Summary: H.R.4680 — 106th Congress (1999-2000)All Information (Except Text)

Bill summaries are authored by CRS.

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Passed House amended (06/28/2000)

Medicare Rx 2000 Act - Title I: Medicare Prescription Drug Benefit - Amends title XVIII (Medicare) of the Social Security Act (SSA) to add a new part D (Voluntary Prescription Drug Benefit Program) to entitle each individual enrolled under Medicare part B (Supplementary Medical Insurance) to obtain qualified prescription drug coverage as outlined. Sets forth general election procedures.

(Sec. 101) Prohibits an individual eligible to elect qualified prescription drug coverage under a prescription drug plan or under a Medicare+Choice (Medicare part C) plan from being denied enrollment based on any health status-related factor under the Public Health Service Act or under any other factor.

Extends the same prohibition to the case of an individual who maintains continuous prescription drug coverage since first qualifying to elect it, and includes any limitation or conditioning of coverage, or any increased premium based on any such health status-related factor.

Allows a prescription drug plan (PDP) sponsor or Medicare+Choice organization, in the case of an individual who does not maintain such continuous prescription drug coverage, to increase the otherwise applicable premium, or to impose a pre-existing condition exclusion, with respect to qualified prescription drug coverage in a manner that reflects additional actuarial risk involved.

Sets forth requirements for qualified prescription drug coverage, standard coverage, and alternative coverage.

Directs the Medicare Policy Advisory Board to provide for a study on removing an exclusion from coverage for agents used for weight loss in the case of morbidly obese individual.

Outlines requirements for access to negotiated prices, actuarial valuation and determination of annual percentage increases, and protections for individuals eligible to enroll under a qualified PDP, such as guaranteed issue, community-related premiums, and nondiscrimination.

Sets out requirements for PDP sponsors as well as financial solvency and capital adequacy standards for non-licensed PDP sponsors. Directs the Medicare Benefits Administrator to establish by regulation other standards for PDP sponsors and plans.

Requires each PDP sponsor to provide that each pharmacy or other dispenser that arranges for the dispensing of a covered outpatient drug to inform the beneficiary at the time of purchase of any differential between the price of the prescribed drug to the enrollee and the price of the lowest cost generic drug that is therapeutically and pharmaceutically equivalent and bioequivalent.

Directs the Medicare Benefits Administrator to: (1) establish a process for the selection of the prescription drug plan or Medicare+Choice plan which offers qualified prescription drug coverage; and (2) assure that each individual enrolled under part B has available a choice of enrollment in at least two qualifying plans in the area in which the individual resides, at least one of which is a prescription drug plan. Provides that the requirement of such assurance is not satisfied with respect to an area if only one PDP sponsor or Medicare+Choice organization offers all the qualifying plans in the area.

Grants the Medicare Benefits Administrator the same authority to negotiate terms and conditions of prescription drug plans as the Director of the Office of Personnel Management with respect to health benefits plans for Federal employees.

Creates within the Federal Supplementary Medical Insurance Trust Fund under Medicare part B (Supplementary Medical Insurance) the Medicare Prescription Drug Account for subsidy-related and other payments under new part D. Authorizes appropriations.

(Sec. 102) Amends SSA title XVIII part C to provide for prescription drug benefits by Medicare+Choice organizations, including premium and cost-sharing subsidies for low-income enrollees, and reinsurance subsidy payments for Medicare+Choice organizations.

(Sec. 103) Amends SSA title XIX (Medicaid) to: (1) require State Medicaid plans to provide for making eligibility determinations for premium and cost-sharing subsidies with regard to the Medicare prescription drug benefit for low-income Medicare beneficiaries; (2) provide for phased-in Federal assumption of Medicaid prescription drug costs for dually-eligible Medicare and Medicaid beneficiaries; (3) require continued Medicaid payment for such an individual to the extent payment is not made under the PDP or the Medicare+Choice plan selected by the individual; and (5) provide for Medicaid prescription drug coverage by territories.

(Sec. 104) Prescribes conditions and limitations for prescription drug coverage by new Medicare supplemental (Medigap) policies.

(Sec. 105) Directs the Administrator of the Medicare Benefits Administration to conduct a demonstration project to demonstrate the impact on costs and health outcomes of applying disease management to Medicare beneficiaries with diagnosed, advanced-stage congestive heart failures, diabetes, or coronary heart disease.

Title II: Modernization of Administration of Medicare - Subtitle A: Medicare Benefits Administration - Amends SSA title XVIII to establish within the Department of Health and Human Services the Medicare Benefits Administration, headed by an Administrator charged with carrying out Medicare parts C and D.

(Sec. 201) Prohibits the Medicare Benefits Administrator, in carrying out duties with respect to the provision of qualified prescription drug coverage to Medicare beneficiaries, from: (1) requiring a particular formulary or instituting a price structure for the reimbursement of covered outpatient drugs; (2) interfering in any way with negotiations between PDP sponsors and Medicare+Choice organizations and drug manufacturers, wholesalers, or other suppliers of covered outpatient drugs; and (3) otherwise interfering with the competitive nature of providing such coverage through such sponsors and organizations.

Directs the Secretary to establish within the Medicare Benefits Administration an Office of Beneficiary Assistance to carry out functions relating to Medicare beneficiaries, including benefit eligibility determinations and dissemination of information on benefits and appeals rights.

Establishes within the Office a Medicare Ombudsman to: (1) receive complaints, grievances, and requests for information submitted by a Medicare beneficiary concerning any aspect of the Medicare program; (2) provide assistance with respect to such complaints, grievances, and requests; and (3) coordinate with State medical Ombudsman programs, and with State-and community-based consumer organizations, to provide information and conduct outreach to educate Medicare beneficiaries with respect to the manner for resolving or avoiding Medicare problems.

Establishes within the Medicare Benefits Administration the Medicare Policy Advisory Board.

Authorizes appropriations.

Subtitle B: Oversight of Financial Sustainability of the Medicare Program - Amends SSA title XVIII part A (Hospital Insurance) with regard to the Federal Hospital Insurance Trust Fund to require its Board of Trustees to report to Congress on the operation and status of such Trust Fund and the Federal Supplementary Medical Insurance Trust Fund, including the total amounts obligated during the preceding fiscal year from the General Revenues of the Treasury to the Trust Funds for Medicare payments and ten year and 50-year projections of such required benefit obligations.

(Sec. 211) Expresses the sense of Congress that the committees of jurisdiction shall hold hearings on such reports.

Subtitle C: Changes in Medicare Coverage and Appeals Process - Amends Medicare part D to revise the Medicare appeals process with respect to: (1) a time limit for appeals; (2) expedited reconsideration of an initial determination; (3) local coverage determinations; (4) Internet publication of hearing decisions by the Secretary; and (5) conduct of reconsiderations by independent contractors.

(Sec. 222) Limits the liability of an individual for repayment of claims incorrectly paid by the Secretary. Prescribes a procedure for waiver of such liability protection and the individual's right to an appeal. Requires inclusion in the explanation of Medicare benefits of beneficiary liability information, including a specified toll-free telephone number.

(Sec. 223) Amends SSA title XI with respect to civil money penalties for improperly filed claims, including offers or transfers of remuneration to influence a beneficiary's choice of provider, practitioner, or item or service supplier. Revises the exclusion from the meaning of remuneration of any waiver of coinsurance and deductible amounts to: (1) make the current conditions for such an exclusion alternative instead of collectively necessary; and (2) add as a new alternative condition for exclusion that such a waiver is offered as a part of a supplemental insurance policy or retiree health plan.

(Sec. 224) Amends SSA title D to repeal the Secretary's authority to review, reverse, affirm, or modify decisions of the Provider Reimbursement Review Board.

Title III: Medicare+Choice Reforms; Preservation of Medicare Part B Drug Benefit - Subtitle A: Medicare+Choice Reforms - Amends Medicare part C with respect to Federal payments to Medicare+Choice organizations to: (1) reduce the national per capita Medicare+Choice growth percentages for 2001 and 2002; (2) remove application of the budget neutrality factor beginning in 2002 with respect to calculation of both the blended and the national standardized annual Medicare+Choice capitation rates; (3) specify $450 as the minimum payment amount for 2002; (4) allow a Medicare+Choice organization to elect to apply an area-specific percentage of 50 percent and a national percentage of 50 percent for 2002 (currently, only after 2002); (5) increase from 102 percent to 102.5 percent the minimum percentage increase for Medicare+Choice payment areas with only one, or no, Medicare+Choice contracts entered into as of July 1 before the beginning of the year during 2002 through 2005; (6) permit higher annual rates through negotiation between an Medicare+Choice organization and the Medicare Benefits Administration for each year beginning with 2004 in Medicare+Choice payment areas for which the Medicare+Choice capitation rate would otherwise be less than the U.S. per capita cost; and (7) phase-in over a ten-year period beginning in 2004 a risk adjustment methodology based on data from all settings.

Subtitle B: Preservation of Medicare Coverage of Drugs and Biologicals - Amends SSA title XVIII part D (Miscellaneous Provisions) with regard to coverage of drugs and biologicals under Medicare part B to modify the specification of drugs and biologicals which cannot be self-administered to drugs and biologicals which are not usually self-administered by the patient.

(Sec. 312) Directs the Comptroller General to conduct and report to Congress on a study that shall: (1) quantify the extent to which reimbursement for drugs and biologicals under the current Medicare payment methodology overpays compared to the average acquisition cost paid by physicians or other suppliers of drugs; (2) assess the consequences of changing the current Medicare payment methodology to one based on the average acquisition cost of the drugs; (3) review the extent to which other payment methodologies under Medicare part B, if any, intended to reimburse physician and other suppliers of drugs and biologicals under the current methodology for costs incurred in handling, storing, and administering such drugs and biologicals are inadequate to cover such costs, and whether an additional payment would be required to cover these costs under the average acquisition cost methodology; and (4) assess possible means by which a payment method based on average acquisition cost could be implemented.