LIMITATION ON MEDICARE PART B COST-SHARING.

SEC. 201. LIMITATION ON MEDICARE PART B COST-SHARING. (a) In General.—Section 1833 (42 U.S.C. 13951) is amended— 102 STAT. 700 (1) in subsection (c)— (A) by striking “subsections (a) and (b)” and inserting “subsection (a) through (c)”, (B) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), (C) by striking “this subsection” and inserting “this paragraph”, and (D) by striking “(c)” and inserting “(d)(1)”; (2) by redesignating subsection (d) as paragraph (2); (3) in subsection (g), by striking “(a) and (b)” and inserting “(a) through (c)”; and (4) by inserting after subsection (b) the following new subsection: “(c) (1) Notwithstanding subsections (a) and (b), if an individual has incurred out-of-pocket part B cost sharing (as defined in paragraph (2)) in a calendar year (beginning with 1990) in an amount equal to the part B catastrophic limit (established under paragraph (3)) for the year, payment under this part with respect to any additional incurred expenses in the calendar year shall be made as if— “(A) the deduction described in the second sentence of subsection (b) (relating to blood) no longer applied, and “(B) ‘100 percent’ and ‘0 percent’ were substituted for ‘80 percent’ and ‘20 percent’, respectively, each place either appears in subsections (a) and (i)(2), in sections 1834(a)(1)(A), 1834(e)(1)(C), 1835(b)(2), and 1866(a)(2)(A), and in subsections (b)(2) and (b)(3) of section 1881, except as such provisions may apply to in-home care. “(2) In this subsection, the term ‘out-of-pocket part B cost sharing’ means, with respect to an individual covered under this part, the amounts of expenses that the individual incurs that are attributable “(A) the deductions established under subsection (b), and “(B) the difference between the payment amount provided under this part and the payment amount that would be provided if ‘100 percent’ and ‘0 percent’ were substituted for ‘80 percent’ and ‘20 percent’, respectively, each place either appears in subsections (a) and (i)(2), in sections 1834(a)(1)(A), 1834(e)(1)(C), 1835(b)(2), and 1866(a)(2)(A), and in subsections (b)(2) and (b)(3) of section 1881. “(3) (A) The part B catastrophic limit for 1990 is $1,370. The part B catastrophic limit for any succeeding year shall be such an amount (rounded to the nearest multiple of $1) as the Secretary estimates will result, in that succeeding year, in 7 percent of the average number of individuals enrolled under this part (other than individuals enrolled with an eligible organization under section 1876 or an organization described in subsection (a)(1)(A)) during the year becoming entitled to benefits under this subsection. “(B) Not later than September 1 of each year (beginning with 1990), the Secretary shall promulgate the part B catastrophic limit under this paragraph for the succeeding year. “(4) In the case of an organization receiving payment under clause (A) of subsection (a)(1) or under a reasonable cost reimbursement contract under section 1876, in applying paragraph (1), the Secretary shall provide for an appropriate adjustment in the payment amounts otherwise made to reflect the aggregate increase in payments that would otherwise be made with respect to enrollees in 102 STAT. 701such an organization if payments were made other than under such clause or such a contract on an individual-by-individual basis. “(5) (A) Except as provided in subparagraph (B), expenses incurred by a medicare beneficiary for out-of-pocket part B cost-sharing shall be counted (consistent with subparagraph (C)) whether or not, at the time the expenses were incurred, the beneficiary was enrolled in a plan under section 1833(a)(1)(A) or under section 1876. In this paragraph, with respect to a medicare beneficiary enrolled in such a plan, the term ‘out-of-pocket part B cost-sharing’ includes deductibles and coinsurance under the plan for items and services covered under this part. “(B) In the case of a medicare beneficiary enrolled in a month in a buy-out plan (as defined in subparagraph (D))— “(i) expenses incurred by the beneficiary for items and services reimbursed under the plan shall not be treated as out-of-pocket part B cost-sharing for purposes of paragraph (1), but “(ii) the beneficiary is deemed to have incurred, for each month of such enrollment, expenses for out-of-pocket part B cost-sharing in an amount equal to the actuarial value (with respect to a month in the year involved) of the deductible and coinsurance amounts under part B (as computed by the Secretary for purposes of section 1876(e)(1), other than with respect to covered outpatient drugs) applicable on the average to individuals in the United States. “(C) The Secretary may not enter into a contract with an organization under section 1876, or provide for payment under section 1833(a)(1)(A) with respect to an organization, with respect to a plan that is not a buy-out plan, unless the organization provides assurances, satisfactory to the Secretary, that— “(i) the organization will maintain and make available, for its enrollees and in coordination with the appropriate carriers under this part, an accounting of expenses incurred in each year under the plan for out-of-pocket part B cost-sharing (as defined in subparagraph (A)); and “(ii) the organization will not undertake to charge a beneficiary during a year for services for which payment may be made under this part (other than for covered outpatient drugs) after the individual has incurred (whether through the organization or otherwise) out-of-pocket part B cost sharing in the year in an amount equal to the part B catastrophic limit established under paragraph (1) for the year. “(D) In this paragraph, the term ‘buy-out plan’ means a plan under section 1833(a)(1)(A) or offered by an organization under section 1876 and with respect to which— “(i) the actuarial value of the coinsurance and deductibles under the plan with respect to benefits (other than covered outpatient drugs) under this title (as determined by the Secretary), is less than 50 percent of— “(ii) the actuarial value of the coinsurance and deductibles for such benefits for all medicare beneficiaries (as determined by the Secretary) applicable on the average to individuals in the United States. “(E) In this subsection, the term ‘medicare beneficiary’ means, with respect to a month, an individual covered for benefits under this part for the month.”. 102 STAT. 702 (b) Limitation on Charges When Catastrophic Limit Reached.—Section 1866(a)(2)(A) (42 U.S.C. 1395cc(a)(2)(A)) is amended by adding at the end the following new sentence: “A provider of services may not impose a charge under the first sentence of this subparagraph for services for which payment is made to the provider pursuant to section 1833(c) (relating to catastrophic benefits).”. (c) Notice for Beneficiaries Reaching Catastrophic Limit.—Section 1842(b)(3) (42 U.S.C. 1395u(b)(3)) is amended– (1) by striking “and” at the end of subparagraph (G), (2) by inserting “and” at the end of subparagraph (H), and (3) by inserting after subparagraph (H) the following new subparagraph: “(I) will provide each individual, who is determined to have incurred (or has had paid on the individual’s behalf) sufficient out-of-pocket part B cost sharing in a calendar year to qualify for payment for additional incurred expenses to be made pursuant to section 1833(c), with a notice that states that the individual has reached the part B catastrophic limit on out-of-pocket cost sharing for the year;”. (d) Conforming Amendment.—The second sentence of section 1866(a)(2)(A) (42 U.S.C. 1395cc(a)(2)(A)) is amended by striking “1833(c)” and inserting “1833(d)(1)”.