SECTION 1. SHORT TITLE; TABLE OF CONTENTS.

    (a) Short Title.--This Act may be cited as the ``Medicare 
Protection and Fairness Act of 2000''.
    (b) Table of Contents.--The table of contents of this Act is as 
follows:

Sec. 1. Short title; table of contents.
     TITLE I--INCREASE IN PAYMENTS FOR INPATIENT HOSPITAL SERVICES

Sec. 101. Elimination of reduction to market basket percentage increase 
                            in fiscal years 2001 and 2002.
Sec. 102. Increase in payments for disproportionate share hospitals 
                            (DSH) in fiscal years 2001 and 2002.
Sec. 103. Elimination of reduction in payments for indirect costs of 
                            graduate medical education (IME).
        TITLE II--INCREASE IN PAYMENTS FOR HOME HEALTH SERVICES

Sec. 201. Elimination of 15 percent reduction under the prospective 
                            payment system.
    TITLE III--INCREASE IN PAYMENTS TO MEDICARE+CHOICE ORGANIZATIONS

        Subtitle A--Modifications to Risk Adjustment Methodology

Sec. 301. Application of budget neutrality principle to the new 
                            Medicare+Choice risk adjustment 
                            methodology.
Sec. 302. 10-year phase in for risk adjustment.
        Subtitle B--Modifications to the Blended Capitation Rate

Sec. 311. Election of application in 2001 and 2002 of 50:50 area-
                            specific and national percentages.
Sec. 312. Increase in national per capita Medicare+Choice growth 
                            percentage in 2001 and 2002.
 Subtitle C--Reporting Requirements for Medicare Health Care Services 
               Furnished in Military Treatment Facilities

Sec. 321. Reporting costs incurred under Medicare Subvention 
                            Demonstration Project for military 
                            retirees.

     TITLE I--INCREASE IN PAYMENTS FOR INPATIENT HOSPITAL SERVICES

SEC. 101. ELIMINATION OF REDUCTION TO MARKET BASKET PERCENTAGE INCREASE 
              IN FISCAL YEARS 2001 AND 2002.

    Section 1886(b)(3)(B)(i) of the Social Security Act (42 U.S.C. 
1395ww(b)(3)(B)(i)) is amended--
            (1) by striking subclauses (XVI) and (XVII);
            (2) by inserting ``and'' at the end of subclause (XV);
            (3) by redesignating subclause (XVIII) as subclause (XVI); 
        and
            (4) in subclause (XVI), as so redesignated, by striking 
        ``2003'' and inserting ``2001''.

SEC. 102. INCREASE IN PAYMENTS FOR DISPROPORTIONATE SHARE HOSPITALS 
              (DSH) IN FISCAL YEARS 2001 AND 2002.

    Section 1886(d)(5)(F)(ix) of the Social Security Act (42 U.S.C. 
1395ww(d)(5)(F)(ix)) is amended--
            (1) in subclause (III), by striking ``each of fiscal years 
        2000 and 2001,'' and inserting ``fiscal year 2000,''; and
            (2) in subclause (IV)--
                    (A) by striking ``fiscal year 2002,'' and inserting 
                ``each of fiscal years 2001 and 2002,''; and
                    (B) by striking ``reduced by 4 percent'' and 
                inserting ``reduced by 2 percent''.

SEC. 103. ELIMINATION OF REDUCTION IN PAYMENTS FOR INDIRECT COSTS OF 
              GRADUATE MEDICAL EDUCATION (IME).

    Section 1886(d)(5)(B) of the Social Security Act (42 U.S.C. 
1395ww(d)(5)(B)) is amended--
            (1) by striking subclauses (V), and (VI);
            (2) by adding ``and'' at the end of subclause (III); and
            (3) in subclause (IV)--
                    (A) by striking ``during fiscal year 2000,'' and 
                inserting ``on or after October 1, 1999,''; and
                    (B) by striking the semicolon at the end and 
                inserting a period.

        TITLE II--INCREASE IN PAYMENTS FOR HOME HEALTH SERVICES

SEC. 201. ELIMINATION OF 15 PERCENT REDUCTION UNDER THE PROSPECTIVE 
              PAYMENT SYSTEM.

    (a) In General.--Section 1895(b)(3)(A) of the Social Security Act 
(42 U.S.C. 1395fff(b)(3)(A)), as amended by sections 302(b) and 303(f) 
of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 
1999 (113 Stat. 1501A-359, 361), as enacted into law by section 
1000(a)(6) of Public Law 106-113, is amended to read as follows:
                    ``(A) Initial basis.--Under such system the 
                Secretary shall provide for computation of a standard 
                prospective payment amount (or amounts). Such amount 
                (or amounts) shall initially be based on the most 
                current audited cost report data available to the 
                Secretary and shall be computed in a manner so that the 
                total amounts payable under the system for the 12-month 
                period beginning on the date the Secretary implements 
                the system shall be equal to the total amount that 
                would have been made if the system had not been in 
                effect and if section 1861(v)(1)(L)(ix) had not been 
                enacted. Each such amount shall be standardized in a 
                manner that eliminates the effect of variations in 
                relative case mix and area wage adjustments among 
                different home health agencies in a budget neutral 
                manner consistent with the case mix and wage level 
                adjustments provided under paragraph (4)(A). Under the 
                system, the Secretary may recognize regional 
                differences or differences based upon whether or not 
                the services or agency are in an urbanized area.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
take effect as if included in the enactment of the Medicare, Medicaid, 
and SCHIP Balanced Budget Refinement Act of 1999 (Public Law 106-113).

    TITLE III--INCREASE IN PAYMENTS TO MEDICARE+CHOICE ORGANIZATIONS

        Subtitle A--Modifications to Risk Adjustment Methodology

SEC. 301. APPLICATION OF BUDGET NEUTRALITY PRINCIPLE TO THE NEW 
              MEDICARE+CHOICE RISK ADJUSTMENT METHODOLOGY.

    (a) In General.--Section 1853(a)(3) of the Social Security Act (42 
U.S.C. 1395w-23(a)(3)) is amended by adding at the end the following 
new subparagraph:
                    ``(E) Implementation in a budget neutral manner.--
                The methodology under this paragraph shall be designed 
                and implemented in a manner so that it does not result 
                in any material change in the aggregate level of 
                expenditures under this title compared to the level 
                that would have occurred if such methodology had not 
                been implemented (and if the previous risk adjustment 
                methodology used in 1998 had continued to be 
                implemented).''.
    (b) Effective Date.--The amendment made by subsection (a) takes 
effect on the date of the enactment of this Act and applies to payments 
for months beginning on or after January 2001.

SEC. 302. 10-YEAR PHASE-IN FOR RISK ADJUSTMENT.

    Section 1853(a)(3)(C)(ii) of the Social Security Act (42 U.S.C. 
1395w-23(a)(3)(C)(ii)) is amended to read as follows:
                            ``(ii) Phase-in.--Such risk adjustment 
                        methodology shall be implemented in a phased-in 
                        manner so that the methodology insofar as it 
                        makes adjustments to capitation rates for 
                        health status applies to 10 percent of \1/12\ 
                        of the annual Medicare+Choice capitation rate 
                        in each of 2000 through 2009.

        Subtitle B--Modifications to the Blended Capitation Rate

SEC. 311. ELECTION OF APPLICATION IN 2001 AND 2002 OF 50:50 AREA-
              SPECIFIC AND NATIONAL PERCENTAGES.

    Section 1853(c)(2) of the Social Security Act (42 U.S.C. 1395w-
23(c)(2)) is amended--
            (1) by striking the period at the end of subparagraph (F) 
        and inserting a semicolon; and
            (2) by adding after and below subparagraph (F) the 
        following: ``except that for either or both 2001 and 2002, a 
Medicare+Choice organization may elect to apply subparagraph (F) 
(rather than, with respect to 2001, subparagraph (D) or, with respect 
to 2002, subparagraph (E)).''.

SEC. 312. INCREASE IN NATIONAL PER CAPITA MEDICARE+CHOICE GROWTH 
              PERCENTAGE IN 2001 AND 2002.

    Section 1853(c)(6)(B) of the Social Security Act (42 U.S.C. 1395w-
23(c)(6)(B)) is amended--
            (1) by adding ``and'' at the end of clause (iii);
            (2) by striking clauses (iv) and (v); and
            (3) in clause (vi), by redesignating such clause as clause 
        (iv) and by striking ``2002'' and inserting ``2000''.

 Subtitle C--Reporting Requirements for Medicare Health Care Services 
               Furnished in Military Treatment Facilities

SEC. 321. REPORTING COSTS INCURRED UNDER MEDICARE SUBVENTION 
              DEMONSTRATION PROJECT FOR MILITARY RETIREES.

    (a) In General.--Section 1896 of the Social Security Act (42 U.S.C. 
1395ggg) is amended by adding at the end the following new subsection:
    ``(l) Reporting Costs Incurred Under the Project for Purposes of 
Calculating Medicare+Choice Payment Rates.--
            ``(1) Determination of costs.--For a year in which the 
        project is carried out in a military treatment facility, the 
        facility shall determine the aggregate costs that are incurred 
        under the project (and for which payment will be made from the 
        trust funds) for furnishing medicare health care services to 
        medicare-eligible military retirees or dependents under the 
        project in that year.
            ``(2) Report of calculated costs.--For purposes of 
        including the costs incurred under the project (as described in 
        paragraph (1)) in the calculation the annual Medicare+Choice 
        capitation rates in each Medicare+Choice payment area, a 
        military treatment facility shall submit to the Secretary the 
        determination made under paragraph (1) by not later than March 
        31 of the year that follows the year for which the facility has 
        made such determination.''.
    (b) Effective Date.--The amendment made by subsection (a) shall 
apply with respect to years beginning on or after January 1, 2000.
Title II: Increase in Payments for Home Health Services
 - Amends SSA title XVIII with regard to the prospective payment system (PPS) for home health services to eliminate the 15 percent reduction in the cost limits and per beneficiary limits under such PPS.
Makes such amendment effective as if included in the enactment of the Medicare, Medicaid, and SCHIP Balanced Budget Refinement Act of 1999.
Title III: Increase in Payments to Medicare+Choice Organizations
 - 
Subtitle A: Modifications to Risk Adjustment Methodology
 - Amends SSA title XVIII part C (Medicare+Choice) with respect to payments to Medicare+Choice organizations to require that the Medicare+Choice risk adjustment methodology be implemented in a budget neutral manner. Provides for a ten year phased-in implementation of such methodology.
Subtitle B: Modifications to the Blended Capitation Rate
 - Authorizes Medicare+Choice organizations to elect to apply blended capitation rate area-specific and national percentages for 2001 and 2002 (instead of one or the other in different years). Provides for an increase in the national per capita Medicare+Choice growth percentage in 2001 and 2002.
Subtitle C: Reporting Requirements for Medicare Health Care Services Furnished in Military Treatment Facilities
 - Amends SSA title XVIII with respect to the Medicare subvention demonstration project for military retirees to add reporting requirements for costs incurred under the project for purposes of calculating Medicare+Choice payment rates.
Medicare Protection and Fairness Act of 2000