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MEDICARE SUBVENTION FOR MILITARY RETIREES

Sec1896[42 U.S.C. 1395ggg] (a) Definitions.—In this section:

(1) Administering secretaries.—The term administering Secretaries means the Secretary and the Secretary of Defense acting jointly.

(2) Demonstration project; project.—The terms demonstration project and project mean the demonstration project carried out under this section.

(3) Designated provider.—The term designated provider has the meaning given that term in section 721(5) of the National Defense Authorization Act For Fiscal Year 1997 (Public Law 104–201; 110 Stat. 2593; 10 U.S.C. 1073 note).

(4) Medicare–eligible military retiree or dependent.—The term medicare–eligible military retiree or dependent means an individual described in section 1074(b) or 1076(b) of title 10, United States Code, who—

(A) is eligible for health benefits under section 1086 of such title by reason of subsection (c)(1) of such section;

(B)(i) is entitled to benefits under part A of this title; and

(ii) if the individual was entitled to such benefits before July 1, 1997, received health care items or services from a health care facility of the uniformed services before that date, but after becoming entitled to benefits under part A of this title;

(C) is enrolled for benefits under part B of this title; and

(D) has attained age 65.

(5) Medicare health care services.—The term medicare health care services means items or services covered under part A or B of this title.

(6) Military treatment facility.—The term military treatment facility means a facility referred to in section 1074(a) of title 10, United States Code.

(7) Tricare.—The term TRICARE has the same meaning as the term TRICARE program under section 711 of the National Defense Authorization Act for Fiscal Year 1996 (10 U.S.C. 1073 note).

(8) Trust funds.—The term trust funds means the Federal Hospital Insurance Trust Fund established in section 1817 and the Federal Supplementary Medical Insurance Trust Fund established in section 1841.

(b) Demonstration Project.—

(1) In general.—

(A) Establishment.—The administering Secretaries are authorized to establish a demonstration project (under an agreement entered into by the administering Secretaries) under which the Secretary shall reimburse the Secretary of Defense, from the trust funds, for medicare health care services furnished to certain medicare–eligible military retirees or dependents in a military treatment facility or by a designated provider.

(B) Agreement.—The agreement entered into under subparagraph (A) shall include at a minimum—

(i) a description of the benefits to be provided to the participants of the demonstration project established under this section;

(ii) a description of the eligibility rules for participation in the demonstration project, including any cost sharing requirements;

(iii) a description of how the demonstration project will satisfy the requirements under this title;

(iv) a description of the sites selected under paragraph (2);

(v) a description of how reimbursement requirements under subsection (i) and maintenance of effort requirements under subsection (j) will be implemented in the demonstration project;

(vi) a statement that the Secretary shall have access to all data of the Department of Defense that the Secretary determines is necessary to conduct independent estimates and audits of the maintenance of effort requirement, the annual reconciliation, and related matters required under the demonstration project;

(vii) a description of any requirement that the Secretary waives pursuant to subsection (d); and

(viii) a certification, provided after review by the administering Secretaries, that any entity that is receiving payments by reason of the demonstration project has sufficient—

(I) resources and expertise to provide, consistent with payments under subsection (i), the full range of benefits required to be provided to beneficiaries under the project; and

(II) information and billing systems in place to ensure the accurate and timely submission of claims for benefits and to ensure that providers of services, physicians, and other health care professionals are reimbursed by the entity in a timely and accurate manner.

(2) Number of sites.—The project established under this section shall be conducted in no more than 6 sites, designated jointly by the administering Secretaries after review of all TRICARE regions.

(3) Restriction.—No new military treatment facilities will be built or expanded with funds from the demonstration project.

(4) Duration.—The administering Secretaries shall conduct the demonstration project during the 4–year period beginning on January 1, 1998, except that the administering Secretaries may negotiate and (subject to section 712(f ) of the Floyd D. Spence National Defense Authorization Act for Fiscal Year 2001) enter into a new or revised agreement under paragraph (1)(A) to continue the project after the end of such period. If the project is so continued, the administering Secretaries may terminate the agreement under which the program operates after providing notice to Congress in accordance with subsection (k)(2)(B)(v).

(5) Report.—At least 60 days prior to the commencement of the demonstration project, the administering Secretaries shall submit a copy of the agreement entered into under paragraph (1) to the committees of jurisdiction under this title.

(c) Crediting of Payments.—A payment received by the Secretary of Defense under the demonstration project shall be credited to the applicable Department of Defense medical appropriation (and within that appropriation). Any such payment received during a fiscal year for services provided during a prior fiscal year may be obligated by the Secretary of Defense during the fiscal year during which the payment is received.

(d) Waiver of Certain Medicare Requirements.—

(1) Authority.—

(A) In general.—Except as provided under subparagraph (B), the demonstration project shall meet all requirements of Medicare+Choice plans under part D of this title and regulations pertaining thereto, and other requirements for receiving medicare payments, except that the prohibition of payments to Federal providers of services under sections 1814(c) and 1835(d), and paragraphs (2) and (3) of section 1862(a) shall not apply.

(B) Waiver.—Except as provided in paragraph (2), the Secretary is authorized to waive any requirement described under subparagraph (A), or approve equivalent or alternative ways of meeting such a requirement, but only if such waiver or approval—

(i) reflects the unique status of the Department of Defense as an agency of the Federal Government; and

(ii) is necessary to carry out the demonstration project.

(2) Beneficiary protections and other matters.—The demonstration project shall comply with the requirements of part D of this title that relate to beneficiary protections and other matters, including such requirements relating to the following areas:

(A) Enrollment and disenrollment.

(B) Nondiscrimination.

(C) Information provided to beneficiaries.

(D) Cost–sharing limitations.

(E) Appeal and grievance procedures.

(F) Provider participation.

(G) Access to services.

(H) Quality assurance and external review.

(I) Advance directives.

(J) Other areas of beneficiary protections that the Secretary determines are applicable to such project.

(e) Inspector General.—Nothing in the agreement entered into under subsection (b) shall limit the Inspector General of the Department of Health and Human Services from investigating any matters regarding the expenditure of funds under this title for the demonstration project, including compliance with the provisions of this title and all other relevant laws.

(f) Voluntary Participation.—Participation of medicare–eligible military retirees or dependents in the demonstration project shall be voluntary.

(g) Tricare Health Care Plans.—

(1) Modification of tricare contracts.—In carrying out the demonstration project, the Secretary of Defense is authorized to amend existing TRICARE contracts (including contracts with designated providers) in order to provide the medicare health care services to the medicare–eligible military retirees and dependents enrolled in the demonstration project consistent with part D of this title.

(2) Health care benefits.—The administering Secretaries shall prescribe the minimum health care benefits to be provided under such a plan to medicare–eligible military retirees or dependents enrolled in the plan. Those benefits shall include at least all medicare health care services covered under this title.

(h) Additional Plans.—Notwithstanding any provisions of title 10, United States Code, the administering Secretaries may agree to include in the demonstration project any of the Medicare+Choice plans described in section 1851(a)(2)(A), and such agreement may include an agreement between the Secretary of Defense and the Medicare+Choice organization offering such plan to provide medicare health care services to medicare–eligible military retirees or dependents and for such Secretary to receive payments from such organization for the provision of such services.

(i) Payments Based On Regular Medicare Payment Rates.—

(1) In general.—Subject to the succeeding provisions of this subsection, the Secretary shall reimburse the Secretary of Defense for services provided under the demonstration project at a rate equal to 95 percent of the amount paid to a Medicare+Choice organization under part D of this title with respect to such an enrollee. In cases in which a payment amount may not otherwise be readily computed, the Secretary shall establish rules for computing equivalent or comparable payment amounts.

(2) Exclusion of certain amounts.—In computing the amount of payment under paragraph (1), the following shall be excluded:

(A) Special payments.—Any amount attributable to an adjustment under subparagraphs (B) and (F) of section 1886(d)(5) and subsection (h) of such section.

(B) Percentage of capital payments.—An amount determined by the administering Secretaries for amounts attributable to payments for capital–related costs under subsection (g) of such section.

(3) Periodic payments from medicare trust funds.—Payments under this subsection shall be made—

(A) on a periodic basis consistent with the periodicity of payments under this title; and

(B) in appropriate part, as determined by the Secretary, from the trust funds.

(4) Cap on amount.—The aggregate amount to be reimbursed under this subsection pursuant to the agreement entered into between the administering Secretaries under subsection (b) shall not exceed a total of—

(A) $50,000,000 for calendar year 1998;

(B) $60,000,000 for calendar year 1999;

(C) $65,000,000 for calendar year 2000;and

(D) $70,000,000 for calendar year 2001.

(j) Maintenance of Effort.—

(1) Monitoring effect of demonstration program on costs to medicare program.—

(A) In general.—The administering Secretaries, in consultation with the Comptroller General, shall closely monitor the expenditures made under the medicare program for medicare–eligible military retirees or dependents during the period of the demonstration project compared to the expenditures that would have been made for such medicare– eligible military retirees or dependents during that period if the demonstration project had not been conducted. The agreement entered into by the administering Secretaries under subsection (b) shall require any participating military treatment facility to maintain the level of effort for space available care to medicare–eligible military retirees or dependents.

(B) Annual report by the comptroller general.—Not later than December 31 of each year during which the demonstration project is conducted, the Comptroller General shall submit to the administering Secretaries and the appropriate committees of Congress a report on the extent, if any, to which the costs of the Secretary under the medicare program under this title increased during the preceding fiscal year as a result of the demonstration project.

(2) Required response in case of increase in costs.—

(A) In general.—If the administering Secretaries find, based on paragraph (1), that the expenditures under the medicare program under this title increased (or are expected to increase) during a fiscal year because of the demonstration project, the administering Secretaries shall take such steps as may be needed—

(i) to recoup for the medicare program the amount of such increase in expenditures; and

(ii) to prevent any such increase in the future.

(B) Steps.—Such steps—

(i) under subparagraph (A)(i) shall include payment of the amount of such increased expenditures by the Secretary of Defense from the current medical care appropriation of the Department of Defense to the trust funds; and

(ii) under subparagraph (A)(ii) shall include suspending or terminating the demonstration project (in whole or in part) or lowering the amount of payment under subsection (i)(1).

(k) Evaluation and Reports.—

(1) Independent evaluation.—The Comptroller General of the United States shall conduct an evaluation of the demonstration project, and shall submit annual reports on the demonstration project to the administering Secretaries and to the committees of jurisdiction in the Congress. The first report shall be submitted not later than 12 months after the date on which the demonstration project begins operation, and the final report not later than 3 1/2 years after that date. The evaluation and reports shall include an assessment, based on the agreement entered into under subsection (b), of the following:

(A) Any savings or costs to the medicare program under this title resulting from the demonstration project.

(B) The cost to the Department of Defense of providing care to medicare–eligible military retirees and dependents under the demonstration project.

(C) A description of the effects of the demonstration project on military treatment facility readiness and training and the probable effects of the project on overall Department of Defense medical readiness and training.

(D) Any impact of the demonstration project on access to care for active duty military personnel and their dependents.

(E) An analysis of how the demonstration project affects the overall accessibility of the uniformed services treatment system and the amount of space available for point–of– service care, and a description of the unintended effects (if any) upon the normal treatment priority system.

(F) Compliance by the Department of Defense with the requirements under this title.

(G) The number of medicare–eligible military retirees and dependents opting to participate in the demonstration project instead of receiving health benefits through another health insurance plan (including benefits under this title).

(H) A list of the health insurance plans and programs that were the primary payers for medicare–eligible military retirees and dependents during the year prior to their participation in the demonstration project and the distribution of their previous enrollment in such plans and programs.

(I) Any impact of the demonstration project on private health care providers and beneficiaries under this title that are not enrolled in the demonstration project.

(J) An assessment of the access to care and quality of care for medicare–eligible military retirees and dependents under the demonstration project.

(K) An analysis of whether, and in what manner, easier access to the uniformed services treatment system affects the number of medicare–eligible military retirees and dependents receiving medicare health care services.

(L) Any impact of the demonstration project on the access to care for medicare–eligible military retirees and dependents who did not enroll in the demonstration project and for other individuals entitled to benefits under this title.

(M) A description of the difficulties (if any) experienced by the Department of Defense in managing the demonstration project and TRICARE contracts.

(N) Any additional elements specified in the agreement entered into under subsection (b).

(O) Any additional elements that the Comptroller General of the United States determines is appropriate to assess regarding the demonstration project.

(2) Report on extension and expansion of demonstration project.—Not later than 6 months after the date of the submission of the final report by the Comptroller General of the United States under paragraph (1), the administering Secretaries shall submit to Congress a report containing their recommendation as to—

(A) whether there is a cost to the health care program under this title in conducting the demonstration project, and whether the demonstration project could be expanded without there being a cost to such health care program or to the Federal Government;

(B) whether to extend the demonstration project or make the project permanent; and

(C) whether the terms and conditions of the project should be continued (or modified) if the project is extended or expanded.