To express the sense of the Senate that the Committee on Finance should hold hearing regarding permitting States to provide health benefits to legal immigrants under Medicaid and SCHIP as part of the reauthorization of the temporary assistance for needy families program.

TEXT OF AMENDMENTS

SA 1001. Mrs. BOXER (for herself and Ms. Mikulski) proposed an
amendment to the bill S. 1, to amend title XVIII of the Social Security
Act to make improvements in the medicare program, to provide
prescription drug coverage under the medicare program, and for other
purposes; as follows:

On page 49, strike line 3 through page 50, line 2 and
insert the following:
``(2) Limits on cost-sharing.--
``(A) In general.--The coverage has cost-sharing (for costs
above the annual deductible specified in paragraph (1) and up
to the annual out-of-pocket limit under paragraph (4)) that
is equal to 50 percent or that is actuarially consistent
(using processes established under subsection (f)) with an
average expected payment of 50 percent of such costs.
``(B) Application.--Notwithstanding the succeeding
provisions of this part, the Administrator shall not apply
subsection (d)(1)(C) and paragraphs (1)(D), (2)(D), and
(3)(A)(iv) of section 1860D-19(a).
______

SA 1002. Mrs. LINCOLN (for herself, Mr. Conrad, Mr. Miller, Mr.
Carper, Mr. Johnson, Ms. Mikulski, Mrs. Clinton, and Mr. Dorgan)
proposed an amendment to the bill S. 1, to amend title XVIII of the
Social Security Act to make improvements in the medicare program, to
provide prescription drug coverage under the medicare program, and for
other purposes; as follows:

On page 83, strike lines 1 through 7, and insert the
following:
``(5) Contract to be available in designated area for 2
years.--Notwithstanding paragraph (1), if the Administrator
enters into a contract with an entity with respect to an area
designated under subparagraph (B) of such paragraph for a
year, the following rules shall apply:
``(A) The contract shall be for a 2-year period.
``(B) The Secretary is not required to make the
determination under paragraph (1)(A) with respect to the
second year of the contract for the area.
``(C) During the second year of the contract, an eligible
beneficiary residing in the area may continue to receive
standard prescription drug coverage (including access to
negotiated prices for such beneficiaries pursuant to section
1860D-6(e)) under such contract or through any Medicare
Prescription Drug plan that is available in the area.

At the end of title VI, add the following:

SEC. ____. MEDICARE SECONDARY PAYOR (MSP) PROVISIONS.

(a) Technical Amendment Concerning Secretary's Authority to
Make Conditional Payment When Certain Primary Plans Do Not
Pay Promptly.--
(1) In general.--Section 1862(b)(2) (42 U.S.C. 1395y(b)(2))
is amended--
(A) in subparagraph (A)(ii), by striking ``promptly (as
determined in accordance with regulations)'';
(B) in subparagraph (B)--
(i) by redesignating clauses (i) through (iii) as clauses
(ii) through (iv), respectively; and
(ii) by inserting before clause (ii), as so redesignated,
the following new clause:
``(i) Authority to make conditional payment.--The Secretary
may make payment under this title with respect to an item or
service if a primary plan described in subparagraph (A)(ii)
has not made or cannot reasonably be expected to make payment
with respect to such item or service promptly (as determined
in accordance with regulations). Any such payment by the
Secretary shall be conditioned on reimbursement to the
appropriate Trust Fund in accordance with the succeeding
provisions of this subsection.''.
(2) Effective date.--The amendments made by paragraph (1)
shall be effective as if included in the enactment of title
III of the Medicare and Medicaid Budget Reconciliation
Amendments of 1984 (Public Law 98-369).
(b) Clarifying Amendments to Conditional Payment
Provisions.--Section 1862(b)(2) (42 U.S.C. 1395y(b)(2)) is
further amended--
(1) in subparagraph (A), in the matter following clause
(ii), by inserting the following sentence at the end: ``An
entity that engages in a business, trade, or profession shall
be deemed to have a self-insured plan if it carries its own
risk (whether by a failure to obtain insurance, or otherwise)
in whole or in part.'';
(2) in subparagraph (B)(ii), as redesignated by subsection
(a)(2)(B)--
(A) by striking the first sentence and inserting the
following: ``A primary plan, and an entity that receives
payment from a primary plan, shall reimburse the appropriate
Trust Fund for any payment made by the Secretary under this
title with respect to an item or service if it is
demonstrated that such primary plan has or had a
responsibility to make payment with respect to such item or
service. A primary plan's responsibility for such payment may
be demonstrated by a judgment, a payment conditioned upon the
recipient's compromise, waiver, or release (whether or not
there is a determination or admission of liability) of
payment for items or services included in a claim against the
primary plan or the primary plan's insured, or by other
means.''; and
(B) in the final sentence, by striking ``on the date such
notice or other information is received'' and inserting ``on
the date notice of, or information related to, a primary
plan's responsibility for such payment or other information
is received''; and
(3) in subparagraph (B)(iii), , as redesignated by
subsection (a)(2)(B), by striking the first sentence and
inserting the following: ``In order to recover payment made
under this title for an item or service, the United States
may bring an action against any or all entities that are or
were required or responsible (directly, as an insurer or
self-insurer, as a third-party administrator, as an employer
that sponsors or contributes to a group health plan, or large
group health plan, or otherwise) to make payment with respect
to the same item or service (or any portion thereof) under a
primary plan. The United States may, in accordance with
paragraph (3)(A) collect double damages against any such
entity. In addition, the United States may recover under this
clause from any entity that has received payment from a
primary plan or from the proceeds of a primary plan's payment
to any entity.''.
(c) Clerical Amendments.--Section 1862(b) (42 U.S.C.
1395y(b)) is amended--
(1) in paragraph (1)(A), by moving the indentation of
clauses (ii) through (v) 2 ems to the left; and
(2) in paragraph (3)(A), by striking ``such'' before
``paragraphs''.

[[Page S8447]]

______

SA 1003. Mr. BROWNBACK (for himself and Mr. Nelson of Nebraska)
submitted an amendment intended to be proposed by him to the bill S. 1,
to amend title XVIII of the Social Security Act to make improvements in
the medicare program, to provide prescription drug coverage under the
medicare program, and for other purposes; which was ordered to lie on
the table; as follows:

At the end of title VI, insert the following:

SEC.  .RURAL COMMUNITY HOSPITAL ASSISTANCE.

(a) Establishment of Rural Community Hospital (RCH)
Program.
(1) In general.--Section 1861 (42 U.S.C. 1395x) is amended
by adding at the end of the following new subsection: ``Rural
Community Hospital; Rural Community Hospital Services
``(ww)(1) The term `rural community hospital' means a
hospital (as defined in subsection (e)) that--
``(A) is located in a rural area (as defined in section
1886(d)(2)(D)) or treated as being so located pursuant to
section 1886(d)(8)(E);
``(B) subject to paragraph (2), has less than 51 acute care
inpatient beds, as reported in its most recent cost report;
10
``(C) makes available 24-hour emergency care services;
``(D) subject to paragraph (3), has a provider agreement in
effect with the Secretary and is open to the public as of
January 1, 2003; and
``(E) applies to the Secretary for such designation.
``(2) For purposes of paragraph (1)(B), beds in a
psychiatric or rehabilitation unit of the hospital which is a
distinct part of the hospital shall not be counted.
``(3) Subparagraph (1)(D) shall not be construed to
prohibit any of the following from qualifying as a rural
community hospital:
``(A) A replacement facility (as defined by the Secretary
in regulations in effect on January 1, 2003) with the same
service area (as defined by the Secretary in regulations in
effect on such date).
``(B) A facility obtaining a new provider number pursuant
to a change of ownership.
``(C) A facility which has a binding written agreement with
an outside, unrelated party for the construction,
reconstruction, lease, rental, or financing of a building as
of January 1, 2003.
``(4) Nothing in this subsection shall be construed as
prohibiting a critical access hospital from qualifying as a
rural community hospital if the critical access hospital
meets the conditions otherwise applicable to hospitals under
subsection (e) and section 1866.''.
(2) Payment.--
(A) Inpatient services.--Section 1814 (42 U.S.C. 1395f) is
amended by adding at the end the following new subsection:
``Payment for Inpatient Services Furnished in Rural Community
Hospitals
``(m) The amount of payment under this part for inpatient
hospital services furnished in a rural community hospital,
other than such services furnished in a psychiatric or
rehabilitation unit of the hospital which is a distinct part,
is, at the election of the hospital in the application
referred to in section 1861(ww)(1)(E)--
``(1) the reasonable costs of providing such services,
without regard to the amount of the customary or other
charge, or
``(2) the amount of payment provided for under the
prospective payment system for inpatient hospital services
under section 1886(d).''.
(B) Outpatient services.--Section 1834 (42 U.S.C. 1395m) is
amended by amended by adding at the end the following new
subsection:
``(n) Payment for Outpatient Services Furnished in Rural
Community Hospitals.--The amount of payment under this part
for outpatient services furnished in a rural community
hospital is, at the election of the hospital in the
application referred to in section 1861(ww)(1)(E)--
``(1) the reasonable costs of providing such services,
without regard to the amount of the customary or other charge
and any limitation under section 1861(v)(1)(U), or
``(2) the amount of payment provided for under the
prospective payment system for covered OPD services under
section 1833(t).''.
(C) Home health services.--
(i) Exclusion from home health pps.--Section 1895 (42
U.S.C. 1395fff) is amended by adding at the end the
following:
``(f) Exclusion.--
``(1) In general.--In determining payments under this title
for home health services furnished on or after October 1,
2003, by a qualified RCH-based home health agency (as defined
in paragraph (2))--
``(A) the agency may make a one-time election to waive
application of the prospective payment system established
under this section to such services furnished by the agency
shall not apply; and
``(B) in the case of such an election, payment shall be
made on the basis of the reasonable costs incurred in
furnishing such services as determined under section 1861(v),
but without regard to the amount of the customary or other
charges with respect to such services or the limitations
established under paragraph (1)(L) of such section.
``(2) Qualified rch-based home health agency defined.--For
purposes of paragraph (1), a `qualified RCH-based home health
agency' is a home health agency that is a provider-based
entity (as defined in section 404 of the Medicare, Medicaid,
and SCHIP Benefits Improvement and Protection Act of 2000
(Public Law 106-554; Appendix F, 114 Stat. 2763A-506)) of a
rural community hospital that is located--
``(A) in a county in which no main or branch office of
another home health agency is located; or
``(B) at least 35 miles from any main or branch office of
another home health agency.''.
(ii) Conforming changes.--
(I) Payments under part a.--Section 1814(b) (42 U.S.C.
1395f(b)) is amended by inserting ``or with respect to
services to which section 1895(f) applies'' after
``equipment'' in the matter preceding paragraph (1).
(II) Payments under part b.--Section 1833(a)(2)(A) (42
U.S.C. 13951(a)(2)(A)) is amended by striking ``the
prospective payment system under''.
(III) Per visit limits.--Section 1861(v)(1)(L)(i) (42
U.S.C. 1395x(v)(1)(L)(i)) is amended by inserting ``(other
than by a qualified RCH-based home health agency (as defined
in section 1895(f)(2))'' after ``with respect to services
furnished by home health agencies''.
(iii) Consolidated billing.--
(I) Recipient of payment.--Section 1842(b)(6)(F) (42 U.S.C.
1395u(b)(6)(F)) is amended by inserting ``and excluding home
health services to which section 1895(f) applies'' after
``provided for in such section''.
(II) Exception to exclusion from coverage.--Section 1862(a)
(42 U.S.C. 1395y(a)) is amended by inserting before the
period at the end of the second sentence the following: ``and
paragraph (21) shall not apply to home health services to
which section 1895(f) applies''.
(D) Return on equity.--Section 1861(v)(1)(P) (42 U.S.C.
1395x(v)(1)(P)) is amended--
(i) by inserting ``(i)'' after ``(P)''; and
(ii) by adding at the end the following:
``(ii)(I) Notwithstanding clause (i), subparagraph (S)(i),
and section 1886(g)(2), such regulations shall provide, in
determining the reasonable costs of the services described in
subclause (II) furnished by a rural community hospital on or
after October 1, 2003, for payment of a return on equity
capital at a rate of return equal to 150 percent of the
average specified in clause (i).
``(11) The services referred to in subelause (I) are
inpatient hospital services, outpatient hospital services,
home health services furnished by an RCH-based home health
agency (as defined in section 1895(f)(2)), and ambulance
services.
``(III) Payment under this clause shall be made without
regard to whether a provider is a proprietary provider.''.
(E) Exemption from 30 percent reduction in reimbursement
for bad debt.--Section 1861(v)(1)(T) (42
U.S.C.1395x(v)(1)(T)) is amended by inserting ``(other than a
rural community hospital)'' after ``In determining such
reasonable costs for hospitals''.
(3) Beneficiary cost-sharing for outpatient services.--
Section 1834(n) (as added by paragraph (2)(B)) is amended--
(A) by inserting ``(1)'' after ``(n)''; and
(B) by adding at the end the following:
``(2) The amounts of beneficiary cost-sharing for
outpatient services furnished in a rural community hospital
under this part shall be as follows:
``(A) For items and services that would have been paid
under section 1833(t) if provided by a hospital, the amount
of cost-sharing determined under paragraph (8) of such
section.
``(B) For items and services that would have been paid
under section 1833(h) if furnished by a provider or supplier,
no cost-sharing shall apply.
``(C) For all other items and services, the amount of cost-
sharing that would apply to the item or service under the
methodology that would be used to determine payment for such
item or service if provided by a physician, provider, or
supplier, as the case may be.''.
(4) Conforming amendments.--
(A) Part a payment.--Section 1814(b) (42 U.S.C. 1395f(b))
is amended by inserting ``other than inpatient hospital
services furnished by a rural community hospital,'' after
``critical access hospital services,''.
(B) Part b payment.--
(i) In general.--Section 1833(a) (42 U.S.C. 13951(a)) is
amended--
(I) in paragraph (2), in the matter before subparagraph
(A), by striking ``and (I)'' and inserting ``(I), and (K)'';
(II) by striking ``and'' at the end of paragraph (8);
(III) by striking the period at the end of paragraph (9)
and inserting ``; and''; and
(IV) by adding at the end the following:
``(10) in the case of outpatient services furnished by a
rural community hospital, the amounts described in section
1834(n).''.
(ii) Ambulance services.--Section 1834(l)(8) (42 U.S.C.
1395m(1)(8)), as added by section 205 (a) of the Medicare,
Medicaid, and SCHIP Benefits Improvement and Protection Act
of 2000 (Appendix F, 114 Stat. 2763A-463), as enacted into
law by section 1(a)(6) of Public Law 106-554, is amended--
(I) in the heading, by striking ``CRITICAL ACCESS
HOSPITALS'' and inserting ``CERTAIN FACILITIES'';
(II) by striking ``or'' at the end of subparagraph (A);
(III) by redesignating subparagraph (B) as subparagraph
(C);
(IV) by inserting after subparagraph (A) the following new
subparagraph:
``(B) by a rural community hospital (as defined in section
1861(ww)(1)), or''; and (V) in subparagraph (C), as so
redesignated, by inserting ``or a rural community hospital''
after ``critical access hospital''.

[[Page S8448]]

(C) Technical amendments.--
(1) Consultation with state agencies.--Section 1863 (42
U.S.C. 1395z) is amended by striking ``and (dd)(2)'' and
inserting ``(dd)(2), (mm)(1), and (ww)(1)''.
(ii) Provider agreements.--Section 1866(a)(2)(A) (42 U.S.C.
1395cc(a)(2)(A)) is amended by inserting ``section
1834(n)(2),'' after ``section 1833(b),''.
(iii) BIPA amendment.--Paragraph (8) of section 1834(1) (42
U.S.C. 1395m(1)), as added by section 221 (a) of the
Medicare, Medicaid, and SCHIP Benefits Improvement and
Protection Act of 2000 (Appendix F, 114 Stat. 2763A-486), as
enacted into law by section 1(a)(6) of Public Law 106-554, is
redesignated as paragraph (9).
(5) Effective date.--The amendments made by this subsection
shall apply to items and services furnished on or after
October 1, 2003.
(b) Removing Barriers to Establishment of Distinct Part
Units by RCH and CAH Facilities.--
(1) In general.--Section 1886(d)(1)(B) (42 U.S.C.
1395ww(d)(1)(B)) is amended by striking ``a distinct part of
the hospital (as defined by the Secretary)'' in the matter
following clause (v) and inserting ``a distinct part (as
defined by the Secretary) of the hospital or of a critical
access hospital or a rural community hospital''.
(2) Effective date.--The amendment made by this subsection
shall apply to determinations with respect to distinct part
unit status that are made on or after October 1, 2003.
(c) Improvements to Medicare Critical Access Hospital (CAH)
Program.--
(1) Exclusion of certain beds from bed count.--Section
1820(c)(2) (42 U.S.C. 1395i-4(c)(2)) is amended by adding at
the end the following:
``(E) Exclusion of certain beds from bed count.--In
determining the number of beds of a facility for purposes of
applying the bed limitations referred to in subparagraph
(B)(iii) and subsection (f), the Secretary shall not take
into account any bed of a distinct part psychiatric or
rehabilitation unit (described in the matter following clause
(v) of section 1886(d)(1)(B)) of the facility, except that
the total number of beds that are not taken into account
pursuant to this subparagraph with respect to a facility
shall not exceed 10.''.
(2) Payments to home health agencies owned and operated by
a cah.--Section 1895(f) (42 U.S.C. 1395fff(f)), as added by
subsection (a)(2)(C), is further amended by inserting ``or by
a home health agency that is owned and operated by a critical
access hospital (as defined in section 1861(mm)(1))'' after
``as defined in paragraph (2))''.
(3) Payments to cah-owned snfs.--
(A) In general.--Section 1888(e)(42 U.S.C. 1395yy(e)) is
amended--
(i) in paragraph (1), by striking ``and (12)'' and
inserting ``(12), and (13)''; and
(ii) by adding at the end thereof the following:
``(13) Exemption of cah facilities from pps.--In
determining payments under this part for covered skilled
nursing facility services furnished on or after October 1,
2003, by a skilled nursing facility that is a distinct part
unit of a critical access hospital (as defined in section
1861(mm)(1)) or is owned and operated by a critical access
hospital--
``(A) the prospective payment system established under this
subsection shall not apply; and
``(B) payment shall be made on the basis of the reasonable
costs incurred in furnishing such services as determined
under section 1861(v), but without regard to the amount of
the customary or other charges with respect to such services
or the limitations established under subsection (a).''.
(B) Conforming changes.--
(i) In general.--Section 1814(b) (42 U.S.C. 1395f(b)), as
amended by subsection (a), is further amended in the matter
preceding paragraph (1)--
(I) by inserting ``other than a skilled nursing facility
providing covered skilled nursing facility services (as
defined in section 1888(e)(2)) or post hospital extended care
services to which section 1888(e)(13) applies,'' after
``inpatient critical access hospital services''; and
(II) by striking ``1813 1886,'' and inserting ``1813, 1886,
1888,''.
(i) Consolidated billing.--
(I) Recipient of payment.--Section 1842(b)(6)(E) (42 U.S.C.
1395u(b)(6)(E)) is amended by inserting ``services to which
paragraph (7)(C) or (13) of section 1888(e) applies and''
after ``other than''.
(II) Exception to exclusion from coverage.--Section
1862(a)(18) (42 U.S.C. 1395y(a)(18)) is amended by inserting
``(other than services to which paragraph (7)(C) or (13) of
section 1888(e) applies)'' after ``section
1888(e)(2)(A)(i)''.
(4) Payments to distinct part psychiatric or rehabilitation
units of cahs.--Section 1886(b) (42 U.S.C. 1395ww(b)) is
amended--
(A) in paragraph (1), by inserting ``, other than a
distinct part psychiatric or rehabilitation unit to which
paragraph (8) applies,'' after ``subsection (d)(1)(B)''; and
(B) by adding at the end the following:
``(8) Exemption of certain distinct part psychiatric or
rehabilitation units from cost limits.--In determining
payments under this part for inpatient hospital services
furnished on or after October 1, 2003, by a distinct part
psychiatric or rehabilitation unit (described in the matter
following clause (v) of subsection (d)(1)(B)) of a critical
access hospital (as defined in section 1861(mm)(1))--
``(A) the limits imposed under the preceding paragraphs of
this subsection shall not apply; and
``(B) payment shall be made on the basis of the reasonable
costs incurred in furnishing such services as determined
under section 1861(v), but without regard to the amount of
the customary or other charges with respect to such
services.''.
(5) Return on equity.--Section 1861(v)(1)(P) (42 U.S.C.
1395x(v)(1)(P)), as amended by subsection (a)(2)(D), is
further amended by adding at the end the following:
``(111)(I) Notwithstanding clause (i), subparagraph (S)(i),
and section 1886(8)(2), such regulations shall provide, in
determining the reasonable costs of the services described in
subclause (II) furnished by a critical access hospital on or
after October 1, 2003, for payment of a return on equity
capital at a rate of return equal to 150 percent of the
average specified in clause (i).
``(II) The services referred to in subclause (I) are
inpatient critical access hospital services (as defined in
section 1861(mm)(2)), outpatient critical access hospital
services (as defined in section 1861(mm)(3)), extended care
services provided pursuant to an agreement under section
1883, posthospital extended care services to which section
1888(e)(13) applies, home health services to which section
1895(f) applies, ambulance services to which section 1834(l)
applies, and inpatient hospital services to which section
1886(b)(8) applies.
``(III) Payment under this clause shall be made without
regard to whether a provider is a proprietary provider.''.
(6) Technical corrections.--
(A) Section 403(b) of bbra 1999.--Section 1820(b)(2) (42
U.S.C. 1395i-4(b)(2)) is amended by striking ``nonprofit or
public hospitals'' and inserting ``hospitals''.
(B) Section 203(b) of bipa 2000.--Section 1883(a)(3) (42
U.S.C. 1395tt(a)(3)) is amended--
(i) by inserting ``section 1861(v)(1)(G) or'' after
``Notwithstanding''; and
(ii) by striking ``covered skilled nursing facility''.
(9) Effective dates.--
(A) Elimination of requirements.--
The amendments made by paragraphs (1) and (2) shall apply
to services furnished on or after October 1, 2003.
(B) Technical corrections.--
(i) Bbra.--The amendment made by paragraph (6)(A) shall be
effective as if included in the enactment of section 403(b)
of the Medicare, Medicaid, and SCHIP Balanced Budget
Refinement Act of 1999 (Appendix F, 113 Stat. 1501A-321), as
enacted into law by section 1000(a)(6) of Public Law 106-113.
(ii) Bipa.--The amendments made by paragraph (6)(B) shall
be effective as if included in the enactment of section
203(b) of the Medicare, Medicaid, and SCHIP Benefits
Improvement and Protection Act of 2000 (Appendix F, 114 Stat.
2763A-463), as enacted into law by section 1(a)(6) of Public
Law 106-554.
______

SA 1004. Mrs. HUTCHISON proposed an amendment to the bill S. 1, to
amend title XVIII of the Social Security Act to make improvements in
the medicare program, to provide prescription drug coverage under the
medicare program, and for other purposes; as follows:

At the end of subtitle A of title IV, add the following:

SEC. ____. FREEZING INDIRECT MEDICAL EDUCATION (IME)
ADJUSTMENT PERCENTAGE AT 6.5 PERCENT.

(a) In General.--Section 1886(d)(5)(B)(ii) (42 U.S.C.
1395ww(d)(5)(B)(ii)) is amended--
(1) in subclause (VI), by striking ``and'' at the end; and
(2) by striking subclause (VII) and inserting the following
new subclauses:
``(VII) during fiscal years 2003, 2004, 2005, 2006, 2007
and 2008, `c' is equal to 1.35; and
``(VIII) on or after October 1, 2008, `c' is equal to
1.6.''.
(b) Conforming Amendment Relating to Determination of
Standardized Amount.--Section 1886(d)(2)(C)(i) (42 U.S.C.
1395ww(d)(2)(C)(i)) is amended--
(1) by striking ``1999 or'' and inserting ``1999,''; and
(2) by inserting ``, or the Prescription Drug and Medicare
Improvement Act of 2003'' after ``2000''.
______

SA 1005. Mr. SANTORUM submitted an amendment intended to be proposed
by him to the bill S. 1, to amend title XVIII of the Social Security
Act to make improvements in the medicare program, to provide
prescription drug coverage under the medicare program, and for other
purposes; which was ordered to lie on the table; as follows:

At the end of subtitle C of title II, add the following:

SEC. ____. EXTENSION OF PHASE-IN OF NEW RISK ADJUSTER.

(a) Under Medicare+Choice.--Section 1853(a)(3)(C)(ii) is
amended--
(1) in subclause (I), by striking ``2003'' and inserting
``2005'';
(2) in subclause (II), by striking ``2004'' and inserting
``2006'';
(3) in subclause (III), by striking ``2005'' and inserting
``2007'';
(4) in subclause (IV), by striking ``2006'' and inserting
``2008''; and
(5) in subclause (V), by striking ``2007'' and inserting
``2009''.

[[Page S8449]]

(b) Under MedicareAdvantage.--Section 1853(a)(3)(A) (42
U.S.C. 1395w-23(a)(3)(A)), as amended by section 203, is
amended to read as follows:
``(A) Application of methodology.--
``(i) In general.--The Secretary shall apply the
comprehensive risk adjustment methodology described in
subparagraph (B) to the applicable percentage of the amount
of payments to plans under subsection (d)(4)(B).
``(ii) Applicable percentage defined.--For purposes of
clause (i), the term `applicable percentage' means--

``(II) for 2006, 30 percent;
``(III) for 2007, 50 percent;
``(IV) for 2008, 75; and
``(V) for 2009 and each subsequent year, 100 percent.''.

(c) Effective Dates.--The amendments made--
(1) by subsection (a) shall take effect on the date of
enactment of this Act; and
(2) by subsection (b) shall apply to plan years beginning
on or after January 1, 2006.
______

SA 1006. Mr. SANTORUM submitted an amendment intended to be proposed
by him to the bill S. 1, to amend title XVIII of the Social Security
Act to make improvements in the medicare program, to provide
prescription drug coverage under the medicare program, and for other
purposes; which was ordered to lie on the table; as follows:

At the end of subtitle C of title II, add the following:

SEC. ____. REVISION OF REQUIREMENTS FOR REVIEW OF MARKETING
MATERIALS.

(a) Under Medicare+Choice and MedicareAdvantage.--Section
1851(h) (42 U.S.C. 1395w-21(h)) is amended--
(1) in paragraph (1)(A), by striking ``45 days (or 10 days
in the case described in paragraph (5))'' and inserting ``30
days (or 10 days in the case described in paragraph (5) or if
the Medicare+Choice organization has submitted to the
Secretary requested corrections following review of the
submitted material)''; and
(2) by striking paragraph (2) and inserting the following
new paragraph:
``(2) Review.--
``(A) In general.--Except as provided in subparagraph (B),
the standards established under section 1856 shall include
guidelines for the review of any material or form submitted
and under such guidelines the Secretary shall disapprove (or
later require the correction of) such material or form if the
material or form is materially inaccurate or misleading or
otherwise makes a material misrepresentation.
``(B) Exception.--Notwithstanding any other requirements of
section 1856(h), the Secretary shall establish policies that
permit, under appropriate circumstances, the distribution of
marketing materials by a Medicare+Choice organization prior
to review.''.
(b) Effective Date.--The amendments made by this section
shall take effect on the date of enactment of this Act and
shall apply to section 1851(h) of the Social Security Act (42
U.S.C. 1395w-21(h)) as in effect on such date and as amended
by section 201.
______

SA 1007. Mr. SANTORUM submitted an amendment intended to be proposed
by him to the bill S. 1, to amend title XVIII of the Social Security
Act to make improvements in the medicare program, to provide
prescription drug coverage under the medicare program, and for other
purposes; which was ordered to lie on the table; as follows:

At the end of subtitle C of title II, add the following:

SEC. ____. AUTHORIZATION OF DIRECT PAYMENTS TO PROVIDERS FOR
SERVICES PROVIDED TO MEDICARE ADVANTAGE
ENROLLEES PARTICIPATING IN MEDICARE COVERED
CLINICAL TRIALS.

(a) Under Medicare+Choice and MedicareAdvantage.--
(1) In general.--Section 1852(a)(1)(A) (42 U.S.C. 1395w-
22(a)(1)(A)) is amended by inserting ``and items and services
that are covered under part A or B as a result of a national
coverage determination for qualifying clinical trials'' after
``hospice care''.
(2) Payment.--Section 1853 (42 U.S.C. 1395w-23) is amended
by adding at the end the following new subsection:
``(j) Special Rule for Covered Costs Associated With
Qualifying Clinical Trials.--
``(1) Information.--The Medicare+Choice organization shall
inform each individual enrolled under this part with a
Medicare+Choice plan offered by the organization that the
medicare program covers certain costs associated with the
participation by a medicare beneficiary in a qualifying
clinical trial.
``(2) Payment.--If an individual who is enrolled with a
Medicare+Choice organization under this part participates in
a qualifying clinical trial, payment for the medicare covered
costs associated with that clinical trial shall be made by
the Secretary directly to the provider or supplier furnishing
such services.''.
(b) Effective Date.--The amendments made by this section
shall take effect on the date of enactment of this Act and
shall apply to sections 1852 and 1853 of the Social Security
Act (42 U.S.C. 1395w-22 and 1395w-23) as in effect on such
date and as amended by sections 202 and 203.
______

SA 1008. Mr. SANTORUM submitted an amendment intended to be proposed
by him to the bill S. 1, to amend title XVIII of the Social Security
Act to make improvements in the medicare program, to provide
prescription drug coverage under the medicare program, and for other
purposes; which was ordered to lie on the table; as follows:

On page 134, between lines 9 and 10, insert the following:
``(d) Zero Premium Stop-Loss Protection and Access to
Negotiated Prices For Certain Eligible Beneficiaries Enrolled
in the Original Medicare Fee-For-Service Program After
2013.--
``(1) In general.--Notwithstanding the preceding provisions
of this part, the following rules shall apply with respect to
an applicable eligible beneficiary enrolled in a Medicare
Prescription Drug plan or under a contract under section
1860D-13(e):
``(A) No premium.--Notwithstanding sections 1860D-13(e)(2)
and 1860D-17, the monthly beneficiary obligation for
enrollment in the Medicare Prescription Drug plan or under a
contract under section 1860D-13(e) shall be zero.
``(B) Beneficiary receives access to negotiated prices and
stop-loss protection for no additional premium.--
Notwithstanding section 1860D-6, qualified prescription drug
coverage shall include coverage of covered drugs that meets
the following requirements:
``(i) The coverage has cost-sharing (for costs up to the
annual out-of-pocket limit under subsection (c)(4) of such
section) that is equal to 100 percent.
``(ii) The coverage provides the limitation on out-of-
pocket expenditures under such subsection (c)(4).
``(ii) The coverage provides access to negotiated prices
under subsection (e) of such section during the entire year.
``(C) Application of low-income subsidies.--Notwithstanding
section 1860D-19, the Administrator shall not apply the
following provisions of subsection (a) of such section:
``(i) Subparagraphs (A), (B), (C), and (D) of paragraph
(1).
``(ii) Subparagraphs (A), (B), (C), and (D) of paragraph
(2).
``(iii) Clauses (i), (ii), (iii), and (iv) of paragraph
(3)(A).
``(2) Applicable eligible beneficiary.--For purposes of
this subsection, the term `applicable eligible beneficiary'
means an eligible beneficiary who--
``(A) is enrolled under this part; and
``(B) became an eligible beneficiary for the first time on
or after January 1, 2014.
``(3) Procedures.--The Administrator shall establish
procedures to carry out this subsection. Under such
procedures, the Administrator may waive or modify any of the
preceding provisions of this part to the extent necessary to
carry out this subsection.
``(4) No effect on beneficiaries enrolled in a
medicareadvantage plan that provides qualified prescription
drug coverage.--This subsection shall have no effect on
eligible beneficiaries enrolled in this part and under a
MedicareAdvantage plan that provides qualified prescription
drug coverage.''.
______

SA 1009. Mr. INOUYE (for himself and Mr. Akaka) submitted an
amendment intended to be proposed by him to the bill S. 1, to amend
title XVIII of the Social Security Act to make improvements in the
medicare program, to provide prescription drug coverage under the
medicare program, and for other purposes; which was ordered to lie on
the table; as follows:

At the end of title VI, add the following:

SEC. ____. 100 PERCENT FMAP FOR MEDICAL ASSISTANCE PROVIDED
TO A NATIVE HAWAIIAN THROUGH A FEDERALLY-
QUALIFIED HEALTH CENTER OR A NATIVE HAWAIIAN
HEALTH CARE SYSTEM UNDER THE MEDICAID PROGRAM.

(a) Medicaid.--Section 1905(b) of the Social Security Act
(42 U.S.C. 1396d(b)) is amended, in the third sentence, by
inserting ``, and with respect to medical assistance provided
to a Native Hawaiian (as defined in section 12 of the Native
Hawaiian Health Care Improvement Act) through a Federally-
qualified health center or a Native Hawaiian health care
system (as so defined) whether directly, by referral, or
under contract or other arrangement between a Federally-
qualified health center or a Native Hawaiian health care
system and another health care provider'' before the period.
(b) Effective Date.--The amendment made by this section
applies to medical assistance provided on or after the date
of enactment of this Act.
______

SA 1010. Mr. SUNUNU submitted an amendment intended to be proposed by
him to the bill S. 1, to amend title XVIII of the Social Security Act
to make improvements in the medicare program, to provide prescription
drug coverage under the medicare program, and for other purposes; as
follows:

At the end of subtitle B of title IV, add the following:

SEC. ____. IMPROVEMENT OF OUTPATIENT VISION SERVICES UNDER
PART B.

(a) Coverage Under Part B.--Section 1861(s)(2) (42 U.S.C.
1395x(s)(2)) is amended--

[[Page S8450]]

(1) in subparagraph (U), by striking ``and'' after the
semicolon at the end;
(2) in subparagraph (V)(iii), by adding ``and'' after the
semicolon at the end; and
(3) by adding at the end the following new subparagraph:
``(W) vision rehabilitation services (as defined in
subsection (ww)(1));''.
(b) Services Described.--Section 1861 (42 U.S.C. 1395x) is
amended by adding at the end the following new subsection:

``Vision Rehabilitation Services; Vision Rehabilitation Professional

``(ww)(1)(A) The term `vision rehabilitation services'
means rehabilitative services (as determined by the Secretary
in regulations) furnished--
``(i) to an individual diagnosed with a vision impairment
(as defined in paragraph (6));
``(ii) pursuant to a plan of care established by a
qualified physician (as defined in subparagraph (C)) or by a
qualified occupational therapist that is periodically
reviewed by a qualified physician;
``(iii) in an appropriate setting (including the home of
the individual receiving such services if specified in the
plan of care); and
``(iv) by any of the following individuals:
``(I) A qualified physician.
``(II) A qualified occupational therapist.
``(III) A vision rehabilitation professional (as defined in
paragraph (2)) while under the general supervision (as
defined in subparagraph (D)) of a qualified physician.
``(B) In the case of vision rehabilitation services
furnished by a vision rehabilitation professional, the plan
of care may only be established and reviewed by a qualified
physician.
``(C) The term `qualified physician' means--
``(i) a physician (as defined in subsection (r)(1)) who is
an ophthalmologist; or
``(ii) a physician (as defined in subsection (r)(4)
(relating to a doctor of optometry)).
``(D) The term `general supervision' means, with respect to
a vision rehabilitation professional, overall direction and
control of that professional by the qualified physician who
established the plan of care for the individual, but the
presence of the qualified physician is not required during
the furnishing of vision rehabilitation services by that
professional to the individual.
``(2) The term `vision rehabilitation professional' means
any of the following individuals:
``(A) An orientation and mobility specialist (as defined in
paragraph (3)).
``(B) A rehabilitation teacher (as defined in paragraph
(4)).
``(C) A low vision therapist (as defined in paragraph (5)).
``(3) The term `orientation and mobility specialist' means
an individual who--
``(A) if a State requires licensure or certification of
orientation and mobility specialists, is licensed or
certified by that State as an orientation and mobility
specialist;
``(B)(i) holds a baccalaureate or higher degree from an
accredited college or university in the United States (or an
equivalent foreign degree) with a concentration in
orientation and mobility; and
``(ii) has successfully completed 350 hours of clinical
practicum under the supervision of an orientation and
mobility specialist and has furnished not less than 9 months
of supervised full-time orientation and mobility services;
``(C) has successfully completed the national examination
in orientation and mobility administered by the Academy for
Certification of Vision Rehabilitation and Education
Professionals; and
``(D) meets such other criteria as the Secretary
establishes.
``(4) The term `rehabilitation teacher' means an individual
who--
``(A) if a State requires licensure or certification of
rehabilitation teachers, is licensed or certified by the
State as a rehabilitation teacher;
``(B)(i) holds a baccalaureate or higher degree from an
accredited college or university in the United States (or an
equivalent foreign degree) with a concentration in
rehabilitation teaching, or holds such a degree in a health
field; and
``(ii) has successfully completed 350 hours of clinical
practicum under the supervision of a rehabilitation teacher
and has furnished not less than 9 months of supervised full-
time rehabilitation teaching services;
``(C) has successfully completed the national examination
in rehabilitation teaching administered by the Academy for
Certification of Vision Rehabilitation and Education
Professionals; and
``(D) meets such other criteria as the Secretary
establishes.
``(5) The term `low vision therapist' means an individual
who--
``(A) if a State requires licensure or certification of low
vision therapists, is licensed or certified by the State as a
low vision therapist;
``(B)(i) holds a baccalaureate or higher degree from an
accredited college or university in the United States (or an
equivalent foreign degree) with a concentration in low vision
therapy, or holds such a degree in a health field; and
``(ii) has successfully completed 350 hours of clinical
practicum under the supervision of a physician, and has
furnished not less than 9 months of supervised full-time low
vision therapy services;
``(C) has successfully completed the national examination
in low vision therapy administered by the Academy for
Certification of Vision Rehabilitation and Education
Professionals; and
``(D) meets such other criteria as the Secretary
establishes.
``(6) The term `vision impairment' means vision loss that
constitutes a significant limitation of visual capability
resulting from disease, trauma, or a congenital or
degenerative condition that cannot be corrected by
conventional means, including refractive correction,
medication, or surgery, and that is manifested by 1 or more
of the following:
``(A) Best corrected visual acuity of less than 20/60, or
significant central field defect.
``(B) Significant peripheral field defect including
homonymous or heteronymous bilateral visual field defect or
generalized contraction or constriction of field.
``(C) Reduced peak contrast sensitivity in conjunction with
a condition described in subparagraph (A) or (B).
``(D) Such other diagnoses, indications, or other
manifestations as the Secretary may determine to be
appropriate.''.
(c) Payment Under Part B.--
(1) Physician fee schedule.--Section 1848(j)(3) (42 U.S.C.
1395w-4(j)(3)) is amended by inserting ``(2)(W),'' after
``(2)(S),''.
(2) Carve out from hospital outpatient department
prospective payment system.--Section 1833(t)(1)(B)(iv) (42
U.S.C. 1395l(t)(1)(B)(iv)) is amended by inserting ``vision
rehabilitation services (as defined in section 1861(ww)(1))
or'' after ``does not include''.
(3) Clarification of billing requirements.--The first
sentence of section 1842(b)(6) of such Act (42 U.S.C.
1395u(b)(6)) is amended--
(A) by striking ``and'' before ``(G)''; and
(B) by inserting before the period the following: ``, and
(H) in the case of vision rehabilitation services (as defined
in section 1861(ww)(1)) furnished by a vision rehabilitation
professional (as defined in section 1861(ww)(2)) while under
the general supervision (as defined in section
1861(ww)(1)(D)) of a qualified physician (as defined in
section 1861(ww)(1)(C)), payment shall be made to (i) the
qualified physician or (ii) the facility (such as a
rehabilitation agency, a clinic, or other facility) through
which such services are furnished under the plan of care if
there is a contractual arrangement between the vision
rehabilitation professional and the facility under which the
facility submits the bill for such services''.
(d) Plan of Care.--Section 1835(a)(2) (42 U.S.C.
1395n(a)(2)) is amended--
(1) in subparagraph (E), by striking ``and'' after the
semicolon at the end;
(2) in subparagraph (F), by striking the period at the end
and inserting ``; and''; and
(3) by inserting after subparagraph (F) the following new
subparagraph:
``(G) in the case of vision rehabilitation services, (i)
such services are or were required because the individual
needed vision rehabilitation services, (ii) an
individualized, written plan for furnishing such services has
been established (I) by a qualified physician (as defined in
section 1861(ww)(1)(C)), (II) by a qualified occupational
therapist, or (III) in the case of such services furnished by
a vision rehabilitation professional, by a qualified
physician, (iii) the plan is periodically reviewed by the
qualified physician, and (iv) such services are or were
furnished while the individual is or was under the care of
the qualified physician.''.
(e) Relationship to Rehabilitation Act of 1973.--The
provision of vision rehabilitation services under the
medicare program under title XVIII (42 U.S.C. 1395 et seq.)
shall not be taken into account for any purpose under the
Rehabilitation Act of 1973 (29 U.S.C. 701 et seq.).
(f) Effective Date.--
(1) Interim, final regulations.--The Secretary shall
publish a rule under this section in the Federal Register by
not later than 180 days after the date of enactment of this
Act to carry out the provisions of this section. Such rule
shall be effective and final immediately on an interim basis,
but is subject to change and revision after public notice and
opportunity for a period for public comment of not less than
60 days.
(2) Consultation.--The Secretary shall consult with the
National Vision Rehabilitation Cooperative, the Association
for Education and Rehabilitation of the Blind and Visually
Impaired, the Academy for Certification of Vision
Rehabilitation and Education Professionals, the American
Academy of Ophthalmology, the American Occupational Therapy
Association, the American Optometric Association, and such
other qualified professional and consumer organizations as
the Secretary determines appropriate in promulgating
regulations to carry out this section.
______

SA 1011. Mr. SESSIONS proposed an amendment to the bill S. 1, to
amend title XVIII of the Social Security Act to make improvements in
the medicare program, to provide prescription drug coverage under the
medicare program, and for other purposes; as follows:

Strike section 605 and insert the following:

SEC. 605. SENSE OF THE SENATE REGARDING HEALTH INSURANCE
COVERAGE OF LEGAL IMMIGRANTS UNDER MEDICAID AND
SCHIP.

Findings.--The Senate makes the following findings:
(1) In 1996, in the Personal Responsibility and Work
Opportunity Reconciliation Act of 1996 (Public Law 104-193;
110 Stat. 2105)(commonly referred to as the ``welfare

[[Page S8451]]

reform Act''), Congress deliberately limited the Federal
public benefits available to legal immigrants.
(2) The Personal Responsibility and Work Opportunity
Reconciliation Act of 1996 allows a State the option of
electing to offer permanent resident legal aliens that have
been living in the United States for at least 5 years the
same benefits that their State citizens receive under the
temporary assistance for needy families program (commonly
referred to as ``TANF'') and the medicaid program.
(3) As of the date of enactment of this Act, 22 States have
elected to give the permanent resident legal aliens who
reside in their States the same TANF and medicaid benefits as
the States provide to the citizens of their States.
(4) This Act, the Prescription Drug and Medicare
Improvement Act of 2003, is not a welfare or medicaid reform
bill, but rather is a package of improvements for the
medicare program that is designed to provide greater access
to health care for America's seniors.
(5) The section heading for 605 of this Act as reported out
of the Committee on Finance, was titled ``Assistance with
Coverage of Legal Immigrants under the medicaid program and
SCHIP,'' and, as reported, related directly to the provision
of benefits under the medicaid and State children's health
insurance programs, not to benefits provided under the
medicare program.
(6) The reported version of section 605 would have directly
overturned the reforms made in the 1996 welfare reform Act.
(7) The reported version of section 605 would have greatly
expanded the number of individuals who could receive benefits
under medicaid and SCHIP.
(8) No hearings have been held in the Committee on Finance
of the Senate concerning why the 5-year residency requirement
for legal aliens to obtain a Federal public benefit
established in the welfare reform Act needs to be overturned
or why the reported version of section 605 should be included
in a medicare reform package.
(9) Congress must reauthorize the temporary assistance for
needy families program later this year and should hold
hearings regarding whether the 5-year residency requirement
for legal aliens to obtain a Federal public benefit should be
overturned as part of the reauthorization of that program.
(b) Sense of the Senate.--It is the sense of the Senate
that the Committee on Finance of the Senate should hold
hearings in connection with the reauthorization of the
temporary assistance for needy families program, or in
connection with reform of the medicaid program, regarding
whether the 5-year residency requirement for legal aliens to
obtain a Federal public benefit that was established in the
1996 welfare reform Act should be overturned for purposes of
the medicaid and State children's health insurance programs.
______

SA 1012. Mr. HAGEL (for himself and Mr. Ensign) submitted an
amendment intended to be proposed by him to the bill S. 1, to amend
title XVIII of the Social Security Act to make improvements in the
medicare program, to provide prescription drug coverage under the
medicare program, and for other purposes; which was ordered to lie on
the table; as follows:

Title I is amended by adding at the end the following:

Subtitle E--Voluntary Medicare Prescription Drug Discount and Security
Program

SEC. 141. VOLUNTARY MEDICARE PRESCRIPTION DRUG DISCOUNT AND
SECURITY PROGRAM.

(a) Establishment of Program.--Title XVIII of the Social
Security Act (42 U.S.C. 1395 et seq.), as amended by section
101, is amended--
(1) by redesignating part E as part F; and
(2) by inserting after part D the following new part:

``Part E--Voluntary Medicare Prescription Drug Discount and Security
Program

``definitions

``Sec. 1860E. In this part:
``(1) Covered drug.--
``(A) In general.--Except as provided in this paragraph,
the term `covered drug' means--
``(i) a drug that may be dispensed only upon a prescription
and that is described in subparagraph (A)(i) or (A)(ii) of
section 1927(k)(2); or
``(ii) a biological product described in clauses (i)
through (iii) of subparagraph (B) of such section or insulin
described in subparagraph (C) of such section

,and such term includes a vaccine licensed under section 351
of the Public Health Service Act and any use of a covered
drug for a medically accepted indication (as defined in
section 1927(k)(6)).
``(B) Exclusions.--
``(i) In general.--Such term does not include drugs or
classes of drugs, or their medical uses, which may be
excluded from coverage or otherwise restricted under section
1927(d)(2), other than subparagraph (E) thereof (relating to
smoking cessation agents), or under section 1927(d)(3).
``(ii) Avoidance of duplicate coverage.--A drug prescribed
for an individual that would otherwise be a covered drug
under this part shall not be so considered if payment for
such drug is available under part A or B for an individual
entitled to benefits under part A and enrolled under part B.
``(C) Application of formulary restrictions.--A drug
prescribed for an individual that would otherwise be a
covered drug under this part shall not be so considered under
a plan if the plan excludes the drug under a formulary and
such exclusion is not successfully appealed under section
1860E-4(a)(4)(B).
``(D) Application of general exclusion provisions.--A
prescription drug discount card plan or MedicareAdvantage
plan may exclude from qualified prescription drug coverage
any covered drug--
``(i) for which payment would not be made if section
1862(a) applied to part E; or
``(ii) which are not prescribed in accordance with the plan
or this part.
Such exclusions are determinations subject to reconsideration
and appeal pursuant to section 1860E-4(a)(4).
``(2) Eligible beneficiary.--The term `eligible
beneficiary' means an individual who is--
``(A) eligible for benefits under part A or enrolled under
part B; and
``(B) not eligible for prescription drug coverage under a
State plan under the medicaid program under title XIX.
``(3) Eligible entity.--The term `eligible entity' means
any--
``(A) pharmaceutical benefit management company;
``(B) wholesale pharmacy delivery system;
``(C) retail pharmacy delivery system;
``(D) insurer (including any issuer of a medicare
supplemental policy under section 1882);
``(E) MedicareAdvantage organization;
``(F) State (in conjunction with a pharmaceutical benefit
management company);
``(G) employer-sponsored plan;
``(H) other entity that the Secretary determines to be
appropriate to provide benefits under this part; or
``(I) combination of the entities described in
subparagraphs (A) through (H).
``(4) Poverty line.--The term `poverty line' means the
income 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.
``(5) Secretary.--The term `Secretary' means the Secretary
of Health and Human Services, acting through the
Administrator of the Centers for Medicare & Medicaid
Services.

``establishment of program

``Sec. 1860E-1. (a) Provision of Benefit.--The Secretary
shall establish a Medicare Prescription Drug Discount and
Security Program under which the Secretary endorses
prescription drug card plans offered by eligible entities in
which eligible beneficiaries may voluntarily enroll and
receive benefits under this part. Notwithstanding any other
provision of this title, an eligible beneficiary may elect to
enroll in the program under this part in lieu of the program
established under part D. An eligible beneficiary may not be
enrolled under both this part and part D.
``(b) Endorsement of Prescription Drug Discount Card
Plans.--
``(1) In general.--The Secretary shall endorse a
prescription drug card plan offered by an eligible entity
with a contract under this part if the eligible entity meets
the requirements of this part with respect to that plan.
``(2) National plans.--In addition to other types of plans,
the Secretary may endorse national prescription drug plans
under paragraph (1).
``(c) Voluntary Nature of Program.--Nothing in this part
shall be construed as requiring an eligible beneficiary to
enroll in the program under this part.
``(d) Financing.--The costs of providing benefits under
this part shall be payable from the Federal Supplementary
Medical Insurance Trust Fund established under section 1841.

``enrollment

``Sec. 1860E-2. (a) Enrollment Under part E.--
``(1) Establishment of process.--
``(A) In general.--The Secretary shall establish a process
through which an eligible beneficiary (including an eligible
beneficiary enrolled in a MedicareAdvantage plan offered by a
MedicareAdvantage organization) may make an election to
enroll under this part. Except as otherwise provided in this
subsection, such process shall be similar to the process for
enrollment under part B under section 1837.
``(B) Requirement of enrollment.--An eligible beneficiary
must enroll under this part in order to be eligible to
receive the benefits under this part.
``(2) Enrollment periods.--
``(A) In general.--Except as provided in this paragraph, an
eligible beneficiary may not enroll in the program under this
part during any period after the beneficiary's initial
enrollment period under part B (as determined under section
1837).
``(B) Special enrollment period.--In the case of eligible
beneficiaries that have recently lost eligibility for
prescription drug coverage under a State plan under the
medicaid program under title XIX, the Secretary shall
establish a special enrollment period in

[[Page S8452]]

which such beneficiaries may enroll under this part.
``(C) Open enrollment period in 2005 for current
beneficiaries.--The Secretary shall establish a period, which
shall begin on the date on which the Secretary first begins
to accept elections for enrollment under this part, during
which any eligible beneficiary may--
``(i) enroll under this part; or
``(ii) enroll or reenroll under this part after having
previously declined or terminated such enrollment.
``(3) Period of coverage.--
``(A) In general.--Except as provided in subparagraph (B)
and subject to subparagraph (C), an eligible beneficiary's
coverage under the program under this part shall be effective
for the period provided under section 1838, as if that
section applied to the program under this part.
``(B) Enrollment during open and special enrollment.--
Subject to subparagraph (C), an eligible beneficiary who
enrolls under the program under this part under subparagraph
(B) or (C) of paragraph (2) shall be entitled to the benefits
under this part beginning on the first day of the month
following the month in which such enrollment occurs.
``(4) Part e coverage terminated by termination of coverage
under parts a and b or eligibility for medical assistance.--
``(A) In general.--In addition to the causes of termination
specified in section 1838, the Secretary shall terminate an
individual's coverage under this part if the individual is--
``(i) no longer enrolled in part A or B; or
``(ii) eligible for prescription drug coverage under a
State plan under the medicaid program under title XIX.
``(B) Effective date.--The termination described in
subparagraph (A) shall be effective on the effective date
of--
``(i) the termination of coverage under part A or (if
later) under part B; or
``(ii) the coverage under title XIX.
``(b) Enrollment With Eligible Entity.--
``(1) Process.--The Secretary shall establish a process
through which an eligible beneficiary who is enrolled under
this part shall make an annual election to enroll in a
prescription drug card plan offered by an eligible entity
that has been awarded a contract under this part and serves
the geographic area in which the beneficiary resides.
``(2) Election periods.--
``(A) In general.--Except as provided in this paragraph,
the election periods under this subsection shall be the same
as the coverage election periods under the MedicareAdvantage
program under section 1851(e), including--
``(i) annual coordinated election periods; and
``(ii) special election periods.

In applying the last sentence of section 1851(e)(4) (relating
to discontinuance of a MedicareAdvantage election during the
first year of eligibility) under this subparagraph, in the
case of an election described in such section in which the
individual had elected or is provided qualified prescription
drug coverage at the time of such first enrollment, the
individual shall be permitted to enroll in a prescription
drug card plan under this part at the time of the election of
coverage under the original fee-for-service plan.
``(B) Initial election periods.--
``(i) Individuals currently covered.--In the case of an
individual who is entitled to benefits under part A or
enrolled under part B as of November 1, 2005, there shall be
an initial election period of 6 months beginning on that
date.
``(ii) Individual covered in future.--In the case of an
individual who is first entitled to benefits under part A or
enrolled under part B after such date, there shall be an
initial election period which is the same as the initial
enrollment period under section 1837(d).
``(C) Additional special election periods.--The
Administrator shall establish special election periods--
``(i) in cases of individuals who have and involuntarily
lose prescription drug coverage described in paragraph (3);
``(ii) in cases described in section 1837(h) (relating to
errors in enrollment), in the same manner as such section
applies to part B; and
``(iii) in the case of an individual who meets such
exceptional conditions (including conditions provided under
section 1851(e)(4)(D)) as the Secretary may provide.
``(D) Enrollment with one plan only.--The rules established
under subparagraph (B) shall ensure that an eligible
beneficiary may only enroll in 1 prescription drug card plan
offered by an eligible entity per year.
``(3) Medicareadvantage enrollees.--An eligible beneficiary
who is enrolled under this part and enrolled in a
MedicareAdvantage plan offered by a MedicareAdvantage
organization must enroll in a prescription drug discount card
plan offered by an eligible entity in order to receive
benefits under this part. The beneficiary may elect to
receive such benefits through the MedicareAdvantage
organization in which the beneficiary is enrolled if the
organization has been awarded a contract under this part.
``(4) Continuous prescription drug coverage.--An individual
is considered for purposes of this part to be maintaining
continuous prescription drug coverage on and after the date
the individual first qualifies to elect prescription drug
coverage under this part if the individual establishes that
as of such date the individual is covered under any of the
following prescription drug coverage and before the date that
is the last day of the 63-day period that begins on the date
of termination of the particular prescription drug coverage
involved (regardless of whether the individual subsequently
obtains any of the following prescription drug coverage):
``(A) Coverage under prescription drug card plan or
medicareadvantage plan.--Prescription drug coverage under a
prescription drug card plan under this part or under a
MedicareAdvantage plan.
``(B) Medicaid prescription drug coverage.--Prescription
drug coverage under a medicaid plan under title XIX,
including through the Program of All-inclusive Care for the
Elderly (PACE) under section 1934, through a social health
maintenance organization (referred to in section 4104(c) of
the Balanced Budget Act of 1997), or through a
MedicareAdvantage project that demonstrates the application
of capitation payment rates for frail elderly medicare
beneficiaries through the use of a interdisciplinary team and
through the provision of primary care services to such
beneficiaries by means of such a team at the nursing facility
involved.
``(C) Prescription drug coverage under group health plan.--
Any prescription drug coverage under a group health plan,
including a health benefits plan under the Federal Employees
Health Benefit Plan under chapter 89 of title 5, United
States Code, and a qualified retiree prescription drug plan
(as defined by the Secretary), but only if (subject to
subparagraph (E)(ii)) the coverage provides benefits at least
equivalent to the benefits under a prescription drug card
plan under this part.
``(D) Prescription drug coverage under certain medigap
policies.--Coverage under a medicare supplemental policy
under section 1882 that provides benefits for prescription
drugs (whether or not such coverage conforms to the standards
for packages of benefits under section 1882(p)(1)) and if
(subject to subparagraph (E)(ii)) the coverage provides
benefits at least equivalent to the benefits under a
prescription drug card plan under this part.
``(E) State pharmaceutical assistance program.--Coverage of
prescription drugs under a State pharmaceutical assistance
program, but only if (subject to subparagraph (E)(ii)) the
coverage provides benefits at least equivalent to the
benefits under a prescription drug card plan under this part.
``(F) Veterans' coverage of prescription drugs.--Coverage
of prescription drugs for veterans under chapter 17 of title
38, United States Code, but only if (subject to subparagraph
(E)(ii)) the coverage provides benefits at least equivalent
to the benefits under a prescription drug card plan under
this part.

For purposes of carrying out this paragraph, the
certifications of the type described in sections 2701(e) of
the Public Health Service Act and in section 9801(e) of the
Internal Revenue Code of 1986 shall also include a statement
for the period of coverage of whether the individual involved
had prescription drug coverage described in this paragraph.
``(5) Competition.--Each eligible entity with a contract
under this part shall compete for the enrollment of
beneficiaries in a prescription drug card plan offered by the
entity on the basis of discounts, formularies, pharmacy
networks, and other services provided for under the contract.

``providing enrollment and coverage information to beneficiaries

``Sec. 1860E-3. (a) Activities.--The Secretary shall
provide for activities under this part to broadly disseminate
information to eligible beneficiaries (and prospective
eligible beneficiaries) regarding enrollment under this part
and the prescription drug card plans offered by eligible
entities with a contract under this part.
``(b) Special Rule for First Enrollment Under the
Program.--To the extent practicable, the activities described
in subsection (a) shall ensure that eligible beneficiaries
are provided with such information at least 60 days prior to
the first enrollment period described in section 1860E-2(c).

``enrollee protections

``Sec. 1860E-4. (a) Requirements for All Eligible
Entities.--Each eligible entity shall meet the following
requirements:
``(1) Guaranteed issuance and nondiscrimination.--
``(A) Guaranteed issuance.--
``(i) In general.--An eligible beneficiary who is eligible
to enroll in a prescription drug card plan offered by an
eligible entity under section 1860E-2(b) for prescription
drug coverage under this part at a time during which
elections are accepted under this part with respect to the
coverage shall not be denied enrollment based on any health
status-related factor (described in section 2702(a)(1) of the
Public Health Service Act) or any other factor.
``(ii) Medicareadvantage limitations permitted.--The
provisions of paragraphs (2) and (3) (other than subparagraph
(C)(i), relating to default enrollment) of section 1851(g)
(relating to priority and limitation on termination of
election) shall apply to eligible entities under this
subsection.
``(B) Nondiscrimination.--An eligible entity offering
prescription drug coverage under this part shall not
establish a service area in a manner that would discriminate
based on health or economic status of potential enrollees.

[[Page S8453]]

``(2) Disclosure of information.--
``(A) Information.--
``(i) General information.--Each eligible entity with a
contract under this part to provide a prescription drug card
plan shall disclose, in a clear, accurate, and standardized
form to each eligible beneficiary enrolled in a prescription
drug discount card program offered by such entity under this
part at the time of enrollment and at least annually
thereafter, the information described in section 1852(c)(1)
relating to such prescription drug coverage.
``(ii) Specific information.--In addition to the
information described in clause (i), each eligible entity
with a contract under this part shall disclose the following:

``(I) How enrollees will have access to covered drugs,
including access to such drugs through pharmacy networks.
``(II) How any formulary used by the eligible entity
functions.
``(III) Information on grievance and appeals procedures.
``(IV) Information on enrollment fees and prices charged to
the enrollee for covered drugs.
``(V) Any other information that the Secretary determines
is necessary to promote informed choices by eligible
beneficiaries among eligible entities.

``(B) Disclosure upon request of general coverage,
utilization, and grievance information.--Upon request of an
eligible beneficiary, the eligible entity shall provide the
information described in paragraph (3) to such beneficiary.
``(C) Response to beneficiary questions.--Each eligible
entity offering a prescription drug discount card plan under
this part shall have a mechanism for providing specific
information to enrollees upon request. The entity shall make
available, through an Internet website and, upon request, in
writing, information on specific changes in its formulary.
``(3) Grievance mechanism, coverage determinations, and
reconsiderations.--
``(A) In general.--With respect to the benefit under this
part, each eligible entity offering a prescription drug
discount card plan shall provide meaningful procedures for
hearing and resolving grievances between the organization
(including any entity or individual through which the
eligible entity provides covered benefits) and enrollees with
prescription drug card plans of the eligible entity under
this part in accordance with section 1852(f).
``(B) Application of coverage determination and
reconsideration provisions.--Each eligible entity shall meet
the requirements of paragraphs (1) through (3) of section
1852(g) with respect to covered benefits under the
prescription drug card plan it offers under this part in the
same manner as such requirements apply to a MedicareAdvantage
organization with respect to benefits it offers under a
MedicareAdvantage plan under part C.
``(C) Request for review of tiered formulary
determinations.--In the case of a prescription drug card plan
offered by an eligible entity that provides for tiered cost-
sharing for drugs included within a formulary and provides
lower cost-sharing for preferred drugs included within the
formulary, an individual who is enrolled in the plan may
request coverage of a nonpreferred drug under the terms
applicable for preferred drugs if the prescribing physician
determines that the preferred drug for treatment of the same
condition is not as effective for the individual or has
adverse effects for the individual.
``(4) Appeals.--
``(A) In general.--Subject to subparagraph (B), each
eligible entity offering a prescription drug card plan shall
meet the requirements of paragraphs (4) and (5) of section
1852(g) with respect to drugs not included on any formulary
in the same manner as such requirements apply to a
MedicareAdvantage organization with respect to benefits it
offers under a MedicareAdvantage plan under part C.
``(B) Formulary determinations.--An individual who is
enrolled in a prescription drug card plan offered by an
eligible entity may appeal to obtain coverage under this part
for a covered drug that is not on a formulary of the eligible
entity if the prescribing physician determines that the
formulary drug for treatment of the same condition is not as
effective for the individual or has adverse effects for the
individual.
``(5) Confidentiality and accuracy of enrollee records.--
Each eligible entity offering a prescription drug discount
card plan shall meet the requirements of the Health Insurance
Portability and Accountability Act of 1996.
``(b) Eligible Entities Offering a Discount Card Program.--
If an eligible entity offers a discount card program under
this part, in addition to the requirements under subsection
(a), the entity shall meet the following requirements:
``(1) Access to covered benefits.--
``(A) Assuring pharmacy access.--
``(i) In general.--The eligible entity offering the
prescription drug discount card plan shall secure the
participation in its network of a sufficient number of
pharmacies that dispense (other than by mail order) drugs
directly to patients to ensure convenient access (as
determined by the Secretary and including adequate emergency
access) for enrolled beneficiaries, in accordance with
standards established under section 1860E-4(a)(3) that ensure
such convenient access.
``(ii) Use of point-of-service system.--Each eligible
entity offering a prescription drug discount card plan shall
establish an optional point-of-service method of operation
under which--

``(I) the plan provides access to any or all pharmacies
that are not participating pharmacies in its network; and
``(II) discounts under the plan may not be available.

The additional copayments so charged shall not be counted as
out-of-pocket expenses for purposes of section 1860E-6(b).
``(B) Use of standardized technology.--
``(i) In general.--Each eligible entity offering a
prescription drug discount card plan shall issue (and
reissue, as appropriate) such a card (or other technology)
that may be used by an enrolled beneficiary to assure access
to negotiated prices under section 1860E-6(a) for the
purchase of prescription drugs for which coverage is not
otherwise provided under the prescription drug discount card
plan.
``(ii) Standards.--The Secretary shall provide for the
development of national standards relating to a standardized
format for the card or other technology referred to in clause
(i). Such standards shall be compatible with standards
established under part C of title XI.
``(C) Requirements on development and application of
formularies.--If an eligible entity that offers a
prescription drug discount card plan uses a formulary, the
following requirements must be met:
``(i) Pharmacy and therapeutic (p&t) committee.--The
eligible entity must establish a pharmacy and therapeutic
committee that develops and reviews the formulary. Such
committee shall include at least 1 physician and at least 1
pharmacist both with expertise in the care of elderly or
disabled persons and a majority of its members shall consist
of individuals who are a physician or a practicing pharmacist
(or both).
``(ii) Formulary development.--In developing and reviewing
the formulary, the committee shall base clinical decisions on
the strength of scientific evidence and standards of
practice, including assessing peer-reviewed medical
literature, such as randomized clinical trials,
pharmacoeconomic studies, outcomes research data, and such
other information as the committee determines to be
appropriate.
``(iii) Inclusion of drugs in all therapeutic categories.--
The formulary must include drugs within each therapeutic
category and class of covered drugs (although not necessarily
for all drugs within such categories and classes).
``(iv) Provider education.--The committee shall establish
policies and procedures to educate and inform health care
providers concerning the formulary.
``(v) Notice before removing drugs from formulary.--Any
removal of a drug from a formulary shall take effect only
after appropriate notice is made available to beneficiaries
and physicians.
``(vi) Grievances and appeals relating to application of
formularies.--For provisions relating to grievances and
appeals of coverage, see paragraphs (3) and (4) of section
1860E-4(a).
``(2) Cost and utilization management; quality assurance;
medication therapy management program.--
``(A) In general.--Each eligible entity offering a
prescription drug discount card plan shall have in place with
respect to covered drugs--
``(i) an effective cost and drug utilization management
program, including medically appropriate incentives to use
generic drugs and therapeutic interchange, when appropriate;
``(ii) quality assurance measures and systems to reduce
medical errors and adverse drug interactions, including a
medication therapy management program described in
subparagraph (B); and
``(iii) a program to control fraud, abuse, and waste.

Nothing in this section shall be construed as impairing an
eligible entity from applying cost management tools
(including differential payments) under all methods of
operation.
``(B) Medication therapy management program.--
``(i) In general.--A medication therapy management program
described in this paragraph is a program of drug therapy
management and medication administration that is designed to
ensure, with respect to beneficiaries with chronic diseases
(such as diabetes, asthma, hypertension, and congestive heart
failure) or multiple prescriptions, that covered drugs under
the prescription drug discount card plan are appropriately
used to achieve therapeutic goals and reduce the risk of
adverse events, including adverse drug interactions.
``(ii) Elements.--Such program may include--

``(I) enhanced beneficiary understanding of such
appropriate use through beneficiary education, counseling,
and other appropriate means;
``(II) increased beneficiary adherence with prescription
medication regimens through medication refill reminders,
special packaging, and other appropriate means; and
``(III) detection of patterns of overuse and underuse of
prescription drugs.

``(iii) Development of program in cooperation with licensed
pharmacists.--The program shall be developed in cooperation
with licensed pharmacists and physicians.

[[Page S8454]]

``(iv) Considerations in pharmacy fees.--Each eligible
entity offering a prescription drug discount card plan shall
take into account, in establishing fees for pharmacists and
others providing services under the medication therapy
management program, the resources and time used in
implementing the program.
``(C) Treatment of accreditation.--Section 1852(e)(4)
(relating to treatment of accreditation) shall apply to
prescription drug discount card plans under this part with
respect to the following requirements, in the same manner as
they apply to MedicareAdvantage plans under part C with
respect to the requirements described in a clause of section
1852(e)(4)(B):
``(i) Paragraph (1) (including quality assurance),
including any medication therapy management program under
paragraph (2).
``(ii) Subsection (c)(1) (relating to access to covered
benefits).
``(iii) Subsection (g) (relating to confidentiality and
accuracy of enrollee records).
``(D) Public disclosure of pharmaceutical prices for
equivalent drugs.--Each eligible entity offering a
prescription drug discount card plan shall provide that each
pharmacy or other dispenser that arranges for the dispensing
of a covered drug shall inform the beneficiary at the time of
purchase of the drug of any differential between the price of
the prescribed drug to the enrollee and the price of the
lowest cost drug covered under the plan that is
therapeutically equivalent and bioequivalent.

``annual enrollment fee

``Sec. 1860E-5. (a) Amount.--
``(1) In general.--Except as provided in subsection (c),
enrollment under the program under this part is conditioned
upon payment of an annual enrollment fee of $25.
``(2) Annual percentage increase.--
``(A) In general.--In the case of any calendar year
beginning after 2006, the dollar amount in paragraph (1)
shall be increased by an amount equal to--
``(i) such dollar amount; multiplied by
``(ii) the inflation adjustment.
``(B) Inflation adjustment.--For purposes of subparagraph
(A)(ii), the inflation adjustment for any calendar year is
the percentage (if any) by which--
``(i) the average per capita aggregate expenditures for
covered drugs in the United States for medicare
beneficiaries, as determined by the Secretary for the 12-
month period ending in July of the previous year; exceeds
``(ii) such aggregate expenditures for the 12-month period
ending with July 2005.
``(C) Rounding.--If any increase determined under clause
(ii) is not a multiple of $1, such increase shall be rounded
to the nearest multiple of $1.
``(b) Collection of Annual Enrollment Fee.--
``(1) In general.--Unless the eligible beneficiary makes an
election under paragraph (2), the annual enrollment fee
described in subsection (a) shall be collected and credited
to the Federal Supplementary Medical Insurance Trust Fund in
the same manner as the monthly premium determined under
section 1839 is collected and credited to such Trust Fund
under section 1840.
``(2) Direct payment.--An eligible beneficiary may elect to
pay the annual enrollment fee directly or in any other manner
approved by the Secretary. The Secretary shall establish
procedures for making such an election.
``(c) Waiver.--The Secretary shall waive the enrollment fee
described in subsection (a) in the case of an eligible
beneficiary whose income is below 200 percent of the poverty
line.

``benefits under the program

``Sec. 1860E-6. (a) Access to Negotiated Prices.--
``(1) Negotiated prices.--
``(A) In general.--Subject to subparagraph (B), each
prescription drug card plan offering a discount card program
by an eligible entity with a contract under this part shall
provide each eligible beneficiary enrolled in such plan with
access to negotiated prices (including applicable discounts)
for such prescription drugs as the eligible entity determines
appropriate. Such discounts may include discounts for
nonformulary drugs. If such a beneficiary becomes eligible
for the catastrophic benefit under subsection (b), the
negotiated prices (including applicable discounts) shall
continue to be available to the beneficiary for those
prescription drugs for which payment may not be made under
section 1860E-8(b). For purposes of this subparagraph, the
term `prescription drugs' is not limited to covered drugs,
but does not include any over-the-counter drug that is not a
covered drug.
``(B) Limitations.--
``(i) Formulary restrictions.--Insofar as an eligible
entity with a contract under this part uses a formulary, the
negotiated prices (including applicable discounts) for
nonformulary drugs may differ.
``(ii) Avoidance of duplicate coverage.--The negotiated
prices (including applicable discounts) for prescription
drugs shall not be available for any drug prescribed for an
eligible beneficiary if payment for the drug is available
under part A or B (but such negotiated prices shall be
available if payment under part A or B is not available
because the beneficiary has not met the deductible or has
exhausted benefits under part A or B).
``(2) Discount card.--The Secretary shall develop a uniform
standard card format to be issued by each eligible entity
offering a prescription drug discount card plan that shall be
used by an enrolled beneficiary to ensure the access of such
beneficiary to negotiated prices under paragraph (1).
``(3) Ensuring discounts in all areas.--The Secretary shall
develop procedures that ensure that each eligible beneficiary
that resides in an area where no prescription drug discount
card plans are available is provided with access to
negotiated prices for prescription drugs (including
applicable discounts).
``(b) Catastrophic Benefit.--
``(1) Ten percent cost-sharing.--Subject to any formulary
used by the prescription drug discount card program in which
the eligible beneficiary is enrolled, the catastrophic
benefit shall provide benefits with cost-sharing that is
equal to 10 percent of the negotiated price (taking into
account any applicable discounts) of each drug dispensed to
such beneficiary after the beneficiary has incurred costs (as
described in paragraph (3)) for covered drugs in a year equal
to the applicable annual out-of-pocket limit specified in
paragraph (2).
``(2) Annual out-of-pocket limits.--For purposes of this
part, the annual out-of-pocket limits specified in this
paragraph are as follows:
``(A) Beneficiaries with annual incomes below 200 percent
of the poverty line.--In the case of an eligible beneficiary
whose income (as determined under section 1860E-9) is below
200 percent of the poverty line, the annual out-of-pocket
limit is equal to $1,500.
``(B) Beneficiaries with annual incomes between 200 and 400
percent of the poverty line.--In the case of an eligible
beneficiary whose income (as so determined) equals or exceeds
200 percent, but does not exceed 400 percent, of the poverty
line, the annual out-of-pocket limit is equal to $3,500.
``(C) Beneficiaries with annual incomes between 400 and 600
percent of the poverty line.--In the case of an eligible
beneficiary whose income (as so determined) equals or exceeds
400 percent, but does not exceed 600 percent, of the poverty
line, the annual out-of-pocket limit is equal to $5,500.
``(D) Beneficiaries with annual incomes that exceed 600
percent of the poverty line.--In the case of an eligible
beneficiary whose income (as so determined) equals or exceeds
600 percent of the poverty line, the annual out-of-pocket
limit is an amount equal to 20 percent of that beneficiary's
income for that year (rounded to the nearest multiple of $1).
``(3) Application.--In applying paragraph (2), incurred
costs shall only include those expenses for covered drugs
that are incurred by the eligible beneficiary using a card
approved by the Secretary under this part that are paid by
that beneficiary and for which the beneficiary is not
reimbursed (through insurance or otherwise) by another
person.
``(4) Annual percentage increase.--
``(A) In general.--In the case of any calendar year after
2005, the dollar amounts in subparagraphs (A), (B), and (C)
of paragraph (2) shall be increased by an amount equal to--
``(i) such dollar amount; multiplied by
``(ii) the inflation adjustment determined under section
1860E-5(a)(2)(B) for such calendar year.
``(B) Rounding.--If any increase determined under
subparagraph (A) is not a multiple of $1, such increase shall
be rounded to the nearest multiple of $1.
``(5) Eligible entity not at financial risk for
catastrophic benefit.--
``(A) In general.--The Secretary, and not the eligible
entity, shall be at financial risk for the provision of the
catastrophic benefit under this subsection.
``(B) Provisions relating to payments to eligible
entities.--For provisions relating to payments to eligible
entities for administering the catastrophic benefit under
this subsection, see section 1860E-8.
``(6) Ensuring catastrophic benefit in all areas.--The
Secretary shall develop procedures for the provision of the
catastrophic benefit under this subsection to each eligible
beneficiary that resides in an area where there are no
prescription drug discount card plans offered that have been
awarded a contract under this part.

``requirements for entities to provide prescription drug coverage

``Sec. 1860E-7. (a) Establishment of Bidding Process.--The
Secretary shall establish a process under which the Secretary
accepts bids from eligible entities and awards contracts to
the entities to provide the benefits under this part to
eligible beneficiaries in an area.
``(b) Submission of Bids.--Each eligible entity desiring to
enter into a contract under this part shall submit a bid to
the Secretary at such time, in such manner, and accompanied
by such information as the Secretary may require.
``(c) Administrative Fee Bid.--
``(1) Submission.--For the bid described in subsection (b),
each entity shall submit to the Secretary information
regarding administration of the discount card and
catastrophic benefit under this part.
``(2) Bid submission requirements.--
``(A) Administrative fee bid submission.--In submitting
bids, the entities shall include separate costs for
administering the discount card component, if applicable, and
the catastrophic benefit. The entity shall submit the
administrative fee bid in a form and manner specified by the
Secretary, and shall include a statement of projected
enrollment and a separate statement of the projected
administrative costs for at least the following functions:

[[Page S8455]]

``(i) Enrollment, including income eligibility
determination.
``(ii) Claims processing.
``(iii) Quality assurance, including drug utilization
review.
``(iv) Beneficiary and pharmacy customer service.
``(v) Coordination of benefits.
``(vi) Fraud and abuse prevention.
``(B) Negotiated administrative fee bid amounts.--The
Secretary has the authority to negotiate regarding the bid
amounts submitted. The Secretary may reject a bid if the
Secretary determines it is not supported by the
administrative cost information provided in the bid as
specified in subparagraph (A).
``(C) Payment to plans based on administrative fee bid
amounts.--The Secretary shall use the bid amounts to
calculate a benchmark amount consisting of the enrollment-
weighted average of all bids for each function and each class
of entity. The class of entity is either a regional or
national entity, or such other classes as the Secretary may
determine to be appropriate. The functions are the discount
card and catastrophic components. If an eligible entity's
combined bid for both functions is above the combined
benchmark within the entity's class for the functions, the
eligible entity shall collect additional necessary revenue
through 1 or both of the following:
``(i) Additional fees charged to the beneficiary, not to
exceed $25 annually.
``(ii) Use of rebate amounts from drug manufacturers to
defray administrative costs.
``(d) Awarding of Contracts.--
``(1) In general.--The Secretary shall, consistent with the
requirements of this part and the goal of containing medicare
program costs, award at least 2 contracts in each area,
unless only 1 bidding entity meets the terms and conditions
specified by the Secretary under paragraph (2).
``(2) Terms and conditions.--The Secretary shall not award
a contract to an eligible entity under this section unless
the Secretary finds that the eligible entity is in compliance
with such terms and conditions as the Secretary shall
specify.
``(3) Requirements for eligible entities providing discount
card program.--Except as provided in subsection (e), in
determining which of the eligible entities that submitted
bids that meet the terms and conditions specified by the
Secretary under paragraph (2) to award a contract, the
Secretary shall consider whether the bid submitted by the
entity meets at least the following requirements:
``(A) Level of savings to medicare beneficiaries.--The
program passes on to medicare beneficiaries who enroll in the
program discounts on prescription drugs, including discounts
negotiated with manufacturers.
``(B) Prohibition on application only to mail order.--The
program applies to drugs that are available other than solely
through mail order and provides convenient access to retail
pharmacies.
``(C) Level of beneficiary services.--The program provides
pharmaceutical support services, such as education and
services to prevent adverse drug interactions.
``(D) Adequacy of information.--The program makes available
to medicare beneficiaries through the Internet and otherwise
information, including information on enrollment fees, prices
charged to beneficiaries, and services offered under the
program, that the Secretary identifies as being necessary to
provide for informed choice by beneficiaries among endorsed
programs.
``(E) Extent of demonstrated experience.--The entity
operating the program has demonstrated experience and
expertise in operating such a program or a similar program.
``(F) Extent of quality assurance.--The entity has in place
adequate procedures for assuring quality service under the
program.
``(G) Operation of assistance program.--The entity meets
such requirements relating to solvency, compliance with
financial reporting requirements, audit compliance, and
contractual guarantees as specified by the Secretary.
``(H) Privacy compliance.--The entity implements policies
and procedures to safeguard the use and disclosure of program
beneficiaries' individually identifiable health information
in a manner consistent with the Federal regulations
(concerning the privacy of individually identifiable health
information) promulgated under section 264(c) of the Health
Insurance Portability and Accountability Act of 1996.
``(I) Additional beneficiary protections.--The program
meets such additional requirements as the Secretary
identifies to protect and promote the interest of medicare
beneficiaries, including requirements that ensure that
beneficiaries are not charged more than the lower of the
negotiated retail price or the usual and customary price.

The prices negotiated by a prescription drug discount card
program endorsed under this section shall (notwithstanding
any other provision of law) not be taken into account for the
purposes of establishing the best price under section
1927(c)(1)(C).
``(4) Beneficiary access to savings and rebates.--The
Secretary shall require eligible entities offering a discount
card program to pass on savings and rebates negotiated with
manufacturers to eligible beneficiaries enrolled with the
entity.
``(5) Negotiated agreements with employer-sponsored
plans.--Notwithstanding any other provision of this part, the
Secretary may negotiate agreements with employer-sponsored
plans under which eligible beneficiaries are provided with a
benefit for prescription drug coverage that is more generous
than the benefit that would otherwise have been available
under this part if such an agreement results in cost savings
to the Federal Government.
``(e) Requirements for Other Eligible Entities.--An
eligible entity that is licensed under State law to provide
the health insurance benefits under this section shall be
required to meet the requirements of subsection (d)(3). If an
eligible entity offers a national plan, such entity shall not
be required to meet the requirements of subsection (d)(3),
but shall meet the requirements of Employee Retirement Income
Security Act of 1974 that apply with respect to such plan.

``payments to eligible entities for administering the catastrophic
benefit

``Sec. 1860E-8. (a) In General.--The Secretary may
establish procedures for making payments to an eligible
entity under a contract entered into under this part for--
``(1) the costs of providing covered drugs to beneficiaries
eligible for the benefit under this part in accordance with
subsection (b) minus the amount of any cost-sharing collected
by the eligible entity under section 1860E-6(b); and
``(2) costs incurred by the entity in administering the
catastrophic benefit in accordance with section 1860E-7.
``(b) Payment for Covered Drugs.--
``(1) In general.--Except as provided in subsection (c) and
subject to paragraph (2), the Secretary may only pay an
eligible entity for covered drugs furnished by the eligible
entity to an eligible beneficiary enrolled with such entity
under this part that is eligible for the catastrophic benefit
under section 1860E-6(b).
``(2) Limitations.--
``(A) Formulary restrictions.--Insofar as an eligible
entity with a contract under this part uses a formulary, the
Secretary may not make any payment for a covered drug that is
not included in such formulary, except to the extent provided
under section 1860E-4(a)(4)(B).
``(B) Negotiated prices.--The Secretary may not pay an
amount for a covered drug furnished to an eligible
beneficiary that exceeds the negotiated price (including
applicable discounts) that the beneficiary would have been
responsible for under section 1860E-6(a) or the price
negotiated for insurance coverage under the MedicareAdvantage
program under part C, a medicare supplemental policy,
employer-sponsored coverage, or a State plan.
``(C) Cost-sharing limitations.--An eligible entity may not
charge an individual enrolled with such entity who is
eligible for the catastrophic benefit under this part any
copayment, tiered copayment, coinsurance, or other cost-
sharing that exceeds 10 percent of the cost of the drug that
is dispensed to the individual.
``(3) Payment in competitive areas.--In a geographic area
in which 2 or more eligible entities offer a plan under this
part, the Secretary may negotiate an agreement with the
entity to reimburse the entity for costs incurred in
providing the benefit under this part on a capitated basis.
``(c) Secondary Payer Provisions.--The provisions of
section 1862(b) shall apply to the benefits provided under
this part.

``determination of income levels

``Sec. 1860E-9. (a) Determination of Income Levels.--
``(1) In general.--The Secretary shall establish procedures
under which each eligible entity awarded a contract under
this part determines the income levels of eligible
beneficiaries enrolled in a prescription drug card plan
offered by that entity at least annually for purposes of
sections 1860E-5(c) and 1860E-6(b).
``(2) Procedures.--The procedures established under
paragraph (1) shall require each eligible beneficiary to
submit such information as the eligible entity requires to
make the determination described in paragraph (1).
``(b) Enforcement of Income Determinations.--The Secretary
shall--
``(1) establish procedures that ensure that eligible
beneficiaries comply with sections 1860E-5(c) and 1860E-6(b);
and
``(2) require, if the Secretary determines that payments
were made under this part to which an eligible beneficiary
was not entitled, the repayment of any excess payments with
interest and a penalty.
``(c) Quality Control System.--
``(1) Establishment.--The Secretary shall establish a
quality control system to monitor income determinations made
by eligible entities under this section and to produce
appropriate and comprehensive measures of error rates.
``(2) Periodic audits.--The Inspector General of the
Department of Health and Human Services shall conduct
periodic audits to ensure that the system established under
paragraph (1) is functioning appropriately.

``appropriations

``Sec. 1860E-10. There are authorized to be appropriated
from time to time, out of any moneys in the Treasury not
otherwise appropriated, to the Federal Supplementary Medical
Insurance Trust Fund established under section 1841, an
amount equal to the amount by which the benefits and
administrative costs of providing the benefits under this
part exceed the enrollment fees collected under section
1860E-5.

[[Page S8456]]

``medicare competition and prescription drug advisory board

``Sec. 1860E-11. (a) Establishment of Board.--There is
established a Medicare Prescription Drug Advisory Board (in
this section referred to as the `Board').
``(b) Advice on Policies; Reports.--
``(1) Advice on policies.--The Board shall advise the
Secretary on policies relating to the Voluntary Medicare
Prescription Drug Discount and Security Program under this
part.
``(2) Reports.--
``(A) In general.--With respect to matters of the
administration of the program under this part, the Board
shall submit to Congress and to the Secretary such reports as
the Board determines appropriate. Each such report may
contain such recommendations as the Board determines
appropriate for legislative or administrative changes to
improve the administration of the program under this part.
Each such report shall be published in the Federal Register.
``(B) Maintaining independence of board.--The Board shall
directly submit to Congress reports required under
subparagraph (A). No officer or agency of the United States
may require the Board to submit to any officer or agency of
the United States for approval, comments, or review, prior to
the submission to Congress of such reports.
``(c) Structure and Membership of the Board.--
``(1) Membership.--The Board shall be composed of 7 members
who shall be appointed as follows:
``(A) Presidential appointments.--
``(i) In general.--Three members shall be appointed by the
President, by and with the advice and consent of the Senate.
``(ii) Limitation.--Not more than 2 such members may be
from the same political party.
``(B) Senatorial appointments.--Two members (each member
from a different political party) shall be appointed by the
President pro tempore of the Senate with the advice of the
Chairman and the Ranking Minority Member of the Committee on
Finance of the Senate.
``(C) Congressional appointments.--Two members (each member
from a different political party) shall be appointed by the
Speaker of the House of Representatives, with the advice of
the Chairman and the Ranking Minority Member of the Committee
on Ways and Means of the House of Representatives.
``(2) Qualifications.--The members shall be chosen on the
basis of their integrity, impartiality, and good judgment,
and shall be individuals who are, by reason of their
education, experience, and attainments, exceptionally
qualified to perform the duties of members of the Board.
``(3) Composition.--Of the members appointed under
paragraph (1)--
``(A) at least 1 shall represent the pharmaceutical
industry;
``(B) at least 1 shall represent physicians;
``(C) at least 1 shall represent medicare beneficiaries;
``(D) at least 1 shall represent practicing pharmacists;
and
``(E) at least 1 shall represent eligible entities.
``(d) Terms of Appointment.--
``(1) In general.--Subject to paragraph (2), each member of
the Board shall serve for a term of 6 years.
``(2) Continuance in office and staggered terms.--
``(A) Continuance in office.--A member appointed to a term
of office after the commencement of such term may serve under
such appointment only for the remainder of such term.
``(B) Staggered terms.--The terms of service of the members
initially appointed under this section shall begin on January
1, 2006, and expire as follows:
``(i) Presidential appointments.--The terms of service of
the members initially appointed by the President shall expire
as designated by the President at the time of nomination, 1
each at the end of--

``(I) 2 years;
``(II) 4 years; and
``(III) 6 years.

``(ii) Senatorial appointments.--The terms of service of
members initially appointed by the President pro tempore of
the Senate shall expire as designated by the President pro
tempore of the Senate at the time of nomination, 1 each at
the end of--

``(I) 3 years; and
``(II) 6 years.

``(iii) Congressional appointments.--The terms of service
of members initially appointed by the Speaker of the House of
Representatives shall expire as designated by the Speaker of
the House of Representatives at the time of nomination, 1
each at the end of--

``(I) 4 years; and
``(II) 5 years.

``(C) Reappointments.--Any person appointed as a member of
the Board may not serve for more than 8 years.
``(D) Vacancies.--Any member appointed to fill a vacancy
occurring before the expiration of the term for which the
member's predecessor was appointed shall be appointed only
for the remainder of that term. A member may serve after the
expiration of that member's term until a successor has taken
office. A vacancy in the Board shall be filled in the manner
in which the original appointment was made.
``(e) Chairperson.--A member of the Board shall be
designated by the President to serve as Chairperson for a
term of 4 years or, if the remainder of such member's term is
less than 4 years, for such remainder.
``(f) Expenses and Per Diem.--Members of the Board shall
serve without compensation, except that, while serving on
business of the Board away from their homes or regular places
of business, members may be allowed travel expenses,
including per diem in lieu of subsistence, as authorized by
section 5703 of title 5, United States Code, for persons in
the Government employed intermittently.
``(g) Meetings.--
``(1) In general.--The Board shall meet at the call of the
Chairperson (in consultation with the other members of the
Board) not less than 4 times each year to consider a specific
agenda of issues, as determined by the Chairperson in
consultation with the other members of the Board.
``(2) Quorum.--Four members of the Board (not more than 3
of whom may be of the same political party) shall constitute
a quorum for purposes of conducting business.
``(h) Federal Advisory Committee Act.--The Board shall be
exempt from the provisions of the Federal Advisory Committee
Act (5 U.S.C. App.).
``(i) Personnel.--
``(1) Staff director.--The Board shall, without regard to
the provisions of title 5, United States Code, relating to
the competitive service, appoint a Staff Director who shall
be paid at a rate equivalent to a rate established for the
Senior Executive Service under section 5382 of title 5,
United States Code.
``(2) Staff.--
``(A) In general.--The Board may employ, without regard to
chapter 31 of title 5, United States Code, such officers and
employees as are necessary to administer the activities to be
carried out by the Board.
``(B) Flexibility with respect to civil service laws.--
``(i) In general.--The staff of the Board shall be
appointed without regard to the provisions of title 5, United
States Code, governing appointments in the competitive
service, and, subject to clause (ii), shall be paid without
regard to the provisions of chapters 51 and 53 of such title
(relating to classification and schedule pay rates).
``(ii) Maximum rate.--In no case may the rate of
compensation determined under clause (i) exceed the rate of
basic pay payable for level IV of the Executive Schedule
under section 5315 of title 5, United States Code.
``(j) Authorization of Appropriations.--There are
authorized to be appropriated, out of the Federal
Supplemental Medical Insurance Trust Fund established under
section 1841, and the general fund of the Treasury, such sums
as are necessary to carry out the purposes of this
section.''.
(b) Conforming References to Previous part E.--
(1) In general.--Any reference in law (in effect before the
date of enactment of this Act) to part E of title XVIII of
the Social Security Act is deemed a reference to part F of
such title (as in effect after such date).
(2) Secretarial submission of legislative proposal.--Not
later than 6 months after the date of enactment of this
section, the Secretary of Health and Human Services shall
submit to the appropriate committees of Congress a
legislative proposal providing for such technical and
conforming amendments in the law as are required by the
provisions of this section.
(c) Effective Date.--
(1) In general.--The amendment made by subsection (a) shall
take effect on the date of enactment of this Act.
(2) Implementation.--Notwithstanding any provision of part
E of title XVIII of the Social Security Act (as added by
subsection (a)), the Secretary of Health and Human Services
shall implement the Voluntary Medicare Prescription Drug
Discount and Security Program established under such part in
a manner such that--
(A) benefits under such part for eligible beneficiaries (as
defined in section 1860E of such Act, as added by such
subsection) with annual incomes below 200 percent of the
poverty line (as defined in such section) are available to
such beneficiaries not later than the date that is 6 months
after the date of enactment of this Act; and
(B) benefits under such part for other eligible
beneficiaries are available to such beneficiaries not later
than the date that is 1 year after the date of enactment of
this Act.

SEC. 102. ADMINISTRATION OF VOLUNTARY MEDICARE PRESCRIPTION
DRUG DISCOUNT AND SECURITY PROGRAM.

(a) Establishment of Center for Medicare Prescription
Drugs.--There is established, within the Centers for Medicare
& Medicaid Services of the Department of Health and Human
Services, a Center for Medicare Prescription Drugs. Such
Center shall be separate from the Center for Beneficiary
Choices, the Center for Medicare Management, and the Center
for Medicaid and State Operations.
(b) Duties.--It shall be the duty of the Center for
Medicare Prescription Drugs to administer the Voluntary
Medicare Prescription Drug Discount and Security Program
established under part E of title XVIII of the Social
Security Act (as added by section 101).
(c) Director.--
(1) Appointment.--There shall be in the Center for Medicare
Prescription Drugs a Director of Medicare Prescription Drugs,
who shall be appointed by the President, by and with the
advice and consent of the Senate.

[[Page S8457]]

(2) Responsibilities.--The Director shall be responsible
for the exercise of all powers and the discharge of all
duties of the Center for Medicare Prescription Drugs and
shall have authority and control over all personnel and
activities thereof.
(d) Personnel.--The Director of the Center for Medicare
Prescription Drugs may appoint and terminate such personnel
as may be necessary to enable the Center for Medicare
Prescription Drugs to perform its duties.

SEC. 103. EXCLUSION OF PART E COSTS FROM DETERMINATION OF
PART B MONTHLY PREMIUM.

Section 1839(g) of the Social Security Act (42 U.S.C.
1395r(g)) is amended--
(1) by striking ``attributable to the application of
section'' and inserting ``attributable to--
``(1) the application of section'';
(2) by striking the period and inserting ``; and''; and
(3) by adding at the end the following new paragraph:
``(2) the Voluntary Medicare Prescription Drug Discount and
Security Program under part E.''.

SEC. 104. MEDIGAP REVISIONS.

Section 1882 of the Social Security Act (42 U.S.C. 1395ss)
is amended by adding at the end the following new subsection:
``(v) Modernization of Medicare Supplemental Policies.--
``(1) Promulgation of model regulation.--
``(A) NAIC model regulation.--If, within 9 months after the
date of enactment of the Prescription Drug and Medicare
Improvement Act of 2003, the National Association of
Insurance Commissioners (in this subsection referred to as
the `NAIC') changes the 1991 NAIC Model Regulation (described
in subsection (p)) to revise the benefit package classified
as `J' under the standards established by subsection (p)(2)
(including the benefit package classified as `J' with a high
deductible feature, as described in subsection (p)(11)) so
that--
``(i) the coverage for prescription drugs available under
such benefit package is replaced with coverage for
prescription drugs that complements but does not duplicate
the benefits for prescription drugs that beneficiaries are
otherwise entitled to under this title;
``(ii) a uniform format is used in the policy with respect
to such revised benefits; and
``(iii) such revised standards meet any additional
requirements imposed by the Prescription Drug and Medicare
Improvement Act of 2003;

subsection (g)(2)(A) shall be applied in each State,
effective for policies issued to policy holders on and after
January 1, 2006, as if the reference to the Model Regulation
adopted on June 6, 1979, were a reference to the 1991 NAIC
Model Regulation as changed under this subparagraph (such
changed regulation referred to in this section as the `2006
NAIC Model Regulation').
``(B) Regulation by the secretary.--If the NAIC does not
make the changes in the 1991 NAIC Model Regulation within the
9-month period specified in subparagraph (A), the Secretary
shall promulgate, not later than 9 months after the end of
such period, a regulation and subsection (g)(2)(A) shall be
applied in each State, effective for policies issued to
policy holders on and after January 1, 2006, as if the
reference to the Model Regulation adopted on June 6, 1979,
were a reference to the 1991 NAIC Model Regulation as changed
by the Secretary under this subparagraph (such changed
regulation referred to in this section as the `2006 Federal
Regulation').
``(C) Consultation with working group.--In promulgating
standards under this paragraph, the NAIC or Secretary shall
consult with a working group similar to the working group
described in subsection (p)(1)(D).
``(D) Modification of standards if medicare benefits
change.--If benefits under part E of this title are changed
and the Secretary determines, in consultation with the NAIC,
that changes in the 2006 NAIC Model Regulation or 2006
Federal Regulation are needed to reflect such changes, the
preceding provisions of this paragraph shall apply to the
modification of standards previously established in the same
manner as they applied to the original establishment of such
standards.
``(2) Construction of benefits in other medicare
supplemental policies.--Nothing in the benefit packages
classified as `A' through `I' under the standards established
by subsection (p)(2) (including the benefit package
classified as `F' with a high deductible feature, as
described in subsection (p)(11)) shall be construed as
providing coverage for benefits for which payment may be made
under part E.
``(3) Application of provisions and conforming
references.--
``(A) Application of provisions.--The provisions of
paragraphs (4) through (10) of subsection (p) shall apply
under this section, except that--
``(i) any reference to the model regulation applicable
under that subsection shall be deemed to be a reference to
the applicable 2006 NAIC Model Regulation or 2006 Federal
Regulation; and
``(ii) any reference to a date under such paragraphs of
subsection (p) shall be deemed to be a reference to the
appropriate date under this subsection.
``(B) Other references.--Any reference to a provision of
subsection (p) or a date applicable under such subsection
shall also be considered to be a reference to the appropriate
provision or date under this subsection.''.
______

SA 1013. Mr. BOND (for himself and Mr. Roberts) submitted an
amendment intended to be proposed by him to the bill S. 1, to amend
title XVIII of the Social Security Act to make improvements in the
medicare program, to provide prescription drug coverage under the
medicare program, and for other purposes; which was ordered to lie on
the table; as follows:

At the appropriate place, insert the following:

SEC. ____. COMMITTEE ON DRUG COMPOUNDING.

(a) Establishment.--The Secretary of Health and Human
Services shall establish an Committee on Drug Compounding
(referred to in this section as the ``Committee'') within the
Food and Drug Administration on drug compounding to ensure
that patients are receiving necessary, safe and accurate
dosages of compounded drugs.
(b) Membership.--The membership of the Advisory Committee
shall be appointed by the Secretary of Health and Human
Services and shall include representatives of--
(1) the National Association of Boards of Pharmacy;
(2) pharmacy groups;
(3) physician groups;
(4) consumer and patient advocate groups;
(5) the United States Pharmacopoeia; and
(6) other individuals determined appropriate by the
Secretary.
(c) Report and Recommendations.--Not later than 1 year
after the date of enactment of this Act, the Committee shall
submit to the Secretary a report concerning the
recommendations of the Committee to improve and protect
patient safety.
(d) Termination.--The Committee shall terminate on the date
that is 1 year after the date of enactment of this Act.
______

SA 1014. Mr. BOND submitted an amendment intended to be proposed by
him to the bill S. 1, to amend title XVIII of the Social Security Act
to make improvements in the medicare program, to provide prescription
drug coverage under the medicare program, and for other purposes; which
was ordered to lie on the table; as follows:

On page 483, line 7, strike ``and'' and insert ``, pharmacy
services, and''.
______

SA 1015. Mr. DODD submitted an amendment intended to be proposed by
him to the bill S. 1, to amend title XVIII of the Social Security Act
to make improvements in the medicare program, to provide prescription
drug coverage under the medicare program, and for other purposes; which
was ordered to lie on the table; as follows:

At the end of title VI, insert the following:

SEC. ____. STUDY ON MAKING PRESCRIPTION PHARMACEUTICAL
INFORMATION ACCESSIBLE FOR BLIND AND VISUALLY-
IMPAIRED INDIVIDUALS.

(a) Study.--
(1) In general.--The Secretary of Health and Human Services
shall undertake a study of how to make prescription
pharmaceutical information, including drug labels and usage
instructions, accessible to blind and visually-impaired
individuals.
(2) Study to include existing and emerging technologies.--
The study under paragraph (1) shall include a review of
existing and emerging technologies, including assistive
technology, that makes essential information on the content
and prescribed use of pharmaceutical medicines available in a
usable format for blind and visually-impaired individuals.
(b) Report.--
(1) In general.--Not later than 18 months after the date of
the enactment of this Act, the Secretary of Health and Human
Services shall submit a report to Congress on the study
required under subsection (a).
(2) Contents of report.--The report required under
subsection (a) shall include recommendations for the
implementation of usable formats for making prescription
pharmaceutical information available to blind and visually-
impaired individuals and an estimate of the costs associated
with the implementation of each format.
______

SA 1016. Mrs. CLINTON submitted an amendment intended to be proposed
by her to the bill S. 1, to amend title XVIII of the Social Security
Act to make improvements in the medicare program, to provide
prescription drug coverage under the medicare program, and for other
purposes; which was ordered to lie on the table; as follows:

On page 654, after line 18 and before the amendment to the
title, insert the following:

SEC. ____. INFORMATION TECHNOLOGY.

(a) Improving Clinical Practices.--
(1) Telemedicine.--
(A) Licensing.--Section 1834(m)(4)(C)(i) (42 U.S.C.
1395m(m)(4)(C)(i)) is amended--
(i) in subclause (II), by striking ``or'' at the end;
(ii) in subclause (III), by striking the period and
inserting ``; or''; and
(iii) by adding at the end the following:

``(IV) in a State in which the respective State medical
board has adopted a formal

[[Page S8458]]

policy regarding licensing or certification requirements for
providers at distant sites who do not have a license to
practice medicine at the originating site.''.

(B) Expanding eligibility for reimbursement.--Section
1834(m)(4)(C)(i)(I) (42 U.S.C. 1395m(m)(4)(C)(i)(I)) is
amended by striking ``rural''.
(2) NIH trials to study impact of technology on cost and
quality of health care.--
(A) Findings.--Congress makes the following findings:
(i) An estimated 80,000 to 100,000 patients die every year
from errors suffered during hospitalization.
(ii) Many of these errors could have been avoided with
changes to the system of health care delivery.
(iii) These systemwide changes have the potential to
decrease the cost of providing health care and to increase
the quality of services provided.
(iv) These improvements in cost and quality can be as
dramatic as improvements seen with new technology or
pharmaceutical advances.
(v) Currently new medical devices and medications undergo
rigorous randomized controlled clinical trials to document
their effect on a patient's health.
(vi) These clinical trials form the basis for providers to
practice evidence-based medicine and to change their
practices to improve their patients' outcomes.
(vii) Similar controlled clinical studies of systems-based
approaches to changing practice, if available, can help
providers implement systems-based measures to improve
outcomes.
(B) Research on systems-based approaches to changing
clinical practice.--Part B of title IV of the Public Health
Service Act (42 U.S.C. 284 et seq.) is amended by adding at
the end the following:

``SEC. 409J. RESEARCH ON SYSTEMS-BASED APPROACHES TO CHANGING
CLINICAL PRACTICE.

``(a) Establishment.--The Secretary shall establish within
the Office of the Director of NIH a Medical Systems Safety
Initiative (referred to in this section as the `Initiative')
to conduct and support research regarding systems-based
approaches to improving and advancing medical care. The
Initiative shall be headed by the Director of NIH (referred
to in this section as the `Director').
``(b) Purpose.--The purpose of the Initiative is to enable
the Director of NIH--
``(1) to conduct and support basic and applied research
(including both intramural and extramural research), research
training, the dissemination of health information, and other
programs with respect to systems research, user-centered
design, and human factors engineering within the National
Institutes of Health to realize the expanding opportunities
for improving health outcomes through the analysis and
redesign of medical systems;
``(2) to enhance collaborative efforts among the Institutes
to conduct and support multidisciplinary research in the
areas that the Director determines to be most promising; and
``(3) to encourage and support clinical studies to provide
scientifically and statistically rigorous and meaningful
information about the utility and effectiveness of various
systems-based interventions.
``(c) Appropriate Scientific Expertise and Coordination
With Institutes and Federal Agencies.--The Director of NIH,
after consultation with the Division of Research Grants,
shall ensure that scientists with appropriate expertise in
research on health systems, user-centered design, and human
factors engineering are incorporated into the review,
oversight, and management processes of all research projects
and other activities funded by the Initiative. In carrying
out this subsection, the Director, as necessary, may
establish review groups with appropriate scientific
expertise. The Director shall coordinate efforts with other
Institutes and Federal agencies to ensure appropriate
scientific input and management.
``(d) Ensuring High Quality, Rigorous Scientific Review.--
In order to ensure high quality, rigorous scientific review
with respect to the Initiative, the Director of NIH shall
conduct or support the following activities:
(1) Outcomes research and investigations.
(2) Epidemiological studies on the incidence and prevalence
of various systems, practices, and processes within the
health care system and their effect on health outcomes, both
beneficial and harmful.
(3) Health services research.
(4) Basic science research.
(5) Clinical trials.
(6) Other appropriate research and investigational
activities.''.
(b) Improving and Promoting Electronic Medical Records.--
(1) Authentication standards.--The Director of the National
Center for Vital and Health Statistics shall provide
assistance to the Secretary of Health and Human Services in
the development of authentication standards for health
records. In developing such standards, the Secretary shall
take into consideration the following:
(A) Recommendations for authentication technology and
identification information standards that--
(i) provide for the reliable identification and retrieval
of a patient's electronic medical data;
(ii) allow the patient to have detailed control over the
access of individual components of his or her electronic
medical record by being able to specify specific providers,
each of whom will have access to limited portions of the
electronic medical record;
(iii) minimize security risks, including the potential
for--

(I) the patient to misrepresent his or her true identity;
(II) a health care provider to access data for which the
patient has not consented to grant such access;
(III) a third party to access identification information;
or
(IV) a third party to circumvent or exploit the
authentication process in order to access electronic medical
data without the consent of the patient;

(iv) allow for the timely and convenient creation of
identification information at the time of contact between a
patient and a provider, so as to minimize any disruption or
delay in the provision of needed medical services to a
patient who does not already have identification information;
and
(v) maximize the probability of accurate identification,
secure authentication, and rapid access to medical data even
in situations where the patient--

(I) does not possess the identification information that is
usually required for successful authentication, but wishes to
grant consent to the provider to access necessary medical
data;
(II) possesses the identification information but is not
able to provide consent for the emergency access of medical
data due to incapacitation; and
(III) is not able to provide identification information nor
consent for emergency data access due to incapacitation.

(2) Personal health record.--
(A) Federal health information exchange standards
initiative.--The Secretary of Health and Human Services, the
Secretary of Defense, and the Secretary of Veterans' Affairs,
in carrying out activities under the Federal e-Goverment
Health Information Exchange Standards Initiative, shall
jointly recommend standards for the implementation of
personal health records that--
(i) includes the capability for patients to append to their
electronic record information about--

(I) illnesses for which the patient did not seek
professional medical care; and
(II) health information not related to a specific disease,
episode, or illness; and

(ii) provides convenient access to the individual's full
electronic medical record.
(B) Medical translation research.--
(i) In general.--The Director of the National Science
Foundation shall award grants to public and nonprofit private
entities for the conduct of basic research on innovative
approaches to improve patients' understanding and
comprehension of their electronic medical record. Research
areas may include technology for the automated--

(I) translation of medical information to language more
easily understandable by the patient;
(II) reorganization of the electronic medical record into a
structure more useful to the patient; and
(III) integration of links to relevant information from
other sources into the electronic medical record.

(ii) Merit review; competition.--Grants shall be awarded
under this subparagraph on a merit-reviewed competitive
basis.
(iii) Authorization of appropriations.--There are
authorized to be appropriated to the National Science
Foundation to carry out this subparagraph--

(I) $5,000,000 for fiscal year 2004;
(II) $10,000,000 for fiscal year 2005; and
(III) $15,000,000 for fiscal year 2006 and each fiscal year
thereafter.

(3) Definitions.--In this subsection:
(A) Identification information.--The term ``identification
information'' with respect to the medical records of a
patient, means the data necessary to identify the patient.
(B) Authentication.--The term ``authentication'' means the
process of using the identification information to validate
the patient's identification and gain access to his or her
electronic medical data.
(c) Improving Information Technology Infrastructure in the
Basic Life Sciences.--Not later than 18 months after the date
of enactment of this Act, the Director of the National
Institute of General Medical Sciences shall submit to
Congress a report on the activities of the Biomedical
Information Science and Technology Initiative. Such report
shall include--
(1) a description of current activities of the Biomedical
Information Science and Technology Initiative Consortium;
(2) a summary of recently completed and ongoing grant
programs; and
(3) recommendations for the further advancement of the
Biomedical Information Science and Technology Initiative and
bioinformatics and computational biology research in general.
(d) Improving Education and Training.--Subpart 3 of part D
of title IV of the Public Health Service Act (42 U.S.C. 286c
et seq.) is amended by adding at the end the following:

``SEC. 478B. CERTIFICATION OF INFORMATION WEBSITES.

``(a) In General.--The National Information Center on
Health Services Research and Health Care Technology (in this
section referred to as the `Center') shall develop a
voluntary certification program for health information
websites on the Internet. As part of such program, websites
shall be deemed to

[[Page S8459]]

be certified if they meet criteria that includes the
following:
``(1) The website provides references to peer-reviewed
rigorous scientific research for any conclusions or
recommendations that it advocates.
``(2) The website is easy to navigate and comprehend by a
general audience that does not have any specific medical
training.
``(3) The website accommodates, to the maximum extent
practicable, cultural, language, and literacy variation among
its target audience.
``(b) Limitation.--In determining whether a website meets
criteria for certification under the program under subsection
(a), the Center may not consider--
``(1) the specific nature of the conclusions or
recommendations of the website themselves, so long as they
meet criteria for evidence as specified in subsection (a)(1);
and
``(2) the person or organization responsible for the
website.
``(c) Period Recertification.--In establishing the program
under subsection (a), the Center shall develop a policy for
the periodic expiration and renewal of certifications so as
to ensure that websites are reviewed on a periodic basis for
compliance with the criteria of certification.
``(d) Seal.--The Center shall develop a seal or marker that
can be used by a website that is certified under the program
under subsection (a) to indicate to its audience that the
website has obtained the Center's certification.
``(e) Fee.--The Center may assess an application fee for
websites in order to cover the costs of evaluating the
website.''.
______

SA 1017. Mr. ALLARD (for himself, Mr. Fitzgerald, and Ms. Collins)
submitted an amendment intended to be proposed by him to the bill S. 1,
to amend title XVIII of the Social Security Act to make improvements in
the medicare program, to provide prescription drug coverage under the
medicare program, and for other purposes; which was ordered to lie on
the table; as follows:

At the end of title VI, insert the following:

SEC. ____. TEMPORARY SUSPENSION OF OASIS REQUIREMENT FOR
COLLECTION OF DATA ON NON-MEDICARE AND NON-
MEDICAID PATIENTS.

(a) In General.--During the period described in subsection
(b), the Secretary may not require, under section 4602(e) of
the Balanced Budget Act of 1997 or otherwise under OASIS, a
home health agency to gather or submit information that
relates to an individual who is not eligible for benefits
under either title XVIII or title XIX of the Social Security
Act (such information in this section referred to as ``non-
medicare/medicaid OASIS information'').
(b) Period of Suspension.--The period described in this
subsection--
(1) begins on the date of the enactment of this Act; and
(2) ends on the last day of the 2nd month beginning after
the date as of which the Secretary has published final
regulations regarding the collection and use by the Centers
for Medicare & Medicaid Services of non-medicare/medicaid
OASIS information following the submission of the report
required under subsection (c)
(c) Report.--
(1) Study.--The Secretary shall conduct a study on how non-
medicare/medicaid OASIS information is and can be used by
large home health agencies. Such study shall examine--
(A) whether there are unique benefits from the analysis of
such information that cannot be derived from other
information available to, or collected by, such agencies; and
(B) the value of collecting such information by small home
health agencies compared to the administrative burden related
to such collection.

In conducting the study the Secretary shall obtain
recommendations from quality assessment experts in the use of
such information and the necessity of small, as well as
large, home health agencies collecting such information.
(2) Report.--The Secretary shall submit to Congress a
report on the study conducted under paragraph (1) by not
later than 18 months after the date of the enactment of this
Act.
(d) Construction.--Nothing in this section shall be
construed as preventing home health agencies from collecting
non-medicare/medicaid OASIS information for their own use.
______

SA 1018. Mr. LIEBERMAN (for himself and Ms. Collins) submitted an
amendment intended to be proposed by him to the bill S. 1, to amend
title XVIII of the Social Security Act to make improvements in the
medicare program, to provide prescription drug coverage under the
medicare program, and for other purposes; which was ordered to lie on
the table; as follows:

At the end of title VI, insert the following:

SEC. ____. COLON CANCER SCREENING.

(a) Sense of Congress.--It is the sense of Congress that--
(1) colorectal cancer screening tests (as defined in
section 1861(pp) of the Social Security Act (42 U.S.C.
1395x(pp)) covered under the medicare program have been
severely underutilized, with the Comptroller General of the
United States reporting in 2000 that since coverage of such
tests was implemented, the percentage of beneficiaries under
the medicare program receiving either a screening or a
diagnostic colonoscopy has increased by only 1 percent;
(2) the Centers for Medicare & Medicaid Services should
encourage health care providers to use more effective
screening and diagnostic health care technologies in the area
of colorectal cancer screening;
(3) in recent years, the Centers for Medicare & Medicaid
Services has subjected colorectal cancer screening tests to
some of the largest reimbursement reductions under the
medicare program;
(4) unlike other preventive screening tests covered under
the medicare program, health care providers must consult with
beneficiaries prior to furnishing a screening colonoscopy in
order to--
(A) ascertain the medical and family history of the
beneficiary; and
(B) inform the beneficiary of preparatory steps that must
be taken prior to the procedure; and
(5) reimbursement under the medicare program is not
currently available for the consultations described in
paragraph (4) despite the fact that reimbursement is provided
under such program for similar consultations prior to a
diagnostic colonoscopy.
(b) Increase in Reimbursement for Colorectal Cancer
Screening and Diagnostic Tests.--
(1) In general.--Section 1834(d) (42 U.S.C. 1395m(d)) is
amended by adding at the end the following new paragraph:
``(4) Enhanced payment for colorectal cancer screening and
diagnostic tests.--
``(A) Facility rates.--Notwithstanding paragraphs (2)(A)
and (3)(A), the Secretary shall establish national minimum
payment amounts for CPT codes 45378, 45380, 45385 and HCPCS
codes GO105 and GO121 for items and services furnished during
the last 6 months of 2003 and in subsequent years which
reflect a 30 percent increase above the relative value units
in effect as the facility rates for such codes on June 30,
2003, with such revised payment level to apply to items and
services performed in a facility setting.
``(B) Annual adjustments.--In the case of items and
services furnished on or after January 1, 2004, the payment
rates described in subparagraph (A) shall, subject to the
minimum payment amounts established in such subparagraph, be
adjusted annually as provided in section 1848.''.
(2) Effect on part a payments.--The Secretary shall not
consider the national minimum payment described in section
1834(d)(4)(A) (42 U.S.C. 1395m(d)(4)(A)), as added by
paragraph (1), when determining the hospital outpatient
prospective payment system payment amounts under the relevant
APC codes for colorectal cancer screening and diagnostic
tests.
(3) Effective date.--The amendment made by this subsection
shall apply to items and services furnished on or after July
1, 2003.
(c) Medicare Coverage of Office Visit or Consultation Prior
to a Screening Colonoscopy or in Conjunction With a
Beneficiary's Decision To Obtain Such a Screening.--
(1) Coverage.--Section 1861(s)(2) (42 U.S.C. 1395x(s)(2))
is amended--
(A) in subparagraph (U), by striking ``and'' at the end;
(B) in subparagraph (V), by inserting ``and'' at the end;
and
(C) by adding at the end the following new subparagraph:
``(W) an outpatient office visit or consultation for the
purpose of beneficiary education, assuring selection of the
proper screening test, and securing information relating to
the procedure and sedation of the beneficiary, prior to a
colorectal cancer screening test consisting of a screening
colonoscopy or in conjunction with the beneficiary's decision
to obtain such a screening, regardless of whether such
screening is medically indicated with respect to the
beneficiary;''.
(2) Payment.--
(A) In general.--Section 1833(a)(1) (42 U.S.C. 1395l(a)(1))
is amended--
(i) by striking ``and'' before ``(U)''; and
(ii) by inserting before the semicolon at the end the
following: ``, and (V) with respect to an outpatient office
visit or consultation under section 1861(s)(2)(W), the
amounts paid shall be 80 percent of the lesser of the actual
charge or the amount established under section 1848, except
that no payment shall be made for such a visit or
consultation if no payment would be made for a colorectal
cancer screening test consisting of a screening colonoscopy
for the individual furnished on the date of such visit or
consultation because of the frequency limits described in
section 1834(d)(3)(E)''.
(B) Payment under physician fee schedule.--Section
1848(j)(3) (42 U.S.C. 1395w-4(j)(3)) is amended by inserting
``(2)(W),'' after ``(2)(S),''.
(C) Requirement for establishment of payment amount under
physician fee schedule.--Section 1834(d) (42 U.S.C.
1395m(d)), as amended by subsection (b), is amended by adding
at the end the following new paragraph:
``(5) Payment for outpatient office visit or consultation
prior to screening colonoscopy.--With respect to an
outpatient office visit or consultation under section
1861(s)(2)(W), payment under section 1848 shall be consistent
with the payment amounts for CPT codes 99203 and 99243.''.

[[Page S8460]]

(D) Frequency limitation.--Section 1862(a)(1) (42 U.S.C.
1395y(a)(1)) is amended--
(i) in subparagraph (H), by striking ``and'' at the end;
(ii) in subparagraph (I), by striking the semicolon at the
end and inserting ``, and''; and
(iii) by inserting after subparagraph (I) the following new
subparagraph:
``(J) in the case of an outpatient office visit or
consultation under section 1861(s)(2)(W), which is performed
more frequently that is covered under section
1833(a)(1)(V);''.
(3) Effective date.--The amendments made by this subsection
shall apply to items and services provided on or after July
1, 2003.
(d) Waiver of Deductible for Colorectal Cancer Screening
Tests.--
(1) In general.--The first sentence of section 1833(b) (42
U.S.C. 1395l(b)) is amended--
(A) by striking ``and'' before ``(6)''; and
(B) by inserting before the period at the end the
following: ``, and (7) such deductible shall not apply with
respect to colorectal cancer screening tests (as described in
section 1861(pp)(1))''.
(2) Conforming amendments.--Paragraphs (2)(C)(ii) and
(3)(C)(ii) of section 1834(d) (42 U.S.C. 1395m(d)) are each
amended--
(A) by striking ``deductible and'' in the heading; and
(B) in subclause (I), by striking ``deductible or'' each
place it appears.
(3) Effective date.--The amendment made by this subsection
shall apply to items and services furnished on or after July
1, 2003.
______

SA 1019. Mr. CONRAD (for himself, Mrs. Murray, Mr. Smith, Mrs.
Lincoln, and Mr. Jeffords) proposed an amendment to the bill S. 1, to
amend title XVIII of the Social Security Act to make improvements in
the medicare program, to provide prescription drug coverage under the
medicare program, and for other purposes;

At the end of subtitle B of title IV, insert the following:

SEC. ____. MEDICARE COVERAGE OF SELF-INJECTED BIOLOGICALS.

(a) Coverage.--
(1) In general.--Section 1861(s)(2) (42 U.S.C. 1395x(s)(2))
is amended--
(A) in subparagraph (U), by striking ``and'' at the end;
(B) in subparagraph (V), by inserting ``and'' at the end;
and
(C) by adding at the end the following new subparagraph:
``(W)(i) a self-injected biological (which is approved by
the Food and Drug Administration) that is prescribed as a
complete replacement for a drug or biological (including the
same biological for which payment is made under this title
when it is furnished incident to a physicians' service) that
would otherwise be described in subparagraph (A) or (B) and
that is furnished during 2004 or 2005; and
``(ii) a self-injected drug that is used to treat multiple
sclerosis;''.
(2) Conforming amendment.--Subparagraphs (A) and (B) of
section 1861(s)(2) of the Social Security Act (42 U.S.C.
1395x(s)(2)) are each amended by inserting ``, except for any
drug or biological described in subparagraph (W),'' after
``which''.
(b) Effective Date.--The amendments made by subsection (a)
shall apply to drugs and biologicals furnished on or after
January 1, 2004 and before January 1, 2006.
At the end of title VI, add the following:

SEC. ____. MEDICARE SECONDARY PAYOR (MSP) PROVISIONS.

(a) Technical Amendment Concerning Secretary's Authority To
Make Conditional Payment When Certain Primary Plans Do Not
Pay Promptly.--
(1) In general.--Section 1862(b)(2) (42 U.S.C. 1395y(b)(2))
is amended--
(A) in subparagraph (A)(ii), by striking ``promptly (as
determined in accordance with regulations)''; and
(B) in subparagraph (B)--
(i) by redesignating clauses (i) through (iii) as clauses
(ii) through (iv), respectively; and
(ii) by inserting before clause (ii), as so redesignated,
the following new clause:
``(i) Authority to make conditional payment.--The Secretary
may make payment under this title with respect to an item or
service if a primary plan described in subparagraph (A)(ii)
has not made or cannot reasonably be expected to make payment
with respect to such item or service promptly (as determined
in accordance with regulations). Any such payment by the
Secretary shall be conditioned on reimbursement to the
appropriate Trust Fund in accordance with the succeeding
provisions of this subsection.''.
(2) Effective date.--The amendments made by paragraph (1)
shall be effective as if included in the enactment of title
III of the Medicare and Medicaid Budget Reconciliation
Amendments of 1984 (Public Law 98-369).
(b) Clarifying Amendments to Conditional Payment
Provisions.--Section 1862(b)(2) (42 U.S.C. 1395y(b)(2)) is
further amended--
(1) in subparagraph (A), in the matter following clause
(ii), by inserting the following sentence at the end: ``An
entity that engages in a business, trade, or profession shall
be deemed to have a self-insured plan if it carries its own
risk (whether by a failure to obtain insurance, or otherwise)
in whole or in part.'';
(2) in subparagraph (B)(ii), as redesignated by subsection
(a)(2)(B)--
(A) by striking the first sentence and inserting the
following: ``A primary plan, and an entity that receives
payment from a primary plan, shall reimburse the appropriate
Trust Fund for any payment made by the Secretary under this
title with respect to an item or service if it is
demonstrated that such primary plan has or had a
responsibility to make payment with respect to such item or
service. A primary plan's responsibility for such payment may
be demonstrated by a judgment, a payment conditioned upon the
recipient's compromise, waiver, or release (whether or not
there is a determination or admission of liability) of
payment for items or services included in a claim against the
primary plan or the primary plan's insured, or by other
means.''; and
(B) in the final sentence, by striking ``on the date such
notice or other information is received'' and inserting ``on
the date notice of, or information related to, a primary
plan's responsibility for such payment or other information
is received''; and
(3) in subparagraph (B)(iii), as redesignated by subsection
(a)(2)(B), by striking the first sentence and inserting the
following: ``In order to recover payment made under this
title for an item or service, the United States may bring an
action against any or all entities that are or were required
or responsible (directly, as an insurer or self-insurer, as a
third-party administrator, as an employer that sponsors or
contributes to a group health plan, or large group health
plan, or otherwise) to make payment with respect to the same
item or service (or any portion thereof) under a primary
plan. The United States may, in accordance with paragraph
(3)(A) collect double damages against any such entity. In
addition, the United States may recover under this clause
from any entity that has received payment from a primary plan
or from the proceeds of a primary plan's payment to any
entity.''.
(c) Clerical Amendments.--Section 1862(b) (42 U.S.C.
1395y(b)) is amended--
(1) in paragraph (1)(A), by moving the indentation of
clauses (ii) through (v) 2 ems to the left; and
(2) in paragraph (3)(A), by striking ``such'' before
``paragraphs''.
______

SA 1020. Mr. CONRAD proposed an amendment to the bill S. 1, to amend
title XVIII of the Social Security Act to make improvements in the
medicare program, to provide prescription drug coverage under the
medicare program, and for other purposes; as follows:

Strike section 401 and insert the following:

SEC. 401. EQUALIZING URBAN AND RURAL STANDARDIZED PAYMENT
AMOUNTS UNDER THE MEDICARE INPATIENT HOSPITAL
PROSPECTIVE PAYMENT SYSTEM.

(a) In General.--Section 1886(d)(3)(A)(iv) (42 U.S.C.
1395ww(d)(3)(A)(iv)) is amended--
(1) by striking ``(iv) For discharges'' and inserting
``(iv)(I) Subject to subclause (II), for discharges''; and
(2) by adding at the end the following new subclause:
``(II) For discharges occurring in a fiscal year beginning
with fiscal year 2004, the Secretary shall compute a
standardized amount for hospitals located in any area within
the United States and within each region equal to the
standardized amount computed for the previous fiscal year
under this subparagraph for hospitals located in a large
urban area (or, beginning with fiscal year 2005, for
hospitals located in any area) increased by the applicable
percentage increase under subsection (b)(3)(B)(i) for the
fiscal year involved.''.
(b) Conforming Amendments.--
(1) Computing drg-specific rates.--Section 1886(d)(3)(D)
(42 U.S.C. 1395ww(d)(3)(D)) is amended--
(A) in the heading, by striking ``in different areas'';
(B) in the matter preceding clause (i), by striking ``,
each of'';
(C) in clause (i)--
(i) in the matter preceding subclause (I), by inserting
``for fiscal years before fiscal year 2004,'' before ``for
hospitals''; and
(ii) in subclause (II), by striking ``and'' after the
semicolon at the end;
(D) in clause (ii)--
(i) in the matter preceding subclause (I), by inserting
``for fiscal years before fiscal year 2004,'' before ``for
hospitals''; and
(ii) in subclause (II), by striking the period at the end
and inserting ``; and''; and
(E) by adding at the end the following new clause:
``(iii) for a fiscal year beginning after fiscal year 2003,
for hospitals located in all areas, to the product of--
``(I) the applicable standardized amount (computed under
subparagraph (A)), reduced under subparagraph (B), and
adjusted or reduced under subparagraph (C) for the fiscal
year; and
``(II) the weighting factor (determined under paragraph
(4)(B)) for that diagnosis-related group.''.
(2) Technical conforming sunset.--Section 1886(d)(3) (42
U.S.C. 1395ww(d)(3)) is amended--
(A) in the matter preceding subparagraph (A), by inserting
``, for fiscal years before fiscal year 1997,'' before ``a
regional adjusted DRG prospective payment rate''; and

[[Page S8461]]

(B) in subparagraph (D), in the matter preceding clause
(i), by inserting ``, for fiscal years before fiscal year
1997,'' before ``a regional DRG prospective payment rate for
each region,''.

At the end of title VI, add the following:

SEC. ____. MEDICARE SECONDARY PAYOR (MSP) PROVISIONS.

(a) Technical Amendment Concerning Secretary's Authority To
Make Conditional Payment When Certain Primary Plans Do Not
Pay Promptly.--
(1) In general.--Section 1862(b)(2) (42 U.S.C. 1395y(b)(2))
is amended--
(A) in subparagraph (A)(ii), by striking ``promptly (as
determined in accordance with regulations)''; and
(B) in subparagraph (B)--
(i) by redesignating clauses (i) through (iii) as clauses
(ii) through (iv), respectively; and
(ii) by inserting before clause (ii), as so redesignated,
the following new clause:
``(i) Authority to make conditional payment.--The Secretary
may make payment under this title with respect to an item or
service if a primary plan described in subparagraph (A)(ii)
has not made or cannot reasonably be expected to make payment
with respect to such item or service promptly (as determined
in accordance with regulations). Any such payment by the
Secretary shall be conditioned on reimbursement to the
appropriate Trust Fund in accordance with the succeeding
provisions of this subsection.''.
(2) Effective date.--The amendments made by paragraph (1)
shall be effective as if included in the enactment of title
III of the Medicare and Medicaid Budget Reconciliation
Amendments of 1984 (Public Law 98-369).
(b) Clarifying Amendments to Conditional Payment
Provisions.--Section 1862(b)(2) (42 U.S.C. 1395y(b)(2)) is
further amended--
(1) in subparagraph (A), in the matter following clause
(ii), by inserting the following sentence at the end: ``An
entity that engages in a business, trade, or profession shall
be deemed to have a self-insured plan if it carries its own
risk (whether by a failure to obtain insurance, or otherwise)
in whole or in part.'';
(2) in subparagraph (B)(ii), as redesignated by subsection
(a)(2)(B)--
(A) by striking the first sentence and inserting the
following: ``A primary plan, and an entity that receives
payment from a primary plan, shall reimburse the appropriate
Trust Fund for any payment made by the Secretary under this
title with respect to an item or service if it is
demonstrated that such primary plan has or had a
responsibility to make payment with respect to such item or
service. A primary plan's responsibility for such payment may
be demonstrated by a judgment, a payment conditioned upon the
recipient's compromise, waiver, or release (whether or not
there is a determination or admission of liability) of
payment for items or services included in a claim against the
primary plan or the primary plan's insured, or by other
means.''; and
(B) in the final sentence, by striking ``on the date such
notice or other information is received'' and inserting ``on
the date notice of, or information related to, a primary
plan's responsibility for such payment or other information
is received''; and
(3) in subparagraph (B)(iii), as redesignated by subsection
(a)(2)(B), by striking the first sentence and inserting the
following: ``In order to recover payment made under this
title for an item or service, the United States may bring an
action against any or all entities that are or were required
or responsible (directly, as an insurer or self-insurer, as a
third-party administrator, as an employer that sponsors or
contributes to a group health plan, or large group health
plan, or otherwise) to make payment with respect to the same
item or service (or any portion thereof) under a primary
plan. The United States may, in accordance with paragraph
(3)(A) collect double damages against any such entity. In
addition, the United States may recover under this clause
from any entity that has received payment from a primary plan
or from the proceeds of a primary plan's payment to any
entity.''.
(c) Clerical Amendments.--Section 1862(b) (42 U.S.C.
1395y(b)) is amended--
(1) in paragraph (1)(A), by moving the indentation of
clauses (ii) through (v) 2 ems to the left; and
(2) in paragraph (3)(A), by striking ``such'' before
``paragraphs''.
______

SA 1021. Mr. CONRAD1 proposed an amendment to the bill S. 1, to amend
title XVIII of the Social Security Act to make improvements in the
medicare program, to provide prescription drug coverage under the
medicare program, and for other purposes; as follows:

At the end of subtitle A of title IV, add the following:

SEC. ____. GEOGRAPHIC RECLASSIFICATION OF CERTAIN HOSPITALS
FOR PURPOSES OF REIMBURSEMENT UNDER THE
MEDICARE PROGRAM.

(a) In General.--Notwithstanding any other provision of
law, effective for discharges occurring during fiscal year
2004 and each subsequent fiscal year, for purposes of making
payments under section 1886(d) of the Social Security Act (42
U.S.C. 1395ww(d)), hospitals located in the Bismarck, North
Dakota Metropolitan Statistical Area are deemed to be located
in the Fargo-Moorhead North Dakota-Minnesota Metropolitan
Statistical Area.
(b) Treatment as Decision of Medicare Geographic
Classification Review Board.--
(1) In general.--Except as provided in paragraph (2), for
purposes of section 1886(d) of the Social Security Act (42
U.S.C 1395ww(d)), any reclassification under subsection (a)
shall be treated as a decision of the Medicare Geographic
Classification Review Board under paragraph (10) of that
section.
(2) Nonapplication of 3-year application provision.--
Section 1886(d)(10)(D)(v) of the Social Security Act (42
U.S.C. 1395ww(d)(10)(D)(v)), as it relates to a
reclassification being effective for 3 fiscal years, shall
not apply with respect to reclassifications made under this
section.
(c) Process for Applications To Ensure that Provisions
Apply Beginning October 1, 2003.--The Secretary shall
establish a process for the Medicare Geographic
Classification Review Board to accept, and make
determinations with respect to, applications that are filed
by applicable hospitals within 90 days of the date of
enactment of this section to reclassify based on the
provisions of this section in order to ensure that such
provisions shall apply to payments under such section 1886(d)
for discharges occurring on or after October 1, 2003.
(d) Adjustments To Ensure Budget Neutrality.--If 1 or more
applicable hospital's applications are approved pursuant to
the process under subsection (c), the Secretary shall make a
proportional adjustment in the standardized amounts
determined under paragraph (3) of such section 1886(d) for
payments for discharges occurring in fiscal year 2004 to
ensure that approval of such applications does not result in
aggregate payments under such section 1886(d) that are
greater or less than those that would otherwise be made if
this section had not been enacted.
______

SA 1022. Mr. BROWNBACK submitted an amendment intended to be proposed
by him to the bill S. 1, to amend title XVIII of the Social Security
Act to make improvements in the medicare program, to provide
prescription drug coverage under the medicare program, and for other
purposes; which was ordered to lie on the table; as follows:

Sec.  . This Act may be cited as the ``Quality Cancer Care Preservation
Act''.

SEC. . MEDICARE PAYMENT FOR DRUGS AND BIOLOGICALS.

(a) In General.--Section 1842(o)(1) of the Social Security
Act (42 U.S.C. 1395u(o)(1)) is amended by striking ``95
percent of the average wholesale price'' and inserting ``the
payment amount specified in section 1834(n)(2)''.
(b) Determination of Payment Amount.--Section 1834 of such
Act (42 U.S.C. 1395m) is amended by adding at the end the
following new subsection:
``(n) Payment for Drugs and Biologicals--
``(1) Reports by Manufacturers--
``(A) In general.--Every drug manufacturer shall report to
the Secretary, in the manner prescribed in this paragraph,
its average sales price (as defined in subparagraph (B)) in
the United States during each calendar quarter for drugs and
biologicals covered under this part.
``(B) Definitions.--For purposes of this subsection--
``(i) the term ``manufacturer'' means, with respect to a
drug or biological, the entity identified by the Labeler Code
portion of the National Drug Code of such drug or biological;
and
``(ii) the term ``average sales price'' means the weighted
average of all final sales prices to all purchasers,
excluding sales specified in subparagraph (C). In determining
such average sales prices, such prices shall be net of volume
discounts, chargebacks, short-dated product discounts, free
goods contingent on purchases, rebates (other than those made
or authorized under section 1927), and all other price
concessions that result in a reduction of the ultimate cost
to the purchaser.
``(C) Consideration in calculation of average sales
prices.--The calculation of average sales price under this
subsection shall not include-
``(i) prices that are excluded from the calculation of
``best price'' under section 1927(c)(1)(C);
``(ii) prices offered to entities that are considered under
subparagraph (B)(i) to be the manufacturers of the drugs or
biologicals involved;
``(iii) prices offered by a manufacturer to a hospital,
nursing facility, hospice, or health maintenance
organization;
``(iv) prices to governmental entities; and
``(v) nominal prices offered to bona fide charitable
organizations.
``(D) Quarterly reports.--Each manufacturer shall submit
the report required by subparagraph (A) to the Secretary by
electronic means no later than 30 days after the end of a
calendar quarter with respect to sales that occurred during
such quarter. The Secretary shall prescribe the format and
other requirements for the report.
``(E) Enforcement.--
``(i) Failure to timely report.--The Secretary may impose a
civil monetary penalty in an amount not to exceed $100,000 on
a manufacturer that fails to provide the information required
under this paragraph on a timely basis and in the manner
required.

[[Page S8462]]

``(ii) False information.--For each item of false
information, the Secretary may impose a civil money penalty
in an amount not to exceed $100,000 on a manufacturer that
knowingly provides false information under this paragraph.
``(iii) Manner of imposition of civil monetary penalties.--
The provisions in section 1128A (other than subsections (a)
and (b)) shall apply to a civil monetary penalty under this
subparagraph in the same manner as such provisions apply to a
penalty or proceeding under section 1128A(a).
``(F) Confidentiality of information.--Notwithstanding any
other provision of law, information disclosed by
manufacturers under this paragraph is confidential and shall
not be disclosed by the Secretary in any form other than as
specifically authorized by this subsection.
``(2) Calculation of payment amount--
``(A) In general.--Except as otherwise provided in this
paragraph, the payment amount for a drug or biological
furnished during a calendar quarter shall be 120 percent of
the average sales price of the drug or biological for the
second preceding calendar quarter as determined under
paragraph (1).
``(B) Methodology.--In determining payment amounts under
subparagraph (A), the Secretary may, in the Secretary's
discretion, use either the average sales price for each drug
or biological by specific drug or biological, or a cumulative
average sales price based on sales data for all versions of a
multiple-source drug that the Secretary, acting through the
Food and Drug Administration, has determined are
therapeutically equivalent (as evidenced by ``A'' ratings in
the publication Approved Drug Products with Therapeutic
Equivalence Evaluations).
``(C) Increase to reflect additional. costs attributable to
state and local taxes.--In the case of a drug or biological
that was subject to a State or local sales tax or gross
receipts tax when administered or dispensed, the payment
amount determined under subparagraph (A) shall be increased
by the amount of such tax paid with respect to such drug or
biological.
``(D) Substitution of higher payment amount.--If a
physician's, supplier's, or any other person's claim for
payment for services under this Act documents that the price
paid for a drug or biological was greater than the payment
amount determined under subparagraph (A), the actual amount
paid shall be substituted for the payment amount determined
under subparagraph (A), unless the Secretary determines that
the actual amount paid was unreasonable under the
circumstances.
``(E) Increase for Bad Debt and Certain Other Costs.--Upon
the submission of supporting information, the Secretary shall
make an additional payment to a physician or supplier to
cover--
``(i) uncollectible deductibles and coinsurance due from
Medicare beneficiaries with respect to drugs and biologicals
furnished to such beneficiaries; and
``(ii) costs incurred in procuring and billing for drugs
and biologicals furnished to Medicare beneficiaries.''.

SEC.   . MEDICARE PAYMENT FOR DRUG ADMINISTRATION SERVICES.

(a) General.--The Secretary of Health and Human Services
(hereafter in this Act referred to as ``the Secretary'')
shall revise the practice expense relative value units for
drug administration services for years beginning with the
year 2005 in accordance with this section. For purposes of
this section, ``drug administration services'' includes
chemotherapy administration services, therapeutic and
diagnostic infusions and injections, and such other services
as the Secretary specifies.
(b) Direct Costs Equal to 100 Percent of Cpep Estimates.--
Using the information, including estimates of clinical staff
time, developed in the clinical practice expert panel
process, including refinements by American Medical
Association committees, the Secretary shall estimate the
costs of the nursing and other clinical staff, supplies, and
procedure-specific equipment (exceeding a cost specified by
the Secretary) used in furnishing each type of drug
administration service. The Secretary shall utilize without
revision the minutes of clinical staff time determined in
such process. The Secretary shall convert the information
from such process to estimated costs by applying the most
current available data on staff salary, supply, and equipment
costs, and such costs shall be updated to 2005 based on
estimated changes in prices since the date of such data.
(c) Total Practice Expenses.--The Secretary shall estimate
the total practice expenses of each drug administration
service by assuming that the direct costs for the service
determined under subsection (b) are 33.2 percent of such
total practice expenses.
(d) Conversion to Relative Value Units.--The Secretary
shall convert the total practice expenses determined under
subsection (c) to practice expense relative value units for
each drug administration service by dividing such expenses by
the conversion factor that will be in effect for the
physician fee schedule for 2005. The relative value units as
so determined shall be used in determining the fee schedule
amounts paid for drug administration services under section
1848 of the Social Security Act (42 U.S.C. 1395w-4).
(e) Updates.--For years after 2005, the relative values
determined under subsection (d) shall continue in effect
except that the Secretary shall revise them as necessary to
maintain their accuracy, provided that such revisions are
consistent with the methodology set forth in this section.
(f) Multiple Pushes.--In establishing the payment amounts
under this section, the Secretary shall establish the payment
amount for intravenous chemotherapy administration by push
technique based of the administration of a single drug. The
Secretary shall make the same payment for each additional
drug administered by push technique during the same
encounter, except to the extent that the Secretary finds that
the cost of administering additional drugs is less than the
cost of administering the first drug.

SEC.   . PAYMENTS FOR CHEMOTHERAPY SUPPORT SERVICES.

(a) General.--Beginning in the year 2005, the Secretary
shall recognize and make payments under section 1848 of the
Social Security Act (42 U.S.C. 1395w-4) for chemotherapy
support services furnished incident to physicians'
services. For the purposes of this section, ``chemotherapy
support services'' are services furnished by the staff of
physicians to patients undergoing treatment for cancer
that were not included in the computation of clinical
staff costs under section 3(b). Such services include
social worker services, nutrition counseling, psychosocial
services, and similar services.
(b) Direct Costs.--The Secretary shall estimate the cost of
the salary and benefits of staff furnishing chemotherapy
support services as they are provided in oncology practices
that furnish these services to cancer patients in a manner
that is considered to be high quality care. The estimate
shall be based on the weekly cost of such services per
patient receiving chemotherapy.
(c) Total Costs.--The Secretary shall estimate the total
practice expenses of chemotherapy support services by
assuming that the direct costs for the service determined
under subsection (b) are 33.2 percent of such total practice
expenses.
(d) Conversion to Relative Value Units.--The Secretary
shall convert the total practice expenses determined under
subsection (c) to practice expense relative value units for
chemotherapy support services by dividing such expenses by
the conversion factor that will be in effect for the
physician fee schedule for 2005. The relative value units as
so determined shall be used in determining the fee schedule
amounts paid for chemotherapy support services under such
section 1848.
(e) Updates.--For the years after 2005, the relative values
determined under subsection (d) shall continue in effect
except that the Secretary shall revise them as necessary to
maintain their accuracy, provided that such revisions are
consistent with the methodology set forth in this section.

SEC.   . CANCER THERAPY MANAGEMENT SERVICES.

The Secretary shall recognize and establish a payment
amount for the service of cancer therapy management to
account for the greater pre-service and post-service work
associated with visits and consultations conducted by
physicians treating cancer patients compared to typical
visits and consultations. The payment amount may vary by the
level and type of the related visit or consultation.

SEC.   . OTHER SERVICES WITHOUT PHYSICIAN WORK RELATIVE VALUE
UNITS.

The Secretary shall develop a revised methodology for
determining the payment amounts for services that are paid
under the fee schedule established by section 1848 of the
Social Security Act (42 U.S.C. 1395w-4) and that do not have
physician work relative value units, including radiation
oncology services. Such methodology shall result in payment
amounts that fully cover the costs of furnishing such
services. Until such time as the methodology for such
services is revised and implemented, all such services shall
be protected from further payment cuts due to factors such as
shifts in utilization or removal of any one specialty's
services that are paid under the fee schedule established by
such section 1848 and that do not have physician work
relative value units.

SEC.   . PHYSICIAN SUPERVISION OF SERVICES.

Section 1834 of the Social Security Act (42 U.S.C. 1395m),
as amended by section 2, is further amended by adding at the
end the following new subsection:
``(o) Supervision Requirements--If the Secretary requires
direct supervision of a service by a physician, that
supervision requirement may be fulfilled by one or more
physicians other than the physician who ordered the service.
If the supervising physician is different from the
ordering physician for a particular service, the ordering
physician may nevertheless bill for such service provided
that the medical records for the service involved identify
the supervising physician or physicians.''.

SEC.   . REPORT TO CONGRESS.

No later than April 1, 2004, the Secretary shall submit to
Congress a report on the payment amounts that are projected
to be adopted under sections 2, 3, 4, and 5 of this Act.

SEC.   . INSTITUTE OF MEDICINE STUDY.

(a) General.--The Secretary of Health and Human Services
shall request the Institute of Medicine to conduct the study
described in this section.
(b) Baseline Study.--The first phase of the study shall
include the following objectives:
(1) An assessment of the extent to which the current
Medicare payment system, prior to implementation of the
amendments made by this Act, facilitates appropriate access
to

[[Page S8463]]

care by cancer patients in the various treatment settings.
(2) The identification of the comprehensive range of
services furnished to cancer patients in the outpatient
setting, including support services such as psychosocial
services and counseling, and recommendations regarding the
types of services that ought to be furnished to Medicare
patients with cancer.
(3) A discussion of the practice standards necessary to
assure the safe provision of services to cancer patients.
(4) An analysis of the extent to which the current Medicare
payment system supports the role of nurses in the provision
of oncology services and recommendations for any necessary
improvements in the payment system in that respect.
(5) The development of a framework for assessing how the
amendments made by this act affect the provision of care to
Medicare patients with cancer in the various treatment
settings.
(c) Second Phase of Study.--After the implementation of the
amendments made by this Act, the study shall determine
whether and how those amendments affected the provision of
care to Medicare patients with cancer.
(d) Consultation.--The Institute of Medicine shall consult
with the National Cancer Policy Board and organizations
representing cancer patients and survivors, oncologists,
oncology nurses, social workers, cancer centers, and other
healthcare professionals who treat cancer patients in
planning and carrying out this study.
(e) Due Dates--
(1) The study required by subsection (b) shall be submitted
to the Congress and the Secretary of Health and Human
Services no later than June 30, 2004.
(2) The study required by subsection (c) shall be submitted
to the Congress and the Secretary of Health and Human
Services no later than December 31, 2006.

SEC. 10. EFFECTIVE DATES.

(a) General.--Except as provided in this section, the
provisions of this Act shall apply to drugs, biologicals, and
services furnished on or after January 1, 2005.
(b) Reports From Manufacturers.--The first report by
manufacturers required by the provisions of section 2 shall
be submitted no later than October 30, 2004, with respect to
sales that occurred in the quarter ending September 30, 2004.
(c) Supervision of Services.--The amendment made by section
7 shall be effective upon enactment.
(d) Services Other Than Drug Administration.--The Secretary
shall implement the requirements of section 6 no later than
January 1, 2005.
______

SA 1023. Ms. COLLINS submitted an amendment intended to be proposed
by her to the bill S. 1, to amend title XVIII of the Social Security
Act to make improvements in the medicare program, to provide
prescription drug coverage under the medicare program, and for other
purposes; which was ordered to lie on the table; as follows:

At the appropriate place in subtitle B of title IV, insert
the following:

SEC. ____. DEMONSTRATION PROJECT TO CLARIFY THE DEFINITION OF
HOMEBOUND.

(a) Demonstration Project.--Not later than 180 days after
the date of enactment of this Act, the Secretary shall
conduct a two-year demonstration project under part B of
title XVIII of the Social Security Act under which medicare
beneficiaries with chronic conditions described in subsection
(b) are deemed to be homebound for purposes of receiving home
health services under the medicare program.
(b) Medicare Beneficiary Described.--For purposes of
subsection (a), a medicare beneficiary is eligible to be
deemed to be homebound, without regard to the purpose,
frequency, or duration of absences from the home, if the
beneficiary--
(1) has been certified by one physician as an individual
who has a permanent and severe condition that will not
improve;
(2) requires the individual to receive assistance from
another individual with at least 3 out of the 5 activities of
daily living for the rest of the individual's life;
(3) requires 1 or more home health services to achieve a
functional condition that gives the individual the ability to
leave home; and
(4) requires technological assistance or the assistance of
another person to leave the home.
(c) Demonstration Project Sites.--The demonstration project
established under this section shall be conducted in 3 States
selected by the Secretary to represent the Northeast,
Midwest, and Western regions of the United States.
(d) Limitation on Number of Participants.--The aggregate
number of such beneficiaries that may participate in the
project may not exceed 15,000.
(e) Data.--The Secretary shall collect such data on the
demonstration project with respect to the provision of home
health services to medicare beneficiaries that relates to
quality of care, patient outcomes, and additional costs, if
any, to the medicare program.
(f) Report to Congress.--Not later than 1 year after the
date of the completion of the demonstration project under
this section, the Secretary shall submit to Congress a report
on the project using the data collected under subsection (e)
and shall include--
(1) an examination of whether the provision of home health
services to medicare beneficiaries under the project--
(A) adversely effects the provision of home health services
under the medicare program; or
(B) directly causes an unreasonable increase of
expenditures under the medicare program for the provision of
such services that is directly attributable to such
clarification;
(2) the specific data evidencing the amount of any increase
in expenditures that is a directly attributable to the
demonstration project (expressed both in absolute dollar
terms and as a percentage) above expenditures that would
otherwise have been incurred for home health services under
the medicare program; and
(3) specific recommendations to exempt permanently and
severely disabled homebound beneficiaries from restrictions
on the length, frequency and purpose of their absences from
the home to qualify for home health services without
incurring additional unreasonable costs to the medicare
program.
(g) Waiver Authority.--The Secretary shall waive compliance
with the requirements of title XVIII of the Social Security
Act (42 U.S.C. 1395 et seq.) to such extent and for such
period as the Secretary determines is necessary to conduct
demonstration projects.
(h) Construction.--Nothing in this section shall be
construed as waiving any applicable civil monetary penalty,
criminal penalty, or other remedy available to the Secretary
under title XI or title XVIII of the Social Security Act for
acts prohibited under such titles, including penalties for
false certifications for purposes of receipt of items or
services under the medicare program.
(i) Authorization of Appropriations.--Payments for the
costs of carrying out the demonstration project under this
section shall be made from the Federal Supplementary
Insurance Trust Fund under section 1841 of such Act (42
U.S.C. 1395t).
(j) Definitions.--In this section:
(1) Medicare beneficiary.--The term ``medicare
beneficiary'' means an individual who is enrolled under part
B of title XVIII of the Social Security Act.
(2) Home health services.--The term ``home health
services'' has the meaning given such term in section 1861(m)
of the Social Security Act (42 U.S.C. 1395x(m)).
(3) Activities of daily living defined.--The term
``activities of daily living'' means eating, toileting,
transferring, bathing, and dressing.
(4) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services.
______

SA 1024. Mr. ENSIGN (for himself and Mrs. Lincoln) submitted an
amendment intended to be proposed by him to the bill S. 1, to amend
title XVIII of the Social Security Act to make improvements in the
medicare program, to provide prescription drug coverage under the
medicare program, and for other purposes; which was ordered to lie on
the table; as follows:

At the appropriate place in title IV, insert the following:

SEC. ____. OUTPATIENT THERAPY CAP REPEAL.

(a) In General.--Section 1833 of the Social Security Act
(42 U.S.C. 1395l) is amended by striking subsection (g).
(b) Effective Date.--The amendment made by subsection (a)
shall take effect on January 1, 2005.
______

SA 1025. Mr. ENSIGN submitted an amendment intended to be proposed by
him to the bill S. 1, to amend title XVIII of the Social Security Act
to make improvements in the medicare program, to provide prescription
drug coverage under the medicare program, and for other purposes; which
was ordered to lie on the table; as follows:

At the end of title VI, insert the following:

SEC. ____. COST-BENEFIT EVALUATION OF SOCIAL HEALTH
MAINTENANCE ORGANIZATION II DEMONSTRATION
PROJECT AND EXTENSION OF PROJECT AUTHORITY.

(a) Extension.--Notwithstanding any other provision of law,
the Social Health Maintenance Organization II demonstration
project described under section 2355(b)(1)(B) of the Deficit
Reduction Act of 1984, as amended, shall be conducted for an
additional period of 5 years beginning October 1, 2004 under
applicable contractual provisions existing on December 31,
2002. Such demonstration project shall be evaluated by an
independent organization in accordance with subsection (b).
The report on the evaluation and related recommendations
shall be provided as described in subsection (c).
(b) Evaluation.--
(1) Research design.--The Secretary shall provide for a
project research design that includes information on the
Medicare beneficiaries who are participating in the project
and on other Medicare beneficiaries who are covered under
fee-for-service and other Medicare+Choice plans and that
allows for an appropriate statistical analysis and evaluation
of the demonstration project by an independent organization.

[[Page S8464]]

(2) Data collection.--The Secretary shall require the
Social Health Maintenance Organization II to comply with such
data collection and reporting requirements as the Secretary
determines necessary in order that the assessments can be
made as described under subsection (c)(2); and
(3) Duration.--The project evaluation period shall last for
a period of 3 years.
(c) Report.--
(1) In general.--The Secretary shall issue to the Congress
a final report on the project not later than 9 months after
the date of the completion of the evaluation period.
(2) Contents of report.--The report under paragraph (1)
shall include the following:
(A) A description of the demonstration project and the
distinguishing characteristics of the Social Health
Maintenance Organization II project, including the project's
geriatric approach to patient care, extensive care
coordination and patient assessments, provision of extended
benefits to beneficiaries with targeted health risks, and
risk adjusted payment methodology.
(B) An evaluation of--
(i) the cost-effectiveness of the project compared to the
comparison group with respect to the extent of any delay or
reduction in the incidence or length of stay in nursing homes
or similar institutions and the estimated Medicare and
Medicaid cost savings relating to such delay or reductions,
(ii) the extent to which the utilization of physician, home
health, coordinated care, geriatric, prescription drug,
extended care benefits and other services which are unique to
the project result in any reduction in the incidence or
length of inpatient stays and in the improvement or lessening
in the deterioration of the physical status and mental health
functioning of beneficiaries, and
(iii) the feasibility of replicating the elements of the
Social Health Maintenance Organization II model under other
Medicare+Choice plans.

To the extent feasible, an evaluation of the elements
described in this subparagraph shall be conducted on a
longitudinal basis for noninstitutionalized beneficiaries who
are at high risk of hospitalization or institutionalization,
for other noninstitutionalized beneficiaries who are not at
high risk, and for institutionalized beneficiaries. To the
extent feasible such evaluations shall be conducted for
appropriate age and gender beneficiary categories.
(C) A description of the data and criteria and methodology
used in conducting the evaluation.
(D) Any other information regarding the project that the
Secretary determines to be appropriate and any
recommendations the Secretary may make regarding the extent
to which changes should be made in connection with the
project or the extension of the project as a model under the
Medicare+Choice program.
(d) Definitions.--In this section:
(1) Demonstration project.--The term ``demonstration
project'' means the demonstration project described under
subsection (a).
(2) Medicare beneficiary.--The term ``Medicare
beneficiary'' means an individual entitled to benefits under
part A and covered under part B of title XVIII of the Social
Security Act (42 U.S.C. 1395 et seq.).
(3) Medicare.--The term ``Medicare'' means the health
benefits program under title XVIII of the Social Security Act
(42 U.S.C. 1395 et seq.).
(4) Medicare+choice.--The term ``Medicare+Choice'' means
the Medicare+Choice health benefits program described under
part C of title XVIII of the Social Security Act (42 U.S.C.
1395 et seq.), and for years after 2005, the
MedicareAdvantage program described under such part.
(5) Secretary.--The term ``Secretary'' means the Secretary
of Health and Human Services.
(6) Social health maintenance organization ii.--The term
``Social Health Maintenance Organization II'' means the
project described under section 2355(b)(1)(B) of the Deficit
Reduction Act of 1984, as amended.
(e) Effective Date.--The effective date of this section is
the date of the enactment of this Act.
______

SA 1026. Mr. HAGEL (for himself, Mr. Ensign, Mr. Lott, and Mr.
Inhofe) submitted an amendment intended to be proposed by him to the
bill S. 1, to amend title XVIII of the Social Security Act to make
improvements in the medicare program, to provide prescription drug
coverage under the medicare program, and for other purposes; which was
ordered to lie on the table; as follows:

(Purpose: To provide medicare beneficiaries with a drug discount card
that ensures access to privately-negotiated discounts on drugs and
protection against high and out-of-pocket drug costs)

Strike title I and insert the following:

TITLE I--MEDICARE PRESCRIPTION DRUG DISCOUNT

SEC. 101. VOLUNTARY MEDICARE PRESCRIPTION DRUG DISCOUNT AND
SECURITY PROGRAM.

(a) Establishment of Program.--Title XVIII of the Social
Security Act (42 U.S.C. 1395 et seq.) is amended--
(1) by redesignating part D as part E; and
(2) by inserting after part C the following new part:

``Part D--Voluntary Medicare Prescription Drug Discount and Security
Program

``definitions

``Sec. 1860. In this part:
``(1) Covered drug.--
``(A) In general.--Except as provided in this paragraph,
the term `covered drug' means--
``(i) a drug that may be dispensed only upon a prescription
and that is described in subparagraph (A)(i) or (A)(ii) of
section 1927(k)(2); or
``(ii) a biological product described in clauses (i)
through (iii) of subparagraph (B) of such section or insulin
described in subparagraph (C) of such section,

and such term includes a vaccine licensed under section 351
of the Public Health Service Act and any use of a covered
drug for a medically accepted indication (as defined in
section 1927(k)(6)).
``(B) Exclusions.--
``(i) In general.--Such term does not include drugs or
classes of drugs, or their medical uses, which may be
excluded from coverage or otherwise restricted under section
1927(d)(2), other than subparagraph (E) thereof (relating to
smoking cessation agents), or under section 1927(d)(3).
``(ii) Avoidance of duplicate coverage.--A drug prescribed
for an individual that would otherwise be a covered drug
under this part shall not be so considered if payment for
such drug is available under part A or B for an individual
entitled to benefits under part A and enrolled under part B.
``(C) Application of formulary restrictions.--A drug
prescribed for an individual that would otherwise be a
covered drug under this part shall not be so considered under
a plan if the plan excludes the drug under a formulary and
such exclusion is not successfully appealed under section
1860D(a)(4)(B).
``(D) Application of general exclusion provisions.--A
prescription drug discount card plan or Medicare+Choice plan
may exclude from qualified prescription drug coverage any
covered drug--
``(i) for which payment would not be made if section
1862(a) applied to part D; or
``(ii) which are not prescribed in accordance with the plan
or this part.

Such exclusions are determinations subject to reconsideration
and appeal pursuant to section 1860D(a)(4).
``(2) Eligible beneficiary.--The term `eligible
beneficiary' means an individual who is--
``(A) eligible for benefits under part A or enrolled under
part B; and
``(B) not eligible for prescription drug coverage under a
State plan under the medicaid program under title XIX.
``(3) Eligible entity.--The term `eligible entity' means
any--
``(A) pharmaceutical benefit management company;
``(B) wholesale pharmacy delivery system;
``(C) retail pharmacy delivery system;
``(D) insurer (including any issuer of a medicare
supplemental policy under section 1882);
``(E) Medicare+Choice organization;
``(F) State (in conjunction with a pharmaceutical benefit
management company);
``(G) employer-sponsored plan;
``(H) other entity that the Secretary determines to be
appropriate to provide benefits under this part; or
``(I) combination of the entities described in
subparagraphs (A) through (H).
``(4) Poverty line.--The term `poverty line' means the
income 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.
``(5) Secretary.--The term `Secretary' means the Secretary
of Health and Human Services, acting through the
Administrator of the Centers for Medicare & Medicaid
Services.

``establishment of program

``Sec. 1860A. (a) Provision of Benefit.--The Secretary
shall establish a Medicare Prescription Drug Discount and
Security Program under which the Secretary endorses
prescription drug card plans offered by eligible entities in
which eligible beneficiaries may voluntarily enroll and
receive benefits under this part.
``(b) Endorsement of Prescription Drug Discount Card
Plans.--
``(1) In general.--The Secretary shall endorse a
prescription drug card plan offered by an eligible entity
with a contract under this part if the eligible entity meets
the requirements of this part with respect to that plan.
``(2) National plans.--In addition to other types of plans,
the Secretary may endorse national prescription drug plans
under paragraph (1).
``(c) Voluntary Nature of Program.--Nothing in this part
shall be construed as requiring an eligible beneficiary to
enroll in the program under this part.
``(d) Financing.--The costs of providing benefits under
this part shall be payable from the Federal Supplementary
Medical Insurance Trust Fund established under section 1841.

``enrollment

``Sec. 1860B. (a) Enrollment Under Part D.--

[[Page S8465]]

``(1) Establishment of process.--
``(A) In general.--The Secretary shall establish a process
through which an eligible beneficiary (including an eligible
beneficiary enrolled in a Medicare+Choice plan offered by a
Medicare+Choice organization) may make an election to enroll
under this part. Except as otherwise provided in this
subsection, such process shall be similar to the process for
enrollment under part B under section 1837.
``(B) Requirement of enrollment.--An eligible beneficiary
must enroll under this part in order to be eligible to
receive the benefits under this part.
``(2) Enrollment periods.--
``(A) In general.--Except as provided in this paragraph, an
eligible beneficiary may not enroll in the program under this
part during any period after the beneficiary's initial
enrollment period under part B (as determined under section
1837).
``(B) Special enrollment period.--In the case of eligible
beneficiaries that have recently lost eligibility for
prescription drug coverage under a State plan under the
medicaid program under title XIX, the Secretary shall
establish a special enrollment period in which such
beneficiaries may enroll under this part.
``(C) Open enrollment period in 2005 for current
beneficiaries.--The Secretary shall establish a period, which
shall begin on the date on which the Secretary first begins
to accept elections for enrollment under this part, during
which any eligible beneficiary may--
``(i) enroll under this part; or
``(ii) enroll or reenroll under this part after having
previously declined or terminated such enrollment.
``(3) Period of coverage.--
``(A) In general.--Except as provided in subparagraph (B)
and subject to subparagraph (C), an eligible beneficiary's
coverage under the program under this part shall be effective
for the period provided under section 1838, as if that
section applied to the program under this part.
``(B) Enrollment during open and special enrollment.--
Subject to subparagraph (C), an eligible beneficiary who
enrolls under the program under this part under subparagraph
(B) or (C) of paragraph (2) shall be entitled to the benefits
under this part beginning on the first day of the month
following the month in which such enrollment occurs.
``(4) Part d coverage terminated by termination of coverage
under parts a and b or eligibility for medical assistance.--
``(A) In general.--In addition to the causes of termination
specified in section 1838, the Secretary shall terminate an
individual's coverage under this part if the individual is--
``(i) no longer enrolled in part A or B; or
``(ii) eligible for prescription drug coverage under a
State plan under the medicaid program under title XIX.
``(B) Effective date.--The termination described in
subparagraph (A) shall be effective on the effective date
of--
``(i) the termination of coverage under part A or (if
later) under part B; or
``(ii) the coverage under title XIX.
``(b) Enrollment With Eligible Entity.--
``(1) Process.--The Secretary shall establish a process
through which an eligible beneficiary who is enrolled under
this part shall make an annual election to enroll in a
prescription drug card plan offered by an eligible entity
that has been awarded a contract under this part and serves
the geographic area in which the beneficiary resides.
``(2) Election periods.--
``(A) In general.--Except as provided in this paragraph,
the election periods under this subsection shall be the same
as the coverage election periods under the Medicare+Choice
program under section 1851(e), including--
``(i) annual coordinated election periods; and
``(ii) special election periods.

In applying the last sentence of section 1851(e)(4) (relating
to discontinuance of a Medicare+Choice election during the
first year of eligibility) under this subparagraph, in the
case of an election described in such section in which the
individual had elected or is provided qualified prescription
drug coverage at the time of such first enrollment, the
individual shall be permitted to enroll in a prescription
drug card plan under this part at the time of the election of
coverage under the original fee-for-service plan.
``(B) Initial election periods.--
``(i) Individuals currently covered.--In the case of an
individual who is entitled to benefits under part A or
enrolled under part B as of November 1, 2005, there shall be
an initial election period of 6 months beginning on that
date.
``(ii) Individual covered in future.--In the case of an
individual who is first entitled to benefits under part A or
enrolled under part B after such date, there shall be an
initial election period which is the same as the initial
enrollment period under section 1837(d).
``(C) Additional special election periods.--The
Administrator shall establish special election periods--
``(i) in cases of individuals who have and involuntarily
lose prescription drug coverage described in paragraph (3);
``(ii) in cases described in section 1837(h) (relating to
errors in enrollment), in the same manner as such section
applies to part B; and
``(iii) in the case of an individual who meets such
exceptional conditions (including conditions provided under
section 1851(e)(4)(D)) as the Secretary may provide.
``(D) Enrollment with one plan only.--The rules established
under subparagraph (B) shall ensure that an eligible
beneficiary may only enroll in 1 prescription drug card plan
offered by an eligible entity per year.
``(3) Medicare+choice enrollees.--An eligible beneficiary
who is enrolled under this part and enrolled in a
Medicare+Choice plan offered by a Medicare+Choice
organization must enroll in a prescription drug discount card
plan offered by an eligible entity in order to receive
benefits under this part. The beneficiary may elect to
receive such benefits through the Medicare+Choice
organization in which the beneficiary is enrolled if the
organization has been awarded a contract under this part.
``(4) Continuous prescription drug coverage.--An individual
is considered for purposes of this part to be maintaining
continuous prescription drug coverage on and after the date
the individual first qualifies to elect prescription drug
coverage under this part if the individual establishes that
as of such date the individual is covered under any of the
following prescription drug coverage and before the date that
is the last day of the 63-day period that begins on the date
of termination of the particular prescription drug coverage
involved (regardless of whether the individual subsequently
obtains any of the following prescription drug coverage):
``(A) Coverage under prescription drug card plan or
medicare+choice plan.--Prescription drug coverage under a
prescription drug card plan under this part or under a
Medicare+Choice plan.
``(B) Medicaid prescription drug coverage.--Prescription
drug coverage under a medicaid plan under title XIX,
including through the Program of All-inclusive Care for the
Elderly (PACE) under section 1934, through a social health
maintenance organization (referred to in section 4104(c) of
the Balanced Budget Act of 1997), or through a
Medicare+Choice project that demonstrates the application of
capitation payment rates for frail elderly medicare
beneficiaries through the use of a interdisciplinary team and
through the provision of primary care services to such
beneficiaries by means of such a team at the nursing facility
involved.
``(C) Prescription drug coverage under group health plan.--
Any prescription drug coverage under a group health plan,
including a health benefits plan under the Federal Employees
Health Benefit Plan under chapter 89 of title 5, United
States Code, and a qualified retiree prescription drug plan
(as defined by the Secretary), but only if (subject to
subparagraph (E)(ii)) the coverage provides benefits at least
equivalent to the benefits under a prescription drug card
plan under this part.
``(D) Prescription drug coverage under certain medigap
policies.--Coverage under a medicare supplemental policy
under section 1882 that provides benefits for prescription
drugs (whether or not such coverage conforms to the standards
for packages of benefits under section 1882(p)(1)) and if
(subject to subparagraph (E)(ii)) the coverage provides
benefits at least equivalent to the benefits under a
prescription drug card plan under this part.
``(E) State pharmaceutical assistance program.--Coverage of
prescription drugs under a State pharmaceutical assistance
program, but only if (subject to subparagraph (E)(ii)) the
coverage provides benefits at least equivalent to the
benefits under a prescription drug card plan under this part.
``(F) Veterans' coverage of prescription drugs.--Coverage
of prescription drugs for veterans under chapter 17 of title
38, United States Code, but only if (subject to subparagraph
(E)(ii)) the coverage provides benefits at least equivalent
to the benefits under a prescription drug card plan under
this part.

For purposes of carrying out this paragraph, the
certifications of the type described in sections 2701(e) of
the Public Health Service Act and in section 9801(e) of the
Internal Revenue Code of 1986 shall also include a statement
for the period of coverage of whether the individual involved
had prescription drug coverage described in this paragraph.
``(5) Competition.--Each eligible entity with a contract
under this part shall compete for the enrollment of
beneficiaries in a prescription drug card plan offered by the
entity on the basis of discounts, formularies, pharmacy
networks, and other services provided for under the contract.

``providing enrollment and coverage information to beneficiaries

``Sec. 1860C. (a) Activities.--The Secretary shall provide
for activities under this part to broadly disseminate
information to eligible beneficiaries (and prospective
eligible beneficiaries) regarding enrollment under this part
and the prescription drug card plans offered by eligible
entities with a contract under this part.
``(b) Special Rule for First Enrollment Under the
Program.--To the extent practicable, the activities described
in subsection (a) shall ensure that eligible beneficiaries
are provided with such information at least 60 days prior to
the first enrollment period described in section 1860B(c).

``enrollee protections

``Sec. 1860D. (a) Requirements for All Eligible Entities.--
Each eligible entity shall meet the following requirements:
``(1) Guaranteed issuance and nondiscrimination.--

[[Page S8466]]

``(A) Guaranteed issuance.--
``(i) In general.--An eligible beneficiary who is eligible
to enroll in a prescription drug card plan offered by an
eligible entity under section 1860B(b) for prescription drug
coverage under this part at a time during which elections are
accepted under this part with respect to the coverage shall
not be denied enrollment based on any health status-related
factor (described in section 2702(a)(1) of the Public Health
Service Act) or any other factor.
``(ii) Medicare+choice limitations permitted.--The
provisions of paragraphs (2) and (3) (other than subparagraph
(C)(i), relating to default enrollment) of section 1851(g)
(relating to priority and limitation on termination of
election) shall apply to eligible entities under this
subsection.
``(B) Nondiscrimination.--An eligible entity offering
prescription drug coverage under this part shall not
establish a service area in a manner that would discriminate
based on health or economic status of potential enrollees.
``(2) Disclosure of information.--
``(A) Information.--
``(i) General information.--Each eligible entity with a
contract under this part to provide a prescription drug card
plan shall disclose, in a clear, accurate, and standardized
form to each eligible beneficiary enrolled in a prescription
drug discount card program offered by such entity under this
part at the time of enrollment and at least annually
thereafter, the information described in section 1852(c)(1)
relating to such prescription drug coverage.
``(ii) Specific information.--In addition to the
information described in clause (i), each eligible entity
with a contract under this part shall disclose the following:

``(I) How enrollees will have access to covered drugs,
including access to such drugs through pharmacy networks.
``(II) How any formulary used by the eligible entity
functions.
``(III) Information on grievance and appeals procedures.
``(IV) Information on enrollment fees and prices charged to
the enrollee for covered drugs.
``(V) Any other information that the Secretary determines
is necessary to promote informed choices by eligible
beneficiaries among eligible entities.

``(B) Disclosure upon request of general coverage,
utilization, and grievance information.--Upon request of an
eligible beneficiary, the eligible entity shall provide the
information described in paragraph (3) to such beneficiary.
``(C) Response to beneficiary questions.--Each eligible
entity offering a prescription drug discount card plan under
this part shall have a mechanism for providing specific
information to enrollees upon request. The entity shall make
available, through an Internet website and, upon request, in
writing, information on specific changes in its formulary.
``(3) Grievance mechanism, coverage determinations, and
reconsiderations.--
``(A) In general.--With respect to the benefit under this
part, each eligible entity offering a prescription drug
discount card plan shall provide meaningful procedures for
hearing and resolving grievances between the organization
(including any entity or individual through which the
eligible entity provides covered benefits) and enrollees with
prescription drug card plans of the eligible entity under
this part in accordance with section 1852(f).
``(B) Application of coverage determination and
reconsideration provisions.--Each eligible entity shall meet
the requirements of paragraphs (1) through (3) of section
1852(g) with respect to covered benefits under the
prescription drug card plan it offers under this part in the
same manner as such requirements apply to a Medicare+Choice
organization with respect to benefits it offers under a
Medicare+Choice plan under part C.
``(C) Request for review of tiered formulary
determinations.--In the case of a prescription drug card plan
offered by an eligible entity that provides for tiered cost-
sharing for drugs included within a formulary and provides
lower cost-sharing for preferred drugs included within the
formulary, an individual who is enrolled in the plan may
request coverage of a nonpreferred drug under the terms
applicable for preferred drugs if the prescribing physician
determines that the preferred drug for treatment of the same
condition is not as effective for the individual or has
adverse effects for the individual.
``(4) Appeals.--
``(A) In general.--Subject to subparagraph (B), each
eligible entity offering a prescription drug card plan shall
meet the requirements of paragraphs (4) and (5) of section
1852(g) with respect to drugs not included on any formulary
in the same manner as such requirements apply to a
Medicare+Choice organization with respect to benefits it
offers under a Medicare+Choice plan under part C.
``(B) Formulary determinations.--An individual who is
enrolled in a prescription drug card plan offered by an
eligible entity may appeal to obtain coverage under this part
for a covered drug that is not on a formulary of the eligible
entity if the prescribing physician determines that the
formulary drug for treatment of the same condition is not as
effective for the individual or has adverse effects for the
individual.
``(5) Confidentiality and accuracy of enrollee records.--
Each eligible entity offering a prescription drug discount
card plan shall meet the requirements of the Health Insurance
Portability and Accountability Act of 1996.
``(b) Eligible Entities Offering a Discount Card Program.--
If an eligible entity offers a discount card program under
this part, in addition to the requirements under subsection
(a), the entity shall meet the following requirements:
``(1) Access to covered benefits.--
``(A) Assuring pharmacy access.--
``(i) In general.--The eligible entity offering the
prescription drug discount card plan shall secure the
participation in its network of a sufficient number of
pharmacies that dispense (other than by mail order) drugs
directly to patients to ensure convenient access (as
determined by the Secretary and including adequate emergency
access) for enrolled beneficiaries, in accordance with
standards established under section 1860D(a)(3) that ensure
such convenient access.
``(ii) Use of point-of-service system.--Each eligible
entity offering a prescription drug discount card plan shall
establish an optional point-of-service method of operation
under which--

``(I) the plan provides access to any or all pharmacies
that are not participating pharmacies in its network; and
``(II) discounts under the plan may not be available.

The additional copayments so charged shall not be counted as
out-of-pocket expenses for purposes of section 1860F(b).
``(B) Use of standardized technology.--
``(i) In general.--Each eligible entity offering a
prescription drug discount card plan shall issue (and
reissue, as appropriate) such a card (or other technology)
that may be used by an enrolled beneficiary to assure access
to negotiated prices under section 1860F(a) for the purchase
of prescription drugs for which coverage is not otherwise
provided under the prescription drug discount card plan.
``(ii) Standards.--The Secretary shall provide for the
development of national standards relating to a standardized
format for the card or other technology referred to in clause
(i). Such standards shall be compatible with standards
established under part C of title XI.
``(C) Requirements on development and application of
formularies.--If an eligible entity that offers a
prescription drug discount card plan uses a formulary, the
following requirements must be met:
``(i) Pharmacy and therapeutic (p&t) committee.--The
eligible entity must establish a pharmacy and therapeutic
committee that develops and reviews the formulary. Such
committee shall include at least 1 physician and at least 1
pharmacist both with expertise in the care of elderly or
disabled persons and a majority of its members shall consist
of individuals who are a physician or a practicing pharmacist
(or both).
``(ii) Formulary development.--In developing and reviewing
the formulary, the committee shall base clinical decisions on
the strength of scientific evidence and standards of
practice, including assessing peer-reviewed medical
literature, such as randomized clinical trials,
pharmacoeconomic studies, outcomes research data, and such
other information as the committee determines to be
appropriate.
``(iii) Inclusion of drugs in all therapeutic categories.--
The formulary must include drugs within each therapeutic
category and class of covered drugs (although not necessarily
for all drugs within such categories and classes).
``(iv) Provider education.--The committee shall establish
policies and procedures to educate and inform health care
providers concerning the formulary.
``(v) Notice before removing drugs from formulary.--Any
removal of a drug from a formulary shall take effect only
after appropriate notice is made available to beneficiaries
and physicians.
``(vi) Grievances and appeals relating to application of
formularies.--For provisions relating to grievances and
appeals of coverage, see paragraphs (3) and (4) of section
1860D(a).
``(2) Cost and utilization management; quality assurance;
medication therapy management program.--
``(A) In general.--Each eligible entity offering a
prescription drug discount card plan shall have in place with
respect to covered drugs--
``(i) an effective cost and drug utilization management
program, including medically appropriate incentives to use
generic drugs and therapeutic interchange, when appropriate;
``(ii) quality assurance measures and systems to reduce
medical errors and adverse drug interactions, including a
medication therapy management program described in
subparagraph (B); and
``(iii) a program to control fraud, abuse, and waste.

Nothing in this section shall be construed as impairing an
eligible entity from applying cost management tools
(including differential payments) under all methods of
operation.
``(B) Medication therapy management program.--
``(i) In general.--A medication therapy management program
described in this paragraph is a program of drug therapy
management and medication administration that is

[[Page S8467]]

designed to ensure, with respect to beneficiaries with
chronic diseases (such as diabetes, asthma, hypertension, and
congestive heart failure) or multiple prescriptions, that
covered drugs under the prescription drug discount card plan
are appropriately used to achieve therapeutic goals and
reduce the risk of adverse events, including adverse drug
interactions.
``(ii) Elements.--Such program may include--

``(I) enhanced beneficiary understanding of such
appropriate use through beneficiary education, counseling,
and other appropriate means;
``(II) increased beneficiary adherence with prescription
medication regimens through medication refill reminders,
special packaging, and other appropriate means; and
``(III) detection of patterns of overuse and underuse of
prescription drugs.

``(iii) Development of program in cooperation with licensed
pharmacists.--The program shall be developed in cooperation
with licensed pharmacists and physicians.
``(iv) Considerations in pharmacy fees.--Each eligible
entity offering a prescription drug discount card plan shall
take into account, in establishing fees for pharmacists and
others providing services under the medication therapy
management program, the resources and time used in
implementing the program.
``(C) Treatment of accreditation.--Section 1852(e)(4)
(relating to treatment of accreditation) shall apply to
prescription drug discount card plans under this part with
respect to the following requirements, in the same manner as
they apply to Medicare+Choice plans under part C with respect
to the requirements described in a clause of section
1852(e)(4)(B):
``(i) Paragraph (1) (including quality assurance),
including any medication therapy management program under
paragraph (2).
``(ii) Subsection (c)(1) (relating to access to covered
benefits).
``(iii) Subsection (g) (relating to confidentiality and
accuracy of enrollee records).
``(D) Public disclosure of pharmaceutical prices for
equivalent drugs.--Each eligible entity offering a
prescription drug discount card plan shall provide that each
pharmacy or other dispenser that arranges for the dispensing
of a covered drug shall inform the beneficiary at the time of
purchase of the drug of any differential between the price of
the prescribed drug to the enrollee and the price of the
lowest cost drug covered under the plan that is
therapeutically equivalent and bioequivalent.

``annual enrollment fee

``Sec. 1860E. (a) Amount.--
``(1) In general.--Except as provided in subsection (c),
enrollment under the program under this part is conditioned
upon payment of an annual enrollment fee of $25.
``(2) Annual percentage increase.--
``(A) In general.--In the case of any calendar year
beginning after 2006, the dollar amount in paragraph (1)
shall be increased by an amount equal to--
``(i) such dollar amount; multiplied by
``(ii) the inflation adjustment.
``(B) Inflation adjustment.--For purposes of subparagraph
(A)(ii), the inflation adjustment for any calendar year is
the percentage (if any) by which--
``(i) the average per capita aggregate expenditures for
covered drugs in the United States for medicare
beneficiaries, as determined by the Secretary for the 12-
month period ending in July of the previous year; exceeds
``(ii) such aggregate expenditures for the 12-month period
ending with July 2005.
``(C) Rounding.--If any increase determined under clause
(ii) is not a multiple of $1, such increase shall be rounded
to the nearest multiple of $1.
``(b) Collection of Annual Enrollment Fee.--
``(1) In general.--Unless the eligible beneficiary makes an
election under paragraph (2), the annual enrollment fee
described in subsection (a) shall be collected and credited
to the Federal Supplementary Medical Insurance Trust Fund in
the same manner as the monthly premium determined under
section 1839 is collected and credited to such Trust Fund
under section 1840.
``(2) Direct payment.--An eligible beneficiary may elect to
pay the annual enrollment fee directly or in any other manner
approved by the Secretary. The Secretary shall establish
procedures for making such an election.
``(c) Waiver.--The Secretary shall waive the enrollment fee
described in subsection (a) in the case of an eligible
beneficiary whose income is below 200 percent of the poverty
line.

``benefits under the program

``Sec. 1860F. (a) Access to Negotiated Prices.--
``(1) Negotiated prices.--
``(A) In general.--Subject to subparagraph (B), each
prescription drug card plan offering a discount card program
by an eligible entity with a contract under this part shall
provide each eligible beneficiary enrolled in such plan with
access to negotiated prices (including applicable discounts)
for such prescription drugs as the eligible entity determines
appropriate. Such discounts may include discounts for
nonformulary drugs. If such a beneficiary becomes eligible
for the catastrophic benefit under subsection (b), the
negotiated prices (including applicable discounts) shall
continue to be available to the beneficiary for those
prescription drugs for which payment may not be made under
section 1860H(b). For purposes of this subparagraph, the term
`prescription drugs' is not limited to covered drugs, but
does not include any over-the-counter drug that is not a
covered drug.
``(B) Limitations.--
``(i) Formulary restrictions.--Insofar as an eligible
entity with a contract under this part uses a formulary, the
negotiated prices (including applicable discounts) for
nonformulary drugs may differ.
``(ii) Avoidance of duplicate coverage.--The negotiated
prices (including applicable discounts) for prescription
drugs shall not be available for any drug prescribed for an
eligible beneficiary if payment for the drug is available
under part A or B (but such negotiated prices shall be
available if payment under part A or B is not available
because the beneficiary has not met the deductible or has
exhausted benefits under part A or B).
``(2) Discount card.--The Secretary shall develop a uniform
standard card format to be issued by each eligible entity
offering a prescription drug discount card plan that shall be
used by an enrolled beneficiary to ensure the access of such
beneficiary to negotiated prices under paragraph (1).
``(3) Ensuring discounts in all areas.--The Secretary shall
develop procedures that ensure that each eligible beneficiary
that resides in an area where no prescription drug discount
card plans are available is provided with access to
negotiated prices for prescription drugs (including
applicable discounts).
``(b) Catastrophic Benefit.--
``(1) Ten percent cost-sharing.--Subject to any formulary
used by the prescription drug discount card program in which
the eligible beneficiary is enrolled, the catastrophic
benefit shall provide benefits with cost-sharing that is
equal to 10 percent of the negotiated price (taking into
account any applicable discounts) of each drug dispensed to
such beneficiary after the beneficiary has incurred costs (as
described in paragraph (3)) for covered drugs in a year equal
to the applicable annual out-of-pocket limit specified in
paragraph (2).
``(2) Annual out-of-pocket limits.--For purposes of this
part, the annual out-of-pocket limits specified in this
paragraph are as follows:
``(A) Beneficiaries with annual incomes below 200 percent
of the poverty line.--In the case of an eligible beneficiary
whose income (as determined under section 1860I) is below 200
percent of the poverty line, the annual out-of-pocket limit
is equal to $1,500.
``(B) Beneficiaries with annual incomes between 200 and 400
percent of the poverty line.--In the case of an eligible
beneficiary whose income (as so determined) equals or exceeds
200 percent, but does not exceed 400 percent, of the poverty
line, the annual out-of-pocket limit is equal to $3,500.
``(C) Beneficiaries with annual incomes between 400 and 600
percent of the poverty line.--In the case of an eligible
beneficiary whose income (as so determined) equals or exceeds
400 percent, but does not exceed 600 percent, of the poverty
line, the annual out-of-pocket limit is equal to $5,500.
``(D) Beneficiaries with annual incomes that exceed 600
percent of the poverty line.--In the case of an eligible
beneficiary whose income (as so determined) equals or exceeds
600 percent of the poverty line, the annual out-of-pocket
limit is an amount equal to 20 percent of that beneficiary's
income for that year (rounded to the nearest multiple of $1).
``(3) Application.--In applying paragraph (2), incurred
costs shall only include those expenses for covered drugs
that are incurred by the eligible beneficiary using a card
approved by the Secretary under this part that are paid by
that beneficiary and for which the beneficiary is not
reimbursed (through insurance or otherwise) by another
person.
``(4) Annual percentage increase.--
``(A) In general.--In the case of any calendar year after
2006, the dollar amounts in subparagraphs (A), (B), and (C)
of paragraph (2) shall be increased by an amount equal to--
``(i) such dollar amount; multiplied by
``(ii) the inflation adjustment determined under section
1860E(a)(2)(B) for such calendar year.
``(B) Rounding.--If any increase determined under
subparagraph (A) is not a multiple of $1, such increase shall
be rounded to the nearest multiple of $1.
``(5) Eligible entity not at financial risk for
catastrophic benefit.--
``(A) In general.--The Secretary, and not the eligible
entity, shall be at financial risk for the provision of the
catastrophic benefit under this subsection.
``(B) Provisions relating to payments to eligible
entities.--For provisions relating to payments to eligible
entities for administering the catastrophic benefit under
this subsection, see section 1860H.
``(6) Ensuring catastrophic benefit in all areas.--The
Secretary shall develop procedures for the provision of the
catastrophic benefit under this subsection to each eligible
beneficiary that resides in an area where there are no
prescription drug discount card plans offered that have been
awarded a contract under this part.

``requirements for entities to provide prescription drug coverage

``Sec. 1860G. (a) Establishment of Bidding Process.--The
Secretary shall establish a process under which the Secretary
accepts bids from eligible entities and awards contracts to
the entities to provide the benefits

[[Page S8468]]

under this part to eligible beneficiaries in an area.
``(b) Submission of Bids.--Each eligible entity desiring to
enter into a contract under this part shall submit a bid to
the Secretary at such time, in such manner, and accompanied
by such information as the Secretary may require.
``(c) Administrative Fee Bid.--
``(1) Submission.--For the bid described in subsection (b),
each entity shall submit to the Secretary information
regarding administration of the discount card and
catastrophic benefit under this part.
``(2) Bid submission requirements.--
``(A) Administrative fee bid submission.--In submitting
bids, the entities shall include separate costs for
administering the discount card component, if applicable, and
the catastrophic benefit. The entity shall submit the
administrative fee bid in a form and manner specified by the
Secretary, and shall include a statement of projected
enrollment and a separate statement of the projected
administrative costs for at least the following functions:
``(i) Enrollment, including income eligibility
determination.
``(ii) Claims processing.
``(iii) Quality assurance, including drug utilization
review.
``(iv) Beneficiary and pharmacy customer service.
``(v) Coordination of benefits.
``(vi) Fraud and abuse prevention.
``(B) Negotiated administrative fee bid amounts.--The
Secretary has the authority to negotiate regarding the bid
amounts submitted. The Secretary may reject a bid if the
Secretary determines it is not supported by the
administrative cost information provided in the bid as
specified in subparagraph (A).
``(C) Payment to plans based on administrative fee bid
amounts.--The Secretary shall use the bid amounts to
calculate a benchmark amount consisting of the enrollment-
weighted average of all bids for each function and each class
of entity. The class of entity is either a regional or
national entity, or such other classes as the Secretary may
determine to be appropriate. The functions are the discount
card and catastrophic components. If an eligible entity's
combined bid for both functions is above the combined
benchmark within the entity's class for the functions, the
eligible entity shall collect additional necessary revenue
through 1 or both of the following:
``(i) Additional fees charged to the beneficiary, not to
exceed $25 annually.
``(ii) Use of rebate amounts from drug manufacturers to
defray administrative costs.
``(d) Awarding of Contracts.--
``(1) In general.--The Secretary shall, consistent with the
requirements of this part and the goal of containing medicare
program costs, award at least 2 contracts in each area,
unless only 1 bidding entity meets the terms and conditions
specified by the Secretary under paragraph (2).
``(2) Terms and conditions.--The Secretary shall not award
a contract to an eligible entity under this section unless
the Secretary finds that the eligible entity is in compliance
with such terms and conditions as the Secretary shall
specify.
``(3) Requirements for eligible entities providing discount
card program.--Except as provided in subsection (e), in
determining which of the eligible entities that submitted
bids that meet the terms and conditions specified by the
Secretary under paragraph (2) to award a contract, the
Secretary shall consider whether the bid submitted by the
entity meets at least the following requirements:
``(A) Level of savings to medicare beneficiaries.--The
program passes on to medicare beneficiaries who enroll in the
program discounts on prescription drugs, including discounts
negotiated with manufacturers.
``(B) Prohibition on application only to mail order.--The
program applies to drugs that are available other than solely
through mail order and provides convenient access to retail
pharmacies.
``(C) Level of beneficiary services.--The program provides
pharmaceutical support services, such as education and
services to prevent adverse drug interactions.
``(D) Adequacy of information.--The program makes available
to medicare beneficiaries through the Internet and otherwise
information, including information on enrollment fees, prices
charged to beneficiaries, and services offered under the
program, that the Secretary identifies as being necessary to
provide for informed choice by beneficiaries among endorsed
programs.
``(E) Extent of demonstrated experience.--The entity
operating the program has demonstrated experience and
expertise in operating such a program or a similar program.
``(F) Extent of quality assurance.--The entity has in place
adequate procedures for assuring quality service under the
program.
``(G) Operation of assistance program.--The entity meets
such requirements relating to solvency, compliance with
financial reporting requirements, audit compliance, and
contractual guarantees as specified by the Secretary.
``(H) Privacy compliance.--The entity implements policies
and procedures to safeguard the use and disclosure of program
beneficiaries' individually identifiable health information
in a manner consistent with the Federal regulations
(concerning the privacy of individually identifiable health
information) promulgated under section 264(c) of the Health
Insurance Portability and Accountability Act of 1996.
``(I) Additional beneficiary protections.--The program
meets such additional requirements as the Secretary
identifies to protect and promote the interest of medicare
beneficiaries, including requirements that ensure that
beneficiaries are not charged more than the lower of the
negotiated retail price or the usual and customary price.

The prices negotiated by a prescription drug discount card
program endorsed under this section shall (notwithstanding
any other provision of law) not be taken into account for the
purposes of establishing the best price under section
1927(c)(1)(C).
``(4) Beneficiary access to savings and rebates.--The
Secretary shall require eligible entities offering a discount
card program to pass on savings and rebates negotiated with
manufacturers to eligible beneficiaries enrolled with the
entity.
``(5) Negotiated agreements with employer-sponsored
plans.--Notwithstanding any other provision of this part, the
Secretary may negotiate agreements with employer-sponsored
plans under which eligible beneficiaries are provided with a
benefit for prescription drug coverage that is more generous
than the benefit that would otherwise have been available
under this part if such an agreement results in cost savings
to the Federal Government.
``(e) Requirements for Other Eligible Entities.--An
eligible entity that is licensed under State law to provide
the health insurance benefits under this section shall be
required to meet the requirements of subsection (d)(3). If an
eligible entity offers a national plan, such entity shall not
be required to meet the requirements of subsection (d)(3),
but shall meet the requirements of Employee Retirement Income
Security Act of 1974 that apply with respect to such plan.

``payments to eligible entities for administering the catastrophic
benefit

``Sec. 1860H. (a) In General.--The Secretary may establish
procedures for making payments to an eligible entity under a
contract entered into under this part for--
``(1) the costs of providing covered drugs to beneficiaries
eligible for the benefit under this part in accordance with
subsection (b) minus the amount of any cost-sharing collected
by the eligible entity under section 1860F(b); and
``(2) costs incurred by the entity in administering the
catastrophic benefit in accordance with section 1860G.
``(b) Payment for Covered Drugs.--
``(1) In general.--Except as provided in subsection (c) and
subject to paragraph (2), the Secretary may only pay an
eligible entity for covered drugs furnished by the eligible
entity to an eligible beneficiary enrolled with such entity
under this part that is eligible for the catastrophic benefit
under section 1860F(b).
``(2) Limitations.--
``(A) Formulary restrictions.--Insofar as an eligible
entity with a contract under this part uses a formulary, the
Secretary may not make any payment for a covered drug that is
not included in such formulary, except to the extent provided
under section 1860D(a)(4)(B).
``(B) Negotiated prices.--The Secretary may not pay an
amount for a covered drug furnished to an eligible
beneficiary that exceeds the negotiated price (including
applicable discounts) that the beneficiary would have been
responsible for under section 1860F(a) or the price
negotiated for insurance coverage under the Medicare+Choice
program under part C, a medicare supplemental policy,
employer-sponsored coverage, or a State plan.
``(C) Cost-sharing limitations.--An eligible entity may not
charge an individual enrolled with such entity who is
eligible for the catastrophic benefit under this part any
copayment, tiered copayment, coinsurance, or other cost-
sharing that exceeds 10 percent of the cost of the drug that
is dispensed to the individual.
``(3) Payment in competitive areas.--In a geographic area
in which 2 or more eligible entities offer a plan under this
part, the Secretary may negotiate an agreement with the
entity to reimburse the entity for costs incurred in
providing the benefit under this part on a capitated basis.
``(c) Secondary Payer Provisions.--The provisions of
section 1862(b) shall apply to the benefits provided under
this part.

``determination of income levels

``Sec. 1860I. (a) Determination of Income Levels.--
``(1) In general.--The Secretary shall establish procedures
under which each eligible entity awarded a contract under
this part determines the income levels of eligible
beneficiaries enrolled in a prescription drug card plan
offered by that entity at least annually for purposes of
sections 1860E(c) and 1860F(b).
``(2) Procedures.--The procedures established under
paragraph (1) shall require each eligible beneficiary to
submit such information as the eligible entity requires to
make the determination described in paragraph (1).
``(b) Enforcement of Income Determinations.--The Secretary
shall--
``(1) establish procedures that ensure that eligible
beneficiaries comply with sections 1860E(c) and 1860F(b); and
``(2) require, if the Secretary determines that payments
were made under this part to which an eligible beneficiary
was not entitled, the repayment of any excess payments with
interest and a penalty.

[[Page S8469]]

``(c) Quality Control System.--
``(1) Establishment.--The Secretary shall establish a
quality control system to monitor income determinations made
by eligible entities under this section and to produce
appropriate and comprehensive measures of error rates.
``(2) Periodic audits.--The Inspector General of the
Department of Health and Human Services shall conduct
periodic audits to ensure that the system established under
paragraph (1) is functioning appropriately.

``appropriations

``Sec. 1860J. There are authorized to be appropriated from
time to time, out of any moneys in the Treasury not otherwise
appropriated, to the Federal Supplementary Medical Insurance
Trust Fund established under section 1841, an amount equal to
the amount by which the benefits and administrative costs of
providing the benefits under this part exceed the enrollment
fees collected under section 1860E.

``medicare competition and prescription drug advisory board

``Sec. 1860K. (a) Establishment of Board.--There is
established a Medicare Prescription Drug Advisory Board (in
this section referred to as the `Board').
``(b) Advice on Policies; Reports.--
``(1) Advice on policies.--The Board shall advise the
Secretary on policies relating to the Voluntary Medicare
Prescription Drug Discount and Security Program under this
part.
``(2) Reports.--
``(A) In general.--With respect to matters of the
administration of the program under this part, the Board
shall submit to Congress and to the Secretary such reports as
the Board determines appropriate. Each such report may
contain such recommendations as the Board determines
appropriate for legislative or administrative changes to
improve the administration of the program under this part.
Each such report shall be published in the Federal Register.
``(B) Maintaining independence of board.--The Board shall
directly submit to Congress reports required under
subparagraph (A). No officer or agency of the United States
may require the Board to submit to any officer or agency of
the United States for approval, comments, or review, prior to
the submission to Congress of such reports.
``(c) Structure and Membership of the Board.--
``(1) Membership.--The Board shall be composed of 7 members
who shall be appointed as follows:
``(A) Presidential appointments.--
``(i) In general.--Three members shall be appointed by the
President, by and with the advice and consent of the Senate.
``(ii) Limitation.--Not more than 2 such members may be
from the same political party.
``(B) Senatorial appointments.--Two members (each member
from a different political party) shall be appointed by the
President pro tempore of the Senate with the advice of the
Chairman and the Ranking Minority Member of the Committee on
Finance of the Senate.
``(C) Congressional appointments.--Two members (each member
from a different political party) shall be appointed by the
Speaker of the House of Representatives, with the advice of
the Chairman and the Ranking Minority Member of the Committee
on Ways and Means of the House of Representatives.
``(2) Qualifications.--The members shall be chosen on the
basis of their integrity, impartiality, and good judgment,
and shall be individuals who are, by reason of their
education, experience, and attainments, exceptionally
qualified to perform the duties of members of the Board.
``(3) Composition.--Of the members appointed under
paragraph (1)--
``(A) at least 1 shall represent the pharmaceutical
industry;
``(B) at least 1 shall represent physicians;
``(C) at least 1 shall represent medicare beneficiaries;
``(D) at least 1 shall represent practicing pharmacists;
and
``(E) at least 1 shall represent eligible entities.
``(d) Terms of Appointment.--
``(1) In general.--Subject to paragraph (2), each member of
the Board shall serve for a term of 6 years.
``(2) Continuance in office and staggered terms.--
``(A) Continuance in office.--A member appointed to a term
of office after the commencement of such term may serve under
such appointment only for the remainder of such term.
``(B) Staggered terms.--The terms of service of the members
initially appointed under this section shall begin on January
1, 2006, and expire as follows:
``(i) Presidential appointments.--The terms of service of
the members initially appointed by the President shall expire
as designated by the President at the time of nomination, 1
each at the end of--

``(I) 2 years;
``(II) 4 years; and
``(III) 6 years.

``(ii) Senatorial appointments.--The terms of service of
members initially appointed by the President pro tempore of
the Senate shall expire as designated by the President pro
tempore of the Senate at the time of nomination, 1 each at
the end of--

``(I) 3 years; and
``(II) 6 years.

``(iii) Congressional appointments.--The terms of service
of members initially appointed by the Speaker of the House of
Representatives shall expire as designated by the Speaker of
the House of Representatives at the time of nomination, 1
each at the end of--

``(I) 4 years; and
``(II) 5 years.

``(C) Reappointments.--Any person appointed as a member of
the Board may not serve for more than 8 years.
``(D) Vacancies.--Any member appointed to fill a vacancy
occurring before the expiration of the term for which the
member's predecessor was appointed shall be appointed only
for the remainder of that term. A member may serve after the
expiration of that member's term until a successor has taken
office. A vacancy in the Board shall be filled in the manner
in which the original appointment was made.
``(e) Chairperson.--A member of the Board shall be
designated by the President to serve as Chairperson for a
term of 4 years or, if the remainder of such member's term is
less than 4 years, for such remainder.
``(f) Expenses and Per Diem.--Members of the Board shall
serve without compensation, except that, while serving on
business of the Board away from their homes or regular places
of business, members may be allowed travel expenses,
including per diem in lieu of subsistence, as authorized by
section 5703 of title 5, United States Code, for persons in
the Government employed intermittently.
``(g) Meetings.--
``(1) In general.--The Board shall meet at the call of the
Chairperson (in consultation with the other members of the
Board) not less than 4 times each year to consider a specific
agenda of issues, as determined by the Chairperson in
consultation with the other members of the Board.
``(2) Quorum.--Four members of the Board (not more than 3
of whom may be of the same political party) shall constitute
a quorum for purposes of conducting business.
``(h) Federal Advisory Committee Act.--The Board shall be
exempt from the provisions of the Federal Advisory Committee
Act (5 U.S.C. App.).
``(i) Personnel.--
``(1) Staff director.--The Board shall, without regard to
the provisions of title 5, United States Code, relating to
the competitive service, appoint a Staff Director who shall
be paid at a rate equivalent to a rate established for the
Senior Executive Service under section 5382 of title 5,
United States Code.
``(2) Staff.--
``(A) In general.--The Board may employ, without regard to
chapter 31 of title 5, United States Code, such officers and
employees as are necessary to administer the activities to be
carried out by the Board.
``(B) Flexibility with respect to civil service laws.--
``(i) In general.--The staff of the Board shall be
appointed without regard to the provisions of title 5, United
States Code, governing appointments in the competitive
service, and, subject to clause (ii), shall be paid without
regard to the provisions of chapters 51 and 53 of such title
(relating to classification and schedule pay rates).
``(ii) Maximum rate.--In no case may the rate of
compensation determined under clause (i) exceed the rate of
basic pay payable for level IV of the Executive Schedule
under section 5315 of title 5, United States Code.
``(j) Authorization of Appropriations.--There are
authorized to be appropriated, out of the Federal
Supplemental Medical Insurance Trust Fund established under
section 1841, and the general fund of the Treasury, such sums
as are necessary to carry out the purposes of this
section.''.
(b) Conforming References to Previous Part D.--
(1) In general.--Any reference in law (in effect before the
date of enactment of this Act) to part D of title XVIII of
the Social Security Act is deemed a reference to part E of
such title (as in effect after such date).
(2) Secretarial submission of legislative proposal.--Not
later than 6 months after the date of enactment of this
section, the Secretary of Health and Human Services shall
submit to the appropriate committees of Congress a
legislative proposal providing for such technical and
conforming amendments in the law as are required by the
provisions of this section.
(c) Effective Date.--
(1) In general.--The amendment made by subsection (a) shall
take effect on the date of enactment of this Act.
(2) Implementation.--Notwithstanding any provision of part
D of title XVIII of the Social Security Act (as added by
subsection (a)), the Secretary of Health and Human Services
shall implement the Voluntary Medicare Prescription Drug
Discount and Security Program established under such part in
a manner such that--
(A) benefits under such part for eligible beneficiaries (as
defined in section 1860 of such Act, as added by such
subsection) with annual incomes below 200 percent of the
poverty line (as defined in such section) are available to
such beneficiaries not later than the date that is 6 months
after the date of enactment of this Act; and
(B) benefits under such part for other eligible
beneficiaries are available to such beneficiaries not later
than the date that is 1 year after the date of enactment of
this Act.

[[Page S8470]]

SEC. 102. ADMINISTRATION OF VOLUNTARY MEDICARE PRESCRIPTION
DRUG DISCOUNT AND SECURITY PROGRAM.

(a) Establishment of Center for Medicare Prescription
Drugs.--There is established, within the Centers for Medicare
& Medicaid Services of the Department of Health and Human
Services, a Center for Medicare Prescription Drugs. Such
Center shall be separate from the Center for Beneficiary
Choices, the Center for Medicare Management, and the Center
for Medicaid and State Operations.
(b) Duties.--It shall be the duty of the Center for
Medicare Prescription Drugs to administer the Voluntary
Medicare Prescription Drug Discount and Security Program
established under part D of title XVIII of the Social
Security Act (as added by section 101).
(c) Director.--
(1) Appointment.--There shall be in the Center for Medicare
Prescription Drugs a Director of Medicare Prescription Drugs,
who shall be appointed by the President, by and with the
advice and consent of the Senate.
(2) Responsibilities.--The Director shall be responsible
for the exercise of all powers and the discharge of all
duties of the Center for Medicare Prescription Drugs and
shall have authority and control over all personnel and
activities thereof.
(d) Personnel.--The Director of the Center for Medicare
Prescription Drugs may appoint and terminate such personnel
as may be necessary to enable the Center for Medicare
Prescription Drugs to perform its duties.

SEC. 103. EXCLUSION OF PART D COSTS FROM DETERMINATION OF
PART B MONTHLY PREMIUM.

Section 1839(g) of the Social Security Act (42 U.S.C.
1395r(g)) is amended--
(1) by striking ``attributable to the application of
section'' and inserting ``attributable to--
``(1) the application of section'';
(2) by striking the period and inserting ``; and''; and
(3) by adding at the end the following new paragraph:
``(2) the Voluntary Medicare Prescription Drug Discount and
Security Program under part D.''.

SEC. 104. MEDIGAP REVISIONS.

Section 1882 of the Social Security Act (42 U.S.C. 1395ss)
is amended by adding at the end the following new subsection:
``(v) Modernization of Medicare Supplemental Policies.--
``(1) Promulgation of model regulation.--
``(A) NAIC model regulation.--If, within 9 months after the
date of enactment of the Prescription Drug and Medicare
Improvement Act of 2003, the National Association of
Insurance Commissioners (in this subsection referred to as
the `NAIC') changes the 1991 NAIC Model Regulation (described
in subsection (p)) to revise the benefit package classified
as `J' under the standards established by subsection (p)(2)
(including the benefit package classified as `J' with a high
deductible feature, as described in subsection (p)(11)) so
that--
``(i) the coverage for prescription drugs available under
such benefit package is replaced with coverage for
prescription drugs that complements but does not duplicate
the benefits for prescription drugs that beneficiaries are
otherwise entitled to under this title;
``(ii) a uniform format is used in the policy with respect
to such revised benefits; and
``(iii) such revised standards meet any additional
requirements imposed by the Prescription Drug and Medicare
Improvement Act of 2003;

subsection (g)(2)(A) shall be applied in each State,
effective for policies issued to policy holders on and after
January 1, 2006, as if the reference to the Model Regulation
adopted on June 6, 1979, were a reference to the 1991 NAIC
Model Regulation as changed under this subparagraph (such
changed regulation referred to in this section as the `2006
NAIC Model Regulation').
``(B) Regulation by the secretary.--If the NAIC does not
make the changes in the 1991 NAIC Model Regulation within the
9-month period specified in subparagraph (A), the Secretary
shall promulgate, not later than 9 months after the end of
such period, a regulation and subsection (g)(2)(A) shall be
applied in each State, effective for policies issued to
policy holders on and after January 1, 2006, as if the
reference to the Model Regulation adopted on June 6, 1979,
were a reference to the 1991 NAIC Model Regulation as changed
by the Secretary under this subparagraph (such changed
regulation referred to in this section as the `2006 Federal
Regulation').
``(C) Consultation with working group.--In promulgating
standards under this paragraph, the NAIC or Secretary shall
consult with a working group similar to the working group
described in subsection (p)(1)(D).
``(D) Modification of standards if medicare benefits
change.--If benefits under part D of this title are changed
and the Secretary determines, in consultation with the NAIC,
that changes in the 2006 NAIC Model Regulation or 2006
Federal Regulation are needed to reflect such changes, the
preceding provisions of this paragraph shall apply to the
modification of standards previously established in the same
manner as they applied to the original establishment of such
standards.
``(2) Construction of benefits in other medicare
supplemental policies.--Nothing in the benefit packages
classified as `A' through `I' under the standards established
by subsection (p)(2) (including the benefit package
classified as `F' with a high deductible feature, as
described in subsection (p)(11)) shall be construed as
providing coverage for benefits for which payment may be made
under part D.
``(3) Application of provisions and conforming
references.--
``(A) Application of provisions.--The provisions of
paragraphs (4) through (10) of subsection (p) shall apply
under this section, except that--
``(i) any reference to the model regulation applicable
under that subsection shall be deemed to be a reference to
the applicable 2006 NAIC Model Regulation or 2006 Federal
Regulation; and
``(ii) any reference to a date under such paragraphs of
subsection (p) shall be deemed to be a reference to the
appropriate date under this subsection.
``(B) Other references.--Any reference to a provision of
subsection (p) or a date applicable under such subsection
shall also be considered to be a reference to the appropriate
provision or date under this subsection.''.
______

SA 1027. Ms. SNOWE submitted an amendment intended to be proposed by
her to the bill S. 1, to amend title XVIII of the Social Security Act
to make improvements in the medicare program, to provide prescription
drug coverage under the medicare program, and for other purposes; which
was ordered to lie on the table; as follows:

At the end of title VI, insert the following:

SEC. ____. SENSE OF THE SENATE REGARDING IMPLEMENTATION OF
THE PRESCRIPTION DRUG AND MEDICARE IMPROVEMENT
ACT OF 2003.

(a) In General.--It is the sense of the Senate that the
Committee on Finance of the Senate should hold not less than
4 hearings to monitor implementation of the Prescription Drug
and Medicare Improvement Act of 2003 (hereinafter in this
section referred to as the ``Act'') during which the
Secretary or his designee should testify before the
Committee.
(b) Initial Hearing.--It is the sense of the Senate that
the first hearing described in subsection (a) should be held
not later than 60 days after the date of the enactment the
Act. At the hearing, the Secretary or his designee should
submit written testimony and testify before the Committee on
Finance of the Senate on the following issues:
(1) The progress toward implementation of the prescription
drug discount card under section 111 of the Act.
(2) Development of the blueprint that will direct the
implementation of the provisions of the Act, including the
implementation of title I (Medicare Prescription Drug
Benefit), title II (MedicareAdvantage), and title III (Center
for Medicare Choices) of the Act.
(3) Any problems that will impede the timely implementation
of the Act.
(4) The overall progress toward implementation of the Act.
(c) Subsequent Hearings.--It is the sense of the Senate
that the additional hearings described in subsection (a)
should be held in each of May 2004, October 2004, and May
2005. At each hearing, the Secretary or his designee should
submit written testimony and testify before the Committee on
Finance of the Senate on the following issues:
(1) Progress on implementation of title I (Medicare
Prescription Drug Benefit), title II (MedicareAdvantage), and
title III (Center for Medicare Choices) of the Act.
(2) Any problems that will impede timely implementation of
the Act.
______

SA 1028. Mr. CRAIG submitted an amendment intended to be proposed by
him to the bill S. 1, to amend title XVIII of the Social Security Act
to make improvements in the medicare program, to provide prescription
drug coverage under the medicare program, and for other purposes; which
was ordered to lie on the table; as follows:

At the end of subtitle A of title II, add the following:

SEC. ____. ESTABLISHMENT OF MEDICAREADVANTAGE CONSUMER-DRIVEN
HEALTH PLAN OPTION.

(a) Program Specifications.--Part C of title XVIII (42
U.S.C. 1395w-21 et seq.), amended by section 205, is amended
by inserting after section 1858A the following new section:

``consumer-driven health plan option

``Sec. 1858B. (a) Establishment of Program.--
``(1) In general.--Beginning on January 1, 2006, there is
established a consumer-driven health plan program under which
consumer-driven health plans offered by consumer-driven
health plan sponsors are offered to MedicareAdvantage
eligible individuals in preferred provider regions.
``(2) Definitions.--
``(A) Consumer-driven health plan sponsor.--The term
`consumer-driven health plan sponsor' means an entity with a
contract under section 1857 that meets the requirements of
this section applicable with respect to consumer-driven
health plan sponsors.
``(B) Consumer-driven health plan.--The term `consumer-
driven health plan' means a MedicareAdvantage plan that--

[[Page S8471]]

``(i) provides 100 percent coverage for preventive benefits
(as defined by the Secretary);
``(ii) includes a personal care account from which
enrollees must pay out-of-pocket costs until the deductible
is met; and
``(iii) has a high deductible (as determined by the
Secretary).
``(C) Preferred provider region.--The term `preferred
provider region' has the meaning given that term under
section 1858(a)(2)(C).
``(b) Eligibility, Election, and Enrollment; Benefits and
Beneficiary Protections.--
``(1) In general.--Except as provided in the succeeding
provisions of this subsection, the provisions of sections
1851 and 1852 that apply with respect to coordinated care
plans shall apply to consumer-driven health plans offered by
a consumer-driven health plan sponsor.
``(2) Service area.--The service area of a consumer-driven
health plan shall be a preferred provider region.
``(3) Availability.--Each consumer-driven health plan must
be offered to each MedicareAdvantage eligible individual who
resides in the service area of the plan.
``(4) Authority to prohibit risk selection.--The provisions
of section 1852(a)(6) shall apply to preferred provider
organization plans.
``(5) Assuring access to services in consumer-driven health
plans.--The requirements of section 1858(a)(5) shall apply to
consumer-driven health plans.
``(6) Personal Care Accounts.--
``(A) Establishment.--Each consumer-driven health plan
shall establish a personal care account on behalf of each
enrollee from which such enrollee shall be required to pay
out-of-pockets costs until the deductible described in
subsection (a)(2)(B)(iii) is met.
``(B) Rollover.--Subject to subparagraph (C), any amounts
remaining in a personal care account at the end of a year
shall be credited to such an account for the subsequent year.
``(C) Changes of election.--If, after electing a consumer-
driven health plan, a beneficiary elects a plan under this
part that is not a consumer-driven health plan during a
subsequent year or elects to receive benefits under the
original medicare fee-for-service program option (whether or
not as a result of circumstances described in section
1851(e)(4)), any amounts remaining in the account as of the
date of such election shall be credited to the Federal
Hospital Insurance Trust Fund under section 1817 and the
Federal Supplementary Medical Insurance Trust Fund under
section 1841 in such proportion as the Secretary determines
is appropriate.
``(c) Payments to Consumer-Driven Health Plan Sponsors.--
``(1) Payments to organizations.--
``(A) Monthly payments.--
``(i) In general.--Under a contract under section 1857 and
subject to paragraph (5), subsections (e) and (i), and
section 1859(e)(4), the Secretary shall make, to each
consumer-driven health plan sponsor, with respect to coverage
of an individual for a month under this part in a preferred
provider region, separate monthly payments with respect to--

``(I) benefits under the original medicare fee-for-service
program under parts A and B in accordance with paragraph (4);
and
``(II) benefits under the voluntary prescription drug
program under part D in accordance with section 1858A and the
other provisions of this part.

``(ii) Special rule for end-stage renal disease.--The
Secretary shall establish separate rates of payment
applicable with respect to classes of individuals determined
to have end-stage renal disease and enrolled in a consumer-
driven health plan under this clause that are similar to the
separate rates of payment described in section 1853(a)(1)(B).
``(B) Adjustment to reflect number of enrollees.--The
Secretary may retroactively adjust the amount of payment
under this paragraph in a manner that is similar to the
manner in which payment amounts may be retroactively adjusted
under section 1853(a)(2).
``(C) Comprehensive risk adjustment methodology.--The
Secretary shall apply the comprehensive risk adjustment
methodology described in section 1853(a)(3)(B) to 100 percent
of the amount of payments to plans under paragraph
(4)(D)(ii).
``(D) Adjustment for spending variations within a region.--
The Secretary shall establish a methodology for adjusting the
amount of payments to plans under paragraph (4)(D)(ii) that
achieves the same objective as the adjustment described in
paragraph 1853(a)(2)(C).
``(2) Application of preferred provider benchmarks.--The
benchmark amounts calculated under section 1858(c)(2) shall
apply with respect to consumer-driven health plans.
``(3) Application of preferred provider payment factors.--
The provisions of section 1858(c)(3) shall apply with respect
to consumer driven health plans.
``(4) Secretary's determination of payment amount for
benefits under the original medicare fee-for-service
program.--The Secretary shall determine the payment amount
for plans as follows:
``(A) Review of plan bids.--The Secretary shall review each
plan bid submitted under subsection (d)(1) for the coverage
of benefits under the original medicare fee-for-service
program option to ensure that such bids are consistent with
the requirements under this part and are based on the
assumptions described in section 1854(a)(2)(A)(iii).
``(B) Determination of preferred provider regional
benchmark amounts.--The preferred provider regional benchmark
calculated under section 1858(c)(4)(B) shall apply with
respect to consumer-drive health plans amount for that plan
for the benefits under the original medicare fee-for-service
program option for each plan equal to the regional benchmark
adjusted by using the assumptions described in section
1854(a)(2)(A)(iii).
``(C) Comparison to benchmark.--The Secretary shall
determine the difference between each plan bid (as adjusted
under subparagraph (A)) and the preferred provider regional
benchmark amount (as determined under subparagraph (B)) for
purposes of determining--
``(i) the payment amount under subparagraph (D); and
``(ii) the additional benefits required and
MedicareAdvantage monthly basic beneficiary premiums.
``(D) Determination of payment amount.--
``(i) In general.--Subject to clause (ii), the Secretary
shall determine the payment amount to a consumer-driven
health plan sponsor for a consumer-driven health plan as
follows:

``(I) Bids that equal or exceed the benchmark.--In the case
of a plan bid that equals or exceeds the preferred provider
regional benchmark amount, the amount of each monthly payment
to the organization with respect to each individual enrolled
in a plan shall be the preferred provider regional benchmark
amount.
``(II) Bids below the benchmark.--In the case of a plan bid
that is less than the preferred provider regional benchmark
amount, the amount of each monthly payment to the
organization with respect to each individual enrolled in a
plan shall be the preferred provider regional benchmark
amount reduced by the amount of any premium reduction elected
by the plan under section 1854(d)(1)(A)(i).

``(ii) Application of adjustment methodologies.--The
Secretary shall adjust the amounts determined under
subparagraph (A) using the factors described in section
1858(c)(3)(A)(ii).
``(E) Factors used in adjusting bids and benchmarks for
consumer-driven health plan sponsors and in determining
enrollee premiums.--Subject to subparagraph (F), in addition
to the factors used to adjust payments to plans described in
section 1853(d)(6), the Secretary shall use the adjustment
for geographic variation within the region established under
paragraph (1)(D).
``(F) Adjustment for national coverage determinations and
legislative changes in benefits.--The Secretary shall provide
for adjustments for national coverage determinations and
legislative changes in benefits applicable with respect to
consumer-driven health plan sponsors in the same manner as
the Secretary provides for adjustments under section
1853(d)(7).
``(5) Payments from trust fund.--The payment to a consumer-
driven health plan sponsor under this section shall be made
from the Federal Hospital Insurance Trust Fund and the
Federal Supplementary Medical Insurance Trust Fund in a
manner similar to the manner described in section 1853(g).
``(6) Special rule for certain inpatient hospital stays.--
Rules similar to the rules applicable under section 1853(h)
shall apply with respect consumer-driven health plan
sponsors.
``(7) Special rule for hospice care.--Rules similar to the
rules applicable under section 1853(i) shall apply with
respect to consumer-driven health plan sponsors.
``(d) Submission of Bids by Consumer-Driven Health Plans;
Premiums.--
``(1) Submission of bids by consumer-driven health plan
sponsors.--
``(A) In general.--For the requirements on submissions by
consumer-driven health plans, see section 1854(a)(1).
``(B) Uniform premiums.--Each bid amount submitted under
subparagraph (A) for a consumer-driven health plan in a
preferred provider region may not vary among
MedicareAdvantage eligible individuals residing in such
preferred provider region.
``(C) Application of fehbp standard; prohibition on price
gouging.--Each bid amount submitted under subparagraph (A)
for a consumer-driven health plan must reasonably and
equitably reflect the cost of benefits provided under that
plan.
``(D) Review.--The Secretary shall review the adjusted
community rates (as defined in section 1854(g)(3)), the
amounts of the MedicareAdvantage monthly basic premium and
the MedicareAdvantage monthly beneficiary premium for
enhanced medical benefits filed under this paragraph and
shall approve or disapprove such rates and amounts so
submitted. The Secretary shall review the actuarial
assumptions and data used by the consumer-driven health plan
sponsor with respect to such rates and amounts so submitted
to determine the appropriateness of such assumptions and
data.
``(E) No limit on number of plans in a region.--The
Secretary may not limit the number of consumer-driven health
plans offered in a preferred provider region.
``(2) Monthly premiums charged.--The amount of the monthly
premium charged to an individual enrolled in a consumer-
driven health plan offered by a consumer-driven health plan
sponsor shall be equal to the sum of the following:

[[Page S8472]]

``(A) The MedicareAdvantage monthly basic beneficiary
premium, as defined in section 1854(b)(2)(A) (if any).
``(B) The MedicareAdvantage monthly beneficiary premium for
enhanced medical benefits, as defined in section
1854(b)(2)(C) (if any).
``(C) The MedicareAdvantage monthly obligation for
qualified prescription drug coverage, as defined in section
1854(b)(2)(B) (if any).
``(3) Determination of premium reductions, reduced cost-
sharing, additional benefits, and beneficiary premiums.--The
rules for determining premium reductions, reduced cost-
sharing, additional benefits, and beneficiary premiums under
section 1854(d) shall apply with respect to consumer-driven
health plan sponsors.
``(4) Prohibition of segmenting preferred provider
regions.--The Secretary may not permit a consumer-driven
health plan sponsor to elect to apply the provisions of this
section uniformly to separate segments of a preferred
provider region (rather than uniformly to an entire preferred
provider region).
``(e) Portion of Total Payments to an Organization Subject
to Risk for 2 Years.--
``(1) Notification of spending under the plan.--
``(A) In general.--For 2007 and 2008, the consumer-driven
health plan sponsor offering a consumer-driven health plan
shall notify the Secretary of the total amount of costs that
the organization incurred in providing benefits covered under
parts A and B of the original medicare fee-for-service
program for all enrollees under the plan in the previous
year.
``(B) Certain expenses not included.--The total amount of
costs specified in subparagraph (A) may not include--
``(i) subject to subparagraph (C), administrative expenses
incurred in providing the benefits described in such
subparagraph; or
``(ii) amounts expended on providing enhanced medical
benefits under section 1852(a)(3)(D).
``(C) Establishment of allowable administrative expenses.--
For purposes of applying subparagraph (B)(i), the
administrative expenses incurred in providing benefits
described in subparagraph (A) under a consumer-driven health
plan may not exceed an amount determined appropriate by the
Administrator.
``(2) Adjustment of payment.--
``(A) No adjustment if costs within risk corridor.--If the
total amount of costs specified in paragraph (1)(A) for the
plan for the year are not more than the first threshold upper
limit of the risk corridor (specified in paragraph
(3)(A)(iii)) and are not less than the first threshold lower
limit of the risk corridor (specified in paragraph (3)(A)(i))
for the plan for the year, then no additional payments shall
be made by the Secretary and no reduced payments shall be
made to the consumer-driven health plan sponsor offering the
plan.
``(B) Increase in payment if costs above upper limit of
risk corridor.--
``(i) In general.--If the total amount of costs specified
in paragraph (1)(A) for the plan for the year are more than
the first threshold upper limit of the risk corridor for the
plan for the year, then the Secretary shall increase the
total of the monthly payments made to the consumer-driven
health plan sponsor offering the plan for the year under
subsection (c)(1)(A) by an amount equal to the sum of--

``(I) 50 percent of the amount of such total costs which
are more than such first threshold upper limit of the risk
corridor and not more than the second threshold upper limit
of the risk corridor for the plan for the year (as specified
under paragraph (3)(A)(iv)); and
``(II) 10 percent of the amount of such total costs which
are more than such second threshold upper limit of the risk
corridor.

``(C) Reduction in payment if costs below lower limit of
risk corridor.--If the total amount of costs specified in
paragraph (1)(A) for the plan for the year are less than the
first threshold lower limit of the risk corridor for the plan
for the year, then the Secretary shall reduce the total of
the monthly payments made to the consumer-driven health plan
sponsor offering the plan for the year under subsection
(c)(1)(A) by an amount (or otherwise recover from the plan an
amount) equal to--
``(i) 50 percent of the amount of such total costs which
are less than such first threshold lower limit of the risk
corridor and not less than the second threshold lower limit
of the risk corridor for the plan for the year (as specified
under paragraph (3)(A)(ii)); and
``(ii) 10 percent of the amount of such total costs which
are less than such second threshold lower limit of the risk
corridor.
``(3) Establishment of risk corridors.--
``(A) In general.--For 2006 and 2007, the Secretary shall
establish a risk corridor for each consumer-driven health
plan. The risk corridor for a plan for a year shall be equal
to a range as follows:
``(i) First threshold lower limit.--The first threshold
lower limit of such corridor shall be equal to--

``(I) the target amount described in subparagraph (B) for
the plan; minus
``(II) an amount equal to 5 percent of such target amount.

``(ii) Second threshold lower limit.--The second threshold
lower limit of such corridor shall be equal to--

``(I) the target amount described in subparagraph (B) for
the plan; minus
``(II) an amount equal to 10 percent of such target amount.

``(iii) First threshold upper limit.--The first threshold
upper limit of such corridor shall be equal to the sum of--

``(I) such target amount; and
``(II) the amount described in clause (i)(II).

``(iv) Second threshold upper limit.--The second threshold
upper limit of such corridor shall be equal to the sum of--

``(I) such target amount; and
``(II) the amount described in clause (ii)(II).

``(B) Target amount described.--The target amount described
in this paragraph is, with respect to a consumer-driven
health plan offered by a consumer-driven health plan sponsor
in a year, an amount equal to the sum of--
``(i) the total monthly payments made to the organization
for enrollees in the plan for the year under subsection
(c)(1)(A); and
``(ii) the total MedicareAdvantage basic beneficiary
premiums collected for such enrollees for the year under
subsection (d)(2)(A).
``(4) Plans at risk for entire amount of enhanced medical
benefits.--A consumer-driven health plan sponsor that offers
a consumer-driven health plan that provides enhanced medial
benefits under section 1852(a)(3)(D) shall be at full
financial risk for the provision of such benefits.
``(5) No effect on eligible beneficiaries.--No change in
payments made by reason of this subsection shall affect the
amount of the MedicareAdvantage basic beneficiary premium
that a beneficiary is otherwise required to pay under the
plan for the year under subsection (d)(2)(A).
``(6) Disclosure of information.--The provisions of section
1860D-16(b)(7), including subparagraph (B) of such section,
shall apply to a consumer-driven health plan sponsor and a
consumer-driven health plan in the same manner as such
provisions apply to an eligible entity and a Medicare
Prescription Drug plan under part D.
``(f) Organizational and Financial Requirements for
Consumer-Driven Health Plan Sponsors.--A consumer-driven
health plan sponsor shall be organized and licensed under
State law as a risk-bearing entity eligible to offer health
insurance or health benefits coverage in each State within
the preferred provider region in which it offers a consumer-
driven health plan.
``(g) Inapplicability of Provider-Sponsored Organization
Solvency Standards.--The requirements of section 1856 shall
not apply with respect to consumer-driven health plan
sponsors.
``(h) Contracts With Consumer-Driven Health Plan
Sponsors.--The provisions of section 1857 shall apply to a
consumer-driven health plan offered by a consumer-driven
health plan sponsor under this section.
``(i) Budget Neutrality.--Notwithstanding any other
provision of this section, in conducting the program under
this section, the Secretary shall ensure that the aggregate
payments made by the Secretary under this title do not exceed
the amount the Secretary would have paid if this section had
not been enacted.''.
(b) Consumer-Driven Health Plan Terminology Defined.--
Section 1859(a) (42 U.S.C. 1395w-29(a)), as amended by
section 211(b), is amended by adding at the end the following
new paragraph:
``(4) Consumer-driven health plan sponsor; consumer-driven
health plan.--The terms `consumer-driven health plan sponsor'
and `consumer-driven health plan' have the meaning given such
terms in section 1858B(a)(2).''.
______

SA 1029. Mr. SANTORUM submitted an amendment intended to be proposed
by him to the bill S. 1, to amend title XVIII of the Social Security
Act to make improvements in the medicare program, to provide
prescription drug coverage under the medicare program, and for other
purposes; which was ordered to lie on the table; as follows:

At the end of title VI, insert the following:

SEC. ____. MEDICARE COVERAGE OF CRITICAL ACCESS HEALTH CENTER
SERVICES.

(a) In General.--
(1) Coverage.--Section 1861(s)(2)(E) (42 U.S.C.
1395x(s)(2)(E)) is amended--
(A) by striking ``services and'' and inserting
``services,''; and
(B) by striking ``center services'' and inserting ``center
services, and critical access health center services''.
(2) Definitions.--Section 1861(aa) (42 U.S.C. 1395x(aa)) is
amended--
(A) in the heading--
(i) by striking ``Services and'' and inserting
``Services,''; and
(ii) by striking ``Center Services'' and inserting ``Center
Services, and Critical Access Health Center Services'';
(B) in paragraph (1)(B), by striking ``paragraph (5)'' and
inserting ``paragraph (7)'';
(C) by redesignating paragraphs (5), (6), and (7) as
paragraphs (7), (8), and (9), respectively; and
(D) by inserting after paragraph (4) the following:
``(5) The term `critical access health center services'
means--
``(A) services of the type described in subparagraphs (A)
through (C) of paragraph (1); and
``(B) preventive primary health services of the type that a
health center is required to provide under section 330 of the
Public Health Service Act,

[[Page S8473]]

when furnished to an individual who is an outpatient of a
critical access health center and, for this purpose, any
reference to a rural health clinic or a physician described
in paragraph (2)(B) is deemed a reference to a critical
access health center or a physician at the center,
respectively.
``(6) The term `critical access health center' means an
entity that--
``(A) is sponsored by a private, nonprofit entity with a
religious affiliation; and
``(B) based on the recommendation of the Centers for
Medicare and Medicaid Services, is determined by the
Secretary to meet the requirements for receiving a grant
under section 330 of the Public Health Service Act (other
than the requirement of subsection (n)(3)(H)(i) of such
section).''.
(3) Payments.--
(A) Scope of benefits.--Section 1832(a) (42 U.S.C.1395k(a))
is amended--
(i) in paragraph (1), by striking ``subparagraphs (B) and
(D)'' and inserting ``subparagraphs (B), (D), and (K)''; and
(ii) in paragraph (2)--

(I) by striking ``and'' at the end of subparagraph (I);
(II) by striking the period at the end of subparagraph (J)
and inserting ``; and''; and
(III) by adding at the end the following:

``(K) critical access health center services.''.
(B) Payment of benefits.--Section 1833(a) (42
U.S.C.1395l(a)) is amended--
(i) in the matter preceding subparagraph (A) of paragraph
(2), by striking ``and (I)'' and inserting ``(I), and (K)'';
and
(ii) in paragraph (3), by inserting ``or section
1832(a)(2)(K)'' after ``section 1832(a)(2)(D)''.
(C) Part b deductible not applicable.--The first sentence
of section 1833(b) (42 U.S.C. 1395l(b)) is amended by
inserting ``or critical access health center services'' after
``Federally qualified health center services''.
(D) Exception to exclusions from coverage.--Section 1862(a)
of such Act (42 U.S.C. 1395y(a)) is amended--
(i) in paragraph (2), by inserting ``or critical access
health center services (as defined in section 1861(aa)(5))''
after ``Federally qualified health center services'';
(ii) in paragraph (3), by inserting ``in the case of
critical access health center services (as defined in section
1861(aa)(5)),'' after ``section 1880(e),''; and
(iii) in the second sentence, by inserting ``or critical
access health center services described in section
1861(aa)(5)(B)'' after ``section 1861 (aa)(3)(B)''.
(E) Exception to anti-kickback law for waiver of
coinsurance.--Section 1128B(b)(3)(D) (42 U.S.C. 13206-
7b(b)(3)(D)) is amended--
(i) by inserting ``(i)'' before ``a waiver'';
(ii) by inserting ``and'' after ``Act;''; and
(iii) by adding at the end the following:
``(ii) a waiver of--

``(I) any coinsurance under part B of title XVIII by a
critical access health center with respect to an individual
who qualifies for subsidized services under a provision of
section 330 of the Public Health Service Act (as made
applicable to such centers by section 1861(aa)(6)); and
``(II) the deductible and any coinsurance under such part
by any provider of services, physician, or supplier to which
such an individual is referred by a critical access health
center for the provision of services that are not critical
access health center services;''.

(F) Conforming amendments.--
(i) Section 1842(b)(18)(C)(1) (42 U.S.C.
1395u(b)(18)(C)(1)) is amended by striking ``section
1861(aa)(5)'' and inserting ``section 1861(aa)(7)''.
(ii) Section 1861(s)(2) (42 U.S.C. 1395x(s)(2)) is amended
in subparagraph (H)(i), by striking ``subsection (aa)(5)''
and inserting ``subsection (aa)(7)''.
(iii) Section 1861(s)(2) (42 U.S.C. 1395x(s)(2)) is amended
in subparagraph (K)--

(I) by striking ``subsection (aa)(5)'' each place it
appears and inserting ``subsection (aa)(7)''; and
(II) by striking ``subsection (aa)(6)'' and inserting
``subsection (aa)(8)''.

(b) Effective Date.--The amendments made this section shall
apply to items and services furnished on or after October 1,
2004.

SEC. ____ . DEMONSTRATION TO IMPROVE ACCESS AND CONTINUITY
OF CARE FOR LOW-INCOME BENEFICIARIES.

(a) In General.--The Secretary shall--
(1) conduct a demonstration project to test the use of
alternative payment methodologies to health care providers to
improve access to ambulatory health care services and
continuity of care for vulnerable populations such as low-
income beneficiaries under title XVIII; and
(2) waive any provisions of the Social Security Act that
are necessary to implement such demonstration.
(b) Duration.--The demonstration project conducted pursuant
to subsection (a) shall be for a term of at least 3 years and
shall begin operation not later than 1 year after the date of
the enactment of this Act.
(c) Reports.--
(1) Interim and final reports required.--The Secretary
shall submit interim and final reports on the demonstration
project conducted pursuant to subsection (a) to the Committee
on Finance of the Senate and the Committee on Ways and Means
and the Committee on Commerce of the House of
Representatives. Such reports shall describe--
(A) the alternative payment methodologies in use under the
demonstration;
(B) the provisions of law waived by the Secretary in order
to conduct the demonstration; and
(C) the extent to which the demonstration has achieved the
objectives described in subsection (a).
(2) Timing of reports.--The Secretary shall submit the
interim report required by paragraph (1) not later than 2
years after the commencement of the demonstration and the
final report not later than 6 months after the termination
the demonstration.
______

SA 1030. Mr. ENZI submitted an amendment intended to be proposed by
him to the bill S. 1, to amend title XVIII of the Social Security Act
to make improvements in the medicare program, to provide prescription
drug coverage under the medicare program, and for other purposes; which
was ordered to lie on the table; as follows:

On page 356, strike lines 8 through 11, and insert the
following:
``(C) Construction.--Subparagraph (B) shall not be
construed as restricting--
``(i) the persons from whom enrollees under such plan may
obtain covered benefits; or
``(ii) the categories of licensed health professionals or
providers from whom enrollees under such a plan may obtain
covered benefits if the covered services are provided to
enrollees in a State where 25 percent or more of the
population resides in health professional shortage areas
designated pursuant to section 332 of the Public Health
Service Act.''
______

SA 1031. Mr. CARPER submitted an amendment intended to be proposed by
him to the bill S. 1, to amend title XVIII of the Social Security Act
to make improvements in the medicare program, to provide prescription
drug coverage under the medicare program, and for other purposes; which
was ordered to lie on the table; as follows:

At the end of subtitle B of title IV, add the following:

SEC. ____. INCREASING TYPES OF ORIGINATING TELEHEALTH SITES
AND FACILITATING THE PROVISION OF TELEHEALTH
SERVICES ACROSS STATE LINES.

(a) Increasing Types of Originating Sites.--Section
1834(m)(4)(C)(ii) (42 U.S.C. 1395m(m)(4)(C)(ii)) is amended
by adding at the end the following new subclauses:

``(VI) A skilled nursing facility (as defined in section
1819(a)).
``(VII) An assisted-living facility (as defined by the
Secretary).
``(VIII) A board-and-care home (as defined by the
Secretary).
``(IX) A county of community health clinic (as defined by
the Secretary).
``(X) A community mental health center (as described in
section 1861(ff)(2)(B)).
``(XI) A long-term care facility (as defined by the
Secretary).
``(XII) A facility operated by the Indian Health Service or
by an Indian tribe, tribal organization, or an urban Indian
organization (as such terms are defined in section 4 of the
Indian Health Care Improvement Act (25 U.S.C. 1603))
directly, or under contract or other arrangement.''.

(b) Facilitating the Provision of Telehealth Services
Across State Lines.--
(1) In general.--For purposes of expediting the provision
of telehealth services for which payment is made under the
medicare program under section 1834(m) of the Social Security
Act (42 U.S.C. 1395m(m)), across State lines, the Secretary
shall, in consultation with representatives of States,
physicians, health care practitioners, and patient advocates,
encourage and facilitate the adoption of State provisions
allowing for multistate practitioner licensure across State
lines.
(2) Definitions.--In this subsection:
(A) Telehealth service.--The term ``telehealth service''
has the meaning given that term in subparagraph (F)(i) of
section 1834(m)(4) of the Social Security Act (42 U.S.C.
1395m(m)(4)).
(B) Physician, practitioner.--The terms ``physician'' and
``practitioner'' have the meaning given those terms in
subparagraphs (D) and (E), respectively, of such section.
(C) Medicare program.--The term ``medicare program'' means
the program of health insurance administered by the Secretary
under title XVIII of the Social Security Act (42 U.S.C. 1395
et seq.).
______

SA 1032. Ms. MIKULSKI submitted an amendment intended to be proposed
by her to the bill S. 1, to amend title XVIII of the Social Security
Act to make improvements in the medicare program, to provide
prescription drug coverage under the medicare program, and for other
purposes; which was ordered to lie on the table; as follows:

At the end of subtitle A of title IV, add the following:

SEC. ____. PERMITTING DIRECT PAYMENT UNDER THE MEDICARE
PROGRAM FOR CLINICAL SOCIAL WORKER SERVICES
PROVIDED TO RESIDENTS OF SKILLED NURSING
FACILITIES.

(a) In General.--Section 1888(e)(2)(A)(ii) (42 U.S.C.
1395yy(e)(2)(A)(ii)) is amended by inserting ``clinical
social worker services,'' after ``qualified psychologist
services,''.
(b) Conforming Amendment.--Section 1861(hh)(2) (42 U.S.C.
1395x(hh)(2)) is amended by striking ``and other than
services furnished to an inpatient of a skilled nursing
facility which the facility is required to provide as a
requirement for participation''.

[[Page S8474]]

(c) Effective Date.--The amendments made by this section
shall apply to items and services furnished on or after
October 1, 2003.
______

SA 1033. Ms. MIKULSKI submitted an amendment intended to be proposed
by her to the bill S. 1, to amend title XVIII of the Social Security
Act to make improvements in the medicare program, to provide
prescription drug coverage under the medicare program, and for other
purposes; which was ordered to lie on the table; as follows:

At the end of title VI, add the following:

SEC. ____. EXTENSION OF MUNICIPAL HEALTH SERVICE
DEMONSTRATION PROJECTS.

The last sentence of section 9215(a) of the Consolidated
Omnibus Budget Reconciliation Act of 1985 (42 U.S.C. 1395b-1
note), as previously amended, is amended by striking
``December 31, 2004, but only with respect to'' and all that
follows and inserting ``December 31, 2009, but only with
respect to individuals who reside in the city in which the
project is operated and so long as the total number of
individuals participating in the project does not exceed the
number of such individuals participating as of January 1,
1996.''.
______

SA 1034. Ms. MIKULSKI submitted an amendment intended to be proposed
by her to the bill S. 1, to amend title XVIII of the Social Security
Act to make improvements in the medicare program, to provide
prescription drug coverage under the medicare program, and for other
purposes; which was ordered to lie on the table; as follows:

At the end of subtitle B of title IV, add the following:

SEC. ____. EQUITABLE TREATMENT FOR CHILDREN'S HOSPITALS.

(a) In General.--Section 1833(t)(7)(D)(ii) (42 U.S.C.
1395l(t)(7)(D)(ii)) is amended to read as follows:
``(ii) Permanent treatment for cancer hospitals and
children's hospitals.--

``(I) Cancer hospitals.--In the case of a hospital
described in section 1886(d)(1)(B)(v), for covered OPD
services for which the PPS amount is less than the pre-BBA
amount, the amount of payment under this subsection shall be
increased by the amount of such difference.
``(II) Children's hospitals.--In the case of a hospital
described in section 1886(d)(1)(B)(iii), for covered OPD
services furnished before October 1, 2003, and for which the
PPS amount is less than the pre-BBA amount the amount of
payment under this subsection shall be increased by the
amount of such difference. In the case of such a hospital,
for such services furnished on or after October 1, 2003, and
for which the PPS amount is less than the greater of the pre-
BBA amount or the reasonable operating and capital costs
without reductions incurred in furnishing such services, the
amount of payment under this subsection shall be increased by
the amount of such difference.''.

______

SA 1035. Ms. MIKULSKI submitted an amendment intended to be proposed
by her to the bill S. 1, to amend title XVIII of the Social Security
Act to make improvements in the medicare program, to provide
prescription drug coverage under the medicare program, and for other
purposes; which was ordered to lie on the table; as follows:

At the end of subtitle B of title IV, add the following:

SEC. ____. EQUITABLE TREATMENT FOR CHILDREN'S HOSPITALS.

(a) In General.--Section 1833(t)(7)(D)(ii) (42 U.S.C.
1395l(t)(7)(D)(ii)) is amended to read as follows:
``(ii) Permanent treatment for cancer hospitals and
children's hospitals.--

``(I) In general.--Subject to subclause (II), in the case
of a hospital described in clause (iii) or (v) of section
1886(d)(1)(B), for covered OPD services for which the PPS
amount is less than the pre-BBA amount, the amount of payment
under this subsection shall be increased by the amount of
such difference.
``(II) Special rule for certain children's hospitals.--In
the case of a hospital described in section
1886(d)(1)(B)(iii) that is located in a State with a
reimbursement system under section 1814(b)(3), but that is
not reimbursed under such system, for covered OPD services
furnished on or after October 1, 2003, and for which the PPS
amount is less than the greater of the pre-BBA amount or the
reasonable operating and capital costs without reductions of
the hospital in providing such services, the amount of
payment under this subsection shall be increased by the
amount of such difference.''.

______

SA 1036. Mr. REID (for Mrs. Boxer) proposed an amendment to the bill
S. 1, to amend title XVIII of the Social Security Act to make
improvements in the medicare program, to provide prescription drug
coverage under the medicare program, and for other purposes; as
follows:

On page 53, between line 8 and 9, insert the following:
``(6) No coverage gap for eligible beneficiaries with
cancer.--
``(A) In general.--In the case of an eligible beneficiary
with cancer, the following rules shall apply:
``(i) Paragraph (2) shall be applied by substituting `up to
the annual out-of-pocket limit under paragraph (4)' for `up
to the initial coverage limit under paragraph (3)'.
``(ii) The Administrator shall not apply paragraph (3),
subsection (d)(1)(C), or paragraph (1)(D), (2)(D), or
(3)(A)(iv) of section 1860D-19(a).
``(B) Procedures.--The Administrator shall establish
procedures to carry out this paragraph. Such procedures shall
provide for the adjustment of payments to eligible entities
under section 1860D-16 that are necessary because of the
rules under subparagraph (A).''
______

SA 1037. Mr. REID (for Mr. Corzine) proposed an amendment to the bill
S. 1, to amend title XVIII of the Social Security Act to make
improvements in the medicare program, to provide prescription drug
coverage under the medicare program, and for other purposes; as
follows:

At the end of subtitle A of title I, add the following:

SEC. ____. CONFORMING CHANGES REGARDING FEDERALLY QUALIFIED
HEALTH CENTERS.

(a) Permitting FQHCs To Fill Prescriptions.--Section
1861(aa)(3) (42 U.S.C. 1395x(aa)(3)) is amended--
(1) in subparagraph (A), by striking ``and'' after the
comma at the end;
(2) in subparagraph (B), by inserting ``and'' after the
comma at the end; and
(3) by adding at the end the following new subparagraph:
``(C) drugs and biologicals for which payment may otherwise
be made under this title,''.
(b) Elimination of Per Visit Limit.--Section 1833(a)(3) (42
U.S.C. 1395l(a)(3)) is amended by inserting ``, except that
such regulations may not limit the per visit payment amount
with regard to drugs and biologicals described in section
1861(aa)(3)(C)'' after ``the Secretary may prescribe in
regulations''.
______

SA 1038. Mr. REID (for Mr. Jeffords) proposed an amendment to the
bill S. 1, to amend title XVIII of the Social Security Act to make
improvements in the medicare program, to provide prescription drug
coverage under the medicare program, and for other purposes; as
follows:

At the end of section 405 add the following:
(g) Exclusion of Certain Beds From Bed Count and Removal of
Barriers to Establishment of Distinct Part Units.--
(1) Exclusion of certain beds from bed count.--Section
1820(c)(2) (42 U.S.C. 1395i-4(c)(2)) is amended by adding at
the end the following:
``(E) Exclusion of certain beds from bed count.--In
determining the number of beds of a facility for purposes of
applying the bed limitations referred to in subparagraph
(B)(iii) and subsection (f), the Secretary shall not take
into account any bed of a distinct part psychiatric or
rehabilitation unit (described in the matter following clause
(v) of section 1886(d)(1)(B)) of the facility, except that
the total number of beds that are not taken into account
pursuant to this subparagraph with respect to a facility
shall not exceed 25.''.
(2) Removing barriers to establishment of distinct part
units by critical access hospitals.--Section 1886(d)(1)(B)
(42 U.S.C. 195ww(d)(1)(B)) is amended by striking ``a
distinct part of the hospital (as defined by the Secretary)''
in the matter following cause (v) and inserting ``a distinct
part (as defined by the Secretary) of the hospital or of a
critical access hospital''.
(3) Effective date.--The amendments made by this subsection
shall apply to determinations with respect to distinct part
unit status, and with respect to designations, that are made
on or after October 1, 2003.
______

SA 1039. Mr. REID (for Mr. Inouye) proposed an amendment to the bill
S. 1, to amend title XVIII of the Social Security Act to make
improvements in the medicare program, to provide prescription drug
coverage under the medicare program, and for other purposes; as
follows:

At the appropriate place, insert the following:

SECTION 1. SHORT TITLE.

This Act may be cited as the ``Native Hawaiian Medicaid
Coverage Act of 2003''.

SEC. 2. 100 PERCENT FMAP FOR MEDICAL ASSISTANCE PROVIDED TO A
NATIVE HAWAIIAN THROUGH A FEDERALLY-QUALIFIED
HEALTH CENTER OR A NATIVE HAWAIIAN HEALTH CARE
SYSTEM UNDER THE MEDICAID PROGRAM.

(a) Medicaid.--Section 1905(b) of the Social Security Act
(42 U.S.C. 1396d(b)) is amended, in the third sentence, by
inserting ``, and with respect to medical assistance provided
to a Native Hawaiian (as defined in section 12 of the Native
Hawaiian Health Care Improvement Act) through a Federally-
qualified health center or a Native Hawaiian health care
system (as so defined) whether directly, by referral, or
under contract or other arrangement between a Federally-
qualified health center or a Native Hawaiian health care
system and another health care provider'' before the period.

[[Page S8475]]

(b) Effective Date.--The amendment made by this section
applies to medical assistance provided on or after the date
of enactment of this Act.
______

SA 1040. Mr. SCHUMER (for himself, Mr. Corzine, Mrs. Clinton, and Mr.
Lautenberg) submitted an amendment intended to be proposed by him to
the bill S. 1, to amend title XVIII of the Social Security Act to make
improvements in the medicare program, to provide prescription drug
coverage under the medicare program, and for other purposes; which was
ordered to lie on the table; as follows:

On page 294, line 6, strike ``or (C)'' and insert ``(C), or
(D)''.
On page 294, line 21, insert ``(other than in 2004 and
2005)'' after ``multiplied''.
On page 297, strike lines 5 through 9, and insert the
following:
``(iv) For 2002 and 2003, 102 percent of the annual
Medicare+Choice capitation rate under this paragraph for the
area for the previous year.
``(v) For 2004 and 2005, 103 percent of the annual
Medicare+Choice capitation rate under this paragraph for the
area for the previous year.
``(vi) For 2006 and each succeeding year, 102 percent of
the annual Medicare+Choice capitation rate under this
paragraph for the area for the previous year.
``(D) Annual fee-for-service costs in 2004 and 2005.--For
2004 and 2005, the adjusted average per capita cost for the
year, as determined under section 1876(a)(4) for the
Medicare+Choice payment area for items and services covered
under parts A and B for individuals entitled to benefits
under part A and enrolled under part B and not enrolled in a
Medicare+Choice plan under this part for the year, except
that such amount shall be adjusted--
``(i) to exclude costs attributable to payment adjustments
described in subsection (a)(5)(B)(ii), and
``(ii) to include an amount equal to the Secretary's
estimate, on a per capita basis, of the amount of additional
payments that would have been made in the area involved under
this title if individuals entitled to benefits under this
title had not received services from facilities of the
Department of Defense or the Department of Veterans Affairs.
On page 298, line 10, strike ``subparagraph (B)'' and
insert ``subparagraphs (B) and (E)''.
On page 301, between lines 8 and 9, insert the following:
``(E) Inclusion of costs of dod and va military facility
services to medicare-eligible beneficiaries.--In determining
the area-specific Medicare+Choice capitation rate under
subparagraph (A) for 2004 and 2005, the annual per capita
rate of payment for 1997 determined under section
1876(a)(1)(C) shall be adjusted to include in the rate the
Secretary's estimate, on a per capita basis, of the amount of
additional payments that would have been made in the area
involved under this title if individuals entitled to benefits
under this title had not received services from facilities of
the Department of Defense or the Department of Veterans
Affairs.

On page 302, line 23, insert ``(or, in the case of
calculations for payments for months beginning on or after
January 1, 2004, and before December 31, 2005, the average
number of medicare beneficiaries enrolled in a
Medicare+Choice plan that are)'' after ``medicare
beneficiaries''.
On page 303, line 9, insert ``other than 2004 and 2005''
after ``for each year''.
On page 349, between lines 4 and 5, insert the following:
(3) Payment rates based on 100 percent of fee-for-service
costs in 2004 and 2005.--
(A) Change in budget neutrality.--Section 1853(c) (42
U.S.C. 1395w-23(c)) is amended--
(i) in paragraph (1)(A), in the flush matter following
clause (ii), by inserting ``(other than in 2004 and 2005)''
after ``multiplied''; and
(ii) in paragraph (5), by inserting ``other than 2004 and
2005'' after ``for each year''.
(B) Inclusion of costs of dod and va military facility
services to medicare-eligible beneficiaries.--Section
1853(c)(3) (42 U.S.C. 1395w-23(c)(3)) is amended--
(A) in subparagraph (A), by striking ``subparagraph (B)''
and inserting ``subparagraphs (B) and (E)''; and
(B) by adding at the end the following new subparagraph:
``(E) Inclusion of costs of dod and va military facility
services to medicare-eligible beneficiaries.--In determining
the area-specific Medicare+Choice capitation rate under
subparagraph (A) for 2004 and 2005, the annual per capita
rate of payment for 1997 determined under section
1876(a)(1)(C) shall be adjusted to include in the rate the
Secretary's estimate, on a per capita basis, of the amount of
additional payments that would have been made in the area
involved under this title if individuals entitled to benefits
under this title had not received services from facilities of
the Department of Defense or the Department of Veterans
Affairs.''.
(C) Revision of national average used in calculation of
blend.--Section 1853(c)(4)(B)(i)(II) (42 U.S.C. 1395w-
23(c)(4)(B)(i)(II)) is amended by inserting ``(or, in the
case of calculations for payments for months beginning on or
after January 1, 2004, and before December 31, 2005, the
average number of medicare beneficiaries enrolled in a
Medicare+Choice plan that are)'' after ``medicare
beneficiaries''.
(D) Update in minimum percentage increase.--Section
1853(c)(1)(C) (42 U.S.C. 1395w-23(c)(1)(C)) is amended by
striking clause (iv) and inserting the following new clauses:
``(iv) For 2002 and 2003, 102 percent of the annual
Medicare+Choice capitation rate under this paragraph for the
area for the previous year.
``(v) For 2004 and 2005, 103 percent of the annual
Medicare+Choice capitation rate under this paragraph for the
area for the previous year.
``(vi) For 2006 and each succeeding year, 102 percent of
the annual Medicare+Choice capitation rate under this
paragraph for the area for the previous year.''.
______

SA 1041. Ms. MURKOWSKI (for herself and Mr. Stevens) submitted an
amendment intended to be proposed by her to the bill S. 1, to amend
title XVIII of the Social Security Act to make improvements in the
medicare program, to provide prescription drug coverage under the
medicare program, and for other purposes; which was ordered to lie on
the table; as follows:

On page 529, between lines 8 and 9, insert the following:

SEC. 455. FRONTIER EXTENDED STAY CLINIC DEMONSTRATION
PROJECT.

(a) Authority To Conduct Demonstration Project.--The
Secretary shall waive such provisions of the medicare program
established under title XVIII of the Social Security Act (42
U.S.C. 1395 et seq.) as are necessary to conduct a
demonstration project under which frontier extended stay
clinics described in subsection (b) in isolated rural areas
of Alaska are treated as providers of items and services
under the medicare program.
(b) Clinics Described.--A frontier extended stay clinic is
described in this subsection if the clinic--
(1) is located in a community where the closest short-term
acute care hospital or critical access hospital is at least
75 miles away from the community or is inaccessible by public
road; and
(2) is designed to address the needs of--
(A) seriously or critically ill or injured patients who,
due to adverse weather conditions or other reasons, cannot be
transferred quickly to acute care referral centers; or
(B) patients who need monitoring and observation for a
limited period of time.
(c) Definitions.--In this section, the terms ``hospital''
and ``critical access hospital'' have the meanings given such
terms in subsections (e) and (mm), respectively, of section
1861 of the Social Security Act (42 U.S.C. 1395x).
______

SA 1042. Ms. MURKOWSKI (for herself and Mr. Stevens) submitted an
amendment intended to be proposed by her to the bill S. 1, to amend
title XVIII of the Social Security Act to make improvements in the
medicare program, to provide prescription drug coverage under the
medicare program, and for other purposes; which was ordered to lie on
the table; as follows:

At the end of subtitle B of title IV, add the following:

SEC. ____. TREATMENT OF PHYSICIANS' SERVICES FURNISHED IN
ALASKA.

Section 1848(b) (42 U.S.C. 1395w-4(b)) is amended--
(1) in paragraph (1), in the matter preceding subparagraph
(A), by striking ``paragraph (2)'' and inserting ``paragraphs
(2) and (4)''; and
(2) by adding at the end the following new paragraph:
``(4) Treatment of physicians' services furnished in
alaska.--
``(A) In general.--With respect to physicians' services
furnished in Alaska on or after January 1, 2004, and before
January 1, 2014, the fee schedule for such services shall be
determined as follows:
``(i) Subject to clause (ii), the payment amount for a
service furnished in a year shall be an amount equal to--

``(I) in the case of services furnished in calendar year
2004, 90 percent of the VA Alaska fee schedule amount for the
service for fiscal year 2001; and
``(II) in the case of services furnished in each of
calendar years 2005 through 2013, the amount determined under
this clause for the previous year, increased by the annual
update determined under subsection (d) for the year involved.

``(ii) In the case of a service for which there was no VA
Alaska fee schedule amount for fiscal year 2001, the payment
amount shall be an amount equal to the sum of--

``(I) the amount of payment for the service that would
otherwise apply under this section; plus
``(II) an amount equal to the applicable percent (as
described in subparagraph (C)) of the amount described in
subclause (I).

``(B) VA alaska fee schedule amount.--For purposes of this
paragraph, the term `VA Alaska fee schedule amount' means the
amount that was paid by the Department of Veterans Affairs in
Alaska in fiscal year 2001 for non-Department of Veterans
Affairs physicians' services associated with either
outpatient or inpatient care provided to individuals eligible
for hospital care or medical

[[Page S8476]]

services under chapter 17 of title 38, United States Code, at
a non-Department facility (as that term is defined in section
1701(4) of such title 38.
``(C) Applicable percent.--For purposes of this paragraph,
the term `applicable percent' means the weighted average
percentage (based on claims under this section) by which the
fiscal year 2001 VA Alaska fee schedule amount for
physicians' services exceeded the amount of payment for such
services under this section that applied in Alaska in
2001.''.
______

SA 1043. Mr. ALLARD submitted an amendment intended to be proposed by
him to the bill S. 1, to amend title XVIII of the Social Security Act
to make improvements in the medicare program, to provide prescription
coverage under the medicare program, and for other purposes; which was
ordered to lie on the table; as follows:

On page 377, between lines 12 and 13, insert the following:
``(I) Section 1851(d) (relating to the provision of
information to promote informed choice).
``(J) Section 1851(h) (relating to the approval of
marketing material and application forms).
``(K) Section 1852(e)(4) (relating to treatment of
accreditation).
``(L) Section 1857(i) (relating to Medicare+Choice program
compatibility with employer or union group health plans).''.

____________________