Text: H.R.5835 — 101st Congress (1989-1990)All Information (Except Text)

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--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
To provide for reconciliation pursuant to section 4 of the concurrent
 resolution on the
budget for fiscal year 1991.
 Be it enacted by the Senate and House of Representatives of the Unit
ed States of America in Congress assembled,
SECTION 1. SHORT TITLE.
 This Act may be cited as the `Omnibus Budget Reconciliation Act of 1990'
.
SEC. 2. TABLE OF TITLES.
Title I. Agriculture and related programs.
Title II. Banking, housing, and related programs.
Title III. Student loans and labor provisions.
Title IV. Medicare, medicaid, and other health-related programs.

Title V. Income security, human resources, and related programs.

Title VI. Energy and environmental programs.
Title VII. Civil service and postal service programs.
Title VIII. Veterans' programs.
Title IX. Transportation.
Title X. Miscellaneous user fees and other provisions.
Title XI. Revenue provisions.
Title XII. Pensions.
Title XIII. Budget enforcement.
TITLE I--AGRICULTURE AND RELATED PROGRAMS
SEC. 1001. SHORT TITLE; TABLE OF CONTENTS.
 (a) SHORT TITLE- This title may be cited as the `Agricultural Reconcilia
tion Act of 1990'.
 (b) TABLE OF CONTENTS- The table of contents of this title is as follows
:
Sec. 1001. Short title; table of contents.
Subtitle A--Commodity Programs
Sec. 1101. Triple base for deficiency payments.
Sec. 1102. Calculation of deficiency payments based on 12-month avera
ge.
Sec. 1103. Acreage reduction program for 1991 crop.
Sec. 1104. Acreage reduction programs for 1992 through 1995 crops.
Sec. 1105. Loan origination fees and other savings.
Subtitle B--Other Agricultural Programs
Sec. 1201. Authorization levels for rural electric and telephone loan
s.
Sec. 1202. Authorization levels for FmHA loans.
Sec. 1203. APHIS inspection user fee on international passengers.
Sec. 1204. Additional savings and other provisions.
Subtitle C--Effective Date
Sec. 1301. Effective date.
Sec. 1302. Readjustment of support levels.
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.
Subtitle A--Commodity Programs
SEC. 1101. TRIPLE BASE FOR DEFICIENCY PAYMENTS.
 (a) WHEAT- Section 107B(c)(1)(C)(ii) of the Agricultural Act of 1949 (as
 added by section 301 of the Food, Agriculture, Conservation, and Trade Act of 1
990) is amended by striking `100 percent' and inserting `85 percent'.
 (b) FEED GRAINS- Section 105B(c)(1)(C)(ii) of the Agricultural Act of 19
49 (as added by section 401 of the Food, Agriculture, Conservation, and Trade Ac
t of 1990) is amended by striking `100 percent' and inserting `85 percent'.
 (c) UPLAND COTTON- Section 103B(c)(1)(C)(ii) of the Agricultural Act of 
1949 (as added by section 501 of the Food, Agriculture, Conservation, and Trade 
Act of 1990) is amended by striking `100 percent' and inserting `85 percent'.
 (d) RICE- Section 101B(c)(1)(C)(ii) of the Agricultural Act of 1949 (as 
added by section 601 of the Food, Agriculture, Conservation, and Trade Act of 19
90) is amended by striking `100 percent' and inserting `85 percent'.
SEC. 1102. CALCULATION OF DEFICIENCY PAYMENTS BASED ON 12-MONTH AVERAGE.
 (a) WHEAT- Clause (ii) of section 107B(c)(1)(B) of the Agricultural Act 
of 1949 (as added by section 301 of the Food, Agriculture, Conservation, and Tra
de 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 wheat shall be the amount by which the es
tablished price for the crop of wheat exceeds the higher of--
 `(I) the lesser of--
 `(aa) the national weighted average market price received by produce
rs during the marketing year for the crop, as determined by the Secretary; or
 `(bb) the national weighted average market price received by produce
rs during the first 5 months of the marketing year for the crop, as determined b
y the Secretary, plus 10 cents per bushel; or
 `(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--
 `(aa) the national weighted average market price received by produce
rs during the marketing year for the crop, as determined by the Secretary; or
 `(bb) the national weighted average market price received by produce
rs during the first 5 months of the marketing year for the crop, as determined b
y the Secretary, plus 7 cents per bushel; or
 `(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--
 `(aa) the national average market price received by producers during
 the calendar year that contains the first 5 months of the marketing year for th
e crop, as determined by the Secretary; or
 `(bb) the national average market price received by producers during
 the first 5 months of the marketing year for the crop, as determined by the Sec
retary, plus an appropriate amount that is fair and equitable in relation to whe
at and feed grains (as determined by the Secretary); or
 `(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.'.
SEC. 1104. ACREAGE REDUCTION PROGRAMS FOR 1992 THROUGH 1995 CROPS.
 (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)--<
/ul>
 (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
SEC. 1201. AUTHORIZATION LEVELS FOR RURAL ELECTRIC AND TELEPHONE LOANS.
 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:
`SEC. 314. AUTHORIZATION LEVELS FOR RURAL ELECTRIC AND TELEPHONE LOANS.
 `(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

 `(V) $907,000,000, for fiscal year 1995; and<
/ul>
 `(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<
/ul>
 (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'.
SEC. 1203. APHIS INSPECTION USER FEE ON INTERNATIONAL PASSENGERS.
 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
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.
Subtitle B--FHA Mortgage Insurance
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.
Subtitle C--Auction of Federally Insured Mortgages
Sec. 2201. Auction of multifamily 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'.
SEC. 2002. FDIC AUTHORIZED TO INCREASE ASSESSMENT RATES AS NECESSARY TO PROTE
CT INSURANCE FUNDS.
 (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'.
SEC. 2003. FDIC AUTHORIZED TO MAKE MID-YEAR ADJUSTMENTS IN ASSESSMENT RATES.
 (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.
 `(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.<
/ul>
 `(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.'.
SEC. 2004. FDIC AUTHORIZED TO SET DESIGNATED RESERVE RATIO AS NECESSARY IN FA
CE OF SIGNIFICANT RISK OF SUBSTANTIAL LOSSES TO INSURANCE FUND.
 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<
/ul>
 (3) in clause (iv)--
 (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).

SEC. 2005. FDIC AUTHORIZED TO BORROW FROM FEDERAL FINANCING BANK.
 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.'.
SEC. 2105. ACTUARIAL SOUNDNESS OF MUTUAL MORTGAGE INSURANCE 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
 and
 1 So in original. Probably should be `violation';'.
 (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
 2 So in original, The `, and' probably should be a period.
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
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.
Part 2--Provisions Relating to Part B
Subpart A--Payment for Physicians' Services
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.
Subpart B--Other Items and Services
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.
Part 3--Provisions Relating to Parts A and 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.
Part 4--Provisions Relating to Part B Premium and Deductible
Sec. 4301. Part B premium.
Sec. 4302. Part B deductible.
Part 5--Medicare Supplemental Insurance Policies
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.
PART 1--PROVISIONS RELATING TO PART A
SEC. 4001. PAYMENTS FOR CAPITAL-RELATED COSTS OF INPATIENT HOSPITAL SERVICES.
 (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 .
--Section 1886(e)(2) (42 U.S.C. 1395ww(e)(2)) is amended--
 3 So in original. Probably should be `RESPONSIBILITIES'.
 (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)--
 (i) by striking `(4)' and inserting `(4)(A)', and<
/ul>
 (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
`(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)'.
 `(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.
SEC. 4008. MISCELLANEOUS AND TECHNICAL PROVISIONS RELATING TO PART A.
 (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--
 `(a) has operated under a waiver under subsection (b)(4)(C)(ii)(II);

 `(b) has been subject to an extended (or partial extended) survey un
der subsection (g)(2)(B)(i) or section 1919(g)(2)(B)(i); or
 `(c) has been assessed a civil money penalty described in subsection
 (h)(2)(B)(ii) or section 1919(h)(2)(A)(ii) of not less than $5,000, or has been
 subject to a remedy described in clauses (i) or (iii) of subsection (h)(2)(B), 
subsection (h)(4), section 1919(h)(1)(B)(i), or in clauses (i), (iii), or (iv) o
f section 1919(h)(2)(A), or'.
 (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
 5 So in original. The `'.' should probably be deleted.
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.
 `(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).<
/ul>
 `(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.
SEC. 4106. NEW PHYSICIANS AND OTHER NEW HEALTH CARE PRACTITIONERS.
 (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.'.
SEC. 4113. STUDY OF AGGREGATION RULE FOR CLAIMS FOR SIMILAR PHYSICIANS' SERVI
CES.
 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.
SEC. 4114. UTILIZATION SCREENS FOR PHYSICIAN VISITS IN REHABILITATION HOSPITA
LS.
 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.

SEC. 4115. STUDY OF REGIONAL VARIATIONS IN IMPACT OF MEDICARE PHYSICIAN PAYME
NT REFORM.
 (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'.'.
SEC. 4117. STATEWIDE FEE SCHEDULE AREAS FOR PHYSICIANS' SERVICES.
 (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
 6 So in original. Probably should be `;'.
 (3) in clause (i), by inserting `(divided by 100)' after `percentage
 increase', 7
 7 So in original. Probably should be `;'.
 (4) in clauses (ii) and (iv), by inserting `(divided by 100)' after 
`decrease', 8
 8 So in original. Probably should be `;'.
 (5) in clause (iii), by inserting `(divided by 100)' after `percenta
ge growth', 9
 and
 9 So in original. Probably should be `;'.
 (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>
 10 So in original. Probably should be `;'.
 (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';
 (M) in paragraphs (1)(D)(i) and (2)(A)(i) of subsection (f), by 
striking `calendar years' and inserting `portions of calendar years';<
/ul>
 (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
' and inserting `all physicians' services or for the category of physicians' 
services, respectively,',
 11 So in original. Probably should be `(A))'.
 (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)--
 (i) by striking `and' at the end of subparagraph (H),<
/ul>
 (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
 comparable services and under comparable circumstances, to the policyholders
 and subscribers of the carrier,
 12 So in original. `a' probably should be omitted.
 `(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)--
 (i) by striking `or' at the end of subclause (I);<
/ul>
 (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
 (II) by striking `25' and inserting `33', and<
/ul>
 (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)--
 (i) by striking `regional monthly payment rate' each place i
t appears and inserting `national limited monthly payment rate',<
/ul>
 (ii) in clause (ii)--
 (I) by striking `75' and inserting `67'; and
 (II) by striking `25' and inserting `33', and<
/ul>
 (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
 reduction of 1 percentage point; and
 13 So in original. Probably should be `a reduction'.
 `(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<
/ul>
 `(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
 Act of 1989.
 14 So in original. Probably should be `Reconciliation'.
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.'.<
/ul>
 (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
 (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. 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'.<
/ul>
 (e) EFFECTIVE DATE- The amendments made by this section shall apply to s
ervices furnished on or after January 1, 1991.
SEC. 4156. COVERAGE OF INJECTABLE DRUGS FOR TREATMENT OF OSTEOPOROSIS.
 (a) IN GENERAL- Section 1861 (42 U.S.C. 1395x) is amended--
 (1) in subsection (s)(2)--
 (A) by striking `and' at the end of subparagraph (M),<
/ul>
 (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:

`Covered Osteoporosis Drug
 `(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.
SEC. 4157. SEPARATE PAYMENT UNDER PART B FOR SERVICES OF CERTAIN HEALTH PRACT
ITIONERS.
 (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.
SEC. 4158. REDUCTION IN PAYMENTS UNDER PART B DURING FINAL 2 MONTHS OF 1990.
 (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).<
/ul>
 `(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.'.<
/ul>
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--
 (A) by striking `and' at the end of subparagraph (C),<
/ul>
 (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.
SEC. 4162. PARTIAL HOSPITALIZATION IN COMMUNITY MENTAL HEALTH CENTERS.
 (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--
 (A) by striking `and' at the end of subparagraph (H);<
/ul>
 (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
 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))'.
 `(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:

`Screening Mammography
 `(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)'.<
/ul>
 (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.
SEC. 4164. MISCELLANEOUS AND TECHNICAL PROVISIONS RELATING TO PART B.
 (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
;
 17 So in original. Probably should be `program.';'.
 (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--
 (A) by striking `and' at the end of subparagraph (N);<
/ul>
 (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
 and
 18 So in original. Probably should be `(B)', '.
 (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.
SEC. 4202. STAFF-ASSISTED HOME DIALYSIS DEMONSTRATION PROJECT.
 (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<
/ul>
 (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'.<
/ul>
 (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
 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'.
 `(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)--
 (i) by striking `physicians' services' each place it appears
 and inserting `physicians' services or renal dialysis services', and<
/ul>
 (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
 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'.
 (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
 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'.
 (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
 Act of 1989.
 22 So in original. Probably should be `Reconciliation'.
 (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.
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.
 (a) IN GENERAL- Section 1866(a)(1) (42 U.S.C. 1395cc(a)(1)) is amended--

 (1) in subsection (a)(1)--
 (A) by striking `and' at the end of subparagraph (O),<
/ul>
 (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.
SEC. 4027. MISCELLANEOUS AND TECHNICAL PROVISIONS RELATING TO PARTS A AND B.
 (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
 23 So in original. Probably should be `review.'.'.
 (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
 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'.
 `(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>
 25 So in original. Probably should be `(7);'.
 (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

 26 So in original. Probably should be `;'.
 (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)',
 (B) by adding at the end the following new paragraph:<
/ul>
 `(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
, 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),'.
 `(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
 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'.
 `(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.
SEC. 4356. CLARIFICATION OF TREATMENT OF PLANS OFFERED BY HEALTH MAINTENANCE 
ORGANIZATIONS.
 (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.
SEC. 4357. PRE-EXISTING CONDITION LIMITATIONS AND LIMITATION ON MEDICAL UNDER
WRITING.
 (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.
SEC. 4359. HEALTH INSURANCE ADVISORY SERVICE FOR MEDICARE BENEFICIARIES.
 (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,
 (D) rights and process for appeals of determinations,<
/ul>
 (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,
 (B) how to make informed decisions on whether to purchase such p
olicies and on what criteria to use in evaluating different policies,<
/ul>
 (C) appropriate Federal, State, and private agencies that provid
e information and assistance in obtaining benefits under such policies, and

 (D) other issues deemed appropriate by the Secretary.<
/ul>
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.
SEC. 4360. HEALTH INSURANCE INFORMATION, COUNSELING, AND ASSISTANCE GRANTS.
 (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--
 (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--<
/ul>
 (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

 and information that may assist individuals in filing claims under such medi
care supplemental policies;
 29 So in original. Probably should be `Act)'.
 (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
 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)'.
 (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
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.
Part 2--Protection of Low-Income Medicare Beneficiaries
Sec. 4501. Phased-in extension of medicaid payments for medicare premiums for
 certain individuals with income below 120 percent of the official poverty line.
Part 3--Improvements in Child Health
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.
Part 4--Miscellaneous
subpart a--payments
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.
subpart b--eligibility and coverage
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.
subpart c--health maintenance organizations
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
.
subpart d--demonstration projects and home and community-based waivers
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.
subpart e--miscellaneous
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.
Part 5--Provisions Relating to Nursing Home Reform
Sec. 4801. Technical corrections 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
 for each of the manufacturer's covered outpatient drugs.
 31 So in original. Probably should be `1990,'.
 `(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
 32 So in original. Probably should be `.'.
 `(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
 33 So in original. Probably should be `.'.
 `(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
 34 So in original. Probably should be `(ii))'.
 `(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
 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.'.
 `(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

 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))'.
 `(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
 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)'.
 `(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.<
/ul>
 `(ff) Proper storage.
 `(gg) Prescription refill information.
 `(hh) Action to be taken in the event of a missed dose.<
/ul>
 `(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
 emergency room visits.
 39 So in original. Probably should be `services emergency'.
 `(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.<
/ul>
 `(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

 operating under the new drug application.
 40 So in original. Probably should be `distributors'.
 `(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--
 `(i) drug products are pharmaceuutically  41<
/ul>
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'.
 `(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-
 (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.<
/ul>
 (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.
SEC. 4402. REQUIRING MEDICAID PAYMENT OF PREMIUMS AND COST-SHARING FOR ENROLL
MENT UNDER GROUP HEALTH PLANS WHERE COST-EFFECTIVE.
 (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))--
 (A) by striking `and' at the end of subparagraph (E),<
/ul>
 (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:<
/ul>
`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)--
 (A) by striking `and' at the end of subdivision (IX);<
/ul>
 (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
SEC. 4501. PHASED-IN EXTENSION OF MEDICAID PAYMENTS FOR MEDICARE PREMIUMS FOR
 CERTAIN INDIVIDUALS WITH INCOME BELOW 120 PERCENT OF THE OFFICIAL POVERTY LINE.
 (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)--
 (i) by striking `or' at the end of subclause (V),<
/ul>
 (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:

 `(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;';<
/ul>
 (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.
SEC. 4602. MANDATORY USE OF OUTREACH LOCATIONS OTHER THAN WELFARE OFFICES.
 (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
 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.
 (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<
/ul>
 (C) by adding at the end the following new sentence: `The preced
ing sentence shall not apply in the case of a woman who has been provided ambula
tory prenatal care pursuant to section 1920 during a presumptive eligibility per
iod and is then, in accordance with such section, determined to be ineligible fo
r medical assistance under the State plan.'.
 (b) EFFECTIVE DATE-
 (1) INFANTS- The amendment made by subsection (a)(1) shall apply to 
individuals born on or after January 1, 1991, without regard to whether or not f
inal regulations to carry out such amendment have been promulgated by such date.

 (2) PREGNANT WOMEN- The amendments made by subsection (a)(2) shall a
pply with respect to determinations to terminate the eligibility of women, based
 on change of income, made on or after January 1, 1991, without regard to whethe
r or not final regulations to carry out such amendments have been promulgated by
 such date.
SEC. 4604. ADJUSTMENT IN PAYMENT FOR HOSPITAL SERVICES FURNISHED TO LOW-INCOM
E CHILDREN UNDER THE AGE OF 6 YEARS.
 (a) IN GENERAL- Section 1902 (42 U.S.C. 1396a) is amended by adding at t
he end the following new subsection:
 `(s) In order to meet the requirements of subsection (a)(55), the State 
plan must provide that payments to hospitals under the plan for inpatient hospit
al services furnished to infants who have not attained the age of 1 year, and to
 children who have not attained the age of 6 years and who receive such services
 in a disproportionate share hospital described in section 1923(b)(1), shall--
 `(1) if made on a prospective basis (whether per diem, per case, or 
otherwise) provide for an outlier adjustment in payment amounts for medically ne
cessary inpatient hospital services involving exceptionally high costs or except
ionally long lengths of stay,
 `(2) not be limited by the imposition of day limits with respect to 
the delivery of such services to such individuals, and
 `(3) not be limited by the imposition of dollar limits (other than s
uch limits resulting from prospective payments as adjusted pursuant to paragraph
 (1)) with respect to the delivery of such services to any such individual who h
as not attained their first birthday (or in the case of such an individual who i
s an inpatient on his first birthday until such individual is discharged).'.
 (b) CONFORMING AMENDMENT- Section 1902(a) (42 U.S.C. 1396a(a)), as amend
ed by section 4401(a)(2), is further amended--
 (1) by striking `and' at the end of paragraph (53);
 (2) by striking the period at the end of paragraph (54) and by i
nserting `; and'; and
 (3) by inserting after paragraph (54) and before the end matter 
the following new paragraph:
 `(55) provide, in accordance with subsection (s), for adjusted payme
nts for certain inpatient hospital services.'.
 (c) PROHIBITION ON WAIVER- Section 1915(b) (42 U.S.C. 1396n(b)) is amend
ed in the matter preceding paragraph (1) by inserting `(other than subsection (s
))' after `Section 1902'.
 (d) EFFECTIVE DATE- (1) The amendments made by this subsection shall bec
ome effective with respect to payments under title XIX of the Social Security Ac
t for calendar quarters beginning on or after July 1, 1991, without regard to wh
ether or not final regulations to carry out such amendments have been promulgate
d 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.
SEC. 4605. PRESUMPTIVE ELIGIBILITY.
 (a) EXTENSION OF PRESUMPTIVE ELIGIBILITY PERIOD- Section 1920 (42 U.S.C.
 1396r-1) is amended--
 (1) in subsection (b)(1)(B)--
 (A) by adding `or' at the end of clause (i),
 (B) by striking clause (ii), and
 (C) by amending clause (iii) to read as follows:
 `(ii) in the case of a woman who does not file an applicatio
n by the last day of the month following the month during which the provider mak
es the determination referred to in subparagraph (A), such last day; and'; and
 (2) in subsections (c)(2)(B) and (c)(3), by striking `within 14 cale
ndar days after the date on which' and inserting `by not later than the last day
 of the month following the month during which'.] 43
 43 So in original. Probably should be `which'.'.
 (b) FLEXIBILITY IN APPLICATION- Section 1920(c)(3) (42 U.S.C. 1396r-1(c)
(3)) is amended by inserting before the period at the end the following: `, whic
h application may be the application used for the receipt of medical assistance 
by individuals described in section 1902(l)(1)(A)'.
 (c) EFFECTIVE DATES-
 (1) The amendments made by subsection (a) apply to payments under ti
tle XIX of the Social Security Act for calendar quarters beginning on or after J
uly 1, 1991, without regard to whether or not final regulations to carry out suc
h amendments have been promulgated by such date.
 (2) The amendment made by subsection (b) shall be effective as if in
cluded in the enactment of section 9407(b) of the Omnibus Budget Reconciliation 
Act of 1986.
SEC. 4606. ROLE IN PATERNITY DETERMINATIONS.
 (a) IN GENERAL- Section 1912(a)(1)(B) (42 U.S.C. 1396k(a)(1)(B)) is amen
ded by inserting `the individual is described in section 1902(l)(1)(A) or' after
 `unless (in either case)'.
 (b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effe
ct on the date of the enactment of this Act.
SEC. 4607. REPORT AND TRANSITION ON ERRORS IN ELIGIBILITY DETERMINATIONS.
 (a) REPORT- The Secretary of Health and Human Services shall report to C
ongress, by not later than July 1, 1991, on error rates by States in determining
 eligibility of individuals described in subparagraph (A) or (B) of section 1902
(l)(1) of the Social Security Act for medical assistance under plans approved un
der title XIX of such Act. Such report may include data for medical assistance p
rovided before July 1, 1989.
 (b) ERROR RATE TRANSITION- There shall not be taken into account, for pu
rposes of section 1903(u) of the Social Security Act, payments and expenditures 
for medical assistance which--
 (1) are attributable to medical assistance for individuals described
 in subparagraph (A) or (B) of section 1902(l)(1) of such Act, and
 (2) are made on or after July 1, 1989, and before the first calendar
 quarter that begins more than 12 months after the date of submission of the rep
ort under subsection (a).
PART 4--MISCELLANEOUS
Subpart A--Payments
SEC. 4701. STATE MEDICAID MATCHING PAYMENTS THROUGH VOLUNTARY CONTRIBUTIONS A
ND STATE TAXES.
 (a) EXTENSION OF PROVISION ON VOLUNTARY CONTRIBUTIONS AND PROVIDER-SPECI
FIC TAXES- Section 8431 of the Technical and Miscellaneous Revenue Act of 1988 i
s amended by striking `December 31, 1990' and inserting `December 31, 1991'.
 (b) STATE TAX CONTRIBUTIONS- (1) Section 1902 (42 U.S.C. 1396a) as amend
ed by section 4604, is further amended by adding at the end the following new su
bsection:
 `(t) Except as provided in section 1903(i), nothing in this title (inclu
ding sections 1903(a) and 1905(a)) shall be construed as authorizing the Secreta
ry to deny or limit payments to a State for expenditures, for medical assistance
 for items or services, attributable to taxes (whether or not of general applica
bility) imposed with respect to the provision of such items or services.'.
 (2) Section 1903(i) (42 U.S.C. 1396b(i)) is amended--
 (A) by striking the period at the end of paragraph (9) and inserting
 `; or'; and
 (B) by adding at the end the following new paragraph:
 `(10) with respect to any amount expended for medical assistance for
 care or services furnished by a hospital, nursing facility, or intermediate car
e facility for the mentally retarded to reimburse the hospital or facility for t
he costs attributable to taxes imposed by the State soley  44
with respect to hospitals or facilities.'.
 44 So in original. Probably should be `solely'.
 (c) EFFECTIVE DATES- The amendment made by subsection (b) shall take eff
ect on January 1, 1991.
SEC. 4702. DISPROPORTIONATE SHARE HOSPITALS: COUNTING OF INPATIENT DAYS.
 (a) CLARIFICATION OF MEDICAID DISPROPORTIONATE SHARE ADJUSTMENT CALCULAT
ION- Section 1923(b)(2) (42 U.S.C. 1396r-4(b)(2)) is amended by adding at the en
d the following new sentence: `In this paragraph, the term `inpatient day' inclu
des each day in which an individual (including a newborn) is an inpatient in the
 hospital, whether or not the individual is in a specialized ward and whether or
 not the individual remains in the hospital for lack of suitable placement elsew
here.'.
 (b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effe
ct on July 1, 1990.
SEC. 4703. DISPROPORTIONATE SHARE HOSPITALS: ALTERNATIVE STATE PAYMENT ADJUST
MENTS AND SYSTEMS.
 (a) ALTERNATIVE STATE PAYMENT ADJUSTMENTS- Section 1923(c) (42 U.S.C. 13
96r-4(c)) is amended--
 (1) by striking `or' at the end of paragraph (1);
 (2) by adding `or' at the end of paragraph (2); and
 (3) by inserting after paragraph (2) the following new paragraph:
 `(3) provide for a minimum specified additional payment amount (or i
ncreased percentage payment) that varies according to type of hospital under a m
ethodology that--
 `(A) applies equally to all hospitals of each type; and
 `(B) results in an adjustment for each type of hospital that is 
reasonably related to the costs, volume, or proportion of services provided to p
atients eligible for medical assistance under a State plan approved under this t
itle or to low-income patients.'.
 (b) CLARIFICATION OF SPECIAL RULE FOR STATE USING HEALTH INSURING ORGANI
ZATION- Section 1923(e)(2) (42 U.S.C. 1396r-4(e)(2)) is amended by striking `dur
ing the 3-year period'.
 (c) CONFORMING AMENDMENT- Section 1923(c)(2) (42 U.S.C. 1396r-4(c)(2)) i
s amended by inserting after `State' `or the hospital's low-income utilization r
ate (as defined in paragraph (b)(3))'.
 (d) EFFECTIVE DATE- The amendments made by this section shall take effec
t as if included in the enactment of section 412(a)(2) of the Omnibus Budget Rec
onciliation Act of 1987.
SEC. 4704. FEDERAILY 45
 QUALIFIED HEALTH CENTERS.
 45 So in original. Probably should be `FEDERALLY'.
 (a) CLARIFICATION OF USE OF MEDICARE PAYMENT METHODOLOGY- Section 1902(a
)(13)(E) (42 U.S.C. 1396a(a)(13)(E)) is amended--
 (1) by striking `may prescribe' the first place it appears and inser
ting `prescribes', and
 (2) by striking `on such tests of reasonableness as the Secretary ma
y prescribe in regulations under this subparagraph' and inserting `on the same m
ethodology used under section 1833(a)(3)'.
 (b) MINIMUM PAYMENT RATES BY HEALTH MAINTENANCE ORGANIZATIONS- (1) Secti
on 1903(m)(2)(A) (42 U.S.C. 1396b(m)(2)(A)) is amended--
 (A) by striking `and' at the end of clause (vii),
 (B) by striking the period at the end of clause (viii) and inserting
 `, and', and
 (C) by adding at the end the following new clause:
 `(ix) such contract provides, in the case of an entity that has 
entered into a contract for the provision of services of such center with a fede
rally qualified health center, that (I) rates of prepayment from the State are a
djusted to reflect fully the rates of payment specified in section 1902(a)(13)(E
), and (II) at the election of such center payments made by the entity to such a
 center for services described in 1905(a)(2)(C) are made at the rates of payment
 specified in section 1902(a)(13)(E).'.
 (2) Section 1903(m)(2)(B) (42 U.S.C. 1396b(m)(2)(A)) is amended by strik
ing `(A)' and inserting `(A) except with respect to clause (ix) of subparagraph 
(A),'.
 (3) Section 1915(b) (42 U.S.C. 1396n(b)) is amended by inserting after `
section 1902' `(other than sections 1902(a)(13)(E) and 1902(a)(10)(A) insofar as
 it requires provision of the care and services described in section 1905(a)(2)(
C))'.
 (c) CLARIFICATION IN TREATMENT OF OUTPATIENTS- Section 1905(l)(2) (42 U.
S.C. 1396d(l)(2)) is amended--
 (1) in subparagraph (A), by striking `outpatient' and inserting `pat
ient',
 (2) in subparagraph (B), by striking `facility' and inserting `entit
y', and
 (3) by redesignating clause (ii) as clause (iii) and by inserting af
ter clause (i) the following new clause:
 `(ii)(I) is receiving funding from such a grant under a cont
ract with the recipient of such a grant, and
 `(II) meets the requirements to receive a grant under sectio
n 329, 330, or 340 of such Act;'.
 (d) TREATMENT OF INDIAN TRIBES- The first sentence of section 1905(l)(2)
(B) (42 U.S.C. 1396d(l)(2)(B)) is amended--
 (1) by striking the period at the end and inserting a comma, and
 (2) by adding, after and below clause (ii), the following:
`and includes an outpatient health program or facility operated by a trib
e or tribal organization under the Indian Self-Determination Act (Public Law 93-
638).'.
 (e) TECHNICAL CORRECTION- Section 6402 of the Omnibus Budget Reconciliat
ion Act of 1989 is amended--
 (1) by striking subsection (c), and
 (2) by amending subsection (d) to read as follows:
 `(c) EFFECTIVE DATE- The amendments made by this section (except as othe
rwise provided in such amendments) shall take effect on the date of the enactmen
t of this Act.'.
 (f) EFFECTIVE DATE- The amendments made by this section shall be effecti
ve as if included in the enactment of the Omnibus Budget Reconciliation Act of 1
989.
SEC. 4705. HOSPICE PAYMENTS.
 (a) IN GENERAL- Section 1905(o)(3) (42 U.S.C. 1396d(o)(3)) is amended--<
/ul>
 (1) by striking `a State which elects' and all that follows through 
`with respect to' the first place it appears,
 (2) by striking `skilled nursing or intermediate care facility' in s
ubparagraphs (A) and (C) and inserting `nursing facility or intermediate care fa
cility for the mentally retarded';
 (3) by striking `the amounts allocated under the plan for room and b
oard in the facility, in accordance with the rates established under section 190
2(a)(13),' and inserting `the additional amount described in section 1902(a)(13)
(D)', and
 (4) by striking the last sentence.
 (b) EFFECTIVE DATE- The amendments made by subsection (a) shall be effec
tive as if included in the amendments made by section 6408(c)(1) of the Omnibus 
Budget Reconciliation Act of 1989.
SEC. 4706. LIMITATION ON DISALLOWANCES OR DEFERRAL OF FEDERAL FINANCIAL PARTI
CIPATION FOR CERTAIN INPATIENT PSYCHIATRIC HOSPITAL SERVICES FOR INDIVIDUALS UND
ER AGE 21.
 (a) IN GENERAL- (1) If the Secretary of Health and Human Services makes 
a determination that a psychiatric facility has failed to comply with certificat
ion of need requirements for inpatient psychiatric hospital services for individ
uals under age 21 pursuant to section 1905(h) of the Social Security Act, and su
ch determination has not been subject to a final judicial decision, any disallow
ance or deferral of Federal financial participation under such Act based on such
 determination shall only apply to the period of time beginning with the first d
ay of noncompliance and ending with the date by which the psychiatric facility d
evelops documentation (using plan of care or utilization review procedures) of t
he need for inpatient care with respect to such individuals.
 (2) Any disallowance of Federal financial participation under title XIX 
of the Social Security Act relating to the failure of a psychiatric facility to 
comply with certification of need requirements--
 (A) shall not exceed 25 percent of the amount of Federal financial p
articipation for the period described in paragraph (1); and
 (B) shall not apply to any fiscal year before the fiscal year that i
s 3 years before the fiscal year in which the determination of noncompliance des
cribed in paragraph (1) is made.
 (b) EFFECTIVE DATE- Subsection (a) shall apply to disallowance actions a
nd deferrals of Federal financial participation with respect to services provide
d before the date of enactment of this Act.
SEC. 4707. TREATMENT OF INTEREST ON INDIANA DISALLOWANCE.
 With respect to any disallowance of Federal financial participation unde
r section 1903(a) of the Social Security Act for intermediate care facility serv
ices, intermediate care facility services for the mentally retarded, or skilled 
nursing facility services on the ground that the facilities in the State of Indi
ana were not certified in accordance with law during the period beginning June 1
, 1982, and ending September 30, 1984, payment of such disallowance may be defer
red without interest that would otherwise accrue without regard to this subsecti
on, until every opportunity to appeal has been exhausted.
SEC. 4708. BILLING FOR SERVICES OF SUBSTITUTE PHYSICIAN.
 (a) UNDER MEDICAID- Section 1902(a)(32) (42 U.S.C. 1396a(a)(32))--
 (1) by striking `and' before `(B)',
 (2) by inserting `and' at the end of subparagraph (B), and
 (3) by adding at the end the following:
 `(C) in the case of services furnished (during a period that doe
s not exceed 14 continuous days in the case of an informal reciprocal arrangemen
t or 90 continuous days (or such longer period as the Secretary may provide) in 
the case of an arrangement involving per diem or other fee-for-time compensation
) by, or incident to the services of, one physician to the patients of another p
hysician who submits the claim for such services, payment shall be made to the p
hysician submitting the claim (as if the services were furnished by, or incident
 to, the physician's services), but only if the claim identifies (in a manner sp
ecified by the Secretary) the physician who furnished the services.'.<
/ul>
 (b) EFFECTIVE DATE- The amendments made by this section shall apply to s
ervices furnished on or after the date of the enactment of this Act.
Subpart B--Eligibility and Coverage
SEC. 4711. HOME AND COMMUNITY-BASED CARE AS OPTIONAL SERVICE.
 (a) PROVISION AS OPTIONAL SERVICE- Section 1905(a) (42 U.S.C. 1396d(a)),
 as amended by section 6201, is further amended--
 (1) by striking `and' at the end of paragraph (22);
 (2) by redesignating paragraph (23) as paragraph (24); and
 (3) by inserting after paragraph (22) the following new paragraph:
 `(23) home and community care (to the extent allowed and as defined 
in section 1929) for functionally disabled elderly individuals; and'.
 (b) HOME AND COMMUNITY CARE FOR FUNCTIONALLY DISABLED ELDERLY INDIVIDUAL
S- Title XIX (42 U.S.C. 1396 et seq.) as amended by section 4402 is further amen
ded--
 (1) by redesignating section 1929 as section 1930; and
 (2) by inserting after section 1928 the following new section:<
/ul>
`HOME AND COMMUNITY CARE FOR FUNCTIONALLY DISABLED ELDERLY INDIVIDUALS
 `SEC. 1929. (a) HOME AND COMMUNITY CARE DEFINED- In this title, the term
 `home and community care' means one or more of the following services furnished
 to an individual who has been determined, after an assessment under subsection 
(c), to be a functionally disabled elderly individual, furnished in accordance w
ith an individual community care plan (established and periodically reviewed and
 revised by a qualified community care case manager under subsection (d)):
 `(1) Homemaker/home health aide services.
 `(2) Chore services.
 `(3) Personal care services.
 `(4) Nursing care services provided by, or under the supervision of,
 a registered nurse.
 `(5) Respite care.
 `(6) Training for family members in managing the individual.
 `(7) Adult day care.
 `(8) In the case of an individual with chronic mental illness, day t
reatment or other partial hospitalization, psychosocial rehabilitation services,
 and clinic services (whether or not furnished in a facility).
 `(9) Such other home and community-based services (other than room a
nd board) as the Secretary may approve.
 `(b) FUNCTIONALLY DISABLED ELDERLY INDIVIDUAL DEFINED-
 `(1) IN GENERAL- In this title, the term `functionally disabled elde
rly individual' means an individual who--
 `(A) is 65 years of age or older,
 `(B) is determined to be a functionally disabled individual unde
r subsection (c), and
 `(C) subject to section 1902(f) (as applied consistent with sect
ion 1902(r)(2)), is receiving supplemental security income benefits under title 
XVI (or under a State plan approved under title XVI) or, at the option of the St
ate, is described in section 1902(a)(10)(C).
 `(2) TREATMENT OF CERTAIN INDIVIDUALS PREVIOUSLY COVERED UNDER A WAI
VER- (A) In the case of a State which--
 `(i) at the time of its election to provide coverage for home an
d community care under this section has a waiver approved under section 1915(c) 
or 1915(d) with respect to individuals 65 years of age or older, and
 `(ii) subsequently discontinues such waiver, individuals who wer
e eligible for benefits under the waiver as of the date of its discontinuance an
d who would, but for income or resources, be eligible for medical assistance for
 home and community care under the plan shall, notwithstanding any other provisi
on of this title, be deemed a functionally disabled elderly individual for so lo
ng as the individual would have remained eligible for medical assistance under s
uch waiver.
 `(B) In the case of a State which used a health insuring organizatio
n before January 1, 1986, and which, as of December 31, 1990, had in effect a wa
iver under section 1115 that provides under the State plan under this title for 
personal care services for functionally disabled individuals, the term `function
ally disabled elderly individual' may include, at the option of the State, an in
dividual who--
 `(i) is 65 years of age or older or is disabled (as determined u
nder the supplemental security income program under title XVI);
 `(ii) is determined to meet the test of functional disability ap
plied under the waiver as of such date; and
 `(iii) meets the resource requirement and income standard that a
pply in the State to individuals described in section 1902(a)(10)(A)(ii)(V).
 `(3) USE OF PROJECTED INCOME- In applying section 1903(f)(1) in dete
rmining the eligibility of an individual (described in section 1902(a)(10)(C)) f
or medical assistance for home and community care, a State may, at its option, p
rovide for the determination of the individual's anticipated medical expenses (t
o be deducted from income) over a period of up to 6 months.
 `(c) DETERMINATIONS OF FUNCTIONAL DISABILITY-
 `(1) IN GENERAL- In this section, an individual is `functionally dis
abled' if the individual--
 `(A) is unable to perform without substantial assistance from an
other individual at least 2 of the following 3 activities of daily living: toile
ting, transferring, and eating; or
 `(B) has a primary or secondary diagnosis of Alzheimer's disease
 and is (i) unable to perform without substantial human assistance (including ve
rbal reminding or physical cueing) or supervision at least 2 of the following 5 
activities of daily living: bathing, dressing, toileting, transferring, and eati
ng; or (ii) cognitively impaired so as to require substantial supervision from a
nother individual because he or she engages in inappropriate behaviors that pose
 serious health or safety hazards to himself or herself or others.
 `(2) ASSESSMENTS OF FUNCTIONAL DISABILITY-
 `(A) REQUESTS FOR ASSESSMENTS- If a State has elected to provide
 home and community care under this section, upon the request of an individual w
ho is 65 years of age or older and who meets the requirements of subsection (b)(
1)(C) (or another person on such individual's behalf), the State shall provide f
or a comprehensive functional assessment under this subparagraph which--
 `(i) is used to determine whether or not the individual is f
unctionally disabled,
 `(ii) is based on a uniform minimum data set specified by th
e Secretary under subparagraph (C)(i), and
 `(iii) uses an instrument which has been specified by the St
ate under subparagraph (B).
No fee may be charged for such an assessment.
 `(B) SPECIFICATION OF ASSESSMENT INSTRUMENT- The State shall spe
cify the instrument to be used in the State in complying with the requirement of
 subparagraph (A)(iii) which instrument shall be--
 `(i) one of the instruments designated under subparagraph (C
)(ii); or
 `(ii) an instrument which the Secretary has approved as bein
g consistent with the minimum data set of core elements, common definitions, and
 utilization guidelines specified by the Secretary in subparagraph (C)(i).<
/ul>
 `(C) SPECIFICATION OF ASSESSMENT DATA SET AND INSTRUMENTS- The S
ecretary shall--
 `(i) not later than July 1, 1991--
 `(I) specify a minimum data set of core elements and com
mon definitions for use in conducting the assessments required under subparagrap
h (A); and
 `(II) establish guidelines for use of the data set; and<
/ul>
 `(ii) by not later than July 1, 1991, designate one or more 
instruments which are consistent with the specification made under subparagraph 
(A) and which a State may specify under subparagraph (B) for use in complying wi
th the requirements of subparagraph (A).
 `(D) PERIODIC REVIEW- Each individual who qualifies as a functio
nally disabled elderly individual shall have the individual's assessment periodi
cally reviewed and revised not less often than once every 12 months.
 `(E) CONDUCT OF ASSESSMENT BY INTERDISCIPLINARY TEAMS- An assess
ment under subparagraph (A) and a review under subparagraph (D) must be conducte
d by an interdisciplinary team designated by the State. The Secretary shall perm
it a State to provide for assessments and reviews through teams under contracts-
-
 `(i) with public organizations; or
 `(ii) with nonpublic organizations which do not provide 
home and community care or nursing facility services and do not have a direct or
 indirect ownership or control interest in, or direct or indirect affiliation or
 relationship with, an entity that provides, community care or nursing facility 
services.
 `(F) CONTENTS OF ASSESSMENT- The interdisciplinary team must--
 `(i) identify in each such assessment or review each individ
ual's functional disabilities and need for home and community care, including in
formation about the individual's health status, home and community environment, 
and informal support system; and
 `(ii) based on such assessment or review, determine whether 
the individual is (or continues to be) functionally disabled.
The results of such an assessment or review shall be used in establis
hing, reviewing, and revising the individual's ICCP under subsection (d)(1).
 `(G) APPEAL PROCEDURES- Each State which elects to provide home 
and community care under this section must have in effect an appeals process for
 individuals adversely affected by determinations under subparagraph (F).
 `(d) INDIVIDUAL COMMUNITY CARE PLAN (ICCP)-
 `(1) INDIVIDUAL COMMUNITY CARE PLAN DEFINED- In this section, the te
rms `individual community care plan' and `ICCP' mean, with respect to a function
ally disabled elderly individual, a written plan which--
 `(A) is established, and is periodically reviewed and revised, b
y a qualified case manager after a face-to-face interview with the individual or
 primary caregiver and based upon the most recent comprehensive functional asses
sment of such individual conducted under subsection (c)(2);
 `(B) specifies, within any amount, duration, and scope limitatio
ns imposed on home and community care provided under the State plan, the home an
d community care to be provided to such individual under the plan, and indicates
 the individual's preferences for the types and providers of services; and<
/ul>
 `(C) may specify other services required by such individual.
An ICCP may also designate the specific providers (qualified to provi
de home and community care under the State plan) which will provide the home and
 community care described in subparagraph (B). Nothing in this section shall be 
construed as authorizing an ICCP or the State to restrict the specific persons o
r individuals (who are competent to provide home and community care under the St
ate plan) who will provide the home and community care described in subparagraph
 (B).
 `(2) QUALIFIED COMMUNITY CARE CASE MANAGER DEFINED- In this section,
 the term `qualified community care case manager' means a nonprofit or public ag
ency or organization which--
 `(A) has experience or has been trained in establishing, and in 
periodically reviewing and revising, individual community care plans and in the 
provision of case management services to the elderly;
 `(B) is responsible for (i) assuring that home and community car
e covered under the State plan and specified in the ICCP is being provided, (ii)
 visiting each individual's home or community setting where care is being provid
ed not less often than once every 90 days, and (iii) informing the elderly indiv
idual or primary caregiver on how to contact the case manager if service provide
rs fail to properly provide services or other similar problems occur;<
/ul>
 `(C) in the case of a nonpublic agency, does not provide home an
d community care or nursing facility services and does not have a direct or indi
rect ownership or control interest in, or direct or indirect affiliation or rela
tionship with, an entity that provides, home and community care or nursing facil
ity services;
 `(D) has procedures for assuring the quality of case management 
services that includes a peer review process;
 `(E) completes the ICCP in a timely manner and reviews and discu
sses new and revised ICCPs with elderly individuals or primary caregivers; and
 `(F) meets such other standards, established by the Secretary, a
s to assure that--
 `(i) such a manager is competent to perform case management 
functions;
 `(ii) individuals whose home and community care they manage 
are not at risk of financial exploitation due to such a manager; and
 `(iii) meets such other standards as the State may establish
.
The Secretary may waive the requirement of subparagraph (C) in the ca
se of a nonprofit agency located in a rural area.
 `(3) APPEALS PROCESS- Each State which elects to provide home and co
mmunity care under this section must have in effect an appeals process for indiv
iduals who disagree with the ICCP established.
 `(e) CEILING ON PAYMENT AMOUNTS AND MAINTENANCE OF EFFORT-
 `(1) CEILING ON PAYMENT AMOUNTS- Payments may not be made under sect
ion 1903(a) to a State for home and community care provided under this section i
n a quarter to the extent that the medical assistance for such care in the quart
er exceeds 50 percent of the product of--
 `(A) the average number of individuals in the quarter receiving 
such care under this section;
 `(B) the average per diem rate of payment which the Secretary ha
s determined (before the beginning of the quarter) will be payable under title X
VIII (without regard to coinsurance) for extended care services to be provided i
n the State during such quarter; and
 `(C) the number of days in such quarter.
 `(2) MAINTENANCE OF EFFORT-
 `(A) ANNUAL REPORTS- As a condition for the receipt of payment u
nder section 1903(a) with respect to medical assistance provided by a State for 
home and community care (other than a waiver under section 1915(c) and other tha
n home health care services described in section 1905(a)(7) and personal care se
rvices specified under regulations under section 1905(a)(23)), the State shall r
eport to the Secretary, with respect to each Federal fiscal year (beginning with
 fiscal year 1990) and in a format developed or approved by the Secretary, the a
mount of funds obligated by the State with respect to the provision of home and 
community care to the functionally disabled elderly in that fiscal year.
 `(B) REDUCTION IN PAYMENT IF FAILURE TO MAINTAIN EFFORT- If the 
amount reported under subparagraph (A) by a State with respect to a fiscal year 
is less than the amount reported under subparagraph (A) with respect to fiscal y
ear 1989, the Secretary shall provide for a reduction in payments to the State u
nder section 1903(a) in an amount equal to the difference between the amounts so
 reported.
 `(f) MINIMUM REQUIREMENTS FOR HOME AND COMMUNITY CARE-
 `(1) REQUIREMENTS- Home and Community care provided under this secti
on must meet such requirements for individuals' rights and quality as are publis
hed or developed by the Secretary under subsection (k). Such requirements shall 
include--
 `(A) the requirement that individuals providing care are compete
nt to provide such care; and
 `(B) the rights specified in paragraph (2).
 `(2) SPECIFIED RIGHTS- The rights specified in this paragraph are as
 follows:
 `(A) The right to be fully informed in advance, orally and in wr
iting, of the care to be provided, to be fully informed in advance of any change
s in care to be provided, and (except with respect to an individual determined i
ncompetent) to participate in planning care or changes in care.
 `(B) The right to voice grievances with respect to services that
 are (or fail to be) furnished without discrimination or reprisal for voicing gr
ievances, and to be told how to complain to State and local authorities.
 `(C) The right to confidentiality of personal and clinical recor
ds.
 `(D) The right to privacy and to have one's property treated wit
h respect.
 `(E) The right to refuse all or part of any care and to be infor
med of the likely consequences of such refusal.
 `(F) The right to education or training for oneself and for memb
ers of one's family or household on the management of care.
 `(G) The right to be free from physical or mental abuse, corpora
l punishment, and any physical or chemical restraints imposed for purposes of di
scipline or convenience and not included in an individual's ICCP.
 `(H) The right to be fully informed orally and in writing of the
 individual's rights.
 `(I) Guidelines for such minimum compensation for individuals pr
oviding such care as will assure the availability and continuity of competent in
dividuals to provide such care for functionally disabled individuals who have fu
nctional disabilities of varying levels of severity.
 `(J) Any other rights established by the Secretary.
 `(g) MINIMUM REQUIREMENTS FOR SMALL COMMUNITY CARE SETTINGS-
 `(1) SMALL COMMUNITY CARE SETTINGS DEFINED- In this section, the ter
m `small community care setting' means--
 `(A) a nonresidential setting that serves more than 2 and less t
han 8 individuals; or
 `(B) a residential setting in which more than 2 and less than 8 
unrelated adults reside and in which personal services (other than merely board)
 are provided in conjunction with residing in the setting.
 `(2) MINIMUM REQUIREMENTS- A small community care setting in which c
ommunity care is provided under this section must--
 `(A) meet such requirements as are published or developed by the
 Secretary under subsection (k);
 `(B) meet the requirements of paragraphs (1)(A), (1)(C), (1)(D),
 (3), and (6) of section 1919(c), to the extent applicable to such a setting;
 `(C) inform each individual receiving community care under this 
section in the setting, orally and in writing at the time the individual first r
eceives community care in the setting, of the individual's legal rights with res
pect to such a setting and the care provided in the setting;
 `(D) meet any applicable State or local requirements regarding c
ertification or licensure;
 `(E) meet any applicable State and local zoning, building, and h
ousing codes, and State and local fire and safety regulations; and
 `(F) be designed, constructed, equipped, and maintained in a man
ner to protect the health and safety of residents.
 `(h) MINIMUM REQUIREMENTS FOR LARGE COMMUNITY CARE SETTINGS-
 `(1) LARGE COMMUNITY CARE SETTING DEFINED- In this section, the term
 `large community care setting' means--
 `(A) a nonresidential setting in which more than 8 individuals a
re served; or
 `(B) a residential setting in which more than 8 unrelated adults
 reside and in which personal services are provided in conjunction with residing
 in the setting in which home and community care under this section is provided.

 `(2) MINIMUM REQUIREMENTS- A large community care setting in which c
ommunity care is provided under this section must--
 `(A) meet such requirements as are published or developed by the
 Secretary under subsection (k);
 `(B) meet the requirements of paragraphs (1)(A), (1)(C), (1)(D),
 (3), and (6) of section 1919(c), to the extent applicable to such a setting;
 `(C) inform each individual receiving community care under this 
section in the setting, orally and in writing at the time the individual first r
eceives home and community care in the setting, of the individual's legal rights
 with respect to such a setting and the care provided in the setting; and
 `(D) meet the requirements of paragraphs (2) and (3) of section 
1919(d) (relating to administration and other matters) in the same manner as suc
h requirements apply to nursing facilities under such section; except that, in a
pplying the requirement of section 1919(d)(2) (relating to life safety code), th
e Secretary shall provide for the application of such life safety requirements (
if any) that are appropriate to the setting.
 `(3) DISCLOSURE OF OWNERSHIP AND CONTROL INTERESTS AND EXCLUSION OF 
REPEATED VIOLATORS- A community care setting--
 `(A) must disclose persons with an ownership or control interest
 (including such persons as defined in section 1124(a)(3)) in the setting; and
 `(B) may not have, as a person with an ownership or control inte
rest in the setting, any individual or person who has been excluded from partici
pation in the program under this title or who has had such an ownership or contr
ol interest in one or more community care settings which have been found repeate
dly to be substandard or to have failed to meet the requirements of paragraph (2
).
 `(i) SURVEY AND CERTIFICATION PROCESS-
 `(1) CERTIFICATIONS-
 `(A) RESPONSIBILITIES OF THE STATE- Under each State plan under 
this title, the State shall be responsible for certifying the compliance of prov
iders of home and community care and community care settings with the applicable
 requirements of subsections (f), (g) and (h). The failure of the Secretary to i
ssue regulations to carry out this subsection shall not relieve a State of its r
esponsibility under this subsection.
 `(B) RESPONSIBILITIES OF THE SECRETARY- The Secretary shall be r
esponsible for certifying the compliance of State providers of home and communit
y care, and of State community care settings in which such care is provided, wit
h the requirements of subsections (f), (g) and (h).
 `(C) FREQUENCY OF CERTIFICATIONS- Certification of providers and
 settings under this subsection shall occur no less frequently than once every 1
2 months.
 `(2) REVIEWS OF PROVIDERS-
 `(A) IN GENERAL- The certification under this subsection with re
spect to a provider of home or community care must be based on a periodic review
 of the provider's performance in providing the care required under ICCP's in ac
cordance with the requirements of subsection (f).
 `(B) SPECIAL REVIEWS OF COMPLIANCE- Where the Secretary has reas
on to question the compliance of a provider of home or community care with any o
f the requirements of subsection (f), the Secretary may conduct a review of the 
provider and, on the basis of that review, make independent and binding determin
ations concerning the extent to which the provider meets such requirements.

 `(3) Surveys of community care settings-
 `(A) IN GENERAL- The certification under this subsection with re
spect to community care settings must be based on a survey. Such survey for such
 a setting must be conducted without prior notice to the setting. Any individual
 who notifies (or causes to be notified) a community care setting of the time or
 date on which such a survey is scheduled to be conducted is subject to a civil 
money penalty of not to exceed $2,000. The provisions of section 1128A (other th
an subsections (a) and (b)) shall apply to a civil money penalty under the previ
ous sentence in the same manner as such provisions apply to a penalty or proceed
ing under section 1128A(a). The Secretary shall review each State's procedures f
or scheduling and conducting such surveys to assure that the State has taken all
 reasonable steps to avoid giving notice of such a survey through the scheduling
 procedures and the conduct of the surveys themselves.
 `(B) SURVEY PROTOCOL- Surveys under this paragraph shall be cond
ucted based upon a protocol which the Secretary has provided for under subsectio
n (k).
 `(C) PROHIBITION OF CONFLICT OF INTEREST IN SURVEY TEAM MEMBERSH
IP- A State and the Secretary may not use as a member of a survey team under thi
s paragraph an individual who is serving (or has served within the previous 2 ye
ars) as a member of the staff of, or as a consultant to, the community care sett
ing being surveyed (or the person responsible for such setting) respecting compl
iance with the requirements of subsection (g) or (h) or who has a personal or fa
milial financial interest in the setting being surveyed.
 `(D) VALIDATION SURVEYS OF COMMUNITY CARE SETTINGS- The Secretar
y shall conduct onsite surveys of a representative sample of community care sett
ings in each State, within 2 months of the date of surveys conducted under subpa
ragraph (A) by the State, in a sufficient number to allow inferences about the a
dequacies of each State's surveys conducted under subparagraph (A). In conductin
g such surveys, the Secretary shall use the same survey protocols as the State i
s required to use under subparagraph (B). If the State has determined that an in
dividual setting meets the requirements of subsection (g), but the Secretary det
ermines that the setting does not meet such requirements, the Secretary's determ
ination as to the setting's noncompliance with such requirements is binding and 
supersedes that of the State survey.
 `(E) SPECIAL SURVEYS OF COMPLIANCE- Where the Secretary has reas
on to question the compliance of a community care setting with any of the requir
ements of subsection (g) or (h), the Secretary may conduct a survey of the setti
ng and, on the basis of that survey, make independent and binding determinations
 concerning the extent to which the setting meets such requirements.
 `(4) INVESTIGATION OF COMPLAINTS AND MONITORING OF PROVIDERS AND SET
TINGS- Each State and the Secretary shall maintain procedures and adequate staff
 to investigate complaints of violations of applicable requirements imposed on p
roviders of community care or on community care settings under subsections (f), 
(g) and (h).
 `(5) INVESTIGATION OF ALLEGATIONS OF INDIVIDUAL NEGLECT AND ABUSE AN
D MISAPPROPRIATION OF INDIVIDUAL PROPERTY- The State shall provide, through the 
agency responsible for surveys and certification of providers of home or communi
ty care and community care settings under this subsection, for a process for the
 receipt, review, and investigation of allegations of individual neglect and abu
se (including injuries of unknown source) by individuals providing such care or 
in such setting and of misappropriation of individual property by such individua
ls. The State shall, after notice to the individual involved and a reasonable op
portunity for hearing for the individual to rebut allegations, make a finding as
 to the accuracy of the allegations. If the State finds that an individual has n
eglected or abused an individual receiving community care or misappropriated suc
h individual's property, the State shall notify the individual against whom the 
finding is made. A State shall not make a finding that a person has neglected an
 individual receiving community care if the person demonstrates that such neglec
t was caused by factors beyond the control of the person. The State shall provid
e for public disclosure of findings under this paragraph upon request and for in
clusion, in any such disclosure of such findings, of any brief statement (or of 
a clear and accurate summary thereof) of the individual disputing such findings.

 `(6) DISCLOSURE OF RESULTS OF INSPECTIONS AND ACTIVITIES-
 `(A) PUBLIC INFORMATION- Each State, and the Secretary, shall ma
ke available to the public--
 `(i) information respecting all surveys, reviews, and certif
ications made under this subsection respecting providers of home or community ca
re and community care settings, including statements of deficiencies,<
/ul>
 `(ii) copies of cost reports (if any) of such providers and 
settings filed under this title,
 `(iii) copies of statements of ownership under section 1124,
 and
 `(iv) information disclosed under section 1126.
 `(B) NOTICES OF SUBSTANDARD CARE- If a State finds that--
 `(i) a provider of home or community care has provided care 
of substandard quality with respect to an individual, the State shall make a rea
sonable effort to notify promptly (I) an immediate family member of each such in
dividual and (II) individuals receiving home or community care from that provide
r under this title, or
 `(ii) a community care setting is substandard, the State sha
ll make a reasonable effort to notify promptly (I) individuals receiving communi
ty care in that setting, and (II) immediate family members of such individuals.<
/ul>
 `(C) ACCESS TO FRAUD CONTROL UNITS- Each State shall provide its
 State medicaid fraud and abuse control unit (established under section 1903(q))
 with access to all information of the State agency responsible for surveys, rev
iews, and certifications under this subsection.
 `(j) ENFORCEMENT PROCESS FOR PROVIDERS OF COMMUNITY CARE-
 `(1) STATE AUTHORITY-
 `(A) IN GENERAL- If a State finds, on the basis of a review unde
r subsection (i)(2) or otherwise, that a provider of home or community care no l
onger meets the requirements of this section, the State may terminate the provid
er's participation under the State plan and may provide in addition for a civil 
money penalty. Nothing in this subparagraph shall be construed as restricting th
e remedies available to a State to remedy a provider's deficiencies. If the Stat
e finds that a provider meets such requirements but, as of a previous period, di
d not meet such requirements, the State may provide for a civil money penalty un
der paragraph (2)(A) for the period during which it finds that the provider was 
not in compliance with such requirements.
 `(B) CIVIL MONEY PENALTY-
 `(i) IN GENERAL- Each State shall establish by law (whether 
statute or regulation) at least the following remedy: A civil money penalty asse
ssed and collected, with interest, for each day in which the provider is or was 
out of compliance with a requirement of this section. Funds collected by a State
 as a result of imposition of such a penalty (or as a result of the imposition b
y the State of a civil money penalty under subsection (i)(3)(A)) may be applied 
to reimbursement of individuals for personal funds lost due to a failure of home
 or community care providers to meet the requirements of this section. The State
 also shall specify criteria, as to when and how this remedy is to be applied an
d the amounts of any penalties. Such criteria shall be designed so as to minimiz
e the time between the identification of violations and final imposition of the 
penalties and shall provide for the imposition of incrementally more severe pena
lties for repeated or uncorrected deficiencies.
 `(ii) DEADLINE AND GUIDANCE- Each State which elects to prov
ide home and community care under this section must establish the civil money pe
nalty remedy described in clause (i) applicable to all providers of community ca
re covered under this section. The Secretary shall provide, through regulations 
or otherwise by not later than July 1, 1990, guidance to States in establishing 
such remedy; but the failure of the Secretary to provide such guidance shall not
 relieve a State of the responsibility for establishing such remedy.
 `(2) SECRETARIAL AUTHORITY-
 `(A) FOR STATE PROVIDERS- With respect to a State provider of ho
me or community care, the Secretary shall have the authority and duties of a Sta
te under this subsection, except that the civil money penalty remedy described i
n subparagraph (C) shall be substituted for the civil money remedy described in 
paragraph (1)(B)(i).
 `(B) OTHER PROVIDERS- With respect to any other provider of home
 or community care in a State, if the Secretary finds that a provider no longer 
meets a requirement of this section, the Secretary may terminate the provider's 
participation under the State plan and may provide, in addition, for a civil mon
ey penalty under subparagraph (C). If the Secretary finds that a provider meets 
such requirements but, as of a previous period, did not meet such requirements, 
the Secretary may provide for a civil money penalty under subparagraph (C) for t
he period during which the Secretary finds that the provider was not in complian
ce with such requirements.
 `(C) CIVIL MONEY PENALTY- If the Secretary finds on the basis of
 a review under subsection (i)(2) or otherwise that a home or community care pro
vider no longer meets the requirements of this section, the Secretary shall impo
se a civil money penalty in an amount not to exceed $10,000 for each day of nonc
ompliance. 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 man
ner as such provisions apply to a penalty or proceeding under section 1128A(a). 
The Secretary shall specify criteria, as to when and how this remedy is to be ap
plied and the amounts of any penalties. Such criteria shall be designed so as to
 minimize the time between the identification of violations and final imposition
 of the penalties and shall provide for the imposition of incrementally more sev
ere penalties for repeated or uncorrected deficiencies.
 `(k) SECRETARIAL RESPONSIBILITIES-
 `(1) PUBLICATION OF INTERIM REQUIREMENTS-
 `(A) IN GENERAL- The Secretary shall publish, by December 1, 199
1, a proposed regulation that sets forth interim requirements, consistent with s
ubparagraph (B), for the provision of home and community care and for community 
care settings, including--
 `(i) the requirements of subsection (c)(2) (relating to comp
rehensive functional assessments, including the use of assessment instruments), 
of subsection (d)(2)(E) (relating to qualifications for qualified case managers)
, of subsection (f) (relating to minimum requirements for home and community car
e), of subsection (g) (relating to minimum requirements for small community care
 settings), and of subsection (h) (relating to minimum requirements for large co
mmunity care settings, 46
 and
 46 So in original. Probably should be `settings),'.
 `(ii) survey protocols (for use under subsection (i)(3)(A)) 
which relate to such requirements.
 `(B) MINIMUM PROTECTIONS- Interim requirements under subparagrap
h (A) and final requirements under paragraph (2) shall assure, through methods o
ther than reliance on State licensure processes, that individuals receiving home
 and community care are protected from neglect, physical and sexual abuse, finan
cial exploitation, inappropriate involuntary restraint, and the provision of hea
lth care services by unqualified personnel in community care settings.

 `(2) DEVELOPMENT OF FINAL REQUIREMENTS- The Secretary shall develop,
 by not later than October 1, 1992--
 `(A) final requirements, consistent with paragraph (1)(B), respe
cting the provision of appropriate, quality home and community care and respecti
ng community care settings under this section, and including at least the requir
ements referred to in paragraph (1)(A)(i), and
 `(B) survey protocols and methods for evaluating and assuring th
e quality of community care settings.
The Secretary may, from time to time, revise such requirements, proto
cols, and methods.
 `(3) NO DELEGATION TO STATES- The Secretary's authority under this s
ubsection shall not be delegated to States.
 `(4) NO PREVENTION OF MORE STRINGENT REQUIREMENTS BY STATES- Nothing
 in this section shall be construed as preventing States from imposing requireme
nts that are more stringent than the requirements published or developed by the 
Secretary under this subsection.
 `(l) WAIVER OF STATEWIDENESS- States may waive the requirement of sectio
n 1902(a)(1) (related to State wideness) 47
 for a program of home and community care under this section.
 47 So in original. Probably should be `Statewideness)'.
 `(m) LIMITATION ON AMOUNT OF EXPENDITURES AS MEDICAL ASSISTANCE-
 `(1) LIMITATION ON AMOUNT- The amount of funds that may be expended 
as medical assistance to carry out the purposes of this section shall be for fis
cal year 1991, $40,000,000, for fiscal year 1992, $70,000,000, for fiscal year 1
993, $130,000,000, for fiscal year 1994, $160,000,000, and for fiscal year 1995,
 $180,000,000.
 `(2) ASSURANCE OF ENTITLEMENT TO SERVICE- A State which receives Fed
eral medical assistance for expenditures for home and community care under this 
section must provide home and community care specified under the Individual Comm
unity Care Plan under subsection (d) to individuals described in subsection (b) 
for the duration of the election period, without regard to the amount of funds a
vailable to the State under paragraph (1). For purposes of this paragraph, an el
ection period is the period of 4 or more calendar quarters elected by the State,
 and approved by the Secretary, for the provision of home and community care und
er this section.
 `(3) LIMITATION ON ELIGIBILITY- The State may limit eligibility for 
home and community care under this section during an election period under parag
raph (2) to reasonable classifications (based on age, degree of functional disab
ility, and need for services).
 `(4) ALLOCATION OF MEDICAL ASSISTANCE- The Secretary shall establish
 a limitation on the amount of Federal medical assistance available to any State
 during the State's election period under paragraph (2). The limitation under th
is paragraph shall take into account the limitation under paragraph (1) and the 
number of elderly individuals age 65 or over residing in such State in relation 
to the number of such elderly individuals in the United States during 1990. For 
purposes of the previous sentence, elderly individuals shall, to the maximum ext
ent practicable, be low-income elderly individuals.'.
 (c) PAYMENT FOR HOME AND COMMUNITY CARE-
 (1) REASONABLE AND ADEQUATE PAYMENT RATES- Section 1902 (42 U.S.C. 1
396a) is amended--
 (A) in subsection (a)(13)--
 (i) by striking `and' at the end of subparagraph (D),
 (ii) by inserting `and' at the end of subparagraph (E), and<
/ul>
 (iii) by adding at the end the following new subparagraph:
 `(F) for payment for home and community care (as defined in sect
ion 1929(a) and provided under such section) through rates which are reasonable 
and adequate to meet the costs of providing care, efficiently and economically, 
in conformity with applicable State and Federal laws, regulations, and quality a
nd safety standards;'; and
 (B) in subsection (h), by adding before the period at the end th
e following: `or to limit the amount of payment that may be made under a plan un
der this title for home and community care'.
 (2) DENIAL OF PAYMENT FOR CIVIL MONEY PENALTIES, ETC- Section 1903(i
)(8) of such Act (42 U.S.C. 1396b(i)(8)) is amended by inserting `(A)' after `me
dical assistance' and by inserting before the semicolon at the end the following
: `or (B) for home and community care to reimburse (or otherwise compensate) a p
rovider of such care for payment of a civil money penalty imposed under this tit
le or title XI or for legal expenses in defense of an exclusion or civil money p
enalty under this title or title XI if there is no reasonable legal ground for t
he provider's case'.
 (d) CONFORMING AMENDMENTS-
 (1) Section 1902(j) (42 U.S.C. 1396a(j)) is amended by striking `(21
)' and inserting `(22)'.
 (2) Section 1902(a)(10)(C)(iv) (42 U.S.C. 1396a(a)(10)(C)(iv)) is am
ended by striking `through (20)' and inserting `through (21)'.
 (e) EFFECTIVE DATES-
 (1) Except as provided in this subsection, the amendments made by th
is section shall apply to home and community care furnished on or after July 1, 
1991, without regard to whether or not final regulations to carry out such amend
ments have been promulgated by such date.
 (2)(A) The amendments made by subsection (c)(1) shall apply to home 
and community care furnished on or after July 1, 1991, or, if later, 30 days aft
er the date of publication of interim regulations under section 1929(k)(1).

 (B) The amendment made by subsection (c)(2) shall apply to civil mon
ey penalties imposed after the date of the enactment of this Act.
 (f) WAIVER OF PAPERWORK REDUCTION, ETC- Chapter 35 of title 44, United S
tates Code, and Executive Order 12291 shall not apply to information and regulat
ions required for purposes of carrying out this Act and implementing the amendme
nts made by this Act.
SEC. 4712. COMMUNITY SUPPORTED LIVING ARRANGEMENTS SERVICES.
 (a) PROVISION AS OPTIONAL SERVICE- Section 1905(a) (42 U.S.C. 1396d(a)) 
as amended by section 4711 is further amended--
 (1) by striking `and' at the end of paragraph (23);
 (2) by redesignating paragraph (24) as paragraph (25); and
 (3) by inserting after paragraph (23) the following new paragraph:
 `(24) community supported living arrangements services (to the exten
t allowed and as defined in section 1930).'.
 (b) COMMUNITY SUPPORTED LIVING ARRANGEMENTS- Title XIX (42 U.S.C. 1396 e
t seq.) as amended by sections 4402 and 4711 is further amended--
 (1) by redesignating section 1930 as section 1931; and
 (2) by inserting after section 1929 the following new section:<
/ul>
`COMMUNITY SUPPORTED LIVING ARRANGEMENTS SERVICES
 `SEC. 1930. (a) COMMUNITY SUPPORTED LIVING ARRANGEMENTS SERVICES- In thi
s title, the term `community supported living arrangements services' means one o
r more of the following services meeting the requirements of subsection (h) prov
ided in a State eligible to provide services under this section (as defined in s
ubsection (d)) to assist a developmentally disabled individual (as defined in su
bsection (b)) in activities of daily living necessary to permit such individual 
to live in the individual's own home, apartment, family home, or rental unit fur
nished in a community supported living arrangement setting:
 `(1) Personal assistance.
 `(2) Training and habilitation services (necessary to assist the ind
ividual in achieving increased integration, independence and productivity).

 `(3) 24-hour emergency assistance (as defined by the Secretary).
 `(4) Assistive technology.
 `(5) Adaptive equipment.
 `(6) Other services (as approved by the Secretary, except those serv
ices described in subsection (g)).
 `(7) Support services necessary to aid an individual to participate 
in community activities.
 `(b) DEVELOPMENTALLY DISABLED INDIVIDUAL DEFINED- In this title the term
, `developmentally disabled individual' means an individual who as defined by th
e Secretary is described within the term `mental retardation and related conditi
ons' as defined in regulations as in effect on July 1, 1990, and who is residing
 with the individual's family or legal guardian in such individual's own home in
 which no more than 3 other recipients of services under this section are residi
ng and without regard to whether or not such individual is at risk of institutio
nalization (as defined by the Secretary).
 `(c) CRITERIA FOR SELECTION OF PARTICIPATING STATES- The Secretary shall
 develop criteria to review the applications of States submitted under this sect
ion to provide community supported living arrangement services. The Secretary sh
all provide in such criteria that during the first 5 years of the provision of s
ervices under this section that no less than 2 and no more than 8 States shall b
e allowed to receive Federal financial participation for providing the services 
described in this section.
 `(d) QUALITY ASSURANCE- A State selected by the Secretary to provide ser
vices under this section shall in order to continue to receive Federal financial
 participation for providing services under this section be required to establis
h and maintain a quality assurance program, that provides that--
 `(1) the State will certify and survey providers of services under t
his section (such surveys to be unannounced and average at least 1 a year);

 `(2) the State will adopt standards for survey and certification tha
t include--
 `(A) minimum qualifications and training requirements for provid
er staff;
 `(B) financial operating standards; and
 `(C) a consumer grievance process;
 `(3) the State will provide a system that allows for monitoring boar
ds consisting of providers, family members, consumers, and neighbors;
 `(4) the State will establish reporting procedures to make available
 information to the public;
 `(5) the State will provide ongoing monitoring of the health and wel
l-being of each recipient;
 `(6) the State will provide the services defined in subsection (a) i
n accordance with an individual support plan (as defined by the Secretary in reg
ulations); and
 `(7) the State plan amendment under this section shall be reviewed b
y the State Planning Council established under section 124 of the Developmental 
Disabilities Assistance and Bill of Rights Act, and the Protection and Advocacy 
System established under section 142 of such Act.'. 48
 48 So in original. Probably should be `Act.'.
The Secretary shall not approve a quality assurance plan under this subse
ction and allow a State to continue to receive Federal financial participation u
nder this section unless the State provides for public hearings on the plan prio
r to adoption and implementation of its plan under this subsection.
 `(e) MAINTENANCE OF EFFORT- States selected by the Secretary to receive 
Federal financial participation to provide services under this section shall mai
ntain current levels of spending for such services in order to be eligible to co
ntinue to receive Federal financial participation for the provision of such serv
ices under this section.
 `(f) EXCLUDED SERVICES- No Federal financial participation shall be allo
wed for the provision of the following services under this section:
 `(1) Room and board.
 `(2) Cost of prevocational, vocational and supported employment.
 `(g) WAIVER OF REQUIREMENTS- The Secretary may waive such provisions of 
this title as necessary to carry out the provisions of this section including th
e following requirements of this title--
 `(1) comparability of amount, duration, and scope of services; and
 `(2) statewideness.
 `(h) Minimum Protections-
 `(1) PUBLICATION OF INTERIM AND FINAL REQUIREMENTS-
 `(A) IN GENERAL- The Secretary shall publish, by July 1, 1991, a
 regulation (that shall be effective on an interim basis pending the promulgatio
n of final regulations), and by October 1, 1992, a final regulation, that sets f
orth interim and final requirements, respectively, consistent with subparagraph 
(B), to protect the health, safety, and welfare of individuals receiving communi
ty supported living arrangements services.
 `(B) MINIMUM PROTECTIONS- Interim and final requirements under s
ubparagraph (A) shall assure, through methods other than reliance on State licen
sure processes or the State quality assurance programs under subsection (d), tha
t--
 `(i) individuals receiving community supported living arrang
ements services are protected from neglect, physical and sexual abuse, and finan
cial exploitation;
 `(ii) a provider of community supported living arrangements 
services may not use individuals who have been convicted of child or client abus
e, neglect, or mistreatment or of a felony involving physical harm to an individ
ual and shall take all reasonable steps to determine whether applicants for empl
oyment by the provider have histories indicating involvement in child or client 
abuse, neglect, or mistreatment or a criminal record involving physical harm to 
an individual;
 `(iii) individuals or entities delivering such services are 
not unjustly enriched as a result of abusive financial arrangements (such as own
er lease-backs); and
 `(iv) individuals or entities delivering such services to cl
ients, or relatives of such individuals, are prohibited from being named benefic
iaries of life insurance policies purchased by (or on behalf of) such clients.
 `(2) SPECIFIED REMEDIES- If the Secretary finds that a provider has 
not met an applicable requirement under subsection (h), the Secretary shall impo
se a civil money penalty in an amount not to exceed $10,000 for each day of nonc
ompliance. 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 man
ner as such provisions apply to a penalty or proceeding under section 1128A(a).<
/ul>
 `(i) TREATMENT OF FUNDS- Any funds expended under this section for medic
al assistance shall be in addition to funds expended for any existing services c
overed under the State plan, including any waiver services for which an individu
al receiving services under this program is already eligible.
 `(j) LIMITATION ON AMOUNTS OF EXPENDITURES AS MEDICAL ASSISTANCE- The am
ount of funds that may be expended as medical assistance to carry out the purpos
es of this section shall be for fiscal year 1991, $5,000,000, for fiscal year 19
92, $10,000,000, for fiscal year 1993, $20,000,000, for fiscal year 1994, $30,00
0,000, for fiscal year 1995, $35,000,000, and for fiscal years thereafter such s
ums as provided by Congress.'.
 (c) EFFECTIVE DATE-
 (1) IN GENERAL- The amendments made by this section shall apply to c
ommunity supported living arrangements services furnished on or after the later 
of July 1, 1991, or 30 days after the publication of regulations setting forth i
nterim requirements under subsection (h) without regard to whether or not final 
regulations to carry out such amendments have been promulgated by such date.
 (2) APPLICATION PROCESS- The Secretary of Health and Human Services 
shall provide that the applications required to be submitted by States under thi
s section shall be received and approved prior to the effective date specified i
n paragraph (1).
SEC. 4713. PROVIDING FEDERAL MEDICAL ASSISTANCE FOR PAYMENTS FOR PREMIUMS FOR
 `COBRA' CONTINUATION COVERAGE WHERE COST EFFECTIVE.
 (a) OPTIONAL PAYMENT OF COBRA PREMIUMS FOR QUALIFIED COBRA CONTINUATION 
BENEFICIARIES- Section 1902 (42 U.S.C. 1396a) is amended--
 (1) in subsection (a)(10)--
 (A) by striking `and' at the end of subparagraph (D),<
/ul>
 (B) by adding `and' at the end of subparagraph (E),
 (C) by inserting after subparagraph (E) the following new subpar
agraph:
 `(F) at the option of a State, for making medical assistance ava
ilable for COBRA premiums (as defined in subsection (u)(2)) for qualified COBRA 
continuation beneficiaries described in section 1902(u)(1);', and
 (D) in the matter following subparagraph (E), by striking `and' 
before `(X)' and by inserting before the semicolon at the end the following: `, 
and (XI) the medical assistance made available to an individual described in sub
section (u)(1) who is eligible for medical assistance only because of subparagra
ph (F) shall be limited to medical assistance for COBRA continuation premiums (a
s defined in subsection (u)(2))'; and
 (2) by adding after the subsections added by section 4604 and 4701(b
) the following new subsection:
 `(u)(1) Individuals described in this paragraph are individuals--
 `(A) who are entitled to elect COBRA continuation coverage (as defin
ed in paragraph (3)),
 `(B) whose income (as determined under section 1612 for purposes of 
the supplemental security income program) does not exceed 100 percent of the off
icial poverty line (as defined by the Office of Management and Budget, and revis
ed annually in accordance with section 673(2) of the Omnibus Budget Reconciliati
on Act of 1981) applicable to a family of the size involved,
 `(C) whose resources (as determined under section 1613 for purposes 
of the supplemental security income program) do not exceed twice the maximum amo
unt of resources that an individual may have and obtain benefits under that prog
ram, and
 `(D) with respect to whose enrollment for COBRA continuation coverag
e the State has determined that the savings in expenditures under this title res
ulting from such enrollment is likely to exceed the amount of payments for COBRA
 premiums made.
 `(2) For purposes of subsection (a)(10)(F) and this subsection, the term
 `COBRA premiums' means the applicable premium imposed with respect to COBRA con
tinuation coverage.
 `(3) In this subsection, the term `COBRA continuation coverage' means co
verage under a group health plan provided by an employer with 75 or more employe
es provided pursuant to title XXII of the Public Health Service Act, section 498
0B of the Internal Revenue Code of 1986, or title VI of the Employee Retirement 
Income Security Act of 1974.
 `(4) Notwithstanding subsection (a)(17), for individuals described in pa
ragraph (1) who are covered under the State plan by virtue of subsection (a)(10)
(A)(ii)(XI)--
 `(A) the income standard to be applied is the income standard descri
bed in paragraph (1)(B), and
 `(B) except as provided in section 1612(b)(4)(B)(ii), costs incurred
 for medical care or for any other type of remedial care shall not be taken into
 account in determining income.
Any different treatment provided under this paragraph for such individual
s shall not, because of subsection (a)(10)(B) or (a)(17), require or permit such
 treatment for other individuals.'.
 (b) CONFORMING AMENDMENT- Section 1905(a) (42 U.S.C. 1396d(a)) is amende
d--
 (1) by striking `or' at the end of clause (viii),
 (2) by adding `or' at the end of clause (ix), and
 (3) by inserting after clause (ix) the following new clause:
 `(x) individuals described in section 1902(u)(1),'.
 (c) EFFECTIVE DATE- The amendments made by this section shall apply to m
edical assistance furnished on or after January 1, 1991.
SEC. 4714. PROVISIONS RELATING TO SPOUSAL IMPOVERISHMENT.
 (a) CLARIFICATION OF NON-APPLICATION OF STATE COMMUNITY PROPERTY LAWS- S
ection 1924(b)(2) (42 U.S.C. 1396r-1(b)(2)) as amended by subsection (a), is fur
ther amended by striking `, after the institutionalized spouse has been determin
ed or redetermined to be eligible for medical assistance' and inserting `for pur
poses of the post-eligibility income determination described in subsection (d)'.

 (b) CLARIFICATION OF TRANSFER OF RESOURCES TO COMMUNITY SPOUSE- Section 
1924(f)(1) (42 U.S.C. 1396r-5(f)(1)) is amended by striking `section 1917' and i
nserting `section 1917(c)(1)'.
 (c) CLARIFICATION OF PERIOD OF CONTINUOUS ELIGIBILITY- Section 1924(c)(1
) (42 U.S.C. 1396r-1(c)(1)) is amended by striking `the beginning of a continuou
s period of institutionalization of the institutionalized spouse' each place it 
appears and inserting `the beginning of the first continuous period of instituti
onalization (beginning on or after September 30, 1989) of the institutionalized 
spouse'.
 (d) EFFECTIVE DATE- The amendments made this section shall take effect a
s if included in the enactment of section 303 of the Medicare Catastrophic Cover
age Act of 1988.
SEC. 4715. DISREGARDING GERMAN REPARATION PAYMENTS FROM POST-ELIGIBILITY TREA
TMENT OF INCOME UNDER THE MEDICAID PROGRAM.
 (a) IN GENERAL- Section 1902(r)(1) (42 U.S.C. 1396a(r)(1)) is amended by
 inserting `there shall be disregarded reparation payments made by the Federal R
epublic of Germany and' after `under such a waiver'.
 (b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to 
treatment of income for months beginning more than 30 days after the date of the
 enactment of this Act.
SEC. 4716. AMENDMENTS RELATING TO MEDICAID TRANSITION PROVISION.
 (a) AMENDMENTS- Subsection (f) of section 1925 (42 U.S.C. 1396s) is amen
ded--
 (1) in subsection (b)(2)(B)(i), by inserting at the end the followin
g: `A State may permit such additional extended assistance under this subsection
 notwithstanding a failure to report under this clause if the family has establi
shed, to the satisfaction of the State, good cause for the failure to report on 
a timely basis.';
 (2) in subsection (b)(2)(B), by adding at the end the following new 
clause:
 `(iii) CLARIFICATION ON FREQUENCY OF REPORTING- A State may 
not require that a family receiving extended assistance under this subsection or
 subsection (a) report more frequently than as required under clause (i) or (ii)
.'; and
 (3) in subsection (b)(3)(B), by adding at the end the following: `No
 such termination shall be effective earlier than 10 days after the date of mail
ing of such notice.'.
 (b) EFFECTIVE DATE- The amendments made by subsection (a) shall be effec
tive as if included in the enactment of the Family Support Act of 1988.
SEC. 4717. CLARIFYING EFFECT OF HOSPICE ELECTION.
 Section 1905(o)(1)(A) (42 U.S.C. 1396d(o)(1)(A)) is amended by inserting
 `and for which payment may otherwise be made under title XVIII' after `describe
d in section 1812(d)(2)(A)'.
SEC. 4718. MEDICALLY NEEDY INCOME LEVELS FOR CERTAIN 1-MEMBER FAMILIES.
 (a) IN GENERAL- For purposes of section 1903(f)(1)(B), for payments made
 before, on, or after the date of the enactment of this Act, a State described i
n subparagraph (B) may use, in determining the `highest amount which would ordin
arily be paid to a family of the same size' (under the State's plan approved und
er part A of title IV of such Act) in the case of a family consisting only of on
e individual and without regard to whether or not such plan provides for aid to 
families consisting only of one individual, an amount reasonably related to the 
highest money payment which would ordinarily be made under such a plan to a fami
ly of two without income or resources.
 (b) STATES COVERED- Subsection (a) shall only apply to a State the State
 plan of which (under title XIX of the Social Security Act) as of June 1, 1989, 
provided for the policy described in such paragraph. For purposes of the previou
s sentence, a State plan includes all the matter included in a State plan under 
section 2373(c)(5) of the Deficit Reduction Act of 1984 (as amended by section 9
 of the Medicare and Medicaid Patient and Program Protection Act of 1987).
SEC. 4719. CODIFICATION OF COVERAGE OF REHABILITATION SERVICES.
 (a) IN GENERAL- Section 1905(a)(13) (42 U.S.C. 1396d(a)(13)) is amended 
by inserting before the semicolon at the end the following: `, including any med
ical or remedial services (provided in a facility, a home, or other setting) rec
ommended by a physician or other licensed practitioner of the healing arts withi
n the scope of their practice under State law, for the maximum reduction of phys
ical or mental disability and restoration of an individual to the best possible 
functional level'.
 (b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effe
ct on the date of the enactment of this Act.
SEC. 4720. PERSONAL CARE SERVICES FOR MINNESOTA.
 (a) CLARIFICATION OF COVERAGE- In applying section 1905 of the Social Se
curity Act with respect to Minnesota, medical assistance shall include payment f
or personal care services described in subsection (b).
 (b) PERSONAL CARE SERVICES DEFINED- For purposes of this section, the te
rm `personal care services' means services--
 (1) prescribed by a physician for an individual in accordance with a
 plan of treatment,
 (2) provided by a person who is qualified to provide such services w
ho is not a member of the individual's family,
 (3) supervised by a registered nurse, and
 (4) furnished in a home or other location;
but does not include such services furnished to an inpatient or resident 
of a hospital or nursing facility.
 (c) EFFECTIVE DATE- This section shall take effect on the date of the en
actment of this Act and shall apply with respect to--
 (1) personal care services furnished before such date pursuant to re
gulations in effect as of July 1, 1989; and
 (2) such services furnished before October 1, 1994.
SEC. 4721. MEDICAID COVERAGE OF PERSONAL CARE SERVICES OUTSIDE THE HOME.
 (a) IN GENERAL- Section 1905(a)(7) (42 U.S.C. 1396d(a)(7)) is amended by
 striking `services' and inserting `services including personal care services (A
) prescribed by a physician for an individual in accordance with a plan of treat
ment, (B) provided by an individual who is qualified to provide such services an
d who is not a member of the individual's family, (C) supervised by a registered
 nurse, and (D) furnished in a home or other location; but not including such se
rvices furnished to an inpatient or resident of a nursing facility'.
 (b) EFFECTIVE DATE- The amendment made by this section shall become effe
ctive with respect to personal care services provided on or after October 1, 199
4.
SEC. 4722. MEDICAID COVERAGE OF ALCOHOLISM AND DRUG DEPENDENCY TREATMENT SERV
ICES.
 Section 1905(a) of the Social Security Act is amended by adding at the e
nd the following new sentence: `No service (including counseling) shall be exclu
ded from the definition of `medical assistance' solely because it is provided as
 a treatment service for alcoholism or drug dependency.'.
SEC. 4723. MEDICAID SPENDDOWN OPTION.
 (a) IN GENERAL- Section 1903(f)(2) (42 U.S.C. 1396b(f)(2)) is amended by
--
 (1) inserting `(A)' after `(2)'; and
 (2) by adding before the period at the end the following: `or, (B) n
otwithstanding section 1916 at State option, an amount paid by such family, at t
he family's option, to the State, provided that the amount, when combined with c
osts incurred in prior months, is sufficient when excluded from the family's inc
ome to reduce such family's income below the applicable income limitation descri
bed in paragraph (1). The amount of State expenditures for which medical assista
nce is available under subsection (a)(1) will be reduced by amounts paid to the 
State pursuant to this subparagraph.'
 (b) CONFORMING AMENDMENT- Section 1902(a)(17) (42 U.S.C. 1396a(a)(17)) i
s amended by inserting after `insurance premiums' `, payments made to the State 
under section 1903(f)(2)(B),'.
SEC. 4724. OPTIONAL STATE MEDICAID DISABILITY DETERMINATIONS INDEPENDENT OF T
HE SOCIAL SECURITY ADMINISTRATION.
 (a) IN GENERAL- Section 1902 (42 U.S.C. 1396a) as amended by this title,
 is further amended by adding at the end the following new subsection:
 `(v)(1) A State plan may provide for the making of determinations of dis
ability or blindness for the purpose of determining eligibility for medical assi
stance under the State plan by the single State agency or its designee, and make
 medical assistance available to individuals whom it finds to be blind or disabl
ed and who are determined otherwise eligible for such assistance during the peri
od of time prior to which a final determination of disability or blindness is ma
de by the Social Security Administration with respect to such an individual. In 
making such determinations, the State must apply the definitions of disability a
nd blindness found in section 1614(a) of the Social Security Act.'.
Subpart C--Health Maintenance Organizations
SEC. 4731. REGULATION OF INCENTIVE PAYMENTS TO PHYSICIANS.
 (a) PHYSICIAN PAYMENT PLAN- Section 1903(m)(2)(A) (42 U.S.C. 1396b(m)(2)
(A)) as amended by this title is further amended--
 (1) by striking `, and' at the end of clause (viii) and inserting a 
semicolon;
 (2) by striking the period at the end of clause (ix) and inserting `
; and'; and
 (3) by adding at the end the following new clause:
 `(x) any physician incentive plan that it operates meets the require
ments described in section 1876(i)(8).'.
 (b) REPEAL OF PROHIBITION AGAINST PHYSICIAN INCENTIVE PAYMENTS- Section 
1128A(b)(1) (42 U.S.C. 1320a-7a(b)(1)) is--
 (1) REPEAL OF PROHIBITION- Section 1128A(b)(1) (42 U.S.C. 1320a-7a(b
)(1)) is amended by striking `or an entity with a contract under section 1903(m)
'.
 (2) PENALTIES- Section 1903(m)(5)(A) (42 U.S.C. 1396b(m)(5)(A)) is a
mended--
 (A) by striking `or' at the end of clause (iii);
 (B) by adding `or' at the end of clause (iv); and
 (C) by adding at the end the following new clause:
 `(v) fails to comply with the requirements of section 1876(i)(8),'.<
/ul>
 (c) EFFECTIVE DATE- The amendments made by subsections (a) and (b)(2) sh
all apply with respect to contract years beginning on or after January 1, 1992, 
and the amendments made by subsection (b)(1) shall take effect on the date of th
e enactment of this Act.
SEC. 4732. SPECIAL RULES.
 (a) WAIVER OF 75 PERCENT RULE FOR PUBLIC ENTITIES- Section 1903(m)(2)(D)
 (42 U.S.C. 1396b(m)(2)(D)) is amended by striking `(i) special circumstances wa
rrant such modification or waiver, and (ii)'.
 (b) EXTENDING SPECIAL TREATMENT TO MEDICARE COMPETITIVE MEDICAL PLANS-
 (1) 6-MONTH MINIMUM ENROLLMENT PERIOD OPTION- Section 1902(e)(2)(A) 
(42 U.S.C. 1396a(e)(2)(A)) is amended by inserting `or with an eligible organiza
tion with a contract under section 1876' after `1903(m)(2)(A)'.
 (2) ENROLLMENT LOCK-IN- Section 1903(m)(2)(F)(i) (42 U.S.C. 1396b(m)
(2)(F)(i)) is amended--
 (A) by striking `(G) or' and inserting `(G),', and
 (B) adding at the end the following: `or with an eligible organi
zation with a contract under section 1876 which meets the requirement of subpara
graph (A)(ii), or'.
 (c) AUTOMATIC 1-MONTH REENROLLMENT FOR SHORT PERIODS OF INELIGIBILITY- S
ection 1903(m)(2) is amended by adding at the end the following new subparagraph
:
 `(H) In the case of an individual who--
 `(i) in a month is eligible for benefits under this title and enroll
ed with a health maintenance organization with a contract under this paragraph,<
/ul>
 `(ii) in the next month (or in the next 2 months) is not eligible fo
r such benefits, but
 `(iii) in the succeeding month is again eligible for such benefits,<
/ul>
the State plan, subject to subparagraph (A)(vi), may enroll the individua
l for that succeeding month with the health maintenance organization described i
n clause (i) if the organization continues to have a contract under this paragra
ph with the State.'.
 (d) ELIMINATION OF PROVISIONAL QUALIFICATION FOR HMOS- Section 1903(m) i
s amended--
 (1) in paragraph (2)(A)(i), by striking `(or the State as authorized
 by paragraph (3))', and
 (2) by striking paragraph (3).
 (e) EFFECTIVE DATE- The amendments made by this section shall take effec
t on the date of the enactment of this Act.
SEC. 4733. EXTENSION AND EXPANSION OF MINNESOTA PREPAID MEDICAID DEMONSTRATIO
N PROJECT.
 Section 507 of the Family Support Act of 1988 is amended--
 (1) by striking `1991' and inserting `1996'; and
 (2) by striking the period at the end and inserting the following: `
, and shall amend such waiver to permit the State to expand such demonstration p
roject to other counties if the amount of medical assistance provided under titl
e XIX of such Act after such expansion will not exceed the amount of medical ass
istance provided under such title had the project not been expanded to other cou
nties.'.
SEC. 4734. TREATMENT OF CERTAIN COUNTY-OPERATED HEALTH INSURING ORGANIZATIONS
.
 Section 9517(c) of the Consolidated Omnibus Budget Reconciliation Act of
 1985 is amended--
 (1) in paragraph (2)(A), by inserting `and in paragraph (3)' after `
subparagraph (B)', and
 (2) by adding at the end the following new paragraph:
 `(3)(A) Subject to subparagraph (C), in the case of up to 3 health insur
ing organizations which are described in subparagraph (B), which first become op
erational on or after January 1, 1986, and which are designated by the Governor,
 and approved by the Legislature, of California, the amendments made by paragrap
h (1) shall not apply.
 `(B) A health insuring organization described in this subparagraph is on
e that--
 `(i) is operated directly by a public entity established by a county
 government in the State of California under a State enabling statute;
 `(ii) enrolls all medicaid beneficiaries residing in the county in w
hich it operates;
 `(iii) meets the requirements for health maintenance organizations u
nder the Knox-Keene Act (Cal. Health and Safety Code, section 1340 et seq.) and 
the Waxman-Duffy Act (Cal. Welfare and Institutions Code, section 14450 et seq.)
;
 `(iv) assures a reasonable choice of providers, which includes provi
ders that have historically served medicaid beneficiaries and which does not imp
ose any restriction which substantially impairs access to covered services of ad
equate quality where medically necessary;
 `(v) provides for a payment adjustment for a disproportionate share 
hospital (as defined under State law consistent with section 1923 of the Social 
Security Act) in a manner consistent with the requirements of such section; and<
/ul>
 `(vi) provides for payment, in the case of childrens' hospital servi
ces provided to medicaid beneficiaries who are under 21 years of age, who are ch
ildren with special health care needs under title V of the Social Security Act, 
and who are receiving care coordination services under such title, at rates dete
rmined by the California Medical Assistance Commission.
 `(C) Subparagraph (A) shall not apply with respect to any period for whi
ch the Secretary of Health and Human Services determines that the number of medi
caid beneficiaries enrolled with health insuring organizations described in subp
aragraph (B) exceeds 10 percent of the number of such beneficiaries in the State
 of California.
 `(D) In this paragraph, the term `medicaid beneficiary' means an individ
ual who is entitled to medical assistance under the State plan under title XIX o
f the Social Security Act, other than a qualified medicare beneficiary who is on
ly entitled to such assistance because of section 1902(a)(10)(E) of such title.'
.
Subpart D--Demonstration Projects and Home and Community-Based Waiver
s
SEC. 4741. HOME AND COMMUNITY-BASED WAIVERS.
 (a) TREATMENT OF ROOM AND BOARD- (1) Subsections (c)(1) and (d)(1) of se
ction 1915 (42 U.S.C. 1396n) are each amended by adding at the end the following
: `For purposes of this subsection, the term `room and board' shall not include 
an amount established under a method determined by the State to reflect the port
ion of costs of rent and food attributable to an unrelated personal caregiver wh
o is residing in the same household with an individual who, but for the assistan
ce of such caregiver, would require admission to a hospital, nursing facility, o
r intermediate care facility for the mentally retarded.'.
 (b) ADJUSTMENT TO 1915(d) CEILING TO TAKE INTO ACCOUNT THE ADDED COSTS O
F OBRA 87- Section 1915(d)(5)(B)(iv) (42 U.S.C. 1396n(d)(5)(B)(iv)) is amended b
y striking `this title' the first place it appears and inserting `this title who
se provisions become effective on or after such date'.
SEC. 4742. TIMELY PAYMENT UNDER WAIVERS OF FREEDOM OF CHOICE OF HOSPITAL SERV
ICES.
 (a) IN GENERAL- Section 1915(b)(4) (42 U.S.C. 1396n(b)(4)) is amended by
 inserting before the period at the end the following: `and if providers under s
uch restriction are paid on a timely basis in the same manner as health care pra
ctitioners must be paid under section 1902(a)(37)(A)'.
 (b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effe
ct as of the first calendar quarter beginning more than 30 days after the date o
f the enactment of this Act.
 (c) TREATMENT OF PERSONS WITH MENTAL RETARDATION OR A RELATED CONDITION 
IN A DECERTIFIED FACILITY-
 (1) IN GENERAL- Section 1915(c)(7) (42 U.S.C. 1396n(c)(7)) is amende
d by adding at the end the following new subparagraph:
 `(C) In making estimates under paragraph (2)(D) in the case of a waiver 
to the extent that it applies to individuals with mental retardation or a relate
d condition who are resident in an intermediate care facility for the mentally r
etarded the participation of which under the State plan is terminated, the State
 may determine the average per capita expenditures that would have been made in 
a fiscal year for those individuals without regard to any such termination.'.
 (2) EFFECTIVE DATE- The amendment made by paragraph (1) shall apply 
as if included in the enactment of the Omnibus Budget Reconciliation Act of 1981
, but shall only apply to facilities the participation of which under a State pl
an under title XIX of the Social Security Act is terminated on or after the date
 of the enactment of this Act.
 (d) SCOPE OF RESPITE CARE-
 (1) IN GENERAL- Section 1915(c)(4) is amended by adding at the end t
he following:
`Except as provided under paragraph (2)(D), the Secretary may not restric
t the number of hours or days of respite care in any period which a State may pr
ovide under a waiver under this subsection.'.
 (2) EFFECTIVE DATE- The amendment made by paragraph (1) shall apply 
as if included in the enactment of the Omnibus Budget Reconciliation Act of 1981
.
 (e) PERMITTING ADJUSTMENT IN ESTIMATES TO TAKE INTO ACCOUNT PREADMISSION
 SCREENING REQUIREMENT- In the case of a waiver under section 1915(c) of the Soc
ial Security Act for individuals with mental retardation or a related condition 
in a State, the Secretary of Health and Human Services shall permit the State to
 adjust the estimate of average per capita expenditures submitted under paragrap
h (2)(D) of such section, with respect to such expenditures made on or after Jan
uary 1, 1989, to take into account increases in expenditures for, or utilization
 of, intermediate care facilities for the mentally retarded resulting from imple
mentation of section 1919(e)(7)(A) of such Act.
SEC. 4744. PROVISIONS RELATING TO FRAILELDERLY DEMONSTRATION PROJECT WAIVERS.
 (a) EXPANSION OF WAIVERS- Section 9412(b) of the Omnibus Budget Reconcil
iation Act of 1986 is amended--
 (1) in paragraph (1), by striking `10' and inserting `15'; and<
/ul>
 (2) by adding at the end the following new paragraph:
 `(3) In the case of an organization receiving an initial waiver unde
r this subsection on or after October 1, 1990, the Secretary (at the request of 
the organization) shall not require the organization to provide services under t
itle XVIII of the Social Security Act on a capitated or other risk basis during 
the first 2 years of the waiver.'.
 (b) APPLICATION OF SPOUSAL IMPOVERISHMENT RULES- (1) Section 1924(a) (42
 U.S.C. 1396r-5(a)) is amended by adding at the end the following new paragraph:

 `(5) APPLICATION TO INDIVIDUALS RECEIVING SERVICES FROM ORGANIZATION
S RECEIVING CERTAIN WAIVERS- This section applies to individuals receiving insti
tutional or noninstitutional services from any organization receiving a frail el
derly demonstration project waiver under section 9412(b) of the Omnibus Budget R
econciliation Act of 1986.'.
 (2) Section 9412(b) of the Omnibus Budget Reconciliation Act of 1986, as
 amended by subsection (a), is amended by adding at the end the following new pa
ragraph:
 `(4) Section 1924 of the Social Security Act shall apply to any indi
vidual receiving services from an organization receiving a waiver under this sub
section.'.
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.
 (a) DEMONSTRATION PROJECTS-
 (1) IN GENERAL- (A) The Secretary of Health and Human Services (here
after in this section referred to as the `Secretary') shall enter into agreement
s with 3 and no more than 4 States submitting applications under this section fo
r the purpose of conducting demonstration projects to study the effect on access
 to, and costs of, health care of eliminating the categorical eligibility requir
ement for medicaid benefits for certain low-income individuals.
 (B) In entering into agreements with States under this section the S
ecretary shall provide that at least 1 and no more than 2 of the projects are co
nducted on a substate basis.
 (2) REQUIREMENTS- (A) The Secretary may not enter into an agreement 
with a State to conduct a project unless the Secretary determines that--
 (i) the project can reasonably be expected to improve access to 
health insurance coverage for the uninsured;
 (ii) with respect to projects for which the statewideness requir
ement has not been waived, the State provides, under its plan under title XIX of
 the Social Security Act, for eligibility for medical assistance for all individ
uals described in subparagraphs (A), (B), (C), and (D) of paragraph (1) of secti
on 1902(l) of such Act (based on the State's election of certain eligibility opt
ions the highest income standards and, based on the State's waiver of the applic
ation of any resource standard);
 (iii) eligibility for benefits under the project is limited to i
ndividuals in families with income below 150 percent of the income official pove
rty line and who are not individuals receiving benefits under title XIX of the S
ocial Security Act;
 (iv) if the Secretary determines that it is cost-effective for t
he project to utilize employer coverage (as described in section 1925(b)(4)(D) o
f the Social Security Act), the project must require an employer contribution an
d benefits under the State plan under title XIX of such Act will continue to be 
made available to the extent they are not available under the employer coverage;

 (v) the project provides for coverage of benefits consistent wit
h subsection (b); and
 (vi) the project only imposes premiums, coinsurance, and other c
ost-sharing consistent with subsection (c).
 (B) The Secretary may waive the requirements of clause (ii) of this 
paragraph with respect to those projects described in subparagraph (B) of paragr
aph (1).
 (3) PERMISSIBLE RESTRICTIONS- A project may limit eligibility to ind
ividuals whose assets are valued below a level specified by the State. For this 
purpose, any evaluation of such assets shall be made in a manner consistent with
 the standards for valuation of assets under the State plan under title XIX of t
he Social Security Act for individuals entitled to assistance under part A of ti
tle IV of such Act. Nothing in this section shall be construed as requiring a St
ate to provide for eligibility for individuals for months before the month in wh
ich such eligibility is first established.
 (4) EXTENSION OF ELIGIBILITY- A project may provide for extension of
 eligibility for medical assistance for individuals covered under the project in
 a manner similar to that provided under section 1925 of the Social Security Act
 to certain families receiving aid pursuant to a plan of the State approved unde
r part A of title IV of such Act.
 (5) WAIVER OF REQUIREMENTS-
 (A) IN GENERAL- Subject to subparagraph (B), the Secretary may w
aive such requirements of title XIX of the Social Security Act (except section 1
903(m) of the Social Security Act) as may be required to provide for additional 
coverage of individuals under projects under this section.
 (B) NONWAIVABLE PROVISIONS- Except with respect to those project
s described in subparagraph (B) of paragraph (1), the Secretary may not waive, u
nder subparagraph (A), the statewideness requirement of section 1902(a)(1) of th
e Social Security Act or the Federal medical assistance percentage specified in 
section 1905(b) of such Act.
 (b) BENEFITS-
 (1) IN GENERAL- Except as provided in this subsection, the amount, d
uration, and scope of medical assistance made available under a project shall be
 the same as the amount, duration, and scope of such assistance made available t
o individuals entitled to medical assistance under the State plan under section 
1902(a)(10)(A)(i) of the Social Security Act.
 (2) LIMITS ON BENEFITS-
 (A) REQUIRED- Except with respect to those projects described in
 subparagraph (B) of paragraph (1), no medical assistance shall be made availabl
e under a project for nursing facility services or community-based long-term car
e services (as defined by the Secretary) or for pregnancy-related services. No m
edical assistance shall be made available under a project to individuals confine
d to a State correctional facility, county jail, local or county detention cente
r, or other State institution.
 (B) PERMISSIBLE- A State, with the approval of the Secretary, ma
y limit or otherwise deny eligibility for medical assistance under the project a
nd may limit coverage of items and services under the project, other than early 
and periodic screening, diagnostic, and treatment services for children under 18
 years of age.
 (3) USE OF UTILIZATION CONTROLS- Nothing in this subsection shall be
 construed as limiting a State's authority to impose controls over utilization o
f services, including preadmission requirements, managed care provisions, use of
 preferred providers, and use of second opinions before surgical procedures.
 (c) PREMIUMS AND COST-SHARING-
 (1) NONE FOR THOSE WITH INCOME BELOW THE POVERTY LINE- Under a proje
ct, there shall be no premiums, coinsurance, or other cost-sharing for individua
ls whose family income level does not exceed 100 percent of the income official 
poverty line (as defined in subsection (g)(1)) applicable to a family of the siz
e involved.
 (2) LIMIT FOR THOSE WITH INCOME ABOVE THE POVERTY LINE- Under a proj
ect, for individuals whose family income level exceeds 100 percent, but is less 
than 150 percent, of the income official poverty line applicable to a family of 
the size involved, the monthly average amount of premiums, coinsurance, and othe
r cost-sharing for covered items and services shall not exceed 3 percent of the 
family's average gross monthly earnings.
 (3) INCOME DETERMINATION- Each project shall provide for determinati
ons of income in a manner consistent with the methodology used for determination
s of income under title XIX of the Social Security Act for individuals entitled 
to benefits under part A of title IV of such Act.
 (d) DURATION- Each project under this section shall commence not later t
han July 1, 1991 and shall be conducted for a 3-year period; except that the Sec
retary may terminate such a project if the Secretary determines that the project
 is not in substantial compliance with the requirements of this section.
 (e) LIMITS ON EXPENDITURES AND FUNDING-
 (1) IN GENERAL- (A) The Secretary in conducting projects shall limit
 the total amount of the Federal share of benefits paid and expenses incurred un
der title XIX of the Social Security Act to no more than $12,000,000 in each of 
fiscal years 1991, 1992, and 1993, and to no more than $4,000,000 in fiscal year
 1994.
 (B) Of the amounts appropriated under subparagraph (A), the Secretar
y shall provide that no more than one-third of such amounts shall be used to car
ry out the projects described in paragraph (1)(B) of subsection (a) (for which t
he statewideness requirement has been waived).
 (2) NO FUNDING OF CURRENT BENEFICIARIES- No funding shall be availab
le under a project with respect to medical assistance provided to individuals wh
o are otherwise eligible for medical assistance under the plan without regard to
 the project.
 (3) NO INCREASE IN FEDERAL MEDICAL ASSISTANCE PERCENTAGE- Payments t
o a State under a project with respect to expenditures made for medical assistan
ce made available under the project may not exceed the Federal medical assistanc
e percentage (as defined in section 1905(b) of the Social Security Act) of such 
expenditures.
 (f) EVALUATION AND REPORT-
 (1) EVALUATIONS- For each project the Secretary shall provide for an
 evaluation to determine the effect of the project with respect to--
 (A) access to, and costs of, health care,
 (B) private health care insurance coverage, and
 (C) premiums and cost-sharing.
 (2) REPORTS- The Secretary shall prepare and submit to Congress an i
nterim report on the status of the projects not later than January 1, 1993, and 
a final report containing such summary together with such further recommendation
s as the Secretary may determine appropriate not later than January 1, 1995.
 (g) DEFINITIONS- In this section:
 (1) The term `income official poverty line' means such line as defin
ed by the Office of Management and Budget and revised annually in accordance wit
h section 673(2) of the Omnibus Budget Reconciliation Act of 1981.
 (2) The term `project' refers to a demonstration project under subse
ction (a).
SEC. 4746. MEDICAID RESPITE DEMONSTRATION PROJECT EXTENDED.
 Section 9414 of the Omnibus Budget Reconciliation Act of 1986 is amended
--
 (1) by amending subsection (e) to read as follows:
 `(e) DURATION- The project under this section may continue until Septemb
er 30, 1992.'; and
 (2) in subsection (d), by striking the last sentence and inserting i
n lieu thereof the following new sentence: `For the period beginning October 1, 
1990, and ending September 30, 1992, Federal payments for the project shall not 
exceed amounts expended under the project in the preceding fiscal year.'.
SEC. 4747. DEMONSTRATION PROJECT TO PROVIDE MEDICAID COVERAGE FOR HIV-POSITIV
E INDIVIDUALS.
 (a) IN GENERAL- Not later than 3 months after the date of the enactment 
of this Act, the Secretary of Health and Human Services (hereafter in this secti
on referred to as the `Secretary') shall provide for 2 demonstration projects to
 be administered by States that submit an application under this section, throug
h programs administered by the States under title XIX of the Social Security Act
. Such demonstration projects shall provide coverage for the services described 
in subsection (c) to individuals whose income and resources do not exceed the ma
ximum allowable amount for eligibility for any individual in any category of dis
ability under the State plan under section 1902 of the Social Security Act, and 
who have tested positive for the presence of HIV virus (without regard to the pr
esence of any symptoms of AIDS or opportunistic diseases related to AIDS).
 (b) SERVICES AVAILABLE UNDER A DEMONSTRATION PROJECT- (1) The medical as
sistance made available to individuals described in section 1902(a)(10)(A) of th
e Social Security Act shall be made available to individuals described in subsec
tion (a) who receive services under a demonstration project under such paragraph
.
 (2) A demonstration project under subsection (a) shall provide services 
in addition to the services described in paragraph (1) which shall be limited on
ly on the basis of medical necessity or the appropriateness of such services. To
 the extent not provided as described in paragraph (1), such additional services
 shall include--
 (A) general and preventative 49
 medical care services (including inpatient, outpatient, residential care, ph
ysician visits, clinic visits, and hospice care);
 49 So in original. Probably should be `preventive'.
 (B) prescription drugs, including drugs for the purposes of preventa
tive health care services;
 (C) counseling and social services;
 (D) substance abuse treatment services (including services for multi
ple substances abusers);
 (E) home care services (including assistance in carrying out activit
ies of daily living);
 (F) case management;
 (G) health education services;
 (H) respite care for caregivers;
 (I) dental services; and
 (J) diagnostic and laboratory services 50
 50 So in original. Probably should be `services.'.
 (c) AGREEMENTS WITH STATES- (1) Each State conducting a demonstration pr
oject under subsection (a) shall enter into an agreement with a hospital and at 
least one other nonprofit organization submitting applications to the State. The
 State shall require that such hospital and other entity have a demonstrated rec
ord of case management of patients who have tested positive for the presence of 
HIV virus and have access to a control group of such type of patients who are no
t receiving State or Federal payments for medical services (or other payments fr
om private insurance coverage) before developing symptoms of AIDS. Under such ag
reement, the State shall agree to pay each such entity for the services provided
 under subsection (b) and not later than 12 months after the commencement of a d
emonstration project, institute a system of monthly payment to each such entity 
based on the average per capita cost of the services described in subsection (c)
 provided to individuals described in paragraphs (1) and (2) of subsection (a).<
/ul>
 (2) A demonstration project described in subsection (a) shall be limited
 to an enrollment of not more than 200 individuals.
 (3) A demonstration project conducted under subsection (a) shall commenc
e not later than 9 months after the date of the enactment of this Act and shall 
terminate on the date that is 3 years after the date of commencement.
 (4)(A) The Secretary shall provide for an evaluation of the comparative 
costs of providing services to individuals who have tested positive for the pres
ence of HIV virus at an early stage after detection of such virus and those that
 are treated at a later stage after such detection.
 (B) The Secretary shall report to Congress on the results of the evaluat
ion conducted under subparagraph (A) no later than 6 months after the date of te
rmination of the demonstration projects described in this section.
 (d) FEDERAL SHARE OF COSTS- The Federal share of the cost of services de
scribed in paragraph (3) furnished under a demonstration project conducted under
 paragraph (1) shall be determined by the otherwise applicable Federal matching 
assistance percentage pursuant to section 1905(b) of the Social Security Act.
 (e) WAIVER OF REQUIREMENTS OF THE SOCIAL SECURITY ACT- The Secretary may
 waive such requirements of the Social Security Act as the Secretary determines 
to be necessary to carry out the purposes of this section.
 (f) LIMITATION ON AMOUNT OF EXPENDITURES- The amount of funds that may b
e expended as medical assistance to carry out the purposes of this section shall
 be $5,000,000 for fiscal year 1991, $12,000,000 for fiscal year 1992, and $13,0
00,000 for fiscal year 1993.
Subpart E--Miscellaneous
SEC. 4751. REQUIREMENTS FOR ADVANCED DIRECTIVES UNDER STATE PLANS FOR MEDICAL
 ASSISTANCE.
 (a) IN GENERAL- Section 1902 (42 U.S.C. 1396a(a)), as amended by section
s 4401(a)(2), 4601(d), 4701(a), 4711(a), and 4722 of this title, is amended--
 (1) in subsection (a)--
 (A) by striking `and' at the end of paragraph (55),
 (B) by striking the period at the end of paragraph (56) and inse
rting `; and', and
 (C) by inserting after paragraph (56) the following new paragrap
hs:
 `(57) provide that each hospital, nursing facility, provider of home
 health care or personal care services, hospice program, or health maintenance o
rganization (as defined in section 1903(m)(1)(A)) receiving funds under the plan
 shall comply with the requirements of subsection (w);
 `(58) provide that the State, acting through a State agency, associa
tion, or other private nonprofit entity, develop a written description of the la
w of the State (whether statutory or as recognized by the courts of the State) c
oncerning advance directives that would be distributed by providers or organizat
ions under the requirements of subsection (w).'; and
 (2) by adding at the end the following new subsection:
 `(w)(1) For purposes of subsection (a)(57) and sections 1903(m)(1)(A) an
d 1919(c)(2)(E), the requirement of this subsection is that a provider or organi
zation (as the case may be) maintain written policies and procedures with respec
t 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 provider's or organization's written policies respecti
ng 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; 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 nursing facility, at the time of the individua
l's admission as a resident,
 `(C) in the case of a provider of home health care or personal care 
services, in advance of the individual coming under the care of the provider,
 `(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 a health maintenance organization, at the time o
f enrollment of the individual with the organization.
 `(3) Nothing in this section shall be construed to prohibit the applicat
ion of a State law which allows for an objection on the basis of conscience for 
any health care provider or any agent of such provider which as a matter of cons
cience cannot implement an advance directive.'. 51
 51 So in original. Probably should be `directive.'.
 `(4) 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. 52
 52 So in original. Probably should be `incapacitated.'.'.
 (b) CONFORMING AMENDMENTS-
 (1) Section 1903(m)(1)(A) (42 U.S.C. 1396b(m)(1)(A)) is amended--
 (A) by inserting `meets the requirement of section 1902(w)' afte
r `which' the first place it appears, and
 (B) by inserting `meets the requirement of section 1902(a) and' 
after `which' the second place it appears.
 (2) Section 1919(c)(2) of such Act (42 U.S.C. 1396r(c)(2)) is amende
d by adding at the end the following new subparagraph:
 `(E) INFORMATION RESPECTING ADVANCE DIRECTIVES- A nursing facili
ty must comply with the requirement of section 1902(w) (relating to maintaining 
written policies and procedures respecting advance directives).'.
 (c) EFFECTIVE DATE- The amendments made by this section shall apply with
 respect to services furnished on or after the first day of the first month begi
nning more than 1 year after the date of the enactment of this Act.
 (d) PUBLIC EDUCATION CAMPAIGN-
 (1) IN GENERAL- The Secretary, no later than 6 months after the date
 of enactment of this section, shall develop and implement a national campaign t
o inform the public of the option to execute advance directives and of a patient
's right to participate and direct health care decisions.
 (2) DEVELOPMENT AND DISTRIBUTION OF INFORMATION- The Secretary shall
 develop or approve nationwide informational materials that would be distributed
 by providers under the requirements of this section, to inform the public and t
he medical and legal profession of each person's right to make decisions concern
ing medical care, including the right to accept or refuse medical or surgical tr
eatment, and the existence of advance directives.
 (3) PROVIDING ASSISTANCE TO STATES- The Secretary shall assist appro
priate State agencies, associations, or other private entities in developing the
 State-specific documents that would be distributed by providers under the requi
rements of this section. The Secretary shall further assist appropriate State ag
encies, associations, or other private entities in ensuring that providers are p
rovided a copy of the documents that are to be distributed under the requirement
s of the section.
 (4) DUTIES OF SECRETARY- The Secretary shall mail information to Soc
ial Security recipients, add a page to the medicare handbook with respect to the
 provisions of this section.
SEC. 4752. IMPROVEMENT IN QUALITY OF PHYSICIAN SERVICES.
 (a) USE OF UNIQUE PHYSICIAN IDENTIFIERS-
 (1) ESTABLISHMENT OF SYSTEM-
 (A) IN GENERAL- Section 1902 (42 U.S.C. 1396a) as amended by sec
tions 4601(d), 4701(a), 4711(a), 4722(a), and 4751(a) is further amended by addi
ng at the end the following new subsection:
 `(x) The Secretary shall establish a system, for implementation by not l
ater than July 1, 1991, which provides for a unique identifier for each physicia
n who furnishes services for which payment may be made under a State plan approv
ed under this title.'.
 (B) DEADLINE AND CONSIDERATIONS- The system established under th
e amendment made by subparagraph (A) may be the same as, or different from, the 
system established under section 9202(g) of the Consolidated Omnibus Budget Reco
nciliation Act of 1985.
 (2) REQUIRING INCLUSION WITH CLAIMS- Section 1903(i) (42 U.S.C. 1396
b(i)), as amended by this title, is amended--
 (A) by striking the period at the end of paragraph (11) and inse
rting `; or', and
 (B) by inserting after paragraph (11) the following new paragrap
h:
 `(12) with respect to any amount expended for physicians' services f
urnished on or after the first day of the first quarter beginning more than 60 d
ays after the date of establishment of the physician identifier system under sec
tion 1902(x), unless the claim for the services includes the unique physician id
entifier provided under such system.'.
 (b) MAINTENANCE OF ENCOUNTER DATA BY HEALTH MAINTENANCE ORGANIZATIONS-
 (1) IN GENERAL- Section 1903(m)(2)(A) (42 U.S.C. 1396b(m)(2)(A)), as
 amended by this title, is amended--
 (A) by striking `and' at the end of clause (ix),
 (B) by striking the period at the end of clause (x) and insertin
g `; and', and
 (C) by adding at the end the following new clause:
 `(xi) such contract provides for maintenance of sufficient patient e
ncounter data to identify the physician who delivers services to patients.'.
 (2) EFFECTIVE DATE- The amendments made by paragraph (1) shall apply
 to contract years beginning after the date of the establishment of the system d
escribed in section 1902(x) of the Social Security Act.
 (c) MAINTENANCE OF LIST OF PHYSICIANS BY STATES-
 (1) IN GENERAL- Section 1902(a) (42 U.S.C. 1396a(a)), as amended by 
this title, is further amended--
 (A) by striking `and' at the end of paragraph (56),
 (B) by striking the period at the end of paragraph (57) and inse
rting `; and', and
 (C) by inserting after paragraph (57) the following new paragrap
h:
 `(58) maintain a list (updated not less often than monthly, and cont
aining each physician's unique identifier provided under the system established 
under subsection (v)) of all physicians who are certified to participate under t
he State plan.'.
 (2) EFFECTIVE DATE- The amendments made by paragraph (1) shall apply
 to medical assistance for calendar quarters beginning more than 60 days after t
he date of establishment of the physician identifier system under section 1902(x
) of the Social Security Act.
 (d) FOREIGN MEDICAL GRADUATE CERTIFICATION-
 (1) PASSAGE OF FMGEMS EXAMINATION IN ORDER TO OBTAIN IDENTIFIER- The
 Secretary of Health and Human Service 53
 shall provide, in the identifier system established under section 1902(x) of
 the Social Security Act, that no foreign medical graduate (as defined in sectio
n 1886(h)(5)(D) of such Act) shall be issued an identifier under such system unl
ess the individual--
 53 So in original. Probably should be `Services'.
 (A) has passed the FMGEMS examination (as defined in section 188
6(h)(5)(E) of such Act);
 (B) has previously received certification from, or has previousl
y passed the examination of, the Educational Commission for Foreign Medical Grad
uates; or
 (C) has held a license from 1 or more States continuously since 
1958.
 (2) EFFECTIVE DATE- Paragraph (1) shall apply with respect to issuan
ce of an identifier applicable to services furnished on or after January 1, 1992
.
 (e) MINIMUM QUALIFICATIONS FOR BILLING FOR PHYSICIANS' SERVICES TO CHILD
REN AND PREGNANT WOMEN- Section 1903(i) (42 U.S.C. 1396b(i)), as amended by this
 title and subsection (a)(2) of this section, is further amended--
 (1) by striking the period at the end of paragraph (13) and insertin
g `; or'; and
 (2) by inserting after paragraph (13) the following new paragraph:
 `(14) with respect to any amount expended for physicians' services f
urnished by a physician on or after January 1, 1992, to--
 `(A) a child under 21 years of age, unless the physician--<
/ul>
 `(i) is certified in family practice or pediatrics by the me
dical specialty board recognized by the American Board of Medical Specialties fo
r family practice or pediatrics,
 `(ii) is employed by, or affiliated with, a Federally-qualif
ied health center (as defined in section 1905(l)(2)(B)),
 `(iii) holds admitting privileges at a hospital participatin
g in a State plan approved under this title,
 `(iv) is a member of the National Health Service Corps,

 `(v) documents a current, formal, consultation and referral 
arrangement with a pediatrician or family practitioner who has the certification
 described in clause (i) for purposes of specialized treatment and admission to 
a hospital, or
 `(vi) has been certified by the Secretary as qualified to pr
ovide physicians' services to a child under 21 years of age; or
 `(B) to a pregnant woman (or during the 60 day period beginning 
on the date of termination of the pregnancy) unless the physician--
 `(i) is certified in family practice or obstetrics by the me
dical specialty board recognized by the American Board of Medical Specialties fo
r family practice or obstetrics,
 `(ii) is employed by, or affiliated with, a Federally-qualif
ied health center (as defined in section 1905(l)(2)(B)),
 `(iii) holds admitting privileges at a hospital participatin
g in a State plan approved under this title,
 `(iv) is a member of the National Health Service Corps,

 `(v) documents a current, formal, consultation and referral 
arrangement with an obstetrician or family practitioner who has the certificatio
n described in clause (i) for purposes of specialized treatment and admission to
 a hospital, or
 `(vi) has been certified by the Secretary as qualified to pr
ovide physicians' services to pregnant women.'.
 (f) REPORTING OF MISCONDUCT OR SUBSTANDARD CARE-
 (1) IN GENERAL- Section 1921(a) (42 U.S.C. 1396r-2(a)) is amended--<
/ul>
 (A) in paragraph (1), in the matter before subparagraph (A), by 
inserting `(or any peer review organization or private accreditation entity revi
ewing the services provided by health care practitioners)' after `health care pr
actitioners'; and
 (B) in paragraph (1), by adding at the end the following new sub
paragraph:
 `(D) Any negative action or finding by such authority, organizat
ion, or entity regarding the practitioner or entity.'.
 (2) EFFECTIVE DATE- The amendments made by paragraph (1) shall apply
 to State information reporting systems as of January 1, 1992, without regard to
 whether or not the Secretary of Health and Human Services has promulgated any r
egulations to carry out such amendments by such date.
SEC. 4753. CLARIFICATION OF AUTHORITY OF INSPECTOR GENERAL.
 Section 1128A(j) (42 U.S.C. 1320a-7a(j)) is amended--
 (1) by striking `(j)' and inserting `(j)(1)'; and
 (2) 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.'.
SEC. 4754. NOTICE TO STATE MEDICAL BOARDS WHEN ADVERSE ACTIONS TAKEN.
 (a) IN GENERAL- Section 1902(a)(41) (42 U.S.C. 1396a(a)(41)) is amended 
by inserting `and, in the case of a physician and notwithstanding paragraph (7),
 the State medical licensing board' after `shall promptly notify the Secretary'.

 (b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to 
sanctions effected more than 60 days after the date of the enactment of this Act
.
SEC. 4755. MISCELLANEOUS PROVISIONS.
 (a) PSYCHIATRIC HOSPITALS-
 (1) CLARIFICATION OF COVERAGE OF INPATIENT PSYCHIATRIC HOSPITAL SERV
ICES-
 (A) IN GENERAL- Section 1905(h)(1)(A) (42 U.S.C. 1396d(h)(1)(A))
, as amended by section 2340(b) of the Deficit Reduction Act of 1984, is amended
 by inserting `or in another inpatient setting that the Secretary has specified 
in regulations' after `1861(f)'.
 (B) EFFECTIVE DATE- The amendment made by subparagraph (A) shall
 be effective as if included in the enactment of the Deficit Reduction Act of 19
84.
 (2) INTERMEDIATE SANCTIONS FOR PSYCHIATRIC HOSPITALS- Section 1902 (
42 U.S.C. 1396a) as amended by this title is further amended by adding at the en
d the following new subsection:
 `(y)(1) In addition to any other authority under State law, where a Stat
e determines that a psychiatric hospital which is certified for participation un
der its plan no longer meets the requirements for a psychiatric hospital (referr
ed to in section 1905(h)) and further finds that the hospital's deficiencies--
 `(A) immediately jeopardize the health and safety of its patients, t
he State shall terminate the hospital's participation under the State plan; or
 `(B) do not immediately jeopardize the health and safety of its pati
ents, the State may terminate the hospital's participation under the State plan,
 or provide that no payment will be made under the State plan with respect to an
y individual admitted to such hospital after the effective date of the finding, 
or both.
 `(2) Except as provided in paragraph (3), if a psychiatric hospital desc
ribed in paragraph (1)(B) has not complied with the requirements for a psychiatr
ic hospital under this title--
 `(A) within 3 months after the date the hospital is found to be out 
of compliance with such requirements, the State shall provide that no payment wi
ll be made under the State plan with respect to any individual admitted to such 
hospital after the end of such 3-month period, or
 `(B) within 6 months after the date the hospital is found to be out 
of compliance with such requirements, no Federal financial participation shall b
e provided under section 1903(a) with respect to further services provided in th
e hospital until the State finds that the hospital is in compliance with the req
uirements of this title.
 `(3) The Secretary may continue payments, over a period of not longer th
an 6 months from the date the hospital is found to be out of compliance with suc
h requirements, if--
 `(A) the State finds that it is more appropriate to take alternative
 action to assure compliance of the hospital with the requirements than to termi
nate the certification of the hospital,
 `(B) the State has submitted a plan and timetable for corrective act
ion to the Secretary for approval and the Secretary approves the plan of correct
ive action, and
 `(C) the State agrees to repay to the Federal Government payments re
ceived under this paragraph if the corrective action is not taken in accordance 
with the approved plan and timetable.'.
 (b) STATE UTILIZATION REVIEW SYSTEMS- Section 9432 of the Omnibus Budget
 Reconciliation Act of 1986 is amended--
 (1) in subsection (a)--
 (A) by inserting `(1)' after `IN GENERAL- ',
 (B) by striking `, during the period' and all that follows throu
gh `Congress,', and
 (C) by adding at the end the following new paragraph:<
/ul>
 `(2) The Secretary may not, during the period beginning on the date of t
he enactment of the Omnibus Budget Reconciliation Act of 1990 and ending on the 
date that is 180 days after the date on which the report required by subsection 
(d) is submitted to the Congress, publish final or interim final regulations req
uiring a State plan approved under title XIX of the Social Security Act to inclu
de a program for ambulatory surgery, preadmission testing, or same-day surgery.'
;
 (2) in subsection (b)(4), by inserting `and subsection (d)' after `I
n this subsection'; and
 (3) by adding at the end the following new subsection:
 `(d) REPORT- The Secretary shall report to Congress, by not later than J
anuary 1, 1993, for each State in a representative sample of States--
 `(1) an analysis of the procedures for which programs for ambulatory
 surgery, preadmission testing, and same-day surgery are appropriate for patient
s who are covered under the State medicaid plan, and
 `(2) the effects of such programs on access of such patients to nece
ssary care, quality of care, and costs of care.
In selecting such a sample of States, the Secretary shall include some St
ates with medicaid plans that include such programs.'.
 (c) ADDITIONAL MISCELLANEOUS PROVISIONS-
 (1) Effective July 1, 1990--
 (A) section 1902(a)(10)(C)(iv) of the Social Security Act is ame
nded by striking `through (20)' and inserting `through (21)', and
 (B) section 1902(j) of such Act is amended by striking `through 
(21)' and inserting `through (22)'.
 (2) Effective as if included in subtitle D of title VI of the Omnibu
s Budget Reconciliation Act of 1989, section 301(j) of the Federal Food, Drug, a
nd Cosmetic Act (21 U.S.C. 331(j)) is amended by adding at the end the following
: `This paragraph does not authorize the withholding of information from either 
House of Congress or from, to the extent of matter within its jurisdiction, any 
committee or subcommittee of such committee or any joint committee of Congress o
r any subcommittee of such joint committee.'.
 (3) Section 505(b) (42 U.S.C. 705(b)) is amended in the matter prece
ding paragraph (1) by striking `requirement' and inserting `requirements'.<
/ul>
PART 5--PROVISIONS RELATING TO NURSING HOME REFORM
SEC. 4801. TECHNICAL CORRECTIONS RELATING TO NURSING HOME REFORM.
 (a) NURSE AIDE TRAINING AND COMPETENCY EVALUATION-
 (1) NO COMPLIANCE ACTIONS BEFORE EFFECTIVE DATE OF GUIDELINES- The S
ecretary of Health and Human Services shall not take (and shall not continue) an
y action against a State under section 1904 of the Social Security Act on the ba
sis of the State's failure to meet the requirement of section 1919(e)(1)(A) of s
uch Act before the effective date of guidelines, issued by the Secretary, establ
ishing requirements under section 1919(f)(2)(A) of such Act, if the State demons
trates to the satisfaction of the Secretary that it has made a good faith effort
 to meet such requirement before such effective date.
 (2) PART-TIME NURSE AIDES NOT ALLOWED DELAY IN TRAINING- Section 191
9(b)(5)(A) (42 U.S.C. 1396r(b)(5)(A)) is amended--
 (i) by striking `A nursing facility' and inserting `(i) Except a
s provided in clause (ii), a nursing facility';
 (ii) by striking `(on a full-time, temporary, per diem, or other
 basis) 54
 and inserting `on a full-time basis';
 54 So in original. Probably should be `basis)'.
 (iii) by striking `(i)' and `(ii)' and inserting `(I)' and `(II)
'; and
 (iv) by adding at the end the following:
 `(ii) A nursing facility must not use on a temporary, per diem, 
leased, or on any other basis other than as a permanent employee any individual 
as a nurse aide in the facility on or after January 1, 1991, unless the individu
al meets the requirements described in clause (i).'.
 (3) REQUIREMENT TO OBTAIN INFORMATION FROM NURSE AIDE REGISTRY- Sect
ion 1919(b)(5)(C) (42 U.S.C. 1396r(b)(5)(C)) is amended by striking `the State r
egistry established under subsection (e)(2)(A) as to information in the registry
' and inserting `any State registry established under subsection (e)(2)(A) that 
the facility believes will include information'.
 (4) RETRAINING OF NURSE AIDES- Section 1919(b)(5)(D) (42 U.S.C. 1396
r(b)(5)(D)) is amended by striking the period at the end and inserting `, or a n
ew competency evaluation program.'.
 (5) CLARIFICATION OF NURSE AIDES NOT SUBJECT TO CHARGES- Section 191
9(f)(2)(A)(iv) (42 U.S.C. 1396r(f)(2)(A)(iv)) is amended--
 (A) in subclause (I), by striking `and' at the end;
 (B) in subclause (II), by inserting after `nurse aide' the follo
wing: `who is employed by (or who has received an offer of employment from) a fa
cility on the date on which the aide begins either such program';
 (C) in subclause (II), by striking the period at the end and ins
erting `, and'; and
 (D) 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
.'.
 (6) MODIFICATION OF NURSING FACILITY DEFICIENCY STANDARDS-
 (A) IN GENERAL- Section 1919(f)(2)(B)(iii)(I) (42 U.S.C. 1396r(f
)(2)(B)(iii)(I)) is amended to read as follows:
 `(I) offered by or in a nursing facility which, within t
he previous 2 years--
 `(a) has operated under a waiver under subsection (b)(4)(C)(ii) that
 was granted on the basis of a demonstration that the facility is unable to prov
ide the nursing care required under subsection (b)(4)(C)(i) for a period in exce
ss of 48 hours during a week;
 `(b) has been subject to an extended (or partial extended) survey un
der section 1819(g)(2)(B)(i) or subsection (g)(2)(B)(i); or
 `(c) has been assessed a civil money penalty described in section 18
19(h)(2)(B)(ii) or subsection (h)(2)(A)(ii) of not less than $5,000, or has been
 subject to a remedy described in subsection (h)(1)(B)(i), clauses (i), (iii), o
r (iv) of subsection (h)(2)(A), clauses (i) or (iii) of section 1819(h)(2)(B), o
r section 1819(h)(4), or'.
 (B) EFFECTIVE DATE- The amendments made by subparagraph (A) shal
l take effect as if included in the enactment of the Omnibus Budget Reconciliati
on Act of 1987, except that a State may not approve a training and competency ev
aluation program or a competency evaluation program offered by or in a nursing f
acility which, pursuant to any Federal or State law within the 2-year period beg
inning on October 1, 1988--
 (i) had its participation terminated under title XVIII of th
e Social Security Act or under the State plan under title XIX of such Act;<
/ul>
 (ii) was subject to a denial of payment under either such ti
tle;
 (iii) was assessed a civil money penalty not less than $5,00
0 for deficiencies in nursing facility standards;
 (iv) operated under a temporary management appointed to over
see the operation of the facility and to ensure the health and safety of the fac
ility's residents; or
 (v) pursuant to State action, was closed or had its resident
s transferred.
 (7) CLARIFICATION OF STATE RESPONSIBILITY TO DETERMINE COMPETENCY- S
ection 1919(f)(2)(B) (42 U.S.C. 1396r(f)(2)(B)) is amended in the second sentenc
e by inserting `(through subcontract or otherwise)' after `may not delegate'.
 (8) EXTENSION OF ENHANCED MATCH RATE UNTIL OCTOBER 1, 1990- Section 
1903(a)(2)(B) (42 U.S.C. 1396b(a)(2)(B)) is amended by striking `July 1, 1990' a
nd inserting `October 1, 1990'.
 (9) EFFECTIVE DATE- Except as provided in paragraph (6), the amendme
nts made by this subsection shall take effect as if they were included in the en
actment of the Omnibus Budget Reconciliation Act of 1987.
 (b) PREADMISSION SCREENING AND ANNUAL RESIDENT REVIEW-
 (1) NO COMPLIANCE ACTIONS BEFORE EFFECTIVE DATE OF GUIDELINES- The S
ecretary of Health and Human Services shall not take (and shall not continue) an
y action against a State under section 1904 or section 1919(e)(7)(D) of the Soci
al Security Act on the basis of the State's failure to meet the requirement of s
ection 1919(e)(7)(A) of such Act before the effective date of guidelines, issued
 by the Secretary, establishing minimum criteria under section 1919(f)(8)(A) of 
such Act, if the State demonstrates to the satisfaction of the Secretary that it
 has made a good faith effort to meet such requirement before such effective dat
e.
 (2) CLARIFICATION WITH RESPECT TO ADMISSIONS AND READMISSION FROM A 
HOSPITAL- Section 1919 of the Social Security Act (42 U.S.C. 1396r) is amended--

 (A) in subsection (b)(3)(F), by striking `A nursing facility' an
d by inserting `Except as provided in clauses (ii) and (iii) of subsection (e)(7
)(A), a nursing facility'; and
 (B) in subsection (e)(7)(A)--
 (i) by redesignating the first 2 sentences as clause (i) wit
h the following heading (and appropriate indentation):
 `(i) IN GENERAL- ', and
 (ii) by adding at the end the following:
 `(ii) CLARIFICATION WITH RESPECT TO CERTAIN READMISSIONS- Th
e preadmission screening program under clause (i) need not provide for determina
tions in the case of the readmission to a nursing facility of an individual who,
 after being admitted to the nursing facility, was transferred for care in a hos
pital.
 `(iii) EXCEPTION FOR CERTAIN HOSPITAL DISCHARGES- The preadm
ission screening program under clause (i) shall not apply to the admission to a 
nursing facility of an individual--
 `(I) who is admitted to the facility directly from a hos
pital after receiving acute inpatient care at the hospital,<
/ul>
 `(II) who requires nursing facility services for the con
dition for which the individual received care in the hospital, and
 `(III) whose attending physician has certified, before a
dmission to the facility, that the individual is likely to require less than 30 
days of nursing facility services.'.
 (3) DENIAL OF PAYMENTS FOR CERTAIN RESIDENTS NOT REQUIRING NURSING F
ACILITY SERVICES- Section 1919(e)(7) (42 U.S.C. 1395r(e)(7)) is amended--
 (A) in subparagraph (D)--
 (i) in the heading, by striking `WHERE FAILURE TO CONDUCT PR
EADMISSION SCREENING',
 (ii) by designating the first sentence as clause (i) with th
e following heading (and appropriate indentation):
 `(i) FOR FAILURE TO CONDUCT PREADMISSION SCREENING OR ANNUAL
 REVIEW- ', and
 (iii) by adding at the end the following new clause:
 `(ii) FOR CERTAIN RESIDENTS NOT REQUIRING NURSING FACILITY L
EVEL OF SERVICES- No payment may be made under section 1903(a) with respect to n
ursing facility services furnished to an individual (other than an individual de
scribed in subparagraph (C)(i)) who does not require the level of services provi
ded by a nursing facility.'; and
 (B) in subparagraph (E), by striking `the requirement of this pa
ragraph' and inserting `the requirements of subparagraphs (A) through (C) of thi
s paragraph'.
 (4) NO DELEGATION OF AUTHORITY TO CONDUCT SCREENING AND REVIEWS- Sec
tion 1919 is further amended--
 (A) in subsection (b)(3)(F), by adding at the end the following:
 `A State mental health authority and a State mental retardation or developmenta
l disability authority may not delegate (by subcontract or otherwise) their resp
onsibilities under this subparagraph to a nursing facility (or to an entity that
 has a direct or indirect affiliation or relationship with such a facility).'; a
nd
 (B) in subsection (e)(7)(B), by adding at the end the following 
new clause:
 `(iv) PROHIBITION OF DELEGATION- A State mental health autho
rity, a State mental retardation or developmental disability authority, and a St
ate may not delegate (by subcontract or otherwise) their responsibilities under 
this subparagraph to a nursing facility (or to an entity that has a direct or in
direct affiliation or relationship with such a facility).'.
 (5) ANNUAL REPORTS-
 (A) STATE REPORTS- Section 1919(e)(7)(C) (42 U.S.C. 1396r(e)(7)(
C)) is amended by adding at the end the following new clause:
 `(iv) ANNUAL REPORT- Each State shall report to the Secretar
y annually concerning the number and disposition of residents described in each 
of clauses (ii) and (iii).'.
 (B) SECRETARIAL REPORT- Section 4215 of the Omnibus Budget Recon
ciliation Act of 1987 is amended by adding at the end the following new sentence
: `Each such report shall also include a summary of the information reported by 
States under section 1919(e)(7)(C)(iv) of such Act.'.
 (6) REVISION OF ALTERNATIVE DISPOSITION PLANS- Section 1919(e)(7)(E)
 (42 U.S.C. 1396r(e)(7)(E)) is amended by adding at the end the following: `The 
State may revise such an agreement, subject to the approval of the Secretary, be
fore October 1, 1991, but only if, under the revised agreement, all residents su
bject to the agreement who do not require the level of services of such a facili
ty are discharged from the facility by not later than April 1, 1994.'.
 (7) DEFINITION OF MENTALLY ILL- Section 1919(e)(7)(G)(i) (42 U.S.C. 
1396r(e)(7)(G)(i)) is amended--
 (A) by striking `primary or secondary' and all that follows thro
ugh `3rd edition)' and inserting `serious mental illness (as defined by the Secr
etary in consultation with the National Institute of Mental Health)',<
/ul>
 (B) by inserting before the period `or a diagnosis (other than a
 primary diagnosis) of dementia and a primary diagnosis that is not a serious me
ntal illness'.
 (8) SUBSTITUTION OF `SPECIALIZED SERVICES' FOR `ACTIVE TREATMENT'- S
ections 1919(b)(3)(F) and 1919(e)(7) (42 U.S.C. 1396r(b)(3)(F), 1396r(e)(7)) are
 each amended by striking `active treatment' and `ACTIVE TREATMENT' each place e
ither appears and inserting `specialized services' and `SPECIALIZED SERVICES', r
espectively.
 (9) EFFECTIVE DATES-
 (A) IN GENERAL- Except as provided in subparagraph (B), the amen
dments made by this subsection shall take effect as if they were included in the
 enactment of the Omnibus Budget Reconciliation Act of 1987.
 (B) EXCEPTION- The amendments made by paragraphs (4), (6), and (
8) shall take effect on the date of the enactment of this Act, without regard to
 whether or not regulations to implement such amendments have been promulgated.<
/ul>
 (c) ENFORCEMENT PROCESS- The Secretary of Health and Human Services shal
l not take (and shall not continue) any action against a State under section 190
4 of the Social Security Act on the basis of the State's failure to meet the req
uirements of section 1919(h)(2) of such Act before the effective date of guideli
nes, issued by the Secretary, regarding the establishment of remedies by the Sta
te under such section, if the State demonstrates to the satisfaction of the Secr
etary that it has made a good faith effort to meet such requirements before such
 effective date.
 (d) SUPERVISION OF HEALTH CARE OF RESIDENTS OF NURSING FACILITIES BY NUR
SE PRACTITIONERS, CLINICAL NURSE SPECIALISTS, AND PHYSICIAN ASSISTANTS ACTING IN
 COLLABORATION WITH PHYSICIANS-
 (1) IN GENERAL- Section 1919(b)(6)(A) (42 U.S.C. 1396r(b)(6)(A)) is 
amended by inserting `(or, at the option of a State, under the supervision of a 
nurse practitioner, clinical nurse specialist, or physician assistant who is not
 an employee of the facility but who is working in collaboration with a physicia
n)' after `physician'.
 (2) EFFECTIVE DATE- The amendment made by paragraph (1) applies with
 respect to nursing facility services furnished on or after October 1, 1990, wit
hout regard to whether or not final regulations to carry out such amendment have
 been promulgated by such date.
 (e) OTHER AMENDMENTS-
 (1) ASSURANCE OF APPROPRIATE PAYMENT AMOUNTS-
 (A) IN GENERAL- Section 1902(a)(13)(A) (42 U.S.C. 1396a(a)(13)(A
)) is amended by inserting `(including the costs of services required to attain 
or maintain the highest practicable physical, mental, and psychosocial well-bein
g of each resident eligible for benefits under this title)' after `take into acc
ount the costs'.
 (B) DETAILS IN PLAN AMENDMENT- Section 4211(b)(2) of the Omnibus
 Budget Reconciliation Act of 1987 is amended by inserting after the first sente
nce the following: `Each such amendment shall include a detailed description of 
the specific methodology to be used in determining the appropriate adjustment in
 payment amounts for nursing facility services.'.
 (2) DISCLOSURE OF INFORMATION OF QUALITY ASSESSMENT AND ASSURANCE CO
MMITTEES- Section 1919(b)(1)(B) (42 U.S.C. 1396r(b)(1)(B)) is amended by adding 
at the end the following new sentence: `A State or the Secretary may not require
 disclosure of the records of such committee except insofar as such disclosure i
s related to the compliance of such committee with the requirements of this subp
aragraph.'.
 (3) PERIOD FOR RESIDENT ASSESSMENT- Section 1919(b)(3)(C)(i)(I) (42 
U.S.C. 1396r(b)(3)(C)(i)(I)) is amended by striking `4 days' and inserting `not 
later than 14 days'.
 (4) CLARIFICATION OF RESPONSIBILITY FOR SERVICES FOR MENTALLY ILL AN
D MENTALLY RETARDED RESIDENTS- Section 1919(b)(4)(A) (42 U.S.C. 1396r(b)(4)(A)) 
is amended--
 (A) by striking `and' at the end of clause (v),
 (B) by striking the period at the end of clause (vi) and inserti
ng `; and', and
 (C) by inserting after clause (vi) the following new clause:
 `(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.'.
 (5) CLARIFICATION OF EXTENT OF STATE WAIVER AUTHORITY; NOTIFICATION 
OF WAIVERS- Section 1919(b)(4)(C)(ii) (42 U.S.C. 1396r(b)(4)(C)(ii)) is amended-
-
 (A) by striking `A State' and all that follows through `a facili
ty if' and inserting `To the extent that a facility is unable to meet the requir
ements of clause (i), a State may waive such requirements with respect to the fa
cility if';
 (B) by striking `and' at the end of subclause (II);
 (C) by striking the period at the end of subclause (III) and ins
erting a comma; and
 (D) by adding at the end the following new subclauses:

 `(IV) the State agency granting a waiver of such require
ments provides notice of the waiver to the State long-term care ombudsman (estab
lished under section 307(a)(12) of the Older Americans Act of 1965) and the prot
ection and advocacy system in the State for the mentally ill and the mentally re
tarded, and
 `(V) the nursing facility that is granted such a waiver 
by a State notifies residents of the facility (or, where appropriate, the guardi
ans or legal representatives of such residents) and members of their immediate f
amilies of the waiver.'.
 (6) CLARIFICATION OF DEFINITION OF NURSE AIDE- Section 1919(b)(5)(F)
(i) (42 U.S.C. 1396r(b)(5)(F)(i)) is amended by striking `(G)),' and inserting `
(G)) or a registered dietician,'.
 (7) CHARGES APPLICABLE IN CASES OF CERTAIN MEDICAID-ELIGIBLE INDIVID
UALS-
 (A) IN GENERAL- Section 1919(c) (42 U.S.C. 1396r(c)) is amended-
-
 (i) by redesignating paragraph (7) as paragraph (8); and
 (ii) by inserting after paragraph (6) the following new para
graph:
 `(7) LIMITATION ON CHARGES IN CASE OF MEDICAID-ELIGIBLE INDIVIDUALS-

 `(A) IN GENERAL- A nursing facility may not impose charges, for 
certain medicaid-eligible individuals for nursing facility services covered by t
he State under its plan under this title, that exceed the payment amounts establ
ished by the State for such services under this title.
 `(B) CERTAIN MEDICAID INDIVIDUALS DEFINED- In subparagraph (A), 
the term `certain medicaid-eligible individual' means an individual who is entit
led to medical assistance for nursing facility services in the facility under th
is title but with respect to whom such benefits are not being paid because, in d
etermining the amount of the individual's income to be applied monthly to paymen
t for the costs of such services, the amount of such income exceeds the payment 
amounts established by the State for such services under this title.'.

 (B) EFFECTIVE DATE- The amendments made by subparagraph (A) shal
l take effect on the date of the enactment of this Act, without regard to whethe
r or not regulations to implement such amendments have been promulgated.
 (8) RESIDENTS' RIGHTS TO REFUSE INTRA-FACILITY TRANSFERS TO MOVE THE
 RESIDENT TO A MEDICARE-QUALIFIED PORTION- Section 1919(c)(1)(A) (42 U.S.C. 1396
r(c)(1)(A)) is amended--
 (A) by redesignating clause (x) as clause (xi) and by inserting 
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 not a skilled nursing
 facility (for purposes of title XVIII) to a portion of the facility that is suc
h a skilled nursing facility.'; and
 (B) by adding at the end the following: `A resident's exercise o
f a right to refuse transfer under clause (x) shall not affect the resident's el
igibility or entitlement to medical assistance under this title or a State's ent
itlement to Federal medical assistance under this title with respect to services
 furnished to such a resident.'.
 (9) RESIDENT ACCESS TO CLINICAL RECORDS- Section section 55
 1919(c)(1)(A)(iv) (42 U.S.C. 1396r(c)(1)(A)(iv)) is amended by inserting bef
ore the period at the end the following: `and to access to current clinical reco
rds of the resident upon request by the resident or the resident's legal represe
ntative, within 24 hours (excluding hours occurring during a weekend or holiday)
 after making such a request'.
 55 So in original. Probably should be `Section 1919(c)(1)(A)(iv)'.
 (10) INCLUSION OF STATE NOTICE OF RIGHTS IN FACILITY NOTICE OF RIGHT
S- Section 1919(c)(1)(B)(ii) (42 U.S.C. 1396r(c)(1)(B)(ii)) is amended by insert
ing `including the notice (if any) of the State developed under subsection (e)(6
)' after `in such rights)'.
 (11) REMOVAL OF DUPLICATIVE REQUIREMENT FOR QUALIFICATIONS OF NURSIN
G HOME ADMINISTRATORS- Effective on the date on which the Secretary promulgates 
standards regarding the qualifications of nursing facility administrators under 
section 1919(f)(4) of the Social Security Act--
 (A) paragraph (29) of section 1902(a) of such Act (42 U.S.C. 139
6a(a)) is repealed; and
 (B) section 1908 of such Act (42 U.S.C. 1396g) is repealed.

 (12) CLARIFICATION OF NURSE AIDE REGISTRY REQUIREMENTS- Section 1919
(e)(2) (42 U.S.C. 1396r(e)(2)) is amended--
 (A) in subparagraph (A), by striking the period and inserting th
e following: `, or any individual described in subsection (f)(2)(B)(ii) or in su
bparagraph (B), (C), or (D) of section 6901(b)(4) of the Omnibus Budget Reconcil
iation Act of 1989.'; and
 (B) 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).'.
 (13) CLARIFICATION ON FINDINGS OF NEGLECT- Section 1919(g)(1)(C) (42
 U.S.C. 1396r(g)(1)(C)) is amended by adding at the end the following: `A State 
shall not make a finding that an individual has neglected a resident if the indi
vidual demonstrates that such neglect was caused by factors beyond the control o
f the individual.'.
 (14) TIMING OF PUBLIC DISCLOSURE OF SURVEY RESULTS- Section 1919(g)(
5)(A)(i) (42 U.S.C. 1396r(g)(5)(A)(i)) is amended by striking `deficiencies and 
plans' and inserting `deficiencies, within 14 calendar days after such informati
on is made available to those facilities, and approved plans'.
 (15) OMBUDSMAN PROGRAM COORDINATION WITH STATE SURVEY AND CERTIFICAT
ION AGENCIES- Section 1919(g)(5)(B) (42 U.S.C. 1396r(g)(5)(B)) is amended by str
iking `with respect' and inserting `or of any adverse action taken against a nur
sing facility under paragraphs (1), (2), or (3) of subsection (h), with respect'
.
 (16) DENIAL OF PAYMENT OF LEGAL FEES FOR FRIVOLOUS LITIGATION-<
/ul>
 (A) IN GENERAL- Section 1903(i) (42 U.S.C. 1396b(i)), [[as amend
ed by section X???(a)(1)(B) of this Act]], is amended--
 (i) by striking `or' at the end of paragraph (9);<
/ul>
 (ii) by striking the period at the end of paragraph (10) and
 inserting `; or'; and
 (iii) by inserting after paragraph (10) the following new pa
ragraph:
 `(11) with respect to any amount expended to reimburse (or otherwise
 compensate) a nursing facility for payment of legal expenses associated with an
y action initiated by the facility that is dismissed on the basis that no reason
able legal ground existed for the institution of such action.'
 (B) EFFECTIVE DATE- The amendments made by subparagraph (A) shal
l apply with respect to actions initiated on or after the date of the enactment 
of this Act.
 (17) PROVISIONS RELATING TO STAFFING REQUIREMENTS-
 (A) 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
919(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.
 (B) STUDY ON STAFFING REQUIREMENTS IN NURSING FACILITIES- The Se
cretary shall conduct a study and report to Congress no later than January 1, 19
92, on the appropriateness of establishing minimum caregiver to resident ratios 
and minimum supervisor to caregiver ratios for skilled nursing facilities servin
g as providers of services under title XVIII of the Social Security Act and nurs
ing facilities receiving payments under a State plan under title XIX of the Soci
al Security Act, and shall include in such study recommendations regarding appro
priate minimum ratios.
 (18) STATE REQUIREMENTS RELATING TO PROGRAMS- Amend 1919(e)(1)(A) to
 strike `under clause (i) or (ii) of subsection (f)(2)(A) and insert `under subs
ection (f)(2)'.
 (19) EFFECTIVE DATES- Except as provided in paragraphs (7), (11), an
d (16), 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.
TITLE V--INCOME SECURITY, HUMAN RESOURCES, AND RELATED PROGRAMS
Subtitle A--Human Resource and Family Policy Amendments
SEC. 5001. TABLE OF CONTENTS.
Sec. 5001. Table of contents.
Sec. 5002. Amendment of Social Security Act.
Chapter 1--Child Support Enforcement
Sec. 5011. Extension of IRS intercept for non-AFDC families.
Sec. 5012. Extension of Commission on Interstate Child Support.<
/ul>
Sec. 5013. Child support enforcement waiver.
Chapter 2--Unemployment Compensation
Sec. 5021. `Reed Act' provisions made permanent.
Chapter 3--Supplemental Security Income
Sec. 5031. Exclusion from income and resources of victims' compensation payme
nts.
Sec. 5032. Attainment of age 65 not to serve as basis for termination of elig
ibility under section 1619(b).
Sec. 5033. Exclusion from income of impairment-related work expenses.
Sec. 5034. Treatment of royalties and honoraria as earned income.
Sec. 5035. Certain State relocation assistance excluded from SSI income and r
esources.
Sec. 5036. Evaluation of child's disability by pediatrician or other qualifie
d specialist.
Sec. 5037. Reimbursement for vocational rehabilitation services furnished dur
ing certain months of nonpayment of SSI benefits.
Sec. 5038. Extension of period of presumptive eligibility for benefits.
Sec. 5039. Continuing disability or blindness reviews not required more than 
once annually.
Sec. 5040. Concurrent SSI and food stamp applications by institutionalized in
dividuals.
Sec. 5041. Notification of certain individuals eligible to receive retroactiv
e benefits.
Chapter 4--Aid to Families with Dependent Children
Sec. 5051. Optional monthly reporting and retrospective budgeting.
Sec. 5052. Children receiving foster care maintenance or adoption assistance 
payments not treated as member of family unit for purposes of determining eligib
ility for, or amount of, AFDC benefit.
Sec. 5053. Elimination of term `legal guardian'.
Sec. 5054. Reporting of child abuse and neglect.
Sec. 5055. Disclosure of information about AFDC applicants and recipients aut
horized for purposes directly connected to State foster care and adoption assist
ance programs.
Sec. 5056. Repatriation.
Sec. 5057. Technical amendment to National Commission on Children.
Sec. 5058. Extension of prohibition against implementation of proposed regula
tions on emergency assistance and AFDC special needs.
Sec. 5059. Amendments to Minnesota Family Investment Plan demonstration.
Sec. 5060. Good cause exception to required cooperation for transitional chil
d care benefits.
Sec. 5061. Technical corrections regarding penalty for failure to participate
 in JOBS program.
Sec. 5062. Technical corrections regarding AFDC-UP eligibility requirements.
Sec. 5063. Family Support Act demonstration projects.
Sec. 5064. Study of JOBS programs operated by Indian Tribes and Alaska Native
 organizations.
Chapter 5--Child Welfare and Foster Care
Sec. 5071. Accounting for administrative costs.
Sec. 5072. Section 427 triennial reviews.
Sec. 5073. Independent living initiatives.
Chapter 6--Child Care
Sec. 5081. Grants to States for child care.
Sec. 5082. Child care and development block grant.
SEC. 502. AMENDMENT OF SOCIAL SECURITY ACT.
 Except as otherwise expressly provided, wherever in this subtitle an ame
ndment or repeal is expressed in terms of an amendment to, or repeal of, a secti
on or other provision, the reference shall be considered to be made to a section
 or other provision of the Social Security Act.
CHAPTER 1--CHILD SUPPORT ENFORCEMENT
SEC. 5011. EXTENSION OF IRS INTERCEPT FOR NON-AFDC FAMILIES.
 (a) AUTHORITY OF STATES TO REQUEST WITHHOLDING OF FEDERAL TAX REFUNDS FR
OM PERSONS OWING PAST DUE CHILD SUPPORT- Section 464(a)(2)(B) (42 U.S.C. 664(a)(
2)(B)) is amended by striking `, and before January 1, 1991'.
 (b) WITHHOLDING OF FEDERAL TAX REFUNDS AND COLLECTION OF PAST DUE CHILD 
SUPPORT ON BEHALF OF DISABLED CHILD OF ANY AGE, AND OF SPOUSAL SUPPORT INCLUDED 
IN ANY CHILD SUPPORT ORDER- Section 464(c) (42 U.S.C. 664(c)) is amended--
 (1) in paragraph (2), by striking `minor child.' and inserting `qual
ified child (or a qualified child and the parent with whom the child is living i
f the same support order includes support for the child and the parent).'; and
 (2) by adding at the end the following:
 `(3) For purposes of paragraph (2), the term `qualified child' means a c
hild--
 `(A) who is a minor; or
 `(B)(i) who, while a minor, was determined to be disabled under titl
e II or XVI; and
 `(ii) for whom an order of support is in force.'.
 (c) EFFECTIVE DATE- The amendments made by subsection (b) shall take eff
ect on January 1, 1991.
SEC. 5012. EXTENSION OF COMMISSION ON INTERSTATE CHILD SUPPORT.
 (a) REAUTHORIZATION- Section 126 of the Family Support Act of 1988 (42 U
.S.C. 666 note; Public Law 100-485) is amended--
 (1) in subsection (d)--
 (A) in paragraph (1), by striking `1990' and inserting `1991'; a
nd
 (B) in paragraph (2), by striking `1991' and inserting `1992';
 (2) in subsection (e), by adding at the end the following:
 `(5)(A) Individuals may be appointed to serve the Commission without reg
ard to the provisions of title 5 that govern appointments in the competitive ser
vice, without regard to the competitive service, and without regard to the class
ification system in chapter 53 of title 5, United States Code. The chairman of t
he Commission may fix the compensation of the Executive Director at a rate that 
shall not exceed the maximum rate of the basic pay payable under GS-18 of the Ge
neral Schedule as contained in title 5, United States Code.
 `(B) The Executive Director may appoint and fix the compensation of such
 additional personnel as the Executive Director considers necessary to carry out
 the duties of the Commission. Such personnel may be appointed without regard to
 the provisions of title 5, United States Code, governing appointments in the co
mpetitive service, and may be paid without regard to the provisions of chapter 5
1 and subchapter III of chapter 53 of such title relating to classification and 
General Schedule pay rates.
 `(C) On the request of the chairman, the head of any Federal department 
or agency may detail, on a reimbursable basis, any of the personnel of such agen
cy to the Commission to assist the Commission in carrying out its duties under t
his section without regard to section 3341 of title 5, United States Code.'; and

 (3) in subsection (f)(1), by striking `1991' and inserting `1992'.
 (b) EFFECTIVE DATE- The amendments made by subsection (a) shall take eff
ect on the date of the enactment of this Act.
SEC. 5013. CHILD SUPPORT ENFORCEMENT WAIVER.
 (a) IN GENERAL- The Secretary of Health and Human Services (in this sect
ion referred to as the `Secretary') shall enter into an agreement with the State
 of Texas waiving (with respect to cases where a court has issued an order for c
hild support) the following requirements under the State plan for child and spou
sal support that are described in subparagraphs (A) and (B) of section 454(6) of
 the Social Security Act, with respect to a project, based in the county of Bexa
r, of delinquency monitoring for child support enforcement:
 (1) The submission of a written application by an individual request
ing child support collection services.
 (2) The payment of an application fee with respect to an application
 for such services.
 (b) CONTENTS OF WAIVER AGREEMENT- In the agreement between the Secretary
 and the State of Texas described in subsection (a), the waiver granted under su
ch agreement shall provide the following:
 (1) The waiver shall apply only with respect to the provision of chi
ld support collection services.
 (2) Before the provision of any child support collection services, t
he organizational unit designated under section 454(3) of the Social Security Ac
t (in this section referred to as the `State agency') shall provide written noti
fication to each custodial parent of the right of such parent to refuse such ser
vices.
 (3) The State shall ensure that, to the extent possible, each parent
 of the child on behalf of whom such services are provided (regardless of whethe
r such parent is a custodial parent) is to receive written notice at the time su
ch services are provided, explaining--
 (A) the legal rights of parents with respect to the child suppor
t collection services provided; and
 (B) the responsibilities of the State agency in providing such c
hild support collection services (including the monitoring of delinquent child s
upport payments).
 (4) A case record shall be deemed to have been established by the St
ate agency upon notification of a custodial parent of the option to receive the 
child support enforcement services described in this subsection.
 (5) Any period of enforcement by the State agency under this section
 with respect to the collection of delinquent child support payments shall be de
emed to begin on the first day of any such delinquency.
 (d) STUDY AND REPORT-
 (1) STUDY REQUIRED- As a condition precedent to granting the waiver 
described in subsection (a), the State agency shall agree to conduct a study of 
the cost-effectiveness to the Federal Government and to the State of Texas of th
e monitoring of delinquent child support payments under the State plan under sec
tion 454 of the Social Security Act.
 (2) CONDUCT OF STUDY-
 (A) IN GENERAL- The study required by paragraph (1) shall be con
ducted in accordance with the criteria established by the Secretary in accordanc
e with subparagraph (B).
 (B) CRITERIA- Not later than February 1, 1991, the Secretary sha
ll establish the criteria required by subparagraph (A), in consultation with--
 (i) 1 or more representatives of organizations representing 
child support administrators;
 (ii) 1 or more representatives of the General Accounting Off
ice;
 (iii) 1 or more representatives of the State of Texas; and
 (iv) such other individuals or organizations with experience
 in the evaluation of child support programs, as the Secretary may designate.
 (3) REPORT- Not later than 3 months after the expiration of the waiv
er described in subsection (a), the State agency shall submit to the Secretary a
nd to the Congress a report that includes the findings of the study required by 
this subsection.
 (e) DURATION OF WAIVER- The waiver described in subsection (a) shall be 
effective for not more than 2 years.
 (f) MATCHING PAYMENTS-
 (1) GENERAL EXPENDITURES- In lieu of any payment under section 455 o
f the Social Security Act with respect to expenditures of the State of Texas to 
carry out child support enforcement programs with respect to which the waiver de
scribed in subsection (a) applies, the Secretary shall pay the State an amount e
qual to the lesser of--
 (A) 66 percent of such expenditures; or
 (B) $500,000.
 (2) STUDY EXPENDITURES- In lieu of any payment under section 455 of 
the Social Security Act with respect to expenditures of the State of Texas to ca
rry out the study required by subsection (d), the Secretary shall pay the State 
an amount equal to 66 percent of such expenditures.
CHAPTER 2--UNEMPLOYMENT COMPENSATION
SEC. 5021. AMOUNTS TRANSFERRED TO STATE UNEMPLOYMENT COMPENSATION PROGRAM ACC
OUNTS.
 (a) ALLOCATION OF AMOUNTS- Paragraph (2) of section 903(a) (42 U.S.C. 11
03(a)(2)) is amended to read as follows:
 `(2) Each State's share of the funds to be transferred under this subsec
tion as of any October 1--
 `(A) shall be determined by the Secretary of Labor and certified by 
such Secretary to the Secretary of the Treasury before such date, and
 `(B) shall bear the same ratio to the total amount to be so transfer
red as--
 `(i) the amount of wages subject to tax under section 3301 of th
e Internal Revenue Code of 1986 during the preceding calendar year which are det
ermined by the Secretary of Labor to be attributable to the State, bears to

 `(ii) the total amount of wages subject to such tax during such 
year.'
 (b) USE OF TRANSFERRED AMOUNTS- Paragraph (2) of section 903(c) (42 U.S.
C. 1103(c)(2)) is amended--
 (1) by striking `and' at the end of subparagraph (C), and
 (2) by striking so much of such paragraph as follows subparagraph (C
) and inserting the following:
 `(D)(i) the appropriation law limits the total amount which may be o
bligated under such appropriation at any time to an amount which does not exceed
, at any such time, the amount by which--
 `(I) the aggregate of the amounts transferred to the account of 
such State pursuant to subsections (a) and (b), exceeds
 `(II) the aggregate of the amounts used by the State pursuant to
 this subsection and charged against the amounts transferred to the account of s
uch State, and
 `(ii) for purposes of clause (i), amounts used by a State for admini
stration shall be chargeable against transferred amounts at the exact time the o
bligation is entered into, and
 `(E) the use of the money is accounted for in accordance with standa
rds established by the Secretary of Labor.'
 (c) EFFECTIVE DATE- The amendments made by this section shall apply to f
iscal years beginning after the date of the enactment of this Act.
CHAPTER 3--SUPPLEMENTAL SECURITY INCOME
SEC. 5031. EXCLUSION FROM INCOME AND RESOURCES OF VICTIMS' COMPENSATION PAYME
NTS.
 (a) EXCLUSION FROM INCOME- Section 1612(b) (42 U.S.C. 1382a(b)) is amend
ed--
 (1) by striking `and' at the end of paragraph (15);
 (2) by striking the period at the end of paragraph (16) and insertin
g `; and'; and
 (3) by adding at the end the following:
 `(17) any amount received by such individual (or such spouse) from a
 fund established by a State to aid victims of crime.'.
 (b) EXCLUSION FROM RESOURCES- Section 1613(a) (42 U.S.C. 1382b(a)) is am
ended--
 (1) by striking `and' at the end of paragraph (7);
 (2) by striking the period at the end of paragraph (8) and inserting
 `; and'; and
 (3) by adding at the end the following:
 `(9) for the 9-month period beginning after the month in which recei
ved, any amount received by such individual (or such spouse) from a fund establi
shed by a State to aid victims of crime, to the extent that such individual (or 
such spouse) demonstrates that such amount was paid as compensation for expenses
 incurred or losses suffered as a result of a crime.'.
 (c) VICTIMS COMPENSATION AWARD NOT REQUIRED TO BE ACCEPTED AS CONDITION 
OF RECEIVING BENEFITS- Section 1631(a) (42 U.S.C. 1383(a)) is amended by adding 
at the end the following:
 `(9) Benefits under this title shall not be denied to any individual sol
ely by reason of the refusal of the individual to accept an amount offered as co
mpensation for a crime of which the individual was a victim.'.
 (d) EFFECTIVE DATE- The amendments made by this section shall apply with
 respect to benefits for months beginning on or after the first day of the 6th c
alendar month following the month in which this Act is enacted.
SEC. 5032. ATTAINMENT OF AGE 65 NOT TO SERVE AS BASIS FOR TERMINATION OF ELIG
IBILITY UNDER SECTION 1619(b).
 (a) IN GENERAL- Section 1619(b)(1) (42 U.S.C. 1392h(b)(1)) is amended by
 striking `under age 65'.
 (b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply wit
h respect to benefits for months beginning on or after the first day of the 6th 
calendar month following the month in which this Act is enacted.
SEC. 5033. EXCLUSION FROM INCOME OF IMPAIRMENT-RELATED WORK EXPENSES.
 (a) IN GENERAL- Section 1612(b)(4)(B)(ii) (42 U.S.C. 1382a(b)(4)(B)(ii))
 is amended by striking `(for purposes of determining the amount of his or her b
enefits under this title and of determining his or her eligibility for such bene
fits for consecutive months of eligibility after the initial month of such eligi
bility)'.
 (b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to 
benefits payable for calendar months beginning after the date of the enactment o
f this Act.
SEC. 5034. TREATMENT OF ROYALTIES AND HONORARIA AS EARNED INCOME.
 (a) IN GENERAL- Section 1612(a) (42 U.S.C. 1382a(a)) is amended--
 (1) in paragraph (1)--
 (A) by striking `and' at the end of subparagraph (C); and
 (B) by adding at the end the following:
 `(E) any royalty earned by an individual in connection with any publ
ication of the work of the individual, and that portion of any honorarium which 
is received for services rendered; and'; and
 (2) in paragraph (2)(F), by inserting `not described in paragraph (1
)(E)' before the period.
 (b) EFFECTIVE DATE- The amendments made by subsection (a) shall apply wi
th respect to benefits for months beginning on or after the first day of the 13t
h calendar month following the month in which this Act is enacted.
SEC. 5035. CERTAIN STATE RELOCATION ASSISTANCE EXCLUDED FROM SSI INCOME AND R
ESOURCES.
 (a) EXCLUSION FROM INCOME- Section 1612(b) (42 U.S.C. 1382a(b)), as amen
ded by section 5031(a) of this Act, is amended--
 (1) by striking `and' at the end of paragraph (16);
 (2) by striking the period at the end of paragraph (17) and insertin
g a semicolon; and
 (3) by inserting after paragraph (17) the following:
 `(18) relocation assistance provided by a State or local government 
to such individual (or such spouse), comparable to assistance provided under tit
le II of the Uniform Relocation Assistance and Real Property Acquisitions Polici
es Act of 1970 which is subject to the treatment required by section 216 of such
 Act.'.
 (b) EXCLUSION FROM RESOURCES- Section 1613(a) (42 U.S.C. 1382b(a)), as a
mended by section 5031(b) of this Act, is amended--
 (1) by striking `and' at the end of paragraph (8);
 (2) by striking the period at the end of paragraph (9) and inserting
 `; and'; and
 (3) by inserting after paragraph (9) the following:
 `(10) for the 9-month period beginning after the month in which rece
ived, relocation assistance provided by a State or local government to such indi
vidual (or such spouse), comparable to assistance provided under title II of the
 Uniform Relocation Assistance and Real Property Acquisitions Policies Act of 19
70 which is subject to the treatment required by section 216 of such Act.'.

 (c) EFFECTIVE DATE- The amendments made by this section shall apply with
 respect to benefits for calendar months beginning in the 3-year period that beg
ins on the first day of the 6th calendar month following the month in which this
 Act is enacted.
SEC. 5036. EVALUATION OF CHILD'S DISABILITY BY PEDIATRICIAN OR OTHER QUALIFIE
D SPECIALIST.
 (a) IN GENERAL- Section 1614(a)(3) (42 U.S.C. 1382c(a)(3)) is amended by
 adding at the end the following:
 `(H) In making any determination under this title with respect to the di
sability of a child who has not attained the age of 18 years and to whom section
 221(h) does not apply, the Secretary shall make reasonable efforts to ensure th
at a qualified pediatrician or other individual who specializes in a field of me
dicine appropriate to the disability of the child (as determined by the Secretar
y) evaluates the case of such child.'.
 (b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply to 
determinations made 6 or more months after the date of the enactment of this Act
.
SEC. 5037. REIMBURSEMENT FOR VOCATIONAL REHABILITATION SERVICES FURNISHED DUR
ING CERTAIN MONTHS OF NONPAYMENT OF SSI BENEFITS.
 (a) IN GENERAL- Section 1615 (42 U.S.C. 1382d) is amended by adding at t
he end the following:
 `(e) The Secretary may reimburse the State agency described in subsectio
n (d) for the costs described therein incurred in the provision of rehabilitatio
n services--
 `(1) for any month for which an individual received--
 `(A) benefits under section 1611 or 1619(a);
 `(B) assistance under section 1619(b); or
 `(C) a federally administered State supplementary payment under 
section 1616 of this Act or section 212(b) of Public Law 93-66; and
 `(2) for any month before the 13th consecutive month for which an in
dividual, for a reason other than cessation of disability or blindness, was inel
igible for--
 `(A) benefits under section 1611 or 1619(a);
 `(B) assistance under section 1619(b); or
 `(C) a federally administered State supplementary payment under 
section 1616 of this Act or section 212(b) of Public Law 93-66.'.
 (b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effe
ct on the date of the enactment of this Act and shall apply to claims for reimbu
rsement pending on or after such date.
SEC. 5038. EXTENSION OF PERIOD OF PRESUMPTIVE ELIGIBILITY FOR BENEFITS.
 (a) IN GENERAL- Section 1631(a)(4)(B) (42 U.S.C. 1383(a)(4)(B)) is amend
ed by striking `3' and inserting `6'.
 (b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply wit
h respect to benefits for months beginning on or after the first day of the 6th 
calendar month following the month in which this Act is enacted.
SEC. 5039. CONTINUING DISABILITY OR BLINDNESS REVIEWS NOT REQUIRED MORE THAN 
ONCE ANNUALLY.
 (a) IN GENERAL 56
--Section 1619 (42 U.S.C. 1382h) is amended--
 56 So in original. Probably should be `GENERAL- '.
 (1) by redesignating subsection (c) as subsection (d); and
 (2) by inserting after subsection (b) the following:
 `(c) Subsection (a)(2) and section 1631(j)(2)(A) shall not be construed,
 singly or jointly, to require more than 1 determination during any 12-month per
iod with respect to the continuing disability or blindness of an individual.'.
 (b) CONFORMING AMENDMENT- Section 1631(j)(2)(A) (42 U.S.C. 1383(j)(2)(A)
) is amended by inserting `(other than subsection (c) thereof)' after `1619' the
 1st place such term appears.
 (c) EFFECTIVE DATE- The amendments made by this section shall take effec
t on the date of the enactment of this Act.
SEC. 5040. CONCURRENT SSI AND FOOD STAMP APPLICATIONS BY INSTITUTIONALIZED IN
DIVIDUALS.
 Section 1631 (42 U.S.C. 1383) is amended--
 (1) in subsection (m), by striking the second sentence; and
 (2) by adding at the end the following:
`CONCURRENT SSI AND FOOD STAMP APPLICATIONS BY INSTITUTIONALIZED INDIVIDU
ALS
 `(n) The Secretary and the Secretary of Agriculture shall develop a proc
edure under which an individual who applies for supplemental security income ben
efits under this subsection shall also be permitted to apply at the same time fo
r participation in the food stamp program authorized under the Food Stamp Act of
 1977 (7 U.S.C. 2011 et seq.).'.
SEC. 5041. NOTIFICATION OF CERTAIN INDIVIDUALS ELIGIBLE TO RECEIVE RETROACTIV
E BENEFITS.
 In notifying individuals of their eligibility to receive retroactive sup
plemental security income benefits as a result of Sullivan v. Zebley, 110 S. Ct.
 2658 (1990), the Secretary shall include written notice, in language that is ea
sily understandable, explaining--
 (1) the 6-month limitation on the exclusion from resources under sec
tion 1613(a)(7) of the Social Security Act (42 U.S.C. 1382b(a)(7));
 (2) the potential effects under title XVI of the Social Security Act
, attributable to the receipt of such payment, including--
 (A) potential discontinuation of eligibility; and
 (B) potential reductions in the amount of benefits;
 (3) the possibility of establishing a trust account that would not b
e considered as income or resources for the purposes of such title if the trust 
met certain conditions; and
 (4) that legal assistance in establishing such a trust may be availa
ble through legal referral services offered by a State or local bar association,
 or through the Legal Services Corporation.
CHAPTER 4--AID TO FAMILIES WITH DEPENDENT CHILDREN
SEC. 5051. OPTIONAL MONTHLY REPORTING AND RETROSPECTIVE BUDGETING.
 (a) OPTIONAL MONTHLY REPORTING- Section 402(a)(14) (42 U.S.C. 602(a)(14)
) is amended--
 (1) by striking `with respect to' and all that follows through `(A) 
provide' and insert `provide, at the option of the State and with respect to suc
h category or categories as the State may select and identify in its State plan 
(A)';
 (2) by striking `(with the prior approval of the Secretary in recent
 work history and earned income cases)'; and
 (3) by striking `upon a determination' and all that follows through 
`paragraph'.
 (b) OPTIONAL RETROSPECTIVE BUDGETING- Section 402(a)(13) (42 U.S.C. 602(
a)(13)) is amended by striking all that precedes subparagraph (A) and inserting 
the following:
 `(13) at the option of the State, but only with respect to any one o
r more categories of families required to report monthly to the State agency pur
suant to paragraph (14), provide that--'.
 (c) EFFECTIVE DATE- The amendments made by this section shall take effec
t with respect to reports pertaining to, or aid payable for, months beginning in
 or after October 1990.
SEC. 5052. CHILDREN RECEIVING FOSTER CARE MAINTENANCE OR ADOPTION ASSISTANCE 
PAYMENTS NOT TREATED AS MEMBER OF FAMILY UNIT FOR PURPOSES OF DETERMINING ELIGIB
ILITY FOR, OR AMOUNT OF, AFDC BENEFIT.
 (a) IN GENERAL- Part A of title IV (42 U.S.C. 601 et seq.) is amended by
 inserting after section 408 the following:
`EXCLUSION FROM AFDC UNIT OF CHILD FOR WHOM FEDERAL, STATE, OR LOCAL FOST
ER CARE MAINTENANCE OR ADOPTION ASSISTANCE PAYMENTS ARE MADE
 `SEC. 409. (a) Notwithstanding any other provision of this title (other 
than subsection (b))--
 `(1) a child with respect to whom foster care maintenance payments o
r adoption assistance payments are made under part E or under State or local law
 shall not, for the period for which such payments are made, be regarded as a me
mber of a family for purposes of determining the amount of benefits of the famil
y under this part; and
 `(2) the income and resources of such child shall be excluded from t
he income and resources of a family under this part.
 `(b) Subsection (a) shall not apply in the case of a child with respect 
to whom adoption assistance payments are made under part E or under State or loc
al law, if application of such subsection would reduce the benefits under this p
art of the family of which the child would otherwise be regarded as a member.'.<
/ul>
 (b) CONFORMING REPEAL- Section 478 (42 U.S.C. 678) is hereby repealed.
 (c) EFFECTIVE DATE- The amendment made by subsection (a) and the repeal 
made by subsection (b) shall apply with respect to benefits for months beginning
 on or after the first day of the 6th calendar month following the month in whic
h this Act is enacted.
SEC. 5053. ELIMINATION OF TERM `LEGAL GUARDIAN'.
 (a) IN GENERAL- Section 402(a)(39) (42 U.S.C. 602(a)(39)) is amended--
 (1) by striking `or legal guardian'; and
 (2) by striking `or legal guardians'.
 (b) EFFECTIVE DATE- The amendments made by subsection (a) shall take eff
ect on the date of the enactment of this Act.
SEC. 5054. REPORTING OF CHILD ABUSE AND NEGLECT.
 (a) CONCERNING AFDC APPLICANTS AND RECIPIENTS-
 (1) IN GENERAL- Section 402(a)(16) (42 U.S.C. 602(a)(16)) is amended
 to read as follows:
 `(16) provide that the State agency will--
 `(A) report to an appropriate agency or official, known or suspe
cted instances of physical or mental injury, sexual abuse or exploitation, or ne
gligent treatment or maltreatment of a child receiving aid under this part under
 circumstances which indicate that the child's health or welfare is threatened t
hereby; and
 `(B) provide such information with respect to a situation descri
bed in subparagraph (A) as the State agency may have;'.
 (2) CONFORMING AMENDMENTS- Section 402(a)(9) (42 U.S.C. 602(a)(9)) i
s amended--
 (A) in subparagraph (C), by striking `and'; and
 (B) by inserting `, and (E) reporting and providing information 
pursuant to paragraph (16) to appropriate authorities with respect to known or s
uspected child abuse or neglect' before the 1st semicolon.
 (b) CONCERNING RECIPIENTS OF FOSTER CARE OR ADOPTION ASSISTANCE-
 (1) IN GENERAL- Section 471(a)(9) (42 U.S.C. 671(a)(9)) is amended t
o read as follows:
 `(9) provides that the State agency will--
 `(A) report to an appropriate agency or official, known or suspe
cted instances of physical or mental injury, sexual abuse or exploitation, or ne
gligent treatment or maltreatment of a child receiving aid under part B or this 
part under circumstances which indicate that the child's health or welfare is th
reatened thereby; and
 `(B) provide such information with respect to a situation descri
bed in subparagraph (A) as the State agency may have;'.
 (2) CONFORMING AMENDMENTS- Section 471(a)(8) (42 U.S.C. 671(a)(8)) i
s amended--
 (A) in subparagraph (C), by striking `and'; and
 (B) by inserting `, and (E) reporting and providing information 
pursuant to paragraph (9) to appropriate authorities with respect to known or su
spected child abuse or neglect' before the 1st semicolon.
 (c) EFFECTIVE DATE- The amendments made by this section shall apply with
 respect to benefits for months beginning on or after the first day of the 6th c
alendar month following the month in which this Act is enacted.
SEC. 5055. DISCLOSURE OF INFORMATION ABOUT AFDC APPLICANTS AND RECIPIENTS AUT
HORIZED FOR PURPOSES DIRECTLY CONNECTED TO STATE FOSTER CARE AND ADOPTION ASSIST
ANCE PROGRAMS.
 (a) IN GENERAL- Section 402(a)(9)(A) (42 U.S.C. 602(a)(9)(A)) is amended
 by striking `or D' and inserting `, D, or E'.
 (b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effe
ct on the date of the enactment of this Act.
SEC. 5056. REPATRIATION.
 (a) IN GENERAL- Section 1113 (42 U.S.C. 1313) is amended--
 (1) in subsection (d), by striking `on or after October 1, 1989' and
 inserting `after September 30, 1991'; and
 (2) by adding at the end the following:
 `(e)(1) The Secretary may accept on behalf of the United States gifts, i
n cash or in kind, for use in carrying out the program established under this se
ction. Gifts in the form of cash shall be credited to the appropriation account 
from which this program is funded, in addition to amounts otherwise appropriated
, and shall remain available until expended.
 `(2) Gifts accepted under paragraph (1) shall be available for obligatio
n or other use by the United States only to the extent and in the amounts provid
ed in appropriation Acts.'.
 (b) EFFECTIVE DATE- The amendments made by subsection (a) shall be effec
tive for fiscal years beginning after September 30, 1989.
SEC. 5057. TECHNICAL AMENDMENT TO NATIONAL COMMISSION ON CHILDREN.
 Section 1139(d) (42 U.S.C. 1320b-9(d)) is amended in the matter precedin
g paragraph (1), by striking `an interim report no later than March 31, 1991, an
d a final report no later than September 30, 1990' and inserting `an interim rep
ort no later than September 30, 1990, and a final report no later than March 31,
 1991'.
SEC. 5058. EXTENSION OF PROHIBITION AGAINST IMPLEMENTATION OF PROPOSED REGULA
TIONS ON EMERGENCY ASSISTANCE AND AFDC SPECIAL NEEDS.
 Section 8005 of the Omnibus Budget Reconciliation Act of 1989 (42 U.S.C.
 606 note) is amended in each of subsections (a)(2) and (c) by striking `1990' a
nd inserting `1991'.
SEC. 5059. AMENDMENTS TO MINNESOTA FAMILY INVESTMENT PLAN DEMONSTRATION.
 Section 8015 of the Omnibus Budget Reconciliation Act of 1989 (42 U.S.C.
 602 note) is amended--
 (1) in subsection (a), by striking `part A' and inserting `parts A a
nd F';
 (2) in subsection (b)(3), by striking `(e)' and inserting `(d)';
 (3) in subsection (b)(6), by inserting `or that is assigned to and f
ound eligible for the project' after `in the project';
 (4) in subsection (b)(8)(B)(ii), by inserting `(except that the age 
of the youngest child may be age 1 under the project even if the State plan spec
ifies age 3)' after `such compliance';
 (5) in subsection (b)(8)(B)(ii)(I), by inserting `and' after the sem
icolon;
 (6) in subsection (b)(8)(B)(ii), by striking `; and' after `age of 1
 year' and all that follows through the end of subclause (III) and inserting `(e
xcept that, in a 2-parent family, this clause applies only to 1 parent).';<
/ul>
 (7) by amending subsection (b)(9) to read as follows:
 `(9) AVAILABILITY OF EDUCATION, EMPLOYMENT, AND TRAINING SERVICES- T
he State will make available education, employment, and training services equiva
lent to those services available under the State plan approved under part F of t
itle IV of the Social Security Act to families required to enter into and comply
 with a contract with a county agency under the 1989 Minnesota Laws, section 10 
of article 5 of chapter 282.';
 (8) in subsection (b)(10)(A)--
 (A) by inserting `, except when a sanction is implemented under 
the 1989 Minnesota Laws, subdivision 3 of section 10 of article 5 of chapter 282
,' after `ensure that'; and
 (B) by striking `cash';
 (9) in subsection (b), by adding at the end the following:
 `(12) LIABILITY FOR COSTS- For each fiscal year, the Secretary shall
 not be liable for any costs related to carrying out the project in excess of th
ose that the Secretary would have been liable for had the project not been imple
mented, except for costs for evaluating the project.';
 (10) in subsection (c)(1)(B), by striking `50' and inserting `25';
 (11) in subsection (c)(2), by striking `part A' and inserting `parts
 A and F';
 (12) in subsection (d)(1)(B)(ii)--
 (A) by inserting `except when a sanction is implemented under th
e 1989 Minnesota Laws, subdivision 3 of section 10 of article 5 of chapter 282,'
 before `permit'; and
 (B) by striking `cash';
 (13) in subsection (d)(1)(B)(iii), by striking `section 402(a)(19)(C
) of such Act' and inserting `subparagraph (C), (D), or (E) of section 402(a)(19
) of such Act (except that the exemption for a parent with a child under 1 year 
of age need not be specified in the State plan)'; and
 (14) by adding at the end the following:
 `(i) CONSTRUCTION- For purposes of any Federal, State, or local law othe
r than part A of title IV of the Social Security Act, the Food Stamp Act of 1977
, or this section--
 `(1) families participating in the project shall be considered to be
 recipients of aid under such part; and
 `(2) cash assistance provided under the project to any such family a
nd not designated by the State as food assistance shall be treated as if such as
sistance were aid received under such part.'.
SEC. 5060. GOOD CAUSE EXCEPTION TO REQUIRED COOPERATION FOR TRANSITIONAL CHIL
D CARE BENEFITS.
 (a) IN GENERAL- Section 402(g)(1)(A)(vi)(II) (42 U.S.C. 602(g)(1)(A)(vi)
(II)) is amended to read as follows:
 `(II) refused to cooperate with the State in establishing and enforcing 
his or her child support obligations, without good cause as determined by the St
ate agency in accordance with standards prescribed by the Secretary which shall 
take into consideration the best interests of the child for whom child care is t
o be provided.'.
 (b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effe
ct on the date of the enactment of this Act.
SEC. 5061. TECHNICAL CORRECTIONS REGARDING PENALTY FOR FAILURE TO PARTICIPATE
 IN JOBS PROGRAM.
 (a) IN GENERAL- Section 407(b)(1)(B) (42 U.S.C. 607(b)(1)(B))) 57
 is amended--
 57 So in original. Probably should be `607(b)(1)(B))'.
 (1) in clause (iii)--
 (A) by striking `--' and all that follows through `(II)'; and
 (B) by striking `and ' at the end;
 (2) in clause (iv), by striking the period and inserting `; and'; an
d
 (3) by adding at the end the following:
 `(v) that, if and for so long as the child's parent described in
 subparagraph (A)(i), unless meeting a condition of section 402(a)(19)(C), is, w
ithout good cause, not participating (or available for participation) in a progr
am under part F, or if exempt under such section by reason of clause (vii) there
of or because there has not been established or provided under part F a program 
in which such parent can effectively participate, is not registered with the pub
lic employment offices in the State, the needs of such parent shall not be taken
 into account in determining the need of such parent's family under section 402(
a)(7), and the needs of such parent's spouse shall not be so taken into account 
unless such spouse is participating in such a program, or if not participating s
olely by reason of section 402(a)(19)(C)(vii) or because there has not been esta
blished or provided under part F a program in which such spouse can effectively 
participate, is registered with the public employment offices of the State; and 
if neither parents' needs are so taken into account, the payment provisions of s
ection 402(a)(19)(G)(i)(I) shall apply.'.
 (b) EFFECTIVE DATE- The amendments made by subsection (a) shall take eff
ect at the same time and in the same manner as the amendments made by title II o
f the Family Support Act of 1988 take effect.
SEC. 5062. TECHNICAL CORRECTIONS REGARDING AFDC-UP ELIGIBILITY REQUIREMENTS.
 (a) IN GENERAL- Section 407(d)(1) (42 U.S.C. 607(d)(1)) is amended--
 (1) by striking `a calendar quarter (A)' and inserting `(A) a calend
ar quarter';
 (2) by striking `or' at the end of subparagraph (A); and
 (3) by inserting `, and (C) a calendar quarter ending before October
 1990 in which such individual participated in a community work experience progr
am under section 409 (as in effect for a State immediately before the effective 
date for that State of the amendments made by title II of the Family Support Act
 of 1988) or the work incentive program established under part C (as in effect f
or a State immediately before such effective date)' before the semicolon.
 (b) EFFECTIVE DATE- The amendments made by subsection (a) shall take eff
ect on the date of the enactment of this Act.
SEC. 5063. FAMILY SUPPORT ACT DEMONSTRATION PROJECTS.
 Section 505 of the Family Support Act of 1988 (42 U.S.C. 1315; P.L. 100-
385) is amended--
 (1) in subsection (a), by inserting `in each of the fiscal years 199
0, 1991, and 1992,' before `shall'; and
 (2) in subsection (e), by striking `September 30, 1989' and insertin
g `September 30 of the fiscal year specified in the agreement described in subse
ction (a)'.
SEC. 5064. STUDY OF JOBS PROGRAMS OPERATED BY INDIAN TRIBES AND ALASKA NATIVE
 ORGANIZATIONS.
 (a) IN GENERAL- Within 180 days after the date of the enactment of this 
Act, the Comptroller General of the United States (in this section referred to a
s the `Comptroller') shall conduct a study of the implementation of section 482(
i) of the Social Security Act (42 U.S.C. 682(i)) relating to job opportunities a
nd basic skills training programs (in this section referred to as `JOBS programs
') operated by Indian tribes and Alaska Native organizations (as defined in para
graph (5) of such section 482(i)).
 (b) REQUIREMENTS FOR STUDY- In conducting the study described in subsect
ion (a), the Comptroller shall--
 (1) identify any problems associated with the implementation of sect
ion 482(i) of the Social Security Act; and
 (2) assess (to the extent practicable) the effectiveness of the JOBS
 programs operated by Indian tribes and Alaska Native organizations.
 (c) REPORT- Upon completion of the study described in subsection (a), th
e Comptroller shall submit a report to the appropriate committees of the Congres
s that includes--
 (1) a summary of the findings of the study; and
 (2) recommendations with respect to proposed legislation or changes 
in administrative policy to improve the effectiveness of JOBS programs conducted
 pursuant to section 482(i) of the Social Security Act.
CHAPTER 5--CHILD WELFARE AND FOSTER CARE
SEC. 5071. ACCOUNTING FOR ADMINISTRATIVE COSTS.
 (a) RECLASSIFICATION- Section 474(a)(3) (42 U.S.C. 674(a)(3)) is amended
 by inserting `provision of child placement services and for the' before `proper
 and efficient'.
 (b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effe
ct on the date of the enactment of this Act.
SEC. 5072. SECTION 427 TRIENNIAL REVIEWS.
 (a) AMENDMENTS TO SECTION 10406 OF OBRA 1989- Section 10406 of the Omnib
us Budget Reconciliation Act of 1989 (42 U.S.C. 627 note) is amended--
 (1) by striking `1991' and inserting `1992';
 (2) by striking `1990' and inserting `1991'; and
 (3) in the section heading, by striking `1990' and inserting `1991'.

 (b) CONFORMING AMENDMENT- The item relating to section 10406 in the tabl
e of contents appearing immediately after section 10000 of such Act is amended b
y striking `1990' and inserting `1991'.
SEC. 5073. INDEPENDENT LIVING INITIATIVES.
 (a) IN GENERAL- Section 477(a)(2)(C) (42 U.S.C. 677(a)(2)(C)) is amended
--
 (1) by inserting `who has not attained age 21' after `may at the opt
ion of the State also include any child'; and
 (2) by striking `, but such child' and all that follows through `car
e'.
 (b) EFFECTIVE DATE- The amendments made by subsection (a) shall apply to
 payments made under part E of title IV of the Social Security Act for fiscal ye
ars beginning in or after fiscal year 1991.
CHAPTER 6--CHILD CARE
SEC. 5081. GRANTS TO STATES FOR CHILD CARE.
 (a) RULES GOVERNING PROVISION OF CHILD CARE TO ELIGIBLE FAMILIES- Sectio
n 402 (42 U.S.C. 602) is amended by adding at the end the following:
 `(i)(1) Each State agency may, to the extent that it determines that res
ources are available, provide child care in accordance with paragraph (2) to any
 low income family that the State determines--
 `(A) is not receiving aid under the State plan approved under this p
art;
 `(B) needs such care in order to work; and
 `(C) would be at risk of becoming eligible for aid under the State p
lan approved under this part if such care were not provided.
 `(2) The State agency may provide child care pursuant to paragraph (1) b
y--
 `(A) providing such care directly;
 `(B) arranging such care through providers by use of purchase of ser
vice contracts or vouchers;
 `(C) providing cash or vouchers in advance to the family;
 `(D) reimbursing the family; or
 `(E) adopting such other arrangements as the agency deems appropriat
e.
 `(3)(A) A family provided with child care under paragraph (1) shall cont
ribute to such care in accordance with a sliding scale formula established by th
e State agency based on the family's ability to pay.
 `(B) The State agency shall make payment for the cost of child care prov
ided under paragraph (1) with respect to a family in an amount that is the lesse
r of--
 `(i) the actual cost of such care; and
 `(ii) the applicable local market rate (as determined by the State i
n accordance with regulations issued by the Secretary).
 `(4) The value of any child care provided or arranged (or any amount rec
eived as payment for such care or reimbursement for costs incurred for the care)
 under this subsection--
 `(A) shall not be treated as income or as a deductible expense for p
urposes of any other Federal or federally assisted program that bases eligibilit
y for or amount of benefits upon need; and
 `(B) may not be claimed as an employment-related expense for purpose
s of the credit under section 21 of the Internal Revenue Code of 1986.
 `(5) Amounts expended by the State agency for child care under paragraph
 (1) shall be treated as amounts for which payment may be made to a State under 
section 403(n) only to the extent that--
 `(A) such amounts are paid in accordance with paragraph (3)(B);

 `(B) the care involved meets applicable standards of State and local
 law;
 `(C) the provider of the care--
 `(i) in the case of a provider who is not an individual that pro
vides such care solely to members of the family of the individual, is licensed, 
regulated, or registered by the State or locality in which the care is provided;
 and
 `(ii) allows parental access; and
 `(D) such amounts are not used to supplant any other Federal or Stat
e funds used for child care services.
 `(6)(A)(i) Each State shall prepare reports annually, beginning with fis
cal year 1993, on the activities of the State carried out with funds made availa
ble under section 403(n).
 `(ii) The State shall make available for public inspection within the St
ate copies of each report required by this paragraph, shall transmit a copy of e
ach such report to the Secretary, and shall provide a copy of each such report, 
on request, to any interested public agency.
 `(iii) The Secretary shall annually compile, and submit to the Congress,
 the State reports transmitted to the Secretary pursuant to clause (ii).
 `(B) Each report prepared and transmitted by a State under subparagraph 
(A) shall set forth with respect to child care services provided under this subs
ection--
 `(i) showing separately for center-based child care services, group 
home child care services, family child care services, and relative care services
, the number of children who received such services and the average cost of such
 services;
 `(ii) the criteria applied in determining eligibility or priority fo
r receiving services, and sliding fee schedules;
 `(iii) the child care licensing and regulatory (including registrati
on) requirements in effect in the State with respect to each type of service spe
cified in clause (i); and
 `(iv) the enforcement policies and practices in effect in the State 
which apply to licensed and regulated child care providers (including providers 
required to register).
 `(C) Within 12 months after the date of the enactment of this subsection
, the Secretary shall establish uniform reporting requirements for use by the St
ates in preparing the information required by this paragraph, and make such othe
r provision as may be necessary or appropriate to ensure that compliance with th
is subsection will not be unduly burdensome on the States.
 `(D) Not later than July 1, 1992, the Secretary shall issue a report as 
on the implementation of this subsection, based on such information as as has 58

 been made available to the Secretary by the States.'.
 58 So in original. Probably should be `information as has'.
 (b) PAYMENTS TO STATES- Section 403 (42 U.S.C. 603) is amended by adding
 at the end the following:
 `(n)(1) In addition to any payment under subsection (a) or (l), each Sta
te shall be entitled to payment from the Secretary of an amount equal to the les
ser of--
 `(A) the Federal medical assistance percentage (as defined in sectio
n 1905(b)) of the expenditures by the State in providing child care services pur
suant to section 402(i), and in administering the provision of such child care s
ervices, for any fiscal year; and
 `(B) the limitation determined under paragraph (2) with respect to t
he State for the fiscal year.
 `(2)(A) The limitation determined under this paragraph with respect to a
 State for any fiscal year is the amount that bears the same ratio to the amount
 specified in subparagraph (B) for such fiscal year as the number of children re
siding in the State in the second preceding fiscal year bears to the number of c
hildren residing in the United States in the second preceding fiscal year.
 `(B) The amount specified in this subparagraph is--
 `(i) $300,000,000 for fiscal year 1991;
 `(ii) $300,000,000 for fiscal year 1992;
 `(iii) $300,000,000 for fiscal year 1993;
 `(iv) $300,000,000 for fiscal year 1994; and
 `(v) $300,000,000 for fiscal year 1995, and for each fiscal year the
reafter.
 `(C) If the limitation determined under subparagraph (A) with respect to
 a State for a fiscal year exceeds the amount paid to the State under this subse
ction for the fiscal year, the limitation determined under this paragraph with r
espect to the State for the immediately succeeding fiscal year shall be increase
d by the amount of such excess.
 `(3) Amounts appropriated for a fiscal year to carry out this part shall
 be made available for payments under this subsection for such fiscal year.'.
 (c) AMENDMENTS TO GRANTS TO STATES TO IMPROVE CHILD CARE LICENSING AND R
EGISTRATION REQUIREMENTS, AND TO MONITOR CHILD CARE PROVIDED TO CHILDREN RECEIVI
NG AFDC-
 (1) GRANTS INCREASED AND EXTENDED- Section 402(g)(6)(D) (42 U.S.C. 6
02(g)(6)(D)) is amended by inserting `, and $50,000,000 for each of fiscal years
 1992, 1993, and 1994' before the period.
 (2) NEW PURPOSES FOR GRANTS- Section 402(g)(6)(A) (42 U.S.C. 602(g)(
6)(A)) is amended by striking `and to monitor child care provided to children re
ceiving aid under the State plan approved under subsection (a)' and inserting `t
o enforce standards with respect to child care provided to children under this p
art, and to provide for the training of child care providers'.
 (3) HALF OF GRANT REQUIRED TO BE EXPENDED FOR TRAINING OF CHILD CARE
 PROVIDERS- Section 402(g)(6) (42 U.S.C. 602(g)(6)) is amended by adding at the 
end the following:
 `(E) Each State to which the Secretary makes a grant under this paragrap
h shall expend not less than 50 percent of the amount of the grant to provide fo
r the training of child care providers.'.
 (d) COORDINATION WITH OTHER PROGRAMS FOR CHILDREN- Section 402(g)(7) (42
 U.S.C. 602(g)(7)) is amended by inserting `and subsection (i)' after `this subs
ection'.
 (e) EFFECTIVE DATE- Except as otherwise expressly provided, the amendmen
ts made by this section shall take effect on October 1, 1990.
SEC. 5082. CHILD CARE AND DEVELOPMENT BLOCK GRANT.
 Chapter 8 of subtitle A of title IV of the Omnibus Budget Reconciliation
 Act of 1981 (Public Law 97-35) is amended--
 (1) by redesignating subchapters C, D, and E, as subchapters D, E, a
nd F, respectively; and
 (2) by inserting after subchapter B the following new subchapter:
`Subchapter C--Child Care and Development Block Grant
`SEC. 658A. SHORT TITLE.
 `This subchapter may be cited as the `Child Care and Development Block G
rant Act of 1990'.
`SEC. 658B. AUTHORIZATION OF APPROPRIATIONS.
 `There are authorized to be appropriated to carry out this subchapter, $
750,000,000 for fiscal year 1991, $825,000,000 for fiscal year 1992, $925,000,00
0 for fiscal year 1993, and such sums as may be necessary for each of the fiscal
 years 1994 and 1995.
`SEC. 658C. ESTABLISHMENT OF BLOCK GRANT PROGRAM.
 `The Secretary is authorized to make grants to States in accordance with
 the provisions of this subchapter.
`SEC. 658D. LEAD AGENCY.
 `(a) DESIGNATION- The chief executive officer of a State desiring to rec
eive a grant under this subchapter shall designate, in an application submitted 
to the Secretary under section 658E, an appropriate State agency that complies w
ith the requirements of subsection (b) to act as the lead agency.
 `(b) DUTIES-
 `(1) IN GENERAL- The lead agency shall--
 `(A) administer, directly or through other State agencies, the f
inancial assistance received under this subchapter by the State;
 `(B) develop the State plan to be submitted to the Secretary und
er section 658E(a);
 `(C) in conjunction with the development of the State plan as re
quired under subparagraph (B), hold at least one hearing in the State to provide
 to the public an opportunity to comment on the provision of child care services
 under the State plan; and
 `(D) coordinate the provision of services under this subchapter 
with other Federal, State and local child care and early childhood development p
rograms.
 `(2) DEVELOPMENT OF PLAN- In the development of the State plan descr
ibed in paragraph (1)(B), the lead agency shall consult with appropriate represe
ntatives of units of general purpose local government. Such consultations may in
clude consideration of local child care needs and resources, the effectiveness o
f existing child care and early childhood development services, and the methods 
by which funds made available under this subchapter can be used to effectively a
ddress local shortages.
`SEC. 658E. APPLICATION AND PLAN.
 `(a) APPLICATION- To be eligible to receive assistance under this subcha
pter, a State shall prepare and submit to the Secretary an application at such t
ime, in such manner, and containing such information as the Secretary shall by r
ule require, including--
 `(1) an assurance that the State will comply with the requirements o
f this subchapter; and
 `(2) a State plan that meets the requirements of subsection (c).
 `(b) PERIOD COVERED BY PLAN- The State plan contained in the application
 under subsection (a) shall be designed to be implemented--
 `(1) during a 3-year period for the initial State plan; and
 `(2) during a 2-year period for subsequent State plans.
 `(c) Requirements of a Plan-
 `(1) LEAD AGENCY- The State plan shall identify the lead agency desi
gnated under section 658D.
 `(2) POLICIES AND PROCEDURES- The State plan shall:
 `(A) PARENTAL CHOICE OF PROVIDERS- Provide assurances that--
 `(i) the parent or parents of each eligible child within the
 State who receives or is offered child care services for which financial assist
ance is provided under this subchapter, other than through assistance provided u
nder paragraph (3)(C), are given the option either--
 `(I) to enroll such child with a child care provider tha
t has a grant or contract for the provision of such services; or<
/ul>
 `(II) to receive a child care certificate as defined in 
section 658P(2);
 `(ii) in cases in which the parent selects the option descri
bed in clause (i)(I), the child will be enrolled with the eligible provider sele
cted by the parent to the maximum extent practicable; and
 `(iii) child care certificates offered to parents selecting 
the option described in clause (i)(II) shall be of a value commensurate with the
 subsidy value of child care services provided under the option described in cla
use (i)(I);
except that nothing in this subparagraph shall require a State to
 have a child care certificate program in operation prior to October 1, 1992.
 `(B) UNLIMITED PARENTAL ACCESS- Provide assurances that procedur
es are in effect within the State to ensure that child care providers who provid
e services for which assistance is made available under this subchapter afford p
arents unlimited access to their children and to the providers caring for their 
children, during the normal hours of operation of such providers and whenever su
ch children are in the care of such providers.
 `(C) PARENTAL COMPLAINTS- Provide assurances that the State main
tains a record of substantiated parental complaints and makes information regard
ing such parental complaints available to the public on request.
 `(D) CONSUMER EDUCATION- Provide assurances that consumer educat
ion information will be made available to parents and the general public within 
the State concerning licensing and regulatory requirements, complaint procedures
, and policies and practices relative to child care services within the State.
 `(E) COMPLIANCE WITH STATE AND LOCAL REGULATORY REQUIREMENTS- Pr
ovide assurances that--
 `(i) all providers of child care services within the State f
or which assistance is provided under this subchapter comply with all licensing 
or regulatory requirements (including registration requirements) applicable unde
r State and local law; and
 `(ii) providers within the State that are not required to be
 licensed or regulated under State or local law are required to be registered wi
th the State prior to payment being made under this subchapter, in accordance wi
th procedures designed to facilitate appropriate payment to such providers, and 
to permit the State to furnish information to such providers, including informat
ion on the availability of health and safety training, technical assistance, and
 any relevant information pertaining to regulatory requirements in the State, an
d that such providers shall be permitted to register with the State after select
ion by the parents of eligible children and before such payment is made.
This subparagraph shall not be construed to prohibit a State from
 imposing more stringent standards and licensing or regulatory requirements on c
hild care providers within the State that provide services for which assistance 
is provided under this subchapter than the standards or requirements imposed on 
other child care providers in the State.
 `(F) ESTABLISHMENT OF HEALTH AND SAFETY REQUIREMENTS- Provide as
surances that there are in effect within the State, under State or local law, re
quirements designed to protect the health and safety of children that are applic
able to child care providers that provide services for which assistance is made 
available under this subchapter. Such requirements shall include--
 `(i) the prevention and control of infectious diseases (incl
uding immunization);
 `(ii) building and physical premises safety; and
 `(iii) minimum health and safety training appropriate to the
 provider setting.
Nothing in this subparagraph shall be construed to require the es
tablishment of additional health and safety requirements for child care provider
s that are subject to health and safety requirements in the categories described
 in this subparagraph on the date of enactment of this subchapter under State or
 local law.
 `(G) COMPLIANCE WITH STATE AND LOCAL HEALTH AND SAFETY REQUIREME
NTS- Provide assurances that procedures are in effect to ensure that child care 
providers within the State that provide services for which assistance is provide
d under this subchapter comply with all applicable State or local health and saf
ety requirements as described in subparagraph (F).
 `(H) REDUCTION IN STANDARDS- Provide assurances that if the Stat
e reduces the level of standards applicable to child care services provided in t
he State on the date of enactment of this subchapter, the State shall inform the
 Secretary of the rationale for such reduction in the annual report of the State
 described in section 658K.
 `(I) REVIEW OF STATE LICENSING AND REGULATORY REQUIREMENTS- Prov
ide assurances that not later than 18 months after the date of the submission of
 the application under section 658E, the State will complete a full review of th
e law applicable to, and the licensing and regulatory requirements and policies 
of, each licensing agency that regulates child care services and programs in the
 State unless the State has reviewed such law, requirements, and policies in the
 3-year period ending on the date of the enactment of this subchapter.

 `(J) SUPPLEMENTATION- Provide assurances that funds received und
er this subchapter by the State will be used only to supplement, not to supplant
, the amount of Federal, State, and local funds otherwise expended for the suppo
rt of child care services and related programs in the State.
 `(3) USE OF BLOCK GRANT FUNDS-
 `(A) GENERAL REQUIREMENT- The State plan shall provide that the 
State will use the amounts provided to the State for each fiscal year under this
 subchapter as required under subparagraphs (B) and (C).
 `(B) CHILD CARE SERVICES- Subject to the reservation contained i
n subparagraph (C), the State shall use amounts provided to the State for each f
iscal year under this subchapter for--
 `(i) child care services, that meet the requirements of this
 subchapter, that are provided to eligible children in the State on a sliding fe
e scale basis using funding methods provided for in section 658E(c)(2)(A), with 
priority being given for services provided to children of families with very low
 family incomes (taking into consideration family size) and to children with spe
cial needs; and
 `(ii) activities designed to improve the availability and qu
ality of child care.
 `(C) ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE AND TO INCR
EASE THE AVAILABILITY OF EARLY CHILDHOOD DEVELOPMENT AND BEFORE- AND AFTER-SCHOO
L CARE SERVICES- The State shall reserve 25 percent of the amounts provided to t
he State for each fiscal year under this subchapter to carry out activities desi
gned to improve the quality of child care (as described in section 658G) and to 
provide before- and after-school and early childhood development services (as de
scribed in section 658H).
 `(4) PAYMENT RATES-
 `(A) IN GENERAL- The State plan shall provide assurances that pa
yment rates for the provision of child care services for which assistance is pro
vided under this subchapter are sufficient to ensure equal access for eligible c
hildren to comparable child care services in the State or substate area that are
 provided to children whose parents are not eligible to receive assistance under
 this subchapter or for child care assistance under any other Federal or State p
rograms. Such payment rates shall take into account the variations in the costs 
of providing child care in different settings and to children of different age g
roups, and the additional costs of providing child care for children with specia
l needs.
 `(B) CONSTRUCTION- Nothing in this paragraph shall be construed 
to create a private right of action.
 `(5) SLIDING FEE SCALE- The State plan shall provide that the State 
will establish and periodically revise, by rule, a sliding fee scale that provid
es for cost sharing by the families that receive child care services for which a
ssistance is provided under this subchapter.
 `(d) APPROVAL OF APPLICATION- The Secretary shall approve an application
 that satisfies the requirements of this section.
SEC. 658F. 59
 LIMITATIONS ON STATE ALLOTMENTS.
 59 So in original. Probably should be `sec. 658f.'.
 `(a) NO ENTITLEMENT TO CONTRACT OR GRANT- Nothing in this subchapter sha
ll be construed--
 `(1) to entitle any child care provider or recipient of a child care
 certificate to any contract, grant or benefit; or
 `(2) to limit the right of any State to impose additional limitation
s or conditions on contracts or grants funded under this subchapter.
 `(b) CONSTRUCTION OF FACILITIES-
 `(1) IN GENERAL- No funds made available under this subchapter shall
 be expended for the purchase or improvement of land, or for the purchase, const
ruction, or permanent improvement (other than minor remodeling) of any building 
or facility.
 `(2) SECTARIAN AGENCY OR ORGANIZATION- In the case of a sectarian ag
ency or organization, no funds made available under this subchapter may be used 
for the purposes described in paragraph (1) except to the extent that renovation
 or repair is necessary to bring the facility of such agency or organization int
o compliance with health and safety requirements referred to in section 658E(c)(
2)(F).
`SEC. 658G. ACTIVITIES TO IMPROVE THE QUALITY OF CHILD CARE.
 `A State that receives financial assistance under this subchapter shall 
use not less than 20 percent of the amounts reserved by such State under section
 658E(c)(3)(C) for each fiscal year for one or more of the following:
 `(1) RESOURCE AND REFERRAL PROGRAMS- Operating directly or providing
 financial assistance to private nonprofit organizations or public organizations
 (including units of general purpose local government) for the development, esta
blishment, expansion, operation, and coordination of resource and referral progr
ams specifically related to child care.
 `(2) GRANTS OR LOANS TO ASSIST IN MEETING STATE AND LOCAL STANDARDS-
 Making grants or providing loans to child care providers to assist such provide
rs in meeting applicable State and local child care standards.
 `(3) MONITORING OF COMPLIANCE WITH LICENSING AND REGULATORY REQUIREM
ENTS- Improving the monitoring of compliance with, and enforcement of, State and
 local licensing and regulatory requirements (including registration requirement
s).
 `(4) TRAINING- Providing training and technical assistance in areas 
appropriate to the provision of child care services, such as training in health 
and safety, nutrition, first aid, the recognition of communicable diseases, chil
d abuse detection and prevention, and the care of children with special needs.
 `(5) COMPENSATION- Improving salaries and other compensation paid to
 full- and part-time staff who provide child care services for which assistance 
is provided under this subchapter.
`SEC. 658H. EARLY CHILDHOOD DEVELOPMENT AND BEFORE- AND AFTER-SCHOOL SERV
ICES.
 `(a) IN GENERAL- A State that receives financial assistance under this s
ubchapter shall use not less than 75 percent of the amounts reserved by such Sta
te under section 658E(c)(3)(C) for each fiscal year to establish or expand and c
onduct, through the provision of grants or contracts, early childhood developmen
t or before- and after-school child care programs, or both.
 `(b) PROGRAM DESCRIPTION- Programs that receive assistance under this se
ction shall--
 `(1) in the case of early childhood development programs, consist of
 services that are not intended to serve as a substitute for a compulsory academ
ic programs but that are intended to provide an environment that enhances the ed
ucational, social, cultural, emotional, and recreational development of children
; and
 `(2) in the case of before- and after-school child care programs--
 `(A) be provided Monday through Friday, including school holiday
s and vacation periods other than legal public holidays, to children attending e
arly childhood development programs, kindergarten, or elementary or secondary sc
hool classes during such times of the day and on such days that regular instruct
ional services are not in session; and
 `(B) not be intended to extend or replace the regular academic p
rogram.
 `(c) PRIORITY FOR ASSISTANCE- In awarding grants and contracts under thi
s section, the State shall give the highest priority to geographic areas within 
the State that are eligible to receive grants under section 1006 of the Elementa
ry and Secondary Education Act of 1965, and shall then give priority to--
 `(1) any other areas with concentrations of poverty; and
 `(2) any areas with very high or very low population densities.

`SEC. 658I. ADMINISTRATION AND ENFORCEMENT.
 `(a) ADMINISTRATION- The Secretary shall--
 `(1) coordinate all activities of the Department of Health and Human
 Services relating to child care, and, to the maximum extent practicable, coordi
nate such activities with similar activities of other Federal entities;
 `(2) collect, publish and make available to the public a listing of 
State child care standards at least once every 3 years; and
 `(3) provide technical assistance to assist States to carry out this
 subchapter, including assistance on a reimbursable basis.
 `(b) Enforcement-
 `(1) REVIEW OF COMPLIANCE WITH STATE PLAN- The Secretary shall revie
w and monitor State compliance with this subchapter and the plan approved under 
section 658E(c) for the State, and shall have the power to terminate payments to
 the State in accordance with paragraph (2).
 `(2) Noncompliance-
 `(A) IN GENERAL- If the Secretary, after reasonable notice to a 
State and opportunity for a hearing, finds that--
 `(i) there has been a failure by the State to comply substan
tially with any provision or requirement set forth in the plan approved under se
ction 658E(c) for the State; or
 `(ii) in the operation of any program for which assistance i
s provided under this subchapter there is a failure by the State to comply subst
antially with any provision of this subchapter;
the Secretary shall notify the State of the finding and that no f
urther payments may be made to such State under this subchapter (or, in the case
 of noncompliance in the operation of a program or activity, that no further pay
ments to the State will be made with respect to such program or activity) until 
the Secretary is satisfied that there is no longer any such failure to comply or
 that the noncompliance will be promptly corrected.
 `(B) ADDITIONAL SANCTIONS- In the case of a finding of noncompli
ance made pursuant to subparagraph (A), the Secretary may, in addition to imposi
ng the sanctions described in such subparagraph, impose other appropriate sancti
ons, including recoupment of money improperly expended for purposes prohibited o
r not authorized by this subchapter, and disqualification from the receipt of fi
nancial assistance under this subchapter.
 `(C) NOTICE- The notice required under subparagraph (A) shall in
clude a specific identification of any additional sanction being imposed under s
ubparagraph (B).
 `(3) ISSUANCE OF RULES- The Secretary shall establish by rule proced
ures for--
 `(A) receiving, processing, and determining the validity of comp
laints concerning any failure of a State to comply with the State plan or any re
quirement of this subchapter; and
 `(B) imposing sanctions under this section.
`SEC. 658J. PAYMENTS.
 `(a) IN GENERAL- Subject to the availability of appropriations, a State 
that has an application approved by the Secretary under section 658E(d) shall be
 entitled to a payment under this section for each fiscal year in an amount equa
l to its allotment under section 658O for such fiscal year.
 `(b) METHOD OF PAYMENT-
 `(1) IN GENERAL- Subject to paragraph (2), the Secretary may make pa
yments to a State in installments, and in advance or by way of reimbursement, wi
th necessary adjustments on account of overpayments or underpayments, as the Sec
retary may determine.
 `(2) LIMITATION- The Secretary may not make such payments in a manne
r that prevents the State from complying with the requirement specified in secti
on 658E(c)(3).
 `(c) SPENDING OF FUNDS BY STATE- Payments to a State from the allotment 
under section 658O for any fiscal year may be expended by the State in that fisc
al year or in the succeeding fiscal year.
`SEC. 658K. ANNUAL REPORT AND AUDITS.
 `(a) ANNUAL REPORT- Not later than December 31, 1992, and annually there
after, a State that receives assistance under this subchapter shall prepare and 
submit to the Secretary a report--
 `(1) specifying the uses for which the State expended funds specifie
d under paragraph (3) of section 658E(c) and the amount of funds expended for su
ch uses;
 `(2) containing available data on the manner in which the child care
 needs of families in the State are being fulfilled, including information conce
rning--
 `(A) the number of children being assisted with funds provided u
nder this subchapter, and under other Federal child care and pre-school programs
;
 `(B) the type and number of child care programs, child care prov
iders, caregivers, and support personnel located in the State;
 `(C) salaries and other compensation paid to full- and part-time
 staff who provide child care services; and
 `(D) activities in the State to encourage public-private partner
ships that promote business involvement in meeting child care needs;
 `(3) describing the extent to which the affordability and availabili
ty of child care services has increased;
 `(4) if applicable, describing, in either the first or second such r
eport, the findings of the review of State licensing and regulatory requirements
 and policies described in section 658E(c), including a description of actions t
aken by the State in response to such reviews;
 `(5) containing an explanation of any State action, in accordance wi
th section 658E, to reduce the level of child care standards in the State, if ap
plicable; and
 `(6) describing the standards and health and safety requirements app
licable to child care providers in the State, including a description of State e
fforts to improve the quality of child care;
during the period for which such report is required to be submitted.
 `(b) AUDITS-
 `(1) REQUIREMENT- A State shall, after the close of each program per
iod covered by a 60
 application approved under section 658E(d) audit its expenditures during suc
h program period from amounts received under this subchapter.
 60 So in original. Probably should be `an'.
 `(2) INDEPENDENT AUDITOR- Audits under this subsection shall be cond
ucted by an entity that is independent of any agency administering activities th
at receive assistance under this subchapter and be in accordance with generally 
accepted auditing principles.
 `(3) SUBMISSION- Not later than 30 days after the completion of an a
udit under this subsection, the State shall submit a copy of the audit to the le
gislature of the State and to the Secretary.
 `(4) REPAYMENT OF AMOUNTS- Each State shall repay to the United Stat
es any amounts determined through an audit under this subsection not to have bee
n expended in accordance with this subchapter, or the Secretary may offset such 
amounts against any other amount to which the State is or may be entitles under 
this subchapter.
`SEC. 658L. REPORT BY SECRETARY.
 `Not later than July 31, 1993, and annually thereafter, the Secretary sh
all prepare and submit to the Committee on Education and Labor of the House of R
epresentatives and the Committee on Labor and Human Resources of the Senate a re
port that contains a summary and analysis of the data and information provided t
o the Secretary in the State reports submitted under section 658K. Such report s
hall include an assessment, and where appropriate, recommendations for the Congr
ess concerning efforts that should be undertaken to improve the access of the pu
blic to quality and affordable child care in the United States.
`SEC. 658M. LIMITATIONS ON USE OF FINANCIAL ASSISTANCE FOR CERTAIN PURPOSE
S.
 `(a) SECTARIAN PURPOSES AND ACTIVITIES- No financial assistance provided
 under this subchapter, pursuant to the choice of a parent under section 658E(c)
(2)(A)(i)(I) or through any other grant or contract under the State plan, shall 
be expended for any sectarian purpose or activity, including sectarian worship o
r instruction.
 `(b) TUITION- With regard to services provided to students enrolled in g
rades 1 through 12, no financial assistance provided under this subchapter shall
 be expended for--
 `(1) any services provided to such students during the regular schoo
l day;
 `(2) any services for which such students receive academic credit to
ward graduation; or
 `(3) any instructional services which supplant or duplicate the acad
emic program of any public or private school.
`SEC. 658N. NONDISCRIMINATION.
 `(a) RELIGIOUS NONDISCRIMINATION-
 `(1) CONSTRUCTION-
 `(A) IN GENERAL- Except as provided in subparagraph (B), nothing
 in this section shall be construed to modify or affect the provisions of any ot
her Federal law or regulation that relates to discrimination in employment on th
e basis of religion.
 `(B) EXCEPTION- A sectarian organization may require that employ
ees adhere to the religious tenets and teachings of such organization, and such 
organization may require that employees adhere to rules forbidding the use of dr
ugs or alcohol.
 `(2) DISCRIMINATION AGAINST CHILD-
 `(A) IN GENERAL- A child care provider (other than a family chil
d care provider) that receives assistance under this subchapter shall not discri
minate against any child on the basis of religion in providing child care servic
es.
 `(B) NON-FUNDED CHILD CARE SLOTS- Nothing in this section shall 
prohibit a child care provider from selecting children for child care slots that
 are not funded directly with assistance provided under this subchapter because 
such children or their family members participate on a regular basis in other ac
tivities of the organization that owns or operates such provider.
 `(3) EMPLOYMENT IN GENERAL-
 `(A) PROHIBITION- A child care provider that receives assistance
 under this subchapter shall not discriminate in employment on the basis of the 
religion of the prospective employee if such employee's primary responsibility i
s or will be working directly with children in the provision of child care servi
ces.
 `(B) QUALIFIED APPLICANTS- If two or more prospective employees 
are qualified for any position with a child care provider receiving assistance u
nder this subchapter, nothing in this section shall prohibit such child care pro
vider from employing a prospective employee who is already participating on a re
gular basis in other activities of the organization that owns or operates such p
rovider.
 `(C) PRESENT EMPLOYEES- This paragraph shall not apply to employ
ees of child care providers receiving assistance under this subchapter if such e
mployees are employed with the provider on the date of enactment of this subchap
ter.
 `(4) EMPLOYMENT AND ADMISSION PRACTICES- Notwithstanding paragraphs 
(1)(B), (2), and (3), if assistance provided under this subchapter, and any othe
r Federal or State program, amounts to 80 percent or more of the operating budge
t of a child care provider that receives such assistance, the Secretary shall no
t permit such provider to receive any further assistance under this subchapter u
nless the grant or contract relating to the financial assistance, or the employm
ent and admissions policies of the provider, specifically provides that no perso
n with responsibilities in the operation of the child care program, project, or 
activity of the provider will discriminate against any individual in employment,
 if such employee's primary responsibility is or will be working directly with c
hildren in the provision of child care, or admissions because of the religion of
 such individual.
 `(b) EFFECT ON STATE LAW- Nothing in this subchapter shall be construed 
to supersede or modify any provision of a State constitution or State law that p
rohibits the expenditure of public funds in or by sectarian institutions, except
 that no provision of a State constitution or State law shall be construed to pr
ohibit the expenditure in or by sectarian institutions of any Federal funds prov
ided under this subchapter.
`SEC. 658O. AMOUNTS RESERVED; ALLOTMENTS.
 `(a) AMOUNTS RESERVED-
 `(1) TERRITORIES AND POSSESSIONS- The Secretary shall reserve not to
 exceed one half of 1 percent of the amount appropriated under this subchapter i
n each fiscal year for payments to Guam, American Samoa, the Virgin Islands of t
he United States, the Commonwealth of the Northern Mariana Islands, and the Trus
t Territory of the Pacific Islands to be allotted in accordance with their respe
ctive needs.
 `(2) INDIANS TRIBES- The Secretary shall reserve not more than 3 per
cent of the amount appropriated under section 658B in each fiscal year for payme
nts to Indian tribes and tribal organizations with applications approved under s
ubsection (c).
 `(b) State Allotment-
 `(1) GENERAL RULE- From the amounts appropriated under section 658B 
for each fiscal year remaining after reservations under subsection (a), the Secr
etary shall allot to each State an amount equal to the sum of--
 `(A) an amount that bears the same ratio to 50 percent of such r
emainder as the product of the young child factor of the State and the allotment
 percentage of the State bears to the sum of the corresponding products for all 
States; and
 `(B) an amount that bears the same ratio to 50 percent of such r
emainder as the product of the school lunch factor of the State and the allotmen
t percentage of the State bears to the sum of the corresponding products for all
 States.
 `(2) YOUNG CHILD FACTOR- The term `young child factor' means the rat
io of the number of children in the State under 5 years of age to the number of 
such children in all States as provided by the most recent annual estimates of p
opulation in the States by the Census Bureau of the Department of Commerce.

 `(3) SCHOOL LUNCH FACTOR- The term `school lunch factor' means the r
atio of the number of children in the State who are receiving free or reduced pr
ice lunches under the school lunch program established under the National School
 Lunch Act (42 U.S.C. 1751 et seq.) to the number of such children in all the St
ates as determined annually by the Department of Agriculture.
 `(4) Allotment percentage-
 `(A) IN GENERAL- The allotment percentage for a State is determi
ned by dividing the per capita income of all individuals in the United States, b
y the per capita income of all individuals in the State.
 `(B) LIMITATIONS- If an allotment percentage determined under su
bparagraph (A)--
 `(i) exceeds 1.2 percent, then the allotment percentage of t
hat State shall be considered to be 1.2 percent; and
 `(ii) is less than 0.8 percent, then the allotment percentag
e of the State shall be considered to be 0.8 percent.
 `(C) PER CAPITA INCOME- For purposes of subparagraph (A), per ca
pita income shall be--
 `(i) determined at 2-year intervals;
 `(ii) applied for the 2-year period beginning on October 1 o
f the first fiscal year beginning on the date such determination is made; and
 `(iii) equal to the average of the annual per capita incomes
 for the most recent period of 3 consecutive years for which satisfactory data a
re available from the Department of Commerce at the time such determination is m
ade.
 `(c) PAYMENTS FOR THE BENEFIT OF INDIAN CHILDREN-
 `(1) GENERAL AUTHORITY- From amounts reserved under subsection (a)(2
), the Secretary may make grants to or enter into contracts with Indian tribes o
r tribal organizations that submit applications under this section, for the plan
ning and carrying out of programs or activities consistent with the purposes of 
this subchapter.
 `(2) APPLICATIONS AND REQUIREMENTS- An application for a grant or co
ntract under this section shall provide that:
 `(A) COORDINATION- The applicant will coordinate, to the maximum
 extent feasible, with the lead agency in the State or States in which the appli
cant will carry out programs or activities under this section.
 `(B) SERVICES ON RESERVATIONS- In the case of an applicant locat
ed in a State other than Alaska, California, or Oklahoma, programs and activitie
s under this section will be carried out on the Indian reservation for the benef
it of Indian children.
 `(C) REPORTS AND AUDITS- The applicant will make such reports on
, and conduct such audits of, programs and activities under a grant or contract 
under this section as the Secretary may require.
 `(3) CONSIDERATION OF SECRETARIAL APPROVAL- In determining whether t
o approve an application for a grant or contract under this section, the Secreta
ry shall take into consideration--
 `(A) the availability of child care services provided in accorda
nce with this subchapter by the State or States in which the applicant proposes 
to carry out a program to provide child care services; and
 `(B) whether the applicant has the ability (including skills, pe
rsonnel, resources, community support, and other necessary components) to satisf
actorily carry out the proposed program or activity.
 `(4) THREE-YEAR LIMIT- Grants or contracts under this section shall 
be for periods not to exceed 3 years.
 `(5) DUAL ELIGIBILITY OF INDIAN CHILDREN- The awarding of a grant or
 contract under this section for programs or activities to be conducted in a Sta
te or States shall not affect the eligibility of any Indian child to receive ser
vices provided or to participate in programs and activities carried our 61<
/ul>
 under a grant to the State or States under this subchapter.
 61 So in original. Probably should be `out'.
 `(d) DATA AND INFORMATION- The Secretary shall obtain from each appropri
ate Federal agency, the most recent data and information necessary to determine 
the allotments provided for in subsection (b).
 `(e) Reallotments-
 `(1) IN GENERAL- Any portion of the allotment under subsection (b) t
o a State that the Secretary determines is not required to carry out a State pla
n approved under section 658E(d), in the period for which the allotment is made 
available, shall be reallotted by the Secretary to other States in proportion to
 the original allotments to the other States.
 `(2) LIMITATIONS-
 `(A) REDUCTION- The amount of any reallotment to which a State i
s entitled to under paragraph (1) shall be reduced to the extent that it exceeds
 the amount that the Secretary estimates will be used in the State to carry out 
a State plan approved under section 658E(d).
 `(B) REALLOTMENTS- The amount of such reduction shall be similar
ly reallotted among States for which no reduction in an allotment or reallotment
 is required by this subsection.
 `(3) AMOUNTS REALLOTTED- For purposes of any other section of this s
ubchapter, any amount reallotted to a State under this subsection shall be consi
dered to be part of the allotment made under subsection (b) to the State.
 `(f) DEFINITION- For the purposes of this section, the term `State' incl
udes only the 50 States, the District of Columbia, and the Commonwealth of Puert
o Rico.
`SEC. 658P. DEFINITIONS.
 `As used in this subchapter:
 `(1) CAREGIVER- The term `caregiver' means an individual who provide
s a service directly to an eligible child on a person-to-person basis.
 `(2) CHILD CARE CERTIFICATE- The term `child care certificate' means
 a certificate (that may be a check or other disbursement) that is issued by a S
tate or local government under this subchapter directly to a parent who may use 
such certificate only as payment for child care services. Nothing in this subcha
pter shall preclude the use of such certificates for sectarian child care servic
es if freely chosen by the parent. For purposes of this subchapter, child care c
ertificates shall not be considered to be grants or contracts.
 `(3) ELEMENTARY SCHOOL- The term `elementary school' means a day or 
residential school that provides elementary education, as determined under State
 law.
 `(4) ELIGIBLE CHILD- The term `eligible child' means an individual--

 `(A) who is less than 13 years of age;
 `(B) whose family income does not exceed 75 percent of the State
 median income for a family of the same size; and
 `(C) who--
 `(i) resides with a parent or parents who are working or att
ending a job training or educational program; or
 `(ii) is receiving, or needs to receive, protective services
 and resides with a parent or parents not described in clause (i).
 `(5) ELIGIBLE CHILD CARE PROVIDER- The term `eligible child care pro
vider' means--
 `(A) a center-based child care provider, a group home child care
 provider, a family child care provider, or other provider of child care service
s for compensation that--
 `(i) is licensed, regulated, or registered under State law a
s described in section 658E(c)(2)(E); and
 `(ii) satisfies the State and local requirements, including 
those referred to in section 658E(c)(2)(F);
applicable to the child care services it provides; or
 `(B) a child care provider that is 18 years of age or older who 
provides child care services only to eligible children who are, by affinity or c
onsanguinity, or by court decree, the grandchild, niece, or nephew of such provi
der, if such provider is registered and complies with any State requirements tha
t govern child care provided by the relative involved.
 `(6) FAMILY CHILD CARE PROVIDER- The term `family child care provide
r' means one individual who provides child care services for fewer than 24 hours
 per day, as the sole caregiver, and in a private residence.
 `(7) INDIAN TRIBE- The term `Indian tribe' has the meaning given it 
in section 4(b) of the Indian Self-Determination and Education Assistance Act (2
5 U.S.C. 450b(b)).
 `(8) LEAD AGENCY- The term `lead agency' means the agency designated
 under section 658B(a).
 `(9) PARENT- The term `parent' includes a legal guardian or other pe
rson standing in loco parentis.
 `(10) SECONDARY SCHOOL- The term `secondary school' means a day or r
esidential school which provides secondary education, as determined under State 
law.
 `(11) SECRETARY- The term `Secretary' means the Secretary of Health 
and Human Services unless the context specifies otherwise.
 `(12) SLIDING FEE SCALE- The term `sliding fee scale' means a system
 of cost sharing by a family based on income and size of the family.
 `(13) STATE- The term `State' means any of the several States, the D
istrict of Columbia, the Virgin Islands of the United States, the Commonwealth o
f Puerto Rico, Guam, American Samoa, the Commonwealth of the Northern Mariana Is
lands, and the Trust Territory of the Pacific Islands.
 `(14) TRIBAL ORGANIZATION- The term `tribal organization' has the me
aning given it in section 4(c) of the Indian Self-Determination and Education As
sistance Act (25 U.S.C. 450b(c)).
`SEC. 658Q. PARENTAL RIGHTS AND RESPONSIBILITIES.
 `Nothing in this subchapter shall be construed or applied in any manner 
to infringe on or usurp the moral and legal rights and responsibilities of paren
ts or legal guardians.
`SEC. 658R. SEVERABILITY.
 `If any provision of this subchapter or the application thereof to any p
erson or circumstance is held invalid, the invalidity shall not affect other pro
visions of applications of this subchapter which can be given effect without reg
ard to the invalid provision or application, and to this end the provisions of t
his subchapter shall be severable.'.
Subtitle B--Old-Age, Survivors, and Disability Insurance
SEC. 5100. TABLE OF CONTENTS.
Sec. 5100. Table of contents.
Sec. 5101. Amendment of the Social Security Act.
Sec. 5102. Continuation of disability benefits during appeal.
Sec. 5103. Repeal of special disability standard for widows and widowers.
Sec. 5104. Dependency requirements applicable to a child adopted by a survivi
ng spouse.
Sec. 5105. Representative payee reforms.
Sec. 5106. Fees for representation of claimants in administrative proceedings
.
Sec. 5107. Applicability of administrative res judicata; related notice requi
rements.
Sec. 5108. Demonstration projects relating to accountability for telephone se
rvice center communications.
Sec. 5109. Notice requirements.
Sec. 5110. Telephone access to the Social Security Administration.
Sec. 5111. Amendments relating to social security account statements.
Sec. 5112. Trial work period during rolling five-year period for all disabled
 beneficiaries.
Sec. 5113. Continuation of benefits on account of participation in a non-stat
e vocational rehabilitation program.
Sec. 5114. Limitation on new entitlement to special age-72 payments.
Sec. 5115. Elimination of advanced crediting to the trust funds of social sec
urity payroll taxes.
Sec. 5116. Elimination of eligibility for retroactive benefits for certain in
dividuals eligible for reduced benefits
Sec. 5117. Consolidation of old methods of computing primary insurance amount
s.
Sec. 5118. Suspension of dependent's benefits when the worker is in an extend
ed period of eligibility.
Sec. 5119. Entitlement to benefits of deemed spouse and legal spouse.
Sec. 5120. Vocational rehabilitation demonstration projects.
Sec. 5121. Exemption for certain aliens, receiving amnesty under the Immigrat
ion and Nationality Act, from prosecution for misreporting of earnings or misuse
 of social security account numbers or social security cards.
Sec. 5122. Reduction of amount of wages needed to earn a year of coverage app
licable in determining special minimum primary insurance amount.
Sec. 5123. Charging of earnings of corporate directors.
Sec. 5124. Collection of employee social security and railroad retirement tax
es on taxable group-term life insurance provided to retirees.
Sec. 5125. Tier 1 railroad retirement tax rates explicitly determined by refe
rence to social security taxes.
Sec. 5126. Transfer to railroad retirement account.
Sec. 5127. Waiver of 2-year waiting period for independent entitlement to div
orced spouse's benefits.
Sec. 5128. Modification of the preeffectuation review requirement applicable 
to disability insurance cases.
Sec. 5129. Recovery of OASDI overpayments by means of reduction in tax refund
s.
Sec. 5130. Miscellaneous technical corrections.
SEC. 5101. AMENDMENT OF THE SOCIAL SECURITY ACT.
 Except as otherwise expressly provided, whenever in this subtitle an ame
ndment or repeal is expressed in terms of an amendment to, or repeal of, a secti
on or other provision, the reference shall be considered to be made to a section
 or other provision of the Social Security Act.
SEC. 5102. CONTINUATION OF DISABILITY BENEFITS DURING APPEAL.
 Subsection (g) of section 223 (42 U.S.C. 423(g)) is amended--
 (1) in paragraph (1), in the matter following subparagraph (C), by i
nserting `or' after `hearing,', and by striking `pending, or (iii) June 1991.' a
nd inserting `pending.'; and
 (2) by striking paragraph (3).
SEC. 5103. REPEAL OF SPECIAL DISABILITY STANDARD FOR WIDOWS AND WIDOWERS.
 (a) IN GENERAL- Section 223(d)(2) (42 U.S.C. 423(d)(2)) is amended--
 (1) in subparagraph (A), by striking `(except a widow, surviving div
orced wife, widower, or surviving divorced husband for purposes of section 202(e
) or (f))';
 (2) by striking subparagraph (B); and
 (3) by redesignating subparagraph (C) as subparagraph (B).
 (b) CONFORMING AMENDMENTS-
 (1) The third sentence of section 216(i)(1) (42 U.S.C. 416(i)(1)) is
 amended by striking `(2)(C)' and inserting `(2)(B)'.
 (2) Section 223(f)(1)(B) (42 U.S.C. 423(f)(1)(B)) is amended to read
 as follows:
 `(B) the individual is now able to engage in substantial gainful
 activity; or'.
 (3) Section 223(f)(2)(A)(ii) (42 U.S.C. 423(f)(2)(A)(ii)) is amended
 to read as follows:
 `(ii) the individual is now able to engage in substantial ga
inful activity, or'.
 (4) Section 223(f)(3) (42 U.S.C. 423(f)(3)) is amended by striking `
therefore--' and all that follows and inserting `therefore the individual is abl
e to engage in substantial gainful activity; or'.
 (5) Section 223(f) is further amended, in the matter following parag
raph (4), by striking `(or gainful activity in the case of a widow, surviving di
vorced wife, widower, or surviving divorced husband)' each place it appears.
 (c) TRANSITIONAL RULES RELATING TO MEDICAID AND MEDICARE ELIGIBILITY-
 (1) DETERMINATION OF MEDICAID ELIGIBILITY- Section 1634(d) (42 U.S.C
. 1383c(d)) is amended--
 (A) by redesignating paragraphs (1) and (2) as subparagraphs (A)
 and (B), respectively;
 (B) by striking `(d) If any person--' and inserting `(d)(1) This
 subsection applies with respect to any person who--';
 (C) in subparagraph (A) (as redesignated), by striking `as requi
red' and all that follows through `but not entitled' and inserting `being then n
ot entitled';
 (D) in subparagraph (B) (as redesignated), by striking `section 
1616(a),' and inserting `section 1616(a) (or payments of the type described in s
ection 212(a) of Public Law 93-66).'; and
 (E) by striking `such person shall' and all that follows and ins
erting the following new paragraph:
 `(2) For purposes of title XIX, each person with respect to whom this su
bsection applies--
 `(A) shall be deemed to be a recipient of supplemental security inco
me benefits under this title if such person received such a benefit for the mont
h before the month in which such person began to receive a benefit described in 
paragraph (1)(A), and
 `(B) shall be deemed to be a recipient of State supplementary paymen
ts of the type referred to in section 1616(a) of this Act (or payments of the ty
pe described in section 212(a) of Public Law 93-66) if such person received such
 a payment for the month before the month in which such person began to receive 
a benefit described in paragraph (1)(A),
for so long as such person (i) would be eligible for such supplemental se
curity income benefits, or such State supplementary payments (or payments of the
 type described in section 212(a) of Public Law 93-66), in the absence of benefi
ts described in paragraph (1)(A), and (ii) is not entitled to hospital insurance
 benefits under part A of title XVIII.'.
 (2) INCLUSION OF MONTHS OF SSI ELIGIBILITY WITHIN 5-MONTH DISABILITY
 WAITING PERIOD AND 24-MONTH MEDICARE WAITING PERIOD-
 (A) WIDOW'S BENEFITS BASED ON DISABILITY- Section 202(e)(5) (42 
U.S.C. 402(e)(5)) is amended--
 (i) in subparagraph (B), by striking `(i)' and `(ii)' and in
serting `(I)' and `(II)', respectively;
 (ii) by redesignating subparagraphs (A) and (B) as clauses (
i) and (ii), respectively;
 (iii) by inserting `(A)' after `(5)'; and
 (iv) by adding at the end the following new subparagraph:
 `(B) For purposes of paragraph (1)(F)(i), each month in the period comme
ncing with the first month for which such widow or surviving divorced wife is fi
rst eligible for supplemental security income benefits under title XVI, or State
 supplementary payments of the type referred to in section 1616(a) (or payments 
of the type described in section 212(a) of Public Law 93-66) which are paid by t
he Secretary under an agreement referred to in section 1616(a) (or in section 21
2(b) of Public Law 93-66), shall be included as one of the months of such waitin
g period for which the requirements of subparagraph (A) have been met.'.
 (B) WIDOWER'S BENEFITS BASED ON DISABILITY- Section 202(f)(6) (4
2 U.S.C. 402(f)(6)) is amended--
 (i) in subparagraph (B), by striking `(i)' and `(ii)' and in
serting `(I)' and `(II)', respectively;
 (ii) by redesignating subparagraphs (A) and (B) as clauses (
i) and (ii), respectively;
 (iii) by inserting `(A)' after `(6)'; and
 (iv) by adding at the end the following new subparagraph:
 `(B) For purposes of paragraph (1)(F)(i), each month in the period comme
ncing with the first month for which such widower or surviving divorced husband 
is first eligible for supplemental security income benefits under title XVI, or 
State supplementary payments of the type referred to in section 1616(a) (or paym
ents of the type described in section 212(a) of Public Law 93-66) which are paid
 by the Secretary under an agreement referred to in section 1616(a) (or in secti
on 212(b) of Public Law 93-66), shall be included as one of the months of such w
aiting period for which the requirements of subparagraph (A) have been met.'.
 (C) MEDICARE BENEFITS- Section 226(e)(1) (42 U.S.C. 426(e)(1)) i
s amended--
 (i) by redesignating subparagraphs (A) and (B) as clauses (i
) and (ii), respectively;
 (ii) by inserting `(A)' after `(e)(1)'; and
 (iii) by adding at the end the following new subparagraph:
 `(B) For purposes of subsection (b)(2)(A)(iii), each month in the period
 commencing with the first month for which an individual is first eligible for s
upplemental security income benefits under title XVI, or State supplementary pay
ments of the type referred to in section 1616(a) of this Act (or payments of the
 type described in section 212(a) of Public Law 93-66) which are paid by the Sec
retary under an agreement referred to in section 1616(a) (or in section 212(b) o
f Public Law 93-66), shall be included as one of the 24 months for which such in
dividual must have been entitled to widow's or widower's insurance benefits on t
he basis of disability in order to become entitled to hospital insurance benefit
s on that basis.'.
 (d) DEEMED DISABILITY FOR PURPOSES OF ENTITLEMENT TO WIDOW'S AND WIDOWER
'S INSURANCE BENEFITS FOR WIDOWS AND WIDOWERS ON SSI ROLLS-
 (1) WIDOW'S INSURANCE BENEFITS- Section 202(e) (42 U.S.C. 402(e)) is
 amended by adding at the end the following new paragraph:
 `(9) An individual shall be deemed to be under a disability for purposes
 of paragraph (1)(B)(ii) if such individual is eligible for supplemental securit
y income benefits under title XVI, or State supplementary payments of the type r
eferred to in section 1616(a) (or payments of the type described in section 212(
a) of Public Law 93-66) which are paid by the Secretary under an agreement refer
red to in section 1616(a) (or in section 212(b) of Public Law 93-66), for the mo
nth for which all requirements of paragraph (1) for entitlement to benefits unde
r this subsection (other than being under a disability) are met.'.
 (2) WIDOWER'S INSURANCE BENEFITS- Section 202(f) (42 U.S.C. 402(f)) 
is amended by adding at the end the following new paragraph:
 `(9) An individual shall be deemed to be under a disability for purposes
 of paragraph (1)(B)(ii) if such individual is eligible for supplemental securit
y income benefits under title XVI, or State supplementary payments of the type r
eferred to in section 1616(a) (or payments of the type described in section 212(
a) of Public Law 93-66) which are paid by the Secretary under an agreement refer
red to in such section 1616(a) (or in section 212(b) of Public Law 93-66), for t
he month for which all requirements of paragraph (1) for entitlement to benefits
 under this subsection (other than being under a disability) are met.'.
 (e) EFFECTIVE DATE-
 (1) IN GENERAL- The amendments made by this section (other than para
graphs (1) and (2)(C) of subsection (c)) shall apply with respect to monthly ins
urance benefits for months after December 1990 for which applications are filed 
on or after January 1, 1991, or are pending on such date. The amendments made by
 subsection (c)(1) shall apply with respect to medical assistance provided after
 December 1990. The amendments made by subsection (c)(2)(C) shall apply with res
pect to items and services furnished after December 1990.
 (2) APPLICATION REQUIREMENTS FOR CERTAIN INDIVIDUALS ON BENEFIT ROLL
S- In the case of any individual who--
 (A) is entitled to disability insurance benefits under section 2
23 of the Social Security Act for December 1990 or is eligible for supplemental 
security income benefits under title XVI of such Act, or State supplementary pay
ments of the type referred to in section 1616(a) of such Act (or payments of the
 type described in section 212(a) of Public Law 93-66) which are paid by the Sec
retary under an agreement referred to in such section 1616(a) (or in section 212
(b) of Public Law 93-66), for January 1991,
 (B) applied for widow's or widower's insurance benefits under su
bsection (e) or (f) of section 202 of the Social Security Act during 1990, and
 (C) is not entitled to such benefits under such subsection (e) o
r (f) for any month on the basis of such application by reason of the definition
 of disability under section 223(d)(2)(B) of the Social Security Act (as in effe
ct immediately before the date of the enactment of this Act), and would have bee
n so entitled for such month on the basis of such application if the amendments 
made by this section had been applied with respect to such application,
for purposes of determining such individual's entitlement to such ben
efits under subsection (e) or (f) of section 202 of the Social Security Act for 
months after December 1990, the requirement of paragraph (1)(C)(i) of such subse
ction shall be deemed to have been met.
SEC. 5104. DEPENDENCY REQUIREMENTS APPLICABLE TO A CHILD ADOPTED BY A SURVIVI
NG SPOUSE.
 (a) IN GENERAL- Section 216(e) (42 U.S.C. 416(e)) is amended in the seco
nd sentence--
 (1) by striking `at the time of such individual's death living in su
ch individual's household' and inserting `either living with or receiving at lea
st one-half of his support from such individual at the time of such individual's
 death'; and
 (2) by striking `; except' and all that follows and inserting a peri
od.
 (b) EFFECTIVE DATE- The amendments made by this section shall apply with
 respect to benefits payable for months after December 1990, but only on the bas
is of applications filed after December 31, 1990.
SEC. 5105. REPRESENTATIVE PAYEE REFORMS.
 (a) IMPROVEMENTS IN THE REPRESENTATIVE PAYEE SELECTION AND RECRUITMENT P
ROCESS-
 (1) AUTHORITY FOR CERTIFICATION OF PAYMENTS TO REPRESENTATIVE PAYEES
-
 (A) TITLE II- Section 205(j)(1) (42 U.S.C. 405(j)) is amended to
 read as follows:
`Representative Payees
 `(j)(1) If the Secretary determines that the interest of any individual 
under this title would be served thereby, certification of payment of such indiv
idual's benefit under this title may be made, regardless of the legal competency
 or incompetency of the individual, either for direct payment to the individual,
 or for his or her use and benefit, to another individual, or an organization, w
ith respect to whom the requirements of paragraph (2) have been met (hereinafter
 in this subsection referred to as the individual's `representative payee'). If 
the Secretary or a court of competent jurisdiction determines that a representat
ive payee has misused any individual's benefit paid to such representative payee
 pursuant to this subsection or section 1631(a)(2), the Secretary shall promptly
 revoke certification for payment of benefits to such representative payee pursu
ant to this subsection and certify payment to an alternative representative paye
e or to the individual.'.
 (B) TITLE XVI-
 (i) IN GENERAL- Section 1631(a)(2)(A) (42 U.S.C. 1383(a)(2)(
A)) is amended to read as follows:
 `(A)(i) Payments of the benefit of any individual may be made to any suc
h individual or to the eligible spouse (if any) of such individual or partly to 
each.
 `(ii) Upon a determination by the Secretary that the interest of such in
dividual would be served thereby, or in the case of any individual or eligible s
pouse referred to in section 1611(e)(3)(A), such payments shall be made, regardl
ess of the legal competency or incompetency of the individual or eligible spouse
, to another individual, or an organization, with respect to whom the requiremen
ts of subparagraph (B) have been met (in this paragraph referred to as such indi
vidual's `representative payee') for the use and benefit of the individual or el
igible spouse.
 `(iii) If the Secretary or a court of competent jurisdiction determines 
that the representative payee of an individual or eligible spouse has misused an
y benefits which have been paid to the representative payee pursuant to clause (
ii) or section 205(j)(1), the Secretary shall promptly terminate payment of bene
fits to the representative payee pursuant to this subparagraph, and provide for 
payment of benefits to the individual or eligible spouse or to an alternative re
presentative payee of the individual or eligible spouse.'.
 (ii) CONFORMING AMENDMENTS- Section 1631(a)(2)(C) (42 U.S.C.
 1383(a)(2)(C)) is amended--
 (I) in clause (i), by striking `a person other than the 
individual or spouse entitled to such payment' and inserting `representative pay
ee of an individual or spouse';
 (II) in clauses (ii), (iii), and (iv), by striking `othe
r person to whom such payment is made' each place it appears and inserting `repr
esentative payee'; and
 (III) in clause (v)--
 (aa) by striking `person receiving payments on behalf of another' an
d inserting `representative payee'; and
 (bb) by striking `person receiving such payments' and inserting `rep
resentative payee'.
 (2) PROCEDURE FOR SELECTING REPRESENTATIVE PAYEES-
 (A) IN GENERAL-
 (i) TITLE II- Section 205(j)(2) (42 U.S.C. 405(j)(2)) is ame
nded to read as follows:
 `(2)(A) Any certification made under paragraph (1) for payment of benefi
ts to an individual's representative payee shall be made on the basis of--
 `(i) an investigation by the Secretary of the person to serve as rep
resentative payee, which shall be conducted in advance of such certification and
 shall, to the extent practicable, include a face-to-face interview with such pe
rson, and
 `(ii) adequate evidence that such certification is in the interest o
f such individual (as determined by the Secretary in regulations).
 `(B)(i) As part of the investigation referred to in subparagraph (A)(i),
 the Secretary shall--
 `(I) require the person being investigated to submit documented proo
f of the identity of such person, unless information establishing such identity 
has been submitted with an application for benefits under this title or title XV
I,
 `(II) verify such person's social security account number (or employ
er identification number),
 `(III) determine whether such person has been convicted of a violati
on of section 208 or 1632, and
 `(IV) determine whether certification of payment of benefits to such
 person has been revoked pursuant to this subsection or payment of benefits to s
uch person has been terminated pursuant to section 1631(a)(2)(A)(iii) by reason 
of misuse of funds paid as benefits under this title or title XVI.
 `(ii) The Secretary shall establish and maintain a centralized file, whi
ch shall be updated periodically and which shall be in a form which renders it r
eadily retrievable by each servicing office of the Social Security Administratio
n. Such file shall consist of--
 `(I) a list of the names and social security account numbers (or emp
loyer identification numbers) of all persons with respect to whom certification 
of payment of benefits has been revoked on or after January 1, 1991, pursuant to
 this subsection, or with respect to whom payment of benefits has been terminate
d on or after such date pursuant to section 1631(a)(2)(A)(iii), by reason of mis
use of funds paid as benefits under this title or title XVI, and
 `(II) a list of the names and social security account numbers (or em
ployer identification numbers) of all persons who have been convicted of a viola
tion of section 208 or 1632.
 `(C)(i) Benefits of an individual may not be certified for payment to an
y other person pursuant to this subsection if--
 `(I) such person has previously been convicted as described in subpa
ragraph (B)(i)(III),
 `(II) except as provided in clause (ii), certification of payment of
 benefits to such person under this subsection has previously been revoked as de
scribed in subparagraph (B)(i)(IV), or payment of benefits to such person pursua
nt to section 1631(a)(2)(A)(ii) has previously been terminated as described in s
ection 1631(a)(2)(B)(ii)(IV), or
 `(III) except as provided in clause (iii), such person is a creditor
 of such individual who provides such individual with goods or services for cons
ideration.
 `(ii) The Secretary shall prescribe regulations under which the Secretar
y may grant exemptions to any person from the provisions of clause (i)(II) on a 
case-by-case basis if such exemption is in the best interest of the individual w
hose benefits would be paid to such person pursuant to this subsection.
 `(iii) Clause (i)(III) shall not apply with respect to any person who is
 a creditor referred to therein if such creditor is--
 `(I) a relative of such individual if such relative resides in the s
ame household as such individual,
 `(II) a legal guardian or legal representative of such individual,
 `(III) a facility that is licensed or certified as a care facility u
nder the law of a State or a political subdivision of a State,
 `(IV) a person who is an administrator, owner, or employee of a faci
lity referred to in subclause (III) if such individual resides in such facility,
 and the certification of payment to such facility or such person is made only a
fter good faith efforts have been made by the local servicing office of the Soci
al Security Administration to locate an alternative representative payee to whom
 such certification of payment would serve the best interests of such individual
, or
 `(V) an individual who is determined by the Secretary, on the basis 
of written findings and under procedures which the Secretary shall prescribe by 
regulation, to be acceptable to serve as a representative payee.
 `(iv) The procedures referred to in clause (iii)(V) shall require the in
dividual who will serve as representative payee to establish, to the satisfactio
n of the Secretary, that--
 `(I) such individual poses no risk to the beneficiary,
 `(II) the financial relationship of such individual to the beneficia
ry poses no substantial conflict of interest, and
 `(III) no other more suitable representative payee can be found.
 `(D)(i) Subject to clause (ii), if the Secretary makes a determination d
escribed in the first sentence of paragraph (1) with respect to any individual's
 benefit and determines that direct payment of the benefit to the individual wou
ld cause substantial harm to the individual, the Secretary may defer (in the cas
e of initial entitlement) or suspend (in the case of existing entitlement) direc
t payment of such benefit to the individual, until such time as the selection of
 a representative payee is made pursuant to this subsection.
 `(ii)(I) Except as provided in subclause (II), any deferral or suspensio
n of direct payment of a benefit pursuant to clause (i) shall be for a period of
 not more than 1 month.
 `(II) Subclause (I) shall not apply in any case in which the individual 
is, as of the date of the Secretary's determination, legally incompetent or unde
r the age of 15.
 `(iii) Payment pursuant to this subsection of any benefits which are def
erred or suspended pending the selection of a representative payee shall be made
 to the individual or the representative payee as a single sum or over such peri
od of time as the Secretary determines is in the best interest of the individual
 entitled to such benefits.
 `(E)(i) Any individual who is dissatisfied with a determination by the S
ecretary to certify payment of such individual's benefit to a representative pay
ee under paragraph (1) or with the designation of a particular person to serve a
s representative payee shall be entitled to a hearing by the Secretary to the sa
me extent as is provided in subsection (b), and to judicial review of the Secret
ary's final decision as is provided in subsection (g).
 `(ii) In advance of the certification of payment of an individual's bene
fit to a representative payee under paragraph (1), the Secretary shall provide w
ritten notice of the Secretary's initial determination to certify such payment. 
Such notice shall be provided to such individual, except that, if such individua
l--
 `(I) is under the age of 15,
 `(II) is an unemancipated minor under the age of 18, or
 `(III) is legally incompetent,
then such notice shall be provided solely to the legal guardian or legal 
representative of such individual.
 `(iii) Any notice described in clause (ii) shall be clearly written in l
anguage that is easily understandable to the reader, shall identify the person t
o be designated as such individual's representative payee, and shall explain to 
the reader the right under clause (i) of such individual or of such individual's
 legal guardian or legal representative--
 `(I) to appeal a determination that a representative payee is necess
ary for such individual,
 `(II) to appeal the designation of a particular person to serve as t
he representative payee of such individual, and
 `(III) to review the evidence upon which such designation is based a
nd submit additional evidence.'.
 (ii) TITLE XVI- Section 1631(a)(2)(B) (42 U.S.C. 1383(a)(2)(B)) 
is amended to read as follows:
 `(B)(i) Any determination made under subparagraph (A) for payment of ben
efits to the representative payee of an individual or eligible spouse shall be m
ade on the basis of--
 `(I) an investigation by the Secretary of the person to serve as rep
resentative payee, which shall be conducted in advance of such payment, and shal
l, to the extent practicable, include a face-to-face interview with such person;
 and
 `(II) adequate evidence that such payment is in the interest of the 
individual or eligible spouse (as determined by the Secretary in regulations).
 `(ii) As part of the investigation referred to in clause (i)(I), the Sec
retary shall--
 `(I) require the person being investigated to submit documented proo
f of the identity of such person, unless information establishing such identity 
was submitted with an application for benefits under title II or this title;
 `(II) verify the social security account number (or employer identif
ication number) of such person;
 `(III) determine whether such person has been convicted of a violati
on of section 208 or 1632; and
 `(IV) determine whether payment of benefits to such person has been 
terminated pursuant to subparagraph (A)(iii), and whether certification of payme
nt of benefits to such person has been revoked pursuant to section 205(j), by re
ason of misuse of funds paid as benefits under title II or this title.
 `(iii) Benefits of an individual may not be paid to any other person pur
suant to subparagraph (A)(ii) if--
 `(I) such person has previously been convicted as described in claus
e (ii)(III);
 `(II) except as provided in clause (iv), payment of benefits to such
 person pursuant to subparagraph (A)(ii) has previously been terminated as descr
ibed in clause (ii)(IV), or certification of payment of benefits to such person 
under section 205(j) has previously been revoked as described in section 205(j)(
2)(B)(i)(IV); or
 `(III) except as provided in clause (v), such person is a creditor o
f such individual who provides such individual with goods or services for consid
eration.
 `(iv) The Secretary shall prescribe regulations under which the Secretar
y may grant an exemption from clause (iii)(II) to any person on a case-by-case b
asis if such exemption would be in the best interest of the individual or eligib
le spouse whose benefits under this title would be paid to such person pursuant 
to subparagraph (A)(ii).
 `(v) Clause (iii)(III) shall not apply with respect to any person who is
 a creditor referred to therein if such creditor is--
 `(I) a relative of such individual if such relative resides in the s
ame household as such individual;
 `(II) a legal guardian or legal representative of such individual;
 `(III) a facility that is licensed or certified as a care facility u
nder the law of a State or a political subdivision of a State;
 `(IV) a person who is an administrator, owner, or employee of a faci
lity referred to in subclause (III) if such individual resides in such facility,
 and the payment of benefits under this title to such facility or such person is
 made only after good faith efforts have been made by the local servicing office
 of the Social Security Administration to locate an alternative representative p
ayee to whom the payment of such benefits would serve the best interests of such
 individual; or
 `(V) an individual who is determined by the Secretary, on the basis 
of written findings and under procedures which the Secretary shall prescribe by 
regulation, to be acceptable to serve as a representative payee.
 `(vi) The procedures referred to in clause (v)(V) shall require the indi
vidual who will serve as representative payee to establish, to the satisfaction 
of the Secretary, that--
 `(I) such individual poses no risk to the beneficiary;
 `(II) the financial relationship of such individual to the beneficia
ry poses no substantial conflict of interest; and
 `(III) no other more suitable representative payee can be found.
 `(vii) Subject to clause (viii), if the Secretary makes a determination 
described in subparagraph (A)(ii) with respect to any individual's benefit and d
etermines that direct payment of the benefit to the individual would cause subst
antial harm to the individual, the Secretary may defer (in the case of initial e
ntitlement) or suspend (in the case of existing entitlement) direct payment of s
uch benefit to the individual, until such time as the selection of a representat
ive payee is made pursuant to this subparagraph.
 `(viii)(I) Except as provided in subclause (II), any deferral or suspens
ion of direct payment of a benefit pursuant to clause (vii) shall be for a perio
d of not more than 1 month.
 `(II) Subclause (I) shall not apply in any case in which the individual 
or eligible spouse is, as of the date of the Secretary's determination, legally 
incompetent, under the age 15 years, or a drug addict or alcoholic referred to i
n section 1611(e)(3)(A).
 `(ix) Payment pursuant to this subparagraph of any benefits which are de
ferred or suspended pending the selection of a representative payee shall be mad
e to the individual, or to the representative payee upon such selection, as a si
ngle sum or over such period of time as the Secretary determines is in the best 
interests of the individual entitled to such benefits.
 `(x) Any individual who is dissatisfied with a determination by the Secr
etary to pay such individual's benefits to a representative payee under this tit
le, or with the designation of a particular person to serve as representative pa
yee, shall be entitled to a hearing by the Secretary, and to judicial review of 
the Secretary's final decision, to the same extent as is provided in subsection 
(c).
 `(xi) In advance of the first payment of an individual's benefit to a re
presentative payee under subparagraph (A)(ii), the Secretary shall provide writt
en notice of the Secretary's initial determination to make any such payment. Suc
h notice shall be provided to such individual, except that, if such individual--

 `(I) is under the age of 15,
 `(II) is an unemancipated minor under the age of 18, or
 `(III) is legally incompetent,
then such notice shall be provided solely to the legal guardian or legal 
representative of such individual.
 `(xii) Any notice described in clause (xi) shall be clearly written in l
anguage that is easily understandable to the reader, shall identify the person t
o be designated as such individual's representative payee, and shall explain to 
the reader the right under clause (x) of such individual or of such individual's
 legal guardian or legal representative--
 `(I) to appeal a determination that a representative payee is necess
ary for such individual,
 `(II) to appeal the designation of a particular person to serve as t
he representative payee of such individual, and
 `(III) to review the evidence upon which such designation is based a
nd submit additional evidence.'.
 (B) REPORT ON FEASIBILITY OF OBTAINING READY ACCESS TO CERTAIN C
RIMINAL FRAUD RECORDS- As soon as practicable after the date of the enactment of
 this Act, the Secretary of Health and Human Services, in consultation with the 
Attorney General of the United States and the Secretary of the Treasury, shall s
tudy the feasibility of establishing and maintaining a current list, which would
 be readily available to local offices of the Social Security Administration for
 use in investigations undertaken pursuant to section 205(j)(2) or 1631(a)(2)(B)
 of the Social Security Act, of the names and social security account numbers of
 individuals who have been convicted of a violation of section 495 of title 18, 
United States Code. The Secretary of Health and Human Services shall, not later 
than July 1, 1992, submit the results of such study, together with any recommend
ations, to the Committee on Ways and Means of the House of Representatives and t
he Committee on Finance of the Senate.
 (3) PROVISION FOR COMPENSATION OF QUALIFIED ORGANIZATIONS SERVING AS
 REPRESENTATIVE PAYEES-
 (A) IN GENERAL-
 (i) TITLE II- Section 205(j) (42 U.S.C. 405(j)) is amended b
y redesignating paragraph (4) as paragraph (5), and by inserting after paragraph
 (3) the following new paragraph:
 `(4)(A) A qualified organization may collect from an individual a monthl
y fee for expenses (including overhead) incurred by such organization in providi
ng services performed as such individual's representative payee pursuant to this
 subsection if such fee does not exceed the lesser of--
 `(i) 10 percent of the monthly benefit involved, or
 `(ii) $25.00 per month.
Any agreement providing for a fee in excess of the amount permitted under
 this subparagraph shall be void and shall be treated as misuse by such organiza
tion of such individual's benefits.
 `(B) For purposes of this paragraph, the term `qualified organization' m
eans any community-based nonprofit social service agency which is bonded or lice
nsed in each State in which it serves as a representative payee and which, in ac
cordance with any applicable regulations of the Secretary--
 `(i) regularly provides services as the representative payee, pursua
nt to this subsection or section 1631(a)(2), concurrently to 5 or more individua
ls,
 `(ii) demonstrates to the satisfaction of the Secretary that such ag
ency is not otherwise a creditor of any such individual, and
 `(iii) was in existence on October 1, 1988.
The Secretary shall prescribe regulations under which the Secretary may g
rant an exception from clause (ii) for any individual on a case-by-case basis if
 such exception is in the best interests of such individual.
 `(C) Any qualified organization which knowingly charges or collects, dir
ectly or indirectly, any fee in excess of the maximum fee prescribed under subpa
ragraph (A) or makes any agreement, directly or indirectly, to charge or collect
 any fee in excess of such maximum fee, shall be fined in accordance with title 
18, United States Code, or imprisoned not more than 6 months, or both.
 `(D) This paragraph shall cease to be effective on July 1, 1994.'.
 (ii) TITLE XVI- Section 1631(a)(2) (42 U.S.C. 1383(a)(2)) is
 amended--
 (I) by redesignating subparagraph (D) as subparagraph (E
);
 (III) 62
 by inserting after subparagraph (C) the following:
 62 So in original. Probably should be `(II)'.
 `(D)(i) A qualified organization may collect from an individual a monthl
y fee for expenses (including overhead) incurred by such organization in providi
ng services performed as such individual's representative payee pursuant to subp
aragraph (A)(ii) if the fee does not exceed the lesser of--
 `(I) 10 percent of the monthly benefit involved, or
 `(II) $25.00 per month.
Any agreement providing for a fee in excess of the amount permitted under
 this clause shall be void and shall be treated as misuse by the organization of
 such individual's benefits.
 `(ii) For purposes of this subparagraph, the term `qualified organizatio
n' means any community-based nonprofit social service agency which--
 `(I) is bonded or licensed in each State in which the agency serves 
as a representative payee;
 `(II) in accordance with any applicable regulations of the Secretary
--
 `(aa) regularly provides services as a representative payee purs
uant to subparagraph (A)(ii) or section 205(j)(4) concurrently to 5 or more indi
viduals;
 `(bb) demonstrates to the satisfaction of the Secretary that suc
h agency is not otherwise a creditor of any such individual; and
 `(cc) was in existence on October 1, 1988.
The Secretary shall prescribe regulations under which the Secretary may g
rant an exception from subclause (II)(bb) for any individual on a case-by-case b
asis if such exception is in the best interests of such individual.
 `(iii) Any qualified organization which knowingly charges or collects, d
irectly or indirectly, any fee in excess of the maximum fee prescribed under cla
use (i) or makes any agreement, directly or indirectly, to charge or collect any
 fee in excess of such maximum fee, shall be fined in accordance with title 18, 
United States Code, or imprisoned not more than 6 months, or both.
 `(iv) This subparagraph shall cease to be effective on July 1, 1994.'.
 (B) STUDIES AND REPORTS-
 (i) REPORT BY SECRETARY OF HEALTH AND HUMAN SERVICES- Not la
ter than January 1, 1993, the Secretary of Health and Human Services shall trans
mit a report to the Committee on Ways and Means of the House of Representatives 
and the Committee on Finance of the Senate setting forth the number and types of
 qualified organizations which have served as representative payees and have col
lected fees for such service pursuant to any amendment made by subparagraph (A).

 (ii) REPORT BY COMPTROLLER GENERAL- Not later than July 1, 1
992, the Comptroller General of the United States shall conduct a study of the a
dvantages and disadvantages of allowing qualified organizations serving as repre
sentative payees to charge fees pursuant to the amendments made by subparagraph 
(A) and shall transmit a report to the Committee on Ways and Means of the House 
of Representatives and the Committee on Finance of the Senate setting forth the 
results of such study.
 (4) STUDY RELATING TO FEASIBILITY OF SCREENING OF INDIVIDUALS WITH C
RIMINAL RECORDS- As soon as practicable after the date of the enactment of this 
Act, the Secretary of Health and Human Services shall conduct a study of the fea
sibility of determining the type of representative payee applicant most likely t
o have a felony or misdemeanor conviction, the suitability of individuals with p
rior convictions to serve as representative payees, and the circumstances under 
which such applicants could be allowed to serve as representative payees. The Se
cretary shall transmit the results of such study to the Committee on Ways and Me
ans of the House of Representatives and the Committee on Finance of the Senate n
ot later than July 1, 1992.
 (5) EFFECTIVE DATES-
 (A) USE AND SELECTION OF REPRESENTATIVE PAYEES- The amendments m
ade by paragraphs (1) and (2) shall take effect July 1, 1991, and shall apply on
ly with respect to--
 (i) certifications of payment of benefits under title II of 
the Social Security Act to representative payees made on or after such date; and

 (ii) provisions for payment of benefits under title XVI of s
uch Act to representative payees made on or after such date.
 (B) COMPENSATION OF REPRESENTATIVE PAYEES- The amendments made b
y paragraph (3) shall take effect July 1, 1991, and the Secretary of Health and 
Human Services shall prescribe initial regulations necessary to carry out such a
mendments not later than such date.
 (b) IMPROVEMENTS IN RECORDKEEPING AND AUDITING REQUIREMENTS-
 (1) IMPROVED ACCESS TO CERTAIN INFORMATION-
 (A) IN GENERAL- Section 205(j)(3) (42 U.S.C. 605(j)(3)) is amend
ed--
 (i) by striking subparagraph (B);
 (ii) by redesignating subparagraphs (C), (D), and (E) as sub
paragraphs (B), (C), and (D), respectively;
 (iii) in subparagraph (D) (as so redesignated), by striking 
`(A), (B), (C), and (D)' and inserting `(A), (B), and (C)'; and
 (iv) by adding at the end the following new subparagraphs:
 `(E) The Secretary shall maintain a centralized file, which shall be upd
ated periodically and which shall be in a form which will be readily retrievable
 by each servicing office of the Social Security Administration, of--
 `(i) the address and the social security account number (or employer
 identification number) of each representative payee who is receiving benefit pa
yments pursuant to this subsection or section 1631(a)(2), and
 `(ii) the address and social security account number of each individ
ual for whom each representative payee is reported to be providing services as r
epresentative payee pursuant to this subsection or section 1631(a)(2).
 `(F) Each servicing office of the Administration shall maintain a list, 
which shall be updated periodically, of public agencies and community-based nonp
rofit social service agencies which are qualified to serve as representative pay
ees pursuant to this subsection or section 1631(a)(2) and which are located in t
he area served by such servicing office.'.
 (B) EFFECTIVE DATE- The amendments made by subparagraph (A) shal
l take effect October 1, 1992, and the Secretary of Health and Human Services sh
all take such actions as are necessary to ensure that the requirements of sectio
n 205(j)(3)(E) of the Social Security Act (as amended by subparagraph (A) of thi
s paragraph) are satisfied as of such date.
 (2) STUDY RELATING TO MORE STRINGENT OVERSIGHT OF HIGH-RISK REPRESEN
TATIVE PAYEES-
 (A) IN GENERAL- As soon as practicable after the date of the ena
ctment of this Act, the Secretary of Health and Human Services shall conduct a s
tudy of the need for a more stringent accounting system for high-risk representa
tive payees than is otherwise generally provided under section 205(j)(3) or 1631
(a)(2)(C) of the Social Security Act, which would include such additional report
ing requirements, record maintenance requirements, and other measures as the Sec
retary considers necessary to determine whether services are being appropriately
 provided by such payees in accordance with such sections 205(j) and 1631(a)(2).

 (B) SPECIAL PROCEDURES- In such study, the Secretary shall deter
mine the appropriate means of implementing more stringent, statistically valid p
rocedures for--
 (i) reviewing reports which would be submitted to the Secret
ary under any system described in subparagraph (A), and
 (ii) periodic, random audits of records which would be kept 
under such a system,
in order to identify any instances in which high-risk representat
ive payees are misusing payments made pursuant to section 205(j) or 1631(a)(2) o
f the Social Security Act.
 (C) HIGH-RISK REPRESENTATIVE PAYEE- For purposes of this paragra
ph, the term `high-risk representative payee' means a representative payee under
 section 205(j) or 1631(a)(2) of the Social Security Act (42 U.S.C. 405(j) and 1
383(a)(2), respectively) (other than a Federal or State institution) who--<
/ul>
 (i) regularly provides concurrent services as a representati
ve payee under such section 205(j), such section 1631(a)(2), or both such sectio
ns, for 5 or more individuals who are unrelated to such representative payee,
 (ii) is neither related to an individual on whose behalf the
 payee is being paid benefits nor living in the same household with such individ
ual,
 (iii) is a creditor of such individual, or
 (iv) is in such other category of payees as the Secretary ma
y determine appropriate.
 (D) REPORT- The Secretary shall report to the Committee on Ways 
and Means of the House of Representatives and the Committee on Finance of the Se
nate the results of the study, together with any recommendations, not later than
 July 1, 1992. Such report shall include an evaluation of the feasibility and de
sirability of legislation implementing stricter accounting and review procedures
 for high-risk representative payees in all servicing offices of the Social Secu
rity Administration (together with proposed legislative language).
 (3) DEMONSTRATION PROJECTS RELATING TO PROVISION OF INFORMATION TO L
OCAL AGENCIES PROVIDING CHILD AND ADULT PROTECTIVE SERVICES-
 (A) IN GENERAL- As soon as practicable after the date of the ena
ctment of this Act, the Secretary of Health and Human Services shall implement a
 demonstration project under this paragraph in all or part of not fewer than 2 S
tates. Under each such project, the Secretary shall enter into an agreement with
 the State in which the project is located to make readily available, for the du
ration of the project, to the appropriate State agency, a listing of addresses o
f multiple benefit recipients.
 (B) LISTING OF ADDRESSES OF MULTIPLE BENEFIT RECIPIENTS- The lis
t referred to in subparagraph (A) shall consist of a current list setting forth 
each address within the State at which benefits under title II, benefits under t
itle XVI, or any combination of such benefits are being received by 5 or more in
dividuals. For purposes of this subparagraph, in the case of benefits under titl
e II, all individuals receiving benefits on the basis of the wages and self-empl
oyment income of the same individual shall be counted as 1 individual.

 (C) APPROPRIATE STATE AGENCY- The appropriate State agency refer
red to in subparagraph (A) is the agency of the State which the Secretary determ
ines is primarily responsible for regulating care facilities operated in such St
ate or providing for child and adult protective services in such State.
 (D) REPORT- The Secretary shall report to the Committee on Ways 
and Means of the House of Representatives and the Committee on Finance of the Se
nate concerning such demonstration projects, together with any recommendations, 
not later than July 1, 1992. Such report shall include an evaluation of the feas
ibility and desirability of legislation implementing the programs established pu
rsuant to this paragraph on a permanent basis.
 (E) STATE- For purposes of this paragraph, the term `State' mean
s a State, including the entities included in such term by section 210(h) of the
 Social Security Act (42 U.S.C. 410(h)).
 (c) RESTITUTION-
 (1) TITLE II- Section 205(j) (42 U.S.C. 405(j)) is amended by redesi
gnating paragraph (5) (as so redesignated by subsection (a)(3)(A)(i) of this sec
tion) as paragraph (6) and by inserting after paragraph (4) (as added by subsect
ion (a)(3)(A)(i)) the following new paragraph:
 `(5) In cases where the negligent failure of the Secretary to investigat
e or monitor a representative payee results in misuse of benefits by the represe
ntative payee, the Secretary shall certify for payment to the beneficiary or the
 beneficiary's alternative representative payee an amount equal to such misused 
benefits. The Secretary shall make a good faith effort to obtain restitution fro
m the terminated representative payee.'.
 (2) TITLE XVI- Section 1631(a)(2) (42 U.S.C. 1383(a)(2)) is amended 
by redesignating subparagraph (E) (as so redesignated by subsection (a)(3)(A)(ii
)(I) of this section) as subparagraph (F) and by inserting after subparagraph (D
) (as added by subsection (a)(3)(A)(i)(III)) the following new subparagraph:
 `(E) RESTITUTION- In cases where the negligent failure of the Secret
ary to investigate or monitor a representative payee results in misuse of benefi
ts by the representative payee, the Secretary shall make payment to the benefici
ary or the beneficiary's representative payee of an amount equal to such misused
 benefits. The Secretary shall make a good faith effort to obtain restitution fr
om the terminated representative payee.'.
 (d) REPORTS TO THE CONGRESS-
 (1) IN GENERAL-
 (A) TITLE II- Section 205(j)(5) (as so redesignated by subsectio
n (c)(1) of this section) is amended to read as follows:
 `(5) The Secretary shall include as a part of the annual report required
 under section 704 information with respect to the implementation of the precedi
ng provisions of this subsection, including the number of cases in which the rep
resentative payee was changed, the number of cases discovered where there has be
en a misuse of funds, how any such cases were dealt with by the Secretary, the f
inal disposition of such cases, including any criminal penalties imposed, and su
ch other information as the Secretary determines to be appropriate.'.
 (B) TITLE XVI- Section 1631(a)(2)(E) (42 U.S.C. 1383(a)(2)(E)), 
as so redesignated by subsection (c)(2) of this section, is amended to read as f
ollows:
 `(E) The Secretary shall include as a part of the annual report required
 under section 704 information with respect to the implementation of the precedi
ng provisions of this paragraph, including--
 `(i) the number of cases in which the representative payee was chang
ed;
 `(ii) the number of cases discovered where there has been a misuse o
f funds;
 `(iii) how any such cases were dealt with by the Secretary;
 `(iv) the final disposition of such cases (including any criminal pe
nalties imposed); and
 `(v) such other information as the Secretary determines to be approp
riate.'.
 (2) EFFECTIVE DATE- The amendments made by paragraph (1) shall apply
 with respect to annual reports issued for years after 1991.
 (3) FEASIBILITY STUDY REGARDING INVOLVEMENT OF DEPARTMENT OF VETERAN
S AFFAIRS- As soon as practicable after the date of the enactment of this Act, t
he Secretary of Health and Human Services, in cooperation with the Secretary of 
Veterans Affairs, shall conduct a study of the feasibility of designating the De
partment of Veterans Affairs as the lead agency for purposes of selecting, appoi
nting, and monitoring representative payees for those individuals who receive be
nefits paid under title II or XVI of the Social Security Act and benefits paid b
y the Department of Veterans Affairs. Not later than 180 days after the date of 
the enactment of this Act, the Secretary of Health and Human Services shall tran
smit to the Committee on Ways and Means of the House of Representatives and the 
Committee on Finance of the Senate a report setting forth the results of such st
udy, together with any recommendations.
SEC. 5106. FEES FOR REPRESENTATION OF CLAIMANTS IN ADMINISTRATIVE PROCEEDINGS
.
 (a) IN GENERAL-
 (1) TITLE II- Subsection (a) of section 206 (42 U.S.C. 406(a)) is am
ended--
 (A) by inserting `(1)' after `(a)';
 (B) in the fifth sentence, by striking `Whenever' and inserting 
`Except as provided in paragraph (2)(A), whenever'; and
 (C) by striking the sixth sentence and all that follows through 
`Any person who' in the seventh sentence and inserting the following:<
/ul>
 `(2)(A) In the case of a claim of entitlement to past-due benefits under
 this title, if--
 `(i) an agreement between the claimant and another person regarding 
any fee to be recovered by such person to compensate such person for services wi
th respect to the claim is presented in writing to the Secretary prior to the ti
me of the Secretary's determination regarding the claim,
 `(ii) the fee specified in the agreement does not exceed the lesser 
of--
 `(I) 25 percent of the total amount of such past-due benefits (a
s determined before any applicable reduction under section 1127(a)), or
 `(II) $4,000, and
 `(iii) the determination is favorable to the claimant,
then the Secretary shall approve that agreement at the time of the favora
ble determination, and (subject to paragraph (3)) the fee specified in the agree
ment shall be the maximum fee. The Secretary may from time to time increase the 
dollar amount under clause (ii)(II) to the extent that the rate of increase in s
uch amount, as determined over the period since January 1, 1991, does not at any
 time exceed the rate of increase in primary insurance amounts under section 215
(i) since such date. The Secretary shall publish any such increased amount in th
e Federal Register.
 `(B) For purposes of this subsection, the term `past-due benefits' exclu
des any benefits with respect to which payment has been continued pursuant to su
bsection (g) or (h) of section 223.
 `(C) In the case of a claim with respect to which the Secretary has appr
oved an agreement pursuant to subparagraph (A), the Secretary shall provide the 
claimant and the person representing the claimant a written notice of--
 `(i) the dollar amount of the past-due benefits (as determined befor
e any applicable reduction under section 1127(a)) and the dollar amount of the p
ast-due benefits payable to the claimant,
 `(ii) the dollar amount of the maximum fee which may be charged or r
ecovered as determined under this paragraph, and
 `(iii) a description of the procedures for review under paragraph (3
).
 `(3)(A) The Secretary shall provide by regulation for review of the amou
nt which would otherwise be the maximum fee as determined under paragraph (2) if
, within 15 days after receipt of the notice provided pursuant to paragraph (2)(
C)--
 `(i) the claimant, or the administrative law judge or other adjudica
tor who made the favorable determination, submits a written request to the Secre
tary to reduce the maximum fee, or
 `(ii) the person representing the claimant submits a written request
 to the Secretary to increase the maximum fee.
Any such review shall be conducted after providing the claimant, the pers
on representing the claimant, and the adjudicator with reasonable notice of such
 request and an opportunity to submit written information in favor of or in oppo
sition to such request. The adjudicator may request the Secretary to reduce the 
maximum fee only on the basis of evidence of the failure of the person represent
ing the claimant to represent adequately the claimant's interest or on the basis
 of evidence that the fee is clearly excessive for services rendered.
 `(B)(i) In the case of a request for review under subparagraph (A) by th
e claimant or by the person representing the claimant, such review shall be cond
ucted by the administrative law judge who made the favorable determination or, i
f the Secretary determines that such administrative law judge is unavailable or 
if the determination was not made by an administrative law judge, such review sh
all be conducted by another person designated by the Secretary for such purpose.

 `(ii) In the case of a request by the adjudicator for review under subpa
ragraph (A), the review shall be conducted by the Secretary or by an administrat
ive law judge or other person (other than such adjudicator) who is designated by
 the Secretary.
 `(C) Upon completion of the review, the administrative law judge or othe
r person conducting the review shall affirm or modify the amount which would oth
erwise be the maximum fee. Any such amount so affirmed or modified shall be cons
idered the amount of the maximum fee which may be recovered under paragraph (2).
 The decision of the administrative law judge or other person conducting the rev
iew shall not be subject to further review.
 `(4)(A) Subject to subparagraph (B), if the claimant is determined to be
 entitled to past-due benefits under this title and the person representing the 
claimant is an attorney, the Secretary shall, notwithstanding section 205(i), ce
rtify for payment out of such past-due benefits (as determined before any applic
able reduction under section 1127(a)) to such attorney an amount equal to so muc
h of the maximum fee as does not exceed 25 percent of such past-due benefits (as
 determined before any applicable reduction under section 1127(a)).
 `(B) The Secretary shall not in any case certify any amount for payment 
to the attorney pursuant to this paragraph before the expiration of the 15-day p
eriod referred to in paragraph (3)(A) or, in the case of any review conducted un
der paragraph (3), before the completion of such review.
 `(5) Any person who'.
 (2) TITLE XVI- Paragraph (2)(A) of section 1631(d) (42 U.S.C. 1383(d
)(2)(A)) is amended to read as follows:
 `(2)(A) The provisions of section 206(a) (other than paragraph (4) there
of) shall apply to this part to the same extent as they apply in the case of tit
le II, except that paragraph (2) thereof shall be applied--
 `(i) by substituting `section 1127(a) or 1631(g)' for `section 1127(
a)'; and
 `(ii) by substituting `section 1631(a)(7)(A) or the requirements of 
due process of law' for `subsection (g) or (h) of section 223'.'.
 (b) PROTECTION OF ATTORNEY'S FEES FROM OFFSETTING SSI BENEFITS- Subsecti
on (a) of section 1127 (42 U.S.C. 1320a-6(a)) is amended by adding at the end th
e following new sentence: `A benefit under title II shall not be reduced pursuan
t to the preceding sentence to the extent that any amount of such benefit would 
not otherwise be available for payment in full of the maximum fee which may be r
ecovered from such benefit by an attorney pursuant to section 206(a)(4).'.
 (c) LIMITATATION OF TRAVEL EXPENSES FOR REPRESENTATION OF CLAIMANTS AT A
DMINISTRATIVE PROCEEDINGS- Section 201(j) (42 U.S.C. 401(j)), section 1631(h) (4
2 U.S.C. 1383(h)), and section 1817(i) (42 U.S.C. 1395i(i)) are each amended by 
adding at the end the following new sentence: `The amount available for payment 
under this subsection for travel by a representative to attend an administrative
 proceeding before an administrative law judge or other adjudicator shall not ex
ceed the maximum amount allowable under this subsection for such travel originat
ing within the geographic area of the office having jurisdiction over such proce
eding.'.
 (d) EFFECTIVE DATE- The amendments made by this section shall apply with
 respect to determinations made on or after July 1, 1991, and to reimbursement f
or travel expenses incurred on or after April 1, 1991.
SEC. 5107. APPLICABILITY OF ADMINISTRATIVE RES JUDICATA; RELATED NOTICE REQUI
REMENTS.
 (a) IN GENERAL-
 (1) TITLE II- Section 205(b) (42 U.S.C. 405(b)) is amended by adding
 at the end the following new paragraph:
 `(3)(A) A failure to timely request review of an initial adverse det
ermination with respect to an application for any benefit under this title or an
 adverse determination on reconsideration of such an initial determination shall
 not serve as a basis for denial of a subsequent application for any benefit und
er this title if the applicant demonstrates that the applicant, or any other ind
ividual referred to in paragraph (1), failed to so request such a review acting 
in good faith reliance upon incorrect, incomplete, or misleading information, re
lating to the consequences of reapplying for benefits in lieu of seeking review 
of an adverse determination, provided by any officer or employee of the Social S
ecurity Administration or any State agency acting under section 221.
 `(B) In any notice of an adverse determination with respect to which
 a review may be requested under paragraph (1), the Secretary shall describe in 
clear and specific language the effect on possible entitlement to benefits under
 this title of choosing to reapply in lieu of requesting review of the determina
tion.'.
 (2) TITLE XVI- Section 1631(c)(1) (42 U.S.C. 1383(c)(1)) is amended-
-
 (A) by inserting `(A)' after `(c)(1)'; and
 (B) by adding at the end the following:
 `(B)(i) A failure to timely request review of an initial adverse determi
nation with respect to an application for any payment under this title or an adv
erse determination on reconsideration of such an initial determination shall not
 serve as a basis for denial of a subsequent application for any payment under t
his title if the applicant demonstrates that the applicant, or any other individ
ual referred to in paragraph (1), failed to so request such a review acting in g
ood faith reliance upon incorrect, incomplete, or misleading information, relati
ng to the consequences of reapplying for payments in lieu of seeking review of a
n adverse determination, provided by any officer or employee of the Social Secur
ity Administration or any State agency acting under section 221.
 `(ii) In any notice of an adverse determination with respect to which a 
review may be requested under paragraph (1), the Secretary shall describe in cle
ar and specific language the effect on possible eligibility to receive payments 
under this title of choosing to reapply in lieu of requesting review of the dete
rmination.'.
 (b) EFFECTIVE DATE- The amendments made by this section shall apply with
 respect to adverse determinations made on or after July 1, 1991.
SEC. 5108. DEMONSTRATION PROJECTS RELATING TO ACCOUNTABILITY FOR TELEPHONE SE
RVICE CENTER COMMUNICATIONS.
 (a) IN GENERAL- The Secretary of Health and Human Services shall develop
 and carry out demonstration projects designed to implement the accountability p
rocedures described in subsection (b) in each of not fewer than 3 telephone serv
ice centers operated by the Social Security Administration. Telephone service ce
nters shall be selected for implementation of the accountability procedures so a
s to permit a thorough evaluation of such procedures as they would operate in co
njunction with the service technology most recently employed by the Social Secur
ity Administration. Each such demonstration project shall commence not later tha
n 180 days after the date of the enactment of this Act and shall remain in opera
tion for not less than 1 year and not more than 3 years.
 (b) ACCOUNTABILITY PROCEDURES-
 (1) IN GENERAL- During the period of each demonstration project deve
loped and carried out by the Secretary of Health and Human Services with respect
 to a telephone service center pursuant to subsection (a), the Secretary shall p
rovide for the application at such telephone service center of accountability pr
ocedures consisting of the following:
 (A) In any case in which a person communicates with the Social S
ecurity Administration by telephone at such telephone service center and provide
s in such communication his or her name, address, and such other identifying inf
ormation as the Secretary determines necessary and appropriate for purposes of t
his subparagraph, the Secretary must thereafter promptly provide such person a w
ritten receipt which sets forth--
 (i) the name of any individual representing the Social Secur
ity Administration with whom such person has spoken in such communication,<
/ul>
 (ii) the date of the communication;
 (iii) a description of the nature of the communication,

 (iv) any action that an individual representing the Social S
ecurity Administration has indicated in the communication will be taken in respo
nse to the communication, and
 (v) a description of the information or advice offered in th
e communication by an individual representing the Social Security Administration
.
 (B) Such person must be notified during the communication by an 
individual representing the Social Security Administration that, if adequate ide
ntifying information is provided to the Administration, a receipt described in s
ubparagraph (A) will be provided to such person.
 (C) A copy of any receipt required to be provided to any person 
under subparagraph (A) must be--
 (i) included in the file maintained by the Social Security A
dministration relating to such person, or
 (ii) if there is no such file, otherwise retained by the Soc
ial Security Administration in retrievable form until the end of the 5-year peri
od following the termination of the project.
  (2) EXCLUSION OF CERTAIN ROUTINE TELEPHONE COMMUNICATIONS- The Secr
etary may exclude from demonstration projects carried out pursuant to this secti
on routine telephone communications which do not relate to potential or current 
eligibility or entitlement to benefits.
 (c) REPORT-
 (1) IN GENERAL 63
--The Secretary of Health and Human Services shall submit to the Committee on
 Ways and Means of the House of Representatives and the Committee on Finance of 
the Senate a written report on the progress of the demonstration projects conduc
ted pursuant to this section, together with any related data and materials which
 the Secretary may consider appropriate. The report shall be submitted not later
 than 90 days after the termination of the project.
 63 So in original. Probably should be `GENERAL- '.
 (2) SPECIFIC MATTERS TO BE INCLUDED- The report required under parag
raph (1) shall--
 (A) assess the costs and benefits of the accountability procedur
es,
 (B) identify any major difficulties encountered in implementing 
the demonstration project, and
  (C) assess the feasibility of implementing the accountability p
rocedures on a national basis.
SEC. 5109. NOTICE REQUIREMENTS.
 (a) REQUIREMENTS-
 (1) TITLE II- Section 205 (42 U.S.C. 405) is amended by inserting af
ter subsection (r) the following new subsection:
`NOTICE REQUIREMENTS
 `(s) The Secretary shall take such actions as are necessary to ensure th
at any notice to one or more individuals issued pursuant to this title by the Se
cretary or by a State agency--
 `(1) is written in simple and clear language, and
 `(2) includes the address and telephone number of the local office o
f the Social Security Administration which serves the recipient.
In the case of any such notice which is not generated by a local servicin
g office, the requirements of paragraph (2) shall be treated as satisfied if suc
h notice includes the address of the local office of the Social Security Adminis
tration which services the recipient of the notice and a telephone number throug
h which such office can be reached.'.
 (2) TITLE XVI- Section 1631 (42 U.S.C. 1383) is amended by adding at
 the end the following:
`NOTICE REQUIREMENTS
 `(n) The Secretary shall take such actions as are necessary to ensure th
at any notice to one or more individuals issued pursuant to this title by the Se
cretary or by a State agency--
 `(1) is written in simple and clear language, and
 `(2) includes the address and telephone number of the local office o
f the Social Security Administration which serves the recipient.
In the case of any such notice which is not generated by a local servicin
g office, the requirements of paragraph (2) shall be treated as satisfied if suc
h notice includes the address of the local office of the Social Security Adminis
tration which services the recipient of the notice and a telephone number throug
h which such office can be reached.'.
 (b) EFFECTIVE DATE- The amendments made by this section shall apply with
 respect to notices issued on or after July 1, 1991.
SEC. 5110. TELEPHONE ACCESS TO THE SOCIAL SECURITY ADMINISTRATION.
 (a) REQUIRED MINIMUM LEVEL OF ACCESS TO LOCAL OFFICES- In addition to su
ch other access by telephone to offices of the Social Security Administration as
 the Secretary of Health and Human Services may consider appropriate, the Secret
ary shall maintain access by telephone to local offices of the Social Security A
dministration at the level of access generally available as of September 30, 198
9.
 (b) TELEPHONE LISTINGS- The Secretary shall make such requests of local 
telephone utilities in the United States as are necessary to ensure that the lis
tings subsequently maintained and published by such utilities for each locality 
include the address and telephone number for each local office of the Social Sec
urity Administration to which direct telephone access is maintained under subsec
tion (a) in such locality. Such listing may also include information concerning 
the availability of a toll-free number which may be called for general informati
on.
 (c) REPORT BY SECRETARY- Not later than January 1, 1993, the Secretary s
hall submit to the Committee on Ways and Means of the House of Representatives a
nd the Committee on Finance of the Senate a report which--
 (1) assesses the impact of the requirements established by this sect
ion on the Social Security Administration's allocation of resources, workload le
vels, and service to the public, and
 (2) presents a plan for using new, innovative technologies to enhanc
e access to the Social Security Administration, including access to local office
s.
 (d) GAO REPORT- The Comptroller General of the United States shall revie
w the level of telephone access by the public to the local offices of the Social
 Security Administration. The Comptroller General shall file an interim report w
ith the Committee on Ways and Means of the House of Representatives and the Comm
ittee on Finance of the Senate describing such level of telephone access not lat
er than 120 days after the date of the enactment of this Act and shall file a fi
nal report with such Committees describing such level of access not later than 2
10 days after such date.
 (e) EFFECTIVE DATE- The Secretary of Health and Human Services shall mee
t the requirements of subsections (a) and (b) as soon as possible after the date
 of the enactment of this Act but not later 180 days after such date.
SEC. 5111. AMENDMENTS RELATING TO SOCIAL SECURITY ACCOUNT STATEMENTS.
 (a) IN GENERAL- Section 1142 (42 U.S.C. 1320b-13), as added by section 1
0308 of the Omnibus Budget Reconciliation Act of 1989 (103 Stat. 2485), is amend
ed--
 (1) by striking `SEC. 1142.' and inserting `SEC. 1143.'; and
 (2) in subsection (c)(2), by striking ` a biennial' and inserting `a
n annual'.
 (b) DISCLOSURE OF ADDRESS INFORMATION BY INTERNAL REVENUE SERVICE TO SOC
IAL SECURITY ADMINISTRATION-
 (1) IN GENERAL- Section 6103(m) of the Internal Revenue Code of 1986
 (relating to disclosure of taxpayer identity information) is amended by adding 
at the end the following new paragraph:
 `(7) SOCIAL SECURITY ACCOUNT STATEMENT FURNISHED BY SOCIAL SECURITY ADMI
NISTRATION- Upon written request by the Commissioner of Social Security, the Sec
retary may disclose the mailing address of any taxpayer who is entitled to recei
ve a social security account statement pursuant to section 1143(c) of the Social
 Security Act, for use only by officers, employees or agents of the Social Secur
ity Administration for purposes of mailing such statement to such taxpayer.'.
 (2) SAFEGUARDS- Section 6103(p)(4) of such Code (relating to safegua
rds) is amended, in the matter following subparagraph (f)(iii), by striking `sub
section (m)(2), (4), or (6)' and inserting `paragraph (2), (4), (6), or (7) of s
ubsection (m)'.
 (3) UNAUTHORIZED DISCLOSURE PENALTIES- Paragraph (2) of section 7213
(a) of such Code (relating to unauthorized disclosure of returns and return info
rmation) is amended by striking `(m)(2), (4), or (6)' and inserting `(m)(2), (4)
, (6), or (7)'.
SEC. 5112. TRIAL WORK PERIOD DURING ROLLING FIVE-YEAR PERIOD FOR ALL DISABLED
 BENEFICIARIES.
 (a) IN GENERAL- Section 222(c) (42 U.S.C. 422(c)) is amended--
 (1) in paragraph (4)(A), by striking `, beginning on or after the fi
rst day of such period,' and inserting `, in any period of 60 consecutive months
,'; and
 (2) by striking paragraph (5).
 (b) EFFECTIVE DATE- The amendments made by subsection (a) shall take eff
ect on January 1, 1992.
SEC. 5113. CONTINUATION OF BENEFITS ON ACCOUNT OF PARTICIPATION IN A NON-STAT
E VOCATIONAL REHABILITATION PROGRAM.
 (a) IN GENERAL- Section 225(b) (42 U.S.C. 425(b)) is amended--
 (1) by striking paragraph (1) and inserting the following new paragr
aph:
 `(1) such individual is participating in a program of vocational reh
abilitation services approved by the Secretary, and'; and
 (2) in paragraph (2), by striking `Commissioner of Social Security' 
and inserting `Secretary'.
 (b) PAYMENTS AND PROCEDURES- Section 1631(a)(6) (42 U.S.C. 1383(a)(6)) i
s amended--
 (1) by striking subparagraph (A) and inserting the following new sub
paragraph:
 `(A) such individual is participating in a program of vocational reh
abilitation services approved by the Secretary, and'; and
 (2) in subparagraph (B), by striking `Commissioner of Social Securit
y' and inserting `Secretary'.
 (c) EFFECTIVE DATE- The amendments made by this section shall be effecti
ve with respect to benefits payable for months after the eleventh month followin
g the month in which this Act is enacted and shall apply only with respect to in
dividuals whose blindness or disability has or may have ceased after such eleven
th month.
SEC. 5114. LIMITATION ON NEW ENTITLEMENT TO SPECIAL AGE-72 PAYMENTS.
 (a) IN GENERAL- Section 228(a)(2) (42 U.S.C. 428(a)(2)) is amended by st
riking `(B)' and inserting `(B)(i) attained such age after 1967 and before 1972,
 and (ii)'.
 (b) EFFECTIVE DATE--The amendment made by subsection (a) shall apply wit
h respect benefits payable on the basis of applications filed after the date of 
the enactment of this Act.
SEC. 5115. ELIMINATION OF ADVANCED CREDITING TO THE TRUST FUNDS OF SOCIAL SEC
URITY PAYROLL TAXES.
 (a) IN GENERAL- Section 201(a) (42 U.S.C. 401(a)) is amended--
 (1) in the first sentence following clause (4)--
 (A) by striking `monthly on the first day of each calendar month
' both places it appears and inserting `from time to time';
 (B) by striking `to be paid to or deposited into the Treasury du
ring such month' and inserting `paid to or deposited into the Treasury'; and
 (2) in the last sentence, by striking `Fund;' and inserting `Fund. N
otwithstanding the preceding sentence, in any case in which the Secretary of the
 Treasury determines that the assets of either such Trust Fund would otherwise b
e inadequate to meet such Fund's obligations for any month, the Secretary of the
 Treasury shall transfer to such Trust Fund on the first day of such month the a
mount which would have been transferred to such Fund under this section as in ef
fect on October 1, 1990; and'.
 (c) EFFECTIVE DATE- The amendments made by this section shall become eff
ective on the first day of the month following the month in which this Act is en
acted.
SEC. 5116. ELIMINATION OF ELIGIBILITY FOR RETROACTIVE BENEFITS FOR CERTAIN IN
DIVIDUALS ELIGIBLE FOR REDUCED BENEFITS.
 (a) IN GENERAL- Section 202(j)(4) (42 U.S.C. 402(j)(4)) is amended--
 (1) in subparagraph (A), by striking `if the effect' and all that fo
llows and inserting `if the amount of the monthly benefit to which such individu
al would otherwise be entitled for any such month would be subject to reduction 
pursuant to subsection (q).'; and
 (2) in subparagraph (B), by striking clauses (i) and (iv) and by red
esignating clauses (ii), (iii), and (v) as clauses (i), (ii), and (iii), respect
ively.
 (b) EFFECTIVE DATE- The amendments made by this section shall apply with
 respect to applications for benefits filed on or after January 1, 1991.
SEC. 5117. CONSOLIDATION OF OLD METHODS OF COMPUTING PRIMARY INSURANCE AMOUNT
S.
 (a) CONSOLIDATION OF COMPUTATION METHODS-
 (1) IN GENERAL- Section 215(a)(5) (42 U.S.C. 415(a)(5)) is amended--

 (A) by striking `For purposes of' and inserting `(A) Subject to 
subparagraphs (B), (C), (D) and (E), for purposes of';
 (B) by striking the last sentence; and
 (C) by adding at the end the following new subparagraphs:
 `(B)(i) Subject to clauses (ii), (iii), and (iv), and notwithstanding an
y other provision of law, the primary insurance amount of any individual describ
ed in subparagraph (C) shall be, in lieu of the primary insurance amount as comp
uted pursuant to any of the provisions referred to in subparagraph (D), the prim
ary insurance amount computed under subsection (a) of section 215 as in effect i
n December 1978, without regard to subsection (b)(4) and (c) of such section as 
so in effect.
 `(ii) The computation of a primary insurance amount under this subparagr
aph shall be subject to section 104(j)(2) of the Social Security Amendments of 1
972 (relating to the number of elapsed years under section 215(b)).
 `(iii) In computing a primary insurance amount under this subparagraph, 
the dollar amount specified in paragraph (3) of section 215(a) (as in effect in 
December 1978) shall be increased to $11.50.
 `(iv) In the case of an individual to whom section 215(d) applies, the p
rimary insurance amount of such individual shall be the greater of--
 `(I) the primary insurance amount computed under the preceding claus
es of this subparagraph, or
 `(II) the primary insurance amount computed under section 215(d).
 `(C) An individual is described in this subparagraph if--
 `(i) paragraph (1) does not apply to such individual by reason of su
ch individual's eligibility for an old-age or disability insurance benefit, or t
he individual's death, prior to 1979, and
 `(ii) such individual's primary insurance amount computed under this
 section as in effect immediately before the date of the enactment of the Omnibu
s Budget Reconciliation Act of 1990 would have been computed under the provision
s described in subparagraph (D).
 `(D) The provisions described in this subparagraph are--
 `(i) the provisions of this subsection as in effect prior to the ena
ctment of the Social Security Amendments of 1965, if such provisions would precl
ude the use of wages prior to 1951 in the computation of the primary insurance a
mount,
 `(ii) the provisions of section 209 as in effect prior to the enactm
ent of the Social Security Act Amendments of 1950, and
 `(iii) the provisions of section 215(d) as in effect prior to the en
actment of the Social Security Amendments of 1977.
 `(E) For purposes of this paragraph, the table for determining primary i
nsurance amounts and maximum family benefits contained in this section in Decemb
er 1978 shall be revised as provided by subsection (i) for each year after 1978.
'.
 (2) COMPUTATION OF PRIMARY INSURANCE BENEFIT UNDER 1939 ACT-
 (A) DIVISION OF WAGES BY ELAPSED YEARS- Section 215(d)(1) (42 U.
S.C. 415(d)(1)) is amended--
 (i) in subparagraph (A), by inserting `and subject to sectio
n 104(j)(2) of the Social Security Amendments of 1972' after `thereof'; and

 (ii) by striking `(B) For purposes' in subparagraph (B) and 
all that follows through clause (ii) of such subparagraph and inserting the foll
owing:
 `(B) For purposes of subparagraphs (B) and (C) of subsection (b)(2) 
(as so in effect)--
 `(i) the total wages prior to 1951 (as defined in subparagraph (
C) of this paragraph) of an individual--
 `(I) shall, in the case of an individual who attained age 21
 prior to 1950, be divided by the number of years (hereinafter in this subparagr
aph referred to as the `divisor') elapsing after the year in which the individua
l attained age 20, or 1936 if later, and prior to the earlier of the year of dea
th or 1951, except that such divisor shall not include any calendar year entirel
y included in a period of disability, and in no case shall the divisor be less t
han one, and
 `(II) shall, in the case of an individual who died before 19
50 and before attaining age 21, be divided by the number of years (hereinafter i
n this subparagraph referred to as the `divisor') elapsing after the second year
 prior to the year of death, or 1936 if later, and prior to the year of death, a
nd in no case shall the divisor be less than one; and
 `(ii) the total wages prior to 1951 (as defined in subparagraph 
(C) of this paragraph) of an individual who either attained age 21 after 1949 or
 died after 1949 before attaining age 21, shall be divided by the number of year
s (hereinafter in this subparagraph referred to as the `divisor') elapsing after
 1949 and prior to 1951.'.
 (B) CREDITING OF WAGES TO YEARS- Clause (iii) of section 215(d)(
1)(B) (42 U.S.C. 415(d)(1)(B)(iii)) is amended to read as follows:
 `(iii) if the quotient exceeds $3,000, only $3,000 shall be deem
ed to be the individual's wages for each of the years which were used in computi
ng the amount of the divisor, and the remainder of the individual's total wages 
prior to 1951 (I) if less than $3,000, shall be deemed credited to the computati
on base year (as defined in subsection (b)(2) as in effect in December 1977) imm
ediately preceding the earliest year used in computing the amount of the divisor
, or (II) if $3,000 or more, shall be deemed credited, in $3,000 increments, to 
the computation base year (as so defined) immediately preceding the earliest yea
r used in computing the amount of the divisor and to each of the computation bas
e years (as so defined) consecutively preceding that year, with any remainder le
ss than $3,000 being credited to the computation base year (as so defined) immed
iately preceding the earliest year to which a full $3,000 increment was credited
; and'.
 (C) APPLICABILITY- Section 215(d) is further amended--

 (i) in paragraph (2)(B), by striking `except as provided in 
paragraph (3),';
 (ii) by striking paragraph (2)(C) and inserting the followin
g:
 `(C)(i) who becomes entitled to benefits under section 202(a) or 223
 or who dies, or
 `(ii) whose primary insurance amount is required to be recomputed un
der paragraph (2), (6), or (7) of subsection (f) or under section 231.'; and
 (iii) by striking paragraphs (3) and (4).
 (3) CONFORMING AMENDMENTS-
 (A) Section 215(i)(4) (42 U.S.C. 415(i)(4)) is amended in the fi
rst sentence by inserting `and as amended by section 5117 of the Omnibus Budget 
Reconciliation Act of 1990' after `as then in effect'.
 (B) Section 203(a)(8) (42 U.S.C. 403(a)(8)) is amended in the fi
rst sentence by inserting `and as amended by section 5117 of the Omnibus Budget 
Reconciliation Act of 1990,' after `December 1978' the second place it appears.<
/ul>
 (C) Section 215(c) (42 U.S.C. 415(c)) is amended by striking `Th
is' and inserting `Subject to the amendments made by section 5117 of the Omnibus
 Budget Reconciliation Act of 1990, this'.
 (D) Section 215(f)(7) (42 U.S.C. 415(f)(7)) is amended by striki
ng the period at the end of the first sentence and inserting `, including a prim
ary insurance amount computed under any such subsection whose operation is modif
ied as a result of the amendments made by section 5117 of the Omnibus Budget Rec
onciliation Act of 1990'.
 (E)(i) Section 215(d) (42 U.S.C. 415(d)) is further amended by r
edesignating paragraph (5) as paragraph (3).
 (ii) Subsections (a)(7)(A), (a)(7)(C)(ii), and (f)(9)(A) of sect
ion 215 (42 U.S.C. 415) are each amended by striking `subsection (d)(5)' each pl
ace it appears and inserting `subsection (d)(3)'.
 `(iii) Section 215(f)(9)(B) (42 U.S.C. 415(f)(9)(B)) is amended 
by striking `subsection (a)(7) or (d)(5)' each place it appears and inserting `s
ubsection (a)(7) or (d)(3)'.
 (4) EFFECTIVE DATE-
 (A) IN GENERAL- Except as provided in subparagraph (B), the amen
dments made by this subsection shall apply with respect to the computation of th
e primary insurance amount of any insured individual in any case in which a pers
on becomes entitled to benefits under section 202 or 223 on the basis of such in
sured individual's wages and self-employment income for months after the 18-mont
h period following the month in which this Act is enacted, except that such amen
dments shall not apply if any person is entitled to benefits based on the wages 
and self-employment income of such insured individual for the month preceding th
e initial month of such person's entitlement to such benefits under section 202 
or 223.
 (B) RECOMPUTATIONS- The amendments made by this subsection shall
 apply with respect to any primary insurance amount upon the recomputation of su
ch primary insurance amount if such recomputation is first effective for monthly
 benefits for months after the 18-month period following the month in which this
 Act is enacted.
 (b) BENEFITS IN CASE OF VETERANS- Section 217(b) (42 U.S.C. 417(b)) is a
mended--
 (1) in the first sentence of paragraph (1), by striking `Any' and in
serting `Subject to paragraph (3), any'; and
 (2) by adding at the end the following new paragraph:
 `(3)(A) The preceding provisions of this subsection shall apply for purp
oses of determining the entitlement to benefits under section 202, based on the 
primary insurance amount of the deceased World War II veteran, of any surviving 
individual only if such surviving individual makes application for such benefits
 before the end of the 18-month period after the month in which the Omnibus Budg
et Reconciliation Act of 1990 was enacted.
 `(B) Subparagraph (A) shall not apply if any person is entitled to benef
its under section 202 based on the primary insurance amount of such veteran for 
the month preceding the month in which such application is made.'.
 (c) APPLICABILITY OF ALTERNATIVE METHOD FOR DETERMINING QUARTERS OF COVE
RAGE WITH RESPECT TO WAGES IN THE PERIOD FROM 1937 TO 1950-
 (1) APPLICABILITY WITHOUT REGARD TO NUMBER OF ELAPSED YEARS- Section
 213(c) (42 U.S.C. 413(c)) is amended--
 (A) by inserting `and 215(d)' after `214(a)'; and
 (B) by striking `except where--' and all that follows and insert
ing the following: `except where such individual is not a fully insured individu
al on the basis of the number of quarters of coverage so derived plus the number
 of quarters of coverage derived from the wages and self-employment income credi
ted to such individual for periods after 1950.'.
 (2) APPLICABILITY WITHOUT REGARD TO DATE OF DEATH- Section 155(b)(2)
 of the Social Security Amendments of 1967 is amended by striking `after such da
te'.
 (3) EFFECTIVE DATE- The amendments made by this subsection shall app
ly only with respect to individuals who--
 (A) make application for benefits under section 202 of the Socia
l Security Act after the 18-month period following the month in which this Act i
s enacted, and
 (B) are not entitled to benefits under section 227 or 228 of suc
h Act for the month in which such application is made.
SEC. 5118. SUSPENSION OF DEPENDENT'S BENEFITS WHEN THE WORKER IS IN AN EXTEND
ED PERIOD OF ELIGIBILITY.
 (a) IN GENERAL- Section 223(e) (42 U.S.C. 623(e)) is amended by--
 (1) by inserting `(1)' after `(e)'; and
 (2) by adding at the end the following new paragraph:
 `(2) No benefit shall be payable under section 202 on the basis of the w
ages and self-employment income of an individual entitled to a benefit under sub
section (a)(1) of this section for any month for which the benefit of such indiv
idual under subsection (a)(1) is not payable under paragraph (1).'.
 (b) EFFECTIVE DATE- The amendments made by subsection (a) shall apply wi
th respect to benefits for months after the date of the enactment of this Act.
SEC. 5119. ENTITLEMENT TO BENEFITS OF DEEMED SPOUSE AND LEGAL SPOUSE.
 (a) CONTINUED ENTITLEMENT OF DEEMED SPOUSE DESPITE ENTITLEMENT OF LEGAL 
SPOUSE- Section 216(h)(1) (42 U.S.C. 416(h)(1)) is amended--
 (1) in subparagraph (A)--
 (A) by inserting `(i)' after `(h)(1)(A)'; and
 (B) by striking `If such courts' in the second sentence and inse
rting the following:
 `(ii) If such courts'; and
 (2) in subparagraph (B)--
 (A) by inserting `(i)' after `(B)';
 (B) by striking `The provisions of the preceding sentence' in th
e second sentence and inserting the following:
 `(ii) The provisions of clause (i)';
 (C) by striking `(i) if another' in the second sentence and all 
that follows through `or (ii)';
 (D) by striking `The entitlement' in the third sentence and inse
rting the following:
 `(iii) The entitlement';
 (E) by striking `subsection (b), (c), (e), (f), or (g)' the firs
t place it appears in the third sentence and inserting `subsection (b) or (c)',<
/ul>
 (F) by striking `wife, widow, husband, or widower' the first pla
ce it appears in the third sentence and inserting `wife or husband';
 (G) by striking `(i) in which' in the third sentence and all tha
t follows through `in which such applicant entered' and inserting `in which such
 person enters';
 (H) by striking `For purposes' in the fourth sentence and insert
ing the following:
 `(iv) For purposes';
and
 (I) by striking `(i)' and `(ii)' in the fourth sentence and inse
rting `(I)' and `(II)', respectively.
 (b) TREATMENT OF DIVORCE IN THE CONTEXT OF INVALID MARRIAGE- Section 216
(h)(1)(B)(i) (as amended by subsection (a)) is further amended--
 (1) by striking `where under subsection (b), (c), (f), or (g) such a
pplicant is not the wife, widow, husband, or widower of such individual' and ins
erting `where under subsection (b), (c), (d), (f), or (g) such applicant is not 
the wife, divorced wife, widow, surviving divorced wife, husband, divorced husba
nd, widower, or surviving divorced husband of such individual';
 (2) by striking `and such applicant' and all that follows through `f
iles the application,';
 (3) by striking `subsections (b), (c), (f), and (g)' and inserting `
subsections (b), (c), (d), (f), and (g)'; and
 (4) by adding at the end the following new sentences: `Notwithstandi
ng the preceding sentence, in the case of any person who would be deemed under t
he preceding sentence a wife, widow, husband, or widower of the insured individu
al, such marriage shall not be deemed to be a valid marriage unless the applican
t and the insured individual were living in the same household at the time of th
e death of the insured individual or (if the insured individual is living) at th
e time the applicant files the application. A marriage that is deemed to be a va
lid marriage by reason of the preceding sentence shall continue to be deemed a v
alid marriage if the insured individual and the person entitled to benefits as t
he wife or husband of the insured individual are no longer living in the same ho
usehold at the time of the death of such insured individual.'.
 (c) TREATMENT OF MULTIPLE ENTITLEMENTS UNDER THE FAMILY MAXIMUM- Section
 203(a)(3) (42 U.S.C. 403(a)(3)) is amended by adding after subparagraph (C) the
 following new subparagraph:
 `(D) In any case in which--
 `(i) two or more individuals are entitled to monthly benefits for th
e same month as a spouse under subsection (b) or (c) of section 202, or as a sur
viving spouse under subsection (e), (f), or (g) of section 202,
 `(ii) at least one of such individuals is entitled by reason of subp
aragraph (A)(ii) or (B) of section 216(h)(1), and
 `(iii) such entitlements are based on the wages and self-employment 
income of the same insured individual,
the benefit of the entitled individual whose entitlement is based on a va
lid marriage (as determined without regard to subparagraphs (A)(ii) and (B) of s
ection 216(h)(1)) to such insured individual shall, for such month and all month
s thereafter, be determined without regard to this subsection, and the benefits 
of all other individuals who are entitled, for such month or any month thereafte
r, to monthly benefits under section 202 based on the wages and self-employment 
income of such insured individual shall be determined as if such entitled indivi
dual were not entitled to benefits for such month.'.
 (d) CONFORMING AMENDMENT- Section 203(a)(6) (42 U.S.C. 403(a)(6)) is ame
nded by inserting `(3)(D),' after `(3)(C),'.
 (e) EFFECTIVE DATE-
 (1) IN GENERAL- The amendments made by this section shall apply with
 respect to benefits for months after December 1990.
 (2) Application requirement-
 (A) GENERAL RULE- Except as provided in subparagraph (B), the am
endments made by this section shall apply only with respect to benefits for whic
h application is filed with the Secretary of Health and Human Services after Dec
ember 31, 1990.
 (B) EXCEPTION FROM APPLICATION REQUIREMENT- Subparagraph (A) sha
ll not apply with respect to the benefits of any individual if such individual i
s entitled to a benefit under subsection (b), (c), (e), or (f) of section 202 of
 the Social Security Act for December 1990 and the individual on whose wages and
 self-employment income such benefit for December 1990 is based is the same indi
vidual on the basis of whose wages and self-employment income application would 
otherwise be required under subparagraph (A).
SEC. 5120. VOCATIONAL REHABILITATION DEMONSTRATION PROJECTS.
 (a) DEMONSTRATION PROJECT-
 (1) IN GENERAL- Pursuant to section 505 of the Social Security Disab
ility Amendments of 1980, the Secretary of Health and Human Services shall devel
op and carry out under this section demonstration projects in each of not fewer 
than three States. Each such demonstration project shall be designed to assess t
he advantages and disadvantages of permitting disabled beneficiaries (as defined
 in paragraph (3)) to select, from among both public and private qualified vocat
ional rehabilitation providers, providers of vocational rehabilitation services 
directed at enabling such beneficiaries to engage in substantial gainful activit
y. Each such demonstration project shall commence as soon as practicable after t
he date of the enactment of this Act and shall remain in operation until the end
 of fiscal year 1993.
 (2) SCOPE AND PARTICIPATION- Each demonstration project shall be of 
sufficient scope and open to sufficient participation by disabled beneficiaries 
so as to permit meaningful determinations under subsection (b).
 (3) DISABLED BENEFICIARY- For purposes of this section, the term `di
sabled beneficiary' means an individual who is entitled to disability insurance 
benefits under section 223 of the Social Security Act or benefits under section 
202 of such Act based on such individual's own disability.
 (b) MATTERS TO BE DETERMINED- In the course of each demonstration projec
t conducted under this section, the Secretary shall determine the following:
 (1) the extent to which disabled beneficiaries participate in the pr
ocess of selecting providers of rehabilitation services, and their reasons for p
articipating or not participating;
 (2) notable characteristics of participating disabled beneficiaries 
(including their impairments), classified by the type of provider selected;

 (3) the various needs for rehabilitation demonstrated by participati
ng disabled beneficiaries, classified by the type of provider selected;
 (4) the extent to which providers of rehabilitation services which a
re not agencies or instrumentalities of States accept referrals of disabled bene
ficiaries under procedures in effect under section 222(d) of the Social Security
 Act as of the date of the enactment of this Act relating to reimbursement for s
uch services and the most effective way of reimbursing such providers in accorda
nce with such provisions;
 (5) the extent to which providers participating in the demonstration
 projects enter into contracts with third parties for services and the types of 
such services;
 (6) whether, and if so the extent to which, disabled beneficiaries w
ho select their own providers of rehabilitation services are more likely to enga
ge in substantial gainful activity and thereby terminate their entitlement under
 section 202 or 223 of the Social Security Act than those who do not;
 (7) the cost effectiveness of permitting disabled beneficiaries to s
elect their providers of vocational rehabilitation services, and the comparative
 cost effectiveness of different types of providers; and
 (8) the feasibility of establishing a permanent national program for
 allowing disabled beneficiaries to choose their own qualified vocational rehabi
litation provider and any additional safeguards which would be necessary to assu
re the effectiveness of such a program.
 (c) PROCEDURAL REQUIREMENTS-
 (1) SELECTION OF PARTICIPANTS- The Secretary shall select for partic
ipation in each demonstration project under this section disabled beneficiaries 
for whom there is a reasonable likelihood that rehabilitation services provided 
to them will result in performance by them of substantial gainful activity for a
 continuous period of nine months prior to termination of the project.
 (2) SELECTION OF PROVIDERS OF REHABILITATION SERVICES- The Secretary
 shall select qualified rehabilitation agencies to serve as providers of rehabil
itation services in the geographic area covered by each demonstration project co
nducted under this section. The Secretary shall make such selection after consul
tation with disabled individuals and organizations representing such individuals
. With respect to each demonstration project, the Secretary may approve on a cas
e-by-case basis additional qualified rehabilitation agencies from outside the ge
ographic area covered by the project to serve particular disabled beneficiaries.

 (3) REIMBURSEMENT OF PROVIDERS-
 (A) Except as provided in subparagraph (B), providers of rehabil
itation services under each demonstration project under this section shall be re
imbursed in accordance with the procedures in effect under the provisions of sec
tion 222(d) of the Social Security Act as of the date of the enactment of this A
ct relating to reimbursement for services provided under such section.

 (B) The Secretary may contract with providers of rehabilitation 
services under each demonstration project under this section on a fee-for-servic
e basis in order to--
 (i) conduct vocational evaluations directed at identifying t
hose disabled beneficiaries who have reasonable potential for engaging in substa
ntial gainful activity and thereby terminating their entitlement to benefits und
er section 202 or 223 of the Social Security Act if provided with vocational reh
abilitation services as participants in the project, and
 (ii) develop jointly with each disabled beneficiary so ident
ified an individualized, written rehabilitation program.
 (C) Each written rehabilitation program developed pursuant to su
bparagraph (B)(ii) for any participant shall include among its provisions--

 (i) a statement of the participant's rehabilitation goal,
 (ii) a statement of the specific rehabilitation services to 
be provided and of the identity of the provider to furnish such services,
 (iii) the projected date for the initiation of such services
 and their anticipated duration, and
 (iv) objective criteria and an evaluation procedure and sche
dule for determining whether the stated rehabilitation goal is being achieved.
 (d) REPORTS- The Secretary of Health and Human Services shall submit to 
the Committee on Ways and Means of the House of Representatives and the Committe
e on Finance of the Senate an interim written report on the progress of the demo
nstration projects conducted under this section not later than April 1, 1992, to
gether with any related data and materials which the Secretary considers appropr
iate. The Secretary shall submit a final written report to such Committees addre
ssing the matters to be determined under subsection (b) not later than April 1, 
1994.
 (e) STATE- For purposes of this section, the term `State' means a State,
 including the entities included in such term by section 210(h) of the Social Se
curity Act (42 U.S.C. 410(h)).
 (f) CONTINUATION OF DEMONSTRATION AUTHORITY- Section 505(c) of the Socia
l Security Disability Amendments of 1980 (42 U.S.C. 1310 note) is amended to rea
d as follows:
 `(c) The Secretary shall submit to the Congress a final report with resp
ect to all experiments and demonstration projects carried out under this section
 (other than demonstration projects conducted under section 5120 of the Omnibus 
Budget Reconciliation of 1990) no later than October 1, 1993.'.
SEC. 5121. EXEMPTION FOR CERTAIN ALIENS, RECEIVING AMNESTY UNDER THE IMMIGRAT
ION AND NATIONALITY ACT, FROM PROSECUTION FOR MISREPORTING OF EARNINGS OR MISUSE
 OF SOCIAL SECURITY ACCOUNT NUMBERS OR SOCIAL SECURITY CARDS.
 (a) IN GENERAL- Section 208 (42 U.S.C. 408) is amended by adding at the 
end the following:
 `(d)(1) Except as provided in paragraph (2), an alien--
 `(A) whose status is adjusted to that of lawful temporary resident u
nder section 210 or 245A of the Immigration and Nationality Act or under section
 902 of the Foreign Relations Authorization Act, Fiscal Years 1988 and 1989,
 `(B) whose status is adjusted to that of permanent resident--
 `(i) under section 202 of the Immigration Reform and Control Act
 of 1986, or
 `(ii) pursuant to section 249 of the Immigration and Nationality
 Act, or
 `(C) who is granted special immigrant status under section 101(a)(27
)(I) of the Immigration and Nationality Act,
shall not be subject to prosecution for any alleged conduct described in 
paragraph (6) or (7) of subsection (a) if such conduct is alleged to have occurr
ed prior to 60 days after the date of the enactment of the Omnibus Budget Reconc
iliation Act of 1990.
 `(2) Paragraph (1) shall not apply with respect to conduct (described in
 subsection (a)(7)(C)) consisting of--
 `(A) selling a card that is, or purports to be, a social security ca
rd issued by the Secretary,
 `(B) possessing a social security card with intent to sell it, or
 `(C) counterfeiting a social security card with intent to sell it.
 `(3) Paragraph (1) shall not apply with respect to any criminal conduct 
involving both the conduct described in subsection (a)(7) to which paragraph (1)
 applies and any other criminal conduct if such other conduct would be criminal 
conduct if the conduct described in subsection (a)(7) were not committed.'.
 (b) TECHNICAL AND CONFORMING AMENDMENTS- So much of section 208 as prece
des subsection (d) (as added by subsection (a) of this section) is amended--
 (1) in subsection (a), by redesignating paragraphs (1), (2), and (3)
 as subparagraphs (A), (B), and (C), respectively;
 (2) in subsection (g), by redesignating paragraphs (1), (2), and (3)
 as subparagraphs (A), (B), and (C), respectively;
 (3) by redesignating subsections (a) through (h) as paragraphs (1) t
hrough (8), respectively;
 (4) by inserting `(a)' before `Whoever';
 (5) by inserting `(b)' at the beginning of the next-to-last undesign
ated paragraph; and
 (6) by inserting `(c)' at the beginning of the last undesignated par
agraph.
SEC. 5122. REDUCTION OF AMOUNT OF WAGES NEEDED TO EARN A YEAR OF COVERAGE APP
LICABLE IN DETERMINING SPECIAL MINIMUM PRIMARY INSURANCE AMOUNT.
 (a) IN GENERAL- Section 215(a)(1)(C)(ii) (42 U.S.C. 415(a)(1)(C)(ii)) is
 amended by striking `of not less than 25 percent' the first place it appears an
d all that follows through `1977) if' and inserting `of not less than 25 percent
 (in the case of a year after 1950 and before 1978) of the maximum amount which 
(pursuant to subsection (e)) may be counted for such year, or 25 percent (in the
 case of a year after 1977 and before 1991) or 15 percent (in the case of a year
 after 1990) of the maximum amount which (pursuant to subsection (e)) could be c
ounted for such year if'.
 (b) RETENTION OF CURRENT AMOUNT OF WAGES NEEDED TO EARN A YEAR OF COVERA
GE FOR PURPOSES OF WINDFALL ELIMINATION PROVISION- Section 215(a)(7)(D) (42 U.S.
C. 415(a)(7)(D)) is amended--
 (1) in the first sentence, by striking `(as defined in paragraph (1)
(C)(ii))'; and
 (2) by adding at the end (after the table) the following new flush s
entence:
`For purposes of this subparagraph, the term `year of coverage' shall hav
e the meaning provided in paragraph (1)(C)(ii), except that the reference to `15
 percent' therein shall be deemed to be a reference to `25 percent'.'.
SEC. 5123. CHARGING OF EARNINGS OF CORPORATE DIRECTORS.
 (a) IN GENERAL-
 (1) Title II is amended by moving the last undesignated paragraph of
 section 211(a) of such title (as added by section 9022(a) of the Omnibus Budget
 Reconciliation Act of 1987) to the end of section 203(f)(5) of such title.

 (2) The undesignated paragraph moved to section 203(f)(5) of the Soc
ial Security Act by paragraph (1) is amended--
 (A) by striking `Any income of an individual which results from 
or is attributable to' and inserting `(E) For purposes of this section, any indi
vidual's net earnings from self-employment which result from or are attributable
 to',
 (B) by striking `the income is actually paid' and inserting `the
 income, on which the computation of such net earnings from self-employment is b
ased, is actually paid'; and
 (C) by striking `unless it was' and inserting `unless such incom
e was'.
 (3) The last undesignated paragraph of section 1402(a) of the Intern
al Revenue Code of 1986 (as added by section 9022(b) of the Omnibus Budget Recon
ciliation Act of 1987) is repealed.
 (b) EFFECTIVE DATE- The amendments made by this section shall apply with
 respect to income received for services performed in taxable years beginning af
ter December 31, 1990.
SEC. 5124. COLLECTION OF EMPLOYEE SOCIAL SECURITY AND RAILROAD RETIREMENT TAX
ES ON TAXABLE GROUP-TERM LIFE INSURANCE PROVIDED TO RETIREES.
 (a) SOCIAL SECURITY TAXES- Section 3102 of the Internal Revenue Code of 
1986 (relating to deduction of tax from wages) is amended by adding at the end t
hereof the following new subsection:
 `(d) SPECIAL RULE FOR CERTAIN TAXABLE GROUP-TERM LIFE INSURANCE BENEFITS
-
 `(1) IN GENERAL- In the case of any payment for group-term life insu
rance to which this subsection applies--
 `(A) subsection (a) shall not apply,
 `(B) the employer shall separately include on the statement requ
ired under section 6051--
 `(i) the portion of the wages which consists of payments for
 group-term life insurance to which this subsection applies, and<
/ul>
 `(ii) the amount of the tax imposed by section 3101 on such 
payments, and
 `(C) the tax imposed by section 3101 on such payments shall be p
aid by the employee.
 `(2) BENEFITS TO WHICH SUBSECTION APPLIES- This subsection shall app
ly to any payment for group-term life insurance to the extent--
 `(A) such payment constitutes wages, and
 `(B) such payment is for coverage for periods during which an em
ployment relationship no longer exists between the employee and the employer.'
 (b) RAILROAD RETIREMENT TAXES- Section 3202 of such Code (relating to de
duction of tax from compensation) is amended by adding at the end thereof the fo
llowing new subsection:
 `(d) SPECIAL RULE FOR CERTAIN TAXABLE GROUP-TERM LIFE INSURANCE BENEFITS
-
 `(1) IN GENERAL- In the case of any payment for group-term life insu
rance to which this subsection applies--
 `(A) subsection (a) shall not apply,
 `(B) the employer shall separately include on the statement requ
ired under section 6051--
 `(i) the portion of the compensation which consists of payme
nts for group-term life insurance to which this subsection applies, and
 `(ii) the amount of the tax imposed by section 3201 on such 
payments, and
 `(C) the tax imposed by section 3201 on such payments shall be p
aid by the employee.
 `(2) BENEFITS TO WHICH SUBSECTION APPLIES- This subsection shall app
ly to any payment for group-term life insurance to the extent--
 `(A) such payment constitutes compensation, and
 `(B) such payment is for coverage for periods during which an em
ployment relationship no longer exists between the employee and the employer.'
 (c) EFFECTIVE DATE- The amendments made by this section shall apply to c
overage provided after December 31, 1990.
SEC. 5125. TIER 1 RAILROAD RETIREMENT TAX RATES EXPLICITLY DETERMINED BY REFE
RENCE TO SOCIAL SECURITY TAXES.
 (a) TAX ON EMPLOYEES- Subsection (a) of section 3201 of the Internal Rev
enue Code of 1986 (relating to rate of tax) is amended--
 (1) by striking `following' and inserting `applicable', and
 (2) by striking `employee:' and all that follows and inserting `empl
oyee. For purposes of the preceding sentence, the term `applicable percentage' m
eans the percentage equal to the sum of the rates of tax in effect under subsect
ions (a) and (b) of section 3101 for the calendar year.'
 (b) TAX ON EMPLOYEE REPRESENTATIVES- Paragraph (1) of section 3211(a) of
 such Code (relating to rate of tax) is amended--
 (1) by striking `following' and inserting `applicable', and
 (2) by striking `representative:' and all that follows and inserting
 `representative. For purposes of the preceding sentence, the term `applicable p
ercentage' means the percentage equal to the sum of the rates of tax in effect u
nder subsections (a) and (b) of section 3101 and subsections (a) and (b) of sect
ion 3111 for the calendar year.'
 (c) TAX ON EMPLOYERS- Subsection (a) of section 3221 of such Code (relat
ing to rate of tax) is amended--
 (1) by striking `following' and inserting `applicable', and
 (2) by striking `employer:' and all that follows and inserting `empl
oyer. For purposes of the preceding sentence, the term `applicable percentage' m
eans the percentage equal to the sum of the rates of tax in effect under subsect
ions (a) and (b) of section 3111 for the calendar year.'
SEC. 5126. TRANSFER TO RAILROAD RETIREMENT ACCOUNT.
 Subsection (c)(1)(A) of section 224 of the Railroad Retirement Solvency 
Act of 1983 (relating to section 72(r) revenue increase transferred to certain r
ailroad accounts) is amended by striking `1990' and inserting `1992'.
SEC. 5127. WAIVER OF 2-YEAR WAITING PERIOD FOR INDEPENDENT ENTITLEMENT TO DIV
ORCED SPOUSE'S BENEFITS.
 (a) WAIVER FOR PURPOSES OF DEDUCTIONS ON ACCOUNT OF WORK- Section 203(b)
(2) (42 U.S.C. 403(b)(2)) is amended--
 (1) by striking `(2) When' and all that follows through `2 years, th
e benefit' and inserting the following:
 `(2)(A) Except as provided in subparagraph (B), in any case in which--
 `(i) any of the other persons referred to in paragraph (1)(B) is ent
itled to monthly benefits as a divorced spouse under section 202(b) or (c) for a
ny month, and
 `(ii) such person has been divorced for not less than 2 years,<
/ul>
the benefit'; and
 (2) by adding at the end the following new subparagraph:
 `(B) Clause (ii) of subparagraph (A) shall not apply with respect to any
 divorced spouse in any case in which the individual referred to in paragraph (1
) became entitled to old-age insurance benefits under section 202(a) before the 
date of the divorce.'.
 (b) WAIVER IN CASE OF NONCOVERED WORK OUTSIDE THE UNITED STATES- Section
 203(d)(1)(B) (42 U.S.C. 403(d)(1)(B)) is amended--
 (1) by striking `(B) When' and all that follows through `2 years, th
e benefit' and inserting the following:
 `(B)(i) Except as provided in clause (ii), in any case in which--
 `(I) a divorced spouse is entitled to monthly benefits under section
 202(b) or (c) for any month, and
 `(II) such divorced spouse has been divorced for not less than 2 yea
rs,
the benefit'; and
 (2) by adding at the end the following new clause:
 `(ii) Subclause (II) of clause (i) shall not apply with respect to any d
ivorced spouse in any case in which the individual entitled to old-age insurance
 benefits referred to in subparagraph (A) became entitled to such benefits befor
e the date of the divorce.'.
 (c) EFFECTIVE DATE- The amendments made by this section shall apply with
 respect to benefits for months after December 1990.
SEC. 5128. MODIFICATION OF THE PREEFFECTUATION REVIEW REQUIREMENT APPLICABLE 
TO DISABILITY INSURANCE CASES.
 (a) IN GENERAL- Section 221(c)(3) (42 U.S.C. 421(c)(3)) is amended to re
ad as follows:
 `(3)(A) In carrying out the provisions of paragraph (2) with respect to 
the review of determinations made by State agencies pursuant to this section tha
t individuals are under disabilities (as defined in section 216(i) or 223(d)), t
he Secretary shall review--
 `(i) at least 50 percent of all such determinations made by State ag
encies on applications for benefits under this title, and
 `(ii) other determinations made by State agencies pursuant to this s
ection to the extent necessary to assure a high level of accuracy in such other 
determinations.
 `(B) In conducting reviews pursuant to subparagraph (A), the Secretary s
hall, to the extent feasible, select for review those determinations which the S
ecretary identifies as being the most likely to be incorrect.
 `(C) Not later than April 1, 1992, and annually thereafter, the Secretar
y shall submit to the Committee on Ways and Means of the House of Representative
s and the Committee on Finance of the Senate a written report setting forth the 
number of reviews conducted under subparagraph (A)(ii) during the preceding fisc
al year and the findings of the Secretary based on such reviews of the accuracy 
of the determinations made by State agencies pursuant to this section.'.
 (b) EFFECTIVE DATE- The amendment made by subsection (a) shall apply wit
h respect to determinations made by State agencies in fiscal years after fiscal 
year 1990.
SEC. 5129. RECOVERY OF OASDI OVERPAYMENTS BY MEANS OF REDUCTION IN TAX REFUND
S.
 (a) ADDITIONAL METHOD OF RECOVERY- Section 204(a)(1)(A) (42 U.S.C. 404(a
)(1)(A)) is amended by inserting after `payments to such overpaid person,' the f
ollowing: `or shall obtain recovery by means of reduction in tax refunds based o
n notice to the Secretary of the Treasury as permitted under section 3720A of ti
tle 31, United States Code,'.
 (b) RECOVERY BY MEANS OF REDUCTION IN TAX REFUNDS- Section 3720A of titl
e 31, United States Code (relating to collection of debts owed to Federal agenci
es) is amended--
 (1) in subsection (a), by striking `OASDI overpayment and';
 (2) by redesignating subsection (f) as subsection (g); and
 (3) by inserting the following new subsection after subsection (e):<
/ul>
 `(f)(1) Subsection (a) shall apply with respect to an OASDI overpayment 
made to any individual only if such individual is not currently entitled to mont
hly insurance benefits under title II of the Social Security Act.
 `(2)(A) The requirements of subsection (b) shall not be treated as met i
n the case of the recovery of an OASDI overpayment from any individual under thi
s section unless the notification under subsection (b)(1) describes the conditio
ns under which the Secretary of Health and Human Services is required to waive r
ecovery of an overpayment, as provided under section 204(b) of the Social Securi
ty Act.
 `(B) In any case in which an individual files for a waiver under section
 204(b) of the Social Security Act within the 60-day period referred to in subse
ction (b)(2), the Secretary of Health and Human Services shall not certify to th
e Secretary of the Treasury that the debt is valid under subsection (b)(4) befor
e rendering a decision on the waiver request under such section 204(b). In lieu 
of payment, pursuant to subsection (c), to the Secretary of Health and Human Ser
vices of the amount of any reduction under this subsection based on an OASDI ove
rpayment, the Secretary of the Treasury shall deposit such amount in the Federal
 Old-Age and Survivors Insurance Trust Fund or the Federal Disability Insurance 
Trust Fund, whichever is certified to the Secretary of the Treasury as appropria
te by the Secretary of Health and Human Services.'.
 (c) INTERNAL REVENUE CODE PROVISIONS-
 (1) IN GENERAL- Subsection (d) of section 6402 of the Internal Reven
ue Code of 1986 (relating to collection of debts owed to Federal agencies) is am
ended--
 (A) in paragraph (1), by striking `any OASDI overpayment and'; a
nd
 (B) by striking paragraph (3) and inserting the following new pa
ragraph:
 `(3) TREATMENT OF OASDI OVERPAYMENTS-
 `(A) REQUIREMENTS- Paragraph (1) shall apply with respect to an 
OASDI overpayment only if the requirements of paragraphs (1) and (2) of section 
3720A(f) of title 31, United States Code, are met with respect to such overpayme
nt.
 `(B) NOTICE; PROTECTION OF OTHER PERSONS FILING JOINT RETURN-
 `(i) NOTICE- In the case of a debt consisting of an OASDI ov
erpayment, if the Secretary determines upon receipt of the notice referred to in
 paragraph (1) that the refund from which the reduction described in paragraph (
1)(A) would be made is based upon a joint return, the Secretary shall--
 `(I) notify each taxpayer filing such joint return that 
the reduction is being made from a refund based upon such return, and<
/ul>
 `(II) include in such notification a description of the 
procedures to be followed, in the case of a joint return, to protect the share o
f the refund which may be payable to another person.
 `(ii) ADJUSTMENTS BASED ON PROTECTIONS GIVEN TO OTHER TAXPAY
ERS ON JOINT RETURN- If the other person filing a joint return with the person o
wing the OASDI overpayment takes appropriate action to secure his or her proper 
share of the refund subject to reduction under this subsection, the Secretary sh
all pay such share to such other person. The Secretary shall deduct the amount o
f such payment from amounts which are derived from subsequent reductions in refu
nds under this subsection and are payable to a trust fund referred to in subpara
graph (C).
 `(C) DEPOSIT OF AMOUNT OF REDUCTION INTO APPROPRIATE TRUST FUND-
 In lieu of payment, pursuant to paragraph (1)(B), of the amount of any reductio
n under this subsection to the Secretary of Health and Human Services, the Secre
tary shall deposit such amount in the Federal Old-Age and Survivors Insurance Tr
ust Fund or the Federal Disability Insurance Trust Fund, whichever is certified 
to the Secretary as appropriate by the Secretary of Health and Human Services.
 `(D) OASDI OVERPAYMENT- For purposes of this paragraph, the term
 `OASDI overpayment' means any overpayment of benefits made to an individual und
er title II of the Social Security Act.'.
 (2) PRESERVATION OF REMEDIES- Subsection (e) of section 6402 of such
 Code (relating to review of reductions) is amended in the last sentence by inse
rting before the period the following: `or any such action against the Secretary
 of Health and Human Services which is otherwise available with respect to recov
eries of overpayments of benefits under section 204 of the Social Security Act'.

 (d) EFFECTIVE DATE- The amendments made by this section--
 (1) shall take effect January 1, 1991, and
 (2) shall not apply to refunds to which the amendments made by secti
on 2653 of the Deficit Reduction Act of 1984 (98 Stat. 1153) do not apply.<
/ul>
SEC. 5130. MISCELLANEOUS TECHNICAL CORRECTIONS.
 (a) IN GENERAL-
 (1) AMENDMENT RELATING TO SECTION 7088 OF PUBLIC LAW 100-690- Sectio
n 208 (42 U.S.C. 408) is amended, in the last undesignated paragraph, by strikin
g `section 405(c)(2) of this title' and inserting `section 205(c)(2)'.
 (2) AMENDMENTS RELATING TO SECTION 322 OF PUBLIC LAW 98-21- Paragrap
hs (1) and (2) of section 322(b) of the Social Security Amendments of 1983 (Publ
ic Law 98-21, 97 Stat. 121) are each amended by inserting `the first place it ap
pears' before `the following'.
 (3) AMENDMENT RELATING TO SECTION 1011B(b)(4) OF PUBLIC LAW 100-647-
 Section 211(a) (42 U.S.C. 411(a)) is amended by redesignating the second paragr
aph (14) as paragraph (15).
 (4) AMENDMENT RELATING TO SECTION 2003(d) OF PUBLIC LAW 100-647- Par
agraph (3) of section 3509(d) of the Internal Revenue Code of 1986 (as amended b
y section 2003(d) of the Technical and Miscellaneous Revenue Act of 1988 (Public
 Law 100-647; 102 Stat. 3598)) is further amended by striking `subsection (d)(4)
' and inserting `subsection (d)(3)'.
 (5) AMENDMENT RELATING TO SECTION 10208 OF PUBLIC LAW 101-239- Secti
on 209(a)(7)(B) (42 U.S.C. 409(a)(7)(B)) is amended by striking `subparagraph (B
)' in the matter following clause (ii) and inserting `clause (ii)'.
 (b) EFFECTIVE DATES- The amendments made by subsection (a) shall be effe
ctive as if included in the enactment of the provision to which it relates.
TITLE VI--ENERGY AND ENVIRONMENTAL PROGRAMS
Subtitle A--Abandoned Mine Reclamation
SEC. 6001. SHORT TITLE.
This subtitle may be cited as the `Abandoned Mine Reclamation Act of 1990'.
SEC. 6002. ABANDONED MINE RECLAMATION FUND.
(a) SOURCES OF DEPOSITS- Section 401(b) of the Surface Mining Control and Rec
lamation Act of 1977 (30 U.S.C. 1231(b)) is amended as follows:
 (1) Amend paragraph (1) to read as follows:
 `(1) the reclamation fees levied under section 402;'.
 (2) Strike `and' at the end of paragraph (3); strike the period at t
he end of paragraph (4) and insert `; and'; and add the following new paragraph 
at the end:
 `(5) interest credited to the fund under subsection (e).'.
(b) USE OF MONEY- Section 401(c) of the Surface Mining Control and Reclamatio
n Act of 1977 (30 U.S.C. 1231(c)) is amended as follows:
 (1) In paragraph (1), strike `402(g)(2)' and insert `402(g)(1)'.
 (2) Amend paragraph (2) to read as follows:
 `(2) for transfer on an annual basis to the Secretary of Agriculture
 for use under section 406;'.
 (3) In paragraph (6), strike `by contract' and insert `conducted in 
accordance with section 3501 of the Omnibus Budget Reconciliation Act of 1986' a
fter `projects'.
 (4) Strike `and' at the end of paragraph (9).
 (5) Strike paragraph (10) and insert the following:
 `(10) for use under section 411;
 `(11) for the purpose of section 507(c), except that not more than $
10,000,000 shall annually be available for such purpose; and
 `(12) all other necessary expenses to accomplish the purposes of thi
s title.'.
(c) INTEREST- Section 401 of the Surface Mining Control and Reclamation Act o
f 1977 (30 U.S.C. 1231) is amended by adding the following new subsection at the
 end:
`(e) INTEREST- The Secretary of the Interior shall notify the Secretary of th
e Treasury as to what portion of the fund is not, in his judgment, required to m
eet current withdrawals. The Secretary of the Treasury shall invest such portion
 of the fund in public debt securities with maturities suitable for the needs of
 such fund and bearing interest at rates determined by the Secretary of the Trea
sury, taking into consideration current market yields on outstanding marketable 
obligations of the United States of comparable maturities. The income on such in
vestments shall be credited to, and form a part of, the fund.'.
SEC. 6003. RECLAMATION FEES.
(a) DUE DATE- Section 402(b) of the Surface Mining Control and Reclamation Ac
t of 1977 (30 U.S.C. 1232(b)) is amended by striking `fifteen years after the da
te of enactment of this Act unless extended by an Act of Congress' and inserting
 `September 30, 1995'.
(b) STATEMENT- Section 402(c) of the Surface Mining Control and Reclamation A
ct of 1977 (30 U.S.C. 1232(c)) is amended by adding the following at the end the
reof: `Such statement shall include an identification of the permittee of the su
rface coal mining operation, any operator in addition to the permittee, the owne
r of the coal, the preparation plant, tripple, 64
 or loading point for the coal, and the person purchasing the coal from the o
perator. The report shall also specify the number of the permit required under s
ection 506 and the mine safety and health identification number. Each quarterly 
report shall contain a notification of any changes in the information required b
y this subsection since the date of the preceding quarterly report. The informat
ion contained in the quarterly reports under this subsection shall be maintained
 by the Secretary in a computerized database.'.
 64 So in original. Probably should be `tipple'.
(c) AUDITS- Section 402(d) of the Surface Mining Control and Reclamation Act 
of 1977 (30 U.S.C. 1232(d)) is amended by inserting `(1)' after `(d)' and by add
ing the following at the end thereof:
`(2) The Secretary shall conduct such audits of coal production and the payme
nt of fees under this title as may be necessary to ensure full compliance with t
he provisions of this title. For purposes of performing such audits the Secretar
y (or any duly designated officer, employee, or representative of the Secretary)
 shall, at all reasonable times, upon request, have access to, and may copy, all
 books, papers, and other documents of any person subject to the provisions of t
his title. The Secretary may at any time conduct audits of any surface coal mini
ng and reclamation operation, including without limitation, tipples and preparat
ion plants, as may be necessary in the judgment of the Secretary to ensure full 
and complete payment of the fees under this title.'.
(d) NOTICE- Section 402(f) of the Surface Mining Control and Reclamation Act 
of 1977 (30 U.S.C. 1232(f)) is amended by adding the following at the end thereo
f: `Whenever the Secretary believes that any person has not paid the full amount
 of the fee payable under subsection (a) the Secretary shall notify the Federal 
agency responsible for ensuring compliance with the provisions of section 4121 o
f the Internal Revenue Code of 1986.'.
SEC. 6004. ALLOCATION OF FUNDS.
Section 402(g) of the Surface Mining Control and Reclamation Act of 1977 (30 
U.S.C. 1232(g)) is amended to read as follows:
`(g) ALLOCATION OF FUNDS- (1) Moneys deposited into the fund shall be allocat
ed by the Secretary to accomplish the purposes of this title as follows:
 `(A) 50 percent of the reclamation fees collected annually in any St
ate (other than fees collected with respect to Indian lands) shall be allocated 
annually by the Secretary to the State, subject to such State having each of the
 following:
 `(i) An approved abandoned mine reclamation program pursuant to 
section 405.
 `(ii) Lands and waters which are eligible pursuant to section 40
4 (in the case of a State not certified under section 411(a)) or pursuant to sec
tion 411(b) (in the case of a State certified under section 411(a)).
 `(B) 50 percent of the reclamation fees collected annually with resp
ect to Indian lands shall be allocated annually by the Secretary to the Indian t
ribe having jurisdiction over such lands, subject to such tribe having each of t
he following:
 `(i) an approved abandoned mine reclamation program pursuant to 
section 405.
 `(ii) Lands and waters which are eligible pursuant to section 40
4 (in the case of an Indian tribe not certified under section 411(a)) or pursuan
t to section 411(b) (in the case of a tribe certified under section 411(a)).
 `(C) The funds allocated by the Secretary under this paragraph to St
ates and Indian tribes shall only be used for annual reclamation project constru
ction and program administration grants.
 `(D) To the extent not expended within 3 years after the date of any
 grant award under this paragraph, such grant shall be available for expenditure
 by the Secretary in any area under paragraph (2), (3), (4), or (5).
`(2) 20 percent of the amounts available in the fund in any fiscal year which
 are not allocated under paragraph (1) in that fiscal year (including that inter
est accruing as provided in section 401(e) and including funds available for rea
llocation pursuant to paragraph (1)(D)), shall be allocated to the Secretary onl
y for the purpose of making the annual transfer to the Secretary of Agriculture 
under section 401(c)(2).
`(3) Amounts available in the fund which are not allocated to States and Indi
an tribes under paragraph (1) or allocated under paragraphs (2) and (5) are auth
orized to be expended by the Secretary for any of the following:
 `(A) For the purpose of section 507(c), either directly or through g
rants to the States, subject to the limitation contained in section 401(c)(11).<
/ul>
 `(B) For the purpose of section 410 (relating to emergencies).<
/ul>
 `(C) For the purpose of meeting the objectives of the fund set forth
 in section 403(a) for eligible lands and waters pursuant to section 404 in Stat
es and on Indian lands where the State or Indian tribe does not have an approved
 abandoned mine reclamation program pursuant to section 405.
 `(D) For the administration of this title by the Secretary.
`(4)(A) Amounts available in the fund which are not allocated under paragraph
s (1), (2), and (5) or expended under paragraph (3) in any fiscal year are autho
rized to be expended by the Secretary under this paragraph for the reclamation o
r drainage abatement of lands and waters within unreclaimed sites which are mine
d for coal or which were affected by such mining, wastebanks, coal processing or
 other coal mining processes and left in an inadequate reclamation status.
`(B) Funds made available under this paragraph may be used for reclamation or
 drainage abatement at a site referred to in subparagraph (A) if the Secretary m
akes either of the following findings:
 `(i) A finding that the surface coal mining operation occurred durin
g the period beginning on August 4, 1977, and ending on or before the date on wh
ich the Secretary approved a State program pursuant to section 503 for a State i
n which the site is located, and that any funds for reclamation or abatement whi
ch are available pursuant to a bond or other form of financial guarantee or from
 any other source are not sufficient to provide for adequate reclamation or abat
ement at the site.
 `(ii) A finding that the surface coal mining operation occurred duri
ng the period beginning on August 4, 1977, and ending on or before the date of e
nactment of this paragraph, and that the surety of such mining operator became i
nsolvent during such period, and as of the date of enactment of this paragraph, 
funds immediately available from proceedings relating to such insolvency, or fro
m any financial guarantee or other source are not sufficient to provide for adeq
uate reclamation or abatement at the site.
`(C) In determining which sites to reclaim pursuant to this paragraph, the Se
cretary shall follow the priorities stated in paragraphs (1) and (2) of section 
403(a). The Secretary shall ensure that priority is given to those sites which a
re in the immediate vicinity of a residential area or which have an adverse econ
omic impact upon a local community.
`(D) Amounts collected from the assessment of civil penalties under section 5
18 are authorized to be appropriated to carry out this paragraph.
`(E) Any State may expend grants made available under paragraphs (1) and (5) 
for reclamation and abatement of any site referred to in subparagraph (A) if the
 State, with the concurrence of the Secretary, makes either of the findings refe
rred to in clause (i) or (ii) of subparagraph (B) and if the State determines th
at the reclamation priority of the site is the same or more urgent than the recl
amation priority for eligible lands and waters pursuant to section 404 under the
 priorities stated in paragraphs (1) and (2) of section 403(a).
`(F) For the purposes of the certification referred to in section 411(a), sit
es referred to in subparagraph (A) of this paragraph shall be considered as havi
ng the same priorities as those stated in section 403(a) for eligible lands and 
waters pursuant to section 404. All sites referred to in subparagraph (A) of thi
s paragraph within any State shall be reclaimed prior to such State making the c
ertification referred to in section 411(a).
`(5) The Secretary shall allocate 40 percent of the amount in the fund after 
making the allocation referred to in paragraph (1) for making additional annual 
grants to States and Indian tribes which are not certified under section 411(a) 
to supplement grants received by such States and Indian tribes pursuant to parag
raph (1)(C) until the priorities stated in paragraphs (1) and (2) of section 403
(a) have been achieved by such State or Indian tribe. The allocation of such fun
ds for the purpose of making such expenditures shall be through a formula based 
on the amount of coal historically produced in the State or from the Indian land
s concerned prior to August 3, 1977. Funds allocated or expended by the Secretar
y under paragraphs (2), (3), or (4) of this subsection for any State or Indian t
ribe shall not be deducted against any allocation of funds to the State or India
n tribe under paragraph (1) or under this paragraph.
`(6) Any State may receive and retain, without regard to the 3-year limitatio
n referred to in paragraph (1)(D), up to 10 percent of the total of the grants m
ade annually to such State under paragraphs (1) and (5) if such amounts are depo
sited into either--
 `(A) a special trust fund established under State law pursuant to wh
ich such amounts (together with all interest earned on such amounts) are expende
d by the State solely to achieve the priorities stated in section 403(a) after S
eptember 30, 1995, or
 `(B) an acid mine drainage abatement and treatment fund established 
under State law as provided in paragraph (7).
`(7)(A) Any State may establish under State law an acid mine drainage abateme
nt and treatment fund from which amounts (together with all interest earned on s
uch amounts) are expended by the State to implement, in consultation with the So
il Conservation Service, acid mine drainage abatement and treatment plans approv
ed by the Secretary. Such plans shall provide for the comprehensive abatement of
 the causes and treatment of the effects of acid mine drainage within qualified 
hydrologic units affected by coal mining practices.
`(B) The plan shall include, but shall not be limited to, each of the followi
ng:
 `(i) An identification of the qualified hydrologic unit.
 `(ii) The extent to which acid mine drainage is affecting the water 
quality and biological resources within the hydrologic unit.
 `(iii) An identification of the sources of acid mine drainage within
 the hydrologic unit.
 `(iv) An identification of individual projects and the measures prop
osed to be undertaken to abate and treat the causes or effects of acid mine drai
nage within the hydrologic unit.
 `(v) The cost of undertaking the proposed abatement and treatment me
asures.
 `(vi) An identification of existing and proposed sources of funding 
for such measures.
 `(vii) An analysis of the cost-effectiveness and environmental benef
its of abatement and treatment measures.
`(C) The Secretary may approve any plan under this paragraph only after deter
mining that such plan meets the requirements of this paragraph. In conducting an
 analysis of the items referred to in clauses (iv), (v), and (vii) the Director 
of the Office of Surface Mining shall obtain the comments of the Director of the
 Bureau of Mines. In approving plans under this paragraph, the Secretary shall g
ive a priority to those plans which will be implemented in coordination with mea
sures undertaken by the Secretary of Agriculture under section 406.
`(D) For purposes of this paragraph, the term `qualified hydrologic unit' mea
ns a hydrologic unit--
 `(i) in which the water quality has been significantly affected by a
cid mine drainage from coal mining practices in a manner which adversely impacts
 biological resources; and
 `(ii) which contains lands and waters which are--
 `(I) eligible pursuant to section 404 and include any of the pri
orities stated in paragraph (1), (2), or (3) of section 403(a); and
 `(II) proposed to be the subject of the expenditures by the Stat
e (from amounts available from the forfeiture of bonds required under section 50
9 or from other State sources) to mitigate acid mine drainage.
`(8) Of the funds available for expenditure under this subsection in any fisc
al year, the Secretary shall allocate annually not less than $2,000,000 for expe
nditure in each State, and for each Indian tribe, having an approved abandoned m
ine reclamation program pursuant to section 405 and eligible lands and waters pu
rsuant to section 404 so long as an allocation of funds to such State or such tr
ibe is necessary to achieve the priorities stated in paragraphs (1) and (2) of s
ection 403(a).'.
SEC. 6005. FUND OBJECTIVES.
Section 403 of the Surface Mining Control and Reclamation Act of 1977 (30 U.S
.C. 1233) is amended as follows:
 (1) Insert `(a) PRIORITIES- ' after `SEC. 403.'.
 (2) Insert `, except as provided for under section 411,' after `titl
e'.
 (3) Add at the end the following new subsections:
`(b) UTILITIES AND OTHER FACILITIES- (1) Any State or Indian tribe not certif
ied under section 411(a) may expend up to 30 percent of the funds allocated to s
uch State or Indian tribe in any year through the grants made available under pa
ragraphs (1) and (5) of section 402(g) for the purpose of protecting, repairing,
 replacing, constructing, or enhancing facilities relating to water supply, incl
uding water distribution facilities and treatment plants, to replace water suppl
ies adversely affected by coal mining practices.
`(2) If the adverse effect on water supplies referred to in this subsection o
ccurred both prior to and after August 3, 1977, section 404 shall not be constru
ed to prohibit a State or Indian tribe referred to in paragraph (1) from using f
unds referred to in such paragraph for the purposes of this subsection if the St
ate or Indian tribe determines that such adverse effects occurred predominantly 
prior to August 3, 1977.
`(c) INVENTORY- For the purposes of assisting in the planning and evaluation 
of reclamation projects pursuant to section 405, and assisting in making the cer
tification referred to in section 411(a), the Secretary shall maintain an invent
ory of eligible lands and waters pursuant to section 404 which meet the prioriti
es stated in paragraphs (1) and (2) of subsection (a). Under standardized proced
ures established by the Secretary, States and Indian tribes with approved abando
ned mine reclamation programs pursuant to section 405 may offer amendments to up
date the inventory as it applies to eligible lands and waters under the jurisdic
tion of such States or tribes. The Secretary shall provide such States and tribe
s with the financial and technical assistance necessary for the purpose of makin
g inventory amendments. The Secretary shall compile and maintain an inventory fo
r States and Indian lands in the case when a State or Indian tribe does not have
 an approved abandoned mine reclamation program pursuant to section 405. On a re
gular basis, but not less than annually, the projects completed under this title
 shall be so noted on the inventory under standardized procedures established by
 the Secretary.'.
SEC. 6006. ELIGIBLE LANDS AND WATERS.
Section 404 of the Surface Mining Control and Reclamation Act of 1977 (30 U.S
.C. 1234) is amended by inserting `, except as provided for under section 411' a
fter `processes', and by adding the following at the end thereof: `For other pro
visions relating to lands and waters eligible for such expenditures, see section
 402(g)(4), section 403(b)(1), and section 409.'.
SEC. 6007. STATE RECLAMATION PROGRAMS.
Section 405 of the Surface Mining Control and Reclamation Act of 1977 (30 U.S
.C. 1235) is amended by adding the following at the end thereof:
`(1) No State shall be liable under any provision of Federal law for any cost
s or damages as a result of action taken or omitted in the course of carrying ou
t a State abandoned mine reclamation plan approved under this section. This subs
ection shall not preclude liability for cost or damages as a result of gross neg
ligence or intentional misconduct by the State. For purposes of the preceding se
ntence, reckless, willful, or wanton misconduct shall constitute gross negligenc
e.'.
SEC. 6008. CLARIFICATION.
Section 406(d) of the Surface Mining Control and Reclamation Act of 1977 (30 
U.S.C. 1236(d)) is amended by striking `experimental'.
SEC. 6009. VOIDS AND TUNNELS.
Section 409 of the the 65
 Surface Mining Control and Reclamation Act of 1977 (30 U.S.C. 1239) is amend
ed--
 65 So in original. Probably should be `of the Surface'.
 (1) in subsection (a) by striking `chairman of any tribe' and insert
ing in lieu thereof `the governing body of an Indian tribe';
 (2) in subsection (b), by striking `or Indian reservations under the
 provisions of subsection 402(g)' and inserting `or Indian tribes under the prov
isions of paragraphs (1) and (5) of section 402(g)'; and
 (3) by amending subsection (c) to read as follows:
`(c)(1) The Secretary may make expenditures and carry out the purposes of thi
s section in such States where requests are made by the Governor or governing bo
dy of an Indian tribe for those reclamation projects which meet the priorities s
tated in section 403(a)(1), except that for the purposes of this section the ref
erence to coal in section 403(a)(1) shall not apply.
`(2) The provisions of section 404 shall apply to this section, with the exce
ption that such mined lands need not have been mined for coal.
`(3) The Secretary shall not make any expenditures for the purposes of this s
ection in those States which have made the certification referred to in section 
411(a).'.
SEC. 6010. CERTIFICATION.
Title IV of the Surface Mining Control and Reclamation Act of 1977 (30 U.S.C.
 1231 et seq.) is amended as follows:
 (1) Redesignate sections 411, 412, and 413 as sections 412, 413, and
 414, respectively.
 (2) Insert after section 410 the following new section:
`SEC. 411. CERTIFICATION.
`(a) CERTIFICATION OF COMPLETION OF COAL RECLAMATION- The Governor of a State
, or the head of a governing body of an Indian tribe, with an approved abandoned
 mine reclamation program under section 405 may certify to the Secretary that al
l of the priorities stated in section 403(a) for eligible lands and waters pursu
ant to section 404 have been achieved. The Secretary, after notice in the Federa
l Register and opportunity for public comment, shall concur with such certificat
ion if the Secretary determines that such certification is correct.
`(b) ELIGIBLE LANDS, WATERS, AND FACILITIES- If the Secretary has concurred i
n a State or tribal certification under subsection (a), for purposes of determin
ing the eligibility of lands and waters for annual grants under section 402(g)(1
), section 404 shall not apply, and eligible lands, waters, and facilities shall
 be those--
 `(1) which were mined or processed for minerals or which were affect
ed by such mining or processing, and abandoned or left in an inadequate reclamat
ion status prior to August 3, 1977; and
 `(2) for which there is no continuing reclamation responsibility und
er State or other Federal laws. In determining the eligibility under this subsec
tion of Federal lands, waters, and facilities under the jurisdiction of the Fore
st Service or Bureau of Land Management, in lieu of the August 3, 1977, date ref
erred to in paragraph (1) the applicable date shall be August 28, 1974, and Nove
mber 26, 1980, respectively.
`(c) PRIORITIES- Expenditures of moneys for lands, waters, and facilities ref
erred to in subsection (b) shall reflect the following objectives and priorities
 in the order stated (in lieu of the priorities set forth in section 403):
 `(1) The protection of public health, safety, general welfare, and p
roperty from extreme danger of adverse effects of mineral mining and processing 
practices.
 `(2) The protection of public health, safety, and general welfare fr
om adverse effects of mineral mining and processing practices.
 `(3) The restoration of land and water resources and the environment
 previously degraded by the adverse effects of mineral mining and processing pra
ctices.
`(d) SPECIFIC SITES AND AREAS NOT ELIGIBLE- Sites and areas designated for re
medial action pursuant to the Uranium Mill Tailings Radiation Control Act of 197
8 (42 U.S.C. 7901 and following) or which have been listed for remedial action p
ursuant to the Comprehensive Environmental Response Compensation and Liability A
ct of 1980 (42 U.S.C. 9601 and following) shall not be eligible for expenditures
 from the Fund under this section.
`(e) UTILITIES AND OTHER FACILITIES- Reclamation projects involving the prote
ction, repair, replacement, construction, or enhancement of utilities, such as t
hose relating to water supply, roads, and such other facilities serving the publ
ic adversely affected by mineral mining and processing practices, and the constr
uction of public facilities in communities impacted by coal or other mineral min
ing and processing practices, shall be deemed part of the objectives set forth, 
and undertaken as they relate to, the priorities stated in subsection (c).
`(f) Notwithstanding subsection (e), where the Secretary has concurred in the
 certification referenced in subsection (a) and where the Governor of a State or
 the head of a governing body of an Indian tribe determines there is a need for 
activities or construction of specific public facilities related to the coal or 
minerals industry in States impacted by coal or minerals development and the Sec
retary concurs in such need, then the State or Indian tribe, as the case may be,
 may use annual grants made available under section 402(g)(1) to carry out such 
activities or construction.
`(g) APPLICATION OF OTHER PROVISIONS- The provisions of sections 407 and 408 
shall apply to subsections (a) through (e) of this section, except that for purp
oses of this section the references to coal in sections 407 and 408 shall not ap
ply.'.
SEC. 6011. SMALL OPERATOR ASSISTANCE.
Section 507(c) of the Surface Mining Control and Reclamation Act of 1977 (30 
U.S.C. 1257(c)) is amended by striking `100,000' and inserting `300,000'.
SEC. 6012. TECHNICAL AND CONFORMING AMENDMENTS.
(a) TABLE OF CONTENTS- The table of contents in the first section of the Surf
ace Mining Control and Reclamation Act of 1977 (30 U.S.C. 1201) is amended as fo
llows:
 (1) Redesignate the items relating to sections 411, 412, and 413 as 
items 412, 413, and 414, respectively.
 (2) Insert after the item relating to section 410 the following:
`Sec. 411. Certification.'.
(b) REFERENCE- Section 712 (b) of the Surface Mining Control and Reclamation 
Act of 1977 (30 U.S.C. 1302(b)) is amended to read as follows:
`(b) For the implementation and funding of section 507(c), see the provisions
 of section 401(c)(11).'.
(c) REPEAL- Section 406(i) of the Surface Mining Control and Reclamation Act 
of 1977 (30 U.S.C. 1236(i)) is repealed.
(d) TECHNICAL CORRECTIONS- The following provisions of the Surface Mining Con
trol and Reclamation Act of 1977 (30 U.S.C. 1231 and following) are amended as f
ollows:
 (1) Section 405(a) is amended by striking out `perparation' and inse
rting `preparation'.
 (2) Section 405(h) is amended by striking out `Upon approved' and in
serting `Upon approval'.
 (3) Section 406(a) is amended by striking out `including owners' and
 inserting `(including owners'.
 (4) Section 407(a)(4) is amended by striking out the period and inse
rting a semicolon.
 (5) Section 407(a) is amended by striking out `Then' and inserting `
then'.
 (6) Section 407(e) is amended by striking out `paragraph (1), of thi
s subsection' and inserting `paragraph (1) of subsection (c)'.
 (7) Section 407(g)(2) is amended by striking out `the use of' and in
serting `the use or'.
SEC. 6013. SAVINGS CLAUSE.
Nothing in this subtitle shall be construed to affect the certifications made
 by the State of Wyoming, the State of Montana, and the State of Louisiana to th
e Secretary of the Interior prior to the date of enactment of this subtitle that
 such State has completed the reclamation of eligible abandoned coal mine lands.
SEC. 6014. EFFECTIVE DATE.
The amendments made by this subtitle shall take effect at the beginning of th
e first fiscal year immediately following the fiscal year in which this subtitle
 is enacted.
Subtitle B--NRC User Fees and Annual Charges
SEC. 6101. NRC USER FEES AND ANNUAL CHARGES.
(a) ANNUAL ASSESSMENT-
 (1) IN GENERAL- Except as provided in paragraph (3), the Nuclear Reg
ulatory Commission (in this section referred to as the `Commission') shall annua
lly assess and collect such fees and charges as are described in subsections (b)
 and (c).
 (2) FIRST ASSESSMENT- The first assessment of fees under subsection 
(b) and annual charges under subsection (c) shall be made not later than Septemb
er 30, 1991.
 (3) LAST ASSESSMENT OF ANNUAL CHARGES- The last assessment of annual
 charges under subsection (c) shall be made not later than September 30, 1995.
(b) FEES FOR SERVICE OR THING OF VALUE- Pursuant to section 9701 of title 31,
 United States Code, any person who receives a service or thing of value from th
e Commission shall pay fees to cover the Commission's costs in providing any suc
h service or thing of value.
(c) ANNUAL CHARGES-
 (1) PERSONS SUBJECT TO CHARGE- Any licensee of the Commission may be
 required to pay, in addition to the fees set forth in subsection (b), an annual
 charge.
 (2) AGGREGATE AMOUNT OF CHARGES- The aggregate amount of the annual 
charge collected from all licensees shall equal an amount that approximates 100 
percent of the budget authority of the Commission in the fiscal year in which su
ch charge is collected, less any amount appropriated to the Commission from the 
Nuclear Waste Fund and the amount of fees collected under subsection (b) in such
 fiscal year.
 (3) AMOUNT PER LICENSEE- The Commission shall establish, by rule, a 
schedule of charges fairly and equitably allocating the aggregate amount of char
ges described in paragraph (2) among licensees. To the maximum extent practicabl
e, the charges shall have a reasonable relationship to the cost of providing reg
ulatory services and may be based on the allocation of the Commission's resource
s among licensees or classes of licensees.
(d) DEFINITION- As used in this section, the term `Nuclear Waste Fund' means 
the fund established pursuant to section 302(c) of the Nuclear Waste Policy Act 
of 1982 (42 U.S.C. 10222(c)).
(e) CONFORMING AMENDMENT TO COBRA- Paragraph (1)(A) of section 7601 of the Co
nsolidated Omnibus Budget Reconciliation Act of 1985 (Public Law 99-272) is amen
ded by striking `except that for fiscal year 1990 such maximum amount shall be e
stimated to be equal to 45 percent of the costs incurred by the Commission for f
iscal year 1990' and inserting `except as otherwise provided by law'.
Subtitle C--Amendments to Coastal Zone Management Act of 1972
SEC. 6201. SHORT TITLE.
This subtitle may be cited as the `Coastal Zone Act Reauthorization Amendment
s of 1990'.
SEC. 6202. FINDINGS AND PURPOSE OF THIS SUBTITLE.
(a) FINDINGS- Congress finds and declares the following:
 (1) Our oceans, coastal waters, and estuaries constitute a unique re
source. The condition of the water quality in and around the coastal areas is si
gnificantly declining. Growing human pressures on the coastal ecosystem will con
tinue to degrade this resource until adequate actions and policies are implement
ed.
 (2) Almost one-half of our total population now lives in coastal are
as. By 2010, the coastal population will have grown from 80,000,000 in 1960 to 1
27,000,000 people, an increase of approximately 60 percent, and population densi
ty in coastal counties will be among the highest in the Nation.
 (3) Marine resources contribute to the Nation's economic stability. 
Commercial and recreational fishery activities support an industry with an estim
ated value of $12,000,000,000 a year.
 (4) Wetlands play a vital role in sustaining the coastal economy and
 environment. Wetlands support and nourish fishery and marine resources. They al
so protect the Nation's shores from storm and wave damage. Coastal wetlands cont
ribute an estimated $5,000,000,000 to the production of fish and shellfish in th
e United States coastal waters. Yet, 50 percent of the Nation's coastal wetlands
 have been destroyed, and more are likely to decline in the near future.
 (5) Nonpoint source pollution is increasingly recognized as a signif
icant factor in coastal water degradation. In urban areas, storm water and combi
ned sewer overflow are linked to major coastal problems, and in rural areas, run
-off from agricultural activities may add to coastal pollution.
 (6) Coastal planning and development control measures are essential 
to protect coastal water quality, which is subject to continued ongoing stresses
. Currently, not enough is being done to manage and protect our coastal resource
s.
 (7) Global warming results from the accumulation of man-made gases, 
released into the atmosphere from such activities as the burning of fossil fuels
, deforestation, and the production of chlorofluorocarbons, which trap solar hea
t in the atmosphere and raise temperatures worldwide. Global warming could resul
t in significant global sea level rise by 2050 resulting from ocean expansion, t
he melting of snow and ice, and the gradual melting of the polar ice cap. Sea le
vel rise will result in the loss of natural resources such as beaches, dunes, es
tuaries, and wetlands, and will contribute to the salinization of drinking water
 supplies. Sea level rise will also result in damage to properties, infrastructu
res, and public works. There is a growing need to plan for sea level rise.<
/ul>
 (8) There is a clear link between coastal water quality and land use
 activities along the shore. State management programs under the Coastal Zone Ma
nagement Act of 1972 (16 U.S.C. 1451 et seq.) are among the best tools for prote
cting coastal resources and must play a larger role, particularly in improving c
oastal zone water quality.
 (9) All coastal States should have coastal zone management programs 
in place that conform to the Coastal Zone Management Act of 1972, as amended by 
this Act.
(b) PURPOSE- It is the purpose of Congress in this subtitle to enhance the ef
fectiveness of the Coastal Zone Management Act of 1972 by increasing our underst
anding of the coastal environment and expanding the ability of State coastal zon
e management programs to address coastal environmental problems.
SEC. 6203. FINDINGS AND POLICY OF COASTAL ZONE MANAGEMENT ACT OF 1972.
(a) FINDINGS- (1) Section 302(d) of the Coastal Zone Management Act of 1972 (
16 U.S.C. 1451(d)) is amended by inserting `habitat areas of the' immediately be
fore `coastal zone'.
(2) Section 302(f) of the Coastal Zone Management Act of 1972 (16 U.S.C. 1451
(f)) is amended by inserting `exclusive economic zone,' immediately after `terri
torial sea,'.
(3) Section 302 of the Coastal Zone Management Act of 1972 (16 U.S.C. 1451) i
s amended by adding at the end the following new subsections:
`(k) Land uses in the coastal zone, and the uses of adjacent lands which drai
n into the coastal zone, may significantly affect the quality of coastal waters 
and habitats, and efforts to control coastal water pollution from land use activ
ities must be improved.
`(l) Because global warming may result in a substantial sea level rise with s
erious adverse effects in the coastal zone, coastal states must anticipate and p
lan for such an occurrence.
`(m) Because of their proximity to and reliance upon the ocean and its resour
ces, the coastal states have substantial and significant interests in the protec
tion, management, and development of the resources of the exclusive economic zon
e that can only be served by the active participation of coastal states in all F
ederal programs affecting such resources and, wherever appropriate, by the devel
opment of state ocean resource plans as part of their federally approved coastal
 zone management programs.'.
(b) POLICY- (1) Section 303(2) of the Coastal Zone Management Act of 1972 (16
 U.S.C. 1452(2)) is amended by striking `as well as the needs for' and inserting
 in lieu thereof `as well as the needs for compatible'.
(2) Section 303(2)(B) of the Coastal Zone Management Act of 1972 (16 U.S.C. 1
452(2)(B)) is amended by striking `of subsidence' and inserting in lieu thereof 
the following: `likely to be affected by or vulnerable to sea level rise, land s
ubsidence,'.
(3) Section 303(2) of the Coastal Zone Management Act of 1972 (16 U.S.C. 1452
(2)), as amended by paragraph (1), is amended--
 (A) by redesignating subparagraphs (C) through (I) as subparagraphs 
(D) through (J), respectively; and
 (B) by inserting immediately after subparagraph (B) the following ne
w subparagraph:
 `(C) the management of coastal development to improve, safeguard
, and restore the quality of coastal waters, and to protect natural resources an
d existing uses of those waters,'.
(4) Section 303(2) of the Coastal Zone Management Act of 1972 (16 U.S.C. 1452
(2)), as amended by paragraphs (1) and (3), is further amended--
 (A) by striking `and' at the end of subparagraph (I), as so redesign
ated by paragraph (3);
 (B) by striking the semicolon in subparagraph (J), as so redesignate
d by paragraph (3), and inserting in lieu thereof a comma; and
 (C) by adding at the end the following new subparagraph:
 `(K) the study and development, in any case in which the Secreta
ry considers it to be appropriate, of plans for addressing the adverse effects u
pon the coastal zone of land subsidence and of sea level rise; and'.
(5) Section 303(3) of the Coastal Zone Management Act of 1972 (16 U.S.C. 1452
(3)) is amended by inserting `including those areas likely to be affected by lan
d subsidence, sea level rise, or fluctuating water levels of the Great Lakes,' i
mmediately after `hazardous areas,'.
(6) Section 303 of the Coastal Zone Management Act of 1972 (16 U.S.C. 1452) i
s amended by striking `and' at the end of paragraph (3); by striking the period 
at the end of paragraph (4) and inserting in lieu thereof a semicolon; and by ad
ding at the end the following new paragraphs:
 `(5) to encourage coordination and cooperation with and among the ap
propriate Federal, State, and local agencies, and international organizations wh
ere appropriate, in collection, analysis, synthesis, and dissemination of coasta
l management information, research results, and technical assistance, to support
 State and Federal regulation of land use practices affecting the coastal and oc
ean resources of the United States; and
 `(6) to respond to changing circumstances affecting the coastal envi
ronment and coastal resource management by encouraging States to consider such i
ssues as ocean uses potentially affecting the coastal zone.'.I72SEC. 6204. DEFIN
ITIONS.
(a) COASTAL ZONE- The third sentence of section 304(1) of the Coastal Zone Ma
nagement Act of 1972 (16 U.S.C. 1453(1)) is amended--
 (1) by inserting `, and to control those geographical areas which ar
e likely to be affected by or vulnerable to sea level rise' immediately before t
he period at the end; and
 (2) by striking `the United States territorial sea.' and inserting i
n lieu thereof `the outer limit of State title and ownership under the Submerged
 Lands Act (43 U.S.C. 1301 et seq.), the Act of March 2, 1917 (48 U.S.C. 749), t
he Covenant to Establish a Commonwealth of the Northern Mariana Islands in Polit
ical Union with the United States of America, as approved by the Act of March 24
, 1976 (48 U.S.C. 1681 note), or section 1 of the Act of November 20, 1963 (48 U
.S.C. 1705, 66
 as applicable.'.
 66 So in original. Probably should be `1705),'.
(b) ENFORCEABLE POLICY- Section 304 of the Coastal Zone Management Act of 197
2 (16 U.S.C. 1453) is amended by inserting after paragraph (6) the following' 67
 67 So in original. Probably should be `following:'.
 `(6a) 68
 The term `enforceable policy' means State policies which are legally binding
 through constitutional provisions, laws, regulations, land use plans, ordinance
s, or judicial or administrative decisions, by which a State exerts control over
 private and public land and water uses and natural resources in the coastal zon
e.'.
 68 So in original. Probably should be `(6)(a)'.
(c) WATER USE- Section 304(18) of the Coastal Zone Management Act of 1972 (16
 U.S.C. 1453(18)) is amended by striking all after `means' and inserting in lieu
 thereof `a use, activity, or project conducted in or on waters within the coast
al zone.'.
SEC. 6205. MANAGEMENT PROGRAM DEVELOPMENT GRANTS.
Section 305 of the Coastal Zone Management Act of 1972 (16 U.S.C. 1454) is am
ended to read as follows:
`MANAGEMENT PROGRAM DEVELOPMENT GRANTS
`SEC. 305. (a) In fiscal years 1991, 1992, and 1993, the Secretary may make a
 grant annually to any coastal state without an approved program if the coastal 
state demonstrates to the satisfaction of the Secretary that the grant will be u
sed to develop a management program consistent with the requirements set forth i
n section 306. The amount of any such grant shall not exceed $200,000 in any fis
cal year, and shall require State matching funds according to a 4-to-1 ratio of 
Federal-to-State contributions. After an initial grant is made to a coastal stat
e pursuant to this subsection, no subsequent grant shall be made to that coastal
 state pursuant to this subsection unless the Secretary finds that the coastal s
tate is satisfactorily developing its management program. No coastal State is el
igible to receive more than two grants pursuant to this subsection.
`(b) Any coastal State which has completed the development of its management 
program shall submit such program to the Secretary for review and approval pursu
ant to section 306.'.
SEC. 6206. ADMINISTRATIVE GRANTS.
(a) IN GENERAL- Section 306 of the Coastal Zone Management Act of 1972 (16 U.
S.C. 1455) is amended to read as follows:
`ADMINISTRATIVE GRANTS
`SEC. 306. (a) The Secretary may make grants to any coastal State for the pur
pose of administering that State's management program, if the State matches any 
such grant according to the following ratios of Federal-to-State contributions f
or the applicable fiscal year:
 `(1) For those States for which programs were approved prior to enac
tment of the Coastal Zone Act Reauthorization Amendments of 1990, 1 to 1 for any
 fiscal year.
 `(2) For programs approved after enactment of the Coastal Zone Act R
eauthorization Amendments of 1990, 4 to 1 for the first fiscal year, 2.3 to 1 fo
r the second fiscal year, 1.5 to 1 for the third fiscal year, and 1 to 1 for eac
h fiscal year thereafter.
`(b) The Secretary may make a grant to a coastal State under subsection (a) o
nly if the Secretary finds that the management program of the coastal State meet
s all applicable requirements of this title and has been approved in accordance 
with subsection (d);
`(c) Grants under this section shall be allocated to coastal States with appr
oved programs based on rules and regulations promulgated by the Secretary which 
shall take into account the extent and nature of the shoreline and area covered 
by the program, population of the area, and other relevant factors. The Secretar
y shall establish, after consulting with the coastal States, maximum and minimum
 grants for any fiscal year to promote equity between coastal States and effecti
ve coastal management.
`(d) Before approving a management program submitted by a coastal State, the 
Secretary shall find the following:
 `(1) The State has developed and adopted a management program for it
s coastal zone in accordance with rules and regulations promulgated by the Secre
tary, after notice, and with the opportunity of full participation by relevant F
ederal agencies, State agencies, local governments, regional organizations, port
 authorities, and other interested parties and individuals, public and private, 
which is adequate to carry out the purposes of this title and is consistent with
 the policy declared in section 303.
 `(2) The management program includes each of the following required 
program elements:
 `(A) An identification of the boundaries of the coastal zone sub
ject to the management program.
 `(B) A definition of what shall constitute permissible land uses
 and water uses within the coastal zone which have a direct and significant impa
ct on the coastal waters.
 `(C) An inventory and designation of areas of particular concern
 within the coastal zone.
 `(D) An identification of the means by which the State proposes 
to exert control over the land uses and water uses referred to in subparagraph (
B), including a list of relevant State constitutional provisions, laws, regulati
ons, and judicial decisions.
 `(E) Broad guidelines on priorities of uses in particular areas,
 including specifically those uses of lowest priority.
 `(F) A description of the organizational structure proposed to i
mplement such management program, including the responsibilities and interrelati
onships of local, areawide, State, regional, and interstate agencies in the mana
gement process.
 `(G) A definition of the term `beach' and a planning process for
 the protection of, and access to, public beaches and other public coastal areas
 of environmental, recreational, historical, esthetic, ecological, or cultural v
alue.
 `(H) A planning process for energy facilities likely to be locat
ed in, or which may significantly affect, the coastal zone, including a process 
for anticipating the management of the impacts resulting from such facilities.
 `(I) A planning process for assessing the effects of, and studyi
ng and evaluating ways to control, or lessen the impact of, shoreline erosion, a
nd to restore areas adversely affected by such erosion.
 `(3) The State has--
 `(A) coordinated its program with local, areawide, and interstat
e plans applicable to areas within the coastal zone--
 `(i) existing on January 1 of the year in which the State's 
management program is submitted to the Secretary; and
 `(ii) which have been developed by a local government, an ar
eawide agency, a regional agency, or an interstate agency; and
 `(B) established an effective mechanism for continuing consultat
ion and coordination between the management agency designated pursuant to paragr
aph (6) and with local governments, interstate agencies, regional agencies, and 
areawide agencies within the coastal zone to assure the full participation of th
ose local governments and agencies in carrying out the purposes of this title; e
xcept that the Secretary shall not find any mechanism to be effective for purpos
es of this subparagraph unless it requires that--
 `(i) the management agency, before implementing any manageme
nt program decision which would conflict with any local zoning ordinance, decisi
on, or other action, shall send a notice of the management program decision to a
ny local government whose zoning authority is affected;
 `(ii) within the 30-day period commencing on the date of rec
eipt of that notice, the local government may submit to the management agency wr
itten comments on the management program decision, and any recommendation for al
ternatives; and
 `(iii) the management agency, if any comments are submitted 
to it within the 30-day period by any local government--
 `(I) shall consider the comments;
 `(II) may, in its discretion, hold a public hearing on t
he comments; and
 `(III) may not take any action within the 30-day period 
to implement the management program decision.
 `(4) The State has held public hearings in the development of the ma
nagement program.
 `(5) The management program and any changes thereto have been review
ed and approved by the Governor of the State.
 `(6) The Governor of the State has designated a single State agency 
to receive and administer grants for implementing the management program.
 `(7) The State is organized to implement the management program.
 `(8) The management program provides for adequate consideration of t
he national interest involved in planning for, and managing the coastal zone, in
cluding the siting of facilities such as energy facilities which are of greater 
than local significance. In the case of energy facilities, the Secretary shall f
ind that the State has given consideration to any applicable national or interst
ate energy plan or program.
 `(9) The management program includes procedures whereby specific are
as may be designated for the purpose of preserving or restoring them for their c
onservation, recreational, ecological, historical, or esthetic values.
 `(10) The State, acting through its chosen agency or agencies (inclu
ding local governments, areawide agencies, regional agencies, or interstate agen
cies) has authority for the management of the coastal zone in accordance with th
e management program. Such authority shall include power--
 `(A) to administer land use and water use regulations to control
 development to ensure compliance with the management program, and to resolve co
nflicts among competing uses; and
 `(B) to acquire fee simple and less than fee simple interests in
 land, waters, and other property through condemnation or other means when neces
sary to achieve conformance with the management program.
 `(11) The management program provides for any one or a combination o
f the following general techniques for control of land uses and water uses withi
n the coastal zone:
 `(A) State establishment of criteria and standards for local imp
lementation, subject to administrative review and enforcement.
 `(B) Direct State land and water use planning and regulation.
 `(C) State administrative review for consistency with the manage
ment program of all development plans, projects, or land and water use regulatio
ns, including exceptions and variances thereto, proposed by any State or local a
uthority or private developer, with power to approve or disapprove after public 
notice and an opportunity for hearings.
 `(12) The management program contains a method of assuring that loca
l land use and water use regulations within the coastal zone do not unreasonably
 restrict or exclude land uses and water uses of regional benefit.
 `(13) The management program provides for--
 `(A) the inventory and designation of areas that contain one or 
more coastal resources of national significance; and
 `(B) specific and enforceable standards to protect such resource
s.
 `(14) The management program provides for public participation in pe
rmitting processes, consistency determinations, and other similar decisions.
 `(15) The management program provides a mechanism to ensure that all
 State agencies will adhere to the program.
 `(16) The management program contains enforceable policies and mecha
nisms to implement the applicable requirements of the Coastal Nonpoint Pollution
 Control Program of the State required by section 6217 of the Coastal Zone Act R
eauthorization Amendments of 1990.
`(e) A coastal State may amend or modify a management program which it has su
bmitted and which has been approved by the Secretary under this section, subject
 to the following conditions:
 `(1) The State shall promptly notify the Secretary of any proposed a
mendment, modification, or other program change and submit it for the Secretary'
s approval. The Secretary may suspend all or part of any grant made under this s
ection pending State submission of the proposed amendments, modification, or oth
er program change.
 `(2) Within 30 days after the date the Secretary receives any propos
ed amendment, the Secretary shall notify the State whether the Secretary approve
s or disapproves the amendment, or whether the Secretary finds it is necessary t
o extend the review of the proposed amendment for a period not to exceed 120 day
s after the date the Secretary received the proposed amendment. The Secretary ma
y extend this period only as necessary to meet the requirements of the National 
Environmental Policy Act of 1969 (42 U.S.C. 4321 et seq.). If the Secretary does
 not notify the coastal State that the Secretary approves or disapproves the ame
ndment within that period, then the amendment shall be conclusively presumed as 
approved.
 `(3)(A) Except as provided in subparagraph (B), a coastal State may 
not implement any amendment, modification, or other change as part of its approv
ed management program unless the amendment, modification, or other change is app
roved by the Secretary under this subsection.
 `(B) The Secretary, after determining on a preliminary basis, that a
n amendment, modification, or other change which has been submitted for approval
 under this subsection is likely to meet the program approval standards in this 
section, may permit the State to expend funds awarded under this section to begi
n implementing the proposed amendment, modification, or change. This preliminary
 approval shall not extend for more than 6 months and may not be renewed. A prop
osed amendment, modification, or change which has been given preliminary approva
l and is not finally approved under this paragraph shall not be considered an en
forceable policy for purposes of section 307.'.
(b) ADDITIONAL PROGRAM REQUIREMENTS- Each State which submits a management pr
ogram for approval under section 306 of the Coastal Zone Management Act of 1972,
 as amended by this subtitle (including a State which submitted a program before
 the date of enactment of this Act), shall demonstrate to the Secretary--
 (1) that the program complies with section 306(d)(14) and (15) of th
at Act, by not later than 3 years after the date of the enactment of this Act; a
nd
 (2) that the program complies with section 306(d)(16) of that Act, b
y not later than 30 months after the date of publication of final guidance under
 section 6217(g) of this Act.
SEC. 6207. RESOURCE MANAGEMENT IMPROVEMENT GRANTS.
Section 306A(b)(1) of the Coastal Zone Management Act of 1972 (16 U.S.C. 1455
a(b)(1)) is amended by adding before the period at the end the following: `, or 
for the purpose of restoring and enhancing shellfish production by the purchase 
and distribution of clutch material on publicly owned reef tracts'.
SEC. 6208. COASTAL ZONE MANAGEMENT CONSISTENCY.
(a) FEDERAL AGENCY ACTIVITIES- Section 307(c)(1) of the Coastal Zone Manageme
nt Act of 1972 (16 U.S.C. 1456(c)(1)) is amended to read as follows:
`(c)(1)(A) Each Federal agency activity within or outside the coastal zone th
at affects any land or water use or natural resource of the coastal zone shall b
e carried out in a manner which is consistent to the maximum extent practicable 
with the enforceable policies of approved State management programs. A Federal a
gency activity shall be subject to this paragraph unless it is subject to paragr
aph (2) or (3).
`(B) After any final judgment, decree, or order of any Federal court that is 
appealable under section 1291 or 1292 of title 28, United States Code, or under 
any other applicable provision of Federal law, that a specific Federal agency ac
tivity is not in compliance with subparagraph (A), and certification by the Secr
etary that mediation under subsection (h) is not likely to result in such compli
ance, the President may, upon written request from the Secretary, exempt from co
mpliance those elements of the Federal agency activity that are found by the Fed
eral court to be inconsistent with an approved State program, if the President d
etermines that the activity is in the paramount interest of the United States. N
o such exemption shall be granted on the basis of a lack of appropriations unles
s the President has specifically requested such appropriations as part of the bu
dgetary process, and the Congress has failed to make available the requested app
ropriations.
`(C) Each Federal agency carrying out an activity subject to paragraph (1) sh
all provide a consistency determination to the relevant State agency designated 
under section 306(d)(6) at the earliest practicable time, but in no case later t
han 90 days before final approval of the Federal activity unless both the Federa
l agency and the State agency agree to a different schedule.'.
(b) Technical and Conforming Changes-
 (1) Section 307(c)(2) of the Coastal Zone Management Act of 1972 (16
 U.S.C. 1456(c)(2)) is amended by inserting `the enforceable policies of' before
 `approved State management programs'.
 (2) Section 307(c)(3)(A) of the Coastal Zone Management Act of 1972 
(16 U.S.C. 1456(c)(3)(A)) is amended in the first sentence--
 (A) by inserting `, in or outside of the coastal zone,' after `t
o conduct an activity';
 (B) by striking `land or water uses in' and inserting `any land 
or water use or natural resource of'; and
 (C) by inserting `the enforceable policies of' after the words `
the proposed activity complies with'.
 (3) Section 307(c)(3)(B) of the Coastal Zone Management Act of 1972 
(16 U.S.C. 1456(c)(3)(B)) is amended in the first sentence--
 (A) by striking `land use or water use in' and inserting `land o
r water use or natural resource of'; and
 (B) by inserting `the enforceable policies of' after `such plan 
complies'.
 (4) Section 307(d) of the Coastal Zone Management Act of 1972 (16 U.
S.C. 1456(d)) is amended--
 (A) by striking `affecting' and inserting `, in or outside of th
e coastal zone, affecting any land or water use of natural resource of'; and
 (B) by inserting `the enforceable policies of' after `that are i
nconsistent with'.
(c) FEDERAL FEE- Section 307 of the Coastal Zone Management Act of 1972 (16 U
.S.C. 1456) is amended by adding at the end the following:
`(i) With respect to appeals under subsections (c)(3) and (d) which are submi
tted after the date of the enactment of the Coastal Zone Act Reauthorization Ame
ndments of 1990, the Secretary shall collect an application fee of not less than
 $200 for minor appeals and not less than $500 for major appeals, unless the Sec
retary, upon consideration of an applicant's request for a fee waiver, determine
s that the applicant is unable to pay the fee. The Secretary shall collect such 
other fees as are necessary to recover the full costs of administering and proce
ssing such appeals under subsection (c).'.
SEC. 6209. COASTAL ZONE MANAGEMENT FUND.
Section 308 of the Coastal Zone Management Act of 1972 (16 U.S.C. 1456) is am
ended to read as follows:
`COASTAL ZONE MANAGEMENT FUND
`SEC. 308. (a)(1) The obligations of any coastal State or unit of general pur
pose local government to repay loans made pursuant to this section as in effect 
before the date of the enactment of the Coastal Zone Act Reauthorization Amendme
nts of 1990, and any repayment schedule established pursuant to this Act as in e
ffect before that date of enactment, are not altered by any provision of this ti
tle. Such loans shall be repaid under authority of this subsection and the Secre
tary may issue regulations governing such repayment. If the Secretary finds that
 any coastal State or unit of local government is unable to meet its obligations
 pursuant to this subsection because the actual increases in employment and rela
ted population resulting from coastal energy activity and the facilities associa
ted with such activity do not provide adequate revenues to enable such State or 
unit to meet such obligations in accordance with the appropriate repayment sched
ule, the Secretary shall, after review of the information submitted by such Stat
e or unit, take any of the following actions:
 `(A) Modify the terms and conditions of such loan.
 `(B) Refinance the loan.
 `(C) Recommend to the Congress that legislation be enacted to forgiv
e the loan.
`(2) Loan repayments made pursuant to this subsection shall be retained by th
e Secretary as offsetting collections, and shall be deposited into the Coastal Z
one Management Fund established under subsection (b).
`(b)(1) The Secretary shall establish and maintain a fund, to be known as the
 `Coastal Zone Management Fund' (hereinafter in this section referred to as the 
`Fund'), which shall consist of amounts retained and deposited into the Fund und
er subsection (a).
`(2) Subject to amounts provided in appropriation Acts, amounts in the Fund s
hall be available to the Secretary for use for the following:
 `(A) Expenses incident to the administration of this title, in an am
ount not to exceed--
 `(i) $5,000,000 for fiscal year 1991;
 `(ii) $5,225,000 for fiscal year 1992;
 `(iii) $5,460,125 for fiscal year 1993;
 `(iv) $5,705,830 for fiscal year 1994; and
 `(v) $5,962,593 for fiscal year 1995.
 `(B) After use under subparagraph (A)--
 `(i) projects to address management issues which are regional in
 scope, including interstate projects;
 `(ii) demonstration projects which have high potential for impro
ving coastal zone management, especially at the local level;
 `(iii) emergency grants to State coastal zone management agencie
s to address unforeseen or disaster-related circumstances;
 `(iv) appropriate awards recognizing excellence in coastal zone 
management as provided in section 314;
 `(v) program development grants as authorized by section 305; an
d
 `(vi) to provide financial support to coastal States for use for
 investigating and applying the public trust doctrine to implement State managem
ent programs approved under section 306.
`(3) On December 1 of each year, the Secretary shall transmit to the Congress
 an annual report on the Fund, including the balance of the Fund and an itemizat
ion of all deposits into and disbursements from the Fund in the preceding fiscal
 year.'.
SEC. 6210. COASTAL ZONE ENHANCEMENT GRANTS.
Section 309 of the Coastal Zone Management Act of 1972 (16 U.S.C. 1452b) is a
mended to read as follows:
`COASTAL ZONE ENHANCEMENT GRANTS
`SEC. 309. (a) For purposes of this section, the term `coastal zone enhanceme
nt objective' means any of the following objectives:
 `(1) Protection, restoration, or enhancement of the existing coastal
 wetlands base, or creation of new coastal wetlands.
 `(2) Preventing or significantly reducing threats to life and destru
ction of property by eliminating development and redevelopment in high-hazard ar
eas, managing development in other hazard areas, and anticipating and managing t
he effects of potential sea level rise and Great Lakes level rise.
 `(3) Attaining increased opportunities for public access, taking int
o account current and future public access needs, to coastal areas of recreation
al, historical, aesthetic, ecological, or cultural value.
 `(4) Reducing marine debris entering the Nation's coastal and ocean 
environment by managing uses and activities that contribute to the entry of such
 debris.
 `(5) Development and adoption of procedures to assess, consider, and
 control cumulative and secondary impacts of coastal growth and development, inc
luding the collective effect on various individual uses or activities on coastal
 resources, such as coastal wetlands and fishery resources.
 `(6) Preparing and implementing special area management plans for im
portant coastal areas.
 `(7) Planning for the use of ocean resources.
 `(8) Adoption of procedures and enforceable policies to help facilit
ate the siting of energy facilities and Government facilities and energy-related
 activities and Government activities which may be of greater than local signifi
cance.
`(b) Subject to the limitations and goals established in this section, the Se
cretary may make grants to coastal States to provide funding for development and
 submission for Federal approval of program changes that support attainment of o
ne or more coastal zone enhancement objectives.
`(c) The Secretary shall evaluate and rank State proposals for funding under 
this section, and make funding awards based on those proposals, taking into acco
unt the criteria established by the Secretary under subsection (d). The Secretar
y shall ensure that funding decisions under this section take into consideration
 the fiscal and technical needs of proposing States and the overall merit of eac
h proposal in terms of benefits to the public.
`(d) Within 12 months following the date of enactment of this section, and co
nsistent with the notice and participation requirements established in section 3
17, the Secretary shall promulgate regulations concerning coastal zone enhanceme
nt grants that establish--
 `(1) specific and detailed criteria that must be addressed by a coas
tal state (including the State's priority needs for improvement as identified by
 the Secretary after careful consultation with the State) as part of the State's
 development and implementation of coastal zone enhancement objectives;
 `(2) administrative or procedural rules or requirements as necessary
 to facilitate the development and implementation of such objectives by coastal 
states; and
 `(3) other funding award criteria as are necessary or appropriate to
 ensure that evaluations of proposals, and decisions to award funding, under thi
s section are based on objective standards applied fairly and equitably to those
 proposals.
`(e) A State shall not be required to contribute any portion of the cost of a
ny proposal for which funding is awarded under this section.
`(f) Beginning in fiscal year 1991, not less than 10 percent and not more tha
n 20 percent of the amounts appropriated to implement sections 306 and 306A of t
his title shall be retained by the Secretary for use in implementing this sectio
n, up to a maximum of $10,000,000 annually.
`(g) If the Secretary finds that the State is not undertaking the actions com
mitted to under the terms of the grant, the Secretary shall suspend the State's 
eligibility for further funding under this section for at least one year.'.
SEC. 6211. TECHNICAL ASSISTANCE.
The Coastal Zone Management Act of 1972 (16 U.S.C. 1451 et seq.) is amended b
y inserting immediately after section 309 the following new section:
`technical assistance
`SEC. 310. (a) The Secretary shall conduct a program of technical assistance 
and management-oriented research necessary to support the development and implem
entation of State coastal management program amendments under section 309, and a
ppropriate to the furtherance of international cooperative efforts and technical
 assistance in coastal zone management. Each department, agency, and instrumenta
lity of the executive branch of the Federal Government may assist the Secretary,
 on a reimbursable basis or otherwise, in carrying out the purposes of this sect
ion, including the furnishing of information to the extent permitted by law, the
 transfer of personnel with their consent and without prejudice to their positio
n and rating, and the performance of any research, study, and technical assistan
ce which does not interfere with the performance of the primary duties of such d
epartment, agency, or instrumentality. The Secretary may enter into contracts or
 other arrangements with any qualified person for the purposes of carrying out t
his subsection.
`(b)(1) The Secretary shall provide for the coordination of technical assista
nce, studies, and research activities under this section with any other such act
ivities that are conducted by or subject to the authority of the Secretary.
`(2) The Secretary shall make the results of research and studies conducted p
ursuant to this section available to coastal States in the form of technical ass
istance publications, workshops, or other means appropriate.
`(3) The Secretary shall consult with coastal States on a regular basis regar
ding the development and implementation of the program established by this secti
on.'.
SEC. 6212. COASTAL ZONE MANAGEMENT REVIEW.
(a) PUBLIC PARTICIPATION- Subsection (b) of section 312 of the Coastal Zone M
anagement Act of 1972 (16 U.S.C. 1458) is amended to read as follows:
`(b) In evaluating a coastal State's performance, the Secretary shall conduct
 the evaluation in an open and public manner, and provide full opportunity for p
ublic participation, including holding public meetings in the State being evalua
ted and providing opportunities for the submission of written and oral comments 
by the public. The Secretary shall provide the public with at least 45 days' not
ice of such public meetings by placing a notice in the Federal Register, by publ
ication of timely notices in newspapers of general circulation within the State 
being evaluated, and by communications with persons and organizations known to b
e interested in the evaluation. Each evaluation shall be prepared in report form
 and shall include written responses to the written comments received during the
 evaluation process. The final report of the evaluation shall be completed withi
n 120 days after the last public meeting held in the State being evaluated. Copi
es of the evaluation shall be immediately provided to all persons and organizati
ons participating in the evaluation process.'.
(b) INTERIM SANCTIONS- Subsection (c) of section 312 of the Coastal Zone Mana
gement Act of 1972 (16 U.S.C. 1458(c)) is amended to read as follows:
`(c)(1) The Secretary may suspend payment of any portion of financial assista
nce extended to any coastal State under this title, and may withdraw any unexpen
ded portion of such assistance, if the Secretary determines that the coastal sta
te is failing to adhere to (A) the management program or a State plan developed 
to manage a national estuarine reserve established under section 315 of this tit
le, or a portion of the program or plan approved by the Secretary, or (B) the te
rms of any grant or cooperative agreement funded under this title.
`(2) Financial assistance may not be suspended under paragraph (1) unless the
 Secretary provides the Governor of the coastal state with--
 `(A) written specifications and a schedule for the actions that shou
ld be taken by the State in order that such suspension of financial assistance m
ay be withdrawn; and
 `(B) written specifications stating how those funds from the suspend
ed financial assistance shall be expended by the coastal state to take the actio
ns referred to in subparagraph (A).
`(3) The suspension of financial assistance may not last for less than 6 mont
hs or more than 36 months after the date of suspension.'.
(c) FINAL SANCTIONS- Section 312(d) of the Coastal Zone Management Act of 197
2 (16 U.S.C. 1458(d)) is amended to read as follows:
`(d) The Secretary shall withdraw approval of the management program of any c
oastal State and shall withdraw financial assistance available to that State und
er this title as well as any unexpended portion of such assistance, if the Secre
tary determines that the coastal State has failed to take the actions referred t
o in subsection (c)(2)(A).'.
(d) REPEAL- Subsection (f) of section 312 of the Coastal Zone Management Act 
of 1972 (16 U.S.C. 1458) is repealed.
SEC. 6213. COASTAL ZONE MANAGEMENT AWARDS.
The Coastal Zone Management Act of 1972 is amended by inserting after section
 313 the following:
`WALTER B. JONES EXCELLENCE IN COASTAL ZONE MANAGEMENT AWARDS
`SEC. 313. (a) The Secretary shall, using sums in the Coastal Zone Management
 Fund established under section 308, implement a program to promote excellence i
n coastal zone management by identifying and acknowledging outstanding accomplis
hments in the field.
`(b) The Secretary shall elect annually--
 `(1) one individual, other than an employee or officer of the Federa
l Government, whose contribution to the field of coastal zone management has bee
n the most significant;
 `(2) 5 local governments which have made the most progress in develo
ping and implementing the coastal zone management principles embodied in this ti
tle; and
 `(3) up to 10 graduate students whose academic study promises to con
tribute materially to development of new or improved approaches to coastal zone 
management.
`(c) In making selections under subsection (b)(2) the Secretary shall solicit
 nominations from the coastal states, and shall consult with experts in local go
vernment planning and land use.
`(d) In making selections under subsection (b)(3) the Secretary shall solicit
 nominations from coastal states and the National Sea Grant College Program.
`(e) Using sums in the Coastal Zone Management Fund established under section
 308, the Secretary shall establish and execute appropriate awards, to be known 
as the `Walter B. Jones Awards', including--
 `(1) cash awards in an amount not to exceed $5,000 each;
 `(2) research grants; and
 `(3) public ceremonies to acknowledge such awards.'.
SEC. 6214. NATIONAL ESTUARINE RESEARCH RESERVE SYSTEM.
(a) AMENDMENT TO SECTION HEADING- The heading for section 315 of the Coastal 
Zone Management Act of 1972 (16 U.S.C. 1461) is amended by striking `RESERVE RES
EARCH' and inserting in lieu thereof `RESEARCH RESERVE'.
(b) GRANTS FOR ACQUISTION OF LANDS AND WATERS- Section 315(e)(3)(A) of the Co
astal Zone Management Act of 1972 (16 U.S.C. 1461(e)(3)(A)) is amended by striki
ng `per centum' and inserting in lieu thereof `percent', and by striking `$4,000
,000' and inserting in lieu thereof `$5,000,000'.
(c) GRANTS FOR OPERATIONS AND EDUCATION- Section 315(e)(3)(B) of the Coastal 
Zone Management Act of 1972 (16 U.S.C. 1461(e)(3)(B)) is amended--
 (1) by striking `50 per centum' and inserting in lieu thereof `70 pe
rcent'; and
 (2) by inserting immediately before the period at the end the follow
ing: `; except that the amount of the financial assistance provided under paragr
aph (1)(A)(iii) may be up to 100 percent of any costs for activities that benefi
t the entire System'.
(d) CLERICAL AMENDMENT- Section 315(e)(3) of the Coastal Zone Management Act 
of 1972 (16 U.S.C. 1461(e)) is amended by striking `of subsection (e)' each plac
e it appears.
SEC. 6215. AUTHORIZATION OF APPROPRIATIONS.
Section 318(a) of the Coastal Zone Management Act of 1972 (16 U.S.C 1464) is 
amended by striking all after `Secretary--' and inserting in lieu thereof the fo
llowing:
 `(1) such sums, not to exceed $750,000 for each of the fiscal years 
occurring during the period beginning October 1, 1990, and ending September 30, 
1993, as may be necessary for grants under section 305, to remain available unti
l expended;
 `(2) such sums, not to exceed $42,000,000 for the fiscal year ending
 September 30, 1991, $48,890,000 for the fiscal year ending September 30, 1992, 
$58,870,000 for the fiscal year ending September 30, 1993, $67,930,000 for the f
iscal year ending September 30, 1994, and $90,090,000 for the fiscal year ending
 September 30, 1995, as may be necessary for grants under sections 306, 306A, an
d 309, to remain available until expended;
 `(3) such sums, not to exceed $6,000,000 for the fiscal year ending 
September 30, 1991, $6,270,000 for the fiscal year ending September 30, 1992, $6
,552,000 for the fiscal year ending September 30, 1993, $6,847,000 for the fisca
l year ending September 30, 1994, and $7,155,000 for the fiscal year ending Sept
ember 30, 1995, as may be necessary for grants under section 315, to remain avai
lable until expended; and
 `(4) such sums, not to exceed $10,000,000 for each of the fiscal yea
rs occurring during the period beginning October 1, 1990, and ending September 3
0, 1995, as may be necessary for activities under section 310 and for administra
tive expenses incident to the administration of this title; except that expendit
ures for such administrative expenses shall not exceed $5,000,000 in any such fi
scal year.'.
SEC. 6216. CONFORMING AMENDMENTS.
(a) Section 306a(b)(1) of the Coastal Zone Management Act of 1972 (16 U.S.C. 
1455a(b)(1)) is amended by striking `306(c)(9)' and inserting in lieu thereof `3
06(d)(9)'.
(b) Section 312(a) of the Coastal Zone Management Act of 1972 (16 U.S.C. 1458
(a)) is amended by striking `through (I)' and inserting in lieu thereof `through
 (K)'.
SEC. 6217. PROTECTING COASTAL WATERS.
(a) IN GENERAL-
 (1) PROGRAM DEVELOPMENT- Not later than 30 months after the date of 
the publication of final guidance under subsection (g), each State for which a m
anagement program has been approved pursuant to section 306 of the Coastal Zone 
Management Act of 1972 shall prepare and submit to the Secretary and the Adminis
trator a Coastal Nonpoint Pollution Control Program for approval pursuant to thi
s section. The purpose of the program shall be to develop and implement manageme
nt measures for nonpoint source pollution to restore and protect coastal waters,
 working in close conjunction with other State and local authorities.
 (2) PROGRAM COORDINATION- A State program under this section shall b
e coordinated closely with State and local water quality plans and programs deve
l-oped pursuant to sections 208, 303, 319, and 320 of the Federal Water Pollutio
n Control Act (33 U.S.C. 1288, 1313, 1329, and 1330) and with State plans develo
ped pursuant to the Coastal Zone Management Act of 1972, as amended by this Act.
 The program shall serve as an update and expansion of the State nonpoint source
 management program developed under section 319 of the Federal Water Pollution C
ontrol Act, as the program under that section relates to land and water uses aff
ecting coastal waters.
(b) PROGRAM CONTENTS- Each State program under this section shall provide for
 the implementation, at a minimum, of management measures in conformity with the
 guidance published under subsection (g), to protect coastal waters generally, a
nd shall also contain the following:
 (1) IDENTIFYING LAND USES- The identification of, and a continuing p
rocess for identifying, land uses which, individually or cumulatively, may cause
 or contribute significantly to a degradation of--
 (A) those coastal waters where there is a failure to attain or m
aintain applicable water quality standards or protect designated uses, as determ
ined by the State pursuant to its water quality planning processes; or

 (B) those coastal waters that are threatened by reasonably fores
eeable increases in pollution loadings from new or expanding sources.<
/ul>
 (2) IDENTIFYING CRITICAL COASTAL AREAS- The identification of, and a
 continuing process for identifying, critical coastal areas adjacent to coastal 
waters referred to in paragraph (1)(A) and (B), within which any new land uses o
r substantial expansion of existing land uses shall be subject to management mea
sures in addition to those provided for in subsection (g).
 (3) MANAGEMENT MEASURES- The implementation and continuing revision 
from time to time of additional management measures applicable to the land uses 
and areas identified pursuant to paragraphs (1) and (2) that are necessary to ac
hieve and maintain applicable water quality standards under section 303 of the F
ederal Water Pollution Control Act (33 U.S.C. 1313) and protect designated uses.

 (4) TECHNICAL ASSISTANCE- The provision of technical and other assis
tance to local governments and the public for implementing the measures referred
 to in paragraph (3), which may include assistance in developing ordinances and 
regulations, technical guidance, and modeling to predict and assess the effectiv
eness of such measures, training, financial incentives, demonstration projects, 
and other innovations to protect coastal water quality and designated uses.

 (5) PUBLIC PARTICIPATION- Opportunities for public participation in 
all aspects of the program, including the use of public notices and opportunitie
s for comment, nomination procedures, public hearings, technical and financial a
ssistance, public education, and other means.
 (6) ADMINISTRATIVE COORDINATION- The establishment of mechanisms to 
improve coordination among State agencies and between State and local officials 
responsible for land use programs and permitting, water quality permitting and e
nforcement, habitat protection, and public health and safety, through the use of
 joint project review, memoranda of agreement, or other mechanisms.
 (7) STATE COASTAL ZONE BOUNDARY MODIFICATION- A proposal to modify t
he boundaries of the State coastal zone as the coastal management agency of the 
State determines is necessary to implement the recommendations made pursuant to 
subsection (e). If the coastal management agency does not have the authority to 
modify such boundaries, the program shall include recommendations for such modif
ications to the appropriate State authority.
(c) PROGRAM SUBMISSION, APPROVAL, AND IMPLEMETATION-
 (1) REVIEW AND APPROVAL- Within 6 months after the date of submissio
n by a State of a program pursuant to this section, the Secretary and the Admini
strator shall jointly review the program. The program shall be approved if--
 (A) the Secretary determines that the portions of the program un
der the authority of the Secretary meet the requirements of this section and the
 Administrator concurs with that determination; and
 (B) the Administrator determines that the portions of the progra
m under the authority of the Administrator meet the requirements of this section
 and the Secretary concurs with that determination.
 (2) IMPLEMENTATION OF APPROVED PROGRAM- If the program of a State is
 approved in accordance with paragraph (1), the State shall implement the progra
m, including the management measures included in the program pursuant to subsect
ion (b), through--
 (A) changes to the State plan for control of nonpoint source pol
lution approved under section 319 of the Federal Water Pollution Control Act; an
d
 (B) changes to the State coastal zone management program develop
ed under section 306 of the Coastal Zone Management Act of 1972, as amended by t
his Act.
 (3) WITHHOLDING COASTAL MANAGEMENT ASSISTANCE- If the Secretary find
s that a coastal State has failed to submit an approvable program as required by
 this section, the Secretary shall withhold for each fiscal year until such a pr
ogram is submitted a portion of grants otherwise available to the State for the 
fiscal year under section 306 of the Coastal Zone Management Act of 1972, as fol
lows:
 (A) 10 percent for fiscal year 1996.
 (B) 15 percent for fiscal year 1997.
 (C) 20 percent for fiscal year 1998.
 (D) 30 percent for fiscal year 1999 and each fiscal year thereaf
ter.
The Secretary shall make amounts withheld under this paragraph availa
ble to coastal States having programs approved under this section.
 (4) WITHHOLDING WATER POLLUTION CONTROL ASSISTANCE- If the Administr
ator finds that a coastal State has failed to submit an approvable program as re
quired by this section, the Administrator shall withhold from grants available t
o the State under section 319 of the Federal Water Pollution Control Act, for ea
ch fiscal year until such a program is submitted, an amount equal to a percentag
e of the grants awarded to the State for the preceding fiscal year under that se
ction, as follows:
 (A) For fiscal year 1996, 10 percent of the amount awarded for f
iscal year 1995.
 (B) For fiscal year 1997, 15 percent of the amount awarded for f
iscal year 1996.
 (C) For fiscal year 1998, 20 percent of the amount awarded for f
iscal year 1997.
 (D) For fiscal year 1999 and each fiscal year thereafter, 30 per
cent of the amount awarded for fiscal year 1998 or other preceding fiscal year.<
/ul>
The Administrator shall make amounts withheld under this paragraph av
ailable to States having programs approved pursuant to this subsection.
(d) TECHNICAL ASSISTANCE- The Secretary and the Administrator shall provide t
echnical assistance to coastal States and local governments in developing and im
plementing programs under this section. Such assistance shall include--
 (1) methods for assessing water quality impacts associated with coas
tal land uses;
 (2) methods for assessing the cumulative water quality effects of co
astal development;
 (3) maintaining and from time to time revising an inventory of model
 ordinances, and providing other assistance to coastal States and local governme
nts in identifying, developing, and implementing pollution control measures; and

 (4) methods to predict and assess the effects of coastal land use ma
nagement measures on coastal water quality and designated uses.
(e) INLAND COASTAL ZONE BOUNDARIES-
 (1) REVIEW- The Secretary, in consultation with the Administrator of
 the Environmental Protection Agency, shall, within 18 months after the effectiv
e date of this title, review the inland coastal zone boundary of each coastal St
ate program which has been approved or is proposed for approval under section 30
6 of the Coastal Zone Management Act of 1972, and evaluate whether the State's c
oastal zone boundary extends inland to the extent necessary to control the land 
and water uses that have a significant impact on coastal waters of the State.
 (2) RECOMMENDATION- If the Secretary, in consultation with the Admin
istrator, finds that modifications to the inland boundaries of a State's coastal
 zone are necessary for that State to more effectively manage land and water use
s to protect coastal waters, the Secretary, in consultation with the Administrat
or, shall recommend appropriate modifications in writing to the affected State.<
/ul>
(f) FINANCIAL ASSISTANCE-
 (1) IN GENERAL- Upon request of a State having a program approved un
der section 306 of the Coastal Zone Management Act of 1972, the Secretary, in co
nsultation with the Administrator, may provide grants to the State for use for d
eveloping a State program under this section.
 (2) AMOUNT- The total amount of grants to a State under this subsect
ion shall not exceed 50 percent of the total cost to the State of developing a p
rogram under this section.
 (3) STATE SHARE- The State share of the cost of an activity carried 
out with a grant under this subsection shall be paid from amounts from non-Feder
al sources.
 (4) ALLOCATION- Amounts available for grants under this subsection s
hall be allocated among States in accordance with regulations issued pursuant to
 section 306(c) of the Coastal Zone Management Act of 1972, except that the Secr
etary may use not more than 25 percent of amounts available for such grants to a
ssist States which the Secretary, in consultation with the Administrator, determ
ines are making exemplary progress in preparing a State program under this secti
on or have extreme needs with respect to coastal water quality.
(g) GUIDANCE FOR COASTAL NONPOINT SOURCE POLLUTION CONTROL-
 (1) IN GENERAL- The Administrator, in consultation with the Secretar
y and the Director of the United States Fish and Wildlife Service and other Fede
ral agencies, shall publish (and periodically revise thereafter) guidance for sp
ecifying management measures for sources of nonpoint pollution in coastal waters
.
 (2) CONTENT- Guidance under this subsection shall include, at a mini
mum--
 (A) a description of a range of methods, measures, or practices,
 including structural and nonstructural controls and operation and maintenance p
rocedures, that constitute each measure;
 (B) a description of the categories and subcategories of activit
ies and locations for which each measure may be suitable;
 (C) an identification of the individual pollutants or categories
 or classes of pollutants that may be controlled by the measures and the water q
uality effects of the measures;
 (D) quantitative estimates of the pollution reduction effects an
d costs of the measures;
 (E) a description of the factors which should be taken into acco
unt in adapting the measures to specific sites or locations; and
 (F) any necessary monitoring techniques to accompany the measure
s to assess over time the success of the measures in reducing pollution loads an
d improving water quality.
 (3) PUBLICATION- The Administrator, in consultation with the Secreta
ry, shall publish--
 (A) proposed guidance pursuant to this subsection not later than
 6 months after the date of the enactment of this Act; and
 (B) final guidance pursuant to this subsection not later than 18
 months after such effective date.
 (4) NOTICE AND COMMENT- The Administrator shall provide to coastal S
tates and other interested persons an opportunity to provide written comments on
 proposed guidance under this subsection.
 (5) MANAGEMENT MEASURES- For purposes of this subsection, the term `
management measures' means economically achievable measures for the control of t
he addition of pollutants from existing and new categories and classes of nonpoi
nt sources of pollution, which reflect the greatest degree of pollutant reductio
n achievable through the application of the best available nonpoint pollution co
ntrol practices, technologies, processes, siting criteria, operating methods, or
 other alternatives.
(h) AUTHORIZATIONS OF APPROPRIATIONS-
 (1) ADMINISTRATOR- There is authorized to be appropriated to the Adm
inistrator for use for carrying out this section not more than $1,000,000 for ea
ch of fiscal years 1992, 1993, and 1994.
 (2) SECRETARY- (A) Of amounts appropriated to the Secretary for a fi
scal year under section 318(a)(4) of the Coastal Zone Management Act of 1972, as
 amended by this Act, not more than $1,000,000 shall be available for use by the
 Secretary for carrying out this section for that fiscal year, other than for pr
oviding in the form of grants under subsection (f).
 (B) There is authorized to be appropriated to the Secretary for use 
for providing in the form of grants under subsection (f) not more than--
 (i) $6,000,000 for fiscal year 1992;
 (ii) $12,000,000 for fiscal year 1993;
 (iii) $12,000,000 for fiscal year 1994; and
 (iv) $12,000,000 for fiscal year 1995.
(i) DEFINITIONS- In this section--
 (1) the term `Administrator' means the Administrator of the Environm
ental Protection Agency;
 (2) the term `coastal State' has the meaning given the term `coastal
 state' under section 304 of the Coastal Zone Management Act of 1972 (16 U.S.C. 
1453);
 (3) each of the terms `coastal waters', and `coastal zone' has the m
eaning that term has in the Coastal Management Act of 1972;
 (4) the term `coastal management agency' means a State agency design
ated pursuant to section 306(d)(6) of the Coastal Zone Management Act of 1972;
 (5) the term `land use' includes a use of waters adjacent to coastal
 waters; and
 (6) the term `Secretary' means the Secretary of Commerce.
Subtitle D--Extension of Superfund for 3 Years
SEC. 6301. 3-YEAR EXTENSION OF COMPREHENSIVE ENVIRONMENTAL RESPONSE, COMPENSA
TION, AND LIABILITY ACT OF 1980.
Section 111 of the Comprehensive Environmental Response, Compensation, and Li
ability Act of 1980 (42 U.S.C. 9611) is amended--
 (1) by inserting after `Reauthorization Act of 1986,' in subsection 
(a) the following: `and not more than $5,100,000,000 for the period commencing O
ctober 1, 1991, and ending September 30, 1994,';
 (2) by striking `5-fiscal-year period' in subsection (c)(11) and ins
erting `8-fiscal year period';
 (3) by striking `and 1991' in subsection (c)(12) and inserting `1991
, 1992, 1993, and 1994';
 (4) by striking `1990 and 1991' in subsection (m) and inserting `199
0, 1991, 1992, 1993, and 1994';
 (5) by striking `and 1991' in subsection (n)(1) and inserting `1991,
 1992, 1993, and 1994';
 (6) by striking subsection (n)(2)(E) and inserting the following new
 subparagraph:
 `(E) For each of the fiscal years 1991, 1992, 1993, and 1994, $35,00
0,000.';
 (7) by striking `and 1991' in subsection (n)(3) and inserting `1991,
 1992, 1993, and 1994'; and
 (8) by inserting after subparagraph (E) of subsection (p)(1) the fol
lowing new subparagraphs:
 `(F) For fiscal year 1992, $212,500,000.
 `(G) For fiscal year 1993, $212,500,000.
 `(H) For fiscal year 1994, $212,500,000.'.
Subtitle E--Shale Oil Contract Modification
SEC. 6401. SHALE OIL CONTRACT MODIFICATION.
Section 7404(a) of the Consolidated Omnibus Budget Reconciliation Act of 1985
 (Public Law 99-272) is amended by adding at the end the following sentence: `Th
e Secretary of the Treasury shall have the authority to negotiate and execute ag
reements modifying an existing contract relating to the production of synthetic 
crude oil from oil shale, entered into under the Defense Production Act Amendmen
ts of 1980 and subsequently transferred to the Secretary of the Treasury for adm
inistration, provided the terms and conditions of any modification(s) are revenu
e neutral or result in a fiscal savings to the United States Government, and in 
no event would increase the financial exposure of the United States Government u
nder the contract: Provided, however, That the Secretary of the Treasur
y shall have no authority to increase the total amount of funds originally autho
rized for the existing contract: And provided further, That the Secreta
ry shall have no authority to negotiate and execute any agreement modifying the 
existing contract if such modification(s) would increase or accelerate the finan
cial support per unit for the synthetic fuel to be produced under the contract.'
.
Subtitle F--Environmental Protection Agency Fees
SEC. 6501. ENVIRONMENTAL PROTECTION AGENCY FEES.
(a) ASSESSMENT AND COLLECTION- The Administrator of the Environmental Protect
ion Agency shall, by regulation, assess and collect fees and charges for service
s and activities carried out pursuant to laws administered by the Environmental 
Protection Agency.
(b) AMOUNT OF FEES AND CHARGES- Fees and charges assessed pursuant to this se
ction shall be in such amounts as may be necessary to ensure that the aggregate 
amount of fees and charges collected pursuant to this section, in excess of the 
amount of fees and charges collected under current law--
 (1) in fiscal year 1991, is not less than $28,000,000; and
 (2) in each of fiscal years 1992, 1993, 1994, and 1995, is not less 
than $38,000,000.
(c) LIMITATION ON FEES AND CHARGES- (1) The maximum aggregate amount of fees 
and charges in excess of the amounts being collected under current law which may
 be assessed and collected pursuant to this section in a fiscal year--
 (A) for services and activities carried out pursuant ot 69
 the Federal Water Pollution Control Act is $10,000,000; and
 69 So in original. Probably should be `to'.
 (B) for services and activities in programs within the jurisdiction 
of the House Committee on Energy and Commerce and administered by the Environmen
tal Protection Agency through the Administrator, shall be limited to such sums c
ollected as of the date of enactment of this Act pursuant to sections 26(b) and 
305(e)(2) of the Toxic Substances Control Act, and such sums specifically author
ized by the Clean Air Act Amendments of 1990.
(2) Any remaining amounts required to be collected under this section shall b
e collected from services and programs administered by the Environmental Protect
ion Agency other than those specified in subparagraphs (A) and (B) of paragraph 
(1).
(d) RULE OF CONSTRUCTION- Nothing in this section increases or diminishes the
 authority of the Administrator to promulgate regulations pursuant to the Indepe
ndent Office Appropriations Act (31 U.S.C. 9701).
(e) USES OF FEES- Fees and charges collected pursuant to this section shall b
e deposited into a special account for environmental services in the Treasury of
 the United States. Subject to appropriation Acts, such funds shall be available
 to the Environmental Protection Agency to carry out the activities for which su
ch fees and charges are collected. Such funds shall remain available until expen
ded.
SEC. 6601. SHORT TITLE.
This subtitle may be cited as the `Pollution Prevention Act of 1990'.
SEC. 6602. FINDINGS AND POLICY.
(a) FINDINGS- The Congress finds that:
 (1) The United States of America annually produces millions of tons 
of pollution and spends tens of billions of dollars per year controlling this po
llution.
 (2) There are significant opportunities for industry to reduce or pr
event pollution at the source through cost-effective changes in production, oper
ation, and raw materials use. Such changes offer industry substantial savings in
 reduced raw material, pollution control, and liability costs as well as help pr
otect the environment and reduce risks to worker health and safety.
 (3) The opportunities for source reduction are often not realized be
cause existing regulations, and the industrial resources they require for compli
ance, focus upon treatment and disposal, rather than source reduction; existing 
regulations do not emphasize multi-media management of pollution; and businesses
 need information and technical assistance to overcome institutional barriers to
 the adoption of source reduction practices.
 (4) Source reduction is fundamentally different and more desirable t
han waste management and pollution control. The Environmental Protection Agency 
needs to address the historical lack of attention to source reduction.
 (5) As a first step in preventing pollution through source reduction
, the Environmental Protection Agency must establish a source reduction program 
which collects and disseminates information, provides financial assistance to St
ates, and implements the other activities provided for in this subtitle.
(b) POLICY- The Congress hereby declares it to be the national policy of the 
United States that pollution should be prevented or reduced at the source whenev
er feasible; pollution that cannot be prevented should be recycled in an environ
mentally safe manner, whenever feasible; pollution that cannot be prevented or r
ecycled should be treated in an environmentally safe manner whenever feasible; a
nd disposal or other release into the environment should be employed only as a l
ast resort and should be conducted in an environmentally safe manner.
SEC. 6603. DEFINITIONS.
For purposes of this subtitle--
 (1) The term `Administrator' means the Administrator of the Environm
ental Protection Agency.
 (2) The term `Agency' means the Environmental Protection Agency.
 (3) The term `toxic chemical' means any substance on the list descri
bed in section 313(c) of the Superfund Amendments and Reauthorization Act of 198
6.
 (4) The term `release' has the same meaning as provided by section 3
29(8) of the Superfund Amendments and Reauthorization Act of 1986.
 (5)(A) The term `source reduction' means any practice which--
 (i) reduces the amount of any hazardous substance, pollutant, or
 contaminant entering any waste stream or otherwise released into the environmen
t (including fugitive emissions) prior to recycling, treatment, or disposal; and

 (ii) reduces the hazards to public health and the environment as
sociated with the release of such substances, pollutants, or contaminants.<
/ul>
The term includes equipment or technology modifications, process or p
rocedure modifications, reformulation or redesign of products, substitution of r
aw materials, and improvements in housekeeping, maintenance, training, or invent
ory control.
 (B) The term `source reduction' does not include any practice which 
alters the physical, chemical, or biological characteristics or the volume of a 
hazardous substance, pollutant, or contaminant through a process or activity whi
ch itself is not integral to and necessary for the production of a product or th
e providing of a service.
 (6) The term `multi-media' means water, air, and land.
 (7) The term `SIC codes' refers to the 2-digit code numbers used for
 classification of economic activity in the Standard Industrial Classification M
anual.
SEC. 6604. EPA ACTIVITIES.
 (a) AUTHORITIES- The Administrator shall establish in the Agency an offi
ce to carry out the functions of the Administrator under this subtitle. The offi
ce shall be independent of the Agency's single-medium program offices but shall 
have the authority to review and advise such offices on their activities to prom
ote a multi-media approach to source reduction. The office shall be under the di
rection of such officer of the Agency as the Administrator shall designate.
 (b) FUNCTIONS- The Administrator shall develop and implement a strategy 
to promote source reduction. As part of the strategy, the Administrator shall--<
/ul>
 (1) establish standard methods of measurement of source reduction;
 (2) ensure that the Agency considers the effect of its existing and 
proposed programs on source reduction efforts and shall review regulations of th
e Agency prior and subsequent to their proposal to determine their effect on sou
rce reduction;
 (3) coordinate source reduction activities in each Agency Office and
 coordinate with appropriate offices to promote source reduction practices in ot
her Federal agencies, and generic research and development on techniques and pro
cesses which have broad applicability;
 (4) develop improved methods of coordinating, streamlining and assur
ing public access to data collected under Federal environmental statutes;
 (5) facilitate the adoption of source reduction techniques by busine
sses. This strategy shall include the use of the Source Reduction Clearinghouse 
and State matching grants provided in this subtitle to foster the exchange of in
formation regarding source reduction techniques, the dissemination of such infor
mation to businesses, and the provision of technical assistance to businesses. T
he strategy shall also consider the capabilities of various businesses to make u
se of source reduction techniques;
 (6) identify, where appropriate, measurable goals which reflect the 
policy of this subtitle, the tasks necessary to achieve the goals, dates at whic
h the principal tasks are to be accomplished, required resources, organizational
 responsibilities, and the means by which progress in meeting the goals will be 
measured;
 (8) establish an advisory panel of technical experts comprised of re
presentatives from industry, the States, and public interest groups, to advise t
he Administrator on ways to improve collection and dissemination of data;
 (9) establish a training program on source reduction opportunities, 
including workshops and guidance documents, for State and Federal permit issuanc
e, enforcement, and inspection officials working within all agency program offic
es.
 (10) identify and make recommendations to Congress to eliminate barr
iers to source reduction including the use of incentives and disincentives;

 (11) identify opportunities to use Federal procurement to encourage 
source reduction;
 (12) develop, test and disseminate model source reduction auditing p
rocedures designed to highlight source reduction opportunities; and
 (13) establish an annual award program to recognize a company or com
panies which operate outstanding or innovative source reduction programs.
SEC. 6605. GRANTS TO STATES FOR STATE TECHNICAL ASSISTANCE PROGRAMS.
 (a) GENERAL AUTHORITY- The Administrator shall make matching grants to S
tates for programs to promote the use of source reduction techniques by business
es.
 (b) CRITERIA- When evaluating the requests for grants under this section
, the Administrator shall consider, among other things, whether the proposed Sta
te program would accomplish the following:
 (1) Make specific technical assistance available to businesses seeki
ng information about source reduction opportunities, including funding for exper
ts to provide onsite technical advice to business seeking assistance and to assi
st in the development of source reduction plans.
 (2) Target assistance to businesses for whom lack of information is 
an impediment to source reduction.
 (3) Provide training in source reduction techniques. Such training m
ay be provided through local engineering schools or any other appropriate means.

 (c) MATCHING FUNDS- Federal funds used in any State program under this s
ection shall provide no more than 50 per centum of the funds made available to a
 State in each year of that State's participation in the program.
 (d) EFFECTIVENESS- The Administrator shall establish appropriate means f
or measuring the effectiveness of the State grants made under this section in pr
omoting the use of source reduction techniques by businesses.
 (e) INFORMATION- States receiving grants under this section shall make i
nformation generated under the grants available to the Administrator.
SEC. 6606. SOURCE REDUCTION CLEARINGHOUSE.
 (a) AUTHORITY- The Administrator shall establish a Source Reduction Clea
ringhouse to compile information including a computer data base which contains i
nformation on management, technical, and operational approaches to source reduct
ion. The Administrator shall use the clearinghouse to--
 (1) serve as a center for source reduction technology transfer;

 (2) mount active outreach and education programs by the States to fu
rther the adoption of source reduction technologies; and
 (3) collect and compile information reported by States receiving gra
nts under section 6605 on the operation and success of State source reduction pr
ograms.
 (b) PUBLIC AVAILABILITY- The Administrator shall make available to the p
ublic such information on source reduction as is gathered pursuant to this subti
tle and such other pertinent information and analysis regarding source reduction
 as may be available to the Administrator. The data base shall permit entry and 
retrieval of information to any person.
SEC. 6607. SOURCE REDUCTION AND RECYCLING DATA COLLECTION.
 (a) REPORTING REQUIREMENTS- Each owner or operator of a facility require
d to file an annual toxic chemical release form under section 313 of the Superfu
nd Amendments and Reauthorization Act of 1986 (`SARA') for any toxic chemical sh
all include with each such annual filing a toxic chemical source reduction and r
ecycling report for the preceeding 70
 calendar year. The toxic chemical source reduction and recycling report shal
l cover each toxic chemical required to be reported in the annual toxic chemical
 release form filed by the owner or operator under section 313(c) of that Act. T
his section shall take effect with the annual report filed under section 313 for
 the first full calendar year beginning after the enactment of this subtitle.
 70 So in original. Probably should be `preceding'.
 (b) ITEMS INCLUDED IN REPORT- The toxic chemical source reduction and re
cycling report required under subsection (a) shall set forth each of the followi
ng on a facility-by-facility basis for each toxic chemical:
 (1) The quantity of the chemical entering any waste stream (or other
wise released into the environment) prior to recycling, treatment, or disposal d
uring the calendar year for which the report is filed and the percentage change 
from the previous year. The quantity reported shall not include any amount repor
ted under paragraph (7). When actual measurements of the quantity of a toxic che
mical entering the waste streams are not readily available, reasonable estimates
 should be made based on best engineering judgment.
 (2) The amount of the chemical from the facility which is recycled (
at the facility or elsewhere) during such calendar year, the percentage change f
rom the previous year, and the process of recycling used.
 (3) The source reduction practices used with respect to that chemica
l during such year at the facility. Such practices shall be reported in accordan
ce with the following categories unless the Administrator finds other categories
 to be more appropriate:
 (A) Equipment, technology, process, or procedure modifications.<
/ul>
 (B) Reformulation or redesign of products.
 (C) Substitution of raw materials.
 (D) Improvement in management, training, inventory control, mate
rials handling, or other general operational phases of industrial facilities.
 (4) The amount expected to be reported under paragraph (1) and (2) f
or the two calendar years immediately following the calendar year for which the 
report is filed. Such amount shall be expressed as a percentage change from the 
amount reported in paragraphs (1) and (2).
 (5) A ratio of production in the reporting year to production in the
 previous year. The ratio should be calculated to most closely reflect all activ
ities involving the toxic chemical. In specific industrial classifications subje
ct to this section, where a feedstock or some variable other than production is 
the primary influence on waste characteristics or volumes, the report may provid
e an index based on that primary variable for each toxic chemical. The Administr
ator is encouraged to develop production indexes to accommodate individual indus
tries for use on a voluntary basis.
 (6) The techniques which were used to identify source reduction oppo
rtunities. Techniques listed should include, but are not limited to, employee re
commendations, external and internal audits, participative team management, and 
material balance audits. Each type of source reduction listed under paragraph (3
) should be associated with the techniques or multiples of techniques used to id
entify the source reduction technique.
 (7) The amount of any toxic chemical released into the environment w
hich resulted from a castastrophic event, remedial action, or other one-time eve
nt, and is not associated with production processess during the reporting year.<
/ul>
 (8) The amount of the chemical from the facility which is treated (a
t the facility or elsewhere) during such calendar year and the percentage change
 from the previous year. For the first year of reporting under this subsection, 
comparison with the previous year is required only to the extent such informatio
n is available.
 (c) SARA PROVISIONS- The provisions of sections 322, 325(c), and 326 of 
the Superfund Amendments and Reauthorization Act of 1986 shall apply to the repo
rting requirements of this section in the same manner as to the reports required
 under section 313 of that Act. The Administrator may modify the form required f
or purposes of reporting information under section 313 of that Act to the extent
 he deems necessary to include the additional information required under this se
ction.
 (d) ADDITIONAL OPTIONAL INFORMATION- Any person filing a report under th
is section for any year may include with the report additional information regar
ding source reduction, recycling, and other pollution control techniques in earl
ier years.
 (e) AVAILABILITY OF DATA- Subject to section 322 of the Superfund Amendm
ents and Reauthorization Act of 1986, the Administrator shall make data collecte
d under this section publicly available in the same manner as the data collected
 under section 313 of the Superfund Amendments and Reauthorization Act of 1986.<
/ul>
SEC. 6608. EPA REPORT.
 (a) BIENNIAL REPORTS- The Administrator shall provide Congress with a re
port within eighteen months after enactment of this subtitle and biennially ther
eafter, containing a detailed description of the actions taken to implement the 
strategy to promote source reduction developed under section 4(b) and of the res
ults of such actions. The report shall include an assessment of the effectivenes
s of the clearinghouse and grant program established under this subtitle in prom
oting the goals of the strategy, and shall evaluate data gaps and data duplicati
on with respect to data collected under Federal environmental statutes.
 (b) SUBSEQUENT REPORTS- Each biennial report submitted under subsection 
(a) after the first report shall contain each of the following:
 (1) An analysis of the data collected under section 6607 on an indus
try-by-industry basis for not less than five SIC codes or other categories as th
e Administrator deems appropriate. The analysis shall begin with those SIC codes
 or other categories of facilities which generate the largest quantities of toxi
c chemical waste. The analysis shall include an evaluation of trends in source r
eduction by industry, firm size, production, or other useful means. Each such su
bsequent report shall cover five SIC codes or other categories which were not co
vered in a prior report until all SIC codes or other categories have been covere
d.
 (2) An analysis of the usefulness and validity of the data collected
 under section 6607 for measuring trends in source reduction and the adoption of
 source reduction by business.
 (3) Identification of regulatory and nonregulatory barriers to sourc
e reduction, and of opportunities for using existing regulatory programs, and in
centives and disincentives to promote and assist source reduction.
 (4) Identification of industries and pollutants that require priorit
y assistance in multi-media source reduction 71
 71 So in original. Probably should be `reduction.'.
 (5) Recommendations as to incentives needed to encourage investment 
and research and development in source reduction.
 (6) Identification of opportunities and development of priorities fo
r research and development in source reduction methods and techniques.
 (7) An evaluation of the cost and technical feasibility, by industry
 and processes, of source reduction opportunities and current activities and an 
identification of any industries for which there are significant barriers to sou
rce reduction with an analysis of the basis of this identification.
 (8) An evaluation of methods of coordinating, streamlining, and impr
oving public access to data collected under Federal environmental statutes.

 (9) An evaluation of data gaps and data duplication with respect to 
data collected under Federal environmental statutes.
In the report following the first biennial report provided for under this
 subsection, paragraphs (3) through (9) may be included at the discretion of the
 Administrator.
SEC. 6609. SAVINGS PROVISIONS.
 (a) Nothing in this subtitle shall be construed to modify or interfere w
ith the implementation of title III of the Superfund Amendments and Reauthorizat
ion Act of 1986.
 (b) Nothing contained in this subtitle shall be construed, interpreted o
r applied to supplant, displace, preempt or otherwise diminish the responsibilit
ies and liabilities under other State or Federal law, whether statutory or commo
n.
SEC. 6610. AUTHORIZATION OF APPROPRIATIONS.
 There is authorized to be appropriated to the Administrator $8,000,000 f
or each of the fiscal years 1991, 1992 and 1993 for functions carried out under 
this subtitle (other than State Grants), and $8,000,000 for each of the fiscal y
ears 1991, 1992 and 1993, for grant programs to States issued pursuant to sectio
n 6605.
TITLE VII--CIVIL SERVICE AND POSTAL SERVICE PROGRAMS
Subtitle A--Civil Service
SEC. 7001. ELIMINATION OF LUMP-SUM RETIREMENT BENEFIT.
 (a) LUMP-SUM BENEFIT- (1) Sections 8343a and 8420a of title 5, United St
ates Code, are each amended by adding at the end the following:
 `(f)(1) Notwithstanding any other provision of this section, and except 
as provided in paragraph (2), an alternative form of annuity under this section 
may not be elected if the commencement date of the annuity would be later than D
ecember 1, 1990.
 `(2) Nothing in this subsection shall prevent an election from being mad
e by any individual--
 `(A) who is separated from Government service involuntarily (other t
han for cause on charges of misconduct or delinquency), excluding--
 `(i) any Senator or Representative in, or Delegate or Resident C
ommissioner to, the Congress;
 `(ii) the Vice President;
 `(iii) any individual holding a position placed in the Executive
 Schedule under sections 5312 through 5317;
 `(iv) any individual appointed to a position by the President (o
r his designee) or the Vice President under section 105(a)(1), 106(a)(1), or 107
 (a)(1) or (b)(1) of title 3, if the maximum rate of basic pay for such position
 is at or above the rate for level V of the Executive Schedule;
 `(v) any noncareer appointee in the Senior Executive Service or 
noncareer member of the Senior Foreign Service; and
 `(vi) any individual holding a position which is excepted from t
he competitive service because of its confidential, policy-determining, policy-m
aking, or policy-advocating character; or
 `(B) as to whom the application of paragraph (1) would be against eq
uity and good conscience, due to a life-threatening affliction or other critical
 medical condition affecting such individual.
 `(3) This subsection shall cease to be effective as of October 1, 1995.'
.
 (2) Section 4005 of the Omnibus Budget Reconciliation Act of 1989 (Publi
c Law 101-239; 103 Stat. 2135) is amended--
 (A) in subsection (a), by striking `October 1, 1990.' and inserting 
`December 2, 1990.'; and
 (B) by adding at the end the following:
 `(f) CONTINUED APPLICABILITY- The preceding provisions of this section (
disregarding the provision in subsection (a) limiting this section's applicabili
ty to annuities commencing before the date specified in such provision) shall al
so apply in the case of any employee or Member whose election of an alternative 
form of annuity would not have been allowable under section 8343a(f) or 8420a(f)
 of title 5, United States Code (as the case may be), but for--
 `(1) paragraph (2)(A) thereof; or
 `(2) section 7001(a)(4) of the Omnibus Budget Reconciliation Act of 
1990.'.
 (C)(i) Section 6001(b)(2) of the Omnibus Budget Reconciliation Act of 19
87 (5 U.S.C. 8343a note) and section 4005(b)(2) of the Omnibus Budget Reconcilia
tion Act of 1989 (103 Stat. 2135) are each amended by striking `described in par
agraph (1).' and inserting `on which the payment described in paragraph (1) is p
aid.'.
 (ii) The amendments made by clause (i) shall not apply in any case in wh
ich the first half of the lump-sum payment involved was paid before the beginnin
g of the 11-month period which ends on the date of the enactment of this Act.
 (D) Section 2 of Public Law 101-227 (103 Stat. 1943) is repealed.
 (3) Section 8348(a)(1)(B) of title 5, United States Code, is amended by 
inserting `in administering alternative forms of annuities under sections 8343a 
and 8420a (and related provisions of law),' before `and in withholding'.
 (4)(A) In applying the provisions of section 8343a(f) or 8420a(f) of tit
le 5, United States Code (as amended by paragraph (1)) to any individual describ
ed in subparagraph (B), the reference in such provisions to `December 1, 1990' s
hall be deemed to read `December 1, 1991'.
 (B) This paragraph applies with respect to any individual who--
 (i)(I) is a member of the Armed Forces of the United States who, bef
ore December 1, 1990, was called or ordered to active duty (other than for train
ing) pursuant to section 672, 673, 673b, 674, 675, or 688 of title 10, United St
ates Code, in connection with Operation Desert Shield; or
 (II) is an employee of the Department of Defense who is certified by
 the Secretary of Defense to have performed, after November 30, 1990, duties ess
ential for the support of Operation Desert Shield; and
 (ii) would have been eligible to make an election under section 8343
a or 8420a of title 5, United States Code (as amended by paragraph (1)) as of No
vember 30, 1990.
 (C) The Office of Personnel Management may prescribe such regulations as
 may be necessary to carry out this paragraph.
 (b) PRIOR REFUNDS- (1) Section 8334(d) of title 5, United States Code, i
s amended--
 (A) by striking `(d)' and inserting `(d)(1)'; and
 (B) by adding at the end the following:
 `(2)(A) This paragraph applies with respect to any employee or Member wh
o--
 `(i) separates before October 1, 1990, and receives (or elects, in a
ccordance with applicable provisions of this subchapter, to receive) a refund (d
escribed in paragraph (1)) which relates to a period of service ending before Oc
tober 1, 1990;
 `(ii) is entitled to an annuity under this subchapter (other than a 
disability annuity) which is based on service of such employee or Member, and wh
ich commences on or after December 2, 1990; and
 `(iii) does not make the deposit (described in paragraph (1)) requir
ed in order to receive credit for the period of service with respect to which th
e refund relates.
 `(B) Notwithstanding the second sentence of paragraph (1), the annuity t
o which an employee or Member under this paragraph is entitled shall (subject to
 adjustment under section 8340) be equal to an amount which, when taken together
 with the unpaid amount referred to in subparagraph (A)(iii), would result in th
e present value of the total being actuarially equivalent to the present value o
f the annuity which would otherwise be provided the employee or Member under thi
s subchapter, as computed under subsections (a)-(i) and (n) of section 8339 (tre
ating, for purposes of so computing the annuity which would otherwise be provide
d under this subchapter, the deposit referred to in subparagraph (A)(iii) as if 
it had been timely made).
 `(C) The Office of Personnel Management shall prescribe such regulations
 as may be necessary to carry out this paragraph.'.
 (2)(A) Section 8334 of title 5, United States Code, is amended in paragr
aphs (1) and (2) of subsection (e), and in subsection (h), by striking `(d),' an
d inserting `(d)(1),'.
 (B) Section 8334(f) and section 8339(i)(1) of title 5, United States Cod
e, are amended by striking `(d)' and inserting `(d)(1)'.
 (C) Section 8339(e) of title 5, United States Code, is amended by striki
ng `8334(d)' and inserting `8334(d)(1)'.
 (D) The second sentence of section 8342(a) of title 5, United States Cod
e, is amended by inserting `or 8334(d)(2)' after `8343a'.
 (3) The amendments made by this subsection shall be effective with respe
ct to any annuity having a commencement date later than December 1, 1990.
SEC. 7002. REFORMS IN THE HEALTH BENEFITS PROGRAM.
 (a) HOSPITALIZATION-COST-CONTAINMENT MEASURES- Section 8902 of title 5, 
United States Code, is amended by adding at the end the following:
 `(n) A contract for a plan described by section 8903 (1), (2), or (3), o
r section 8903a, shall require the carrier--
 `(1) to implement hospitalization-cost-containment measures, such as
 measures--
 `(A) for verifying the medical necessity of any proposed treatme
nt or surgery;
 `(B) for determining the feasibility or appropriateness of provi
ding services on an outpatient rather than on an inpatient basis;
 `(C) for determining the appropriate length of stay (through con
current review or otherwise) in cases involving inpatient care; and
 `(D) involving case management, if the circumstances so warrant;
 and
 `(2) to establish incentives to encourage compliance with measures u
nder paragraph (1).'.
 (b) IMPROVED CASH MANAGEMENT- Section 8909(a) of title 5, United States 
Code, is amended by adding at the end (as a flush left sentence) the following:<
/ul>
`Payments from the Fund to a plan participating in a letter-of-credit arr
angement under this chapter shall, in connection with any payment or reimburseme
nt to be made by such plan for a health service or supply, be made, to the maxim
um extent practicable, on a checks-presented basis (as defined under regulations
 of the Department of the Treasury).'.
 (c) EXEMPTION FROM STATE PREMIUM TAXES- Section 8909 of title 5, United 
States Code, is amended by adding at the end the following:
 `(f)(1) No tax, fee, or other monetary payment may be imposed, directly 
or indirectly, on a carrier or an underwriting or plan administration subcontrac
tor of an approved health benefits plan by any State, the District of Columbia, 
or the Commonwealth of Puerto Rico, or by any political subdivision or other gov
ernmental authority thereof, with respect to any payment made from the Fund.
 `(2) Paragraph (1) shall not be construed to exempt any carrier or under
writing or plan administration subcontractor of an approved health benefits plan
 from the imposition, payment, or collection of a tax, fee, or other monetary pa
yment on the net income or profit accruing to or realized by such carrier or und
erwriting or plan administration subcontractor from business conducted under thi
s chapter, if that tax, fee, or payment is applicable to a broad range of busine
ss activity.'.
 (d) IMPROVED COORDINATION WITH MEDICARE- Section 8910 of title 5, United
 States Code, is amended by adding at the end the following:
 `(d) The Office, in consultation with the Department of Health and Human
 Services, shall develop and implement a system through which the carrier for an
 approved health benefits plan described by section 8903 or 8903a will be able t
o identify those annuitants or other individuals covered by such plan who are en
titled to benefits under part A or B of title XVIII of the Social Security Act i
n order to ensure that payments under coordination of benefits with Medicare do 
not exceed the statutory maximums which physicians may charge Medicare enrollees
.'.
 (e) AMENDMENTS TO PUBLIC LAW 101-76- Public Law 101-76 (103 Stat. 556) i
s amended--
 (1) in subsection (a)(1), by striking `contract year 1990 or 1991,' 
and inserting `each of contract years 1990 through 1993 (inclusive),'; and<
/ul>
 (2) in subsection (c), by striking `contract year 1991,' and inserti
ng `a contract year (or any period thereafter),'.
 (f) APPLICATION OF CERTAIN MEDICARE LIMITS TO FEDERAL EMPLOYEE HEALTH BE
NEFITS ENROLLEES AGE 65 OR OLDER- (1) Section 8904 of title 5, United States Cod
e, is amended by inserting `(a)' before the first sentence and by adding at the 
end of the section the following new subsection:
 `(b)(1) A plan, other than a prepayment plan described in section 8903(4
) of this title, may not provide benefits, in the case of any retired enrolled i
ndividual who is age 65 or older and is not covered to receive Medicare hospital
 and insurance benefits under part A of title XVIII of the Social Security Act (
42 U.S.C. 1395c et seq.), to pay a charge imposed by any health care provider, f
or inpatient hospital services which are covered for purposes of benefit payment
s under this chapter and part A of title XVIII of the Social Security Act, to th
e extent that such charge exceeds applicable limitations on hospital charges est
ablished for Medicare purposes under section 1886 of the Social Security Act (42
 U.S.C. 1395ww). Hospital providers who have in force participation agreements w
ith the Secretary of Health and Human Services consistent with sections 1814(a) 
and 1866 of the Social Security Act (42 U.S.C. 1395f(a) and 1395cc), whereby the
 participating provider accepts Medicare benefits as full payment for covered it
ems and services after applicable patient copayments under section 1813 of such 
Act (42 U.S.C. 1395e) have been satisfied, shall accept equivalent benefit payme
nts and enrollee copayments under this chapter as full payment for services desc
ribed in the preceding sentence. The Office of Personnel Management shall notify
 the Secretary of Health and Human Services if a hospital is found to knowingly 
and willfully violate this subsection on a repeated basis and the Secretary may 
invoke appropriate sanctions in accordance with section 1866(b)(2) of the Social
 Security Act (42 U.S.C. 1395cc(b)(2)) and applicable regulations.
 `(2) Notwithstanding any other provision of law, the Secretary of Health
 and Human Services and the Director of the Office of Personnel Management, and 
their agents, shall exchange any information necessary to implement this subsect
ion.
 `(3)(A) Not later than December 1, 1991, and periodically thereafter, th
e Secretary of Health and Human Services (in consultation with the Director of t
he Office of Personnel Management) shall supply to carriers of plans described i
n paragraphs (1) through (3) of section 8903 the Medicare program information ne
cessary for them to comply with paragraph (1).
 `(B) For purposes of this paragraph, the term `Medicare program informat
ion' includes the limitations on hospital charges established for Medicare purpo
ses under section 1886 of the Social Security Act (42 U.S.C. 1395ww) and the ide
ntity of hospitals which have in force agreements with the Secretary of Health a
nd Human Services consistent with section 1814(a) and 1866 of the Social Securit
y Act (42 U.S.C. 1395f(a) and 1395cc).'.
 (2) The amendments made by this subsection shall apply with respect to c
ontract years beginning on or after January 1, 1992.
 (g) EFFECTIVE DATE- Except as provided in subsection (f), the amendments
 made by this section shall apply with respect to contract years beginning on or
 after January 1, 1991.
Subtitle B--Postal Service
SEC. 7101. FUNDING OF COLAS FOR POSTAL SERVICE ANNUITANTS AND SURVIVOR ANNUIT
ANTS.
 (a) EXPANDED SCOPE OF COVERAGE; CHANGE IN PRORATION RULE- Section 8348(m
)(1) of title 5, United States Code, is amended by striking `October 1, 1986,' e
ach place it appears and inserting `July 1, 1971,'.
 (b) REPEAL OF PROVISION RELATING TO CERTAIN EARLIER COLAS- Section 4002(
b) of the Omnibus Budget Reconciliation Act of 1989 (Public Law 101-239; 103 Sta
t. 2134) is repealed.
 (c) PROVISION RELATING TO PRE-1991 COLAS- (1) For the purpose of this su
bsection--
 (A) the term `pre-1991 COLA' means a cost-of-living adjustment which
 took effect in any of the fiscal years specified in subparagraphs (A)-(N) of pa
ragraph (3);
 (B) the term `post-1990 fiscal year' means a fiscal year after fisca
l year 1990; and
 (C) the term `pre-1991 fiscal year' means a fiscal year before fisca
l year 1991.
 (2) Notwithstanding any other provision of law, an installment (equal to
 an amount determined by reference to paragraph (3)) shall be payable by the Uni
ted States Postal Service in a post-1990 fiscal year, with respect to a pre-1991
 COLA, if such fiscal year occurs within the 15-fiscal-year period which begins 
with the first fiscal year in which that COLA took effect, subject to section 71
04.
 (3) Notwithstanding any provision of section 8348(m) of title 5, United 
States Code, or any determination thereunder (including any made under such prov
ision, as in effect before October 1, 1990), the estimated increase in the unfun
ded liability referred to in paragraph (1) of such section 8348(m) shall be paya
ble, in accordance with this subsection, based on annual installments equal to--

 (A) $6,500,000 each, with respect to the cost-of-living adjustment w
hich took effect in fiscal year 1977;
 (B) $7,000,000 each, with respect to the cost-of-living adjustment w
hich took effect in fiscal year 1978;
 (C) $10,400,000 each, with respect to the cost-of-living adjustment 
which took effect in fiscal year 1979;
 (D) $20,500,000 each, with respect to the cost-of-living adjustment 
which took effect in fiscal year 1980;
 (E) $26,100,000 each, with respect to the cost-of-living adjustment 
which took effect in fiscal year 1981;
 (F) $28,100,000 each, with respect to the cost-of-living adjustment 
which took effect in fiscal year 1982;
 (G) $30,600,000 each, with respect to the cost-of-living adjustment 
which took effect in fiscal year 1983;
 (H) $5,700,000 each, with respect to the cost-of-living adjustment w
hich took effect in fiscal year 1984;
 (I) $19,400,000 each, with respect to the cost-of-living adjustment 
which took effect in fiscal year 1985;
 (J) $7,400,000 each, with respect to the cost-of-living adjustment w
hich took effect in fiscal year 1986;
 (K) $8,500,000 each, with respect to the cost-of-living adjustment w
hich took effect in fiscal year 1987;
 (L) $36,800,000 each, with respect to the cost-of-living adjustment 
which took effect in fiscal year 1988;
 (M) $51,600,000 each, with respect to the cost-of-living adjustment 
which took effect in fiscal year 1989; and
 (N) $63,500,000 each, with respect to the cost-of-living adjustment 
which took effect in fiscal year 1990.
 (4) Any installment payable under this subsection shall be paid by the P
ostal Service at the same time as when it pays any installments due in that same
 fiscal year under section 8348(m) of title 5, United States Code.
 (5) An installment payable under this subsection in a fiscal year, with 
respect to a pre-1991 COLA, shall be in lieu of any other installment for which 
the Postal Service might otherwise be liable in such fiscal year, with respect t
o such COLA, under section 8348(m) of title 5, United States Code.
 (d) EFFECTIVE DATE- This section and the amendments made by this section
 shall take effect on October 1, 1990.
SEC. 7102. FUNDING OF HEALTH BENEFITS FOR POSTAL SERVICE RETIREES AND SURVIVO
RS OF POSTAL SERVICE EMPLOYEES OR RETIREES.
 (a) EXPANDED SCOPE OF COVERAGE- Section 8906(g)(2) of title 5, United St
ates Code, is amended by striking `October 1, 1986,' each place it appears and i
nserting `July 1, 1971,'.
 (b) CONTRIBUTIONS TO BE PRORATED- Section 8906(g)(2) of title 5, United 
States Code, as amended by subsection (a), is further amended--
 (1) by striking `(2)' and inserting `(2)(A)'; and
 (2) by adding at the end the following:
 `(B) In determining any amount for which the Postal Service is liable un
der this paragraph, the amount of the liability shall be prorated to reflect onl
y that portion of total service which is attributable to civilian service perfor
med (by the former postal employee or by the deceased individual referred to in 
subparagraph (A), as the case may be) after June 30, 1971, as estimated by the O
ffice of Personnel Management.'.
 (c) EFFECTIVE DATE- The amendments made by this section shall take effec
t on October 1, 1990, and shall apply with respect to amounts payable for period
s beginning on or after that date.
SEC. 7103. PAYMENTS RELATING TO AMOUNTS WHICH WOULD HAVE BEEN DUE BEFORE FISC
AL YEAR 1987.
 (a) DEFINITION- For the purpose of this section, the term `pre-1987 fisc
al year' means a fiscal year before fiscal year 1987.
 (b) FOR PAST RETIREMENT COLAS- As payment for any amounts which would ha
ve been due in any pre-1987 fiscal year under the provisions of section 8348(m) 
of title 5, United States Code (as amended by section 7101) if such provisions h
ad been in effect as of July 1, 1971, the United States Postal Service shall pay
 into the Civil Service Retirement and Disability Fund--
 (1) $216,000,000, not later than September 30, 1991;
 (2) $266,000,000, not later than September 30, 1992;
 (3) $316,000,000, not later than September 30, 1993;
 (4) $416,000,000, not later than September 30, 1994; and
 (5) $471,000,000, not later than September 30, 1995.
 (c) FOR PAST HEALTH BENEFITS- As payment for any amounts which would, fo
r any period ending before the start of fiscal year 1987, have been payable unde
r the provisions of section 8906(g)(2) of title 5, United States Code (as amende
d by section 7102) if such provisions had been in effect as of July 1, 1971, the
 United States Postal Service shall pay into the Employees Health Benefits Fund-
-
 (1) $56,000,000, not later than September 30, 1991;
 (2) $47,000,000, not later than September 30, 1992;
 (3) $62,000,000, not later than September 30, 1993;
 (4) $56,000,000, not later than September 30, 1994; and
 (5) $234,000,000, not later than September 30, 1995.
Subtitle C--Miscellaneous
SEC. 7201. COMPUTER MATCHING OF FEDERAL BENEFITS INFORMATION AND PRIVACY PROT
ECTION.
 (a) SHORT TITLE- This section may be cited as the `Computer Matching and
 Privacy Protection Amendments of 1990'.
 (b) VERIFICATION REQUIREMENTS AMENDMENT- (1) Subsection (p) of section 5
52a of title 5, United States Code, is amended to read as follows:
 `(p) VERIFICATION AND OPPORTUNITY TO CONTEST FINDINGS- (1) In order to p
rotect any individual whose records are used in a matching program, no recipient
 agency, non-Federal agency, or source agency may suspend, terminate, reduce, or
 make a final denial of any financial assistance or payment under a Federal bene
fit program to such individual, or take other adverse action against such indivi
dual, as a result of information produced by such matching program, until--
 `(A)(i) the agency has independently verified the information; or
 `(ii) the Data Integrity Board of the agency, or in the case of a no
n-Federal agency the Data Integrity Board of the source agency, determines in ac
cordance with guidance issued by the Director of the Office of Management and Bu
dget that--
 `(I) the information is limited to identification and amount of 
benefits paid by the source agency under a Federal benefit program; and
 `(II) there is a high degree of confidence that the information 
provided to the recipient agency is accurate;
 `(B) the individual receives a notice from the agency containing a s
tatement of its findings and informing the individual of the opportunity to cont
est such findings; and
 `(C)(i) the expiration of any time period established for the progra
m by statute or regulation for the individual to respond to that notice; or

 `(ii) in the case of a program for which no such period is establish
ed, the end of the 30-day period beginning on the date on which notice under sub
paragraph (B) is mailed or otherwise provided to the individual.
 `(2) Independent verification referred to in paragraph (1) requires inve
stigation and confirmation of specific information relating to an individual tha
t is used as a basis for an adverse action against the individual, including whe
re applicable investigation and confirmation of--
 `(A) the amount of any asset or income involved;
 `(B) whether such individual actually has or had access to such asse
t or income for such individual's own use; and
 `(C) the period or periods when the individual actually had such ass
et or income.
 `(3) Notwithstanding paragraph (1), an agency may take any appropriate a
ction otherwise prohibited by such paragraph if the agency determines that the p
ublic health or public safety may be adversely affected or significantly threate
ned during any notice period required by such paragraph.'.
 (2) Not later than 90 days after the date of the enactment of this Act, 
the Director of the Office of Management and Budget shall publish guidance under
 subsection (p)(1)(A)(ii) of section 552a of title 5, United States Code, as ame
nded by this Act.
 (c) LIMITATION ON APPLICATION OF VERIFICATION REQUIREMENT- Section 552a(
p)(1)(A)(ii)(II) of title 5, United States Code, as amended by section 2, shall 
not apply to a program referred to in paragraph (1), (2), or (4) of section 1137
(b) of the Social Security Act (42 U.S.C. 1320b-7), until the earlier of--
 (1) the date on which the Data Integrity Board of the Federal agency
 which administers that program determines that there is not a high degree of co
nfidence that information provided by that agency under Federal matching program
s is accurate; or
 (2) 30 days after the date of publication of guidance under section 
2(b).
SEC. 7202. PORTABILITY OF BENEFITS FOR EMPLOYEES CONVERTING TO THE CIVIL SERV
ICE SYSTEM.
 (a) SHORT TITLE- This section may be cited as the `Portability of Benefi
ts for Nonappropriated Fund Employees Act of 1990'.
 (b) DEFINITIONAL AMENDMENT- Section 2105(c) of title 5, United States Co
de, is amended--
 (1) by amending paragraph (1) to read as follows:
 `(1) laws administered by the Office of Personnel Management, except
--
 `(A) section 7204;
 `(B) as otherwise specifically provided in this title;

 `(C) the Fair Labor Standards Act of 1938; or
 `(D) for the purpose of entering into an interchange agreement t
o provide for the noncompetitive movement of employees between such instrumental
ities and the competitive service; or'; and
 (2) in paragraph (2), by striking `chapter 84' and inserting `chapte
r 84 (except to the extent specifically provided therein)'.
 (c) AMENDMENT RELATING TO ORDER OF RETENTION- Section 3502(a)(C) of titl
e 5, United States Code, is amended to read as follows:
 `(C) is entitled to credit for--
 `(i) service rendered as an employee of a county committee e
stablished pursuant to section 8(b) of the Soil Conservation and Allotment Act o
r of a committee or association of producers described in section 10(b) of the A
gricultural Adjustment Act; and
 `(ii) service rendered as an employee described in section 2
105(c) if such employee moves or has moved, on or after January 1, 1987, without
 a break in service of more than 3 days, from a position in a nonappropriated fu
nd instrumentality of the Department of Defense or the Coast Guard to a position
 in the Department of Defense or the Coast Guard, respectively, that is not desc
ribed in section 2105(c).'.
 (d) AMENDMENT RELATING TO PAY ON A CHANGE OF POSITION- Section 5334 of t
itle 5, United States Code, is amended by adding at the end the following:
 `(g) An employee of a nonappropriated fund instrumentality of the Depart
ment of Defense or the Coast Guard described in section 2105(c) who moves, witho
ut a break in service of more than 3 days, to a position in the Department of De
fense or the Coast Guard, respectively, that is subject to this subchapter, may 
have such employee's initial rate of basic pay fixed at the minimum rate of the 
appropriate grade or at any step of such grade that does not exceed the highest 
previous rate of basic pay received by that employee during the employee's servi
ce described in section 2105(c). In the case of a nonappropriated fund employee 
who is moved involuntarily from such nonappropriated fund instrumentality withou
t a break in service of more than 3 days and without substantial change in dutie
s to a position that is subject to this subchapter, the employee's pay shall be 
set at a rate (not above the maximum for the grade, except as may be provided fo
r under section 5365) that is not less than the employee's rate of basic pay und
er the nonappropriated fund instrumentality immediately prior to so moving.'.
 (e) AMENDMENT RELATING TO PERIODIC STEP INCREASES- Section 5335 of title
 5, United States Code, is amended by adding at the end the following:
 `(g) In computing periods of service under subsection (a) in the case of
 an employee who moves without a break in service of more than 3 days from a pos
ition under a nonappropriated fund instrumentality of the Department of Defense 
or the Coast Guard described in section 2105(c) to a position under the Departme
nt of Defense or the Coast Guard, respectively, that is subject to this subchapt
er, service under such instrumentality shall, under regulations prescribed by th
e Office, be deemed service in a position subject to this subchapter.'.
 (f) AMENDMENT RELATING TO GRADE AND PAY RETENTION- Section 5365(b) of ti
tle 5, United States Code, is amended by adding at the end, as a flush left sent
ence, the following:
`Individuals with respect to whom authority under paragraph (2) may be ex
ercised include individuals who are moved without a break in service of more tha
n 3 days from employment in nonappropriated fund instrumentalities of the Depart
ment of Defense or the Coast Guard described in section 2105(c) to employment in
 the Department of Defense or the Coast Guard, respectively, that is not describ
ed in section 2105(c).'.
 (g) AMENDMENT RELATING TO PAY FOR ACCUMULATED AND ACCRUED LEAVE- Section
 5551(a) of title 5, United States Code, is amended by adding at the end the fol
lowing new sentence: `For the purposes of this subsection, movement to employmen
t described in section 2105(c) shall not be deemed separation from the service i
n the case of an employee whose annual leave is transferred under section 6308(b
).'.
 (h) AMENDMENTS RELATING TO TRANSFERS BETWEEN POSITIONS UNDER DIFFERENT L
EAVE SYSTEMS- Section 6308 of title 5, United States Code, is amended--
 (1) by inserting `(a)' before `The annual'; and
 (2) by adding at the end the following:
 `(b) The annual leave, sick leave, and home leave to the credit of a non
appropriated fund employee of the Department of Defense or the Coast Guard descr
ibed in section 2105(c) who moves without a break in service of more than 3 days
 to a position in the Department of Defense or the Coast Guard, respectively, th
at is subject to this subchapter shall be transferred to the employee's credit. 
The annual leave, sick leave, and home leave to the credit of an employee of the
 Department of Defense or the Coast Guard who is subject to this subchapter and 
who moves without a break in service of more than 3 days to a position under a n
onappropriated fund instrumentality of the Department of Defense or the Coast Gu
ard, respectively, described in section 2105(c), shall be transferred to the emp
loyee's credit under the nonappropriated fund instrumentality. The Secretary of 
Defense or the Secretary of Transportation, as appropriate, may provide for a tr
ansfer of funds in an amount equal to the value of the transferred annual leave 
to compensate the gaining entity for the cost of a transfer of annual leave unde
r this subsection.'.
 (i) AMENDMENTS TO INCLUDE ADDITIONAL SERVICE FOR LEAVE ACCRUAL PURPOSES-
 (1) Section 6312 is amended to read as follows:
`Sec. 6312. Accrual and accumulation for former ASCS county office and nonapp
ropriated fund employees
 `(a) Credit shall be given in determining years of service for the purpo
se of section 6303(a) for--
 `(1) service as an employee of a county committee established pursua
nt to section 8(b) of the Soil Conservation and Allotment Act or of a committee 
or an association of producers described in section 10(b) of the Agricultural Ad
justment Act; and
 `(2) service under a nonappropriated fund instrumentality of the Dep
artment of Defense or the Coast Guard described in section 2105(c) by an employe
e who has moved without a break in service of more than 3 days to a position sub
ject to this subchapter in the Department of Defense or the Coast Guard, respect
ively.
 `(b) The provisions of subsections (a) and (b) of section 6308 for trans
fer of leave between leave systems shall apply to the leave systems established 
for such county office employees and employees of such Department of Defense and
 Coast Guard nonappropriated fund instrumentalities, respectively.'.
 (2) The item relating to section 6312 in the table of sections for chapt
er 63 of title 5, United States Code, is amended to read as follows:
`6312. Accrual and accumulation for former ASCS county office and nonappropri
ated fund employees.'.
 (j) AMENDMENTS RELATING TO THE CIVIL SERVICE RETIREMENT SYSTEM- (1) Sect
ion 8331 of title 5, United States Code, is amended--
 (A) by striking `and' at the end of paragraph (1)(J);
 (B) by inserting `and' after the semicolon at the end of paragraph (
1)(K);
 (C) by inserting after paragraph (1)(K) the following:
 `(L) an employee described in section 2105(c) who has made a
n election under section 8347(p)(1) to remain covered under this subchapter;';
 (D) in paragraph (1)(ii), by striking the matter following `Governme
nt employees' through the semicolon and inserting `(besides any employee exclude
d by clause (x), but including any employee who has made an election under secti
on 8347(p)(2) to remain covered by a retirement system established for employees
 described in section 2105(c));'; and
 (E) in paragraph (7), by striking `and Gallaudet College;' and inser
ting `Gallaudet College, and, in the case of an employee described in paragraph 
(1)(L), a nonappropriated fund instrumentality of the Department of Defense or t
he Coast Guard described in section 2105(c);'.
 (2) Section 8347 of title 5, United States Code, is amended by adding at
 the end the following:
 `(p)(1) Under regulations prescribed by the Office of Personnel Manageme
nt, an employee of the Department of Defense or the Coast Guard who--
 `(A) has not previously made or had an opportunity to make an electi
on under this subsection;
 `(B) has 5 or more years of civilian service creditable under this s
ubchapter; and
 `(C) moves, without a break in service of more than 3 days, to emplo
yment in a nonappropriated fund instrumentality of the Department of Defense or 
the Coast Guard, respectively, described in section 2105(c),
shall be given the opportunity to elect irrevocably, within 30 days after
 such move, to remain covered as an employee under this subchapter during any em
ployment described in section 2105(c) after such move.
 `(2) Under regulations prescribed by the Office of Personnel Management,
 an employee of a nonappropriated fund instrumentality of the Department of Defe
nse or the Coast Guard, described in section 2105(c), who--
 `(A) has not previously made or had an opportunity to make an electi
on under this subsection;
 `(B) is a vested participant in a retirement system established for 
employees described in section 2105(c), as the term `vested participant' is defi
ned by such system;
 `(C) moves, without a break in service of more than 3 days, to a pos
ition in the Department of Defense or the Coast Guard, respectively, that is not
 described in section 2105(c); and
 `(D) is excluded from coverage under chapter 84 by section 8402(b),<
/ul>
shall be given the opportunity to elect irrevocably, within 30 days after
 such move, to remain covered, during any subsequent employment as an employee a
s defined in section 2105(a) or section 2105(c), by the retirement system applic
able to such employee's current or most recent employment described in section 2
105(c) rather than be subject to this subchapter.'.
 (k) AMENDMENTS RELATING TO THE FEDERAL EMPLOYEES' RETIREMENT SYSTEM- (1)
 Section 8401 of title 5, United States Code, is amended--
 (A) in paragraph (11)--
 (i) by striking `and' at the end of subparagraph (A);<
/ul>
 (ii) by inserting `and' after the semicolon at the end of subpar
agraph (B);
 (iii) by inserting after subparagraph (B) the following:
 `(C) an employee described in section 2105(c) who has made an el
ection under section 8461(n)(1) to remain covered under this chapter;';
 (iv) by striking `or' at the end of clause (ii);
 (v) by inserting `or' after the semicolon at the end of clause (
iii); and
 (vi) by inserting after clause (iii) the following:
 `(iv) an employee who has made an election under section 846
1(n)(2) to remain covered by a retirement system established for employees descr
ibed in section 2105(c);'; and
 (B) in paragraph (15), by striking `and Gallaudet College;' and inse
rting `, Gallaudet College, and, in the case of an employee described in paragra
ph (11)(C), a nonappropriated fund instrumentality of the Department of Defense 
or the Coast Guard described in section 2105(c);'.
 (2) Section 8461 of title 5, United States Code, is amended by adding at
 the end the following:
 `(n)(1) Under regulations prescribed by the Office, an employee of the D
epartment of Defense or the Coast Guard who--
 `(A) has not previously made or had an opportunity to make an electi
on under this subsection;
 `(B) has 5 or more years of civilian service creditable under this c
hapter; and
 `(C) moves, without a break in service of more than 3 days, to emplo
yment in a nonappropriated fund instrumentality of the Department of Defense or 
the Coast Guard, respectively, described in section 2105(c),
shall be given the opportunity to elect irrevocably, within 30 days after
 such move, to remain covered as an employee under this chapter during any emplo
yment described in section 2105(c) after such move.
 `(2) Under regulations prescribed by the Office, an employee of a nonapp
ropriated fund instrumentality of the Department of Defense or the Coast Guard d
escribed in section 2105(c), who--
 `(A) has not previously made or had an opportunity to make an electi
on under this subsection;
 `(B) is a vested participant in a retirement system established for 
employees described in section 2105(c), as the term `vested participant' is defi
ned by such system;
 `(C) moves, without a break in service of more than 3 days, to a pos
ition in the Department of Defense or the Coast Guard, respectively, that is not
 described by section 2105(c); and
 `(D) is not eligible to make an election under section 8347(p),

shall be given the opportunity to elect irrevocably, within 30 days after
 such move, to remain covered, during any subsequent employment as an employee a
s defined by section 2105(a) or section 2105(c), by the retirement system applic
able to such employee's current or most recent employment described by section 2
105(c) rather than be subject to this chapter.'.
 (l) AMENDMENTS RELATING TO HEALTH BENEFITS- Section 8901(3)(A) of title 
5, United States Code, is amended--
 (1) by striking `or' at the end of clause (ii);
 (2) by inserting `or' after the semicolon at the end of clause (iii)
; and
 (3) by inserting after clause (iii) the following:
 `(iv) on an immediate annuity under a retirement system esta
blished for employees described in section 2105(c), in the case of an individual
 who elected under section 8347(p)(2) or 8461(n)(2) to remain subject to such a 
system;'.
 (m) APPLICABILITY- (1) The amendments made by this section shall apply w
ith respect to any individual who, on or after January 1, 1987--
 (A) moves without a break in service of more than 3 days from employ
ment in a nonappropriated fund instrumentality of the Department of Defense or t
he Coast Guard that is described in section 2105(c) of title 5, United States Co
de, to employment in the Department of Defense or the Coast Guard, respectively,
 that is not described in such section 2105(c); or
 (B) moves without a break in service from employment in the Departme
nt of Defense or the Coast Guard that is not described in such section 2105(c) t
o employment in a nonappropriated fund instrumentality of the Department of Defe
nse or the Coast Guard, respectively, that is described in such section 2105(c).

 (2) The Secretary of Defense, the Secretary of Transportation, the Direc
tor of the Office of Personnel Management, and the Executive Director of the Fed
eral Retirement Thrift Investment Board, as applicable, shall take such actions 
as may be practicable to ensure that each individual who has moved as described 
under paragraph (1) on or after January 1, 1987, and before the date of enactmen
t of this Act, receives the benefit of the amendments made by this section as if
 such amendments had been in effect at the time such individual so moved. Each s
uch individual who wishes to make an election of retirement coverage under the a
mendments made by subsection (j) or (k) of this section shall complete such elec
tion within 180 days after the date of enactment of this Act.
 (n) CLARIFYING PROVISIONS RELATING TO TREATMENT OF INDIVIDUALS ELECTING 
TO REMAIN SUBJECT TO THEIR FORMER RETIREMENT SYSTEM- (1) For the purpose of this
 section, the term `nonappropriated fund instrumentality' means a nonappropriate
d fund instrumentality of the Department of Defense or the Coast Guard, describe
d in section 2105(c) of title 5, United States Code.
 (2)(A) If an individual makes an election under section 8347(p)(1) of ti
tle 5, United States Code, to remain covered by subchapter III of chapter 83 of 
such title, any nonappropriated fund instrumentality thereafter employing such i
ndividual shall deduct from such individual's pay and contribute to the Thrift S
avings Fund such sums as are required for such individual in accordance with sec
tion 8351 of such title.
 (B) Notwithstanding subsection (a) or (b) of section 8432 of title 5, Un
ited States Code, any individual who, as of the date of enactment of this Act, b
ecomes eligible to make an election under section 8347(p)(1) of such title may, 
within 30 days after such individual makes an election thereunder in accordance 
with subsection (m)(2), make any election described in section 8432(b)(1)(A) of 
such title.
 (3)(A) If an individual makes an election under section 8461(n)(1) of ti
tle 5, United States Code, to remain covered by chapter 84 of such title, any no
nappropriated fund instrumentality thereafter employing such individual shall de
duct from such individual's pay and shall contribute to the Thrift Savings Fund 
the funds deducted, together with such other sums as are required for such indiv
idual under subchapter III of such chapter.
 (B) Notwithstanding subsection (a) or (b) of section 8432 of title 5, Un
ited States Code, any individual who, as of the date of enactment of this Act, b
ecomes eligible to make an election under section 8461(n)(1) of such title may, 
within 30 days after such individual makes an election thereunder in accordance 
with subsection (m)(2), make any election described in section 8432(b)(1)(A) of 
such title.
 (4) If an individual makes an election under section 8347(p)(2) or 8461(
n)(2) of title 5, United States Code, to remain covered by a retirement system e
stablished for employees described in section 2105(c) of such title, any Governm
ent agency thereafter employing such individual shall, in lieu of any deductions
 or contributions for which it would otherwise be responsible with respect to su
ch individual under chapter 83 or 84 of such title, make such deductions from pa
y and such contributions as would be required (under the retirement system for n
onappropriated fund employees involved) if it were a nonappropriated fund instru
mentality. Any such deductions and contributions shall be remitted to the Depart
ment of Defense or the Coast Guard, as applicable, for transmission to the appro
priate retirement system.
Subtitle D--Coordination
SEC. 7301. COORDINATION.
 For purposes of section 202 of the Balanced Budget and Emergency Deficit
 Reaffirmation Act of 1987, this title and the amendments made by this title sha
ll be considered an exception under subsection (b) of such section.
TITLE VIII--VETERANS' PROGRAMS
TABLE OF CONTENTS
Subtitle A--Compensation, DIC, and Pension
Sec. 8001. Compensation benefits for certain incompetent veterans.
Sec. 8002. Elimination of presumption of total disability in determination of
 pension for certain veterans.
Sec. 8003. Reduction in pension for certain veterans receiving Medicaid-cover
ed nursing home care.
Sec. 8004. Ineligibility of remarried surviving spouses or married children f
or reinstatement of benefits eligibility upon becoming single.
Sec. 8005. Cost-of-living increases in compensation rates.
Subtitle B--Health-Care Benefits
Sec. 8011. Medical-care cost recovery.
Sec. 8012. Copayment for medications.
Sec. 8013. Modification of health-care categories and copayments.
Subtitle C--Education and Employment
Sec. 8021. Limitation of rehabilitation program entitlement to service-disabl
ed veterans rated at 20 percent or more.
Subtitle D--Housing and Loan Guaranty Assistance
Sec. 8031. Election of claim under guaranty of manufactured home loans.
Sec. 8032. Loan fee.
Subtitle E--Burial and Grave Marker Benefits
Sec. 8041. Headstone or marker allowance.
Sec. 8042. Plot allowance eligibility.
Subtitle F--Miscellaneous
Sec. 8051. Use of Internal Revenue Service and Social Security Administration
 data for income verification.
Sec. 8052. Line of duty.
Sec. 8053. Requirement for claimants to report social security numbers; use o
f death information by the Department of Veterans Affairs.
Subtitle A--Compensation, DIC, and Pension
SEC. 8001. LIMITATION ON COMPENSATION BENEFITS FOR CERTAIN INCOMPETENT VETERA
NS.
 (a) IN GENERAL- (1) Chapter 55 of title 38, United States Code, is amend
ed by adding at the end the following new section:
`Sec. 3205. Limitation on compensation payments for certain incompetent veter
ans
 `(a) In any case in which a veteran having neither spouse, child, nor de
pendent parent is rated by the Secretary in accordance with regulations as being
 incompetent and the value of the veteran's estate (excluding the value of the v
eteran's home) exceeds $25,000, further payment of compensation to which the vet
eran would otherwise be entitled may not be made until the value of such estate 
is reduced to less than $10,000.
 `(b)(1) Subject to paragraph (2) of this subsection, if a veteran denied
 payment of compensation pursuant to subsection (a) is subsequently rated as bei
ng competent, the Secretary shall pay to the veteran a lump sum equal to the tot
al of the compensation which was denied the veteran pursuant to such paragraph. 
The Secretary shall make the lump-sum payment as soon as practicable after the e
nd of the 90-day period beginning on the date of the competency rating.
 `(2) A lump-sum payment may not be made under paragraph (1) to a veteran
 who, within such 90-day period, dies or is again rated by the Secretary as bein
g incompetent.
 `(3) The costs of administering this subsection shall be paid from amoun
ts available to the Department of Veterans Affairs for the payment of compensati
on and pension.
 `(c) This section expires on September 30, 1992.'.
 (2) The table of sections at the beginning of such chapter is amended by
 adding at the end the following new item:
`3205. Limitation on compensation payments for certain incompetent ve
terans.'
 (b) EFFECTIVE DATE- The amendment made by this section shall apply with 
respect to payment of compensation for months after October 1990.
SEC. 8002. ELIMINATION OF PRESUMPTION OF TOTAL DISABILITY IN DETERMINATION OF
 PENSION FOR CERTAIN VETERANS.
 (a) ELIMINATION OF PRESUMPTION- That portion of subsection (a) of sectio
n 502 of title 38, United States Code, preceding paragraph (1) is amended to rea
d as follows:
 `(a) For the purposes of this chapter, a person shall be considered to b
e permanently and totally disabled if such a person is unemployable as a result 
of disability reasonably certain to continue throughout the life of the disabled
 person, or is suffering from--'.
 (b) APPLICABILITY- The amendment made by subsection (a) shall apply with
 respect to claims filed after October 31, 1990.
SEC. 8003. REDUCTION IN PENSION FOR CERTAIN VETERANS RECEIVING MEDICAID-COVER
ED NURSING HOME CARE.
 (a) IN GENERAL- Section 3203 of title 38, United States Code, is amended
 by adding at the end the following:
 `(f)(1) For the purposes of this subsection--
 `(A) the term `Medicaid plan' means a State plan for medical assista
nce referred to in section 1902(a) of the Social Security Act (42 U.S.C. 1396a(a
)); and
 `(B) the term `nursing facility' means a nursing facility described 
in section 1919 of such Act (42 U.S.C. 1396r).
 `(2) If a veteran having neither spouse nor child is covered by a Medica
id plan for services furnished such veteran by a nursing facility, no pension in
 excess of $90 per month shall be paid to or for the veteran for any period afte
r the month of admission to such nursing facility.
 `(3) Notwithstanding any provision of title XIX of the Social Security A
ct, the amount of the payment paid a nursing facility pursuant to a Medicaid pla
n for services furnished a veteran may not be reduced by any amount of pension p
ermitted to be paid such veteran under paragraph (2) of this subsection.
 `(4) A veteran is not liable to the United States for any payment of pen
sion in excess of the amount permitted under this subsection that is paid to or 
for the veteran by reason of the inability or failure of the Secretary to reduce
 the veteran's pension under this subsection unless such inability or failure is
 the result of a willful concealment by the veteran of information necessary to 
make a reduction in pension under this subsection.
 `(5) The costs of administering this subsection shall be paid for from a
mounts available to the Department of Veterans Affairs for the payment of compen
sation and pension.
 `(6) This subsection expires on September 30, 1992.'.
 (b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effe
ct on November 1, 1990, or the date of the enactment of this Act, whichever is l
ater.
SEC. 8004. INELIGIBILITY OF REMARRIED SURVIVING SPOUSES OR MARRIED CHILDREN F
OR REINSTATEMENT OF BENEFITS ELIGIBILITY UPON BECOMING SINGLE.
 (a) IN GENERAL- Section 103 of title 38, United States Code, is amended-
-
 (1) in subsection (d)--
 (A) by striking out `(1)'; and
 (B) by striking out paragraphs (2) and (3); and
 (2) in subsection (e)--
 (A) by striking out `(1)'; and
 (B) by striking out paragraph (2).
 (b) EFFECTIVE DATE- The amendments made by subsection (a) shall apply wi
th respect to claims filed after October 31, 1990, and shall not operate to redu
ce or terminate benefits to any individual whose benefits were predicated on sec
tion 103(d)(2), 103(d)(3), or 103(e)(2) before the effective date of those amend
ments.
SEC. 8005. COST-OF-LIVING INCREASES IN COMPENSATION RATES.
 (a) POLICY REGARDING FISCAL YEAR 1991- The fiscal year 1991 cost-of-livi
ng adjustments in the rates of compensation payable under chapter 11 of title 38
, United States Code, and of the dependency and indemnity compensation payable u
nder chapter 13 of such title will be no more than a 5.4 percent increase, with 
all increased monthly rates rounded down to the next lower dollar. The effective
 date for such adjustments will not be earlier than January 1, 1991.
 (b) INCREASE PAYABLE AS OF JANUARY  1992- The amount of compensation or 
dependency and indemnity compensation payable to any individual for the month of
 January 1992 who is entitled to such benefits as of January 1, 1992, shall be i
ncreased for such month by the amount equal to the amount of the monthly increas
e provided for that individual's benefit level as of January 1, 1991, pursuant t
o the adjustments described in subsection (a).
Subtitle B--Health-Care Benefits
SEC. 8011. MEDICAL-CARE COST RECOVERY.
 (a) APPLICABILITY- Section 629(a)(2) of title 38, United States Code, is
 amended--
 (1) by striking out `or' at the end of clause (C);
 (2) by striking out the period at the end of clause (D) and insertin
g in lieu thereof `; or'; and
 (3) by adding at the end the following new clause:
 `(E) for which care and services are furnished before October 1, 199
3, under this chapter to a veteran who--
 `(i) has a service-connected disability; and
 `(ii) is entitled to care (or payment of the expenses of care) u
nder a health-plan contract.'.
 (b) MAXIMUM AMOUNT RECOVERABLE- Clause (B) of section 629(c)(2) of such 
title is amended by striking out `in accordance with the prevailing rates at whi
ch the third party makes payments under comparable health-plan contracts with' a
nd inserting in lieu thereof `if provided by'.
 (c) ESTABLISHMENT OF MEDICAL-CARE COST RECOVERY FUND- Section 629(g) of 
such title is amended to read as follows:
 `(g)(1) There is established in the Treasury a fund to be known as the D
epartment of Veterans Affairs Medical-Care Cost Recovery Fund (hereafter referre
d to in this section as the `Fund').
 `(2) Amounts recovered or collected under this section shall be deposite
d in the Fund.
 `(3) Sums in the Fund shall be available to the Secretary for the follow
ing:
 `(A) Payment of necessary expenses for the identification, billing, 
and collection of the cost of care and services furnished under this chapter, an
d for the administration and collection of payments required under section 610(f
) of this title for hospital care or nursing home care, under section 612(f) of 
this title for medical services, and under section 622A of this title for medica
tions, including--
 `(i) the costs of computer hardware and software, word processin
g and telecommunications equipment, other equipment, supplies, and furniture;
 `(ii) personnel training and travel costs;
 `(iii) personnel and administrative costs for attorneys in the O
ffice of General Counsel of the Department and for support personnel of such off
ice;
 `(iv) other personnel and administrative costs; and
 `(v) the costs of any contract for identification, billing, or c
ollection services.
 `(B) Payment of the Secretary for reasonable charges, as determined 
by the Secretary, imposed for (i) services and utilities (including light, water
, and heat) furnished by the Secretary, (ii) recovery and collection activities 
under this section, and (iii) administration of the Fund.
 `(4) Not later than January 1 of each year, there shall be deposited int
o the Treasury as miscellaneous receipts an amount equal to the amount of the un
obligated balance remaining in the Fund at the close of business on September 30
 of the preceding year minus any part of such balance that the Secretary determi
nes is necessary in order to enable the Secretary to defray, during the fiscal y
ear in which the deposit is made, the expenses, payments, and costs described in
 paragraph (3).'.
 (d) TRANSFER TO FUND-
 (1) AMOUNT TO BE TRANSFERRED- The Secretary of the Treasury shall tr
ansfer $25,000,000 from the Department of Veterans Affairs Loan Guaranty Revolvi
ng Fund to the Department of Veterans Affairs Medical-Care Cost Recovery Fund es
tablished by section 629(g) of title 38, United States Code (as amended by subse
ction (c)). The amount so transferred shall be available until the end of Septem
ber 30, 1991, for the support of the equivalent of 800 full-time employees and o
ther expenses described in paragraph (3) of such section.
 (2) REIMBURSEMENT OF LOAN GUARANTY REVOLVING FUND- Notwithstanding s
ection 629(g) of title 38, United States Code (as amended by subsection (c)), th
e first $25,000,000 recovered or collected by the Department of Veterans Affairs
 during fiscal year 1991 as a result of third-party medical recovery activities 
shall be credited to the Department of Veterans Affairs Loan Guaranty Revolving 
Fund.
 (3) THIRD-PARTY MEDICAL RECOVERY ACTIVITIES DEFINED- For the purpose
s of this subsection, the term `third-party medical recovery activities' means r
ecovery and collection activities carried out under section 629 of title 38, Uni
ted States Code.
 (e) EFFECTIVE DATE- The amendments made by this section shall take effec
t as of October 1, 1990.
SEC. 8012. COPAYMENT FOR MEDICATIONS.
 (a) COPAYMENT REQUIRED- (1) Subchapter III of chapter 17 of title 38, Un
ited States Code, is amended by inserting after section 622 the following new se
ction:
`Sec. 622A. Copayment for medications
 `(a)(1) Subject to paragraph (2), the Secretary shall require a veteran 
(other than a veteran with a service-connected disability rated 50 percent or mo
re) to pay the United States $2 for each 30-day supply of medication furnished s
uch veteran under this chapter on an outpatient basis for the treatment of a non
-service-connected disability or condition. If the amount supplied is less than 
a 30-day supply, the amount of the charge may not be reduced.
 `(2) The Secretary may not require a veteran to pay an amount in excess 
of the cost to the Secretary for medication described in paragraph (1).
 `(b) Amounts collected under this section shall be deposited in the Depa
rtment of Veterans Affairs Medical-Care Cost Recovery Fund.
 `(c) The provisions of subsection (a) expire on September 30, 1991.'.
 (2) The table of sections at the beginning of such chapter is amended by
 inserting after the item relating to section 622 the following new item:
`622A. Copayment for medications.'.
 (b) EFFECTIVE DATE- The amendments made by subsection (a) shall take eff
ect with respect to medication furnished to a veteran after October 31, 1990, or
 the date of the enactment of this Act, whichever is later.
SEC. 8013. MODIFICATION OF HEALTH-CARE CATEGORIES AND COPAYMENTS.
 (a) INPATIENT CARE- (1) Subsection (a) of section 610 of title 38, Unite
d States Code, is amended--
 (A) in paragraph (1)(I), by striking out `622(a)(1)' and inserting i
n lieu thereof `622(a)'; and
 (B) by striking out paragraph (2) and inserting in lieu thereof the 
following:
 `(2) In the case of a veteran who is not described in paragraph (1) of t
his subsection, the Secretary may, to the extent resources and facilities are av
ailable, furnish hospital care and nursing home care to a veteran which the Secr
etary determines is needed for a nonservice-connected disability, subject to the
 provisions of subsection (f) of this section.'.
 (2) Subsection (f) of such section is amended--
 (A) by striking out paragraphs (1) and (2) and inserting in lieu the
reof the following:
 `(f)(1) The Secretary may not furnish hospital care or nursing home care
 under this section to a veteran who is eligible for such care under subsection 
(a)(2) of this section unless the veteran agrees to pay to the United States the
 applicable amount determined under paragraph (2) of this subsection.
 `(2) A veteran who is furnished hospital care or nur