To amend title XVIII of the Social Security Act to increase the minimum percentage increase under the Medicare+Choice program, and for other purposes.

May 8, 2003

Ms. DUNN (for herself, Mr. MCDERMOTT, and Mr. RUSH) 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

To amend title XVIII of the Social Security Act to increase the minimum percentage increase under the Medicare+Choice program, 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.

This Act may be cited as the `Medicare Equity and Access Act'.

SEC. 2. 2-YEAR INCREASE IN MINIMUM PERCENTAGE INCREASE.

Section 1853(c)(1)(C) of the Social Security Act (42 U.S.C. 1395w-23(c)(1)(C)) is amended--

(1) in clause (iv), by striking `and each succeeding year' and inserting `and 2003'; and

(2) by inserting at the end the following new clauses:

`(v) For 2004 and 2005, 106.5 percent of the annual Medicare+Choice capitation rate under this paragraph for the area for the previous year.

`(vi) For 2006 and each succeeding year, 102 percent of the annual Medicare+Choice capitation rate under this paragraph for the area for the previous year.'.

SEC. 3. INCLUSION OF COSTS OF DOD AND VA MILITARY FACILITY SERVICES TO MEDICARE-ELIGIBLE BENEFICIARIES IN CALCULATION OF MEDICARE+CHOICE PAYMENT RATES.

Section 1853(c)(3) of the Social Security Act (42 U.S.C. 1395w-23(c)(3)) is amended--

(1) in subparagraph (A), by striking `subparagraph (B)' and inserting `subparagraphs (B) and (E)', and

(2) by adding at the end the following new subparagraph:

`(E) INCLUSION OF COSTS OF DOD AND VA MILITARY FACILITY SERVICES TO MEDICARE-ELIGIBLE BENEFICIARIES- In determining the area-specific Medicare+Choice 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.'.

SEC. 4. AVOIDING DUPLICATIVE STATE REGULATION.

(a) IN GENERAL- Section 1856(b)(3) of the Social Security Act (42 U.S.C. 1395w-26(b)(3)) is amended to read as follows:

`(3) RELATION TO STATE LAWS- The standards established under this subsection shall supersede any State law or regulation (other than State licensing laws or State laws relating to plan solvency) with respect to Medicare+Choice plans which are offered by Medicare+Choice organizations under this part.'.

(b) EFFECTIVE DATE- The amendment made by subsection (a) shall take effect on the date of the enactment of this Act.

SEC. 5. MEDICARE+CHOICE QUALITY PERFORMANCE PAYMENT INCENTIVE PROGRAM.

(a) ESTABLISHMENT OF PROGRAM-

(1) IN GENERAL- The Secretary of Health and Human Services shall establish a program to provide financial incentive awards to Medicare+Choice organizations offering Medicare+Choice plans under part C of title XVIII of the Social Security Act that demonstrate the provision of superior quality health care to enrollees under the plan.

(2) PERIOD OF PROGRAM- Awards under the program shall be made during 2005 and 2006, and shall be based upon the most recent available quality data.

(b) AWARDS-

(1) IN GENERAL- Of the amounts provided for the program under subsection (f) in each year, the Secretary shall allocate--

(A) 75 percent of such amounts for National Performance Quality Awards (described in subsection (c)), and

(B) 25 percent of such amounts for State Performance Quality Awards (described in subsection (d)).

(2) LIMITATIONS ON AWARDS- A Medicare+Choice organization offering a Medicare+Choice plan may not receive both a National and State Performance Quality Award in a year. No Medicare+Choice organization offering a Medicare+Choice plan is eligible for an award under this section unless it offers benefits throughout the year in which the award is paid.

(3) AMOUNT OF AWARD- The amount of an award to a Medicare+Choice organization offering a Medicare+Choice plan eligible for the award shall be determined by multiplying the number of beneficiaries enrolled under the plan on the first day of the year for which the award is paid times a uniform dollar amount established by the Secretary. In no case may the uniform dollar amount for a State Performance Quality Award exceed the dollar amount for a National Performance Quality Award for the year involved.

(4) USE OF AWARDS- Financial incentives received under an award under this section may only be used for the following purposes:

(A) To reduce any beneficiary cost-sharing applicable under the plan.

(B) To reduce any beneficiary premiums applicable under the plan.

(C) To initiate, continue, or enhance a comprehensive disease management program or health care quality programs for beneficiaries.

(D) To enhance beneficiary benefits under the plan.

(E) To utilize the stabilization fund described in section 1854(f)(2) of the Social Security Act (42 U.S.C. 1395w-24(f)(2)).

(5) COMPREHENSIVE DISEASE MANAGEMENT PROGRAM DESCRIBED- A comprehensive disease management program referred to in paragraph (4)(C) is a comprehensive program to manage chronic disease that includes the following:

(A) A population identification process.

(B) Evidence based practice guidelines.

(C) Collaborative practice models that include physician and providers of support services.

(D) Patient self-management education which may include primary prevention, behavior modification programs, and compliance and surveillance.

(E) Process and outcome measurement, evaluation, and management.

(F) Routine reporting among health care providers concerned and procedures for feedback.

(G) Such other components that the Secretary determines reasonably improve health care outcomes.

(c) NATIONAL PERFORMANCE QUALITY AWARDS-

(1) IN GENERAL- The Secretary shall only award a National Performance Quality Award to Medicare+Choice organizations with respect to the Medicare+Choice plans offered by the organizations that demonstrate superior quality in the health care furnished to its enrollees.

(2) MANDATORY AWARDS- National Performance Quality Awards shall be given to the Medicare+Choice organizations with respect to the Medicare+Choice plans that receive ratings in the top 25th percentile of all plans rated by the Secretary pursuant to subsection (e).

(d) STATE PERFORMANCE QUALITY AWARDS-

(1) IN GENERAL- The Secretary shall only award a State Performance Quality Award to Medicare+Choice organizations with respect to the Medicare+Choice plans offered by the organizations in that State that demonstrate the highest quality in the health care furnished to its enrollees.

(2) REQUIREMENT FOR 2 PLANS- A State Performance Quality Award may not be awarded in a State that has less than two Medicare+Choice organizations offering Medicare+Choice plans.

(3) MINIMUM RATING REQUIRED- A State Performance Quality Award shall be awarded to Medicare+Choice organizations offering Medicare+Choice plans in a State that receive a rating by the Secretary pursuant to subsection (e) in the 60th percentile, or higher, of the national ranking of all eligible plans.

(4) SPECIAL CONSIDERATION- The Secretary may provide special consideration to Medicare+Choice organizations offering Medicare+Choice plans that serve predominantly rural areas or that demonstrate significant quality care improvements.

(e) RATING METHODOLOGY- In determining which Medicare+Choice organization offering Medicare+Choice plans qualify for an award under this section, the Secretary shall develop a scoring and ranking system using--

(1) the 2003 MCO standards and guideline methodology of the National Committee for Quality Assurance for awarding total HEDIS points (based on HEDIS and CAHPS measures) with an adjustment to incorporate the following three HEDIS outcome measures--

(A) cholesterol control after acute cardiovascular events,

(B) HbA1c control for comprehensive diabetes care, and

(C) cholesterol control for comprehensive diabetes care), and

(2) audited HEDIS outcomes and process measures and CAHPS data as reported to the Department of Health and Human Services.

(f) PAYMENT FROM MEDICARE TRUST FUNDS- The Secretary shall provide for the transfer from the Federal Hospital Insurance Trust Fund and the Federal Supplementary Insurance Trust Fund under title XVIII of the Social Security Act (42 U.S.C. 1395i, 1395t), in such proportions as the Secretary determines to be appropriate, of $500,000,000 for each of 2005 and 2006 for the costs of carrying out the project under this section.

SEC. 6. INSTITUTE OF MEDICINE REPORT ON PAYMENT INCENTIVES AND PERFORMANCE UNDER THE MEDICARE+CHOICE PROGRAM.

(a) STUDY- The Secretary of Health and Human Services shall enter into an arrangement with the Institute of Medicine of the National Academy of Sciences under which the Institute shall conduct a study on clinical outcomes, performance, and quality of care under the Medicare+Choice program under part C of title XVIII of the Social Security Act.

(b) MATTERS STUDIED-

(1) IN GENERAL- In conducting the study under subsection (a), the Institute shall review and evaluate the public and private sector experience related to the establishment of performance measures and payment incentives. The review shall include an evaluation of the success, efficiency, and utility of structural process and performance measurements, and different methodologies that link performance to payment incentives. The review shall include the use of incentives--

(A) aimed at plans and their enrollees;

(B) aimed at providers and their patients;

(C) to encourage consumers to purchase based on quality and value; and

(D) to encourage multiple purchasers, providers, beneficiaries, and plans within a community to work together to improve performance.

(2) IDENTIFICATION OF OPTIONS- As part of the study, the Institute shall identify options for providing incentives and rewarding performance, improve quality, outcomes, and efficiency in the delivery of programs and services under the Medicare+Choice program, including--

(A) periodic updates of performance measurements to continue rewarding outstanding performance and encourage improvements;

(B) payments that vary by type of plan, such as preferred provider organization plans and MSA plans;

(C) extension of incentives in the Medicare+Choice program to the fee for service program under title XVIII of the Social Security Act; and

(D) performance measures needed to implement alternative methodologies to align payments with performance.

(c) REPORT- Not later than 18 months after the date of the enactment of this Act, the Institute shall submit to Congress and the Secretary a report on the study conducted under subsection (a).

END