US Laws - Affordable Health Care Act (HR3950F)
TITLE III--IMPROVING THE QUALITY AND EFFICIENCY OF HEALTH CARE
Subtitle C--Provisions Relating to Part C

SEC. 3201. MEDICARE ADVANTAGE PAYMENT. (4915)(1-click HTML)

(a) MA Benchmark Based on Plan"s Competitive Bids- (4916)

(1) IN GENERAL- Section 1853(j) of the Social Security Act (42 U.S.C. 1395w-23(j)) is amended-- (4917)

(A) by striking "Amounts- For purposes" and inserting "Amounts- (4918)

"(1) IN GENERAL- For purposes"; (4919)

(B) by redesignating paragraphs (1) and (2) as subparagraphs (A) and (B), respectively, and indenting the subparagraphs appropriately; (4920)

(C) in subparagraph (A), as redesignated by subparagraph (B)-- (4921)

(i) by redesignating subparagraphs (A) and (B) as clauses (i) and (ii), respectively, and indenting the clauses appropriately; and (4922)

(ii) in clause (i), as redesignated by clause (i), by striking "an amount equal to" and all that follows through the end and inserting "an amount equal to-- (4923)

"(I) for years before 2007, 1/12 of the annual MA capitation rate under section 1853(c)(1) for the area for the year, adjusted as appropriate for the purpose of risk adjustment; (4924)

"(II) for 2007 through 2011, 1/12 of the applicable amount determined under subsection (k)(1) for the area for the year; (4925)

"(III) for 2012, the sum of-- (4926)

"(aa) 2/3 of the quotient of-- (4927)

"(AA) the applicable amount determined under subsection (k)(1) for the area for the year; and (4928)

"(BB) 12; and (4929)

"(bb) 1/3 of the MA competitive benchmark amount (determined under paragraph (2)) for the area for the month; (4930)

"(IV) for 2013, the sum of-- (4931)

"(aa) 1/3 of the quotient of-- (4932)

"(AA) the applicable amount determined under subsection (k)(1) for the area for the year; and (4933)

"(BB) 12; and (4934)

"(bb) 2/3 of the MA competitive benchmark amount (as so determined) for the area for the month; (4935)

"(V) for 2014, the MA competitive benchmark amount for the area for a month in 2013 (as so determined), increased by the national per capita MA growth percentage, described in subsection (c)(6) for 2014, but not taking into account any adjustment under subparagraph (C) of such subsection for a year before 2004; and (4936)

"(VI) for 2015 and each subsequent year, the MA competitive benchmark amount (as so determined) for the area for the month; or"; (4937)

(iii) in clause (ii), as redesignated by clause (i), by striking "subparagraph (A)" and inserting "clause (i)"; (4938)

(D) by adding at the end the following new paragraphs: (4939)

"(2) COMPUTATION OF MA COMPETITIVE BENCHMARK AMOUNT- (4940)

"(A) IN GENERAL- Subject to subparagraph (B) and paragraph (3), for months in each year (beginning with 2012) for each MA payment area the Secretary shall compute an MA competitive benchmark amount equal to the weighted average of the unadjusted MA statutory non-drug monthly bid amount (as defined in section 1854(b)(2)(E)) for each MA plan in the area, with the weight for each plan being equal to the average number of beneficiaries enrolled under such plan in the reference month (as defined in section 1858(f)(4), except that, in applying such definition for purposes of this paragraph, "to compute the MA competitive benchmark amount under section 1853(j)(2)" shall be substituted for "to compute the percentage specified in subparagraph (A) and other relevant percentages under this part"). (4941)

"(B) WEIGHTING RULES- (4942)

"(i) SINGLE PLAN RULE- In the case of an MA payment area in which only a single MA plan is being offered, the weight under subparagraph (A) shall be equal to 1. (4943)

"(ii) USE OF SIMPLE AVERAGE AMONG MULTIPLE PLANS IF NO PLANS OFFERED IN PREVIOUS YEAR- In the case of an MA payment area in which no MA plan was offered in the previous year and more than 1 MA plan is offered in the current year, the Secretary shall use a simple average of the unadjusted MA statutory non-drug monthly bid amount (as so defined) for purposes of computing the MA competitive benchmark amount under subparagraph (A). (4944)

"(3) CAP ON MA COMPETITIVE BENCHMARK AMOUNT- In no case shall the MA competitive benchmark amount for an area for a month in a year be greater than the applicable amount that would (but for the application of this subsection) be determined under subsection (k)(1) for the area for the month in the year."; and (4945)

(E) in subsection (k)(2)(B)(ii)(III), by striking "(j)(1)(A)" and inserting "(j)(1)(A)(i)". (4946)

(2) CONFORMING AMENDMENTS- (4947)

(A) Section 1853(k)(2) of the Social Security Act (42 U.S.C. 1395w-23(k)(2)) is amended-- (4948)

(i) in subparagraph (A), by striking "through 2010" and inserting "and subsequent years"; and (4949)

(ii) in subparagraph (C)-- (4950)

(I) in clause (iii), by striking "and" at the end; (4951)

(II) in clause (iv), by striking the period at the end and inserting "; and"; and (4952)

(III) by adding at the end the following new clause: (4953)

"(v) for 2011 and subsequent years, 0.00.". (4954)

(B) Section 1854(b) of the Social Security Act (42 U.S.C. 1395w-24(b)) is amended-- (4955)

(i) in paragraph (3)(B)(i), by striking "1853(j)(1)" and inserting "1853(j)(1)(A)"; and (4956)

(ii) in paragraph (4)(B)(i), by striking "1853(j)(2)" and inserting "1853(j)(1)(B)". (4957)

(C) Section 1858(f) of the Social Security Act (42 U.S.C. 1395w-27(f)) is amended-- (4958)

(i) in paragraph (1), by striking "1853(j)(2)" and inserting "1853(j)(1)(B)"; and (4959)

(ii) in paragraph (3)(A), by striking "1853(j)(1)(A)" and inserting "1853(j)(1)(A)(i)". (4960)

(D) Section 1860C-1(d)(1)(A) of the Social Security Act (42 U.S.C. 1395w-29(d)(1)(A)) is amended by striking "1853(j)(1)(A)" and inserting "1853(j)(1)(A)(i)". (4961)

(b) Reduction of National Per Capita Growth Percentage for 2011- Section 1853(c)(6) of the Social Security Act (42 U.S.C. 1395w-23(c)(6)) is amended-- (4962)

(1) in clause (v), by striking "and" at the end; (4963)

(2) in clause (vi)-- (4964)

(A) by striking "for a year after 2002" and inserting "for 2003 through 2010"; and (4965)

(B) by striking the period at the end and inserting a comma; and (4966)

(C) by adding at the end the following new clauses: (4967)

"(vii) for 2011, 3 percentage points; and (4968)

"(viii) for a year after 2011, 0 percentage points.". (4969)

(c) Enhancement of Beneficiary Rebates- Section 1854(b)(1)(C)(i) of the Social Security Act (42 U.S.C. 1395w-24(b)(1)(C)(i)) is amended by inserting "(or 100 percent in the case of plan years beginning on or after January 1, 2014)" after "75 percent". (4970)

(d) Bidding Rules- (4971)

(1) REQUIREMENTS FOR INFORMATION SUBMITTED- Section 1854(a)(6)(A) of the Social Security Act (42 U.S.C. 1395w-24(a)(6)(A)) is amended, in the flush matter following clause (v), by adding at the end the following sentence: "Information to be submitted under this paragraph shall be certified by a qualified member of the American Academy of Actuaries and shall meet actuarial guidelines and rules established by the Secretary under subparagraph (B)(v).". (4972)

(2) ESTABLISHMENT OF ACTUARIAL GUIDELINES- Section 1854(a)(6)(B) of the Social Security Act (42 U.S.C. 1395w-24(a)(6)(B)) is amended-- (4973)

(A) in clause (i), by striking "(iii) and (iv)" and inserting "(iii), (iv), and (v)"; and (4974)

(B) by adding at the end the following new clause: (4975)

"(v) ESTABLISHMENT OF ACTUARIAL GUIDELINES- (4976)

"(I) IN GENERAL- In order to establish fair MA competitive benchmarks under section 1853(j)(1)(A)(i), the Secretary, acting through the Chief Actuary of the Centers for Medicare & Medicaid Services (in this clause referred to as the "Chief Actuary"), shall establish-- (4977)

"(aa) actuarial guidelines for the submission of bid information under this paragraph; and (4978)

"(bb) bidding rules that are appropriate to ensure accurate bids and fair competition among MA plans. (4979)

"(II) DENIAL OF BID AMOUNTS- The Secretary shall deny monthly bid amounts submitted under subparagraph (A) that do not meet the actuarial guidelines and rules established under subclause (I). (4980)

"(III) REFUSAL TO ACCEPT CERTAIN BIDS DUE TO MISREPRESENTATIONS AND FAILURES TO ADEQUATELY MEET REQUIREMENTS- In the case where the Secretary determines that information submitted by an MA organization under subparagraph (A) contains consistent misrepresentations and failures to adequately meet requirements of the organization, the Secretary may refuse to accept any additional such bid amounts from the organization for the plan year and the Chief Actuary shall, if the Chief Actuary determines that the actuaries of the organization were complicit in those misrepresentations and failures, report those actuaries to the Actuarial Board for Counseling and Discipline.". (4981)

(3) EFFECTIVE DATE- The amendments made by this subsection shall apply to bid amounts submitted on or after January 1, 2012. (4982)

(e) MA Local Plan Service Areas- (4983)

(1) IN GENERAL- Section 1853(d) of the Social Security Act (42 U.S.C. 1395w-23(d)) is amended-- (4984)

(A) in the subsection heading, by striking "MA Region" and inserting "MA Region; MA Local Plan Service Area"; (4985)

(B) in paragraph (1), by striking subparagraph (A) and inserting the following: (4986)

"(A) with respect to an MA local plan-- (4987)

"(i) for years before 2012, an MA local area (as defined in paragraph (2)); and (4988)

"(ii) for 2012 and succeeding years, a service area that is an entire urban or rural area, as applicable (as described in paragraph (5)); and"; and (4989)

(C) by adding at the end the following new paragraph: (4990)

"(5) MA LOCAL PLAN SERVICE AREA- For 2012 and succeeding years, the service area for an MA local plan shall be an entire urban or rural area in each State as follows: (4991)

"(A) URBAN AREAS- (4992)

"(i) IN GENERAL- Subject to clause (ii) and subparagraphs (C) and (D), the service area for an MA local plan in an urban area shall be the Core Based Statistical Area (in this paragraph referred to as a "CBSA") or, if applicable, a conceptually similar alternative classification, as defined by the Director of the Office of Management and Budget. (4993)

"(ii) CBSA COVERING MORE THAN ONE STATE- In the case of a CBSA (or alternative classification) that covers more than one State, the Secretary shall divide the CBSA (or alternative classification) into separate service areas with respect to each State covered by the CBSA (or alternative classification). (4994)

"(B) RURAL AREAS- Subject to subparagraphs (C) and (D), the service area for an MA local plan in a rural area shall be a county that does not qualify for inclusion in a CBSA (or alternative classification), as defined by the Director of the Office of Management and Budget. (4995)

"(C) REFINEMENTS TO SERVICE AREAS- For 2015 and succeeding years, in order to reflect actual patterns of health care service utilization, the Secretary may adjust the boundaries of service areas for MA local plans in urban areas and rural areas under subparagraphs (A) and (B), respectively, but may only do so based on recent analyses of actual patterns of care. (4996)

"(D) ADDITIONAL AUTHORITY TO MAKE LIMITED EXCEPTIONS TO SERVICE AREA REQUIREMENTS FOR MA LOCAL PLANS- The Secretary may, in addition to any adjustments under subparagraph (C), make limited exceptions to service area requirements otherwise applicable under this part for MA local plans that have in effect (as of the date of enactment of the Patient Protection and Affordable Care Act)-- (4997)

"(i) agreements with another MA organization or MA plan that preclude the offering of benefits throughout an entire service area; or (4998)

"(ii) limitations in their structural capacity to support adequate networks throughout an entire service area as a result of the delivery system model of the MA local plan.". (4999)

(2) CONFORMING AMENDMENTS- (5000)

(A) IN GENERAL- (5001)

(i) Section 1851(b)(1) of the Social Security Act (42 U.S.C. 1395w-21(b)(1)) is amended by striking subparagraph (C). (5002)

(ii) Section 1853(b)(1)(B)(i) of such Act (42 U.S.C. 1395w-23(b)(1)(B)(i))-- (5003)

(I) in the matter preceding subclause (I), by striking "MA payment area" and inserting "MA local area (as defined in subsection (d)(2))"; and (5004)

(II) in subclause (I), by striking "MA payment area" and inserting "MA local area (as so defined)". (5005)

(iii) Section 1853(b)(4) of such Act (42 U.S.C. 1395w-23(b)(4)) is amended by striking "Medicare Advantage payment area" and inserting "MA local area (as so defined)". (5006)

(iv) Section 1853(c)(1) of such Act (42 U.S.C. 1395w-23(c)(1)) is amended-- (5007)

(I) in the matter preceding subparagraph (A), by striking "a Medicare Advantage payment area that is"; and (5008)

(II) in subparagraph (D)(i), by striking "MA payment area" and inserting "MA local area (as defined in subsection (d)(2))". (5009)

(v) Section 1854 of such Act (42 U.S.C. 1395w-24) is amended by striking subsection (h). (5010)

(B) EFFECTIVE DATE- The amendments made by this paragraph shall take effect on January 1, 2012. (5011)

(f) Performance Bonuses- (5012)

(1) MA PLANS- (5013)

(A) IN GENERAL- Section 1853 of the Social Security Act (42 U.S.C. 1395w-23) is amended by adding at the end the following new subsection: (5014)

"(n) Performance Bonuses- (5015)

"(1) CARE COORDINATION AND MANAGEMENT PERFORMANCE BONUS- (5016)

"(A) IN GENERAL- For years beginning with 2014, subject to subparagraph (B), in the case of an MA plan that conducts 1 or more programs described in subparagraph (C) with respect to the year, the Secretary shall, in addition to any other payment provided under this part, make monthly payments, with respect to coverage of an individual under this part, to the MA plan in an amount equal to the product of-- (5017)

"(i) 0.5 percent of the national monthly per capita cost for expenditures for individuals enrolled under the original medicare fee-for-service program for the year; and (5018)

"(ii) the total number of programs described in clauses (i) through (ix) of subparagraph (C) that the Secretary determines the plan is conducting for the year under such subparagraph. (5019)

"(B) LIMITATION- In no case may the total amount of payment with respect to a year under subparagraph (A) be greater than 2 percent of the national monthly per capita cost for expenditures for individuals enrolled under the original medicare fee-for-service program for the year, as determined prior to the application of risk adjustment under paragraph (4). (5020)

"(C) PROGRAMS DESCRIBED- The following programs are described in this paragraph: (5021)

"(i) Care management programs that-- (5022)

"(I) target individuals with 1 or more chronic conditions; (5023)

"(II) identify gaps in care; and (5024)

"(III) facilitate improved care by using additional resources like nurses, nurse practitioners, and physician assistants. (5025)

"(ii) Programs that focus on patient education and self-management of health conditions, including interventions that-- (5026)

"(I) help manage chronic conditions; (5027)

"(II) reduce declines in health status; and (5028)

"(III) foster patient and provider collaboration. (5029)

"(iii) Transitional care interventions that focus on care provided around a hospital inpatient episode, including programs that target post-discharge patient care in order to reduce unnecessary health complications and readmissions. (5030)

"(iv) Patient safety programs, including provisions for hospital-based patient safety programs in contracts that the Medicare Advantage organization offering the MA plan has with hospitals. (5031)

"(v) Financial policies that promote systematic coordination of care by primary care physicians across the full spectrum of specialties and sites of care, such as medical homes, capitation arrangements, or pay-for-performance programs. (5032)

"(vi) Programs that address, identify, and ameliorate health care disparities among principal at-risk subpopulations. (5033)

"(vii) Medication therapy management programs that are more extensive than is required under section 1860D-4(c) (as determined by the Secretary). (5034)

"(viii) Health information technology programs, including clinical decision support and other tools to facilitate data collection and ensure patient-centered, appropriate care. (5035)

"(ix) Such other care management and coordination programs as the Secretary determines appropriate. (5036)

"(D) CONDUCT OF PROGRAM IN URBAN AND RURAL AREAS- An MA plan may conduct a program described in subparagraph (C) in a manner appropriate for an urban or rural area, as applicable. (5037)

"(E) REPORTING OF DATA- Each Medicare Advantage organization shall provide to the Secretary the information needed to determine whether they are eligible for a care coordination and management performance bonus at a time and in a manner specified by the Secretary. (5038)

"(F) PERIODIC AUDITING- The Secretary shall provide for the annual auditing of programs described in subparagraph (C) for which an MA plan receives a care coordination and management performance bonus under this paragraph. The Comptroller General shall monitor auditing activities conducted under this subparagraph. (5039)

"(2) QUALITY PERFORMANCE BONUSES- (5040)

"(A) QUALITY BONUS- For years beginning with 2014, the Secretary shall, in addition to any other payment provided under this part, make monthly payments, with respect to coverage of an individual under this part, to an MA plan that achieves at least a 3 star rating (or comparable rating) on a rating system described in subparagraph (C) in an amount equal to-- (5041)

"(i) in the case of a plan that achieves a 3 star rating (or comparable rating) on such system 2 percent of the national monthly per capita cost for expenditures for individuals enrolled under the original medicare fee-for-service program for the year; and (5042)

"(ii) in the case of a plan that achieves a 4 or 5 star rating (or comparable rating on such system, 4 percent of such national monthly per capita cost for the year. (5043)

"(B) IMPROVED QUALITY BONUS- For years beginning with 2014, in the case of an MA plan that does not receive a quality bonus under subparagraph (A) and is an improved quality MA plan with respect to the year (as identified by the Secretary), the Secretary shall, in addition to any other payment provided under this part, make monthly payments, with respect to coverage of an individual under this part, to the MA plan in an amount equal to 1 percent of such national monthly per capita cost for the year. (5044)

"(C) USE OF RATING SYSTEM- For purposes of subparagraph (A), a rating system described in this paragraph is-- (5045)

"(i) a rating system that uses up to 5 stars to rate clinical quality and enrollee satisfaction and performance at the Medicare Advantage contract or MA plan level; or (5046)

"(ii) such other system established by the Secretary that provides for the determination of a comparable quality performance rating to the rating system described in clause (i). (5047)

"(D) DATA USED IN DETERMINING SCORE- (5048)

"(i) IN GENERAL- The rating of an MA plan under the rating system described in subparagraph (C) with respect to a year shall be based on based on the most recent data available. (5049)

"(ii) PLANS THAT FAIL TO REPORT DATA- An MA plan which does not report data that enables the Secretary to rate the plan for purposes of subparagraph (A) or identify the plan for purposes of subparagraph (B) shall be counted, for purposes of such rating or identification, as having the lowest plan performance rating and the lowest percentage improvement, respectively. (5050)

"(3) QUALITY BONUS FOR NEW AND LOW ENROLLMENT MA PLANS- (5051)

"(A) NEW MA PLANS- For years beginning with 2014, in the case of an MA plan that first submits a bid under section 1854(a)(1)(A) for 2012 or a subsequent year, only receives enrollments made during the coverage election periods described in section 1851(e), and is not able to receive a bonus under subparagraph (A) or (B) of paragraph (2) for the year, the Secretary shall, in addition to any other payment provided under this part, make monthly payments, with respect to coverage of an individual under this part, to the MA plan in an amount equal to 2 percent of national monthly per capita cost for expenditures for individuals enrolled under the original medicare fee-for-service program for the year. In its fourth year of operation, the MA plan shall be paid in the same manner as other MA plans with comparable enrollment. (5052)

"(B) LOW ENROLLMENT PLANS- For years beginning with 2014, in the case of an MA plan that has low enrollment (as defined by the Secretary) and would not otherwise be able to receive a bonus under subparagraph (A) or (B) of paragraph (2) or subparagraph (A) of this paragraph for the year (referred to in this subparagraph as a "low enrollment plan"), the Secretary shall use a regional or local mean of the rating of all MA plans in the region or local area, as determined appropriate by the Secretary, on measures used to determine whether MA plans are eligible for a quality or an improved quality bonus, as applicable, to determine whether the low enrollment plan is eligible for a bonus under such a subparagraph. (5053)

"(4) RISK ADJUSTMENT- The Secretary shall risk adjust a performance bonus under this subsection in the same manner as the Secretary risk adjusts beneficiary rebates described in section 1854(b)(1)(C). (5054)

"(5) NOTIFICATION- The Secretary, in the annual announcement required under subsection (b)(1)(B) for 2014 and each succeeding year, shall notify the Medicare Advantage organization of any performance bonus (including a care coordination and management performance bonus under paragraph (1), a quality performance bonus under paragraph (2), and a quality bonus for new and low enrollment plans under paragraph (3)) that the organization will receive under this subsection with respect to the year. The Secretary shall provide for the publication of the information described in the previous sentence on the Internet website of the Centers for Medicare & Medicaid Services." (5055)

(B) CONFORMING AMENDMENT- Section 1853(a)(1)(B) of the Social Security Act (42 U.S.C. 1395w-23(a)(1)(B)) is amended-- (5056)

(i) in clause (i), by inserting "and any performance bonus under subsection (n)" before the period at the end; and (5057)

(ii) in clause (ii), by striking "(G)" and inserting "(G), plus the amount (if any) of any performance bonus under subsection (n)". (5058)

(2) APPLICATION OF PERFORMANCE BONUSES TO MA REGIONAL PLANS- Section 1858 of the Social Security Act (42 U.S.C. 1395w-27a) is amended-- (5059)

(A) in subsection (f)(1), by striking "subsection (e)" and inserting "subsections (e) and (i)"; and (5060)

(B) by adding at the end the following new subsection: (5061)

"(i) Application of Performance Bonuses to MA Regional Plans- For years beginning with 2014, the Secretary shall apply the performance bonuses under section 1853(n) (relating to bonuses for care coordination and management, quality performance, and new and low enrollment MA plans) to MA regional plans in a similar manner as such performance bonuses apply to MA plans under such subsection.". (5062)

(g) Grandfathering Supplemental Benefits for Current Enrollees After Implementation of Competitive Bidding- Section 1853 of the Social Security Act (42 U.S.C. 1395w-23), as amended by subsection (f), is amended by adding at the end the following new subsection: (5063)

"(o) Grandfathering Supplemental Benefits for Current Enrolles After Implementation of Competitive Bidding- (5064)

"(1) IDENTIFICATION OF AREAS- The Secretary shall identify MA local areas in which, with respect to 2009, average bids submitted by an MA organization under section 1854(a) for MA local plans in the area are not greater than 75 percent of the adjusted average per capita cost for the year involved, determined under section 1876(a)(4), for the area for individuals who are not enrolled in an MA plan under this part for the year, but adjusted to exclude costs attributable to payments under section 1848(o), 1886(n), and 1886(h). (5065)

"(2) ELECTION TO PROVIDE REBATES TO GRANDFATHERED ENROLLEES- (5066)

"(A) IN GENERAL- For years beginning with 2012, each Medicare Advantage organization offering an MA local plan in an area identified by the Secretary under paragraph (1) may elect to provide rebates to grandfathered enrollees under section 1854(b)(1)(C). In the case where an MA organization makes such an election, the monthly per capita dollar amount of such rebates shall not exceed the applicable amount for the year (as defined in subparagraph (B)). (5067)

"(B) APPLICABLE AMOUNT- For purposes of this subsection, the term "applicable amount" means-- (5068)

"(i) for 2012, the monthly per capita dollar amount of such rebates provided to enrollees under the MA local plan with respect to 2011; and (5069)

"(ii) for a subsequent year, 95 percent of the amount determined under this subparagraph for the preceding year. (5070)

"(3) SPECIAL RULES FOR PLANS IN IDENTIFIED AREAS- Notwithstanding any other provision of this part, the following shall apply with respect to each Medicare Advantage organization offering an MA local plan in an area identified by the Secretary under paragraph (1) that makes an election described in paragraph (2): (5071)

"(A) PAYMENTS- The amount of the monthly payment under this section to the Medicare Advantage organization, with respect to coverage of a grandfathered enrollee under this part in the area for a month, shall be equal to-- (5072)

"(i) for 2012 and 2013, the sum of-- (5073)

"(I) the bid amount under section 1854(a) for the MA local plan; and (5074)

"(II) the applicable amount (as defined in paragraph (2)(B)) for the MA local plan for the year. (5075)

"(ii) for 2014 and subsequent years, the sum of-- (5076)

"(I) the MA competitive benchmark amount under subsection (j)(1)(A)(i) for the area for the month, adjusted, only to the extent the Secretary determines necessary, to account for induced utilization as a result of rebates provided to grandfathered enrollees (except that such adjustment shall not exceed 0.5 percent of such MA competitive benchmark amount); and (5077)

"(II) the applicable amount (as so defined) for the MA local plan for the year. (5078)

"(B) REQUIREMENT TO SUBMIT BIDS UNDER COMPETITIVE BIDDING- The Medicare Advantage organization shall submit a single bid amount under section 1854(a) for the MA local plan. The Medicare Advantage organization shall remove from such bid amount any effects of induced demand for care that may result from the higher rebates available to grandfathered enrollees under this subsection. (5079)

"(C) NONAPPLICATION OF BONUS PAYMENTS AND ANY OTHER REBATES- The Medicare Advantage organization offering the MA local plan shall not be eligible for any bonus payment under subsection (n) or any rebate under this part (other than as provided under this subsection) with respect to grandfathered enrollees. (5080)

"(D) NONAPPLICATION OF UNIFORM BID AND PREMIUM AMOUNTS TO GRANDFATHERED ENROLLEES- Section 1854(c) shall not apply with respect to the MA local plan. (5081)

"(E) NONAPPLICATION OF LIMITATION ON APPLICATION OF PLAN REBATES TOWARD PAYMENT OF PART B PREMIUM- Notwithstanding clause (iii) of section 1854(b)(1)(C), in the case of a grandfathered enrollee, a rebate under such section may be used for the purpose described in clause (ii)(III) of such section. (5082)

"(F) RISK ADJUSTMENT- The Secretary shall risk adjust rebates to grandfathered enrollees under this subsection in the same manner as the Secretary risk adjusts beneficiary rebates described in section 1854(b)(1)(C). (5083)

"(4) DEFINITION OF GRANDFATHERED ENROLLEE- In this subsection, the term "grandfathered enrollee" means an individual who is enrolled (effective as of the date of enactment of this subsection) in an MA local plan in an area that is identified by the Secretary under paragraph (1).". (5084)

(h) Transitional Extra Benefits- Section 1853 of the Social Security Act (42 U.S.C. 1395w-23), as amended by subsections (f) and (g), is amended by adding at the end the following new subsection: (5085)

"(p) Transitional Extra Benefits- (5086)

"(1) IN GENERAL- For years beginning with 2012, the Secretary shall provide transitional rebates under section 1854(b)(1)(C) for the provision of extra benefits (as specified by the Secretary) to enrollees described in paragraph (2). (5087)

"(2) ENROLLEES DESCRIBED- An enrollee described in this paragraph is an individual who-- (5088)

"(A) enrolls in an MA local plan in an applicable area; and (5089)

"(B) experiences a significant reduction in extra benefits described in clause (ii) of section 1854(b)(1)(C) as a result of competitive bidding under this part (as determined by the Secretary). (5090)

"(3) APPLICABLE AREAS- In this subsection, the term "applicable area" means the following: (5091)

"(A) The 2 largest metropolitan statistical areas, if the Secretary determines that the total amount of such extra benefits for each enrollee for the month in those areas is greater than $100. (5092)

"(B) A county where-- (5093)

"(i) the MA area-specific non-drug monthly benchmark amount for a month in 2011 is equal to the legacy urban floor amount (as described in subsection (c)(1)(B)(iii)), as determined by the Secretary for the area for 2011; (5094)

"(ii) the percentage of Medicare Advantage eligible beneficiaries in the county who are enrolled in an MA plan for 2009 is greater than 30 percent (as determined by the Secretary); and (5095)

"(iii) average bids submitted by an MA organization under section 1854(a) for MA local plans in the county for 2011 are not greater than the adjusted average per capita cost for the year involved, determined under section 1876(a)(4), for the county for individuals who are not enrolled in an MA plan under this part for the year, but adjusted to exclude costs attributable to payments under section 1848(o), 1886(n), and 1886(h). (5096)

"(C) If the Secretary determines appropriate, a county contiguous to an area or county described in subparagraph (A) or (B), respectively. (5097)

"(4) REVIEW OF PLAN BIDS- In the case of a bid submitted by an MA organization under section 1854(a) for an MA local plan in an applicable area, the Secretary shall review such bid in order to ensure that extra benefits (as specified by the Secretary) are provided to enrollees described in paragraph (2). (5098)

"(5) FUNDING- The Secretary shall provide for the transfer from the Federal Hospital Insurance Trust Fund under section 1817 and the Federal Supplementary Medical Insurance Trust Fund established under section 1841, in such proportion as the Secretary determines appropriate, of an amount not to exceed $5,000,000,000 for the period of fiscal years 2012 through 2019 for the purpose of providing transitional rebates under section 1854(b)(1)(C) for the provision of extra benefits under this subsection.". (5099)

(i) Nonapplication of Competitive Bidding and Related Provisions and Clarification of MA Payment Area for PACE Programs- (5100)

(1) NONAPPLICATION OF COMPETITIVE BIDDING AND RELATED PROVISIONS FOR PACE PROGRAMS- Section 1894 of the Social Security Act (42 U.S.C. 1395eee) is amended-- (5101)

(A) by redesignating subsections (h) and (i) as subsections (i) and (j), respectively; (5102)

(B) by inserting after subsection (g) the following new subsection: (5103)

"(h) Nonapplication of Competitive Bidding and Related Provisions Under Part C- With respect to a PACE program under this section, the following provisions (and regulations relating to such provisions) shall not apply: (5104)

"(1) Section 1853(j)(1)(A)(i), relating to MA area-specific non-drug monthly benchmark amount being based on competitive bids. (5105)

"(2) Section 1853(d)(5), relating to the establishment of MA local plan service areas. (5106)

"(3) Section 1853(n), relating to the payment of performance bonuses. (5107)

"(4) Section 1853(o), relating to grandfathering supplemental benefits for current enrollees after implementation of competitive bidding. (5108)

"(5) Section 1853(p), relating to transitional extra benefits.". (5109)

(2) SPECIAL RULE FOR MA PAYMENT AREA FOR PACE PROGRAMS- Section 1853(d) of the Social Security Act (42 U.S.C. 1395w-23(d)), as amended by subsection (e), is amended by adding at the end the following new paragraph: (5110)

"(6) SPECIAL RULE FOR MA PAYMENT AREA FOR PACE PROGRAMS- For years beginning with 2012, in the case of a PACE program under section 1894, the MA payment area shall be the MA local area (as defined in paragraph (2)).". (5111)

  

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