A bill to amend titles XVIII and XIX of the Social Security Act with respect to payments to health maintenance organizations.

(Reported to House from the Committee on Energy and Commerce with amendment, H. Rept. 97-119 (Part I))

Amends title XVIII (Medicare) of the Social Security Act to revise provisions relating to payments to and contractual arrangements with health maintenance organizations (HMO) on behalf of individuals eligible for Medicare.

Directs the Secretary of Health and Human Services to annually determine a per capita rate of payment for each class of individuals: (1) enrolled with an HMO pursuant to this Act and who are entitled to benefits under part A (Hospital Insurance) of title XVIII and enrolled under part B (Supplementary Medical Insurance) of title XVIII; and (2) enrolled with an HMO and enrolled under part B only.

Provides a rate for each class equal to 95 percent of the adjusted average per capita cost for that class. Defines the term "adjusted average per capita cost" to mean the average per capita amount that the Secretary estimates would be payable for services furnished under the Medicare program, if the services were to be furnished by other than an HMO.

Directs the Secretary in establishing classes of individuals to take in consideration age, institutional status, disability status, place of residence, and other factors determined appropriate by the Secretary.

Redefines an HMO. Requires an HMO to meet certain requirements, including limits on premiums, deductibles, coinsurance, and copayments.

Provides that individuals enrolled in the Medicare program shall be eligible under this Act with any HMO with which the Secretary has contracted.

Prohibits premiums, deductibles, coinsurance, and copayments of an HMO from exceeding, for Medicare enrollees, the adjusted community rate for such services. Defines the adjusted community rate. Provides that if: (1) the Secretary is not satisfied that an HMO has the capacity to bear the risk of potential losses under a risk-sharing contract under this Act; or (2) if the HMO so elects, the HMO may be reimbursed on the basis of reasonable cost if the Secretary is satisfied that the HMO is able to perform its contracted obligations effectively and efficiently.

Amends part A (General Provisions) of title XI of the Social Security Act to prohibit a capital expenditure made by or on behalf of a health care facility from being subject to review pursuant to the limitation on Federal participation for capital expenditures of part A if the obligation of the capital expenditure by the facility would not be reviewed under the Public Health Service Act.

Sets forth provisions specifying the effective dates of this Act for Medicare beneficiaries and HMO's.

Directs the Secretary to conduct a study and report to Congress concerning additional benefits selected by HMO's.

Amends title XIX (Medicaid) of the Act to revise the definition of an HMO. Requires an HMO to meet the requirements of an HMO as defined in title XVIII and to meet certain additional requirements.

Directs the Secretary to conduct a study and report to Congress concerning the extent of, and reasons for, the termination by Medicare and Medicaid beneficiaries of their membership in HMO's.