--H.R.5835--
H.R.5835
One Hundred First Congress of the United States of America
AT THE SECOND SESSION
Begun and held at the City of Washington on Tuesday, the twenty-third day of January,
one thousand nine hundred and ninety
An Act
budget for fiscal year 1991.
enrollment errata
Pursuant to the provisions of H.J. Res. 682, waiving certain enrollment requ irements with respect to any reconciliation bill, appropriation bill, or continu ing resolution for the remainder of the One Hundred First Congress, and providin g for the subsequent preparation and certification of printed enrollments, this printed enrollment contains corrections in indentation, type face, and type size and includes identifying obvious errors in spelling and punctuation in the hand enrollment.
SEC. 1102. CALCULATION OF DEFICIENCY PAYMENTS BASED ON 12-MONTH AVERAGE.
SEC. 1104. ACREAGE REDUCTION PROGRAMS FOR 1992 THROUGH 1995 CROPS.
SEC. 1201. AUTHORIZATION LEVELS FOR RURAL ELECTRIC AND TELEPHONE LOANS.
`SEC. 314. AUTHORIZATION LEVELS FOR RURAL ELECTRIC AND TELEPHONE LOANS.
SEC. 1203. APHIS INSPECTION USER FEE ON INTERNATIONAL PASSENGERS.
Sec. 2001. Short title.
Sec. 2002. FDIC authorized to increase assessment rates as necessary to prote
ct insurance funds.
Sec. 2003. FDIC authorized to make mid-year adjustments in assessment rates.
Sec. 2004. FDIC authorized to set designated reserve ratio as necessary in fa
ce of significant risk of substantial losses to insurance fund.
Sec. 2005. FDIC authorized to borrow from Federal Financing Bank.
Sec. 2101. Increase in mortgage limit.
Sec. 2102. Mortgagor equity.
Sec. 2103. Mortgage insurance premiums.
Sec. 2104. Mutual mortgage insurance fund distributions.
Sec. 2105. Actuarial soundness of mutual mortgage insurance fund.
Sec. 2106. Home equity conversion mortgage insurance demonstration.
Sec. 2201. Auction of multifamily mortgages.
SEC. 2002. FDIC AUTHORIZED TO INCREASE ASSESSMENT RATES AS NECESSARY TO PROTE
CT INSURANCE FUNDS.
SEC. 2003. FDIC AUTHORIZED TO MAKE MID-YEAR ADJUSTMENTS IN ASSESSMENT RATES.
SEC. 2004. FDIC AUTHORIZED TO SET DESIGNATED RESERVE RATIO AS NECESSARY IN FA
CE OF SIGNIFICANT RISK OF SUBSTANTIAL LOSSES TO INSURANCE FUND.
SEC. 2005. FDIC AUTHORIZED TO BORROW FROM FEDERAL FINANCING BANK.
SEC. 2105. ACTUARIAL SOUNDNESS OF MUTUAL MORTGAGE INSURANCE FUND.
and
1 So in original. Probably should be `violation';'.
2 So in original, The `, and' probably should be a period.
Sec. 4001. Payments for capital-related costs of inpatient hospital services.
Sec. 4002. Prospective payment hospitals.
Sec. 4003. Expansion of DRG payment window.
Sec. 4004. Payments for medical education costs.
Sec. 4005. PPS-exempt hospitals.
Sec. 4006. Hospice benefit extension.
Sec. 4007. Freeze in payments under part A through December 31.
Sec. 4008. Miscellaneous and technical provisions relating to part A.
Sec. 4101. Certain overvalued procedures.
Sec. 4102. Radiology services.
Sec. 4103. Anesthesia services.
Sec. 4104. Physician pathology services.
Sec. 4105. Update for physicians' services.
Sec. 4106. New physicians and other new health care practitioners.
Sec. 4107. Assistants at surgery.
Sec. 4108. Technical components of certain diagnostic tests.
Sec. 4109. Interpretation of electrocardiograms.
Sec. 4110. Reciprocal billing arrangements.
Sec. 4111. Study of prepayment medical review screens.
Sec. 4112. Practicing physicians advisory council.
Sec. 4113. Study of aggregation rule for claims for similar physicians' servi
ces.
Sec. 4114. Utilization screens for physician visits in rehabilitation hospita
ls.
Sec. 4115. Study of regional variations in impact of medicare physician payme
nt reform.
Sec. 4116. Limitation on beneficiary liability.
Sec. 4117. Statewide fee schedule areas for physicians' services.
Sec. 4118. Technical corrections.
Sec. 4151. Payments for hospital outpatient services.
Sec. 4152. Durable medical equipment.
Sec. 4153. Provisions relating to orthotics and prosthetics.
Sec. 4154. Clinical diagnostic laboratory tests.
Sec. 4155. Coverage of nurse practitioners in rural areas.
Sec. 4156. Coverage of injectable drugs for treatment of osteoporosis.
Sec. 4157. Separate payment under part B for services of certain health pract
itioners.
Sec. 4158. Reduction in payments under part B during final 2 months of 1990.
Sec. 4159. Payments for medical education costs.
Sec. 4160. Certified registered nurse anesthetists.
Sec. 4161. Community health centers and rural health clinics.
Sec. 4162. Partial hospitalization in community mental health centers.
Sec. 4163. Coverage of screening mammography.
Sec. 4164. Miscellaneous and technical provisions relating to part B.
Sec. 4201. Provisions relating to end stage renal disease.
Sec. 4202. Staff-assisted home dialysis demonstration project.
Sec. 4203. Extension of secondary payor provisions.
Sec. 4204. Health maintenance organizations.
Sec. 4205. Peer review organizations.
Sec. 4206. Medicare provider agreements assuring the implementation of a pati
ent's right to participate in and direct health care decisions affecting the pat
ient.
Sec. 4207. Miscellaneous and technical provisions relating to parts A and B.
Sec. 4301. Part B premium.
Sec. 4302. Part B deductible.
Sec. 4351. Simplification of medicare supplemental policies.
Sec. 4352. Guaranteed renewability.
Sec. 4353. Enforcement of standards.
Sec. 4354. Preventing duplication.
Sec. 4355. Loss ratios and refund of premiums.
Sec. 4356. Clarification of treatment of plans offered by health maintenance
organizations.
Sec. 4357. Pre-existing condition limitations and limitation on medical under
writing.
Sec. 4358. Medicare select policies.
Sec. 4359. Health insurance advisory services for medicare beneficiaries.
Sec. 4360. Health insurance information, counseling, and assistace grants.
Sec. 4361. Medicare and medigap information by telephone.
SEC. 4001. PAYMENTS FOR CAPITAL-RELATED COSTS OF INPATIENT HOSPITAL SERVICES.
--Section 1886(e)(2) (42 U.S.C. 1395ww(e)(2)) is amended--
3 So in original. Probably should be `RESPONSIBILITIES'.
`(i) if such agency or organization receives a completed application, whether
such agency or organization is able to process such application not later than
75 days after the application is filed, and
4 So in original. Probably should be `(i)'.
SEC. 4008. MISCELLANEOUS AND TECHNICAL PROVISIONS RELATING TO PART A.
5 So in original. The `'.' should probably be deleted.
SEC. 4106. NEW PHYSICIANS AND OTHER NEW HEALTH CARE PRACTITIONERS.
SEC. 4113. STUDY OF AGGREGATION RULE FOR CLAIMS FOR SIMILAR PHYSICIANS' SERVI
CES.
SEC. 4114. UTILIZATION SCREENS FOR PHYSICIAN VISITS IN REHABILITATION HOSPITA
LS.
SEC. 4115. STUDY OF REGIONAL VARIATIONS IN IMPACT OF MEDICARE PHYSICIAN PAYME
NT REFORM.
SEC. 4117. STATEWIDE FEE SCHEDULE AREAS FOR PHYSICIANS' SERVICES.
6 So in original. Probably should be `;'.
7 So in original. Probably should be `;'.
8 So in original. Probably should be `;'.
and
9 So in original. Probably should be `;'.
10 So in original. Probably should be `;'.
' and inserting `all physicians' services or for the category of physicians'
services, respectively,',
11 So in original. Probably should be `(A))'.
comparable services and under comparable circumstances, to the policyholders
and subscribers of the carrier,
12 So in original. `a' probably should be omitted.
reduction of 1 percentage point; and
13 So in original. Probably should be `a reduction'.
Act of 1989.
14 So in original. Probably should be `Reconciliation'.
(1)(B), (2), and (4) shall take effect as if included in the enactment of th
e Omnibus Budget Reconciliation Act of 1989, and the amendment made by paragraph
(1)(C) shall take effect January 1, 1991.
15 So in original. Probably should be `(1)(A),'.
SEC. 4156. COVERAGE OF INJECTABLE DRUGS FOR TREATMENT OF OSTEOPOROSIS.
`Covered Osteoporosis Drug
SEC. 4157. SEPARATE PAYMENT UNDER PART B FOR SERVICES OF CERTAIN HEALTH PRACT
ITIONERS.
SEC. 4158. REDUCTION IN PAYMENTS UNDER PART B DURING FINAL 2 MONTHS OF 1990.
SEC. 4162. PARTIAL HOSPITALIZATION IN COMMUNITY MENTAL HEALTH CENTERS.
is amended by striking `include a clinic' and all that follows through the p
eriod and inserting the following: `include--
16 So in original. Probably should be `(e))'.
`Screening Mammography
SEC. 4164. MISCELLANEOUS AND TECHNICAL PROVISIONS RELATING TO PART B.
;
17 So in original. Probably should be `program.';'.
and
18 So in original. Probably should be `(B)', '.
SEC. 4202. STAFF-ASSISTED HOME DIALYSIS DEMONSTRATION PROJECT.
change in the costs to the organization of providing the benefits that are t
he subject of such national coverage determination and that was not incorporated
in the determination of the per capita rate of payment included in the announce
ment made at the beginning of such period--
19 So in original. Probably should be `significant'.
by a physician, provider of services, or renal dialysis facility who is not
under a contract with the organization.'.
20 So in original. Probably should be `section'.
a practitioner or person has demonstrated an unwillingness or lack of abilit
y substantially to comply with such obligations, the Secretary shall consider th
e practitioner's or person's willingness or lack of ability, during the period b
efore the organization submits its report and recommendations, to enter into and
successfully complete a corrective action plan.'.
21 So in original. Probably should be `whether'.
Act of 1989.
22 So in original. Probably should be `Reconciliation'.
SEC. 4206. MEDICARE PROVIDER AGREEMENTS ASSURING THE IMPLEMENTATION OF A PATI
ENT'S RIGHT TO PARTICIPATE IN AND DIRECT HEALTH CARE DECISIONS AFFECTING THE PAT
IENT.
SEC. 4027. MISCELLANEOUS AND TECHNICAL PROVISIONS RELATING TO PARTS A AND B.
23 So in original. Probably should be `review.'.'.
of innovative approaches to refining targeting and financing methodologies a
nd benefit design, including the effectiveness of feasibility of--
24 So in original. Probably should be `feasibility'.
25 So in original. Probably should be `(7);'.
26 So in original. Probably should be `;'.
, to return to policyholders in the form of aggregate benefits provided under
the policy, at least 75 percent of the aggregate amount of premiums collected i
n the case of group policies and at least 65 percent in the case of individual p
olicies; and
27 So in original. Probably should be `Commissioners),'.
of premium increases, for policies that fail to meet the requirements of thi
s subsection (relating to loss-ratios). Such report shall include a list of the
policies that failed to comply with such loss-ratio requirements or other requir
ements of this section.
28 So in original. Probably should be `disallowance'.
SEC. 4356. CLARIFICATION OF TREATMENT OF PLANS OFFERED BY HEALTH MAINTENANCE
ORGANIZATIONS.
SEC. 4357. PRE-EXISTING CONDITION LIMITATIONS AND LIMITATION ON MEDICAL UNDER
WRITING.
SEC. 4359. HEALTH INSURANCE ADVISORY SERVICE FOR MEDICARE BENEFICIARIES.
SEC. 4360. HEALTH INSURANCE INFORMATION, COUNSELING, AND ASSISTANCE GRANTS.
and information that may assist individuals in filing claims under such medi
care supplemental policies;
29 So in original. Probably should be `Act)'.
shall, not later than 180 days after receiving such grant, and annually ther
eafter, issue an annual report to the Secretary that includes information concer
ning--
30 So in original. Probably should be `(a) or (c)'.
Sec. 4401. Reimbursement for prescribed drugs.
Sec. 4402. Requiring medicaid payment of premiums and cost-sharing for enroll
ment under group health plans where cost-effective.
Sec. 4501. Phased-in extension of medicaid payments for medicare premiums for
certain individuals with income below 120 percent of the official poverty line.
Sec. 4601. Medicaid child health provisions.
Sec. 4602. Mandatory use of outreach locations other than welfare offices.
Sec. 4603. Mandatory continuation of benefits throughout pregnancy or first y
ear of life.
Sec. 4604. Adjustment in payment for hospital services furnished to low-incom
e children under the age of 6 years.
Sec. 4605. Presumptive eligibility.
Sec. 4606. Role in paternity determinations.
Sec. 4607. Report and transition on errors in eligibility determinations.
Sec. 4701. State medicaid matching payments through voluntary contributions a
nd State taxes.
Sec. 4702. Disproportionate share hospitals: counting of inpatient days.
Sec. 4703. Disproportionate share hospitals: alternative State payment adjust
ments and systems.
Sec. 4704. Federally-qualified health centers.
Sec. 4705. Hospice payments.
Sec. 4706. Limitation on disallowances or deferral of Federal financial parti
cipation for certain inpatient psychiatric hospital services for individuals und
er age 21.
Sec. 4707. Treatment of interest on Indiana disallowance.
Sec. 4708. Billing for services of substitute physician.
Sec. 4711. Home and community-based care as optional service.
Sec. 4712. Community supported living arrangements services.
Sec. 4713. Providing Federal medical assistance for payments for premiums for
`COBRA' continuation coverage where cost effective.
Sec. 4714. Provisions relating to spousal impoverishment.
Sec. 4715. Disregarding German reparation payments from post-eligibility trea
tment of income under the medicaid program.
Sec. 4716. Amendments relating to medicaid transition provision.
Sec. 4717. Clarifying effect of hospice election.
Sec. 4718. Medically needy income levels for certain 1-member families.
Sec. 4719. Codification of coverage of rehabilitation services.
Sec. 4720. Personal care services for Minnesota.
Sec. 4721. Medicaid coverage of personal care services outside the home.
Sec. 4722. Medicaid coverage of alcoholism and drug dependency treatment serv
ices.
Sec. 4723. Medicaid spenddown option.
Sec. 4424. Optional State medicaid disability determinations independent of t
he Social Security Administration.
Sec. 4731. Regulation of incentive payments to physicians.
Sec. 4732. Special rules.
Sec. 4733. Extension and expansion of Minnesota prepaid medicaid demonstratio
n project.
Sec. 4734. Treatment of certain county-operated health insuring organizations
.
Sec. 4741. Home and community-based waivers.
Sec. 4742. Timely payment under waivers of freedom of choice of hospital serv
ices.
Sec. 4744. Provisions relating to frail elderly demonstration project waivers
.
Sec. 4745. Demonstration projects to study the effect of allowing States to e
xtend medicaid coverage to certain low-income families not otherwise qualified t
o receive medicaid benefits.
Sec. 4746. Medicaid respite demonstration project extended.
Sec. 4747. Demonstration project to provide medicaid coverage for HIV-positiv
e individuals.
Sec. 4751. Requirements for advanced directives under State plans for medical
assistance.
Sec. 4752. Improvement in quality of physician services.
Sec. 4753. Clarification of authority of Inspector General.
Sec. 4754. Notice to State medical boards when adverse actions taken.
Sec. 4755. Miscellaneous provisions.
Sec. 4801. Technical corrections relating to nursing home reform.
for each of the manufacturer's covered outpatient drugs.
31 So in original. Probably should be `1990,'.
32 So in original. Probably should be `.'.
33 So in original. Probably should be `.'.
34 So in original. Probably should be `(ii))'.
manufacturer demonstrates through a petition, in a form and manner prescribe
d by the Secretary, undue hardship on such manufacturer as a result of the inclu
sion of such drug in such calculation). 36
35 So in original. The `inclus' probably should be `the'.
36 So in original. Probably should be `calculation.'.
of the average manufacturer price for each dosage form and strength of such
drugs (after deducting customary prompt payment discounts) for the quarter (or o
ther period), and
37 So in original. Probably should be `(4))'.
During the period of time described in subparagraph (A), any State that was
in compliance with the regulations described in subparagraph (A) may not reduce
the limits for covered outpatient drugs described in subparagraph (A) or dispens
ing fees for such drugs.
38 So in original. Probably should be `(B)'.
emergency room visits.
39 So in original. Probably should be `services emergency'.
operating under the new drug application.
40 So in original. Probably should be `distributors'.
equivalent if the products contain identical amounts of the same active drug
ingredient in the same dosage form and meet compendial or other applicable stand
ards of strength, quality, purity, and identity;
41 So in original. Probably should be `pharmaceutically'.
SEC. 4402. REQUIRING MEDICAID PAYMENT OF PREMIUMS AND COST-SHARING FOR ENROLL
MENT UNDER GROUP HEALTH PLANS WHERE COST-EFFECTIVE.
SEC. 4501. PHASED-IN EXTENSION OF MEDICAID PAYMENTS FOR MEDICARE PREMIUMS FOR
CERTAIN INDIVIDUALS WITH INCOME BELOW 120 PERCENT OF THE OFFICIAL POVERTY LINE.
SEC. 4602. MANDATORY USE OF OUTREACH LOCATIONS OTHER THAN WELFARE OFFICES.
quarters beginning on or after July 1, 1991, without regard to whether or no
t final regulations to carry out such amendments have been promulgated by such d
ate.
42 So in original. Probably should be `calendar'.
SEC. 4603. MANDATORY CONTINUATION OF BENEFITS THROUGHOUT PREGNANCY OR FIRST Y
EAR OF LIFE.
`(II) the loan level determined for the crop, prior to a
ny adjustment made under subsection (a)(3) for the marketing year for the crop o
f wheat.'.
(b) FEED GRAINS- Clause (ii) of section 105B(c)(1)(B) of the Agricultura
l Act of 1949 (as added by section 401 of the Food, Agriculture, Conservation, a
nd Trade Act of 1990) is amended to read as follows:
`(ii) PAYMENT RATE OF 1994 AND 1995 CROPS- The payment rate
for each of the 1994 and 1995 crops of corn, grain sorghums, oats, and barley sh
all be the amount by which the established price for the respective crop of feed
grains exceeds the higher of--
`(I) the lesser of--
`(II) the loan level determined for the crop, prior to a
ny adjustment made under subsection (a)(3) for the marketing year for the respec
tive crop of feed grains.'.
(c) RICE- Clause (ii) of section 101B(c)(1)(B) of the Agricultural Act o
f 1949 (as added by section 601 of the Food, Agriculture, Conservation, and Trad
e Act of 1990) is amended to read as follows:
`(ii) PAYMENT RATE OF 1994 AND 1995 CROPS- The payment rate
for each of the 1994 and 1995 crops of rice shall be the amount by which the est
ablished price for the crop of rice exceeds the higher of--
`(I) the lesser of--
`(II) the loan level determined for the crop.'.
(d) CONFORMING AMENDMENT- Section 114(c) of the Agricultural Act of 1949
(as amended by section 1121(a) of the Food, Agriculture, Conservation, and Trad
e Act of 1990 and redesignated by section 1161(a)(1) of such Act) by striking `w
heat, feed grains, and rice which payments are calculated on the basis of the na
tional weighted average market price (or, in the case of rice, the national aver
age market price) for the marketing year for the crop' and inserting `wheat and
feed grains which payments are calculated as provided in sections 107B(c)(1)(B)(
ii), 107B(p), or 105B(c)(1)(B)(ii)'.
SEC. 1103. ACREAGE REDUCTION PROGRAM FOR 1991 CROP.
(a) WHEAT- In the case of the 1991 crop of wheat, the Secretary of Agric
ulture shall provide for an acreage limitation program as described in section 1
07B(e)(1)(F) of the Agricultural Act of 1949 (as added by section 301 of the Foo
d, Agriculture, Conservation, and Trade Act of 1990).
(b) FEED GRAINS- Subparagraph (F) of section 105B(e)(1) of the Agricultu
ral Act of 1949 (as added by section 401 of the Food, Agriculture, Conservation,
and Trade Act of 1990) is amended to read as follows:
`(F) ACREAGE LIMITATION PROGRAM FOR 1991 CROP- In the case of th
e 1991 crop of corn, the Secretary shall provide for an acreage limitation progr
am (as described in paragraph (2)) under which the acreage planted to corn for h
arvest on a farm would be limited to the corn crop acreage base for the farm for
the crop reduced by not less than 7.5 percent.'.
(a) IN GENERAL- Notwithstanding any other provision of law, except as pr
ovided in subsections (b) and (c), the Secretary of Agriculture shall announce a
n acreage limitation program for each of the 1992 through 1995 crops of--
(1) wheat under which the acreage planted to wheat for harvest on a
farm would be limited to the wheat crop acreage base for the farm for the crop r
educed by--
(A) in the case of the 1992 crop of wheat, not less than 6 perce
nt;
(B) in the case of the 1993 crop of wheat, not less than 5 perce
nt;
(C) in the case of the 1994 crop of wheat, not less than 7 perce
nt; and
(D) in the case of the 1995 crop of wheat, not less than 5 perce
nt; and
(2) corn, grain sorghum, and barley under which the acreage planted
to the respective feed grain for harvest on a farm would be limited to the respe
ctive feed grain crop acreage base for the farm for the crop reduced by not less
than 7 1/2 percent.
(b) STOCKS-TO-USE RATIO- Subsection (a) shall not apply to a crop if the
Secretary estimates for such crop that the stocks-to-use ratio will be less tha
n--
(1) in the case of wheat, 34 percent; and
(2) in the case of corn, grain sorghum, and barley, 20 percent.
(c) TERMINATION- If the Secretary determines that the quantity of soybea
ns on hand in the United States on the first day of the marketing year for the 1
991 crop of soybeans (not including any quantity of soybeans of the 1991 crop) w
ill be less than 325,000,000 bushels, subsection (a) shall not apply to any of t
he 1992 through 1995 crops of wheat and feed grains.
SEC. 1105. LOAN ORIGINATION FEES AND OTHER SAVINGS.
(a) OILSEEDS- Section 205 of the Agricultural Act of 1949 (as added by s
ection 701(2) of the Food, Agriculture, Conservation, and Trade Act of 1990) is
amended--
(1) by redesignating subsection (m) as subsection (n); and
(2) by inserting after subsection (1) the following new subsection:<
/ul>
`(m) Loan Origination Fee-
`(1) LOANS- The Secretary shall charge a producer a loan origination
fee for a crop of oilseeds, in connection with making a loan, equal to the prod
uct obtained by multiplying--
`(A) the loan level determined for the crop under subsection (c)
; by
`(B) 2 percent; by
`(C) the quantity of oilseeds for which the producer obtains the
loan.
`(2) LOAN DEFICIENCY PAYMENTS- The Secretary shall deduct, from the
amount of any loan deficiency payment made under subsection (e), an amount equal
to the amount of the loan origination fee that would otherwise be paid under pa
ragraph (1) if the producer obtained a loan rather a loan deficiency payment.'.<
/ul>
(b) PEANUTS-
(1) IN GENERAL- Section 108B of the Agricultural Act of 1949 (as add
ed by section 806 of the Food, Agriculture, Conservation, and Trade Act of 1990)
is amended--
(A) by redesignating subsection (g) as subsection (h); and
<
/ul> (B) by inserting after subsection (f) the following new subsecti
on:
`(g) MARKETING ASSESSMENT-
`(1) IN GENERAL- The Secretary shall provide, by regulation, for a n
onrefundable marketing assessment applicable to each of the 1991 through 1995 cr
ops of peanuts. The assessment shall be made in accordance with this subsection
and shall be on a per pound basis in an amount equal to 1 percent of the nationa
l average quota or additional peanut support rate per pound, as applicable, for
the applicable crop. No peanuts shall be assessed more than 1 percent of the app
licable support rate under this subsection.
`(2) FIRST PURCHASERS-
`(A) IN GENERAL- Except as provided under paragraphs (3) and (4)
, the first purchaser of peanuts shall--
`(i) collect from the producer a marketing assessment equal
to 1/2 percent of the applicable national average support rate times the quant
ity of peanuts acquired;
`(ii) pay, in addition to the amount collected under clause
(i), a marketing assessment in an amount equal to 1/2 percent of the applicabl
e national average support rate times the quantity of peanuts acquired; and
`(iii) remit the amounts required under clauses (i) and (ii)
to the Commodity Credit Corporation in a manner specified by the Secretary.
`(B) DEFINITION- For purposes of this subsection, the term `firs
t purchaser' means a person acquiring peanuts from a producer except that in the
case of peanuts forfeited by a producer to the Commodity Credit Corporation, su
ch term means the person acquiring the peanuts from the Commodity Credit Corpora
tion.
`(3) OTHER PRIVATE MARKETINGS- In the case of a private marketing by
a producer directly to a consumer through a retail or wholesale outlet or in th
e case of a marketing by the producer outside of the continental United States,
the producer shall be responsible for the full amount of the assessment and shal
l remit the assessment by such time as is specified by the Secretary.
`(4) LOAN PEANUTS- In the case of peanuts that are pledged as collat
eral for a price support loan made under this section, 1/2 of the assessment s
hall be deducted from the proceeds of the loan. The remainder of the assessment
shall be paid by the first purchaser of the peanuts. For purposes of computing n
et gains on peanuts under this section, the reduction in loan proceeds shall be
treated as having been paid to the producer.
`(5) PENALTIES- If any person fails to collect or remit the reductio
n required by this subsection or fails to comply with such requirements for reco
rdkeeping or otherwise as are required by the Secretary to carry out this subsec
tion, the person shall be liable to the Secretary for a civil penalty up to an a
mount determined by multiplying--
`(A) the quantity of peanuts involved in the violation; by
<
/ul> `(B) the national average quota peanut price support level for t
he applicable crop year.
`(6) ENFORCEMENT- The Secretary may enforce this subsection in the c
ourts of the United States.'.
(2) CONFORMING AMENDMENT- Section 108B(a)(2) of the Agricultural Act
of 1949 (as added by section 806(3) of the Food, Agriculture, Conservation, and
Trade Act of 1990) is amended by inserting after `cost of land' the following:
`and the cost of any assessments required under subsection (g)'.
(c) SUGAR- Section 206 of the Agricultural Act of 1949 (as added by sect
ion 901(2) of the Food, Agriculture, Conservation, and Trade Act of 1990) is ame
nded--
(1) by redesignating subsection (i) as subsection (j); and
(2) by inserting after subsection (h) the following new subsection:<
/ul>
`(i) Marketing Assessment-
`(1) SUGARCANE- Effective only for each of the 1991 through 1995 cro
ps of sugarcane, the first processor of sugarcane shall remit to the Commodity C
redit Corporation a nonrefundable marketing assessment in an amount equal to .18
cents per pound of raw cane sugar processed by the processor from domestically
produced sugarcane.
`(2) SUGAR BEETS- Effective only for each of the 1991 through 1995 c
rops of sugar beets, the first processor of sugar beets shall remit to the Commo
dity Credit Corporation a nonrefundable marketing assessment in an amount equal
to .193 cents per pound of beet sugar processed by the processor from domestical
ly produced sugar beets.
`(3) COLLECTION- Marketing assessments required under this subsectio
n shall be collected and remitted to the Commodity Credit Corporation in the man
ner prescribed by the Secretary and shall be nonrefundable.
`(4) PENALTIES- If any person fails to collect or remit the reductio
n required by this subsection or fails to comply with such requirements for reco
rdkeeping or otherwise as are required by the Secretary to carry out this subsec
tion, the person shall be liable to the Secretary for a civil penalty up to an a
mount determined by multiplying--
`(A) the quantity of cane sugar or beet sugar involved in the vi
olation; by
`(B) the support level for the applicable crop of sugarcane or s
ugar beets.
`(5) ENFORCEMENT- The Secretary may enforce this subsection in the c
ourts of the United States.'.
(d) HONEY- Section 207 of the Agricultural Act of 1949 (as added by sect
ion 1001 of the Food, Agriculture, Conservation, and Trade Act of 1990) is amend
ed--
(1) by redesignating subsection (i) as subsection (j); and
(2) by inserting after subsection (h) the following new subsection:<
/ul>
`(i) Marketing Assessment-
`(1) IN GENERAL- Effective only for each of the 1991 through 1995 cr
ops of honey, producers and producer-packers of honey (as defined in paragraphs
(5) and (9), respectively, of section 3 of the Honey Research, Promotion, and Co
nsumer Information Act (7 U.S.C. 4602)) shall remit to the Commodity Credit Corp
oration a nonrefundable marketing assessment on a per pound basis in an amount e
qual to 1 percent of the national price support level for each such crop as othe
rwise provided in this section.
`(2) COLLECTION- The assessment shall be collected and remitted by t
he first handler of honey in the manner prescribed by the Secretary which, to th
e extent practicable, shall be as provided for in the Honey Research, Promotion,
and Consumer Information Act.
`(3) EXEMPTIONS- All persons who are exempt from the payment of the
assessment authorized by such Act, and all imported honey, shall be exempt from
the payment of the assessment required by this subsection.
`(4) PENALTIES- If any person fails to collect or remit the reductio
n required by this subsection or fails to comply with such requirements for reco
rdkeeping or otherwise as are required by the Secretary to carry out this subsec
tion, the person shall be liable to the Secretary for a civil penalty up to an a
mount determined by multiplying--
`(A) the quantity of honey involved in the violation; by
`(B) the support level for the applicable crop of honey.
`(5) ENFORCEMENT- The Secretary may enforce this subsection in the c
ourts of the United States.'.
(e) WOOL AND MOHAIR- Section 704 of the National Wool Act of 1954 (7 U.S
.C. 1783) (as amended by section 201(b) of the Food, Agriculture, Conservation,
and Trade Act of 1990) is amended by adding at the following new subsection:
`(c) MARKETING ASSESSMENTS- Effective only for each of the 1991 through
1995 marketing years for wool and mohair, the Secretary shall deduct an amount f
rom the payment to be made available to producers of wool and mohair under subse
ction (a) equal to 1 percent of the payment.'.
(f) TOBACCO- Section 106 of the Agricultural Act of 1949 (7 U.S.C. 1445)
is amended by adding at the end the following new subsection:
`(g)(1) Effective only for each of the 1991 through 1995 crops of tobacc
o for which price support is made available under this Act, producers and purcha
sers of such tobacco shall each remit to the Commodity Credit Corporation a nonr
efundable marketing assessment in an amount equal to .5 percent of the national
price support level for each such crop as otherwise provided for in this section
.
`(2) Such producer assessments and purchaser assessments shall be--
`(A) collected in the same manner as provided for in section 106A(d)
(2) or 106B(d)(3), as applicable; and
`(B) enforced in the same manner as provided in section 106A(h) or 1
06B(j), as applicable.
`(3) The Secretary may enforce this subsection in the courts of the Unit
ed States.'.
(g) OTHER SAVINGS- Section 204 of the Agricultural Act of 1949 (as added
by section 101 of the Food, Agriculture, Conservation, and Trade Act of 1990) i
s amended--
(1) in subsection (g)--
(A) in paragraph (1), by striking `1991 through 1994' and insert
ing `1992 through 1995';
(B) in the matter preceding subparagraph (A) of paragraph (2)--<
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(i) by inserting after `purchases' the following: `in the fo
llowing calendar year'; and
(ii) by inserting after `producers' the following: `in such
following calendar year'; and
(C) in paragraph (2)(B), by striking `that calendar year' and in
serting `such following calendar year';
(2) by redesignating subsections (h) and (i) as subsections (j) and
(k), respectively; and
(3) by inserting after subsection (g) the following new subsections:
`(h) Reduction in Price Received-
`(1) IN GENERAL- Beginning January 1, 1991, the Secretary shall prov
ide for a reduction in the price received by producers for all milk produced in
the United States and marketed by producers for commercial use, in addition to a
ny reduction in price required under subsection (g).
`(2) AMOUNT- The amount of the reduction under paragraph (1) in the
price received by producers shall be--
`(A) during calendar year 1991, 5 cents per hundredweight of mil
k marketed; and
`(B) during each of the calendar years 1992 through 1995, 11.25
cents per hundredweight of milk marketed, which rate shall be adjusted on or bef
ore May 1 of each of the calendar years 1992 through 1995 by an amount per hundr
edweight that is necessary to compensate for refunds made under paragraph (3) on
the basis of marketings in the previous calendar year.
`(3) REFUND- The Secretary shall provide a refund of the entire redu
ction under paragraph (2) in the price of milk received by a producer during a c
alendar year, if the producer provides evidence that the producer did not increa
se marketings in the calendar year that such reduction was in effect when compar
ed to the immediately preceding calendar year.
`(i) Enforcement-
`(1) COLLECTION- Reductions in price required under subsection (g) o
r (h) shall be collected and remitted to the Commodity Credit Corporation in the
manner prescribed by the Secretary.
`(2) PENALTIES- If any person fails to collect or remit the reductio
n required by subsection (g) or (h) or fails to comply with such requirements fo
r recordkeeping or otherwise as are required by the Secretary to carry out such
subsection, the person shall be liable to the Secretary for a civil penalty up t
o an amount determined by multiplying--
`(A) the quantity of milk involved in the violation; by
`(B) the support rate for the applicable calendar year for milk.
`(3) ENFORCEMENT- The Secretary may enforce subsection (g) or (h) in
the courts of the United States.'.
Subtitle B--Other Agricultural Programs
Title III of the Rural Electrification Act of 1936 (7 U.S.C. 931 et seq.
) is amended by adding at the end the following new section:
`(a) IN GENERAL- Subject to the other provisions of this section and not
withstanding any other provision of law, for each of fiscal years 1991 through 1
995, insured loans may be made in accordance with this title from the Rural Elec
trification and Telephone Revolving Fund established under section 301 in amount
s equal to the following levels:
`(1) For fiscal year 1991, $896,000,000.
`(2) For fiscal year 1992, $932,000,000.
`(3) For fiscal year 1993, $969,000,000.
`(4) For fiscal year 1994, $1,008,000,000.
`(5) For fiscal year 1995, $1,048,000,000.
`(b) REDUCTION- Notwithstanding any other provision of law, for each of
fiscal years 1991 through 1995, the Administrator shall--
`(1) reduce the amounts otherwise made available for insured loans m
ade from the Rural Electrification and Telephone Revolving Fund by--
`(A) $224,000,000 for fiscal year 1991;
`(B) $234,000,000 for fiscal year 1992;
`(C) $244,000,000 for fiscal year 1993;
`(D) $256,000,000 for fiscal year 1994; and
`(E) $267,000,000 for fiscal year 1995; and
`(2) use the funds made available from such reductions in each fisca
l year to guarantee loans under subsection (d).
`(c) MANDATORY LEVELS- Notwithstanding any other provision of law, the A
dministrator shall make insured loans at the levels authorized by this section f
or each of fiscal years 1991 through 1995 taking into account any reductions und
er subsection (b).
`(d) GUARANTEED LOANS--
`(1) IN GENERAL- Except as otherwise provided in this subsection and
subsection (e) and notwithstanding any other provision of law, in carrying out
this Act, the Administrator shall guarantee loans made by legally organized lend
ing agencies to the extent of the reduction in insured loans as provided in subs
ection (b).
`(2) AMOUNT OF GUARANTEE- The guarantees authorized under paragraph
(1) shall be 90 percent of the principal of and interest on the loan and shall b
e made only upon the request of the borrower.
`(3) NO FEDERAL INSTRUMENTALITY- The Administrator may not provide a
ny such guarantee for a loan made by the Federal Financing Bank, the Rural Telep
hone Bank, or any other lending agency that is an agency or instrumentality of t
he United States other than banks for cooperatives.
`(4) AUTHORITY- The Administrator is authorized to approve such guar
antees subject to full use being made during each fiscal year of insured loan am
ounts made available during the fiscal year.
`(5) CONSTRUCTION- Nothing in this subsection shall be construed as
modifying the authority provided in section 306.
`(e) IMPLEMENTATION-
`(1) IN GENERAL- The Administrator shall implement the reduction in
insured loans provided by subsection (b) in a manner that will lessen its advers
e effect.
`(2) ALLOCATION BETWEEN ELECTRIC AND TELEPHONE PROGRAMS- The reducti
ons required by subsection (b) shall be allocated between the electric and telep
hone programs for each fiscal year in proportion to the amount of insured funds
made available for each such program during the fiscal year in annual appropriat
ions Acts.
`(3) ELECTRIC BORROWER'S OPTION- If the amount of an insured electri
c loan is reduced as a result of the requirements of subsection (b), the electri
c borrower may, at the option of such borrower, obtain capital to replace the am
ount of the reduction--
`(A) with the assistance of a loan guarantee (as provided by sub
section (d));
`(B) from internally generated funds of the electric borrower;
`(C) from private credit sources with a lien accommodation provi
ded by the Administrator; or
`(D) from other private sources.'.
SEC. 1202. AUTHORIZATION LEVELS FOR FmHA LOANS.
(a) IN GENERAL- Subsection (b) of section 346 of the Consolidated Farm a
nd Rural Development Act (7 U.S.C. 1994(b)) is amended to read as follows:
`(b)(1) For each of the fiscal years 1991 through 1995, real estate and
operating loans may be insured, made to be sold and insured, or guaranteed in ac
cordance with subtitles A and B, respectively, from the Agricultural Credit Insu
rance Fund established under section 309 in amounts equal to the following level
s:
`(A) For fiscal year 1991, $4,175,000,000, of which not less than $8
27,000,000 shall be for farm ownership loans under subtitle A.
`(B) For fiscal year 1992, $4,343,000,000, of which not less than $8
61,000,000 shall be for farm ownership loans under subtitle A.
`(C) For fiscal year 1993, $4,516,000,000, of which not less than $8
95,000,000 shall be for farm ownership loans under subtitle A.
`(D) For fiscal year 1994, $4,697,000,000, of which not less than $9
31,000,000 shall be for farm ownership loans under subtitle A.
`(E) For fiscal year 1995, $4,885,000,000, of which not less than $9
68,000,000 shall be for farm ownership loans under subtitle A.
`(2) Subject to paragraph (3), such amounts set forth in paragraph (1) s
hall be apportioned as follows:
`(A) For fiscal year 1991--
`(i) $1,019,000,000 for insured loans, of which not less than $8
3,000,000 shall be for farm ownership loans; and
`(ii) $3,156,000,000 for guaranteed loans, of which not less tha
n $744,000,000 shall be for guarantees of farm ownership loans.
`(B) For fiscal year 1992--
`(i) $1,060,000,000 for insured loans, of which not less than $8
7,000,000 shall be for farm ownership loans; and
`(ii) $3,283,000,000 for guaranteed loans, of which not less tha
n $774,000,000 shall be for guarantees of farm ownership loans.
`(C) For fiscal year 1993--
`(i) $1,102,000,000 for insured loans, of which not less than $9
0,000,000 shall be for farm ownership loans; and
`(ii) $3,414,000,000 for guaranteed loans, of which not less tha
n $805,000,000 shall be for guarantees of farm ownership loans.
`(D) For fiscal year 1994--
`(i) $1,147,000,000 for insured loans, of which not less than $9
4,000,000 shall be for farm ownership loans; and
`(ii) $3,550,000,000 for guaranteed loans, of which not less tha
n $837,000,000 shall be for guarantees of farm ownership loans.
`(E) For fiscal year 1995--
`(i) $1,192,000,000 for insured loans, of which not less than $9
7,000,000 shall be for farm ownership loans; and
`(ii) $3,693,000,000 for guaranteed loans, of which not less tha
n $871,000,000 shall be for guarantees of farm ownership loans.
`(3) Notwithstanding any other provision of law:
`(A) The Secretary shall--
`(i) reduce the amounts otherwise made available for insured loa
ns by--
`(I) $482,000,000, for fiscal year 1991;
`(II) $614,000,000, for fiscal year 1992;
`(III) $760,000,000, for fiscal year 1993;
`(IV) $859,000,000, for fiscal year 1994; and
<
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`(V) $907,000,000, for fiscal year 1995; and
`(ii) use the funds made available from such reductions in each
fiscal year to guarantee loans under section 351.
`(B) The total amount of insured loans shall bear the same ratio to
the amount of insured farm ownership loans as the dollar amount specified in par
agraph (2)(A)(i) for insured loans bears to the dollar amount specified therein
for insured farm ownership loans.
`(C) If more than 70 percent of the number of loans guaranteed under
section 351 in a fiscal year have been guaranteed to persons to whom the Secret
ary had not previously made an insured loan under this Act, in lieu of the dolla
r amounts specified in subparagraph (A) for the immediately succeeding fiscal ye
ar, the dollar amounts which shall apply shall each be the product obtained by m
ultiplying--
`(i) such dollar amount; by
`(ii) the quotient of--
`(I) the number of persons provided with guaranteed loans un
der section 351 in the fiscal year to whom the Secretary had not previously made
an insured or a guaranteed loan under this Act; divided by
`(II) the total number of persons provided with guaranteed l
oans under section 351 in the fiscal year.
`(4) Notwithstanding subsection (a), the Secretary shall, as soon as pra
cticable after the date of enactment of this subsection, make, insure, or guaran
tee loans at the levels authorized by this subsection for each of the fiscal yea
rs 1991 through 1995.'.
(b) Interest Rate Reduction Program-
(1) IN GENERAL- Section 351 of such Act (7 U.S.C. 1999) is amended--
(A) in subsection (c)--
(i) by striking `50 percent' and inserting `100 percent'; an
d
(ii) by striking `2 percent' and inserting `4 percent'; and<
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(B) in subsection (d), by striking `, or 3 years, whichever is l
ess'.
(2) EXTENSION OF PROGRAM FOR 2 YEARS- Section 1320 of the Food Secur
ity Act of 1985 (7 U.S.C. 1999 note) is amended by striking `1993' and inserting
`1995'.
(c) DEMONSTRATION PROJECT FOR PURCHASE OF SYSTEM LAND- Section 351(h)(1)
of such Act (7 U.S.C. 1999(h)(1)) is amended by striking `3-year' and inserting
`4-year'.
Section 2509(a) of the Food, Agriculture, Conservation, and Trade Act of
1990 is amended--
(1) in paragraph (1), by striking `a commercial vessel, commercial a
ircraft, commercial truck, or railroad car,' and inserting `an international pas
senger, commercial vessel, commercial aircraft, commercial truck, or railroad ca
r.'; and
(2) in paragraph (3)(B)--
(A) by adding at the end of clause (ii) the following: `Any such
reimbursement shall be subject to appropriations under clause (v).'; and
(B) by adding at the end the following new clause:
`(v) AUTHORIZATION OF APPROPRIATIONS- There are authorized t
o be appropriated each fiscal year amounts in the Fund for use for quarantine or
inspection services.'.
SEC. 1204. ADDITIONAL SAVINGS AND OTHER PROVISIONS.
(a) INTEGRATED FARM MANAGEMENT PROGRAM- Section 1451 of the Food, Agricu
lture, Conservation, and Trade Act of 1990 is amended--
(1) in subsection (d), by striking `enroll not more than' and insert
ing `enroll not less than'; and
(2) in subsection (h)(7)(A), by striking `shall not be eligible' and
inserting `shall be eligible'.
(b) FOOD AID ASSISTANCE- The Agricultural Trade, Development, and Assist
ance Act of 1954 (as amended by section 1512 of the Food, Agriculture, Conservat
ion, and Trade Act of 1990) is amended--
(1) in section 202(e)(1), by striking `private' and all that follows
through `Administrator' and inserting `the Administrator, not less than $10,000
,000, and not more than $13,500,000, shall be made available in each fiscal year
to private voluntary organizations and cooperatives';
(2) in section 406, by adding at the end the following new subsectio
n:
`(d) AVAILABILITY OF FUNDS- Funds shall be available under this Act only
to the extent provided in advance in appropriation Acts.'; and
(3) in section 407(c)(4), by striking `providing ocean' and insertin
g `providing ocean transportation or'.
(c) TOBACCO PROGRAM ADJUSTMENT- Section 213 of the Dairy and Tobacco Adj
ustment Act of 1983 (7 U.S.C. 511r) is amended--
(1) in subsection (d), by inserting before the period the following:
`, subsection (e), and subsection (f)'; and
(2) in subsection (f), by adding at the end the following new paragr
aph:
`(4) Subsection (d) shall apply with respect to fees and charges imposed
to cover the costs of such end user identification, certification, and reportin
g activities.'.
(d) EMERGENCY LOANS- Section 2269 of the Food, Agriculture, Conservation
, and Trade Act of 1990 is amended by--
(1) striking `(7 U.S.C. 1981(b))' and inserting `(7 U.S.C. 1961(b))'
; and
(2) striking `1988' and inserting `1990'.
(e) FIFRA USER FEES- Notwithstanding any provision of the Omnibus Budget
Reconciliation Act of 1990, nothing in this title or the other provisions of th
is Act shall be construed to require or authorize the Administrator of the Envir
onmental Protection Agency to assess or collect any fees or charges for services
and activities authorized under the Federal Insecticide, Fungicide, and Rodenti
cide Act (7 U.S.C. 136 et seq.).
Subtitle C--Effective Date
SEC. 1301. EFFECTIVE DATE.
This title and the amendments made by this title shall become effective
1 day after the date of enactment of the Food, Agriculture, Conservation, and Tr
ade Act of 1990, or December 1, 1990, whichever is earlier.
SEC. 1302. READJUSTMENT OF SUPPORT LEVELS.
(a) FAILURE TO ENTER INTO AGREEMENT- If by June 30, 1992, the United Sta
tes does not enter into (within the context of section 1102(a) of the Omnibus Tr
ade and Competitiveness Act of 1988 (19 U.S.C. 2902)) an agricultural trade agre
ement in the Uruguay Round of multilateral trade negotiations under the General
Agreement on Tariffs and Trade (GATT), agricultural acreage limitation and price
support and production adjustment programs and export promotion levels shall be
reconsidered and adjusted by the Secretary of Agriculture (hereafter in this se
ction referred to as the `Secretary') in accordance with subsection (b), as appr
opriate to protect the interests of American agricultural producers and ensure t
he international competitiveness of United States agriculture.
(b) REQUIRED MEASURES- Pursuant to subsection (a), in order to protect t
he interests of American agricultural producers and en- sure the competitive pos
ition of United States agriculture, the Secretary--
(1) is authorized to waive any minimum level for any acreage limitat
ion program required or authorized for any of the 1993 through 1995 crops of whe
at, feed grains, upland cotton, or rice established under section 107B(e), 105B(
e), 103B(e), or 101B(e) of the Agricultural Act of 1949 (as amended by sections
301, 401, 501, and 601 of the Food, Agriculture, Conservation, and Trade Act of
1990), respectively;
(2) shall increase by $1,000,000,000 for the period beginning Octobe
r 1, 1993, and ending September 30, 1995, the level of export promotion programs
authorized under the Agricultural Trade Act of 1978 (as amended by section 1531
of the Food, Agriculture, Conservation, and Trade Act of 1990), in addition to
any amounts otherwise required or made available under such programs; and
(3) shall permit producers to repay price support loans for any of t
he 1993 through 1995 crops of wheat and feed grains at the levels provided under
sections 107B(a)(4) and 105B(a)(4) of the Agricultural Act of 1949, respectivel
y.
(c) FAILURE OF AGREEMENT TO ENTER INTO FORCE- If by June 30, 1993, an ag
ricultural trade agreement under the Uruguay Round of multilateral trade negotia
tions under the General Agreement on Tariffs and Trade has not entered into forc
e for the United States, agricultural price support and other programs and expor
t promotion levels shall be reconsidered and adjusted by the Secretary in accord
ance with subsection (d), if the Secretary determines such action is appropriate
to protect the interests of American agricultural producers and ensure the inte
rnational competitiveness of United States agriculture.
(d) SPECIFIC MEASURES-
(1) MEASURES TO BE CONSIDERED- Pursuant to subsection (c), the Secre
tary shall consider--
(A) waiving all or part of the requirements of this title, and t
he amendments made by this title, requiring reductions in agricultural spending;
(B) increasing the level of funds made available for the program
s authorized under the Agricultural Trade Act of 1978; and
(C) permitting producers to repay price support loans for any of
the 1993 through 1995 crops of wheat and feed grains at the levels provided und
er sections 107B(a)(4) and 105B(a)(4) of the Agricultural Act of 1949, respectiv
ely.
(2) AUTHORITY- The Secretary is authorized to implement the measures
specified in subparagraphs (A), (B), and (C) of paragraph (1). This authority s
hall be in addition to, and not in place of, any other authority under any other
provision of law.
(3) IMPLEMENTATION- If the Secretary determines the action is approp
riate pursuant to subsection (c), the Secretary shall implement measures specifi
ed in subparagraph (A) of paragraph (1) and either or both of the measures speci
fied in subparagraph (B) or (C) of paragraph (1).
(e) LIMITATION- This section shall not be construed to authorize the Sec
retary to reduce the level of income support provided to agricultural producers
in the United States.
(f) TERMINATION- The provisions of subsections (a) and (b) shall cease t
o be effective if the President certifies to Congress that the failure referred
to in subsection (a) to enter into an agricultural trade agreement in the Urugua
y Round of multilateral trade negotiations under the GATT is a result in whole o
r in part of the provisions of section 151 of the Trade Act of 1974 (19 U.S.C. 2
191), or essentially similar provisions, not applying or in effect not applying
during the period ending May 31, 1991 (or during the period June 1, 1991, throug
h May 31, 1993, if the condition of section 1103(b)(1)(B)(i) is satisfied) to im
plementing bills submitted with respect to such an agreement entered into during
the applicable period under section 1102(b) of the Omnibus Trade and Competitiv
eness Act of 1988 (19 U.S.C. 2902(b)).
TITLE II--BANKING, HOUSING, AND RELATED PROGRAMS
Subtitle A--Federal Deposit Insurance Assessments
Subtitle B--FHA Mortgage Insurance
Subtitle C--Auction of Federally Insured Mortgages
Subtitle D--Crime and Flood Insurance Programs
Sec. 2301. Crime insurance program.
Sec. 2302. Flood insurance program.
Subtitle E--Effective Date
Sec. 2401. Effective date.
TITLE II--BANKING, HOUSING, AND RELATED PROGRAMS
Subtitle A--Federal Deposit Insurance Assessments
SEC. 2001. SHORT TITLE.
This Act may be cited as the `FDIC Assessment Rate Act of 1990'.
(a) BANK INSURANCE FUND- Section 7(b)(1)(C) of the Federal Deposit Insur
ance Act (12 U.S.C. 1817(b)(1)(C)) is amended to read as follows:
`(C) ASSESSMENT RATE FOR BANK INSURANCE FUND MEMBERS-
`(i) IN GENERAL- The assessment rate for Bank Insurance Fund mem
bers shall be the greater of 0.15 percent or such rate as the Board of Directors
, in its sole discretion, determines to be appropriate--
`(I) to maintain the reserve ratio at the designated reserve
ratio; or
`(II) if the reserve ratio is less than the designated reser
ve ratio, to increase the reserve ratio to the designated reserve ratio within a
reasonable period of time.
`(ii) FACTORS TO BE CONSIDERED- In making any determination unde
r clause (i), the Board of Directors shall consider the Bank Insurance Fund's ex
pected operating expenses, case resolution expenditures, and income, the effect
of the assessment rate on members' earnings and capital, and such other factors
as the Board of Directors may deem appropriate.
`(iii) MINIMUM ASSESSMENT- Notwithstanding clause (i), the asses
sment shall not be less than $1,000 for each member in each year.'.
(b) SAVINGS ASSOCIATION INSURANCE FUND- Section 7(b)(1)(D) of the Federa
l Deposit Insurance Act (12 U.S.C. 1817(b)(1)(D)) is amended to read as follows:
`(D) ASSESSMENT RATE FOR SAVINGS ASSOCIATION INSURANCE FUND MEMBERS-
`(i) IN GENERAL- The assessment rate for Savings Association Ins
urance Fund members shall be the greater of 0.15 percent or such rate as the Boa
rd of Directors, in its sole discretion, determines to be appropriate--
`(I) to maintain the reserve ratio at the designated reserve
ratio; or
`(II) if the reserve ratio is less than the designated reser
ve ratio, to increase the reserve ratio to the designated reserve ratio within a
reasonable period of time.
`(ii) FACTORS TO BE CONSIDERED- In making any determination unde
r clause (i), the Board of Directors shall consider the Savings Association Insu
rance Fund's expected operating expenses, case resolution expenditures, and inco
me, the effect of the assessment rate on members' earnings and capital, and such
other factors as the Board of Directors may deem appropriate.
`(iii) MINIMUM ASSESSMENT- Notwithstanding clause (i), the asses
sment shall not be less than $1,000 for each member in each year.
`(iv) TRANSITION RULE- Until December 31, 1997, the assessment r
ate for Savings Association Insurance Fund members shall not be less than the fo
llowing:
`(I) From January 1, 1990, through December 31, 1990, 0.208
percent.
`(II) From January 1, 1991, through December 31, 1993, 0.23
percent.
`(III) From January 1, 1994, through December 31, 1997, 0.18
percent.'.
(c) CLERICAL AMENDMENTS REFLECTING $1,000 MINIMUM ASSESSMENT PROVISIONS
OF CURRENT LAW- Section 7(b)(2)(A) of the Federal Deposit Insurance Act (12 U.S.
C. 1817(b)(2)(A)) is amended--
(1) by inserting `or subparagraph (C)(iii) or (D)(iii) of subsection
(b)(1)' after `subsection (c)(2)'; and
(2) in clauses (i) and (ii), by inserting `the greater of $500 or an
amount' before `equal to the product of'.
(a) ASSESSMENT RATES- Section 7(b)(1)(A) of the Federal Deposit Insuranc
e Act (12 U.S.C. 1817(b)(1)(A)) is amended to read as follows:
`(A) ASSESSMENT RATES PRESCRIBED-
`(i) AUTHORITY TO SET RATES- Subject to clause (iii), the Corpor
ation shall set assessment rates for insured depository institutions at such tim
es as the Corporation, in its sole discretion, determines to be appropriate.
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`(ii) RATE FOR EACH FUND TO BE SET INDEPENDENTLY- The Corporatio
n shall fix the assessment rate of Bank Insurance Fund members independently fro
m the assessment rate for Savings Association Insurance Fund members.
`(iii) DEADLINE FOR ANNOUNCING RATE CHANGES- The Corporation sha
ll announce any change in assessment rates-
`(I) for the semiannual period beginning on January 1 and en
ding on June 30, not later than the preceding November 1; and
`(II) for the semiannual period beginning on July 1 and endi
ng on December 31, not later than the preceding May 1.'.
(b) ASSESSMENT PROCEDURES- Section 7(b)(2)(A) of the Federal Deposit Ins
urance Act (12 U.S.C. 1817(b)(2)(A)), as amended by section 2(c) of this Act, is
amended--
(1) by striking `annual' each time it appears;
(2) in clause (i)(I), by inserting `during that semiannual period' a
fter `member'; and
(3) in clause (ii)(I), by inserting `during that semiannual period'
after `member'.
(c) CONFORMING AMENDMENT ON TIMING OF ASSESSMENT CREDITS- Section 7(d)(1
)(A) of the Federal Deposit Insurance Act (12 U.S.C. 1817(d)(1)(A)) is amended t
o read as follows:
`(A) The Corporation shall prescribe and publish the aggregate amoun
t to be credited to insured depository institutions--
`(i) in the semiannual period beginning on January 1 and ending
on June 30, not later than the preceding November 1; and
`(ii) in the semiannual period beginning on July 1 and ending on
December 31, not later than the preceding May 1.'.
Section 7(b)(1)(B) of the Federal Deposit Insurance Act (12 U.S.C. 1817(
b)(1)(B)) is amended--
(1) by striking `, not exceeding 1.50 percent,' each time it appears
;
(2) in clause (iii)--
(A) by inserting `and' at the end of subclause (I);
(B) by striking subclauses (II) and (III); and
(C) by redesignating subclause (IV) as subclause (II); and
<
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(A) by inserting `and' at the end of subclause (I);
(B) by striking subclauses (II) and (III); and
(C) by redesignating subclause (IV) as subclause (II).
Section 14 of the Federal Deposit Insurance Act (12 U.S.C. 1824) is amen
ded--
(1) in the heading, by striking `SEC. 14.' and inserting:
`SEC. 14. BORROWING AUTHORITY.
`(a) BORROWING FROM TREASURY- ';
(2) in subsection (a), as designated by paragraph (1)--
(A) by striking `this section' each time it appears and insertin
g `this subsection', and
(B) by striking `The Corporation may employ such funds' and inse
rting `The Corporation may employ any funds obtained under this section'; and
(3) by adding after subsection (a), as amended by paragraph (2), the
following new subsection:
`(b) BORROWING FROM FEDERAL FINANCING BANK- The Corporation is authorize
d to issue and sell the Corporation's obligations, on behalf of the Bank Insuran
ce Fund or Savings Association Insurance Fund, to the Federal Financing Bank est
ablished by the Federal Financing Bank Act of 1973. The Federal Financing Bank i
s authorized to purchase and sell the Corporation's obligations on terms and con
ditions determined by the Federal Financing Bank. Any such borrowings shall be o
bligations subject to the obligation limitation of section 15(c) of this Act. Th
is subsection does not affect the eligibility of any other entity to borrow from
the Federal Financing Bank.'.
Subtitle B--FHA Mortgage Insurance
SEC. 2101. INCREASE IN MORTGAGE LIMIT.
Section 203(b)(2) of the National Housing Act (12 U.S.C. 1709(b)(2)) is
amended by striking `150 percent (185 percent until October 31, 1990) of the dol
lar amount specified' and inserting the following: `185 percent of the dollar am
ount specified'.
SEC. 2102. MORTGAGOR EQUITY.
Section 203(b)(2) of the National Housing Act (12 U.S.C. 1709(b)(2)) is
amended by adding at the end the following new undesignated paragraph:
`Notwithstanding any other provision of this paragraph, a mortgage may n
ot involve a principal obligation (including such initial service charges, appra
isal, inspection, and other fees as the Secretary shall approve) in excess of 98
.75 percent of the appraised value of the property (97.75 percent, in the case o
f a mortgage with an appraised value in excess of $50,000), plus the amount of t
he mortgage insurance premium paid at the time the mortgage is insured. For purp
oses of the preceding sentence, the term `appraised value' means the amount set
forth in the written statement required under section 226, or a similar amount d
etermined by the Secretary if section 226 does not apply.'.
SEC. 2103. MORTGAGE INSURANCE PREMIUMS.
(a) PREMIUMS- Section 203(c) of the National Housing Act (12 U.S.C. 1709
(c)) is amended--
(1) by inserting `(1)' after `(c)';
(2) by striking the last sentence; and
(3) by adding at the end the following new paragraph:
`(2) Notwithstanding any other provision of this section, each mortgage
secured by a 1- to 4-family dwelling and executed on or after October 1, 1994, t
hat is an obligation of the Mutual Mortgage Insurance Fund, shall be subject to
the following requirements:
`(A) The Secretary shall establish and collect, at the time of insur
ance, a single premium payment in an amount equal to 2.25 percent of the amount
of the original insured principal obligation of the mortgage. Upon payment in fu
ll of the principal obligation of a mortgage prior to the maturity date of the m
ortgage, the Secretary shall refund all of the unearned premium charges paid on
the mortgage pursuant to this subparagraph.
`(B) In addition to the premium under subparagraph (A), the Secretar
y shall establish and collect annual premium payments in an amount equal to 0.50
percent of the remaining insured principal balance (excluding the portion of th
e remaining balance attributable to the premium collected under subparagraph (A)
and without taking into account delinquent payments or prepayments) for the fol
lowing periods:
`(i) For any mortgage involving an original principal obligation
(excluding any premium collected under subparagraph (A)) that is less than 90 p
ercent of the appraised value of the property (as of the date the mortgage is ac
cepted for insurance), for the first 11 years of the mortgage term.
`(ii) For any mortgage involving an original principal obligatio
n (excluding any premium collected under subparagraph (A)) that is greater than
or equal to 90 percent of such value, for the first 30 years of the mortgage ter
m; except that notwithstanding the matter preceding clause (i), for any mortgage
involving an original principal obligation (excluding any premium collected und
er subparagraph (A)) that is greater than 95 percent of such value, the annual p
remium collected during the 30-year period under this clause shall be in an amou
nt equal to 0.55 percent of the remaining insured principal balance (excluding t
he portion of the remaining balance attributable to the premium collected under
subparagraph (A) and without taking into account delinquent payments or prepayme
nts).'.
(b) TRANSITION PROVISIONS- Notwithstanding section 203(c) of the Nationa
l Housing Act (as amended by subsection (a)), mortgage insurance premiums on mor
tgages executed during fiscal years 1991 through 1994 and that are obligations o
f the Mutual Mortgage Insurance Fund shall be subject to the following requireme
nts:
(1) 1991 AND 1992- For mortgages executed during fiscal years 1991 a
nd 1992 (but after the date of the effectiveness of regulations issued under sub
section (c)), the Secretary shall establish and collect the following premiums:<
/ul>
(A) UP-FRONT- At the time of insurance, a single premium payment
in an amount equal to 3.80 percent of the amount of the original insured princi
pal obligation of the mortgage.
(B) ANNUAL- In addition to the premium under subparagraph (A), a
nnual premium payments in an amount equal to 0.50 percent of the remaining insur
ed principal balance (excluding the portion of the remaining balance attributabl
e to the premium collected under subparagraph (A) and without taking into accoun
t delinquent payments or prepayments), for any mortgage involving an original pr
incipal obligation (excluding any premium collected under subparagraph (A)) that
is--
(i) less than 90 percent of the appraised value of the prope
rty (as of the date the mortgage is accepted for insurance), for the first 5 yea
rs of the mortgage term;
(ii) greater than or equal to 90 percent of such value but e
qual to or less than 95 percent of such value, for the first 8 years of the mort
gage term; and
(iii) greater than 95 percent of such value, for the first 1
0 years of the mortgage term.
(2) 1993 AND 1994- For mortgages executed during fiscal years 1993 a
nd 1994, the Secretary shall establish and collect the following premiums:
<
/ul>
(A) UP-FRONT- At the time of insurance, a single premium payment
in an amount equal to 3.00 percent of the amount of the original insured princi
pal obligation of the mortgage.
(B) ANNUAL- In addition to the premium under subparagraph (A), a
nnual premium payments in an amount equal to 0.50 percent of the remaining insur
ed principal balance (excluding the portion of the remaining balance attributabl
e to the premium collected under subparagraph (A) and without taking into accoun
t delinquent payments or prepayments), for any mortgage involving an original pr
incipal obligation (excluding any premium collected under subparagraph (A)) that
is--
(i) less than 90 percent of the appraised value of the prope
rty (as of the date the mortgage is accepted for insurance), for the first 7 yea
rs of the mortgage term;
(ii) greater than or equal to 90 percent of such value but e
qual to or less than 95 percent of such value, for the first 12 years of the mor
tgage term; and
(iii) greater than 95 percent of such value, for the first 3
0 years of the mortgage term.
(3) REFUNDS- With respect to any mortgage subject to premiums under
this subsection, the Secretary shall refund all of the unearned premium charges
paid on a mortgage pursuant to paragraph (1)(A) or (2)(A) upon payment in full o
f the principal obligation of the mortgage prior to the maturity date.
(c) REGULATIONS- The Secretary shall issue regulations to carry out this
section and the amendments made by this section not later than the expiration o
f the 90-day period beginning on the date of the enactment of this Act.
SEC. 2104. MUTUAL MORTGAGE INSURANCE FUND DISTRIBUTIONS.
Section 205 of the National Housing Act (12 U.S.C. 1711) is amended by a
dding at the end the following new subsection:
`(e) In determining whether there is a surplus for distribution to mortg
agors under this section, the Secretary shall take into account the actuarial st
atus of the entire Fund.'.
Section 205 of the National Housing Act (12 U.S.C. 1711), as amended by
the preceding provisions of this Act, is further amended by adding at the end th
e following new subsections:
`(f)(1) The Secretary shall ensure that the Mutual Mortgage Insurance Fu
nd attains a capital ratio of not less than 1.25 percent within 24 months after
the date of the enactment of this subsection and maintains such ratio thereafter
, subject to paragraph (2).
`(2) The Secretary shall endeavor to ensure that the Mutual Mortgage Ins
urance Fund attains a capital ratio of not less than 2.0 percent within 10 years
after the date of the enactment of this subsection, and shall ensure that the F
und maintains at least such capital ratio at all times thereafter.
`(3) Upon the expiration of the 24-month period beginning on the date of
the enactment of this subsection, the Secretary shall submit to the Congress a
report describing the actions the Secretary will take to ensure that the Mutual
Mortgage Insurance Fund attains the capital ratio required under paragraph (2).<
/ul>
`(4) For purposes of this subsection:
`(A) The term `capital' means the economic net worth of the Mutual M
ortgage Insurance Fund, as determined by the Secretary under the annual audit re
quired under section 538.
`(B) The term `capital ratio' means the ratio of capital to unamorti
zed insurance-in-force.
`(C) The term `economic net worth' means the current cash available
to the Fund, plus the net present value of all future cash inflows and outflows
expected to result from the outstanding mortgages in the Fund.
`(D) The term `unamortized insurance-in-force' means the remaining o
bligation on outstanding mortgages which are obligations of the Mutual Mortgage
Insurance Fund, as estimated by the Secretary.
`(g) The Secretary shall provide for an independent actuarial study of t
he Mutual Mortgage Insurance Fund to be conducted annually and shall report annu
ally to the Congress regarding the financial status of the Fund.
`(h)(1) If, pursuant to the independent annual actuarial study of the Mu
tual Mortgage Insurance Fund required under subsection (g), the Secretary determ
ines that the Mutual Mortgage Insurance Fund is not meeting the operational goal
s under paragraph (2), the Secretary may not issue distributions, and may, by re
gulation, propose and implement any adjustments to the insurance premiums under
section 203(c) or section 2103(b) of the Omnibus Budget Reconciliation Act of 19
90. Upon determining that a premium change is appropriate under the preceding se
ntence, the Secretary shall immediately notify Congress of the proposed change a
nd the reasons for the change. Any such premium change shall not take effect bef
ore the expiration of the 90-day period beginning upon such notification.
`(2) The operational goals referred to in paragraph (1) shall be--
`(A) maintaining an adequate capital ratio;
`(B) meeting the needs of homebuyers with low downpayments and first
-time homebuyers by providing access to mortgage credit;
`(C) minimizing the risk to the Fund and to homeowners from homeowne
r default; and
`(D) avoiding adverse selection.'.
SEC. 2106. HOME EQUITY CONVERSION MORTGAGE INSURANCE DEMONSTRATION.
(a) TERMINATION DATE- The first sentence of section 255(g) of the Nation
al Housing Act (12 U.S.C. 1715z-20(g)) is amended by striking `September 30, 199
1' and inserting `September 30, 1995'.
(b) NUMBER OF MORTGAGES INSURED- Section 255(g) of the National Housing
Act (12 U.S.C. 1715z-20(g)) is amended by striking the second sentence and inser
ting the following: `The total number of mortgages insured under this section ma
y not exceed 25,000.'.
Subtitle C--Auction of Federally Insured Mortgages
SEC. 2201. AUCTION OF MULTIFAMILY MORTGAGES.
Section 221(g)(4) of the National Housing Act (12 U.S.C. 1715l(g)(4)) is
amended by adding after subparagraph (B) the following new subparagraph:
`(C)(i) In lieu of accepting assignment of the original credit i
nstrument and the mortgage securing the credit instrument under subparagraph (A)
in exchange for receipt of debentures, the Secretary shall arrange for the sale
of the beneficial interests in the mortgage loan through an auction and sale of
the (I) mortgage loans, or (II) participation certificates, or other mortgage-b
acked obligations in a form acceptable to the Secretary (in this subparagraph re
ferred to as `participation certificates'). The Secretary shall arrange the auct
ion and sale at a price, to be paid to the mortgagee, of par plus accrued intere
st to the date of sale. The sale price shall also include the right to a subsidy
payment described in clause (iii).
`(ii)(I) The Secretary shall conduct a public auction to determi
ne the lowest interest rate necessary to accomplish a sale of the beneficial int
erests in the original credit instrument and mortgage securing the credit instru
ment.
`(II) A mortgagee who elects to assign a mortgage shall provide
the Secretary and persons bidding at the auction a description of the characteri
stics of the original credit instrument and mortgage securing the original credi
t instrument, which shall include the principal mortgage balance, original state
d interest rate, service fees, real estate and tenant characteristics, the level
and duration of applicable Federal subsidies, and any other information determi
ned by the Secretary to be appropriate. The Secretary shall also provide informa
tion regarding the status of the property with respect to the provisions of the
Emergency Low Income Housing Preservation Act of 1987 or any subsequent Act with
respect to eligibility to prepay the mortgage, a statement of whether the owner
has filed a notice of intent to prepay or a plan of action under the Emergency
Low Income Housing Preservation Act of 1987 or any subsequent Act, and the detai
ls with respect to incentives provided under the Emergency Low Income Housing Pr
eservation Act of 1987 or any subsequent Act in lieu of exercising prepayment ri
ghts.
`(III) The Secretary shall, upon receipt of the information in s
ubclause (II), promptly advertise for an auction and publish such mortgage descr
iptions in advance of the auction. The Secretary may conduct the auction at any
time during the 6-month period beginning upon receipt of the information in subc
lause (II) but under no circumstances may the Secretary conduct an auction befor
e 2 months after receiving the mortgagee's written notice of intent to assign it
s mortgage to the Secretary.
`(IV) In any auction under this subparagraph, the Secretary shal
l accept the lowest interest rate bid for purchase that the Secretary determines
to be acceptable. The Secretary shall cause the accepted bid to be published in
the Federal Register. Settlement for the sale of the credit instrument and the
mortgage securing the credit instrument shall occur not later than 30 business d
ays after the date winning bidders are selected in the auction, unless the Secre
tary determines that extraordinary circumstances require an extension (not to ex
ceed 60 days) of the period.
`(V) If no bids are received, the bids that are received are not
acceptable to the Secretary, or settlement does not occur within the period und
er subclause (IV), the mortgagee shall retain all rights (including the right to
interest, at a rate to be determined by the Secretary, for the period covering
any actions taken under this subparagraph) under this section to assign the mort
gage loan to the Secretary.
`(iii) As part of the auction process, the Secretary shall agree
to provide a monthly interest subsidy payment from the General Insurance Fund t
o the purchaser under the auction of the original credit instrument or the mortg
age securing the credit instrument (and any subsequent holders or assigns who ar
e approved mortgagees). The subsidy payment shall be paid on the first day of ea
ch month in an amount equal to the difference between the stated interest due on
the mortgage loan and the lowest interest rate necessary to accomplish a sale o
f the mortgage loan or participation certificates (less the servicing fee, if ap
propriate) for the then unpaid principal balance plus accrued interest at a rate
determined by the Secretary. Each interest subsidy payment shall be treated by
the holder of the mortgage as interest paid on the mortgage. The interest subsid
y payment shall be provided until the earlier of--
`(I) the maturity date of the loan;
`(II) prepayment of the mortgage loan in accordance with the
Emergency Low Income Housing Preservation Act of 1987 or any subsequent Act, wh
ere applicable; or
`(III) default and full payment of insurance benefits on the
mortgage loan by the Federal Housing Administration.
`(iv) The Secretary shall require that the mortgage loans or par
ticipation certificates presented for assignment are auctioned as whole loans wi
th servicing rights released and also are auctioned with servicing rights retain
ed by the current servicer.
`(v) To the extent practicable, the Secretary shall encourage St
ate housing finance agencies, nonprofit organizations, and organizations represe
nting the tenants of the property securing the mortgage, or a qualified mortgage
e participating in a plan of action under the Emergency Low Income Housing Prese
rvation Act of 1987 or subsequent Act to participate in the auction.
`(vi) The Secretary shall implement the requirements imposed by
this subparagraph within 30 days from the date of enactment of this subparagraph
and not be subject to the requirement of prior issuance of regulations in the F
ederal Register. The Secretary shall issue regulations implementing this section
within 6 months of the enactment of this subparagraph.
`(vii) Nothing in this subparagraph shall diminish or impair the
low income use restrictions applicable to the project under the original regula
tory agreement or the revised agreement entered into pursuant to the Emergency L
ow Income Housing Preservation Act of 1987 or subsequent Act, if any, or other a
greements for the provision of Federal assistance to the housing or its tenants.
`(viii) This subparagraph shall not apply after September 30, 19
95. Not later than January 31 of each year (beginning in 1992), the Secretary sh
all submit to the Congress a report including statements of the number of mortga
ges auctioned and sold and their value, the amount of subsidies committed to the
program under this subparagraph, the ability of the Secretary to coordinate the
program with the incentives provided under the Emergency Low Income Housing Pre
servation Act of 1987 or subsequent Act, and the costs and benefits derived from
the program for the Federal Government.'.
Subtitle D--Crime and Flood Insurance Programs
SEC. 2301. CRIME INSURANCE PROGRAM.
(a) EXTENSION OF GENERAL AUTHORITY- Section 1201(b) of the National Hous
ing Act (12 U.S.C. 1749bbb(b)) is amended by striking `September 30, 1991' in th
e matter preceding paragraph (1) and inserting `September 30, 1995'.
(b) CONTINUATION OF EXISTING CONTRACTS- Section 1201(b)(1) of the Nation
al Housing Act (12 U.S.C. 1749bbb(b)(1)) is amended by striking `September 30, 1
992' and inserting `September 30, 1996'.
(c) EXTENSION OF LIMITATION ON PREMIUMS- Section 542(c) of the Housing a
nd Community Development Act of 1987 (12 U.S.C. 1749bbb-10c note) is amended by
striking `September 30, 1991' and inserting `September 30, 1995'.
SEC. 2302. FLOOD INSURANCE PROGRAM.
(a) EXTENSION OF GENERAL AUTHORITY- Section 1319 of the National Flood I
nsurance Act of 1968 (42 U.S.C. 4026) is amended by striking `September 30, 1991
' and inserting `September 30, 1995'.
(b) EXTENSION OF EMERGENCY PROGRAM- Section 1336(a) of the National Floo
d Insurance Act of 1968 (42 U.S.C. 4056(a)) is amended by striking `September 30
, 1991' and inserting `September 30, 1995'.
(c) EXTENSION OF LIMITATION ON PREMIUMS- Section 541(d) of the Housing a
nd Community Development Act of 1987 (42 U.S.C. 4015 note) is amended by strikin
g `September 30, 1991' and inserting `September 30, 1995'.
(d) EXTENSION OF EROSION PROVISIONS- Section 1306(c)(7) of the National
Flood Insurance Act of 1968 (42 U.S.C. 4013(c)(7)) is amended by striking `Septe
mber 30, 1991' and inserting `September 30, 1995'.
(e) INCLUSION OF COSTS IN PREMIUMS-
(1) ESTIMATES OF PREMIUM RATES- Section 1307(a) of the National Floo
d Insurance Act of 1968 (42 U.S.C. 4014(a)) is amended--
(A) in paragraph (1)(B)(i), by striking `and' at the end;
(B) in paragraph (1)(B)(ii), by inserting `and' after the comma
at the end;
(C) in paragraph (1)(B), by inserting at the end the following n
ew clause:
`(iii) any remaining administrative expenses incurred in car
rying out the flood insurance and floodplain management programs (including the
costs of mapping activities under section 1360) not included under clause (ii),
which shall be recovered by a fee charged to policyholders and such fee shall no
t be subject to any agents' commissions, company expense allowances, or State or
local premium taxes,'; and
(D) in paragraph (2), by inserting after `title' the following:
`, and which, together with a fee charged to policyholders that shall not be not
subject to any agents' commission, company expenses allowances, or State or loc
al premium taxes, shall include any administrative expenses incurred in carrying
out the flood insurance and floodplain management programs (including the costs
of mapping activities under section 1360)'.
(2) ESTABLISHMENT OF CHARGEABLE PREMIUM RATES- Section 1308 of the N
ational Flood Insurance Act of 1968 (42 U.S.C. 4015) is amended--
(A) in subsection (b)--
(i) by striking `and' at the end of paragraph (2);
(ii) by redesignating paragraph (3) as paragraph (4); and
(iii) by inserting after paragraph (2), the following new pa
ragraph:
`(3) adequate, together with the fee under paragraph (1)(B)(iii) or
(2) of section 1307(a), to provide for any administrative expenses of the flood
insurance and floodplain management programs (including the costs of mapping act
ivities under section 1360), and'; and
(B) by striking subsection (d) and inserting the following new s
ubsection:
`(d) With respect to any chargeable premium rate prescribed under this s
ection, a sum equal to the portion of the rate that covers any administrative ex
penses of carrying out the flood insurance and floodplain management programs wh
ich have been estimated under paragraphs (1)(B)(ii) and (1)(B)(iii) of section 1
307(a) or paragraph (2) of such section (including the fees under such paragraph
s), shall be paid to the Director. The Director shall deposit the sum in the Nat
ional Flood Insurance Fund established under section 1310.'.
(3) NATIONAL FLOOD INSURANCE FUND- Section 1310(a)(4) of the Nationa
l Flood Insurance Act of 1968 (42 U.S.C. 4017(a)(4)) is amended to read as follo
ws:
`(4) to the extent approved in appropriations Acts, to pay any admin
istrative expenses of the flood insurance and floodplain management programs (in
cluding the costs of mapping activities under section 1360); and'.
(4) ADMINISTRATIVE EXPENSES- Section 1375 of the National Flood Insu
rance Act of 1968 (42 U.S.C. 4126) is amended by striking `program' and all that
follows and inserting the following: `and floodplain management programs author
ized under this title may be paid with amounts from the National Flood Insurance
Fund (as provided under section 1310(a)(4)), subject to approval in appropriati
ons Acts.'.
(5) EXCEPTION TO LIMITATION ON PREMIUM INCREASES- Notwithstanding se
ction 541(d) of the Housing and Community Development Act of 1987 (42 U.S.C. 401
5 note) (as amended by this section), the premium rates charged for flood insura
nce under any program established pursuant to the National Flood Insurance Act o
f 1968 may be increased by more than 10 percent during fiscal year 1991, except
that any increase in such rates not resulting from the inclusion in chargeable p
remium rates of administrative expenses of the flood insurance and floodplain ma
nagement programs (pursuant to the amendments made by this subsection) may not e
xceed 10 percent.
Subtitle E--Effective Date
SEC. 2401. EFFECTIVE DATE.
If the Cranston-Gonzalez National Affordable Housing Act is enacted befo
re the enactment of this Act, the provisions of subtitles B and C (of this title
) and the amendments made by such subtitles shall not take effect. This section
shall apply notwithstanding any provision relating to effective date or applicab
ility contained in subtitle B or C.
TITLE III--STUDENT LOANS AND LABOR PROVISIONS
Subtitle A--Student Loan Program Savings
SEC. 3001. SHORT TITLE.
This subtitle may be cited as the `Student Loan Default Prevention Initi
ative Act of 1990'.
SEC. 3002. SUPPLEMENTAL PRECLAIMS ASSISTANCE PAYMENTS.
(a) ELIMINATION OF SUPPLEMENTAL PRECLAIMS ASSISTANCE REIMBURSEMENTS- Sec
tion 428(c) of the Higher Education Act of 1965 (20 U.S.C. 1078(c)) is amended--
(1) in the first sentence of paragraph (1)(A), by striking `, includ
ing the administrative costs of supplemental preclaim assistance for default pre
vention as defined in paragraph (6)(C)';
(2) in paragraph (6)(C)(i), by striking `this paragraph' and inserti
ng `subsection (l)';
(3) in paragraph (6)(C)(i)(I), by striking `required or permitted un
der paragraph (2)(A) of this subsection and subsection (f)' and inserting `gener
ally comparable in intensiveness to the level of preclaims assistance performed,
prior to the 120th day of delinquency, by the guaranty agency as of October 16,
1990';
(4) in paragraph (6)(C)(ii)--
(A) by striking `reimbursement' and inserting `payment under sub
section (l)'; and
(B) by striking `which the guaranty agency is required or permit
ted to provide pursuant to paragraph (2)(A) of this subsection and subsection (f
)' and inserting `described in division (i)(I) of this subparagraph'; and
(5) by striking the first sentence of paragraph (6)(C)(iv).
(b) FIXED PAYMENTS FOR PRECLAIMS ASSISTANCE- Section 428 of such Act is
further amended by adding at the end thereof the following new subsection:
`(l) PRECLAIMS ASSISTANCE AND SUPPLEMENTAL PRECLAIMS ASSISTANCE-
`(1) ASSISTANCE REQUIRED- Upon receipt of a proper request from the
lender, a guaranty agency having an agreement with the Secretary under subsectio
n (c) of this section shall engage in preclaims assistance activities (as descri
bed in subsection (c)(6)(C)(i)(I)) and supplemental preclaims assistance activit
ies (as described in subsection (c)(6)(C)) with respect to each loan covered by
such agreement.
`(2) PAYMENTS FOR SUPPLEMENTAL PRECLAIMS ASSISTANCE- The Secretary s
hall make payments in accordance with the provisions of this paragraph to any gu
aranty agency that engages in supplemental preclaims assistance (as defined in s
ubsection (c)(6)(C)) on a loan guaranteed under this part. Such payments shall b
e equal to $50.00 for each loan on which such assistance is performed and for wh
ich a default claim is not presented to the guaranty agency by the lender on or
before the 150th day after the loan becomes 120 days delinquent.'.
SEC. 3003. INITIAL DISBURSEMENT AND ENDORSEMENT REQUIREMENTS.
(a) AMENDMENT- Section 428G(b)(1) of the Higher Education Act of 1965 (2
0 U.S.C. 1078-7(b)(1)) is amended to read as follows:
`(1) FIRST YEAR STUDENTS- The first installment of the proceeds of a
ny loan made, insured, or guaranteed under this part that is made to a student b
orrower who is entering the first year of a program of undergraduate education,
and who has not previously obtained a loan under this part, shall not (regardles
s of the amount of such loan or the duration of the period of enrollment) be pre
sented by the institution to the student for endorsement until 30 days after the
borrower begins a course of study, but may be delivered to the eligible institu
tion prior to the end of that 30-day period.'.
(b) EFFECTIVE DATE- The amendment made by this section shall be effectiv
e for loans made on or after the date of enactment of this Act to cover the cost
of instruction for periods of enrollment beginning on or after January 1, 1991.
SEC. 3004. INELIGIBILITY BASED ON HIGH DEFAULT RATES.
(a) IN GENERAL- Section 435(a) of the Higher Education Act of 1965 (20 U
.S.C. 1088(a)) is amended by adding at the end thereof the following new paragra
ph:
`(3) INELIGIBILITY BASED ON HIGH DEFAULT RATES- (A) An institution w
hose cohort default rate is equal to or greater than the threshold percentage sp
ecified in subparagraph (B) for each of the three most recent fiscal years for w
hich data are available shall not be eligible to participate in a program under
this part for the fiscal year for which the determination is made and for the tw
o succeeding fiscal years, unless, within 30 days of receiving notification from
the Secretary of the loss of eligibility under this paragraph, the institution
appeals the loss of its eligibility to the Secretary. The Secretary shall issue
a decision on any such appeal within 45 days after its submission. Such decision
may permit the institution to continue to participate in a program under this p
art if--
`(i) the institution demonstrates to the satisfaction of the Sec
retary that the Secretary's calculation of its cohort default rate is not accura
te, and that recalculation would reduce its cohort default rate for any of the t
hree fiscal years below the threshold percentage specified in subparagraph (B);
or
`(ii) there are, in the judgment of the Secretary, exceptional m
itigating circumstances that would make the application of this paragraph inequi
table.
During such appeal, the Secretary may permit the institution to conti
nue to participate in a program under this part.
`(B) For purposes of determinations under subparagraph (A), the thre
shold percentage is--
`(i) 35 percent for fiscal year 1991 and 1992; and
`(ii) 30 percent for any succeeding fiscal year.
`(C) Until July 1, 1994, this paragraph shall not apply to any insti
tution that is--
`(i) a part B institution within the meaning of section 322(2) o
f this Act;
`(ii) a tribally controlled community college within the meaning
of section 2(a)(4) of the Tribally Controlled Community College Assistance Act
of 1978; or
`(iii) a Navajo Community College under the Navajo Community Col
lege Act.'.
(b) REFUSAL TO PROVIDE STATEMENT TO LENDER- Section 428(a)(2)(F) of such
Act (20 U.S.C. 1078(a)(2)(F)) is amended by inserting before the period at the
end thereof the following: `, except that, in individual cases where the institu
tion determines that the portion of the student's expenses to be covered by the
loan can be met more appropriately, either by the institution or directly by the
student, from other sources, the institution may refuse to provide such stateme
nt or may reduce the determination of need contained in such statement'.
(c) EXTENSION OF DEFAULT RATE LIMITATIONS ON SLS LOANS- Section 2003(a)(
3) of the Omnibus Budget Reconciliation Act of 1989 is amended--
(1) by inserting `paragraph (1) of' after `amendments made by'; and<
/ul>
(2) by striking out `October 1, 1991' and inserting `October 1, 1996
'.
(d) EFFECTIVE DATE- The amendments made by this section shall be effecti
ve July 1, 1991, except that the amendment made by subsection (b) shall be effec
tive upon enactment.
SEC. 3005. ABILITY TO BENEFIT.
(a) IN GENERAL- Section 484(d) of the Higher Education Act of 1965 (20 U
.S.C. 1091(d)) is amended to read as follows:
`(d) ABILITY TO BENEFIT- In order for a student who is admitted on the b
asis of ability to benefit from the education or training offered to be eligible
for any grant, loan, or work assistance under this title, the student shall, pr
ior to enrollment, pass an independently administered examination approved by th
e Secretary.'.
(b) CONFORMING AMENDMENT- Section 481(b) of the Higher Education Act of
1965 (20 U.S.C. 1088(b)) is amended in the fourth sentence by inserting `, excep
t in accordance with section 484(d) of this Act,' after `shall not'.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to a
ny grant, loan, or work assistance to cover the cost of instruction for periods
of enrollment beginning on or after Janu- ary 1, 1991.
SEC. 3006. MAXIMUM SLS LOAN AMOUNTS.
(a) EFFECTIVE DATE EXTENSION- Section 2003(b)(2) of the Omnibus Budget R
econciliation Act of 1989 is amended by striking `1991' and inserting `1996'.
(b) PERIOD FOR DETERMINATION OF MAXIMUM LOAN AMOUNTS- Section 428A(b)(1)
of the Higher Education Act of 1965 (20 U.S.C. 1078-1(b)) is amended by strikin
g `9 consecutive' and inserting `7 consecutive'.
SEC. 3007. AMENDMENTS TO BANKRUPTCY LAWS.
(a) AUTOMATIC STAY AND PROPERTY OF THE ESTATE- (1) Section 362(b) of tit
le 11, United States Code, is amended--
(A) in paragraph (12), by striking `or' at the end thereof;
(B) in paragraph (13), by striking the period at the end thereof and
inserting a semicolon; and
(C) by inserting immediately following paragraph (13) the following
new paragraphs:
`(14) under subsection (a) of this section, of any action by an accr
editing agency regarding the accreditation status of the debtor as an educationa
l institution;
`(15) under subsection (a) of this section, of any action by a State
licensing body regarding the licensure of the debtor as an educational institut
ion; or
`(16) under subsection (a) of this section, of any action by a guara
nty agency, as defined in section 435(j) of the Higher Education Act of 1965 (20
U.S.C. 1001 et seq.) or the Secretary of Education regarding the eligibility of
the debtor to participate in programs authorized under such Act.'.
(2) Section 541(b) of title 11, United States Code, is amended--
(A) in paragraph (1), by striking `or' at the end thereof;
(B) in paragraph (2), by striking the period at the end thereof and
inserting a semicolon and `or'; and
(C) by adding at the end thereof the following new paragraph:
`(3) any eligibility of the debtor to participate in programs author
ized under the Higher Education Act of 1965 (20 U.S.C. 1001 et seq.; 42 U.S.C. 2
751 et seq.), or any accreditation status or State licensure of the debtor as an
educational institution.'.
(3) The amendments made by this subsection shall be effective upon date
of enactment of this Act.
(b) TREATMENT OF CERTAIN EDUCATION LOANS IN BANKRUPTCY PROCEEDINGS- (1)
Section 1328(a)(2) of title 11, United States Code, is amended by striking `sect
ion 523(a)(5)' and inserting `paragraph (5) or (8) of section 523(a)'.
(2) The amendment made by paragraph (1) shall not apply to any case unde
r the provisions of title 11, United States Code, commenced before the date of t
he enactment of this Act.
SEC. 3008. SUNSET PROVISION.
The amendments made by this subtitle shall cease be effective on October
1, 1996.
Subtitle B--Labor Related Penalties
SEC. 3101. OCCUPATIONAL SAFETY AND HEALTH.
Section 17 of the Occupational Safety and Health Act of 1970 (29 U.S.C.
666) is amended--
(1) in subsection (a), by striking `$10,000 for each violation' and
inserting `$70,000 for each violation, but not less than $5,000 for each willful
violation; 1
(2) in subsections (b), (c), (d), and (i), by striking `$1,000' and
inserting `$7,000'.
SEC. 3102. MINE SAFETY AND HEALTH.
Section 110 of the Federal Mine Safety and Health Act of 1977 (30 U.S.C.
820) is amended--
(1) in subsection (a), by striking `$10,000' and inserting `$50,000'
; and
(2) in subsection (b), by striking `1,000' and inserting `$5,000', a
nd 2
SEC. 3103. FAIR LABOR STANDARDS.
Section 16(e) of the Fair Labor Standards Act of 1938 (29 U.S.C. 216(e))
is amended--
(1) in the first sentence--
(A) by striking `or any person who repeatedly or willfully viola
tes section 6 or 7'; and
(B) by striking `not to exceed $1,000 for each such violation' a
nd inserting `not to exceed $10,000 for each employee who was the subject of suc
h a violation';
(2) by inserting after the first sentence the following: `Any person
who repeatedly or willfully violates section 6 or 7 shall be subject to a civil
penalty of not to exceed $1,000 for each such violation.',
(3) by striking `such penalty' each place the term appears except af
ter `appropriateness of' and inserting `any penalty under this subsection', and<
/ul>
(4) in the last sentence, by striking `Sums' and inserting `Except f
or civil penalties collected for violations of section 12, sums'; and
(5) by inserting at the end the following new sentence: `Civil penal
ties collected for violations of section 12 shall be deposited in the general fu
nd of the Treasury.'.
TITLE IV--MEDICARE, MEDICAID, AND OTHER HEALTH-RELATED PROGRAMS
Subtitle A--Medicare
SEC. 4000. REFERENCES IN SUBTITLE; TABLE OF CONTENTS.
(a) AMENDMENTS TO THE SOCIAL SECURITY ACT- Except as otherwise specifica
lly provided, whenever in this title an amendment is expressed in terms of an am
endment to or repeal of a section or other provision, the reference shall be con
sidered to be made to that section or other provision of the Social Security Act
.
(b) TABLE OF CONTENTS- The table of contents of this subtitle is as foll
ows:
Sec. 4000. References in subtitle; table of contents.
Part 1--Provisions Relating to Part A
Part 2--Provisions Relating to Part B
Subpart A--Payment for Physicians' Services
Subpart B--Other Items and Services
Part 3--Provisions Relating to Parts A and B
Part 4--Provisions Relating to Part B Premium and Deductible
Part 5--Medicare Supplemental Insurance Policies
PART 1--PROVISIONS RELATING TO PART A
(a) REDUCTION IN PAYMENTS FOR FISCAL YEAR 1991- Section 1886(g)(3)(A)(v)
(42 U.S.C. 1395ww(g)(3)(A)(v)) is amended by striking `September 30, 1990' and
inserting `September 30, 1991'.
(b) IMPLEMENTATION OF PROSPECTIVE PAYMENT FOR CAPITAL-RELATED COSTS- Sec
tion 1886(g)(1)(A) (42 U.S.C. 1395ww(g)(1)) is amended by adding at the end the
following: `Aggregate payments made under subsection (d) and this subsection dur
ing fiscal years 1992 through 1995 shall be reduced in a manner that results in
a reduction (as estimated by the Secretary) in the amount of such payments equal
to a 10 percent reduction in the amount of payments attributable to capital-rel
ated costs that would otherwise have been made during such fiscal year had the a
mount of such payments been based on reasonable costs (as defined in section 186
1(v)).'.
(c) EXEMPTION FOR RURAL PRIMARY CARE HOSPITALS- Section 1886(g)(3)(B) is
amended by striking `subsection (d)(5)(D)(iii)).' and inserting `subsection (d)
(5)(D)(iii) or a rural primary care hospital (as defined in section 1861(mm)(1))
.'
SEC. 4002. PROSPECTIVE PAYMENT HOSPITALS.
(a) CHANGES IN UPDATE FACTORS-
(1) IN GENERAL- Section 1886(b)(3)(B)(i) (42 U.S.C. 1395ww(b)(3)(B)(
i)) is amended--
(A) by striking `and' at the end of subclause (V);
(B) in subclause (VI)--
(i) by striking `1991' and inserting `1994', and
(ii) by redesignating such subclause as subclause (IX); and<
/ul>
(C) by inserting after subclause (V) the following new subclause
s:
`(VI) for fiscal year 1991, the market basket percentage increase mi
nus 2.0 percentage points for hospitals in all areas,
`(VII) for fiscal year 1992, the market basket percentage increase m
inus 1.6 percentage points for hospitals in all areas,
`(VIII) for fiscal year 1993, the market basket percentage increase
minus 1.55 percentage point for hospitals in all areas, and'.
(2) EFFECTIVE DATE- The amendments made by paragraph (1) shall apply
to payments for discharges occurring on or after January 1, 1991.
(b) CHANGES IN DISPROPORTIONATE SHARE PAYMENTS-
(1) INCREASE FOR URBAN HOSPITALS WITH MORE THAN 100 BEDS- Section 18
86(d)(5)(F)(vii) (42 U.S.C. 1395ww(d)(5)(F)(vii)) is amended--
(A) in subclause (I), by striking `greater than 20.2,' and all t
hat follows and inserting the following: `greater than 20.2--
`(a) for discharges occurring on or after April 1, 1990, and on
or before December 31, 1990, (P-20.2)(.65) + 5.62,
`(b) for discharges occurring on or after January 1, 1991, and o
n or before September 30, 1993, (P-20.2)(.7) + 5.62,
`(c) for discharges occurring on or after October 1, 1993, and o
n or before September 30, 1994, (P-20.2)(.8) + 5.88, and
`(d) for discharges occurring on or after October 1, 1994, (P-20
.2)(.825) + 5.88; or'; and
(B) in subclause (II), by striking `hospital, (P-15)(.6) + 2.5,'
and inserting the following: `hospital--
`(a) for discharges occurring on or after April 1, 1990, and on
or before December 31, 1990, (P-15)(.6) + 2.5,
`(b) for discharges occurring on or after January 1, 1991, and o
n or before September 30, 1993, (P-15)(.6) + 2.5,
`(c) for discharges occurring on or after October 1, 1993, (P-15
)(.65) + 2.5,'.
(2) INCREASE FOR HOSPITALS WITH DISPROPORTIONATE INDIGENT CARE REVEN
UES- Section 1886(d)(5)(F)(iii) (42 U.S.C. 1395ww(d)(5)(F)(iii)) is amended by s
triking `30 percent' and inserting `35 percent'.
(3) REPEAL OF SUNSET-
(A) IN GENERAL- Section 1886(d) (42 U.S.C. 1395ww(d)) is amended
by striking `and before October 1, 1995,' each place it appears in paragraph (2
)(C)(iv) and paragraph (5)(F)(i).
(B) CONFORMING AMENDMENTS- (A) Section 1886(d)(5)(B)(ii) (42 U.S
.C. 1395ww(d)(5)(B)) is amended to read as follows:
`(ii) For purposes of clause (i)(II), the indirect teaching adjustme
nt factor for discharges occurring on or after May 1, 1986, is equal to 1.89 .0A
(((1 + r) to the nth power) - 1), where `r' is the ratio of the hospital's full
-time equivalent interns and residents to beds and `n' equals .405.'.
(B) Section 1886(d)(3)(C)(ii) (42 U.S.C. 1395ww(d)(3)(C)(ii)) is
amended by striking `occurring--' and all that follows and inserting the follow
ing: `occurring on or after October 1, 1986, of an amount equal to the estimated
reduction in the payment amounts under paragraph (5)(B) that would have resulte
d from the enactment of the amendments made by section 9104 of the Medicare and
Medicaid Budget Reconciliation Amendments of 1985 and by section 4003(a)(1) of t
he Omnibus Budget Reconciliation Act of 1987 if the factor described in clause (
ii)(II) of paragraph (5)(B) (determined without regard to amendments made by the
Omnibus Budget Reconciliation Act of 1990) were applied for discharges occurrin
g on or after such date instead of the factor described in clause (ii) of that p
aragraph.'.
(4) NO RESTANDARDIZING FOR RECENT ADJUSTMENTS-
(A) ADJUSTMENTS UNDER OBRA 1989- Section 1886(d)(2)(C)(iv) (42 U
.S.C. 1395ww(d)(2)(C)(iv)) is amended by striking the period at the end and inse
rting the following: `, except that the Secretary shall not exclude additional p
ayments under such paragraph made as a result of the enactment of section 6003(c
) of the Omnibus Budget Reconciliation Act of 1989.'.
(B) ADJUSTMENTS UNDER OBRA 1990- Section 1886(d)(2)(C)(iv), as a
mended by subparagraph (A), is further amended by striking `1989.' and inserting
`1989 or the enactment of section 4002(b) of the Omnibus Budget Reconciliation
Act of 1990.'.
(5) EFFECTIVE DATE- The amendments made by paragraphs (1), (3), and
(4)(B) shall apply to discharges occurring on or after January 1, 1991, the amen
dment made by paragraph (2) shall apply to discharges occurring on or after Octo
ber 1, 1991, and the amendment made by paragraph (4)(A) shall take effect as if
included in the enactment of the Omnibus Budget Reconciliation Act of 1989.
(c) PAYMENTS TO RURAL HOSPITALS-
(1) PHASE-OUT OF SEPARATE AVERAGE STANDARDIZED AMOUNTS- Section 1886
(b)(3)(B)(i) (42 U.S.C. 1395ww(b)(3)(B)(i)), as amended by subsection (a)(1), is
further amended--
(A) in subclause (VI), by striking `in all areas,' and inserting
`in a large urban or other urban area, and the market basket percentage increas
e minus 0.7 percentage point for hospitals located in a rural area ,';
(B) in subclause (VII), by striking `in all areas,' and insertin
g `in a large urban or other urban area, and the market basket percentage increa
se minus 0.6 percentage point for hospitals located in a rural area,';
(C) in subclause (VIII), by striking `in all areas, and' and ins
erting `in a large urban or other urban area, and the market basket percentage i
ncrease minus 0.55 for hospitals located in a rural area,';
(D) in subclause (IX)--
(i) by striking `1994' and inserting `1996', and
(ii) by redesignating such subclause as subclause (XI); and<
/ul>
(E) by inserting after subclause (VIII) the following new subcla
uses:
`(IX) for fiscal year 1994, the market basket percentage increase fo
r hospitals located in a large urban or other urban area, and the market basket
percentage increase plus 1.5 percentage points for hospitals located in a rural
area,
`(X) for fiscal year 1995, the market basket percentage increase for
hospitals located in a large urban or other urban area, and such percentage inc
rease for hospitals located in a rural area as will provide for the average stan
dardized amount determined under subsection (d)(3)(A) for hospitals located in a
rural area being equal to such average standardized amount for hospitals locate
d in an urban area (other than a large urban area), and'.
(2) CONFORMING AMENDMENTS- (A) Section 1886(b)(3)(B) (42 U.S.C. 1395
ww(b)(3)) is amended--
(i) in clause (ii), by striking `(A) and (E),' and inserting `(A
), (C), (D), and (E),';
(ii) in subparagraphs (C)(ii) and (D)(ii), by striking `(B)(i)'
each place it appears and inserting `(B)(ii)'.
(B) Section 1886(d) (42 U.S.C. 1395ww(d)) is amended--
(i) in paragraph (1)(A)(iii), by striking `rural, large urban, o
r other urban area' and inserting `large urban or other area';
(ii) in paragraph (3)(A)--
(I) in clause (ii), by striking `the Secretary' and insertin
g `and ending on or before September 30, 1994, the Secretary',
(II) by redesignating clause (iii) as clause (v), and
(III) by inserting after clause (ii) the following new claus
es:
`(iii) For discharges occurring in the fiscal year beginning on Octo
ber 1, 1994, the average standardized amount for hospitals located in a rural ar
ea shall be equal to the average standardized amount for hospitals located in an
other urban area.
`(iv) For discharges occurring in a fiscal year beginning on or afte
r October 1, 1995, the Secretary shall compute an average standardized amount fo
r hospitals located in a large urban area and for hospitals located in other are
as within the United States and within each region equal to the respective avera
ge standardized amount computed for the previous fiscal year under this subparag
raph increased by the applicable percentage increase under subsection (b)(3)(B)(
i) with respect to hospitals located in the respective areas for the fiscal year
involved.';
(iii) in paragraph (3)(B), by striking `for hospitals located in
an urban area' and all that follows and inserting the following: `by a factor e
qual to the proportion of payments under this subsection (as estimated by the Se
cretary) based on DRG prospective payment amounts which are additional payments
described in paragraph (5)(A) (relating to outlier payments).';
(iv) in paragraph (3)(D)(i)--
(I) in the matter preceding subclause (I), by striking `an u
rban area (or,' and all that follows through `area),' and inserting `a large urb
an area', and
(II) in subclause (I), by striking `an urban area' and inser
ting `a large urban area';
(v) in paragraph (3)(D)(ii), by striking `a rural area' each pla
ce it appears and inserting `other areas'; and
(vi) in paragraph (8)(D)--
(I) in the first sentence, by striking `for hospitals locate
d in an urban area', and
(II) by striking the second sentence.
(3) EFFECTIVE DATE- The amendments made by paragraph (1) and paragra
ph (2)(A) shall apply to payments for discharges occurring on or after January 1
, 1991, and the amendments made by paragraph (2)(B) shall take effect October 1,
1994.
(d) AREA WAGE INDEX-
(1) DETERMINATION OF AREA WAGE INDEX- (A) For purposes of section 18
86(d)(3)(E) of the Social Security Act for discharges occurring on or after Janu
ary 1, 1991, and before October 1, 1993, the Secretary of Health and Human Servi
ces shall apply an area wage index determined using the survey of the 1988 wages
and wage-related costs of hospitals in the United States conducted under such s
ection.
(B) The Secretary shall apply the wage index described in subparagra
ph (A) without regard to a previous survey of wages and wage-related costs.
(2) STUDY OF AREA WAGE INDEX ADJUSTMENTS BASED ON PROFESSIONAL OCCUP
ATIONAL COMPONENT-
(A) STUDY- The Prospective Payment Assessment Commission shall e
xamine available data from States and other sources measuring earnings and paid
hours of employment of hospital workers by occupational category, and shall incl
ude in such examination an analysis of the impact of variation in occupational m
ix on the computation of the area wage index determined under section 1886(d)(3)
(E) of the Social Security Act.
(B) REPORT TO CONGRESS- In its March 1991 report, the Commission
shall include recommendations regarding the feasibility and desirability of mod
ifying such area wage index to take into account occupational mix, including var
iations in occupational mix resulting from differences in State codes and requir
ements.
(e) EXTENSION OF REGIONAL FLOOR ON STANDARDIZED AMOUNTS-
(1) IN GENERAL- Section 1886(d)(1)(A)(iii) (42 U.S.C. 1395ww(d)(1)(A
)(iii)) is amended by striking `beginning on or after' and all that follows thro
ugh `1990' and inserting `beginning on or after April 1, 1988, and ending on Sep
tember 30, 1993,'.
(2) STUDY- (A) The Secretary of Health and Human Services shall coll
ect sufficient data on the input prices associated with the non-wage-related por
tion of the adjusted average standardized amounts established under section 1886
(d)(3) of the Social Security Act to identify the extent to which variations in
such amounts among hospitals located in different geographic areas are attributa
ble to differences in such prices.
(B) Not later than June 1, 1993, the Secretary shall submit a report
to Congress analyzing such data, and shall include in such report recommendatio
ns regarding a methodology for adjusting such average standardized amounts to re
flect such variations.
(C) The provisions of chapter 35 of title 44, United States Code, sh
all not apply to data collected by the Secretary under subparagraph (A).
(4) EFFECTIVE DATE- The amendment made by paragraph (1) shall apply
to discharges occurring on or after October 1, 1990.
(f) ELIMINATION OF HOSPITAL OFF-SET FOR SERVICES OF PHYSICIAN ASSISTANTS
-
(1) IN GENERAL- Section 9338 of the Omnibus Budget Reconciliation Ac
t of 1986 is amended by striking subsection (d).
(2) EFFECTIVE DATE- The amendment made by paragraph (1) shall take e
ffect as if included in the enactment of the Omnibus Budget Reconciliation Act o
f 1986.
(g) RESPONSIBILITIES AND REPORTING REQUIREMENTS OF PROSPECTIVE PAYMENT A
SSESSMENT COMMISSION-
(1) EXPANSION OF RESPONSIBILTIES 3 .
(A) by striking `(2)' and inserting `(2)(A)'; and
(B) by adding at the end the following new subparagraphs:
`(B) In order to promote the efficient and effective delivery of high-qu
ality health care services, the Commission shall, in addition to carrying out it
s functions under subparagraph (A), study and make recommendations for each fisc
al year regarding changes in each existing reimbursement policy under this title
under which payments to an institution are based upon prospectively determined
rates and the development of new institutional reimbursement policies under this
title, including recommendations relating to payments during such fiscal year u
nder the prospective payment system established under this section for determini
ng payments for the operating costs of inpatient hospital services, including ch
anges in the number of diagnosis-related groups used to classify inpatient hospi
tal discharges under subsection (d), adjustments to such groups to reflect sever
ity of illness, and changes in the methods by which hospitals are reimbursed for
capital-related costs, together with general recommendations on the effectivene
ss and quality of health care delivery systems in the United States and the effe
cts on such systems of institutional reimbursements under this title.
`(C) By not later than June 1 of each year, the Commission shall submit
a report to Congress containing an examination of issues affecting health care d
elivery in the United States, including issues relating to--
`(i) trends in health care costs;
`(ii) the financial condition of hospitals and the effect of the lev
el of payments made to hospitals under this title on such condition;
`(iii) trends in the use of health care services; and
`(iv) new methods used by employers, insurers, and others to constra
in growth in health care costs.'.
(2) REPORTING REQUIREMENTS FOR COMMISSION AND SECRETARY; ELIMINATION
OF OTA REPORTING REQUIREMENTS- Section 1886 (42 U.S.C. 1395ww) is amended--
(A) by striking subparagraph (D) of subsection (d)(4);
(B) in the second sentence of subsection (e)(2)(A), as amended b
y paragraph (1)(A), by striking `In addition' and all that follows through `the
Commission' and inserting `The Commission';
(C) in subsection (e)(3)(A)--
(i) by striking `the Secretary' and inserting `Congress', an
d
(ii) by striking the period at the end and inserting the fol
lowing: `, together with its general recommendations under paragraph (2)(B) rega
rding the effectiveness and quality of health care delivery systems in the Unite
d States.';
(D) in subsection (e)(4)--
<
/ul> (i) by striking `(4)' and inserting `(4)(A)', and
(ii) by adding at the end the following new subparagraph:
`(B) In addition to the recommendation made under subparagraph (A), the
Secretary shall, taking into consideration the recommendations of the Commission
under paragraph (2)(B), recommend for each fiscal year (beginning with fiscal y
ear 1992) other appropriate changes in each existing reimbursement policy under
this title under which payments to an institution are based upon prospectively d
etermined rates.';
(E) in subsection (e)(5)--
(i) by striking `recommendation' each place it appears and i
nserting `recommendations', and
(ii) by adding at the end the following new sentence: `To th
e extent that the Secretary's recommendations under paragraph (4) differ from th
e Commission's recommendations for that fiscal year, the Secretary shall include
in the publication referred to in subparagraph (A) an explanation of the Secret
ary's grounds for not following the Commission's recommendations.'; and
(F) in subsection (e)(6)(G)--
(i) by striking clause (i), and
(ii) by redesignating clauses (ii) and (iii) as clauses (i)
and (ii).
(3) CONFORMING AMENDMENT- Section 1845(c)(1)(D) (42 U.S.C. 1395w-1(c
)(1)(D)) is amended by striking `reports and'.
(4) PROPAC STUDY OF MEDICAID PAYMENTS TO HOSPITALS-
(A) STUDY- The Prospective Payment Assessment Commission shall c
onduct a study of hospital payment rates under State plans for medical assistanc
e under title XIX of the Social Security Act, and shall specifically examine in
such study the relationship between payments under such plans and payments made
to hospitals under title XVIII of such Act, and the financial condition of hospi
tals receiving payments under such plans, with particular attention to hospitals
in urban areas which treat large numbers of individuals eligible for medical as
sistance under title XIX of such Act and other low-income individuals.
(B) REPORT- By not later than October 1, 1991, the Commission sh
all submit a report to Congress on the study conducted under subparagraph (A) an
d shall include in such report such recommendations relating to requirements for
payments to hospitals under title XIX of such Act as the Commission deems appro
priate.
(5) EFFECTIVE DATE- The amendments made by this subsection shall tak
e effect on the date of the enactment of this Act.
(h) PROVISIONS RELATING TO GEOGRAPHIC CLASSIFICATION OF HOSPITALS-
(1) PAYMENTS TO RECLASSIFIED HOSPITALS-
(A) IN GENERAL- Section 1886(d)(8)(C) (42 U.S.C. 1395ww(d)(8)(C)
) is amended--
(i) in clause (i), in the matter preceding subclause (I), by
striking `area--' and inserting `area, or by treating hospitals located in one
urban area as being located in another urban area--';
(ii) by amending clause (i)(II) to read as follows:
`(II) reduces the wage index for that urban area by more than 1 perc
entage point (as applied under this subsection), the Secretary shall calculate a
nd apply such wage index under this subsection separately to hospitals located i
n such urban area (excluding all the hospitals so treated) and to the hospitals
so treated (as if such hospitals were located in such urban area).';
(iii) by striking clause (ii); and
(iv) by redesignating clauses (iii) and (iv) as clauses (ii)
and (iii).
(B) EFFECTIVE DATE- The amendments made by subparagraph (A) shal
l apply to discharges occurring on or after January 1, 1991.
(2) GEOGRAPHIC CLASSIFICATION REVIEW BOARD-
(A) DEADLINE FOR SUBMISSION OF APPLICATIONS- For purposes of det
ermining whether a hospital requesting a change in geographic classification for
fiscal year 1992 under section 1886(d)(10) of the Social Security Act has met t
he deadline described in subparagraph (C)(ii) of such section, an application su
bmitted under such subparagraph shall be considered to have been submitted by th
e first day of the preceding fiscal year if it is submitted within 60 days of th
e date of publication of the guidelines described in subparagraph (D)(i) of such
section.
(B) TECHNICAL CORRECTIONS- Section 1886(d)(10) (42 U.S.C. 1395ww
(d)(10)) is amended--
(i) in subparagraph (A), by striking `Geographical' and inse
rting `Geographic';
(ii) in subparagraph (B)(i)--
(I) by striking `representatives' and inserting `represe
ntative', and
(II) by striking `1 member shall be a member of the Pros
pective Payment Assessment Commission, and at least';
(iii) in subparagraph (B)(ii), by striking `all' and inserti
ng `initial'; and
(iv) in subparagraph (10)(C)(iii)(II)--
(I) by striking the first 2 sentences and inserting the
following: `Appeal of decisions of the Board shall be subject to the provisions
of section 557b of title 5, United States Code.', and
(II) by striking `after' and inserting `after the date o
n which'.
SEC. 4003. EXPANSION OF DRG PAYMENT WINDOW.
(a) IN GENERAL- The first sentence of section 1886(a)(4) (42 U.S.C. 1395
ww(a)(4)) is amended by striking the period and inserting the following: `, and
includes the costs of all services for which payment may be made under this titl
e that are provided by the hospital (or by an entity wholly owned or operated by
the hospital) to the patient during the 3 days immediately preceding the date o
f the patient's admission if such services are diagnostic services (including cl
inical diagnostic laboratory tests) or are other services related to the admissi
on (as defined by the Secretary).'.
(b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply--
(1) in the case of any services provided during the day immediately
preceding the date of a patient's admission (without regard to whether the servi
ces are related to the admission), to services furnished on or after the date of
the enactment of this Act and before October 1, 1991;
(2) in the case of diagnostic services (including clinical diagnosti
c laboratory tests), to services furnished on or after January 1, 1991; and
(3) in the case of any other services, to services furnished on or a
fter October 1, 1991.
(c) ISSUANCE OF INTERIM FINAL REGULATION- The Secretary of Health and Hu
man Services shall issue such regulations (on an interim or other basis) as may
be necessary to implement this section.
SEC. 4004. PAYMENTS FOR MEDICAL EDUCATION COSTS.
(a) HOSPITAL GRADUATE MEDICAL EDUCATION RECOUPMENT-
(1) IN GENERAL- The Secretary of Health and Human Services may not,
before October 1, 1991, recoup payments from a hospital because of alleged overp
ayments to such hospital under part A of title XVIII of the Social Security Act
due to a determination that the amount of payments made for graduate medical edu
cation programs exceeds the amount allowable under section 1886(h).
(2) CAP ON ANNUAL AMOUNT OF RECOUPMENT- With respect to overpayments
to a hospital described in paragraph (1), the Secretary may not recoup more tha
n 25 percent of the amount of such overpayments from the hospital during a fisca
l year.
(3) EFFECTIVE DATE- Paragraphs (1) and (2) shall take effect October
1, 1990.
(b) UNIVERSITY HOSPITAL NURSING EDUCATION-
(1) IN GENERAL- The reasonable costs incurred by a hospital (or by a
n educational institution related to the hospital by common ownership or control
) during a cost reporting period for clinical training (as defined by the Secret
ary) conducted on the premises of the hospital under approved nursing and allied
health education programs that are not operated by the hospital shall be allowa
ble as reasonable costs under part A of title XVIII of the Social Security Act a
nd reimbursed under such part on a pass-through basis.
(2) CONDITIONS FOR REIMBURSEMENT- The reasonable costs incurred by a
hospital during a cost reporting period shall be reimbursable pursuant to parag
raph (1) only if--
(A) the hospital claimed and was reimbursed for such costs durin
g the most recent cost reporting period that ended on or before October 1, 1989;
(B) the proportion of the hospital's total allowable costs that
is attributable to the clinical training costs of the approved program, and allo
wable under (b)(1) during the cost reporting period does not exceed the proporti
on of total allowable costs that were attributable to the clinical training cost
s during the cost reporting period described in subparagraph (A);
(C) the hospital receives a benefit for the support it furnishes
to such program through the provision of clinical services by nursing or allied
health students participating in such program; and
(D) the costs incurred by the hospital for such program do not e
xceed the costs that would be incurred by the hospital if it operated the progra
m itself.
(3) PROHIBITION AGAINST RECOUPMENT OF COSTS BY SECRETARY-
(A) IN GENERAL- The Secretary of Health and Human Services may n
ot recoup payments from (or otherwise reduce or adjust payments under part A of
title XVIII of the Social Security Act to) a hospital because of alleged overpay
ments to such hospital under such title due to a determination that costs which
were reported by the hospital on its medicare cost reports for cost reporting pe
riods beginning on or after October 1, 1983, and before October 1, 1990, relatin
g to approved nursing and allied health education programs did not meet the requ
irements for allowable nursing and allied health education costs (as developed b
y the Secretary pursuant to section 1861(v) of such Act).
(B) REFUND OF AMOUNTS RECOUPED- If, prior to the date of the ena
ctment of this Act, the Secretary has recouped payments from (or otherwise reduc
ed or adjusted payments under part A of title XVIII of the Social Security Act t
o) a hospital because of overpayments described in subparagraph (A), the Secreta
ry shall refund the amount recouped, reduced, or adjusted from the hospital.
(4) SPECIAL AUDIT TO DETERMINE COSTS- In determining the amount of c
osts incurred by, claimed by, and reimbursed to, a hospital for purposes of this
subsection, the Secretary shall conduct a special audit (or use such other appr
opriate mechanism) to ensure the accuracy of such past claims and payments.
(5) EFFECTIVE DATE- Except as provided in paragraph (3), the provisi
ons of this subsection shall apply to cost reporting periods beginning on or aft
er October 1, 1990.
SEC. 4005. PPS-EXEMPT HOSPITALS.
(a) ADJUSTMENT TO PAYMENT AMOUNTS-
(1) IN GENERAL- Section 1886(b)(1)(B) (42 U.S.C. 1395ww(b)(1)(B)) is
amended by striking `(ii) in the case of' and all that follows through the semi
colon and inserting the following: `(ii) in the case of cost reporting periods b
eginning on or after October 1, 1991, an additional amount equal to 50 percent o
f the amount by which the operating costs exceed the target amount (except that
such additional amount may not exceed 10 percent of the target amount) after any
exceptions or adjustments are made to such target amount for the cost reporting
period;'.
(2) EFFECTIVE DATE- The amendment made by paragraph (1) shall apply
to cost reporting periods beginning on or after October 1, 1991.
(b) DEVELOPMENT OF NATIONAL PROSPECTIVE PAYMENT RATES FOR CURRENT NON-PP
S HOSPITALS-
(1) DEVELOPMENT OF PROPOSAL- The Secretary of Health and Human Servi
ces shall develop a proposal to modify the current system under which hospitals
that are not subsection (d) hospitals (as defined in section 1886(d)(1)(B) of th
e Social Security Act) receive payment for the operating and capital-related cos
ts of inpatient hospital services under part A of the medicare program or a prop
osal to replace such system with a system under which such payments would be mad
e on the basis of nationally-determined average standardized amounts. In develop
ing any proposal under this paragraph to replace the current system with a prosp
ective payment system, the Secretary shall--
(A) take into consideration the need to provide for appropriate
limits on increases in expenditures under the medicare program;
(B) provide for adjustments to prospectively determined rates to
account for changes in a hospital's case mix, severity of illness of patients,
volume of cases, and the development of new technologies and standards of medica
l practice;
(C) take into consideration the need to increase the payment oth
erwise made under such system in the case of services provided to patients whose
length of stay or costs of treatment greatly exceed the length of stay or cost
of treatment provided for under the applicable prospectively determined payment
rate;
(D) take into consideration the need to adjust payments under th
e system to take into account factors such as a disproportionate share of low-in
come patients, costs related to graduate medical education programs, differences
in wages and wage-related costs among hospitals located in various geographic a
reas, and other factors the Secretary considers appropriate; and
(E) provide for the appropriate allocation of operating and capi
tal-related costs of hospitals not subject to the new prospective payment system
and distinct units of such hospitals that would be paid under such system.
(2) REPORTS- (A) By not later than April 1, 1992, the Secretary shal
l submit the proposal developed under paragraph (1) to the Committee on Finance
of the Senate and the Committee on Ways and Means of the House of Representative
s.
(B) By not later than June 1, 1992, the Prospective Payment Assessme
nt Commission shall submit an analysis of and comments on the proposal developed
under paragraph (1) to the Committee on Finance of the Senate and the Committee
on Ways and Means of the House of Representatives.
(c) APPEALS OF TARGET AMOUNTS-
(1) DEADLINES FOR REVIEW AND DECISION- (A) Section 1816(f) (42 U.S.C
. 1395h(f)) is amended--
(i) by striking `(1)' and `(2)' and inserting `(A)' and `(B)';
(ii) by striking `(f)' and inserting `(f)(1)'; and
(iii) by striking `Such standards and criteria' and all that fol
lows and inserting the following:
`(2) The standards and criteria established under paragraph (1) shall in
clude--
`(A) with respect to claims for services furnished under this part b
y any provider of services other than a hospital--
`(i) whether such agency or organization is able to process 75 p
ercent of reconsiderations within 60 days (except in the case of fiscal year 198
9, 66 percent of reconsiderations) and 90 percent of reconsiderations within 90
days, and
`(ii) the extent to which such agency or organization's determin
ations are reversed on appeal; and
`(B) with respect to applications for an exemption from or exception
or adjustment to the target amount applicable under section 1886(b) to a hospit
al that is not a subsection (d) hospital (as defined in section 1886(d)(1)(B))--
4
`(ii) if such agency or organization receives an incomplete appl
ication, whether such agency or organization is able to return the application w
ith instructions on how to complete the application not later than 60 days after
the application is filed.'.
(B) Section 1886(b)(4)(A) (42 U.S.C. 1395ww(b)(4)(A)) is amended by
adding at the end the following new sentence: `The Secretary shall announce a de
cision on any request for an exemption, exception, or adjustment under this para
graph not later than 180 days after receiving a completed application from the i
ntermediary for such exemption, exception, or adjustment, and shall include in s
uch decision a detailed explanation of the grounds on which such request was app
roved or denied.'.
(2) STANDARDS FOR ASSIGNMENT OF NEW BASE PERIOD- Section 1886(b)(4)
(42 U.S.C. 1395ww(b)(4)) is amended--
(A) by redesignating subparagraph (B) as subparagraph (C); and
(B) by inserting after subparagraph (A) the following new subpar
agraph:
`(B) In determining under subparagraph (A) whether to assign a new base
period which is more representative of the reasonable and necessary cost to a ho
spital of providing inpatient services, the Secretary shall take into considerat
ion--
`(i) changes in applicable technologies and medical practices, or di
fferences in the severity of illness among patients, that increase the hospital'
s costs;
`(ii) whether increases in wages and wage-related costs for hospital
s located in the geographic area in which the hospital is located exceed the ave
rage of the increases in such costs paid by hospitals in the United States; and<
/ul>
`(iii) such other factors as the Secretary considers appropriate in
determining increases in the hospital's costs of providing inpatient services.'.
(3) GUIDANCE TO INTERMEDIARIES AND HOSPITALS- The Administrator of t
he Health Care Financing Administration shall provide guidance to agencies and o
rganizations performing functions pursuant to section 1816 of the Social Securit
y Act and to hospitals that are not subsection (d) hospitals (as defined in sect
ion 1886(d)(1)(B) of such Act) to assist such agencies, organizations, and hospi
tals in filing complete applications with the Administrator for exemptions, exce
ptions, and adjustments under section 1886(b)(4)(A) of such Act.
(4) EFFECTIVE DATES- The amendments made by paragraph (1) shall take
effect on the date of the enactment of this Act, and the amendments made by par
agraph (2) shall take effect as if included in the enactment of the Omnibus Budg
et Reconciliation Act of 1989.
SEC. 4006. HOSPICE BENEFIT EXTENSION.
(a) IN GENERAL- Section 1812 (42 U.S.C. 1395d) is amended--
(1) in subsection (a)(4), by striking `90 days each' and all that fo
llows through `with respect to' and inserting the following: `90 days each, a su
bsequent period of 30 days, and a subsequent extension period with respect to';
and
(2) in subsection (d)--
(A) in paragraph (1), by striking `90 days each' and all that fo
llows through `lifetime' and inserting the following: `90 days each, a subsequen
t period of 30 days, and a subsequent extension period during the individual's l
ifetime', and
(B) in paragraph (2)(B), by striking `a 90- or 30-day period,' a
nd inserting `a 90- or 30-day period or a subsequent extension period,'.
(b) CONFORMING AMENDMENT- Section 1814(a)(7)(A) (42 U.S.C. 1395f(a)(7)(A
)) is amended--
(1) in clause (i), by striking `and' at the end;
(2) in clause (ii), by striking the semicolon at the end and inserti
ng `, and'; and
(3) by adding at the end the following new clause:
`(iii) in a subsequent extension period, the medical directo
r or physician described in clause (i)(II) recertifies at the beginning of the p
eriod that the individual is terminally ill;'.
(c) EFFECTIVE DATE- The amendments made by this section shall apply with
respect to care and services furnished on or after January 1, 1990.
SEC. 4007. FREEZE IN PAYMENTS UNDER PART A THROUGH DECEMBER 31.
(a) IN GENERAL- Notwithstanding any other provision of law, for purposes
of determining the amount of payment for items or services under part A of titl
e XVIII of the Social Security Act (including payments under section 1886 of suc
h Act attributable to or allocated under such part) during the period described
in subsection (b):
(1) The market basket percentage increase (described in section 1886
(b)(3)(B)(iii) of the Social Security Act) shall be deemed to be 0 for discharge
s occurring during such period.
(2) The percentage increase or decrease in the medical care expendit
ure category of the consumer price index applicable under section 1814(i)(2)(B)
of such Act shall be deemed to be 0.
(3) The area wage index applicable to a subsection (d) hospital unde
r section 1886(d)(3)(E) of such Act shall be deemed to be the area wage index ap
plicable to such hospital as of September 30, 1990.
(4) The percentage change in the consumer price index applicable und
er section 1886(h)(2)(D) of such Act shall be deemed to be 0.
(b) DESCRIPTION OF PERIOD- The period referred to in subsection (a) is t
he period beginning on October 21, 1990, and ending on December 31, 1990.
(a) WAIVER OF LIABILITY FOR SKILLED NURSING FACILITIES AND HOSPICES-
(1) SKILLED NURSING FACILITIES- The second sentence of section 9126(
c) of the Consolidated Omnibus Budget Reconciliation Act of 1985 is amended by s
triking `October 31, 1990' and inserting `December 31, 1995'.
(2) HOSPICES- Section 9305(f)(2) of the Omnibus Budget Reconciliatio
n Act of 1986 is amended by striking `November 1, 1990' and inserting `December
31, 1995'.
(3) EFFECTIVE DATE- The amendments made by paragraphs (1) and (2) sh
all take effect on the date of the enactment of this Act.
(b) HOSPITAL OBLIGATIONS WITH RESPECT TO TREATMENT OF EMERGENCY MEDICAL
CONDITIONS-
(1) CIVIL MONETARY PENALTIES- Section 1867(d)(2)(A) (42 U.S.C. 1395d
d(d)(2)(A)) is amended by striking `knowingly' and inserting `negligently'.
(2) APPLICATION OF PENALTIES TO SMALL HOSPITALS- Section 1867(d)(2)(
A) (42 U.S.C. 1395dd(d)(2)(A)) is amended by inserting `(or not more than $25,00
0 in the case of a hospital with less than 100 beds)' after `$50,000'.
(3) TERMINATION OF HOSPITAL PROVIDER AGREEMENTS-
(A) Section 1867 (42 U.S.C. 1395dd) is further amended--
(i) by striking paragraph (1) of subsection (d),
(ii) by redesignating paragraphs (2) and (3) of subsection (
d) as paragraph (1) and (2), respectively, and
(iii) in subsection (c)(2)(C), by striking `(d)(2)(C)' and i
nserting `(d)(1)(C)'.
(B) Section 1866(a)(1)(I)(i) (42 U.S.C. 1395cc(a)(1)(I)(i)) is a
mended by inserting `and to meet the requirements of such section' before the co
mma at the end.
(4) EFFECTIVE DATE- The amendments made by this subsection shall app
ly to actions occurring on or after the first day of the sixth month beginning a
fter the date of the enactment of this Act.
(c) Inspector General Study of Prohibition on Hospital Employment of Phy
sicians-
(1) STUDY- The Secretary of Health and Human Services (acting throug
h the Inspector General of the Department of Health and Human Services) shall co
nduct a study of the effect of State laws prohibiting the employment of physicia
ns by hospitals on the availability and accessibility of trauma and emergency ca
re services, and shall include in such study an analysis of the effect of such l
aws on the ability of hospitals to meet the requirements of section 1867 of the
Social Security Act relating to the examination and treatment of individuals wit
h an emergency medical condition and women in labor.
(2) REPORT- By not later than 1 year after the date of the enactment
of this Act, the Secretary shall submit a report to Congress on the study condu
cted under paragraph (1).
(d) DESIGNATION OF RURAL PRIMARY CARE HOSPITALS-
(1) PRIORITY DESIGNATIONS OF BORDER STATE HOSPITALS- Section 1820(i)
(2)(C) (42 U.S.C. 1395i-4(i)(2)(C)) is amended by adding at the end the followin
g new sentence: `In designating facilities as rural primary care hospitals under
this subparagraph, the Secretary shall give preference to facilities not meetin
g the requirements of clause (i) of subparagraph (A) that have entered into an a
greement described in subsection (g)(2) with a rural health network located in a
State receiving a grant under subsection (a)(1).'.
(2) ELIGIBILITY OF CERTAIN CLOSED HOSPITALS- Section 1820(f)(1)(B) (
42 U.S.C. 1395i-4(f)(1)(B)) is amended by striking `is a hospital,' and insertin
g the following: `is a hospital (or, in the case of a facility that closed durin
g the 12-month period that ends on the date the facility applies for such design
ation, at the time the facility closed),'.
(3) ELIGIBILITY OF URBAN HOSPITALS- Section 1820(f)(1)(A) (42 U.S.C.
1395i-4(f)(1)(A)) is amended by striking the semicolon and inserting the follow
ing: `, or is located in a county whose geographic area is substantially larger
than the average geographic area for urban counties in the United States and who
se hospital service area is characteristic of service areas of hospitals located
in rural areas;'.
(4) EFFECTIVE DATE- The amendments made by paragraphs (1), (2), and
(3) shall take effect on the date of the enactment of this Act.
(e) SKILLED NURSING FACILITY ROUTINE COST LIMITS-
(1) IN GENERAL- Section 6024 of the Omnibus Budget Reconciliation Ac
t of 1989 is amended by adding at the end the following new sentence: `The Secre
tary shall update such costs under such section for cost reporting periods begin
ning on or after October 1, 1989, by using cost reports submitted by skilled nur
sing facilities for cost reporting periods ending not earlier than January 31, 1
988, and not later than December 31, 1988.'.
(2) 2-YEAR UPDATES REQUIRED- Section 1888(a) (42 U.S.C. 1395yy(a)) i
s amended in the matter following paragraph (4) by striking the period and inser
ting the following: `, and shall, for cost reporting periods beginning on or aft
er October 1, 1992 and every 2 years thereafter, provide for an update to the pe
r diem cost limits described in this subsection'.
(3) EFFECTIVE DATE- The amendments made by paragraphs (1) and (2) sh
all take effect as if included in the enactment of the Omnibus Budget Reconcilia
tion Act of 1989.
(f) CLARIFICATION OF EXTENSION OF WAIVER FOR FINGER LAKES AREA HOSPITAL
CORPORATION-
(1) IN GENERAL- The second sentence of section 1886(c)(4) (42 U.S.C.
1395ww(c)(4)) is amended by striking `rate of increase from' and inserting `pay
ments under the State system as compared to aggregate payments which would have
been made under the national system since'.
(2) EFFECTIVE DATE- The amendment made by paragraph (1) shall take e
ffect as if included in the enactment of the Omnibus Budget Reconciliation Act o
f 1989.
(g) ENROLLMENT IN PART A FOR HMO MEMBERS-
(1) IN GENERAL- Section 1818(c) (42 U.S.C. 1395i-2(c)) is amended--<
/ul>
(A) by striking `and' at the end of paragraph (5),
(B) by striking the period at the end of paragraph (6) and inser
ting a semicolon, and
(C) by adding at the end the following new paragraphs:
`(7) an individual who meets the conditions of subsection (a) may en
roll under this part during a special enrollment period that includes any month
during any part of which the individual is enrolled under section 1876 with an e
ligible organization and ending with the last day of the 8th consecutive month i
n which the individual is at no time so enrolled;
`(8) in the case of an individual who enrolls during a special enrol
lment period under paragraph (7)--
`(A) in any month of the special enrollment period in which the
individual is at any time enrolled under section 1876 with an eligible organizat
ion or in the first month following such a month, the coverage period shall begi
n on the first day of the month in which the individual so enrolls (or, at the o
ption of the individual, on the first day of any of the following three months),
or
`(B) in any other month of the special enrollment period, the co
verage period shall begin on the first day of the month following the month in w
hich the individual so enrolls; and
`(9) in applying the provisions of section 1839(b), there shall not
be taken into account months for which the individual can demonstrate that the i
ndividual was enrolled under section 1876 with an eligible organization.'.
<
/ul>
(2) EFFECTIVE DATE- The amendment made by paragraph (1) shall take e
ffect on February 1, 1991.
(h) NURSING HOME REFORM-
(1) NURSE AIDE TRAINING AND COMPETENCY EVALUATION-
(A) NO COMPLIANCE ACTIONS BEFORE EFFECTIVE DATE OF GUIDELINES- T
he Secretary of Health and Human Services may not refuse to enter into an agreem
ent or cancel an existing agreement with a State under section 1864 of the Socia
l Security Act on the basis that the State failed to meet the requirement of sec
tion 1819(e)(1)(A) of such Act before the effective date of guidelines, issued b
y the Secretary, establishing requirements under section 1819(f)(2)(A) of such A
ct, if the State demonstrates to the satisfaction of the Secretary that it has m
ade a good faith effort to meet such requirement before such effective date.
(B) PART-TIME NURSE AIDES NOT ALLOWED DELAY IN TRAINING- Section
1819(b)(5)(A) (42 U.S.C. 1396r(b)(5)(A)) is amended--
(i) by striking `A skilled nursing facility' and inserting `
(i) Except as provided in clause (ii), a skilled nursing facility';
(ii) by striking `(on a full-time, temporary, per diem, or o
ther basis) and inserting `on a full-time basis';
(iii) by striking `(i)' and `(ii)' and inserting `(I)' and `
(II)'; and
(iv) by adding at the end the following:
`(ii) A skilled nursing facility must not use on a temporary
, per diem, leased, or on any basis other than as a permanent employee any indiv
idual as a nurse aide in the facility on or after January 1, 1991, unless the in
dividual meets the requirements described in clause (i).'.
(C) REQUIREMENT TO OBTAIN INFORMATION FROM NURSE AIDE REGISTRY-
Section 1819(b)(5)(C) (42 U.S.C. 1395i-3(b)(5)(C)) is amended by striking `the S
tate registry established under subsection (e)(2)(A) as to information in the re
gistry' and inserting `any State registry established under subsection (e)(2)(A)
that the facility believes will include information'.
(D) RETRAINING OF NURSE AIDES- Section 1819(b)(5)(D) (42 U.S.C.
1395i-3(b)(5)(D)) is amended by striking the period at the end and inserting `,
or a new competency evaluation program.'.
(E) CLARIFICATION OF NURSE AIDES NOT SUBJECT TO CHARGES- Section
1819(f)(2)(A)(iv) (42 U.S.C. 1395i-3(f)(2)(A)(iv)) is amended--
(i) in subclause (I), by striking `and' at the end;
(ii) in subclause (II), by inserting after `nurse aide' the
following: `who is employed by (or who has received an offer of employment from)
a facility on the date on which the aide begins either such program';
(iii) in subclause (II), by striking the period at the end a
nd inserting `, and'; and
(iv) by adding at the end the following new subclause:
<
/ul> `(III) in the case of a nurse aide not described in subc
lause (II) who is employed by (or who has received an offer of employment from)
a facility not later than 12 months after completing either such program, the St
ate shall provide for the reimbursement of costs incurred in completing such pro
gram on a prorata basis during the period in which the nurse aide is so employed
.'.
(F) MODIFICATION OF NURSING FACILITY DEFICIENCY STANDards-
<
/ul> (i) IN GENERAL- Section 1819(f)(2)(B)(iii)(I) (42 U.S.C. 139
5i-3(f)(2)(B)(iii)(I)) is amended to read as follows:
`(I) offered by or in a skilled nursing facility which,
within the previous 2 years--
(ii) EFFECTIVE DATE- The amendments made by clause (i) shall
take effect as if included in the enactment of the Omnibus Budget Reconciliatio
n Act of 1987, except that a State may not approve a training and competency eva
luation program or a competency evaluation program offered by or in a nursing fa
cility which, pursuant to any Federal or State law within the 2-year period begi
nning on October 1, 1988--
(I) had its participation terminated under title XVIII o
f the Social Security Act or under the State plan under title XIX of such Act;
(II) was subject to a denial of payment under either suc
h title;
(III) was assessed a civil money penalty not less than $
5,000 for deficiencies in nursing facility standards;
(IV) operated under a temporary management appointed to
oversee the operation of the facility and to ensure the health and safety of the
facility's residents; or
(V) pursuant to State action, was closed or had its resi
dents transferred.
(G) CLARIFICATION OF STATE RESPONSIBILITY TO DETERMINE COMPETENC
Y- Section 1819(f)(2)(B) (42 U.S.C. 1395i-3(f)(2)(B)) is amended in the second s
entence by inserting `(through subcontract or otherwise)' after `may not delegat
e'.
(H) EFFECTIVE DATE- Except as provided in subparagraph (F), the
amendments made by this subsection shall take effect as if they were included in
the enactment of the Omnibus Budget Reconciliation Act of 1987.
(2) OTHER AMENDMENTS-
(A) ASSURANCE OF APPROPRIATE PAYMENT AMOUNTS- (i) Section 1861(v
)(1)(E) (42 U.S.C. 1395x(v)(1)(E)) is amended in the second sentence by striking
`the costs of such facilities' and inserting `the costs (including the costs of
services required to attain or maintain the highest practicable physical, menta
l, and psychosocial well-being of each resident eligible for benefits under this
title) of such facilities'.
(ii) Section 1888(d)(1) (42 U.S.C. 1395xx(d)(1)) is amended in t
he first sentence by striking `(and capital-related costs)' and inserting `(incl
uding the costs of services required to attain or maintain the highest practicab
le physical, mental, and psychosocial well-being of each resident eligible for b
enefits under this title) and capital-related costs'.
(B) DISCLOSURE OF INFORMATION OF QUALITY ASSESSMENT AND ASSURANC
E COMMITTEES- Section 1819(b)(1)(B) (42 U.S.C. 1395i-3(b)(1)(B)) is amended by a
dding at the end the following new sentence: `A State or the Secretary may not r
equire disclosure of the records of such committee except insofar as such disclo
sure is related to the compliance of such committee with the requirements of thi
s subparagraph.'.
(C) PERIOD FOR RESIDENT ASSESSMENT- Section 1819(b)(3)(C)(i)(I)
(42 U.S.C. 1395i-3(b)(3)(C)(i)(I)) is amended by striking `4 days' and inserting
`not later than 14 days'.
(D) CLARIFICATION OF RESPONSIBILITY FOR SERVICES FOR MENTALLY IL
L AND MENTALLY RETARDED RESIDENTS- Section 1819(b)(4)(A) (42 U.S.C. 1395i-3(b)(4
)(A)) is amended--
(i) by striking `and' at the end of clause (v),
(ii) by striking the period at the end of clause (vi) and in
serting `; and', and
(iii) by inserting after clause (vi) the following new claus
e:
`(vii) treatment and services required by mentally ill and m
entally retarded residents not otherwise provided or arranged for (or required t
o be provided or arranged for) by the State.'.
(E) NOTIFICATION OF SECRETARIAL WAIVER- Section 1819(b)(4)(C)(ii
) (42 U.S.C. 1395i-3(b)(4)(C)(ii)) is amended--
(i) by striking `and' at the end of subclause (II);
(ii) by striking the period at the end of subclause (III) an
d inserting a comma; and
(iii) by adding at the end the following new subclauses:
`(IV) the Secretary provides notice of the waiver to the
State long-term care ombudsman (established under section 307(a)(12) of the Old
er Americans Act of 1965) and the protection and advocacy system in the State fo
r the mentally ill and the mentally retarded, and
`(V) the facility that is granted such a waiver notifies
residents of the facility (or, where appropriate, the guardians or legal repres
entatives of such residents) and members of their immediate families of the waiv
er.'.
(F) CLARIFICATION OF DEFINITION OF NURSE AIDE- Section 1819(b)(5
)(F)(i) (42 U.S.C. 1395i-3(b)(5)(F)(i)) is amended by striking `(G)),' and inser
ting `(G)) or a registered dietician,'.
(G) RESIDENTS' RIGHTS TO REFUSE INTRA-FACILITY TRANSFERS FOR NON
-MEDICAL REASONS- Section 1819(c)(1)(A) (42 U.S.C. 1395i-3(c)(1)(A)) is amended-
-
(i) by redesignating clause (x) as clause (xi) and by insert
ing after clause (ix) the following new clause:
`(x) REFUSAL OF CERTAIN TRANSFERS- The right to refuse a tra
nsfer to another room within the facility, if a purpose of the transfer is to re
locate the resident from a portion of the facility that is a skilled nursing fac
ility (for purposes of this title) to a portion of the facility that is not such
a skilled nursing facility.'; and
(B) by adding at the end the following: `A resident's exerci
se of a right to refuse transfer under clause (x) shall not affect the resident'
s eligibility or entitlement to benefits under this title or to medical assistan
ce under title XIX of this Act.'.
(H) RESIDENT ACCESS TO CLINICAL RECORDS- Section 1819(c)(1)(A)(i
v) (42 U.S.C. 1395i-3(c)(1)(A)(iv)) is amended by inserting before the period at
the end the following: `and to access to current clinical records of the reside
nt upon request by the resident or the resident's legal representative, within 2
4 hours (excluding hours occurring during a weekend or holiday) after making suc
h a request'.
(I) INCLUSION OF STATE NOTICE OF RIGHTS IN FACILITY NOTICE OF RI
GHTS- Section 1819(c)(1)(B)(ii) (42 U.S.C. 1395i-3(c)(1)(B)(ii)) is amended by i
nserting `including the notice (if any) of the State developed under section 191
9(e)(6)' after `in such rights)'.
(J) SPECIFICATION OF REQUIRED PROGRAMS- Section 1819(e)(1)(A) (4
2 U.S.C. 1395i-3(e)(1)(A)) is amended by striking `clause (i) or (ii) of subsect
ion (f)(2)(A)' and inserting `subsection (f)(2)'.
(K) CLARIFICATION OF NURSE AIDE REGISTRY REQUIREMENTS- Section 1
819(e)(2) (42 U.S.C. 1395i-3(e)(2)) is amended--
(i) in subparagraph (A), by striking the period and insertin
g the following: `, or any individual described in subsection (f)(2)(B)(ii) or i
n subparagraph (B), (C), or (D) of section 6901(b)(4) of the Omnibus Budget Reco
nciliation Act of 1989.'; and
(ii) by adding at the end the following new subparagraph:
`(C) PROHIBITION AGAINST CHARGES- A State may not impose any cha
rges on a nurse aide relating to the registry established and maintained under s
ubparagraph (A).'.
(L) CLARIFICATION ON FINDINGS OF NEGLECT- Section 1819(g)(1)(C)
(42 U.S.C. 1395i-3(g)(1)(C)) is amended by adding at the end the following: `A S
tate shall not make a finding that an individual has neglected a resident if the
individual demonstrates that such neglect was caused by factors beyond the cont
rol of the individual.'.
(M) TIMING OF PUBLIC DISCLOSURE OF SURVEY RESULTS- Section 1819(
g)(5)(A)(i) (42 U.S.C. 1395i-3(g)(5)(A)(i)) is amended by striking `deficiencies
and plans' and inserting `deficiencies, within 14 calendar days after such info
rmation is made available to those facilities, and approved plans'.
(N) OMBUDSMAN PROGRAM COORDINATION WITH STATE SURVEY AND CERTIFI
CATION AGENCIES- Section 1819(g)(5)(B) (42 U.S.C. 1395i-3(g)(5)(B)) is amended b
y striking `with respect' and inserting `or of any adverse action taken against
a skilled nursing facility under paragraphs (1), (2), or (4) of subsection (h),
with respect'.
(O) MAINTAINING REGULATORY STANDARDS FOR CERTAIN SERVICES- Any r
egulations promulgated and applied by the Secretary of Health and Human Services
after the date of the enactment of the Omnibus Budget Reconciliation Act of 198
7 with respect to services described in clauses (ii), (iv), and (v) of section 1
819(b)(4)(A) of the Social Security Act shall include requirements for providers
of such services that are at least as strict as the requirements applicable to
providers of such services prior to the enactment of the Omnibus Budget Reconcil
iation Act of 1987.
(P) EFFECTIVE DATES- The amendments made by this paragraph shall
take effect as if they were included in the enactment of the Omnibus Budget Rec
onciliation Act of 1987.
(i) CLARIFICATION OF SECRETARIAL WAIVER AUTHORITY-
(1) RURAL HOSPITAL DEMONSTRATION- The Secretary of Health and Human
Services is authorized to waive such provisions of title XVIII of the Social Sec
urity Act as are necessary to conduct any demonstration project for limited-serv
ice rural hospitals with respect to which the Secretary has entered into an agre
ement before the date of the enactment of the Omnibus Budget Reconciliation Act
of 1989.
(2) NURSING HOME DEMONSTRATIONS- Section 6901(d)(3)(B) of the Omnibu
s Budget Reconciliation Act of 1989 is amended--
(A) by striking `Wisconsin' and inserting `Wisconsin and nursing
home case-mix demonstration projects in other States'; and
(B) by striking the second sentence.
(3) STATE WAIVER AUTHORITY- Section 1814(b) (42 U.S.C. 1395f(b)) is
amended--
(A) in paragraph (3)(B), by striking `October 1, 1983' and inser
ting `January 1, 1981';
(B) in the second sentence, by striking `seventh month' and inse
rting `37th month'; and
(C) by adding at the end the following: `If, by the end of such
36-month period, the Secretary determines, based on evidence submitted by the Go
vernor of the State, that neither of the conditions described in subparagraph (A
) or (B) of paragraph (3) continues to apply, the Secretary shall continue witho
ut interruption payment to hospitals in the State under the State's system. If,
by the end of such 36-month period, the Secretary determines, based on such evid
ence, that either of the conditions described in subparagraph (A) or (B) of such
paragraph continues to apply, the Secretary shall (i) collect any net excess re
imbursement to hospitals in the State during such 36-month period (basing such n
et excess reimbursement on the net difference, if any, in the rate of increase i
n costs per hospital inpatient admission under the State system compared to the
rate of increase in such costs with respect to all hospitals in the United State
s over the 36-month period, as measured by including the cumulative savings unde
r the State system based on the difference in the rate of increase in costs per
hospital inpatient admission under the State system as compared to the rate of i
ncrease in such costs with respect to all hospitals in the United States between
January 1, 1981, and the date of the Secretary's initial notice), and (ii) prov
ide a reasonable period, not to exceed 2 years, for transition from the State sy
stem to the national payment system.'.
(4) EFFECTIVE DATE- The amendment made by paragraphs (1) and (2) sha
ll be effective as if included in the enactment of the Omnibus Budget Reconcilia
tion Act of 1989.
(j) DETERMINATION OF REASONABLE COSTS RELATING TO SWING BEDS-
(1) IN GENERAL- Section 1883(a)(2)(B)-(ii)(II) (42 U.S.C. 1395tt(a)(
2)(B)(ii)(II)) is amended by striking `the previous calendar year' and all that
follows through the period and inserting `the most recent year for which cost re
porting data are available with respect to such services (increased in a compoun
ded manner by the applicable increase for payments for routine service costs of
skilled nursing facilities under section 1888 for subsequent cost reporting peri
ods and up to and including such calendar year) under this title to freestanding
skilled nursing facilities in the region (as defined in section 1886(d)(2)(D))
in which the facility is located.'.
(2) HOLD HARMLESS- If, as a result of the amendment made by paragrap
h (1), the reasonable cost of routine services furnished by a hospital during a
calendar year (as determined under section 1883 of the Social Security Act) is l
ess than the reasonable cost of such services determined under such section for
the previous calendar year, the reasonable cost of such services furnished by th
e hospital during the calendar year under such section shall be equal to the rea
sonable cost determined under such section for the previous calendar year.
<
/ul>
(3) SWING BEDS CERTIFIED PRIOR TO MAY 1, 1987- Notwithstanding the r
equirement of section 1883(b)(1) of the Social Security Act that the Secretary m
ay not enter into an agreement under such section with a hospital that is not lo
cated in a rural area, any agreement entered into under such section on or befor
e May 1, 1987, between the Secretary of Health and Human Services and a hospital
located in an urban area shall remain in effect.
(4) EFFECTIVE DATE- The amendment made by paragraph (1) shall apply
to services furnished on or after October 1, 1990.
(k) PROSPECTIVE PAYMENT SYSTEM FOR SKILLED NURSING FACILITY SERVICES-
(1) DEVELOPMENT OF PROPOSAL- The Secretary of Health and Human Servi
ces shall develop a proposal to modify the current system under which skilled nu
rsing facilities receive payment for extended care services under part A of the
medicare program or a proposal to replace such system with a system under which
such payments would be made on the basis of prospectively determined rates. In d
eveloping any proposal under this paragraph to replace the current system with a
prospective payment system, the Secretary shall--
(A) take into consideration the need to provide for appropriate
limits on increases in expenditures under the medicare program without jeopardiz
ing access to extended care services for individuals unable to care for themselv
es;
(B) provide for adjustments to prospectively determined rates to
account for changes in a facility's case mix, volume of cases, and the developm
ent of new technologies and standards of medical practice;
(C) take into consideration the need to increase the payment oth
erwise made under such system in the case of services provided to patients whose
length of stay or costs of treatment greatly exceed the length of stay or cost
of treatment provided for under the applicable prospectively determined payment
rate;
(D) take into consideration the need to adjust payments under th
e system to take into account factors such as a disproportionate share of low-in
come patients, differences in wages and wage-related costs among facilities loca
ted in various geographic areas, and other factors the Secretary considers appro
priate; and
(E) take into consideration the appropriateness of classifying p
atients and payments upon functional disability, cognitive impairment, and other
patient characteristics.
(2) REPORTS- (A) By not later than April 1, 1991, the Secretary (act
ing through the Administrator of the Health Care Financing Administration) shall
submit any research studies to be used in developing the proposal under paragra
ph (1) to the Committee on Finance of the Senate and the Committee on Ways and M
eans of the House of Representatives.
(B) By not later than September 1, 1991, the Secretary shall submit
the proposal developed under paragraph (1) to the Committee on Finance of the Se
nate and the Committee on Ways and Means of the House of Representatives.
(C) By not later than March 1, 1992, the Prospective Payment Assessm
ent Commission shall submit an analysis of and comments on the proposal develope
d under paragraph (1) to the Committee on Finance of the Senate and the Committe
e on Ways and Means of the House of Representatives.
(l) REVIEW OF HOSPITAL REGULATIONS WITH RESPECT TO RURAL HOSPITALS-
(1) IN GENERAL- The Secretary of Health and Human Services shall rev
iew the requirements applicable under title XVIII of the Social Security Act to
determine which requirements could be made less administratively and economicall
y burdensome (without diminishing the quality of care) for hospitals defined in
section 1886(d)(1)(B) of such Act that are located in a rural area (as defined i
n section 1886(d)(2)(D) of such Act). Such review shall specifically include sta
ndards related to staffing requirements.
(2) REPORT- The Secretary of Health and Human Services shall report
to Congress by April 1, 1992, on the results of the review conducted under subse
ction (a), and include conclusions on which regulations, if any, should be modif
ied with respect to hospitals described in subsection (a).
(m) MISCELLANEOUS TECHNICAL CORRECTIONS-
(1) APPLICATION OF PREENTITLEMENT PSYCHIATRIC HOSPITAL SERVICES TO L
IMIT ON INPATIENT HOSPITAL SERVICES- Effective as if included in the enactment o
f the Medicare Catastrophic Coverage Repeal Act of 1989, section 101(b)(1)(B) is
amended by inserting `(other than the limitation under section 1812(c) of such
Act)' after `limitation'.
(2) PROVISIONS RELATING TO HOSPITALS-
(A) Section 1886(d)(5)(D)(iii) (42 U.S.C. 1395ww(d)(5)(D)(iii)),
as amended by section 6003(e)(1)(A)(iv) of Omnibus Budget Reconciliation Act of
1989 (in this subsection referred to as `OBRA-1989'), is amended by striking `T
he term' and inserting `For purposes of this title, the term'.
(B) Section 1820 of such Act (42 U.S.C. 1395i-4), as added by se
ction 6003(g)(1)(A) of the Omnibus Budget Reconciliation Act of 1989, is amended
--
(i) in subsection (d)(1), by striking `demonstration';
<
/ul> (ii) in subsection (g)(1)(A)(ii), by striking `rural referra
l center' and inserting `regional referral center'; and
(iii) in subsection (j), by inserting `and part C' after `th
is part'.
(C) Section 6003(g)(3)(C)(vii)(I) of the Omnibus Budget Reconcil
iation Act of 1989 is amended by striking `each place it appears'.
(D) Section 1835(c) of the Social Security Act (42 U.S.C. 1395n(
c)) is amended--
(i) in the first sentence, by striking `a hospital' and inse
rting `a hospital or a rural primary care hospital';
(ii) in the second sentence, by striking `1833(a)(2)' and in
serting `1833(a)(2) (or, in the case of a rural primary care hospital, in accord
ance with section 1833(a)(6))'; and
(iii) by striking the third sentence.
(3) TECHNICAL CORRECTIONS RELATING TO OTHER PROVIDERS OF SERVICES-
(A) Section 1814(i)(1)(C)(i) (42 U.S.C. 1395f(i)(1)(C)(i)), as a
mended by section 6005(a)(2) of the Omnibus Budget Reconciliation Act of 1989, i
s amended by striking `during fiscal year 1990' and inserting `on or after Janua
ry 1, 1990, and on or before September 30, 1990,'.
(B) Section 6005(c) of the Omnibus Budget Reconciliation Act of
1989 is amended by striking `subsection (a)' and inserting `subsections (a) and
(b)'.
(C) Section 1818A(d)(1) (42 U.S.C. 1395i-2a(d)(1)), as inserted
by section 6012(a)(2) of the Omnibus Budget Reconciliation Act of 1989, is amend
ed--
(i) in subparagraph (A), by inserting `for enrollment under
this section' after `Premiums', and
(ii) by striking subparagraph (C).
(D) Section 1818(g)(2)(B) (42 U.S.C. 1395i-2(g)(2)(B)), as added
by section 6013(a) of the Omnibus Budget Reconciliation Act of 1989, is amended
by striking `subsection (c)' and inserting `subsection (c)(6)'.
(F) Section 1819(f)(2)(A)(ii) (42 U.S.C. 1395i-3(f)(2)(A)(ii)) i
s amended by striking `and' at the end.
(G) Section 1866(a)(1)(F) (42 U.S.C. 1395cc(a)(1)(F) is amended-
-
(i) in clause (i), by striking the comma at the end and inse
rting `),', and
(ii) in clause (ii), by striking `(4)(A)' and inserting `(3)
(A)' and by striking the semicolon at the end and inserting a comma.
PART 2--PROVISIONS RELATING TO PART B
Subpart A--Payment for Physicians' Services
SEC. 4101. CERTAIN OVERVALUED PROCEDURES.
(a) PREVIOUSLY IDENTIFIED PROCEDURES- Section 1842(b)(14) (42 U.S.C. 139
5u(b)(14)) is amended--
(1) by inserting `(i)' after `(14)(A)'; and
(2) by adding at the end of subparagraph (A) the following new claus
e:
`(ii) In determining the reasonable charge for a physicians' service spe
cified in subparagraph (C)(i) and furnished during 1991, the prevailing charge f
or such service shall be the prevailing charge otherwise recognized for such ser
vice for the period during 1990 beginning on April 1, reduced by the same amount
as the amount of the reduction effected under this paragraph (as amended by the
Omnibus Budget Reconciliation Act of 1990) for such service during such period.
'.
(b) UNSURVEYED SURGICAL AND TECHNICAL PROCEDURES- (1) Section 1842(b) (4
2 U.S.C. 1395u(b)) is amended by adding at the end the following new paragraph:<
/ul>
`(16)(A) In determining the reasonable charge for all physicians' servic
es other than physicians' services specified in subparagraph (B) furnished durin
g 1991, the prevailing charge for a locality shall be 6.5 percent below the prev
ailing charges used in the locality under this part in 1990 after March 31.
`(B) For purposes of subparagraph (A), the physicians' services specifie
d in this subparagraph are as follows:
`(i) Radiology, anesthesia and physician pathology services, the tec
hnical components of diagnostic tests specified in paragraph (17) and physicians
' services specified in paragraph (14)(C)(i).
`(ii) Primary care services specified in subsection (i)(4), hospital
inpatient medical services, consultations, other visits, preventive medicine vi
sits, psychiatric services, emergency care facility services, and critical care
services.
`(iii) Partial, simple and subcutaneous mastectomy; tendon sheath in
jections; small joint arthrocentesis; femoral fracture treatments; trochanteric
fracture treatments; endotracheal intubation; thoracentesis; thoracostomy; lobec
tomy; aneurysm repair; enterectomy; colectomy; cholecystectomy; cystourethroscop
y; transurethral fulguration; transurerethral resection; sacral laminectomy; tym
panoplasty with mastoidectomy; and ophthalmoscopy.'.
(2) In applying section 1842(b)(16) of the Social Security Act:
(A) The codes for the procedures specified in clause (ii) are as fol
lows: Hospital inpatient medical services (HCPCS codes 90200 through 90292), con
sultations (HCPCS codes 90600 through 90654), other visits (HCPCS code 90699), p
reventive medicine visits (HCPCS codes 90750 through 90764), psychiatric service
s (HCPCS codes 90801 through 90862), emergency care facility services (HCPCS cod
es 99062 through 99065), and critical care services (HCPCS codes 99160 through 9
9174).
(B) The codes for the procedures specified in clause (iii) are as fo
llows: Partial, simple and subcutaneous mastectomy (HCPCS codes 19160 and 19162)
; tendon sheath injections and small joint arthrocentesis (HCPCS codes 20550, 20
600, 20605, and 20610); femoral fracture and trochanteric fracture treatments (H
CPCS codes 27230, 27232, 27234, 27238, 27240, 27242, 27246, and 27248); endotrac
heal intubation (HCPCS code 31500); thoracentesis (HCPCS code 32000); thoracosto
my (HCPCS codes 32020, 32035, and 32036); aneurysm repair (HCPCS codes 35111); c
ystourethroscopy (HCPCS code 52340); transurethral fulguration and resection (HC
PCS codes 52606 and 52620); tympanoplasty with mastoidectomy (HCPCS code 69645);
and ophthalmoscopy (HCPCS codes 92250, and 92260).'. 5
SEC. 4102. RADIOLOGY SERVICES.
(a) REDUCTION IN FEE SCHEDULE- Section 1834(b)(4) (42 U.S.C. 1395m(b)(4)
) is amended--
(1) by redesignating subparagraphs (D) and (E) as subparagraphs (E)
and (F), respectively, and
(2) by inserting after subparagraph (C) the following new subparagra
ph:
`(D) 1991 FEE SCHEDULES- For radiologist services (other than po
rtable X-ray services) furnished under this part during 1991, the conversion fac
tors used in a locality under this subsection shall be determined as follows:
`(i) NATIONAL WEIGHTED AVERAGE CONVERSION FACTOR- The Secret
ary shall estimate the national weighted average of the conversion factors used
under this subsection for services furnished during 1990 beginning on April 1, u
sing the best available data.
<
/ul> `(ii) REDUCED NATIONAL WEIGHTED AVERAGE- The national weight
ed average estimated under clause (i) shall be reduced by 13 percent.
<
/ul>
`(iii) COMPUTATION OF 1990 LOCALITY INDEX RELATIVE TO NATION
AL AVERAGE- The Secretary shall establish an index which reflects, for each loca
lity, the ratio of the conversion factor used in the locality under this subsect
ion to the national weighted average estimated under clause (i).
`(iv) LOCAL ADJUSTMENT- Subject to clause (vii), the convers
ion factor to be applied to the professional or technical component of a service
in a locality is the sum of 1/2 of the locally-adjusted amount determined und
er clause (v) and 1/2 of the GPCI-adjusted amount determined under clauses (vi
).
`(v) LOCALLY-ADJUSTED AMOUNT- For purposes of clause (iv), t
he locally adjusted amount determined under this clause is the product of (I) th
e national weighted average conversion factor computed under clause (ii), and (I
I) the index value established under clause (iii) for the locality.
`(vi) GPCI-ADJUSTED AMOUNT- For purposes of clause (iv), the
GPCI-adjusted amount determined under this clause is the sum of--
`(I) the product of (a) the portion of the reduced natio
nal weighted average conversion factor computed under clause (ii) which is attri
butable to physician work and (b) the geographic work index value for the locali
ty (specified in Addendum C to the Model Fee Schedule for Physician Services (pu
blished on September 4, 1990, 55 Federal Register pp. 36238-36243)); and
`(II) the product of (a) the remaining portion of the re
duced national weighted average conversion factor computed under clause (ii), an
d (b) the geographic practice cost index value specified in section 1842(b)(14)(
C)(iv) for the locality.
In applying this clause with respect to the professional comp
onent of a service, 80 percent of the conversion factor shall be considered to b
e attributable to physician work and with respect to the technical component of
the service, 0 percent shall be considered to be attributable to physician work.
`(vii) LIMITS ON CONVERSION FACTOR- The conversion factor to
be applied to a locality under this subparagraph to the professional or technic
al component of a service shall not be more than 9.5 percent below the conversio
n factor applied in the locality under subparagraph (C) to such component, but i
n no case shall the conversion factor be less than 60 percent of the national we
ighted average of the conversion factors (computed under clause (i)).'.
(b) SPECIAL RULE FOR TRANSITION FOR RADIOLOGY SERVICES- Section 1848(a)(
2)(C) (42 U.S.C. 1395w-4(a)(2)(C)) is amended--
(1) by inserting `AND RADIOLOGY' after `SPECIAL RULE FOR ANESTHESIA'
, and
(2) by adding at the end the following: `With respect to radiology s
ervices, `109 percent' and `9 percent' shall be substituted for `115 percent' an
d `15 percent', respectively, in subparagraph (A)(ii).
(c) REDUCTION IN PREVAILING CHARGE LEVEL FOR OTHER RADIOLOGY SERVICES-
(1) IN GENERAL- In applying part B of title XVIII of the Social Secu
rity Act, the prevailing charge for physicians' services, furnished during 1991,
which are radiology services may not exceed the fee schedule amount established
under section 1834(b) of such Act with respect to such services.
(2) EXCEPTION- Paragraph (1) shall not apply to radiology services w
hich are subject to section 6105(b) of the Omnibus Budget Reconciliation Act of
1989.
(d) REDUCTION IN PAYMENTS FOR TECHNICAL COMPONENTS OF CERTAIN SCANNING S
ERVICES- Section 1834(b)(4) (42 U.S.C. 1395m(b)(4)) is amended by inserting afte
r subparagraph (D) the following new paragraph:
`(E) In the case of the technical components of magnetic resonan
ce imaging (MRI) services and computer assisted tomography (CAT) services furnis
hed after December 31, 1990, the amount otherwise payable shall be reduced by 10
percent.'.
(e) LIMITATION ON ADJUSTMENTS- For radiologist services furnished during
1991 for which payment is made under section 1834(b) of the Social Security Act
--
(1) a carrier may not make any adjustment, under section 1842(b)(3)(
B) of such Act, in the payment amount for the service under section 1834(b) on t
he basis that the payment amount is higher than the charge applicable, for a com
parable service and under comparable circumstances, to the policyholders and sub
scribers of the carrier,
(2) no payment adjustment may be made under section 1842(b)(8) of su
ch Act, and
(3) section 1842(b)(9) of such Act shall not apply.
(f) USE OF LOCALITIES- Section 1834(b)(1)(B) (42 U.S.C. 1395m(b)(1)(B))
is amended by inserting `locality,' after `statewide,'.
(g) TREATMENT OF NUCLEAR MEDICINE PHYSICIANS-
(1) CONTINUATION OF SPECIAL RULE- Section 6105(b) of the Omnibus Bud
get Reconciliation Act of 1989 is amended by striking all that follows `Social S
ecurity Act' the second place it appears and inserting the following: `beginning
April 1, 1990, and ending December 31, 1991, there shall be substituted for the
fee schedule otherwise applicable a fee schedule based 1/3 on the fee schedul
e computed under such section (without regard to this subsection) and 2/3 on 1
01 percent of the 1988 prevailing charge for such services.'.
(2) ADJUSTED HISTORICAL PAYMENT BASIS- Section 1848(a)(2)(D) (42 U.S
.C. 1395w-4(a)(2)(D)) is amended--
(A) in clause (ii) by inserting `, but excluding nuclear medicin
e services that are subject to section 6105(b) of the Omnibus Budget Reconciliat
ion Act of 1989' after `section 1834(b)(6))', and
(B) by adding at the end the following:
`(iii) NUCLEAR MEDICINE SERVICES- In applying clause (i) in
the case of physicians' services which are nuclear medicine services that are su
bject to section 6105(b) of the Omnibus Budget Reconciliation Act of 1989, there
shall be substituted for the weighted average prevailing charge the amount prov
ided under such section.'.
(h) EXTENSION OF SPLIT BILLING RULE FOR INTERVENTIONAL RADIOLOGISTS- Sec
tion 6105(c) of the Omnibus Budget Reconciliation Act of 1989 is amended by inse
rting `or 1991' after `1990' each place it appears.
(i) EFFECTIVE DATES-
(1) Except as otherwise provided, the amendments made by this sectio
n shall apply to services furnished on or after January 1, 1991.
(2) The amendment made by subsection (f) shall be effective as if in
cluded in the enactment of the Omnibus Budget Reconciliation Act of 1987.
SEC. 4103. ANESTHESIA SERVICES.
(a) REDUCTION IN FEE SCHEDULE- Section 1842(q)(1) (42 U.S.C. 1395u(q)(1)
) is amended--
(1) by inserting `(A)' after `(q)(1)', and
(2) by adding at the end the following new subparagraph:
`(B) For physician anesthesia services furnished under this part during
1991, the prevailing charge conversion factor used in a locality under this subs
ection shall be determined as follows:
`(i) The Secretary shall estimate the national weighted average of t
he prevailing charge conversion factors used under this subsection for services
furnished during 1990 after March 31, using the best available data.
`(ii) The national weighted average estimated under clause (i) shall
be reduced by 7 percent.
`(iii) Subject to clause (iv), the prevailing charge conversion fact
or to be applied in a locality is the sum of--
`(I) the product of (a) the portion of the reduced national weig
hted average prevailing charge conversion factor computed under clause (ii) whic
h is attributable to physician work and (b) the geographic work index value for
the locality (specified in Addendum C to the Model Fee Schedule for Physician Se
rvices (published on September 4, 1990, 55 Federal Register pp. 36238-36243)); a
nd
`(II) the product of (a) the remaining portion of the reduced na
tional weighted average prevailing charge conversion factor computed under claus
e (ii) and (b) the geographic practice cost index value specified in section 184
2(b)(14)(C)(iv) for the locality.
In applying this clause, 70 percent of the prevailing charge conversi
on factor shall be considered to be attributable to physician work.
`(iv) The prevailing charge conversion factor to be applied to a loc
ality under this subparagraph shall not be reduced by more than 15 percent below
the prevailing charge conversion factor applied in the locality for the period
during 1990 after March 31, but in no case shall the prevailing charge conversio
n factor be less than 60 percent of the national weighted average of the prevail
ing charge conversion factors (computed under clause (i)).'.
(b) EXTENSION OF REDUCTION FOR SUPERVISION OF CONCURRENT SERVICES- Secti
on 1842(b)(13) (42 U.S.C. 1395u(b)(13)) is amended by striking `1991' each place
it appears and inserting `1996'.
SEC. 4104. PHYSICIAN PATHOLOGY SERVICES.
(a) REDUCTION IN PAYMENTS FOR PHYSICIAN PATHOLOGY SERVICES- Subsection (
f) of section 1834 (42 U.S.C. 1395m) is amended to read as follows:
`(f) REDUCTION IN PAYMENTS FOR PHYSICIAN PATHOLOGY SERVICES DURING FISCA
L YEAR 1991-
`(1) IN GENERAL- For physician pathology services furnished under th
is part during 1991, the prevailing charges used in a locality under this part s
hall be 7 percent below the prevailing charges used in the locality under this p
art in 1990 after March 31.
`(2) LIMITATION- The prevailing charge for the technical and profess
ional components of an physician pathology service furnished by a physician thro
ugh an independent laboratory shall not be reduced pursuant to paragraph (1) to
the extent that such reduction would reduce such prevailing charge below 115 per
cent of the prevailing charge for the professional component of such service whe
n furnished by a hospital-based physician in the same locality. For purposes of
the preceding sentence, an independent laboratory is a laboratory that is indepe
ndent of a hospital and separate from the attending or consulting physicians' of
fice.'.
(b) CONFORMING AMENDMENTS-
(1) Section 1833(a)(1)(J) of such Act (42 U.S.C. 1395l(a)(1)) is ame
nded by striking `or physician pathology services' and by striking `or section 1
834(f), respectively'.
(2) Section 1848(a)(1) of such Act (42 U.S.C. 1395w-4(a)(1)) is amen
ded by striking `or 1834(f)'.
(3) Section 4050 of the Omnibus Budget Reconciliation Act of 1987 is
repealed.
(c) ANCILLARY POLICY- The Secretary of Health and Human Services, in est
ablishing ancillary policies under section 1848(c)(3) of the Social Security Act
, shall consider an appropriate adjustment to reflect the technical component of
furnishing physician pathology services through a laboratory that is independen
t of a hospital and separate from an attending or consulting physician's office.
(d) EFFECTIVE DATE- The amendments made by this section shall apply to s
ervices furnished on or after January 1, 1991.
SEC. 4105. UPDATE FOR PHYSICIANS' SERVICES.
(a) PERCENTAGE INCREASE IN MEI FOR 1991-
(1) IN GENERAL- Section 1842(b)(4)(E) (42 U.S.C. 1395u(b)(4)(E)) is
amended by adding at the end the following new clause:
`(v) For purposes of this part for items and services furnished in 1991,
the percentage increase in the MEI is--
`(I) 0 percent for services (other than primary care services), and<
/ul>
`(II) 2 percent for primary care services (as defined in subsection
(i)(4)).'.
(2) CUSTOMARY CHARGES FOR 1991- Section 1842(b)(4)(B) (42 U.S.C. 139
5u(b)(4)(B)) is amended by adding at the end the following new clause:
`(iv) In determining the reasonable charge under paragraph (3) for physi
cians' services (other than primary care services, as defined in subsection (i)(
4)) furnished during 1991, the customary charges shall be the same customary cha
rges as were recognized under this section for the 9-month period beginning Apri
l 1, 1990. In a case in which subparagraph (F) applies (relating to new physicia
ns) so as to limit the customary charges of a physician during 1990 to a percent
of prevailing charges, the previous sentence shall not prevent such limit on cu
stomary charges under such subparagraph from increasing in 1991 to a higher perc
ent of such prevailing charges.'.
(3) CHANGE IN PAYMENT FOR YEARS AFTER 1991- Section 1848 of such Act
(42 U.S.C. 1395w-4) is amended in subsection (d)(3)(A)--
(A) in clause (i), by inserting `except as provided in clause (i
ii),' after `subparagraph (B),', and
(B) by adding at the end the following new clause:
`(iii) ADJUSTMENT IN PERCENTAGE INCREASE- In applying clause
(i) for services furnished in 1992 for which the appropriate update index is th
e index described in clause (ii)(I), the percentage increase in the appropriate
update index shall be reduced by 0.4 percentage points.'.
(b) INCREASE IN PREVAILING CHARGE FLOOR FOR PRIMARY CARE SERVICES-
(1) IN GENERAL- Section 1842(b)(4)(A)(vi) of such Act (42 U.S.C. 139
5u(b)(4)(A)(vi)) is amended by striking `50 percent' and inserting `60 percent'.
(2) BUDGET NEUTRAL IMPLEMENTATION- In computing the conversion facto
r under section 1848(d)(1)(B) of the Social Security Act for 1992, the Secretary
of Health and Human Services shall determine the estimated aggregate amount of
payments under part B of title XVIII of such Act for physicians' services in 199
1 assuming that the amendments made by this subsection did not apply.
(3) EFFECTIVE DATE- The amendments made by paragraphs (1) and (2) sh
all apply to services furnished on or after January 1, 1991.
(c) VOLUME PERFORMANCE STANDARD FOR FISCAL YEAR 1991- Section 1848(f) (4
2 U.S.C. 1395w-4(f)) is amended--
(1) in paragraph (1)(C), by striking `1990' the first place it appea
rs and inserting `1991', and
(2) by adding at the end of paragraph (2) the following:
`(C) Notwithstanding subparagraph (A), the performance standard
rate of increase for a category of physicians' services for fiscal year 1991 sha
ll be the sum of--
`(i) the Secretary's estimate of the percentage by which act
ual expenditures for the category of physicians' services under this part for fi
scal year 1991 exceed actual expenditures for such category of services in fisca
l year 1990 (determined without regard to the amendments made by the Omnibus Bud
get Reconciliation Act of 1990), and
`(ii) the Secretary's estimate of the percentage increase or
decrease in expenditures for the category of services in fiscal year 1991 (comp
ared with fiscal year 1990) that will result from changes in law and regulations
(including the Omnibus Budget Reconciliation Act of 1990), reduced by 2 percent
age points.'.
(d) Not later than 45 days after the date of the enactment of this Act,
the Secretary of Health and Human Services, based on the most recent data availa
ble, shall estimate and publish in the Federal Register the performance standard
rates of increase specified in section 1848(f)(2)(C) of the Social Security Act
for fiscal year 1991.
(a) EXTENSION OF CUSTOMARY CHARGE LIMIT AND INCLUSION OF HEALTH CARE PRA
CTITIONERS-
(1) IN GENERAL- Subparagraph (F) of section 1842(b)(4) (42 U.S.C. 13
95u(b)(4)) is amended to read as follows:
`(F)(i) In the case of physicians' services and professional services of
a health care practitioner (other than primary care services and other than ser
vices furnished in a rural area (as defined in section 1886(d)(2)(D)) that is de
signated, under section 332(a)(1)(A) of the Public Health Service Act, as a heal
th manpower shortage area) furnished during the physician's or practitioner's fi
rst through fourth years of practice (if payment for those services is made sepa
rately under this part and on other than a cost-related basis), the prevailing c
harge or fee schedule amount to be applied under this part shall be 80 percent f
or the first year of practice, 85 percent for the second year of practice, 90 pe
rcent for the third year of practice, and 95 percent for the fourth year of prac
tice, of the prevailing charge or fee schedule amount for that service under the
other provisions of this part.
`(ii) For purposes of clause (i):
`(I) The term `health care practitioner' means a physician assistant
, certified nurse-midwife, qualified psychologist, nurse practitioner, clinical
social worker, physical therapist, occupational therapist, respiratory therapist
, certified registered nurse anesthetist, or any other practitioner as may be sp
ecified by the Secretary.
`(II) The term `first year of practice' means, with respect to a phy
sician or practitioner, the first calendar year during the first 6 months of whi
ch the physician or practitioner furnishes professional services for which payme
nt is made under this part, and includes any period before such year.
`(III) The terms `second year of practice', `third year of practice'
, and `fourth year of practice' mean the second, third, and fourth calendar year
s, respectively, following the first year of practice.'.
(2) CONFORMING AMENDMENTS- Section 6108(a)(2)(A) of the Omnibus Budg
et Reconciliation Act of 1989 is amended--
(A) by inserting `or 1991' after `1990', and
(B) by inserting `or 1990' after `1989'.
(b) APPLICATION UNDER FEE SCHEDULE-
(1) IN GENERAL- Section 1848(a) (42 U.S.C. 1395w-4(a)) is amended by
adding at the end the following new paragraph:
`(4) TREATMENT OF NEW PHYSICIANS- In the case of physicians' service
s furnished by a physician before the end of the physician's first full calendar
year of furnishing services for which payment may be made under this part, and
during each of the 3 succeeding years, the fee schedule amount to be applied sha
ll be 80 percent, 85 percent, 90 percent, and 95 percent, respectively, of the f
ee schedule amount applicable to physicians who are not subject to this paragrap
h. The preceding sentence shall not apply to primary care services or services f
urnished in a rural area (as defined in section 1886(d)(2)) that is designated u
nder section 322(a)(1)(A) of the Public Health Service Act as a health manpower
shortage area.'.
(2) CONFORMING AMENDMENTS- Section 1842(b)(4)(F), as amended by subs
ection (a), is amended--
(A) in clause (i), by striking `physicians' services and',
<
/ul> (B) in clause (i), by striking `physician's or', and
(C) in clause (ii)(II), by striking `physician or' each place it
appears.
(c) CONFORMING ADJUSTMENT IN CONVERSION FACTOR COMPUTATION- In computing
the conversion factor under section 1848(d)(1)(B) for 1992, the Secretary of He
alth and Human Services shall determine the estimated aggregate amount of paymen
ts under part B for physicians' services in 1991 assuming that the amendments ma
de by this section (notwithstanding subsection (d)) applied to all services furn
ished during such year.
(d) EFFECTIVE DATES-
(1) The amendments made by subsection (a) apply to services furnishe
d after 1990, except that--
(A) the provisions concerning the third and fourth years of prac
tice apply only to physicians' services furnished after 1990 and 1991, respectiv
ely, and
(B) the provisions concerning the second, third, and fourth year
s of practice apply only to services of a health care practitioner furnished aft
er 1991, 1992, and 1993, respectively.
(2) The amendments made by subsection (b) shall apply to services fu
rnished after 1991.
SEC. 4107. ASSISTANTS AT SURGERY.
(a) PHYSICIANS AS ASSISTANTS-AT-SURGERY-
(1) IN GENERAL- Section 1848(i) (42 U.S.C. 1395w-4(i)) is amended by
adding at the end the following:
`(2) ASSISTANTS-AT-SURGERY-
`(A) IN GENERAL- Subject to subparagraph (B), in the case of a s
urgical service furnished by a physician, if payment is made separately under th
is part for the services of a physician serving as an assistant-at-surgery, the
fee schedule amount shall not exceed 16 percent of the fee schedule amount other
wise determined under this section for the global surgical service involved.
`(B) DENIAL OF PAYMENT IN CERTAIN CASES- If the Secretary determ
ines, based on the most recent data available, that for a surgical procedure (or
class of surgical procedures) the national average percentage of such procedure
performed under this part which involve the use of a physician as an assistant
at surgery is less than 5 percent, no payment may be made under this part for se
rvices of an assistant at surgery involved in the procedure.'.
(2) APPLICATION IN 1991- Section 1848(i)(2) of the Social Security A
ct, as added by the amendment made by paragraph (1), shall apply to services fur
nished in 1991 in the same manner as it applies to services furnished after 1991
. In applying the previous sentence, the prevailing charge shall be substituted
for the fee schedule amount.
(b) CONFORMING AMENDMENT- Section 1862(a)(15) of such Act (42 U.S.C. 139
5y(a)(15)) is amended--
(1) by inserting `(A)' after `(15)',
(2) by striking `; or' at the end and inserting `, or', and
(3) by adding at the end the following new subparagraph:
`(B) which are for services of an assistant at surgery to which sect
ion 1848(i)(2)(B) applies; or'.
(c) EFFECTIVE DATE- The amendment made by subsection shall apply with re
spect to services furnished on or after January 1, 1992.
SEC. 4108. TECHNICAL COMPONENTS OF CERTAIN DIAGNOSTIC TESTS.
(a) IN GENERAL- Section 1842(b) of the Social Security Act (42 U.S.C. 13
95u(b)), as amended by section 4101, is further amended by adding at the end the
following new paragraph:
`(18) With respect to payment under this part for the technical (as dist
inct from professional) component of diagnostic tests (other than clinical diagn
ostic laboratory tests and radiology services, including portable x-ray services
) which the Secretary shall designate (based on their high volume of expenditure
s under this part), the reasonable charge for such technical component (includin
g the applicable portion of a global service) may not exceed the national median
of such charges for all localities, as estimated by the Secretary using the bes
t available data.'.
(b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to
tests and services furnished on or after January 1, 1991.
SEC. 4109. INTERPRETATION OF ELECTROCARDIOGRAMS.
(a) IN GENERAL- Section 1848(b) of the Social Security Act (42 U.S.C. 13
95w-4(b)) is amended by adding at the end the following new paragraph:
`(3) TREATMENT OF INTERPRETATION OF ELECTROCARDIOGRAMS- If payment i
s made under this part for a visit to a physician or consultation with a physici
an and, as part of or in conjunction with the visit or consultation there is an
electrocardiogram performed or ordered to be performed, no payment may be made u
nder this part with respect to the interpretation of the electrocardiogram and n
o physician may bill an individual enrolled under this part separately for such
an interpretation. If a physician knowingly and willfully bills one or more indi
viduals in violation of the previous sentence, the Secretary may apply sanctions
against the physician or entity in accordance with section 1842(j)(2).'.
(b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to
services furnished on or after January 1, 1992. In applying section 1848(d)(1)(B
) of the Social Security Act (in computing the initial budget-neutral conversion
factor for 1991), the Secretary shall compute such factor assuming that section
1848(b)(3) of such Act (as added by the amendment made by subsection (a)) had a
pplied to physicians' services furnished during 1991.
SEC. 4110. RECIPROCAL BILLING ARRANGEMENTS.
(a) IN GENERAL- The first sentence of section 1842(b)(6) of the Social S
ecurity Act (42 U.S.C. 1395u(b)(6)) is amended--
(1) by striking `and' before `(C)', and
(2) by inserting before the period at the end the following: `, and
(D) payment may be made to a physician who arranges for visit services (includin
g emergency visits and related services) to be provided to an individual by a se
cond physician on an occasional, reciprocal basis if (i) the first physician is
unavailable to provide the visit services, (ii) the individual has arranged or s
eeks to receive the visit services from the first physician, (iii) the claim for
m submitted to the carrier includes the second physician's unique identifier (pr
ovided under the system established under subsection (r)) and indicates that the
claim is for such a `covered visit service (and related services)', and (iv) th
e visit services are not provided by the second physician over a continuous peri
od of longer than 60 days'.
(b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to
services furnished on or after the first day of the first month beginning more t
han 60 days after the date of the enactment of this Act.
SEC. 4111. STUDY OF PREPAYMENT MEDICAL REVIEW SCREENS.
(a) IN GENERAL- The Secretary of Health and Human Services shall conduct
a study of the effect of the release of medicare prepayment medical review scre
en parameters on physician billings for the services to which the parameters app
ly.
(b) LIMITATIONS- The study shall be based upon the release of the screen
parameters at a minimum of six carriers.
(c) REPORT- The Secretary shall report the results of the study to the C
ommittees on Ways and Means and Energy and Commerce of the House of Representati
ves and the Committee on Finance of the Senate not later than October 1, 1992.
SEC. 4112. PRACTICING PHYSICIANS ADVISORY COUNCIL.
Title XVIII of the Social Security Act is amended by inserting after sec
tion 1867 the following new section:
`PRACTICING PHYSICIANS ADVISORY COUNCIL
`SEC. 1868. (a) The Secretary shall appoint, based upon nominations subm
itted by medical organizations representing physicians, a Practicing Physicians
Advisory Council (in this section referred to as the `Council') to be composed o
f 15 physicians, each of whom has submitted at least 250 claims for physicians'
services under this title in the previous year. At least 11 of the members of th
e Council shall be physicians described in section 1861(r)(1) and the members of
the Council shall include both participating and nonparticipating physicians an
d physicians practicing in rural areas and underserved urban areas.
`(b) The Council shall meet once during each calendar quarter to discuss
certain proposed changes in regulations and carrier manual instructions related
to physician services identified by the Secretary. To the extent feasible and c
onsistent with statutory deadlines, such consultation shall occur before the pub
lication of such proposed changes.
`(c) Members of the Council shall be entitled to receive reimbursement o
f expenses and per diem in lieu of subsistence in the same manner as other membe
rs of advisory councils appointed by the Secretary are provided such reimburseme
nt and per diem under this title.'.
The Secretary of Health and Human Services shall carry out a study of th
e effects of permitting the aggregation of claims that involve common issues of
law and fact furnished in the same carrier area to two or more individuals by tw
o or more physicians within the same 12-month period for purposes of appeals pro
vided for under section 1869(b)(2). Such study shall be conducted in at least fo
ur carrier areas. The Secretary shall report on the results of such study and an
y recommendations to the Committee on Finance of the Senate and the Committees o
n Energy and Commerce and Ways and Means of the House of Representatives by Dece
mber 31, 1992.
Not later than 180 days after the date of the enactment of this Act, the
Secretary of Health and Human Services shall issue guidelines to assure a unifo
rm level of review of physician visits to patients of a rehabilitation hospital
or unit patients after the medical review screen parameter established under sec
tion 4085(h) of the Omnibus Budget Reconciliation Act of 1987 has been exceeded.
(a) STUDY- The Secretary of Health and Human Services shall conduct a st
udy of--
(1) factors that may explain geographic variations in Medicare reaso
nable charges for physicians' services that are not attributable to variations i
n physician practice costs (including the supply of physicians in an area and ar
ea variations in the mix of services furnished);
(2) the extent to which the geographic practice cost indices applied
under the fee schedule established under section 1848 of the Social Security Ac
t accurately reflect variations in practice costs and malpractice costs (and alt
ernative sources of information upon which to base such indices);
(3) the impact of the transition to a national, resource-based fee s
chedule for physicians' services under Medicare on access to physicians' service
s in areas that experience a disproportionately large reduction in payments for
physicians' services under the fee schedule by reason of such variations; and
(4) appropriate adjustments or modifications in the transition to, o
r manner of determining payments under, the fee schedule established under secti
on 1848 of the Social Security Act, to compensate for such variations and ensure
continued access to physicians' services for Medicare beneficiaries in such are
as.
(b) REPORT- By not later than July 1, 1992, the Secretary shall submit t
o Congress a report on the study conducted under subsection (a).
SEC. 4116. LIMITATION ON BENEFICIARY LIABILITY.
Section 1848(g)(2)(A) (42 U.S.C. 1395w-4(g)(2)(A)) is amended by adding
at the end thereof the following:
`In the case of evaluation and management services (as specified in secti
on 1842(b)(16)(B)(ii)), the preceding sentence shall be applied by substituting
`40 percent' for `25 percent'.'.
(a) IN GENERAL- Notwithstanding section 1848(j)(2) of the Social Securit
y Act (42 U.S.C. 1395w-4(j)(2)), in the case of the States of Nebraska and Oklah
oma, if the respective State meets the requirements specified in subsection (b)
on or before April 1, 1991, the Secretary of Health and Human Services (Secretar
y) shall treat the State as a single fee schedule area for purposes of determini
ng--
(1) the adjusted historical payment basis (as defined in section 184
8(a)(2)(D) of such Act (42 U.S.C. 1395w-4(a)(2)(D))), and
(2) the fee schedule amount (as referred to in section 1848(a) (42 U
.S.C. 1395w-4(a)) of such Act),
for physicians' services (as defined in section 1848(j)(3) of such Act (4
2 U.S.C. 1395w-4(j)(3))) furnished on or after January 1, 1992.
(b) REQUIREMENTS- The requirements specified in this subsection are that
(on or before April 1, 1991) there are written expressions of support for treat
ment of the State as a single fee schedule area (on a budget-neutral basis) from
--
(1) each member of the congressional delegation from the State, and<
/ul>
(2) organizations representing urban and rural physicians in the Sta
te.
(c) BUDGET NEUTRALITY- Notwithstanding section 1842(b)(3) of such Act (4
2 U.S.C. 1395u(b)(3)), the Secretary shall provide for treatment of a State as a
single fee schedule area (as described in subsection (a)) in a manner that ensu
res that total payments for physicians' services (as so defined) furnished by ph
ysicians in the State during 1992 are not greater or less than total payments fo
r such services would have been but for such treatment.
(d) CONSTRUCTION- Nothing in this section shall be construed as limiting
the availability (to the Secretary, the appropriate agency or organization with
a contract under section 1842, or physicians in a State) of otherwise applicabl
e administrative procedures for modifying the fee schedule area or areas in the
State after implementation of subsection (a) with respect to the State.
SEC. 4118. TECHNICAL CORRECTIONS.
(a) OVERVALUED PROCEDURES-
(1) Section 1842(b)(14) of the Social Security Act (42 U.S.C. 1395u(
b)(14)) is amended--
(A) in subparagraph (B)(iii)(I), by striking `practice expense r
atio for the service (specified in table #1 in the Joint Explanatory Statement r
eferred to in subparagraph (C)(i))' and inserting `practice expense component (p
ercent), divided by 100, specified in appendix A (pages 187 through 194) of the
Report of the Medicare and Medicaid Health Budget Reconciliation Amendments of 1
989, prepared by the Subcommittee on Health and the Environment of the Committee
on Energy and Commerce, House of Representatives, (Committee Print 101-M, 101st
Congress, 1st Session) for the service';
(B) in subparagraph (B)(iii)(II), by striking `practice expense
ratio' and inserting `practice expense component (percent), divided by 100';
(C) in subparagraph (C)(i), by striking `physicians' services sp
ecified in Table #2 in the Joint Explanatory Statement of the Committee of Confe
rence submitted with the Conference Report to accompany H.R. 3299 (the `Omnibus
Budget Reconciliation Act of 1989'), 101st Congress,' and inserting `procedures
specified (by code and description) in the Overvalued Procedures List for Financ
e Committee, Revised September 20, 1989, prepared by the Physician Payment Revie
w Commission';
(D) in subparagraph (C)(iii), by striking `The `percent change'
specified in this clause, for a physicians' service specified in clause (i), is
the percent change specified for the service in table #2 in the Joint Explanator
y Statement' and inserting `The `percentage change' specified in this clause, fo
r a physicians' service specified in clause (i), is the percent difference (but
expressed as a positive number) specified for the service in the list'; and
(E) in subparagraph (C)(iv), by striking `such value specified f
or the locality in table #3 in the Joint Explanatory Statement referred to in cl
ause (i)' and inserting `the Geographic Overhead Costs Index specified for the l
ocality in table 1 of the September 1989 Supplement to the Geographic Medicare E
conomic Index: Alternative Approaches (prepared by the Urban Institute and the C
enter for Health Economics Research)'.
(2) Section 1842(b)(4)(E)(iv)(I) of such Act (42 U.S.C. 1395u(b)(4)(
E)(iv)(I)) is amended by striking `Table #2' and all that follows through `101st
Congress' and inserting `the list referred to in paragraph (14)(C)(i)'.
(3) The amendments made by paragraphs (1) and (2) apply to services
furnished after March 1990.
(b) MVPS AS MULTIPLICATIVE, NOT ADDITIVE- Section 1848(f)(2)(A) (42 U.S.
C. 1395w-4(f)(2)(A)) is amended--
(1) in the matter preceding clause (i) by striking `sum' and inserti
ng `product';
(2) in clauses (i) through (iv), by inserting `1 plus' before `the S
ecretary's' each place it appears, 6
(3) in clause (i), by inserting `(divided by 100)' after `percentage
increase', 7
(4) in clauses (ii) and (iv), by inserting `(divided by 100)' after
`decrease', 8
(5) in clause (iii), by inserting `(divided by 100)' after `percenta
ge growth', 9
(6) in the matter following clause (iv), by striking `reduced' and i
nserting `minus 1, multiplied by 100, and reduced'.
(c) PERIODIC REVIEW OF GEOGRAPHIC ADJUSTMENT FACTORS- Section 1848(e)(1)
of such Act is amended--
(1) in subparagraph (A), by striking `subparagraph (B)' and insertin
g `subparagraphs (B) and (C)', and
(2) by adding at the end the following new subparagraph:
`(C) PERIODIC REVIEW AND ADJUSTMENTS IN GEOGRAPHIC ADJUSTMENT FA
CTORS- The Secretary, not less often than every 3 years, shall review the indice
s established under subparagraph (A) and the geographic index values applied und
er this subsection for all fee schedule areas. Based on such review, the Secreta
ry may revise such index and adjust such index values, except that, if more than
1 year has elasped since the last previous adjustment, the adjustment to be app
lied in the first year of the next adjustment shall be 1/2 of the adjustment t
hat otherwise would be made.'.
(d) ELIMINATION OF RESTRICTION ON INCORPORATION OF TIME IN VISIT CODES-
Section 1848(c)(4) (42 U.S.C. 1395w-4(c)(4)) is amended by striking `only for se
rvices furnished on or after January 1, 1993'.
(e) TREATMENT OF PRICE INCREASE IN DETERMINING PERFORMANCE STANDARD RATE
S OF INCREASE- Section 1848(f)(2)(A)(iv) (42 U.S.C. 1395w-4(f)(2)(A)(iv)) is ame
nded by inserting `including changes in law and regulations affecting the percen
tage increase described in clause (i)' after `law or regulations'.
(f) MISCELLANEOUS FEE SCHEDULE CORRECTIONS-
(1) CHANGES IN SECTION 1848- Section 1848 of the Social Security Act
(42 U.S.C. 1395w-4) is amended--
(A) in subsection (c)(1)(B), by striking the last sentence;
(B) in subsections (c)(3)(C)(ii)(II) and (c)(3)(C)(iii)(II), by
striking `by' the first place it appears in each respective subsection, 10
<
/ul> (C) in subsection (c), by redesignating the second paragraph (3)
, and paragraphs (4) and (5), as paragraphs (4) through (6), respectively;
<
/ul> (D) in subsection (c)(4), as redesignated by subparagraph (C),is
amended by striking `subsection' and inserting `section';
(E) in subsection (d)(1)(A), by striking `subparagraph (C)' and
inserting `paragraph (3)';
(F) in subsection (d)(1)--
(i) in subparagraph (A)--
(I) by inserting `(or factors)' after `conversion factor
' each place it appears,
(II) by inserting `or updates' after `update', and
<
/ul> (III) by striking `subparagraph (C)' and inserting `para
graph (3)'; and
(ii) in subparagraph (C)--
(I) in clause (i), by striking `(or factors)', and
<
/ul> (II) in clause (ii), by inserting `the conversion factor
(or factors) which will apply to physicians' services for the following year an
d' before `the update (or updates)', and by striking `the following' and inserti
ng `such';
(G) in subsection (d)(2)(A), in the matter preceding clause (i),
by striking `services' the first place it appears and inserting `services (as d
efined in subsection (f)(5)(A))';
(H) in subsection (d)(2)(A)(ii)--
(i) by striking `(as defined in subsection (f)(5)(A))' a
nd inserting `and for the services involved', and
(ii) by striking `all such physicians' and inserting `su
ch'; and
(I) in the last sentence of subsection (d)(2)(A), by striking `p
roportion of HMO enrollees' and inserting `proportion of individuals who are enr
olled under this part who are HMO enrollees';
(J) in subsection (d)(2)(E)(i), by inserting `the' after `as set
forth in';
(K) in subsection (d)(2)(E)(ii)(I), by inserting `payments for'
after `under this part for';
(L) in subsection (d)(3)(B)--
(i) in clause (i)--
(I) by striking `update for' and inserting `update for a
category of physicians' services for'; and
(II) by striking `physicians' services (as defined in su
bsection (f)(5)(A))' and inserting `services in such category';
(ii) in clause (ii)--
(I) by inserting `more than' after `decrease of'; and
(II) in subclause (I), by striking `more than';
<
/ul>
(M) in paragraphs (1)(D)(i) and (2)(A)(i) of subsection (f), by
striking `calendar years' and inserting `portions of calendar years';
(N) in subsection (f)(2)(A)--
(i) by striking `each performance standard rate of increase'
and inserting `the performance standard rate of increase, for all physicians' s
ervices and for each category of physicians' services,',
(ii) in clause (i), by striking `physicians' services (as de
fined in subsection (f)(5)(A) 11
(iii) in clause (iii), by striking `physicians' services' an
d inserting `all physicians' services or of the category of physicians' services
, respectively,', and
(iv) in clause (iv), by striking `physicians' services (as d
efined in subsection (f)(5)(A))' and inserting `all physicians' services or of t
he category of physicians' services, respectively,';
(O) in subsection (f)(4)(A), by striking `paragraph (B)' and ins
erting `subparagraph (B)';
(P) in subsection (f)(4)(B), by striking `Congress specifically
approves the plan' and inserting `specifically approved by law';
(Q) in subparagraphs (A) and (B) of subsection (g)(2), by insert
ing `other than radiologist services subject to section 1834(b),' after `during
1991,' and after `during 1992,', respectively;
(R) in subsection (i)(1)(A), by striking `historical payment bas
is (as defined in subsection (a)(2)(C)(i))' and inserting `adjusted historical p
ayment basis (as defined in subsection (a)(2)(D)(i))'; and
(S) in subsection (j)(1), by striking `, and such other' and all
that follows through the period and inserting `(as defined by the Secretary) an
d all other physicians' services.'.
(2) MISCELLANEOUS-
(A) Effective as if included in the Omnibus Budget Reconciliatio
n Act of 1989, section 6102(e)(4) of such Act is amended by inserting `determine
d' after `prevailing charge rate'.
(B) Effective January 1, 1991, section 1842(b)(3)(G) of the Soci
al Security Act, as amended by section 6102(e)(2) of Omnibus Budget Reconciliati
on Act of 1989, is amended by striking `subsection (j)(1)(C)' and inserting `sec
tion 1848(g)(2)'.
(C) Section 1842(b)(12)(A)(ii)(II) of the Social Security Act, a
s amended by section 6102(e)(4) of the Omnibus Budget Reconciliation Act of 1989
, is amended by striking `, as the case may be'.
(D) Section 1833(a)(1)(H) of the Social Security Act, as amended
by section 6102(e)(5) of the Omnibus Budget Reconciliation Act of 1989, is amen
ded by striking `, as the case may be'.
(E) Section 6102(e)(11) of the Omnibus Budget Reconciliation Act
of 1989 is amended by inserting `of Health and Human Services' after `Secretary
'.
(F) Effective as if included in the enactment of the Omnibus Bud
get Reconciliation Act of 1989, section 922(d)(1) of the Public Health Service A
ct (42 U.S.C. 299c-1(d)(1)) is amended--
(i) by inserting `(other than of dissemination activities)'
after `evaluations', and
(ii) by inserting `research, demonstration projects, or eval
uations of' after `applications with respect to'.
(g) REPEAL OF REPORTS NO LONGER REQUIRED-
(1) Subsection (b) of section 4043 of the Omnibus Budget Reconciliat
ion Act of 1987 is repealed.
(2) Subsection (c) of section 4048 of such Act is repealed.
(3) Section 4049(b)(1) of such Act is amended by striking `, and sha
ll report' and all that follows up to the period at the end.
(4) Section 4056(a)(1) of such Act, as redesignated by section 411(f
)(14) of the Medicare Catastrophic Coverage Act of 1988, is amended by striking
the last sentence.
(5) Section 4056(b)(2) of such Act is amended by striking the second
sentence.
(h) ADJUSTMENT OF EFFECTIVE DATES- Effective as if included in the enact
ment of the Omnibus Budget Reconciliation Act of 1987--
(1) section 4048(b) of such Act is amended by striking `January 1, 1
989' and inserting `March 1, 1989', and
(2) section 4049(b)(2) of such Act is amended by striking `January 1
, 1989' and inserting `April 1, 1989'.
(i) TRANSFER OF PROVISION INTO TITLE XVIII-
(1) Section 1842 of the Social Security Act (42 U.S.C. 1395u) is ame
nded by adding at the end the following new subsection:
`(r) The Secretary shall establish a system which provides for a unique
identifier for each physician who furnishes services for which payment may be ma
de under this title.'.
(2) Section 9202 of the Consolidated Omnibus Budget Reconciliation A
ct of 1985 is amended by striking subsection (g).
(j) PPRC- (1) Section 1845 of such Act (42 U.S.C. 1395w-1) is amended--<
/ul>
(A) in subsection (a)(3), by striking `include physicians' and inser
ting `include (but need not be limited to) physicians';
(B) by striking subsection (b)(3);
(C) in subsection (b)(2)--
<
/ul>
(i) by striking `and' at the end of subparagraph (H),
(ii) by striking the period at the end of subparagraph (I) and i
nserting a semicolon,
(iii) by striking subparagraphs (A), (B), (C), and (F),
(iv) by redesignating subparagraphs (D), (E), (G), (H), and (I)
as subparagraphs (A), (B), (C), (D), and (E), and
(v) by adding at the end the following new subparagraphs:
`(F) make recommendations regarding major issues in the implementati
on of the resource-based relative value scale established under section 1848(c);
`(G) make recommendations regarding further development of the volum
e performance standards established under section 1848(f), including the develop
ment of State-based programs;
`(H) consider policies to provide payment incentives to increase pat
ient access to primary care and other physician services in large urban and rura
l areas, including policies regarding payments to physicians pursuant to title X
IX;
`(I) review and consider the number and practice specialties of phys
icians in training and payments under this title for graduate medical education
costs;
`(J) make recommendations regarding issues relating to utilization r
eview and quality of care, including the effectiveness of peer review procedures
and other quality assurance programs applicable to physicians and providers und
er this title and physician certification and licensing standards and procedures
;
`(K) make recommendations regarding options to help constrain the co
sts of health insurance to employers, including incentives under this title;
`(L) comment on the recommendations affecting physician payment unde
r the medicare program that are included in the budget submitted by the Presiden
t pursuant to section 1105 of title 31, United States Code; and
`(M) make recommendations regarding medical malpractice liability re
form and physician certification and licensing standards and procedures.'; and
(D) by striking subsection (e) and redesignating subsection (f) as s
ubsection (e).
(2) In section 1842(b)(2)(A) is amended by striking `section 1845(f)(2)'
and inserting `section 1845(e)(2)'.
(k) PROHIBITION OF CERTAIN ADJUSTMENTS- Section 1848(i) is amended by ad
ding at the end the following new paragraph:
`(3) NO COMPARABILITY ADJUSTMENT- For physicians' services for which
payment under this part is determined under this section--
`(A) a carrier may not make any adjustment in the payment amount
under section 1842(b)(3)(B) on the basis that the payment amount is higher than
the charge applicable, for a 12
`(B) no payment adjustment may be made under section 1842(b)(8),
and
`(C) section 1842(b)(9) shall not apply .'.
Subpart B--Provisions Relating to Other Items and Services
SEC. 4151. PAYMENTS FOR OUTPATIENT HOSPITAL SERVICES.
(a) REDUCTION IN PAYMENTS FOR CAPITAL-RELATED COSTS-
(1) IN GENERAL- Section 1861(v)(1)(S)(ii)(I) (42 U.S.C. 1395x(v)(1)(
S)(ii)(I)) is amended by inserting before the period at the end the following: `
, by 15 percent for payments attributable to portions of cost reporting periods
occurring during fiscal year 1991, and by 10 percent for payments attributable t
o portions of cost reporting periods occurring during fiscal year 1992, 1993, 19
94, or 1995'.
(2) EXEMPTION FOR RURAL PRIMARY CARE HOSPITALS- Section 1861(v)(1)(S
)(ii)(II) (42 U.S.C. 1395x(v)(1)(S)(ii)(II)) is amended by striking `1886(d)(5)(
D)(iii)).' and inserting `1886(d)(5)(D)(iii) or a rural primary care hospital (a
s defined in section 1861(mm)(1)).'
(b) REDUCTION IN REASONABLE COSTS OF HOSPITAL OUTPATIENT SERVICES-
(1) IN GENERAL- Section 1861(v)(1)(S)(ii) (42 U.S.C. 1395x(v)(1)(S)(
ii)) is amended--
(A) in subclause (II)--
(i) by striking `Subclause (I)' and inserting `Subclauses (I
) and (II)', and
(ii) by striking `capital-related costs of any hospital' and
inserting `costs of hospital outpatient services provided by any hospital';
(B) in subclause (III)--
(i) by striking `subclause (I)' and inserting `subclauses (I
) and (II)', and
(ii) by striking `capital-related' and inserting `the';
(C) by redesignating subclauses (II) and (III) as subclauses (II
I) and (IV); and
(D) by inserting after subclause (I) the following new subclause
:
`(II) The Secretary shall reduce the reasonable cost of outpatient hospi
tal services (other than the capital-related costs of such services) otherwise d
etermined pursuant to section 1833(a)(2)(B)(i)(I) by 5.8 percent for payments at
tributable to portions of cost reporting periods occurring during fiscal years 1
991, 1992, 1993, 1994, or 1995.'.
(2) PROSPECTIVE PAYMENT SYSTEM FOR HOSPITAL OUTPATIENT SERVICES-
(A) DEVELOPMENT OF PROPOSAL- The Secretary of Health and Human S
ervices shall develop a proposal to replace the current system under which payme
nt is made for hospital outpatient services under title XVIII of the Social Secu
rity Act with a system under which such payments would be made on the basis of p
rospectively determined rates. In developing any proposal under this paragraph,
the Secretary shall consider--
(i) the need to provide for appropriate limits on increases
in expenditures under the medicare program;
(ii) the need to adjust prospectively determined rates to ac
count for changes in a hospital's outpatient case mix, severity of illness of pa
tients, volume of cases, and the development of new technologies and standards o
f medical practice;
(iii) providing hospitals with incentives to control the cos
ts of providing outpatient services;
(iv) the feasibility and appropriateness of including paymen
t for outpatient services not currently paid on a cost-related basis under the m
edicare program (including clinical diagnostic laboratory tests and dialysis ser
vices) in the system;
(v) the need to increase payments under the system to hospit
als that treat a disproportionate share of low-income patients, teaching hospita
ls, and hospitals located in geographic areas with high wages and wage-related c
osts;
(vi) the feasibility and appropriateness of bundling service
s into larger units, such as episodes or visits, in establishing the basic unit
for making payments under the system; and
(vii) the feasibility and appropriateness of varying payment
s under the system on the basis of whether services are provided in a free-stand
ing or hospital-based facility.
(B) REPORTS- (i) By not later than January 1, 1991, the Administ
rator of the Health Care Financing Administration shall submit research findings
relating to prospective payments for hospital outpatient services to the Commit
tee on Finance of the Senate and the Committees on Ways and Means and Energy and
Commerce of the House of Representatives.
(ii) By not later than September 1, 1991, the Secretary shall su
bmit the proposal developed under subparagraph (A) to such Committees.
(iii) By not later than March 1, 1992, the Prospective Payment A
ssessment Commission shall submit an analysis of and comments on the proposal de
veloped under subparagraph (A) to such Committees.
(c) PAYMENTS FOR AMBULATORY SURGICAL PROCEDURES AND RADIOLOGY SERVICES-<
/ul>
(1) MODIFICATION OF COST AND ASC PROPORTIONS OF ASC BLEND AMOUNTS-
(A) IN GENERAL- Section 1833(i)(3)(B)(ii) (42 U.S.C. 1395l(i)(3)
(B)(ii)) is amended--
(i) in subclause (I), by striking `and 50 percent for other
cost reporting periods.' and inserting `50 percent for reporting periods beginni
ng on or after October 1, 1988, and on or before December 31, 1990, and 42 perce
nt for portions of cost reporting periods beginning on or after January 1, 1991.
'; and
(ii) in subclause (II), by striking `and 50 percent for othe
r cost reporting periods.' and inserting `50 percent for reporting periods begin
ning on or after October 1, 1988, and on or before December 31, 1990, and 58 per
cent for portions of cost reporting periods beginning on or after January 1, 199
1.'.
(B) EXTENSION OF ASC BLEND AMOUNTS FOR EYE AND EYE AND EAR SPECI
ALTY HOSPITALS- The last sentence of section 1833(i)(3)(B)(ii) (42 U.S.C. 1395l(
i)(3)(B)(ii)) is amended by striking `in fiscal year 1989 or fiscal year 1990' a
nd inserting `on or after October 1, 1988, and before January 1, 1995'.
(2) MODIFICATION OF COST AND CHARGE PROPORTIONS FOR RADIOLOGY SERVIC
ES- Section 1833(n)(1)(B)(ii)(I) (42 U.S.C. 1395l(n)(1)(B)(ii)(I)) is amended by
striking the period at the end and inserting `, and such term means 42 percent
in the case of outpatient radiology services for portions of cost reporting peri
ods beginning on or after January 1, 1991.'.
(3) 2-YEAR FREEZE IN ALLOWANCE FOR INTRAOCULAR LENSES- Notwithstandi
ng section 1833(i)(2)(A)(iii) of the Social Security Act, the amount of payment
determined under such section for the insertion of an intraocular lens during or
subsequent to cataract surgery furnished to an individual in an ambulatory surg
ical center on or after the date of the enactment of this Act and on or before D
ecember 31, 1992, shall be equal to $200.
SEC. 4152. DURABLE MEDICAL EQUIPMENT.
(a) PAYMENTS FOR SEAT-LIFT AND TENS-
(1) 15 PERCENT REDUCTION IN PAYMENTS FOR TRANSCUTANEOUS ELECTRICAL N
ERVE STIMULATORS- Section 1834(a)(1)(D) of the Social Security Act (42 U.S.C. 13
95m(a)(1)(D)) is amended by inserting before the period at the end the following
: `, and, in the case of a transcutaneous electrical nerve stimulator furnished
on or after January 1, 1991, the Secretary shall further reduce such payment amo
unt (as previously reduced) by 15 percent'.
(2) SEAT-LIFTS- Section 1861(n) of the Social Security Act (42 U.S.C
. 1395x(n)) is amended by adding at the end the following: `With respect to a se
at-lift chair, such term includes only the seat-lift mechanism and does not incl
ude the chair.'.
(3) EFFECTIVE DATE- The amendment made by subsection (a) shall apply
to items furnished on or after January 1, 1991.
(b) DEVELOPMENT AND APPLICATION OF NATIONAL LIMITS ON FEES-
(1) INEXPENSIVE AND ROUTINELY PURCHASED DURABLE MEDICAL EQUIPMENT AN
D ITEMS REQUIRING FREQUENT AND SUBSTANTIAL SERVICING- Paragraphs (2) and (3) of
section 1834(a) of such Act (42 U.S.C. 1395m(a)) are each amended--
(A) in subparagraph (B)(i), by striking `or' at the end;
(B) by striking clause (ii) of subparagraph (B) and inserting th
e following:
`(ii) in 1991 is the sum of (I) 67 percent of the local paym
ent amount for the item or device computed under subparagraph (C)(i)(I) for 1991
, and (II) 33 percent of the national limited payment amount for the item or dev
ice computed under subparagraph (C)(ii) for 1991;
`(iii) in 1992 is the sum of (I) 33 percent of the local pay
ment amount for the item or device computed under subparagraph (C)(i)(II) for 19
92, and (II) 67 percent of the national limited payment amount for the item or d
evice computed under subparagraph (C)(ii) for 1992; and
`(iv) in 1993 and each subsequent year is the national limit
ed payment amount for the item or device computed under subparagraph (C)(ii) for
that year.'; and
(C) by adding at the end the following new subparagraph:
`(C) COMPUTATION OF LOCAL PAYMENT AMOUNT AND NATIONAL LIMITED PA
YMENT AMOUNT- For purposes of subparagraph (B)--
`(i) the local payment amount for an item or device for a ye
ar is equal to--
`(I) for 1991, the amount specified in subparagraph (B)(
i) for 1990 increased by the covered item update for 1991, and
`(II) for 1992, the amount determined under this clause
for the preceding year increased by the covered item update for 1992; and
`(ii) the national limited payment amount for an item or dev
ice for a year is equal to--
`(I) for 1991, the local payment amount determined under
clause (i) for such item or device for that year, except that the national limi
ted payment amount may not exceed 100 percent of the weighted average of all loc
al payment amounts determined under such clause for such item for that year and
may not be less than 85 percent of the weighted average of all local payment amo
unts determined under such clause for such item, and
`(II) for each subsequent year, the amount determined un
der this clause for the preceding year increased by the covered item update for
such subsequent year.'.
(2) MISCELLANEOUS ITEMS AND OTHER COVERED ITEMS- Section 1834(a)(8)
(42 U.S.C. 1395m(a)(8)) is amended--
(A) in subparagraph (A)(ii)--
<
/ul> (i) by striking `or' at the end of subclause (I);
(ii) in subclause (II)--
(I) by striking `1991 or', and
(II) by striking `the percentage increase' and all that
follows through the period and inserting `the covered item update for the year.'
;
(iii) by redesignating subclause (II) as subclause (III); an
d
(iv) by inserting after subclause (I) the following new subc
lause:
`(II) in 1991, equal to the local purchase price compute
d under this clause for the previous year, increased by the covered item update
for 1991, and decreased by the percentage by which the average of the reasonable
charges for claims paid for all items described in paragraph (7) is lower than
the average of the purchase prices submitted for such items during the final 9 m
onths of 1988; or';
(B) by amending subparagraph (B) to read as follows:
`(B) COMPUTATION OF NATIONAL LIMITED PURCHASE PRICE- With respec
t to the furnishing of a particular item in a year, the Secretary shall compute
a national limited purchase price--
`(i) for 1991, equal to the local purchase price computed un
der subparagraph (A)(ii) for the item for the year, except that such national li
mited purchase price may not exceed 100 percent of the weighted average of all l
ocal purchase prices for the item computed under such subparagraph for the year,
and may not be less than 85 percent of the weighted average of all local purcha
se prices for the item computed under such subparagraph for the year; and
`(ii) for each subsequent year, equal to the amount determin
ed under this subparagraph for the preceding year increased by the covered item
update for such subsequent year.';
(C) in subparagraph (C)--
(i) by striking `regional purchase price' each place it appe
ars and inserting `national limited purchase price',
(ii) by striking `and subject to subparagraph (D)',
(iii) in clause (ii)--
(I) by striking `75' and inserting `67'; and
<
/ul> (II) by striking `25' and inserting `33', and
(iv) in clause (iii)--
(I) in subclause (I), by striking `50' and inserting `33
' and by striking `(A)(ii)(II)' and inserting `(A)(ii)(III)'; and
(II) in subclause (II), by striking `50' and inserting `
67'; and
(D) by striking subparagraph (D).
(3) OXYGEN AND OXYGEN EQUIPMENT- Section 1834(a)(9) of such Act (42
U.S.C. 1395m(a)(9)) is amended--
(A) in subparagraph (A)(ii)(II), by striking `the percentage inc
rease' and all that follows through the period and inserting `the covered item i
ncrease for the year.';
(B) by amending subparagraph (B) to read as follows:
`(B) COMPUTATION OF NATIONAL LIMITED MONTHLY PAYMENT RATE- With
respect to the furnishing of an item in a year, the Secretary shall compute a na
tional limited monthly payment rate equal to--
`(i) for 1991, the local monthly payment rate computed under
subparagraph (A)(ii)(II) for the item for the year, except that such national l
imited monthly payment rate may not exceed 100 percent of the weighted average o
f all local monthly payment rates computed for the item under such subparagraph
for the year, and may not be less than 85 percent of the weighted average of all
local monthly payment rates computed for the item under such subparagraph for t
he year; and
`(ii) for each subsequent year, equal to the amount determin
ed under this subparagraph for the preceding year increased by the covered item
update for such subsequent year.';
(C) in subparagraph (C)--
<
/ul>
(i) by striking `regional monthly payment rate' each place i
t appears and inserting `national limited monthly payment rate',
(ii) in clause (ii)--
(I) by striking `75' and inserting `67'; and
<
/ul> (II) by striking `25' and inserting `33', and
(iii) in clause (iii)--
(I) in subclause (I), by striking `50' and inserting `33
'; and
(II) in subclause (II), by striking `50' and inserting `
67' and by striking `(B)(i)' and inserting `(B)(ii)'; and
(D) by striking subparagraph (D).
(4) DEFINITION- Section 1834(a) (42 U.S.C. 1395m(a)) is amended by a
dding at the end the following new paragraph:
`(14) COVERED ITEM UPDATE- In this subsection, the term `covered ite
m update' means, with respect to a year--
`(A) for 1991 and 1992, 13
`(B) for a subsequent year, the percentage increase in the consu
mer price index for all urban consumers (U.S. city average) for the 12-month per
iod ending with June of the previous year.'.
(5) CONFORMING AMENDMENT- Section 1834(a)(12) (42 U.S.C. 1395m(a)(12
)) is amended by striking `defined for purposes of paragraphs (8)(B) and (9)(B)'
.
(c) TREATMENT OF `RENTAL CAP' ITEMS-
(1) LIMITATION ON MONTHLY RECOGNIZED RENTAL AMOUNTS FOR MISCELLANEOU
S ITEMS- Section 1834(a)(7)(A)(i) (42 U.S.C. 1395m(a)(7)(A)(i)) is amended--
(A) by striking `for each such month' and inserting `for each of
the first 3 months of such period'; and
(B) by striking the semicolon at the end and inserting the follo
wing: `, and for each of the remaining months of such period is 7.5 percent of s
uch purchase price;'.
(2) OFFER OF OPTION TO PURCHASE FOR MISCELLANEOUS ITEMS; ESTABLISHME
NT OF REASONABLE LIFETIME- Section 1834(a)(7) of such Act (42 U.S.C. 1395m(a)(7)
(A)) is amended--
(A) in subparagraph (A)(i), by striking `15 months' and insertin
g `15 months, or, in the case of an item for which a purchase agreement has been
entered into under clause (iii), a period of continuous use of longer than 13 m
onths';
(B) in subparagraph (A)(ii)--
(i) by striking `(ii) during the succeeding 6-month period o
f medical need,' and inserting `(iv) in the case of an item for which a purchase
agreement has not been entered into under clause (ii) or clause (iii), during t
he first 6-month period of medical need that follows the period of medical need
during which payment is made under clause (i),', and
(ii) by striking `and' at the end;
(C) in subparagraph (A)(iii)--
(i) by striking `(iii)' and inserting `(v) in the case of an
item for which a purchase agreement has not been entered into under clause (ii)
or clause (iii),', and
(ii) by striking the period at the end and inserting `; and'
;
(D) by inserting after clause (i) of subparagraph (A) the follow
ing new clauses:
`(ii) in the case of a power-driven wheelchair, at the time
the supplier furnishes the item, the supplier shall offer the individual patient
the option to purchase the item, and payment for such item shall be made on a l
ump-sum basis if the patient exercises such option;
`(iii) during the 10th continuous month during which payment
is made for the rental of an item under clause (i), the supplier of such item s
hall offer the individual patient the option to enter into a purchase agreement
under which, if the patient notifies the supplier not later than 1 month after t
he supplier makes such offer that the patient agrees to accept such offer and ex
ercise such option--
`(I) the supplier shall transfer title to the item to th
e individual patient on the first day that begins after the 13th continuous mont
h during which payment is made for the rental of the item under clause (i),
`(II) after the supplier transfers title to the item und
er subclause (I), maintenance and servicing payments shall be made in accordance
with clause (v);';
(E) by inserting after clause (v) of subparagraph (A) (as amende
d by subparagraph (C)) the following new clause:
`(vi) in the case of an item for which a purchase agreement
has been entered into under clause (ii) or clause (iii), maintenance and servici
ng payments may be made (for parts and labor not covered by the supplier's or ma
nufacturer's warranty, as determined by the Secretary to be appropriate for the
particular type of durable medical equipment), and such payments shall be in an
amount established by the Secretary on the basis of reasonable charges in the lo
cality for maintenance and servicing.'; and
(F) by adding at the end the following new subparagraph:
`(C) REPLACEMENT OF ITEMS-
`(i) ESTABLISHMENT OF REASONABLE USEFUL LIFETIME- In accorda
nce with clause (iii), the Secretary shall determine and establish a reasonable
useful lifetime for items of durable medical equipment for which payment may be
made under this paragraph or paragraph (3).
`(ii) PAYMENT FOR REPLACEMENT ITEMS- If the reasonable lifet
ime of such an item, as so established, has been reached during a continuous per
iod of medical need, or the carrier determines that the item is lost or irrepara
bly damaged, the patient may elect to have payment for an item serving as a repl
acement for such item made--
`(I) on a monthly basis for the rental of the replacemen
t item in accordance with subparagraph (A); or
`(II) in the case of an item for which a purchase agreem
ent has been entered into under subparagraph (A)(ii) or (A)(iii), in a lump-sum
amount for the purchase of the item.
`(iii) LENGTH OF REASONABLE USEFUL LIFETIME- The reasonable
useful lifetime of an item of durable medical equipment under this subparagraph
shall be equal to 5 years, except that, if the Secretary determines that, on the
basis of prior experience in making payments for such an item under this title,
a reasonable useful lifetime of 5 years is not appropriate with respect to a pa
rticular item, the Secretary shall establish an alternative reasonable lifetime
for such item.'.
(3) APPLICATION OF REASONABLE USEFUL LIFETIME FOR ITEMS REQUIRING FR
EQUENT AND SUBSTANTIAL SERVICING- Section 1834(a)(3) (42 U.S.C. 1395m(a)(3)), as
amended by subsection (b)(1), is further amended by adding at the end the follo
wing new subparagraph:
`(D) REPLACEMENT OF ITEMS- If the reasonable useful lifetime of
such an item, as established under paragraph (7)(C), has been reached during a c
ontinuous period of medical need, or the Secretary determines on the basis of in
vestigation by the carrier that the item is lost or irreparably damaged, payment
for an item serving as a replacement for such item shall be made on a monthly b
asis for the rental of the replacement item in accordance with subparagraph (A).
'.
(4) TREATMENT OF POWER-DRIVEN WHEELCHAIRS AS MISCELLANEOUS ITEMS OF
DURABLE MEDICAL EQUIPMENT-
(A) IN GENERAL- Section 1834(a)(2)(A) (42 U.S.C. 1395m(a)(2)(A))
is amended--
(i) in clause (i), by inserting `or' at the end;
(ii) in clause (ii), by striking `or' at the end; and
(iii) by striking clause (iii).
(B) CRITERIA FOR TREATMENT OF WHEELCHAIR AS CUSTOMIZED ITEM- (i)
Section 1834(a)(4) (42 U.S.C. 1395m(a)(4)) is amended by adding at the end the
following: `In the case of a wheelchair furnished on or after January 1, 1992, t
he wheelchair shall be treated as a customized item for purposes of this paragra
ph if the wheelchair has been measured, fitted, or adapted in consideration of t
he patient's body size, disability, period of need, or intended use, and has bee
n assembled by a supplier or ordered from a manufacturer who makes available cus
tomized features, modifications, or components for wheelchairs that are intended
for an individual patient's use in accordance with instructions from the patien
t's physician.'.
(ii) The amendment made by clause (i) shall apply to items furni
shed on or after January 1, 1992, unless the Secretary develops specific criteri
a before that date for the treatment of wheelchairs as customized items for purp
oses of section 1834(a)(4) of the Social Security Act (in which case the amendme
nt made by such clause shall not become effective).
(d) FREEZE IN REASONABLE CHARGES FOR PARENTERAL AND ENTERAL NUTRIENTS, S
UPPLIES, AND EQUIPMENT DURING 1991- In determining the amount of payment under p
art B of title XVIII of the Social Security Act for enteral and parenteral nutri
ents, supplies, and equipment furnished during 1991, the charges determined to b
e reasonable with respect to such nutrients, supplies, and equipment may not exc
eed the charges determined to be reasonable with respect to such items for 1990.
(e) REQUIRING PRIOR APPROVAL FOR POTENTIALLY OVERUSED ITEMS- Section 183
4(a) (42 U.S.C. 1395m(a)), as amended by subsection (b), is amended by adding at
the end the following new paragraph:
`(15) CARRIER DETERMINATIONS OF POTENTIALLY OVERUSED ITEMS IN ADVANC
E-
`(A) DEVELOPMENT OF LIST OF ITEMS BY SECRETARY- The Secretary sh
all develop and periodically update a list of items for which payment may be mad
e under this subsection that the Secretary determines, on the basis of prior pay
ment experience, are frequently subject to unnecessary utilization, and shall in
clude in such list seat-lift mechanisms, transcutaneous electrical nerve stimula
tors, and motorized scooters.
`(B) DETERMINATIONS OF COVERAGE IN ADVANCE- A carrier shall dete
rmine in advance whether payment for an item included on the list developed by t
he Secretary under subparagraph (A) may not be made because of the application o
f section 1862(a)(1).'.
(f) PROHIBITION AGAINST DISTRIBUTION OF MEDICAL NECESSITY FORMS BY SUPPL
IERS-
(1) IN GENERAL- Section 1834(a) (42 U.S.C. 1395m(a)), as amended by
subsections (b) and (e), is further amended by adding at the end the following n
ew paragraph:
`(16) PROHIBITION AGAINST DISTRIBUTION BY SUPPLIERS OF FORMS DOCUMEN
TING MEDICAL NECESSITY-
`(A) IN GENERAL- A supplier of a covered item under this subsect
ion may not distribute to physicians or to individuals entitled to benefits unde
r this part for commercial purposes any completed or partially completed forms o
r other documents required by the Secretary to be submitted to show that a cover
ed item is reasonable and necessary for the diagnosis or treatment of illness or
injury or to improve the functioning of a malformed body member.
`(B) PENALTY- Any supplier of a covered item who knowingly and w
illfully distributes a form or other document in violation of subparagraph (A) i
s subject to a civil money penalty in an amount not to exceed $1,000 for each su
ch form or document so distributed. The provisions of section 1128A (other than
subsections (a) and (b)) shall apply to civil money penalties under this subpara
graph in the same manner as they apply to a penalty or proceeding under section
1128A(a).'.
(2) EFFECTIVE DATE- The amendment made by paragraph (1) shall apply
to forms and documents distributed on or after January 1, 1991.
(g) RECERTIFICATION FOR CERTAIN PATIENTS RECEIVING HOME OXYGEN THERAPY S
ERVICES-
(1) IN GENERAL- Section 1834(a)(5) (42 U.S.C. 1395m(a)(5)) is amende
d--
(A) in subparagraph (A), by striking `(B) and (C)' and inserting
`(B), (C), and (E)'; and
(B) by adding at the end the following new subparagraph:
`(E) RECERTIFICATION FOR PATIENTS RECEIVING HOME OXYGEN THERAPY-
In the case of a patient receiving home oxygen therapy services who, at the tim
e such services are initiated, has an initial arterial blood gas value at or abo
ve a partial pressure of 55 or an arterial oxygen saturation at or above 89 perc
ent (or such other values, pressures, or criteria as the Secretary may specify)
no payment may be made under this part for such services after the expiration of
the 90-day period that begins on the date the patient first receives such servi
ces unless the patient's attending physician certifies that, on the basis of a f
ollow-up test of the patient's arterial blood gas value or arterial oxygen satur
ation conducted during the final 30 days of such 90-day period, there is a medic
al need for the patient to continue to receive such services.'.
(2) EFFECTIVE DATE- The amendments made by paragraph (1) shall apply
to patients who first receive home oxygen therapy services on or after January
1, 1991.
(h) TECHNICAL CORRECTIONS- Effective as if included in the enactment of
the Omnibus Budget Reconciliation Act of 1987, section 4062(e) of such Act is am
ended--
(1) by inserting `(other than oxygen and oxygen equipment)' after `c
overed items', and
(2) by inserting before the period at the end the following: `and to
oxygen and oxygen equipment furnished on or after June 1, 1989'.
(i) EFFECTIVE DATE- Except as otherwise provided, the amendments made by
this section shall apply to items furnished on or after January 1, 1991.
SEC. 4153. PROVISIONS RELATING TO ORTHOTICS AND PROSTHETICS.
(a) PAYMENTS FOR PROSTHETIC DEVICES AND ORTHOTICS AND PROSTHETICS-
(1) MAINTAINING CURRENT PAYMENT METHODOLOGY- Section 1834 (42 U.S.C.
1395m) is amended by adding at the end the following new subsection:
`(h) PAYMENT FOR PROSTHETIC DEVICES AND ORTHOTICS AND PROSTHETICS-
`(1) GENERAL RULE FOR PAYMENT-
`(A) IN GENERAL- Payment under this subsection for prosthetic de
vices and orthotics and prosthetics shall be made in a lump-sum amount for the p
urchase of the item in an amount equal to 80 percent of the payment basis descri
bed in subparagraph (B).
`(B) PAYMENT BASIS- Except as provided in subparagraph (C), the
payment basis described in this subparagraph is the lesser of--
`(i) the actual charge for the item; or
`(ii) the amount recognized under paragraph (2) as the purch
ase price for the item.
`(C) EXCEPTION FOR CERTAIN PUBLIC HOME HEALTH AGENCIES- Subparag
raph (B)(i) shall not apply to an item furnished by a public home health agency
(or by another home health agency which demonstrates to the satisfaction of the
Secretary that a significant portion of its patients are low income) free of cha
rge or at nominal charges to the public.
`(D) EXCLUSIVE PAYMENT RULE- This subsection shall constitute th
e exclusive provision of this title for payment for prosthetic devices, orthotic
s, and prosthetics under this part or under part A to a home health agency.
`(2) PURCHASE PRICE RECOGNIZED- For purposes of paragraph (1), the a
mount that is recognized under this paragraph as the purchase price for prosthet
ic devices, orthotics, and prosthetics is the amount described in subparagraph (
C) of this paragraph, determined as follows:
`(A) COMPUTATION OF LOCAL PURCHASE PRICE- Each carrier under sec
tion 1842 shall compute a base local purchase price for the item as follows:
`(i) The carrier shall compute a base local purchase price f
or each item equal to the average reasonable charge in the locality for the purc
hase of the item for the 12-month period ending with June 1987.
`(ii) The carrier shall compute a local purchase price, with
respect to the furnishing of each particular item--
`(I) in 1989 and 1990, equal to the base local purchase
price computed under clause (i) increased by the percentage increase in the cons
umer price index for all urban consumers (United States city average) for the 6-
month period ending with December 1987, or
`(II) in 1991, 1992 or 1993, equal to the local purchase
price computed under this clause for the previous year increased by the applica
ble percentage increase for the year.
`(B) COMPUTATION OF REGIONAL PURCHASE PRICE- With respect to the
furnishing of a particular item in each region (as defined by the Secretary), t
he Secretary shall compute a regional purchase price--
`(i) for 1992, equal to the average (weighted by relative vo
lume of all claims among carriers) of the local purchase prices for the carriers
in the region computed under subparagraph (A)(ii)(II) for the year, and
`(ii) for each subsequent year, equal to the regional purcha
se price computed under this subparagraph for the previous year increased by the
applicable percentage increase for the year.
`(C) PURCHASE PRICE RECOGNIZED- For purposes of paragraph (1) an
d subject to subparagraph (D), the amount that is recognized under this paragrap
h as the purchase price for each item furnished--
`(i) in 1989, 1990, or 1991, is 100 percent of the local pur
chase price computed under subparagraph (A)(ii);
`(ii) in 1992, is the sum of (I) 75 percent of the local pur
chase price computed under subparagraph (A)(ii)(II) for 1992, and (II) 25 percen
t of the regional purchase price computed under subparagraph (B) for 1992;
<
/ul> `(iii) in 1993, is the sum of (I) 50 percent of the local pu
rchase price computed under subparagraph (A)(ii)(II) for 1993, and (II) 50 perce
nt of the regional purchase price computed under subparagraph (B) for 1993; and<
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`(iv) in 1994 or a subsequent year, is the regional purchase
price computed under subparagraph (B) for that year.
`(D) RANGE ON AMOUNT RECOGNIZED- The amount that is recognized u
nder subparagraph (C) as the purchase price for an item furnished--
`(i) in 1992, may not exceed 125 percent, and may not be low
er than 85 percent, of the average of the purchase prices recognized under such
subparagraph for all the carrier service areas in the United States in that year
; and
`(ii) in a subsequent year, may not exceed 120 percent, and
may not be lower than 90 percent, of the average of the purchase prices recogniz
ed under such subparagraph for all the carrier service areas in the United State
s in that year.
`(3) APPLICABILITY OF CERTAIN PROVISIONS RELATING TO DURABLE MEDICAL
EQUIPMENT- Paragraph (12) and subparagraphs (A) and (B) of paragraph (10) and p
aragraph (11) of subsection (a) shall apply to prosthetic devices, orthotics, an
d prosthetics in the same manner as such provisions apply to covered items under
such subsection.
`(4) DEFINITIONS- In this subsection--
`(A) the term `applicable percentage increase' means--
`(i) for 1991, 0 percent, and
`(ii) for a subsequent year, the percentage increase in the
consumer price index for all urban consumers (United States city average) for th
e 12-month period ending with June of the previous year;
`(B) the term `prosthetic devices' has the meaning given such te
rm in section 1861(s)(8), except that such term does not include parenteral and
enteral nutrition nutrients, supplies, and equipment; and
`(C) the term `orthotics and prosthetics' has the meaning given
such term in section 1861(s)(9), but does not include intraocular lenses or medi
cal supplies (including catheters, catheter supplies, ostomy bags, and supplies
related to ostomy care) furnished by a home health agency under section 1861(m)(
5).'.
(2) CONFORMING AMENDMENTS- (A) Section 1832(a)(2) (42 U.S.C. 1395k(a
)(2)) is amended--
(i) in subparagraphs (A) and (B), by striking `subparagraph (G)'
each place it appears and inserting `subparagraph (G) or subparagraph (I)';
(ii) by striking `and' at the end of subparagraph (G);
(iii) by striking the period at the end of subparagraph (H) and
inserting `; and'; and
(iv) by adding at the end the following new subparagraph:
`(I) prosthetic devices and orthotics and prosthetics (described
in section 1834(h)(4)) furnished by a provider of services or by others under a
rrangements with them made by a provider of services.'.
(B) Section 1833(a)(1) (42 U.S.C. 1395l(a)(1) is amended--
(i) by striking `, and (L)' and inserting `, (L)'; and
(ii) by striking `subparagraph and (N)' and inserting the follow
ing: `subparagraph, (M) with respect to prosthetic devices and orthotics and pro
sthetics (as defined in section 1834(h)(4)), the amounts paid shall be the amoun
ts described in section 1834(h)(1), and (N)'.
(C) Section 1833(a) (42 U.S.C. 1395l(a)) is amended--
(i) in paragraph (2), in the matter before subparagraph (A), by
striking `and (H)' and inserting `(H), and (I)';
(ii) by striking `and' at the end of paragraph (5);
(iii) by striking the period at the end of paragraph (6) and ins
erting `; and'; and
(iv) by adding at the end the following new paragraph:
`(7) in the case of prosthetic devices and orthotics and prosthetics
(as described in section 1834(h)(4)), the amounts described in section 1834(h).
'.
(D) Section 1834(a) (42 U.S.C. 1395m(a)), is amended--
(i) in the heading, by striking `, PROSTHETIC DEVICES, ORTHOTICS
, AND PROSTHETICS';
(ii) in paragraph (2)(A), by striking `(13)(A)' and inserting `(
13)'; and
(iii) in paragraph (13), by striking `means--' and all that foll
ows and inserting the following: `means durable medical equipment (as defined in
section 1861(n)), including such equipment described in section 1861(m)(5)).
(3) EFFECTIVE DATE- The amendments made by paragraphs (1) and (2) sh
all apply to items furnished on or after January 1, 1991.
(b) PROVISIONS RELATING TO EYEGLASSES-
(1) PROHIBITION ON REGULATIONS- (A) Notwithstanding any other provis
ion of law (except as provided in subparagraph (B)) the Secretary of Health and
Human Services (referred to in this subsection as the `Secretary') may not issue
any regulation that changes the coverage of conventional eyewear furnished to i
ndividuals (enrolled under part B of title XVIII of the Social Security Act) fol
lowing cataract surgery with insertion of an intraocular lens.
(B) Paragraph (1) shall not apply to any regulation issued for the s
ole purpose of implementing the amendments made by paragraph (2).
(2) CLARIFYING COVERAGE OF POST-CATARACT EYEGLASSES- (A) Section 186
1(s)(8) (42 U.S.C. 1395x(s)(8)) is amended by inserting after `such devices' the
following `, and including one pair of conventional eyeglasses or contact lense
s furnished subsequent to each cataract surgery with insertion of an intraocular
lens'.
(B) Section 1862(a)(7) (42 U.S.C. 1395y(a)(7)) is amended by inserti
ng after `eyeglasses' the first place it appears the following: `(other than eye
wear described in section 1861(s)(8))'.
(C) The amendments made by subparagraphs (A) and (B) shall apply to
items furnished on or after January 1, 1991.
(c) GAO STUDY OF MEDICARE PAYMENTS FOR PROSTHETIC DEVICES, ORTHOTICS, AN
D PROSTHETICS-
(1) STUDY- The Comptroller General shall conduct a study of the feas
ibility and desirability of establishing a separate fee schedule for use in dete
rmining the amount of payments for covered items under section 1834(a) of the So
cial Security Act with respect to suppliers of prosthetic devices, orthotics, an
d prosthetics who provide professional services that would take into account the
costs to such providers of providing such services.
(2) REPORT- Not later than 1 year after the date of the enactment of
this Act, the Comptroller General shall submit a report on the study conducted
under subparagraph (A) to the Committees on Energy and Commerce and Ways and Mea
ns of the House of Representatives and the Committee on Finance of the Senate, a
nd shall include in such report any recommendations regarding payments for prost
hetic devices, orthotics, and prosthetics under the medicare program that the Co
mptroller General considers appropriate.
(d) CLARIFICATION OF COVERAGE OF OSTOMY SUPPLIES-
(1) IN GENERAL- Section 1866(a)(1)(P) (42 U.S.C. 1395cc(a)(1)(P)) is
amended by striking `ostomy supplies' and inserting `catheters, catheter suppli
es, ostomy bags, and supplies related to ostomy care'.
(2) EFFECTIVE DATE- The amendment made by paragraph (1) shall take e
ffect as if included in the enactment of the Omnibus Budget Reconiliation 14
SEC. 4154. CLINICAL DIAGNOSTIC LABORATORY TESTS.
(a) LIMIT ON ANNUAL FEE SCHEDULE INCREASES- Section 1833(h)(2)(A)(ii) (4
2 U.S.C. 13951(h)(2)(A)(ii)) is amended--
(1) by striking `any other provision of this subsection' and inserti
ng `clause (i)';
(2) by striking `and' at the end of subclause (I);
(3) by striking the period at the end of subclause (II) and insertin
g `, and'; and
(4) by adding at the end the following new subclause:
`(III) the annual adjustment in the fee schedules determined under c
lause (i) for each of the years 1991, 1992, and 1993 shall be 2 percent.'.
<
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(b) REDUCTION IN NATIONAL CAP ON FEE SCHEDULES-
(1) IN GENERAL- Section 1833(h)(4)(B) (42 U.S.C. 1395l(h)(4)(B)) is
amended--
(A) in clause (ii), by striking `and' at the end;
(B) in clause (iii)--
(i) by inserting `and before January 1, 1991,' after `1989,'
, and
(ii) by striking the period at the end and inserting `, and'
; and
(C) by adding at the end the following new clause:
`(iv) after December 31, 1990, is equal to 88 percent of the median
of all the fee schedules established for that test for that laboratory setting u
nder paragraph (1).'.
(2) EFFECTIVE DATE- The amendments made by paragraph (1) shall apply
to tests furnished on or after January 1, 1991.
(c) CLARIFICATION OF MANDATORY ASSIGNMENT FOR CLINICAL DIAGNOSTIC LABORA
TORY TESTS PERFORMED BY PHYSICIANS-
(1) IN GENERAL- (A) Section 1833(h)(5)(C) of such Act (42 U.S.C. 139
5l(h)(5)(C)) is amended by striking `test performed by a laboratory other than a
rural health clinic' and inserting `test, including a test performed in a physi
cian's office but excluding a test performed by a rural health clinic'.
(B) Section 1833(h)(5)(D) of such Act (42 U.S.C. 1395l(i)(5)(D)) is
amended by striking `test performed by a laboratory, other than a rural health c
linic' and inserting `test, including a test performed in a physician's office b
ut excluding a test performed by a rural health clinic,'.
(2) EFFECTIVE DATE- The amendment made by paragraph (1)(A) shall tak
e effect as if included in the enactment of the Consolidated Omnibus Budget Reco
nciliation Act of 1985, and the amendment made by paragraph (1)(B) shall take ef
fect as if included in the enactment of the Omnibus Budget Reconciliation Act of
1987.
(d) AGREEMENTS WITH STATES TO DETERMINE COMPLIANCE OF CLINICAL LABORATOR
IES WITH PROGRAM REQUIREMENTS-
(1) IN GENERAL- Section 1864(a) (42 U.S.C. 1395aa(a)) is amended in
the first sentence by striking `1861(s),' and inserting `1861(s) or (in the case
of a laboratory that does not participate or seek to participate in the medicar
e program) the requirements of section 353 of the Public Health Service Act,'.
(2) EFFECTIVE DATE- The amendment made by paragraph (1) shall take e
ffect as if included in the enactment of the Clinical Laboratory Improvement Ame
ndments of 1988.
(e) TECHNICAL CORRECTIONS-
(1) Section 1833(h)(5)(A)(ii) of such Act (42 U.S.C. 1395l(h)(5)(A)(
ii)) is amended--
(A) in subclause (II), by striking `a wholly-owned subsidiary of
' and inserting `wholly owned by';
(B) in subclause (III), by striking `laboratory' and inserting `
laboratory (but not including a laboratory described in subclause (II)),'; and
(C) in subclause (III), by striking `submits bills or requests f
or payment in any year' and inserting `receives requests for testing during the
year in which the test is performed'.
(2) The heading of section 1846 of such Act is amended by striking `
OF' and inserting `OR SUPPLIERS OF'.
(3) Effective as if included in the enactment of the Omnibus Budget
Reconciliation Act of 1986, section 9339(b) of the Omnibus Budget Reconciliation
Act of 1986 is amended by striking paragraph (3).
(4) Section 6111(b)(2) of the Omnibus Budget Reconciliation Act of 1
989 is amended by striking `January 1, 1990' and inserting `May 1, 1990'.
(5) The amendments made by paragraphs (1)(A) 15
SEC. 4155. COVERAGE OF NURSE PRACTITIONERS IN RURAL AREAS.
(a) IN GENERAL- Section 1861(s)(2)(K) (42 U.S.C. 1395x(s)(2)(K)) is amen
ded--
(1) in clause (ii), by striking `and' at the end;
(2) by redesignating clause (iii) as clause (iv); and
(3) by inserting after clause (ii) the following new clause:
`(iii) services which would be physicians' services if furnished by
a physician (as defined in subsection (r)(1)) and which are performed by a nurse
practitioner or clinical nurse specialist (as defined in subsection (aa)(3)) wo
rking in collaboration (as defined in subsection (aa)(4)) with a physician (as d
efined in subsection (r)(1)) in a rural area (as defined in section 1886(d)(2)(D
)) which the nurse practitioner or clinical nurse specialist is authorized to pe
rform by the State in which the services are performed, and such services and su
pplies furnished as an incident to such services as would be covered under subpa
ragraph (A) if furnished as an incident to a physician's professional service, a
nd'.
(b) PAYMENT-
(1) DIRECT PAYMENT- Section 1832(a)(2)(B) (42 U.S.C. 1395k(a)(2)(B))
is amended--
(A) in clause (ii), by striking `and' at the end;
(B) in clause (iii), by striking the semicolon and inserting a c
omma; and
(C) by adding at the end the following new clause:
`(iv) services of a nurse practitioner or clinical nurse spe
cialist provided in a rural area (as defined in section 1886(d)(2)(D)); and'.
(2) AMOUNT- Section 1833(a)(1) (42 U.S.C. 1395l(a)(1)) as amended by
section 4153(a)(2)(B), is amended--
(A) by striking `and' at the end of subparagraph (K); and
(B) by inserting after subparagraph (L) the following new subpar
agraph: `(M) with respect to services described in section 1861(s)(2)(K)(iii) (r
elating to nurse practitioner or clinical nurse specialist services provided in
a rural area), the amounts paid shall be 80 percent of the lesser of the actual
charge or the prevailing charge that would be recognized (or, for services furni
shed on or after January 1, 1992, the fee schedule amount provided under section
1848) if the services had been performed by a physician (subject to the limitat
ion described in subsection (r)(2))'.
(3) CAP ON PREVAILING CHARGE; BILLING ONLY ON ASSIGNMENT-RELATED BAS
IS- Section 1833 (42 U.S.C. 1395l) is amended by adding at the end the following
new subsection:
`(r)(1) With respect to services described in section 1861(s)(2)(K)(iii)
(relating to nurse practitioner or clinical nurse specialist services provided
in a rural area), payment may be made on the basis of a claim or request for pay
ment presented by the nurse practitioner or clinical nurse specialist furnishing
such services, or by a hospital, rural primary care hospital, skilled nursing f
acility or nursing facility (as defined in section 1919(a)), physician, group pr
actice, ambulatory surgical center, with which the nurse practitioner or clinica
l nurse specialist has an employment or contractual relationship that provides f
or payment to be made under this part for such services to such hospital, physic
ian, group practice, ambulatory surgical center.
`(2)(A) For purposes of subsection (a)(1)(M), the prevailing charge for
services described in section 1861(s)(2)(K)(iii) may not exceed the applicable p
ercentage (as defined in subparagraph (B)) of the prevailing charge (or, for ser
vices furnished on or after January 1, 1992, the fee schedule amount provided un
der section 1848) determined for such services performed by physicians who are n
ot specialists.
`(B) In subparagraph (A), the term `applicable percentage' means--
`(i) 75 percent in the case of services performed in a hospital, and
`(ii) 85 percent in the case of other services.
`(3)(A) Payment under this part for services described in section 1861(s
)(2)(K)(iii) may be made only on an assignment-related basis, and any such assig
nment agreed to by a nurse practitioner or clinical nurse specialist shall be bi
nding upon any other person presenting a claim or request for payment for such s
ervices.
`(B) Except for deductible and coinsurance amounts applicable under this
section, any person who knowingly and willfully presents, or causes to be prese
nted, to an individual enrolled under this part a bill or request for payment fo
r services described in section 1861(s)(2)(K)(iii) in violation of subparagraph
(A) is subject to a civil money penalty of not to exceed $2,000 for each such bi
ll or request. The provisions of section 1128A (other than subsections (a) and (
b)) shall apply to a civil money penalty under the previous sentence in the same
manner as such provisions apply to a penalty or proceeding under section 1128A(
a).
`(4) No hospital or rural primary care hospital that presents a claim or
request for payment under this part for services described in section 1861(s)(2
)(K)(iii) may treat any uncollected coinsurance amount imposed under this part w
ith respect to such services as a bad debt of such hospital for purposes of this
title.'.
(c) CONFORMING AMENDMENT- Section 1842(b) (42 U.S.C. 1395u(b)) is amende
d by striking `section 1861(s)(2)(K)' each place it appears in paragraphs (6) an
d (12) and inserting `clauses (i), (ii), or (iv) of section 1861(s)(2)(K)'.
(d) DEFINITION- Section 1861(aa)(3) (42 U.S.C. 1395x(aa)(3)) is amended
by striking `The term' and all that follows through `who performs' and inserting
the following: `The term `physician assistant', the term `nurse practitioner',
and the term `clinical nurse specialist' mean, for purposes of this Act, a physi
cian assistant, nurse practitioner, or clinical nurse specialist who performs'.<
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(e) EFFECTIVE DATE- The amendments made by this section shall apply to s
ervices furnished on or after January 1, 1991.
(a) IN GENERAL- Section 1861 (42 U.S.C. 1395x) is amended--
(1) in subsection (s)(2)--
<
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(A) by striking `and' at the end of subparagraph (M),
(B) by inserting `and' at the end of subparagraph (N), and
<
/ul> (C) by inserting after subparagraph (N) the following new subpar
agraph:
`(O) a covered osteoporosis drug and its administration (as defined
in subsection (jj)) furnished on or after January 1, 1991, and on or before Dece
mber 31, 1995; and'; and
(2) by inserting after subsection (ii) the following new subsection:
`(jj) The term `covered osteoporosis drug' means an injectable drug appr
oved for the treatment of a bone fracture related to post-menopausal osteoporosi
s provided to an individual if, in accordance with regulations promulgated by th
e Secretary--
`(1) the individual's attending physician certifies that the patient
is unable to learn the skills needed to self-administer such drug or is otherwi
se physically or mentally incapable of self-administering such drug; and
`(2) the individual is confined to the individual's home (except whe
n receiving items and services referred to in subsection (m)(7)).'.
(b) STUDY OF EFFECTS OF COVERAGE-
(1) IN GENERAL- The Secretary of Health and Human Services shall con
duct a study analyzing the effects of coverage of osteoporosis drugs under part
B of title XVIII of the Social Security Act (as amended by subsection (a)) on th
e health of individuals enrolled under such part and the utilization of inpatien
t hospital and extended care services by such individuals.
(2) REPORT- By not later than October 1, 1994, the Secretary shall s
ubmit a report to Congress on the study conducted under paragraph (1), and shall
include in such report such recommendations regarding expansion of coverage und
er the medicare program of items and services for individuals with post-menopaus
al osteoporosis as the Secretary considers appropriate.
(a) SERVICES OF CERTAIN HEALTH PRACTITIONERS NOT TO BE INCLUDED IN INPAT
IENT HOSPITAL SERVICES- Section 1861(b) (42 U.S.C. 1395x(b)) is amended--
(1) in paragraph (3), by striking `(including clinical psychologist
(as defined by the Secretary))', and
(2) in paragraph (4), by striking everything after `intern' and inse
rting `, services described by subsection (s)(2)(K)(i), certified nurse-midwife
services, qualified psychologist services, and services of a certified registere
d nurse anesthetist; and'.
(b) TREATMENT OF SERVICES FURNISHED IN INPATIENT SETTING- Section 1832(a
)(2)(B)(iii) (42 U.S.C. 1395k(a)(2)(B)(iii)) is amended to read as follows:
`(iii) services described by section 1861(s)(2)(K)(i), certi
fied nurse-midwife services, qualified psychologist services, and services of a
certified registered nurse anesthetist;'.
(c) CONFORMING AMENDMENTS-
(1) Section 1862(a)(14) (42 U.S.C. 1395y) is amended--
(A) by striking `or are services of a certified registered nurse
anesthetist', and
(B) by inserting after `this paragraph)' a comma and the followi
ng: `services described by section 1861(s)(2)(K)(i), certified nurse-midwife ser
vices, qualified psychologist services, and services of a certified registered n
urse anesthetist,'.
(2) The matter in section 1866(a)(1)(H) (42 U.S.C. 1395x(a)(1)(H)) p
receding clause (i) is amended by inserting after `and other than' the following
: `services described by section 1861(s)(2)(K)(i), certified nurse-midwife servi
ces, qualified psychologist services, and'.
(d) EFFECTIVE DATE- The amendments made by the preceding subsections app
ly to services furnished on or after January 1, 1991.
(a) IN GENERAL- Notwithstanding any other provision of law (including an
y other provision of this Act, other than subsection (b)(4)), payments under par
t B of title XVIII of the Social Security Act for items and services furnished d
uring the period beginning on November 1, 1990, and ending on December 31, 1990,
shall be reduced by 2 percent, in accordance with subsection (b).
(b) SPECIAL RULES FOR APPLICATION OF REDUCTION-
(1) PAYMENT ON THE BASIS OF COST REPORTING PERIODS- In the case in w
hich payment for services of a provider of services is made under part B of such
title on a basis relating to the reasonable cost incurred for the services duri
ng a cost reporting period of the provider, the reduction made under subsection
(a) shall be applied to payment for costs for such services incurred at any time
during each cost reporting period of the provider any part of which occurs duri
ng the period described in such subsection, but only in the same proportion as t
he fraction of the cost reporting period that occurs during such period.
(2) NO INCREASE IN BENEFICIARY CHARGES IN ASSIGNMENT-RELATED CASES-
If a reduction in payment amounts is made under subsection (a) for items or serv
ices for which payment under part B of such title is made on an assignment-relat
ed basis (as defined in section 1842(i)(1) of the Social Security Act), the pers
on furnishing the items or services shall be considered to have accepted payment
of the reasonable charge for the items or services, less any reduction in payme
nt amount made under subsection (a), as payment in full.
(3) TREATMENT OF PAYMENTS TO HEALTH MAINTENANCE ORGANIZATIONS- Subse
ction (a) shall not apply to payments under risk-sharing contracts under section
1876 of the Social Security Act or under similar contracts under section 402 of
the Social Security Amendments of 1967 or section 222 of the Social Security Am
endments of 1972.
SEC. 4159. PAYMENTS FOR MEDICAL EDUCATION COSTS.
(a) HOSPITAL GRADUATE MEDICAL EDUCATION RECOUPMENT-
(1) IN GENERAL- The Secretary of Health and Human Services may not,
before October 1, 1991, recoup payments from a hospital because of alleged overp
ayments to such hospital under part B of title XVIII of the Social Security Act
due to a determination that the amount of payments made for graduate medical edu
cation programs exceeds the amount allowable under section 1886(h).
(2) CAP ON ANNUAL AMOUNT OF RECOUPMENT- With respect to overpayments
to a hospital described in paragraph (1), the Secretary may not recoup more tha
n 25 percent of the amount of such overpayments from the hospital during a fisca
l year.
(3) EFFECTIVE DATE- Paragraphs (1) and (2) shall take effect October
1, 1990.
(b) UNIVERSITY HOSPITAL NURSING EDUCATION-
(1) IN GENERAL- The reasonable costs incurred by a hospital (or by a
n educational institution related to the hospital by common ownership or control
) during a cost reporting period for clinical training (as defined by the Secret
ary) conducted on the premises of the hospital under approved nursing and allied
health education programs that are not operated by the hospital shall be allowa
ble as reasonable costs under part B of title XVIII of the Social Security Act a
nd reimbursed under such part on a pass-through basis.
(2) CONDITIONS FOR REIMBURSEMENT- The reasonable costs incurred by a
hospital during a cost reporting period shall be reimbursable pursuant to parag
raph (1) only if--
(A) the hospital claimed and was reimbursed for such costs durin
g the most recent cost reporting period that ended on or before October 1, 1989;
(B) the proportion of the hospital's total allowable costs that
is attributable to the clinical training costs of the approved program, and allo
wable under (b)(1) during the cost reporting period does not exceed the proporti
on of total allowable costs that were attributable to clinical training costs du
ring the cost reporting period described in subparagraph (A);
(C) the hospital receives a benefit for the support it furnishes
to such program through the provision of clinical services by nursing or allied
health students participating in such program; and
(D) the costs incurred by the hospital for such program do not e
xceed the costs that would be incurred by the hospital if it operated the progra
m itself.
(3) PROHIBITION AGAINST RECOUPMENT OF COSTS BY SECRETARY-
(A) IN GENERAL- The Secretary of Health and Human Services may n
ot recoup payments from (or otherwise reduce or adjust payments under part B of
title XVIII of the Social Security Act to) a hospital because of alleged overpay
ments to such hospital under such title due to a determination that costs which
were reported by the hospital on its medicare cost reports for cost reporting pe
riods beginning on or after October 1, 1983, and before October 1, 1990, relatin
g to approved nursing and allied health education programs did not meet the requ
irements for allowable nursing and allied health education costs (as developed b
y the Secretary pursuant to section 1861(v) of such Act).
(B) REFUND OF AMOUNTS RECOUPED- If, prior to the date of the ena
ctment of this Act, the Secretary has recouped payments from (or otherwise reduc
ed or adjusted payments under part B of title XVIII of the Social Security Act t
o) a hospital because of overpayments described in subparagraph (A), the Secreta
ry shall refund the amount recouped, reduced, or adjusted from the hospital.
(4) SPECIAL AUDIT TO DETERMINE COSTS- In determining the amount of c
osts incurred by, claimed by, and reimbursed to, a hospital for purposes of this
subsection, the Secretary shall conduct a special audit (or use such other appr
opriate mechanism) to ensure the accuracy of such past claims and payments.
(5) EFFECTIVE DATE- Except as provided in paragraph (3), the provisi
ons of this subsection shall apply to cost reporting periods beginning on or aft
er October 1, 1990.
SEC. 4160. CERTIFIED REGISTERED NURSE ANESTHETISTS.
Section 1833(l) (42 U.S.C. 1395l) is amended--
(1) in paragraph (1)--
(A) by inserting `(A)' after `(1)'; and
(B) by adding at the end the following:
`(B) In establishing the fee schedule under this paragraph the Secretary
may utilize a system of time units, a system of base and time units, or any app
ropriate methodology.
`(C) The provisions of this subsection shall not apply to certain servic
es furnished in certain hospitals in rural areas under the provisions of section
9320(k) of the Omnibus Budget Reconciliation Act of 1986, as amended by section
6132 of the Omnibus Budget Reconciliation Act of 1989.';
(2) by striking the second sentence of paragraph (2); and
(3) by striking paragraph (4) and inserting the following:
`(4)(A) Except as provided in subparagraphs (C) and (D), in determining
the amount paid under the fee schedule under this subsection for services furnis
hed on or after January 1, 1991, by a certified registered nurse anesthetist who
is not medically directed--
`(i) the conversion factor shall be--
`(I) for services furnished in 1991, $15.50,
`(II) for services furnished in 1992, $15.75,
`(III) for services furnished in 1993, $16.00,
`(IV) for services furnished in 1994, $16.25,
`(V) for services furnished in 1995, $16.50,
`(VI) for services furnished in 1996, $16.75, and
`(VII) for services furnished in calendar years after 1996, the
previous year's conversion factor increased by the update determined under secti
on 1848(d)(3) for physician anesthesia services for that year;
`(ii) the payment areas to be used shall be the fee schedule areas u
sed under section 1848 (or, in the case of services furnished during 1991, the l
ocalities used under section 1842(b)) for purposes of computing payments for phy
sicians' services that are anesthesia services;
`(iii) the geographic adjustment factors to be applied to the conver
sion factor under clause (i) for services in a fee schedule area or locality is-
-
`(I) in the case of services furnished in 1991, the geographic w
ork index value and the geographic practice cost index value specified in sectio
n 1842(q)(1)(B) for physicians' services that are anesthesia services furnished
in the area or locality, and
`(II) in the case of services furnished after 1991, the geograph
ic work index value, the geographic practice cost index value, and the geographi
c malpractice index value used for determining payments for physicians' services
that are anesthesia services under section 1848,
with 70 percent of the conversion factor treated as attributable to w
ork and 30 percent as attributable to overhead for services furnished in 1991 (a
nd the portions attributable to work, practice expenses, and malpractice expense
s in 1992 and thereafter being the same as is applied under section 1848).
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`(B)(i) Except as provided in clause (ii) and subparagraph (D), in deter
mining the amount paid under the fee schedule under this subsection for services
furnished on or after January 1, 1991, by a certified registered nurse anesthet
ist who is medically directed, the Secretary shall apply the same methodology sp
ecified in subparagraph (A).
`(ii) The conversion factor used under clause (i) shall be--
`(I) for services furnished in 1991, $10.50,
`(II) for services furnished in 1992, $10.75,
`(III) for services furnished in 1993, $11.00,
`(IV) for services furnished in 1994, $11.25,
`(V) for services furnished in 1995, $11.50,
`(VI) for services furnished in 1996, $11.70, and
`(VII) for services furnished in calendar years after 1997, the prev
ious year's conversion factor increased by the update determined under section 1
848(d)(3) for physician anesthesia services for that year.
`(C) Notwithstanding subclauses (I) through (V) of subparagraph (A)(i)--
`(i) in the case of a 1990 conversion factor that is greater than $1
6.50, the conversion factor for a calendar year after 1990 and before 1996 shall
be the 1990 conversion factor reduced by the product of the last digit of the c
alendar year and one-fifth of the amount by which the 1990 conversion factor exc
eeds $16.50; and
`(ii) in the case of a 1990 conversion factor that is greater than $
15.49 but less than $16.51, the conversion factor for a calendar year after 1990
and before 1996 shall be the greater of--
`(I) the 1990 conversion factor, or
`(II) the conversion factor specified in subparagraph (A)(i) for
the year involved.
`(D) Notwithstanding subparagraph (C), in no case may the conversion fac
tor used to determine payment for services in a fee schedule area or locality un
der this subsection, as adjusted by the adjustment factors specified in subparag
raphs (A)(iii), exceed the conversion factor used to determine the amount paid f
or physicians' services that are anesthesia services in the area or locality.'.<
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SEC. 4161. COMMUNITY HEALTH CENTERS AND RURAL HEALTH CLINICS.
(a) COMMUNITY HEALTH CENTERS-
(1) COVERAGE- Section 1861(s)(2)(E) of the Social Security Act (42 U
.S.C. 1395x(s)(2)(E)) is amended by inserting `and Federally qualified health ce
nter services' after `rural health clinic services'.
(2) SERVICES DEFINED- Section 1861(aa) of such Act is amended--
(A) in the heading, by adding at the end the following: `and Fed
erally Qualified Health Center Services',
(B) in paragraph (3), by striking `paragraphs (1) and (2)' and i
nserting `the previous provisions of this subsection' and by redesignating such
paragraph and paragraph (4) as paragraph (5) and (6), respectively, and
(C) by inserting after paragraph (2) the following new paragraph
s:
`(3) The term `Federally qualified health center services' means--
`(A) services of the type described in subparagraphs (A) through (C)
of paragraph (1), and
`(B) preventive primary health services that a center is required to
provide under sections 329, 330, and 340 of the Public Health Service Act,
when furnished to an individual as an outpatient of a Federally qualified
health center and, for this purpose, any reference to a rural health clinic or
a physician described in paragraph (2)(B) is deemed a reference to a Federally q
ualified health center or a physician at the center, respectively.
`(4) The term `Federally qualified health center' means an entity which-
-
`(A)(i) is receiving a grant under section 329, 330, or 340 of the P
ublic Health Service Act, or
`(ii)(I) is receiving funding from such a grant under a contract wit
h the recipient of such a grant, and (II) meets the requirements to receive a gr
ant under section 329, 330, or 340 of such Act;
`(B) based on the recommendation of the Health Resources and Service
s Administration within the Public Health Service, is determined by the Secretar
y to meet the requirements for receiving such a grant; or
`(C) was treated by the Secretary, for purposes of part B, as a comp
rehensive Federally funded health center as of January 1, 1990.'.
(3) PAYMENTS-
(A) IN GENERAL- Section 1832(a)(2)(D) of such Act (42 U.S.C. 139
5k(a)(2)(D)) is amended by inserting `(i)' after `(D)' and by inserting `and (ii
) Federally qualified health center services' after `rural health clinic service
s'.
(B) DEDUCTIBLE DOES NOT APPLY- The first sentence of section 183
3(b) of such Act (42 U.S.C. 1395l(b)) is amended--
(i) by striking `and' before `(4)',
(ii) by inserting before the period at the end the following
: `, and (5) such deductible shall not apply to Federally qualified health cente
r services'.
(C) EXCLUSION FROM PAYMENT REMOVED- Section 1862(a) of such Act
(42 U.S.C. 1395y(a)) is amended--
(i) in paragraph (2), by inserting `, except in the case of
Federally qualified health center services' before the semicolon at the end, and
(ii) in paragraph (3), by inserting `, in the case of Federa
lly qualified health center services, as defined in section 1861(aa)(3),' after
`1861(aa)(1),', and
(iii) by adding at the end the following new sentence:
<
/ul>`Paragraph (7) shall not apply to Federally qualified health center servi
ces described in section 1861(aa)(3)(B).'.
(4) WAIVER OF ANTI-KICKBACK REQUIREMENT- Section 1128B(b)(3) of such
Act (42 U.S.C. 1320a-7b(b)(3)) is amended--
<
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(A) by striking `and' at the end of subparagraph (C),
(B) by redesignating subparagraph (D) as subparagraph (E), and
(C) by inserting after subparagraph (C) the following new subpar
agraph:
`(D) a waiver of any coinsurance under part B of title XVIII by a Fe
derally qualified health care center with respect to an individual who qualifies
for subsidized services under a provision of the Public Health Service Act; and
'.
(5) CONFORMING AMENDMENTS- Section 1861 of such Act (42 U.S.C. 1395x
) is further amended--
(A) in subsections (s)(2)(H)(i) and (s)(2)(K), by striking `subs
ection (aa)(3)' and `subsection (aa)(4)' each place either appears inserting `su
bsection (aa)(5)' and `subsection (aa)(6)', respectively, and
(B) in subsection (aa)(1)(B), by striking `paragraph (3)' and in
serting `paragraph (5)'.
(6) PRRB REVIEW OF COST REPORTS FOR FEDERALLY QUALIFIED HEALTH CENTE
RS- Section 1878 of the Social Security Act (42 U.S.C. 1395oo) is amended by add
ing at the end the following new subsection:
`(j) In this section, the term `provider of services' includes a Federal
ly qualified health center.'.
(7) GAO study of hospital staff privileges for physicians practicing
in community health centers-
(A) STUDY- The Comptroller General shall conduct a study of whet
her physicians practicing in community and migrant health centers are able to ob
tain admitting privileges at local hospitals. The study shall review--
(i) how many physicians practicing in such centers are witho
ut hospital admitting privileges or have been denied admitting privileges at a l
ocal hospital, and
(i)(I) the criteria hospitals use in deciding whether to gra
nt admitting privileges and (II) whether such criteria act as significant barrie
rs to health center physicians obtaining hospital privileges.
(B) REPORT- By not later than 18 months after the date of the en
actment of this Act, the Comptroller General shall submit a report on the study
under subparagraph (A) to the Committees on Ways and Means and Energy and Commer
ce of the House of Representatives and shall include in such report such recomme
ndations as the Comptroller General deems appropriate.
(8) EFFECTIVE DATE- (A) Subject to subparagraphs (B) and (C), the am
endments made by this section shall apply to services furnished on or after Octo
ber 1, 1991.
(B) In the case of a Federally qualified health care center that has
elected, as of January 1, 1990, under part B of title XVIII of the Social Secur
ity Act, to have the amount of payments for services under such part determined
on a reasonable-charge basis, the amendment made by paragraph (3)(A) shall only
apply on and after such date (not earlier than October 1, 1991) as the center ma
y elect.
(C) The amendment made by paragraph (6) shall apply to cost reports
for periods beginning on or after October 1, 1991.
(b) RURAL HEALTH CLINIC SERVICES-
(1) EXPEDITED CERTIFICATION- Section 1861(aa)(2) of the Social Secur
ity Act (42 U.S.C. 1395x(aa)(2)) is amended by adding at the end the following:
`If a State agency has determined under section 1864(a) that a facility is a rur
al health clinic and the facility has applied to the Secretary for certification
as such a clinic, the Secretary shall notify the facility of the the Secretary'
s approval or disapproval of the certification not later than 60 days after the
date of the State agency determination or the application (whichever is later).'
.
(2) TEMPORARY WAIVER OF STAFFING REQUIREMENTS- Section 1861(aa) of s
uch Act, as amended by subsection (a), is further amended by adding at the end t
he following new paragraph:
`(7)(A) The Secretary shall waive for a 1-year period the requirements o
f paragraph (2) that a rural health clinic employ a physician assistant, nurse p
ractitioner or certified nurse midwife or that such clinic require such provider
s to furnish services at least 50 percent of the time that the clinic operates f
or any facility that requests such waiver if the facility demonstrates that the
facility has been unable, despite reasonable efforts, to hire a physician assist
ant, nurse practitioner, or certified nurse-midwife in the previous 90-day perio
d.
`(B) The Secretary may not grant such a waiver under subparagraph (A) to
a facility if the request for the waiver is made less than 6 months after the d
ate of the expiration of any previous such waiver for the facility.
`(C) A waiver which is requested under this paragraph shall be deemed gr
anted unless such request is denied by the Secretary within 60 days after the da
te such request is received.'.
(3) PRODUCTIVITY SCREENS- In employing any screening guideline in de
termining the productivity of physicians, physician assistants, nurse practition
ers, and certified nurse-midwives in a rural health clinic, the Secretary of Hea
lth and Human Services shall provide that the guideline shall take into account
the combined services of such staff (and not merely the service within each clas
s of practitioner).
(4) PRRB REVIEW OF COST REPORTS FOR RURAL HEALTH CENTERS- Section 18
78(j) of the Social Security Act (42 U.S.C. 1395oo(j)), as added by subsection (
a)(6), is amended by inserting `a rural health clinic and' after `includes'.
(5) EFFECTIVE DATE- This subsection shall take effect on October 1,
1991, except that the amendment made by paragraph (4) shall apply to cost report
s for periods beginning on or after October 1, 1991.
(a) IN GENERAL- Section 1861(ff)(3) of the Social Security Act (42 U.S.C
. 1395x(ff)(3)) is amended--
(1) by striking `(3)' and inserting `(3)(A)';
(2) by striking `outpatients' and inserting `outpatients or by a com
munity mental health center (as defined in subparagraph (B)),'; and
(3) by adding at the end the following new subparagraph:
`(B) For purposes of subparagraph (A), the term `community mental health
center' means an entity--
`(i) providing the services described in section 1916(c)(4) of the P
ublic Health Service Act; and
`(ii) meeting applicable licensing or certification requirements for
community mental health centers in the State in which it is located.'.
(b) CONFORMING AMENDMENTS- (1) Section 1832(a)(2) of such Act (42 U.
S.C. 1395k(a)(2)) as amended by section 4153(a)(2)(A), is amended--
<
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(A) by striking `and' at the end of subparagraph (H);
(B) by striking the period at the end of subparagraph (I) and in
serting `; and'; and
(C) by adding at the end the following new subparagraph:
`(J) partial hospitalization services provided by a community me
ntal health center (as described in section 1861(ff)(2)(B)).'.
(2) Section 1866(e) of such Act (42 U.S.C. 1395cc(e))) 16
`(1) a clinic, rehabilitation agency, or public health agency if, in
the case of a clinic or rehabilitation agency, such clinic or agency meets the
requirements of section 1861(p)(4)(A) (or meets the requirements of such section
through the operation of section 1861(g)), or if, in the case of a public healt
h agency, such agency meets the requirements of section 1861(p)(4)(B) (or meets
the requirements of such section through the operation of section 1861(g)), but
only with respect to the furnishing of outpatient physical therapy services (as
therein defined) or (through the operation of section 1861(g)) with respect to t
he furnishing of outpatient occupational therapy services; and
`(2) a community mental health center (as defined in section 1861(ff
)(3)(B)), but only with respect to the furnishing of partial hospitalization ser
vices (as described in section 1861(ff)(1)).'.
(c) EFFECTIVE DATE- The amendments made by subsections (a) and (b) shall
apply with respect to partial hospitalization services provided on or after Oct
ober 1, 1991.
SEC. 4163. COVERAGE OF SCREENING MAMMOGRAPHY.
(a) IN GENERAL- Section 1861 of the Social Security Act (42 U.S.C. 1395x
) is amended--
(1) in subsection (s)--
(A) in paragraph (11), by striking all that follows `(bb))' and
inserting a semicolon,
(B) in paragraph (12)(C), by striking all that follows `area)' a
nd inserting `; and', and
(C) by inserting after paragraph (12) the following new paragrap
h:
`(13) screening mammography (as defined in subsection (jj));'; and
(2) by inserting after subsection (ii) the following new subsection:
`(jj) The term `screening mammography' means a radiologic procedure prov
ided to a woman for the purpose of early detection of breast cancer and includes
a physician's interpretation of the results of the procedure.'.
(b) PAYMENT AND COVERAGE- Section 1834 of such Act (42 U.S.C. 1395m) is
amended--
(1) in subsection (b)(1)(B), by inserting `and subject to subsection
(c)(1)(A)' after `conversion factors', and
(2) by inserting after subsection (b) the following new subsection:<
/ul>
`(c) PAYMENTS AND STANDARDS FOR SCREENING MAMMOGRAPHY-
`(1) IN GENERAL- Notwithstanding any other provision of this part, w
ith respect to expenses incurred for screening mammography (as defined in sectio
n 1861(jj))--
`(A) payment may be made only for screening mammography conducte
d consistent with the frequency permitted under paragraph (2);
`(B) payment may be made only if the screening mammography meets
the quality standards established under paragraph (3); and
`(C) the amount of the payment under this part shall, subject to
the deductible established under section 1833(b), be equal to 80 percent of the
least of--
`(i) the actual charge for the screening,
`(ii) the fee schedule established under subsection (b) or t
he fee schedule established under section 1848, whichever is applicable, with re
spect to both the professional and technical components of the screening mammogr
aphy, or
`(iii) the limit established under paragraph (4) for the scr
eening mammography.
`(2) FREQUENCY COVERED-
`(A) IN GENERAL- Subject to revision by the Secretary under subp
aragraph (B)--
`(i) No payment may be made under this part for screening ma
mmography performed on a woman under 35 years of age.
`(ii) Payment may be made under this part for only 1 screeni
ng mammography performed on a woman over 34 years of age, but under 40 years of
age.
`(iii) In the case of a woman over 39 years of age, but unde
r 50 years of age, who--
`(I) is at a high risk of developing breast cancer (as d
etermined pursuant to factors identified by the Secretary), payment may not be m
ade under this part for a screening mammography performed within the 11 months f
ollowing the month in which a previous screening mammography was performed, or
`(II) is not at a high risk of developing breast cancer,
payment may not be made under this part for a screening mammography performed w
ithin the 23 months following the month in which a previous screening mammograph
y was performed.
`(iv) In the case of a woman over 49 years of age, but under
65 years of age, payment may not be made under this part for screening mammogra
phy performed within 11 months following the month in which a previous screening
mammography was performed.
`(v) In the case of a woman over 64 years of age, payment ma
y not be made for screening mammography performed within 23 months following the
month in which a previous screening mammography was performed.
`(B) REVISION OF FREQUENCY-
`(i) REVIEW- The Secretary, in consultation with the Directo
r of the National Cancer Institute, shall review periodically the appropriate fr
equency for performing screening mammography, based on age and such other factor
s as the Secretary believes to be pertinent.
`(ii) REVISION OF FREQUENCY- The Secretary, taking into cons
ideration the review made under clause (i), may revise from time to time the fre
quency with which screening mammography may be paid for under this subsection, b
ut no such revision shall apply to screening mammography performed before Januar
y 1, 1992.
`(3) QUALITY STANDARDS- The Secretary shall establish standards to a
ssure the safety and accuracy of screening mammography performed under this part
. Such standards shall include the requirements that--
`(A) the equipment used to perform the mammography must be speci
fically designed for mammography and must meet radiologic standards established
by the Secretary for mammography;
`(B) the mammography must be performed by an individual who--
`(i) is licensed by a State to perform radiological procedur
es, or
`(ii) is certified as qualified to perform radiological proc
edures by such an appropriate organization as the Secretary specifies in regulat
ions;
`(C) the results of the mammography must be interpreted by a phy
sician--
`(i) who is certified as qualified to interpret radiological
procedures by such an appropriate board as the Secretary specifies in regulatio
ns, or
`(ii) who is certified as qualified to interpret screening m
ammography procedures by such a program as the Secretary recognizes in regulatio
n as assuring the qualifications of the individual with respect to such interpre
tation; and
`(D) with respect to the first screening mammography performed o
n a woman for which payment is made under this part, there are satisfactory assu
rances that the results of the mammography will be placed in permanent medical r
ecords maintained with respect to the woman.
`(4) LIMIT-
`(A) $55, INDEXED- Except as provided by the Secretary under sub
paragraph (B), the limit established under this paragraph--
`(i) for screening mammography performed in 1991, is $55, an
d
`(ii) for screening mammography performed in a subsequent ye
ar is the limit established under this paragraph for the preceding year increase
d by the percentage increase in the MEI for that subsequent year.
`(B) REDUCTION OF LIMIT- The Secretary shall review from time to
time the appropriateness of the amount of the limit established under this para
graph. The Secretary may, with respect to screening mammography performed in a y
ear after 1992, reduce the amount of such limit as it applies nationally or in a
ny area to the amount that the Secretary estimates is required to assure that sc
reening mammography of an appropriate quality is readily and conveniently availa
ble during the year.
`(C) APPLICATION OF LIMIT IN HOSPITAL OUTPATIENT SETTING- The Se
cretary shall provide for an appropriate allocation of the limit established und
er this paragraph between professional and technical components in the case of h
ospital outpatient screening mammography (and comparable situations) where there
is a claim for professional services separate from the claim for the radiologic
procedure.
`(5) LIMITING CHARGES OF NONPARTICIPATING PHYSICIANS-
`(A) IN GENERAL- In the case of mammography screening performed
on or after January 1, 1991, for which payment is made under this subsection, if
a nonparticipating physician or supplier provides the screening to an individua
l entitled to benefits under this part, the physician or supplier may not charge
the individual more than the limiting charge (as defined in subparagraph (B), o
r if less, as defined in subsection (b)(5)(B) or as defined in section 1848(g)(2
)).
`(B) LIMITING CHARGE DEFINED- In subparagraph (A), the term `lim
iting charge' means, with respect to screening mammography performed--
`(i) in 1991, 125 percent of the limit established under par
agraph (4),
`(ii) in 1992, 120 percent of the limit established under pa
ragraph (4), or
`(iii) after 1992, 115 percent of the limit established unde
r paragraph (4).
`(C) ENFORCEMENT- If a physician or supplier knowing and willful
ly imposes a charge in violation of subparagraph (A), the Secretary may apply sa
nctions against such physician or supplier in accordance with section 1842(j)(2)
.'.
(c) CERTIFICATION OF SCREENING MAMMOGRAPHY QUALITY STANDARDS-
(1) Section 1863 of such Act (42 U.S.C. 1395z) is amended by inserti
ng `or whether screening mammography meets the standards established under secti
on 1834(c)(3),' after `1832(a)(2)(F)(i),'.
(2) The first sentence of section 1864(a) of such Act (42 U.S.C. 139
5aa(a)) is amended by inserting before the period the following: `, or whether s
creening mammography meets the standards established under section 1834(c)(3)'.<
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(3) Section 1865(a) of such Act (42 U.S.C. 1395bb(a)) is amended by
inserting `1834(c)(3),' after `1832(a)(2)(F)(i),'.
(d) CONFORMING AMENDMENTS-
(1) Section 1833(a)(2)(E) of such Act (42 U.S.C. 1395l(a)(2)(E)) is
amended by inserting `, but excluding screening mammography' after `imaging serv
ices'.
(2) Section 1862(a) of such Act (42 U.S.C. 1395y(a)) is amended--
(A) in paragraph (1)--
(i) in subparagraph (A), by striking `subparagraph (B), (C),
(D), or (E)' and inserting `a succeeding subparagraph',
(ii) in subparagraph (D), by striking `and' at the end,
(iii) in subparagraph (E), by striking the semicolon at the
end and inserting `, and', and
(iv) by adding at the end the following new subparagraph:
`(F) in the case of screening mammography, which is performed more f
requently than is covered under section 1834(c)(2) or which does not meet the st
andards established under section 1834(c)(3), and, in the case of screening pap
smear, which is performed more frequently than is provided under section 1861(nn
);'; and
(B) in paragraph (7), by inserting `or under paragraph (1)(F)' a
fter `(1)(B)'.
(e) EFFECTIVE DATE- The amendments made by this section shall apply to s
creening mammography performed on or after January 1, 1991.
(a) EXTENSION OF DEMONSTRATIONS-
(1) PREVENTION DEMONSTRATIONS- Section 9314 of the Consolidated Omni
bus Budget Reconciliation Act of 1985, as amended by section 9344 of the Omnibus
Budget Reconciliation Act of 1986, is amended--
(A) in subsection (a), by striking `4-year' and inserting `5-yea
r';
(B) in subsection (e)(2), by striking `Not later than five years
after the date of the enactment of this Act, the Secretary shall submit a final
report' and inserting `Not later than April 1, 1993, the Secretary shall submit
an interim report';
(C) in subsection (e), by adding at the end the following new pa
ragraph:
`(3) Not later than April 1, 1995, the Secretary shall submit a final re
port to those Committees on the demonstration program and shall include in the r
eport a comprehensive evaluation of the long-term effects of the program.'. 17
(D) in subsection (f), by striking `$5,900,000' and inserting `$
7,500,000'; and
(E) in subsection (f), by inserting before the period at the end
the following: `and shall not exceed $3,000,000 for the comprehensive evaluatio
n referred to in subsection (e)(3)'.
(2) ALZHEIMER'S DISEASE DEMONSTRATION PROJECTS- Section 9342 of the
Omnibus Budget Reconciliation Act of 1986 is amended--
(A) in subsection (c)(1), by striking `3 years' and inserting `4
years';
(B) in subsection (d)(1), by striking `third year' and inserting
`fourth year';
(C) in subsection (f)--
(i) by striking `$40,000,000' and inserting `$55,000,000', a
nd
(ii) by striking `$2,000,000' and inserting `$3,000,000'.
(b) DISCLOSURE OF OWNERSHIP-
(1) IN GENERAL- Title XI of the Social Security Act is amended by in
serting after section 1124 the following new section:
`DISCLOSURE REQUIREMENTS FOR OTHER PROVIDERS UNDER PART B OF MEDICARE
`SEC. 1124A. (a) DISCLOSURE REQUIRED TO RECEIVE PAYMENT- No payment may
be made under part B of title XVIII for items or services furnished by any discl
osing part B provider unless such provider has provided the Secretary with full
and complete information--
`(1) on the identity of each person with an ownership or control int
erest in the provider or in any subcontractor (as defined by the Secretary in re
gulations) in which the provider directly or indirectly has a 5 percent or more
ownership interest; and
`(2) with respect to any person identified under paragraph (1) or an
y managing employee of the provider--
`(A) on the identity of any other entities providing items or se
rvices for which payment may be made under title XVIII of the Social Security Ac
t with respect to which such person or managing employee is a person with an own
ership or control interest at the time such information is supplied or at any ti
me during the 3-year period ending on the date such information is supplied, and
`(B) as to whether any penalties, assessments, or exclusions hav
e been assessed against such person or managing employee under section 1128, 112
8A, or 1128B.
`(b) UPDATES TO INFORMATION SUPPLIED- A disclosing part B provider shall
notify the Secretary of any changes or updates to the information supplied unde
r subsection (a) not later than 180 days after such changes or updates take effe
ct.
`(c) DEFINITIONS- For purposes of this section--
`(1) the term `disclosing part B provider' means any entity receivin
g payment on an assignment-related basis for furnishing items or services for wh
ich payment may be made under part B of title XVIII, except that such term does
not include an entity described in section 1124(a)(2);
`(2) the term `managing employee' means, with respect to a provider,
a person described in section 1126(b); and
`(3) the term `person with an ownership or control interest' means,
with respect to a provider--
`(A) a person described in section 1124(a)(3), or
`(B) a person who has one of the 5 largest direct or indirect ow
nership or control interests in the provider.'.
(2) CRIMINAL PENALTY FOR PROVIDING FALSE INFORMATION- Section 1128B(
c) of such Act (42 U.S.C. 1320a-7b(c)) is amended by striking `health care progr
am' and inserting `health care program, or with respect to information required
to be provided under section 1124A,'.
(3) FAILURE TO PROVIDE INFORMATION AS GROUNDS FOR PERMISSIVE EXCLUSI
ON FROM PROGRAM- Section 1128(b)(9) of such Act (42 U.S.C. 1320a-7(b)(9)) is ame
nded by striking `1124' and inserting `1124, section 1124A,'.
(4) EFFECTIVE DATE- The amendments made by paragraph (1), (2), and (
3) shall apply with respect to items or services furnished on or after--
(A) January 1, 1993, in the case of items or services furnished
by a provider who, on or before the date of the enactment of this Act, has furni
shed items or services for which payment may be made under part B of title XVIII
of the Social Security Act; or
(B) January 1, 1992, in the case of items or services furnished
by any other provider.
(c) DIRECTORY OF UNIQUE PHYSICIAN IDENTIFIER NUMBERS- Not later than Mar
ch 31, 1991, the Secretary of Health and Human Services shall publish a director
y of the unique physician identification numbers of all physicians providing ser
vices for which payment may be made under part B of title XVIII of the Social Se
curity Act, and shall include in such directory the names, provider numbers, and
billing addressess of all listed physicians.
PART 3--PROVISIONS RELATING TO PARTS A AND B
SEC. 4201. PROVISIONS RELATING TO END STAGE RENAL DISEASE.
(a) INCREASE IN COMPOSITE RATES- Section 9335(a)(1) of the Omnibus Budge
t Reconciliation Act of 1986, as amended by section 6203(a)(1) of the Omnibus Bu
dget Reconciliation Act of 1989, is amended--
(1) by striking `October 1, 1990,' and inserting `December 31, 1990,
'; and
(2) by inserting after the first sentence the following: `With respe
ct to services furnished on or after January 1, 1991, such base rate shall be eq
ual to the respective rate in effect as of September 30, 1990 (determined withou
t regard to any reductions imposed pursuant to section 6201 of the Omnibus Budge
t Reconciliation Act of 1989), increased by $1.00.'.
(b) PROPAC STUDY ON ESRD COMPOSITE RATES-
(1) IN GENERAL-
(A) STUDY- The Prospective Payment Assessment Commission (in thi
s subsection referred to as the `Commission') shall conduct a study to determine
the costs and services and profits associated with various modalities of dialys
is treatments provided to end stage renal disease patients provided under title
XVIII of the Social Security Act.
(B) RECOMMENDATIONS- Based on information collected for the stud
y described in subparagraph (A), the Commission shall make recommendations to Co
ngress regarding the method or methods and the levels at which the payments made
for the facility component of dialysis services by providers of service and ren
al dialysis facilities under title XVIII of the Social Security Act should be es
tablished for dialysis services furnished during fiscal year 1993 and the method
ology to be used to update such payments for subsequent fiscal years. In making
recommendations concerning the appropriate methodology the Commission shall cons
ider--
(i) hemodialysis and other modalities of treatment,
(ii) the appropriate services to be included in such payment
s,
(iii) the adjustment factors to be incorporated including fa
cility characteristics, such as hospital versus free-standing facilities, urban
versus rural, size and mix of services,
(iv) adjustments for labor and nonlabor costs,
(v) comparative profit margins for all types of renal dialys
is providers of service and renal dialysis facilities,
(vi) adjustments for patient complexity, such as age, diagno
sis, case mix, and pediatric services, and
(vii) efficient costs related to high quality of care and po
sitive outcomes for all treatment modalities.
(2) REPORT- Not later than June 1, 1992, the Commission shall submit
a report to the Committee on Finance of the Senate, and the Committees on Ways
and Means and Energy and Commerce of the House of Representatives on the study c
onducted under paragraph (1)(A) and shall include in the report the recommendati
ons described in paragraph (1)(B), taking into account the factors described in
paragraph (1)(B).
(3) ANNUAL REPORT- The Commission, not later than March 1 before the
beginning of each fiscal year (beginning with fiscal year 1993) shall report it
s recommendations to the Committee on Finance of the Senate and the Committees o
n Ways and Means and Energy and Commerce of the House of Representatives on an a
ppropriate change factor which should be used for updating payments for services
rendered in that fiscal year. The Commission in making such report to Congress
shall consider conclusions and recommendations available from the Institute of M
edicine.
(c) PAYMENT RATES FOR ERYTHROPOIETIN-
(1) IN GENERAL- Section 1881(b)(11) of the Social Security Act (42 U
.S.C. 1395rr(b)) is amended--
(A) by striking `(11)' and inserting `(11)(A)'; and
(B) by adding at the end the following new subparagraph:
`(B) Erythropoietin, when provided to a patient determined to have end s
tage renal disease, shall not be included as a dialysis service for purposes of
payment under any prospective payment amount or comprehensive fee established un
der this section, and payment for such item shall be made separately--
`(i) in the case of erythropoietin provided by a physician, in accor
dance with section 1833; and
`(ii) in the case of erythropoietin provided by a provider of servic
es, renal dialysis facility, or other supplier of home dialysis supplies and equ
ipment--
`(I) for erythropoietin provided during 1991, in an amount equal
to $11 per thousand units (rounded to the nearest 100 units), and
`(II) for erythropoietin provided during a subsequent year, in a
n amount determined to be appropriate by the Secretary, except that such amount
may not exceed the amount determined under this clause for the previous year inc
reased by the percentage increase (if any) in the implicit price deflator for gr
oss national product (as published by the Department of Commerce) for the second
quarter of the preceding year over the implicit price deflator for the second q
uarter of the second preceding year.'.
(2) EFFECTIVE DATE- The amendments made by paragraph (1) shall apply
to erythropoietin furnished on or after January 1, 1991.
(d) SELF-ADMINISTERED ERYTHROPOIETIN-
(1) COVERAGE- Section 1861(s)(2) (42 U.S.C. 1395x(s)(2)) as amended
by section 4156(a)(1), is amended--
<
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(A) by striking `and' at the end of subparagraph (N);
(B) by adding `and' at the end of subparagraph (O); and
(C) by adding at the end the following new subparagraph:
`(P) erythropoietin for home dialysis patients competent to use
such drug without medical or other supervision with respect to the administratio
n of such drug, subject to methods and standards established by the Secretary by
regulation for the safe and effective use of such drug, and items related to th
e administration of such drug;'.
(2) COVERAGE FOR METHOD II PATIENTS- Section 1881(b) (42 U.S.C. 1395
rr(b)) is further amended--
(A) in paragraph (1)--
(B) by striking `and (B)' and inserting `(B), 18
(C) by striking `equipment.' and inserting `equipment, and (C) p
ayments to a supplier of home dialysis supplies and equipment that is not a prov
ider of services, a renal dialysis facility, or a physician for self-administere
d erythropoietin as described in section 1861(s)(2)(Q) if the Secretary finds th
at the patient receiving such drug from such a supplier can safely and effective
ly administer the drug (in accordance with the applicable methods and standards
established by the Secretary pursuant to such section).'; and
(3) by adding at the end of paragraph (11), as amended by subsection
(c), the following new subparagraph:
`(C) The amount payable to a supplier of home dialysis supplies and equi
pment that is not a provider of services, a renal dialysis facility, or a physic
ian for erythropoietin shall be determined in the same manner as the amount paya
ble to a renal dialysis facility for such item.'.
(3) EFFECTIVE DATE- The amendments made by paragraphs (1) and (2) sh
all apply to items and services furnished on or after July 1, 1991.
(a) ESTABLISHMENT-
(1) IN GENERAL- Not later than 9 months after the date of the enactm
ent of this Act, the Secretary of Health and Human Services shall establish and
carry out a 3-year demonstration project to determine whether the services of a
home dialysis staff assistant providing services to a patient during hemodialysi
s treatment at the patient's home may be covered under the medicare program in a
cost-effective manner that ensures patient safety.
(2) NUMBER OF PARTICIPANTS- The total number of eligible patients re
ceiving services under the demonstration project established under paragraph (1)
may not exceed 800.
(b) PAYMENTS TO PARTICIPATING PROVIDERS AND FACILITIES-
(1) SERVICES FOR WHICH PAYMENT MAY BE MADE-
(A) IN GENERAL- Under the demonstration project established unde
r subsection (a), the Secretary shall make payments for 3 years under title XVII
I of the Social Security Act to providers of services (other than a skilled nurs
ing facility) or renal dialysis facilities for services of a home hemodialysis s
taff assistant provided to an individual described in subsection (c) during hemo
dialysis treatment at the individual's home in an amount determined under paragr
aph (2).
(B) SERVICES DESCRIBED- For purposes of subparagraph (A), the te
rm `services of a home hemodialysis staff assistant' means--
(i) technical assistance with the operation of a hemodialysi
s machine in the patient's home and with such patient's care during in-home hemo
dialysis; and
(ii) administration of medications within the patient's home
to maintain the patency of the extra corporeal circuit.
(2) AMOUNT OF PAYMENT-
(A) IN GENERAL- Payment to a provider of services or renal dialy
sis facility participating in the demonstration project established under subsec
tion (a) for the services described in paragraph (1) shall be prospectively dete
rmined by the Secretary, made on a per treatment basis, and shall be in an amoun
t determined under subparagraph (B).
(B) DETERMINATION OF PAYMENT AMOUNT- (i) The amount of payment m
ade under subparagraph (A) shall be the product of--
(I) the rate determined under clause (ii) with respect to a
provider of services or a renal dialysis facility; and
(II) the factor by which the labor portion of the composite
rate determined under section 1881(b)(7) of the Social Security Act is adjusted
for differences in area wage levels.
(ii) The rate determined under this clause, with respect to a pr
ovider of services or renal dialysis facility, shall be equal to the difference
between--
(I) two-thirds of the labor portion of the composite rate ap
plicable under section 1881(b)(7) of such Act to the provider or facility (as ad
justed to reflect differences in area wage levels), and
(II) the product of the national median hourly wage for a ho
me hemodialysis staff assistant and the national median time expended in the pro
vision of home hemodialysis staff assistant services (taking into account time e
xpended in travel and predialysis patient care).
(iii) For purposes of clause (ii)(II)--
(I) the national median hourly wage for a home hemodialysis
staff assistant and the national median average time expended for home hemodialy
sis staff assistant services shall be determined annually on the basis of the mo
st recent data available, and
(II) the national median hourly wage for a home hemodialysis
staff assistant shall be the sum of 65 percent of the national median hourly wa
ge for a licensed practical nurse and 35 percent of the national median hourly w
age for a registered nurse.
(C) PAYMENT AS ADD-ON TO COMPOSITE RATE- The amount of payment d
etermined under this paragraph shall be in addition to the amount of payment oth
erwise made to the provider of services or renal dialysis facility under section
1881(b) of such Act.
(c) INDIVIDUALS ELIGIBLE TO RECEIVE SERVICES UNDER PROJECT-
(1) IN GENERAL- An individual may receive services from a provider o
f services or renal dialysis facility participating in the demonstration project
if--
(A) the individual is not a resident of a skilled nursing facili
ty;
(B) the individual is an end stage renal disease patient entitle
d to benefits under title XVIII of the Social Security Act;
(C) the individual's physician certifies that the individual is
confined to a bed or wheelchair and cannot transfer themselves from a bed to a c
hair;
(D) the individual has a serious medical condition (as specified
by the Secretary) which would be exacerbated by travel to and from a dialysis f
acility;
(E) the individual is eligible for ambulance transportation to r
eceive routine maintenance dialysis treatments, and, based on the individual's m
edical condition, there is reasonable expectation that such transportation will
be used by the individual for a period of at least 6 consecutive months, such th
at the cost of ambulance transportation can reasonably be expected to meet or ex
ceed the cost of home hemodialysis staff assistance as provided under subsection
(b)(4); and
(F) no family member or other individual is available to provide
such assistance to the individual.
(2) COVERAGE OF INDIVIDUALS CURRENTLY RECEIVING SERVICES- Any indivi
dual who, on the date of the enactment of this Act, is receiving staff assistanc
e under the experimental authority provided under section 1881(f)(2) of the Soci
al Security Act shall be deemed to be an eligible individual for purposes of thi
s subsection.
(3) CONTINUATION OF COVERAGE UPON TERMINATION OF PROJECT- Notwithsta
nding any provision of title XVIII of the Social Security Act, any individual re
ceiving services under the demonstration project established under subsection (a
) as of the date of the termination of the project shall continue to be eligible
for home hemodialysis staff assistance after such date under such title on the
same terms and conditions as applied under the demonstration project.
(d) QUALIFICATIONS FOR HOME HEMODIALYSIS STAFF ASSISTANTS- For purposes
of subsection (b), a home dialysis aide is qualified if the aide--
(1) meets minimum qualifications as specified by the Secretary; and<
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(2) meets any applicable qualifications as specified under the law o
f the State in which the home hemodialysis staff assistant is providing services
.
(e) REPORTS-
(1) INTERIM STATUS REPORT- Not later than December 1, 1992, the Secr
etary shall submit to Congress a preliminary report on the status of the demonst
ration project established under subsection (a).
(2) FINAL REPORT- Not later than December 31, 1995, the Secretary sh
all submit to Congress a final report evaluating the project, and shall include
in such report recommendations regarding appropriate eligibility criteria and co
st-control mechanisms for medicare coverage of the services of a home dialysis a
ide providing medical assistance to a patient during hemodialysis treatment at t
he patient's home.
(f) AUTHORIZATION OF APPROPRIATIONS- The Secretary shall provide for the
transfer from the Federal Supplementary Medical Insurance Trust Fund (establish
ed under section 1841 of the Social Security Act) of not more than the following
amounts to carry out the demonstration project established under subsection (a)
(without regard to amounts appropriated in advance in appropriation Acts):
(1) For fiscal year 1991, $4,000,000.
(2) For fiscal year 1992, $4,000,000.
(3) For fiscal year 1993, $3,000,000.
(4) For fiscal year 1994, $2,000,000.
(5) For fiscal year 1995, $1,000,000.
SEC. 4203. EXTENSION OF SECONDARY PAYOR PROVISIONS.
(a) EXTENSION OF TRANSFER OF DATA-
(1) Section 1862(b)(5)(C)(iii) (42 U.S.C. 1395y(b)(5)(C)(iii)) is am
ended by striking `September 30, 1991' and inserting `September 30, 1995'.
<
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(2) Section 6103(l)(12)(F) of the Internal Revenue Code of 1986 is a
mended--
(A) in clause (i), by striking `September 30, 1991' and insertin
g `September 30, 1995';
(B) in clause (ii)(I), by striking `1990' and inserting `1994';
and
(C) in clause (ii)(II), by striking `1991' and inserting `1995'.
(b) EXTENSION OF APPLICATION TO DISABLED BENEFICIARIES- Section 1862(b)(
1)(B)(iii) (42 U.S.C. 1395y(b)(1)(B)(iii)) is amended by striking `January 1, 19
92' and inserting `October 1, 1995'.
(c) INDIVIDUALS WITH END STAGE RENAL DISEASE-
(1) IN GENERAL- Section 1862(b)(1)(C) (42 U.S.C. 1395y(b)(1)(C)) is
amended--
(A) in clause (i), by striking `during the 12-month period' and
all that follows and inserting `during the 12-month period which begins with the
first month in which the individual becomes entitled to benefits under part A u
nder the provisions of section 226A, or, if earlier, the first month in which th
e individual would have been entitled to benefits under such part under the prov
isions of section 226A if the individual had filed an application for such benef
its; and'
(B) in the matter following clause (ii), by adding at the end th
e following: `Effective for items and services furnished on or after February 1,
1991, and on or before January 1, 1996, (with respect to periods beginning on o
r after February 1, 1990), clauses (i) and (ii) shall be applied by substituting
`18-month' for `12-month' each place it appears.'.
(2) GAO STUDY OF EXTENSION OF SECONDARY PAYER PERIOD- (A) The Comptr
oller General shall conduct a study of the impact of the application of clause (
iii) of section 1862(b)(1)(C) of the Social Security Act on individuals entitled
to benefits under title XVIII of such Act by reason of section 226A of such Act
, and shall include in such report information relating to--
(i) the number (and geographic distribution) of such individuals
for whom medicare is secondary;
(ii) the amount of savings to the medicare program achieved annu
ally by reason of the application of such clause;
(iii) the effect on access to employment, and employment-based h
ealth insurance, for such individuals and their family members (including covera
ge by employment-based health insurance of cost-sharing requirements under medic
are after such employment-based insurance becomes secondary);
(iv) the effect on the amount paid for each dialysis treatment u
nder employment-based health insurance;
(v) the effect on cost-sharing requirements under employment-bas
ed health insurance (and on out-of-pocket expenses of such individuals) during t
he period for which medicare is secondary;
(vi) the appropriateness of applying the provisions of section 1
862(b)(1)(C) to all group health plans.
(B) The Comptroller General shall submit a preliminary report on the
study conducted under subparagraph (A) to the Committees on Ways and Means and
Energy and Commerce of the House of Representatives and the Committee on Finance
of the Senate not later than January 1, 1993, and a final report on such study
not later than January 1, 1995.
(d) EFFECTIVE DATE- The amendments made this subsection shall take effec
t on the date of the enactment of this Act and the amendment made by subsection
(a)(2)(B) shall apply to requests made on or after such date.
SEC. 4204. HEALTH MAINTENANCE ORGANIZATIONS.
(a) REGULATION OF INCENTIVE PAYMENTS TO PHYSICIANS-
(1) IN GENERAL- Section 1876(i) (42 U.S.C. 1395mm(i)) is amended by
adding at the end the following new paragraph:
`(8)(A) Each contract with an eligible organization under this section s
hall provide that the organization may not operate any physician incentive plan
(as defined in subparagraph (B)) unless the following requirements are met:
`(i) No specific payment is made directly or indirectly under the pl
an to a physician or physician group as an inducement to reduce or limit medical
ly necessary services provided with respect to a specific individual enrolled wi
th the organization.
`(ii) If the plan places a physician or physician group at substanti
al financial risk (as determined by the Secretary) for services not provided by
the physician or physician group, the organization--
`(I) provides stop-loss protection for the physician or group th
at is adequate and appropriate, based on standards developed by the Secretary th
at take into account the number of physicians placed at such substantial financi
al risk in the group or under the plan and the number of individuals enrolled wi
th the organization who receive services from the physician or the physician gro
up, and
`(II) conducts periodic surveys of both individuals enrolled and
individuals previously enrolled with the organization to determine the degree o
f access of such individuals to services provided by the organization and satisf
action with the quality of such services.
`(iii) The organization provides the Secretary with descriptive info
rmation regarding the plan, sufficient to permit the Secretary to determine whet
her the plan is in compliance with the requirements of this subparagraph.
`(B) In this paragraph, the term `physician incentive plan' means any co
mpensation arrangement between an eligible organization and a physician or physi
cian group that may directly or indirectly have the effect of reducing or limiti
ng services provided with respect to individuals enrolled with the organization.
'.
(2) PENALTIES- Section 1876(i)(6)(A)(vi) (42 U.S.C. 1395mm(i)(6)(A)(
vi)) is amended by striking `(g)(6)(A);' and inserting `(g)(6)(A) or paragraph (
8);'.
(3) REPEAL OF PROHIBITION- Section 1128A(b)(1) (42 U.S.C. 1320a-7a(b
)(1)) is amended--
(A) by striking `, an eligible organization' and all that follow
s through `section 1876,',
(B) by adding `and' at the end of subparagraph (A),
(C) by striking subparagraph (B),
(D) by redesignating subparagraph (C) as subparagraph (B), and
(E) by striking `or organization'.
(4) EFFECTIVE DATE- The amendments made by paragraphs (1) and (2) sh
all apply with respect to contract years beginning on or after January 1, 1992,
and the amendments made by paragraph (3) shall take effect on the date of the en
actment of this Act.
(b) REQUIREMENTS WITH RESPECT TO ACTUARIAL EQUIVALENCE OF AAPCC- (1) Not
later than January 1, 1992, the Secretary of Health and Human Services (in this
section referred to as the `Secretary') shall submit a proposal to Congress tha
t provides for a modified payment method for organizations with a risk contract
under section 1876(g) of the Social Security Act that is more accurate than the
current payment methodology in predicting the actual service utilization and ann
ual medical expenditures of the beneficiary population enrolled in a specific or
ganization.
(2) The proposal shall include--
(A)(i) recommendations on modifying the current adjusted average per
capita cost formula, by adding predictors of medical utilization such as health
status adjustors or prior utilization measures; or
(ii) recommendations for a new payment methodology as an alternative
to the adjusted average per capita cost;
(B) data to support any recommended changes in payment methodology f
or organizations with risk contracts under section 1876(g) of the Social Securit
y Act; and
(C) analysis demonstrating that any proposed or revised payment meth
odology under this section is effective in explaining at least 15 percent of the
variation in health care utilization and costs (as determined in consultation w
ith the American Academy of Actuaries) among individuals enrolled in such organi
zations.
(3) Not later than March 1, 1992, the Secretary shall cause to have publ
ished in the Federal Register a proposed rule providing for the implementation o
f the payment methodology specified in the proposal submitted pursuant to paragr
aph (1).
(4) Not later than May 1, 1992, the Comptroller General shall review the
proposal and recommendations made pursuant to paragraphs (1) and (2), and shall
report to Congress on appropriate modifications in such payment methodology.
(5) Taking into account the recommendations made pursuant to paragraph (
4), on or after August 1, 1992, the Secretary shall issue a final rule implement
ing a payment methodology that meets the requirements of paragraph (1), effectiv
e for contract years beginning on or after January 1, 1993.
(c) APPLICATION OF NATIONAL COVERAGE DECISIONS-
(1) IN GENERAL- Section 1876(c)(2) (42 U.S.C. 1395mm(c)(2)) is amend
ed--
(A) by redesignating clauses (i) and (ii) and subparagraphs (A)
and (B) as subclauses (I) and (II) and clauses (i) and (ii), respectively;
<
/ul> (B) by inserting `(A)' after `(2)'; and
(C) by adding at the end the following new subparagraph:
`(B) If there is a national coverage determination made in the period be
ginning on the date of an announcement under subsection (a)(1)(A) and ending on
the date of the next announcement under such subsection that the Secretary proje
cts will result in a signifcant 19
`(i) such determination shall not apply to risk-sharing contracts un
der this section until the first contract year that begins after the end of such
period; and
`(ii) if such coverage determination provides for coverage of additi
onal benefits or under additional circumstances, subsection (a)(3) shall not app
ly to payment for such additional benefits or benefits provided under such addit
ional circumstances until the first contract year that begins after the end of s
uch period,
unless otherwise required by law.'.
(2) CONFORMING AMENDMENT- Section 1876(a)(6) of such Act is amended
by striking `subsection (c)(7)' and inserting `subsections (c)(2)(B)(ii) and (c)
(7)'.
(3) EFFECTIVE DATE- The amendments made by this subsection shall app
ly with respect to national coverage determinations that are not incorporated in
the determination of the per capita rate of payment for individuals enrolled fo
r 1991 with an eligible organization which has entered into a risk-sharing contr
act under section 1876 of the Social Security Act.
(d) PAYMENTS FOR SERVICES FURNISHED BY NON-CONTRACT PROVIDERS-
(1) IN GENERAL- Section 1876(j) (42 U.S.C. 1395mm(j)) is amended--
(A) in paragraph (1)(A)--
(i) by striking `physician' each place it appears and insert
ing `physician or provider of services or renal dialysis facility',
(ii) by striking `physicians' services' and inserting `physi
cians' services or renal dialysis services', and
(iii) by striking `participation agreement under section 184
2(h)(1)' and inserting `applicable participation agreement',
(B) in paragraph (2)--
<
/ul> (i) by striking `physicians' services' each place it appears
and inserting `physicians' services or renal dialysis services', and
(ii) by striking `which--' and all that follows and insertin
g `which are furnished to an enrollee of an eligible organization under this set
ion 20
(2) EFFECTIVE DATE- The amendment made by paragraph (1) shall apply
with respect to items and services furnished on or after January 1, 1991.
(e) RETROACTIVE ENROLLMENT-
(1) IN GENERAL- Section 1876(a)(1)(E) (42 U.S.C. 1395mm(a)(1)(E)) is
amended--
(A) by striking `(E)' and inserting `(E)(i)'; and
(B) by adding at the end the following new clause:
`(ii)(I) Subject to subclause (II), the Secretary may make retroactive a
djustments under clause (i) to take into account individuals enrolled during the
period beginning on the date on which the individual enrolls with an eligible o
rganization (which has a risk-sharing contract under this section) under a healt
h benefit plan operated, sponsored, or contributed to, by the individual's emplo
yer or former employer (or the employer or former employer of the individual's s
pouse) and ending on the date on which the individual is enrolled in the plan un
der this section, except that for purposes of making such retroactive adjustment
s under this clause, such period may not exceed 90 days.
`(II) No adjustment may be made under subclause (I) with respect to any
individual who does not certify that the organization provided the individual wi
th the explanation described in subsection (c)(3)(E) at the time the individual
enrolled with the organization.'.
(2) EFFECTIVE DATE- The amendments made by paragraph (1) shall apply
with respect to individuals enrolling with an eligible organization (which has
a risk-sharing contract under section 1876 of the Social Security Act) under a h
ealth benefit plan operated, sponsored, or contributed to, by the individual's e
mployer or former employer (or the employer or former employer of the individual
's spouse) on or after January 1, 1991.
(f) STUDY OF CHIROPRACTIC SERVICES-
(1) The Secretary shall conduct a study of the extent to which healt
h maintenance organizations with contracts under section 1876 of the Social Secu
rity Act make available to enrollees entitled to benefits under title XVIII of s
uch Act chiropractic services that are covered under such title.
(2) The study shall examine the arrangements under which such servic
es are made available and the types of practitioners furnishing such services to
such enrollees.
(3) The study shall be based on contracts entered into or renewed on
or after January 1, 1991, and before January 1, 1993.
(4) The Secretary shall issue a final report to the Committees on Wa
ys and Means and Energy and Commerce of the House of Representatives and the Com
mittee on Finance of the Senate on the results of the study not later than Janua
ry 1, 1993. The report shall include recommendations with respect to any legisla
tive and regulatory changes that the Secretary determines are necessary to ensur
e access to such services.
(g) PROHIBITING CERTAIN EMPLOYER MARKETING ACTIVITIES-
(1) IN GENERAL- Section 1862(b)(3) (42 U.S.C. 1395y(b)(3)) is amende
d by adding at the end the following new subparagraph:
`(C) PROHIBITION OF FINANCIAL INCENTIVES NOT TO ENROLL IN A GROU
P HEALTH PLAN- It is unlawful for an employer or other entity to offer any finan
cial or other incentive for an individual entitled to benefits under this title
not to enroll (or to terminate enrollment) under a group health plan which would
(in the case of such enrollment) be a primary plan (as defined in paragraph (2)
(A)), unless such incentive is also offered to all individuals who are eligible
for coverage under the plan. Any entity that violates the previous sentence is s
ubject to a civil money penalty of not to exceed $5,000 for each such violation.
The provisions of section 1128A (other than the first sentence of subsection (a
) and other than subsection (b)) shall apply to a civil money penalty under the
previous sentence in the same manner as such provisions apply to a penalty or pr
oceeding under section 1128A(a).'.
(2) EFFECTIVE DATE- The amendment made by paragraph (1) shall apply
to incentives offered on or after the date of the enactment of this Act.
SEC. 4205. PEER REVIEW ORGANIZATIONS.
(a) USE OF CORRECTIVE ACTION PLANS-
(1) IN GENERAL- Section 1156(b)(1) (42 U.S.C. 1320c-5(b)(1)) is amen
ded--
(A) by inserting `and, if appropriate, after the practitioner or
person has been given a reasonable opportunity to enter into and complete a cor
rective action plan (which may include remedial education) agreed to by the orga
nization, and has failed successfully to complete such plan,' after `concerned,'
; and
(B) by inserting after the second sentence the following: `In de
termining whehter 21
(2) EFFECTIVE DATE- The amendments made by paragraph (1) shall apply
to initial determinations made by organizations on or after the date of the ena
ctment of this Act.
(b) TREATMENT OF OPTOMETRISTS AND PODIATRISTS-
(1) IN GENERAL- Section 1154 (42 U.S.C. 1320c-3) is amended--
(A) in subsection (a)(7)(A)(i), by inserting `, optometry, and p
odiatry' after `dentistry'; and
(B) in subsection (c), by striking `or dentistry' each place it
appears and inserting `dentistry, optometry, or podiatry'.
(2) EFFECTIVE DATE- The amendments made by paragraph (1) shall apply
to contracts entered into or renewed on or after the date of the enactment of t
his Act.
(c) COORDINATION OF PROS AND CARRIERS-
(1) DEVELOPMENT AND IMPLEMENTATION OF PLAN- The Secretary of Health
and Human Services shall develop and implement a plan to coordinate the physicia
n review activities of peer review organizations and carriers. Such plan shall i
nclude--
(A) the development of common utilization and medical review cri
teria;
(B) criteria for the targetting of reviews by peer review organi
zations and carriers; and
(C) improved methods for exchange of information among peer revi
ew organizations and carriers.
(2) REPORT- Not later than January 1, 1992, the Secretary shall subm
it to Congress a report on the development of the plan described under paragraph
(1) and shall include in the report such recommendations for changes in legisla
tion as may be appropriate.
(d) PEER REVIEW NOTICE-
(1) NOTICE OF PROPOSED SANCTIONS-
(A) REQUIREMENT- Section 1154(a)(9) (42 U.S.C. 1320c-3(a)(9)) is
amended--
(i) by inserting `(A)' after `(9)'; and
(ii) by adding at the end the following:
`(B) If the organization finds, after notice and hearing, that a phy
sician has furnished services in violation of this subsection, the organization
shall notify the State board or boards responsible for the licensing or discipli
ning of the physician of its finding and decision.'.
(B) DISCLOSURE- Section 1160(b)(1) (42 U.S.C. 1320c-9(b)(1)) is
amended--
(i) by striking `and' at the end of subparagraph (B),
(ii) by adding `and' at the end of subparagraph (C), and
(iii) by adding at the end the following new subparagraph:
`(D) to provide notice to the State medical board in accordance
with section 1154(a)(9)(B) when the organization submits a report and recommenda
tions to the Secretary under section 1156(b)(1) with respect to a physician whom
the board is responsible for licensing;'.
(C) EFFECTIVE DATE- The amendments made by this paragraph shall
apply to notices of proposed sanctions issued more than 60 days after the date o
f the enactment of this Act.
(2) NOTICE TO STATE MEDICAL BOARDS WHEN ADVERSE ACTIONS TAKEN BY SEC
RETARY-
(A) IN GENERAL- Section 1156(b) (42 U.S.C. 1320c-5(b)) is amende
d by adding at the end the following new paragraph:
`(6) When the Secretary effects an exclusion of a physician under paragr
aph (2), the Secretary shall notify the State board responsible for the licensin
g of the physician of the exclusion.'.
(B) EFFECTIVE DATE- The amendments made by this paragraph shall
apply to sanctions effected more than 60 days after the date of the enactment of
this Act.
(e) CONFIDENTIALITY OF PEER REVIEW DELIBERATIONS-
(1) IN GENERAL- Section 1160(d) (42 U.S.C. 1320c-9(d)) is amended by
adding at the end the following: `No document or other information produced by
such an organization in connection with its deliberations in making determinatio
ns under section 1154(a)(1)(B) or 1156(a)(2) shall be subject to subpena or disc
overy in any administrative or civil proceeding; except that such an organizatio
n shall provide, upon request of a practitioner or other person adversely affect
ed by such a determination, a summary of the organization's findings and conclus
ions in making the determination.'.
(2) EFFECTIVE DATE- The amendments made by paragraph (1) shall apply
to all proceedings as of the date of the enactment of this Act.
(f) CLARIFICATION OF LIMITATION ON LIABILITY- Section 1157(b) (42 U.S.C.
1320c-6(b)) is amended--
(1) by inserting `organization having a contract with the Secretary
under this part and no' after `No',
(2) by striking `by him', and
(3) by striking `he has exercised due care' and inserting `due care
was exercised in the performance of such duty, function, or activity'.
(g) MISCELLANEOUS AND TECHNICAL AMENDMENTS RELATING TO PEER REVIEW ORGAN
IZATIONS-
(1) CLARIFICATION OF PATIENT NOTIFICATION REQUIREMENTS FOR DENIAL OF
PAYMENT BY PRO-
(A) IN GENERAL- Section 1154(a)(3)(E) (42 U.S.C. 1320c-3(a)(3)(E
)) is amended--
(i) by striking `(E)' and inserting `(E)(i)';
(ii) by inserting after `items' the following: `provided by
a physician that were';
(iii) by striking `physician and hospital.' and inserting `p
hysician.'; and
(iv) by adding at the end the following new clause:
`(ii) In the case of services or items provided by an entity or prac
titioner other than a physician, the Secretary may substitute the entity or prac
titioner which provided the services or items for the term `physician' in the no
tice described in clause (i).'.
(B) EFFECTIVE DATE- The amendments made by subparagraph (A) shal
l take effect as if included in the enactment of the Omnibus Budget Reconiliatio
n 22
(2) CLARIFICATION OF APPLICATION OF CRITERIA FOR DENIAL OF PAYMENT-<
/ul>
(A) IN GENERAL- Section 1154(a)(2) (42 U.S.C. 1320c-3(a)(2)) is
amended by striking the third sentence and inserting the following: `The organiz
ation shall identify cases for which payment should not be made by reason of par
agraph (1)(B) only through the use of criteria developed pursuant to guidelines
established by the Secretary.'.
(B) EFFECTIVE DATE- The amendment made by subparagraph (A) shall
take effect as if included in the enactment of the Consolidated Omnibus Budget
Reconciliation Act of 1985.
(a) IN GENERAL- Section 1866(a)(1) (42 U.S.C. 1395cc(a)(1)) is amended--
(1) in subsection (a)(1)--
<
/ul>
(A) by striking `and' at the end of subparagraph (O),
(B) by striking the period at the end of subparagraph (P) and in
serting `, and', and
(C) by inserting after subparagraph (P) the following new subpar
agraph:
`(Q) in the case of hospitals, skilled nursing facilities, home heal
th agencies, and hospice programs, to comply with the requirement of subsection
(f) (relating to maintaining written policies and procedures respecting advance
directives).'; and
(2) by inserting after subsection (e) the following new subsection:<
/ul>
`(f)(1) For purposes of subsection (a)(1)(Q) and sections 1819(c)(2)(E),
1833(r), 1876(c)(8), and 1891(a)(6), the requirement of this subsection is that
a provider of services or prepaid or eligible organization (as the case may be)
maintain written policies and procedures with respect to all adult individuals
receiving medical care by or through the provider or organization--
`(A) to provide written information to each such individual concerni
ng--
`(i) an individual's rights under State law (whether statutory o
r as recognized by the courts of the State) to make decisions concerning such me
dical care, including the right to accept or refuse medical or surgical treatmen
t and the right to formulate advance directives (as defined in paragraph (3)), a
nd
`(ii) the written policies of the provider or organization respe
cting the implementation of such rights;
`(B) to document in the individual's medical record whether or not t
he individual has executed an advance directive;
`(C) not to condition the provision of care or otherwise discriminat
e against an individual based on whether or not the individual has executed an a
dvance directive;
`(D) to ensure compliance with requirements of State law (whether st
atutory or as recognized by the courts of the State) respecting advance directiv
es at facilities of the provider or organization; and
`(E) to provide (individually or with others) for education for staf
f and the community on issues concerning advance directives.
Subparagraph (C) shall not be construed as requiring the provision of car
e which conflicts with an advance directive.
`(2) The written information described in paragraph (1)(A) shall be prov
ided to an adult individual--
`(A) in the case of a hospital, at the time of the individual's admi
ssion as an inpatient,
`(B) in the case of a skilled nursing facility, at the time of the i
ndividual's admission as a resident,
`(C) in the case of a home health agency, in advance of the individu
al coming under the care of the agency,
`(D) in the case of a hospice program, at the time of initial receip
t of hospice care by the individual from the program, and
`(E) in the case of an eligible organization (as defined in section
1876(b)) or an organization provided payments under section 1833(a)(1)(A), at th
e time of enrollment of the individual with the organization.
`(3) In this subsection, the term `advance directive' means a written in
struction, such as a living will or durable power of attorney for health care, r
ecognized under State law (whether statutory or as recognized by the courts of t
he State) and relating to the provision of such care when the individual is inca
pacitated.'.
(b) APPLICATION TO PREPAID ORGANIZATIONS-
(1) ELIGIBLE ORGANIZATIONS- Section 1876(c) of such Act (42 U.S.C. 1
395mm(c)) is amended by adding at the end the following new paragraph:
`(8) A contract under this section shall provide that the eligible organ
ization shall meet the requirement of section 1866(f) (relating to maintaining w
ritten policies and procedures respecting advance directives).'.
(2) OTHER PREPAID ORGANIZATIONS- Section 1833 of such Act (42 U.S.C.
1395l) is amended by adding at the end the following new subsection:
`(r) The Secretary may not provide for payment under subsection (a)(1)(A
) with respect to an organization unless the organization provides assurances sa
tisfactory to the Secretary that the organization meets the requirement of secti
on 1866(f) (relating to maintaining written policies and procedures respecting a
dvance directives).'.
(c) EFFECT ON STATE LAW- Nothing in subsections (a) and (b) shall be con
strued to prohibit the application of a State law which allows for an objection
on the basis of conscience for any health care provider or any agent of such pro
vider which, as a matter of conscience, cannot implement an advance directive.
(d) CONFORMING AMENDMENTS-
(1) Section 1819(c)(1) of such Act (42 U.S.C. 1395i-3(c)(1)) is amen
ded by adding at the end the following new subparagraph:
`(E) INFORMATION RESPECTING ADVANCE DIRECTIVES- A skilled nursin
g facility must comply with the requirement of section 1866(f) (relating to main
taining written policies and procedures respecting advance directives).'.
(2) Section 1891(a) of such Act (42 U.S.C. 1395bbb(a)) is amended by
adding at the end the following:
`(6) The agency complies with the requirement of section 1866(f) (re
lating to maintaining written policies and procedures respecting advance directi
ves).'.
(e) EFFECTIVE DATES-
(1) The amendments made by subsections (a) and (d) shall apply with
respect to services furnished on or after the first day of the first month begin
ning more than 1 year after the date of the enactment of this Act.
(2) The amendments made by subsection (b) shall apply to contracts u
nder section 1876 of the Social Security Act and payments under section 1833(a)(
1)(A) of such Act as of first day of the first month beginning more than 1 year
after the date of the enactment of this Act.
(a) HOSPITAL AND PHYSICIAN OBLIGATIONS WITH RESPECT TO EMERGENCY MEDICAL
CONDITIONS-
(1) PEER REVIEW- (A) Section 1867(d) (42 U.S.C. 1395dd(d)), as amend
ed by section 4008(b)(3), is amended by adding at the end the following new para
graph:
`(3) CONSULTATION WITH PEER REVIEW ORGANIZATIONS- In considering all
egations of violations of the requirements of this section in imposing sanctions
under paragraph (1), the Secretary shall request the appropriate utilization an
d quality control peer review organization (with a contract under part B of titl
e XI) to assess whether the individual involved had an emergency medical conditi
on which had not been stabilized, and provide a report on its findings. Except i
n the case in which a delay would jeopardize the health or safety of individuals
, the Secretary shall request such a review before effecting a sanction under pa
ragraph (1) and shall provide a period of at least 60 days for such review. 23
(B) Section 1154(a) (42 U.S.C. 1320c-4(a)) is amended by adding at t
he end the following new paragraph:
`(16) The organization shall provide for a review and report to the
Secretary when requested by the Secretary under section 1867(d)(3). The organiza
tion shall provide reasonable notice of the review to the physician and hospital
involved. Within the time period permitted by the Secretary, the organization s
hall provide a reasonable opportunity for discussion with the physician and hosp
ital involved, and an opportunity for the physician and hospital to submit addit
ional information, before issuing its report to the Secretary under such section
.'.
(C) The amendment made by subparagraph (A) shall take effect on the
first day of the first month beginning more than 60 days after the date of the e
nactment of this Act. The amendment made by subparagraph (B) shall apply to cont
racts under part B of title XI of the Social Security Act as of the first day of
the first month beginning more than 60 days after the date of the enactment of
this Act.
(2) CIVIL MONETARY PENALTIES- Section 1867(d)(2)(B) (42 U.S.C. 1395d
d(d)(2)(B)) is amended by striking `knowingly' and inserting `negligently'.
(3) EXCLUSION- Section 1867(d)(2)(B) (42 U.S.C. 1395dd(d)(2)(B)) is
amended by striking `knowing and willful or negligent' and inserting `is gross a
nd flagrant or is repeated'.
(4) EFFECTIVE DATE- The amendments made by this subsection shall app
ly to actions occurring on or after the first day of the sixth month beginning a
fter the date of the enactment of this Act.
(b) EXTENSIONS OF EXPIRING PROVISIONS-
(1) PROHIBITION ON COST SAVINGS POLICIES BEFORE BEGINNING OF FISCAL
YEAR- Notwithstanding any other provision of law, the Secretary of Health and Hu
man Services may not issue any proposed or final regulation, instruction, or oth
er policy which is estimated by the Secretary to result in a net reduction in ex
penditures under title XVIII of the Social Security Act in a fiscal year (beginn
ing with fiscal year 1991 and ending with fiscal year 1993, or, if later, the la
st fiscal year for which there is a maximum deficit amount specified under secti
on 3(7) of the Congressional Budget and Impoundment Control Act of 1974) of more
than $50,000,000, except as follows:
(A) The Secretary may issue such a proposed regulation, instruct
ion, or other policy with respect to the fiscal year before the May 15 preceding
the beginning of the fiscal year.
(B) The Secretary may issue such a final regulation, instruction
, or other policy with respect to the fiscal year on or after October 15 of the
fiscal year.
(C) The Secretary may, at any time, issue such a proposed or fin
al regulation, instruction, or other policy with respect to the fiscal year if r
equired to implement specific provisions under statute.
(2) PROHIBITION OF PAYMENT CYCLE CHANGES- Notwithstanding any other
provision of law, the Secretary of Health and Human Services is not authorized t
o issue, after the date of the enactment of this Act, any final regulation, inst
ruction, or other policy change which is primarily intended to have the effect o
f slowing down or speeding up claims processing, or delaying payment of claims,
under title XVIII of the Social Security Act.
(3) WAIVER OF LIABILITY FOR HOME HEALTH AGENCIES- Section 9305(g)(3)
of the Omnibus Budget Reconciliation Act of 1986, as amended by section 426(d)
of the Medicare Catastrophic Coverage Act of 1988, is amended by striking `Novem
ber 1, 1990' and inserting `December 31, 1995'.
(4) EXTENSION AND EXPANSION OF WAIVERS FOR SOCIAL HEALTH MAINTENANCE
ORGANIZATIONS-
(A) EXTENSION OF CURRENT WAIVERS- Section 4018(b) of the Omnibus
Budget Reconciliation Act of 1987 is amended--
(i) in paragraph (1), by striking `September 30, 1992' and i
nserting `December 31, 1995'; and
(ii) in paragraph (4)--
(I) by striking `final' and inserting `second interim',
and
(II) by striking the period at the end and inserting the
following: `, and shall submit a final report on the demonstration projects con
ducted under section 2355 of the Deficit Reduction Act of 1984 not later than Ma
rch 31, 1996.'.
(B) EXPANSION OF DEMONSTRATIONS- Section 2355 of the Deficit Red
uction Act of 1984 is amended--
(i) in subsection (a), by adding at the end the following: `
Not later than 12 months after the date of the enactment of the Omnibus Budget R
econciliation Act of 1990, the Secretary shall approve such applications or prot
ocols for not more than 4 additional projects described in subsection (b).';
(ii) by amending paragraph (1) of subsection (b) to read as
follows:
`(1) to demonstrate--
`(A) the concept of a social health maintenance organization wit
h the organizations as described in Project No. 18-P-9 7604/1-04 of the Universi
ty Health Policy Consortium of Brandeis University, or
`(B) in the case of a project conducted as a result of the amend
ments made by section 12907(c)(4)(A) of the Omnibus Budget Reconciliation Act of
1990, the effectiveness and feasibilitly 24
`(i) the benefits of expanded post-acute and community care
case management through links between chronic care case management services and
acute care providers;
`(ii) refining targeting or reimbursement methodologies;
`(iii) the establishment and operation of a rural services d
elivery system; or
`(iv) the effectiveness of second-generation sites in reduci
ng the costs of the commencement and management of health care service delivery;
';
(iii) in subsection (b)--
(I) by inserting `and' at the end of paragraph (3),
(II) by striking the semicolon at the end of paragraph (
4) and inserting a period, and
(III) by striking paragraphs (5), (6), and (7). 25
<
/ul> (iv) in subsection (c)--
(I) by striking `and' at the end of paragraph (1),
<
/ul> (II) by striking the period at the end of paragraph (2)
and inserting `; and', and
(III) by adding at the end the following new paragraph:<
/ul>
`(3) in the case of a project conducted as a result of the amendment
s made by section 12907(c)(4)(A) of the Omnibus Budget Reconciliation Act of 199
0, any requirements of titles XVIII or XIX of the Social Security Act that, if i
mposed, would prohibit such project from being conducted.'; and
(v) by adding at the end the following new subsection:
<
/ul> `(e) There are authorized to be appropriated $3,500,000 for the costs of
technical assistance and evaluation related to projects conducted as a result o
f the amendments made by section 12907(c)(4)(A) of the Omnibus Budget Reconcilia
tion Act of 1990.'.
(c) DEVELOPMENT OF PROSPECTIVE PAYMENT SYSTEM FOR HOME HEALTH SERVICES-<
/ul>
(1) DEVELOPMENT OF PROPOSAL- The Secretary of Health and Human Servi
ces shall develop a proposal to modify the current system under which payment is
made for home health services under title XVIII of the Social Security Act or a
proposal to replace such system with a system under which such payments would b
e made on the basis of prospectively determined rates. In developing any proposa
l under this paragraph to replace the current system with a prospective payment
system, the Secretary shall--
(A) take into consideration the need to provide for appropriate
limits on increases in expenditures under the medicare program;
(B) provide for adjustments to prospectively determined rates to
account for changes in a provider's case mix, severity of illness of patients,
volume of cases, and the development of new technologies and standards of medica
l practice;
(C) take into consideration the need to increase the payment oth
erwise made under such system in the case of services provided to patients whose
length of treatment or costs of treatment greatly exceed the length or cost of
treatment provided for under the applicable prospectively determined payment rat
e;
(D) take into consideration the need to adjust payments under th
e system to take into account factors such as differences in wages and wage-rela
ted costs among agencies located in various geographic areas and other factors t
he Secretary considers appropriate; and
(E) analyze the feasibility and appropriateness of establishing
the episode of illness as the basic unit for making payments under the system.
(2) REPORTS- (A) By not later than April 1, 1993, the Secretary of H
ealth and Human Services shall submit the research findings upon which the propo
sal described in paragraph (1) shall be based to the Committee on Finance of the
Senate and the Committee on Ways and Means of the House of Representatives.
(B) By not later than September 1, 1993, the Secretary shall submit
the proposal developed under paragraph (1) to the Committee on Finance of the Se
nate and the Committee on Ways and Means of the House of Representatives.
(C) By not later than March 1, 1994, the Prospective Payment Assessm
ent Commission shall submit an analysis of and comments on the proposal develope
d under paragraph (1) to the Committee on Finance of the Senate and the Committe
e on Ways and Means of the House of Representatives.
(d) HOME HEALTH WAGE INDEX-
(1) IN GENERAL- Section 1861(v)(1)(L)(iii) (42 U.S.C. 1395x(v)(1)(L)
(iii)) is amended to read as follows:
`(iii) Not later than July 1, 1991, and annually thereafter, the Secreta
ry shall establish limits under this subparagraph for cost reporting periods beg
inning on or after such date by utilizing the area wage index applicable under s
ection 1886(d)(3)(E) as of such date to hospitals located in the geographic area
in which the home health agency is located (determined without regard to whethe
r such hospitals have been reclassified to a new geographic area pursuant to sec
tion 1886(d)(8)(B), a decision of the Medicare Geographic Classification Review
Board under section 1886(d)(10), or a decision of the Secretary).'.
(2) APPLICATION ON BUDGET-NEUTRAL BASIS- In updating the wage index
for establishing limits under section 1861(v)(1)(L)(iii) of the Social Security
Act, the Secretary shall ensure that aggregate payments to home health agencies
under title XVIII of such Act will be no greater or lesser than such payments wo
uld have been without regard to such update.
(3) TRANSITION PROVISION- Notwithstanding section 1861(v)(1)(L)(iii)
of the Social Security Act, the Secretary of Health and Human Services shall, i
n determining the limits of reasonable costs under title XVIII of such Act with
respect to services furnished by a home health agency, utilize a wage index equa
l to--
(A) for cost reporting periods beginning on or after July 1, 199
1, and on or before June 30, 1992, a combined area wage index consisting of--
(i) 67 percent of the area wage index applicable under secti
on 1861(v)(1)(L)(iii) of such Act to such home health agency, determined using t
he survey of the 1982 wages and wage-related costs of hospitals in the United St
ates conducted under such section, and
(ii) 33 percent of the area wage index applicable under sect
ion 1886(d)(3)(E) of such Act to hospitals located in the geographic area in whi
ch the home health agency is located, determined using the survey of the 1988 wa
ges and wage-related costs of hospitals in the United States conducted under suc
h section; and
(B) for cost reporting periods beginning on or after July 1, 199
2, and on or before June 30, 1993, a combined area wage index consisting of--
(i) 33 percent of the area wage index applicable under secti
on 1861(v)(1)(L)(iii) of such Act to such home health agency, determined using t
he survey of the 1982 wages and wage-related costs of hospitals in the United St
ates conducted under such section, and
(ii) 67 percent of the area wage index applicable under sect
ion 1886(d)(3)(E) of such Act to hospitals located in the geographic area in whi
ch the home health agency is located, determined using the survey of the 1988 wa
ges and wage-related costs of hospitals in the United States conducted under suc
h section.
(3) EFFECTIVE DATE- The amendment made by paragraph (1) shall apply
with respect to home health agency cost reporting periods beginning on or after
July 1, 1991.
(e) CLARIFICATION OF DEFINITIONS AND REPORTING REQUIREMENTS RELATING TO
PHYSICIAN OWNERSHIP AND REFERRAL-
(1) CLARIFYING DEFINITIONS- Section 1877(h) of the Social Security A
ct (42 U.S.C. 1395nn(h)) is amended--
(A) in paragraph (6)(A), by striking `in the case of' and all th
at follows through `the service,' and inserting `in the case of an item or servi
ce for which payment may be made under part B, the request by a physician for th
e item or service,';
(B) in paragraph (6)(B), by striking `in the case of another cli
nical laboratory service,', and
(C) by redesignating paragraph (6) as paragraph (7) and by inser
ting after paragraph (5) the following new paragraph:
`(6) INVESTOR- The term `investor' means, with respect to an entity,
a person with a financial relationship specified in subsection (a)(2) with the
entity.'.
(2) EXEMPTION FOR FINANCIAL RELATIONSHIPS WITH HOSPITAL UNRELATED TO
THE PROVISION OF CLINICAL LABORATORY SERVICES- Section 1877(b) is amended by re
designating paragraph (4) as paragraph (5) and by inserting after paragraph (3)
the following new paragraph:
`(4) HOSPITAL FINANCIAL RELATIONSHIP UNRELATED TO THE PROVISION OF C
LINICAL LABORATORY SERVICES- In the case of a financial relationship with a hosp
ital if the financial relationship does not relate to the provision of clinical
laboratory services.'.
(3) REVISION OF REPORTING REQUIREMENTS- Section 1877(f) (42 U.S.C. 1
395nn(f)) is amended--
(A) by amending paragraph (2) to read as follows:
`(2) the names and unique physician identification numbers of all ph
ysicians with an ownership or investment interest (as described in subsection (a
)(2)(A)) in the entity, or whose immediate relatives have such an ownership or i
nvestment.';
(B) in the third sentence, by striking `1 year after the date of
the enactment of this section' and inserting `October 1, 1991'; and
(C) by adding at the end the following new sentences: `The requi
rement of this subsection shall not apply to covered items and services provided
outside the United States or to entities which the Secretary determines provide
s services for which payment may be made under this title very infrequently. The
Secretary may waive the requirements of this subsection (and the requirements o
f chapter 35 of title 44, United States Code, with respect to information provid
ed under this subsection) with respect to reporting by entities in a State (exce
pt for entities providing clinical laboratory services) so long as such reportin
g occurs in at least 10 States, and the Secretary may waive such requirements wi
th respect to the providers in a State required to report so long as such requir
ements are not waived with respect to parenteral and enteral suppliers, end stag
e renal disease facilities, suppliers of ambulance services, hospitals, entities
providing physical therapy services, and entities providing diagnostic imaging
services of any type.'.
(4) DATE OF ISSUANCE OF REPORTS AND REGULATIONS- (A) Section 6204 of
the Omnibus Budget Reconciliation Act of 1989 is amended by striking subsection
(f) and inserting the following:
`(f) STATISTICAL SUMMARY OF COMPARATIVE UTILIZATION- Not later than June
30, 1992, the Secretary of Health and Human Services shall submit to Congress a
statistical profile comparing utilization of items and services by medicare ben
eficiaries served by entities in which the referring physician has a direct or i
ndirect financial interest and by medicare beneficiaries served by other entitie
s, for the States and entities specified in section 1877(f) of the Social Securi
ty Act (other than entities providing clinical laboratory services).'.
(B) Section 6204(d) of the Omnibus Budget Reconciliation Act of 1989
is amended by striking `October 1, 1990' and inserting `October 1, 1991'.
<
/ul>
(5) EFFECTIVE DATE- The amendments made by this subsection shall be
effective as if included in the enactment of section 6204 of the Omnibus Budget
Reconciliation Act of 1989.
(f) CASE MANAGEMENT DEMONSTRATION PROJECT-
(1) IN GENERAL- Notwithstanding any other provision of law, the Secr
etary of Health and Human Services shall resume the 3 case management demonstrat
ion projects described in paragraph (2) and approved under section 425 of the Me
dicare Catastrophic Coverage Act of 1988 (in this subsection referred to as `MCC
A').
(2) PROJECT DESCRIPTIONS- The demonstration projects referred to in
paragraph (1) are--
(A) the project proposed to be conducted by Providence Hospital
for case management of the elderly at risk for acute hospitalization as describe
d in Project No. 18-P-99379/5-01;
(B) the project proposed to be conducted by the Iowa Foundation
for Medical Care to study patients with chronic congestive conditions to reduce
repeated hospitalizations of such patients as described in Project No. P-99399/4
-01; and
(C) the project proposed to be conducted by Key Care Health Reso
urces, Inc., to examine the effects of case management on 2,500 high cost medica
re beneficiaries as described in Project No. 18-P-99396/5.
(3) TERMS AND CONDITIONS- Except as provided in paragraph (4), the d
emonstration projects resumed pursuant to paragraph (1) shall be subject to the
same terms and conditions established under section 425 of MCCA. In determining
the 2-year duration period of a project resumed pursuant to paragraph (1), the S
ecretary may not take into account any period of time for which the project was
in effect under section 425 of MCCA.
(4) AUTHORIZATION OF APPROPRIATIONS- Notwithstanding section 425(g)
of MCCA, there are authorized to be appropriated for administrative costs in car
rying out the demonstration projects resumed pursuant to paragraph (1) $2,000,00
0 in each of fiscal years 1991 and 1992.
(g) PROHIBITION OF USER FEES FOR SURVEY AND CERTIFICATION- Section 1864
(42 U.S.C. 1395aa) is amended by adding at the end the following new subsection:
`(e) Notwithstanding any other provision of law, the Secretary may not i
mpose, or require a State to impose, any fee on any facility or entity subject t
o a determination under subsection (a), or any renal dialysis facility subject t
o the requirements of section 1881(b)(1), for any such determination or any surv
ey relating to determining the compliance of such facility or entity with any re
quirement of this title.'.
(h) DELEGATION OF AUTHORITY TO INSPECTOR GENERAL- Section 1128A(j) (42 U
.S.C. 1320a-7a(j)) is amended--
(i) by striking `(j)' and inserting `(j)(1)'; and
(ii) by adding at the end the following new paragraph:
`(2) The Secretary may delegate authority granted under this section and
under section 1128 to the Inspector General of the Department of Health and Hum
an Services.'.
(i) MODIFICATION OF HOME HEALTH AGENCY DEFICIENCY STANDARDS-
(1) IN GENERAL- Effective as if included in the enactment of the Omn
ibus Budget Reconciliation Act of 1987, section 1891(a)(3)(D)(iii) of the Social
Security Act (42 U.S.C. 1395bbb(a)(3)(D)(iii)) is amended by striking `which ha
s been determined' and all that follows and inserting the following: `which, wit
hin the previous 2 years--
`(I) has been determined to be out of compliance with subparagra
ph (A), (B), or (C);
`(II) has been subject to an extended (or partial extended) surv
ey under subsection (c)(2)(D);
`(III) has been assessed a civil money penalty described in subs
ection (f)(2)(A)(i) of not less than $5,000; or
`(IV) has been subject to the remedies described in subsection (
e)(1) or in clauses (ii) or (iii) of subsection (f)(2)(A).'.
(2) EFFECTIVE DATE- The amendments made by paragraph (1) shall take
effect as if included in the enactment of the Omnibus Budget Reconciliation Act
of 1987, except that the Secretary may not permit approval of a training and com
petency evaluation program or a competency evaluation program offered by or in a
home health agency which, pursuant to any Federal or State law within the 2-yea
r period beginning on October 1, 1988--
(i) had its participation terminated under title XVIII of th
e Social Security Act;
(ii) was assessed a civil money penalty not less than $5,000
for deficiencies in applicable quality standards for home health agencies;
(iii) was subject to suspension by the Secretary of all or p
art of the payments to which it would otherwise be entitled under such title. 26
(iv) operated under a temporary management appointed to over
see the operation of the agency and to ensure the health and safety of the agenc
y's patients; or
(v) pursuant to State action, was closed or had its resident
s transferred.
(j) USE OF INTERIM FINAL REGULATIONS- The Secretary of Health and Human
Services shall issue such regulations (on an interim or other basis) as may be n
ecessary to implement this title and the amendments made by this title.
(k) Miscellaneous Technical Corrections-
(1) The third sentence of subsections (a) and (b)(1) of section 1882
of the Social Security Act (42 U.S.C. 1395ss), as amended by section 203(a)(1)(
A) of the Medicare Catastrophic Coverage Repeal Act, is amended by striking `(k)
(4),'.
(2) Section 1877(g)(5) of the Social Security Act, as added by secti
on 6204(a) of OBRA-1989, is amended by adding at the end the following new sente
nce: `The provisions of section 1128A (other than the first sentence of subsecti
on (a) and other than subsection (b)) shall apply to a civil money penalty under
the previous sentence in the same manner as such provisions apply to a penalty
or proceeding under section 1128A(a).'.
(3) Subsection (i) of section 1867 of the Social Security Act, as ad
ded by section 6211(f) of the Omnibus Budget Reconciliation Act of 1989, is amen
ded to read as follows:
`(i) WHISTLEBLOWER PROTECTIONS- A participating hospital may not penaliz
e or take adverse action against a qualified medical person described in subsect
ion (c)(1)(A)(iii) or a physician because the person or physician refuses to aut
horize the transfer of an individual with an emergency medical condition that ha
s not been stabilized or against any hospital employee because the employee repo
rts a violation of a requirement of this section.'.
(4) Section 6213(d) of the Omnibus Budget Reconciliation Act of 1989
is amended by striking `take effect' and inserting `apply to services furnished
on or after'.
(5) Section 6217(a) of the Omnibus Budget Reconciliation Act of 1989
is amended in the matter preceding paragraph (1) by inserting after `payments'
the following: `out of the Federal Hospital Insurance Trust Fund and the Federal
Supplementary Medical Insurance Trust Fund (in such proportions as the Secretar
y determines to be appropriate in a year)'.
(6) Section 1139(d) of the Social Security Act, as amended by sectio
n 6221 of Omnibus Budget Reconciliation Act of 1989, is amended by striking `int
erim report' and all that follows through `setting forth' and inserting the foll
owing: `interim report no later than March 31, 1990, and a final report no later
than March 31, 1991, setting forth'.
PART 4--PROVISIONS RELATING TO MEDICARE PART B PREMIUM AND DEDUCTIBLE
SEC. 4301. PART B PREMIUM.
Section 1839(e)(1) (42 U.S.C. 1395r(e)(1)) is amended--
(1) by inserting `(A)' after `(e)(1)', and
(2) by adding at the end the following new subparagraph:
`(B) Notwithstanding the provisions of subsection (a), the monthly premi
um for each individual enrolled under this part for each month in--
`(i) 1991 shall be $29.90,
`(ii) 1992 shall be $31.80,
`(iii) 1993 shall be $36.60,
`(iv) 1994 shall be $41.10, and
`(v) 1995 shall be $46.10.'.
SEC. 4302. PART B DEDUCTIBLE.
Section 1833(b) (42 U.S.C. 1395l) is amended by inserting after `$75' th
e following: `for calendar years before 1991 and $100 for 1991 and subsequent ye
ars'.
PART 5--MEDICARE SUPPLEMENTAL INSURANCE POLICIES
SEC. 4351. SIMPLIFICATION OF MEDICARE SUPPLEMENTAL POLICIES.
(a) IN GENERAL- Section 1882 (42 U.S.C. 1395ss) is amended--
(1) in subsection (b)(1)(B), by striking `through (4)' and inserting
`through (5)';
(2) in subsection (c)--
(A) by striking `and' at the end of paragraph (3),
(B) by striking the period at the end of paragraph (4) and inser
ting `; and', and
(C) by inserting after paragraph (4) the following new paragraph
:
`(5) meets the applicable requirements of subsections (o) through (
t).'; and
(3) by adding at the end the following new subsections:
`(o) The requirements of this subsection are as follows:
`(1) Each medicare supplemental policy shall provide for coverage of
a group of benefits consistent with subsection (p).
`(2) If the medicare supplemental policy provides for coverage of a
group of benefits other than the core group of basic benefits described in subse
ction (p)(2)(B), the issuer of the policy must make available to the individual
a medicare supplemental policy with only such core group of basic benefits.
`(3) The issuer of the policy has provided, before the sale of the p
olicy, an outline of coverage that uses uniform language and format (including l
ayout and print size) that facilitates comparison among medicare supplemental po
licies and comparison with medicare benefits.
`(p)(1)(A) If, within 9 months after the date of the enactment of this s
ubsection, the National Association of Insurance Commissioners (in this subsecti
on referred to as the `Association') promulgates--
`(i) limitations on the groups or packages of benefits that may be o
ffered under a medicare supplemental policy consistent with paragraphs (2) and (
3) of this subsection,
`(ii) uniform language and definitions to be used with respect to su
ch benefits,
`(iii) uniform format to be used in the policy with respect to such
benefits, and
`(iv) other standards to meet the additional requirements imposed by
the amendments made by the Omnibus Budget Reconciliation Act of 1990,
(such limitations, language, definitions, format, and standards referred
to collectively in this subsection as `NAIC standards'), subsection (g)(2)(A) sh
all be applied in each State, effective for policies issued to policyholders on
and after the date specified in subparagraph (C), as if the reference to the Mod
el Regulation adopted on June 6, 1979, included a reference to the NAIC standard
s.
`(B) If the Association does not promulgate NAIC standards within the 9-
month period specified in subparagraph (A), the Secretary shall promulgate, not
later than 9 months after the end of such period, limitations, language, definit
ions, format, and standards described in clauses (i) through (iv) of such subpar
agraph (in this subsection referred to collectively as `Federal standards') and
subsection (g)(2)(A) shall be applied in each State, effective for policies issu
ed to policyholders on and after the date specified in subparagraph (C), as if t
he reference to the Model Regulation adopted on June 6, 1979, included a referen
ce to the Federal standards.
`(C)(i) Subject to clause (ii), the date specified in this subparagraph
for a State is the date the State adopts the NAIC standards or the Federal stand
ards or 1 year after the date the Association or the Secretary first adopts such
standards, whichever is earlier.
`(ii) In the case of a State which the Secretary identifies, in consulta
tion with the Association, as--
`(I) requiring State legislation (other than legislation appropriati
ng funds) in order for medicare supplemental policies to meet the NAIC or Federa
l standards, but
`(II) having a legislature which is not scheduled to meet in 1992 in
a legislative session in which such legislation may be considered,
the date specified in this subparagraph is the first day of the first cal
endar quarter beginning after the close of the first legislative session of the
State legislature that begins on or after January 1, 1992. For purposes of the p
revious sentence, in the case of a State that has a 2-year legislative session,
each year of such session shall be deemed to be a separate regular session of th
e State legislature.
`(D) In promulgating standards under this paragraph, the Association or
Secretary shall consult with a working group composed of representatives of issu
ers of medicare supplemental policies, consumer groups, medicare beneficiaries,
and other qualified individuals. Such representatives shall be selected in a man
ner so as to assure balanced representation among the interested groups.
`(E) If benefits (including deductibles and coinsurance) under this titl
e are changed and the Secretary determines, in consultation with the Association
, that changes in the NAIC or Federal standards are needed to reflect such chang
es, the preceding provisions of this paragraph shall apply to the modification o
f standards previously established in the same manner as they applied to the ori
ginal establishment of such standards.
`(2) The benefits under the NAIC or Federal standards shall provide--
`(A) for such groups or packages of benefits as may be appropriate t
aking into account the considerations specified in paragraph (3) and the require
ments of the succeeding subparagraphs;
`(B) for identification of a core group of basic benefits common to
all policies, and
`(C) that, subject to paragraph (5)(B), the total number of differen
t benefit packages (counting the core group of basic benefits described in subpa
ragraph (B) and each other combination of benefits that may be offered as a sepa
rate benefit package) that may be established in all the States and by all issue
rs shall not exceed 10.
`(3) The benefits under paragraph (2) shall, to the extent possible--
`(A) provide for benefits that offer consumers the ability to purcha
se the benefits that are available in the market as of the date of the enactment
of this subsection; and
`(B) balance the objectives of (i) simplifying the market to facilit
ate comparisons among policies, (ii) avoiding adverse selection, (iii) providing
consumer choice, (iv) providing market stability, and (v) promoting competition
.
`(4)(A)(i) Except as provided in subparagraph (B), no State with a regul
atory program approved under subsection (b)(1) may provide for or permit the gro
uping of benefits (or language or format with respect to such benefits) under a
medicare supplemental policy unless such grouping meets the applicable standards
.
`(ii) Except as provided in subparagraph (B), the Secretary may not prov
ide for or permit the grouping of benefits (or language or format with respect t
o such benefits) under a medicare supplemental policy seeking approval by the Se
cretary unless such grouping meets the applicable standards.
`(B) With the approval of the State (in the case of a policy issued in a
State with an approved regulatory program) or the Secretary (in the case of any
other policy), the issuer of a medicare supplemental policy may offer new or in
novative benefits in addition to the benefits provided in a policy that otherwis
e complies with the applicable standards. Any such new or innovative benefits ma
y include benefits that are not otherwise available and are cost-effective and s
hall be offered in a manner which is consistent with the goal of simplification
of medicare supplemental policies.
`(5)(A) Except as provided in subparagraph (B), this subsection shall no
t be construed as preventing a State from restricting the groups of benefits tha
t may be offered in medicare supplemental policies in the State.
`(B) A State with a regulatory program approved under subsection (b)(1)
may not restrict under subparagraph (A) the offering of a medicare supplemental
policy consisting only of the core group of benefits described in paragraph (2)(
B).
`(6) The Secretary may waive the application of standards in regard to t
he limitation of benefits described in paragraph (4) in those States that on the
date of enactment of this subsection had in place an alternative simplification
program.
`(7) This subsection shall not be construed as preventing an issuer of a
medicare supplemental policy who otherwise meets the requirements of this secti
on from providing, through an arrangement with a vendor, for discounts from that
vendor to policyholder or certificateholders for the purchase of items or servi
ces not covered under its medicare supplemental policies.
`(8) Any person who sells or issues a medicare supplemental policy, afte
r the effective date of the NAIC or Federal standards with respect to the policy
, in violation of the previous requirements of this subsection is subject to a c
ivil money penalty of not to exceed $25,000 (or $15,000 in the case of a seller
who is not an issuer of a policy) for each such violation. The provisions of sec
tion 1128A (other than the first sentence of subsection (a) and other than subse
ction (b)) shall apply to a civil money penalty under the previous sentence in t
he same manner as such provisions apply to a penalty or proceeding under section
1128A(a).
`(9)(A) Anyone who sells a medicare supplemental policy to an individual
shall make available for sale to the individual a medicare supplemental policy
with only the core group of basic benefits (described in paragraph (2)(B)).
`(B) Anyone who sells a medicare supplemental policy to an individual sh
all provide the individual, before the sale of the policy, an outline of coverag
e which describes the benefits under the policy. Such outline shall be on a stan
dard form approved by the State regulatory program or the Secretary (as the case
may be) consistent with the NAIC or Federal standards under this subsection.
`(C) Whoever sells a medicare supplemental policy in violation of this p
aragraph is subject to a civil money penalty of not to exceed $25,000 (or $15,00
0 in the case of a seller who is not the issuer of the policy) for each such vio
lation. The provisions of section 1128A (other than the first sentence of subsec
tion (a) and other than subsection (b)) shall apply to a civil money penalty und
er the previous sentence in the same manner as such provisions apply to a penalt
y or proceeding under section 1128A(a).
`(10) No penalty may be imposed under paragraph (8) or (9) in the case o
f a seller who is not the issuer of a policy until the Secretary has published a
list of the groups of benefit packages that may be sold or issued consistent wi
th this subsection.'.
SEC. 4352. GUARANTEED RENEWABILITY.
Section 1882 is amended by adding at the end the following new subsectio
n:
`(q) The requirements of this subsection are as follows:
`(1) Each medicare supplemental policy shall be guaranteed renewable
and--
`(A) the issuer may not cancel or nonrenew the policy solely on
the ground of health status of the individual; and
`(B) the issuer shall not cancel or nonrenew the policy for any
reason other than nonpayment of premium or material misrepresentation.
`(2) If the medicare supplemental policy is terminated by the group
policyholder and is not replaced as provided under paragraph (2), the issuer sha
ll offer certificateholders an individual medicare supplemental policy which (at
the option of the certificateholder)--
`(A) provides for continuation of the benefits contained in the
group policy, or
`(B) provides for such benefits as otherwise meets the requireme
nts of this section.
`(3) If an individual is a certificateholder in a group medicare sup
plemental policy and the individual terminates membership in the group, the issu
er shall--
`(A) offer the certificateholder the conversion opportunity desc
ribed in paragraph (2), or
`(B) at the option of the group policyholder, offer the certific
ateholder continuation of coverage under the group policy.
`(4) If a group medicare supplemental policy is replaced by another
group medicare supplemental policy purchased by the same policyholder, the succe
eding issuer shall offer coverage to all persons covered under the old group pol
icy on its date of termination. Coverage under the new group policy shall not re
sult in any exclusion for preexisting conditions that would have been covered un
der the group policy being replaced.'.
SEC. 4353. ENFORCEMENT OF STANDARDS.
(a) REQUIRING CONFORMITY WITH STANDARDS- Section 1882 is amended--
(1) in the heading, by striking `VOLUNTARY'; and
(2) in subsection (a)--
(A) by inserting `(1)' after `(a)',
<
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(B) by adding at the end the following new paragraph:
`(2) No medicare supplemental policy may be issued in a State on or afte
r the date specified in subsection (p)(1)(C) unless--
`(A) the State's regulatory program under subsection (b)(1) provides
for the application and enforcement of the standards and requirements set forth
in such subsection (including the NAIC standards or the Federal standards (as t
he case may be)) by the date specified in subsection (p)(1)(C); or
`(B) if the State's program does not provide for the application and
enforcement of such standards and requirements, the policy has been certified b
y the Secretary under paragraph (1) as meeting the standards and requirements se
t forth in subsection (c) (including such applicable standards) by such date.
Any person who issues a medicare supplemental policy, after the effective
date of the NAIC or Federal standards with respect to the policy, in violation
of this paragraph is subject to a civil money penalty of not to exceed $25,000 f
or each such violation. The provisions of section 1128A (other than the first se
ntence of subsection (a) and other than subsection (b)) shall apply to a civil m
oney penalty under the previous sentence in the same manner as such provisions a
pply to a penalty or proceeding under section 1128A(a).'.
(b) PERIODIC REVIEW OF STATE REGULATORY PROGRAMS- Section 1882(b) is ame
nded--
(1) in paragraph (1), by striking `Supplemental Health Insurance Pan
el (established under paragraph (2))' and inserting `the Secretary',
(2) in paragraph (1), by striking `the Panel' and inserting `the Sec
retary',
(3) in subparagraphs (A) and (D) of paragraph (1), by inserting `and
enforcement' after `application', and
(4) by amending paragraph (2) to read as follows:
`(2) The Secretary periodically shall review State regulatory programs t
o determine if they continue to meet the standards and requirements specified in
paragraph (1). If the Secretary finds that a State regulatory program no longer
meets the standards and requirements, before making a final determination, the
Secretary shall provide the State an opportunity to adopt such a plan of correct
ion as would permit the State regulatory program to continue to meet such standa
rds and requirements. If the Secretary makes a final determination that the Stat
e regulatory program, after such an opportunity, fails to meet such standards an
d requirements, the program shall no longer be considered to have in operation a
program meeting such standards and requirements.'.
(c) ENFORCEMENT BY STATES- Section 1882(b)(1) (42 U.S.C. 1395ss(b)(1)) i
s amended--
(1) by striking `and' at the end of subparagraph (D);
(2) by inserting `and' at the end of subparagraph (E);
(3) by inserting after subparagraph (E) the following:
`(F) reports to the Secretary on the implementation and enforcem
ent of standards and requirements of this paragraph at intervals established by
the Secretary,'; and
(5) by adding at the end the following new sentence: `The report req
uired under subsection (F) shall include information on loss ratios of policies
sold in the State, frequency and types of instances in which policies approved b
y the State fail to meet the standards of this paragraph, actions taken by the S
tate to bring such policies into compliance, and information regarding State pro
grams implementing consumer protection provisions, and such further information
as the Secretary in consultation with the National Association of Insurance Comm
issioners, may specify.'.
(d) REQUIRING APPROVAL OF STATE FOR SALE IN THE STATE-
(1) IN GENERAL- Section 1882(d)(4)(B) (42 U.S.C. 1395ss(d)(4)(B)) is
amended by striking the second sentence.
(2) EFFECTIVE DATE- The amendment made by paragraph (1) shall apply
to policies mailed, or caused to be mailed, on and after July 1, 1991.
SEC. 4354. PREVENTING DUPLICATION.
(a) IN GENERAL- Subsection (d)(3) of section 1882 (42 U.S.C. 1395ss) is
amended--
(1) in subparagraph (A)--
(A) by striking `Whoever knowingly sells' and inserting `It is u
nlawful for a person to sell or issue',
(B) by striking `substantially',
(C) by striking `, shall be fined' and inserting `. Whoever viol
ates the previous sentence shall be fined',
(D) in subparagraph (A), by inserting `or title XIX' after `othe
r than this title',
(E) in subparagraph (A), by striking `$5,000' and inserting `$25
,000 (or $15,000 in the case of a person other than the issuer of the policy)',
and
(F) by adding at the end the following: `A seller (who is not th
e issuer of a health insurance policy) shall not be considered to violate the pr
evious sentence if the policy is sold in compliance with subparagraph (B) and th
e statement under such subparagraph indicates on its face that the sale of the p
olicy will not duplicate health benefits to which the individual is otherwise en
titled. This subsection shall not apply to such a seller until such date as the
Secretary publishes a list of the standardized benefit packages that may be offe
red consistent with subsection (p).';
(2) by amending subparagraph (B) to read as follows:
`(B)(i) It is unlawful for a person to issue or sell a medicare suppleme
ntal policy to an individual entitled to benefits under part A or enrolled under
part B, whether directly, through the mail, or otherwise, unless--
`(I) the person obtains from the individual, as part of the applicat
ion for the issuance or purchase and on a form described in clause (ii), a writt
en statement signed by the individual stating, to the best of the individual's k
nowledge, what health insurance policies the individual has, from what source, a
nd whether the individual is entitled to any medical assistance under title XIX,
whether as a qualified medicare beneficiary or otherwise, and
`(II) the written statement is accompanied by a written acknowledgme
nt, signed by the seller of the policy, of the request for and receipt of such s
tatement.
`(ii) The statement required by clause (i) shall be made on a form that-
-
`(I) states in substance that a medicare-eligible individual does no
t need more than one medicare supplemental policy,
`(II) states in substance that individuals 65 years of age or older
may be eligible for benefits under the State medicaid program under title XIX an
d that such individuals who are entitled to benefits under that program usually
do not need a medicare supplemental policy and that benefits and premiums under
any such policy shall be suspended upon request of the policyholder during the p
eriod (of not longer than 24 months) of entitlement to benefits under such title
and may be reinstituted upon loss of such entitlement, and
`(III) states that counseling services may be available in the State
to provide advice concerning the purchase of medicare supplemental policies and
enrollment under the medicaid program and may provide the telephone number for
such services.
`(iii)(I) Except as provided in subclauses (II) and (III), if the statem
ent required by clause (i) is not obtained or indicates that the individual has
another medicare supplemental policy or indicates that the individual is entitle
d to any medical assistance under title XIX, the sale of such a policy shall be
considered to be a violation of subparagraph (A).
`(II) Subclause (I) shall not apply in the case of an individual who has
another policy, if the individual indicates in writing, as part of the applicat
ion for purchase, that the policy being purchased replaces such other policy and
indicates an intent to terminate the policy being replaced when the new policy
becomes effective and the issuer or seller certifies in writing that such policy
will not, to the best of the issuer or seller's knowledge, duplicate coverage (
taking into account any such replacement).
`(III) Subclause (I) also shall not apply if a State medicaid plan under
title XIX pays the premiums for the policy, or pays less than an individual's (
who is described in section 1905(p)(1)) full liability for medicare cost sharing
as defined in section 1905(p)(3)(A).
`(iv) Whoever issues or sells a medicare supplemental policy in violatio
n of this subparagraph shall be fined under title 18, United States Code, or imp
risoned not more than 5 years, or both, and, in addition to or in lieu of such a
criminal penalty, is subject to a civil money penalty of not to exceed $25,000
(or $15,000 in the case of a seller who is not the issuer of a policy) for each
such violation.'.
(b) SUSPENSION OF POLICY DURING MEDICAID ENTITLEMENT- Section 1882(q), a
s added by section 4352, is amended by adding at the end the following new parag
raph:
`(5)(A) Each medicare supplemental policy shall provide that benefit
s and premiums under the policy shall be suspended at the request of the policyh
older for the period (not to exceed 24 months) in which the policyholder has app
lied for and is determined to be entitled to medical assistance under title XIX
of the Social Security Act, but only if the policyholder notifies the issuer of
such policy within 90 days after the date the individual becomes entitled to suc
h assistance. If such suspension occurs and if the policyholder or certificate h
older loses entitlement to such medical assistance, such policy shall be automat
ically reinstituted (effective as of the date of termination of such entitlement
) under terms described in subsection (n)(6)(A)(ii) as of the termination of suc
h entitlement if the policyholder provides notice of loss of such entitlement wi
thin 90 days after the date of such loss.
`(B) Nothing in this section shall be construed as affecting the aut
hority of a State, under title XIX of the Social Security Act, to purchase a med
icare supplemental policy for an individual otherwise entitled to assistance und
er such title.
`(C) Any person who issues a medicare supplemental policy and fails
to comply with the requirements of this paragraph is subject to a civil money pe
nalty of not to exceed $25,000 for each such violation. The provisions of sectio
n 1128A (other than the first sentence of subsection (a) and other than subsecti
on (b)) shall apply to a civil money penalty under the previous sentence in the
same manner as such provisions apply to a penalty or proceeding under section 11
28A(a).'.
(c) EFFECTIVE DATE- The amendments made by this section shall apply to p
olicies issued or sold more than 1 year after the date of the enactment of this
Act.
SEC. 4355. LOSS RATIOS AND REFUND OF PREMIUMS.
(a) IN GENERAL- Section 1882 (42 U.S.C. 1395ss) is further amended--
(1) in subsection (c), by amending paragraph (2) to read as follows:
`(2) meets the requirements of subsection (r);';
(2) by striking the sentence following subsection (c)(4); and
(3) by adding at the end the following new subsection:
`(r)(1) A medicare supplemental policy may not be issued or sold in any
State unless--
`(A) the policy can be expected (as estimated for the entire period
for which rates are computed to provide coverage, on the basis of incurred claim
s experience and earned premiums for such periods and in accordance with a unifo
rm methodology, including uniform reporting standards, developed by the National
Association of Insurance Commissioners 27
`(B) the issuer of the policy provides for the issuance of a proport
ional refund, or a credit against future premiums of a proportional amount, base
d on the premium paid and in accordance with paragraph (2), of the amount of pre
miums received necessary to assure that the ratio of aggregate benefits provided
to the aggregate premiums collected (net of such refunds or credits) complies w
ith the expectation required under subparagraph (A).
For purposes of applying subparagraph (A) only, policies issued as a resu
lt of solicitations of individuals through the mails or by mass media advertisin
g (including both print and broadcast advertising) shall be deemed to be individ
ual policies.
`(2)(A) Paragraph (1)(B) shall be applied with respect to each type of p
olicy by policy number. Paragraph (1)(B) shall not apply to a policy with respec
t to the first 2 years in which it is in effect. The Comptroller General, in con
sultation with the National Association of Insurance Commissioners, shall submit
to Congress a report containing recommendations on adjustments in the percentag
es under paragraph (1)(A) that may be appropriate in order to apply paragraph (1
)(B) to the first 2 years in which policies are effective.
`(B) A refund or credit required under paragraph (1)(B) shall be made to
each policyholder insured under the applicable policy as of the last day of the
year involved.
`(C) Such a refund or credit shall include interest from the end of the
policy year involved until the date of the refund or credit at a rate as specifi
ed by the Secretary for this purpose from time to time which is not less than th
e average rate of interest for 13-week Treasury notes.
`(D) For purposes of this paragraph and paragraph (1)(B), refunds or cre
dits against premiums due shall be made, with respect to a policy year, not late
r than the third quarter of the succeeding policy year.
`(3) The provisions of this subsection do not preempt a State from requi
ring a higher percentage than that specified in paragraph (1)(A).
`(4) The Secretary shall submit in February of each year (beginning with
1993) a report to the Committees on Energy and Commerce and Ways and Means of t
he House of Representatives and the Committee on Finance of the Senate on loss-r
atios under medicare supplemental policies and the use of sanctions, such as a r
equired rebate or credit or the disllowance 28
`(5)(A) The Comptroller General shall periodically, not less often than
once every 3 years, perform audits with respect to the compliance of medicare su
pplemental policies with the loss ratio requirements of this subsection and shal
l report the results of such audits to the State involved and to the Secretary.<
/ul>
`(B) The Secretary may independently perform such compliance audits.
`(6)(A) A person who issues a policy in violation of the loss ratio requ
irements of this subsection is subject to a civil money penalty of not to exceed
$25,000 for each such violation. The provisions of section 1128A (other than th
e first sentence of subsection (a) and other than subsection (b)) shall apply to
a civil money penalty under the previous sentence in the same manner as such pr
ovisions apply to a penalty or proceeding under section 1128A(a).
`(B) Each issuer of a policy subject to the requirements of paragraph (1
)(B) shall be liable to policyholders for credits required under such paragraph.
'.
(b) ASSURING ACCESS TO LOSS RATIO INFORMATION- Section 1882(b)(1)(C) (42
U.S.C. 1395ss(b)(1)(C)) is amended by striking the semicolon at the end and ins
erting a comma and the following:
`and that a copy of each such policy, the most recent premium for eac
h such policy, and a listing of the ratio of benefits provided to premiums colle
cted for the most recent 3-year period for each such policy issued or sold in th
e State is maintained and made available to interested persons;'.
(c) IMPLEMENTATION OF PROCESS TO APPROVE PREMIUM INCREASES- Section 1882
(b)(1) (42 U.S.C. 1395ss(b)(1)) is further amended--
(1) by striking `and' at the end of subparagraph (E);
(2) by adding `and' at the end of subparagraph (F);
(3) by adding at the end thereof the following new subparagraph:
`(G) provides for a process for approving or disapproving propos
ed premium increases with respect to such policies, and establishes a policy for
the holding of public hearings prior to approval of a premium increase,'.
<
/ul> (d) EFFECTIVE DATE- The amendments made by this section shall apply to p
olicies sold or issued more than 1 year after the date of the enactment of this
Act.
(a) IN GENERAL- The first sentence of section 1882(g)(1) is amended by i
nserting before the period at the end the following: `and does not include a pol
icy or plan of a health maintenance organization or other direct service organiz
ation which offers benefits under this title, including such services under a co
ntract under under section 1876 or an agreement under section 1833'.
(b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effe
ct on the date of the enactment of this Act.
(a) IN GENERAL- Section 1882 is amended--
(1) in subsection (c), in the matter before paragraph (1), by insert
ing `or the requirement described in subsection (s)' after `paragraph (3)', and<
/ul>
(2) by adding at the end the following new subsection:
`(s)(1) If a medicare supplemental policy replaces another medicare supp
lemental policy, the issuer of the replacing policy shall waive any time periods
applicable to preexisting conditions, waiting period, elimination periods and p
robationary periods in the new medicare supplemental policy for similar benefits
to the extent such time was spent under the original policy.
`(2)(A) The issuer of a medicare supplemental policy may not deny or con
dition the issuance or effectiveness of a medicare supplemental policy, or discr
iminate in the pricing of the policy, because of health status, claims experienc
e, receipt of health care, or medical condition for which an application is subm
itted during the 6 month period beginning with the first month in which the indi
vidual (who is 65 years of age or older) first is enrolled for benefits under pa
rt B.
`(B) Subject to subparagraph (C), subparagraph (A) shall not be construe
d as preventing the exclusion of benefits under a policy, during its first 6 mon
ths, based on a pre-existing condition for which the policyholder received treat
ment or was otherwise diagnosed during the 6 months before it became effective.<
/ul>
`(C) If a medicare supplemental policy or certificate replaces another s
uch policy or certificate which has been in effect for 6 months or longer, the r
eplacing policy may not provide any time period applicable to pre-existing condi
tions, waiting periods, elimination periods, and probationary periods in the new
policy or certificate for similar benefits.
`(3) Any issuer of a medicare supplemental policy that fails to meet the
requirements of paragraphs (1) and (2) is subject to a civil money penalty of n
ot to exceed $5,000 for each such failure. The provisions of section 1128A (othe
r than the first sentence of subsection (a) and other than subsection (b)) shall
apply to a civil money penalty under the previous sentence in the same manner a
s such provisions apply to a penalty or proceeding under section 1128A(a).'.
(b) EFFECTIVE DATE- The amendments made by subsection (a) shall take eff
ect 1 year after the date of the enactment of this Act.
SEC. 4358. MEDICARE SELECT POLICIES.
(a) IN GENERAL- Section 1882 (42 U.S.C. 1395ss) is further amended by ad
ding at the end the following:
`(t)(1) If a policy meets the NAIC Model Standards and otherwise complie
s with the requirements of this section except that benefits under the policy ar
e restricted to items and services furnished by certain entities (or reduced ben
efits are provided when items or services are furnished by other entities), the
policy shall nevertheless be treated as meeting those standards if--
`(A) full benefits are provided for items and services furnished thr
ough a network of entities which have entered into contracts with the issuer of
the policy;
`(B) full benefits are provided for items and services furnished by
other entities if the services are medically necessary and immediately required
because of an unforeseen illness, injury, or condition and it is not reasonable
given the circumstances to obtain the services through the network;
`(C) the network offers sufficient access;
`(D) the issuer of the policy has arrangements for an ongoing qualit
y assurance program for items and services furnished through the network;
`(E)(i) the issuer of the policy provides to each enrollee at the ti
me of enrollment an explanation of (I) the restrictions on payment under the pol
icy for services furnished other than by or through the network, (II) out of are
a coverage under the policy, (III) the policy's coverage of emergency services a
nd urgently needed care, and (IV) the availability of a policy through the entit
y that meets the NAIC standards without reference to this subsection and the pre
mium charged for such policy, and
`(ii) each enrollee prior to enrollment acknowledges receipt of the
explanation provided under clause (i); and
`(F) the issuer of the policy makes available to individuals, in add
ition to the policy described in this subsection, any policy (otherwise offered
by the issuer to individuals in the State) that meets the NAIC standards and oth
er requirements of this section without reference to this subsection.
`(2) If the Secretary determines that an issuer of a policy approved und
er paragraph (1)--
`(A) fails substantially to provide medically necessary items and se
rvices to enrollees seeking such items and services through the issuer's network
, if the failure has adversely affected (or has substantial likelihood of advers
ely affecting) the individual,
`(B) imposes premiums on enrollees in excess of the premiums approve
d by the State,
`(C) acts to expel an enrollee for reasons other than nonpayment of
premiums, or
`(D) does not provide the explanation required under paragraph (1)(E
)(i) or does not obtain the acknowledgment required under paragraph (1)(E)(ii),<
/ul>
is subject to a civil money penalty in an amount not to exceed $25,000 fo
r each such violation. The provisions of section 1128A (other than the first sen
tence of subsection (a) and other than subsection (b)) shall apply to a civil mo
ney penalty under the previous sentence in the same manner as such provisions ap
ply to a penalty or proceeding under section 1128A(a).
`(3) The Secretary may enter into a contract with an entity whose policy
has been certified under paragraph (1) or has been approved by a State under su
bsection (b)(1)(H) to determine whether items and services (furnished to individ
uals entitled to benefits under this title and under that policy) are not allowa
ble under section 1862(a)(1). Payments to the entity shall be in such amounts as
the Secretary may determine, taking into account estimated savings under contra
cts with carriers and fiscal intermediaries and other factors that the Secretary
finds appropriate. Paragraph (1), the first sentence of paragraph (2)(A), parag
raph (2)(B), paragraph (3)(C), paragraph (3)(D), and paragraph (3)(E) of section
1842(b) shall apply to the entity.'.
(b) CONFORMING AMENDMENTS- (1) Section 1882(c)(1) (42 U.S.C. 1395ss(c)(1
)) is amended by inserting `(except as otherwise provided by subsection (t))' be
fore the semicolon.
(2) Section 1882(b)(1) (42 U.S.C. 1395ss(b)(1)), as previously amended,
is amended--
(A) in subparagraph (A), by inserting `, except as otherwise provide
d by subparagraph (H)' before the semicolon;
(B) by striking `and' at the end of subparagraph (F);
(C) by inserting `and' at the end of subparagraph (G); and
(D) by adding after subparagraph (G) the following:
`(H) in the case of a policy that meets the standards under subp
aragraph (A) except that benefits under the policy are limited to items and serv
ices furnished by certain entities (or reduced benefits are provided when items
or services are furnished by other entities), provides for the application of re
quirements equal to or more stringent than the requirements under subsection (t)
,'.
(3) The first sentence of section 1154(a)(4)(B) (42 U.S.C. 1320c-3(a)(4)
(B)) is amended by inserting `(or subject to review under section 1882(t))' afte
r `section 1876'.
(c) EFFECTIVE DATE- The amendments made by this section shall only apply
in 15 States (as determined by the Secretary of Health and Human Services) and
only during the 3-year period beginning with 1992.
(d) EVALUATION- The Secretary of Health and Human Services shall conduct
an evaluation of the amendments made by this section and shall report to Congre
ss on such evaluation by not later than January 1, 1995.
(a) IN GENERAL- The Secretary of Health and Human Services shall establi
sh a health insurance advisory service program (in this section referred to as t
he `beneficiary assistance program') to assist medicare-eligible individuals wit
h the receipt of services under the medicare and medicaid programs and other hea
lth insurance programs.
(b) OUTREACH ELEMENTS- The beneficiary assistance program shall provide
assistance--
(1) through operation using local Federal offices that provide infor
mation on the medicare program,
(2) using community outreach programs, and
(3) using a toll-free telephone information service.
(c) ASSISTANCE PROVIDED- The beneficiary assistance program shall provid
e for information, counseling, and assistance for medicare-eligible individuals
with respect to at least the following:
(1) With respect to the medicare program--
(A) eligibility,
(B) benefits (both covered and not covered),
(C) the process of payment for services,
<
/ul>
(D) rights and process for appeals of determinations,
(E) other medicare-related entities (such as peer review organiz
ations, fiscal intermediaries, and carriers), and
(F) recent legislative and administrative changes in the medicar
e program.
(2) With respect to the medicaid program--
(A) eligibility, benefits, and the application process,
(B) linkages between the medicaid and medicare programs, and
(C) referral to appropriate State and local agencies involved in
the medicaid program.
(3) With respect to medicare supplemental policies--
(A) the program under section 1882 of the Social Security Act an
d standards required under such program,
<
/ul>
(B) how to make informed decisions on whether to purchase such p
olicies and on what criteria to use in evaluating different policies,
(C) appropriate Federal, State, and private agencies that provid
e information and assistance in obtaining benefits under such policies, and
<
/ul>
(D) other issues deemed appropriate by the Secretary.
The beneficiary assistance program also shall provide such other services
as the Secretary deems appropriate to increase beneficiary understanding of, an
d confidence in, the medicare program and to improve the relationship between be
neficiaries and the program.
(d) EDUCATIONAL MATERIAL- The Secretary, through the Administrator of th
e Health Care Financing Administration, shall develop appropriate educational ma
terials and other appropriate techniques to assist employees in carrying out thi
s section.
(e) NOTICE TO BENEFICIARIES- The Secretary shall take such steps as are
necessary to assure that medicare-eligible beneficiaries and the general public
are made aware of the beneficiary assistance program.
(f) REPORT- The Secretary shall include, in an annual report transmitted
to the Congress, a report on the beneficiary assistance program and on other he
alth insurance informational and counseling services made available to medicare-
eligible individuals. The Secretary shall include in the report recommendations
for such changes as may be desirable to improve the relationship between the med
icare program and medicare-eligible individuals.
(a) GRANTS- The Secretary of Health and Human Services (in this section
referred to as the `Secretary') shall make grants to States, with approved State
regulatory programs under section 1882 of the Social Security Act, that submit
applications to the Secretary that meet the requirements of this section for the
purpose of providing information, counseling, and assistance relating to the pr
ocurement of adequate and appropriate health insurance coverage to individuals w
ho are eligible to receive benefits under title XVIII of the Social Security Act
(in this section referred to as `eligible individuals'). The Secretary shall pr
escribe regulations to establish a minimum level of funding for a grant issued u
nder this section.
(b) GRANT APPLICATIONS-
(1) In submitting an application under this section, a State may con
solidate and coordinate an application that consists of parts prepared by more t
han one agency or department of such State.
(2) As part of an application for a grant under this section, a Stat
e shall submit a plan for a State-wide health insurance information, counseling,
and assistance program. Such program shall--
<
/ul>
(A) establish or improve upon a health insurance information, co
unseling, and assistance program that provides counseling and assistance to elig
ible individuals in need of health insurance information, including--
(i) information that may assist individuals in obtaining ben
efits and filing claims under titles XVIII and XIX of the Social Security Act;
(ii) policy comparison information for medicare supplemental
policies (as described in section 1882(g)(1) of the Social Security Act 29
(iii) information regarding long-term care insurance; and
(iv) information regarding other types of health insurance b
enefits that the Secretary determines to be appropriate;
(B) in conjunction with the health insurance information, counse
ling, and assistance program described in subparagraph (A), establish a system o
f referral to appropriate Federal or State departments or agencies for assistanc
e with problems related to health insurance coverage (including legal problems),
as determined by the Secretary;
(C) provide for a sufficient number of staff positions (includin
g volunteer positions) necessary to provide the services of the health insurance
information, counseling, and assistance program;
(D) provide assurances that staff members (including volunteer s
taff members) of the health insurance information, counseling, and assistance pr
ogram have no conflict of interest in providing the services described in subpar
agraph (A);
(E) provide for the collection and dissemination of timely and a
ccurate health care information to staff members;
(F) provide for training programs for staff members (including v
olunteer staff members);
(G) provide for the coordination of the exchange of health insur
ance information between the staff of departments and agencies of the State gove
rnment and the staff of the health insurance information, counseling, and assist
ance program;
(H) make recommendations concerning consumer issues and complain
ts related to the provision of health care to agencies and departments of the St
ate government and the Federal Government responsible for providing or regulatin
g health insurance;
(I) establish an outreach program to provide the health insuranc
e information and counseling described in subparagraph (A) and the assistance de
scribed in subparagraph (B) to eligible individuals; and
(J) demonstrate, to the satisfaction of the Secretary, an abilit
y to provide the counseling and assistance required under this section.
(c) SPECIAL GRANTS-
(1) A State that is conducting a health insurance information, couns
eling, and assistance program that is substantially similar to a program describ
ed in subsection (b)(2) shall, as a requirement for eligibility for a grant unde
r this section, demonstrate, to the satisfaction of the Secretary, that such Sta
te shall maintain the activities of such program at least at the level that such
activities were conducted immediately preceding the date of the issuance of any
grant during the period of time covered by such grant under this section and th
at such activities will continue to be maintained at such level.
(2) If the Secretary determines that the existing health insurance i
nformation, counseling, and assistance program is substantially similar to a pro
gram described in subsection (b)(2), the Secretary may waive some or all of the
requirements described in such subsection and issue a grant to the State for the
purpose of increasing the number of services offered by the health insurance in
formation, counseling, and assistance program, experimenting with new methods of
outreach in conducting such program, or expanding such program to geographic ar
eas of the State not previously served by the program.
(d) CRITERIA FOR ISSUING GRANTS- In issuing a grant under this section,
the Secretary shall consider--
(1) the commitment of the State to carrying out the health insurance
information, counseling, and assistance program described in subsection (b)(2),
including the level of cooperation demonstrated--
(A) by the office of the chief insurance regulator of the State,
or the equivalent State entity;
(B) other officials of the State responsible for overseeing insu
rance plans issued by nonprofit hospital and medical service associations; and
(C) departments and agencies of such State responsible for--
(i) administering funds under title XIX of the Social Securi
ty Act, and
(ii) administering funds appropriated under the Older Americ
ans Act;
(2) the population of eligible individuals in such State as a percen
tage of the population of such State; and
(3) in order to ensure the needs of rural areas in such State, the r
elative costs and special problems associated with addressing the special proble
ms of providing health care information, counseling, and assistance to the rural
areas of such State.
(e) ANNUAL STATE REPORT- A State that receives a grant under subsection
(c) or (d) 30
(1) the number of individuals served by the State-wide health insura
nce information, counseling and assistance program of such State;
(2) an estimate of the amount of funds saved by the State, and by el
igible individuals in the State, in the implementation of such program; and
(3) the problems that eligible individuals in such State encounter i
n procuring adequate and appropriate health care coverage.
(f) REPORT TO CONGRESS- Not later than 180 days after the date of the en
actment of this section, and annually thereafter, the Secretary shall issue a re
port to the Committee on Finance of the Senate, the Special Committee on Aging o
f the Senate, the Committee on Ways and Means of the House of Representatives, t
he Committee on Energy and Commerce of the House of Representatives, and the Sel
ect Committee on Aging of the House of Representatives that--
(1) summarizes the allocation of funds authorized for grants under t
his section and the expenditure of such funds;
(2) summarizes the scope and content of training conferences convene
d under this section;
(3) outlines the problems that eligible individuals encounter in pro
curing adequate and appropriate health care coverage;
(4) makes recommendations that the Secretary determines to be approp
riate to address the problems described in paragraph (3); and
(5) in the case of the report issued 2 years after the date of enact
ment of this section, evaluates the effectiveness of counseling programs establi
shed under this program, and makes recommendations regarding continued authoriza
tion of funds for these purposes.
(f) AUTHORIZATION OF APPROPRIATIONS FOR GRANTS- There are authorized to
be appropriated, in equal parts from the Federal Hospital Insurance Trust Fund a
nd from the Federal Supplementary Medical Insurance Trust Fund, $10,000,000 for
each of fiscal years 1991, 1992, and 1993, to fund the grant programs described
in this section.
SEC. 4361. MEDICARE AND MEDIGAP INFORMATION BY TELEPHONE.
(a) IN GENERAL- Title XVIII (42 U.S.C. 1395 et seq.) is amended by inser
ting after section 1888 the following:
`MEDICARE AND MEDIGAP INFORMATION BY TELEPHONE
`SEC. 1889. The Secretary shall provide information via a toll-free tele
phone number on the programs under this title and on medicare supplemental polic
ies as defined in section 1882(g)(1) (including the relationship of State progra
ms under title XIX to such policies).'.
(b) DEMONSTRATION PROJECTS- The Secretary of Health and Human Services i
s authorized to conduct demonstration projects in up to 5 States for the purpose
of establishing statewide toll-free telephone numbers for providing information
on medicare benefits, medicare supplemental policies available in the State, an
d benefits under the State medicaid program.
Subtitle B--Medicaid
Part 1--Reduction in Spending
Part 2--Protection of Low-Income Medicare Beneficiaries
Part 3--Improvements in Child Health
Part 4--Miscellaneous
subpart a--payments
subpart b--eligibility and coverage
subpart c--health maintenance organizations
subpart d--demonstration projects and home and community-based waivers
subpart e--miscellaneous
Part 5--Provisions Relating to Nursing Home Reform
PART 1--REDUCTIONS IN SPENDING
SEC. 4401. REIMBURSEMENT FOR PRESCRIBED DRUGS.
(a) IN GENERAL-
(1) DENIAL OF FEDERAL FINANCIAL PARTICIPATION UNLESS REBATE AGREEMEN
TS AND DRUG USE REVIEW IN EFFECT- Section 1903(i) (42 U.S.C. 1396b(i)) is amende
d--
(A) by striking the period at the end of paragraph (9) and inser
ting `; or', and
(B) by inserting after paragraph (9) the following new paragraph
:
`(10) with respect to covered outpatient drugs of a manufacturer dis
pensed in any State unless, (A) except as provided in section 1927(a)(3), the ma
nufacturer complies with the rebate requirements of section 1927(a) with respect
to the drugs so dispensed in all States, and (B) effective January 1, 1993, the
State provides for drug use review in accordance with section 1927(g).'.
(2) PROHIBITING STATE PLAN DRUG ACCESS LIMITATIONS FOR DRUGS COVERED
UNDER A REBATE AGREEMENT- Section 1902(a) of such Act (42 U.S.C. 1396a(a)) is a
mended--
(A) by striking `and' at the end of paragraph (52),
(B) by striking the period at the end of paragraph (53) and inse
rting `; and', and
(C) by inserting after paragraph (53) the following new paragrap
h:
`(54)(A) provide that, any formulary or similar restriction (except
as provided in section 1927(d)) on the coverage of covered outpatient drugs unde
r the plan shall permit the coverage of covered outpatient drugs of any manufact
urer which has entered into and complies with an agreement under section 1927(a)
, which are prescribed for a medically accepted indication (as defined in subsec
tion 1927(k)(6)), and
`(B) comply with the reporting requirements of section 1927(b)(2)(A)
and the requirements of subsections (d) and (g) of section 1927.'.
(3) REBATE AGREEMENTS FOR COVERED OUTPATIENT DRUGS, DRUG USE REVIEW,
AND RELATED PROVISIONS- Title XIX of the Social Security Act is amended by rede
signating section 1927 as section 1928 and by inserting after section 1926 the f
ollowing new section:
`PAYMENT FOR COVERED OUTPATIENT DRUGS
`SEC. 1927. (a) REQUIREMENT FOR REBATE AGREEMENT-
`(1) IN GENERAL- In order for payment to be available under section
1903(a) for covered outpatient drugs of a manufacturer, the manufacturer must ha
ve entered into and have in effect a rebate agreement described in subsection (b
) with the Secretary, on behalf of States (except that, the Secretary may author
ize a State to enter directly into agreements with a manufacturer). Any agreemen
t between a State and a manufacturer prior to April 1, 1991, shall be deemed to
have been entered into on January 1, 1991, and payment to such manufacturer shal
l be retroactively calculated as if the agreement between the manufacturer and t
he State had been entered into on January 1, 1991. If a manufacturer has not ent
ered into such an agreement before March 1, 1991, such an agreement, subsequentl
y entered into, shall not be effective until the first day of the calendar quart
er that begins more than 60 days after the date the agreement is entered into.
`(2) EFFECTIVE DATE- Paragraph (1) shall first apply to drugs dispen
sed under this title on or after January 1, 1991.
`(3) AUTHORIZING PAYMENT FOR DRUGS NOT COVERED UNDER REBATE AGREEMEN
TS- Paragraph (1), and section 1903(i)(10)(A), shall not apply to the dispensing
of a single source drug or innovator multiple source drug if (A)(i) the State h
as made a determination that the availability of the drug is essential to the he
alth of beneficiaries under the State plan for medical assistance; (ii) such dru
g has been given a rating of 1-A by the Food and Drug Administration; and (iii)(
I) the physician has obtained approval for use of the drug in advance of its dis
pensing in accordance with a prior authorization program described in subsection
(d), or (II) the Secretary has reviewed and approved the State's determination
under subparagraph (A); or (B) the Secretary determines that in the first calend
ar quarter of 1991, there were extenuating circumstances.
`(4) EFFECT ON EXISTING AGREEMENTS- In the case of a rebate agreemen
t in effect between a State and a manufacturer on the date of the enactment of t
his section, such agreement, for the initial agreement period specified therein,
shall be considered to be a rebate agreement in compliance with this section wi
th respect to that State, if the State agrees to report to the Secretary any reb
ates paid pursuant to the agreement and such agreement provides for a minimum ag
gregate rebate of 10 percent of the State's total expenditures under the State p
lan for coverage of the manufacturer's drugs under this title. If, after the ini
tial agreement period, the State establishes to the satisfaction of the Secretar
y that an agreement in effect on the date of the enactment of this section provi
des for rebates that are at least as large as the rebates otherwise required und
er this section, and the State agrees to report any rebates under the agreement
to the Secretary, the agreement shall be considered to be a rebate agreement in
compliance with the section for the renewal periods of such agreement.
`(b) TERMS OF REBATE AGREEMENT-
`(1) PERIODIC REBATES-
`(A) IN GENERAL- A rebate agreement under this subsection shall
require the manufacturer to provide, to each State plan approved under this titl
e, a rebate each calendar quarter (or periodically in accordance with a schedule
specified by the Secretary) in an amount specified in subsection (c) for covere
d outpatient drugs of the manufacturer dispensed under the plan during the quart
er (or such other period as the Secretary may specify). Such rebate shall be pai
d by the manufacturer not later than 30 days after the date of receipt of the in
formation described in paragraph (2) for the period involved.
`(B) OFFSET AGAINST MEDICAL ASSISTANCE- Amounts received by a St
ate under this section (or under an agreement authorized by the Secretary under
subsection (a)(1) or an agreement described in subsection (a)(4)) in any quarter
shall be considered to be a reduction in the amount expended under the State pl
an in the quarter for medical assistance for purposes of section 1903(a)(1).
`(2) STATE PROVISION OF INFORMATION-
`(A) STATE RESPONSIBILITY- Each State agency under this title sh
all report to each manufacturer not later than 60 days after the end of each cal
endar quarter and in a form consistent with a standard reporting format establis
hed by the Secretary, information on the total number of dosage units of each co
vered outpatient drug dispensed under the plan during the quarter, and shall pro
mptly transmit a copy of such report to the Secretary.
`(B) AUDITS- A manufacturer may audit the information provided (
or required to be provided) under subparagraph (A). Adjustments to rebates shall
be made to the extent that information indicates that utilization was greater o
r less than the amount previously specified.
`(3) MANUFACTURER PROVISION OF PRICE INFORMATION-
`(A) IN GENERAL- Each manufacturer with an agreement in effect u
nder this section shall report to the Secretary--
`(i) not later than 30 days after the last day of each quart
er (beginning on or after January 1, 1991), on the average manufacturer price (a
s defined in subsection (k)(1)) and, (for single source drugs and innovator mult
iple source drugs), the manufacturer's best price (as defined in subsection (c)(
2)(B)) for covered outpatient drugs for the quarter, and
`(ii) not later than 30 days after the date of entering into
an agreement under this section on the average manufacturer price (as defined i
n subsection (k)(1)) as of October 1, 1990 31
`(B) VERIFICATION SURVEYS OF AVERAGE MANUFACTURER PRICE- The Sec
retary may survey wholesalers and manufacturers that directly distribute their c
overed outpatient drugs, when necessary, to verify manufacturer prices reported
under subparagraph (A). The Secretary may impose a civil monetary penalty in an
amount not to exceed $100,000 on a wholesaler, manufacturer, or direct seller, i
f the wholesaler, manufacturer, or direct seller of a covered outpatient drug re
fuses a request for information about charges or prices by the Secretary in conn
ection with a survey under this subparagraph or knowingly provides false informa
tion. The provisions of section 1128A (other than subsections (a) (with respect
to amounts of penalties or additional assessments) and (b)) shall apply to a civ
il money penalty under this subparagraph in the same manner as such provisions a
pply to a penalty or proceeding under section 1128A(a).
`(C) PENALTIES-
`(i) FAILURE TO PROVIDE TIMELY INFORMATION- In the case of a
manufacturer with an agreement under this section that fails to provide informa
tion required under subparagraph (A) on a timely basis, the amount of the penalt
y shall be increased by $10,000 for each day in which such information has not b
een provided and such amount shall be paid to the Treasury, and, if such informa
tion is not reported within 90 days of the deadline imposed, the agreement shall
be suspended for services furnished after the end of such 90-day period and unt
il the date such information is reported (but in no case shall such suspension b
e for a period of less than 30 days).
`(ii) FALSE INFORMATION- Any manufacturer with an agreement
under this section that knowingly provides false information is subject to a civ
il money penalty in an amount not to exceed $100,000 for each item of false info
rmation. Such civil money penalties are in addition to other penalties as may be
prescribed by law. The provisions of section 1128A (other than subsections (a)
and (b)) shall apply to a civil money penalty under this subparagraph in the sam
e manner as such provisions apply to a penalty or proceeding under section 1128A
(a).
`(D) CONFIDENTIALITY OF INFORMATION- Notwithstanding any other p
rovision of law, information disclosed by manufacturers or wholesalers under thi
s paragraph is confidential and shall not be disclosed by the Secretary or a Sta
te agency (or contractor therewith) in a form which discloses the identity of a
specific manufacturer or wholesaler, prices charged for drugs by such manufactur
er or wholesaler, except as the Secretary determines to be necessary to carry ou
t this section and to permit the Comptroller General to review the information p
rovided.
`(4) LENGTH OF AGREEMENT-
`(A) IN GENERAL- A rebate agreement shall be effective for an in
itial period of not less than 1 year and shall be automatically renewed for a pe
riod of not less than one year unless terminated under subparagraph (B).
`(B) TERMINATION-
`(i) BY THE SECRETARY- The Secretary may provide for termina
tion of a rebate agreement for violation of the requirements of the agreement or
other good cause shown. Such termination shall not be effective earlier than 60
days after the date of notice of such termination. The Secretary shall provide,
upon request, a manufacturer with a hearing concerning such a termination, but
such hearing shall not delay the effective date of the termination.
`(ii) BY A MANUFACTURER- A manufacturer may terminate a reba
te agreement under this section for any reason. Any such termination shall not b
e effective until such period after the date of the notice as the Secretary may
provide (but not beyond the term of the agreement).
`(iii) EFFECTIVENESS OF TERMINATION- Any termination under t
his subparagraph shall not affect rebates due under the agreement before the eff
ective date of its termination.
`(C) DELAY BEFORE REENTRY- In the case of any rebate agreement w
ith a manufacturer under this section which is terminated, another such agreemen
t with the manufacturer (or a successor manufacturer) may not be entered into un
til a period of 1 calendar quarter has elapsed since the date of the termination
, unless the Secretary finds good cause for an earlier reinstatement of such an
agreement.
`(c) AMOUNT OF REBATE-
`(1) BASIC REBATE FOR SINGLE SOURCE DRUGS AND INNOVATOR MULTIPLE SOU
RCE DRUGS- With respect to single source drugs and innovator multiple source dru
gs, each manufacturer shall remit a basic rebate to the State medical assistance
plan. Except as otherwise provided in this subsection, the amount of the rebate
to a State for a calendar quarter (or other period specified by the Secretary)
with respect to each dosage form and strength of single source drugs and innovat
or multiple source drugs shall be equal to the product of--
`(A) the total number of units of each dosage form and strength
dispensed under the plan under this title in the quarter (or other period) repor
ted by the State under subsection (b)(2); and
`(B)(i) for quarters (or periods) beginning after December 31, 1
990, and before January 1, 1993, the greater of--
`(I) the difference between the average manufacturer price (
after deducting customary prompt payment discounts) and 87.5 percent of such pri
ce for the quarter (or other period), or
`(II) the difference between the average manufacturer price
for a drug and the best price (as defined in paragraph (2)(B)) for such quarter
(or period) for such drug (except that for calendar quarters beginning after Dec
ember 31, 1990, and ending before January 1, 1992, the rebate shall not exceed 2
5 percent of the average manufacturer price, and for calendar quarters beginning
after December 31, 1991, and ending before January 1, 1993, the rebate shall no
t exceed 50 percent of the average manufacturer price); and
`(ii) for quarters (or other periods) beginning after December 3
1, 1992, the greater of--
`(I) the difference between the average manufacturer price f
or a drug and 85 percent of such price, or
`(II) the difference between the average manufacturer price
for a drug and the best price (as defined in paragraph (2)(B)) for such quarter
(or period) for such drug.
`(C) For the purposes of this paragraph, the term `best price' means
, with respect to a single source drug or innovator multiple source drug of a ma
nufacturer, the lowest price available from the manufacturer to any wholesaler,
retailer, nonprofit entity, or governmental entity within the United States (exc
luding depot prices and single award contract prices, as defined by the Secretar
y, of any agency of the Federal Government). The best price shall be inclusive o
f cash discounts, free goods, volume discounts, and rebates (other than rebates
under this section) and shall be determined without regard to special packaging,
labeling, or identifiers on the dosage form or product or package, and shall no
t take into account prices that are merely nominal in amount; 32
`(D) In the case of a covered outpatient drug approved for marketing
after October 1, 1990, any reference in this paragraph to `October 1, 1990' sha
ll be a reference to the first day of the first month during which the drug was
marketed.
`(2) ADDITIONAL REBATE FOR SINGLE SOURCE AND INNOVATOR MULTIPLE SOUR
CE DRUGS- (A) Each manufacturer shall remit an additional rebate to the State me
dical assistance plan in an amount equal to:
`(i) For calendar quarters (or other periods) beginning after De
cember 31, 1990 and ending before January 1, 1994--
`(I) the total number of each dosage form and strength of a
single source or innovator multiple source drug dispensed during the calendar qu
arter (or other period); multiplied by
`(II)(aa) the average manufacturer price for each dosage for
m and strength, minus
`(bb) the average manufacturer price for each such dosage fo
rm and strength in effect on October 1, 1990, increased by the percentage increa
se in the Consumer Price Index for all urban consumers (U.S. average) from Octob
er 1, 1990, to the month before the beginning of the calendar quarter (or other
period) involved; 33
`(ii) For calendar quarters (or other periods) beginning after D
ecember 31, 1993--
`(I) the total number of each dosage form and strength of a
single source or innovative multiple source drug dispensed during the calendar q
uarter (or other period); multiplied by
`(II) the amount, if any, by which the weighted average manu
facturer price for single source and innovator multiple source drugs of a manufa
cturer exceeds the weighted average manufacturer price for the manufacturer as o
f October 1, 1990, increased by the percentage increase in the Consumer Price In
dex for all urban consumers (U.S. average) from October 1, 1990, to the month be
fore the beginning of the calendar quarter (or other period) involved.
`(B)(i) For the purposes of subparagraph (A)(ii), the term `weighted
average manufacturer price' means (with respect to a calendar quarter or other
period) the ratio of--
`(I) the sum of the products (for all covered drugs of the manuf
acturer purchased under a State program under this title) of--
`(aa) the average manufacturer price for each such covered d
rug; and
`(bb) the number of units of the covered drug sold to any St
ate program under this title during such period, to
`(II) the total number of units of all such covered drugs sold u
nder a State program under this title in such period,
except that the Secretary may exclude certain new drugs from the calc
ulation of the weighted average if the inclusion of any such drug in such calcul
ation has the effect of--
`(aa) reducing the rebate otherwise calculated pursuant to subpa
ragraph (A)(ii); or
`(bb) increasing the rebate otherwise calculated pursuant to sub
paragraph (A)(ii) (in cases where such calculation under the conditions outlined
in clause (ii). 34
`(ii)(I) The Secretary may exclude drugs approved by the Food and Dr
ug Administration on or after October 1, 1990, from the calculation of weighted
average manufacturer price if inclus 35
`(II) The Secretary may promulgate guidelines to restrict the condit
ions under which the Secretary may consider such petitions.
`(C) For each of 8 calendar quarters beginning after December 31, 19
91, the Secretary shall compare the aggregate amount of the rebates under subpar
agraph (A)(i) to the aggregate amount of rebates under subparagraph (A)(ii). Bas
ed on any such comparison, the Secretary may propose and utilize an alternative
formula for the purpose of calculating an aggregate rebate.
`(3) REBATE FOR OTHER DRUGS- The amount of the rebate to a State for
a calendar quarter (or other period specified by the Secretary) with respect to
covered outpatient drugs (other than single source drugs and innovator multiple
source drugs) shall be equal to the product of--
`(A) the applicable percentage (as described in paragraph (4) 37
`(B) the number of units of such form and dosage dispensed under
the plan under this title in the quarter (or other period) reported by the Stat
e under subsection (b)(2).
`(4) For the purposes of paragraph (3), the applicable percentage is
--
`(A) with respect to calendar quarters beginning after December
31, 1990, and ending before January 1, 1994, 10 percent; and
`(B) with respect to calendar quarters beginning on or after Dec
ember 31, 1993, 11 percent.
`(d) LIMITATIONS ON COVERAGE OF DRUGS-
`(1) PERMISSIBLE RESTRICTIONS- (A) Except as provided in paragraph (
6), a State may subject to prior authorization any covered outpatient drug. Any
such prior authorization program shall comply with the requirements of paragraph
(5).
`(B) A State may exclude or otherwise restrict coverage of a covered
outpatient drug if--
`(i) the prescribed use is not for a medically accepted indicati
on (as defined in (k)(6));
`(ii) the drug is contained in the list referred to in paragraph
(2); or
`(iii) the drug is subject to such restrictions pursuant to an a
greement between a manufacturer and a State authorized by the Secretary under su
bsection (a)(1) or in effect pursuant to subsection (a)(4).
`(2) LIST OF DRUGS SUBJECT TO RESTRICTION- The following drugs or cl
asses of drugs, or their medical uses, may be excluded from coverage or otherwis
e restricted:
`(A) Agents when used for anorexia or weight gain.
`(B) Agents when used to promote fertility.
`(C) Agents when used for cosmetic purposes or hair growth.
`(D) Agents when used for the symptomatic relief of cough and co
lds.
`(E) Agents when used to promote smoking cessation.
`(F) Prescription vitamins and mineral products, except prenatal
vitamins and fluoride preparations.
`(G) Nonprescription drugs.
`(H) Covered outpatient drugs which the manufacturer seeks to re
quire as a condition of sale that associated tests or monitoring services be pur
chased exclusively from the manufacturer or its designee.
`(I) Drugs described in section 107(c)(3) of the Drug Amendments
of 1962 and identical, similar, or related drugs (within the meaning of section
310.6(b)(1) of title 21 of the Code of Federal Regulations (`DESI' drugs)).
`(J) Barbiturates.
`(K) Benzodiazepines.
`(3) UPDATE OF DRUG LISTINGS- The Secretary shall (except with respe
ct to new drugs approved by the FDA for the first 6 months following the date of
approval of such drugs shall not be subject to being listed in paragraph (2) un
der the provisions of this paragraph), by regulation, periodically update the li
st of drugs described in paragraph (2) or classes of drugs, or their medical use
s, which the Secretary has determined, based on data collected by surveillance a
nd utilization review programs of State medical assistance programs, to be subje
ct to clinical abuse or inappropriate use.
`(4) INNOVATOR MULTIPLE-SOURCE DRUGS- Innovator multiple-source drug
s shall be treated under applicable State and Federal law and regulation.
`(5) PRIOR AUTHORIZATION PROGRAMS- A State plan under this title may
not require, as a condition of coverage or payment for a covered outpatient dru
g for which Federal financial participation is available in accordance with this
section, the approval of the drug before its dispensing for any medically accep
ted indication (as defined in subsection (k)(6)) unless the system providing for
such approval--
`(A) provides response by telephone or other telecommunication d
evice within 24 hours of a request for prior authorization; and
`(B) except with respect to the drugs on the list referred to in
paragraph (2), provides for the dispensing of at least a 72-hour supply of a co
vered outpatient prescription drug in an emergency situation (as defined by the
Secretary).
`(6) TREATMENT OF NEW DRUGS- A State may not exclude for coverage, s
ubject to prior authorization, or otherwise restrict any new biological or drug
approved by the Food and Drug Administration after the date of enactment of this
section, for a period of 6 months after such approval.
`(7) OTHER PERMISSIBLE RESTRICTIONS- A State may impose limitations,
with respect to all such drugs in a therapeutic class, on the minimum or maximu
m quantities per prescription or on the number of refills, provided such limitat
ions are necessary to discourage waste.
Nothing in this section shall restrict the ability of a State to address
individual instances of fraud or abuse in any manner authorized under the Social
Security Act.
`(8) DELAYED EFFECTIVE DATE- The provisions of paragraph (5) shall b
ecome effective with respect to drugs dispensed under this title on or after Jul
y 1, 1991.
`(e) DENIAL OF FEDERAL FINANCIAL PARTICIPATION IN CERTAIN CASES- The Sec
retary shall provide that no payment shall be made to a State under section 1903
(a) for an innovator multiple-source drug dispensed on or after July 1, 1991, if
, under applicable State law, a less expensive noninnovator multiple source drug
(other than the innovator multiple-source drug) could have been dispensed.
`(f) PHARMACY REIMBURSEMENT-
`(1) NO REDUCTIONS IN REIMBURSEMENT LIMITS- (A) During the period of
time beginning on January 1, 1991, and ending on December 31, 1994, the Secreta
ry may not modify by regulation the formula used to determine reimbursement limi
ts described in the regulations under 42 CFR 447.331 through 42 CFR 447.334 (as
in effect on the date of the enactment of the Omnibus Budget Reconciliation Act
of 1990) to reduce such limits for covered outpatient drugs.
(B) 38
`(2) ESTABLISHMENT OF UPPER PAYMENT LIMITS- HCFA shall establish a F
ederal upper reimbursement limit for each multiple source drug for which the FDA
has rated three or more products therapeutically and pharmaceutically equivalen
t, regardless of whether all such additional formulations are rated as such and
shall use only such formulations when determining any such upper limit.
`(g) DRUG USE REVIEW-
`(1) IN GENERAL-
`(A) In order to meet the requirement of section 1903(i)(10)(B),
a State shall provide, by not later than January 1, 1993, for a drug use review
program described in paragraph (2) for covered outpatient drugs in order to ass
ure that prescriptions (i) are appropriate, (ii) are medically necessary, and (i
ii) are not likely to result in adverse medical results. The program shall be de
signed to educate physicians and pharmacists to identify and reduce the frequenc
y of patterns of fraud, abuse, gross overuse, or inappropriate or medically unne
cessary care, among physicians, pharmacists, and patients, or associated with sp
ecific drugs or groups of drugs, as well as potential and actual severe adverse
reactions to drugs including education on therapeutic appropriateness, overutili
zation and underutilization, appropriate use of generic products, therapeutic du
plication, drug-disease contraindications, drug-drug interactions, incorrect dru
g dosage or duration of drug treatment, drug-allergy interactions, and clinical
abuse/misuse.
`(B) The program shall assess data on drug use against predeterm
ined standards, consistent with the following:
`(i) compendia which shall consist of the following:
`(I) American Hospital Formulary Service Drug Informatio
n;
`(II) United States Pharmacopeia-Drug Information; and
`(III) American Medical Association Drug Evaluations; an
d
`(ii) the peer-reviewed medical literature.
`(C) The Secretary, under the procedures established in section
1903, shall pay to each State an amount equal to 75 per centum of so much of the
sums expended by the State plan during calendar years 1991 through 1993 as the
Secretary determines is attributable to the statewide adoption of a drug use rev
iew program which conforms to the requirements of this subsection.
`(D) States shall not be required to perform additional drug use
reviews with respect to drugs dispensed to residents of nursing facilities whic
h are in compliance with the drug regimen review procedures prescribed by the Se
cretary for such facilities in regulations implementing section 1919, currently
at section 483.60 of title 42, Code of Federal Regulations.
`(2) DESCRIPTION OF PROGRAM- Each drug use review program shall meet
the following requirements for covered outpatient drugs:
`(A) PROSPECTIVE DRUG REVIEW- (i) The State plan shall provide f
or a review of drug therapy before each prescription is filled or delivered to a
n individual receiving benefits under this title, typically at the point-of-sale
or point of distribution. The review shall include screening for potential drug
therapy problems due to therapeutic duplication, drug-disease contraindications
, drug-drug interactions (including serious interactions with nonprescription or
over-the-counter drugs), incorrect drug dosage or duration of drug treatment, d
rug-allergy interactions, and clinical abuse/misuse. Each State shall use the co
mpendia and literature referred to in paragraph (1)(B) as its source of standard
s for such review.
`(ii) As part of the State's prospective drug use review program
under this subparagraph applicable State law shall establish standards for coun
seling of individuals receiving benefits under this title by pharmacists which i
ncludes at least the following:
`(I) The pharmacist must offer to discuss with each individu
al receiving benefits under this title or caregiver of such individual (in perso
n, whenever practicable, or through access to a telephone service which is toll-
free for long-distance calls) who presents a prescription, matters which in the
exercise of the pharmacist's professional judgment (consistent with State law re
specting the provision of such information), the pharmacist deems significant in
cluding the following:
`(aa) The name and description of the medication.
`(bb) The route, dosage form, dosage, route of administr
ation, and duration of drug therapy.
`(cc) Special directions and precautions for preparation
, administration and use by the patient.
`(dd) Common severe side or adverse effects or interacti
ons and therapeutic contraindications that may be encountered, including their a
voidance, and the action required if they occur.
`(ee) Techniques for self-monitoring drug therapy.
<
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`(gg) Prescription refill information.
`(hh) Action to be taken in the event of a missed dose.<
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`(II) A reasonable effort must be made by the pharmacist to
obtain, record, and maintain at least the following information regarding indivi
duals receiving benefits under this title:
`(aa) Name, address, telephone number, date of birth (or
age) and gender.
`(bb) Individual history where significant, including di
sease state or states, known allergies and drug reactions, and a comprehensive l
ist of medications and relevant devices.
`(cc) Pharmacist comments relevant to the individuals dr
ug therapy.
Nothing in this clause shall be construed as requiring a pharmaci
st to provide consultation when an individual receiving benefits under this titl
e or caregiver of such individual refuses such consultation.
`(B) RETROSPECTIVE DRUG USE REVIEW- The program shall provide, t
hrough its mechanized drug claims processing and information retrieval systems (
approved by the Secretary under section 1903(r)) or otherwise, for the ongoing p
eriodic examination of claims data and other records in order to identify patter
ns of fraud, abuse, gross overuse, or inappropriate or medically unnecessary car
e, among physicians, pharmacists and individuals receiving benefits under this t
itle, or associated with specific drugs or groups of drugs.
`(C) APPLICATION OF STANDARDS- The program shall, on an ongoing
basis, assess data on drug use against explicit predetermined standards (using t
he compendia and literature referred to in subsection (1)(B) as the source of st
andards for such assessment) including but not limited to monitoring for therape
utic appropriateness, overutilization and underutilization, appropriate use of g
eneric products, therapeutic duplication, drug-disease contraindications, drug-d
rug interactions, incorrect drug dosage or duration of drug treatment, and clini
cal abuse/misuse and, as necessary, introduce remedial strategies, in order to i
mprove the quality of care and to conserve program funds or personal expenditure
s.
`(D) EDUCATIONAL PROGRAM- The program shall, through its State d
rug use review board established under paragraph (3), either directly or through
contracts with accredited health care educational institutions, State medical s
ocieties or State pharmacists associations/societies or other organizations as s
pecified by the State, and using data provided by the State drug use review boar
d on common drug therapy problems, provide for active and ongoing educational ou
treach programs (including the activities described in paragraph (3)(C)(iii) of
this subsection) to educate practitioners on common drug therapy problems with t
he aim of improving prescribing or dispensing practices.
`(3) STATE DRUG USE REVIEW BOARD-
`(A) ESTABLISHMENT- Each State shall provide for the establishme
nt of a drug use review board (hereinafter referred to as the `DUR Board') eithe
r directly or through a contract with a private organization.
`(B) MEMBERSHIP- The membership of the DUR Board shall include h
ealth care professionals who have recognized knowledge and expertise in one or m
ore of the following:
`(i) The clinically appropriate prescribing of covered outpa
tient drugs.
`(ii) The clinically appropriate dispensing and monitoring o
f covered outpatient drugs.
`(iii) Drug use review, evaluation, and intervention.
`(iv) Medical quality assurance.
The membership of the DUR Board shall be made up at least 1/3 b
ut no more than 51 percent licensed and actively practicing physicians and at le
ast 1/3 * * * licensed and actively practicing pharmacists.
`(C) ACTIVITIES- The activities of the DUR Board shall include b
ut not be limited to the following:
`(i) Retrospective DUR as defined in section (2)(B).
`(ii) Application of standards as defined in section (2)(C).
`(iii) Ongoing interventions for physicians and pharmacists,
targeted toward therapy problems or individuals identified in the course of ret
rospective drug use reviews performed under this subsection. Intervention progra
ms shall include, in appropriate instances, at least:
`(I) information dissemination sufficient to ensure the
ready availability to physicians and pharmacists in the State of information con
cerning its duties, powers, and basis for its standards;
`(II) written, oral, or electronic reminders containing
patient-specific or drug-specific (or both) information and suggested changes in
prescribing or dispensing practices, communicated in a manner designed to ensur
e the privacy of patient-related information;
`(III) use of face-to-face discussions between health ca
re professionals who are experts in rational drug therapy and selected prescribe
rs and pharmacists who have been targeted for educational intervention, includin
g discussion of optimal prescribing, dispensing, or pharmacy care practices, and
follow-up face-to-face discussions; and
`(IV) intensified review or monitoring of selected presc
ribers or dispensers.
The Board shall re-evaluate interventions after an appropriate pe
riod of time to determine if the intervention improved the quality of drug thera
py, to evaluate the success of the interventions and make modifications as neces
sary.
`(D) ANNUAL REPORT- Each State shall require the DUR Board to pr
epare a report on an annual basis. The State shall submit a report on an annual
basis to the Secretary which shall include a description of the activities of th
e Board, including the nature and scope of the prospective and retrospective dru
g use review programs, a summary of the interventions used, an assessment of the
impact of these educational interventions on quality of care, and an estimate o
f the cost savings generated as a result of such program. The Secretary shall ut
ilize such report in evaluating the effectiveness of each State's drug use revie
w program.
`(h) ELECTRONIC CLAIMS MANAGEMENT-
`(1) IN GENERAL- In accordance with chapter 35 of title 44, United S
tates Code (relating to coordination of Federal information policy), the Secreta
ry shall encourage each State agency to establish, as its principal means of pro
cessing claims for covered outpatient drugs under this title, a point-of-sale el
ectronic claims management system, for the purpose of performing on-line, real t
ime eligibility verifications, claims data capture, adjudication of claims, and
assisting pharmacists (and other authorized persons) in applying for and receivi
ng payment.
`(2) ENCOURAGEMENT- In order to carry out paragraph (1)--
`(A) for calendar quarters during fiscal years 1991 and 1992, ex
penditures under the State plan attributable to development of a system describe
d in paragraph (1) shall receive Federal financial participation under section 1
903(a)(3)(A)(i) (at a matching rate of 90 percent) if the State acquires, throug
h applicable competitive procurement process in the State, the most cost-effecti
ve telecommunications network and automatic data processing services and equipme
nt; and
`(B) the Secretary may permit, in the procurement described in s
ubparagraph (A) in the application of part 433 of title 42, Code of Federal Regu
lations, and parts 95, 205, and 307 of title 45, Code of Federal Regulations, th
e substitution of the State's request for proposal in competitive procurement fo
r advance planning and implementation documents otherwise required.
`(i) ANNUAL REPORT-
`(1) IN GENERAL- Not later than May 1 of each year the Secretary sha
ll transmit to the Committee on Finance of the Senate, the Committee on Energy a
nd Commerce of the House of Representatives, and the Committees on Aging of the
Senate and the House of Representatives a report on the the operation of this se
ction in the preceding fiscal year.
`(2) DETAILS- Each report shall include information on--
`(A) ingredient costs paid under this title for single source dr
ugs, multiple source drugs, and nonprescription covered outpatient drugs;
`(B) the total value of rebates received and number of manufactu
rers providing such rebates;
`(C) how the size of such rebates compare with the size or rebat
es offered to other purchasers of covered outpatient drugs;
`(D) the effect of inflation on the value of rebates required un
der this section;
`(E) trends in prices paid under this title for covered outpatie
nt drugs; and
`(F) Federal and State administrative costs associated with comp
liance with the provisions of this title.
`(j) EXEMPTION OF ORGANIZED HEALTH CARE SETTINGS- (1) Covered outpatient
drugs dispensed by * * * Health Maintenance Organizations, including those orga
nizations that contract under section 1903(m), are not subject to the requiremen
ts of this section.
`(2) The State plan shall provide that a hospital (providing medical ass
istance under such plan) that dispenses covered outpatient drugs using drug form
ulary systems, and bills the plan no more than the hospital's purchasing costs f
or covered outpatient drugs (as determined under the State plan) shall not be su
bject to the requirements of this section.
`(3) Nothing in this subsection shall be construed as providing that amo
unts for covered outpatient drugs paid by the institutions described in this sub
section should not be taken into account for purposes of determining the best pr
ice as described in subsection (c).
`(k) DEFINITIONS- In this section--
`(1) AVERAGE MANUFACTURER PRICE- The term `average manufacturer pric
e' means, with respect to a covered outpatient drug of a manufacturer for a cale
ndar quarter, the average price paid to the manufacturer for the drug in the Uni
ted States by wholesalers for drugs distributed to the retail pharmacy class of
trade.
`(2) COVERED OUTPATIENT DRUG- Subject to the exceptions in paragraph
(3), the term `covered outpatient drug' means--
`(A) of those drugs which are treated as prescribed drugs for pu
rposes of section 1905(a)(12), a drug which may be dispensed only upon prescript
ion (except as provided in paragraph (5)), and--
`(i) which is approved for safety and effectiveness as a pre
scription drug under section 505 or 507 of the Federal Food, Drug, and Cosmetic
Act or which is approved under section 505(j) of such Act;
`(ii)(I) which was commercially used or sold in the United S
tates before the date of the enactment of the Drug Amendments of 1962 or which i
s identical, similar, or related (within the meaning of section 310.6(b)(1) of t
itle 21 of the Code of Federal Regulations) to such a drug, and (II) which has n
ot been the subject of a final determination by the Secretary that it is a `new
drug' (within the meaning of section 201(p) of the Federal Food, Drug, and Cosme
tic Act) or an action brought by the Secretary under section 301, 302(a), or 304
(a) of such Act to enforce section 502(f) or 505(a) of such Act; or
`(iii)(I) which is described in section 107(c)(3) of the Dru
g Amendments of 1962 and for which the Secretary has determined there is a compe
lling justification for its medical need, or is identical, similar, or related (
within the meaning of section 310.6(b)(1) of title 21 of the Code of Federal Reg
ulations) to such a drug, and (II) for which the Secretary has not issued a noti
ce of an opportunity for a hearing under section 505(e) of the Federal Food, Dru
g, and Cosmetic Act on a proposed order of the Secretary to withdraw approval of
an application for such drug under such section because the Secretary has deter
mined that the drug is less than effective for some or all conditions of use pre
scribed, recommended, or suggested in its labeling; and
`(B) a biological product, other than a vaccine which--
`(i) may only be dispensed upon prescription,
`(ii) is licensed under section 351 of the Public Health Ser
vice Act, and
`(iii) is produced at an establishment licensed under such s
ection to produce such product; and
`(C) insulin certified under section 506 of the Federal Food, Dr
ug, and Cosmetic Act.
`(3) LIMITING DEFINITION- The term `covered outpatient drug' does no
t include any drug, biological product, or insulin provided as part of, or as in
cident to and in the same setting as, any of the following (and for which paymen
t may be made under this title as part of payment for the following and not as d
irect reimbursement for the drug):
`(A) Inpatient hospital services.
`(B) Hospice services.
`(C) Dental services, except that drugs for which the State plan
authorizes direct reimbursement to the dispensing dentist are covered outpatien
t drugs.
`(D) Physicians'services.
`(E) Outpatient hospital services * * * * 39
`(F) Nursing facility sevices.
`(G) Other laboratory and x-ray services.
`(H) Renal dialysis.
Such term also does not include any such drug or product which is use
d for a medical indication which is not a medically accepted indication.
`(4) NONPRESCRIPTION DRUGS- If a State plan for medical assistance u
nder this title includes coverage of prescribed drugs as described in section 19
05(a)(12) and permits coverage of drugs which may be sold without a prescription
(commonly referred to as `over-the-counter' drugs), if they are prescribed by a
physician (or other person authorized to prescribe under State law), such a dru
g shall be regarded as a covered outpatient drug.
`(5) MANUFACTURER- The term `manufacturer' means any entity which is
engaged in--
`(A) the production, preparation, propagation, compounding, conv
ersion, or processing of prescription drug products, either directly or indirect
ly by extraction from substances of natural origin, or independently by means of
chemical synthesis, or by a combination of extraction and chemical synthesis, o
r
`(B) in the packaging, repackaging, labeling, relabeling, or dis
tribution of prescription drug products.
Such term does not include a wholesale distributor of drugs or a reta
il pharmacy licensed under State law.
`(6) MEDICALLY ACCEPTED INDICATION- The term `medically accepted ind
ication' means any use for a covered outpatient drug which is approved under the
Federal Food, Drug, and Cosmetic Act, which appears in peer-reviewed medical li
terature or which is accepted by one or more of the following compendia: the Ame
rican Hospital Formulary Service-Drug Information, the American Medical Associat
ion Drug Evaluations, and the United States Pharmacopeia-Drug Information.
<
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`(7) MULTIPLE SOURCE DRUG; INNOVATOR MULTIPLE SOURCE DRUG; NONINNOVA
TOR MULTIPLE SOURCE DRUG; SINGLE SOURCE DRUG-
`(A) DEFINED-
`(i) MULTIPLE SOURCE DRUG- The term `multiple source drug' m
eans, with respect to a calendar quarter, a covered outpatient drug (not includi
ng any drug described in paragraph (5)) for which there are 2 or more drug produ
cts which--
`(I) are rated as therapeutically equivalent (under the
Food and Drug Administration's most recent publication of `Approved Drug Product
s with Therapeutic Equivalence Evaluations'),
`(II) except as provided in subparagraph (B), are pharma
ceutically equivalent and bioequivalent, as defined in subparagraph (C) and as d
etermined by the Food and Drug Administration, and
`(III) are sold or marketed in the State during the peri
od.
`(ii) INNOVATOR MULTIPLE SOURCE DRUG- The term `innovator mu
ltiple source drug' means a multiple source drug that was originally marketed un
der an original new drug application approved by the Food and Drug Administratio
n.
`(iii) NONINNOVATOR MULTIPLE SOURCE DRUG- The term `noninnov
ator multiple source drug' means a multiple source drug that is not an innovator
multiple source drug.
`(iv) SINGLE SOURCE DRUG- The term `single source drug' mean
s a covered outpatient drug which is produced or distributed under an original n
ew drug application approved by the Food and Drug Administration, including a dr
ug product marketed by any cross-licensed producers or distributers 40
`(B) EXCEPTION- Subparagraph (A)(i)(II) shall not apply if the F
ood and Drug Administration changes by regulation the requirement that, for purp
oses of the publication described in subparagraph (A)(i)(I), in order for drug p
roducts to be rated as therapeutically equivalent, they must be pharmaceutically
equivalent and bioequivalent, as defined in subparagraph (C).
`(C) DEFINITIONS- For purposes of this paragraph--
<
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`(i) drug products are pharmaceuutically 41
`(ii) drugs are bioequivalent if they do not present a known
or potential bioequivalence problem, or, if they do present such a problem, the
y are shown to meet an appropriate standard of bioequivalence; and
`(iii) a drug product is considered to be sold or marketed i
n a State if it appears in a published national listing of average wholesale pri
ces selected by the Secretary, provided that the listed product is generally ava
ilable to the public through retail pharmacies in that State.
`(8) STATE AGENCY- The term `State agency' means the agency designat
ed under section 1902(a)(5) to administer or supervise the administration of the
State plan for medical assistance.'.
(b) FUNDING-
(1) DRUG USE REVIEW PROGRAMS- Section 1903(a)(3) (42 U.S.C. 1936b(a)
(3)) is amended--
(A) by striking `plus' at the end of subparagraph (C) and insert
ing `and', and
(B) by adding at the end the following new subparagraph:
`(D) 75 percent of so much of the sums expended by the State pla
n during a quarter in 1991, 1992, or 1993, as the Secretary determines is attrib
utable to the statewide adoption of a drug use review program which conforms to
the requirements of section 1927(g); plus'.
(2) TEMPORARY INCREASE IN FEDERAL MATCH FOR ADMINISTRATIVE COSTS- Th
e per centum to be applied under section 1903(a)(7) of the Social Security Act f
or amounts expended during calendar quarters in fiscal year 1991 which are attri
butable to administrative activities necessary to carry out section 1927 (other
than subsection (g)) of such Act shall be 75 percent, rather than 50 percent; af
ter fiscal year 1991, the match shall revert back to 50 percent.
(c) DEMONSTRATION PROJECTS-
(1) PROSPECTIVE DRUG UTILIZATION REVIEW-
(A) The Secretary of Health and Human Services shall provide, th
rough competitive procurement by not later than January 1, 1992, for the establi
shment of at least 10 statewide demonstration projects to evaluate the efficienc
y and cost-effectiveness of prospective drug utilization review (as a component
of on-line, real-time electronic point-of-sales claims management) in fulfilling
patient counseling and in reducing costs for prescription drugs.
(B) Each of such projects shall establish a central electronic r
epository for capturing, storing, and updating prospective drug utilization revi
ew data and for providing access to such data by participating pharmacists (and
other authorized participants).
(C) Under each project, the pharmacist or other authorized parti
cipant shall assess the active drug regimens of recipients in terms of duplicate
drug therapy, therapeutic overlap, allergy and cross-sensitivity reactions, dru
g interactions, age precautions, drug regiment compliance, prescribing limits, a
nd other appropriate elements.
(D) Not later than January 1, 1994, the Secretary shall submit t
o Congress a report on the demonstration projects conducted under this paragraph
.
(2) DEMONSTRATION PROJECT ON COST-EFFECTIVENESS OF REIMBURSEMENT FOR
PHARMACISTS' COGNITIVE SERVICES-
(A) The Secretary of Health and Human Services shall conduct a d
emonstration project to evaluate the impact on quality of care and cost-effectiv
eness of paying pharmacists under title XIX of the Social Security Act, whether
or not a drug is dispensed, for drug use review services. For this purpose, the
Secretary shall provide for no fewer than 5 demonstration sites in different Sta
tes and the participation of a significant number of pharmacists.
(B) Not later than January 1, 1995, the Secretary shall submit a
report to the Congress on the results of the demonstration project conducted un
der subparagraph (A).
(d) STUDIES-
(1) STUDY OF DRUG PURCHASING AND BILLING ACTIVITIES OF VARIOUS HEALT
H CARE SYSTEMS-
<
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(A) The Comptroller General shall conduct a study of the drug pu
rchasing and billing practices of hospitals, other institutional facilities, and
managed care plans which provide covered outpatient drugs in the medicaid progr
am. The study shall compare the ingredient costs of drugs for medicaid prescript
ions to these facilities and plans and the charges billed to medical assistance
programs by these facilities and plans compared to retail pharmacies.
(B) The study conducted under this subsection shall include an a
ssessment of--
(i) the prices paid by these institutions for covered outpat
ient drugs compared to prices that would be paid under this section,
(ii) the quality of outpatient drug use review provided by t
hese institutions as compared to drug use review required under this section, an
d
(iii) the efficiency of mechanisms used by these institution
s for billing and receiving payment for covered outpatient drugs dispensed under
this title.
(C) By not later than May 1, 1991, the Comptroller General shall
report to the Secretary of Health and Human Services (hereafter in this section
referred to as the `Secretary'), the Committee on Finance of the Senate, the Co
mmittee on Energy and Commerce of the House of Representatives, and the Committe
es on Aging of the Senate and the House of Representatives on the study conducte
d under subparagraph (A).
(2) REPORT ON DRUG PRICING- By not later than May 1 of each year, th
e Comptroller General shall submit to the Secretary, the Committee on Finance of
the Senate, the Committee on Energy and Commerce of the House of Representative
s, and the Committees on Aging of the Senate and House of Representatives an ann
ual report on changes in prices charged by manufacturers for prescription drugs
to the Department of Veterans Affairs, other Federal programs, retail and hospit
al pharmacies, and other purchasing groups and managed care plans.
(3) STUDY ON PRIOR APPROVAL PROCEDURES-
(A) The Secretary, acting in consultation with the Comptroller G
eneral, shall study prior approval procedures utilized by State medical assistan
ce programs conducted under title XIX of the Social Security Act, including--
(i) the appeals provisions under such programs; and
(ii) the effects of such procedures on beneficiary and provi
der access to medications covered under such programs.
(B) By not later than December 31, 1991, the Secretary and the C
omptroller General shall report to the Committee on Finance of the Senate, the C
ommittee on Energy and Commerce of the House of Representatives, and the Committ
ees on Aging of the Senate and the House of Representatives on the results of th
e study conducted under subparagraph (A) and shall make recommendations with res
pect to which procedures are appropriate or inappropriate to be utilized by Stat
e plans for medical assistance.
(4) STUDY ON REIMBURSEMENT RATES TO PHARMACISTS-
(A) The Secretary shall conduct a study on (i) the adequacy of c
urrent reimbursement rates to pharmacists under each State medical assistance pr
ograms conducted under title XIX of the Social Security Act; and (ii) the extent
to which reimbursement rates under such programs have an effect on beneficiary
access to medications covered and pharmacy services under such programs.
(B) By not later than December 31, 1991, the Secretary shall rep
ort to the Committee on Finance of the Senate, the Committee on Energy and Comme
rce of the House of Representatives, and the Committees on Aging of the Senate a
nd the House of Representatives on the results of the study conducted under subp
aragraph (A).
(5) STUDY OF PAYMENTS FOR VACCINES- The Secretary of Health and Huma
n Services shall undertake a study of the relationship between State medical ass
istance plans and Federal and State acquisition and reimbursement policies for v
accines and the accessibility of vaccinations and immunization to children provi
ded under this title. The Secretary shall report to the Congress on the Study no
t later than one year after the date of the enactment of this Act.
(6) STUDY ON APPLICATION OF DISCOUNTING OF DRUGS UNDER MEDICARE- The
Comptroller General shall conduct a study examining methods to encourage provid
ers of items and services under title XVIII of the Social Security Act to negoti
ate discounts with suppliers of prescription drugs to such providers. The Comptr
oller General shall submit to Congress a report on such study no later than 1 ye
ar after the date of enactment of this subsection.
(a) IN GENERAL- Title XIX (42 U.S.C. 1396 et seq.) is amended--
(1) in section 1902(a)(25) (42 U.S.C. 1396a(a)(25))--
<
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(A) by striking `and' at the end of subparagraph (E),
(B) by adding `and' at the end of subparagraph (F), and
(C) by adding at the end the following new subparagraph:
`(G) that the State plan shall meet the requirements of section
1906 (relating to enrollment of individuals under group health plans in certain
cases);'; and
(2) by inserting after section 1905 the following new section:
<
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`ENROLLMENT OF INDIVIDUALS UNDER GROUP HEALTH PLANS
`SEC. 1906. (a) For purposes of section 1902(a)(25)(G) and subject to su
bsection (d), each State plan--
`(1) shall implement guidelines established by the Secretary, consis
tent with subsection (b), to identify those cases in which enrollment of an indi
vidual otherwise entitled to medical assistance under this title in a group heal
th plan (in which the individual is otherwise eligible to be enrolled) is cost-e
ffective (as defined in subsection (e)(2));
`(2) shall require, in case of an individual so identified and as a
condition of the individual being or remaining eligible for medical assistance u
nder this title and subject to subsection (b)(2), notwithstanding any other prov
ision of this title, that the individual (or in the case of a child, the child's
parent) apply for enrollment in the group health plan; and
`(3) in the case of such enrollment (except as provided in subsectio
n (c)(1)(B)), shall provide for payment of all enrollee premiums for such enroll
ment and all deductibles, coinsurance, and other cost-sharing obligations for it
ems and services otherwise covered under the State plan under this title (exceed
ing the amount otherwise permitted under section 1916), and shall treat coverage
under the group health plan as a third party liability (under section 1902(a)(2
5)).
`(b)(1) In establishing guidelines under subsection (a)(1), the Secretar
y shall take into account that an individual may only be eligible to enroll in g
roup health plans at limited times and only if other individuals (not entitled t
o medical assistance under the plan) are also enrolled in the plan simultaneousl
y.
`(2) If a parent of a child fails to enroll the child in a group health
plan in accordance with subsection (a)(2), such failure shall not affect the chi
ld's eligibility for benefits under this title.
`(c)(1)(A) In the case of payments of premiums, deductibles, coinsurance
, and other cost-sharing obligations under this section shall be considered, for
purposes of section 1903(a), to be payments for medical assistance.
`(B) If all members of a family are not eligible for medical assistance
under this title and enrollment of the members so eligible in a group health pla
n is not possible without also enrolling members not so eligible--
`(i) payment of premiums for enrollment of such other members shall
be treated as payments for medical assistance for eligible individuals, if it wo
uld be cost-effective (taking into account payment of all such premiums), but
`(ii) payment of deductibles, coinsurance, and other cost-sharing ob
ligations for such other members shall not be treated as payments for medical as
sistance for eligible individuals.
`(2) The fact that an individual is enrolled in a group health plan unde
r this section shall not change the individual's eligibility for benefits under
the State plan, except insofar as section 1902(a)(25) provides that payment for
such benefits shall first be made by such plan.
`(d)(1) In the case of any State which is providing medical assistance t
o its residents under a waiver granted under section 1115, the Secretary shall r
equire the State to meet the requirements of this section in the same manner as
the State would be required to meet such requirement if the State had in effect
a plan approved under this title.
`(2) This section, and section 1902(a)(25)(G), shall only apply to a Sta
te that is one of the 50 States or the District of Columbia.
`(e) In this section:
`(1) The term `group health plan' has the meaning given such term in
section 5000(b)(1) of the Internal Revenue Code of 1986, and includes the provi
sion of continuation coverage by such a plan pursuant to title XXII of the Publi
c Health Service Act, section 4980B of the Internal Revenue Code of 1986, or tit
le VI of the Employee Retirement Income Security Act of 1974.
`(2) The term `cost-effective' means, as established by the Secretar
y, that the reduction in expenditures under this title with respect to an indivi
dual who is enrolled in a group health plan is likely to be greater than the add
itional expenditures for premiums and cost-sharing required under this section w
ith respect to such enrollment.'.
(b) TREATMENT OF ERRONEOUS EXCESS PAYMENTS FOR MEDICAL ASSISTANCE- Secti
on 1903(u)(1)(C)(iv) (42 U.S.C. 1396b(u)(1)(C)(iv)) is amended by inserting befo
re the period at the end the following: `or with respect to payments made in vio
lation of section 1906'.
(c) OPTIONAL MINIMUM 6-MONTH ELIGIBILITY- Section 1902(e) (42 U.S.C. 139
6a(e)) is amended by adding at the end the following new paragraph:
`(11)(A) In the case of an individual who is enrolled with a group healt
h plan under section 1906 and who would (but for this paragraph) lose eligibilit
y for benefits under this title before the end of the minimum enrollment period
(defined in subparagraph (B)), the State plan may provide, notwithstanding any o
ther provision of this title, that the individual shall be deemed to continue to
be eligible for such benefits until the end of such minimum period, but only wi
th respect to such benefits provided to the individual as an enrollee of such pl
an.
`(B) For purposes of subparagraph (A), the term `minimum enrollment peri
od' means, with respect to an individual's enrollment with a group health plan,
a period established by the State, of not more than 6 months beginning on the da
te the individual's enrollment under the plan becomes effective.'.
(d) CONFORMING AMENDMENTS-
(1) Section 1902(a)(10) (42 U.S.C. 1396a(a)(10)) is amended in the m
atter following subparagraph (E)--
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(A) by striking `and' at the end of subdivision (IX);
(B) by inserting `and' at the end of subdivision (X); and
(C) by adding at the end the following new subdivision: `(XI) th
e making available of medical assistance to cover the costs of premiums, deducti
bles, coinsurance, and other cost-sharing obligations for certain individuals fo
r private health coverage as described in section 1906 shall not, by reason of p
aragraph (10), require the making available of any such benefits or the making a
vailable of services of the same amount, duration, and scope of such private cov
erage to any other individuals;'.
(2) Section 1905(a) (42 U.S.C. 1396d(a)) is amended by adding at the
end the following: `The payment described in the first sentence may include exp
enditures for medicare cost-sharing and for premiums under part B of title XVIII
for individuals who are eligible for medical assistance under the plan and (A)
are receiving aid or assistance under any plan of the State approved under title
I, X, XIV, or XVI, or part A of title IV, or with respect to whom supplemental
security income benefits are being paid under title XVI, or (B) with respect to
whom there is being paid a State supplementary payment and are eligible for medi
cal assistance equal in amount, duration, and scope to the medical assistance ma
de available to individuals described in section 1902(a)(10)(A), and, except in
the case of individuals 65 years of age or older and disabled individuals entitl
ed to health insurance benefits under title XVIII who are not enrolled under par
t B of title XVIII, other insurance premiums for medical or any other type of re
medial care or the cost thereof.'.
(3) Section 1903(a)(1) (42 U.S.C. 1396b(a)(1)) is amended by strikin
g `(including expenditures for' and all that follows through `or the cost thereo
f)'.
(e) EFFECTIVE DATE- (1) The amendments made by this section apply (excep
t as provided under paragraph (2)) to payments under title XIX of the Social Sec
urity Act for calendar quarters beginning on or after January 1, 1991, without r
egard to whether or not final regulations to carry out such amendments have been
promulgated by such date.
(2) In the case of a State plan for medical assistance under title XIX o
f the Social Security Act which the Secretary of Health and Human Services deter
mines requires State legislation (other than legislation authorizing or appropri
ating funds) in order for the plan to meet the additional requirements imposed b
y the amendments made by subsection (a), the State plan shall not be regarded as
failing to comply with the requirements of such title solely on the basis of it
s failure to meet this additional requirement before the first day of the first
calendar quarter beginning after the close of the first regular session of the S
tate legislature that begins after the date of the enactment of this Act. For pu
rposes of the previous sentence, in the case of a State that has a 2-year legisl
ative session, each year of such session shall be deemed to be a separate regula
r session of the State legislature.
PART 2--PROTECTION OF LOW-INCOME MEDICARE BENEFICIARIES
(a) 1-YEAR ACCELERATION OF BUY-IN OF PREMIUMS AND COST SHARING FOR QUALI
FIED MEDICARE BENEFICIARIES UP TO 100 PERCENT OF POVERTY LINE- Section 1905(p)(2
) (42 U.S.C. 1396d(p)(2)) is further amended--
(1) in subparagraph (B)--
(A) by adding `and' at the end of clause (ii);
(B) in clause (iii), by striking `95 percent, and' and inserting
`100 percent.'; and
(C) by striking clause (iv); and
(2) in subparagraph (C)--
(A) in clause (iii), by striking `90' and inserting `95';
(B) by adding `and' at the end of clause (iii);
(C) in clause (iv), by striking `95 percent, and' and inserting
`100 percent.'; and
(D) by striking clause (v).
(b) ENTITLEMENT- Section 1902(a)(10)(E) (42 U.S.C. 1395b(a)(10)(E)(ii))
is amended--
(1) by striking `, and' at the end of clause (i) and inserting a sem
icolon;
(2) by adding `and' at the end of clause (ii); and
(3) by adding at the end the following new clause:
`(iii) for making medical assistance available for medicare cost
sharing described in section 1905(p)(3)(A)(ii) subject to section 1905(p)(4), f
or individuals who would be qualified medicare beneficiaries described in sectio
n 1905(p)(1) but for the fact that their income exceeds the income level establi
shed by the State under section 1905(p)(2) but is less than 110 percent in 1993
and 1994, and 120 percent in 1995 and years thereafter of the official poverty l
ine (referred to in such section) for a family of the size involved;'.
(c) APPLICATION IN CERTAIN STATES AND TERRITORIES- Section 1905(p)(4) (4
2 U.S.C. 1396d(p)(4)) is amended--
(1) in subparagraph (B), by inserting `or 1902(a)(10)(E)(iii)' after
`subparagraph (B)', and
(2) by adding at the end the following:
`In the case of any State which is providing medical assistance to its re
sidents under a waiver granted under section 1115, the Secretary shall require t
he State to meet the requirement of section 1902(a)(10)(E) in the same manner as
the State would be required to meet such requirement if the State had in effect
a plan approved under this title.'
(d) CONFORMING AMENDMENT- Section 1843(h) (42 U.S.C. 1395v(h)) is amende
d by adding at the end the following new paragraph:
`(3) In this subsection, the term `qualified medicare beneficiary' also
includes an individual described in section 1902(a)(10)(E)(iii).'.
(e) DELAY IN COUNTING SOCIAL SECURITY COLA INCREASES UNTIL NEW POVERTY G
UIDELINES PUBLISHED-
(1) IN GENERAL- Section 1905(p) is amended--
(A) in paragraph (1)(B), by inserting `, except as provided in p
aragraph (2)(D)' after `supplementary social security income program', and
<
/ul> (B) by adding at the end of paragraph (2) the following new subp
aragraph:
`(D)(i) In determining under this subsection the income of an individual
who is entitled to monthly insurance benefits under title II for a transition m
onth (as defined in clause (ii)) in a year, such income shall not include any am
ounts attributable to an increase in the level of monthly insurance benefits pay
able under such title which have occurred pursuant to section 215(i) for benefit
s payable for months beginning with December of the previous year.
`(ii) For purposes of clause (i), the term `transition month' means each
month in a year through the month following the month in which the annual revis
ion of the official poverty line, referred to in subparagraph (A), is published.
'.
(2) CONFORMING AMENDMENTS- Section 1902(m) (42 U.S.C. 1396a(m)) is a
mended--
(A) in paragraph (1)(B), by inserting `, except as provided in p
aragraph (2)(C)' after `supplemental security income program', and
(B) by adding at the end of paragraph (2) the following new subp
aragraph:
`(C) The provisions of section 1905(p)(2)(D) shall apply to determinatio
ns of income under this subsection in the same manner as they apply to determina
tions of income under section 1905(p).'.
(f) EFFECTIVE DATE- The amendments made by this section shall apply to c
alendar quarters beginning on or after January 1, 1991, without regard to whethe
r or not regulations to implement such amendments are promulgated by such date;
except that the amendments made by subsection (e) shall apply to determinations
of income for months beginning with January 1991.
PART 3--IMPROVEMENTS IN CHILD HEALTH
SEC. 4601. MEDICAID CHILD HEALTH PROVISIONS.
(a) PHASED-IN MANDATORY COVERAGE OF CHILDREN UP TO 100 Percent of Povert
y Level-
(1) IN GENERAL- Section 1902 (42 U.S.C. 1396a) is amended--
(A) in subsection (a)(10)(A)(i)--
<
/ul> (i) by striking `or' at the end of subclause (V),
(ii) by striking the semicolon at the end of subclause (VI)
and inserting `, or', and
(iii) by adding at the end the following new subclause:
<
/ul> `(VII) who are described in subparagraph (D) of subsecti
on (l)(1) and whose family income does not exceed the income level the State is
required to establish under subsection (l)(2)(C) for such a family;';
(B) in subsection (a)(10)(A)(ii)(IX), by striking `or clause (i)
(VI)' and inserting `, clause (i)(VI), or clause (i)(VII)';
(C) in subsection (l)--
(i) in subparagraph (C) of paragraph (1) by inserting `child
ren' after `(C)';
(ii) by striking subparagraph (D) of paragraph (1) and inser
ting the following:
`(D) children born after September 30, 1983, who have attained 6 yea
rs of age but have not attained 19 years of age,';
(iii) by striking subparagraph (C) of paragraph (2) and inse
rting the following:
`(C) For purposes of paragraph (1) with respect to individuals described
in subparagraph (D) of that paragraph, the State shall establish an income leve
l which is equal to 100 percent of the income official poverty line described in
subparagraph (A) applicable to a family of the size involved.';
(iv) in paragraph (3) by inserting `, (a)(10)(A)(i)(VII),' a
fter `(a)(10)(A)(i)(VI)';
(v) in paragraph (4)(A), by inserting `or subsection (a)(10)
(A)(i)(VII)' after `(a)(10)(A)(i)(VI)'; and
(vi) in paragraph (4)(B), by striking `or (a)(10)(A)(i)(VI)'
`, and inserting `(a)(10)(A)(i)(VI), or (a)(10)(A)(i)(VII)'; and
(D) in subsection (r)(2)(A), by inserting `(a)(10)(A)(i)(VII),'
after `(a)(10)(A)(i)(VI),'.
(2) CONFORMING AMENDMENT TO QUALIFIED CHILDREN- Section 1905(n)(2) (
42 U.S.C. 1396d(n)(2)) is amended by striking `age of 7 (or any age designated b
y the State that exceeds 7 but does not exceed 8)' and inserting `age of 19'.
(3) ADDITIONAL CONFORMING AMENDMENTS-
(A) Section 1903(f)(4) of such Act (42 U.S.C. 1396b(f)(4)) is am
ended--
(i) by striking `1902(a)(10)(A)(i)(IV),' and inserting `1902
(a)(10)(A)(i)(III), 1902(a)(10)(A)(i)(IV), 1902(a)(10)(A)(i)(V),', and
(ii) by inserting `1902(a)(10)(A)(i)(VII),' after `1902(a)(1
0)(A)(i)(VI),'.
(B) Subsections (a)(3)(C) and (b)(3)(C)(i) of section 1925 of su
ch Act (42 U.S.C. 1396r-6), as amended by section 6411(i)(3) of the Omnibus Budg
et Reconciliation Act of 1989, are each amended by inserting `(i)(VII),' after `
(i)(VI)'.
(b) EFFECTIVE DATE- (1) The amendments made by this subsection apply (ex
cept as otherwise provided in this subsection) to payments under title XIX of th
e Social Security Act for calendar quarters beginning on or after July 1, 1991,
without regard to whether or not final regulations to carry out such amendments
have been promulgated by such date.
(2) In the case of a State plan for medical assistance under title XIX o
f the Social Security Act which the Secretary of Health and Human Services deter
mines requires State legislation (other than legislation authorizing or appropri
ating funds) in order for the plan to meet the additional requirements imposed b
y the amendments made by this subsection, the State plan shall not be regarded a
s failing to comply with the requirements of such title solely on the basis of i
ts failure to meet these additional requirements before the first day of the fir
st calendar quarter beginning after the close of the first regular session of th
e State legislature that begins after the date of the enactment of this Act. For
purposes of the previous sentence, in the case of a State that has a 2-year leg
islative session, each year of such session shall be deemed to be a separate reg
ular session of the State legislature.
(a) IN GENERAL- Section 1902(a) of the Social Security Act (42 U.S.C. 13
96a(a)), as amended by section 4401(a)(2) of this title, is amended--
(1) by striking `and' at the end of paragraph (53),
(2) by striking the period at the end of paragraph (54) and insertin
g `; and', and
(3) by inserting after paragraph (54) the following new paragraph:
`(55) provide for receipt and initial processing of applications of
individuals for medical assistance under subsection (a)(10)(A)(i)(IV), (a)(10)(A
)(i)(VI), (a)(10)(A)(i)(VII), or (a)(10)(A)(ii)(IX)--
`(A) at locations which are other than those used for the receip
t and processing of applications for aid under part A of title IV and which incl
ude facilities defined as disproportionate share hospitals under section 1923(a)
(1)(A) and Federally-qualified health centers described in section 1905(1)(2)(B)
, and
`(B) using applications which are other than those used for appl
ications for aid under such part.'.
(b) EFFECTIVE DATE- The amendments made by subsection (a) apply to payme
nts under title XIX of the Social Security Act for calenar 42
(a) IN GENERAL- Section 1902(e) (42 U.S.C. 1396a(e)) is amended--
(1) in the first sentence of paragraph (4), by inserting `(or would
remain if pregnant)' after `remains'; and
(2) in paragraph (6)--
(A) by striking `At the option of a State, in' and inserting `In
';
(B) by striking `the State plan may nonetheless treat the woman
as being' and inserting `the woman shall be deemed to continue to be'; and
<
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