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108th CONGRESS
1st Session
H. R. 983
To amend part C of title XVIII of the Social Security Act to
consolidate and restate the Federal laws relating to the social health
maintenance organization projects, to make such projects permanent, to
require the Medicare Payment Advisory Commission to conduct a study on
ways to expand such projects, and for other purposes.
_______________________________________________________________________
IN THE HOUSE OF REPRESENTATIVES
February 27, 2003
Mr. Gallegly (for himself, Mr. Issa, Ms. Millender-McDonald, Mr. Cox,
Mr. Dreier, and Mr. Rohrabacher) introduced the following bill; which
was referred to the Committee on Ways and Means, and in addition to the
Committee on Energy and Commerce, for a period to be subsequently
determined by the Speaker, in each case for consideration of such
provisions as fall within the jurisdiction of the committee concerned
_______________________________________________________________________
A BILL
To amend part C of title XVIII of the Social Security Act to
consolidate and restate the Federal laws relating to the social health
maintenance organization projects, to make such projects permanent, to
require the Medicare Payment Advisory Commission to conduct a study on
ways to expand such projects, and for other purposes.
Be it enacted by the Senate and House of Representatives of the
United States of America in Congress assembled,
SECTION 1. SHORT TITLE; TABLE OF CONTENTS.
(a) Short Title.--This Act may be cited as the ``Seniors Health and
Independence Preservation Act of 2003''.
(b) Table of Contents.--The table of contents of this Act is as
follows:
Sec. 1. Short title; table of contents.
Sec. 2. Making the social health maintenance organization (SHMO)
projects permanent.
Sec. 3. Expansion of SHMO projects into noncontiguous service areas
within a State.
Sec. 4. Permanence of SHMO planning grant sites.
Sec. 5. Procedures for SHMO benefit and payment mechanism changes.
Sec. 6. Comprehensive MedPAC study on SHMO I and SHMO II cost-
effectiveness and potential expansion.
Sec. 7. SHMO Beneficiary satisfaction survey.
Sec. 8. Conforming cross-references.
Sec. 9. Legislative purpose and construction.
Sec. 10. Repeals.
SEC. 2. MAKING THE SOCIAL HEALTH MAINTENANCE ORGANIZATION (SHMO)
PROJECTS PERMANENT.
Part C of title XVIII of the Social Security Act (42 U.S.C. 1395w-
21 et seq.) is amended by inserting after section 1857 the following
new section:
``waivers for social health maintenance organizations
``Sec. 1858. (a) Establishment of SHMO Projects.--In the case of a
project described in subsection (b), the Secretary shall approve, with
appropriate terms and conditions as defined by the Secretary,
applications or protocols submitted for waivers described in subsection
(c), and the evaluation of such protocols, in order to carry out such
project. Such approval shall be effected not later than 30 days after
the date on which the application or protocol for a waiver is submitted
or not later than 30 days after the date of enactment of the Deficit
Reduction Act of 1984 (Public Law 98-369; 98 Stat. 494) in the case of
an application or protocol submitted before the date of enactment of
such Act. Not later than 36 months after the date of enactment of the
Omnibus Budget Reconciliation Act of 1990 (Public Law 101-508; 104
Stat. 1388), the Secretary shall approve applications or protocols
described in paragraph (1) for not more than 4 additional projects
described in subsection (b).
``(b) Projects Described.--A project referred to in subsection (a)
is a project--
``(1) to demonstrate--
``(A) the concept of a social health maintenance
organization with the organizations as described in
Project No. 18-P-9 7604/1-04 of the University Health
Policy Consortium of Brandeis University; or
``(B) in the case of a project conducted as a
result of the amendments made by section
4207(b)(4)(B)(i) of the Omnibus Budget Reconciliation
Act of 1990 (Public Law 101-508; 104 Stat. 1388-118),
the effectiveness and feasibility of innovative
approaches to refining targeting and financing
methodologies and benefit design, including the
effectiveness of feasibility of--
``(i) the benefits of expanded post-acute
and community care case management through
links between chronic care case management
services and acute care providers;
``(ii) refining targeting or reimbursement
methodologies;
``(iii) the establishment and operation of
a rural services delivery system;
``(iv) integrating acute and chronic care
management for patients with end-stage renal
disease through expanded community care case
management services (and for purposes of a
project conducted under this clause, any
requirement under a waiver granted under this
section that a project disenroll individuals
who develop end-stage renal disease shall not
apply); or
``(v) the effectiveness of second-
generation sites in reducing the costs of
the commencement and management of health care service delivery;
``(2) which provides for the integration of health and
social services under the direct financial management of a
provider of services;
``(3) under which all services under this title will be
provided by or under arrangements made by the organization at a
fixed annual prepaid capitation rate for medicare of 100
percent of the adjusted average per capita cost; and
``(4) under which services under title XIX will be provided
at a rate approved by the Secretary.
``(c) Waivers.--The waivers referred to in subsection (a) are
appropriate waivers of--
``(1) certain requirements of this title, pursuant to
section 402(a) of the Social Security Amendments of 1967
(Public Law 90-248; 81 Stat. 930), as amended by section 222 of
the Social Security Amendments of 1972 (Public Law 92-603; 86
Stat. 1390);
``(2) certain requirements of title XIX, pursuant to
section 1115; and
``(3) in the case of a project conducted as a result of the
amendments made by section 4207(b)(4)(B)(i) of the Omnibus
Budget Reconciliation Act of 1990 (Public Law 101-508; 104
Stat. 1388-118), any requirements of title XVIII or XIX that,
if imposed, would prohibit such project from being conducted.
``(d) Aggregate Limit on Number of Members.--The Secretary may not
impose a limit on the number of individuals that may participate in a
project conducted under this section, other than an aggregate limit of
not less than 324,000 for all sites.
``(e) Reports.--
``(1) Preliminary report.--The Secretary shall submit a
preliminary report to Congress on the status of the projects
and waivers referred to in subsection (a) 45 days after the
date of enactment of the Deficit Reduction Act of 1984 (Public
Law 98-369; 98 Stat. 494).
``(2) Interim report.--The Secretary shall submit an
interim report to Congress on the projects referred to in
subsection (a) not later than 42 months after the date of
enactment of the Deficit Reduction Act of 1984 (Public Law 98-
369; 98 Stat. 494).
``(3) Second interim report.--The Secretary shall submit a
second interim report to Congress on the project referred to in
paragraph (1) not later than March 31, 1993.
``(4) Report on integration and transition.--
``(A) In general.--The Secretary shall submit to
Congress, by not later than January 1, 1999, a plan for
the integration of health plans offered by social
health maintenance organizations (including SHMO I and
SHMO II sites developed under this section and similar
plans) as an option under the Medicare+Choice program
under this title.
``(B) Provision for transition.--The plan submitted
under subparagraph (A) shall include a transition for
social health maintenance organizations operating under
the project authority under this section.
``(C) Payment policy.--The report shall also
include recommendations on appropriate payment levels
for plans offered by such organizations, including an
analysis of the application of risk adjustment factors
appropriate to the population served by such
organizations.
``(5) HHS report.--The Secretary shall submit a report on
the projects conducted under this section not later than the
date that is 21 months after the date on which the Secretary
submits to Congress the report described in paragraph (4).
``(f) Authorization of Appropriations.--There are authorized to be
appropriated $3,500,000 for the costs of technical assistance and
evaluation related to projects conducted as a result of the amendments
made by section 4207(b)(4)(B) of the Omnibus Budget Reconciliation Act
of 1990 (Public Law 101-508; 104 Stat. 1388-118).''.
SEC. 3. EXPANSION OF SHMO PROJECTS INTO NONCONTIGUOUS SERVICE AREAS
WITHIN A STATE.
Not later than the date that is 90 days after the date of enactment
of this Act, the Secretary shall promulgate a regulation that permits
each social health maintenance organization participating in a project
conducted under section 1858 of the Social Security Act (as added by
section 2) to expand the service area of such organization to include
areas within the State served by the organization that are not
contiguous to any other service area of the organization.
SEC. 4. PERMANENCE OF SHMO PLANNING GRANT SITES.
(a) Original SHMO II Demonstrations.--The 5 organizations
authorized by section 4207(b)(4)(B) of the Omnibus Budget
Reconciliation Act of 1990 (Public Law 101-508; 104 Stat. 1388-118) to
demonstrate the concept of social health maintenance organizations that
were approved by the Secretary of Health and Human Services in 1995
shall be permitted to participate in the program under section 1858 of
the Social Security Act (as added by section 2).
(b) SHMO II Dual-Eligible Planning Grants.--Each entity that
received a planning grant in 1998 under the 1997 Grants Program for
Reforming Service Delivery for Dual Eligible Beneficiaries to develop a
Second Generation Social HMO Demonstration Program shall be permitted
to participate in the program under section 1858 of the Social Security
Act (as added by section 2).
SEC. 5. PROCEDURES FOR SHMO BENEFIT AND PAYMENT MECHANISM CHANGES.
(a) Congressional Notification of Benefit Changes.--The Secretary
of Health and Human Services shall notify the appropriate committees of
Congress prior to making any change to the benefits available under a
project under section 1858 of the Social Security Act (as added by
section 2).
(b) Rulemaking Requirement for Payment Mechanism Changes.--The
Secretary may not change the payment mechanism applicable with respect
to any social health maintenance organization project under section
1858 of the Social Security Act (as added by section 2), except by
regulation.
SEC. 6. COMPREHENSIVE MEDPAC STUDY ON SHMO I AND SHMO II COST-
EFFECTIVENESS AND POTENTIAL EXPANSION.
(a) Study.--
(1) In general.--The Medicare Payment Advisory Commission
established under section 1805 of the Social Security Act (42
U.S.C. 1395b-6) (in this section referred to as the
``Commission'') shall conduct a study on the cost-effectiveness
of the projects and the potential expansion of such projects.
(2) Cost-effectiveness.--
(A) In general.--In determining the cost-
effectiveness of the projects under the study conducted
under paragraph (1), the Commission shall take into
account--
(i) the extent to which the per beneficiary
costs to the medicare program for enrollees in
a social health maintenance organization do not
exceed the average per beneficiary costs to the
medicare program for a comparable case mix of
beneficiaries who are enrolled in the original
medicare fee-for-service program;
(ii) the actuarial value of items and
services available to beneficiaries enrolled in
a social health maintenance organization but
not available to beneficiaries enrolled in the
original medicare fee-for-service program; and
(iii) the extent to which social health
maintenance organizations reduced expenditures
under the medicaid program under title XIX of
the Social Security Act by--
(I) preventing individuals from
being eligible for medical assistance
under such program as medically needy
individuals through the application of
spend-down requirements for income and
resources; or
(II) reducing the number of nursing
home bed days associated with stays of
60 days or longer for medicaid
beneficiaries.
(B) Comparable case mix.--In evaluating a
comparable case mix of beneficiaries for purposes of
clause (i)(I), the Commission shall take into account
the following factors:
(i) Age.
(ii) Gender.
(iii) Diagnoses.
(iv) Functional status.
(v) Any other available demographic or
illness factor deemed appropriate by the
Commission.
(C) Data.--In determining the cost-effectiveness of
social health maintenance organizations under this
subsection, the Commission shall evaluate data from
social health maintenance organizations for the period
beginning on January 1, 1997, and ending on the first
December 31 occurring after the date of enactment of
this Act.
(b) Report.--
(1) In general.--Not later than the date that is 24 months
after the date of enactment of this Act, the Commission shall
submit to the Secretary of Health and Human Services and to the
appropriate committees of Congress a report on the study
conducted under subsection (a)(1).
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