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deems to be fair and equitable taking into consideration benefits attributable to such parts A and B, respectively. (6) During any period in which an individual is enrolled with an eligible organization conducting a demonstration project under this section, only the eligible organization (and no other individual or person) shall be entitled to receive payments from the Secretary under this title for community nursing and ambulatory care (as defined in subsection (b)(1)) furnished to the individual. (e) RESTRICTION ON PREMIUMS, DEDUCTIBLES, COPAYMENTS, AND COINSURANCE.—

(1) In no case may the portion of an eligible organization's premium rate and the actuarial value of its deductibles, coinsurance, and copayments charged (with respect to community nursing and ambulatory care) to individuals who are enrolled under this section with the organization, exceed the actuarial value of the coinsurance and deductibles that would be applicable on the average to individuals enrolled under this section with the organization (or, if the Secretary finds that adequate data are not available to determine that actuarial value, the actuarial value of the coinsurance and deductibles applicable on the average to individuals in the area, in the State, or in the United States, eligible to enroll under this section with the organization, or other appropriate data) and entitled to benefits under part A and enrolled under part B of the Social Security Act, if they were not members of an eligible organization. (2) If the eligible organization provides to its members enrolled under this section services in addition to community nursing and ambulatory care, election of coverage for such additional services shall be optional for such members and such organization shall furnish such members with information on the portion of its premium rate or other charges applicable to such additional services. In no case may the sum of^ (A) the pwrtion of such organization's premium rate charged, with respect to such additional services, to mem#iJis» bers enrolled under this section, and (B) the actuarial value of its deductibles, coinsurance, and '^^ Scopayments charged, with respect to such services to such members exceed the adjusted community rate for such services (as defined in section 1876(e)(3) of the Social Security Act). (3)(A) Subject to subparagraphs (B) and (C), each agreement to conduct a demonstration project under this section shall provide that if— (i) the adjusted community rate, referred to in paragraph (2), for community nursing and ambulatory care covered - '^ under parts A and B of title XVIII of the Social Security Act (as reduced for the actuarial value of the coinsurance and deductibles under those parts) for members enrolled under this section with the organization, is less than (ii) the average of the per capita rates of payment to be made under subsection (d)(1) at the beginning of the 12month period (as determined on such basis as the Secretary determines appropriate) described in such subsection for members enrolled under this section with the organization.

^,^ ^ ^ ^

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Contracts.

PUBLIC LAW 100-203—DEC. 22, 1987

the eligible organization shall provide to such members the additional benefits described in section 1876(g)(3) of the Social Security Act which are selected by the eligible organization and which the Secretary finds are at least equal in value to the difference between that average per capita payment and the adjusted community rate (as so reduced). (B) Subparagraph (A) shall not apply with respect to any organization which elects to receive a lesser payment to the extent that there is no longer a difference between the average per capita payment and adjusted community rate (as so reduced). (C) An organization conducting a demonstration project under this section may provide (with the approval of the Secretary) that a part of the value of such additional benefits under subparagraph (A) be withheld and reserved by the Secretary as provided in section 1876(g)(5) of the Social Security Act. (4) The provisions of paragraphs (3), (5), and (6) of section 1876(g) of the Social Security Act shall apply in the same manner to agreements under this section as they apply to risksharing contracts under section 1876 of such Act, and, for this purpose, any reference in such paragraphs to paragraph (2) is deemed a reference to paragraph (3) of this subsection. (5) Section 1876(e)(4) of the Social Security Act shall apply to eligible organizations under this section in the same manner as it applies to eligible organizations under section 1876 of such Act. (f) COMMENCEMENT AND DURATION OF PROJECTS.—Each demonstration project under this section shall begin not later than July 1, 1989, and shall be conducted for a period of three years. (g) REPORT.—Not later than January 1, 1992, the Secretary shall submit to the Congress a report on the results of the demonstration projects conducted under this section. SEC. 4080. PART B PREMIUM.

Section 1839 of the Social Security Act (42 U.S.C. 1395r) is amended— (1) in subsection (e), by striking "1989" each place it appears and inserting in lieu thereof "1990"; (2) in subsection (0(1), by striking "or 1987" and inserting in lieu thereof "1987, or 1988"; and (3) in subsection (fK2), by striking "or 1988" and inserting in lieu thereof "1988, or 1989".

Subpart D—Other Provisions SEC. 4081. SUBMISSION OF CLAIMS TO SUPPLEMENTAL INSURANCE CARRIERS.

(a) IN GENERAL.—Section 1842(h)(3) of the Social Security Act (42 U.S.C. 1395u(h)(3)) is amended by inserting "(A)" after "(3)" and by adding at the end the following new subparagraph: "(B) The Secretary shall establish a procedure whereby an individual enrolled under this part may assign, in an appropriate manner on the form claiming a benefit under this part for an item or service furnished by a participating physician or supplier, the individual's rights of payment under a medicare supplemental policy (described in section 1882(g)(l)) in which the individual is enrolled. In the case such an assignment is properly executed and a claims determination

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is made by a carrier with a contract under this section, the carrier shall transmit to the private entity issuing the medicare supplemental policy notice of such fact and including such information as the Secretary determines is generally provided to enable the entity to decide whether (and the amount of) any payment is due under the policy. The Secretary may enter into arrangements for the transmittal of such information to entities electronically. The Secretary shall impose user fees for the transmittal of information under this subparagraph, whether electronically or otherwise.". (b) MEDIGAP POLICY STANDARDS.—Section 1882 of such Act (42 U.S.C. 1395ss) is amended— (1) in subsection (b)(D— (A) by amending subparagraph (B) to read as follows: "(B) includes requirements equal to or more stringent than ' the requirements described in paragraphs (2) and (3) of subsection (c);", ~c and new subparagraph: "(D) provides the Secretary periodically (but at least annually) with a list containing the name and address of the issuer of each such policy and the name and number of each such policy (including an indication of policies that have been previously approved, newly approved, or withdrawn from approval since the previous list was provided),"; (2) in subsection (c)— ' (A) by striking "and" at the end of paragraph (1), (B) by striking the period at the end of paragraph (2) and inserting "; and ', and (C) by inserting after paragraph (2) the following new paragraph: "(3)(A) accepts a notice under section 1842(h)(3)(B) as a claims form for benefits under such policy in lieu of any claims form otherwise required and agrees to make a payment determination on the basis of the information contained in such claims form; "(B) where such a notice is received— "(i) provides notice to such physician or supplier and the beneficiary of the payment determination, and "(ii) provides any appropriate payment directly to the { participating physician or supplier involved; "(C) provides each enrollee at the time of enrollment a card listing the policy name and number and a single mailing address to which notices under section 1842(h)(3)(B) respecting the policy are to be sent; "(D) agrees to pay any user fees established under section 1842(h)(3)(B) with respect to information transmitted to the issuer of the policy; and "(E) provides to the Secretary at least annually, for transmittal to carriers, a single mailing address to which notices under section 1842(h)(3)(B) respecting the policy are to be sent.". (c) EFFECTIVE DATES.—(1) The amendment made by subsection (a) Contracts. shall apply to contracts with carriers for clsiims for items and 42 USC I395u
 * 3 (B) by adding "and" at the end of subparagraph (C),
 * ^ (C) by inserting after subparagraph (C) the following
 * ' Paragraphs (B) and (C) were indented wrong.

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 101 STAT. 1330-128

42 USC 1395SS note.

PUBLIC LAW 100-203—DEC. 22, 1987

services furnished by participating physicians and suppliers on or after January 1, 1989. (2)(A) The amendments made by subsection (b) shall apply to medicare supplemental policies as of January 1, 1989 (or, if applicable, the date established under subparagraph (B)). (B) In the case of a State which the Secretary of Health and Human Services identifies as— (i) requiring State legislation (other than legislation appropriating funds) in order for medical supplemental policies to be i changed to meet the requirements of section 1882(c)(3) of the Social Security Act, and (ii) having a legislature which is not scheduled to meet in 1988 in a legislative session in which such legislation may be considered, the date specified in this subparagraph is the first day of the first calendar quarter beginning after the close of the first legislative session of the State legislature that begins on or after January 1, 1989, and in which legislation described in clause (i) may be considered. SEC. 4082. REVISION OF PART B HEARINGS.

(a) CLARIFICATION OF O B R A AMENDMENT.—Section 1869(b)(3)(B) of the Social Security Act (42 U.S.C. 1395ff(b)(3)(B)) is amended *^ by striking "chapter 5" and inserting "section 553". (b) EXPEDITED ADMINISTRATIVE HEARING WHERE ONLY ISSUES OF

LAW.—Section 1869(b) of such Act (42 U.S.C. 1395ffrb)) is amended by adding at the end the following new paragraph: "(5) In an administrative hearing pursuant to paragraph (1), where the moving party alleges that there are no material issues of fact in dispute, the administrative law judge shall make an expedited determination as to whether any such facts are in dispute and, if not, shall determine the case expeditiously.". (c) TIMELY CARRIER HEARINGS ON PART B APPEALS.—Section

42 USC 1395u note.

Reports.

42 USC 1395ff note.

1842(b)(5) of such Act (42 U.S.C. 1395u(b)(5)) is amended— (1) by inserting "(A)" after "(5)", and (2) by adding at the end the following new subparagraph: "(B) The Secretary shall establish standards for evaluating carriers' performance of reviews of initial carrier determinations and of fair hearings under paragraph (3)(C), under which a carrier is expected— "(i) to complete such reviews, within 45 days after the date of a request by an individual enrolled under this part for such a '' review, in 95 percent of such requests, and "(ii) to make a final determination, within 120 days after the date of receipt of a request by an individual enrolled under this part for a fair hearing under paragraph (3)(C), in 90 percent of such cases.". (d) GAO STUDY.—The Comptroller General shall conduct a study concerning the cost effectiveness of requiring hearings with a carrier under part B of title XVIII of the Social Security Act before having a hearing before an administrative law judge respecting carrier determinations under that part. The Comptroller General shall report to the Congress on the results of such study by not later than June 30, 1989. (e) EFFECTIVE DATES.—(1) The amendment made by subsection (a) shall take effect on the date of the enactment of this Act. 'Copy read "is amended is amended".

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(2) The amendment made by subsection (b) shall apply to requests for hearings filed after the end of the 60-day period beginning on the date of the enactment of this Act. (3) The amendments made by subsection (c) shall apply to evalua- 42 USC 1395u tion of performance of carriers under contracts entered into or note. renewed on or after October 1, 1988. SEC. 4083. PROVISIONS RELATING TO PHYSICIAN PAYMENT REVIEW COMMISSION. (a) REVISION OF APPOINTMENT PROCESS FOR THE PHYSICIAN PAYMENT REVIEW COMMISSION.—

(1) IN GENERAL.—Section 1845(a) of the Social *^^ Security Act (42 U.S.C. 1395w-l(a)(3)) is amended— .J, (A) in paragraph (1), by striking "with expertise in the provision and financing of physicians' services" and insert>0: ing "with national recognition for their expertise in health economics, physician reimbursement, medical practice, and other related fields"; and (B) in paragraph (3), by striking the Isist sentence. (2) EFFECTIVE DATE.—The amendment made by paragraph (1) 42 USC 1395W-1 shall apply to appointments made after the date of the enact- note. ment of this Act. (b) TREATMENT OF EMPLOYEES FOR CERTAIN PURPOSES.—

(1) IN ** GENERAL.—Section 1886(e)(6)(D) of the Social Security Act (42 U.S.C. 1395ww(e)(6)(D)) is amended by adding at the end the following: "For purposes of pay (other than pay of members of the Commission) and employment benefits, rights, and privileges, all personnel of the Commission shall be treated as if they were employees of the United States Senate.". (2) EFFECTIVE DATE.—The amendments made by paragraph (1) 42 USC 1395WW shall take effect on the date of the enactment of this Act. note. (c) CHANGE IN DATE FOR ANNUAL REPORT OF PHYSICIAN PAYMENT REVIEW COMMISSION.—

(1) Section 1845(b)(l) of such Act (42 U.S.C. 1395w-l(b)(l)) is -i amended by striking "March 1" and inserting "March 31". ^d:^ (2) The amendment made by paragraph (1) shall apply with 42 USC 1395W-1 note. respect to reports for years after 1987. SEC. 4084. TECHNICAL AMENDMENTS RELATED TO CERTIFIED REGISTERED NURSE ANESTHETISTS.

(a) IN GENERAL.—Section 1833(1) of the Social Security Act (42 U.S.C. 13951(1)), as added by section 9320(e) of the Omnibus Budget Reconciliation Act of 1986, is amended— (1) in paragraph (2), by striking "1985" and inserting "1985 and such other data as the Secretary determines necessary"; and (2) in paragraph (5)(A), by striking "or group practice" each place it appears and inserting "group practice, or ambulatory surgical center". 0)) EFFECTIVE DATE.—The amendments made by subsection (a) 42 USC 1395/ shall apply as if included in the amendment made by section note. 9320(e)(2) of the Omnibus Budget Reconciliation Act of 1986. '•^''Copy read "of Social".
 * Copyread"General.".

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SEC. 4085. MISCELLANEOUS AND TECHNICAL PROVISIONS. (a) PROMPT SUBMITTAL OF DATA BY SECRETARY.—Section 1845

of

the Social Security Act (42 U.S.C. 1395w-l) is amended by adding at the end the following new subsection: "(f)(1) Not later than October 1st of each year (beginning with 1988), the Secretary shall transmit to the Physician Payment Review Commission, to the Congressional Budget Office, and to the Congressional Research Service of the Library of Congress national data (known as the Part B Medicare Annual Data System) for the previous year respecting part B of this title. "(2) In order to ensure that the data are available for transmittal under paragraph (1) on a timely basis, the Secretary shall require, in the standards and criteria established under section 1842(b)(2), that carriers submit data for a year under the system referred to in paragraph (1) not later than July 1st of the following year. "(3) The Secretary, in consultation with the Physician Payment Review Commission, the Congressional Budget Office, and the Congressional Research Service of the Library of Congress, shall establish and annually revise standards for the data reporting system described in paragraph (1). "(4) The Secretary shall also provide to the entities described in paragraph (1) additional data respecting the program under this part as may be reasonably requested by them on an agreed-upon schedule. "(5) The Secretary shall develop, in consultation with the Physician Payment Review Commission, the Congressional Budget Office, and the Congressional Research Service of the Library of Congress, a system for providing to each of such entities on a quarterly basis summary data on aggregate expenditures under this part by type of service and by type of provider. Such data shall be provided not later than 90 days after the end of each quarter (for quarters beginning with the calendar quarter ending on March 31, 1989).". (b) CLARIFICATION OF PENALTIES FOR UNASSIGNED LABORATORY SERVICES.—

42 USC 1395/ note.

(1) IN GENERAL.—Section 1833(h)(5) of the Social Security Act (42 U.S.C. 13951(h)(5)) is amended by adding at the end the following new subparagraph: "(D) If a person knowingly and willfully and on a repeated basis bills an individual enrolled under this part for charges for a clinical diagnostic laboratory test for which payment may only be made on an assignment-related basis under subparagraph (C), the Secretary may apply sanctions against the person in the same manner as the Secretary may apply sanctions against a physician in accordance with section 1842(j)(2).". (2) EFFECTIVE DATE.—The amendment made by paragraph (1) shall apply to procedures performed on or after January 1, 1988. (c) EXTENSION OF MORATORIUM ON LABORATORY PAYMENT DEM-

42 USC 1395WW note.

ONSTRATION.—Section 9204(a) of the Consolidated Omnibus Budget Reconciliation Act of 1985, as amended by section 9339(e) of the Omnibus Budget Reconciliation Act of 1986, is amended by striking "January 1, 1988" and inserting "January 1, 1989". (d) PROMPT PAYMENT FOR HABIUTATION FACILITIES.—

COMPREHENSIVE OUTPATIENT

RE-

(1) Section 1816(c)(2)(C) of the Social Security Act (42 U.S.C. 1395h(c)(2)(C)) is amended by striking "or hospice program" and

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101 STAT. 1330-131

inserting "hospice program, comprehensive outpatient rehabilitation facility, or rehabilitation agency". (2)(A) The amendment made by paragraph (1) shall apply to 42 USC 1395h claims received on or after the date of enactment of this Act. note. (B) The Secretary of Health and Human Services shall provide for such timely amendments to agreements under section 1816, and regulations, to such extent as may be necessary to implement the amendment made by paragraph (1). (e) CAPACITY TO ** SET GEOGRAPHIC PAYMENT LIMITS.—The Sec- 42 USC 1395u retary of Health and Human Services shall develop the capability to note. implement (for services furnished on or after January 1, 1989) geographic limits on charges and payments under part B of title XVIII of the Social Security Act for physicians* services based on statewide, regional, or national average (or percentile in a distribution) of prevailing charges or payment amounts (weighted by frequency of services). Any such limits shall take into account adjustments for geographic differences in cost of practice and cost of living. (f) DELAY IN EFFECTIVE DATE FOR ESTABLISHING PHYSICIAN IDENTI-

FIER SYSTEM.—Section 9202(g) of the Consolidated Omnibus Budget Reconciliation Act of 1985 is amended by striking "July 1, 1987" and 42 USC 1395WW note. inserting "October 1, 1988". (g) DATE FOR APPLYING CIVIL PENAUTIES FOR IMPROPER USE OF ASSISTANTS IN PERFORMING CATARACT SURGERY.—

(1) Section 1842(k) of the Social Security Act (42 U.S.C., 1395u(k)) is amended in paragraphs (1) and (2) by striking "(j)(2)" each place it appears and inserting "(j)(2) in the case of ^i. surgery performed on or after March 1, 1987". (2) The amendment made by paragraph (1) shall be effective 42 USC 1395u as if included in section 9307(c) of the Consolidated Omnibus note. Budget Reconciliation Act of 1985. (h) UTIUZATION SCREENS FOR PHYSICIAN SERVICES PROVIDED TO PATIENTS IN REHABIUTATION HOSPITALS.—

(1) The Secretary of Health and Human Services shall establish (in consultation with appropriate physician groups, including those representing rehabilitative medicine) a separate utilization screen for physician visits to patients in rehabilitation hospitals and rehabilitative units (and patients in long-term care hospitals receiving rehabilitation services) to be used by carriers under section 1842 of the Social Security Act in performing functions under subsection (a) of such section related to the utilization practices of physicians in such hospitals and units. (2) Not later than 12 months after the date of enactment of this Act, the Secretary of Health and Human Services shall take appropriate steps to implement the utilization screen established under paragraph (1). (i) TECHNICAL AMENDMENTS.—

(1) Section 1833(a) of the Social Security Act (42 U.S.C. 13951(a)) is amended— (A) in paragraphs dXDXi) and (2)(D)(i), by striking, "on the basis of an assignment described in section 1842(b)(3)(B)(ii), under the procedure described in section 1870(f)(1)," and inserting "on an assignment-related basis";
 * ' Copy read "TO".

42 USC 1395u note.

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PUBLIC LAW 100-203—DEC. 22, 1987

i,.;

ddt?. oai? ti=

iic^ir.fj

> -'"

„.rv,.p^ ' " "^Q

.,,,,^. ••' •" ''^; bCfi^.

(B) in paragraph (1), by striking "and" before "(G)"; and (C) in subsection (b)(3)(A), by striking "on the basis of an assignment described in section 1842(b)(3)(B)(ii), under the procedure described in section 1870(f)(1)" and inserting "on an assignment-related basis". (2) Section 1833(h)(1)(C) of such Act (42 U.S.C. 13951(h)(1)(C)) is C amended by inserting before the period the following: ", and i ending on December 31, 1989. For such tests furnished on or .., after January 1, 1990, the fee schedule shall be established on a nationwide basis". (3) Section 1833(h)(5)(A) of such Act (42 U.S.C. 13951(h)(5)(A)) is amended by striking "and" at the end of clause (i), by striking the period at the end of clause (ii) and inserting ", and", and by adding at the end the following new clause: "(iii) in the case of a clinical diagnostic laboratory test provided under an arrangement (as defined in section 1861(w)(l)) made by a hospital, payment shall be made to the hospital.". (4) Section 1835(a)(2)(C) of such Act (42 U.S.C. 1395n(a)(2)(C)) is . amended by striking the second comma at the end of clause (i). (5) Section 1842(b)(3)(C) of such Act (42 U.S.C. 1395u(b)(3)(C)) is amended by striking "not more than" and inserting "less than". (6) Section 1842(h)(5) of such Act (42 U.S.C. 1395u(h)(5)) is ,^ amended by striking "the" before "participation". (7) Effective as if included in the enactment of the Omnibus Budget Reconciliation Act of 1986, section 1842(j)(l) of the Social Security Act (42 U.S.C. 1395u(j)(l)) is amended— (A) in subparagraph (C)(i), by inserting "maximum allowable" after "If the physician's, (B) in subparagraph (C)(v), by striking "1987" and insert' ing *« "1986^', and (C) by adding at the end of subparagraph (C) the following new clause: '•• "(vii) In the case of a nonparticipating physician who was a participating physician during a previous period, for the purpose of computing the physician's maximum allowable actual charge during the physician's period of nonparticipation, the physician shall be deemed to have had a maximum allowable actual charge during the period of participation, and such deemed maximum allowable actual charge shall be determined accordingly to clauses (i) through (vi).". (8) Paragraph (4) of section 1845(e) of the Social Security Act (42 U.S.C. 1395w-l(e)) is amended by moving the alignment of each of its provisions (including any clauses therein) 2 ems to 8 the left. (9) Section 1861(b)(4) of such Act (42 U.S.C. 1395x(b)(4)) is amended by striking the comma before "anesthesia" and inserting "and" and by striking "certified" the second place it appears. (10) The heading of subsection (g) of section 1861 of such Act (42 U.S.C. 1395x) is amended to read as follows: "Outpatient Occupational Therapy Services". ff

(11) Section 1861(s) of such Act (42 U.S.C. 1395x(s)), as amended by section 9367(a) of this Act, is amended by striking "which—" before paragraph (15) and all that follows through

 * ' Copy read "insert".

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the end of paragraph (16) and inserting the following: "which would not be included under subsection (b) if it were furnished to an inpatient of a hospital.". (12) Section 1861(v)(5)(A) of such Act (42 U.S.C. 1395x(v)(5)(A)) is amended by striking "section 1861(p)" and "section 1861(g)" and inserting "subsection (p)" and "subsection (g)", respectively. (13) The heading of subsection (bb) of section 1861 of such Act (42 U.S.C. 1395x) is amended to read as follows: ., "Services of a Certified Registered Nurse Anesthetist".

XMiii C>&Jti

(14) The heading of subsection (ee) of section 1861 of such Act (42 U.S.C. 1395x) is amended to read as follows: "Discharge Planning Process". (15) Section 1862(a)(l)(A) of such Act (42 U.S.C. 1395y(a)(l)(A)) is amended by striking "or (D)" and inserting "(D), or (E)". (16) Section 1862(a)(14) of such Act (42 U.S.C. 1395y(a)(14)) is amended by striking "an patient" and inserting "a patient". (17) Effective as if included in the enactment of the Omnibus Budget Reconciliation Act of 1986, section 1866(g) of the Social Security Act (42 U.S.C. 1395cc(g)) is amended by striking "for a hospital outpatient service" and all that follows through "subsection (a)(l)(H)" and inserting "inconsistent with an arrangement under subsection (a)(l)(H) or in violation of the requirement for such an arrangement". (18) Section 1869(a) of the Social Security Act (42 U.S.C. 1395ffl[a)) is amended by inserting "or a claim for benefits with respect to home health services under part B" before "shall". (19) Section 1869(b)(2) of such Act (42 U.S.C. 1395ffGt)X2)) is amended by inserting "and (I)(D)" after "paragraph (I)(C)" each place it appears. (20) Section 1875(c)(3)(B) of such Act (42 U.S.C. 139511(c)(3)(B)) is amended by striking "years 1987" and inserting "year 1987". (21) Effective as if included in the enactment of the Omnibus Budget Reconciliation Act of 1986— (A) section 9313(d)(3) of such Act is amended by striking "2 years after the date of the enactment of this Act" and inserting "January 1, 1990"; (B) section 9332(a)(3) of such Act is amended by inserting before the period at the end the following: "or in increasing the proportion of total payments for physicians' services which are payments for such services rendered by participating physicians"; (C) section 9335(j)(2) of such Act is amended by inserting before the period at the end the following: "except that, until network administrative organizations are established under section 1881(c)(l)(A) of the Social Security Act (as amended by subsection (d)(1) of this section), the distribution of payments described in the leist sentence of section 1881(b)(7) of such Act shall be made based on the distribution of payments under section 1881 of such Act to network administrative organizations for fiscal year 1986"; and (D) section 9343 of such Act is amended— (i) amending subparagraph (A) of subsection (e)(2) to read as follows:

42 USC 1395// note. 42 USC 1395u note.

42 USC 1395rr note.

42 USC 1395/.

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 101 STAT. 1330-134

42 USC 1395/ note.

42 USC 1395/ note.

PUBLIC LAW 100-203—DEC. 22, 1987

"(2)(A) Section 1833 (42 U.S.C. 13951) is amended— "(i) in subsection (a)(l)(F), by striking '(i)(3)' and inserting '(i)(4y,and "(ii) in subsection (b)(3), by striking 'or under subsection (i)(2)or(i)(4)'."; (ii) in subsection (h)(2), by striking "(d)" and inserting "(c)" and by adding at the end the following: "The amendments made by subsection (c) shall apply to services furnished after June 30, 1987."; and (iii) in subsection (h)(4), by striking "(c)" and inserting "(d)". PART 4—PEER REVIEW ORGANIZATIONS

42 USC 1320C-2 note.

SEC. 4091. CONTRACT PROVISIONS. (a) EXTENSIONS OF PEER REVIEW CONTRACT PERIOD.— (1) ONE-TIME EXTENSIONS TO PERMIT STAGGERING OF EXPIRA-

TION DATES.—

(A) IN GENERAL.—In order to permit the Secretary of Health and Human Services an adequate time to complete contract renewal negotiations with utilization and quality control peer review organizations under part B of title XI of the Social Security Act and to provide for a staggered period of contract expiration dates, notwithstanding section 1153(c) of such Act, the Secretary may provide for extensions of existing contracts, but the total of such extensions may not exceed 24 months for any contract. (B) EFFECTIVE DATE,—The amendment made by subparagraph (A) shall apply to renewals occurring on or after the date of the enactment of this Act. (2) 3"YEAR CONTRACT PERIOD.—"

42 USC 1320C-2 note.

(A) Section 1153(c)(3) of such Act (42 U.S.C. 1320c-2(c)(3)) is amended by striking "two" and "biennial" and inserting "three" and "triennial", respectively. (B) The amendment made by subparagraph (A) shall apply with respect to contracts entered into or renewed on or after the date of the enactment of this Act. (b) CONTRACT REQUIREMENTS.—

(1) Section 1153 of the Social Security Act (42 U.S.C. 1320c-2) is amended by adding at the end the following new subsection: Federal Register, "(h)(1) The Secretary shall publish in the Federal Register any publication. new policy or procedure adopted by the Secretary that affects substantially the performance of contract obligations under this section not less than 30 days before the date on which such policy or procedure is to take effect. This paragraph shall not apply to the extent it is inconsistent with a statutory deadline. Federal Register, "(2) The Secretary shall publish in the Federal Register the publication. general criteria and standards used for evaluating the efficient and effective performance of contract obligations under this section and shall provide opportunity for public comment with respect to such criteria and standards. "(3) The Secretary shall regularly furnish each peer review Reports. organization with a contract under this section with a report that documents the performance of the organization in relation to the performance of other such organizations.". - ....~

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101 STAT. 1330-135

(2) Section 1153(e) of such Act (42 U.S.C. 1320c-2(e)) is amended— (A) by inserting "(1)" after "(e)"; " ? (B) by striking "Contracting" and inserting "Except as provided in paragraph (2), contracting"; and (C) by adding at the end the following new paragraph: "(2) If a peer review organization with a contract under this section is required to carry out a review function in addition to any function required to be carried out at the time the Secretary entered into or renewed the contract with the organization, the Secretary shall, before requiring such organization to carry out such additional function, negotiate the necessary contractual modifications, including modifications that provide for an appropriate adjustment (in light of the cost of such additional function) to the amount of reimbursement made to the organization.". (3) The amendments made by paragraphs (1) and (2) shall 42 USC 1320C-2 note. become effective on the date of enactment of this Act. SEC. 4092. PREFERENCE IN CONTRACTING WITH IN-STATE ORGANIZATIONS.

(a) IN GENERAL.—Section 1153 of the Social Security Act (42 U.S.C. 1320C-2), as amended by section 4091(bKl) of this part, is further amended by adding at the end the following new subsection: "(i)(1) Notwithstanding any other provision of this section, the Secretary shall not renew a contract with any organization that is not an in-State organization (as defined in paragraph (3)) unless the Secretary has first complied with the requirements of paragraph (2). "(2)(A) Not later than six months before the date on which a contract period ends with respect to an organization that is not an in-State organization, the Secretary shall publish in the Federal Register— "(i) the date on which such period ends; and "(ii) the period of time in which an in-State organization may submit a proposal for the contract ending on such date. "(B) If one or more qualified in-State organizations submits a proposal within the period of time specified under subparagraph (A)(ii), the Secretary shall not automatically renew the current contract on a noncompetitive basis, but shall provide for competition for the contract in the same manner as a new contract under subsection (b). "(3) For purposes of this subsection, an in-State organization is an organization that has its primary place of business in the State in which review will be conducted (or, which is owned by a parent corporation the headquarters of which is located in such State).". (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply with respect to contracts scheduled to be renewed on or after the first day of the eighth month to begin after the date of enactment of this Act. SEC. 4093. REQUIRING REASONABLE NOTICE AND OPPORTUNITY FOR DISCUSSION PRIOR TO DENIAL OF CLAIM.

(a) IN GENERAL.—Section 1154(a)(3) of the Social Security Act (42 U.S.C. 1320c-3(a)(3)) is amended to read as follows: "(3)(A) Subject to subparagraph (B), whenever the organization makes a determination that any health care services or items furnished or to be furnished to a patient by any practitioner or provider are disapproved, the organization shall

91-194 O - 90 - 30: QL.3 Part 2

Federal Register, publication.

42 USC 1320C-2 note.

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PUBLIC LAW 100-203—DEC. 22, 1987

gi promptly notify such patient and the agency or organization responsible for the payment of claims under title XVIII of this Act of such determination. .^^ "(B) The notification under subparagraph (A) shall not occur until 20 days after the date that the organization has— ,^. "(i) made a preliminary notification to such practitioner , or provider of such proposed determination, and V. "(ii) provided such practitioner or provider an opporKc tunity for discussion and review of the proposed determination. The discussion and review conducted under subparagraph (B)(ii) shall not affect the rights of a practitioner or provider to a formal reconsideration of a determination under this part (as provided under section 1155).". 42 USC 1320C-3 (b) EFFECTIVE DATE.—The amendment made by subsection (a) note. shall apply with respect to determinations made on or after April 1, >-r, 1988. SEC. 4094. PEER REVIEW NORMS AND EDUCATION.

Contracts.

(a) STANDARDS APPLIED BY PROS.—Section 1154(a)(6) of the Social Security Act (42 U.S.C. 1320c-3(a)(6)) is amended by adding after and below subparagraph (B) thereof the following: "As a component of the norms described in clause (i) or (ii), the organization shall take into account the special problems associated with delivering care in remote rural areas, the availability of service alternatives to inpatient hospitalization, and other appropriate factors (such as the distance from a patient's residence to the site of care, family support, availability of proximate alternative sites of care, and the patient's ability to carry jj, out necessary or prescribed self-care regimens) that could adversely affect the safety or effectiveness of treatment provided on an outpatient basis.. (b) ON-SITE REVIEW.—Section 1154(a) of such Act (42 U.S.C. 1320c-3(a)) is amended by adding at the end the following new paragraph: "(15) During each year of the contract entered into under section 1153(b), the organization shall perform significant onsite review activities, including on-site review at at least 20 percent of the rural hospitals in the organization's area.". (c) REPORTS TO PROVIDERS AND EDUCATIONAL ACTIVITIES.—

(I)(A) Section 1154(a)(6) of such Act " (42 U.S.C. 132Gc-3(a)(6)) n is amended— tf (i) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively, ^)au SI {,: (ii) by inserting "(A)" after "(6)", and ^, (iii) by adding at the end the following: ic "(B) The organization shall— "(i) offer to provide, several times each year, for a physician representing the organization to meet (at a hospital or ^1^* at a regional meeting) with medical and administrative staff of each hospital (the services of which are reviewed by g the organization) respecting the organization's review of the hospital'services for which payment may be made under title XVIII, and ' s i i V v iv|
 * "* Copy read "1154(aK6) such Act".

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"(ii) publish (not less often than annually) and distribute to providers and practitioners whose services are subject to review a report that describes the organization's findings with respect to the types of cases in which the organization has frequently determined that (I) inappropriate or unnecessary care has been provided, (II) services were rendered in an inappropriate setting, or (III) services did not meet professionally recognized standards of health care.". (B) The amendments made by subparagraph (A) shall apply to contracts under part B of title XI of the Social Security Act entered into or renewed more than 6 months after the date of the enactment of this Act. (2)(A) Section 1154(a)(4)(B) of the Social Security Act (42 U.S.C. 1320c-3(a)(4)(B)) is amended— (i) by inserting before the period at the end of the first sentence the following: "and whether individuals enrolled with an eligible organization have adequate access to health care services provided by or through such organization (as determined, in part, by a survey of individuals enrolled with the organization who have not yet used the organization to receive such services). The contract of each organization shall also provide that with respect to health care provided by a health maintenance organization or competitive medical plan under section 1876, the organization shall maintain a beneficiary outreach program designed to apprise individuals receiving care under such section of the role of the peer review system, of the rights of the individual under such system, and of the method and purposes for contacting the organization"; and (ii) by striking "previous sentence" and inserting "previous two sentences". (B) Section 1154(a)(7)(A) of such Act (42 U.S.C. 1320c3(a)(7)(A)) is amended— (i) by inserting "(i)" after "(A)", (ii) by striking the semicolon and inserting "; and", and (iii) by adding at the end thereof the following new clause: "(ii) in the case of psychiatric and physical rehabilitation 'VRx'<}ti services, make arrangements to ensure that (to the extent > possible) initial review of such services be made by a physician who is trained in psychiatry or physical rehabilitation (as appropriate).''. (C) The amendments made by this paragraph shall apply with respect to contracts entered into or renewed on or after the date of enactment of this Act.

Contracts. 42 USC 1320C-3 note.

m.

Contracts. 42 USC 1320C-3 note.

(d) PEER REVIEW EMPHASIS ON EDUCATIONAL ACTIVITIES.—

(1) Section 1153(c) of such Act (42 U.S.C. 1320c-2(c)) is amended by adding after and below paragraph (8) the following: "In evaluating the performance of utilization and quality control peer review organizations under contracts under this part, the Secretary shall place emphasis on the performance of such organizations in educating providers and practitioners (particularly those in rural areas) concerning the review process and criteria being applied by the organization.". (2) The amendment made by paragraph (1) shall apply to Contracts. contracts under part B of title XI of the Social Security Act as of 42 USC 1320C-2 note. January 1, 1988.

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 101 STAT. 1330-138 Contracts. 42 USC 1320C-5 note.

PUBLIC LAW 100-203—DEC. 22, 1987

(e) TELECOMMUNICATIONS DEMONSTRATION PROJECTS.—The Secretary of Health and Human Services shall enter into agreements with entities submitting applications under this subsection (in such form as the Secretary may provide) to establish demonstration projects to examine the feasability of requiring instruction and oversight of rural physicians, in lieu of imposing sanctions, through use of video communication between rural hospitals and teaching hospitals under this title. Under such demonstration projects, the Secretary may provide for payments to physicians consulted via video communication systems. No funds may be expended under the demonstration projects for the acquisition of capital items including computer hardware. SEC. 4095. PREEXCLUSION HEARINGS.

42 USC 1320C-5 note. 42 USC 1320C-5 note.

42 USC 1320C-5 note.

(a) IN GENERAL.—Section 11560t>) of the Social Security Act (42 U.S.C. 1320c-5(b)) is amended by adding at the end the following new paragraph: "(5) Before the Secretary may effect an exclusion under paragraph (2) in the case of a provider or practitioner located in a rural health manpower shortage area (HMSA) or in a county with a population of less than 70,000, the provider or practitioner adversely affected by the determination is entitled to a hearing before an administrative law judge (described in section 205(b)) respecting whether the provider or practitioner should be able to continue furnishing services to individuals entitled to benefits under this Act, pending completion of the administrative review procedure under paragraph (4). If the judge does not determine, by a preponderance of the evidence, that the provider or practitioner will pose a serious risk to such individuals if permitted to continue furnishing such services, the Secretary shall not effect the exclusion under paragraph (2) until the provider or practitioner has been provided reasonable notice and opportunity for an administrative hearing thereon under paragraph (4).". (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply to determinations made by the Secretary of Health and Human Services under section 1156(b) of the Social Security Act on or after the date of the enactment of this Act. (c) TRANSITION FOR CURRENT CASES.—In the case of a practitioner or person— (1) for whom a notice of determination under section 1156(b) of the Social Security Act has been provided within 365 days before the date of the enactment of this Act, (2) who has not exhausted the administrative remedies available under section 11560)X4) of such Act for review of the determination, and (3) who requests, within 90 days after the date of the enactment of this Act, a hearing established under this subsection, the Secretary of Health and Human Services shall provide for a hearing described in section 1156ft)K5) of the Social Security Act (as amended by subsection (a) of this section). (d) REDETERMINATIONS IN CERTAIN CASES.—If, in hearing under subsection (c), the judge does not determine, by a preponderance of the evidence, that the provider or practitioner will pose a serious risk to individuals entitled to benefits under title XVIII of the Social Security Act if permitted to continue or resume furnishing such services, the Secretary shall not effect the exclusion (or shall suspend the exclusion, if previously effected) under paragraph (2) of

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section 1156(b) of such Act until the provider or practitioner has been provided an administrative hearing thereon under paragraph (4) of such section, notwithstanding any failure by the provider or practitioner to request the hearing on a timely basis. (e) REPORT ON IMPROVEMENTS IN PROCEDURES FOR IMPOSING SANC-

TIONS.—Not later than one year after the date of enactment of this Act, the Secretary of Health and Human Services shall report to Congress on the improved procedures for imposing sanctions against a practitioner or person under section 1156 of the Social Security Act established through agreement by the Health Care Financing Administration, the American Association of Retired Persons, the American Medical Association, and the Office of the Inspector General in the Department of Health and Human Services. The report shall set forth such improved procedures, describe the response of physicians and providers to the procedures, assess whether the procedures effect an appropriate balance between procedural fairness and the need for ensuring quality medical care, comment on the alternative provider-patient notification procedure contained in the agreement, and recommend whether such procedures should apply to institutional providers of health care services. SEC. 4096. LIMITATION OF BENEFICIARY LIABILITY FOR SERVICES DISALLOWED BY PEER REVIEW ORGANIZATIONS. (a\ p^jii' B SERVICES.

(1) Section 1842 of the Social Security Act (42 U.S.C 1395u) is— amended— (A) in subsection (b)(3)(ii), by inserting "(and to refund amounts already collected)" after "agrees not to charge", and by striking 'and (II)" and inserting ", (II) the physician or other person furnishing such service agrees not to charge (and to refund amounts already collected) for services for which payment under this title is denied under section 1154(a)(2) by reason of a determination under section 1154(a)(l)(B), and (III)"; (B) in subsection (IXlXAXiii), by inserting "(I)" after "(iii)" and by inserting before the comma the following: "or (II) payment under this title for such services is denied under i-A^-><'<'} section 1154(a)(2) by reason of a determination under section 1154(a)(l)(B)"; and (C) in subsection (IXIXC), by inserting "in the case described in subparagraph (A)(iiiXD" after to an individual". (2) Section 1870(f) of such Act (42 U.S.C. 1395gg(f)) is amended by striking "that the reasonable charge is the full charge for the services" each place it appears and inserting "to the terms specified in subclauses (I) and (II) of section 1842(b)(3)(B)(ii) with respect to the services". (b) INDEMNIFICATION.—Section 1879(b) of such Act (42 U.S.C. 1395pp(b)) is amended— (1) in the first sentence, by striking ", subject to the deductible and coinsurance provisions of this title,", and (2) by adding at the end the following: "No item or service for which an individual is indemnified under this subsection shall be taken into account in applying any limitation on the amount of items and services for which payment may be made to or on behalf of the individual under this title.". (c) PATIENT LIABILITY FOR HOSPITAL CHARGES DURING APPEAL OF DISCHARGE NOTICE.—

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42 USC 1320C-3 "°*®-

PUBLIC LAW 100-203—DEC. 22, 1987

(1) Section 1154(e)(2) of such Act (42 U.S.C. 1320c-3(e)(2)) is '-; amended by adding at the end thereof the following: "If the ^ hospital requests such a review, it shall also notify the patient that the review has been requested.". (2) Sections 1154(e)(3)(A)(i) (42 U.S.C. 1320c-3(e)(3)(A)(i)) and 1154(e)(3)(B) (42 U.S.C. 1320c-3(e)(3)(B)) of such Act are each amended by inserting "or (2)" after "paragraph (1)". (d) EFFECTIVE DATE.—The amendments made by this section shall apply to services furnished on or after January 1, 1988. SEC. 4097. SEPARATE FUNDING LEVELS.

42 USC 1395CC "°'^-

(a) AGGREGATE FUNDING.—Section 1866(a)(l)(F)(i)(III) of the Social Security Act (42 U.S.C. 1395cc(a)(l)(F)(i)(III)) is amended— (1) by striking "1986" and inserting "1988"; and t, (2) inserting "and for any direct or administrative costs incurred as a result of review functions added with respect to a subsequent fiscal year" after "inflation". (b) PAYMENT.—Section 1866(a)(4)(C)(ii) of such Act (42 U.S.C. 1395cc(a)(4)(C)(ii)) is amended to read as follows: "(ii) shall not be less in the aggregate for a fiscal year— "(I) in the case of hospitals, than the amount specified in paragraph (IXFXiXIII), and "(II) in the case of facilities and agencies, than the £i (i;,amounts the Secretary determines to be sufficient to cover the costs of such organizations' conducting the activities ^^»;, described in subparagraph (A) with respect to such facilities or agencies under part B of title XL". (c) EFFECTIVE DATE.—The amendments made by this section shall apply with respect to fiscal years beginning on or after October 1, 1988.

Subtitle B—Medicaid •

PART 1—ELIGIBILITY AND BENEFITS

SEC. 4101. MEDICAID BENEFITS FOR POOR CHILDREN AND PREGNANT WOMEN. "' (a) MEDICAID OPTIONAL COVERAGE FOR ADDITIONAL LOW-INCOME PREGNANT WOMEN AND CHILDREN.—

(1) Section 1902(1) of the Social Security Act (42 U.S.C. 1396a(l)) is amended— ... (A) in paragraph (2)— aj'.«... (J) ijy striking "(2) For purposes of paragraph (1)" and r^.-,y.,,. inserting "(2)(A) For purposes of paragraph (1) with " • ' " respect to individuals described in subparagraph (A) or ,,..^, ^ (B) of that paragraph", (ii) by striking "100 percent" and inserting "185 percent", and ',' (iii) by adding at the end the following new subparagraph: "(B) If a State elects, under subsection (a)(lOXAXiiXIX), to cover individuals not described in subparagraph (A) or (B) of paragraph (1), for purposes of that paragraph and with respect to individuals not described in such subparagraphs the State shall establish an income level which is a percentage (not more than 100 percent, or, if

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less, the percentage established under subparagraph (A)) of the income official poverty line described in subparagraph (A)."; and (B) in paragraph (3)(D), by inserting "appropriate" after flUoliGci is tiiG

(2) Section 1902(e)(4) of such Act (42 U.S.C. 1396a(e)(4)) is amended by adding at the end the following new sentence: w "During the period in which a child is deemed under the preceding sentence to be eligible for medical assistance, the ^^ medical assistance eligibility identification number of the mother shall also serve as the identification number of the child, and all claims shall be submitted and paid under such number (unless the State issues a separate identification number for the child before such period expires).". (3) The amendments made by this subsection shall apply to Effective date. 42 USC 1396a medical assistance furnished on or after July 1, 1988. note. (b)

ALLOWING ACCELERATED COVERAGE OF CHILDREN U P ' ' * TO

(1) Section 1902(1)(1) of such Act (42 U.S.C. 1396a(l)(l)) is amended— (A) by inserting "and" at the end of subparagraph (B), and (B) by striking subparagraphs (C) through (F) and inserting the following: "(C) children born after September 30, 1983, and who have attained one year of age but have not attained 2, 3, 4, or 5 years of age (as selected by the State),". (2)(A) Section 1902(1) of such Act is further amended— (i) in paragraph (3)(C), by striking ", (C), (D), (E), or (F)" and inserting "or (C)", and (ii) in paragraph (4)(B)(ii), by striking ", (D), (E), or (F)". (B) Section 1902(e)(7) of such Act (42 U.S.C. 1396a(e)(7)) is amended by striking ", (C), (D), (E), or (F)" and inserting "or (C)". (C) Section 9401(fK2) of the Omnibus Budget Reconciliation Act of 1986 is amended by striking "(A)" after "(2)" and by striking subparagraphs (B) through (D). (3) The amendments made by this subsection shall apply with respect to medical assistance furnished on or after July 1, 1988.

-.

i: f

< (c) COVERAGE OF CHILDREN U P *^ TO AGE 8.—

K i

8

42 USC 1396a note. Effective date. 42 USC 1396a note.

(1) Section 1905(n)(2) of such Act (42 U.S.C. 1396d(n)(2)) is amended by striking "is under 5 years of age" and inserting "has not attained the age of 7 (or any age designated by the State that exceeds 7 but does not exceed 8)". (2) Section 1902(1)(1)(C) of such Act, as amended by subsection (b)(l)(B), is further amended by striking "or 5 years" and inserting "5, 6, 7, or 8 years". (3)(A) The amendments made by this subsection shall apply to Effective date. 42 USC 1396d medical assistance furnished on or after October 1, 1988. note. (B) For purposes of section 1905(n)(2) of the Social Security Act (as amended by subsection (a)) for medical assistance furnished during fiscal year 1989, any reference to "age of 7" is deemed to be a reference to "age of 6". (d) PREMIUM.—

 * Copy read "UP".
 * 'Copy read "UP".

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PUBLIC LAW 100-203—DEC. 22, 1987

(1) Section 1916 of the Social Security Act (42 U.S.C. 1396o) is amended— (A) in subsection (a)(1), by inserting "(except for a premium imposed under subsection (c))" before the semicolon; (B) by redesignating subsections (c) and (d) as subsections (d) and (e), respectively; and (C) by inserting after subsection (b) the following new subsection: "(c)(1) The State plan of a State may at the option of the State provide for imposing a monthly premium (in an amount that does not exceed the limit established under paragraph (2)) with respect to an individual described in subparagraph (A) or (B) of section 1902(1)(1) who is receiving medical assistance on the basis of section • 1902(a)(10XAXiiXIX) and whose family income (as determined in accordance with the methodology specified in section 1902(1)(3)) equals or exceeds 150 percent of the nonfarm income official poverty line (as defined by the Office of Management and Budget, and revised annually in accordance with section 673(2) of the Omnibus Budget Reconciliation Act of 1981) applicable to a family of the size involved. "(2) In no case may the amount of any premium imposed under paragraph (1) exceed 10 percent of the amount by which the family income (less expenses for the care of a dependent child) of an individual exceeds 150 percent of the line described in paragraph (1). "(3) A State shall not require prepayment of a premium imposed pursuant to paragraph (1) and shall not terminate eligibility of an individual for medical assistance under this title on the basis of failure to pay any such premium until such failure continues for a period of not less than 60 days. The State may waive payment of any such premium in any case where the State determines that requiring such payment would create an undue hardship. "(4) A State may permit State or local funds available under other programs to be used for payment of a premium imposed under paragraph (1). Payment of a premium with such funds shall not be '" counted as income to the individual with respect to whom such payment is made.". Effective date. (2) The amendments made by paragraph (1) shall become 42 USC 13960 effective on July 1, 1988. note.

(e) MiSCELXANEOUS PROVISIONS RELATING TO SERVICES FOR PREGNANT W O M E N A N D CHILDREN.—

.

^

(1) Section 1902(a)(10) of such Act (42 U.S.C. 1396a(a)(10)) is amended, in subdivision (VII) of the matter following subparagraph (E), by striking "and postpartum" and inserting "postpartum, and family planning". (2) Section 1902(e)(5) of such Act (42 U.S.C. 1396a(e)(5)) is amended by striking "until the end of the 60-day period beginning on the last day of her pregnancy" and inserting "through the end of the month in which the 60-day period (beginning on the last day of her pregnancy) ends". (3) Section 1902(1)(3)(E) of such Act (42 U.S.C. 1396a(l)(3)(E)) is amended by inserting after "title IV" the following: "(except to the extent such methodology is inconsistent with clause (D) of subsection (a)(17))". (4) Section 1902(1)(4)(A) of such Act (42 U.S.C. 1396a(l)(4)(A)) is amended by striking "April 17, 1986" and inserting "July 1, 1987".

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(5) Section 1902(1)(4) of such Act (42 U.S.C. 1396a(l)(4)) is amended by adding at the end the following new subparagraph: "(C) A State plan may not provide, in its election of the option of furnishing medical assistance to individuals described in paragraph (1), that such individuals must apply for benefits under part A of title IV as a condition of applying for, or receiving, medical assistance under this title.". (6)(A) The amendment made by paragraph ^o (i) shall become Effective dates. effective on the date of enactment of this Act. ^2JJSC I396a note. (B) The amendments made by paragraphs (2) and (3) shall be effective as if they had been included in the enactment of the Consolidated Omnibus Budget Reconciliation Act of 1985. (C) The amendment made by paragraph (4) shall apply to elections made on or after the enactment of this Act. (D) The amendment made by paragraph (5) shall apply as if included in the enactment of section 9401 of the Omnibus Budget Reconciliation Act of 1986. SEC. 4102. HOME AND COMMUNITY-BASED SERVICES FOR THE ELDERLY. (a) IN GENERAL.—

(1) Section 1915 of the Social Security Act (42 U.S.C. 1396n) is amended— (A) by transferring subsection (d) to the end of such section and redesignating it as subsection (h), and (B) by inserting after subsection (c) the following new subsection: "(d)(1) Subject to paragraph (2), the Secretary shall grant a waiver to provide that a State plan approved under this title shall include as 'medical assistance' under such plan payment for part or all of the cost of home or community-based services (other than room and board) which are provided pursuant to a written plan of care to individuals 65 years of age or older with respect to whom there has been a determination that but for the provision of such services the individuals would be likely to require the level of care provided in a skilled nursing facility or intermediate care facility the cost of which could be reimbursed under the State plan. "(2) A wgdver shall not be granted under this subsection unless the State provides assurances satisfactory to the Secretary that— "(A) necessary safeguards (including adequate standards for provider participation) have been taken to protect the health and welfare of individuals provided services under the waiver and to assure financial accountability for funds expended with respect to such services; (B) with respect to individuals 65 years of age or older who— "(i) are entitled to medical assistance for skilled nursing or intermediate care facility services under the State plan, ',. "(ii) may require such services, and "(iii) may be eligible for such home or community-based services under such waiver, the State will provide for an evaluation of the need for such skilled nursing facility or intermediate care facility services; and "(C) such individuals who are determined to be likely to require the level of care provided in a skilled nursing facility or intermediate care facility are informed of the feasible alter*° Ckjpy read "paragraphs".

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/,

'; ',.,

PUBLIC LAW 100-203—DEC. 22, 1987

natives to the provision of skilled nursing facility or intermediate care facility services, which such individuals may choose if available under the waiver. Each State with a waiver under this subsection shall provide to the Secretary annually, consistent with a reasonable data collection plan designed by the Secretary, information on the impact of the waiver granted under this subsection on the type and amount of medical assistance provided under the State plan and on the health and welfare of recipients. "(3) A waiver granted under this subsection may include a waiver of the requirements of section 1902(a)(l) (relating to statewideness), section 1902(a)(10XB) (relating to comparability), and section 1902(a)(10XCXiXni) (relating to income and resource rules applicable in the community). Subject to a termination by the State (with notice to the Secretary) at any time, a waiver under this subsection shall be for an initial term of 3 years and, upon the request of a State, shall be extended for additional 5-year periods unless the Secretary determines that for the previous waiver period the assurances provided under paragraph (2) have not been met. A waiver may provide, with respect to post-eligibility treatment of income of all individuals receiving services under the waiver, that the maximum amount of the individual's income which may be disregarded for any month is equal to the amount that may be allowed for that purpose under a waiver under subsection (c). "(4) A waiver under this subsection may, consistent with paragraph (2), provide medical Eissistance to individuals for case management services, homemaker/home health aide services and personal care services, adult day health services, respite care, and other medical and social services that can contribute to the health and well-being of individuals and their ability to reside in a communitybased care setting. "(5)(A) In the case of a State having a waiver approved under this subsection, notwithstanding any other provision of section 1903 to the contrary, the total amount expended by the State for medical assistance with respect to skilled nursing facility services, intermediate care facility services, and home and community-based services under the State plan for individuals 65 years of age or older during a waiver year under this subsection may not exceed the projected amount determined under subparagraph (B). "(B) For purposes of subparagraph (A), the projected amount under this subparagraph is the sum of the following: "(i) The aggregate amount of the State's medical assistance under this title for skilled nursing facility services and intermediate care facility services furnished to individuals who have attained the age of 65 for the base year increased by a percentage which is equal to the lesser of 7 percent times the number of years beginning after the base year and ending before the waiver year involved or the sum of— (I) the percentage increase (based on an appropriate market-basket index representing the costs of elements of ^"* such services) between the base year and the waiver year involved, plus "(II) the percentage increase between the base year and the W£dver year involved in the number of residents in the '^^ ^ State who have attained the age of 65, plus "(III) 2 percent for each year beginning after the base year and ending before the waiver year.

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101 STAT. 1330-145

"(ii) The aggregate amount of the State's medical assistance under this title for home and community-based services for individuals who have attained the age of 65 for the base year increased by a percentage which is equal to the lesser of 7 percent times the number of years beginning after the base year and ending before the waiver year involved or the sum of— "(I) the percentage increase (based on an appropriate market-basket index representing the costs of elements of 9ff' such services) between the base year and the waiver year involved, plus ' '"' j, " ^, "(ID the percentage increase between the base year and the waiver year involved in the number of residents in the State who have attained the age of 65, plus "(III) 2 percent for each year beginning after the base year and ending before the waiver year, "(iii) The Secretary shall develop and promulgate by regulation Regulations, (by not later than October 1, 1989)— "(I) a method, based on an index of appropriately weighted indicators of changes in the wages and prices of the mix of goods J«' t >8U:,|\ 9-ifia and services which comprise both skilled nursing facility services and intermediate care facility services (regardless of the source of payment for such services), for projecting the percentage increase for purposes of clause (i)(I); "(II) a method, based on an index of appropriately weighted indicators of changes in the wages and prices of the mix of goods and services which comprise home and community-based services (regardless of the source of payment for such services), for projecting the percentage increase for purposes of clause (iiXD; and "(III) a method for projecting, on a State specific basis, the percentage increase in the number of residents in each State who are over 75 years of age for any period. Effective on and after the date the Secretary promulgates the regulation under clause (iii), any reference in this subparagraph to the 'lesser of 7 percent' shall be deemed to be a reference to the 'greater of 7 percent'. "(C) In this paragraph: "(i) The term 'home and community-based services' includes services described in sections 1905(a)(7) and 1905(a)(8), services described in subsection (c)(4)(B), services described in paragraph (4)(B), personal care services, and services furnished pursuant to a waiver under subsection (c). "(iiXD Subject to subclause (II), the term 'base year' means the most recent year (ending before the date of the enactment of this subsection) for which actual final expenditures under this title have been reported to, and accepted by, the Secretary. "(II) For purposes of subparagraph (C), in the case of a State that does not report expenditures on the basis of the age categories described in such subparagraph for a year ending before the date of the enactment of this subsection, the term 'base year' means fiscal year 1989. "(iii) The term 'intermediate care facility services' does not include services furnished in an institution certified in accordance with section 1905(d). "(6)(A) A determination by the Secretary to deny a request for a waiver (or extension of waiver) under this subsection shall be subject to review to the extent provided under section 1116(b).

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Effective date. 42 USC 1396n uote.

42 USC 1396n note.

PUBLIC LAW 100-203—DEC. 22, 1987

"(B) Notwithstanding any other provision of this Act, if the Secretary denies a request of the State for an extension of a waiver under this subsection, any waiver under this subsection in effect on the date such request is made shall remain in effect for a period of not less than 90 days after the date on which the Secretary denies such request (or, if the State seeks review of such determination in accordance with subparagraph (A), the date on which a final determination is made with respect to such review).". (2) The amendments made by paragraph (1) shall become effective on January 1, 1988. (h) CONFORMING AMENDMENTS.—

(1) Section 1902(a)(10)(A)(ii)(VI) of such Act (42 U.S.C. 1396a(a)(10)(A)(iiXVI)) is amended by striking "section 1915(c)" each place it appears and inserting "subsection (c) or (d) of section 1915". (2) Section 1915(h) of such Act, as redesignated by subsection (a), is amended by striking "(c)" and inserting in lieu thereof "(c) or(d)". (c) EXTENSION OF WAIVER.—In the case of a State which, as of December 1, 1987, has a waiver approved with respect to elderly individuals under section 1915(c) of the Social Security Act, which waiver is scheduled to expire before July 1, 1988, if the State notifies the Secretary of Health and Human Services of the State's intention to file an application for a waiver under section 1915(d) of such Act (as amended by subsection (a) of this section), the Secretary shall extend approval of the State's waiver, under section 1915(c) of such Act, on the same terms and conditions through September 30, 1988. SEC. 4103. PHYSICIANS* SERVICES FURNISHED BY DENTISTS. (a) CLARIFYING COVERAGE.—Section 1905(a)(5) of the Social

Security Act (42 U.S.C. 1396d(a)(5)) is amended by inserting "(A)" after "(5)" and by inserting before the semicolon at the end the following: ", and (B) medical and surgical services furnished by a dentist (described in section 1861(r)(2)) to the extent such services may be performed under State law either by a doctor of medicine or by a doctor of dental surgery or dental medicine and would be described in subparagraph (A) if furnished by a physician (as defined in section 1861(r)(l))". 42 USC 1396d note.

(b) EFFECTIVE DATE.—

(1) The amendment made by subsection (a) applies (except as provided under paragraph (2)) to payments under title XIX of the Social Security Act for calendar quarters beginning on or after January 1, 1988, without regard to whether or not final regulations to carry out such amendment have been promulgated by such date. (2) In the case of a State plan for medical assistance under title XIX of the Social Security Act which the Secretary of Health and Human Services determines requires State legislation (other than legislation appropriating funds) in order for the plan to meet the additional requirement imposed by the amendment made by subsection (a), the State plan shall not be regarded as failing to comply with the requirements of such title solely on the basis of its failure to meet this additional requirement before the first day of the first calendar quarter beginning after the close of the first regular session of the State legislature that begins after the date of enactment of this Act.

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101 STAT. 1330-147

SEC. 4104. OPTIONAL MEDICAID COVERAGE OF INDIVIDUALS IN CERTAIN STATES RECEIVING ONLY OPTIONAL STATE SUPPLEMENTARY PAYMENTS.

Section 1902(a)(10)(A){ii) of the Social Security Act (42 U.S.C. 1396a(aK10)(A)(ii)) is amended— (1) by striking "or" at the end of subclause (IX) and inserting "or" at the end of subclause (X); and (2) by adding at the end the following new subclause: i^5^> "(XI) who receive only an optional State supplementary payment based on need and paid on a '^ J'" regular basis, equal to the difference between the individual's countable income and the income standard used to determine eligibility for such supplementary payment (with countable income being the income remaining after deductions as established by the State pursuant to standards that are more restrictive than the standards for supplementary security income benefits under title XVI), which are available to all individuals in the State (but which may be based on different income standards by political subdivision according to cost of living differences), and which are paid by a State that does not have an agreement with the Secretary under section 1616 or 1634.". SEC. 4105. CLARIFICATION OF COVERAGE OF CLINIC SERVICES FURNISHED TO HOMELESS OUTSIDE FACILITY.

(a) IN GENERAL.—Section 1905(a)(9) of the Social Security Act (42 U.S.C. 1396d(a)(9)) is amended by inserting before the semicolon at • ^' ' the end the following: ", including such services furnished outside the clinic by clinic personnel to an eligible individual who does not reside in a permanent dwelling or does not have a fixed home or mailing address". (b) EFFECTIVE DATE.—The amendment made by subsection (a) 42 USC I396d shall apply to services furnished on or after January 1, 1988, ^°^without regard to whether regulations to implement such amendment are promulgated by such date. SEC. 4106. MEDICALLY NEEDY INCOME LEVELS FOR CERTAIN 2-MEMBER COUPLES IN CALIFORNIA.

For purposes of section 1903(0(1)(B) of the Social Security Act, for payments made to California on or after July 1, 1983, in the Case of a family consisting only of two individuals both of whom are adults and at least one of whom is aged, blind, or disabled, the "highest amount which would ordinarily be paid to a family of the same size" under the State's plan approved under part A of title IV of such Act shall, at California's option, be the amount determined by the State agency to be the amount of the aid which would ordinarily be payable under such plan to a family which consists of one adult and two children and which is without any income or resources. Section 1902(a)(10)(C)(i)(III) of the Social Security Act shall not prevent California from establishing (under the previous sentence) an applicable income limitation for families described in that sentence which is greater than the income limitation applicable to other families, if California has an applicable income limitation under section 1903(f) of such Act which is equal to the maximum applicable income limitation permitted consistent with paragraph

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PUBLIC LAW 100-203—DEC. 22, 1987

(I)(B) of such section for families other than those described in the previous sentence. PART 2—OTHER PROVISIONS SEC. 4111. INCREASING THE MAXIMUM ANNUAL MEDICAID PAYMENTS ' '' THAT MAY BE MADE TO THE COMMONWEALTHS AND TERRITORIES.

42 USC 1308 "°*® 42 USC 1396a note.

(a) IN GENERAL.—Subsection (c) of section 1108 of the Social Security Act (42 U.S.C. 1308) is amended to read as follows: "(c) The total amount certified by the Secretary under title XIX with respect to a fiscal year for payment to— "(1) Puerto Rico shall not exceed (A) $73,400,000 for fiscal year 1988, (B) $76,200,000 for fiscal year 1989, and (C) $79,000,000 for fiscal year 1990 (and each succeeding fiscal year); "(2) the Virgin Islands shall not exceed (A) $2,430,000 for fiscal year 1988, (B) $2,515,000 for fiscal year 1989, and (C) $2,600,000 for fiscal year 1990 (and each succeeding fiscal year); "(3) Guam shall not exceed (A) $2,320,000 for fiscal year 1988, (B) $2,410,000 for fiscal year 1989, and (C) $2,500,000 for fiscal year 1990 (and each succeeding fiscal year); "(4) the Northern Mariana Islands shall not exceed (A) $636,700 for fiscal year 1988, (B) $693,350 for fiscal year 1989, and (C) $750,000 for fiscal year 1990 (and each succeeding fiscal year); and "(5) American Samoa shall not exceed (A) $1,330,000 for fiscal year 1988, (B) $1,390,000 for fiscal year 1989, and (C) $1,450,000 for fiscal year 1990 (and each succeeding fiscal year).". (b) EFFECTIVE DATE.—The amendment made by subsection (a) shall apply to payments for fiscal years beginning with fiscal year 1988. SEC. 4112. ADJUSTMENT IN MEDICAID PAYMENT FOR INPATIENT HOSPITAL SERVICES FURNISHED BY DISPROPORTIONATE SHARE HOSPITALS. (a) IMPLEMENTATION OF REQUIREMENT.—

•

J

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(1) A State's plan under title XIX of the Social Security Act shall not be considered to meet the requirement of section 1902(a)(13XA) of such Act (insofar as it requires payments to hospitals to take into account the situation of hospitals which serve a disproportionate number of low income patients with special needs), as of July 1, 1988, unless the State has submitted to the Secretary of Health and Human Services, by not later than such date, an amendment to such plan that— (A) specifically defines the hospitals so described (and includes in such definition any disproportionate share hospital described in subsection (b)(1) which meets the requirement of subsection (d)), and (B) provides, effective for inpatient hospital services provided not later than July 1, 1988, for an appropriate increase in the rate or amount of payment for such services provided by such hospitals, consistent with subsection (c). (2)(A) In order to be considered to have met such requirement of section 1902(a)(13XA) as of July 1, 1989, the State must submit to the Secretary of Health and Human Services by not later than such date, the State plan amendment described in paragraph (1), consistent with subsection (c).

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101 STAT. 1330-149

t

(B) In order to be considered to have met such requirement of section 1902(a)(13)(A) as of July 1, 1990, the State must submit to the Secretary of Health and Human Services by not later than such date, the State plan amendment described in paragraph (1), consistent with subsection (c). The Secretary shall, not later than June 30 of each year in which the State is required to submit an amendment under this subsection, review each such amendment for compliance with such requirement and by such date shall approve or disapprove each such amendment. If the Secretary disapproves such an amendment, the State shall immediately submit a revised amendment which meets such requirement. The requirement of this subsection may not be waived under section 1915(b)(4) of the Social Security Act. (b) HOSPITALS DEEMED DISPROPORTIONATE SHARE.—

(1) For purposes of subsection (a)(1), a hospital which meets the requirement of subsection (d) is deemed to be a disproport tionate share hospital if— (A) the hospital's medicaid inpatient utilization rate (as defined in paragraph (2)) is at lesist one standard deviation above the mean medicaid inpatient utilization rate for hospitals receiving medicaid payments in the State; or (B) the hospital's low-income utilization rate (as defined 1 in paragraph (3)) exceeds 25 percent. (2) For purposes of paragraph (1)(A), the term "medicaid inpatient utilization rate" means, for a hospital, a fraction (expressed as a percentage), the numerator of which is the hospital's number of inpatient days attributable to patients who (for such days) were eligible for medical assistance under the State plan approved under title XIX of the Social Security Act i in a period, and the denominator of which is the total number of the hospital's inpatient days in that period. (3) For purposes of paragraph (1)(B), the term "low-income utilization rate" means, for a hospital, the sum of— (A) the fraction (expressed as a percentage)— 1 (i) the numerator of which is the sum (for a period) of (I) the total revenues paid the hospital for patient services under a State plan under title XIX of the . _ Social Security Act and (II) the amount of the cash subsidies for patient services received directly from t; ' State and local governments, and (ii) the denominator of which is the total amount of revenues of the hospital for patient services (including c the amount of such cash subsidies) in the period; and (B) a fraction (expressed as a percentage)— (i) the numerator of which is the total amount of the "^ hospital's charges for inpatient hospital services which are attributable to charity care in a period, and s^c;,v (ii) the denominator of which is the total amount of the hospital's charges for inpatient hospital services in the hospital in the period. The numerator under subparagraph (B)(i) shall not include contractual allowances and discounts (other than for indigent patients not eligible for medical assistance under a State plan approved under title XIX of the Social Security Act). (c) PAYMENT ADJUSTMENT.—In order to be consistent with this subsection, a payment adjustment for a disproportionate share hospital must either—

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PUBLIC LAW 100-203—DEC. 22, 1987

(1) be in an amount equal to the product of (A) the amount paid under the State plan to the hospital for operating costs for inpatient hospital services (of the kind described in section 1886(a)(4)), and (B) the hospital's disproportionate share adjustment percentage (established under section 1886(d)(5)(F)(iv)); or (2) provide for a minimum specified additional payment amount (or increased percentage payment) and for an increase in such a payment amount (or percentage payment) in proportion to the percentage by which the hospital's medicaid utilization rate (as defined in subsection (b)(2)) exceeds one standard deviation above the mean medicaid inpatient utilization rate for hospitals receiving medicaid payments in the State; except that, for purposes of paragraphs (2)(A) and (2)(B), the payment adjustment for a disproportionate share hospital is consistent with this subsection if the appropriate increase in the rate or amount of payment is equal to one-third of the increase otherwise applicable under subsection (c) (in the case of paragraph (2)(A)) and two-thirds of such increase (in the case of paragraph (2)(B)). (d) REQUIREMENT TO ^^ QUALIFY AS DISPROPORTIONATE SHARE HOSPITAL.—

(1) Except as provided in paragraph (2), no hospital may be defined or deemed as a disproportionate share hospital under a State plan under title XIX of the Social Security Act or under subsection (b) of this section unless the hospital has at least 2 obstetricians who have staff privileges at the hospital and who have agreed to provide obstetric services to individuals who are entitled to medical assistance for such services under such State plan. (2)(A) Paragraph (1) shall not apply to a hospital— (i) the inpatients of which are predominantly individuals under 18 years of age; or (ii) which does not offer nonemergency obstetric services to the general population as of the date of the enactment of this Act. (B) In the case of a hospital located in a rural area (as defined for purposes of section 1886 of the Social Security Act), in paragraph (1) the term "obstetrician" includes any physician with staff privileges at the hospital to perform nonemergency obstetric procedures. (e) SPECIAL RULE.—A State plan shall be considered to meet the requirement of section 1902(a)(13XA) (insofar as it requires payments to hospitals to take into account the situation of hospitals which serve a disproportionate number of low income patients with special needs) without regard to the requirement of subsection (a) if the plan provided for payment adjustments for disproportionate share hospitals as of January 1, 1984, and if the aggregate amount of the payment adjustments under the plan for such hospitals is not less than the aggregate amount of such adjustments otherwise required to be made under such subsection. SEC. 4113. HMO-RELATED PROVISIONS. (a) TREATMENT OF GARDEN STATE HEALTH PLAN.—

42 USC 1396b.

(1) Section 1903(m) of the Social Security Act (42 U.S.C. 1396(m)) is amended— (A) by adding at the end the following new paragraph: " Copy read "TO".

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101 STAT. 1330-151

"(6)(A) For purposes of this subsection and section 1902(e)(2KA), in the Case of the State of New Jersey, the term 'contract' shall be deemed to include an undertaking by the State agency, in the State plan under this title, to operate a program meeting all requirements of this subsection. "(B) The undertaking described in subparagraph (A) must provide— "(i) for the establishment of a separate entity responsible for the operation of a program meeting the requirements of this subsection, which entity may be a subdivision of the State agency administering the State plan under this title; "(ii) for separate accounting for the funds used to operate such program; "(iii) for setting the capitation rates and any other payment rates for services provided in accordance with this subsection using a methodology satisfactory to the Secretary designed to ensure that total Federal matching payments under this title for such services will be lower than the matching payments that would be made for the same services, if provided under the State plan on a fee for service basis to an actuarially equivalent population; and "(iv) that the State agency will contract, for purposes of meeting the requirement under section 1902(a)(30)(C), with an organization or entity that under section 1154 reviews services provided by an eligible organization pursuant to a contract under section 1876 for the purpose of determining whether the quality of services meets professionally recognized standards of health care. "(C) The undertaking described in subparagraph (A) shall be subject to approval (and annual re-approval) by the Secretary in the same manner as a contract under this subsection. "(D) The undertaking described in subparagraph (A) shall not be eligible for a waiver under section 1915(b)."; and (B) in paragraph (2)(F), by striking all that precedes "a State plan may restrict" and inserting the following: " "(E) In the case of— ^^ "(i) a contract with an entity described in subparagraph (G) or with a qualified health maintenance organization (as defined in section 1310(d) of the Public Health Service Act) which meets the requirement of subparagraph (A)(ii), or "(ii) a program pursuant to an undertaking described in paragraph (6) in which at least 25 percent of the membership enrolled on a prepaid basis are individuals who (I) are not insured for benefits under part B of title XVIII or eligible for benefits under this title, and (II) (in the case of such individuals whose prepayments are made in whole or in part by any government entity) had the opportunity at the time of enrollment in the program to elect other coverage of health care costs that would have been paid in whole or in part by any governmeffital entity,". (2) Section 1902(e)(2)(A) of such Act (42 U.S.C. 1396a(e)(2)(A)) is amended by striking "section 1903(m)(2)(G)" and inserting "paragraph (2)(G) or (6) of section 1903(m)". »=• Copy read " '(F)".
 * ' Copy read "(i)".

Contracts.

Contracts.

Contracts.

^ Contracts.

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 101 STAT. 1330-152

PUBLIC LAW 100-203—DEC. 22, 1987

(b) MEDICAID MATCHING RATE FOR QUALITY REVIEW OF SERVICES.—

HMO

(1) Section 1902(a)(30)(C) of such Act (42 U.S.C. 1396a(a)(30)(C)) is amended by inserting ", an entity which meets the requirements of section 1152, as determined by the Secretary," after "title XI)". (2) Section 1902(d) of such Act (42 U.S.C. 1396a(d)) is amended— (i) by inserting after "contracts with" the following: "an entity which meets the requirements of section 1152, as determined by the Secretary, for the performance of the ^ g^ quality review functions described in subsection (a)(30)(C), or", and (ii) by striking "organization (or organizations)" each place it appears and inserting "such an entity or organization". (3) Section 1903(a)(3)(C) of such Act (42 U.S.C. 1396b(a)(3)(C)) is amended by inserting "or by an entity which meets the requirements "of section 1152, as determined by the Secretary," after "utilization and quality control peer review organization".

Contracts.

(c) FREEDOM OF CHOICE.— .aJos-f^ri':

l'v>

Effective date. 42 USC 1396a note.

(1) Section 1902(a)(23) of such Act (42 U.S.C. 1396a(a)(23)) is amended— (A) by inserting "(A)" after "Guam, provide that", and (B) by inserting before the semicolon at the end the following: ", and (B) an enrollment of an individual eligible for medical assistance in a primary care case-management system (described in section 1915(b)(l)), a health maintenance organization, or a similar entity shall not restrict the choice of the qualified person from whom the individual may receive services under section 1905(a)(4)(C)". (2) Section 1902(e)(2)(A) of such Act (42 U.S.C. 1396a(e)(2)(A)) is amended by striking "but only" and inserting "but, except for benefits furnished under section 1905(a)(4)(C), only". (3) The amendments made by this subsection shall apply to services furnished on and after July 1, 1988. (d) TECHNICAL AMENDMENTS.—

'

(1) Section 1903(m)(2)(F) of such Act (42 U.S.C. 1396b(m)(2)(F)) is amended by striking "subparagraph (G)" and inserting "subparagraphs (E) or (G)". (2) Section 1902(e)(2)(A) of such Act (42 U.S.C. 1396a(e)(2)(A)) is amended by striking "section 1903(m)(2)(G)" and inserting "subparagraph (B)(iii), (E), or (G) of section 1903(m)(2)".

(e) CONTINUED ELIGIBILITY AND RESTRICTION ON DISENROLLMENT WITHOUT CAUSE FOR METROPOUTAN HEALTH PLAN HMO.—For pur-

poses of sections 1902(e)(2)(A) and 1903(m)(2)(F) of the Social Security Act, the Metropolitan Health Plan HMO operated by the New York City public hospitals shall be treated in the same manner as a qualiHed health maintenance organization (as defined in section 1310(d) of the Public Health Service Act). SEC. 4114. MEDICAID WAIVER FOR HOSPICE CARE FOR AIDS PATIENTS.

Section 1905(o)(l) of the Social Security Act (42 U.S.C. 1396d(o)(l)) is amended— (1) by inserting "(A)" after "(1)"; (2) by striking "The" and inserting "Subject to subparagraph (B), the"; and

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101 STAT. 1330-153

(3) by adding at the end the following new subparagraph: "(B) For purposes of this title only, with respect to the definition of hospice program under section 1861(ddX2), the Secretary may allow an agency or organization to make the assurance under subparagraph (A)(iii) of such section without taking into account any individual who is afflicted with acquired immunodeficiency syndrome.". SEC. 4115. STATE DEMONSTRATION PROJECTS. (a) EXTENSION PROJECT.—

OF

ARIZONA

HEALTH

CARE

DEMONSTRATION

(1) Notwithstanding any limitations contained in section 1115 of the Social Security Act, but subject to paragraphs (2) and (3) of this subsection, the Secretary of Health and Human Services (in this subsection referred to as the "Secretary") upon application shall renew until September 30, 1989, approval of demonstration project number ll-P-98239/9-05 ("Arizona Health Care Cost Containment System—AHCCCS—A statewide approach to cost effective health care financing"), including all waivers granted by the Secretary under such section 1115 as of September 30, 1987. (2) The Secretary's renewed approval of the project under paragraph (1) shall— (A) subject to paragraph (3) be on the same terms and conditions that existed between the applicant and the Secretary as of September 30, 1987; and (B) remain in effect through September 30, 1989, unless the Secretary finds that the applicant no longer complies with such terms and conditions. (3) Nothing in this subsection shall be construed to prohibit or require the Secretary from granting additional waivers to the applicant— (A) for coverage of additional optional groups, and (B) for coverage of long-term care and other services which were not covered as of September 30, 1987.

ca-fo^s?!

O> NEW YORK STATE PILOT PROGRAM FOR PRENATAL, MATERNITY, t) AND NEWBORN CARE.—

(1) Upon application by the State of New York and approval by the Secretary of Health and Human Services (in this subsection referred to as the "Secretary"), the State of New York (in this subsection referred to as the "State") may conduct a demonstration project in accordance with this subsection for the purpose of testing its Prenatal/Maternity/Newborn Care Pilot Program (in this subsection referred to as the "Program"), as the Program is set forth in the Prenatal Care Act of 1987 (enacted by the State in February 1987), as an alternative to existing Federal programs. (2) Under the demonstration project conducted under this subsection— (A) any individual who receives benefits under the Program shall not receive any of such benefits under the plan of the State under title XIX of the Social Security Act; and .0 (B) the Secretary shall make payments to the State with respect to individuals receiving benefits under the Program in the same amounts as would be payable for such benefits liv „. under title XIX of the Social Security Act if such individ-

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 101 STAT. 1330-154

,

J w Reports.

,,.

PUBLIC LAW 100-203—DEC. 22, 1987

uals were receiving such benefits under such title (as determined by the Secretary). (3) The Secretary may (with respect to the demonstration project under this subsection) waive compliance with any requirement contained in section 1902(a)(1), 1902(a)(10XB), 1902(a)(17XD), 1902(a)(23), 1902(a)(30), or 1903(0 of the Social Security Act which (if applied) would prevent the State from carrying out the project, effectively achieving its purpose, or receiving payments in accordance with paragraph (2)(B). (4) As a condition of approval of the demonstration project under this subsection, the State shall provide assurances satisfactory to the Secretary that— (A) the State will continue to make benefits available under title XIX of the Social Security Act to all pregnant women entitled to receive benefits under such title to the extent such benefits are not provided under the Program; and (B) the State has in effect a quality assurance mechanism to ensure the quality and accessibility of the services furnished under the program. (5)(A) The demonstration project under this subsection shall be conducted for a period not to exceed three years. (B) The Secretary shall conduct an evaluation of the demonstration project under this subsection and shall report the results of such evaluation to the Congress not later than one year after completion of the project,

(c) WAIVERS FOR FAMILY INDEPENDENCE PROGRAM.—Upon

ap-

proval of the demonstration project relating to the Family Independence Program in the State of Washington and with respect to such project, the Secretary of Health and Human Services shall waive compliance with any requirements of sections 1902(a)(l), 1916, and 1924 of the Social Security Act, but only to the extent necessary to enable the State to carry out the project as enacted by the State of Washington in May 198f. SEC. 4116. WAIVER AUTHORITY UNDER THE MEDICAID PROGRAM FOR THE NORTHERN MARIANA ISLANDS.

Section 1902(j) of the Social Security Act (42 U.S.C. 1396a(j)) is amended— (1) by inserting "and the Northern Mariana Islands" after "American Samoa" the first place it appears; and (2) by inserting "or the Northern Mariana Islands" after "American Samoa" the second place it appears. 42 USC 1396b note.

SEC. 4117. DELAY QUALITY CONTROL SANCTIONS FOR MEDICAID.

The Secretary of Health and Human Services shall not, prior to July 1, 1988, implement any reductions in payments to States pursuant to section 1903(u) of the Social Security Act (or any provision of law described in subsection (c) of section 133 of the Tax Equity and Fiscal Responsibility Act of 1982). SEC. 4118. TECHNICAL AND MISCELLANEOUS AMENDMENTS. (a) SECTION 2176 WAIVER TECHNICALS.—

(1) Section 1915(c)(3) of the Social Security Act (42 U.S.C. 1396n(c)(3)) is amended by striking "and section 1902(a)(10XB) (relating to comparability)" and inserting ", section 1902(a)(10XB) (relating to comparability), and section

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 PUBLIC LAW 100-203—DEC. 22, 1987

101 STAT. 1330-155

1902(aK10)(C)(i)(III) (relating to income and resource rules applicable in the community)". (2) The amendment made by paragraph (1) shall be effective as if included in the enactment of the Omnibus Budget Reconciliation Act of 1986.

42 USC 1396n note.

flj) INCREASE IN NUMBER OF INDIVIDUALS WHO MAY ** BE SERVED UNDER MODEL HOME AND COMMUNITY-BASED SERVICES WAIVERS.—

Section 1915(c) of the Social Security Act (42 U.S.C. 1396n(c)) is amended by adding at the end the following new paragraph: "(10) No waiver under this subsection shall limit by an amount less than 200 the number of individuals in the State who may receive home and community-based services under such waiver.'. (c) KATIE BECKETT TECHNICAL.—

(1) Section 1902(e)(3)(C) of such Act (42 U.S.C. 1396a(e)(3)(C)) is amended by striking "to have a supplemental security income (or State supplemental) payment made with respect to him under title XVI" and inserting "for medical assistance under the State plan under this title". (2) The amendment made by paragraph (1) shall be effective 42 USC 1396a as if it were included in section 134 of the Tax Equity and Fiscal note. Responsibility Act of 1982. (d) ORGAN TRANSPLANT TECHNICAL.—

(1) Section 1903(i) of the Social Security Act (42 U.S.C. 1396b(i)) is amended— (A) in paragraph (1), by striking the period at the end and inserting "; or", and (B) by adding at the end the following new sentence: "Nothing in paragraph (1) shall be construed as permitting a State to provide services under its plan under this title that are not reasonable in amount, duration, and scope to achieve their purpose.". (2) The amendments made by paragraph (1) shall be effective Effective date. as if included in the enactment of section 9507 of the Consoli- 42 USC 1396b note. dated Omnibus Budget Reconciliation Act of 1985. (e) CIVIL MONEY PENALTY AND EXCLUSION CLARIFICATIONS.—

(1) Section 1128A(a)(l) of the Social Security Act (42 U.S.C. 1320a-7(a)(l)), as amended by section 3(a)(l) of the Medicare and Medicaid Patient and Program Protection Act of 1987 (Public i Law 100-93), is amended by striking "or has reason to know" each place it appears and inserting "or should know". (2) Section 1128(d)(3)(B) of the such Act (42 U.S.C. 1320a6(d)(3)(B)), as amended by section 2 of the Medicare and Medicaid Patient and Program Protection Act of 1987 (Public Law 100-93), is amended— (A) by inserting "(i)" after "(B)", and (B) by adding at the end the following new clause: "(ii) A State health care program may provide for a period of exclusion which is longer than the period of exclusion under a program under title XVIII.". (3) The amendment made by paragraph (1) shall apply to activities occurring before, on, or after the date of the enactment of this Act. (f) INCORPORATION OF CERTAIN PROVISIONS RELATING TO INDIAN HEALTH SERVICE FACILITIES.— •* Copy read "WHO MAY".

42 USC 1320a-7a.

42 USC 1320a-7.

Effective date. 42 USC 1320a-7a note.

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