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114th Congress    }                                  {   Rept. 114-751
                        HOUSE OF REPRESENTATIVES
 2d Session       }                                  {          Part 1

======================================================================



 
        EXPANDING SENIORS RECEIVING DIALYSIS CHOICE ACT OF 2016

                                _______
                                

 September 19, 2016.--Committed to the Committee of the Whole House on 
            the State of the Union and ordered to be printed

                                _______
                                

Mr. Brady of Texas, from the Committee on Ways and Means, submitted the 
                               following

                              R E P O R T

                        [To accompany H.R. 5659]

      [Including cost estimate of the Congressional Budget Office]

    The Committee on Ways and Means, to whom was referred the 
bill (H.R. 5659) to amend title XVIII of the Social Security 
Act with respect to expanding Medicare Advantage coverage for 
individuals with end-stage renal disease (ESRD), having 
considered the same, report favorably thereon with an amendment 
and recommend that the bill as amended do pass.

                                CONTENTS

                                                                   Page
 I. SUMMARY AND BACKGROUND............................................3
          A. Purpose and Summary.................................     3
          B. Background and Need for Legislation.................     3
          C. Legislative History.................................     3
II. EXPLANATION OF THE BILL...........................................4
III.VOTES OF THE COMMITTEE............................................5

IV. BUDGET EFFECTS OF THE BILL........................................5
          A. Committee Estimate of Budgetary Effects.............     5
          B. Statement Regarding New Budget Authority and Tax 
              Expenditures Budget Authority......................     5
          C. Cost Estimate Prepared by the Congressional Budget 
              Office.............................................     5
 V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE........7
          A. Committee Oversight Findings and Recommendations....     7
          B. Statement of General Performance Goals and 
              Objectives.........................................     7
          C. Information Relating to Unfunded Mandates...........     7
          D. Congressional Earmarks, Limited Tax Benefits, and 
              Limited Tariff Benefits............................     7
          E. Duplication of Federal Programs.....................     7
          F. Disclosure of Directed Rule Makings.................     7
VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED.............8
          A. Text of Existing Law Amended or Repealed by the 
              Bill, as Reported..................................     8
          B. Changes in Existing Law Proposed by the Bill, as 
              Reported...........................................    79

    The amendment is as follows:
  Strike all after the enacting clause and insert the 
following:

SECTION 1. SHORT TITLE.

  This Act may be cited as the ``Expanding Seniors Receiving Dialysis 
Choice Act of 2016'' or as the ``ESRD Choice Act of 2016''.

SEC. 2. EXPANDING MEDICARE ADVANTAGE COVERAGE FOR INDIVIDUALS WITH END-
                    STAGE RENAL DISEASE (ESRD).

  (a) Expanded MA Eligibility.--
          (1) In general.--Section 1851(a)(3) of the Social Security 
        Act (42 U.S.C. 1395w-21(a)(3)) is amended--
                  (A) by striking subparagraph (B); and
                  (B) by striking ``eligible individual'' and all that 
                follows through ``In this title, subject to 
                subparagraph (B),'' and inserting ``eligible 
                individual.--In this title,''.
          (2) Conforming amendments.--
                  (A) Section 1852(b)(1) of the Social Security Act (42 
                U.S.C. 1395w-22(b)(1)) is amended--
                          (i) by striking subparagraph (B); and
                          (ii) by striking ``Beneficiaries'' and all 
                        that follows through ``A Medicare+Choice 
                        organization'' and inserting ``Beneficiaries.--
                        A Medicare Advantage organization''.
                  (B) Section 1859(b)(6) of the Social Security Act (42 
                U.S.C. 1395w-28(b)(6)) is amended by striking ``may 
                waive'' and all that follows through ``subparagraph 
                and''.
  (b) Excluding Costs for Kidney Acquisitions From MA Benchmark.--
Section 1853 of the Social Security Act (42 U.S.C. 1395w-23) is 
amended--
          (1) in subsection (k)--
                  (A) in paragraph (1)--
                          (i) in the matter preceding subparagraph (A), 
                        by striking ``paragraphs (2) and (4)'' and 
                        inserting ``paragraphs (2), (4), and (5)''; and
                          (ii) in subparagraph (B)(i), by striking 
                        ``paragraphs (2) and (4)'' and inserting 
                        ``paragraphs (2), (4), and (5)''; and
                  (B) by adding at the end the following new paragraph:
          ``(5) Exclusion of costs for kidney acquisitions from 
        capitation rates.--After determining the applicable amount for 
        an area for a year under paragraph (1) (beginning with 2019), 
        the Secretary shall adjust such applicable amount to exclude 
        from such applicable amount the Secretary's estimate of the 
        standardized costs for payments for organ acquisitions for 
        kidney transplants covered under this title (including expenses 
        covered under section 1881(d)) in the area for the year.''; and
          (2) in subsection (n)(2)--
                  (A) in subparagraph (A)(i), by inserting ``and, for 
                2019 and subsequent years, the exclusion of payments 
                for organ acquisitions for kidney transplants from the 
                capitation rate as described in subsection (k)(5)'' 
                before the semicolon at the end;
                  (B) in subparagraph (E), in the matter preceding 
                clause (i), by striking ``subparagraph (F)'' and 
                inserting ``subparagraphs (F) and (G)''; and
                  (C) by adding at the end the following new 
                subparagraph:
                  ``(G) Application of kidney acquisitions 
                adjustment.--The base payment amount specified in 
                subparagraph (E) for a year (beginning with 2019) shall 
                be adjusted in the same manner under paragraph (5) of 
                subsection (k) as the applicable amount is adjusted 
                under such subsection.''.
  (c) FFS Coverage of Kidney Acquisitions.--
          (1) In general.--Section 1852(a)(1)(B)(i) of the Social 
        Security Act (42 U.S.C. 1395w-22(a)(1)(B)(i)) is amended by 
        inserting ``or coverage for organ acquisitions for kidney 
        transplants, including as covered under section 1881(d)'' after 
        ``hospice care''.
          (2) Conforming amendment.--Section 1851(i) of the Social 
        Security Act (42 U.S.C. 1395w-21(i)) is amended by adding at 
        the end the following new paragraph:
          ``(3) FFS payment for expenses for kidney acquisitions.--
        Paragraphs (1) and (2) do not apply with respect to expenses 
        for organ acquisitions for kidney transplants described in 
        section 1852(a)(1)(B)(i).''.
  (d) Sense of Congress Regarding Application of Appropriate Medicare 
Advantage Risk Adjustment for Payment for Increased ESRD Enrollees.--It 
is the sense of Congress that in implementing the policies under this 
section, the Centers for Medicare & Medicaid Services should provide, 
in an accurate and transparent manner, for risk adjustment to payment 
under the Medicare Advantage program to account for the increased 
enrollment in Medicare Advantage plans of individuals with end-stage 
renal disease.
  (e) Expanded MA Education.--Section 1851(d)(2)(A)(iii) of the Social 
Security Act (42 U.S.C. 1395w-21(d)(2)(A)(iii)) is amended by inserting 
before the period at the end the following: ``, including any 
additional information that individuals determined to have end-stage 
renal disease may need to make informed decisions with respect to such 
an election''.
  (f) Report.--Not later than April 1, 2022, the Administrator of the 
Centers for Medicare & Medicaid Services shall submit to Congress a 
report on the impact of the amendments made by this section on spending 
under the traditional Medicare fee-for-service program under parts A 
and B of title XVIII of the Social Security Act as well as on spending 
under parts C and D of such title. The report shall include an 
assessment of the risk adjustment payment methodologies under such 
parts C and D and their adequacy with respect to individuals with end-
stage renal disease and such recommendations as the Administrator deems 
appropriate.
  (g) Effective Date.--The amendments made by this section shall apply 
to plans years beginning on or after January 1, 2020.

                       I. SUMMARY AND BACKGROUND


                         A. Purpose and Summary

    The bill, H.R. 5659, the ``Expanding Senior Receiving 
Dialysis (ESRD) Choice Act of 2016'' as ordered reported by the 
Committee on Ways and Means on July 13, 2016, amends title 
XVIII of the Social Security Act with respect to expanding 
Medicare Advantage (MA) coverage for individuals with end-stage 
renal disease (ESRD).

                 B. Background and Need for Legislation

    On July 7, 2016, Representative Smith (R-MO), 
Representative Lewis (D-GA), Representative Bilirakis (R-FL), 
Representative Marino (R-PA), and Representative Schrader (D-
OR) introduced H.R. 5659, the ESRD Choice Act of 2016. More 
than 640,000 Americans live with kidney failure and are among 
the most vulnerable Medicare beneficiaries. The only real 
treatments available are kidney transplants, or renal dialysis. 
Most individuals with ESRD receive dialysis due to the limited 
number of kidneys available for transplantation. The majority 
of people with kidney failure rely on Medicare for their 
dialysis treatments. This legislation will allow beneficiaries 
receiving dialysis access to an MA plan, which has proven 
valuable for patients that suffer from multiple chronic 
conditions.
    Since 2000, the Medicare Payment Advisory Commission has 
regularly advised Congress to eliminate the unfair MA 
enrollment prohibition. The Committee believes that the 
expansion of MA to be a whole benefit is an important step 
towards achieving a high quality sustainable Medicare program.

                         C. Legislative History


Background

    H.R. 5659 was introduced on July 7, 2016, and was referred 
to the Committee on Ways and Means and additionally to the 
Committee on Energy and Commerce.

Committee Hearings

    On July 24, 2014, the Committee on Ways and Means 
Subcommittee on Health held a hearing on the status of the MA 
program.
    On March 16, 2016, the Committee on Ways and Means 
Subcommittee on Health held a hearing on Preserving and 
Strengthening Medicare, including the MA program.

Committee Action

    The Committee on Ways and Means marked up H.R. 5659, the 
ESRD Choice Act of 2016, on July 13, 2016, and ordered the bill 
favorably reported to the House of Representatives as amended 
by a voice vote (with a quorum being present).

                      II. EXPLANATION OF THE BILL


   ``Expanding Seniors Receiving Dialysis (ESRD) Choice Act of 2016''


                              PRESENT LAW

    Current law does not allow beneficiaries that suffer from 
kidney failure prior to choosing a managed care plan under the 
MA program to leave fee-for-service and choose an MA plan.

                       EXPLANATION OF PROVISIONS

    This legislation would remove the current restrictions on 
ESRD beneficiaries that prevent them from switching into a 
managed care MA plan by lifting the statutory restriction on 
Medicare beneficiaries who suffer from end-stage renal disease 
from enrolling in an MA plan.
    The legislation removes the current financial add-on that 
MA plans receive per member per month in the benchmark that 
currently exists to account for costs associated with kidney 
acquisition in the case of a kidney transplant. Consequently, 
the legislation removes the kidney acquisition costs from MA 
altogether, streamlining the transplant process across 
Medicare. Additionally, it requires the Centers for Medicare 
and Medicaid Services (CMS) to provide a report to Congress by 
2022 regarding the effects of this legislation on spending and 
the risk adjusted payments to MA plans, including 
recommendations as deemed appropriate by the Administrator.
    The amendment in the nature of a substitute added a sense 
of Congress that CMS properly risk adjust payments to plans, in 
an accurate and transparent manner, for the additional 
beneficiaries through the implementation of this legislation.

                           REASONS FOR CHANGE

    Currently, more than 640,000 Americans live with kidney 
failure, known as ESRD. ESRD beneficiaries are among the most 
vulnerable and kidney failure affects Americans of all ages. 
The only real treatments available are kidney transplants or 
renal dialysis, with most individuals receiving dialysis. The 
overwhelming majority of people with kidney failure, regardless 
of their age, rely on Medicare for their life sustaining 
dialysis treatments.
    MA offers better coordinated and integrated care, 
flexibility, and financial protections for beneficiaries, but 
ESRD patients are the only group of beneficiaries specifically 
denied enrollment in MA plans. MA includes integrated care 
models that allow plans the flexibility to distribute clinical 
resources to address unique patient needs. Integrated managed 
care models have shown to be valuable tools for patients that 
suffer from multiple chronic conditions. Low-income Medicare 
beneficiaries also enjoy the benefits of MA's maximum out-of-
pocket cost that protects beneficiaries from catastrophic 
health care costs.

                             EFFECTIVE DATE

    The bill would take effect beginning in 2020.

                      III. VOTES OF THE COMMITTEE

    In compliance with clause 3(b) of rule XIII of the Rules of 
the House of Representatives, the following statement is made 
concerning the vote of the Committee on Ways and Means in its 
consideration of H.R. 5659, the ``Expanding Seniors Receiving 
Dialysis Choice Act of 2016,'' on July 13, 2016.
    The bill, H.R. 5659, was ordered favorably reported as 
amended by voice vote (with a quorum being present).

                     IV. BUDGET EFFECTS OF THE BILL


               A. Committee Estimate of Budgetary Effects

    In compliance with clause 3(d) of rule XIII of the Rules of 
the House of Representatives, the following statement is made 
concerning the effects on the budget of the bill, H.R. 5659, as 
reported. The Committee agrees with the estimate prepared by 
the Congressional Budget Office (CBO), which is included below.

B. Statement Regarding New Budget Authority and Tax Expenditures Budget 
                               Authority

    In compliance with clause 3(c)(2) of rule XIII of the Rules 
of the House of Representatives, the Committee states that the 
bill involves no new or increased budget authority. The 
Committee states further that the bill involves no new or 
increased tax expenditures.

      C. Cost Estimate Prepared by the Congressional Budget Office

    In compliance with clause 3(c)(3) of rule XIII of the Rules 
of the House of Representatives, requiring a cost estimate 
prepared by the CBO, the following statement by CBO is 
provided.

                                     U.S. Congress,
                               Congressional Budget Office,
                                     Washington, DC, July 21, 2016.
Hon. Kevin Brady,
Chairman, Committee on Ways and Means,
House of Representatives, Washington, DC.
    Dear Mr. Chairman: The Congressional Budget Office has 
prepared the enclosed cost estimate for H.R. 5659, the 
Expanding Seniors Receiving Dialysis Choice Act of 2016.
    If you wish further details on this estimate, we will be 
pleased to provide them. The CBO staff contact is Paul Masi.
            Sincerely,
                                                        Keith Hall.
    Enclosure.

H.R. 5659--Expanding Seniors Receiving Dialysis Choice Act of 2016

    Under current law, beneficiaries who develop End-Stage 
Renal Disease (ESRD) while enrolled in a Medicare Advantage 
(MA) plan may remain in that plan. However, Medicare 
beneficiaries are prohibited from enrolling in an MA plan after 
they have developed ESRD, and must stay in the fee-for-service 
portion of the Medicare program. H.R. 5659 would eliminate that 
prohibition, beginning in January 2020.
    For beneficiaries with ESRD, Medicare currently pays MA 
plans an amount equal to the statewide average cost of treating 
such beneficiaries in the fee-for-service portion of Medicare, 
and would continue to do so under H.R. 5659. That methodology 
is designed to pay similar amounts regardless of whether 
beneficiaries are in fee-for-service or an MA plan. In CBO's 
judgement, that system, on average, is effective at achieving 
parity in payment between the two sectors. For beneficiaries 
who would newly enroll in MA plans under H.R. 5659, CBO 
estimates that, on average, payments to MA plans would be equal 
to the spending that otherwise would have occurred for those 
beneficiaries in the fee-for-service portion of Medicare. Thus, 
the budgetary effect of enacting this provision would be 
negligible.
    The bill would also transfer responsibility for the costs 
of acquiring organs for kidney transplants from MA plans to the 
fee-for-service portion of Medicare. Payments to MA plans would 
be adjusted to reflect that shift. Thus, CBO estimates that 
this provision would not have a significant effect on federal 
spending.
    Because enacting H.R. 5659 would affect direct spending, 
pay-as-you-go procedures apply; however CBO estimates that 
effects would be negligible over the 2017-2026 period. CBO 
estimates that enacting H.R. 5659 would not increase net direct 
spending or on-budget deficits in any of the four consecutive 
10-year periods beginning in 2027.
    H.R. 5659 contains no intergovernmental or private-sector 
mandates as defined in the Unfunded Mandates Reform Act.
    The CBO staff contact for this estimate is Paul Masi. The 
estimate was approved by Holly Harvey, Deputy Assistant 
Director for Budget Analysis.

     V. OTHER MATTERS TO BE DISCUSSED UNDER THE RULES OF THE HOUSE


           A. Committee Oversight Findings and Recommendation

    With respect to clause 3(c)(1) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
findings and recommendations of the Committee, based on 
oversight activities under clause 2(b)(1) of rule X of the 
Rules of the House of Representatives, are incorporated in the 
descriptive portions of this report.

        B. Statement of General Performance Goals and Objectives

    With respect to clause 3(c)(4) of rule XIII of the Rules of 
the House of Representatives, the Committee advises that the 
bill contains no measure that authorizes funding, so no 
statement of general performance goals and objectives for which 
any measure authorizes funding is required.

              C. Information Relating to Unfunded Mandates

    This information is provided in accordance with section 423 
of the Unfunded Mandates Reform Act of 1995 (Pub. L. No. 104-
4).
    The Committee has determined that the bill does not contain 
Federal mandates on the private sector. The Committee has 
determined that the bill does not impose a Federal 
intergovernmental mandate on State, local, or tribal 
governments.

  D. Congressional Earmarks, Limited Tax Benefits, and Limited Tariff 
                                Benefits

    With respect to clause 9 of rule XXI of the Rules of the 
House of Representatives, the Committee has carefully reviewed 
the provisions of the bill, and states that the provisions of 
the bill do not contain any congressional earmarks, limited tax 
benefits, or limited tariff benefits within the meaning of the 
rule.

                   E. Duplication of Federal Programs

    In compliance with Sec. 3(g)(2) of H. Res. 5 (114th 
Congress), the Committee states that no provision of the bill 
establishes or reauthorizes: (1) a program of the Federal 
Government known to be duplicative of another Federal program; 
(2) a program included in any report from the Government 
Accountability Office to Congress pursuant to section 21 of 
Public Law 111-139; or (3) a program related to a program 
identified in the most recent Catalog of Federal Domestic 
Assistance, published pursuant to the Federal Program 
Information Act (Pub. L. No. 95-220, as amended by Pub. L. No. 
98-169).

                 F. Disclosure of Directed Rule Makings

    In compliance with Sec. 3(i) of H. Res. 5 (114th Congress), 
the following statement is made concerning directed rule 
makings: The Committee estimates that the bill requires no 
directed rule makings within the meaning of such section.

       VI. CHANGES IN EXISTING LAW MADE BY THE BILL, AS REPORTED


  A. Text of Existing Law Amended or Repealed by the Bill, as Reported

    In compliance with clause 3(e)(1)(A) of rule XIII of the 
Rules of the House of Representatives, the text of each section 
proposed to be amended or repealed by the bill, as reported, is 
shown below:

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e)(1)(A) of rule XIII of the 
Rules of the House of Representatives, the text of each section 
proposed to be amended or repealed by the bill, as reported, is 
shown below:

                          SOCIAL SECURITY ACT




           *       *       *       *       *       *       *
TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND DISABLED

           *       *       *       *       *       *       *



                    Part C--Medicare+Choice Program


                 eligibility, election, and enrollment

  Sec. 1851. (a) Choice of Medicare Benefits Through 
Medicare+Choice Plans.--
          (1) In general.--Subject to the provisions of this 
        section, each Medicare+Choice eligible individual (as 
        defined in paragraph (3)) is entitled to elect to 
        receive benefits (other than qualified prescription 
        drug benefits) under this title--
                  (A) through the original medicare fee-for-
                service program under parts A and B, or
                  (B) through enrollment in a Medicare+Choice 
                plan under this part,
        and may elect qualified prescription drug coverage in 
        accordance with section 1860D-1.
          (2) Types of medicare+choice plans that may be 
        available.--A Medicare+Choice plan may be any of the 
        following types of plans of health insurance:
                  (A) Coordinated care plans (including 
                regional plans).--
                          (i) In general.--Coordinated care 
                        plans which provide health care 
                        services, including but not limited to 
                        health maintenance organization plans 
                        (with or without point of service 
                        options), plans offered by provider-
                        sponsored organizations (as defined in 
                        section 1855(d)), and regional or local 
                        preferred provider organization plans 
                        (including MA regional plans).
                          (ii) Specialized ma plans for special 
                        needs individuals.--Specialized MA 
                        plans for special needs individuals (as 
                        defined in section 1859(b)(6)) may be 
                        any type of coordinated care plan.
                  (B) Combination of msa plan and contributions 
                to medicare+choice msa.--An MSA plan, as 
                defined in section 1859(b)(3), and a 
                contribution into a Medicare+Choice medical 
                savings account (MSA).
                  (C) Private fee-for-service plans.--A 
                Medicare+Choice private fee-for-service plan, 
                as defined in section 1859(b)(2).
          (3) Medicare+choice eligible individual.--
                  (A)  In general.--In this title, subject to 
                subparagraph (B), the term ``Medicare+Choice 
                eligible individual'' means an individual who 
                is entitled to benefits under part A and 
                enrolled under part B.
                  (B) Special rule for end-stage renal 
                disease.--Such term shall not include an 
                individual medically determined to have end-
                stage renal disease, except that--
                          (i) an individual who develops end-
                        stage renal disease while enrolled in a 
                        Medicare+Choice plan may continue to be 
                        enrolled in that plan; and
                          (ii) in the case of such an 
                        individual who is enrolled in a 
                        Medicare+Choice plan under clause (i) 
                        (or subsequently under this clause), if 
                        the enrollment is discontinued under 
                        circumstances described in subsection 
                        (e)(4)(A), then the individual will be 
                        treated as a ``Medicare+Choice eligible 
                        individual'' for purposes of electing 
                        to continue enrollment in another 
                        Medicare+Choice plan.
                An individual who develops end-stage renal 
                disease while enrolled in a reasonable cost 
                reimbursement contract under section 1876(h) 
                shall be treated as an MA eligible individual 
                for purposes of applying the deemed enrollment 
                under subsection (c)(4).
  (b) Special Rules.--
          (1) Residence requirement.--
                  (A) In general.--Except as the Secretary may 
                otherwise provide and except as provided in 
                subparagraph (C), an individual is eligible to 
                elect a Medicare+Choice plan offered by a 
                Medicare+Choice organization only if the plan 
                serves the geographic area in which the 
                individual resides.
                  (B) Continuation of enrollment permitted.--
                Pursuant to rules specified by the Secretary, 
                the Secretary shall provide thatan MA local 
                plan may offer to all individuals residing in a 
                geographic area the option to continue 
                enrollment in the plan, notwithstanding that 
                the individual no longer resides in the service 
                area of the plan, so long as the plan provides 
                that individuals exercising this option have, 
                as part of the benefits under the original 
                medicare fee-for-service program option, 
                reasonable access within that geographic area 
                to the full range of basic benefits, subject to 
                reasonable cost sharing liability in obtaining 
                such benefits.
                  (C) Continuation of enrollment permitted 
                where service changed.--Notwithstanding 
                subparagraph (A) and in addition to 
                subparagraph (B), if a Medicare+Choice 
                organization eliminates from its service area a 
                Medicare+Choice payment area that was 
                previously within its service area, the 
                organization may elect to offer individuals 
                residing in all or portions of the affected 
                area who would otherwise be ineligible to 
                continue enrollment the option to continue 
                enrollment in an MA local plan it offers so 
                long as--
                          (i) the enrollee agrees to receive 
                        the full range of basic benefits 
                        (excluding emergency and urgently 
                        needed care) exclusively at facilities 
                        designated by the organization within 
                        the plan service area; and
                          (ii) there is no other 
                        Medicare+Choice plan offered in the 
                        area in which the enrollee resides at 
                        the time of the organization's 
                        election.
          (2) Special rule for certain individuals covered 
        under fehbp or eligible for veterans or military health 
        benefits, veterans.--
                  (A) FEHBP.--An individual who is enrolled in 
                a health benefit plan under chapter 89 of title 
                5, United States Code, is not eligible to 
                enroll in an MSA plan until such time as the 
                Director of the Office of Management and Budget 
                certifies to the Secretary that the Office of 
                Personnel Management has adopted policies which 
                will ensure that the enrollment of such 
                individuals in such plans will not result in 
                increased expenditures for the Federal 
                Government for health benefit plans under such 
                chapter.
                  (B) VA and dod.--The Secretary may apply 
                rules similar to the rules described in 
                subparagraph (A) in the case of individuals who 
                are eligible for health care benefits under 
                chapter 55 of title 10, United States Code, or 
                under chapter 17 of title 38 of such Code.
          (3) Limitation on eligibility of qualified medicare 
        beneficiaries and other medicaid beneficiaries to 
        enroll in an msa plan.--An individual who is a 
        qualified medicare beneficiary (as defined in section 
        1905(p)(1)), a qualified disabled and working 
        individual (described in section 1905(s)), an 
        individual described in section 1902(a)(10)(E)(iii), or 
        otherwise entitled to medicare cost-sharing under a 
        State plan under title XIX is not eligible to enroll in 
        an MSA plan.
          (4) Coverage under msa plans.--
                  (A) In general.--Under rules established by 
                the Secretary, an individual is not eligible to 
                enroll (or continue enrollment) in an MSA plan 
                for a year unless the individual provides 
                assurances satisfactory to the Secretary that 
                the individual will reside in the United States 
                for at least 183 days during the year.
                  (B) Evaluation.--The Secretary shall 
                regularly evaluate the impact of permitting 
                enrollment in MSA plans under this part on 
                selection (including adverse selection), use of 
                preventive care, access to care, and the 
                financial status of the Trust Funds under this 
                title.
                  (C) Reports.--The Secretary shall submit to 
                Congress periodic reports on the numbers of 
                individuals enrolled in such plans and on the 
                evaluation being conducted under subparagraph 
                (B).
  (c) Process for Exercising Choice.--
          (1) In general.--The Secretary shall establish a 
        process through which elections described in subsection 
        (a) are made and changed, including the form and manner 
        in which such elections are made and changed. Subject 
        to paragraph (4), such elections shall be made or 
        changed only during coverage election periods specified 
        under subsection (e) and shall become effective as 
        provided in subsection (f).
          (2) Coordination through medicare+choice 
        organizations.--
                  (A) Enrollment.--Such process shall permit an 
                individual who wishes to elect a 
                Medicare+Choice plan offered by a 
                Medicare+Choice organization to make such 
                election through the filing of an appropriate 
                election form with the organization.
                  (B) Disenrollment.--Such process shall permit 
                an individual, who has elected a 
                Medicare+Choice plan offered by a 
                Medicare+Choice organization and who wishes to 
                terminate such election, to terminate such 
                election through the filing of an appropriate 
                election form with the organization.
          (3) Default.--
                  (A) Initial election.--
                          (i) In general.--Subject to clause 
                        (ii), an individual who fails to make 
                        an election during an initial election 
                        period under subsection (e)(1) is 
                        deemed to have chosen the original 
                        medicare fee-for-service program 
                        option.
                          (ii) Seamless continuation of 
                        coverage.--The Secretary may establish 
                        procedures under which an individual 
                        who is enrolled in a health plan (other 
                        than Medicare+Choice plan) offered by a 
                        Medicare+Choice organization at the 
                        time of the initial election period and 
                        who fails to elect to receive coverage 
                        other than through the organization is 
                        deemed to have elected the 
                        Medicare+Choice plan offered by the 
                        organization (or, if the organization 
                        offers more than one such plan, such 
                        plan or plans as the Secretary 
                        identifies under such procedures).
                  (B) Continuing periods.--An individual who 
                has made (or is deemed to have made) an 
                election under this section is considered to 
                have continued to make such election until such 
                time as--
                          (i) the individual changes the 
                        election under this section, or
                          (ii) the Medicare+Choice plan with 
                        respect to which such election is in 
                        effect is discontinued or, subject to 
                        subsection (b)(1)(B), no longer serves 
                        the area in which the individual 
                        resides.
          (4) Deemed enrollment relating to converted 
        reasonable cost reimbursement contracts.--
                  (A) In general.--On the first day of the 
                annual, coordinated election period under 
                subsection (e)(3) for plan years beginning on 
                or after January 1, 2017, an MA eligible 
                individual described in clause (i) or (ii) of 
                subparagraph (B) is deemed, unless the 
                individual elects otherwise, to have elected to 
                receive benefits under this title through an 
                applicable MA plan (and shall be enrolled in 
                such plan) beginning with such plan year, if--
                          (i) the individual is enrolled in a 
                        reasonable cost reimbursement contract 
                        under section 1876(h) in the previous 
                        plan year;
                          (ii) such reasonable cost 
                        reimbursement contract was extended or 
                        renewed for the last reasonable cost 
                        reimbursement contract year of the 
                        contract (as described in subclause (I) 
                        of section 1876(h)(5)(C)(iv)) pursuant 
                        to such section;
                          (iii) the eligible organization that 
                        is offering such reasonable cost 
                        reimbursement contract provided the 
                        notice described in subclause (III) of 
                        such section that the contract was to 
                        be converted;
                          (iv) the applicable MA plan--
                                  (I) is the plan that was 
                                converted from the reasonable 
                                cost reimbursement contract 
                                described in clause (iii);
                                  (II) is offered by the same 
                                entity (or an organization 
                                affiliated with such entity 
                                that has a common ownership 
                                interest of control) that 
                                entered into such contract; and
                                  (III) is offered in the 
                                service area where the 
                                individual resides;
                          (v) in the case of reasonable cost 
                        reimbursement contracts that provide 
                        coverage under parts A and B (and, to 
                        the extent the Secretary determines it 
                        to be feasible, contracts that provide 
                        only part B coverage), the difference 
                        between the estimated individual costs 
                        (as determined applicable by the 
                        Secretary) for the applicable MA plan 
                        and such costs for the predecessor cost 
                        plan does not exceed a threshold 
                        established by the Secretary; and
                          (vi) the applicable MA plan--
                                  (I) provides coverage for 
                                enrollees transitioning from 
                                the converted reasonable cost 
                                reimbursement contract to such 
                                plan to maintain current 
                                providers of services and 
                                suppliers and course of 
                                treatment at the time of 
                                enrollment for a period of at 
                                least 90 days after enrollment; 
                                and
                                  (II) during such period, pays 
                                such providers of services and 
                                suppliers for items and 
                                services furnished to the 
                                enrollee an amount that is not 
                                less than the amount of payment 
                                applicable for such items and 
                                services under the original 
                                Medicare fee-for-service 
                                program under parts A and B.
                  (B) MA eligible individuals described.--
                          (i) Without prescription drug 
                        coverage.--An MA eligible individual 
                        described in this clause, with respect 
                        to a plan year, is an MA eligible 
                        individual who is enrolled in a 
                        reasonable cost reimbursement contract 
                        under section 1876(h) in the previous 
                        plan year and who is not, for such 
                        previous plan year, enrolled in a 
                        prescription drug plan under part D, 
                        including coverage under section 1860D-
                        22.
                          (ii) With prescription drug 
                        coverage.--An MA eligible individual 
                        described in this clause, with respect 
                        to a plan year, is an MA eligible 
                        individual who is enrolled in a 
                        reasonable cost reimbursement contract 
                        under section 1876(h) in the previous 
                        plan year and who, for such previous 
                        plan year, is enrolled in a 
                        prescription drug plan under part D--
                                  (I) through such contract; or
                                  (II) through a prescription 
                                drug plan, if the sponsor of 
                                such plan is the same entity 
                                (or an organization affiliated 
                                with such entity) that entered 
                                into such contract.
                  (C) Applicable ma plan defined.--In this 
                paragraph, the term ``applicable MA plan'' 
                means, in the case of an individual described 
                in--
                          (i) subparagraph (B)(i), an MA plan 
                        that is not an MA-PD plan; and
                          (ii) subparagraph (B)(ii), an MA-PD 
                        plan.
                  (D) Identification and notification of deemed 
                individuals.--Not later than 45 days before the 
                first day of the annual, coordinated election 
                period under subsection (e)(3) for plan years 
                beginning on or after January 1, 2017, the 
                Secretary shall identify and notify the 
                individuals who will be subject to deemed 
                elections under subparagraph (A) on the first 
                day of such period.
  (d) Providing Information To Promote Informed Choice.--
          (1) In general.--The Secretary shall provide for 
        activities under this subsection to broadly disseminate 
        information to medicare beneficiaries (and prospective 
        medicare beneficiaries) on the coverage options 
        provided under this section in order to promote an 
        active, informed selection among such options.
          (2) Provision of notice.--
                  (A) Open season notification.--At least 15 
                days before the beginning of each annual, 
                coordinated election period (as defined in 
                subsection (e)(3)(B)), the Secretary shall mail 
                to each Medicare+Choice eligible individual 
                residing in an area the following:
                          (i) General information.--The general 
                        information described in paragraph (3).
                          (ii) List of plans and comparison of 
                        plan options.--A list identifying the 
                        Medicare+Choice plans that are (or will 
                        be) available to residents of the area 
                        and information described in paragraph 
                        (4) concerning such plans. Such 
                        information shall be presented in a 
                        comparative form.
                          (iii) Additional information.--Any 
                        other information that the Secretary 
                        determines will assist the individual 
                        in making the election under this 
                        section.
                The mailing of such information shall be 
                coordinated, to the extent practicable, with 
                the mailing of any annual notice under section 
                1804.
                  (B) Notification to newly eligible 
                medicare+choice eligible individuals.--To the 
                extent practicable, the Secretary shall, not 
                later than 30 days before the beginning of the 
                initial Medicare+Choice enrollment period for 
                an individual described in subsection (e)(1), 
                mail to the individual the information 
                described in subparagraph (A).
                          (ii) Notification related to certain 
                        deemed elections.--The Secretary shall 
                        require a Medicare Advantage 
                        organization that is offering a 
                        Medicare Advantage plan that has been 
                        converted from a reasonable cost 
                        reimbursement contract pursuant to 
                        section 1876(h)(5)(C)(iv) to mail, not 
                        later than 30 days prior to the first 
                        day of the annual, coordinated election 
                        period under subsection (e)(3) of a 
                        year, to any individual enrolled under 
                        such contract and identified by the 
                        Secretary under subsection (c)(4)(D) 
                        for such year--
                                  (I) a notification that such 
                                individual will, on such day, 
                                be deemed to have made an 
                                election with respect to such 
                                plan to receive benefits under 
                                this title through an MA plan 
                                or MA-PD plan (and shall be 
                                enrolled in such plan) for the 
                                next plan year under subsection 
                                (c)(4)(A), but that the 
                                individual may make a different 
                                election during the annual, 
                                coordinated election period for 
                                such year;
                                  (II) the information 
                                described in subparagraph (A);
                                  (III) a description of the 
                                differences between such MA 
                                plan or MA-PD plan and the 
                                reasonable cost reimbursement 
                                contract in which the 
                                individual was most recently 
                                enrolled with respect to 
                                benefits covered under such 
                                plans, including cost-sharing, 
                                premiums, drug coverage, and 
                                provider networks;
                                  (IV) information about the 
                                special period for elections 
                                under subsection (e)(2)(F); and
                                  (V) other information the 
                                Secretary may specify.
                  (C) Form.--The information disseminated under 
                this paragraph shall be written and formatted 
                using language that is easily understandable by 
                medicare beneficiaries.
                  (D) Periodic updating.--The information 
                described in subparagraph (A) shall be updated 
                on at least an annual basis to reflect changes 
                in the availability of Medicare+Choice plans 
                and the benefits and Medicare+Choice monthly 
                basic and supplemental beneficiary premiums for 
                such plans.
          (3) General information.--General information under 
        this paragraph, with respect to coverage under this 
        part during a year, shall include the following:
                  (A) Benefits under original medicare fee-for-
                service program option.--A general description 
                of the benefits covered under the original 
                medicare fee-for-service program under parts A 
                and B, including--
                          (i) covered items and services,
                          (ii) beneficiary cost sharing, such 
                        as deductibles, coinsurance, and 
                        copayment amounts, and
                          (iii) any beneficiary liability for 
                        balance billing.
                  (B) Election procedures.--Information and 
                instructions on how to exercise election 
                options under this section.
                  (C) Rights.--A general description of 
                procedural rights (including grievance and 
                appeals procedures) of beneficiaries under the 
                original medicare fee-for-service program and 
                the Medicare+Choice program and the right to be 
                protected against discrimination based on 
                health status-related factors under section 
                1852(b).
                  (D) Information on medigap and medicare 
                select.--A general description of the benefits, 
                enrollment rights, and other requirements 
                applicable to medicare supplemental policies 
                under section 1882 and provisions relating to 
                medicare select policies described in section 
                1882(t).
                  (E) Potential for contract termination.--The 
                fact that a Medicare+Choice organization may 
                terminate its contract, refuse to renew its 
                contract, or reduce the service area included 
                in its contract, under this part, and the 
                effect of such a termination, nonrenewal, or 
                service area reduction may have on individuals 
                enrolled with the Medicare+Choice plan under 
                this part.
                  (F) Catastrophic coverage and single 
                deductible.--In the case of an MA regional 
                plan, a description of the catastrophic 
                coverage and single deductible applicable under 
                the plan.
          (4) Information comparing plan options.--Information 
        under this paragraph, with respect to a Medicare+Choice 
        plan for a year, shall include the following:
                  (A) Benefits.--The benefits covered under the 
                plan, including the following:
                          (i) Covered items and services beyond 
                        those provided under the original 
                        medicare fee-for-service program.
                          (ii) Any beneficiary cost sharing, 
                        including information on the single 
                        deductible (if applicable) under 
                        section 1858(b)(1).
                          (iii) Any maximum limitations on out-
                        of-pocket expenses.
                          (iv) In the case of an MSA plan, 
                        differences in cost sharing, premiums, 
                        and balance billing under such a plan 
                        compared to under other Medicare+Choice 
                        plans.
                          (v) In the case of a Medicare+Choice 
                        private fee-for-service plan, 
                        differences in cost sharing, premiums, 
                        and balance billing under such a plan 
                        compared to under other Medicare+Choice 
                        plans.
                          (vi) The extent to which an enrollee 
                        may obtain benefits through out-of-
                        network health care providers.
                          (vii) The extent to which an enrollee 
                        may select among in-network providers 
                        and the types of providers 
                        participating in the plan's network.
                          (viii) The organization's coverage of 
                        emergency and urgently needed care.
                  (B) Premiums.--
                          (i) In general.--The monthly amount 
                        of the premium charged to an 
                        individual.
                          (ii) Reductions.--The reduction in 
                        part B premiums, if any.
                  (C) Service area.--The service area of the 
                plan.
                  (D) Quality and performance.--To the extent 
                available, plan quality and performance 
                indicators for the benefits under the plan (and 
                how they compare to such indicators under the 
                original medicare fee-for-service program under 
                parts A and B in the area involved), 
                including--
                          (i) disenrollment rates for medicare 
                        enrollees electing to receive benefits 
                        through the plan for the previous 2 
                        years (excluding disenrollment due to 
                        death or moving outside the plan's 
                        service area),
                          (ii) information on medicare enrollee 
                        satisfaction,
                          (iii) information on health outcomes, 
                        and
                          (iv) the recent record regarding 
                        compliance of the plan with 
                        requirements of this part (as 
                        determined by the Secretary).
                  (E) Supplemental benefits.--Supplemental 
                health care benefits, including any reductions 
                in cost-sharing under section 1852(a)(3) and 
                the terms and conditions (including premiums) 
                for such benefits.
          (5) Maintaining a toll-free number and internet 
        site.--The Secretary shall maintain a toll-free number 
        for inquiries regarding Medicare+Choice options and the 
        operation of this part in all areas in which 
        Medicare+Choice plans are offered and an Internet site 
        through which individuals may electronically obtain 
        information on such options and Medicare+Choice plans.
          (6) Use of non-federal entities.--The Secretary may 
        enter into contracts with non-Federal entities to carry 
        out activities under this subsection.
          (7) Provision of information.--A Medicare+Choice 
        organization shall provide the Secretary with such 
        information on the organization and each 
        Medicare+Choice plan it offers as may be required for 
        the preparation of the information referred to in 
        paragraph (2)(A).
  (e) Coverage Election Periods.--
          (1) Initial choice upon eligibility to make election 
        if medicare+choice plans available to individual.--If, 
        at the time an individual first becomes entitled to 
        benefits under part A and enrolled under part B, there 
        is one or more Medicare+Choice plans offered in the 
        area in which the individual resides, the individual 
        shall make the election under this section during a 
        period specified by the Secretary such that if the 
        individual elects a Medicare+Choice plan during the 
        period, coverage under the plan becomes effective as of 
        the first date on which the individual may receive such 
        coverage. If any portion of an individual's initial 
        enrollment period under part B occurs after the end of 
        the annual, coordinated election period described in 
        paragraph (3)(B)(iii), the initial enrollment period 
        under this part shall further extend through the end of 
        the individual's initial enrollment period under part 
        B.
          (2) Open enrollment and disenrollment 
        opportunities.--Subject to paragraph (5)--
                  (A) Continuous open enrollment and 
                disenrollment through 2005.--At any time during 
                the period beginning January 1, 1998, and 
                ending on December 31, 2005, a Medicare+Choice 
                eligible individual may change the election 
                under subsection (a)(1).
                  (B) Continuous open enrollment and 
                disenrollment for first 6 months during 2006.--
                          (i) In general.--Subject to clause 
                        (ii), subparagraph(C)(iii), and 
                        subparagraph (D), at any time during 
                        the first 6 months of 2006, or, if the 
                        individual first becomes a 
                        Medicare+Choice eligible individual 
                        during 2006, during the first 6 months 
                        during 2006 in which the individual is 
                        a Medicare+Choice eligible individual, 
                        a Medicare+Choice eligible individual 
                        may change the election under 
                        subsection (a)(1).
                          (ii) Limitation of one change.--An 
                        individual may exercise the right under 
                        clause (i) only once. The limitation 
                        under this clause shall not apply to 
                        changes in elections effected during an 
                        annual, coordinated election period 
                        under paragraph (3) or during a special 
                        enrollment period under the first 
                        sentence of paragraph (4).
                  (C) Annual 45-day period for disenrollment 
                from ma plans to elect to receive benefits 
                under the original medicare fee-for-service 
                program.--Subject to subparagraph (D), at any 
                time during the first 45 days of a year 
                (beginning with 2011), an individual who is 
                enrolled in a Medicare Advantage plan may 
                change the election under subsection (a)(1), 
                but only with respect to coverage under the 
                original medicare fee-for-service program under 
                parts A and B, and may elect qualified 
                prescription drug coverage in accordance with 
                section 1860D-1.
                  (D) Continuous open enrollment for 
                institutionalized individuals.--At any time 
                after 2005 in the case of a Medicare+Choice 
                eligible individual who is institutionalized 
                (as defined by the Secretary), the individual 
                may elect under subsection (a)(1)--
                          (i) to enroll in a Medicare+Choice 
                        plan; or
                          (ii) to change the Medicare+Choice 
                        plan in which the individual is 
                        enrolled.
                  (E) Limited continuous open enrollment of 
                original fee-for-service enrollees in medicare 
                advantage non-prescription drug plans.--
                          (i) In general.--On any date during 
                        the period beginning on January 1, 
                        2007, and ending on July 31, 2007, on 
                        which a Medicare Advantage eligible 
                        individual is an unenrolled fee-for-
                        service individual (as defined in 
                        clause (ii)), the individual may elect 
                        under subsection (a)(1) to enroll in a 
                        Medicare Advantage plan that is not an 
                        MA-PD plan.
                          (ii) Unenrolled fee-for-service 
                        individual defined.--In this 
                        subparagraph, the term ``unenrolled 
                        fee-for-service individual'' means, 
                        with respect to a date, a Medicare 
                        Advantage eligible individual who--
                                  (I) is receiving benefits 
                                under this title through 
                                enrollment in the original 
                                medicare fee-for-service 
                                program under parts A and B;
                                  (II) is not enrolled in an MA 
                                plan on such date; and
                                  (III) as of such date is not 
                                otherwise eligible to elect to 
                                enroll in an MA plan.
                          (iii) Limitation of one change during 
                        the applicable period.--An individual 
                        may exercise the right under clause (i) 
                        only once during the period described 
                        in such clause.
                          (iv) No effect on coverage under a 
                        prescription drug plan.--Nothing in 
                        this subparagraph shall be construed as 
                        permitting an individual exercising the 
                        right under clause (i)--
                                  (I) who is enrolled in a 
                                prescription drug plan under 
                                part D, to disenroll from such 
                                plan or to enroll in a 
                                different prescription drug 
                                plan; or
                                  (II) who is not enrolled in a 
                                prescription drug plan, to 
                                enroll in such a plan.
                  (F) Special period for certain deemed 
                elections.--
                          (i) In general.--At any time during 
                        the period beginning after the last day 
                        of the annual, coordinated election 
                        period under paragraph (3) in which an 
                        individual is deemed to have elected to 
                        enroll in an MA plan or MA-PD plan 
                        under subsection (c)(4) and ending on 
                        the last day of February of the first 
                        plan year for which the individual is 
                        enrolled in such plan, such individual 
                        may change the election under 
                        subsection (a)(1) (including changing 
                        the MA plan or MA-PD plan in which the 
                        individual is enrolled).
                          (ii) Limitation of one change.--An 
                        individual may exercise the right under 
                        clause (i) only once during the 
                        applicable period described in such 
                        clause. The limitation under this 
                        clause shall not apply to changes in 
                        elections effected during an annual, 
                        coordinated election period under 
                        paragraph (3) or during a special 
                        enrollment period under paragraph (4).
          (3) Annual, coordinated election period.--
                  (A) In general.--Subject to paragraph (5), 
                each individual who is eligible to make an 
                election under this section may change such 
                election during an annual, coordinated election 
                period.
                  (B) Annual, coordinated election period.--For 
                purposes of this section, the term ``annual, 
                coordinated election period'' means--
                          (i) with respect to a year before 
                        2002, the month of November before such 
                        year;
                          (ii) with respect to 2002, 2003, 
                        2004, and 2005, the period beginning on 
                        November 15 and ending on December 31 
                        of the year before such year;
                          (iii) with respect to 2006, the 
                        period beginning on November 15, 2005, 
                        and ending on May 15, 2006;
                          (iv) with respect to 2007, 2008, 
                        2009, and 2010, the period beginning on 
                        November 15 and ending on December 31 
                        of the year before such year; and
                          (v) with respect to 2012 and 
                        succeeding years, the period beginning 
                        on October 15 and ending on December 7 
                        of the year before such year.
                  (C) Medicare+choice health information 
                fairs.--During the fall season of each year 
                (beginning with 1999) and during the period 
                described in subparagraph (B)(iii), in 
                conjunction with the annual coordinated 
                election period defined in subparagraph (B), 
                the Secretary shall provide for a nationally 
                coordinated educational and publicity campaign 
                to inform Medicare+Choice eligible individuals 
                about Medicare+Choice plans and the election 
                process provided under this section.
                  (D) Special information campaigns.--During 
                November 1998 the Secretary shall provide for 
                an educational and publicity campaign to inform 
                Medicare+Choice eligible individuals about the 
                availability of Medicare+Choice plans, and 
                eligible organizations with risk-sharing 
                contracts under section 1876, offered in 
                different areas and the election process 
                provided under this section. During the period 
                described in subparagraph (B)(iii), the 
                Secretary shall provide for an educational and 
                publicity campaign to inform MA eligible 
                individuals about the availability of MA plans 
                (including MA-PD plans) offered in different 
                areas and the election process provided under 
                this section.
          (4) Special election periods.--Effective as of 
        January 1, 2006, an individual may discontinue an 
        election of a Medicare+Choice plan offered by a 
        Medicare+Choice organization other than during an 
        annual, coordinated election period and make a new 
        election under this section if--
                  (A)(i) the certification of the organization 
                or plan under this part has been terminated, or 
                the organization or plan has notified the 
                individual of an impending termination of such 
                certification; or
                  (ii) the organization has terminated or 
                otherwise discontinued providing the plan in 
                the area in which the individual resides, or 
                has notified the individual of an impending 
                termination or discontinuation of such plan;
                  (B) the individual is no longer eligible to 
                elect the plan because of a change in the 
                individual's place of residence or other change 
                in circumstances (specified by the Secretary, 
                but not including termination of the 
                individual's enrollment on the basis described 
                in clause (i) or (ii) of subsection (g)(3)(B));
                  (C) the individual demonstrates (in 
                accordance with guidelines established by the 
                Secretary) that--
                          (i) the organization offering the 
                        plan substantially violated a material 
                        provision of the organization's 
                        contract under this part in relation to 
                        the individual (including the failure 
                        to provide an enrollee on a timely 
                        basis medically necessary care for 
                        which benefits are available under the 
                        plan or the failure to provide such 
                        covered care in accordance with 
                        applicable quality standards); or
                          (ii) the organization (or an agent or 
                        other entity acting on the 
                        organization's behalf) materially 
                        misrepresented the plan's provisions in 
                        marketing the plan to the individual; 
                        or
                  (D) the individual meets such other 
                exceptional conditions as the Secretary may 
                provide.
        Effective as of January 1, 2006, an individual who, 
        upon first becoming eligible for benefits under part A 
        at age 65, enrolls in a Medicare+Choice plan under this 
        part, the individual may discontinue the election of 
        such plan, and elect coverage under the original fee-
        for-service plan, at any time during the 12-month 
        period beginning on the effective date of such 
        enrollment.
          (5) Special rules for msa plans.--Notwithstanding the 
        preceding provisions of this subsection, an 
        individual--
                  (A) may elect an MSA plan only during--
                          (i) an initial open enrollment period 
                        described in paragraph (1), or
                          (ii) an annual, coordinated election 
                        period described in paragraph (3)(B);
                  (B) subject to subparagraph (C), may not 
                discontinue an election of an MSA plan except 
                during the periods described in clause (ii) or 
                (iii) of subparagraph (A) and under the first 
                sentence of paragraph (4); and
                  (C) who elects an MSA plan during an annual, 
                coordinated election period, and who never 
                previously had elected such a plan, may revoke 
                such election, in a manner determined by the 
                Secretary, by not later than December 15 
                following the date of the election.
          (6) Open enrollment periods.--Subject to paragraph 
        (5), a Medicare+Choice organization--
                  (A) shall accept elections or changes to 
                elections during the initial enrollment periods 
                described in paragraph (1), during the period 
                described in paragraph (2)(F), during the month 
                of November 1998 and during the annual, 
                coordinated election period under paragraph (3) 
                for each subsequent year, and during special 
                election periods described in the first 
                sentence of paragraph (4); and
                  (B) may accept other changes to elections at 
                such other times as the organization provides.
  (f) Effectiveness of Elections and Changes of Elections.--
          (1) During initial coverage election period.--An 
        election of coverage made during the initial coverage 
        election period under subsection (e)(1) subsection 
        (e)(1) shall take effect upon the date the individual 
        becomes entitled to benefits under part A and enrolled 
        under part B, except as the Secretary may provide 
        (consistent with section 1838) in order to prevent 
        retroactive coverage.
          (2) During continuous open enrollment periods.--An 
        election or change of coverage made under subsection 
        (e)(2) shall take effect with the first day of the 
        first calendar month following the date on which the 
        election or change is made.
          (3) Annual, coordinated election period.--An election 
        or change of coverage made during an annual, 
        coordinated election period (as defined in subsection 
        (e)(3)(B), other than the period described in clause 
        (iii) of such subsection) in a year shall take effect 
        as of the first day of the following year.
          (4) Other periods.--An election or change of coverage 
        made during any other period under subsection (e)(4) 
        shall take effect in such manner as the Secretary 
        provides in a manner consistent (to the extent 
        practicable) with protecting continuity of health 
        benefit coverage.
  (g) Guaranteed Issue and Renewal.--
          (1) In general.--Except as provided in this 
        subsection, a Medicare+Choice organization shall 
        provide that at any time during which elections are 
        accepted under this section with respect to a 
        Medicare+Choice plan offered by the organization, the 
        organization will accept without restrictions 
        individuals who are eligible to make such election.
          (2) Priority.--If the Secretary determines that a 
        Medicare+Choice organization, in relation to a 
        Medicare+Choice plan it offers, has a capacity limit 
        and the number of Medicare+Choice eligible individuals 
        who elect the plan under this section exceeds the 
        capacity limit, the organization may limit the election 
        of individuals of the plan under this section but only 
        if priority in election is provided--
                  (A) first to such individuals as have elected 
                the plan at the time of the determination, and
                  (B) then to other such individuals in such a 
                manner that does not discriminate, on a basis 
                described in section 1852(b), among the 
                individuals (who seek to elect the plan).
        The preceding sentence shall not apply if it would 
        result in the enrollment of enrollees substantially 
        nonrepresentative, as determined in accordance with 
        regulations of the Secretary, of the medicare 
        population in the service area of the plan.
          (3) Limitation on termination of election.--
                  (A) In general.--Subject to subparagraph (B), 
                a Medicare+Choice organization may not for any 
                reason terminate the election of any individual 
                under this section for a Medicare+Choice plan 
                it offers.
                  (B) Basis for termination of election.--A 
                Medicare+Choice organization may terminate an 
                individual's election under this section with 
                respect to a Medicare+Choice plan it offers 
                if--
                          (i) any Medicare+Choice monthly basic 
                        and supplemental beneficiary premiums 
                        required with respect to such plan are 
                        not paid on a timely basis (consistent 
                        with standards under section 1856 that 
                        provide for a grace period for late 
                        payment of such premiums),
                          (ii) the individual has engaged in 
                        disruptive behavior (as specified in 
                        such standards), or
                          (iii) the plan is terminated with 
                        respect to all individuals under this 
                        part in the area in which the 
                        individual resides.
                  (C) Consequence of termination.--
                          (i) Terminations for cause.--Any 
                        individual whose election is terminated 
                        under clause (i) or (ii) of 
                        subparagraph (B) is deemed to have 
                        elected the original medicare fee-for-
                        service program option described in 
                        subsection (a)(1)(A).
                          (ii) Termination based on plan 
                        termination or service area 
                        reduction.--Any individual whose 
                        election is terminated under 
                        subparagraph (B)(iii) shall have a 
                        special election period under 
                        subsection (e)(4)(A) in which to change 
                        coverage to coverage under another 
                        Medicare+Choice plan. Such an 
                        individual who fails to make an 
                        election during such period is deemed 
                        to have chosen to change coverage to 
                        the original medicare fee-for-service 
                        program option described in subsection 
                        (a)(1)(A).
                  (D) Organization obligation with respect to 
                election forms.--Pursuant to a contract under 
                section 1857, each Medicare+Choice organization 
                receiving an election form under subsection 
                (c)(2) shall transmit to the Secretary (at such 
                time and in such manner as the Secretary may 
                specify) a copy of such form or such other 
                information respecting the election as the 
                Secretary may specify.
  (h) Approval of Marketing Material and Application Forms.--
          (1) Submission.--No marketing material or application 
        form may be distributed by a Medicare+Choice 
        organization to (or for the use of) Medicare+Choice 
        eligible individuals unless--
                  (A) at least 45 days (or 10 days in the case 
                described in paragraph (5)) before the date of 
                distribution the organization has submitted the 
                material or form to the Secretary for review, 
                and
                  (B) the Secretary has not disapproved the 
                distribution of such material or form.
          (2) Review.--The standards established under section 
        1856 shall include guidelines for the review of any 
        material or form submitted and under such guidelines 
        the Secretary shall disapprove (or later require the 
        correction of) such material or form if the material or 
        form is materially inaccurate or misleading or 
        otherwise makes a material misrepresentation.
          (3) Deemed approval (1-stop shopping).--In the case 
        of material or form that is submitted under paragraph 
        (1)(A) to the Secretary or a regional office of the 
        Department of Health and Human Services and the 
        Secretary or the office has not disapproved the 
        distribution of marketing material or form under 
        paragraph (1)(B) with respect to a Medicare+Choice plan 
        in an area, the Secretary is deemed not to have 
        disapproved such distribution in all other areas 
        covered by the plan and organization except with regard 
        to that portion of such material or form that is 
        specific only to an area involved.
          (4) Prohibition of certain marketing practices.--Each 
        Medicare+Choice organization shall conform to fair 
        marketing standards, in relation to Medicare+Choice 
        plans offered under this part, included in the 
        standards established under section 1856. Such 
        standards--
                  (A) shall not permit a Medicare+Choice 
                organization to provide for, subject to 
                subsection (j)(2)(C), cash, gifts, prizes, or 
                other monetary rebates as an inducement for 
                enrollment or otherwise;
                  (B) may include a prohibition against a 
                Medicare+Choice organization (or agent of such 
                an organization) completing any portion of any 
                election form used to carry out elections under 
                this section on behalf of any individual;
                  (C) shall not permit a Medicare Advantage 
                organization (or the agents, brokers, and other 
                third parties representing such organization) 
                to conduct the prohibited activities described 
                in subsection (j)(1); and
                  (D) shall only permit a Medicare Advantage 
                organization (and the agents, brokers, and 
                other third parties representing such 
                organization) to conduct the activities 
                described in subsection (j)(2) in accordance 
                with the limitations established under such 
                subsection.
          (5) Special treatment of marketing material following 
        model marketing language.--In the case of marketing 
        material of an organization that uses, without 
        modification, proposed model language specified by the 
        Secretary, the period specified in paragraph (1)(A) 
        shall be reduced from 45 days to 10 days.
          (6) Required inclusion of plan type in plan name.--
        For plan years beginning on or after January 1, 2010, a 
        Medicare Advantage organization must ensure that the 
        name of each Medicare Advantage plan offered by the 
        Medicare Advantage organization includes the plan type 
        of the plan (using standard terminology developed by 
        the Secretary).
          (7) Strengthening the ability of states to act in 
        collaboration with the secretary to address fraudulent 
        or inappropriate marketing practices.--
                  (A) Appointment of agents and brokers.--Each 
                Medicare Advantage organization shall--
                          (i) only use agents and brokers who 
                        have been licensed under State law to 
                        sell Medicare Advantage plans offered 
                        by the Medicare Advantage organization;
                          (ii) in the case where a State has a 
                        State appointment law, abide by such 
                        law; and
                          (iii) report to the applicable State 
                        the termination of any such agent or 
                        broker, including the reasons for such 
                        termination (as required under 
                        applicable State law).
                  (B) Compliance with state information 
                requests.--Each Medicare Advantage organization 
                shall comply in a timely manner with any 
                request by a State for information regarding 
                the performance of a licensed agent, broker, or 
                other third party representing the Medicare 
                Advantage organization as part of an 
                investigation by the State into the conduct of 
                the agent, broker, or other third party.
  (i) Effect of Election of Medicare+Choice Plan Option.--
          (1) Payments to organizations.--Subject to sections 
        1852(a)(5), 1853(a)(4), 1853(g), 1853(h), 1886(d)(11), 
        1886(h)(3)(D), and 1853(m), payments under a contract 
        with a Medicare+Choice organization under section 
        1853(a) with respect to an individual electing a 
        Medicare+Choice plan offered by the organization shall 
        be instead of the amounts which (in the absence of the 
        contract) would otherwise be payable under parts A and 
        B for items and services furnished to the individual.
          (2) Only organization entitled to payment.--Subject 
        to sections 1853(a)(4), 1853(e), 1853(g), 1853(h), 
        1857(f)(2), 1858(h), 1886(d)(11), and 1886(h)(3)(D), 
        only the Medicare+Choice organization shall be entitled 
        to receive payments from the Secretary under this title 
        for services furnished to the individual.
  (j) Prohibited Activities Described and Limitations on the 
Conduct of Certain Other Activities.--
          (1) Prohibited activities described.--The following 
        prohibited activities are described in this paragraph:
                  (A) Unsolicited means of direct contact.--Any 
                unsolicited means of direct contact of 
                prospective enrollees, including soliciting 
                door-to-door or any outbound telemarketing 
                without the prospective enrollee initiating 
                contact.
                  (B) Cross-selling.--The sale of other non-
                health related products (such as annuities and 
                life insurance) during any sales or marketing 
                activity or presentation conducted with respect 
                to a Medicare Advantage plan.
                  (C) Meals.--The provision of meals of any 
                sort, regardless of value, to prospective 
                enrollees at promotional and sales activities.
                  (D) Sales and marketing in health care 
                settings and at educational events.--Sales and 
                marketing activities for the enrollment of 
                individuals in Medicare Advantage plans that 
                are conducted--
                          (i) in health care settings in areas 
                        where health care is delivered to 
                        individuals (such as physician offices 
                        and pharmacies), except in the case 
                        where such activities are conducted in 
                        common areas in health care settings; 
                        and
                          (ii) at educational events.
          (2) Limitations.--The Secretary shall establish 
        limitations with respect to at least the following:
                  (A) Scope of marketing appointments.--The 
                scope of any appointment with respect to the 
                marketing of a Medicare Advantage plan. Such 
                limitation shall require advance agreement with 
                a prospective enrollee on the scope of the 
                marketing appointment and documentation of such 
                agreement by the Medicare Advantage 
                organization. In the case where the marketing 
                appointment is in person, such documentation 
                shall be in writing.
                  (B) Co-branding.--The use of the name or logo 
                of a co-branded network provider on Medicare 
                Advantage plan membership and marketing 
                materials.
                  (C) Limitation of gifts to nominal dollar 
                value.--The offering of gifts and other 
                promotional items other than those that are of 
                nominal value (as determined by the Secretary) 
                to prospective enrollees at promotional 
                activities.
                  (D) Compensation.--The use of compensation 
                other than as provided under guidelines 
                established by the Secretary. Such guidelines 
                shall ensure that the use of compensation 
                creates incentives for agents and brokers to 
                enroll individuals in the Medicare Advantage 
                plan that is intended to best meet their health 
                care needs.
                  (E) Required training, annual retraining, and 
                testing of agents, brokers, and other third 
                parties.--The use by a Medicare Advantage 
                organization of any individual as an agent, 
                broker, or other third party representing the 
                organization that has not completed an initial 
                training and testing program and does not 
                complete an annual retraining and testing 
                program.

                  benefits and beneficiary protections

  Sec. 1852. (a) Basic Benefits.--
          (1) Requirement.--
                  (A) In general.--Except as provided in 
                section 1859(b)(3) for MSA plans and except as 
                provided in paragraph (6) for MA regional 
                plans, each Medicare+Choice plan shall provide 
                to members enrolled under this part, through 
                providers and other persons that meet the 
                applicable requirements of this title and part 
                A of title XI, benefits under the original 
                medicare fee-for-service program option (and, 
                for plan years before 2006, additional benefits 
                required under section 1854(f)(1)(A)).
                  (B) Benefits under the original medicare fee-
                for-service program option defined.--
                          (i) In general.--For purposes of this 
                        part, the term ``benefits under the 
                        original medicare fee-for-service 
                        program option'' means those items and 
                        services (other than hospice care) for 
                        which benefits are available under 
                        parts A and B to individuals entitled 
                        to benefits under part A and enrolled 
                        under part B, with cost-sharing for 
                        those services as required under parts 
                        A and B or, subject to clause (iii), an 
                        actuarially equivalent level of cost-
                        sharing as determined in this part.
                          (ii) Special rule for regional 
                        plans.--In the case of an MA regional 
                        plan in determining an actuarially 
                        equivalent level of cost-sharing with 
                        respect to benefits under the original 
                        medicare fee-for-service program 
                        option, there shall only be taken into 
                        account, with respect to the 
                        application of section 1858(b)(2), such 
                        expenses only with respect to 
                        subparagraph (A) of such section.
                          (iii) Limitation on variation of cost 
                        sharing for certain benefits.--Subject 
                        to clause (v), cost-sharing for 
                        services described in clause (iv) shall 
                        not exceed the cost-sharing required 
                        for those services under parts A and B.
                          (iv) Services described.--The 
                        following services are described in 
                        this clause:
                                  (I) Chemotherapy 
                                administration services.
                                  (II) Renal dialysis services 
                                (as defined in section 
                                1881(b)(14)(B)).
                                  (III) Skilled nursing care.
                                  (IV) Such other services that 
                                the Secretary determines 
                                appropriate (including services 
                                that the Secretary determines 
                                require a high level of 
                                predictability and transparency 
                                for beneficiaries).
                          (v) Exception.--In the case of 
                        services described in clause (iv) for 
                        which there is no cost-sharing required 
                        under parts A and B, cost-sharing may 
                        be required for those services in 
                        accordance with clause (i).
          (2) Satisfaction of requirement.--
                  (A) In general.--A Medicare+Choice plan 
                (other than an MSA plan) offered by a 
                Medicare+Choice organization satisfies 
                paragraph (1)(A), with respect to benefits for 
                items and services furnished other than through 
                a provider or other person that has a contract 
                with the organization offering the plan, if the 
                plan provides payment in an amount so that--
                          (i) the sum of such payment amount 
                        and any cost sharing provided for under 
                        the plan, is equal to at least
                          (ii) the total dollar amount of 
                        payment for such items and services as 
                        would otherwise be authorized under 
                        parts A and B (including any balance 
                        billing permitted under such parts).
                  (B) Reference to related provisions.--For 
                provision relating to--
                          (i) limitations on balance billing 
                        against Medicare+Choice organizations 
                        for non-contract providers, see 
                        sections 1852(k) and 1866(a)(1)(O), and
                          (ii) limiting actuarial value of 
                        enrollee liability for covered 
                        benefits, see section 1854(e).
                  (C) Election of uniform coverage 
                determination.--In the case of a 
                Medicare+Choice organization that offers a 
                Medicare+Choice plan in an area in which more 
                than one local coverage determination is 
                applied with respect to different parts of the 
                area, the organization may elect to have the 
                local coverage determination for the part of 
                the area that is most beneficial to 
                Medicare+Choice enrollees (as identified by the 
                Secretary) apply with respect to all 
                Medicare+Choice enrollees enrolled in the plan.
          (3) Supplemental benefits.--
                  (A) Benefits included subject to secretary's 
                approval.--Each Medicare+Choice organization 
                may provide to individuals enrolled under this 
                part, other than under an MSA plan (without 
                affording those individuals an option to 
                decline the coverage), supplemental health care 
                benefits that the Secretary may approve. The 
                Secretary shall approve any such supplemental 
                benefits unless the Secretary determines that 
                including such supplemental benefits would 
                substantially discourage enrollment by 
                Medicare+Choice eligible individuals with the 
                organization.
                  (B) At enrollees' option.--
                          (i) In general.--Subject to clause 
                        (ii), a Medicare+Choice organization 
                        may provide to individuals enrolled 
                        under this part supplemental health 
                        care benefits that the individuals may 
                        elect, at their option, to have 
                        covered.
                          (ii) Special rule for msa plans.--A 
                        Medicare+Choice organization may not 
                        provide, under an MSA plan, 
                        supplemental health care benefits that 
                        cover the deductible described in 
                        section 1859(b)(2)(B). In applying the 
                        previous sentence, health benefits 
                        described in section 1882(u)(2)(B) 
                        shall not be treated as covering such 
                        deductible.
                  (C) Application to Medicare+Choice private 
                fee-for-service plans.--Nothing in this 
                paragraph shall be construed as preventing a 
                Medicare+Choice private fee-for-service plan 
                from offering supplemental benefits that 
                include payment for some or all of the balance 
                billing amounts permitted consistent with 
                section 1852(k) and coverage of additional 
                services that the plan finds to be medically 
                necessary. Such benefits may include reductions 
                in cost-sharing below the actuarial value 
                specified in section 1854(e)(4)(B).
          (4) Organization as secondary payer.--Notwithstanding 
        any other provision of law, a Medicare+Choice 
        organization may (in the case of the provision of items 
        and services to an individual under a Medicare+Choice 
        plan under circumstances in which payment under this 
        title is made secondary pursuant to section 1862(b)(2)) 
        charge or authorize the provider of such services to 
        charge, in accordance with the charges allowed under a 
        law, plan, or policy described in such section--
                  (A) the insurance carrier, employer, or other 
                entity which under such law, plan, or policy is 
                to pay for the provision of such services, or
                  (B) such individual to the extent that the 
                individual has been paid under such law, plan, 
                or policy for such services.
          (5) National coverage determinations and legislative 
        changes in benefits.--If there is a national coverage 
        determination or legislative change in benefits 
        required to be provided under this part made in the 
        period beginning on the date of an announcement under 
        section 1853(b) and ending on the date of the next 
        announcement under such section and the Secretary 
        projects that the determination will result in a 
        significant change in the costs to a Medicare+Choice 
        organization of providing the benefits that are the 
        subject of such national coverage determination and 
        that such change in costs was not incorporated in the 
        determination of the annual Medicare+Choice capitation 
        rate under section 1853 included in the announcement 
        made at the beginning of such period, then, unless 
        otherwise required by law--
                  (A) such determination or legislative change 
                in benefits shall not apply to contracts under 
                this part until the first contract year that 
                begins after the end of such period, and
                  (B) if such coverage determination or 
                legislative change provides for coverage of 
                additional benefits or coverage under 
                additional circumstances, section 1851(i)(1) 
                shall not apply to payment for such additional 
                benefits or benefits provided under such 
                additional circumstances until the first 
                contract year that begins after the end of such 
                period.
        The projection under the previous sentence shall be 
        based on an analysis by the Chief Actuary of the 
        Centers for Medicare & Medicaid Services of the 
        actuarial costs associated with the coverage 
        determination or legislative change in benefits.
          (6) Special benefit rules for regional plans.--In the 
        case of an MA plan that is an MA regional plan, 
        benefits under the plan shall include the benefits 
        described in paragraphs (1) and (2) of section 1858(b).
          (7) Limitation on cost-sharing for dual eligibles and 
        qualified medicare beneficiaries.--In the case of an 
        individual who is a full-benefit dual eligible 
        individual (as defined in section 1935(c)(6)) or a 
        qualified medicare beneficiary (as defined in section 
        1905(p)(1)) and who is enrolled in a specialized 
        Medicare Advantage plan for special needs individuals 
        described in section 1859(b)(6)(B)(ii), the plan may 
        not impose cost-sharing that exceeds the amount of 
        cost-sharing that would be permitted with respect to 
        the individual under title XIX if the individual were 
        not enrolled in such plan.
  (b) Antidiscrimination.--
          (1) Beneficiaries.--
                  (A) In general.-- A Medicare+Choice 
                organization may not deny, limit, or condition 
                the coverage or provision of benefits under 
                this part, for individuals permitted to be 
                enrolled with the organization under this part, 
                based on any health status-related factor 
                described in section 2702(a)(1) of the Public 
                Health Service Act. The Secretary shall not 
                approve a plan of an organization if the 
                Secretary determines that the design of the 
                plan and its benefits are likely to 
                substantially discourage enrollment by certain 
                MA eligible individuals with the organization.
                  (B) Construction.--Subparagraph (A) shall not 
                be construed as requiring a Medicare+Choice 
                organization to enroll individuals who are 
                determined to have end-stage renal disease, 
                except as provided under section 1851(a)(3)(B).
          (2) Providers.--A Medicare+Choice organization shall 
        not discriminate with respect to participation, 
        reimbursement, or indemnification as to any provider 
        who is acting within the scope of the provider's 
        license or certification under applicable State law, 
        solely on the basis of such license or certification. 
        This paragraph shall not be construed to prohibit a 
        plan from including providers only to the extent 
        necessary to meet the needs of the plan's enrollees or 
        from establishing any measure designed to maintain 
        quality and control costs consistent with the 
        responsibilities of the plan.
  (c) Disclosure Requirements.--
          (1) Detailed description of plan provisions.--A 
        Medicare+Choice organization shall disclose, in clear, 
        accurate, and standardized form to each enrollee with a 
        Medicare+Choice plan offered by the organization under 
        this part at the time of enrollment and at least 
        annually thereafter, the following information 
        regarding such plan:
                  (A) Service area.--The plan's service area.
                  (B) Benefits.--Benefits offered under the 
                plan, including information described in 
                section 1851(d)(3)(A) and exclusions from 
                coverage and, if it is an MSA plan, a 
                comparison of benefits under such a plan with 
                benefits under other Medicare+Choice plans.
                  (C) Access.--The number, mix, and 
                distribution of plan providers, out-of-network 
                coverage (if any) provided by the plan, and any 
                point-of-service option (including the 
                supplemental premium for such option).
                  (D) Out-of-area coverage.--Out-of-area 
                coverage provided by the plan.
                  (E) Emergency coverage.--Coverage of 
                emergency services, including--
                          (i) the appropriate use of emergency 
                        services, including use of the 911 
                        telephone system or its local 
                        equivalent in emergency situations and 
                        an explanation of what constitutes an 
                        emergency situation;
                          (ii) the process and procedures of 
                        the plan for obtaining emergency 
                        services; and
                          (iii) the locations of (I) emergency 
                        departments, and (II) other settings, 
                        in which plan physicians and hospitals 
                        provide emergency services and post-
                        stabilization care.
                  (F) Supplemental benefits.--Supplemental 
                benefits available from the organization 
                offering the plan, including--
                          (i) whether the supplemental benefits 
                        are optional,
                          (ii) the supplemental benefits 
                        covered, and
                          (iii) the Medicare+Choice monthly 
                        supplemental beneficiary premium for 
                        the supplemental benefits.
                  (G) Prior authorization rules.--Rules 
                regarding prior authorization or other review 
                requirements that could result in nonpayment.
                  (H) Plan grievance and appeals procedures.--
                All plan appeal or grievance rights and 
                procedures.
                  (I) Quality improvement program.--A 
                description of the organization's quality 
                improvement program under subsection (e).
          (2) Disclosure upon request.--Upon request of a 
        Medicare+Choice eligible individual, a Medicare+Choice 
        organization must provide the following information to 
        such individual:
                  (A) The general coverage information and 
                general comparative plan information made 
                available under clauses (i) and (ii) of section 
                1851(d)(2)(A).
                  (B) Information on procedures used by the 
                organization to control utilization of services 
                and expenditures.
                  (C) Information on the number of grievances, 
                redeterminations, and appeals and on the 
                disposition in the aggregate of such matters.
                  (D) An overall summary description as to the 
                method of compensation of participating 
                physicians.
  (d) Access to Services.--
          (1) In general.--A Medicare+Choice organization 
        offering a Medicare+Choice plan may select the 
        providers from whom the benefits under the plan are 
        provided so long as--
                  (A) the organization makes such benefits 
                available and accessible to each individual 
                electing the plan within the plan service area 
                with reasonable promptness and in a manner 
                which assures continuity in the provision of 
                benefits;
                  (B) when medically necessary the organization 
                makes such benefits available and accessible 24 
                hours a day and 7 days a week;
                  (C) the plan provides for reimbursement with 
                respect to services which are covered under 
                subparagraphs (A) and (B) and which are 
                provided to such an individual other than 
                through the organization, if--
                          (i) the services were not emergency 
                        services (as defined in paragraph (3)), 
                        but (I) the services were medically 
                        necessary and immediately required 
                        because of an unforeseen illness, 
                        injury, or condition, and (II) it was 
                        not reasonable given the circumstances 
                        to obtain the services through the 
                        organization,
                          (ii) the services were renal dialysis 
                        services and were provided other than 
                        through the organization because the 
                        individual was temporarily out of the 
                        plan's service area, or
                          (iii) the services are maintenance 
                        care or post-stabilization care covered 
                        under the guidelines established under 
                        paragraph (2);
                  (D) the organization provides access to 
                appropriate providers, including credentialed 
                specialists, for medically necessary treatment 
                and services; and
                  (E) coverage is provided for emergency 
                services (as defined in paragraph (3)) without 
                regard to prior authorization or the emergency 
                care provider's contractual relationship with 
                the organization.
          (2) Guidelines respecting coordination of post-
        stabilization care.--A Medicare+Choice plan shall 
        comply with such guidelines as the Secretary may 
        prescribe relating to promoting efficient and timely 
        coordination of appropriate maintenance and post-
        stabilization care of an enrollee after the enrollee 
        has been determined to be stable under section 1867.
          (3) Definition of emergency services.--In this 
        subsection--
                  (A) In general.--The term ``emergency 
                services'' means, with respect to an individual 
                enrolled with an organization, covered 
                inpatient and outpatient services that--
                          (i) are furnished by a provider that 
                        is qualified to furnish such services 
                        under this title, and
                          (ii) are needed to evaluate or 
                        stabilize an emergency medical 
                        condition (as defined in subparagraph 
                        (B)).
                  (B) Emergency medical condition based on 
                prudent layperson.--The term ``emergency 
                medical condition'' means a medical condition 
                manifesting itself by acute symptoms of 
                sufficient severity (including severe pain) 
                such that a prudent layperson, who possesses an 
                average knowledge of health and medicine, could 
                reasonably expect the absence of immediate 
                medical attention to result in--
                          (i) placing the health of the 
                        individual (or, with respect to a 
                        pregnant woman, the health of the woman 
                        or her unborn child) in serious 
                        jeopardy,
                          (ii) serious impairment to bodily 
                        functions, or
                          (iii) serious dysfunction of any 
                        bodily organ or part.
                  (4) Assuring access to services in 
                medicare+choice private fee-for-service 
                plans.--In addition to any other requirements 
                under this part, in the case of a 
                Medicare+Choice private fee-for-service plan, 
                the organization offering the plan must 
                demonstrate to the Secretary that the 
                organization has sufficient number and range of 
                health care professionals and providers willing 
                to provide services under the terms of the 
                plan. Subject to paragraphs (5) and (6), the 
                Secretary shall find that an organization has 
                met such requirement with respect to any 
                category of health care professional or 
                provider if, with respect to that category of 
                provider--
                          (A) the plan has established payment 
                        rates for covered services furnished by 
                        that category of provider that are not 
                        less than the payment rates provided 
                        for under part A, part B, or both, for 
                        such services, or
                          (B) the plan has contracts or 
                        agreements (other than deemed contracts 
                        or agreements under subsection (j)(6)) 
                        with a sufficient number and range of 
                        providers within such category to meet 
                        the access standards in subparagraphs 
                        (A) through (E) of paragraph (1),
                or a combination of both. The previous sentence 
                shall not be construed as restricting the 
                persons from whom enrollees under such a plan 
                may obtain covered benefits, except that, if a 
                plan entirely meets such requirement with 
                respect to a category of health care 
                professional or provider on the basis of 
                subparagraph (B), it may provide for a higher 
                beneficiary copayment in the case of health 
                care professionals and providers of that 
                category who do not have contracts or 
                agreements (other than deemed contracts or 
                agreements under subsection (j)(6)) to provide 
                covered services under the terms of the plan.
          (5) Requirement of certain nonemployer medicare 
        advantage private fee-for-service plans to use 
        contracts with providers.--
                  (A) In general.--For plan year 2011 and 
                subsequent plan years, in the case of a 
                Medicare Advantage private fee-for-service plan 
                not described in paragraph (1) or (2) of 
                section 1857(i) operating in a network area (as 
                defined in subparagraph (B)), the plan shall 
                meet the access standards under paragraph (4) 
                in that area only through entering into written 
                contracts as provided for under subparagraph 
                (B) of such paragraph and not, in whole or in 
                part, through the establishment of payment 
                rates meeting the requirements under 
                subparagraph (A) of such paragraph.
                  (B) Network area defined.--For purposes of 
                subparagraph (A), the term ``network area'' 
                means, for a plan year, an area which the 
                Secretary identifies (in the Secretary's 
                announcement of the proposed payment rates for 
                the previous plan year under section 
                1853(b)(1)(B)) as having at least 2 network-
                based plans (as defined in subparagraph (C)) 
                with enrollment under this part as of the first 
                day of the year in which such announcement is 
                made.
                  (C) Network-based plan defined.--
                          (i) In general.--For purposes of 
                        subparagraph (B), the term ``network-
                        based plan'' means--
                                  (I) except as provided in 
                                clause (ii), a Medicare 
                                Advantage plan that is a 
                                coordinated care plan described 
                                in section 1851(a)(2)(A)(i);
                                  (II) a network-based MSA 
                                plan; and
                                  (III) a reasonable cost 
                                reimbursement plan under 
                                section 1876.
                          (ii) Exclusion of non-network 
                        regional ppos.--The term ``network-
                        based plan'' shall not include an MA 
                        regional plan that, with respect to the 
                        area, meets access adequacy standards 
                        under this part substantially through 
                        the authority of section 
                        422.112(a)(1)(ii) of title 42, Code of 
                        Federal Regulations, rather than 
                        through written contracts.
          (6) Requirement of all employer medicare advantage 
        private fee-for-service plans to use contracts with 
        providers.--For plan year 2011 and subsequent plan 
        years, in the case of a Medicare Advantage private fee-
        for-service plan that is described in paragraph (1) or 
        (2) of section 1857(i), the plan shall meet the access 
        standards under paragraph (4) only through entering 
        into written contracts as provided for under 
        subparagraph (B) of such paragraph and not, in whole or 
        in part, through the establishment of payment rates 
        meeting the requirements under subparagraph (A) of such 
        paragraph.
  (e) Quality Improvement Program.--
          (1) In general.--Each MA organization shall have an 
        ongoing quality improvement program for the purpose of 
        improving the quality of care provided to enrollees in 
        each MA plan offered by such organization.
          (2) Chronic care improvement programs.--As part of 
        the quality improvement program under paragraph (1), 
        each MA organization shall have a chronic care 
        improvement program. Each chronic care improvement 
        program shall have a method for monitoring and 
        identifying enrollees with multiple or sufficiently 
        severe chronic conditions that meet criteria 
        established by the organization for participation under 
        the program.
          (3) Data.--
                  (A) Collection, analysis, and reporting.--
                          (i) In general.--Except as provided 
                        in clauses (ii) and (iii) with respect 
                        to plans described in such clauses and 
                        subject to subparagraph (B), as part of 
                        the quality improvement program under 
                        paragraph (1), each MA organization 
                        shall provide for the collection, 
                        analysis, and reporting of data that 
                        permits the measurement of health 
                        outcomes and other indices of quality. 
                        With respect to MA private fee-for-
                        service plans and MSA plans, the 
                        requirements under the preceding 
                        sentence may not exceed the 
                        requirements under this subparagraph 
                        with respect to MA local plans that are 
                        preferred provider organization plans, 
                        except that, for plan year 2010, the 
                        limitation under clause (iii) shall not 
                        apply and such requirements shall apply 
                        only with respect to administrative 
                        claims data.
                          (ii) Special requirements for 
                        specialized ma plans for special needs 
                        individuals.--In addition to the data 
                        required to be collected, analyzed, and 
                        reported under clause (i) and 
                        notwithstanding the limitations under 
                        subparagraph (B), as part of the 
                        quality improvement program under 
                        paragraph (1), each MA organization 
                        offering a specialized Medicare 
                        Advantage plan for special needs 
                        individuals shall provide for the 
                        collection, analysis, and reporting of 
                        data that permits the measurement of 
                        health outcomes and other indices of 
                        quality with respect to the 
                        requirements described in paragraphs 
                        (2) through (5) of subsection (f). Such 
                        data may be based on claims data and 
                        shall be at the plan level.
                          (iii) Application to local preferred 
                        provider organizations and MA regional 
                        plans.--Clause (i) shall apply to MA 
                        organizations with respect to MA local 
                        plans that are preferred provider 
                        organization plans and to MA regional 
                        plans only insofar as services are 
                        furnished by providers or services, 
                        physicians, and other health care 
                        practitioners and suppliers that have 
                        contracts with such organization to 
                        furnish services under such plans.
                          (iv) Definition of preferred provider 
                        organization plan.--In this 
                        subparagraph, the term ``preferred 
                        provider organization plan'' means an 
                        MA plan that--
                                  (I) has a network of 
                                providers that have agreed to a 
                                contractually specified 
                                reimbursement for covered 
                                benefits with the organization 
                                offering the plan;
                                  (II) provides for 
                                reimbursement for all covered 
                                benefits regardless of whether 
                                such benefits are provided 
                                within such network of 
                                providers; and
                                  (III) is offered by an 
                                organization that is not 
                                licensed or organized under 
                                State law as a health 
                                maintenance organization.
                  (B) Limitations.--
                          (i) Types of data.--The Secretary 
                        shall not collect under subparagraph 
                        (A) data on quality, outcomes, and 
                        beneficiary satisfaction to facilitate 
                        consumer choice and program 
                        administration other than the types of 
                        data that were collected by the 
                        Secretary as of November 1, 2003.
                          (ii) Changes in types of data.--
                        Subject to subclause (iii), the 
                        Secretary may only change the types of 
                        data that are required to be submitted 
                        under subparagraph (A) after submitting 
                        to Congress a report on the reasons for 
                        such changes that was prepared in 
                        consultation with MA organizations and 
                        private accrediting bodies.
                          (iii) Construction.--Nothing in the 
                        subsection shall be construed as 
                        restricting the ability of the 
                        Secretary to carry out the duties under 
                        section 1851(d)(4)(D).
          (4) Treatment of accreditation.--
                  (A) In general.--The Secretary shall provide 
                that a Medicare+Choice organization is deemed 
                to meet all the requirements described in any 
                specific clause of subparagraph (B) if the 
                organization is accredited (and periodically 
                reaccredited) by a private accrediting 
                organization under a process that the Secretary 
                has determined assures that the accrediting 
                organization applies and enforces standards 
                that meet or exceed the standards established 
                under section 1856 to carry out the 
                requirements in such clause.
                  (B) Requirements described.--The provisions 
                described in this subparagraph are the 
                following:
                          (i) Paragraphs (1) through (3) of 
                        this subsection (relating to quality 
                        improvement programs).
                          (ii) Subsection (b) (relating to 
                        antidiscrimination).
                          (iii) Subsection (d) (relating to 
                        access to services).
                          (iv) Subsection (h) (relating to 
                        confidentiality and accuracy of 
                        enrollee records).
                          (v) Subsection (i) (relating to 
                        information on advance directives).
                          (vi) Subsection (j) (relating to 
                        provider participation rules).
                          (vii) The requirements described in 
                        section 1860D-4(j), to the extent such 
                        requirements apply under section 1860D-
                        21(c).
                  (C) Timely action on applications.--The 
                Secretary shall determine, within 210 days 
                after the date the Secretary receives an 
                application by a private accrediting 
                organization and using the criteria specified 
                in section 1865(a)(2), whether the process of 
                the private accrediting organization meets the 
                requirements with respect to any specific 
                clause in subparagraph (B) with respect to 
                which the application is made. The Secretary 
                may not deny such an application on the basis 
                that it seeks to meet the requirements with 
                respect to only one, or more than one, such 
                specific clause.
                  (D) Construction.--Nothing in this paragraph 
                shall be construed as limiting the authority of 
                the Secretary under section 1857, including the 
                authority to terminate contracts with 
                Medicare+Choice organizations under subsection 
                (c)(2) of such section.
  (f) Grievance Mechanism.--Each Medicare+Choice organization 
must provide meaningful procedures for hearing and resolving 
grievances between the organization (including any entity or 
individual through which the organization provides health care 
services) and enrollees with Medicare+Choice plans of the 
organization under this part.
  (g) Coverage Determinations, Reconsiderations, and Appeals.--
          (1) Determinations by organization.--
                  (A) In general.--A Medicare+Choice 
                organization shall have a procedure for making 
                determinations regarding whether an individual 
                enrolled with the plan of the organization 
                under this part is entitled to receive a health 
                service under this section and the amount (if 
                any) that the individual is required to pay 
                with respect to such service. Subject to 
                paragraph (3), such procedures shall provide 
                for such determination to be made on a timely 
                basis.
                  (B) Explanation of determination.--Such a 
                determination that denies coverage, in whole or 
                in part, shall be in writing and shall include 
                a statement in understandable language of the 
                reasons for the denial and a description of the 
                reconsideration and appeals processes.
          (2) Reconsiderations.--
                  (A) In general.--The organization shall 
                provide for reconsideration of a determination 
                described in paragraph (1)(B) upon request by 
                the enrollee involved. The reconsideration 
                shall be within a time period specified by the 
                Secretary, but shall be made, subject to 
                paragraph (3), not later than 60 days after the 
                date of the receipt of the request for 
                reconsideration.
                  (B) Physician decision on certain 
                reconsiderations.--A reconsideration relating 
                to a determination to deny coverage based on a 
                lack of medical necessity shall be made only by 
                a physician with appropriate expertise in the 
                field of medicine which necessitates treatment 
                who is other than a physician involved in the 
                initial determination.
          (3) Expedited determinations and reconsiderations.--
                  (A) Receipt of requests.--
                          (i) Enrollee requests.--An enrollee 
                        in a Medicare+Choice plan may request, 
                        either in writing or orally, an 
                        expedited determination under paragraph 
                        (1) or an expedited reconsideration 
                        under paragraph (2) by the 
                        Medicare+Choice organization.
                          (ii) Physician requests.--A 
                        physician, regardless whether the 
                        physician is affiliated with the 
                        organization or not, may request, 
                        either in writing or orally, such an 
                        expedited determination or 
                        reconsideration.
                  (B) Organization procedures.--
                          (i) In general.--The Medicare+Choice 
                        organization shall maintain procedures 
                        for expediting organization 
                        determinations and reconsiderations 
                        when, upon request of an enrollee, the 
                        organization determines that the 
                        application of the normal time frame 
                        for making a determination (or a 
                        reconsideration involving a 
                        determination) could seriously 
                        jeopardize the life or health of the 
                        enrollee or the enrollee's ability to 
                        regain maximum function.
                          (ii) Expedition required for 
                        physician requests.--In the case of a 
                        request for an expedited determination 
                        or reconsideration made under 
                        subparagraph (A)(ii), the organization 
                        shall expedite the determination or 
                        reconsideration if the request 
                        indicates that the application of the 
                        normal time frame for making a 
                        determination (or a reconsideration 
                        involving a determination) could 
                        seriously jeopardize the life or health 
                        of the enrollee or the enrollee's 
                        ability to regain maximum function.
                          (iii) Timely response.--In cases 
                        described in clauses (i) and (ii), the 
                        organization shall notify the enrollee 
                        (and the physician involved, as 
                        appropriate) of the determination or 
                        reconsideration under time limitations 
                        established by the Secretary, but not 
                        later than 72 hours of the time of 
                        receipt of the request for the 
                        determination or reconsideration (or 
                        receipt of the information necessary to 
                        make the determination or 
                        reconsideration), or such longer period 
                        as the Secretary may permit in 
                        specified cases.
          (4) Independent review of certain coverage denials.--
        The Secretary shall contract with an independent, 
        outside entity to review and resolve in a timely manner 
        reconsiderations that affirm denial of coverage, in 
        whole or in part. The provisions of section 1869(c)(5) 
        shall apply to independent outside entities under 
        contract with the Secretary under this paragraph.
          (5) Appeals.--An enrollee with a Medicare+Choice plan 
        of a Medicare+Choice organization under this part who 
        is dissatisfied by reason of the enrollee's failure to 
        receive any health service to which the enrollee 
        believes the enrollee is entitled and at no greater 
        charge than the enrollee believes the enrollee is 
        required to pay is entitled, if the amount in 
        controversy is $100 or more, to a hearing before the 
        Secretary to the same extent as is provided in section 
        205(b), and in any such hearing the Secretary shall 
        make the organization a party. If the amount in 
        controversy is $1,000 or more, the individual or 
        organization shall, upon notifying the other party, be 
        entitled to judicial review of the Secretary's final 
        decision as provided in section 205(g), and both the 
        individual and the organization shall be entitled to be 
        parties to that judicial review. In applying 
        subsections (b) and (g) of section 205 as provided in 
        this paragraph, and in applying section 205(l) thereto, 
        any reference therein to the Commissioner of Social 
        Security or the Social Security Administration shall be 
        considered a reference to the Secretary or the 
        Department of Health and Human Services, respectively. 
        The provisions of section 1869(b)(1)(E)(iii) shall 
        apply with respect to dollar amounts specified in the 
        first 2 sentences of this paragraph in the same manner 
        as they apply to the dollar amounts specified in 
        section 1869(b)(1)(E)(i).
  (h) Confidentiality and Accuracy of Enrollee Records.--
Insofar as a Medicare+Choice organization maintains medical 
records or other health information regarding enrollees under 
this part, the Medicare+Choice organization shall establish 
procedures--
          (1) to safeguard the privacy of any individually 
        identifiable enrollee information;
          (2) to maintain such records and information in a 
        manner that is accurate and timely; and
          (3) to assure timely access of enrollees to such 
        records and information.
  (i) Information on Advance Directives.--Each Medicare+Choice 
organization shall meet the requirement of section 1866(f) 
(relating to maintaining written policies and procedures 
respecting advance directives).
  (j) Rules Regarding Provider Participation.--
          (1) Procedures.--Insofar as a Medicare+Choice 
        organization offers benefits under a Medicare+Choice 
        plan through agreements with physicians, the 
        organization shall establish reasonable procedures 
        relating to the participation (under an agreement 
        between a physician and the organization) of physicians 
        under such a plan. Such procedures shall include--
                  (A) providing notice of the rules regarding 
                participation,
                  (B) providing written notice of participation 
                decisions that are adverse to physicians, and
                  (C) providing a process within the 
                organization for appealing such adverse 
                decisions, including the presentation of 
                information and views of the physician 
                regarding such decision.
          (2) Consultation in medical policies.--A 
        Medicare+Choice organization shall consult with 
        physicians who have entered into participation 
        agreements with the organization regarding the 
        organization's medical policy, quality, and medical 
        management procedures.
          (3) Prohibiting interference with provider advice to 
        enrollees.--
                  (A) In general.--Subject to subparagraphs (B) 
                and (C), a Medicare+Choice organization (in 
                relation to an individual enrolled under a 
                Medicare+Choice plan offered by the 
                organization under this part) shall not 
                prohibit or otherwise restrict a covered health 
                care professional (as defined in subparagraph 
                (D)) from advising such an individual who is a 
                patient of the professional about the health 
                status of the individual or medical care or 
                treatment for the individual's condition or 
                disease, regardless of whether benefits for 
                such care or treatment are provided under the 
                plan, if the professional is acting within the 
                lawful scope of practice.
                  (B) Conscience protection.--Subparagraph (A) 
                shall not be construed as requiring a 
                Medicare+Choice plan to provide, reimburse for, 
                or provide coverage of a counseling or referral 
                service if the Medicare+Choice organization 
                offering the plan--
                          (i) objects to the provision of such 
                        service on moral or religious grounds; 
                        and
                          (ii) in the manner and through the 
                        written instrumentalities such 
                        Medicare+Choice organization deems 
                        appropriate, makes available 
                        information on its policies regarding 
                        such service to prospective enrollees 
                        before or during enrollment and to 
                        enrollees within 90 days after the date 
                        that the organization or plan adopts a 
                        change in policy regarding such a 
                        counseling or referral service.
                  (C) Construction.--Nothing in subparagraph 
                (B) shall be construed to affect disclosure 
                requirements under State law or under the 
                Employee Retirement Income Security Act of 
                1974.
                  (D) Health care professional defined.--For 
                purposes of this paragraph, the term ``health 
                care professional'' means a physician (as 
                defined in section 1861(r)) or other health 
                care professional if coverage for the 
                professional's services is provided under the 
                Medicare+Choice plan for the services of the 
                professional. Such term includes a podiatrist, 
                optometrist, chiropractor, psychologist, 
                dentist, physician assistant, physical or 
                occupational therapist and therapy assistant, 
                speech-language pathologist, audiologist, 
                registered or licensed practical nurse 
                (including nurse practitioner, clinical nurse 
                specialist, certified registered nurse 
                anesthetist, and certified nurse-midwife), 
                licensed certified social worker, registered 
                respiratory therapist, and certified 
                respiratory therapy technician.
          (4) Limitations on physician incentive plans.--
                  (A) In general.--No Medicare+Choice 
                organization may operate any physician 
                incentive plan (as defined in subparagraph (B)) 
                unless the organization provides assurances 
                satisfactory to the Secretary that the 
                following requirements are met:
                          (i) No specific payment is made 
                        directly or indirectly under the plan 
                        to a physician or physician group as an 
                        inducement to reduce or limit medically 
                        necessary services provided with 
                        respect to a specific individual 
                        enrolled with the organization.
                          (ii) If the plan places a physician 
                        or physician group at substantial 
                        financial risk (as determined by the 
                        Secretary) for services not provided by 
                        the physician or physician group, the 
                        organization provides stop-loss 
                        protection for the physician or group 
                        that is adequate and appropriate, based 
                        on standards developed by the Secretary 
                        that take into account the number of 
                        physicians placed at such substantial 
                        financial risk in the group or under 
                        the plan and the number of individuals 
                        enrolled with the organization who 
                        receive services from the physician or 
                        group.
                  (B) Physician incentive plan defined.--In 
                this paragraph, the term ``physician incentive 
                plan'' means any compensation arrangement 
                between a Medicare+Choice organization and a 
                physician or physician group that may directly 
                or indirectly have the effect of reducing or 
                limiting services provided with respect to 
                individuals enrolled with the organization 
                under this part.
          (5) Limitation on provider indemnification.--A 
        Medicare+Choice organization may not provide (directly 
        or indirectly) for a health care professional, provider 
        of services, or other entity providing health care 
        services (or group of such professionals, providers, or 
        entities) to indemnify the organization against any 
        liability resulting from a civil action brought for any 
        damage caused to an enrollee with a Medicare+Choice 
        plan of the organization under this part by the 
        organization's denial of medically necessary care.
          (6) Special rules for medicare+choice private fee-
        for-service plans.--For purposes of applying this part 
        (including subsection (k)(1)) and section 
        1866(a)(1)(O), a hospital (or other provider of 
        services), a physician or other health care 
        professional, or other entity furnishing health care 
        services is treated as having an agreement or contract 
        in effect with a Medicare+Choice organization (with 
        respect to an individual enrolled in a Medicare+Choice 
        private fee-for-service plan it offers), if--
                  (A) the provider, professional, or other 
                entity furnishes services that are covered 
                under the plan to such an enrollee; and
                  (B) before providing such services, the 
                provider, professional, or other entity --
                          (i) has been informed of the 
                        individual's enrollment under the plan, 
                        and
                          (ii) either--
                                  (I) has been informed of the 
                                terms and conditions of payment 
                                for such services under the 
                                plan, or
                                  (II) is given a reasonable 
                                opportunity to obtain 
                                information concerning such 
                                terms and conditions,
                        in a manner reasonably designed to 
                        effect informed agreement by a 
                        provider.
        The previous sentence shall only apply in the absence 
        of an explicit agreement between such a provider, 
        professional, or other entity and the Medicare+Choice 
        organization.
          (7) Promotion of E-Prescribing by MA Plans.--
                  (A) In general.--An MA-PD plan may provide 
                for a separate payment or otherwise provide for 
                a differential payment for a participating 
                physician that prescribes covered part D drugs 
                in accordance with an electronic prescription 
                drug program that meets standards established 
                under section 1860D-4(e).
                  (B) Considerations.--Such payment may take 
                into consideration the costs of the physician 
                in implementing such a program and may also be 
                increased for those participating physicians 
                who significantly increase--
                          (i) formulary compliance;
                          (ii) lower cost, therapeutically 
                        equivalent alternatives;
                          (iii) reductions in adverse drug 
                        interactions; and
                          (iv) efficiencies in filing 
                        prescriptions through reduced 
                        administrative costs.
                  (C) Structure.--Additional or increased 
                payments under this subsection may be 
                structured in the same manner as medication 
                therapy management fees are structured under 
                section 1860D-4(c)(2)(E).
  (k) Treatment of Services Furnished by Certain Providers.--
          (1) In general.--Except as provided in paragraph (2), 
        a physician or other entity (other than a provider of 
        services) that does not have a contract establishing 
        payment amounts for services furnished to an individual 
        enrolled under this part with a Medicare+Choice 
        organization described in section 1851(a)(2)(A) or with 
        an organization offering an MSA plan shall accept as 
        payment in full for covered services under this title 
        that are furnished to such an individual the amounts 
        that the physician or other entity could collect if the 
        individual were not so enrolled. Any penalty or other 
        provision of law that applies to such a payment with 
        respect to an individual entitled to benefits under 
        this title (but not enrolled with a Medicare+Choice 
        organization under this part) also applies with respect 
        to an individual so enrolled.
          (2) Application to medicare+choice private fee-for-
        service plans.--
                  (A) Balance billing limits under 
                medicare+choice private fee-for-service plans 
                in case of contract providers.--
                          (i) In general.--In the case of an 
                        individual enrolled in a 
                        Medicare+Choice private fee-for-service 
                        plan under this part, a physician, 
                        provider of services, or other entity 
                        that has a contract (including through 
                        the operation of subsection (j)(6)) 
                        establishing a payment rate for 
                        services furnished to the enrollee 
                        shall accept as payment in full for 
                        covered services under this title that 
                        are furnished to such an individual an 
                        amount not to exceed (including any 
                        deductibles, coinsurance, copayments, 
                        or balance billing otherwise permitted 
                        under the plan) an amount equal to 115 
                        percent of such payment rate.
                          (ii) Procedures to enforce limits.--
                        The Medicare+Choice organization that 
                        offers such a plan shall establish 
                        procedures, similar to the procedures 
                        described in section 1848(g)(1)(A), in 
                        order to carry out the previous 
                        sentence.
                          (iii) Assuring enforcement.--If the 
                        Medicare+Choice organization fails to 
                        establish and enforce procedures 
                        required under clause (ii), the 
                        organization is subject to intermediate 
                        sanctions under section 1857(g).
                  (B) Enrollee liability for noncontract 
                providers.--For provision--
                          (i) establishing minimum payment rate 
                        in the case of noncontract providers 
                        under a Medicare+Choice private fee-
                        for-service plan, see section 
                        1852(a)(2); or
                          (ii) limiting enrollee liability in 
                        the case of covered services furnished 
                        by such providers, see paragraph (1) 
                        and section 1866(a)(1)(O).
                  (C) Information on beneficiary liability.--
                          (i) In general.--Each Medicare+Choice 
                        organization that offers a 
                        Medicare+Choice private fee-for-service 
                        plan shall provide that enrollees under 
                        the plan who are furnished services for 
                        which payment is sought under the plan 
                        are provided an appropriate explanation 
                        of benefits (consistent with that 
                        provided under parts A and B and, if 
                        applicable, under medicare supplemental 
                        policies) that includes a clear 
                        statement of the amount of the 
                        enrollee's liability (including any 
                        liability for balance billing 
                        consistent with this subsection) with 
                        respect to payments for such services.
                          (ii) Advance notice before receipt of 
                        inpatient hospital services and certain 
                        other services.--In addition, such 
                        organization shall, in its terms and 
                        conditions of payments to hospitals for 
                        inpatient hospital services and for 
                        other services identified by the 
                        Secretary for which the amount of the 
                        balance billing under subparagraph (A) 
                        could be substantial, require the 
                        hospital to provide to the enrollee, 
                        before furnishing such services and if 
                        the hospital imposes balance billing 
                        under subparagraph (A)--
                                  (I) notice of the fact that 
                                balance billing is permitted 
                                under such subparagraph for 
                                such services, and
                                  (II) a good faith estimate of 
                                the likely amount of such 
                                balance billing (if any), with 
                                respect to such services, based 
                                upon the presenting condition 
                                of the enrollee.
  (l) Return to Home Skilled Nursing Facilities for Covered 
Post-Hospital Extended Care Services.--
          (1) Ensuring return to home snf.--
                  (A) In general.--In providing coverage of 
                post-hospital extended care services, a 
                Medicare+Choice plan shall provide for such 
                coverage through a home skilled nursing 
                facility if the following conditions are met:
                          (i) Enrollee election.--The enrollee 
                        elects to receive such coverage through 
                        such facility.
                          (ii) SNF agreement.--The facility has 
                        a contract with the Medicare+Choice 
                        organization for the provision of such 
                        services, or the facility agrees to 
                        accept substantially similar payment 
                        under the same terms and conditions 
                        that apply to similarly situated 
                        skilled nursing facilities that are 
                        under contract with the Medicare+Choice 
                        organization for the provision of such 
                        services and through which the enrollee 
                        would otherwise receive such services.
                  (B) Manner of payment to home snf.--The 
                organization shall provide payment to the home 
                skilled nursing facility consistent with the 
                contract or the agreement described in 
                subparagraph (A)(ii), as the case may be.
          (2) No less favorable coverage.--The coverage 
        provided under paragraph (1) (including scope of 
        services, cost-sharing, and other criteria of coverage) 
        shall be no less favorable to the enrollee than the 
        coverage that would be provided to the enrollee with 
        respect to a skilled nursing facility the post-hospital 
        extended care services of which are otherwise covered 
        under the Medicare+Choice plan.
          (3) Rule of construction.--Nothing in this subsection 
        shall be construed to do the following:
                  (A) To require coverage through a skilled 
                nursing facility that is not otherwise 
                qualified to provide benefits under part A for 
                medicare beneficiaries not enrolled in a 
                Medicare+Choice plan.
                  (B) To prevent a skilled nursing facility 
                from refusing to accept, or imposing conditions 
                upon the acceptance of, an enrollee for the 
                receipt of post-hospital extended care 
                services.
          (4) Definitions.--In this subsection:
                  (A) Home skilled nursing facility.--The term 
                ``home skilled nursing facility'' means, with 
                respect to an enrollee who is entitled to 
                receive post-hospital extended care services 
                under a Medicare+Choice plan, any of the 
                following skilled nursing facilities:
                          (i) SNF residence at time of 
                        admission.--The skilled nursing 
                        facility in which the enrollee resided 
                        at the time of admission to the 
                        hospital preceding the receipt of such 
                        post-hospital extended care services.
                          (ii) SNF in continuing care 
                        retirement community.--A skilled 
                        nursing facility that is providing such 
                        services through a continuing care 
                        retirement community (as defined in 
                        subparagraph (B)) which provided 
                        residence to the enrollee at the time 
                        of such admission.
                          (iii) SNF residence of spouse at time 
                        of discharge.--The skilled nursing 
                        facility in which the spouse of the 
                        enrollee is residing at the time of 
                        discharge from such hospital.
                  (B) Continuing care retirement community.--
                The term ``continuing care retirement 
                community'' means, with respect to an enrollee 
                in a Medicare+Choice plan, an arrangement under 
                which housing and health-related services are 
                provided (or arranged) through an organization 
                for the enrollee under an agreement that is 
                effective for the life of the enrollee or for a 
                specified period.

               payments to medicare+choice organizations

  Sec. 1853. (a) Payments to Organizations.--
          (1) Monthly payments.--
                  (A) In general.--Under a contract under 
                section 1857 and subject to subsections (e), 
                (g), (i), and (l) and section 1859(e)(4), the 
                Secretary shall make monthly payments under 
                this section in advance to each Medicare+Choice 
                organization, with respect to coverage of an 
                individual under this part in a Medicare+Choice 
                payment area for a month, in an amount 
                determined as follows:
                          (i) Payment before 2006.--For years 
                        before 2006, the payment amount shall 
                        be equal to \1/12\ of the annual MA 
                        capitation rate (as calculated under 
                        subsection (c)(1)) with respect to that 
                        individual for that area, adjusted 
                        under subparagraph (C) and reduced by 
                        the amount of any reduction elected 
                        under section 1854(f)(1)(E).
                          (ii) Payment for original fee-for-
                        service benefits beginning with 2006.--
                        For years beginning with 2006, the 
                        amount specified in subparagraph (B).
                  (B) Payment amount for original fee-for-
                service benefits beginning with 2006.--
                          (i) Payment of bid for plans with 
                        bids below benchmark.--In the case of a 
                        plan for which there are average per 
                        capita monthly savings described in 
                        section 1854(b)(3)(C) or 1854(b)(4)(C), 
                        as the case may be, the amount 
                        specified in this subparagraph is equal 
                        to the unadjusted MA statutory non-drug 
                        monthly bid amount, adjusted under 
                        subparagraph (C) and (if applicable) 
                        under subparagraphs (F) and (G), plus 
                        the amount (if any) of any rebate under 
                        subparagraph (E).
                          (ii) Payment of benchmark for plans 
                        with bids at or above benchmark.--In 
                        the case of a plan for which there are 
                        no average per capita monthly savings 
                        described in section 1854(b)(3)(C) or 
                        1854(b)(4)(C), as the case may be, the 
                        amount specified in this subparagraph 
                        is equal to the MA area-specific non-
                        drug monthly benchmark amount, adjusted 
                        under subparagraph (C) and (if 
                        applicable) under subparagraphs (F) and 
                        (G).
                          (iii) Payment of benchmark for msa 
                        plans.--Notwithstanding clauses (i) and 
                        (ii), in the case of an MSA plan, the 
                        amount specified in this subparagraph 
                        is equal to the MA area-specific non-
                        drug monthly benchmark amount, adjusted 
                        under subparagraph (C).
                          (iv) Authority to apply frailty 
                        adjustment under pace payment rules for 
                        certain specialized ma plans for 
                        special needs individuals.--
                                  (I) In general.--
                                Notwithstanding the preceding 
                                provisions of this paragraph, 
                                for plan year 2011 and 
                                subsequent plan years, in the 
                                case of a plan described in 
                                subclause (II), the Secretary 
                                may apply the payment rules 
                                under section 1894(d) (other 
                                than paragraph (3) of such 
                                section) rather than the 
                                payment rules that would 
                                otherwise apply under this 
                                part, but only to the extent 
                                necessary to reflect the costs 
                                of treating high concentrations 
                                of frail individuals.
                                  (II) Plan described.--A plan 
                                described in this subclause is 
                                a specialized MA plan for 
                                special needs individuals 
                                described in section 
                                1859(b)(6)(B)(ii) that is fully 
                                integrated with capitated 
                                contracts with States for 
                                Medicaid benefits, including 
                                long-term care, and that have 
                                similar average levels of 
                                frailty (as determined by the 
                                Secretary) as the PACE program.
                  (C) Demographic adjustment, including 
                adjustment for health status.--
                          (i) In general.--The Secretary shall 
                        adjust the payment amount under 
                        subparagraph (A)(i) and the amount 
                        specified under subparagraph (B)(i), 
                        (B)(ii), and (B)(iii) for such risk 
                        factors as age, disability status, 
                        gender, institutional status, and such 
                        other factors as the Secretary 
                        determines to be appropriate, including 
                        adjustment for health status under 
                        paragraph (3), so as to ensure 
                        actuarial equivalence. The Secretary 
                        may add to, modify, or substitute for 
                        such adjustment factors if such changes 
                        will improve the determination of 
                        actuarial equivalence.
                          (ii) Application of coding 
                        adjustment.--For 2006 and each 
                        subsequent year:
                                  (I) In applying the 
                                adjustment under clause (i) for 
                                health status to payment 
                                amounts, the Secretary shall 
                                ensure that such adjustment 
                                reflects changes in treatment 
                                and coding practices in the 
                                fee-for-service sector and 
                                reflects differences in coding 
                                patterns between Medicare 
                                Advantage plans and providers 
                                under part A and B to the 
                                extent that the Secretary has 
                                identified such differences.
                                  (II) In order to ensure 
                                payment accuracy, the Secretary 
                                shall annually conduct an 
                                analysis of the differences 
                                described in subclause (I). The 
                                Secretary shall complete such 
                                analysis by a date necessary to 
                                ensure that the results of such 
                                analysis are incorporated on a 
                                timely basis into the risk 
                                scores for 2008 and subsequent 
                                years. In conducting such 
                                analysis, the Secretary shall 
                                use data submitted with respect 
                                to 2004 and subsequent years, 
                                as available and updated as 
                                appropriate.
                                  (III) In calculating each 
                                year's adjustment, the 
                                adjustment factor shall be for 
                                2014, not less than the 
                                adjustment factor applied for 
                                2010, plus 1.5 percentage 
                                points; for each of years 2015 
                                through 2018, not less than the 
                                adjustment factor applied for 
                                the previous year, plus 0.25 
                                percentage point; and for 2019 
                                and each subsequent year, not 
                                less than 5.9 percent.
                                  (IV) Such adjustment shall be 
                                applied to risk scores until 
                                the Secretary implements risk 
                                adjustment using Medicare 
                                Advantage diagnostic, cost, and 
                                use data.
                          (iii) Improvements to risk adjustment 
                        for special needs individuals with 
                        chronic health conditions.--
                                  (I) In general.--For 2011 and 
                                subsequent years, for purposes 
                                of the adjustment under clause 
                                (i) with respect to individuals 
                                described in subclause (II), 
                                the Secretary shall use a risk 
                                score that reflects the known 
                                underlying risk profile and 
                                chronic health status of 
                                similar individuals. Such risk 
                                score shall be used instead of 
                                the default risk score for new 
                                enrollees in Medicare Advantage 
                                plans that are not specialized 
                                MA plans for special needs 
                                individuals (as defined in 
                                section 1859(b)(6)).
                                  (II) Individuals described.--
                                An individual described in this 
                                subclause is a special needs 
                                individual described in 
                                subsection (b)(6)(B)(iii) who 
                                enrolls in a specialized MA 
                                plan for special needs 
                                individuals on or after January 
                                1, 2011.
                                  (III) Evaluation.--For 2011 
                                and periodically thereafter, 
                                the Secretary shall evaluate 
                                and revise the risk adjustment 
                                system under this subparagraph 
                                in order to, as accurately as 
                                possible, account for higher 
                                medical and care coordination 
                                costs associated with frailty, 
                                individuals with multiple, 
                                comorbid chronic conditions, 
                                and individuals with a 
                                diagnosis of mental illness, 
                                and also to account for costs 
                                that may be associated with 
                                higher concentrations of 
                                beneficiaries with those 
                                conditions.
                                  (IV) Publication of 
                                evaluation and revisions.--The 
                                Secretary shall publish, as 
                                part of an announcement under 
                                subsection (b), a description 
                                of any evaluation conducted 
                                under subclause (III) during 
                                the preceding year and any 
                                revisions made under such 
                                subclause as a result of such 
                                evaluation.
                  (D) Separate payment for federal drug 
                subsidies.--In the case of an enrollee in an 
                MA-PD plan, the MA organization offering such 
                plan also receives--
                          (i) subsidies under section 1860D-15 
                        (other than under subsection (g)); and
                          (ii) reimbursement for premium and 
                        cost-sharing reductions for low-income 
                        individuals under section 1860D-
                        14(c)(1)(C).
                  (E) Payment of rebate for plans with bids 
                below benchmark.--In the case of a plan for 
                which there are average per capita monthly 
                savings described in section 1854(b)(3)(C) or 
                1854(b)(4)(C), as the case may be, the amount 
                specified in this subparagraph is the amount of 
                the monthly rebate computed under section 
                1854(b)(1)(C)(i) for that plan and year (as 
                reduced by the amount of any credit provided 
                under section 1854(b)(1)(C)(iv)).
                  (F) Adjustment for intra-area variations.--
                          (i) Intra-regional variations.--In 
                        the case of payment with respect to an 
                        MA regional plan for an MA region, the 
                        Secretary shall also adjust the amounts 
                        specified under subparagraphs (B)(i) 
                        and (B)(ii) in a manner to take into 
                        account variations in MA local payment 
                        rates under this part among the 
                        different MA local areas included in 
                        such region.
                          (ii) Intra-service area variations.--
                        In the case of payment with respect to 
                        an MA local plan for a service area 
                        that covers more than one MA local 
                        area, the Secretary shall also adjust 
                        the amounts specified under 
                        subparagraphs (B)(i) and (B)(ii) in a 
                        manner to take into account variations 
                        in MA local payment rates under this 
                        part among the different MA local areas 
                        included in such service area.
                  (G) Adjustment relating to risk adjustment.--
                The Secretary shall adjust payments with 
                respect to MA plans as necessary to ensure 
                that--
                          (i) the sum of--
                                  (I) the monthly payment made 
                                under subparagraph (A)(ii); and
                                  (II) the MA monthly basic 
                                beneficiary premium under 
                                section 1854(b)(2)(A); equals
                          (ii) the unadjusted MA statutory non-
                        drug monthly bid amount, adjusted in 
                        the manner described in subparagraph 
                        (C) and, for an MA regional plan, 
                        subparagraph (F).
                  (H) Special rule for end-stage renal 
                disease.--The Secretary shall establish 
                separate rates of payment to a Medicare+Choice 
                organization with respect to classes of 
                individuals determined to have end-stage renal 
                disease and enrolled in a Medicare+Choice plan 
                of the organization. Such rates of payment 
                shall be actuarially equivalent to rates that 
                would have been paid with respect to other 
                enrollees in the MA payment area (or such other 
                area as specified by the Secretary) under the 
                provisions of this section as in effect before 
                the date of the enactment of the Medicare 
                Prescription Drug, Improvement, and 
                Modernization Act of 2003. In accordance with 
                regulations, the Secretary shall provide for 
                the application of the seventh sentence of 
                section 1881(b)(7) to payments under this 
                section covering the provision of renal 
                dialysis treatment in the same manner as such 
                sentence applies to composite rate payments 
                described in such sentence. In establishing 
                such rates, the Secretary shall provide for 
                appropriate adjustments to increase each rate 
                to reflect the demonstration rate (including 
                the risk adjustment methodology associated with 
                such rate) of the social health maintenance 
                organization end-stage renal disease capitation 
                demonstrations (established by section 2355 of 
                the Deficit Reduction Act of 1984, as amended 
                by section 13567(b) of the Omnibus Budget 
                Reconciliation Act of 1993), and shall compute 
                such rates by taking into account such factors 
                as renal treatment modality, age, and the 
                underlying cause of the end-stage renal 
                disease. The Secretary may apply the 
                competitive bidding methodology provided for in 
                this section, with appropriate adjustments to 
                account for the risk adjustment methodology 
                applied to end stage renal disease payments.
          (2) Adjustment to reflect number of enrollees.--
                  (A) In general.--The amount of payment under 
                this subsection may be retroactively adjusted 
                to take into account any difference between the 
                actual number of individuals enrolled with an 
                organization under this part and the number of 
                such individuals estimated to be so enrolled in 
                determining the amount of the advance payment.
                  (B) Special rule for certain enrollees.--
                          (i) In general.--Subject to clause 
                        (ii), the Secretary may make 
                        retroactive adjustments under 
                        subparagraph (A) to take into account 
                        individuals enrolled during the period 
                        beginning on the date on which the 
                        individual enrolls with a 
                        Medicare+Choice organization under a 
                        plan operated, sponsored, or 
                        contributed to by the individual's 
                        employer or former employer (or the 
                        employer or former employer of the 
                        individual's spouse) and ending on the 
                        date on which the individual is 
                        enrolled in the organization under this 
                        part, except that for purposes of 
                        making such retroactive adjustments 
                        under this subparagraph, such period 
                        may not exceed 90 days.
                          (ii) Exception.--No adjustment may be 
                        made under clause (i) with respect to 
                        any individual who does not certify 
                        that the organization provided the 
                        individual with the disclosure 
                        statement described in section 1852(c) 
                        at the time the individual enrolled 
                        with the organization.
          (3) Establishment of risk adjustment factors.--
                  (A) Report.--The Secretary shall develop, and 
                submit to Congress by not later than March 1, 
                1999, a report on the method of risk adjustment 
                of payment rates under this section, to be 
                implemented under subparagraph (C), that 
                accounts for variations in per capita costs 
                based on health status. Such report shall 
                include an evaluation of such method by an 
                outside, independent actuary of the actuarial 
                soundness of the proposal.
                  (B) Data collection.--In order to carry out 
                this paragraph, the Secretary shall require 
                Medicare+Choice organizations (and eligible 
                organizations with risk-sharing contracts under 
                section 1876) to submit data regarding 
                inpatient hospital services for periods 
                beginning on or after July 1, 1997, and data 
                regarding other services and other information 
                as the Secretary deems necessary for periods 
                beginning on or after July 1, 1998. The 
                Secretary may not require an organization to 
                submit such data before January 1, 1998.
                  (C) Initial implementation.--
                          (i) In general.--The Secretary shall 
                        first provide for implementation of a 
                        risk adjustment methodology that 
                        accounts for variations in per capita 
                        costs based on health status and other 
                        demographic factors for payments by no 
                        later than January 1, 2000.
                          (ii) Phase-in.--Except as provided in 
                        clause (iv), such risk adjustment 
                        methodology shall be implemented in a 
                        phased-in manner so that the 
                        methodology insofar as it makes 
                        adjustments to capitation rates for 
                        health status applies to--
                                  (I) 10 percent of \1/12\ of 
                                the annual Medicare+Choice 
                                capitation rate in 2000 and 
                                each succeeding year through 
                                2003;
                                  (II) 30 percent of such 
                                capitation rate in 2004;
                                  (III) 50 percent of such 
                                capitation rate in 2005;
                                  (IV) 75 percent of such 
                                capitation rate in 2006; and
                                  (V) 100 percent of such 
                                capitation rate in 2007 and 
                                succeeding years.
                          (iii) Data for risk adjustment 
                        methodology.--Such risk adjustment 
                        methodology for 2004 and each 
                        succeeding year, shall be based on data 
                        from inpatient hospital and ambulatory 
                        settings.
                          (iv) Full implementation of risk 
                        adjustment for congestive heart failure 
                        enrollees for 2001.--
                                  (I) Exemption from phase-
                                in.--Subject to subclause (II), 
                                the Secretary shall fully 
                                implement the risk adjustment 
                                methodology described in clause 
                                (i) with respect to each 
                                individual who has had a 
                                qualifying congestive heart 
                                failure inpatient diagnosis (as 
                                determined by the Secretary 
                                under such risk adjustment 
                                methodology) during the period 
                                beginning on July 1, 1999, and 
                                ending on June 30, 2000, and 
                                who is enrolled in a 
                                coordinated care plan that is 
                                the only coordinated care plan 
                                offered on January 1, 2001, in 
                                the service area of the 
                                individual.
                                  (II) Period of application.--
                                Subclause (I) shall only apply 
                                during the 1-year period 
                                beginning on January 1, 2001.
                  (D) Uniform application to all types of 
                plans.--Subject to section 1859(e)(4), the 
                methodology shall be applied uniformly without 
                regard to the type of plan.
  (4) Payment rule for federally qualified health center 
services.--If an individual who is enrolled with an MA plan 
under this part receives a service from a federally qualified 
health center that has a written agreement with the MA 
organization that offers such plan for providing such a service 
(including any agreement required under section 1857(e)(3))--
          (A) the Secretary shall pay the amount determined 
        under section 1833(a)(3)(B) directly to the federally 
        qualified health center not less frequently than 
        quarterly; and
          (B) the Secretary shall not reduce the amount of the 
        monthly payments under this subsection as a result of 
        the application of subparagraph (A).
  (b) Annual Announcement of Payment Rates.--
          (1) Annual announcements.--
                  (A) For 2005.--The Secretary shall determine, 
                and shall announce (in a manner intended to 
                provide notice to interested parties), not 
                later than the second Monday in May of 2004, 
                with respect to each MA payment area, the 
                following:
                          (i) MA capitation rates.--The annual 
                        MA capitation rate for each MA payment 
                        area for 2005.
                          (ii) Adjustment factors.--The risk 
                        and other factors to be used in 
                        adjusting such rates under subsection 
                        (a)(1)(C) for payments for months in 
                        2005.
                  (B) For 2006 and subsequent years.--For a 
                year after 2005--
                          (i) Initial announcement.--The 
                        Secretary shall determine, and shall 
                        announce (in a manner intended to 
                        provide notice to interested parties), 
                        not later than the first Monday in 
                        April before the calendar year 
                        concerned, with respect to each MA 
                        payment area, the following:
                                  (I) MA capitation rates; ma 
                                local area benchmark.--The 
                                annual MA capitation rate for 
                                each MA payment area for the 
                                year.
                                  (II) Adjustment factors.--The 
                                risk and other factors to be 
                                used in adjusting such rates 
                                under subsection (a)(1)(C) for 
                                payments for months in such 
                                year.
                          (ii) Regional benchmark 
                        announcement.--The Secretary shall 
                        determine, and shall announce (in a 
                        manner intended to provide notice to 
                        interested parties), on a timely basis 
                        before the calendar year concerned, 
                        with respect to each MA region and each 
                        MA regional plan for which a bid was 
                        submitted under section 1854, the MA 
                        region-specific non-drug monthly 
                        benchmark amount for that region for 
                        the year involved.
                          (iii) Benchmark announcement for cca 
                        local areas.--The Secretary shall 
                        determine, and shall announce (in a 
                        manner intended to provide notice to 
                        interested parties), on a timely basis 
                        before the calendar year concerned, 
                        with respect to each CCA area (as 
                        defined in section 1860C-1(b)(1)(A)), 
                        the CCA non-drug monthly benchmark 
                        amount under section 1860C-1(e)(1) for 
                        that area for the year involved.
          (2) Advance notice of methodological changes.--At 
        least 45 days (or, in 2017 and each subsequent year, at 
        least 60 days) before making the announcement under 
        paragraph (1) for a year, the Secretary shall provide 
        for notice to Medicare+Choice organizations of proposed 
        changes to be made in the methodology from the 
        methodology and assumptions used in the previous 
        announcement and shall provide such organizations an 
        opportunity (in 2017 and each subsequent year, of no 
        less than 30 days) to comment on such proposed changes.
          (3) Explanation of assumptions.--In each announcement 
        made under paragraph (1), the Secretary shall include 
        an explanation of the assumptions and changes in 
        methodology used in such announcement.
          (4) Continued computation and publication of county-
        specific per capita fee-for-service expenditure 
        information.--The Secretary, through the Chief Actuary 
        of the Centers for Medicare & Medicaid Services, shall 
        provide for the computation and publication, on an 
        annual basis beginning with 2001 at the time of 
        publication of the annual Medicare+Choice capitation 
        rates under paragraph (1), of the following information 
        for the original medicare fee-for-service program under 
        parts A and B (exclusive of individuals eligible for 
        coverage under section 226A) for each Medicare+Choice 
        payment area for the second calendar year ending before 
        the date of publication:
                  (A) Total expenditures per capita per month, 
                computed separately for part A and for part B.
                  (B) The expenditures described in 
                subparagraph (A) reduced by the best estimate 
                of the expenditures (such as graduate medical 
                education and disproportionate share hospital 
                payments) not related to the payment of claims.
                  (C) The average risk factor for the covered 
                population based on diagnoses reported for 
                medicare inpatient services, using the same 
                methodology as is expected to be applied in 
                making payments under subsection (a).
                  (D) Such average risk factor based on 
                diagnoses for inpatient and other sites of 
                service, using the same methodology as is 
                expected to be applied in making payments under 
                subsection (a).
  (c) Calculation of Annual Medicare+Choice Capitation Rates.--
          (1) In general.--For purposes of this part, subject 
        to paragraphs (6)(C) and (7), each annual 
        Medicare+Choice capitation rate, for a Medicare+Choice 
        payment area that is an MA local area for a contract 
        year consisting of a calendar year, is equal to the 
        largest of the amounts specified in the following 
        subparagraph (A), (B), (C), or (D):
                  (A) Blended capitation rate.--For a year 
                before 2005, the sum of--
                          (i) the area-specific percentage (as 
                        specified under paragraph (2) for the 
                        year) of the annual area-specific 
                        Medicare+Choice capitation rate for the 
                        Medicare+Choice payment area, as 
                        determined under paragraph (3) for the 
                        year, and
                          (ii) the national percentage (as 
                        specified under paragraph (2) for the 
                        year) of the input-price-adjusted 
                        annual national Medicare+Choice 
                        capitation rate, as determined under 
                        paragraph (4) for the year,
                multiplied (for a year other than 2004) by the 
                budget neutrality adjustment factor determined 
                under paragraph (5).
                  (B) Minimum amount.--12 multiplied by the 
                following amount:
                          (i) For 1998, $367 (but not to 
                        exceed, in the case of an area outside 
                        the 50 States and the District of 
                        Columbia, 150 percent of the annual per 
                        capita rate of payment for 1997 
                        determined under section 1876(a)(1)(C) 
                        for the area).
                          (ii) For 1999 and 2000, the minimum 
                        amount determined under clause (i) or 
                        this clause, respectively, for the 
                        preceding year, increased by the 
                        national per capita Medicare+Choice 
                        growth percentage described in 
                        paragraph (6)(A) applicable to 1999 or 
                        2000, respectively.
                          (iii)(I) Subject to subclause (II), 
                        for 2001, for any area in a 
                        Metropolitan Statistical Area with a 
                        population of more than 250,000, $525, 
                        and for any other area $475.
                          (II) In the case of an area outside 
                        the 50 States and the District of 
                        Columbia, the amount specified in this 
                        clause shall not exceed 120 percent of 
                        the amount determined under clause (ii) 
                        for such area for 2000.
                          (iv) For 2002, 2003, and 2004, the 
                        minimum amount specified in this clause 
                        (or clause (iii)) for the preceding 
                        year increased by the national per 
                        capita Medicare+Choice growth 
                        percentage, described in paragraph 
                        (6)(A) for that succeeding year.
                  (C) Minimum percentage increase.--
                          (i) For 1998, 102 percent of the 
                        annual per capita rate of payment for 
                        1997 determined under section 
                        1876(a)(1)(C) for the Medicare+Choice 
                        payment area.
                          (ii) For 1999 and 2000, 102 percent 
                        of the annual Medicare+Choice 
                        capitation rate under this paragraph 
                        for the area for the previous year.
                          (iii) For 2001, 103 percent of the 
                        annual Medicare+Choice capitation rate 
                        under this paragraph for the area for 
                        2000.
                          (iv) For 2002 and 2003, 102 percent 
                        of the annual Medicare+Choice 
                        capitation rate under this paragraph 
                        for the area for the previous year.
                          (v) For 2004 and each succeeding 
                        year, the greater of--
                                  (I) 102 percent of the annual 
                                MA capitation rate under this 
                                paragraph for the area for the 
                                previous year; or
                                  (II) the annual MA capitation 
                                rate under this paragraph for 
                                the area for the previous year 
                                increased by the national per 
                                capita MA growth percentage, 
                                described in paragraph (6) for 
                                that succeeding year, but not 
                                taking into account any 
                                adjustment under paragraph 
                                (6)(C) for a year before 2004.
                  (D)  100 percent of fee-for-service costs.--
                          (i) In general.--For each year 
                        specified in clause (ii), the adjusted 
                        average per capita cost for the year 
                        involved, determined under section 
                        1876(a)(4) and adjusted as appropriate 
                        for the purpose of risk adjustment, for 
                        the MA payment area for individuals who 
                        are not enrolled in an MA plan under 
                        this part for the year, but adjusted to 
                        exclude costs attributable to payments 
                        under sections, 1848(o), and 1886(n) 
                        and 1886(h).
                          (ii) Periodic rebasing.--The 
                        provisions of clause (i) shall apply 
                        for 2004 and for subsequent years as 
                        the Secretary shall specify (but not 
                        less than once every 3 years).
                          (iii) Inclusion of costs of va and 
                        dod military facility services to 
                        medicare-eligible beneficiaries.--In 
                        determining the adjusted average per 
                        capita cost under clause (i) for a 
                        year, such cost shall be adjusted to 
                        include the Secretary's estimate, on a 
                        per capita basis, of the amount of 
                        additional payments that would have 
                        been made in the area involved under 
                        this title if individuals entitled to 
                        benefits under this title had not 
                        received services from facilities of 
                        the Department of Defense or the 
                        Department of Veterans Affairs.
          (2) Area-specific and national percentages.--For 
        purposes of paragraph (1)(A)--
                  (A) for 1998, the ``area-specific 
                percentage'' is 90 percent and the ``national 
                percentage'' is 10 percent,
                  (B) for 1999, the ``area-specific 
                percentage'' is 82 percent and the ``national 
                percentage'' is 18 percent,
                  (C) for 2000, the ``area-specific 
                percentage'' is 74 percent and the ``national 
                percentage'' is 26 percent,
                  (D) for 2001, the ``area-specific 
                percentage'' is 66 percent and the ``national 
                percentage'' is 34 percent,
                  (E) for 2002, the ``area-specific 
                percentage'' is 58 percent and the ``national 
                percentage'' is 42 percent, and
                  (F) for a year after 2002, the ``area-
                specific percentage'' is 50 percent and the 
                ``national percentage'' is 50 percent.
          (3) Annual area-specific medicare+choice capitation 
        rate.--
                  (A) In general.--For purposes of paragraph 
                (1)(A), subject to subparagraphs (B) and (E), 
                the annual area-specific Medicare+Choice 
                capitation rate for a Medicare+Choice payment 
                area--
                          (i) for 1998 is, subject to 
                        subparagraph (D), the annual per capita 
                        rate of payment for 1997 determined 
                        under section 1876(a)(1)(C) for the 
                        area, increased by the national per 
                        capita Medicare+Choice growth 
                        percentage for 1998 (described in 
                        paragraph (6)(A)); or
                          (ii) for a subsequent year is the 
                        annual area-specific Medicare+Choice 
                        capitation rate for the previous year 
                        determined under this paragraph for the 
                        area, increased by the national per 
                        capita Medicare+Choice growth 
                        percentage for such subsequent year.
                  (B) Removal of medical education from 
                calculation of adjusted average per capita 
                cost.--
                          (i) In general.--In determining the 
                        area-specific Medicare+Choice 
                        capitation rate under subparagraph (A) 
                        for a year (beginning with 1998), the 
                        annual per capita rate of payment for 
                        1997 determined under section 
                        1876(a)(1)(C) shall be adjusted to 
                        exclude from the rate the applicable 
                        percent (specified in clause (ii)) of 
                        the payment adjustments described in 
                        subparagraph (C).
                          (ii) Applicable percent.--For 
                        purposes of clause (i), the applicable 
                        percent for--
                                  (I) 1998 is 20 percent,
                                  (II) 1999 is 40 percent,
                                  (III) 2000 is 60 percent,
                                  (IV) 2001 is 80 percent, and
                                  (V) a succeeding year is 100 
                                percent.
                  (C) Payment adjustment.--
                          (i) In general.--Subject to clause 
                        (ii), the payment adjustments described 
                        in this subparagraph are payment 
                        adjustments which the Secretary 
                        estimates were payable during 1997--
                                  (I) for the indirect costs of 
                                medical education under section 
                                1886(d)(5)(B), and
                                  (II) for direct graduate 
                                medical education costs under 
                                section 1886(h).
                          (ii) Treatment of payments covered 
                        under state hospital reimbursement 
                        system.--To the extent that the 
                        Secretary estimates that an annual per 
                        capita rate of payment for 1997 
                        described in clause (i) reflects 
                        payments to hospitals reimbursed under 
                        section 1814(b)(3), the Secretary shall 
                        estimate a payment adjustment that is 
                        comparable to the payment adjustment 
                        that would have been made under clause 
                        (i) if the hospitals had not been 
                        reimbursed under such section.
                  (D) Treatment of areas with highly variable 
                payment rates.--In the case of a 
                Medicare+Choice payment area for which the 
                annual per capita rate of payment determined 
                under section 1876(a)(1)(C) for 1997 varies by 
                more than 20 percent from such rate for 1996, 
                for purposes of this subsection the Secretary 
                may substitute for such rate for 1997 a rate 
                that is more representative of the costs of the 
                enrollees in the area.
                  (E) Inclusion of costs of dod and va military 
                facility services to medicare-eligible 
                beneficiaries.--In determining the area-
                specific MA capitation rate under subparagraph 
                (A) for a year (beginning with 2004), the 
                annual per capita rate of payment for 1997 
                determined under section 1876(a)(1)(C) shall be 
                adjusted to include in the rate the Secretary's 
                estimate, on a per capita basis, of the amount 
                of additional payments that would have been 
                made in the area involved under this title if 
                individuals entitled to benefits under this 
                title had not received services from facilities 
                of the Department of Defense or the Department 
                of Veterans Affairs.
          (4) Input-price-adjusted annual national 
        medicare+choice capitation rate.--
                  (A) In general.--For purposes of paragraph 
                (1)(A), the input-price-adjusted annual 
                national Medicare+Choice capitation rate for a 
                Medicare+Choice payment area for a year is 
                equal to the sum, for all the types of medicare 
                services (as classified by the Secretary), of 
                the product (for each such type of service) 
                of--
                          (i) the national standardized annual 
                        Medicare+Choice capitation rate 
                        (determined under subparagraph (B)) for 
                        the year,
                          (ii) the proportion of such rate for 
                        the year which is attributable to such 
                        type of services, and
                          (iii) an index that reflects (for 
                        that year and that type of services) 
                        the relative input price of such 
                        services in the area compared to the 
                        national average input price of such 
                        services.
                In applying clause (iii), the Secretary may, 
                subject to subparagraph (C), apply those 
                indices under this title that are used in 
                applying (or updating) national payment rates 
                for specific areas and localities.
                  (B) National standardized annual 
                medicare+choice capitation rate.--In 
                subparagraph (A)(i), the ``national 
                standardized annual Medicare+Choice capitation 
                rate'' for a year is equal to--
                          (i) the sum (for all Medicare+Choice 
                        payment areas) of the product of--
                                  (I) the annual area-specific 
                                Medicare+Choice capitation rate 
                                for that year for the area 
                                under paragraph (3), and
                                  (II) the average number of 
                                medicare beneficiaries residing 
                                in that area in the year, 
                                multiplied by the average of 
                                the risk factor weights used to 
                                adjust payments under 
                                subsection (a)(1)(A) for such 
                                beneficiaries in such area; 
                                divided by
                          (ii) the sum of the products 
                        described in clause (i)(II) for all 
                        areas for that year.
                  (C) Special rules for 1998.--In applying this 
                paragraph for 1998--
                          (i) medicare services shall be 
                        divided into 2 types of services: part 
                        A services and part B services;
                          (ii) the proportions described in 
                        subparagraph (A)(ii)--
                                  (I) for part A services shall 
                                be the ratio (expressed as a 
                                percentage) of the national 
                                average annual per capita rate 
                                of payment for part A for 1997 
                                to the total national average 
                                annual per capita rate of 
                                payment for parts A and B for 
                                1997, and
                                  (II) for part B services 
                                shall be 100 percent minus the 
                                ratio described in subclause 
                                (I);
                          (iii) for part A services, 70 percent 
                        of payments attributable to such 
                        services shall be adjusted by the index 
                        used under section 1886(d)(3)(E) to 
                        adjust payment rates for relative 
                        hospital wage levels for hospitals 
                        located in the payment area involved;
                          (iv) for part B services--
                                  (I) 66 percent of payments 
                                attributable to such services 
                                shall be adjusted by the index 
                                of the geographic area factors 
                                under section 1848(e) used to 
                                adjust payment rates for 
                                physicians' services furnished 
                                in the payment area, and
                                  (II) of the remaining 34 
                                percent of the amount of such 
                                payments, 40 percent shall be 
                                adjusted by the index described 
                                in clause (iii); and
                          (v) the index values shall be 
                        computed based only on the beneficiary 
                        population who are 65 years of age or 
                        older and who are not determined to 
                        have end stage renal disease.
                The Secretary may continue to apply the rules 
                described in this subparagraph (or similar 
                rules) for 1999.
          (5) Payment adjustment budget neutrality factor.--For 
        purposes of paragraph (1)(A), for each year (other than 
        2004), the Secretary shall determine a budget 
        neutrality adjustment factor so that the aggregate of 
        the payments under this part (other than those 
        attributable to subsections (a)(3)(C)(iv), (a)(4), and 
        (i) shall equal the aggregate payments that would have 
        been made under this part if payment were based 
        entirely on area-specific capitation rates.
          (6) National per capita medicare+choice growth 
        percentage defined.--
                  (A) In general.--In this part, the ``national 
                per capita Medicare+Choice growth percentage'' 
                for a year is the percentage determined by the 
                Secretary, by March 1st before the beginning of 
                the year involved, to reflect the Secretary's 
                estimate of the projected per capita rate of 
                growth in expenditures under this title for an 
                individual entitled to benefits under part A 
                and enrolled under part B, excluding 
                expenditures attributable to subsections (a)(7) 
                and (o) of section 1848 and subsections 
                (b)(3)(B)(ix) and (n) of section 1886, reduced 
                by the number of percentage points specified in 
                subparagraph (B) for the year. Separate 
                determinations may be made for aged enrollees, 
                disabled enrollees, and enrollees with end-
                stage renal disease.
                  (B) Adjustment.--The number of percentage 
                points specified in this subparagraph is--
                          (i) for 1998, 0.8 percentage points,
                          (ii) for 1999, 0.5 percentage points,
                          (iii) for 2000, 0.5 percentage 
                        points,
                          (iv) for 2001, 0.5 percentage points,
                          (v) for 2002, 0.3 percentage points, 
                        and
                          (vi) for a year after 2002, 0 
                        percentage points.
                  (C) Adjustment for over or under projection 
                of national per capita medicare+choice growth 
                percentage.--Beginning with rates calculated 
                for 1999, before computing rates for a year as 
                described in paragraph (1), the Secretary shall 
                adjust all area-specific and national 
                Medicare+Choice capitation rates (and beginning 
                in 2000, the minimum amount) for the previous 
                year for the differences between the 
                projections of the national per capita 
                Medicare+Choice growth percentage for that year 
                and previous years and the current estimate of 
                such percentage for such years, except that for 
                purposes of paragraph (1)(C)(v)(II), no such 
                adjustment shall be made for a year before 
                2004.
          (7) Adjustment for national coverage determinations 
        and legislative changes in benefits.--If the Secretary 
        makes a determination with respect to coverage under 
        this title or there is a change in benefits required to 
        be provided under this part that the Secretary projects 
        will result in a significant increase in the costs to 
        Medicare+Choice of providing benefits under contracts 
        under this part (for periods after any period described 
        in section 1852(a)(5)), the Secretary shall adjust 
        appropriately the payments to such organizations under 
        this part. Such projection and adjustment shall be 
        based on an analysis by the Chief Actuary of the 
        Centers for Medicare & Medicaid Services of the 
        actuarial costs associated with the new benefits.
  (d) MA Payment Area; MA Local Area; MA Region Defined.--
          (1) MA payment area.--In this part, except as 
        provided in this subsection, the term ``MA payment 
        area'' means--
                  (A) with respect to an MA local plan, an MA 
                local area (as defined in paragraph (2)); and
                  (B) with respect to an MA regional plan, an 
                MA region (as established under section 
                1858(a)(2)).
          (2) MA local area.--The term ``MA local area'' means 
        a county or equivalent area specified by the Secretary.
          (3) Rule for esrd beneficiaries.--In the case of 
        individuals who are determined to have end stage renal 
        disease, the Medicare+Choice payment area shall be a 
        State or such other payment area as the Secretary 
        specifies.
          (4) Geographic adjustment.--
                  (A) In general.--Upon written request of the 
                chief executive officer of a State for a 
                contract year (beginning after 1998) made by 
                not later than February 1 of the previous year, 
                the Secretary shall make a geographic 
                adjustment to a Medicare+Choice payment area in 
                the State otherwise determined under paragraph 
                (1) for MA local plans--
                          (i) to a single statewide 
                        Medicare+Choice payment area,
                          (ii) to the metropolitan based system 
                        described in subparagraph (C), or
                          (iii) to consolidating into a single 
                        Medicare+Choice payment area 
                        noncontiguous counties (or equivalent 
                        areas described inparagraph (1)(A)) 
                        within a State.
                Such adjustment shall be effective for payments 
                for months beginning with January of the year 
                following the year in which the request is 
                received.
                  (B) Budget neutrality adjustment.--In the 
                case of a State requesting an adjustment under 
                this paragraph, the Secretary shall initially 
                (and annually thereafter) adjust the payment 
                rates otherwise established under this section 
                with respect to MA local plans for 
                Medicare+Choice payment areas in the State in a 
                manner so that the aggregate of the payments 
                under this section for such plans in the State 
                shall not exceed the aggregate payments that 
                would have been made under this section for 
                such plans for Medicare+Choice payment areas in 
                the State in the absence of the adjustment 
                under this paragraph.
                  (C) Metropolitan based system.--The 
                metropolitan based system described in this 
                subparagraph is one in which--
                          (i) all the portions of each 
                        metropolitan statistical area in the 
                        State or in the case of a consolidated 
                        metropolitan statistical area, all of 
                        the portions of each primary 
                        metropolitan statistical area within 
                        the consolidated area within the State, 
                        are treated as a single Medicare+Choice 
                        payment area, and
                          (ii) all areas in the State that do 
                        not fall within a metropolitan 
                        statistical area are treated as a 
                        single Medicare+Choice payment area.
                  (D) Areas.--In subparagraph (C), the terms 
                ``metropolitan statistical area'', 
                ``consolidated metropolitan statistical area'', 
                and ``primary metropolitan statistical area'' 
                mean any area designated as such by the 
                Secretary of Commerce.
  (e) Special Rules for Individuals Electing MSA Plans.--
          (1) In general.--If the amount of the Medicare+Choice 
        monthly MSA premium (as defined in section 
        1854(b)(2)(C)) for an MSA plan for a year is less than 
        \1/12\ of the annual Medicare+Choice capitation rate 
        applied under this section for the area and year 
        involved, the Secretary shall deposit an amount equal 
        to 100 percent of such difference in a Medicare+Choice 
        MSA established (and, if applicable, designated) by the 
        individual under paragraph (2).
          (2) Establishment and designation of medicare+choice 
        medical savings account as requirement for payment of 
        contribution.--In the case of an individual who has 
        elected coverage under an MSA plan, no payment shall be 
        made under paragraph (1) on behalf of an individual for 
        a month unless the individual--
                  (A) has established before the beginning of 
                the month (or by such other deadline as the 
                Secretary may specify) a Medicare+Choice MSA 
                (as defined in section 138(b)(2) of the 
                Internal Revenue Code of 1986), and
                  (B) if the individual has established more 
                than one such Medicare+Choice MSA, has 
                designated one of such accounts as the 
                individual's Medicare+Choice MSA for purposes 
                of this part.
        Under rules under this section, such an individual may 
        change the designation of such account under 
        subparagraph (B) for purposes of this part.
          (3) Lump-sum deposit of medical savings account 
        contribution.--In the case of an individual electing an 
        MSA plan effective beginning with a month in a year, 
        the amount of the contribution to the Medicare+Choice 
        MSA on behalf of the individual for that month and all 
        successive months in the year shall be deposited during 
        that first month. In the case of a termination of such 
        an election as of a month before the end of a year, the 
        Secretary shall provide for a procedure for the 
        recovery of deposits attributable to the remaining 
        months in the year.
  (f) Payments From Trust Funds.--The payment to a 
Medicare+Choice organization under this section for individuals 
enrolled under this part with the organization and for payments 
under subsection (l) and subsection (m) and payments to a 
Medicare+Choice MSA under subsection (e)(1) shall be made from 
the Federal Hospital Insurance Trust Fund and the Federal 
Supplementary Medical Insurance Trust Fund in such proportion 
as the Secretary determines reflects the relative weight that 
benefits under part A and under part B represents of the 
actuarial value of the total benefits under this title. 
Payments to MA organizations for statutory drug benefits 
provided under this title are made from the Medicare 
Prescription Drug Account in the Federal Supplementary Medical 
Insurance Trust Fund. Monthly payments otherwise payable under 
this section for October 2000 shall be paid on the first 
business day of such month. Monthly payments otherwise payable 
under this section for October 2001 shall be paid on the last 
business day of September 2001. Monthly payments otherwise 
payable under this section for October 2006 shall be paid on 
the first business day of October 2006.
  (g) Special Rule for Certain Inpatient Hospital Stays.--In 
the case of an individual who is receiving inpatient hospital 
services from a subsection (d) hospital (as defined in section 
1886(d)(1)(B)), a rehabilitation hospital described in section 
1886(d)(1)(B)(ii) or a distinct part rehabilitation unit 
described in the matter following clause (v) of section 
1886(d)(1)(B), or a long-term care hospital (described in 
section 1886(d)(1)(B)(iv)) as of the effective date of the 
individual's--
          (1) election under this part of a Medicare+Choice 
        plan offered by a Medicare+Choice organization--
                  (A) payment for such services until the date 
                of the individual's discharge shall be made 
                under this title through the Medicare+Choice 
                plan or the original medicare fee-for-service 
                program option described in section 
                1851(a)(1)(A) (as the case may be) elected 
                before the election with such organization,
                  (B) the elected organization shall not be 
                financially responsible for payment for such 
                services until the date after the date of the 
                individual's discharge, and
                  (C) the organization shall nonetheless be 
                paid the full amount otherwise payable to the 
                organization under this part; or
          (2) termination of election with respect to a 
        Medicare+Choice organization under this part--
                  (A) the organization shall be financially 
                responsible for payment for such services after 
                such date and until the date of the 
                individual's discharge,
                  (B) payment for such services during the stay 
                shall not be made under section 1886(d) or 
                other payment provision under this title for 
                inpatient services for the type of facility, 
                hospital, or unit involved, described in the 
                matter preceding paragraph (1), as the case may 
                be, or by any succeeding Medicare+Choice 
                organization, and
                  (C) the terminated organization shall not 
                receive any payment with respect to the 
                individual under this part during the period 
                the individual is not enrolled.
  (h) Special Rule for Hospice Care.--
          (1) Information.--A contract under this part shall 
        require the Medicare+Choice organization to inform each 
        individual enrolled under this part with a 
        Medicare+Choice plan offered by the organization about 
        the availability of hospice care if--
                  (A) a hospice program participating under 
                this title is located within the organization's 
                service area; or
                  (B) it is common practice to refer patients 
                to hospice programs outside such service area.
          (2) Payment.--If an individual who is enrolled with a 
        Medicare+Choice organization under this part makes an 
        election under section 1812(d)(1) to receive hospice 
        care from a particular hospice program--
                  (A) payment for the hospice care furnished to 
                the individual shall be made to the hospice 
                program elected by the individual by the 
                Secretary;
                  (B) payment for other services for which the 
                individual is eligible notwithstanding the 
                individual's election of hospice care under 
                section 1812(d)(1), including services not 
                related to the individual's terminal illness, 
                shall be made by the Secretary to the 
                Medicare+Choice organization or the provider or 
                supplier of the service instead of payments 
                calculated under subsection (a); and
                  (C) the Secretary shall continue to make 
                monthly payments to the Medicare+Choice 
                organization in an amount equal to the value of 
                the additional benefits required under section 
                1854(f)(1)(A).
  (i) New Entry Bonus.--
          (1) In general.--Subject to paragraphs (2) and (3), 
        in the case of Medicare+Choice payment area in which a 
        Medicare+Choice plan has not been offered since 1997 
        (or in which all organizations that offered a plan 
        since such date have filed notice with the Secretary, 
        as of October 13, 1999, that they will not be offering 
        such a plan as of January 1, 2000, or filed notice with 
        the Secretary as of October 3, 2000, that they will not 
        be offering such a plan as of January 1, 2001), the 
        amount of the monthly payment otherwise made under this 
        section shall be increased--
                  (A) only for the first 12 months in which any 
                Medicare+Choice plan is offered in the area, by 
                5 percent of the total monthly payment 
                otherwise computed for such payment area; and
                  (B) only for the subsequent 12 months, by 3 
                percent of the total monthly payment otherwise 
                computed for such payment area.
          (2) Period of application.--Paragraph (1) shall only 
        apply to payment for Medicare+Choice plans which are 
        first offered in a Medicare+Choice payment area during 
        the 2-year period beginning on January 1, 2000.
          (3) Limitation to organization offering first plan in 
        an area.--Paragraph (1) shall only apply to payment to 
        the first Medicare+Choice organization that offers a 
        Medicare+Choice plan in each Medicare+Choice payment 
        area, except that if more than one such organization 
        first offers such a plan in an area on the same date, 
        paragraph (1) shall apply to payment for such 
        organizations.
          (4) Construction.--Nothing in paragraph (1) shall be 
        construed as affecting the calculation of the annual 
        Medicare+Choice capitation rate under subsection (c) 
        for any payment area or as applying to payment for any 
        period not described in such paragraph and paragraph 
        (2).
          (5) Offered defined.--In this subsection, the term 
        ``offered'' means, with respect to a Medicare+Choice 
        plan as of a date, that a Medicare+Choice eligible 
        individual may enroll with the plan on that date, 
        regardless of when the enrollment takes effect or when 
        the individual obtains benefits under the plan.
  (j) Computation of Benchmark Amounts.--For purposes of this 
part, subject to subsection (o), the term ``MA area-specific 
non-drug monthly benchmark amount'' means for a month in a 
year--
          (1) with respect to--
                  (A) a service area that is entirely within an 
                MA local area, subject to section 1860C-
                1(d)(2)(A), an amount equal to \1/12\ of the 
                annual MA capitation rate under section 
                1853(c)(1) for the area for the year (or, for 
                2007, 2008, 2009, and 2010, \1/12\ of the 
                applicable amount determined under subsection 
                (k)(1) for the area for the year; for 2011, \1/
                12\ of the applicable amount determined under 
                subsection (k)(1) for the area for 2010; and, 
                beginning with 2012, \1/12\ of the blended 
                benchmark amount determined under subsection 
                (n)(1) for the area for the year), adjusted as 
                appropriate (for years before 2007) for the 
                purpose of risk adjustment; or
                  (B) a service area that includes more than 
                one MA local area, an amount equal to the 
                average of the amounts described in 
                subparagraph (A) for each such local MA area, 
                weighted by the projected number of enrollees 
                in the plan residing in the respective local MA 
                areas (as used by the plan for purposes of the 
                bid and disclosed to the Secretary under 
                section 1854(a)(6)(A)(iii)), adjusted as 
                appropriate (for years before 2007) for the 
                purpose of risk adjustment; or
          (2) with respect to an MA region for a month in a 
        year, the MA region-specific non-drug monthly benchmark 
        amount, as defined in section 1858(f) for the region 
        for the year.
  (k) Determination of Applicable Amount for Purposes of 
Calculating the Benchmark Amounts.--
          (1) Applicable amount defined.--For purposes of 
        subsection (j), subject to paragraphs (2) and (4), the 
        term ``applicable amount'' means for an area--
                  (A) for 2007--
                          (i) if such year is not specified 
                        under subsection (c)(1)(D)(ii), an 
                        amount equal to the amount specified in 
                        subsection (c)(1)(C) for the area for 
                        2006--
                                  (I) first adjusted by the 
                                rescaling factor for 2006 for 
                                the area (as made available by 
                                the Secretary in the 
                                announcement of the rates on 
                                April 4, 2005, under subsection 
                                (b)(1), but excluding any 
                                national adjustment factors for 
                                coding intensity and risk 
                                adjustment budget neutrality 
                                that were included in such 
                                factor); and
                                  (II) then increased by the 
                                national per capita MA growth 
                                percentage, described in 
                                subsection (c)(6) for 2007, but 
                                not taking into account any 
                                adjustment under subparagraph 
                                (C) of such subsection for a 
                                year before 2004;
                          (ii) if such year is specified under 
                        subsection (c)(1)(D)(ii), an amount 
                        equal to the greater of--
                                  (I) the amount determined 
                                under clause (i) for the area 
                                for the year; or
                                  (II) the amount specified in 
                                subsection (c)(1)(D) for the 
                                area for the year; and
                  (B) for a subsequent year--
                          (i) if such year is not specified 
                        under subsection (c)(1)(D)(ii), an 
                        amount equal to the amount determined 
                        under this paragraph for the area for 
                        the previous year (determined without 
                        regard to paragraphs (2) and (4)), 
                        increased by the national per capita MA 
                        growth percentage, described in 
                        subsection (c)(6) for that succeeding 
                        year, but not taking into account any 
                        adjustment under subparagraph (C) of 
                        such subsection for a year before 2004; 
                        and
                          (ii) if such year is specified under 
                        subsection (c)(1)(D)(ii), an amount 
                        equal to the greater of--
                                  (I) the amount determined 
                                under clause (i) for the area 
                                for the year; or
                                  (II) the amount specified in 
                                subsection (c)(1)(D) for the 
                                area for the year.
          (2) Phase-out of budget neutrality factor.--
                  (A) In general.--Except as provided in 
                subparagraph (D), in the case of 2007 through 
                2010, the applicable amount determined under 
                paragraph (1) shall be multiplied by a factor 
                equal to 1 plus the product of--
                          (i) the percent determined under 
                        subparagraph (B) for the year; and
                          (ii) the applicable phase-out factor 
                        for the year under subparagraph (C).
                  (B) Percent determined.--
                          (i) In general.--For purposes of 
                        subparagraph (A)(i), subject to clause 
                        (iv), the percent determined under this 
                        subparagraph for a year is a percent 
                        equal to a fraction the numerator of 
                        which is described in clause (ii) and 
                        the denominator of which is described 
                        in clause (iii).
                          (ii) Numerator based on difference 
                        between demographic rate and risk 
                        rate.--
                                  (I) In general.--The 
                                numerator described in this 
                                clause is an amount equal to 
                                the amount by which the 
                                demographic rate described in 
                                subclause (II) exceeds the risk 
                                rate described in subclause 
                                (III).
                                  (II) Demographic rate.--The 
                                demographic rate described in 
                                this subclause is the 
                                Secretary's estimate of the 
                                total payments that would have 
                                been made under this part in 
                                the year if all the monthly 
                                payment amounts for all MA 
                                plans were equal to \1/12\ of 
                                the annual MA capitation rate 
                                under subsection (c)(1) for the 
                                area and year, adjusted 
                                pursuant to subsection 
                                (a)(1)(C).
                                  (III) Risk rate.--The risk 
                                rate described in this 
                                subclause is the Secretary's 
                                estimate of the total payments 
                                that would have been made under 
                                this part in the year if all 
                                the monthly payment amounts for 
                                all MA plans were equal to the 
                                amount described in subsection 
                                (j)(1)(A) (determined as if 
                                this paragraph had not applied) 
                                under subsection (j) for the 
                                area and year, adjusted 
                                pursuant to subsection 
                                (a)(1)(C).
                          (iii) Denominator based on risk 
                        rate.--The denominator described in 
                        this clause is equal to the total 
                        amount estimated for the year under 
                        clause (ii)(III).
                          (iv) Requirements.--In estimating the 
                        amounts under the previous clauses, the 
                        Secretary shall--
                                  (I) use a complete set of the 
                                most recent and representative 
                                Medicare Advantage risk scores 
                                under subsection (a)(3) that 
                                are available from the risk 
                                adjustment model announced for 
                                the year;
                                  (II) adjust the risk scores 
                                to reflect changes in treatment 
                                and coding practices in the 
                                fee-for-service sector;
                                  (III) adjust the risk scores 
                                for differences in coding 
                                patterns between Medicare 
                                Advantage plans and providers 
                                under the original Medicare 
                                fee-for-service program under 
                                parts A and B to the extent 
                                that the Secretary has 
                                identified such differences, as 
                                required in subsection 
                                (a)(1)(C);
                                  (IV) as necessary, adjust the 
                                risk scores for late data 
                                submitted by Medicare Advantage 
                                organizations;
                                  (V) as necessary, adjust the 
                                risk scores for lagged cohorts; 
                                and
                                  (VI) as necessary, adjust the 
                                risk scores for changes in 
                                enrollment in Medicare 
                                Advantage plans during the 
                                year.
                          (v) Authority.--In computing such 
                        amounts the Secretary may take into 
                        account the estimated health risk of 
                        enrollees in preferred provider 
                        organization plans (including MA 
                        regional plans) for the year.
                  (C) Applicable phase-out factor.--For 
                purposes of subparagraph (A)(ii), the term 
                ``applicable phase-out factor'' means--
                          (i) for 2007, 0.55;
                          (ii) for 2008, 0.40;
                          (iii) for 2009, 0.25; and
                          (iv) for 2010, 0.05.
                  (D) Termination of application.--Subparagraph 
                (A) shall not apply in a year if the amount 
                estimated under subparagraph (B)(ii)(III) for 
                the year is equal to or greater than the amount 
                estimated under subparagraph (B)(ii)(II) for 
                the year.
          (3) No revision in percent.--
                  (A) In general.--The Secretary may not make 
                any adjustment to the percent determined under 
                paragraph (2)(B) for any year.
                  (B) Rule of construction.--Nothing in this 
                subsection shall be construed to limit the 
                authority of the Secretary to make adjustments 
                to the applicable amounts determined under 
                paragraph (1) as appropriate for purposes of 
                updating data or for purposes of adopting an 
                improved risk adjustment methodology.
          (4) Phase-out of the indirect costs of medical 
        education from capitation rates.--
                  (A) In general.--After determining the 
                applicable amount for an area for a year under 
                paragraph (1) (beginning with 2010), the 
                Secretary shall adjust such applicable amount 
                to exclude from such applicable amount the 
                phase-in percentage (as defined in subparagraph 
                (B)(i)) for the year of the Secretary's 
                estimate of the standardized costs for payments 
                under section 1886(d)(5)(B) in the area for the 
                year. Any adjustment under the preceding 
                sentence shall be made prior to the application 
                of paragraph (2).
                  (B) Percentages defined.--For purposes of 
                this paragraph:
                          (i) Phase-in percentage.--The term 
                        ``phase-in percentage'' means, for an 
                        area for a year, the ratio (expressed 
                        as a percentage, but in no case greater 
                        than 100 percent) of--
                                  (I) the maximum cumulative 
                                adjustment percentage for the 
                                year (as defined in clause 
                                (ii)); to
                                  (II) the standardized IME 
                                cost percentage (as defined in 
                                clause (iii)) for the area and 
                                year.
                          (ii) Maximum cumulative adjustment 
                        percentage.--The term ``maximum 
                        cumulative adjustment percentage'' 
                        means, for--
                                  (I) 2010, 0.60 percent; and
                                  (II) a subsequent year, the 
                                maximum cumulative adjustment 
                                percentage for the previous 
                                year increased by 0.60 
                                percentage points.
                          (iii) Standardized ime cost 
                        percentage.--The term ``standardized 
                        IME cost percentage'' means, for an 
                        area for a year, the per capita costs 
                        for payments under section 
                        1886(d)(5)(B) (expressed as a 
                        percentage of the fee-for-service 
                        amount specified in subparagraph (C)) 
                        for the area and the year.
                  (C) Fee-for-service amount.--The fee-for-
                service amount specified in this subparagraph 
                for an area for a year is the amount specified 
                under subsection (c)(1)(D) for the area and the 
                year.
  (l) Application of Eligible Professional Incentives for 
Certain MA Organizations for Adoption and Meaningful Use of 
Certified EHR Technology.--
          (1) In general.--Subject to paragraphs (3) and (4), 
        in the case of a qualifying MA organization, the 
        provisions of sections 1848(o) and 1848(a)(7) shall 
        apply with respect to eligible professionals described 
        in paragraph (2) of the organization who the 
        organization attests under paragraph (6) to be 
        meaningful EHR users in a similar manner as they apply 
        to eligible professionals under such sections. 
        Incentive payments under paragraph (3) shall be made to 
        and payment adjustments under paragraph (4) shall apply 
        to such qualifying organizations.
          (2) Eligible professional described.--With respect to 
        a qualifying MA organization, an eligible professional 
        described in this paragraph is an eligible professional 
        (as defined for purposes of section 1848(o)) who--
                  (A)(i) is employed by the organization; or
                  (ii)(I) is employed by, or is a partner of, 
                an entity that through contract with the 
                organization furnishes at least 80 percent of 
                the entity's Medicare patient care services to 
                enrollees of such organization; and
                  (II) furnishes at least 80 percent of the 
                professional services of the eligible 
                professional covered under this title to 
                enrollees of the organization; and
                  (B) furnishes, on average, at least 20 hours 
                per week of patient care services.
          (3) Eligible professional incentive payments.--
                  (A) In general.--In applying section 1848(o) 
                under paragraph (1), instead of the additional 
                payment amount under section 1848(o)(1)(A) and 
                subject to subparagraph (B), the Secretary may 
                substitute an amount determined by the 
                Secretary to the extent feasible and practical 
                to be similar to the estimated amount in the 
                aggregate that would be payable if payment for 
                services furnished by such professionals was 
                payable under part B instead of this part.
                  (B) Avoiding duplication of payments.--
                          (i) In general.--In the case of an 
                        eligible professional described in 
                        paragraph (2)--
                                  (I) that is eligible for the 
                                maximum incentive payment under 
                                section 1848(o)(1)(A) for the 
                                same payment period, the 
                                payment incentive shall be made 
                                only under such section and not 
                                under this subsection; and
                                  (II) that is eligible for 
                                less than such maximum 
                                incentive payment for the same 
                                payment period, the payment 
                                incentive shall be made only 
                                under this subsection and not 
                                under section 1848(o)(1)(A).
                          (ii) Methods.--In the case of an 
                        eligible professional described in 
                        paragraph (2) who is eligible for an 
                        incentive payment under section 
                        1848(o)(1)(A) but is not described in 
                        clause (i) for the same payment period, 
                        the Secretary shall develop a process--
                                  (I) to ensure that duplicate 
                                payments are not made with 
                                respect to an eligible 
                                professional both under this 
                                subsection and under section 
                                1848(o)(1)(A); and
                                  (II) to collect data from 
                                Medicare Advantage 
                                organizations to ensure against 
                                such duplicate payments.
                  (C) Fixed schedule for application of 
                limitation on incentive payments for all 
                eligible professionals.--In applying section 
                1848(o)(1)(B)(ii) under subparagraph (A), in 
                accordance with rules specified by the 
                Secretary, a qualifying MA organization shall 
                specify a year (not earlier than 2011) that 
                shall be treated as the first payment year for 
                all eligible professionals with respect to such 
                organization.
          (4) Payment adjustment.--
                  (A) In general.--In applying section 
                1848(a)(7) under paragraph (1), instead of the 
                payment adjustment being an applicable percent 
                of the fee schedule amount for a year under 
                such section, subject to subparagraph (D), the 
                payment adjustment under paragraph (1) shall be 
                equal to the percent specified in subparagraph 
                (B) for such year of the payment amount 
                otherwise provided under this section for such 
                year.
                  (B) Specified percent.--The percent specified 
                under this subparagraph for a year is 100 
                percent minus a number of percentage points 
                equal to the product of--
                          (i) the number of percentage points 
                        by which the applicable percent (under 
                        section 1848(a)(7)(A)(ii)) for the year 
                        is less than 100 percent; and
                          (ii) the Medicare physician 
                        expenditure proportion specified in 
                        subparagraph (C) for the year.
                  (C) Medicare physician expenditure 
                proportion.--The Medicare physician expenditure 
                proportion under this subparagraph for a year 
                is the Secretary's estimate of the proportion, 
                of the expenditures under parts A and B that 
                are not attributable to this part, that are 
                attributable to expenditures for physicians' 
                services.
                  (D) Application of payment adjustment.--In 
                the case that a qualifying MA organization 
                attests that not all eligible professionals of 
                the organization are meaningful EHR users with 
                respect to a year, the Secretary shall apply 
                the payment adjustment under this paragraph 
                based on the proportion of all such eligible 
                professionals of the organization that are not 
                meaningful EHR users for such year.
          (5) Qualifying ma organization defined.--In this 
        subsection and subsection (m), the term ``qualifying MA 
        organization'' means a Medicare Advantage organization 
        that is organized as a health maintenance organization 
        (as defined in section 2791(b)(3) of the Public Health 
        Service Act).
          (6) Meaningful ehr user attestation.--For purposes of 
        this subsection and subsection (m), a qualifying MA 
        organization shall submit an attestation, in a form and 
        manner specified by the Secretary which may include the 
        submission of such attestation as part of submission of 
        the initial bid under section 1854(a)(1)(A)(iv), 
        identifying--
                  (A) whether each eligible professional 
                described in paragraph (2), with respect to 
                such organization is a meaningful EHR user (as 
                defined in section 1848(o)(2)) for a year 
                specified by the Secretary; and
                  (B) whether each eligible hospital described 
                in subsection (m)(1), with respect to such 
                organization, is a meaningful EHR user (as 
                defined in section 1886(n)(3)) for an 
                applicable period specified by the Secretary.
          (7) Posting on website.--The Secretary shall post on 
        the Internet website of the Centers for Medicare & 
        Medicaid Services, in an easily understandable format, 
        a list of the names, business addresses, and business 
        phone numbers of--
                  (A) each qualifying MA organization receiving 
                an incentive payment under this subsection for 
                eligible professionals of the organization; and
                  (B) the eligible professionals of such 
                organization for which such incentive payment 
                is based.
          (8) Limitation on review.--There shall be no 
        administrative or judicial review under section 1869, 
        section 1878, or otherwise, of--
                  (A) the methodology and standards for 
                determining payment amounts and payment 
                adjustments under this subsection, including 
                avoiding duplication of payments under 
                paragraph (3)(B) and the specification of rules 
                for the fixed schedule for application of 
                limitation on incentive payments for all 
                eligible professionals under paragraph (3)(C);
                  (B) the methodology and standards for 
                determining eligible professionals under 
                paragraph (2); and
                  (C) the methodology and standards for 
                determining a meaningful EHR user under section 
                1848(o)(2), including specification of the 
                means of demonstrating meaningful EHR use under 
                section 1848(o)(3)(C) and selection of measures 
                under section 1848(o)(3)(B).
  (m) Application of Eligible Hospital Incentives for Certain 
MA Organizations for Adoption and Meaningful Use of Certified 
EHR Technology.--
          (1) Application.--Subject to paragraphs (3) and (4), 
        in the case of a qualifying MA organization, the 
        provisions of sections 1886(n) and 1886(b)(3)(B)(ix) 
        shall apply with respect to eligible hospitals 
        described in paragraph (2) of the organization which 
        the organization attests under subsection (l)(6) to be 
        meaningful EHR users in a similar manner as they apply 
        to eligible hospitals under such sections. Incentive 
        payments under paragraph (3) shall be made to and 
        payment adjustments under paragraph (4) shall apply to 
        such qualifying organizations.
          (2) Eligible hospital described.--With respect to a 
        qualifying MA organization, an eligible hospital 
        described in this paragraph is an eligible hospital (as 
        defined in section 1886(n)(6)(B)) that is under common 
        corporate governance with such organization and serves 
        individuals enrolled under an MA plan offered by such 
        organization.
          (3) Eligible hospital incentive payments.--
                  (A) In general.--In applying section 
                1886(n)(2) under paragraph (1), instead of the 
                additional payment amount under section 
                1886(n)(2), there shall be substituted an 
                amount determined by the Secretary to be 
                similar to the estimated amount in the 
                aggregate that would be payable if payment for 
                services furnished by such hospitals was 
                payable under part A instead of this part. In 
                implementing the previous sentence, the 
                Secretary--
                          (i) shall, insofar as data to 
                        determine the discharge related amount 
                        under section 1886(n)(2)(C) for an 
                        eligible hospital are not available to 
                        the Secretary, use such alternative 
                        data and methodology to estimate such 
                        discharge related amount as the 
                        Secretary determines appropriate; and
                          (ii) shall, insofar as data to 
                        determine the medicare share described 
                        in section 1886(n)(2)(D) for an 
                        eligible hospital are not available to 
                        the Secretary, use such alternative 
                        data and methodology to estimate such 
                        share, which data and methodology may 
                        include use of the inpatient-bed-days 
                        (or discharges) with respect to an 
                        eligible hospital during the 
                        appropriate period which are 
                        attributable to both individuals for 
                        whom payment may be made under part A 
                        or individuals enrolled in an MA plan 
                        under a Medicare Advantage organization 
                        under this part as a proportion of the 
                        estimated total number of patient-bed-
                        days (or discharges) with respect to 
                        such hospital during such period.
                  (B) Avoiding duplication of payments.--
                          (i) In general.--In the case of a 
                        hospital that for a payment year is an 
                        eligible hospital described in 
                        paragraph (2) and for which at least 
                        one-third of their discharges (or bed-
                        days) of Medicare patients for the year 
                        are covered under part A, payment for 
                        the payment year shall be made only 
                        under section 1886(n) and not under 
                        this subsection.
                          (ii) Methods.--In the case of a 
                        hospital that is an eligible hospital 
                        described in paragraph (2) and also is 
                        eligible for an incentive payment under 
                        section 1886(n) but is not described in 
                        clause (i) for the same payment period, 
                        the Secretary shall develop a process--
                                  (I) to ensure that duplicate 
                                payments are not made with 
                                respect to an eligible hospital 
                                both under this subsection and 
                                under section 1886(n); and
                                  (II) to collect data from 
                                Medicare Advantage 
                                organizations to ensure against 
                                such duplicate payments.
          (4) Payment adjustment.--
                  (A) Subject to paragraph (3), in the case of 
                a qualifying MA organization (as defined in 
                section 1853(l)(5)), if, according to the 
                attestation of the organization submitted under 
                subsection (l)(6) for an applicable period, one 
                or more eligible hospitals (as defined in 
                section 1886(n)(6)(B)) that are under common 
                corporate governance with such organization and 
                that serve individuals enrolled under a plan 
                offered by such organization are not meaningful 
                EHR users (as defined in section 1886(n)(3)) 
                with respect to a period, the payment amount 
                payable under this section for such 
                organization for such period shall be the 
                percent specified in subparagraph (B) for such 
                period of the payment amount otherwise provided 
                under this section for such period.
                  (B) Specified percent.--The percent specified 
                under this subparagraph for a year is 100 
                percent minus a number of percentage points 
                equal to the product of--
                          (i) the number of the percentage 
                        point reduction effected under section 
                        1886(b)(3)(B)(ix)(I) for the period; 
                        and
                          (ii) the Medicare hospital 
                        expenditure proportion specified in 
                        subparagraph (C) for the year.
                  (C) Medicare hospital expenditure 
                proportion.--The Medicare hospital expenditure 
                proportion under this subparagraph for a year 
                is the Secretary's estimate of the proportion, 
                of the expenditures under parts A and B that 
                are not attributable to this part, that are 
                attributable to expenditures for inpatient 
                hospital services.
                  (D) Application of payment adjustment.--In 
                the case that a qualifying MA organization 
                attests that not all eligible hospitals are 
                meaningful EHR users with respect to an 
                applicable period, the Secretary shall apply 
                the payment adjustment under this paragraph 
                based on a methodology specified by the 
                Secretary, taking into account the proportion 
                of such eligible hospitals, or discharges from 
                such hospitals, that are not meaningful EHR 
                users for such period.
          (5) Posting on website.--The Secretary shall post on 
        the Internet website of the Centers for Medicare & 
        Medicaid Services, in an easily understandable format--
                  (A) a list of the names, business addresses, 
                and business phone numbers of each qualifying 
                MA organization receiving an incentive payment 
                under this subsection for eligible hospitals 
                described in paragraph (2); and
                  (B) a list of the names of the eligible 
                hospitals for which such incentive payment is 
                based.
          (6) Limitations on review.--There shall be no 
        administrative or judicial review under section 1869, 
        section 1878, or otherwise, of--
                  (A) the methodology and standards for 
                determining payment amounts and payment 
                adjustments under this subsection, including 
                avoiding duplication of payments under 
                paragraph (3)(B);
                  (B) the methodology and standards for 
                determining eligible hospitals under paragraph 
                (2); and
                  (C) the methodology and standards for 
                determining a meaningful EHR user under section 
                1886(n)(3), including specification of the 
                means of demonstrating meaningful EHR use under 
                subparagraph (C) of such section and selection 
                of measures under subparagraph (B) of such 
                section.
  (n) Determination of Blended Benchmark Amount.--
          (1) In general.--For purposes of subsection (j), 
        subject to paragraphs (3), (4), and (5), the term 
        ``blended benchmark amount'' means for an area--
                  (A) for 2012 the sum of--
                          (i) \1/2\ of the applicable amount 
                        for the area and year; and
                          (ii) \1/2\ of the amount specified in 
                        paragraph (2)(A) for the area and year; 
                        and
                  (B) for a subsequent year the amount 
                specified in paragraph (2)(A) for the area and 
                year.
          (2) Specified amount.--
                  (A) In general.--The amount specified in this 
                subparagraph for an area and year is the 
                product of--
                          (i) the base payment amount specified 
                        in subparagraph (E) for the area and 
                        year adjusted to take into account the 
                        phase-out in the indirect costs of 
                        medical education from capitation rates 
                        described in subsection (k)(4) and, for 
                        2019 and subsequent years, the 
                        exclusion of payments for organ 
                        acquisitions for kidney transplants 
                        from the capitation rate as described 
                        in subsection (k)(5); and
                          (ii) the applicable percentage for 
                        the area for the year specified under 
                        subparagraph (B).
                  (B) Applicable percentage.--Subject to 
                subparagraph (D), the applicable percentage 
                specified in this subparagraph for an area for 
                a year in the case of an area that is ranked--
                          (i) in the highest quartile under 
                        subparagraph (C) for the previous year 
                        is 95 percent;
                          (ii) in the second highest quartile 
                        under such subparagraph for the 
                        previous year is 100 percent;
                          (iii) in the third highest quartile 
                        under such subparagraph for the 
                        previous year is 107.5 percent; or
                          (iv) in the lowest quartile under 
                        such subparagraph for the previous year 
                        is 115 percent.
                  (C) Periodic ranking.--For purposes of this 
                paragraph in the case of an area located--
                          (i) in 1 of the 50 States or the 
                        District of Columbia, the Secretary 
                        shall rank such area in each year 
                        specified under subsection 
                        (c)(1)(D)(ii) based upon the level of 
                        the amount specified in subparagraph 
                        (A)(i) for such areas; or
                          (ii) in a territory, the Secretary 
                        shall rank such areas in each such year 
                        based upon the level of the amount 
                        specified in subparagraph (A)(i) for 
                        such area relative to quartile rankings 
                        computed under clause (i).
                  (D) 1-year transition for changes in 
                applicable percentage.--If, for a year after 
                2012, there is a change in the quartile in 
                which an area is ranked compared to the 
                previous year, the applicable percentage for 
                the area in the year shall be the average of--
                          (i) the applicable percentage for the 
                        area for the previous year; and
                          (ii) the applicable percentage that 
                        would otherwise apply for the area for 
                        the year.
                  (E) Base payment amount.--Subject to 
                subparagraph (F), the base payment amount 
                specified in this subparagraph--
                          (i) for 2012 is the amount specified 
                        in subsection (c)(1)(D) for the area 
                        for the year; or
                          (ii) for a subsequent year that--
                                  (I) is not specified under 
                                subsection (c)(1)(D)(ii), is 
                                the base amount specified in 
                                this subparagraph for the area 
                                for the previous year, 
                                increased by the national per 
                                capita MA growth percentage, 
                                described in subsection (c)(6) 
                                for that succeeding year, but 
                                not taking into account any 
                                adjustment under subparagraph 
                                (C) of such subsection for a 
                                year before 2004; and
                                  (II) is specified under 
                                subsection (c)(1)(D)(ii), is 
                                the amount specified in 
                                subsection (c)(1)(D) for the 
                                area for the year.
                  (F) Application of indirect medical education 
                phase-out.--The base payment amount specified 
                in subparagraph (E) for a year shall be 
                adjusted in the same manner under paragraph (4) 
                of subsection (k) as the applicable amount is 
                adjusted under such subsection.
          (3) Alternative phase-ins.--
                  (A) 4-year phase-in for certain areas.--If 
                the difference between the applicable amount 
                (as defined in subsection (k)) for an area for 
                2010 and the projected 2010 benchmark amount 
                (as defined in subparagraph (C)) for the area 
                is at least $30 but less than $50, the blended 
                benchmark amount for the area is--
                          (i) for 2012 the sum of--
                                  (I) \3/4\ of the applicable 
                                amount for the area and year; 
                                and
                                  (II) \1/4\ of the amount 
                                specified in paragraph (2)(A) 
                                for the area and year;
                          (ii) for 2013 the sum of--
                                  (I) \1/2\ of the applicable 
                                amount for the area and year; 
                                and
                                  (II) \1/2\ of the amount 
                                specified in paragraph (2)(A) 
                                for the area and year;
                          (iii) for 2014 the sum of--
                                  (I) \1/4\ of the applicable 
                                amount for the area and year; 
                                and
                                  (II) \3/4\ of the amount 
                                specified in paragraph (2)(A) 
                                for the area and year; and
                          (iv) for a subsequent year the amount 
                        specified in paragraph (2)(A) for the 
                        area and year.
                  (B) 6-year phase-in for certain areas.--If 
                the difference between the applicable amount 
                (as defined in subsection (k)) for an area for 
                2010 and the projected 2010 benchmark amount 
                (as defined in subparagraph (C)) for the area 
                is at least $50, the blended benchmark amount 
                for the area is--
                          (i) for 2012 the sum of--
                                  (I) \5/6\ of the applicable 
                                amount for the area and year; 
                                and
                                  (II) \1/6\ of the amount 
                                specified in paragraph (2)(A) 
                                for the area and year;
                          (ii) for 2013 the sum of--
                                  (I) \2/3\ of the applicable 
                                amount for the area and year; 
                                and
                                  (II) \1/3\ of the amount 
                                specified in paragraph (2)(A) 
                                for the area and year;
                          (iii) for 2014 the sum of--
                                  (I) \1/2\ of the applicable 
                                amount for the area and year; 
                                and
                                  (II) \1/2\ of the amount 
                                specified in paragraph (2)(A) 
                                for the area and year;
                          (iv) for 2015 the sum of--
                                  (I) \1/3\ of the applicable 
                                amount for the area and year; 
                                and
                                  (II) \2/3\ of the amount 
                                specified in paragraph (2)(A) 
                                for the area and year; and
                          (v) for 2016 the sum of--
                                  (I) \1/6\ of the applicable 
                                amount for the area and year; 
                                and
                                  (II) \5/6\ of the amount 
                                specified in paragraph (2)(A) 
                                for the area and year; and
                          (vi) for a subsequent year the amount 
                        specified in paragraph (2)(A) for the 
                        area and year.
                  (C) Projected 2010 benchmark amount.--The 
                projected 2010 benchmark amount described in 
                this subparagraph for an area is equal to the 
                sum of--
                          (i) \1/2\ of the applicable amount 
                        (as defined in subsection (k)) for the 
                        area for 2010; and
                          (ii) \1/2\ of the amount specified in 
                        paragraph (2)(A) for the area for 2010 
                        but determined as if there were 
                        substituted for the applicable 
                        percentage specified in clause (ii) of 
                        such paragraph the sum of--
                                  (I) the applicable percent 
                                that would be specified under 
                                subparagraph (B) of paragraph 
                                (2) (determined without regard 
                                to subparagraph (D) of such 
                                paragraph) for the area for 
                                2010 if any reference in such 
                                paragraph to ``the previous 
                                year'' were deemed a reference 
                                to 2010; and
                                  (II) the applicable 
                                percentage increase that would 
                                apply to a qualifying plan in 
                                the area under subsection (o) 
                                as if any reference in such 
                                subsection to 2012 were deemed 
                                a reference to 2010 and as if 
                                the determination of a 
                                qualifying county under 
                                paragraph (3)(B) of such 
                                subsection were made for 2010.
          (4) Cap on benchmark amount.--In no case shall the 
        blended benchmark amount for an area for a year 
        (determined taking into account subsection (o)) be 
        greater than the applicable amount that would (but for 
        the application of this subsection) be determined under 
        subsection (k)(1) for the area for the year.
          (5) Non-application to pace plans.--This subsection 
        shall not apply to payments to a PACE program under 
        section 1894.
  (o) Applicable Percentage Quality Increases.--
          (1) In general.--Subject to the succeeding 
        paragraphs, in the case of a qualifying plan with 
        respect to a year beginning with 2012, the applicable 
        percentage under subsection (n)(2)(B) shall be 
        increased on a plan or contract level, as determined by 
        the Secretary--
                  (A) for 2012, by 1.5 percentage points;
                  (B) for 2013, by 3.0 percentage points; and
                  (C) for 2014 or a subsequent year, by 5.0 
                percentage points.
          (2) Increase for qualifying plans in qualifying 
        counties.--The increase applied under paragraph (1) for 
        a qualifying plan located in a qualifying county for a 
        year shall be doubled.
          (3) Qualifying plans and qualifying county defined; 
        application of increases to low enrollment and new 
        plans.--For purposes of this subsection:
                  (A) Qualifying plan.--
                          (i) In general.--The term 
                        ``qualifying plan'' means, for a year 
                        and subject to paragraph (4), a plan 
                        that had a quality rating under 
                        paragraph (4) of 4 stars or higher 
                        based on the most recent data available 
                        for such year.
                          (ii) Application of increases to low 
                        enrollment plans.--
                                  (I) 2012.--For 2012, the term 
                                ``qualifying plan'' includes an 
                                MA plan that the Secretary 
                                determines is not able to have 
                                a quality rating under 
                                paragraph (4) because of low 
                                enrollment.
                                  (II) 2013 and subsequent 
                                years.--For 2013 and subsequent 
                                years, for purposes of 
                                determining whether an MA plan 
                                with low enrollment (as defined 
                                by the Secretary) is included 
                                as a qualifying plan, the 
                                Secretary shall establish a 
                                method to apply to MA plans 
                                with low enrollment (as defined 
                                by the Secretary) the 
                                computation of quality rating 
                                and the rating system under 
                                paragraph (4).
                          (iii) Application of increases to new 
                        plans.--
                                  (I) In general.--A new MA 
                                plan that meets criteria 
                                specified by the Secretary 
                                shall be treated as a 
                                qualifying plan, except that in 
                                applying paragraph (1), the 
                                applicable percentage under 
                                subsection (n)(2)(B) shall be 
                                increased--
                                          (aa) for 2012, by 1.5 
                                        percentage points;
                                          (bb) for 2013, by 2.5 
                                        percentage points; and
                                          (cc) for 2014 or a 
                                        subsequent year, by 3.5 
                                        percentage points.
                                  (II) New ma plan defined.--
                                The term ``new MA plan'' means, 
                                with respect to a year, a plan 
                                offered by an organization or 
                                sponsor that has not had a 
                                contract as a Medicare 
                                Advantage organization in the 
                                preceding 3-year period.
                  (B) Qualifying county.--The term ``qualifying 
                county'' means, for a year, a county--
                          (i) that has an MA capitation rate 
                        that, in 2004, was based on the amount 
                        specified in subsection (c)(1)(B) for a 
                        Metropolitan Statistical Area with a 
                        population of more than 250,000;
                          (ii) for which, as of December 2009, 
                        of the Medicare Advantage eligible 
                        individuals residing in the county at 
                        least 25 percent of such individuals 
                        were enrolled in Medicare Advantage 
                        plans; and
                          (iii) that has per capita fee-for-
                        service spending that is lower than the 
                        national monthly per capita cost for 
                        expenditures for individuals enrolled 
                        under the original medicare fee-for-
                        service program for the year.
          (4) Quality determinations for application of 
        increase.--
                  (A) Quality determination.--The quality 
                rating for a plan shall be determined according 
                to a 5-star rating system (based on the data 
                collected under section 1852(e)).
                  (B) Plans that failed to report.--An MA plan 
                which does not report data that enables the 
                Secretary to rate the plan for purposes of this 
                paragraph shall be counted as having a rating 
                of fewer than 3.5 stars.
                  (C) Special rule for first 3 plan years for 
                plans that were converted from a reasonable 
                cost reimbursement contract.--For purposes of 
                applying paragraph (1) and section 
                1854(b)(1)(C) for the first 3 plan years under 
                this part in the case of an MA plan to which 
                deemed enrollment applies under section 
                1851(c)(4)--
                          (i) such plan shall not be treated as 
                        a new MA plan (as defined in paragraph 
                        (3)(A)(iii)(II)); and
                          (ii) in determining the star rating 
                        of the plan under subparagraph (A), to 
                        the extent that Medicare Advantage data 
                        for such plan is not available for a 
                        measure used to determine such star 
                        rating, the Secretary shall use data 
                        from the period in which such plan was 
                        a reasonable cost reimbursement 
                        contract.
          (5) Exception for pace plans.--This subsection shall 
        not apply to payments to a PACE program under section 
        1894.

           *       *       *       *       *       *       *


                 definitions; miscellaneous provisions

  Sec. 1859. (a) Definitions Relating to Medicare+Choice 
Organizations.--In this part--
          (1) Medicare+choice organization.--The term 
        ``Medicare+Choice organization'' means a public or 
        private entity that is certified under section 1856 as 
        meeting the requirements and standards of this part for 
        such an organization.
          (2) Provider-sponsored organization.--The term 
        ``provider-sponsored organization'' is defined in 
        section 1855(d)(1).
  (b) Definitions Relating to Medicare+Choice Plans.--
          (1) Medicare+choice plan.--The term ``Medicare+Choice 
        plan'' means health benefits coverage offered under a 
        policy, contract, or plan by a Medicare+Choice 
        organization pursuant to and in accordance with a 
        contract under section 1857.
          (2) Medicare+Choice private fee-for-service plan.--
        The term ``Medicare+Choice private fee-for-service 
        plan'' means a Medicare+Choice plan that--
                  (A) reimburses hospitals, physicians, and 
                other providers at a rate determined by the 
                plan on a fee-for-service basis without placing 
                the provider at financial risk;
                  (B) does not vary such rates for such a 
                provider based on utilization relating to such 
                provider; and
                  (C) does not restrict the selection of 
                providers among those who are lawfully 
                authorized to provide the covered services and 
                agree to accept the terms and conditions of 
                payment established by the plan.
        Nothing in subparagraph (B) shall be construed to 
        preclude a plan from varying rates for such a provider 
        based on the specialty of the provider, the location of 
        the provider, or other factors related to such provider 
        that are not related to utilization, or to preclude a 
        plan from increasing rates for such a provider based on 
        increased utilization of specified preventive or 
        screening services.
          (3) MSA plan.--
                  (A) In general.--The term ``MSA plan'' means 
                a Medicare+Choice plan that--
                          (i) provides reimbursement for at 
                        least the items and services described 
                        in section 1852(a)(1) in a year but 
                        only after the enrollee incurs 
                        countable expenses (as specified under 
                        the plan) equal to the amount of an 
                        annual deductible (described in 
                        subparagraph (B));
                          (ii) counts as such expenses (for 
                        purposes of such deductible) at least 
                        all amounts that would have been 
                        payable under parts A and B, and that 
                        would have been payable by the enrollee 
                        as deductibles, coinsurance, or 
                        copayments, if the enrollee had elected 
                        to receive benefits through the 
                        provisions of such parts; and
                          (iii) provides, after such deductible 
                        is met for a year and for all 
                        subsequent expenses for items and 
                        services referred to in clause (i) in 
                        the year, for a level of reimbursement 
                        that is not less than--
                                  (I) 100 percent of such 
                                expenses, or
                                  (II) 100 percent of the 
                                amounts that would have been 
                                paid (without regard to any 
                                deductibles or coinsurance) 
                                under parts A and B with 
                                respect to such expenses,
                        whichever is less.
                  (B) Deductible.--The amount of annual 
                deductible under an MSA plan--
                          (i) for contract year 1999 shall be 
                        not more than $6,000; and
                          (ii) for a subsequent contract year 
                        shall be not more than the maximum 
                        amount of such deductible for the 
                        previous contract year under this 
                        subparagraph increased by the national 
                        per capita Medicare+Choice growth 
                        percentage under section 1853(c)(6) for 
                        the year.
                If the amount of the deductible under clause 
                (ii) is not a multiple of $50, the amount shall 
                be rounded to the nearest multiple of $50.
          (4) MA regional plan.--The term ``MA regional plan'' 
        means an MA plan described in section 
        1851(a)(2)(A)(i)--
                  (A) that has a network of providers that have 
                agreed to a contractually specified 
                reimbursement for covered benefits with the 
                organization offering the plan;
                  (B) that provides for reimbursement for all 
                covered benefits regardless of whether such 
                benefits are provided within such network of 
                providers; and
                  (C) the service area of which is one or more 
                entire MA regions.
          (5) MA local plan.--The term ``MA local plan'' means 
        an MA plan that is not an MA regional plan.
          (6) Specialized ma plans for special needs 
        individuals.--
                  (A) In general.--The term ``specialized MA 
                plan for special needs individuals'' means an 
                MA plan that exclusively serves special needs 
                individuals (as defined in subparagraph (B)) 
                and that, as of January 1, 2010, meets the 
                applicable requirements of paragraph (2), (3), 
                or (4) of subsection (f), as the case may be.
                  (B) Special needs individual.--The term 
                ``special needs individual'' means an MA 
                eligible individual who--
                          (i) is institutionalized (as defined 
                        by the Secretary);
                          (ii) is entitled to medical 
                        assistance under a State plan under 
                        title XIX; or
                          (iii) meets such requirements as the 
                        Secretary may determine would benefit 
                        from enrollment in such a specialized 
                        MA plan described in subparagraph (A) 
                        for individuals with severe or 
                        disabling chronic conditions who have 
                        one or more comorbid and medically 
                        complex chronic conditions that are 
                        substantially disabling or life 
                        threatening, have a high risk of 
                        hospitalization or other significant 
                        adverse health outcomes, and require 
                        specialized delivery systems across 
                        domains of care.
                The Secretary may waive application of section 
                1851(a)(3)(B) in the case of an individual 
                described in clause (i), (ii), or (iii) of this 
                subparagraph and may apply rules similar to the 
                rules of section 1894(c)(4) for continued 
                eligibility of special needs individuals.
  (c) Other References to Other Terms.--
          (1) Medicare+choice eligible individual.--The term 
        ``Medicare+Choice eligible individual'' is defined in 
        section 1851(a)(3).
          (2) Medicare+choice payment area.--The term 
        ``Medicare+Choice payment area'' is defined in section 
        1853(d).
          (3) National per capita medicare+choice growth 
        percentage.--The ``national per capita Medicare+Choice 
        growth percentage'' is defined in section 1853(c)(6).
          (4) Medicare+choice monthly basic beneficiary 
        premium; medicare+choice monthly supplemental 
        beneficiary premium.--The terms ``Medicare+Choice 
        monthly basic beneficiary premium'' and 
        ``Medicare+Choice monthly supplemental beneficiary 
        premium'' are defined in section 1854(a)(2).
          (5) MA local area.--The term ``MA local area'' is 
        defined in section 1853(d)(2).
  (d) Coordinated Acute and Long-Term Care Benefits Under a 
Medicare+Choice Plan.--Nothing in this part shall be construed 
as preventing a State from coordinating benefits under a 
medicaid plan under title XIX with those provided under a 
Medicare+Choice plan in a manner that assures continuity of a 
full-range of acute care and long-term care services to poor 
elderly or disabled individuals eligible for benefits under 
this title and under such plan.
  (e) Restriction on Enrollment for Certain Medicare+Choice 
Plans.--
          (1) In general.--In the case of a Medicare+Choice 
        religious fraternal benefit society plan described in 
        paragraph (2), notwithstanding any other provision of 
        this part to the contrary and in accordance with 
        regulations of the Secretary, the society offering the 
        plan may restrict the enrollment of individuals under 
        this part to individuals who are members of the church, 
        convention, or group described in paragraph (3)(B) with 
        which the society is affiliated.
          (2) Medicare+choice religious fraternal benefit 
        society plan described.--For purposes of this 
        subsection, a Medicare+Choice religious fraternal 
        benefit society plan described in this paragraph is a 
        Medicare+Choice plan described in section 1851(a)(2) 
        that--
                  (A) is offered by a religious fraternal 
                benefit society described in paragraph (3) only 
                to members of the church, convention, or group 
                described in paragraph (3)(B); and
                  (B) permits all such members to enroll under 
                the plan without regard to health status-
                related factors.
        Nothing in this subsection shall be construed as 
        waiving any plan requirements relating to financial 
        solvency.
          (3) Religious fraternal benefit society defined.--For 
        purposes of paragraph (2)(A), a ``religious fraternal 
        benefit society'' described in this section is an 
        organization that--
                  (A) is described in section 501(c)(8) of the 
                Internal Revenue Code of 1986 and is exempt 
                from taxation under section 501(a) of such Act;
                  (B) is affiliated with, carries out the 
                tenets of, and shares a religious bond with, a 
                church or convention or association of churches 
                or an affiliated group of churches;
                  (C) offers, in addition to a Medicare+Choice 
                religious fraternal benefit society plan, 
                health coverage to individuals not entitled to 
                benefits under this title who are members of 
                such church, convention, or group; and
                  (D) does not impose any limitation on 
                membership in the society based on any health 
                status-related factor.
          (4) Payment adjustment.--Under regulations of the 
        Secretary, in the case of individuals enrolled under 
        this part under a Medicare+Choice religious fraternal 
        benefit society plan described in paragraph (2), the 
        Secretary shall provide for such adjustment to the 
        payment amounts otherwise established under section 
        1854 as may be appropriate to assure an appropriate 
        payment level, taking into account the actuarial 
        characteristics and experience of such individuals.
  (f) Requirements Regarding Enrollment in Specialized MA Plans 
for Special Needs Individuals.--
          (1) Requirements for enrollment.--In the case of a 
        specialized MA plan for special needs individuals (as 
        defined in subsection (b)(6)), notwithstanding any 
        other provision of this part and in accordance with 
        regulations of the Secretary and for periods before 
        January 1, 2019, the plan may restrict the enrollment 
        of individuals under the plan to individuals who are 
        within one or more classes of special needs 
        individuals.
          (2) Additional requirements for institutional snps.--
        In the case of a specialized MA plan for special needs 
        individuals described in subsection (b)(6)(B)(i), the 
        applicable requirements described in this paragraph are 
        as follows:
                  (A) Each individual that enrolls in the plan 
                on or after January 1, 2010, is a special needs 
                individuals described in subsection 
                (b)(6)(B)(i). In the case of an individual who 
                is living in the community but requires an 
                institutional level of care, such individual 
                shall not be considered a special needs 
                individual described in subsection (b)(6)(B)(i) 
                unless the determination that the individual 
                requires an institutional level of care was 
                made--
                          (i) using a State assessment tool of 
                        the State in which the individual 
                        resides; and
                          (ii) by an entity other than the 
                        organization offering the plan.
                  (B) The plan meets the requirements described 
                in paragraph (5).
                  (C) If applicable, the plan meets the 
                requirement described in paragraph (7).
          (3) Additional requirements for dual snps.--In the 
        case of a specialized MA plan for special needs 
        individuals described in subsection (b)(6)(B)(ii), the 
        applicable requirements described in this paragraph are 
        as follows:
                  (A) Each individual that enrolls in the plan 
                on or after January 1, 2010, is a special needs 
                individuals described in subsection 
                (b)(6)(B)(ii).
                  (B) The plan meets the requirements described 
                in paragraph (5).
                  (C) The plan provides each prospective 
                enrollee, prior to enrollment, with a 
                comprehensive written statement (using 
                standardized content and format established by 
                the Secretary) that describes--
                          (i) the benefits and cost-sharing 
                        protections that the individual is 
                        entitled to under the State Medicaid 
                        program under title XIX; and
                          (ii) which of such benefits and cost-
                        sharing protections are covered under 
                        the plan.
                Such statement shall be included with any 
                description of benefits offered by the plan.
                  (D) The plan has a contract with the State 
                Medicaid agency to provide benefits, or arrange 
                for benefits to be provided, for which such 
                individual is entitled to receive as medical 
                assistance under title XIX. Such benefits may 
                include long-term care services consistent with 
                State policy.
                  (E) If applicable, the plan meets the 
                requirement described in paragraph (7).
          (4) Additional requirements for severe or disabling 
        chronic condition snps.--In the case of a specialized 
        MA plan for special needs individuals described in 
        subsection (b)(6)(B)(iii), the applicable requirements 
        described in this paragraph are as follows:
                  (A) Each individual that enrolls in the plan 
                on or after January 1, 2010, is a special needs 
                individual described in subsection 
                (b)(6)(B)(iii).
                  (B) The plan meets the requirements described 
                in paragraph (5).
                  (C) If applicable, the plan meets the 
                requirement described in paragraph (7).
          (5) Care management requirements for all snps.--The 
        requirements described in this paragraph are that the 
        organization offering a specialized MA plan for special 
        needs individuals--
                  (A) have in place an evidenced-based model of 
                care with appropriate networks of providers and 
                specialists; and
                  (B) with respect to each individual enrolled 
                in the plan--
                          (i) conduct an initial assessment and 
                        an annual reassessment of the 
                        individual's physical, psychosocial, 
                        and functional needs;
                          (ii) develop a plan, in consultation 
                        with the individual as feasible, that 
                        identifies goals and objectives, 
                        including measurable outcomes as well 
                        as specific services and benefits to be 
                        provided; and
                          (iii) use an interdisciplinary team 
                        in the management of care.
          (6) Transition and exception regarding restriction on 
        enrollment.--
                  (A) In general.--Subject to subparagraph (C), 
                the Secretary shall establish procedures for 
                the transition of applicable individuals to--
                          (i) a Medicare Advantage plan that is 
                        not a specialized MA plan for special 
                        needs individuals (as defined in 
                        subsection (b)(6)); or
                          (ii) the original medicare fee-for-
                        service program under parts A and B.
                  (B) Applicable individuals.--For purposes of 
                clause (i), the term ``applicable individual'' 
                means an individual who--
                          (i) is enrolled under a specialized 
                        MA plan for special needs individuals 
                        (as defined in subsection (b)(6)); and
                          (ii) is not within the 1 or more of 
                        the classes of special needs 
                        individuals to which enrollment under 
                        the plan is restricted to.
                  (C) Exception.--The Secretary shall provide 
                for an exception to the transition described in 
                subparagraph (A) for a limited period of time 
                for individuals enrolled under a specialized MA 
                plan for special needs individuals described in 
                subsection (b)(6)(B)(ii) who are no longer 
                eligible for medical assistance under title 
                XIX.
                  (D) Timeline for initial transition.--The 
                Secretary shall ensure that applicable 
                individuals enrolled in a specialized MA plan 
                for special needs individuals (as defined in 
                subsection (b)(6)) prior to January 1, 2010, 
                are transitioned to a plan or the program 
                described in subparagraph (A) by not later than 
                January 1, 2013.
          (7) Authority to require special needs plans be ncqa 
        approved.--For 2012 and subsequent years, the Secretary 
        shall require that a Medicare Advantage organization 
        offering a specialized MA plan for special needs 
        individuals be approved by the National Committee for 
        Quality Assurance (based on standards established by 
        the Secretary).
  (g) Special Rules for Senior Housing Facility Plans.--
          (1) In general.--In the case of a Medicare Advantage 
        senior housing facility plan described in paragraph 
        (2), notwithstanding any other provision of this part 
        to the contrary and in accordance with regulations of 
        the Secretary, the service area of such plan may be 
        limited to a senior housing facility in a geographic 
        area.
          (2) Medicare advantage senior housing facility plan 
        described.--For purposes of this subsection, a Medicare 
        Advantage senior housing facility plan is a Medicare 
        Advantage plan that--
                  (A) restricts enrollment of individuals under 
                this part to individuals who reside in a 
                continuing care retirement community (as 
                defined in section 1852(l)(4)(B));
                  (B) provides primary care services onsite and 
                has a ratio of accessible physicians to 
                beneficiaries that the Secretary determines is 
                adequate;
                  (C) provides transportation services for 
                beneficiaries to specialty providers outside of 
                the facility; and
                  (D) has participated (as of December 31, 
                2009) in a demonstration project established by 
                the Secretary under which such a plan was 
                offered for not less than 1 year.

           *       *       *       *       *       *       *


      B. Changes in Existing Law Proposed by the Bill, as Reported

    In compliance with clause 3(e)(1)(B) of rule XIII of the 
Rules of the House of Representatives, changes in existing law 
proposed by the bill, as reported, are shown as follows 
(existing law proposed to be omitted is enclosed in black 
brackets, new matter is printed in italics, existing law in 
which no change is proposed is shown in roman):

         Changes in Existing Law Made by the Bill, as Reported

  In compliance with clause 3(e)(1)(B) of rule XIII of the 
Rules of the House of Representatives, changes in existing law 
proposed by the bill, as reported, are shown as follows (new 
matter is printed in italics and existing law in which no 
change is proposed is shown in roman):

                          SOCIAL SECURITY ACT




           *       *       *       *       *       *       *
TITLE XVIII--HEALTH INSURANCE FOR THE AGED AND DISABLED

           *       *       *       *       *       *       *



                    Part C--Medicare+Choice Program


                 eligibility, election, and enrollment

  Sec. 1851. (a) Choice of Medicare Benefits Through 
Medicare+Choice Plans.--
          (1) In general.--Subject to the provisions of this 
        section, each Medicare+Choice eligible individual (as 
        defined in paragraph (3)) is entitled to elect to 
        receive benefits (other than qualified prescription 
        drug benefits) under this title--
                  (A) through the original medicare fee-for-
                service program under parts A and B, or
                  (B) through enrollment in a Medicare+Choice 
                plan under this part,
        and may elect qualified prescription drug coverage in 
        accordance with section 1860D-1.
          (2) Types of medicare+choice plans that may be 
        available.--A Medicare+Choice plan may be any of the 
        following types of plans of health insurance:
                  (A) Coordinated care plans (including 
                regional plans).--
                          (i) In general.--Coordinated care 
                        plans which provide health care 
                        services, including but not limited to 
                        health maintenance organization plans 
                        (with or without point of service 
                        options), plans offered by provider-
                        sponsored organizations (as defined in 
                        section 1855(d)), and regional or local 
                        preferred provider organization plans 
                        (including MA regional plans).
                          (ii) Specialized ma plans for special 
                        needs individuals.--Specialized MA 
                        plans for special needs individuals (as 
                        defined in section 1859(b)(6)) may be 
                        any type of coordinated care plan.
                  (B) Combination of msa plan and contributions 
                to medicare+choice msa.--An MSA plan, as 
                defined in section 1859(b)(3), and a 
                contribution into a Medicare+Choice medical 
                savings account (MSA).
                  (C) Private fee-for-service plans.--A 
                Medicare+Choice private fee-for-service plan, 
                as defined in section 1859(b)(2).
          (3) Medicare+choice [eligible individual.--]
                  [(A) In general.--In this title, subject to 
                subparagraph (B),] eligible individual._In this 
                title, the term ``Medicare+Choice eligible 
                individual'' means an individual who is 
                entitled to benefits under part A and enrolled 
                under part B.
                  [(B) Special rule for end-stage renal 
                disease.--Such term shall not include an 
                individual medically determined to have end-
                stage renal disease, except that--
                          [(i) an individual who develops end-
                        stage renal disease while enrolled in a 
                        Medicare+Choice plan may continue to be 
                        enrolled in that plan; and
                          [(ii) in the case of such an 
                        individual who is enrolled in a 
                        Medicare+Choice plan under clause (i) 
                        (or subsequently under this clause), if 
                        the enrollment is discontinued under 
                        circumstances described in subsection 
                        (e)(4)(A), then the individual will be 
                        treated as a ``Medicare+Choice eligible 
                        individual'' for purposes of electing 
                        to continue enrollment in another 
                        Medicare+Choice plan.
                An individual who develops end-stage renal 
                disease while enrolled in a reasonable cost 
                reimbursement contract under section 1876(h) 
                shall be treated as an MA eligible individual 
                for purposes of applying the deemed enrollment 
                under subsection (c)(4).]
  (b) Special Rules.--
          (1) Residence requirement.--
                  (A) In general.--Except as the Secretary may 
                otherwise provide and except as provided in 
                subparagraph (C), an individual is eligible to 
                elect a Medicare+Choice plan offered by a 
                Medicare+Choice organization only if the plan 
                serves the geographic area in which the 
                individual resides.
                  (B) Continuation of enrollment permitted.--
                Pursuant to rules specified by the Secretary, 
                the Secretary shall provide thatan MA local 
                plan may offer to all individuals residing in a 
                geographic area the option to continue 
                enrollment in the plan, notwithstanding that 
                the individual no longer resides in the service 
                area of the plan, so long as the plan provides 
                that individuals exercising this option have, 
                as part of the benefits under the original 
                medicare fee-for-service program option, 
                reasonable access within that geographic area 
                to the full range of basic benefits, subject to 
                reasonable cost sharing liability in obtaining 
                such benefits.
                  (C) Continuation of enrollment permitted 
                where service changed.--Notwithstanding 
                subparagraph (A) and in addition to 
                subparagraph (B), if a Medicare+Choice 
                organization eliminates from its service area a 
                Medicare+Choice payment area that was 
                previously within its service area, the 
                organization may elect to offer individuals 
                residing in all or portions of the affected 
                area who would otherwise be ineligible to 
                continue enrollment the option to continue 
                enrollment in an MA local plan it offers so 
                long as--
                          (i) the enrollee agrees to receive 
                        the full range of basic benefits 
                        (excluding emergency and urgently 
                        needed care) exclusively at facilities 
                        designated by the organization within 
                        the plan service area; and
                          (ii) there is no other 
                        Medicare+Choice plan offered in the 
                        area in which the enrollee resides at 
                        the time of the organization's 
                        election.
          (2) Special rule for certain individuals covered 
        under fehbp or eligible for veterans or military health 
        benefits, veterans.--
                  (A) FEHBP.--An individual who is enrolled in 
                a health benefit plan under chapter 89 of title 
                5, United States Code, is not eligible to 
                enroll in an MSA plan until such time as the 
                Director of the Office of Management and Budget 
                certifies to the Secretary that the Office of 
                Personnel Management has adopted policies which 
                will ensure that the enrollment of such 
                individuals in such plans will not result in 
                increased expenditures for the Federal 
                Government for health benefit plans under such 
                chapter.
                  (B) VA and dod.--The Secretary may apply 
                rules similar to the rules described in 
                subparagraph (A) in the case of individuals who 
                are eligible for health care benefits under 
                chapter 55 of title 10, United States Code, or 
                under chapter 17 of title 38 of such Code.
          (3) Limitation on eligibility of qualified medicare 
        beneficiaries and other medicaid beneficiaries to 
        enroll in an msa plan.--An individual who is a 
        qualified medicare beneficiary (as defined in section 
        1905(p)(1)), a qualified disabled and working 
        individual (described in section 1905(s)), an 
        individual described in section 1902(a)(10)(E)(iii), or 
        otherwise entitled to medicare cost-sharing under a 
        State plan under title XIX is not eligible to enroll in 
        an MSA plan.
          (4) Coverage under msa plans.--
                  (A) In general.--Under rules established by 
                the Secretary, an individual is not eligible to 
                enroll (or continue enrollment) in an MSA plan 
                for a year unless the individual provides 
                assurances satisfactory to the Secretary that 
                the individual will reside in the United States 
                for at least 183 days during the year.
                  (B) Evaluation.--The Secretary shall 
                regularly evaluate the impact of permitting 
                enrollment in MSA plans under this part on 
                selection (including adverse selection), use of 
                preventive care, access to care, and the 
                financial status of the Trust Funds under this 
                title.
                  (C) Reports.--The Secretary shall submit to 
                Congress periodic reports on the numbers of 
                individuals enrolled in such plans and on the 
                evaluation being conducted under subparagraph 
                (B).
  (c) Process for Exercising Choice.--
          (1) In general.--The Secretary shall establish a 
        process through which elections described in subsection 
        (a) are made and changed, including the form and manner 
        in which such elections are made and changed. Subject 
        to paragraph (4), such elections shall be made or 
        changed only during coverage election periods specified 
        under subsection (e) and shall become effective as 
        provided in subsection (f).
          (2) Coordination through medicare+choice 
        organizations.--
                  (A) Enrollment.--Such process shall permit an 
                individual who wishes to elect a 
                Medicare+Choice plan offered by a 
                Medicare+Choice organization to make such 
                election through the filing of an appropriate 
                election form with the organization.
                  (B) Disenrollment.--Such process shall permit 
                an individual, who has elected a 
                Medicare+Choice plan offered by a 
                Medicare+Choice organization and who wishes to 
                terminate such election, to terminate such 
                election through the filing of an appropriate 
                election form with the organization.
          (3) Default.--
                  (A) Initial election.--
                          (i) In general.--Subject to clause 
                        (ii), an individual who fails to make 
                        an election during an initial election 
                        period under subsection (e)(1) is 
                        deemed to have chosen the original 
                        medicare fee-for-service program 
                        option.
                          (ii) Seamless continuation of 
                        coverage.--The Secretary may establish 
                        procedures under which an individual 
                        who is enrolled in a health plan (other 
                        than Medicare+Choice plan) offered by a 
                        Medicare+Choice organization at the 
                        time of the initial election period and 
                        who fails to elect to receive coverage 
                        other than through the organization is 
                        deemed to have elected the 
                        Medicare+Choice plan offered by the 
                        organization (or, if the organization 
                        offers more than one such plan, such 
                        plan or plans as the Secretary 
                        identifies under such procedures).
                  (B) Continuing periods.--An individual who 
                has made (or is deemed to have made) an 
                election under this section is considered to 
                have continued to make such election until such 
                time as--
                          (i) the individual changes the 
                        election under this section, or
                          (ii) the Medicare+Choice plan with 
                        respect to which such election is in 
                        effect is discontinued or, subject to 
                        subsection (b)(1)(B), no longer serves 
                        the area in which the individual 
                        resides.
          (4) Deemed enrollment relating to converted 
        reasonable cost reimbursement contracts.--
                  (A) In general.--On the first day of the 
                annual, coordinated election period under 
                subsection (e)(3) for plan years beginning on 
                or after January 1, 2017, an MA eligible 
                individual described in clause (i) or (ii) of 
                subparagraph (B) is deemed, unless the 
                individual elects otherwise, to have elected to 
                receive benefits under this title through an 
                applicable MA plan (and shall be enrolled in 
                such plan) beginning with such plan year, if--
                          (i) the individual is enrolled in a 
                        reasonable cost reimbursement contract 
                        under section 1876(h) in the previous 
                        plan year;
                          (ii) such reasonable cost 
                        reimbursement contract was extended or 
                        renewed for the last reasonable cost 
                        reimbursement contract year of the 
                        contract (as described in subclause (I) 
                        of section 1876(h)(5)(C)(iv)) pursuant 
                        to such section;
                          (iii) the eligible organization that 
                        is offering such reasonable cost 
                        reimbursement contract provided the 
                        notice described in subclause (III) of 
                        such section that the contract was to 
                        be converted;
                          (iv) the applicable MA plan--
                                  (I) is the plan that was 
                                converted from the reasonable 
                                cost reimbursement contract 
                                described in clause (iii);
                                  (II) is offered by the same 
                                entity (or an organization 
                                affiliated with such entity 
                                that has a common ownership 
                                interest of control) that 
                                entered into such contract; and
                                  (III) is offered in the 
                                service area where the 
                                individual resides;
                          (v) in the case of reasonable cost 
                        reimbursement contracts that provide 
                        coverage under parts A and B (and, to 
                        the extent the Secretary determines it 
                        to be feasible, contracts that provide 
                        only part B coverage), the difference 
                        between the estimated individual costs 
                        (as determined applicable by the 
                        Secretary) for the applicable MA plan 
                        and such costs for the predecessor cost 
                        plan does not exceed a threshold 
                        established by the Secretary; and
                          (vi) the applicable MA plan--
                                  (I) provides coverage for 
                                enrollees transitioning from 
                                the converted reasonable cost 
                                reimbursement contract to such 
                                plan to maintain current 
                                providers of services and 
                                suppliers and course of 
                                treatment at the time of 
                                enrollment for a period of at 
                                least 90 days after enrollment; 
                                and
                                  (II) during such period, pays 
                                such providers of services and 
                                suppliers for items and 
                                services furnished to the 
                                enrollee an amount that is not 
                                less than the amount of payment 
                                applicable for such items and 
                                services under the original 
                                Medicare fee-for-service 
                                program under parts A and B.
                  (B) MA eligible individuals described.--
                          (i) Without prescription drug 
                        coverage.--An MA eligible individual 
                        described in this clause, with respect 
                        to a plan year, is an MA eligible 
                        individual who is enrolled in a 
                        reasonable cost reimbursement contract 
                        under section 1876(h) in the previous 
                        plan year and who is not, for such 
                        previous plan year, enrolled in a 
                        prescription drug plan under part D, 
                        including coverage under section 1860D-
                        22.
                          (ii) With prescription drug 
                        coverage.--An MA eligible individual 
                        described in this clause, with respect 
                        to a plan year, is an MA eligible 
                        individual who is enrolled in a 
                        reasonable cost reimbursement contract 
                        under section 1876(h) in the previous 
                        plan year and who, for such previous 
                        plan year, is enrolled in a 
                        prescription drug plan under part D--
                                  (I) through such contract; or
                                  (II) through a prescription 
                                drug plan, if the sponsor of 
                                such plan is the same entity 
                                (or an organization affiliated 
                                with such entity) that entered 
                                into such contract.
                  (C) Applicable ma plan defined.--In this 
                paragraph, the term ``applicable MA plan'' 
                means, in the case of an individual described 
                in--
                          (i) subparagraph (B)(i), an MA plan 
                        that is not an MA-PD plan; and
                          (ii) subparagraph (B)(ii), an MA-PD 
                        plan.
                  (D) Identification and notification of deemed 
                individuals.--Not later than 45 days before the 
                first day of the annual, coordinated election 
                period under subsection (e)(3) for plan years 
                beginning on or after January 1, 2017, the 
                Secretary shall identify and notify the 
                individuals who will be subject to deemed 
                elections under subparagraph (A) on the first 
                day of such period.
  (d) Providing Information To Promote Informed Choice.--
          (1) In general.--The Secretary shall provide for 
        activities under this subsection to broadly disseminate 
        information to medicare beneficiaries (and prospective 
        medicare beneficiaries) on the coverage options 
        provided under this section in order to promote an 
        active, informed selection among such options.
          (2) Provision of notice.--
                  (A) Open season notification.--At least 15 
                days before the beginning of each annual, 
                coordinated election period (as defined in 
                subsection (e)(3)(B)), the Secretary shall mail 
                to each Medicare+Choice eligible individual 
                residing in an area the following:
                          (i) General information.--The general 
                        information described in paragraph (3).
                          (ii) List of plans and comparison of 
                        plan options.--A list identifying the 
                        Medicare+Choice plans that are (or will 
                        be) available to residents of the area 
                        and information described in paragraph 
                        (4) concerning such plans. Such 
                        information shall be presented in a 
                        comparative form.
                          (iii) Additional information.--Any 
                        other information that the Secretary 
                        determines will assist the individual 
                        in making the election under this 
                        section, including any additional 
                        information that individuals determined 
                        to have end-stage renal disease may 
                        need to make informed decisions with 
                        respect to such an election.
                The mailing of such information shall be 
                coordinated, to the extent practicable, with 
                the mailing of any annual notice under section 
                1804.
                  (B) Notification to newly eligible 
                medicare+choice eligible individuals.--To the 
                extent practicable, the Secretary shall, not 
                later than 30 days before the beginning of the 
                initial Medicare+Choice enrollment period for 
                an individual described in subsection (e)(1), 
                mail to the individual the information 
                described in subparagraph (A).
                          (ii) Notification related to certain 
                        deemed elections.--The Secretary shall 
                        require a Medicare Advantage 
                        organization that is offering a 
                        Medicare Advantage plan that has been 
                        converted from a reasonable cost 
                        reimbursement contract pursuant to 
                        section 1876(h)(5)(C)(iv) to mail, not 
                        later than 30 days prior to the first 
                        day of the annual, coordinated election 
                        period under subsection (e)(3) of a 
                        year, to any individual enrolled under 
                        such contract and identified by the 
                        Secretary under subsection (c)(4)(D) 
                        for such year--
                                  (I) a notification that such 
                                individual will, on such day, 
                                be deemed to have made an 
                                election with respect to such 
                                plan to receive benefits under 
                                this title through an MA plan 
                                or MA-PD plan (and shall be 
                                enrolled in such plan) for the 
                                next plan year under subsection 
                                (c)(4)(A), but that the 
                                individual may make a different 
                                election during the annual, 
                                coordinated election period for 
                                such year;
                                  (II) the information 
                                described in subparagraph (A);
                                  (III) a description of the 
                                differences between such MA 
                                plan or MA-PD plan and the 
                                reasonable cost reimbursement 
                                contract in which the 
                                individual was most recently 
                                enrolled with respect to 
                                benefits covered under such 
                                plans, including cost-sharing, 
                                premiums, drug coverage, and 
                                provider networks;
                                  (IV) information about the 
                                special period for elections 
                                under subsection (e)(2)(F); and
                                  (V) other information the 
                                Secretary may specify.
                  (C) Form.--The information disseminated under 
                this paragraph shall be written and formatted 
                using language that is easily understandable by 
                medicare beneficiaries.
                  (D) Periodic updating.--The information 
                described in subparagraph (A) shall be updated 
                on at least an annual basis to reflect changes 
                in the availability of Medicare+Choice plans 
                and the benefits and Medicare+Choice monthly 
                basic and supplemental beneficiary premiums for 
                such plans.
          (3) General information.--General information under 
        this paragraph, with respect to coverage under this 
        part during a year, shall include the following:
                  (A) Benefits under original medicare fee-for-
                service program option.--A general description 
                of the benefits covered under the original 
                medicare fee-for-service program under parts A 
                and B, including--
                          (i) covered items and services,
                          (ii) beneficiary cost sharing, such 
                        as deductibles, coinsurance, and 
                        copayment amounts, and
                          (iii) any beneficiary liability for 
                        balance billing.
                  (B) Election procedures.--Information and 
                instructions on how to exercise election 
                options under this section.
                  (C) Rights.--A general description of 
                procedural rights (including grievance and 
                appeals procedures) of beneficiaries under the 
                original medicare fee-for-service program and 
                the Medicare+Choice program and the right to be 
                protected against discrimination based on 
                health status-related factors under section 
                1852(b).
                  (D) Information on medigap and medicare 
                select.--A general description of the benefits, 
                enrollment rights, and other requirements 
                applicable to medicare supplemental policies 
                under section 1882 and provisions relating to 
                medicare select policies described in section 
                1882(t).
                  (E) Potential for contract termination.--The 
                fact that a Medicare+Choice organization may 
                terminate its contract, refuse to renew its 
                contract, or reduce the service area included 
                in its contract, under this part, and the 
                effect of such a termination, nonrenewal, or 
                service area reduction may have on individuals 
                enrolled with the Medicare+Choice plan under 
                this part.
                  (F) Catastrophic coverage and single 
                deductible.--In the case of an MA regional 
                plan, a description of the catastrophic 
                coverage and single deductible applicable under 
                the plan.
          (4) Information comparing plan options.--Information 
        under this paragraph, with respect to a Medicare+Choice 
        plan for a year, shall include the following:
                  (A) Benefits.--The benefits covered under the 
                plan, including the following:
                          (i) Covered items and services beyond 
                        those provided under the original 
                        medicare fee-for-service program.
                          (ii) Any beneficiary cost sharing, 
                        including information on the single 
                        deductible (if applicable) under 
                        section 1858(b)(1).
                          (iii) Any maximum limitations on out-
                        of-pocket expenses.
                          (iv) In the case of an MSA plan, 
                        differences in cost sharing, premiums, 
                        and balance billing under such a plan 
                        compared to under other Medicare+Choice 
                        plans.
                          (v) In the case of a Medicare+Choice 
                        private fee-for-service plan, 
                        differences in cost sharing, premiums, 
                        and balance billing under such a plan 
                        compared to under other Medicare+Choice 
                        plans.
                          (vi) The extent to which an enrollee 
                        may obtain benefits through out-of-
                        network health care providers.
                          (vii) The extent to which an enrollee 
                        may select among in-network providers 
                        and the types of providers 
                        participating in the plan's network.
                          (viii) The organization's coverage of 
                        emergency and urgently needed care.
                  (B) Premiums.--
                          (i) In general.--The monthly amount 
                        of the premium charged to an 
                        individual.
                          (ii) Reductions.--The reduction in 
                        part B premiums, if any.
                  (C) Service area.--The service area of the 
                plan.
                  (D) Quality and performance.--To the extent 
                available, plan quality and performance 
                indicators for the benefits under the plan (and 
                how they compare to such indicators under the 
                original medicare fee-for-service program under 
                parts A and B in the area involved), 
                including--
                          (i) disenrollment rates for medicare 
                        enrollees electing to receive benefits 
                        through the plan for the previous 2 
                        years (excluding disenrollment due to 
                        death or moving outside the plan's 
                        service area),
                          (ii) information on medicare enrollee 
                        satisfaction,
                          (iii) information on health outcomes, 
                        and
                          (iv) the recent record regarding 
                        compliance of the plan with 
                        requirements of this part (as 
                        determined by the Secretary).
                  (E) Supplemental benefits.--Supplemental 
                health care benefits, including any reductions 
                in cost-sharing under section 1852(a)(3) and 
                the terms and conditions (including premiums) 
                for such benefits.
          (5) Maintaining a toll-free number and internet 
        site.--The Secretary shall maintain a toll-free number 
        for inquiries regarding Medicare+Choice options and the 
        operation of this part in all areas in which 
        Medicare+Choice plans are offered and an Internet site 
        through which individuals may electronically obtain 
        information on such options and Medicare+Choice plans.
          (6) Use of non-federal entities.--The Secretary may 
        enter into contracts with non-Federal entities to carry 
        out activities under this subsection.
          (7) Provision of information.--A Medicare+Choice 
        organization shall provide the Secretary with such 
        information on the organization and each 
        Medicare+Choice plan it offers as may be required for 
        the preparation of the information referred to in 
        paragraph (2)(A).
  (e) Coverage Election Periods.--
          (1) Initial choice upon eligibility to make election 
        if medicare+choice plans available to individual.--If, 
        at the time an individual first becomes entitled to 
        benefits under part A and enrolled under part B, there 
        is one or more Medicare+Choice plans offered in the 
        area in which the individual resides, the individual 
        shall make the election under this section during a 
        period specified by the Secretary such that if the 
        individual elects a Medicare+Choice plan during the 
        period, coverage under the plan becomes effective as of 
        the first date on which the individual may receive such 
        coverage. If any portion of an individual's initial 
        enrollment period under part B occurs after the end of 
        the annual, coordinated election period described in 
        paragraph (3)(B)(iii), the initial enrollment period 
        under this part shall further extend through the end of 
        the individual's initial enrollment period under part 
        B.
          (2) Open enrollment and disenrollment 
        opportunities.--Subject to paragraph (5)--
                  (A) Continuous open enrollment and 
                disenrollment through 2005.--At any time during 
                the period beginning January 1, 1998, and 
                ending on December 31, 2005, a Medicare+Choice 
                eligible individual may change the election 
                under subsection (a)(1).
                  (B) Continuous open enrollment and 
                disenrollment for first 6 months during 2006.--
                          (i) In general.--Subject to clause 
                        (ii), subparagraph(C)(iii), and 
                        subparagraph (D), at any time during 
                        the first 6 months of 2006, or, if the 
                        individual first becomes a 
                        Medicare+Choice eligible individual 
                        during 2006, during the first 6 months 
                        during 2006 in which the individual is 
                        a Medicare+Choice eligible individual, 
                        a Medicare+Choice eligible individual 
                        may change the election under 
                        subsection (a)(1).
                          (ii) Limitation of one change.--An 
                        individual may exercise the right under 
                        clause (i) only once. The limitation 
                        under this clause shall not apply to 
                        changes in elections effected during an 
                        annual, coordinated election period 
                        under paragraph (3) or during a special 
                        enrollment period under the first 
                        sentence of paragraph (4).
                  (C) Annual 45-day period for disenrollment 
                from ma plans to elect to receive benefits 
                under the original medicare fee-for-service 
                program.--Subject to subparagraph (D), at any 
                time during the first 45 days of a year 
                (beginning with 2011), an individual who is 
                enrolled in a Medicare Advantage plan may 
                change the election under subsection (a)(1), 
                but only with respect to coverage under the 
                original medicare fee-for-service program under 
                parts A and B, and may elect qualified 
                prescription drug coverage in accordance with 
                section 1860D-1.
                  (D) Continuous open enrollment for 
                institutionalized individuals.--At any time 
                after 2005 in the case of a Medicare+Choice 
                eligible individual who is institutionalized 
                (as defined by the Secretary), the individual 
                may elect under subsection (a)(1)--
                          (i) to enroll in a Medicare+Choice 
                        plan; or
                          (ii) to change the Medicare+Choice 
                        plan in which the individual is 
                        enrolled.
                  (E) Limited continuous open enrollment of 
                original fee-for-service enrollees in medicare 
                advantage non-prescription drug plans.--
                          (i) In general.--On any date during 
                        the period beginning on January 1, 
                        2007, and ending on July 31, 2007, on 
                        which a Medicare Advantage eligible 
                        individual is an unenrolled fee-for-
                        service individual (as defined in 
                        clause (ii)), the individual may elect 
                        under subsection (a)(1) to enroll in a 
                        Medicare Advantage plan that is not an 
                        MA-PD plan.
                          (ii) Unenrolled fee-for-service 
                        individual defined.--In this 
                        subparagraph, the term ``unenrolled 
                        fee-for-service individual'' means, 
                        with respect to a date, a Medicare 
                        Advantage eligible individual who--
                                  (I) is receiving benefits 
                                under this title through 
                                enrollment in the original 
                                medicare fee-for-service 
                                program under parts A and B;
                                  (II) is not enrolled in an MA 
                                plan on such date; and
                                  (III) as of such date is not 
                                otherwise eligible to elect to 
                                enroll in an MA plan.
                          (iii) Limitation of one change during 
                        the applicable period.--An individual 
                        may exercise the right under clause (i) 
                        only once during the period described 
                        in such clause.
                          (iv) No effect on coverage under a 
                        prescription drug plan.--Nothing in 
                        this subparagraph shall be construed as 
                        permitting an individual exercising the 
                        right under clause (i)--
                                  (I) who is enrolled in a 
                                prescription drug plan under 
                                part D, to disenroll from such 
                                plan or to enroll in a 
                                different prescription drug 
                                plan; or
                                  (II) who is not enrolled in a 
                                prescription drug plan, to 
                                enroll in such a plan.
                  (F) Special period for certain deemed 
                elections.--
                          (i) In general.--At any time during 
                        the period beginning after the last day 
                        of the annual, coordinated election 
                        period under paragraph (3) in which an 
                        individual is deemed to have elected to 
                        enroll in an MA plan or MA-PD plan 
                        under subsection (c)(4) and ending on 
                        the last day of February of the first 
                        plan year for which the individual is 
                        enrolled in such plan, such individual 
                        may change the election under 
                        subsection (a)(1) (including changing 
                        the MA plan or MA-PD plan in which the 
                        individual is enrolled).
                          (ii) Limitation of one change.--An 
                        individual may exercise the right under 
                        clause (i) only once during the 
                        applicable period described in such 
                        clause. The limitation under this 
                        clause shall not apply to changes in 
                        elections effected during an annual, 
                        coordinated election period under 
                        paragraph (3) or during a special 
                        enrollment period under paragraph (4).
          (3) Annual, coordinated election period.--
                  (A) In general.--Subject to paragraph (5), 
                each individual who is eligible to make an 
                election under this section may change such 
                election during an annual, coordinated election 
                period.
                  (B) Annual, coordinated election period.--For 
                purposes of this section, the term ``annual, 
                coordinated election period'' means--
                          (i) with respect to a year before 
                        2002, the month of November before such 
                        year;
                          (ii) with respect to 2002, 2003, 
                        2004, and 2005, the period beginning on 
                        November 15 and ending on December 31 
                        of the year before such year;
                          (iii) with respect to 2006, the 
                        period beginning on November 15, 2005, 
                        and ending on May 15, 2006;
                          (iv) with respect to 2007, 2008, 
                        2009, and 2010, the period beginning on 
                        November 15 and ending on December 31 
                        of the year before such year; and
                          (v) with respect to 2012 and 
                        succeeding years, the period beginning 
                        on October 15 and ending on December 7 
                        of the year before such year.
                  (C) Medicare+choice health information 
                fairs.--During the fall season of each year 
                (beginning with 1999) and during the period 
                described in subparagraph (B)(iii), in 
                conjunction with the annual coordinated 
                election period defined in subparagraph (B), 
                the Secretary shall provide for a nationally 
                coordinated educational and publicity campaign 
                to inform Medicare+Choice eligible individuals 
                about Medicare+Choice plans and the election 
                process provided under this section.
                  (D) Special information campaigns.--During 
                November 1998 the Secretary shall provide for 
                an educational and publicity campaign to inform 
                Medicare+Choice eligible individuals about the 
                availability of Medicare+Choice plans, and 
                eligible organizations with risk-sharing 
                contracts under section 1876, offered in 
                different areas and the election process 
                provided under this section. During the period 
                described in subparagraph (B)(iii), the 
                Secretary shall provide for an educational and 
                publicity campaign to inform MA eligible 
                individuals about the availability of MA plans 
                (including MA-PD plans) offered in different 
                areas and the election process provided under 
                this section.
          (4) Special election periods.--Effective as of 
        January 1, 2006, an individual may discontinue an 
        election of a Medicare+Choice plan offered by a 
        Medicare+Choice organization other than during an 
        annual, coordinated election period and make a new 
        election under this section if--
                  (A)(i) the certification of the organization 
                or plan under this part has been terminated, or 
                the organization or plan has notified the 
                individual of an impending termination of such 
                certification; or
                  (ii) the organization has terminated or 
                otherwise discontinued providing the plan in 
                the area in which the individual resides, or 
                has notified the individual of an impending 
                termination or discontinuation of such plan;
                  (B) the individual is no longer eligible to 
                elect the plan because of a change in the 
                individual's place of residence or other change 
                in circumstances (specified by the Secretary, 
                but not including termination of the 
                individual's enrollment on the basis described 
                in clause (i) or (ii) of subsection (g)(3)(B));
                  (C) the individual demonstrates (in 
                accordance with guidelines established by the 
                Secretary) that--
                          (i) the organization offering the 
                        plan substantially violated a material 
                        provision of the organization's 
                        contract under this part in relation to 
                        the individual (including the failure 
                        to provide an enrollee on a timely 
                        basis medically necessary care for 
                        which benefits are available under the 
                        plan or the failure to provide such 
                        covered care in accordance with 
                        applicable quality standards); or
                          (ii) the organization (or an agent or 
                        other entity acting on the 
                        organization's behalf) materially 
                        misrepresented the plan's provisions in 
                        marketing the plan to the individual; 
                        or
                  (D) the individual meets such other 
                exceptional conditions as the Secretary may 
                provide.
        Effective as of January 1, 2006, an individual who, 
        upon first becoming eligible for benefits under part A 
        at age 65, enrolls in a Medicare+Choice plan under this 
        part, the individual may discontinue the election of 
        such plan, and elect coverage under the original fee-
        for-service plan, at any time during the 12-month 
        period beginning on the effective date of such 
        enrollment.
          (5) Special rules for msa plans.--Notwithstanding the 
        preceding provisions of this subsection, an 
        individual--
                  (A) may elect an MSA plan only during--
                          (i) an initial open enrollment period 
                        described in paragraph (1), or
                          (ii) an annual, coordinated election 
                        period described in paragraph (3)(B);
                  (B) subject to subparagraph (C), may not 
                discontinue an election of an MSA plan except 
                during the periods described in clause (ii) or 
                (iii) of subparagraph (A) and under the first 
                sentence of paragraph (4); and
                  (C) who elects an MSA plan during an annual, 
                coordinated election period, and who never 
                previously had elected such a plan, may revoke 
                such election, in a manner determined by the 
                Secretary, by not later than December 15 
                following the date of the election.
          (6) Open enrollment periods.--Subject to paragraph 
        (5), a Medicare+Choice organization--
                  (A) shall accept elections or changes to 
                elections during the initial enrollment periods 
                described in paragraph (1), during the period 
                described in paragraph (2)(F), during the month 
                of November 1998 and during the annual, 
                coordinated election period under paragraph (3) 
                for each subsequent year, and during special 
                election periods described in the first 
                sentence of paragraph (4); and
                  (B) may accept other changes to elections at 
                such other times as the organization provides.
  (f) Effectiveness of Elections and Changes of Elections.--
          (1) During initial coverage election period.--An 
        election of coverage made during the initial coverage 
        election period under subsection (e)(1) subsection 
        (e)(1) shall take effect upon the date the individual 
        becomes entitled to benefits under part A and enrolled 
        under part B, except as the Secretary may provide 
        (consistent with section 1838) in order to prevent 
        retroactive coverage.
          (2) During continuous open enrollment periods.--An 
        election or change of coverage made under subsection 
        (e)(2) shall take effect with the first day of the 
        first calendar month following the date on which the 
        election or change is made.
          (3) Annual, coordinated election period.--An election 
        or change of coverage made during an annual, 
        coordinated election period (as defined in subsection 
        (e)(3)(B), other than the period described in clause 
        (iii) of such subsection) in a year shall take effect 
        as of the first day of the following year.
          (4) Other periods.--An election or change of coverage 
        made during any other period under subsection (e)(4) 
        shall take effect in such manner as the Secretary 
        provides in a manner consistent (to the extent 
        practicable) with protecting continuity of health 
        benefit coverage.
  (g) Guaranteed Issue and Renewal.--
          (1) In general.--Except as provided in this 
        subsection, a Medicare+Choice organization shall 
        provide that at any time during which elections are 
        accepted under this section with respect to a 
        Medicare+Choice plan offered by the organization, the 
        organization will accept without restrictions 
        individuals who are eligible to make such election.
          (2) Priority.--If the Secretary determines that a 
        Medicare+Choice organization, in relation to a 
        Medicare+Choice plan it offers, has a capacity limit 
        and the number of Medicare+Choice eligible individuals 
        who elect the plan under this section exceeds the 
        capacity limit, the organization may limit the election 
        of individuals of the plan under this section but only 
        if priority in election is provided--
                  (A) first to such individuals as have elected 
                the plan at the time of the determination, and
                  (B) then to other such individuals in such a 
                manner that does not discriminate, on a basis 
                described in section 1852(b), among the 
                individuals (who seek to elect the plan).
        The preceding sentence shall not apply if it would 
        result in the enrollment of enrollees substantially 
        nonrepresentative, as determined in accordance with 
        regulations of the Secretary, of the medicare 
        population in the service area of the plan.
          (3) Limitation on termination of election.--
                  (A) In general.--Subject to subparagraph (B), 
                a Medicare+Choice organization may not for any 
                reason terminate the election of any individual 
                under this section for a Medicare+Choice plan 
                it offers.
                  (B) Basis for termination of election.--A 
                Medicare+Choice organization may terminate an 
                individual's election under this section with 
                respect to a Medicare+Choice plan it offers 
                if--
                          (i) any Medicare+Choice monthly basic 
                        and supplemental beneficiary premiums 
                        required with respect to such plan are 
                        not paid on a timely basis (consistent 
                        with standards under section 1856 that 
                        provide for a grace period for late 
                        payment of such premiums),
                          (ii) the individual has engaged in 
                        disruptive behavior (as specified in 
                        such standards), or
                          (iii) the plan is terminated with 
                        respect to all individuals under this 
                        part in the area in which the 
                        individual resides.
                  (C) Consequence of termination.--
                          (i) Terminations for cause.--Any 
                        individual whose election is terminated 
                        under clause (i) or (ii) of 
                        subparagraph (B) is deemed to have 
                        elected the original medicare fee-for-
                        service program option described in 
                        subsection (a)(1)(A).
                          (ii) Termination based on plan 
                        termination or service area 
                        reduction.--Any individual whose 
                        election is terminated under 
                        subparagraph (B)(iii) shall have a 
                        special election period under 
                        subsection (e)(4)(A) in which to change 
                        coverage to coverage under another 
                        Medicare+Choice plan. Such an 
                        individual who fails to make an 
                        election during such period is deemed 
                        to have chosen to change coverage to 
                        the original medicare fee-for-service 
                        program option described in subsection 
                        (a)(1)(A).
                  (D) Organization obligation with respect to 
                election forms.--Pursuant to a contract under 
                section 1857, each Medicare+Choice organization 
                receiving an election form under subsection 
                (c)(2) shall transmit to the Secretary (at such 
                time and in such manner as the Secretary may 
                specify) a copy of such form or such other 
                information respecting the election as the 
                Secretary may specify.
  (h) Approval of Marketing Material and Application Forms.--
          (1) Submission.--No marketing material or application 
        form may be distributed by a Medicare+Choice 
        organization to (or for the use of) Medicare+Choice 
        eligible individuals unless--
                  (A) at least 45 days (or 10 days in the case 
                described in paragraph (5)) before the date of 
                distribution the organization has submitted the 
                material or form to the Secretary for review, 
                and
                  (B) the Secretary has not disapproved the 
                distribution of such material or form.
          (2) Review.--The standards established under section 
        1856 shall include guidelines for the review of any 
        material or form submitted and under such guidelines 
        the Secretary shall disapprove (or later require the 
        correction of) such material or form if the material or 
        form is materially inaccurate or misleading or 
        otherwise makes a material misrepresentation.
          (3) Deemed approval (1-stop shopping).--In the case 
        of material or form that is submitted under paragraph 
        (1)(A) to the Secretary or a regional office of the 
        Department of Health and Human Services and the 
        Secretary or the office has not disapproved the 
        distribution of marketing material or form under 
        paragraph (1)(B) with respect to a Medicare+Choice plan 
        in an area, the Secretary is deemed not to have 
        disapproved such distribution in all other areas 
        covered by the plan and organization except with regard 
        to that portion of such material or form that is 
        specific only to an area involved.
          (4) Prohibition of certain marketing practices.--Each 
        Medicare+Choice organization shall conform to fair 
        marketing standards, in relation to Medicare+Choice 
        plans offered under this part, included in the 
        standards established under section 1856. Such 
        standards--
                  (A) shall not permit a Medicare+Choice 
                organization to provide for, subject to 
                subsection (j)(2)(C), cash, gifts, prizes, or 
                other monetary rebates as an inducement for 
                enrollment or otherwise;
                  (B) may include a prohibition against a 
                Medicare+Choice organization (or agent of such 
                an organization) completing any portion of any 
                election form used to carry out elections under 
                this section on behalf of any individual;
                  (C) shall not permit a Medicare Advantage 
                organization (or the agents, brokers, and other 
                third parties representing such organization) 
                to conduct the prohibited activities described 
                in subsection (j)(1); and
                  (D) shall only permit a Medicare Advantage 
                organization (and the agents, brokers, and 
                other third parties representing such 
                organization) to conduct the activities 
                described in subsection (j)(2) in accordance 
                with the limitations established under such 
                subsection.
          (5) Special treatment of marketing material following 
        model marketing language.--In the case of marketing 
        material of an organization that uses, without 
        modification, proposed model language specified by the 
        Secretary, the period specified in paragraph (1)(A) 
        shall be reduced from 45 days to 10 days.
          (6) Required inclusion of plan type in plan name.--
        For plan years beginning on or after January 1, 2010, a 
        Medicare Advantage organization must ensure that the 
        name of each Medicare Advantage plan offered by the 
        Medicare Advantage organization includes the plan type 
        of the plan (using standard terminology developed by 
        the Secretary).
          (7) Strengthening the ability of states to act in 
        collaboration with the secretary to address fraudulent 
        or inappropriate marketing practices.--
                  (A) Appointment of agents and brokers.--Each 
                Medicare Advantage organization shall--
                          (i) only use agents and brokers who 
                        have been licensed under State law to 
                        sell Medicare Advantage plans offered 
                        by the Medicare Advantage organization;
                          (ii) in the case where a State has a 
                        State appointment law, abide by such 
                        law; and
                          (iii) report to the applicable State 
                        the termination of any such agent or 
                        broker, including the reasons for such 
                        termination (as required under 
                        applicable State law).
                  (B) Compliance with state information 
                requests.--Each Medicare Advantage organization 
                shall comply in a timely manner with any 
                request by a State for information regarding 
                the performance of a licensed agent, broker, or 
                other third party representing the Medicare 
                Advantage organization as part of an 
                investigation by the State into the conduct of 
                the agent, broker, or other third party.
  (i) Effect of Election of Medicare+Choice Plan Option.--
          (1) Payments to organizations.--Subject to sections 
        1852(a)(5), 1853(a)(4), 1853(g), 1853(h), 1886(d)(11), 
        1886(h)(3)(D), and 1853(m), payments under a contract 
        with a Medicare+Choice organization under section 
        1853(a) with respect to an individual electing a 
        Medicare+Choice plan offered by the organization shall 
        be instead of the amounts which (in the absence of the 
        contract) would otherwise be payable under parts A and 
        B for items and services furnished to the individual.
          (2) Only organization entitled to payment.--Subject 
        to sections 1853(a)(4), 1853(e), 1853(g), 1853(h), 
        1857(f)(2), 1858(h), 1886(d)(11), and 1886(h)(3)(D), 
        only the Medicare+Choice organization shall be entitled 
        to receive payments from the Secretary under this title 
        for services furnished to the individual.
          (3) FFS payment for expenses for kidney 
        acquisitions.--Paragraphs (1) and (2) do not apply with 
        respect to expenses for organ acquisitions for kidney 
        transplants described in section 1852(a)(1)(B)(i).
  (j) Prohibited Activities Described and Limitations on the 
Conduct of Certain Other Activities.--
          (1) Prohibited activities described.--The following 
        prohibited activities are described in this paragraph:
                  (A) Unsolicited means of direct contact.--Any 
                unsolicited means of direct contact of 
                prospective enrollees, including soliciting 
                door-to-door or any outbound telemarketing 
                without the prospective enrollee initiating 
                contact.
                  (B) Cross-selling.--The sale of other non-
                health related products (such as annuities and 
                life insurance) during any sales or marketing 
                activity or presentation conducted with respect 
                to a Medicare Advantage plan.
                  (C) Meals.--The provision of meals of any 
                sort, regardless of value, to prospective 
                enrollees at promotional and sales activities.
                  (D) Sales and marketing in health care 
                settings and at educational events.--Sales and 
                marketing activities for the enrollment of 
                individuals in Medicare Advantage plans that 
                are conducted--
                          (i) in health care settings in areas 
                        where health care is delivered to 
                        individuals (such as physician offices 
                        and pharmacies), except in the case 
                        where such activities are conducted in 
                        common areas in health care settings; 
                        and
                          (ii) at educational events.
          (2) Limitations.--The Secretary shall establish 
        limitations with respect to at least the following:
                  (A) Scope of marketing appointments.--The 
                scope of any appointment with respect to the 
                marketing of a Medicare Advantage plan. Such 
                limitation shall require advance agreement with 
                a prospective enrollee on the scope of the 
                marketing appointment and documentation of such 
                agreement by the Medicare Advantage 
                organization. In the case where the marketing 
                appointment is in person, such documentation 
                shall be in writing.
                  (B) Co-branding.--The use of the name or logo 
                of a co-branded network provider on Medicare 
                Advantage plan membership and marketing 
                materials.
                  (C) Limitation of gifts to nominal dollar 
                value.--The offering of gifts and other 
                promotional items other than those that are of 
                nominal value (as determined by the Secretary) 
                to prospective enrollees at promotional 
                activities.
                  (D) Compensation.--The use of compensation 
                other than as provided under guidelines 
                established by the Secretary. Such guidelines 
                shall ensure that the use of compensation 
                creates incentives for agents and brokers to 
                enroll individuals in the Medicare Advantage 
                plan that is intended to best meet their health 
                care needs.
                  (E) Required training, annual retraining, and 
                testing of agents, brokers, and other third 
                parties.--The use by a Medicare Advantage 
                organization of any individual as an agent, 
                broker, or other third party representing the 
                organization that has not completed an initial 
                training and testing program and does not 
                complete an annual retraining and testing 
                program.

                  benefits and beneficiary protections

  Sec. 1852. (a) Basic Benefits.--
          (1) Requirement.--
                  (A) In general.--Except as provided in 
                section 1859(b)(3) for MSA plans and except as 
                provided in paragraph (6) for MA regional 
                plans, each Medicare+Choice plan shall provide 
                to members enrolled under this part, through 
                providers and other persons that meet the 
                applicable requirements of this title and part 
                A of title XI, benefits under the original 
                medicare fee-for-service program option (and, 
                for plan years before 2006, additional benefits 
                required under section 1854(f)(1)(A)).
                  (B) Benefits under the original medicare fee-
                for-service program option defined.--
                          (i) In general.--For purposes of this 
                        part, the term ``benefits under the 
                        original medicare fee-for-service 
                        program option'' means those items and 
                        services (other than hospice care or 
                        coverage for organ acquisitions for 
                        kidney transplants, including as 
                        covered under section 1881(d)) for 
                        which benefits are available under 
                        parts A and B to individuals entitled 
                        to benefits under part A and enrolled 
                        under part B, with cost-sharing for 
                        those services as required under parts 
                        A and B or, subject to clause (iii), an 
                        actuarially equivalent level of cost-
                        sharing as determined in this part.
                          (ii) Special rule for regional 
                        plans.--In the case of an MA regional 
                        plan in determining an actuarially 
                        equivalent level of cost-sharing with 
                        respect to benefits under the original 
                        medicare fee-for-service program 
                        option, there shall only be taken into 
                        account, with respect to the 
                        application of section 1858(b)(2), such 
                        expenses only with respect to 
                        subparagraph (A) of such section.
                          (iii) Limitation on variation of cost 
                        sharing for certain benefits.--Subject 
                        to clause (v), cost-sharing for 
                        services described in clause (iv) shall 
                        not exceed the cost-sharing required 
                        for those services under parts A and B.
                          (iv) Services described.--The 
                        following services are described in 
                        this clause:
                                  (I) Chemotherapy 
                                administration services.
                                  (II) Renal dialysis services 
                                (as defined in section 
                                1881(b)(14)(B)).
                                  (III) Skilled nursing care.
                                  (IV) Such other services that 
                                the Secretary determines 
                                appropriate (including services 
                                that the Secretary determines 
                                require a high level of 
                                predictability and transparency 
                                for beneficiaries).
                          (v) Exception.--In the case of 
                        services described in clause (iv) for 
                        which there is no cost-sharing required 
                        under parts A and B, cost-sharing may 
                        be required for those services in 
                        accordance with clause (i).
          (2) Satisfaction of requirement.--
                  (A) In general.--A Medicare+Choice plan 
                (other than an MSA plan) offered by a 
                Medicare+Choice organization satisfies 
                paragraph (1)(A), with respect to benefits for 
                items and services furnished other than through 
                a provider or other person that has a contract 
                with the organization offering the plan, if the 
                plan provides payment in an amount so that--
                          (i) the sum of such payment amount 
                        and any cost sharing provided for under 
                        the plan, is equal to at least
                          (ii) the total dollar amount of 
                        payment for such items and services as 
                        would otherwise be authorized under 
                        parts A and B (including any balance 
                        billing permitted under such parts).
                  (B) Reference to related provisions.--For 
                provision relating to--
                          (i) limitations on balance billing 
                        against Medicare+Choice organizations 
                        for non-contract providers, see 
                        sections 1852(k) and 1866(a)(1)(O), and
                          (ii) limiting actuarial value of 
                        enrollee liability for covered 
                        benefits, see section 1854(e).
                  (C) Election of uniform coverage 
                determination.--In the case of a 
                Medicare+Choice organization that offers a 
                Medicare+Choice plan in an area in which more 
                than one local coverage determination is 
                applied with respect to different parts of the 
                area, the organization may elect to have the 
                local coverage determination for the part of 
                the area that is most beneficial to 
                Medicare+Choice enrollees (as identified by the 
                Secretary) apply with respect to all 
                Medicare+Choice enrollees enrolled in the plan.
          (3) Supplemental benefits.--
                  (A) Benefits included subject to secretary's 
                approval.--Each Medicare+Choice organization 
                may provide to individuals enrolled under this 
                part, other than under an MSA plan (without 
                affording those individuals an option to 
                decline the coverage), supplemental health care 
                benefits that the Secretary may approve. The 
                Secretary shall approve any such supplemental 
                benefits unless the Secretary determines that 
                including such supplemental benefits would 
                substantially discourage enrollment by 
                Medicare+Choice eligible individuals with the 
                organization.
                  (B) At enrollees' option.--
                          (i) In general.--Subject to clause 
                        (ii), a Medicare+Choice organization 
                        may provide to individuals enrolled 
                        under this part supplemental health 
                        care benefits that the individuals may 
                        elect, at their option, to have 
                        covered.
                          (ii) Special rule for msa plans.--A 
                        Medicare+Choice organization may not 
                        provide, under an MSA plan, 
                        supplemental health care benefits that 
                        cover the deductible described in 
                        section 1859(b)(2)(B). In applying the 
                        previous sentence, health benefits 
                        described in section 1882(u)(2)(B) 
                        shall not be treated as covering such 
                        deductible.
                  (C) Application to Medicare+Choice private 
                fee-for-service plans.--Nothing in this 
                paragraph shall be construed as preventing a 
                Medicare+Choice private fee-for-service plan 
                from offering supplemental benefits that 
                include payment for some or all of the balance 
                billing amounts permitted consistent with 
                section 1852(k) and coverage of additional 
                services that the plan finds to be medically 
                necessary. Such benefits may include reductions 
                in cost-sharing below the actuarial value 
                specified in section 1854(e)(4)(B).
          (4) Organization as secondary payer.--Notwithstanding 
        any other provision of law, a Medicare+Choice 
        organization may (in the case of the provision of items 
        and services to an individual under a Medicare+Choice 
        plan under circumstances in which payment under this 
        title is made secondary pursuant to section 1862(b)(2)) 
        charge or authorize the provider of such services to 
        charge, in accordance with the charges allowed under a 
        law, plan, or policy described in such section--
                  (A) the insurance carrier, employer, or other 
                entity which under such law, plan, or policy is 
                to pay for the provision of such services, or
                  (B) such individual to the extent that the 
                individual has been paid under such law, plan, 
                or policy for such services.
          (5) National coverage determinations and legislative 
        changes in benefits.--If there is a national coverage 
        determination or legislative change in benefits 
        required to be provided under this part made in the 
        period beginning on the date of an announcement under 
        section 1853(b) and ending on the date of the next 
        announcement under such section and the Secretary 
        projects that the determination will result in a 
        significant change in the costs to a Medicare+Choice 
        organization of providing the benefits that are the 
        subject of such national coverage determination and 
        that such change in costs was not incorporated in the 
        determination of the annual Medicare+Choice capitation 
        rate under section 1853 included in the announcement 
        made at the beginning of such period, then, unless 
        otherwise required by law--
                  (A) such determination or legislative change 
                in benefits shall not apply to contracts under 
                this part until the first contract year that 
                begins after the end of such period, and
                  (B) if such coverage determination or 
                legislative change provides for coverage of 
                additional benefits or coverage under 
                additional circumstances, section 1851(i)(1) 
                shall not apply to payment for such additional 
                benefits or benefits provided under such 
                additional circumstances until the first 
                contract year that begins after the end of such 
                period.
        The projection under the previous sentence shall be 
        based on an analysis by the Chief Actuary of the 
        Centers for Medicare & Medicaid Services of the 
        actuarial costs associated with the coverage 
        determination or legislative change in benefits.
          (6) Special benefit rules for regional plans.--In the 
        case of an MA plan that is an MA regional plan, 
        benefits under the plan shall include the benefits 
        described in paragraphs (1) and (2) of section 1858(b).
          (7) Limitation on cost-sharing for dual eligibles and 
        qualified medicare beneficiaries.--In the case of an 
        individual who is a full-benefit dual eligible 
        individual (as defined in section 1935(c)(6)) or a 
        qualified medicare beneficiary (as defined in section 
        1905(p)(1)) and who is enrolled in a specialized 
        Medicare Advantage plan for special needs individuals 
        described in section 1859(b)(6)(B)(ii), the plan may 
        not impose cost-sharing that exceeds the amount of 
        cost-sharing that would be permitted with respect to 
        the individual under title XIX if the individual were 
        not enrolled in such plan.
  (b) Antidiscrimination.--
          (1)  [Beneficiaries.-- 
                  [(A) In general.--A Medicare+Choice 
                organization] Beneficiaries._A Medicare 
                Advantage organization may not deny, limit, or 
                condition the coverage or provision of benefits 
                under this part, for individuals permitted to 
                be enrolled with the organization under this 
                part, based on any health status-related factor 
                described in section 2702(a)(1) of the Public 
                Health Service Act. The Secretary shall not 
                approve a plan of an organization if the 
                Secretary determines that the design of the 
                plan and its benefits are likely to 
                substantially discourage enrollment by certain 
                MA eligible individuals with the organization.
                  [(B) Construction.--Subparagraph (A) shall 
                not be construed as requiring a Medicare+Choice 
                organization to enroll individuals who are 
                determined to have end-stage renal disease, 
                except as provided under section 
                1851(a)(3)(B).]
          (2) Providers.--A Medicare+Choice organization shall 
        not discriminate with respect to participation, 
        reimbursement, or indemnification as to any provider 
        who is acting within the scope of the provider's 
        license or certification under applicable State law, 
        solely on the basis of such license or certification. 
        This paragraph shall not be construed to prohibit a 
        plan from including providers only to the extent 
        necessary to meet the needs of the plan's enrollees or 
        from establishing any measure designed to maintain 
        quality and control costs consistent with the 
        responsibilities of the plan.
  (c) Disclosure Requirements.--
          (1) Detailed description of plan provisions.--A 
        Medicare+Choice organization shall disclose, in clear, 
        accurate, and standardized form to each enrollee with a 
        Medicare+Choice plan offered by the organization under 
        this part at the time of enrollment and at least 
        annually thereafter, the following information 
        regarding such plan:
                  (A) Service area.--The plan's service area.
                  (B) Benefits.--Benefits offered under the 
                plan, including information described in 
                section 1851(d)(3)(A) and exclusions from 
                coverage and, if it is an MSA plan, a 
                comparison of benefits under such a plan with 
                benefits under other Medicare+Choice plans.
                  (C) Access.--The number, mix, and 
                distribution of plan providers, out-of-network 
                coverage (if any) provided by the plan, and any 
                point-of-service option (including the 
                supplemental premium for such option).
                  (D) Out-of-area coverage.--Out-of-area 
                coverage provided by the plan.
                  (E) Emergency coverage.--Coverage of 
                emergency services, including--
                          (i) the appropriate use of emergency 
                        services, including use of the 911 
                        telephone system or its local 
                        equivalent in emergency situations and 
                        an explanation of what constitutes an 
                        emergency situation;
                          (ii) the process and procedures of 
                        the plan for obtaining emergency 
                        services; and
                          (iii) the locations of (I) emergency 
                        departments, and (II) other settings, 
                        in which plan physicians and hospitals 
                        provide emergency services and post-
                        stabilization care.
                  (F) Supplemental benefits.--Supplemental 
                benefits available from the organization 
                offering the plan, including--
                          (i) whether the supplemental benefits 
                        are optional,
                          (ii) the supplemental benefits 
                        covered, and
                          (iii) the Medicare+Choice monthly 
                        supplemental beneficiary premium for 
                        the supplemental benefits.
                  (G) Prior authorization rules.--Rules 
                regarding prior authorization or other review 
                requirements that could result in nonpayment.
                  (H) Plan grievance and appeals procedures.--
                All plan appeal or grievance rights and 
                procedures.
                  (I) Quality improvement program.--A 
                description of the organization's quality 
                improvement program under subsection (e).
          (2) Disclosure upon request.--Upon request of a 
        Medicare+Choice eligible individual, a Medicare+Choice 
        organization must provide the following information to 
        such individual:
                  (A) The general coverage information and 
                general comparative plan information made 
                available under clauses (i) and (ii) of section 
                1851(d)(2)(A).
                  (B) Information on procedures used by the 
                organization to control utilization of services 
                and expenditures.
                  (C) Information on the number of grievances, 
                redeterminations, and appeals and on the 
                disposition in the aggregate of such matters.
                  (D) An overall summary description as to the 
                method of compensation of participating 
                physicians.
  (d) Access to Services.--
          (1) In general.--A Medicare+Choice organization 
        offering a Medicare+Choice plan may select the 
        providers from whom the benefits under the plan are 
        provided so long as--
                  (A) the organization makes such benefits 
                available and accessible to each individual 
                electing the plan within the plan service area 
                with reasonable promptness and in a manner 
                which assures continuity in the provision of 
                benefits;
                  (B) when medically necessary the organization 
                makes such benefits available and accessible 24 
                hours a day and 7 days a week;
                  (C) the plan provides for reimbursement with 
                respect to services which are covered under 
                subparagraphs (A) and (B) and which are 
                provided to such an individual other than 
                through the organization, if--
                          (i) the services were not emergency 
                        services (as defined in paragraph (3)), 
                        but (I) the services were medically 
                        necessary and immediately required 
                        because of an unforeseen illness, 
                        injury, or condition, and (II) it was 
                        not reasonable given the circumstances 
                        to obtain the services through the 
                        organization,
                          (ii) the services were renal dialysis 
                        services and were provided other than 
                        through the organization because the 
                        individual was temporarily out of the 
                        plan's service area, or
                          (iii) the services are maintenance 
                        care or post-stabilization care covered 
                        under the guidelines established under 
                        paragraph (2);
                  (D) the organization provides access to 
                appropriate providers, including credentialed 
                specialists, for medically necessary treatment 
                and services; and
                  (E) coverage is provided for emergency 
                services (as defined in paragraph (3)) without 
                regard to prior authorization or the emergency 
                care provider's contractual relationship with 
                the organization.
          (2) Guidelines respecting coordination of post-
        stabilization care.--A Medicare+Choice plan shall 
        comply with such guidelines as the Secretary may 
        prescribe relating to promoting efficient and timely 
        coordination of appropriate maintenance and post-
        stabilization care of an enrollee after the enrollee 
        has been determined to be stable under section 1867.
          (3) Definition of emergency services.--In this 
        subsection--
                  (A) In general.--The term ``emergency 
                services'' means, with respect to an individual 
                enrolled with an organization, covered 
                inpatient and outpatient services that--
                          (i) are furnished by a provider that 
                        is qualified to furnish such services 
                        under this title, and
                          (ii) are needed to evaluate or 
                        stabilize an emergency medical 
                        condition (as defined in subparagraph 
                        (B)).
                  (B) Emergency medical condition based on 
                prudent layperson.--The term ``emergency 
                medical condition'' means a medical condition 
                manifesting itself by acute symptoms of 
                sufficient severity (including severe pain) 
                such that a prudent layperson, who possesses an 
                average knowledge of health and medicine, could 
                reasonably expect the absence of immediate 
                medical attention to result in--
                          (i) placing the health of the 
                        individual (or, with respect to a 
                        pregnant woman, the health of the woman 
                        or her unborn child) in serious 
                        jeopardy,
                          (ii) serious impairment to bodily 
                        functions, or
                          (iii) serious dysfunction of any 
                        bodily organ or part.
                  (4) Assuring access to services in 
                medicare+choice private fee-for-service 
                plans.--In addition to any other requirements 
                under this part, in the case of a 
                Medicare+Choice private fee-for-service plan, 
                the organization offering the plan must 
                demonstrate to the Secretary that the 
                organization has sufficient number and range of 
                health care professionals and providers willing 
                to provide services under the terms of the 
                plan. Subject to paragraphs (5) and (6), the 
                Secretary shall find that an organization has 
                met such requirement with respect to any 
                category of health care professional or 
                provider if, with respect to that category of 
                provider--
                          (A) the plan has established payment 
                        rates for covered services furnished by 
                        that category of provider that are not 
                        less than the payment rates provided 
                        for under part A, part B, or both, for 
                        such services, or
                          (B) the plan has contracts or 
                        agreements (other than deemed contracts 
                        or agreements under subsection (j)(6)) 
                        with a sufficient number and range of 
                        providers within such category to meet 
                        the access standards in subparagraphs 
                        (A) through (E) of paragraph (1),
                or a combination of both. The previous sentence 
                shall not be construed as restricting the 
                persons from whom enrollees under such a plan 
                may obtain covered benefits, except that, if a 
                plan entirely meets such requirement with 
                respect to a category of health care 
                professional or provider on the basis of 
                subparagraph (B), it may provide for a higher 
                beneficiary copayment in the case of health 
                care professionals and providers of that 
                category who do not have contracts or 
                agreements (other than deemed contracts or 
                agreements under subsection (j)(6)) to provide 
                covered services under the terms of the plan.
          (5) Requirement of certain nonemployer medicare 
        advantage private fee-for-service plans to use 
        contracts with providers.--
                  (A) In general.--For plan year 2011 and 
                subsequent plan years, in the case of a 
                Medicare Advantage private fee-for-service plan 
                not described in paragraph (1) or (2) of 
                section 1857(i) operating in a network area (as 
                defined in subparagraph (B)), the plan shall 
                meet the access standards under paragraph (4) 
                in that area only through entering into written 
                contracts as provided for under subparagraph 
                (B) of such paragraph and not, in whole or in 
                part, through the establishment of payment 
                rates meeting the requirements under 
                subparagraph (A) of such paragraph.
                  (B) Network area defined.--For purposes of 
                subparagraph (A), the term ``network area'' 
                means, for a plan year, an area which the 
                Secretary identifies (in the Secretary's 
                announcement of the proposed payment rates for 
                the previous plan year under section 
                1853(b)(1)(B)) as having at least 2 network-
                based plans (as defined in subparagraph (C)) 
                with enrollment under this part as of the first 
                day of the year in which such announcement is 
                made.
                  (C) Network-based plan defined.--
                          (i) In general.--For purposes of 
                        subparagraph (B), the term ``network-
                        based plan'' means--
                                  (I) except as provided in 
                                clause (ii), a Medicare 
                                Advantage plan that is a 
                                coordinated care plan described 
                                in section 1851(a)(2)(A)(i);
                                  (II) a network-based MSA 
                                plan; and
                                  (III) a reasonable cost 
                                reimbursement plan under 
                                section 1876.
                          (ii) Exclusion of non-network 
                        regional ppos.--The term ``network-
                        based plan'' shall not include an MA 
                        regional plan that, with respect to the 
                        area, meets access adequacy standards 
                        under this part substantially through 
                        the authority of section 
                        422.112(a)(1)(ii) of title 42, Code of 
                        Federal Regulations, rather than 
                        through written contracts.
          (6) Requirement of all employer medicare advantage 
        private fee-for-service plans to use contracts with 
        providers.--For plan year 2011 and subsequent plan 
        years, in the case of a Medicare Advantage private fee-
        for-service plan that is described in paragraph (1) or 
        (2) of section 1857(i), the plan shall meet the access 
        standards under paragraph (4) only through entering 
        into written contracts as provided for under 
        subparagraph (B) of such paragraph and not, in whole or 
        in part, through the establishment of payment rates 
        meeting the requirements under subparagraph (A) of such 
        paragraph.
  (e) Quality Improvement Program.--
          (1) In general.--Each MA organization shall have an 
        ongoing quality improvement program for the purpose of 
        improving the quality of care provided to enrollees in 
        each MA plan offered by such organization.
          (2) Chronic care improvement programs.--As part of 
        the quality improvement program under paragraph (1), 
        each MA organization shall have a chronic care 
        improvement program. Each chronic care improvement 
        program shall have a method for monitoring and 
        identifying enrollees with multiple or sufficiently 
        severe chronic conditions that meet criteria 
        established by the organization for participation under 
        the program.
          (3) Data.--
                  (A) Collection, analysis, and reporting.--
                          (i) In general.--Except as provided 
                        in clauses (ii) and (iii) with respect 
                        to plans described in such clauses and 
                        subject to subparagraph (B), as part of 
                        the quality improvement program under 
                        paragraph (1), each MA organization 
                        shall provide for the collection, 
                        analysis, and reporting of data that 
                        permits the measurement of health 
                        outcomes and other indices of quality. 
                        With respect to MA private fee-for-
                        service plans and MSA plans, the 
                        requirements under the preceding 
                        sentence may not exceed the 
                        requirements under this subparagraph 
                        with respect to MA local plans that are 
                        preferred provider organization plans, 
                        except that, for plan year 2010, the 
                        limitation under clause (iii) shall not 
                        apply and such requirements shall apply 
                        only with respect to administrative 
                        claims data.
                          (ii) Special requirements for 
                        specialized ma plans for special needs 
                        individuals.--In addition to the data 
                        required to be collected, analyzed, and 
                        reported under clause (i) and 
                        notwithstanding the limitations under 
                        subparagraph (B), as part of the 
                        quality improvement program under 
                        paragraph (1), each MA organization 
                        offering a specialized Medicare 
                        Advantage plan for special needs 
                        individuals shall provide for the 
                        collection, analysis, and reporting of 
                        data that permits the measurement of 
                        health outcomes and other indices of 
                        quality with respect to the 
                        requirements described in paragraphs 
                        (2) through (5) of subsection (f). Such 
                        data may be based on claims data and 
                        shall be at the plan level.
                          (iii) Application to local preferred 
                        provider organizations and MA regional 
                        plans.--Clause (i) shall apply to MA 
                        organizations with respect to MA local 
                        plans that are preferred provider 
                        organization plans and to MA regional 
                        plans only insofar as services are 
                        furnished by providers or services, 
                        physicians, and other health care 
                        practitioners and suppliers that have 
                        contracts with such organization to 
                        furnish services under such plans.
                          (iv) Definition of preferred provider 
                        organization plan.--In this 
                        subparagraph, the term ``preferred 
                        provider organization plan'' means an 
                        MA plan that--
                                  (I) has a network of 
                                providers that have agreed to a 
                                contractually specified 
                                reimbursement for covered 
                                benefits with the organization 
                                offering the plan;
                                  (II) provides for 
                                reimbursement for all covered 
                                benefits regardless of whether 
                                such benefits are provided 
                                within such network of 
                                providers; and
                                  (III) is offered by an 
                                organization that is not 
                                licensed or organized under 
                                State law as a health 
                                maintenance organization.
                  (B) Limitations.--
                          (i) Types of data.--The Secretary 
                        shall not collect under subparagraph 
                        (A) data on quality, outcomes, and 
                        beneficiary satisfaction to facilitate 
                        consumer choice and program 
                        administration other than the types of 
                        data that were collected by the 
                        Secretary as of November 1, 2003.
                          (ii) Changes in types of data.--
                        Subject to subclause (iii), the 
                        Secretary may only change the types of 
                        data that are required to be submitted 
                        under subparagraph (A) after submitting 
                        to Congress a report on the reasons for 
                        such changes that was prepared in 
                        consultation with MA organizations and 
                        private accrediting bodies.
                          (iii) Construction.--Nothing in the 
                        subsection shall be construed as 
                        restricting the ability of the 
                        Secretary to carry out the duties under 
                        section 1851(d)(4)(D).
          (4) Treatment of accreditation.--
                  (A) In general.--The Secretary shall provide 
                that a Medicare+Choice organization is deemed 
                to meet all the requirements described in any 
                specific clause of subparagraph (B) if the 
                organization is accredited (and periodically 
                reaccredited) by a private accrediting 
                organization under a process that the Secretary 
                has determined assures that the accrediting 
                organization applies and enforces standards 
                that meet or exceed the standards established 
                under section 1856 to carry out the 
                requirements in such clause.
                  (B) Requirements described.--The provisions 
                described in this subparagraph are the 
                following:
                          (i) Paragraphs (1) through (3) of 
                        this subsection (relating to quality 
                        improvement programs).
                          (ii) Subsection (b) (relating to 
                        antidiscrimination).
                          (iii) Subsection (d) (relating to 
                        access to services).
                          (iv) Subsection (h) (relating to 
                        confidentiality and accuracy of 
                        enrollee records).
                          (v) Subsection (i) (relating to 
                        information on advance directives).
                          (vi) Subsection (j) (relating to 
                        provider participation rules).
                          (vii) The requirements described in 
                        section 1860D-4(j), to the extent such 
                        requirements apply under section 1860D-
                        21(c).
                  (C) Timely action on applications.--The 
                Secretary shall determine, within 210 days 
                after the date the Secretary receives an 
                application by a private accrediting 
                organization and using the criteria specified 
                in section 1865(a)(2), whether the process of 
                the private accrediting organization meets the 
                requirements with respect to any specific 
                clause in subparagraph (B) with respect to 
                which the application is made. The Secretary 
                may not deny such an application on the basis 
                that it seeks to meet the requirements with 
                respect to only one, or more than one, such 
                specific clause.
                  (D) Construction.--Nothing in this paragraph 
                shall be construed as limiting the authority of 
                the Secretary under section 1857, including the 
                authority to terminate contracts with 
                Medicare+Choice organizations under subsection 
                (c)(2) of such section.
  (f) Grievance Mechanism.--Each Medicare+Choice organization 
must provide meaningful procedures for hearing and resolving 
grievances between the organization (including any entity or 
individual through which the organization provides health care 
services) and enrollees with Medicare+Choice plans of the 
organization under this part.
  (g) Coverage Determinations, Reconsiderations, and Appeals.--
          (1) Determinations by organization.--
                  (A) In general.--A Medicare+Choice 
                organization shall have a procedure for making 
                determinations regarding whether an individual 
                enrolled with the plan of the organization 
                under this part is entitled to receive a health 
                service under this section and the amount (if 
                any) that the individual is required to pay 
                with respect to such service. Subject to 
                paragraph (3), such procedures shall provide 
                for such determination to be made on a timely 
                basis.
                  (B) Explanation of determination.--Such a 
                determination that denies coverage, in whole or 
                in part, shall be in writing and shall include 
                a statement in understandable language of the 
                reasons for the denial and a description of the 
                reconsideration and appeals processes.
          (2) Reconsiderations.--
                  (A) In general.--The organization shall 
                provide for reconsideration of a determination 
                described in paragraph (1)(B) upon request by 
                the enrollee involved. The reconsideration 
                shall be within a time period specified by the 
                Secretary, but shall be made, subject to 
                paragraph (3), not later than 60 days after the 
                date of the receipt of the request for 
                reconsideration.
                  (B) Physician decision on certain 
                reconsiderations.--A reconsideration relating 
                to a determination to deny coverage based on a 
                lack of medical necessity shall be made only by 
                a physician with appropriate expertise in the 
                field of medicine which necessitates treatment 
                who is other than a physician involved in the 
                initial determination.
          (3) Expedited determinations and reconsiderations.--
                  (A) Receipt of requests.--
                          (i) Enrollee requests.--An enrollee 
                        in a Medicare+Choice plan may request, 
                        either in writing or orally, an 
                        expedited determination under paragraph 
                        (1) or an expedited reconsideration 
                        under paragraph (2) by the 
                        Medicare+Choice organization.
                          (ii) Physician requests.--A 
                        physician, regardless whether the 
                        physician is affiliated with the 
                        organization or not, may request, 
                        either in writing or orally, such an 
                        expedited determination or 
                        reconsideration.
                  (B) Organization procedures.--
                          (i) In general.--The Medicare+Choice 
                        organization shall maintain procedures 
                        for expediting organization 
                        determinations and reconsiderations 
                        when, upon request of an enrollee, the 
                        organization determines that the 
                        application of the normal time frame 
                        for making a determination (or a 
                        reconsideration involving a 
                        determination) could seriously 
                        jeopardize the life or health of the 
                        enrollee or the enrollee's ability to 
                        regain maximum function.
                          (ii) Expedition required for 
                        physician requests.--In the case of a 
                        request for an expedited determination 
                        or reconsideration made under 
                        subparagraph (A)(ii), the organization 
                        shall expedite the determination or 
                        reconsideration if the request 
                        indicates that the application of the 
                        normal time frame for making a 
                        determination (or a reconsideration 
                        involving a determination) could 
                        seriously jeopardize the life or health 
                        of the enrollee or the enrollee's 
                        ability to regain maximum function.
                          (iii) Timely response.--In cases 
                        described in clauses (i) and (ii), the 
                        organization shall notify the enrollee 
                        (and the physician involved, as 
                        appropriate) of the determination or 
                        reconsideration under time limitations 
                        established by the Secretary, but not 
                        later than 72 hours of the time of 
                        receipt of the request for the 
                        determination or reconsideration (or 
                        receipt of the information necessary to 
                        make the determination or 
                        reconsideration), or such longer period 
                        as the Secretary may permit in 
                        specified cases.
          (4) Independent review of certain coverage denials.--
        The Secretary shall contract with an independent, 
        outside entity to review and resolve in a timely manner 
        reconsiderations that affirm denial of coverage, in 
        whole or in part. The provisions of section 1869(c)(5) 
        shall apply to independent outside entities under 
        contract with the Secretary under this paragraph.
          (5) Appeals.--An enrollee with a Medicare+Choice plan 
        of a Medicare+Choice organization under this part who 
        is dissatisfied by reason of the enrollee's failure to 
        receive any health service to which the enrollee 
        believes the enrollee is entitled and at no greater 
        charge than the enrollee believes the enrollee is 
        required to pay is entitled, if the amount in 
        controversy is $100 or more, to a hearing before the 
        Secretary to the same extent as is provided in section 
        205(b), and in any such hearing the Secretary shall 
        make the organization a party. If the amount in 
        controversy is $1,000 or more, the individual or 
        organization shall, upon notifying the other party, be 
        entitled to judicial review of the Secretary's final 
        decision as provided in section 205(g), and both the 
        individual and the organization shall be entitled to be 
        parties to that judicial review. In applying 
        subsections (b) and (g) of section 205 as provided in 
        this paragraph, and in applying section 205(l) thereto, 
        any reference therein to the Commissioner of Social 
        Security or the Social Security Administration shall be 
        considered a reference to the Secretary or the 
        Department of Health and Human Services, respectively. 
        The provisions of section 1869(b)(1)(E)(iii) shall 
        apply with respect to dollar amounts specified in the 
        first 2 sentences of this paragraph in the same manner 
        as they apply to the dollar amounts specified in 
        section 1869(b)(1)(E)(i).
  (h) Confidentiality and Accuracy of Enrollee Records.--
Insofar as a Medicare+Choice organization maintains medical 
records or other health information regarding enrollees under 
this part, the Medicare+Choice organization shall establish 
procedures--
          (1) to safeguard the privacy of any individually 
        identifiable enrollee information;
          (2) to maintain such records and information in a 
        manner that is accurate and timely; and
          (3) to assure timely access of enrollees to such 
        records and information.
  (i) Information on Advance Directives.--Each Medicare+Choice 
organization shall meet the requirement of section 1866(f) 
(relating to maintaining written policies and procedures 
respecting advance directives).
  (j) Rules Regarding Provider Participation.--
          (1) Procedures.--Insofar as a Medicare+Choice 
        organization offers benefits under a Medicare+Choice 
        plan through agreements with physicians, the 
        organization shall establish reasonable procedures 
        relating to the participation (under an agreement 
        between a physician and the organization) of physicians 
        under such a plan. Such procedures shall include--
                  (A) providing notice of the rules regarding 
                participation,
                  (B) providing written notice of participation 
                decisions that are adverse to physicians, and
                  (C) providing a process within the 
                organization for appealing such adverse 
                decisions, including the presentation of 
                information and views of the physician 
                regarding such decision.
          (2) Consultation in medical policies.--A 
        Medicare+Choice organization shall consult with 
        physicians who have entered into participation 
        agreements with the organization regarding the 
        organization's medical policy, quality, and medical 
        management procedures.
          (3) Prohibiting interference with provider advice to 
        enrollees.--
                  (A) In general.--Subject to subparagraphs (B) 
                and (C), a Medicare+Choice organization (in 
                relation to an individual enrolled under a 
                Medicare+Choice plan offered by the 
                organization under this part) shall not 
                prohibit or otherwise restrict a covered health 
                care professional (as defined in subparagraph 
                (D)) from advising such an individual who is a 
                patient of the professional about the health 
                status of the individual or medical care or 
                treatment for the individual's condition or 
                disease, regardless of whether benefits for 
                such care or treatment are provided under the 
                plan, if the professional is acting within the 
                lawful scope of practice.
                  (B) Conscience protection.--Subparagraph (A) 
                shall not be construed as requiring a 
                Medicare+Choice plan to provide, reimburse for, 
                or provide coverage of a counseling or referral 
                service if the Medicare+Choice organization 
                offering the plan--
                          (i) objects to the provision of such 
                        service on moral or religious grounds; 
                        and
                          (ii) in the manner and through the 
                        written instrumentalities such 
                        Medicare+Choice organization deems 
                        appropriate, makes available 
                        information on its policies regarding 
                        such service to prospective enrollees 
                        before or during enrollment and to 
                        enrollees within 90 days after the date 
                        that the organization or plan adopts a 
                        change in policy regarding such a 
                        counseling or referral service.
                  (C) Construction.--Nothing in subparagraph 
                (B) shall be construed to affect disclosure 
                requirements under State law or under the 
                Employee Retirement Income Security Act of 
                1974.
                  (D) Health care professional defined.--For 
                purposes of this paragraph, the term ``health 
                care professional'' means a physician (as 
                defined in section 1861(r)) or other health 
                care professional if coverage for the 
                professional's services is provided under the 
                Medicare+Choice plan for the services of the 
                professional. Such term includes a podiatrist, 
                optometrist, chiropractor, psychologist, 
                dentist, physician assistant, physical or 
                occupational therapist and therapy assistant, 
                speech-language pathologist, audiologist, 
                registered or licensed practical nurse 
                (including nurse practitioner, clinical nurse 
                specialist, certified registered nurse 
                anesthetist, and certified nurse-midwife), 
                licensed certified social worker, registered 
                respiratory therapist, and certified 
                respiratory therapy technician.
          (4) Limitations on physician incentive plans.--
                  (A) In general.--No Medicare+Choice 
                organization may operate any physician 
                incentive plan (as defined in subparagraph (B)) 
                unless the organization provides assurances 
                satisfactory to the Secretary that the 
                following requirements are met:
                          (i) No specific payment is made 
                        directly or indirectly under the plan 
                        to a physician or physician group as an 
                        inducement to reduce or limit medically 
                        necessary services provided with 
                        respect to a specific individual 
                        enrolled with the organization.
                          (ii) If the plan places a physician 
                        or physician group at substantial 
                        financial risk (as determined by the 
                        Secretary) for services not provided by 
                        the physician or physician group, the 
                        organization provides stop-loss 
                        protection for the physician or group 
                        that is adequate and appropriate, based 
                        on standards developed by the Secretary 
                        that take into account the number of 
                        physicians placed at such substantial 
                        financial risk in the group or under 
                        the plan and the number of individuals 
                        enrolled with the organization who 
                        receive services from the physician or 
                        group.
                  (B) Physician incentive plan defined.--In 
                this paragraph, the term ``physician incentive 
                plan'' means any compensation arrangement 
                between a Medicare+Choice organization and a 
                physician or physician group that may directly 
                or indirectly have the effect of reducing or 
                limiting services provided with respect to 
                individuals enrolled with the organization 
                under this part.
          (5) Limitation on provider indemnification.--A 
        Medicare+Choice organization may not provide (directly 
        or indirectly) for a health care professional, provider 
        of services, or other entity providing health care 
        services (or group of such professionals, providers, or 
        entities) to indemnify the organization against any 
        liability resulting from a civil action brought for any 
        damage caused to an enrollee with a Medicare+Choice 
        plan of the organization under this part by the 
        organization's denial of medically necessary care.
          (6) Special rules for medicare+choice private fee-
        for-service plans.--For purposes of applying this part 
        (including subsection (k)(1)) and section 
        1866(a)(1)(O), a hospital (or other provider of 
        services), a physician or other health care 
        professional, or other entity furnishing health care 
        services is treated as having an agreement or contract 
        in effect with a Medicare+Choice organization (with 
        respect to an individual enrolled in a Medicare+Choice 
        private fee-for-service plan it offers), if--
                  (A) the provider, professional, or other 
                entity furnishes services that are covered 
                under the plan to such an enrollee; and
                  (B) before providing such services, the 
                provider, professional, or other entity --
                          (i) has been informed of the 
                        individual's enrollment under the plan, 
                        and
                          (ii) either--
                                  (I) has been informed of the 
                                terms and conditions of payment 
                                for such services under the 
                                plan, or
                                  (II) is given a reasonable 
                                opportunity to obtain 
                                information concerning such 
                                terms and conditions,
                        in a manner reasonably designed to 
                        effect informed agreement by a 
                        provider.
        The previous sentence shall only apply in the absence 
        of an explicit agreement between such a provider, 
        professional, or other entity and the Medicare+Choice 
        organization.
          (7) Promotion of E-Prescribing by MA Plans.--
                  (A) In general.--An MA-PD plan may provide 
                for a separate payment or otherwise provide for 
                a differential payment for a participating 
                physician that prescribes covered part D drugs 
                in accordance with an electronic prescription 
                drug program that meets standards established 
                under section 1860D-4(e).
                  (B) Considerations.--Such payment may take 
                into consideration the costs of the physician 
                in implementing such a program and may also be 
                increased for those participating physicians 
                who significantly increase--
                          (i) formulary compliance;
                          (ii) lower cost, therapeutically 
                        equivalent alternatives;
                          (iii) reductions in adverse drug 
                        interactions; and
                          (iv) efficiencies in filing 
                        prescriptions through reduced 
                        administrative costs.
                  (C) Structure.--Additional or increased 
                payments under this subsection may be 
                structured in the same manner as medication 
                therapy management fees are structured under 
                section 1860D-4(c)(2)(E).
  (k) Treatment of Services Furnished by Certain Providers.--
          (1) In general.--Except as provided in paragraph (2), 
        a physician or other entity (other than a provider of 
        services) that does not have a contract establishing 
        payment amounts for services furnished to an individual 
        enrolled under this part with a Medicare+Choice 
        organization described in section 1851(a)(2)(A) or with 
        an organization offering an MSA plan shall accept as 
        payment in full for covered services under this title 
        that are furnished to such an individual the amounts 
        that the physician or other entity could collect if the 
        individual were not so enrolled. Any penalty or other 
        provision of law that applies to such a payment with 
        respect to an individual entitled to benefits under 
        this title (but not enrolled with a Medicare+Choice 
        organization under this part) also applies with respect 
        to an individual so enrolled.
          (2) Application to medicare+choice private fee-for-
        service plans.--
                  (A) Balance billing limits under 
                medicare+choice private fee-for-service plans 
                in case of contract providers.--
                          (i) In general.--In the case of an 
                        individual enrolled in a 
                        Medicare+Choice private fee-for-service 
                        plan under this part, a physician, 
                        provider of services, or other entity 
                        that has a contract (including through 
                        the operation of subsection (j)(6)) 
                        establishing a payment rate for 
                        services furnished to the enrollee 
                        shall accept as payment in full for 
                        covered services under this title that 
                        are furnished to such an individual an 
                        amount not to exceed (including any 
                        deductibles, coinsurance, copayments, 
                        or balance billing otherwise permitted 
                        under the plan) an amount equal to 115 
                        percent of such payment rate.
                          (ii) Procedures to enforce limits.--
                        The Medicare+Choice organization that 
                        offers such a plan shall establish 
                        procedures, similar to the procedures 
                        described in section 1848(g)(1)(A), in 
                        order to carry out the previous 
                        sentence.
                          (iii) Assuring enforcement.--If the 
                        Medicare+Choice organization fails to 
                        establish and enforce procedures 
                        required under clause (ii), the 
                        organization is subject to intermediate 
                        sanctions under section 1857(g).
                  (B) Enrollee liability for noncontract 
                providers.--For provision--
                          (i) establishing minimum payment rate 
                        in the case of noncontract providers 
                        under a Medicare+Choice private fee-
                        for-service plan, see section 
                        1852(a)(2); or
                          (ii) limiting enrollee liability in 
                        the case of covered services furnished 
                        by such providers, see paragraph (1) 
                        and section 1866(a)(1)(O).
                  (C) Information on beneficiary liability.--
                          (i) In general.--Each Medicare+Choice 
                        organization that offers a 
                        Medicare+Choice private fee-for-service 
                        plan shall provide that enrollees under 
                        the plan who are furnished services for 
                        which payment is sought under the plan 
                        are provided an appropriate explanation 
                        of benefits (consistent with that 
                        provided under parts A and B and, if 
                        applicable, under medicare supplemental 
                        policies) that includes a clear 
                        statement of the amount of the 
                        enrollee's liability (including any 
                        liability for balance billing 
                        consistent with this subsection) with 
                        respect to payments for such services.
                          (ii) Advance notice before receipt of 
                        inpatient hospital services and certain 
                        other services.--In addition, such 
                        organization shall, in its terms and 
                        conditions of payments to hospitals for 
                        inpatient hospital services and for 
                        other services identified by the 
                        Secretary for which the amount of the 
                        balance billing under subparagraph (A) 
                        could be substantial, require the 
                        hospital to provide to the enrollee, 
                        before furnishing such services and if 
                        the hospital imposes balance billing 
                        under subparagraph (A)--
                                  (I) notice of the fact that 
                                balance billing is permitted 
                                under such subparagraph for 
                                such services, and
                                  (II) a good faith estimate of 
                                the likely amount of such 
                                balance billing (if any), with 
                                respect to such services, based 
                                upon the presenting condition 
                                of the enrollee.
  (l) Return to Home Skilled Nursing Facilities for Covered 
Post-Hospital Extended Care Services.--
          (1) Ensuring return to home snf.--
                  (A) In general.--In providing coverage of 
                post-hospital extended care services, a 
                Medicare+Choice plan shall provide for such 
                coverage through a home skilled nursing 
                facility if the following conditions are met:
                          (i) Enrollee election.--The enrollee 
                        elects to receive such coverage through 
                        such facility.
                          (ii) SNF agreement.--The facility has 
                        a contract with the Medicare+Choice 
                        organization for the provision of such 
                        services, or the facility agrees to 
                        accept substantially similar payment 
                        under the same terms and conditions 
                        that apply to similarly situated 
                        skilled nursing facilities that are 
                        under contract with the Medicare+Choice 
                        organization for the provision of such 
                        services and through which the enrollee 
                        would otherwise receive such services.
                  (B) Manner of payment to home snf.--The 
                organization shall provide payment to the home 
                skilled nursing facility consistent with the 
                contract or the agreement described in 
                subparagraph (A)(ii), as the case may be.
          (2) No less favorable coverage.--The coverage 
        provided under paragraph (1) (including scope of 
        services, cost-sharing, and other criteria of coverage) 
        shall be no less favorable to the enrollee than the 
        coverage that would be provided to the enrollee with 
        respect to a skilled nursing facility the post-hospital 
        extended care services of which are otherwise covered 
        under the Medicare+Choice plan.
          (3) Rule of construction.--Nothing in this subsection 
        shall be construed to do the following:
                  (A) To require coverage through a skilled 
                nursing facility that is not otherwise 
                qualified to provide benefits under part A for 
                medicare beneficiaries not enrolled in a 
                Medicare+Choice plan.
                  (B) To prevent a skilled nursing facility 
                from refusing to accept, or imposing conditions 
                upon the acceptance of, an enrollee for the 
                receipt of post-hospital extended care 
                services.
          (4) Definitions.--In this subsection:
                  (A) Home skilled nursing facility.--The term 
                ``home skilled nursing facility'' means, with 
                respect to an enrollee who is entitled to 
                receive post-hospital extended care services 
                under a Medicare+Choice plan, any of the 
                following skilled nursing facilities:
                          (i) SNF residence at time of 
                        admission.--The skilled nursing 
                        facility in which the enrollee resided 
                        at the time of admission to the 
                        hospital preceding the receipt of such 
                        post-hospital extended care services.
                          (ii) SNF in continuing care 
                        retirement community.--A skilled 
                        nursing facility that is providing such 
                        services through a continuing care 
                        retirement community (as defined in 
                        subparagraph (B)) which provided 
                        residence to the enrollee at the time 
                        of such admission.
                          (iii) SNF residence of spouse at time 
                        of discharge.--The skilled nursing 
                        facility in which the spouse of the 
                        enrollee is residing at the time of 
                        discharge from such hospital.
                  (B) Continuing care retirement community.--
                The term ``continuing care retirement 
                community'' means, with respect to an enrollee 
                in a Medicare+Choice plan, an arrangement under 
                which housing and health-related services are 
                provided (or arranged) through an organization 
                for the enrollee under an agreement that is 
                effective for the life of the enrollee or for a 
                specified period.

               payments to medicare+choice organizations

  Sec. 1853. (a) Payments to Organizations.--
          (1) Monthly payments.--
                  (A) In general.--Under a contract under 
                section 1857 and subject to subsections (e), 
                (g), (i), and (l) and section 1859(e)(4), the 
                Secretary shall make monthly payments under 
                this section in advance to each Medicare+Choice 
                organization, with respect to coverage of an 
                individual under this part in a Medicare+Choice 
                payment area for a month, in an amount 
                determined as follows:
                          (i) Payment before 2006.--For years 
                        before 2006, the payment amount shall 
                        be equal to \1/12\ of the annual MA 
                        capitation rate (as calculated under 
                        subsection (c)(1)) with respect to that 
                        individual for that area, adjusted 
                        under subparagraph (C) and reduced by 
                        the amount of any reduction elected 
                        under section 1854(f)(1)(E).
                          (ii) Payment for original fee-for-
                        service benefits beginning with 2006.--
                        For years beginning with 2006, the 
                        amount specified in subparagraph (B).
                  (B) Payment amount for original fee-for-
                service benefits beginning with 2006.--
                          (i) Payment of bid for plans with 
                        bids below benchmark.--In the case of a 
                        plan for which there are average per 
                        capita monthly savings described in 
                        section 1854(b)(3)(C) or 1854(b)(4)(C), 
                        as the case may be, the amount 
                        specified in this subparagraph is equal 
                        to the unadjusted MA statutory non-drug 
                        monthly bid amount, adjusted under 
                        subparagraph (C) and (if applicable) 
                        under subparagraphs (F) and (G), plus 
                        the amount (if any) of any rebate under 
                        subparagraph (E).
                          (ii) Payment of benchmark for plans 
                        with bids at or above benchmark.--In 
                        the case of a plan for which there are 
                        no average per capita monthly savings 
                        described in section 1854(b)(3)(C) or 
                        1854(b)(4)(C), as the case may be, the 
                        amount specified in this subparagraph 
                        is equal to the MA area-specific non-
                        drug monthly benchmark amount, adjusted 
                        under subparagraph (C) and (if 
                        applicable) under subparagraphs (F) and 
                        (G).
                          (iii) Payment of benchmark for msa 
                        plans.--Notwithstanding clauses (i) and 
                        (ii), in the case of an MSA plan, the 
                        amount specified in this subparagraph 
                        is equal to the MA area-specific non-
                        drug monthly benchmark amount, adjusted 
                        under subparagraph (C).
                          (iv) Authority to apply frailty 
                        adjustment under pace payment rules for 
                        certain specialized ma plans for 
                        special needs individuals.--
                                  (I) In general.--
                                Notwithstanding the preceding 
                                provisions of this paragraph, 
                                for plan year 2011 and 
                                subsequent plan years, in the 
                                case of a plan described in 
                                subclause (II), the Secretary 
                                may apply the payment rules 
                                under section 1894(d) (other 
                                than paragraph (3) of such 
                                section) rather than the 
                                payment rules that would 
                                otherwise apply under this 
                                part, but only to the extent 
                                necessary to reflect the costs 
                                of treating high concentrations 
                                of frail individuals.
                                  (II) Plan described.--A plan 
                                described in this subclause is 
                                a specialized MA plan for 
                                special needs individuals 
                                described in section 
                                1859(b)(6)(B)(ii) that is fully 
                                integrated with capitated 
                                contracts with States for 
                                Medicaid benefits, including 
                                long-term care, and that have 
                                similar average levels of 
                                frailty (as determined by the 
                                Secretary) as the PACE program.
                  (C) Demographic adjustment, including 
                adjustment for health status.--
                          (i) In general.--The Secretary shall 
                        adjust the payment amount under 
                        subparagraph (A)(i) and the amount 
                        specified under subparagraph (B)(i), 
                        (B)(ii), and (B)(iii) for such risk 
                        factors as age, disability status, 
                        gender, institutional status, and such 
                        other factors as the Secretary 
                        determines to be appropriate, including 
                        adjustment for health status under 
                        paragraph (3), so as to ensure 
                        actuarial equivalence. The Secretary 
                        may add to, modify, or substitute for 
                        such adjustment factors if such changes 
                        will improve the determination of 
                        actuarial equivalence.
                          (ii) Application of coding 
                        adjustment.--For 2006 and each 
                        subsequent year:
                                  (I) In applying the 
                                adjustment under clause (i) for 
                                health status to payment 
                                amounts, the Secretary shall 
                                ensure that such adjustment 
                                reflects changes in treatment 
                                and coding practices in the 
                                fee-for-service sector and 
                                reflects differences in coding 
                                patterns between Medicare 
                                Advantage plans and providers 
                                under part A and B to the 
                                extent that the Secretary has 
                                identified such differences.
                                  (II) In order to ensure 
                                payment accuracy, the Secretary 
                                shall annually conduct an 
                                analysis of the differences 
                                described in subclause (I). The 
                                Secretary shall complete such 
                                analysis by a date necessary to 
                                ensure that the results of such 
                                analysis are incorporated on a 
                                timely basis into the risk 
                                scores for 2008 and subsequent 
                                years. In conducting such 
                                analysis, the Secretary shall 
                                use data submitted with respect 
                                to 2004 and subsequent years, 
                                as available and updated as 
                                appropriate.
                                  (III) In calculating each 
                                year's adjustment, the 
                                adjustment factor shall be for 
                                2014, not less than the 
                                adjustment factor applied for 
                                2010, plus 1.5 percentage 
                                points; for each of years 2015 
                                through 2018, not less than the 
                                adjustment factor applied for 
                                the previous year, plus 0.25 
                                percentage point; and for 2019 
                                and each subsequent year, not 
                                less than 5.9 percent.
                                  (IV) Such adjustment shall be 
                                applied to risk scores until 
                                the Secretary implements risk 
                                adjustment using Medicare 
                                Advantage diagnostic, cost, and 
                                use data.
                          (iii) Improvements to risk adjustment 
                        for special needs individuals with 
                        chronic health conditions.--
                                  (I) In general.--For 2011 and 
                                subsequent years, for purposes 
                                of the adjustment under clause 
                                (i) with respect to individuals 
                                described in subclause (II), 
                                the Secretary shall use a risk 
                                score that reflects the known 
                                underlying risk profile and 
                                chronic health status of 
                                similar individuals. Such risk 
                                score shall be used instead of 
                                the default risk score for new 
                                enrollees in Medicare Advantage 
                                plans that are not specialized 
                                MA plans for special needs 
                                individuals (as defined in 
                                section 1859(b)(6)).
                                  (II) Individuals described.--
                                An individual described in this 
                                subclause is a special needs 
                                individual described in 
                                subsection (b)(6)(B)(iii) who 
                                enrolls in a specialized MA 
                                plan for special needs 
                                individuals on or after January 
                                1, 2011.
                                  (III) Evaluation.--For 2011 
                                and periodically thereafter, 
                                the Secretary shall evaluate 
                                and revise the risk adjustment 
                                system under this subparagraph 
                                in order to, as accurately as 
                                possible, account for higher 
                                medical and care coordination 
                                costs associated with frailty, 
                                individuals with multiple, 
                                comorbid chronic conditions, 
                                and individuals with a 
                                diagnosis of mental illness, 
                                and also to account for costs 
                                that may be associated with 
                                higher concentrations of 
                                beneficiaries with those 
                                conditions.
                                  (IV) Publication of 
                                evaluation and revisions.--The 
                                Secretary shall publish, as 
                                part of an announcement under 
                                subsection (b), a description 
                                of any evaluation conducted 
                                under subclause (III) during 
                                the preceding year and any 
                                revisions made under such 
                                subclause as a result of such 
                                evaluation.
                  (D) Separate payment for federal drug 
                subsidies.--In the case of an enrollee in an 
                MA-PD plan, the MA organization offering such 
                plan also receives--
                          (i) subsidies under section 1860D-15 
                        (other than under subsection (g)); and
                          (ii) reimbursement for premium and 
                        cost-sharing reductions for low-income 
                        individuals under section 1860D-
                        14(c)(1)(C).
                  (E) Payment of rebate for plans with bids 
                below benchmark.--In the case of a plan for 
                which there are average per capita monthly 
                savings described in section 1854(b)(3)(C) or 
                1854(b)(4)(C), as the case may be, the amount 
                specified in this subparagraph is the amount of 
                the monthly rebate computed under section 
                1854(b)(1)(C)(i) for that plan and year (as 
                reduced by the amount of any credit provided 
                under section 1854(b)(1)(C)(iv)).
                  (F) Adjustment for intra-area variations.--
                          (i) Intra-regional variations.--In 
                        the case of payment with respect to an 
                        MA regional plan for an MA region, the 
                        Secretary shall also adjust the amounts 
                        specified under subparagraphs (B)(i) 
                        and (B)(ii) in a manner to take into 
                        account variations in MA local payment 
                        rates under this part among the 
                        different MA local areas included in 
                        such region.
                          (ii) Intra-service area variations.--
                        In the case of payment with respect to 
                        an MA local plan for a service area 
                        that covers more than one MA local 
                        area, the Secretary shall also adjust 
                        the amounts specified under 
                        subparagraphs (B)(i) and (B)(ii) in a 
                        manner to take into account variations 
                        in MA local payment rates under this 
                        part among the different MA local areas 
                        included in such service area.
                  (G) Adjustment relating to risk adjustment.--
                The Secretary shall adjust payments with 
                respect to MA plans as necessary to ensure 
                that--
                          (i) the sum of--
                                  (I) the monthly payment made 
                                under subparagraph (A)(ii); and
                                  (II) the MA monthly basic 
                                beneficiary premium under 
                                section 1854(b)(2)(A); equals
                          (ii) the unadjusted MA statutory non-
                        drug monthly bid amount, adjusted in 
                        the manner described in subparagraph 
                        (C) and, for an MA regional plan, 
                        subparagraph (F).
                  (H) Special rule for end-stage renal 
                disease.--The Secretary shall establish 
                separate rates of payment to a Medicare+Choice 
                organization with respect to classes of 
                individuals determined to have end-stage renal 
                disease and enrolled in a Medicare+Choice plan 
                of the organization. Such rates of payment 
                shall be actuarially equivalent to rates that 
                would have been paid with respect to other 
                enrollees in the MA payment area (or such other 
                area as specified by the Secretary) under the 
                provisions of this section as in effect before 
                the date of the enactment of the Medicare 
                Prescription Drug, Improvement, and 
                Modernization Act of 2003. In accordance with 
                regulations, the Secretary shall provide for 
                the application of the seventh sentence of 
                section 1881(b)(7) to payments under this 
                section covering the provision of renal 
                dialysis treatment in the same manner as such 
                sentence applies to composite rate payments 
                described in such sentence. In establishing 
                such rates, the Secretary shall provide for 
                appropriate adjustments to increase each rate 
                to reflect the demonstration rate (including 
                the risk adjustment methodology associated with 
                such rate) of the social health maintenance 
                organization end-stage renal disease capitation 
                demonstrations (established by section 2355 of 
                the Deficit Reduction Act of 1984, as amended 
                by section 13567(b) of the Omnibus Budget 
                Reconciliation Act of 1993), and shall compute 
                such rates by taking into account such factors 
                as renal treatment modality, age, and the 
                underlying cause of the end-stage renal 
                disease. The Secretary may apply the 
                competitive bidding methodology provided for in 
                this section, with appropriate adjustments to 
                account for the risk adjustment methodology 
                applied to end stage renal disease payments.
          (2) Adjustment to reflect number of enrollees.--
                  (A) In general.--The amount of payment under 
                this subsection may be retroactively adjusted 
                to take into account any difference between the 
                actual number of individuals enrolled with an 
                organization under this part and the number of 
                such individuals estimated to be so enrolled in 
                determining the amount of the advance payment.
                  (B) Special rule for certain enrollees.--
                          (i) In general.--Subject to clause 
                        (ii), the Secretary may make 
                        retroactive adjustments under 
                        subparagraph (A) to take into account 
                        individuals enrolled during the period 
                        beginning on the date on which the 
                        individual enrolls with a 
                        Medicare+Choice organization under a 
                        plan operated, sponsored, or 
                        contributed to by the individual's 
                        employer or former employer (or the 
                        employer or former employer of the 
                        individual's spouse) and ending on the 
                        date on which the individual is 
                        enrolled in the organization under this 
                        part, except that for purposes of 
                        making such retroactive adjustments 
                        under this subparagraph, such period 
                        may not exceed 90 days.
                          (ii) Exception.--No adjustment may be 
                        made under clause (i) with respect to 
                        any individual who does not certify 
                        that the organization provided the 
                        individual with the disclosure 
                        statement described in section 1852(c) 
                        at the time the individual enrolled 
                        with the organization.
          (3) Establishment of risk adjustment factors.--
                  (A) Report.--The Secretary shall develop, and 
                submit to Congress by not later than March 1, 
                1999, a report on the method of risk adjustment 
                of payment rates under this section, to be 
                implemented under subparagraph (C), that 
                accounts for variations in per capita costs 
                based on health status. Such report shall 
                include an evaluation of such method by an 
                outside, independent actuary of the actuarial 
                soundness of the proposal.
                  (B) Data collection.--In order to carry out 
                this paragraph, the Secretary shall require 
                Medicare+Choice organizations (and eligible 
                organizations with risk-sharing contracts under 
                section 1876) to submit data regarding 
                inpatient hospital services for periods 
                beginning on or after July 1, 1997, and data 
                regarding other services and other information 
                as the Secretary deems necessary for periods 
                beginning on or after July 1, 1998. The 
                Secretary may not require an organization to 
                submit such data before January 1, 1998.
                  (C) Initial implementation.--
                          (i) In general.--The Secretary shall 
                        first provide for implementation of a 
                        risk adjustment methodology that 
                        accounts for variations in per capita 
                        costs based on health status and other 
                        demographic factors for payments by no 
                        later than January 1, 2000.
                          (ii) Phase-in.--Except as provided in 
                        clause (iv), such risk adjustment 
                        methodology shall be implemented in a 
                        phased-in manner so that the 
                        methodology insofar as it makes 
                        adjustments to capitation rates for 
                        health status applies to--
                                  (I) 10 percent of \1/12\ of 
                                the annual Medicare+Choice 
                                capitation rate in 2000 and 
                                each succeeding year through 
                                2003;
                                  (II) 30 percent of such 
                                capitation rate in 2004;
                                  (III) 50 percent of such 
                                capitation rate in 2005;
                                  (IV) 75 percent of such 
                                capitation rate in 2006; and
                                  (V) 100 percent of such 
                                capitation rate in 2007 and 
                                succeeding years.
                          (iii) Data for risk adjustment 
                        methodology.--Such risk adjustment 
                        methodology for 2004 and each 
                        succeeding year, shall be based on data 
                        from inpatient hospital and ambulatory 
                        settings.
                          (iv) Full implementation of risk 
                        adjustment for congestive heart failure 
                        enrollees for 2001.--
                                  (I) Exemption from phase-
                                in.--Subject to subclause (II), 
                                the Secretary shall fully 
                                implement the risk adjustment 
                                methodology described in clause 
                                (i) with respect to each 
                                individual who has had a 
                                qualifying congestive heart 
                                failure inpatient diagnosis (as 
                                determined by the Secretary 
                                under such risk adjustment 
                                methodology) during the period 
                                beginning on July 1, 1999, and 
                                ending on June 30, 2000, and 
                                who is enrolled in a 
                                coordinated care plan that is 
                                the only coordinated care plan 
                                offered on January 1, 2001, in 
                                the service area of the 
                                individual.
                                  (II) Period of application.--
                                Subclause (I) shall only apply 
                                during the 1-year period 
                                beginning on January 1, 2001.
                  (D) Uniform application to all types of 
                plans.--Subject to section 1859(e)(4), the 
                methodology shall be applied uniformly without 
                regard to the type of plan.
  (4) Payment rule for federally qualified health center 
services.--If an individual who is enrolled with an MA plan 
under this part receives a service from a federally qualified 
health center that has a written agreement with the MA 
organization that offers such plan for providing such a service 
(including any agreement required under section 1857(e)(3))--
          (A) the Secretary shall pay the amount determined 
        under section 1833(a)(3)(B) directly to the federally 
        qualified health center not less frequently than 
        quarterly; and
          (B) the Secretary shall not reduce the amount of the 
        monthly payments under this subsection as a result of 
        the application of subparagraph (A).
  (b) Annual Announcement of Payment Rates.--
          (1) Annual announcements.--
                  (A) For 2005.--The Secretary shall determine, 
                and shall announce (in a manner intended to 
                provide notice to interested parties), not 
                later than the second Monday in May of 2004, 
                with respect to each MA payment area, the 
                following:
                          (i) MA capitation rates.--The annual 
                        MA capitation rate for each MA payment 
                        area for 2005.
                          (ii) Adjustment factors.--The risk 
                        and other factors to be used in 
                        adjusting such rates under subsection 
                        (a)(1)(C) for payments for months in 
                        2005.
                  (B) For 2006 and subsequent years.--For a 
                year after 2005--
                          (i) Initial announcement.--The 
                        Secretary shall determine, and shall 
                        announce (in a manner intended to 
                        provide notice to interested parties), 
                        not later than the first Monday in 
                        April before the calendar year 
                        concerned, with respect to each MA 
                        payment area, the following:
                                  (I) MA capitation rates; ma 
                                local area benchmark.--The 
                                annual MA capitation rate for 
                                each MA payment area for the 
                                year.
                                  (II) Adjustment factors.--The 
                                risk and other factors to be 
                                used in adjusting such rates 
                                under subsection (a)(1)(C) for 
                                payments for months in such 
                                year.
                          (ii) Regional benchmark 
                        announcement.--The Secretary shall 
                        determine, and shall announce (in a 
                        manner intended to provide notice to 
                        interested parties), on a timely basis 
                        before the calendar year concerned, 
                        with respect to each MA region and each 
                        MA regional plan for which a bid was 
                        submitted under section 1854, the MA 
                        region-specific non-drug monthly 
                        benchmark amount for that region for 
                        the year involved.
                          (iii) Benchmark announcement for cca 
                        local areas.--The Secretary shall 
                        determine, and shall announce (in a 
                        manner intended to provide notice to 
                        interested parties), on a timely basis 
                        before the calendar year concerned, 
                        with respect to each CCA area (as 
                        defined in section 1860C-1(b)(1)(A)), 
                        the CCA non-drug monthly benchmark 
                        amount under section 1860C-1(e)(1) for 
                        that area for the year involved.
          (2) Advance notice of methodological changes.--At 
        least 45 days (or, in 2017 and each subsequent year, at 
        least 60 days) before making the announcement under 
        paragraph (1) for a year, the Secretary shall provide 
        for notice to Medicare+Choice organizations of proposed 
        changes to be made in the methodology from the 
        methodology and assumptions used in the previous 
        announcement and shall provide such organizations an 
        opportunity (in 2017 and each subsequent year, of no 
        less than 30 days) to comment on such proposed changes.
          (3) Explanation of assumptions.--In each announcement 
        made under paragraph (1), the Secretary shall include 
        an explanation of the assumptions and changes in 
        methodology used in such announcement.
          (4) Continued computation and publication of county-
        specific per capita fee-for-service expenditure 
        information.--The Secretary, through the Chief Actuary 
        of the Centers for Medicare & Medicaid Services, shall 
        provide for the computation and publication, on an 
        annual basis beginning with 2001 at the time of 
        publication of the annual Medicare+Choice capitation 
        rates under paragraph (1), of the following information 
        for the original medicare fee-for-service program under 
        parts A and B (exclusive of individuals eligible for 
        coverage under section 226A) for each Medicare+Choice 
        payment area for the second calendar year ending before 
        the date of publication:
                  (A) Total expenditures per capita per month, 
                computed separately for part A and for part B.
                  (B) The expenditures described in 
                subparagraph (A) reduced by the best estimate 
                of the expenditures (such as graduate medical 
                education and disproportionate share hospital 
                payments) not related to the payment of claims.
                  (C) The average risk factor for the covered 
                population based on diagnoses reported for 
                medicare inpatient services, using the same 
                methodology as is expected to be applied in 
                making payments under subsection (a).
                  (D) Such average risk factor based on 
                diagnoses for inpatient and other sites of 
                service, using the same methodology as is 
                expected to be applied in making payments under 
                subsection (a).
  (c) Calculation of Annual Medicare+Choice Capitation Rates.--
          (1) In general.--For purposes of this part, subject 
        to paragraphs (6)(C) and (7), each annual 
        Medicare+Choice capitation rate, for a Medicare+Choice 
        payment area that is an MA local area for a contract 
        year consisting of a calendar year, is equal to the 
        largest of the amounts specified in the following 
        subparagraph (A), (B), (C), or (D):
                  (A) Blended capitation rate.--For a year 
                before 2005, the sum of--
                          (i) the area-specific percentage (as 
                        specified under paragraph (2) for the 
                        year) of the annual area-specific 
                        Medicare+Choice capitation rate for the 
                        Medicare+Choice payment area, as 
                        determined under paragraph (3) for the 
                        year, and
                          (ii) the national percentage (as 
                        specified under paragraph (2) for the 
                        year) of the input-price-adjusted 
                        annual national Medicare+Choice 
                        capitation rate, as determined under 
                        paragraph (4) for the year,
                multiplied (for a year other than 2004) by the 
                budget neutrality adjustment factor determined 
                under paragraph (5).
                  (B) Minimum amount.--12 multiplied by the 
                following amount:
                          (i) For 1998, $367 (but not to 
                        exceed, in the case of an area outside 
                        the 50 States and the District of 
                        Columbia, 150 percent of the annual per 
                        capita rate of payment for 1997 
                        determined under section 1876(a)(1)(C) 
                        for the area).
                          (ii) For 1999 and 2000, the minimum 
                        amount determined under clause (i) or 
                        this clause, respectively, for the 
                        preceding year, increased by the 
                        national per capita Medicare+Choice 
                        growth percentage described in 
                        paragraph (6)(A) applicable to 1999 or 
                        2000, respectively.
                          (iii)(I) Subject to subclause (II), 
                        for 2001, for any area in a 
                        Metropolitan Statistical Area with a 
                        population of more than 250,000, $525, 
                        and for any other area $475.
                          (II) In the case of an area outside 
                        the 50 States and the District of 
                        Columbia, the amount specified in this 
                        clause shall not exceed 120 percent of 
                        the amount determined under clause (ii) 
                        for such area for 2000.
                          (iv) For 2002, 2003, and 2004, the 
                        minimum amount specified in this clause 
                        (or clause (iii)) for the preceding 
                        year increased by the national per 
                        capita Medicare+Choice growth 
                        percentage, described in paragraph 
                        (6)(A) for that succeeding year.
                  (C) Minimum percentage increase.--
                          (i) For 1998, 102 percent of the 
                        annual per capita rate of payment for 
                        1997 determined under section 
                        1876(a)(1)(C) for the Medicare+Choice 
                        payment area.
                          (ii) For 1999 and 2000, 102 percent 
                        of the annual Medicare+Choice 
                        capitation rate under this paragraph 
                        for the area for the previous year.
                          (iii) For 2001, 103 percent of the 
                        annual Medicare+Choice capitation rate 
                        under this paragraph for the area for 
                        2000.
                          (iv) For 2002 and 2003, 102 percent 
                        of the annual Medicare+Choice 
                        capitation rate under this paragraph 
                        for the area for the previous year.
                          (v) For 2004 and each succeeding 
                        year, the greater of--
                                  (I) 102 percent of the annual 
                                MA capitation rate under this 
                                paragraph for the area for the 
                                previous year; or
                                  (II) the annual MA capitation 
                                rate under this paragraph for 
                                the area for the previous year 
                                increased by the national per 
                                capita MA growth percentage, 
                                described in paragraph (6) for 
                                that succeeding year, but not 
                                taking into account any 
                                adjustment under paragraph 
                                (6)(C) for a year before 2004.
                  (D)  100 percent of fee-for-service costs.--
                          (i) In general.--For each year 
                        specified in clause (ii), the adjusted 
                        average per capita cost for the year 
                        involved, determined under section 
                        1876(a)(4) and adjusted as appropriate 
                        for the purpose of risk adjustment, for 
                        the MA payment area for individuals who 
                        are not enrolled in an MA plan under 
                        this part for the year, but adjusted to 
                        exclude costs attributable to payments 
                        under sections, 1848(o), and 1886(n) 
                        and 1886(h).
                          (ii) Periodic rebasing.--The 
                        provisions of clause (i) shall apply 
                        for 2004 and for subsequent years as 
                        the Secretary shall specify (but not 
                        less than once every 3 years).
                          (iii) Inclusion of costs of va and 
                        dod military facility services to 
                        medicare-eligible beneficiaries.--In 
                        determining the adjusted average per 
                        capita cost under clause (i) for a 
                        year, such cost shall be adjusted to 
                        include the Secretary's estimate, on a 
                        per capita basis, of the amount of 
                        additional payments that would have 
                        been made in the area involved under 
                        this title if individuals entitled to 
                        benefits under this title had not 
                        received services from facilities of 
                        the Department of Defense or the 
                        Department of Veterans Affairs.
          (2) Area-specific and national percentages.--For 
        purposes of paragraph (1)(A)--
                  (A) for 1998, the ``area-specific 
                percentage'' is 90 percent and the ``national 
                percentage'' is 10 percent,
                  (B) for 1999, the ``area-specific 
                percentage'' is 82 percent and the ``national 
                percentage'' is 18 percent,
                  (C) for 2000, the ``area-specific 
                percentage'' is 74 percent and the ``national 
                percentage'' is 26 percent,
                  (D) for 2001, the ``area-specific 
                percentage'' is 66 percent and the ``national 
                percentage'' is 34 percent,
                  (E) for 2002, the ``area-specific 
                percentage'' is 58 percent and the ``national 
                percentage'' is 42 percent, and
                  (F) for a year after 2002, the ``area-
                specific percentage'' is 50 percent and the 
                ``national percentage'' is 50 percent.
          (3) Annual area-specific medicare+choice capitation 
        rate.--
                  (A) In general.--For purposes of paragraph 
                (1)(A), subject to subparagraphs (B) and (E), 
                the annual area-specific Medicare+Choice 
                capitation rate for a Medicare+Choice payment 
                area--
                          (i) for 1998 is, subject to 
                        subparagraph (D), the annual per capita 
                        rate of payment for 1997 determined 
                        under section 1876(a)(1)(C) for the 
                        area, increased by the national per 
                        capita Medicare+Choice growth 
                        percentage for 1998 (described in 
                        paragraph (6)(A)); or
                          (ii) for a subsequent year is the 
                        annual area-specific Medicare+Choice 
                        capitation rate for the previous year 
                        determined under this paragraph for the 
                        area, increased by the national per 
                        capita Medicare+Choice growth 
                        percentage for such subsequent year.
                  (B) Removal of medical education from 
                calculation of adjusted average per capita 
                cost.--
                          (i) In general.--In determining the 
                        area-specific Medicare+Choice 
                        capitation rate under subparagraph (A) 
                        for a year (beginning with 1998), the 
                        annual per capita rate of payment for 
                        1997 determined under section 
                        1876(a)(1)(C) shall be adjusted to 
                        exclude from the rate the applicable 
                        percent (specified in clause (ii)) of 
                        the payment adjustments described in 
                        subparagraph (C).
                          (ii) Applicable percent.--For 
                        purposes of clause (i), the applicable 
                        percent for--
                                  (I) 1998 is 20 percent,
                                  (II) 1999 is 40 percent,
                                  (III) 2000 is 60 percent,
                                  (IV) 2001 is 80 percent, and
                                  (V) a succeeding year is 100 
                                percent.
                  (C) Payment adjustment.--
                          (i) In general.--Subject to clause 
                        (ii), the payment adjustments described 
                        in this subparagraph are payment 
                        adjustments which the Secretary 
                        estimates were payable during 1997--
                                  (I) for the indirect costs of 
                                medical education under section 
                                1886(d)(5)(B), and
                                  (II) for direct graduate 
                                medical education costs under 
                                section 1886(h).
                          (ii) Treatment of payments covered 
                        under state hospital reimbursement 
                        system.--To the extent that the 
                        Secretary estimates that an annual per 
                        capita rate of payment for 1997 
                        described in clause (i) reflects 
                        payments to hospitals reimbursed under 
                        section 1814(b)(3), the Secretary shall 
                        estimate a payment adjustment that is 
                        comparable to the payment adjustment 
                        that would have been made under clause 
                        (i) if the hospitals had not been 
                        reimbursed under such section.
                  (D) Treatment of areas with highly variable 
                payment rates.--In the case of a 
                Medicare+Choice payment area for which the 
                annual per capita rate of payment determined 
                under section 1876(a)(1)(C) for 1997 varies by 
                more than 20 percent from such rate for 1996, 
                for purposes of this subsection the Secretary 
                may substitute for such rate for 1997 a rate 
                that is more representative of the costs of the 
                enrollees in the area.
                  (E) Inclusion of costs of dod and va military 
                facility services to medicare-eligible 
                beneficiaries.--In determining the area-
                specific MA capitation rate under subparagraph 
                (A) for a year (beginning with 2004), the 
                annual per capita rate of payment for 1997 
                determined under section 1876(a)(1)(C) shall be 
                adjusted to include in the rate the Secretary's 
                estimate, on a per capita basis, of the amount 
                of additional payments that would have been 
                made in the area involved under this title if 
                individuals entitled to benefits under this 
                title had not received services from facilities 
                of the Department of Defense or the Department 
                of Veterans Affairs.
          (4) Input-price-adjusted annual national 
        medicare+choice capitation rate.--
                  (A) In general.--For purposes of paragraph 
                (1)(A), the input-price-adjusted annual 
                national Medicare+Choice capitation rate for a 
                Medicare+Choice payment area for a year is 
                equal to the sum, for all the types of medicare 
                services (as classified by the Secretary), of 
                the product (for each such type of service) 
                of--
                          (i) the national standardized annual 
                        Medicare+Choice capitation rate 
                        (determined under subparagraph (B)) for 
                        the year,
                          (ii) the proportion of such rate for 
                        the year which is attributable to such 
                        type of services, and
                          (iii) an index that reflects (for 
                        that year and that type of services) 
                        the relative input price of such 
                        services in the area compared to the 
                        national average input price of such 
                        services.
                In applying clause (iii), the Secretary may, 
                subject to subparagraph (C), apply those 
                indices under this title that are used in 
                applying (or updating) national payment rates 
                for specific areas and localities.
                  (B) National standardized annual 
                medicare+choice capitation rate.--In 
                subparagraph (A)(i), the ``national 
                standardized annual Medicare+Choice capitation 
                rate'' for a year is equal to--
                          (i) the sum (for all Medicare+Choice 
                        payment areas) of the product of--
                                  (I) the annual area-specific 
                                Medicare+Choice capitation rate 
                                for that year for the area 
                                under paragraph (3), and
                                  (II) the average number of 
                                medicare beneficiaries residing 
                                in that area in the year, 
                                multiplied by the average of 
                                the risk factor weights used to 
                                adjust payments under 
                                subsection (a)(1)(A) for such 
                                beneficiaries in such area; 
                                divided by
                          (ii) the sum of the products 
                        described in clause (i)(II) for all 
                        areas for that year.
                  (C) Special rules for 1998.--In applying this 
                paragraph for 1998--
                          (i) medicare services shall be 
                        divided into 2 types of services: part 
                        A services and part B services;
                          (ii) the proportions described in 
                        subparagraph (A)(ii)--
                                  (I) for part A services shall 
                                be the ratio (expressed as a 
                                percentage) of the national 
                                average annual per capita rate 
                                of payment for part A for 1997 
                                to the total national average 
                                annual per capita rate of 
                                payment for parts A and B for 
                                1997, and
                                  (II) for part B services 
                                shall be 100 percent minus the 
                                ratio described in subclause 
                                (I);
                          (iii) for part A services, 70 percent 
                        of payments attributable to such 
                        services shall be adjusted by the index 
                        used under section 1886(d)(3)(E) to 
                        adjust payment rates for relative 
                        hospital wage levels for hospitals 
                        located in the payment area involved;
                          (iv) for part B services--
                                  (I) 66 percent of payments 
                                attributable to such services 
                                shall be adjusted by the index 
                                of the geographic area factors 
                                under section 1848(e) used to 
                                adjust payment rates for 
                                physicians' services furnished 
                                in the payment area, and
                                  (II) of the remaining 34 
                                percent of the amount of such 
                                payments, 40 percent shall be 
                                adjusted by the index described 
                                in clause (iii); and
                          (v) the index values shall be 
                        computed based only on the beneficiary 
                        population who are 65 years of age or 
                        older and who are not determined to 
                        have end stage renal disease.
                The Secretary may continue to apply the rules 
                described in this subparagraph (or similar 
                rules) for 1999.
          (5) Payment adjustment budget neutrality factor.--For 
        purposes of paragraph (1)(A), for each year (other than 
        2004), the Secretary shall determine a budget 
        neutrality adjustment factor so that the aggregate of 
        the payments under this part (other than those 
        attributable to subsections (a)(3)(C)(iv), (a)(4), and 
        (i) shall equal the aggregate payments that would have 
        been made under this part if payment were based 
        entirely on area-specific capitation rates.
          (6) National per capita medicare+choice growth 
        percentage defined.--
                  (A) In general.--In this part, the ``national 
                per capita Medicare+Choice growth percentage'' 
                for a year is the percentage determined by the 
                Secretary, by March 1st before the beginning of 
                the year involved, to reflect the Secretary's 
                estimate of the projected per capita rate of 
                growth in expenditures under this title for an 
                individual entitled to benefits under part A 
                and enrolled under part B, excluding 
                expenditures attributable to subsections (a)(7) 
                and (o) of section 1848 and subsections 
                (b)(3)(B)(ix) and (n) of section 1886, reduced 
                by the number of percentage points specified in 
                subparagraph (B) for the year. Separate 
                determinations may be made for aged enrollees, 
                disabled enrollees, and enrollees with end-
                stage renal disease.
                  (B) Adjustment.--The number of percentage 
                points specified in this subparagraph is--
                          (i) for 1998, 0.8 percentage points,
                          (ii) for 1999, 0.5 percentage points,
                          (iii) for 2000, 0.5 percentage 
                        points,
                          (iv) for 2001, 0.5 percentage points,
                          (v) for 2002, 0.3 percentage points, 
                        and
                          (vi) for a year after 2002, 0 
                        percentage points.
                  (C) Adjustment for over or under projection 
                of national per capita medicare+choice growth 
                percentage.--Beginning with rates calculated 
                for 1999, before computing rates for a year as 
                described in paragraph (1), the Secretary shall 
                adjust all area-specific and national 
                Medicare+Choice capitation rates (and beginning 
                in 2000, the minimum amount) for the previous 
                year for the differences between the 
                projections of the national per capita 
                Medicare+Choice growth percentage for that year 
                and previous years and the current estimate of 
                such percentage for such years, except that for 
                purposes of paragraph (1)(C)(v)(II), no such 
                adjustment shall be made for a year before 
                2004.
          (7) Adjustment for national coverage determinations 
        and legislative changes in benefits.--If the Secretary 
        makes a determination with respect to coverage under 
        this title or there is a change in benefits required to 
        be provided under this part that the Secretary projects 
        will result in a significant increase in the costs to 
        Medicare+Choice of providing benefits under contracts 
        under this part (for periods after any period described 
        in section 1852(a)(5)), the Secretary shall adjust 
        appropriately the payments to such organizations under 
        this part. Such projection and adjustment shall be 
        based on an analysis by the Chief Actuary of the 
        Centers for Medicare & Medicaid Services of the 
        actuarial costs associated with the new benefits.
  (d) MA Payment Area; MA Local Area; MA Region Defined.--
          (1) MA payment area.--In this part, except as 
        provided in this subsection, the term ``MA payment 
        area'' means--
                  (A) with respect to an MA local plan, an MA 
                local area (as defined in paragraph (2)); and
                  (B) with respect to an MA regional plan, an 
                MA region (as established under section 
                1858(a)(2)).
          (2) MA local area.--The term ``MA local area'' means 
        a county or equivalent area specified by the Secretary.
          (3) Rule for esrd beneficiaries.--In the case of 
        individuals who are determined to have end stage renal 
        disease, the Medicare+Choice payment area shall be a 
        State or such other payment area as the Secretary 
        specifies.
          (4) Geographic adjustment.--
                  (A) In general.--Upon written request of the 
                chief executive officer of a State for a 
                contract year (beginning after 1998) made by 
                not later than February 1 of the previous year, 
                the Secretary shall make a geographic 
                adjustment to a Medicare+Choice payment area in 
                the State otherwise determined under paragraph 
                (1) for MA local plans--
                          (i) to a single statewide 
                        Medicare+Choice payment area,
                          (ii) to the metropolitan based system 
                        described in subparagraph (C), or
                          (iii) to consolidating into a single 
                        Medicare+Choice payment area 
                        noncontiguous counties (or equivalent 
                        areas described inparagraph (1)(A)) 
                        within a State.
                Such adjustment shall be effective for payments 
                for months beginning with January of the year 
                following the year in which the request is 
                received.
                  (B) Budget neutrality adjustment.--In the 
                case of a State requesting an adjustment under 
                this paragraph, the Secretary shall initially 
                (and annually thereafter) adjust the payment 
                rates otherwise established under this section 
                with respect to MA local plans for 
                Medicare+Choice payment areas in the State in a 
                manner so that the aggregate of the payments 
                under this section for such plans in the State 
                shall not exceed the aggregate payments that 
                would have been made under this section for 
                such plans for Medicare+Choice payment areas in 
                the State in the absence of the adjustment 
                under this paragraph.
                  (C) Metropolitan based system.--The 
                metropolitan based system described in this 
                subparagraph is one in which--
                          (i) all the portions of each 
                        metropolitan statistical area in the 
                        State or in the case of a consolidated 
                        metropolitan statistical area, all of 
                        the portions of each primary 
                        metropolitan statistical area within 
                        the consolidated area within the State, 
                        are treated as a single Medicare+Choice 
                        payment area, and
                          (ii) all areas in the State that do 
                        not fall within a metropolitan 
                        statistical area are treated as a 
                        single Medicare+Choice payment area.
                  (D) Areas.--In subparagraph (C), the terms 
                ``metropolitan statistical area'', 
                ``consolidated metropolitan statistical area'', 
                and ``primary metropolitan statistical area'' 
                mean any area designated as such by the 
                Secretary of Commerce.
  (e) Special Rules for Individuals Electing MSA Plans.--
          (1) In general.--If the amount of the Medicare+Choice 
        monthly MSA premium (as defined in section 
        1854(b)(2)(C)) for an MSA plan for a year is less than 
        \1/12\ of the annual Medicare+Choice capitation rate 
        applied under this section for the area and year 
        involved, the Secretary shall deposit an amount equal 
        to 100 percent of such difference in a Medicare+Choice 
        MSA established (and, if applicable, designated) by the 
        individual under paragraph (2).
          (2) Establishment and designation of medicare+choice 
        medical savings account as requirement for payment of 
        contribution.--In the case of an individual who has 
        elected coverage under an MSA plan, no payment shall be 
        made under paragraph (1) on behalf of an individual for 
        a month unless the individual--
                  (A) has established before the beginning of 
                the month (or by such other deadline as the 
                Secretary may specify) a Medicare+Choice MSA 
                (as defined in section 138(b)(2) of the 
                Internal Revenue Code of 1986), and
                  (B) if the individual has established more 
                than one such Medicare+Choice MSA, has 
                designated one of such accounts as the 
                individual's Medicare+Choice MSA for purposes 
                of this part.
        Under rules under this section, such an individual may 
        change the designation of such account under 
        subparagraph (B) for purposes of this part.
          (3) Lump-sum deposit of medical savings account 
        contribution.--In the case of an individual electing an 
        MSA plan effective beginning with a month in a year, 
        the amount of the contribution to the Medicare+Choice 
        MSA on behalf of the individual for that month and all 
        successive months in the year shall be deposited during 
        that first month. In the case of a termination of such 
        an election as of a month before the end of a year, the 
        Secretary shall provide for a procedure for the 
        recovery of deposits attributable to the remaining 
        months in the year.
  (f) Payments From Trust Funds.--The payment to a 
Medicare+Choice organization under this section for individuals 
enrolled under this part with the organization and for payments 
under subsection (l) and subsection (m) and payments to a 
Medicare+Choice MSA under subsection (e)(1) shall be made from 
the Federal Hospital Insurance Trust Fund and the Federal 
Supplementary Medical Insurance Trust Fund in such proportion 
as the Secretary determines reflects the relative weight that 
benefits under part A and under part B represents of the 
actuarial value of the total benefits under this title. 
Payments to MA organizations for statutory drug benefits 
provided under this title are made from the Medicare 
Prescription Drug Account in the Federal Supplementary Medical 
Insurance Trust Fund. Monthly payments otherwise payable under 
this section for October 2000 shall be paid on the first 
business day of such month. Monthly payments otherwise payable 
under this section for October 2001 shall be paid on the last 
business day of September 2001. Monthly payments otherwise 
payable under this section for October 2006 shall be paid on 
the first business day of October 2006.
  (g) Special Rule for Certain Inpatient Hospital Stays.--In 
the case of an individual who is receiving inpatient hospital 
services from a subsection (d) hospital (as defined in section 
1886(d)(1)(B)), a rehabilitation hospital described in section 
1886(d)(1)(B)(ii) or a distinct part rehabilitation unit 
described in the matter following clause (v) of section 
1886(d)(1)(B), or a long-term care hospital (described in 
section 1886(d)(1)(B)(iv)) as of the effective date of the 
individual's--
          (1) election under this part of a Medicare+Choice 
        plan offered by a Medicare+Choice organization--
                  (A) payment for such services until the date 
                of the individual's discharge shall be made 
                under this title through the Medicare+Choice 
                plan or the original medicare fee-for-service 
                program option described in section 
                1851(a)(1)(A) (as the case may be) elected 
                before the election with such organization,
                  (B) the elected organization shall not be 
                financially responsible for payment for such 
                services until the date after the date of the 
                individual's discharge, and
                  (C) the organization shall nonetheless be 
                paid the full amount otherwise payable to the 
                organization under this part; or
          (2) termination of election with respect to a 
        Medicare+Choice organization under this part--
                  (A) the organization shall be financially 
                responsible for payment for such services after 
                such date and until the date of the 
                individual's discharge,
                  (B) payment for such services during the stay 
                shall not be made under section 1886(d) or 
                other payment provision under this title for 
                inpatient services for the type of facility, 
                hospital, or unit involved, described in the 
                matter preceding paragraph (1), as the case may 
                be, or by any succeeding Medicare+Choice 
                organization, and
                  (C) the terminated organization shall not 
                receive any payment with respect to the 
                individual under this part during the period 
                the individual is not enrolled.
  (h) Special Rule for Hospice Care.--
          (1) Information.--A contract under this part shall 
        require the Medicare+Choice organization to inform each 
        individual enrolled under this part with a 
        Medicare+Choice plan offered by the organization about 
        the availability of hospice care if--
                  (A) a hospice program participating under 
                this title is located within the organization's 
                service area; or
                  (B) it is common practice to refer patients 
                to hospice programs outside such service area.
          (2) Payment.--If an individual who is enrolled with a 
        Medicare+Choice organization under this part makes an 
        election under section 1812(d)(1) to receive hospice 
        care from a particular hospice program--
                  (A) payment for the hospice care furnished to 
                the individual shall be made to the hospice 
                program elected by the individual by the 
                Secretary;
                  (B) payment for other services for which the 
                individual is eligible notwithstanding the 
                individual's election of hospice care under 
                section 1812(d)(1), including services not 
                related to the individual's terminal illness, 
                shall be made by the Secretary to the 
                Medicare+Choice organization or the provider or 
                supplier of the service instead of payments 
                calculated under subsection (a); and
                  (C) the Secretary shall continue to make 
                monthly payments to the Medicare+Choice 
                organization in an amount equal to the value of 
                the additional benefits required under section 
                1854(f)(1)(A).
  (i) New Entry Bonus.--
          (1) In general.--Subject to paragraphs (2) and (3), 
        in the case of Medicare+Choice payment area in which a 
        Medicare+Choice plan has not been offered since 1997 
        (or in which all organizations that offered a plan 
        since such date have filed notice with the Secretary, 
        as of October 13, 1999, that they will not be offering 
        such a plan as of January 1, 2000, or filed notice with 
        the Secretary as of October 3, 2000, that they will not 
        be offering such a plan as of January 1, 2001), the 
        amount of the monthly payment otherwise made under this 
        section shall be increased--
                  (A) only for the first 12 months in which any 
                Medicare+Choice plan is offered in the area, by 
                5 percent of the total monthly payment 
                otherwise computed for such payment area; and
                  (B) only for the subsequent 12 months, by 3 
                percent of the total monthly payment otherwise 
                computed for such payment area.
          (2) Period of application.--Paragraph (1) shall only 
        apply to payment for Medicare+Choice plans which are 
        first offered in a Medicare+Choice payment area during 
        the 2-year period beginning on January 1, 2000.
          (3) Limitation to organization offering first plan in 
        an area.--Paragraph (1) shall only apply to payment to 
        the first Medicare+Choice organization that offers a 
        Medicare+Choice plan in each Medicare+Choice payment 
        area, except that if more than one such organization 
        first offers such a plan in an area on the same date, 
        paragraph (1) shall apply to payment for such 
        organizations.
          (4) Construction.--Nothing in paragraph (1) shall be 
        construed as affecting the calculation of the annual 
        Medicare+Choice capitation rate under subsection (c) 
        for any payment area or as applying to payment for any 
        period not described in such paragraph and paragraph 
        (2).
          (5) Offered defined.--In this subsection, the term 
        ``offered'' means, with respect to a Medicare+Choice 
        plan as of a date, that a Medicare+Choice eligible 
        individual may enroll with the plan on that date, 
        regardless of when the enrollment takes effect or when 
        the individual obtains benefits under the plan.
  (j) Computation of Benchmark Amounts.--For purposes of this 
part, subject to subsection (o), the term ``MA area-specific 
non-drug monthly benchmark amount'' means for a month in a 
year--
          (1) with respect to--
                  (A) a service area that is entirely within an 
                MA local area, subject to section 1860C-
                1(d)(2)(A), an amount equal to \1/12\ of the 
                annual MA capitation rate under section 
                1853(c)(1) for the area for the year (or, for 
                2007, 2008, 2009, and 2010, \1/12\ of the 
                applicable amount determined under subsection 
                (k)(1) for the area for the year; for 2011, \1/
                12\ of the applicable amount determined under 
                subsection (k)(1) for the area for 2010; and, 
                beginning with 2012, \1/12\ of the blended 
                benchmark amount determined under subsection 
                (n)(1) for the area for the year), adjusted as 
                appropriate (for years before 2007) for the 
                purpose of risk adjustment; or
                  (B) a service area that includes more than 
                one MA local area, an amount equal to the 
                average of the amounts described in 
                subparagraph (A) for each such local MA area, 
                weighted by the projected number of enrollees 
                in the plan residing in the respective local MA 
                areas (as used by the plan for purposes of the 
                bid and disclosed to the Secretary under 
                section 1854(a)(6)(A)(iii)), adjusted as 
                appropriate (for years before 2007) for the 
                purpose of risk adjustment; or
          (2) with respect to an MA region for a month in a 
        year, the MA region-specific non-drug monthly benchmark 
        amount, as defined in section 1858(f) for the region 
        for the year.
  (k) Determination of Applicable Amount for Purposes of 
Calculating the Benchmark Amounts.--
          (1) Applicable amount defined.--For purposes of 
        subsection (j), subject to [paragraphs (2) and (4)] 
        paragraphs (2), (4), and (5), the term ``applicable 
        amount'' means for an area--
                  (A) for 2007--
                          (i) if such year is not specified 
                        under subsection (c)(1)(D)(ii), an 
                        amount equal to the amount specified in 
                        subsection (c)(1)(C) for the area for 
                        2006--
                                  (I) first adjusted by the 
                                rescaling factor for 2006 for 
                                the area (as made available by 
                                the Secretary in the 
                                announcement of the rates on 
                                April 4, 2005, under subsection 
                                (b)(1), but excluding any 
                                national adjustment factors for 
                                coding intensity and risk 
                                adjustment budget neutrality 
                                that were included in such 
                                factor); and
                                  (II) then increased by the 
                                national per capita MA growth 
                                percentage, described in 
                                subsection (c)(6) for 2007, but 
                                not taking into account any 
                                adjustment under subparagraph 
                                (C) of such subsection for a 
                                year before 2004;
                          (ii) if such year is specified under 
                        subsection (c)(1)(D)(ii), an amount 
                        equal to the greater of--
                                  (I) the amount determined 
                                under clause (i) for the area 
                                for the year; or
                                  (II) the amount specified in 
                                subsection (c)(1)(D) for the 
                                area for the year; and
                  (B) for a subsequent year--
                          (i) if such year is not specified 
                        under subsection (c)(1)(D)(ii), an 
                        amount equal to the amount determined 
                        under this paragraph for the area for 
                        the previous year (determined without 
                        regard to [paragraphs (2) and (4)] 
                        paragraphs (2), (4), and (5)), 
                        increased by the national per capita MA 
                        growth percentage, described in 
                        subsection (c)(6) for that succeeding 
                        year, but not taking into account any 
                        adjustment under subparagraph (C) of 
                        such subsection for a year before 2004; 
                        and
                          (ii) if such year is specified under 
                        subsection (c)(1)(D)(ii), an amount 
                        equal to the greater of--
                                  (I) the amount determined 
                                under clause (i) for the area 
                                for the year; or
                                  (II) the amount specified in 
                                subsection (c)(1)(D) for the 
                                area for the year.
          (2) Phase-out of budget neutrality factor.--
                  (A) In general.--Except as provided in 
                subparagraph (D), in the case of 2007 through 
                2010, the applicable amount determined under 
                paragraph (1) shall be multiplied by a factor 
                equal to 1 plus the product of--
                          (i) the percent determined under 
                        subparagraph (B) for the year; and
                          (ii) the applicable phase-out factor 
                        for the year under subparagraph (C).
                  (B) Percent determined.--
                          (i) In general.--For purposes of 
                        subparagraph (A)(i), subject to clause 
                        (iv), the percent determined under this 
                        subparagraph for a year is a percent 
                        equal to a fraction the numerator of 
                        which is described in clause (ii) and 
                        the denominator of which is described 
                        in clause (iii).
                          (ii) Numerator based on difference 
                        between demographic rate and risk 
                        rate.--
                                  (I) In general.--The 
                                numerator described in this 
                                clause is an amount equal to 
                                the amount by which the 
                                demographic rate described in 
                                subclause (II) exceeds the risk 
                                rate described in subclause 
                                (III).
                                  (II) Demographic rate.--The 
                                demographic rate described in 
                                this subclause is the 
                                Secretary's estimate of the 
                                total payments that would have 
                                been made under this part in 
                                the year if all the monthly 
                                payment amounts for all MA 
                                plans were equal to \1/12\ of 
                                the annual MA capitation rate 
                                under subsection (c)(1) for the 
                                area and year, adjusted 
                                pursuant to subsection 
                                (a)(1)(C).
                                  (III) Risk rate.--The risk 
                                rate described in this 
                                subclause is the Secretary's 
                                estimate of the total payments 
                                that would have been made under 
                                this part in the year if all 
                                the monthly payment amounts for 
                                all MA plans were equal to the 
                                amount described in subsection 
                                (j)(1)(A) (determined as if 
                                this paragraph had not applied) 
                                under subsection (j) for the 
                                area and year, adjusted 
                                pursuant to subsection 
                                (a)(1)(C).
                          (iii) Denominator based on risk 
                        rate.--The denominator described in 
                        this clause is equal to the total 
                        amount estimated for the year under 
                        clause (ii)(III).
                          (iv) Requirements.--In estimating the 
                        amounts under the previous clauses, the 
                        Secretary shall--
                                  (I) use a complete set of the 
                                most recent and representative 
                                Medicare Advantage risk scores 
                                under subsection (a)(3) that 
                                are available from the risk 
                                adjustment model announced for 
                                the year;
                                  (II) adjust the risk scores 
                                to reflect changes in treatment 
                                and coding practices in the 
                                fee-for-service sector;
                                  (III) adjust the risk scores 
                                for differences in coding 
                                patterns between Medicare 
                                Advantage plans and providers 
                                under the original Medicare 
                                fee-for-service program under 
                                parts A and B to the extent 
                                that the Secretary has 
                                identified such differences, as 
                                required in subsection 
                                (a)(1)(C);
                                  (IV) as necessary, adjust the 
                                risk scores for late data 
                                submitted by Medicare Advantage 
                                organizations;
                                  (V) as necessary, adjust the 
                                risk scores for lagged cohorts; 
                                and
                                  (VI) as necessary, adjust the 
                                risk scores for changes in 
                                enrollment in Medicare 
                                Advantage plans during the 
                                year.
                          (v) Authority.--In computing such 
                        amounts the Secretary may take into 
                        account the estimated health risk of 
                        enrollees in preferred provider 
                        organization plans (including MA 
                        regional plans) for the year.
                  (C) Applicable phase-out factor.--For 
                purposes of subparagraph (A)(ii), the term 
                ``applicable phase-out factor'' means--
                          (i) for 2007, 0.55;
                          (ii) for 2008, 0.40;
                          (iii) for 2009, 0.25; and
                          (iv) for 2010, 0.05.
                  (D) Termination of application.--Subparagraph 
                (A) shall not apply in a year if the amount 
                estimated under subparagraph (B)(ii)(III) for 
                the year is equal to or greater than the amount 
                estimated under subparagraph (B)(ii)(II) for 
                the year.
          (3) No revision in percent.--
                  (A) In general.--The Secretary may not make 
                any adjustment to the percent determined under 
                paragraph (2)(B) for any year.
                  (B) Rule of construction.--Nothing in this 
                subsection shall be construed to limit the 
                authority of the Secretary to make adjustments 
                to the applicable amounts determined under 
                paragraph (1) as appropriate for purposes of 
                updating data or for purposes of adopting an 
                improved risk adjustment methodology.
          (4) Phase-out of the indirect costs of medical 
        education from capitation rates.--
                  (A) In general.--After determining the 
                applicable amount for an area for a year under 
                paragraph (1) (beginning with 2010), the 
                Secretary shall adjust such applicable amount 
                to exclude from such applicable amount the 
                phase-in percentage (as defined in subparagraph 
                (B)(i)) for the year of the Secretary's 
                estimate of the standardized costs for payments 
                under section 1886(d)(5)(B) in the area for the 
                year. Any adjustment under the preceding 
                sentence shall be made prior to the application 
                of paragraph (2).
                  (B) Percentages defined.--For purposes of 
                this paragraph:
                          (i) Phase-in percentage.--The term 
                        ``phase-in percentage'' means, for an 
                        area for a year, the ratio (expressed 
                        as a percentage, but in no case greater 
                        than 100 percent) of--
                                  (I) the maximum cumulative 
                                adjustment percentage for the 
                                year (as defined in clause 
                                (ii)); to
                                  (II) the standardized IME 
                                cost percentage (as defined in 
                                clause (iii)) for the area and 
                                year.
                          (ii) Maximum cumulative adjustment 
                        percentage.--The term ``maximum 
                        cumulative adjustment percentage'' 
                        means, for--
                                  (I) 2010, 0.60 percent; and
                                  (II) a subsequent year, the 
                                maximum cumulative adjustment 
                                percentage for the previous 
                                year increased by 0.60 
                                percentage points.
                          (iii) Standardized ime cost 
                        percentage.--The term ``standardized 
                        IME cost percentage'' means, for an 
                        area for a year, the per capita costs 
                        for payments under section 
                        1886(d)(5)(B) (expressed as a 
                        percentage of the fee-for-service 
                        amount specified in subparagraph (C)) 
                        for the area and the year.
                  (C) Fee-for-service amount.--The fee-for-
                service amount specified in this subparagraph 
                for an area for a year is the amount specified 
                under subsection (c)(1)(D) for the area and the 
                year.
          (5) Exclusion of costs for kidney acquisitions from 
        capitation rates.--After determining the applicable 
        amount for an area for a year under paragraph (1) 
        (beginning with 2019), the Secretary shall adjust such 
        applicable amount to exclude from such applicable 
        amount the Secretary's estimate of the standardized 
        costs for payments for organ acquisitions for kidney 
        transplants covered under this title (including 
        expenses covered under section 1881(d)) in the area for 
        the year.
  (l) Application of Eligible Professional Incentives for 
Certain MA Organizations for Adoption and Meaningful Use of 
Certified EHR Technology.--
          (1) In general.--Subject to paragraphs (3) and (4), 
        in the case of a qualifying MA organization, the 
        provisions of sections 1848(o) and 1848(a)(7) shall 
        apply with respect to eligible professionals described 
        in paragraph (2) of the organization who the 
        organization attests under paragraph (6) to be 
        meaningful EHR users in a similar manner as they apply 
        to eligible professionals under such sections. 
        Incentive payments under paragraph (3) shall be made to 
        and payment adjustments under paragraph (4) shall apply 
        to such qualifying organizations.
          (2) Eligible professional described.--With respect to 
        a qualifying MA organization, an eligible professional 
        described in this paragraph is an eligible professional 
        (as defined for purposes of section 1848(o)) who--
                  (A)(i) is employed by the organization; or
                  (ii)(I) is employed by, or is a partner of, 
                an entity that through contract with the 
                organization furnishes at least 80 percent of 
                the entity's Medicare patient care services to 
                enrollees of such organization; and
                  (II) furnishes at least 80 percent of the 
                professional services of the eligible 
                professional covered under this title to 
                enrollees of the organization; and
                  (B) furnishes, on average, at least 20 hours 
                per week of patient care services.
          (3) Eligible professional incentive payments.--
                  (A) In general.--In applying section 1848(o) 
                under paragraph (1), instead of the additional 
                payment amount under section 1848(o)(1)(A) and 
                subject to subparagraph (B), the Secretary may 
                substitute an amount determined by the 
                Secretary to the extent feasible and practical 
                to be similar to the estimated amount in the 
                aggregate that would be payable if payment for 
                services furnished by such professionals was 
                payable under part B instead of this part.
                  (B) Avoiding duplication of payments.--
                          (i) In general.--In the case of an 
                        eligible professional described in 
                        paragraph (2)--
                                  (I) that is eligible for the 
                                maximum incentive payment under 
                                section 1848(o)(1)(A) for the 
                                same payment period, the 
                                payment incentive shall be made 
                                only under such section and not 
                                under this subsection; and
                                  (II) that is eligible for 
                                less than such maximum 
                                incentive payment for the same 
                                payment period, the payment 
                                incentive shall be made only 
                                under this subsection and not 
                                under section 1848(o)(1)(A).
                          (ii) Methods.--In the case of an 
                        eligible professional described in 
                        paragraph (2) who is eligible for an 
                        incentive payment under section 
                        1848(o)(1)(A) but is not described in 
                        clause (i) for the same payment period, 
                        the Secretary shall develop a process--
                                  (I) to ensure that duplicate 
                                payments are not made with 
                                respect to an eligible 
                                professional both under this 
                                subsection and under section 
                                1848(o)(1)(A); and
                                  (II) to collect data from 
                                Medicare Advantage 
                                organizations to ensure against 
                                such duplicate payments.
                  (C) Fixed schedule for application of 
                limitation on incentive payments for all 
                eligible professionals.--In applying section 
                1848(o)(1)(B)(ii) under subparagraph (A), in 
                accordance with rules specified by the 
                Secretary, a qualifying MA organization shall 
                specify a year (not earlier than 2011) that 
                shall be treated as the first payment year for 
                all eligible professionals with respect to such 
                organization.
          (4) Payment adjustment.--
                  (A) In general.--In applying section 
                1848(a)(7) under paragraph (1), instead of the 
                payment adjustment being an applicable percent 
                of the fee schedule amount for a year under 
                such section, subject to subparagraph (D), the 
                payment adjustment under paragraph (1) shall be 
                equal to the percent specified in subparagraph 
                (B) for such year of the payment amount 
                otherwise provided under this section for such 
                year.
                  (B) Specified percent.--The percent specified 
                under this subparagraph for a year is 100 
                percent minus a number of percentage points 
                equal to the product of--
                          (i) the number of percentage points 
                        by which the applicable percent (under 
                        section 1848(a)(7)(A)(ii)) for the year 
                        is less than 100 percent; and
                          (ii) the Medicare physician 
                        expenditure proportion specified in 
                        subparagraph (C) for the year.
                  (C) Medicare physician expenditure 
                proportion.--The Medicare physician expenditure 
                proportion under this subparagraph for a year 
                is the Secretary's estimate of the proportion, 
                of the expenditures under parts A and B that 
                are not attributable to this part, that are 
                attributable to expenditures for physicians' 
                services.
                  (D) Application of payment adjustment.--In 
                the case that a qualifying MA organization 
                attests that not all eligible professionals of 
                the organization are meaningful EHR users with 
                respect to a year, the Secretary shall apply 
                the payment adjustment under this paragraph 
                based on the proportion of all such eligible 
                professionals of the organization that are not 
                meaningful EHR users for such year.
          (5) Qualifying ma organization defined.--In this 
        subsection and subsection (m), the term ``qualifying MA 
        organization'' means a Medicare Advantage organization 
        that is organized as a health maintenance organization 
        (as defined in section 2791(b)(3) of the Public Health 
        Service Act).
          (6) Meaningful ehr user attestation.--For purposes of 
        this subsection and subsection (m), a qualifying MA 
        organization shall submit an attestation, in a form and 
        manner specified by the Secretary which may include the 
        submission of such attestation as part of submission of 
        the initial bid under section 1854(a)(1)(A)(iv), 
        identifying--
                  (A) whether each eligible professional 
                described in paragraph (2), with respect to 
                such organization is a meaningful EHR user (as 
                defined in section 1848(o)(2)) for a year 
                specified by the Secretary; and
                  (B) whether each eligible hospital described 
                in subsection (m)(1), with respect to such 
                organization, is a meaningful EHR user (as 
                defined in section 1886(n)(3)) for an 
                applicable period specified by the Secretary.
          (7) Posting on website.--The Secretary shall post on 
        the Internet website of the Centers for Medicare & 
        Medicaid Services, in an easily understandable format, 
        a list of the names, business addresses, and business 
        phone numbers of--
                  (A) each qualifying MA organization receiving 
                an incentive payment under this subsection for 
                eligible professionals of the organization; and
                  (B) the eligible professionals of such 
                organization for which such incentive payment 
                is based.
          (8) Limitation on review.--There shall be no 
        administrative or judicial review under section 1869, 
        section 1878, or otherwise, of--
                  (A) the methodology and standards for 
                determining payment amounts and payment 
                adjustments under this subsection, including 
                avoiding duplication of payments under 
                paragraph (3)(B) and the specification of rules 
                for the fixed schedule for application of 
                limitation on incentive payments for all 
                eligible professionals under paragraph (3)(C);
                  (B) the methodology and standards for 
                determining eligible professionals under 
                paragraph (2); and
                  (C) the methodology and standards for 
                determining a meaningful EHR user under section 
                1848(o)(2), including specification of the 
                means of demonstrating meaningful EHR use under 
                section 1848(o)(3)(C) and selection of measures 
                under section 1848(o)(3)(B).
  (m) Application of Eligible Hospital Incentives for Certain 
MA Organizations for Adoption and Meaningful Use of Certified 
EHR Technology.--
          (1) Application.--Subject to paragraphs (3) and (4), 
        in the case of a qualifying MA organization, the 
        provisions of sections 1886(n) and 1886(b)(3)(B)(ix) 
        shall apply with respect to eligible hospitals 
        described in paragraph (2) of the organization which 
        the organization attests under subsection (l)(6) to be 
        meaningful EHR users in a similar manner as they apply 
        to eligible hospitals under such sections. Incentive 
        payments under paragraph (3) shall be made to and 
        payment adjustments under paragraph (4) shall apply to 
        such qualifying organizations.
          (2) Eligible hospital described.--With respect to a 
        qualifying MA organization, an eligible hospital 
        described in this paragraph is an eligible hospital (as 
        defined in section 1886(n)(6)(B)) that is under common 
        corporate governance with such organization and serves 
        individuals enrolled under an MA plan offered by such 
        organization.
          (3) Eligible hospital incentive payments.--
                  (A) In general.--In applying section 
                1886(n)(2) under paragraph (1), instead of the 
                additional payment amount under section 
                1886(n)(2), there shall be substituted an 
                amount determined by the Secretary to be 
                similar to the estimated amount in the 
                aggregate that would be payable if payment for 
                services furnished by such hospitals was 
                payable under part A instead of this part. In 
                implementing the previous sentence, the 
                Secretary--
                          (i) shall, insofar as data to 
                        determine the discharge related amount 
                        under section 1886(n)(2)(C) for an 
                        eligible hospital are not available to 
                        the Secretary, use such alternative 
                        data and methodology to estimate such 
                        discharge related amount as the 
                        Secretary determines appropriate; and
                          (ii) shall, insofar as data to 
                        determine the medicare share described 
                        in section 1886(n)(2)(D) for an 
                        eligible hospital are not available to 
                        the Secretary, use such alternative 
                        data and methodology to estimate such 
                        share, which data and methodology may 
                        include use of the inpatient-bed-days 
                        (or discharges) with respect to an 
                        eligible hospital during the 
                        appropriate period which are 
                        attributable to both individuals for 
                        whom payment may be made under part A 
                        or individuals enrolled in an MA plan 
                        under a Medicare Advantage organization 
                        under this part as a proportion of the 
                        estimated total number of patient-bed-
                        days (or discharges) with respect to 
                        such hospital during such period.
                  (B) Avoiding duplication of payments.--
                          (i) In general.--In the case of a 
                        hospital that for a payment year is an 
                        eligible hospital described in 
                        paragraph (2) and for which at least 
                        one-third of their discharges (or bed-
                        days) of Medicare patients for the year 
                        are covered under part A, payment for 
                        the payment year shall be made only 
                        under section 1886(n) and not under 
                        this subsection.
                          (ii) Methods.--In the case of a 
                        hospital that is an eligible hospital 
                        described in paragraph (2) and also is 
                        eligible for an incentive payment under 
                        section 1886(n) but is not described in 
                        clause (i) for the same payment period, 
                        the Secretary shall develop a process--
                                  (I) to ensure that duplicate 
                                payments are not made with 
                                respect to an eligible hospital 
                                both under this subsection and 
                                under section 1886(n); and
                                  (II) to collect data from 
                                Medicare Advantage 
                                organizations to ensure against 
                                such duplicate payments.
          (4) Payment adjustment.--
                  (A) Subject to paragraph (3), in the case of 
                a qualifying MA organization (as defined in 
                section 1853(l)(5)), if, according to the 
                attestation of the organization submitted under 
                subsection (l)(6) for an applicable period, one 
                or more eligible hospitals (as defined in 
                section 1886(n)(6)(B)) that are under common 
                corporate governance with such organization and 
                that serve individuals enrolled under a plan 
                offered by such organization are not meaningful 
                EHR users (as defined in section 1886(n)(3)) 
                with respect to a period, the payment amount 
                payable under this section for such 
                organization for such period shall be the 
                percent specified in subparagraph (B) for such 
                period of the payment amount otherwise provided 
                under this section for such period.
                  (B) Specified percent.--The percent specified 
                under this subparagraph for a year is 100 
                percent minus a number of percentage points 
                equal to the product of--
                          (i) the number of the percentage 
                        point reduction effected under section 
                        1886(b)(3)(B)(ix)(I) for the period; 
                        and
                          (ii) the Medicare hospital 
                        expenditure proportion specified in 
                        subparagraph (C) for the year.
                  (C) Medicare hospital expenditure 
                proportion.--The Medicare hospital expenditure 
                proportion under this subparagraph for a year 
                is the Secretary's estimate of the proportion, 
                of the expenditures under parts A and B that 
                are not attributable to this part, that are 
                attributable to expenditures for inpatient 
                hospital services.
                  (D) Application of payment adjustment.--In 
                the case that a qualifying MA organization 
                attests that not all eligible hospitals are 
                meaningful EHR users with respect to an 
                applicable period, the Secretary shall apply 
                the payment adjustment under this paragraph 
                based on a methodology specified by the 
                Secretary, taking into account the proportion 
                of such eligible hospitals, or discharges from 
                such hospitals, that are not meaningful EHR 
                users for such period.
          (5) Posting on website.--The Secretary shall post on 
        the Internet website of the Centers for Medicare & 
        Medicaid Services, in an easily understandable format--
                  (A) a list of the names, business addresses, 
                and business phone numbers of each qualifying 
                MA organization receiving an incentive payment 
                under this subsection for eligible hospitals 
                described in paragraph (2); and
                  (B) a list of the names of the eligible 
                hospitals for which such incentive payment is 
                based.
          (6) Limitations on review.--There shall be no 
        administrative or judicial review under section 1869, 
        section 1878, or otherwise, of--
                  (A) the methodology and standards for 
                determining payment amounts and payment 
                adjustments under this subsection, including 
                avoiding duplication of payments under 
                paragraph (3)(B);
                  (B) the methodology and standards for 
                determining eligible hospitals under paragraph 
                (2); and
                  (C) the methodology and standards for 
                determining a meaningful EHR user under section 
                1886(n)(3), including specification of the 
                means of demonstrating meaningful EHR use under 
                subparagraph (C) of such section and selection 
                of measures under subparagraph (B) of such 
                section.
  (n) Determination of Blended Benchmark Amount.--
          (1) In general.--For purposes of subsection (j), 
        subject to paragraphs (3), (4), and (5), the term 
        ``blended benchmark amount'' means for an area--
                  (A) for 2012 the sum of--
                          (i) \1/2\ of the applicable amount 
                        for the area and year; and
                          (ii) \1/2\ of the amount specified in 
                        paragraph (2)(A) for the area and year; 
                        and
                  (B) for a subsequent year the amount 
                specified in paragraph (2)(A) for the area and 
                year.
          (2) Specified amount.--
                  (A) In general.--The amount specified in this 
                subparagraph for an area and year is the 
                product of--
                          (i) the base payment amount specified 
                        in subparagraph (E) for the area and 
                        year adjusted to take into account the 
                        phase-out in the indirect costs of 
                        medical education from capitation rates 
                        described in subsection (k)(4) and, for 
                        2019 and subsequent years, the 
                        exclusion of payments for organ 
                        acquisitions for kidney transplants 
                        from the capitation rate as described 
                        in subsection (k)(5); and
                          (ii) the applicable percentage for 
                        the area for the year specified under 
                        subparagraph (B).
                  (B) Applicable percentage.--Subject to 
                subparagraph (D), the applicable percentage 
                specified in this subparagraph for an area for 
                a year in the case of an area that is ranked--
                          (i) in the highest quartile under 
                        subparagraph (C) for the previous year 
                        is 95 percent;
                          (ii) in the second highest quartile 
                        under such subparagraph for the 
                        previous year is 100 percent;
                          (iii) in the third highest quartile 
                        under such subparagraph for the 
                        previous year is 107.5 percent; or
                          (iv) in the lowest quartile under 
                        such subparagraph for the previous year 
                        is 115 percent.
                  (C) Periodic ranking.--For purposes of this 
                paragraph in the case of an area located--
                          (i) in 1 of the 50 States or the 
                        District of Columbia, the Secretary 
                        shall rank such area in each year 
                        specified under subsection 
                        (c)(1)(D)(ii) based upon the level of 
                        the amount specified in subparagraph 
                        (A)(i) for such areas; or
                          (ii) in a territory, the Secretary 
                        shall rank such areas in each such year 
                        based upon the level of the amount 
                        specified in subparagraph (A)(i) for 
                        such area relative to quartile rankings 
                        computed under clause (i).
                  (D) 1-year transition for changes in 
                applicable percentage.--If, for a year after 
                2012, there is a change in the quartile in 
                which an area is ranked compared to the 
                previous year, the applicable percentage for 
                the area in the year shall be the average of--
                          (i) the applicable percentage for the 
                        area for the previous year; and
                          (ii) the applicable percentage that 
                        would otherwise apply for the area for 
                        the year.
                  (E) Base payment amount.--Subject to 
                [subparagraph (F)] subparagraphs (F) and (G), 
                the base payment amount specified in this 
                subparagraph--
                          (i) for 2012 is the amount specified 
                        in subsection (c)(1)(D) for the area 
                        for the year; or
                          (ii) for a subsequent year that--
                                  (I) is not specified under 
                                subsection (c)(1)(D)(ii), is 
                                the base amount specified in 
                                this subparagraph for the area 
                                for the previous year, 
                                increased by the national per 
                                capita MA growth percentage, 
                                described in subsection (c)(6) 
                                for that succeeding year, but 
                                not taking into account any 
                                adjustment under subparagraph 
                                (C) of such subsection for a 
                                year before 2004; and
                                  (II) is specified under 
                                subsection (c)(1)(D)(ii), is 
                                the amount specified in 
                                subsection (c)(1)(D) for the 
                                area for the year.
                  (F) Application of indirect medical education 
                phase-out.--The base payment amount specified 
                in subparagraph (E) for a year shall be 
                adjusted in the same manner under paragraph (4) 
                of subsection (k) as the applicable amount is 
                adjusted under such subsection.
                  (G) Application of kidney acquisitions 
                adjustment.--The base payment amount specified 
                in subparagraph (E) for a year (beginning with 
                2019) shall be adjusted in the same manner 
                under paragraph (5) of subsection (k) as the 
                applicable amount is adjusted under such 
                subsection.
          (3) Alternative phase-ins.--
                  (A) 4-year phase-in for certain areas.--If 
                the difference between the applicable amount 
                (as defined in subsection (k)) for an area for 
                2010 and the projected 2010 benchmark amount 
                (as defined in subparagraph (C)) for the area 
                is at least $30 but less than $50, the blended 
                benchmark amount for the area is--
                          (i) for 2012 the sum of--
                                  (I) \3/4\ of the applicable 
                                amount for the area and year; 
                                and
                                  (II) \1/4\ of the amount 
                                specified in paragraph (2)(A) 
                                for the area and year;
                          (ii) for 2013 the sum of--
                                  (I) \1/2\ of the applicable 
                                amount for the area and year; 
                                and
                                  (II) \1/2\ of the amount 
                                specified in paragraph (2)(A) 
                                for the area and year;
                          (iii) for 2014 the sum of--
                                  (I) \1/4\ of the applicable 
                                amount for the area and year; 
                                and
                                  (II) \3/4\ of the amount 
                                specified in paragraph (2)(A) 
                                for the area and year; and
                          (iv) for a subsequent year the amount 
                        specified in paragraph (2)(A) for the 
                        area and year.
                  (B) 6-year phase-in for certain areas.--If 
                the difference between the applicable amount 
                (as defined in subsection (k)) for an area for 
                2010 and the projected 2010 benchmark amount 
                (as defined in subparagraph (C)) for the area 
                is at least $50, the blended benchmark amount 
                for the area is--
                          (i) for 2012 the sum of--
                                  (I) \5/6\ of the applicable 
                                amount for the area and year; 
                                and
                                  (II) \1/6\ of the amount 
                                specified in paragraph (2)(A) 
                                for the area and year;
                          (ii) for 2013 the sum of--
                                  (I) \2/3\ of the applicable 
                                amount for the area and year; 
                                and
                                  (II) \1/3\ of the amount 
                                specified in paragraph (2)(A) 
                                for the area and year;
                          (iii) for 2014 the sum of--
                                  (I) \1/2\ of the applicable 
                                amount for the area and year; 
                                and
                                  (II) \1/2\ of the amount 
                                specified in paragraph (2)(A) 
                                for the area and year;
                          (iv) for 2015 the sum of--
                                  (I) \1/3\ of the applicable 
                                amount for the area and year; 
                                and
                                  (II) \2/3\ of the amount 
                                specified in paragraph (2)(A) 
                                for the area and year; and
                          (v) for 2016 the sum of--
                                  (I) \1/6\ of the applicable 
                                amount for the area and year; 
                                and
                                  (II) \5/6\ of the amount 
                                specified in paragraph (2)(A) 
                                for the area and year; and
                          (vi) for a subsequent year the amount 
                        specified in paragraph (2)(A) for the 
                        area and year.
                  (C) Projected 2010 benchmark amount.--The 
                projected 2010 benchmark amount described in 
                this subparagraph for an area is equal to the 
                sum of--
                          (i) \1/2\ of the applicable amount 
                        (as defined in subsection (k)) for the 
                        area for 2010; and
                          (ii) \1/2\ of the amount specified in 
                        paragraph (2)(A) for the area for 2010 
                        but determined as if there were 
                        substituted for the applicable 
                        percentage specified in clause (ii) of 
                        such paragraph the sum of--
                                  (I) the applicable percent 
                                that would be specified under 
                                subparagraph (B) of paragraph 
                                (2) (determined without regard 
                                to subparagraph (D) of such 
                                paragraph) for the area for 
                                2010 if any reference in such 
                                paragraph to ``the previous 
                                year'' were deemed a reference 
                                to 2010; and
                                  (II) the applicable 
                                percentage increase that would 
                                apply to a qualifying plan in 
                                the area under subsection (o) 
                                as if any reference in such 
                                subsection to 2012 were deemed 
                                a reference to 2010 and as if 
                                the determination of a 
                                qualifying county under 
                                paragraph (3)(B) of such 
                                subsection were made for 2010.
          (4) Cap on benchmark amount.--In no case shall the 
        blended benchmark amount for an area for a year 
        (determined taking into account subsection (o)) be 
        greater than the applicable amount that would (but for 
        the application of this subsection) be determined under 
        subsection (k)(1) for the area for the year.
          (5) Non-application to pace plans.--This subsection 
        shall not apply to payments to a PACE program under 
        section 1894.
  (o) Applicable Percentage Quality Increases.--
          (1) In general.--Subject to the succeeding 
        paragraphs, in the case of a qualifying plan with 
        respect to a year beginning with 2012, the applicable 
        percentage under subsection (n)(2)(B) shall be 
        increased on a plan or contract level, as determined by 
        the Secretary--
                  (A) for 2012, by 1.5 percentage points;
                  (B) for 2013, by 3.0 percentage points; and
                  (C) for 2014 or a subsequent year, by 5.0 
                percentage points.
          (2) Increase for qualifying plans in qualifying 
        counties.--The increase applied under paragraph (1) for 
        a qualifying plan located in a qualifying county for a 
        year shall be doubled.
          (3) Qualifying plans and qualifying county defined; 
        application of increases to low enrollment and new 
        plans.--For purposes of this subsection:
                  (A) Qualifying plan.--
                          (i) In general.--The term 
                        ``qualifying plan'' means, for a year 
                        and subject to paragraph (4), a plan 
                        that had a quality rating under 
                        paragraph (4) of 4 stars or higher 
                        based on the most recent data available 
                        for such year.
                          (ii) Application of increases to low 
                        enrollment plans.--
                                  (I) 2012.--For 2012, the term 
                                ``qualifying plan'' includes an 
                                MA plan that the Secretary 
                                determines is not able to have 
                                a quality rating under 
                                paragraph (4) because of low 
                                enrollment.
                                  (II) 2013 and subsequent 
                                years.--For 2013 and subsequent 
                                years, for purposes of 
                                determining whether an MA plan 
                                with low enrollment (as defined 
                                by the Secretary) is included 
                                as a qualifying plan, the 
                                Secretary shall establish a 
                                method to apply to MA plans 
                                with low enrollment (as defined 
                                by the Secretary) the 
                                computation of quality rating 
                                and the rating system under 
                                paragraph (4).
                          (iii) Application of increases to new 
                        plans.--
                                  (I) In general.--A new MA 
                                plan that meets criteria 
                                specified by the Secretary 
                                shall be treated as a 
                                qualifying plan, except that in 
                                applying paragraph (1), the 
                                applicable percentage under 
                                subsection (n)(2)(B) shall be 
                                increased--
                                          (aa) for 2012, by 1.5 
                                        percentage points;
                                          (bb) for 2013, by 2.5 
                                        percentage points; and
                                          (cc) for 2014 or a 
                                        subsequent year, by 3.5 
                                        percentage points.
                                  (II) New ma plan defined.--
                                The term ``new MA plan'' means, 
                                with respect to a year, a plan 
                                offered by an organization or 
                                sponsor that has not had a 
                                contract as a Medicare 
                                Advantage organization in the 
                                preceding 3-year period.
                  (B) Qualifying county.--The term ``qualifying 
                county'' means, for a year, a county--
                          (i) that has an MA capitation rate 
                        that, in 2004, was based on the amount 
                        specified in subsection (c)(1)(B) for a 
                        Metropolitan Statistical Area with a 
                        population of more than 250,000;
                          (ii) for which, as of December 2009, 
                        of the Medicare Advantage eligible 
                        individuals residing in the county at 
                        least 25 percent of such individuals 
                        were enrolled in Medicare Advantage 
                        plans; and
                          (iii) that has per capita fee-for-
                        service spending that is lower than the 
                        national monthly per capita cost for 
                        expenditures for individuals enrolled 
                        under the original medicare fee-for-
                        service program for the year.
          (4) Quality determinations for application of 
        increase.--
                  (A) Quality determination.--The quality 
                rating for a plan shall be determined according 
                to a 5-star rating system (based on the data 
                collected under section 1852(e)).
                  (B) Plans that failed to report.--An MA plan 
                which does not report data that enables the 
                Secretary to rate the plan for purposes of this 
                paragraph shall be counted as having a rating 
                of fewer than 3.5 stars.
                  (C) Special rule for first 3 plan years for 
                plans that were converted from a reasonable 
                cost reimbursement contract.--For purposes of 
                applying paragraph (1) and section 
                1854(b)(1)(C) for the first 3 plan years under 
                this part in the case of an MA plan to which 
                deemed enrollment applies under section 
                1851(c)(4)--
                          (i) such plan shall not be treated as 
                        a new MA plan (as defined in paragraph 
                        (3)(A)(iii)(II)); and
                          (ii) in determining the star rating 
                        of the plan under subparagraph (A), to 
                        the extent that Medicare Advantage data 
                        for such plan is not available for a 
                        measure used to determine such star 
                        rating, the Secretary shall use data 
                        from the period in which such plan was 
                        a reasonable cost reimbursement 
                        contract.
          (5) Exception for pace plans.--This subsection shall 
        not apply to payments to a PACE program under section 
        1894.

           *       *       *       *       *       *       *


                 definitions; miscellaneous provisions

  Sec. 1859. (a) Definitions Relating to Medicare+Choice 
Organizations.--In this part--
          (1) Medicare+choice organization.--The term 
        ``Medicare+Choice organization'' means a public or 
        private entity that is certified under section 1856 as 
        meeting the requirements and standards of this part for 
        such an organization.
          (2) Provider-sponsored organization.--The term 
        ``provider-sponsored organization'' is defined in 
        section 1855(d)(1).
  (b) Definitions Relating to Medicare+Choice Plans.--
          (1) Medicare+choice plan.--The term ``Medicare+Choice 
        plan'' means health benefits coverage offered under a 
        policy, contract, or plan by a Medicare+Choice 
        organization pursuant to and in accordance with a 
        contract under section 1857.
          (2) Medicare+Choice private fee-for-service plan.--
        The term ``Medicare+Choice private fee-for-service 
        plan'' means a Medicare+Choice plan that--
                  (A) reimburses hospitals, physicians, and 
                other providers at a rate determined by the 
                plan on a fee-for-service basis without placing 
                the provider at financial risk;
                  (B) does not vary such rates for such a 
                provider based on utilization relating to such 
                provider; and
                  (C) does not restrict the selection of 
                providers among those who are lawfully 
                authorized to provide the covered services and 
                agree to accept the terms and conditions of 
                payment established by the plan.
        Nothing in subparagraph (B) shall be construed to 
        preclude a plan from varying rates for such a provider 
        based on the specialty of the provider, the location of 
        the provider, or other factors related to such provider 
        that are not related to utilization, or to preclude a 
        plan from increasing rates for such a provider based on 
        increased utilization of specified preventive or 
        screening services.
          (3) MSA plan.--
                  (A) In general.--The term ``MSA plan'' means 
                a Medicare+Choice plan that--
                          (i) provides reimbursement for at 
                        least the items and services described 
                        in section 1852(a)(1) in a year but 
                        only after the enrollee incurs 
                        countable expenses (as specified under 
                        the plan) equal to the amount of an 
                        annual deductible (described in 
                        subparagraph (B));
                          (ii) counts as such expenses (for 
                        purposes of such deductible) at least 
                        all amounts that would have been 
                        payable under parts A and B, and that 
                        would have been payable by the enrollee 
                        as deductibles, coinsurance, or 
                        copayments, if the enrollee had elected 
                        to receive benefits through the 
                        provisions of such parts; and
                          (iii) provides, after such deductible 
                        is met for a year and for all 
                        subsequent expenses for items and 
                        services referred to in clause (i) in 
                        the year, for a level of reimbursement 
                        that is not less than--
                                  (I) 100 percent of such 
                                expenses, or
                                  (II) 100 percent of the 
                                amounts that would have been 
                                paid (without regard to any 
                                deductibles or coinsurance) 
                                under parts A and B with 
                                respect to such expenses,
                        whichever is less.
                  (B) Deductible.--The amount of annual 
                deductible under an MSA plan--
                          (i) for contract year 1999 shall be 
                        not more than $6,000; and
                          (ii) for a subsequent contract year 
                        shall be not more than the maximum 
                        amount of such deductible for the 
                        previous contract year under this 
                        subparagraph increased by the national 
                        per capita Medicare+Choice growth 
                        percentage under section 1853(c)(6) for 
                        the year.
                If the amount of the deductible under clause 
                (ii) is not a multiple of $50, the amount shall 
                be rounded to the nearest multiple of $50.
          (4) MA regional plan.--The term ``MA regional plan'' 
        means an MA plan described in section 
        1851(a)(2)(A)(i)--
                  (A) that has a network of providers that have 
                agreed to a contractually specified 
                reimbursement for covered benefits with the 
                organization offering the plan;
                  (B) that provides for reimbursement for all 
                covered benefits regardless of whether such 
                benefits are provided within such network of 
                providers; and
                  (C) the service area of which is one or more 
                entire MA regions.
          (5) MA local plan.--The term ``MA local plan'' means 
        an MA plan that is not an MA regional plan.
          (6) Specialized ma plans for special needs 
        individuals.--
                  (A) In general.--The term ``specialized MA 
                plan for special needs individuals'' means an 
                MA plan that exclusively serves special needs 
                individuals (as defined in subparagraph (B)) 
                and that, as of January 1, 2010, meets the 
                applicable requirements of paragraph (2), (3), 
                or (4) of subsection (f), as the case may be.
                  (B) Special needs individual.--The term 
                ``special needs individual'' means an MA 
                eligible individual who--
                          (i) is institutionalized (as defined 
                        by the Secretary);
                          (ii) is entitled to medical 
                        assistance under a State plan under 
                        title XIX; or
                          (iii) meets such requirements as the 
                        Secretary may determine would benefit 
                        from enrollment in such a specialized 
                        MA plan described in subparagraph (A) 
                        for individuals with severe or 
                        disabling chronic conditions who have 
                        one or more comorbid and medically 
                        complex chronic conditions that are 
                        substantially disabling or life 
                        threatening, have a high risk of 
                        hospitalization or other significant 
                        adverse health outcomes, and require 
                        specialized delivery systems across 
                        domains of care.
                The Secretary [may waive application of section 
                1851(a)(3)(B) in the case of an individual 
                described in clause (i), (ii), or (iii) of this 
                subparagraph and] may apply rules similar to 
                the rules of section 1894(c)(4) for continued 
                eligibility of special needs individuals.
  (c) Other References to Other Terms.--
          (1) Medicare+choice eligible individual.--The term 
        ``Medicare+Choice eligible individual'' is defined in 
        section 1851(a)(3).
          (2) Medicare+choice payment area.--The term 
        ``Medicare+Choice payment area'' is defined in section 
        1853(d).
          (3) National per capita medicare+choice growth 
        percentage.--The ``national per capita Medicare+Choice 
        growth percentage'' is defined in section 1853(c)(6).
          (4) Medicare+choice monthly basic beneficiary 
        premium; medicare+choice monthly supplemental 
        beneficiary premium.--The terms ``Medicare+Choice 
        monthly basic beneficiary premium'' and 
        ``Medicare+Choice monthly supplemental beneficiary 
        premium'' are defined in section 1854(a)(2).
          (5) MA local area.--The term ``MA local area'' is 
        defined in section 1853(d)(2).
  (d) Coordinated Acute and Long-Term Care Benefits Under a 
Medicare+Choice Plan.--Nothing in this part shall be construed 
as preventing a State from coordinating benefits under a 
medicaid plan under title XIX with those provided under a 
Medicare+Choice plan in a manner that assures continuity of a 
full-range of acute care and long-term care services to poor 
elderly or disabled individuals eligible for benefits under 
this title and under such plan.
  (e) Restriction on Enrollment for Certain Medicare+Choice 
Plans.--
          (1) In general.--In the case of a Medicare+Choice 
        religious fraternal benefit society plan described in 
        paragraph (2), notwithstanding any other provision of 
        this part to the contrary and in accordance with 
        regulations of the Secretary, the society offering the 
        plan may restrict the enrollment of individuals under 
        this part to individuals who are members of the church, 
        convention, or group described in paragraph (3)(B) with 
        which the society is affiliated.
          (2) Medicare+choice religious fraternal benefit 
        society plan described.--For purposes of this 
        subsection, a Medicare+Choice religious fraternal 
        benefit society plan described in this paragraph is a 
        Medicare+Choice plan described in section 1851(a)(2) 
        that--
                  (A) is offered by a religious fraternal 
                benefit society described in paragraph (3) only 
                to members of the church, convention, or group 
                described in paragraph (3)(B); and
                  (B) permits all such members to enroll under 
                the plan without regard to health status-
                related factors.
        Nothing in this subsection shall be construed as 
        waiving any plan requirements relating to financial 
        solvency.
          (3) Religious fraternal benefit society defined.--For 
        purposes of paragraph (2)(A), a ``religious fraternal 
        benefit society'' described in this section is an 
        organization that--
                  (A) is described in section 501(c)(8) of the 
                Internal Revenue Code of 1986 and is exempt 
                from taxation under section 501(a) of such Act;
                  (B) is affiliated with, carries out the 
                tenets of, and shares a religious bond with, a 
                church or convention or association of churches 
                or an affiliated group of churches;
                  (C) offers, in addition to a Medicare+Choice 
                religious fraternal benefit society plan, 
                health coverage to individuals not entitled to 
                benefits under this title who are members of 
                such church, convention, or group; and
                  (D) does not impose any limitation on 
                membership in the society based on any health 
                status-related factor.
          (4) Payment adjustment.--Under regulations of the 
        Secretary, in the case of individuals enrolled under 
        this part under a Medicare+Choice religious fraternal 
        benefit society plan described in paragraph (2), the 
        Secretary shall provide for such adjustment to the 
        payment amounts otherwise established under section 
        1854 as may be appropriate to assure an appropriate 
        payment level, taking into account the actuarial 
        characteristics and experience of such individuals.
  (f) Requirements Regarding Enrollment in Specialized MA Plans 
for Special Needs Individuals.--
          (1) Requirements for enrollment.--In the case of a 
        specialized MA plan for special needs individuals (as 
        defined in subsection (b)(6)), notwithstanding any 
        other provision of this part and in accordance with 
        regulations of the Secretary and for periods before 
        January 1, 2019, the plan may restrict the enrollment 
        of individuals under the plan to individuals who are 
        within one or more classes of special needs 
        individuals.
          (2) Additional requirements for institutional snps.--
        In the case of a specialized MA plan for special needs 
        individuals described in subsection (b)(6)(B)(i), the 
        applicable requirements described in this paragraph are 
        as follows:
                  (A) Each individual that enrolls in the plan 
                on or after January 1, 2010, is a special needs 
                individuals described in subsection 
                (b)(6)(B)(i). In the case of an individual who 
                is living in the community but requires an 
                institutional level of care, such individual 
                shall not be considered a special needs 
                individual described in subsection (b)(6)(B)(i) 
                unless the determination that the individual 
                requires an institutional level of care was 
                made--
                          (i) using a State assessment tool of 
                        the State in which the individual 
                        resides; and
                          (ii) by an entity other than the 
                        organization offering the plan.
                  (B) The plan meets the requirements described 
                in paragraph (5).
                  (C) If applicable, the plan meets the 
                requirement described in paragraph (7).
          (3) Additional requirements for dual snps.--In the 
        case of a specialized MA plan for special needs 
        individuals described in subsection (b)(6)(B)(ii), the 
        applicable requirements described in this paragraph are 
        as follows:
                  (A) Each individual that enrolls in the plan 
                on or after January 1, 2010, is a special needs 
                individuals described in subsection 
                (b)(6)(B)(ii).
                  (B) The plan meets the requirements described 
                in paragraph (5).
                  (C) The plan provides each prospective 
                enrollee, prior to enrollment, with a 
                comprehensive written statement (using 
                standardized content and format established by 
                the Secretary) that describes--
                          (i) the benefits and cost-sharing 
                        protections that the individual is 
                        entitled to under the State Medicaid 
                        program under title XIX; and
                          (ii) which of such benefits and cost-
                        sharing protections are covered under 
                        the plan.
                Such statement shall be included with any 
                description of benefits offered by the plan.
                  (D) The plan has a contract with the State 
                Medicaid agency to provide benefits, or arrange 
                for benefits to be provided, for which such 
                individual is entitled to receive as medical 
                assistance under title XIX. Such benefits may 
                include long-term care services consistent with 
                State policy.
                  (E) If applicable, the plan meets the 
                requirement described in paragraph (7).
          (4) Additional requirements for severe or disabling 
        chronic condition snps.--In the case of a specialized 
        MA plan for special needs individuals described in 
        subsection (b)(6)(B)(iii), the applicable requirements 
        described in this paragraph are as follows:
                  (A) Each individual that enrolls in the plan 
                on or after January 1, 2010, is a special needs 
                individual described in subsection 
                (b)(6)(B)(iii).
                  (B) The plan meets the requirements described 
                in paragraph (5).
                  (C) If applicable, the plan meets the 
                requirement described in paragraph (7).
          (5) Care management requirements for all snps.--The 
        requirements described in this paragraph are that the 
        organization offering a specialized MA plan for special 
        needs individuals--
                  (A) have in place an evidenced-based model of 
                care with appropriate networks of providers and 
                specialists; and
                  (B) with respect to each individual enrolled 
                in the plan--
                          (i) conduct an initial assessment and 
                        an annual reassessment of the 
                        individual's physical, psychosocial, 
                        and functional needs;
                          (ii) develop a plan, in consultation 
                        with the individual as feasible, that 
                        identifies goals and objectives, 
                        including measurable outcomes as well 
                        as specific services and benefits to be 
                        provided; and
                          (iii) use an interdisciplinary team 
                        in the management of care.
          (6) Transition and exception regarding restriction on 
        enrollment.--
                  (A) In general.--Subject to subparagraph (C), 
                the Secretary shall establish procedures for 
                the transition of applicable individuals to--
                          (i) a Medicare Advantage plan that is 
                        not a specialized MA plan for special 
                        needs individuals (as defined in 
                        subsection (b)(6)); or
                          (ii) the original medicare fee-for-
                        service program under parts A and B.
                  (B) Applicable individuals.--For purposes of 
                clause (i), the term ``applicable individual'' 
                means an individual who--
                          (i) is enrolled under a specialized 
                        MA plan for special needs individuals 
                        (as defined in subsection (b)(6)); and
                          (ii) is not within the 1 or more of 
                        the classes of special needs 
                        individuals to which enrollment under 
                        the plan is restricted to.
                  (C) Exception.--The Secretary shall provide 
                for an exception to the transition described in 
                subparagraph (A) for a limited period of time 
                for individuals enrolled under a specialized MA 
                plan for special needs individuals described in 
                subsection (b)(6)(B)(ii) who are no longer 
                eligible for medical assistance under title 
                XIX.
                  (D) Timeline for initial transition.--The 
                Secretary shall ensure that applicable 
                individuals enrolled in a specialized MA plan 
                for special needs individuals (as defined in 
                subsection (b)(6)) prior to January 1, 2010, 
                are transitioned to a plan or the program 
                described in subparagraph (A) by not later than 
                January 1, 2013.
          (7) Authority to require special needs plans be ncqa 
        approved.--For 2012 and subsequent years, the Secretary 
        shall require that a Medicare Advantage organization 
        offering a specialized MA plan for special needs 
        individuals be approved by the National Committee for 
        Quality Assurance (based on standards established by 
        the Secretary).
  (g) Special Rules for Senior Housing Facility Plans.--
          (1) In general.--In the case of a Medicare Advantage 
        senior housing facility plan described in paragraph 
        (2), notwithstanding any other provision of this part 
        to the contrary and in accordance with regulations of 
        the Secretary, the service area of such plan may be 
        limited to a senior housing facility in a geographic 
        area.
          (2) Medicare advantage senior housing facility plan 
        described.--For purposes of this subsection, a Medicare 
        Advantage senior housing facility plan is a Medicare 
        Advantage plan that--
                  (A) restricts enrollment of individuals under 
                this part to individuals who reside in a 
                continuing care retirement community (as 
                defined in section 1852(l)(4)(B));
                  (B) provides primary care services onsite and 
                has a ratio of accessible physicians to 
                beneficiaries that the Secretary determines is 
                adequate;
                  (C) provides transportation services for 
                beneficiaries to specialty providers outside of 
                the facility; and
                  (D) has participated (as of December 31, 
                2009) in a demonstration project established by 
                the Secretary under which such a plan was 
                offered for not less than 1 year.

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