TRANSITIONAL RULES FOR CURRENT MEDICARE HMO PROGRAM.

SEC. 4002. TRANSITIONAL RULES FOR CURRENT MEDICARE HMO PROGRAM. (a) Authorizing Transitional Waiver of 50:50 Rule.—Section 1876(f) (42 U.S.C. 1395mm(f)) is amended— (1) in paragraph (1)— (A) by striking “Each” and inserting “For contract periods beginning before January 1, 1999, each”; and (B) by striking “or under a State plan approved under title XIX”; (2) in paragraph (2), by striking “The Secretary” and inserting “Subject to paragraph (4), the Secretary”, and (3) by adding at the end the following: “(4) Effective for contract periods beginning after December 31, 1996, the Secretary may waive or modify the requirement imposed by paragraph (1) to the extent the Secretary finds that it is in the public interest.”. (b) Transition.— (1) Risk-sharing contracts.—Section 1876 (42 U.S.C. 1395mm) is amended by adding at the end the following new subsections: “(k)(1) Except as provided in paragraph (2)— “(A) on or after the date standards for Medicare+Choice organizations and plans are first established under section 1856(b)(1), the Secretary shall not enter into any risk-sharing contract under this section with an eligible organization; and “(B) for any contract year beginning on or after January 1, 1999, the Secretary shall not renew any such contract. “(2) An individual who is enrolled in part B only and is enrolled in an eligible organization with a risk-sharing contract under this section on December 31, 1998, may continue enrollment in such organization in accordance with regulations described in section 1856(b)(1). “(3) Notwithstanding subsection (a), the Secretary shall provide that payment amounts under risk-sharing contracts under this section for months in a year (beginning with January 1998) shall be computed— “(A) with respect to individuals entitled to benefits under both parts A and B, by substituting payment rates under section 1853(a) for the payment rates otherwise established under section 1876(a), and “(B) with respect to individuals only entitled to benefits under part B, by substituting an appropriate proportion of such rates (reflecting the relative proportion of payments under this title attributable to such part) for the payment rates otherwise established under subsection (a). “(4) The following requirements shall apply to eligible organizations with risk-sharing contracts under this section in the same manner as they apply to Medicare+Choice organizations under part C: “(A) Data collection requirements under section 1853(a)(3)(B). “(B) Restrictions on imposition of premium taxes under section 1854(g) in relating to payments to such organizations under this section. “(C) The requirement to accept enrollment of new enrollees during November 1998 under section 1851(e)(6). “(D) Payments under section 1857(e)(2).”.111 STAT. 329 (2) Reasonable cost contracts.— (A) Phase out of contracts.—Section 1876(h) (42 U.S.C. 1395mm(h)) is amended by adding at the end the following: “(5)(A) After the date of the enactment of this paragraph, the Secretary may not enter into a reasonable cost reimbursement contract under this subsection (if the contract is not in effect as of such date), except for a contract with an eligible organization which, immediately previous to entering into such contract, had an agreement in effect under section 1833(a)(1)(A). “(B) The Secretary may not extend or renew a reasonable cost reimbursement contract under this subsection for any period beyond December 31, 2002.”. (B) Report on impact.—By not later than January 1, 2001, the Secretary of Health and Human Services shall submit to Congress a report that analyzes the potential impact of termination of reasonable cost reimbursement contracts, pursuant to the amendment made by subparagraph (A), on medicare beneficiaries enrolled under such contracts and on the medicare program. The report shall include such recommendations regarding any extension or transition with respect to such contracts as the Secretary deems appropriate. (c) Enrollment Transition Rule.—An individual who is enrolled on December 31, 1998, with an eligible organization under section 1876 of the Social Security Act (42 U.S.C. 1395mm) shall be considered to be enrolled with that organization on January 1, 1999, under part C of title XVIII of such Act if that organization has a contract under that part for providing services on January 1, 1999 (unless the individual has disenrolled effective on that date). (d) Advance Directives.—Section 1866(f) (42 U.S.C. 1395cc(f)) is amended— (1) in paragraph (1)— (A) by inserting “1855(i),” after “1833(e),”, and (B) by inserting “, Medicare+Choice organization,” after “provider of services”; and (2) in paragraph (2)(E), by inserting “or a Medicare+Choice organization” after “section 1833(a)(1)(A)”. (e) Extension of Provider Requirement.—Section 1866(a)(1)(O) (42 U.S.C. 1395cc(a)(1)(O)) is amended— (1) by striking “in the case of hospitals and skilled nursing facilities”; (2) by striking “inpatient hospital and extended care”; (3) by inserting “with a Medicare+Choice organization under part C or” after “any individual enrolled”; (4) by striking “(in the case of hospitals) or limits (in the case of skilled nursing facilities)”; and (5) by inserting “(less any payments under sections 1886(d)(11) and 1886(h)(3)(D))” after “under this title”. (f) Additional Conforming Changes.— (1) Conforming references to previous part c.—Any reference in law (in effect before the date of the enactment of this Act) to part C of title XVIII of the Social Security Act is deemed a reference to part D of such title (as in effect after such date).111 STAT. 330 (2) Secretarial submission of legislative proposal.—Not later than 6 months after the date of the enactment of this Act, the Secretary of Health and Human Services shall submit to the appropriate committees of Congress a legislative proposal providing for such technical and conforming amendments in the law as are required by the provisions of this chapter. (g) Immediate Effective Date for Certain Requirements for Demonstrations.—Section 1857(e)(2) of the Social Security Act (requiring contribution to certain costs related to the enrollment process comparative materials) applies to demonstrations with respect to which enrollment is effected or coordinated under section 1851 of such Act. (h) Transition Rule for PSO Enrollment.—In applying subsection (g)(1) of section 1876 of the Social Security Act (42 U.S.C. 1395mm) to a risk-sharing contract entered into with an eligible organization that is a provider-sponsored organization (as denned in section 1855(d)(1) of such Act, as inserted by section 5001) for a contract year beginning on or after January 1, 1998, there shall be substituted for the minimum number of enrollees provided under such section the minimum number of enrollees permitted under section 1857(b)(1) of such Act (as so inserted). (i) Publication of New Capitation Rates.—Not later than 4 weeks after the date of the enactment of this Act, the Secretary of Health and Human Services shall announce the annual Medicare+Choice capitation rates for 1998 under section 1853(b) of the Social Security Act. (j) Elimination of Health Care Prepayment Plan Option for Entities Eligible to Participate as Managed Care Organization.— (1) Elimination of option.— (A) In general.—Section 1833(a)(1)(A) (42 U.S.C. 13951(a)(1)(A)) is amended by inserting “(and either is sponsored by a union or employer, or does not provide, or arrange for the provision of, any inpatient hospital services)” after “prepayment basis”. (B) Effective date.—The amendment made by subparagraph (A) applies to new contracts entered into after the date of enactment of this Act and, with respect to contracts in effect as of such date, shall apply to payment for services furnished after December 31, 1998. (2) Medigap conforming amendment.—Effective January 1, 1999, section 1882(g)(1) (42 U.S.C. 1395ss(g)(D) is amended by striking “, during the period beginning on the date specified in subsection (p)(1)(C) and ending on December 31, 1995,”.