MEDICARE SELECT POLICIES.

SEC. 4358. MEDICARE SELECT POLICIES. (a) In General.—Section 1882 (42 U.S.C. 1395ss) is further amended by adding at the end the following: “(t) (1) If a policy meets the NAIC Model Standards and otherwise complies with the requirements of this section except that benefits under the policy are restricted to items and services furnished by certain entities (or reduced benefits are provided when items or services are furnished by other entities), the policy shall nevertheless be treated as meeting those standards if— “(A) full benefits are provided for items and services furnished through a network of entities which have entered into contracts with the issuer of the policy; “(B) full benefits are provided for items and services furnished by other entities if the services are medically necessary and immediately required because of an unforeseen illness, injury, 104 STAT. 1388–136 or condition and it is not reasonable given the circumstances to obtain the services through the network; “(C) the network offers sufficient access; “(D) the issuer of the policy has arrangements for an ongoing quality assurance program for items and services furnished through the network; “(E) (i) the issuer of the policy provides to each enrollee at the time of enrollment an explanation of (I) the restrictions on payment under the policy for services furnished other than by or through the network, (II) out of area coverage under the policy, (III) the policy’s coverage of emergency services and urgently needed care, and (IV) the availability of a policy through the entity that meets the NAIC standards without reference to this subsection and the premium charged for such policy, and “(ii) each enrollee prior to enrollment acknowledges receipt of the explanation provided under clause (i); and “(F) the issuer of the policy makes available to individuals, in addition to the policy described in this subsection, any policy (otherwise offered by the issuer to individuals in the State) that meets the NAIC standards and other requirements of this section without reference to this subsection. “(2) If the Secretary determines that an issuer of a policy approved under paragraph (1)— “(A) fails substantially to provide medically necessary items and services to enrollees seeking such items and services through the issuer’s network, if the failure has adversely affected (or has substantial likelihood of adversely affecting) the individual, “(B) imposes premiums on enrollees in excess of the premiums approved by the State, “(C) acts to expel an enrollee for reasons other than nonpayment of premiums, or “(D) does not provide the explanation required under paragraph (IXE)(i) or does not obtain the acknowledgment required under paragraph (l)(E)(ii), is subject to a civil money penalty in an amount not to exceed $25,000 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). (3) The Secretary may enter into a contract with an entity whose policy has been certified under paragraph (1) or has been approved by a State under subsection (b)(l)(H) to determine whether items and services (furnished to individuals entitled to benefits under this title and under that policy) are not allowable under section 1862(a)(D. Payments to the entity shall be in such amounts as the Secretary may determine, taking into account estimated savings under contracts with carriers and fiscal intermediaries and other factors that the Secretary finds appropriate. Paragraph (1), the first sentence of paragraph (2)(A), paragraph (2)(B), paragraph (3)(0, paragraph (3)(D), and paragraph (3)(E) of section 1842(b) shall apply to the entity.”. (b) Conforming Amendments.— (1) Section 1882(c)(l) (42 U.S.C. 1395ss(c)(D) is amended by inserting “(except as otherwise provided by subsection (t))” before the semicolon. 104 STAT. 1388–137 (2) Section 1882(b)(D (42 U.S.C. 1395ss(b)(D), as previously amended, is amended— (A) in subparagraph (A), by inserting “, except as otherwise provided by subparagraph (H)” before the semicolon; (B) by striking “and” at the end of subparagraph (F); (C) by inserting “and” at the end of subparagraph (G); and (D) by adding after subparagraph (G) the following: “(H) in the case of a policy that meets the standards under subparagraph (A) except that benefits under the policy are limited to items and services furnished by certain entities (or reduced benefits are provided when items or services are furnished by other entities), provides for the application of requirements equal to or more stringent than the requirements under subsection (t),”. (3) The first sentence of section 1154(a)(4)(B) (42 U.S.C. 1320c-3(a)(4)(B)) is amended by inserting “(or subject to review under section 1882(t))” after “section 1876”. (c) Effective Date.—The amendments made by this section shall only apply in 15 States (as determined by the Secretary of Health and Human Services) and only during the 3-year period beginning with 1992. (d) Evaluation.—The Secretary of Health and Human Services shall conduct an evaluation of the amendments made by this section and shall report to Congress on such evaluation by not later than January 1, 1995.