SECTION 1. SHORT TITLE.

    This Act may be cited as the ``Medicare+Choice Accountability Act 
of 2001''.

SEC. 2. EXTENSION OF INITIAL MEDICARE+CHOICE CONTRACT PERIOD TO 3 
              YEARS.

    (a) Requirement for 3-Year Contracts.--Section 1857(c)(1) of the 
Social Security Act (42 U.S.C. 1395w-27(c)(1)) is amended--
            (1) by redesignating the matter following the heading as 
        subparagraph (A) and inserting ``In general.--'' after ``(A)'';
            (2) in subparagraph (A), as so redesignated--
                    (A) by striking ``a term of at least 1 year'' and 
                inserting ``an initial term of at least 3 years''; and
                    (B) by striking ``from term to term'' and inserting 
                ``for additional 3-year periods thereafter''; and
            (3) by adding at the end the following new subparagraphs:
                    ``(B) Limitation on modification of benefits and 
                premiums during the contract period.--A Medicare+Choice 
                organization under a contract with the Secretary under 
                this section may not modify premiums and benefits under 
                the Medicare+Choice plan offered by the organization 
                for the duration of that contract unless the Secretary 
                determines that such modifications would increase the 
                value of the coverage under the plan.
                    ``(C) Prohibition on withdrawing from parts of a 
                service area.--A Medicare+Choice organization under a 
                contract with the Secretary under this section may not 
                withdraw from any part of the service area in which it 
                offers a Medicare+Choice plan.''.
    (b) Payment Amount.--Section 1853(c) of such Act (42 U.S.C. 1395w-
23(c)) is amended to read as follows:
    ``(c) Calculation of Annual Medicare+Choice Capitation Rates.--
            ``(1) Adjusted average per capita amount.--For purposes of 
        this part, subject to paragraph (2), each annual 
        Medicare+Choice capitation rate, for a Medicare+Choice payment 
        area for a contract year consisting of a calendar year, is 
        equal to the Secretary's estimate of the adjusted average per 
        capita cost (as determined under section 1876(a)(4)) for the 
        payment area and contract year.
            ``(2) Exclusion of medical education costs.--In determining 
        the amounts under paragraph (1), the Secretary shall not take 
        into account payments attributable to--
                    ``(A) graduate medical education payments under 
                section 1886(h);
                    ``(B) disproportionate share hospital payments 
                described in section 1886(d)(5)(F); or
                    ``(C) indirect costs of medical education described 
                in section 1886(d)(5)(B).''.
    (c) Service Areas Requirements.--Section 1852 of such Act (42 
U.S.C. 1395w-22) is amended by adding at the end the following new 
subsection:
    ``(m) Service Areas.--
            ``(1) Designation by Secretary.--Taking into account 
        factors such as commercial rating patterns, the Secretary shall 
        designate geographic areas as service areas for purposes of 
        this part. Such areas may be portions of a State or an entire 
        State.
            ``(2) Prohibition on counties being in multiple service 
        areas.--In no case may a county or equivalent area, or portion 
        thereof, be included in more than one service area designated 
        by the Secretary under paragraph (1).''.
    (d) Benefits.--
            (1) Requirement for uniform benefits for all enrollees 
        residing in the service area.--
                    (A) In general.--Section 1852(a) of such Act (42 
                U.S.C. 1395w-22(a)) is amended--
                    (i)(I) in paragraph (2)(C), by striking ``may elect 
                to'' and inserting ``shall''; and
                    (II) in the heading of such paragraph by striking 
                ``Election of'' and inserting ``Requirement for''; and
                    (ii) by adding at the end the following new 
                paragraph:
            ``(6) Requirement for uniform benefits in a service area.--
                    ``(A) In general.--Subject to subparagraph (B), a 
                Medicare+Choice plan shall provide the same benefits to 
                all enrollees in a service area (designated by the 
                Secretary under subsection (m)).
                    ``(B) Adaption by health maintenance 
                organizations.--In applying subparagraph (A) in the 
                case of a plan that is a health maintenance 
                organization, if limitations in provider contracts 
                prevent the plan from maintaining the provider 
                contracts in certain parts of a service area, the plan 
                may establish a preferred provider network or fee-for-
                service plan in those parts of the service area, but 
                only if the cost-sharing applicable to such a network 
                or plan is not established in a manner that discourages 
                enrollment of residents in those parts of the service 
                area.''.
                    (B) Conforming repeal of authority to use of 
                segments of service areas.--Section 1854 of such Act 
                (42 U.S.C. 1395w-24) is amended by striking subsection 
                (h).
            (2) No requirement for supplemental benefits.--
                    (A) In general.--Section 1854(f)) of such Act (42 
                U.S.C. 1395w-24(f))) is amended by adding at the end 
                the following new paragraph:
            ``(5) Application of provision.--The provisions of this 
        subsection shall not apply for any year with respect to which a 
        Medicare+Choice organization has entered into a 3-year contract 
        with the Secretary under section 1857(c)(1).''.
                    (B) Conforming amendment.--Section 1852(a)(1)(B) of 
                such Act (42 U.S.C. 1395w-22(a)(1)(B)) is amended by 
                inserting before the period the following: ``for any 
                year with respect to which a Medicare+Choice 
                organization has entered into a 3-year contract with 
                the Secretary under section 1857(c)(1)''.
    (e) Effective Date.--The amendments made by this section shall 
apply to contracts entered into on or after January 1, 2002.

SEC. 3. CONTINUOUS OPEN ENROLLMENT AND DISENROLLMENT.

    (a) In General.--Section 1851(e)(2) of the Social Security Act (42 
U.S.C. 1395w-21(e)(2)) is amended to read as follows:
            ``(2) Continuous open enrollment and disenrollment.--
        Subject to paragraph (5), a Medicare+Choice eligible individual 
        may change the election under subsection (a)(1) at any time.''.
    (b) Conforming Amendments.--
            (1) Medicare+choice.--Section 1851(e) of such Act (42 
        U.S.C. 1395w-21(e)) is amended--
                    (A) in paragraph (4)--
                            (i) by striking ``Effective as of January 
                        1, 2002, an'' and inserting ``An'';
                            (ii) by striking ``other than during an 
                        annual, coordinated election period'';
                            (iii) by inserting ``in a special election 
                        period for such purpose'' after ``make a new 
                        election under this section''; and
                            (iv) by striking the second sentence; and
                    (B) in paragraphs (5)(B) and (6)(A), by striking 
                ``the first sentence of''.
            (2) Permitting reenrollment in medigap when m+c plans 
        reduce benefits.--
                    (A) In general.--Clause (ii) of section 
                1882(s)(3)(B) of such Act (42 U.S.C. 1395ss(s)(3)(B)) 
                is amended--
                            (i) by striking ``under the first sentence 
                        of'' each place it appears and inserting 
                        ``during a special election period provided for 
                        under''; and
                            (ii) by inserting ``(including a reduction 
                        in benefits offered under a Medicare+Choice 
                        plan from year to year)'' after ``section 
                        1851(e)(4)''.
                    (B) Conforming amendment.--Clause (iii) of such 
                section is amended--
                            (i) by striking ``under the first sentence 
                        of'' and inserting ``during a special election 
                        period provided for under''; and
                            (ii) by inserting ``(including a reduction 
                        in benefits offered under a Medicare+Choice 
                        plan from year to year)'' after ``section 
                        1851(e)(4)''.
    (c) Effective Date.--The amendments made by this section shall 
apply with respect to plan years beginning on or after January 1, 2002.
Medicare + Choice Accountability Act of 2001 - Amends the Social Security Act to: (1) extend the Medicare + Choice contract period to three years; and (2) permit continuous open enrollment or disenrollment.
To amend part C of title XVIII to require Medicare+Choice organizations to offer Medicare+Choice plans for a minimum period of three years, and to permit Medicare beneficiaries to enroll and disenroll from such plans at any time.