S.Amdt. 1028

1. Adds SEC. ____. ESTABLISHMENT OF MEDICAREADVANTAGE CONSUMER-DRIVEN HEALTH PLAN OPTION at the end of subtitle A of title II

   Adds a section

   In S. 1 · Reported to Senate

   (b) MedicareAdvantage MSA Plans.--Notwithstanding any provision of this title, the Secretary shall apply the payment and other rules that apply with respect to an MSA plan described in section 1851(a)(2)(B) of the Social Security Act (42 U.S.C. 1395w-21(a)(2)(B)) as if this title had not been enacted.

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

   Inserted: (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:

   Inserted: "consumer-driven health plan option

   Inserted: "Sec. 1858B. (a) Establishment of Program.--

   Inserted: "(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.

   Inserted: "(2) Definitions.--

   Inserted: "(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.

   Inserted: "(B) Consumer-driven health plan.--The term 'consumer-driven health plan' means a MedicareAdvantage plan that--

   Inserted: "(i) provides 100 percent coverage for preventive benefits (as defined by the Secretary);

   Inserted: "(ii) includes a personal care account from which enrollees must pay out-of-pocket costs until the deductible is met; and

   Inserted: "(iii) has a high deductible (as determined by the Secretary).

   Inserted: "(C) Preferred provider region.--The term 'preferred provider region' has the meaning given that term under section 1858(a)(2)(C).

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   Inserted: "(b) Eligibility, Election, and Enrollment; Benefits and Beneficiary Protections.--

   Inserted: "(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.

   Inserted: "(2) Service area.--The service area of a consumer-driven health plan shall be a preferred provider region.

   Inserted: "(3) Availability.--Each consumer-driven health plan must be offered to each MedicareAdvantage eligible individual who resides in the service area of the plan.

   Inserted: "(4) Authority to prohibit risk selection.--The provisions of section 1852(a)(6) shall apply to preferred provider organization plans.

   Inserted: "(5) Assuring access to services in consumer-driven health plans.--The requirements of section 1858(a)(5) shall apply to consumer-driven health plans.

   Inserted: "(6) Personal Care Accounts.--

   Inserted: "(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.

   Inserted: "(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.

   Inserted: "(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.

   Inserted: "(c) Payments to Consumer-Driven Health Plan Sponsors.--

   Inserted: "(1) Payments to organizations.--

   Inserted: "(A) Monthly payments.--

   Inserted: "(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--

   Inserted: "(I) benefits under the original medicare fee-for-service program under parts A and B in accordance with paragraph (4); and

   Inserted: "(II) benefits under the voluntary prescription drug program under part D in accordance with section 1858A and the other provisions of this part.

   Inserted: "(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).

   Inserted: "(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).

   Inserted: "(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).

   Inserted: "(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).

   Inserted: "(2) Application of preferred provider benchmarks.--The benchmark amounts calculated under section 1858(c)(2) shall apply with respect to consumer-driven health plans.

   Inserted: "(3) Application of preferred provider payment factors.--The provisions of section 1858(c)(3) shall apply with respect to consumer driven health plans.

   Inserted: "(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:

   Inserted: "(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).

   Inserted: "(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).

   Inserted: "(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--

   Inserted: "(i) the payment amount under subparagraph (D); and

   Inserted: "(ii) the additional benefits required and MedicareAdvantage monthly basic beneficiary premiums.

   Inserted: "(D) Determination of payment amount.--

   Inserted: "(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:

   Inserted: "(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.

   Inserted: "(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).

   Inserted: "(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).

   Inserted: "(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).

   Inserted: "(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).

   Inserted: "(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).

   Inserted: "(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.

   Inserted: "(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.

   Inserted: "(d) Submission of Bids by Consumer-Driven Health Plans; Premiums.--

   Inserted: "(1) Submission of bids by consumer-driven health plan sponsors.--

   Inserted: "(A) In general.--For the requirements on submissions by consumer-driven health plans, see section 1854(a)(1).

   Inserted: "(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.

   Inserted: "(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.

   Inserted: "(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.

   Inserted: "(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.

   Inserted: "(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:

   Inserted: "(A) The MedicareAdvantage monthly basic beneficiary premium, as defined in section 1854(b)(2)(A) (if any).

   Inserted: "(B) The MedicareAdvantage monthly beneficiary premium for enhanced medical benefits, as defined in section 1854(b)(2)(C) (if any).

   Inserted: "(C) The MedicareAdvantage monthly obligation for qualified prescription drug coverage, as defined in section 1854(b)(2)(B) (if any).

   Inserted: "(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.

   Inserted: "(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).

   Inserted: "(e) Portion of Total Payments to an Organization Subject to Risk for 2 Years.--

   Inserted: "(1) Notification of spending under the plan.--

   Inserted: "(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.

   Inserted: "(B) Certain expenses not included.--The total amount of costs specified in subparagraph (A) may not include--

   Inserted: "(i) subject to subparagraph (C), administrative expenses incurred in providing the benefits described in such subparagraph; or

   Inserted: "(ii) amounts expended on providing enhanced medical benefits under section 1852(a)(3)(D).

   Inserted: "(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.

   Inserted: "(2) Adjustment of payment.--

   Inserted: "(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.

   Inserted: "(B) Increase in payment if costs above upper limit of risk corridor.--

   Inserted: "(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--

   Inserted: "(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

   Inserted: "(II) 10 percent of the amount of such total costs which are more than such second threshold upper limit of the risk corridor.

   Inserted: "(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--

   Inserted: "(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

   Inserted: "(ii) 10 percent of the amount of such total costs which are less than such second threshold lower limit of the risk corridor.

   Inserted: "(3) Establishment of risk corridors.--

   Inserted: "(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:

   Inserted: "(i) First threshold lower limit.--The first threshold lower limit of such corridor shall be equal to--

   Inserted: "(I) the target amount described in subparagraph (B) for the plan; minus

   Inserted: "(II) an amount equal to 5 percent of such target amount.

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

   Inserted: "(I) the target amount described in subparagraph (B) for the plan; minus

   Inserted: "(II) an amount equal to 10 percent of such target amount.

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

   Inserted: "(I) such target amount; and

   Inserted: "(II) the amount described in clause (i)(II).

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

   Inserted: "(I) such target amount; and

   Inserted: "(II) the amount described in clause (ii)(II).

   Inserted: "(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--

   Inserted: "(i) the total monthly payments made to the organization for enrollees in the plan for the year under subsection (c)(1)(A); and

   Inserted: "(ii) the total MedicareAdvantage basic beneficiary premiums collected for such enrollees for the year under subsection (d)(2)(A).

   Inserted: "(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.

   Inserted: "(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).

   Inserted: "(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.

   Inserted: "(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.

   Inserted: "(g) Inapplicability of Provider-Sponsored Organization Solvency Standards.--The requirements of section 1856 shall not apply with respect to consumer-driven health plan sponsors.

   Inserted: "(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.

   Inserted: "(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.".

   Inserted: (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:

   Inserted: "(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).".

   Original wording

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

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As printed