HEALTH MAINTENANCE ORGANIZATIONS.

SEC. 4204. HEALTH MAINTENANCE ORGANIZATIONS. (a) Regulation of Incentive Payments to Physicians.— (1) In general.— Section 1876(i) (42 U.S.C. 1395mm(i)) is amended by adding at the end the following new paragraph: “(8) (A) Each contract with an eligible organization under this section shall provide that the organization may not operate any physician incentive plan (as defined in subparagraph (B)) unless the following requirements are met: “(i) No specific payment is made directly or indirectly under the plan to a physician or physician group as an inducement to 104 STAT. 1388–109reduce 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— “(I) 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 the physician group, and “(II) conducts periodic surveys of both individuals en-rolled and individuals previously enrolled with the organization to determine the degree of access of such individuals to services provided by the organization and satisfaction with the quality of such services. “(iii) The organization provides the Secretary with descriptive information regarding the plan, sufficient to permit the Secretary to determine whether the plan is in compliance with the requirements of this subparagraph. “(B) In this paragraph, the term ‘physician incentive plan’ means any compensation arrangement between an eligible 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.”. (2) Penalties.—Section 1876(i)(6)(A)(vi) (42 U.S.C. 1395mm(i)(6)(A)(vi)) is amended by striking “(g)(6)(A);” and inserting ‘(g)(6)(A) or paragraph (8),’. (3) Repeal of prohibition—Section 1128A(b)(D (42 U.S.C. 1320a-7a(b)(D) is amended— (A) by striking “, an eligible organization” and all that follows through “section 1876,”, (B) by adding “and” at the end of subparagraph (A), (C) by striking subparagraph (B), (D) by redesignating subparagraph (C) as subparagraph (B), and (E) by striking “or organization”. (4) Effective date.—The amendments made by paragraphs (1) and (2) shall apply with respect to contract years beginning on or after January 1, 1992, and the amendments made by paragraph (3) shall take effect on the date of the enactment of this Act. (b) Requirements With Respect to Actuarial Equivalence of AAPCC— (1) Not later than January 1, 1992, the Secretary of Health and Human Services (in this section referred to as the “Secretary”) shall submit a proposal to Congress that provides for a modified payment method for organizations with a risk contract under section 1876(g) of the Social Security Act that is more ac-curate than the current payment methodology in predicting the actual service utilization and annual medical expenditures of the beneficiary population enrolled in a specific organization. (2) The proposal shall include— (A) (i) recommendations on modifying the current adjusted average per capita cost formula, by adding predictors of medical 104 STAT. 1388–110utilization such as health status adjustors or prior utilization measures; or (ii) recommendations for a new payment methodology as an alternative to the adjusted average per capita cost; (B) data to support any recommended changes in payment methodology for organizations with risk contracts under section 1876(g) of the Social Security Act; and (C) analysis demonstrating that any proposed or revised payment methodology under this section is effective in explaining at least 15 percent of the variation in health care utilization and costs (as determined in consultation with the American Academy of Actuaries) among individuals enrolled in such organizations. (3) Not later than March 1, 1992, the Secretary shall cause to have published in the Federal Register a proposed rule providing for the implementation of the payment methodology specified in the proposal submitted pursuant to paragraph (1). (4) Not later than May 1, 1992, the Comptroller General shall review the proposal and recommendations made pursuant to paragraphs (1) and (2), and shall report to Congress on appropriate modifications in such payment methodology. (5) Taking into account the recommendations made pursuant to paragraph (4), on or after August 1, 1992, the Secretary shall issue a final rule implementing a payment methodology that meets the requirements of paragraph (1), effective for contract years beginning on or after January 1, 1993. (c) Application of National Coverage Decisions.— (1) In general.— Section 1876(c)(2) (42 U.S.C. 1395mm(c)(2)) is amended— (A) by redesignating clauses (i) and (ii) and subparagraphs (A) and (B) as subclauses (I) and (ID and clauses (i) and (ii), respectively; (B) by inserting “(A)” after “(2)”; and (C) by adding at the end the following new subparagraph: “(B) If there is a national coverage determination made in the period beginning on the date of an announcement under subsection (a)(I)(A) and ending on the date of the next announcement under such subsection that the Secretary projects will result in a significant1919So in original. Probably should be “significant”. change in the costs to the organization of providing the benefits that are the subject of such national coverage determination and that was not incorporated in the determination of the per capita rate of payment included in the announcement made at the beginning of such period— “(i) such determination shall not apply to risk-sharing contracts under this section until the first contract year that begins after the end of such period; and “(ii) if such coverage determination provides for coverage of additional benefits or under additional circumstances, subsection (a)(2); 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, unless otherwise required by law.”. (2) Conforming amendment.—Section 1876(a)(6) of such Act is amended by striking “subsection (c)(7)” and inserting “subsections (c)(2)(B)(ii) and (c)(7)”. 104 STAT. 1388–111 (3) Effective date.—The amendments made by this subsection shall apply with respect to national coverage determinations that are not incorporated in the determination of the per capita rate of payment for individuals enrolled for 1991 with an eligible organization which has entered into a risk-sharing con-tract under section 1876 of the Social Security Act. (d) Payments for Services Furnished by Non-Contract Providers.— (1) In general.— Section 1876lt;j) (42 U.S.C. 1395mm(j)) is amended— (A) in paragraph (1)(A)— (i) by striking “physician” each place it appears and inserting “physician or provider of services or renal dialysis facility”, (ii) by striking “physicians’ services” and inserting “physicians’ services or renal dialysis services”, and (iii) by striking “participation agreement under section 1842(h)(l)” and inserting “applicable participation agreement”, (B) in paragraph (2)— (i) by striking “physicians’ services” each place it appears and inserting “physicians’ services or renal dialysis services”, and (ii) by striking “which—” and all that follows and inserting “which are furnished to an enrollee of an eligible organization under this section2020So in original. Probably should be “section”. by a physician, provider of services, or renal dialysis facility who is not under a contract with the organization.”. (2) Effective date.—The amendment made by paragraph (1) shall apply with respect to items and services furnished on or after January 1, 1991. (e) Retroactive Enrollment.— (1) In general.— Section 18?6(a)(l)(E) (42 U.S.C. 1395mm(a)(l)(E)) is amended— (A) by striking “(E)” and inserting “(E)(i)”; and (B) by adding at the end the following new clause: “(ii) (I) Subject to subclause (II), the Secretary may make retro-active adjustments under clause (i) to take into account individuals enrolled during the period beginning on the date on which the individual enrolls with an eligible organization (which has a risk sharing contract under this section) under a health benefit 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 oh which the individual is enrolled in the plan under this section, except that for purposes of making such retroactive adjustments under this clause, such period may not exceed 90 days. “(II) No adjustment may be made under subclause (I) with respect to any individual who does not certify that the organization provided the individual with the explanation described in subsection (c)(3)(E) at the time the individual enrolled with the organization.”. (2) Effective date.—The amendments made by paragraph (1) shall apply with respect to individuals enrolling with an eligible organization (which has a risk-sharing contract under section 1876 of the Social Security Act) under a health benefit plan operated, sponsored, or contributed to, by the individual’s em-104 STAT. 1388–112ployer or former employer (or the employer or former employer of the individual’s spouse) on or after January 1, 1991. (f) Study of Chiropractic Services.— (1) The Secretary shall conduct a study of the extent to which health maintenance organizations with contracts under section 1876 of the Social Security Act make available to enrollees entitled to benefits under title XVIII of such Act chiropractic services that are covered under such title. (2) The study shall examine the arrangements under which such services are made available and the types of practitioners furnishing such services to such enrollees. (3) The study shall be based on contracts entered into or renewed on or after January 1, 1991, and before January 1, 1993. (4) The Secretary shall issue a final report to the Committees on Ways and Means and Energy and Commerce of the House of Representatives and the Committee on Finance of the Senate on the results of the study not later than January 1, 1993. The report shall include recommendations with respect to any legislative and regulatory changes that the Secretary determines are necessary to ensure access to such services. (g) Prohibiting Certain Employer Marketing Activities.— (1) In general.—Section 1862(b)(3) (42 U.S.C. 1395y(b)(3)) is amended by adding at the end the following new subparagraph: “(C) Prohibition of financial incentives not to enroll in a group health plan.—It is unlawful for an employer or other entity to offer any financial or other incentive for an individual entitled to benefits under this title not to enroll (or to terminate enrollment) under a group health plan which would (in the case of such enrollment) be a primary plan (as defined in paragraph (2)(A)), unless such incentive is also offered to all individuals who are eligible for coverage under the plan. Any entity that violates the previous sentence is subject to a civil money penalty of not to exceed $5,000 for each such violation. The provisions of section 1128A (other than the first sentence of subsection (a) and other than subsection (b)) shall apply to a civil money penalty under the previous sentence in the same manner as such provisions apply to a penalty or proceeding under section 1128A(a).”. (2) Effective date.—The amendment made by paragraph (1) shall apply to incentives offered on or after the date of the enactment of this Act.