To reduce aggregate beneficiary obligations by $2,400,000,000 per year beginning in 2009.

TEXT OF AMENDMENTS

SA 1094. Mr. SESSIONS submitted an amendment intended to be proposed
by him to the bill S. 1, to amend title XVII of the Social Security Act
to provide for a voluntary prescription drug benefit under the Medicare
program and to strengthen and improve the Medicare program, and for
other purposes; which was ordered to lie on the table; as follows:

On page 637, line 1, strike ``no debt'' and all that
follows through line 5, and insert the following: ``the
sponsor of such an alien shall be responsible for paying 100
percent of the costs attributable to the provision of such
assistance, unless the sponsor demonstrates that the sponsor
has an extreme and unusual financial hardship that prevents
the sponsor from paying such costs.''
______

SA 1095. Mr. REID (for himself and Mr. Cochran) proposed an amendment
to the bill S. 1, to amend title XVIII of the Social Security Act to
provide for a voluntary prescription drug benefit under the Medicare
program and to strengthen and improve the Medicare program, and for
other purposes; as follows:

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

SEC. __. MEDICATION THERAPY MANAGEMENT ASSESSMENT PROGRAM.

(a) Establishment.--
(1) In general.--The Secretary shall establish an
assessment program to contract with qualified pharmacists to
provide medication therapy management services to eligible
beneficiaries who receive care under the original medicare
fee-for-service program under parts A and B of title XVIII of
the Social Security Act to eligible beneficiaries.
(2) Sites.--The Secretary shall designate 6 geographic
areas, each containing not less than 3 sites, at which to
conduct the assessment program under this section. At least 2
geographic areas designated under this paragraph shall be
located in rural areas.
(3) Duration.--The Secretary shall conduct the assessment
program under this section for a 1-year period.
(4) Implementation.--The Secretary shall implement the
program not later than January 1, 2005, but may not implement
the assessment program before October 1, 2004.
(b) Participants.--Any eligible beneficiary who resides in
an area designated by the Secretary as an assessment site
under subsection (a)(2) may participate in the assessment
program under this section if such beneficiary identifies a
qualified pharmacist who agrees to furnish medication therapy
management services to the eligible beneficiary under the
assessment program.
(c) Contracts With Qualified Pharmacists.--
(1) In general.--The Secretary shall enter into a contract
with qualified pharmacists to provide medication therapy
management services to eligible beneficiaries residing in the
area served by the qualified pharmacist.
(2) Number of qualified pharmacists.--The Secretary may
contract with more than 1 qualified pharmacist at each site.
(d) Payment to Qualified Pharmacists.--
(1) In general.--Under an contract entered into under
subsection (c), the Secretary shall pay qualified pharmacists
a fee for providing medication therapy management services.
(2) Assessment of payment methodologies.--The Secretary
shall, in consultation with national pharmacist and pharmacy
associations, design the fee paid under paragraph (1) to test
various payment methodologies applicable with respect to
medication therapy management services, including a payment
methodology that applies a relative value scale and fee-
schedule with respect to such services that take into account
the differences in--
(A) the time required to perform the different types of
medication therapy management services;
(B) the level of risk associated with the use of particular
outpatient prescription drugs or groups of drugs; and
(C) the health status of individuals to whom such services
are provided.
(e) Funding.--
(1) In general.--Subject to paragraph (2), the Secretary
shall provide for the transfer from the Federal Supplementary
Insurance Trust Fund established under section 1841 of the
Social Security Act (42 U.S.C. 1395t) of such funds as are
necessary for the costs of carrying out the assessment
program under this section.
(2) Budget neutrality.--In conducting the assessment
program under this section, the Secretary shall ensure that
the aggregate payments made by the Secretary do not exceed
the amount which the Secretary would have paid if the
assessment program under this section was not implemented.
(f) Waiver Authority.--The Secretary may waive such
requirements of titles XI and XVIII of the Social Security
Act (42 U.S.C. 1301 et seq.; 1395 et seq.) as may be
necessary for the purpose of carrying out the assessment
program under this section.
(g) Availability of Data.--During the period in which the
assessment program is conducted, the Secretary annually shall
make available data regarding--
(1) the geographic areas and sites designated under
subsection (a)(2);
(2) the number of eligible beneficiaries participating in
the program under subsection (b) and the level and types
medication therapy management services used by such
beneficiaries;
(3) the number of qualified pharmacists with contracts
under subsection (c), the location of such pharmacists, and
the number of eligible beneficiaries served by such
pharmacists; and
(4) the types of payment methodologies being tested under
subsection (d)(2).
(h) Report.--
(1) In general.--Not later than 6 months after the
completion of the assessment program under this section, the
Secretary shall submit to Congress a final report summarizing
the final outcome of the program and evaluating the results
of the program, together with recommendations for such
legislation and administrative action as the Secretary
determines to be appropriate.
(2) Assessment of payment methodologies.--The final report
submitted under paragraph (1) shall include an assessment of
the feasibility and appropriateness of the various payment
methodologies tested under subsection (d)(2).
(i) Definitions.--In this section:
(1) Medication therapy management services.--The term
``medication therapy management services'' means services or
programs furnished by a qualified pharmacist to an eligible
beneficiary, individually or on behalf of a pharmacy
provider, which are designed--
(A) to ensure that medications are used appropriately by
such individual;
(B) to enhance the individual's understanding of the
appropriate use of medications;
(C) to increase the individual's compliance with
prescription medication regimens;
(D) to reduce the risk of potential adverse events
associated with medications; and
(E) to reduce the need for other costly medical services
through better management of medication therapy.
(2) Eligible beneficiary.--The term ``eligible
beneficiary'' means an individual who is--
(A) entitled to (or enrolled for) benefits under part A and
enrolled for benefits under part B of the Social Security Act
(42 U.S.C. 1395c et seq.; 1395j et seq.);
(B) not enrolled with a Medicare+Choice plan or a
MedicareAdvantage plan under part C; and
(C) receiving, in accordance with State law or regulation,
medication for--
(i) the treatment of asthma, diabetes, or chronic
cardiovascular disease, including an individual on
anticoagulation or lipid reducing medications; or
(ii) such other chronic diseases as the Secretary may
specify.
(3) Qualified pharmacist.--The term ``qualified
pharmacist'' means an individual who is a licensed pharmacist
in good standing with the State Board of Pharmacy.

[[Page S8767]]

______

SA 1096. Ms. MURKOWSKI (for herself and Mr. Stevens) submitted an
amendment intended to be proposed by her to the bill S. 1, to amend the
title XVIII of the Social Security Act to provide for a voluntary
prescription drug benefit under the Medicare program and to strengthen
and improve the Medicare program, and for other purposes; 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
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 1097. Mr. McCONNELL proposed an amendment to the bill S. 1, to
amend title XVIII of the Social Security Act to provide for a voluntary
prescription drug benefit under the Medicare program and to strengthen
and improve the Medical program, and for other purposes; as follows:

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

SEC. __. PROTECTING SENIORS WITH CANCER.

Any eligible beneficiary (as defined in section 1860D(3) of
the Social Security Act) who is diagnosed with cancer shall
be protected from high prescription drug costs in the
following manner:
(1) Subsidy eligible individuals with an income below 100
percent of the federal poverty line.--If the individual is a
qualified medicare beneficiary (as defined in section 1860D-
19(a)(4) of such Act), such individual shall receive the full
premium subsidy and reduction of cost-sharing described in
section 1860D-19(a)(1) of such Act, including the payment
of--
(A) no deductible;
(B) no monthly beneficiary premium for at least one
Medicare Prescription Drug plan available in the area in
which the individual resides; and
(C) reduced cost-sharing described in subparagraphs (C),
(D), and (E) of section 1860D-19(a)(1) of such Act.
(2) Subsidy eligible individuals with an income between 100
and 135 percent of the federal poverty line.--If the
individual is a specified low income medicare beneficiary (as
defined in paragraph 1860D-19(4)(B) of such Act) or a
qualifying individual (as defined in paragraph 1860D-19(4)(C)
of such Act) who is diagnosed with cancer, such individual
shall receive the full premium subsidy and reduction of cost-
sharing described in section 1860D-19(a)(2) of such Act,
including payment of--
(A) no deductible;
(B) no monthly premium for any Medicare Prescription Drug
plan described paragraph (1) or (2) of section 1860D-17(a) of
such Act; and
(C) reduced cost-sharing described in subparagraphs (C),
(D), and (E) of section 1860D-19(a)(2) of such Act.
(3) Subsidy-eligible individuals with income between 135
percent and 160 percent of the federal poverty level.--If the
individual is a subsidy-eligible individual (as defined in
section 1860D-19(a)(4)(D) of such Act) who is diagnosed with
cancer, such individual shall receive sliding scale premium
subsidy and reduction of cost-sharing for subsidy-eligible
individuals, including payment of--
(A) for 2006, a deductible of only $50;
(B) only a percentage of the monthly premium (as described
in section 1860D-19(a)(3)(A)(i)); and
(C) reduced cost-sharing described in clauses (iii), (iv),
and (v) of section 1860D-19(a)(3)(A).
(4) Eligible beneficiaries with income above 160 percent of
the federal poverty level.--If an individual is an eligible
beneficiary (as defined in section 1860D(3) of such Act), is
not described in paragraphs (1) through (3), and is diagnosed
with cancer, such individual shall have access to qualified
prescription drug coverage (as described in section 1860D-
6(a)(1) of such Act), including payment of--
(A) for 2006, a deductible of $275;
(B) the limits on cost-sharing described section 1860D-
6(c)(2) of such Act up to, for 2006, an initial coverage
limit of $4,500; and
(C) for 2006, an annual out-of-pocket limit of $3,700 with
10 percent cost-sharing after that limit is reached.
______

SA 1098. Mr. DAYTON submitted an amendment intended to be proposed by
him to the bill S. 1, to amend title XVIII of the Social Security Act
to provide for a voluntary prescription drug benefit under the Medicare
program and to strengthen and improve the Medicare program, and for
other purposes; which was ordered to lie on the table; as follows:

Strike section 426 and insert the following:

SEC. 426. INCREASE FOR GROUND AMBULANCE SERVICES.

Section 1834(l) (42 U.S.C. 1395m(l)), as amended by section
405(b)(2), is amended by adding at the end the following new
paragraphs:
``(10) Temporary increase for ground ambulance services.--
``(A) In general.--Notwithstanding any other provision of
this subsection, in the case of ground ambulance services
furnished on or after January 1, 2004, and before January 1,
2007, the fee schedule established under this section, with
respect to both the payment rate for service and the payment
rate for mileage, shall provide that such rates otherwise
established, shall be increased by 21.5 percent.
``(B) Additional increase for services furnished in a rural
area.--Notwithstanding any other provision of this
subsection, in the case of ground ambulance services
furnished on or after January 1, 2004, and before January 1,
2007, for which the transportation originates in a rural area
described in subparagraph (C), the fee schedule established
under this section, with respect to both the payment rate for
service and the payment rate for mileage, shall provide that
such rates otherwise established, shall be increased by the
higher of either 20 percent of the rate determined after the
application of subparagraph (C), in addition to the increase
provided under subparagraph (A).
``(C) Determination of rural areas based on population
density within postal zip codes.--With respect to ground
ambulance services described in subparagraph (B), during the
period described in that subparagraph, paragraph (9) shall be
applied by substituting `(as determined under an area
classification system established by the Secretary that is
based on population density within postal zip code areas)'
for `(as defined in section 1886(d)(2)(D)) or in a rural
census tract of a metropolitan statistical area (as
determined under the most recent modification of the
Goldsmith Modification, originally published in the Federal
Register on February 27, 1992 (57 Fed. Reg. 6725))'. Not
later than December 31, 2003, the Secretary, taking into
account the recommendations contained in the report submitted
under section 221(b)(3) of the Medicare, Medicaid, and SCHIP
Benefits Improvement and Protection Act of 2000, shall
implement the increase in payment required under subparagraph
(B) and shall establish the classification system required by
the application of this subparagraph. The Secretary shall
provide such increased payment for services furnished on or
after the earlier of 30 days after the establishment of such
classification system or December 31, 2003.
``(D) Application of increased payments after 2007.--The
increased payments under subparagraphs (A) and (B) shall not
be taken into account in calculating payments for services
furnished on or after the period specified in such
subparagraph.
``(11) Conversion factor adjustments.--The Secretary shall
not adjust downward the conversion factor in any year because
of an evaluation of the prior year conversion factor.''.

SEC. 426A. 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--

[[Page S8768]]

(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 1099. Mr. DAYTON submitted an amendment intended to be proposed by
him to the bill S. 1, to amend title XVIII of the Social Security Act
to provide for a voluntary prescription drug benefit under the Medicare
program and to strengthen and improve the Medicare program, and for
other purposes; which was ordered to lie on the table; as follows:

Strike section 426 and insert the following:

SEC. 426. INCREASE FOR GROUND AMBULANCE SERVICES.

Section 1834(l) of the Social Security Act (42 U.S.C.
Sec. 1395m(l)), as amended by section 405(b)(2), is amended
by adding at the end the following new paragraphs.
``(10) Temporary increase for ambulance services.--
``(A) Ground ambulance services.--Notwithstanding any other
provision of this subsection, in the case of ground ambulance
services furnished on or after January 1, 2004 and before
January 1, 2007, the fee schedule established under this
section, with respect to both the payment rate for service
and the payment rate for mileage, shall provide that such
rates otherwise established shall be increased by 21.5
percent.
``(B) Additional increase for services furnished in a rural
area.--Notwithstanding any other provision of this
subsection, in the case of ground ambulance services
furnished on or after January 1, 2004 and before January 1,
2007, for which the transportation originates in a rural area
described in paragraph (10)(C), the fee schedule established
under this section, with respect to both the payment rate for
service and the payment rate for mileage, shall provide that
such rates otherwise established shall be increased by the
higher of either 20 percent or the following section:
``(C) Basing rural areas on population density by postal
zip codes.''
(a) In General.--Section 1834(l) of the Social Security Act
(42 U.S.C. 1395m(l)) is amended in paragraph (9), as so
redesignated by section 2(a)(1), by striking ``(as defined in
section 1886(d)(2)(D)'' and all that follows through ``(57
Fed. Reg. 6725)'' and inserting ``(as determined under an
area classification system established by the Secretary that
is based on population density within postal zip code
areas)''.
(b) Effective Date.--The Secretary of Health and Human
Services, taking into account the recommendations contained
in the report submitted under section 221(b)(3) the Medicare,
Medicaid, and SCHIP Benefits Improvements and Protection Act
of 2000, shall implement such increase in addition to the
increase under subparagraph (A). The Secretary shall
establish the classification system described in the
amendment made by subsection (a) by not later than December
31, 2003. Such amendment shall apply to services furnished on
or after such date, not later than 30 days after the
establishment of such system, as the Secretary shall provide
by regulation.
``(D) Application of increased payments after 2007.--The
increased payments under subparagraphs (A) and (B) shall not
be taken into account in calculating payments for services
furnished on or after the period specified in such
subparagraph.''
``(11) Conversion factor adjustments.--The Secretary shall
not adjust downward the conversion factor in any year because
of an evaluation of the prior year conversion factor.''
______

SA 1100. Mr. DAYTON submitted an amendment intended to be proposed by
him to the bill S. 1, to amend title XVIII of the Social Security Act
to provide for a voluntary prescription drug benefit under the Medicare
program and to strengthen and improve 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 I, add the following:

SEC. __. INCREASE IN DRUG BENEFIT.

Notwithstanding any other provision of law, the Secretary
shall use $12,000,000,000 to improve the prescription drug
benefit added under part D of title XVIII of the Social
Security Act (as added by section 101) by eliminating
coverage gaps, reducing the premium or cost-sharing, or
expanding subsidies for low-income beneficiaries in lieu of
conducting any demonstration projects or making any increased
payments to providers authorized under this Act or the
amendments made by this Act.
______

SA 1101. Mr. DAYTON submitted an amendment intended to be proposed by
him to the bill S. 1, to amend title XVIII of the Social Security Act
to provide for a voluntary prescription drug benefit under the Medicare
program and to strengthen and improve the Medicare program and for
other purposes; which was ordered to lie on the table; as follows:

On page 134, strike line 9 and insert the following:
under paragraph (1).
``(d) Implementation of Part D.--
``(1) In general.--Notwithstanding section 1860D-1(a)(4) or
any other provision of this part or part C, the Secretary
shall implement, and make benefits available under, this part
on January 1, 2005, unless the Secretary certifies in writing
to Congress, by not later than March 1, 2004, that such
implementation is not possible. If such implementation is
possible by January 1, 2005, the Secretary shall carry out
this part until the Administrator is appointed and able to
carry out this part. The Secretary shall implement sections
1807 and 1807A until the date of implementation as certified
by the Secretary.
``(2) Certification requirements.--A certification by the
Secretary under paragraph (1) that implementation of this
part is not possible by January 1, 2005, shall declare the
reasons for the impossibility and a new date certain (which
in no event shall be later than January 1, 2006) for
implementation of this part.
______

SA 1102. Mr. McCONNELL proposed an amendment to the bill S. 1, to
amend title XVIII of the Social Security Act to provide for a voluntary
prescription drug benefit under the Medicare program and to strengthen
and improve the Medicare program, and for other purposes; as follows:

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

SEC. __. PROTECTING SENIORS WITH ALZHEIMER'S DISEASE.

Any eligible beneficiary (as defined in section 1860D(3) of
the Social Security Act) who is diagnosed with Alzheimer's
disease shall be protected from high prescription drug costs
in the following manner:
(1) Subsidy eligible individuals with an income below 100
percent of the federal poverty line.--If the individual is a
qualified medicare beneficiary (as defined in section 1860D-
19(a)(4) of such Act), such individual shall receive the full
premium subsidy and reduction of cost-sharing described in
section 1860D-19(a)(1) of such Act, including the payment
of--
(A) no deductible;
(B) no monthly beneficiary premium for at least one
Medicare Prescription Drug plan available in the area in
which the individual resides; and
(C) reduced cost-sharing described in subparagraphs (C),
(D), and (E) of section 1860D-19(a)(1) of such Act.
(2) Subsidy eligible individuals with an income between 100
and 135 percent of the federal poverty line.--If the
individual is a specified low income medicare beneficiary (as
defined in paragraph 1860D-19(4)(B) of such Act) or a
qualifying individual (as defined in paragraph 1860D-19(4)(C)
of such Act) who is diagnosed with Alzheimer's disease, such
individual shall receive the full premium subsidy and
reduction of cost-sharing described in section 1860D-19(a)(2)
of such Act, including payment of--
(A) no deductible;
(B) no monthly premium for any Medicare Prescription Drug
plan described paragraph

[[Page S8769]]

(1) or (2) of section 1860D-17(a) of such Act; and
(C) reduced cost-sharing described in subparagraphs (C),
(D), and (E) of section 1860D-19(a)(2) of such Act.
(3) Subsidy-eligible individuals with income between 135
percent and 160 percent of the federal poverty level.--If the
individual is a subsidy-eligible individual (as defined in
section 1860D-19(a)(4)(D) of such Act) who is diagnosed with
Alzheimer's disease, such individual shall receive sliding
scale premium subsidy and reduction of cost-sharing for
subsidy-eligible individuals, including payment of--
(A) for 2006, a deductible of only $50;
(B) only a percentage of the monthly premium (as described
in section 1860D-19(a)(3)(A)(i)); and
(C) reduced cost-sharing described in clauses (iii), (iv),
and (v) of section 1860D-19(a)(3)(A).
(4) Eligible beneficiaries with income above 160 percent of
the federal poverty level.--If an individual is an eligible
beneficiary (as defined in section 1860D(3) of such Act), is
not described in paragraphs (1) through (3), and is diagnosed
with Alzheimer's disease, such individual shall have access
to qualified prescription drug coverage (as described in
section 1860D-6(a)(1) of such Act), including payment of--
(A) for 2006, a deductible of $275;
(B) the limits on cost-sharing described section 1860D-
6(c)(2) of such Act up to, for 2006, an initial coverage
limit of $4,500; and
(C) for 2006, an annual out-of-pocket limit of $3,700 with
10 percent cost-sharing after that limit is reached.
______

SA 1103. Mr. DORGAN (for himself and Mr. Pryor) proposed an amendment
SA 1092 proposed by Mr. Grassley (for himself and Mr. Baucus) to the
bill S. 1, to amend title XVIII of the Social Security Act to provide
for a voluntary prescription drug benefit under the Medicare program
and to strengthen and improve the Medicare program and for other
purposes; as follows:

In lieu of the matter proposed to be inserted, insert the
following:

SEC. __. AGGREGATE REDUCTION IN MONTHLY BENEFICIARY
OBLIGATIONS.

Section 1860D-17, as added by section 101, is amended by
adding at the end the following:
``(d) Aggregate Reduction in Monthly Beneficiary
Obligations.--The Administrator shall for each year
(beginning with 2009) determine a percentage which--
``(1) shall apply in lieu of the applicable percent
otherwise determined under subsection (c) for that year, and
``(2) will result in a decrease of $2,400,000,000 for that
year in the aggregate monthly beneficiary obligations
otherwise required of all eligible beneficiaries enrolled in
a Medicare Prescription Drug Plan or a Medicare Advantage
plan that provides qualified prescription drug coverage.5

This subsection shall not apply in determining the applicable
percent under subsection (c) for purposes of section 1860D-
21.''.
______

SA 1104. Mr. KOHL (for himself and Mr. Reid) submitted an amendment
intended to be proposed by him to the bill S. 1, to amend title XVIII
of the Social Security Act to provide for a voluntary prescription drug
benefit under the Medicare program and to strengthen and improve 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. 6__. ESTABLISHMENT OF PROGRAM TO PREVENT ABUSE OF
NURSING FACILITY RESIDENTS.

(a) In General.--
(1) Screening of skilled nursing facility and nursing
facility provisional employees.--
(A) Medicare program.--Section 1819(b) (42 U.S.C. 1395i-
3(b)) is amended by adding at the end the following:
``(8) Screening of skilled nursing facility workers.--
``(A) Background checks of provisional employees.--Subject
to subparagraph (B)(ii), after a skilled nursing facility
selects an individual for a position as a skilled nursing
facility worker, the facility, prior to employing such worker
in a status other than a provisional status to the extent
permitted under subparagraph (B)(ii), shall--
``(i) give such worker written notice that the facility is
required to perform background checks with respect to
provisional employees;
``(ii) require, as a condition of employment, that such
worker--

``(I) provide a written statement disclosing any conviction
for a relevant crime or finding of patient or resident abuse;
``(II) provide a statement signed by the worker authorizing
the facility to request the search and exchange of criminal
records;
``(III) provide in person to the facility a copy of the
worker's fingerprints or thumb print, depending upon
available technology; and
``(IV) provide any other identification information the
Secretary may specify in regulation;

``(iii) initiate a check of the data collection system
established under section 1128E in accordance with
regulations promulgated by the Secretary to determine whether
such system contains any disqualifying information with
respect to such worker; and
``(iv) if that system does not contain any such
disqualifying information--

``(I) request through the appropriate State agency that the
State initiate a State and national criminal background check
on such worker in accordance with the provisions of
subsection (e)(6); and
``(II) submit to such State agency the information
described in subclauses (II) through (IV) of clause (ii) not
more than 7 days (excluding Saturdays, Sundays, and legal
public holidays under section 6103(a) of title 5, United
States Code) after completion of the check against the system
initiated under clause (iii).

``(B) Prohibition on hiring of abusive workers.--
``(i) In general.--A skilled nursing facility may not
knowingly employ any skilled nursing facility worker who has
any conviction for a relevant crime or with respect to whom a
finding of patient or resident abuse has been made.
``(ii) Provisional employment.--After complying with the
requirements of clauses (i), (ii), and (iii) of subparagraph
(A), a skilled nursing facility may provide for a provisional
period of employment for a skilled nursing facility worker
pending completion of the check against the data collection
system described under subparagraph (A)(iii) and the
background check described under subparagraph (A)(iv).
Subject to clause (iii), such facility shall maintain direct
supervision of the covered individual during the worker's
provisional period of employment.
``(iii) Exception for small rural skilled nursing
facilities.--In the case of a small rural skilled nursing
facility (as defined by the Secretary), the Secretary shall
provide, by regulation after consultation with providers of
skilled nursing facility services and entities representing
beneficiaries of such services, for an appropriate level of
supervision with respect to any provisional employees
employed by the facility in accordance with clause (ii). Such
regulation should encourage the provision of direct
supervision of such employees whenever practicable with
respect to such a facility and if such supervision would not
impose an unreasonable cost or other burden on the facility.
``(C) Reporting requirements.--A skilled nursing facility
shall report to the State any instance in which the facility
determines that a skilled nursing facility worker has
committed an act of resident neglect or abuse or
misappropriation of resident property in the course of
employment by the facility.
``(D) Use of information.--
``(i) In general.--A skilled nursing facility that obtains
information about a skilled nursing facility worker pursuant
to clauses (iii) and (iv) of subparagraph (A) may use such
information only for the purpose of determining the
suitability of the worker for employment.
``(ii) Immunity from liability.--A skilled nursing facility
that, in denying employment for an individual selected for
hiring as a skilled nursing facility worker (including during
the period described in subparagraph (B)(ii)), reasonably
relies upon information about such individual provided by the
State pursuant to subsection (e)(6) or section 1128E shall
not be liable in any action brought by such individual based
on the employment determination resulting from the
information.
``(iii) Criminal penalty.--Whoever knowingly violates the
provisions of clause (i) shall be fined in accordance with
title 18, United States Code, imprisoned for not more than 2
years, or both.
``(E) Civil penalty.--
``(i) In general.--A skilled nursing facility that violates
the provisions of this paragraph shall be subject to a civil
penalty in an amount not to exceed--

``(I) for the first such violation, $2,000; and
``(II) for the second and each subsequent violation within
any 5-year period, $5,000.

``(ii) Knowing retention of worker.--In addition to any
civil penalty under clause (i), a skilled nursing facility
that--

``(I) knowingly continues to employ a skilled nursing
facility worker in violation of subparagraph (A) or (B); or
``(II) knowingly fails to report a skilled nursing facility
worker under subparagraph (C),

shall be subject to a civil penalty in an amount not to
exceed $5,000 for the first such violation, and $10,000 for
the second and each subsequent violation within any 5-year
period.
``(F) Definitions.--In this paragraph:
``(i) Conviction for a relevant crime.--The term
`conviction for a relevant crime' means any Federal or State
criminal conviction for--

``(I) any offense described in paragraphs (1) through (4)
of section 1128(a); and
``(II) such other types of offenses as the Secretary may
specify in regulations, taking into account the severity and
relevance of such offenses, and after consultation with
representatives of long-term care providers, representatives
of long-term care employees, consumer advocates, and
appropriate Federal and State officials.

``(ii) Disqualifying information.--The term `disqualifying
information' means information about a conviction for a
relevant crime or a finding of patient or resident abuse.
``(iii) Finding of patient or resident abuse.--The term
`finding of patient or resident abuse' means any
substantiated finding

[[Page S8770]]

by a State agency under subsection (g)(1)(C) or a Federal
agency that a skilled nursing facility worker has committed--

``(I) an act of patient or resident abuse or neglect or a
misappropriation of patient or resident property; or
``(II) such other types of acts as the Secretary may
specify in regulations.

``(iv) Skilled nursing facility worker.--The term `skilled
nursing facility worker' means any individual (other than a
volunteer) that has access to a patient of a skilled nursing
facility under an employment or other contract, or both, with
such facility. Such term includes individuals who are
licensed or certified by the State to provide such services,
and nonlicensed individuals providing such services, as
defined by the Secretary, including nurse assistants, nurse
aides, home health aides, and personal care workers and
attendants.''.
(B) Medicaid program.--Section 1919(b) (42 U.S.C. 1396r(b))
is amended by adding at the end the following new paragraph:
``(8) Screening of nursing facility workers.--
``(A) Background checks on provisional employees.--Subject
to subparagraph (B)(ii), after a nursing facility selects an
individual for a position as a nursing facility worker, the
facility, prior to employing such worker in a status other
than a provisional status to the extent permitted under
subparagraph (B)(ii), shall--
``(i) give the worker written notice that the facility is
required to perform background checks with respect to
provisional employees;
``(ii) require, as a condition of employment, that such
worker--

``(I) provide a written statement disclosing any conviction
for a relevant crime or finding of patient or resident abuse;
``(II) provide a statement signed by the worker authorizing
the facility to request the search and exchange of criminal
records;
``(III) provide in person to the facility a copy of the
worker's fingerprints or thumb print, depending upon
available technology; and
``(IV) provide any other identification information the
Secretary may specify in regulation;

``(iii) initiate a check of the data collection system
established under section 1128E in accordance with
regulations promulgated by the Secretary to determine whether
such system contains any disqualifying information with
respect to such worker; and
``(iv) if that system does not contain any such
disqualifying information--

``(I) request through the appropriate State agency that the
State initiate a State and national criminal background check
on such worker in accordance with the provisions of
subsection (e)(8); and
``(II) submit to such State agency the information
described in subclauses (II) through (IV) of clause (ii) not
more than 7 days (excluding Saturdays, Sundays, and legal
public holidays under section 6103(a) of title 5, United
States Code) after completion of the check against the system
initiated under clause (iii).

``(B) Prohibition on hiring of abusive workers.--
``(i) In general.--A nursing facility may not knowingly
employ any nursing facility worker who has any conviction for
a relevant crime or with respect to whom a finding of patient
or resident abuse has been made.
``(ii) Provisional employment.--After complying with the
requirements of clauses (i), (ii), and (iii) of subparagraph
(A), a nursing facility may provide for a provisional period
of employment for a nursing facility worker pending
completion of the check against the data collection system
described under subparagraph (A)(iii) and the background
check described under subparagraph (A)(iv). Subject to clause
(iii), such facility shall maintain direct supervision of the
worker during the worker's provisional period of employment.
``(iii) Exception for small rural nursing facilities.--

``(I) In general.--In the case of a small rural nursing
facility (as defined by the Secretary), the Secretary shall
provide, by regulation after consultation with providers of
nursing facility services and entities representing
beneficiaries of such services, for an appropriate level of
supervision with respect to any provisional employees
employed by the facility in accordance with clause (ii). Such
regulation should encourage the provision of direct
supervision of such employees whenever practicable with
respect to such a facility and if such supervision would not
impose an unreasonable cost or other burden on the facility.

``(C) Reporting requirements.--A nursing facility shall
report to the State any instance in which the facility
determines that a nursing facility worker has committed an
act of resident neglect or abuse or misappropriation of
resident property in the course of employment by the
facility.
``(D) Use of information.--
``(i) In general.--A nursing facility that obtains
information about a nursing facility worker pursuant to
clauses (iii) and (iv) of subparagraph (A) may use such
information only for the purpose of determining the
suitability of the worker for employment.
``(ii) Immunity from liability.--A nursing facility that,
in denying employment for an individual selected for hiring
as a nursing facility worker (including during the period
described in subparagraph (B)(ii)), reasonably relies upon
information about such individual provided by the State
pursuant to subsection (e)(6) or section 1128E shall not be
liable in any action brought by such individual based on the
employment determination resulting from the information.
``(iii) Criminal penalty.--Whoever knowingly violates the
provisions of clause (i) shall be fined in accordance with
title 18, United States Code, imprisoned for not more than 2
years, or both.
``(E) Civil penalty.--
``(i) In general.--A nursing facility that violates the
provisions of this paragraph shall be subject to a civil
penalty in an amount not to exceed--

``(I) for the first such violation, $2,000; and
``(II) for the second and each subsequent violation within
any 5-year period, $5,000.

``(ii) Knowing retention of worker.--In addition to any
civil penalty under clause (i), a nursing facility that--

``(I) knowingly continues to employ a nursing facility
worker in violation of subparagraph (A) or (B); or
``(II) knowingly fails to report a nursing facility worker
under subparagraph (C),

shall be subject to a civil penalty in an amount not to
exceed $5,000 for the first such violation, and $10,000 for
the second and each subsequent violation within any 5-year
period.
``(F) Definitions.--In this paragraph:
``(i) Conviction for a relevant crime.--The term
`conviction for a relevant crime' means any Federal or State
criminal conviction for--

``(I) any offense described in paragraphs (1) through (4)
of section 1128(a); and
``(II) such other types of offenses as the Secretary may
specify in regulations, taking into account the severity and
relevance of such offenses, and after consultation with
representatives of long-term care providers, representatives
of long-term care employees, consumer advocates, and
appropriate Federal and State officials.

``(ii) Disqualifying information.--The term `disqualifying
information' means information about a conviction for a
relevant crime or a finding of patient or resident abuse.
``(iii) Finding of patient or resident abuse.--The term
`finding of patient or resident abuse' means any
substantiated finding by a State agency under subsection
(g)(1)(C) or a Federal agency that a nursing facility worker
has committed--

``(I) an act of patient or resident abuse or neglect or a
misappropriation of patient or resident property; or
``(II) such other types of acts as the Secretary may
specify in regulations.

``(iv) Nursing facility worker.--The term `nursing facility
worker' means any individual (other than a volunteer) that
has access to a patient of a nursing facility under an
employment or other contract, or both, with such facility.
Such term includes individuals who are licensed or certified
by the State to provide such services, and nonlicensed
individuals providing such services, as defined by the
Secretary, including nurse assistants, nurse aides, home
health aides, and personal care workers and attendants.''.
(2) Federal responsibilities.--
(A) Development of standard federal and state background
check form.--The Secretary of Health and Human Services, in
consultation with the Attorney General and representatives of
appropriate State agencies, shall develop a model form that a
provisional employee at a nursing facility may complete and
Federal and State agencies may use to conduct the criminal
background checks required under sections 1819(b)(8) and
1919(b)(8) of the Social Security Act (42 U.S.C. 1395i-3(b),
1396r(b)) (as added by this section).
(B) Periodic evaluation.--The Secretary of Health and Human
Services, in consultation with the Attorney General,
periodically shall evaluate the background check system
imposed under sections 1819(b)(8) and 1919(b)(8) of the
Social Security Act (42 U.S.C. 1395i-3(b), 1396r(b)) (as
added by this section) and shall implement changes, as
necessary, based on available technology, to make the
background check system more efficient and able to provide a
more immediate response to long-term care providers using the
system.
(3) No preemption of stricter state laws.--Nothing in
section 1819(b)(8) or 1919(b)(8) of the Social Security Act
(42 U.S.C. 1395i-3(b)(8), 1396r(b)(8)) (as so added) shall be
construed to supersede any provision of State law that--
(A) specifies a relevant crime for purposes of prohibiting
the employment of an individual at a long-term care facility
(as defined in section 1128E(g)(6) of the Social Security Act
(as added by subsection (e)) that is not included in the list
of such crimes specified in such sections or in regulations
promulgated by the Secretary of Health and Human Services to
carry out such sections; or
(B) requires a long-term care facility (as so defined) to
conduct a background check prior to employing an individual
in an employment position that is not included in the
positions for which a background check is required under such
sections.
(4) Technical amendments.--Effective as if included in the
enactment of section 941 of BIPA (114 Stat. 2763A-585),
sections 1819(b) and 1919(b) (42 U.S.C. 1395i-3(b),
1396r(b)), as amended by such section 941 are each amended by
redesignating the paragraph (8) added by such section as
paragraph (9).

[[Page S8771]]

(b) Federal and State Requirements Concerning Background
Checks.--
(1) Medicare.--Section 1819(e) (42 U.S.C. 1395i-3(e)) is
amended by adding at the end the following:
``(6) Federal and state requirements concerning criminal
background checks on skilled nursing facility employees.--
``(A) In general.--Upon receipt of a request by a skilled
nursing facility pursuant to subsection (b)(8) that is
accompanied by the information described in subclauses (II)
through (IV) of subsection (b)(8)(A)(ii), a State, after
checking appropriate State records and finding no
disqualifying information (as defined in subsection
(b)(8)(F)(ii)), shall immediately submit such request and
information to the Attorney General and shall request the
Attorney General to conduct a search and exchange of records
with respect to the individual as described in subparagraph
(B).
``(B) Search and exchange of records by attorney general.--
Upon receipt of a submission pursuant to subparagraph (A),
the Attorney General shall direct a search of the records of
the Federal Bureau of Investigation for any criminal history
records corresponding to the fingerprints and other positive
identification information submitted. The Attorney General
shall provide any corresponding information resulting from
the search to the State.
``(C) State reporting of information to skilled nursing
facility.--Upon receipt of the information provided by the
Attorney General pursuant to subparagraph (B), the State
shall--
``(i) review the information to determine whether the
individual has any conviction for a relevant crime (as
defined in subsection (b)(8)(F)(i));
``(ii) immediately report to the skilled nursing facility
in writing the results of such review; and
``(iii) in the case of an individual with a conviction for
a relevant crime, report the existence of such conviction of
such individual to the database established under section
1128E.
``(D) Fees for performance of criminal background checks.--
``(i) Authority to charge fees.--

``(I) Attorney general.--The Attorney General may charge a
fee to any State requesting a search and exchange of records
pursuant to this paragraph and subsection (b)(8) for
conducting the search and providing the records. The amount
of such fee shall not exceed the lesser of the actual cost of
such activities or $50. Such fees shall be available to the
Attorney General, or, in the Attorney General's discretion,
to the Federal Bureau of Investigation until expended.
``(II) State.--A State may charge a skilled nursing
facility a fee for initiating the criminal background check
under this paragraph and subsection (b)(8), including fees
charged by the Attorney General, and for performing the
review and report required by subparagraph (C). The amount of
such fee shall not exceed the actual cost of such activities.

``(ii) Prohibition on charging.--An entity may not impose
on a provisional employee or an employee any charges relating
to the performance of a background check under this
paragraph.
``(E) Regulations.--
``(i) In general.--In addition to the Secretary's authority
to promulgate regulations under this title, the Attorney
General, in consultation with the Secretary, may promulgate
such regulations as are necessary to carry out the Attorney
General's responsibilities under this paragraph and
subsection (b)(9), including regulations regarding the
security confidentiality, accuracy, use, destruction, and
dissemination of information, audits and recordkeeping, and
the imposition of fees.
``(ii) Appeal procedures.--The Attorney General, in
consultation with the Secretary, shall promulgate such
regulations as are necessary to establish procedures by which
a provisional employee or an employee may appeal or dispute
the accuracy of the information obtained in a background
check conducted under this paragraph. Appeals shall be
limited to instances in which a provisional employee or an
employee is incorrectly identified as the subject of the
background check, or when information about the provisional
employee or employee has not been updated to reflect changes
in the provisional employee's or employee's criminal record.
``(F) Report.--Not later than 2 years after the date of
enactment of this paragraph, the Attorney General shall
submit a report to Congress on--
``(i) the number of requests for searches and exchanges of
records made under this section;
``(ii) the disposition of such requests; and
``(iii) the cost of responding to such requests.''.
(2) Medicaid.--Section 1919(e) (42 U.S.C. 1396r(e)) is
amended by adding at the end the following:
``(8) Federal and state requirements concerning criminal
background checks on nursing facility employees.--
``(A) In general.--Upon receipt of a request by a nursing
facility pursuant to subsection (b)(8) that is accompanied by
the information described in subclauses (II) through (IV) of
subsection (b)(8)(A)(ii), a State, after checking appropriate
State records and finding no disqualifying information (as
defined in subsection (b)(8)(F)(ii)), shall immediately
submit such request and information to the Attorney General
and shall request the Attorney General to conduct a search
and exchange of records with respect to the individual as
described in subparagraph (B).
``(B) Search and exchange of records by attorney general.--
Upon receipt of a submission pursuant to subparagraph (A),
the Attorney General shall direct a search of the records of
the Federal Bureau of Investigation for any criminal history
records corresponding to the fingerprints and other positive
identification information submitted. The Attorney General
shall provide any corresponding information resulting from
the search to the State.
``(C) State reporting of information to nursing facility.--
Upon receipt of the information provided by the Attorney
General pursuant to subparagraph (B), the State shall--
``(i) review the information to determine whether the
individual has any conviction for a relevant crime (as
defined in subsection (b)(8)(F)(i));
``(ii) immediately report to the nursing facility in
writing the results of such review; and
``(iii) in the case of an individual with a conviction for
a relevant crime, report the existence of such conviction of
such individual to the database established under section
1128E.
``(D) Fees for performance of criminal background checks.--
``(i) Authority to charge fees.--

``(I) Attorney general.--The Attorney General may charge a
fee to any State requesting a search and exchange of records
pursuant to this paragraph and subsection (b)(8) for
conducting the search and providing the records. The amount
of such fee shall not exceed the lesser of the actual cost of
such activities or $50. Such fees shall be available to the
Attorney General, or, in the Attorney General's discretion,
to the Federal Bureau of Investigation, until expended.
``(II) State.--A State may charge a nursing facility a fee
for initiating the criminal background check under this
paragraph and subsection (b)(8), including fees charged by
the Attorney General, and for performing the review and
report required by subparagraph (C). The amount of such fee
shall not exceed the actual cost of such activities.

``(ii) Prohibition on charging.--An entity may not impose
on a provisional employee or an employee any charges relating
to the performance of a background check under this
paragraph.
``(E) Regulations.--
``(i) In general.--In addition to the Secretary's authority
to promulgate regulations under this title, the Attorney
General, in consultation with the Secretary, may promulgate
such regulations as are necessary to carry out the Attorney
General's responsibilities under this paragraph and
subsection (b)(8), including regulations regarding the
security, confidentiality, accuracy, use, destruction, and
dissemination of information, audits and recordkeeping, and
the imposition of fees.
``(ii) Appeal procedures.--The Attorney General, in
consultation with the Secretary, shall promulgate such
regulations as are necessary to establish procedures by which
a provisional employee or an employee may appeal or dispute
the accuracy of the information obtained in a background
check conducted under this paragraph. Appeals shall be
limited to instances in which a provisional employee or an
employee is incorrectly identified as the subject of the
background check, or when information about the provisional
employee or employee has not been updated to reflect changes
in the provisional employee's or employee's criminal record.
``(F) Report.--Not later than 2 years after the date of
enactment of this paragraph, the Attorney General shall
submit a report to Congress on--
``(i) the number of requests for searches and exchanges of
records made under this section;
``(ii) the disposition of such requests; and
``(iii) the cost of responding to such requests.''.
(c) Application to Other Entities Providing Home Health or
Long-Term Care Services.--
(1) Medicare.--Part D of title XVIII (42 U.S.C. 1395x et
seq.) is amended by adding at the end the following:

``APPLICATION OF SKILLED NURSING FACILITY PREVENTIVE ABUSE PROVISIONS
TO ANY PROVIDER OF SERVICES OR OTHER ENTITY PROVIDING HOME HEALTH OR
LONG-TERM CARE SERVICES

``Sec. 1897. (a) In General.--The requirements of
subsections (b)(8) and (e)(6) of section 1819 shall apply to
any provider of services or any other entity that is eligible
to be paid under this title for providing home health
services, hospice care (including routine home care and other
services included in hospice care under this title), or long-
term care services to an individual entitled to benefits
under part A or enrolled under part B, including an
individual provided with a Medicare+Choice plan offered by a
Medicare+Choice organization under part C (in this section
referred to as a `medicare beneficiary').
``(b) Supervision of Provisional Employees.--
``(1) In general.--With respect to an entity that provides
home health services, such entity shall be considered to have
satisfied the requirements of section 1819(b)(8)(B)(ii) or

[[Page S8772]]

1919(b)(8)(B)(ii) if the entity meets such requirements for
supervision of provisional employees of the entity as the
Secretary shall, by regulation, specify in accordance with
paragraph (2).
``(2) Requirements.--The regulations required under
paragraph (1) shall provide the following:
``(A) Supervision of a provisional employee shall consist
of ongoing, good faith, verifiable efforts by the supervisor
of the provisional employee to conduct monitoring and
oversight activities to ensure the safety of a medicare
beneficiary.
``(B) For purposes of subparagraph (A), monitoring and
oversight activities may include (but are not limited to) the
following:
``(i) Follow-up telephone calls to the medicare
beneficiary.
``(ii) Unannounced visits to the medicare beneficiary's
home while the provisional employee is serving the medicare
beneficiary.
``(iii) To the extent practicable, limiting the provisional
employee's duties to serving only those medicare
beneficiaries in a home or setting where another family
member or resident of the home or setting of the medicare
beneficiary is present.
``(C) In promulgating such regulations, the Secretary shall
take into account the staffing and geographic issues faced by
small rural entities (as defined by the Secretary) that
provide home health services, hospice care (including routine
home care and other services included in hospice care under
this title), or other long-term care services. Such
regulations should encourage the provision of monitoring and
oversight activities whenever practicable with respect to
such an entity, and if such activities would not impose an
unreasonable cost or other burden on the entity.''.
(2) Medicaid.--Section 1902(a) (42 U.S.C. 1396a), as
amended by section 104(a), is amended--
(A) in paragraph (65), by striking ``and'' at the end;
(B) in paragraph (66), by striking the period and inserting
``; and''; and
(C) by inserting after paragraph (66) the following:
``(67) provide that any entity that is eligible to be paid
under the State plan for providing home health services,
hospice care (including routine home care and other services
included in hospice care under title XVIII), or long-term
care services for which medical assistance is available under
the State plan to individuals requiring long-term care
complies with the requirements of subsections (b)(8) and
(e)(8) of section 1919 and section 1897(b) (in the same
manner as such section applies to a medicare beneficiary).''.
(3) Expansion of State Nurse Aide Registry.--
(A) Medicare.--Section 1819 (42 U.S.C. 1395i-3) is
amended--
(i) in subsection (e)(2)--

(I) in the paragraph heading, by striking ``Nurse aide
registry'' and inserting ``Employee registry'';
(II) in subparagraph (A)--

(aa) by striking ``By not later than January 1, 1989, the''
and inserting ``The'';
(bb) by striking ``a registry of all individuals'' and
inserting ``a registry of (i) all individuals''; and
(cc) by inserting before the period the following: ``, (ii)
all other skilled nursing facility employees with respect to
whom the State has made a finding described in subparagraph
(B), and (iii) any employee of any provider of services or
any other entity that is eligible to be paid under this title
for providing home health services, hospice care (including
routine home care and other services included in hospice care
under this title), or long-term care services and with
respect to whom the entity has reported to the State a
finding of patient neglect or abuse or a misappropriation of
patient property''; and

(III) in subparagraph (C), by striking ``a nurse aide'' and
inserting ``an individual''; and

(ii) in subsection (g)(1)--

(I) by striking the first sentence of subparagraph (C) and
inserting the following: ``The State shall provide, through
the agency responsible for surveys and certification of
skilled nursing facilities under this subsection, for a
process for the receipt and timely review and investigation
of allegations of neglect and abuse and misappropriation of
resident property by a nurse aide or a skilled nursing
facility employee of a resident in a skilled nursing
facility, by another individual used by the facility in
providing services to such a resident, or by an individual
described in subsection (e)(2)(A)(iii).''; and
(II) in the fourth sentence of subparagraph (C), by
inserting ``or described in subsection (e)(2)(A)(iii)'' after
``used by the facility''; and
(III) in subparagraph (D)--

(aa) in the subparagraph heading, by striking ``nurse
aide''; and
(bb) in clause (i), in the matter preceding subclause (I),
by striking ``a nurse aide'' and inserting ``an individual'';
and
(cc) in clause (i)(I), by striking ``nurse aide'' and
inserting ``individual''.
(B) Medicaid.--Section 1919 (42 U.S.C. 1396r) is amended--
(i) in subsection (e)(2)--

(I) in the paragraph heading, by striking ``Nurse aide
registry'' and inserting ``Employee registry'';
(II) in subparagraph (A)--

(aa) by striking ``By not later than January 1, 1989, the''
and inserting ``The'';
(bb) by striking ``a registry of all individuals'' and
inserting ``a registry of (i) all individuals''; and
(cc) by inserting before the period the following: ``, (ii)
all other nursing facility employees with respect to whom the
State has made a finding described in subparagraph (B), and
(iii) any employee of an entity that is eligible to be paid
under the State plan for providing home health services,
hospice care (including routine home care and other services
included in hospice care under title XVIII), or long-term
care services and with respect to whom the entity has
reported to the State a finding of patient neglect or abuse
or a misappropriation of patient property''; and

(III) in subparagraph (C), by striking ``a nurse aide'' and
inserting ``an individual''; and

(ii) in subsection (g)(1)--

(I) by striking the first sentence of subparagraph (C) and
inserting the following: ``The State shall provide, through
the agency responsible for surveys and certification of
nursing facilities under this subsection, for a process for
the receipt and timely review and investigation of
allegations of neglect and abuse and misappropriation of
resident property by a nurse aide or a nursing facility
employee of a resident in a nursing facility, by another
individual used by the facility in providing services to such
a resident, or by an individual described in subsection
(e)(2)(A)(iii).''; and
(II) in the fourth sentence of subparagraph (C), by
inserting ``or described in subsection (e)(2)(A)(iii)'' after
``used by the facility''; and
(III) in subparagraph (D)--

(aa) in the subparagraph heading, by striking ``nurse
aide''; and
(bb) in clause (i), in the matter preceding subclause (I),
by striking ``a nurse aide'' and inserting ``an individual'';
and
(cc) in clause (i)(I), by striking ``nurse aide'' and
inserting ``individual''.
(d) Reimbursement of Costs for Background Checks.--The
Secretary of Health and Human Services shall reimburse
nursing facilities, skilled nursing facilities, and other
entities for costs incurred by the facilities and entities in
order to comply with the requirements imposed under sections
1819(b)(8) and 1919(b)(8) of such Act (42 U.S.C. 1395i-
3(b)(8), 1396r(b)(8)), as added by this section.
(e) Inclusion of Abusive Acts Within a Long-Term Care
Facility or Provider in the National Health Care Fraud and
Abuse Data Collection Program.--
(1) In general.--Section 1128E(g)(1)(A) (42 U.S.C. 1320a-
7e(g)(1)(A)) is amended--
(A) by redesignating clause (v) as clause (vi); and
(B) by inserting after clause (iv), the following:
``(v) A finding of abuse or neglect of a patient or a
resident of a long-term care facility, or misappropriation of
such a patient's or resident's property.''.
(2) Coverage of long-term care facility or provider
employees.--Section 1128E(g)(2) (42 U.S.C. 1320a-7e(g)(2)) is
amended by inserting ``, and includes any individual of a
long-term care facility or provider (other than any
volunteer) that has access to a patient or resident of such a
facility under an employment or other contract, or both, with
the facility or provider (including individuals who are
licensed or certified by the State to provide services at the
facility or through the provider, and nonlicensed
individuals, as defined by the Secretary, providing services
at the facility or through the provider, including nurse
assistants, nurse aides, home health aides, individuals who
provide home care, and personal care workers and
attendants)'' before the period.
(3) Reporting by long-Term care facilities or providers.--
(A) In general.--Section 1128E(b)(1) (42 U.S.C. 1320a-
7e(b)(1)) is amended by striking ``and health plan'' and
inserting ``, health plan, and long-term care facility or
provider''.
(B) Correction of information.--Section 1128E(c)(2) (42
U.S.C. 1320a-7e(c)(2)) is amended by striking ``and health
plan'' and inserting ``, health plan, and long-term care
facility or provider''.
(4) Access to reported information.--Section 1128E(d)(1)
(42 U.S.C. 1320a-7e(d)(1)) is amended by striking ``and
health plans'' and inserting ``, health plans, and long-term
care facilities or providers''.
(5) Mandatory check of database by long-term care
facilities or providers.--Section 1128E(d) (42 U.S.C. 1320a-
7e(d)) is amended by adding at the end the following:
``(3) Mandatory check of database by long-term care
facilities or providers.--A long-term care facility or
provider shall check the database maintained under this
section prior to hiring under an employment or other
contract, or both, (other than in a provisional status) any
individual as an employee of such a facility or provider who
will have access to a patient or resident of the facility or
provider (including individuals who are licensed or certified
by the State to provide services at the facility or through
the provider, and nonlicensed individuals, as defined by the
Secretary, that will provide services at the facility or
through the provider, including nurse assistants, nurse
aides, home health aides, individuals who provide home care,
and personal care workers and attendants).''.

[[Page S8773]]

(6) Definition of long-term care facility or provider.--
Section 1128E(g) (42 U.S.C. 1320a-7e(g)) is amended by adding
at the end the following:
``(6) Long-term care facility or provider.--The term `long-
term care facility or provider' means a skilled nursing
facility (as defined in section 1819(a)), a nursing facility
(as defined in section 1919(a)), a home health agency, a
provider of hospice care (as defined in section 1861(dd)(1)),
a long-term care hospital (as described in section
1886(d)(1)(B)(iv)), an intermediate care facility for the
mentally retarded (as defined in section 1905(d)), or any
other facility or entity that provides, or is a provider of,
long-term care services, home health services, or hospice
care (including routine home care and other services included
in hospice care under title XVIII), and receives payment for
such services under the medicare program under title XVIII or
the medicaid program under title XIX.''.
(7) Authorization of appropriations.--There is authorized
to be appropriated to carry out the amendments made by this
subsection, $10,200,000 for fiscal year 2004.
(f) Prevention and Training Demonstration Project.--
(1) Establishment.--The Secretary of Health and Human
Services shall establish a demonstration program to provide
grants to develop information on best practices in patient
abuse prevention training (including behavior training and
interventions) for managers and staff of hospital and health
care facilities.
(2) Eligibility.--To be eligible to receive a grant under
paragraph (1), an entity shall be a public or private
nonprofit entity and prepare and submit to the Secretary of
Health and Human Services an application at such time, in
such manner, and containing such information as the Secretary
may require.
(3) Use of funds.--Amounts received under a grant under
this subsection shall be used to--
(A) examine ways to improve collaboration between State
health care survey and provider certification agencies, long-
term care ombudsman programs, the long-term care industry,
and local community members;
(B) examine patient care issues relating to regulatory
oversight, community involvement, and facility staffing and
management with a focus on staff training, staff stress
management, and staff supervision;
(C) examine the use of patient abuse prevention training
programs by long-term care entities, including the training
program developed by the National Association of Attorneys
General, and the extent to which such programs are used; and
(D) identify and disseminate best practices for preventing
and reducing patient abuse.
(4) Authorization of appropriations.--There is authorized
to be appropriated such sums as may be necessary to carry out
this subsection.
(g) Effective Date.--
(1) In general.--With respect to a skilled nursing facility
(as defined in section 1819(a) of the Social Security Act (42
U.S.C. 1395i-3(a)) or a nursing facility (as defined in
section 1919(a) of the Social Security Act (42 U.S.C.
1396r(a)), this section and the amendments made by this
section shall take effect on the date that is the earlier
of--
(A) 6 months after the effective date of final regulations
promulgated to carry out this section and such amendments; or
(B) January 1, 2006.
(2) Long-term care facilities and providers.--With respect
to a long-term care facility or provider (as defined in
section 1128E(g)(6) of the Social Security Act (42 U.S.C.
1320a-7e(g)(6)) (as added by subsection (e)), this section
and the amendments made by this section shall take effect on
the date that is the earlier of--
(A) 18 months after the effective date of final regulations
promulgated to carry out this section and such amendments; or
(B) January 1, 2007.
______

SA 1105. Mr. HATCH submitted an amendment intended to be proposed by
him to the bill S. 1, to amend title XVIII of the Social Security Act
to provide for a voluntary prescription drug benefit under the Medicare
program and to strengthen and improve the Medicare program, and for
other purposes; which was ordered to lie on the table; as follows:

On page 486, line 3, insert ``and'' after the semicolon at
the end.
On page 486, line 4, insert ``(I)'' after ``(ii)''.
On page 486, line 8, strike ``and'' and insert ``or''.
On page 486, line 9, strike ``(iii)'' and insert ``(II)''.
______

SA 1106. Mr. HATCH (for himself and Mr. Wyden) submitted an amendment
intended to be proposed by him to the bill S. 1, to amend title XVIII
of the Social Security Act to provide for a voluntary prescription drug
benefit under the Medicare program and to strengthen and improve the
Medicare program, and for other purposes; as follows:

At the end of title VI, insert the following:

SEC. __. HEALTH CARE THAT WORKS FOR ALL AMERICANS-CITIZENS
HEALTH CARE WORKING GROUP.

(a) Findings.--Congress finds the following:
(1) In order to improve the health care system, the
American public must engage in an informed national public
debate to make choices about the services they want covered,
what health care coverage they want, and how they are willing
to pay for coverage.
(2) More than a trillion dollars annually is spent on the
health care system, yet--
(A) 41,000,000 Americans are uninsured;
(B) insured individuals do not always have access to
essential, effective services to improve and maintain their
health; and
(C) employers, who cover over 170,000,000 Americans, find
providing coverage increasingly difficult because of rising
costs and double digit premium increases.
(3) Despite increases in medical care spending that are
greater than the rate of inflation, population growth, and
Gross Domestic Product growth, there has not been a
commensurate improvement in our health status as a nation.
(4) Health care costs for even just 1 member of a family
can be catastrophic, resulting in medical bills potentially
harming the economic stability of the entire family.
(5) Common life occurrences can jeopardize the ability of a
family to retain private coverage or jeopardize access to
public coverage.
(6) Innovations in health care access, coverage, and
quality of care, including the use of technology, have often
come from States, local communities, and private sector
organizations, but more creative policies could tap this
potential.
(7) Despite our Nation's wealth, the health care system
does not provide coverage to all Americans who want it.
(b) Purposes.--The purposes of this Act are--
(1) to provide for a nationwide public debate about
improving the health care system to provide every American
with the ability to obtain quality, affordable health care
coverage; and
(2) to provide for a vote by Congress on the
recommendations that result from the debate.
(c) Establishment.--The Secretary, acting through the
Agency for Healthcare Research and Quality, shall establish
an entity to be known as the Citizens' Health Care Working
Group (referred to in this Act as the ``Working Group'').
(d) Appointment.--Not later than 45 days after the date of
enactment of this Act, the Speaker and Minority Leader of the
House of Representatives and the Majority Leader and Minority
Leader of the Senate (in this section referred to as the
``leadership'') shall each appoint individuals to serve as
members of the Working Group in accordance with subsections
(e), (f), and (g).
(e) Membership Criteria.--
(1) Appointed members.--
(A) Separate appointments.--The Speaker of the House of
Representatives jointly with the Minority Leader of the House
of Representatives, and the Majority Leader of the Senate
jointly with the Minority Leader of the Senate, shall each
appoint 1 member of the Working Group described in
subparagraphs (A), (G), (J), (K), and (M) of paragraph (2).
(B) Joint appointments.--Members of the Working Group
described in subparagraphs (B), (C), (D), (E), (F), (I), and
(N) of paragraph (2) shall be appointed jointly by the
leadership.
(C) Combined appointments.--Members of the Working Group
described in subparagraphs (H) and (L) shall be appointed in
the following manner:
(i) One member of the Working Group in each of such
subparagraphs shall be appointed jointly by the leadership.
(ii) The remaining appointments of the members in each of
such subparagraphs shall be divided equally such that the
Speaker of the House of Representatives jointly with the
Minority Leader of the House of Representatives, and the
Majority Leader of the Senate jointly with the Minority
Leader of the Senate each appoint an equal number of members.
(2) Categories of appointed members.--Members of the
Working Group shall be appointed as follows:
(A) 2 members shall be patients or family members of
patients who, at least 1 year prior to the date of enactment
of this Act, have had no health insurance.
(B) 1 member shall be a representative of children.
(C) 1 member shall be a representative of the mentally ill.
(D) 1 member shall be a representative of the disabled.
(E) 1 member shall be over the age of 65 and a beneficiary
under the medicare program established under title XVIII of
the Social Security Act (42 U.S.C. 1395 et seq.).
(F) 1 member shall be a recipient of benefits under the
medicaid program under title XIX of the Social Security Act
(42 U.S.C. 1396 et seq.).
(G) 2 members shall be State health officials.
(H) 3 members shall be employers, including--
(i) 1 large employer (an employer who employed 50 or more
employees on business days during the preceding calendar year
and who employed at least 50 employees on the first of the
year);
(ii) 1 small employer (an employer who employed an average
of at least 2 employees but less than 50 employees on
business days in the preceding calendar year and who employs
at least 2 employees on the first of the year); and
(iii) 1 multi-state employer.

[[Page S8774]]

(I) 1 member shall be a representative of labor.
(J) 2 members shall be health insurance issuers.
(K) 2 members shall be health care providers.
(L) 5 members shall be appointed as follows:
(i) 1 economist.
(ii) 1 academician.
(iii) 1 health policy researcher.
(iv) 1 individual with expertise in pharmacoeconomics.
(v) 1 health technology expert.
(M) 2 members shall be representatives of community leaders
who have developed State or local community solutions to the
problems addressed by the Working Group.
(N) 1 member shall be a representative of a medical school.
(3) Secretary.--The Secretary, or the designee of the
Secretary, shall be a member of the Working Group.
(f) Prohibited Appointments.--Members of the Working Group
shall not include members of Congress or other elected
government officials (Federal, State, or local) other than
those individuals specified in subsection (e). To the extent
possible, individuals appointed to the Working Group shall
have used the health care system within the previous 2 years
and shall not be paid employees or representatives of
associations or advocacy organizations involved in the health
care system.
(g) Appointment Criteria.--
(1) House of representatives.--The Speaker and Minority
Leader of the House of Representatives shall make the
appointments described in subsection (d) in consultation with
the chairperson and ranking member of the following
committees of the House of Representatives:
(A) The Committee on Ways and Means.
(B) The Committee on Energy and Commerce.
(C) The Committee on Education and the Workforce.
(2) Senate.--The Majority Leader and Minority Leader of the
Senate shall make the appointments described in subsection
(d) in consultation with the chairperson and ranking member
of the following committees of the Senate:
(A) The Committee on Finance.
(B) The Committee on Health, Education, Labor, and
Pensions.
(h) Period of Appointment.--Members of the Working Group
shall be appointed for a term of 2 years. Such term is
renewable and any vacancies shall not affect the power and
duties of the Working Group but shall be filled in the same
manner as the original appointment.
(i) Appointment of the Chairperson.--Not later than 15 days
after the date on which all members of the Working Group have
been appointed under subsection (d), the leadership shall
make a joint designation of the chairperson of the Working
Group. If the leadership fails to make such designation
within such time period, the Working Group Members shall, not
later than 10 days after the end of such time period,
designate a chairperson by majority vote.
(j) Subcommittees.--The Working Group may establish
subcommittees if doing so increases the efficiency of the
Working Group in completing its tasks.
(k) Duties.--
(1) Hearings.--Not later than 90 days after the date of
appointment of the chairperson under subsection (i), the
Working Group shall hold hearings to examine--
(A) the capacity of the public and private health care
systems to expand coverage options;
(B) the cost of health care and the effectiveness of care
provided at all stages of disease;
(C) innovative State strategies used to expand health care
coverage and lower health care costs;
(D) local community solutions to accessing health care
coverage;
(E) efforts to enroll individuals currently eligible for
public or private health care coverage;
(F) the role of evidence-based medical practices that can
be documented as restoring, maintaining, or improving a
patient's health, and the use of technology in supporting
providers in improving quality of care and lowering costs;
and
(G) strategies to assist purchasers of health care,
including consumers, to become more aware of the impact of
costs, and to lower the costs of health care.
(2) Additional hearings.--The Working Group may hold
additional hearings on subjects other than those listed in
paragraph (1) so long as such hearings are determined to be
necessary by the Working Group in carrying out the purposes
of this Act. Such additional hearings do not have to be
completed within the time period specified in paragraph (1)
but shall not delay the other activities of the Working Group
under this section.
(3) The health report to the american people.--Not later
than 90 days after the hearings described in paragraphs (1)
and (2) are completed, the Working Group shall prepare and
make available to health care consumers through the Internet
and other appropriate public channels, a report to be
entitled, ``The Health Report to the American People''. Such
report shall be understandable to the general public and
include--
(A) a summary of--
(i) health care and related services that may be used by
individuals throughout their life span;
(ii) the cost of health care services and their medical
effectiveness in providing better quality of care for
different age groups;
(iii) the source of coverage and payment, including
reimbursement, for health care services;
(iv) the reasons people are uninsured or underinsured and
the cost to taxpayers, purchasers of health services, and
communities when Americans are uninsured or underinsured;
(v) the impact on health care outcomes and costs when
individuals are treated in all stages of disease;
(vi) health care cost containment strategies; and
(vii) information on health care needs that need to be
addressed;
(B) examples of community strategies to provide health care
coverage or access;
(C) information on geographic-specific issues relating to
health care;
(D) information concerning the cost of care in different
settings, including institutional-based care and home and
community-based care;
(E) a summary of ways to finance health care coverage; and
(F) the role of technology in providing future health care
including ways to support the information needs of patients
and providers.
(4) Community meetings.--
(A) In general.--Not later than 1 year after the date of
enactment of this Act, the Working Group shall initiate
health care community meetings throughout the United States
(in this section referred to as ``community meetings''). Such
community meetings may be geographically or regionally based
and shall be completed within 180 days after the initiation
of the first meeting.
(B) Number of meetings.--The Working Group shall hold a
sufficient number of community meetings in order to receive
information that reflects--
(i) the geographic differences throughout the United
States;
(ii) diverse populations; and
(iii) a balance among urban and rural populations.
(C) Meeting requirements.--
(i) Facilitator.--A State health officer may be the
facilitator at the community meetings.
(ii) Attendance.--At least 1 member of the Working Group
shall attend and serve as chair of each community meeting.
Other members may participate through interactive technology.
(iii) Topics.--The community meetings shall, at a minimum,
address the following issues:

(I) The optimum way to balance costs and benefits so that
affordable health coverage is available to as many people as
possible.
(II) The identification of services that provide cost-
effective, essential health care services to maintain and
improve health and which should be included in health care
coverage.
(III) The cost of providing increased benefits.
(IV) The mechanisms to finance health care coverage,
including defining the appropriate financial role for
individuals, businesses, and government.

(iv) Interactive technology.--The Working Group may
encourage public participation in community meetings through
interactive technology and other means as determined
appropriate by the Working Group.
(D) Interim requirements.--Not later than 180 days after
the date of completion of the community meetings, the Working
Group shall prepare and make available to the public through
the Internet and other appropriate public channels, an
interim set of recommendations on health care coverage and
ways to improve and strengthen the health care system based
on the information and preferences expressed at the community
meetings. There shall be a 90-day public comment period on
such recommendations.
(l) Recommendations.--Not later than 120 days after the
expiration of the public comment period described in
subsection (k)(4)(D), the Working Group shall submit to
Congress and the President a final set of recommendations.
(m) Administration.--
(1) Executive director.--There shall be an Executive
Director of the Working Group who shall be appointed by the
chairperson of the Working Group in consultation with the
members of the Working Group.
(2) Compensation.--While serving on the business of the
Working Group (including travel time), a member of the
Working Group shall be entitled to compensation at the per
diem equivalent of the rate provided for level IV of the
Executive Schedule under section 5315 of title 5, United
States Code, and while so serving away from home and the
member's regular place of business, a member may be allowed
travel expenses, as authorized by the chairperson of the
Working Group. For purposes of pay and employment benefits,
rights, and privileges, all personnel of the Working Group
shall be treated as if they were employees of the Senate.
(3) Information from federal agencies.--The Working Group
may secure directly from any Federal department or agency
such information as the Working Group considers necessary to
carry out this Act. Upon request of the Working Group, the
head of such department or agency shall furnish such
information.

[[Page S8775]]

(4) Postal services.--The Working Group may use the United
States mails in the same manner and under the same conditions
as other departments and agencies of the Federal Government.
(n) Detail.--Not more than 10 Federal Government employees
employed by the Department of Labor and 10 Federal Government
employees employed by the Department of Health and Human
Services may be detailed to the Working Group under this
section without further reimbursement. Any detail of an
employee shall be without interruption or loss of civil
service status or privilege.
(o) Temporary and Intermittent Services.--The chairperson
of the Working Group may procure temporary and intermittent
services under section 3109(b) of title 5, United States
Code, at rates for individuals which do not exceed the daily
equivalent of the annual rate of basic pay prescribed for
level V of the Executive Schedule under section 5316 of such
title.
(p) Annual Report.--Not later than 1 year after the date of
enactment of this Act, and annually thereafter during the
existence of the Working Group, the Working Group shall
report to Congress and make public a detailed description of
the expenditures of the Working Group used to carry out its
duties under this section.
(q) Sunset of Working Group.--The Working Group shall
terminate when the report described in subsection (l) is
submitted to Congress.
(r) Administration Review and Comments.--Not later than 45
days after receiving the final recommendations of the Working
Group under subsection (l), the President shall submit a
report to Congress which shall contain--
(1) additional views and comments on such recommendations;
and
(2) recommendations for such legislation and administrative
actions as the President considers appropriate.
(s) Required Congressional Action.--Not later than 45 days
after receiving the report submitted by the President under
subsection (r), each committee of jurisdiction of Congress
shall hold at least 1 hearing on such report and on the final
recommendations of the Working Group submitted under
subsection (l).
(t) Authorization of Appropriations.--
(1) In General.--There are authorized to be appropriated to
carry out this Act, other than subsection (k)(3), $3,000,000
for each of fiscal years 2004, 2005, and 2006.
(2) Health Report to the American People.--There are
authorized to be appropriated for the preparation and
dissemination of the Health Report to the American People
described in subsection (k)(3), such sums as may be necessary
for the fiscal year in which the report is required to be
submitted.
______

SA 1107. Mr. COCHRAN submitted an amendment intended to be proposed
by him to the bill S. 1, to amend title XVIII of the Social Security
Act to provide for a voluntary prescription drug benefit under the
Medicare program and to strengthen and improve 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. __. AUTHORIZATION OF APPROPRIATIONS TO CONTINUE THE
EXISTING CMS MEDICATION MONITORING SYSTEM.

There are authorized to be appropriated such sums as are
necessary to continue the Prescription Continuity of Care
medication monitoring system in cooperation with the CMS
Mississippi Quality Improvement Organization, Information
Healthcare, and the University of Mississippi.
______

SA 1108. Mr. DURBIN proposed an amendment to the bill S. 1, to amend
title XVIII of the Social Security Act to provide for a voluntary
prescription drug benefit under the Medicare program and to strengthen
and improve the Medicare program, and for other purposes; as follows:

At the appropriate place, insert the following:

SEC. __. ADDITIONAL ASSISTANCE FOR CERTAIN ELIGIBLE
BENEFICIARIES UNDER PART D.

Section 1860D-26, as added by section 101, is amended by
adding at the end the following:
``(d) Additional Assistance for Certain Eligible
Beneficiaries.--
``(1) Program.--Subject to paragraph (2), the Administrator
shall implement a program (for the period beginning on
January 1, 2009, and ending on September 30, 2013) to provide
additional assistance to applicable eligible beneficiaries
who have reached the initial coverage limit described in
section 1860D-6(c)(3) for the year but have not reached the
annual out-of-pocket limit under section 1860D-6(c)(4)(A))
for the year in order to reduce the cost-sharing requirement
during this coverage gap.
``(2) Funding limitation.--The Administrator shall
implement the program described in paragraph (1) in such a
manner that will result in a decrease of $12,000,000,000 in
cost-sharing for covered drugs under part D by applicable
eligible beneficiaries during the period described in such
paragraph. The Administrator shall take appropriate steps to
ensure that the costs of the program during such period do
not exceed $12,000,000,000.
``(3) Applicable eligible beneficiary.--For purposes of
this subsection, the term `applicable eligible beneficiary'
means an eligible beneficiary with cardiovascular disease,
diabetes and its complications, cancer, or Alzheimer's
disease who is enrolled under part D.''.
______

SA 1109. Mr. BURNS (for himself and Ms. Murkowski) submitted an
amendment intended to be proposed by him to the bill S. 1, to amend
title XVIII of the Social Security Act to provide for a voluntary
prescription drug benefit under the Medicare program and to strengthen
and improve the Medicare program, and for other purposes; which was
ordered to lie on table; as follows:

On page 68, between lines 5 and 6, insert the following:
``(E) Not be less than 1,000,000 eligible beneficiaries
shall reside in each service area.
On page 354, between lines 19 and 20, insert the following:
``(F) Not be less than 1,000,000 MedicareAdvantage eligible
individuals shall reside in each region.
______

SA 1110. Mr. BAUCUS (for Mr. Levin) proposed an amendment to the bill
S. 1, to amend title XVIII of the Social Security Act to provide for a
voluntary prescription drug benefit under the Medicare program and to
strengthen and improve the Medicare program, and for other purposes; as
follows:

Insert the following in the appropriate place: The
Secretary of Health and Human Services shall retain or
designate one or more Medicare backup plans so that
beneficiaries initially covered by a private insurer under
this act who are subsequently covered by a Medicare fallback
plan have the option of retaining a Medicare fallback plan or
entering private insurance under this act.
______

SA 1111. Mr. BAUCUS (for Mr. Levin (for himself, Ms. Stabenow, and
Mrs. Clinton)) proposed an amendment to the bill S. 1, to amend title
XVIII of the Social Security Act to provide for a voluntary
prescription drug benefit under the Medicare program and to strengthen
and improve the Medicare program, and for other purposes; as follows:

Insert the following in the appropriate place: The
Secretary of Health and Human Services shall retain or
designate one or more Medicare backup plans so that the 37%
of current retirees who have prescription drug coverage,
estimated by the Congressional Budget Office who will lose
their current employer retiree coverage as a result of the
enactment of this legislation will have the option to enter
either a Medicare backup plan or private insurance under this
act.
______

SA 1112. Mr. KERRY submitted an amendment intended to by proposed by
him to the bill S. 1, to amend title XVIII of the Social Security Act
to provide for a voluntary prescription drug benefit under the Medicare
program and to strengthen and improve the Medicare program, and for
other purposes; which was ordered to lie on the table; as follows:

After section 404, insert the following:

SEC. 404A. INCREASE FOR HOSPITALS WITH DISPROPORTIONATE
INDIGENT CARE REVENUES.

(a) Disproportionate Share Adjustment Percentage.--Section
1886(d)(5)(F)(iii) (42 U.S.C. 1395ww(d)(5)(F)(iii)) is
amended by striking ``35 percent'' and inserting ``35 percent
(or, for discharges occurring on or after October 1, 2003, 40
percent)''.
(b) Capital Costs.--Section 1886(g)(1)(B) (42 U.S.C.
1395ww(g)(1)(B)) is amended--
(1) in clause (iii), by striking ``and'' at the end;
(2) in clause (iv), by striking the period at the end and
inserting ``, and''; and
(3) by adding at the end the following new clause:
``(v) in the case of cost reporting periods beginning on or
after October 1, 2003, shall provide for a disproportionate
share adjustment in the same manner as section
1886(d)(5)(F)(iii).''.
______

SA 1113. Mr. GRASSLEY proposed an amendment to the bill S. 312, to
amend title XXI of the Social Security Act to extend the availability
of allotments for fiscal years 1998 through 2001 under the State
Children's Health Insurance Programs; as follows:

At the end, add the following:

SEC. 2. TECHNICAL CORRECTION.

(a) Temporary Increase of the Medicaid FMAP.--Section
401(a)(6)(A) of the Jobs and Growth Tax Relief Reconciliation
Act of 2003 (Public Law 108-027) is amended by inserting
``after September 2, 2003,'' after ``(42 U.S.C. 1315))''.
(b) Retroactive Effective Date.--The amendment made by
subsection (a) shall take effect as if included in the
enactment of section 401 of the Jobs and Growth Tax Relief
Reconciliation Act of 2003 (Public Law 108-027).
______

SA 1114. Mr. KYL submitted an amendment intended to be proposed by

[[Page S8776]]

him to the bill S. 1, to amend title XVIII of the Social Security Act
to provide for a voluntary prescription drug benefit under the Medicare
program and to strengthen and improve the Medicare program, and for
other purposes; as follows:

At the appropriate place, insert the following:

SEC. . GAO STUDY OF PHARMACEUTICAL PRICE CONTROLS AND PATENT
PROTECTIONS IN THE G-7 COUNTRIES.

(a) Study.--The Comptroller General of the United States
shall conduct a study of price controls imposed on
pharmaceuticals in France, Germany, Italy, Japan, the United
Kingdom and Canada to review the impact such regulations have
on consumers, including American consumers, and on innovation
in medicine. Such study shall include--
(1) The pharmaceutical price control structure in each
country for a wide range of pharmaceuticals, compared with
average pharmaceutical prices paid by Americans covered by
private sector health insurance;
(2) The proportion of the cost for innovation borne by
American consumers compared with consumers in the other six
countries;
(3) A review of how closely the observed prices in
regulated markets correspond to the prices that efficiently
distribute common costs of production (``Ramsey prices'');
(4) A review of any peer-reviewed literature that might
show the health consequences to patients in the listed
countries that result from the absence or delayed
introduction of medicines, including the cost of not having
access to medicines, in terms of lower life expectancy and
lower quality of health;
(5) The impact on American consumers, in terms of reduced
research into new or improved pharmaceuticals (including the
cost of delaying the introduction of a significant advance in
certain major diseases), if similar price controls were
adopted in the United States;
(6) The existing standards under international conventions,
including the World Trade Organization and the North American
Free Trade Agreement, regarding regulated pharmaceutical
prices, including any restrictions on anti-competitive laws
that might apply to price regulations and how economic harm
caused to consumers in markets without price regulations may
be remedied;
(7) In parallel trade regimes, how much of the price
difference between countries in the European Union is
captured by middlemen and how much goes to benefit patients
and health systems where parallel importing is significant;
and
(8) How much cost is imposed on the owner of a property
right from counterfeiting and from international violation of
intellectual property rights for prescription medicines.
(b) Report.--Not later than 1 year after the date of
enactment of this Act, the Comptroller General of the Untied
States shall submit to Congress a report on the study
conducted under subsection (A).
______

SA 1115. Mr. KYL (for himself, Mr. Hatch, and Ms. Murkowski)
submitted an amendment intended to be proposed by him to the bill S. 1,
to amend title XVIII of the Social Security Act to provide for a
voluntary prescription drug benefit under the Medicare program and to
strengthen and improve the Medicare program, and for other purposes; as
follows:

At the appropriate place, insert the following:

SEC. . SENSE OF THE SENATE CONCERNING MEDICARE PAYMENT UPDATE
FOR PHYSICIANS AND OTHER HEALTH PROFESSIONALS.

(a) Findings.--The Senate makes the following findings:
(1) The formula by which Medicare payments are updated each
year for services furnished by physicians and other health
professionals is fundamentally flawed.
(2) The flawed physician payment update formula is causing
a continuing physician payment crisis, and, without
Congressional action, Medicare payment rates for physicians
and other practitioners are predicted to fall by 4.2% in
2004.
(3) A physician payment cut in 2004 would be the fifth cut
since 1991, and would be on top of a 5.4% cut in 2002, with
additional cuts estimated for 2005, 2006, and 2007; from
1991-2003, payment rates for physicians and health
professionals fell 14% behind practice cost inflation as
measured by Medicare's own conservative estimates.
(4) The sustainable growth rate (SGR) expenditure target,
which is the basis for the physician payment update, is
linked to the gross domestic product and penalizes physicians
and other practitioners for volume increases that they cannot
control and that the government actively promotes through new
coverage decisions, quality improvement activities and other
initiatives that, while beneficial to patients, are not
reflected in the SGR.
(b) Sense of the Senate.--It is the Sense of the Senate
that Medicare beneficiary access to quality care may be
compromised if Congress does not take action to prevent cuts
next year and the following that result from the SGR formula.
______

SA 1116. Mr. DAYTON (for himself, Mr. Coleman, and Mr. Smith)
submitted an amendment intended to be proposed by him to the bill S. 1,
to amend title XVIII of the Social Security Act to provide for a
voluntary prescription drug benefit under the Medicare program and to
strengthen and improve the Medicare program, and for other purposes;
which was ordered to lie on the table; as follows:

Strike section 426 and insert the following:

SEC. 426. INCREASE FOR GROUND AMBULANCE SERVICES.

Section 1834(l) (42 U.S.C. 1395m(l)), as amended by section
405(b)(2), is amended by adding at the end the following new
paragraphs:
``(10) Temporary increase for ground ambulance services.--
``(A) In general.--Notwithstanding any other provision of
this subsection, in the case of ground ambulance services
furnished on or after January 1, 2004, and before January 1,
2007, the fee schedule established under this section, with
respect to both the payment rate for service and the payment
rate for mileage, shall provide that such rates otherwise
established, shall be increased by 21.5 percent.
``(B) Additional increase for services furnished in a rural
area.--Notwithstanding any other provision of this
subsection, in the case of ground ambulance services
furnished on or after January 1, 2004, and before January 1,
2007, for which the transportation originates in a rural area
described in subparagraph (C), the fee schedule established
under this section, with respect to both the payment rate for
service and the payment rate for mileage, shall provide that
such rates otherwise established, shall be increased by the
higher of either 20 percent of the rate determined after the
application of subparagraph (C), in addition to the increase
provided under subparagraph (A).
``(C) Determination of rural areas based on population
density within postal zip codes.--With respect to ground
ambulance services described in subparagraph (B), during the
period described in that subparagraph, paragraph (9) shall be
applied by substituting `(as determined under an area
classification system established by the Secretary that is
based on population density within postal zip code areas)'
for `(as defined in section 1886(d)(2)(D)) or in a rural
census tract of a metropolitan statistical area (as
determined under the most recent modification of the
Goldsmith Modification, originally published in the Federal
Register on February 27, 1992 (57 Fed. Reg. 6725))'. Not
later than December 31, 2003, the Secretary, taking into
account the recommendations contained in the report submitted
under section 221(b)(3) of the Medicare, Medicaid, and SCHIP
Benefits Improvement and Protection Act of 2000, shall
implement the increase in payment required under subparagraph
(B) and shall establish the classification system required by
the application of this subparagraph. The Secretary shall
provide such increased payment for services furnished on or
after the earlier of 30 days after the establishment of such
classification system or December 31, 2003.
``(D) Application of increased payments after 2007.--The
increased payments under subparagraphs (A) and (B) shall not
be taken into account in calculating payments for services
furnished on or after the period specified in such
subparagraph.
``(11) Conversion factor adjustments.--The Secretary shall
not adjust downward the conversion factor in any year because
of an evaluation of the prior year conversion factor.''.

SEC. 426A. 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

[[Page S8777]]

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 1117. Mr. BAUCUS submitted an amendment intended to be proposed by
him to the bill S. 1, to amend title XVIII of the Social Security Act
to provide for a voluntary prescription drug benefit under the Medicare
program and to strengthen and improve the Medicare program, and for
other purposes; as follows:

At the end of title VI, add the following:

SEC. __. SAFETY NET ORGANIZATIONS AND PATIENT ADVISORY
COMMISSION.

(a) In General.--Title XI (42 U.S.C. 1320 et seq.) is
amended by adding at the end the following new part:

``Part D--Safety Net Organizations and Patient Advisory Commission

``safety net organizations and patient advisory commission

``Sec. 1181. (a) Establishment.--There is hereby
established the Safety Net Organizations and Patient Advisory
Commission (in this section referred to as the `Commission').
``(b) Review of Health Care Safety Net Programs and
Reporting Requirements.--
``(1) Review.--The Commission shall conduct an ongoing
review of the health care safety net programs (as described
in paragraph (3)(C)) by--
``(A) monitoring each health care safety net program to
document and analyze the effects of changes in these programs
on the core health care safety net;
``(B) evaluating the impact of the Emergency Medical
Treatment and Labor Act, the Health Insurance Portability and
Accountability Act of 1996, the Balanced Budget Act of 1997,
the Medicare, Medicaid, and SCHIP Balanced Budget Refinement
Act of 1999, the Medicare, Medicaid, and SCHIP Benefits
Protection and Improvement Act of 2000, Prescription Drug and
Medicare Improvement Act of 2003, and other forces on the
capacity of the core health care safety net to continue their
roles in the core health care safety net system to care for
uninsured individuals, medicaid beneficiaries, and other
vulnerable populations;
``(C) monitoring existing data sets to assess the status of
the core health care safety net and health outcomes for
vulnerable populations;
``(D) wherever possible, linking and integrating existing
data systems to enhance the ability of the core health care
safety net to track changes in the status of the core health
care safety net and health outcomes for vulnerable
populations;
``(E) supporting the development of new data systems where
existing data are insufficient or inadequate;
``(F) developing criteria and indicators of impending core
health care safety net failure;
``(G) establishing an early-warning system to identify
impending failures of core health care safety net systems and
providers;
``(H) providing accurate and timely information to Federal,
State, and local policymakers on the indicators that may lead
to the failure of the core health care safety net and an
estimate of the projected consequences of such failures and
the impact of such a failure on the community;
``(I) monitoring and providing oversight for the transition
of individuals receiving supplemental security income
benefits, medical assistance under title XIX, or child health
assistance under title XXI who enroll with a managed care
entity (as defined in section 1932(a)(1)(B)), including the
review of--
``(i) the degree to which health plans have the capacity
(including case management and management information system
infrastructure) to provide quality managed care services to
such an individual;
``(ii) the degree to which these plans may be overburdened
by adverse selection; and
``(iii) the degree to which emergency departments are used
by enrollees of these plans; and
``(J) identifying and disseminating the best practices for
more effective application of the lessons that have been
learned.
``(2) Reports.--
``(A) Annual reports.--Not later than June 1 of each year
(beginning with 2005), the Commission shall, based on the
review conducted under paragraph (1), submit to the
appropriate committees of Congress a report on--
``(i) the health care needs of the uninsured; and
``(ii) the financial and infrastructure stability of the
Nation's core health care safety net.
``(B) Agenda and additional reviews.--
``(i) Agenda.--The Chair of the Commission shall consult
periodically with the Chairpersons and Ranking Minority
Members of the appropriate committees of Congress regarding
the Commission's agenda and progress toward achieving the
agenda.
``(ii) Additional reviews.--The Commission shall conduct
additional reviews and submit additional reports to the
appropriate committees of Congress on topics relating to the
health care safety net programs under the following
circumstances:

``(I) If requested by the Chairpersons or Ranking Minority
Members of such committees.
``(II) If the Commission deems such additional reviews and
reports appropriate.

``(C) Availability of reports.--The Commission shall
transmit to the Comptroller General and the Secretary a copy
of each report submitted under this subsection and shall make
such reports available to the public.
``(3) Definitions.--In this section:
``(A) Appropriate committees of congress.--The term
`appropriate committees of Congress' means the Committees on
Ways and Means and Energy and Commerce of the House of
Representatives and the Committees on Finance and Health,
Education, Labor, and Pensions of the Senate.
``(B) Core health care safety net.--The term `core health
care safety net' means any health care provider that--
``(i) by legal mandate or explicitly adopted mission,
offers access to health care services to patients, regardless
of the ability of the patient to pay for such services; and
``(ii) has a case mix that is substantially comprised of
patients who are uninsured, covered under the medicaid
program, covered under any other public health care program,
or are otherwise vulnerable populations.

Such term includes disproportionate share hospitals,
Federally qualified health centers, other Federal, State, and
locally supported clinics, rural health clinics, local health
departments, and providers covered under the Emergency
Medical Treatment and Labor Act.
``(C) Health care safety net programs.--The term `health
care safety net programs' includes the following:
``(i) Medicaid.--The medicaid program under title XIX.
``(ii) SCHIP.--The State children's health insurance
program under title XXI.
``(iii) Maternal and child health services block grant
program.--The maternal and child health services block grant
program under title V.
``(iv) FQHC programs.--Each federally funded program under
which a health center (as defined in section 330(1) of the
Public Health Service Act), a Federally qualified health
center (as defined in section 1861(aa)(4)), or a Federally-
qualified health center (as defined in section 1905(l)(2)(B))
receives funds.
``(v) RHC programs.--Each federally funded program under
which a rural health clinic (as defined in section
1861(aa)(4) or 1905(l)(1)) receives funds.
``(vi) DSH payment programs.--Each federally funded program
under which a disproportionate share hospital receives funds.
``(vii) Emergency medical treatment and active labor act.--
All care provided under section 1867 for the uninsured,
underinsured, beneficiaries under title XIX, and other
vulnerable individuals.
``(viii) Other health care safety net programs.--Such term
also includes any other health care program that the
Commission determines to be appropriate.
``(D) Vulnerable populations.--The term `vulnerable
populations' includes uninsured and underinsured individuals,
low-income individuals, farm workers, homeless individuals,
individuals with disabilities, individuals with HIV or AIDS,
and such other individuals as the Commission may designate.
``(c) Membership.--

[[Page S8778]]

``(1) Number and appointment.--The Commission shall be
composed of 13 members appointed by the Comptroller General
of the United States (in this section referred to as the
`Comptroller General'), in consultation with the appropriate
committees of Congress.
``(2) Qualifications.--
``(A) In general.--The membership of the Commission shall
include individuals with national recognition for their
expertise in health finance and economics, health care safety
net research and program management, actuarial science,
health facility management, health plans and integrated
delivery systems, reimbursement of health facilities,
allopathic and osteopathic medicine (including emergency
medicine), and other providers of health services, and other
related fields, who provide a mix of different professionals,
broad geographic representation, and a balance between urban
and rural representatives.
``(B) Inclusion.--The membership of the Commission shall
include health professionals, employers, third-party payers,
individuals skilled in the conduct and interpretation of
biomedical, health services, and health economics research
and expertise in outcomes and effectiveness research and
technology assessment. Such membership shall also include
recipients of care from core health care safety net and
individuals who provide and manage the delivery of care by
the core health care safety net.
``(C) Majority nonproviders.--Individuals who are directly
involved in the provision, or management of the delivery, of
items and services covered under the health care safety net
programs shall not constitute a majority of the membership of
the Commission.
``(D) Ethical disclosure.--The Comptroller General shall
establish a system for public disclosure by members of the
Commission of financial and other potential conflicts of
interest relating to such members.
``(3) Terms.--
``(A) In general.--The terms of members of the Commission
shall be for 3 years except that of the members first
appointed, the Comptroller General shall designate--
``(i) four to serve a term of 1 year;
``(ii) four to serve a term of 2 years; and
``(iii) five to serve a term of 3 years.
``(B) Vacancies.--
``(i) In general.--A vacancy in the Commission shall be
filled in the same manner in which the original appointment
was made.
``(ii) Appointment.--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.
``(iii) Terms.--A member may serve after the expiration of
that member's term until a successor has taken office.
``(4) Compensation.--
``(A) Members.--While serving on the business of the
Commission (including travel time), a member of the
Commission--
``(i) shall be entitled to compensation at the per diem
equivalent of the rate provided for level IV of the Executive
Schedule under section 5315 of title 5, United States Code;
and
``(ii) while so serving away from home and the member's
regular place of business, may be allowed travel expenses, as
authorized by the Commission.
``(B) Treatment.--For purposes of pay (other than pay of
members of the Commission) and employment benefits, rights,
and privileges, all personnel of the Commission shall be
treated as if they were employees of the United States
Senate.
``(5) Chair; vice chair.--The Comptroller General shall
designate a member of the Commission, at the time of
appointment of the member as Chair and a member as Vice Chair
for that term of appointment, except that in the case of
vacancy of the Chair or Vice Chair, the Comptroller General
may designate another member for the remainder of that
member's term.
``(6) Meetings.--The Commission shall meet at the call of
the Chair or upon the written request of a majority of its
members.
``(d) Director and Staff; Experts and Consultants.--Subject
to such review as the Comptroller General determines
necessary to ensure the efficient administration of the
Commission, the Commission may--
``(1) employ and fix the compensation of an Executive
Director (subject to the approval of the Comptroller General)
and such other personnel as may be necessary to carry out the
duties of the Commission under this section (without regard
to the provisions of title 5, United States Code, governing
appointments in the competitive service);
``(2) seek such assistance and support as may be required
in the performance of the duties of the Commission under this
section from appropriate Federal departments and agencies;
``(3) enter into contracts or make other arrangements, as
may be necessary for the conduct of the work of the
Commission (without regard to section 3709 of the Revised
Statutes (41 U.S.C. 5));
``(4) make advance, progress, and other payments which
relate to the work of the Commission;
``(5) provide transportation and subsistence for persons
serving without compensation; and
``(6) prescribe such rules and regulations as it deems
necessary with respect to the internal organization and
operation of the Commission.
``(e) Powers.--
``(1) Obtaining official data.--
``(A) In general.--The Commission may secure directly from
any department or agency of the United States information
necessary for the Commission to carry the duties under this
section.
``(B) Request of chair.--Upon request of the Chair, the
head of that department or agency shall furnish that
information to the Commission on an agreed upon schedule.
``(2) Data collection.--In order to carry out the duties of
the Commission under this section, the Commission shall--
``(A) use existing information, both published and
unpublished, where possible, collected and assessed either by
the staff of the Commission or under other arrangements made
in accordance with this section;
``(B) carry out, or award grants or contracts for, original
research and experimentation, where existing information is
inadequate; and
``(C) adopt procedures allowing any interested party to
submit information for the Commission's use in making reports
and recommendations.
``(3) Access of gao to information.--The Comptroller
General shall have unrestricted access to all deliberations,
records, and nonproprietary data that pertains to the work of
the Commission, immediately upon request. The expense of
providing such information shall be borne by the General
Accounting Office.
``(4) Periodic audit.--The Commission shall be subject to
periodic audit by the Comptroller General.
``(f) Application of FACA.--Section 14 of the Federal
Advisory Committee Act (5 U.S.C. App.) does not apply to the
Commission.
``(g) Authorization of Appropriations.--
``(1) Request for appropriations.--The Commission shall
submit requests for appropriations in the same manner as the
Comptroller General submits requests for appropriations, but
amounts appropriated for the Commission shall be separate
from amounts appropriated for the Comptroller General.
``(2) Authorization.--There are authorized to be
appropriated such sums as may be necessary to carry out the
provisions of this section.''.
(b) Effective Date.--The Comptroller General of the United
States shall appoint the initial members of the Safety Net
Organizations and Patient Advisory Commission established
under subsection (a) not later than June 1, 2004.
______

SA 1118. Mr. SPECTER submitted an amendment intended to be proposed
by him to the bill S. 1, to amend title XVIII of the Social Security
Act to provide for a voluntary prescription drug benefit under the
Medicare program and to strengthen and improve the Medicare program,
and for other purposes; as follows:

At the end of title VI, insert the following:

SEC.   . SENSE OF THE SENATE REGARDING THE ESTABLISHMENT OF A
NATIONWIDE PERMANENT LIFESTYLE MODIFICATION
PROGRAM FOR MEDICARE BENEFICIARIES.

(a) Findings.--Congress finds that:
(1) Heart disease kills more than 500,000 Americans per
year.
(2) The number and costs of interventions for the treatment
of coronary disease are rising and currently cost the health
care system $58,000,000,000 annually.
(3) The Medicare Lifestyle Modification Program has been
operating throughout 12 States and has been demonstrated to
reduce the need for coronary procedures by 88 percent per
year.
(4) The Medicare Lifestyle Modification Program is less
expensive to deliver than interventional cardiac procedures
and could reduce cardiovascular expenditures by
$36,000,000,000 annually.
(5) Lifestyle choices such as diet and exercise affect
heart disease and heart disease outcomes by 50 percent or
greater.
(6) Intensive lifestyle interventions which include teams
of nurses, doctors, exercise physiologists, registered
dietitians, and behavioral health clinicians have been
demonstrated to reduce heart disease risk factors and enhance
heart disease outcomes dramatically.
(7) The National Institutes of Health estimates that
17,000,000 Americans have diabetes and the Centers for
Disease Control and Prevention estimates that the number of
Americans who have a diagnosis of diabetes increased 61
percent in the last decade and is expected to more than
double by 2050.
(8) Lifestyle modification programs are superior to
medication therapy for treating diabetes.
(9) Individuals with diabetes are now considered to have
coronary disease at the date of diagnosis of their diabetic
state.
(10) The Medicare Lifestyle Modification Program has been
an effective lifestyle program for the reversal and treatment
of heart disease.
(11) Men with prostate cancer have shown significant
improvement in prostate cancer markers using a similar
approach in lifestyle modification.
(12) These lifestyle changes are therefore likely to affect
other chronic disease states, in addition to heart disease.
(b) Sense of the Senate.--It is the sense of the Senate
that--
(1) the Secretary of Health and Human Services should carry
out the demonstration project known as the Lifestyle
Modification Program Demonstration, as described in the

[[Page S8779]]

Health Care Financing Administration Memorandum of
Understanding entered into on November 13, 2000, on a
permanent basis;
(2) the project should include as many Medicare
beneficiaries as would like to participate in the project on
a voluntary basis; and
(3) the project should be conducted on a national basis.
______

SA 1119. Mrs. LINCOLN submitted an amendment intended to be proposed
by her to the bill S. 1, to amend title XVIII of the Social Security
Act to provide for a voluntary prescription drug benefit under the
Medicare program and to strengthen and improve the Medicare program,
and for other purposes; which was ordered to lie on the table; as
follows:

Strike section 443 and insert the following:

SEC. 443. MEDICARE COVERAGE OF CARE COORDINATION AND
ASSESSMENT SERVICES.

(a) Part B Coverage of Care Coordination and Assessment
Services.--Section 1861(s)(2) of the Social Security Act (42
U.S.C. 1395x(s)(2)) is amended--
(1) in subparagraph (U), by striking ``and'' 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) care coordination and assessment services (as defined
in subsection (ww)).''.
(b) Care Coordination and Assessment Services Defined.--
Section 1861 of the Social Security Act (42 U.S.C. 1395x) is
amended by adding at the end the following new subsection:

``Care Coordination and Assessment Services

``(ww)(1) The term `care coordination and assessment
services' means services that are furnished to an eligible
individual (as defined in paragraph (2)) by a care
coordinator (as defined in paragraph (3)) under a plan of
care prescribed by such care coordinator for the purpose of
care coordination and assessment, which may include any of
the following services:
``(A) an initial assessment of an individual's medical
condition, functional and cognitive capacity and
environmental and psychological needs and an annual
assessment thereafter.
``(B) Management of transitions of care across practice
settings and between providers.
``(C) Coordination of, and referral for, medical and other
health-related services, including--
``(i) multidisciplinary care conferences;
``(ii) coordination with other providers, including
telephone consultations with physicians; and
``(iii) monitoring and management of medications, with
special emphasis on clients using multiple prescriptions
(including coordination with the entity managing benefits for
the individual).
``(D) Patient and family care-giver education and
counseling (through office visits or telephone consultation),
including self-management services and risk appraisal to
identify behavioral risk factors through self assessment.
``(E) Providing information about end of life care,
including referral to hospice services, when appropriate,
including patient and family caregiver education and
counseling about hospice, and managing and facilitating
transition to hospice when elected.
``(F) Referral to and coordination with community
resources.
``(G) Such other services for which payment would not
otherwise be made under this title as the Secretary shall
determine to be appropriate including, but not limited to,
activities to facilitate continuity of care and patient
adherence to plans of care.
``(2) For purposes of this subsection, the term `eligible
individual' means an individual who a care coordinator
annually certifies has multiple chronic conditions and meets
eligibility criteria determined by the Secretary.
``(3)(A) For purposes of this subsection, the term `care
coordinator' means an individual or entity that--
``(i) is--
``(I) a physician who provides care to at least 50 eligible
individuals; or
``(II) an independent nurse practitioner who provides care
to at least 50 eligible individuals;
``(ii) has entered into a care coordination agreement with
the Secretary; and
``(iii) has appropriate office staffing, operating under
the direction of the eligible provider, which is sufficient
in size and expertise to address the complex clinical care
coordination needs of participating beneficiaries in the
practice;
``(iv) has an ability and process to identify eligible
beneficiaries;
``(v) has an ability to coordinate care for participating
beneficiaries;
``(vi) has an ability to maintain and update patient
records to ensure that care provided by other treating
providers (including the instructions of other treating
providers and any related lab results, prescription orders,
and ancillary treatment services) is included in the record;
``(vii) has an ability to periodically review the medical
record of participating beneficiaries to identify problems
related to transitions, poly-pharmacy, and care continuity
and to respond to resolve identified problems;
``(viii) is capable of referring to and coordinating with
community-based supportive services;
``(ix) has an ability to communicate with participating
beneficiaries or family caregivers as needed and appropriate,
using telephonic and/or electronic communications; and
``(x) agrees to coordinate care for participating
beneficiaries, consult with other treating providers
(including but not limited to other treating physicians,
other medical professionals involved in patient care,
residential and inpatient facilities, and pharmacies), and
community service providers;
``(xi) agrees to recognize patient treatment preferences;
and
``(xii) is certified by the Secretary as meeting standards
defined by the Secretary and being capable of coordinating
clinical care for eligible beneficiaries.
``(B) For purposes of subparagraph (A)(ii), each care
coordination agreement shall--
``(i) be entered into for a period of 1 year and may be
renewed if the Secretary is satisfied that the care
coordinator continues to meet the conditions of participation
specified in subparagraph (A);
``(ii) contain such other terms and conditions as the
Secretary may require.
``(4) For purposes of this subsection, the Secretary shall
send quarterly reports to each eligible provider that inform,
in aggregate, on the provider's participating beneficiary
caseload, using measures determined by the Secretary that are
derived from existing Medicare date sources. In preparing the
reports under this paragraph, the Secretary shall consider--
``(A) the average number of emergency room and nursing home
visits relative to geographic norms for all eligible
beneficiaries; and
``(B) the average number of unique physician visits
relative to geographic norms for all eligible beneficiaries.
``(5) For purposes of this subsection, the term `functional
limitations' means each of the following:
``(A) Eating.
``(B) Toileting.
``(C) Transferring.
``(D) Bathing.
``(E) Dressing.
``(F) Continence.
``(6) Rural health clinics and Federally qualified health
centers shall be eligible sites at which care coordination
and assessment services may be provided.
``(7) For purposes of this subsection, the term `chronic
condition' means an illness, functional limitation, or
cognitive impairment that is expected to last at least 1 year
and limits what a person can do, and requires ongoing care.
``(8) For purposes of this subsection, the Secretary shall
establish eligibility criteria for the care management
benefit that would target approximately 5 percent of elderly
medicare fee-for-service enrollees. The eligibility criteria
should identify enrollees who need care management because
they have multiple chronic conditions that result in high use
of Medicare services, high use of prescription medications,
and high Medicare costs. Inability to manage one's own care
due to cognitive impairment should be considered as an
additional indicator of need for care management.
(c) Payment and Elimination of Coinsurance.--
(1) In general.--Section 1833(a)(1) of the Social Security
Act (42 U.S.C. 1395l(a)(1)) is amended--
(A) by striking ``and'' before ``(U)''; and
(B) by inserting before the semicolon at the end the
following: ``, and (V) with respect to assessment services
described in section 1861(s)(2)(W), the amounts paid shall be
100 percent of the lesser of the actual charge for the
service or the amount determined under the payment basis
determined under section 1848 by the Secretary for such
service and an administrative fee shall be developed for care
coordination services''.
(2) Payment under physician fee schedule.--Section
1848(j)(3) of the Social Security Act (42 U.S.C. 1395w-
4(j)(3)) is amended by inserting ``(2)(W),'' after
``(2)(S),''.
(3) Elimination of coinsurance in outpatient hospital
settings.--The third sentence of section 1866(a)(2)(A) of the
Social Security Act (42 U.S.C. 1395cc(a)(2)(A)) is amended by
inserting after ``1861(s)(10)(A)'' the following: ``, with
respect to care coordination and assessment services (as
defined in section 1861(ww)(1)),''.
(d) Application of Limits on Billing.--Section
1842(b)(18)(C) of the Social Security Act (42 U.S.C.
1395u(b)(18)(C)) is amended by adding at the end the
following new clause:
``(vii) A care coordinator (as defined in section
1861(ww)(3)) that is not a physician.''.
(e) Exception to Limits on Physician Referrals.--Section
1877(b) of the Social Security Act (42 U.S.C. 1395nn(b)) is
amended--
(1) by redesignating paragraph (4) as paragraph (5); and
(2) by inserting after paragraph (3) the following new
paragraph:
``(4) Private sector purchasing and quality improvement
tools for original medicare.--In the case of a designated
health service, if the designated health service is--
``(A) a care coordination and assessment service (as
defined in section 1861(ww)(1)); and
``(B) provided by a care coordinator (as defined in
paragraph (3) of such section).''.
(f) Rulemaking.--The Secretary of Health and Human Services
shall define such terms

[[Page S8780]]

and establish such procedures as the Secretary determines
necessary to implement the provisions of this section.
(g) Effective Date.--The amendments made by this section
shall apply to care coordination and assessment services
furnished on or after January 1, 2006, and before January 1,
2011.
At the end of subtitle B of title IV, 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''.
______

SA 1120. Mr. DAYTON (for himself, Mr. Coleman, and Mr. Smith)
submitted an amendment intended to be proposed by him to the bill S. 1,
to amend title XVIII of the Social Security Act to provide for a
voluntary prescription drug benefit under the Medicare program and to
strengthen and improve the Medicare program, and for other purposes;
which was ordered to lie on the table; as follows:

Strike section 426 and insert the following:

SEC. 426. TEMPORARY INCREASE FOR GROUND AMBULANCE SERVICES.

Section 1834(l) (42 U.S.C. 1395m(l)), as amended by section
405(b)(2), is amended by adding at the end the following new
paragraph:
``(10) Temporary increase for ground ambulance services.--
``(A) In general.--Notwithstanding any other provision of
this subsection, in the case of ground ambulance services
furnished on or after January 1, 2004, and before January 1,
2007 for which the transportation originates in--
``(i) a rural area described in paragraph (9) or in a rural
census tract described in such paragraph, the fee schedule
established under this section shall provide that the rate
for the service otherwise established, after application of
any increase under such paragraph, shall be increased by 5
percent; and
``(ii) an area not described in clause (i), the fee
schedule established under this section shall provide that
the rate for the service otherwise established shall be
increased by 2 percent
``(B) Application of increased payments after 2007.--The
increased payments under subparagraph (A) shall not be taken
into account in calculating payments for services furnished
on or after the period specified in such subparagraph.''.
______

SA 1121. Mr. KYL (for himself, Mr. Nickles, Mr. Gregg, Mr. Thomas,
and Mr. Lott) proposed an amendment to the bill S. 1, to amend title
XVIII of the Social Security Act to provide for a voluntary
prescription drug benefit under the Medicare program and to strengthen
and improve the Medicare program, and for other purposes; as follows:

At the appropriate place, insert the following:

SEC.   . SENSE OF THE SENATE CONCERNING THE STRUCTURE OF
MEDICARE REFORM AND THE PRESCRIPTION DRUG
BENEFIT.

(a) Findings.--The Senate makes the following findings:
(1) America's seniors deserve a fiscally-strong Medicare
system that fulfills its promise to them and future retirees.
(2) The impending retirement of the ``baby boom''
generation will dramatically increase the costs of providing
Medicare benefits. Medicare costs will double relative to the
size of the economy from 2% of GDP today to 4% in 2025 and
double again to 8% of GDP in 2075. This growth will
accelerate substantially when Congress adds a necessary
prescription drug benefit.
(3) Medicare's current structure does not have the
flexibility to quickly adapt to rapid advances in modern
health care. Medicare lags far behind other insurers in
providing prescription drug coverage, disease management
programs, and a host of other advances. Reforming Medicare to
create a more self-adjusting, innovative structure is
essential to improve Medicare's efficiency and the quality of
the medical care it provides.
(4) Private-sector choice for Medicare beneficiaries would
provide two key benefits: it would be tailored to the needs
of America's seniors, not the government, and would create a
powerful incentive for private-sector Medicare plans to
provide the best quality health care to seniors at the most
affordable price.
(5) The method by which the national preferred provider
organizations in the Federal Employees Health Benefits
Program have been reimbursed has proven to be a reliable and
successful mechanism for providing Members of Congress and
federal employees with excellent health care choices.
(6) Unlike the Medicare payment system, which has had to be
changed by Congress every few years, the Federal Employees
Health Benefits Program has existed for 43 years with minimal
changes from Congress.
(b) Sense of the Senate.--It is the Sense of the Senate
that Medicare reform legislation should:
(1) Ensure that prescription drug coverage is directed to
those who need it most.
(2) Provide that government contributions used to support
Medicare Advantage plans are based on market principles
beginning in 2006 to ensure the long and short term viability
of such options for America's seniors.
(3) Develop a payment system for the Medicare Advantage
preferred provider organizations similar to the payment
system used for the national preferred provider organizations
in the Federal Employees Health Benefits Program.
(4) Limit the addition of new unfunded obligations in the
Medicare program so that the long-term solvency of this
important program is not further jeopardized.
(5) Incorporate private sector, market-based elements, that
do not rely on the inefficient Medicare price control
structure.
(6) Keep the cost of structural changes and new benefits
within the $400 billion provided for under the current
Congressional Budget Resolution for implementing Medicare
reform and providing a prescription drug benefit.
(7) Preserve the current employer-sponsored retiree health
plans and not design a benefit which has the unintended
consequences of supplanting private coverage.
(8) Incorporate regulatory reform proposals to eliminate
red tape and reduce costs.
(9  Restore the right of Medicare beneficiaries and their
doctors to work together to provide services, allow private
fee for service plans to set their own premiums, and permit
seniors to add their own dollars beyond the government
contribution.

[[Page S8781]]

______

SA 1122. 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 provide for a
voluntary prescription drug benefit under the Medicare program and to
strengthen and improve the Medicare program, and for other purposes; as
follows:

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

SEC. __. RURAL COMMUNITY HOSPITAL DEMONSTRATION PROGRAM.

(a) Establishment of Rural Community Hospital (RCH)
Demonstration Program.--
(1) In general.--The Secretary shall establish a
demonstration program to test the feasibility and
advisability of the establishment of rural community
hospitals that furnish rural community hospital services to
medicare beneficiaries.
(2) Designation of rchs.--
(A) Application.--Each hospital that is located in a
demonstration area described in subparagraph (C) that desires
to participate in the demonstration program under this
section shall submit an application to the Secretary at such
time, in such manner, and containing such information as the
Secretary may require.
(B) Designation.--The Secretary shall designate any
hospital that is located in a demonstration area described in
subparagraph (C), submits an application in accordance with
subparagraph (A), and meets the other requirements of this
section as a rural community hospital for purposes of the
demonstration program.
(C) Demonstration areas.--There shall be four demonstration
areas within this program. Two of these demonstration areas
described in this subparagraph shall include Kansas and
Nebraska.
(3) Duration.--The Secretary shall conduct the
demonstration program under this section for a 5-year period.
(4) Implementation.--The Secretary shall implement the
demonstration program not later than January 1, 2005, but may
not implement the program before October 1, 2004.
(b) Payment.--
(1) Inpatient hospital services.--The amount of payment
under the demonstration program 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
subsection (a)(2)(A)--
(A) the reasonable costs of providing such services,
without regard to the amount of the customary or other
charge; or
(B) the amount of payment provided for under the
prospective payment system for inpatient hospital services
under section 1886(d) of the Social Security Act (42 U.S.C.
1395ww(d)).
(2) Outpatient services.--The amount of payment under the
demonstration program for outpatient services furnished in a
rural community hospital is, at the election of the hospital
in the application referred to in subsection (a)(2)(A)--
(A) 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) of the Social
Security Act (42 U.S.C. 1395x(v)(1)(U)); or
(B) the amount of payment provided for under the
prospective payment system for covered OPD services under
section 1833(t) of the Social Security Act (42 U.S.C.
1395l(t)).
(3) Home health services.--In determining payments under
the demonstration program for home health services furnished
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 section 1895 of the Social Security Act (42 U.S.C.
1395fff) to such services furnished by the agency; 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) of the
Social Security Act (42 U.S.C. 1395x(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.
(4) Consolidated billing.--The Secretary shall permit
consolidated billing under section 1842(b)(6)(E) of the
Social Security Act (42 U.S.C. 1395u(b)(6)(E)).
(5) Exemption from 30 percent reduction in reimbursement
for bad debt.--In determining the reasonable costs for rural
community hospitals, section 1861(v)(1)(T) of the Social
Security Act (42 U.S.C. 1395x(v)(1)(T)) shall not apply.
(6) Beneficiary cost-sharing for outpatient services.--The
amounts of beneficiary cost-sharing for outpatient services
furnished in a rural community hospital under the
demonstration program shall be as follows:
(A) For items and services that would have been paid under
section 1833(t) of the Social Security Act (42 U.S.C.
1395l(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) of such Act (42 U.S.C. 1395l(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.
(7) Return on equity.--
(A) In general.--Notwithstanding subparagraph (P)(i) and
(S)(i) of section 1861(v)(1) of the Social Security Act (42
U.S.C. 1395x(v)(1)) and section 1886(g)(2) of such Act (42
U.S.C. 1395ww(g)(2)), in determining the reasonable costs of
the services described in subclause (II) furnished by a rural
community hospital for payment of a return on equity capital
at a rate of return equal to 150 percent of the average
specified in section 1861(v)(1)(P)(i) of such Act (42 U.S.C.
1395x(v)(1)(P)(i)).
(B) Services described.--The services referred to in
subclause (I) are rural community hospital services.
(C) Disregard of proprietary provider status.--Payment
under the demonstration program shall be made without regard
to whether a provider is a proprietary provider.
(8) Removing barriers to establishment of distinct part
units by rch facilities.--Notwithstanding section
1886(d)(1)(B) of the Social Security Act (42 U.S.C.
1395ww(d)(1)(B)), the Secretary shall permit rural community
hospitals to establish distinct part units for purposes of
applying such section.
(c) Funding.--
(1) In general.--The Secretary shall provide for the
transfer from the Federal Hospital Insurance Trust Fund under
section 1817 of the Social Security Act (42 U.S.C. 1395i) and
the Federal Supplementary Insurance Trust Fund established
under section 1841 of such Act (42 U.S.C. 1395t), in such
proportion as the Secretary determines to be appropriate, of
such funds as are necessary for the costs of carrying out the
demonstration program under this section.
(2) Budget neutrality.--In conducting the demonstration
program under this section, the Secretary shall ensure that
the aggregate payments made by the Secretary do not exceed
the amount which the Secretary would have paid if the
demonstration program under this section was not implemented.
(d) Waiver Authority.--The Secretary may waive such
requirements of titles XI and XVIII of the Social Security
Act (42 U.S.C. 1301 et seq.; 1395 et seq.) as may be
necessary for the purpose of carrying out the demonstration
program under this section.
(e) Report.--Not later than 6 months after the completion
of the demonstration program under this section, the
Secretary shall submit to Congress a report on such program,
together with recommendations for such legislation and
administrative action as the Secretary determines to be
appropriate.
(f) Definitions.--In this section:
(1) Rural community hospital.--
(A) In general.--The term ``rural community hospital''
means a hospital (as defined in section 1861(e) of the Social
Security Act (42 U.S.C. 1395x(e))) that--
(i) is located in a rural area (as defined in section
1886(d)(2)(D) of such Act (42 U.S.C. 1395ww(d)(2)(D))) or
treated as being so located pursuant to section 1886(d)(8)(E)
of such Act (42 U.S.C. 1395ww(d)(8)(E));
(ii) subject to subparagraph (B), has less than 51 acute
care inpatient beds, as reported in its most recent cost
report;
(iii) makes available 24-hour emergency care services;
(iv) subject to subparagraph (C), has a provider agreement
in effect with the Secretary and is open to the public as of
January 1, 2003; and
(v) applies to the Secretary for such designation.
(B) Treatment of psychiatric and rehabilitation units.--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.
(C) Types of hospitals that may participate.--Subparagraph
(1)(D) shall not be construed to prohibit any of the
following from qualifying as a rural community hospital:
(i) 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).
(ii) A facility obtaining a new provider number pursuant to
a change of ownership.
(iii) 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.
(D) Inclusion of cahs.--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 section 1861(e) of the Social Security Act
(42 U.S.C. 1395x(e)) and section 1866 of such Act (42 U.S.C.
1395cc).
(2) Qualified rch-based home health agency defined.--The
term ``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

[[Page S8782]]

(B) at least 35 miles from any main or branch office of
another home health agency.

SEC. __. CRITICAL ACCESS HOSPITAL IMPROVEMENT DEMONSTRATION
PROGRAM.

(a) Establishment of Critical Access Hospital Demonstration
Program.--
(1) In general.--The Secretary shall establish a
demonstration program to test various methods to improve the
critical access hospital program under section 1820 of the
Social Security Act (42 U.S.C. 1395i-4).
(2) Critical access hospital improvement.--In conducting
the demonstration program under this section, the Secretary
shall apply rules with respect to critical access hospitals
participating in the program as follows:
(A) 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 subsections
(c)(2)(B)(iii) and (f) of section 1820 of the Social Security
Act (42 U.S.C. 1395i-4), 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 such Act (42 U.S.C.
1395ww(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.
(B) Exclusion from home health pps.--Notwithstanding
section 1895 of the Social Security Act (42 U.S.C. 1395fff),
in determining payments under the demonstration program for
home health services furnished by a home health agency that
is owned and operated by a critical access hospital
participating in the demonstration program--
(i) the agency may make an election to waive application of
the prospective payment system established under such section
to such services furnished by the agency; and
(ii) 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.
(C) Exemption of cah facilities from pps.--Notwithstanding
section 1888(e) of the Social Security Act (42 U.S.C.
1395yy(e)), in determining payments under this part for
covered skilled nursing facility services furnished by a
skilled nursing facility that is a distinct part unit of a
critical access hospital participating in the demonstration
program or is owned and operated by a critical access
hospital participating in the demonstration program--
(i) the prospective payment system established under such
section shall not apply; and
(ii) payment shall be made on the basis of the reasonable
costs incurred in furnishing such services as determined
under section 1861(v) of such Act (42 U.S.C. 1395x(v)), but
without regard to the amount of the customary or other
charges with respect to such services.
(D) Consolidated billing.--The Secretary shall permit
consolidated billing under section 1842(b)(6)(E) of the
Social Security Act (42 U.S.C. 1395u(b)(6)(E)).
(E) Exemption of certain distinct part psychiatric or
rehabilitation units from cost limits.--Notwithstanding
section 1886(b) of the Social Security Act (42 U.S.C.
1395ww(b)), in determining payments under the demonstration
program for inpatient hospital services furnished by a
distinct part psychiatric or rehabilitation unit (described
in the matter following section 1886(d)(1)(B)(v) of such Act
(42 U.S.C. 1395ww(d)(1)(B)(v))) of a critical access hospital
participating in the demonstration program--
(i) the limits imposed under the preceding paragraphs of
this subsection shall not apply; and
(ii) payment shall be made on the basis of the reasonable
costs incurred in furnishing such services as determined
under section 1861(v) of such Act (42 U.S.C. 1395x(v)), but
without regard to the amount of the customary or other
charges with respect to such services.
(F) Return on equity.--
(i) In general.--Notwithstanding subparagraph (P)(i) and
(S)(i) of section 1861(v)(1) of the Social Security Act (42
U.S.C. 1395x(v)(1)) and section 1886(g)(2) of such Act (42
U.S.C. 1395ww(g)(2)), in determining the reasonable costs of
the services described in subclause (II) furnished by a
critical access hospital participating in the demonstration
program for payment of a return on equity capital at a rate
of return equal to 150 percent of the average specified in
section 1861(v)(1)(P)(i) of such Act (42 U.S.C.
1395x(v)(1)(P)(i)).
(ii) Services described.--The services referred to in
subclause (I) are inpatient critical access hospital
services, outpatient critical access hospital services,
extended care services, posthospital extended care services,
home health services, ambulance services, and inpatient
hospital services.
(iii) Disregard of proprietary provider status.--Payment
under the demonstration program shall be made without regard
to whether a provider is a proprietary provider.
(G) Removing barriers to establishment of distinct part
units by cah facilities.--Notwithstanding section
1886(d)(1)(B) of the Social Security Act (42 U.S.C.
1395ww(d)(1)(B)), the Secretary shall permit critical access
hospitals participating in the demonstration program to
establish distinct part units for purposes of applying such
section.
(3) Participation of cahs.--
(A) Application.--Each critical access hospital that is
located in a demonstration area described in subparagraph (C)
that desires to participate in the demonstration program
under this section shall submit an application to the
Secretary at such time, in such manner, and containing such
information as the Secretary may require.
(B) Participation.--The Secretary shall permit any critical
access hospital that is located in a demonstration area
described in subparagraph (C), submits an application in
accordance with subparagraph (A), and meets the other
requirements of this section to participate in the
demonstration program.
(C) Demonstration areas.--There shall be four demonstration
areas within this program. Two of these demonstration areas
described in this subparagraph shall include Kansas and
Nebraska.
(4) Duration.--The Secretary shall conduct the
demonstration program under this section for a 5-year period.
(5) Implementation.--The Secretary shall implement the
demonstration program not later than January 1, 2005, but may
not implement the program before October 1, 2004.
(b) Funding.--
(1) In general.--The Secretary shall provide for the
transfer from the Federal Hospital Insurance Trust Fund under
section 1817 of the Social Security Act (42 U.S.C. 1395i) and
the Federal Supplementary Insurance Trust Fund established
under section 1841 of such Act (42 U.S.C. 1395t), in such
proportion as the Secretary determines to be appropriate, of
such funds as are necessary for the costs of carrying out the
demonstration program under this section.
(2) Budget neutrality.--In conducting the demonstration
program under this section, the Secretary shall ensure that
the aggregate payments made by the Secretary do not exceed
the amount which the Secretary would have paid if the
demonstration program under this section was not implemented.
(c) Waiver Authority.--The Secretary may waive such
requirements of titles XI and XVIII of the Social Security
Act (42 U.S.C. 1301 et seq.; 1395 et seq.) as may be
necessary for the purpose of carrying out the demonstration
program under this section.
(d) Report.--Not later than 6 months after the completion
of the demonstration program under this section, the
Secretary shall submit to Congress a report on such program,
together with recommendations for such legislation and
administrative action as the Secretary determines to be
appropriate.
______

SA 1123. Mr. DeWINE submitted an amendment intended to be proposed by
him to the bill S. 1, to amend title XVIII of the Social Security Act
to provide for a voluntary prescription drug benefit under the Medicare
program and to strengthen and improve 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. __. SENSE OF THE SENATE REGARDING THE PRESERVATION OF
BENEFICIARY CHOICES UNDER MEDICAREADVANTAGE;
ESTABLISHMENT OF STANDARDS.

(a) Sense of the Senate.--It is the sense of the Senate
that medicare beneficiaries should have a choice among
multiple types of health plans under the MedicareAdvantage
program, including regional preferred provider organizations
and local health maintenance organization plans in markets
where such plans naturally occur.
(b) Establishment of Standards.--The Secretary shall
establish standards with respect to the participation of
private health plans in the MedicareAdvantage program under
part C of title XVIII of the Social Security Act (42 U.S.C.
1395w-21 et seq.) that--
(1) encourage fair competition among such plans;
(2) ensure that beneficiaries who desire to elect health
benefits coverage under such a plan are provided with
benefits that are actuarially equivalent to the benefits
provided under other beneficiary options for health benefits
coverage available under the medicare program; and
(3) equally apply incentives to promote health plan
participation to all plans desiring to participate in the
MedicareAdvantage program.
______

SA 1125. Mr. HATCH submitted an amendment intended to be proposed by
him the bill S. 1, to amend title XVIII of the Social Security Act to
provide for a voluntary prescription drug benefit under the Medicare
program and to strengthen and improve the Medicare program, and for
other purposes; which was ordered to lie on the table; as follows:

Strike title V and insert the following:

TITLE V--MEDICARE EDUCATION, REGULATORY REFORM, AND CONTRACTING
IMPROVEMENTS

Subtitle A--Regulatory Reform

SEC. 500. SHORT TITLE.

This title may be cited as the ``Medicare Education,
Regulatory Reform, and Contracting Improvement Act of 2003''.

[[Page S8783]]

SEC. 501. COMPLIANCE WITH CHANGES IN REGULATIONS AND
POLICIES.

(a) No Retroactive Application of Substantive Changes.--
(1) In general.--Section 1871 (42 U.S.C. 1395hh) is amended
by adding at the end the following new subsection:
``(d)(1)(A) A substantive change in regulations, manual
instructions, interpretative rules, statements of policy, or
guidelines of general applicability under this title shall
not be applied (by extrapolation or otherwise) retroactively
to items and services furnished before the effective date of
the change, unless the Secretary determines that--
``(i) such retroactive application is necessary to comply
with statutory requirements; or
``(ii) failure to apply the change retroactively would be
contrary to the public interest.''.
(2) Effective date.--The amendment made by paragraph (1)
shall apply to substantive changes issued on or after the
date of the enactment of this Act.
(b) Timeline for Compliance With Substantive Changes After
Notice.--
(1) In general.--Section 1871(d)(1), as added by subsection
(a), is amended by adding at the end the following:
``(B) A compliance action may be made against a provider of
services, physician, practitioner, or other supplier with
respect to noncompliance with such a substantive change only
for items and services furnished on or after the effective
date of the change.
``(C)(i) Except as provided in clause (ii), a substantive
change may not take effect until not earlier than the date
that is the end of the 30-day period that begins on the date
that the Secretary has issued or published, as the case may
be, the substantive change.
``(ii) The Secretary may provide for a substantive change
to take effect on a date that precedes the end of the 30-day
period under clause (i) if the Secretary finds that waiver of
such 30-day period is necessary to comply with statutory
requirements or that the application of such 30-day period is
contrary to the public interest. If the Secretary provides
for an earlier effective date pursuant to this clause, the
Secretary shall include in the issuance or publication of the
substantive change a finding described in the first sentence,
and a brief statement of the reasons for such finding.''.
(2) Effective date.--The amendment made by paragraph (1)
shall apply to compliance actions undertaken on or after the
date of the enactment of this Act.

SEC. 502. REPORT ON LEGAL AND REGULATORY INCONSISTENCIES.

Section 1871 (42 U.S.C. 1395hh), as amended by section
501(a)(1), is amended by adding at the end the following new
subsection:
``(e)(1) Not later than 2 years after the date of the
enactment of this subsection, and every 2 years thereafter,
the Secretary shall submit to Congress a report with respect
to the administration of this title and areas of
inconsistency or conflict among the various provisions under
law and regulation.
``(2) In preparing a report under paragraph (1), the
Secretary shall collect--
``(A) information from beneficiaries, providers of
services, physicians, practitioners, and other suppliers with
respect to such areas of inconsistency and conflict; and
``(B) information from medicare contractors that tracks the
nature of communications and correspondence, including the
communications and correspondence required under section
1874A.
``(3) A report under paragraph (1) shall include a
description of efforts by the Secretary to reduce such
inconsistency or conflicts, and recommendations for
legislation or administrative action that the Secretary
determines appropriate to further reduce such inconsistency
or conflicts.''.

SEC. 503. STATUS OF PENDING INTERIM FINAL REGULATIONS.

Section 1871 (42 U.S.C. 1395hh) as amended by sections 501
and 502, is amended by adding at the end the following new
subsection:
``(f) The Secretary shall publish in the Federal Register
at lease once every 6 months a list that provides the status
of each interim final regulation for which no final
regulation has been published. Such list shall include the
date by which the Secretary plans to publish the final
regulation that is based on the interim final regulation.''.

Subtitle B--Appeals Process Reform

SEC. 511. SUBMISSION OF PLAN FOR TRANSFER OF RESPONSIBILITY
FOR MEDICARE APPEALS.

(a) Submission of Transition Plan.--
(1) In general.--Not later than April 1, 2004, the
Commissioner of Social Security and the Secretary shall
develop and transmit to Congress and the Comptroller General
of the United States a plan under which the functions of
administrative law judges responsible for hearing cases under
title XVIII of the Social Security Act (and related
provisions in title XI of such Act) are transferred from the
responsibility of the Commissioner and the Social Security
Administration to the Secretary and the Department of Health
and Human Services.
(2) Contents.--The plan shall include information on the
following:
(A) Workload.--The number of such administrative law judges
and support staff required now and in the future to hear and
decide such cases in a timely manner, taking into account the
current and anticipated claims volume, appeals, number of
beneficiaries, and statutory changes.
(B) Cost projections and financing.--Funding levels
required for fiscal year 2005 and subsequent fiscal years to
carry out the functions transferred under the plan and how
such transfer should be financed.
(C) Transition timetable.--A timetable for the transition.
(D) Regulations.--The establishment of specific regulations
to govern the appeals process.
(E) Case tracking.--The development of a unified case
tracking system that will facilitate the maintenance and
transfer of case specific data across both the fee-for-
service and managed care components of the medicare program.
(F) Feasibility of precedential authority.--The feasibility
of developing a process to give decisions of the Departmental
Appeals Board in the Department of Health and Human Services
addressing broad legal issues binding, precedential
authority.
(G) Access to administrative law judges.--The feasibility
of--
(i) filing appeals with administrative law judges
electronically; and
(ii) conducting hearings using tele- or video-conference
technologies.
(H) Independence of judges.--The steps that should be taken
to ensure that judges who perform the administrative law
judge functions after the transfer under the plan maintain
their independence from the Centers for Medicare & Medicaid
Services and its contractors.
(I) Geographic distribution.--The steps that should be
taken to provide for an appropriate geographic distribution
of judges performing the administrative law judge functions
that are transferred under the plan throughout the United
States to ensure timely access to such judges.
(J) Hiring.--The steps that should be taken to hire judges
(and support staff) to perform the administrative law judge
functions that are transferred under the plan.
(K) Performance standards.--The establishment of
performance standards for judges performing the
administrative law judge functions that are transferred under
the plan with respect to timelines for decisions in cases
under title XVIII.
(L) Shared resources.--The feasibility of the Secretary
entering into such arrangements with the Commissioner of
Social Security as may be appropriate with respect to
transferred functions under the plan to share office space,
support staff, and other resources, with appropriate
reimbursement.
(M) Training.--The training that should be provided to
judges performing the administrative law judge functions that
are transferred under the plan with respect to laws and
regulations under title XVIII.
(3) Additional information.--The plan may also include
recommendations for further congressional action, including
modifications to the requirements and deadlines established
under section 1869 of the Social Security Act (as amended by
sections 521 and 522 of BIPA (114 Stat. 2763A-534) and this
Act).
(b) GAO Evaluation.--The Comptroller General of the United
States shall--
(1) evaluate the plan submitted under subsection (a); and
(2) not later than 6 months after such submission, submit
to Congress a report on such evaluation.

SEC. 512. EXPEDITED ACCESS TO JUDICIAL REVIEW.

(a) In General.--Section 1869(b) (42 U.S.C. 1395ff(b)) is
amended--
(1) in paragraph (1)(A), by inserting ``, subject to
paragraph (2),'' before ``to judicial review of the
Secretary's final decision''; and
(2) by adding at the end the following new paragraph:
``(2) Expedited access to judicial review.--
``(A) In general.--The Secretary shall establish a process
under which a provider of services or supplier that furnishes
an item or service or a beneficiary who has filed an appeal
under paragraph (1) (other than an appeal filed under
paragraph (1)(F)(i)) may obtain access to judicial review
when a review entity (described in subparagraph (D)), on its
own motion or at the request of the appellant, determines
that the Departmental Appeals Board does not have the
authority to decide the question of law or regulation
relevant to the matters in controversy and that there is no
material issue of fact in dispute. The appellant may make
such request only once with respect to a question of law or
regulation for a specific matter in dispute in a case of an
appeal.
``(B) Prompt determinations.--If, after or coincident with
appropriately filing a request for an administrative hearing,
the appellant requests a determination by the appropriate
review entity that the Departmental Appeals Board does not
have the authority to decide the question of law or
regulations relevant to the matters in controversy and that
there is no material issue of fact in dispute and if such
request is accompanied by the documents and materials as the
appropriate review entity shall require for purposes of
making such determination, such review entity shall make a
determination on the request in writing within 60 days after
the date such review entity receives the request and such
accompanying documents and materials. Such a determination by
such review entity shall be considered a final decision and
not subject to review by the Secretary.
``(C) Access to judicial review.--
``(i) In general.--If the appropriate review entity--

[[Page S8784]]

``(I) determines that there are no material issues of fact
in dispute and that the only issue is one of law or
regulation that the Departmental Appeals Board does not have
authority to decide; or
``(II) fails to make such determination within the period
provided under subparagraph (B);

then the appellant may bring a civil action as described in
this subparagraph.
``(ii) Deadline for filing.--Such action shall be filed, in
the case described in--

``(I) clause (i)(I), within 60 days of the date of the
determination described in such clause; or
``(II) clause (i)(II), within 60 days of the end of the
period provided under subparagraph (B) for the determination.

``(iii) Venue.--Such action shall be brought in the
district court of the United States for the judicial district
in which the appellant is located (or, in the case of an
action brought jointly by more than one applicant, the
judicial district in which the greatest number of applicants
are located) or in the district court for the District of
Columbia.
``(iv) Interest on any amounts in controversy.--Where a
provider of services or supplier is granted judicial review
pursuant to this paragraph, the amount in controversy (if
any) shall be subject to annual interest beginning on the
first day of the first month beginning after the 60-day
period as determined pursuant to clause (ii) and equal to the
rate of interest on obligations issued for purchase by the
Federal Supplementary Medical Insurance Trust Fund for the
month in which the civil action authorized under this
paragraph is commenced, to be awarded by the reviewing court
in favor of the prevailing party. No interest awarded
pursuant to the preceding sentence shall be deemed income or
cost for the purposes of determining reimbursement due
providers of services, physicians, practitioners, and other
suppliers under this Act.
``(D) Review entity defined.--For purposes of this
subsection, the term `review entity' means an entity of up to
3 qualified reviewers drawn from existing appeals levels
other than the redetermination level.''.
(b) Application to Provider Agreement Determinations.--
Section 1866(h)(1) (42 U.S.C. 1395cc(h)(1)) is amended--
(1) by inserting ``(A)'' after ``(h)(1)''; and
(2) by adding at the end the following new subparagraph:
``(B) An institution or agency described in subparagraph
(A) that has filed for a hearing under subparagraph (A) shall
have expedited access to judicial review under this
subparagraph in the same manner as providers of services,
suppliers, and beneficiaries may obtain expedited access to
judicial review under the process established under section
1869(b)(2). Nothing in this subparagraph shall be construed
to affect the application of any remedy imposed under section
1819 during the pendency of an appeal under this
subparagraph.''.
(c) Conforming Amendment.--Section 1869(b)(1)(F)(ii) (42
U.S.C. 1395ff(b)(1)(F)(ii)) is amended to read as follows:
``(ii) Reference to expedited access to judicial review.--
For the provision relating to expedited access to judicial
review, see paragraph (2).''.
(d) Effective Date.--The amendments made by this section
shall apply to appeals filed on or after October 1, 2004.

SEC. 513. COST REPORT REFORM.

(a) Report.--Not later than the date that is 1 year after
the date of enactment of this Act, the Secretary shall submit
to the Committee on Finance of the Senate and the Committees
on Ways and Means and Energy and Commerce of the House of
Representatives a report recommending specific ways to
modernize the cost reporting system under the medicare
program under title XVIII of the Social Security Act (42
U.S.C. 1395 et seq.). Such report shall be consistent with
the recommendations of the Secretary's Advisory Committee on
Regulatory Reform, including the use of Generally Accepted
Accounting Principles.
(b) Consultation.--In developing the report submitted under
subsection (a), the Secretary shall consult with
representatives of the hospital industry, the Medicare
Payment Advisory Commission, the General Accounting Office,
and such other individuals and entities as the Secretary
determines to be appropriate.

SEC. 514. EXPEDITED REVIEW OF CERTAIN PROVIDER AGREEMENT
DETERMINATIONS.

(a) Termination and Certain Other Immediate Remedies.--
(1) In general.--The Secretary shall develop and implement
a process to expedite proceedings under sections 1866(h) of
the Social Security Act (42 U.S.C. 1395cc(h)) in which--
(A) the remedy of termination of participation has been
imposed;
(B) a sanction described in clause (i) or (iii) of section
1819(h)(2)(B) of such Act (42 U.S.C. 1395i-3(h)(2)(B)) has
been imposed, but only if such sanction has been imposed on
an immediate basis; or
(C) the Secretary has required a skilled nursing facility
to suspend operations of a nurse aide training program.
(2) Priority for cases of termination.--Under the process
described in paragraph (1), priority shall be provided in
cases of termination described in subparagraph (A) of such
paragraph.
(b) Increased Financial Support.--In addition to any
amounts otherwise appropriated, to reduce by 50 percent the
average time for administrative determinations on appeals
under section 1866(h) of the Social Security Act (42 U.S.C.
1395cc(h)), there are authorized to be appropriated (in
appropriate part from the Federal Hospital Insurance Trust
Fund and the Federal Supplementary Medical Insurance Trust
Fund) to the Secretary such sums for fiscal year 2004 and
each subsequent fiscal year as may be necessary to increase
the number of administrative law judges (and their staffs) at
the Departmental Appeals Board of the Department of Health
and Human Services and to educate such judges and staff on
long-term care issues.

SEC. 515. REVISIONS TO MEDICARE APPEALS PROCESS.

(a) Timeframes for the Completion of the Record.--Section
1869(b) (42 U.S.C. 1395ff(b)), as amended by section
512(a)(2), is amended by adding at the end the following new
paragraph:
``(3) Timely completion of the record.--
``(A) Deadline.--Subject to subparagraph (B), the deadline
to complete the record in a hearing before an administrative
law judge or a review by the Departmental Appeals Board is 90
days after the date the request for the review or hearing is
filed.
``(B) Extensions for good cause.--The person filing a
request under subparagraph (A) may request an extension of
such deadline for good cause. The administrative law judge,
in the case of a hearing, and the Departmental Appeals Board,
in the case of a review, may extend such deadline based upon
a finding of good cause to a date specified by the judge or
Board, as the case may be.
``(C) Delay in decision deadlines until completion of
record.--Notwithstanding any other provision of this section,
the deadlines otherwise established under subsection (d) for
the making of determinations in hearings or review under this
section are 90 days after the date on which the record is
complete.
``(D) Complete record described.--For purposes of this
paragraph, a record is complete when the administrative law
judge, in the case of a hearing, or the Departmental Appeals
Board, in the case of a review, has received--
``(i) written or testimonial evidence, or both, submitted
by the person filing the request,
``(ii) written or oral argument, or both,
``(iii) the decision of, and the record for, the prior
level of appeal, and
``(iv) such other evidence as such judge or Board, as the
case may be, determines is required to make a determination
on the request.''.
(b) Revisions to Appeals Timeframes.--Section 1869 (42
U.S.C. 1395ff) is amended--
(1) in subsection (a)(3)(C)(ii), by striking ``30-day
period'' each place it appears and inserting ``60-day
period'';
(2) in subsection (c)(3)(C)(i), by striking ``30-day
period'' and inserting ``60-day period'';
(3) in subsection (d)(1)(A), by striking ``90-day period''
and inserting ``120-day period''; and
(4) in subsection (d)(2)(A), by striking ``90-day period''
and inserting ``120-day period''.
(c) Use of Patients' Medical Records.--Section
1869(c)(3)(B)(i) (42 U.S.C. 1395ff(c)(3)(B)(i)) is amended by
inserting ``(including the medical records of the individual
involved)'' after ``clinical experience''.
(d) Notice Requirements for Medicare Appeals.--
(1) Initial determinations and redeterminations.--Section
1869(a) (42 U.S.C. 1395ff(a)) is amended by adding at the end
the following new paragraph:
``(4) Requirements of notice of determinations and
redeterminations.--A written notice of a determination on an
initial determination or on a redetermination, insofar as
such determination or redetermination results in a denial of
a claim for benefits, shall be provided in printed form and
written in a manner to be understood by the beneficiary and
shall include--
``(A) the reasons for the determination, including, as
appropriate--
``(i) upon request in the case of an initial determination,
the provision of the policy, manual, or regulation that
resulted in the denial; and
``(ii) upon request, in the case of a redetermination, a
summary of the clinical or scientific evidence used in making
the determination (as appropriate);
``(B) the procedures for obtaining additional information
concerning the determination or redetermination; and
``(C) notification of the right to seek a redetermination
or otherwise appeal the determination and instructions on how
to initiate such a redetermination or appeal under this
section.''.
(2) Reconsiderations.--Section 1869(c)(3)(E) (42 U.S.C.
1395ff(c)(3)(E)) is amended to read as follows:
``(E) Explanation of decision.--Any decision with respect
to a reconsideration of a qualified independent contractor
shall be in writing in a manner to be understood by the
beneficiary and shall include--
``(i) to the extent appropriate, an explanation of the
decision as well as a discussion of the pertinent facts and
applicable regulations applied in making such decision;
``(ii) a notification of the right to appeal such
determination and instructions on how to initiate such appeal
under this section; and
``(iii) in the case of a determination of whether an item
or service is reasonable and

[[Page S8785]]

necessary for the diagnosis or treatment of illness or injury
(under section 1862(a)(1)(A)) an explanation of the
decision.''.
(3) Appeals.--Section 1869(d) (42 U.S.C. 1395ff(d)) is
amended--
(A) in the heading, by inserting ``; Notice'' after
``Secretary''; and
(B) by adding at the end the following new paragraph:
``(4) Notice.--Notice of the decision of an administrative
law judge shall be in writing in a manner to be understood by
the beneficiary and shall include--
``(A) the specific reasons for the determination; and
``(B) notification of the right to appeal the decision and
instructions on how to initiate such an appeal under this
section.''.
(4) Preparation of record for appeal.--Section
1869(c)(3)(J) (42 U.S.C. 1395ff(c)(3)(J)) is amended by
striking ``such information as is required for an appeal''
and inserting ``the record for the appeal''.
(e) Qualified Independent Contractors.--
(1) Eligibility requirements of qualified independent
contractors.--Section 1869(c) (42 U.S.C. 1395ff(c)) is
amended--
(A) in paragraph (2)--
(i) by inserting ``(except in the case of a utilization and
quality control peer review organization, as defined in
section 1152)'' after ``means an entity or organization
that''; and
(ii) by striking the period at the end and inserting the
following: ``and meets the following requirements:
``(A) General requirements.--
``(i) The entity or organization has (directly or through
contracts or other arrangements) sufficient medical, legal,
and other expertise (including knowledge of the program under
this title) and sufficient staffing to carry out duties of a
qualified independent contractor under this section on a
timely basis.
``(ii) The entity or organization has provided assurances
that it will conduct activities consistent with the
applicable requirements of this section, including that it
will not conduct any activities in a case unless the
independence requirements of subparagraph (B) are met with
respect to the case.
``(iii) The entity or organization meets such other
requirements as the Secretary provides by regulation.
``(B) Independence requirements.--
``(i) In general.--Subject to clause (ii), an entity or
organization meets the independence requirements of this
subparagraph with respect to any case if the entity--

``(I) is not a related party (as defined in subsection
(g)(5));
``(II) does not have a material familial, financial, or
professional relationship with such a party in relation to
such case; and
``(III) does not otherwise have a conflict of interest with
such a party (as determined under regulations).

``(ii) Exception for compensation.--Nothing in clause (i)
shall be construed to prohibit receipt by a qualified
independent contractor of compensation from the Secretary for
the conduct of activities under this section if the
compensation is provided consistent with clause (iii).
``(iii) Limitations on entity compensation.--Compensation
provided by the Secretary to a qualified independent
contractor in connection with reviews under this section
shall not be contingent on any decision rendered by the
contractor or by any reviewing professional.''; and
(B) in paragraph (3)(A), by striking ``, and shall have
sufficient training and expertise in medical science and
legal matters to make reconsiderations under this
subsection''.
(2) Eligibility requirements of reviewers.--Section 1869
(42 U.S.C. 1395ff) is amended--
(A) in subsection (c)(3)(B)(i), by striking ``a panel of
physicians or other appropriate health care professionals''
and inserting ``a physician or another appropriate health
care professional'';
(B) by striking subsection (c)(3)(D) and inserting the
following:
``(D) Qualifications for reviewers.--The requirements of
subsection (g) shall be met (relating to qualifications of
reviewing professionals).''; and
(C) by adding at the end the following new subsection:
``(g) Qualifications of Reviewers.--
``(1) In general.--In reviewing determinations under this
section, a qualified independent contractor shall ensure
that--
``(A) each individual conducting a review shall meet the
qualifications of paragraph (2);
``(B) compensation provided by the contractor to each such
reviewer is consistent with paragraph (3); and
``(C) in the case of a review described in subsection
(c)(3)(B) and conducted by a physician or another health care
professional (each in this subsection referred to as a
`reviewing professional'), that the reviewing professional
meets the qualifications described in paragraph (4).
``(2) Independence.--
``(A) In general.--Subject to subparagraph (B), each
individual conducting a review in a case shall--
``(i) not be a related party (as defined in paragraph (5));
``(ii) not have a material familial, financial, or
professional relationship with such a party in the case under
review; and
``(iii) not otherwise have a conflict of interest with such
a party (as determined under regulations).
``(B) Exception.--Nothing in subparagraph (A) shall be
construed to--
``(i) prohibit an individual, solely on the basis of
affiliation with a fiscal intermediary, carrier, or other
contractor, from serving as a reviewing professional if--

``(I) a nonaffiliated individual is not reasonably
available;
``(II) the affiliated individual is not involved in the
provision of items or services in the case under review;
``(III) the fact of such an affiliation is disclosed to the
Secretary and the beneficiary (or authorized representative)
and neither party objects; and
``(IV) the affiliated individual is not an employee of the
intermediary, carrier, or contractor and does not provide
services exclusively or primarily to or on behalf of such
intermediary, carrier, or contractor;

``(ii) prohibit an individual who has staff privileges at
the institution where the treatment involved takes place from
serving as a reviewer merely on the basis of such affiliation
if the affiliation is disclosed to the Secretary and the
beneficiary (or authorized representative), and neither party
objects; or
``(iii) prohibit receipt of compensation by a reviewing
professional from a contractor if the compensation is
provided consistent with paragraph (3).
``(3) Limitations on reviewer compensation.--Compensation
provided by a qualified independent contractor to a reviewer
in connection with a review under this section shall not be
contingent on the decision rendered by the reviewer.
``(4) Licensure and expertise.--Each reviewing professional
shall be a physician (allopathic or osteopathic) or health
care professional who--
``(A) is appropriately credentialed or licensed in 1 or
more States to deliver health care services; and
``(B) has medical expertise in the field of practice that
is appropriate for the items or services at issue.
``(5) Related party defined.--For purposes of this section,
the term `related party' means, with respect to a case under
this title involving an individual beneficiary, any of the
following:
``(A) The Secretary, the medicare administrative contractor
involved, or any fiduciary, officer, director, or employee of
the Department of Health and Human Services, or of such
contractor.
``(B) The individual (or authorized representative).
``(C) The health care professional that provides the items
or services involved in the case.
``(D) The institution at which the items or services (or
treatment) involved in the case are provided.
``(E) The manufacturer of any drug or other item that is
included in the items or services involved in the case.
``(F) Any other party determined under any regulations to
have a substantial interest in the case involved.''.
(3) Number of qualified independent contractors.--Section
1869(c)(4) (42 U.S.C. 1395ff(c)(4)) is amended by striking
``12'' and inserting ``4''.
(e) Implementation of Certain BIPA Reforms.--
(1) Delay in certain bipa reforms.--Section 521(d) of BIPA
(114 Stat. 2763A-543) is amended to read as follows:
``(d) Effective Date.--
``(1) In general.--Except as specified in paragraph (2),
the amendments made by this section shall apply with respect
to initial determinations made on or after January 1, 2005.
``(2) Expedited proceedings and reconsideration
requirements.--The amendments made by subsection (a) shall
apply with respect to initial determinations made on or after
October 1, 2003 under the following provisions:
``(A) Subsection (b)(1)(F)(i) of section 1869 of the Social
Security Act.
``(B) Subsection (c)(3)(C)(iii) of such section.
``(C) Subsection (c)(3)(C)(iv) of such section to the
extent that it applies to expedited reconsiderations under
subsection (c)(3)(C)(iii) of such section.
``(3) Transitional use of peer review organizations to
conduct expedited reconsiderations until qics are
operational.--Expedited reconsiderations of initial
determinations under section 1869(c)(3)(C)(iii) of the Social
Security Act shall be made by peer review organizations until
qualified independent contractors are available for such
expedited reconsiderations.''.
(2) Conforming amendment.--Section 521(c) of BIPA (114
Stat. 2763A-543) and section 1869(c)(3)(C)(iii)(III) of the
Social Security Act (42 U.S.C. 1395ff(c)(3)(C)(iii)(III)), as
added by section 521 of BIPA, are repealed.
(f) Effective Date.--The amendments made by this section
shall be effective as if included in the enactment of the
respective provisions of subtitle C of title V of BIPA, 114
Stat. 2763A-534.
(g) Transition.--In applying section 1869(g) of the Social
Security Act (as added by subsection (d)(2)), any reference
to a medicare administrative contractor shall be deemed to
include a reference to a fiscal intermediary under section
1816 of the Social Security Act (42 U.S.C. 1395h) and a
carrier under section 1842 of such Act (42 U.S.C. 1395u).

[[Page S8786]]

SEC. 516. HEARING RIGHTS RELATED TO DECISIONS BY THE
SECRETARY TO DENY OR NOT RENEW A MEDICARE
ENROLLMENT AGREEMENT; CONSULTATION BEFORE
CHANGING PROVIDER ENROLLMENT FORMS.

(a) Hearing Rights.--
(1) In general.--Section 1866 (42 U.S.C. 1395cc) is amended
by adding at the end the following new subsection:
``(j) Hearing Rights in Cases of Denial or Nonrenewal.--The
Secretary shall establish by regulation procedures under
which--
``(1) there are deadlines for actions on applications for
enrollment (and, if applicable, renewal of enrollment); and
``(2) a provider of services or supplier whose application
to enroll (or, if applicable, to renew enrollment) under this
title is denied may have a hearing and judicial review of
such denial under the procedures that apply under subsection
(h)(1)(A) to a provider of services that is dissatisfied with
a determination by the Secretary.''.
(2) Effective date.--The Secretary shall provide for the
establishment of the procedures under the amendment made by
paragraph (1) within 18 months after the date of the
enactment of this Act.
(b) Consultation Before Changing Provider Enrollment
Forms.--Section 1871 (42 U.S.C. 1395hh), as amended by
sections 501, 502, and 503, is amended by adding at the end
the following new subsection:
``(g) The Secretary shall consult with providers of
services, physicians, practitioners, and suppliers before
making changes in the provider enrollment forms required of
such providers, physicians, practitioners, and suppliers to
be eligible to submit claims for which payment may be made
under this title.''.

SEC. 517. APPEALS BY PROVIDERS WHEN THERE IS NO OTHER PARTY
AVAILABLE.

(a) In General.--Section 1870 (42 U.S.C. 1395gg) is amended
by adding at the end the following new subsection:
``(h) Notwithstanding subsection (f) or any other provision
of law, the Secretary shall permit a provider of services,
physician, practitioner, or other supplier to appeal any
determination of the Secretary under this title relating to
services rendered under this title to an individual who
subsequently dies if there is no other party available to
appeal such determination and the provider of services,
physician, practitioner, or other supplier would be
prejudiced by the determination.''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect on the date of the enactment of this Act
and shall apply to items and services furnished on or after
such date.

SEC. 518. PROVIDER ACCESS TO REVIEW OF LOCAL COVERAGE
DETERMINATIONS.

(a) Provider Access To Review of Local Coverage
Determinations.--Section 1869(f)(5) (42 U.S.C. 1395ff(f)(5))
is amended to read as follows:
``(5) Aggrieved party defined.--In this section, with
respect to a national or local coverage determination, the
term `aggrieved party' means--
``(A) an individual entitled to benefits under part A, or
enrolled under part B, or both, who is in need of the items
or services that are the subject of the coverage
determination; or
``(B) a provider of services, physician, practitioner, or
supplier that is adversely affected by such a
determination.''.
(b) Clarification of Local Coverage Determination
Definition.--Section 1869(f)(2)(B) (42 U.S.C.
1395ff(f)(2)(B)) is amended by inserting ``, including, where
appropriate, a clear explanation of the reasons for the
denial'' before the period at the end.
(c) Request for Local Coverage Determinations by
Providers.--Section 1869 (42 U.S.C. 1395ff), as amended by
section 515(d)(2)(B), is amended by adding at the end the
following new subsection:
``(h) Request for Local Coverage Determinations by
Providers.--
``(1) Establishment of process.--The Secretary shall
establish a process under which a provider of services,
physician, practitioner, or supplier who certifies that they
meet the requirements established in paragraph (3) may
request a local coverage determination in accordance with the
succeeding provisions of this subsection.
``(2) Provider local coverage determination request
defined.--In this subsection, the term `provider local
coverage determination request' means a request, filed with
the Secretary, at such time and in such form and manner as
the Secretary may specify, that the Secretary, pursuant to
paragraph (4)(A), require a fiscal intermediary, carrier, or
program safeguard contractor to make or revise a local
coverage determination under this section with respect to an
item or service.
``(3) Request requirements.--Under the process established
under paragraph (1), by not later than 30 days after the date
on which a provider local coverage determination request is
filed under paragraph (1), the Secretary shall determine
whether such request establishes that--
``(A) there have been at least 5 reversals of
redeterminations made by a fiscal intermediary or carrier
after a hearing before an administrative law judge on claims
submitted by the provider in at least 2 different cases
before an administrative law judge;
``(B) each reversal described in subparagraph (A) involves
substantially similar material facts;
``(C) each reversal described in subparagraph (A) involves
the same medical necessity issue; and
``(D) at least 50 percent of the total number of claims
submitted by such provider within the past year involving the
substantially similar material facts described in
subparagraph (B) and the same medical necessity issue
described in subparagraph (C) have been denied and have been
reversed by an administrative law judge.
``(4) Approval or rejection of request.--
``(A) Approval of request.--If the Secretary determines
that subparagraphs (A) through (D) of paragraph (3) have been
satisfied, the Secretary shall require the fiscal
intermediary, carrier, or program safeguard contractor
identified in the provider local coverage determination
request, to make or revise a local coverage determination
with respect to the item or service that is the subject of
the request not later than the date that is 210 days after
the date on which the Secretary makes the determination. Such
fiscal intermediary, carrier, or program safeguard contractor
shall retain the discretion to determine whether or not, and/
or the circumstances under which, to cover the item or
service for which a local coverage determination is
requested. Nothing in this subsection shall be construed to
require a fiscal intermediary, carrier or program safeguard
contractor to develop a local coverage determination that is
inconsistent with any national coverage determination, or any
coverage provision in this title or in regulation, manual, or
interpretive guidance of the Secretary.
``(B) Rejection of request.--If the Secretary determines
that subparagraphs (A) through (D) of paragraph (3) have not
been satisfied, the Secretary shall reject the provider local
coverage determination request and shall notify the provider
of services, physician, practitioner, or supplier that filed
the request of the reason for such rejection and no further
proceedings in relation to such request shall be
conducted.''.
(d) Study and Report on the Use of Contractors To Monitor
Medicare Appeals.--
(1) Study.--The Secretary of Health and Human Services (in
this section referred to as the ``Secretary'') shall conduct
a study on the feasibility and advisability of requiring
fiscal intermediaries and carriers to monitor and track--
(A) the subject matter and status of claims denied by the
fiscal intermediary or carrier (as applicable) that are
appealed under section 1869 of the Social Security Act (42
U.S.C. 1395ff), as added by section 522 of BIPA (114 Stat.
2763A-543) and amended by this Act; and
(B) any final determination made with respect to such
claims.
(2) Report.--Not later than the date that is 1 year after
the date of the enactment of this Act, the Secretary shall
submit to Congress a report on the study conducted under
paragraph (1) together with such recommendations for
legislation and administrative action as the Commission
determines appropriate.
(e) Authorization of Appropriations.--There are authorized
to be appropriated such sums as are necessary to carry out
the amendments made by subsections (a), (b), and (c).
(f) Effective Dates.--
(1) Provider access to review of local coverage
determinations.--The amendments made by subsections (a) and
(b) shall apply to--
(A) any review of any local coverage determination filed on
or after January 1, 2004;
(B) any request to make such a determination made on or
after such date; or
(C) any local coverage determination made on or after such
date.
(2) Provider local coverage determination requests.--The
amendment made by subsection (c) shall apply with respect to
provider local coverage determination requests (as defined in
section 1869(h)(2) of the Social Security Act, as added by
subsection (c)) filed on or after the date of the enactment
of this Act.

Subtitle C--Contracting Reform

SEC. 521. INCREASED FLEXIBILITY IN MEDICARE ADMINISTRATION.

(a) Consolidation and Flexibility in Medicare
Administration.--
(1) In general.--Title XVIII is amended by inserting after
section 1874 the following new section:

``contracts with medicare administrative contractors

``Sec. 1874A. (a) Authority.--
``(1) Authority to enter into contracts.--The Secretary may
enter into contracts with any eligible entity to serve as a
medicare administrative contractor with respect to the
performance of any or all of the functions described in
paragraph (4) or parts of those functions (or, to the extent
provided in a contract, to secure performance thereof by
other entities).
``(2) Eligibility of entities.--An entity is eligible to
enter into a contract with respect to the performance of a
particular function described in paragraph (4) only if--
``(A) the entity has demonstrated capability to carry out
such function;
``(B) the entity complies with such conflict of interest
standards as are generally applicable to Federal acquisition
and procurement;
``(C) the entity has sufficient assets to financially
support the performance of such function; and
``(D) the entity meets such other requirements as the
Secretary may impose.

[[Page S8787]]

``(3) Medicare administrative contractor defined.--For
purposes of this title and title XI--
``(A) In general.--The term `medicare administrative
contractor' means an agency, organization, or other person
with a contract under this section.
``(B) Appropriate medicare administrative contractor.--With
respect to the performance of a particular function in
relation to an individual entitled to benefits under part A
or enrolled under part B, or both, a specific provider of
services, physician, practitioner, facility, or supplier (or
class of such providers of services, physicians,
practitioners, facilities, or suppliers), the `appropriate'
medicare administrative contractor is the medicare
administrative contractor that has a contract under this
section with respect to the performance of that function in
relation to that individual, provider of services, physician,
practitioner, facility, or supplier or class of provider of
services, physician, practitioner, facility, or supplier.
``(4) Functions described.--The functions referred to in
paragraphs (1) and (2) are payment functions, provider
services functions, and beneficiary services functions as
follows:
``(A) Determination of payment amounts.--Determining
(subject to the provisions of section 1878 and to such review
by the Secretary as may be provided for by the contracts) the
amount of the payments required pursuant to this title to be
made to providers of services, physicians, practitioners,
facilities, suppliers, and individuals.
``(B) Making payments.--Making payments described in
subparagraph (A) (including receipt, disbursement, and
accounting for funds in making such payments).
``(C) Beneficiary education and assistance.--Serving as a
center for, and communicating to individuals entitled to
benefits under part A or enrolled under part B, or both, with
respect to education and outreach for those individuals, and
assistance with specific issues, concerns, or problems of
those individuals.
``(D) Provider consultative services.--Providing
consultative services to institutions, agencies, and other
persons to enable them to establish and maintain fiscal
records necessary for purposes of this title and otherwise to
qualify as providers of services, physicians, practitioners,
facilities, or suppliers.
``(E) Communication with providers.--Serving as a center
for, and communicating to providers of services, physicians,
practitioners, facilities, and suppliers, any information or
instructions furnished to the medicare administrative
contractor by the Secretary, and serving as a channel of
communication from such providers, physicians, practitioners,
facilities, and suppliers to the Secretary.
``(F) Provider education and technical assistance.--
Performing the functions described in subsections (e) and
(f), relating to education, training, and technical
assistance to providers of services, physicians,
practitioners, facilities, and suppliers.
``(G) Additional functions.--Performing such other
functions, including (subject to paragraph (5)) functions
under the Medicare Integrity Program under section 1893, as
are necessary to carry out the purposes of this title.
``(5) Relationship to mip contracts.--
``(A) Nonduplication of activities.--In entering into
contracts under this section, the Secretary shall assure that
activities of medicare administrative contractors do not
duplicate activities carried out under contracts entered into
under the Medicare Integrity Program under section 1893. The
previous sentence shall not apply with respect to the
activity described in section 1893(b)(5) (relating to prior
authorization of certain items of durable medical equipment
under section 1834(a)(15)).
``(B) Construction.--An entity shall not be treated as a
medicare administrative contractor merely by reason of having
entered into a contract with the Secretary under section
1893.
``(6) Application of federal acquisition regulation.--
Except to the extent inconsistent with a specific requirement
of this title, the Federal Acquisition Regulation applies to
contracts under this title.
``(b) Contracting Requirements.--
``(1) Use of competitive procedures.--
``(A) In general.--Except as provided in laws with general
applicability to Federal acquisition and procurement, the
Federal Acquisition Regulation, or in subparagraph (B), the
Secretary shall use competitive procedures when entering into
contracts with medicare administrative contractors under this
section.
``(B) Renewal of contracts.--The Secretary may renew a
contract with a medicare administrative contractor under this
section from term to term without regard to section 5 of
title 41, United States Code, or any other provision of law
requiring competition, if the medicare administrative
contractor has met or exceeded the performance requirements
applicable with respect to the contract and contractor,
except that the Secretary shall provide for the application
of competitive procedures, unless laws with general
applicability to Federal acquisition and procurement or the
Federal Acquisition Regulation authorize the use of other
procedures, under such a contract not less frequently than
once every 8 years.
``(C) Transfer of functions.--The Secretary may transfer
functions among medicare administrative contractors without
regard to any provision of law requiring competition. The
Secretary shall ensure that performance quality is considered
in such transfers. The Secretary shall provide notice
(whether in the Federal Register or otherwise) of any such
transfer (including a description of the functions so
transferred and contact information for the contractors
involved) to providers of services, physicians,
practitioners, facilities, and suppliers affected by the
transfer.
``(D) Incentives for quality.--The Secretary may provide
incentives for medicare administrative contractors to provide
quality service and to promote efficiency.
``(2) Compliance with requirements.--No contract under this
section shall be entered into with any medicare
administrative contractor unless the Secretary finds that
such medicare administrative contractor will perform its
obligations under the contract efficiently and effectively
and will meet such requirements as to financial
responsibility, legal authority, and other matters as the
Secretary finds pertinent.
``(3) Performance requirements.--
``(A) Development of specific performance requirements.--
The Secretary shall develop contract performance requirements
to carry out the specific requirements applicable under this
title to a function described in subsection (a)(4) and shall
develop standards for measuring the extent to which a
contractor has met such requirements. In developing such
performance requirements and standards for measurement, the
Secretary shall consult with providers of services,
organizations representative of beneficiaries under this
title, and organizations and agencies performing functions
necessary to carry out the purposes of this section with
respect to such performance requirements. The Secretary shall
make such performance requirements and measurement standards
available to the public.
``(B) Considerations.--The Secretary shall include, as one
of the standards, provider and beneficiary satisfaction
levels.
``(C) Inclusion in contracts.--All contractor performance
requirements shall be set forth in the contract between the
Secretary and the appropriate medicare administrative
contractor. Such performance requirements--
``(i) shall reflect the performance requirements published
under subparagraph (A), but may include additional
performance requirements;
``(ii) shall be used for evaluating contractor performance
under the contract; and
``(iii) shall be consistent with the written statement of
work provided under the contract.
``(4) Information requirements.--The Secretary shall not
enter into a contract with a medicare administrative
contractor under this section unless the contractor agrees--
``(A) to furnish to the Secretary such timely information
and reports as the Secretary may find necessary in performing
his functions under this title; and
``(B) to maintain such records and afford such access
thereto as the Secretary finds necessary to assure the
correctness and verification of the information and reports
under subparagraph (A) and otherwise to carry out the
purposes of this title.
``(5) Surety bond.--A contract with a medicare
administrative contractor under this section may require the
medicare administrative contractor, and any of its officers
or employees certifying payments or disbursing funds pursuant
to the contract, or otherwise participating in carrying out
the contract, to give surety bond to the United States in
such amount as the Secretary may deem appropriate.
``(c) Terms and Conditions.--
``(1) In general.--Subject to subsection (a)(6), a contract
with any medicare administrative contractor under this
section may contain such terms and conditions as the
Secretary finds necessary or appropriate and may provide for
advances of funds to the medicare administrative contractor
for the making of payments by it under subsection (a)(4)(B).
``(2) Prohibition on mandates for certain data
collection.--The Secretary may not require, as a condition of
entering into, or renewing, a contract under this section,
that the medicare administrative contractor match data
obtained other than in its activities under this title with
data used in the administration of this title for purposes of
identifying situations in which the provisions of section
1862(b) may apply.
``(d) Limitation on Liability of Medicare Administrative
Contractors and Certain Officers.--
``(1) Certifying officer.--No individual designated
pursuant to a contract under this section as a certifying
officer shall, in the absence of the reckless disregard of
the individual's obligations or the intent by that individual
to defraud the United States, be liable with respect to any
payments certified by the individual under this section.
``(2) Disbursing officer.--No disbursing officer shall, in
the absence of the reckless disregard of the officer's
obligations or the intent by that officer to defraud the
United States, be liable with respect to any payment by such
officer under this section if it was based upon an
authorization (which meets the applicable requirements for
such internal controls established by the Comptroller
General) of a certifying officer designated as provided in
paragraph (1) of this subsection.
``(3) Liability of medicare administrative contractor.--No
medicare administrative contractor shall be liable to the
United

[[Page S8788]]

States for a payment by a certifying or disbursing officer
unless, in connection with such a payment, the medicare
administrative contractor acted with reckless disregard of
its obligations under its medicare administrative contract or
with intent to defraud the United States.
``(4) Relationship to false claims act.--Nothing in this
subsection shall be construed to limit liability for conduct
that would constitute a violation of sections 3729 through
3731 of title 31, United States Code (commonly known as the
``False Claims Act'').
``(5) Indemnification by secretary.--
``(A) In general.--Notwithstanding any other provision of
law and subject to the succeeding provisions of this
paragraph, in the case of a medicare administrative
contractor (or a person who is a director, officer, or
employee of such a contractor or who is engaged by the
contractor to participate directly in the claims
administration process) who is made a party to any judicial
or administrative proceeding arising from, or relating
directly to, the claims administration process under this
title, the Secretary may, to the extent specified in the
contract with the contractor, indemnify the contractor (and
such persons).
``(B) Conditions.--The Secretary may not provide
indemnification under subparagraph (A) insofar as the
liability for such costs arises directly from conduct that is
determined by the Secretary to be criminal in nature,
fraudulent, or grossly negligent.
``(C) Scope of indemnification.--Indemnification by the
Secretary under subparagraph (A) may include payment of
judgments, settlements (subject to subparagraph (D)), awards,
and costs (including reasonable legal expenses).
``(D) Written approval for settlements.--A contractor or
other person described in subparagraph (A) may not propose to
negotiate a settlement or compromise of a proceeding
described in such subparagraph without the prior written
approval of the Secretary to negotiate a settlement. Any
indemnification under subparagraph (A) with respect to
amounts paid under a settlement are conditioned upon the
Secretary's prior written approval of the final settlement.
``(E) Construction.--Nothing in this paragraph shall be
construed--
``(i) to change any common law immunity that may be
available to a medicare administrative contractor or person
described in subparagraph (A); or
``(ii) to permit the payment of costs not otherwise
allowable, reasonable, or allocable under the Federal
Acquisition Regulations.''.
(2) Consideration of incorporation of current law
standards.--In developing contract performance requirements
under section 1874A(b) of the Social Security Act (as added
by paragraph (1)) the Secretary shall consider inclusion of
the performance standards described in sections 1816(f)(2) of
such Act (relating to timely processing of reconsiderations
and applications for exemptions) and section 1842(b)(2)(B) of
such Act (relating to timely review of determinations and
fair hearing requests), as such sections were in effect
before the date of the enactment of this Act.
(b) Conforming Amendments to Section 1816 (Relating to
Fiscal Intermediaries).--Section 1816 (42 U.S.C. 1395h) is
amended as follows:
(1) The heading is amended to read as follows:

``provisions relating to the administration of part a''.

(2) Subsection (a) is amended to read as follows:
``(a) The administration of this part shall be conducted
through contracts with medicare administrative contractors
under section 1874A.''.
(3) Subsection (b) is repealed.
(4) Subsection (c) is amended--
(A) by striking paragraph (1); and
(B) in each of paragraphs (2)(A) and (3)(A), by striking
``agreement under this section'' and inserting ``contract
under section 1874A that provides for making payments under
this part''.
(5) Subsections (d) through (i) are repealed.
(6) Subsections (j) and (k) are each amended--
(A) by striking ``An agreement with an agency or
organization under this section'' and inserting ``A contract
with a medicare administrative contractor under section 1874A
with respect to the administration of this part''; and
(B) by striking ``such agency or organization'' and
inserting ``such medicare administrative contractor'' each
place it appears.
(7) Subsection (l) is repealed.
(c) Conforming Amendments to Section 1842 (Relating to
Carriers).--Section 1842 (42 U.S.C. 1395u) is amended as
follows:
(1) The heading is amended to read as follows:

``provisions relating to the administration of part b''.

(2) Subsection (a) is amended to read as follows:
``(a) The administration of this part shall be conducted
through contracts with medicare administrative contractors
under section 1874A.''.
(3) Subsection (b) is amended--
(A) by striking paragraph (1);
(B) in paragraph (2)--
(i) by striking subparagraphs (A) and (B);
(ii) in subparagraph (C), by striking ``carriers'' and
inserting ``medicare administrative contractors''; and
(iii) by striking subparagraphs (D) and (E);
(C) in paragraph (3)--
(i) in the matter before subparagraph (A), by striking
``Each such contract shall provide that the carrier'' and
inserting ``The Secretary'';
(ii) by striking ``will'' the first place it appears in
each of subparagraphs (A), (B), (F), (G), (H), and (L) and
inserting ``shall'';
(iii) in subparagraph (B), in the matter before clause (i),
by striking ``to the policyholders and subscribers of the
carrier'' and inserting ``to the policyholders and
subscribers of the medicare administrative contractor'';
(iv) by striking subparagraphs (C), (D), and (E);
(v) in subparagraph (H)--

(I) by striking ``if it makes determinations or payments
with respect to physicians' services,''; and
(II) by striking ``carrier'' and inserting ``medicare
administrative contractor'';

(vi) by striking subparagraph (I);
(vii) in subparagraph (L), by striking the semicolon and
inserting a period;
(viii) in the first sentence, after subparagraph (L), by
striking ``and shall contain'' and all that follows through
the period; and
(ix) in the seventh sentence, by inserting ``medicare
administrative contractor,'' after ``carrier,'';
(D) by striking paragraph (5);
(E) in paragraph (6)(D)(iv), by striking ``carrier'' and
inserting ``medicare administrative contractor''; and
(F) in paragraph (7), by striking ``the carrier'' and
inserting ``the Secretary'' each place it appears.
(4) Subsection (c) is amended--
(A) by striking paragraph (1);
(B) in paragraph (2), by striking ``contract under this
section which provides for the disbursement of funds, as
described in subsection (a)(1)(B),'' and inserting ``contract
under section 1874A that provides for making payments under
this part'';
(C) in paragraph (3)(A), by striking ``subsection
(a)(1)(B)'' and inserting ``section 1874A(a)(3)(B)'';
(D) in paragraph (4), by striking ``carrier'' and inserting
``medicare administrative contractor'';
(E) in paragraph (5), by striking ``contract under this
section which provides for the disbursement of funds, as
described in subsection (a)(1)(B), shall require the
carrier'' and ``carrier responses'' and inserting ``contract
under section 1874A that provides for making payments under
this part shall require the medicare administrative
contractor'' and ``contractor responses'', respectively; and
(F) by striking paragraph (6).
(5) Subsections (d), (e), and (f) are repealed.
(6) Subsection (g) is amended by striking ``carrier or
carriers'' and inserting ``medicare administrative contractor
or contractors''.
(7) Subsection (h) is amended--
(A) in paragraph (2)--
(i) by striking ``Each carrier having an agreement with the
Secretary under subsection (a)'' and inserting ``The
Secretary''; and
(ii) by striking ``Each such carrier'' and inserting ``The
Secretary'';
(B) in paragraph (3)(A)--
(i) by striking ``a carrier having an agreement with the
Secretary under subsection (a)'' and inserting ``medicare
administrative contractor having a contract under section
1874A that provides for making payments under this part'';
and
(ii) by striking ``such carrier'' and inserting ``such
contractor'';
(C) in paragraph (3)(B)--
(i) by striking ``a carrier'' and inserting ``a medicare
administrative contractor'' each place it appears; and
(ii) by striking ``the carrier'' and inserting ``the
contractor'' each place it appears; and
(D) in paragraphs (5)(A) and (5)(B)(iii), by striking
``carriers'' and inserting ``medicare administrative
contractors'' each place it appears.
(8) Subsection (l) is amended--
(A) in paragraph (1)(A)(iii), by striking ``carrier'' and
inserting ``medicare administrative contractor''; and
(B) in paragraph (2), by striking ``carrier'' and inserting
``medicare administrative contractor''.
(9) Subsection (p)(3)(A) is amended by striking ``carrier''
and inserting ``medicare administrative contractor''.
(10) Subsection (q)(1)(A) is amended by striking
``carrier''.
(d) Effective Date; Transition Rule.--
(1) Effective date.--
(A) In general.--Except as otherwise provided in this
subsection, the amendments made by this section shall take
effect on October 1, 2005, and the Secretary is authorized to
take such steps before such date as may be necessary to
implement such amendments on a timely basis.
(B) Construction for current contracts.--Such amendments
shall not apply to contracts in effect before the date
specified under subparagraph (A) that continue to retain the
terms and conditions in effect on such date (except as
otherwise provided under this title, other than under this
section) until such date as the contract is let out for
competitive bidding under such amendments.
(C) Deadline for competitive bidding.--The Secretary shall
provide for the letting by competitive bidding of all
contracts for

[[Page S8789]]

functions of medicare administrative contractors for annual
contract periods that begin on or after October 1, 2011.
(2) General transition rules.--
(A) Authority to continue to enter into new agreements and
contracts and waiver of provider nomination provisions during
transition.--Prior to the date specified in paragraph (1)(A),
the Secretary may, consistent with subparagraph (B), continue
to enter into agreements under section 1816 and contracts
under section 1842 of the Social Security Act (42 U.S.C.
1395h, 1395u). The Secretary may enter into new agreements
under section 1816 during the time period without regard to
any of the provider nomination provisions of such section.
(B) Appropriate transition.--The Secretary shall take such
steps as are necessary to provide for an appropriate
transition from agreements under section 1816 and contracts
under section 1842 of the Social Security Act (42 U.S.C.
1395h, 1395u) to contracts under section 1874A, as added by
subsection (a)(1).
(3) Authorizing continuation of mip activities under
current contracts and agreements and under transition
contracts.--The provisions contained in the exception in
section 1893(d)(2) of the Social Security Act (42 U.S.C.
1395ddd(d)(2)) shall continue to apply notwithstanding the
amendments made by this section, and any reference in such
provisions to an agreement or contract shall be deemed to
include agreements and contracts entered into pursuant to
paragraph (2)(A).
(e) References.--On and after the effective date provided
under subsection (d)(1), any reference to a fiscal
intermediary or carrier under title XI or XVIII of the Social
Security Act (or any regulation, manual instruction,
interpretative rule, statement of policy, or guideline issued
to carry out such titles) shall be deemed a reference to an
appropriate medicare administrative contractor (as provided
under section 1874A of the Social Security Act).
(f) Secretarial Submission of Legislative Proposal.--Not
later than 6 months after the date of the enactment of this
Act, the Secretary 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.
(g) Reports on Implementation.--
(1) Proposal for implementation.--At least 1 year before
the date specified in subsection (d)(1)(A), the Secretary
shall submit a report to Congress and the Comptroller General
of the United States that describes a plan for an appropriate
transition. The Comptroller General shall conduct an
evaluation of such plan and shall submit to Congress, not
later than 6 months after the date the report is received, a
report on such evaluation and shall include in such report
such recommendations as the Comptroller General deems
appropriate.
(2) Status of implementation.--The Secretary shall submit a
report to Congress not later than October 1, 2008, that
describes the status of implementation of such amendments and
that includes a description of the following:
(A) The number of contracts that have been competitively
bid as of such date.
(B) The distribution of functions among contracts and
contractors.
(C) A timeline for complete transition to full competition.
(D) A detailed description of how the Secretary has
modified oversight and management of medicare contractors to
adapt to full competition.

Subtitle D--Education and Outreach Improvements

SEC. 531. PROVIDER EDUCATION AND TECHNICAL ASSISTANCE.

(a) Coordination of Education Funding.--
(1) In general.--Title XVIII is amended by inserting after
section 1888 the following new section:

``provider education and technical assistance

``Sec. 1889. (a) Coordination of Education Funding.--The
Secretary shall coordinate the educational activities
provided through medicare contractors (as defined in
subsection (e), including under section 1893) in order to
maximize the effectiveness of Federal education efforts for
providers of services, physicians, practitioners, and
suppliers.''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect on the date of the enactment of this Act.
(b) Incentives To Improve Contractor Performance.--Section
1874A, as added by section 521(a)(1), is amended by adding at
the end the following new subsection:
``(e) Incentives To Improve Contractor Performance in
Provider Education and Outreach.--
``(1) Methodology to measure contractor error rates.--In
order to give medicare contractors (as defined in paragraph
(3)) an incentive to implement effective education and
outreach programs for providers of services, physicians,
practitioners, and suppliers, the Secretary shall develop and
implement by October 1, 2004, a methodology to measure the
specific claims payment error rates of such contractors in
the processing or reviewing of medicare claims.
``(2) IG review of methodology.--The Inspector General of
the Department of Health and Human Services shall review, and
make recommendations to the Secretary, regarding the adequacy
of such methodology.
``(3) Medicare contractor defined.--For purposes of this
subsection, the term `medicare contractor' includes a
medicare administrative contractor, a fiscal intermediary
with a contract under section 1816, and a carrier with a
contract under section 1842.''.
(c) Improved Provider Education and Training.--
(1) Increased funding for enhanced education and training
through medicare integrity program.--Section 1817(k)(4) (42
U.S.C. 1395i(k)(4)) is amended--
(A) in subparagraph (A), by striking ``subparagraph (B)''
and inserting ``subparagraphs (B) and (C)'';
(B) in subparagraph (B), by striking ``The amount
appropriated'' and inserting ``Subject to subparagraph (C),
the amount appropriated''; and
(C) by adding at the end the following new subparagraph:
``(C) Enhanced provider education and training.--
``(i) In general.--In addition to the amount appropriated
under subparagraph (B), the amount appropriated under
subparagraph (A) for a fiscal year (beginning with fiscal
year 2004) is increased by $35,000,000.
``(ii) Use.--The funds made available under this
subparagraph shall be used only to increase the conduct by
medicare contractors of education and training of providers
of services, physicians, practitioners, and suppliers
regarding billing, coding, and other appropriate items and
may also be used to improve the accuracy, consistency, and
timeliness of contractor responses to written and phone
inquiries from providers of services, physicians,
practitioners, and suppliers.''.
(2) Tailoring education and training for small providers or
suppliers.--
(A) In general.--Section 1889, as added by subsection (a),
is amended by adding at the end the following new subsection:
``(b) Tailoring Education and Training Activities for Small
Providers or Suppliers.--
``(1) In general.--Insofar as a medicare contractor
conducts education and training activities, it shall take
into consideration the special needs of small providers of
services or suppliers (as defined in paragraph (2)). Such
education and training activities for small providers of
services and suppliers may include the provision of technical
assistance (such as review of billing systems and internal
controls to determine program compliance and to suggest more
efficient and effective means of achieving such compliance).
``(2) Small provider of services or supplier.--In this
subsection, the term `small provider of services or supplier'
means--
``(A) an institutional provider of services with fewer than
25 full-time-equivalent employees; or
``(B) a physician, practitioner, or supplier with fewer
than 10 full-time-equivalent employees.''.
(B) Effective date.--The amendment made by subparagraph (A)
shall take effect on January 1, 2004.
(d) Additional Provider Education Provisions.--
(1) In general.--Section 1889, as added by subsection (a)
and as amended by subsection (c)(2), is amended by adding at
the end the following new subsections:
``(c) Encouragement of Participation in Education Program
Activities.--A medicare contractor may not use a record of
attendance at (or failure to attend) educational activities
or other information gathered during an educational program
conducted under this section or otherwise by the Secretary to
select or track providers of services, physicians,
practitioners, or suppliers for the purpose of conducting any
type of audit or prepayment review.
``(d) Construction.--Nothing in this section or section
1893(g) shall be construed as providing for disclosure by a
medicare contractor--
``(1) of the screens used for identifying claims that will
be subject to medical review; or
``(2) of information that would compromise pending law
enforcement activities or reveal findings of law enforcement-
related audits.
``(e) Definitions.--For purposes of this section and
section 1817(k)(4)(C), the term `medicare contractor'
includes the following:
``(1) A medicare administrative contractor with a contract
under section 1874A, a fiscal intermediary with a contract
under section 1816, and a carrier with a contract under
section 1842.
``(2) An eligible entity with a contract under section
1893.

Such term does not include, with respect to activities of a
specific provider of services, physician, practitioner, or
supplier an entity that has no authority under this title or
title XI with respect to such activities and such provider of
services, physician, practitioner, or supplier.''.
(2) Effective date.--The amendment made by paragraph (1)
shall take effect on the date of the enactment of this Act.

SEC. 532. ACCESS TO AND PROMPT RESPONSES FROM MEDICARE
CONTRACTORS.

(a) In General.--Section 1874A, as added by section
521(a)(1) and as amended by section 531(b)(1), is amended by
adding at the end the following new subsection:
``(f) Communicating With Beneficiaries and Providers.--
``(1) Communication process.--The Secretary shall develop a
process for medicare

[[Page S8790]]

contractors to communicate with beneficiaries and with
providers of services, physicians, practitioners, and
suppliers under this title.
``(2) Response to written inquiries.--Each medicare
contractor (as defined in paragraph (5)) shall provide
general written responses (which may be through electronic
transmission) in a clear, concise, and accurate manner to
inquiries by beneficiaries, providers of services,
physicians, practitioners, and suppliers concerning the
programs under this title within a contractual timeframe
established by the Secretary.
``(3) Response to toll-free lines.--The Secretary shall
ensure that medicare contractors provide a toll-free
telephone number at which beneficiaries, providers,
physicians, practitioners, and suppliers may obtain
information regarding billing, coding, claims, coverage, and
other appropriate information under this title.
``(4) Monitoring of contractor responses.--
``(A) In general.--Each medicare contractor shall,
consistent with standards developed by the Secretary under
subparagraph (B)--
``(i) maintain a system for identifying who provides the
information referred to in paragraphs (2) and (3); and
``(ii) monitor the accuracy, consistency, and timeliness of
the information so provided.
``(B) Development of standards.--
``(i) In general.--The Secretary shall establish (and
publish in the Federal Register) standards regarding the
accuracy, consistency, and timeliness of the information
provided in response to inquiries under this subsection. Such
standards shall be consistent with the performance
requirements established under subsection (b)(3).
``(ii) Evaluation.--In conducting evaluations of individual
medicare contractors, the Secretary shall take into account
the results of the monitoring conducted under subparagraph
(A) taking into account as performance requirements the
standards established under clause (i). The Secretary shall,
in consultation with organizations representing providers of
services, suppliers, and individuals entitled to benefits
under part A or enrolled under part B, or both, establish
standards relating to the accuracy, consistency, and
timeliness of the information so provided.
``(C) Direct monitoring.--Nothing in this paragraph shall
be construed as preventing the Secretary from directly
monitoring the accuracy, consistency, and timeliness of the
information so provided.
``(5) Medicare contractor defined.--For purposes of this
subsection, the term `medicare contractor' has the meaning
given such term in subsection (e)(3).''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect October 1, 2004.
(c) Authorization of Appropriations.--There are authorized
to be appropriated such sums as may be necessary to carry out
section 1874A(f) of the Social Security Act, as added by
subsection (a).

SEC. 533. RELIANCE ON GUIDANCE.

(a) In General.--Section 1871(d), as added by section 501,
is amended by adding at the end the following new paragraph:
``(2) If--
``(A) a provider of services, physician, practitioner, or
other supplier follows written guidance provided--
``(i) by the Secretary; or
``(ii) by a medicare contractor (as defined in section
1889(e) and whether in the form of a written response to a
written inquiry under section 1874A(f)(1) or otherwise)
acting within the scope of the contractor's contract
authority,
in response to a written inquiry with respect to the
furnishing of items or services or the submission of a claim
for benefits for such items or services;
``(B) the Secretary determines that--
``(i) the provider of services, physician, practitioner, or
supplier has accurately presented the circumstances relating
to such items, services, and claim to the Secretary or the
contractor in the written guidance; and
``(ii) there is no indication of fraud or abuse committed
by the provider of services, physician, practitioner, or
supplier against the program under this title; and
``(C) the guidance was in error;
the provider of services, physician, practitioner, or
supplier shall not be subject to any penalty or interest
under this title (or the provisions of title XI insofar as
they relate to this title) relating to the provision of such
items or service or such claim if the provider of services,
physician, practitioner, or supplier reasonably relied on
such guidance. In applying this paragraph with respect to
guidance in the form of general responses to frequently asked
questions, the Secretary retains authority to determine the
extent to which such general responses apply to the
particular circumstances of individual claims.''.
(b) Effective Date.--The amendment made by subsection (a)
shall apply to penalties imposed on or after the date of the
enactment of this Act.

SEC. 534. MEDICARE PROVIDER OMBUDSMAN; MEDICARE BENEFICIARY
OMBUDSMAN.

(a) Medicare Provider Ombudsman.--Section 1868 (42 U.S.C.
1395ee) is amended--
(1) by adding at the end of the heading the following: ``;
medicare provider ombudsman'';
(2) by inserting ``Practicing Physicians Advisory
Council.--(1)'' after ``(a)'';
(3) in paragraph (1), as so redesignated under paragraph
(2), by striking ``in this section'' and inserting ``in this
subsection'';
(4) by redesignating subsections (b) and (c) as paragraphs
(2) and (3), respectively; and
(5) by adding at the end the following new subsection:
``(b) Medicare Provider Ombudsman.--By not later than 1
year after the date of the enactment of the Medicare
Education, Regulatory Reform, and Contracting Improvement Act
of 2003, the Secretary shall appoint a Medicare Provider
Ombudsman who shall have experience in health care. The
Ombudsman shall--
``(1) provide assistance, on a confidential basis, to
providers of services and suppliers with respect to
complaints, grievances, and requests for information
concerning the programs under this title (including
provisions of title XI insofar as they relate to this title
and are not administered by the Office of the Inspector
General of the Department of Health and Human Services) and
in the resolution of unclear or conflicting guidance given by
the Secretary and medicare contractors to such providers of
services and suppliers regarding such programs and provisions
and requirements under this title and such provisions; and
``(2) submit recommendations to the Secretary for
improvement in the administration of this title and such
provisions, including--
``(A) recommendations to respond to recurring patterns of
confusion in this title and such provisions (including
recommendations regarding suspending imposition of sanctions
where there is widespread confusion in program
administration);
``(B) recommendations to provide for an appropriate and
consistent response (including not providing for audits) in
cases of self-identified overpayments by providers of
services and suppliers; and
``(C) recommendations to improve communication between
providers, contractors, and the Centers for Medicare &
Medicaid Services.
``(c) Staff.--The Secretary shall provide appropriate staff
to assist in performing the duties described in subsection
(b).''.
(b) Medicare Beneficiary Ombudsman.--Title XVIII is amended
by inserting after section 1806 the following new section:

``medicare beneficiary ombudsman

``Sec. 1807. (a) In General.--By not later than 1 year
after the date of the enactment of the Medicare Education,
Regulatory Reform, and Contracting Improvement Act of 2003,
the Secretary shall appoint within the Department of Health
and Human Services a Medicare Beneficiary Ombudsman
(including support staff) who shall have expertise and
experience in the fields of health care and advocacy.
``(b) Duties.--The Medicare Beneficiary Ombudsman shall--
``(1) receive complaints, grievances, and requests for
information submitted by a medicare beneficiary, with respect
to any aspect of the medicare program;
``(2) provide assistance with respect to complaints,
grievances, and requests referred to in paragraph (1),
including--
``(A) assistance in collecting relevant information for
such beneficiaries, to seek an appeal of a decision or
determination made by a fiscal intermediary, carrier,
Medicare+Choice organization, or the Secretary; and
``(B) assistance to such beneficiaries with any problems
arising from disenrollment from a Medicare+Choice plan under
part C; and
``(3) submit annual reports to Congress and the Secretary
that describe the activities of the Office and that include
such recommendations for improvement in the administration of
this title as the Ombudsman determines appropriate.''.
(c) Funding.--There are authorized to be appropriated to
the Secretary (in appropriate part from the Federal Hospital
Insurance Trust Fund and the Federal Supplementary Medical
Insurance Trust Fund) to carry out the provisions of
subsection (b) of section 1868 of the Social Security Act
(relating to the Medicare Provider Ombudsman), as added by
subsection (a)(5) and section 1807 of such Act (relating to
the Medicare Beneficiary Ombudsman), as added by subsection
(b), such sums as are necessary for fiscal year 2004 and each
succeeding fiscal year.
(d) Use of Central, Toll-Free Number (1-800-MEDICARE).--
Section 1804(b) (42 U.S.C. 1395b-2(b)) is amended by adding
at the end the following: ``By not later than 1 year after
the date of the enactment of the Medicare Education,
Regulatory Reform, and Contracting Improvement Act of 2003,
the Secretary shall provide, through the toll-free number 1-
800-MEDICARE, for a means by which individuals seeking
information about, or assistance with, such programs who
phone such toll-free number are transferred (without charge)
to appropriate entities for the provision of such information
or assistance. Such toll-free number shall be the toll-free
number listed for general information and assistance in the
annual notice under subsection (a) instead of the listing of
numbers of individual contractors.''.

SEC. 535. BENEFICIARY OUTREACH DEMONSTRATION PROGRAM.

(a) In General.--The Secretary shall establish a
demonstration program (in this section referred to as the
``demonstration program'') under which medicare specialists

[[Page S8791]]

employed by the Department of Health and Human Services
provide advice and assistance to medicare beneficiaries at
the location of existing local offices of the Social Security
Administration.
(b) Locations.--
(1) In general.--The demonstration program shall be
conducted in at least 6 offices or areas. Subject to
paragraph (2), in selecting such offices and areas, the
Secretary shall provide preference for offices with a high
volume of visits by medicare beneficiaries.
(2) Assistance for rural beneficiaries.--The Secretary
shall provide for the selection of at least 3 rural areas to
participate in the demonstration program. In conducting the
demonstration program in such rural areas, the Secretary
shall provide for medicare specialists to travel among local
offices in a rural area on a scheduled basis.
(c) Duration.--The demonstration program shall be conducted
over a 3-year period.
(d) Evaluation and Report.--
(1) Evaluation.--The Secretary shall provide for an
evaluation of the demonstration program. Such evaluation
shall include an analysis of--
(A) utilization of, and beneficiary satisfaction with, the
assistance provided under the program; and
(B) the cost-effectiveness of providing beneficiary
assistance through out-stationing medicare specialists at
local social security offices.
(2) Report.--The Secretary shall submit to Congress a
report on such evaluation and shall include in such report
recommendations regarding the feasibility of permanently out-
stationing medicare specialists at local social security
offices.

Subtitle E--Review, Recovery, and Enforcement Reform

SEC. 541. PREPAYMENT REVIEW.

(a) In General.--Section 1874A, as added by section
521(a)(1) and as amended by sections 531(b)(1) and 532(a), is
amended by adding at the end the following new subsection:
``(g) Conduct of Prepayment Review.--
``(1) Standardization of random prepayment review.--A
medicare administrative contractor shall conduct random
prepayment review only in accordance with a standard protocol
for random prepayment audits developed by the Secretary.
``(2) Limitations on initiation of nonrandom prepayment
review.--A medicare administrative contractor may not
initiate nonrandom prepayment review of a provider of
services, physician, practitioner, or supplier based on the
initial identification by that provider of services,
physician, practitioner, or supplier of an improper billing
practice unless there is a likelihood of sustained or high
level of payment error (as defined by the Secretary).
``(3) Termination of nonrandom prepayment review.--The
Secretary shall establish protocols or standards relating to
the termination, including termination dates, of nonrandom
prepayment review. Such regulations may vary such a
termination date based upon the differences in the
circumstances triggering prepayment review.
``(4) Construction.--Nothing in this subsection shall be
construed as preventing the denial of payments for claims
actually reviewed under a random prepayment review. In the
case of a provider of services, physician, practitioner, or
supplier with respect to which amounts were previously
overpaid, nothing in this subsection shall be construed as
limiting the ability of a medicare administrative contractor
to request the periodic production of records or supporting
documentation for a limited sample of submitted claims to
ensure that the previous practice is not continuing.
``(5) Random prepayment review defined.--For purposes of
this subsection, the term `random prepayment review' means a
demand for the production of records or documentation absent
cause with respect to a claim.''.
(b) Effective Date.--
(1) In general.--Except as provided in this subsection, the
amendment made by subsection (a) shall take effect on the
date of the enactment of this Act.
(2) Deadline for promulgation of certain regulations.--The
Secretary shall first issue regulations under section
1874A(g) of the Social Security Act, as added by subsection
(a), by not later than 1 year after the date of the enactment
of this Act.
(3) Application of standard protocols for random prepayment
review.--Section 1874A(g)(1) of the Social Security Act, as
added by subsection (a), shall apply to random prepayment
reviews conducted on or after such date (not later than 1
year after the date of the enactment of this Act) as the
Secretary shall specify. The Secretary shall develop and
publish the standard protocol under such section by not later
than 1 year after the date of the enactment of this Act.

SEC. 542. RECOVERY OF OVERPAYMENTS.

(a) In General.--Section 1874A, as added by section
521(a)(1) and as amended by sections 531(b)(1), 532(a), and
541(a), is amended by adding at the end the following new
subsection:
``(h) Recovery of Overpayments.--
``(1) Use of repayment plans.--
``(A) In general.--If the repayment, within the period
otherwise permitted by a provider of services, physician,
practitioner, or other supplier, of an overpayment under this
title meets the standards developed under subparagraph (B),
subject to subparagraph (C), and the provider, physician,
practitioner, or supplier requests the Secretary to enter
into a repayment plan with respect to such overpayment, the
Secretary shall enter into a plan with the provider,
physician, practitioner, or supplier for the offset or
repayment (at the election of the provider, physician,
practitioner, or supplier) of such overpayment over a period
of at least 1 year, but not longer than 3 years. Interest
shall accrue on the balance through the period of repayment.
The repayment plan shall meet terms and conditions determined
to be appropriate by the Secretary.
``(B) Development of standards.--The Secretary shall
develop standards for the recovery of overpayments. Such
standards shall--
``(i) include a requirement that the Secretary take into
account (and weigh in favor of the use of a repayment plan)
the reliance (as described in section 1871(d)(2)) by a
provider of services, physician, practitioner, and supplier
on guidance when determining whether a repayment plan should
be offered; and
``(ii) provide for consideration of the financial hardship
imposed on a provider of services, physician, practitioner,
or supplier in considering such a repayment plan.
In developing standards with regard to financial hardship
with respect to a provider of services, physician,
practitioner, or supplier, the Secretary shall take into
account the amount of the proposed recovery as a proportion
of payments made to that provider, physician, practitioner,
or supplier.
``(C) Exceptions.--Subparagraph (A) shall not apply if--
``(i) the Secretary has reason to suspect that the provider
of services, physician, practitioner, or supplier may file
for bankruptcy or otherwise cease to do business or
discontinue participation in the program under this title; or
``(ii) there is an indication of fraud or abuse committed
against the program.
``(D) Immediate collection if violation of repayment
plan.--If a provider of services, physician, practitioner, or
supplier fails to make a payment in accordance with a
repayment plan under this paragraph, the Secretary may
immediately seek to offset or otherwise recover the total
balance outstanding (including applicable interest) under the
repayment plan.
``(E) Relation to no fault provision.--Nothing in this
paragraph shall be construed as affecting the application of
section 1870(c) (relating to no adjustment in the cases of
certain overpayments).
``(2) Limitation on recoupment.--
``(A) No recoupment until reconsideration exercised.--In
the case of a provider of services, physician, practitioner,
or supplier that is determined to have received an
overpayment under this title and that seeks a reconsideration
of such determination by a qualified independent contractor
under section 1869(c), the Secretary may not take any action
(or authorize any other person, including any medicare
contractor, as defined in subparagraph (C)) to recoup the
overpayment until the date the decision on the
reconsideration has been rendered. If the provisions of
section 1869(b)(1) (providing for such a reconsideration by a
qualified independent contractor) are not in effect, in
applying the previous sentence any reference to such a
reconsideration shall be treated as a reference to a
redetermination by the fiscal intermediary or carrier
involved.
``(B) Payment of interest.--
``(i) Return of recouped amount with interest in case of
reversal.--Insofar as such determination on appeal against
the provider of services, physician, practitioner, or
supplier is later reversed, the Secretary shall provide for
repayment of the amount recouped plus interest for the period
in which the amount was recouped.
``(ii) Interest in case of affirmation.--Insofar as the
determination on such appeal is against the provider of
services, physician, practitioner, or supplier, interest on
the overpayment shall accrue on and after the date of the
original notice of overpayment.
``(iii) Rate of interest.--The rate of interest under this
subparagraph shall be the rate otherwise applicable under
this title in the case of overpayments.
``(C) Medicare contractor defined.--For purposes of this
subsection, the term `medicare contractor' has the meaning
given such term in section 1889(e).
``(3) Payment audits.--
``(A) Written notice for post-payment audits.--Subject to
subparagraph (C), if a medicare contractor decides to conduct
a post-payment audit of a provider of services, physician,
practitioner, or supplier under this title, the contractor
shall provide the provider of services, physician,
practitioner, or supplier with written notice (which may be
in electronic form) of the intent to conduct such an audit.
``(B) Explanation of findings for all audits.--Subject to
subparagraph (C), if a medicare contractor audits a provider
of services, physician, practitioner, or supplier under this
title, the contractor shall--
``(i) give the provider of services, physician,
practitioner, or supplier a full review and explanation of
the findings of the audit in a manner that is understandable
to the provider of services, physician, practitioner, or
supplier and permits the development of an appropriate
corrective action plan;
``(ii) inform the provider of services, physician,
practitioner, or supplier of the appeal rights under this
title as well as consent settlement options (which are at the
discretion of the Secretary); and

[[Page S8792]]

``(iii) give the provider of services, physician,
practitioner, or supplier an opportunity to provide
additional information to the contractor.
``(C) Exception.--Subparagraphs (A) and (B) shall not apply
if the provision of notice or findings would compromise
pending law enforcement activities, whether civil or
criminal, or reveal findings of law enforcement-related
audits.
``(4) Notice of over-utilization of codes.--The Secretary
shall establish, in consultation with organizations
representing the classes of providers of services,
physicians, practitioners, and suppliers, a process under
which the Secretary provides for notice to classes of
providers of services, physicians, practitioners, and
suppliers served by a medicare contractor in cases in which
the contractor has identified that particular billing codes
may be over utilized by that class of providers of services,
physicians, practitioners, or suppliers under the programs
under this title (or provisions of title XI insofar as they
relate to such programs).
``(5) Standard methodology for probe sampling.--The
Secretary shall establish a standard methodology for medicare
administrative contractors to use in selecting a sample of
claims for review in the case of an abnormal billing pattern.
``(6) Consent settlement reforms.--
``(A) In general.--The Secretary may use a consent
settlement (as defined in subparagraph (D)) to settle a
projected overpayment.
``(B) Opportunity to submit additional information before
consent settlement offer.--Before offering a provider of
services, physician, practitioner, or supplier a consent
settlement, the Secretary shall--
``(i) communicate to the provider of services, physician,
practitioner, or supplier in a nonthreatening manner that,
based on a review of the medical records requested by the
Secretary, a preliminary evaluation of those records
indicates that there would be an overpayment; and
``(ii) provide for a 45-day period during which the
provider of services, physician, practitioner, or supplier
may furnish additional information concerning the medical
records for the claims that had been reviewed.
``(C) Consent settlement offer.--The Secretary shall review
any additional information furnished by the provider of
services, physician, practitioner, or supplier under
subparagraph (B)(ii). Taking into consideration such
information, the Secretary shall determine if there still
appears to be an overpayment. If so, the Secretary--
``(i) shall provide notice of such determination to the
provider of services, physician, practitioner, or supplier,
including an explanation of the reason for such
determination; and
``(ii) in order to resolve the overpayment, may offer the
provider of services, physician, practitioner, or supplier--

``(I) the opportunity for a statistically valid random
sample; or
``(II) a consent settlement.

The opportunity provided under clause (ii)(I) does not waive
any appeal rights with respect to the alleged overpayment
involved.
``(D) Consent settlement defined.--For purposes of this
paragraph, the term `consent settlement' means an agreement
between the Secretary and a provider of services, physician,
practitioner, or supplier whereby both parties agree to
settle a projected overpayment based on less than a
statistically valid sample of claims and the provider of
services, physician, practitioner, or supplier agrees not to
appeal the claims involved.''.
(b) Effective Dates and Deadlines.--
(1) Not later than 1 year after the date of the enactment
of this Act, the Secretary shall first--
(A) develop standards for the recovery of overpayments
under section 1874A(h)(1)(B) of the Social Security Act, as
added by subsection (a);
(B) establish the process for notice of overutilization of
billing codes under section 1874A(h)(4) of the Social
Security Act, as added by subsection (a); and
(C) establish a standard methodology for selection of
sample claims for abnormal billing patterns under section
1874A(h)(5) of the Social Security Act, as added by
subsection (a).
(2) Section 1874A(h)(2) of the Social Security Act, as
added by subsection (a), shall apply to actions taken after
the date that is 1 year after the date of the enactment of
this Act.
(3) Section 1874A(h)(3) of the Social Security Act, as
added by subsection (a), shall apply to audits initiated
after the date of the enactment of this Act.
(4) Section 1874A(h)(6) of the Social Security Act, as
added by subsection (a), shall apply to consent settlements
entered into after the date of the enactment of this Act.

SEC. 543. PROCESS FOR CORRECTION OF MINOR ERRORS AND
OMISSIONS ON CLAIMS WITHOUT PURSUING APPEALS
PROCESS.

(a) In General.--The Secretary shall develop, in
consultation with appropriate medicare contractors (as
defined in section 1889(e) of the Social Security Act, as
added by section 531(d)(1)) and representatives of providers
of services, physicians, practitioners, facilities, and
suppliers, a process whereby, in the case of minor errors or
omissions (as defined by the Secretary) that are detected in
the submission of claims under the programs under title XVIII
of such Act, a provider of services, physician, practitioner,
facility, or supplier is given an opportunity to correct such
an error or omission without the need to initiate an appeal.
Such process shall include the ability to resubmit corrected
claims.
(b) Deadline.--Not later than 1 year after the date of the
enactment of this Act, the Secretary shall first develop the
process under subsection (a).

SEC. 544. AUTHORITY TO WAIVE A PROGRAM EXCLUSION.

The first sentence of section 1128(c)(3)(B) (42 U.S.C.
1320a-7(c)(3)(B)) is amended to read as follows: ``Subject to
subparagraph (G), in the case of an exclusion under
subsection (a), the minimum period of exclusion shall be not
less than 5 years, except that, upon the request of an
administrator of a Federal health care program (as defined in
section 1128B(f)) who determines that the exclusion would
impose a hardship on beneficiaries of that program, the
Secretary may waive the exclusion under subsection (a)(1),
(a)(3), or (a)(4) with respect to that program in the case of
an individual or entity that is the sole community physician
or sole source of essential specialized services in a
community.

SEC. 545. RECOVERY OF OVERPAYMENTS.

(a) In General.--Section 1893 (42 U.S.C. 1395ddd) is
amended by adding at the end the following new subsection:
``(f) Limitation on Use of Extrapolation.--A medicare
contractor may not use extrapolation to determine overpayment
amounts to be recovered by recoupment, offset, or otherwise
unless--
``(1) there is a sustained or high level of payment error
(as defined by the Secretary by regulation); or
``(2) documented educational intervention has failed to
correct the payment error (as determined by the
Secretary).''.
(b) Effective Date.--Section 1893(f) of the Social Security
Act, as added by subsection (a), shall apply to statistically
valid random samples initiated after the date that is 1 year
after the date of the enactment of this Act.

Subtitle F--Other Improvements

SEC. 551. INCLUSION OF ADDITIONAL INFORMATION IN NOTICES TO
BENEFICIARIES ABOUT SKILLED NURSING FACILITY
AND HOSPITAL BENEFITS.

(a) In General.--The Secretary shall provide that in
medicare beneficiary notices provided (under section 1806(a)
of the Social Security Act, 42 U.S.C. 1395b-7(a)) with
respect to the provision of post-hospital extended care
services and inpatient hospital services under part A of
title XVIII of the Social Security Act, there shall be
included information on the number of days of coverage of
such services remaining under such part for the medicare
beneficiary and spell of illness involved.
(b) Effective Date.--Subsection (a) shall apply to notices
provided during calendar quarters beginning more than 6
months after the date of the enactment of this Act.

SEC. 552. INFORMATION ON MEDICARE-CERTIFIED SKILLED NURSING
FACILITIES IN HOSPITAL DISCHARGE PLANS.

(a) Availability of Data.--The Secretary shall publicly
provide information that enables hospital discharge planners,
medicare beneficiaries, and the public to identify skilled
nursing facilities that are participating in the medicare
program.
(b) Inclusion of Information in Certain Hospital Discharge
Plans.--
(1) In general.--Section 1861(ee)(2)(D) (42 U.S.C.
1395x(ee)(2)(D)) is amended--
(A) by striking ``hospice services'' and inserting
``hospice care and post-hospital extended care services'';
and
(B) by inserting before the period at the end the
following: ``and, in the case of individuals who are likely
to need post-hospital extended care services, the
availability of such services through facilities that
participate in the program under this title and that serve
the area in which the patient resides''.
(2) Effective date.--The amendments made by paragraph (1)
shall apply to discharge plans made on or after such date as
the Secretary shall specify, but not later than 6 months
after the date the Secretary provides for availability of
information under subsection (a).

SEC. 553. EVALUATION AND MANAGEMENT DOCUMENTATION GUIDELINES
CONSIDERATION.

The Secretary shall ensure, before making changes in
documentation guidelines for, or clinical examples of, or
codes to report evaluation and management physician services
under title XVIII of Social Security Act, that the process
used in developing such guidelines, examples, or codes was
widely consultative among physicians, reflects a broad
consensus among specialties, and would allow verification of
reported and furnished services.

SEC. 554. IMPROVEMENT IN OVERSIGHT OF TECHNOLOGY AND
COVERAGE.

(a) Council for Technology and Innovation.--Section 1868
(42 U.S.C. 1395ee), as amended by section 301(a), is amended
by adding at the end the following new subsection:
``(c) Council for Technology and Innovation.--
``(1) Establishment.--The Secretary shall establish a
Council for Technology and Innovation within the Centers for
Medicare & Medicaid Services (in this section referred to as
`CMS').
``(2) Composition.--The Council shall be composed of senior
CMS staff and clinicians

[[Page S8793]]

and shall be chaired by the Executive Coordinator for
Technology and Innovation (appointed or designated under
paragraph (4)).
``(3) Duties.--The Council shall coordinate the activities
of coverage, coding, and payment processes under this title
with respect to new technologies and procedures, including
new drug therapies, and shall coordinate the exchange of
information on new technologies between CMS and other
entities that make similar decisions.
``(4) Executive coordinator for technology and
innovation.--The Secretary shall appoint (or designate) a
noncareer appointee (as defined in section 3132(a)(7) of
title 5, United States Code) who shall serve as the Executive
Coordinator for Technology and Innovation. Such executive
coordinator shall report to the Administrator of CMS, shall
chair the Council, shall oversee the execution of its duties,
and shall serve as a single point of contact for outside
groups and entities regarding the coverage, coding, and
payment processes under this title.''.
(b) Methods for Determining Payment Basis for New Lab
Tests.--Section 1833(h) (42 U.S.C. 1395l(h)) is amended by
adding at the end the following:
``(8)(A) The Secretary shall establish by regulation
procedures for determining the basis for, and amount of,
payment under this subsection for any clinical diagnostic
laboratory test with respect to which a new or substantially
revised HCPCS code is assigned on or after January 1, 2005
(in this paragraph referred to as `new tests').
``(B) Determinations under subparagraph (A) shall be made
only after the Secretary--
``(i) makes available to the public (through an Internet
site and other appropriate mechanisms) a list that includes
any such test for which establishment of a payment amount
under this subsection is being considered for a year;
``(ii) on the same day such list is made available, causes
to have published in the Federal Register notice of a meeting
to receive comments and recommendations (and data on which
recommendations are based) from the public on the appropriate
basis under this subsection for establishing payment amounts
for the tests on such list;
``(iii) not less than 30 days after publication of such
notice convenes a meeting, that includes representatives of
officials of the Centers for Medicare & Medicaid Services
involved in determining payment amounts, to receive such
comments and recommendations (and data on which the
recommendations are based);
``(iv) taking into account the comments and recommendations
(and accompanying data) received at such meeting, develops
and makes available to the public (through an Internet site
and other appropriate mechanisms) a list of proposed
determinations with respect to the appropriate basis for
establishing a payment amount under this subsection for each
such code, together with an explanation of the reasons for
each such determination, the data on which the determinations
are based, and a request for public written comments on the
proposed determination; and
``(v) taking into account the comments received during the
public comment period, develops and makes available to the
public (through an Internet site and other appropriate
mechanisms) a list of final determinations of the payment
amounts for such tests under this subsection, together with
the rationale for each such determination, the data on which
the determinations are based, and responses to comments and
suggestions received from the public.
``(C) Under the procedures established pursuant to
subparagraph (A), the Secretary shall--
``(i) set forth the criteria for making determinations
under subparagraph (A); and
``(ii) make available to the public the data (other than
proprietary data) considered in making such determinations.
``(D) The Secretary may convene such further public
meetings to receive public comments on payment amounts for
new tests under this subsection as the Secretary deems
appropriate.
``(E) For purposes of this paragraph:
``(i) The term `HCPCS' refers to the Health Care Procedure
Coding System.
``(ii) A code shall be considered to be `substantially
revised' if there is a substantive change to the definition
of the test or procedure to which the code applies (such as a
new analyte or a new methodology for measuring an existing
analyte-specific test).''.
(c) GAO Study on Improvements in External Data Collection
for Use in the Medicare Inpatient Payment System.--
(1) Study.--The Comptroller General of the United States
shall conduct a study that analyzes which external data can
be collected in a shorter time frame by the Centers for
Medicare & Medicaid Services for use in computing payments
for inpatient hospital services. The study may include an
evaluation of the feasibility and appropriateness of using of
quarterly samples or special surveys or any other methods.
The study shall include an analysis of whether other
executive agencies, such as the Bureau of Labor Statistics in
the Department of Commerce, are best suited to collect this
information.
(2) Report.--By not later than October 1, 2004, the
Comptroller General shall submit a report to Congress on the
study under paragraph (1).

SEC. 555. TREATMENT OF HOSPITALS FOR CERTAIN SERVICES UNDER
MEDICARE SECONDARY PAYOR (MSP) PROVISIONS.

(a) In General.--The Secretary shall not require a hospital
(including a critical access hospital) to ask questions (or
obtain information) relating to the application of section
1862(b) of the Social Security Act (relating to medicare
secondary payor provisions) in the case of reference
laboratory services described in subsection (b), if the
Secretary does not impose such requirement in the case of
such services furnished by an independent laboratory.
(b) Reference Laboratory Services Described.--Reference
laboratory services described in this subsection are clinical
laboratory diagnostic tests (or the interpretation of such
tests, or both) furnished without a face-to-face encounter
between the individual entitled to benefits under part A or
enrolled under part B, or both, and the hospital involved and
in which the hospital submits a claim only for such test or
interpretation.

SEC. 556. EMTALA IMPROVEMENTS.

(a) Payment for EMTALA-Mandated Screening and Stabilization
Services.--
(1) In general.--Section 1862 (42 U.S.C. 1395y) is amended
by inserting after subsection (c) the following new
subsection:
``(d) For purposes of subsection (a)(1)(A), in the case of
any item or service that is required to be provided pursuant
to section 1867 to an individual who is entitled to benefits
under this title, determinations as to whether the item or
service is reasonable and necessary shall be made on the
basis of the information available to the treating physician
or practitioner (including the patient's presenting symptoms
or complaint) at the time the item or service was ordered or
furnished by the physician or practitioner (and not on the
patient's principal diagnosis). When making such
determinations with respect to such an item or service, the
Secretary shall not consider the frequency with which the
item or service was provided to the patient before or after
the time of the admission or visit.''.
(2) Effective date.--The amendment made by paragraph (1)
shall apply to items and services furnished on or after
January 1, 2004.
(b) Notification of Providers When EMTALA Investigation
Closed.--Section 1867(d) (42 U.S.C. 42 U.S.C. 1395dd(d)) is
amended by adding at the end the following new paragraph:
``(4) Notice upon closing an investigation.--The Secretary
shall establish a procedure to notify hospitals and
physicians when an investigation under this section is
closed.''.
(c) Prior Review by Peer Review Organizations in EMTALA
Cases Involving Termination of Participation.--
(1) In general.--Section 1867(d)(3) (42 U.S.C.
1395dd(d)(3)) is amended--
(A) in the first sentence, by inserting ``or in terminating
a hospital's participation under this title'' after ``in
imposing sanctions under paragraph (1)''; and
(B) by adding at the end the following new sentences:
``Except in the case in which a delay would jeopardize the
health or safety of individuals, the Secretary shall also
request such a review before making a compliance
determination as part of the process of terminating a
hospital's participation under this title for violations
related to the appropriateness of a medical screening
examination, stabilizing treatment, or an appropriate
transfer as required by this section, and shall provide a
period of 5 days for such review. The Secretary shall provide
a copy of the organization's report to the hospital or
physician consistent with confidentiality requirements
imposed on the organization under such part B.''.
(2) Effective date.--The amendments made by paragraph (1)
shall apply to terminations of participation initiated on or
after the date of the enactment of this Act.

SEC. 557. EMERGENCY MEDICAL TREATMENT AND ACTIVE LABOR ACT
(EMTALA) TECHNICAL ADVISORY GROUP.

(a) Establishment.--The Secretary shall establish a
Technical Advisory Group (in this section referred to as the
``Advisory Group'') to review issues related to the Emergency
Medical Treatment and Labor Act (EMTALA) and its
implementation. In this section, the term ``EMTALA'' refers
to the provisions of section 1867 of the Social Security Act
(42 U.S.C. 1395dd).
(b) Membership.--The Advisory Group shall be composed of 19
members, including the Administrator of the Centers for
Medicare & Medicaid Services and the Inspector General of the
Department of Health and Human Services and of which--
(1) 4 shall be representatives of hospitals, including at
least one public hospital, that have experience with the
application of EMTALA and at least 2 of which have not been
cited for EMTALA violations;
(2) 7 shall be practicing physicians drawn from the fields
of emergency medicine, cardiology or cardiothoracic surgery,
orthopedic surgery, neurosurgery, pediatrics or a pediatric
subspecialty, obstetrics-gynecology, and psychiatry, with not
more than one physician from any particular field;
(3) 2 shall represent patients;
(4) 2 shall be staff involved in EMTALA investigations from
different regional offices of the Centers for Medicare &
Medicaid Services; and
(5) 1 shall be from a State survey office involved in
EMTALA investigations and 1 shall be from a peer review
organization, both of whom shall be from areas other than the
regions represented under paragraph (4).

[[Page S8794]]

In selecting members described in paragraphs (1) through (3),
the Secretary shall consider qualified individuals nominated
by organizations representing providers and patients.
(c) General Responsibilities.--The Advisory Group--
(1) shall review EMTALA regulations;
(2) may provide advice and recommendations to the Secretary
with respect to those regulations and their application to
hospitals and physicians;
(3) shall solicit comments and recommendations from
hospitals, physicians, and the public regarding the
implementation of such regulations; and
(4) may disseminate information on the application of such
regulations to hospitals, physicians, and the public.
(d) Administrative Matters.--
(1) Chairperson.--The members of the Advisory Group shall
elect a member to serve as chairperson of the Advisory Group
for the life of the Advisory Group.
(2) Meetings.--The Advisory Group shall first meet at the
direction of the Secretary. The Advisory Group shall then
meet twice per year and at such other times as the Advisory
Group may provide.
(e) Termination.--The Advisory Group shall terminate 30
months after the date of its first meeting.
(f) Waiver of Administrative Limitation.--The Secretary
shall establish the Advisory Group notwithstanding any
limitation that may apply to the number of advisory
committees that may be established (within the Department of
Health and Human Services or otherwise).

SEC. 558. AUTHORIZING USE OF ARRANGEMENTS TO PROVIDE CORE
HOSPICE SERVICES IN CERTAIN CIRCUMSTANCES.

(a) In General.--Section 1861(dd)(5) (42 U.S.C.
1395x(dd)(5)) is amended by adding at the end the following:
``(D) In extraordinary, exigent, or other nonroutine
circumstances, such as unanticipated periods of high patient
loads, staffing shortages due to illness or other events, or
temporary travel of a patient outside a hospice program's
service area, a hospice program may enter into arrangements
with another hospice program for the provision by that other
program of services described in paragraph (2)(A)(ii)(I). The
provisions of paragraph (2)(A)(ii)(II) shall apply with
respect to the services provided under such arrangements.
``(E) A hospice program may provide services described in
paragraph (1)(A) other than directly by the program if the
services are highly specialized services provided by or under
the supervision of a registered professional nurse and are
provided nonroutinely and so infrequently so that the
provision of such services directly would be impracticable
and prohibitively expensive.''.
(b) Conforming Payment Provision.--Section 1814(i) (42
U.S.C. 1395f(i)) is amended by adding at the end the
following new paragraph:
``(4) In the case of hospice care provided by a hospice
program under arrangements under section 1861(dd)(5)(D) made
by another hospice program, the hospice program that made the
arrangements shall bill and be paid for the hospice care.''.
(c) Effective Date.--The amendments made by this section
shall apply to hospice care provided on or after the date of
the enactment of this Act.

SEC. 559. COVERAGE OF HOSPICE CONSULTATION SERVICES.

(a) Coverage of Hospice Consultation Services.--Section
1812(a) (42 U.S.C. 1395d(a)) is amended--
(1) by striking ``and'' at the end of paragraph (3);
(2) by striking the period at the end of paragraph (4) and
inserting ``; and''; and
(3) by inserting after paragraph (4) the following new
paragraph:
``(5) for individuals who are terminally ill and who have
not made an election under subsection (d)(1), services that
are furnished by a physician who is either the medical
director or an employee of a hospice program and that consist
of--
``(A) an evaluation of the individual's need for pain and
symptom management, including the need for hospice care;
``(B) counseling the individual with respect to end-of-life
issues, the benefits of hospice care, and care options; and
``(C) if appropriate, advising the individual regarding
advanced care planning.''.
(b) Payment.--Section 1814(i) (42 U.S.C. 1395f(i)) is
amended by adding at the end the following new paragraph:
``(4) The amount paid to a hospice program with respect to
the services under section 1812(a)(5) for which payment may
be made under part A shall be the amount determined under a
fee schedule established by the Secretary.''.
(c) Conforming Amendment.--Section 1861(dd)(2)(A)(i) (42
U.S.C. 1395x(dd)(2)(A)(i)) is amended by inserting before the
comma at the end the following: ``and services described in
section 1812(a)(5)''.
(d) Effective Date.--The amendments made by this section
shall apply to services provided by a hospice program on or
after January 1, 2004.

SEC. 560. APPLICATION OF OSHA BLOODBORNE PATHOGENS STANDARD
TO CERTAIN HOSPITALS.

(a) In General.--Section 1866 (42 U.S.C. 1395cc) is
amended--
(1) in subsection (a)(1)--
(A) in subparagraph (R), by striking ``and'' at the end;
(B) in subparagraph (S), by striking the period at the end
and inserting ``, and''; and
(C) by inserting after subparagraph (S) the following new
subparagraph:
``(T) in the case of hospitals that are not otherwise
subject to the Occupational Safety and Health Act of 1970 or
a State occupational safety and health plan that is approved
under section 18(b) of such Act, to comply with the
Bloodborne Pathogens standard under section 1910.1030 of
title 29 of the Code of Federal Regulations (or as
subsequently redesignated).''; and
(2) by adding at the end of subsection (b) the following
new paragraph:
``(4)(A) A hospital that fails to comply with the
requirement of subsection (a)(1)(T) (relating to the
Bloodborne Pathogens standard) is subject to a civil money
penalty in an amount described in subparagraph (B), but is
not subject to termination of an agreement under this
section.
``(B) The amount referred to in subparagraph (A) is an
amount that is similar to the amount of civil penalties that
may be imposed under section 17 of the Occupational Safety
and Health Act of 1970 for a violation of the Bloodborne
Pathogens standard referred to in subsection (a)(1)(T) by a
hospital that is subject to the provisions of such Act.
``(C) A civil money penalty under this paragraph shall be
imposed and collected in the same manner as civil money
penalties under subsection (a) of section 1128A are imposed
and collected under that section.''.
(b) Effective Date.--The amendments made by this subsection
(a) shall apply to hospitals as of July 1, 2004.

SEC. 561. BIPA-RELATED TECHNICAL AMENDMENTS AND CORRECTIONS.

(a) Technical Amendments Relating to Advisory Committee
under BIPA Section 522.--(1) Subsection (i) of section 1114
(42 U.S.C. 1314)--
(A) is transferred to section 1862 and added at the end of
such section; and
(B) is redesignated as subsection (j).
(2) Section 1862 (42 U.S.C. 1395y) is amended--
(A) in the last sentence of subsection (a), by striking
``established under section 1114(f)''; and
(B) in subsection (j), as so transferred and redesignated--
(i) by striking ``under subsection (f)''; and
(ii) by striking ``section 1862(a)(1)'' and inserting
``subsection (a)(1)''.
(b) Terminology Corrections.--(1) Section 1869(c)(3)(I)(ii)
(42 U.S.C. 1395ff(c)(3)(I)(ii)), as amended by section 521 of
BIPA, is amended--
(A) in subclause (III), by striking ``policy'' and
inserting ``determination''; and
(B) in subclause (IV), by striking ``medical review
policies'' and inserting ``coverage determinations''.
(2) Section 1852(a)(2)(C) (42 U.S.C. 1395w-22(a)(2)(C)) is
amended by striking ``policy'' and ``policy'' and inserting
``determination'' each place it appears and
``determination'', respectively.
(c) Reference Corrections.--Section 1869(f)(4) (42 U.S.C.
1395ff(f)(4)), as added by section 522 of BIPA, is amended--
(1) in subparagraph (A)(iv), by striking ``subclause (I),
(II), or (III)'' and inserting ``clause (i), (ii), or
(iii)'';
(2) in subparagraph (B), by striking ``clause (i)(IV)'' and
``clause (i)(III)'' and inserting ``subparagraph (A)(iv)''
and ``subparagraph (A)(iii)'', respectively; and
(3) in subparagraph (C), by striking ``clause (i)'',
``subclause (IV)'' and ``subparagraph (A)'' and inserting
``subparagraph (A)'', ``clause (iv)'' and ``paragraph
(1)(A)'', respectively each place it appears.
(d) Other Corrections.--Effective as if included in the
enactment of section 521(c) of BIPA, section 1154(e) (42
U.S.C. 1320c-3(e)) is amended by striking paragraph (5).
(e) Effective Date.--Except as otherwise provided, the
amendments made by this section shall be effective as if
included in the enactment of BIPA.

SEC. 562. TREATMENT OF CERTAIN DENTAL CLAIMS.

(a) In General.--Section 1862 (42 U.S.C. 1395y) is amended
by adding after subsection (g) the following new subsection:
``(h)(1) Subject to paragraph (2), a group health plan (as
defined in subsection (a)(1)(A)(v)) providing supplemental or
secondary coverage to individuals also entitled to services
under this title shall not require a medicare claims
determination under this title for dental benefits
specifically excluded under subsection (a)(12) as a condition
of making a claims determination for such benefits under the
group health plan.
``(2) A group health plan may require a claims
determination under this title in cases involving or
appearing to involve inpatient dental hospital services or
dental services expressly covered under this title pursuant
to actions taken by the Secretary.''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect on the date that is 60 days after the date
of the enactment of this Act.

SEC. 563. REVISIONS TO REASSIGNMENT PROVISIONS.

(a) In General.--Section 1842(b)(6)(A)(ii) (42 U.S.C.
1395u(b)(6)(A)(ii)) is amended to read as follows: ``(ii)
where the service was provided under a contractual
arrangement between such physician or other person and a
qualified entity (as defined by the Secretary) or other
person, to the entity or other person if under such
arrangement such entity or individual submits the bill for
such service and such arrangement (I) includes

[[Page S8795]]

joint and several liability for overpayment by such physician
or other person and such entity or other person, and (II)
meets such other program integrity and other safeguards as
the Secretary may determine to be appropriate,''.
(b) Conforming Amendments.--
(1) The second sentence of section 1842(b)(6) (42 U.S.C.
1395u(b)(6)) is amended by striking ``except to an employer
or facility as described in clause (A)'' and inserting
``except to an employer, entity, or other person as described
in subparagraph (A)''.
(2) Section 1842(b)(6) (42 U.S.C. 1395u(b)(6)) is amended
by adding at the end the following new sentence: ``Nothing in
subparagraph (A)(ii) shall be construed to prohibit
requirements for joint and several liability for contractual
arrangements where such requirements are not explicitly
stated in a statute.''.
(c) Effective Date.--The amendments made by this section
shall apply to payments made on or after 1 year after the
date of the enactment of this Act.

SEC. 564. GAO STUDY AND REPORT REGARDING ILLINOIS COUNCIL
DECISION.

(a) Study.--The Comptroller General of the United States
shall conduct a study on the access of health care providers
and beneficiaries under the medicare program under title
XVIII of the Social Security Act to judicial review of the
actions of the Secretary of Health and Human Services and the
effects of the decision of the Supreme Court of the United
States in Shalala v. Illinois Council on Long Term Care,
Inc., 529 U.S. 1 (1999) on such access.
(a) Report.--Not later than the date that is 1 year after
the date of enactment of this Act, the Comptroller General of
the United States shall submit to Congress a report on the
study conducted under subsection (a) together with
recommendations for such legislation or administrative action
as the Comptroller General determines to be appropriate.
______

SA 1126. Mrs. DOLE (for herself, and Mr. Edwards) submitteed an
amendment intended to be proposed by her to the bill S. 1, to amend
title XVIII of the Social Security Act to provide for a voluntary
prescription drug benefit under the Medicare program and to strengthen
and improve the Medicare program, and for other purposes; as follows:

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

SEC. __. TREATMENT OF CERTAIN ENTITIES FOR PURPOSES OF
PAYMENTS UNDER THE MEDICARE PROGRAM.

(a) Payments to Hospitals.--
(1) In general.--Notwithstanding any other provision of
law, effective for discharges occurring on or after October
1, 2003, for purposes of making payments to hospitals (as
defined in section 1886(d) and 1833(t) of the Social Security
Act (42 U.S.C. 1395(d)) under the medicare program under
title XVIII of such Act (42 U.S.C. 1395 et seq.), Iredell
County, North Carolina, and Rowan County, North Carolina, are
deemed to be located in the Charlotte-Gastonia-Rock Hill,
North Carolina, South Carolina Metropolitan Statistical Area.
(2) Budget neutral within north carolina.--The Secretary
shall adjust the area wage index referred to in paragraph (1)
with respect to payments to hospitals located in North
Carolina in a manner which assures that the total payments
made under section 1886(d) of the Social Security Act (42
U.S.C., 1395(ww)(d)) in a fiscal year for the operating cost
of inpatient hospital services are not greater or less than
the total of such payments that would have been made in the
year if this subsection had not been enacted.
(b) Payments to Skilled Nursing Facilities and Home Health
Agencies.--
(1) In general.--Notwithstanding any other provision of
law, effective beginning October 1, 2003, for purposes of
making payments to skilled nursing facilities (SNFs) and home
health agencies (as defined in sections 1861(j) and 1861(o)
of the Social Security Act (42 U.S.C. 1395x(j); 1395x(o))
under the medicare program under title XVIII of such Act,
Iredell County, North Carolina, and Rowan County, North
Carolina, are deemed to be located in the Charlotte-Gastonia-
Rock Hill, North Carolina, South Carolina Metropolitan
Statistical Area.
(2) Application and budget neutral within north carolina.--
Effective for fiscal year 2004, the skilled nursing facility
PPS and home health PPS rates for Iredell County, North
Carolina, and Rowan County, North Carolina, will be updated
by the prefloor, prereclassified hospital wage index
available for the Charlotte-Gastonia-Rock Hill, North
Carolina, South Carolina Metropolitan Statistical Area. This
subsection shall be implemented in a budget neutral manner,
using a methodology that ensures that the total amount of
expenditures for skilled nursing facility services and home
health services in a year does not exceed the total amount of
expenditures that would have been made in the year if this
subsection had not been enacted. Required adjustments by
reason of the preceding sentence shall be done with respect
to skilled nursing facilities and home health agencies
located in North Carolina.
(c) Construction.--The provisions of this section shall
have no effect on the amount of payments made under title
XVIII of the Social Security Act to entities located in
States other than North Carolina.
______

SA 1127. Mr. CHAMBLISS submitted an amendment intended to be proposed
by him to the bill S. 1, to amend title XVIII of the Social Security
Act to provide for a voluntary prescription drug benefit under the
Medicare program and to strengthen and improve 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. __. BRACHYTHERAPY DEVICES.

(a) Specification of Groups for Brachytherapy Devices.--
Section 1833(t)(2) (42 U.S.C. 1395l(t)(2)) is amended--
(1) in subparagraph (F), by striking ``and'' at the end;
(2) in subparagraph (G), by striking the period at the end
and inserting ``; and''; and
(3) by adding at the end the following new subparagraph:
``(H) with respect to devices of brachytherapy furnished on
or after January 1, 2004, and before January 1, 2007, the
Secretary shall create additional groups of covered OPD
services that classify such devices separately from the other
services (or group of services) paid for under this
subsection in a manner reflecting the number of such devices
furnished separately for palladium-103 and iodine-125.''.
(b) GAO Report.--The Comptroller General of the United
States shall conduct a study to determine appropriate payment
amounts under section 1833(t)(13)(B) of the Social Security
Act, as added by subsection (a), for devices of
brachytherapy. Not later than January 1, 2005, the
Comptroller General shall submit to Congress and the
Secretary a report on the study conducted under this
subsection, and shall include specific recommendations for
appropriate payments for such devices.
______

SA 1128. Mr. SPECTER submitted an amendment intended to be proposed
by him to the bill S. 1, to amend title XVIII of the Social Security
Act to provide for a voluntary prescription drug benefit under the
Medicare program and to strengthen and improve the Medicare program,
and for other purposes; which was ordered to lie on the table; as
follows:

On page 133, after line 25, insert the following:
``(3) Coordination with existing state pharmaceutical
assistance programs.--
``(A) In general.--An eligible entity offering a Medicare
Prescription Drug plan, or a MedicareAdvantage organization
offering a MedicareAdvantage plan (other than an MSA plan or
a private fee-for-service plan that does not provide
qualified prescription drug coverage), shall enter into an
agreement with each existing State pharmaceutical assistance
program to coordinate the coverage provided under the plan
with the assistance provided under the existing State
pharmaceutical assistance program.
``(B) Election.--Under the process established under
section 1860D-3(a), an eligible beneficiary who resides in a
State with an existing State pharmaceutical assistance
program and who is eligible to enroll in such program shall
elect to enroll in a Medicare Prescription Drug plan or
MedicareAdvantage plan through the existing State
pharmaceutical assistance program.
``(C) Existing state pharmaceutical assistance program
defined.--In this paragraph, the term `existing State
pharmaceutical assistance program' means a program that has
been established pursuant to a waiver under section 1115 or
otherwise before January 1, 2004.
______

SA 1129. Mr. DASCHLE (for Mr. Kerry) submitted an amendment intended
to be proposed by Mr. Daschle to the bill S. 1, to amend title XVIII of
the Social Security Act to provide for a voluntary prescription drug
benefit under the Medicare program and to strengthen and improve 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 PARITY OF MENTAL
HEALTH SERVICES UNDER MEDICARE.

(a) Findings.--The Senate finds the following:
(1) Beneficiaries of the Medicare program under title XVIII
of the Social Security Act pay 50 percent coinsurance for
outpatient psychiatric services.
(2) In comparison, such beneficiaries pay 20 percent
coinsurance for all other medical services.
(3) There is no scientific or medical justification for
this discriminatory inequity.
(b) Sense of the Senate.--It is the sense of the Senate
that Congress should work to achieve parity under the
Medicare program under title XVIII of the Social Security Act
between mental health services and other medical services as
soon as practicable.
______

SA 1130. Mr. ROBERTS submitted an amendment intended to be proposed
by him to the bill to S. 1, to amend title XVIII of the Social Security
Act to

[[Page S8796]]

provide for a voluntary prescription drug benefit under the Medicare
program and to strengthen and improve the Medicare program, and for
other purposes; which was ordered to lie on the table, as follows:

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

SEC. __. STUDY ON TRENDS IN EMPLOYMENT-BASED RETIREE HEALTH
COVERAGE.

(a) Study.--The Comptroller General of the United States,
in consultation with employers, health benefit experts,
academia, human resource professionals, State and local
government officials, and employer consulting firms, shall
conduct a study to determine the effect of the amendments
made by this Act on the provision of employment-based retiree
health coverage (as such term is defined in section 1860D-
20(e)(4)(B) of the Social Security Act). Such study shall
examine the following:
(1) Trends in employment-based retiree health coverage, as
such trends relate to retirees who are eligible for coverage
under the medicare program under title XVIII of the Social
Security Act (42 U.S.C. 1395 et seq.).
(2) The extent to which health care coverage, including
coverage under Medicare+Choice, MedicareAdvantage, and fee-
for-service prescription drug plans under the medicare
program, are available to retirees who are eligible for
coverage under the medicare program.
(3) The extent to which geographic location plays a role in
the structure and availability of retiree health benefit
coverage.
(4) Whether incentives built into this Act (and the
amendments made by this Act) are sufficient to induce
employers to maintain employment-based retiree health
coverage, and whether other voluntary incentives exist to
encourage employers to maintain such coverage.
(5) Whether obstacles exist to employers providing
employment-based retiree health coverage, including
administrative burden, the cost of prescription drugs, and
the increasing overall health care costs.
(6) Whether--
(A) employment-based retiree health coverage has changed
because of the implementation of the MedicareAdvantage and
medicare fee-for-service programs under the amendments made
by this Act;
(B) such coverage continues to maintain the employment-
based retiree health benefit packages that were available
prior to the implementation of such programs;
(C) employers conduct health fairs or provide other
educational opportunities for their retirees to encourage
retirees to obtain coverage under MedicareAdvantage or other
prescription drug plans that are available; and
(D) employers offer retirees financial incentive to obtain
coverage under MedicareAdvantage or other prescription drug
plans, including premium subsidies.
(7) Whether the availability of MedicareAdvantage and
medicare fee-for-service prescription drug coverage acts as
an incentive to employers that did not previously offer
employment-based retiree health coverage to offer such
coverage to retirees.
(8) Whether other tools are used by employers to help
future employees afford health benefits and prescription drug
coverage once such employees reach retirement age.
(b) Information.--In conducting the study under subsection
(a), the Comptroller General shall determine the effect of
the amendments made by this Act on the provision of
employment-based retiree health coverage using information
available for the period--
(1) beginning on the date of enactment of this Act and
ending on January 1, 2005; and
(2) beginning on January 1, 2006 and ending on January 1,
2007.
(c) Report.--Not later than July 1, 2007, the Comptroller
General shall submit to the Secretary and the appropriate
committees of Congress a report based on the study conducted
under subsection (a).
______

SA 1131. Mr. KYL submitted an amendment intended to be proposed by
him to the bill S. 1, to amend title XVIII of the Social Security Act
to provide for a voluntary prescription drug benefit under the Medicare
program and to strengthen and improve 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. __. USE OF DATA COLLECTED BY ORGANIZATIONS AND ENTITIES
IN DETERMINING PRACTICE EXPENSE RELATIVE
VALUES.

(a) In General.--The Secretary shall revise the regulation
promulgated under section 212 of the Medicare, Medicaid, and
SCHIP Balanced Budget Refinement Act of 1999 (113 Stat.
1501A-350) so that, in determining the practice expense
component under section 1848(c)(2)(C)(ii) of the Social
Security Act (42 U.S.C. 1395w-4(c)(2)(C)(ii)) for purposes of
determining relative values for payment for physicians'
services under the fee schedule under section 1848 of such
Act (42 U.S.C. 1395w-4), the Secretary recognizes all costs
of clinical staff employed by cardio-thoracic surgeons (net
of any reimbursements for staff for whom there is direct
reimbursement under part B of such Act (42 U.S.C. 1395j et
seq.)), regardless of the site at which such costs are
incurred and notwithstanding any other provision of law or
regulation. For purposes of revising such regulation, the
Secretary shall use validated data collected by organizations
and entities (other than the Department of Health and Human
Services) on all costs incurred by physicians, including data
from the Socioeconomic Monitoring System of the American
Medical Association and from supplemental surveys accepted by
the Department of Health and Human Services as consistent
with sound data practices prior to the date of enactment of
this Act.
(b) Effective Date.--The regulation revised under
subsection (a) shall apply with respect to payments for
physicians' services furnished on and after January 1, 2004.
______

SA 1132. Mr. SANTORUM proposed an amendment to the bill S. 1, to
amend title XVIII of the Social Security Act to provide for a voluntary
prescription drug benefit under the Medicare program and to strengthen
and improve the Medicare program and for other purposes; as follows:

On page 343, between lines 15 and 16, insert the following:
``(f) Zero Premium Stop-Loss Protection and Access to
Negotiated Prices For Eligible Beneficiaries Enrolled in
MedicareAdvantage Plans.--
``(1) In general.--Notwithstanding any provision of this
part or part D, a MedicareAdvantage plan shall be treated as
meeting the requirements of this section if, in lieu of the
qualified prescription drug coverage otherwise required, the
plan makes available such coverage with the following
modifications:
``(A) No premium.--Notwithstanding subsection (d) or
sections 1860D-13(e)(2) and 1860D-17, the amount of the
MedicareAdvantage monthly beneficiary obligation for
qualified prescription drug coverage 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), except that
in applying such subsection, `$__' shall be substituted for
`$3,700' in subparagraph (B)(i)(I) of such subsection.
``(iii) The coverage provides access to negotiated prices
under subsection (e) of such section during the entire year.
``(C) Application of low-income subsidies.--Notwithstanding
subsection (f) or 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) Penalty for enrolling in a zero premium stop-loss
protection plans after initial eligibility for such
enrollment.--In the case of an eligible beneficiary that
enrolled in a plan offered pursuant to this subsection at any
time after the initial enrollment period described in section
1860D-2, the Secretary shall establish procedures for
imposing a monthly beneficiary obligation for enrollment
under such plan. The amount of such obligation shall be an
amount that the Administrator determines is actuarially sound
for each full 12-month period (in the same continuous period
of eligibility) in which the eligible beneficiary could have
been enrolled under such a plan but was not so enrolled. The
provisions of subsection (b) of such section shall apply to
the penalty under this paragraph in a manner that is similar
to the manner such provisions apply to the penalty under part
D.
``(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 or part D to the extent
necessary to carry out this subsection.
``(4) No effect on medicare drug plans.--This subsection
shall have no effect on eligible beneficiaries enrolled under
part D in a Medicare Prescription Drug plan or under a
contract under section 1860D-13(e).''
______

SA 1133. Mr. GRASSLEY (for himself and Mr. Baucus) proposed an
amendment to the bill S. 1, to amend title XVIII of the Social Security
Act to provide for a voluntary prescription drug benefit under the
Medicare program and to strengthen and improve the Medicare program,
and for other purposes; as follows:
On page 8, line 12, insert ``(including syringes, and
necessary medical supplies associated with the administration
of insulin, as defined by the Administrator)'' before the
semicolon.
On page 46, line 9, after the end period insert: ``Such
requirement shall not apply to

[[Page S8797]]

enrollees of a Medicare Prescription Drug plan who are
enrolled in the plan pursuant to a contractual agreement
between the plan and an employer or other group health plan
that provides employment-based retiree health coverage (as
defined in section 1860D-20(d)(4)(B)) if the premium amount
is the same for all such enrollees under such agreement.''
On page 51, line 19, insert ``(but only with respect to the
percentage of such costs that the individual is responsible
for under that section)'' after ``1860D-19''.
On page 56, strike lines 3 through 19, and insert the
following:
``(B) Medicaid related provisions.--Insofar as a State
elects to provide medical assistance under title XIX for a
drug based on the prices negotiated under a Medicare
Prescription Drug plan under this part--
``(i) the medical assistance for such a drug shall be
disregarded for purposes of a rebate agreement entered into
under section 1927 which would otherwise apply to the
provision of medical assistance for the drug under title XIX;
and
``(ii) the prices negotiated under a Medicare Prescription
Drug plan with respect to covered drugs, under a
MedicareAdvantage plan with respect to such drugs, or under a
qualified retiree prescription drug plan (as defined in
section 1860D-20(e)(4)) with respect to such drugs, on behalf
of eligible beneficiaries, 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).
On page 74, strike lines 14 through 16, and insert the
following:
the plan;
``(D) the average aggregate projected cost of covered drugs
under the plan relative to other Medicare Prescription Drug
plans and MedicareAdvantage plans; or
``(E) other factors determined appropriate by the
Administrator.
Beginning on page 88, strike lines 9 through page 89, line
10, and insert the following:
``(ii) Amounts resulting in actual costs.--With respect to
the total amount under clause (i) for the year--

``(I) the aggregate amount of payments made by the entity
to pharmacies and other entities with respect to such
coverage for such enrollees; and
``(II) the aggregate amount of discounts, direct or
indirect subsidies, rebates, or other price concessions or
direct or indirect remunerations made to the entity with
respect to such coverage for such enrollees.

``(B) Certain expenses not included.--The amount under
subparagraph (A)(i) may not include--
``(i) administrative expenses incurred in providing the
coverage described in subparagraph (A)(i);
``(ii) amounts expended on providing additional
prescription drug coverage pursuant to section 1860D-6(a)(2);
``(iii) amounts expended for which the entity is
subsequently provided with reinsurance payments under section
1860D-20; or
``(iv) discounts, direct or indirect subsidies, rebates, or
other price concessions or direct or indirect remunerations
made to the entity with respect to coverage described in
subparagraph (A)(i).
On page 78, beginning on line 20, strike ``An entity'' and
all that follows through line 24.
On page 84, line 6, strike ``(including a contract
under)''.
Beginning on page 92, strike line 20 through page 93, line
25, and insert the following:
``(3) Establishment of allowable costs.--For each year, the
Administrator shall establish the allowable costs for each
Medicare Prescription Drug plan for the year. The allowable
costs for a plan for a year shall be equal to the amount
described in paragraph (1)(A)(i) for the plan for the year.
On page 116, strike lines 11 and 12, and insert the
following:
``(ii) is eligible for medicare cost-sharing described in
section 1905(p)(3) under the State plan under title XIX (or
under a waiver of such plan), on the basis of being described
in section 1905(p)(1), as determined under such plan (or
under a waiver of plan); and
On page 117, strike lines 1 and 2, and insert the
following:
``(ii) is eligible for medicare cost-sharing described in
section 1905(p)(3)(A)(ii) under the State plan under title
XIX (or under a waiver of such plan), on the basis of being
described in section 1902(a)(10)(E)(iii), as determined under
such plan (or under a waiver of plan); and
On page 117, strike lines 14 through 17, and insert the
following:
``(ii) is eligible for medicare cost-sharing described in
section 1905(p)(3)(A)(ii) under the State plan under title
XIX (or under a waiver of such plan), on the basis of being
described in section 1902(a)(10)(E)(iv) (without regard to
any termination of the application of such section under
title XIX), as determined under such plan (or under a waiver
of such plan); and
On page 120, line 11, strike ``such individuals'' and
insert ``in the case of such an individual who is not a
resident of the 50 States or the District of Columbia, such
individual''.
Beginning on page 123, strike line 10 through page 124,
line 6, and insert the following:
``(B) Amounts resulting in actual costs.--With respect to
the total amount under subparagraph (A) for the year--
``(i) the aggregate amount of payments made by the entity
to pharmacies and other entities with respect to such
coverage for such enrollees; and
``(ii) the aggregate amount of discounts, direct or
indirect subsidies, rebates, or other price concessions or
direct or indirect remunerations made to the entity with
respect to such coverage for such enrollees.
``(2) Certain expenses not included.--The amount under
paragraph (1)(A) may not include--
``(A) administrative expenses incurred in providing the
coverage described in paragraph (1)(A);
``(B) amounts expended on providing additional prescription
drug coverage pursuant to section 1860D-6(a)(2); or
``(C) discounts, direct or indirect subsidies, rebates, or
other price concessions or direct or indirect remunerations
made to the entity with respect to coverage described in
paragraph (1)(A).
On page 124, on line 15, insert ``(or 65 percent with
respect to a qualifying covered individual described in
subsection (e)(2)(D))'' after ``80 percent''.
Beginning on page 124, strike line 18 through page 125,
line 13, and insert the following:
``(2) Establishment of allowable costs.--In the case of a
qualifying entity that has incurred costs described in
subsection (b)(1)(A) with respect to a qualifying covered
individual for a coverage year, the Administrator shall
establish the allowable costs for the individual and year.
Such allowable costs shall be equal to the amount described
in such subsection for the individual and year.
Beginning on page 126, strike line 7 through page 127, line
9, and insert the following:
``(2) Qualifying covered individual.--The term `qualifying
covered individual' means an individual who--
``(A) is enrolled in this part and in a Medicare
Prescription Drug plan;
``(B) is enrolled in this part and in a MedicareAdvantage
plan (except for an MSA plan or a private fee-for-service
plan that does not provide qualified prescription drug
coverage);
``(C) is eligible for, but not enrolled in, the program
under this part, and is covered under a qualified retiree
prescription drug plan; or
``(D) is eligible for, but not enrolled in, the program
under this part, and is covered under a qualified State
pharmaceutical assistance program.
``(3) Qualifying entity.--The term `qualifying entity'
means any of the following that has entered into an agreement
with the Administrator to provide the Administrator with such
information as may be required to carry out this section:
``(A) An eligible entity offering a Medicare Prescription
Drug plan under this part.
``(B) A MedicareAdvantage organization offering a
MedicareAdvantage plan under part C (except for an MSA plan
or a private fee-for-service plan that does not provide
qualified prescription drug coverage).
``(C) The sponsor of a qualified retiree prescription drug
plan.
``(D) A State offering a qualified State pharmaceutical
assistance program.

On page 127, beginning with line 18, strike all through
page 128, line 2, and insert:
``(i) Attestation of actuarial value of coverage.--The
sponsor of the plan shall, annually or at such other time as
the Administrator may require, provide the Administrator an
attestation, in accordance with the procedures established
under section 1860D-6(f), that the actuarial value of
prescription drug coverage under the plan is at least equal
to the actuarial value of standard prescription drug
coverage.
``(ii) Audits.--The sponsor of the plan, or an
administrator of the plan designated by the sponsor, shall
maintain (and afford the Administrator access to) such
records as the Administrator may require for purposes of
audits and other oversight activities necessary to ensure the
adequacy of prescription drug coverage and the accuracy of
payments made under this part to and by the plan.
On page 128, between lines 12 and 13, insert the following:
``(6) Qualified State pharmaceutical assistance program.--
``(A) In general.--The term `qualified State pharmaceutical
assistance program' means a State pharmaceutical assistance
program if, with respect to a qualifying covered individual
who is covered under the program, the following requirements
are met:
``(i) Assurance.--The State offering the program shall,
annually or at such other times as the Administrator may
require, provide the Administrator an attestation that, in
accordance with the procedures established under section
1860D-6(f), that--

``(I) the actuarial value of prescription drug coverage
under the program is at least equal to the actuarial value of
standard prescription drug coverage; and
``(II) the actuarial value of subsidies to individuals
provided under the program are at least equal to the
actuarial value of the subsidies that would apply under
section 1860D-19 if the individual was enrolled under this
part rather than under the program.

``(ii) Disclosure of information.--The State complies with
the requirements described in clauses (i) and (ii) of section
1860D-16(b)(7)(A).
``(B) State pharmaceutical assistance program.--For
purposes of subparagraph (A), the term `State pharmaceutical
assistance program' means a program--

[[Page S8798]]

``(i) that is in operation as of the date of enactment of
the Prescription Drug and Medicare Improvement Act of 2003;
``(ii) that is sponsored and financed by a State; and
``(iii) that provides coverage for outpatient drugs for
individuals in the State who meet income- and resource-
related qualifications specified under such program.
On page 128, between lines 15 and 16, insert the following:
``(g) Distribution of Reinsurance Payment Amounts.--
``(1) In general.--Any sponsor meeting the requirements of
subsection (e)(3) with respect to a quarter in a calendar
year, but which is not an employer, shall distribute the
reinsurance payments received for such quarter under
subsection (c) to the employers contributing to the qualified
retiree prescription drug plan maintained by such sponsor
during that quarter, in the manner described in paragraphs
(2) and (3).
``(2) Allocation.--The reinsurance payments to be
distributed pursuant to paragraph (1) shall be allocated
proportionally among all employers who contribute to the plan
during the quarter with respect to which the payments are
received. The share allocated to each employer contributing
to the plan during a quarter shall be determined by
multiplying the total reinsurance payments received by the
sponsor for the quarter by a fraction, the numerator of which
is the total contributions made by an employer for that
quarter, and the denominator of which is the total
contributions required to be made to the plan by all
employers for that quarter. Any share allocated to an
employer required to contribute for a quarter who does not
make the contributions required for that quarter on or before
the date due shall be retained by the sponsor for the benefit
of the plan as a whole.
``(3) Timing.--Reinsurance payments required to be
distributed to employers pursuant to this subsection shall be
distributed as soon as practicable after received by the
sponsor, but in no event later than the end of the quarter
immediately following the quarter in which such reinsurance
payments are received by the sponsor.
``(4) Regulations.--The Secretary shall promulgate
regulations providing that any sponsor subject to the
requirements of this subsection who fails to meet such
requirements shall not be eligible for a payment under this
section.
On page 130, between lines 7 and 8, insert the following:

``direct subsidies for qualified state offering a state pharmaceutical
assistance program for program enrollees eligible for, but not enrolled
in, this part

``Sec. 1860D-22. (a) Direct Subsidy.--
``(1) In general.--The Administrator shall provide for the
payment to a State offering a qualified State pharmaceutical
assistance program (as defined in section 1860D-20(e)(6)) for
each qualifying covered individual (described in subparagraph
(D) of section 1860D-(e)(2)) enrolled in the program for each
month for which such individual is so enrolled.
``(2) Amount of payment.--
``(A) In general.--The amount of the payment under
paragraph (1) shall be an amount equal to the amount of
payment for the area and year made under section 1860D-
21(a)(2).
``(b) Additional Subsidy.--
``(1) In general.--The Administrator shall provide for the
payment to a State offering a qualified State pharmaceutical
program (as defined in section 1860D-20(e)(6)) for each
applicable low-income individual enrolled in the program for
each month for which such individual is so enrolled.
``(2) Amount of payment.--
``(A) In general.--The amount of the payment under
paragraph (1) shall be the amount the Administrator estimates
would have been made to an entity or organization under
section 1860D-19 with respect to the applicable low-income
individual if such individual was enrolled in this part and
under a Medicare Prescription Drug plan or a
MedicareAdvantage plan.
``(B) Maximum payments.--In no case may the amount of the
payment determined under subparagraph (A) with respect to an
applicable low-income individual exceed, as estimated by the
Administrator, the average amounts made in a year under
section 1860D-19 on behalf of an eligible beneficiary
enrolled under this part with income that is the same as the
income of the applicable low-income individual.
``(3) Applicable low-income individual.--For purposes of
this subsection, the term `applicable low-income individual'
means an individual who is both--
``(A) a qualifying covered individual (described in
subparagraph (D) of section 1860D-(e)(2)); and
``(B) a qualified medicare beneficiary, a specified low
income medicare beneficiary, or a subsidy-eligible
individual, as such terms are defined in section 1860D-
19(a)(4).
``(c) Payment Methods.--
``(1) In general.--Payments under this section shall be
based on such a method as the Administrator determines. The
Administrator may establish a payment method by which interim
payments of amounts under this section are made during a year
based on the Administrator's best estimate of amounts that
will be payable after obtaining all of the information.
``(2) Source of payments.--Payments under this section
shall be made from the Prescription Drug Account.
``(d) Construction.--Nothing in this section or section
1860D-20 shall effect the provisions of section 1860D-26(b).
On page 134, between lines 9 and 10, insert:
``(d) Waiver Authority.--The Secretary shall have authority
similar to the waiver authority under section 1857(i) to
facilitate the offering of Medicare Prescription Drug plans
by employer or other group health plans as part of
employment-based retiree health coverage (as defined in
section 1860D-20(d)(4)(B)), including the authority to
establish separate premium amounts for enrollees in a
Medicare Prescription Drug plan by reason of such coverage.''
On page 142, beginning on line 16, strike ``in a manner''
and all that follows through line 19 and insert a semicolon.
On page 143, beginning on line 15, strike ``in a manner''
and all that follows through line 18 and insert a semicolon.
On page 144, between lines 10 and 11, insert the following:
``(4) Screen and enroll individuals eligible for medicare
cost-sharing.--As part of making an eligibility determination
required under paragraph (1) or (2), screen an individual who
applies for such a determination for eligibility for medical
assistance for any medicare cost-sharing described in section
1905(p)(3) and, if the individual is eligible for any such
medicare cost-sharing, enroll the individual under the State
plan (or under a waiver of such plan).
On page 147, line 1, insert ``and notwithstanding section
1905(b),'' after ``(4)''.
On page 147, beginning on line 6, strike ``Secretary'' and
all that follows through ``paying'' on line 8, and insert
``Federal medical assistance percentage shall be''.
On page 147, line 8, strike ``of the'' and insert ``for''.
On page 147, strike lines 13 through 16, and insert the
following:
``(B) whose income is at least the income required for an
individual to be an eligible individual under section 1611
for purposes of the supplemental security income program (as
determined under section 1612), but does not exceed 100
percent of the poverty line (as defined in section
2110(c)(5)) applicable to a family of the size involved.,
On page 149, line 1, insert ``and notwithstanding section
1905(b),'' after ``(2)''.
On page 149, beginning on line 6, strike ``Secretary'' and
all that follows through ``paying'' on line 8, and insert
``Federal medical assistance percentage shall be''.
On page 149, line 8, strike ``of the'' and insert ``for''.
On page 151, line 9, strike ``$22,500,000'' and insert
``$37,500,000''.
On page 151, line 11, strike ``$30,000,000'' and insert
``$50,000,000''.
On page 152, strike lines 8 through 11, and insert the
following:
(2) Conforming amendments.--
(A) Section 1905(b) (42 U.S.C. 1396d(b)) is amended by
inserting ``and subsections (c)(1) and (d)(1) of section
1935'' after ``1933(d)''.
(B) Section 1108(f) (42 U.S.C. 1308(f)) is amended by
inserting ``and section 1935(e)(1)(B)'' after ``Subject to
subsection (g)''.
On page 157, line 17, strike ``and''.
On page 157, line 20, strike the period and insert ``;
and''.
On page 157, between lines 20 and 21, insert the following:
(C) by adding at the end the following:
``(3) Agreements to establish information and enrollment
sites at social security field offices.--
``(A) In general.--The Commissioner shall enter into an
agreement with each State operating a State plan under title
XIX (including under a waiver of such plan) to establish
information and enrollment sites within all the Social
Security field offices located in the State for purposes of--
``(i) the State determining the eligibility of individuals
residing in the State for medical assistance for payment of
the cost of medicare cost-sharing under the medicaid program
pursuant to sections 1902(a)(10)(E) and 1933, the
transitional prescription drug assistance card program under
section 1807A, or premium and cost-sharing subsidies under
section 1860D-19; and
``(ii) enrolling individuals who are determined eligible
for such medical assistance, program, or subsidies in the
State plan (or waiver), the transitional prescription drug
assistance card program under section 1807A, or the
appropriate category for premium and cost-sharing subsidies
under section 1860D-19.
``(B) Agreement terms.--The Secretary and the Commissioner
jointly shall develop terms for the State agreements required
under subparagraph (A) that shall specify the
responsibilities of the State and the Commissioner in the
establishment and operation of such sites.
``(C) Authorization of appropriations.--There are
authorized to be appropriated to the Commissioner, such sums
as may be necessary to carry out this paragraph.''.
On page 159, line 19, insert the following before the
closing quotation: ``As part of such review, the Commission
shall hold 3 field hearings in 2007.''.
On page 174, line 14, insert ``(including syringes, and
necessary medical supplies associated with the administration
of insulin, as defined by the Secretary)'' before the comma.
Beginning on page 195, strike line 16 through page 196,
line 7, and insert the following:
``(A) Patient may request a written prescription.--The
standards provide that--

[[Page S8799]]

``(i) a prescription shall be written and not transmitted
electronically if the patient makes such a request; and
``(ii) no additional charges may be imposed on the patient
for making such a request.
On page 199, strike lines 10 through 14, and insert the
following:
``(A) In general.--Individuals or entities that transmit or
receive prescriptions electronically shall comply with the
standards adopted or modified under this part.
On page 200, between lines 16 and 17, insert the following:
``(e) No Requirement to Transmit or Receive Prescriptions
Electronically.--Nothing in this part shall be construed to
require an individual or entity to transmit or receive
prescriptions electronically.
On page 254, line 25, insert ``(other than deemed contracts
or agreements under subsection (j)(6))'' before ``with a
sufficient number''.
On page 255, line 7, before the period, insert the
following: ``, except that, if a plan entirely meets such
requirement with respect to a category of health care
professional or provider on the basis of subparagraph (B), it
may provide for a higher beneficiary copayment in the case of
health care professionals and providers of that category who
do not have contracts or agreements (other than deemed
contracts or agreements under subsection (j)(6)) to provide
covered services under the terms of the plan''.
On page 297, strike lines 5 through 9, and insert the
following:
``(iv) For 2002, 2003, and 2004, 102 percent of the annual
Medicare+Choice capitation rate under this paragraph for the
area for the previous year.
``(v) For 2005, 103 percent of the annual Medicare+Choice
capitation rate under this paragraph for the area for 2003.
``(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, except that
such rate shall be determined by substituting `102' for `103'
in clause (v).
On page 323, strike lines 1 through 3, and insert the
following:
``(B) Exception.--The Secretary shall not review, approve,
or disapprove the amounts submitted under paragraph (3), or,
with respect to a private fee-for-service plan (as described
in section 1851(a)(2)(C)) under subparagraph (A)(i),
(A)(ii)(III), or (B) of paragraph (2).
On page 326, line 11, after the end period insert:
``Subject to the provisions of section 1858(h), such
requirement shall not apply to enrollees of a
MedicareAdvantage plan who are enrolled in the plan pursuant
to a contractual agreement between the plan and an employer
or other group health plan that provides employment-based
retiree health coverage (as defined in section 1860D-
20(d)(4)(B)) if the premium amount is the same for all such
enrollees under such agreement.''.
On page 328, line 3, strike ``or (C)''.
On page 328, line 20, strike ``or (C)''.
On page 343, strike lines 22 through 24, and insert:
Section 1858(h) (as added by section 211) is amended--
(1) by inserting ``(including subsection (i) of such
section)'' after ``section 1857''; and
(2) by adding at the end the following new sentence: ``In
applying the authority under section 1857(i) pursuant to this
subsection, the Administrator may permit MedicareAdvantage
plans to establish separate premium amounts for enrollees in
an employer or other group health plan that provides
employment-based retiree health coverage (as defined in
section 1860D-20(d)(4)(B)).''
On page 349, between lines 4 and 5, insert the following:
(3) 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, 2003, and 2004, 102 percent of the annual
Medicare+Choice capitation rate under this paragraph for the
area for the previous year.
``(v) For 2005, 103 percent of the annual Medicare+Choice
capitation rate under this paragraph for the area for 2003.
``(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, except that
such rate shall be determined by substituting `102' for `103'
in clause (v).''.
On page 379, strike lines 9 through 13, and insert:
``(A) In general.--The term `specialized Medicare+Choice
plans for special needs beneficiaries' means a
Medicare+Choice plan that--
``(i) exclusively serves special needs beneficiaries (as
defined in subparagraph (B)), or
``(ii) to the extent provided in regulations prescribed by
the Secretary, disproportionately serves such special needs
beneficiaries, frail elderly medicare beneficiaries, or both.
Beginning on page 411, strike line 5 through page 414, line
9, 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
applicable for all hospitals in the previous fiscal year)
increased by the applicable percentage increase under
subsection (b)(3)(B)(i) for the fiscal year involved.''.
(b) Application to Subsection (d) Puerto Rico Hospitals.--
Section 1886(d)(9) (42 U.S.C. 1395ww(d)(9)) is amended--
(1) in subparagraph (A)--
(A) in clause (i), by striking ``and'' after the comma at
the end;
(B) in clause (ii)--
(i) in the matter preceding subclause (I), by inserting
``and before October 1, 2003'' after ``October 1, 1997''; and
(ii) in the matter following clause (III), by striking the
period at the end and inserting ``, and''; and
(iii) by adding at the end the following new clause:
``(iii) for discharges in a fiscal year beginning on or
after October 1, 2003, 50 percent of the national
standardized rate (determined under paragraph (3)(D)(iii))
for hospitals located in any area.'';
(2) in subparagraph (C)--
(A) in clause (i)--
(i) by striking ``(i) The Secretary'' and inserting
``(i)(I) For discharges in a fiscal year after fiscal year
1988 and before fiscal year 2004, the Secretary; and
(ii) by adding at the end the following:
``(II) For discharges in fiscal year 2004, the Secretary
shall compute an average standardized amount for hospitals
located in any area of Puerto Rico that is equal to the
average standardized amount computed under subclause (I) for
fiscal year 2003 for hospitals in an urban area, increased by
the applicable percentage increase under subsection (b)(3)(B)
for fiscal year 2004.
``(III) For discharges in a fiscal year after fiscal year
2004, the Secretary shall compute an average standardized
amount for hospitals located in any are of Puerto Rico that
is equal to the average standardized amount computed under
subclause (II) or this subclause for the previous fiscal
year, increased by the applicable percentage increase under
subsection (b)(3)(B), adjusted to reflect the most recent
case mix data.'';
(B) in clause (ii), by inserting ``(or for fiscal year 2004
and thereafter, the standardized amount)'' after ``each of
the average standardized amounts''; and
(C) in clause (iii)(I), by striking ``for hospitals located
in an urban or rural area, respectively''.
(c) 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
(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,''.
On page 430, strike lines 19 through 21, and insert the
following:
(b) Permitting Nurse Practitioners, Physician Assistants,
and Clinical Nurse Specialist to Review Hospice Plans of
Care.--Section 1814(a)(7)(B) is amended by inserting ``(or by
a physician assistant, nurse practitioner or clinical nurse
specialist who is not an employee of the hospice program, and
whom the individual identifies as the health care provider
having the most significant role in the determination and
delivery of medical care to the individual at the time the
individual makes an election to receive hospice care)'' after
``and is periodically reviewed by the individual's attending
physician''.

[[Page S8800]]

(c) Effective Date.--The amendments made by this section
shall apply to hospice care furnished on or after October 1,
2004.
On page 438, between lines 10 and 11, insert the following:

SEC. 414. REVISION OF THE INDIRECT MEDICAL EDUCATION (IME)
ADJUSTMENT PERCENTAGE.

(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'' after the
semicolon at the end;
(2) in subclause (VII)--
(A) by striking ``on or after October 1, 2002'' and
inserting ``during fiscal year 2003''; and
(B) by striking the period at the end and inserting a
semicolon; and
(3) by adding at the end the following new subclauses:
``(VIII) during each of fiscal years 2004 and 2005, `c' is
equal to 1.36; and
``(IX) on or after October 1, 2005, `c' is equal to
1.355.''.
(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''.
(c) Effective Date.--The amendments made by this section
shall apply to discharges occurring on or after October 1,
2003.

SEC. 415. CALCULATION OF WAGE INDICES FOR HOSPITALS.

(a) In General.--Notwithstanding any other provision of
law, in the calculation of a wage index in a State for
purposes of making payments for discharge waive such other
criteria for re-classification as deemed appropriate by the
Secretary.

SEC. 416. CONFORMING CHANGES REGARDING FEDERALLY QUALIFIED
HEALTH CENTERS.

Section 1833(a)(3) (42 U.S.C. 1395l(a)(3)) is amended by
inserting ``(which regulations shall exclude any cost
incurred for the provision of services pursuant to a contract
with an eligible entity (as defined in section 1860D(4))
operating a Medicare Prescription Drug plan or with an entity
with a contract under section 1860D-13(e), for which payment
is made by the entity)'' after ``the Secretary may prescribe
in regulations''.

SEC. 417. INCREASE FOR HOSPITALS WITH DISPROPORTIONATE
INDIGENT CARE REVENUES.

(a) Disproportionate Share Adjustment Percentage.--Section
1886(d)(5)(F)(iii) (42 U.S.C. 1395ww(d)(5)(F)(iii)) is
amended by striking ``35 percent'' and inserting ``35 percent
(or, for discharges occurring on or after October 1, 2003, 40
percent)''.
(b) Capital Costs.--Section 1886(g)(1)(B) (42 U.S.C.
1395ww(g)(1)(B)) is amended--
(1) in clause (iii), by striking ``and'' at the end;
(2) in clause (iv), by striking the period at the end and
inserting ``, and''; and
(3) by adding at the end the following new clause:
``(v) in the case of cost reporting periods beginning on or
after October 1, 2003, shall provide for a disproportionate
share adjustment in the same manner as section
1886(d)(5)(F)(iii).''.

SEC. 418. TREATMENT OF GRANDFATHERED LONG-TERM CARE
HOSPITALS.

(a) In General.--The last sentence of section 1886(d)(1)(B)
is amended by inserting ``, and the Secretary may not impose
any special conditions on the operation, size, number of
beds, or location of any hospital so classified for continued
participation under this title or title XIX or for continued
classification as a hospital described in clause (iv)''
before the period at the end.
(b) Treatment of Proposed Revision.--The Secretary shall
not adopt the proposed revision to section 412.22(f) of title
42, Code of Federal Regulations contained in 68 Federal
Register 27154 (May 19, 2003) or any revision reaching the
same or substantially the same result as such revision.
(c) Effective Date.--The amendment made by, and provisions
of, this section shall apply to cost reporting periods ending
on or after December 31, 2002.
On page 440, line 2, insert closing quotation marks and a
period after the period at the end.
Beginning on page 441, strike line 19 and all that follows
through page 442, line 2.
Beginning on page 445, strike line 5 and all that follows
through page 446, line 6, and insert the following:

SEC. 426. TEMPORARY INCREASE FOR GROUND AMBULANCE SERVICES.

Section 1834(l) (42 U.S.C. 1395m(l)), as amended by section
405(b)(2), is amended by adding at the end the following new
paragraphs:
``(10) Temporary increase for ground ambulance services.--
``(A) In general.--Notwithstanding any other provision of
this subsection, in the case of ground ambulance services
furnished on or after January 1, 2005, and before January 1,
2008, for which the transportation originates in--
``(i) a rural area described in paragraph (9) or in a rural
census tract described in such paragraph, the fee schedule
established under this section shall provide that the rate
for the service otherwise established, after application of
any increase under such paragraph, shall be increased by 5
percent; and
``(ii) an area not described in clause (i), the fee
schedule established under this section shall provide that
the rate for the service otherwise established shall be
increased by 2 percent.
``(B) Application of increased payments after 2007.--The
increased payments under subparagraph (A) shall not be taken
into account in calculating payments for services furnished
on or after the period specified in such subparagraph.
``(11) Conversion factor adjustments.--The Secretary shall
not adjust downward the conversion factor in any year because
of an evaluation of the prior year conversion factor.''.
Beginning on page 470, strike line 21 and all that follows
through page 471, line 13, and insert the following:
``(B) Subject to subparagraph (E), in the case of dialysis
services furnished in 2005, the composite rate for such
services shall be an amount equal to the composite rate
established under subparagraph (A), increased by 0.05 percent
and further increased by 1.6 percent.
``(C) Subject to subparagraph (E), in the case of dialysis
services furnished in 2006, the composite rate for such
services shall be an amount equal to the composite rate
established under subparagraph (B), increased by 0.05 percent
and further increased by 1.6 percent.
``(D) Subject to subparagraph (E), in the case of dialysis
services furnished in 2007 and all subsequent years, the
composite rate for such services shall be an amount equal to
the composite rate established under this paragraph for the
previous year, increased by 0.05 percent.
On page 486, line 3, insert ``and'' after the semicolon at
the end.
On page 486, line 4, insert ``(I)'' after ``(ii)''.
On page 486, line 8, strike ``and'' and insert ``or''.
On page 486, line 9, strike ``(iii)'' and insert ``(II)''.
On page 488, after line 25, add the following:
(c) Limitation of Expenditures in Years Prior to 2014.--
(1) In general.--The Secretary shall ensure that the total
amount of expenditures under title XVIII of the Social
Security Act (including amounts expended by reason of this
section) in a year prior to 2014 does not exceed the sum of--
(A) the total amount of expenditures under such title XVIII
that would have made if this section had not been enacted;
and
(B) the applicable amount.
(2) Applicable amount.--For purposes of paragraph (1), the
term ``applicable amount'' means--
(A) for 2005, $32,000,000;
(B) for 2006, $34,000,000;
(C) for 2007, $36,000,000;
(D) for 2008, $38,000,000;
(E) for 2009, $40,000,000;
(F) for 2010, $42,000,000;
(G) for 2011, $44,000,000;
(H) for 2012, $48,000,000; and
(I) for 2013, $50,000,000.
(3) Steps to ensure funding limitation not violated.--If
the Secretary determines that the application of this section
will result in the funding limitation described in paragraph
(1) being violated for any year, the Secretary shall take
appropriate steps to stay within such funding limitation,
including through limiting the number of clinical trials
deemed under subsection (a) and only covering a portion of
the routine costs described in such subsection.
On page 516, after line 22, add the following:

SEC. 446. AUTHORIZATION OF REIMBURSEMENT FOR ALL MEDICARE
PART B SERVICES FURNISHED BY CERTAIN INDIAN
HOSPITALS AND CLINICS.

(a) In General.--Section 1880(e) (42 U.S.C. 1395qq(e)) is
amended--
(1) in paragraph (1)(A), by striking ``for services
described in paragraph (2)'' and inserting ``for all items
and services for which payment may be made under such part'';
(2) by striking paragraph (2); and
(3) by redesignating paragraph (3) as paragraph (2).
(b) Effective Date.--The amendments made by this section
shall apply to items and services furnished on or after
October 1, 2004.

SEC. 447. COVERAGE OF CARDIOVASCULAR SCREENING TESTS.

(a) Coverage.--Section 1861(s)(2) of the Social Security
Act (42 U.S.C. 1395x(s)(2)) is amended--
(1) in subparagraph (U), by striking ``and'' at the end;
(2) in subparagraph (V)(iii), by inserting ``and'' at the
end; and
(3) by adding at the end the following new subparagraph:
``(W) cardiovascular screening tests (as defined in
subsection (ww)(1));''.
(b) Services Described.--Section 1861 of the Social
Security Act (42 U.S.C. 1395x) is amended by adding at the
end the following new subsection:

``Cardiovascular Screening Tests

``(ww)(1) The term `cardiovascular screening tests' means
the following diagnostic tests for the early detection of
cardiovascular disease:
``(A) Tests for the determination of cholesterol levels.
``(B) Tests for the determination of lipid levels of the
blood.
``(C) Such other tests for cardiovascular disease as the
Secretary may approve.

[[Page S8801]]

``(2)(A) Subject to subparagraph (B), the Secretary shall
establish standards, in consultation with appropriate
organizations, regarding the frequency and type of
cardiovascular screening tests.
``(B) With respect to the frequency of cardiovascular
screening tests approved by the Secretary under subparagraph
(A), in no case may the frequency of such tests be more often
than once every 2 years.''.
(c) Frequency.--Section 1862(a)(1) of the Social Security
Act (42 U.S.C. 1395y(a)(1)) is amended--
(1) by striking ``and'' at the end of subparagraph (H);
(2) by striking the semicolon at the end of subparagraph
(I) and inserting ``, and''; and
(3) by adding at the end the following new subparagraph:
``(J) in the case of a cardiovascular screening test (as
defined in section 1861(ww)(1)), which is performed more
frequently than is covered under section 1861(ww)(2).''.
(d) Effective Date.--The amendments made by this section
shall apply to tests furnished on or after January 1, 2005.

SEC. 448. 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.

SEC. 449. EXTENSION OF MEDICARE SECONDARY PAYER RULES FOR
INDIVIDUALS WITH END-STAGE RENAL DISEASE.

Section 1862(b)(1)(C) (42 U.S.C. 1395y(b)(1)(C)) is
amended--
(1) in the last sentence, by inserting ``, and before
January 1, 2004'' after ``prior to such date)''; and
(2) by adding at the end the following new sentence:
``Effective for items and services furnished on or after
January 1, 2004 (with respect to periods beginning on or
after June 1, 2002), clauses (i) and (ii) shall be applied by
substituting `36-month' for `12-month' each place it appears
in the first sentence.

SEC. 450. REQUIRING THE INTERNAL REVENUE SERVICE TO DEPOSIT
INSTALLMENT AGREEMENT AND OTHER FEES IN THE
TREASURY AS MISCELLANEOUS RECEIPTS.

Notwithstanding any other provision of law, the Secretary
of the Treasury is required to deposit in the Treasury as
miscellaneous receipts any fee receipts, including fees from
installment agreements and restructured installment
agreements, collected under the authority provided by Section
3 of the Administrative Provisions of the Internal Revenue
Service of Public Law 103-329, the Treasury, Postal Service
and General Government Appropriations Act, 1995. Fees
collected under this section shall be available for use by
the Internal Revenue Service only to the extent that such
authority is provided in advance in an appropriations Act.

SEC. 450A. 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.).

SEC. 450B. DEMONSTRATION PROJECT FOR COVERAGE OF SURGICAL
FIRST ASSISTING SERVICES OF CERTIFIED
REGISTERED NURSE FIRST ASSISTANTS.

(a) Demonstration Project.--The Secretary shall conduct a
demonstration project under part B of title XVIII of the
Social Security Act under which payment is made for surgical
first assisting services furnished by a certified registered
nurse first assistant to medicare beneficiaries.
(b) Definitions.--In this section:
(1) Surgical First Assisting Services.--The term ``surgical
first assisting services'' means services consisting of first
assisting a physician with surgery and related preoperative,
intraoperative, and postoperative care (as determined by the
Secretary) furnished by a certified registered nurse first
assistant (as defined in paragraph (2)) which the certified
registered nurse first assistant is legally authorized to
perform by the State in which the services are performed.
(2) Certified Registered Nurse First Assistant.--The term
``certified registered nurse first assistant'' means an
individual who--
(A) is a registered nurse and is licensed to practice
nursing in the State in which the surgical first assisting
services are performed;
(B) has completed a minimum of 2,000 hours of first
assisting a physician with surgery and related preoperative,
intraoperative, and postoperative care; and
(C) is certified as a registered nurse first assistant by
an organization recognized by the Secretary.
(c) Payment Rates.--Payment under the demonstration project
for surgical first assisting services furnished by a
certified registered nurse first assistant shall be made at
the rate of 80 percent of the lesser of the actual charge for
the services or 85 percent of the amount determined under the
fee schedule established under section 1848(b) of the Social
Security Act (42 U.S.C. 1395w-4(b)) for the same services if
furnished by a physician.
(d) Demonstration Project Sites.--The project established
under this section shall be conducted in 5 States selected by
the Secretary.
(e) Duration.--The Secretary shall conduct the
demonstration project for the 3-year period beginning on the
date that is 90 days after the date of the enactment of this
Act.
(f) Report.--Not later than January 1, 2007, the Secretary
shall submit to Congress a report on the project. The report
shall include an evaluation of patient outcomes under the
project, as well as an analysis of the cost effectiveness of
the project.
(g) Funding.--
(1) In general.--The Secretary shall provide for the
transfer from the Federal Supplementary Insurance Trust Fund
established under section 1841 of the Social Security Act (42
U.S.C. 1395t) of such funds as are necessary for the costs of
carrying out the project under this section.
(2) Budget neutrality.--In conducting the project under
this section, the Secretary shall ensure that the aggregate
payments made by the Secretary do not exceed the amount which
the Secretary would have paid if the project under this
section was not implemented.
(i) Waiver Authority.--The Secretary shall waive compliance
with the requirements of title XVIII of the Social Security
Act to such extent and for such period as the Secretary
determines is necessary to conduct demonstration projects.

SEC. 450C. 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.''.

[[Page S8802]]

SEC. 450D. 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, 2006, 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 calendar year
2005, the amount determined under subclause (I) for 2004,
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 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.''.

SEC. 450E. DEMONSTRATION PROJECT TO EXAMINE WHAT WEIGHT LOSS
WEIGHT MANAGEMENT SERVICES CAN COST EFFECTIVELY
REACH THE SAME RESULT AS THE NIH DIABETES
PRIMARY PREVENTION TRIAL STUDY: A 50 PERCENT
REDUCTION IN THE RISK FOR TYPE 2 DIABETES FOR
INDIVIDUALS WHO HAVE IMPAIRED GLUCOSE TOLERANCE
AND ARE OBESE.

(a) In General.--Inasmuch as the NIH Diabetes Primary
Prevention Trial study proved that the risk of type 2
diabetes could be cut in half when the Institute of Medicine
definition of successful weight loss (5 percent weight loss
maintained for a year) is achieved by individuals at risk for
type 2 diabetes due to obesity and impaired glucose
tolerance, the Secretary shall conduct a demonstration
project to examine the cost effectiveness and health benefits
of providing group weight loss management services to achieve
the same result for beneficiaries under the medicare program
under title XVIII of the Social Security Act who are obese
and have impaired glucose tolerance.
(b) Limitation.--The cost of the group weight loss
management services provided under subsection (a) shall not
exceed the cost per recipient per year of the medical
nutritional therapy benefit currently available to medicare
beneficiaries.
(c) Scope of Services.--
(1) Duration.--The project shall be conducted for a period
of 2 fiscal years.
(2) Sites.--The Secretary shall designate the sites at
which to conduct the demonstration program under this
section. In selecting sites under this paragraph, the
Secretary shall give preference to sites located in--
(A) rural areas; or
(B) areas that have a high concentration of Native
Americans with type 2 diabetes.
(3) Funding.--
(A) In general.--Subject to subparagraph (B), the Secretary
shall provide for the transfer from the Federal Supplementary
Insurance Trust Fund established under section 1841 of such
Act (42 U.S.C. 1395t) of such funds as are necessary for the
costs of carrying out the demonstration program under this
section.
(B) Limitation.--The total amount of the payments that may
be made under this section shall not exceed $2,500,000 for
each fiscal year in which the project is conducted under
paragraph (1).
(d) Coverage as Medicare Part B Services.--
(1) In general.--Subject to the succeeding provisions of
this subsection, medical nutrition therapy services furnished
under the project shall be considered to be services covered
under part B of title XVIII of the Social Security Act (42
U.S.C. 1395j et seq.).
(2) Payment.--Payment for such services shall be made at a
rate of 80 percent of the lesser of the actual charge for the
services or 85 percent of the fee schedule amount provided
under section 1848 of the Social Security Act (42 U.S.C.
139w-4) for the same services if such services were furnished
by a physician.
(3) Application of limits of billing.--The provisions of
section 1842(b)(18) of the Social Security Act (42 U.S.C.
1395u(b)(18)) shall apply to a group weight loss management
professional furnishing services under the project in the
same manner as they to a practitioner described in
subparagraph (C) of such section furnishing services under
title XVIII of such Act.
(e) Reports.--The Secretary shall submit to the Committee
on Ways and Means and the Committee on Commerce of the House
of Representatives and the Committee on Finance of the Senate
interim reports on the project and a final report on the
project not later than the date that is 6 months after the
date on which the project concludes. The final report shall
include an evaluation of the impact of the use of group
weight loss management services as part of medical nutrition
therapy on medicare beneficiaries and on the medicare
program, including any impact on reducing costs under the
program and improving the health of beneficiaries.
(f) Definitions.--For purposes of this section:
(1) The term ``obesity'' means that an individual has a
Body Mass Index (BMI) of 30 and above.
(2) Group weight loss management services.--The term
``group weight loss management services'' means comprehensive
services furnished to individuals who have been diagnosed and
referred by a physician as having impaired glucose tolerance
and who are obese that consist of--
(A) assessment and treatment based on the needs of
individuals as determined by a group weight loss management
professional; or
(B) a specific program or method that has demonstrated its
efficacy to produce and maintain weight loss through results
published in peer-reviewed scientific journals using
recognized research methods and statistical analysis that
provides--
(i) assessment of current body weight and recording of
weight status at each meeting session;
(ii) provision of a healthy eating plan;
(iii) provision of an activity plan;
(iv) provision of a behavior modification plan; and
(v) a weekly group support meeting.
(3) Group weight loss management professional.--The term
``group weight loss management professional'' means an
individual who has completed training to provide a program or
method that has completed clinical trials and has
demonstrated its efficacy through publications in peer-
reviewed scientific journals who--
(A)(i) holds a baccalaureate or higher degree granted by a
regionally accredited college or university in the United
States (or an equivalent foreign degree) in nutrition social
work, psychology with experience in behavioral modification
methods to reduce obesity; or
(ii) has completed a curriculum of training for a specific
behavioral based weight management program as described in
section (4)(A)(2) and recommended in the NIH Clinical
Guidelines on Identification, Evaluation, and Treatment of
Overweight and Obesity in Adults, chapter 4, section H, parts
1, 2, 3, 4, and pursuant to guidelines by the Secretary; and
(B)(i) is licensed or certified as a group weight loss
management professional by the State in which the services
are performed; or
(ii) is certified by an organization that meets such
criteria as the Secretary establishes with--
(I) national organizations representing consumers such as
the American Obesity Association and the elderly; and
(II) such other organizations as the Secretary determines
appropriate.
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
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).

SEC. 456. MEDICARE SECONDARY PAYOR (MSP) PROVISIONS.

(a) Technical Amendment Concerning Secretary's Authority To
Make Conditional Payment When Certain Primary Plans Do Not
Pay Promptly.--

[[Page S8803]]

(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''.

SEC. 457. MEDICARE PANCREATIC ISLET CELL TRANSPLANT
DEMONSTRATION PROJECT.

(a) Establishment.--In order to test the appropriateness of
pancreatic islet cell transplantation, not later than 120
days after the date of the enactment of this Act, the
Secretary shall establish a demonstration project which the
Secretary, provides for payment under the medicare program
under title XVIII of the Social Security Act for pancreatic
islet cell transplantation and related items and services in
the case of medicare beneficiaries who have type I (juvenile)
diabetes and have end stage renal disease.
(b) Duration of Project.--The authority of the Secretary to
conduct the demonstration project under this section shall
terminate on the date that is 5 years after the date of the
establishment of the project.
(c) Evaluation and Report.--The Secretary shall conduct an
evaluation of the outcomes of the demonstration project. Not
later than 120 days after the date of the termination of the
demonstration project under subsection (b), the Secretary
shall submit to Congress a report on the project, including
recommendations for such legislative and administrative
action as the Secretary deems appropriate.
(d) Payment Methodology.--The Secretary shall establish an
appropriate payment methodology for the provision of items
and services under the demonstration project, which may
include a payment methodology that bundles, to the maximum
extent feasible, payment for all such items and services.

SEC. 458. INCREASE IN MEDICARE PAYMENT FOR CERTAIN HOME
HEALTH SERVICES.

(a) In General.--Section 1895 of the Social Security Act
(42 U.S.C. 1395fff) is amended by adding at the end the
following:
``(f) Increase in Payment for Services Furnished in a Rural
Area.--
``(1) In general.--In the case of home health services
furnished in a rural area (as defined in section
1886(d)(2)(D)) on or after October 1, 2004, and before
October 1, 2006, the Secretary shall increase the payment
amount otherwise made under this section for such services by
10 percent.
``(2) Waiver of budget neutrality.--The Secretary shall not
reduce the standard prospective payment amount (or amounts)
under this section applicable to home health services
furnished during any period to offset the increase in
payments resulting from the application of paragraph (1).''.
(b) Payment Adjustment.--Section 1895(b)(5) of the Social
Security Act (42 U.S. C. 1395fff(b)(5)) is amended by adding
at the end the following:``Notwithstanding this paragraph,
the total amount of the additional payments or payment
adjustments made under this paragraph may not exceed, with
respect to fiscal year 2004, 3 percent, and, with respect to
fiscal years 2005 and 2006, 4 percent, of the total payments
projected or estimated to be made based on the prospective
payment system under this subsection in the year involved.''.
(c) Effective Date.--The amendments made by this section
shall apply to services furnished on or after October 1,
2003.

SEC. 459. SENSE OF THE SENATE CONCERNING MEDICARE PAYMENT
UPDATE FOR PHYSICIANS AND OTHER HEALTH
PROFESSIONALS.

(a) Findings.--The Senate makes the following findings:
(1) The formula by which medicare payments are updated each
year for services furnished by physicians and other health
professionals is fundamentally flawed.
(2) The flawed physician payment update formula is causing
a continuing physician payment crisis, and, without
congressional action, medicare payment rates for physicians
and other practitioners are predicted to fall by 4.2 percent
in 2004.
(3) A physician payment cut in 2004 would the fifth cut
since 1991, and would be on top of a 5.4 percent cut in 2002,
with additional cuts estimated for 2005, 2006, and 2007. From
1991 through 2003, payment rates for physicians and health
professionals fell 14 percent behind practice cost inflation
as measured by medicare's own conservative estimates.
(4) The sustainable growth rate (SGR) expenditure target,
which is the basis for the physician payment update, is
linked to the gross domestic product and penalizes physicians
and other practitioners for volume increases that they cannot
control and that the government actively promotes through new
coverage decisions, quality improvement activities, and other
initiatives that, while beneficial to patients, are not
reflected in the SGR.
(b) Sense of the Senate.--It is the sense of the Senate
that medicare beneficiary access to quality care may be
compromised if Congress does not take action to prevent cuts
in 2004 and the following years that result from the SGR
formula.
On page 542, strike lines 18 through 23, and insert the
following:
``(D) Review entity defined.--For purposes of this
subsection, the term `review entity' means an entity of up to
3 qualified reviewers drawn from existing appeals levels
other than the redetermination level.''.
On page 569, between lines 3 and 4, insert the following:

SEC. 518. REVISIONS TO APPEALS TIMEFRAMES.

Section 1869 (42 U.S.C. 1395ff) is amended--
(1) in subsection (a)(3)(C)(ii), by striking ``30-day
period'' each place it appears and inserting ``60-day
period'';
(2) in subsection (c)(3)(C)(i), by striking ``30-day
period'' and inserting ``60-day period'';
(3) in subsection (d)(1)(A), by striking ``90-day period''
and inserting ``120-day period''; and
(4) in subsection (d)(2)(A), by striking ``90-day period''
and inserting ``120-day period''.

SEC. 519. ELIMINATION OF REQUIREMENT TO USE SOCIAL SECURITY
ADMINISTRATION ADMINISTRATIVE LAW JUDGES.

The first sentence of section 1869(f)(2)(A)(i) (42 U.S.C.
1395ff(f)(2)(A)(i)) is amended by striking ``of the Social
Security Administration''.

SEC. 520. ELIMINATION OF REQUIREMENT FOR DE NOVO REVIEW BY
THE DEPARTMENTAL APPEALS BOARD.

Section 1869(d)(2) (42 U.S.C. 1395ff(d)(2)) is amended to
read as follows:
``(2) Departmental appeals board review.--The Departmental
Appeals Board of the Department of Health and Human Services
shall conduct and conclude a review of the decision on a
hearing described in paragraph (1) and make a decision or
remand the case to the administrative law judge for
reconsideration by not later than the end of the 90-day
period beginning on the date a request for review has been
timely filed.''.
On page 595, strike lines 1 through 6.
On page 603, after line 25, insert the following:
(c) Authorization of Appropriations.--There are authorized
to be appropriated such sums as are necessary to carry out
section 1874A(f) of the Social Security Act, as added by
subsection (a).

[[Page S8804]]

On page 625, between lines 19 and 20, insert the following:

Subtitle F--Other Improvements

SEC. 551. INCLUSION OF ADDITIONAL INFORMATION IN NOTICES TO
BENEFICIARIES ABOUT SKILLED NURSING FACILITY
AND HOSPITAL BENEFITS.

(a) In General.--The Secretary shall provide that in
medicare beneficiary notices provided (under section 1806(a)
of the Social Security Act, 42 U.S.C. 1395b-7(a)) with
respect to the provision of post-hospital extended care
services and inpatient hospital services under part A of
title XVIII of the Social Security Act, there shall be
included information on the number of days of coverage of
such services remaining under such part for the medicare
beneficiary and spell of illness involved.
(b) Effective Date.--Subsection (a) shall apply to notices
provided during calendar quarters beginning more than 6
months after the date of enactment of this Act.

SEC. 552. INFORMATION ON MEDICARE-CERTIFIED SKILLED NURSING
FACILITIES IN HOSPITAL DISCHARGE PLANS.

(a) Availability of Data.--The Secretary shall publicly
provide information that enables hospital discharge planners,
medicare beneficiaries, and the public to identify skilled
nursing facilities that are participating in the medicare
program.
(b) Inclusion of Information in Certain Hospital Discharge
Plans.--
(1) In general.--Section 1861(ee)(2)(D) (42 U.S.C.
1395x(ee)(2)(D)) is amended--
(A) by striking ``hospice services'' and inserting
``hospice care and post-hospital extended care services'';
and
(B) by inserting before the period at the end the
following: ``and, in the case of individuals who are likely
to need post-hospital extended care services, the
availability of such services through facilities that
participate in the program under this title and that serve
the area in which the patient resides''.
(2) Effective date.--The amendments made by paragraph (1)
shall apply to discharge plans made on or after such date as
the Secretary shall specify, but not later than 6 months
after the date the Secretary provides for availability of
information under subsection (a).

SEC. 553. EVALUATION AND MANAGEMENT DOCUMENTATION GUIDELINES
CONSIDERATION.

The Secretary shall ensure, before making changes in
documentation guidelines for, or clinical examples of, or
codes to report evaluation and management physician services
under title XVIII of Social Security Act, that the process
used in developing such guidelines, examples, or codes was
widely consultative among physicians, reflects a broad
consensus among specialties, and would allow verification of
reported and furnished services.

SEC. 554. COUNCIL FOR TECHNOLOGY AND INNOVATION.

Section 1868 (42 U.S.C. 1395ee), as amended by section
534(a), is amended by adding at the end the following new
subsection:
``(c) Council for Technology and Innovation.--
``(1) Establishment.--The Secretary shall establish a
Council for Technology and Innovation within the Centers for
Medicare & Medicaid Services (in this section referred to as
`CMS').
``(2) Composition.--The Council shall be composed of senior
CMS staff and clinicians and shall be chaired by the
Executive Coordinator for Technology and Innovation
(appointed or designated under paragraph (4)).
``(3) Duties.--The Council shall coordinate the activities
of coverage, coding, and payment processes under this title
with respect to new technologies and procedures, including
new drug therapies, and shall coordinate the exchange of
information on new technologies between CMS and other
entities that make similar decisions.
``(4) Executive coordinator for technology and
innovation.--The Secretary shall appoint (or designate) a
noncareer appointee (as defined in section 3132(a)(7) of
title 5, United States Code) who shall serve as the Executive
Coordinator for Technology and Innovation. Such executive
coordinator shall report to the Administrator of CMS, shall
chair the Council, shall oversee the execution of its duties,
and shall serve as a single point of contact for outside
groups and entities regarding the coverage, coding, and
payment processes under this title.''.

SEC. 555. TREATMENT OF CERTAIN DENTAL CLAIMS.

(a) In General.--Section 1862 (42 U.S.C. 1395y) is amended
by adding after subsection (g) the following new subsection:
``(h)(1) Subject to paragraph (2), a group health plan (as
defined in subsection (a)(1)(A)(v)) providing supplemental or
secondary coverage to individuals also entitled to services
under this title shall not require a medicare claims
determination under this title for dental benefits
specifically excluded under subsection (a)(12) as a condition
of making a claims determination for such benefits under the
group health plan.
``(2) A group health plan may require a claims
determination under this title in cases involving or
appearing to involve inpatient dental hospital services or
dental services expressly covered under this title pursuant
to actions taken by the Secretary.''.
(b) Effective Date.--The amendment made by subsection (a)
shall take effect on the date that is 60 days after the date
of enactment of this Act.
On page 629, between lines 17 and 18, insert the following:
(d) Urban Health Provider Adjustment.--
(1) In general.--Beginning with fiscal year 2004,
notwithstanding section 1923(f) of the Social Security Act
(42 U.S.C. 1396r-4(f)) and subject to paragraph (3), with
respect to a State, payment adjustments made under title XIX
of the Social Security Act (42 U.S.C. 1396 et seq.) to a
hospital described in paragraph (2) shall be made without
regard to the DSH allotment limitation for the State
determined under section 1923(f) of that Act (42 U.S.C.
1396r-4(f)).
(2) Hospital described.--A hospital is described in this
paragraph if the hospital--
(A) is owned or operated by a State (as defined for
purposes of title XIX of the Social Security Act), or by an
instrumentality or a municipal governmental unit within a
State (as so defined) as of January 1, 2003; and
(B) is located in Marion County, Indiana.
(3) Limitation.--The payment adjustment described in
paragraph (1) for fiscal year 2004 and each fiscal year
thereafter shall not exceed 175 percent of the costs of
furnishing hospital services described in section
1923(g)(1)(A) of the Social Security Act (42 U.S.C. 1396r-
4(g)(1)(A)).
On page 633, after line 21, add the following:
(3) Application to hawaii.--Section 1923(f) (42 U.S.C.
1396r-4(f)), as amended by paragraph (1), is amended--
(A) by redesignating paragraph (7) as paragraph (8); and
(B) by inserting after paragraph (6), the following:
``(7) Treatment of hawaii as a low-dsh state.--The
Secretary shall compute a DSH allotment for the State of
Hawaii for each of fiscal years 2004 and 2005 in the same
manner as DSH allotments are determined with respect to those
States to which paragraph (5) applies (but without regard to
the requirement under such paragraph that total expenditures
under the State plan for disproportionate share hospital
adjustments for any fiscal year exceeds 0).''.
On page 676, after line 22, add the following:

SEC. 615. EMPLOYER FLEXIBILITY.

(a) Medicare.--Nothing in part D of title XVIII of the
Social Security Act, as added by section 101, shall be
construed as--
(1) preventing employment-based retiree health coverage (as
defined in section 1860D-20(e)(4)(B) of such Act, as so
added) from providing coverage that is supplemental to the
benefits provided under a Medicare Prescription Drug plan
under such part or a MedicareAdvantage plan under part C of
such title, as amended by this Act; or
(2) requiring employment-based retiree health coverage (as
so defined) that provides medical benefits to retired
participants who are not eligible for medical benefits under
title XVIII of the Social Security Act or under a plan
maintained by a State or an agency thereof to provide medical
benefits, or the same medical benefits, to retired
participants who are so eligible.
(b) ADEA.--
(1) In General.--Section 4(l) of the Age Discrimination in
Employment Act of 1967 (29 U.S.C. 623(l)) is amended by
adding at the end the following:
``(4) An employee benefit plan (as defined in section 3(3)
of the Employee Retirement Income Security Act of 1974 (29
U.S.C. 1002(3))) shall not be treated as violating subsection
(a), (b), (c), or (e) solely because the plan provides
medical benefits to retired participants who are not eligible
for medical benefits under title XVIII of the Social Security
Act (42 U.S.C. 1395 et seq.) or under a plan maintained by a
State or an agency thereof, but does not provide medical
benefits, or the same medical benefits, to retired
participants who are so eligible.''
(2) Effective date.--The amendment made by this subsection
shall apply as of the date of the enactment of this Act.

SEC. 616. 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.

SEC. 617. EXTENSION OF MORATORIUM.

(a) In General.--Section 6408(a)(3) of the Omnibus Budget
Reconciliation Act of 1989, as amended by section 13642 of
the Omnibus Budget Reconciliation Act of 1993 and section
4758 of the Balanced Budget Act of 1997, is amended--
(1) by striking ``until December 31, 2002'', and
(2) by striking ``Kent Community Hospital Complex in
Michigan or.''
(b) Effective Dates.--

[[Page S8805]]

(1) Permanent extension.--The amendment made by subsection
(a)(1) shall take effect as if included in the amendment made
by section 4758 of the Balanced Budget Act of 1997.
(2) Modification.--The amendment made by subsection (a)(2)
shall take effect on the date of enactment of this Act.

SEC. 618. GAO STUDY OF PHARMACEUTICAL PRICE CONTROLS AND
PATENT PROTECTIONS IN THE G-7 COUNTRIES.

(a) Study.--The Comptroller General of the United States
shall conduct a study of price controls imposed on
pharmaceuticals in France, Germany, Italy, Japan, the United
Kingdom and Canada to review the impact such regulations have
on consumers, including American consumers, and on innovation
in medicine. The study shall include the following:
(1) The pharmaceutical price control structure in each
country for a wide range of pharmaceuticals, compared with
average pharmaceutical prices paid by Americans covered by
private sector health insurance.
(2) The proportion of the cost for innovation borne by
American consumers, compared with consumers in the other 6
countries.
(3) A review of how closely the observed prices in
regulated markets correspond to the prices that efficiently
distribute common costs of production (``Ramsey prices'').
(4) A review of any peer-reviewed literature that might
show the health consequences to patients in the listed
countries that result from the absence or delayed
introduction of medicines, including the cost of not having
access to medicines, in terms of lower life expectancy and
lower quality of health.
(5) The impact on American consumers, in terms of reduced
research into new or improved pharmaceuticals (including the
cost of delaying the introduction of a significant advance in
certain major diseases), if similar price controls were
adopted in the United States.
(6) The existing standards under international conventions,
including the World Trade Organization and the North American
Free Trade Agreement, regarding regulated pharmaceutical
prices, including any restrictions on anti-competitive laws
that might apply to price regulations and how economic harm
caused to consumers in markets without price regulations may
be remedied.
(7) In parallel trade regimes, how much of the price
difference between countries in the European Union is
captured by middlemen and how much goes to benefit patients
and health systems where parallel importing is significant.
(8) How much cost is imposed on the owner of a property
right from counterfeiting and from international violations
of intellectual property rights for prescription medicines.
(b) Report.--Not later than 1 year after the date of
enactment of this Act, the Comptroller General of the United
States shall submit to Congress a report on the study
conducted under subsection (a).

SEC. 619. SAFETY NET ORGANIZATIONS AND PATIENT ADVISORY
COMMISSION.

(a) In General.--Title XI (42 U.S.C. 1320 et seq.) is
amended by adding at the end the following new part:

``Part D--Safety Net Organizations and Patient Advisory Commission

``safety net organizations and patient advisory commission

``Sec. 1181. (a) Establishment.--There is hereby
established the Safety Net Organizations and Patient Advisory
Commission (in this section referred to as the `Commission').
``(b) Review of Health Care Safety Net Programs and
Reporting Requirements.--
``(1) Review.--The Commission shall conduct an ongoing
review of the health care safety net programs (as described
in paragraph (3)(C)) by--
``(A) monitoring each health care safety net program to
document and analyze the effects of changes in these programs
on the core health care safety net;
``(B) evaluating the impact of the Emergency Medical
Treatment and Labor Act, the Health Insurance Portability and
Accountability Act of 1996, the Balanced Budget Act of 1997,
the Medicare, Medicaid, and SCHIP Balanced Budget Refinement
Act of 1999, the Medicare, Medicaid, and SCHIP Benefits
Protection and Improvement Act of 2000, Prescription Drug and
Medicare Improvement Act of 2003, and other forces on the
capacity of the core health care safety net to continue their
roles in the core health care safety net system to care for
uninsured individuals, medicaid beneficiaries, and other
vulnerable populations;
``(C) monitoring existing data sets to assess the status of
the core health care safety net and health outcomes for
vulnerable populations;
``(D) wherever possible, linking and integrating existing
data systems to enhance the ability of the core health care
safety net to track changes in the status of the core health
care safety net and health outcomes for vulnerable
populations;
``(E) supporting the development of new data systems where
existing data are insufficient or inadequate;
``(F) developing criteria and indicators of impending core
health care safety net failure;
``(G) establishing an early-warning system to identify
impending failures of core health care safety net systems and
providers;
``(H) providing accurate and timely information to Federal,
State, and local policymakers on the indicators that may lead
to the failure of the core health care safety net and an
estimate of the projected consequences of such failures and
the impact of such a failure on the community;
``(I) monitoring and providing oversight for the transition
of individuals receiving supplemental security income
benefits, medical assistance under title XIX, or child health
assistance under title XXI who enroll with a managed care
entity (as defined in section 1932(a)(1)(B)), including the
review of--
``(i) the degree to which health plans have the capacity
(including case management and management information system
infrastructure) to provide quality managed care services to
such an individual;
``(ii) the degree to which these plans may be overburdened
by adverse selection; and
``(iii) the degree to which emergency departments are used
by enrollees of these plans; and
``(J) identifying and disseminating the best practices for
more effective application of the lessons that have been
learned.
``(2) Reports.--
``(A) Annual reports.--Not later than June 1 of each year
(beginning with 2005), the Commission shall, based on the
review conducted under paragraph (1), submit to the
appropriate committees of Congress a report on--
``(i) the health care needs of the uninsured; and
``(ii) the financial and infrastructure stability of the
Nation's core health care safety net.
``(B) Agenda and additional reviews.--
``(i) Agenda.--The Chair of the Commission shall consult
periodically with the Chairpersons and Ranking Minority
Members of the appropriate committees of Congress regarding
the Commission's agenda and progress toward achieving the
agenda.
``(ii) Additional reviews.--The Commission shall conduct
additional reviews and submit additional reports to the
appropriate committees of Congress on topics relating to the
health care safety net programs under the following
circumstances:

``(I) If requested by the Chairpersons or Ranking Minority
Members of such committees.
``(II) If the Commission deems such additional reviews and
reports appropriate.

``(C) Availability of reports.--The Commission shall
transmit to the Comptroller General and the Secretary a copy
of each report submitted under this subsection and shall make
such reports available to the public.
``(3) Definitions.--In this section:
``(A) Appropriate committees of congress.--The term
`appropriate committees of Congress' means the Committees on
Ways and Means and Energy and Commerce of the House of
Representatives and the Committees on Finance and Health,
Education, Labor, and Pensions of the Senate.
``(B) Core health care safety net.--The term `core health
care safety net' means any health care provider that--
``(i) by legal mandate or explicitly adopted mission,
offers access to health care services to patients, regardless
of the ability of the patient to pay for such services; and
``(ii) has a case mix that is substantially comprised of
patients who are uninsured, covered under the medicaid
program, covered under any other public health care program,
or are otherwise vulnerable populations.

Such term includes disproportionate share hospitals,
Federally qualified health centers, other Federal, State, and
locally supported clinics, rural health clinics, local health
departments, and providers covered under the Emergency
Medical Treatment and Labor Act.
``(C) Health care safety net programs.--The term `health
care safety net programs' includes the following:
``(i) Medicaid.--The medicaid program under title XIX.
``(ii) SCHIP.--The State children's health insurance
program under title XXI.
``(iii) Maternal and child health services block grant
program.--The maternal and child health services block grant
program under title V.
``(iv) FQHC programs.--Each federally funded program under
which a health center (as defined in section 330(1) of the
Public Health Service Act), a Federally qualified health
center (as defined in section 1861(aa)(4)), or a Federally-
qualified health center (as defined in section 1905(l)(2)(B))
receives funds.
``(v) RHC programs.--Each federally funded program under
which a rural health clinic (as defined in section
1861(aa)(4) or 1905(l)(1)) receives funds.
``(vi) DSH payment programs.--Each federally funded program
under which a disproportionate share hospital receives funds.
``(vii) Emergency medical treatment and active labor act.--
All care provided under section 1867 for the uninsured,
underinsured, beneficiaries under title XIX, and other
vulnerable individuals.
``(viii) Other health care safety net programs.--Such term
also includes any other health care program that the
Commission determines to be appropriate.
``(D) Vulnerable populations.--The term `vulnerable
populations' includes uninsured and underinsured individuals,
low-income individuals, farm workers, homeless individuals,
individuals with disabilities, individuals with HIV or AIDS,
and such other individuals as the Commission may designate.
``(c) Membership.--

[[Page S8806]]

``(1) Number and appointment.--The Commission shall be
composed of 13 members appointed by the Comptroller General
of the United States (in this section referred to as the
`Comptroller General'), in consultation with the appropriate
committees of Congress.
``(2) Qualifications.--
``(A) In general.--The membership of the Commission shall
include individuals with national recognition for their
expertise in health finance and economics, health care safety
net research and program management, actuarial science,
health facility management, health plans and integrated
delivery systems, reimbursement of health facilities,
allopathic and osteopathic medicine (including emergency
medicine), and other providers of health services, and other
related fields, who provide a mix of different professionals,
broad geographic representation, and a balance between urban
and rural representatives.
``(B) Inclusion.--The membership of the Commission shall
include health professionals, employers, third-party payers,
individuals skilled in the conduct and interpretation of
biomedical, health services, and health economics research
and expertise in outcomes and effectiveness research and
technology assessment. Such membership shall also include
recipients of care from core health care safety net and
individuals who provide and manage the delivery of care by
the core health care safety net.
``(C) Majority nonproviders.--Individuals who are directly
involved in the provision, or management of the delivery, of
items and services covered under the health care safety net
programs shall not constitute a majority of the membership of
the Commission.
``(D) Ethical disclosure.--The Comptroller General shall
establish a system for public disclosure by members of the
Commission of financial and other potential conflicts of
interest relating to such members.
``(3) Terms.--
``(A) In general.--The terms of members of the Commission
shall be for 3 years except that of the members first
appointed, the Comptroller General shall designate--
``(i) four to serve a term of 1 year;
``(ii) four to serve a term of 2 years; and
``(iii) five to serve a term of 3 years.
``(B) Vacancies.--
``(i) In general.--A vacancy in the Commission shall be
filled in the same manner in which the original appointment
was made.
``(ii) Appointment.--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.
``(iii) Terms.--A member may serve after the expiration of
that member's term until a successor has taken office.
``(4) Compensation.--
``(A) Members.--While serving on the business of the
Commission (including travel time), a member of the
Commission--
``(i) shall be entitled to compensation at the per diem
equivalent of the rate provided for level IV of the Executive
Schedule under section 5315 of title 5, United States Code;
and
``(ii) while so serving away from home and the member's
regular place of business, may be allowed travel expenses, as
authorized by the Commission.
``(B) Treatment.--For purposes of pay (other than pay of
members of the Commission) and employment benefits, rights,
and privileges, all personnel of the Commission shall be
treated as if they were employees of the United States
Senate.
``(5) Chair; vice chair.--The Comptroller General shall
designate a member of the Commission, at the time of
appointment of the member as Chair and a member as Vice Chair
for that term of appointment, except that in the case of
vacancy of the Chair or Vice Chair, the Comptroller General
may designate another member for the remainder of that
member's term.
``(6) Meetings.--The Commission shall meet at the call of
the Chair or upon the written request of a majority of its
members.
``(d) Director and Staff; Experts and Consultants.--Subject
to such review as the Comptroller General determines
necessary to ensure the efficient administration of the
Commission, the Commission may--
``(1) employ and fix the compensation of an Executive
Director (subject to the approval of the Comptroller General)
and such other personnel as may be necessary to carry out the
duties of the Commission under this section (without regard
to the provisions of title 5, United States Code, governing
appointments in the competitive service);
``(2) seek such assistance and support as may be required
in the performance of the duties of the Commission under this
section from appropriate Federal departments and agencies;
``(3) enter into contracts or make other arrangements, as
may be necessary for the conduct of the work of the
Commission (without regard to section 3709 of the Revised
Statutes (41 U.S.C. 5));
``(4) make advance, progress, and other payments which
relate to the work of the Commission;
``(5) provide transportation and subsistence for persons
serving without compensation; and
``(6) prescribe such rules and regulations as it deems
necessary with respect to the internal organization and
operation of the Commission.
``(e) Powers.--
``(1) Obtaining official data.--
``(A) In general.--The Commission may secure directly from
any department or agency of the United States information
necessary for the Commission to carry the duties under this
section.
``(B) Request of chair.--Upon request of the Chair, the
head of that department or agency shall furnish that
information to the Commission on an agreed upon schedule.
``(2) Data collection.--In order to carry out the duties of
the Commission under this section, the Commission shall--
``(A) use existing information, both published and
unpublished, where possible, collected and assessed either by
the staff of the Commission or under other arrangements made
in accordance with this section;
``(B) carry out, or award grants or contracts for, original
research and experimentation, where existing information is
inadequate; and
``(C) adopt procedures allowing any interested party to
submit information for the Commission's use in making reports
and recommendations.
``(3) Access of gao to information.--The Comptroller
General shall have unrestricted access to all deliberations,
records, and nonproprietary data that pertains to the work of
the Commission, immediately upon request. The expense of
providing such information shall be borne by the General
Accounting Office.
``(4) Periodic audit.--The Commission shall be subject to
periodic audit by the Comptroller General.
``(f) Application of FACA.--Section 14 of the Federal
Advisory Committee Act (5 U.S.C. App.) does not apply to the
Commission.
``(g) Authorization of Appropriations.--
``(1) Request for appropriations.--The Commission shall
submit requests for appropriations in the same manner as the
Comptroller General submits requests for appropriations, but
amounts appropriated for the Commission shall be separate
from amounts appropriated for the Comptroller General.
``(2) Authorization.--There are authorized to be
appropriated such sums as may be necessary to carry out the
provisions of this section.''.
(b) Effective Date.--The Comptroller General of the United
States shall appoint the initial members of the Safety Net
Organizations and Patient Advisory Commission established
under subsection (a) not later than June 1, 2004.

SEC. 620. ESTABLISHMENT OF PROGRAM TO PREVENT ABUSE OF
NURSING FACILITY RESIDENTS.

(a) In General.--
(1) Screening of skilled nursing facility and nursing
facility provisional employees.--
(A) Medicare program.--Section 1819(b) (42 U.S.C. 1395i-
3(b)) is amended by adding at the end the following:
``(8) Screening of skilled nursing facility workers.--
``(A) Background checks of provisional employees.--Subject
to subparagraph (B)(ii), after a skilled nursing facility
selects an individual for a position as a skilled nursing
facility worker, the facility, prior to employing such worker
in a status other than a provisional status to the extent
permitted under subparagraph (B)(ii), shall--
``(i) give such worker written notice that the facility is
required to perform background checks with respect to
provisional employees;
``(ii) require, as a condition of employment, that such
worker--

``(I) provide a written statement disclosing any conviction
for a relevant crime or finding of patient or resident abuse;
``(II) provide a statement signed by the worker authorizing
the facility to request the search and exchange of criminal
records;
``(III) provide in person to the facility a copy of the
worker's fingerprints or thumb print, depending upon
available technology; and
``(IV) provide any other identification information the
Secretary may specify in regulation;

``(iii) initiate a check of the data collection system
established under section 1128E in accordance with
regulations promulgated by the Secretary to determine whether
such system contains any disqualifying information with
respect to such worker; and
``(iv) if that system does not contain any such
disqualifying information--

``(I) request through the appropriate State agency that the
State initiate a State and national criminal background check
on such worker in accordance with the provisions of
subsection (e)(6); and
``(II) submit to such State agency the information
described in subclauses (II) through (IV) of clause (ii) not
more than 7 days (excluding Saturdays, Sundays, and legal
public holidays under section 6103(a) of title 5, United
States Code) after completion of the check against the system
initiated under clause (iii).

``(B) Prohibition on hiring of abusive workers.--
``(i) In general.--A skilled nursing facility may not
knowingly employ any skilled nursing facility worker who has
any conviction for a relevant crime or with respect to whom a
finding of patient or resident abuse has been made.
``(ii) Provisional employment.--After complying with the
requirements of clauses (i), (ii), and (iii) of subparagraph
(A), a skilled nursing facility may provide for a provisional
period of employment for a

[[Page S8807]]

skilled nursing facility worker pending completion of the
check against the data collection system described under
subparagraph (A)(iii) and the background check described
under subparagraph (A)(iv). Subject to clause (iii), such
facility shall maintain direct supervision of the covered
individual during the worker's provisional period of
employment.
``(iii) Exception for small rural skilled nursing
facilities.--In the case of a small rural skilled nursing
facility (as defined by the Secretary), the Secretary shall
provide, by regulation after consultation with providers of
skilled nursing facility services and entities representing
beneficiaries of such services, for an appropriate level of
supervision with respect to any provisional employees
employed by the facility in accordance with clause (ii). Such
regulation should encourage the provision of direct
supervision of such employees whenever practicable with
respect to such a facility and if such supervision would not
impose an unreasonable cost or other burden on the facility.
``(C) Reporting requirements.--A skilled nursing facility
shall report to the State any instance in which the facility
determines that a skilled nursing facility worker has
committed an act of resident neglect or abuse or
misappropriation of resident property in the course of
employment by the facility.
``(D) Use of information.--
``(i) In general.--A skilled nursing facility that obtains
information about a skilled nursing facility worker pursuant
to clauses (iii) and (iv) of subparagraph (A) may use such
information only for the purpose of determining the
suitability of the worker for employment.
``(ii) Immunity from liability.--A skilled nursing facility
that, in denying employment for an individual selected for
hiring as a skilled nursing facility worker (including during
the period described in subparagraph (B)(ii)), reasonably
relies upon information about such individual provided by the
State pursuant to subsection (e)(6) or section 1128E shall
not be liable in any action brought by such individual based
on the employment determination resulting from the
information.
``(iii) Criminal penalty.--Whoever knowingly violates the
provisions of clause (i) shall be fined in accordance with
title 18, United States Code, imprisoned for not more than 2
years, or both.
``(E) Civil penalty.--
``(i) In general.--A skilled nursing facility that violates
the provisions of this paragraph shall be subject to a civil
penalty in an amount not to exceed--

``(I) for the first such violation, $2,000; and
``(II) for the second and each subsequent violation within
any 5-year period, $5,000.

``(ii) Knowing retention of worker.--In addition to any
civil penalty under clause (i), a skilled nursing facility
that--

``(I) knowingly continues to employ a skilled nursing
facility worker in violation of subparagraph (A) or (B); or
``(II) knowingly fails to report a skilled nursing facility
worker under subparagraph (C),

shall be subject to a civil penalty in an amount not to
exceed $5,000 for the first such violation, and $10,000 for
the second and each subsequent violation within any 5-year
period.
``(F) Definitions.--In this paragraph:
``(i) Conviction for a relevant crime.--The term
`conviction for a relevant crime' means any Federal or State
criminal conviction for--

``(I) any offense described in paragraphs (1) through (4)
of section 1128(a); and
``(II) such other types of offenses as the Secretary may
specify in regulations, taking into account the severity and
relevance of such offenses, and after consultation with
representatives of long-term care providers, representatives
of long-term care employees, consumer advocates, and
appropriate Federal and State officials.

``(ii) Disqualifying information.--The term `disqualifying
information' means information about a conviction for a
relevant crime or a finding of patient or resident abuse.
``(iii) Finding of patient or resident abuse.--The term
`finding of patient or resident abuse' means any
substantiated finding by a State agency under subsection
(g)(1)(C) or a Federal agency that a skilled nursing facility
worker has committed--

``(I) an act of patient or resident abuse or neglect or a
misappropriation of patient or resident property; or
``(II) such other types of acts as the Secretary may
specify in regulations.

``(iv) Skilled nursing facility worker.--The term `skilled
nursing facility worker' means any individual (other than a
volunteer) that has access to a patient of a skilled nursing
facility under an employment or other contract, or both, with
such facility. Such term includes individuals who are
licensed or certified by the State to provide such services,
and nonlicensed individuals providing such services, as
defined by the Secretary, including nurse assistants, nurse
aides, home health aides, and personal care workers and
attendants.''.
(B) Medicaid program.--Section 1919(b) (42 U.S.C. 1396r(b))
is amended by adding at the end the following new paragraph:
``(8) Screening of nursing facility workers.--
``(A) Background checks on provisional employees.--Subject
to subparagraph (B)(ii), after a nursing facility selects an
individual for a position as a nursing facility worker, the
facility, prior to employing such worker in a status other
than a provisional status to the extent permitted under
subparagraph (B)(ii), shall--
``(i) give the worker written notice that the facility is
required to perform background checks with respect to
provisional employees;
``(ii) require, as a condition of employment, that such
worker--

``(I) provide a written statement disclosing any conviction
for a relevant crime or finding of patient or resident abuse;
``(II) provide a statement signed by the worker authorizing
the facility to request the search and exchange of criminal
records;
``(III) provide in person to the facility a copy of the
worker's fingerprints or thumb print, depending upon
available technology; and
``(IV) provide any other identification information the
Secretary may specify in regulation;

``(iii) initiate a check of the data collection system
established under section 1128E in accordance with
regulations promulgated by the Secretary to determine whether
such system contains any disqualifying information with
respect to such worker; and
``(iv) if that system does not contain any such
disqualifying information--

``(I) request through the appropriate State agency that the
State initiate a State and national criminal background check
on such worker in accordance with the provisions of
subsection (e)(8); and
``(II) submit to such State agency the information
described in subclauses (II) through (IV) of clause (ii) not
more than 7 days (excluding Saturdays, Sundays, and legal
public holidays under section 6103(a) of title 5, United
States Code) after completion of the check against the system
initiated under clause (iii).

``(B) Prohibition on hiring of abusive workers.--
``(i) In general.--A nursing facility may not knowingly
employ any nursing facility worker who has any conviction for
a relevant crime or with respect to whom a finding of patient
or resident abuse has been made.
``(ii) Provisional employment.--After complying with the
requirements of clauses (i), (ii), and (iii) of subparagraph
(A), a nursing facility may provide for a provisional period
of employment for a nursing facility worker pending
completion of the check against the data collection system
described under subparagraph (A)(iii) and the background
check described under subparagraph (A)(iv). Subject to clause
(iii), such facility shall maintain direct supervision of the
worker during the worker's provisional period of employment.
``(iii) Exception for small rural nursing facilities.--

``(I) In general.--In the case of a small rural nursing
facility (as defined by the Secretary), the Secretary shall
provide, by regulation after consultation with providers of
nursing facility services and entities representing
beneficiaries of such services, for an appropriate level of
supervision with respect to any provisional employees
employed by the facility in accordance with clause (ii). Such
regulation should encourage the provision of direct
supervision of such employees whenever practicable with
respect to such a facility and if such supervision would not
impose an unreasonable cost or other burden on the facility.

``(C) Reporting requirements.--A nursing facility shall
report to the State any instance in which the facility
determines that a nursing facility worker has committed an
act of resident neglect or abuse or misappropriation of
resident property in the course of employment by the
facility.
``(D) Use of information.--
``(i) In general.--A nursing facility that obtains
information about a nursing facility worker pursuant to
clauses (iii) and (iv) of subparagraph (A) may use such
information only for the purpose of determining the
suitability of the worker for employment.
``(ii) Immunity from liability.--A nursing facility that,
in denying employment for an individual selected for hiring
as a nursing facility worker (including during the period
described in subparagraph (B)(ii)), reasonably relies upon
information about such individual provided by the State
pursuant to subsection (e)(6) or section 1128E shall not be
liable in any action brought by such individual based on the
employment determination resulting from the information.
``(iii) Criminal penalty.--Whoever knowingly violates the
provisions of clause (i) shall be fined in accordance with
title 18, United States Code, imprisoned for not more than 2
years, or both.
``(E) Civil penalty.--
``(i) In general.--A nursing facility that violates the
provisions of this paragraph shall be subject to a civil
penalty in an amount not to exceed--

``(I) for the first such violation, $2,000; and
``(II) for the second and each subsequent violation within
any 5-year period, $5,000.

``(ii) Knowing retention of worker.--In addition to any
civil penalty under clause (i), a nursing facility that--

``(I) knowingly continues to employ a nursing facility
worker in violation of subparagraph (A) or (B); or
``(II) knowingly fails to report a nursing facility worker
under subparagraph (C),

shall be subject to a civil penalty in an amount not to
exceed $5,000 for the first such violation, and $10,000 for
the second and each

[[Page S8808]]

subsequent violation within any 5-year period.
``(F) Definitions.--In this paragraph:
``(i) Conviction for a relevant crime.--The term
`conviction for a relevant crime' means any Federal or State
criminal conviction for--

``(I) any offense described in paragraphs (1) through (4)
of section 1128(a); and
``(II) such other types of offenses as the Secretary may
specify in regulations, taking into account the severity and
relevance of such offenses, and after consultation with
representatives of long-term care providers, representatives
of long-term care employees, consumer advocates, and
appropriate Federal and State officials.

``(ii) Disqualifying information.--The term `disqualifying
information' means information about a conviction for a
relevant crime or a finding of patient or resident abuse.
``(iii) Finding of patient or resident abuse.--The term
`finding of patient or resident abuse' means any
substantiated finding by a State agency under subsection
(g)(1)(C) or a Federal agency that a nursing facility worker
has committed--

``(I) an act of patient or resident abuse or neglect or a
misappropriation of patient or resident property; or
``(II) such other types of acts as the Secretary may
specify in regulations.

``(iv) Nursing facility worker.--The term `nursing facility
worker' means any individual (other than a volunteer) that
has access to a patient of a nursing facility under an
employment or other contract, or both, with such facility.
Such term includes individuals who are licensed or certified
by the State to provide such services, and nonlicensed
individuals providing such services, as defined by the
Secretary, including nurse assistants, nurse aides, home
health aides, and personal care workers and attendants.''.
(2) Federal responsibilities.--
(A) Development of standard federal and state background
check form.--The Secretary of Health and Human Services, in
consultation with the Attorney General and representatives of
appropriate State agencies, shall develop a model form that a
provisional employee at a nursing facility may complete and
Federal and State agencies may use to conduct the criminal
background checks required under sections 1819(b)(8) and
1919(b)(8) of the Social Security Act (42 U.S.C. 1395i-3(b),
1396r(b)) (as added by this section).
(B) Periodic evaluation.--The Secretary of Health and Human
Services, in consultation with the Attorney General,
periodically shall evaluate the background check system
imposed under sections 1819(b)(8) and 1919(b)(8) of the
Social Security Act (42 U.S.C. 1395i-3(b), 1396r(b)) (as
added by this section) and shall implement changes, as
necessary, based on available technology, to make the
background check system more efficient and able to provide a
more immediate response to long-term care providers using the
system.
(3) No preemption of stricter state laws.--Nothing in
section 1819(b)(8) or 1919(b)(8) of the Social Security Act
(42 U.S.C. 1395i-3(b)(8), 1396r(b)(8)) (as so added) shall be
construed to supersede any provision of State law that--
(A) specifies a relevant crime for purposes of prohibiting
the employment of an individual at a long-term care facility
(as defined in section 1128E(g)(6) of the Social Security Act
(as added by subsection (e)) that is not included in the list
of such crimes specified in such sections or in regulations
promulgated by the Secretary of Health and Human Services to
carry out such sections; or
(B) requires a long-term care facility (as so defined) to
conduct a background check prior to employing an individual
in an employment position that is not included in the
positions for which a background check is required under such
sections.
(4) Technical amendments.--Effective as if included in the
enactment of section 941 of BIPA (114 Stat. 2763A-585),
sections 1819(b) and 1919(b) (42 U.S.C. 1395i-3(b),
1396r(b)), as amended by such section 941 are each amended by
redesignating the paragraph (8) added by such section as
paragraph (9).
(b) Federal and State Requirements Concerning Background
Checks.--
(1) Medicare.--Section 1819(e) (42 U.S.C. 1395i-3(e)) is
amended by adding at the end the following:
``(6) Federal and state requirements concerning criminal
background checks on skilled nursing facility employees.--
``(A) In general.--Upon receipt of a request by a skilled
nursing facility pursuant to subsection (b)(8) that is
accompanied by the information described in subclauses (II)
through (IV) of subsection (b)(8)(A)(ii), a State, after
checking appropriate State records and finding no
disqualifying information (as defined in subsection
(b)(8)(F)(ii)), shall immediately submit such request and
information to the Attorney General and shall request the
Attorney General to conduct a search and exchange of records
with respect to the individual as described in subparagraph
(B).
``(B) Search and exchange of records by attorney general.--
Upon receipt of a submission pursuant to subparagraph (A),
the Attorney General shall direct a search of the records of
the Federal Bureau of Investigation for any criminal history
records corresponding to the fingerprints and other positive
identification information submitted. The Attorney General
shall provide any corresponding information resulting from
the search to the State.
``(C) State reporting of information to skilled nursing
facility.--Upon receipt of the information provided by the
Attorney General pursuant to subparagraph (B), the State
shall--
``(i) review the information to determine whether the
individual has any conviction for a relevant crime (as
defined in subsection (b)(8)(F)(i));
``(ii) immediately report to the skilled nursing facility
in writing the results of such review; and
``(iii) in the case of an individual with a conviction for
a relevant crime, report the existence of such conviction of
such individual to the database established under section
1128E.
``(D) Fees for performance of criminal background checks.--
``(i) Authority to charge fees.--

``(I) Attorney general.--The Attorney General may charge a
fee to any State requesting a search and exchange of records
pursuant to this paragraph and subsection (b)(8) for
conducting the search and providing the records. The amount
of such fee shall not exceed the lesser of the actual cost of
such activities or $50. Such fees shall be available to the
Attorney General, or, in the Attorney General's discretion,
to the Federal Bureau of Investigation until expended.
``(II) State.--A State may charge a skilled nursing
facility a fee for initiating the criminal background check
under this paragraph and subsection (b)(8), including fees
charged by the Attorney General, and for performing the
review and report required by subparagraph (C). The amount of
such fee shall not exceed the actual cost of such activities.

``(ii) Prohibition on charging.--An entity may not impose
on a provisional employee or an employee any charges relating
to the performance of a background check under this
paragraph.
``(E) Regulations.--
``(i) In general.--In addition to the Secretary's authority
to promulgate regulations under this title, the Attorney
General, in consultation with the Secretary, may promulgate
such regulations as are necessary to carry out the Attorney
General's responsibilities under this paragraph and
subsection (b)(9), including regulations regarding the
security confidentiality, accuracy, use, destruction, and
dissemination of information, audits and recordkeeping, and
the imposition of fees.
``(ii) Appeal procedures.--The Attorney General, in
consultation with the Secretary, shall promulgate such
regulations as are necessary to establish procedures by which
a provisional employee or an employee may appeal or dispute
the accuracy of the information obtained in a background
check conducted under this paragraph. Appeals shall be
limited to instances in which a provisional employee or an
employee is incorrectly identified as the subject of the
background check, or when information about the provisional
employee or employee has not been updated to reflect changes
in the provisional employee's or employee's criminal record.
``(F) Report.--Not later than 2 years after the date of
enactment of this paragraph, the Attorney General shall
submit a report to Congress on--
``(i) the number of requests for searches and exchanges of
records made under this section;
``(ii) the disposition of such requests; and
``(iii) the cost of responding to such requests.''.
(2) Medicaid.--Section 1919(e) (42 U.S.C. 1396r(e)) is
amended by adding at the end the following:
``(8) Federal and state requirements concerning criminal
background checks on nursing facility employees.--
``(A) In general.--Upon receipt of a request by a nursing
facility pursuant to subsection (b)(8) that is accompanied by
the information described in subclauses (II) through (IV) of
subsection (b)(8)(A)(ii), a State, after checking appropriate
State records and finding no disqualifying information (as
defined in subsection (b)(8)(F)(ii)), shall immediately
submit such request and information to the Attorney General
and shall request the Attorney General to conduct a search
and exchange of records with respect to the individual as
described in subparagraph (B).
``(B) Search and exchange of records by attorney general.--
Upon receipt of a submission pursuant to subparagraph (A),
the Attorney General shall direct a search of the records of
the Federal Bureau of Investigation for any criminal history
records corresponding to the fingerprints and other positive
identification information submitted. The Attorney General
shall provide any corresponding information resulting from
the search to the State.
``(C) State reporting of information to nursing facility.--
Upon receipt of the information provided by the Attorney
General pursuant to subparagraph (B), the State shall--
``(i) review the information to determine whether the
individual has any conviction for a relevant crime (as
defined in subsection (b)(8)(F)(i));
``(ii) immediately report to the nursing facility in
writing the results of such review; and
``(iii) in the case of an individual with a conviction for
a relevant crime, report the

[[Page S8809]]

existence of such conviction of such individual to the
database established under section 1128E.
``(D) Fees for performance of criminal background checks.--
``(i) Authority to charge fees.--

``(I) Attorney general.--The Attorney General may charge a
fee to any State requesting a search and exchange of records
pursuant to this paragraph and subsection (b)(8) for
conducting the search and providing the records. The amount
of such fee shall not exceed the lesser of the actual cost of
such activities or $50. Such fees shall be available to the
Attorney General, or, in the Attorney General's discretion,
to the Federal Bureau of Investigation, until expended.
``(II) State.--A State may charge a nursing facility a fee
for initiating the criminal background check under this
paragraph and subsection (b)(8), including fees charged by
the Attorney General, and for performing the review and
report required by subparagraph (C). The amount of such fee
shall not exceed the actual cost of such activities.

``(ii) Prohibition on charging.--An entity may not impose
on a provisional employee or an employee any charges relating
to the performance of a background check under this
paragraph.
``(E) Regulations.--
``(i) In general.--In addition to the Secretary's authority
to promulgate regulations under this title, the Attorney
General, in consultation with the Secretary, may promulgate
such regulations as are necessary to carry out the Attorney
General's responsibilities under this paragraph and
subsection (b)(8), including regulations regarding the
security, confidentiality, accuracy, use, destruction, and
dissemination of information, audits and recordkeeping, and
the imposition of fees.
``(ii) Appeal procedures.--The Attorney General, in
consultation with the Secretary, shall promulgate such
regulations as are necessary to establish procedures by which
a provisional employee or an employee may appeal or dispute
the accuracy of the information obtained in a background
check conducted under this paragraph. Appeals shall be
limited to instances in which a provisional employee or an
employee is incorrectly identified as the subject of the
background check, or when information about the provisional
employee or employee has not been updated to reflect changes
in the provisional employee's or employee's criminal record.
``(F) Report.--Not later than 2 years after the date of
enactment of this paragraph, the Attorney General shall
submit a report to Congress on--
``(i) the number of requests for searches and exchanges of
records made under this section;
``(ii) the disposition of such requests; and
``(iii) the cost of responding to such requests.''.
(c) Application to Other Entities Providing Home Health or
Long-Term Care Services.--
(1) Medicare.--Part D of title XVIII (42 U.S.C. 1395x et
seq.) is amended by adding at the end the following:

``APPLICATION OF SKILLED NURSING FACILITY PREVENTIVE ABUSE PROVISIONS
TO ANY PROVIDER OF SERVICES OR OTHER ENTITY PROVIDING HOME HEALTH OR
LONG-TERM CARE SERVICES

``Sec. 1897. (a) In General.--The requirements of
subsections (b)(8) and (e)(6) of section 1819 shall apply to
any provider of services or any other entity that is eligible
to be paid under this title for providing home health
services, hospice care (including routine home care and other
services included in hospice care under this title), or long-
term care services to an individual entitled to benefits
under part A or enrolled under part B, including an
individual provided with a Medicare+Choice plan offered by a
Medicare+Choice organization under part C (in this section
referred to as a `medicare beneficiary').
``(b) Supervision of Provisional Employees.--
``(1) In general.--With respect to an entity that provides
home health services, such entity shall be considered to have
satisfied the requirements of section 1819(b)(8)(B)(ii) or
1919(b)(8)(B)(ii) if the entity meets such requirements for
supervision of provisional employees of the entity as the
Secretary shall, by regulation, specify in accordance with
paragraph (2).
``(2) Requirements.--The regulations required under
paragraph (1) shall provide the following:
``(A) Supervision of a provisional employee shall consist
of ongoing, good faith, verifiable efforts by the supervisor
of the provisional employee to conduct monitoring and
oversight activities to ensure the safety of a medicare
beneficiary.
``(B) For purposes of subparagraph (A), monitoring and
oversight activities may include (but are not limited to) the
following:
``(i) Follow-up telephone calls to the medicare
beneficiary.
``(ii) Unannounced visits to the medicare beneficiary's
home while the provisional employee is serving the medicare
beneficiary.
``(iii) To the extent practicable, limiting the provisional
employee's duties to serving only those medicare
beneficiaries in a home or setting where another family
member or resident of the home or setting of the medicare
beneficiary is present.
``(C) In promulgating such regulations, the Secretary shall
take into account the staffing and geographic issues faced by
small rural entities (as defined by the Secretary) that
provide home health services, hospice care (including routine
home care and other services included in hospice care under
this title), or other long-term care services. Such
regulations should encourage the provision of monitoring and
oversight activities whenever practicable with respect to
such an entity, and if such activities would not impose an
unreasonable cost or other burden on the entity.''.
(2) Medicaid.--Section 1902(a) (42 U.S.C. 1396a), as
amended by section 104(a), is amended--
(A) in paragraph (65), by striking ``and'' at the end;
(B) in paragraph (66), by striking the period and inserting
``; and''; and
(C) by inserting after paragraph (66) the following:
``(67) provide that any entity that is eligible to be paid
under the State plan for providing home health services,
hospice care (including routine home care and other services
included in hospice care under title XVIII), or long-term
care services for which medical assistance is available under
the State plan to individuals requiring long-term care
complies with the requirements of subsections (b)(8) and
(e)(8) of section 1919 and section 1897(b) (in the same
manner as such section applies to a medicare beneficiary).''.
(3) Expansion of State Nurse Aide Registry.--
(A) Medicare.--Section 1819 (42 U.S.C. 1395i-3) is
amended--
(i) in subsection (e)(2)--

(I) in the paragraph heading, by striking ``Nurse aide
registry'' and inserting ``Employee registry'';
(II) in subparagraph (A)--

(aa) by striking ``By not later than January 1, 1989, the''
and inserting ``The'';
(bb) by striking ``a registry of all individuals'' and
inserting ``a registry of (i) all individuals''; and
(cc) by inserting before the period the following: ``, (ii)
all other skilled nursing facility employees with respect to
whom the State has made a finding described in subparagraph
(B), and (iii) any employee of any provider of services or
any other entity that is eligible to be paid under this title
for providing home health services, hospice care (including
routine home care and other services included in hospice care
under this title), or long-term care services and with
respect to whom the entity has reported to the State a
finding of patient neglect or abuse or a misappropriation of
patient property''; and

(III) in subparagraph (C), by striking ``a nurse aide'' and
inserting ``an individual''; and

(ii) in subsection (g)(1)--

(I) by striking the first sentence of subparagraph (C) and
inserting the following: ``The State shall provide, through
the agency responsible for surveys and certification of
skilled nursing facilities under this subsection, for a
process for the receipt and timely review and investigation
of allegations of neglect and abuse and misappropriation of
resident property by a nurse aide or a skilled nursing
facility employee of a resident in a skilled nursing
facility, by another individual used by the facility in
providing services to such a resident, or by an individual
described in subsection (e)(2)(A)(iii).''; and
(II) in the fourth sentence of subparagraph (C), by
inserting ``or described in subsection (e)(2)(A)(iii)'' after
``used by the facility''; and
(III) in subparagraph (D)--

(aa) in the subparagraph heading, by striking ``nurse
aide''; and
(bb) in clause (i), in the matter preceding subclause (I),
by striking ``a nurse aide'' and inserting ``an individual'';
and
(cc) in clause (i)(I), by striking ``nurse aide'' and
inserting ``individual''.
(B) Medicaid.--Section 1919 (42 U.S.C. 1396r) is amended--
(i) in subsection (e)(2)--

(I) in the paragraph heading, by striking ``Nurse aide
registry'' and inserting ``Employee registry'';
(II) in subparagraph (A)--

(aa) by striking ``By not later than January 1, 1989, the''
and inserting ``The'';
(bb) by striking ``a registry of all individuals'' and
inserting ``a registry of (i) all individuals''; and
(cc) by inserting before the period the following: ``, (ii)
all other nursing facility employees with respect to whom the
State has made a finding described in subparagraph (B), and
(iii) any employee of an entity that is eligible to be paid
under the State plan for providing home health services,
hospice care (including routine home care and other services
included in hospice care under title XVIII), or long-term
care services and with respect to whom the entity has
reported to the State a finding of patient neglect or abuse
or a misappropriation of patient property''; and

(III) in subparagraph (C), by striking ``a nurse aide'' and
inserting ``an individual''; and

(ii) in subsection (g)(1)--

(I) by striking the first sentence of subparagraph (C) and
inserting the following: ``The State shall provide, through
the agency responsible for surveys and certification of
nursing facilities under this subsection,

[[Page S8810]]

for a process for the receipt and timely review and
investigation of allegations of neglect and abuse and
misappropriation of resident property by a nurse aide or a
nursing facility employee of a resident in a nursing
facility, by another individual used by the facility in
providing services to such a resident, or by an individual
described in subsection (e)(2)(A)(iii).''; and
(II) in the fourth sentence of subparagraph (C), by
inserting ``or described in subsection (e)(2)(A)(iii)'' after
``used by the facility''; and
(III) in subparagraph (D)--

(aa) in the subparagraph heading, by striking ``nurse
aide''; and
(bb) in clause (i), in the matter preceding subclause (I),
by striking ``a nurse aide'' and inserting ``an individual'';
and
(cc) in clause (i)(I), by striking ``nurse aide'' and
inserting ``individual''.
(d) Reimbursement of Costs for Background Checks.--The
Secretary of Health and Human Services shall reimburse
nursing facilities, skilled nursing facilities, and other
entities for costs incurred by the facilities and entities in
order to comply with the requirements imposed under sections
1819(b)(8) and 1919(b)(8) of such Act (42 U.S.C. 1395i-
3(b)(8), 1396r(b)(8)), as added by this section.
(e) Inclusion of Abusive Acts Within a Long-Term Care
Facility or Provider in the National Health Care Fraud and
Abuse Data Collection Program.--
(1) In general.--Section 1128E(g)(1)(A) (42 U.S.C. 1320a-
7e(g)(1)(A)) is amended--
(A) by redesignating clause (v) as clause (vi); and
(B) by inserting after clause (iv), the following:
``(v) A finding of abuse or neglect of a patient or a
resident of a long-term care facility, or misappropriation of
such a patient's or resident's property.''.
(2) Coverage of long-term care facility or provider
employees.--Section 1128E(g)(2) (42 U.S.C. 1320a-7e(g)(2)) is
amended by inserting ``, and includes any individual of a
long-term care facility or provider (other than any
volunteer) that has access to a patient or resident of such a
facility under an employment or other contract, or both, with
the facility or provider (including individuals who are
licensed or certified by the State to provide services at the
facility or through the provider, and nonlicensed
individuals, as defined by the Secretary, providing services
at the facility or through the provider, including nurse
assistants, nurse aides, home health aides, individuals who
provide home care, and personal care workers and
attendants)'' before the period.
(3) Reporting by long-Term care facilities or providers.--
(A) In general.--Section 1128E(b)(1) (42 U.S.C. 1320a-
7e(b)(1)) is amended by striking ``and health plan'' and
inserting ``, health plan, and long-term care facility or
provider''.
(B) Correction of information.--Section 1128E(c)(2) (42
U.S.C. 1320a-7e(c)(2)) is amended by striking ``and health
plan'' and inserting ``, health plan, and long-term care
facility or provider''.
(4) Access to reported information.--Section 1128E(d)(1)
(42 U.S.C. 1320a-7e(d)(1)) is amended by striking ``and
health plans'' and inserting ``, health plans, and long-term
care facilities or providers''.
(5) Mandatory check of database by long-term care
facilities or providers.--Section 1128E(d) (42 U.S.C. 1320a-
7e(d)) is amended by adding at the end the following:
``(3) Mandatory check of database by long-term care
facilities or providers.--A long-term care facility or
provider shall check the database maintained under this
section prior to hiring under an employment or other
contract, or both, (other than in a provisional status) any
individual as an employee of such a facility or provider who
will have access to a patient or resident of the facility or
provider (including individuals who are licensed or certified
by the State to provide services at the facility or through
the provider, and nonlicensed individuals, as defined by the
Secretary, that will provide services at the facility or
through the provider, including nurse assistants, nurse
aides, home health aides, individuals who provide home care,
and personal care workers and attendants).''.
(6) Definition of long-term care facility or provider.--
Section 1128E(g) (42 U.S.C. 1320a-7e(g)) is amended by adding
at the end the following:
``(6) Long-term care facility or provider.--The term `long-
term care facility or provider' means a skilled nursing
facility (as defined in section 1819(a)), a nursing facility
(as defined in section 1919(a)), a home health agency, a
provider of hospice care (as defined in section 1861(dd)(1)),
a long-term care hospital (as described in section
1886(d)(1)(B)(iv)), an intermediate care facility for the
mentally retarded (as defined in section 1905(d)), or any
other facility or entity that provides, or is a provider of,
long-term care services, home health services, or hospice
care (including routine home care and other services included
in hospice care under title XVIII), and receives payment for
such services under the medicare program under title XVIII or
the medicaid program under title XIX.''.
(7) Authorization of appropriations.--There is authorized
to be appropriated to carry out the amendments made by this
subsection, $10,200,000 for fiscal year 2004.
(f) Prevention and Training Demonstration Project.--
(1) Establishment.--The Secretary of Health and Human
Services shall establish a demonstration program to provide
grants to develop information on best practices in patient
abuse prevention training (including behavior training and
interventions) for managers and staff of hospital and health
care facilities.
(2) Eligibility.--To be eligible to receive a grant under
paragraph (1), an entity shall be a public or private
nonprofit entity and prepare and submit to the Secretary of
Health and Human Services an application at such time, in
such manner, and containing such information as the Secretary
may require.
(3) Use of funds.--Amounts received under a grant under
this subsection shall be used to--
(A) examine ways to improve collaboration between State
health care survey and provider certification agencies, long-
term care ombudsman programs, the long-term care industry,
and local community members;
(B) examine patient care issues relating to regulatory
oversight, community involvement, and facility staffing and
management with a focus on staff training, staff stress
management, and staff supervision;
(C) examine the use of patient abuse prevention training
programs by long-term care entities, including the training
program developed by the National Association of Attorneys
General, and the extent to which such programs are used; and
(D) identify and disseminate best practices for preventing
and reducing patient abuse.
(4) Authorization of appropriations.--There is authorized
to be appropriated such sums as may be necessary to carry out
this subsection.
(g) Effective Date.--
(1) In general.--With respect to a skilled nursing facility
(as defined in section 1819(a) of the Social Security Act (42
U.S.C. 1395i-3(a)) or a nursing facility (as defined in
section 1919(a) of the Social Security Act (42 U.S.C.
1396r(a)), this section and the amendments made by this
section shall take effect on the date that is the earlier
of--
(A) 6 months after the effective date of final regulations
promulgated to carry out this section and such amendments; or
(B) January 1, 2006.
(2) Long-term care facilities and providers.--With respect
to a long-term care facility or provider (as defined in
section 1128E(g)(6) of the Social Security Act (42 U.S.C.
1320a-7e(g)(6)) (as added by subsection (e)), this section
and the amendments made by this section shall take effect on
the date that is the earlier of--
(A) 18 months after the effective date of final regulations
promulgated to carry out this section and such amendments; or
(B) January 1, 2007.

SEC. 621. OFFICE OF RURAL HEALTH POLICY IMPROVEMENTS.

Section 711(b) (42 U.S.C. 912(b)) is amended--
(1) in paragraph (3), by striking ``and'' after the comma
at the end;
(2) in paragraph (4), by inserting ``and'' after the comma
at the end; and
(3) by inserting after paragraph (4) the following new
paragraph:
``(5) administer grants, cooperative agreements, and
contracts to provide technical assistance and other
activities as necessary to support activities related to
improving health care in rural areas.''.

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