing health services that are not
covered under title I of this Act or by any other public or
private insurer.
(2) The cost of furnishing enabling services, as defined in
section 3461(g).
(3) Training, recruitment and compensation of health
professionals and other staff.
(4) Outreach services to at-risk youth and to parents.
(5) Linkage of individuals to health plans, community
health services and social services.
(6) Other activities deemed necessary by the Secretary.
(c) Application for Grant.--Applicants shall submit applications in
a form and manner prescribed by the Secretary. In order to receive a
grant under this section, an applicant must include in the application
the following information:
(1) A description of the services to be furnished by the
applicant.
(2) The amounts and sources of funding that the applicant
will expend, including estimates of the amount of payments the
applicant will received from alliance health plans and from
other sources.
(3) Such other information as the Secretary determines to
be appropriate.
(d) Additional Contents of Application.--In order to receive a
grant under this section, an applicant must meet the following
conditions:
(1) The applicant furnishes the following services:
(A) Diagnosis and treatment of simple illnesses and
minor injuries.
(B) Preventive health services, including health
screenings.
(C) Enabling services, as defined in section
3461(g).
(D) Referrals and followups in situations involving
illness or injury.
(E) Health and social services, counseling
services, and necessary referrals, including referrals
regarding mental health and substance abuse.
(F) Such other services as the Secretary determines
to be appropriate.
(2) The applicant maintains agreements with all regional
and corporate alliance health plans offering services in the
applicant's service area.
(3) The applicant is a participating provider in the
State's program for medical assistance under title XIX of the
Social Security Act.
(4) The applicant does not impose charges on students or
their families for services (including collection of any cost-
sharing for services under the comprehensive benefit package
that otherwise would be required).
(5) The applicant has reviewed and will periodically review
the needs of the population served by the applicant in order to
ensure that its services are accessible to the maximum number
of school age children and youth in the area, and that, to the
maximum extent possible, barriers to access to services of the
applicant are removed (including barriers resulting from the
area's physical characteristics, its economic, social and
cultural grouping, the health care utilization patterns of
children and youth, and available transportation).
(6) In the case of an applicant which serves a population
that includes a substantial proportion of individuals of
limited English speaking ability, the applicant has developed a
plan to meet the needs of such population to the extent
practicable in the language and cultural context most
appropriate to such individuals.
(7) The applicant will provide non-Federal contributions
toward the cost of the project in an amount determined by the
Secretary.
(8) The applicant will operate a quality assurance program
consistent with section 3684(e)(6).
(e) Duration of Grant.--A grant under this section shall be for a
period determined by the Secretary.
(f) Reports.--A recipient of funding under this section shall
provide such reports and information as are required in regulations of
the Secretary.
SEC. 3686. FEDERAL ADMINISTRATIVE COSTS.
Of the amounts made available under section 3681, the Secretary may
reserve not more than 5 percent for administrative expenses regarding
this subpart.
Subpart B--Capital Costs of Developing Projects
SEC. 3691. LOANS AND LOAN GUARANTEES REGARDING PROJECTS.
(a) In General.--The Secretary may make loans to, and guarantee the
payment of principal and interest to Federal and non-Federal lenders on
behalf of, State health agencies and local community partnerships for
the capital costs of developing projects in accordance with subpart A.
(b) Applicability of Certain Provisions.--The provisions of subpart
A apply to loans and loan guarantees under subsection (a) to the same
extent and in the same manner as such provisions apply to grants under
subpart A. Except for any provision inconsistent with the purpose
described in subsection (a), the provisions of subpart C of part 2 of
subtitle E apply to loans and loan guarantees under subsection (a) to
the same extent and in the same manner as such provisions apply to
loans and loan guarantees under section 3441.
SEC. 3692. FUNDING.
Amounts available to the Secretary under section 3412 for the
purpose of carrying out subparts B and C of part 2 of subtitle E are,
in addition to such purpose, available to the Secretary for the purpose
of carrying out this subpart.
Title III, Subtitle H
Subtitle H--Public Health Service Initiative
SEC. 3701. PUBLIC HEALTH SERVICE INITIATIVE.
(a) In General.--There is established pursuant to this title a
Public Health Service Initiative consisting of the total amounts
authorized and described in subsection (b). The Initiative includes the
programs of subtitles C through G of this title and the programs of
subtitle D of title VIII.
(b) Total of the Amounts Authorized to be Appropriated.--The
following is the total of the amounts authorized to be appropriated for
the Initiative under the previous subtitles of this title:
(1) For fiscal year 1995, $1,125,000,000.
(2) For fiscal year 1996, $2,984,000,000.
(3) For fiscal year 1997, $3,830,000,000.
(4) For fiscal year 1998, $4,205,000,000.
(5) For fiscal year 1999, $4,055,000,000.
(6) For fiscal year 2000, $3,666,000,000.
(c) Use of Amounts; Availability.--
(1) Use; annual appropriations.--Amounts appropriated to
carry out the Initiative, including subtitles A through F of
this title, are available to carry out the specific programs
for which the amounts are appropriated.
(2) Availability of appropriated amounts.--Amounts
appropriated for programs in the Initiative are available until
expended.
Title III, Subtitle I
Subtitle I--Coordination With COBRA Continuation Coverage
SEC. 3801. PUBLIC HEALTH SERVICE ACT; COORDINATION WITH COBRA
CONTINUATION COVERAGE.
(a) Period of Coverage.--Subparagraph (D) of section 2202(2) of the
Public Health Service Act (42 U.S.C. 300bb-2(2)) is amended--
(1) by striking ``or'' at the end of clause (i), by
striking the period at the end of clause (ii) and inserting ``,
or'', and by adding at the end the following new clause:
``(iii) eligible for comprehensive health
coverage described in section 1101 of the
Health Security Act.'', and
(2) by striking ``or medicare entitlement'' in the heading
and inserting ``, medicare entitlement, or health security act
eligibility''.
(b) Qualified Beneficiary.--Section 2208(3) of such Act (42 U.S.C.
300bb-8(3)) is amended by adding at the end the following new
subparagraph:
``(C) Special rule for individuals covered by
health security act.--The term `qualified beneficiary'
shall not include any individual who, upon termination
of coverage under a group health plan, is eligible for
comprehensive health coverage described in section 1101
of the Health Security Act.''.
(c) Repeal Upon Implementation of Health Security Act.--
(1) In general.--Title XXII of such Act (42 U.S.C. 300bb-1
et seq.) is hereby repealed.
(2) Conforming amendment.--The table of contents of such
Act is amended by striking the item relating to title XXII.
(3) Effective date.--The amendments made by this subsection
shall take effect on the earlier of--
(A) January 1, 1998, or
(B) the first day of the first calendar year
following the calendar year in which all States have in
effect plans under which individuals are eligible for
comprehensive health coverage described in section 1101
of this Act.
Title IV
TITLE IV--MEDICARE AND MEDICAID
table of contents of title
Page
Sec. 4000. References in title.............................. 673
Subtitle A--Medicare and the Alliance System
Part 1--Enrollment of Medicare Beneficiaries in Regional Alliance Plans
Sec. 4001. Optional State integration of medicare 674
beneficiaries into regional
alliance plans.
Sec. 4002. Individual election to remain in certain health 681
plans.
Sec. 4003. Payments to regional alliances on behalf of 684
certain medicare-eligible
individuals.
Sec. 4004. Prohibiting employers from taking into account 685
status as medicare beneficiary
on any grounds.
Part 2--Encouraging Managed Care Under Medicare Program; Coordination
With Medigap Plans
Sec. 4011. Enrollment and termination of enrollment......... 689
Sec. 4012. Uniform informational materials.................. 692
Sec. 4013. Outlier payments................................. 693
Sec. 4014. Point of service option.......................... 695
Part 3--Medicare Coverage Expansions
Sec. 4021. Reference to coverage of outpatient prescription 702
drugs.
Sec. 4022. Expanded coverage for physician assistants, nurse 702
practitioners, and clinical
nurse specialists.
Part 4--Coordination With Administrative Simplification and Quality
Management Initiatives
Sec. 4031. Repeal of separate medicare peer review program.. 703
Sec. 4032. Mandatory assignment for all part B services..... 704
Sec. 4033. Elimination of complexities caused by dual 705
funding sources and rules for
payment of claims.
Sec. 4034. Repeal of pro precertification requirement for 706
certain surgical procedures.
Sec. 4035. Requirements for changes in billing procedures... 708
Part 5--Amendments to Anti-fraud and Abuse Provisions
Sec. 4041. Anti-kickback provisions......................... 710
Sec. 4042. Revisions to limitations on physician self- 718
referral.
Sec. 4043. Civil monetary penalties......................... 730
Sec. 4044. Exclusions from program participation............ 738
Sec. 4045. Sanctions against practitioners and persons for 745
failure to comply with statutory
obligations relating to quality
of care.
Sec. 4046. Effective date................................... 746
Part 6--Funding of Graduate Medical Education and Academic Health
Centers
Sec. 4051. Transfers from medicare trust funds for graduate 746
medical education.
Sec. 4052. Transfers from Hospital Insurance Trust Fund for 748
academic health centers.
Part 7--Coverage of Services Provided by Facilities and Plans of
Departments of Defense and Veterans Affairs
Sec. 4061. Treatment of uniformed services health plan as 749
eligible organization under
medicare.
Sec. 4062. Coverage of services provided to medicare 750
beneficiaries by plans and
facilities of Department of
Veterans Affairs.
Sec. 4063. Conforming amendments............................ 752
Subtitle B--Savings in Medicare Program
Part 1--Savings Relating to Part A
Sec. 4101. Reduction in update for inpatient hospital 752
services.
Sec. 4102. Reduction in adjustment for indirect medical 753
education.
Sec. 4103. Reduction in payments for capital-related costs 754
for inpatient hospital services.
Sec. 4104. Revisions to payment adjustments for 757
disproportionate share hospitals
in participating States.
Sec. 4105. Moratorium on designation of additional long-term 761
care hospitals.
Sec. 4106. Extension of freeze on updates to routine service 761
costs of skilled nursing
facilities.
Part 2--Savings Relating to Part B
Sec. 4111. Establishment of cumulative expenditure goals for 762
physician services.
Sec. 4112. Use of real GDP to adjust for volume and 767
intensity; repeal of restriction
on maximum reduction permitted
in default update.
Sec. 4113. Reduction in conversion factor for physician fee 768
schedule for 1995.
Sec. 4114. Limitations on payment for physicians' services 769
furnished by high-cost hospital
medical staffs.
Sec. 4115. Medicare incentives for physicians to provide 780
primary care.
Sec. 4116. Elimination of formula-driven overpayments for 785
certain outpatient hospital
services.
Sec. 4117. Imposition of coinsurance on laboratory services. 786
Sec. 4118. Application of competitive acquisition process 787
for part B items and services.
Sec. 4119. Application of competitive acquisition procedures 791
for laboratory services.
Part 3--Savings Relating to Parts A and B
Sec. 4131. Medicare secondary payer changes................. 792
Sec. 4132. Payment limits for HMOs and CMPs with risk- 793
sharing contracts.
Sec. 4133. Reduction in routine cost limits for home health 800
services.
Sec. 4134. Imposition of copayment for certain home health 801
visits.
Sec. 4135. Expansion of centers of excellence............... 804
Part 4--Part B Premium
Sec. 4141. General part B premium...........................
Part 5--Report on Medicare Savings for Fiscal Years 2000 Through 2003
Sec. 4151. Report on savings................................ 806
Subtitle C--Medicaid
Part 1--Comprehensive Benefit Package
Sec. 4201. Limiting coverage under medicaid of items and 807
services covered under
comprehensive benefit package.
Part 2--Expanding Eligibility for Nursing Facility Services; Long-term
Care Integration Option
Sec. 4211. Spenddown eligibility for nursing facility 809
residents.
Sec. 4212. Increased income and resource disregards for 811
nursing facility residents.
Sec. 4213. Informing nursing home residents about 813
availability of assistance for
home and community-based
services.
Part 3--Other Benefits
Sec. 4221. Treatment of items and services not covered under 814
the comprehensive benefit
package.
Sec. 4222. Establishment of program for poverty-level 818
children with special needs.
Part 4--Discontinuation of Certain Payment Policies
Sec. 4231. Discontinuation of medicaid DSH payments......... 825
Sec. 4232. Discontinuation of reimbursement standards for 827
inpatient hospital services.
Part 5--Coordination With Administrative Simplification and Quality
Management Initiatives
Sec. 4241. Requirements for changes in billing procedures... 828
Part 6--Medicaid Commission
Sec. 4251. Medicaid Commission.............................. 829
Subtitle D--Increase in SSI Personal Needs Allowance
Sec. 4301. Increase in SSI personal needs allowance......... 832
Title IV
TITLE IV--MEDICARE AND MEDICAID
SEC. 4000. REFERENCES IN TITLE.
(a) Amendments to Social Security Act.--Except as otherwise
specifically provided, whenever in this title an amendment is expressed
in terms of an amendment to or repeal of a section or other provision,
the reference shall be considered to be made to that section or other
provision of the Social Security Act.
(b) References to OBRA.--In this title, the terms ``OBRA-1986'',
``OBRA-1987'', ``OBRA-1989'', ``OBRA-1990'', and ``OBRA-1993'' refer to
the Omnibus Budget Reconciliation Act of 1986 (Public Law 99-509), the
Omnibus Budget Reconciliation Act of 1987 (Public Law 100-203), the
Omnibus Budget Reconciliation Act of 1989 (Public Law 101-239), the
Omnibus Budget Reconciliation Act of 1990 (Public Law 101-508), and the
Omnibus Budget Reconciliation Act of 1993 (Public Law 103-66),
respectively.
Subtitle A--Medicare and the Alliance System
PART 1--ENROLLMENT OF MEDICARE BENEFICIARIES IN REGIONAL ALLIANCE PLANS
SEC. 4001. OPTIONAL STATE INTEGRATION OF MEDICARE BENEFICIARIES INTO
REGIONAL ALLIANCE PLANS.
Title IV, Subtitle A
Title XVIII is amended by adding at the end the following:
``integration of medicare into state health security programs
``Sec. 1893. (a) Payment to States.--The Secretary shall pay a
participating State that has submitted an application, as specified by
subsection (b) which the Secretary has approved under subsection (c),
the amount specified by subsection (d) for the period specified by
subsection (e) for covered medicare beneficiaries. This section shall
apply without regard to whether or not a State is a single-payer State.
``(b) Application by State.--An application submitted by a
participating State shall contain the following assurances:
``(1) Coverage of all medicare-eligible individuals.--The
State's application shall assure that the provisions of the
succeeding paragraphs of this subsection shall apply to all
medicare-eligible individuals who are residents of the
State.''.
``(2) Enrollment in and selection of health plans.--
``(A) Enrollment.--Each medicare-eligible
individual (within a class of medicare beneficiaries
covered under the application) who is a resident of the
State will be enrolled in a regional alliance health
plan serving the area in which the individual resides
(or, in the case of an individual who is a resident of
a single-payer State, in the Statewide single-payer
system operated under part 2 of subtitle C of title I
of the Health Security Act).
``(B) Selection.--Each such individual will have
the same choice among applicable health plans as other
individuals in the State who are eligible individuals
under the Health Security Act.
``(C) Offer of fee-for-service plan.--Each such
individual shall be offered enrollment in at least one
health plan that is a fee-for-service plan (or, in the
case of an individual who is a resident of a single-
payer State, the Statewide single-payer system under
part 2 of subtitle C of title I of the Health Security
Act) that meets the following requirements:
``(i) The plan's premium rate, and the
actuarial value of the plan's deductibles,
coinsurance, and copayments, charged to the
individual do not exceed the actuarial value of
the coinsurance and deductibles that would be
applicable on the average if this section did
not apply to those individuals.
``(ii) The plan's payment rates for covered
items and services are accepted as payment in
full for such items and services.
``(3) Coverage of full medicare benefits.--For each health
plan providing coverage under this section--
``(A) the plan shall cover at least the items and
services for which payment would otherwise be made
under this title (including payments under section
1862(b)(4)), and
``(B) coverage determinations under the plan are
made under rules that are no more restrictive than
otherwise applicable under this title.
``(4) Premium.--During the period for which payments are
made to a State under this section, the requirements of the
Health Security Act relating to premiums that are otherwise
applicable with respect to individuals enrolled in health plans
in a State shall not apply with respect to medicare-eligible
individuals in the State who are covered under the State's
application under this section. Nothing in the previous
sentence shall operate to permit a State or health plans in a
State to charge different premiums among medicare-eligible
individuals within the same premium class under the Health
Security Act.
``(5) Quality assurance.--For each health plan providing
coverage under this section there are quality assurance
mechanisms for covered medicare individuals that equal, or
exceed, such mechanisms otherwise applicable under this title.
``(6) Review rights.--Covered medicare individuals have
review, reconsideration, and appeal rights (including appeals
to courts of the State) that equal or exceed such rights
otherwise applicable under this title.
``(7) Data reporting and access to documents.--The State
will--
``(A) provide such utilization and statistical data
as the Secretary determines are needed for purposes of
the programs established under this title, and
``(B) the State will ensure access by the Secretary
or the Comptroller General to relevant documents.
``(8) Use of payments.--Payments made to the State under
subsection (a) will be used only to carry out the purposes of
this section.
``(c) Approval by Secretary.--The Secretary shall approve an
application under subsection (b) if the Secretary finds--
``(1) that the individuals covered under the State's
application shall receive at least the benefits provided under
this title (including cost sharing);
``(2) that the amount of expenditures that will be made
under this title will not exceed the amount of expenditures
that will be made if the State's application is not accepted;
and
``(3) that the State is able and willing to carry out the
assurances provided in its application.
``(d) Amount and Source of Payment.--
``(1) Amount of payment.--For purposes of subsection (a),
the amount of payments to a State--
``(A) for the first year for which payments are
made to the State under this section shall be
determined by the applicable rate specified in section
1876(a)(1)(C) (but at 100 percent, rather than 95
percent, of the applicable amount) for each medicare-
eligible individual who is a resident of the State (but
without regard to any reduction based on payments to be
made under section 1876(a)(1)(G)), and
``(B) for each succeeding year, shall be determined
by the applicable rate determined under subparagraph
(A) or this subparagraph for the preceding year for
each such individual, adjusted by the regional alliance
inflation factor applicable to regional alliances in
the State (as determined in accordance with section
6001(a) of the Health Security Act) for the year.
``(2) Source of payment.--Payment shall be made from the
Federal Hospital Insurance Trust Fund and the Federal
Supplementary Medical Insurance Trust Fund as provided under
paragraph (5) of section 1876(a) (other than as provided under
subparagraph (B) of that paragraph).
``(e) Period for Which Payment Made.--The period for which payment
may be made under subsection (a) to a State--
``(1) begins with January 1 of the first calendar year for
which the Secretary approves under subsection (c) the
application of the State; and
``(2) ends--
``(A) on December 31 of the year in which the State
notifies the Secretary (before April of that year) that
the State no longer intends to receive payments under
this section, or
``(B) if the Secretary finds that the State is no
longer in substantial compliance with the requirements
under paragraphs (2) or (3) of subsection (c), at the
time specified by the Secretary.
No termination is effective under paragraph (2) unless notice has been
provided to medicare covered individuals, health providers, and health
plans affected by the termination.
``(f) Payments Under this Section as Sole Medicare Benefits.--
Payments to a State under subsection (a) shall be instead of the
amounts that would otherwise be payable, pursuant to sections 1814(b)
and 1833(a), for services furnished to medicare-eligible residents of
the State covered under the application.
``(g) Evaluation.--The Secretary shall evaluate on an ongoing basis
the compliance of a State with the requirements of this section.
``(h) Definitions.--In this section the terms `applicable health
plan', `fee-for-service plan', `health plan', `medicare-eligible
individual', `participating State', `single-payer State', and
`Statewide single-payer system' have the meanings of those terms in the
Health Security Act.''.
SEC. 4002. INDIVIDUAL ELECTION TO REMAIN IN CERTAIN HEALTH PLANS.
(a) In General.--Section 1876 (42 U.S.C. 1395mm) is amended by
adding at the end the following new subsection:
``(k)(1) Notwithstanding any other provision of this section, each
eligible organization with a risk-sharing contract (or which is
eligible to enter into such a contract, as determined by the Secretary)
that is the sponsor of a health plan under subtitle E of title I of the
Health Security Act shall provide each individual who meets the
requirements of paragraph (2) with the opportunity to elect (by
submitting an application at such time and in such manner as specified
by the Secretary) to continue enrollment in such plan (for the same
benefits as alliance-eligible individuals) and to have payments made by
the Secretary to the plan on the individual's behalf in accordance with
paragraph (3). The premium imposed with respect to such an individual
by the plan shall be in an amount (determined in accordance with rules
of the Secretary and notwithstanding other provisions of such Act)
which reflects the difference between the premium otherwise established
(adjusted by a factor to reflect the actuarial difference between
medicare beneficiaries and other plan enrollees) and the amount payable
under paragraph (3).
``(2) An individual meets the requirements of this paragraph if the
individual is--
``(A) enrolled in the health plan of an eligible
organization in a month in which the individual is either not
entitled to benefits under part A, or is an eligible employee
(as defined in the Health Security Act) or the spouse or
dependent of an eligible employee,
``(B) entitled to benefits under part A and enrolled under
part B in the succeeding month,
``(C) an eligible individual under the Health Security Act
in that succeeding month, and
``(D) not an eligible employee (as defined in the Health
Security Act) or the spouse or dependent of an eligible
employee in that succeeding month.
``(3) The Secretary shall make a payment to an eligible
organization on behalf of each individual enrolled with the
organization for whom an election is in effect under this subsection in
an amount determined by the rate specified by subsection (a)(1)(C)
(notwithstanding the second sentence of paragraph (1)). Such payment
shall be made from the Federal Hospital Insurance Trust Fund and the
Federal Supplementary Medical Insurance Trust Fund as provided under
subsection (a)(5) (other than as provided under subparagraph (B) of
that paragraph).
``(4) The period for which payment may be made under paragraph
(3)--
``(A) begins with the first month for which the individual
meets the requirements of paragraph (2) (or a later month, in
the case of a late application, as may be specified by the
Secretary); and
``(B) ends with the earliest of--
``(i) the month following the month--
``(I) in which the individual notifies the
Secretary that the individual no longer wishes
to be enrolled in the health plan of the
eligible organization and to have payment made
on the individual's behalf under this
subsection; and
``(II) which is a month specified by the
Secretary as a uniform open enrollment period
under subsection (c)(3)(A)(i), or
``(ii) the month in which the individual ceases to
meet the requirements of paragraph (2).
``(5) Notwithstanding any other provision of this title, payments
to an eligible organization under this subsection on behalf of an
individual shall be the sole payments made with respect to items and
services furnished to the individual during the period for which the
individual's election under this subsection is in effect.''.
(b) Conforming Amendment.--Section 1838(b) (42 U.S.C. 1395q(b)) is
amended by inserting after ``section 1843(e)'' the following: ``,
1876(c)(3)(B), 1876(k)(4)(B), or 1890(j)(1)(B)(iv)''.
SEC. 4003. PAYMENTS TO REGIONAL ALLIANCES ON BEHALF OF CERTAIN
MEDICARE-ELIGIBLE INDIVIDUALS.
Title XVIII, as amended by section 4001, is further amended by
adding at the end the following new section:
``payments to regional alliances on behalf of certain medicare-eligible
individuals under health security act
``Sec. 1894. The Secretary shall provide for a transfer from the
Federal Hospital Insurance Trust Fund and the Federal Supplementary
Medical Insurance Trust Fund, in appropriate proportions, to each
regional alliance in each year of the amount of the reductions in
liability owed to the alliance in the year resulting from the
application of section 6115 of the Health Security Act. In the case of
an individual to whom such section applies, unless all the members of
the family would be medicare-eligible individuals (but for section
1012(a) of such Act), the reductions in liability under section 6115 of
such Act shall be based upon the alliance credit amount for an
individual class of enrollment (as defined in section 1011(c)(1)(A) of
such Act).''.
SEC. 4004. PROHIBITING EMPLOYERS FROM TAKING INTO ACCOUNT STATUS AS
MEDICARE BENEFICIARY ON ANY GROUNDS.
(a) Extension of Protections for Working Aged to Group Health Plans
of All Employers.--Section 1862(b)(1)(A) (42 U.S.C. 1395y(b)(1)(A)) is
amended by striking clauses (ii) and (iii).
(b) Extension of Protections for Disabled Individuals to All Group
Health Plans.--
(1) In general.--Section 1862(b)(1)(B) (42 U.S.C.
1395y(b)(1)(B)), as amended by section 13561(e) of OBRA-1993,
is amended--
(A) in clause (i), by striking ``large group health
plans (as defined in clause (iv))'' and inserting
``group health plan (as defined in subparagraph (A)(v),
taking into account the exceptions described in clauses
(ii) and (iii) of subparagraph (A))''; and
(B) by striking clause (iv).
(2) Conforming amendment.--Section 1862(b)(1)(A)(v) (42
U.S.C. 1395y(b)(1)(A)(v)) is amended by striking ``this
subparagraph, and subparagraph (C)'' and inserting ``this
paragraph''.
(c) Repeal of Limitation on Period of Protection for Individuals
With End Stage Renal Disease.--
(1) In general.--Section 1862(b)(1)(C) (42 U.S.C.
1395y(b)(1)(C)), as amended by section 13561(c) of OBRA-1993,
is amended--
(A) in clause (i), by striking ``an individual is
entitled'' and all that follows through ``such
benefits'' and inserting ``an individual (or a member
of the individual's family) who is covered under the
plan by virtue of the individual's current employment
status with an employer is entitled to benefits under
this title under section 226A'';
(B) in clause (ii), by striking the semicolon at
the end and inserting a period; and
(C) by striking the matter following clause (ii).
(2) Conforming amendment.--Section 1862(b)(1) is amended--
(A) in subparagraph (A), by striking clause (iv);
and
(B) in subparagraph (B), by striking clause (ii).
(d) No Primary Payment for Services Under a Health Plan.--Section
1862(b)(2)(A) (42 U.S.C. 1395y(b)(2)(A)(i)) is amended--
(1) by striking ``or'' at the end of clause (i);
(2) by striking the period at the end of clause (ii) and
inserting ``, or'';
(3) by inserting after clause (ii) the following new
clause:
``(iii) payment has been made, or can
reasonably be expected to be made, with respect
to the item or service under any health plan
under the Health Security Act.''; and
(4) in the second sentence--
(A) by striking ``and'' after ``applies'', and
(B) by inserting before the period at the end the
following: ``, and a health plan under the Health
Security Act to the extent that clause (iii) applies''.
(e) Simplification of Coordination of Benefits.--Section 1862(b)(4)
(42 U.S.C. 1395y(b)(4)) is amended by adding after and below
subparagraph (B) the following:
``Notwithstanding the previous sentence, where payment is made
for an item or service by a primary plan that is a health plan
(within the meaning of section 1400 of the Health Security Act)
and for which payment would be made under this title but for
this subsection, payment may be made under this title (without
regard to deductibles and coinsurance) in the amount of the
cost sharing imposed under such primary plan (consistent with
such Act).''.
(f) Effective Date.--The amendments made by this section shall
apply with respect to medicare-eligible individuals residing in a
participating State as of January 1 of the first year for which the
State is a participating State.
PART 2--ENCOURAGING MANAGED CARE UNDER MEDICARE PROGRAM; COORDINATION
WITH MEDIGAP PLANS
SEC. 4011. ENROLLMENT AND TERMINATION OF ENROLLMENT.
(a) Uniform Open Enrollment Periods.--
(1) For capitated plans.--The first sentence of section
1876(c)(3)(A)(i) (42 U.S.C. 1395mm(c)(3)(A)(i)) is amended by
inserting ``(which may be specified by the Secretary)'' after
``open enrollment period''.
(2) For medigap plans.--Section 1882(s) (42 U.S.C.
1395ss(s)) is amended--
(A) in paragraph (3), by striking ``paragraphs (1)
and (2)'' and inserting ``paragraph (1), (2), or (3)'',
(B) by redesignating paragraph (3) as paragraph
(4), and
(C) by inserting after paragraph (2) the following
new paragraph:
``(3) Each issuer of a medicare supplemental policy shall have an
open enrollment period (which shall be the period specified by the
Secretary under section 1876(c)(3)(A)(i)), of at least 30 days duration
every year, during which the issuer may not deny or condition the
issuance or effectiveness of a medicare supplemental policy, or
discriminate in the pricing of the policy, because of age, health
status, claims experience, receipt of health care, or medical
condition. The policy may not provide any time period applicable to
pre-existing conditions, waiting periods, elimination periods, and
probationary periods (except as provided by paragraph (2)(B)). The
Secretary may require enrollment through a third party designated under
section 1876(c)(3)(B).''.
(b) Enrollments for New Medicare Beneficiaries and Those Who
Move.--Section 1876(c)(3)(A) (42 U.S.C. 1395mm(c)(3)(A)) is amended--
(1) in clause (i), by striking ``clause (ii)'' and
inserting ``clauses (ii) through (iv)'', and
(2) by adding at the end the following:
``(iii) Each eligible organization shall have an open enrollment
period for each individual eligible to enroll under subsection (d)
during any enrollment period specified by section 1837 that applies to
that individual. Enrollment under this clause shall be effective as
specified by section 1838.
``(iv) Each eligible organization shall have an open enrollment
period for each individual eligible to enroll under subsection (d) who
has previously resided outside the geographic area which the
organization serves. The enrollment period shall begin with the
beginning of the month that precedes the month in which the individual
becomes a resident of that geographic area and shall end at the end of
the following month. Enrollment under this clause shall be effective as
of the first of the month following the month in which the individual
enrolls.''.
(c) Enrollment Through Third Party; Uniform Termination of
Enrollment.--The first sentence of section 1876(c)(3)(B) (42 U.S.C.
1395mm(c)(3)(B)) is amended--
(1) by inserting ``(including enrollment through a third
party)'' after ``regulations'', and
(2) by striking everything after ``with the eligible
organization'' and inserting ``during an annual period as
prescribed by the Secretary, and as specified by the Secretary
in the case of financial insolvency of the organization, if the
individual moves from the geographic area served by the
organization, or in other special circumstances that the
Secretary may prescribe.''.
(d) Effective Date.--The amendments made by the previous
subsections apply to enrollments and terminations of enrollments
occurring after 1995 (but only after the Secretary of Health and Human
Services has prescribed the relevant annual period), except that the
amendments made by subsection (a)(2) apply to enrollments for a
medicare supplemental policy made after 1995.
SEC. 4012. UNIFORM INFORMATIONAL MATERIALS.
(a) For Capitated Plans.--Section 1876(c)(3)(C) (42 U.S.C.
1395mm(c)(3)(C)) is amended by adding at the end the following: ``In
addition, the Secretary shall develop and distribute comparative
materials about all eligible organizations. Each eligible organization
shall reimburse the Secretary for its pro rata share (as determined by
the Secretary) of the costs incurred by the Secretary in carrying out
the requirements of the preceding sentence and other enrollment
activities.''.
(b) For Medigap Plans.--Paragraph (1) of section 1882(f) (42 U.S.C.
1395ss(f)) is amended to read as follows:
``(f)(1) The Secretary shall develop and distribute comparative
materials about all medicare supplemental policies issued in a State.
Each issuer of such a policy shall reimburse the Secretary for its pro
rata share (as determined by the Secretary for purposes of section
1876(c)(3)(C)) of the costs incurred by the Secretary in carrying out
the requirements of the preceding sentence and other enrollment
activities, or the issuer shall no longer be considered as meeting the
requirements of this section.''.
(c) Effective Date.--The amendments made by this section shall
apply with respect to materials for enrollment in years after 1995.
SEC. 4013. OUTLIER PAYMENTS.
(a) General Rule.--Section 1876(a)(1) (42 U.S.C. 1395mm(a)(1)) is
amended by adding at the end the following:
``(G)(i) In the case of an eligible organization with a risk-
sharing contract, the Secretary may make additional payments to the
organization equal to not more than 50 percent of the imputed
reasonable cost (or, if so requested by the organization, the
reasonable cost) above the threshold amount of services covered under
parts A and B and provided (or paid for) in a year by the organization
to any individual enrolled with the organization under this section.
``(ii) For purposes of clause (i), the `imputed reasonable cost' is
an amount determined by the Secretary on a national, regional, or other
basis that is related to the reasonable cost of services.
``(iii) For purposes of clause (i), the `threshold amount' is an
amount determined by the Secretary from time to time, adjusted by the
geographic factor utilized in determining payments to the organization
under subparagraph (C) and rounded to the nearest multiple of $100,
such that the total amount to be paid under this subparagraph for a
year is estimated to be 5 percent or less of the total amount to be
paid under risk-sharing contracts for services furnished for that year.
``(iv) An eligible organization shall submit a claim for additional
payments under subsection (i) within such time as the Secretary may
specify.
``(v) To the extent that total payments under clause (i) in a
year--
``(I) exceed the payment set aside as a result of the
reduction under subparagraph (C) for the year, the Secretary
shall increase the percentage reduction under such subparagraph
for the following year by such percentage as will result in an
increase in the reduction equal to such excess in previous
payments, or
``(II) are less than the payment set aside as a result of
the reduction under subparagraph (C) for the year, the amount
of such difference shall remain available in the succeeding
years for additional payments under this subparagraph and the
Secretary may take such difference into account in establishing
the percentage reduction under subparagraph (C) for the
following year.''.
(b) Conforming Amendment.--Section 1876(a)(1)(C)(i) (42 U.S.C.
1395mm(a)(1)(C)(i)), as amended by section 4132(a), is further amended
by inserting ``, and reduced by a uniform percentage (determined by the
Secretary for a year, subject to adjustment under subparagraph (G)(v))
so that the total reduction is estimated to equal the amount to be paid
under subparagraph (G)'' before the period.
(c) Effective Date.--The amendments made by the preceding
subsections apply to services furnished after 1994.
SEC. 4014. POINT OF SERVICE OPTION.
(a) Point of Service Contracts.--Part C of title XVIII is amended
by inserting after section 1889 the following:
``point of service option
``Sec. 1890. (a) Establishment of Program.--Not later than July 1,
1995, the Secretary shall promulgate regulations establishing a point-
of-service program under which individuals entitled to benefits under
this title (other than individuals enrolled with an eligible
organization with a risk-sharing contract under section 1876(g)) may
obtain such benefits through providers and suppliers who are members of
a point-of-service network established by the Secretary in accordance
with the criteria described in subsection (b).
``(b) Criteria for Networks.--In establishing criteria for point-
of-service networks under the program under this section, the Secretary
shall--
``(1) designate an appropriate geographic service area for
each such network to ensure that each network has a sufficient
number of participating members to provide items and services
under this title to beneficiaries, except that no such service
area may be served by more than one such network;
``(2) establish requirements for participating members;
``(3) establish a schedule of payments for services
furnished by networks, including a schedule of bundled payment
arrangements for selected medical and surgical procedures;
``(4) delineate permissible incentives to encourage
physicians and other suppliers to join the network, and to
encourage individuals to receive services under this title
through the network;
``(5) specify the rules under which carriers under section
1842 may administer the program;
``(6) establish procedures to used for the provision of
case management services and criteria for determining whether
(and under which circumstances) services which would otherwise
not be covered under this title would be covered by the network
under such case management;
``(7) establish standards for the processing and payment of
claims for payment for services furnished by the network,
including standards for the apportionment of payments among the
Trust Funds established under this title;
``(8) establish standards for the selection of physicians
for the network based on practice patterns and a demonstration
of effective quality assurance;
``(9) develop standards to ensure that the point-of-service
option does not result in a net financial loss to the medicare
program under this title after the implementation of the option
in an area, taking into account administrative costs, the costs
of services (which would otherwise not be covered under this
title) provided to beneficiaries under case management, and the
costs of incentives for physicians, other providers, and
beneficiaries; and
``(10) apply such other criteria as the Secretary considers
appropriate.
``(c) Bonus Payments Permitted.--
``(1) In general.--Notwithstanding any other provision of
this title, the Secretary may increase the amount of payment
otherwise provided under this title for items and services
furnished by individuals who are members of a point-of-service
network under this section by a bonus payment (in such amount
as the Secretary may determine).
``(2) Criteria for receiving payment.--The Secretary may
make a bonus payment under this subsection to members of a
point-of-service network if the Secretary determines that the
members of the network have reduced the costs to the medicare
program of the items and services furnished by the network
without adversely affecting the quality of care provided to
beneficiaries.''.
(b) Conforming Amendments.--
(1) Section 1812(a) (42 U.S.C. 1395d(a)) is amended--
(A) by striking ``and'' at the end of paragraph
(3),
(B) by substituting ``; and'' for the period at the
end of paragraph (4), and
(C) by adding at the end the following:
``(5) such additional items and services furnished by a
provider of services to an individual subject to case
management as may be specified under a point-of-service network
arrangement under section 1890.''.
(2)(A) Section 1814(b) (42 U.S.C. 1395f(b)) is amended--
(i) in paragraph (1), by inserting ``or (4)'' after
``paragraph (3)'',
(ii) by striking ``or'' at the end of paragraph
(2),
(iii) by substituting ``; and'' for the period at
the end of paragraph (3), and
(iv) by inserting after paragraph (3) the
following:
``(4) in the case of items and services furnished through a
point of service network (as described in section 1890), the
payment basis specified under the arrangement established for
such network, plus any bonus payments as determined under
subsection (c) of that section.''.
(B) The matter in section 1886(d)(1)(A) (42 U.S.C.
1395ww(d)(1)(A)) preceding clause (i) is amended by inserting
``(other than paragraph (4))'' after ``1814(b)''.
(3) Section 1832(a)(2) (42 U.S.C. 1395k(a)(2)) is amended--
(A) by striking ``and'' at the end of subparagraph
(I),
(B) by substituting ``; and'' for the period at the
end of subparagraph (J), and
(C) by adding at the end the following:
``(K) such additional items and services (other
than inpatient services furnished by providers of
services) as may be specified under a point-of-service
network arrangement under section 1890.''.
(4) Section 1833 (42 U.S.C. 1395l), as amended by section
4032, is amended by adding at the end the following new
subsection:
``(u) In the case of items and services furnished through a point
of service network (as described in section 1890), there shall be paid
(subject to subsection (b)) amounts equal to 80 percent of the payment
basis specified in an agreement entered into pursuant to that section,
plus any bonus payments as determined under subsection (c) of that
section.''.
(5) Section 1862(a) (42 U.S.C. 1395y(a)), as amended by
sections 4034(b)(4), 4118(b), and 2003(b), is further amended--
(A) in paragraph (7), by striking ``or under
paragraph (1)(F)'' and inserting ``, under paragraph
(1)(F), or under a contract under section 1890'',
(B) by striking ``or'' at the end of paragraph
(16),
(C) by striking the period at the end of paragraph
(17) and inserting ``; or'', and
(D) by inserting after paragraph (17) the following
new paragraph:
``(18) which are furnished to an individual and related to
a health condition with respect to which the individual is
subject to case management through a point-of-service network
under section 1890 but which are not included in the plan of
care developed for such individual and agreed to by the
individual and the case manager.''.
(c) Effective Date.--The amendments made by this subsection shall
take effect January 1, 1996.
PART 3--MEDICARE COVERAGE EXPANSIONS
SEC. 4021. REFERENCE TO COVERAGE OF OUTPATIENT PRESCRIPTION DRUGS.
For provisions adding a new outpatient prescription drug benefit to
the medicare program, see subtitle A of title II.
SEC. 4022. EXPANDED COVERAGE FOR PHYSICIAN ASSISTANTS, NURSE
PRACTITIONERS, AND CLINICAL NURSE SPECIALISTS.
(a) Physician Assistants.--Section 1861(s)(2)(K)(i) (42 U.S.C.
1395x(s)(2)(K)(i)) is amended by striking ``(I) in a hospital'' and all
that follows through ``shortage area''.
(b) Nurse Practitioners and Clinical Nurse Specialists.--Section
1861(s)(2)(K)(iii) (42 U.S.C. 1395x(s)(2)(K)(iii)) is amended--
(1) by inserting ``(I)'' before ``in a rural area'', and
(2) by inserting ``, (II) in any other area, in the case of
services furnished by nurse practitioners other than services
furnished to an inpatient of a hospital, or (III) in any other
area, in the case of services furnished by clinical nurse
specialists other than services furnished to an inpatient of a
hospital, skilled nursing facility or nursing facility (as
defined in section 1919(a)), and'' after ``section
1886(d)(2)(D))''.
(c) Conforming Amendments.--(1) Section 1832(a)(2)(B)(iv) (42
U.S.C. 1395k(a)(2)(B)(iv)) is amended by striking ``provided in a rural
area (as defined in section 1886(d)(2)(D))'' and inserting ``described
in section 1861(s)(2)(K)(iii)''.
(2) Section 1833(a)(1)(O) (42 U.S.C. 1395l(a)(1)(O)) is amended by
striking ``provided in a rural area''.
(3) Section 1833(r)(1) (42 U.S.C. 1395l(r)(1)) is amended by
striking ``provided in a rural area''.
(d) Effective Date.--The amendments made by this section shall
apply to services furnished on or after January 1, 1996.
PART 4--COORDINATION WITH ADMINISTRATIVE SIMPLIFICATION AND QUALITY
MANAGEMENT INITIATIVES
SEC. 4031. REPEAL OF SEPARATE MEDICARE PEER REVIEW PROGRAM.
Part B of title XI of the Social Security Act (42 U.S.C. 1301 et
seq.) is amended by adding at the end the following new section:
``termination
``Sec. 1165. The provisions of this part shall terminate effective
upon the adoption of the National Quality Management Program under
subtitle A of title V of the Health Security Act. Any reference to this
part or any section in this part shall not be effective after such
date.''.
SEC. 4032. MANDATORY ASSIGNMENT FOR ALL PART B SERVICES.
Section 1833 (42 U.S.C. 1395l) is amended--
(1) by redesignating the subsection (r) added by section
4206(b)(2) of OBRA-1990 as subsection (s); and
(2) by adding at the end the following new subsection:
``(t)(1) Notwithstanding any other provision of this part, payment
under this part for any item or service furnished on or after January
1, 1996, may only be made on an assignment-related basis.
``(2) Except for deductible, coinsurance, or copayment amounts
applicable under this part, no physician, supplier, or other person may
bill or collect any amount from an individual enrolled under this part
or other person for an item or service for which payment may be made
under this part. No such individual or person is liable for payment of
any amounts billed in violation of the previous sentence.
``(3) If a physician, supplier, or other person knowingly and
willfully bills or collects an amount in violation of paragraph (2),
the Secretary may apply sanctions against such physician, supplier, or
other person in accordance with section 1842(j)(2). Paragraph (4) of
section 1842(j) shall apply in this paragraph in the same manner as
such paragraph applies to such section.''.
SEC. 4033. ELIMINATION OF COMPLEXITIES CAUSED BY DUAL FUNDING SOURCES
AND RULES FOR PAYMENT OF CLAIMS.
(a) In General.--The Secretary of Health and Human Services shall
take such steps as may be necessary to consolidate the administration
(including processing systems) of parts A and B of the medicare program
(under title XVIII of the Social Security Act).
(b) Combination of Intermediary and Carrier Functions.--In taking
such steps, the Secretary shall contract with a single entity that
combines the fiscal intermediary and carrier functions in each area
except where the Secretary finds that special regional or national
contracts are appropriate.
(c) Superseding Conflicting Requirements.--The provisions of
sections 1816 and 1842 of the Social Security Act (including provider
nominating provisions in such section 1816) are superseded to the
extent required to carry out this section.
SEC. 4034. REPEAL OF PRO PRECERTIFICATION REQUIREMENT FOR CERTAIN
SURGICAL PROCEDURES.
(a) In General.--Section 1164 (42 U.S.C. 1320c-13) is repealed.
(b) Conforming Amendments.--
(1) Section 1154 (42 U.S.C. 1320c-3) is amended--
(A) in subsection (a), by striking paragraph (12),
and
(B) in subsection (d), by striking ``(and except as
provided in section 1164)''.
(2) Section 1833 (42 U.S.C. 1395l) is amended--
(A) in subsection (a)(1)(D)(i), by striking ``, or
for tests furnished in connection with obtaining a
second opinion required under section 1164(c)(2) (or a
third opinion, if the second opinion was in
disagreement with the first opinion)'';
(B) in subsection (a)(1), by striking clause (G);
(C) in subsection (a)(2)(A), by striking ``, to
items and services (other than clinical diagnostic
laboratory tests) furnished in connection with
obtaining a second opinion required under section
1164(c)(2) (or a third opinion, if the second opinion
was in disagreement with the first opinion),'';
(D) in subsection (a)(2)(D)(i)--
(i) by striking ``basis,'' and inserting
``basis or'', and
(ii) by striking ``, or for tests furnished
in connection with obtaining a second opinion
required under section 1164(c)(2) (or a third
opinion, if the second opinion was in
disagreement with the first opinion)'';
(E) in subsection (a)(3), by striking ``and for
items and services furnished in connection with
obtaining a second opinion required under section
1164(c)(2), or a third opinion, if the second opinion
was in disagreement with the first opinion)''; and
(F) in the first sentence of subsection (b), by
striking ``(4)'' and all that follows through ``and
(5)'' and inserting and ``(4)''.
(3) Section 1834(g)(1)(B) (42 U.S.C. 1395m(g)(1)(B)) is
amended by striking ``and for items and services furnished in
connection with obtaining a second opinion required under
section 1164(c)(2), or a third opinion, if the second opinion
was in disagreement with the first opinion)''.
(4) Section 1862(a) (42 U.S.C. 1395y(a)) is amended--
(A) by adding ``or'' at the end of paragraph (14),
(B) by striking ``; or'' at the end of paragraph
(15) and inserting a period, and
(C) by striking paragraph (16).
(5) The third sentence of section 1866(a)(2)(A) (42 U.S.C.
1395w(a)(2)(A)) is amended by striking ``, with respect to
items and services furnished in connection with obtaining a
second opinion required under section 1164(c)(2) (or a third
opinion, if the second opinion was in disagreement with the
first opinion),''.
(c) Effective Date.--The amendments made by this section shall
apply to services provided on or after the date of the enactment of
this Act.
SEC. 4035. REQUIREMENTS FOR CHANGES IN BILLING PROCEDURES.
(a) Limitation on Frequency of System Changes.--The Secretary of
Health and Human Services may not implement any change in the system
used for the billing and processing of claims for payment for items and
services furnished under title XVIII of the Social Security Act within
6 months of implementing any previous change in such system.
(b) Advance Notification to Providers as Requirement for Carriers
and Fiscal Intermediaries.--
(1) Fiscal intermediaries.--Section 1816(c) (42 U.S.C.
1395h(c)) is amended by adding at the end the following new
paragraph:
``(4) Each agreement with an agency or organization under this
section shall provide that the agency or organization shall notify
providers of services of any major change in the procedures for billing
for services furnished under this part at least 120 days before such
change is to take effect.''.
(2) Carriers.--Section 1842(b)(3) (42 U.S.C. 1395u(b)(3))
is amended--
(A) by striking ``and'' at the end of subparagraph
(G) and the end of subparagraph (H); and
(B) by inserting after subparagraph (H) the
following new subparagraph:
``(I) will notify individuals and entities furnishing items
and services for which payment may be made under this part of
any major change in the procedures for billing for such items
and services at least 120 days before such change is to take
effect; and''.
(3) Effective date.--The amendments made by paragraphs (1)
and (2) shall apply to agreements with fiscal intermediaries
under section 1816 of the Social Security Act and to contracts
with carriers under section 1842 of such Act for years
beginning after the expiration of the 9-month period beginning
on the date of the enactment of this Act.
PART 5--AMENDMENTS TO ANTI-FRAUD AND ABUSE PROVISIONS
SEC. 4041. ANTI-KICKBACK PROVISIONS.
(a) Revision to Penalties.--
(1) Permitting secretary to impose civil monetary
penalty.--Section 1128A(a) (42 U.S.C. 1320a-7a(a)) is amended--
(A) by striking ``or'' at the end of paragraphs (1)
and (2);
(B) by striking the semicolon at the end of
paragraph (3) and inserting ``; or''; and
(C) by inserting after paragraph (3) the following
new paragraph:
``(4) carries out any activity in violation of paragraph
(1) or (2) of section 1128B(b);''.
(2) Description of civil monetary penalty applicable.--
Section 1128A(a) (42 U.S.C. 1320a-7a(a)) is amended--
(A) by striking ``given).'' at the end of the first
sentence and inserting the following: ``given or, in
cases under paragraph (4), $50,000 for each such
violation).''; and
(B) by striking ``claim.'' at the end of the second
sentence and inserting the following: ``claim (or, in
cases under paragraph (4), damages of not more than
three times the total amount of remuneration offered,
paid, solicited, or received, without regard to whether
a portion of such remuneration was offered, paid,
solicited, or received for a lawful purpose).''.
(3) Increase in criminal penalty.--Paragraphs (1) and (2)
of section 1128B(b) (42 U.S.C. 1320a-7b(b)) are each amended--
(A) by striking ``$25,000'' and inserting
``$50,000''; and
(B) by striking the period at the end and inserting
the following: ``, and shall be subject to damages of
not more than three times the total remuneration
offered, paid, solicited, or received, without regard
to whether a portion of such remuneration was offered,
paid, solicited, or received for a lawful purpose.''.
(b) Revisions to Exceptions.--
(1) Exception for discounts.--Section 1128B(b)(3)(A) (42
U.S.C. 1320a-7b(b)(3)(A)) is amended by striking ``program;''
and inserting ``program and is not--
``(i) for the furnishing of one item or service
without charge or at a reduced charge in exchange for
any agreement to buy a different item or service;
``(ii) applicable to one payor but not to providers
of services or other entities under title XVIII or a
State health care program; or
``(iii) in the form of a cash payment;''.
(2) Exception for payments to employees.--Section
1128B(b)(3)(B) (42 U.S.C. 1320a-7b(b)(3)(B)) is amended by
inserting at the end ``if the amount of remuneration under the
arrangement is consistent with the fair market value of the
services and is not determined in a manner that takes into
account (directly or indirectly) the volume or value of any
referrals, except that such employee can be paid remuneration
in the form of a productivity bonus based on services
personally performed by the employee.''.
(3) Exception for waiver of coinsurance by certain
providers.--Section 1128B(b)(3)(D) (42 U.S.C. 1320a-
7b(b)(3)(D)) is amended to read as follows:
``(D) a waiver or reduction of any coinsurance or other
copayment if the waiver or reduction is made pursuant to a
public schedule of discounts which the person is obligated as a
matter of law to apply to certain individuals.''.
(4) New exception for certain providers.--Section
1128B(b)(3) (42 U.S.C. 1320a-7b(b)(3)) is amended--
(A) by striking ``and'' at the end of subparagraph
(D);
(B) by striking the period at the end of
subparagraph (E) and inserting ``; and''; and
(C) by adding at the end the following new
subparagraph:
``(F) any remuneration obtained by or given to an
individual or entity who receives assistance under a grant or
cooperative agreement for the provision of health care services
under title V, title XX, or the Public Health Service Act, or
is obligated as a matter of law to provide services according
to a schedule which provides for discounts based on the ability
of the individual services to pay, if--
``(i) in the case of an individual or entity who
receives assistance under a grant or cooperative
agreement for the provision of health care services
under title V, title XX, or the Public Health Service
Act, the remuneration is directly and primarily related
to the activity supported by the grant or cooperative
agreement; and
``(ii) the remuneration is pursuant to a written
arrangement for the use or procurement of space,
equipment, goods, or services for the referral of
patients that--
``(I) does not result in private inurement
to any current employee, officer, member of the
Board of Directors, or agent of the recipient
or any other person involved in recommending or
negotiating the arrangement; and
``(II) does not preclude the referral of
patients to other providers of service of the
patient's own choosing and does not interfere
with the ability of health professionals to
refer patients to providers of services they
believe are the most appropriate, except to the
extent such choices or referrals are limited by
the terms of a health plan in which the patient
has enrolled or the terms of a grant or
cooperative agreement described in clause
(i).''.
(5) New exception for capitated payments.--Section
1128B(b)(3) (42 U.S.C. 1320a-7b(b)(3)), as amended by paragraph
(4), is further amended--
(A) by striking ``and'' at the end of subparagraph
(E);
(B) by striking the period at the end of
subparagraph (F) and inserting ``; and''; and
(C) by adding at the end the following new
subparagraph--
``(G) any reduction in cost sharing or increased benefits
given to an individual, any amounts paid to a provider of
services for items or services furnished to an individual, or
any discount or reduction in price given by the provider for
such items or services, if the individual is enrolled with and
such items and services are covered under any of the following:
``(i) A health plan which is furnishing items or
services under title XVIII or a State health care
program to individuals on an at-risk, prepaid,
capitated basis pursuant to a written agreement with
the Secretary or a State health care program.
``(ii) An organization receiving payments on a
prepaid basis, under a demonstration project under
section 402(a) of the Social Security Amendments of
1967 or under section 222(a) of the Social Security
Amendments of 1972.
``(iii) Any other plan or insurer under which each
participating provider is paid wholly on an at-risk,
prepaid, capitated basis for such items or services
pursuant to a written arrangement between the plan and
the provider.''.
(c) Clarification of Coverage of Employers and Employees.--Section
1128B(b) (42 U.S.C. 1320a-7b(b)), as amended by subsection (a)(4), is
further amended by adding at the end the following new paragraph:
``(5) In this subsection, the term `referral' includes the referral
by an employee to his or her employer of any item or service for which
payment may be made in whole or in part under title XVIII or a State
health care program.''
(d) Authorization for the Secretary To Issue Regulations.--Section
1128B(b) (42 U.S.C. 1320a-7b(b)), as amended by subsections (a)(4) and
(c), is further amended by adding at the end the following new
paragraph:
``(6) The Secretary is authorized to impose by regulation such
other requirements as needed to protect against program or patient
abuse with respect to any of the exceptions described in paragraph
(3).''.
(e) Clarification of Other Elements of Offense.--Section 1128B(b)
(42 U.S.C. 1320a-7b(b)) is amended--
(1) in paragraph (1) in the matter preceding subparagraph
(A), by striking ``kind--'' and inserting ``kind with intent to
be influenced--'';
(2) in paragraph (1)(A), by striking ``in return for
referring'' and inserting ``to refer'';
(3) in paragraph (1)(B), by striking ``in return for
purchasing, leasing, ordering, or arranging for or
recommending'' and inserting ``to purchase, lease, order, or
arrange for or recommend'';
(4) in paragraph (2) in the matter preceding subparagraph
(A), by striking ``to induce such person'' and inserting ``with
intent to influence such person''; and
(5) by adding at the end of paragraphs (1) and (2) the
following sentence: ``A violation exists under this paragraph
if one or more purposes of the remuneration is unlawful under
this paragraph.''.
SEC. 4042. REVISIONS TO LIMITATIONS ON PHYSICIAN SELF-REFERRAL.
(a) Clarification of Payment Ban.--Section 1877(a)(1)(B) (42 U.S.C.
1395nn(a)(1)(B)) is amended to read as follows:
``(B) no physician or entity may present or cause to be
presented a claim under this title or bill to any third party
payor or other entity for designated health services furnished
pursuant to a referral prohibited under subparagraph (A).''.
(b) Clarification of Coverage of Holding Company Type Arrangements
and Loans.--The last sentence of section 1877(a)(2) (42 U.S.C.
1395nn(a)(2)) is amended by striking ``an interest in an entity that
holds an ownership or investment interest in any entity providing the
designated health service'' and inserting the following: ``a loan from
the entity, and an interest held indirectly through means such as (but
not limited to) having a family member hold such investment interest or
holding a legal or beneficial interest in another entity (such as a
trust or holding company) that holds such investment interest''.
(c) Revisions to General Exceptions to Both Ownership and
Compensation Arrangement Prohibitions.--
(1) Repeal of exception for physicians' services.--Section
1877(b) (42 U.S.C. 1395nn(b)) is amended--
(A) by striking paragraph (1); and
(B) by redesignating paragraphs (2) and (3) as
paragraphs (1) and (2).
(2) Revision to in-office ancillary services exception.--
Section 1877(b)(1) (42 U.S.C. 1395nn(b)(1)), as redesignated by
paragraph (1), is amended--
(A) in the matter preceding subparagraph (A), by
striking ``services (other than durable medical
equipment (excluding infusion pumps) and parenteral and
enteral nutrients, equipment, and supplies)'' and
inserting ``clinical laboratory services, x-ray and
ultrasound services that are provided at low-cost (as
determined in accordance with regulations of the
Secretary)''; and
(B) in subparagraph (A)--
(i) in clause (ii)(I), by striking ``(or
another physician who is a member of the same
group practice)'',
(ii) in clause (ii)(II) by inserting ``the
same or'' before ``another building'', and
(iii) in clause (ii)(II)(bb), by inserting
``all of'' after ``centralized provision of''.
(3) Revision to prepaid plan exception.--Section
1877(b)(2), (42 U.S.C. 1395nn(b)(2)), as redesignated by
paragraph (1), is amended to read as follows:
``(2) Prepaid plans.--In the case of designated health
services furnished by an organization--
``(A) with a risk sharing contract under section
1876(g) to an individual enrolled with the
organization,
``(B) receiving payments on a prepaid basis, under
a demonstration project under section 402(a) of the
Social Security Amendments of 1967 or under section
222(a) of the Social Security Amendments of 1972, to an
individual enrolled with the organization, or
``(C) that is a qualified health maintenance
organization (within the meaning of section 1310(d) of
the Public Health Service Act) to an individual
enrolled with the organization.''.
(4) New exception for capitated payments.--Section 1877(b)
(42 U.S.C. 1395nn(b)), as amended by paragraph (1), is amended
by inserting after paragraph (2) the following new paragraph:
``(3) Other capitated payments.--In the case of a
designated health service, if the designated health service is
included in the services for which a physician or physician
group is paid wholly on an at-risk, prepaid, capitated basis by
a health plan or insurer pursuant to a written arrangement
between the plan or insurer and the physician or physician
group.''.
(d) Revision to Publicly Traded Securities Exception.--Section
1877(c)(1) (42 U.S.C. 1395nn(c)(1)) is amended by inserting ``at the
time acquired by the physician'' after ``which may be purchased on
terms generally available to the public''.
(e) Revision to Rural Provider Exception.--Section 1877(d)(2) (42
U.S.C. 1395nn(d)(2)) is amended by striking ``substantially all'' and
inserting ``not less than 85 percent (as determined in accordance with
regulations of the Secretary)''.
(f) Revisions to Exceptions Relating to Other Compensation
Arrangements.--
(1) Exception for personal services arrangements.--(A)
Section 1877(e)(3)(B)(i)(II) (42 U.S.C. 1395nn(e)(3)(B)(i)(II))
is amended to read as follows:
``(II) If the plan places a
physician or physician group at
substantial financial risk (as
determined by the Secretary pursuant to
section 1876(i)(8)(A)(ii)), for
services not provided by the physician,
the entity complies with the provisions
of subclauses (I) and (II) of section
1876(i)(8)(A)(ii).'';
(B) Section 1877(e)(3)(B)(ii), 42 U.S.C.
1395nn(e)(3)(B)(ii) is amended by striking ``may directly or
indirectly have the effect of'' and inserting ``has the purpose
of''.
(2) Repeal of exception for remuneration unrelated to the
provision of designated health services.--Section 1877(e) (42
U.S.C. 1395nn(e)) is amended--
(A) by striking paragraph (4); and
(B) by redesignating paragraphs (5), (6), (7), and
(8) as paragraphs (4), (5), (6), and (7).
(3) Exception for certain physician recruitment.--Section
1877(e)(4) (42 U.S.C. 1395nn(e)(4)), as redesignated by
paragraph (2), is amended to read as follows:
``(4) Physician recruitment.--In the case of remuneration
which is provided by an entity located in a rural area (as
defined in section 1886(d)(2)(D)) or a health professional
shortage areas (designated under section 332 of the Public
Health Service Act), or an entity for which 85 percent of the
patients are members of a medically underserved population
designated under section 330 of the Public Health Service Act
(as determined in accordance with regulations of the
Secretary), in order to induce a physician who has been
practicing within the physician's current specialty for less
than one year to establish staff privileges at the entity, or
to induce any other physician to relocate his or her primary
place of practice to the geographic area served by the entity,
if the following standards are met:
``(A) The arrangement is set forth in a written
agreement that specifies the benefits provided by the
entity to the physician, the terms under which the
benefits are to be provided, and the obligations of
each party.
``(B) If a physician is leaving an established
practice, the physical location of the new primary
place of practice must be not less than 100 miles from
the location of the established primary place of
practice and at least 85 percent of the revenues of the
physician's new practice must be generated from new
patients for whom the physician did not previously
provide services at the former practice.
``(C) The benefits are provided by the entity for a
period not in excess of 3 years, and the terms of the
agreement are not renegotiated during this 3-year
period in any substantial aspect, unless the
physician's new primary place of practice is designated
as a health professional shortage area (pursuant to
section 332 of the Public Health Service Act) for the
physician's specialty category during the entire
duration of the relationship between the physician and
the entity.
``(D) There is no requirement that the physician
make referrals to, be in a position to make or
influence referrals to, or otherwise generate business
for the entity as a condition for receiving the
benefits.
``(E) The physician is not restricted from
establishing staff privileges at, referring any service
to, or otherwise generating any business for any other
entity of the physician's choosing.
``(F) The amount or value of the benefits provided
by the entity may not vary (or be adjusted or
renegotiated) in any manner based on the volume or
value of any expected referrals to or business
otherwise generated for the entity by the physician for
which payment may be made in whole or in part under
this title or a State health care program (as defined
in section 1128(h)).
``(G) The physician agrees to treat patients
entitled to benefits under this title or enrolled in a
State plan for medical assistance under title XIX.''.
(4) Exception for isolated transactions.--Section
1877(e)(5) (42 U.S.C. 1395nn(e)(6)), as redesignated by
paragraph (2), is amended--
(A) by redesignating subparagraph (B) as
subparagraph (C);
(B) by striking ``and'' at the end of subparagraph
(A); and
(C) by inserting after subparagraph (A) the
following new subparagraph:
``(B) there is no financing of the sale between the
parties, and''.
(5) Exception for payments by a physician.--Section
1877(e)(7) (42 U.S.C. 1395nn(e)(7)), as redesignated by
paragraph (2), is amended to read as follows:
``(7) Payments by a physician for items and services.--
Payments made by a physician to an individual or entity as
compensation for items or services if the items or services are
furnished at a price that is consistent with fair market
value.''.
(6) Additional exception for discounts or other reductions
in price.--Section 1877(e) (42 U.S.C. 1395nn(e)), as amended by
paragraph (2), is amended by adding at the end the following
new paragraph:
``(8) Discounts or other reductions in price.--Discounts or
other reductions in price between a physician and an entity for
items or services for which payment may be made under this
title so long as the discount or other reduction in price is
properly disclosed and appropriately reflected in the costs
claimed or charges made by the physician or entity under this
title and is not--
``(A) for the furnishing of one item or service
without charge or at a reduced charge in exchange for
any agreement to buy a different item or service,
``(B) applicable to one or more payers but not to
all individuals and entities providing services for
which payment may be made under this title, or
``(C) in the form of a cash payment.''.
(g) Clarification of Sanction Authority.--Section 1877(g)(4) (42
U.S.C. 1395nn(g)(4)) is amended by striking ``Any physician'' and all
that follows through ``to such entity,'' and inserting the following:
``Any physician or other entity that enters into an arrangement or
scheme (such as a cross-referral arrangement or an arrangement with
multiple leases overlapping in time for the same or similar rental
space or equipment) which the physician or entity knows or should know
has a principal purpose of inducing referrals to another entity, which
referrals, if made directly by the physician or entity to such other
entity,''.
(h) Clarification of Definition of Remuneration.--Section
1877(h)(1)(B) (42 U.S.C. 1395nn(h)(1)(B)) is amended to read as
follows:
``(B) The term `remuneration' includes any payment,
discount or other reduction in price, forgiveness of debt or
other benefit made directly or indirectly, overtly or covertly,
in cash or in kind.''.
(i) Revision to Definition of Group Practice.--Section 1877(h)(4)
(42 U.S.C. 1395nn(h)(4)) is amended--
(1) in subparagraph (A)(vi), by striking the period at the
end and inserting the following: ``, including a requirement
for the physical grouping of physician practices as may be
reasonably required to prevent the abuse of any exceptions
provided to group practices under this section.''; and
(2) in subparagraph (B)(i), by striking ``or services
incident to such personally performed services''.
(j) Expansion to Cover Additional Items and Services.--Section
1877(h)(6) (42 U.S.C. 1395nn(h)(6)), as amended by section 2005(c)(3),
is amended--
(1) in subparagraph (D), by striking ``or other''; and
(2) by adding at the end the following new subparagraphs:
``(M) Diagnostic services.
``(N) Any other item or service not rendered by the
physician personally or by a person under the
physician's direct supervision.''.
(k) Authorization for the Secretary to Issue Regulations.--Section
1877 (42 U.S.C. 1395nn) is amended by adding the following new
subsection:
``(i) Additional Requirements.--The Secretary is authorized to
impose by regulation such other requirements as needed to protect
against program or patient abuse with respect to any of the exceptions
under this section.''.
(l) Incorporation of Amendments Made Under OBRA-1993.--In this
section, any reference to section 1877 of the Social Security Act shall
be considered a reference to such section as amended by section
13562(a) of OBRA-1993.
SEC. 4043. CIVIL MONETARY PENALTIES.
(a) Prohibition Against Offering Inducements to Individuals
Enrolled Under Plans.--
(1) Offer of remuneration.--Section 1128A(a) (42 U.S.C.
1320a-7a(a)) (as amended by section 4041(a)(1)) is amended--
(A) by striking ``; or'' at the end of paragraph
(3) and inserting a semicolon;
(B) by striking the semicolon at the end of
paragraph (4) and inserting ``; or''; and
(C) by inserting after paragraph (4) the following
new paragraph:
``(5) offers, pays, or transfers remuneration to any
individual eligible for benefits under title XVIII of this Act,
or under a State health care program (as defined in section
1128(h)) that such person knows or should know is likely to
influence such individual to order or receive from a particular
provider, practitioner, or supplier any item or service for
which payment may be made, in whole or in part, under title
XVIII, or a State health care program;''.
(2) Remuneration defined.--Section 1128A(i) (42 U.S.C.
1320a-7a(i)) is amended by adding at the end the following new
paragraph:
``(6) The term `remuneration' includes the waiver of
coinsurance and deductible amounts (or any part thereof), and
transfers of items or services for free or for other than fair
market value, except that such term does not include the waiver
of coinsurance or deductible amounts by a person or entity,
if--
``(A) the waiver is not offered as part of any
advertisement or solicitation;
``(B) the person does not routinely waive
coinsurance or deductible amounts; and
``(C) the person--
``(i) waives the coinsurance and deductible
amounts after determining in good faith that
the individual is indigent;
``(ii) fails to collect coinsurance or
deductible amounts after making reasonable
collection efforts; or
``(iii) provides for any permissible waiver
as specified in section 1128B(b)(3) or in
regulations issued by the Secretary.''.
(b) Claim for Item or Service Based on Incorrect Coding or
Medically Unnecessary Services.--Section 1128A(a)(1) (42 U.S.C. 1320a-
7a(a)(1)) is amended--
(1) in subparagraph (A), by striking ``claimed,'' and
inserting the following: ``claimed, including any person who
presents or causes to be presented a claim for an item or
service which includes a procedure or diagnosis code that the
person knows or should know will result in a greater payment to
the person than the code applicable to the item or service
actually provided or actual patient medical condition,'';
(2) in subparagraph (C), by striking ``or'' at the end;
(3) in subparagraph (D), by striking ``; or'' and inserting
``, or''; and
(4) by inserting after subparagraph (D) the following new
subparagraph:
``(E) is for a medical or other item or service
that a person knows or should know is not medically
necessary; or''.
(c) Excluded Individual Retaining Ownership or Control Interest in
Participating Entity.--Section 1128A(a) of such Act, as amended by
section 4041(a)(1) and subsection (a)(1), is further amended--
(1) by striking ``or'' at the end of paragraph (4);
(2) by striking the semicolon at the end of paragraph (5)
and inserting ``; or''; and
(3) by inserting after paragraph (5) the following new
paragraph:
``(6) in the case of a person who is not an organization,
agency, or other entity, who is excluded from participating in
a program under title XVIII or a State health care program in
accordance with this section, section 1128, or section 1156 and
who, during the period of exclusion, retains either a direct or
indirect ownership or control interest of 5 percent or more in,
or an ownership or control interest (as defined in section
1124(a)(3)) in, or who is an officer, director, agent, or
managing employee (as defined in section 1126(b)) of, an entity
that is participating in a program under title XVIII or a State
health care program;''.
(d) Additional Offenses Relating to Alliance System.--Section
1128A(a) of such Act, as amended by section 4041(a)(1) and subsections
(a)(1) and (c), is further amended--
(1) by striking ``or'' at the end of paragraph (5);
(2) by striking the semicolon at the end of paragraph (6)
and inserting ``; or''; and
(3) by inserting after paragraph (6) the following new
paragraphs:
``(7) engages in a practice that circumvents a payment
methodology intended to reimburse for two or more discreet
medical items or services at a single or fixed amount,
including but not limited to, multiple admissions or
readmission to hospitals and other institutions reimbursed on a
diagnosis reimbursement grouping basis;
``(8) engages in a practice which has the effect of
limiting or discouraging (as compared to other plan enrollees)
the utilization of health care services covered by law or under
the service contract by title XIX or other publicly subsidized
patients, including but not limited to differential standards
for the location and hours of service offered by providers
participating in the plan;
``(9) substantially fails to cooperate with a quality
assurance program or a utilization review activity;
``(10) fails substantially to provide or authorize
medically necessary items and services that are required to be
provided to an individual covered under a health plan under the
Health Security Act or public program for the delivery of or
payment for health care items or services, if the failure has
adversely affected (or had a substantial likelihood of
adversely affecting) the individual;
``(11) employs or contracts with any individual or entity
who is excluded from participating in a program under title
XVIII or a State health care program in accordance with this
section, section 1128, or section 1156, for the provision of
any services (including but not limited to health care,
utilization review, medical social work, or administrative), or
employs or contracts with any entity for the direct or indirect
provision of such services, through such an excluded individual
or entity; or
``(12) submits false or fraudulent statements, data or
information or claims to the National Health Board established
under part 1 of subtitle F of title I of the Health Security
Act, any other Federal agency, a State health care agency, a
health alliance (under subtitle D of title I of such Act), or
any other Federal, State or local agency charged with
implementation or oversight of a health plan under such Act or
a public program that the person knows or should know is
fraudulent;''.
(e) Modifications of Amounts of Penalties and Assessments.--Section
1128A(a) (42 U.S.C. 1320a-7a(a)), as amended by section 4041(a),
subsection (a)(1), subsection (c), and subsection (d), is amended in
the matter following paragraph (12)--
(1) by striking ``$2,000'' and inserting ``$10,000'';
(2) by inserting after ``under paragraph (4), $50,000 for
each such violation'' the following: ``; in cases under
paragraph (5), $10,000 for each such offer, payment, or
transfer; in cases under paragraph (6), $10,000 for each day
the prohibited relationship occurs; in cases under paragraphs
(7) through (12), an amount not to exceed $50,000 for each such
determination by the Secretary''; and
(3) by striking ``twice the amount'' and inserting ``three
times the amount''.
(f) Interest on Penalties.--Section 1128A(f) (42 U.S.C. 1320a-
7a(f)) is amended by adding after the first sentence the following:
``Interest shall accrue on the penalties and assessments imposed by a
final determination of the Secretary in accordance with an annual rate
established by the Secretary under the Federal Claims Collection Act.
The rate of interest charged shall be the rate in effect on the date
the determination becomes final and shall remain fixed at that rate
until the entire amount due is paid. In addition, the Secretary is
authorized to recover the costs of collection in any case where the
penalties and assessments are not paid within 30 days after the
determination becomes final, or in the case of a compromised amount,
where payments are more than 90 days past due. In lieu of actual costs,
the Secretary is authorized to impose a charge of up to 10 percent of
the amount of penalties and assessments owed to cover the costs of
collection.''.
(g) Authorization To Act.--
(1) In general.--The first sentence of section 1128A(c)(1)
(42 U.S.C. 1320a-7a(c)(1)) is amended by striking all that
follows ``(b)'' and inserting the following: ``unless, within
one year after the date the Secretary presents a case to the
Attorney General for consideration, the Attorney General brings
an action in a district court of the United States.''.
(2) Effective date.--The amendment made by this paragraph
(1) shall apply to cases presented by the Secretary of Health
and Human Services for consideration on or after the date of
the enactment of this Act.
(h) Deposit of Penalties Collected into All-Payer Account.--Section
1128A(f)(3) (42 U.S.C. 1320a-7a(f)(3)) is amended by striking ``as
miscellaneous receipts of the Treasury of the United States'' and
inserting ``in the All-Payer Health Care Fraud and Abuse Control
Account established under section 5402 of the Health Security Act''.
(i) Clarification of Penalty Imposed on Excluded Provider
Furnishing Services.--Section 1128A(a)(1)(D) (42 U.S.C. 1320a-
7a(a)(1)(D)) is amended by inserting ``who furnished the service''
after ``in which the person''.
SEC. 4044. EXCLUSIONS FROM PROGRAM PARTICIPATION.
(a) Mandatory Exclusion for Individual Convicted of Criminal
Offense Related to Health Care Fraud.--Section 1128 (42 U.S.C. 1320a-7)
is amended--
(1) by amending paragraph (1) of subsection (a) to read as
follows:
``(1) Convictions of program-related crimes and health care
fraud.--
``(A) Any individual or entity that has been
convicted of a criminal offense related to the delivery
of an item or service under title XVIII or under any
State health care program; or
``(B) Any individual or entity that has been
convicted, under Federal or State law, in connection
with the delivery of a health care item or service of a
criminal offense relating to fraud, theft,
embezzlement, breach of fiduciary responsibility, or
other financial misconduct.''; and
(2) in subsection (b)(1), by striking ``in connection with
the delivery of a health care item or service or''.
(b) Establishment of Minimum Period of Exclusion for Certain
Individuals and Entities Subject to Permissive Exclusion From Medicare
and State Health Care Programs.--Section 1128(c)(3) (42 U.S.C. 1320a-
7(c)(3)) is amended by adding at the end the following new
subparagraphs:
``(D) In the case of an exclusion of an individual or entity under
paragraphs (1), (2), or (3) of subsection (b), the period of exclusion
shall be a minimum of 3 years, unless the Secretary determines that a
longer period is appropriate because of aggravating circumstances.
``(E) In the case of an exclusion of an individual or entity under
paragraph (4) or (5) of subsection (b), the period of the exclusion
shall not be less than the period during which the individual's or
entity's license to provide health care is revoked, suspended, or
surrendered, or the individual or the entity is excluded or suspended
from a Federal or State health care program.
``(F) In the case of an exclusion of an individual or entity under
subsection (b)(6)(B), the period of the exclusion shall be not less
than 1 year.''.
(c) Revision to Exclusion for Default on Health Education Loan or
Scholarship Obligations.--Section 1128(b)(14) (42 U.S.C. 1320a-
7(b)(14)) is amended by striking ``all reasonable steps'' and inserting
``reasonable steps''.
(d) Permissive Exclusion of Individuals With Ownership or Control
Interest in Sanctioned Entities.--Section 1128(b) (42 U.S.C. 1320a-
7(b)) is amended by adding at the end the following new paragraph:
``(15) Individuals controlling a sanctioned entity.--Any
individual who has a direct or indirect ownership or control
interest of 5 percent or more, or an ownership or control
interest (as defined in section 1124(a)(3)) in, or who is an
officer, director, agent, or managing employee (as defined in
section 1126(b)) of, an entity--
``(A) that has been convicted of any offense
described in subsection (a) or in paragraph (1), (2),
or (3) of this subsection;
``(B) against which a civil monetary penalty has
been assessed under section 1128A; or
``(C) that has been excluded from participation
under a program under title XVIII or under a State
health care program.''.
(e) Exclusions Based on Actions Under Alliance System.--Section
1128 (42 U.S.C. 1320a-7), as amended by subsections (a) and (d), is
amended--
(1) in subsection (a)(1)(A), by striking ``XVIII or under a
State health care program'' and inserting ``XVIII, a State
health care program, or under an applicable health plan (as
defined in section 1902(6) of the Health Security Act)'';
(2) in subsection (b)(5)--
(A) by striking ``or'' at the end of subparagraph
(A),
(B) by adding ``or'' at the end of subparagraph
(B), and
(C) by inserting after subparagraph (B) the
following new subparagraph:
``(C) an applicable health plan (as defined in
section 1902(6) of the Health Security Act) under
section 5411 or 5412(b)(3) of such Act,'';
(3) in subsection (b)(6)(B), by striking ``XVIII or under a
State health care program'' and inserting ``XVIII, a State
health care program, or an applicable health plan (as defined
in section 1902(6) of the Health Security Act)'';
(4) in subsection (b)(7), by striking the period at the end
and inserting ``, or in section 5412 of the Health Security
Act.'';
(5) in subsection (b)(8)(B)--
(A) in clause (ii), by striking ``1128A'' and
inserting ``1128A or under section 5412 of the Health
Security Act'', and
(B) in clause (iii), by striking ``XVIII or under a
State health care program'' and inserting ``XVIII, a
State health care program, or under an applicable
health plan (as defined in section 1902(6) of the
Health Security Act)'';
(6) in subsection (b)(9), by striking the period at the end
and inserting ``, or provide any information requested by the
Inspector General of the Department of Health and Human
Services to carry out the All-Payer Health Care Fraud and Abuse
Control Program established under section 5401 of the Health
Security Act.'';
(7) in subsection (b)(11)--
(A) by striking ``title XVIII or a State health
care program'' and inserting ``title XVIII, a State
health care program, or an applicable health plan (as
defined in section 1902(6) of the Health Security
Act)'',
(B) by striking ``Secretary or the appropriate
State agency'' and inserting ``Secretary, the
appropriate State agency, or plan sponsor'', and
(C) by striking ``Secretary or that agency'' and
inserting ``Secretary, that agency, or that sponsor'';
(8) in subsection (b)(12), by adding at the end the
following new subparagraph:
``(E) Any entity authorized by law to (i) conduct
on-site health, safety or patient care reviews and
surveys or (ii) to investigate whether any violations
of law have occurred, including violations under this
section, section 1128A, section 1128B, or part 2 of
subtitle E of title V of the Health Security Act.'';
(9) in subsection (b)(14), by striking ``XVIII or XIX'' and
inserting ``XVIII, a State health care program, or an
applicable health plan (as defined in section 1902(6) of the
Health Security Act)''; and
(10) in subsection (b)(15)--
(A) in subparagraph (B), by striking ``1128A'' and
inserting ``1128A or section 5412 of the Health
Security Act'', and
(B) in subparagraph (C), by striking ``title XVIII
or under a State health care program'' and inserting
``title XVIII, a State health care program, or an
applicable health plan (as defined in section 1902(6)
of the Health Security Act''.
(f) Appeal of Exclusions to Court of Appeals.--Section 1128(f)(1)
(42 U.S.C. 1320a-7(f)(1)) is amended by striking the period at the end
and inserting the following: ``, except that any action brought to
appeal such decision shall be brought in the United States Court of
Appeals for the judicial circuit in which the individual or entity
resides or has a principal place of business (or, if the individual or
entity does not reside or have a principal place of business within any
such judicial circuit, in the United States Court of Appeals for the
District of Columbia Circuit).''.
SEC. 4045. SANCTIONS AGAINST PRACTITIONERS AND PERSONS FOR FAILURE TO
COMPLY WITH STATUTORY OBLIGATIONS RELATING TO QUALITY OF
CARE.
(a) Minimum Period of Exclusion for Practitioners and Persons
Failing To Meet Statutory Obligations.--
(1) In general.--The second sentence of section 1156(b)(1)
(42 U.S.C. 1320c-5(b)(1)) is amended by striking ``may
prescribe)'' and inserting ``may prescribe, except that such
period may not be less than one year)''.
(2) Conforming amendment.--Section 1156(b)(2) (42 U.S.C.
1320c-5(b)(2)) is amended by striking ``shall remain'' and
inserting ``shall (subject to the minimum period specified in
the second sentence of paragraph (1)) remain''.
(b) Repeal of ``Unwilling or Unable'' Condition for Imposition of
Sanction.--Section 1156(b)(1) (42 U.S.C. 1320c-5(b)(1)) is amended--
(1) in the second sentence, by striking ``and determines''
and all that follows through ``such obligations,'' and
(2) by striking the third sentence.
(c) Amount of Civil Money Penalty.--Section 1156(b)(3) (42 U.S.C.
1320c-5(b)(3)) is amended by striking ``the actual or estimated cost''
and inserting the following: ``$50,000 for each instance''.
SEC. 4046. EFFECTIVE DATE.
The amendments made by this part shall take effect January 1, 1995.
PART 6--FUNDING OF GRADUATE MEDICAL EDUCATION AND ACADEMIC HEALTH
CENTERS
SEC. 4051. TRANSFERS FROM MEDICARE TRUST FUNDS FOR GRADUATE MEDICAL
EDUCATION.
(a) In General.--For purposes of complying with section 3034(a),
there shall be transferred to the Secretary from the Federal Hospital
Insurance Trust Fund (established under section 1817 of the Social
Security Act) and the Federal Supplementary Medical Insurance Trust
Fund (established under section 1841 of such Act) the following amount
(in the aggregate), as applicable to a fiscal year:
(1) In the case of fiscal year 1996, $1,500,000,000.
(2) In the case of each of the fiscal years 1997 and 1998,
$1,600,000,000.
(3) In the case of each subsequent fiscal year, the amount
specified in paragraph (2) increased by the Secretary's
estimate of the percentage increase in the consumer price index
for all urban consumers (U.S. city average) for the 12-month
period ending with the midpoint of the previous fiscal year.
(b) Allocation of Amount Among Funds.--With respect to the amount
required under subsection (a) to be transferred for a year from the
Federal Hospital Insurance Trust Fund and the Federal Supplementary
Medical Insurance Trust Fund, the Secretary shall determine an
equitable allocation of such amount among the funds.
(c) Termination of Graduate Medical Education Payments Under
Medicare.--
(1) In General.-- Section 1886(h) (42 U.S.C. 1395ww(h)) is
amended by adding at the end the following new paragraph:
``(6) Termination of payments attributable to costs of
training physicians.--Notwithstanding any other provision of
this section or section 1861(v), no payment may be made under
this title for direct graduate medical education costs
attributable to an approved medical residency training program
for any cost reporting period (or portion thereof) beginning on
or after October 1, 1995.''.
(2) Prohibition against recognition of costs.--Section
1861(v)(1) (42 U.S.C. 1395x(v)(1)) is amended by adding at the
end the following new subparagraph:
``(T) Such regulations shall not include any provision for specific
recognition of the costs of graduate medical education for hospitals
for any cost reporting period (or portion thereof) beginning on or
after October 1, 1995. Nothing in the previous sentence shall be
construed to affect in any way payments to hospitals for the costs of
any approved educational activities that are not described in such
sentence.''.
SEC. 4052. TRANSFERS FROM HOSPITAL INSURANCE TRUST FUND FOR ACADEMIC
HEALTH CENTERS.
(a) In General.--For purposes of complying with section 3104(a),
there shall be transferred to the Secretary from the Federal Hospital
Insurance Trust Fund (established under section 1817 of the Social
Security Act) the following amount (in the aggregate), as applicable to
a fiscal year:
(1) In the case of fiscal year 1996, $2,100,000,000.
(2) In the case of each of the fiscal years 1997 and 1998,
$2,000,000,000.
(3) In the case of each subsequent fiscal year, the amount
specified in paragraph (2) increased by the Secretary's
estimate of the percentage increase in the consumer price index
for all urban consumers (U.S. city average) for the 12-month
period ending with the midpoint of the previous fiscal year.
(b) Termination of Payments Under Medicare.--
(1) In general.--Section 1886(d)(5)(B) (42 U.S.C.
1395ww(d)(5)(B)) is amended in the matter preceding clause (i)
by striking ``The Secretary'' and inserting ``For discharges
occurring before October 1, 1995, the Secretary''.
(2) Adjustment to standardized amounts.--Section
1886(d)(2)(C)(i) (42 U.S.C. 1395ww(d)(2)(C)(i)) is amended by
striking ``excluding'' and inserting ``for discharges occurring
before October 1, 1995, excluding''.
PART 7--COVERAGE OF SERVICES PROVIDED BY FACILITIES AND PLANS OF
DEPARTMENTS OF DEFENSE AND VETERANS AFFAIRS
SEC. 4061. TREATMENT OF UNIFORMED SERVICES HEALTH PLAN AS ELIGIBLE
ORGANIZATION UNDER MEDICARE.
(a) In General.--Section 1876 (42 U.S.C. 1395mm), as amended by
section 4002(a), is further amended by adding at the end the following
new subsection:
``(l) Notwithstanding any other provision of this section, a
Uniformed Services Health Plan of the Department of Defense under
chapter 55 of title 10, United States Code, shall be considered an
eligible organization under this section, and the Secretary shall make
payments to such Plan during a year on behalf of any individuals
entitled to benefits under this title who are enrolled with such a Plan
during the year in the same amounts and under the same terms and
conditions under which the Secretary makes payments to eligible
organizations with risk-sharing contracts under section 1876.''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to items and services furnished under title XVIII of the Social
Security Act on or after October 1, 1995.
SEC. 4062. COVERAGE OF SERVICES PROVIDED TO MEDICARE BENEFICIARIES BY
PLANS AND FACILITIES OF DEPARTMENT OF VETERANS AFFAIRS.
(a) In General.--Title XVIII, as amended by sections 4001 and 4003,
is further amended by adding at the end the following new section:
``treatment of plans and facilities of department of veterans affairs
as providers
``Sec. 1895. (a) In General.--Notwithstanding any other provision
of this title--
``(1) a VA health plan (as defined in section 1801(2) of
title 38, United States Code) shall be considered an eligible
organization for purposes of section 1876; and
``(2) a health care facility of the Department of Veterans
Affairs shall be considered a provider of services under
section 1861(u).
``(b) Eligibility for Payments.--
``(1) VA health plans.--The Secretary shall make payments
to a VA health plan during a year on behalf of any veteran,
other than a veteran described in section 1831(b) during the
year (other than any individuals described in section 1831(b)
of title 38, United States Code) in the same amounts and under
the same terms and conditions under which the Secretary makes
payments to eligible organizations with a risk-sharing contract
under section 1876.
``(2) Health care facilities.--The Secretary shall make
payments to a health care facility of the Department of
Veterans Affairs for services provided to an individual
entitled to benefits under this title in the same amounts and
under the same terms and conditions under which the Secretary
makes payments to provider of services under this title.''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply to items and services furnished under title XVIII of the Social
Security Act on or after January 1, 1998.
SEC. 4063. CONFORMING AMENDMENTS.
(a) Part A.--Section 1814 (42 U.S.C. 1395f) is amended by striking
subsection (c).
(b) Part B.--Section 1835 (42 U.S.C. 1395n) is amended by striking
subsection (d).
(c) Additional Conforming Amendment.--Section 1880(a) (42 U.S.C.
1395qq(a)) is amended by striking ``, notwithstanding sections 1814(c)
and 1835(d),''.
(d) Effective Date.--The amendments made by this section shall take
effect January 1, 1998.
Title IV, Subtitle B
Subtitle B--Savings in Medicare Program
PART 1--SAVINGS RELATING TO PART A
SEC. 4101. REDUCTION IN UPDATE FOR INPATIENT HOSPITAL SERVICES.
Section 1886(b)(3)(B)(i) (42 U.S.C. 1395ww(b)(3)(B)(i)), as amended
by section 13501(a)(1) of OBRA-1993, is amended--
(1) in subclause (XII)--
(A) by striking ``fiscal year 1997'' and inserting
``for each of the fiscal years 1997 through 2000'', and
(B) by striking ``0.5 percentage point'' and
inserting ``2.0 percentage points''; and
(2) in subclause (XIII), by striking ``fiscal year 1998''
and inserting ``fiscal year 2003''.
SEC. 4102. REDUCTION IN ADJUSTMENT FOR INDIRECT MEDICAL EDUCATION.
(a) In General.--Section 1886(d)(5)(B)(ii) (42 U.S.C.
1395ww(d)(5)(B)(ii)) is amended to read as follows:
``(ii) For purposes of clause (i)(II), the indirect
teaching adjustment factor is equal to c * (((1+r) to the nth
power) - 1), where `r' is the ratio of the hospital's full-time
equivalent interns and residents to beds and `n' equals .405.
For discharges occurring on or after--
``(I) May 1, 1986, and before October 1, 1995, `c'
is equal to 1.89, and
``(II) October 1, 1995, `c' is equal to 0.74.''.
(b) No Restandardization of Payment Amounts Required.--Section
1886(d)(2)(C)(i) (42 U.S.C. 1395ww(d)(2)(C)(i)) is amended by striking
``of 1985'' and inserting ``of 1985, but not taking into account the
amendments made by section 4102(a) of the Health Security Act''.
SEC. 4103. REDUCTION IN PAYMENTS FOR CAPITAL-RELATED COSTS FOR
INPATIENT HOSPITAL SERVICES.
(a) PPS Hospitals.--
(1) Reduction in base payment rates.--Section 1886(g)(1)(A)
(42 U.S.C. 1395ww(g)(1)(A)), as amended by section 13501(a)(3)
of OBRA-1993, is amended by adding at the end the following new
sentence: ``In addition to the reduction described in the
preceding sentence, for discharges occurring after September
30, 1995, the Secretary shall reduce by 7.31 percent the
unadjusted standard Federal capital payment rate (as described
in 42 CFR 412.308(c), as in effect on the date of the enactment
of the Health Security Act) and shall reduce by 10.41 percent
the unadjusted hospital-specific rate (as described in 42 C