(Sec. 101) Establishes a Medicare Competition and Prescription Drug Advisory Board. Authorizes appropriations.
(Sec. 102) Amends SSA title XVIII to make the Commissioner a member of the Board of Trustees of the Medicare trust funds.
(Sec. 103) Amends Federal civil service law to provide for a salary increase for the Administrator of the Health Care Financing Administration (HCFA).
Subtitle B: Redefined Medicare Solvency Measures - Amends SSA title XVIII to require the Board of Trustees to make a separate annual report on the operation and status of the Federal Hospital Insurance Trust Fund under Medicare part A (Hospital Insurance) and on the Federal Supplementary Medical Insurance Trust Fund under Medicare part B (Supplementary Insurance), including the Medicare Prescription Drug Account (created by title II of this Act) within it.
(Sec. 151) Expresses the sense of Congress that the committees of jurisdiction shall hold hearings on such reports.
Title II: Medicare Prescription Drug and Supplemental Benefit Program - Amends SSA title XXII to add a new part B (Medicare Prescription Drug and Supplemental Benefit Program) requiring the Commissioner to establish the Medicare Prescription Drug and Supplemental Benefit Program under which an eligible beneficiary may voluntarily enroll in, and receive access to covered outpatient prescription drugs and other benefits through, a Medicare Prescription Plus plan (plan) offered by a private entity or by a Medicare+Choice plan. Makes the costs of providing program benefits payable from the Medicare Prescription Drug Account.
(Sec. 201) Outlines program procedures, including procedures for: (1) enrollment; (2) a Commissioner study and report to Congress on permitting individuals enrolled under Medicare part B but not entitled to benefits under Medicare part A to buy into the program; (3) plan election; (4) beneficiary outreach; (5) application of Medicare+Choice secondary payor requirements to the program in the same manner as they apply under the Medicare+Choice program; (5) alternative coverage requirements; (6) access to negotiated prices; (7) actuarial valuation and determination of annual percentage increases; (8) beneficiary protections, including grievance resolution; (9) requirements for entities offering plans, including licensure; (10) submission and approval of plans; (11) payments to plans for benefits; (12) computation and collection of beneficiary share of premium; (13) additional prescription drug subsidies through reinsurance; (14) plan fees for administrative costs; and (15) creation and use of the Medicare Prescription Drug Account.
(Sec. 202) Revises requirements for the Federal Supplementary Medical Insurance Trust Fund to comply with this Act.
(Sec. 203) Amends SSA title XVIII part C to prohibit a Medicare+Choice organization from offering prescription drug coverage to a Medicare+Choice plan enrollee unless such drug coverage is at least qualified prescription drug coverage under this Act, and unless specified requirements for such coverage are met.
(Sec. 204) Amends SSA title XIX (Medicaid) to require a State, as a condition for receiving Federal financial assistance for its Medicaid plan, to make Medicare prescription drug benefit eligibility determinations for low-income premium and cost-sharing subsidies. Mandates specified increases in applicable Federal matching rates for State expenditures for additional administrative costs.
Provides for phased-in Federal assumption of Medicaid prescription drug costs in the case of an individual dually entitled to qualified prescription drug coverage under a Medicaid plan or under a Medicare+Choice plan under Medicare part C.
(Sec. 205) Prohibits any new Medigap policy covering prescription drugs from being issued, on or after January 1, 2003, to an individual unless it replaces a Medigap policy that was issued to that individual and that provided some coverage of expenses for prescription drugs.
Prohibits the issuer of a Medigap policy from denying or conditioning Medigap coverage for an individual who terminates certain kinds of Medigap policies and applies for certain other kinds.
Amends SSA title XVIII (Medicare) to establish Medigap protections for individuals who lose Medicare prescription plus plan coverage.
(Sec. 206) Directs the Comptroller General to study and report to Congress on the extent to which reimbursement for drugs and biologicals under the current Medicare payment methodology overpays for the cost of such drugs and biologicals compared to the average acquisition cost paid by physicians or other drug suppliers.
Title III: Medicare+Choice Reforms - Amends Medicare part C with respect to: (1) increasing in national per capita Medicare+Choice growth percentage in 2001 and 2002; (2) removing application of budget neutrality beginning in 2002; (3) payments to Medicare+Choice organizations based on risk-adjusted bids; (4) premium reduction and Medicare+Choice monthly supplemental beneficiary premium; (5) rules relating to premiums owed by Medicare+Choice enrollees; (6) allowing plans to include described reductions and other benefits in their basic benefits; (7) a special rule for end-stage renal disease; (8) information comparing plan premiums; (9) national coverage determinations; (10) disclosure requirements; (11) geographic adjustment; (12) Medicare+Choice monthly basic beneficiary premium; (13) a freeze of the health risk adjuster at 20 percent after 2002; and (14) adjustment in payment to include the Commissioner's estimate of the amount of additional payments that would have been made in the area involved if individuals entitled to Medicare+Choice benefits had not received services from facilities of the Departments of Veterans Affairs or of Defense for purposes of calculating annual Medicare+Choice capitation rates.
Title IV: Medicare Beneficiary Outreach and Education - Amends SSA title XXII to add a new part C (Medicare Consumer Coalitions) authorizing the Commissioner of the Competitive Medicare Agency to establish Medicare Consumer Coalitions to conduct information programs comparing the original Medicare fee-for-service program, available Medicare+Choice plans, and available Medicare Prescription Plus plans. Authorizes appropriations.
[Congressional Bills 106th Congress]
[From the U.S. Government Publishing Office]
[S. 2807 Introduced in Senate (IS)]
2d Session
S. 2807
To amend the Social Security Act to establish a Medicare Prescription
Drug and Supplemental Benefit Program and to stabilize and improve the
Medicare+Choice program, and for other purposes.
_______________________________________________________________________
IN THE SENATE OF THE UNITED STATES
June 28, 2000
Mr. Breaux (for himself, Mr. Frist, Mr. Kerrey, Mr. Bond, Mr.
Santorum, Ms. Landrieu, Mr. Ashcroft, and Ms. Collins)
introduced the following bill; which was read twice and
referred to the Committee on FinanceYYYYYYYYYYYYYYYYYYYYYYYYYYY
_______________________________________________________________________
A BILL
To amend the Social Security Act to establish a Medicare Prescription
Drug and Supplemental Benefit Program and to stabilize and improve the
Medicare+Choice program, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Medicare
Prescription Drug and Modernization Act of 2000''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Findings and purposes.
TITLE I--MEDICARE MANAGEMENT AND ADMINISTRATION
Subtitle A--Establishment of the Competitive Medicare Agency
Sec. 101. Establishment of the Competitive Medicare Agency.
``TITLE XXII--MEDICARE COMPETITION AND PRESCRIPTION DRUGS
``Part A--Establishment of the Competitive Medicare Agency
``Sec. 2201. Competitive Medicare Agency.
``Sec. 2202. Commissioner; Deputy Commissioner; other officers.
``Sec. 2203. Administrative duties of the Commissioner.
``Sec. 2204. Medicare Competition and Prescription Drug
Advisory Board.''.
Sec. 102. Commissioner as member of the board of trustees of the
medicare trust funds.
Sec. 103. Salary increase for the HCFA Administrator.
Subtitle B--Redefined Medicare Solvency Measures
Sec. 151. Requirements for annual financial reporting and oversight of
medicare program.
TITLE II--MEDICARE PRESCRIPTION DRUG AND SUPPLEMENTAL BENEFIT PROGRAM
Sec. 201. Establishment of program.
``Part B--Medicare Prescription Drug and Supplemental Benefit Program
``Sec. 2221. Establishment of Prescription Drug and
Supplemental Benefit Program.
``Sec. 2222. Enrollment under program.
``Sec. 2223. Election of a Medicare Prescription Plus plan.
``Sec. 2224. Beneficiary information.
``Sec. 2225. Outpatient prescription drug and other
supplemental benefits.
``Sec. 2226. Beneficiary protections.
``Sec. 2227. Requirements for entities offering Medicare
Prescription Plus plans.
``Sec. 2228. Submission of Medicare Prescription Plus plans.
``Sec. 2229. Approval of Medicare Prescription Plus plans.
``Sec. 2230. Payments to Medicare Prescription Plus plans for
benefits.
``Sec. 2231. Computation and collection of beneficiary share of
premium.
``Sec. 2232. Additional prescription drug subsidies through
reinsurance.
``Sec. 2233. Plan fees for administrative costs.
``Sec. 2234. Medicare prescription drug account.
``Sec. 2235. Secondary payer provisions.
``Sec. 2236. Definitions; treatment of references to provisions
in Medicare+Choice program.''.
Sec. 202. Amendments to Federal Supplementary Medical Insurance Trust
Fund.
Sec. 203. Prescription drug coverage under the Medicare+Choice program.
Sec. 204. Medicaid amendments.
``Sec. 1935. Special provisions relating to medicare
prescription drug benefit.''.
Sec. 205. Medigap provisions.
Sec. 206. GAO report on part B payment for drugs and biologicals and
related services.
TITLE III--MEDICARE+CHOICE REFORMS
Sec. 301. Increase in national per capita Medicare+Choice growth
percentage in 2001 and 2002.
Sec. 302. Removing application of budget neutrality beginning in 2002.
Sec. 303. Medicare+Choice competition program.
Sec. 304. Freeze of health risk adjuster at 20 percent.
TITLE IV--MEDICARE BENEFICIARY OUTREACH AND EDUCATION
Sec. 401. Medicare Consumer Coalitions.
``Part C--Medicare Consumer Coalitions
``Sec. 2281. Establishment of medicare consumer coalitions.''.
SEC. 2. FINDINGS AND PURPOSES.
(a) Findings.--
(1) Based on the deliberations of the National Bipartisan
Commission on the Future of Medicare, the medicare program
under title XVIII of the Social Security Act in its current
form is unsustainable, with the part A trust fund scheduled to
become insolvent in 2025.
(2) The medicare program relies on general revenues to pay
for 36 percent of total program expenditures and will continue
to use an increasing share of general revenues. Part B outlays
under such program, \3/4\ of which are funded through general
revenues, have increased 38 percent over the past 5 years, or
about 5 percent faster than the economy as a whole.
(3) Medicare's spending, left unchecked, will continue to
consume an increasing share of the Federal budget, leaving
little room for other priorities, such as defense, education,
debt reduction, tax cuts, and domestic spending.
(4) Medicare's current benefit package is outdated in that
it does not provide a prescription drug benefit and limits
beneficiary access to new technologies.
(5) Medicare only covers 53 percent of a beneficiary's
average health care costs and exposes beneficiaries to large
out-of-pocket liabilities.
(6) The number of beneficiaries in the medicare program is
estimated to more than double by the end of 2030, due to the
influx of 77,000,000 baby boomers beginning in 2010.
(7) Each year there are fewer workers paying payroll taxes
to fund current medicare obligations, evidenced by a decrease
in the number of workers per retiree from 4.5 in 1960 to 3.9 in
2000. This number is expected to decline further to 2.8 in
2020.
(8) The Balanced Budget Act of 1997 and the Medicare,
Medicaid, and SCHIP Balanced Budget Refinement Act of 1999
underscore the need to fundamentally restructure the medicare
program and reduce Government micromanagement of that program.
(b) Purposes.--The purposes of this Act are--
(1) to improve the Medicare+Choice program by adopting a
stable, competitive system that provides medicare beneficiaries
with better and broader health coverage and a greater variety
of affordable options from which to choose.
(2) to assist all medicare beneficiaries, especially those
with low incomes, in obtaining coverage for outpatient
prescription drugs;
(3) to establish an independent executive branch
Competitive Medicare Agency outside of the Health Care
Financing Administration and the Department of Health and Human
Services based on the Social Security Administration to
administer the outpatient prescription drug benefit and the
Medicare+Choice program;
(4) to increase the flexibility of the medicare program and
provide medicare beneficiaries timely access to the latest
advances in the practice of medicine and delivery of care and
to end the congressional micromanagement over prices and
delivery of benefits currently administered through
approximately 130,000 pages of rules and regulations
established under the medicare program; and
(5) to better determine the financial health of the
medicare program by establishing a mechanism that monitors the
total spending and revenues of the medicare program and serves
as an early warning system that triggers congressional debate
on policy decisions and that takes into account recommendations
of the Medicare Competition and Prescription Drug Advisory
Board.
TITLE I--MEDICARE MANAGEMENT AND ADMINISTRATION
Subtitle A--Establishment of the Competitive Medicare Agency
SEC. 101. ESTABLISHMENT OF THE COMPETITIVE MEDICARE AGENCY.
(a) In General.--The Social Security Act (42 U.S.C. 301 et seq.) is
amended by adding at the end the following new title:
``TITLE XXII--MEDICARE COMPETITION AND PRESCRIPTION DRUGS
``Part A--Establishment of the Competitive Medicare Agency
``competitive medicare agency
``Sec. 2201. (a) Establishment.--There is established, as an
independent agency in the executive branch of the Government, a
Medicare Competition Agency (in this part referred to as the `Agency').
``(b) Duty.--
``(1) In general.--It shall be the duty of the Agency to
administer the Medicare Prescription Drug and Supplemental
Benefit Program under part B of this title and the
Medicare+Choice program under part C of title XVIII.
``(2) Transition.--The Secretary of Health and Human
Services (in this title referred to as the `Secretary'), the
Commissioner of the Competitive Medicare Agency, and the
Administrator of the Health Care Financing Administration shall
establish an appropriate transition of responsibility in order
to redelegate the administration of part C from the Secretary
and the Administrator of the Health Care Financing
Administration to the Commissioner as is appropriate to carry
out the purposes of this section.
``(3) Construction.--Insofar as a responsibility of the
Secretary or the Administrator of the Health Care Financing
Administration is redelegated to the Commissioner of the
Competitive Medicare Agency under this part, any reference to
the Secretary or the Administrator of the Health Care Financing
Administration in this title or title XI with respect to such
responsibility is deemed to be a reference to such
Commissioner.
``commissioner; deputy commissioner; other officers
``Sec. 2202. (a) Commissioner of the Competitive Medicare Agency.--
``(1) Appointment.--There shall be in the Agency a
Commissioner of the Competitive Medicare Agency (in this part
referred to as the `Commissioner') who shall be appointed by
the President, by and with the advice and consent of the
Senate.
``(2) Compensation.--The Commissioner shall be compensated
at the rate provided for level I of the Executive Schedule.
``(3) Term.--
``(A) In general.--The Commissioner shall be
appointed for a term of 6 years.
``(B) Continuance in office.--In any case in which
a successor does not take office at the end of a
Commissioner's term of office, such Commissioner may
continue in office until the appointment of a
successor.
``(C) Delayed appointments.--A Commissioner
appointed to a term of office after the commencement of
such term may serve under such appointment only for the
remainder of such term.
``(D) Removal.--An individual serving in the office
of Commissioner may be removed from office only
pursuant to a finding by the President of neglect of
duty or malfeasance in office.
``(4) Responsibilities.--The Commissioner shall be
responsible for the exercise of all powers and the discharge of
all duties of the Agency, and shall have authority and control
over all personnel and activities thereof. Responsibilities of
the Commissioner shall include the following:
``(A) General responsibilities.--
``(i) Eligibility and enrollment.--
Coordinating determinations of beneficiary
eligibility and enrollment under title XVIII
and part B of this title with the Commissioner of Social Security.
``(ii) Contracting authority.--Entering
into, and enforcing, contracts with entities
for the offering of Medicare Prescription Plus
plans under part B of this title.
``(iii) Dissemination of information.--
Conducting information activities under
sections 1804 and 1851(d) of title XVIII, and
under part B of this title with respect to
benefits and limitations on payment under
Medicare Prescription Plus plans under part B
of this title, including a comparative analysis
of such plans and the quality of such plans in
the area in which the medicare beneficiary
resides. The information disseminated pursuant
to such activities shall be presented in a
manner so that medicare beneficiaries may
compare benefits under parts A and B of title
XVIII, part B of this title, and medicare
supplemental policies under section 1882 with
benefits under Medicare+Choice plans under part
C of title XVIII.
``(iv) Dissemination of appeals rights
information.--Disseminating to medicare
beneficiaries a description of procedural
rights (including grievance and appeals
procedures) of beneficiaries under the original
medicare fee-for-service program under parts A
and B of title XVIII, the Medicare+Choice
program under part C of such title, and the
Outpatient Prescription Drug and Supplemental
Benefit Program under part B of this title.
``(v) Beneficiary education program.--
Establishing a medicare beneficiary education
program to provide timely, readable, accurate,
and understandable information to medicare
beneficiaries regarding Medicare Prescription
Plus plan options.
``(B) Other responsibilities.--The Commissioner
shall carry out any responsibility provided for under
part C of title XVIII or part B of this title,
including demonstration projects carried out in part or
in whole under such parts, the programs of all-
inclusive care for the elderly (PACE program) under
section 1894, the social health maintenance
organization (SHMO) demonstration projects (referred to
in section 4104(c) of the Balanced Budget Act of 1997),
and through a Medicare+Choice project that demonstrates
the application of capitation payment rates for frail
elderly medicare beneficiaries through the use of an
interdisciplinary team and through the provision of
primary care services to such beneficiaries by means of
such a team at the nursing facility involved).
``(C) Annual reports.--Not later than March 31 of
each year, the Commissioner shall submit to Congress
and the President a report on the administration of
part C of title XVIII and part B of this title during
the previous fiscal year.
``(5) Promulgation of rules and regulations.--
``(A) In general.--The Commissioner may prescribe
such rules and regulations as the Commissioner
determines necessary or appropriate to carry out the
functions of the Agency.
``(B) Rulemaking.--The regulations prescribed by
the Commissioner shall be subject to the rulemaking
procedures established under section 553 of title 5,
United States Code.
``(6) Delegation of authority.--
``(A) In general.--The Commissioner may assign
duties, and delegate, or authorize successive
redelegations of, authority to act and to render
decisions, to such officers and employees of the Agency
as the Commissioner may find necessary.
``(B) Effect of delegation.--Within the limitations
of such delegations, redelegations, or assignments, all
official acts and decisions of such officers and
employees shall have the same force and effect as
though performed or rendered by the Commissioner.
``(7) Consultation with secretary of health and human
services.--The Commissioner and the Secretary shall consult, on
an ongoing basis, to ensure--
``(A) the coordination of the programs administered
by the Commissioner under part C of title XVIII and
part B of this title with the programs administered by
the Secretary under parts A and B of title XVIII and
under title XIX; and
``(B) that adequate information concerning benefits
under parts A and B of title XVIII and title XIX is
available to the public.
``(b) Deputy Commissioner of the Competitive Medicare Agency.--
``(1) Appointment.--There shall be in the Agency a Deputy
Commissioner of the Competitive Medicare Agency (in this part
referred to as the `Deputy Commissioner') who shall be
appointed by the President, by and with the advice and consent
of the Senate.
``(2) Term.--
``(A) In general.--The Deputy Commissioner shall be
appointed for a term of 6 years.
``(B) Continuance in office.--In any case in which
a successor does not take office at the end of a Deputy
Commissioner's term of office, such Deputy Commissioner
may continue in office until the entry upon office of
such a successor.
``(C) Delayed appointment.--A Deputy Commissioner
appointed to a term of office after the commencement of
such term may serve under such appointment only for the
remainder of such term.
``(3) Compensation.--The Deputy Commissioner shall be
compensated at the rate provided for level II of the Executive
Schedule.
``(4) Duties.--
``(A) In general.--The Deputy Commissioner shall
perform such duties and exercise such powers as the
Commissioner shall from time to time assign or
delegate.
``(B) Acting commissioner.--The Deputy Commissioner
shall be Acting Commissioner of the Agency during the
absence or disability of the Commissioner, unless the
President designates another officer of the Government
as Acting Commissioner, in the event of a vacancy in
the office of the Commissioner.
``(c) Chief Actuary.--
``(1) Appointment.--
``(A) In general.--There shall be in the Agency a
Chief Actuary, who shall be appointed by, and in direct
line of authority to, the Commissioner.
``(B) Qualifications.--The Chief Actuary shall be
appointed from individuals who have demonstrated, by
their education and experience, superior expertise in
the actuarial sciences.
``(C) Duties.--The Chief Actuary shall serve as the
chief actuarial officer of the Agency, and shall
exercise such duties as are appropriate for the office
of the Chief Actuary and in accordance with
professional standards of actuarial independence.
``(2) Compensation.--The Chief Actuary shall be compensated
at the highest rate of basic pay for the Senior Executive
Service under section 5382(b) of title 5, United States Code.
``administrative duties of the commissioner
``Sec. 2203. (a) Personnel.--
``(1) In general.--The Commissioner may employ, without
regard to chapter 31 of title 5, United States Code, such
officers and employees as are necessary to administer the
activities to be carried out through the Competitive Medicare
Agency.
``(2) Flexibility with respect to civil service laws.--
``(A) In general.--The staff of the Competitive
Medicare Agency shall be appointed without regard to
the provisions of title 5, United States Code,
governing appointments in the competitive service, and,
subject to subparagraph (B), shall be paid without
regard to the provisions of chapters 51 and 53 of such
title (relating to classification and schedule pay
rates).
``(B) Maximum rate.--In no case may the rate of
compensation determined under subparagraph (A) exceed
the rate of basic pay payable for level IV of the
Executive Schedule under section 5315 of title 5,
United States Code.
``(b) Budgetary Matters.--
``(1) Submission of annual budget.--The Commissioner shall
prepare an annual budget for the Agency, which shall be
submitted by the President to Congress without revision,
together with the President's annual budget for the Agency.
``(2) Appropriations requests.--
``(A) Staffing and personnel.--Appropriations
requests for staffing and personnel of the Agency shall
be based upon a comprehensive work force plan, which
shall be established and revised from time to time by
the Commissioner.
``(B) Administrative expenses.--Appropriations for
administrative expenses of the Agency are authorized to
be provided on a biennial basis.
``(c) Seal of Office.--
``(1) In general.--The Commissioner shall cause a seal of
office to be made for the Agency of such design as the
Commissioner shall approve.
``(2) Judicial notice.--Judicial notice shall be taken of
the seal made under paragraph (1).
``(d) Data Exchanges.--
``(1) Disclosure of records and other information.--
Notwithstanding any other provision of law (including
subsection (b), (o), (p), (q), (r), and (u) of section 552a of
title 5, United States Code)--
``(A) the Secretary shall disclose to the
Commissioner any record or information requested in
writing by the Commissioner for the purpose of
administering any program administered by the
Commissioner, if records or information of such type
were disclosed to the Administrator of the Health Care
Financing Administration in the Department of Health
and Human Services under applicable rules, regulations,
and procedures in effect before the date of enactment
of the Medicare Prescription Drug and Modernization Act of 2000; and
``(B) the Commissioner shall disclose to the
Secretary or to any State any record or information
requested in writing by the Secretary to be so
disclosed for the purpose of administering any program
administered by the Secretary, if records or
information of such type were so disclosed under
applicable rules, regulations, and procedures in effect
before the date of enactment of the Medicare
Prescription Drug and Modernization Act of 2000.
``(2) Exchange of other data.--The Commissioner and the
Secretary shall periodically review the need for exchanges of
information not referred to in paragraph (1) and shall enter
into such agreements as may be necessary and appropriate to
provide information to each other or to States in order to meet
the programmatic needs of the requesting agencies.
``(3) Routine use.--
``(A) In general.--Any disclosure from a system of
records (as defined in section 552a(a)(5) of title 5,
United States Code) pursuant to this subsection shall
be made as a routine use under subsection (b)(3) of
section 552a of such title (unless otherwise authorized
under such section 552a).
``(B) Computerized comparison.--Any computerized
comparison of records, including matching programs,
between the Commissioner and the Secretary shall be
conducted in accordance with subsections (o), (p), (q),
(r), and (u) of section 552a of title 5, United States
Code.
``(4) Timely action.--The Commissioner and the Secretary
shall each ensure that timely action is taken to establish any
necessary routine uses for disclosures required under paragraph
(1) or agreed to pursuant to paragraph (2).
``medicare competition and prescription drug advisory board
``Sec. 2204. (a) Establishment of Board.--There is established a
Medicare Competition and Prescription Drug Advisory Board (in this
section referred to as the `Board').
``(b) Advice on Policies; Reports.--
``(1) Advice on policies.--On and after the date the
Commissioner takes office, the Board shall advise the
Commissioner on policies relating to the Medicare Competition
and Prescription Drug Program under part B of this title and
the Medicare+Choice program under part C of title XVIII.
``(2) Reports.--
``(A) In general.--With respect to matters of the
administration of part C of title XVIII and part B of
this title, the Board shall submit to Congress and to
the Commissioner of the Competitive Medicare Agency
such reports as the Board determines appropriate. Each
such report may contain such recommendations as the
Board determines appropriate for legislative or
administrative changes to improve the administration of
such parts. Each such report shall be published in the
Federal Register.
``(B) Maintaining independence of board.--The Board
shall directly submit to Congress reports required
under subparagraph (A). No officer or agency of the
United States may require the Board to submit to any
officer or agency of the United States for approval,
comments, or review, prior to the submission to
Congress of such reports.
``(c) Structure and Membership of the Board.--
``(1) Membership.--The Board shall be composed of 7 members
who shall be appointed as follows:
``(A) Presidential appointments.--
``(i) In general.--3 members shall be
appointed by the President, by and with the
advice and consent of the Senate.
``(ii) Limitation.--Not more than 2 of such
members shall be from the same political party.
``(B) Senatorial appointments.--2 members (each
member from a different political party) shall be
appointed by the President pro tempore of the Senate
with the advice of the Chairman and the Ranking
Minority Member of the Committee on Finance of the
Senate.
``(C) Congressional appointments.--2 members (each
member from a different political party) shall be
appointed by the Speaker of the House of
Representatives, with the advice of the Chairman and
the Ranking Minority Member of the Committee on Ways
and Means of the House of Representatives.
``(2) Qualifications.--The members shall be chosen on the
basis of their integrity, impartiality, and good judgment, and
shall be individuals who are, by reason of their education,
experience, and attainments, exceptionally qualified to perform
the duties of members of the Board.
``(d) Terms of Appointment.--
``(1) In general.--Subject to paragraph (2) each member of
the Board shall serve for a term of 6 years.
``(2) Continuance in office and staggered terms.--
``(A) Continuance in office.--A member appointed to
a term of office after the commencement of such term
may serve under such appointment only for the remainder
of such term.
``(B) Staggered terms.--The terms of service of the
members initially appointed under this section shall
begin on January 1, 2002, and expire as follows:
``(i) Presidential appointments.--The terms
of service of the members initially appointed
by the President shall expire as designated by
the President at the time of nomination, 1 each
at the end of--
``(I) 2 years;
``(II) 4 years; and
``(III) 6 years.
``(ii) Senatorial appointments.--The terms
of service of members initially appointed by
the President pro tempore of the Senate shall
expire as designated by the President pro
tempore of the Senate at the time of
nomination, 1 each at the end of--
``(I) 3 years; and
``(II) 6 years.
``(iii) Congressional appointments.--The
terms of service of members initially appointed
by the Speaker of the House of Representatives
shall expire as designated by the Speaker of
the House of Representatives at the time of
nomination, 1 each at the end of--
``(I) 4 years; and
``(II) 5 years.
``(C) Reappointments.--Any person appointed as a
member of the Board may not serve for more than 8
years.
``(D) Vacancies.--Any member appointed to fill a
vacancy occurring before the expiration of the term for
which the member's predecessor was appointed shall be
appointed only for the remainder of that term. A member
may serve after the expiration of that member's term
until a successor has taken office. A vacancy in the
Board shall be filled in the manner in which the
original appointment was made.
``(e) Chairperson.--A member of the Board shall be designated by
the President to serve as Chairperson for a term of 4 years, coincident
with the term of the President, or until the designation of a
successor.
``(f) Expenses and Per Diem.--Members of the Board shall serve
without compensation, except that, while serving on business of the
Board away from their homes or regular places of business, members may
be allowed travel expenses, including per diem in lieu of subsistence,
as authorized by section 5703 of title 5, United States Code, for
persons in the Government employed intermittently.
``(g) Meeting.--
``(1) In general.--The Board shall meet at the call of the
Chairperson (in consultation with the other members of the
Board) not less than 4 times each year to consider a specific
agenda of issues, as determined by the Chairperson in
consultation with the other members of the Board.
``(2) Quorum.--Four members of the Board (not more than 3
of whom may be of the same political party) shall constitute a
quorum for purposes of conducting business.
``(h) Federal Advisory Committee Act.--The Board shall be exempt
from the provisions of the Federal Advisory Committee Act (5 U.S.C.
App.).
``(i) Personnel.--
``(1) Staff director.--The Board shall, without regard to
the provisions of title 5, United States Code, relating to the
competitive service, appoint a Staff Director who shall be paid
at a rate equivalent to a rate established for the Senior
Executive Service under section 5382 of title 5, United States
Code.
``(2) Staff.--
``(A) In general.--The Board may employ, without
regard to chapter 31 of title 5, United States Code,
such officers and employees as are necessary to
administer the activities to be carried out by the
Board.
``(B) Flexibility with respect to civil service
laws.--
``(i) In general.--The staff of the Board
shall be appointed without regard to the
provisions of title 5, United States Code,
governing appointments in the competitive
service, and, subject to clause (ii), shall be
paid without regard to the provisions of
chapters 51 and 53 of such title (relating to
classification and schedule pay rates).
``(ii) Maximum rate.--In no case may the
rate of compensation determined under clause
(i) exceed the rate of basic pay payable for
level IV of the Executive Schedule under
section 5315 of title 5, United States Code.
``(j) Authorization of Appropriations.--There are authorized to be
appropriated, out of the Federal Hospital Insurance Trust Fund and the
Federal Supplemental Medical Insurance Trust Fund, and the general fund
of the Treasury, such sums as are necessary to carry out the purposes
of this section.''.
(b) Effective Date.--
(1) In general.--The amendment made by subsection (a) shall
take effect on the date of enactment of this Act.
(2) Timing of initial appointments.--The Commissioner and
Deputy Commissioner of the Competitive Medicare Agency may not
be appointed before March 1, 2001.
(3) Duties with respect to eligibility determinations and
enrollment.--The Commissioner of the Competitive Medicare
Agency shall carry out enrollment under title XVIII of the
Social Security Act, make eligibility determinations under such
title, and carry out part C of such title for years beginning
on or after January 1, 2003.
SEC. 102. COMMISSIONER AS MEMBER OF THE BOARD OF TRUSTEES OF THE
MEDICARE TRUST FUNDS.
(a) In General.--Sections 1817(b) and 1841(b) of the Social
Security Act (42 U.S.C. 1395i(b); 1395t(b)) are each amended by
striking ``and the Secretary of Health and Human Services, all ex
officio,'' and inserting ``, the Secretary of Health and Human
Services, and the Commissioner of the Competitive Medicare Agency, all
ex officio,''.
(b) Effective Date.--The amendments made by this subsection shall
take effect on March 1, 2001.
SEC. 103. SALARY INCREASE FOR THE HCFA ADMINISTRATOR.
(a) In General.--Section 5314 of title 5, United States Code, is
amended by adding at the end the following:
``Administrator of the Health Care Financing
Administration.''.
(b) Conforming Amendment.--Section 5315 of such title is amended by
striking ``Administrator of the Health Care Financing
Administration.''.
(c) Effective Date.--The amendments made by this subsection take
effect on March 1, 2001.
Subtitle B--Redefined Medicare Solvency Measures
SEC. 151. REQUIREMENTS FOR ANNUAL FINANCIAL REPORTING AND OVERSIGHT OF
MEDICARE PROGRAM.
(a) In General.--Section 1817 of the Social Security Act (42 U.S.C.
1395i) is amended by adding at the end the following new subsection:
``(l) Combined Report on Operation and Status of the Trust Fund and
the Federal Supplementary Medical Insurance Trust Fund.--
``(1) In general.--In addition to the duty of the Board of
Trustees to report to Congress under subsection (b), on the
date the Board submits the report required under subsection
(b)(2), the Board shall submit to Congress a report on the
operation and status of the Trust Fund and the Federal
Supplementary Medical Insurance Trust Fund established under
section 1841, including the Medicare Prescription Drug Account
within such Trust Fund (in this subsection referred to as the
`Trust Funds'). Such report shall include the following
information:
``(A) Overall spending from the general fund of the
treasury.--A statement of total amounts obligated
during the preceding fiscal year from the General
Revenues of the Treasury to the Trust Funds for payment
for benefits covered under this title and part B of
title XXII, stated in terms of the total amount and in
terms of the percentage such amount bears to all other
amounts obligated from such General Revenues during
such fiscal year.
``(B) Historical overview of spending.--From the
date of the inception of the program of insurance under
this title through the fiscal year involved, a
statement of the total amounts referred to in
subparagraph (A).
``(C) 10-year and 50-year projections.--An estimate
of total amounts referred to in subparagraph (A)
required to be obligated for payment for benefits
covered under this title for each of the 10 fiscal
years succeeding the fiscal year involved and for the
50-year period beginning with the succeeding fiscal
year.
``(D) Relation to gdp growth.--A comparison of the
rate of growth of the total amounts referred to in
subparagraph (A) to the rate of growth in the gross
domestic product for the same period.
``(2) Publication.--Each report submitted under paragraph
(1) shall be published by the Committee on Ways and Means as a
public document.''.
(b) Effective Date.--The amendment made by subsection (a) shall
apply with respect to fiscal years beginning on or after the date of
enactment of this Act.
(c) Congressional Hearings.--It is the sense of Congress that the
committees of jurisdiction shall hold hearings on the reports submitted
under section 1817(l) (42 U.S.C. 1395i(l)) of the Social Security Act.
TITLE II--MEDICARE PRESCRIPTION DRUG AND SUPPLEMENTAL BENEFIT PROGRAM
SEC. 201. ESTABLISHMENT OF PROGRAM.
(a) In General.--Title XXII of the Social Security Act, as added by
section 101, is amended by adding at the end the following new part:
``Part B--Medicare Prescription Drug and Supplemental Benefit Program
``establishment of prescription drug and supplemental benefit program
``Sec. 2221. (a) Provision of Benefit.--The Commissioner shall
establish a Prescription Drug and Supplemental Benefit Program under
which an eligible beneficiary may voluntarily enroll and receive access
to covered outpatient prescription drugs and other benefits through
enrollment in a Medicare Prescription Plus plan offered by a private
entity or a Medicare+Choice plan offered by a Medicare+Choice
organization.
``(b) Program To Begin in 2003.--The Commissioner shall establish
the program under this part in a manner so that benefits are first
provided for months beginning with January 2003.
``(c) Voluntary Nature of Program.--Nothing in this part shall be
construed as requiring an eligible beneficiary to enroll in the program
under this part.
``(d) Financing.--The costs of providing benefits under this part
shall be payable from the Medicare Prescription Drug Account.
``(e) No Effect on Title XVIII Benefits.--The program under this
part shall have no effect on the entitlement to benefits under title
XVIII.
``enrollment under program
``Sec. 2222. (a) Establishment of Process.--
``(1) In general.--The Commissioner shall establish a
process through which an eligible beneficiary (including an
eligible beneficiary enrolled in a Medicare+Choice plan offered
by a Medicare+Choice organization) may make an election to
enroll under the program under this part. Except as otherwise
provided in this section, such process shall be similar to the
process for enrollment in part B under section 1837.
``(2) Requirement of enrollment.--An eligible beneficiary
must enroll under this part in order to be eligible to receive
benefits under this part.
``(b) Enrollment Period.--
``(1) In general.--Except as provided in paragraph (2) or
(3), an eligible beneficiary may not enroll in the program
under this part during any period after the beneficiary's
initial enrollment period.
``(2) Open enrollment period for beneficiaries currently
covered.--In the case of an individual who is entitled to part
A of title XVIII and enrolled under part B of such title as of
November 1, 2002, there shall be an open enrollment period of 6
months beginning on that date.
``(3) Special enrollment period for beneficiaries that lose
other drug coverage.--
``(A) In general.--Subject to subparagraph (D), in
the case of an applicable eligible beneficiary, the
Commissioner shall establish procedures for permitting
such beneficiary to enroll under the program under this
part.
``(B) Applicable eligible beneficiary.--For
purposes of this paragraph, the term `applicable
eligible beneficiary' means an eligible beneficiary
who--
``(i) had applicable drug coverage; and
``(ii) involuntarily lost such coverage.
``(C) Applicable drug coverage defined.--For
purposes of subparagraph (B), the term `applicable drug
coverage' means any of the following prescription drug
coverage:
``(i) Medicaid prescription drug
coverage.--Prescription drug coverage under a
medicaid plan under title XIX, including
through the Program of All-inclusive Care for
the Elderly (PACE) under section 1934, through
a social health maintenance organization
(referred to in section 4104(c) of the Balanced
Budget Act of 1997), or through a
Medicare+Choice project that demonstrates the
application of capitation payment rates for
frail elderly medicare beneficiaries through
the use of a interdisciplinary team and through
the provision of primary care services to such
beneficiaries by means of such a team at the
nursing facility involved.
``(ii) Prescription drug coverage under
group health plan.--Any outpatient prescription
drug coverage under a group health plan,
including a health benefits plan under the
Federal Employees Health Benefit Plan under
chapter 89 of title 5, United States Code, and
a qualified retiree prescription drug plan (as
defined in section 2232(e)(1)).
``(iii) Prescription drug coverage under
certain medigap policies.--Coverage under a
medicare supplemental policy under section 1882
that provides benefits for prescription drugs
(whether or not such coverage conforms to the
standards for packages of benefits under
section 1882(p)(1)), but only if the policy was
in effect on January 1, 2003.
``(iv) State pharmaceutical assistance
program.--Coverage of prescription drugs under
a State pharmaceutical assistance program.
``(v) Veterans' coverage of prescription
drugs.--Coverage of prescription drugs for
veterans under chapter 17 of title 38, United
States Code.
``(D) Requirements.--The procedures established
under subparagraph (A) shall require that an applicable
eligible beneficiary--
``(i) seek to enroll under the program not
later than 63 days after the date that the
beneficiary lost applicable drug coverage; and
``(ii) submit evidence of the date that the
beneficiary lost such coverage along with the
application for enrollment in the program under
this part.
``(4) Study and report on permitting part b only
individuals to enroll in program.--
``(A) Study.--The Commissioner shall conduct a
study on the need for rules relating to permitting
individuals who are enrolled under part B of title
XVIII but are not entitled to benefits under part A to
buy into the program under this part.
``(B) Report.--Not later than January 1, 2002, the
Commissioner shall submit a report to Congress on the
study conducted under subparagraph (A), together with
any recommendations for legislation that the
Commissioner determines to be appropriate as a result
of such study.
``(c) Period of Coverage.--
``(1) In general.--Except as provided in paragraph (2) and
subject to paragraph (3), an eligible beneficiary's coverage
under the program under this part shall be effective for the
period provided in section 1838, as if that section applied to
the program under this part.
``(2) Enrollment during open and special enrollment.--
Subject to paragraph (3), an eligible beneficiary who enrolls
under the program under this part pursuant to paragraph (2) or
(3) of subsection (b) shall be entitled to the benefits under
this part beginning on the first day of the month following the
month in which such enrollment occurs.
``(3) Limitation.--Coverage under this part shall not begin
prior to January 1, 2003.
``(d) Program Coverage Terminated by Termination of Coverage Under
Parts A and B of Title XVIII.--
``(1) In general.--In addition to the causes of termination
specified in section 1838, the Commissioner shall terminate an
individual's coverage under the program under this part if the
individual is no longer enrolled in both parts A and B of title
XVIII.
``(2) Effective date.--The termination described in
paragraph (1) shall be effective on the effective date of
termination of coverage under part A of title XVIII or (if
earlier) under part B of such title.
``(e) First Enrollment Period.--The Commissioner shall ensure that
eligible beneficiaries are permitted to enroll under this part prior to
January 1, 2003, in order to ensure that coverage under this part is
effective as of such date.
``election of a medicare prescription plus plan
``Sec. 2223. (a) In General.--
``(1) Process.--
``(A) In general.--Subject to paragraph (2), the
Commissioner shall establish a process through which an
eligible beneficiary who is enrolled under this part
shall make an annual election to enroll in a Medicare
Prescription Plus plan offered by an eligible entity
that serves the geographic area in which the
beneficiary resides.
``(B) Rules.--In establishing the process under
subparagraph (A), the Commissioner shall use rules that
are consistent with the rules for enrollment and
disenrollment with a Medicare+Choice plan under section
1851, including--
``(i) annual, coordinated election periods,
which shall be coordinated with such periods
under part C of title XVIII;
``(ii) special election periods under
subsection (e)(4) of section 1851; and
``(iii) the guaranteed issue requirements
under subsection (g) of such section.
``(2) Medicare+choice enrollees.--An eligible beneficiary
who is enrolled under this part and enrolled in a
Medicare+Choice plan offered by a Medicare+Choice organization
shall receive coverage of benefits under this part through such
plan if such plan provides qualified prescription drug
coverage. If the Medicare+Choice plan in which the beneficiary
is enrolled does not provide such coverage, the beneficiary
shall receive such coverage through the election of a Medicare
Prescription Plus plan offered by an eligible entity under this
part.
``(b) Assuring Access to Prescription Drug Coverage in Areas With
No Medicare Prescription Plus Plan or Medicare+Choice Plan Providing
Drug Coverage Available.--The Commissioner shall develop procedures for
the provision of the benefits required under section 2225(a) to each
eligible beneficiary that resides in an area where there are no
Medicare Prescription Plus plans or Medicare+Choice plans available
that provide qualified prescription drug coverage.
``beneficiary information
``Sec. 2224. (a) In General.--The Commissioner shall conduct
activities that are designed to broadly disseminate information to
eligible beneficiaries (and prospective eligible beneficiaries)
regarding the coverage provided under this part.
``(b) Requirements.--The activities conducted under this subsection
shall be--
``(1) similar to the activities performed by the
Commissioner under section 1851(d), including the dissemination
of comparative information; and
``(2) coordinated with the activities performed by the
Commissioner under such section and under section 1804.
``outpatient prescription drug and other supplemental benefits
``Sec. 2225. (a) Requirements.--
``(1) In general.--For purposes of this part and part C of
title XVIII, the term `qualified prescription drug coverage'
means either of the following:
``(A) Standard coverage with access to negotiated
prices.--Standard coverage (as defined in subsection
(d)) and access to negotiated prices under subsection
(f).
``(B) Actuarially equivalent coverage with access
to negotiated prices.--Coverage of covered outpatient
drugs which meets the alternative coverage requirements
of subsection (e) and access to negotiated prices under
subsection (f).
``(2) Permitting additional outpatient prescription drug
coverage.--
``(A) In general.--Subject to subparagraph (B) and
section 2229(c)(2), nothing in this part shall be
construed as preventing qualified prescription drug
coverage from including coverage of covered outpatient
drugs that exceeds the coverage required under
paragraph (1).
``(B) Requirement.--An eligible entity may not
offer a Medicare Prescription Plus plan that provides
additional benefits pursuant to subparagraph (A) in an
area unless the eligible entity offering such plan also
offers a Medicare Prescription Plus plan in the area
that only provides the coverage of prescription drugs
that is required under subsection (a)(1).
``(3) Cost control mechanisms.--In providing qualified
prescription drug coverage, the entity offering the Medicare
Prescription Plus plan or the Medicare+Choice plan may use cost
control mechanisms that are customarily used in employer-
sponsored health care plans that offer coverage for outpatient
prescription drugs, including the use of formularies, tiered
copayments, selective contracting with providers of outpatient
prescription drugs, and mail order pharmacies.
``(b) Permitting Benefits in Addition to Outpatient Prescription
Drug Coverage.--
``(1) In general.--Subject to paragraph (2) and section
2229(c)(2), nothing in this part shall be construed as
preventing a Medicare Prescription Plus plan from including
coverage of benefits that are in addition to the benefits
available under title XVIII, including coverage of beneficiary
cost-sharing for benefits under such title.
``(2) Requirements.--An eligible entity may not offer a
Medicare Prescription Plus plan that provides additional
benefits pursuant to paragraph (1) in an area unless--
``(A) the eligible entity offering such plan also
offers a Medicare Prescription Plus plan in the area
that only provides the coverage of prescription drugs
that is required under subsection (a)(1); and
``(B) if the additional benefits include any of the
core group of basic benefits described in section
1882(p)(2)(B), the Medicare Prescription Plus plan
provides all of such core group of basic benefits.
``(c) Application of Secondary Payor Provisions.--The provisions of
section 1852(a)(4) shall apply under this part in the same manner as
they apply under part C of title XVIII.
``(d) Standard Coverage.--For purposes of this part and part C of
title XVIII, the `standard coverage' is coverage of covered outpatient
drugs that meets the following requirements:
``(1) Deductible.--The coverage has an annual deductible--
``(A) for 2003, that is equal to $250; or
``(B) for a subsequent year, that is equal to the
amount specified under this paragraph for the previous
year increased by the percentage specified in paragraph
(5) for the year involved.
Any amount determined under subparagraph (B) that is not a
multiple of $5 shall be rounded to the nearest multiple of $5.
``(2) Limits on cost-sharing.--The coverage has cost-
sharing (for costs above the annual deductible specified in
paragraph (1) and up to the initial coverage limit under
paragraph (3)) that is equal to 50 percent or that is
actuarially consistent (using processes established under
subsection (g)) with an average expected payment of 50 percent
of such costs.
``(3) Initial coverage limit.--Subject to paragraph (4),
the coverage has an initial coverage limit on the maximum costs
that may be recognized for payment purposes (above the annual
deductible)--
``(A) for 2003, that is equal to $2,100; or
``(B) for a subsequent year, that is equal to the
amount specified in this paragraph for the previous
year, increased by the annual percentage increase
described in paragraph (5) for the year involved.
Any amount determined under subparagraph (B) that is not a
multiple of $25 shall be rounded to the nearest multiple of
$25.
``(4) Limitation on out-of-pocket expenditures by
beneficiary.--
``(A) In general.--Notwithstanding paragraph (3),
the coverage provides benefits without any cost-sharing
after the individual has incurred costs (as described
in subparagraph (C)) for covered outpatient drugs in a
year equal to the annual out-of-pocket limit specified
in subparagraph (B).
``(B) Annual out-of-pocket limit.--For purposes of
this part, the `annual out-of-pocket limit' specified
in this subparagraph--
``(i) for 2003, is equal to $6,000; or
``(ii) for a subsequent year, is equal to
the amount specified in the subparagraph for
the previous year, increased by the annual
percentage increase described in paragraph (5)
for the year involved.
Any amount determined under clause (ii) that is not a
multiple of $100 shall be rounded to the nearest
multiple of $100.
``(C) Application.--In applying subparagraph (A)--
``(i) incurred costs shall only include
costs incurred for the annual
deductible (described in paragraph (1)), cost-sharing (described in
paragraph (2)), and amounts for which benefits are not provided because
of the application of the initial coverage limit described in paragraph
(3); but
``(ii) costs shall be treated as incurred
without regard to whether the individual or
another person, including a State program, has
paid for such costs, but shall not be counted
insofar as such costs are covered as benefits
under a Medicare Prescription Plus plan, a
Medicare+Choice plan, or other third-party
coverage.
``(5) Annual percentage increase.--For purposes of this
part, the annual percentage increase specified in this
paragraph for a year is equal to the annual percentage increase
in average per capita aggregate expenditures for covered
outpatient drugs in the United States for medicare
beneficiaries, as determined by the Commissioner for the 12-
month period ending in July of the previous year.
``(e) Alternative Coverage Requirements.--A Medicare Prescription
Plus plan or Medicare+Choice plan may provide a different prescription
drug benefit design from the standard coverage described in subsection
(d) so long as the following requirements are met:
``(1) Assuring at least actuarially equivalent coverage.--
``(A) Assuring equivalent value of total
coverage.--The actuarial value of the total coverage
(as determined under subsection (g)) is at least equal
to the actuarial value (as so determined) of standard
coverage.
``(B) Assuring equivalent unsubsidized value of
coverage.--The unsubsidized value of the coverage is at
least equal to the unsubsidized value of standard
coverage. For purposes of this subparagraph, the
unsubsidized value of coverage is the amount by which
the actuarial value of the coverage (as determined
under subsection (g)) exceeds the actuarial value of
the reinsurance subsidy payments under section 2232
with respect to such coverage.
``(C) Assuring standard payment for costs at
initial coverage limit.--The coverage is designed,
based upon an actuarially representative pattern of
utilization (as determined under subsection (g)), to
provide for the payment, with respect to costs incurred
that are equal to the sum of the deductible under
subsection (d)(1) and the initial coverage limit under
subsection (d)(3), of an amount equal to at least such
initial coverage limit multiplied by the percentage
specified in subsection (d)(2).
Benefits other than qualified prescription drug coverage shall
not be taken into account for purposes of this paragraph.
``(2) Limitation on out-of-pocket expenditures by
beneficiaries.--The coverage provides the limitation on out-of-
pocket expenditures by beneficiaries described in subsection
(d)(4).
``(f) Access to Negotiated Prices.--Under qualified prescription
drug coverage offered by an eligible entity or a Medicare+Choice
organization, the entity or organization shall provide beneficiaries
with access to negotiated prices (including applicable discounts) used
for payment for covered outpatient drugs, regardless of the fact that
no benefits may be payable under the coverage with respect to such
drugs because of the application of cost-sharing or an initial coverage
limit (described in subsection (d)(3)). In providing such access, the
eligible entity or Medicare+Choice organization shall issue a card
pursuant to section 2226(b)(1).
``(g) Actuarial Valuation; Determination of Annual Percentage
Increases.--
``(1) Processes.--For purposes of this section, the
Commissioner shall establish processes and methods--
``(A) for determining the actuarial valuation of
prescription drug coverage, including--
``(i) an actuarial valuation of standard
coverage and of the reinsurance subsidy
payments under section 2232;
``(ii) the use of generally accepted
actuarial principles and methodologies; and
``(iii) applying the same methodology for
determinations of alternative coverage under
subsection (e) as is used with respect to
determinations of standard coverage under
subsection (d); and
``(B) for determining annual percentage increases
described in subsection (d)(5).
``(2) Use of outside actuaries.--Under the processes under
paragraph (1)(A), eligible entities and Medicare+Choice
organizations may use actuarial opinions certified by
independent, qualified actuaries to establish actuarial values.
``beneficiary protections
``Sec. 2226. (a) Dissemination of Information.--
``(1) General information.--An eligible entity offering a
Medicare Prescription Plus plan shall disclose, in a clear,
accurate, and standardized form to each enrollee at the time of
enrollment and at least annually thereafter, the information
described in section 1852(c)(1) relating to such plan. Such
information includes the following:
``(A) Access to covered outpatient drugs.
``(B) How any formulary used by the entity
functions.
``(C) Co-payments, coinsurance, and deductible
requirements.
``(D) Grievance and appeals procedures.
``(2) Disclosure upon request of general coverage,
utilization, and grievance information.--Upon request of an
individual eligible to enroll in a Medicare Prescription Plus
plan, the eligible entity offering such plan shall provide the
information described in section 1852(c)(2) to such individual.
``(3) Response to beneficiary questions.--An eligible
entity offering a Medicare Prescription Plus plan shall have a
mechanism for providing specific information to enrollees upon request,
including information on specific changes in its formulary.
``(4) Claims information.--An eligible entity offering a
Medicare Prescription Plus plan must furnish to enrolled
individuals in a form easily understandable to such individuals
an explanation of benefits (in accordance with section 1806(a)
or in a comparable manner) and a notice of the benefits in
relation to initial coverage limit and annual out-of-pocket
limit for the current year, whenever prescription drug benefits
are provided under this part (except that such notice need not
be provided more often than monthly).
``(b) Access to Covered Outpatient Drugs.--
``(1) Access to negotiated prices for prescription drugs.--
An eligible entity offering a Medicare Prescription Plus plan
shall issue such a card that may be used by an enrolled
beneficiary to assure access to negotiated prices under section
2225(f) for the purchase of prescription drugs for which
coverage is not otherwise provided under the Medicare
Prescription Plus plan.
``(2) Requirements on development and application of
formularies.--Insofar as an eligible entity offering a Medicare
Prescription Plus plan uses a formulary with respect to
qualified prescription drug coverage, the following
requirements must be met:
``(A) Inclusion of drugs in all therapeutic
categories.--The formulary must include drugs within
all therapeutic categories and classes of covered
outpatient drugs (although not necessarily for all
drugs within such categories and classes).
``(B) Appeals and exceptions to application.--The
eligible entity must have, as part of the appeals
process under subsection (e)(2), a process for appeals
for denials of coverage based on such application of
the formulary.
``(c) Cost and Utilization Management.--
``(1) In general.--An eligible entity shall have in place--
``(A) an effective cost and drug utilization
management program, including appropriate incentives to
use generic drugs, when appropriate;
``(B) quality assurance measures to reduce medical
errors and adverse drug interactions, which may include
the measures described in paragraph (2); and
``(C) a program to control fraud, abuse, and waste.
``(2) Measures.--The measures described in this paragraph
are beneficiary education programs, counseling, medication
refill reminders, and special packaging.
``(d) Grievance Mechanism.--An eligible entity shall provide
meaningful procedures for hearing and resolving grievances between the
eligible entity (including any entity or individual through which the
eligible entity provides covered benefits) and enrollees in a Medicare
Prescription Plus plan offered by the eligible entity in accordance
with section 1852(f).
``(e) Coverage Determinations, Reconsiderations, and Appeals.--
``(1) In general.--An eligible entity shall meet the
requirements of section 1852(g) with respect to covered
benefits under the Medicare Prescription Plus plan it offers
under this part in the same manner as such requirements apply
to a Medicare+Choice organization with respect to benefits it
offers under a Medicare+Choice plan under part C of title
XVIII.
``(2) Appeals of formulary determinations.--Consistent with
the requirements of section 1852(g), an eligible entity shall
establish a process for appeals of formulary determinations.
``(f) Confidentiality and Accuracy of Enrollee Records.--An
eligible entity shall meet the requirements of section 1852(h) with
respect to enrollees under this part in the same manner as such
requirements apply to a Medicare+Choice organization with respect to
enrollees under part C of title XVIII.
``(g) Uniform Premium.--An eligible entity shall ensure that the
premium for a Medicare Prescription Plus plan charged under this
section is the same for all individuals enrolled in the plan in the
same service area.
``requirements for entities offering medicare prescription plus plans
``Sec. 2227. (a) General Requirements.--An eligible entity offering
a Medicare Prescription Plus plan shall meet the following
requirements:
``(1) Licensure.--Subject to subsection (c), the entity is
organized and licensed under State law as a risk-bearing entity
eligible to offer health insurance or health benefits coverage
in each State in which it offers a Medicare Prescription Plus
plan.
``(2) Assumption of full financial risk.--
``(A) In general.--Subject to subparagraph (B), the
entity assumes full financial risk on a prospective
basis for the benefits that it offers under a Medicare
Prescription Plus plan and that is not covered under
reinsurance under section 2232.
``(B) Reinsurance permitted.--The entity may obtain
insurance or make other arrangements for the cost of
coverage provided to any enrolled member under this
part.
``(3) Solvency for unlicensed entities.--In the case of an
eligible entity that is not described in paragraph (1), the
entity shall meet solvency standards established by the
Commissioner under subsection (d).
``(b) Contract Requirements.--The Commissioner shall not permit an
eligible beneficiary to elect a Medicare Prescription Plus plan offered
by an eligible entity under this part, and the entity shall not be
eligible for payments under section 2230, 2231(e), or 2232, unless the
Commissioner has entered into a contract under this subsection with the
entity with respect to the offering of such plan. Such a contract with
an entity may cover more than 1 Medicare Prescription Plus plan. Such
contract shall provide that the entity agrees to comply with the
applicable requirements and standards of this part and the terms and
conditions of payment as provided for in this part.
``(c) Waiver of Certain Requirements To Expand Choice.--
``(1) In general.--In the case of an eligible entity that
seeks to offer a Medicare Prescription Plus plan in a State,
the Commissioner shall waive the requirement of subsection
(a)(1) that the entity be licensed in that State if the
Commissioner determines, based on the application and other
evidence presented to the Commissioner, that any of the grounds
for approval of the application described in paragraph (2) have
been met.
``(2) Grounds for approval.--The grounds for approval under
this paragraph are the grounds for approval described in
subparagraphs (B), (C), and (D) of section 1855(a)(2), and also
include the application by a State of any grounds other than
those required under Federal law.
``(3) Application of medicare+choice pso waiver
procedures.--With respect to an application for a waiver (or a
waiver granted) under this subsection, the provisions of
subparagraphs (E), (F), and (G) of section 1855(a)(2) shall
apply.
``(4) Licensure does not substitute for or constitute
certification.--The fact that an entity is licensed in
accordance with subsection (a)(1) does not deem the eligible
entity to meet other requirements imposed under this part for
an eligible entity.
``(5) References to certain provisions.--For purposes of
this subsection, in applying the provisions of section
1855(a)(2) under this subsection to Medicare Prescription Plus
plans and eligible entities--
``(A) any reference to a waiver application under
section 1855 shall be treated as a reference to a
waiver application under paragraph (1); and
``(B) any reference to solvency standards were
treated as a reference to solvency standards
established under subsection (d).
``(d) Solvency Standards for Non-Licensed Entities.--
``(1) Establishment.--The Commissioner shall establish, by
not later than October 1, 2001, financial solvency and capital
adequacy standards that an entity that does not meet the
requirements of subsection (a)(1) must meet to qualify as an
eligible entity under this part.
``(2) Compliance with standards.--An eligible entity that
is not licensed by a State under subsection (a)(1) and for
which a waiver application has been approved under subsection
(c) shall meet solvency and capital adequacy standards
established under paragraph (1). The Commissioner shall
establish certification procedures for such eligible entities
with respect to such solvency standards in the manner described
in section 1855(c)(2).
``(e) Other Standards.--The Commissioner shall establish by
regulation other standards (not described in subsection (d)) for
eligible entities and Medicare Prescription Plus plans consistent with,
and to carry out, this part. The Commissioner shall publish such
regulations by October 1, 2001.
``(f) Relation to State Laws.--
``(1) In general.--The standards established under this
section shall supersede any State law or regulation (including
standards described in paragraph (2)) with respect to Medicare
Prescription Plus plans which are offered by eligible entities
under this part to the extent such law or regulation is
inconsistent with such standards, in the same manner as such
laws and regulations are superseded under section 1856(b)(3).
``(2) Standards specifically superseded.--State standards
relating to the following are superseded under this section:
``(A) Benefit requirements.
``(B) Requirements relating to inclusion or
treatment of providers.
``(C) Coverage determinations (including related
appeals and grievance processes).
``(3) Prohibition of state imposition of premium taxes.--No
State may impose a premium tax or similar tax with respect to
premiums paid to eligible entities for Medicare Prescription
Plus plans under this part, or with respect to any payments
made to such an entity by the Commissioner under this part.
``submission of medicare prescription plus plans
``Sec. 2228. (a) In General.--Each eligible entity that intends to
offer a Medicare Prescription Plus plan in a year (beginning with 2003)
shall submit to the Commissioner, at such time and in such manner as
the Commissioner may specify, such information as the Commissioner may
require, including the information described in subsection (b).
``(b) Information Described.--The information described in this
subsection includes information on each of the following:
``(1) A description of the benefits under the plan,
including any supplemental benefits pursuant to section
2225(b).
``(2) Information on the actuarial value of the qualified
prescription drug coverage.
``(3) Information on the monthly premium to be charged for
all benefits, including an actuarial certification of--
``(A) the actuarial basis for such premium;
``(B) the portion of such premium attributable to
benefits in excess of standard coverage; and
``(C) the reduction in such premium resulting from
the reinsurance subsidy payments provided under section
2232.
``(4) The service area for the plan.
``(5) Such other information as the Commissioner may
require to carry out this part.
``approval of medicare prescription plus plans
``Sec. 2229. (a) In General.--The Commissioner shall review the
information filed under section 2228 and shall approve or disapprove
the Medicare Prescription Plus plan.
``(b) Negotiation.--In exercising such authority, the Commissioner
shall have the same authority to negotiate the terms and conditions of
the premiums submitted and other terms and conditions of plans as the
Director of the Office of Personnel Management has with respect to
health benefits plans under chapter 89 of title 5, United States Code.
``(c) Special Rules for Approval.--
``(1) Service area.--The Commissioner may approve a service
area submitted under section 2228(b)(4) only if the
Commissioner finds that--
``(A) the use of such an area is consistent with
the purposes of this part; and
``(B) the service area for the plan is not designed
so as to discriminate based on the health status,
economic status, or prior receipt of health care of
eligible beneficiaries.
``(2) Avoidance of favorable selection.--The Commissioner
may approve a Medicare Prescription Plus plan submitted under
section 2228 only if the benefits under such plan--
``(A) include the required benefits under section
2225(a)(1); and
``(B) are not designed in such a manner that the
Commissioner finds is likely to result in favorable
selection of eligible beneficiaries.
``payments to medicare prescription plus plans for benefits
``Sec. 2230. (a) In General.--Subject to subsection (b), for each
year (beginning with 2003), the Commissioner shall pay to each eligible
entity offering a Medicare Prescription Plus plan in which an eligible
beneficiary is enrolled an amount equal to--
``(1) the full amount of the premium approved under section
2229 on behalf of each eligible beneficiary enrolled in such
plan for the year; minus
``(2) the amount of any fees imposed on the entity pursuant
to section 2233).
``(b) Payment Terms.--Payment under this section to an eligible
entity offering a Medicare Prescription Plus plan shall be made in a
manner determined by the Commissioner and based upon the manner in
which payments are made under section 1853(a) (relating to payments to
Medicare+Choice organizations).
``computation and collection of beneficiary share of premium
``Sec. 2231. (a) Computation.--
``(1) Amount.--The annual beneficiary premium for
enrollment in a Medicare Prescription Plus plan providing
coverage under this part for a year shall be an amount equal
to--
``(A) an amount equal to the full amount of the
premium approved under section 2229 for the plan in
which the beneficiary is enrolled; minus
``(B) the amount of the discount determined under
subsection (b).
``(2) Collection of premium amount in same manner as part b
premium.--
``(A) In general.--The amount of the annual
beneficiary premium determined under paragraph (1)
shall be collected and credited to the Medicare
Prescription Drug Account in the same manner as the
monthly premium determined under section 1839 is
collected and credited to the Federal Supplementary
Medical Insurance Trust Fund under section 1840.
``(B) Information necessary for collection.--In
order to carry out subparagraph (A), the Commissioner
shall transmit to the Commissioner of Social Security--
``(i) at the beginning of each year, the
name, social security account number, and
annual beneficiary premium owed by
each individual enrolled in a Medicare Prescription Plus plan for each
month during the year; and
``(ii) periodically throughout the year,
information to update the information
previously transmitted under this paragraph for
the year.
``(b) Discounts for Required Drug Portion of Premium.--
``(1) Full premium discount and reduction of cost-sharing
for individuals with income below 135 percent of federal
poverty level.--In the case of a low-income individual (as
defined in paragraph (5)(A)) who is determined to have income
that does not exceed 135 percent of the Federal poverty level,
the individual is entitled under this section--
``(A) to a premium discount equal to 100 percent of
the amount described in subsection (c); and
``(B) subject to subsection (d), to the
substitution for the beneficiary cost-sharing described
in paragraphs (1) and (2) of section 2225(d) (up to the
initial coverage limit specified in paragraph (3) of
such section) of amounts that are nominal.
``(2) Sliding scale premium discount for individuals with
income above 135, but below 150 percent, of federal poverty
level.--In the case of a low-income individual who is
determined to have income that exceeds 135 percent, but does
not exceed 150 percent, of the Federal poverty level, the
individual is entitled under this section to a premium discount
determined on a linear sliding scale ranging from 100 percent
of the amount described in subsection (c) for individuals with
incomes at 135 percent of such level to 25 percent of such
amount for individuals with incomes at 150 percent of such
level.
``(3) Partial premium discount for individuals with income
above 150 percent of federal poverty level.--In the case of an
eligible beneficiary who is not a low-income individual, the
beneficiary is entitled under this section to a premium
discount equal to 25 percent of the amount described in
subsection (c).
``(4) Tax treatment of premium discount.--
``(A) In general.--For purposes of the Internal
Revenue Code of 1986, the premium discount determined
under this subsection for an eligible beneficiary for a
year shall be included in the gross income of the
beneficiary for the year.
``(B) Statement of taxable amount.--Not later than
January 31 of each year (beginning with 2004), the
Commissioner shall provide--
``(i) each eligible beneficiary enrolled
under this part with a statement that describes
the amount of the discount that is required to
be included in the gross income of the
beneficiary for the previous year pursuant to
subparagraph (A); and
``(ii) the Secretary of the Treasury with
the information described in clause (i).
``(5) Determination of eligibility.--
``(A) Low-income individual defined.--For purposes
of this section, subject to subparagraph (D), the term
`low-income individual' means an individual who--
``(i) is eligible to enroll, and has
enrolled, under this part;
``(ii) has income below 150 percent of the
Federal poverty line; and
``(iii) meets the resources requirement
described in section 1905(p)(1)(C).
``(B) Determinations.--The determination of whether
an individual residing in a State is a low-income
individual and the amount of such individual's income
shall be determined under the State medicaid plan for
the State under section 1935(a). In the case of a State
that does not operate such a medicaid plan (either
under title XIX or under a statewide waiver granted
under section 1115), such determination shall be made
under arrangements made by the Commissioner.
``(C) Income determinations.--For purposes of
applying this section--
``(i) income shall be determined in the
manner described in section 1905(p)(1)(B); and
``(ii) the term `Federal poverty line'
means the official poverty line (as defined by
the Office of Management and Budget, and
revised annually in accordance with section
673(2) of the Omnibus Budget Reconciliation Act
of 1981) applicable to a family of the size
involved.
``(D) Treatment of territorial residents.--In the
case of an individual who is not a resident of the 50
States or the District of Columbia, the individual is
not eligible to be a low-income individual but may be
eligible for financial assistance with prescription
drug expenses under section 1935(e).
``(c) Premium Discount Amount.--The premium discount amount
described in this subsection for an eligible beneficiary residing in an
area is an amount equal to--
``(1) in the case of an individual enrolled in a Medicare
Prescription Plus plan, the actuarial value of the standard
drug coverage provided under the plan (determined without
regard to any premium discount under this section); and
``(2) in the case of an individual enrolled in a
Medicare+Choice plan that provides qualified prescription drug
coverage, the standard premium computed under section
1851(j)(5)(A)(iii).
``(d) Rules in Applying Cost-Sharing Subsidies.--
``(1) In general.--In applying subsection (b)(1)(B)--
``(A) the maximum amount of subsidy that may be
provided with respect to an enrollee for a year may not
exceed 95 percent of the maximum cost-sharing described
in such subsection that may be incurred for standard
coverage;
``(B) the Commissioner shall determine what is
`nominal' taking into account the rules applied under
section 1916(a)(3); and
``(C) nothing in this part shall be construed as
preventing a plan or provider from waiving or reducing
the amount of cost-sharing otherwise applicable.
``(2) Limitation on charges.--In the case of a low-income
individual receiving cost-sharing subsidies under subsection
(b)(1)(B), the eligible entity may not charge more than a
nominal amount in cases in which the cost-sharing subsidy is
provided under such subsection.
``(e) Administration of Cost-Sharing Program.--The Commissioner
shall provide a process whereby, in the case of a low-income individual
who is eligible for reduced cost-sharing under subsection (b)(1)(B) and
is enrolled in a Medicare Prescription Plus plan or a Medicare+Choice
plan under which qualified prescription drug coverage is provided--
``(1) the Commissioner provides for a notification of the
eligible entity or Medicare+Choice organization involved that
the individual is eligible for such reduced cost-sharing;
``(2) the entity or organization involved reduces the cost-
sharing pursuant to this section and submits to the
Commissioner information on the amount of such reduction; and
``(3) the Commissioner periodically and on a timely basis
reimburses the entity or organization for the amount of such
reductions.
The reimbursement under paragraph (3) may be computed on a capitated
basis, taking into account the actuarial value of the reductions and
with appropriate adjustments to reflect differences in the risks
actually involved.
``(f) Relation to Medicaid Program.--
``(1) In general.--For provisions providing for eligibility
determinations, and additional financing, under the medicaid
program, see section 1935.
``(2) Medicaid providing wrap around benefits.--The
coverage provided under this part is primary payor to benefits
for prescribed drugs provided under the medicaid program under
title XIX.
``additional prescription drug subsidies through reinsurance
``Sec. 2232. (a) Reinsurance Subsidy Payment.--In order to reduce
premium levels applicable to qualified prescription drug coverage for
all medicare beneficiaries, to reduce adverse selection among Medicare
Prescription Plus plans and Medicare+Choice plans that provide
qualified prescription drug coverage, and to promote the participation
of eligible entities under this part, the Commissioner shall provide in
accordance with this section for payment to a qualifying entity (as
defined in subsection (b)) of the reinsurance payment amount (as
defined in subsection (c)) for excess costs incurred in providing
qualified prescription drug coverage--
``(1) for individuals enrolled with a Medicare Prescription
Plus plan under this part;
``(2) for individuals enrolled with a Medicare+Choice plan
that provides qualified prescription drug coverage under part C
of title XVIII; and
``(3) for medicare secondary payer eligible individuals
(described in subsection (e)(3)(D)) who are enrolled in a
qualified retiree prescription drug plan.
This section constitutes budget authority in advance of appropriations
Acts and represents the obligation of the Commissioner to provide for
the payment of amounts provided under this section.
``(b) Qualifying Entity Defined.--For purposes of this section, the
term `qualifying entity' means any of the following that has entered
into an agreement with the Commissioner to provide the Commissioner
with such information as may be required to carry out this section:
``(1) An eligible entity offering a Medicare Prescription
Plus plan under this part.
``(2) A Medicare+Choice organization that provides
qualified prescription drug coverage under a Medicare+Choice
plan under part C of title XVIII.
``(3) The sponsor of a qualified retiree prescription drug
plan (as defined in subsection (e)).
``(c) Reinsurance Payment Amount.--
``(1) In general.--Subject to subsection (e)(2) and
paragraph (4), the reinsurance payment amount under this
subsection for a qualified beneficiary (as defined in
subsection (f)(1)) for a coverage year (as defined in
subsection (f)(2)) is an amount equal to 80 percent of the
allowable costs attributable to the portion of the individual's
gross covered prescription drug costs for the year that exceeds
$7,050.
``(2) Allowable costs.--For purposes of this section, the
term `allowable costs' means, with respect to gross covered
prescription drug costs under a plan described in subsection
(b) offered by a qualifying entity, the part of such costs that
are actually paid under the plan, but in no case more than the
part of such costs that would have been paid under the plan if
the prescription drug coverage under the plan were standard
coverage.
``(3) Gross covered prescription drug costs.--For purposes
of this section, the term `gross covered prescription drug
costs' means, with respect to an enrollee with a qualifying
entity under a plan described in subsection (b) during a
coverage year, the costs incurred under the plan for covered
prescription drugs dispensed during the year, including costs
relating to the deductible, whether paid by the enrollee or
under the plan, regardless of whether the coverage under the
plan exceeds standard coverage and regardless of when the
payment for such drugs is made.
``(4) Indexing dollar amount.--
``(A) Amount for 2003.--The dollar amount applied
under paragraph (1) for 2003 shall be the dollar amount
specified in such paragraph.
``(B) For 2004.--The dollar amount applied under
paragraph (1) for 2004 shall be the dollar amount
specified in such paragraph increased by the annual
percentage increase described in section 2225(d)(5) for
2004.
``(C) For subsequent years.--The dollar amount
applied under paragraph (1) for a year after 2004 shall
be the dollar amount (under this paragraph) applied
under paragraph (1) for the preceding year increased by
the annual percentage increase described in section
2225(d)(5) for the year involved.
``(D) Rounding.--Any amount, determined under the
preceding provisions of this paragraph for a year,
which is not a multiple of $5 shall be rounded to the
nearest multiple of $5.
``(d) Payment Methods.--
``(1) In general.--Payments under this section shall be
based on such a method as the Commissioner determines. The
Commissioner may establish a payment method by which interim
payments of amounts under this section are made during a year
based on the Commissioner'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 Medicare Prescription Drug Account.
``(e) Qualified Retiree Prescription Drug Plan Defined.--
``(1) In general.--For purposes of this section, the term
`qualified retiree prescription drug plan' means employment-
based retiree health coverage (as defined in paragraph (3)(A))
if, with respect to an individual enrolled (or eligible to be
enrolled) under this part who is covered under the plan, the
following requirements are met:
``(A) Assurance.--The sponsor of the plan shall
annually attest, and provide such assurances as the
Commissioner may require, that the coverage meets the
requirements for qualified prescription drug coverage.
``(B) Audits.--The sponsor (and the plan) shall
maintain, and afford the Commissioner access to, such
records as the Commissioner may require for purposes of
audits and other oversight activities necessary to
ensure the adequacy of prescription drug coverage, the
accuracy of payments made, and such other matters as
may be appropriate.
``(C) Other requirements.--The sponsor of the plan
shall comply with such other requirements as the
Commissioner finds necessary to administer the program
under this section.
``(2) Limitation on benefit eligibility.--No payment shall
be provided under this section with respect to an individual
who is enrolled under a qualified retiree prescription drug
plan unless the individual is a medicare secondary payer
eligible individual who--
``(A) is covered under the plan; and
``(B) is eligible to obtain qualified prescription
drug coverage under this part but did not elect such
coverage (either through a Medicare Prescription Plus
plan or through a Medicare+Choice plan).
``(3) Definitions.--As used in this section:
``(A) Employment-based retiree health coverage.--
The term `employment-based retiree health coverage'
means health insurance or other coverage of health care
costs for medicare secondary payer eligible individuals
(or for such individuals and their spouses and
dependents) based on their status as former employees
or labor union members.
``(B) Employer.--The term `employer' has the
meaning given such term by section 3(5) of the Employee
Retirement Income Security Act of 1974 (except that
such term shall include only employers of 2 or more
employees).
``(C) Sponsor.--The term `sponsor' means a plan
sponsor, as defined in section 3(16)(B) of the Employee
Retirement Income Security Act of 1974.
``(D) Medicare secondary payer individual.--The
term `medicare secondary payer eligible individual'
means, with respect to a plan, an individual who is
covered under the plan and with respect to whom the
plan is not a primary plan (as defined in section
1862(b)(2)(A)).
``(f) General Definitions.--For purposes of this section:
``(1) Qualified beneficiary.--The term `qualified
beneficiary' means an individual who--
``(A) is enrolled with a Medicare Prescription Plus
plan under this part;
``(B) is enrolled with a Medicare+Choice plan that
provides qualified prescription drug coverage under
part C of title XVIII; or
``(C) is covered as a medicare secondary payer
eligible individual under a qualified retiree
prescription drug plan.
``(2) Coverage year.--The term `coverage year' means a
calendar year in which covered outpatient drugs are dispensed
if a claim for payment is made under the plan for such drugs,
regardless of when the claim is paid.
``plan fees for administrative costs
``Sec. 2233. (a) In General.--The Commissioner may levy on Medicare
Prescription Plus plans and Medicare+Choice plans that provide drug
coverage pursuant to this part an assessment sufficient to pay the
estimated expenses of the Commissioner for administering the program
under this part.
``(b) Deposits and Use.--The assessments described in subsection
(a) shall be--
``(1) deposited into the Medicare Prescription Drug
Account; and
``(2) available for administering the program under this
part without regard to amounts provided for in advance by
appropriations Acts.
``medicare prescription drug account
``Sec. 2234. (a) Establishment.--There is created within the
Federal Supplementary Medical Insurance Trust Fund established under
section 1841 an account to be known as the `Medicare Prescription Drug
Account'.
``(b) Amounts in Account.--
``(1) In general.--The Medicare Prescription Drug Account
shall consist of--
``(A) such amounts as may be deposited in, or
appropriated to, such account as provided in this part;
and
``(B) such gifts and bequests as may be made as
provided in section 201(i)(1).
``(2) Separation of funds.--Funds provided under this part
to the Medicare Prescription Drug Account shall be kept
separate from all other funds within the Federal Supplemental
Medical Insurance Trust Fund.
``(c) Payments From Account.--
``(1) In general.--The Managing Trustee shall pay from time
to time from the Medicare Prescription Drug Account such
amounts as the Commissioner certifies are necessary to make the
payments provided for by this part, and the payments with
respect to administrative expenses in accordance with section
201(g).
``(2) Transfers to medicaid account for increased
administrative costs.--The Managing Trustee shall transfer from
time to time from the Account to the Grants to States for
Medicaid account amounts the Secretary certifies are
attributable to increases in payment resulting from the
application of a higher Federal matching percentage under
section 1935(b).
``(d) Deposits Into Account.--
``(1) Medicaid transfer.--There is hereby transferred to
the Account, from amounts appropriated for Grants to States for
Medicaid, amounts equivalent to the aggregate amount of the
reductions in payments under section 1903(a)(1) attributable to
the application of section 1935(c).
``(2) Appropriations to cover government contributions.--
There are authorized to be appropriated from time to time, out
of any moneys in the Treasury not otherwise appropriated, to
the Account, an amount equivalent to the amount of payments
made from the Account, reduced by--
``(1) the amount transferred to the Account under
paragraph (1);
``(2) the beneficiary premiums collected and
credited to the account under section 2231(b)(2); and
``(3) fees collected and credited to the account
under section 2233.
``secondary payer provisions
``Sec. 2235. The provisions of section 1862(b) shall apply to the
benefits provided under this part.
``definitions; treatment of references to provisions in medicare+choice
program
``Sec. 2236. (a) Definitions.--In this part:
``(1) Commissioner.--The term `Commissioner' means the
Commissioner of the Competitive Medicare Agency.
``(2) Covered outpatient drug.--
``(A) In general.--Except as provided in this
subparagraph (B), the term `covered outpatient drug'
means--
``(i) a drug that may be dispensed only
upon a prescription and that is described in
clause (i) or (ii) of section 1927(k)(2)(A); or
``(ii) a biological product or insulin
described in subparagraph (B) or (C) of such
section.
``(B) Exclusions.--
``(i) In general.--The term `covered
outpatient drug' does not include drugs or
classes of drugs, or their medical uses, which
may be excluded from coverage or otherwise
restricted under section 1927(d)(2), other than
subparagraph (E) thereof (relating to smoking
cessation agents).
``(ii) Avoidance of duplicate coverage.--A
drug prescribed for an individual that would
otherwise be a covered outpatient drug under
this part shall not be so considered if payment
for such drug is available under part A or B of
title XVIII (but shall be so considered if such
payment is not available because benefits under
part A or B of title XVIII have been
exhausted), without regard to whether the
individual is entitled to benefits under such
part A or enrolled under such part B.
``(3) Eligible beneficiary.--The term `eligible
beneficiary' means an individual that is entitled to benefits
under part A of title XVIII and enrolled under part B of such
title.
``(4) Eligible entity.--The term `eligible entity' means
any risk-bearing entity that the Commissioner determines to be
appropriate to provide eligible beneficiaries with the benefits
under a Medicare Prescription Plus plan, including--
``(A) a pharmaceutical benefit management company;
``(B) a wholesale or retail pharmacist delivery
system;
``(C) an insurer (including an insurer that offers
medicare supplemental policies under section 1882);
``(D) another entity; or
``(E) any combination of the entities described in
subparagraphs (A) through (D).
``(5) Initial coverage limit.--The term `initial coverage
limit' means the limit as established under section 2225(d)(3),
or, in the case of coverage that is not standard coverage, the
comparable limit (if any) established under the coverage.
``(6) Medicare+choice organization; medicare+choice plan.--
The terms `Medicare+Choice organization' and `Medicare+Choice
plan' have the meanings given such terms in subsections (a)(1)
and (b)(1), respectively, of section 1859 (relating to
definitions relating to Medicare+Choice organizations and
plans).
``(7) Medicare prescription drug account.--The term
`Medicare Prescription Drug Account' means the Medicare
Prescription Drug Account established under section 2234 and
located within the Federal Supplementary Medical Insurance
Trust Fund established under section 1841.
``(8) Medicare prescription plus plan.--The term `Medicare
Prescription Plus plan' means a health benefits plan that the
Commissioner has approved under section 2229.
``(9) Standard coverage.--The term `standard coverage'
means the coverage described in section 2225(d).
``(b) Application of Medicare+Choice Provisions Under This Part.--
For purposes of applying provisions of part C of title XVIII under this
part with respect to a Medicare Prescription Plus plan and an eligible
entity, unless otherwise provided in this part such provisions shall be
applied as if--
``(1) any reference to a Medicare+Choice plan included a
reference to a Medicare Prescription Plus plan;
``(2) any reference to a provider-sponsored organization
included a reference to an eligible entity;
``(3) any reference to a contract under section 1857
included a reference to a contract under section 2227(b); and
``(4) any reference to part C of title XVIII included a
reference to this part.''.
(b) Submission of Legislative Proposal.--Not later than 6 months
after the date of enactment of this Act, the Secretary of Health and
Human Services and the Commissioner of the Competitive Medicare Agency
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 Act.
SEC. 202. AMENDMENTS TO FEDERAL SUPPLEMENTARY MEDICAL INSURANCE TRUST
FUND.
Section 1841 of the Social Security Act (42 U.S.C. 1395t) is
amended--
(1) in the last sentence of subsection (a)--
(A) by striking ``and'' after ``section
201(i)(1)''; and
(B) by inserting before the period the following:
``, and such amounts as may be deposited in, or
appropriated to, the Medicare Prescription Drug Account
established by section 2234'';
(2) in subsection (g), by inserting after ``by this part,''
the following: ``the payments provided for under the
Prescription Drug and Supplemental Benefit Program under part B
of title XVIII (in which case the payments shall come from the
Medicare Prescription Drug Account in the Supplementary Medical
Insurance Trust Fund),'';
(3) in the first sentence of subsection (h), by inserting
``(or the Commissioner of the Competitive Medicare Agency by
reason of section 2235 (in which case the payments shall come
from the Medicare Prescription Drug Account within such Trust
Fund))'' after ``Human Services''; and
(4) in the first sentence of subsection (i), by inserting
``(or the Commissioner of the Competitive Medicare Agency by
reason of section 2235 (in which case the payments shall come
from the Medicare Prescription Drug Account within such Trust
Fund))'' after ``Human Services''.
SEC. 203. PRESCRIPTION DRUG COVERAGE UNDER THE MEDICARE+CHOICE PROGRAM.
(a) In General.--Section 1851 of the Social Security Act (42 U.S.C.
1395w-21) is amended by adding at the end the following new subsection:
``(j) Availability of Prescription Drug Benefits.--
``(1) In general.--A Medicare+Choice organization may not
offer prescription drug coverage (other than that required
under parts A and B) to an enrollee under a Medicare+Choice
plan unless such drug coverage is at least qualified
prescription drug coverage and unless the requirements of this
subsection with respect to such coverage are met.
``(2) Compliance with additional beneficiary protections.--
With respect to the offering of qualified prescription drug
coverage by a Medicare+Choice organization under a
Medicare+Choice plan, the organization and plan shall meet the
requirements of section 2226, including requirements relating
to information dissemination and grievance and appeals, in the
same manner as they apply to an eligible entity and a Medicare
Prescription Plus plan under part B of title XXII. The
Commissioner of the Competitive Medicare Agency shall waive
such requirements to the extent the Administrator determines
that such requirements duplicate requirements otherwise applicable to
the organization or plan under this part.
``(3) Treatment of coverage.--Except as provided in this
subsection, qualified prescription drug coverage offered under
this subsection shall be treated under this part in the same
manner as supplemental health care benefits described in
section 1852(a)(3)(A).
``(4) Availability of cost-sharing subsidies for low-income
enrollees and reinsurance subsidy payments for organizations.--
For provisions--
``(A) providing cost-sharing subsidies to low-
income individuals receiving qualified prescription
drug coverage through a Medicare+Choice plan, see
section 2231; and
``(B) providing a Medicare+Choice organization with
reinsurance subsidy payments for providing qualified
prescription drug coverage under this part, see section
2232.
``(5) Specification of separate and standard premium.--
``(A) In general.--For purposes of applying section
1854 and determining the premium discount under section
2231(c) with respect to qualified prescription drug
coverage offered under this subsection under a plan,
the Medicare+Choice organization shall compute and
publish the following:
``(i) Separate prescription drug premium.--
A premium for prescription drug benefits that
constitutes qualified prescription drug
coverage that is separate from other coverage
under the plan.
``(ii) Portion of coverage attributable to
standard benefits.--The ratio of the actuarial
value of standard coverage to the actuarial
value of the qualified prescription drug
coverage offered under the plan.
``(iii) Portion of premium attributable to
standard benefits.--A standard premium equal to
the product of the premium described in clause
(i) and the ratio under clause (ii).
The premium under clause (i) shall be computed without
regard to any reduction in the premium permitted under
subparagraph (B).
``(B) Reduction of premiums allowed.--Nothing in
this subsection shall be construed as preventing a
Medicare+Choice organization from reducing the amount
of a premium charged for prescription drug coverage
because of the application of subsections (f)(1)(A) and
(i)(2)(A) of section 1854 to other coverage.
``(6) Transition in initial enrollment period.--
Notwithstanding any other provision of this part, the annual,
coordinated election period under subsection (e)(3)(B) for 2003
shall be the 6-month period beginning with November 2002.
``(7) Qualified prescription drug coverage; standard
coverage.--For purposes of this part, the terms `qualified
prescription drug coverage' and `standard coverage' have the
meanings given such terms in section 2225.''.
(b) Conforming Amendments.--Section 1851(a)(1) of the Social
Security Act (42 U.S.C. 1395w-21(a)(1)) is amended--
(1) by inserting ``(other than qualified prescription drug
benefits)'' after ``benefits'';
(2) by striking the period at the end of subparagraph (B)
and inserting a comma; and
(3) by adding at the end the following flush language:
``and may elect qualified prescription drug coverage in
accordance with part B of title XXII.''.
(c) Effective Date.--The amendments made by this section apply to
coverage provided on or after January 1, 2003.
SEC. 204. MEDICAID AMENDMENTS.
(a) Determinations of Eligibility for Low-Income Subsidies.--
(1) Requirement.--Section 1902 of the Social Security Act
(42 U.S.C. 1396a) is amended in subsection (a)--
(A) by striking ``and'' at the end of paragraph
(64);
(B) by striking the period at the end of paragraph
(65) and inserting ``; and''; and
(C) by inserting after paragraph (65) the following
new paragraph:
``(66) provide for making eligibility determinations under
section 1935(a).''.
(2) New section.--Title XIX of the Social Security Act (42
U.S.C. 1396 et seq.) is amended--
(A) by redesignating section 1935 as section 1936;
and
(B) by inserting after section 1934 the following
new section:
``special provisions relating to medicare prescription drug benefit
``Sec. 1935. (a) Requirement for Making Eligibility Determinations
for Low-Income Subsidies.--As a condition of its State plan under this
title under section 1902(a)(66) and receipt of any Federal financial
assistance under section 1903(a), a State shall--
``(1) make determinations of eligibility for premium and
cost-sharing subsidies under (and in accordance with) section
2231;
``(2) inform the Commissioner of the Competitive Medicare
Agency of such determinations in cases in which such
eligibility is established; and
``(3) otherwise provide such Commissioner with such
information as may be required to carry out part B of title
XXII (including section 2231).
``(b) Payments for Additional Administrative Costs.--
``(1) In general.--The amounts expended by a State in
carrying out subsection (a) are, subject to paragraph (2),
expenditures reimbursable under the appropriate paragraph of
section 1903(a); except that, notwithstanding any other
provision of such section, the applicable Federal matching
rates with respect to such expenditures under such section
shall be increased as follows:
``(A) For expenditures attributable to costs
incurred during 2003, the otherwise applicable Federal
matching rate shall be increased by 20 percent of the
percentage otherwise payable (but for this subsection)
by the State.
``(B) For expenditures attributable to costs
incurred during 2004, the otherwise applicable Federal
matching rate shall be increased by 40 percent of the
percentage otherwise payable (but for this subsection)
by the State.
``(C) For expenditures attributable to costs
incurred during 2005, the otherwise applicable Federal
matching rate shall be increased by 60 percent of the
percentage otherwise payable (but for this subsection)
by the State.
``(D) For expenditures attributable to costs
incurred during 2006, the otherwise applicable Federal
matching rate shall be increased by 80 percent of the
percentage otherwise payable (but for this subsection)
by the State.
``(E) For expenditures attributable to costs
incurred after 2006, the otherwise applicable Federal
matching rate shall be increased to 100 percent.
``(2) Coordination.--The State shall provide the Secretary
with such information as may be necessary to properly allocate
administrative expenditures described in paragraph (1) that may
otherwise be made for similar eligibility determinations.''.
(b) Phased-In Federal Assumption of Medicaid Responsibility for
Premium and Cost-Sharing Subsidies for Dually Eligible Individuals.--
(1) In general.--Section 1903(a)(1) of the Social Security
Act (42 U.S.C. 1396b(a)(1)) is amended by inserting before the
semicolon the following: ``, reduced by the amount computed
under section 1935(c)(1) for the State and the quarter''.
(2) Amount described.--Section 1935 of the Social Security
Act, as inserted by subsection (a)(2), is amended by adding at
the end the following new subsection:
``(c) Federal Assumption of Medicaid Prescription Drug Costs for
Dually Eligible Beneficiaries.--
``(1) In general.--For purposes of section 1903(a)(1), for
a State that is 1 of the 50 States or the District of Columbia
for a calendar quarter in a year (beginning with 2003) the
amount computed under this subsection is equal to the product
of the following:
``(A) Medicare subsidies.--The total amount of
payments made in the quarter under section 2231
(relating to premium and cost-sharing prescription drug
subsidies for low-income medicare beneficiaries) that
are attributable to individuals who are residents of
the State and are entitled to benefits with respect to
prescribed drugs under the State plan under this title
(including such a plan operating under a waiver under
section 1115).
``(B) State matching rate.--A proportion computed
by subtracting from 100 percent the Federal medical
assistance percentage (as defined in section 1905(b))
applicable to the State and the quarter.
``(C) Phase-out proportion.--The phase-out
proportion (as defined in paragraph (2)) for the
quarter.
``(2) Phase-out proportion.--For purposes of paragraph
(1)(C), the `phase-out proportion' for a calendar quarter in--
``(A) 2003 is 90 percent;
``(B) 2004 is 80 percent;
``(C) 2005 is 70 percent;
``(D) 2006 is 60 percent; or
``(E) a year after 2006 is 50 percent.''.
(c) Medicaid Providing Wrap-Around Benefits.--Section 1935 of the
Social Security Act, as so inserted and amended, is further amended by
adding at the end the following new subsection:
``(d) Additional Provisions.--
``(1) Medicaid as secondary payor.--In the case of an
individual dually entitled to qualified prescription drug
coverage under a Prescription Plus Plan under part B of title
XXII (or under a Medicare+Choice plan under part C of such
title) and medical assistance for prescribed drugs under this
title, medical assistance shall continue to be provided under
this title for prescribed drugs to the extent payment is not
made under the Medicare Prescription Plus plan or the
Medicare+Choice plan selected by the individual.
``(2) Condition.--A State may require, as a condition for
the receipt of medical assistance under this title with respect
to prescription drug benefits for an individual eligible to
obtain qualified prescription drug coverage described in
paragraph (1), that the individual elect qualified prescription
drug coverage under the program under part B of title XXII.''.
(d) Treatment of Territories.--
(1) In general.--Section 1935 of the Social Security Act,
as so inserted and amended, is further amended--
(A) in subsection (a)(1), by inserting ``subject to
subsection (e),'' after ``section 1903'';
(B) in subsection (c)(1), by inserting ``subject to
subsection (e),'' after ``1903(a)''; and
(C) by adding at the end the following new
subsection:
``(e) Treatment of Territories.--
``(1) In general.--In the case of a State, other than the
50 States and the District of Columbia--
``(A) the previous provisions of this section shall
not apply to residents of such State; and
``(B) if the State establishes a plan described in
paragraph (2) (for providing medical assistance with
respect to the provision of prescription drugs to
medicare beneficiaries), the amount otherwise
determined under section 1108(f) (as increased under
section 1108(g)) for the State shall be increased by
the amount specified in paragraph (3).
``(2) Plan.--The plan described in this paragraph is a plan
that--
``(A) provides medical assistance with respect to
the provision of covered outpatient drugs (as defined
in section 2236(2)) to low-income medicare
beneficiaries; and
``(B) assures that additional amounts received by
the State that are attributable to the operation of
this subsection are used only for such assistance.
``(3) Increased amount.--
``(A) In general.--The amount specified in this
paragraph for a State for a year is equal to the
product of--
``(i) the aggregate amount specified in
subparagraph (B); and
``(ii) the amount specified in section
1108(g)(1) for that State, divided by the sum
of the amounts specified in such section for
all such States.
``(B) Aggregate amount.--The aggregate amount
specified in this subparagraph for--
``(i) 2003, is equal to $20,000,000; or
``(ii) a subsequent year, is equal to the
aggregate amount specified in this subparagraph
for the previous year increased by the annual
percentage increase specified in section
2225(d)(5) for the year involved.
``(4) Report.--The Secretary shall submit to Congress a
report on the application of this subsection and may include in
the report such recommendations as the Secretary deems
appropriate.''.
(2) Conforming amendment.--Section 1108(f) of the Social
Security Act (42 U.S.C. 1308(f)) is amended by inserting ``and
section 1935(e)(1)(B)'' after ``Subject to subsection (g)''.
SEC. 205. MEDIGAP PROVISIONS.
(a) In General.--Notwithstanding any other provision of law, no new
medicare supplemental policy that provides coverage of expenses for
prescription drugs may be issued under section 1882 of the Social
Security Act on or after January 1, 2003, to an individual unless it
replaces a medicare supplemental policy that was issued to that
individual and that provided some coverage of expenses for prescription
drugs.
(b) Issuance of Substitute Policies if Obtaining Prescription Drug
Coverage Through Medicare.--
(1) In general.--The issuer of a medicare supplemental
policy--
(A) may not deny or condition the issuance or
effectiveness of a medicare supplemental policy that
has a benefit package classified as ``A'', ``B'',
``C'', ``D'', ``E'', ``F'', or ``G'' (under the
standards established under subsection (p)(2) of
section 1882 of the Social Security Act (42 U.S.C.
1395ss)) and that is offered and is available for
issuance to new enrollees by such issuer;
(B) may not discriminate in the pricing of such
policy, because of health status, claims experience,
receipt of health care, or medical condition; and
(C) may not impose an exclusion of benefits based
on a preexisting condition under such policy,
in the case of an individual described in paragraph (2) who
seeks to enroll under the policy not later than 63 days after
the date of the termination of enrollment described in such
paragraph and who submits evidence of the date of termination
or disenrollment along with the application for such medicare
supplemental policy.
(2) Individual covered.--An individual described in this
paragraph is an individual who--
(A) enrolls in a Medicare Prescription Plus plan
under part B of title XXII of the Social Security Act
(as added by section 201); and
(B) at the time of such enrollment was enrolled and
terminates enrollment in a medicare supplemental policy
which has a benefit package classified as ``H'', ``I'',
or ``J'' under the standards referred to in paragraph
(1)(A) or terminates enrollment in a policy to which
such standards do not apply but which provides benefits
for prescription drugs.
(3) Enforcement.--The provisions of paragraph (1) shall be
enforced as though such provisions were included in section
1882(s) of the Social Security Act (42 U.S.C. 1395ss(s)).
(4) Definitions.--For purposes of this subsection, the term
``medicare supplemental policy'' has the meaning given such
term in section 1882(g) of the Social Security Act (42 U.S.C.
1395ss(g)).
(c) Medigap Protections for Individuals Who Lose Medicare
Prescription Plus Plan Coverage.--Section 1882 of the Social Security
Act (42 U.S.C. 1395ss) is amended--
(1) in subsection (d)(3)--
(A) in subparagraph (A), by adding at the end the
following:
``(ix) Nothing in this subparagraph shall be construed as
preventing the sale of 1 medicare supplemental policy and 1 Medicare
Prescription Plus plan to an individual, except that the sale of such a
policy or plan may not duplicate any health benefits under any policy
or plan owned by the individual.''; and
(B) in subparagraph (B)(iii)--
(i) in subclause (I), by striking ``(II)
and (III)'' and inserting ``(II), (III), and
(IV)'';
(ii) by redesignating subclause (III) as
subclause (IV); and
(iii) by inserting after subclause (II) the
following:
``(III) If the statement required by clause (i) is obtained and
indicates that the individual is enrolled in 1 medicare supplemental
policy or 1 Medicare Prescription Plus plan, the sale of another policy
or plan is not in violation of clause (i) if such other policy or plan
does not duplicate health benefits under the policy or plan in which
the individual is enrolled.'';
(2) in subsection (g)(1), by inserting ``, Medicare
Prescription Plus plan,'' after ``Medicare+Choice plan''; and
(3) in subsection (s)(3)--
(A) in subparagraph (B)--
(i) in clause (ii), by inserting ``is
enrolled with an eligible entity under a
Medicare Prescription Plus plan under part B of
title XXII or'' after ``section 1851(e)(4) or
the individual'';
(ii) in clause (v)(II), by inserting ``with
any eligible entity under a Medicare
Prescription Plus plan under part B of title
XXII,'' after ``under part C,''; and
(iii) in clause (vi), by inserting ``, in a
Medicare Prescription Plus plan under part B of
title XXII,'' after ``under part C''; and
(B) in subparagraph (E)--
(i) in clause (i), by inserting ``(or, in
the case of an individual enrolled under a
Medicare Prescription Plus plan, the date on
which the individual was notified by the
eligible entity of the impending termination or
discontinuance of the Medicare Prescription
Plus plan) after ``it offers in the area''; and
(ii) in clause (ii), by inserting ``or
Medicare Prescription Plus plan'' after
``Medicare+Choice plan''.
SEC. 206. GAO REPORT ON PART B PAYMENT FOR DRUGS AND BIOLOGICALS AND
RELATED SERVICES.
(a) In General.--The Comptroller General of the United States shall
conduct a study to quantify the extent to which reimbursement for drugs
and biologicals under the current medicare payment methodology
(provided under section 1842(o) of the Social Security Act (42 U.S.C.
1395u(o)) overpays for the cost of such drugs and biologicals compared
to the average acquisition cost paid by physicians or other suppliers
of such drugs.
(b) Elements.--The study shall also assess the consequences of
changing the current medicare payment methodology to a payment
methodology that is based on the average acquisition cost of the drugs.
The study shall, at a minimum, assess the effects of such a reduction
on--
(1) the delivery of health care services to medicare
beneficiaries with cancer;
(2) total medicare expenditures, including an estimate of
the number of patients who would, as a result of the payment
reduction, receive chemotherapy in a hospital rather than in a
physician's office;
(3) the delivery of dialysis services;
(4) the delivery of vaccines;
(5) the administration in physician offices of drugs other
than cancer therapy drugs; and
(6) the effect on the delivery of drug therapies by
hospital outpatient departments of changing the average
wholesale price as the basis for medicare pass-through payments
to such departments, as included in the Medicare, Medicaid, and
SCHIP Balanced Budget Refinement Act of 1999.
(c) Payment for Related Professional Services.--The study shall
also include a review of the extent to which other payment
methodologies under part B of the medicare program, if any, intended to
reimburse physician and other suppliers of drugs and biologicals
described in subsection (a) for costs incurred in handling, storing,
and administering such drugs and biologicals are inadequate to cover
such costs and whether an additional payment would be required to cover
these costs under the average acquisition cost methodology.
(d) Consideration of Issues in Implementing an Average Acquisition
Cost Methodology.--The study shall assess possible means by which a
payment method based on average acquisition cost could be implemented,
including at least the following:
(1) Identification of possible bases for determining the
average acquisition cost of drugs, such as surveys of
wholesaler catalog prices, and determination of the advantages,
disadvantages, and costs (to the government and the public) of
each possible approach.
(2) The impact on individual providers and practitioners if
average or median prices are used as the payment basis.
(3) Methods for updating and keeping current the prices
used as the payment basis.
(e) Coordination With BBRA Study.--The Comptroller General of the
United States shall conduct the study under this section in
coordination with the study provided for under section 213(a) of the
Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999
(113 Stat. 1501A-350), as enacted into law by section 1000(a)(6) of
Public Law 106-113.
(f) Report.--Not later than 6 months 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 this section, as well as
the study referred to in subsection (e). Such report shall include
recommendations regarding such changes in the medicare reimbursement
policies described in subsections (a) and (c) as the Comptroller
General deems appropriate, as well as the recommendations described in
section 213(b) of the Medicare, Medicaid, and SCHIP Balanced Budget
Refinement Act of 1999.
TITLE III--MEDICARE+CHOICE REFORMS
SEC. 301. INCREASE IN NATIONAL PER CAPITA MEDICARE+CHOICE GROWTH
PERCENTAGE IN 2001 AND 2002.
Section 1853(c)(6)(B) of the Social Security Act (42 U.S.C. 1395w-
23(c)(6)(B)) is amended--
(1) by striking clauses (iv) and (v);
(2) by redesignating clause (vi) as clause (iv); and
(3) in clause (iv) (as so redesignated), by striking
``2002'' and inserting ``2000''.
SEC. 302. REMOVING APPLICATION OF BUDGET NEUTRALITY BEGINNING IN 2002.
Section 1853(c) of the Social Security Act (42 U.S.C. 1395w-23(c))
is amended--
(1) in paragraph (1)(A), in the matter following clause
(ii), by inserting ``(for years other than 2002)'' after
``multiplied''; and
(2) in paragraph (5), by inserting ``(other than 2002)''
after ``for each year''.
SEC. 303. MEDICARE+CHOICE COMPETITION PROGRAM.
(a) Payments to Medicare+Choice Organizations Based on Risk-
Adjusted Bids.--
(1) Monthly payments.--Section 1853(a)(1)(A) of the Social
Security Act (42 U.S.C. 1395w-23(a)(1)(A)) is amended by adding
at the end the following new sentences: ``For each year
(beginning with 2003), under a contract under section 1857, the
Commissioner shall make to each Medicare+Choice organization,
with respect to coverage of an individual for a month under
this part in a Medicare+Choice payment area, monthly payments
with respect to benefits under parts A and B combined in
accordance with subsection (c)(8). For rules relating to
payment of the Medicare+Choice monthly supplemental beneficiary
premium or any prescription drug premium, see section
1854(j).''.
(2) Annual determination and announcement of payment
factors.--
(A) In general.--Section 1853(b) (42 U.S.C. 1395w-
23(b)) is amended--
(i) in paragraph (1), by striking ``the
calendar year concerned'' and all that follows
and inserting ``the calendar year concerned
with respect to each Medicare+Choice payment
area, the following:
``(A) The benchmark amount (as defined in paragraph
(5)(A)).
``(B) The county-specific monthly per capita costs
(as defined in paragraph (5)(B)).
``(C) The demographic adjustment factors to be used
in making payment for individual enrollees (as defined
in paragraph (5)(C)).
``(D) The ESRD adjustment (as defined in paragraph
(5)(D)).
``(E) The health status adjustment (as defined in
paragraph (5)(E)).''.
(ii) in paragraph (3), by striking
``monthly adjusted'' and all that follows
before the period at the end and inserting
``the payment rates under this part for each
individual enrolled in the Medicare+Choice plan
offered by the Medicare+Choice organization for
the year''; and
(iii) by adding at the end the following
new paragraph:
``(5) Definitions relating to factors used in adjusting
bids for medicare+choice organizations and in determining
enrollee premiums.--In this part:
``(A) Benchmark amount.--
``(i) In general.--The term `benchmark
amount' means, for a payment area, an amount
equal to the greater of--
``(I) except as provided in clause
(ii), \1/12\ of the annual
Medicare+Choice capitation rate that
would have applied in that payment area
under paragraphs (1) through (7) of
subsection (c); or
``(II) the county-specific monthly
per capita costs for such area.
``(ii) Phase-out of minimum amount and
blended capitation rate.--If the amount
calculated under clause (i)(I) for a year for
all payment areas is equal to either the
minimum amount or the blended capitation rate,
for all subsequent years the Commissioner shall
not calculate the rates described in that
clause and the amount under such clause instead
shall be equal to the county-specific monthly
per capita costs.
``(B) County-specific monthly per capita costs.--
``(i) In general.--Subject to clause (ii),
the term `county-specific monthly per capita
costs' means the amount of payment in a
Medicare+Choice payment area for benefits under
this title and associated claims processing
costs for individuals entitled to benefits
under part A and individuals enrolled in the
program under part B who are not enrolled in a
Medicare+Choice plan under this part. The
Commissioner shall determine such amount in a
manner similar to the manner in which the
Secretary determined the adjusted average per
capita cost under section 1876, except that
such determination shall include in such amount
any amounts that would have been paid under
this title if individuals entitled to benefits
under this title had not received services from facilities of the
Department of Veterans Affairs or the Department of Defense.
``(ii) Exclusion of gme costs.--The
calculation of costs under clause (i) shall not
take into account any amounts attributable to--
``(I) payments for costs of
graduate medical education under
section 1886(h); or
``(II) payments for indirect costs
of medical education under section
1886(d)(5)(B).
``(C) Demographic adjustment factors.--The term
`demographic adjustment factors' means such factors as
age, disability status, gender, and institutional
status, so as to ensure actuarial equivalence. The
Commissioner may add to, modify, or substitute for such
factors, if such changes will improve the determination
of actuarial equivalence, and in that event the
Commissioner will make comparable adjustments to the
benchmark amounts.
``(D) ESRD adjustment factor.--The term `ESRD
adjustment factor' means the adjustment established by
the Commissioner under section 1851(a)(3)(B) that
applies with respect to enrolled individuals who have
end-stage renal disease.
``(E) Health status adjustment factor.--The term
`health status adjustment factor' means the health
status adjustment implemented under subsection
(a)(3)(C) until such time as the Commissioner develops
a health status adjustment factor that takes into
account the specific health care needs of
Medicare+Choice eligible individuals who do not have
end-stage renal disease based on the delivery of care
in all settings, which methodology shall be phased in
equally over a 10-year period, beginning with 2004, or
(if later) the date on which such factor is developed.
(3) Submission of bids by medicare+choice organizations.--
Section 1854(a) of the Social Security Act (42 U.S.C. 1395w-
24(a)) is amended--
(A) in paragraph (1), by striking ``Not later than
July 1'' and inserting ``Subject to paragraph (6), not
later than July 1''; and
(B) by adding at the end the following:
``(6) Submission of bids by medicare+choice
organizations.--
``(A) In general.--For each year (beginning with
2003), each Medicare+Choice organization shall submit
to the Commissioner, in a form and manner specified by
the Commissioner and for each Medicare+Choice plan
which it intends to offer in a service area in the
following year--
``(i) notice of such intent and information
on the service area and plan type for each
plan;
``(ii) the information described in
paragraph (2) for the type of plan involved;
and
``(iii) the enrollment capacity (if any) in
relation to the plan and area.
``(B) Information required for competitive plans.--
The information described in this paragraph is as
follows:
``(i) The monthly plan bid for the
provision of benefits.
``(ii) The actuarial value of the reduction
in cost-sharing for benefits under parts A and
B included in each plan bid and a description
of the cost-sharing for such benefits.
``(iii) The actuarial value of any
additional benefits required under subsection
(i), a description of cost-sharing for such
benefits, and such other information as the
Commissioner considers necessary.
``(iv) The actuarial value of any
supplemental benefits, the monthly supplemental
premium (if any) for such benefits, a
description of any cost-sharing for such
benefits, and such other information as the
Commissioner considers necessary.
``(v) For each Medicare+Choice payment
area, the assumptions used with respect to the
number of--
``(I) enrolled individuals who are
entitled to benefits under parts A and
enrolled under part B who do not have
end-stage renal disease; and
``(II) such enrolled individuals
who have end-stage renal disease.''.
(4) Commissioner's determination of payment amount.--
Section 1853(c) of the Social Security Act (42 U.S.C. 1395w-
23(c)) is amended--
(A) in paragraph (1), by striking ``subject to
paragraphs (6)(C) and (7)'' and inserting ``subject to
paragraphs (6)(C), (7), and (8)'';
(B) by adding at the end the following new
paragraph:
``(8) Commissioner's determination of payment amount.--
``(A) Adjustment of bids.--The Commissioner shall
adjust plan bids submitted under section 1854(a)(6)
based on the demographic adjustment factors, the ESRD
adjustment factor, and the health status adjustment
factor (as defined in subparagraphs (C), (D), and (E),
respectively, of subsection (b)(5)).
``(B) Determination of benchmark per county.--For
each year (beginning with 2003), the Commissioner shall
determine the benchmark amount (as defined in
subparagraph (A) of subsection (b)(5)) for each
Medicare+Choice payment area and shall adjust such
amount based on the demographic adjustment factors, the
ESRD adjustment factor, and the health status
adjustment factor (as defined in subparagraphs (C),
(D), and (E), respectively, of such section).
``(C) Comparison to plan benchmark amount.--
``(i) In general.--The Commissioner shall
compare the organization's bid (as adjusted
under subparagraph (A)) to the benchmark amount
(as adjusted under subparagraph (B)) to
determine the payment amount under clause (ii).
``(ii) Determination of payment amount.--
The Commissioner shall determine the monthly
payment to a Medicare+Choice organization with
respect to each individual enrolled in a
Medicare+Choice plan as follows:
``(I)If bid does not exceed
benchmark.--If the Medicare+Choice
organization's bid (as adjusted under
subparagraph (A)) does not exceed the
benchmark amount (as adjusted under
subparagraph (B)), the monthly payment
shall be the benchmark amount, adjusted
to account for the demographic
adjustment factors, health status
adjustment factor, and (if applicable)
the ESRD adjustment factor of the
individual enrollee, minus 25 percent
of the difference between the bid and
the benchmark amount determined under
section 1854(i)(2)(A).
``(II) If bid exceeds benchmark.--
If the organization's bid (as adjusted
under subparagraph (A)) exceeds the
benchmark amount (as adjusted under
subparagraph (B)), the monthly payment
shall be the bid, adjusted to account
for the demographic adjustment factors,
health status adjustment factor, and
(if applicable) the ESRD adjustment
factor of the individual enrollee.''.
(b) Premiums.--
(1) Determination of premium amount.--Section 1854 of the
Social Security Act (42 U.S.C. 1395w-24) is amended by adding
at the end the following new subsections:
``(i) Determination of Medicare Premium Reduction and
Medicare+Choice Monthly Supplemental Beneficiary Premium.--
``(1) In general.--Notwithstanding subsection (b) and
subject to paragraph (2), for each year (beginning with 2003),
the Commissioner shall determine the difference between the
organization's bid (submitted under subsection (a)(6) and
adjusted under section 1853(c)(8)(A)) and the plan's benchmark
amount (as adjusted under 1853(c)(8)(B)) to determine the
amount of any medicare premium reduction, prescription drug
premium reduction, reduction in plan cost-sharing, or
additional benefits required under paragraph (2)(A), or the
Medicare+Choice monthly supplemental beneficiary premium for
plan enrollees.
``(2) Adjustment.--
``(A) Bids below the benchmark.--Notwithstanding
subsection (f), if the organization's bid is lower than
the plan's benchmark amount, 75 percent of the
difference determined under paragraph (1) shall be
returned to the enrollee in the form of, at the option
of the organization offering the plan--
``(i) a monthly medicare premium reduction
for individuals enrolled in the plan (up to the
entire amount of the premium for part B);
``(ii) a prescription drug premium
reduction pursuant to subsection (j)(5)(B);
``(iii) a reduction in the actuarial value
of plan cost-sharing for plan enrollees;
``(iv) such additional benefits as the
organization may specify; or
``(v) any combination of the reductions and
benefits described in clauses (i) through (iv).
``(B) Bids above the benchmark.--If the
organization's bid is higher than the benchmark amount,
the difference determined under paragraph (1) shall be
the Medicare+Choice monthly supplemental beneficiary
premium for individuals enrolled in the plan.
``(j) Rules Relating to Premiums Owed by Medicare+Choice
Enrollees.--In the case of any Medicare+Choice monthly supplemental
beneficiary premium under subsection (i)(2)(B) or any prescription drug
premium under section 1851(j) that an individual is responsible for
under a Medicare+Choice plan in which the individual is enrolled, the
following rules shall apply:
``(1) Commissioner shall pay the drug premium to the
entity.--
``(A) In general.--The Commissioner shall pay to
the Medicare+Choice organization offering the
Medicare+Choice plan the full amount of the
prescription drug premium under section 1851(j) that
the individual is responsible for under the plan.
``(B) Payments from medicare prescription drug
account.--Payments under subparagraph (A) shall be made
from the Medicare Prescription Drug Account within the
Federal Supplementary Medical Insurance Trust Fund
under section 1841.
``(2) Premium discount for drug benefits.--Subject to
paragraph (4), the individual shall be entitled to the premium
discount for prescription drugs determined under section 2231.
``(3) Collection of supplemental and drug premiums in same
manner as part b premium.--
``(A) Supplemental premium.--The amount of any
Medicare+Choice monthly supplemental beneficiary
premium that an individual is responsible for under the
plan shall be collected and credited to the Federal
Hospital Insurance Trust Fund and the Federal
Supplementary Medical Insurance Trust Fund--
``(i) in such proportion as the
Commissioner determines appropriate; and
``(ii) in the same manner as the monthly
premium determined under section 1839 is
collected and credited to the Federal
Supplementary Medical Insurance Trust Fund
under section 1840.
``(B) Drug premium.--Subject to the application of
the premium discounts available under section 2231, the
amount of any premium drug premium that an individual
is responsible for under the plan shall be collected
and credited to the Medicare Prescription Drug Account
within the Federal Supplementary Medical Insurance
Trust Fund under section 1841 in the same manner as the
monthly premium determined under section 1839 is
collected and credited to the Federal Supplementary
Medical Insurance Trust Fund under section 1840.
``(C) Information necessary for collection.--In
order to carry out subparagraph (A), the Commissioner
shall transmit to the Commissioner of Social Security--
``(i) at the beginning of each year, the
name, social security account number, and the
Medicare+Choice monthly supplemental
beneficiary premium and prescription drug
premium owed by the individual for each month
during the year; and
``(ii) periodically throughout the year,
information to update the information
previously transmitted under this paragraph for
the year.
``(4) Discount reduced if greater than combined premiums.--
In the case of an individual whose premium discount determined
under section 2231(b) is equal to or less than the sum of any
the Medicare+Choice monthly supplemental beneficiary premium
and any prescription drug premium (after any reduction
described in section 1851(j)(5)(B)) for the Medicare+Choice
plan in which the individual is enrolled, the premium subsidy
shall be deemed to be an amount equal to such sum.''.
(2) Limitation on enrollee liability for supplemental
benefits.--Section 1854(e)(2) of the Social Security Act (42
U.S.C. 1395w-24(e)(2)) is amended by striking ``If the
Medicare+Choice organization'' and inserting ``Except as
provided in subsection (i)(2)(B), if the Medicare+Choice
organization''.
(c) Allowing Plans To Include Reductions and Other Benefits in
Their Basic Benefits.--Section 1852(a)(1)(B) of the Social Security Act
(42 U.S.C. 1395w-22(a)(1)) is amended--
(1) by inserting ``(i)'' after ``(B)''; and
(2) by adding at the end the following new clause:
``(ii) for 2003 and each subsequent year, at plan
option, the reductions and benefits described in
section 1854(i)(2)(A).''.
(d) Transition to ESRD Eligibility.--Section 1851(a)(3)(B) of the
Social Security Act (42 U.S.C. 1395w-21(a)(3)(B)) is amended by
inserting ``until such time as the Commissioner establishes an ESRD
adjustment factor that takes into account the specific health care
needs of such individuals based on a delivery of care in all settings
(to be phased-in in such manner as the Commissioner deems
appropriate)'' after ``determined to have end-stage renal disease''.
(e) Conforming Amendments.--
(1) Premium reductions under part b.--
(A) Amount of premiums.--Section 1839(a)(2) of the
Social Security Act (42 U.S.C. 1395r(a)(2)) is amended
by striking ``shall'' and all that follows and
inserting the following: ``shall be the amount
determined under paragraph (3), adjusted as required in
accordance with subsections (b), (c), and (f), and
thereafter further modified as required to comply with
section 1854(i)(2)(A).''.
(B) Payment of premiums.--Section 1840 of the
Social Security Act (42 U.S.C. 1395s) is amended by
adding at the end the following new clause:
``(i) The Commissioner shall provide for necessary adjustments of
the medicare premium for Medicare+Choice enrollees determined under
section 1854(i)(2)(A)(i). This premium adjustment may be provided
directly or as an adjustment to Social Security, Railroad Retirement
and Civil Service Retirement benefits, as appropriate, as the
Commissioner of the Competitive Medicare Agency determines feasible
with the concurrence of such agencies.''.
(2) Appropriations for government contribution.--Section
1844(a)(1) of the Social Security Act (42 U.S.C. 1395w(a)(1))
is amended by adding at the end the following new subparagraph:
``(C) an adjustment for the Government contribution to
reflect the savings to the Trust Fund from enrollment in
Medicare+Choice plans by beneficiaries who receive monthly
medicare premium reductions in accordance with section
1854(i)(2)(A)(i); plus''.
(3) Continuation of enrollment permitted.--Section
1851(b)(1)(B) of the Social Security Act (42 U.S.C. 1395w-
21(b)(1)(B)) is amended by striking ``section 1852(a)(1)(A)''
and inserting ``section 1852(a)(1)''.
(4) Information comparing plan premiums.--Section
1851(d)(4)(B) of the Social Security Act (42 U.S.C. 1395w-
21(d)(4)(B)) is amended--
(A) by striking ``premiums.--The'' and inserting
``premiums.--
``(i) In general.--The'';
(B) by adding at the end the following new clause:
``(ii) Reductions.--The reduction in the
part B premiums, if any.''.
(5) National coverage determinations.--Section 1852(a)(5)
of the Social Security Act (42 U.S.C. 1395w-22(a)(5)) is
amended by inserting ``(or, for 2003 and each subsequent fiscal
year, the county-specific monthly per capita costs)'' after
``the annual Medicare+Choice capitation rate''.
(6) Disclosure requirements.--Section 1852(c)(1)(F) of the
Social Security Act (42 U.S.C. 1395w-22(c)(1)(F)) is amended by
striking clause (i) and redesignating clauses (ii) and (iii) as
clauses (i) and (ii), respectively.
(7) Geographic adjustment.--Section 1853(d)(3)(B) of the
Social Security Act (42 U.S.C. 1395w-23(e)(3)(B)) is amended--
(A) in the heading, by striking ``Budget
Neutrality'';
(B) by striking ``adjust the payment rates'' and
all that follows through ``that would have been made''
and inserting ``adjust the benchmark amounts otherwise
established under this section for Medicare+Choice
payment areas in the State in a manner so that the
weighted average of the benchmark amounts under this
section in the State equals the weighted average of
benchmark amounts that would have been applicable''.
(8) Medicare+choice monthly basic beneficiary premium.--
Section 1854(b)(2)(A) of the Social Security Act (42 U.S.C.
1395w-24(b)(2)(A)) is amended by striking ``the amount
authorized to be charged'' and all that follows and inserting
``the amount required to be charged for the plan.''.
(9) Commissioner defined.--Section 1859(a) of the Social
Security Act (42 U.S.C. 1395w-28(a)) is amended by adding at
the end the following new paragraph:
``(3) Commissioner.--The term `Commissioner' means the
Commissioner of the Competitive Medicare Agency appointed under
section 2202(a)(1).''.
(f) Inclusion of Costs of VA and DOD Military Facility Services to
Medicare-Eligible Beneficiaries.--Section 1853(c) of the Social
Security Act (42 U.S.C. 1395w-23(c)) (as amended by subsection (a)(4))
is amended by adding at the end the following new paragraph:
``(9) Inclusion of costs of va and dod military facility
services to medicare-eligible beneficiaries.--For purposes of
determining the blended capitation rate under subparagraph (A)
of paragraph (1) and the minimum percentage increase under
subparagraph (C) of such paragraph for a year, the annual per
capita rate of payment for 1997 determined under section
1876(a)(1)(C) shall be adjusted to include in such rate the
Commissioner's estimate, on a per capita basis, of the amount
of additional payments that would have been made in the area
involved under this title if individuals entitled to benefits
under this title had not received services from facilities of
the Department of Veterans Affairs or the Department of
Defense.''.
(g) Effective Date.--The amendments made by this section shall take
effect on January 1, 2003.
SEC. 304. FREEZE OF HEALTH RISK ADJUSTER AT 20 PERCENT.
(a) In General.--Section 1853(a)(3)(C)(ii) of the Social Security
Act (42 U.S.C. 1395w-23(c)(1)(C)(ii)) is amended by inserting ``and
each subsequent year'' after ``not more than 20 percent of such
capitation rate in 2002''.
(b) Effective Date.--The amendment made by this section shall take
effect on the date of enactment of this Act.
TITLE IV--MEDICARE BENEFICIARY OUTREACH AND EDUCATION
SEC. 401. MEDICARE CONSUMER COALITIONS.
Title XXII of the Social Security Act (as added by section 101) is
amended by adding at the end the following new part:
``Part C--Medicare Consumer Coalitions
``establishment of medicare consumer coalitions
``Sec. 2281. (a) Establishment of Medicare Consumer Coalitions.--
The Commissioner of the Competitive Medicare Agency (in this part
referred to as the `Commissioner') may establish Medicare Consumer
Coalitions (as defined in subsection (b)) to conduct information
programs described in subsection (e).
``(b) Medicare Consumer Coalition Defined.--In this section, the
term `Medicare Consumer Coalition' means an entity that is a nonprofit
organization operated under the direction of a board of directors that
is primarily composed of eligible beneficiaries.
``(c) Request for Proposals; Selection of Medicare Consumer
Coalitions.--If the Commissioner elects to establish Medicare Consumer
Coalitions under subsection (a), the Commissioner shall--
``(1) develop and disseminate a request for proposals to
establish Medicare Consumer Coalitions in such areas as the
Commissioner determines appropriate to assist in conducting the
information programs described in subsection (a); and
``(2) select a proposal to establish a Medicare Consumer
Coalition to conduct the information programs in each such
area.
``(d) Payment to Medicare Consumer Coalitions.--The Commissioner
shall pay to each Medicare Consumer Coalition for which a proposal has
been selected under subsection (c)(2) an amount equal to the sum of any
costs incurred--
``(1) in conducting the information programs under
subsection (e); and
``(2) in the hiring of staff to conduct the information
programs under such subsection.
``(e) Information Programs.--The information programs described in
this subsection are those activities that are the responsibilities of
the Commissioner under clause (iii) of section 2202(a)(4) (relating to
dissemination of information), clause (iv) of such section (relating to
dissemination of appeals rights information), and clause (v) of such
section (relating to beneficiary education programs). If the
Commissioner selects a Medicare Consumer Coalition to conduct such
programs, the programs shall include the following:
``(1) Contents.--A comparison among the original fee-for-
service program under parts A and B of title XVIII, available
Medicare+Choice plans under part C of such title, and available
Medicare Prescription Plus plans under part B as follows:
``(A) Benefits.--A comparison of the benefits
provided under each plan and program.
``(B) Quality and performance.--The quality and
performance of each plan and program.
``(C) Beneficiary costs.--The costs to eligible
beneficiaries enrolled under each plan and program.
``(D) Consumer satisfaction surveys.--The results
of consumer satisfaction surveys regarding each plan
and program.
``(E) Additional information.--Such additional
information as the Commissioner may prescribe.
``(2) Information standards.--If the Commissioner
establishes Medicare Consumer Coalitions, the Commissioner
shall develop standards to ensure that the information provided
to eligible beneficiaries under the information programs is
complete, accurate, and uniform.
``(3) Review of information.--
``(A) In general.--Subject to subparagraph (B), the
Commissioner may prescribe the procedures and
conditions under which a Medicare Consumer Coalition
may disseminate information to eligible beneficiaries
to ensure the coordination of Federal, State, and local
outreach efforts to eligible beneficiaries.
``(B) Deadline.--Any information proposed to be
furnished to eligible beneficiaries under this section
shall be submitted to the Commissioner not later than
45 days before the date on which the information is to
be disseminated to such beneficiaries.
``(4) Consultation.--In order to conduct the information
programs under subsection (a), Medicare Consumer Coalitions may
consult with the Administrator of the Health Care Financing
Administration, entities that offer Medicare+Choice plans,
Medicare Prescription Plus plans, and public and private
purchasers of health care benefits.
``(f) Report.--If the Commissioner establishes Medicare Consumer
Coalitions under this section, not later than December 31, 2003, the
Commissioner shall submit to the appropriate committees of Congress a
report on the performance of any Medicare Consumer Coalitions,
including an assessment of the effectiveness of the outreach efforts
conducted under this section.
``(g) Authorization of Appropriations.--There are authorized to be
appropriated to carry out this section such sums as may be necessary.
``(h) Effective Date.--If the Commissioner establishes Medicare
Consumer Coalitions, the Commissioner should establish the such
Coalitions under this section in a manner that ensures that the
information programs conducted by Medicare Consumer Coalitions begin
not later than January 1, 2003.''.
<all>
Introduced in Senate
Sponsor introductory remarks on measure. (CR S6020-6021)
Read twice and referred to the Committee on Finance.
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